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Date:
21 May 2015

Draft transcript - Thursday, 21 May 2015

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

First Reading

Hon PAULA BENNETT (Minister for Social Housing): I move, That the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill be now read a first time. This Government has embarked on an ambitious programme to improve social housing and support more vulnerable New Zealanders. This bill will allow the Government to build on the crucial initiatives announced in the social housing reform programme to increase the supply of social housing and support more people in suitable housing that meets their needs while they need it. The Government will spend more than $700 million this year on the income-related rent subsidy and that will increase by $154 million over the next 3 years. The number of social housing places available increases from about 62,000 currently to 65,000 by 2018. This bill does four things. The first, and most important of these, is the introduction of the ministerial direction power to allow the Minister for Social Housing, in consultation with other housing Ministers, to authorise the Ministry of Social Development to enter into tailored agreements to purchase social housing places. Currently social housing is paid for via the income-related rent subsidy. Income-related rent is paid by the tenant and is no more than 25 percent of their income while the second component, the income-related rent subsidy, is paid by the Ministry of Social Development and makes up the difference between the market rent and the income-related rent. The Ministry of Social Development is not able to negotiate prices or tailor contracts in any other way that allows social housing provision to be looked at differently and incentivises providers to enter the market. That is stopping the growth of community providers and means tenants are not always getting the best services. This bill retains the income-related rent payment in the Housing Restructuring and Tenancy Matters Act so that providers who want to continue with income-related rent subsidy payments can do so. But it also allows the Ministry of Social Development to enter into tailored agreements so that the terms, conditions, and price can be negotiated to promote better social housing outcomes and attract organisations into social housing. To be clear, nothing in this bill will change tenants’ eligibility for the income-related rent subsidies or how much they will have to pay in rent. What it does do is allow the Ministry of Social Development to explore other arrangements, such as long-term fixed-price tenancies that meet the needs of the Crown, provider, and tenants. Longer-term contracts assure that when a provider has a place available, this place will be offered to a person on the social housing register. Providers would have the certainty of a contract with the Government—that they will be paid to house a certain number of people over a certain length of time, and they can still be paid for properties when they are vacant for short periods before tenants. This means if they are looking to finance construction or buy properties, they have the guarantee of an income stream that they can use to borrow against. Providers have asked for the certainty so that they can make long-term investment decisions. This will increase the supply of social housing and see more local organisations investing in homes for their communities. Long-term contracts will also guarantee the Ministry of Social Development’s supply so that it knows it can place tenants with providers as their properties become available. Tailored agreements will allow the Government to pay more or less for certain tenants depending on their level of need. Pricing for these sorts of arrangements should be able to focus on the actual costs of supporting people, not just some pre-prescribed formula; it will be the ability to negotiate these kinds of deals that can help get the right providers who offer the best services and quality housing for different cohorts of people. For example, the Ministry of Social Development may want to enter into an agreement with a provider who specialises in people with disabilities. They will be able to pay more for the extra services that these people might need. This bill is being passed through all stages under urgency so that we can help the community housing sector to increase the supply of social housing places, particularly in Auckland, as soon as possible. In December the Ministry of Social Development released a registration of interest to providers who are interested in supplying 300 social housing places in Auckland. There was a large response with 19 community housing providers taking part. Their feedback was clear: that they need more flexibility and contracting to provide more places in Auckland. This bill will allow them to do that. This is an opportunity for the Ministry of Social Development to relieve pressure on the social housing register and engage further with the community housing sector about the different types of contracting arrangements it needs. Tailored agreements are not restricted to just community housing providers. Housing New Zealand Corporation is the largest player in the market, and tailored agreements will be available to them as well. The legislation also makes three minor amendments to other bills. It ensures that payments for residential social housing provision under these agreements are GST-exempt, consistent with the current treatment of residential rental payments. It clarifies that Housing New Zealand Corporation is no longer required to provide policy advice to Ministers. This role is being undertaken by the Ministry of Business, Innovation and Employment and its predecessor, the Department of Building and Housing, since 2011. Minor amendments are being made to first-home withdrawal rules in the KiwiSaver Act. These ensure that any prior period of membership in a complying superannuation fund should count towards a 3-year eligibility period when the member transfers to KiwiSaver. This means that more KiwiSaver members have access to their savings to assist with the purchase of a first home. This bill is a major step in the Government’s social housing reforms and enables the Ministry of Social Development to be a smarter purchaser of social housing. We are backing tenants by creating a social housing sector that can house more people in housing that suits their needs, provide essential support services, and assist them back to housing independence where appropriate. I commend this bill to the House.

[Continuation Line: Phil Twyford]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - PHIL TWYFORD (Labour—Te Atatū)

PHIL TWYFORD (Labour—Te Atatū): The National Party is trying to brand this Budget as a Budget of compassionate conservatism. What gives the lie to that particular piece of double-speak is that the very first piece of legislation they try to ram through the House after this Budget is legislation that basically is designed to help them flog off State houses in a fire sale at knock-down prices to their developer mates. It is the big payoff. It is the big payback. Actually, it is not compassionate conservatism at all; it is Cabinet club conservatism. That is what this is about: flicking off State houses to your developer mates at knock-down prices, and throwing State house tenants out on to the street and breaking up communities. That is the hallmark of this National Government and what they are doing for State housing in this country. The bill is all about flexible purchasing. It is so flexible it is all about giving the Minister the flexibility to do sweetheart deals with property developers because they are desperate to sell off State houses to anybody who will take them. They know that our most respected social agency, the Salvation Army, looked at this policy and said that it will not improve the lives of tenants. They ruled themselves out. They said: “We do not want to have a bar of it.”, and so did the Methodist Mission. Bill English was forced to concede that only by flogging off these houses to property developers will they achieve their ambition of divesting thousands of State houses worth billions of dollars off the Government books. This Government has been a bystander for the last 6 years as a housing crisis has got worse and worse. House prices in Auckland went up 87 percent in the last 6 years. The average house price went up by over $100,000 in the last 12 months. We have got families living in cars and garages, and yet the Prime Minister is deep in denial. He says that there is no housing crisis. He says that there is no risk of a bust. But things are all fine in Parnell apparently. New Zealanders desperately wanted the Government finally in this Budget to do something about the housing crisis. That is what people wanted and they have been cruelly let down today, even though there is all the evidence that for the last few weeks since the Governor of the Reserve Bank gave them a bollocking in this Parliament about the failure of this Government to do anything about the housing crisis they have been in a poll-driven panic to try to come up with things that make it look as if they doing something about the housing crisis.

[Continuation Line: We have seen its half-hearted measure to target property speculators]

PHIL TWYFORD

We have seen its half-hearted measure to target property speculators that, based on Treasury analysis, will be lucky if it nets a thousand speculators a year and bring in $18 million year. It will not make a blind bit of difference to the rampant property speculation in Auckland. Today the Government announced a very good scheme to use vacant Government land in Auckland to build housing on, but it was an idea that was developed—and the study for it was done—in 2008 by the Helen Clark Labour Government. That Government has been sitting on its hands for 6 years. It has done nothing with it while the housing crisis has got worse and worse but, in a panic before this Budget, it dusted it off and presented it as if it is a new idea. The biggest con job of all of the failed policies, the photo opportunities, and the deception that is this Government’s housing policy is its State house sell-off. In the middle of a housing crisis, where we have a spike all over the country in visible homelessness and of people living on the streets and in caravan parks, only the National Party would think it was a good idea to sell off the houses that it already owns. It tried to dress it up for months by saying that the Salvation Army was going to buy those houses, and the Salvation Army ruled that out. Bill English does not care who the Government sells these houses to. He said that. He does not care who it sells them to; he just wants to get rid of them. This bill is about making it easier for the Minister to sell off those house and put in place sweetheart deals that will allow someone—anyone—to take these houses off the Government’s hands. Let us look at what has happened to Housing New Zealand under this Government. It has stripped Housing New Zealand of its powers and its functions and it has given them to Work and Income. What was once a full-service social housing agency has been reduced to the equivalent of a Government-owned Barfoot and Thompson. It is simply a letting agency now, and this legislation is the final nail in the coffin. This Government has been selling off State houses all over the country without telling anybody. In Whanganui in the last year it sold 50 at an average of 33 percent below the Government valuation, blatantly undermining property values in that town and flogging off publicly owned assets below their market value. That is an absolute shame. This Government has milked $500 million in dividends off Housing New Zealand in the last 6 years. Half a billion dollars—it has used it as a cash cow to prop up its fictional surplus that never arrives. It has tightened the eligibility criteria so tight that even people who are in acute need and acute poverty cannot even get on the waiting list. It has subjected hundreds of vulnerable tenants, including the elderly, disabled, and families with young children, to the needless stress and anxiety of tenancy reviews, fearful that they will be thrown out on the street by Paula Bennett. The Government has closed offices, sacked tenancy managers, and forced tenants to use an 0800 number. Now this bill strips away the last functions that Housing New Zealand has. It is no longer allowed to even give the Government advice on social housing—that has been taken away. Housing New Zealand is no longer allowed to do research and it is no longer allowed to evaluate the work that the Government does. State housing has a proud history in this country. It is how we make sure in New Zealand that every child growing up in this country at least gets a decent roof over their heads, no matter how much mum and dad may be financially struggling. It is how we make sure in New Zealand that every kid gets a decent start in life. That is why the taxpayer subsidised John Key and his mother to have a State house in Christchurch in the 1960s. The security of the roof over their heads gave the Prime Minister a good start in life. Paula Bennett benefited from the same generosity of taxpayers. Now the two of them, the worst hypocrites this House has ever seen, are willing to strip away and dismantle the very system of social support that gave that Minister the start in life, but she is happy to pull the ladder up. She and John Key are happy to deny a generation of young New Zealanders the same opportunity that they had in life. They do not care. They do not care. Just imagine in today’s generation a young John Key today in some suburb in some city in New Zealand, sitting on a suitcase on the side of the road, thrown out of the house that he and his mother called home. He is worried, night is falling, and he has no idea where he is going to sleep the night and no idea where they will call home. That is the reality for families all over this country. That homelessness has been made worse by the policies of this Government and by their utter failure to do anything meaningful about the housing crisis. The worst cut of all is that in the middle of a housing crisis and a housing shortage, that Minister, Paula Bennett, dismantles the system of support that provides decent housing to the 4 percent—the most vulnerable people and the most vulnerable families in our country. What an absolute scandal. By selling off State houses, by breaking up Housing New Zealand and dishing out the bits to charities, by reducing Housing New Zealand to being no more than a publicly owned letting agency, and by moving to a system of direct subsidies for landlords—because that is what Bill English and Paula Bennett want to do. Their agenda here is dressed up in lots of nice words: “We want to grow the community housing sector. We’re stepping up with wraparound services. It’s all about the tenants.” It is not about the tenants at all. Because you know what? We asked Paula Bennett under the Official Information Act what evidence she had for the policy of privatising State housing and shifting that responsibility to non-governmental housing providers, and you know what she said? She said: “There’s no evidence.” There were no documents. The Government had nothing to say. There is no evidential basis for this policy, but that Minister is happy to preside over the dismemberment and the dismantling of Housing New Zealand, the very organisation that puts a decent roof over the heads of our most vulnerable families in this country.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - PHIL TWYFORD (Labour—Te Atatū)

Mr DEPUTY SPEAKER: I am sorry to interrupt the member, but his time has expired.

[Continuation line: Matt Doocey]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): I may have misheard the Minister when she started her speech this evening, but it sounded to me like she said that the Government has started on a vicious programme of reforms. I thought: “She’s right—she’s absolutely right.” Well she is not denying it, so I presume that is exactly what she said when she opened her speech on this new piece of legislation tonight. A vicious programme of reforms—that is what we have seen in Housing New Zealand under this Government. What we have seen in the last 7 years in housing policy has been a series of ideological burps. In other words, nothing but a lot of hot air and gas, wrapped up in the biased and unbalanced philosophy of the National Party. The greatest exponents of this ideological burping are Dr Nick Smith and Paula Bennett. Paula Bennett, the latter, is the architect of this latest iteration of dopey policy. That is what this policy is. This bill is another piece of National Party tripe. It is meant to give the Minister the flexibility to negotiate contracts with organisations that purchase State houses. What it is is code for the great State house sell-off mark 2. It is a continuation of an attack on State homes in New Zealand, the sell-off of them by this National Party, and the breaking of a solemn promise made before the last election, that there would be no more asset sales. There can be no bigger asset for an individual in New Zealand than the home that they live in. This Government is prepared to sell off thousands and thousands of State houses, and the Government says it is not an asset sale. The Government says it is not a broken promise. Well, I would say there is a name for that, but perhaps I will not use it today. That was a solemn promise—no more asset sales. This is part of the continuation of selling assets in this country. It has followed a pattern. What this Government has done to soften up the people of New Zealand, those who perhaps are not in State houses, is that it would first of all remove people from the State houses. You saw that—those of you who come from the Hawke’s Bay. You need only to go into Flaxmere and places like that. The Government cleaned the people out of the State houses. It left them empty. Then the Government would say: “Nobody wants to live in those houses.”, even though there were people who could not get a house. They are on a waiting list, and the houses are empty. The Government said that no one wants to live in those houses. Then it says that these houses must be in the wrong place and the wrong size, because nobody wants to live in them. The Government lets them stay empty. They lie empty, and then the vandals come along and break the windows and graffiti the walls. The Government says it gets complaints about the security of these properties and the cost of this security. Then the Government says that there is a great necessity to sell them off, because we do not need these houses any more. It is a pattern. It is a pattern that we have seen many times over. Now we have got, as I said, the great State house sell-off. They were all going to be sold to those very willing community groups. The poster people of this great State house sell-off were the Salvation Army. According to Bill English, the Salvation Army was going to take all these houses. Well, I have met with the Salvation Army and so have many others in this House, and I have to say they were played as fools. They did not know the real effort that was going into this. They did not know the real agenda. When the Salvation Army went away and did their figures and looked at their books, they said: “There is no way we can buy these houses. We will be in debt for 10 years if we buy these houses. We cannot do it.” But we were told that the Salvation Army was a very willing buyer of community housing. Backbenchers might not know that. Go out and talk to your Salvation Army. Speak to those who run the Salvation Army. They will tell you the truth. The Salvation Army was sold a pup by the Minister of Finance and the Prime Minister—they were sold a pup. The Government does not have any intention to provide houses, to buy up houses for community housing in New Zealand. Then I had a look at the regulatory impact statement that goes with this bill. There are a number of questions. I always read these with interest because they usually tell you a little bit about what goes on in policy making. The regulatory statement asks the questions: “Are there any publicly available inquiry, review, or evaluation reports that have formed or are relevant to the policy to be given effect in this bill?”. What would you think the answer to that would be? Do you think there has been any evaluation of this policy? What will be the effect on people? Would you expect the Government to know that, before it brought some legislation into this House, to pass through every stage tonight, without the scrutiny of a select committee? Would you not want to know that before you did it? Well, what does the regulatory impact statement say? “No, there has been no evaluation report to inform or is relevant to the policy.” So we are going blind into this. We have no idea what the outcome is going to be. Then we are asked: “Were any regulatory impact statements provided to inform the decision of this bill?”. We were told they used the regulatory impact statement that was done in March, and that was before the community housing groups knew what the real story was and before the Salvation Army pulled out of this whole approach. It also asks: “Did the regulatory impact team in the Treasury provide an independent opinion on the quality of any of these regulatory impact statements?”. What would you think the answer to that would be, to the members opposite? We are passing the bill through all stages tonight. We are going to put it into legislation without any scrutiny, other than what is happening now. Did Treasury have a look at this? Did Treasury provide any independent opinion on the quality of this? The answer to that is no. It has not happened. Why do we not learn? There is no need to rush this bill through tonight. What is the urgency in passing this legislation tonight, without the scrutiny, the impact, and the input from New Zealanders on this bill. So Treasury has not had anything to say on this bill either. “Has any further analysis become available since this policy has been given effect to this bill?”. What do you think the answer to that would be? It is another big, fat no. I think the members opposite who are going to speak on this bill might want to go and pick up the regulatory impact statement and then ask questions of your Minister. Backbenchers are so pleased and proud to praise her, but maybe they might want to ask a few questions as to why this bill has not had the scrutiny I believe it deserves. Then I want to know, and maybe the Minister will answer this when we get to the Committee stage—she is going to have the power under this legislation to make delegated legislation with ministerial direction. That does not come to the House either. All she has to do is gazette it, present a copy to this House, having done some consultation. I want to know why the extension of this power is going to be needed, Minister. Why is this going to be needed, when we know there already exists in the Act powers that you can use? I would like an answer to that question, when the Minister gets into the chair. We then get to what has really been happening to Housing New Zealand and why I do not trust this latest measure. Any members who are constituency members of this House would have seen what has happened to Housing New Zealand over the last few years. It has stripped away its functions. It has sold houses up and down New Zealand. It has milked the dividends out of Housing New Zealand. It has closed offices and it has sacked tenancy managers. That is what has happened. That is the legacy of the National Party State house policy. I have to give the latest story I heard, and the Minister might like to answer this. There are two-storeyed Housing New Zealand houses in Dunedin. They have just been renovated in some way, and they had ladders—fire escape ladders—because if you are on the second floor you might need to get out in the event of a fire. Those ladders have been removed, and Housing New Zealand said no, that it was not going to replace them. That is a very good indication of what has happened to Housing New Zealand and State houses in this country. It is a mean, vicious, nasty approach, because many members opposite, but not all of them, think that those people who end up in State houses deserve it. They got themselves there, and they are getting what they deserve and the sort of housing that Housing New Zealand is prepared to provide.

[Continuation line: MULLER]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - TODD MULLER (National—Bay of Plenty)

TODD MULLER (National—Bay of Plenty): I would like to just speak for a few moments on the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I would like to, perhaps, start by helping the member Annette King, who has just spoken. It is clear that her hearing is not quite what it used to be, because what Minister Paula Bennett was talking about was flexible reform, it was innovative reform, it is people at the centre reform, and it is reform that this Government is delighted to be able to push through and debate here this evening. It is not—

Hon Member: They are angry.

TODD MULLER: They are incredibly angry. It is not this side of the House that is caught in an ideological rut; it is that side of the House. This side of the House has people and tenants at the focus of our social housing reforms, which is not what we hear on the other side. This bill is an important part of the Government’s social housing reform programme, and, as we have heard from Minister Paula Bennett, it has the primary aim of introducing flexibility in the way that the Ministry for Social Development can negotiate and contract with social housing providers. This flexibility is important and, from our side, it should be encouraged. It is absolutely appropriate that we create the framework that this bill enables, which enables the Minister for Social Housing to have the power to direct the Ministry for Social Development to enter into these tailored funding agreements with social housing providers. As we know, the current set-up and environment is constraining for the Ministry for Social Development. There is very little flexibility and this bill enables the agencies to be able to get outcomes that will deliver more social housing places for New Zealanders. Examples of possible tailored agreements include paying more for tenants who may be more expensive due to higher needs, such as older people, or entering into a long-term contract with a provider for them to offer a certain number of social housing places for several years. Both of these options are not currently possible under the current law. This is a move away from a one-size-fits-all, to something that is more tailored and more sensible and that will deliver better outcomes. We have heard over the last few minutes a reasonably impassioned view around how community housing providers are not going to respond appropriately and, to use the words of the Opposition, that perhaps this is a pup. I will return later this evening to talk about the experience in Tauranga and the appetite that exists for participating in community housing providers. I look forward to sharing that with the House later this evening. I commend this bill to the House.

[Continuation line: Kevin Hague]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - KEVIN HAGUE (Green)

KEVIN HAGUE (Green): Many New Zealanders look to the Nordic countries as a bit of a role model for how our country could be, and typically look with some longing to countries that offer their citizens high standards of living, and egalitarian societies that distribute wealth pretty evenly across their societies. It comes as a bit of surprise to many New Zealanders when they learn that the inspiration for those modern Nordic States was actually New Zealand in the 1930s. That is right—it was the Government of Michael Joseph Savage that provided the inspiration for the modern social democratic movements in Scandinavia. There is no image more evocative of that Savage Government than the picture of Savage himself and several other Cabinet Ministers moving furniture into the first State house at 12 Fife Lane. Savage, of course, talked about his programme, not only of housing but also of social welfare and health care, as applied Christianity. He said: “What is there more important in Christianity than to be our brothers’ keepers in reality?”. He saw the Government as the expression of our collective responsibility to care for each other. If the Government is not that, then what is it? What is it for? It seems to me that those basic needs, which must be met if we are indeed to care for each other, must include warmth and shelter, and they must include a right to housing. It is not just some matter that the Government of the day might choose to make a matter of policy, but it is actually something that our Governments have collectively signed up to as part of the United Nations International Covenant on Economic, Social and Cultural Rights.

[Continuation line: New Zealanders have a right to housing]

KEVIN HAGUE

New Zealanders have a right to housing. New Zealand Governments have an obligation to ensure that everybody is well housed. In some ways, this bill may appear on the surface to be somewhat innocuous. There is a particular exception to that, which I will come to a little later in this intervention. But the issue here is what this bill stands for—what it is emblematic of. I have to agree with the contributions made by Phil Twyford and Annette King to date that this bill is emblematic of this Government’s wider housing agenda. A flag is a kind of an emblem. We have got a referendum coming up on the New Zealand flag, and the Government right now is running a consultation under the banner of “What do you stand for?”. Well, the emblem that this bill provides for this Government—what it says this Government stands for—is a return to the neoliberal agenda of the 1980s and 1990s. It is a return to the economic philosophies of Hayek and Nozick. It is a return to an agenda of small government and of public choice theory. It is a return to the idea of core functions of the State being stripped away and devolved to the private sector. That is what is at stake in this bill. So what we have seen from this Government in housing is it shuffling the ownership of State houses ahead of actually providing more houses at a time of crisis—at a time when people are living in garages in their thousands. What we have seen from this Government is the sale of State houses to private developers, who inevitably will have a different agenda—an agenda that incorporates their own profit motive. We have seen no guarantee from this Government of the proceeds from those house sales going into building any more houses. Indeed, we have seen no guarantee whatsoever of any more houses being built at any time. In relation to the income-related rentals scheme, what we have seen is that the changes that the Government has made to that scheme have been driven by ideology—an ideological belief that exposing Housing New Zealand to competition from the private sector will, somehow, increase its efficiency. That is what sits underneath this reform. It is an ideological belief. In the advice that the officials gave to Cabinet before Cabinet signed off on that particular policy, the officials pointed out that one of the likely consequences of that policy change would be that State houses would sit empty. That is right—at a time when we have, what, 6,000 on the waiting list for State houses, some of those State houses would sit empty because of the ideological need to spread income-related rent subsidies across both State provision and private sector provision.

[Continuation line: We have seen, in a particularly despicable development]

KEVIN HAGUE

We have seen, in a particularly despicable development, tenancy reviews being expanded so that families that are just starting to recover from the chaos of lives without secure homes are being thrust right back into that same chaos. That is an agenda that services only the ideology of the Government. It does not put tenants and it does not put families in need at the heart of the agenda in any way. Part 2 of this bill contains three measures. Two of those are relatively innocuous, and a third actually continues the agenda of the early 1990s—the separation of provider, funder, and policy maker. Just as a reminder to the House of what that separation was all about, it was a policy that was driven by public choice theory, driven by an assumption that the public servants who were involved in those functions would be motivated by their own self-interest. It was policy driven by a culture of distrust in the Public Service, a policy driven by the need to create the panopticon, in Bentham’s ideas, where everybody is being observed, where everybody in the Public Service being observed and monitored would somehow result in better outcomes. The counter approach is for Government to instead create a culture of public service, a culture of trust, and to acknowledge the experience of funding, planning, and providing housing might just be a pretty useful start when giving Government advice on policy around housing. It is an asset not a liability. I asked earlier what this Government stands for, and this bill and its housing programme say it pretty plainly. What the Green Party stands for is a return to those ideas of the Savage Government, a return to the idea that everybody is entitled to security, everybody is entitled to a safe, warm, affordable, and secure home. It is a return to the idea that we can trust our public servants. It is a return to the idea that the community housing sector has an important role to play. It deserves support, it deserves capital to assist in building housing, it deserves regulatory reform to enable it to contribute more fully, but the role that the community housing sector can provide should occur in addition to the role that the State itself provides, not as an alternative to it. It is only in the zero-sum game philosophy of this current Government that those two have to be alternatives and not joint solutions to a problem that besets this country.

[Continuation line: Denis O’Rourke]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - DENIS O'ROURKE (NZ First)

DENIS O'ROURKE (NZ First): This particular amendment bill is one that is typical of National Governments, which are always seeking to find ways to reduce spending on social services at the same time protecting their voter constituencies, those on higher incomes, those whom it wishes to protect.

Hon Paula Bennett: You’re just wrong, Denis.

DENIS O'ROURKE: That is not wrong. That is exactly what this Government is doing and most people can see it. This Government is careless about whether or not its cost-cutting ways will damage the effectiveness of social policy. This is a bill that is badly researched, ill-considered, and based fundamentally on National Party dogma. It is a bill that will exacerbate, not improve, social inequalities and it will degrade the quality of Government services and not improve them. Nobody opposes sensible measures that would make the provision of Government services, especially social housing, more efficient or would provide the same services at a better cost—never at the expense of worse outcomes for people. That, I am afraid, is inevitably what this amendment bill is going to do. There are common themes throughout National’s social housing legislation: firstly, to minimise the role of the State; secondly, to abdicate responsibility for social housing in favour of others; thirdly, to provide as little money as possible and contract others to take responsibility; fourthly, to push as many people out of State housing as it possibly can and to favour non-Government organisations, which are not always capable of the function. We can reflect on the Salvation Army and the decision it made to not get involved. Probably the organisation in the country best able to do so chose not to do so, and for very good reasons. This legislation allows the Government to pretend that it will provide social housing more cheaply, but in fact it will not. It will just push it off to somebody else. It will allow the Government to avoid full accountability for social housing and it will fail to protect people against exploding rents—a huge problem in this country. Lastly, the Government does not even try to support local councils in providing public rental housing or elderly persons’ housing in this country, thus letting them off the hook too. The amendment bill is just as objectionable as the principal Act in two ways. First of all, it relies on that policy of reviewable rents—a bureaucratic assessment of the ability of tenants to move into private accommodation—when the real problem is that rents in places like Auckland and Christchurch, based on simple unavailability of enough homes, are the real problem. Secondly, it will reduce the role of Housing New Zealand. This amendment actually takes that a step further by preventing Housing New Zealand from giving advice to Ministers, thus sidelining that very important organisation, and it reserves that role now to the Ministry of Business, Innovation and Employment. That is a mistake because the ministry will only be a contract supervisor, essentially, and it will not have the institutional knowledge that is necessary to provide the service at the level we expect it to be. And Ministers will, of course, be empowered to give directions about what is to be done, and it is easy to see where that might lead. The results are likely to be social housing provided at very great arm’s length from the Government and its agencies. It will give more power to Ministers who are inevitably going to take a more political approach, a more dogmatic approach, not aimed at looking at the best interest of the most vulnerable people in the community, despite what Government members say over there, but aimed at financial results, fundamentally. That ultimately means more housing deprivation, State houses being much too hard to get, non-government providers imposing their own policies and practices—and we do not know what they may be—and, most of all, very uncertain outcomes for low-income people who are dependent on the State for their housing needs. That is not the Kiwi tradition and it is not acceptable as a role for the State in this country. The price of suppressing demand, which is what this is really all about, is much too high in social terms. It will cause reduced health and well-being, increased poverty, putting more families at risk, compromising social cohesion, and exacerbating the creation of a disaffected underclass of people in New Zealand. Despite the Government’s aims that it would have a lenient approach when it comes to reassessing State tenancies, people will inevitably be nudged out of their homes and, effectively, bullied out of their homes. The Government will continue to sell those homes and it will build too few of them. You only have to take a quick look at this Budget to come to the conclusion that this Government has no intention of trying to meet the demand that is already there—a demand that is not being met now. That is the real issue. This Government is not actually willing to meet the need, and that is really what this legislation is about. It will artificially seek to supress demand rather than try to meet the genuine housing needs of people in this country. The bill itself may be seen as a relatively minor provision, but it is another step in the wrong direction. As others have said, what is really needed in this country is a genuine social housing service—not just buildings but a true Public Service with the experience and the resources needed.

[Continuation line: This bill goes in exactly the opposite direction.]

DENIS O'ROURKE

This bill goes in exactly the opposite direction. The Government will instead transfer large sums of money to community housing organisations through contract payments, but these are really still just subsidies, so nothing much will have changed. The landlords will, of course, rub their hands in glee. These organisations will own the housing, funded, though, by the taxpayer. They will profit from it and they will compete from it, and, as an inevitable result, they will try to increase rents, and that is not in the best interests of either tenants or the taxpayer or anybody else, indeed, in this country. That is actually the most significant flaw of all in this whole new social housing regime, of which this bill is just one more minor step in the wrong direction. There will be more diversity, and that is potentially a good thing—potentially a good thing—but it is also a very risky thing if it is not properly done. I do not trust some of the providers to whom this function will be entrusted to do that properly. For all of those reasons, New Zealand First opposes this bill. It is a retrograde step, it emasculates Housing New Zealand, it seeks to reduce Government accountability for housing, and it should not be passed.

[Continuation line: Jono Naylor]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JONO NAYLOR (National)

JONO NAYLOR (National): It seems to me that the members opposite seem to be completely missing the point of this bill. This bill is for us to be able to deliver better services to those who need social housing. The purpose of this bill is to ensure that we have social housing in New Zealand that is fit for purpose and to create flexibility in those arrangements to ensure that we are accommodating people and allowing non-Government organisations to work with needy people in such a way that is going to be best for their clients. It is part of a bigger plan to ensure that social housing in New Zealand is available to people in the size and the type that is most suitable to them. It is about giving flexibility to those groups that will do a better job of housing them, rather than simply assuming that because we are the Government we will always know what is best for every single individual, which seems to be the kind of arrogance that we are getting from across the other side of the House. It is not about continuing with the status quo and assuming that just because that is the way we have always done that that is the way we should always do it. It is about moving forward. It is about delivering better public services. It is about being better equipped to ensure that vulnerable people in this country are being looked after in the best possible way. This bill is one part of a very big machine, which is ensuring we do just that. Thank you.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JONO NAYLOR (National)

Mr DEPUTY SPEAKER: I call Jan Logie—a 5-minute call.

[Continuation line: Jan Logie]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): I rise to take a short call on this bill for the Green Party. We will be opposing this bill, unfortunately. We see housing as a human right. Housing and shelter are at the absolute foundation of community, of family, and of individual well-being. Good, warm, stable, affordable housing improves people’s health, it improves educational outcomes, it improves employment productivity, and it reduces costs to Government and even carbon emissions. What this bill does is nothing, really, to help us provide secure, affordable, warm housing for people in New Zealand. This is a shifting of the deckchairs on the Titanic. We have people right across this country living on the streets, living in their cars. We have heard stories from Invercargill, from Tauranga, from Hastings, from Kaitāia, from Auckland, from Wellington, from Porirua—all over this country people do not have their basic, basic needs being met. This bill is not about building more houses. It is not about actually ensuring those people get their needs met. What it is about is transferring existing completely rundown houses that are a result of generations of Government neglect to the community sector. The community sector previously went: “Well, OK, we’re going to look at that, because we think we can provide good wraparound services for people and meet their needs, maybe a bit better than the Government.” But then it looked at the state of the housing and went: “Well, actually, no, this isn’t really viable.” So what this bill is about is enabling more flexibility to pass that over, recognising the absolutely appalling state of so many of our State houses because of Government neglect. That should sit with the Government. We should acknowledge that this bill is a result of the failure of the Government to care for a key asset. The bill is not going to be increasing the housing available for people; it is just about selling it off. Part of that will go to private developers. We have heard from people in Glen Innes, as one example where there has been a supposed transformation happening. Veterans were, post World War II, given a house for life. They are no longer in that house. They had established a community. They knew their neighbours. They were connected. They had community. That has been destroyed by that so-called transformation. What this bill represents, in part, is more of that kind of transformation, which is actually a destruction of community. It is a destabilisation of families that is going to disconnect children from their schools. It is going to put people into more fragile and vulnerable situations. I really struggle to see how anyone can think that that is going to be a good result. We are not hearing from the community sector that what it is being offered at the moment and being provided with is what it sees as part of the solution. We are hearing quite a lot of concern coming from those people. They know that a good, thriving community housing sector will sit alongside a well-resourced Government State housing sector. We know that we have in Auckland, as an example, house prices going through the roof. Houses have been gaining and earning more than most people in Auckland are earning a year. Again, this bill is not going to help with that. It is reducing the function of Housing New Zealand down even more. It has already lost its ability to assess who will go into its houses. Now, this removes its policy function—its ability to provide policy advice to the Minister. So it is put into, as I think was already said, the role of any other real estate agent. If we think about that and the fact that these are people who are the most vulnerable—because the Government has reduced the housing criteria to such an extent that anyone who is able to get into a house has to be in a pretty dire situation—none of that information and their needs will be feed through to the Minister. Is that going to be good policy making? I think not.

[Continuation line: Adrian Rurawhe]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - ADRIAN RURAWHE (Labour—Te Tai Hauāuru)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru):

I rise first of all to mihi out to all whānau who are in State houses tonight and may be watching the broadcast tonight. They will be sitting there wondering what their future is in their home. They will be sitting there wondering, hearing all of this kōrero about this bill tonight, and wondering whether they are still going to have a home to live in. This bill merely provides a mechanism for the Government to sell State houses. That is how I see it. I think that the people at home in their State houses do not know what their future will be, who their future private landlord will be, or whether a property developer is going to come along and redevelop their home into something that they cannot afford. That is my concern about this bill. It does not do what the Minister has said that it will do: provide more social housing. Well, I do not think so. If you start with one set of State houses and then you sell them to someone else, that does not actually increase the number of houses that you have got. Potentially, I believe that it will reduce the number of social homes, because the only way to increase the number of social homes is actually to build more.

[Continuation line: Under our KiwiBuild policy]

ADRIAN RURAWHE

Under our KiwiBuild policy, which we campaigned on last year, that is exactly what we would have done. Our solution to the housing crisis in New Zealand is to build more homes, more affordable homes, for our people. This bill fails. It does not provide that. This bill does not increase the number of social homes. This bill, actually, is a reflection of core National Party policy. In the 1990s it sold 13,000 State houses, and this is a mechanism that the Government is willing to use to make sure that it gets rid of those homes so that it gets rid of its responsibility. Why I am here tonight is to tell the House that I believe that, despite this bill, the Government must never and can never transfer its responsibility for Kiwi families who require social housing. That is a fundamental way of life in New Zealand that people expect—that we should be able to have clean, dry homes, social homes that people can actually afford to live in. This afternoon we heard from members across the other side of the House saying some amazing things, where I thought to myself: “I am hearing the words but they do not match up with what is on the Table .” They do not match up with what is being presented here in this bill tonight. This bill will actually create opportunities—not for families or for living in social housing, but for property developers and private landlords. That is what this bill does. It attempts to transfer the responsibility of the Government to someone else, and we are here to tell you that that is just not good enough. That is not good enough today, and I think, over the next few hours, that we will be hearing a lot more about what should be happening in the social housing sector. Thank you. Kia ora .

[Continuation line: Parmjeet Parmar]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Dr PARMJEET PARMAR (National)

Dr PARMJEET PARMAR (National): This is another great Government bill, sponsored by the Hon Paula Bennett , again reflecting this National Government’s focus on delivering for families and children. This bill is a part of the Government’s social housing reform programme, which is to address the needs of families in need of social housing and better meet their needs. In this short while, I just want to address one point that is especially coming from the Labour Party . Their focus is on properties, per se —just properties per se, no focus on families, no focus on families’ needs. That is what this bill is about, to change that focus from properties to families and their needs. I support the bill. Thank you.

[Continuation line: Su’a William Sio]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Su'a WILLIAM SIO (Labour—Māngere)

Su'a WILLIAMSu'a WILLIAM SIO (Labour—Māngere): It gives me great pleasure to also add my remarks to this particular debate. I was caught off guard , because I would have thought that, given this is a significant policy introduction by this Government , they would utilise their full time in convincing us why this is an important piece of legislation—albeit it is shameful, to say the least, that they spend not even a full minute on it. In my mind this bill confirms once and for all that the National Party not only continues to be in denial in terms of the housing crisis, but it now denies every New Zealander the opportunity of having a home that they can live in. You see, for the past 7 years this Government has continued to deny that there is a New Zealand housing crisis. Even now, the Prime Minister continues to deny it, and does not accept this despite the fact that this is his third term. They are in deep denial about this. They continue to deny it because, I suspect, building more houses is just too challenging for them. And building more houses means that it reduces the profitability of the portfolios of some of their investor and property developer mates. Yes, Mr Deputy Speaker , I know that you would agree with me because those mates have been funding the campaigns of this particular Government. Mr Key and his Government have been bystanders while the housing crisis has worsened year in, year out. In Auckland house prices have risen by 87 percent in 6 years. That is an increase of $100,000 from last year. A generation of future New Zealanders are now permanently locked out of the dream of owning their own home. They have been locked out by Mr Key and this—sad group of National MPs . More and more Pacific people are now locked out of ever owning their own house, under this National Government—I wanted to say something else, Mr Deputy Speaker , but I knew that you would pull me up if I did use those words. Any New Zealanders who find themselves unable to afford their first home today, their first home—according to the agency of the old people—say that they will be poorer still when they retire without that particular asset. And while Mr Key and his Government continue to deny that there is a housing crisis, house prices and residential rents continue to rise. The average Auckland house price will hit $1 million next year, while residential rents have jumped up again by 6.3 percent to a median rent of—

Kris Faafoi: They’re happy with that.

Su'a WILLIAM SIO: Absolutely, they are happy with that. More and more middle-income earners will never be able to buy their first home at those particular prices. How can they, when middle-income earners have to front up with a 20 percent deposit before they can even secure a mortgage? That will push up more and more lower-income earners into homeless situations of living in cars, caravans, garages, and boarding houses. And what is National’s response to the housing crisis? Sell off those State houses. Sell off those State houses. New Zealanders expected a plan to build more houses; instead, all they are hearing from this Government is: “Sell off those State houses.” So far they have had every opportunity to do something meaningful to fix the housing crisis, but they have not. They have not done anything meaningful or genuine to address the housing crisis. Yes, they tinker around the edges of the crisis with half-baked policies, but tinkering has not halted the housing crisis. Every week there is a line of people applying for housing to Housing New Zealand . They get turned away. They are told to go down to the Ministry of Social Development . They go down there and they are told: “You are eligible.” They go back to Housing New Zealand and it says: “Well, we have got you on a list, but you are not a priority applicant.” Every week there is a Housing New Zealand tenant being evicted by Housing New Zealand. In fact, I have had cases where, upon the death of parents, Housing New Zealand was quick to notify the children that they would be evicted. In one case, Housing New Zealand sent that eviction notice before the children had a chance to bury their parent. The lines to emergency housing offered by community social services continue to increase. Government tinkering in special housing areas have been an absolute failure; they have just not worked. They managed about 170 houses in a year and a half, but we are still short by 20,000 houses. They needed 13,000 houses just to keep up with population growth. Earlier I heard a National MP in this debate say that this legislation was to provide flexible options to New Zealanders. He said it was about getting the right house to the right person, at the right time. What does that mean, for goodness’ sake? I think what it means is it is market-speak: it means that it is up to market forces whether a person gets a house or whether they are ever housed at all. It means this Government is washing its hands of every New Zealander in a homeless situation. It means this Government does not want to take responsibility for New Zealanders who need a home of their own. This Government is selling off our public-owned State assets to its private-sector investor mates, not to the Salvation Army or the Methodist Mission , or to community groups with a social conscience. It is selling them off to its investor mates. Remember how they couched the selling-off of the State assets? They said that they would sell them off to mom-and-dad investors. That was a load of crock. That is the same technique that they are using tonight to cover up the fact that our State houses will be sold off to their property investor mates, the same mates who have been funding their campaign activities in the last 7 years. This is their pay-back. This is what it means when they say the bill is about flexible purchasing.

[Continuation line: It gives the Minister flexibility to flog off billions of dollars’ worth]

Su'a WILLIAM SIO

It gives the Minister flexibility to flog off billions of dollars’ worth of State houses to the National Party’s developer mates. The biggest deception and con job of all is National’s State house sell-off. Most New Zealanders are wondering how on earth selling off State houses to developer and property investors will somehow give them a home. It will not. This bill completely wrecks Housing New Zealand as we know it. The Government has got rid of the policy development feature of that particular ministry. It has got rid of people who managed tenants. Instead, the tenants are faced with an 0800 number. You cannot talk to a real person when you are need of a home. You are fobbed off in the line at the Ministry of Social Development, you fobbed off in the line at Housing New Zealand, and you are put in another line for the 0800 number. How on earth do people advance themselves when this Government keeps adding lines and making it difficult for people who want houses? This bill merrily transfers the responsibility on to the private sector into the market. They are going to tell people to go and find a house in the market. There is no help for them there. How on earth can people on the minimum wage afford the median-income rent now of $420? On the minimum income you are earning about $500 gross. Less tax, how do they afford the median rent of $420? These buggers—I will start using that word now—

Mr DEPUTY SPEAKER: No.

Su'a WILLIAM SIO: OK, I will not use it. These people—these nasty people—have no cares whatsoever for the plight of people in need. It is a basic human right to have a house. It is enshrined in international conventions. It is needed, and, yet, somehow, by introducing this bill, the Government goes away, making itself feel good that it is doing something. But it is not doing anything. All that this bill reaffirms in my mind and in the minds of many people in South Auckland watching and listening to this group here is that the Government continues to deny that there is housing crisis and that its legislation will deny every hard-working New Zealander the opportunity of either owning their own home or the opportunity of being in warm accommodation where they can house their children. What I foresee as a result of this legislation is more people in homeless situations, more people forced to live in caravans, more people forced to live in boarding houses, more people forced to live in cars, and more people forced to live in garages. That is the kind of legacy that the Government leaves behind, because under this legislation there is no long-term vision that will ensure that every New Zealander is able to aspire to own their own home and can achieve that. There is no legacy here to allow for every hard-working New Zealander on a minimum wage to be able to secure for themselves comfortable, warm, affordable rental accommodation—not under this legislation—and none whatsoever under this National Government.

[Continuation line: Stuart Smith]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - STUART SMITH (National—Kaikōura)

STUART SMITH (National—Kaikōura): It is a great pleasure to speak on this bill, and given that its merits are so blindingly obvious, there is nothing more that I need to say other than that I commend it to the House. Thank you.

PV on first reading: Ayes 63, Noes 58

[Continuation line: Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill 2R]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Second Reading

Hon PAULA BENNETT (Minister for Social Housing): I move, That the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill be now read a second time. I think there are a few things that we need to clear up for the member who spoke at the end of the first reading, Su’a William Sio. If he is sending people to Housing New Zealand to go on the waiting list and wondering why they are standing in queues for so long, it is because he is sending them to the wrong place. That is now done by Work and Income. There are 147 Work and Income offices throughout New Zealand. They are front line, so you can turn up there and that is where your assessment is actually done. I think it is really important that you understand—[Interruption] Go on—shout it out; get it out. I understand you are a bit angry about today because it has not gone quite as badly, actually, as you hoped it would. So first of all—

Carmel Sepuloni: I can’t wait for the next few days—it’s all downhill from here. When we’re talking, she stops. Keep going.

Hon Member: Hey, grow up.

Hon PAULA BENNETT: Bring it on—bring it on. [Interruption]

Carmel Sepuloni: When we’re talking, she stops. Keep going.

Hon PAULA BENNETT: All good? Finished the abuse yet? Get it out—get it out. Get the abuse out of your system.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Look, I would actually like to hear the debate.

Hon PAULA BENNETT: Thank you very much, Mr Assistant Speaker. So, what we want to make clear is that what this bill can do is actually quite exciting. It is not necessarily about buying the houses, but it might be. What it could be about is an organisation that wants to lease a house—yes? So, currently, it has land or it has got a house and thinks it want to get more so it can provide for the very same people, who, we all agree, need more housing. So let us go for a bottom line—we all agree that there are vulnerable New Zealanders who need access to higher-subsidised housing from the Government. So your argument is that you think the Government should own all of them land; we think there is actually room in the market for community housing providers as well as the Government. So we do not abdicate our responsibility in any way, shape, or form. In fact, I am making a commitment that there is another $152 million that will be going in to help subsidise the accommodation of those who really need it. We actually subsidise accommodation in this country to the tune of nearly $2 billion and we are adding another $150 million. We all agree that there are vulnerable New Zealanders who are not getting access to that heavily subsidised housing, and they should be. The disagreement we have is whether it should all be State-owned or whether there is room for community housing providers to also be doing that. We stand on this side and say that there is most definitely room for community housing providers to provide housing and wraparound services, and how you do that is by passing this bill. What this bill actually means is that we can contract with those providers over a longer period of time, and for some that provide specialist services for certain cohorts, we can actually give them more money so that they have a guaranteed income that they can either borrow or lease against, or provide more services. Community housing providers are saying that to us every day. We would like to be providing more housing. Whether or not we get that from the Government—right—so whether it is about them building more houses themselves, going into partnerships, or leasing properties, what they want from the Government is a guarantee of income so that they can actually then use it against those things. That is what this bill does. This bill supports community housing providers as they are building the sector. It does not abdicate the Government’s responsibility to pay. In fact, on the record we make an obligation that we will pay, with certainty, more than what they needed and asked for, and this bill delivers it to them.

[Continuation line: Phil Twyford

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - PHIL TWYFORD (Labour—Te Atatū)

PHIL TWYFORD (Labour—Te Atatū): Well, at least the Minister for Social Housing got to her feet and stayed on her feet for what, all of 3 or 4 minutes? That is more than we can say for all of those 1-minute johnnies on the Government benches—all those Government backbenchers—who are so proud of this policy of selling off State houses that they could not summon up more than half a minute’s speech to explain and promote their Government’s policies, which raises, I have to say, the question of why this bill is being rammed through under urgency.

[Continuation line: What is it about this bill that means]

PHIL TWYFORD

What is it about this bill that means it has to be passed tomorrow? Are the members opposite in such a hurry to flog off billions of dollars’ worth of State houses to their property-developer mates that it cannot go to select committee, and that the public cannot be given the opportunity to have a say and come along and make submissions. Is the bill so urgent that it has to be rammed through under urgency, under Budget urgency? I would like to hear an explanation from the Minister or from other members on the Government side why this bill has to be rammed through under urgency, because for the life of me I cannot see what is so worthwhile or so urgent that it has to be pushed through under urgency. This bill is about flexible purchasing. It puts extraordinary discretionary powers into the hands of the Minister to do sweetheart deals with the people he is wanting to sell these State houses to. He can ramp up the subsidies if he want to—if it is a particular deal with a private landlord or a property developer the Minister is desperate to do a deal with—or he can turn down the subsidies. That kind of flexibility is exactly what National members want to be able to do the sweetheart deals they need to flick off these State house, because they are desperate to offload them to anybody who will take them. The Salvation Army walked away, the Methodist Mission walked away, and the other community housing providers are basically saying “The only way we could make this work is if you not only give them to us at rock-bottom prices but you heavily subsidise us into the bargain.” This Government has been a bystander while the housing crisis has got worse and worse and worse. House prices in Auckland have gone up $100,000 in the last year—$100,000 in the last year. They have gone up by 87 percent in Auckland in the last 6 years but Government members are deep in denial because they believe there is no housing crisis, that there is no problem, that speculators are not a problem. Oh, actually, I think they just admitted on the weekend that speculators are a problem because they were so embarrassed by the Governor of the Reserve Bank saying publicly that they had not done enough to tackle the housing crisis and that they should do something about the rampant property speculation that is driving house prices higher and higher in Auckland. People desperately wanted this Budget to do something about the housing crisis but there are so many gaps in this Budget. It does nothing for the regions, it does nothing to diversify our economy, it does nothing to plan for future economic growth for New Zealand. But probably the biggest disappointment is that it contains nothing of any substance to fix the housing crisis. Today the Government announced that it is going to make Government land in Auckland available for housing developments and I think everybody agrees that that is a good idea. The shame is that this Government did not do it 7 years ago when it came to office. Instead what did it do? Government members derided and ridiculed the Helen Clark Government’s work on providing an inventory of Government land available. They knocked that work on the head as soon as they took office and they have sat on their hands for nearly 7 years. They have done nothing with it and it was only as they scrambled around in a panic to find something to present to the public that would show they were doing something about the housing crisis that they dusted off the work that was done by the former Labour Government 7 years ago. What was really telling when you watched Nick Smith, the Minister for Building and Housing on the TV news tonight, or if you go to the Stuff website and see the story about him, is that he was asked by a journalist how many of the houses that they are going to build in Auckland on the vacant Government land will be affordable. Nick Smith gave a sly little smile and said: “I think they’ll be affordable to somebody, because somebody will buy them.” That says it all.

Hon Annette King: Cynical.

PHIL TWYFORD: It is absolutely cynical. They do not care about the thousands and thousands of frustrated New Zealand families, Kiwi first-home buyers, who are desperate simply to get a roof over their heads and a home that they can call their own. This Government acted cynically with this announcement today—as has been the case with the special housing areas where fewer than 10 percent of the houses built are actually affordable, and the Government’s definition of affordable is anything under $550,000. That shows the cynicism of this Government. They were not prepared to take up Andrew Little’s challenge. They were not prepared to promise to the public of New Zealand that all the houses built will be affordable. All we got was Nick Smith with his sly little smile saying that they will be affordable to somebody. All this Government has done is tinker around the edges with half-baked policies that have not made the slightest bit of difference to a housing crisis that has been getting worse and worse on National’s watch. The special housing areas, which are the centrepiece of the Government’s attempt to deliver to the lack of supply of houses in Auckland, have been an abysmal failure. In 1½ years 170 houses have been built under Nick Smith’s special housing areas—170. Auckland needs 13,000 houses every year just to keep up with population growth. Under National a deficit of 20,000 houses has built up over the last 6 years. That is the Reserve Bank’s number. Twenty thousand short, we need 13,000 a year just to keep up with population, and how many are being consented under National—fewer than 8,000 a year. That is why the shortage is getting worse and worse every year. Every day the shortage is getting worse and that is why Auckland house prices are going up by $1,000 a day. Is it any wonder that it takes 50 years now on average to pay off the average home in Auckland? Is it any wonder that homeownership rates under this National Government are the lowest in 60 years—60 years? And John Key says there is not a housing crisis. So, other than the spectacularly unsuccessful special housing areas, what else has National done on the housing crisis? Well, 12 months ago it unveiled another great policy of the National Party—and that was to remove tariffs and anti-dumping duties from varnish and nails and various building materials. Nick Smith stood in this House and promised that it would knock $3,500 off the cost of a new home. His own officials have advised that it would save a little over $1,000 and that that money would be pocketed by developers. That is the kind of policy that this National Party specialises in. National members have been blaming the Resource Management Act for expensive houses since 2006; since they were in Opposition, they have been saying the Resource Management Act is the problem. And what have they done? Paul Goldsmith—what have they done about the Resource Management Act reform in 6 years in Government: absolutely zilch. National has done nothing to reform the Resource Management Act after 6 years in Government and Bill English has got the cheek to stand up in this House and blame the Resource Management Act. What audacity. National’s other bright idea was to throw subsidies at first-home buyers under the Welcome Home Loan scheme and yet the Ministry of Business, Innovation and Employment, Treasury, and the Reserve Bank all told it that it would make no difference, that it would drive up house prices, and make the unaffordability crisis even worse than it already is. Now, the National Government thinks that selling off State houses to property developers is some kind of answer to the fact that people are living in cars and garages all around New Zealand, and that people are rotting in substandard, cold, damp, private rentals because there simply are not enough houses. But National thinks that the solution to that problem, rather than building more houses, is to change the ownership of the few houses that we have that are there as a dedicated pool of housing for the most vulnerable and the poorest New Zealanders. Somehow selling them off to private developers is an answer to that problem. I just do not understand it. I do not understand what makes this National Government tick and I do not know where its members lost their moral compass.

[Continuation line: Doocey]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - MATT DOOCEY (National—Waimakariri)

MATT DOOCEY (National—Waimakariri): It is an honour to rise and speak to the second reading of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Mr Twyford and some of the Opposition have questioned the urgency for speeding with this legislation. The urgency is to do with the 3,000 people who will get extra housing support because of this bill. This will allow support for up to 65,000 people in total, 3,000 more people by 2017-18. What does Mr Twyford say to those 25 percent of people on a waiting list, waiting for Housing New Zealand with a 9 percent supply?

[Continuation line: Really the urgency is because no one should talk longer]

MATT DOOCEY

Really, the urgency is because no one should talk longer than the useful information they have to say. That is a lesson your leader learnt today. Something that will last with me through this whole term is this Budget, but, equally, what will stay with me through the whole term is the look on your faces while your leader spoke. What I say to the community sector, a creative community sector, is that we believe in you. Mr Hague said that we believe in a small State—not a small State, a big community. That is what we are supporting, Mr Hague—a big community. That is what we are supporting. What I can say to those New Zealanders, whether they be Gene Simmons, Axl Rose, or Jon Bon Jovi, is that we believe in you. If you want to be supported to independence in your housing, this bill will support you. We believe in you. I commend it to the House. Thank you.

[continuation line: Annette King]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): Mr Speaker—

Jono Naylor: One of you do it.

Hon ANNETTE KING: Well, at least I have got something to say. That member, all he did was pick up the research note and make a speech that everybody else has made. I have to say, when I looked at them, 1 minute 27 seconds, 2 minutes, 3 minutes—that is what the contribution has been tonight. I have to say, this is a very disappointing debate from the National Party. You see, we have before us tonight a piece of legislation, the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, that is not going to go to a select committee, that the public of New Zealand will have no input into at all. This House, costing thousands of dollars a minute, is required to scrutinise legislation on behalf of the public when urgency is taken. We would expect that a Government that is so proud of the legislation, that really loves the legislation, would stand and make a 10-minute speech on what it means, what it is going do, and why it is so proud.

Tim Macindoe: They’ve talked about that.

Hon ANNETTE KING: But what we are getting—apart from the interjection from the chief whip, who seldom gets to his feet but makes his speeches from his backside—I have to say, from the C-team National has rolled in tonight, are 1-minute and 2-minute speeches—1-minute and 2-minute speeches. That is an outrage to democracy. It is an outrage that those members cannot get on their hind legs and make a speech about a bill they are so proud of. I have to say, Minister Bennett, you have not told us why there needs to be urgency. We got an explanation from “Mr Doozy” up the back. He told us—“Mr Doozy” up the back told us—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I know that the member probably does not take offence to that, but his name is Doocey.

Hon ANNETTE KING: The missing “s”—the missing “s”. Let us put the missing “s” back in Mr Doocey and say that he told us why this bill needed to be passed under urgency. And why does it need to be passed under urgency, Minister? Because tomorrow—believe this—3,000 people will be housed. If we pass this tonight, we are going to have 3,000 people housed tomorrow. Let us go back to our electorates and see how many people get a house tomorrow because we took urgency on a bill that does not need urgency, Mr Doocey with an “s”. It does not need urgency. It does not. Why not let the people of New Zealand have a wee say on a bill. I know why. Because maybe the thinking public of New Zealand will say: “What are you doing this for? What is the reason for this bill? Why do you need this bill other than because you want a creative way to sell off State houses?”. National does not want the people coming in, who may well be State house tenants, telling it what they think about this bill, so it is ramming it through in urgency tonight, with this pathetic excuse that it has to do it because 3,000 people tomorrow could get a house. Well, I have to say, tell me how that is going to happen with this bill. How exactly is this bill going to provide 3,000 extra houses? In fact, how does selling off State houses actually create more houses? How does that work? How does selling off State houses create more houses for social housing? You see, it cannot answer the question because it is nonsensical. What it is doing is absolutely nonsensical. I think the Minister really put it into perspective for all of us tonight when she was speaking and she let the cat out of the bag when she was talking about State house tenants. She called them cohorts. That is what they are; they are cohorts, those State house tenants—just a figure, just a number, just a statistic. They are not people who need to be housed because they are the most vulnerable we have. We do not believe—

Chris Bishop: Outrageous.

Hon ANNETTE KING: No, it is not, Mr Bishop. You totally agree with me. I can tell by the look on your face. You know it. If there is one person over there who is not in the C-team, it is Mr Bishop. In fact, I predict that he is going to be in the A-team pretty fast indeed. I have to say that I think the National members are the Neros of New Zealand because they have been fiddling away with house prices and house policy for 7 years. They have been fiddling, fiddling around the edges, actually having to increase their fiddling every year as we put pressure on them by saying: “You are not housing New Zealanders. You are not treating New Zealanders fairly.” So as they have been fiddling, house prices in Auckland were going up and are going up at $1,000 a day. Do you know, the increase in a month is more than a pensioner gets in a year in their pension? That is how fast the house prices in Auckland have been going up. Unfortunately, if they are one of those pensioners whose house value is going up, they will not be able to afford the rates if they are on a pension. Then we have the Government’s new approach to housing. It is going to free up Government land. Well, we said that 7 years ago. In fact, we said it at Hobsonville. And let me remind the members opposite what their Prime Minister, who was then Leader of the Opposition and member for the area where Hobsonville is, said about the use of Government land to provide housing. Can anyone remember? Go back and have a look. Just put it into Google. You will find it. He said it was economic sabotage—economic sabotage—

Chris Bishop: Doing it now.

Hon ANNETTE KING: —well done, Mr Bishop; he had it—to build affordable or State houses on land like Hobsonville. Now it has got this idea, which is 7 years old, that it will open up some Government land and build houses on it. But what we know is that there will not be many that will be affordable, because there is something like 17 in Hobsonville out of the thousands that have been built. Even the 17, if you were to sell them today, if the people in them were to sell them, would no longer be affordable houses. They were already over $400,000 and climbing. In this new policy, which was made up in the last few weeks—and we know that for a fact—rushed through, and put together in urgency and in a panic, we are not told how many will be affordable or what affordable means. You know, it was only a few weeks ago when I said to Steven Joyce on our weekly, much listened to radio show on Newstalk ZB: “Why don’t you use Government land to increase the supply of land in Auckland?”. I said: “The Government owns more land than anybody else.” And do you know what the Minister did? He pooh-poohed the whole idea. He pooh-poohed it.

Chris Bishop: Oh!

Hon ANNETTE KING: You see, it was before the Government made the decision to do it, Mr Bishop. That is why he pooh-poohed it. I will ask him next week on my much listened to radio show what he now thinks of the idea of releasing Government land. He will no longer pooh-pooh it; he will say it was his idea, no doubt. In fact, he thinks he has most of the ideas in the National Party. You have to say that the whole housing area and these special housing zones we have got, as my colleague and friend Phil Twyford said, are just a sham. They are just some sort of paper transaction that the Government is having, saying: “Look, we’ve got these special areas and there are 170 houses that have been built.” And then it says: “But what about all the consents that we’ve got going through?”. Well, I do not know whether it has worked it out, but people cannot live in consents. They actually are not houses; they are bits of paper that are shuffled around and maybe one day something will happen. So what has it done in this space? Well, I like one of the things it has done. It brought in the knockdown nails policy. It got the cheap nails coming in, which were going to reduce the cost of houses by $3,000 a building. Big deal—big deal—because within 3 days the benefits of the knockdown nails were all gone. When you look at it, it has done nothing with the Resource Management Act.

[continuation line: King: We offered to assist the Government]

Hon ANNETTE KING

We offered to assist the Government in passing the Resource Management Act around housing. Oh no, it did not want to do that because it wanted the whole big enchilada. It wanted the whole lot. It was not prepared to accept a deal where we could have helped it with changes to the Resource Management Act in housing. I have to say that it still has not learnt that if you do not provide warm, dry, affordable housing, you are going to end up with diseases like rheumatic fever. Let me just end on this note: it has not increased the number of houses. It has not made those houses warm and dry for many people. Today, to top it all off, it is stopping the funding for the rheumatic fever programme.

[Continuation Line: Todd Muller]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - TODD MULLER (National—Bay of Plenty)

TODD MULLER (National—Bay of Plenty): I just want to speak for a few minutes on the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. The previous speaker said one thing that I agree with, one thing only, and that is that Chris Bishop will become a member of the A-team sooner rather than later. I do want to make a comment in respect of Phil Twyford, who for every single question time for the last 6 months has been vein-bulging at the Government, saying: “Housing crisis! You need to act with urgency. It needs to happen now.” So here we are tonight, standing here with a bill that enables our Minister to negotiate with community housing providers who are ready and waiting to be able to enter commercial deals that are innovative and flexible and will deliver outcomes for their community, and all we get is dissent, pooh, pooh, pooh, and negativity. That is why that party is where it is in the polls. This is a party that actually has a framework to enable us to be able to resolve issues. You can see it in Tauranga. I was there last week. The Tauranga Community Housing Trust was announcing there the opening of its new, brand new, housing with one and two bedrooms. The tenants were absolutely loving the move from the cold, damp, old, historic State houses. You know, life is not all about the State having to provide everything. There are people in the community who have skills, who have people whom they care about who can partner with the State and get a better outcome. That is what this bill is about, and I cannot wait for it to pass. Thank you.

[Continuation Line: Kevin Hague]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - KEVIN HAGUE (Green)

KEVIN HAGUE (Green): I think 2 minutes had expired so I was expecting the call to come any moment. It is a second reading debate and ordinarily in a second reading I would looking for the departmental report summarising the submissions. I would be looking for the select committee’s report on what the New Zealand public had had to say about the bill we were considering, and looking for the revision-tracked version of the bill, because is there not always a revision-tracked version? Invariably, the bill that is introduced to this House is considered for its first reading, goes away to a select committee, and comes back changed. It comes back changed because actually scrutinising for a little bit longer results in improvements to it. That is why unnecessary urgency is a bad practice for democracy and a bad practice for lawmaking. There is no conceivable reason for urgency for this bill. The bill itself would have been better for going to a select committee. I am going to start. Instead of quoting from the select committee report, I will just quote from the problem definition in the regulatory impact statement. What that says at paragraph 25 is: “In December 2014 Cabinet agreed to a direction for reform of the social housing sector, which creates a fair, effective, and efficient social housing market.”—market. Yet the reason that the Government needs to be involved in providing social housing at all is that experience in the real world has shown that social housing is a service that is not well matched to need by markets at all. A market is the very last thing that we need in social housing. Instead, this bill is not about providing for need; it is about providing for the Government’s ideological beliefs—in particular, this ideology of the smaller State. I thank Mr Doocey for his very witty joke in his contribution in this debate. On 1 November last year the Minister Paula Bennett admitted that in fact this was a State asset sale. She said so on national television, continuing that ideological programme of State asset sales, and winnowing down the size of the State that was commenced by the Government in the last couple of terms. She also went on to say, and Bill English later on in this House confirmed, that there was no guarantee whatsoever that any of the proceeds from selling off those State assets would be used to create new houses, to build any new houses. In other words, it was just about shuffling around the ownership arrangements of the houses, not about housing anyone extra at all. Simply shifting responsibility for the housing of vulnerable New Zealanders on to charities or to the private sector and then banking the cash from a fire sale of those assets will not solve anything at all. Almost 5,000 families were on the waiting list for a State home in December. The census showed over 200,000 people in Auckland, including around 63,000 children, were now living in a crowded household because of the shortage of housing. Those children, as Annette King has said, are at growing risk of diseases of overcrowding, diseases of poverty, skin infections, respiratory conditions, and rheumatic fever. Rheumatic fever, as Annette King has said, was the programme that the Government introduced with all the fanfare in the last term of Parliament. It has lowered the axe on it in the Budget today with no fanfare whatsoever. Those kids do not need to be made the responsibility of a charity. They need a real, tangible place to call home. New Zealand’s housing crisis is caused fundamentally by a lack of affordable homes. Selling off State houses so that developers can make money by sitting on the land or building more expensive homes, which is precisely what is going on under this Government, cannot possibly be the answer. This bill also serves the ideological belief of this Government: that its role is only to be a provider of a small amount of help as a last resort rather than as the guarantor of those basic rights that New Zealanders hold. Bill English again, in a meeting that he held with the editorial staff of the New Zealand Herald, said that the Housing New Zealand Corporation has “…become a pool of long-term dependency. You get in and you stay in so you don’t move out. So it’s creating large future liabilities having them in here.” If you go back to the original reporter, he refers to a report from the Department of Building and Housing. Its big thing was about mobility—so, how you meet serious housing needs but enable people to keep moving back up the ladder to independence, which is a somewhat cynical way of saying that actually the Government’s agenda here is about minimising the cost of providing services for people. That ladder towards independence is the very ladder that the Government proposes whisking out from more and more State house tenants under the reviewable tenancies scheme. This bill is also about the ideology of separating out policy advice from the basic grounding that the policy advice could benefit from by being co-located with the planning, funding, and provision functions that exist in the Housing New Zealand Corporation. I can almost conjure up that early 1990s environment. I can imagine the hairstyles. I can think of the shoulder pads, the chrome, the pink and grey stripes, and probably I imagine that that is the environment in the rarefied atmosphere of the Ministry of Business, Innovation and Employment, the Government department that this Cabinet, this Government, can trust to give it the ideologically pure advice on policy around housing that it so desperately craves. Thank you.

[Continuation Line: Denis O’Rourke]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - DENIS O'ROURKE (NZ First)

DENIS O'ROURKE (NZ First): Annette King said that this was a Government of Neros because of its fiddling policies as far as social housing is concerned, but I think that it is actually a Government of zeroes, because that is the number of additional rental houses that its policies and this bill will generate—zero. That is the effect of this Government’s policies. That is the legacy of 7 years of this National Government—zero. That is what it really is. This bill is a monument to this Government’s appalling record on housing. When I first entered this House in 2011 there was already a very significant housing shortage, especially in Auckland. Of course, in that very same year we had the Christchurch earthquakes and that created another housing crisis there. Even then the Government was saying: “There is no housing crisis.” However, it got worse and it got worse and it got worse until we got to the point when nobody with half a brain could deny that we have the most serious housing crisis in this country’s history. And yet, this Government still fiddles and still produces zeroes as far as increased houses for people who need to rent them from the State are concerned. New Zealand First would support sensible policies that provide more efficient services and better services at less cost, but never—never—at the expense of people who are being forced out of their homes. That is, effectively, what this legislation, and the principal Act that it amends, do. What this Government seeks to do is to minimise the role of the State; abdicate responsibility to others; provide as little money as possible for housing; contract others to take responsibility instead; push as many people out of State houses as possible; favour non-government organisations, many of whom are simply not capable of fulfilling this function; pretend that public services are being provided at less cost; avoid full accountability for social housing; and, lastly, fail to protect people against exploding rents. That is the record of this Government, and that is why I say that this bill is a monument to its appalling record on housing. If you look at some of the best housing providers in the community, one of the best is the Salvation Army. It is an NGO that could be relied upon to be a good provider. However, it looked at the Government’s policies, it looked at what the Government was trying to do, and it stepped back and said: “We’re not going to be a part of that.” to its credit—to its credit. That, actually, is a sound commentary from an independent source on what this Government’s housing record and its legislation on social housing in particular really is. The main thrust of what the Government is trying to do is, actually, to reduce the size of the State and in particular, in this case, to reduce the role of Housing New Zealand. It could not be more clearly spelled out than we see in this amendment bill. It is a further step in the wrong direction. By preventing Housing New Zealand from giving advice to Ministers, it is sidelining an important role for Housing New Zealand—a role that it has performed very well over a very long time. It is a mistake to do that. Instead, the Ministry of Business, Innovation and Employment will be given that responsibility, but, actually it is going to be only a contract supervisor with a limited role and no real responsibility. The result will be that far too much institutional knowledge will be lost and Ministers will be empowered to give directions. There is a deliberate move towards what is called “flexibility” but none of the speakers opposite—even though they have used the word a lot—have told us what that really means. What I think it means is that Ministers will be able to exercise their own agenda and that is why they have been given the power to give directions. This is not a good way to conduct and administer housing policy in this country.

Tim Macindoe: Does that member understand what he’s trying to say?

DENIS O'ROURKE: If that member opposite cannot understand what I am trying to say then that is an indictment on him, not on what I have said. He does not understand this bill. I doubt that he has even read it, and he certainly does not want to take responsibility for some of the worst Government policy that this Government has brought forward in this term or the last one. I recommend that that member actually reads the bill and when he speaks next perhaps he will try to say something sensible. The results of this Government’s policy will be that social housing will be delivered at very great arm’s length from the Government’s agencies. More power will be given to Ministers, which is another example of an increase in executive power. That is likely to mean a very political approach and it is likely to mean a very dogmatic approach, not one aimed at looking at the best interests of the most vulnerable people in this country, despite what those opposite have been saying. It will, in fact, have the opposite effect. It will mean those people will be worse off and have fewer housing choices, and it will certainly not meet the housing need for people who need to rent homes in this country. It ultimately means more housing deprivation. State houses will be even harder to get, non-government providers will impose their own policies and practices—and goodness knows what they will be—and, most of all, it will mean a very uncertain outcome for low-income people, many of whom will be pushed out of State houses with nowhere really to go. That is a very poor legacy and a very poor outcome. The price of supressing demand, which is what this Government is really trying to do, is very high in social terms. It will cause reduced health and well-being, increased poverty, more families at risk, compromised social cohesion, and an exacerbation of the already bad enough disaffected underclass of people in New Zealand. Despite the Government’s claims, people will inevitably be bullied out of their State houses. The Government will continue to sell State houses. Goodness knows how that will improve the situation for people who need to rent homes in New Zealand. The Government will build far too few State houses, and that is the fundamentally bad part of the Government’s programme. There is no money, really, set aside in this Budget to improve that situation. This Government is simply unwilling to invest and to ensure that there are enough houses for people to rent in New Zealand. It is another step in the wrong direction. The Government will pay huge sums of money to community housing organisations through contracts that are supposed to be tailored contracts.

[Continuation line: What does this term “tailored” mean?]

DENIS O'ROURKE

What does this term “tailored” mean? Again, nobody opposite has really described what that means. What I think it means is that some organisations will be treated differently than others. And what is the effect of that and what is the reason for that? We have not been told. We do not really know what this amendment will do as far as these so-called tailored contracts are concerned. Let us hear an explanation from the Minister, because so far she has not given one. These are still just subsidies to registered providers. Call it what you like; that is actually what they are. These organisations will own the housing funded by the taxpayer, they will profit from it, they will compete for it, and they will try to get the highest rents they can for them. This bill is a retrograde step. It emasculates Housing New Zealand. It seeks to reduce Government accountability. It increases executive power. It does nothing to reduce rents. It does nothing to increase the rental housing stock. New Zealand First will certainly vote against it.

[Continuation line: Stuart Smith]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - STUART SMITH (National—Kaikōura)

STUART SMITH (National—Kaikōura): Well, I think at the heart of this debate about this bill is actually a Government that is putting people at the centre of social housing rather than putting a housing provider at the centre of the bill. It is about people. That is what this whole Budget is about. I would like, with great pleasure, to commend the bill to the House. Thank you.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - STUART SMITH (National—Kaikōura)

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Jan Logie—5 minutes.

[Continuation line: Jan Logie]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): After what may have been the shortest speech of the night—I am not even sure if that last speech made 20 seconds—I rise to take a call—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry, but I will ask the member to start again. I could not hear the beginning of her speech—Jan Logie.

JAN LOGIE: I was just commenting on the brevity of the last speech, possibly under 20 seconds and possibly even the shortest speech of the evening. Well done, National Party. Your enthusiasm and commitment to the detail is absolutely impressive. I am sure we are all feeling far more enlightened on this side of the House about the details of this bill that has just been presented to us so recently. As my colleague has also mentioned, normally we come to the second reading after having been through the select committee process where we have heard submissions from the public who have raised concerns around the detail or the concept of the bill. We have been able to ask questions, and we have had their responses. We have had ministerial advice from the departments, to be able to consider what are the implications and what is this wording conveying. In my experience even legislation that has been one page in length, incredibly short, has resulted in change. That is the usual process that we go through. We are here in this situation with a bill relating to housing, which is an absolute core issue for this country at the moment. We know we have a housing crisis, even if some members of that Government seem a bit shy about using those words. I have heard someone try to use them occasionally, they slipped out, and I am sure they got told off afterwards. But here we are, on a major issue for this country, having legislation passed under urgency. It is legislation that—as we have heard several members on this side say, the detail of it is a little opaque. We are looking at the documents that have been given to us. I am looking at the departmental disclosure statement. What this bill is doing, from what I can make out, is that it is not going to affect a tenant’s experience directly. The actual bill itself though, the context that it is sitting in, is in relation to the passing over of State assets to other private property developers or community organisations. But the actual bill itself will enable the Minister to have flexibility to tailor its contracts. We have been hearing a lot about flexibility. What they are saying specifically is that with tenants’ needs resulting in higher or lower tenancy management costs, they can vary the terms of the contract, make payments for vacant properties to guarantee a provider’s income stream, and make offers for long-term fixed-price tenancies at prices that diverge from the market rent but benefit the Crown, the provider, and the tenant. We see mention of the tenant in there a couple of times, but not that often, despite the fact that we have been told this is all about the tenants; it is not about anybody else. It is not about the Government and it is not about the providers. It is about the tenants. Actually, there is not much mention of the tenants, from what I can see in this. There has been no consultation with any State housing tenants, in the documents here. I am hearing from State house tenants in the community that this is very unsettling. Communities are being destroyed at the moment, and that is what people are telling us. Communities that have existed in Maraenui, in Porirua, in Glen Innes, and around the country, longstanding communities, are being destroyed. Yet we hear from the National Government that apparently it is the Government for big communities. [Interruption] Well, communities of constant transition and movement—that is actually not a community, Mr Doocey, might I say. We are being told that this is about lower payments for providers in places where there is little ongoing demand. I really think that there is enough detail and complexity in there that deserves consideration, and I do have some questions for the Minister. We are being told that this bill will allow community organisations to get more money to meet the needs of clients. It is not necessarily even about the sale of houses, but in leasing arrangements. I am struggling to see—I know Women’s Refuge gets houses through Housing New Zealand at the moment, and the needs of women and children going into refuge are dealt with through separate contracts, not through the housing-related contracts. So I am struggling to see where this fits and why those specific needs of tenants cannot be dealt with through existing contracting systems. I am also struggling to understand why Housing New Zealand would need more flexibility. There are questions to be answered, and I really hope that at least at some stage in this debate we get some answers.

[Continuation line: The ASSISTANT SPEAKER (Lindsay Tisch): The Hon David Cunliffe

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): The Hon David Cunliffe—5 minutes.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

Hon DAVID CUNLIFFE (Labour—New Lynn): It is déjà vu. Here we are, in the dead part of the evening, passing a Budget bill under urgency, through all stages, when it is not urgent. It is not urgent. The only thing that is urgent is to relieve the Government of embarrassment because New Zealanders do not want the Government to do what this bill does. I remember a picture of Bob Semple taking the first table into the first State house. New Zealanders loved Mickey Savage’s Government, which built State houses so that New Zealanders who could not afford to rent a house got a roof over their heads. Then the Clark-Cullen Labour Government brought in income-related rents, to take some pressure off families who could not put food on the table. Well, this bill undoes all of that. This bill empowers the Minister to flog off those State houses to four profit developers, in a grand payback to their business lobby mates. This bill gives the Minister the ability to change by fiat the 25 percent fixed income-related rents, thereby costing hard-working New Zealand families the food off their table because they cannot afford the crazy prices of Auckland rents. This is a sad day, and the Government’s pollsters know it. That is why we are here, in the middle of the night, passing this bill, this shameful bill, through all stages without a select committee hearing, without the opportunity for New Zealanders to have their say, because the Government wants it. There they are—sitting and chirping, smug in the arrogance of a third-term Government. They are smug in the arrogance of a third-term Government. They just want it off the TV screens, because they know New Zealanders fundamentally deplore what is being done in this bill. The housing crisis is about real people, like the people in my electorate. We have three families with young kids who are living in garages. They have come to my office.

[Continuation line: We have a family of 12 in a two-bedroom property]

Hon DAVID CUNLIFFE

We have a family of 12 in a two-bedroom property, and the adolescent kids do not have rooms and they do not have privacy. We have got a family that is under abuse that could not get a safe house because there are not enough houses. And you know that the solutions to those terrible problems of overcrowding and abuse are not hard to think of. You build more houses and you get foreign investors out of the market because they are simply speculating and driving up the rents.

Carmel Sepuloni: That makes sense.

Hon DAVID CUNLIFFE: That makes sense. It is not that hard to understand, but what is the Government doing? It is flogging the State houses off for profit, and it is going to drive up rents by fiddling with the income cap. It is taking it in exactly the wrong direction, because this is a Government that has hit the panic button—hit the panic button. It is well into its third term, it has finally woken up to the crisis, and the word came from the pollsters: “You’d better do something.” And there is no plan except profit with these guys—no plan except for profit, which comes off the tables of hard-working New Zealanders. Hard-working New Zealand families like the family in my electorate—12 of them in a two-bedroom house—are waiting for the State house that will never come. So, you know, the Government said: “Well, we will give it to the community sector, like the Salvation Army or the Methodist Mission.” Well, they are decent people, who said: “We don’t want an unfunded mandate. What are we going to do with all of the liabilities when you are not giving us any money to buy them with?”. It is a travesty, and the longer that New Zealanders have to hear about it, the less they are going to like the Government that is flogging off their houses for profit and pushing up their rents. That is why we are in this House, in the dead of night, passing this bill without a select committee hearing. It is wrong. The bill is wrong. The process is wrong. The result is wrong, and it will be part of the undoing of this selfish, greedy Government, which is acting against the interests of New Zealand families.

[Continuation line: Dr Parmjeet Parmar]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Dr PARMJEET PARMAR (National)

Dr PARMJEET PARMAR (National): In very simple terms, this bill aims to help families in need, to get into social housing that meets their needs. How can this be wrong—meeting families’ needs? It cannot be wrong. As we heard, this bill is to introduce flexibility for the Ministry for Social Development to contract and negotiate with social housing providers, to support a growing role for community providers to deliver social housing. It is also to improve the supply of social houses to meet demand. It also clarifies and confirms a number of processes that already happen in practice. This bill will also help tenants get back into housing independence. We want to make sure that those people who are in real need are provided with social housing. We are making social houses fit for people to live in. They are not just properties to us; they are houses where we want to house people in need—families in need. This National Government has insulated all State-owned social houses. They are warmer, drier, and healthier under this National Government. This flexibility about ownership is a great thing. Social houses sold will remain as social houses, and the tenants will remain housed in them for the duration of their need. This is a win-win situation for tenants, for local communities, and for taxpayers. It is not the duration of the speech; it is the message that counts, and the message is that it is a win-win situation for tenants, for local communities, and for taxpayers. Thank you, Mr Assistant Speaker. I support the bill.

[Continuation line: Dr Megan Woods]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Dr MEGAN WOODS (Labour—Wigram)

Dr MEGAN WOODS (Labour—Wigram): Never before has so much pride been displayed by so few in such a short space of time. It has been quite cooling. That was one of the longest contributions that we have had at a second reading on a bill going through under urgency, where it is not having the scrutiny that we would expect in Parliament under normal circumstances in terms of its select committee stage. It is, frankly, an arrogant Government that thinks that it can rush through legislation at this pace, even under urgency, without giving that legislation a full debate and a full airing. We have heard some fantastical explanations why. There was Mr Doocey, who thinks that, magically, houses are going to grow overnight if only this bill is passed. We will wake up in the morning and, throughout the land, there will have sprouted houses, into which the good people can move. There is a naivety in this Government, which is showing through in this legislation. We are hearing over and over and over again the panic that has set in in this Government with this piece of legislation. There has been some polling and those members have seen there is a problem—their inaction on housing over their 7 years in Government—yet here we are, pushing through a half measure that is only enabling something that is not going to help the situation. It is the only solution that they have come up with. Other suggestions that they have had around housing seem to have disappeared, such as the much-touted during the election campaign, and the much-touted at the beginning of this year, Resource Management Act reforms. That was going to be the silver bullet for housing in New Zealand. We are still waiting for Dr Smith to show us those reforms. We have actually said: “Show us them. Put them on the table, and, do you know what? If there is some stuff that will help with housing, we’ll look at it. Let’s use the mechanism of a national policy statement, and then we could actually perhaps join with you and work on that.”, but has National fronted up and shown it to us? No, because this is a Government that does not have answers around housing. This is a Government that has got empty ideological rhetoric, which is not going to make a blind bit of difference to the lives of ordinary New Zealanders. What we have had tonight—starting with the Prime Minister, and it echoed through all of the research note speeches—is a clear commitment to compassionate conservatism coming from the Government benches. The compassionate conservatism that those members believe they are displaying seems to evolved and, actually, it translates into the big society. One of them let it slip, but I think he got it wrong and called it big community. The term that your overseas overlords use is “big society” when talking about this.

[Continuation line: National Party members need to actually have a look]

Dr MEGAN WOODS

National Party members need to actually have a look at what compassionate conservativism is. We actually have had National Parties in the past in this country that have practised compassionate conservatism. What is happening in this House tonight and in this legislation is not the conservatism of Sid Holland and it is not the conservatism of Keith Holyoake. When those leaders of the National Party sought to remove the State from housing, they looked to sell houses to the individuals who lived in those houses. They did not look to flog them off to their mates in the corporate sector, in order to put people under corporate overlords. This is the “Cabinet Club” conservatism, as my colleague Phil Twyford called it, that undermined the 1990 market rentals that Ruth Richardson put in place. Do not kid yourself that this is any form of compassionate conservativism. When compassionate conservativism started to be touted by right-wind parties—it was Bush who first started using it. He abandoned it pretty much after 9/11 and just went into plain old “kick’em in the guts” right-wingism, actually. Compassionate conservativism does not look back to your roots. You are a party that has been better than that—Mr Assistant Speaker, I am sure you are as well. The National Party does have a history that is rooted in some belief in that, but what we are seeing displayed tonight is not that. This is a return to the 1990s and a belief that you can sell State houses off to anyone. We started with the fiction that this was legislation to enable State housing to be sold to the community sector in some hope of achieving their big society. Well, the problem that we are seeing here, as we have seen in many places, is the key providers in that sector said “Yeah, thanks but no thanks.” and that they did not believe that State house tenants would be better served under this model than they could be with the Government providing, so they did not want a part of that. And what have we had now? We have had Bill English saying that, yes, we could be seeing some of these being sold to private property developers. The Government has tried to dress this up as something that this is not. This is pure and simple a flogging off of our State houses. What else are we seeing? Not only is the Government divesting itself of the ownerships of the housing, it is divesting Housing New Zealand of some of the core policy functions and thinking that needs to go into this, so that we will no longer see Housing New Zealand having a policy function. We will not have a dedicated part of our Government that tries to put the bits of housing policy together. Instead, we are going to see a continuation of the approach that we have seen, with the functions spread and splintered across Government, and we will see that it does not have a coherence that has tenants at the centre and the well-being of the tenants at the centre. My colleague Phil Twyford put it very well when he talked about a State-owned version of Barfoot and Thompson, that we will have a State-owned letting agency, not a Government department that is dedicated to doing what we expect Housing New Zealand to do and doing what its functions should be. That is a very sad day for New Zealand because what we used to have in this country is a belief that a core part of the safety net that we provided for our citizens was housing—housing that would mean that people would not have to go homeless. I think what we are going to hear through the course of this debate is examples from all around the country that we can speak about where we have constituents who are not being well served. What is most upsetting for us is that these very same constituents are going to be even worse served under the changes that we are making here under urgency tonight. There is nothing in this legislation that is going to back our tenants. Instead, what we have is an ideological commitment to selling houses off to whoever the right bidder is that they can find. The shortage of housing is getting worse, and other speakers from this side of the House have alluded to the fact that selling houses does not create more houses.

[Continuation line: I think my colleague Annette King]

Dr MEGAN WOODS

I think my colleague Annette King chose to point out that selling them off is not going to magically create more houses any more than passing legislation under urgency, Mr Doocey, will allow for houses to magically appear on the landscape of New Zealand. What we have to have and what we are not having from this Government is a proper commitment to the Government ensuring that New Zealanders are housed—something that we think is a pretty basic role of Government and something that we are committed to doing. Just simply passing the buck on to the community sector, which does not want a bar of it, is not responsible Government in this area. Passing the buck and abrogating itself of its responsibility as a Government is not good enough. But what is more galling is where I started: that this is a group of people who are trying to kid themselves that this is some kind of compassionate conservatism. This is a return to their 1990 roots, not their roots in the past in the 1960s and the 1950s, when actually there was a grain of truth in the fact that National Party in New Zealand did exercise a kind of compassionate conservatism. There was a belief in the role of the State. There was a belief that it need to do right by New Zealanders. We are not seeing that in this legislation. What we are seeing is a Government that is walking away from one of its core responsibilities, which is providing adequate housing. It is a Government that is out of ideas. It is a Government that is poll driven. What we are seeing here tonight is not going to solve anything.

[Continuation line: Jono Naylor]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JONO NAYLOR (National)

JONO NAYLOR (National): Given that the members opposite are so keen to talk about the details of this bill, I will simply commend this bill to the House so we can move to the Committee stage.

[PV on second reading—Ayes 63 Noes 58]

[Continuation line: In Committee]

Adjournment

In Committee

CHRIS HIPKINS (Labour —Rimutaka): I am very pleased to take a call on this particular bill. I want to say from the very beginning how disappointing it is to see the National Government’s wholesale privatisation agenda for when it comes to State housing in New Zealand. I want to talk from experience about this. What does this actually mean in practice? In my electorate of Rimutaka, the National Government decided that it was going to deal with a housing area that had significant problems in Pōmare, Farmer Crescent. What did the Government do? First of all, it booted everybody out. It completely evicted all of the tenants in that area. It left the houses empty, and they got vandalised. Then what did it do? Next, it came along and demolished all of the houses. It demolished all of the houses. Then what did it do after that? Well, of course, the Government hocked off the land to private developers—to private developers—which is exactly the approach of this National Government. It is about making opportunities for private developers. Did the problems disappear? Did the families who lived in those houses who were the subjects of many of the social problems simply disappear? No, they just relocated elsewhere. The problems went with them to the other locations. They did not actually deal with the underlying problems and the underlying issues. So what have we seen in Pōmare?

[Continuation line: Yes, they have got some nice new houses]

CHRIS HIPKINS

Yes, they have got some nice new houses in the area where there was previously a whole lot of State housing. Only a fraction of them are social houses. Only a fraction of them are social houses, and the rest are privately owned.

Hon Bill English: Isn’t that terrible! Shocking!

CHRIS HIPKINS: And what is the problem with that, Bill English asks. The problem with that is that the overall number of social houses is decreasing.

Hon Member: He’s saying: “Isn’t that terrible!”.

CHRIS HIPKINS: And he is saying: “Isn’t that terrible!”. The overall number of State houses is decreasing. I say to Bill English that I actually like the idea of mixed neighbourhoods. I grew up in one. I grew up in an ex-State house, with a State house next door, a private house on the other side, and a bunch of State houses on our street. It is a great way to grow up as a Kiwi kid. I am fully supportive of that. But I tell you what: we have got to make sure that there is an adequate number of social houses if we are going to change the make-up of neighbourhoods. And that is not what this bill is going to achieve. What it is going to result in is a wholesale sell-off of existing State houses, and there is absolutely—

Tim Macindoe: Saying it a thousand times won’t make it true.

CHRIS HIPKINS: OK, look, I will open it up to Tim Macindoe. I will put the same challenge to him that Andrew Little put to John Key and Bill English and the others this afternoon, which they did not take up. Will they guarantee that every one of their new houses that is going to be built will be affordable? It is an open invitation. It is an open invitation right now: will they all be affordable houses that the National Government is going to be building? No one—no one—on the Government benches is willing to make that promise to New Zealanders, because they know that is simply not going to be the case. Here is another example. Will they guarantee that the number of publicly-owned social houses will not decrease? No—no, absolute silence from the Government. So when it comes to the provisions of this bill, they are not willing to guarantee that the number of publicly owned social houses will not decrease. These are families who we are talking about. These are their homes that we are talking about, and this Government thinks that they should be hocked off—they should be hocked off—and it is not willing to guarantee that the overall number will not be decreased. I think that says an awful lot about the priorities of this current National Government.

Tim Macindoe: That’s what this bill is all about. We are working to increase—

CHRIS HIPKINS: No—here we go. So Tim Macindoe is saying that this bill is all about increasing the provision of social housing. Who is going to deliver those houses? Who is going to deliver those houses? Because all of the organisations that Bill English and Paula Bennett and Nick Smith said were going to front up and deliver those houses have said that they are not interested in it; they have said that they do not have the capability to deliver it. So now they are bringing a bill before the House that is going to increase the scope for private developers to be involved in this. And, of course, what do private developers want out of this? They want to make money. They want to make money out of it, and fair enough. That is their job. That is what private developers do. That is one of the reasons why, over the history of New Zealand, Governments have been actively involved in the building and delivery of social housing in New Zealand, because they can do it cheaper and they can provide a higher quality of housing than private developers have done in the past. That is also one of the reasons why our many ex-State houses contributed to the provision of affordable housing for first-home buyers. This Government is not interested in that. It is happy to sell them off, but it is not going to replace them. Previously, when Governments have sold off State houses to allow first-home buyers into their first home, they have made sure they have been replaced. Not this National Government. We saw, under the mother of all Budgets and under the tenure of the Government that took over from that, a massive reduction in the number of State houses in New Zealand. And what was the impact of that? The impact of that was that more and more New Zealanders ended up on waiting lists. And how did this Government deal with that increase in the number of New Zealanders on waiting lists? First of all, it just dropped the bottom two categories off the waiting list altogether. So if you are a priority C or D person on a waiting list, they just cut them off altogether—pretended they no longer existed. Those people are still out there looking for houses, but this Government does not want to know anything about it. This Government is not interested in making sure that there is sufficient provision of social housing for people who cannot afford to buy, and sufficient provision of affordable housing for those who want to get into their first homes. They are looking the other way. It is going to cost someone a million dollars—within a few months it is going to cost a million dollars for someone to buy a home in Auckland, on average. That is an absolute disgrace, and that has happened under the tenure of this National Government. It is simply out of ideas when it comes to dealing with the real issues around housing in New Zealand. It has got no real plan for more affordable housing for first-home buyers, and it is turning its back on those who cannot afford to buy a home and who do need that extra support when it comes to housing. Who pays the cost? It is the children and it is the families who will pay the cost for that. Of the 6,000 people who applied for social housing in the last quarter, 4,000 did not even make it on to the waiting list. They did not even get on the waiting list. Two-thirds of people—

Sitting suspended from 10 p.m. to 9 a.m. (Friday)

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

In Committee

CHRIS HIPKINS (Labour—Rimutaka): I do wish to continue; I am just getting warmed up. As I was saying last night before I was so rudely interrupted by the adjournment, this Government claims that this year’s Budget is sticking with a plan that is working. The real question that New Zealanders will be asking is: working for whom? Who is that plan working for? Working for the property developers is what this Government is really interested in, not working for the first-home buyers who are struggling to get on the property ladder, not working for the people who live in State housing who are being ignored, shafted, and having their homes sold from under them by this National Government. Why is the Government pushing this measure through under Budget urgency? It is pushing it through because it does not want it to have the scrutiny that it really deserves. It does not want all of the social housing providers, who do not want this, to be able to come to a select committee and explain how this will not actually work—how this will actually result in a massive transfer of wealth from the Government sector into the private sector, and it is the housing tenants who are going to pay the cost in the long term. The Government does not want this all to come unravelled through a proper public inquiry, through a select committee inquiry, so it is pushing it through under urgency. When Government members first mooted this idea that the private sector should have more involvement in State housing, they tried to say: “Actually, it’ll be the social sector, the organisations like the Salvation Army and these sorts of unspecified others who will be involved.” They cannot name one organisation that is actively involved in the social sector at the moment that actually wants this to happen. This is an open invitation to all the Government members over there: name one—name one. Not one—they cannot name one social sector agency that actually wants this to happen and that wants to be involved in these provisions. Simon Bridges points to himself. He is now a social sector agency in his own right. “Captain Slick” over there has now decided that he is going to become a social sector agency in his own right. This is simply unnecessary. It should not be being pushed through under urgency. It deserves proper scrutiny. The National Party promised New Zealanders at the last election that there would be no more asset sales. I did not see the footnote in small print that said: “except for all the State houses that we’re going to hock off in a fire sale, up and down the country.” Billions of dollars’ worth of State housing assets is now on the auctioneer’s block, under a National Government that promised New Zealanders it was going to stop asset sales after the election. That was another broken promise in a long litany of broken promises made by this National Government, and that was absolutely abundantly clear in this Budget. Of course we know it is not going to get back into surplus this year and probably next year, either. It is not going to deliver on its promises. It has got no plan to deal with the housing crisis that we have in New Zealand. In a very short space of time, $1 million is going to be the average price to purchase a house in Auckland, and other New Zealanders suffer because of that. They have higher interest rates around the rest of the country because the Government is not dealing with the housing crisis in Auckland. Even the plan to free up land in Auckland—which, of course, was a plan that the Labour Government was actioning back in 2008, which the then incoming National Government cancelled, so it is 7 years behind the eight-ball. Even then, the Government is not going to guarantee that houses built on that land are going to be affordable houses. It offered the opportunity multiple times yesterday to give New Zealanders an assurance that those houses would be affordable, and they did not take it because they know they cannot, because freeing up all that land is not going to benefit first-home buyers; it is going to benefit property developers.

[Continuation line: Hon Annette King]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Hon ANNETTE KING (Labour—Rongotai)

Hon ANNETTE KING (Labour—Rongotai): When we get down to the hard end of a debate, this is when we actually get the opportunity to question the Minister and the Minister can take that chance to answer the questions that we have been posing in the first reading and the second reading. We have one of the up-and-coming Ministers—well, he was an up-and-coming Minister—in the chair this morning, Simon Bridges, and I am sure he is going to take this debate very seriously. Last night we were told of how proud and excited the members opposite are about this legislation. They were so proud and excited that they took 1-minute speeches. I think the record was 27 seconds.

[Continuation line: So that is how proud—in fact,]

Hon ANNETTE KING

So that is how proud—in fact, I think the speech from the member Jono Naylor might have been 27 seconds. But, anyway, we are now in urgency debating a bill that is not going to go to the select committee. It is not going to the select committee—for no reason that we know about. There is no urgency about this legislation, other than Mr Doocey from down in the South Island, who said that if we pass it today we will get 3,000 homes tomorrow. Well, of course, we all know that that was rubbish. So now is the time for the Minister in the chair to answer the questions the public would ask if they had the opportunity to appear before the select committee. I would like the Minister to tell me whether he has read the regulatory impact statement on this bill. If he has read the regulatory impact statement, why are there no reviews or evaluation reports to inform on this bill and on whether the policy given effect in this bill will work? That is what the regulatory impact statement says—that there are no reviews or evaluation reports on this policy. So the Government does not even know whether it is going to work, because it did not bother to get an evaluation or a review on the policy. The Government has not allowed the public to review or evaluate the policy because it is passing it under urgency. Why was there no evaluation? Why not do what Sir Peter Gluckman, the Prime Minister’s Chief Science Adviser , constantly tells the Government to do? What does he say? He says that the Government should base its policy on evidence, good evidence—good policy comes from good evidence.

Hon Member: Any evidence.

Hon ANNETTE KING: Any evidence would have been a help—that is true. So why was there no evaluation or review done on this policy before this bill was brought into the House? Minister, we would like an answer on that. Secondly, Minister, why did Treasury not provide independent opinion on the impact of this bill? Why did Treasury not provide that independent opinion? From my experience as a Minister, Treasury usually comments on absolutely everything whether you want it to or not, so I can only assume that the Government did not want Treasury to comment on this bill—because the regulatory impact statement says that, no, there was no independent opinion from Treasury. Why not, Minister? Why not do the work to find out whether this policy is going to work for the very people who are affected by it? I think that the members opposite were absolutely stunned, the “C Team” that was rolled up here last night was absolutely stunned that there was no evaluation done. Do you know what? They had not read the regulatory impact statement. Not one of them had picked it up off the Table—[Interruption] Had you? Not one of you had read it. So like lambs to the slaughter they come in here and vote for something when they do not even know how it works. There has been no evaluation done on it. Well, that is very, very poor policy making indeed. For my last question I want to know, Minister, why the Minister concerned wants more powers to make delegated legislation under ministerial direction. My understanding is that there is already power for the Minister, but she is seeking greater powers for greater flexibility to be able to sell off State houses, and all she needs to do is to gazette this ministerial direction and present a copy to the House after some sort of consultation. When I look at the consultation that took place on this bill, it took place with people in the community sector who did not know what the agenda was, and it took place back in March, when Bill English was saying: “The Salvation Army are really keen on this policy. They’re going to move on this policy.”, but the truth is that they were sold a pup and they are not interested in it.

[continuation line Grant Robertson]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - GRANT ROBERTSON (Labour—Wellington Central)

GRANT ROBERTSON (Labour—Wellington Central): To pick up where my colleague Annette King left off, not only were those providers sold a pup but the whole of New Zealand was. This policy is about nothing more than finishing off the job of privatising and destroying social housing in New Zealand. That is the job that the National Party decided to kick off in the 1990s. Last night Kevin Hague said he could picture the clothes and the colours of the 1990s, the pastels and the big hair of the 1990s. Kevin might even have had hair in the 1990s, who knows?

[continuation line: Actually, no he did not]

GRANT ROBERTSON

Actually, no, he did not—he did not have hair in the 1990s either. It was in the 1990s that the National Party began its ideological crusade against social housing, and that is what this bill carries on. Part 1 is all about finishing the job that National started in the 1990s—13,000 State houses were sold off in the 1990s. Every member of this House who is an electorate MP will say, if they are honest, that one of the biggest issues that comes through the door of their electorate office is people who cannot who cannot find housing. In my office we used to call it the “Friday, 4.30 p.m.” problem, when people would come in on a Friday afternoon with nowhere to live and nowhere to sleep on the weekend. They do not go to the National Party offices because they do not get any response. They come to our offices and we work hard with the social housing providers to find them somewhere to live. This bill is a charter for the Government to abrogate its responsibility for social housing. What is more fundamental in our society than the need for shelter—the basic right of people to shelter? In our society, if people cannot find shelter themselves and if people cannot afford to house themselves, it falls to the Government to ask how it will make sure that shelter is provided. The National Government’s response to that is this bill. It throws away the Government’s accountability, throws away its responsibility, and pushes that on to the social housing sector. As Annette King said, the social housing sectors have looked at this policy and have said no. They have said: “We cannot do this. If you want us to be the people who take on the role that the National Government does not want any more, then give us some money to do that. Give us some money to be able to provide that housing.” But that is not National’s agenda here. National’s agenda here is to push the problem away to other people, cut the funding as it goes along, and then blame those people for the situation that they find themselves in. But the extraordinary thing about this legislation, in Part 1, is the power that the Minister gains out of it to enter into “flexible purchasing arrangements”. What a form of doublespeak. What a form of doublespeak from the National Party. The flexible purchasing arrangements are to allow the Minister to hock this stuff off to property developers—to the people who funded the National Party’s election campaign last year. [Interruption] That is right. This is about making sure that there is a sweetheart deal possible between the Minister and property developers. Hock it off at a cheap price—make it try and work. But the fundamentals of this policy are deeply, deeply flawed. You know, we have housing Ministers—and goodness, there are tonnes of them now in the National Party—who cannot actually come up with a decent policy, but there are tonnes of them. We have housing Ministers tell us that the problem with the social housing stock is that it is poorly configured and in the wrong place, so the solution to this is to sell the poorly configured housing in the wrong place to somebody else, and somehow that will solve it. Somehow the problem is solved by shifting it to somebody else. How typical is it of the National Government to solve a problem by shifting it to someone else and blaming them for not sorting it out? That is what Part 1 of this bill is fundamentally about. It is about a National Government with no real plan for how to make the lives of people in social housing better, and it would rather flick the problem off. So the questions for the Minister in the chair, Simon Bridges, are important. Why are these flexible purchasing arrangements being put in place now, when there are no social housing providers who want to buy into this scheme?

Hon Annette King: It’s only for the developers.

GRANT ROBERTSON: So it can only be for the developers. The question that Simon Bridges needs to get up off his chuff and answer right now is why National is pushing this policy through Parliament today when there are no when there are no social housing providers who want to take this up. It is an ideological experiment. This bill—Part 1—should have been scrutinised at a select committee. It should have gone to a select committee so that members of the public and social housing providers could have at least tried to turn this pig’s ear into something useful, but that opportunity was not granted to New Zealanders. I want to make another point about what Part 1 does.

[Continuation line: What Part 1 does is finally kill off]

GRANT ROBERTSON

What Part 1 does is finally kill off Housing New Zealand’s role as a social housing provider. For over 7 years National has come in and said: “Housing New Zealand, you are a landlord. That’s it. Plain and simple.” In fact, this goes even further. This takes it from landlord to letting agency. That is what this bill does. Once upon a time Housing New Zealand played a role in understanding the needs of its tenants and how many electorate MPs in this House, and list MPs as well, have Housing New Zealand tenants coming into their offices because Housing New Zealand is no longer there to help support them in their lives. I have got this question for the Minister. In this environment where all these problems are being shoved away, down the road here on The Terrace in my electorate are the Gordon Wilson Flats. They have been empty for 2½ years. What is happening for social housing in a community like Wellington city? Wellington Central is a wealthy electorate on average but when you look inside the lives of people who got thrown out of the Gordon Wilson Flats, their lives are not getting better. They need support from a housing provider that looks at their broader social needs. Housing New Zealand used to make policy about housing, about the fact that we might actually need a plan for housing in New Zealand, and that we might actually need to think about the future needs of those who live in our social housing. But this bill, Part 1 of this bill, says that is not the Government’s responsibility any more. So it is not only outsourcing the provision of social housing; it is outsourcing the policy for social housing. It is saying that Housing New Zealand has got no role. Maybe they will not, actually, because they appear to be mute today, but perhaps at some point a National Party member might get up and say: “No, he’s got it all wrong. It is MSD who is doing housing policy now.” Well, good luck finding someone in the Ministry of Social Development you can talk to about social housing policy. Good luck finding that distributed among the thousands of other tasks that people in the ministry have got. If we are serious about the importance of providing shelter to our most vulnerable citizens, then we would have an agency whose job it was to focus on that. Instead, what this bill will do is take that away completely from Housing New Zealand and turn them, as my colleague Phil Twyford said last night, into the public equivalent of Barfoot and Thompson—a real estate agent, a letting firm. That is not good enough. That is not what a responsible Government does. What a responsible Government does is take seriously its responsibilities to the most vulnerable New Zealanders. Just because the Government and Bill English, like some kind of Southland form of Rip Van Winkle, have woken up to the problem of inequality and poverty overnight after 7 years does not mean that the National Party has got a plan to lift people out of poverty. It does not mean the National Party has got a plan to ensure that we reduce inequality. After 7 years of slumber to suddenly decide we are going to do something in this area—actually, this bill is much more instructive about where the National Party is at when it comes to the most vulnerable New Zealanders than a small amount of money going into some families’ bank accounts. This bill shows that the ideological agenda of the National Party is not over—it is not over. In fact, this finishes off one part of it and says that social housing is somebody else’s problem. Well, on this side of the Chamber we think that the shelter of our most vulnerable citizens is a core responsibility of the State. It is a core responsibility of the State to work with the other people who are providing social housing as well as its own provision of it, not shove the problem on to them with inadequate funding. This bill thoroughly undermines what we have come to believe is important about social housing. Nothing has stuck in my craw more in 7 years than being lectured by National Party members about State housing and the legacy of Michael Joseph Savage and Peter Fraser. This bill is a slap in the face to the legacy of social housing and if we go out to Fife Lane in Annette King’s electorate—

[Continuation line: Bridges]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Hon SIMON BRIDGES (Minister of Energy and Resources)

Hon SIMON BRIDGES (Minister of Energy and Resources): If you listened to the Labour Party members you would think this bill was some kind of wildebeest Gene Simmons - like monstrosity coming to get you, with tongue flapping in the wind. Well, actually, Andrew Little might like that and we have heard a lot of rhetoric from Grant Robertson on this bill—rather better, actually, I might say than his leader yesterday, but be that as it may. So what is this monstrosity we have heard about? What is it doing? Where is the secret agenda? Where is this ideology? Well, it is just this.

[Continuation line: Bridges: We see this in the preface]

Hon SIMON BRIDGES

We see this in the preface: more flexible and innovative social housing—more flexible and innovative social housing. So for all the talk, all the, frankly, scaremongering, we have got from the deputy leader of the Labour Party, that is what this is. I, for one, think that is a great thing. I was with Paula Bennett and Todd Muller in Tauranga last week, looking at the kinds of thing this bill will enable more of. It is really, really exciting.

Hon Ruth Dyson: Yeah? Tell us.

Hon SIMON BRIDGES: I will tell the member Ruth Dyson. She wants to know. Two old rundown State houses in a suburb in my electorate are going to become five new brick, I think, warmer, drier houses that will be fit for purpose for people and that people will really want to live in. In that area it will give not just those people living in those houses a lift but the entire area, and that has got to be good for the people in those houses and the people in that suburb and, actually, in the wider community. Another one we went to on the same day was eight flats—just to give a bit of detail—a little bit behind Tauranga Hospital. Eight flats—they are all right. There was nothing particularly wrong with them. They have become, with the help of the Tauranga Housing Community Trust, 16 brick and tile homes that the people in those homes are really proud to live in. They are warmer, they are drier, they are newer—they are just better. And there are more of them.

Hon Members: Where’s that in the bill?

Hon SIMON BRIDGES: Here is what this bill does. It allows for more of that, for the flexibility and for the innovative approaches to that that ensure that we will see more of that in the Taurangas, in the Invercargills, and throughout New Zealand. And here is the thing: this is winding the Opposition up. This is winding the Opposition up. Why is that? Because it knows that what I am saying is true. It knows that for 9 years under Labour, under Ruth Dyson and under Annette King—I cannot blame Phil Twyford; he was not in Parliament—those houses got older. They got more decrepit. They had problems. And, actually, we are going to see the solutions here. Annette King asked who else is going to do this, who actually wants this. Well, we have seen on TV already that Accessible Properties says it wants to see it and the old IHC—a really big entity in this space—wants to see this. Grant Robertson says this is all ideology. That is all this is; it is all ideology. Well, if it is, it is simply that, actually, we think there is room for more flexible approaches to this. We think there is room for more innovation. We do not think Wellington has all the answers, unlike Grant Robertson, representing Wellington Central bureaucrats. We think there is room for warmer, drier, more fit-for-purpose homes—actually, more homes, in many cases, going from three or four-bedroomed homes with one person living in them to what oftentimes they actually want: more homes that sometimes are smaller and sometimes are bigger and that meet the needs on the ground. We know on this side of the House that Wellington does not always have the best answers, that, actually, in the Taurangas and the Invercargills, where we are trialling this sort of approach already, it can be done better. There are people on the ground who actually know—it is radical; I know that it is radical—what is best for people there who are on the spot and who know and care about those communities, rather than as Annette King used to do it, just someone in Wellington sitting at a desktop thinking about this and saying: “Hmm, maybe this’ll be nice. No, that looks fine.” This approach will see more innovative, flexible approaches on the ground throughout the provinces of New Zealand. It is a really good set of solutions for New Zealanders.

[continuation line: Jan Logie]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): I rise to take a brief call in the Committee stage of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I would just like to acknowledge that it is Pink Shirt Day today, and I am hoping that this House will take a break from bullying. It would be a really nice thing to have a day without any personal abuse within this House. I want now specifically to speak to and to ask the Minister in the chair, the Hon Simon Bridges, some questions, because we have just heard about flexibility and innovation from the Minister. That was pretty much the entire content of his speech that I heard.

[continuation line: It seemed to echo]

JAN LOGIE

It seemed to echo the speeches that we heard in the first and second readings last night from members of the Government in their 20 seconds—basically, I would say that was probably the average length of their speeches—which said that this provides flexibility and innovation. Where is the detail, people? This is a bill going through under urgency with no public scrutiny, with no Treasury input into the financial consequences of this bill, and we are being told that it provides flexibility and innovation. Where? In what situations? Why? What is the problem that this trying to solve? We are not even being told that amount of detail. The documents that I am looking at in front of me are saying that it will give the agency a new ability to negotiate prices with providers to cover diverse situations including, but not limited to, tenants’ needs resulting in higher or lower tenancy management costs. Tell us what that means in practice, because we also heard from the Minister Paula Bennett last night in one tiny snippet of detail that this is around, say, if the tenants have disability needs. This will enable contracts to be able to help housing providers deal with their wider needs—this wraparound service that we hear so much about. Well, that is something I would like to support, but my understanding is that there is the ability to do that through other contracting provisions. Why are the needs around disability needs being provided through housing? Please explain it to us. If you have got a good reason for it then we may support it, but explain it. At least give the public the credit of explaining what this is even about and the reason for it. I would also like to say that the Minister last night, in another tiny snippet of detail that may help us understand it, said that it also provides Housing New Zealand with more flexibility in contracting and the ability to fund Housing New Zealand. I do not have the housing portfolio for the Greens, but I have got a little bit of an understanding of housing and some of the way that the systems work, possibly more than your average New Zealander. I still do not understand that. I am not sure why we need Housing New Zealand to be able to get more flexible arrangements for the funding of its services. Could you explain that to us? Minister, could you also please explain to us why we are separating out and preventing Housing New Zealand from providing policy advice to the Minister. Why are we stopping the ministry, which has the experience and the relationship with the people in the community, from feeding any learning it has back into the Minister to inform policy making? Why? I would like some reasons. I would like the public to be able to at least have an informed decision on their view on this bill, more than just the rhetoric of telling us that it is about flexibility and innovation. They are words, and without any substance they have very little meaning.

[Continuation line: Clayton Mitchell]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - CLAYTON MITCHELL (NZ First)

CLAYTON MITCHELL (NZ First): I stand on behalf of New Zealand First to take a short call on this new piece of legislation called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, which to me is quite ironic, really, particularly when we talk about the flexibility that I think this bill is actually trying to address, and that is the flexibility of the socially impoverished people of this country being flexibly rammed around corporations in new, innovative ways, which are the words that I keep hearing from Simon Bridges about flexibility and innovation. That is what we think of this Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, which has been pushed down at such great speed that we do not actually have time to consult with the public to find out what the real, serious concerns are. We are not hearing anybody out there screaming from the rooftops saying this is a great idea. New Zealand has had over 100 years—100 years—of standing up for those people in need with social housing. I do not think there is anybody in this room who does not know somebody who has been brought up in a social home. In fact, the Prime Minister himself got brought up in a State home. Many of us have had those same privileges—I will call it a privilege—but what it happening here is this is being packed up, sold off, and given to the friends of the National Party so that they can make some profit out of this situation. National is saying that it is good for—who? It is good for the corporations and the big companies that are actually putting this deal together, but not good for the people who seriously, genuinely need State homes and the support from the Government.

[Continuation line: This is certainly not something that should be packaged up and given out]

CLAYTON MITCHELL

This is certainly not something that should be packaged up and given out to people who desire to make money whichever way they can. This is where the Government has got a legal and moral obligation to stand up for those people and their rights, to ensure that they get sufficient housing support. This bill is being pushed through very, very quickly. Mr Bridges spoke about warmer, drier, and more fit for purpose homes. But if the commercial sector is going to be doing this, they are going to be creating more expensive homes. If you were truly interested in looking after people, to get them into their first homes, then you would put something in this legislation to make sure that those homes stayed available and affordable for the people who need them the most. This is not going to be good for New Zealanders. We do not see the benefits at all. Part 1 is all about taking away those rights of New Zealanders to have a comfortable position in their local areas. We definitely do not support it. Thank you.

[Continuation line: TWYFORD]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - PHIL TWYFORD (Labour—Te Atatū)

PHIL TWYFORD (Labour—Te Atatū): If there was ever any doubt about the Hon Simon Bridges, the contribution he just made in the House puts to rest any doubt that he has well and truly drunk the Kool-Aid. He got up and made, actually, not a very good defence of the Government’s policy on social housing. He showed a lack of understanding of the detail, and really just kind of parroted the most superficial lines that he gets from Paula Bennett about what is really going on with this social housing policy. Here is the big lie. Here is the big lie about National’s social housing policy. National wants the country to believe that it is all about making homes warm and dry, that it is about innovation, and that it is about giving power to the community. We heard Simon Bridges say that local communities can always do it better than someone in Wellington making all the decisions. So it is dressed up in the language of empowerment of community and of modernising the housing stock. It is nothing about those things. Let us talk about what is really going on here. Bill English basically was caught candidly telling the truth to the New Zealand Herald back in November last year when he said: “The purpose of this policy is simply to get rid of State houses off the Government’s books.” He thinks it is a lazy use of capital for the Government to even own housing. He wants someone else to own the houses. He does not care who. He said that on the record. He said: “We can sell them to anyone. It could be the Salvation Army, it could be property developers.” He does not care who the Government sells them to. He simply wants to get the Government out of the business of owning houses. The model the National Party wants to move to is one where anybody can own the houses and the State will simply pay a direct subsidy into the pockets of landlords. It is the accommodation supplement on steroids. It is exactly what happened under Margaret Thatcher in Britain and in countless other countries around the Western World. Bill English likes to get up in this House and say: “We’re old-fashioned in New Zealand. It’s time we caught up with the rest of the world.” Well, I will tell you, Mr Chairman, what has happened in much of the Western World in the last 20 years. The State, under right-wing Governments, has retreated from the provision of social housing for the most vulnerable citizens in society and has handed that job over to the market. It is rolling back the lessons that were learnt all around the world in the 20th century, that the market alone will never deliver a sufficient quantity of decent housing for society’s most vulnerable citizens. But that is what this Government is doing, and it has said it. Nick Smith has said it and his officials have said it. The point of this ideological burp, as Annette King has described this policy, is to try to create an artificial market in social housing. As Grant Robertson said, this is Bill English going back to the 1990s when National introduced market rents and flogged off 13,000 State houses, which ended up in the hands of property developers and private landlords. This is simply a continuation of that neo-liberal quest that Bill English has to get the Government out of the business of providing social housing.

[Continuation line: Rather than listening to the]

PHIL TWYFORD

Rather than listening to the mealy-mouthed platitudes of Paula Bennett, we can actually look at the National Government’s behaviour, to judge whether in fact it is seriously interested in providing more decent housing for New Zealand’s most vulnerable people. Let us look at what it has actually done rather than listening to its rhetoric. Since National has been in Government, it has stripped Housing New Zealand of its core functions. It is now, as we have been saying, simply a State-owned version of Barfoot and Thompson. It is no more than a letting agency, and this bill takes away one of the last vestigial functions of Housing New Zealand—that is, its ability to do research, to evaluate its programmes, and to advise the Government of the day on social housing. National has sold down housing, all over the country. In fact, mostly what it is doing is shifting State houses out of regional New Zealand and into the north. It is taking State houses away from Dunedin, away from Gisborne, and away from Palmerston North, and it is stripping out a valuable social and economic asset from regional New Zealand. It is not building any new State houses. More than anything, that gives the lie to the rhetoric of Paula Bennett and Bill English. In the middle of a housing crisis, in the middle of a housing shortage when people are living in cars and garages, it is not doing the obvious thing—that is, increasing the supply of housing and building more houses. The National Government is using Housing New Zealand as a cash cow in the middle of housing crisis. It has taken half a billion dollars in dividends out of our country’s main social housing agency, and that money has gone straight back into the consolidated account. When Bill English was asked: “What are you going to do with the proceeds from the sale of State houses? Are you going to build more houses with them?”, he said: “No, why would we do that? We don’t want more State houses. What’s the point?”.

Hon David Parker: He used to say that. He said that until 2008.

PHIL TWYFORD: Yes. Yes, he did, and he has changed his tune. The Government has also tightened the eligibility criteria. It is so tight that even the poorest people in this country cannot even get on the priority waiting list for Housing New Zealand. Every MP on this side of the House, who represents their community, knows that there is massive unmet social need, there is hardship, and there is poverty in our communities. People cannot even get in the door because they have to ring up an 0800 number. But, worse than that, they have no prospect of getting on the Housing New Zealand waiting list because this Government has tightened the eligibility criteria in a cynical, cynical move, simply to cut the waiting lists. The effect of that policy has been that there are 3,000 vacant State houses sitting around this country while people languish in expensive, cold, damp, substandard rentals.

[Continuation line: There are thousands of vacant State houses]

PHIL TWYFORD

There are thousands of vacant State houses, and that completely gives the lie to Paula Bennett’s claim that this Government is about housing more people and looking after the tenants. It is a manufactured crisis, where the Government is leaving dozens and dozens of empty State houses sitting boarded up and attracting graffiti in regional centres all around New Zealand, and that is the excuse that it uses for then selling off those houses. We know that Housing New Zealand has been offloading these State houses all around New Zealand, in every regional centre, town, and city around this country, at significantly below their Government value—flicking them off with no regard for the taxpayer’s value and selling them straight into the hands of property developers and private landlords. That is what this Government is all about. It has subjected hundreds of tenants, including families with young children, the elderly, and the disabled, to needless anxiety and stress, notwithstanding the fact that Nick Smith stood in this Chamber 4 years ago and promised that he would not do that. The Government broke that promise. It is throwing people out on the street because they have committed the crime of earning enough to pay a market rent while living in State housing. These are the policies that the National Government is implementing in social housing. They are destroying the dream in this country that people should be able to have a decent roof over their heads, no matter how much they earn. Paula Bennett and John Key stand in this Chamber, and I do not know how they can do it—how they can stand up with a straight face to dismantle and dismember the very system of social support that gave them a decent start in their lives.

[Continuation line: It was OK for the taxpayer]

PHIL TWYFORD

It was OK for the taxpayer to give John Key and his mother a decent house in Christchurch in the 1960s, which gave him a start in life, but now, apparently, according to the National Party State house tenants are the undeserving poor. Government members demonise them, they parody State house tenants. Nick Smith gets up and says that there are Mercedes Benzes parked out in front of State houses, and that is the political cover that the National Party uses to destroy the system of State housing in this country. This bill gives flexible purchasing arrangements. What a euphemism. It gives the Minister wide discretionary powers to do sweetheart deals with property developers, so that the Government can flick off billions of dollars of State houses. It does not care whom it sells them to; it wants to get rid of them by hook or by crook. The current arrangements that the Government has, where it can pay an income-related rent subsidy—the difference between a market rent and a social rent—that is what gets paid to Housing New Zealand. The Government has not been able to sell off these houses to the Methodist Mission, the Salvation Army, or anybody else. This bill is its “get out of jail free” card. It enables the Government to flick off those houses and do sweetheart deals with property developers.

[Continuation line: Tracey Martin]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader—NZ First): I take a short call on behalf of New Zealand First, strongly opposing the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I have to congratulate Bill English. It has taken him 20 years to get to a place through incremental changes, with dots on a page, that the National Party has been trying to get to since the 1990s, and that is to completely dismantle the Housing New Zealand Corporation. What will be left once the advice issues get handed over to the Ministry of Business, Innovation and Employment? And what does the ministry know about actual social housing? Is this another situation where “Mr Fix-it” is going to take over and stuff it up? Is that what this is about? Is this really a partnership between Paula Bennett and Stephen Joyce that the country should be worried about, going on into the future through the next election, perhaps? What are we doing through this bill, in taking away the advice capacity from Housing New Zealand Corporation and placing it with the Ministry of Business, Innovation and Employment—business, innovation, and employment? How interesting, because suddenly the rhetoric is again around human beings being productive units. In this one, with the housing of those human beings, that is now all about being a business. This is a continuation, to give National its credit, of the spin about “New Zealand Inc.”, as opposed to thinking about it as “Family New Zealand”. That is where New Zealand First is coming from. This is about “Family New Zealand”. We find it interesting because whenever New Zealand First says that with immigration we should possibly be encouraging people to spread out throughout the country and the answer from the Government benches is “You can’t tell people where to live.”, that is exactly what the Government intends to do with regard to social housing. That is exactly what it intends to do. So apparently you cannot ask a new settler to spread out around the country and enjoy some of the benefits of regional New Zealand, but if you are a poor New Zealander you can. If you are a poor New Zealander, the Government can actually decide where you will live because it is not going to provide you with any housing in an area where it has decided it is not going to do any regeneration around employment. The Government has decided that it is going to suck everybody into the main centres because—business as usual—it is “New Zealand Inc.” as opposed to “Family New Zealand”. So that is one reason why New Zealand First will strongly oppose this bill. The other reason is that it is just a straight-out and out sell-off. You have got to hand it to the people whom that Government pays to market the words inside their press releases—I hope that the taxpayers are not paying all the media bill for the National Party over there, but you have got to hand it to whomever it is paying. They know how to spin the English language—that is for sure. They know how to take what is a bitter pill and gloss it up in some sugar coating and then feed it to the New Zealand public with words like “flexible”, with other words like “choice”, for example. Apparently, if you are rich in New Zealand, you can have choice in New Zealand, but if you are poor in New Zealand, the Government will use that word to beat you up with. That is the reality of what is happening here today, and it is happening in every single piece of legislation that this Government is forcing through at this time under urgency.

[Continuation line: The other thing that we find very interesting]

TRACEY MARTIN

The other thing that we find very interesting is the situation where what we are really talking about is that social contract that New Zealanders believed in—or the majority of New Zealanders believed in—from the 1960s. Instead of actually saying that we are going to send this off to private business now—and it will be private business; the NGOs do not have the capacity. They will create what will appear to look like an NGO, but at the end of the day it will be private business that will buy these houses. It will be private business that will on-sell these houses. It is interesting that this is being pushed through under urgency. I wonder whether it will be pushed through this quickly prior to 2017 because there just might be the off chance of a change of Government in 2017 and there just might be the off chance that there will be new legislation not allowing non-resident or non – New Zealand citizens to buy housing properties. But that legislation, under current free-trade agreements, cannot be put through retrospectively, so it cannot affect anybody who has already bought huge amounts of rental properties in New Zealand. So this piece of legislation, moving very quickly, creates another organisation into which these houses will all be placed, and then they can be on-sold to non – New Zealand residents. We find it highly suspicious. We will be opposing the bill.

[Continuation line: Chris Hipkins]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): I rise to take a call on this bill. I want to challenge members opposite who have read their economic textbooks—and I believe there are many. I can see faces across the Chamber that I have heard preaching on the benefits of sound economics. Indeed, particularly I guess I am talking to those—

Hon David Parker: Thatcherism 101.

Dr DAVID CLARK:—yes, interested in Thatcherism 101—who sleep with Hayek under their pillow; those who have to run a spray mister at night in their room lest they spontaneously combust—the really dry ones; the really, really dry ones. Even they will have heard of market failure. Market failure is something they might not want to acknowledge. They might not want to acknowledge it, but it is something they, in their heart of hearts, know exists. They know that we have State housing provided in this country so that even those who struggle every day have a backstop, have security, have a safe place to raise their children, for future generations and for the benefit of future generations beyond just today. It is provided so those who are walking the tightrope of poverty have a safety net underneath provided by a sound State housing system. As we have heard from many members contributing today, that safety net has been taken away by this Government. It is no longer interested in addressing that market failure. It wants to pretend that it does not exist. Well, in my experience it does still exist. I can think of very recent examples, a couple of which I would like to outline today. These examples are poignant to this bill because these are people who would like to ensure that they stay in State housing because of their experience of going into the private housing market. The first story I want to tell is of a family that I visited during my home visits. They live in a house that meets their needs, roughly. It is a house with the right number of bedrooms. It is within a reasonable proximity of other family members and therefore they can share the care of children and grandchildren. But when I went to visit this family, the house was rundown. It was cold. It is a private rental. They want to be on the State housing list. They used to be on the State housing list, but they got bumped off. They got told they could have a private rental. I went into that house, and I was horrified. It is a house I had visited many times as a student. It was pretty rundown then, but now it has holes in the wall, it has no insulation, and it has young children living in it. They have runny noses. They have tears in their eyes. I do not want to be too emotive about this, but these are children who are going to develop preventable healthcare diseases through their childhoods that we as taxpayers will end up bearing the cost of for their whole lives—that they will end up bearing the cost of their whole lives, and their wider family. I sought to intervene on behalf of this family—in fact, they asked me to intervene. They asked me to represent their cause because their landlord would not listen. They want, simply, some insulation, for which there are subsidy schemes. They want the holes in the wall repaired. But what happened when I did seek to intervene, when my office sought to go alongside them to meet their landlord, was that their landlord said no. He said they may not bring a representative with them to that discussion; if they did, they risked being turfed out.

[Continuation line: That is the kind of bullying]

Dr DAVID CLARK

That is the kind of bullying that can exist in the private market, where the need is so great—is so great—where there is so much unmet need for social housing that private landlords can exploit the system. A good State housing, social housing, provider ensures that those private landlords are kept honest, that they do have to meet basic needs, because they otherwise cannot compete in the market. But that situation currently does not exist, at least not in Dunedin , where I live. I have heard, just yesterday, of another case where there is a Dunedin family living in a State house that has just had its fire escape removed. And they have been told it is not coming back. It is the second case I have heard of in the last fortnight, where a fire escape has been removed from the second story of a building that children sleep in and is not coming back. That is emblematic, to me, of what is going on in the social housing sector. The Government is physically—actually physically—dismantling the State houses that provide care and security for the most vulnerable citizens in our society. And here we have, in this bill, an attempt to flog these State houses off. These examples point in that direction, and, of course, the State housing sales in Dunedin will continue. We have seen many come on to the market. Many are currently vacant in Dunedin, despite the need, despite the families who come through my door every week, despite the families who come through my colleague Clare Curran’s door every week in Dunedin. Those houses are kept vacant because of the criteria the Government applies. It says the need is not great enough. How great does the need have to be? How great does the need have to be? Surely, when there are children in private rental accommodations getting preventable disease, the need is great enough to want to provide State housing. And yet, in Dunedin, they say the projections—Minister Smith has previously released papers saying that they expect there to no longer be need for the 1,500 State houses in Dunedin. They are expecting the need to go down to 1,000 State houses, and they are selling them off now. This is a Government determined to get out of the social housing sector, determined to wash its hands of the social problems it is creating by not meeting that market failure. This will have very long-term consequences for New Zealand. That is why we on this side of the House will continue to vigorously oppose this bill at every stage. We note that the public have not been invited to make submissions on this bill, and I think that that is shameful and very telling of the Government’s agenda here. I doubt we will hear much from the other side during the debate. I would like to be proven wrong. I would like them to stand up and tell me how, in their heart of hearts, they do not think this market failure is going to hurt future families. I would love for them to get up and speak to it, but actually I suspect they want to see this bill through the House as fast as it will go, because they do not care about these people. This is a Government that does not care about these people. It is shameful. They may go to sleep with spray-misters in their rooms—they are expensive spray-misters that not everyone can afford, I am sure. They may go to sleep with Hayek under their pillows, but they should not sleep easily at night, knowing that they are doing away with these protections for our most vulnerable. The place in the market that ensures that private providers are kept honest, that they must meet a certain minimum standard in order to be providing social housing—this dismantling of our State housing sector cannot be allowed to continue. We will vigorously oppose this bill at every stage of its reading through this House.

[Continuation line: Phil Goff]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Hon PHIL GOFF (Labour—Mt Roskill)

Hon PHIL GOFF (Labour—Mt Roskill): Perhaps I should not be naive after the length of time I have had in this House , but I really hoped, on behalf of my constituents and the people in my city, that we would have seen a Budget that confronted some of the pressing social problems that we are dealing with at the moment. I really hoped that today, under urgency, we would be working across the House together on legislation that would make a difference. Well, that was naive, was it not? It was naive, because what we have seen in this debate and from this Minister in his contribution today, is nothing more than double-speak and spin. Talk about more flexible and innovative social housing—how does this bill create that, Minister? This is not about more innovative approaches. This is code for privatisation and opting out of the social responsibility that any Government has to make sure that people have stable, decent homes where they can raise their kids in security and warm, healthy housing.

[Continuation line: Eighty years ago this year]

Hon PHIL GOFF

Eighty years ago this year, men and women sat in this Chamber and debated legislation that did just that. We set up State housing because that was the guarantee that the lowest-income people in the country, the most vulnerable people in the country, could still aspire to provide their kids with a decent home and a decent start in life. The Prime Minister should know that. That is how he got his start. I am proud that it was a Labour Government that gave his family help when they needed it. But what have we got now? We have a Government that is ideologically driven, which now just wants to privatise State housing and opt out. I talked about double-speak and Orwellian language. I take this from a statement that the Minister put out in relation to this legislation, that this package was about supporting moves to housing independence. Independence is a wonderful thing, is it not? What was she really saying? She was talking about 3,000 eviction notices that will be given this year to those who might have just got their chin above the rising level of the cost of living in housing, and now they are out on the street and they are trying to find alternatives for their family. Talking about, as the Minister did, more flexible and innovative social housing is simply to disguise a Government that is giving up, that is opting out of its social responsibility, and that now wants to give these houses not to an organisation like the Salvation Army, as it had promised before, but to property investors and developers that do not have the well-being of the poor, the vulnerable, and the low-income people of this country at heart. I want to ask the Minister this question: what is there in this legislation that requires urgency today? What is it? What aspect requires us to rush through this Committee today, without the scrutiny of a select committee, the provisions in this bill? I have read it backwards and forwards and there is nothing there that requires urgency. Do you know why we are doing this under urgency? Because this Government does not want to subject its superficial legislation to the scrutiny of the public through a select committee. That is why we have got it here today. What evaluation has been done? The Government is about to pass over the fundamental responsibility of providing social housing from an organisation that has had decades of experience and the flexibility of providing housing where and when it is needed. It is going to pass it over to the private sector. So I asked the Minister for Social Housing , the Hon Paula Bennett , this question under an Official Information Act request: what analysis has been done of the benefits or disadvantages of social housing being provided by NGOs —because I thought it was NGOs not the private sector, when I wrote the request—rather than through Housing New Zealand ? Listen to this reply: “Your request for analysis on the benefits or disadvantages of social housing being provided by NGOs rather than through Housing New Zealand is refused under section 18(e) of the Official Information Act as this information does not exist.” Do you know what this answer says? It says that we have got a bill before the Committee that will privatise State housing and no analysis has been done by the Government of the implications and the consequences of what it is rushing through this Committee without the benefit of scrutiny by a select committee. If you have any doubts about that, just have a look at the departmental statement that accompanies this legislation because it confirms that there is no evaluation and that not even Treasury has commented on this proposal. This proposal is not a serious governmental proposal; it is an ideological proposal by a Government that pretends it is at the centre and throws a few coins to the poor when it suits it politically, but at the same time is undermining the ability of our community and our Government to provide people with a fundamental housing need. I want to know from the Minister what this will do to increase the supply of social housing.

[Continuation line: When I looked at the figures]

Hon PHIL GOFF

When I looked at the figures, Minister, I saw that this Government has not increased Housing New Zealand homes; it has cut them by 1,600—one thousand, six hundred—in the last 3 years. It slashed it. Now it wants to give away another couple of thousand houses to the private sector without knowing what is going to happen. And what is happening to our people on the ground who could be helped by this legislation? Our people on the ground are paying rents that have risen by $1,300 on average in the last year—$25 a week. It is an interesting figure, that $25 a week, is it not? If you are a beneficiary it is gone already. It is gone in rent increases. But, actually, it is not $25 a week. Read the fine print—if you are in State house, a quarter of that goes anyway. So $6.25 goes on increased rent for your State house. It is not $25 a week for them; it is about $18 or $19. If you are in the private sector your accommodation supplement is cut. So it is a case of giving on the one hand and taking on the other. But going back to this legislation, nothing in this bill helps those people whose rents are going up at six times the rate of overall inflation each year. There is a crisis of affordability for people to be able to get into homes, and this bill does nothing at all about that. Actually, think about the people at the bottom of the heap. Who are they competing with now? They are competing with 40 percent of the population who today have no chance of homeownership. Do you know what has happened to house prices in Auckland? They have gone up by 15 percent, $100,000, in the last year alone—$100,000. What pressure does that put on rent? What pressure does that put on ordinary hard-working New Zealanders who actually want to buy their own home but cannot and are now forced into the rental market and can out-compete the people at the bottom, who previously at least could have looked to Housing New Zealand to provide them with housing security? There is a crisis in housing affordability in this country. Once upon a time we could guarantee that an active estate would do something about that. Is this bill going to increase social housing by one house? The answer is no. The answer is no; it is likely to further reduce it. The Government is opting out of its responsibility at the very time it should be stepping up to its responsibility. If we want kids to get a good education, if we want healthy kids, that starts in the home and it starts with having a secure, stable home and a warm and healthy home. Traditionally a Government would say that Housing New Zealand had that responsibility. Housing New Zealand, in one piece of legislation after the other, has had its role and its responsibility cut back. In this bill it is not even going to be able to provide housing advice. Why would it waste its time for a Government that has listened to the advice? I know the Housing New Zealand people who provide the homes. I know the people in Work and Income who now allocate them. If the Minister went out from his ivory tower and listened to those people, he would understand that there is a crisis and he would equally understand that there is nothing in this legislation that will go one iota towards resolving that crisis. This Budget was a failure, and this bill is a failure in terms of actually making a difference for a better New Zealand.

[continuation line Dr Megan Woods]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - Dr MEGAN WOODS (Labour—Wigram)

Dr MEGAN WOODS (Labour—Wigram): I am very happy to take a call in the Committee stage, as we talk about Part 1 of the legislation, which, of course, is the enabling legislation for the great State house sell-off that we are seeing here today. It is wrapped up in the ideological rhetoric of “flexibility”. We have heard the Minister—because none of the members opposite are willing to stand up and defend what is a terrible policy and a terrible piece of legislation—try to justify how this really is doing right by the tenants. Let us look at what Part 1 actually does. We heard the Minister wax lyrical, but I would ask the Minister to take another call and point us to the provisions in the legislation we are here in this House debating that do what the Minister claims. Point me to the clause that does what the Minister claims this legislation is going to do. He cannot, because this legislation does none of that. The Government can purport that this bill is all about flexibility, but this is about selling off State houses. We have not heard about how one more piece of social housing is going to be provided. Mr Goff just finished off his speech by asking a question. I too would like to put that question to members opposite. Tell me how this bill provides for more social housing in New Zealand. Tell me how more houses are going to be provided for the people who are currently struggling to find accommodation in this country. Tell me how one more person is going to get off the Housing New Zealand waiting list, but, more important, tell me how one more person is going to get on to the Housing New Zealand waiting list. In the last quarter 4,000 of the 6,000 people who applied to go on the waiting list—not to get a house, but to go on the waiting list—for a Housing New Zealand house did not make it, and this legislation will do nothing to help those people. My colleague said that he imagined that members opposite were having to sleep with their spray-misters and their copy of Hayek. Well, they are also cuddling up to their fluffy toy version of the Big Society. This is what they are trying to do in this legislation. But like experiments in other places in the world, it is not working. We had the social service agencies lining up and saying that this is not going to work. They said they cannot see how the Government’s plan to sell off State houses will in any way benefit tenants. They are saying that they do not have the capacity and they do not have the infrastructure to manage a sizable housing stock, such as the Government is imagining. So what are we left with? Who is the Government going to sell to? Surprise, surprise, it is going to be developers. It is what it always intended anyway, wrapped up in the guise of non-governmental organisations, who have told the Government they do not want a bar of it. That is why we are debating this legislation under urgency—so those non-governmental organisations do not get a chance to come to the select committee and tell the Government they do not want its offer.

[continuation line. What they do not want is their private property developer mates]

Dr MEGAN WOODS

What they do not want is their private property developer mates coming to the select committee and saying that they are lining up to buy these houses. Are they lining up to buy these houses because they want to provide wraparound services that provide well for some of the most vulnerable in our country? No, they are they are lining up to buy these houses because they see a chance to make a profit, because that is what the private sector does. The reason why these houses need to stay in public ownership is that we have decided in this country that the Government should intervene and that the Government has a responsibility to ensure that we do have housing as a crucial and critical part of our welfare safety net, and that when people need it is there, and we do not have families who simply cannot find a place to live. Many of us have spoken about the challenges that people in our electorates are facing and what we are seeing on the ground, at the coalface, every day, and every week. I can only guess that members opposite do this as well. The job of a constituency MP is increasingly being taken up with housing issues. Increasingly, housing is forming a major part of our workload. It is people who simply cannot find somewhere to live, who cannot get on to the waiting list, who cannot deal with Housing New Zealand when they are there. I would like to use a couple of examples from my electorate. One is a woman in her 60s who cannot afford to be in the private rental market in Christchurch—

[Continuation line: Clayton Mitchell]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - CLAYTON MITCHELL (NZ First)

CLAYTON MITCHELL (NZ First): I rise to take a second call on this terrible piece of legislation. The more I read it—and let us be honest; there is not a lot to read, to be fair—it makes me feel a little bit sick. I look across the Chamber and I see every single backbencher in the National Party with their head down listening to their iPod, not looking like they are interested. This piece of legislation is, seriously, going to affect New Zealand for a very, very long time. I have to say that we have got a proud history of looking after those people who need the support the most. What is going on here is shameful and it is going to bite us. Dare I say, there is an old saying—actually, it is not that old—“We have changed.” The old New Zealand would not do what we have done, and what we are going to do right now. To let democracy be pulled out from underneath us to get this piece of legislation rammed through under urgency does not make any sense to me whatsoever. There are few bills coming up over the next couple of days, and this is one of the bills that we need to be standing up about, proud to fight against—absolutely. In 1969 my parents bought their first home, when the interest rates were 22 percent. How could you imagine that you could actually pay for a house at 22 percent? Now, interest rates are only 5 percent, and we cannot get there. The difference is that back in 1969 the house that they bought was only $14,000, and their annual income, with my father working, was only $12,000. I have to say that this has changed in every way. Back then it was affordable for people to be able to get into a home. If you did not have a job that was paying well enough you could actually get State assistance and actually have a home where you could be brought up, work, and have a lifestyle. This privatisation—the corporatisation of the State housing industry is a fugazi. It does not even exist. What we are trying to do is give wealth and control to corporations. We are not actually looking after our people in this country, which this country has an obligation to do. This is a sell-off. It is going, going, gone. We are getting rid of our State-owned assets, we getting rid of our State-owned housing. Goodness me, we are probably going to privatise our army—that is the next thing. I am sure we have got some insight into some of the fictional stories that are coming out that say that one day this is going to be the direction of the world. It is going to be globalised and corporatised. This is a step in the wrong direction. This is knee-jerk legislation, which we are very, very concerned about. One of those concerns is that when you are getting advice as a Minister, you want to take good advice from people who know the situation at the grassroots. The people who know what is going in this country with regard to State housing are the people who are organising that State housing—the corporations that are there to look after people the most. Now, all of sudden, this legislation says that the Minister no longer has to listen to what they have got to say. In this legislation, the Minister can now take advice from the Ministry of Business, Innovation and Employment. That ministry does not look after State housing. We are concerned that the second dot point in the explanatory note in this piece of legislation, the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, is going to undermine the information that is required to make sound decisions for this Government. We oppose this bill strongly. Thank you.

[Continuation line: Carmel Sepuloni]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - CARMEL SEPULONI (Labour—Kelston)

CARMEL SEPULONI (Labour—Kelston): This bill gives the Minister the flexibility to flog off billions of dollars’ worth of State housing to the National Party’s friends and developers, but what this bill does not do is to take seriously the housing issues that we are faced with in this country. This bill completely ignores and sweeps under the carpet the fact that as a country we are facing a housing crisis. The Government is underplaying the housing crisis and acting like the flogging off of State houses is somehow going to address the issues that we have with housing in this country. It has stated recently that it is managing the Housing New Zealand waiting lists, but when I put through an Official Information Act request on the numbers of people who actually applied for Housing New Zealand houses—not the ones who actually got on the waiting list—we saw that of the 1,853 applicants who were placed on the social housing list, there were 4,000 other people who did not even make it on to that waiting list. The Government is ignoring the fact that there is a demand for affordable housing and that there is a need for increased social housing, not the flogging off of Housing New Zealand houses to the private sector. There is a need for increased housing. When the Government is asked time and time again whether it is going to expand the amount of social housing that we have, it goes silent because it is doing nothing to respond to the issue. What we see from members on that side of the House is that they will privatise, any way they can. Any way they can, they will find a way to flog off State housing. I want to talk about one example, actually, in my own electorate. The project that I am going to talk about is the Waterview Connection project where houses were purchased for the purpose of that project. Housing New Zealand houses were purchased for the purpose of that project, but when that project was undertaken it was found that a number of the houses were no longer required. You would think that if the Government took seriously the demand for housing that we are facing in New Zealand—in Auckland—it would think: “OK, New Zealand Transport Agency—let’s put those houses back to Housing New Zealand so we can somehow try and meet the demand for social housing that is out there in Auckland.

[Continuation line: But what did they do?

CARMEL SEPULONI

But what did they do? No, they did not divest it back to the State. Instead, they took that opportunity—any way they can they will take the opportunity—to sell those houses that were purchased for the Waterview Connection project to private developers, to private owners. They could have gone back to the State. They could have met the need that is there for social housing but instead they sold them off privately and they sold them off, of course, for a profit—a profit, a monetary profit. But who is not profiting here? The people who are not profiting here are the 4,000 people who cannot even get on to the waiting list for social housing. The people who are not profiting here are the people who are on the waiting list but will be on the waiting list for a long time because of the fact that demand is increasing, but the stock of social housing is not increasing. I think that members on that side of the Chamber should be ashamed of themselves—ashamed of themselves because they think that if they pretend we do not have a housing crisis, if they pretend that people are not in need of housing, then the problem no longer exists. But the fact is that New Zealanders know there is a problem. New Zealanders know that housing is unaffordable. New Zealanders know that they cannot access warm, healthy homes. The Government is trying to say it is going to do something about it, but it has done nothing about it. We are facing the biggest housing crisis as a country that we have ever faced and here we have a Government that ignores it and thinks that the answer, the panacea, is selling off our Housing New Zealand houses and State houses to their private developer mates. If New Zealanders are not already aware of the fact that that is this Government’s agenda, I have no doubt that within the next few weeks or the next few months that agenda will become very, very aware to all New Zealanders out there who are looking at this problem. I just want to say that what we have here is a number of New Zealanders out there looking for houses and that Government is doing nothing to respond to the need that is there. We have the National Government determined to sell off billions of dollars of State houses by hook or by crook. Bill English says he does not care who they get sold to; he just wants them off the Government’s books. The Government initially said they would go to NGOs. NGOs do not even want a bar of this initiative because of the fact—

[Continuation line: Lees-Galloway]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - IAIN LEES-GALLOWAY (Labour—Palmerston North)

IAIN LEES-GALLOWAY (Labour—Palmerston North): I have a couple of questions for the Minister in the chair, Simon Bridges, if he could lift his head out of his magazine for just a second and listen to the debate that is going on in the Chamber that he is supposed to be responsible for. I have a couple of questions for him. My first question is this: how is the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill going to make one iota of difference to the housing crisis that we face in my electorate in Palmerston North? And if the Minister does not think there is a housing crisis in Palmerston North, then he should get there and come and talk to the people and talk to some of the agencies that deal with people who are in need of social and emergency accommodation in Palmerston North. If you drive around my city right now—and this has been the case for quite some time, and it is getting worse—there are huge tracts of empty land where there used to be State houses. On Botanical Road that land has been empty for 7 years with absolutely no plan for what to do with it. On Rugby Street that land has been empty for 3 years. In Selby Crescent that land has just been emptied now. And finally we hear there is a plan. Can anybody guess what the plan is for that land—sell it off, flog it off. And this land is not even going to the NGOs or the private developers or the foreign banks that the National Party wants to bring in to social housing. Oh no, this is not for social housing; this is just outright privatisation—selling it off, less social housing for the people who live in my community. How do National members justify that? Well, I will tell you how they justify that. They say there are only 20 people on the housing waiting list. Well, we have just heard from Megan Woods and Carmel Sepuloni how they do that: 6,000 people apply for a State house in New Zealand and 4,000 of them are denied even the opportunity to get on the waiting list. And where do those people go when they are denied access to the waiting list? Well, they end up at the doorstep of the Salvation Army, which has had its funding cut and has had to reduce the amount of emergency accommodation that it can provide. They end up at the doorstep of Women’s Refuge, which is now having to screen women with families who come and ask for its assistance because women regardless of whether they have suffered abuse are being told by the Ministry of Social Development to go to Women’s Refuge to seek housing with it, because Work and Income cannot satisfy their urgent and desperate need for emergency accommodation. So Women’s Refuge, already cash-strapped, already having had to close down one facility in Palmerston North, and having more of its funding cut in this very Budget, is having to waste time determining whether or not women with families who come to it actually fit the criteria for its service because this Government is abrogating its responsibility to provide emergency accommodation to people who desperately need it. That is what is happening in my electorate and if any National MP honestly believes that the situation is rosy, then get yourself down to your local Salvation Army, get yourself down to your local Women’s Refuge, go and talk to any of the other agencies like, in my electorate, it would be Methodist Social Services or Shepherd’s Rest, which have also had their funding cut. Go and ask them what the real story is. Your numbers do not tell the truth. Your numbers have been deliberately constructed by you to try to fool the people into thinking there is no housing crisis. The people are not fooled. The people are not fooled. We know full well there is a massive shortage of emergency accommodation. People are living in their cars, people are sleeping under bridges, people are having to couch surf from one friend to another just to try to find a place to put a roof over their head. Families are accommodating other families, with massive overcrowding in those houses, because this Government does not want to participate in a fundamental role of the State, and that is to make sure that every citizen that it represents actually has somewhere to call home and a roof to put over their head, and the safety and security that comes with it. I urge members on that side of the Chamber who cannot be bothered to get out of their seats and participate in this debate to go to the Salvation Army, to go to Women’s Refuge.

[Continuation line: Curran]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): To follow on from my colleague Iain Lees-Galloway’s speech to this House, earlier this year I had a woman in my office who was desperate. She had been living in women’s refuges for 4 months with her two grandchildren in one room—in one room. She could not get on the Housing New Zealand list. Both the Ministry of Social Development and Housing New Zealand did not want to know. It took the intervention of an MP to battle with them for weeks to get her on the list. Both of those children were living with her because they had severe behavioural issues. They should not have been in one room, and here we had two Government agencies that were impervious to their plight. Now, finally, she is in a State house, but it took the intervention of an MP. Does it take the intervention of a member of Parliament’s office for every single one of those people who cannot get on the list? I challenge those MPs on the National Party side of the House to say that they do not have those people coming into their electorate offices, that they do not see the plight of people who are at their wits’ end and who are desperate. I challenge those people, that Government, to take off the cloak of conservative compassion. Take off that cloak of conservation compassion, which is a sham, and show us your real faces, the real face of ideological privatisers who are dismantling our social safety net by privatising State housing and cementing an underclass in this country. Cementing an underclass—that is going to be the legacy of John Key. That is going to be the legacy of the National Government—an underclass, a true underclass, in this country. And why do we have this bill, the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, coming in under urgency? Because the Government knows that it will come under scrutiny. People will come out of the woodwork and say exactly what they think. The social service agencies that have operated in this country respectfully for over a century—the Methodist Mission, the Salvation Army, Presbyterian Support—what do those people have to say about what this Government is planning? They think it will not benefit those who are most vulnerable. Who will it benefit? It will benefit the privatisers. That is why the Government should take off the cloak of conservative compassion. Paula Bennett and Bill English came to Dunedin in January. They came to spruik their social housing rort. They told us all that it was going to be nirvana, that it was going to be innovative and flexible, as Simon Bridges has told us. They told us that there are going to be warm, dry homes. They told us that the trend was for one and two-bedroom homes, that nobody wanted the three or four-bedroom homes. Well, in Dunedin—in Dunedin—that is so not the case. Those people who cannot get on the list are the people who need the three or four-bedroom homes—the people who are desperate, who are living in terrible circumstances in the private sector, who are living under circumstances with slum landlords who are taking advantage of them. They are living in houses that are cold and damp and sending their children to hospital every year. This is the cementing of an underclass, it is the cementing of poverty, and it is the cementing of children who are living in circumstances they should not be living in. This is a great tragedy, and every MP on the other side of the House will have seen these people in their electorate offices and they should be ashamed. I would like to challenge the Minister sitting in the chair, Simon Bridges, to get up on his feet and tell us what regional New Zealand will get out of this bill. Get up on your feet and tell us what regional New Zealand will get out of this bill. Will there be a single new piece of social housing? How will those houses be made more warm and dry? What accommodation will those people be living in? What are their options? If they cannot get into social housing, what are their options? Get up on your feet and tell us.

[continuation line: Louisa Wall]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - LOUISA WALL (Labour—Manurewa)

LOUISA WALL (Labour—Manurewa): Thank you very much for the opportunity to contribute to this debate. I actually want to start by quoting from the Prime Minister’s press release titled “Supporting children in hardship focus of Budget”. What I want to highlight is that currently we have 4,808 families on a Housing New Zealand waiting list. These are families who have been through the Ministry of Social Development process. They have been identified as those most in need. In fact, priority A is defined as people who are at risk, and includes families with a severe and persistent housing need that must be addressed immediately. We are actually talking about 10,000 children who currently do not have a home. I think the question everybody should be asking is how this piece of legislation, the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, contributes to housing those children. The Minister for Social Housing is here. I would love to hear from her how this piece of legislation helps 10,000 New Zealand children who currently do not have a home, who have been through the Ministry of Social Development process and they have been deemed to be in severe and persistent need of housing. How does this piece of legislation, prioritised by this Government, meet the needs of those children? When I look at where this piece of legislation came from, it came from a Government-commissioned report called Home and Housed: A Vision for Social Housing in New Zealand. It was commissioned in 2010. The central proposition of this commissioned research was, No. 1, that private sector organisations could more creatively than the Government provide social housing to those most in need. The second proposition was that there needed to be a plan to move people from renting to owning their own home. Again, I ask the question how does this piece of legislation contribute to those, I guess, two crucial outcomes from that commissioned report?

[continuation line: What we know from the social housing provider sector]

LOUISA WALL

What we know from the social housing provider sector is that, actually, social housing providers do not want the transfer of houses, because for them the transfer of Housing New Zealand houses is a transfer of responsibility. I want to quote Major Campbell Roberts, who said he does not believe “the lives of tenants would be sufficiently improved by such a transfer.” And why is that? It is because to take responsibility for a home means to make sure that home is warm, is dry, and is going to contribute to the health and well-being of the family that is living in it. The reality of a lot of the houses is that they are not fit for purpose, and, actually, this Government, which is supposed to provide for those most in need, should ensure that the houses that are being provided for those most in need are fit for purpose. So the private sector organisations that this Government wanted to transfer that responsibility to, actually, at the end of the day, said: “No, thank you.” We think it is a core Government responsibility to provide housing for those most in need, and to ensure the 10,000 New Zealand children who are waiting with their families on priority A and B housing lists, which the Ministry of Social Development has determined for itself, get the home that they need. Why is it important for our children to have a home? Well, actually, it is relevant to their education. If children do not have a home, how are they supposed to have continuous education? How are they supposed to go to an early childhood education provider, which we all know is the basis for getting a good education in our country? How are they then supposed to go to a primary school and to reap the benefits of our public education system? How are they then supposed to belong to a family where mum and dad have security of tenure in the home that they want to build for their children so that they can go and get further education themselves, or possibly go to work? How is that supposed to happen when we have a Government at the moment that wants to abdicate responsibility for providing houses and homes for those most in need? I am an MP in South Auckland, and, actually, across the South Auckland area, of the 2,537 families waiting on the Housing New Zealand and Ministry of Social Development waiting list, we have 1,070 families and over 2,500 South Auckland children who do not have a home. Forty percent of the people on this waiting list are Māori. So how is this piece of legislation ensuring that our Māori children have a home and are able to get quality early childhood education and are able to go to school? Nineteen percent of the families and children on the Housing New Zealand and Ministry of Social Development waiting list are Pacific children and families. How is this bill going to contribute to meeting the Better Public Services target? We know we have got big issues with Māori and Pacific children. This Government wants to focus on participation.

[Continuation line: Julie Anne Genter]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JULIE ANNE GENTER (Green)

JULIE ANNE GENTER (Green): Thank you for the opportunity to contribute to this debate on behalf of the Green Party. I have to say that this legislation is quite indicative of the National Party and this Government’s approach to what it—I think we all want better outcomes for everyone in New Zealand, but the approach that is often adopted by this National Government is not supported by evidence, it is not going to solve the problem, and it is actually going to make it worse. Everyone in New Zealand needs a place to live and call home. It is a fundamental human right. The way we build a prosperous and happy society is not with the approach the Government tends to take, which is maximising profit for rentiers and vested interested groups and selling off the assets of this State; it is by looking after our people. Surely, having a place to live is one of the core components of looking after our people, and particularly our children. Social housing could be improved in New Zealand; there is no question about that. There are things we could do better. There may be houses in the wrong place and there may be opportunities for Housing New Zealand to deliver to more people, but this legislation is not going to do that. If Housing New Zealand is not able to manage our existing stock, well, why do we think that social housing providers would be able to do a better and job, and why do we think the market would be able to do a better job? Certainly, all the evidence from overseas shows that in the countries that do get the best outcomes in terms of education, childhood development, reducing inequality, and health outcomes, all of that flows through to a strong economy. Of course, the purpose of the economy is to look after people, not just to have a strong economy for the sake of it. In all of the countries that do that they have a strong role of social support. The State is in the best position to provide social support, particularly when it comes to houses for those who are the most vulnerable. The housing crisis in Auckland, in particular, is about both supply and demand. I just want to refer to the Productivity Commission’s paper on housing affordability from several years ago, because if you look at its analysis of the social housing situation, it suggests there are areas that need reform. Most importantly, it points out that starting reforms at State housing without addressing demand pressures and without building sufficient options for people to move on to is generating a major risk for those that are reviewed out of State housing. I would say that it is pretty clear that the Government has taken pretty much no action to address the demand problems, particularly in Auckland. It has not done anything to address the supply issues. It likes to characterise its Resource Management Act reform, or deform, as being all about achieving affordable housing, but there is no actual evidence that what it is proposing in the Resource Management Act reforms or the Special Housing Areas legislation is actually going to increase the supply where it needs to increase or reduce house prices. All the Green Party is really asking for is that we take an evidence-based approach and that we look after our people first. There are many steps that could be taken to improve housing affordability in New Zealand. On the demand side, obviously, a comprehensive capital gains tax excluding the family home and the tax treatment of investment properties could be improved. The Government made a tiny move in that direction. It is too little too late. Of course, the Green Party has been calling for the same tax treatment of income from capital from labour for quite a long time, and it is nice to see there has been a slight move in that direction. In addition to tax treatments, it only makes sense to have restrictions on foreign capital coming in, because we know that foreign capital coming in is having an impact on house prices and land values, as it is in many other jurisdictions. There are some pretty obvious ways that we can deal with that, like by limiting ownership of land to residents and citizens in New Zealand. On the supply side, the State is in the best position to address the supply issue of houses, and not just houses but of homes and neighbourhoods. The places in Auckland where land values are highest and the places where people want to be is where we need to be providing dwellings for people—where they are close to jobs, where they are close to education, and not out in the middle of nowhere where they are going to have an incredibly long commute and will have to own multiple cars. There is no point in increasing housing affordability—

[Continuation line: Joanne Hayes: closure motion]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

SUE MORONEY (Labour): I raise a point of order, Mr Chairperson. This is a substantial piece of legislation. There are several members on this side who have not been able to participate in this debate to date, and I request that you reconsider your ruling.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

RON MARK (NZ First): This debate is quite a serious one for New Zealand First. A number of our members have left their offices and come down here to take the opportunity to take a call on this and they have not been afforded that opportunity.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): Thank you. I am ready to rule on this matter. The question will be put. There have been 21 calls taken from the Opposition. This is the third closure motion, and I am going to put the motion.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

PITA PARAONE (NZ First): I raise a point of order, Mr Chairperson. I accept your ruling and the reference to the number of calls. I seek your reassessment of your decision with regard to the fact that this is an important piece of legislation and it has circumvented the normal select committee process. In view of that, I just wonder whether or not you may reconsider.

[Continuation line: Chairperson: I am aware of the process and I am prepared to put the motion]

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): I am aware of the process, and I am prepared to put the motion as it has been—

Ron Mark: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Hon Chester Borrows): No, I am not going to take a further point of order from the member. I have taken several points of order—sit down while I am on my feet, please. I have made my ruling, and my ruling is that the question will be put. The vote will be put.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

RON MARK (NZ First): I raise a point of order, Mr Chairperson. This is a new point of order.

The CHAIRPERSON (Hon Chester Borrows): I will hear the point of order. I suggest that the member be very careful about how he puts it.

RON MARK: Could you advise how many calls New Zealand First has had.

The CHAIRPERSON (Hon Chester Borrows): Sorry, I did not hear. Could you restate the point of order.

RON MARK: I know you stated that the Opposition has had 21 calls. Could you tell me please how many calls New Zealand First has had.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): Three.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): I raise a point of order, Mr Chairperson. Can I seek your guidance, please. I stood to take a call at every single opportunity. The main reason was that there is a mistake in this bill that I wanted to highlight. Thank you.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): The fact is that it is the Chair’s prerogative as to when he will put the motion. I have accepted a closure motion, and I am going to put that question. [Interruption] I wonder if—sit down, please. Continuous points of order around this particular position are becoming quite frustrating. Members will have to accept that there have been a large number of calls on this particular part, and we have only—[Interruption] Do not interrupt me while I am on my feet. I am the Chair of this session, and you are not. There is another part to be debated. There will be full calls given in those debates. I have outlined the number of calls that parties have had.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Chairperson. I will not make a long point of order, but I will make three brief points. The first is that this bill is going through all stages under urgency and it has not been to a select committee. The second point is that there are members who have been seeking the call since the beginning of the debate who have not been given a call, while other members have been given multiple calls. I think that that does create an unfairness in this process. The third point is that there has been a long tradition in the House that where the Government actively does not engage in a debate, that is not used as a reason for closing down the debate prematurely.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): In ruling on the point of order, I am going to continue to put the motion. The fact is that the Opposition and all parties have the ability to be able to marshal who is going to speak. They all have the ability to make calls. Not every member who seeks the call in every debate does get the call; that is the history of it. Some of us go back quite a long way and remember how these things work, and have worked in the past. The most frustrating thing, in being the Chair in a debate such as this, is that you think of your best lines while you are sitting here and you do not get the opportunity to use them. Having said that, I believe that on analysis people will find that there have been significant numbers of calls. There have been many members who have had the opportunity to make their points. The points being made are now becoming repetitive. So I am going to put the motion. [Interruption] I am not taking any more points of order. [Interruption] Please be seated. I am not taking any more points of order on this matter. The motion will be put. The motion is that the question be now put. All those in favour will say Aye, those against will say No. The Ayes have it? The Noes have it. A party vote is called for. The Clerk will conduct a party vote.

A party vote was called for on the question that the question be now put.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

RON MARK (NZ First): I raise a point of order, Mr Chairperson.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): We are taking a vote. Please be seated.

Ron Mark: I understand that, but it is about the vote.

The CHAIRPERSON (Hon Chester Borrows): I will accept your point of order.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

RON MARK (NZ First): Mr Chairperson, through you I would like to ask that someone please check that Māori Party vote. I cannot believe that that is the vote that they are taking on—

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): The vote is being cast. That is not a point of order. [Interruption]

[PV on question that question be now put—Ayes 63, Noes 58]

[PV on Part 1—Ayes 63, Noes 58]

Part 1 agreed to.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Chairperson. I understand the decision you have just made. I waited until the vote was completed before intervening. I do understand the point you have made, and it is out of order for a member to interject when a vote is being taken. That is absolutely correct. I do ask that you consider, when determining how long the member will be out of the Chamber, the fact that this is a bill going through all stages under urgency and this is in fact the only opportunity to participate in the debate.

Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill

Speech - JOANNE HAYES (Third Whip—National)

The CHAIRPERSON (Hon Chester Borrows): I will put my mind to that. The member is still within the Chamber. I must admit I was tempted to quote him from 2 days ago.

Ron Mark withdrew from the Chamber.MARK, RON

[Continuation line: Part 2 – MORONEY: I raise a point of order, Mr Chairperson]

Part 2 Remedial and other matters

Speech - SUE MORONEY (Labour)

SUE MORONEY (Labour): I raise a point of order, Mr Chairperson. I am seeking your guidance on an issue that I think we will come up against again during the course of this debate. The point of order is this. I understood that during your decision on the last part you said that the Opposition parties had had 21 calls on that part. That differs from the record that we have taken of the calls. I wonder what the process is for addressing discrepancies in the record-taking.

Part 2 Remedial and other matters

Speech - SUE MORONEY (Labour)

The CHAIRPERSON (Hon Chester Borrows): The process is outlined in Speakers’ rulings 64/4-6. Speakers’ ruling 64/4 states: “The chairperson is the sole judge as to whether or not he ought to sanction the putting of the closure motion, ...”. In respect of the official record of who has spoken when and how many calls have been taken, it is retained by the Clerk and is available for inspection. If the member wishes to, she can align them with her own records.

[Continuation line: PARKER]

Part 2 Remedial and other matters

Speech - Hon DAVID PARKER (Labour)

Hon DAVID PARKER (Labour): Part 2 of this bill, at clause 21, continues with this ridiculous notion that Housing New Zealand should not proffer advice to the Government. Clause 21 continues that. We live in a country that is wealthy. We are told every day by the National Party that we are living in a wealthy country, and yet increasingly people cannot get houses to live in. We have got more people living in parks. The number of homeless is increasing. We are seeing that in the newspapers, and in magazines like North and South. We have got people living in cars. We have got people living in garages. And we have got members of Parliament, like Paula Bennett, referring people in housing need to the camping ground, to live in caravans and huts. We have got house prices that are the highest they have been for ever in New Zealand, and some of the least-affordable housing in the world. We have the lowest rate of homeownership in New Zealand since the 1950s, and yet the Government says it does not want decent advice about housing. In the social housing sector it has got so bad, from the ridiculous mismanagement by this Government. It does not let Housing New Zealand answer questions about need. It has stopped that already. It has got so bad in Labour Party constituency offices, in part because National Party members sometimes quite frequently will not even address the causes of concern of their constituents, which means that those people are coming to Labour Party offices, in addition to our own constituency voters.

[Continuation line: It has got so bad that our staff are pulling their hair out.

Hon DAVID PARKER

It has got so bad that our staff are pulling their hair out. Not only that, people are so frustrated out there because they cannot get a roof over their heads for themselves and their people that they are abusing our staff and threatening them. That is never excusable, but the level of frustration in society has become so high that we have had cases in South Auckland where people are pulling knives on our staff. They are so frustrated that they cannot get an answer as to where they can get emergency housing, and yet, we have got less advice coming from the ministries because they do not want to know. I drove to Invercargill a couple of weeks ago. I went down through Ōwaka, and came through the southern parts of Invercargill as I came in. The private rental stock, the basic level of which will always be held up by the Government rental stock, is in an abysmal state. These are cold parts of New Zealand. There are rotten houses with holes in the walls. I was shocked at the number of houses that I went past in these cold areas that just had a sheet draped over the window of a single-glazed house, with rotten frames where the glass drops in the frame, and where there are holes in the sides of the walls. People have got no alternative, and the Government has not got any minimum standard for housing. All of those houses are legally let in this wealthy country, where poor people suffer because of the inadequacy of the Government’s housing policy. Paula Bennett rates herself as the next leader of the National Party. This—

Hon Paula Bennett: Rubbish!

Hon DAVID PARKER: Look—it is promoted on the websites of the National Party. Judith Collins has already thrown herself under a bus, and it is a competition between Steven Joyce and Paula Bennett. New Zealanders, Ms Bennett, hate hypocrisy. They hate hypocrisy, and they do not like to see people who get ahead in New Zealand, having had access to a State house, now ditching the system. This will be the Minister’s bête noire. This will be carried with her until the end of her political career. When last in Government, Bill English tried to get rid of income-related rents. He could not. That National Government sold 13,000 houses, but it lost the income-related rates, and this Government has not even been brave enough to go directly after that this time because it knows that people think that poor people should not have to pay more than they can afford, particularly people with mental illness or disability.

[Continuation line: Sue Moroney]

Part 2 Remedial and other matters

Speech - SUE MORONEY (Labour)

SUE MORONEY (Labour): I am shocked in speaking to Part 2 of this bill because what happens in Part 2 is that it actually guts the Housing New Zealand Corporation, and it washes the Government’s hands of any responsibility for providing decent housing for New Zealanders. It is absolute disgrace because in subpart 2 of Part 2 of this bill, the Housing Corporation Act changes so that the Housing Corporation is not even responsible for giving policy advice to the Minister any longer. How disgraceful is that? The Minister does not want to hear the policy advice from the Housing Corporation because if the Minister did hear what was actually going on out there, the Government would know that it is going to have blood on its hands. It is going to have blood on its hands from this disgraceful—it is trying to absolve itself from any responsibility for decent housing for New Zealanders. I come from the Waikato, and in the Waikato region, here is what is happening in housing. The Housing Corporation is not going to give advice to the Minister to tell her this any longer, so listen up Minister, because this is what is happening: Aucklanders are marching down over the Bombay Hills in their droves to buy affordable housing in Hamilton because they cannot do that in their own city where they live and work, in Auckland. This is because the Government has failed to fix the housing crisis. It has buried its head in the sand and pretended that it is not happening. Well, it has been happening, and now that housing crisis is marching south into the Waikato. In Hamilton, house prices are going through the roof and rents are going up on literally a daily basis as Aucklanders—and no problem with the Aucklanders, because it is not their fault; it is the fault of the Government for doing nothing—are having to move down to Hamilton to buy their first affordable homes and they still work in Auckland. They have to travel backwards and forwards between those cities on a daily basis, and that is creating a housing crisis in Hamilton. So, what is that going to mean? Well, what it means, I say for members of Parliament—and I notice that you will not hear from the Government Waikato MPs on this issue; you will not hear them getting up and speaking on this—but there are people living in cars, there are people living in garages, and there are two to three families to a home living in Hamilton, just to make ends meet. Just the other day in Hamilton there was a network meeting that I was at, where the issue of housing came up. One of the community workers asked the Housing New Zealand person who was in that meeting: “Are houses going to be sold in Hamilton?”. I felt really sorry for this man, but what he said was: “Oh, no, no. No houses will be sold in Hamilton. It’s great news. They are going to be sold in Waharoa and in Ngāruawāhia.”—Waharoa and Ngāruawāhia.

[Continuation line: And if anyone knows the Waikato]

SUE MORONEY

If anyone knows the Waikato, what two poorer communities could you find in the Waikato than Waharoa and Ngāruawāhia? That is where the Government is going to be flogging these State houses off. It says that there is no need—there is no waiting list, apparently, in Waharoa and Ngāruawāhia. Well, when I heard that, I went straight back to the 1990s because in the 1990s, when that National Government flogged off 13,000 State houses, I was one of the people who stood and formed a human ring round houses in Waharoa to stop those houses from being picked up in the middle of the night by that National Government and being shipped up to Auckland so that it could charge a higher market rent for them up in Auckland and leave the people in Waharoa without the housing that they desperately needed.

The CHAIRPERSON (Hon Chester Borrows): Come back to Part 2.

SUE MORONEY: Mr Chair, why this is about Part 2 is—

The CHAIRPERSON (Hon Chester Borrows): You are giving a Part 1 speech. Come back to Part 2.

SUE MORONEY: —that the Minister is no longer going to hear from the Housing Corporation about these—

The CHAIRPERSON (Hon Chester Borrows): Order! The member will resume her seat, and I am sorry to interrupt her. She should have taken the indication I gave her without me having to stand on my feet. This is a Part 2 debate. She should have another look at it and not just continue with a Part 1 speech.

Chris Hipkins: I raise a point of order, Mr Chairperson. Again, I will just make a couple of very brief points, the first of which is that traditionally—certainly, in the time that I have been in the House—when a bill goes through all stages under urgency, and particularly when a debate has been curtailed on one part, there is some scope given to members speaking on a subsequent part, if they have not had the opportunity to make all of their points on the first part, to address the wider part of the debate. That has always been the—

The CHAIRPERSON (Hon Chester Borrows): Thank you for making that point of order. You may resume your seat. There is also a convention, which the member will know very well, that if she wants to do a little bit of straying, she makes at least some references to whatever is in Part 2. She has been here a long time, for as long as I have. She knows the rules. Let us hear it.

SUE MORONEY: In clause 21 , where this bill will take away the ability for the Housing Corporation to give policy advice to the Minister, the Minister is not going to hear this information from anyone else because this bill says—the Housing Corporation is not going to tell the Minister. The Housing Corporation has been reduced in this part of the bill to being just a badly run State-owned property developer. It is a property developer; that is all it has been reduced to because clause 21 in Part 2 says that it is no longer required to give any research or policy advice to the Minister.

[Continuation line: Kris Faafoi]

Part 2 Remedial and other matters

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): It is a privilege to take a call on Part 2 of this bill. Ever since this Government took office, it has been shaving away the functions of Housing New Zealand , and clauses 20 and 21 of this bill continue that trend. Clauses 20 and 21 remove some of the objectives and the functions of the corporation that we colloquially know as Housing New Zealand. This continues, as I said, the trend that this Government has had for some time with regard to Housing New Zealand. If we go back to the very start of the first shavings of the functions that are featured in clauses 20 and 21, I think that may have been the 0800 number that Housing New Zealand used to operate, but then when there were waiting times of 2 to 3 hours, or even 4 hours, for some of the customers waiting for an answer to some of their basic questions, there was a certain level of frustration.

[Continuation line: So that was the first change, and the first shaving away]

KRIS FAAFOI

So that was the first change and the first shaving away of a function, because were there fewer front-line staff. Speaking as a local MP in the electorate of Mana, the next shaving away of a function was the removal of a front desk in the city. So we went from a city with a considerable number of State housing tenants, a high demand, a high capacity through that office to a situation where there was no front desk for the people of Porirua to go to and do their business. This was just not on in a city the size of Porirua and with the number of State house tenants. Clauses 20 and 21 of this bill just continue that trend of neglect of Housing New Zealand. The fact that this Government is taking away those objectives and those functions from Housing New Zealand in a way says that this Government does not want the story to be told of what is going to be the outcome of this piece of legislation. I said at the beginning of my speech that it is a privilege to speak to Part 2. Sometimes people say that just to fill in a bit of time, but it is a privilege because no one else in New Zealand, apart from members of this Parliament, gets to scrutinise this piece of legislation. It is being rushed through under urgency, and some pretty basic questions about the functions and objectives should be asked of this Government by people from outside this House. I am thinking about the people who live on Warspite Ave, on Commerce Crescent, on on Arahura Crescent, on Driver Crescent, in my electorate, who want to know what is changing in this piece of legislation and what will change in their lives. These functions of Housing New Zealand are changing in clause 20 and 21, so who will be their landlord? It is a pretty basic question from someone sitting out in the community: who will be their landlord now? In the past it has been Housing New Zealand and now it is a mixture of the Ministry of Social Development and Housing New Zealand, but with the functions changing in Part 2, who is going to be their landlord? What kind of rent are they now going to pay? What kind of tenancy are they going to have now? What happens to their children? What happens to their schooling? Are they safe in their community? These are all the kinds of question that needed to be asked in a select committee process, but this Government will not do that and has not even bothered to answer any of these questions in this committee stage. These are major changes in clauses 20 and 21 and, as I say, they continue the trend of this Government having to wash its hands of any responsibility of social housing in New Zealand. I grew up in a State house as well, but I do not want to be a political hypocrite—I do not want to be a political hypocrite. I want to come to this House and make sure we care for and build on some of the things that I had that were the very building bricks of the success that I have had today, to make sure that the generations that follow can have what we have had. But no. This Government wants to take that away. Clauses 20 and 21 are just another chapter in this long history of this Government of, basically, wanting to get rid of Housing New Zealand and to have nothing at all to do with making sure there are affordable homes for the most vulnerable Kiwis in this country. Because if the market will not supply it, who should? The answer from that side of the Chamber is “not us”. But on this side of the Chamber, we know there is a responsibility and that is why we will build on social housing when we are in Government next.

[continuation line: Clayton Mitchell]

Part 2 Remedial and other matters

Speech - CLAYTON MITCHELL (NZ First)

CLAYTON MITCHELL (NZ First): I rise to take a call on Part 2 of this piece of legislation. To try to keep it as relatively narrow as possible is probably not going to be the easiest because, let us be honest, the devil is normally in the detail, but there are a few details lacking here—there are only a few paragraphs. Basically, the essence of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill—I have to read that every time because it is so longwinded—for part 2, is really about two things that I can see, and that is taking away the GST in the first part. Whether that GST to be removed from the housing is really to do with making it more affordable—I do not think so. There is nothing in this legislation that suggests in any way that if you take GST off from the costs of housing, they are going to be transposed and put into the beneficial places for those people who are actually going to be paying those rents. If you really were interested in looking after the people paying those rents, then take GST off residential rates, take GST off food. Those are the sorts of things that will go far further than taking GST off the accommodation costs for those people in those houses. This package that this Government is putting together and putting out there for the property developers will be its sum game. I cannot believe that the National Government members sit there silently—not one person standing up to speak on this legislation. In particular, I invite the Māori Party to say what this legislation is going to do for the Māori people of this country. This is eating at the core of their issues. The biggest issues that we have in social housing deprivation throughout this country are now going to be handed over to those large corporations, those property developers, and we are not hearing anything that says in any way that they are going to oppose this bill. In fact, at the last count the Māori Party is supporting it, which absolutely beggars belief. I cannot understand that. Subpart 2 of Part 2, “Remedial and other matters” in the explanatory note to the bill is “Housing Corporation Act 1974”. Let me read it out to you because it is quite short but, to be honest, those people back home, wherever you are watching—I am sure there are a good dozen of you out there—might want to know this: “Clause 20 repeals section 3B(b). The effect of the repeal is that [Housing New Zealand Corporation] no longer has an objective to provide advice and information on housing to the Minister of Housing. Clause 21 amends section 18(2) by making clear that [Housing New Zealand Corporation’s] research and monitoring function described in section 18(2)(j) does not include research and monitoring for the purpose of advising the Minister of Housing on those matters.” From now on the Minister of Housing is going to be getting his advice from the people who are trying to get industry and employment for those people. This absolutely contradicts what this whole State housing is about. It is about looking after the people who need to be looked after the most. This is taking away their ability. I would certainly love to hear how the Minister thinks this is going to benefit New Zealanders, but also the minority groups of New Zealanders, and specifically, the Māori people in this country who need a voice, and we are not hearing one. We need to get some idea of how this is actually going to be of benefit to them and the rest of the people who are living in poverty in this country. We in New Zealand First, like the other comrades on this side, absolutely strongly and vehemently oppose the bill, and we would just love to hear some rhetoric, some words, coming back from the National benches on how those members can justify supporting this absolutely abhorrent piece of legislation. Thank you.

[Continuation line: Chris Hipkins]

Part 2 Remedial and other matters

Speech - CHRIS HIPKINS (Labour—Rimutaka)

CHRIS HIPKINS (Labour—Rimutaka): It is a telling indictment on the current National Government that the only time its members are willing to get up on their pins and talk in this debate is when they are trying to shut it down. They are not willing to stand up and actually defend the clauses of this bill. I want to turn to some of the clauses that have not yet been mentioned in this debate and they are the clauses around KiwiSaver—clauses 22 and 23—that make changes to the KiwiSaver provisions in the legislation that allow someone to withdraw their contributions to KiwiSaver to purchase a first home. What this bill does is that it means that somebody who has been in another superannuation or retirement savings scheme and transferred to KiwiSaver will still be able to access those provisions, where previously they might not have been able to. So potentially it is quite a sensible provision in terms of ensuring that people can use their retirement savings to buy their first home. But let us just think about that for a moment. That is how far we have come, when the main solution to people who cannot afford to buy their first home is that they can pull out all of their retirement savings to buy a house. That is what it has come down to. They have to make a choice between whether they are saving for their retirement or are able to buy a first home. That is the actual reality that many New Zealanders are facing. We are not talking necessarily about young—well, they are young, relatively speaking, but we are talking about people, potentially, in their 30s who might be looking at buying a first home. If they do that, and they put all of their savings and all of their money into buying their first home and they then spend the next 10 to 15 years getting their head above water in terms of paying that off, how long are they going to have to save for their retirement? As Michael Cullen said, when he was the Minister of Finance, you cannot eat your house. People are going to need to have savings in their retirement if they are going to live comfortably.

[Continuation line: I support this particular provision in the bill]

CHRIS HIPKINS

I support this particular provision in the bill. I do not necessarily support the other provisions in this part that I am going to talk about in a moment. I support this provision but I think we do need to take a step back and ask how on earth we have got to this point where it is a choice between owning a home or saving for retirement. We need New Zealanders to be doing both. We need to make sure that New Zealanders are supported to do both so that they can own a home and they can be sure that they are going to have a comfortable and secure retirement. Unfortunately, the reality is that many are having to choose between that. There are other factors at play here when they are making those choices. Many of the people in their late 20s and early 30s who will be in this position—maybe even in their mid-30s—will also have student loans that they are repaying. What we are doing more and more and more is loading cost on to a generation of New Zealanders who are not going to be guaranteed the same comfort in retirement that they are seeing for the generations who have gone before them. That is going to create intergenerational pressure. I say to all of those who are nearing the age of 65 that when that pressure really starts to come home, when the retirement boom starts to happen and the next generation of New Zealanders are faced with the choice of increasing taxes to pay for that—which they will pay—or making other changes, there will be a conflict. The future generations of New Zealanders will remember that they had to make a choice between saving for their own retirement and buying a home. I think that is going to be very unfortunate. I think we should be factoring that in now and we should be planning ahead for that so that that conflict does not happen, because that could be immensely damaging to intergenerational attitudes, and I do not think that that is going to be healthy. So I think although that provision is one that I support, I think we do need to look at that wider issue of housing affordability, those wider issues around that massive burden that is being placed on an emerging generation of New Zealanders and the pressure that that is going to lead to in the future. Clauses 19, 20, and 21, which have been more widely debated in this bill, make changes to the remit of the Housing New Zealand Corporation, established under the Housing Corporation Act 1974. Previously, the Housing New Zealand was the main adviser to the Government on social housing policy. That is now being transferred to another agency as part of a wider move, which has seen the policy function moving to the Ministry of Business, Innovation and Employment—or whatever, I cannot remember the exact order of the words in its name—and the needs-assessments being transferred to Work and Income. So the mentality behind this is that Housing New Zealand is simply the owner of the houses; that is all its remit is. That is all it does. I want to say as strongly as I can to the Government that although I understand the distinction that it is trying to make with these changes, it is not working on the ground. There are major challenges that that change is creating.

[Continuation line: Tracey Martin]

Part 2 Remedial and other matters

Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader—NZ First): Kia ora, Mr Chairperson. Thank you very much. I seek just a short call in Part 2 of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. I am pleased to see the Minister in the chair there, the Hon Paula Bennett—hopefully the Minister can expand some explanation around what is happening there, particularly in Subpart 2 and the changes to the Housing Corporation Act 1974. I refer specifically to clause 21(1): “In section 18(2)(j), after ‘related to housing’, insert ‘(but not for the purpose of advising the Minister of Housing on those matters)’.” From a New Zealand First perspective, we are not 100 percent convinced by the reasoning given for the shift of this advice to another organisation. My first question would be what Housing New Zealand did to the Minister that she no longer wants to put into legislation that it should be the one advising her or this Government about housing. The Housing New Zealand Corporation has an extensive institutional knowledge around the history of social housing in this country, about the needs of social housing in this country. Why would the Minister and this Government put into the legislation that this organisation is not to advise the Minister of Housing? It does not mean that she cannot seek advice from other people. There is nothing there. You do not need to put into legislation that the Minister must seek advice only from Housing New Zealand. It bemuses us as to why an organisation that is entrenched in New Zealand history and that has seen and has institutional knowledge about what used to be, what is currently there, and about the pressures out there—even though we would have to say that the measuring of the pressures out there is completely abysmal. What is happening in our area is that there are institutions, organisations, and NGOs saying do not bother telling the Housing New Zealand Corporation that you need a house because actually there is no way on this planet that you are going to get one under this Government. So the need is not being clearly reflected. Perhaps that may be a reason why the Minister has decided that that advice needs to come from somewhere else. But it is a little bit like other pieces of legislation we have seen in this House—it is the removal of the requirement to seek advice from; it is the removal of the role of somebody who actually has institutional knowledge to advise. We see Subpart 2 as being a really interesting place to go. I certainly would welcome the opportunity for the Minister to rise and actually address that. With regard to Subpart 3 and the amendments to the KiwiSaver Act 2006 we are seeing some other changes around the KiwiSaver Act, and none of them are actually to the benefit of the purpose that KiwiSaver was set up to start with. The purpose of KiwiSaver was to incentivise and encourage New Zealanders to save towards their own retirement. I was the generation—I am slightly older than the Minister—

Hon Phil Goff: No!

TRACEY MARTIN: I am slightly older—slightly older than the Minister. She may look younger—a lot younger than me—but I am slightly older. We are of the generation that was told in the 1990s that there would be no retirement for us—that there would be none and we were on our own. Have at it. But KiwiSaver came along as one of those backstops to start to encourage generations such as my own and then future generations to make sure we were able to somehow support ourselves. This clause gives the capacity to completely remove KiwiSaver for a period of time or any of your savings in there to put into housing is robbing Peter to pay Paul. From our perspective, Subpart 3 is not an answer to the housing crisis or the inability of young New Zealanders to actually afford to purchase housing. It is not a true answer. So we would again seek some clarity from the Minister as to why this Government believes that actually allowing people to dip into a Peter bucket to pay into a Paul bucket is logical at this time when we know, as Mr Hipkins said, we are going to have to make some adjustments—and New Zealand First has its own theories about the adjustments that need to be made—as our population ages and goes forward and more and more stress is placed upon that part of our taxation system. Finally, I think in Subpart 1, “Goods and Services Tax Act 1985”, that personally I cannot find anything controversial in that particular area there. I guess what we are saying is that when the Government actually seeks a service from somebody else, it does not have to pay the tax. At the end of the day it is taxpayers’ money. I can appreciate that taxpayers do not want to be paying again. I guess it is taking it from one bucket and sticking it into another, and that creates an administrative cycle. So on behalf of New Zealand First, just in closing, we would certainly seek some clarity around Subpart 2 from the Minister, if she is able to talk to us about why—

[Continuation line: Phil Goff]

Part 2 Remedial and other matters

Speech - Hon PHIL GOFF (Labour—Mt Roskill)

Hon PHIL GOFF (Labour—Mt Roskill): Can I welcome the Minister for Social Housing to the chair. She is the Minister in charge of this bill, so we expect her to actually address questions that are asked genuinely to her, rather than being mute and dumb in the chair. I have some questions that I need to ask about Part 2 of this bill. I am looking particularly at clause 20, which provides that Housing New Zealand does not have the purpose of providing policy advice, and clause 21, which says that Housing New Zealand research and monitoring does not include research and monitoring to advise on the policy issues. I would have thought that the Minister would find it really useful to have an independent source of policy research and advice, rather than listening solely to right-wing ideologs and property speculators and drawing on their advice and encouragement in order to set policy. For example, Minister, if you had listened to the advice of Housing New Zealand rather than not listened to it—and now taking away its ability to give that advice—you would realise that your statement yesterday that you are providing $500,000 for emergency housing is practically meaningless. I have got a picture here of a house on the edge of my electorate of Mt Roskill. It is just in Mount Albert. It is a two-bedroom home unit. Do you know what that was selling for last week? It was selling for $797,000—a two-bedroom unit. There it is—a very modest little home unit. Apparently, the Minister does not understand that house prices for incredibly modest homes are now so high that people cannot aspire to homeownership.

[Continuation line: People who are renting are being asked]

Hon PHIL GOFF

People who are renting are being asked to pay higher and higher rents that are unaffordable, because the person who invests in that as a property investor wants to get a return on their capital. We know, Minister Bennett , that 40 percent of all homes purchased in Auckland are purchased by property speculators. I would have thought that you would have known that, and had you listened to the advice of Housing New Zealand you would have been better-informed about it. So you would not then, in your press statement, say: “Look, I am dealing with the big problem of homelessness, I am going to give emergency housing half a million dollars.” You know what that will do, Minister ? It will purchase half of that two-bedroom home unit. How is that going to address the problems of the shortage of accommodation and homelessness? If you had listened to Housing New Zealand you would also have got some information from it, that when you talked about supporting moves to housing independence, in your press statement—I do not know who drafted that; great spin—you would have known what those words actually mean. They mean that you were not moving 3,000 people to housing independence—you were evicting 3,000 people. Housing New Zealand, in its research and advice, would have told you that a lot of those people are people who are going to find it really hard to cope in the private housing sector. I was talking to a woman; she is on reasonable income now, but she is crippled. The ministry spent, I think, $27,000 on the State house adjusting it for a person who needed wheelchair access and was not able to have mobility. Because of her income, she will now be put out in the private housing sector. The question I would like to ask the Minister, if she is listening to the advice of Housing New Zealand, is what private landlord is going to spend $27,000 modifying a house to deal with the purposes of somebody who has not got mobility? Then the Minister talks about increasing affordable housing supply. I know for a fact that Housing New Zealand would be able to tell the Minister that that simply is not happening, that instead of increasing affordable housing supply, its housing stock has been run down by 1,600 in the last 3 years. So here we are: we have got the worst housing crisis that Auckland has ever seen, and what is the Minister doing about it? She is depleting the stock of Housing New Zealand rental housing. A good policy-advice agency would have told her that, but, clearly, she is not getting that advice, and now, deliberately, she is saying we will not—

[Continuation line: Darroch Ball]

Part 2 Remedial and other matters

Speech - DARROCH BALL (NZ First)

DARROCH BALL (NZ First): Looking through this bill, in particular Part 2 , clauses 20 and 21 , the theme that stands out, with regards to the intent of this, is that it is passing the buck. It is an absolute dereliction of duty by this Government to pass the buck and responsibility of maintaining that safety net that I have mentioned previously in this House, which the Government has a responsibility for maintaining and ensuring that it has integrity and that it catches those who fall. State housing is an integral part of that safety net. But what is happening now is, like I said, that dereliction of duty—passing it on to NGOs , to community organisations that are underfunded, under-resourced, and understaffed. And they have to take the brunt of the effects and consequences of legislation like this. But there is a question that I need to ask—and everybody should be asking, and the Government and the Minister, in particular, should answer—how did it get to this stage in the first place? They can stand up and give the situation, and the reasons why it needs to happen now, but how did it get to that situation in the first place? Like Kris Faafoi has already mentioned, this has been happening slice by slice over the past 7 years, to get to this stage where there is some feasible reasoning in dreamland—with all of the positive outcomes where the Government believes that it is all candy floss and lollipops, that it can put this responsibility on to someone else and try and make it believable. But the fact is—what are the real consequences for the people on the ground and the NGOs that have to take up all of these responsibilities? I have got an example in Palmerston North , in my electorate where I am based, where we have got a trust, Shepherds Rest trust, that houses over 60 of the most needy people. The trust had Ministry of Social Development funding, which was taken away. It had to get funding from the Lotteries Commission , and it was not renewed this year. And there is a potential, now, that there will be over 20 people without beds, unless a private organisation or NGO steps in and takes over from that trust. But what are the consequences? You have got the real responsibility of the Government, which needs to look after those needy people, being put on to the NGOs that have not got the funding, have not got the resources—and they are balancing on a knife edge about the funding and keeping those people with beds. The fact is that this legislation will make it even worse in the regions. What the concern is for New Zealand First , is that this is going down the pathway a step closer to the voucher system that Mr English was talking about, with the social system. That spells doom for the regions, because what that means is that if it is not financially viable in the regions for branches to be open to look after the people, then they will close. And it is happening already. The Salvation Army has closed seven branches in the regions, and is bringing it back to the main centres—and we are talking about the two-tier system again. In closing, I would like the Minister and the Government—any Government member, when they want to stand up—to answer a simple question: what is the priority? Is it profit, or is it people? Because all the way through this legislation, and especially through Part 2, it all looks like it is about the bank balances, the surpluses, the profit, and it is not about the people.

[Continuation line: Adrian Rurawhe]

Part 2 Remedial and other matters

Speech - ADRIAN RURAWHE (Labour—Te Tai Hauāuru)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Part 2 , subpart 1—Goods and Services Tax Act 1985 , clause 18 amending section 5 (Meaning of term supply) , (6F) , reads: “For the purpose of this Act, the amount payable by the Crown or the agency under the Housing Restructuring and Tenancy Matters Act 1992 under a reimbursement agreement or a tailored agreement under that Act for the provision of accommodation in social housing is treated as consideration for the supply of accommodation in a dwelling by way of hire.” My issue with this particular amendment is that, first of all, it refers to something in Part 1 of the Act for which I rose to take a point of order. It is actually incorrect. In New Zealand Statutes 1992 , Volume 2 , No. 76 , Part 1 of the Act—which also is part of this, in Part 2 of the bill. I am doing this because it is every member of Parliament’s obligation to make sure that even in legislation that you do not agree with, it is correct, because I do not want to see this—

The CHAIRPERSON (Lindsay Tisch): Just one moment. Did you say you were—did you want a point of order, did you? Did you actually ask for a point of order?

ADRIAN RURAWHE: In the first part of the debate I did, yes.

The CHAIRPERSON (Lindsay Tisch): Oh, OK , sorry, I just—because this is not a point of order, OK?

ADRIAN RURAWHE: Thank you. In clause 4 of Part 1 of the bill, section 2 is amended. It refers to: “reimbursement agreement means an agreement referred to in section 85(1)” . In this Statutes book there is no section 85(1). It carries on to say “section 98(1)” —there is no subsection (1) of section 98 in the Act. There is a difference between alphabetic and numeric—there is a section 85(a) , but no section 85(1).

The CHAIRPERSON (Lindsay Tisch): Come back to Part 2.

ADRIAN RURAWHE: As I said, it is incumbent—I will come back to Part 2.

[Continuation line: Again, new section 5(6F)]

ADRIAN RURAWHE

Again, new section 5(6F), in clause 18 , refers to those very matters—a reimbursement agreement or a tailored agreement. Those clauses in Part 1 give effect to this clause, and this clause now is redundant. In effect, what has been passed in Part 1 is also redundant. We will be seeing this come back, maybe as part of a Statutes Amendment Bill to correct it. This is wrong, and it is incumbent upon me to tell this Committee so. That is what we get when we rush legislation through this House. This is what we get when the members opposite sit in absolute silence and do not participate in the debate about this part here, Part 2. We need to hear from both the Minister and the members opposite—the Government—about how they are going to correct this. This legislation is about to be passed in the next, maybe, 2.5 hours. So somehow between now and then we have to make sure that we do not add additional cost to the taxpayer and that we correct this to make it as good as it can be, because to do nothing would mean cost to this nation and I do not think that is good enough. I do not think it is good enough that—and I will refer to another part of Part 2, in particular under subpart 2: “Housing Corporation Act 1974” , which amends section 3B . That is about the Minister receiving advice from Housing New Zealand . I am certain that if this had gone through a robust, considered process, then we would not be in here talking about—

Meka Whaitiri: Errors.

ADRIAN RURAWHE: —errors within this bill.

[Continuation line: Pita Paraone]

Part 2 Remedial and other matters

Speech - PITA PARAONE (NZ First)

PITA PARAONE (NZ First): Tēnā koe, Mr Chair. Tēnā nō tātou. I stand to talk to Part 2 of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill . Can I say from the outset, and we all know this, those of us in this Committee, that the obligation of any Government is to protect the most vulnerable of our fellow citizens. I do not believe that this bill, this Part 2, actually holds true in this case. Having said that, and I say it with a certain weight on my heart, when I consider the former leaders of that once respected party—and I refer to the Hollands, the Holyoakes, the Marshalls, the Muldoons—I am sure that all of them are turning in their graves to see this bill come before this Committee, promoted by the National-led Government. This part, particularly clause 20, highlights and verifies what most of us on this side of the Committee believe—this bill is not the beginning; it has already started—that this is the dismantling of our public services and, in this particular case, Housing New Zealand Corporation .

Chris Bishop: Do some research.

PITA PARAONE: The member may say that it refers only to research, but what I am saying is that this is the seed for further things to come. Reference was made by an earlier speaker that much of the work that is being done by constituent MPs is addressing accommodation and the housing needs of the people in those electorates. Can I say that it is not only constituent MPs who are having to deal with that but list members like myself. It should not come as any surprise, because the constituent member in the particular electorate that I am responsible for happens to be a member of the National-led Government. So one needs to ask: who is going to undertake that research; who is going to do the monitoring; and what skills and experience will they have to ensure that the Minister does in fact receive the quality advice that he or she certainly deserves and certainly will need to ensure that this Government, and we in this House, fulfil our obligation to meeting the housing needs of our fellow citizens? I have heard reference to this bill as being one of flexibility and innovation. I do not think that there is anything new or innovative in removing the responsibilities of research and monitoring to another agency. I think that the danger we will see in all of this is that the long-term experience that the present agency has will be lost. I know that the Māori Party members have been very supportive of this bill. It behoves me to say that in giving their support to this bill, they are doing the people whom they represent a disservice, particularly in the regions where I come from. I do not believe that regions like Whangarei will certainly be better serviced by this proposal and, in particular, by clause 20 of this bill. So I would ask that both the Māori Party and the National-led Government reconsider this. The fact that they are pushing this bill through by way of urgency suggests to me that they have already made up their minds and they are not going to listen to any considered arguments.

[Consideration line: Dr Megan Woods]

Part 2 Remedial and other matters

Speech - Dr MEGAN WOODS (Labour—Wigram)

Dr MEGAN WOODS (Labour—Wigram): I would like to address in this speech, largely, clauses 19 through to 21, but I would like to speak briefly to the other clauses in Part 2 of this legislation. I would like to reiterate the need for the Minister of Social Housing to answer the serious questions that my colleague Adrian Rurawhe addressed in his speech before. I think there are some very serious questions around the robustness of this legislation that need to be addressed by the Minister. We are passing this legislation under urgency. It is the function and, indeed, the responsibility of all members of this Committee to examine this legislation—to read it and to question it—and even, as my colleague Adrian Rurawhe said, if we do not agree with it, we must all work hard to ensure that it is good and robust legislation. That is our function as legislators, and, frankly, Government members on the benches opposite me are being absolutely negligent in their part in ensuring that this legislation is the best it can be under an urgency stage. They need to get on their pins, take a call, and examine the legislation and do the job for which they were elected and paid to do. I have some questions that I would like to hear the Minister answer, too. We still, throughout all these parts of this legislation, do not have any clarity around who is going to be taking over the function of providing monitoring and research around housing in New Zealand. This is, of course, the amendments to the Housing Corporation Act that are addressed under clauses 20 and 21 in this legislation. So I would like to hear the Minister take a call and give us some kind of indication. It is the kind of question that would have been asked at select committee. It is the kind of question that we would have sought advice on from officials, around what the options were, so I would like to hear the Minister put those options to it, because I have real concerns that we have all this talk from Government members around the flexibility around housing that is enshrined in this bill. A lot of it does come back to the advice that is offered under clauses 20 and 21 in Part 2 of this legislation.

[Continuation line: We have heard throughout other stages of this bill Government]

Dr MEGAN WOODS

We have heard throughout other stages of this bill Government members talking about the need to make sure that we have housing that is fit for purpose and in the right location. In March this year I asked one of the Ministers with responsibility for housing, the Hon Bill English, some very specific questions about Housing New Zealand houses in my electorate, by suburb. I asked about individual suburbs, and I am questioning the advice and where this is going to come from under clauses 20 and 21, in Part 2 of this legislation. When I asked about housing in Riccarton, when I asked about housing in Addington, and when I asked about housing in Hoon Hay I was told that Housing New Zealand does not collect information by suburb, so how is this Government saying that it is making decisions about where housing needs to be based on information that it does not collect? I was told by the Hon Bill English that information was collected only local authority territorial units. Well, this bill covers hundreds of thousands of people. We are being told that this is the big society where communities are taking ownership, so I would like to hear from the Minister in the chair, Paula Bennett. I would like her to take a call and tell me who will be overtaking this function. Who will be providing this granulated, localised, and community-driven information that will be required to deliver the outcomes that this bill purports to do? It is not being done at the moment, so where will that function lie? Frankly, I find it absurd that the Government is making decisions about localisation of housing when it does not even have the data, when it has not been collecting it, and when it has been collecting it only at a territorial local authority level. It simply does not stack up. So that is a question under this part that I would like the Minister to address. I would also like to know about the kinds of research and monitoring that are going to be undertaken under these clauses in the bill. What are the things that are going to be examined? I want to know not only who is going to do the research and monitoring but what kind of research and monitoring it will be. Is it going to be about the liveability of homes? Are we going to be collecting that not only at a local level but at a meta level? Will those questions being asked be fit for purpose?

[continuation line Tisch: I call Phil Goff.]

Part 2 Remedial and other matters

Speech - The CHAIRPERSON (Lindsay Tisch)

The CHAIRPERSON (Lindsay Tisch):I call Phil Goff. [Interruption] I am sorry; Phil Twyford. I got the “Phil” part right. Phil Twyford.

Part 2 Remedial and other matters

Speech - The CHAIRPERSON (Lindsay Tisch)

PHIL TWYFORD (Labour—Te Atatū): It is the revenge of the Phils. Thank you, Mr Chairman. I was a bit worried actually, because one thing I have learnt is that if you give Phil Goff half a sniff, he will grab the opportunity with both hands. Speaking to Part 2 of the bill, I want to make a point that relates to the argument that many of us have been making this morning about this bill, and that is the fact that National has been pushing this bill through the House under the cloak of Budget urgency with no apparent justification for why this bill needs to be passed today. I have not heard anything from any Minister in the chair or any of the Government members in this debate about why this bill has to be pushed through under urgency. But the pitfalls of that approach are actually contained within the clauses in Part 2. Clause 18, which basically ensures that these new flexible purchasing agreements are exempt from GST, is a tidy-up. It is a tidy-up of previous legislative mistakes. Clause 23 amends the KiwiSaver Act so that membership in complying superannuation funds counts for the 3-year eligibility period for a first home withdrawal if a person transfers to KiwiSaver. This clause is cleaning up the mess left by the KiwiSaver HomeStart package and the legislation that enables KiwiSaver withdrawals. So two clauses in Part 2 are evidence of this Government’s previous botch-ups in passing laws in this House, but it does not seem to have learnt from its mistakes and it is pushing through this bill, under urgency, without any chance for scrutiny at the select committee, without any expert opinion, without the officials being able to take their time and look at the legislation, and without the public being able to come along and make submissions. You have to wonder whether clauses within this bill will end up back in the House in some kind of mopping up operation in the future, wasting taxpayers’ money to clean up the mistakes that this Government has made. Clauses 20 and 21 are really symptomatic of this Government’s systematic gutting of Housing New Zealand, the latest and perhaps the last indignity before the organisation is sliced and diced and handed out to anybody who will take it. With the removal of any kind of policy and research function this bill basically takes away Housing New Zealand’s mandate to do evaluations of its programmes. So it has now basically been reduced to a Government-owned version of Barfoot and Thompson instead of being a full-service, social housing organisation devoted to meeting the needs of some of the most vulnerable New Zealanders. It is simply a letting agency. Its ability to manage the waiting lists, its ability to handle and assess eligibility has been hived off to the Ministry of Social Development. Its portfolio has been carved up and flogged off to anybody who will take it under other provisions in this bill. But these two clauses—20 and 21—basically take away Housing New Zealand’s ability to do research and, most important, to give advice on social housing to the Government of the day. But this Government does not want advice on social housing. It does not want to hear from people. We know that there is no evidence base for the Government’s policy of flogging off State houses and devolving the job of providing social housing and State housing to the most vulnerable New Zealanders. There is no evidence for the assertion that the Government cannot do that job properly and that non-governmental organisations; charities; Uncle Tom Cobbleigh, who might come along and register as a community housing provider; private landlords; property developers; and anyone who meets the perfunctory requirements of being a social housing provider can line up and get these houses at knock-down prices. There is no evidence base for it.

Part 2 Remedial and other matters

Speech - Hon RUTH DYSON (Labour—Port Hills)

Hon RUTH DYSON (Labour—Port Hills): Normally I would say I was pleased to be taking a call on a bill that talked about more flexibility in social housing, but unfortunately the title bears little relevance to anything in the bill, particularly in Part 2. Before I speak to the specifics—and I want to speak particularly about clauses 20 and 21—in Part 2, I just want to talk about why members of Parliament come to Parliament, and why we seek to spend our Fridays, and our Saturdays for that matter, debating in this House. It is because every single member of Parliament, regardless of their party, I think, comes to Parliament because they think they can make a positive difference. They think they can make a positive contribution to a better New Zealand. So regardless of what their party is, that, I think, is the driver behind the intentions of all members of Parliament. One of the things that we have been particularly proud of in New Zealand is our commitment to social housing. That is because, as egalitarian New Zealanders, we think that it is just right—it is fair—that people should have a warm, dry, affordable home and be able to stay there and be part of their community. That has been an integral part of the fabric of our society for nearly a century since this Parliament first debated the introduction of social housing. It is something I am particularly proud of, especially when you go to other countries and see people living in appalling conditions. Of course we have State houses that are very run down in New Zealand. We have whole areas where we would like to see a lot of improvement done, but would it not be great if this Parliament could regain the sense of unity that we had 80 years ago when we introduced social housing and asked how we could do it better for the future? But the National Party, instead, is saying: “We don’t do not think it is the Government’s responsibility to operate State housing any more. We think we should sell it off.”

[continuation line. Well, I do not agree with that.]

Hon RUTH DYSON

Well, I do not agree with that. I do not agree that it is a valid role of housing providers to provide social housing, with the Government completely out of the picture. Social housing providers have always worked in partnership with central government, and long may that partnership continue, whether it is the Salvation Army, or Comcare Trust, or the Methodist Mission, or Presbyterian Support—any number of organisations that have done their bit alongside the Government to provide warm, dry, affordable houses, so that every member of our society can be safe and be part of a contributing community. That is not the aim of this bill at all. Clauses 20 and 21 specifically outline the further withdrawal of Housing New Zealand from a very critical part of providing social housing, and that is in policy advice and in research and monitoring. How do we know what works and what does not, if Housing New Zealand—the very agency that was responsible for providing social housing—is no longer providing policy advice to the Government about social housing or doing any monitoring or research? How can we say our aim is to do things better in future if we are not getting any policy advice about how things are working at the moment? I want to challenge the backbench of the National Party to explain why they are putting their personal names alongside a bill that privatises social housing—

Chris Bishop: No, they’re not.

Hon RUTH DYSON: —and that says that Housing New Zealand will no longer be responsible for policy advice or for research and monitoring. Mr Bishop, I recommend some reading for you—the bill would be a good starting place. The bill would be a really good starting place because I am fed up with listening with interjections that are not truthful. They are not truthful, and your colleagues listen to them and think that when your untruths are repeated, they must be true. Well, actually, repeating something that is not true does not make it true. That is exactly what happens in Part 2 of the bill, which we are debating now. I challenge Mr Bishop to stand on his hind legs and say that he has read the bill—that would be a challenge—and then to explain what it does. How can this bill possibly be accused of providing more social housing, more flexibility, warm and dry homes, or be accused of, as Simon Bridges, the Minister who was previously sitting in the chair said, making time stop still? He said that under Labour—

[Continuation line: Lees-Galloway]

Part 2 Remedial and other matters

Speech - IAIN LEES-GALLOWAY (Labour—Palmerston North)

IAIN LEES-GALLOWAY (Labour—Palmerston North): I am very pleased to be able to speak to Part 2 of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. The title of Part 2 is “Remedial and other matters”, which may suggest to people who are watching this debate at home that there are just a few little rats and mice bits and pieces in Part 2. But actually, clauses 20 and 21, in particular, have some very important changes to the way housing policy is developed in New Zealand and to the way the Government takes advice on housing policy. Clause 20 actually says that Housing New Zealand no longer has the purpose of providing policy advice. You know, this is Housing New Zealand—the clue is in the name about who is best positioned to provide housing advice to the Government. It might be, at a guess, the organisation called Housing New Zealand, but apparently that is not good enough for this Government. So I would like to know where the documentation is, since we are passing this bill under urgency, and since there has been no select committee process. Where is the evidence, where is the consultation process that the Government went through that led it to the conclusion that Housing New Zealand is not the best Government agency to provide advice housing advice on housing? Minister, please—or maybe Chris Bishop; he has got a lot to say. Maybe he could actually get up and tell us where the idea came from that Housing New Zealand is not the Government agency to provide housing advice. If this bill went through the normal processes where the public actually got to come and have their say, where this was properly consulted on and considered, and we got to see the evidence, we might not agree with the position that the Government got to but we would have an idea of how it got there. It is absolutely the most important thing that the Government members get up and explain to us where this idea comes from, because at the moment on this side of the House, in the absence of that explanation, it looks like a pretty hare-brained scheme to us—that Housing New Zealand is not the organisation that will provide housing. Maybe the Government has lost confidence in Housing New Zealand. I do not know. Maybe that is the reason why. I have absolute confidence in my local branch of Housing New Zealand. The people who work there are amazing. They would not say this; they would never say this, but my observation is they suffer under absolutely appalling policy settings from this Government and they have to do things that they just do not believe in. They are committed public servants. They implement Government policy but they do it in a way that is as constructive as possible, and they know what the needs of their community are. They know the housing needs of their community and maybe that is the exact reason why this Government does not want to get advice from them—because the advice that they would give this Government is not want it wants to hear. I think that is the reason, and in the absence of any better explanation from the Government, I think we have to all assume that is the reason. I hope the next call from the National Party is not a closure motion. I hope that it is actually an explanation of clause 20—why it is necessary, and what led the Government to that decision. Clause 21 provides that research and monitoring by Housing New Zealand does not include research and monitoring to advise on policy issues. I am at a bit of a loss to know what research and monitoring function is actually going to remain required of Housing New Zealand, because they are no longer giving policy advice, they are no longer managing the waiting lists, and they are no longer interacting with the tenants. What research and monitoring does Housing New Zealand actually have to do, if it no longer has a policy function either? What will be done with that research and monitoring? Again, is this the kind of information that the Government does not want to listen to because it knows its policies are wrong and it knows that if there is any consideration or sunlight applied to its policy at all, it will be found out for being full of holes? Is that why this Government wants to remove the monitoring function from Housing New Zealand?

Part 2 Remedial and other matters

Speech - IAIN LEES-GALLOWAY (Labour—Palmerston North)

The CHAIRPERSON (Lindsay Tisch): No, there are no restrictions.

[Continuation line: Annette King]

Part 2 Remedial and other matters

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): Thank you very much, Mr Chairman—

The CHAIRPERSON (Lindsay Tisch): Order! I just want to clarify something. There is no restriction on the number of closures that a member can take.

Hon ANNETTE KING: Thank you, Mr Chairman. There used to be, did there not? So there must have been a change in Standing Orders to allow a person to take more than one closure motion. But thank you, Mr Chairman, for telling us what we ought to know. I want to address Part 2 of the bill, “Remedial and other matters”. I, too, want to go to the area around the functions of Housing New Zealand Corporation and the role that it is going to play. You see, it is under “Remedial and other matters”, which I found very interesting, because anyone who knows the meaning of “remedial” knows that it means the supplying of a remedy. I cannot see what remedy is being supplied under this part of the bill. It is meant to correct or improve deficient skills, so I can only assume that the Minister for Social Housing thinks that there are deficient skills in Housing New Zealand, and I want to dispute that. I want to start from the position that one of the features of a National Government—and it goes back many years; some of us experienced it when we came into Government—is this drive to stop policy making by Government departments and others; to drive out the policy-making part and contract it out to somebody else. That was the history in the health portfolio. The policy function of the Ministry of Health was driven out and put into other agencies. I am asking the Minister why she would not want to have policy advice from Housing New Zealand—the very agency that has for so long been working with tenants, that has been working in the community, and that has very, very competent staff who are able to provide the sort of advice a good Minister would want.

[Continuation line: Why would the Minister remove this role from Housing New Zealand?]

Hon ANNETTE KING

Why would the Minister remove this role from Housing New Zealand? Who will replace it in this role? Where will the advice, the on-the-ground advice that a Minister would want, come from, Minister? Would you be able to answer that shortly? Where will this policy advice come from? One of the problems for a Government is when it thinks it has got all the answers itself; when it does not think it needs good strong policy advice from its own agencies. It seems to me that the Minister has decided that she does not like the advice she has got from the corporation. I know that it has raised a few issues, actually, with the Minister in relation to some policy and I think that this is a way of getting rid of that sort of advice. It does not want anybody that might contradict the direction and the path this Government is taking in housing. So, Minister, please tell us who will replace the Housing New Zealand in providing advice on policy, because when we look at this particular piece of legislation we see in the regulatory impact statement that no evaluation was done on it, and that Treasury did not even do an evaluation on this policy that is before the Committee today. So who is going to do the evaluation and provide the advice on future housing policy? I think that is a very serious question that needs to be answered. Then we find out that in this particular part of the bill “the Corporation will no longer be expected to undertake research and evaluation activities for the purpose of advising the Minister of Housing”. So who is going to undertake the research and evaluation? It is not Treasury. It is not Housing New Zealand. Who is it that is going to undertake this very serious function that must be undertaken when formulating very good policy? This is a huge gap in this Government’s approach to policy making. Get rid of the agency that would help with it, get rid of any advice that it is going to give and any evaluation—this seems to me to be a very short-sighted approach, Minister, when it comes to Housing New Zealand. I agree with my colleague who just resumed his seat, Iain Lees-Galloway, that Housing New Zealand for decades has provided incredibly good advice. It has some excellent people working in it. You know, if you go to your own Housing New Zealand offices when the doors are open and you can get in—because, of course the doors are closed now and you have got to ring up to get inside the door—and you have a close relationship with your local Housing New Zealand, you will find people very knowledgeable about what is going on in your area. They can provide the quality advice to a Minister on the ground. They are good people. But, unfortunately, I think this Minister is going down the same track that she went down when she was Minister for Social Development, because if you go to Work and Income offices now you will find a very demoralised bunch of people—people who used to care a lot.

[Continuation line: D O’Connor]

Part 2 Remedial and other matters

Speech - Hon DAMIEN O'CONNOR (Labour—West Coast - Tasman)

Hon DAMIEN O'CONNOR (Labour—West Coast - Tasman): Following on from my colleague, the Hon Annette King, there is the question of who will provide advice if the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill is passed and we remove the ability of Housing New Zealand to do so. The question of why that advice should be provided is also one that I will come back to. In my view the “whos”—that is, if we prevent Housing New Zealand providing that advice; that vacuum—will be filled by three parties: firstly, the real estate agents, because the Government likes them, secondly, the banks, or, thirdly, the investors in the whole housing market. The reality is that the Minister will require advice. Capable as she is I do not think she has the ability to go around and find out what is happening in each and every different market for housing up and down this country. So where will the advice to the Minister come from? Real estate agents—well, I guess they could provide advice; they are on the ground. The banks—they provide the money. And the investors obviously have an interest in this area. Well, we must ask the question why they will provide the advice, because when Housing New Zealand provides the advice it is for one purpose—and it has been set up—and that is to help New Zealanders into housing and into homes. It is not just social housing; actually, it is across all housing. Every bit of housing, be it in the public or private sector, has a social component to it. If we think we can have an economy without people having homes we have got our head in the sand, we live in a false world. We need a strong social structure across our society, strength, confidence, and security to give us a good economy. The Government, on the other hand, is removing the ability of its own agency set up right back in the 1930s to provide houses and homes for New Zealanders, to provide security for our good people so they can get on and live their lives and contribute to our country and our economy. If you remove that ability for them to provide the advice, you then leave it open to the real estate agents, the banks, and the investors. Their reasons for providing advice are not the same reasons of Housing New Zealand, are not the same reasons of a Labour Government, but perhaps the National Government has a totally different objective. In spite of its words around social housing responsibility, in my view, it has got to the reality and honesty of saying “We’ll just leave it to the markets. We don’t need any advice because the markets will provide the advice to the Minister and indicate what he or she should do.” That is the philosophy of the current National Government. The market delivers nirvana. The market delivers to each and every New Zealander—it thinks—and we will get our advice from the real estate agents, and we will get our advice from the banks and the investors, and we’ll ensure that every New Zealander has a fair go. Listen to the ad played in Singapore, Minister. Listen to the ad that says: “Invest in New Zealand, because New Zealanders will pay more than 50 percent of their incomes to pay the return on your investment.” That is the advice that the Minister is going to open her mind and ears to, because the Minister and the Government are going to remove the ability of the one agency set up in the 1930s to provide homes and securities for New Zealanders, remove the ability of that agency to provide the advice. This is a huge backward step in Part 2. This is an outrage for a country that has depended upon the advice, the independent advice and the sound objectives of Housing New Zealand since the 1930s. Subpart 2 of Part 2 of this bill will remove that and replace it with market advice, with the self-serving advice of real estate agents, the self-serving advice of banks that want to pour more money in so they can get more money back, and the self-serving advice of the investors who think it is better that more and more New Zealanders pay rent into the private sector than have the security of a home, be it in the private sector or be it under Housing New Zealand.

[Continuation line: P Bennett]

Part 2 Remedial and other matters

Speech - Hon PAULA BENNETT (Minister for Social Housing)

Hon PAULA BENNETT (Minister for Social Housing): I just thought it was important to tie up a couple of things as we have heard quite a few speakers. They are repeating themselves and so obviously there are a couple of issues there. So let us be clear on something. Housing policy changes—

Hon Annette King: Your side doesn’t even speak.

Hon PAULA BENNETT: Well, here it is. Here are the answers that you wanted. Housing policy changes were actually reported back from the Social Services Committee on 12 May 2011. It has been to select committee; it has just been repackaged into this bill. Ministry of Business, Innovation and Employment staff, to be quite clear, have been undertaking policy advice in lieu of Housing New Zealand since June 2011. So, since June 2011—[Interruption] Come in. This is an opportunity for us to tidy up what is in the bill, which says that Housing New Zealand does it, so we have changed it—

Hon Annette King: So under urgency we need to tidy this up?

Hon PAULA BENNETT: No, well actually the first part, but I am not going to talk about Part 1; we are talking about Part 2. So to be quite clear, the questions that have been asked have been around that. It made sense to tidy up that Housing New Zealand no longer provides the policy advice that it has not been providing now for 4 years. Actually, that whole advice part of it, and what needs to be done, is that it is more than just Housing New Zealand. This is about providing advice to the community housing sector and making sure that we are seeing the needs of the whole community and not just one player.

[Continuation line: They may be a big player and a significant one]

Hon PAULA BENNETT

It may be a big player and a significant one, one that I, of course, meet with incredibly often and take its advice, but that advice goes through the Ministry of Business, Innovation and Employment, which means that we are looking at the whole sector as a whole. The other part of it that I thought I should just quickly clear up is, certainly, there were questions earlier about subsections and the existing sections. So it is obviously for those who have been around longer, which is why I do not think we have got more on it. It is a drafting convention that when subsections are added, the existing sections become subsections. So if you have got section 98, when you are putting in a section 98(2), then section 98 becomes section 98(1). That is why you cannot find section 98(1). It is because, as a convention, it will become that once we have made the changes. Thank you.

[continuation line: Hipkins]

Part 2 Remedial and other matters

Speech - CHRIS HIPKINS (Labour—Rimutaka)

CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on this second part of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill and respond to the Minister for Social Housing’s comments where she said that Housing New Zealand has not been providing advice to the Government—

Hon Annette King: For 4 years.

CHRIS HIPKINS: —for 4 years—since 2011. Does it not show? Does it not show? I think that is one of the major issues here. It is that the Government is divorcing the practical realities of the decisions it is making from the advice it is getting on those decisions, and it is not working. I will speak about the experience I have encountered in my own electorate. Previously, Housing New Zealand had, if you like, three broad functions: the provision of the housing, advice on the housing, and identifying the people who were going into the housing. Identifying the people who were going into the housing was transferred to Work and Income, and as a result we now have a mismatch between the housing availability and the people who qualify to get it, because Housing New Zealand no longer has—

Brett Hudson: With National it’s about the people in need, not about who owns the house.

CHRIS HIPKINS: I am looking forward to Brett Hudson’s contribution because, like most of the people over there, he has had a National Party lobotomy and does not seem to have his own opinion any more and therefore has only the option of being rude to other people because he is not willing to stand up and share with the House his own opinion. As I was saying, the Government has divorced from Housing New Zealand decisions regarding who gets the houses, so Housing New Zealand no longer has the complete picture of the people who are likely to be in need. That has an impact, then, on its ability to deliver policy advice to the Government. One of the issues there is that the complete picture of who the people in need are is now actually quite difficult to ascertain. Housing New Zealand has cut off the lower two tranches of the waiting list so that we now no longer have any record of the people who are at that lower level. That is a policy issue that Housing New Zealand could be supplying advice to the Government on, and it is now no longer able to do so. Here is the real reality of what these changes have actually meant. I think we can look at the policy and we can look at all of the theory behind it. Let us deal with the practical realities of what it has meant. What it has meant is that on a Friday afternoon I have got people sitting in my office saying: “I am living in a car. There are three-bedroom houses empty in this area, but because I qualify for a four-bedroom house, Housing New Zealand will not place my family.” That is a practical reality. That is an actual case that I have been dealing with for some months, where Housing New Zealand will not give that family a home because they qualify for a four-bedroom home. There are no four-bedroom houses available, but there are empty three-bedroom houses available but it will not place them in a three-bedroom house. That is the practical reality of the policies we are dealing with. And Housing New Zealand, of course, can no longer provide to the Government practical advice on that, because the policy function it previously had is being removed from it. There is good reason why the delivery agencies, the agencies responsible for delivering on the policy, should be able to provide policy advice to Ministers on the implications of the decisions Ministers make. The implications of the decisions Ministers have made in social housing policy have actually made it more difficult for people to get into Housing New Zealand homes, more difficult to target assistance to those who most need it. I have got no problem with us looking at the ways we can better support those who are the most vulnerable and most need it. The practical realities are that that is not happening, and there are very needy families out there who are living in cars. The family I mentioned before have got a number of kids. That is why they qualify for the four-bedroom home. The kids are staying with someone else; they are living in the car. That is just not acceptable. Then, of course, Housing New Zealand will offer them a place that is in another city. It will say: “Oh, we’ve found a four-bedroom place for you, but you’re going to have to move 100 kilometres away.” They have to uproot their kids from their schools and all those sorts of things. It is just not right. This family would be willing to accept a 3-bedroom house, but Housing New Zealand will not give it to them. I think that is wrong. That is the practical reality of the policy we are passing. It is important that when Ministers make decisions about these issues, they are connected to the practical realities that those decisions result in, and that is not going to happen with this bill. The reforms simply are not working. If they were designed to ensure that the needs assessment process was more efficient and that the advice coming to Ministers was better, that is not happening. The needs assessment is not more efficient. What it is resulting in is further delays for the most needy people who really should be getting placement housing, because they get shoved from one agency to another and then back again. The policy advice process that should support that is not there and is not robust enough, because the agency now providing the policy advice, the Ministry of Business, Innovation and Employment, is completely removed from the actual provision of housing and the practical implications of that. It says everything about this Government that it has handed over the responsibilities for advice on housing to the agency that is responsible for property speculation.

[continuation line: David Cunliffe]

Part 2 Remedial and other matters

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

Hon DAVID CUNLIFFE (Labour—New Lynn): This Budget has been labelled by the Government as the “compassionate, conservative Budget”. These clauses, clauses 20 and 21 of this bill, the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, show that it is a “Cabinet club conservative Budget”, because it is taking a Public Service housing provider, ripping the guts out of it, and, in Part 2 of this bill, removing from it even the ability to advise the Minister for Social Housing on policy issues. Here is how. Clause 20 says that Housing New Zealand will give no policy advice. Clause 21 says that when it does research, that research will not be on policy issues. In other words, no non-commercial function will be performed by Housing New Zealand. Housing New Zealand is going from being a provider of houses to vulnerable families who need help to, essentially, a commercial landlord. Let us look at what would be some of the advantages of an agency like Housing New Zealand continuing to be empowered to give policy advice. The first, as my colleague Annette King has mentioned, is that it has history. It has managed the portfolio for decades. It knows, literally, where the renovations and the skeletons are buried, and it knows what needs doing. There is nobody better placed than the organisation to advise on its portfolio and the needs therein. Secondly, up until recent times, the corporation had the most contact with its clients. If you had a problem of maintenance or a problem of prioritisation, you would go and see the corporation. Because it had the stock and the client contact, it was best placed to put the two together, come up with a reasonable set of priorities, and get the families that most needed the help into the properties that were most suitable for them. The Government has made that more difficult because instead of going to Housing New Zealand, now the poor families have to go to the Ministry of Social Development or Work and Income. They are already overloaded. They are slapping and packing people through those waiting lists every 5 minutes, and those are the performance indicators that the poor old Work and Income staff are under. They have to move them through. They do not have the expertise or the time to deal with these critical issues of where a family are going to live. The next thing, of course, is that Housing New Zealand has got a local footprint. It has got houses in each area of the country. It knows its stock and it knows the communities the houses are in. Why would you not want the corporation advising on policy issues? Of course, if you are not going to have that, what happens? Well, the first thing is that you do not have contestable policy advice. The Government makes itself more vulnerable to input from the vested commercial interests, the banks that are making a crazy killing off house mortgages, the property investors, and the organisations that represent them. Even the social service providers like the Salvation Army have said: “No, thanks, we don’t want to play this game, because you’re giving us the liability without the assets. We can’t cover it.” The Government cannot get decent advice from them. Let us sum up. By taking away the policy functions, Minister, you have made clients more vulnerable. You are not getting the advice you need to get from the people best placed to give it, who have the history in the organisation, who are close to the clients, who have the deep knowledge of the housing stock that is being managed, and who do not have vested interests that are in conflict with the public good. There is no basis in logic for the clauses we are debating in Part 2. Why are they there? And, more important, why are we here in urgency trying to pass this through all stages without even giving the public the opportunity to make a submission.

Hon Annette King: They’ve been waiting for 4 years, she said.

[continuation line: Cunliffe: It has been 4 years in the waiting]

Hon DAVID CUNLIFFE: It has been 4 years in the waiting. Why is this happening under urgency? The reason is because the Government knows that reasonable New Zealanders do not like this stuff. They do not like this stuff, and so the sooner this is wrapped, packed, under the carpet, and out of the public gaze, the happier the Government spin doctors will be. The Government does not want to hear from New Zealanders. It does not want New Zealanders having a say because it knows that the average, decent Kiwi thinks it is a no-brainer that of course Housing New Zealand should be able to advise on housing issues. Why on earth would it not? Why are these clauses in the bill? Firstly, Minister, if you are really honest in your heart of hearts, it is because you do not want to hear the advice. It is not good advice because the news is all bad. The waiting list is getting longer and longer. The needs are getting greater and greater. Just like Chris Hipkins, Annette King, Ruth Dyson, and Damien O’Connor, my office is overflowing with hard-up Kiwi families who need help.

[Continuation line: Scott Simpson: closure motion]

Part 2 Remedial and other matters

Speech - SCOTT SIMPSON (National—Coromandel)

Dr DAVID CLARK (Labour—Dunedin North): I raise a point of order, Mr Chairperson. I have not had an opportunity in this stage of the debate to make a contribution, and there are some specific clauses that I wish to speak to. What remedy is available to—

Part 2 Remedial and other matters

Speech - SCOTT SIMPSON (National—Coromandel)

The CHAIRPERSON (Hon Chester Borrows): The member may be seated. We had a substantial discussion at the time of the closure motion last time. I am not going to be going through that every time. The member will know that the next clauses we will be debating are very wide ranging and will cover this Part and others. I am fully expecting, and looking forward to, members using the whole gambit of their colourful vocabularies in a seemly matter to have a lively discussion and debate on those clauses. The motion will be put and we will continue with the vote.

[PV on question that the question be put—Ayes 63, Noes 58]

[PV on Part 2—Ayes, 63, Noes 58]

[Continuation line: Clauses 1 and 2: David Clark: Thank you for your advice earlier, I do]

Part 2 Remedial and other matters

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): Thank you for your advice earlier, Mr Chair. I do appreciate it, and I appreciate the opportunity to make a wide-ranging contribution to this debate. I do feel strongly about this, but I will certainly be speaking, though, to one clause in the bill, and that is clause 2, the commencement, and Subpart 3. I wish for the House consider that we change the commencement date to the 1 April 2018. I think that way we could be certain that a Government that cares about State housing and a Government that cares about our most vulnerable will be in Government, and we can have that debate again. We can ensure that this is never implemented. That will be what I will move, and that is for the reasons that I am now about to give. What has happened here with this bill is that we are rushing it through the House without the opportunity for public input. It is a bill deliberately designed to reduce State housing in this country. It is designed to take the Government out of the provision of social housing. As we have heard from many members in this House, the problem with that is that the private market is not delivering the affordable and adequate social housing that is desperately needed in our society. I will give another example that has not been brought up. This is an example of a woman that I met just last weekend on one of my home visits in the suburb of Wakari. I went to visit this woman, and she said she was quite happy for me to tell her story because she feels strongly about this.

Kris Faafoi: Where?

Hon Ruth Dyson: What suburb?

Dr DAVID CLARK: Wakari, in Dunedin. She said to me she is fearful that she will not be allowed to stay in her State house any longer. It is a three-bedroom State house. She is now living on her own, but she uses the other two bedrooms frequently to take care of her grandchildren when her son is called to work at short notice. She has grandchildren who she cares for in that house. She has lived in it for a good chunk of her life because, for one reason and another, she has never had the opportunity or the prospect of affording to buy her own home. She would love to, but she has never been in a position to afford her own home. So the State has said: “Look, we will look out for you. You are a good contributor to our society.” She has always worked, up until recently. She is now unable to find work as she rapidly approaches retirement. She has been made redundant several times. There is just simply not enough work in Dunedin for this woman, who would like to work like she has her whole life in order to keep affording a standard of living that we could call living with dignity. She now tells me she has to save to buy a cup of coffee. She has got a good friend who rings her up every week and says: “Let’s go out for coffee.” She is embarrassed by the fact that she cannot go out every week with that friend because she cannot afford the cup of coffee. When she has paid her insurance, which she does refuse to give up—and she says that that is discretionary—she has only $20 left over every week with which to feed herself. She has an elderly dog that she refuses to give away and that she has cared for for many years. She said: “That dog eats pretty close to $20 worth of dog food a week.” She has got nothing—absolutely nothing—to live off each week. When she goes to get a haircut, her kids donate her money to get it. That is not the kind of living in dignity that we would want for our citizens. That is not the New Zealand I signed up to, where someone who has worked for their whole working life, bar the last few years because they cannot get work, is forced to worry about whether they are going to have a stable place to live and whether they can care for their grandchildren adequately. Even now she is living in a house that is fairly cold, I would have to say, from having visited her. She is a good woman. We need to make sure that in our society there is adequate protection and that people who are in need are looked out for and looked after so they can continue to make a constructive contribution to our society, through the caring of grandchildren, through the voluntary community work that that woman does, and through other means.

[Continuation line: So the point that I want to come back to]

Dr DAVID CLARK

So the point that I want to come back to is that the case for this particular intervention has not been made, because there is a market failure. I mentioned in my earlier contribution the market failure that sees many families who want to get into affordable houses unable to get into them and families who want to provide warm, dry homes for their kids to live in being forced into the private market because of unmet need in the State sector. Those people are in a position where they cannot—they cannot—get what they need out of the private sector. If we had an adequate State housing sector, that would force private sector providers to meet that need at the level that the State housing sector meets it and address that market failure and the unintended consequences we see in the existing market. One thing that I have noticed in all of the legislation that has gone through the House is that there has been a lack—

[Continuation line: Kris Faafoi]

Part 2 Remedial and other matters

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): Thank you very much for a chance to speak on the title and commencement clauses of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. This is one of those stages in the Committee stage where we get to proffer up some alternative titles for the piece of legislation, and I have got a pretty simply one—and just one. It is that we change this to “Social Housing Reform (State House Sell-off) Bill”, because in all reality, that is what this is. It has been a programme over time, since this Government took office, to slowly move back from taking any responsibility for any social housing in New Zealand. I would challenge any member across the other side of the Chamber to take a 5-minute call—none of these 30-second calls that they have been taking—to try to say why this is not a State house sell-off bill.

[Continuation line: That is exactly what this is. Part 2 of this bill]

KRIS FAAFOI

That is exactly what this is. Part 2 of this bill looks at some of the policy advice that Housing New Zealand will no longer offer to the Government. It has been offering lots of advice to the Government over time. This is just some of the advice that Housing New Zealand has offered to the Government about just one cul-de-sac in Porirua. It is not about whether it should upgrade those houses or look at making sure we do more for those communities. It is from Quotable Value. It is about getting those houses ready for sale. There is no plan or advice from Housing New Zealand to replace those houses. I say to anyone in this House who wants to come to Calliope Crescent in Cannons Creek that there is a big swathe of land there that has been empty for about 5 years. When those houses were taken away the Government promised that it would replace them and that that community would flourish again. But nothing has happened. Kids now use the land for games of touch because there is a park there now. This Government should have stuck to its word and replaced those homes that were bowled over. It should put houses there, in order for that community to flourish. But no, there is nothing. There is only one side of this equation that the Government is interested in, and that is getting rid of State homes. It is not interested in replacing them at all, and that is the cold, hard reality of this Government.

Andrew Bayly: Still got 65,000 of them.

KRIS FAAFOI: I can hear some interjections. Those interjections are longer than the speeches that members on that side have taken—longer. So I challenge that member who is interjecting to get up on to his feet. If you are so proud of this piece of legislation, get up and take a call—get up and take a call. I will make another invitation. Come to my area and spend just half a day looking around those areas and see how proud you are of the last 7 years of wrecking the Housing New Zealand sector in this country. As I said in my speech on Part 1, I came to this Parliament to protect and build on some of the opportunities that I was given as a child to make sure that I got to the privileged position that I have today. But on that side of the Chamber they want to keep their privileged position that they have got today for them and their privileged friends. They do not care about the most vulnerable people in our country who are struggling to make ends meet. They have the most simple of rights in this country, and that is to have a good, safe, warm home—a roof over their heads. That is too much for this Government to ask. The Government is glossing it up in the language of flexibility, and it is taking a fair bit of flexibility with the truth. That is the reality of what this Government is doing. Over 7 years it has been slowly pedalling back its responsibilities in social housing. So I do think that this bill should have its title changed, to the Social Housing Reform (State House Sell-off) Bill, because that is all it enables this Government to do. At the very beginning of this plan this Government said that it would be the likes of the Salvation Army that would be interested in purchasing these homes, working in our communities, and making the lives of these people better. Ah, it is not interested. The Salvation Army does not want a bar of it. I have spoken to a local iwi who also have experience in this area. They say it does not make sense for them to do it. So if the market does not work for them, and the market is not working for these vulnerable people, who then does the responsibility fall on, to make sure people get a decent home in New Zealand? It should be the Government. This piece of legislation has this Government washing its hands of this responsibility. Come to Cannons Creek, come to Ascot Park, and come to Titahi Bay where there are vacant Housing New Zealand homes and people desperate to get into them. Government members will not, because they do not care.

[Continuation line: HIPKINS]

Part 2 Remedial and other matters

Speech - CHRIS HIPKINS (Labour—Rimutaka)

CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on the preliminary clauses of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, and a very inappropriately named it is. What they should really call it is the “Social Housing Reform (Wholesale Privatisation) Bill” because that is exactly what this bill is really about. It is about the Government abrogating its responsibilities when it comes to the provision of affordable, quality rental housing to those New Zealanders who are not in a position to buy their own home. It has been a long-held tradition in New Zealand that the State will ensure that its citizens are adequately housed. From the time of the first Labour Government that built so many of the State houses that the National Government is now content to hock off, we have had a tradition in New Zealand that the State will be an active player in the housing area, so that families have a warm, dry home and a roof over their heads. This Government is walking away from that principle. I think of the areas like Pōmare, Trentham, and Naenae where, under this National Government, we have seen houses boarded up and abandoned, only to then be demolished and that land handed over to the private developers. It is not just in my area that that is happening; it is happening up and down the country. I have made it very clear from the beginning of that process that the provision of the ultimate number of social houses—that is, affordable rental houses for people on low incomes—is not decreased. I think it is good that there should be some redevelopment—that there should be some rebuilding. Some of those houses are past their use-by date and need to be replaced. I would not accommodate people in some of those houses. I do not think they are fit for families, and demolishing them and replacing them is good. But it should not be at the expense of the overall number of affordable houses. Reconfiguring those neighbourhoods is the legitimate thing to do, but what is the practical reality we are seeing? In Pōmare there is a good redevelopment happening, but most of those houses are privately owned. Where did those families go, which the National Government booted out? There were some social issues in Pōmare, caused by a very small number of people I have to say. There are a large number of people there who were good law-abiding citizens, just trying to make their way in the world, who got treated very harshly by Housing New Zealand and by the other Government agencies involved in that. But the problems in Pōmare have not gone away just because the houses have been demolished. They have been relocated elsewhere. We are seeing problems emerging in other parts of the electorate, in other parts of the Hutt Valley, where some of the people who were causing the problems in the first place have simply relocated to. The problems did not go away. The Government’s busting up of the Pōmare community in the way that it did did not deal with the issue and it did not deal with the problem. Wholesale privatisation of that social housing market is not going to make any of the problems go away—in fact, it is going to make some of those problems worse. The bill could easily be called the “Social Housing Reform (Increasing Intergenerational Inequality) Bill” because the Government seems to have given up on the notion that future generations of New Zealanders should have the same access to affordable housing, to buy or to rent, that previous generations had. The Government is giving up on that notion altogether. First-home buyers are being shut out. The only solution to giving first-home buyers a bit of additional assistance is to allow them to cash up their retirement savings—more of their retirement savings—to buy their first home. It could be called the “Practical Reality Bypassing Bill” because the Government is now going to be ignoring advice from Housing New Zealand. It is interesting—we could call it the “Abrogation of Responsibility Bill” because, despite the fact that we have now got three Ministers in the Government responsible for social housing, none of them seem to be willing to participate actively in the debate. I do have a technical question regarding clause 2, which covers the superannuation provisions coming into effect on, or basically being backdated from, 1 April 2015. The question I have got is does that mean that people who transferred from a non - KiwiSaver scheme into a KiwiSaver scheme prior to 1 April 2015 will not be eligible, or does it mean that basically, providing they had done it by that point, they would be covered by this provision in the bill? I think it would somewhat thwart the intention, given that most people in KiwiSaver would have joined up before 1 April 2015. It somewhat thwarts the intention of what they are trying to achieve—and I am sure the Minister in the chair will be able to answer. It is a pretty simple, straightforward question I would hope. It seems to me that the idea behind the backdating is that providing someone had done it by that point then they should be eligible. I certainly look forward to having that clarification.

[Continuation line: TWYFORD]

Part 2 Remedial and other matters

Speech - PHIL TWYFORD (Labour—Te Atatū)

PHIL TWYFORD (Labour—Te Atatū): This bill, I think, instead of being called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill, should actually be called the “Flog Off State Housing to the National Party’s Property Developer Mates Bill”. That would be a far more accurate representation of what this bill is about. It is, on the surface, some little sort of vanilla kind of enabling legislation, allowing more flexible purchasing contracts. But actually what this bill is designed to do is to give the Minister extraordinary discretionary powers to do sweetheart deals with property developers.

[Continuation line: Instead of simply, as the current law allows, being]

PHIL TWYFORD

Instead of simply, as the current law allows, being allowed to extend income-related rent subsidies to the people who buy these State houses from the Government, this bill gives the Minister wide-ranging powers to do any kind of deal—to crank up the subsidies, crank them down, or to do away with the subsidies and just agree on direct payments. It gives amazing freedom and discretion to the Minister to do those sweetheart deals. The reason that the National Government is giving itself these powers is that it cannot give these houses away at the moment. It spent months saying that the Salvation Army was going to take them, and that ended in tears when the Salvation Army said: “Sorry, not us.” Paula Bennett, Nick Smith, and Bill English have been travelling up and down the country basically trying to hock off these houses to anyone who will take them, and they are not getting any takers. This bill is about giving the Minister the freedom to do sweetheart deals, or anything it takes, to basically offload billions of dollars’ worth of publicly owned State houses. It could be called the “Cabinet Club Housing Policy Bill” because what is really going on here, at the heart of this policy—when you strip away Paula Bennett’s mealy-mouthed platitudes about social housing—is a massive transfer of wealth from the public to private landlords and property developers. The Government is looking at divesting and flicking off billions of dollars’ worth of State houses that have been paid for by generations of taxpayers and State house tenants—flicking them off at knock-down prices to anybody who will take them. Those houses will then go on to the open market and people will make a killing on those houses. I guarantee that they will end up eventually just simply being rented back to the same people, who need a decent roof over their heads, but this time they will paying higher rents and the taxpayers will make up the difference with a hefty subsidy directly into the pockets of landlords. That is the model that Bill English is pursuing. It is a huge transfer of wealth from the public to private landlords and property developers—that is fundamentally what is going on here. We saw recently, in the New Zealand Herald, reports of how the National Party funded its election campaign last year. The big cheques were made out by property developers. This policy is the big payback—it is the big pay-off. That is what the Cabinet club is all about. It is about giving big business—in this case, property developers and big landlords—the opportunity to put their hands in the public pocket and benefit from billions of dollars’ worth of State housing that generations of New Zealanders have paid for. State housing is not intended to line the pockets of private landlords, as this National Government wants to do, but to put a decent roof over the heads of the most vulnerable New Zealanders. Nothing rankles more with New Zealanders than that basic idea that the reason we have a Government is to make sure that things work for everybody—that every kid in this country gets a decent start in life.

Chris Bishop: Well, we’re raising benefit levels.

PHIL TWYFORD: That is why, Chris Bishop, we invented State housing in the first place. And I know that your party has never had any truck with State housing. You do not like it, you do not believe in it, you do not want to have anything to do with the people who live in State housing because it makes you profoundly uncomfortable. The social and economic system that you stand for does not care what happens to the bottom 20 percent. You do not give a damn about it and you are quite happy—

Tim Macindoe: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Hon Chester Borrows): Point of order—[Interruption] There is a point of order. Sit down when I am on my feet.

Tim Macindoe: I raise a point of order, Mr Chairperson. This member is repeatedly bring you into the debate—[Interruption]

The CHAIRPERSON (Hon Chester Borrows): There is a point of order. There is a point of order and it will be heard in silence. And you can sit there and point and say that he knows he should be sitting down, and so did you, but you did not and he did not, and, you know—what do you think this does for the reputation of this House, for goodness’ sake! Now, I have a point of order from the Government chief whip .

Tim Macindoe: This member is repeatedly bringing you into this debate in manners that are completely inappropriate.

The CHAIRPERSON (Hon Chester Borrows): Carry on.

PHIL TWYFORD: As I was saying, there is one thing that rankles more than anything else with New Zealanders, and that is when the Government dismantles the very systems of social support that are designed to guarantee that every child growing up in this country gets a decent start in life.

[Continuation line: Hon Annette King]

Part 2 Remedial and other matters

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): We are at this stage of the debate, when we are looking at the title of this bill. You have had a number of suggestions as to how we could better entitle this bill. I thought that I would remind the House that it is not that long ago that I think it was the Law Commission, or it might have been the Legislation Advisory Committee, told this House that we must have titles on bills that reflect the intention of that bill. It is very important that we have proper titles on bills so that when the public picks a bill up and they read it, or they see the heading, they know what that bill reflects. I have thought for a long time that that was very good advice to give to any Government when it is bringing in a piece of legislation. It must be a title that reflects the intention of the bill, and I have to say that the title of this bill does not, by any measure, because it is called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. You have got to go to the first word—that is, “Reform”.

[Continuation line: “Reform”—what does “reform” mean?]

Hon ANNETTE KING

“Reform”—what does “Reform” mean? It implies improvement—it implies improvement. We are being told that these reforms are improvements, but no evidence has been given in this debate for improvement. No research, no evaluation, and no reports have been given by anybody that this is an improvement in social housing in New Zealand. I would liked just one bit of evidence that this measure has been looked at properly, but instead we are going to push it through under urgency—even though part of it has been done for 4 years—and no evaluation, and no input from the public, has been held. So how do we know that this reform is going to be an improvement? That word should be removed from the title of the bill, because that is what it implies. Then the next words are “Flexible Purchasing”. Well, everybody knows what that means, so why not just say what it is? It is the sell-off of State houses to other organisations, but, no, not to community groups. That was the intention when the Government had its regulatory impact statement done, with a little bit of consultation with the community sector, and published it back in March. That was the intention, but what happened in the meantime? Campbell Roberts, who I think is one of the most respected people in the Salvation Army, came out and said: “No, we can’t participate in this great social housing reform flexible arrangement. We can’t participate because we cannot afford to buy the houses, because we would be in debt for 10 years and we would have to change what our philosophy and our approach is in terms of the provision of services by the Salvation Army.” It is there to help protect and lift up the most vulnerable in our community, and it told us that if its money and its attention had to go into buying houses under this community housing project, it could not stick to its core values, philosophy, and principles in terms of providing those services. So the Salvation Army pulled out, but the problem was that you had the Minister of Finance and the Prime Minister going around New Zealand telling New Zealanders: “This is a great policy because the Salvation Army will take the houses. It will be part of the flexible purchasing arrangement.”, and that fell flat on its face. We do not now know who the flexible purchasers are going to be in the community sector, because we do not know of any, and neither does the Government. But what we do know is that there are flexible purchasers out there who are very, very interested in buying up State houses cheaply. I have to say that my colleague Phil Twyford is correct—they are property developers. If the members opposite—and I understand that many of them are new constituency members, so maybe they have not had so much contact with their constituents at this stage, or maybe they do not have many State houses in their electorates—go out and look, they will see that State houses are already being sold off to property developers at knock-down prices. There are plenty of examples. Go out and look. State houses sold to property developers at knock-down prices—how does that improve—

[Continuation line: Hon David Cunliffe]

Part 2 Remedial and other matters

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

Hon DAVID CUNLIFFE (Labour—New Lynn): It is a great opportunity in this stage of the debate to draw together the themes of what is in and what is not in this bill. We have got the date of commencement and we have got the title, which is an opportunity for us to pull these themes together. My colleague Chris Hipkins mentioned the proposal for a commencement date that postdates the next election. If the Government had a shred of honour, given that it is removing from the New Zealand people the opportunity to make submissions on this bill and have it go through a select committee, and that it is simply ramming it through under Budget urgency, and if it had the courage of its convictions, it should commence the bill after the next election so that New Zealanders can vote on it and cast their votes on whether they think Housing New Zealand should be a provider of social housing to New Zealanders who need it or whether it should be just another commercial landlord. This is a bill that could have so many names—part of the panic button for this, its seventh fiscal deficit Budget. So perhaps it could be the “Housing (Broken Promises) Bill”. Perhaps it could be the “Housing (Give With One Hand and Take Away With The Other) Bill” Perhaps it could be the “Housing (No Surplus Again This Year) Bill”. Those themes are all common parlance, common knowledge, amongst New Zealanders who are sighing with sighs of resignation because they have given up on this Government. They have given up on the Government having a new idea or a vision or a strategy for growing jobs and growing incomes, for making life fairer or easier for those New Zealanders who just do not have enough to get by. My colleagues, God bless them, who do the hard work that members opposite seem too hard to find time to do, are working with families week in week out who are living in cars, who are living overcrowded with three and four families in one modest three-bedroom Housing New Zealand home, living in garages, children not being able to go to school properly or being shunted from school to school—and the cost of all of that, if you do not have a decent roof over your head is measured in broken lives and underachievement and our country being the poorer for it. So the Government is, essentially, stealing from the future to do a cheaper, nasty job of today. Sadly, this bill is part of that cheap and nasty New Zealand. It is cheapening it. It is cheapening it by taking what was part of the envy of the world, our comprehensive welfare state, and it is carving it up and it is throwing it over to private property developers. Members opposite might smirk. Who knows, maybe some of them might be getting a cut or maybe the party is getting a cut from some of those wealthy, wealthy property interests that lobby the Government uphill and down dale. Maybe that is the source of the smirking that is going on by members opposite. But I tell you what. There is no smirking going on in West Auckland, where people are crowded into unacceptable, damp, overcrowded houses and the waiting list is getting longer and longer. What New Zealanders are saying to us now is that it is just too hard. The only people getting a Housing New Zealand home are people who are mental health consumers, long-term invalids, or some very few who have been in extreme poverty for years and years and years. You know, how often is it now that you are in a major city and you walk down the street, and there is someone sleeping rough on the sidewalk? I remember when I came into this House around 20 years ago, you would not see that. You would not see much of it under a Labour-led Government either. We used to look at places like America where people sleep rough often, and we used to look down our noses and say that it would never happen in New Zealand. Well, it is happening now—gutting Housing New Zealand from being a social housing provider to becoming a commercial landlord. Members opposite can smirk all they like, but the New Zealand public will have their say at the next election because they damn well know what it means. It means more for the people who have already got a lot and more hardship for the people who are already doing it tough, and they have had a gutsful of it, a bloody gutsful. So members opposite, smirk all you like. Carve up Housing New Zealand, throw away the welfare state, give up on the ideal that Jack is as good as his master, and the New Zealand public—[Interruption] Yes I know, throw Joh n Campbell off prime time while you are at it. Make sure that every major news outlet is staffed by Government-friendly journalists and that will prolong your miserable life in Government not much, because New Zealanders do not like to be told what to do. They will have their revenge at the ballot box.

[Continuation line: Hon Phil Goff]

Part 2 Remedial and other matters

Speech - Hon PHIL GOFF (Labour—Mt Roskill)

Hon PHIL GOFF (Labour—Mt Roskill): This bill cannot possibly go through under the title that is set out in clause 1 of the bill. The title that it is given is the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. We have all gone to school. We know what the word “reform” means. It means to make better, to improve, to make more effective, to make more capable of delivering the results that ordinary working families need. There is not a member in this Committee, not even a member on that side of the Chamber, who believes for a moment that this bill carries out that purpose. It is a total misrepresentation. God knows that this House does need a social housing reform bill. I just want to take 1 minute of your time to read out this commentary, which I picked from one of my local papers. It is actually from the electorate for the member for Hunua. This commentator talks about “desperate families, two sometimes three families sharing a small house, usually in South Auckland, with the kids suffering from inadequate food, poor clothing, and often-poor health, a direct result of over-crowding and rents consuming half of an average wage.” Do you know who that commentator was? Do you know who it was? It was Don Brash. That is what Don Brash the one-time leader of the National Party and the one-time leader of the ACT Party is saying in a publication in Andrew Bayly’s electorate. That is from just 2 weeks ago. I happen to agree with Don Brash in his description of the housing crisis that faces New Zealanders at the moment—a housing crisis that for the first time does not affect just the people at the bottom of the heap, this is a housing crisis that affects a lot of ordinary working New Zealanders who desperately hoped in this Budget and in legislation under this sort of title that they might have been given a decent break to get a decent roof over their heads and to bring their kids up with a chance in life. But what we have seen is rents going up six times the rate of inflation in the last year in the city of Auckland—six times the rate of inflation. Rents have gone up on average by $1,300 a year in Auckland in the last year—by $25 a week. It would take up the whole of the extra benefit given to vulnerable families who are on a benefit, and it is affecting other New Zealanders as well. The price of a house in Auckland went up by $103,000 last year—in 1 year, by $103,000. That is a 15 percent rise and that is putting pressure on those who are renting. People cannot afford to buy their own home and those who would normally have been able to afford to buy their own home are now competing with the most vulnerable for the rental housing that is available. A social housing reform bill would have addressed the problems of a housing shortage and housing affordability in Auckland, which is now reaching crisis proportions. The National Party may have its head down, but even its former leader Don Brash spoke the truth about the nature of that crisis. So what have we got from this bill that will help? Is this bill, and its title, about the Government stepping up to meet its responsibility? No, it is about the Government opting out of its responsibility by facilitating the selling off of social housing to the private sector. It has cut social housing—1,600 fewer State houses in its last term in Government—and now it is selling off a couple of thousand not to the Salvation Army, which Bill English used to talk about, the lovely Salvation Army that would look after people, but to private developers and to private landlords. That does not solve the housing crisis. This is not a social housing reform bill; it is a bill to privatise social housing, to gut Housing New Zealand and its ability to do the job that our forebears 80 years ago in this House set up, which was to provide State housing so that every child in New Zealand had the chance for a decent life because they had a stable, secure, affordable home—warm and healthy—to enable them to have good health, good education, and a better life. That is what reform is about. This bill does the opposite.

Part 2 Remedial and other matters

Speech - Hon PHIL GOFF (Labour—Mt Roskill)

The CHAIRPERSON (Hon Chester Borrows): No. The time has come to suspend the Committee for the lunch break. The Committee will resume at 2 p.m.

Sitting suspended from 1 p.m. to 2 p.m.

Part 2 Remedial and other matters

Speech - Hon DAVID PARKER (Labour)

Hon DAVID PARKER (Labour): I would like to speak to the title of this bill, which is named the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Before I come to why I think it is misnamed, I want to just recap the main features of the existing housing crisis in New Zealand. First of all, we have got the lowest rate of homeownership in over 50 years in the private ownership market. Secondly, we have got the highest prices for houses ever in New Zealand. Thirdly, those prices are amongst the highest in relation to income as they are in any part of the world. Fourthly, the Government has already sold off thousands of rental houses. Fifthly, we have got poor-quality rental stock around the country—in Auckland, but also in the provinces—because we have got no minimum standard of housing. And yet this bill does away with the advice function of the ministry. I want to address where this leads—in particular, in one little subsection of housing. When you have such high housing need and no place for people to stay, you not only get an increase in homeless people; you get people staying in substandard accommodation. We are now actually seeing middle-class people who used to be insulated from this sort of thing are now, if they suffer a family breakup, for example—I know of people, and I did not know people in this situation a few years ago—having to move in with their child into another house and share a bedroom. These are middle-class people. These are not the lowest-income people. The person I am referring, whom I will not name, is in full-time work, but he is in that situation with one of his children. Even further down the tree, the people who are even less well-off get forced into even less desirable situations—namely caravan parks. I want to just reflect on where this is heading in New Zealand. We have more people than ever living in caravans and caravan parks. I came across this article in respect of where it has got to in the United States, because this is the path that we are on currently with all of those factors I have talked about. It is in the Guardian Weekly of 15 May, just this month. It says that America’s poverty trap is offering up sharp profit margins for private landlords. I hope people in here are shocked by this. This article says that the number of people who are living in caravan parks in the United States—and their problems have been growing for longer than ours in this regard—how many people do you think are living in caravan parks in America? Have a guess. One million?

Dr Megan Woods: One million.

Hon DAVID PARKER: One million—an enormous number of people. You would think that is right, would you not? Do you know that the answer is 20 million people? Six percent of the American population now lives in caravan parks. It has become a big industry for the big end of town. They do not even own their caravan in their caravan park. Six percent of all Americans now live in caravan parks. I would hope that the housing officials who are sitting there looking at this would be ashamed of their bosses who are forcing this legislation through the House to say that the officials cannot give advice about that being where this trend ends in New Zealand. That is why this bill should be named something different to it being about remedying social housing problems—it actually makes them worse. It should be about the trend towards caravans, because that is what is happening in New Zealand. Paula Bennett, who should hang her face in shame in this Chamber, refers people to the local caravan park in west Auckland. In west Auckland and south Auckland the camping grounds are bulging at the seams because New Zealanders—some of them in work—have to live in camping grounds. Under this Government we are going down the same path that America has, where it has now got 20 million people living in caravan parks in one of the wealthiest countries in the world. And we are one of the wealthiest countries in the world too, and we have got increasing numbers of people living in cars, sharing houses, living in camping grounds, or being completely homeless. This bill will make it worse, because it allows the Government to abrogate its responsibility, to escape income-based tenancies and State houses because it can sell them all off and move them to some other function that is not properly funded. And who will make more money? Again, the big end of town. Who makes money out of all these trailer parks and the misery in America? The owners of the trailer parks. How many people are affected in America? Six percent of its population. This legislation should be called the “Housing (Promotion of Caravan Parks as a Band-aid) Bill”.

[Continuation line: Denis O’Rourke]

Part 2 Remedial and other matters

Speech - DENIS O'ROURKE (NZ First)

DENIS O'ROURKE (NZ First): This bill needs a very serious title, I think, because it is a pretty serious issue that it covers. I think we should take it seriously, and I believe that the title needs to be actually a lot longer, even though it is quite a long title already. In particular, it must be descriptive of the content of what is in the bill. So I would like to propose a more accurate title. It will be a bit longer, but I think it will be worth the extra words. It would be the “Measures to Make the National-led Government’s Appalling Record on Housing Reform Since 2008 Even Worse Bill”, because I think that is actually fundamentally what this bill does. And it could be longer, of course, because there are other things in it that show how bad this legislation is. For example, it could reduce to measures to reduce housing stock in New Zealand, because that is one of the most obvious effects of this particular piece of legislation and the principal Act that it amends. Secondly, it could refer to encouraging higher rents and house prices, because that is also what it does, and it is, of course, for the benefit of selected private housing providers and nobody else in the community. Rentals are far, far too high already, and the rate of increase is far too great. Thirdly, it could refer to a failure by this Government to improve rental house quality over the 7 years it has so far been in power. The quality of rental homes has not improved. Little or nothing is being done about that, and this bill fails to address it. So the title could also be, as another alternative for example, the “Measures to Reduce Rental Housing Stock, Increase Rents, and Ensure No Improvement in Private Rental Home Quality Bill”, because that would also be a very descriptive title for this legislation. Another alternative might be the “Housing (Weasel Words) Bill”, because I do not think I have ever heard so many weasel words in a piece of legislation itself and in the descriptions around it. I want to refer to just three of them. First of all is the term “housing independence”. What does that really mean? “Housing independence” really means abandoned to the rigours of a dysfunctional rental market. That is actually what we are talking about when the Government refers to housing independence. Another word that is often used in relation to this bill is “flexibility”. I think that really means that Ministers, through their excessive powers given to them in this bill to give directions, will be empowered to do dodgy deals behind closed doors with a variety of housing providers. The third—

The CHAIRPERSON (Hon Trevor Mallard): Order! I am sorry—[Interruption] It is my responsibility at look at you.

Jacinda Ardern: I was blocking the view.

DENIS O'ROURKE: OK. The third term is “tailored contract”. I think that what that means is that some will get privileges and provisions that others will not get. There will be no transparency and there will not be a level playing field, so I do not think that is a particularly good term to use either, and yet it is one that is bandied about the Chamber without any real attempt to define what it is. Finally, another possible title for this bill could be the “Suppression of Housing Demand Bill”, because that is the whole thrust of both the principal Act and this amendment to it. The suppression of housing demand really means pushing people out of State houses who should not be pushed or bullied out of State housing. In fact, many such people should actually be encouraged into State housing as a good, secure housing solution for them. It will make it too hard in the future for people to get a State house. That has been a problem for a long time. This legislation will make it worse. So I have suggested at least three ways in which the title to this bill could be improved, and I would be happy to support a change to any one of them.

[Continuation line: Ruth Dyson]

Part 2 Remedial and other matters

Speech - Hon RUTH DYSON (Labour—Port Hills)

Hon RUTH DYSON (Labour—Port Hills): Can I first of all commend you, Mr Chairman, on your choice of giving the call to me against my colleague, who has been competing for it longer than I have, actually, and may not be too popular with you later on. It is good to be able to have an opportunity to speak to the title and commencement of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill . I listened with interest to Denis O’Rourke from New Zealand First , who just made a very substantive contribution. It is in keeping with the style of the debate on the title and the commencement of bills, that we talk about alternative names that they could be called. He quite correctly pointed out that the purpose of this legislation is to continue what the National Government has been doing by stealth, which is the selling off—hocking off—of State houses to the private sector. Not so that we can have better provision of affordable houses, not so that we can have more affordable houses, but just solely so the Government can get out of that social housing provision and, you know, presumably spend less on supporting vulnerable families. I commend Denis O’Rourke’s recommendations in terms of the way that the name of this bill could be changed. But actually, if you look at the actual name of the bill, “Flexible Purchasing and Remedial Matters”—who on earth would know what that means, anyway? “Flexible purchasing”, to the National backbenchers who are going to put their names on the public record alongside this bill selling off State housing—I am sure they have not read it. It is quite obvious that the National Government got to its caucus before the Budget , and they were briefed and were told that this was all about flexible purchasing and remedial matters. They would not have asked. None of them would have had the courage to ask the Minister what it actually meant and what they were going to be voting on and putting their names beside. So even though I agree with Mr O’Rourke and other colleagues who have spoken about changing the name, the title is actually so meaningless that I do not know if it would even matter. But if we want to say what this bill actually does, then we should be much more honest. The spin around the media that has been associated with this legislation is quite extraordinary. The term “moving to housing independence”, which, presumably, in this conservative model that John Key is now promoting—conservative-compassionate model that he is now promoting—presumably, that means something.

Phil Twyford: Being thrown out on the street is what it means.

Hon RUTH DYSON: Actually, Mr Twyford is right. What it does mean for many people in State houses is, quite literally, that they lose their home. It is not just a house that they happen to go to after work, after school, every day. It is their home. It might not be as flash as the Parnell mansion, but, actually, people have a very strong attachment to their home, and people in State houses have every right to maintain that attachment, unless we are offering them a better opportunity. Moving to housing independence by telling people that they no longer have the tenancy rights of a State house and they have to go into the private market is not offering them a better choice, but that is all that Paula Bennett and Bill English are offering them. Prior to the lunch adjournment I listened to some of my colleagues speaking, and I was actually pretty dismayed at the sniggers and sneers that came from members of the National Party backbench. When David Clark was talking about a friend of his who was no longer able to afford to have her hair cut on a regular basis, and her children were paying for that—the rent had gone up to such a point that she did not have any spare money at all—and they were sniggering about that. David Clark also said: “That is not the New Zealand that I signed up to”, and I want to totally endorse those comments. When we are talking about what values we have as a society, what is important to us, what makes us proud to be New Zealanders, then it has always been, for me, that we do have an egalitarian society, we do have people who are respected regardless of their level of wealth or income, people who are considered as part of the community, people who have a stable home to call their own—whether they rent it or own it. They are still contributing members of our community. This bill is another step away from that vision, away from that respect of individuals, away from the ability of New Zealanders to be able to afford to live in a home, because the Government thinks that subsidising their rent is a priority.

[Continuation line: Jono Naylor moves; Adrian Rurawhe]

Part 2 Remedial and other matters

Speech - JONO NAYLOR (National)

The CHAIRPERSON (Hon Trevor Mallard): No, this bill has not been to a select committee, and it is a very serious bill. And therefore I think all latitude will be taken at this stage of it.

Part 2 Remedial and other matters

Speech - JONO NAYLOR (National)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Speaking to the title of this bill: in the title of the bill it has the words “flexible purchasing”. I just want to say that when you have a purchaser, you also have a seller. And the seller, in this instance, is the Government , is the State . So I think that instead of having the word “purchasing”, the name of this bill ought to be “Social Housing Reform (Transfer of State Assets) Bill”, or “The Sale of State Assets”. By the Government not using the word “sale” and using the word “purchasing” instead, it gives a different slant from the public perception, I believe. Over the last few years we have had a number of debates about the sale of State assets. Changing the terminology now, in this instance, to have a bill that talks about flexible purchasing does not address the issue that this is a mechanism, a provision, for the Government to be able to sell State assets. The general public ought to have the opportunity to have their input, and they have not had the input in this instance. And so I stand here to suggest that the name of this bill should be changed, and that the Act of Parliament , if this bill is passed, should actually be “Social Housing Reform (The Transfer of State Assets) Act”. I could equally say that it is the transfer of social housing responsibility as well, because the transfer of these houses to non-Government organisations, to property developers, also hands over the responsibility of social housing to those agencies. That is not right. It is not right, because under the intent of what social housing was meant to be all about—helping those families who are most in need. One of the things that I am really concerned about is the length of time. Once these transactions are made, how long does the responsibility of social housing afforded to the non-Government organisations last for? Is it 1 year, 2 years? After 2 years can they stop their responsibility of providing those houses as social houses, and then sell them on the open market at prices that, no doubt, those people who occupy those homes will not be able to afford? That is a big concern for me, because then, at that point, they stop being social houses. In this bill we do not know when that will be, because it is entirely up to the Minister’s discretion as to how and when that would happen, if at all. We just do not know. These are the kinds of things that could be fleshed out in an open process like the select committee process, where people have the opportunity to come and have their say on this particular issue. The title bears little resemblance, in my opinion, to what the final outcome and effect of this bill would be on social housing. And so my suggestion is that the Minister should reassess this particular issue. And I agree with the sentiments that other contributors have made to the Committee on this particular matter, the title of the bill: it does not, I believe, give a fair reflection of the content of the bill itself.

[Continuation line: Here is one other issue, and it is around Māori housing]

ADRIAN RURAWHE

Here is one other issue, and it is around Māori housing. I have read this bill very carefully and there is nothing in here that suggests to me that there is any way that the Government is upholding its Treaty obligations and providing and addressing the—

Part 2 Remedial and other matters

Speech - JONO NAYLOR (National)

The CHAIRPERSON (Hon Trevor Mallard): No, I made it clear last time. I am not ready to accept the closure motion.

[Continuation line: Dr Megan Woods]

Part 2 Remedial and other matters

Speech - Dr MEGAN WOODS (Labour—Wigram)

Dr MEGAN WOODS (Labour—Wigram): It is good to be able to take a final Committee stage call, one of many in this debate, but on the title and commencement clauses, because, Mr Chairman, as you yourself alluded to, this is a piece of legislation that is going through under urgency. It it is the job of this Committee to ask questions and it is the job of the Government and the Minister in the chair to answer those questions when those questions are put in this Chamber. That is what we are elected to do and it is what we are paid to do. I would actually like to hear from some Government members, and have them get on their legs and actually examine the legislation that is under question. In regard to the title clause of this piece of legislation, I have some questions for the Minister in the chair. The legislation is entitled the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill . Well, I would like the Minister to direct me to the parts of this legislation that are going to act in a remedial way for the current housing situation that we face. I have read this legislation. My colleague the Hon Ruth Dyson suggested some reading for Opposition members. She suggested they start with the bill, because it clearly was not on their reading list of things that they had examined before they came to the Committee for this debate. But I have read this legislation and I cannot see anything that is going to be remediating in terms of the housing situation. My other colleague the Hon Annette King, in her earlier contribution on the title clause, drew the Committee’s attention to the advice of the Law Commission —that we actually do title bills in plain English ways and that the titles reflect what it is that a bill is doing. I cannot find anything in here that is going to address the very real concern that the Hon David Parker talked about, in terms of the trend we are seeing towards camping grounds in New Zealand, with the ultimate outcome being the United States having 6 percent. Whereas for Christchurch, in terms of this—and I would like to know what is in here for a city that is facing a very particular set of housing circumstances—what are the remedial measures in this piece of legislation? We actually have a situation in Christchurch where some of the homelessness is caused by the fact that a number of our camping grounds, where people were previously being directed, have now been converted to workers’ accommodations. Rather than being places where people who are under housing pressures can go, this is where our housing rebuild workers are going, and that is putting further pressure on it. I would like to know what clauses in this bill are going to be remedial for the constituents who I am seeing in my office. I want to know what clauses in this bill are going to be remedial matters, in terms of social housing, for my constituent who was threatened with eviction from her Housing New Zealand house in Hoon Hay because in 2 years after the February 2011 earthquakes, she had her daughter and her 3-month-old granddaughter living in a caravan on the property of her Housing New Zealand house. Housing New Zealand tried to evict her because it said it was not right for her to have a caravan on that property. It was prepared to see this whole extended family, who were under extreme housing pressure, to be in a situation where housing was something that was simply beyond their reach. I want to know what clauses in this bill that the title purports to propose for remedial matters are going to do for that family. I want to know what remedial matters are in this piece of legislation for a constituent of mine who is currently in emergency temporary accommodation, and because she is classed as being in emergency temporary accommodation, the district health board will not proceed with her hip replacement surgery, because they do not consider that she has a safe place to go back to once that surgery is completed. I have not seen anything in this legislation that will do anything to remediate those situations. We have had other Ministers who have sat in that chair through earlier stages of this bill who have waxed lyrical about how this is going to be the panacea for housing. But we are still struggling. I would like the Minister to get up on her legs to address these questions, to tell the Committee that this is a Committee stage of this bill where it is the job of Parliament to ask questions of the legislation. We would like some answers to those questions. How is it that this Government thinks it can bring a piece of legislation called the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill to the House when there are no remedial matters in the bill? Many of my colleagues have suggested alternative titles for the bill. Another one of my colleagues the Hon Ruth Dyson has herself also drawn the attention—

[Continuation line: Jacinda Ardern]

Part 2 Remedial and other matters

Speech - JACINDA ARDERN (Labour)

JACINDA ARDERN (Labour): I want to speak directly to the title of the bill rather than the commencement clause. For those in the gallery who are listening, when we come to this stage of a debate, it is always the time in which we have the ability to rename a bill if we feel that it is not fitting of the content of the bill or what the bill intends to ultimately achieve. An area that I think probably warrants a bit more discussion, and the title that I think is more appropriate for this bill because of it, is the area of Housing New Zealand being further gutted, which is a consequence of this bill. So I would propose that the bill be retitled “The Death Nail to Housing New Zealand”, because as Phil Twyford has pointed out, although some time ago Housing New Zealand lost the substantive parts of its role, this bill actually removes any role that involves Housing New Zealand in giving policy advice, direction, research, or information to the Minister. In fact, in subpart 2 , clause 20 , it repeals section 3B . The effect of the repeal is that Housing New Zealand no longer has an objective to provide advice and information on housing to the Minister of Social Housing . Housing New Zealand no longer has any role in saying to the Government that we have a housing shortfall—a social housing shortfall—a homelessness issue, a gap in the market. That is no longer its job. I would have to say that any official worth their salt within Housing New Zealand probably would not want to claim that they have got that job right now, given the response from the Government, because it has been particularly inadequate. In areas like Auckland we have got house prices going up in the last year by $100,000. There have been 40,000 people who have moved into Auckland in the last year alone. We simply are not keeping up with demand and that is having a flow-down effect into our social housing market. People are unable to access homes. When you have groups like the Salvation Army come and tell you that it has had new mothers leave the hospital with a newborn child and sleep in the car because they cannot access housing, you know you have an absolutely critical situation. We have a Government department that no longer has a job of telling the Government that there is a problem or its solutions on how to fix it. So this bill is not just about the sell-down of Housing New Zealand; it is about the fact that Housing New Zealand itself has been gutted. It is essentially the Government version of Quinovic. That is what Housing New Zealand is. It is now simply property managers, and we on this side of the Committee feel extreme frustration about that. As I have also said, I do see that this is a bill that will exacerbate the problem in the social housing area. In my mind I think that to capture that calling, probably something like the “Continuation of Homelessness Bill” would be a more appropriate title. Any bill around social housing should include some kind of provision to grow your social housing stock. Labour has always said that we have no problem with there being the NGO sector involved in social housing, but it is incumbent on the State that you do not abdicate your responsibility for the provision of housing—

Chris Bishop: We are growing it.

JACINDA ARDERN: —and that is what this Government has done. The member on that side of the Chamber tries to claim that they are growing State housing. Let me just tell you, in the 1990s you sold 13,000 of them, so you had quite a bit of ground to make up there. But, equally, Mr Bishop, in my area of central Auckland, with regard to the Auckland Unitary Plan , in the submission from Housing New Zealand, it engaged Beca Group to do an enormous amount of work where every single Housing New Zealand house in the Auckland area was submitted to the council that they should have removed any covenants that lay on them. If the house was an historic home, it asked for it to be removed as a character home. If there were any blocks on whether or not they could build up, Beca Group asked that that be removed. Why?

[Continuation line: Why would they have done that?]

JACINDA ARDERN

Why would they have done that? Because it makes it much more profitable to sell it to a housing developer if it has no restriction on the way they are able to develop the land. The intent is to sell—absolutely—and that is not just me speculating, Mr Bishop; that is what is happening. In that area Housing New Zealand is selling stock as fast as it can. The one, at least, that we have been able to stop is Spring Street, and it proves the lunacy of what is going on in the social housing area. Spring Street is one of the few areas where we still have pensioner housing. Housing New Zealand proposed selling it to a private developer so it could lease back units. That is absolutely farcical, and yet this is what this bill is going to deliver us—more sales to private developers for no gain.

[continuation line David Shearer]

Part 2 Remedial and other matters

Speech - DAVID SHEARER (Labour — Mt Albert)

DAVID SHEARER (Labour—Mt Albert): I am concerned too that the bill here is inappropriately named. It really should be called the “Social Housing Rip-off Bill”, because that is effectively what it is. It does not in any way reflect what this Government intends to do with the social housing sector, which is to gut it. This has been on the agenda of National Governments for generations, and it does not stop here. We know what is going to happen. We saw what happened when the Salvation Army just the other day pulled out of the Government’s plan to push that social housing towards it. The Salvation Army did the sums and it recognised that it was unable to run a social housing sector. This Government wants to push it on them in the way it has done it in Australia, except that what the Government has not calculated in comparison with the Australian model is that it is much, much bigger. The social housing providers in Australia are looking after tens or even hundreds of thousands of people, whereas here it is much more embryonic. It cannot scale up to that sort of impact. So we are sitting here under urgency, pushing through a bill on social housing that will radically reform and change social housing in New Zealand, and we are doing it under urgency because the Government does not want those social agencies to come before a select committee and actually talk about what the real issues are and what is actually going to happen should this bill go through. So this is the best way of making sure that the public are kept in the dark and that everybody else out there is kept in the dark about what the Government’s real agenda is, which is to make sure that social housing is radically transformed from what we see today. What we are going to be seeing instead is that those social providers will not be able to cope with what the Government is wanting them to do. We will see a siloing effect within those community providers as well, where we will not have the overview that we have today. But, more important, we will see many of these houses begin to drift into the private sector to benefit private landlords. If there is one amazing trend of the last few years under this Government, both with the housing crisis in Auckland and what is going to happen here, it is the enrichment of private landlords. The few are getting richer and the rest of them cannot afford to get into a house. That is what is happening, and will happen, with this process here in this bill. This bill is wrongly named. It cannot be called the “Remedial Housing”—or whatever the hell it is supposed to be. It is the “Social Housing Rip-off Bill” because that is effectively what it is. It is putting private landlords and private home owners before the rest of New Zealand. We have seen that all around. I have certainly seen it in my electorate. I have seen it all around the electorates where there are high proportions of social housing. We are seeing families and communities being disrupted because people are moving around after being turfed out of their house. Kids going to school are changing schools over and over. Many, many schools have 25 percent or 30 percent churn. Kids cannot learn. It is disrupting communities. It is hindering kids and their education, and, most important, it is ripping New Zealanders off. It is making sure that instead of helping New Zealanders who need it, private landlords are going to be enriched. Certainly, the latest round of changes that have occurred to try to curb the housing crisis in Auckland are benefiting the private landlords. First-home owners are not getting a look in. People who need social housing are not getting a look in. This bill is dismembering and ensuring that those people who really need help are pushed to one side and the few, the rich few, who put the money into the coffers of that party over there, are the people who are being enriched and being favoured above the others. That is totally unfair, and that is why the Labour Party is absolutely in in opposition to this bill.

[continuation line: Hon Annette King]

Part 2 Remedial and other matters

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): The reason why I want to take a call in this debate on the title is that this debate today is the only chance this House has to examine this bill, to scrutinise this bill. It is the only chance New Zealand has to have this bill scrutinised by eyes other than the Government’s. That is why we are taking this debate so seriously. We are looking at each part of the bill and doing our job on behalf of the taxpayers of New Zealand, because this Government would not let this bill, which has nothing urgent in it at all, go to a select committee. So I think we need to go step by step, whatever time it takes, to make sure that at the end of this process the people of New Zealand know that we did a good day’s work—maybe 2 days’ work; it could be 3 days’ work—examining this legislation because the lazy Government opposite would not send it to a select committee. The best speech they have made all day is “I move that the question be now put.” That is the speech from Government members on this very important bill that we have before us. I have some information to bring to this Chamber. We are talking about social housing—that is what is in the title of this bill, and it is about the flexibility that is going to come from this social housing reform. We have been told that we need this bill—this social housing reform bill—because it is going to make changes in the way that community housing is provided. So what, I thought, do the community housing people themselves think about this bill? Well, they have just put out a press statement about this bill. They have said this: “The community housing organisations say the Government’s Budget initiatives on housing are too timid and won’t deliver the results that are needed.” These are the very groups the Government, it says, wants to hand over community housing to. They said: “We hear loud and clear that the Government intends to transfer some Housing New Zealand properties for use as ongoing social housing run by the community housing sector.” They then said: “What the sector is trying to communicate equally clearly is that the better future is one where those properties can be regenerated, made fit for purpose, and deliver a whole range of better community outcomes, not just put a new landlord in place.” Say yes now, Mr Bishop. So they do not want to just see a new landlord put in place. They also ask what the Government is doing for the regions. They said there was an urgent need to look at the accommodation supplement, which currently costs the Government $1.1 billion and is in urgent need of review and adjustment—and they go on. So I suggest, members, that you turn on your iPads, and have a look and see what the latest reports are from the very groups that are supposed to be the beneficiaries of this social housing reform. As I said before, the word “reform” indicates that it is supposed to be something that is an improvement, and what we are hearing from the community housing sector is they do not see it as an improvement. So this bill is not properly named, and I am sure that those who have been in this House for a while will know how important it is to correctly name a bill. We have been warned many times that we ought to name bills correctly.

[continuation line: Let us listen to the only submission we have received]

Hon ANNETTE KING

Let us listen to the only submission that we have received on this bill and that has come in right now from the umbrella group Community Housing Aotearoa. That is the only submission we have got. They are not allowed to make one, so they have put out a press statement. I have read out to the members opposite what that group thinks about this bill. Well, if that group counts for anything, the National Party would be pulling this bill and saying “Let’s send it to a select committee and hear the submissions from New Zealanders, maybe even a tenant or two.” Heaven help us that they should be allowed a voice when it comes to community housing. You see, the Minister for Social Housing blew it yesterday when she told us what tenants are thought of and called by the National Party. Do you know what they are called? They are not called tenants or people; they are called cohorts. She said: “We are talking about cohorts.”, and she was not calling them tenants or people. That really is an indication of how out of touch the party opposite is when it comes to social housing.

Part 2 Remedial and other matters

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

The CHAIRPERSON (Hon Trevor Mallard): I think we are in the position now where the Committee can make a decision as to whether it wants to move to a vote. The question is that the question be now put.

[PV on closure motion, clauses 1 and 2—Ayes 63, Noes 57]

Part 2 Remedial and other matters

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon JO GOODHEW (Minister for the Community and Voluntary Sector) on behalf of the Minister for Social Housing: I move, That the Committee divide the bill into the Housing Restructuring and Tenancy Matters (Social Housing Reform) Bill, the Taxation (Social Housing Reform) Bill, the Housing Corporation (Social Housing Reform) Amendment Bill, and the KiwiSaver (HomeStart) Amendment Bill, divided into Housing Restructuring and Tenancy Matters (Social Housing Reform) Bill, Taxation (Social Housing Reform) Bill, Housing Corporation (Social Housing Reform) Amendment Bill, KiwiSaver (HomeStart) Amendment Bill, pursuant to Supplementary Order Paper 78.

[PV on motion to divide bill—Ayes 76, Noes 44]

Motion agreed to.

House resumed.

Bill reported without amendment.

Part 2 Remedial and other matters

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

The CHAIRPERSON (Hon Trevor Mallard): I move, That the report be adopted.

[PV on motion to adopt report—Ayes 63, Noes 57]

Report adopted.

[Continuation line: Third readings]

Third Readings

Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill

Hon JO GOODHEW (Minister for the Community and Voluntary Sector) on behalf of the Minister for Social Housing: I move, That the Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill, the Taxation (Social Housing Reform) Bill, the Housing Corporation (Social Housing Reform) Amendment Bill, the KiwiSaver (HomeStart) Amendment Bill be now read a third time. I want to use this opportunity to reiterate how these four bills improve the lives of vulnerable New Zealanders by providing them with social housing that meets their needs. The Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill is all about increasing the supply and quality of social housing and growing the community housing sector. There are currently 30 registered community housing providers who have 213 houses where tenants are receiving the income-related rent subsidy. They deliver niche services that meet the diverse needs of social housing tenants and we want them to grow. This legislation will help them do that. This bill gives the Ministry of Social Development flexibility in the way that it enters into agreements with social housing providers. It creates a ministerial direction power to allow the Minister for Social Housing, in consultation with other housing Ministers, to authorise the Ministry of Social Development to enter into tailored agreements to purchase social housing. These new tailored agreements will enable the Ministry of Social Development to look at contracts with tenants in mind and to look for ways to get better housing services and better provision of social housing. The current income-related rent subsidy will remain but the new tailored agreements will now provide greater flexibility. We have been talking to the community housing sector and they have told us loud and clear that the income-related rent subsidy alone is not sufficient to encourage community housing providers to provide properties in all circumstances.

[Continuation line: They want to be able to enter into different types of agreements]

Hon JO GOODHEW

They want to be able to enter into different types of agreements including into long-term fixed-price contracts with the Government. Long-term contracts will give them a guaranteed income they can use to borrow against to build or buy houses. The practice for far too many decades was that a tenant would be put in a State house, left there, and forgotten. We recognise that some social housing tenants need extra help. We want to make sure that tenants’ needs are met and, as they change over time, we want to provide the right housing and the right services to respond to those needs. I firmly believe that local providers understand their people’s needs best and I think that these tailored agreements will give them a greater role in determining what is best for tenants. To be clear—nothing in this bill will change tenants’ eligibility for the income-related rent subsidy or how much they will have to pay in rent. It is crucial that we pass this legislation today so that we can work more effectively with the sector towards an additional 3,000 places in the next 3 years, and support an Auckland initiative that will see another 300 social housing places delivered by community housing providers. This will help vulnerable New Zealanders into quality accommodation. In the future as we work with the sector we will establish different types of agreements worth exploring, which will be beneficial to both tenants and providers. These changes are going to make the Ministry of Social Development a smarter and more sophisticated purchaser of social housing. It will also enable the ministry to more effectively manage the social housing spend and purchase quality social housing for vulnerable people. The three other bills—the Housing Corporation (Social Housing Reform) Amendment Bill, the KiwiSaver (HomeStart) Amendment Bill, and the Taxation (Social Housing Reform) Bill all make minor but important changes. The first ensures that payments for residential social housing provision under these agreements are GST exempt, consistent with the current treatment for residential rent or payments. The second clarifies that Housing New Zealand is no longer required to provide policy advice to Ministers. That has been the role of the Ministry of Business, Innovation and Employment for some time. The final one ensures that any prior period of membership in a complying superannuation fund should count towards the 3-year eligibility period when the member transfers to KiwiSaver. This means that more KiwiSaver members have access to their savings to assist with the purchase of a first home. I commend these bills to the House.

[Continuation line: Twyford]

Third Readings

Speech - PHIL TWYFORD (Labour—Te Atatū)

PHIL TWYFORD (Labour—Te Atatū): I will give this to the Government: this Budget is an example of clever politics. There has been a lot of giving with one hand and taking away with the other. But for all of those New Zealanders who are looking for more than sleight of hand, who want a plan for New Zealand—some kind of idea about how we can create a better future for our children—this Budget has been a big disappointment. It has offered nothing for the regions, nothing to diversify our economy and grow our prosperity, and nothing to fix the housing crisis. It is a Budget of squandered opportunities and that theme applies pretty much to the Government’s entire housing policy. Let me say for the record that pushing this legislation arising from the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill through under Budget urgency is a cynical abuse of this Parliament and its processes. There is no reason that we have heard last night or today from the Ministers in the chair, from Jo Goodhew who just spoke, or any of the Government members as to why this legislation has to be rammed through the House under urgency. There is nothing in the bill or in anything that any Government members have said that explains why this legislation should be denied the proper scrutiny of a select committee process and the chance for members of the public to come along and make submissions. This legislation and the Government’s social housing policy show how absolutely bankrupt of ideas the National Government is when it comes to fixing the housing crisis. It will not build the vast numbers of affordable houses that are desperately needed to relieve the housing shortage in Auckland. Instead, we get these silly little special housing areas, which are basically lines on a map creating little zones for fast-tracked consenting, and what have they achieved? In 1½ years they have seen the building of 170 houses in Auckland when the city needs 13,000 every year just to stand still. Every day the shortage of houses in Auckland is getting bigger. It is currently 20,000 and it is getting bigger all the time. The Government refuses to crack down on speculators—speculators who are driving house prices higher and higher, both local and foreign, who are driving house prices beyond the reach of ordinary people. Instead, what do we get? We get some half-hearted, rushed, panicked measure to tighten up the taxation rules and the result of that is that Treasury’s own analysis indicates that policy will not catch more than 1,000 speculators a year. Social housing and the intent of this legislation should be designed to help the most vulnerable people in our society: the people who never will be able to under their own steam and the current economy own a home of their own. That is the point of social housing in modern New Zealand. It is there to be part of the modern safety net. The intent of this bill is to make it easier for the Minister—in fact, it gives the Minister extraordinarily wide-ranging powers—to do sweetheart deals with the property developers that this Government is pinning all its hopes on to buy the houses that no one else wants. It has tried for the last 6 months to convince New Zealand that the thousands and billions of dollars’ worth of State houses this Government wants to sell were going to go to charities and to NGOs in the community sector. That was a front. It is a fig leaf designed to give a veneer of respectability to a policy that is deeply unpopular with New Zealanders: that is, the hocking off of billions of dollars of publicly owned State houses to the National Party’s property developer mates. This Government refuses to change the planning rules to allow us to build more and better houses and it has been talking about it since 2006, blaming the Resource Management Act. Bill English still gets up in this House and blames the Resource Management Act and National has done nothing. In 7 years in Government it has not yet brought a proposal to this House to reform the Resource Management Act to make housing more affordable. It has no credibility in that area. It is not doing the very thing that is the most logical, simple, obvious thing to do in the middle of a housing crisis when there is a shortage of houses. The obvious thing to do is to build more houses, to build houses for young Kiwi families, good decent, hard-working New Zealanders who only want to own a home of their own. They need a Government that will stand up on their side and build more houses. National refuses to do that. The people in New Zealand who are most vulnerable, who are struggling on household incomes that barely allow them to survive, who struggle to get a decent roof over their heads, they need more and better State housing. And what is this Government’s answer: to sell off the houses that it already owns, as if by changing the ownership it is going to make the slightest difference to the shortage of housing. It is, as Annette King memorably described it, an ideological burp, a bit of ideological reflux from the 1990s by Bill English, who back then introduced market rents for State housing and sold off 13,000 houses that ended up in the hands of private landlords and property speculators. This is simply a continuation of that policy. The difference is that this National Government has tried to dress it up by saying the Salvation Army was going to buy the houses, in order to try to reassure New Zealanders about this deeply unpopular policy. This legislation gives the Minister the flexibility and the wide-ranging powers to do sweetheart deals with property developers to get rid of the houses. Bill English, who is the architect of this policy, simply wants to get rid of State houses off the Government books. He does not care who they go to. He will give them away. This is a fire sale of State houses on a massive scale. Billions of dollars of public assets that were paid for by State house tenants and taxpayers over generations are being flicked off by this National Government because Bill English has an ideological agenda. He does not want the State owning these houses. He does not want the State to have an active role in the delivery of decent housing for the most vulnerable New Zealanders. He would much rather replace that system with a taxpayer subsidy that goes direct into the pockets of landlords. That is what Bill English wants to do. At least he is being candid about it. Forget the mealy-mouthed platitudes that we hear from the mouth of Paula Bennett.

[Continuation line: Let us look at how the Government is trying to justify this con job]

PHIL TWYFORD

Let us look at how the Government has tried to justify this con job it calls social housing reform. The first thing it says is that one-third of the houses are in the wrong place and are the wrong size. Well, in spite of the fact that that was flatly contradicted by Housing New Zealand in its recent annual report, it begs the question of how selling the houses to someone else will magically ensure that those houses are the right size and in the right place. It is a fallacy. Paula Bennett repeatedly makes the claim that community organisations can do a better job than Housing New Zealand. As Phil Goff pointed out, the Government has no evidential basis for making that claim. We asked Paula Bennett under the Official Information Act to provide the evidence, to provide the data. She said that no such document exists. Simon Bridges got up from the chair during the Committee stage of this debate and said: “We want to build more warm, dry homes and build lovely modern homes for people. That’s why we’re passing this bill.” Well, to be honest, that is brainless. There is no need to sell billions of dollars of State houses to your property developer mates. Just insulate the houses. Just redevelop them. Build more houses. That is what New Zealanders want. This is an ideological agenda by the National Party. It is withdrawing the Government from the provision of decent housing for New Zealanders. It wants a market-based approach. It simply wants the houses off the Government’s books, and Labour will not support that. We are not against building up a stronger community housing sector. In fact, as members will know, I have given some very good speeches in the House and elsewhere, making the case for that. But we will not stand by and allow the community housing sector and many fine organisations to have their good reputations cynically used and manipulated by this Government in order to lend a veneer of respectability to its policy. The answer to the housing crisis is simple. We have a shortage of houses. Just build more houses.

[continuation line: Matt Doocey]

Third Readings

Speech - MATT DOOCEY (National—Waimakariri)

MATT DOOCEY (National—Waimakariri): I am rising to support the social housing reform legislation in its third reading. Can I start off by acknowledging Housing New Zealand in the Canterbury region since the devastating earthquakes. It is well on track to repairing 5,000 Housing New Zealand houses and rebuilding 700 Housing New Zealand houses. In my electorate alone, in Waimakariri, it is on track to rebuilding and repairing every house. In fact, we will end up with more Housing New Zealand houses than before the earthquakes. Can I acknowledge and congratulate the very creative community organisations in my electorate that are out buying affordable housing for their customers. Could I say to those New Zealanders, those 3,000 extra New Zealanders who under this legislation will get housing support, that the Labour Party said no, the New Zealand First Party said no, and the Green Party said no, and tell them that this National Government said yes. And can I tell all those extra tenants who will get extra help under this legislation by wraparound services that the Labour Party said no, the New Zealand First Party said no, the Green Party said no, and this National Government said yes. We are the workers’ party. We are working hard for the working people of New Zealand. I commend this legislation to the House.

[continuation line: King]

Third Readings

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): National members are very proud of this social housing reform legislation. We have heard this repeatedly in their 1 minute and 27 second speeches, we heard it again in the second reading in their 1 minute and 40 second speeches, we heard it again with their “I move that the question be now put.” speeches during the Committee stage, and now we have another 1 minute speech in support of this legislation from the backbench of the National Party. Unfortunately for this House, it started off with the Minister for Social Housing , who has bailed out of the debate before it has finished. She started off this debate by saying that the Government had started a vicious programme of reforms. I said, yes, she is right on one thing; she has started a vicious programme of reforms. We now know what they are. There has been a series of major changes to housing policy under this Government. Every one of them takes State house tenants backwards. Every one of them leaves State house tenants unsure as to whether tomorrow they will still have a roof over their head. I said at the beginning of this debate that I believe that this was a series of ideological burps by this Government—in other words, a lot of hot air and gas wrapped up in its biased and unbalanced philosophy that the National Party holds dear. I believe we have gone from Nick Smith, who has been a great exponent of this sort of philosophy, to Paula Bennett, and Paula Bennett in her wake has left a trail of destruction in Government departments. Go out and see what you find in the Work and Income offices around New Zealand now. See what the morale is like after 3 years of her stewardship. She has now moved on to Housing New Zealand. What we find out in this legislation, hidden in this legislation, in the remedial matters part of it, is that she is removing any advice from Housing New Zealand on policy. Did the members opposite know that? Were they aware that she was removing any advice that would come from Housing New Zealand?

Brett Hudson: Since 2011, Mrs King.

Hon ANNETTE KING: The member at the back, the list member from the back Brett Hudson, who has not bothered to contribute to the debate except from his seat, sitting down, ought to go and have a real look at this legislation instead of being just a parrot for the notes they are given. In fact, we have got a whole backbench of parrots who have not taken the time to read what this legislation does. They did not take the time to ask questions of their Minister. They just said: “We are so proud, Minister, of your bill.” I actually think they are not earning their salaries today, because they are not working and questioning and debating this legislation, which they ought to be doing. You know, we, the people of New Zealand, were given a solemn promise by the Prime Minister of this country that there would be no more asset sales, and what we know from this legislation and from the other actions that this Government has taken is that the biggest asset sale you could have is taking place now. There would not be a member opposite or on this side of the House who would not think that a house is the biggest asset any of us could ever have. Our house, whether we own it or whether we rent and live in it and cherish it, is the best and biggest asset we have. And to say that selling off thousands of State houses is not an asset sale is to be very economical with the truth. That is what this Government has been with this legislation. You see, it has been set up. It was set up over 3 years ago when National became the Government and the first wave of changes came to State houses. It followed a pattern, and I set that pattern out in the first reading of this legislation. I think it is worth repeating, because every constituency member on this side of the House knows the pattern. First of all, the people are taken out of the State houses. Is that not what happened out in your electorate, our chief whip? Is that not what happened in other parts, whether it is in Te Atatū or whether it is in Rongotai? People are removed from the houses. That is the first thing that happens. There are all sorts of reasons why they need to be removed. Secondly, the Government then says: “No one wants to live in these houses. Look, they’re empty. Nobody wants these houses.” And all the while the waiting list for State houses was growing and growing and growing. These houses were empty, the Government said that nobody wanted to live in them, and the waiting lists in those areas were growing. So then the next excuse is: “Well, these houses must be in the wrong place and the wrong size, so if they are in the wrong place and are the wrong size, we should sell them to the community sector. It will be able to put people in the houses that are in the wrong place and are the wrong size.” You see, it is nonsensical. It does not make sense. Then it just flogs them off to whomever, whoever will buy them, because they are going to be used for community housing. If they cannot be used for community housing by the Government agency, why does the Government think a community organisation is going to turn them into the right house in the right place and the right size? You then get to the next part of this process. When you leave houses empty, just go around and look at empty State houses. What you will find is that suddenly the windows start to be broken. Then you have vandalism and graffiti written on the walls and written on the houses. Then you see the boards go up as Housing New Zealand tries to cover up the broken windows.

[continuation line: Then you get the complaints]

Hon ANNETTE KING

Then you get the complaints about what it is doing to the neighbourhood and why these houses are looking so unsightly in a neighbourhood. Then it gets to the final stage of all. The Government says: “Well, we’ve got to sell them off. We’ve got to get rid of them.” That has been the process that we have watched take place since this National Party became the Government—cynical, manipulative movement in State houses to get rid of houses, whether they are all the best houses or not. We would not have objected if they were being replaced by other houses. That is not the history of the National Party. It sold off 13,000 when it was last in Government, and it is now on the big State house sell-off again. So then we thought that if this party cannot look carefully at the legislation, and the backbenchers are too lazy to get out of their seats—other than to make 27 second speeches—that we ought to look closely at it. Many of us go straight to the regulatory impact statement. You see, it is provided for a reason. It is provided to tell us, the members of Parliament in this House, what other eyes have seen when they have looked at the legislation. It is always worthwhile, I say to new backbenchers. Go and read any regulatory impact statement. We have seen some very good ones over the years. I can think of the regulatory impact statement that was put out on that legislation on the care of adults who are disabled—remember that one? When we got that regulatory impact statement, Tony Ryall had it all redacted. On the day we were debating the bill you could not even read what they were saying. Well, we have got one on this bill, and what we found out was there has been no review, no evaluation, and no reports on this legislation. The first issue: what does it say? Has there been any? The big answer is one, big, fat “no”. There have been no reviews or evaluation of this policy. The second one, which I think is important, is that Treasury did not provide any independent opinion on the quality of this legislation. Those are two fundamental things that happened. Is it evaluated? Have they got advice? Is there a report? What has Treasury said about? On both those counts, the National Party did not get advice. It knows best! It knows exactly what people need in New Zealand; it is what the National Party wants! It is not what people necessarily want; it is what it wants! I say to the members opposite, after you have passed this bill—because you have not taken the time to read these statements now and have not taken the time to question whether there is anything in these bills that ought to have closer scrutiny—I suggest you come to the Table, pick up the documents, and at least learn a lesson from this bill. Learn a lesson that you do not just become the rubber stamp for your Ministers. You are not going to go far in a political career when you just become a rubber stamp for a Minister. And I say to the C-team—except Mr Bishop—that you have become rubber stamps for the Minister, who has hoodwinked you into thinking that a bill that does not have to be passed with urgency, parts of which they have been undertaking for the last 4 years, you are going to need to pass and you just need to rubber-stamp it. Well, I say to the members opposite that you are not doing the job that you are elected to do if you are not scrutinising the legislation that is put before this House. I say to the members opposite: shame on them. This bill should have gone to a select committee. It should have had submissions. It should have had input from the people of New Zealand so they could have a say. State houses are their assets, not the Government’s.

[Continuation line: Parmjeet Parmar]

Third Readings

Speech - Dr PARMJEET PARMAR (National)

Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill’s third reading. The current law assumes that all social housing tenants’ needs are the same. There is no provision for tailored response. As we have heard since this morning, there are waiting lists and there are some houses sitting there vacant. This bill is designed to fix that situation—exactly to fix that situation. There is a mismatch between the needs of the families and the kinds of houses that are available. Urgency is required because there are people on waiting lists, and we do care for those people who are on waiting lists. That is why we need this urgency. The social housing reform’s aim is to house more families. We do care about the size of the house that we provide to these people. We do care about the location they will be put into. We cannot put a five-member family in a one-bedroom house. On the other hand, another family with just two members may not want to get into a five-bedroom house. Location does matter because people want to be close to their family members, their relatives, or the communities they want to be in. We need to address these needs. This Government is working hard to get the best outcomes for people in social housing, and for that we need flexibility. We need this bill. I support the bill. Thank you.

[Continuation line: Jan Logie]

Third Readings

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): I rise to take a call on this, the third reading of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. When my colleague Kevin Hague spoke in the first reading on this bill, he said this bill was an emblem of the Government’s wider housing agenda and evoked the Government’s own consultation process for the flag referendum distraction. Members will know that New Zealanders in that campaign are asked “What do you stand for?” and then pose for photos holding a sign saying what they stand for. Well, with this bill, one can all too easily, I think, imagine the Prime Minister holding his sign, no doubt with a relaxed smile on his face. The sign might read: “I stand for abdication of Government responsibility.” Or it might say: “I stand for not giving a damn.” Or it might say: “I stand for the ideology of pink and grey—the 1980s and 1990s.”, even though that failed miserably the first time around, or even: “I stand for contempt for the normal democratic process that should surround a bill like this.” There is a housing crisis in this country. People from Invercargill to Kaitāia are sleeping in cars, in overcrowded housing, and on other people’s couches because they cannot get into State houses and cannot afford private rentals. All but the most privileged young people are now facing a lifetime of renting and of never being able to buy their own home—something that was once considered a birthright for those in this country. This represents growing intergenerational inequality—the abandoned generation. It also represents a demise of community. One of the National Party members last night said that this Government, the National Government, represents big community.

[Continuation line: Well, I can tell that member and members on that side of the House that in]

JAN LOGIE

Well, I can tell that member and members on that side of the House that in my community, a low-income community, there is amazing heart and amazing kindness but it is hard for that to bed in in communities because sadly all too often people are having to move because they are in rental accommodation and they cannot afford the costs. So my community is constantly in flux because of the policies of this Government, which undermine our entire social fabric. This Government’s approach undermines community. I was at the Child Poverty Action Group post-Budget breakfast this morning and was really moved by a presentation from a young emergency department doctor, talking about the personal shock he had experienced when seeing the emergency department in Wellington turn into what seemed like a paediatric clinic during the cold snap just last month in April. While he was studying, he had learnt about the social determinants of health in his studies. He knew that poverty and poor housing are causing illness. There are about 40,000 preventable hospital admissions a year in this country. He knew—he had learnt through his study—that more than one child a week dies from poverty-related illnesses in this country, many connected to the quality and over-crowding of our housing. He knew all of this theoretically, but he told us that none of that learning prepared him for the reality of facing that onslaught of children in the middle of the night coming in in waves of sickness with bronchial diseases and even pneumonia.

[Continuation line: He said that this Budget and this legislation will do nothing to stem the]

JAN LOGIE

He said that this Budget and this legislation will do nothing to stem the flow of children into the emergency departments of this country and it will do nothing to stop the deaths. It grieves me that when this Parliament, this Government, had the opportunity to present us with legislation that could have turned that round, what we have instead is legislation that is making it easier for the Government to transfer State housing stock into the hands of private developers and possibly some community organisations. Last night, when Government members bothered to take their maybe maximum 2-minute calls on this bill, they mentioned a commitment to home insulation from this Government. I would like to remind this House that that was a Green Party initiative—an initiative that this Government stopped before the job was done. Again, how familiar is that.

Chris Bishop: That’s not true. That’s a bit harsh.

JAN LOGIE: The member says that is not true. I would like to ask the member whether every house in this country insulated. Would every house in this country pass a warrant of fitness? Are our houses still killing our children? The reality is they are still killing our children. You have not finished the job. Now this legislation is passing under urgency, without the possibility for the public to contribute to it, except through one media release from the community housing providers, which are telling us they believe it is timid and will not solve the problems that we are seeing in the communities. This legislation is passing without analysis from Treasury and without any substantive input and analysis of the implications, particularly the fiscal implications. It is passing without, I would say, even one coherent, substantive speech from the Government to provide detail on this legislation so that those of us on this side of the House and the public of New Zealand can properly engage with what we are doing. It seems to me that at the heart of this legislation it is helping the Government to transfer State housing stock to property developers. Although the Green Party absolutely supports the role of community housing providers, we believe it needs to be in addition to a strong State house sector. We absolutely oppose the transferring of State housing resources, our collective public resources, into the hands of the private sector to make a profit off the vulnerability of New Zealanders. This Government is failing in housing at every turn. The public expects that New Zealanders will not be sleeping on the streets or in cars or in garages. But this Government has done nothing to address homelessness or provide emergency housing. The public expects that it should be possible for someone to rent a house and feel secure. But this Government has presided over skyrocketing rents and making rental tenure less secure. Landlords seem to be in some kind of race to the bottom these days and, in fact, to where the worst standards have become entrenched. Right now landlords including, tragically, Housing New Zealand that lose their cases in the Tenancy Tribunal are now using 90-day notices to evict tenants. The public expects that everyone will have a home that is at least healthy, dry, and warm. Yet, despite the Green Party policy for home insulation, many New Zealanders are still living in houses that are broken, in disrepair, and are making them ill. The public expects that that traditional dream of homeownership should still be available to all, yet the Government seems relaxed about a situation in Auckland where the median house price is now around $800,000 while the median household income for people under 35 is $50,000. Younger people in Auckland are being permanently excluded from homeownership, with devastating economic consequences for them personally and for our wider economy into the future. Finally, I do want to remind the National Party that they were the first party to build State houses in this country.

Chris Bishop: That’s right.

JAN LOGIE: Yes. In 1905 Richard Seddon passed the Workers Dwelling Act to build the first State houses for inner-city workers to rent. He though New Zealanders could enjoy higher standards of living if the State took over from “greedy city landlords”. I still believe that is true.

[Continuation line: O’ROURKE]

Third Readings

Speech - DENIS O'ROURKE (NZ First)

DENIS O'ROURKE (NZ First): There are three questions that I believe the people of New Zealand should be asking this Government about this legislation. First, how will this legislation create more homes for people? Secondly, how will this legislation reduce the cost of housing, stop the massive increase in rents, and stop the ludicrous rises in house prices in Auckland without causing the bubble to burst? Thirdly, how will the privatisation of State housing improve the quality and security of housing for the most vulnerable people in our communities? I want to try to give some answers to those questions. To the first question about meeting the demand for rental homes, this legislation is not actually designed to increase rental housing stock. It is, in fact, designed firstly to minimise the role of the State by emasculating Housing New Zealand, effectively requiring it to sell houses and to build only in some areas in the nature of a residential property developer, rather than as a social housing provider. What is needed, of course, is an agency with a comprehensive role to provide a housing service for the lowest income people in the country, to insulate them from the worst effects of the worse landlords. Also, the legislation eliminates Housing New Zealand’s research and advice functions to the Government, which seems very stupid to me because all of its expertise will be lost in that process. The second part of the answer is that the legislation means the Government is actually abdicating its responsibility for social housing by contracting that function to others—to organisations not always capable of carrying out that function and to people without responsibility for the welfare of the tenants. The Minister said in her speech that flexibility will allow tailored agreements, to give certainty to providers so that they would be able to borrow and build more homes. But the truth is that Housing New Zealand could actually do that faster. It could build more homes and it could build them better if it was properly resourced by the Government to do so. So why go to housing providers outside Government that do not have the capacity to do the job? It just does not make sense. The third part of the answer is that the Government, by providing far too little money for new rental housing to Housing New Zealand, shows it is not really interested in solving the problem at all. If that is not bad enough, the principal Act amended by this legislation means that people are being pushed out of State houses, actually bullied out of them, through this policy of reviewable tenancies. This is based on a bureaucratic assessment of the ability of tenants to move into private accommodation for no apparent reason and without regard to their health or well-being, their community connections, or their need for secure accommodation. The legislation is also designed to avoid accountability. The Government wants to be able to point the finger at somebody else when it is shown that not enough rental houses are being provided. This Government’s way of dealing with the social housing crisis is to transfer it to others—avoiding the heat by leaving the kitchen. The answer to the first question about increasing rental housing stock is that the legislation will not cause one new rental home to be built, and Housing New Zealand will not be resourced to do it either. It will be another tool to speed the sell-off of rental homes, and it will be used to justify less and less investment in new State rentals.

[Continuation line: It will make the crisis worse, not better]

DENIS O'ROURKE

It will make the crisis worse, not better. Ultimately, that means more housing deprivation and it will make State houses even harder to get than they are now. I want to move on to the second question about affordability. The average rental is now $379 per week. Since 2008, under National, that is an increase of $65 per week—a 20.9 percent increase. That is an increase above the Consumers Price Index of 11.7 percent. What does this mean? It actually means that in the main centres, rents have become unaffordable for people, despite the rent subsidies offered by the Government. Even that is not the full story, because those figures that I gave are for all of New Zealand. The crisis is much greater in Auckland and Christchurch. In Auckland, people typically spend half of their income or more on rent, and that is unacceptable. In Christchurch, where I live, I hear stories all the time. People tell me that they are spending $1,000 a week for an ordinary three-bedroom home because they cannot find anything of reasonable quality for anything less. Those are facts. They are not just my opinions; they are what people tell me. It is the truth, and this Government is not addressing it in those main cities. People are still forced to live in cars—forced to live in cars—in caravans, in tents, under bridges, and in hovels not fit for human habitation. That is the record of this Government, and it is not addressed at all in this legislation. So the answer to the question is this: this legislation is simply not capable of curbing even the rate of increase of rents, let along reducing them at the present time. In fact, the legislation is more likely to cause increases in rents because the interest of private providers is in returns, not in the welfare of tenants. Moving on to the third question on rental housing quality, social housing will now be at a very great arm’s length from the Government agencies that actually understand housing, so oversight will be seriously compromised as a result. More power is given to Ministers to give directions on the terms and conditions of contracts, but they are clearly going to take a very political, very dogmatic, ideology-driven approach to it. This means, under this Government, it will be aimed at saving money, with much less focus on looking at the best interests of the most vulnerable people in our communities. Non-government providers will impose their own policies and practices. What that means, actually, is that there will be no satisfactory minimum housing standards for rental properties in New Zealand, and we know where that leads. It leads entirely in the wrong direction—it means poor-quality housing. Most of all, this legislation will result in a very uncertain outcome for low-income people who are dependent on the State for housing and, above all, who need security in their tenancies, not uncertainty. Lastly, the whole thrust of this Government’s housing programme, as expressed in this amendment legislation and in the principal Act, is that it wishes to suppress demand, rather than meet demand. The results of that will be very expensive in social terms. It will result in reduced health and well-being and increases in poverty, putting more families at risk and compromising social cohesion. This legislation is a retrograde step. It emasculates Housing New Zealand. It seeks to reduce Government accountability. It does not increase housing supply. It does not control rocketing rents. It does not improve housing rental quality. It simply does not address the New Zealand housing crisis, at all. What a shame. This Government should be hanging its head in shame, not telling us that it is proud of this useless legislation, because that is what it is. I see somebody over there on the Government side laughing at that, but the truth is that if he was one of the people affected, the smile would be on the other side of his face. This is poor legislation. It should not be passed.

[Continuation line: Jono Naylor]

Third Readings

Speech - JONO NAYLOR (National)

JONO NAYLOR (National): Well, it has been an interesting few hours since yesterday, hearing the members opposite just being fixated with one part of this legislation and going on and on and on. I want to draw members back to the legislation itself and to the explanatory note , which states: “Among other things, ministerial directions could allow the agency to purchase social housing places into the future, … to pay more or less than the income-related rent subsidy, and generally to enable arrangements that respond effectively to social housing need.” Over the last few months, I have spoken to a number of agencies and they have expressed to me a desire to get further involved in social housing. They want to play a bigger part in social housing because the clients that they are working with are interfacing with Housing New Zealand and other social agencies as well, but the current legislation that we have is not flexible enough for them to play the kind of role that they would like to play. So I am really looking forward in a little while’s time, when we vote on this bill, to be able to go back to them and say: “Boy, have I got a deal for you. Boy, we are going to move forward. You are now going to be able to do what you want to do.” I am going to say to them that they will be able to engage with Housing New Zealand, and they are going to be able to engage with the Government, to be able to provide an even better service for their clients. That is why I will be supporting this bill.

[Continuation line: Jenny Salesa]

Third Readings

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call—Jenny Salesa, 5 minutes.

Third Readings

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

JENNY SALESA (Labour—Manukau East): Thank you for this opportunity to speak on the social housing reform legislation. Today is a sad day to be debating this bill in this House. Michael Joseph Savage , a former Labour Prime Minister, in the 1930s had the legacy of building State houses to house vulnerable families. He stated that the Government has a collective responsibility to care for each other—all of us here in the House of Representatives have a collective responsibility to care for each other and for our constituents—although the social housing reform legislation is the total opposite of a caring piece of legislation. I have heard a few members, particularly from the other side of the House, stating that this legislation is about serving families—that it is about serving families better. How in the world is it possible that we would serve families better by selling the houses that they live in from under them and by evicting them from the houses that they live in right now? We have a housing crisis in Auckland already. Almost every day I see this with my own eyes. Families who come into my office are families who come in minivans, and that is the home that they live in. There are families who live in garages. There are two and sometimes three families sharing a house because that is the only way that they can make ends meet. There are families who cannot afford to put a house over their own heads by themselves. I would like to state that, unfortunately, there is not much in Budget 2015, including the social housing reform legislation, to relieve the 7 long—very long—hard, and painful years that have been suffered by the people in my electorate at Manukau East in South Auckland. These are people in Ōtara , Ōtāhuhu, and Papatoetoe, alongside thousands of other ordinary Kiwis across New Zealand. Housing and decent jobs are major issues for my constituents in Manukau East. Housing and employment are basic building blocks for a decent life. Having the ability to work, being able to afford a roof over your family’s head, and being able to afford to buy food for your children and your family—nothing fancy; just the basic necessities of life. These basic necessities continue to be increasingly difficult for working families to maintain. This, in spite of many years of tantalising promises that we are on the cusp of something special and that we should just wait a little while longer and there will be more jobs, there will be increased incomes, and there was also the promise of affordable housing by this Budget. Somehow, affordable housing we will hope to see in the very unknown future—who knows?

[Continuation line: There is undeniably a major housing crisis]

JENNY SALESA

There is undeniably a major housing crisis in Aotearoa New Zealand. This Government has failed to confront the housing crisis head on. It has been content with tito-ing around the edges. In last year’s Budget National promised that housing would be made more affordable, but it is plain for all to see that housing is not more affordable today; housing is in actual fact much more expensive each and every day. Housing in Auckland—$809,000 for an average house. That is most definitely not affordable. The very first piece of legislation this Government is ramming through the House is to hold a fire sale of State houses for its developer mates. This social housing reform bill is not compassionate conservatism as we heard yesterday; it is “Cabinet club” conservatism—flicking off the State houses to developer mates at knockdown prices.

Brett Hudson: Tired old lines—didn’t work last year.

JENNY SALESA: It is not lies. In this Government’s special housing areas in Auckland, which are touted to actually relieve Auckland, 170 houses have been built in a year and a half—170 houses. Under National the shortfall has not been addressed. This Government has failed to ensure that housing is affordable, as it promised. This Government has failed to provide housing, a basic human right for people. I and the Labour party strongly oppose this bill.

Third Readings

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): I call Meka Whaitiri—5 minutes.

[Continuation line: Meka Whaitiri]

Third Readings

Speech - MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti)

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Assistant Speaker. Tēnā tātau katoa. State housing has a proud history in New Zealand. It is how we make sure that every child gets at least a decent roof over their head. No matter how hard mum and dad are struggling financially, it is about how we make sure every child gets a decent start in life. It is my privilege to stand and take a call on the third reading of this important legislation. I came to this House at 9 a.m. and sat in the House for 4½ hours to try to get a call on this particular legislation, so I am pleased to finally get 5 minutes to talk and share my experience of the impact that it is going to have on the people and constituents whom I represent in this House—Ikaroa-Rāwhiti. There have been some communities that have been identified in terms of how this legislation will not address their needs. Can I make it really clear for the House that there are real social and emergency housing needs throughout Ikaroa-Rāwhiti. There are real housing needs. A couple of suburbs were mentioned by colleagues on this side of the House—Flaxmere—but one suburb particularly that I want to mention is Maraenui. Since coming into this House I have the privilege of visiting Maraenui often when I am back in the Hawke’s Bay -Napier. I can say without a word of a lie that 80 to 90 percent of the cases that I deal with on a daily basis, when I am in the electorate, are to do with housing issues. That is why I am saying that legislation like this is not going to address the real social and emergency housing needs of the constituents I represent. One of the issues raised in the passing of this legislation under urgency is why are we are we doing this under urgency, because that has not been answered by the Minister when she was in the chair. What is the urgency that is prevalent in this bill that requires us to have that time and why were the people who are going to be affected by the legislation not given the opportunity to present. They are not here. Their voices cannot be heard, but this side of the House is bringing the very real issues that we confront as electoral MPs to the House. This legislation falls short in terms of supplying, or being able to give, the number of social housing homes that are going to replace those that have been sold off. As I mentioned, Maraenui is a place of many, many social and State houses that have recently been sold or are currently vacant. We have just under a hundred on the waiting list in Hawke’s Bay, yet we have these homes that are either vacant or have been turned down. So much has the Government dropped the ball in Maraenui that recently I met with the Maraenui revitalisation committee, and who is heading that committee? The Napier City Council—the Napier City Council along with all the Government agencies, property developers, and Te Puni Kōkiri have got round the table. When my colleague Stuart Nash and I visited them 2 weeks ago, we asked the question: “Why are you doing what you’re doing? There must be a Government plan to deal with housing issues in Maraenui.” Do you know what they told us both? There is no plan. They said to both of us, the people around the table, that there was no housing plan for Maraenui. There is clearly a gap in that part of my electorate. There is no housing plan, so the people of Napier have taken the ball to address the real issues. But for the time I have got left on my feet in bringing those issues of the people of Maraenui, I also want to mention about what this legislation is actually doing. As a former public servant, I understand what important and really robust policy looks like, and I also know what robust and good policy does not look like. In this particular legislation it talks about removing from Housing New Zealand Corporation, the deliverer of housing in this country, the role of giving advice to the Minister. I read that and I fear for all the public servants that we are talking about here in Housing New Zealand. That means who is next on the block? Which other department and officials that work tirelessly on behalf of our community are also going to get the chop? This is one of the failings of this legislation. It is not just about not delivering but it is also downplaying the Public Service, which has a proud record in this country, and therefore I cannot support this legislation. Kia ora tātau.

[Continuation line: Stuart Smith]

Third Readings

Speech - STUART SMITH (National—Kaikōura)

STUART SMITH (National—Kaikōura): Legislation arising from the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill is important legislation. I think the main plank of this legislation is that it moves the focus from one social housing provider in Housing New Zealand to the people who require social housing. That flexibility is essential because other providers in conjunction with Housing New Zealand will actually be able to meet people’s needs in the way that they are needed—in the right places, with the right houses of the right size. It is a great pleasure to be a part of a Government that actually hits to the heart of the matter rather than sticking to tired old ideology. So it is with great pleasure that I commend the legislation to the House. Thank you.

[Continuation line: Adrian Rurawhe]

Third Readings

Speech - ADRIAN RURAWHE (Labour—Te Tai Hauāuru)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru):

It gives me great pleasure in a way to have the opportunity to speak to this. I think it is really important that I again acknowledge all of those families that are sitting in their State homes today wondering about the future of their occupancy of the houses that they live in—their homes. I also want to acknowledge those families that have applied a State house and have been declined. They have been declined because the rules around who qualifies for a State house, and who does not, have changed. That has not lowered the number of people wanting social housing; it means that the Government has just written them off. So I want to acknowledge those families as well, because this legislation does nothing for them—nothing at all. This legislation has got nothing to do with what the Government benches say that it has, although we have not heard a lot from them, especially today. We have heard, as my colleague said, interjections that have lasted longer than their speeches, and in a democratic society that is actually not good enough. It is not good enough for the interjections that we have heard today—very few of them—that when given the opportunity to actually speak to those issues, you get a 1 minute speech in response. As my colleague the Hon Annette King pointed out, the Government benches are actually not doing their job properly. So I go the bills that have come out of the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. Let us talk about the flexible purchasing or, as I mentioned during the Committee stage, the flexible sales, because that is what it really is. These bills provide the mechanism for the Government to sell State assets.

[Continuation line: That is what it does]

ADRIAN RURAWHE

That is what it does. No one can deny that. In fact, if that was not right, why have we not heard from the Government benches about that particular issue? The sale of these State assets also transfers the responsibility to provide social housing. That is actually not good enough. It is an obligation on the Government to provide those houses. If it is not, then the Government should say so. The Government should tell the country—come clean. Tell the community that the Government does not want to be in that business any more—that it does not want to provide social housing for New Zealand. That is what this bill is, effectively, saying. It wants to transfer the responsibility to community organisations and other—property developers, we do not know. Under new section 137A of the Housing Restructuring and Tenancy Matters Act inserted by this legislation, it gives the power to the Minister to make those decisions. The Minister can make the decisions around transferring those assets to, from my reading, anyone the Minister chooses, and without any rules around that. We do not know how long those houses have to stay as social housing. Is it 1 year, 2 years, 10 years? Maybe after 2 years they can be transferred or sold on the open market, no doubt for a large profit, and then no longer will those homes be affordable, no longer will those homes be social houses. So the big question in debating this particular legislation is whether there will be one single social house more in New Zealand when this legislation takes effect, and the answer is no—not one single one; nothing. How, then, can the members opposite claim that this bill will provide more social housing? It does not. It does not. I think I am bound to say that the public should have had the opportunity to have input into this bill. New Zealanders, ordinary Kiwis out there, have been denied the opportunity that our democratic system offers. They have not had the opportunity to give evidence. We have heard in the contribution from the Hon Annette King that one organisation was able to get out a press release in time to give its thoughts on it. Imagine what other organisations might have been able to contribute. There is nothing in this bill, as I started to allude to in one of my earlier contributions, around the Government’s Treaty obligations. It talks a lot about providing Māori housing, and yet in this legislation there is no mention under the enabling clause of the Minister giving any recognition whatsoever to the Government’s Treaty partners—none whatsoever—so that may or may not happen, but there is no obligation on the Government to do that. I call on the members opposite, who have one more call. Maybe they can answer some of those concerns that more than just me have. As I mentioned earlier, those families that are sitting at home, wondering about the future of the occupancy of their homes, will be very concerned that they have not had the opportunity too to make a contribution and give evidence on this bill. Actually, we have not heard any compelling evidence or any compelling contribution from the members opposite about exactly why this bill is so important that it has to go through under urgency. I have not seen or heard any contribution from them addressing that issue. There is no urgency in this. It is a matter that the Government has decided that it wants to get this legislation through under the urgency of the Budget so that the general public will miss the fact—or may miss the fact—that this is about the flexible sale of State assets. It is not flexible about the purchasing, because when you have purchasing you also have someone who is selling, and that is the Government on behalf of all New Zealanders selling its stake in social housing in New Zealand and transferring the responsibility that it has to organisations and others to carry out that function. That is just not good enough.

[Continuation line: Todd Muller]

Third Readings

Speech - TODD MULLER (National — Bay of Plenty)

TODD MULLER (National—Bay of Plenty): It gives me great privilege to be able to stand here as the final speaker in support of the legislation arising from the Social Housing Reform (Flexible Purchasing and Remedial Matters) Bill. It is time for the members to park their histrionics and park their ideological dead ends and actually come across and listen to what this bill delivers. There will still be 60,000 properties in the ownership of Housing New Zealand in 2017. There will be 3,000 more social housing places by 2017—3,000 more. It is time for you to come across. You have still got an opportunity to represent the people whom you purport to support, like the iwi in Tauranga who want to participate as a community housing provider, like the accessible housing companies that are wanting to participate in Tauranga. These are people whom you purport to support. If you have integrity, you would see that this bill is designed to deliver more for the people whom you purport to represent, but this party does. This party represents them. I commend this bill to the House.

A party vote was called for on the question that the Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill, the Taxation (Social Housing Reform) Bill, the Housing Corporation (Social Housing Reform) Amendment Bill, and the KiwiSaver (HomeStart) Amendment Bill be now read a third time.

Third Readings

Speech - TODD MULLER (National — Bay of Plenty)

RON MARK (NZ First): I raise a point of order, Mr Speaker. I want to refer you to a couple of Speaker’s rulings. This is Speaker’s ruling 205/2, which reads: “It is central to the democratic idea that the purpose of elected public office is to serve the public, not to enrich the office-holder or his or her personal connections. It is important for members to ensure that they do not use their position to influence the legislative process for their own advantage or that of someone with whom they are connected.” I have spent a little bit of time going through the pecuniary interests register and I have just had the library return a document stating a number of members own property development companies in Auckland.

Third Readings

Speech - TODD MULLER (National — Bay of Plenty)

The ASSISTANT SPEAKER (Lindsay Tisch): One moment. We are in the middle of a vote here. I thought your point of order related to a vote. [Interruption] No, the member will sit down. Of course, you should have brought the point of order before we went to cast the vote. I have called for the votes and the Clerk is now assessing those votes. We will have the result of those votes and then the member may continue with his point of order.

[PV on third readings Ayes 63 Noes56]

Bills read a third time.

[Continuation line: Points of Order Ron Mark]

Points of Order

Members of Parliament— Conflicts of Interest

RON MARK (NZ First): I raise a point of order, Mr Speaker. To continue my point—my point is this: we have done a search using the Parliamentary Library research services, and it is now clear to us that a number of Government members who have just voted, have strong interests in property development companies in Auckland, and—[Interruption] Shh, in silence.

The ASSISTANT SPEAKER (Lindsay Tisch): Points of order in silence, please.

RON MARK: It is clear from the register that some 24 National Party members have 48 properties. But it is also very clear and concerning—and this is why I tried to give an opportunity for the Government to consider before it cast those votes—that a number of National Party members who just voted have strong interests in property development companies that could stand to gain from this legislation being moved through the House. And I would ask you to declare the vote invalid and to recast it. [Interruption]

Points of Order

Members of Parliament— Conflicts of Interest

The ASSISTANT SPEAKER (Lindsay Tisch): Order! We are dealing with a point of order, and there will be silence. If the member had concerns about this, we have had a 4-hour debate. We started this debate at 9 o’clock this morning. So we have had over 4 hours now of this debate. If the member had concerns, he should have brought them up at that stage. We cannot interfere with the vote. The vote has been taken, I have announced the result, and the clerk has read the third reading. That is the end of the matter. If the member has concerns, then the course of action for him to take is to actually go through the Speaker, and to be able to lodge a complaint. If you feel that there is some grievances here, then this is what the Privileges Committee is about, and what you would be able to do is to lodge through that avenue—but not interfere with the process of this House, because it is not a process matter that this House can concern itself with. We move on.

Absence of Members—Effect on Voting

Points of Order

Members of Parliament— Conflicts of Interest

RON MARK (NZ First): I raise a point of order, Mr Assistant Speaker. I have also received reports of a number of Government MPs having been seen outside of the House, so on that basis I am going to ask to move that a personal vote be called, in accordance with Standing Order 144.

Points of Order

Members of Parliament— Conflicts of Interest

The ASSISTANT SPEAKER (Lindsay Tisch): No, I have concluded the vote; it is all finished. And if the member had concerns, as I mentioned earlier, he should have brought it up earlier. Once we have taken the vote, once I have announced the result, and the clerk has read the third reading, that is finished. That is the end of the matter. That is how we have always operated, and it is no recourse to that. We are now moving on. Your point of order is out of order.

Ron Mark: Point of order—

The ASSISTANT SPEAKER (Lindsay Tisch): If you are relitigating what I have said, Mr Mark, that would be a very serious matter as far as the House is concerned.

Points of Order

Members of Parliament— Conflicts of Interest

RON MARK (NZ First): I understand and appreciate that, sir, but I did raise a point of order prior to the third reading for your announcement, and I did attempt to get that through to you, and you overruled and moved forward. My—

Points of Order

Members of Parliament— Conflicts of Interest

The ASSISTANT SPEAKER (Lindsay Tisch): No, you interfered. Once we have started the vote, when you had raised a point of order I thought it was in regards to the process that we were going through at that stage. Your point of order has been about what you considered to be some affairs of certain members of Parliament, which is a very serious matter, a very serious matter. It is an allegation that this House would take very, very seriously, and why I have considered that this is a matter that you need to go and lodge through the Privileges Committee if you feel aggrieved by it. As far as the vote on this bill is concerned, we have finished that and I will not entertain any further discussion on it. The matter is finished. So we now move to the next bill on the Order Paper.

[Continuation line: Telecommunications (Development Levy) Amendment Bill 1R, Amy Adams]

Telecommunications (Development Levy) Amendment Bill

First Reading

Hon AMY ADAMS (Minister for Communications): I move, That the Telecommunications (Development Levy) Amendment Bill be now read a first time. There are few countries in the world where connectivity is more important than it is for New Zealand. We are a nation of 4.5 million people and a country situated at the last bus stop on the planet, spread across three islands with plenty of mountains, lakes, and rivers in-between. The tyranny of distance from the rest of the world, and our unique geography, make rolling out high-speed connectivity all the more difficult and all the more important. Broadband is critical to our future, because it creates opportunities of untapped potential. It connects New Zealanders with one another and with new markets across the world, and allows our best and our brightest to export new ideas, services, and products. It is a vital part of the Government’s plan in developing a productive, competitive economy and creating more jobs for Kiwis and their families. Over the past 6 years the Government has been rolling out our ultrafast broadband and rural broadband initiative programmes to lift the connectivity of 97.8 percent of New Zealanders. The first stage of that roll-out is going well. We are ahead of schedule and we are within budget. The UFB bill is at 46 percent completion, and we have completed more than 75 percent of the RBI stage one programme. Almost 325,000 households are now covered by the RBI, with 80 percent uptake of the main fixed-line component of the programme. We have upgraded almost 80 percent of towers, and installed 113 new ones. In the March quarter alone, there were nearly 1.8 million unique Vodafone mobile customers alone using these towers. In addition, we have completed the auction and allocation of the 700 megahertz spectrum, which will enable the widespread roll-out of 4G cellular networks across more than 90 percent of New Zealand. But while all of that is an outstanding achievement, as a Government we are not resting on our laurels. We are already looking ahead to the next stage. Last August we announced that, if re-elected, the National Government would look to use the Telecommunications Development Levy to extend the rural broadband programme by $100 million, and establish a fund of $15 million to provide mobile coverage to the most remote parts of New Zealand. In March I confirmed that this extension was going ahead. With the success of the first stages of the UFB and RBI behind us, this Government is looking further forward. We want to push on and extend coverage even further. We want more homes connected to better broadband. We want more businesses participating in the digital economy. We want more remote communities being able to tap into the internet’s potential. The Telecommunications (Development Levy) Amendment Bill is a vital part of this plan. The bill itself is incredibly straightforward, but let me set out a little bit about the levy. The TDL is an industry levy that is collected from all telecommunications companies to fund open-access infrastructure in areas where it would otherwise be unlikely to be commercially viable for them to build that infrastructure. The levy-payers can then use the funded infrastructure to provide services for their customers, so that the key factor worth noting is that the levy is used to fund infrastructure that all of the telecommunications companies can then use—so they are, essentially, funding their own communal infrastructure, which they then use to sell products over. The levy to provide RBI facilities is paid back to providers through contestable processes. It funds non-economic aspects of infrastructure so that the industry giants cannot just cherry-pick the profitable areas, such as high-density urban areas, and leave rural New Zealand in the dark ages. The levy was first introduced with the Telecommunications Amendment Act 2011, and has been applied since the 2010-11 financial year. It replaced the existing telecommunications service obligations liability allocation process, which had been in place much longer. This bill does not change any operational aspects of the levy, nor does it determine the perimeters for how RBI two will be rolled out. It simply resets the levy amounts for the 2016-17 to 2018-19 years, to keep the levy amount at its current level. The TDL is currently set at $50 million a year. This is about 1 percent of industry telecommunication services’ revenue. The levy amount is not going up. It is staying exactly the same so that the industry will not need to put their prices up, or explain to their customers why the bill is changing. It is worth noting that the levy we are proposing to extend is substantially less than the levies that were funded under the previous TSO arrangement, which was an average of about $65 million a year. The levy makes up a very small portion of an average monthly bill, and as this is an extension of an existing levy it will not increase costs to consumers in any way. Because the levy has been in place for a number of years now, we do not expect consumer bills to change. The telecommunications companies already incorporate the levy at this level into their pricing, and so there is no reason to change. Let me put this in context, in the impact to the average New Zealander. For a consumer on a $19 basic pre-paid mobile phone package, their contribution to the TDL is around 22 cents a month. This is the equivalent of the cost of a single text message. For a comprehensive broadband package, it is around 80 cents a month.

[Continuation line: The consumer impact is so low]

Hon AMY ADAMS

The consumer impact is so low that even if the bill did not pass, it is completely implausible to think that consumer prices would be dropped by the few cents a month that are involved. Although the impact of the levy on consumers is tiny, the impact is hugely significant for reaching rural communities. It is available to fund charges relating to the telecommunications service obligation, that is the obligation that Spark gave to provide a telephone connection to every household, options for free-calling, and the 111 service. It funds improvement to the rural telecommunications infrastructure, including, as we are discussing today, the Rural Broadband Initiative . It funds upgrades to the 111 emergency calling system, and it is already being used to fund the relay service for the deaf and the hearing impaired. These are essential services that New Zealanders need and use. The $150 million extra that this bill will provide will mean that we can set aside $100 million for the extension of the second phase of the Rural Broadband Initiative to the regions, meaning that almost every New Zealander will get access to better broadband, and another $50 million to establish a contestable Mobile Black Spot Fund to enhance network coverage in black spot areas as, increasingly, mobile coverage is expected to be almost universally available. The changes in this bill should come as no surprise. We initially proposed these changes in our election manifesto last year and announced in March that our intention was to follow through. We have been very upfront and transparent about our ambitions to extend rural connectivity and how we are going to go about funding it. Passing this bill in all stages is part of Budget legislation, provides certainty and stability to the telecommunications industry, but, even more important, allows the Government to get on with the job of rolling out the extension of the Rural Broadband Initiative and better mobile coverage to areas that desperately need it, as the legislative mandate must be in place before contracts can be negotiated, and this Government wants to get better broadband to New Zealanders as fast as we can. The Ultra-fast Broadband Initiative and Rural Broadband Initiative programmes that this Government initiated are key components to ensuring critical communication services are available to New Zealanders. Now more than ever it is important that businesses and communities right across New Zealand, and into our rural and remote areas, have access to the information and communications technology capabilities that they require to operate effectively in a competitive global economy. This bill enables us to put the funding mandate in place so we can get on with providing that connectivity. We will continue to look for opportunities to enable New Zealanders to realise the benefits of our investment in connectivity and to ensure that New Zealand is digitally competitive on the world stage. It is with great pleasure that I commend the bill to the House.

[Continuation line: Clare Curran]

Telecommunications (Development Levy) Amendment Bill

Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): Let us just be clear: a levy is a tax. You cannot dress it up. Levies are not intrinsically bad, but this Government said no new taxes. That is my first point. If you are going to introduce a new $150 million broadband tax on an industry under urgency, with no consultation and no evidence that your proposal is sound, then it will immediately flow on to consumers. This bill imposes an immediate tax on consumers for their internet, for their landline phone, for their mobile phone. Prices are going to go up and it is Amy Adams who is to blame. What this Minister is doing is one of the biggest scams this Government has tried on. It warrants examination by the Auditor-General , it warrants an inquiry, and I am surprised that Treasury has not commented on this legislation. But on closer examination of the departmental disclosure statement at point 2.3.1 , the regulatory impact statement identified that this bill did not meet the threshold for receiving an independent opinion on the quality of the regulatory impact statement from the team based in Treasury. Treasury never even got it in front of it to comment on. There is an unpleasant smell about this legislation that smacks of a Government covering up massive, wasteful spending, with very little to show for it. The bill needs a select committee. The whole scheme needs to be scrutinised. It was a Government election promise and it did not need urgency. There has been no consultation on the levy being increased or on the passing of it under urgency. Again, I refer you to the departmental disclosure statement where it was asked whether or not there had been any external consultation on the policy to be given effect by this bill or on a draft of this bill, and where the answer was no. There is huge disappointment and anger about this bill being passed under urgency and with no consultation. The regulatory impact statement is misleading. All it does is reflect the Government’s decision back to itself. There is no free and frank advice. Labour absolutely recognises the educational, social, and economic benefits to New Zealand of better rural broadband. It was our policy that all New Zealanders deserve connectivity opportunities. Labour took comprehensive policy into the election last year, for extending rural and urban connectivity and addressing the digital divides that exist. No other party did the work that we did. Amy Adams’ contribution was to announce spending $150 million of the industry’s money, which she knows will be passed on as a tax to consumers. She is too lazy, not bright enough, or trying to cover up the failure of the Rural Broadband Initiative to know that you should not spend money unless you have done your homework first. Why should we care about this? Maybe we should not care, if this was a sound policy. But it is not. This legislation fast tracks Government spending, and it is more money after bad. It is Government waste. It is economic mismanagement. Who is going to pay? The consumers are going to pay. To all consumers who have got internet and who have got phone connections who are listening to this this afternoon, your prices are going to go up. Rural New Zealand will continue to receive crap broadband. It is a flop. It is a failure. It is a disaster. It is a scandal. There is no proof that the Rural Broadband Initiative, as it is now, has worked. There are three parts to this scheme. There is the building of new towers, which the Government insists is on track, and I am hearing that there are issues with the capital that Vodafone requires to complete the job. The Government, however, insists that it is on track. However, as I understand it, all the easy ones have been built and the harder ones are still to be built. The second part of this scheme was a Chorus upgrade of broadband to 85,000 lines, which go to households and businesses. That has never been evaluated. But the biggest scam of all in the Rural Broadband Initiative is the fixed wireless component of it. That is the biggest scam. Vodafone’s role was the provision of fixed wireless broadband, capable of peak speeds of at least five megabits. So how has that worked out? Well, there are no figures. There has been no evaluation. We do not even know for sure how many people have actually been connected through this part of the scheme. Mysteriously, into my in-box yesterday afternoon came the response from a written question from the Minister. It was the first time there has ever been any indication of numbers of people who have been connected through the fixed wireless scheme. Guess how many it was? It was 8,500 people. Guess how much money was committed to that part of the scheme? It was $60 million. If you divide 8,500 connections by $60 million, guess how much that is? It is $7,000 per connection. If that does not sound like a scam and a big scandal that warrants the Auditor-General getting involved in evaluating it, I do not know what is. There are no reports. We were told by the Ministry of Business, Innovation and Employment yesterday morning at a select committee that it had done no evaluation of the Rural Broadband Initiative, and now the Minister is about to commit another $150 million to it.

[Continuation line: There is no business case. There is no]

CLARE CURRAN

There is no business case. There is no real data. There has been no consultation. But there already is data—it has not worked, and if you do not believe me, maybe you might believe the research that—

Mr DEPUTY SPEAKER: It is not me you are trying to convince; it is the House.

CLARE CURRAN: Thank you, Mr Deputy Speaker; my apologies. If the other side of the House does not believe me there is unpublished research that I have come across from Colmar Brunton, which was done for Chorus just before the election and which shows that of 600 rural businesses and 300 rural households, 68 percent are frustrated and angry with their internet connections and feel restricted and left behind. That is a pretty high figure. I am pretty sure that the Minister and her Government knew that this was an issue in rural New Zealand, and miraculously, 3 weeks before the election, we got a new policy whereby $150 million was committed to rural broadband, out of the blue, with no consultation—and no consultation since—and no business case to support it. How do we know there is no evidence? Because the regulatory impact statement says so—it actually says so in its first page. The Ministry for Business, Innovation and Employment has failed. It has failed big time to provide an analysis for the Minister. It is just doing the Minister’s bidding. So how do we know there has been no consultation? Because everyone in the industry says so and because the departmental report says so. How do we know it is going to be a tax on the industry? Because when any levy is imposed on an industry it is passed on. There is another issue, a final issue. Rural New Zealand is standing still on broadband and it is about to get more of the same. The digital divide between rural New Zealand and urban New Zealand is being entrenched under this Government. The 5 megabits that is being provided in rural New Zealand under the existing scheme is going to be provided under the new scheme. This is treating rural New Zealand like second-class citizens or poor cousins. It is treating them with disdain. Even the US has announced a few months ago a new standard of broadband of 25 megabits per second. If we stick with 5 megabits per second, then rural New Zealand is never going to go ahead. There is going to be no economic development, and it is an absolute travesty and a demonstration of regional neglect and treating rural New Zealand as if it really does not matter.

[continuation line: Melissa Lee]

Telecommunications (Development Levy) Amendment Bill

Speech - MELISSA LEE (National)

MELISSA LEE (National): I am just a tad surprised by the member, Clare Curran, who just sat down. I was slightly confused as to whether she was in fact for rural broadband or against rural broadband—I guess that is just like the Labour Party. This is actually Budget-related legislation that has been brought to the House, and yesterday when the Budget speech was read, I think the Labour Opposition was absolutely gobsmacked that we, for the first time in more than 40 years, we are delivering for the poorest people in this country and increasing benefits. There has been nothing from previous Labour Governments. We live in a world where it no longer takes ages to deliver mail. It used to be that people used to write a longhand letter, put a stamp on it, and put it in the post. It might have taken weeks before it was actually delivered. With the advancement of modern-day technology it is almost instant. Somebody could write an email from Korea or America and it will be here within a couple of seconds. Technology advancement has made our lives easier in some instances, and sometimes in rural areas it has not actually caught up. This is what we are trying to do—to provide faster internet technology for the rural areas. I know that some other countries that Ms Curran actually talked about have different speeds they are going for, and some have managed to achieve some elements of their target. Korea has been a major leader in technology, and even in Korean rural sectors, where there is difficult terrain and small groupings of houses, the target is only 2 megabits per second. In New Zealand this National Government is targeting 5 megabits per second. Tech advancements are fabulous, and sometimes I lament the bygone days when we had to send letters. There are times when I wish I could disappear from the reach of the telephone calls I get. But I digress. The Telecommunications (Development Levy) Amendment Bill is a great bill. It provides further stability and certainty to the telecommunications industry and consumers. This bill will benefit businesses, families, and New Zealand as a whole. I commend this bill.

[continuation line. Hon David Cunliffe]

Telecommunications (Development Levy) Amendment Bill

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a call on the Telecommunications (Development Levy) Amendment Bill, which is being rushed through the House during Budget urgency, setting aside the normal processes of Parliament—a select committee hearing and a report back from stakeholders. Why is this happening? I guess I can only imagine the picture in the Cabinet room when this legislation was mooted, and there was Nathan Guy, bright as button, poking his eager little eyes up above the Cabinet table, and realising that this sounded like free broadband for farmers. How wonderful! The Minister for agriculture could announce—

Hon Nathan Guy: No; primary industries.

Hon DAVID CUNLIFFE: He wants a bigger title. It happens in the third term of Government. The Minister for Primary Industries, not primary schools, wanted to be able to say in a press release “Free broadband for farmers.” National is the farmer’s friend. But nobody told him—

David Bennett: Who’s your friend? You’ve got no friends.

Hon DAVID CUNLIFFE: Oh, there is another farmer. He is still alive, is David Bennett. I have not heard from him for months and months, but he moves—proof of life! But nobody told Nathan Guy PhD that if they impose a levy on telecommunications companies , which is a new tax, it will simply be passed on to consumers, and in the end the farmers will pay. I can see the look on his face now. The camera can zoom in on the crease in his brow as he realises that it ain’t as good as it sounded. What is the ostensible purpose of this bill? It is supposedly to fix things call black spots. That is when you are driving through the country and your mobile phone drops out.

David Bennett: The Labour Party.

Hon DAVID CUNLIFFE: Well, we are law-abiding citizens. We do not often use mobile phones when we are driving, and if we do—which is a rare exception—we always have them on hands-free. But there is a thing about Northland. Occasionally, members of Parliament were in Northland for the by-election. There was a traffic jam as ministerial LTDs, BMWs, were backed up trying to get into Northland on their shabby rural roads, and it suddenly dawned on Ministers that you cannot actually use a mobile phone through most of Northland, because there is almost no coverage at all, even on the main road. So you can imagine their haste as they scampered back to Wellington and realised that Simon Bridges was a bridge too far and that the good people of Northland would not be fooled by umpty-dumpty years of neglect followed by 10 bridges in 10 days, but they could tell the difference between that and a regional development strategy, and there was a black spot all over Northland. So this bill got rushed through. This is yet another example of the National Party hitting the policy panic button. [Interruption] “Who cares?”, says the member at the back. I cannot remember his name, but he sometimes speaks in the House. He says “Who cares?”. Who cares whether it is good policy? Who cares whether it is a good investment of taxpayers’ money, because it was a bloody good press release? It sounded really good on the news, and that is all that matters, right? Post modernism—got the narrative right. Who gives a toss about the facts? That is the Government for you in its third term. Here is the issue. Have you heard of Google’s Project Loon ? Have you heard about that? Do you know what Project Loon is? What is it? He is nodding.

Brett Hudson: Balloons, my friend.

Hon DAVID CUNLIFFE: Very good, you get starter for 1.

[continuation line Project Loon is a new way of getting broadband to the rural regions by]

Hon DAVID CUNLIFFE

Project Loon is a new way of getting broadband to the rural regions by a mesh network of balloons that can broadcast, and that way you do not need expensive lines in the ground or on power poles. It may or may not work at scale around the world, but the point is this: before you go spending another $150 million of New Zealanders’ hard-earned cash you had better look at things like that.

Brett Hudson: You’ll wait for years. Mr Cunliffe suggests you wait for years. Let rural New Zealand suffer for years, he says.

Hon DAVID CUNLIFFE: There are two ways, to the noisy backbencher of the far side, that that can happen. The first is a thing called a regulatory impact statement that tests a whole bunch of options. But the department here in its disclosure has said that it really did not have time for any options analysis because this was a panic-button measure, as my colleague Clare Curran has pointed out. So there goes option one. Option two is to have a select committee process and hear from the industry. Hear from Vodafone, Chorus, Spark, 2degrees, and the experts about how they think they can get the most broadband possible to the most people possible in rural New Zealand at the least possible cost. Oops—the Government did not do that either. That is why we are here on the dead of Friday, passing this legislation through all stages under urgency, which denies the sector and the public the opportunity to comment. Why on earth would you do that when you are spending $150 million? I will tell you what: the industry is hopping mad. The Government may be the farmers’ friend, but it is certainly not the friend of the telecommunications companies right now, because they know it is a muddle waiting to get worse—a muddle waiting to get worse, let alone that it is a broken promise—

David Bennett: Sounds like the Labour Party.

Hon DAVID CUNLIFFE: —let alone that members like Mr Bennett could not give a toss about the facts—they are interested only in the media—and let alone the fact that this measure has not been justified in terms of evidence or a select committee process. This is bad law making and it is a bad process. The broadband obligation that is contained in this bill will be passed on to consumers. There is no such thing as a free lunch. A telecommunications levy can be levied on the phone company but of course it will pass it through and it will be Mr Guy’s farmers whom he will have to face when their phone bills and their broadband bills go up because nobody has done the analysis to find the cheapest way to get them the bandwidth. But let us just assume that all of those problems were not there. Let us just assume that the Government had done its homework, it had done options analysis, it was having a select committee process, it had consulted the industry, the industry was onside, and that consumers were going to get a good deal. Just assume for a moment that was all true. Ah—the other big problem every time the Government goes near broadband telecommunications is that nobody hooks up. The Government set an objective of 80 percent coverage for its ultra-fast broadband. Well, nobody was ultra-fast to hook up to the thing. The last time I looked there was about 3 percent usage. Three percent of New Zealanders have actually ponied up the connection costs to hook themselves to the so-called ultra-fast broadband network, and that was in the cities, where it was easy. Spend another $150 million of taxpayers’ money with no select committee process, no data analysis, and no consultation with the sector, and guess what is likely to happen—sweet nothing, because people cannot see the reason to spend $2,000 or $3,000 of their hard-earned savings to hook up to a system that may or may not work. That is why there has been a knock-on effect through the sector from this Government’s incompetence. Here is the sad story, although it is mainly about urban not rural areas, but it is relevant. Chorus pressed the panic button. It rang up Steven Joyce and his sidekick Amy Adams and said: “Hell, we are going to go bankrupt because you put us over a barrel with the ultra-fast broadband roll-out costs. It looked OK, but as nobody is actually joining up and no one is using it, we are losing money. Please write us a big fat cheque.”, or words to that effect. So what did the Government do? The so-called economic managers who are zero for seven on running a surplus said: “Sure.” They rang up Mark Ratcliffe and said: “Mark, how big a cheque do you want?” He said: “Oh, well, look, it’ll look better if you just let us renegotiate our ultra-fast broadband contracts.” So they did. Chorus shares rose faster than just about any other share on the stock market last year because the deal that it got out of this brain-dead Government was just so sweet that they were rolling in shareholders’ funds, and the Government got duped. Well here we are again. The Government has obviously learnt from its mistakes because it would never again spend taxpayers’ money without consulting the sector or having a rigorous select committee process. Oops—except here we are on a Friday passing this $150 million new tax through all stages without a hearing. Can New Zealanders see the problem with this process? I will you what—the telecommunications company sector can, and even Nathan Guy’s favourite farmers will when they pick up the bill. Mr Guy’s smiling face, as he lifts himself up to the Cabinet table, will not be smiling quite so much. Thank you.

[Continuation line: Simon O’Connor]

Telecommunications (Development Levy) Amendment Bill

Speech - SIMON O'CONNOR (National—Tāmaki)

SIMON O'CONNOR (National—Tāmaki): I am not sure who that member was at the backbench of the Labour Party who was just speaking but there were two interesting themes. One was about Project Loon from Google, and Labour would know all about that—hot air and balloons floating around in the stratosphere, and it is like the balloon in Missouri that crashed to the ground recently. The Labour members were also, I see, talking about black spots, and I think the Labour Party knows all about black spots because most of them would have loved to be in a black spot yesterday when they heard their leader’s speech falling on deaf ears and collapsing and crashing to the ground. This is a good bill. It seeks to increase an existing levy in order to roll out services that our people want. I was on a select committee yesterday where we were hearing evidence from people who were saying that they want more broadband, be it in the rural or urban areas. They want it faster as well—that was one of the things they said. This is a Government responding to that. You are hearing very positive thoughts from this side, but, unfortunately, all it is from the other side is ad hominem. With that, I take my seat.

[Continuation line: Gareth Hughes]

Telecommunications (Development Levy) Amendment Bill

Speech - GARETH HUGHES (Green)

GARETH HUGHES (Green): Kia ora, Mr Deputy Speaker. Ngā mihi ki a koutou, kia ora. I rise to support the Telecommunications (Development Levy) Amendment Bill. This is a pretty uncontroversial bill, and it should be. It is simply keeping the telecommunications development levy where it is. You could argue it is marginally increasing it, but look, it is keeping it where it was, at $50 million. This increase is for $100 million to spend on Rural Broadband Initiative 2, and then $50 million on a contestable mobile black spot. It is fulfilling a Government election policy. We are disappointed with the process. We think it could have gone through a select committee. There is no reason to pass this bill through all stages today on a Friday afternoon or early evening. The fact is that the Government has sat on its hands when it comes to this issue since that election promise. When it comes to actual industry involvement, the Government’s own officials advise that no one in the industry was consulted, and, in fact, the officials then go on to say that at least they will get a parliamentary process to give their input, which we will not see, given this bill is passing through all stages. It is unfortunate that we are seeing this pass in the way that it is. The second unfortunate aspect of this is that this is an area that the Government is currently consulting on—it is currently consulting on it. So at the same time it is passing legislation through all stages in a single day under urgency, it is asking the public and the industry to consult on the process for spending. It seems a bit like the horse after the cart. I raise these issues because I think that a critical question this Parliament needs to ask itself is: given the questions around the original Rural Broadband Initiative, what we do not want to see is simply a cut-and-paste job with this extra $150 million for Rural Broadband Initiative 2. That is why I support greater industry and public input and a better process. But I am supporting this bill because of the importance of the internet to our rural communities in terms of social cohesiveness, health outcomes, and regional economic development. We know that the internet plays a critical role for our communities and we have been hearing about those communities on the Commerce Committee—from Outram, Mosgiel, and from a host of communities that have not been able to access ultra-fast internet to date—and how it is holding their communities back. I have a vision that kids in rural schools can access the world’s best educators via the internet. Our farmers who are using data to increase their productivity can do so more and sell their products around the world. When it comes to the internet, it breaks down some of the strategic challenges our country faces. There is a limit to how much milk powder we can export around the world. In fact, we are seeing it in our streams and rivers at the moment. There is no limit to the amount of intellectual property, services, new ideas, and entrepreneurialism that we can be exporting across the internet cables. As the Government is now, with this legislation, set to spend more than $2 billion on internet access over the course of its term, we have to ask ourselves whether we are simply just building an ultra-fast intranet. We also need to focus on those international conventions, which is something the Green Party has pushed.

[Continuation line: So rural broadband is good for farmers]

GARETH HUGHES

So rural broadband is good for farmers, it is good for kids, it is good for our rural communities. It lessens that digital divide, which we know is based both on income but also on region. Disappointingly, when you look at the original Rural Broadband Initiative though, the Government cannot point to a comprehensive economic evaluation of its outputs. This is important because we know that a lot of our communities are not able to access ultra-fast internet , particularly in rural regions. The Government is able to point on paper to the amount of potential connections, but I think for many communities that sounds and rings hollow. They want to know how many people are actually connected. We can do this for the ultra-fast broadband project but not for the Rural Broadband Initiative. We should be measuring this stuff. We should be getting value for money for spending $300 million to date and the additional $150 billion the Government is now wanting to spend. It is important to invest this money. We saw from the report by Hayden Glass and others from the Sapere Research Group that providing greater internet access and use of the internet by our businesses could deliver $34 billion in economic benefits. We can see our regional economies thrive. I will not name the person but I know someone down south who literally is managing a network of global satellites for climate change research, managing assets worth hundreds of millions of dollars, yet this person is able to live in picturesque central Otago. We know that there are a lot of people who would love to come to live in New Zealand, and we need to attract the quality of those who want to live here by our quality of life. So let us build up our regional communities. Let us offer them good internet access. I would like to touch on some of the questions and concerns. We have heard some of them from the Labour Party members. I think there are three big concerns around the evaluation of the reporting, around the role that Vodafone has played to date, but also around an expectation gap. So let us look at the effectiveness of the original Rural Broadband Initiative. It was a $300 million investment. It is incredible that the Government cannot point to a comprehensive evaluation. I think when you are spending such significant sums of taxpayers’ money it is prudent and reasonable to be able to ask those questions. We are seeing a market failure in our regions. Obviously, the big telecommunications companies are not rolling out ultra-fast broadband to the level they are in our cities, and you can understand that. That is why everyone, I believe, in this House thinks it is eminently reasonable for public subsidies to rectify this market imbalance to provide internet access to our communities. So a subsidy is valid, but, look, taxpayers want to know whether their money has been spent in a cost-effective manner. They want to see the benefit-cost ratios. The Government does not ask these questions, basically, because the asset infrastructure it is installing is open access and anyone can use it. But I think that rings hollow. I think that the Government—and I place the blame squarely at Steven Joyce’s feet—should have made this a requirement of the contract. Look, if the Government is going to spend $300 million of the money of telecommunications companies’ customers ultimately, it should be able to at least say how many people are connecting, as they can, for the ultra-fast broadband. Do not just take my word for it, we have seen Chris O’Connell of the Telecommunications Users Association of New Zealand write in August last year around some of the questionable Rural Broadband Initiative spends. He writes: “my recent travels have shown me that the RBI has yet to make a real impact and even when it is available it’s is decidedly average in its performance, because it is basically delivering last decades broadband at best and often less than our innovative regional wireless ISP’s have been doing for years.” So we have got to question this. We have got to have that evaluation and I will be pushing through the Commerce Committee for us to actually show some leadership, step up, and do that evaluation. The second key concern is around Vodafone’s role in the original Rural Broadband Initiative. It received $60 million of telecommunications development levy funding for the wireless Rural Broadband Initiative stage. It has been estimated that only 8,000 people have connected to Vodafone’s wireless system—8,000 people from a $60 million investment. If you do the simple maths $60 million divided by the 8,000 customers is $7,500 per connection. Let us have that debate as to whether that is a worthwhile use of taxpayers’ money or not—but let us have the facts and have that debate. I am concerned to read in the officials’ advice to the Government in section 17 that they do anticipate that the majority of funding will go to the larger telecommunications development levy players. This is concerning because there are questions around Vodafone’s wireless versus the Chorus copper upgrades and cabinet upgrades. So let us have those questions. We have also, thirdly, there is an expectation gap arising from our regional communities versus our urban communities over what they can expect. The Government has really got to step up here and show some leadership. It needs to improve its communication. It needs to actively communicate the time lines to these communities. To address some of these concerns around further telecommunications companies and customers subsidising particularly large players—and I am thinking of Vodafone here—I have Supplementary Order Paper 83 in front of the House that will request the Minister to take regard in her decision-making to ensure the use of the telecommunications development levy to promote competition, to promote diversity in non-urban telecommunication markets, and to look at the range of different technological solutions. We have heard of the Project Loon balloons, and it is true that technology is changing fast, so I think it is prudent and eminently reasonable that the Minister should have regard to new technology. Secondly, the Government also, as part of the 700 megahertz spectrum auction, has achieved at discount for the successful auction winners around 75 mobile towers to eliminate some of the regional black spots. That is a good thing. That is why I have got another reasonable Supplementary Order Paper in front of the House to make sure that those existing telecommunications companies who have received a discount from the spectrum auction are not going to be able to access telecommunications development levy funds and, essentially, get a second bite of the cherry. These are two issues I think that Government members should be able to agree with and, if they do, they should support them, and there is no reason not to. There is the Green Party position. We stand for good regional internet access. We have got some concerns around the process, some suggestions, and some solutions to make it better, and that is why we are supporting the bill today. Kia ora.

[Continuation line: Martin]

Telecommunications (Development Levy) Amendment Bill

Speech - TRACEY MARTIN (NZ First)

TRACEY MARTIN (NZ First): Kia ora, Mr Speaker. New Zealand First will be supporting the bill. Again, we agree with the Green Party. We believe that it is a non-controversial bill. There is only one thing that we would agree with the Labour Party contribution on to date and that is the fact that this is actually a broken promise. It is a broken promise to the telecommunications companies, however, and that is something that the telecommunications companies need to work out with the Government and the Minister. With regard to where this bill came from, let us talk about the fact that much has been made of the possibility that there has not been any consultation around this. The reality is that this is an amendment to an amendment. The Telecommunications (TSO Broadband and Other Matters) Amendment Bill 2010, which was brought into this House, with the member responsible being the Hon Steven Joyce, actually set up this levy to start with. In this case, New Zealand First would actually believe that it is a levy under the dictionary meaning of the word “levy” as opposed to the term “tax”. So therefore we believe this is a levy. However, in 2011 when this bill was finally given Royal assent, back in June 2011, the agreement that was reached, and the table was put inside that amendment to the Telecommunications Act 2001, was that in 2016 the $50 million contribution, which was spread over 22 telecommunications companies, would then be dropped to $10 million only. And at that time, way back then in 2011, consultation was done. We understand that there were telecommunications companies that were not thrilled that they became part of that process. We understand that Chorus took a case to the Commerce Commission and argued that it should not have to be part of this levy payment. We understand that other telecommunications companies took cases and sought that. Skycity, for example—not Skycity, I beg your pardon; the National Party and Skycity are normally so connected, sometimes I forget,—should actually be part of this levy payment because there is now so much content that is actually put out over those networks. Possibly—possibly—that is something that a review might pick up, that maybe there are more people, more corporations, or more companies with the shift since 2011 around what is delivered over this digital environment. Perhaps there are more that should be contributing into this levy pot. But the reality is that this levy needs to be extended for the continuation of the Rural Broadband Initiative . It needs to be extended and we are very pleased to see the establishment of a mobile blackspots fund.

[Continuation line: We can only assume, as Mr Cunliffe said]

TRACEY MARTIN

We can only assume that, as Mr Cunliffe said, when driving through Northland on a bus or in any other sort of mode of transportation, one realises more often than not that you have just lost signal again. The reason why New Zealand First will be supporting the Green Party’s Supplementary Order Papers is that we want to make sure that that mobile black spot funding is tagged and can be used only for the delivery of that service to our consumers. We can only hope that people like Robin Dixon, in the middle of the Dome Valley, again, sitting in the super-city of Auckland, will be able to stop going outside her house, standing on one leg with her arm in the air on a hilltop, trying to get a signal, if this fund is tagged and kept and spent exactly for that. We can only hope that with the extending of the Rural Broadband Initiative, Ōmaha, again, sitting in the middle of the super-city—I am just going to quote from an email sent to John Key—that would be Prime Minister John Key—by his neighbours in Ōmaha. Let us remember that Ōmaha sits in the super-city of Auckland. When we talk about the Rural Broadband Initiative, Ōmaha is actually sitting in the super-city of Auckland. The email says: “Ōmaha is a part of a fast-growing area, taking into account new subdivisions in Matakana, Point Wells, and further intensification of Ōmaha itself. We are close to Warkworth and know it of significant growth as a future satellite town for the Auckland Council. In simple terms, we have very poor radio reception, poor AM and virtually no FM capability at all. We cannot access free-to-air HD television signal. Terrestrial TV signals are too weak. We have extremely low internet speed, a maximum of 5 MBs, which slows by 90 percent on weekends and busy periods. Ōmaha and close are not included in the UFB rollout.” But it is in the super-city of Auckland. We can only hope and we support the fact that with this extension of what is an already consulted on levy with the industry—it may not be happy about the fact that it is going to continue, but it was consulted on—this dedication of another over this—it is up to 2020, this extension. It is not another $150 million in this coming financial year; it is $50 million in the pot and extending that levy from 2016 all the way through to 2020. We can only hope that by using that money, places like Ōmaha and places like Northland will be able to have these issues addressed. However, we think it is also a very fine suggestion by the member from the Green Party that the Commerce Committee should pick up this topic around evaluation. I mean, one cannot miss the point that the original amendment that this bill now extends was sponsored by Steven Joyce, and the fact that other contracts that Steven Joyce has negotiated and other situations like this where there have been levies and so on with telecommunications companies have not gone that well. So it would not be untoward, in our view, that the Commerce Committee should take this as an inquiry topic or as an evaluation topic and we let it do the work. I understand that it is not necessarily doing a lot of legislation work at the moment, so there is some space for it to actually do this. It might even fit with some cabling inquiry that it is doing right now. The only other thing I guess I would address at this first reading speech is the comment about New Zealanders wanting to know how many people are connected. I take on board $60 million divided by 8,000 is $7,500—

Kris Faafoi: Ish.

TRACEY MARTIN: —ish—but, actually, most of the New Zealanders I know do not care about that. What they want to do is they want to connect. They want—

Clare Curran: But they can’t.

TRACEY MARTIN: Exactly. That is exactly what I am talking about, Ms Curran. They want to connect. They want the Rural Broadband Initiative to actually work. They want to be able to get in there. They want to have their children to be able to do their homework at home. They want their schools connected. They want all that to happen. They want it to happen now because they are being held back. This will not put up the price. In our view, this will not put up the price for the current consumers. This has been in place since 2011. This is not an increase of a levy; this is an extension of a levy. The companies also already knew it was coming. They were consulted in 2011. The Minister and the Government indicated this before the last election and also indicated again in March of this year. I can appreciate that those telecommunications companies may have projected their budgets out and they are going to have to do Budget amendments. I can appreciate that their shareholders may actually have to take a cut. I can appreciate that. But I think it is a little bit of a stretch to suggest that the extension of a levy is going to mean that this huge amount of increased cost is now going to be placed on top of consumers, when the levy has already been there. New Zealand First will support the bill because we want to see this finished, but we will be supporting the Green members’ Supplementary Order Papers and we would certainly support the Commerce Commission working on an evaluation around what is going on now. Perhaps later we will talk about the dangers of changing course midstream to look at other technology, because technology is always improving but you do not necessarily change to balloons just because balloons are there.

[continuation line: Judith Collins]

Telecommunications (Development Levy) Amendment Bill

Speech - Hon JUDITH COLLINS (National—Papakura)

Hon JUDITH COLLINS (National—Papakura): What a joy to be able to contribute on the Telecommunications (Development Levy) Amendment Bill. Having listened to all of the previous speakers, I think we are in danger of peace breaking out. Fantastic! I never thought I would say that I agreed with almost everything Tracey Martin from New Zealand First said. I never thought—ever, ever, ever—and not in my wildest nightmares believed that I would ever say that I agree with almost everything Mr Gareth Hughes from the Green Party said. I have to say, that was spectacular, except for the thing about the inquiry nonsense and attacking my dear colleague the Hon Steven Joyce. I do not think we want to do that. What I am really pleased about—

Hon David Cunliffe: She’s having to cast a wide net for Cabinet votes now. She’s even asking the Greens for votes.

Hon JUDITH COLLINS: Oh, Mr Cunliffe is upset because I have not mentioned him. All right. I really liked the thing where Mr Cunliffe said: “It looked OK but no one signed up.” He was talking about his own leadership, of course. But apart from all that, to hear that we have 73 percent of rural homes now with the Rural Broadband Initiative—that rollout has happened—that is fantastic. But the Green Party is dead right. Not having broadband, particularly in rural areas, is not only really disadvantageous for homes and for people in businesses but also it is a danger now. In so many places along the roads in various parts there are black spots. It is now a danger, because we have mobile phones not just because we like to but because it is a safety measure. I think we need to sort this out in the 21st century and I fully support this bill.

Telecommunications (Development Levy) Amendment Bill

Speech - Hon JUDITH COLLINS (National—Papakura)

The ASSISTANT SPEAKER (Lindsay Tisch): A 5-minute call—James Shaw.

[continuation line: James Shaw]

Telecommunications (Development Levy) Amendment Bill

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): I rise to speak to the Telecommunications (Development Levy) Amendment Bill and to agree with virtually all of the previous speakers on this bill. What does the bill do? It increases the existing levy, it extends the Rural Broadband Initiative, and it creates a mobile black spots fund. The ultra-fast broadband rollout around New Zealand has not been smooth over the last few years, but it is critical. Although it has had its rough spots, it is incredibly important that it continues and that it gets completed. That is because ultra-fast broadband is an absolutely critical piece of New Zealand’s economic infrastructure. I have just spent most of the last 10 weeks travelling around places like Northland, Gisborne, New Plymouth, Whakatāne, the Coromandel, Whanganui, down to Invercargill—incredibly remote places around New Zealand. The divide between our rural and provincial towns and our main urban centres is enormous. If they do not have access to broadband, it is going to get worse and worse and worse. As my colleague Gareth Hughes said, that is because the internet provides us not just with economic infrastructure but with access to educational opportunities, to health care opportunities, to the ability to connect with one another. In terms of the economy, of course, the digital economy is how we are going to get to a sustainable, smart Green economy, which the Green Party has been talking about for years and years and years, and the idea of weightless exports, where we can earn huge amounts of revenue without having to transport heavy goods or pollute or degrade the environment. Given the tyranny of distance that New Zealand has historically been subjected to, this is an absolutely critical piece of infrastructure for us.

[continuation line: I will also just say something about the mobile black spots.]

JAMES SHAW

I will also just say something about the mobile black spots. In addition to the safety component to it, this is a really significant tourism issue. An increasing portion of our tourism dollars are coming from, particularly, China and East and South Asia where the expectation is that you are connected all the time. It is actually not meeting our tourists’ expectations that they are traveling around parts of New Zealand and they cannot connect to the internet and to Facebook to be able to post their photos and so on. Of course, that word of mouth gets back to their home countries, and it weakens our reputation in the tourism sector. Most significantly, as I was saying before, this is about the rural economy and our ability to develop in areas where we currently have a massive divide. Not getting this piece of infrastructure in place will make it even worse. As my colleague Gareth Hughes said, we do have some concerns about the bill. It does seem odd to us that the Government is currently consulting on how it will spend the money and is passing a bill under urgency for raising the money that it is currently trying to work out how to spend. That does seem like putting the cart before the horse, but we can work with that because we do believe that this is so important to get through. Having said that, it does seem odd that this bill is being passed under urgency. There does not seem to be any real need for it to get passed tonight. It could go through a proper process of evaluation through the select committee process and so on. We will be putting forward two Supplementary Order Papers later on during the debate about promoting competition, promoting diversity in the system, and exploring new technologies as well. The second Supplementary Order Paper is to prevent telecommunications companies from having two bites of the cherry. We do hope that those will get accepted and that they will improve the bill, given that it is passing through urgency so quickly after the Budget. Overall, we do support this bill, and I commend it to the House.

[Continuation line: Kris Faafoi]

Telecommunications (Development Levy) Amendment Bill

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): It is my pleasure to take a call on this Telecommunications (Development Levy) Amendment Bill. One hundred and fifty million dollars is a lot of money. It is a lot of money for this house to expend, so if we are going to do that, we want to make sure that it is going to be an effective use of money. When it comes to the Rural Broadband Initiative 2, the $150 million that this basically is going to create, we want to make sure that the Rural Broadband Initiative 1 has been effective. For those at home who do not know what the Rural Broadband Initiative 1 is, that is roughly about $300 million, $250 million of which has come from the telecommunications development levy, which has helped some of our remote areas in our rural sector become more connected. There are many, many reasons why that is good for our country—and they have been said on both sides of the House—like, obviously, the primary sector, the health and well-being of our remote areas, and, of course, economic development. The reason why we do have a problem with this piece of legislation is that we have not had enough of an assessment of the Rural Broadband Initiative 1—the first $300 million of this programme—to see whether or not it has been effective. At the Commerce Committee, a select committee that would have loved to have seen this bill, by the way—I will come back to that later—we heard from a number of submitters just on I think it was—

Clare Curran: Yesterday.

KRIS FAAFOI: —yesterday morning. Oh, it seems so long ago! Yesterday morning we heard about the lack of assessment that has been done about the spending and the effectiveness of the Rural Broadband Initiative 1. We do have an issue with this piece of legislation, of course, it being a new tax, but also because we have not seen enough evidence of the effectiveness of the Rural Broadband Initiative 1. I do want to point to a submission given to us yesterday by InternetNZ, if I may, at the Commerce Committee where it pointed out its concern around the lack of assessment of the Rural Broadband Initiative 1. This came about via three areas of Otago who have commissioned the Commerce Committee about the lack of effectiveness, in their experience, of the Rural Broadband Initiative 1. Basically, they do not think that this initiative has served their community well and that it has not made them as connected as was promised by the Government. InternetNZ said in its submission: “These petitioners are motivated not by a lack of clarity but by a lack of satisfaction, and we see a different requirement. This could call for a verification of commitments made as part of the Rural Broadband Initiative deliver to ensure that whatever provider responsible is delivering the expectations that were set. Have the committed time frames for the Rural Broadband Initiatives been met? Is the minimum speed commitment of 5 megabits per second also being met?”. There is concern out there in those rural communities, which were promised a service of 5 megabits per second, but that has not been their experience. For us to sit here and say “Well, that’s the experience of $300 million of investment.” and we are about to say “Here’s another $150 million for the second phase of the Rural Broadband Initiative.” then we on this side of the House think we need a better assessment of whether that $300 million that has been spent on the Rural Broadband Initiative 1 has been spent effectively. There are some good things in this bill, I believe, especially around the black spots. I think that is a good development in terms of State Highway 1—if someone can look at the Ngauranga Gorge that would be quite useful—but also for tourism as well. If we can get the Government to look at those black spot areas, that will be useful. This piece of legislation does not meet the test for us to support it because, as I said, $150 million is the commitment here. That is $50 million for each year that we are continuing this levy—a levy that was not necessarily promised. We want to know, if we are going to be spending $150 million more, whether the first $300 million was spent effectively. Communities in small, remote, rural areas around this country do not think that is the case. InternetNZ—a bit of a watchdog for these kinds of issues—does not believe that is the case. Because of that, we share those concerns and we are not going to support this piece of legislation.

[Continuation line: Kanwaljit Singh Bakshi]

Telecommunications (Development Levy) Amendment Bill

Speech - KANWALJIT SINGH BAKSHI (National)

KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to contribute on this bill. I would like to share something with this House. Last month we visited Spark and it shared a very interesting fact with us about how internet has changed the whole scenario in New Zealand. It mentioned that 15 years ago the total traffic of internet from New Zealand was 40 gigabytes. The total traffic from New Zealand was only 40 gigabytes, and today the average household has got a connection of 40 gigabytes.

Paul Foster-Bell: How much?

KANWALJIT SINGH BAKSHI: Forty gigabytes on average.

Kris Faafoi: Who told you that?

KANWALJIT SINGH BAKSHI: Spark told us. You were there, I think, Kris.

Kris Faafoi: No, no, no.

KANWALJIT SINGH BAKSHI: Yeah. You heard that.

Kris Faafoi: I was at the Porirua McDonalds.

KANWALJIT SINGH BAKSHI: Oh, OK. Technology is changing, as we heard from a lot of members. This is a very good bill, which will make the difference. I commend the Minister, the Hon Amy Adams, for her thoughtfulness and I commend this bill to the House.

[Continuation line: David Clark]

Telecommunications (Development Levy) Amendment Bill

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): It is not often that I rise as speaker No. 11 on a bill with some breaking news, but today I have some breaking news. It is interesting that the member opposite who has just taken a seat, Kanwaljit Singh Bakshi, mentioned a visit to Spark, because Spark has just put out a press release in the last hour explaining very clearly that this is going to cost customers across their whole user base. This is a new tax. Spark is saying it is going to pass it on to its users and it is going to be transparent about that. It has just put out a press release and the members opposite might like to think about the cannon fodder they are going to be when they get back to their electorate offices, because Spark is saying it is going to pass it on to every single user in New Zealand because this is a new tax. It is going to cost New Zealanders, and that is another broken promise from this Government. I will read out what it says in the press release for the benefit of this House: “‘Now that the Government has confirmed the levy will continue, rather than reduce as originally legislated for, it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers. We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution they are making to the Government’s Telecommunications Development Levy fund,’ says Mr Moutter.” That is a clear picture of a new cost to customers. That is what Amy Adams said would not happen in her speech in slot No. 1. By slot No. 11, the news is out: it is happening, New Zealand.

[Continuation line: This Government has broken another promise. It is introducing a new]

Dr DAVID CLARK

This Government has broken another promise. It is introducing a new tax. They should have known this—they should have known this. This is also new and has not been covered in the previous speeches. Perhaps they have not read the departmental disclosure statement. Perhaps it was too rushed for them to get to. But I believe that the Minister will have read this. The Minister will have read this. If members in the House turn to page 8 of the departmental disclosure statement I will read it out to them. It is headed: “Charges in the nature of a tax”. This is in the departmental disclosure statement. “4.2 Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?”. The department says, and I will hold the statement up for those at home—they probably cannot read it. It is highlighted, but it is on the website if anyone wants to go and have a look. The answer the department has given is “Yes.” This is a new tax. It is in the nature of a new tax. We heard yesterday Paddy Gower on TV3 ask the Minister of Finance: “Is this another broken promise? Is this a new tax, Mr English?”. He said: “Well, um, mm, ah, you can call it what you like.”, and so on. He would not admit that this was another broken promise from this Government. Well, now we know that that is going to be an additional cost to customers, and different from what Amy Adams said in speech No. 1 in the first reading of this bill. Now, in speech No. 11, we know that there is an additional cost to New Zealand broadband users. This is a Government that is determined to charge more people for the use of rural broadband. It has not even measured the effectiveness of this scheme. That is the great shame. My colleague Kris Faafoi drew attention to this, and so did my colleague Clare Curran earlier on. We have heard from InternetNZ. They believe that it would be in the interests of the select committee to take leadership on this issue. We do not know whether the Rural Broadband Initiative has worked. We do not know whether it is a successful scheme because there is no data to measure it. The Government has not measured the success of the scheme, but it is about to give another $150 million in the area. Current spending on the scheme amounts to about $7,500—$7,000 my colleague Clare Curran has calculated—for each and every household that has taken up this scheme. It is hardly value for money. This is a Government that is failing. It is scratching around. It does not have a long-term plan. It is trying to make it look like it is doing something, but we learnt today that there is a new charge, a new tax. The Government had been warned about it in the disclosure statement. The Government knew this was a new tax, and it did nothing to stop it, despite promising to the electorate before the election that it would introduce no new taxes. It reminds us, of course, of the GST increase. John Key said he would not increase GST, and then, fast forward, in Government, and it went up to 15 percent. It reminds us of the wage rise promise. By the end of next year employees should expect a wage increase of about $7,000. Well in this Budget we heard the Minister of Finance kick that promise out 3 years. We were promised that exports as a percentage of GDP would rise to 40 percent under this Government, and then we have heard since that Bill English says they would need to double the rate of improvement that they currently have in order to achieve the target. It is out of reach. The final biggest promise that the Government has broken, the promise that was central to its election campaign, was that it would get to surplus. It is broken promise after broken promise after broken promise after broken promise after broken promise. That is five I have gone through—five broken promises in this Budget alone. This is a Government that is out of touch with New Zealand. It is now so arrogant that it thinks it can say to the electorate: “We will not introduce new taxes.”, and then put them in straight away, in its first Budget after the election. This is a Government that is out of touch and out of ideas. We will hold it to account on this side of the House. There has been a review called for. The Ministry of Business, Innovation and Employment says that there is no way it can measure whether this has been good value for money. The Government does not care what happens with New Zealanders’ money any more. It does not want the criticism. It does not want to know if it is not working. We are being told by the companies using the system that it is not working. We are being told by the department that it cannot measure it. It is not good enough. Taxpayers deserve better. Then, of course, the point has been made that this bill is being passed under urgency, without the opportunity, for example, for those telecommunications companies to tell the Government that this tax is going to increase costs for customers, this tax is going hurt ordinary New Zealanders, it is a broken promise, and the Government should not go through with it. The Government should indeed review the system to make sure that the money is being well spent. I know why the Government is hiding this. I know why the Government is rushing this through under urgency. It is because the programme is failing. I know that from my own electorate. The people out at Karitane, a rural area, put up a petition to this House because they were so concerned about the internet speeds they were experiencing. People were telling me they could not run businesses from home—they simply could not run businesses from home, things were so bad. Then there were letters to the providers and there were letters to the Minister. Nothing happened, but following a petition to the select committee and other petitions to the select committee, lo and behold the problem was fixed. Well, I urge all of those rural communities around New Zealand—if you are unhappy with a new tax and an unhappy with the slow progress on rural broadband and unhappy with the broken promises of this Government, please start a petition yourselves. Please ask for proper rural broadband in your areas. This is a Government that is failing to diversify the economy. It is failing to deliver on its export targets. If the Government does not actually review what it is doing, and increase rural broadband and broaden the base of our economy so people can run other new industries, then it will continue to fail and we will slip further and further behind. A Government that is prepared to manage decline is not a Government that we need. We need a Government with a plan. We need a Government that will keep its promise, and that will stick to what it says it is going to do. This broken promise is not acceptable, and New Zealanders will not roll over and take it without a fight. This tax is just another broken promise. The broken promises mount up. A Government with so many broken promises is losing the confidence of New Zealanders. I ask New Zealanders to start their own petitions in those rural areas, to petition any committee. Ask your local MP how you at home can start a petition that will be acceptable to Parliament and passed on to a select committee for consideration. This Government needs to hear it. It is so out of touch that it does not even know what is going on, and it does not want to know what is going. The Government will not launch an inquiry into what has happened. It is determined to spend more money, without asking what is happening, without consulting stakeholders, and to ram legislation through this House. We have heard it today, we have heard it now, in the last hour, that this levy, which the department says is in the nature of a tax—another broken promise—is going to be passed on directly to customers who are users of broadband. Broadband is the very thing we need to be happening for our economy to broaden and get ahead. The Government has broken its promise to grow jobs, it has broken its promise to lift wages, it has broken its promise not to introduce new taxes, and it has broken its promise to get to surplus. This is a Government that is out of ideas, and a new tax seems to be what passes for a big idea under National. It will not do.

[Continuation line: HUDSON]

Telecommunications (Development Levy) Amendment Bill

Speech - BRETT HUDSON (National)

BRETT HUDSON (National): It is an absolute joy to rise and speak in this first reading. It is incredible—twice incredible. Yesterday the Minister of Finance delivered an incredibly good Budget—one that helps those in most in need by increasing real benefits for the first time in 43 years. Those members over there should hang their heads in shame at the two previous Labour administrations. Absolutely shocking, and today it is incredibly bad that the same Labour members are opposed to helping people in rural New Zealand by expanding the rural broadband coverage. Dr Clark just said that he thought that communities should encourage us to give faster broadband, although he is going to vote down this measure that is going to expand the coverage. This is a great bill. I commend it to the House.

[PV on first reading—Ayes 89, Noes 32]

[Continuation line: Second Reading – ADAMS]

Telecommunications (Development Levy) Amendment Bill

Second Reading

Hon AMY ADAMS (Minister for Communications): I move, That the Telecommunications (Development Levy) Amendment Bill be now read a second time. We heard a lot in the first reading, in the various speeches. We heard from process issues to Labour wanting to declare this successful important programme a failure. Well, we know that it never wanted it. We know that if it had been in Government, it would not have done it, but I can stand here as a rural MP—one of the few who has actually contributed on this—that I am incredibly proud to say that we have already brought better broadband to more than 325,000 rural and provincial houses. I know that that matters in rural New Zealand, and this bill is about taking that even further. We have heard claims that this is somehow a surprise move and we have slipped one past New Zealanders. We announced this in August, which was pre-election. We announced it again in March, which was several months ago.

Hon David Cunliffe: Why is it going all stages in urgency—what’s the hurry?

Hon AMY ADAMS: The bill is the most simple bill imaginable, with one operative clause doing exactly what we said it would do. To answer Mr Cunliffe’s very simple point, the hurry is that New Zealanders want broadband, they want it fast, and we are going to do everything we can to get it to them. I also want to reiterate at the beginning of this contribution that the telecommunications development levy cost for consumers is a few cents a month—a very few cents a month—and it has been built into prices for some years. The costs to the telecommunications companies remain exactly the same under this bill. This extension comes into effect on 1 July 2016, but it has not taken some of the telecommunications companies long to jump at the chance to announce price rises and blame the Government. I have to say, to claim that this extension warrants a price rise is disingenuous at best, and a blatant money grab at worst. Furthermore, the changes do not take effect for 14 months. Given that the telecommunications development levy represents a few cents a month, I will be very interested to see whether prices do rise, when, and by how much. If they do, it is a blatant grab for more profits that they want to blame someone else for. Let us be very clear about this. What Spark is saying is that it thinks that taxpayers should fund its business infrastructure. We do not. This is infrastructure that telecommunications companies use to provide their commercial services over, and we think that they should pay for it. I am not going to charge every New Zealander to fund business assets for Spark, Vodafone , and others to use. They should pay for it—which is why we levy them—and then provide it on a common basis. It is a well-designed process, it works well, and New Zealand likes it. The first phase of the Rural Broadband Initiative programme is creating a huge opportunity for regional economic growth, and that is something that this Government is delivering. Alongside investment from the partners, the Government’s deployment of the Rural Broadband Initiative is delivering better connectivity to our rural and remote communities. The next phase will build on the success of that by providing infrastructure to rural homes, to farms, to schools, to businesses, and to health centres.

Brett Hudson: We back these communities, Minister—we back them.

Hon AMY ADAMS: That is right. We back them, we represent them, and that is why this Government is getting this done and Labour would oppose it. We are seeing a significant number of rural communities able to access fast broadband through upgrading the copper line network. So far, this has included upgrading copper landlines for more than 85,000 rural households to speeds of up to 20 megabits a second. For the last quarter, I am pleased to tell the House, the rate of deployment for upgrading copper lines for fast broadband is equal to about 46 lines every day being upgraded. The upgrade of fixed line copper broadband in rural areas is progressing incredibly well and it is meaning that our businesses and export sector can grow, innovate, and sell to the world, and we want to take that further because we back success in rural New Zealand. Better connectivity means access to cloud-based software and other benefits like high-definition video streaming, giving our businesses a competitive advantage. The programmes and the regulatory environment are showing dividends in our international rankings. We are now No. 1 amongst all developed countries for annual growth of fibre connections, with an annual growth of 272 percent, and we are now ranked 15th out of 34 OECD countries. Do you know what it was in 2004 under Labour? It was 22nd. We have gone from the bottom third of the OECD to now the top half—it is making a difference. Deployment in the first phase of the Rural Broadband Initiative as also seen a significant expansion of cellular coverage in rural New Zealand, with 113 new towers and 308 existing towers upgraded so far. We are establishing new towers at the rate of about one every 10 days, which is very impressive. Cellular towers have facilitated greater network coverage for mobile users to make and receive mobile calls and data on their devices. But it is not just about households and businesses, actually—38 out of 39 rural hospitals are now able to connect at a 100 megabits a second.

Hon Member: How many?

Hon AMY ADAMS: 38 out of 39 of our rural health-care centres. Also, 972 rural schools are now able to connect, with peak speeds of 100 megabits a second, under the Rural Broadband Initiative, and 51 of our most remote schools have received point-to-point wireless connections. Because infrastructure established through the Rural Broadband Initiative is open access, it means that existing and emerging telecommunications companies throughout the industry and throughout the country can take advantage of this infrastructure to provide innovative services. As we know, the bill enables funding to be made available for further improving rural connectivity by also establishing a mobile black spot fund, as well as extending the Rural Broadband Initiative programme. The mobile black spot fund will address gaps in cellular coverage, with a focus on transport corridors and tourist spots.

[Continuation line: This brings important gains]

Hon AMY ADAMS

This brings important gains for convenience and business productivity but also, importantly, for public safety through 111 calling accessibility for mobile phones in some locations away from landlines. This programme and the bill that funds it will bring fast, reliable broadband to more New Zealanders, to more Kiwi businesses, and to more parts of regional New Zealand. The rural areas targeted for improvement will now be identified through a tender process, and technology solutions that will best meet the needs of those communities will be selected. It is worth noting that the technology to be used in the second phase of the Rural Broadband Initiative may not be the same as in the first phase. I am certainly open to technology suppliers providing new and innovative options to consider, and that is all part of the process we are now working through. A registration of interest has been released to obtain more information, and I encourage all rural communities to get involved. I encourage councils to take part and to talk to their households and businesses. This Government’s vision is for a New Zealand where anyone, anywhere, can take advantage of digital opportunities, and we are not going to let only the highly dense, highly profitable parts of New Zealand benefit. That is why we levied the telecommunications companies to ensure that the infrastructure is strong right across rural New Zealand. This is a Government that works for all New Zealand, and that is why we are supporting this bill.

[Continuation line: Clare Curran]

Telecommunications (Development Levy) Amendment Bill

Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): Well, Minister Amy Adams came into the House and she delivered her first speech on this bill. She said that this was not a tax and she said that prices would not go up and she said that it was a mere extension to a levy. So what happened within 40 minutes? Prices were announced to be going up by one of the major telecommunications companies. It called it a tax and said that it was unfair and that there had been no consultation. And, in the most important part of the release that it sent out, it said that “We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution that they are making to the Government’s Telecommunications Development Levy fund.” Well, if that is not a demonstration of a new tax being imposed, then I do not know what is. All I can say is that this Government said it would introduce no new taxes, but it has. This is the latest one, and it is going to go on everybody’s phone and internet bills every month because this Minister has not done her work. She has not consulted properly with the industry. She has not done an evaluation of the original rural broadband scheme. There is no evidence that it has been successful, despite what she gets up and says. InternetNZ , which came before the select committee yesterday, said that we could expect more petitions from communities around New Zealand that have very bad broadband speeds and are desperate to try to change that, and that there was no evidence that had been provided. The Ministry of Business, Innovation and Employment told us the same thing. It said that there was no analysis of the economic outputs or the benefits because it has not been done, and all we are hearing is that it is money that is being spent on rural New Zealand, but it could be going down a big, black hole.

[Continuation line: Here we are, committing another $150 million]

CLARE CURRAN

Here we are committing another $150 million from an industry levy that is directly being passed on to consumers—[Interruption] Oh, the Minister scoffed at me when I said that. But what happened? It is being directly passed on to consumers.

Hon Bill English: Scoffs at you no matter what you say.

CLARE CURRAN: Mr English, an extra dollar a month on every consumer’s phone and internet bills is a direct result of a piece of legislation that is going through under urgency. That is a result. Whether it is a good result or a bad result is another matter. I call it a bad result, but it is a result that is going to put an extra dollar—so you give $25 and you take away $1. The Government has introduced three new taxes during this Budget. I would say that the Government and Amy Adams have got egg on their face—egg on their face. I would also say to the National MPs who are in the House right now and who live in rural electorates that they would know that they are having—particularly Stuart Smith in Kaikōura and Barbara Kuriger, who are two that I know of who are having steady streams of constituents coming in from rural New Zealand, saying that the quality of their broadband is inadequate and please do something about it. I would imagine that there are many other rural MPs who are saying the same. Well, I say to them that this legislation, which commits $150 million of a levy on industry being directly passed on to consumers is not going to make it better, because the first scheme has not been evaluated. There is no evidence that said it has worked. In fact, the information that we are getting is saying that it absolutely has not. And let me give you some examples. There has been a road trip undertaken by a group that calls itself Hills, Holes, and Poles, which is a project that is part funded by Internet New Zealand, which has been touring the country over the last few months in rural and regional New Zealand, looking at the quality of broadband experience that people are having. What it is finding is that for many rural Kiwis broadband remains frustratingly out of reach or unaffordable, which is despite successive Government policies, including the Rural Broadband Initiative. What they are finding is communities are instead doing it for themselves. They are not using the Rural Broadband scheme. They are coming up with community initiatives with local wireless providers, with trusts, and with providers to actually form their own community wireless schemes. They are doing, in some of the communities, really well. But this is not Amy Adam’s initiative; this is not what she gets up and trumpets in the House. There are dozens and dozens of them and more are happening, but they are doing it themselves. What Labour would have done would be to support them to do it themselves better and faster. Instead we are having a Government imposed levy that will be passed on to consumers—

Dr David Clark: A tax.

CLARE CURRAN: —a tax, which is not going to deliver, and that is the great tragedy of this. Even the ministry involved acknowledges that the work has not been done, that there has been no evaluation. Ii cannot be evaluated, therefore it cannot be decided whether or not it is a good idea to invest the extra $150 million. Actually, the most innovative rural broadband is happening, as I said, in communities around New Zealand, and there is one happening in mid-Canterbury, which is, ironically, right next to the Minister’s electorate. Maybe she should go and visit that. One of the problems with the telecommunications development levy, which is highlighted in the regulatory impact statement, is the expectation by the major payers that the funds will in large part be recycled back through them. I note that the Green Party has introduced two Supplementary Order Papers that we, the Labour Party, will be pleased to support during the progress of this bill through the Committee stage. We will be keen to debate those Supplementary Order Papers and what the impacts are, because one of the issues that lies behind the lack of evaluation and the lack of economic analysis in this legislation is knowing whether or not the recycling of funds back into the big players, such as Vodafone and Chorus, has actually, in effect, ended up being a subsidy to those players and has enabled them to entrench their status out in rural New Zealand. I am not making that assertion in the House tonight, but I am asking the question and the problem is that we do not have the answers because we have not been able to have the analysis about this very matter, and that is a great shame. Another example of what communities are doing for themselves is in Marlborough. The Marlborough District Council has just done a survey, has just managed a survey, and 700 people have responded to its online survey on connectivity, which is a very high response for a community. As I understand, it is four times the number of people who have engaged in the long-term district planning process, which indicates that there is a high degree of interest out there in rural New Zealand. I challenge any of the National Party MPs who have got parts of their constituencies that are rural to tell the House that they do not have people coming into their offices on a constant basis or writing to them about the state of their rural broadband. Colmar Brunton has done a survey. They have come up with the figure of 68 percent of rural businesses and households in New Zealand that are angry and frustrated about the state of their broadband. After nearly 5 years of the first scheme, you would think that things would be better than that and now the Government is introducing another $150 million for a failed scheme.

[Continuation line: Melissa Lee]

Telecommunications (Development Levy) Amendment Bill

Speech - MELISSA LEE (National)

MELISSA LEE (National): Very briefly, I would like to make two points. One is that I would have thought that the Opposition understood about competition. I thought competition was actually a good thing, that if you provide competition within telecommunications companies and have more than one, which is actually a monopoly, the companies would do everything that they could to appeal to customers and provide the best possible service so that they can actually get more customers. Oh, but no. Those members are in the Labour Party. They had a competition and they ended up with Andrew Little. Ah, that is the reason they do not understand competition. OK, I get it now. This is a great bill. I was actually despairing when I saw on my Facebook a post that a friend had made. She is visiting. She is the manager of New Zealand tourism in Korea. She is here with a bunch of travel writers and they have been here for a week, I think, and they could not access the internet properly in our rural areas. These are people with millions of followers, but because they have been travelling in our country—what good is beauty when there is no internet and these people are travel writers? They finally got to a place where they can actually tweet, and this is the photo that I got. I will not lament the day that we have very fast internet. This is a great bill for the rural sector. This is a great bill for New Zealand where businesses will grow, families will benefit, and New Zealand will actually benefit as a whole. Thank you very much.

[Continuation line: Dr David Clark]

Telecommunications (Development Levy) Amendment Bill

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): There has got to be some irony in the previous speaker, Melissa Lee, getting up and decrying the Government’s broadband system. It has spent nearly $300 million and the member opposite, who is a Government member, is saying that it is appalling, and she is right—she is right. That is the kind of confession from a Government that is so out of touch it thinks it can tell New Zealanders it is spending $300 million of their money and deliver no result. That is what we have opposite. Honestly, this is reaching a ridiculous standard. But, Mr Speaker, I did not want to speak about that—I think I am going to turn into “Mr Squeaker” myself. What I wanted to talk about was the contribution from the Hon Amy Adams, the woman in charge of this bill. The Minister for Communications said in her speech introducing the bill, and I will read it, that “the industry will not need to put their prices up, or explain to their customers why the bill is changing.” Those are words from the Minister’s mouth. Let me read them again: “the industry will not need to put their prices up, or explain to their customers why the bill is changing.” Well, we have learnt during the debate that the big provider, Spark, is going to put up its bills, and it is going to do it in a transparent way so that people know how much extra the Government is charging for this broadband service. It is going to put up its levies. It is saying: “Now that the Government has confirmed the levy will continue, rather than reduce as originally legislated for, it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers. We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution they are making to the Government’s Telecommunications Development Levy fund,”. That cost is going to borne by every business, broadband, and mobile customer. That will be across all of the firms, and that is because this Government is so determined to ram this through that it has not consulted on the legislation. It is just going to impose a new tax on all New Zealanders who are interested in using these kinds of internet services. That is what this Government does, because it is so out of touch. It is breaking its promises. It had those promises that, of course, we remember: that this Government would return to a surplus. That was its big promise—its central promise in the last election campaign. Well, we found out yesterday. We were told to wait—we were told to wait for the surprise. Well, the surprise was no surprise. For the seventh time in a row, this Government has failed to deliver a surplus. It keeps promising it. It keeps promising it—always jam tomorrow. The wage rises—the Government has broken that promise. It said that it would deliver an increase of 7,000 by 2016; now it is saying those increases will not be delivered until 2019. It is leaving it to the next Government to deliver the wage increases. This is a Government that cannot keep its word any longer. It did it with the GST increase. If we think back, John Key said there would be no increase in GST, and then, lo and behold, once he was elected, up it went to 15 percent. That was at the same time, of course, that the Government delivered those tax cuts to the very wealthiest New Zealanders. Well, middle New Zealand is struggling every day, going out to work, trying to pay the bills, but getting behind because this Government does not have its concerns at heart; it has at heart only the interests of the 1 percent. They are the very, very elite; those who have the capital from a previous generation. They are all it is interested in serving. It is not interested in the people who go out every day and work hard to try to get ahead, to try look out for their families. On this side of the House we are—on this side of the House we are—and we are upset that the Government has broken its promises, because it was elected on those promises. It was elected on the promise of a surplus. It was elected on the promise of increasing wages. Now it is not delivering. It said it would introduce no new taxes—we have had three in this Budget. We have had three in this Budget. I will read again from the departmental disclosure statement that the department put out and that the Minister will have seen. It asks whether there are in this bill any changes in the nature of a tax. In section 4.2, it asks “Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?”, and in big bold capitals it says next to that “Yes”. Yes, this is in the nature of a tax. Now we hear that the telecommunications providers are going to pass it on to their consumers. That makes a lie of what the Minister said. The Minister said “the industry will not need to put their prices up, or explain to their customers why the bill is changing.” This is a Government that is so out of touch it thinks it can introduce a new tax after saying it would not. It thinks that it can say that surplus is its central promise and then not deliver on it. It thinks it can say wages will go up for hard-working New Zealanders and then not deliver. And we learnt yesterday, of course, that Working for Families is going to go down for many families in middle New Zealand. They are going to be further, further behind. Sure, it is really good that beneficiaries are getting a little bit extra, but it should not be the case that that little bit extra is taken out of the pockets of those who are just a couple of rungs further up the ladder. That is not fair. New Zealanders know that is not fair. They know that these promises are promises that have been broken. This is a Government that can no longer be trusted to keep its word. This is an appalling, appalling state of affairs, and New Zealanders will be rightly upset about. We know, of course, that InternetNZ has called for a review. Its representatives came to the select committee yesterday and they said it would be really helpful if the Government or the select committee or anybody—actually—would take a lead on investigating what has happened with the Rural Broadband Initiative part 1. That is what they said. They said that some leadership would be great. Let us see whether it worked or not. Let us see, when you spend $300 million as a Government, whether there is any effect. The Government is not interested. It is not interested. It does not want to be held to account any more. It can spend hundreds of millions. It does not need to account to the taxpayers or the voters—that is how out of touch it is. That is how far removed from the truth it is. That Government over there will reap the public displeasure as the public see their bills go up for this Rural Broadband Initiative while many of them cannot access it. The other thing I want to say is that I recently read that Ashburton has one of the best rural broadband connections in the country. I have been to Ashburton. Its connection is not that good. If that is the best that this Government can deliver, it is appalling. New Zealanders deserve better than that. Now the Government is throwing more money at it, but it is not going to test whether it is actually getting to where it needs to get to. My colleague Clare Curran has calculated that for every connection that has been made so far it is around $7,000 that the Government has forked out. Are New Zealanders feeling better off for that $7,000? Well, they are actually going to be charged extra on top of that—about another buck a month for every kind of connection, whether they have got a business connection or a personal connection. That is what they are facing now because new taxes are being introduced by this Government. It is a Government that is out of ideas, that is breaking its own promises, and it does not have a plan. It has not articulated how it is going to increase exports. It has promised an increase to 40 percent of GDP. Actually, under its watch, it is going backwards. It used to be 30 percent. It is going backwards. Treasury predicts that it will go backwards further—that next year exports as a percentage of GDP will drop further. Exports are becoming a smaller portion of the economy under this Government. It is no wonder that fewer small businesses are starting under this Government. It is a Government without ideas. It is determined to carry on with the commodity price cycles. It thinks that is the only answer. Well, it is not. We need vision. We need aspiration. We need a Government that will keep its word. We need a Government that will be keeping its word and will actually deliver on the promises it makes. This Government seems determined not to do that. It is so out of touch it thinks it does not even need to answer to New Zealanders. It thinks it can introduce a tax and then say it is not its problem. It thinks it can reduce Working for Families for hard-working Kiwi families and say it is not its problem. This is a Government that is out of touch and out of ideas. It has also brushed off, we learnt, a housing idea from the Labour Government, but it has not done the research. We saw in the Budget documents that there is $52 million in a contingency. When I worked at Treasury, the things that went in the contingency were things that had not been thought through yet, that could not be quantified, from a Government that had not done its work. It was responding to the polling at the last minute. It set up a contingency and said “We will do something about housing. We’ve got to do something—the polls are telling us it’s a real issue.” Six years on, having done nothing, the Government has put a little bit of money to one side. It is going to be a long time before that solution gets implemented. This Government is out of ideas. It has got no long-term plan. It is a Government that is breaking promises left, right, and centre, and it will be held to account.

[Continuation line: Brett Hudson]

Telecommunications (Development Levy) Amendment Bill

Speech - BRETT HUDSON (National)

BRETT HUDSON (National): For the edification of the member who has just resumed his seat, David Clark, the telecommunications development levy exists today. It has existed since 2011. It is already built into the pricing packages that businesses and consumers pay today. The change here does not increase it. It is the same rate as it is today. It merely extends the amount of years that it will apply for. So, look, Spark is entitled to send whatever message it wants, but if it wants to send a message to its customers that a levy they are already paying for is going to be charged again, then it risks its customers saying to themselves: “Different brand’ same old Telecom.” I will leave them to decide whether or not to do that. This is an extremely good measure that supports rural New Zealand, and I commend it to the House.

[Continuation line: Gareth Hughes]

Telecommunications (Development Levy) Amendment Bill

Speech - GARETH HUGHES (Green)

GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. It is not often I find myself in the same voting position as the National Party, but I and the Green Party will support good legislation when we see it. I am not going to stand here and make a political point at the risk of actually providing internet access to New Zealand communities. I support the roll-out of the Rural Broadband Initiative. I want to see our farms, our regional schools, our communities across provincial and regional New Zealand accessing the internet. I thought the Labour Party did too.

[Continuation line: We have seen a passionate call]

GARETH HUGHES

We have seen a passionate call around taxes. I know that Labour is, rightfully, trying to hold the Government to account for previous statements, which is right. But let us not buy into a frame where taxes are all bad. I support collective community capital investment to rectify market failure. I support that, I think it is the right thing to do, and that is why I am voting for this. It is right to criticise the Government for putting the cart before the horse. It is currently consulting on the roll-out of the RBI two. It is currently consulting, and here it is putting legislation in front of Parliament, passing it under all stages. I have suggested to the Minister that it is putting the cart before the horse, that the Government should have put it the right way round. It is obviously not doing it, which is disappointing because the industry is not going to get a say, the public is not going to get a say. In fact, the officials have advised: “Well, at least the industry will get a say during the Parliamentary process.” But when you are passing a law in 24 hours, it is a big fat no to the industry. The Government also has not addressed the critical concerning question of the existing RBI, which is, is this just going to be another big subsidy for Vodafone or someone else? The Labour Party is right to question this. When you divide the anticipated customers of the wireless system run by Vodafone—around 8,000—divided by the $60 million they got, it is an incredibly high $7,500 per connection. Those figures might not be correct, because the Government and the officials have not released the exact numbers. It seems they are worried to do it. It seems they were short-sighted to not include it in the contract. But if they are not the accurate numbers, if it is not costing $7,500 per connection, the Government should front up and give us the stats. We do not want to see another massive subsidy paid for by Vodafone’s competitors to another one in a different scenario. That is why I have put forward a solution, a Supplementary Order Paper , and I appreciate the Labour Party’s support and the support of New Zealand First. What I want to promote is the idea that the Minister must have regard to competition and diversity in the regional markets. I think these are good, reasonable things that all parties should support. The Minister has intimated that this is her thinking and her direction. Well, if that is the case, the Government members should have no problems supporting this Supplementary Order Paper. The officials also warn, in section 17, that it is likely the large telecommunications companies that are currently contributing the most are the ones that will be most likely to benefit from this. There are fantastic regional solutions happening right now, the Government should not be ignoring them and just going to some of the big players. New Zealand is a challenging country in which to roll out considerable coverage of broadband. We have got topography and other issues. Locals all across the country are already are already coming up with those solutions in their communities with their local councils and with local experts. Let us not side-line them; let us, in fact, not compete them out of the market with an RBI-funded big-scale competitor. I hope the Government can support the Supplementary Order Paper. I hope the Government can have a contestable fund that some of the smaller players, the real locals on the ground, can have. The first step to getting there is to support the Supplementary Order Paper. I am voting for greater internet access. I am voting for coming together, acting in a communal fashion to invest in new capital infrastructure. I am supporting that, and that is why I am voting for this legislation.

[Continuation line: Tracey Martin]

Telecommunications (Development Levy) Amendment Bill

Speech - TRACEY MARTIN (NZ First)

TRACEY MARTIN (NZ First): I am going to admit that I was not looking forward to coming down and speaking on this bill, because it was not that controversial. It was not that controversial, but I have got to say that it has taken an interesting turn. The comment I would give to Spark is: oh, come on! Come on! This levy was originally passed before the 2011 election, so New Zealand First was not here, but I think the voting was interesting. The voting was interesting, when you actually go back to the votes that were taken. I am going to give the Labour Party points for consistency: it voted against it then. So well done, it voted against it then. The Green Party voted against it then, but the Green Party, obviously, has shifted its position because it can see that there has been some movement. And we have to get this rolled out—we have to get this rolled out. How much longer can rural New Zealand stop and wait for this Parliament to make up its mind? Something has got to be done to actually connect these people. They have been promised long enough, and we need to make it happen. But the most interesting thing about the vote on this legislation, before the 2011 election, was that it split the ACT Party . The ACT Party had three members vote for it and two members vote against it. I wonder if Mr Seymour is going to split over this vote. Is this going to put Mr Seymour into some sort of a tizz? We never know. The other comment that I think is most interesting—and this is why I say to Spark: come on! And to the Labour Party: come on! Do not tell me that a company the size of Spark does not have the Minister’s telephone number on speed dial. Do not tell me that a company the size of Spark cannot reach out to this Government and tell it what it thinks, that it does not actually have dinners with this Government to tell it what it thinks. So to say that there has been no consultation, on what is just an extension of a bill from 2011, is pushing the bounds. It is really, really pushing the bounds of believability. Spark is being disingenuous. I have not seen Spark’s press release; I am going to take the member’s word for it that Spark has said that it is going to pass this on to the customer. But if that is what Spark has said, then I want to suggest that Spark is pushing both sides of the same horse here. In 2013 members on this side of the House fought to stop an increase in copper pricing to subsidise rural broadband roll-out, to subsidise fibre. We fought against it, and Spark just—this is when we are talking about, we are talking about 19 May 2015—Spark chief executive Simon Moutter said he was encouraged by the public’s response to its campaign to cut copper broadband costs. You cannot have it both ways. If we want to keep copper low—and we should copper low, because that is not right, that those customers who have remained on copper need to subsidise those customers who can afford and get fibre. So if Spark wants us to argue on this side to keep copper pricing low, you cannot come out in the next minute and decide you are going to up the prices when a levy you have already priced on, that you already knew was coming, and that already, way back here—where is this article from? This is from 5 January 2015. Spark had a conversation with the Commerce Commission around its final decision on the liability allocation for telecommunications providers. Please do not argue that you did not know. I fully understand that you may have budgeted for more profit going forward when you believed that—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

TRACEY MARTIN: Beg your pardon. I fully understand that that business may have budgeted for more profit going forward when it believed that the levy was going to drop to $10 million in 2016. That was the promise made. Take your issue to the Government; do not take your issue to the people of New Zealand. Take your issue to the Government. If they misled you then take it to them—but there is no need for Spark to raise its prices. And I agree with the Minister: if it does so when this bill goes through, then it does so disingenuously. It cannot have it both ways. The digital literacy inquiry: I am sorry, but I find it interesting that Ms Curran , who sat on the digital literacy inquiry and at the time pointed out that rural New Zealand was missing out and that lower social-economic areas of our urban cities were missing out on broadband, and having a delayed roll out because the big players were actually going where the money was, where the number of connections were—you cannot argue that there are not enough connections and so therefore it is not valuable, if at the same time you want us to put that provision into those areas so that there is the capacity for those people to connect. Once we find a method by which they can actually afford to connect—that is the first thing. And also, how can you therefore argue against a tender system that says that all areas now will be decided through a tender system rather than the telecommunications companies deciding: there is a whole group of rich people sitting in that space, they can pay the bill, they will download a lot of internet, we will actually go and put in the signal to there. I cannot understand the Labour Party and its position at this moment, although its position is consistent. And while I certainly want to use any opportunity I can to have a go at the Government about breaking promises—and I will mention it again, if they have broken a promise to you, the telecommunications companies, take it up with them. But to suggest that this levy is new—it is just beyond belief. It has been here since 2011. This legislation is an extension of the levy. It is an extension, and the reason why it is an extension—and unfortunately this might turn the Labour Party right off New Zealand First—is because of Northland . One of the reasons why—

Sitting suspended from 6 p.m. to 7 p.m.

TRACEY MARTIN: At the time I was launching into a bit of a tirade, perhaps one might call it, around Spark. I want let the directors of Spark know that Mr Connor Roberts earns his money because within a minute of my sitting down Mr Roberts emailed me to make sure that I had a copy of the press release to make sure that I knew what it was that I could not believe they had said. However, I still do not believe that you said it, but thank you very much Mr Roberts, I really appreciate it. Can I just read this other little bit about what this levy pays for. We have gone on and on—it has been on and on—about rural broadband and the mobile blackspots. They are incredibly important, particularly the mobile blackspots, particularly for Northland. I think I was referring to the fact that on 12 March 2015: “In Kerikeri today the Prime Minister confirmed funding of $100 million to extend the Rural Broadband Initiative, and $50 million to fix mobile phone black spots in remote places around the country.” One cannot say that the industry did not know it was coming, I would have thought, and this was back in March. So all the way along the industry has known that this is what is coming. So to say that it was not consulted, to say that it did not have an opportunity, is disingenuous. The last thing before I sit down, because I know there are other members absolutely gagging to stand up and talk to this bill—I will have more to say at the Committee stage and at the third reading—is that I just want to read this out from the TelcoReview New Zealand website to make sure that we all understand that this is not just about mobile black spots and it is not just about rural broadband; this “… levy is used to pay for telecommunications infrastructure including the relay service for deaf and hearing impaired persons, broadband for rural areas, and improvements to the 111 emergency service.” These things are important to New Zealanders. They were concerned at the time when it was removed. It is interesting that it is now being suggested that the cost will be passed on and that it is onerous to the consumer. It was originally a cut in cost in 2011 from $65 million to $50 million. As I say, New Zealand First does not just agree with the Government because it wishes to agree with the Government; we are here to hold them to account. But the reality is New Zealand First will not just stand and oppose legislation on a political basis. This is a levy that is being continued. It came in in 2011. The telecommunications companies need to take it up with the Government if they have a problem. There is no need for them to increase their pricing. So Mr Roberts I hope to see you next week in my office probably, but at this stage please reverse your press release. Kia ora.

[Continuation line: Kanwaljit Singh Bakshi]

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Speech - KANWALJIT SINGH BAKSHI (National)

KANWALJIT SINGH BAKSHI (National): It is my privilege to stand and contribute to the second reading of this bill. I agree with what Tracey Martin said. It is a very good bill from this Government. This Government is working to ensure that all New Zealanders are connected with the latest technology. I congratulate the Minister, the Hon Amy Adams, for bringing this bill to the House. I hope all New Zealanders will appreciate the work that this Government is doing. I commend this bill to the House.

[Continuation line: Mr Assistant Speaker: The next call is a split call.]

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Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. James Shaw—5 minutes.

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Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

JAMES SHAW (Green): I am standing to speak on the second reading of the Telecommunications (Development Levy) Amendment Bill. I just wanted to address the concern that this bill is a new tax on New Zealanders or on users of broadband services. Frankly, the Minister of Finance over the last 7 years has introduced so many new taxes and raised so many other taxes that I have kind of become a little bit blasé about it. This is an incredibly important piece of economic infrastructure, particularly for rural New Zealanders. We have a huge economic divide between our regions and our main centres, especially Auckland. It is absolutely vital for the regions that we get them connected to broadband and that it is a really high-quality service. Only then will they be able to access the social connections, the educational opportunities, health care, and in particular the economic infrastructure of being able to participate in the digital economy, which is a growing and increasingly critical part of New Zealand’s economy overall. It has to get paid for somehow. It is a huge and expensive project and somebody has got to pay for it. This seems to us to be the best available method of paying for it. I do want to speak very briefly to the Supplementary Order Papers that my colleague Gareth Hughes introduced earlier—sorry, I just wanted to say before that that we have not heard anything yet in the debate that would have us change our vote on this bill. We recognise that there are some concerns from the industry. We also understand Labour’s concerns in relation to this being a new tax and so on, but at the moment our support for the bill still stands. We are introducing two Supplementary Order Papers. The first, if you do not mind my reading them out, is to insert a new clause 90(4) into the Telecommunications Act 2001 where the telecommunications development levy is used for purposes specified in clause 90(1)(b) and 90(1)(d), and particular regard will be taken to promote “… (a) competition in non-urban telecommunications markets; and (b) the diversity of non-urban communities intended to be served by the levy; and (c) the range of different technological options that may best serve particular non-urban communities; and (d) the rapid pace of technological development.” I would just like to speak to that, because we did have some concerns that in the previous phase of the roll out that, I guess, the beneficiaries primarily were Vodafone and Chorus; that they in essence received a really significant subsidy paid for by other industry players. We want to make sure that there is maximum competition and a diversity of providers in the market place and that it does not just benefit a couple of large companies too much. The second Supplementary Order Paper is to insert a new clause 90(4) into the Telecommunications Act 2001 where the telecommunications development levy is used to promote cellular mobile coverage in rural areas—for example, through a mobile black spots fund. The levy will not be used to fund existing contractual requirements between the Crown and mobile network operators. There is a risk that the Government’s telecommunications development levy-funded mobile black spots fund could be used to fund these from cheaper requirements. This would essentially short-change the taxpayer and the rest of the industry. Again, we just want to make sure that companies that have got these contracts already do not get two bites of the cherry. Again, it is about ensuring that there is a maximum number of players in this and that the benefit is sort of spread through the economy. We think that those are quite sensible, that they aid diversity and competition in the market place, and we hope that we can get support for those. In the meantime, I commend this bill to the House.

[Continuation line: Mr Assistant Speaker: Kris Faafoi, 5 minutes.]

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Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): Kris Faafoi, 5 minutes.

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Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

KRIS FAAFOI (Labour—Mana): It is a pleasure to take a call on the second reading of this Telecommunications (Development Levy) Amendment Bill. There are a number of questions, which we will also ask in the Committee stage, that we have of the Government. The first one I will put to the Minister, and that is why in her first reading speech did she say: “The industry will not need to put up their prices or explain to customers why their bill is changing.”? For then, less than an hour later, Spark put out a press release saying: “Now that the Government has confirmed the levy will continue, rather than reduce as originally legislated for, it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers.” So less than an hour after the Minister saying that this will have no effect on consumers and nothing will change, Spark says that, yes, it will, because it is going to make the consumers pay. Regardless of who was at fault—either the Minister’s wrong or Spark is playing silly buggers with this—someone is going to pay. It looks like it is going to be everyone who has a broadband account with Spark at this stage, and potentially more because we have not heard from any other telecommunications companies at the moment.

[Continuation line: It further emphasises our point that this is a new tax.]

KRIS FAAFOI

It further emphasises our point that this is a new tax. Further to that, in the regulatory impact statement put out by the Ministry of Business, Innovation and Employment on this bill, point 50 talks about the level of consultation that the Government has had with the Telecommunications Forum . It says that “While formal consultation … has not been undertaken, MBIE regularly engages with the telecommunications industry, and as such the issues considered by this Regulatory Impact Statement have been widely canvassed ... MBIE has monthly meetings with the New Zealand Telecommunications Forum (TCF), which represents levy payers and others in industry ...”. Point 51 says: “The intention to continue the levy at its current level was communicated openly during the election campaign …”. So from that regulatory impact statement you would think that the telecommunications companies know they are pretty OK with that. The Telecommunications Forum has been informed. It has got no problem with this bill and the implications of it, but, lo and behold, not only has Spark put a press release out today, the Telecommunications Forum has put a press release out this afternoon as this bill makes its way, under urgency, through this House. Geoff Thorn, the chief executive of the Telecommunications Forum, says: “This bill has been introduced under urgency and doing so avoids any public debate.” We agree with him on that. He also says: “This is a proposal which has not been the subject of any consultation …”—but the regulatory impact statement said there was consultation—“and which has avoided the usual scrutiny that would apply to Government spending.”, which we here do agree with. This bill is being pushed through under urgency and we would ask why. If, as the Minister says, this has been signposted, if, as the Minister says, there has been consultation with the Telecommunications Forum, that does not necessarily look like it was the case. The press release from the Telecommunications Forum goes on to say: “The bill extends a tax, which to date, has not been explicitly recovered from consumers.” So the Telecommunications Forum itself says, well, in the past it had not got this money from consumers. So the assertion from the other side of the House is that this is not going to hit consumers. From this perspective, Spark has said it is going to put up its prices. The Telecommunications Forum has said, well, it has not done this in the past. So someone is going to pay, and it is not the Government. This Government said that there are no new taxes, but when it continues this levy, someone does have to pay and they are the broadband users of New Zealand. I would like to reiterate that we have no problem with rolling out broadband further into rural areas. It is a great idea, but the $300 million that has been spent so far—we do not have any idea of how effective it was. And before we spend another $150 million—we do not think we should be rushing this through under urgency until we make sure we are going to get good value for money. That is why we are opposing this. This Government just wants to throw money around—another $150 million—without knowing how effective the first tranche of the Rural Broadband Initiative has been. We do not think that is on.

[Continuation line: Hon Judith Collins]

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Speech - Hon JUDITH COLLINS (National—Papakura)

Hon JUDITH COLLINS (National—Papakura): The money that has been spent has been so effective that 74 percent of rural households now have broadband. That is how effective it is, and, frankly, it is only going to get better under this Government. I feel sorry for the Labour Party. It is the only party that is voting against rural broadband for New Zealanders who need that for their businesses, for the schooling of their children, and for them to be connected to the rest of the world like the rest of us. It is disgraceful that a party that used to say it stood for telecommunications and broadband is now voting against it. It is the only party—disgraceful. I think about the fact that we are talking about it being an extension of a levy that has been in place now for some years, not some new thing just dreamt up, and the only person I see who has really come out against it is Mr Connor Roberts, who has not been that long with Spark . I remember him from his days as an often-failed candidate for the Labour Party and also with Len Brown’s press office. So I think that Mr Connor Roberts is a very nice chap and I wish him well in his career, but he needs to get his facts right. I commend this bill to the House.

[Continuation line: Hon David Parker]

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Speech - Hon DAVID PARKER (Labour)

Hon DAVID PARKER (Labour): Well, that does deserve a reply. That member, Judith Collins , used broadband repeatedly in respect of her dealings with Cameron Slater , where she showed herself to be morally bankrupt, which is why she is now on the back benches.

Hon Judith Collins: I raise a point of order, Mr Speaker. I take offence at that.

The ASSISTANT SPEAKER (Lindsay Tisch): Yes, the member has taken offence. I ask him to withdraw that comment.

Hon DAVID PARKER: Point of order, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): No, I ask you to withdraw that comment.

Hon DAVID PARKER: Point of order—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member has taken offence. Any member can take offence, and if a member takes offence, I ask the member to withdraw the comment.

Hon DAVID PARKER: I withdraw the comment. I raise a point of order, Mr Speaker. Could you please tell me which of my comments was unparliamentary?

The ASSISTANT SPEAKER (Lindsay Tisch): The member took offence. It is not for me to judge. The member took offence at statements that were made and she brought it to my attention, and on that basis I have asked you to withdraw the comment, which you have done, and now we will proceed.

Hon DAVID PARKER: That member, who just criticised the person outside of the House who was unable to defend themselves, was removed from her post as a Minister for disreputable conduct. There were about five or six instances—

Hon Judith Collins: I raise a point of order, Mr Speaker. I take offence at that. I was not removed for disreputable conduct. It is completely false.

The ASSISTANT SPEAKER (Lindsay Tisch): That is a debating point and we are going to proceed.

Hon DAVID PARKER: The first of which was the conflict of interest that she used in respect of Oravida , which was a company that her husband got paid by, and she took steps to advance the interests, and then lied to the media and misrepresented the position to the Prime Minister. Having showed herself—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Hon Judith Collins: I seek leave to make a personal explanation in accordance with the rules in relation to the accusations made by the Hon David Parker.

The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.

Hon Judith Collins: Mr David Parker is quite incorrect. I was not removed for disreputable behaviour. In fact, I was asked to resign on the basis that I was accused by way of an email to somebody else from someone else. It had nothing to do with me. There was an allegation for which I was utterly cleared by the Chisholm inquiry. In addition, Mr Parker has long commented on a Mr Pleasants . That matter has been dealt with by the Privacy Commissioner . I have been cleared of that as well. I was cleared by the Cabinet Office of any conflict of interest, and, actually, Mr Parker knows that well. He, of course, did resign as Attorney-General.

The ASSISTANT SPEAKER (Lindsay Tisch): All right, we are now on the Telecommunications (Development Levy) Amendment Bill and I ask that all speakers from now on in concentrate on the substance of that debate.

Hon DAVID PARKER: What rubbish! That is not correct at all. History shows that that is not correct. This bill is said by the Government not to be in the nature of attacks. We heard that from the Minister at first reading and at second reading. Yet, in the departmental disclosure statement, it is asked a form question. It says: “Does the bill create or amend a power to impose a fee levy or charge in the nature of attacks?”. And in bold writing and capitals on page 8 it says: “Yes”—yes. The Minister then said that this would not result in any increase in charges to consumers, and, yet, already we have a press release from Spark saying yes it will—the average person’s bill will go up by about $1 every month. That is $12 a year for an increase in a connection fee. Spark says: “The bill for this from the Government to Spark New Zealand averages out at almost $1 per month for each of our consumer and business broadband and mobile customers.” So that is for people who are using bandwidth both in broadband at home and also through mobile devices. I think everyone in this Parliament recognises that the roll-out of broadband is a good thing. No one disputes that. What we do dispute is the competence of this Government, which just months ago was saying that it was going to cost only $10 million a year, in respect of this particular cross-subsidisation, to roll it out across rural areas, whereas now it is saying that that cost is going to be $50 million per annum. This in an environment that the Government says is virtually zero inflation. So in an environment where inflation is running at zero, how come the costs have ballooned so that the cross-subsidy that has to be paid through this mechanism has risen from $10 million per annum to $50 million per annum? The answer is because the Government is doing it incompetently.

[Continuation line: That is also apparent from the fact that the]

Hon DAVID PARKER

That is also apparent from the fact that the rural broadband initiative is being ignored by some consumers who are going around the side of that, not getting the subsidy or the cross-subsidy, which is available through the rural broadband initiative, and instead they are, without subsidy, going about their business and using wireless technology, and getting broadband. That is why we are opposing this bill. If the Government had come to New Zealanders at the start and said: “Look, this is the full cost of the rollout of broadband. There will be some cross-subsidy between cities and rural areas to ensure that rural areas will get it.”, I think all New Zealanders would have gone along with that. We certainly would have on this side of the House. But to then come along and pretend that a failed rural broadband initiative, which is now coming in over the original budgets, obviously, and is not doing what it was originally promised to do, and to come to us and say “Please, there is nothing happening there that needs scrutiny.”, well, we just do not buy that. Here we are under urgency. We heard one of the prior speakers from the National Party throwing off at the release from the New Zealand Telecommunications Forum , the TCF. That release complains that this is being introduced under urgency—and I am quoting this—and that doing so avoids any public debate. That is why this is being done under urgency. It is not because it is urgent. This measure does not take effect until next year, so it does not need to be done under urgency. They slag off that. Do you know who the writer of that press release was? It was Mr Thorn , the former chief executive of Parliamentary Service. He knows how parliamentary processes are meant to work. That is why he is critical of this being done under urgency. He also notes that it extends a tax, which to date has not been explicitly recovered from consumers, and that they cannot continue to absorb the tax. The Minister will soon be sitting in the chair during the Committee stage, and I want the Minister to stand up and tell me that I am wrong when I read out the regulatory impact statement, at paragraph 4.2. Does this bill create or amend a power to impose fee, levy, or charge in the nature of a tax? It says yes. I would like her to tell me how I am misreading that. I cannot reconcile that with her statement that it is not in the nature of a tax. Look, I do not know—this is the Minister for the Environment, who seems to think that dirty water is clean water. [Interruption] Or she was when she was the Minister for the Environment. So maybe there is some consistency of principle between those two ridiculous statements. I also want to say that she is still contending that there is going to be no on-charge to consumers. I cannot work that one out, either.

Dr David Clark: History says there is.

Hon DAVID PARKER: I know. Industry says there is; I have read that out already, as you did earlier, Dr Clark. It is absolutely clear that this will result in an increase in charges. It is a tax. It is because the Government’s financial performance is so poor that it can no longer absorb this through the Crown balance sheet. That is essentially what has happened. It was going to pay some of this out of Crown finances, but its mismanagement of the economy is such that it can now no longer afford to do so. So it is going to charge what is effectively a tax on consumers. That is what is happening here. The Government has not consulted on it. It says it has. I have no doubt that it consults regularly with the community, but, again, in their regulatory impact statement, their departmental disclosure statement, it says it has not in respect of this. That is confirmed by the telecommunications industry in its releases today, so, again, I expect the Minister to be saying how she can justify those comments when her departmental report says it is wrong and when we have had two releases—from the industry body generally, and from our largest telecommunications company , Spark—to say that that is not the case. I just want to return to this issue of how incredible it is that the Government need another $50 million, or another $40 million, per annum when inflation is running at virtually zero. How does that happen? The Crown says the reason it is not hitting surplus is that we have got such low inflation that people’s wages are not going up as high as it thought they would, and therefore it is not collecting as much tax. There is a little bit of truth in that. We all acknowledge that with low inflation wages and costs do not go up by as much. So how could you, in a zero inflation environment, need to come along to this House and seek authority for $50 million per annum? I tell you what. It is because the Government is incompetent in respect of telecommunications companies. We saw it with the Chorus fiasco last year, when it was going to override the regulator, when it was trying to help out its mates at the big end of town. The telecommunications companies came out and spoke out against the Government at that stage. And what are they getting in response? Because they spoke out last time they are now getting whacked with a levy of $50 million. The Government did not like the telecommunications companies exposing the incompetence of the Government last year in the telecommunications space, in respect of Chorus. That is why the Labour Party is opposing this legislation. It is not because we oppose the roll-out of broadband in rural areas.

Suspension -

Speech - Hon DAVID PARKER (Labour)

JAMI-LEE ROSS (National— otany): I commend the bill to the House.

[X PV on 2R—Ayes 88, Noes 32]

Bill read a second time.

[In Committee – Tisch, This debate is by clauses]

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In Committee

The CHAIRPERSON (Lindsay Tisch): This debate is by clauses, and the question is that clause 1 stand part.

Clause 1 Title

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In Committee

CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a brief call on this particular legislation. I want to say to the Government first of all that there are people in my own electorate—and despite being in an urban Wellington electorate, I have quite a significant rural hinterland in that electorate—and in the rural part of my electorate who are very supportive of the idea of getting better rural broadband. But the issue here is that many of them, according to the Government’s definition, have already got rural broadband—and yet it does not blimming well work. The number of complaints I have had in my office from people whom the Government claims get 5 mega bits per second rural broad band but who are claiming that they do not, has been increasing exponentially. So they are getting flyers in the mails saying “Connect to this broadband service, it’s great—you’ve got rural broadband.” But, of course, what it does not say is that in order to get that particular speed they have be to the only person connected to it at that given time. The more people who connect to it, the slower the speed gets, to the point where somebody at home, if they have cellular connections getting faster through using a cellphone—and in some of these cases they are in a cellphone dead zone, so they are not even getting that—is getting very, very slow broadband speeds like the type that we might have had once upon a time when we had old dial-up over the old copper network. In fact, they were faster than what they are getting now with, supposedly, broadband connections.

[continuation line: So I want to say on behalf of the people in my electorate]

CHRIS HIPKINS

I want to say on behalf of the people in the rural communities in my electorate, and I am talking about Whitemans Valley, Kaitoke, Mangaroa, and those areas, they—

Clare Curran: The Minister is writing it down.

CHRIS HIPKINS: I hope she is writing those areas down. They do want rural broadband. The Government claims they have got it but they do not. Their rural broadband is actually slower than what they would have got under the old dial-up system and the more people who are connected to it the slower it becomes. These are small business people who might be working from home. There are small farmers in that area and they are not getting what the Government promised them. They will come to me and ask why it is that the Government is now spending all this extra money to roll this out to its next phase when the first phase is not working, and why is it that they, as consumers, are paying for a service that they are not able to get. These are people who are paying now. They are paying for broadband now, as of today, and they are not getting the broadband they are paying for. The cost of that broadband is potentially going to go up because this is an extra tax, and taxes ultimately get passed on to the consumer or the end user. So the Government is increasing taxes despite its very clear pre-election promise that there would be no new taxes under National. This debate is the first one on the first of three new taxes that it has introduced with this Budget. Ultimately the consumer will pay the cost of it. It is yet another broken promise. I want to say that I support full broadband availability to all New Zealanders and I would support reasonable measures to do that where there is evidence that they were working and that they were actually going to deliver it. But spending $450 million—that is what we are talking about, despite the fact that Ministry of Business, Innovation and Employment has admitted that there is no business case or analysis of the Rural Broadband Initiative’s effectiveness. It is staggering that the Government would spend this quantity of money without actually establishing whether it is any blooming good. I can tell you now that the people who have been coming into my office to complain about the quality of their broadband connection are very firmly of the view that it is not any good and that they are not getting the speeds of rural broadband that the Government already claims that they are getting. When the Government says—and what were the numbers it gave—that something like 86 percent rural households and businesses are getting speeds of up to 5 megabits per second, it should put a very clearly rider on it that it is only if they are the only person connected in that area. The clear reality of this situation is that in many of these rural areas, particularly the rural areas closer to the city centres, where there tends to be a higher density population than in a rural area, the broadband speeds are woefully slow—absolutely slow. We have got people getting in their cars with their laptops and driving over the hill, literally, into Upper Hutt, because that is the only way they can get a decent broadband speed. It is good for the cafes in Upper Hutt if you are business person working in Whitemans Valley, because you will end up going over there and sitting in one of the cafes there so you have got access to decent broadband, because they are not getting it, despite the Government’s claim that they actually are. I want to say over and over again that I support rural broadband, but I want to make sure that if we are going to spend money on rural broadband that that is actually what is being delivered. It is not being delivered. The Government claims that Whitemans Valley has rural broadband. It does not. The Government has not delivered it, and now it is saying that it wants to spend more money on a programme that clearly is not delivering what was promised.

[Continuation line: Tracey Martin]

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Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader—NZ First): Kia ora, Mr Chair—just to take a quick call in the Committee stage of the bill. I understand what Mr Hipkins is talking about; I absolutely do. I have a 20-year-old son, his mate who ended up homeless, a 17-year-old son, and a 14-year-old daughter, and they complain to me constantly about lag. I am assuming, because I am not that up to speed with IT, that lag is when everybody is on Dungeons & Dragons, or whatever the heck it is that they are playing, and there are too many people on the line, as such, and so it slows down the speed. I understand that. But what I do not understand is the argument that the continuation of the levy is not the answer. I am yet to hear—

Clare Curran: I’m about to tell you all about that.

TRACEY MARTIN: And I hope Ms Curran will stand and tell me what the alternative is. Who will build this infrastructure and how will it be paid for, if not in this way? Dr Clark is nodding his head, so I am hopeful that those members will stand and take a call—and Dr Woods, apparently, is also going to stand and give us an alternative way to make this work. Nothing is worse than spending $300 million and then changing direction and spending $150 million in another direction while some people still have nothing. Nothing is worse than that. I take up Gareth Hughes’ contribution around the Commerce Committee that, actually, while they are at it, have a look at it, do a review, do an inquiry, and let us see how it went. But let us not change horse mid-stream after $300 million has been spent. Let us not leave the Robin Dixons and the Ōmaha residents and ratepayers out there on their own yet again with what is a levy that has been in place since 2011. Let us get real. There is no cause for Spark to raise its charges. Let me just ask you: who actually pays this levy? Spark, formerly known as Telecom, pays $25 million per year of the $50 million because it is a percentage of what its take is of the market. I would say to its customers that if Spark decides to pass on the cost to them, which they have already been passing on to them since 2011: change your provider. Change your provider. That is why we have 22 providers. Vodafone, $10 million; Chorus, $6 million; Vodafone fixed, $4 million; 2degrees, $1 million; Orcon; TeamTalk; Vector; FX Networks; CallPlus Services; BayCity Communications, World—where is the press release from all those providers? Where is the press release from the 21 other providers apart from Spark? The reason why Spark has put out a press release is that it has the largest amount of your business, New Zealand, and it does not want to pay this levy. But this levy is required in order to deliver for the rest of New Zealand no matter whom you have your business with. So I suggest to you that if Spark is not happy about paying its fair share around infrastructure—and New Zealand First agrees that there should be a review on the $300 million. There is nothing to be afraid of if it is doing well, and we could learn some lessons about it. What we know from inside our schools is that telecommunications can be a black hole of money. Everybody comes up with another great idea. But what is a sustainable idea, are we on the right track, and what is the cost of switching horses mid-stream? So I hope Ms Curran will tell us how the Labour Party would fund this infrastructure throughout New Zealand. I hope that Dr Clark and Dr Woods will because right now as far as—

Dr David Clark: I hope New Zealand First will change their vote if there’s a good idea.

TRACEY MARTIN: If you give a good enough argument, Dr Clark, you never know your luck. Today is Friday; it could happen, but at the moment New Zealand First stands with the Green Party. This infrastructure is required. The rural areas require it and actually most of the super-city of Auckland requires it. That is the most bizarre thing: many parts of the super-city of Auckland—Wellsford, Te Hana, Tapora, Ōmaha—these places are in the super-city of Auckland created by this Government and they still cannot get reasonable broadband. Sitting in Warkworth—what are we called; we are a satellite town of Auckland and we are going to go from 10,000 dwellings to 30,000 dwellings in 20 years, and apparently we have got lag. So New Zealand First will continue to support the bill but I will be listening to the contribution from the Labour Party. I am looking for alternatives but at this stage we see it as appropriate that the infrastructure is built on a levy that has already been in existence since 2011. They have already passed on the cost; do not up your prices any more, Spark, using this as an excuse. We will be watching. Kia ora.

[Continuation line: Clare Curran]

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Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): There are so many things to say. I am going to start off my contribution in the Committee stage addressing clause 1 with talking to the history of the telecommunications development levy and the legislation within which it sits. It passed in this House in 2011 with a vote of 65 to 52. One of the most interesting things about that vote was that the ACT Party, which then had five members in the House, split their vote. Three members voted against and two members voted in favour. The two that voted in favour were the two that had been sitting through the select committee process for the whole time. That piece of legislation split Telecom in half. It was structural separation. The Labour Party did not oppose that. We did not oppose that at all. The person sitting on my left was the Minister for Communications who brought in the legislation for the operational separation of Telecom. We did not oppose that. What we opposed was the process and the setting up of a monopoly. A monopoly that is now called Chorus that was set up to be given, handed over on a plate, the contract for the ultra-fast broadband project.

[Continuation line: We opposed that implacably]

CLARE CURRAN

We opposed that implacably, we opposed the way it was done, and we opposed the concessions and handouts that it was given along the way to do that. Chorus has now become the monopoly provider of 60 percent of the roll-out of ultra-fast broadband at the same time as being the monopoly that has the copper network, which sits alongside that and has continued to provide problems. In that legislation was the establishment of the telecommunications development levy. Labour did not oppose that part of the legislation. We never opposed that because we knew the benefits of providing a fund that was provided by the industry for the provision of services that could not be got through the market. My colleague over here talked about the market gap. There are many market gaps in this country with regard to the digital divide. There are market gaps within urban areas as well, with people who cannot afford to access broadband, cannot afford to access home phones anymore, and use prepaid mobile phones. There are people who are disadvantaged, particularly families with children, which is the biggest problem. Nobody—nobody—could say that the Labour Party has not stood up for those people. Nobody could say that the Labour Party has not been the champion of closing the digital divide in this country and has led the charge on that. It led the charge in that select committee, which you referred to earlier around it, and has pushed and pushed around those issues, so nobody could say that. But that telecommunications development levy, by the way, everybody should remember that this was Steven Joyce’s baby. The brainchild of Steven Joyce was to create this, which has caused so many ongoing headaches for the Government. He created that legislation that set the terms for that levy to be reduced down to $10 million next year. What the National Party—and the Minister in the chair sitting over there was a candidate for the election—introduced 3 weeks before the election out of the blue was to just willy-nilly extend that levy. It extended it, created a new levy and came up with more money. This was because National members knew—their market research was telling them—that there was a big problem in rural New Zealand because there were too many people getting crap broadband. It was turning out to be a problem for National members in their polling and in their market research. So what happened—all of a sudden we get $150 million. There was no consultation, no reports, no analysis and, interestingly, since the election—and it is now more than 6 months since the election—we still have not seen any reports. There still has not been any analysis and the regulatory impact statement admits it. It is embarrassing for the Ministry of Business, Innovation and Employment, I have to say, that it has put out a regulatory impact statement that acknowledges that it has not done the work. What we have got is a levy that was supposed to go to $10 million and now—oh!—it is up to $150 million. I think that my colleague David Parker made it clear that if there had been a different process around this, if there had been full consultation around how to spend that $150 million, how to do that with the community not just with the providers who are paying the levy, but full consultation about whether the Rural Broadband Initiative worked and which bits have worked, which bits have not worked, and then how could we do it better, and if they had done that in a way that had been contestable and fair, we would not have opposed this —because we had never opposed it at the time when it was made before the election. What we said was that it needed to be contestable. It absolutely needed to be contestable and fair. What we are seeing in the regulatory impact statement is that there could be capture by the big providers again, which is a rort, an absolute rort. This is why we are opposing it. This is why we are retaining our consistency of opposing something that is wrong. It is putting good money after a bad outcome and we are terribly concerned about that. I want to turn to a curious thing. My colleague Chris Hipkins referred to the fixed wireless broadband and the terrible situation that is occurring out there. Well, what we think we have discovered—and this is one of my questions or many questions that I have for the Minister tonight during this debate—is that there is some information around how many customers. This goes to the 8,500 customers on fixed wireless broadband, which looks as if it has cost around $7,000 per customer. Who are they and who are the providers behind them—

Dr David Clark: How much?

CLARE CURRAN: $7,000 per customer. That is a rough estimate but it is just doing some basic maths.

Dr David Clark: No evaluation.

CLARE CURRAN: We have no other information to go on, Dr Clark, no other information. There have not been any reports produced. Well, let us have a wee look at who those customers might be and who is doing the connecting. Well, the top provider—self-described top provider, actually—for the Rural Broadband Initiative’s fixed wireless connections is a company called Farmside. It describes itself as that and I have even got a piece of paper here that I would be very happy to table if anyone wanted me to. It talks about how it provides fast broadband via satellite, Rural Broadband Initiative’s fixed wireless, and fixed line solutions as well as phone and mobile access. It says it has got more than 15,000 rural customers. Well, that is really interesting because what I have heard is that it is transferring many of those customers over to fixed wireless broadband, which is fine in itself, but it might be interesting for the House to know that the managing director of TeamTalk, which is Farmside’s parent company, is David Ware, who is the—

Hon Amy Adams: Brother-in-law, yes.

CLARE CURRAN: —husband of Belinda Milne, who happens to be the Minister’s sister. It is curious—

Hon David Cunliffe: —and Jason Ede’s employer.

CLARE CURRAN: Oh, and Jason Ede’s employer. I forgot about that. I mean, the fact remains that it is a little bit curious that Farmside, which describes itself as one of the top providers for fixed wireless broadband, which has got very few customers—and I think everyone would acknowledge that, given that it has had 5 years, spent $60 million, and now it has got 8,500 customers, which equates to about $7,000—

Dr David Clark: Good transparency. It’s an evaluation.

CLARE CURRAN: I think there is a really important issue here around transparency and around what actually is going on here with rural broadband. There are questions about how the money is being spent on the towers and there are questions around what actually is being delivered out there for rural New Zealand. So I say to the House tonight and I say to anyone from the other parties who want to listen that there are some very, very good reasons to say “Hang on a minute. Let’s not commit another $150 million to a programme that is highly questionable and needs scrutiny, and let’s take a pause.” We are absolutely committed to rural broadband and delivering that infrastructure and—

[Continuation line: Shaw]

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Speech - JAMES SHAW (Green)

JAMES SHAW (Green): I have been listening to the debate on the Telecommunications (Development Levy) Amendment Bill and I am trying to sum up what the different objections or questions are that have been raised by various members previously—and there are nine that I can discern. So I just wanted to flag these and ask the Minister in the chair to provide some kind of response to these questions. The first one, of course, is the concern that was raised earlier tonight when Spark released its press release saying that it was going to be passing along these costs to its customers. What is her response to Spark about that? The second question that I have got is around some of the questions that were raised to do with quality of the connection. Is the work that is being done so far actually producing the kind of result that we would want it to? Are those connections actually working for people? Are they providing the kinds of benefits that we would expect? The third question is about the evaluation and the reporting of the existing Rural Broadband Initiative. Is it an effective spend of the money? There have been questions raised about the sheer amount of money per connection. That has come up, so we would want an answer to that.

[Continuation line: The fourth question that we have got and that Gareth Hughes raised]

JAMES SHAW

The fourth question we have got and that Gareth Hughes raised earlier is about the extent to which we are considering new technologies as part of this initiative. Is that being considered? And the pace of change in these new technologies. Is it possible that there will be a disruptive technology that comes along while we are still rolling out the existing solution that may actually render it redundant? The fifth question we have got is about whether companies will have two bites of the cherry. As we understand it, when the Government auctioned off the 700 megahertz spectrum, it reached a contractual arrangement with Spark and with Vodafone to roll out cellphone towers, which meant that they got a slightly reduced price on the spectrum. If that is correct, will they be bidding for this new money, essentially to be doing the same work? Will they get two bites of the cherry for the same piece of work? The sixth question is around process. Why is this being considered under urgency? I will leave it at that. The seventh one is related, which is why are we seeking funding for initiatives now before the policy details have emerged about how that money is going to be spent and while the policy design is still being consulted on? Why do we have the cart before the horse in terms of seeking funding before we know the details of the policy? The eighth question is in relation to competition and our concern that was raised earlier about needing a more diverse and multiparty approach with different solutions for different rural communities. And the ninth question is what is the Minister’s response to the two Supplementary Order Papers that are being put forward by Gareth Hughes and me? I do not know whether that is comprehensive. I have been trying to discern what the different objections and questions are that various members have raised. I may have missed some, but if we could start with those nine, I would be delighted. Thank you.

[continuation line: David Clark]

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Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): I rise to speak to the Committee stage of this bill, the Telecommunications (Development Levy) Amendment Bill. I want to speak a little bit about the title of the bill because I think there are some more fitting titles for this bill. I think it would be useful to consider them as sensible amendments to the bill to more clearly illustrate just what this bill is doing, in order to make it transparent to the public what is happening when this bill is passed, so that people are not surprised further down the track when their bills go up, they are not surprised that a new tax has been put on them, they are not surprised that there is Government waste, and not surprised that there is another broken promise from this Government. I also want to address, though, a point first raised by Tracey Martin in her contribution earlier, which was a good one, I have to say. The issues are being debated here, and although we may disagree on whether this bill should be supported or not at this stage, part of the point, of course, of the Committee stage is to hammer out the ideas and to have the full debate and to ask whether this is a good idea or a bad idea. We are pretty firmly convinced that it is a bad idea. But Ms Martin raised a very sensible question. How otherwise would this be funded? From this side of the House there are two things from the Labour side that we would say are obvious. The first is that it is not wise to fund something that is not working. And because there has been no evaluation of the existing programme, it makes very little sense at all to continue to fund something that has not been proved to be effective and to be working. Let us put that to one side, because we all want good rural broadband. I think that is the one point everybody around the House is unanimous on. It is something that will take the country forward. The Government seems to have a somewhat limited vision for what might be possible, but we would all agree that it needs to be better. I wonder whether the Government might consider investing its Future Investment Fund in such an activity. I mean, what is that fund for if it is not for investing in future infrastructure? It seems the most logical thing in the world that the Government might choose to invest that money in. If we put to one side the fact that it has promised to spend it 10 or 15 times over—it talked about paying off debt at one stage; well, it is $88 billion in debt. The $4.8 billion it got from flogging off the family silver will not cover that. But if we actually take the promises that it has owned up to and put in ink in terms of the Future Investment Fund, this would seem to be a sensible thing to fund that out of, rather than imposing a new tax on users. We have seen earlier this evening Spark come out and say that this is a tax that it will be transparently passing on to its customers. We have had the Telecommunications Forum come out and say that it has been bearing the cost in this industry and it cannot continue to bear it any longer. It thought this was time limited, this tax, but a new tax has been issued that takes it for ever into the future. This Government has promised not to introduce a new tax and now it is. So the first of the alternative titles I would suggest should be considered by the Government is—let us just call it what it is—the “Telecommunications (Development Tax) Amendment Bill”. This is a Government that is trying to introduce three new taxes, despite having promised—crossed fingers behind its back—that it would introduce no new taxes if it was elected. In this Budget we have got three of them. This is a Government that is introducing a new tax, and we have had the proof of that, of course, in the departmental disclosure statement, which says quite clearly: “Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?”. And the department says, in the biggest letters on the page, yes. This is in the nature of a tax. Bill English has tried to deny that, but the public of New Zealand know a tax when they see one. It is an additional charge on top of what they are currently being charged—exactly what the industry now proposes to pass on transparently as an additional charge. So we have got that and it therefore makes sense to call this bill the “Telecommunications (Development Tax) Amendment) Bill. That would be plainer. That would be clearer. More people know what a tax is than a levy. It is a nice clear way of saying what it is. This tax, of course, is going to be imposed on small businesses around the country. We know from Telecom, from its estimate, that it thinks that it will cost about a dollar each—

[continuation line: David Cunliffe]

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Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

Hon DAVID CUNLIFFE (Labour—New Lynn): I have to say, I was enjoying the contribution of my colleague David Clark, and I will pick up where he left off. Members opposite seem to be disputing the question of whether this is, in fact, a tax. It is proper for us to address that question in the debate on clause 1 of the Telecommunications (Development Levy) Amendment Bill in this Committee stage, because that contains the title. The fact that it is a tax is, I think, quite plain. It is a cost that is imposed on members of the public through this instrument that applies through the companies concerned. We had a statement out today from Spark, the old Telecom New Zealand, which uses language about a tax and makes clear that it is going to have to pass it on to its customers, and, what is more, that it is looking at doing so with an explicit splitting out in everybody’s phone bill so that they can see what this extra tax is. This is an extra tax and it will be shown on people’s phone bills. That is a statement from Spark. I think members of the public and colleagues know that I have had cause in the past to take issue with some of the old Telecom New Zealand’s statements, so I do not give it a soft run, but I will take it at its word for that. If that was not good enough for people, let us turn to the statement published on Friday 22 May, today, from the Telecommunications Carriers Forum. This is the industry body. It is not one company pushing its own barrow; this is the forum of all the players. It talks about this being unnecessary to pass under urgency “in order to tax the industry”—this is quoting from it. This is the industry body. The industry body is calling it a tax: “The Bill extends a tax, which to date, has not been explicitly recovered from consumers. However, the industry cannot continue to absorb ongoing costs of this magnitude.” The next question that arises—members opposite have said that we do not need a select committee process because there is nothing new in this. Well, what is new—I think Mr Moutter , the chief executive officer of Spark, makes the point very clearly—is that the original tax was a one-off to support the development of ultra-fast broadband through the Rural Broadband Initiative. It was time limited, and the downsizing of those taxes was legislated for in the formal bill.

[continuation line: So to change the law]

Hon DAVID CUNLIFFE

So to change the law is in fact a change because, under the continuous disclosure rules of the stock market, the companies concerned have to build that into their forecasts and that has to be notified to the exchange and made public. If Parliament wants to override—people will see the irony of me having to set this out for members opposite—those private property rights, which are enshrined in the securities legislation, then we are using legislation to do it, and therefore something is definitely changing. We are overriding legal rights. What then is the proper framework of objectives to consider the questions? I want to commend our Green colleagues for the list that they have come up with. I am going to refer to that again. Let me just set out for the public what Labour’s goals are here when we look at this type of policy issue. The first one reminds me of the old digital strategy with the three Cs. We want great connection—connectivity—for all New Zealanders. To be frank, we want faster, cheaper broadband wherever you are in New Zealand. We support the goal—and I think every member of this House does—that broadband ought to be ubiquitous and available anywhere in New Zealand, and the whole country benefits from the fact that everybody is on the network. You can ring up people; their phone numbers are in the phone book or they are on the net, or what have you. Nobody is left out and the whole country benefits. That is the first goal: faster, cheaper, ubiquitous connection. But it leaves open the question: is this the right instrument? Is this helping? How would you know? There has been no evaluation done. The second one is user capability. We are opposed to digital divides. We abhor the digital divide, which is an income-related divide, where about a third of households—low-income households—do not have fast broadband access, and that impedes children’s learning and all sorts of things, such as access to Government services. We want every New Zealander to have access to the net at speeds that they can use. We also are concerned about the rural-urban divide. We know there has to be a technology mix, starting off with fibre in the backhaul, out to, perhaps, ADSL copper, VDSL, or whatever else is the current flavour of technology, and then out to mobile and then out to satellite or perhaps Project Loon will bear fruit and we will have a mesh network of balloons—who knows. The technology frontier will shift. But that is the point—because the technology frontier is shifting, because the technology is changing, it is prudent and proper, and really important, for the Government of the day to carry out a proper analysis on how the tax has been operating before imposing a new tax over the top of it. That brings us, of course, to the third C, the content. We want a vibrant content environment, we want there to be competitive conditions online so that New Zealanders can access the content that they need and they want on the cheapest possible terms. Those are goals. What questions arise? I am just going to come back to Mr Shaw’s list. I think it is a really good one. Will these taxes be passed through to consumers? Well, we have the industry body, and one of the largest players, saying that it will. That is, at the very least, a very important and open question. Secondly, what about the quality of connections? There are two issues. There is a technical sufficiency argument and there is a benefit-flow argument—who gets what? They need to be answered. The third issue: has there been sufficient evaluation and reporting? Well, there clearly has not been because there is not a proper regulatory impact statement and there has not been an options analysis done by officials. Fourthly, what do we know about disruptive technologies? I mentioned Project Loon; there could be others. The point is: who would know? The Government has not done the work. Fifthly, will companies have two bites at the cherry? Are they under existing obligations? I do not know, we do not know, and the public does not know, but that is a very important question, because we are opposed to companies double-dipping. If they are contractually bound because they have concessional terms under a previous spectrum licence auction, then we should not be making New Zealanders pay twice by imposing a new tax on them, especially not under urgency in the dead of night. Was the process proper? Well, clearly it was not. There has not been an options analysis done and there has not been a regulatory impact statement done. Why should seeking funding from policy have been designed in this way? Was the cart before the horse? It looks like it was. To answer that question, we turn to the OECD’s telecommunications policy unit and a very major report on telecommunications development obligations or levies, which was published in 2012, and was widely regarded at the time as the gospel. The report sets out the following questions, which—it is a shame—the Government has not, apparently, addressed. First, “Define the specific features of the service under consideration.” Second, “Determine whether the service is essential for full participation in society and therefore in the public interests.” Third, “Establish if market mechanisms are insufficient or if sufficient services are available.” Fourth, “Assess the options of imposing a universal service obligation relative to other alternatives.” Note that has not happened in this case. Fifth, “Evaluate policy alternatives in light of the broader policy objectives and other ongoing programmes.” That has not happened, either. “What are the criteria that an evaluation should take care of?”—this is page 24 of the OECD study. “Parsimony, sufficiency, neutrality, focus, adaptability, predictability, accountability, and effectiveness.” It is quite a long list. The OECD has done a lot of work. Well, what are they saying? Turn to page 27. “At present, revising universal service policies to include service from any location may not be feasible in all OECD countries.” It goes on to say that those with high population density like Korea will have no problem. Those with low population density like Sweden, Australia, or New Zealand may well have a problem, and the issue of a universal service obligation is a very pertinent issue to be evaluated and raised. There is certainly, in terms of the OECD’s work, no case for an automatic roll-over. This is highly contentious stuff. What issues arise? Well, what they name is cost relative to benefits. “In large countries with large, unpopulated, or sparsely populated areas, like the South Island of New Zealand, the cost of providing access for any location would exceed the benefits.” How much is too much? How far away is too far away? We are never going to run a fat fibre pipe to Mount Cook. There are not enough people there. But we may want to use mobile broadband, satellite, or loon—who knows. The point is, the work has not been done and the public does not get access to that information. “What is the range of services to be provided?” asked the OECD. What is the impact on competition of imposing a TDO? What is the impact on the quality of service? What about the affordability of the service if the tax is passed on to the consumer? What about technical issues like emergency services and social tariffs, and so on and so forth? Then on page 31 the OECD—

[Continuation line: Amy Adams]

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Speech - Hon AMY ADAMS (Minister of Broadcasting)

Hon AMY ADAMS (Minister of Broadcasting): Given that the debate on clause 1 is quite a wide-ranging debate, it is probably a useful chance to take my call on this matter. I was not otherwise intending to speak on the title, but I do want to make a few comments. The first is that we have heard repeatedly from Labour in this debate—as if saying it often enough makes it true—that this is somehow a new tax. It has been in place in its current form and at its current level since 2011 and it was in place at a higher level under the telecommunications service obligation before that. Nor is it something we have decided to do post-election without telling anyone. It was announced in August as part of the election manifesto that, if elected, this is what the National Government would do. So there is no question that this is in anyway inconsistent, nor can anybody with any sort of twisting of the facts to suit the argument suggest that this is new. It is not new. The costs are in place. The costs of this are already in place. There is zero increase to the costs to the telecommunications companies. So I have said there is zero justification for any increase in their bills. I have never said that they will not be opportunistic and craven and try to justify some profit grab through it. I have said there is no increase in costs to the telecommunications companies and therefore zero justification for them to increase their fees. If Spark wants to announce that it is going to put its prices up, that is something it has to explain to its consumers, but let me tell you, as others have said in this Committee, it cannot sensibly justify it because of this legislation. These levy extensions that we are talking about tonight do not take place until 2016, so if it does put the cost up, let us remember two things: when they will go up and by how much. At the very most we are talking about cents per bill per month. So unless it is going to put costs up starting 1 July 2016 and of no more than 19 cents for a prepaid plan and maybe up to 80 cents for a consumer, then it is not being honest with New Zealanders. Even then, it is already in your bill, so it would be double-charging you.

[Continuation line: Can I make the point that it is very easy to stand in this]

Hon AMY ADAMS

Can I make the point that it is very easy to stand in this House and say how much you support rural broadband but not be prepared to do anything to make it happen. Here is the reality: we are building infrastructure in rural communities that telecommunications companies will use to sell their products. The telecommunications companies that are paying this charge use this for their business services. So who should pay for it— taxpaying mums and dads or the telecommunications companies? My view is that the telecommunications companies should pay. So, when Labour says to take it out of general taxation, it is saying that we should pay for the infrastructure that Spark , Vodafone , Chorus, MyRepublic, CallPlus Services, and all of the others use to pay for their business. That does not make sense. That would be irrational and unreasonable. It should fall on the industry. Those in the industry should not be allowed to just sell the service where they can make a lot of money. Instead, we levy them to say that, actually, we have an expectation that you will provide services everywhere. That money then provides the communal infrastructure that those same companies provide their services over. The question that has come up also is: “Why is it urgent?”, which is a fair question. I accept that because, yes, the extension actually takes effect from July 2016. I will tell you why it is urgent It is because anyone who understands how these processes work knows that I cannot go out and start negotiating for contracts for this to work until the money is legislated for. So the first step is that there has to be a legislative mandate to say that this money is available, then I can start the process. The longer that is pushed out, the longer until people get better broadband. To every member in this House who has talked meaningfully about: “Oh, we have got to get better broadband, it is taking too long.”, I say that that is what the urgency is. The urgency is that New Zealanders want this, and they want it as soon as possible. This bill has been made the most simple bill possible. It does not talk about the levies operation, how it is allocated, how it is spent, or how the Commerce Commission divides it. It simply provides the basis for the money so that we can get out and start getting these processes in place. Let me close by just saying this: broadband is critical to everyone in New Zealand—everyone. Somebody has to pay, and I am absolutely comfortable that the right place for that payment to fall is a levy on the telecommunications companies that will use it and that will benefit. There is zero justification for anyone to increase prices as a result, and if they do, that is a conversation that they should be having with their consumers. If I was their consumer, I would be looking to shop around.

[Continuation line: Kris Faafoi]

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Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): I would like to thank the Minister for taking a call, because now everything is as clear as mud. I am really happy, because it is so clear that it actually goes against what the Telecommunications Forum has said in its press release tonight. The Minister has said that the telecommunications companies are the ones to blame here—that this is not a tax. But it is clear from the press release put out by the Telecommunications Forum, I guess a couple of hours ago, that this situation, as I said before, is as clear as mud. The Minister said that because of the level of levy—or tax, I should say—the prices should have come down. Well—

Hon Amy Adams: No, I didn’t.

KRIS FAAFOI: Yes, you did. But the Telecommunications Forum disputes that and in its press release, this evening I guess, it says that the bill that we are currently debating “extends a tax, which to date, has not been explicitly recovered from consumers. However, the industry cannot continue to absorb ongoing costs of this magnitude.” So who is right? Is it the Telecommunications Forum, which is saying that “We have absorbed this for some time and now we have to charge.”, or is it the Minister, who says: “Well, it shouldn’t be double-charging.”? I guess that is why we have got a problem with this piece of legislation, because, as I said, the situation is as clear as mud. This is a new tax. In fact, the departmental report on this bill says it is a new tax. It has been quoted, but just because the Minister said that this is not a new tax I will quote it again. Part 4 of the departmental report asks a very specific question, at 4.2. That question is: “Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?”, and the answer is “Yes”. The answer is “Yes”. And then Spark —[Interruption] Here is a question for the Minister, if she is disputing a lot of things that I have said today. Does she dispute something that she said today? In her first reading speech she said: “… the industry will not need to put its prices up, or explain to its customers why their bill is changing.” Well, that would be great because she is obviously trying to cushion the market, and people at home will be worried if they are going to have to pay more in their bills. But the reality is that less than an hour later Spark said it was going to put its prices up by $1 a month. You can question whether that is the fault of the company—and that question has been asked by New Zealand First and also by the Minister—or whether it is the fault of the Government, but the reality is people are going to be paying more for their monthly bill. They are going to be paying more for their monthly bill—that is the cold, hard reality of this. This is a new tax, and this Government is trying to spin its behind off to say: “Oh, well, it’s not our problem. It’s not our fault.”

[Continuation line: Well, you created this problem]

KRIS FAAFOI

Well, you created this problem—you created this problem. We are not going to vote for this piece of legislation, for a very good reason: $300 million has already been spent and, as we on this side of the Chamber have said, the assessment and the critique of Rural Broadband Initiative phase one has been, well, less than ideal. So if we are going to go and spend another $150 million, which is going to be put together by this tax in this bill, I think the New Zealand public would like us to know whether Rural Broadband Initiative phase one has been effective or not. The Government claims that 86 percent of rural users now have access to this. Well, we do not necessarily think that that is the case. There has been no assessment of Rural Broadband Initiative phase one. This issue was before the Commerce Committee yesterday morning. InternetNZ wants us to have an assessment of the $300 million—which is, you know, not pocket change—to find out whether it has been effective. I do not think it is a bad thing for members on this side of the Chamber to say: “Was that $300 million spent well, so that we can commit another $150 million to the next phase of this programme?”. We cannot sit here and say: “Well, yes, go and do whatever you like.” We absolutely agree with the objectives of the Rural Broadband Initiative, but $450 million is a hell of a lot of money, and we want to know whether the first $300 million has been effective or not. We have big questions about that. We have had a number of communities come to our select committee and say: “Well, our experience hasn’t been that flash.” So, is this something that is happening up and down New Zealand? Is it something that we need to address, and is it something systemic?

[Continuation line: Dr David Clark]

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Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): I want to talk again about the title of the bill because I had raised only one of my suggestions when the bell so rudely interrupted me earlier. The second suggested title that I have is that the bill be called the “Telecommunications (Government Waste) Amendment Bill”, because that would label clearly the problem we have here, where the Government is refusing—refusing—to evaluate this proposal before it takes any further steps. Before I elaborate on that, I want to also just quickly touch on a point raised by my colleague Mr Faafoi in his contribution. He talked about how things were now as clear as mud as to whether it was a tax or a levy. The Minister says that it is a levy, the industry says that it is a tax, Mr Cunliffe has raised the point that the OECD would probably define it as a tax, and we have numerous other references, including from the Minister’s own department, referring to it as “something in the nature of a tax”. So the Minister now claims that she is the only one who is right on that point and that everybody else is wrong, and perhaps it is as clear as mud in the sense that the Prime Minister’s promise not to raise GST was as clear as mud, and the promises made by the Government that it would raise wages by $7,000 by 2026 were made in the same vein. All these promises were meant in one way, and now the Government is trying to say that they mean something else. It said that it would get to surplus. That was the central promise of the last election campaign from this Government. Well, we know now that that has not been achieved. It is not clear that this is a bill about a development levy. It is a development tax, as I have suggested in my previous contribution, but it might well be labelled waste.

[Continuation line: Anything that is not measured]

Dr DAVID CLARK

Anything that is not measured, and this is a simple precept, we do not know whether it is actually being spent well or not. We have suggested alternative ways it could be funded and we have asked the Minister to explain—or others in this Committee have—why it will not be evaluated properly. Questions that hint at conflicts of interest have been raised. I am not aware of the detail of that, but I think the Minister ought to be on her feet explaining why she is not going to evaluate it. Even if she is going to press ahead without public scrutiny on this bill, I think it would be reasonable for her to explain to us why no evaluation is happening. This is why it could well be called the “Government Waste Bill” because the facts that we have, in as far as we have them, are that $60 million has been spent on this particular initiative so far, to get only 8,500 connections. That is the best estimate available. That is $7,000 per connection and the quality out there is not great. We have heard that from several MPs who have had people coming into their office complaining. I have certainly had them. I took the petition to the select committee, which has seen a change in behaviour as a result, and I know my colleague Clare Curran has done the same, and I do encourage others to do so. This is a wasteful bill. If we are not going to evaluate whether the programme works, and all of the evidence points to it not working and not being an effective use of taxpayer money, then there is an arrogance in not evaluating it, in not being able to explain, in not being able to actually front up and say this is why we think it is worth investing again. I do not think the public at home are going to say that $7,000 per connection is good value for money. There are plenty of other ways that we could get broadband there quicker. I think the overseas experience would be that it could get there cheaper and be of a better quality. This is a Government that needs to do some explaining. So I am hoping the Minister will soon get on her feet and explain to so why it is that what appears to be incredibly wasteful spending is not being evaluated. We all want better broadband—we all want better broadband. All of us would like to have in our electorate offices happy people coming through saying: “Look I’ve just started a new business and I’ve got this great fast broadband and now I’m able to participate in the world.” The reality is that it is not the experience. This Government has been in Government for nearly 7 years now. We heard Melissa Lee earlier complaining about the poor quality of broadband—the irony when Government members are also complaining about the poor quality of broadband, despite having been here for quite some time, seems to be lost on them. So I suggest that in addition to the title “Telecommunications Tax Amendment Act” being considered, the alternative title “Telecommunications (Government Waste Amendment) Act” also be considered. Thank you.

[Continuation line: Chairperson Borrows: I will give a call shortly, but by way of]

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Speech - The CHAIRPERSON (Hon Chester Borrows)

The CHAIRPERSON (Hon Chester Borrows): I will give a call shortly, but by way of being helpful and in no way being patronising, I will note that the debate is becoming somewhat repetitious at the moment. The discussion around this clause 1, “Title”, is the widest ranging part of this debate. After that we move on to clause 2, “Commencement”, clause 3, “Principal Act”, the amendments that are around clause 3A, and then clause 4, “Schedule 3B amended.” These will be very narrow debates and very little leeway will be given in so far as members must address those parts. Members seeking clarification on this could look at Speaker’s ruling 114/7. I just draw to the attention of members that now they should be looking on new, novel, and innovative avenues of inquiry or debate or discussion.

[Continuation line: Tracey Martin]

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Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader—NZ First): I will definitely try to be original. First of all, can I thank Dr Clark. I am actually enjoying myself—this is a debate—but I find it very interesting that I am doing the Government’s work. Not a single member of the Government apart from the Minister has stood up to actually address the issues that the Labour Party, not the Opposition, has raised. So first of all—

Hon Judith Collins: You’re doing a great job, Tracey.

TRACEY MARTIN: Thank you, Ms Collins. First of all, New Zealand First would agree absolutely with the comments around evaluation that Dr Clark raised. Absolutely we would agree. It has been raised also by the Green Party, and previously in conversations we have said that the Commerce Committee would be a perfect organisation through which to do an evaluation. But that is no reason to stop this bill. We can accept that urgency may not be the best thing, but even if we—I think I am in a parallel universe. I am standing here arguing against the Labour Party about a levy on a corporation! Can I just talk a press release from Friday—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. The member’s address raises an interesting point. If the New Zealand First Party were in the position where on the basis of its concerns about the lack of an evaluation it wished to change its vote, is there any possibility of correcting the record on clause 1, which has already passed?

The CHAIRPERSON (Hon Chester Borrows): No, it is not an issue and it is not a point of order. Continue.

TRACEY MARTIN: I raise a point of order, Mr Chairperson. New Zealand First is quite clear in its own mind how it votes, when it votes. It does not require the Labour Party—

The CHAIRPERSON (Hon Chester Borrows): That is a matter for debate, not a point of order. The member may continue with her call.

TRACEY MARTIN: Thank you, Mr Chair.

Hon Judith Collins: Such a patronising person.

TRACEY MARTIN: And the evening goes on, so there you go. Can I just draw the Committee’s attention to a press release on Friday, 22 August 2014 headed “Spark annual profit almost doubles … grows mobile revenue”. It said: “Spark New Zealand … the rebranded Telecom, almost doubled annual profit on the sale of its Australian AAPT unit, and grew mobile revenue as it repositions itself away from relying on dwindling landline use.” It made that record profit with this levy in place—with this levy in place. And that net profit rose to $460 million, or 25 cents per share—25 cents per share—but 22 cents only per month is what it needs to recover on mobile calls to actually pay this levy. Yet it made 25 cents per share in the 12 months ended 30 June from $238 a year earlier, and I am arguing this against the Labour Party. I find that unfathomable. I would not have believed, when I came down to the Chamber today, that I would be standing here doing the Government’s job—doing the Government’s job on a Government bill. Why on earth am I doing your job for you? Get up and argue. I agree that there needs to be an evaluation. Surely, because the National members are not rising to their feet, National must agree also, because the Green Party and New Zealand First appear to be doing their job for the consumers of New Zealand and those in rural New Zealand that want broadband. The other thing that Dr Clark said, if I can just address it, was that the alternative way to pay for this infrastructure, which, as the Minister quite rightly pointed out, is used by every one of the 22 telecommunication companies—upon which a percentage of their profit is paid into to create this infrastructure. For goodness’ sake, Mr Jami-Lee Ross, please take a call and stand up for your own Government bill. One of the things missed out that Dr David Clark said was—it is just so unusual that I am having difficulty dealing with it—that the Future Investment Fund could pay for this.

Hon David Cunliffe: Would the member her vote if—

TRACEY MARTIN: No, we will not vote our vote, Mr Cunliffe, because you have not provided enough evidence to suggest that this is the way that we should go. The Future Investment Fund—New Zealand First quite clearly said that we believe that 49 percent of our State-owned assets should not be sold. How on earth now could we vote for the use of those profits, when we said that they should be reinvested in income earning assets that provide an essential service such as power, which has been sold off? How on earth would New Zealand First then actually stand by and support some organisation that said we should take it out of the income of the Future Investment Fund? But here is the irony that blows my mind. Whether the consumer is currently paying 22c per month for a mobile call or 80c for any other service because the levy is currently in place, or whether, as the Labour Party suggests, we actually take that money out of another taxpayer bucket, they are the same people—they are the same people. The consumers of New Zealand who have got the mobile phone in their hand, and I suggest if Spark puts up their prices they change their provider—

[Continuation line: Dr Megan Woods]

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Speech - Dr MEGAN WOODS (Labour—Wigram)

Dr MEGAN WOODS (Labour—Wigram): It is my great pleasure to take a call on the widest-ranging part of this debate, as you identified, Mr Chairman, on this Telecommunications (Development Levy) Amendment Bill. This is a seemingly very short piece of legislation that we have before us of just four parts. But I, as a number of my colleagues have done before me, want to talk about the title of this bill in terms of the Telecommunications (Development Levy) Amendment Bill. One of the objections that has been raised from Labour members who have spoken previously is that this is increasing a taxation from a Government that purported that there would be no new taxes. What do we have here? A new tax and an increased tax. It is dressed up. We are trying to call it a levy, trying to soften the blow, but let us call this what it is. We have had the industry come out today, and one of the questions we have had is why the need to use this process of urgency to go through this. I think that that is a real question that does need to be addressed. Why is it that we are not having the chance for the industry and the concerned players—the people who are needing this broadband in their small businesses and the rural families and families in our regions that are needing this access to broadband—to be able to come and speak to the people making the decision and to have that chance to have submissions at the select committee stage? Urgency should be used for real reasons, not just as a way to ram through some legislation that you think might be a little bit unpopular and you do not want to give people a chance to front up and have some objection to. But this legislation is absolutely on message for the Government. Its was a Budget that was long on broken promises. Its was a Government that was short on vision. It was a Government that all around tried to scurry around the fact and get as close to reaching the non-surplus as it could—the non-surplus, of course, otherwise known as a deficit. What we do have here is a piece of legislation and a title that is quite misleading for people. Of course, it goes without saying that Labour supports more people getting connected to broadband. We know that this is absolutely imperative for the future of New Zealand. We know it is important for education. We know that it is important for our businesses. We know that it is important for our industries. We know that it is absolutely vital. We have consistently focused on getting rural and regional New Zealand a plan for community-based fibre schemes. This is something that has occupied our minds when we have been in Government and our actions. However, the existing rural broadband scheme has been a flop. It is a rural broadband scam. It is not working. Not only is it a waste of Government money but it lacks accountability and transparency. Once again, what we are seeing here is economic mismanagement from a panicking and desperate Government. We can hear the shrieks from the other side that are serving only to underscore this point—the reaction that that got there. It is another example of how it is that National is neglecting the regions and treating them like the poor country cousins. Rural customers are going to end up paying more for this, far from less.

Dr David Clark: It’s shocking in Waitaki.

Dr MEGAN WOODS: It is shocking in Waitaki—that is what I am told by my colleague Dr David Clark. He wants to know why the member Jacqui Dean, barracking from the other side, does not stand up for those constituents in Waitaki who are experiencing shocking internet and broadband connections and why it is that instead of taking a call and explaining to her constituents why she will not back them and stand up for them, she chooses just to interject in an incomprehensible way from the benches opposite. So get on your feet, take a call, stand up for the people who elected you to represent them. It would be great to hear from you. We are all holding our breaths and would like nothing better at this time on a Friday night. The Rural Broadband Initiative was supposed to deliver speeds of 5 megabits to 86 percent of rural households and businesses. At the time Steven Joyce said that this was meant to mean 252,000 customers in rural New Zealand getting access to high-speed broadband comparable to urban levels of services and prices.

[Continuation line: Richard Prosser]

Suspension -

Speech - RICHARD PROSSER (NZ First)

RICHARD PROSSER (NZ First): I was not sure whether I was going to take a call on this when I came down here, but listening to the debate, I feel that I cannot not. I do want to talk about the title. I think the two words that really matter most are “telecommunications” and “development”. Frankly, I do not care whether we call this thing a levy or a tax or a koha or a Danegeld or anything else; what matters is that it is money that gets paid. I agree absolutely with Minister Adams that it should be the telecommunications companies that pay it, because it is actually the companies who, since privatisation, are responsible for the fact that we have not had development in telecommunications in the rural areas. I am going to put this from a slightly different perspective from some of my Labour colleagues because I actually live in the boondocks. I live in a cellphone blackspot—it is called rural New Zealand. There is no coverage. I have got maybe one little sweet spot up by my garage where I can get two bars if I hold the phone up there—sometimes, on a good day, if it is not raining. But in the house? No chance. This is 40 minutes north of downtown Christchurch, so it is hardly the middle of nowhere. We moved up to Canterbury about 6 years from Central Otago. The previous 2 years we had been enjoying blisteringly fast broadband speeds of about 2 megabits, and that was because they had upgraded the cabinet round the corner, finally, but prior to that we were on dial-up. If you wanted to look at a picture, you just sort of set the thing going and then went to bed, and in the morning your 14 kilobyte photo had come through—if you were lucky, if the thing had not logged off through the night. Going back a little bit further in time, when I was growing up I remember the telephone was a black Bakelite thing on the wall with a crank handle. To use it you would pick the handle up, crank the handle, and the nice lady on the other end would say “Number please?”, and so you would say who wanted to talk to. Being a little boy at the time, of course the nice lady in the phone exchange was in the post office and she could see the town. She knew everybody, and she knew who I was probably talking about. She would say “Do you want to talk to Paul?” and I would say yes, and she would say “I’ve just seen him go out.” And that was the way that rural New Zealand was. Actually, in broadband terms most of rural New Zealand is still like that. Most of rural New Zealand would just like to have broadband. So in 2009 we moved to Canterbury and Telecom said yes, that was fine, it could hook us up to broadband, it had checked our lines and they were all fine. It sent us a nice free modem, and that was all going to be good. And then Telecom came to hook it up, and said actually no, our line could not take it. We asked when that was going to happen, and Telecom said it was looking at upgrading the exchange—maybe in about 2012. We asked what we were going to do until then. A couple of the Labour members mentioned companies like Farmside. In those days, that was pretty much one of the only alternatives. It was doing mostly satellite internet in those days. So we looked into that and we looked into radio, and ended up getting a radio link with a company out of Christchurch. We were on the outer edge of where it could reach. It was slightly cheaper and slightly faster than the terribly slow speeds that that satellite was offering. I think it is a bit rich that we have got members—and they are mostly Labour members—who are standing up here talking about rural this and rural that and provincial this and provincial the other thing. They talk about constituents coming to see them and they relate these second-hand stories about the services that are provided in the provinces, holding it kind of out at arms’ length as if it is some sort of distasteful thing—“We’ve heard about the countryside. We see documentaries about it on television from time to time. Every now and then an angry person from rural New Zealand will phone us up, and sometimes a scruffy one will come into our office and sing us a tale of woe about how terrible things are. Of course, we sit there and smile sweetly and nod and take these concerns on board—at a distant academic level, because, actually, we do not live that.” Well, people like me do live it. I understand that maybe the upper levels of the National Party have lost touch with the heartland but there are plenty of members on the Government side who still live in the rural areas, who still know. They themselves experience these things. And so I agree with my colleague Tracey Martin that it is a bit odd that here we are, doing the Government’s work for it, but in actual fact, as far as this is concerned we agree with them entirely. I heard Ms Lee talking earlier about the plight of some travel writers, I think they were, who were having difficulty out in the cellphone blackspot that is called rural New Zealand, trying to get a link to their Twitter. These things do not mean anything to urbanites who understand them at an academic level. Of course, here we have got connectivity. We have got cellphones that have got lots of bars on them all the time. We can go up to our offices and we have got high-speed broadband. They can go back to the hotel and they have got broadband. They can go back to their apartment and they have got broadband. They can go home to their urban electorate offices and they have got all of these things. And so they hear this sort of whining noise from people—“Oh, the poor people of the country have not got fast broadband.”—and talk in highfalutin conceptual ideas about having another review or perhaps forming a committee and looking at things again. People in the provinces have actually had a gutsful of that. It is the provinces that earn this country’s living. It is the provinces that create the wealth. It is the provinces who are always on the rough end of the stick.

Suspension -

Speech - RICHARD PROSSER (NZ First)

The CHAIRPERSON (Hon Chester Borrows): I will just remind members that votes are to be heard in silence. We have had previous precedent today when that was breached, and there were ramifications. We will hear votes in silence.

[Continuation line: Clause 2--Hipkins]

Clause 2 Commencement

Speech - CHRIS HIPKINS (Labour—Rimutaka)

CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on clause 2 , which is the commencement clause of the bill. It is a nice, simple, straightforward clause which reads: “The Act comes into force on the day”—on the date after—“on the day after the date on which it receives the Royal assent.” That seems relatively straightforward. What does that actually mean?

Hon Ruth Dyson: Can you say that again?

CHRIS HIPKINS: I will read it out again because I completely botched it up the first time. “The Act comes into force on the day after the date on which it receives the Royal assent.” That might seem relatively straightforward. The Royal assent would typically happen within a few days of the bill being passed through all of its stages by Parliament , with the Governor-General, effectively, signing it on behalf of the Sovereign, the Queen of New Zealand, who is, of course, Queen Elizabeth. However, there is no guarantee that in fact the Royal assent will be given. All New Zealanders work under the assumption that if a law is passed by Parliament, it is automatically going to become the law of New Zealand. That is not correct. In fact, we have the royal prerogative, which does allow the Sovereign of the country to not provide Royal assent. That has happened not in New Zealand but in other jurisdictions that have a similar procedure. If I look at the Parliament of Belgium, for example, where the issue of the Royal assent came up because a law was passed by Parliament—and I think, from memory, it was around gay marriage—which the king of Belgium objected to and therefore refused to provide the Royal assent. Therefore the will of the people, through the democratically elected Parliament was thwarted, or perhaps it was not. What the Parliament of Belgium did—and this is quite a novel approach—was, effectively, removed the king from office for a day. The law was signed—

The CHAIRPERSON (Hon Chester Borrows): I would not want the member to feel that I was being pedantic in any way, but it has been drawn to my attention that speculating as to what the Sovereign may do at any one time is not only a long way away from the ambit of this particular clause but may draw disrespect towards the Sovereign. The member may wish to check Standing Order 118 in relation to that. I would ask him to stick fairly close to, as he has conceded, the very narrow nature of clause 2.

CHRIS HIPKINS: Absolutely, and I mean no disrespect to the Sovereign whatsoever, and I wish to make that abundantly clear. However, the Royal assent is granted by the Sovereign of New Zealand, who is Queen Elizabeth II, or the Governor-General. The point that I am merely making is that there is no guarantee that the Royal assent would be given by the Sovereign, and I am not speculating in any way that the Sovereign may or may not give the Royal assent. I am simply pointing out that there is precedent in other jurisdictions that follow the same legal process as us of the Royal assent not being given. In the case of Belgium, what that resulted in was the Parliament effectively taking the sovereignty for itself for a short period of time, which allowed the Prime Minister to sign the law and then, of course, the Sovereign was reinstated. That was the precedent in Belgium. We are very fortunate that in New Zealand the Royal assent, as far as I know, has never been refused under the Royal prerogative. And that, of course, is a very good thing. Because the principle that we have in New Zealand is that the Parliament, the will of the people through the Parliament—even when the minority are right and the majority are wrong—the will of the people through the majority in the Parliament will be given the Royal assent, and that will become the law. So this bill will, effectively, come into force at some point within the next few days, probably. Early next week, I would think, that the next opportunity for the Governor-General to sign the law would come into force. Of course, we are debating this bill on 21 May, despite the fact that the rest of the country has moved on and it is now 22 May. The Hansard records of the House, if this bill is passed—and by the looks of the votes, it is going to be passed with a reasonably comfortable margin—the records will show that this was passed on the 21st. The Royal assent is, therefore, not—one would assume that the Royal assent might be given on the 22nd. That will not be the case, because, in fact, by the time the bill makes its way to the Governor-General for the Royal assent, it would be at least the 23rd—I would think it is not going to go to the Governor-General today, normal people time, which is the 22nd. It is the 21st according to the House. It will be the 23rd tomorrow by the time the bill is prepared and ready, but that, of course, is a weekend. So it would be the 24th, 25th, on Monday, which would probably be the first opportunity for this law to actually to come into force. This is quite correct. This is when the Royal assent will take place. At the earliest opportunity this bill could come into force—at the earliest opportunity that it would come into force would be Monday, when you work through the logical sequence of the dates that we are talking about. The reality would be, if the Governor-General were, for some reason, unavailable to sign the legislation—it may not come into effect on Monday, and it may be further down the track. There are, of course, other provisions that mean that if the Governor-General is not available on Monday—

[Continuation line: Tracey Martin]

Clause 2 Commencement

Speech - TRACEY MARTIN (NZ First)

TRACEY MARTIN (NZ First): I am ecstatic to rise to speak on clause 2 , particularly around the part of clause that my learned colleague from the Labour Party has started us down. I think he has raised a very, very good point there, about the fact that nobody can assume that any legislation will pass. Obviously, one of the reasons for the beginning date of this legislation is because one of the things that the Government wants to do, I am sure, and one of the reasons that the parties are supporting this bill, is to make sure that those telecommunications companies have the widest-possible opportunity to amend their budgets, to make sure that the levy that is in place—that they know has been in place since 2011—is going to continue until 2020. We want to give them a strong lead-in on that, because nobody wants to actually negatively affect those telecommunications companies in the way they do their business. Also, the Minister made a point about how, as soon as we know where the money is going to come from, there are other conversations that can take place around the provision and who is going to do this and that and the other. But, actually, I want to go back to the point that Mr Hipkins raised, and that is around Royal assent . I think it is a very, very valid point. For me, personally, it is one of the reasons why New Zealand should never become a republic. I think it is one of the strongest reasons why New Zealand should never become a republic. Just imagine, with this piece of legislation and the start date that is required—let us imagine that it was not in the best interests of the country. Let us just imagine that for a moment. With a start date such as this, where it requires Royal assent to begin, then the Governor-General can actually refuse to sign it. Until the Governor-General signs it on behalf of Queen Elizabeth—a very fine woman, whom I personally admire—it does not become the law of the land.

[Continuation line: Therefore, if this was not a bill]

TRACEY MARTIN

Therefore, if this was not a bill that was in the best interests of the country—and New Zealand First is, obviously, supporting it. We believe it is a bill—that one little clause around the start date, around Royal assent, actually saves the country. It is the last backstop to bad decisions by this House. I am not sure that that is where Mr Hipkins wanted to go with his contribution, but from a New Zealand First perspective or from my perspective specifically this particular clause is incredibly important. That piece around Royal assent keeps us safe. One of the things we must never get rid of with regard to start dates and pieces of legislation is that Royal assent. That is our last protection for bad legislation. The Governor-General can decide to sign any legislation. People might decide to do away with the Governor-General but until he signs it, it cannot be put into place. I agree with Mr Hipkins that that is a very, very important clause. More members of the Government should stand and take calls on that particular clause because I believe that they obviously would support it. They would support the start date being on Monday possibly, or Tuesday if the Governor-General has appointments.

Kris Faafoi: We could still be sitting on Monday.

TRACEY MARTIN: Oh well, there you go. You see, it may not get out of the House by then. But the moment it gets to the Governor-General he will make a decision as to whether it is in the best interests of this country. We all know what a fine man the Governor-General is. All of us trust the Governor-General and his judgment. Therefore, that clause, again, is a very, very important clause inside this piece of legislation. Kia ora.

[Continuation line: Mr Chair: I will give a member the call]

Clause 2 Commencement

Speech - The CHAIRPERSON (Hon Chester Borrows)

The CHAIRPERSON (Hon Chester Borrows): I will give a member the call. I would just like to make the point that we have well traversed Royal assent, even in various European countries, by the Governor-General as well as the Queen and the King of Belgium. So I look forward to the next speaker cutting a fresh track on this very narrow clause.

Clause 2 Commencement

Speech - The CHAIRPERSON (Hon Chester Borrows)

Hon DAVID CUNLIFFE (Labour—New Lynn): There is a strong precedent in this House not to bring the Chair into the debate. I am going to depart from that on this occasion only and very gently to note that you are a member, in another capacity, of the esteemed Regulations Review Committee, on which, in fact, we serve together. The Chair will have almost, I am sure, uppermost in his mind at this time that the Regulations Review Committee has a tradition of objecting to legislation where the date of Royal assent or the date on which a bill comes into force is not specified in the primary legislation. That is seen as very, very poor drafting practice. What normally happens, as you know, is that the Regulations Review Committee will write to the substantive subject select committee—in this case, it would be the Commerce Committee—asking them to invite the Minister to reconsider whether in fact there should be a fixed date put into the equivalent clause, the commencement clause. That is where we run into problems with this bill. I guess it is yet another little proof of why we should not be here on a Friday night trying to ram a bill like this through all stages, because there is no substantive select committee that the Regulations Review Committee can write to to object about the fact that it does not have a proper commencement clause in it. This is an open-ended commencement clause. It is poor drafting practice. It would be pulled up by the Regulations Review Committee and the Commerce Committee would have to deal with it. The Commerce Committee would probably then write to the Minister. There would be an amendment made in the usual way, and there would usually be either a fixed date for commencement or a deadline for commencement. That is particularly odious and improper when it comes to a tax bill. This is a tax bill. This raises taxes. Apart from the fact it is breaking an election promise, it is a serious matter. There should be no taxation without representation. Representation includes the full select committee process. So here is a tax bill being rammed through Parliament without a select committee process and with an improper commencement clause. The Regulations Review Committee would take this very, very seriously. It would write to the subject select committee, the Commerce Committee, and it would ask for an amendment or consideration of an amendment on that point. It is not too late for the Minister, given that the Minister has seen fit not to send this to a substantive committee, to respond to that point and to assure the Committee in some way as to the timing of commencement. It may be that the Government may see fit even in time that it is still able to, by Supplementary Order Paper, amend this commencement clause to give at the very least a back-end assurance to the public that there will be some certainty about this. As my colleague Mr Hipkins, Dr Hipkins, has said, there is a very important precedent, which we are not allowed now to refer to, from a small European country where Royal assent was withheld on a matter of almost equal import as this unjustified, unwarranted, and improperly drafted piece of tax law, which we are ramming through the House in the dead of a Friday night. I invite you, Sir, to ask the Minister to take a call and to at least share with the Committee your experiences on the Regulations Review Committee where you know—

The CHAIRPERSON (Hon Chester Borrows): Order! Please be seated. The member knows that it is wrong for him to draw the Chairman into the debate. I certainly will not be jumping when he yanks my chain.

Hon DAVID CUNLIFFE: Thank you for the admonition, Mr Chairman. It must be getting late, but since you put it in those terms, your chain shall be completely unyanked from the Labour Party. But it is not too late for the Government to yank this bill from the House because this bill is improperly drafted. This is an improper commencement clause for a tax bill. We should not be pushing tax bills through in the dead of night. We should not be doing it when the Government said that there was not going to be any more tax laws, no new taxes—well, here we have got one. It was brought in through urgency without a select committee process, flying in the face of established constitutional convention. This is legislation for cowboys, and the Labour Party wants none of it.

[Continuation line: Brett Hudson: I move, That the question be now put.]

Clause 2 Commencement

Speech - BRETT HUDSON (National)

Dr MEGAN WOODS (Labour—Wigram): I am very happy to take a call on this commencement clause. Mr Chairman, with the greatest respect I have listened to your calls to move on beyond the Royal assent, but it has become somewhat of a debating point in this Committee tonight around the circumstances in which the Governor-General, on behalf of the Sovereign, can actually—could they, or when could they—refuse the Royal assent. When such questions come up, being the hard-working parliamentarian that I am, I like to go to the source and consult McGee to see what the circumstances are under which this could occur. I think it is important that we clear up this debating point in this Committee tonight and actually see what the facts are around this. There is no longer explicit statutory recognition of a power to withhold the Royal assent, as there was in a previous law. This was admitted in 1986 as being unnecessary. It was felt that to re-enact—

The CHAIRPERSON (Hon Chester Borrows): Order! Just for clarification for the member, speculation as to the inclination of the Sovereign or the Governor-General is not relevant to the detail of this clause. I previously warned all members that we have pretty much covered this ground. So I ask the member to explore new territory, take us to new depths, in this clause.

Dr MEGAN WOODS: Just speaking to the point of order, Mr Chair.

The CHAIRPERSON (Hon Chester Borrows): Not challenging it in any way?

Dr MEGAN WOODS: No, I am seeking your clarification, Mr Chair, and asking for some guidance from you in that there has been a debating point established around whether or not—I am not questioning the reputation of the Sovereign—they could do that. I am just asking your guidance how it is that a member can address what has become a debating point in this debate.

The CHAIRPERSON (Hon Chester Borrows): Well, fortunately for me as Chair I am the sole judge of the scope of this debate and I have judged that we have traversed that. I believe that it has reached the full extent of the scope in relation to the Royal assent in this matter. We are looking for new territory. If the member has not got any new territory to explore, there are plenty of other people seeking the call—Mr Faafoi, for one.

Dr MEGAN WOODS: Thank you, Mr Chairman. I appreciate your guidance in this matter. It is always useful to have your wisdom shared with us. We always appreciate it greatly. In terms of the commencement date on which this bill receives the Royal assent and when it comes in to date, my colleague Chris Hipkins has already talked about when that might be.

[Continuation line: I think there are some serious matters]

Dr MEGAN WOODS

I think there are some serious matters that remain unresolved around when it is and how it is that we treat taxation law in regards to the Royal assent , because it goes back to some of the material that was covered. There is a clear intersection here between clauses 1 and 2, around what it is that this bill is called. This is called a development levy bill, but in reality this is a taxation bill, and as my colleague the Hon David Cunliffe has pointed out in his previous contribution, actually, there are some very serious questions that we need to ask around taxation law and how that may be treated. Mr Cunliffe raised a very serious point about the Regulations Review Committee and how this would be treated if it were going through a regular select committee process, and how it is that this might have to be treated differently. I think it is important that when we are using this mechanism of urgency that we are not circumventing what are some very important conventions in this House, and that is that people in this country need to have the peace of mind that they do not have a Government or a Parliament, indeed, that will pass legislation that unfairly taxes, that there are important checks on that and one of those is that—

Clare Curran: Shouldn’t be doing it under urgency.

Dr MEGAN WOODS: —we should not be doing it under urgency and if we are, we should at least be putting some of the normal procedures around it. I do not know whether or not the Sovereign would give this piece of legislation Royal assent has been ruled out. So that is not something we would assent that we would ever consider talking about again, but I am sure other members of our team here in Labour will have very serious questions that they will need to raise around this very important clause 2 of this legislation, being the commencement clause. We should always ask the serious questions of any bill that we as legislators are asked to pass. We should never just think of ourselves as rubber-stampers. We should examine legislation clause by clause, and we should always be asking questions, especially when we are not going through the proper processes that we would expect of a select committee in this House. So there are important questions to be answered and I invite the Minister to take a call and to address some of these very, very important questions that members have put to him because this is what we deserve as a Parliament.

[Continuation line: Kris Faafoi]

Clause 2 Commencement

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): Thank you very much for the opportunity to speak to clause 2. As your predecessor in the Chair had mentioned, it is a very narrow clause. I do not intend to go into some of the issues in terms of the Royal assent , but I do want to take this opportunity to talk about the commencement. We do not know when this bill will come into force. It may be Monday; it may be Tuesday. But when it does come into effect it will set in train a chain of events to allow the Government to negotiate with other telecommunications companies , to allow the tax that is going to be collected under this piece of legislation to become collected, but also to allow, because we know that this bill will become an Act, the second stage of the Rural Broadband Initiative to get under way. Although we on this side of the Committee have noted some concerns about that, I did want to use that in terms of that chain of events that starts when this bill becomes law to take issue with something that New Zealand First member Richard Prosser said earlier on. That is that he suggested that members on this side of the Committee, or from this party, more or less, were using issues or constituents who were coming to us into our electorate offices by dangling them out there to use as examples of people we did not really care about. I would say to Mr Prosser that that could not be further from the truth. There are a number of electorate MPs on this side of the Committee who have had a number of constituents come to them and ask them why their rural broadband is so rubbish. One example of that is someone in my electorate. Like Chris Hipkins I have got a mixed electorate. I have got the rural areas of Pukerua Bay and some rural areas in Pāuatahanui .

Brett Hudson: Pukerua Bay is not rural.

KRIS FAAFOI: Well, there is a farm there. Do you want to come and have a look at it? It has got livestock and everything—come and have a look. One person who lives in those rural areas came to me and said: “Look, my internet connection is not what I want it to be, because of where I am located.” He was in a rural area. So I looked at that case. I took it to Vodafone and said: “Look, this chap lives here.” [Interruption] I am just about to get to my point, Mr Chair.

The CHAIRPERSON (Hon Trevor Mallard): Well, the member better because if he does not, his call will be terminated.

KRIS FAAFOI: The outcome of that conversation was: “You’re going to have to wait for the second phase of the Rural Broadband Initiative.” He was not going to be in phase one. It is absolutely crucial for him to now get his broadband up to a speed that he wants. Is the commencement of this piece of legislation—I will give him that. We want Rural Broadband Initiative 2 to start rolling out, and this piece of legislation will commence probably on Monday, or it might be Tuesday if we are still here. There are a lot of people who I guess are waiting for this piece of legislation to go through, but our point of issue with it commencing on that date is that we do not think we have had a justification or a good analysis of the first piece of legislation, which saw Rural Broadband Initiative 1 come in. So before this piece of legislation comes into force, or commences, we do not want this piece of legislation to go through without the right scrutiny of the first tranche of Rural Broadband Initiative 1. Do not commence this bill to spend $150 million without looking at the first piece of legislation, which came in to bring in Rural Broadband Initiative 1, which is worth $300 million. We are not sure whether it has been effective, so we do not think this piece of legislation should go through, which is why we are not supporting it. Why? This piece of legislation is to expend $150 million. We on this side of the Committee think that is a log of money. The Government does not seem to care about the accountability of expending $150 million. We would like a closer look at how effective that first $300 million has been before we go anywhere near letting this piece of legislation go. To Mr Prosser I would say please do not take the examples we have used in this debate as something you can simply throw away. They are people whom we have cared for. It is our duty as electorate MPs to make sure that the Rural Broadband Initiative is as best as it can be. When this commences, hopefully that person—

The CHAIRPERSON (Hon Trevor Mallard): I am not going to take it now but I am going to issue a warning and it—

Dr Russel Norman: Oh, come on, Trevor!

The CHAIRPERSON (Hon Trevor Mallard): Who was that? Can I remind the member of what happened to Mr Mark earlier in the day, for interjecting in a similar circumstance. Mr Mark had a short holiday from the Chamber. So I now give the Committee a general warning about interjecting when the Chairman—yes. Mr Williams will be required to stay if that is the case. The point that I am going to make to Mr Faafoi is that this is a bill about collecting money and not spending it, so any further arguments about when the money is spent will not be tolerated.

[Continuation line: Kris Faafoi]

Clause 2 Commencement

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): I am not quite sure of how much time I have got left to take. The commencement date—I might have another 5 minutes; I am not sure. I am sure the bell will tell me. We do not believe that this piece of legislation should continue, and I take your point that this piece of legislation is about the collection of a levy or a tax, as we have argued on this side of the Committee. We do, though, think that it should have gone through the proper process before it did start collecting this tax.

Jacqui Dean: I raise a point of order, Mr Chairperson. I am just seeking your assistance. I did rise and request a closure motion, which I do not know that you addressed, but you then called on a member to make a speech; you had not actually asked for the call.

The CHAIRPERSON (Hon Trevor Mallard): Well, actually he had, and he asked at the same time as the member asked for the closure. He called at that point and that is the right time to call. Actually, going to another member is probably a pretty clear indication of my decision on the closure motion. If the member wants me to sort of underline it, I had declined it.

[Continuation line: Thank you very much, Mr Chair, for that clarification]

KRIS FAAFOI: Thank you very much, Mr Chair, for that clarification of your ruling. I do not want to unnecessarily take up the time of the Committee, but there is, from what the Minister said in one of her Committee stage contributions, a fair bit of negotiation that has to happen from the commencement date up until about June 2016, when I understand that the rural broadband initiative, phase 2, does come into force. I think, from a couple of the press releases we have seen, that there is a fair bit of negotiation that needs to be done between the telecommunications companies and the Government before this piece of legislation can actually become effective and those taxes can start being collected. We have heard a submission via press release from the Telecommunications Forum , and from the commencement of this piece of legislation until—

The CHAIRPERSON (Hon Trevor Mallard): OK; I have now decided the member has struggled for long enough.

PV on clause 2—Ayes 89 Noes 32]

[continuation line, Clause 3, Curran]

Clause 3 Principal Act

Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): Clause 3, “Principal Act” states: “This Act amends the Telecommunications Act 2001 (the principal Act.)” This amendment is an amendment to an amendment of the 2001 Telecommunications Act that was passed in 2001. The 2011 amendment, which was around the changes to the telecommunications development levy, where the imposition of a levy was made on telecommunications—[Interruption] I am very happy for you to take a call, Mr Williamson. That would be quite useful. I am sure it would further the debate. The levy was imposed on telecommunications providers who received a minimum of $10 million gross revenue annually, and that levy was established to contribute to the cost. The matters, which I think have been canvassed well tonight, were around non-urban telecommunications infrastructure. So this is infrastructure in rural New Zealand. I do not think that anyone has argued about that and has a differing view around the purpose of what the telecommunications development levy was for—that we need more infrastructure for rural broadband. We think that is a good thing, but the matter at hand is about this amendment bill tonight, which is going through all its stages under urgency; where it came from—which is what this clause is about; the principal Act—and whether it does what it actually is intended to do, and it is about the way in which it is being done. That is the issue that the Labour Party has with this piece of legislation before the Committee. I am hoping that the other parties in the Chamber tonight have had enough of the debate canvassed for them to be clear about the strength of the views that have been espoused by the Labour Party around why it is so important that when an amendment is going through that actually imposes a new levy, a tax, which the departmental report has been very clear about—this is a tax—it is a significant matter that should not just be allowed to pass without due process. There are so many other things sitting behind this, around the rural broadband initiative version one, as to whether or not it has actually been successful, and here we are voting on an amendment to provide more money for version two. There is a lack of evidence, a lack of process, and a lack of accountability from the Government, which has expended that money, that $300 million, in the past 5 years for a programme that it is now planning to refund. In the meantime, there are many other ways that the lack of rural broadband is being dealt with throughout New Zealand, which, again, members have talked about tonight. Communities are actually trying to do it for themselves, and are doing it in conjunction with rural, local providers and doing it more successfully—and bypassing the scheme that has been funded by the Government because it is just not working. Here we are about to commit another $150 million in the same vein, with no scrutiny, no evidential base, and with even the regulatory impact statement telling us that there is no achievement of the policy directives relating to it, because they have not been evaluated. So it seems to me that it would be irresponsible, and even negligent, to actually approve this bill.

[continuation line. Hon David Cunliffe]

Clause 3 Principal Act

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

Hon DAVID CUNLIFFE (Labour—New Lynn): The clause that we are currently debating is clause 3, which directs the Committee to the principal Act, being the Telecommunications Act 2001. I think it is important for the Committee to bear in mind the history of the development of that Act—in terms of the shaking of the Chairman’s head, which means that one might want to stay somewhat closer to the detail of the Act. Therefore, this is not the occasion on which to go into the Fletcher inquiry and the review that followed the legislative process, which was a full process that included a very wide set of consultations, as I recall, with the community. It later led to amendments to the Act around 2005 and 2006, which followed a 6-month review, called, if I remember rightly, the Stocktake Review, where every single company was brought in and the nature of the issues confronting the industry were surfaced, and a set of quite far-reaching amendments were brought into play, which broke up the incumbent telecommunications monopoly, which unbundled the local loop, which set in place, I think, a pretty proactive regulatory framework that brought completion to bear in the industry while at the same time protecting consumer rights and property rights.

The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now to remind him—[Interruption]—that the Committee has accepted the principle of the change. Who said that? The member will stand, withdraw, and apologise.

Jacqui Dean: I withdraw and apologise. I raise a point of order, Mr Chairperson. I am just seeking your clarification. For what am I withdrawing and apologising?

The CHAIRPERSON (Hon Trevor Mallard): You are withdrawing and apologising for yelling out while I was on my feet. You were the member who pleaded guilty, I think, to making the noise. Is that right?

Jacqui Dean: Is the Chair asking me a question?

The CHAIRPERSON (Hon Trevor Mallard): I will apologise to the member if I have got it wrong, but I thought the member was the member and that she did indicate that she had. That is why the member withdrew and apologised.

[continuation line. Dean: Yes, I did, Mr Chair. It is just that I was pointing out]

Jacqui Dean: Yes, I did—it is just that I was pointing out to the member that it is the normal procedure of this Committee that when the Chair is on his feet, members sit down, and I was merely reminding the member of that fact. I was trying to be helpful. If I am guilty of anything, I—

The CHAIRPERSON (Hon Trevor Mallard): The member will now resume her seat—[Interruption]—and I will remind her that when anyone from the Chair is on their feet, the member should sit down. But it is the role of the Chair to enforce that and not any other member. Although I might need some coaching, the member is welcome to do that at some stage outside of the Chamber. Right, Mr Cunliffe—going back to the point that I was making, this is a very narrow bill. It is the most substantive clause in the bill but it is a very narrow bill and it does not go back to either the origins of the Act or to the 2005 reforms. I think one might be able to go to the amount we are talking about and that shape of it.

Hon DAVID CUNLIFFE: Thank you for the clarification, Mr Chairman. I guess the point that I was trying to come to, albeit a little slowly, is that the process that this amendment here is following is so different from the process that the principal Act went through on several occasions. Here we are going through the process of urgency, without the benefit of a select committee, and I know that that will be something that you, Mr Chairman, will be taking into account in allowing for a full debate of these albeit quite specific clauses. The reason that that is at issue is that a number of members have made the point that there has been no evaluation of the existing $300 million programme that is enshrined in legislation including its sunset clause. Mr Chairman, you may not have been privy to the statement from the Telecommunications Carriers Forum , which drew attention to the fact that this new tax was overriding provisions made in law around the sunsetting of the previous obligations. That is a serious matter, one which members of, certainly, this party if not this side, would wish to see thoroughly investigated by a select committee, which had the benefit of public submissions from the industry as well as consumer groups. I think I have made the point that I need to make, in summary, that this is amending a very substantive piece of legislation. It has fiscal consequences. I think it is now generally accepted by the House that this is a new tax, this is a breach of an undertaking that the Government did give to the people of New Zealand that there would be no new taxes. I think it is quite widely accepted around the House now that it is certainly being stated so on multiple occasions by not only individual companies but now by the industry group concerned, the Telecommunications Carriers Forum, and as such we are in the situation where we are amending, through urgency, a very important piece of tax law. Mr Faafoi was earlier going to draw the attention of the House—a matter that is close to Mr Bennett’s heart—that the generic tax policy process has been thwarted on this occasion. As members opposite well know, when a piece of legislation—which either by amendment to a principal Act, as in this case, or if it is a new Act that has revenue consequences—goes through, there is an established convention through the generic tax policy process that the accounting profession and the legal profession be consulted to ensure that there are no unintended fish-hooks in the design of the legislation, that there is a sharing process, normally over a period of about 6 to 9 months, where feedback is sought and consultation occurs. In that way there are no surprises. The industry implementation issues are thrashed through. None of that—none of that—is occurring in this case. I am sure that Mr Bennett will want to rise to his feet and express his condemnation of the Minister for this outrageous breach of standard tax process, one that has kept the country safe over many years. Recalling very briefly the impact from the previous clause around the commencement issues, there is no—

Clause 3 Principal Act

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

The CHAIRPERSON (Hon Trevor Mallard): No, this is the most substantive clause in this bill, and it has not been to a select committee. We are quite a long way off.

Clause 3 Principal Act

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

JAMES SHAW (Green): At this point I just want to speak to our Supplementary Order Papers.

Clause 3 Principal Act

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

The CHAIRPERSON (Hon Trevor Mallard): We will wait until we get on to the Supplementary Order Papers. That is a separate debate because you are proposing separate clauses.

[PV Clause 3: Ayes 89; Noes 32]

Clause 3 agreed to.

[continuation line: Chairperson Mallard: We have two amendments on the table: one from Gareth Hughes…]

New clause 3A

Speech - The CHAIRPERSON (Hon Trevor Mallard)

The CHAIRPERSON (Hon Trevor Mallard): We have two amendments on the Table: one from Gareth Hughes and one from James Shaw. Although not the same, they are quite closely related, and I propose to the Committee that we debate the two Supplementary Order Papers, Nos. 82 and 83, together but vote on them separately. Any objection to that process?

New clause 3A

Speech - The CHAIRPERSON (Hon Trevor Mallard)

JAMES SHAW (Green): I just wanted to speak briefly to these Supplementary Order Papers. We did speak earlier on in the debate about the Supplementary Order Papers that we will be introducing. If you would just allow me to read from the Supplementary Order Papers—the first one, which is in the name of Gareth Hughes, adds a new section 3A , which is to amend section 90, “Crown use of telecommunications development levy”. It would come in after section 90(3) and inserts subsection (4): “The Minister must ensure that any use of the telecommunications development levy for purposes specified in subsection (1)(b) or (d) promotes—(a) competition in non-urban telecommunications markets; and (b) the diversity of non-urban communities intended to be served by the levy; and (c) the range of different technological options that may best serve particular non-urban communities; and (d) the rapid pace of technological development.” The second Supplementary Order Paper, which is in my name, would amend section 90 as well and inserts “(4) The Minister must ensure that any use of the telecommunications development levy for the purposes under section (1)(b) or (d) does not fund any person to meet their existing contractual requirements with the Crown.” I would just like to speak very briefly to these Supplementary Order Papers. Earlier on in the debate I tried to discern what the different objections were, and the Labour Party have raised a number of extremely pertinent questions about the bill. One of those is to do with the evaluation and the reporting about the effectiveness of the existing Rural Broadband Initiative.

[Continuation line: That is essentially the intention behind Gareth Hughes’ Supplementary Order Paper]

JAMES SHAW

That is essentially the intention behind Gareth Hughes’ Supplementary Order Paper 83, which is to ensure that new technologies that are emerging are taken into account of, and the pace of that change, to ensure that there is competition and a diversity of players in the market place, and that the needs of the local environment and the local communities are taken into account, and some of those variances between places so that you do not have a one size fits all. Earlier on in the debate Mr Cunliffe used the example of Mount Cook, saying that you are not necessarily going to lay a massive ultra-fast broadband pipe to Mount Cook because there are not enough people there, but there are a range of technologies that we might consider. People have used balloons as an example or the use of mobile telephony and so on. The intention behind this Supplementary Order Paper is to ensure that these funds raised are used wisely, essentially, and that they encourage a market-oriented approach, as opposed to favouring just a few big companies.

[Continuation line: The intention behind the second Supplementary Order Paper]

JAMES SHAW

The intention behind the second Supplementary Order Paper in my name, inserting new section 90(4), where is says “The Minister must ensure that any use of the telecommunications development levy … does not fund any person to meet their existing contractual requirements with the Crown.” is to deal with a question raised about how Spark and Vodafone , particularly, when they were awarded earlier contracts with the 700 megahertz spectrum got a lower price because they made a commitment to install black spot towers in return for a better price. We wanted to ensure that the funds raised through this extension of the levy were not used to fund existing contractual requirements—essentially, to say that those companies would not have two bites of the same cherry. So that is the intention behind those Supplementary Order Papers and I shall rest here.

[Continuation line: Curran]

New clause 3A

Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): I would like to speak in support of the two Green Supplementary Order Papers. I suppose I would make the comment that this is the discussion that we would be having in the select committee if we were able to have a select committee hearing. In fact, I would argue that the whole Committee stage of the House tonight has been like a select committee hearing, but it has been fairly one-sided because the ability to actually have a proper debate with all of the parties has not occurred, which is one of our main problems with this. We are also not able, through this process, to hear from submitters representing consumers from different communities throughout rural New Zealand. The only ability we have had to do that is through a select committee process, through some petitioners from specific rural communities just outside of Dunedin who had very strong views. With regard to the two Supplementary Order Papers before the Committee, I would argue that they hit some of the nails on the head in respect of the concerns around the problems that lie with the existing Rural Broadband Initiative. The problem that I have, and that the Labour Party has, is that we are not able to judge the value of the existing Rural Broadband Initiative in these terms. It is only an amendment to the Telecommunications (Development Levy) Amendment Bill that goes forward for the next tranche of the Rural Broadband Initiative, so therefore there is no ability for there to be an in-depth discussion about these matters, such as diversity for non-urban communities. Competition is one of the most important things here, I would contend, and I just draw your attention to page 7 of the regulatory impact statement, point No. 17, that says it is anticipated that much of the future telecommunications development levy funding earmarked for Rural Broadband Initiative extensions could be allocated to the larger telecommunications development levy players if they secure contracts to supply infrastructure for the Rural Broadband Initiative extensions. Well, right there is a significant issue. The whole purpose of the Rural Broadband Initiative, or one of the purposes, was for it to be open access—for the infrastructure to be built, but for there to be the ability for other players to come in and for there to be a competitive environment. We do not think that that has occurred, or if it has, it has occurred only in a very limited way. But we are not absolutely sure because there has not been a proper evaluation done. So here we have a regulatory impact statement telling us that the next tranche may be dominated by big players. If that is the case, then is that the best expenditure of the money? The competition aspect of Supplementary Order Paper 83 is quite critical, ensuring that the different technological options that may best serve particular non-urban communities are available. With regard to that, I am not quite sure what specifically that is referring to but I am hoping that it is referring to the fact that 5 megabits, which was offered in the initial Rural Broadband Initiative, is patently not sufficient, particularly in the era of Netflix, where rural New Zealand is basically unable to access the new technologies, the new content offers, that are coming into our country. It is urban New Zealand that is going to be able access those, benefit from those, and enjoy those things. Rural New Zealand is just not going to have the capacity. These are really critical issues, and they are critical issues that should have been teased out in a select committee process, with the full ability for submitters to come before us. That is not going to happen. Instead, the shadowy entity that the Rural Broadband Initiative is, is going to be allowed to continue on unchecked and with no accountability. We implacably oppose that.

[Continuation line: MARK]

New clause 3A

Speech - RON MARK (NZ First)

RON MARK (NZ First): I came down especially from my office just to take a call and particularly around these Supplementary Order Papers, because of the fact that New Zealand First is hopeful. As a Wairarapa-based MP I am very hopeful that this legislation, which New Zealand First is supporting led by our MP Tracey Martin, will actually deal to those black spots. But we have had some concern over the years, looking at the way in which the roll-out of the Rural Broadband Initiative has been delivered. As the Mayor of Carterton, in my time there it was somewhat frustrating, after all of the good news about the rural broadband roll-out and where it was going, to find that in places you would expect there be good coverage, astonishingly, there is not. I point to a little place in the Wairarapa called Greytown. It is a little place where you drive up State highway 2 through Featherston into Greytown and the first thing you note when you come into Greytown in the weekend is the number of Wellingtonians there. You consistently hear in the hotels, the bars, the shops, and at the festivals and the fairs—Interruption]—how frustrated they get by their inability to use their cellphones to ring back to David Seymour—or anyone else in Parliament, or anyone else in Wellington, or anyone else in doing business. I would just hope that with passing—

The CHAIRPERSON (Hon Trevor Mallard): Order! It is not at all hard to relate what the member is saying to the Supplementary Order Papers, but the member does have to do it to remain relevant.

RON MARK: Thank you for your guidance, Mr Chairman. This particular Supplementary Order Paper 83 put forward by Gareth Hughes I take confidence in. Competition in non-urban telecommunications markets—that is us. Diversity of non-urban communities intended to be served by the levy—we would hope, given the number of small telecommunications companies in rural provincial New Zealand, small telecommunications companies that have a lot of experience in how to tackle the difficulties of getting good communications through rural New Zealand, that this Supplementary Order Paper would give them the opportunity to be involved to allow them to compete so they could apply their extensive experience. I can name probably half a dozen small telecommunications companies that are operating in the Wairarapa, but they seem to be shut out. There seems to be something in the process that forever and for always puts the delivery of the service, the provision of the service, and the roll-out of the broadband in the hands of a very small bloc, namely Chorus . I would hope that this if nothing else, even if the Government does not approve this, and I have got a strong sense that it is not going to vote for these Supplementary Order Papers, that it would still get the message, because it is heartland rural New Zealand that actually is suffering right now. It is very frustrating for people there. Go to talk to WIZwireless. Go to talk to some of the Māori telecommunications companies providers—Tuarōpaki Communications up in the Central Plateau. Tuarōpaki Communications has invested very heavily in communications. In fact, it is a strong shareholder in 2degrees, but where did its roots start? Its roots started very small, in a small telecommunications company. The question is whether it, would its derivatives, would the company that it is now a shareholder in—I think it is now working with Think Tank, I am trying to find the name of the company, it was with Timaru-based Bay City Communications—would these small telecommunications companies get an opportunity to get a shot without this clause? I would hope that we would support this clause. I would hope that this clause would allow greater competition opportunity for the small telecommunications companies, which are experienced in rural New Zealand and delivering the services out to place like Akitio, out to Flat Point, out to Tora.

[Continuation line: Those are the areas that are suffering dearly]

RON MARK

Those are the areas that are suffering dearly. The notion that we are suffering in Greytown is absolutely astonishing, and I would argue that so far the dependence on the major telecommunications companies to deliver this service has done Greytown poorly—very poorly. That in itself is a very strong argument for the Government considering making sure that these other rural telecommunications companies that do have the experience, that are out there, that do the work—very often for half the price and are a lot more productive because they are grateful for the business—that do this service very well because they want more business would get a better shot. And we believe that this Supplementary Order Paper would give them that opportunity and give an absolute assurance that they would be invited and asked to give it a shot. I am grateful that our caucus is supporting this Supplementary Order Paper and grateful to Gareth Hughes for putting it forward, because for far too long these small rural telecommunications companies have been ignored. For far too long the productivity they offer has been let slide by.

[continuation line: Tracey Martin]

New clause 3A

Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader---NZ First): Kia ora, Mr Chair. Thank you very much. I will just pick up where my colleague Ron Mark left off with regard to these Supplementary Order Papers to the Telecommunications (Development Levy) Amendment Bill, Supplementary Order Papers 82 and 83. Specifically, it is around Supplementary Order Paper 83, which Gareth Hughes has brought, around making sure that there is competition in the non-urban telecommunications market and diversity in the non-urban communities. I would like to specifically request that the Māori Party and the ACT Party cast their votes—the ACT Party because it is a believer in competition, because that is what its party stands for, an open market. This is something that I cannot imagine the ACT Party would not support, making sure that all members of the telecommunications community have an opportunity to vie for these Government dollars so that they can compete in a real market. I would also seek and am hoping that the Māori Party might also support this because, again, this is about rural communities and rural workforces and rural companies and small to medium sized enterprises. This is what these clauses are about. I have received an email in the last few minutes with regard to these Supplementary Order Papers from Taylor Communications, which is the largest fixed wireless rural broadband provider in the Hawke’s Bay. It wishes “to confirm that the charges of the TDL will not result in extra costs being passed on to consumers. The telecommunications development levy has been built in to our existing pricing and will continue to be done.” This is one of these companies. They pay the levy. They already pay the levy, these small telecommunications companies. But unless this Supplementary Order Paper goes through there is no guarantee that they will be allowed to play with the big boys. The email continues: “It is well known that the previous $300 million has not been well spent, but with the new funding that is planned for the next few years, it will bring real results, bringing real broadband to rural New Zealand if it is distributed by our regional players. The New Zealand Wireless Providers Association is a collective of rural broadband providers that are applying for TDL funding. With no Government funding in the past, they have achieved over 50,000 rural subscribers, providing download speeds in excess of 5 megabytes per second.” This Supplementary Order Paper supports those providers. I implore the Māori Party and the ACT Party to assist today and to stand by their principles of real competition, supporting Māori, and supporting rural communities. Vote for this Supplementary Order Paper to place this in the legislation. I am sure they have the opportunity and the time to walk over and let the whip of the Government members know that that is the way they are voting, thereby meeting the obligations of their agreement. Therefore, I implore again the Māori Party and the ACT Party to stand up for what they believe in and vote for this Supplementary Order Paper.

[continuation line: David Seymour]

New clause 3A

Speech - DAVID SEYMOUR (Leader—ACT)

DAVID SEYMOUR (Leader—ACT): I take great pleasure in responding to the previous speech by Tracey Martin and, in particular, to Supplementary Order Paper 83 to the Telecommunications (Development Levy) Amendment Bill, one of the two Supplementary Order Papers currently on the Table, and new clause 3A, inserting section 90(4)(a) into the principal Act. The assertion is that people of a certain philosophical persuasion should be in favour of supporting that particular paragraph because competition in a particular location is always a good thing. There is some quite interesting economic theory behind this particular topic, relating back to the Nobel Peace Prize winner who sadly died only a couple of years ago, Ronald Coase. Ronald Coase won his Nobel Peace Prize primarily for his work on the nature of the firm. The story of Coase will take us directly to the matter at hand in section 90(4)(a). Is competition the only value that believers in free enterprise and economic efficiency should pursue? Or is economy of scale also a particularly important virtue that we should want? Coase’s story was that he started as a socialist. He might well have found his place on the far left of New Zealand First, but, unlike those members, he was a thinking man, a very inquisitive man who knew to ask the right questions. What he did was he travelled from his home in England to, at that time, the centre of industry in Chicago, and he asked the people at General Motors: “Why is it that in a capitalist economy you practise an island of socialism, a firm where you have a dictatorship over a group of resources? Why do you do that when competition works so well? Why do you believe in so much economy of scale? Why might you, 80 years hence, be opposed to section 90(4)(a) being inserted in this bill?”. And the answer—

Chris Bishop: He definitely asked that.

DAVID SEYMOUR: He may well have asked that question had he been able to anticipate such a silly speech from Tracey Martin, but despite being a great man and a Nobel Peace Prize winner, Ronald Coase was not able to anticipate Tracey Martin. Few of us would have been able to. The answer that Ronald Coase got from asking the right question, which eventually earned him a Nobel Peace Prize, was that firms should expand. The nature of the firm is that firms should expand up until the point where the marginal transaction outside the firm has greater transaction costs than the marginal transaction within the firm. This is something that is very, very difficult to determine by statute. It is something that must be discovered in the market place, and that is why the ACT Party is a believer in free markets but opposed to section 90(4)(a) in this Supplementary Order Paper. Interestingly, in the course of this inquiry—I hope New Zealand First members are learning something—Ronald Coase discovered transaction costs. Transactions costs are one of the most important things to understand when it comes to being a true believer in free markets and economic efficiency. I do not think we will see that level of sophistication or understanding in some seats across the House, but since I was asked, that is why I am opposed to this Supplementary Order Paper. I do not believe that it will increase economic efficiency or the welfare of New Zealanders in respect to telecommunications. Thank you.

[PV on SOP 82 in the name of James Shaw to insert new clause 3A—Ayes 58, Noes 63]

[PV on SOP 83 in the name of Gareth Hughes to insert new clause 3A—Ayes 58, Noes, 63]

[continuation line: clause 4 James Shaw]

Clause 4 Schedule 3B amended

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): Earlier in the debate I tried to summarise the various arguments that I had been hearing and some of the concerns and questions that had been raised about the bill. Some of them are pertinent to Schedule 3B, which discusses the amounts that are being raised, saying in 2016/17 it will be $50 million, the same in 2017/18, and again in 2018/19. I would just like to acknowledge the Minister Amy Adams for having taken the call and responded to a number of the questions that I had itemised. I think that she had given responses to four of the nine questions, but there are still five to be answered and, in fact, there have been a couple of other questions that have been raised since. The questions in relation to the amounts are really to do with the value for money of the previous programme and whether we should be seeking to raise this $50 million a year, as specified in clause 4 here, when we are unsure about the $300 million that has been spent on the programme so far. The questions that I put earlier—and I would appreciate hearing from the Minister or someone on the Government benches—were about whether there has been good use of the money. Firstly, there have been a number of complaints about the quality of the connections that people have received as part of the existing programme, and the sense that, actually, for all of that money, the quality of the connections is not all that good. Secondly, I asked about the evaluating and reporting on the effectiveness of the broadband initiative. There is sort of a sense that, actually, some really good programme evaluation has not yet occurred and that that money may be kind of good money after bad. We have not yet heard, I believe, from the Minister or from the Government about those concerns. I would like to get a response from the Government on that in relation to these amounts here in this clause. Thank you.

[PV on clause 4—Ayes, 63, Noes 58]

Bill reported without amendment.

[Continuation line: Telecommunications (Development Levy) Amendment Bill 3R

Clause 4 Schedule 3B amended

Third Reading

Hon AMY ADAMS (Minister for Communications): I move, That the Telecommunications (Development Levy) Amendment Bill be now read a third time. As I have heard in this debate, fast and reliable connectivity is critical to New Zealand’s economic growth. Like running water or electricity, connectivity has become a fundamental must-have service for homes and businesses. The Telecommunications (Development Levy) Amendment Bill—we should have given it a catchier name—highlights the Government’s commitment to extending enhanced connectivity to regional New Zealand. It will help us to deliver faster, more reliable connectivity to the regions. I would have thought that it is hard to argue against better connectivity for our rural and remote communities, but there have been a number of MPs across the other side of the House—Labour MPs—who I believe are putting politics ahead of people. I cannot wait to be out on the stump in 2017 reminding rural New Zealand that Labour campaigned against them getting better broadband. It is the only party in the House opposing this bill, and I find its members’ position astonishing. They are showing tonight they would rather side with the telecommunications company executives and their profits than support the extension of broadband to communities that need it. No wonder they cannot win in regional New Zealand. No wonder they are so out of touch. No wonder they are bottoming out in the polls. They cannot even bring themselves to support better broadband for regional growth for rural and provincial New Zealanders who desperately need it.

[Continuation line: It annoys Labour members so much]

Hon AMY ADAMS

It annoys Labour members so much to see a Government programme that is succeeding, they will cut off their nose to spite their face. And, of course, they cannot filibuster if they are voting in favour, which is what we know they are really all about. There has been some confusion from the benches opposite, so let me set out some things very clearly. Opposition members who are opposing extension of the Rural Broadband Initiative are opposing basic principles of ensuring our most rural areas have the same opportunities that faster broadband offers our cities. We do not support that. Opposing this extension is refusing rural New Zealanders the same connectivity that other parts of New Zealand enjoy. Labour will tell us, and have been telling us through this debate, that uptake of the Rural Broadband Initiative is low, but it is cherry-picking the numbers and it knows it. We know that 8,500 people have signed up under the fixed wireless broadband programme, but that is only 20 percent of Rural Broadband Initiative 1 spend. Furthermore, Labour is completely ignoring that one of the core benefits of that part of the spend is enhancing cellphone connectivity. The cellphone connectivity benefits of those Rural Broadband Initiative towers mean that nearly 2 million New Zealanders every quarter get benefit from it. The other 80 percent of the programme is fixed-line copper broadband. As of 31 March more than 85,000 households are able to connect and almost 68,000 households have. That is an uptake rate of 80 percent. That does not even begin to cover the service provision to rural hospitals, rural health centres, and rural schools. This is the programme Labour is trying to tell you is not working and is failing. If that is the definition of failure, Labour has not got a clue. We have also heard that this is some sort of new tax. Well, I can tell you it is not a tax and it sure the heck is not new.

[Continuation line: Taxes, for those who do not know, are a broad-based application]

Hon AMY ADAMS

Taxes, for those who do not know, are a broad-based application. Levies are targeted and used for specific targeted purposes. The telecommunications development levy has been in force since 2011 and replaced the telecommunications service obligations, which had been in force even longer and was higher, and of course we announced these changes in August. In this case, it is a levy charged against some of the large telecommunications companies and is used to fund open-access infrastructure in areas in which it would otherwise not be commercially viable for it to be built. Someone has to pay for it, and I do not believe it is fair that taxpayers should foot the bill for the infrastructure that the telecommunications companies use to provide their commercial services. The levy is user-pays and that is exactly how it should be. The Government’s rural broadband programme reflects our commitment to rural communities. We are working with our private sector partners to provide services and coverage that would otherwise not be feasible. By 2016, 90 percent of New Zealanders in areas not covered by ultra-fast broadband will have access to rural broadband under Rural Broadband Initiative phase one. The $150 million raised from this levy extension will be put specifically towards extending the Rural Broadband Initiative so that almost all Kiwis benefit from better connectivity under the National Government. That is $100 million for expanding fast, reliable broadband to the regions, and a further $50 million to expand mobile network coverage in black spots. The Rural Broadband Initiative is making an immense difference to the way that rural firms do business, the way that our kids learn in rural remote schools, and the way that health services are delivered to their patients. There does, however, remain a high level of unmet demand in rural areas that are not scheduled to receive upgrades under the original Rural Broadband Initiative. This is due to increased numbers of customers, high download demand constrained by existing cabinet technology and back-haul limitation. This bill is about letting us get on with making funding available for communities to improve their connectivity, with a $100 million contestable fund to extend broadband in our regions. The criteria for the fund will focus on enhancing connectivity across all areas outside the ultra-fast broadband footprint and is open-minded about the range of technologies that will be used. This bill means better connectivity for more people. Mobile phone coverage is an essential form of connectivity and can be even more important in rural and remote New Zealand, where it has benefits for public safety, as well as the potential to grow productivity in our regions. Collectively, the Spark, Vodafone, and 2degrees networks currently claim to provide mobile access to approximately 97 percent of New Zealand premises. However, those existing mobile networks achieve less than 50 percent geographic coverage of New Zealand. There remain many rural and remote areas of New Zealand that would benefit from extended coverage such as sections of State highways and remote tourist areas. The benefits of expanded mobile coverage include, of course, improved communications for businesses and residents who live and work in those areas; improved public safety, particularly on our State highways; and making our tourism destinations more attractive, particularly in some of those smaller communities. As a result, this Government is establishing a $50 million contestable fund with the aim of providing mobile emergency calling and voice and contemporary data service coverage. The fund will enable companies and communities to nominate their black spots in key tourist areas and work together to make a case for funding. Let me also confirm that none of the money from this contestable fund will enable any company to satisfy its existing obligations to provide coverage. Rural connectivity is absolutely critical, and everyone agrees on that in this House, except for Labour. Everyone in this House agrees on that except for Labour. Can I thank New Zealand First, the Greens , the Māori Party, United Future, and ACT for their constructive approach in recognising that, actually, we do need to get on, at pace, with rolling out broadband to our rural communities. Someone has to pay, and it is appropriate that it should fall on the telecommunications companies. I thank those parties for recognising that this tax has been in place for a long time. It is a matter of cents in each bill, and if any telecommunications companies argue that it needs to put its prices up as a result, then its consumers should look long and hard at those claims because I do not believe that they stack up. This is a Government that is fulfilling its promises to regional New Zealand, this is a Government that knows that connectivity is the core plank for regional economic growth, and this is the Government that is delivering it. I am proud to commend it to the House.

[Continuation line: Clare Curran]

Telecommunications (Development Levy) Amendment Bill

Speech - CLARE CURRAN (Labour—Dunedin South)

CLARE CURRAN (Labour—Dunedin South): Well, Labour believes that there should be an inquiry into the Rural Broadband Initiative, and if there is anything that has come out of the debate tonight, then it is that this Government does not listen and that that Minister, Amy Adams, does not listen. This Minister pushes things through and ignores concerns. She has denied that this is a tax. It is clearly obvious that this is a tax on consumers, and it is going to be imposed on consumers. She has refused to answer questions about the evidential basis behind the rural broadband scheme and whether it has actually delivered. She has refused point-blank to provide any evidence to the House or in this debate, and her ministry has not provided any information on this. The debate that the Opposition parties have had tonight begins the debate that should have been held in a select committee. This should have been a first reading speech.

[Continuation line: If this had been a first reading]CLARE CURRAN

If this had been a first reading speech, then the Labour Party would have supported it in its first reading. The Labour Party would have supported it in its first reading. It is a bill that is being taken through all its stages under urgency, with no opportunity for submitters to come before a select committee, or for the members of a select committee to ask for evidence from all parts of the rural community. We have heard tonight from some of the industry players. We have heard from a major telecommunications company , we have heard from an industry association that represents the telecommunications industry, and we have heard from the organisation that represents the smaller wireless internet service providers, which are the ones that are coming up and the ones that are building a strong community-based connectivity, which is not part of the Rural Broadband Initiative , throughout New Zealand. Those are the organisations that should be being supported and nurtured, but the Rural Broadband Initiative does not do that. The Rural Broadband Initiative has had no scrutiny and the next part of the Rural Broadband Initiative will have no scrutiny either, which is why we cannot support it. If there is to be an inquiry, then we need to take a principled view on this, and that is what we have done tonight. Labour has taken a consistent, principled view on these issues consistently as we went into the election. We went into the election with policy that raised concerns about the Rural Broadband Initiative. We said that there had been ongoing concerns, over a number of years, that it was not delivering broadband to the tens of thousands of rural New Zealanders. We said that the existing scheme was inadequate for the needs of many of our rural communities, and although it was providing internet access via cellphone towers and it was an improvement over dial-up—and there is no doubt about that—it is far short of the quality and speed provided to urban New Zealanders through the USB and existing connections. This is not the step change that the Government promised. The standard of rural broadband services has been woefully less than the step change that was promised. We have taken a principled position on this and we hold to that position. This issue is actually not about telecommunications companies. It is not even about the instrument of the telecommunications development levy as a levy—that is not what this debate is about. It is about what this Government is doing without scrutiny, behind the cover of urgency. It is pushing legislation through that is actually spending $150 million of new money, which is going to be paid for by the industry but passed on to consumers—and I do not think that anyone could argue about that tonight—and the debate is about whether or not that is the right to do. We have missed a stage in the process, and it is a critical stage.

[Continuation line: We are the legislators]

CLARE CURRAN

We are the legislators. We are the legislators who are making the decisions on these issues and we have got to be accountable in respect of them. So if you do not take a principled position on it and you are allowing a piece of legislation to go through under urgency through all its stages that commits $150 million with no scrutiny, then the Labour Party thinks that is irresponsible. In good conscience we cannot vote for it because it has not gone through the right process. The Minister has not addressed the important questions that have been raised tonight. She has glossed over the issues. She has refused to answer questions around where the accountability lies on the Rural Broadband Initiative and where the economic analysis sits for the next tranche of this programme. There are real New Zealand businesses that are investing heavily themselves without Government or industry-funded money through a levy. They are investing heavily in their local communities. They are based in places like Gore, Ōwaka, Timaru, Ashburton, Culverden, Seddon, Richmond, Masterton, Napier, Palmerston North, Inglewood, Hamilton, Tauranga, Waiheke, and Whāngarei. The email that my colleague from New Zealand First Tracey Martin read out earlier, that organisation, which contacted us, is the organisation that is only recently formed and represents those wireless internet service providers that are the quintessential essence of what innovation in rural New Zealand looks like. But they are struggling because they are doing it themselves and this Government has allowed a programme to be developed under Rural Broadband, which, firstly, has not delivered for consumers, but, secondly, has provided the money to mainly big providers, which have entrenched their status in rural New Zealand and have blocked many of those smaller companies coming through. We have no guarantees by passing this legislation tonight that those smaller companies are going to get a look in and are going to be able to thrive. That is the story. That is what we should be promoting here tonight—the progress of a piece of legislation that is going to nurture those sorts of businesses and allow communities to develop connection capability that actually suits their region and is not part of a one-size-fits-all structure, which is what this Minister is proposing and what the previous Rural Broadband Initiative has not done and not delivered on. Labour cannot support this bill tonight because we have taken a principled position. We are absolutely committed to rural connectivity. We are the party that took comprehensive policy into the last election. We are the party that works alongside rural New Zealand, rural communities. We are the party that knows how to do this well rather than the once over lightly from the Minister and what she is proposing to this House. We do not support this bill.

[Continuation line: Melissa Lee]

Telecommunications (Development Levy) Amendment Bill

Speech - MELISSA LEE (National)

MELISSA LEE (National): I could actually start off in many ways in this third reading of the Telecommunications (Development Levy) Amendment Bill, but I will actually start by borrowing a line from a movie that I saw many, many moons ago: you, Miss Clare Curran, had me at “inquiry”. I mean you had me gobsmacked with the word “inquiry”. This is how Labour does everything: “Let’s do an inquiry.” With the modern-day techno speeds that we actually get in this world, she wants an inquiry that will take months and possibly years and millions of dollars potentially. She wants an inquiry while people in the rural sector are complaining to her, as she commented, and she wants an inquiry. This is so typical of Labour. This is how ineffective it is and this is how wrong it is about this issue. It is the only party in this Parliament that is opposing this bill. We live—

Todd Barclay: Shame!

MELISSA LEE: Yes, that is right, shame. Todd Barclay, you know about the rural sector. You actually live there. You know how desperately we actually need this. We live in a world where things are instant and accessible and we can even access our telephones with a thumbprint nowadays. We cannot wait for an inquiry. This is the reason why we are here. This is a good bill and we need to pass it tonight. I commend the bill.

[Continuation line: Hon David Cunliffe]

Telecommunications (Development Levy) Amendment Bill

Speech - Hon DAVID CUNLIFFE (Labour—New Lynn)

Hon DAVID CUNLIFFE (Labour—New Lynn): It is so disappointing to see a Government so out of ideas, so vacant, so desperate to hit the panic button that it has New Zealand’s Parliament in urgency after Budget night, which, from its point of view, is simply a bill to roll over an existing tax. The Government cannot have it both ways. Either it is a nothing, in which case it should not be taking Parliament’s time, abrogating the select committee process, and ramming it through under urgency, or it actually is an issue, it actually is a problem, because it needs to be thoroughly debated. The Government cannot have it both ways. The Minister, “Out of Breath” Amy, was back here and saying it was the oldest trick in the book. She said that Labour opposes broadband. We do not oppose broadband. Our whole history has been leadership in the telecommunications sector, without which this Government would have very little to play with. It does not have to lecture us about our commitment to rural broadband; we are absolutely secure in our commitment to broadband roll-out. Straw-man arguments never work. They never work because, in fact, we know why we are opposing this bill. I am going to take you through the objectives of good policy, I am going to take you through the issues that arise with this bill, and, finally, why we cannot support it on the grounds of process. The objectives are quite simple: better connections for faster, cheaper broadband everywhere in New Zealand—ubiquitous coverage. We want to see users with strong capability and the confidence to use the gear wherever they are in New Zealand. We want to close down the digital divides. And, thirdly, we want a vibrant content competition wherever people are in New Zealand. That means enough bandwidth so that terrestrial, aerial, and online can compete to deliver the best deal to consumers. We are firmly on the side of getting broadband into the regions. The issue is not whether but how. That is where the Government’s arguments run into fundamental trouble. Earlier we quoted from an extensive OECD study that showed the really wide range of issues that arise with rural broadband roll-out. It is necessary to evaluate the $300 million worth of investment that has already been made. It is necessary for a range of reasons: the technology is shifting; the frontiers between backwall fibre, between copper extension, between mobile satellite or innovative disruptive technologies like Project Loon from Google—all of those things are changing and we need to assess the best way to deploy the public’s money. The second issue is that this is a tax. The industry has made clear it is a tax. The Telecommunications Carriers Forum has made clear it is a tax. It is a tax and, therefore, it is a broken promise. It is a tax and, therefore, it should not be done under urgency without a generic tax policy process or proper select committee consideration. The Government in its attempt at a defence said “No, no, it is just a roll-over of an existing programme.” No, it is not. It is not because the existing law legislates for the sunsetting of the current telecommunications development levy. It legislates the sunset. That is why the Government has managed to enrage pretty much the whole industry with this seemingly simple piece of law, because they have had to disclose their profitability based on some certainty of contracts on the existing law. They certainly did not expect the Government to undermine that by pushing legislation through under urgency. This is a change, it overturns preceding law, it overturns preceding contract, and it is somewhat strange to see members opposite with some tortured delving through the archaeology of Coase theorem, finding some justification for standing on their liberal head and saying that they are in favour of Parliament expropriating private property rights without so much as a by-your-leave or the “The Maestro” of the Northland by-election giving a decent explanation.

[continuation line: Chris Bishop back to strategy school.]

Hon DAVID CUNLIFFE

Chris Bishop—back to strategy school. The other problem with this is that without evaluating the rural broadband programme that has currently been in, there could be very, very few technology areas as dynamic as broadband roll-out over long distance. We have got 3G, we have got 4G, and we have got 5G coming, which looks like it will deliver more broadband speed than you can get through a close-deployed copper wire. It is certainly going to be very disruptive to the industry. Any prudent Government would want to look very carefully at that technology frontier before putting a new obligation on the industry that is designed for the old world, not the new—designed for the old world, not the new. The bottom line is we can have a whole lot of arguments about the technology, about the construction of the tax, about how good or bad the previous deployment has been, but the fact that those issues are out there should be proof enough for the fact that we needed a select committee process. The industry said that it wanted to have a say. It offered to co-design this with the Government, but it got a salute instead. The public wants to have their say. The public wants to say no taxation without representation. We do not think ramming this stuff through under urgency is a fair representation. Then, of course, we have got technical problems around the fact that the commencement date is not specified and that we are overriding law that has been painstakingly developed through multiple public processes by the stroke of a pen. So, in summary, there are both very important substantive technology and policy problems, and there are significant process issues as well. This is not simply an extension of an existing agreed industry position. This is a new tax. This is a broken promise. This is desperate government. It is desperate government because it does nothing to lift productivity, it does nothing to create jobs, it does nothing to deliver a better future for New Zealanders—it is just a tax. Ask the people in New Zealand’s regions whether they think National has a plan for them. Chris Bishop, did you ask Northlanders? Well, I think you did, and I think you got the answer, which was that Simon Bridges’ bridges convinced nobody. They convinced nobody that National had a plan for the region, because 5 years of being ignored and then 5 weeks of random pork barrels is not going to convince anybody.

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Hon DAVID CUNLIFFE: So here we are, and you are rightly bringing me back to the point that this bill should be about regional New Zealand. Give regional New Zealand a say, have a select committee process, and call for submissions. Although we strongly support rural broadband, we do not support abrogating the parliamentary process in this way. We cannot support this bill.

[Continuation line: VOTING CORRECTION – Sage]

Telecommunications (Development Levy) Amendment Bill

Speech - EUGENIE SAGE (Green)

EUGENIE SAGE (Green): I seek leave to correct the record of the House for the voting during the Committee stage. It should have been 13 votes for the Green Party, and not 14.

Telecommunications (Development Levy) Amendment Bill

Speech - EUGENIE SAGE (Green)

The ASSISTANT SPEAKER (Lindsay Tisch): This is for the Committee stage—

Eugenie Sage: Since dinner—since the dinner adjournment.

The ASSISTANT SPEAKER (Lindsay Tisch): For all Committee stages since dinner?

Eugenie Sage: Yes.

The ASSISTANT SPEAKER (Lindsay Tisch): And the first reading?

Eugenie Sage: No, just since the dinner adjournment.

The ASSISTANT SPEAKER (Lindsay Tisch): I will just check with the Clerk. Leave is sought for the Green Party to change its vote from—

Eugenie Sage: From 14 to 13.

The ASSISTANT SPEAKER (Lindsay Tisch): —14 votes to 13 votes in every vote cast since dinner. Leave is sought for that purpose. Is there any objection? There is none. The record will be changed accordingly.

[Continuation line: HUDSON]

Telecommunications (Development Levy) Amendment Bill

Speech - BRETT HUDSON (National)

BRETT HUDSON (National): The telecommunications development levy, when we continue it with this bill, will provide the funding to provide support to the rural communities of New Zealand because this Government works for all New Zealanders. I commend this bill to the House.

[Continuation line: SHAW]

Telecommunications (Development Levy) Amendment Bill

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): What is in a name? That which we call a rose would, by any other name, smell as sweet. Is it a levy? Is it a tax? Actually, who cares? Has Bill English broken his no new taxes promise? Well, he put up GST, he put up the petrol tax, he has introduced an airport levy, he is introducing a capital gains tax, he has cut the paper boy rebate, and he has put a tax on private jets—it does not actually matter whether he says he was not going to introduce any more taxes. He has extended and introduced new taxes left, right, and centre—in fact, literally left, right, and centre if you think about the political spectrum. It just does not matter. The relevant question is: what do we do about paying for the continuation of the Rural Broadband Initiative and for these blackspots? Earlier on in the debate I was trying to work out what the different objections were and what the questions were about. I just want to acknowledge again the Minister for having taken a call and responded to some of those questions. I just want to reflect back on some of those. The first question was in relation to the press release from Spark about passing on prices. The Minister said that it cannot be justified as that would be double-charging consumers because it is already contained in the price. The Telecommunications Forum has a different view. It said that actually the industry has been absorbing those costs, rather than passing them on, and so it would be new for the industry to pass them on. It is kind of unclear which of those views is correct. It becomes quite difficult, and I can fully appreciate why the Labour Party would like to have a proper select committee process so that we can get to the bottom of that. The second question was about the quality of the connection and whether the money that had been spent so far—the $300 million that has been spent so far—was a good use of the money and whether it was producing the results. I am afraid that we did not get a good answer on that question. Nor did we get a good answer—or, in fact, any answer—about the issue of evaluation and reporting on the effectiveness of the existing Rural Broadband Initiative. Tracey Martin raised the question of why it is up to the Greens and New Zealand First to do the Government’s job for it. There are a bunch of questions here and a Government bill about the quality of the spend. Where was the Government’s response? We are not getting a response to a number of these questions. There was a related question that was about new technologies. Mr Cunliffe spoke very eloquently about that, and, again, I do not feel that that was addressed. We did have a question about whether companies would get two bites of the cherry. We received an unequivocal answer from the Minister on that that they would not, and I am very pleased to hear it. That was the point of one of our Supplementary Order Papers, and so we feel that that has been answered, and I appreciate that from the Minister. We also asked why it needs to be under urgency. Again, the Minister responded directly to that, saying that we cannot start negotiating, and there is such urgency to roll out the whole programme that we cannot wait for a full legislative process to go through this. I empathise with the Government’s sense of urgency. As I said in my first or second reading speech, having travelled around the country over the last 10 weeks, in the rural areas in particular the digital divide is exacerbating an existing social, educational, and economic divide. We have real urgency to get this out there, which is why the Green Party is inclined to support this bill, even though we would normally not support urgency bills because of the lack of scrutiny that goes with passing legislation under urgency. We asked a related question that was around why we are doing this now and seeking funding while the policy design is being consulted upon. Again, I think that relates to the sense of urgency, so we were satisfied with that answer from the Minister. The question about competition—and this was another Labour Party concern that I do not feel was sufficiently addressed—was whether small companies and a broader range of companies be able to participate in the programme, or whether it is just going to be the established players.

[Continuation line: And so that one is still ]

JAMES SHAW

And so that one is still kind of up in the air. The ninth question was around what the Minister’s response was to the two Supplementary Order Papers put forward, but I feel that that was answered, as well. So, some questions were answered; some were not. We are left, actually, with some discomfort about voting for this bill because there were a number of the key issues, we feel, the Government did not actually try to bother and answer. We also had the question of whether it is constitutional—so it has been quite a surreal night. Who would have thought that a telecommunications funding bill would have involved the regent of Belgium and other constitutional arrangements? And there was the question of the Royal assent , which took up close to an hour and was sort of a fascinating piece that we got into on this bill. It has been quite a strange legislative process tonight. Strange enough, as I have said, because I felt like New Zealand First and the Green Party were kind of doing the Government’s work for it, because we were not getting answers to those, in fact, entirely valid questions that the Labour Party was raising. We will be voting for this bill, but we are disappointed that some of those questions have not been answered, including some of the really substantive questions about the quality of the spend of the money so far, and the possibility that we would be throwing good money after bad here. I did want to gently remind the Labour Party, which stood on principle tonight on the matter of urgency and said that it could not support such a weak legislative process, that only a couple of months ago they supported the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill through the urgency process. Also, not only without any of the normal legislative processes, but a piece of legislation containing algebra that no one in the House could actually comprehend. At least we have some idea of what this bill will actually result in, which is the raising of $50 million a year for the next 3 years. That is, actually, a pretty simple proposition. That is easy enough to argue about, but the MPs’ remuneration bill contained a formula that, literally, no one knew what they were passing as they were passing it. It has been a fascinating evening. We will be supporting this piece of legislation because we do believe that the programme needs to continue, with a great deal of urgency, but we do have some discomfort and will be looking to the Government to answer those questions that it did not bother to answer tonight. Thank you.

[Continuation line: Tracey Martin]

Telecommunications (Development Levy) Amendment Bill

Speech - TRACEY MARTIN (NZ First)

TRACEY MARTIN (NZ First): Can I just allay the fears of the Green Party member, James Shaw , and say that New Zealand First member Darroch Ball is a member of Mensa , and he actually understood the algebra that was in that bill—so New Zealand First was well-informed when it voted, thank you very much. New Zealand First is supporting this bill because New Zealand First believes it should be supported. We would agree with Labour on some areas. We would agree with the Labour Party that it would be a good idea for the Commerce Commission to do an inquiry or a review around the $300 million spend. I disagree with Melissa Lee , when she made the wide-waving hands and so on, that you have to stop everything to do a review. I remind Ms Lee of the digital literacy inquiry, which actually looked at the work of Network for Learning . It was done by the Education and Science Committee under the chairmanship of Nikki Kaye , and that inquiry changed the direction of the Network for Learning as it was still going. As it was still being developed it identified that it was going in the wrong direction, and shifted direction so that it was a much better provider. We also would agree with the Labour Party around the need for local small to medium sized enterprises to be part of this roll-out, to be able to participate in the provision of the rural broadband initiative. It interests me that on the 19th—so we are sitting here on 21 May, and on 19 May the Warkworth Area Business Association put out this email across to all its members. The title of this email is “ultra-fast broadband improvements”. It talks about the fact that on 12 March—much has been made that the industry did not know it was coming, much has been made that the industry did not have an opportunity to be consulted, and, again, I say: lobbyists for industries always have the numbers of Ministers . I find it hard to believe that industry did not call the Minister’s office and have a conversation about this. The email goes on to say that on 12 March the Government announced that this funding was coming. I think what is pertinent to the bill that we are talking about—and the conversation that has been said about whether there has been consultation, whether there has been review, whether there is going to be participation by the public, is the other area that has been addressed—this email reads that the ultra-fast broadband phase two funding is intended for rural towns. “In order to make an informed decision about how to allocate funding, central government has invited local authorities, including Auckland Council, to submit a registration of interest. This is an opportunity to communicate to central government any issue with broadband and the level of demand for better services in rural Auckland. We would like your help to make sure that we get as much accurate information to Government as possible.” And the questions they ask are: a description of where you live, i.e. the boundary of your community; what your current internet service is like; what problems you have with your broadband connection; the extent of the problems; and what demand for broadband services are like in your community. They ask members to please provide other information, and it is around business information and any other information that you want to provide, to send to the register of interest for the funding for the broadband roll-out. That is the Warkworth Area Business Association. That is a local group taking control, and talking and sending information directly to Government around how this, what we are talking about tonight—how what will be funded is delivered. We take the Minister’s word that why this is needed to go through under urgency is because without the levy—which has been there since 2011—without it being secured in legislation until 2020, there is no way the Minister can then start a process of deciding how and where it will be spent. This is a process matter at the moment. We agree that sometimes process needs to be short-circuited. In this instance, this is a continuation of a levy that has been in place for several years, that was fully consulted on, that the telecommunications companies knew was coming, and it is to continue to deliver what we know is needed. However, we do support many of the areas that the Labour Party has said, we just do not support their call to try and stop this bill tonight. We would support a call where—we have a member on the Commerce Committee. We would support a call from that committee to do a review or an inquiry, and actually have a go at making sure that up to this point we are in the right direction. How could we possibly, while the Minister is consulting the communities—let us have a look at this, and let us make some bright decisions. Let us not change just for change’s sake, but let us actually look at where we might be able to improve. Kia ora.

[Continuation line: Kanwaljit Singh Bakshi]

Telecommunications (Development Levy) Amendment Bill

Speech - KANWALJIT SINGH BAKSHI (National)

KANWALJIT SINGH BAKSHI (National): We have made very good progress tonight on this bill. It provides excellent infrastructure for New Zealanders, and I commend this bill to the House.

[Continuation line: Tisch: split call; David Clark]

Telecommunications (Development Levy) Amendment Bill

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Dr David Clark, 5 minutes.

Telecommunications (Development Levy) Amendment Bill

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

Dr DAVID CLARK (Labour—Dunedin North): I rise to speak for the last time on this bill, about a bill of broken promises. We will be opposing this bill. As many of my colleagues have outlined, there are many problems with it. We must say, first and foremost, it would have been much smarter for the Government to expose this to public scrutiny. The fact that they have imposed a tax on New Zealanders this evening that will be borne by businesses and households without allowing the public to have its say is shameful. There is no need for this rush, absolutely no need whatsoever. This obviation of the normal processes is a travesty. Of course we heard the Minister , Amy Adams , say in her opening speech that “the industry will not need to put their prices up or explain to their customers why their bill is changing” , and within the hour we had one of the major telecommunications companies saying that it would be putting up its prices as a consequence. And, of course, we know the reason why this is. It is because in that industry, planning is years ahead. They plan years ahead for infrastructure developments, and so, of course—of course—they have taken into account the fact that the levy was supposed to run out. Of course they have taken that into account in their planning. And so they had built-in what charges they thought necessary. And now they get slapped with another charge, which was unexpected, a tax on them that they can, and must, pass through to their customers.

[Continuation line: They are going to make their bills transparent]

Dr DAVID CLARK

They are going to make their bills transparent so that we see when we use their services the extra dollar per month that that will be costing as a result of this change for each and every business or person connected to this service. That might not sound much to some people but to many business people struggling in the regions that extra dollar does matter—it does matter. It is a marginal cost but it is a cost. Every marginal cost matters. It does become prohibitive for some people. It is on top of many other costs that this Government has put on top of small business. They have put up red tape left, right, and centre. They seem to have no heart for small business. We have heard of plenty of additional taxes, the paperboy tax in the last set of Budgets, we have had the additional child support—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Dr DAVID CLARK: —expectations and so on. But coming back to this bill here, we have got in the departmental disclosure statement a clear “yes” to is this in the nature of a tax. Yet we have the Deputy Prime Minister dancing on the head of a pin. It is a shame he cannot land an aircraft on the head of a pin like the last Labour Government did nine times in getting to surplus. We have him dancing on the head of a pin when his own department says that yes, this is a tax. It is one of three new taxes after this Government said it would introduce no new ones before the last election. InternetNZ, of course, called for a review and they said “Why do we not look at it and see if this rural broadband money is being spent effectively?”. There is $300 million being poured into this. It does not seem an unreasonable request but a Government that is out of touch might say “No, we will not have a review. We do not care that only 8,500 people have taken this up by our best estimate. We do not care that it has cost $7,000 a head for this particular initiative to be taken up because we are the Government. We won the election and we do not care any more what the people think.” Well, that is a Government out of touch I am afraid. They are a Government out of ideas. Introducing new taxes seems to see the big idea we are facing today. The reason, of course, we can see that this is being passed under urgency is because they are trying to hide their failure in rural New Zealand. They are embarrassed, at least, for their failures in rural New Zealand. Of course, I have seen in my own electorate the need to go to get a petition. A group has gone to the extent of having a parliamentary petition to get rural broadband. I encourage others who are experiencing the same difficulties around New Zealand to do the same, to approach their local MPs, and to get a petition set up that will be heard by Parliament because this problem is costing hundreds of millions of dollars and the Government is wanting to be unaccountable for spending. This is a Government that does not care about taxpayer funds and that does not care about small business. It is a tragedy. It is a shame. I hope the next speaker, because I know he is sympathetic to the issues of small business, will take on some of these challenges as well. We have seen a Government that is prepared to break its promises on the surplus in the Budget, the biggest promise of all. It was central to the election campaign promise and it has broken it.

[Continuation line: Mr Assistant Speaker: I call David Seymour. Five minutes.]

Telecommunications (Development Levy) Amendment Bill

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

The ASSISTANT SPEAKER (Lindsay Tisch): I call David Seymour—5 minutes.

Telecommunications (Development Levy) Amendment Bill

Speech - The ASSISTANT SPEAKER (Lindsay Tisch)

DAVID SEYMOUR (Leader—ACT): I had enormous hopes for the previous member’s speech. I hoped to see a principled, detailed, economically literate, public policy - based rebuttal of the bill. Sadly—sadly—my hopes were misplaced. I thought in the interests of informing the House I should show the member how somebody might have given such a rebuttal and might have critiqued the bill. The first question to ask about any public policy intervention or revenue-raising initiative is where is the market failure? Why is the game-theory outcome not Pareto optimal? You might look for an answer like that in the regulatory impact statement. It is a sad commentary on the standard of regulatory impact statements in New Zealand, I am afraid to say, that they are not very strong. It seems the problem definition is mostly about why the current policy is not as big as we would like it to be. It even quotes political party websites in the regulatory impact statement. That is not the kind of problem definition and identification of market failure that one would like to see in a regulatory impact statement. One might well argue that there is no public policy basis or intervention logic behind this. The Opposition could have done that but sadly it did not. It might have raised the question of technological change. If I could indulge the House with a small personal anecdote, 15 years ago my flash uncle wired his entire house with Ethernet. We thought that was pretty cool and he thought that was pretty cool. Then something came along called Wi-Fi. Then we did not think he was so cool and neither did he. You might think that is a small personal anecdote, but I recently heard that larger organisations are capable of such mistakes. Indeed, the entire Tasman District Council recently—as recently as 15 years ago, that is—made a regulation that every house in their region should be wired with Ethernet. That lasted for about 3 years and they were swallowed by the same fate. Anybody who wants to fund a rural broadband initiative through any kind of revenue source should be very weary that technological change is happening a lot faster than Government programmes, even legislation as fast as tonight. Hypothetically, if you did agree that there was a case for the public funding of telecommunications infrastructure, you might ask some questions like to whom is the benefit and what is the most appropriate source of revenue to fund that benefit? It seems the principle is that it is current telecommunications users. What we find in the regulatory impact statement is that one of the best rationales you can find is that we need to do this for people who do not have access to telecommunications services. We are charging the people who are using the services on behalf of people who are not using them. That sounds to me like a public-good argument or a redistribution argument. If you adopt the principle that you want to raise revenues in the ways that are least distortionate of behaviours, then you should use low-rate, broad-base taxes such as indirect taxes like GST. None the less, that was not the quality of argument that we heard even from some of the most able members on the other side of the House. I conclude with another thought: even the best public policy relies upon political support to be sustainable. What this bill is really about is ensuring that the body politic of New Zealand is able to keep supporting the public policies under which they live. That is why there is a naked, unashamed, redistributionist element in this bill. Perhaps in another time and another place and another electoral result I might speak out about it a little bit more strongly. But seeing as those who can actually are unable to, apparently for cognitive reasons, I will not either and will be supporting this bill. Thank you.

[Continuation line: Tim Macindoe]

Telecommunications (Development Levy) Amendment Bill

Speech - TIM MACINDOE (National - Hamilton West)

TIM MACINDOE (National - Hamilton West): I support this bill.

[Continuation line: Kris Faafoi]

Telecommunications (Development Levy) Amendment Bill

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): It is a sad indictment on the level of debate in this House from the National Party that that is one of the better contributions to this bill. I commend Mr Macindoe for getting up and at least telling the truth about their position on this bill. He did not say anything to support it because the grounds on which to support this piece of legislation are very thin. It was with ultra-fast speeds that the Minister for Communications was forced to eat her words from her first reading speech. I will, for the benefit of the House, remind the National Party what Amy Adams said in her first reading speech: “The industry will not need to put their prices up or explain to their customers why their bill is changing.” Within the hour, not even 60 minutes had passed from those words leaving the Minister for Communication’s mouth, Spark New Zealand issued a press release making a liar of the communications Minister. That press release says that now the Government has confirmed the levy/tax will continue rather than reduce as originally legislated for, it has put upward pressure on future costs and Spark will have to pass that cost through to its broadband and on-account mobile users.

[Continuation line: Not even an hour had passed.]

KRIS FAAFOI

Not even an hour had passed. We had the Minister who said: “No, New Zealanders, don’t worry, we’ve got this sorted. We’ll get this money from the telecommunications industry.” And then the telecommunications industry said: “Well, actually, Minister, we’re going to get it from Kiwis.” According to this press release from Spark , the average bill of Kiwis using broadband will go up by $1 a month. You can argue: “Hey, that might not be a lot of money.” It certainly is not a lot of money for the people who support the National Party with all their big cheque books , but it certainly is to people on this side of the House. There needs to be some scrutiny around this piece of legislation as to the effectiveness of the expenditure for the first tranche of the Rural Broadband Initiative . Maybe Mr Seymour might like to join the Labour Party and other parties on the Commerce Committee to get an inquiry on the effectiveness of the Rural Broadband Initiative . I think Mr Seymour actually raised a very good point: is what we are doing the most effective use of the money? Is it the right technology? We may not agree with everything that Mr Seymour may want to look at, but he might want to join our initiative to get an inquiry into whether or not we are getting good value for money. I always thought that the ACT Party was the bastions of trying to make sure that every taxpayer dollar was spent well. But, no, no, no, not tonight—not tonight. Three hundred million dollars was spent on the first tranche of the Rural Broadband Initiative. We want to know whether that money has been spent effectively. On that side of the House we heard, during the Committee stage at least, very few speeches. They are lions on their seats but lambs on their feet. They would not get up and take a call to say: “Well, this is good spending of $300 million.” At least David Seymour stood up and said: “Hey, is this money being spent effectively? Are we doing the right thing?” I look forward to Mr Seymour getting to the Commerce Committee—a very good select committee—and helping us get our inquiry over the line. I look forward to you coming to our meeting next Thursday. Four hundred and fifty million dollars is not chump change; it is a lot of money. And $300 million has already been spent on the first tranche. There is concern in rural communities as to whether that expenditure has been effective to deliver what has been promised by this Government, and that is that 86 percent of rural people would get at least 5 megabytes per second. There have been—and I believe that the number is three or four; I think it is three—rural communities come to our Commerce Committee and say: “Well, Parliament, that hasn’t been our experience. We have slower or ineffective broadband speeds in our area, and we were promised this.” We thought it was a really good idea to see whether or not that first $300 million was spent effectively. I thought that the Government might think that too, but, no, we have already heard from the chair of the Commerce Committee that she is not interested in having an inquiry. Maybe we need just that one more vote. Maybe on Thursday morning at 10 o’clock, which is roughly when we have our meetings, Mr Seymour, you might want to turn up and help us out. I am sure that you and your members do not want to see $450 million go down the drain. We actually do want to make sure that the Rural Broadband Initiative is effective. We actually agree with the objectives of the Rural Broadband Initiative. Who would not? Isolated rural communities want to make sure that they are connected, not just for economic benefit; there are educational benefits and health benefits from the Rural Broadband Initiative. If we are going to spend more money, we want to make sure that that money has been spent effectively, and that simply has not been the case. There has also been an argument from that side of the House—not a very strong one—that this will not affect the telecommunications industry. That is not necessarily the case, because the telecommunications industry is not very impressed with this Government. The industry is saying that this piece of legislation has been rushed through urgency. Geoff Thorn —no stranger to us; he used to be the general manager of Parliamentary Service —who is now the chief executive of the Telecommunications Carriers Forum —[Interruption]

Hon Member: Take a call, Bennett.

KRIS FAAFOI: Yes, take a call. Get up. You were here for the Committee stage, but I did not hear one peep out of Mr Bennett—not one. All he can do is interject—all he can do is interject. Well, just shush for a minute, Mr Bennett, and listen to what the telecommunications industry has got to say about your process—slamming this through at 11 o’clock at night. This bill has been introduced under urgency, and doing so avoids any public debate. Well, heaven forbid that we have public debate. Heaven forbid that we actually let the public have their say on this, seeing as they are going to be the ones who are paying for it—a dollar every month. We cannot have the people coming in here. This is a proposal that has not been the subject of any consultation and which has avoided the usual scrutiny, and that would apply to Government spending. They go on. For the benefit of Mr Bennett, this bill extends a tax. That word “tax” is mentioned four times in this press release, I must add, and that tax to date has not been explicitly recovered from consumers. However, the industry cannot continue to absorb ongoing costs of this magnitude. Translation: the telecommunications industry has absorbed these costs and is saying it cannot do that any more. As we saw from Telecom, who is going to be paying now? Its customers—its customers. The Government is furiously trying to spin. Well, do not blame us; blame the telecommunications companies. Well, who is passing this legislation through in the dead of night? It is this Government—it is this Government—and there is no scrutiny. No members of the public can come and ask any questions, and this is the way the Government is doing it. The Rural Broadband Initiative is a great thing, but if we are spending $450 million, we want to make sure we do it properly. Do not just throw the money out there into the wind and hope that everything is all right. If we are going to spend $300 million, we want to make sure it is being done properly, and this piece of legislation allows us to collect $150 million more to roll out the second tranche. I think we should take a big, deep breath and have an inquiry to look at whether the first tranche worked, before you have $150 million more spent. It can be done, otherwise we might be wasting taxpayer money. I know Mr Seymour hates that, so I look forward to seeing him on Thursday morning at the Commerce Committee. It might be your turn to bring the baking.

[Continuation line: Todd Barclay]

Telecommunications (Development Levy) Amendment Bill

Speech - TODD BARCLAY (National—Clutha-Southland)

TODD BARCLAY (National—Clutha-Southland): I can do no better than to echo the sentiments of the senior whip .

[PV on third reading—Ayes 88, Noes 32]

[Continuation line: Kiwisaver Budget Measures Bill—1R: Todd McClay]

KiwiSaver Budget Measures Bill

First Reading

Hon TODD McCLAY (Minister of Revenue): I move, That the KiwiSaver Budget Measures Bill be now read a first time. The bill proposes to remove the $1,000 KiwiSaver kick-start contribution paid to all new enrolees in the KiwiSaver scheme. The KiwiSaver scheme has been a very successful scheme, attracting new enrolees into the scheme. The scheme now boasts over 2.5 million members, but this has come as a cost to the Government and to the taxpayer because for every one of those KiwiSaver accounts, in addition to the funding of the member tax credit, the Government has contributed $1,000 as an inducement to enrol. KiwiSaver was launched over 7 years ago in different circumstances.

[Continuation line: The original objective was to assist individuals who are not]

Hon TODD McCLAY

The original objective was to assist individuals who are not in a position to enjoy standards of living in retirement similar to those pre-retirement. However, the scheme subsidies had not been very well targeted at those individuals, and many have reallocated other savings. Today in our post financial crisis world Kiwis are paying down household debt and successfully saving, with almost $30 billion in KiwiSaver. The incentive payment to join KiwiSaver is no longer necessary. Since KiwiSaver’s launch the Government has paid in over $6 billion to KiwiSaver members’ accounts, much of that through the kick-start incentive. The scheme is an expensive way of promoting savings among the target group. A set of evaluation reports based on evidence progressively drawn together over the first 7 years of KiwiSaver’s life has just been published by the Inland Revenue Department. It indicates that although KiwiSaver has achieved a number of its goals, it is continuing to have a relatively small effect in promoting additional savings and a considerable fraction of subsidies go to those outside the likely target group. A priority for the Government is cutting back on low-value spending and restoring its balance sheet. It is estimated that removing the kick-start will save the Government over $500 million over the next 4 years. That is money that could more usefully be used elsewhere. Other features such as the annual member tax credit and the minimum employer contribution rate of 3 percent will continue. The kick-start is currently paid following a 3-month wait period. The effect of this bill is to ensure that the 3-month wait period may start before 2 p.m. on 20 May 2015 but not after. In other words, if a new enrolee has begun the 3-month wait period just prior to the announcement, they will still be eligible for the incentive payments on or after 21 August 2015 as long as they meet all other relevant criteria. A person who becomes a KiwiSaver member after that date may not be eligible. The Government remains committed to KiwiSaver but needs to ensure that subsidies provide a prudent use of taxpayer funds. The proposed measures in this bill will help achieve that. I now commend this bill to the House.

[continuation line. Dr David Clark]

KiwiSaver Budget Measures Bill

Speech - Dr DAVID CLARK (Labour—Dunedin North)

Dr DAVID CLARK (Labour—Dunedin North): National has hit the panic button in its seventh Budget. It has failed to reach surplus, and it has failed to outline a plan. It is stealing from future generations, through this measure, by taking the $1,000 kick-start programme out of action. This is a Government that is going to ensure Kiwis miss out. It is going to ensure kids miss out. The Government has said that it will increase benefits in this Budget, but it is giving with one hand and taking away with another. It is helping to lift the most vulnerable people—sure—and it should get some credit for that, but it should not have to come at the cost of taking down those who are just a few rungs higher on the ladder. This is a Government that has broken promises before—we know that. We have heard about the GST promise that John Key made—no GST increases. Next thing, it is up to 15 percent. We have heard about the 40 percent economic growth target. He said that we want to grow the economy so that exports are 40 percent of it. Well, they are down to 30 percent now and they are going backwards. We have heard about the promise to increase wages by $7,000 by the end of next year for ordinary workers. Well, we know that that has just been kicked out in this Budget by 3 years, to 2019. We also know—biggest of all—that this Government promised a surplus and it has failed again to deliver. The one that it is projecting for next year is wafer thin. It is less than a rounding error. This is a Government that has produced no surpluses in 7 years, after a Labour Government that produced nine surpluses in 9 years. This is a Government that is failing. This is a Government that has no vision and no plan for the future. The Government has broken its promises to grow jobs, to lift wages, and to not impose any new taxes. Cutting KiwiSaver will reduce savings at the very time when we need to increase them. We need long-term thinking, not short-term thinking. I am sure that Mr Bishop will try to argue that cutting the contributions to those who are starting to save for the first time is somehow a long-term plan. But the people at home will not be convinced of that; I do not believe that they will. They would not have signed up to it in the first place if they thought it was a bad idea. We know that already 2.5 million Kiwis have signed up to Labour’s KiwiSaver programme. The Government cut the member contributions last time round. It halved the employer contributions in the last Budget in 2011, this Government, and we know that it has a plan to cut it back further. It is weighing up the options. How do we cut it further? In Australia they introduced a KiwiSaver - like scheme, shortly after the Labour Government introduced one here, in the 1970s and they have kept that scheme. Australia now has $1.3 trillion in retirement savings. This KiwiSaver scheme is growing. It is a proud scheme, but it is only in its infancy, and the Government wants to cut it again. The Government has cut the superannuation fund contributions, and now it is cutting the KiwiSaver kick-start. It is a Government that is out of ideas, it is scrimping and saving, and it is costing middle-income Kiwis as it tries to prove that it can get to a surplus eventually, and it is failing. It is failing to do even that—even to achieve its own biggest election promise. Half a million Kiwis—that is 500,000 Kiwis—will be deprived of the $1,000 KiwiSaver kick-start payment over the next 4 years. That is a shocking statistic. KiwiSaver is growing in popularity, and the number of people opting out is reducing over time. Many members of the House I am sure will have studied the Inland Revenue Department’s evaluation of KiwiSaver—its final summary report from 2007 to 2014. The department examined KiwiSaver, and its estimate in the 2010 survey was that additional savings, i.e. extra savings on top of what people would ordinarily have saved, were 36 percent. Then in 2013 the department said it had not significantly changed.

Hon Todd McClay: Not true.

Dr DAVID CLARK: It is a fact. The Minister shakes his head. It is his department. He shakes his head. He is out of touch. This is clear—it is not working. I know plenty of people who have signed up for that scheme because of the $1,000 kick-start. In fact, if the Government really believed that it had no effect it would not make this legislation retrospective. There is silence on the other side of the House. The Government would not make this legislation retrospective if it did not believe it worked. The Government has no answer to that. It cannot have it both ways. If the Government really believed it did not work, it would not make the legislation retrospective. It would allow people to sign up for it while the bill was being passed through the House. But Government members know in their heart of hearts that that is not true. That incentive is there, and it does encourage people to save, it does encourage people to join the scheme. This cut is stealing from kids’ pockets. It is robbing the savings of future generations. It is a short-sighted attempt to somehow plug the $1 billion hole in the Budget that has emerged in the last year. This is a Government with $88 billion in debt—let us not forget. The Government pays about $10 million in interest a day—$10 million in interest a day. This is a Government that is failing to manage the economy. It has already halved the member tax credit, in Budget 2011. It is cutting savings further. This is the kind of economic mismanagement that has seen the Government run up more debt than Muldoon did. Those Kiwis who will miss out will be at home, watching this. They will hear that they have missed out, and they will be sorry—certainly the ones who voted for this Government will be sorry. This is not something that was talked about. These kinds of cuts were not talked about in the last election—taking away half a million Kiwis’ access to the $1,000 kick-start grant that comes with the KiwiSaver scheme. This is a country that has struggled with capital debt. We know that is a problem for this country—having enough savings as a pool for investors to call upon to grow new businesses, and that pool of savings is essential if we wish to diversify the economy and if we do not wish to be forever dependent on dairy prices and on commodity price cycles. The dairy industry does what it can, and it contributes to our economy in good measure, but we actually need a number of other industries. We need clean industries. We need growing industries. We need innovative industries. Those industries need to be able to access savings so they can grow. We need an economy that is diversified and is sustainable so that New Zealanders can enjoy in the future the prosperity that they enjoy now. Cutting savings is not a vision. Yet that is the vision that this Government has come up with. It has failed the test it has set itself to achieve surplus and now it is trying to plug the whole by cutting savings.

[continuation line: That will not do. It is retrospective]

Dr DAVID CLARK

That will not do. It is retrospective and it is unfair. Good on those Kiwis who have already accessed it, but think about the ones who have not. I say to those people at home who are watching this late at night—as we pass this legislation under urgency because the Government knows that if it did not pass it retrospectively and quickly there would be outrage—if your colleagues join KiwiSaver on Wednesday and you at home send in the form today, they can join the scheme and get 1,000 bucks but you cannot. That is the change that this Government is bringing in. It is has chopped the member tax credit and it is now chopping the $1,000 kick-start payment. This is a Government that is out of ideas and that is trying to fill a hole. It will claim that it will not have an effect on enrolment rates. If it really believes that it would not make the changes retrospective. There is a Supplementary Order Paper in that suggests that the date be pushed out, and I challenge the Minister of Revenue to consider, if he really believes that it will not have an effect, to adopt that Supplementary Order Paper and to let people have that $1,000 if they want to sign up in the next wee while, but I am pretty sure that he will not. He knows in his heart of hearts that that 36 percent figure from the Inland Revenue Department—the additionality, the additional savings that this scheme has caused—is a number that is real. I will read from the Inland Revenue Department report here where it says: “Using a flow measure of savings, the estimated level of additionality, rather than substituting from other forms of savings, was 36 percent. The main reason that people join the scheme is that it is an easy way to save.”—well, that is not rocket science—“The second reason was the contributions from the Crown and their employer. These are incentives and if they believe in economics they will believe that incentives matter. There is likely to be an interaction between these two reasons with the contributions also making it easy to save more.” Those are the key findings from a report that this Government is ignoring. Instead it is ensuring that half a million Kiwis will be deprived of the $1,000 KiwiSaver kick-start payment over the next 4 years, and this is a disgrace. Labour’s policy is to restart this programme. We would not do such a thing. We would not be so mean to the kids of the future. This retrospective legislation is robbing future savings in a short-sighted attempt to pay for the $1 billion Budget black hole that the Government has dug.

Continuation line: David Bennett]

KiwiSaver Budget Measures Bill

Speech - DAVID BENNETT (National—Hamilton East)

DAVID BENNETT (National—Hamilton East): What a great week. This Budget has consigned the Labour Party to the irrelevancy that it deserves. This is a Budget for all New Zealanders, which shows a Government that is committed to New Zealanders in the most difficult of times. It is the first time in 43 years that core benefit rates have been increased. The National Party delivered for all New Zealanders at the most difficult of times, and this KiwiSaver Budget Measures Bill is part of that Budget. Look at the comparison with Australia’s Budget the week before. Their deficit is $41.4 billion; our deficit s is $684 million. GDP growth in Australia is under 3 percent; in New Zealand it is over 3 percent. As for net migration—for the first time, New Zealanders are coming home and staying home. The unemployment rate is over 6 percent in Australia and under 6 percent here. New Zealand is doing well and it is doing well because we are making good decisions like this bill does, which deliver for all New Zealanders in the right way. Thank you.

Continuation line: David Parker]

KiwiSaver Budget Measures Bill

Speech - CHRIS BISHOP (National)

CHRIS BISHOP (National): Two people in the Labour Party have been very prominent in the debate so far on the Budget legislation—David Parker and David Cunliffe—and we wonder why that is. The Leader of the Opposition gave the worst Budget reply speech this House has seen for many a year and Cunliffe and Parker are doing the numbers and we know on this side of the House that the Labour Party is in disarray tonight because of the good Budget being promoted by this Government. I was meant to be at a Shihad concert tonight in Auckland. Sadly, I am in the Chamber but I do have the call and it is good to see you again, Mr Deputy Speaker. The Labour Party wants to say “Gimme, gimme.” to the $1,000 kick-start for KiwiSaver, but, actually, on this side of the House we think it is a “nice to have”. When 2.5 million have signed up for KiwiSaver already, in today’s economic climate it is a “nice to have” but it is not necessary. I tell you what is necessary. What is necessary is to raise benefits for the first time in 43 years. Was it not interesting during the debate on the Budget when John Key announced that it was a National Government that was raising benefits for the poorest and the most hard up in our society? The silence and the looks on the faces of members on the Opposition benches were priceless, because it is only the National Government that is delivering for those most in need in our society.

Dr David Clark: I raise a point of order, Mr Speaker. I am sorry to interrupt the member. I appreciate that there has been somewhat wide-ranging debate so far, but in my contribution when I talked about those benefits I linked them to the cuts in this bill. Is that what the member is doing or is he really off-topic?

CHRIS BISHOP: Speaking to the point of order, I point out that it has been a very wide-ranging debate and Mr Parker’s speech was far more wide ranging than my speech.

Mr DEPUTY SPEAKER: I do not need any more advice on this. It is robust, it is late at night; some people will think we are clowns for still being here. In actual fact, we are having a bit of fun. It has been wide ranging. The member himself uses wide-ranging interjections to the extent I was considering bringing my own earmuffs. I will monitor this very closely. Mr Bishop should continue but stick to the point.

CHRIS BISHOP: At the risk of never being allowed to speak in the House ever again, all I would like to say in closing is that I commend the KiwiSaver Budget Measures Bill to the House.

[Continuation line: Shaw]

KiwiSaver Budget Measures Bill

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): Tēnā koe, Mr Deputy Speaker. I rise on behalf of the Green Party to speak on the KiwiSaver Budget Measures Bill . We will be opposing this bill. This bill is one of five pieces of legislation introduced under urgency to give effect to particular elements of yesterday’s Budget—and what a Budget! What a Budget! Billed as a hardship Budget it included—let us be gracious here—a $25 a week benefit increase for families with children, which we applaud; a Working for Families increase, which we applaud; and an increase in childcare assistance. After 7 years in Government National has finally realised that it can no longer ignore increasing public alarm at the broadening and deepening of child poverty rates in New Zealand. When I was campaigning in Wellington Central in 20111 and was going to the meet the candidates evenings, I would talk about the 250,000 children living in poverty and I kind of got that sort of blank look that you get when you know that people do not really know what you are talking about. Three years later in 2014 when I was campaigning to the same people in the same halls around Wellington Central, and I was talking about the 275,000 children who were living in poverty, I got absolute recognition and nodding heads. People really knew it was an issue and I will tell you why. It is because for the intervening 3 years that is what we campaigned on. That is what we talked about. We never shut up about it and a huge range of civil society organisations from Barnados, Unicef, Save the Children, and others have made child poverty the political issue that it deserves to be. So, we are going to claim some credit for the Budget—for actually making it a political issue, for getting child poverty up on the agenda to the point that the Government has had to listen. It is great to see this Government adopt this as an issue, even if it is a “weak tea, just might work, maybe” kind of approach. If you want the real thing, then in 2017 I recommend you vote for the Green Party, because we have been championing this cause for years and years and years. National has done what it has done not because it wanted to, but because it had to, because it became such an important issue. So to the bill at hand. What does the bill do? It removes the $1,000 KiwiSaver kick-start contribution, making it effective from the delivery of the Budget yesterday. The Government’s argument for this is to achieve fiscal savings and improve the value for money of the KiwiSaver scheme by lowering the headline cost. OK, that is a fair enough objective. But, as has already been remarked on tonight, this is a wildly successful scheme. About 15,000 people a month sign up for KiwiSaver and they do so in large part because of the incentive scheme that is in place.

[Continuation line: It has slowed down not because the incentive]

JAMES SHAW

It has slowed down not because the incentive is not working but because the rates of adoption are getting to saturation point. More than half of the eligible population is now a member of KiwiSaver, but we also know that the group hardest to get to are the most disadvantaged, right? These are people at the bottom end of the scale, and these are the people who need the incentive more than anything. So although we understand that the Government wants to pay for the extensions to benefits that it described yesterday, it is taking that money out of KiwiSaver and essentially moving it around in the same pot. Let us take a little bit of a closer look at some of the other things that happened in yesterday’s Budget. The jobseeker support and emergency benefit was down 5.7 percent. Supported living payment down 1.2 percent. The sole parent support down 1.5 percent. The accommodation assistance down 0.8 percent. The hardship assistance down 1 percent. And this, one of the most successful schemes that we have to address poverty in this country, is losing the main incentive to get people into the scheme. It is a “Peter and Paul Budget”. We are taking money from one and moving it around, largely, the same group of people. What we are proposing later on in this debate is we are putting a Supplementary Order Paper in, the intention of which is to keep the $1,000 kick-start payment for people who have a community services card. What we are suggesting is that we can meet the Government halfway. We are saying: “OK, we understand that you want to eliminate what you see as a middle-class subsidy. You want to help to cut the costs of what is a pretty expensive scheme. We understand that. But if you really believe that yesterday was a hardship Budget that was designed to reach out to the most vulnerable people, then support our Supplementary Order Paper to retain the $1,000 kick-start for people who are on a community services card.” Why a community services card? Because that is the easiest, simplest way to implement a proxy for people on low incomes. It does catch a wide array of income bands, but we believe that it is the simplest, best way to retain it for the people who need it the most, who actually need that incentive the most. We also know that the overall cost of that to the Government will not be that great because it is adoption at the lowest end that is the hardest to get. We think that if you keep the incentive in place for the people who are at the low end, you are going to continue to keep it for that vulnerable group. And because we know that without the element of compulsion, rates of adoption will be reasonably low, the overall headline costs to the Government will not be nearly as great as they would be if you kept the overall scheme. Our preference, of course, is to retain the overall scheme. In fact, Metiria Turei only a week ago launched a proposal for a kids KiwiSaver scheme, which would also ensure that the most vulnerable children in society had a nest egg of up to $12,000 by the time they got to the age of 18, which they could use for tertiary education or for a house deposit or similar purposes. Given that the Government has the numbers to pass this bill and to remove the $1,000 kick-start from KiwiSaver in its entirety, what we are proposing to do is to limit the harm of that and to support the Government’s notion of the hardship Budget yesterday by retaining the kick-start for people who have a community services card. We believe that that will not be as expensive for the Government. We believe that that will be in line with the Government’s intentions yesterday of producing a Budget that is orientated at the poorest in society, and it keeps in place the principles of what has been a wildly successful scheme. We do hope that the Government supports us on that. Thank you.

[continuation line: Fletcher Tabuteau]

KiwiSaver Budget Measures Bill

Speech - FLETCHER TABUTEAU (NZ First)

FLETCHER TABUTEAU (NZ First): All this Budget did was remind me of the movie Groundhog Day. It was the same old promises and the same old apathetic thinking we have come to expect from this Government. This is the same Budget we have seen for the last 7 years. I believe—I genuinely believe this—that the former National leaders of that party who ran this country in their time are turning in their graves right now. Although those former leaders rose or fell on their principles and what they believed in—what they believed in—this Prime Minister plays the politics of focus groups and plays superficial lip service to what are critical issues in New Zealand. He is doing all he can to appease the masses. He compromises what once was, a very long time ago, actually, a great party. Yet again we were promised a surplus. When the Rt Hon Winston Peters was speaking earlier yesterday, I put it to some of the National backbench MPs that the finance Minister will actually never reach a surplus in his time serving in that role. I made the challenge and what was the answer? Well, it was quite similar to now. I was expecting more of a response. Those National MPs went quiet. They went very silent. The derogatory shouting evaporated. It became a very quiet House to be in. This bill, the KiwiSaver Budget Measures Bill, is technically a simple one, but the repercussions of it are quite significant, and they will have huge consequences in the future. Without doubt, this country will be undermined by yet another short-sighted decision to supposedly save on the bottom line in the moment. We are saving on the bottom line in the moment. What confused a few people yesterday who were listening, and I was one of them, was in Mr English’s speech—[Interruption] I will get to that, Mr Seymour. In Mr English’s speech in the House he spoke of how providing an annual contribution of $521 per year and a kick-start of $1,000 for new members was—and I quote for the members opposite—“These incentives provide a strong reason to join KiwiSaver.” “Yes, fair enough.”, I said, “I couldn’t agree more.”, but then in the very next breath the Minister makes the statement: “Removing the kick-start package will have little or no effect on the number of people expected to join the scheme.” Which statement does the Minister stand by? Which one is true? Because they completely contradict one another. Let me tell you, he should stand by the first one because the second is patently wrong. As a lecturer of economics, I would like to take the opportunity to just point out a few facts that Mr Seymour may have missed when he used the Coase theorem to debate in the House earlier tonight. Coase himself said: “Actually, it wasn’t really my theory at all.” But more apt for this night’s discussion was that he said: “My theory”—like the ACT Party itself—“actually bears no resemblance to reality and cannot be used in reality. It is an economic theory that cannot be used in that way.” But what I would tell my students, more specifically, was that if we undertake an action, we must consider its consequences. What consequences is this party hoping to achieve when it looks to remove the kick-start contribution from the KiwiSaver savings scheme of everyday New Zealanders? What is it that it is hoping to achieve? What it does is rob from the next generation. Why are we robbing from the next generation? What is the justification? As far as I can see, probably the only justifiable reason in their minds is to try and actually reach that mythical surplus that year after year, like Groundhog Day, never changes. Promises are made and promises are broken. The Minister himself actually spoke so eloquently in his speech about spending wisely in order to generate significant long-term savings in the future, and I will quote him: “it is social investment approach”—

[continuation line: Point of order: Megan Woods]

Dr Megan Woods: I raise a point of order, Mr Deputy Speaker. I was reluctant to take this point of order, but I am having trouble hearing the speaker. We are not having contributions in the debate from members opposite, but what we are having is a raucous racket that is only bringing this House into disrepute.

Mr DEPUTY SPEAKER: The point is very well made. The members on my right should tone it down a bit. Carry on.

FLETCHER TABUTEAU: I was quoting from the Minister: “It is social investment approach, which is about targeted, evidence-based investment to secure better long-term results for the most vulnerable New Zealanders. We are willing to pay a bit more up front”—he said—“to get real and sustainable change. In doing so we can generate significant long-term savings for the Crown.” It is pretty infallible logic, but it is not being applied in this case. Why is that logic good in one circumstance but not good in this? For decades, New Zealand First and those with common sense have been talking about the benefits of saving to the individual and to the country. Why? Because, as debated in the House just several weeks back, we were told by this very Government how wonderful the Cullen fund was, for example, and how the asset of this Government was growing and circling that wonderful $30 billion mark. That kind of growth and those kinds of sums—well ahead of projections, actually—are what a small country like this needs to help our people. This provides a financial stability and a confidence as we move forward with proportionately more New Zealanders moving into retirement. That large sum of money is working for the people of New Zealand. The KiwiSaver funds that are invested create so much wealth within New Zealand. The Minister is simply—as said so often tonight—robbing Peter to pay Paul. Well, actually, so he thinks. It is not as simple as that. Although a few balance sheets today may be changed around, what he is doing is robbing from future generations to attain this mythical Budget surplus and he removes a huge, huge driver in the New Zealand economy. The point I make to this House today is that this is a disincentive. It is plain and simple. It was noted earlier that the Prime Minister himself at the inception of this wonderful scheme said there were not enough incentives in the programme and New Zealanders needed more to get involved. New Zealand First argues that the Government is giving away too much. You will argue it costs too much. The Government has said it has spent $2.5 billion on this scheme since its inception, and removing this initial lump sum contribution will save approximately $120 million a year. That is, actually, over only the next 4 years. As the fund actually reaches a critical mass in terms of the people subscribing, contributions will decline fairly rapidly over time. So these minuscule savings are in the now and, actually, do not go on for much longer. We are robbing billions of dollars in supplementary retirement income from our next generation. This small cut has a giant multiplier effect and has not been taken into account, or, if it has, it has been ignored. New Zealand First cannot support such short-sighted change, which saves next to nothing today but costs so very much for our future generations tomorrow. It is an incalculable potential that the growing pool of wealth could have contributed to the New Zealand economy as investors sought to grow their returns. New Zealand First does not support this bill.

[Continuation line: Jami-Lee Ross]

KiwiSaver Budget Measures Bill

Speech - JAMI-LEE ROSS (National—Botany)

JAMI-LEE ROSS (National—Botany): It is easy to see why the members on the other side of the House are so glum—so glum after yesterday’s Budget because there are tens of thousands of families across the country who are going to benefit from the package this Government put together. Half a billion dollars of savings through this bill will enable us to deliver $790 million of funding to the children in this country most in need. I can tell those members that there are families and there are parents in this country that are saying: “I would rather have $25 a week in my pocket now rather than $1,000 that can be used in 30, 40, or 50 years’ time.” When we consider the Budget and we consider what New Zealanders need right now, New Zealanders need right now family support for those in hardship. It might cost half a billion dollars in savings through this, but ultimately there are 190,000 children who are better off through these changes and they need to realise this. I commend this bill to the House.

KiwiSaver Budget Measures Bill

Speech - JAMI-LEE ROSS (National—Botany)

Mr DEPUTY SPEAKER: A 5-minute call—Jan Logie.

[Continuation line: Jan Logie]

KiwiSaver Budget Measures Bill

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): I am little bit at a loss as to whether it is even worth standing up to speak when all I can hear from that side of the House is a barrage of laughter, of heckling, and of a round of applause for a speech that I think took less than a minute defending a policy that I think is actually indefensible. The last speaker, Jami-Lee Ross, stood up and tried to tell this House that the Government is being beneficent by taking half a billion dollars from some including very low-income people in this country who otherwise would have no savings whatsoever and who are trying to survive and feed their kids while it gave tax cuts to the wealthiest people not that long ago and increased taxes by increasing GST on every New Zealander. This is not: “Take from here—this is the only place we can take it from to be able to give to this group.” There are other places. You could be more creative, Government. You have not been. You have gone for a very easy option. I will say—and I have said it before—that when the economy is not working for everyone, it is not working. We know this economy is not working when a quarter of a million children in this country are in poverty and the Government’s measures, which it is so proud of and is saying is $25 a week—which in fact will not be $25 a week in the hand for beneficiary families because they will be losing it through accommodation cuts and money being taken off around health costs and other abatements. So the Government is giving on one hand, saying it is being so generous, while it is taking with another. I want to talk a little bit, in this speech, about inequality, which is a real problem in this country. People in New Zealand are increasingly concerned about it. There are two types of inequality. It is a basic thing. There is inequality in relation to income and then there is inequality in relation to wealth. Income is pretty easy to understand. Wealth is something we do not talk about as much, but in New Zealand, the last survey that we—[Interruption]

Mr DEPUTY SPEAKER: Order! If members want to maintain a discussion, can they go to the lobbies.

JAN LOGIE: Thank you, Mr Deputy Speaker. I do not think they care. I do not think they care what other people think. I think they are just so pleased and proud of themselves for taking this money away from people that they do not need to listen. In 2003 and 2004 the top 10 percent of New Zealanders owned 51.8 percent of the net wealth of all households in New Zealand. Those people in that category averaged about $835,000 worth of wealth each. The top 1 percent had 16.4 percent of the wealth in this country and averaged about $2.6 million each in their wealth, and yet the bottom 20 percent of New Zealanders had zero or little wealth and some were in debt. This policy, which provided $1,000 in savings for people, may have been the only wealth they had—the only chance they had to have some savings. That has been taken away by this Government. It will have a compounding effect on inequality in this country. I would like to say, when you were saying: “We can’t. We’ve got not choices if we’re going to give $25 a week to people who have children who are dying through income-related poverty.” I would remind this House and members on that side that the wealth of the richest person in New Zealand is worth $7 billion, while 20 percent of this country have zero or little wealth and many of them are in debt. This is at the heart of what this bill is about. The contribution from KiwiSaver and the Government enables some people to actually get some savings. We know that KiwiSaver can contribute to increasing inequality, because people who are earning the most will get the most from their employer contributions and therefore they are able to go ahead, and their wealth will breed more wealth, and it grows. Whereas for the people on the lowest incomes who are not able to afford those weekly contributions to KiwiSaver, their wealth, or lack of wealth, will stay there. This does not help inequality in this country.

[Continuation line: Deputy Speaker; David Seymour]

KiwiSaver Budget Measures Bill

Speech - Mr DEPUTY SPEAKER

Mr DEPUTY SPEAKER: A 5-minute call—David Seymour.

KiwiSaver Budget Measures Bill

Speech - Mr DEPUTY SPEAKER

DAVID SEYMOUR (Leader—ACT): I greatly enjoyed listening to the contribution of Fletcher Tabuteau. He told us that he was a lecturer in economics. Between you and me, I think he has been telling a few bedtime stories. His declaration also reminded me of a quote by Margaret Thatcher: “If you have to tell them that you are a lady, maybe you are not.” If you want to quote economists, then maybe we should start with the wonderful Henry Hazlitt, who said that the good economist looks at the long term and an average for all groups; the bad economist looks only at the short term for some. When we talk about this shift in resources within the Budget, we are reminded of another thing that Fletcher Tabuteau said. He said it was a “Peter and Paul Budget”, taking money from one person and giving it to another. Well, I hate to tell you, but that is what budgets are about. If everyone was just going to keep the money that they already had, we would not need to do any of this. We could just keep our own money and not have a Budget. But I know that members are very eager to get home, so I will be as short as I can. The fact is, what this Budget has done has taken money, $2.5 billion, out of middle-class welfare into savings and put it into another form of investment—that is, investment in human capital, the most important investment that any country can make in the long term.

Clayton Mitchell: Are you getting a sore neck from all this bobbing around?

DAVID SEYMOUR: Maybe just wait your turn. Oh, wait, you have had your turn, and it was not very good, was it? The fact of the matter is there is real problem with this policy, and I am sorry to disappoint members to my immediate left, but this Government has shown tremendous courage in removing a middle-class welfare transfer. Would it not be nice—would it not be nice—if this Government could show the same courage when it comes to superannuation? Because the benefit that so many older generations got, it is more than happy to take it away. It is more than happy to take it away from younger New Zealanders, those who might have been enrolling for KiwiSaver in the future. It is more than happy to do that, but it will not bite the bullet when it comes to the future liabilities for New Zealand superannuation , which those same young people will now have to pay. This is the same $1,000 that, not so long ago, National wanted young people to put into the same housing market that the Reserve Bank Governor is doing everything he can to deflate because he says that it is dangerous. So this cuts both ways. It is an admirable policy. It is an economically literate policy, unlike what I hear from my right. It is a policy that I will be supporting. However, would it not be nice if this Government had a little bit more of a long-term view and was a little bit more prepared to look into the future, confront the challenges that this country faces, and take on long-term superannuation reform? Thank you, Mr Deputy Speaker.

[Continuation line: Andrew Bayly]

KiwiSaver Budget Measures Bill

Speech - ANDREW BAYLY (National—Hunua)

ANDREW BAYLY (National—Hunua): What a wonderful night to be here, is it not? That was a fabulous speech. Unfortunately, it was slightly confusing at points, but it was a great start. And that lesson on economics, I have just so much enjoyed that. All I want to say tonight is that I think that we should be celebrating 2.5 million—2.5 million—people who have joined KiwiSaver and got their $1,000. They have got success, but everyone still gets the $521 every year and, through our generous home loan package, they can still join up and enjoy and go forward and buy houses. I believe that this is a good thing, and I commend this bill to the House.

[Continuation line: Hon Ruth Dyson]

Adjournment

Speech - Hon RUTH DYSON (Labour—Port Hills)

Hon RUTH DYSON (Labour—Port Hills): I am delighted, at this peak listening time, to have the opportunity to speak in opposition to the KiwiSaver Budget Measures Bill . This is clearly a result of the panic that Bill English went into when he got into his final preparation for the Budget and realised that there was going to be, yet again, for the seventh year in a row, no surplus. He did everything he could to try to get some money together. Some of those measures were understandable; some of them I feel so strongly opposed to that I will be putting my vote against the bill, and this is included in the one that we are debating now. For many people, they will never have the opportunity to have $1,000 in their savings accounts, and it is sickening, actually, to hear members opposite, who earn $150,000 a year, and all that they have done for the last 3 days is stand up and say: “I move that the question be now put.” For that, they earn $150,000 a year—and additional expenses on top of that, of course—and yet we have people who, when we leave tonight, will come in and clean our offices, who earn less than $15 an hour and are expected to keep their families on that sort of income. So for those people, who work as hard or harder than every member of Parliament, having the opportunity to have $1,000 put into their savings account once they start contributing the little bit of money that they have—and some of them do not have spare; they have had to cut something to put money into their KiwiSaver account. To have those people have that $1,000 taken away from them, but, even more galling, to have the members of the National Party laugh and say: “That’s a good thing.”, is, I think, wrong. I do not agree with it as policy. I think it lacks vision, it lacks compassion, and it lacks any empathy at all with understanding how many members of our society have that inability to save for their future. You know, when you are on $150,000 a year, you just take it for granted, but if you are on $14 or $15 an hour, you are not able to put that money aside for your future. That is the sort of vision that we should have for older New Zealanders. That is the sort of vision that we should have. We would like to see older New Zealanders being able to retire and have security in their income and more than just the basic superannuation. We have got a better superannuation scheme in New Zealand than many other countries have, but a married couple still gets only 66 percent of the average wage as their total superannuation income. I would challenge members opposite to try to live on that without any other savings to fall back on. For day-to-day living, it is OK , but when something goes wrong, and when your roof needs replacing, when your washing machine breaks down, or when you need to fix your car, they are big expenditure items. If there is no money in the bank, those are the people who suffer. That is why I have always supported that kick-start payment being made to people who join KiwiSaver. KiwiSaver itself was a fantastic scheme, and I want to pay credit to Dr Michael Cullen for his vision in saying that we need to change the savings culture in New Zealand, and this was his way of doing it. Since it has been introduced, we have seen year after year after year of the National-led Government make cuts to the integrity of the KiwiSaver scheme. With every opportunity Bill English and John Key have had, they have weakened what was a very strong scheme—weakened the integrity of the KiwiSaver scheme. The minimum member contribution was reduced. We have had the fee subsidy discontinued, the compulsory employer contribution capped, and the employer tax credit discontinued. We have suddenly decided to weaken the KiwiSaver scheme. This measure tonight, which is in the KiwiSaver Budget Measures Bill, is a desperate attempt to try to cobble together a little bit of extra money to make the surplus, but it was—

Adjournment

Speech - Hon RUTH DYSON (Labour—Port Hills)

Mr DEPUTY SPEAKER: I am sorry to interrupt the member. The time has come for me to leave the Chair. I want to thank the House for the collegiality of the debate and the spirit in which people have engaged tonight. I must admit that we have all learnt an awful lot, specifically about the King of Belgium.

Sitting suspended from 12 midnight to 9 a.m. (Saturday)

KiwiSaver Budget Measures Bill

First Reading

The ASSISTANT SPEAKER (Hon Trevor Mallard): The House is resumed. When we were suspended last night we were debating the first reading of the KiwiSaver Budget Measures Bill. The Hon Ruth Dyson was speaking and she has 5 minutes and 30 seconds remaining to speak, if she so wishes.

KiwiSaver Budget Measures Bill

First Reading

Hon RUTH DYSON (Labour—Port Hills): I certainly do wish to continue the speech that was so rudely interrupted at midnight. It seems like just a couple of hours ago when the Hon Maurice Williamson was contributing so strongly to this debate. It is a sad day when the National Party rejoices in taking $1,000 out of the pockets of hard-working New Zealanders, particularly those people who have found it so hard to save and put aside money, but know they should build up their KiwiSaver accounts so that they will have better financial security in their older days. The National Party members last night were making it very clear that they had no understanding at all of what it is like for people for whom $1,000 is a target they would never be able to reach without the support of Government. Those people are now seeing that money go away. I heard some National Party members yesterday talking about the $25 increase in benefits and how that would justify it. That is 40 weeks of benefit being lost by this bill, this KiwiSaver Budget Measures Bill. It is not a one-off. It is not just a one-off, with Bill English scrambling to try to get another surplus, which he has again failed to reach. For the seventh year in a row no Budget surplus, despite two election promises—the 2011 election promise of a Budget surplus this year, and the 2014 election campaign promise of a Budget surplus this year. Two significant election campaign promises broken in this Budget yet again. This is a mean-spirited bill that takes away that $1,000 for KiwiSaver savers. About half a million New Zealanders, many of whom are young people just entering the workforce, and about 70,000 children will now miss out on getting that $1,000 kickstart to KiwiSaver. What makes it even worse, what makes it more unfair, is that it is retrospective. It started from 2 o’clock on Budget day, even though by the parliamentary calendar today is Budget day. Today is still Thursday. The rest of the world has actually moved on, and for them it is Saturday. It is going to be a long Saturday for the National Party.

Iain Lees-Galloway: When do the benefit increases kick in?

Hon RUTH DYSON: The benefit increases do not kick in—that is a very good question from my colleague Iain Lees-Galloway, MP for Palmerston North—until 1 April next year, but the KiwiSaver cuts that this bill is all about started from 2 o’clock on Thursday of the week that we have just ended—2 o’clock on Thursday. This is retrospective legislation being rammed through this Parliament under all stages under urgency. I wonder why that is. Is it because there is some genuine urgency to this legislation? Is there a desperate need for this measure to be introduced? No. It is like all the other measures that are being put through under urgency. It is because none of the National Party members can front up to members of the public, let alone their own constituents, for those who are electorate MPs, or for list MPs. They cannot front up to the people whom they deceived during the election campaign by not mentioning that they would take away the $1,000 kickstart to KiwiSaver. Not once on the Ilam election campaign trail did Gerry Brownlee say: “We are going to take away your $1,000 kickstart to your KiwiSaver account.” But he did say that next year’s Budget will be a surplus Budget, just like he did in 2011. This has been a Budget of broken promises, and of mean-spirited legislation, including this one. It has been a scramble for Bill English to try to get to a Budget surplus, and once again he has failed. If people had signed up to KiwiSaver at 1 o’clock on Thursday they will be getting the $1,000 kickstart, but if they had signed up at 2.30 on Thursday they will miss out. David Seymour took the cake last night. He said that that is what Budgets are about—you take from some people and give to others. It is depends whom you take from and why. Taking money from low-income, middle-income, hard-working New Zealanders, the key trigger for them to have an incentive to be better savers than they were in the past, has been taken away by the National Government. Where is that money going? It is really hard to say. There is no commitment to investment, no commitment to our regions, no commitment to employment, and no commitment to a vision or a plan for the future. This is just a scramble of ideas in the Budget. It is mean-spirited legislation and unfair. This is a continuation of the watering-down and cuts that National has brought into the KiwiSaver scheme. This is the eighth cut to KiwiSaver since National was elected in 2008. There has been a series of cuts to KiwiSaver, which was one of the biggest changes that we had to the savings culture in New Zealand. There is no money going into the superannuation fund. KiwiSaver is the biggest saving incentive that we have had in New Zealand since the Bill Rowling scheme, which National cut as well, actually, in previous years. KiwiSaver and superannuation is our commitment to the future, and all National wants to do is cut it.

[Continuation line: SCOTT

KiwiSaver Budget Measures Bill

Speech - ALASTAIR SCOTT (National—Wairarapa)

ALASTAIR SCOTT (National—Wairarapa): We have had about an hour of contributions from the other side. That hour has confirmed in my mind that those guys have absolutely no idea what they are talking about when it comes to fiscal responsibility. Mr Assistant Speaker, you have already heard Ruth Dyson talking about surpluses. She talked about—[Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Can we just lower the volume from my left a little bit, please. I just cannot hear the member at all.

ALASTAIR SCOTT: Thank you, Mr Assistant Speaker. Ruth Dyson was talking about surpluses and forecast smaller surpluses, but she did not talk about what the $790 million of reduced or small surpluses is funding. There is a choice, Ms Dyson. You cannot have everything. You can take away the $790 million package. That will give you increased surpluses. But that is not what we choose to do. We care for those who can least afford it—beneficiaries with children. When you care about things like that, you have to make choices.

Hon Ruth Dyson: You have just taken 40 weeks of benefit increases off them.

ALASTAIR SCOTT: That is only one third. Last night we heard from a professor of economics who talked about nonsense. I commend this bill to the House. [Interruption]

KiwiSaver Budget Measures Bill

Speech - ALASTAIR SCOTT (National—Wairarapa)

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! And on this occasion I think I am having trouble hearing the member because one of his colleagues is yelling over him. I think the member might have been breaching outside the bill, but I just could not hear.

[PV on first reading—Ayes 63, Noes 58]

Bill read a first time.

[Continuation line: Second Reading – McCLAY]

KiwiSaver Budget Measures Bill

Second Reading

Hon TODD McCLAY (Minister of Revenue): On behalf of the Minister of Finance, I move that the KiwiSaver Budget Measures Bill be now read a second time. New Zealand is emerging strongly from the economic turmoil following the global financial crisis and the effects of the Canterbury earthquakes. If we are to withstand future microeconomic shocks we need to ensure that Government spending is prudent and well targeted to where it is most needed. Removing the kickstart will achieve significant fiscal savings and enable the Government to meet competing policy and fiscal strategy objectives. The removal will also have the effect of lowering the cost of KiwiSaver and therefore improve the value of money of the KiwiSaver scheme.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Can I just ask the Minister to resume his seat. I noted at the beginning of his speech he said he was moving the second reading on behalf of the Minister of Finance. The bill is in fact in the Minister’s name, so I think what he might what he to do is just correct that.

[Continuation line: McCLAY: I move, That the KiwiSaver]

Hon TODD McCLAY: Thank you, Mr Assistant Speaker. I move, That the KiwiSaver Budget Measures Bill be now read a second time. Removing the kick-start contribution will achieve significant fiscal savings and enable the Government to meet competing policy and fiscal strategy objectives. Removal will also have the effect of lowering the cost of KiwiSaver and will therefore improve the value of money in the KiwiSaver scheme. KiwiSaver remains an attractive scheme and the Government is committed to it. I would like to point out that the KiwiSaver members will continue to receive employer contributions and Government-provided member tax credits. It will remain an important vehicle for saving towards homeownership. Since 2011 there have been more than 9,500 withdrawals from the scheme, totalling more than half a billion dollars, as people use their KiwiSaver contributions to buy their first home. I note that more New Zealanders have joined KiwiSaver under this National Government than under the last Labour Government. New Zealanders did not have faith in the scheme under Labour, but they do have faith under National and they will continue to have that faith. The change proposed in this bill will help ensure KiwiSaver is sustainable and represents good value for money. I therefore commend this bill to the House.

[Continuation line: Andrew Little]

KiwiSaver Budget Measures Bill

Speech - ANDREW LITTLE (Leader of the Opposition)

ANDREW LITTLE (Leader of the Opposition): This bill is the most symbolic of all the Budget legislation going through the House. It is the most symbolic of the measures in the Budget, apart from one other. The National Party after 7 years in office discovered poverty in New Zealand. It has discovered after 7 years that there are people who have been struggling and doing it really hard. The Government has helped and given them 25 bucks a week, but it has taken everything else way from those hard-working, hard struggling Kiwis and this is just one of them. This is the most symbolic. The purpose of KiwiSaver when it was first started under the last progressive Labour Government, the last Labour Government, was to help savings because everybody identified that New Zealand had a major savings problem. People were struggling to put money aside and they needed to have a scheme in which they could save so they could live with just that little extra comfort in their retirement. But ever since this Government has been in power, it has hated KiwiSaver. Actually, it hated KiwiSaver at birth and it has KiwiSaver ever since. Every opportunity National gets to hack away at it, to cut it, to undermine it, to destroy it, it takes that opportunity. The Government did it when it cut the member tax credits and undermined that contribution. That helped hard-working Kiwis! And how it is having another go. It is taking away the kick-start. It is taking away the kick-start because this is a National Party, and a National Government, that hates KiwiSaver. It cannot leave it alone. It cannot keep its hands off it—a bit like the Prime Minister and ponytails. It cannot keep its hands off it. So now the Government has taken the kick-start, the very thing that helps many people. For many workers I know, when the scheme first came in, the one thing that got them into the scheme was that kick-start, the thousand bucks. It was “I know I’m going to have a little bit of a struggle to get into this in the next few years until my pay increases—but because I’m part of a good union I know I’m going to get good pay increases—but I’ll make the contributions and I know I’ll get the thousand bucks kick-start and that’ll get me into the scheme.” That is why 2.5 million Kiwis are in the scheme—that is what 2.5 million Kiwis have made that decision. They knew that they could get that help, and they were getting the member tax credits as well until this mob cut them and made that harder, but they all got the kick-start, the $1,000 payment. Those who were thinking about their kids and their kids’ future thought “Yep, we’ll make sure they get in and get an early good savings habit started.” So the mums and dads signed up their kids too and they got the kick-start too. Well, all that goes. It may have been lost on the National Party and its great planners—oh whoops, it does not have any because it does not have a plan. It has never had a plan for the good of New Zealand. But let us do what economists do and make an assumption that the National Party has somebody who does planning. When National planned this, it may have forgotten that actually kids are going to carry on being born in New Zealand. New Zealand parents will continue to have children. I think we can safely make that assumption. So as more children are born, as more children come into New Zealand, and as they enter the workforce, they might want to start their KiwiSaver account. They might need a bit of help, and a $1,000 kickstart will be that help. Well, it would have been that help, but National has destroyed it again because it hates KiwiSaver. It is bad enough that the Government is running down New Zealand Superannuation. Oh yes, 7 years in office and not a single effort done to make sure that the future of New Zealand and New Zealand retirees is safe and secure. Government members just lives in splendid ignorance of the biggest issue facing the country. They just bury their heads in the sand and they do not want to touch it. It is bad enough for a country that is desperately trying to grow its own capital base, desperately trying to create the foundation for future wealth through things like KiwiSaver that this Government, that this party in Government, just continues to run it down. Government members sit there shamefaced—the only respectable look they have shown in the whole Budget debate. They sit there shamefaced because they know the damage that they are bringing on this country. They know the damage they are doing. It is just like the rest of the Budget, actually, because they do not have a plan, they do not have a vision, they do not know what they are doing. It is Budget by Budget and it is broken promise after broken promise. They are doing this because they have discovered poverty and they are desperate to do something to give the appearance that they are doing something. So they will crib it out of KiwiSaver, take it off the future generations, and try to kind of look after those who have been struggling for so long and give them a slight bit of reprieve now, but it is not a way to run the country. It is not a way to build a foundation and it is not a way to improve the long-term interests of all New Zealanders and all New Zealand. They do not have an answer. They do not have a clue. They do not have a plan. They do not know what they are doing. They are out of touch, out of ideas, and rapidly out of time. They do not know what they are doing. Demolishing KiwiSaver, taking away the kick-start is just another measure to further erode the strength that New Zealand desperately needs in its economic base. They have got nothing at all—they have got nothing at all to add to the long-term future economic base of New Zealand. Here was something—encourage people to get into savings, encourage people to get into KiwiSaver, give those kids a chance, give them a start, and those workers who are on sort of low and medium incomes, it was to give them a help to get into KiwiSaver, to build up their long-term savings, and, hopefully, to give them a bit of dignity in retirement. But no. Government members cannot look much further than the next balance date. Then they have to make up a fictional surplus to get them that far as well, to convince themselves that they know what they are doing, to convince themselves to think that they have got a Budget that is going to make a difference. Well, the only difference it is making is to make it much harder for hard-working Kiwis who just want a bit of help to get their savings under way. They just want a bit of help to get their KiwiSaver going and now it is being ripped from under them because this Government is desperate, is out of ideas, does not know what to do, cannot manage the economy, and is leaving all the problems built up for the next Government to have to fix and address. The problems are all mounting and this will be just one of them—the ongoing shallow capital base of New Zealand encouraged and fomented by this Government because it does not know what it is doing, thrashing around looking for an answer, thrashing around trying to convince itself that what it has done is going to be good for struggling hard-working New Zealanders, and it is not. But the Government has got to do this. Government members have got to convince themselves that if they give the appearance of doing something, and pat themselves on the back for discovering poverty, maybe they could get through the next year, as they rush around trying to find a solution to the other bigger problems. Government members talk about leakage. This is about their answer to leakage because apparently they are saying that the kick-start is not targeted to the right people. Well, KiwiSaver is actually targeted at everybody. That is the whole thing about KiwiSaver. It is about getting every New Zealander a chance to have a say and to have their savings, giving every New Zealander a chance to get their savings habit under way from a young age, from a working age. But now here they go again. They never said this in the election.

[Continuation line: They never went into the election]

ANDREW LITTLE

They never went into the election and said that is it. The world knew they hated KiwiSaver. We thought the hatred had come to an end. We thought they might do something constructive. We thought they might do something to build New Zealand’s economic base. We thought they might do something for the good of New Zealand’s economic future, but still they will not.

David Bennett: Too little, too late.

ANDREW LITTLE: David Bennett thinks that doing something for New Zealand’s economic future is the Waikato Expressway. Well, that is not enough—that is not enough. That is about ferrying people out of Auckland because they are desperate to get out there and get somewhere they can drive their car, not about building the economic base of New Zealand. They have got nothing to say about helping New Zealanders on their savings habit. Now we see the most symbolic gesture in this Budget—the most symbolic gesture in this Budget—is yet more “short-termism” and ripping away the opportunity that hard-working Kiwis would have had to start their savings habit. Here they are, doing it on Saturday morning of Budget weekend. Here they go, ripping away the chance of opportunity for hard-working Kiwis who just want a chance to save, just want a chance to contribute to the nation’s savings and the good of the nation. Well, here it goes again. Here is the National Party again. The National Party, as we know, does not like KiwiSaver, hates workers, does not want to give them a hand, does not want to give them any support. It pulls away the one chance they have got, the one bit of help they get to get their savings habit under way. Here National is, in Budget 2015, pulling it out from under them, ripping it up. National does not like working Kiwis trying to get ahead. It is the way the National Party operates. It has done it for the last 70 years. It is doing it again in office. It is about to come to an end. It will be the next Labour-led Government that restores KiwiSaver and gives working New Zealanders a chance to get ahead for the good of all New Zealand.

[Continuation line: Gerry Brownlee]

KiwiSaver Budget Measures Bill

Speech - Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery)

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): That is the sort of speech you give when you come to the party 43 years late. That is the sort of speech you give when you have got no ideas to offer the country at all. What we heard from Mr Little was that apparently there is no plan. Well, I tell you what: there are a lot of people in this country who think that the Government of the day is doing an extremely good job, and they are very, very happy about the Budget that has been brought down in the last few days. What we heard from Mr Little in a policy sense in that short speech was his reconfirmation that under Labour the retirement age will go up—not 67, not 68, not 69, most likely 70. That at least is something that Labour is standing for. Secondly, we have heard that when people do get to what is a nominal retirement age, if they are still working, then there will be a means test applied to them. When you look at the Labour Party record for spending in Government, everyone knows that it will not just stop at the earnings over and above wages; it will be everything for anyone over the age of 65 under a Labour Government. I find it really staggering too that Mr Little expects to be taken seriously when he talks about fiscal matters by offering the really insightful piece of information that if a Government makes a grant to someone in order that that person might start some savings, that somehow is the basis for an expanding fiscal foundation for the nation. Well, I do not mind saying that I have never really understood how someone can say that they are wealthier by virtue of their borrowing. That is fundamentally wrong. That is the sort of rubbish that Mr Little is going around saying on the stump at the moment trying to convince New Zealanders is somehow some insightful idea that the Labour Party can conjure up out of nowhere the money to make life better for everyone. The other point that was really interesting was the attack that Mr Little managed in this KiwiSaver Budget Measures Bill to mount on this Government’s record when it comes to Government superannuation. This Government has raised the superannuation income for superannuitants repeatedly over the last 7 years—repeatedly—and not in just the context of CPI but in other things as well. Although the numbers are not in front of me, I can tell you that those increases are well in excess of $100 a fortnight in the last 3 years. That is real work by a Government. That is not some sort of penny pinching. It is also extraordinary that in a Budget where there has been a big move to raise the benefit incomes for those New Zealanders who require that assistance that the Labour Party, of all people—

Hon Ruth Dyson: You’ve just cut 40 weeks of it in this.

Hon GERRY BROWNLEE: —Ruth Dyson and the exiting crew from the back row, all out there, waving a bit of paper and asking “Where’s the surplus? Where’s the surplus?”. So what we know is that a Labour Government will always put a surplus ahead of the needs of New Zealanders—it will always do that. That is its record. That is its record. That is why for so many of those 43 years since 1972—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Thank you. I know that this bill has not been to a select committee and therefore the debate can be broader than normal, but I am just going to ask the Minister to try to—

Hon Annette King: Mention it.

The ASSISTANT SPEAKER (Hon Trevor Mallard):—that is what I was going to say—mention it, rather than have the entire debate a rerun of or a prelude to his contribution to the Budget debate.

Phil Twyford: He’s a senior member. He should know better.

Hon GERRY BROWNLEE: That is right, I should know better, but I will also resist any temptation to note that at a very, very salient point of my contribution to this debate there could well have been a partisan intervention, but I am not going to say that. Just think carefully about what KiwiSaver does. KiwiSaver says to anyone coming into the workforce to sign up to this particular proposal, put a sum of your money into the scheme, and there will be an employer contribution plus a $521-a-year contribution from the Government as well. None of that changes. That all remains in place. The really interesting thing is that young people going into the workforce and signing up to save in this way will now have access to those KiwiSaver funds for the purchase of a first home. These are not small grants—$5,000 per individual if it is a second-hand home, or $10,000 if it is a brand-new home or $20,000 for a couple who have saved through this system. So it is utterly ridiculous for anyone to suggest that the incentives for young people to sign up to KiwiSaver are in any way at all damaged by this particular prospect. I heard the most interesting thing on TV the other night: a vox pop in the street where clearly someone from the Labour Party had managed to get themselves in front of a camera and were saying—[Interruption] True, it is a rare thing for someone from the Labour Party to get in front of a camera. They were saying: “This is a terrible thing. I had hoped that I would be able to use my KiwiSaver and that $1,000 to go towards my first home.” Well, get real. Get real. Saving over a 5-year period is going to see more than $2,500 of Government grants going into that account, plus up to $10,000 at the time that the house is bought. People understand that. People understand that well. I can tell our opponents on the other side that there is a whole industry of people out there encouraging young people to join KiwiSaver under those conditions. That is why the numbers are at 2.5 million, and that is why they will not fall. Young people actually do have aspiration. Young people do want to make the most of their lives. Young people will see that getting up to $15,000 worth of Government grants when they come to buy their home makes it well worthwhile being in KiwiSaver, regardless of this $1,000.

[Continuation line: David Clark]

KiwiSaver Budget Measures Bill

Speech - Dr DAVID CLARK (Labour — Dunedin North)

Dr DAVID CLARK (Labour — Dunedin North): This is a Budget of broken promises. It is short on vision and it fails to deliver a surplus. People around the country watching that speech will be saying to themselves: “I wonder—did those Ministers on the National benches take that $1,000 themselves before they cut it off for hard-working families around the country?” They will be asking whether the member for Ilam banked that $1,000 before he cut it off from his constituents. They will be asking whether he encouraged his family members to take that $1,000 before they cut it from hard-working constituents. They will be talking to the member from Hamilton West and asking whether he took the $1,000 before he cut it off from his hard-working constituents.

David Bennett: He wouldn’t take a thousand bucks.

[Continuation line: The member from Hamilton East]

Dr DAVID CLARK

The member from Hamilton East: did he take it from his family members for himself before he cut it off for the rest of hard-working New Zealand? They will be going into the office in Rodney and saying to the member there: did he take the $1,000 before he cut it off from his hard-working constituents? There are some guilty faces opposite, and I am not surprised. They will be going into the Rotorua office and saying to the Minister: did he take the $1,000 before he cut it off from hard-working families? And I would be interested to hear what answers they get. I wonder if the journalists will ask them whether they took the $1,000 KiwiSaver kickstart before they cut it off from hard-working New Zealand families. Over there, they are quite happy to cut out the lunch for everyone else when they have got a big lunch for themselves, and that is indicative of this Government’s attitude to the future of New Zealand. They have hit the panic button. They have hit the panic button, and we can see it right there in the regulatory impact statement, on the front page. On the front page: “This advice was requested in advance of Budget 2016 and therefore has been prepared urgently.” How long has the Budget been coming? Why did it need to be prepared urgently? So they have not even focused on the effect on policy options on national savings. They say it there, it is paragraph two. Paragraph one it is urgent, paragraph two they have not focused on savings. And then paragraph five, if we skip forward—there has only been limited consultation—and now we are passing it through urgency. They know what answer they would get. They know the hard-working New Zealanders who come into their offices would be furious that they took the $1,000 and then said it is gone. It is gone, but it is what we get from this Government. It is out of touch, it has lost touch with middle New Zealand. It is looking after the interests of a very wealthy few, and it is robbing Peter to pay Paul. Where there are few good things in the Budget—and we have on this side acknowledged some good changes in the Budget—we see that there is sleight of hand and they are taking with the other hand, and middle New Zealanders are the ones who are squeezed yet again. They are robbing Peter to pay Paul. Those improvements should not come at the cost of those who are just one or two rungs further up the ladder, but that is what we see from this Government, a Government short on vision. There is no doubt that this change will reduce savings for New Zealanders, and at the very time we need to be increasing them. This is a short-term plan and not a long-term vision. But it is what we have come to expect from this Government, a Government that is neglecting the regions, that has failed to diversify the economy, that has failed to address the housing bubble in any meaningful way, and that has failed to diversify the skills of New Zealanders to prepare for tomorrow. We know—I remember, from my time in Treasury—that one of New Zealand’s challenges is capital debt. It is actually having enough money for businesses to access, for them to grow. That is a very serious problem. Treasury had an analyst on it in the 70s. They have still got an analyst on it, and opposite they are doing nothing about it but cut, cut, cut when it comes to savings. They do not care about business in New Zealand, not small business, not medium sized business, anyway. Across there, all we see them doing is cutting, and they have cut the contributions to the Cullen Fund. They have cut the contributions to KiwiSaver on several occasions. This is one of a number of cuts. Last night my colleague David Parker outlined seven or eight cuts, I think it was, that they have made to KiwiSaver. This is a Government that does not care. In Australia they have got a superannuation fund that has got $1.3 trillion in it. That would have happened across here if Muldoon had not cut it. This is the same attitude as the Muldoon Government: this Government, though, has borrowed more than Muldoon. They are up to $88 billion in debt. They are drowning us in debt, $10 million a day is spent just paying off debt. Taxpayers are paying $10 million a day just to pay off their debt. That is the attitude they have. That is short-term thinking from a Government that is out of ideas. Half a million Kiwis are going to miss out on this $1,000 over the next 4 years. Those are the Kiwis who should be going into the offices of those members opposite and saying: “Did they take the $1,000 before they cut it?” Did they take the $1,000 before it was cut? I will be interested to see. I would like them to put up their hands, that they took the $1,000. I would be interested to see if members opposite have the courage to put up their hands, that they took the $1,000. Let us see: how many of them took the $1,000? How many took the $1,000 across there? None of them! They are all saying that none of them took the $1,000. I bet that is wrong. I bet we will learn, in coming days, that that is wrong. Those members opposite should own up. They took the $1,000 and then they took the ladder away. That is just typical of this Government. We know this plan works—that is the crazy thing—2.5 million Kiwis have signed up for KiwiSaver, 2.5 million Kiwis have signed up for Labour’s KiwiSaver programme. And the IRD says, in its recently released, fairly thick and comprehensive evaluation report, that this is an excellent scheme, basically: 36 percent extra savings on top of the savings that would ordinarily have happened in our economy. It is because, of course, there are member contributions that encourage people to get involved. There is an opt-out clause, so people are in the scheme and there are no overheads, no hassle to get involved. People find themselves saving before they know it. Of course, they are encouraged, because there is a thousand bucks in there to start with. As my colleague David Parker outlined last night, that makes a difference for somebody on $15 an hour with a part-time job, when they are saving a couple of bucks a week: a $1,002 is much easier to be proud of than $2 in your account. It makes you feel good. Behavioural economics have happened. We are not still in the 80s. Those people over there need to read a few new economics textbooks, get the Hayek out from under their pillows, get a few new books under their belts, and get the spray-misters out to dry them off. Those people opposite need to have an up-to-date understanding of just how economics works. Thank goodness the IRD has a few insights, because it is telling the Government that this policy works. This policy works. And the beautiful thing, of course, is that people are signed up to the scheme already. A lot of people have got this and they will be thankful. But it is the half a million Kiwis who are going to miss out over the next 4 years, who we should be thinking about. Those half a million Kiwis—I hope just a few of them go and ask these National MPs and Ministers opposite whether they took the thousand bucks before they got rid of the scheme. They already cut the member tax credit in 2011, cutting savings. Cutting savings is not the way to manage the economy. It is what Muldoon did, and this is the Government that has created more debt than Muldoon. It is the same plan, and it did not work then, and it will not work now. And Kiwis can see that. We do not even know if it can be implemented. The IRD says it is going to cost $210,000 to implement this scheme. That is 210 Kiwis who could have had the extra thousand bucks. And will the members opposite be able to do it, or will they be coming back again, like they have done with so many bills that have adjusted the tax system—to reverse the changes out because they cost so much under the old system in the IRD that they still have not fixed, after nearly 7 years of Government. Seven years, 7 long years, and they still have no new ideas. They have not fixed the tax system. I doubt very much whether they will be able to do it. And they are costing New Zealanders’ future. They are stealing from the future generations, from the pockets of kids. This is what it has come down to. And they will claim high and mighty, they will say they have made some positive changes, and no one on this side of the House begrudges them that. But we do not want to do it by stealing out of the pockets of those who are one or two rungs further up the ladder. It is always the middle and lower classes, those who are struggling, those who are really working hard, those who go out to work every day on modest wages, those who are on median incomes, who are feeling the squeeze. It is not those at the very tip-top, not those who benefited from the 2010 tax package, not the top 1 percent. But we will see. Let us see if Mr Bennett stands up shortly to say that he took the $10,000 and he is proud to see that no one else—[Interruption] Sorry, $10,000—whatever, even better—that he took the $1,000 and then cut the scheme. I bet Mr Bennett will tell us that he did take the $1,000, that he encouraged everyone he knew. This is retrospective legislation, because they know that if they pushed this out a whole bunch of people would sign up, no matter what they say. This is a Government that is out of vision, out of ideas, and out of touch.

[Continuation line: David Bennett]

KiwiSaver Budget Measures Bill

Speech - DAVID BENNETT (National—Hamilton East)

DAVID BENNETT (National—Hamilton East): The speech that we heard from Andrew Little today was much better than 2 days ago. I think that was actually a better speech than what he delivered on Budget night. It was too little, too late, but it did come from the member from that party. And in that speech he talked about how the Labour Party felt that there were shamed faces in this Chamber . The only shamed faces are over there. Those were the shamed people on Thursday, because they realised that for over 43 years they did not deliver for the people who needed help—43 years that will go down in the history of New Zealand politics—43 years it took, and not one Labour Government did a thing for those people. Come into this Chamber—every day they come into this Chamber, they preach high and mighty, and say how they are looking after people in need and vulnerable communities, all that stuff. Do they deliver for them? No, they do not deliver. Andrew Little does not want to do that. What does he want to do, though? What does Andrew Little want to do? He wants to take away the superannuation fund from hard-working New Zealanders, hard-working New Zealanders who have spent a lifetime working and when they retire they look forward to their superannuation. And Andrew Little wants to take that away. He wants to take the superannuation fund away from New Zealanders.

[Continuation line: He has had 2 days to reflect on that]

DAVID BENNETT

He has had 2 days to reflect on that and still believes in it. Today in this House, this morning, he said that he would take away that superannuation entitlement from New Zealanders, from hard-working New Zealanders who have spent years in the workforce. They are going to lose it under Labour. New Zealanders understand and expect that from the Labour Party now. But Labour’s grand plan is to give you $1,000 in your KiwiSaver. Grant Robertson said that he would do that. He would reinstate this policy. The Labour Party this morning has said that it would reinstate this policy, but its reason of reinstating this policy is that under good economics it will make you feel good if you have got $1,000 in your account. Good economic policy according to that last speaker, Mr Clark, who did not come back to Hamilton after his last visit, is if you feel better having $1,000 in your account. That is good economics. Well, where does that money come from, Mr Clark, when you have got Budget deficits? You have to borrow that $1,000 to put into somebody’s account to make them feel good. Is that good economics? Maybe if you had actually run a business, you would understand that you actually have to earn the money and then put it in your account rather than put it in there just to make you feel good. But that is the feel-good factor that you get from the Labour Party. Grant Robertson said after the Budget that the Labour Party is going to reinstate that. He did not talk to his colleagues. He did not talk to them at all. He just came out and said it. He said it. That means Labour has committed another $400 million for the next Budget and future Budgets—$500 million. So when we come to 2017, you can put another $500 million on it, which it promised in the election campaign.

Hon Member: Whack it on the bill, Phil.

DAVID BENNETT: Whack it on—that is right. Whack it on the bill, because that is what Labour has done. Mr Little, when he was talking, mentioned superannuation constantly during that speech. He constantly talked about it, because he wants to attack the very people who have made this country strong, the very people who are in this room. I bet you that Professor Fletcher Tabuteau over there will not be agreeing with that. I bet you that Professor Tabuteau, when he talks to his boss, will know that New Zealand First is not supporting any changes to superannuation, because for all the faults there are in New Zealand First, and there are many and you will see them lined up there now, there is one thing it has got and that is that its leader has a sense of the superannuation debate. He knows that it would be the end of the world for the Opposition to go out there and actually promise changes to superannuation. But the Labour Party is high and mighty and will do that. It is a bit like a capital gains tax. A member of the Labour Party promised a capital gains tax. Then they lost the election. Then they said no, we are not having a capital gains tax.

Dr David Clark: I raise a point of order, Mr Speaker. I appreciate that my own contribution was somewhat wide-ranging, but I did try to tie it to the bill. If the member is trying to say that the cuts he is making are tied to the bill, then that might be in order, but it seems it is going a bit far.

The ASSISTANT SPEAKER (Hon Trevor Mallard): All right, the question of relevance is one that is purely for the Speaker and although I expect that I had some criticism from the Leader of the House when I attempted to narrow the debate earlier, as a result of the advice that I had from him, I have let this member run a bit wider than would normally be the case.

DAVID BENNETT: So I do not know why the Labour Party cannot give dignity to people in retirement, why they want to attack the hard-working New Zealanders who have spent years working in our workforce to pay for those members to be in this room, to pay for them to have those grandiose ideas, to pay for them to go around the country as if they are some kind of lords and ladies of the world who can tell us what to do. And then when it comes to those workers’ retirement, they are going to take superannuation away. They are going to take away hard-working New Zealanders’ entitlements in their retirement. But they want to give those workers $1,000 now to make them feel happy. That will make them feel happy and they will be all right, because when they retire, they are going to lose more than $1,000; they are going to lose their entitlements. They are going to have to wait until they are 70. Those people working on the outside of this building, doing the hard brickwork on this building, will have to work until they are 70, under Labour—70 is the age they are going to make them work until. But those workers will get up each morning and they will do that work because they know they got $1,000 when they were 21 and they will remember that and think: “I am happy. I am a happy person because I got that thousand bucks.” That is what the Labour Party economic theory is all about. It is great to see, and it is great to see Andrew Little smiling. It is the first time I have seen him smile in 2 days. It is hard for him. It must be very difficult being the leader of a party that does not really exist any more, and also a party that he does not have support from. The rest of them have got more animation when a National Party member speaks than when their own leader speaks. It was really sad to watch them on Thursday night. When you look at a Budget, you should attack a Budget if you are in Opposition.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I think that even my sort of liberal approach is now being tested, when the members talk about other debates on which he is yet to speak. So the member will now address the KiwiSaver Budget Measures Bill.

DAVID BENNETT: Thank you, Mr Assistant Speaker, and a very good Speaker as well. For 43 years we have delivered the Budget—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will resume his seat.

[Continuation line: James Shaw]

KiwiSaver Budget Measures Bill

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): Thank you for the opportunity to speak on the KiwiSaver Budget Measures Bill . I am going to take, I hope, a slightly different approach. I would like to start by acknowledging both Mr Brownlee and Mr Bennett for actually taking full calls on this bill and actually providing some form of argument in this debate, because during the previous Budget debates over the last few days, Government members have not actually even bothered to speak to their own bills. They have not actually bothered to lay out their case; they have just relied on their numbers. So I do appreciate the fact that Mr Brownlee and Mr Bennett did actually take full calls on this, even if they relied more on volume than reason to make their arguments. There are a number of key points that I would like to address, and I am inviting the Government to respond directly to these points because I have not yet heard any real arguments—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sorry, there is noise from both sides at the moment and it is a bit hard to hear the member.

JAMES SHAW: I was just saying that I am actually inviting the Government to respond specifically to these points. The first one is around New Zealand’s savings rate. We are still 22nd out of 24 OECD countries in our savings rate, which is, even given the success of the KiwiSaver scheme over the last few years, a shockingly low rate of savings. We are a country that relies more on debt than we do on savings. We have weak capital markets, partially as a result of this. National’s Savings Working Group itself said that our foreign debt is too high, this makes us vulnerable, and our domestic savings are essential to try to redress that. Our investment needs to be funded from offshore because we do not have the domestic savings to provide those sorts of capital markets. Removing the incentive from KiwiSaver and reducing the likelihood that more people will be joining the KiwiSaver scheme reduces our domestic savings rate. So I would like to know, absent the incentive, what is the Government’s plan to increase New Zealand’s savings rate? That is the first point. The second point is around the loss of the incentive. I would like to thank David Clark for his contribution before about behavioural economics, which is a more recent evolution in economic thinking. The question here is: why would you take away the incentive? Absent compulsion—why would you take away the primary incentive? It is the one that most people know about. ANZ chief economist, Cameron Bagrie , said in this morning’s Dominion Post that he himself, the ANZ’s chief economist, would not have put his kids into KiwiSaver if it was not for the $1,000 incentive. So the $1,000 incentive is the most well-known component of the whole scheme. There are other incentives still contained in the scheme, as Mr Brownlee said, which include the tax rebate, the matching contributions, and so on. But, actually, my belief is that the Government would have been better off to cut or remove the tax rebate than the $1,000 contribution. That would probably have had more fiscal impact but it would have retained the $1,000 incentive. That is what people think of when they think of the incentive of this scheme. So, as far as I can work out, what you are going to see is a reduction in the number of people, or the percentage of people, who are taking up the scheme. So I would like to know what the Government’s response is to the loss of that incentive. How does it actually expect the same percentage or equivalent of people to continue to join the scheme, absent the $1,000 incentive?

[Continuation line: The third question is around the timing of the loss of the incentive]

JAMES SHAW

The third question is around the timing of the loss of the incentive. If, for example, you had said that this would take effect in 6 months, 12 months, or 2 years there would have been a window where people said “OK there is still an incentive but I have got to get in now or it is going to be lost.” Even if you had given it a week you would see a rush of people joining the scheme. One of the previous speakers on the Government side said “Well look, if people have not joined the scheme now what is the likelihood that they ever will? Given that we have had the incentive for all these years what are the chances that they are going to do that?”. If there had been a time limit and if my reading of behavioural economics is anything to go by there are a lot of people who are out there thinking, “Oh, yeah I will get to it one day but it is a bit complicated. It is a bit hard. I do not have enough money quite now. I will get to it. If you had left a window and said “Let us give this 6 months or 12 months and then the incentive would go.”, yes, it would cost you a bit more money but you would get that tail of people who just had not quite got around to it, but instead by cutting it off immediately there is no chance for people who were thinking about it but had not gotten to it to get to it. I would like a response to that please as well. The next one is about intergenerational equity. The current generation of parents with young kids who are working are paying for their kids’ education through the high tertiary fees and costs. They are paying for their own retirement because they know that by the time they get to retirement age there is not going to be enough cash in the kitty to give them proper superannuation, and they are paying for their parents’ retirements through taxation in the form of the existing superannuation scheme. The current generation of families who are working are getting squeezed in terms of paying for three generations at once. In removing this you are actually making it even harder for intergenerational equity to take place. I would like some kind of sense of what is your plan to redress some of the intergenerational issues that arise out of this. The fifth point is around the short term versus the long term. I think Labour have made this point very well and frequently already in the course of this debate, which is every time the Government gets concerned about its short-term books it relies on kicking the can down the road in terms of the long-term fiscal sustainability of the country. They cut the contributions to the superannuation fund in order to try and maintain the books now. Now they are cutting the KiwiSaver incentive basically balancing the books from New Zealand’s superannuation schemes and retirement schemes. I would like some sense of what your long-term plan is. How are you going to fix the long-term future rather than just deal with the short term? Those are my main points. What is the Government’s plan to deal with New Zealand’s savings rate? What is the Government’s plan to deal with the loss of the incentive that then happens and how do they expect the rate of take up to stay the same or even increase? What is the impact on the rate of take up of KiwiSaver when the incentive is lost? Why did they not consider a window to get people in who were thinking about it is the third point. The fourth point is around intergenerational equity. The fifth point is around the long term versus the short-term nature of this decision. There are five questions there that I would like answered during the course of this debate more bombastically or less bombastically as takes your pleasure. I would like to hear those. Middle to low income earners are struggling to save. We know that. Under National those who are saving are the people who really can save, that is upper-middle and upper income families. What this does is that this takes away the incentive and a little bit of savings for people at the bottom end of the pile, people who could not get $1,000 together. What is your plan for the impact on inequality that the loss of this $1,000 is going to have? We have got a number of Supplementary Order Papers, which will come up during the next part of the debate that are in relation to restoring or retaining the $1,000 kick-start for people who have got community services cards, which would deal with some of those issues. We have got the Kids’ KiwiSaver programme that we launched a couple of weeks ago with a progressive savings component to it, all of which are designed to deal with some of the issues that I have raised during the course of this. I just wanted to flag that we will be speaking to those soon. We have got some ideas about how to deal with some of those issues. I would like to hear what the Government’s plan is for dealing with those kinds of issues. Thank you.

[Continuation line: Fletcher Tabuteau]

KiwiSaver Budget Measures Bill

Speech - FLETCHER TABUTEAU (NZ First)

FLETCHER TABUTEAU (NZ First): If I could continue along the same vein as the previous speaker and bring some facts and some intelligent discussion rather than abuse into this morning’s proceedings. Let us take an example used yesterday, take a 15-year-old who is about to open a KiwiSaver account today. If they had done it before this $1,000 incentive was removed that $1,000 would actually be—and these are not generous calculations, they are quite modest—at the time of that person’s retirement given a 10 percent return, which is actually reasonable considering the annual rates of return of KiwiSaver funds at the current moment, over 50 years the calculations is about $117,000 to $145,000 at retirement.

Clayton Mitchell: How much?

FLETCHER TABUTEAU: It is $117,000 to $145,000 at retirement. I spoke yesterday about that we might be balancing the books in the moment. They might look like you are balancing the books now but what you are doing is robbing those sums of money from future generations. That range, like I said, is modest, and the multiplier effect on your annual returns, the compounding interest effect, is such a powerful thing. It has been spoken about in this House many times. Consider the reality out in the typical Kiwi household. The median income for a Kiwi is still less than $30,000 per annum. That $1,000 was not only a drawcard it was a real and meaningful sum of money. At the end of its investment life it was—it really was—going to make a huge difference in the enjoyment of life for those retiring. The Government has taken away $145,000 in real terms from our future generations, for those who would like to retire with some dignity, from every person who missed out on this retrospective piece of legislation. This Government’s vision stretches only to the end of today. Mr English is literally robbing our children’s piggy banks. This surprise bill opens up questions about up take, the impact on our national and individual savings, and, as mentioned already, the fairness, or lack there of, across generations. The advice given to the Government on this bill was, “The analysis has not focussed on the effect of policy options on national saving...” I will just repeat that, “The analysis has not focussed on the effect of policy options on national saving...”. Here we are talking about $1,000 contributing to national savings but the advice given to the Government, the analysis of the policy itself, does not take into account national savings. It beggars belief. In the first part they have admitted that they ignore the problems of savings and then they say “..the analysis is concerned with addressing the poor”—supposedly I would put—“value for money and target effectiveness (leakage) of KiwiSaver subsidies.” Apparently we are told that the value for money and target effectiveness of KiwiSaver subsidies just is not there any more. The $1,000 is not much of an incentive any more. I will come back to that. Earlier I highlighted that although $1,000 may seem like a small sum we are talking about people on the median income in New Zealand of less than $30,000.

[Continuation line: It is actually around $28,000.]

FLETCHER TABUTEAU

It is actually around $28,000. I know the National caucus will not understand what that means, but $28,000 and trying to save $1,000 from that—try to do that in a year. No, I do not think you could—I have been there; you cannot do it. Try to do that over 10 years, and, actually, you will not get a chance to grow your savings pool on the New Zealand median income, and the Government has now taken away that little incentive, that difference we spoke about last night and today—motivation for savings. Now the Government is taking it away. What the Government has not discussed is the future value of $1,000 at retirement age. I will say it again: $145,000. Consider those living in the regions of New Zealand—the productive heart of this country—who are currently not able to share in the wealth the country creates. Just think how hugely they will be affected by the removal of this incentive. Look at the unemployment rate in provincial New Zealand, remembering, actually, that an hour of work per week is measured or ticked in the employment column. An hour of work a week is considered as employed. It is 9.9 percent in Northland, 7.8 percent in my home region of the Bay of Plenty, and it goes on. On top of this the Government must acknowledge that regional incomes are well below the national average. What is the Government doing to our regions? It really is such a small amount of money now compared with the value that it presents in the future. I said yesterday that the supposed savings on the Government’s books today for every individual Kiwi still not signed up will save approximately $120 million a year for the first 4 years. As the fund reaches critical mass in terms of people subscribed, contributions will decline. So these miniscule savings are short term and short-lived. They are not actually saving this country anything at all. The Minister has received the incentive to save. Actually, do not think about the regions now; think about this in the context of Auckland. People are not going to save. That $1,000 was a real and meaningful incentive. People in Auckland are living day by day. The costs of living in our biggest city are just gigantic, and the Government has taken away the opportunity or incentive of Aucklanders to get into a savings scheme where they might have been able to subsidise their superannuation. It has taken it away. We have been speaking to Grey Power members, and they noted: “The axing of the $1,000 start-up boost for KiwiSaver contributors means that many New Zealanders will be much poorer when they retire as it removes a vital incentive for workers to join up and means more people will be dependent solely on their superannuation on retirement.” They go on further to say: “Many New Zealanders currently aged 45 to 65 do not own homes and those who do are actually still paying mortgages. They are on low incomes and are not enrolled in KiwiSaver. They are already facing increasing rental costs in a tight housing market made worse by the removal of many State houses across the country.” Even though many Grey Power members have missed out totally on the KiwiSaver programme they know that this Government is robbing from their children and their grandchildren. This bill does nothing for the children of this country in a time of Generation Rent, skyrocketing house prices, high student fees, and the loans that go with that. This bill is not fair or reasoned. I can expect soon that everyone will be automatically enrolled, with the rest of New Zealand made to compulsorily join the scheme. I suppose this bill makes compulsion cheaper. The cynicism is hard to take, to be fair. Thank you.

[Continuation line: Chris Bishop]

KiwiSaver Budget Measures Bill

Speech - CHRIS BISHOP (National)

CHRIS BISHOP (National): I quite like Fletcher Tabuteau, but I have to say that if I were a pupil in Professor Tabuteau’s economics class, I would be quitting and asking for a refund, because that speech was woeful. But I do like Mr Tabuteau. What a contrast it has been between last night and this morning. Last night at 5 to midnight the Government benches here were full. We had 30 or 40 Government MPs here backing our Ministers, backing this Budget, and backing these important bills that we are passing this morning and last night. There were only three or four Labour MPs last night at 5 to midnight. Something has twigged in the Labour Party overnight, and that is that Andrew Little’s leadership is in mortal danger. What do we see this morning? They have flooded the Opposition benches—[Interruption]

The ASSISTANT SPEAKER (Lindsay Tisch): Order! Order! I would actually like to hear what the member is saying.

Hon Annette King: Yes, but he should be talking about the bill.

The ASSISTANT SPEAKER (Lindsay Tisch): If I could hear what the member was saying, I would know whether he was talking about the bill.

CHRIS BISHOP: Thank you very much, Mr Assistant Speaker. I was making that point that when we were debating the KiwiSaver Budget Measures Bill last night, the contrast with this morning is very, very stark. The Labour Party twigged overnight that Mr Little’s speech in the Budget reply debate on Thursday was so woeful that his leadership is now in danger. The Labour members have had to come down here this morning for this KiwiSaver bill and flood the Opposition benches to hear another appalling speech from Andrew Little about matters that are important to the country. It was an interesting contrast between the Budget and with this bill, was it not? We had the members on the Government benches outlining a clear plan of action, including in this bill, and the members on the Opposition benches had nothing to say about the benefit increases the National Government is passing—absolutely nothing. The party of the dispossessed, the disenfranchised, the working poor, the workers, and beneficiaries—what did it have to say about the National Government’s increase of benefit levels? Not a sausage. It is disgraceful. Then the Labour members come down here for this bill and they cry crocodile tears about the prudent and sensible cuts that the Government is making to KiwiSaver—prudent and sensible cuts. Let us get some facts on the table: No. 1, there are 2.5 million people in KiwiSaver already. OK? That is fact No. 1—2.5 million people in KiwiSaver. It has proven to be very, very popular. When Michael Cullen set up KiwiSaver back in 2006, at that stage the prediction was that there would be 700,000 people in KiwiSaver. That target has been smashed—absolutely exceeded. It has been a huge success. It has been extraordinarily successful—far in excess of what the architects of the scheme would ever have predicted. But that leads to the second fact, and this is the second fact that is important to remember: No. 2, the $1,000 kick-start has been very expensive. The Government has spent $2.5 billion over the last 7 years on the kick-start contribution. So, at the time of the global financial crisis and the Canterbury rebuild, and at the time at which, as the members Opposite rightly and adroitly point out so often, we are trying to get the books back into the black, $2.5 billion is a decent chunk of change. The ongoing fiscal costs of that are also very expensive. It is very expensive and KiwiSaver has been proven to be popular. But what that means now—and this is the very important point about this bill—is that this is now a “nice to have”. It is not necessary. There are 2.5 million New Zealanders in KiwiSaver already. Let us not forget the existing incentives that remain to continue in KiwiSaver—the member tax credit of $521 a year, the employment contributions that employers are required to pay. So there are plenty of good reasons to choose KiwiSaver and we on this side of the House are sure that we will continue to have it. Members opposite cry crocodile tears and there are huge amounts of hyperbole about how we are taking the ladder away. Well, sorry, but removing the $1,000 kick-start for joining an already generous scheme that will provide for people’s lives in the long term is not taking the ladder away from somebody. Taking the ladder away might be opposing important changes to benefit levels like the first ones that have been made in 43 years. The party of the dispossessed and the poor has nothing to say about the fact it is the National Government that is actually making life better for those least well off in our society. Then we get to what Labour has promised and the schmozzle it has had in the last couple of days about its stance on superannuation and on KiwiSaver. Grant Robertson, in one line, spent $500 million of the next Labour Government Budget, which, hopefully, will never happen. In the unlikely event that it does, he spent $500 million in one line when he was asked on the Stuff chat website whether he would commit to bringing back the $1,000 kick-start, and he said yes. OK, that is fine—you can make that choice; it is the role of the Opposition to outline alternative fiscal spending plans.

[Continuation line: But that one line]

CHRIS BISHOP

But that one line, those three letters typed away—or that a staffer typed—on Stuff live chat—cost the Government $500 million over 4 years, and it is just in line with the Labour Party’s big spending agenda. You can add it to the very long spreadsheet that exists of Labour Party spending promises that Mr Cunliffe promised at the last election, that Mr Shearer promised at the election before that, and that Phil Goff promised at the election before that: the promise to start the Cullen fund contributions again, the promise to bring back Moroccan cooking course subsidies. Remember that? Remember when the Labour Party was outraged about the fact that we were making middle-class people who wanted to do macramé classes and Moroccan cooking classes at their local high school actually pay for it themselves as opposed to get money from the taxpayer to go and learn how to rub spices on chickens. How ridiculous! So we are going to add this very expensive promise to bring back the KiwiSaver kick-start contribution to the very long list of promises that the Labour Party has made. Labour members have absolutely no fiscal credibility whatsoever. They took us into recession before the global financial crisis. They left us with a decade of deficits. And now they have the temerity to come down to this House and complain about debt and complain about how we are not back into surplus. Well, their record speaks for itself. It is appalling and they should be apologising to New Zealanders for it. This is an important part of the Government’s post-Budget measures to continue this economy on its growth track and continue to provide support to the most vulnerable New Zealanders. It is telling that on a Saturday morning the Government is removing, essentially, a form of middle-class welfare, a “nice-to-have” but something that is not necessary any more. We are removing that and instead we are supporting beneficiaries and the working poor. We find ourselves in this weird parallel universe where the Labour Party is supporting $1,000 for people who, frankly, do not need it and are opposing more money for the working poor they have liked to cry crocodile tears about for the last 9 years. Disgraceful! [Interruption]

KiwiSaver Budget Measures Bill

Speech - CHRIS BISHOP (National)

The ASSISTANT SPEAKER (Lindsay Tisch): Order! The next call is a split call. [Interruption] Order! The next call is a split call. Jan Logie—5 minutes.

[Continuation line; Logie]

KiwiSaver Budget Measures Bill

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): I rise to take a call on the second reading of the KiwiSaver Budget Measures Bill. Traditionally in Parliament second readings are the time when we reflect on the select committee process, where we feed back what submitters have raised with the committee. After consideration and debate within the committee we reflect on those discussions in the House and the amendments to the bill that have happened as a result of that. Of course, because again this is happening under urgency, this speech is not able to be as fully developed as it would have been otherwise and the public have not had that opportunity to have input. So what I would like to focus on this speech are the few comments I have been able to gather from people in New Zealand through Facebook on their views on this initiative—yes, some actual submissions. That is what I am going to do in this speech. The first one is actually not necessarily disagreeing with the Government’s view and what it is doing here in this. This is an academic whom I know who is saying: “I am in mixed minds. I think it’s very disappointing they have further down-rated the incentive for people to save for their old age. But at the same time I’d be interested in seeing the demographics of those enrolled in KiwiSaver, to know whether the kick-start was effectively operating as a wealth transfer from the poor to the rich, in which case removing the kick-start would bother me less than if it was operating the other way. Now, I’d like to see that evidence from the Government so that actually this country and this Parliament can make a considered decision around that.” Some of the other comments from now on are a bit clearer on their view about this initiative. Brenda Pilott, ex-head of the Public Service Association , is saying: “It’s an inexplicable move. We’re told that it’s vital people create savings for their retirement and KiwiSaver has been a great success, partly due to this incentive. It makes no sense to cut it.” Another person, Jacob, is saying: “I feel like it’s making things harder for us future generations to save up for housing and retirement. This was a positive boost from the Government, which I saw as a good incentive to join but now I’m like ‘Why join?’ I might as well just put my money into a savings account and then I can use it when I want, however I want, and it won’t be there for retirement.” Another person is saying: “Before KiwiSaver was introduced I’d never saved a cent in my life. I decided to join because of the kick-starter and have now got a tidy wee sum accumulating every month and I feel proud of that.” So, the incentive, the kick-start, was an incentive for somebody to save for the first time in their life, and that is backed-up by policy advice from the Inland Revenue Department. Another person was saying: “They should have given 3 months for those of us who were halfway through the paperwork for our kids to have a chance to get this incentive.” So, the fact that this has been brought in without any notice means that some people were halfway through the paperwork to get this incentive for children and they have missed out. So again, as raised by my colleague, I would like to hear the justification for that. We have heard from Government members that “Two and a half million people”—I think—“have signed up. Really—how many more people are going to do it?” Well, some people were halfway through doing it. Somebody else is saying on that point again: “Glad I took advice from the bank when I opened up an account for my daughter. But I hadn’t got on to it for my baby. Gutted she missed out.” And one other person says: “Yeah, working for the people—ha? Note the kids these days just got set back yet another grand to buy that house they’ll never have because some old dudes in Parliament wanted a teeny surplus. Pathetic.” Another person is saying: “So this cut’s going to fund our $200 million fight against ISIS. What are you not telling us, John?”.

[Ms Logie, Please check the above quotations have been correctly transcribed. Thank you]

These are some of the views of New Zealanders and again we have been told by this Government that there is no choice but to do this if it is going to be fiscally responsible. It is interesting what it focuses on and what it is not focusing on in that discussion.

KiwiSaver Budget Measures Bill

Speech - JAN LOGIE (Green)

The ASSISTANT SPEAKER (Lindsay Tisch): The Hon Damien O’Connor—5 minutes.

[Continuation line: D O’Connor]

KiwiSaver Budget Measures Bill

Speech - Hon DAMIEN O'CONNOR (Labour—West Coast - Tasman)

Hon DAMIEN O'CONNOR (Labour—West Coast - Tasman): There is an old saying “Follow the money.” and so too with this piece of legislation, the KiwiSaver Budget Measures Bill . This country was built on capital from England coming into this country and we have been told for many, many years that we have been very poor savers. So, that terrible Tory Robert Muldoon destroyed what was a Labour Party initiative through the good work of Kirk and Rowling to build up a superannuation scheme and savings that would have given our country proper savings and proper investment funds. The terrible Tory Muldoon destroyed that and so too does this Tory Government intend to destroy the savings scheme we have. Michael Cullen brought in KiwiSaver, Kiwibank and the Superannuation Fund to offer us security in superannuation and to encourage savings that would have given this country real investment capital—and indeed that has occurred. But what we have got now is a Tory Government intent on destroying that savings ethic. It is not the $1,000 that has given real effect here to the cuts; it is the disincentive to the hundreds of thousands of Kiwis out there who have wanted to get into KiwiSaver. This will destroy that incentive. Why—well, follow the money. If we have, as we do now, a building capital fund to invest in our future, to take ownership of our own assets, we can control our own destiny. But I will tell you what. If you are a Tory, a money trader, or a traitor you do not want that. You do not want that. So what we have got is Jenny Shipley, Chris Tremain, and Don Brash in charge now of Chinese banks that are coming in to this country with trillions of dollars available to invest in New Zealand. KiwiSaver, the Superannuation Fund, Kiwibank are the only fair, honest New Zealand players to counter that investment and so what this bunch of terrible Tories is doing is exactly the same as Robert Muldoon did: undermining the ability of New Zealanders to invest in our future through a building capital fund that has real wealth and real capability.

[Continuation line: I think it’s an absolute outrage]

Hon DAMIEN O'CONNOR

I think it is an absolute outrage that they are taking from New Zealanders, from young New Zealanders, the incentive to invest in the future, not just in their own personal accounts but in the building of a capital fund that can invest in the value-added investment we need. In fact, we have got Ruth Richardson in the ANZ bank trotting around the country at the moment saying two things: firstly, that cooperatives are no good, so get rid of Fonterra; the second thing she is saying is that we need billions of dollars to grow this economy into the future. And who is going to provide that? Oh, your mate Jenny Shipley through her Chinese bank, your mate Chris Tremain through a Chinese bank, and Don Brash as well. The Tory Government in power now wants to undermine the growing focus on savings and investment from within this country. I think it is an outrage and I think this is a treacherous act that might seem on the face of it just fiscal responsibility. As the bill says quite honestly, this “will achieve significant fiscal savings”, but then it goes on to say a ridiculous statement that cutting back this $1,000 “will therefore improve the value for money of this KiwiSaver scheme.” This is about undermining the objectives of the KiwiSaver scheme. It is about undermining the savings effort of a country that has just started to realise the value in that. And the Tory mates in here and the ones out there are conspiring to ensure that we are fed a diet of foreign investment in capital rather than that built up by our own people for our own future. This is an outrageous piece of legislation, and I am sure Nick Smith is going to get up on his hind legs and say it is wonderful and justify what Jenny Shipley is doing, justify how you can take $1,000 incentive away from the young New Zealanders who want to own their own future.

[continuation line: Nick Smith]

KiwiSaver Budget Measures Bill

Speech - Hon Dr NICK SMITH (Minister for the Environment)

Hon Dr NICK SMITH (Minister for the Environment): That speech from Damien O’Connor was another speech that shows just how financially illiterate people are on the Opposition benches. Here is the line: you borrow to save, because the only way the Government, in the next year, would be able to provide the $1,000 kick-start is to borrow the money. The members opposite have got this sort of smoke and mirrors that if the Government goes and borrows money to save, somehow you are better off. That is a loopiness that reflects why they are on those benches and we are over here. The second point I wish to make is in respect of the issue of New Zealand’s net foreign investment position. I agree with Mr O’Connor that it is absolutely critical that we grow the net wealth of this country, but I want to invite the member to have a look at the Budget tables. What they show is that over the course of the years that Mr Damien O’Connor was in Government, New Zealand’s net investment position declined in every single year. In fact—

Hon Damien O'Connor: How much did you borrow, Nick?

Hon Dr NICK SMITH: In fact, Mr O’Connor, look at the figures for 2008 in which New Zealand’s balance of payments was a record worst in 50 years of minus 9 percent. Look at what New Zealand’s net investment position was when you left the Treasury benches, where we had reached the point of minus 100 percent of GDP, a figure that has consistently improved, and these Budget documents show that it is continuing to improve. Let us come to KiwiSaver. When I sat where Damien O’Connor sits, on the Opposition benches, the Government of the day said that it had a target that by 2015 there would be 700,000 people in KiwiSaver—700,000. Do you know how many people are in KiwiSaver now as a consequence of the changed savings culture? There are 2.4 million in KiwiSaver—2.4 million. So how can the members opposite bleat, whinge, and moan that we have not changed the savings culture of New Zealand when we now have 2.4 million, over three times as many—three times as many—as what the architect of KiwiSaver promised us back in 2007 when the scheme was launched? But I want to talk about broader superannuation issues. I listened to the radio yesterday and heard the Leader of the Opposition say that it is now Labour Party policy to means test superannuation. I was saying to myself: “Well, that sounds a little bit like policy on the hoof.” I could hear the jitters right through Labour’s ranks as it realised that its latest Leader of the Opposition had suffered a severe dose—

Kris Faafoi: This Budget is policy on the hoof.

Hon Dr NICK SMITH: I am sorry. Does that member support the means test for superannuation? Answer the question. Answer the question. Does the member support his leader’s statement yesterday that Labour wants to means test superannuation? You see, what we know is going on is that Andrew Little has a secret plan for New Zealand and he will not come clean. We found out yesterday. We got a window into his ideas for New Zealand. He has got a sneaky plan to change New Zealand superannuation, which I know in my electorate in Nelson will see the Labour support further plummeting from the lowest levels ever that it achieved in the 2014 election. You see, the problem is that members opposite know how to moan. They are quite good at it. They know how to whinge. They know how to criticise. But they are absolutely blank when it comes to a positive plan to take this country forward. It is illustrated by what has happened with the bills flowing from this year’s Budget. You see, it has criticised the support we are providing in our children in hardship package and then voted for the bill. But here is the contradiction. Members opposite cannot vote for a bill that provides for more support for New Zealand’s poorest families in one breath, then in the next breath vote against the changes that will enable us to fund that, and then in the third breath criticise us because the surplus is not big enough. Well, I am sorry, it is time for them to go back to prima 1 or year 1 maths. Your numbers have to add up. Budgets are about choices. We are making wise choices that enable us to support those families that are most in need, while at the same time being fiscally responsible. My very last point is this. I have heard in this Budget debate the whinging and moaning about the variation of the Government’s Budget figures that showed that over the last year, rather than receiving a surplus of 0.4 percent of a billion dollars, we have a deficit of 0.6 percent of a billion dollars—a variation of 1 percent. I would remind members opposite, before they give one of those chest-pumping, vein-breaking speeches about the evils of that, of what happened in Labour’s last Budget. It promised a surplus of $1.3 billion. It actually delivered a deficit of over $3 billion and was out by over $5 billion. That is, it was out by 8 percent in its numbers. Bill English was out by 1 percent. Members on this side know the definition of good fiscal management. We are the first OECD country to be back in the black. We have got increasing surpluses into future years—increasing surpluses into future years. That is a fiscal record to be proud of, and if any member doubts it, I just ask them to have a look across the Tasman, where last week the Government delivered a Budget with a $40 billion deficit—a $40 billion deficit—and deficits out into the next 3 years. That just illustrates how well we are doing. The final proof of the pudding is this. New Zealanders know we are doing well. That is why this month, for the first time—

Hon Damien O'Connor: No, they don’t.

Hon Dr NICK SMITH: No, they do not? Well, explain this. Why is it that for the first time in 20 years there are more New Zealanders choosing to come home than leaving? Are they wrong? They are absolutely right. They know that this is a country that is doing well, a country that has a plan, a country that has a Prime Minister and a Deputy Prime Minister who mean what they say and do what they say, as illustrated in this Budget. I am proud to be part of it and part of this bill, the KiwiSaver Budget Measures Bill, which is part of ensuring fiscal discipline and the right choices for our country.

[continuation line: David Shearer]

KiwiSaver Budget Measures Bill

Speech - DAVID SHEARER (Labour—Mt Albert)

DAVID SHEARER (Labour—Mt Albert): Would you really believe the numbers coming out of the head of that man, Nick Smith, the “Minister for Housing Inflation”? Here is a number for you: $800,000—$800,000. That is the average price of an Auckland home today and that has occurred under that man’s watch. So when he stands up and tells you about numbers, do not even believe it. The worst inflation in New Zealand’s housing history has happened under his watch. If there is a Budget that separates this side of the House from the other it is this Budget, and it is about “short-termism” versus putting something away for the future. This change to KiwiSaver is exactly—exactly—what I am talking about in terms of good fiscal management. It is about broken promises. Here is a promise I want to read out to you. Here is a promise I want to read out to you: “The $1,000 kick-start for KiwiSaver’s members will remain as it is now.”—will remain as it is now. Who said that in 2011? Well, the Prime Minister said that—the Prime Minister said that. It is another broken promise. This Government is going down the same track as its ancestors did back in the 1970s when Muldoon came in and killed the superannuation budget that was around then. He pulled it apart. People had accepted it. People believed and knew that that was going to ensure that their savings were protected and that New Zealand would have a pool of investment for the future. That pool, if that vandal Robert Muldoon had not pulled it apart, would have been worth $280 billion today—$280 billion. The big point about this is not just about the ability to save and to ensure that that is there for the people in the future. It is also about ensuring that that money, that $280 billion, is able to be invested into the New Zealand economy. It does not require us to sell off our assets. It does not require us to go into debt, and this Government has gone $70 billion into debt. It enables us to invest in our future with our own money. This Government axed that. It poleaxed that. Let us look at what has happened because, in the same tradition as the Muldoon Government and the same tradition of not looking at the future and looking at cynical, short-term, smart alec Budgets, what has happened here over the last few years is this Government has gone on and progressively cut and chopped KiwiSaver. Let us go back and have a look at what the legacy of this Government is with regard to KiwiSaver, because this is not the only time it has stepped in and had a chop at KiwiSaver and tried to vandalise it. The minimum member contribution—remember that? That was 4 percent. That got cut to 2 percent in 2009. It was a cut. There is the first one. The second one is the member fee subsidy. That was cut in 2009—another cut to KiwiSaver and the incentives of KiwiSaver. Here is a third one: compulsory employer contributions. They were cut by that Government in 2009. That is three—three cuts to KiwiSaver since this Government has been in power. Four: employer tax credits—cut. Employers no longer have an incentive. That was cut and taken away. There are four changes to KiwiSaver that this Government has brought in. Five: the member tax credit—cut by $500 to members who used to get that. That was back in 2012. The last one today that has happened under this Budget is the KiwiSaver kick-start—cut. One thousand dollars has been removed from future generations, which was given to those guys over there, for sure, and their families. They made sure that their families got their $1,000 before they stepped in and chopped it. They were making a big play over on that side of the House that, somehow, this is not going to affect the take-up of people in KiwiSaver. Let us face it; KiwiSaver is fantastically successful—fantastically successful. Two and a half million people in New Zealand have signed up for KiwiSaver. Two and a half million people have gone into that system so that they can start saving for their retirement. What does the Inland Revenue Department say about that? In its analysis, from people it has asked and the various surveys it has done, what does it say? Well, here is a fact. The Inland Revenue Department—a Government department—says that 67 percent of members joined KiwiSaver because of the kick-start. Two thirds of those people joining KiwiSaver voluntarily did so because of the kick-start. This Government—the vandals that it is, the “short-termism” that it is—has gone out and removed that and removed that incentive. It is like you have got a successful policy and what you do is you keep cutting and cutting it and cutting it and cutting it until it falls over. Then The Government will blame it on somebody else or it will not be in Government. It will leave it to us to actually have to fix up. This is a travesty. This is a Budget about “short-termism”, broken promises, and not looking out for future generations. But look, do not take our word on how stupid this policy is. Let us take the Financial Services Council’s word. The Financial Services Council, whose chair is Jenny Shipley, a former National Prime Minister, and what does it say? What does it say about this policy of cutting the KiwiSaver kick-start? Listen to this: “This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.” Let me read that again, just in case you did not get it clear. This is not coming from the Labour Party; this is coming from the Financial Services Council.

[Continuation line: “This is like a parent raiding their own child’s piggy bank to pay for a]

DAVID SHEARER

“This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.” Does that not say it all? It is about “short-termism”, looking at what is in front of you, smart alec, gimmicky little promises, and forgetting about what is actually happening further down the road for the future generations. “Raiding the piggy banks”—the council goes on to say—“of the next generation is not the smartest move when the population is ageing. It is a pity, that the Government’s failure to manage its own finances, will hold back some younger New Zealanders from better managing their own future finances.” In other words, not only is this stupid but also it sets an extraordinarily unfortunate example to everybody else out there who says: “Look out for yourself now because who knows what is going to happen in the future.” The issue about retirement policies is that they are about certainty. You invest in them now, hoping that everything will be fixed and right in 20, 30, or 40 years’ time. When every single Budget, this Government comes in and cuts, cuts, cuts what people have come to believe is their right—and they are putting in their money every week on the understanding that there is going to be some sort of next egg at the end and this Government comes in and cuts it and changes it every single time—then they have no confidence in it. Suddenly, we kill what has been a fabulous means of being able to save and being able to invest in New Zealand’s future. This Government is about “short-termism”, it is about broken promises, and it does not deserve to be sitting on that side of the House.

[Continuation line: Andrew Bayly]

KiwiSaver Budget Measures Bill

Speech - ANDREW BAYLY (National—Hunua)

ANDREW BAYLY (National—Hunua): It has been a perverse couple of days, I have got to say. We announced a policy of providing $790 million to the families in need—and it is a great thing to do for New Zealand families—and, yet, we have got an Opposition saying: “No, we do not want to support that.” Then we have got an Opposition that says: “We should not be removing this $1,000 subsidy for the KiwiSaver.” and that they want to support other people. Then, at the same time, we have got an Opposition saying that we need to be in surplus. The reality is, I just cannot see how the Opposition can make those numbers work. What we are doing is actually focusing on the people who really need it. That is why we are putting $790 million into a scheme that is going to support the people whom, normally, the Opposition want to support. We are the ones who want to care for them, we are the ones who want to respect them, and it is not only a financial package; it goes with all the other things that we are doing, such as the free doctors visits for children under 13. It is also about providing better housing for those families in need. It is about getting better outcomes for the children from those families in need, and that is why this Government is so focused on it. I just cannot understand why this Opposition wants to stop all of these good measures that support these families in need. It is disappointing; it is actually illogical. I just actually want to now turn to the KiwiSaver issue itself. As our colleague before just spoke of, the original target was to get 700,000 people into KiwiSaver. Luckily, and with good management and with setting the right parameters, we have got 2.5 million people in this KiwiSaver scheme—2.5 million New Zealanders who have invested in it. That is a fantastic thing and I think that we should be celebrating that. But what people do not understand is that there are still very strong incentives to continue to invest in KiwiSaver and to want to join that scheme. I point to the $521 per annum that will be paid automatically by this Government into everyone’s KiwiSaver account when they turn 18 or when they get a job—$521 per annum every year until they retire. The second thing is that there is now another strong incentive for people to want to join this scheme, and that is because we have introduced this package of housing measures—the KiwiSaver HomeStart grant package—which means that people should invest in KiwiSaver because they can access more money to get the first deposit to buy their first home. That is why there are still incredibly strong incentives to be involved in this KiwiSaver scheme. I now just want to turn to some advice we received from the other side of the House. I heard these strange figures. If you invested $1,000—and I presume that is from when you are born—through the compounding interest, I think the figure was that you would get to $140,000. I sat down before and did just a couple of little calculations, and I am just struggling to make it work. Let us assume that from year zero to 65 years old, let us say we are averaging a 5 percent per annum return. I realise that because of the wonderful management of the New Zealand Superannuation Fund, we are achieving 10 percent, but I have used the figure for the long-term run average of 5 percent. Actually if you used discount rates and things, you are normally worth about 6 percent, but anyway, at 5 percent, do you know what the figure is? It is certainly not $140,000. If you invested the $1,000 at day one , it would actually be worth about $23,600 over 65 years. That is just a far cry from what I heard from over on the other side. Look, the reality is, what we are doing with that $1,000 is diverting it to the people whom we believe need it most. I just cannot understand why anyone in this House would want to sit there and shout out and decry what this Government is doing. This is about a Government that cares about families, that has done concrete things to make it achieve those things that will improve the lifestyle of these people, create jobs, and give them the dignity and the respect that they deserve. I commend this bill.

[Continuation line: Committee stage, David Clark]

KiwiSaver Budget Measures Bill

In Committee

Dr DAVID CLARK (Labour—Dunedin North): I am very glad to speak to this bill because we are firm in opposing it. We believe this is a bill that is stealing from the future of New Zealand. We heard David Shearer in the previous contribution read out something from the Financial Services Council , which talked about robbing the kids’ piggybank to go down to the pub to buy a beer. That is the organisation that Jenny Shipley chairs. That is an organisation that is independent of this House, and it can see clearly that this bill steals from the future. So my first suggested amendment, of course, is to the title. I think that this bill should be called the “Stolen Futures Bill” because it is a bill that is stealing from future generations. In New Zealand we have a capital issue. We have had a capital issue for a long time. Treasury , in the 1970s , had somebody sitting at a desk trying to work out how to ensure that we had more savings. It still has people sitting at desks trying to work out how we can get more savings, and here we have the Government in a panicked measure—in a panicked measure—trying to balance the books because it has broken another election promise. It was the No. 1 election promise in all of National’s pamphlets—“We will get to surplus in the next Budget”. It is a broken promise. Those members are trying to patch it over. They are trying to make it look not too bad, but, actually, there is a billion dollars’ difference between how things looked last Budget and how things look now—a billion-dollar black hole has opened. Their way of getting there is, instead of reversing any of the early tax cuts that they made when they gave the top 10 percent 40 percent of the value of the tax cuts—no, they did not consider doing that—what they said that they would do is take out of the hands of future generations, out of the hands of children, a $1,000 KiwiSaver kick-starter. That is what constitutes vision now, from this Government. That is what constitutes vision. That is the big idea in the Budget—“Let’s take 1,000 bucks off the kids.” Well, that is shameful. That is no future. That is a “Stolen Futures Bill”. It is not a bill that should be called simply the KiwiSaver Budget Measures Bill . That is an Orwellian description of what is going on here. We know that this is National hitting the panic button, saying that it has failed to get to surplus for the seventh time in a row—in contrast to Labour’s nine surpluses in a row—and, with that, it is taking from the pockets of children. As I have said, the Financial Services Council is saying that this is money taken out of kids’ piggybanks to buy beer at the pub.

[Continuation line: Well, that is a pretty clear picture]

Dr DAVID CLARK

Well, that is a pretty clear picture. That is the stolen future, and that is what it looks like for Kiwi children and for Kiwi workers. In Australia, where they do have a decent savings set-up for retirement, they have got $1.3 trillion in the bank. That money is waiting for small-business people to come along, to invest it, to build their economy. In New Zealand, if Muldoon had not shut down a similar scheme we would have had hundreds of billions of dollars in New Zealand. National Governments before this one have lacked vision, but this one is in the pattern—this one is in the pattern. That is why we are opposing this bill. It should be called the “Stolen Futures Bill”. But I want to also suggest that it could be called the “Robbing Peter to Pay Paul Bill”. In this Budget the Government has brought in some measures to help those who are at the hardest end of things. Of course the Government made some big cuts in the 1990s, and this, in real terms, certainly will not compensate for those. The Government has done some good in Budget, and we want to acknowledge that, but we do not think that that good stuff should happen at the expense of those who are just a couple of rungs further up the ladder—those who are working hard, struggling to get ahead, and are having the money taken out of their pockets so that this Government can get to an imaginary surplus, which it will never get to if it does not have a vision. It will never actually get there if it does not have a vision. The Government is reliant on commodity price cycles. It has failed to diversify the economy. It has failed to get to the target of 40 percent of exports that it set for itself. Exports are now below 30 percent, and they are dropping. They have dropped from last year and are projected to drop further in the year ahead. That is because the economy as it stands currently is built on immigration and the money flowing in for the earthquake recovery. That is not the way to build an economy. Successful economies overseas have diversified. They have not robbed Peter to pay Paul. They have not taken money out of kids’ pockets. They have not taken money out of hard-working New Zealanders’ pockets in order to try to achieve an unimaginable surplus. The third title that I want to suggest might be more appropriate would be the “No Vision Bill”. The reason I think the title “No Vision Bill” is appropriate is that is exactly what it shows. This bill shows no vision. This is a Government that has no plan. It has panicked. If we needed any evidence of that, we could turn to the regulatory impact statement prepared by Treasury—paragraph one: “This regulatory impact statement has been prepared by the Treasury in consultation with Inland Revenue.”; paragraph two: “The advice was requested in advance of Budget 2015 and therefore has been prepared urgently.”—urgently. This was a quick fix because the Government was out of pocket; it was heading for deficit again. The Government did not even get to surplus, but thought it would have a go at robbing the pockets of hard-working New Zealanders and middle New Zealanders, in order to try to get close. Well, the Government has got egg on its face. Then if we skip down to paragraph four: “The analysis has not focussed on the effect of policy options on national saving as was the case with the KiwiSaver policy changes announced with Budget 2011.” The Government was short of time. It could not even assess what the impact of this was going to be. That is also stressed in paragraph five of the five paragraphs on the front page of the regulatory impact statement, where it says: “There has been only limited consultation because of Budget sensitivity and a likely behavioural response.” Treasury understands that incentives matter. This Government does not seem to get it. It claims to be economically literate, yet it does not even understand the advice provided by Treasury, which says that if there is no incentive, people will not sign up. If we needed any clearer examples of that, it is provided in the Inland Revenue Department’s final summary evaluation conducted over 7 years of the scheme—over 7 years. It is estimated that this scheme causes 36 percent additional savings—that is 36 percent of savings in New Zealand that would not have happened. KiwiSaver has initiated a savings culture, and that is thanks to the Labour Government’s vision back when the scheme was started. Thank you, Dr Cullen, is what they should be saying from those benches opposite—thank you, Dr Cullen. The reason New Zealand has savings is of course the Cullen fund and KiwiSaver. All that these people can do is chop it. They have made eight cuts to KiwiSaver. It is a Budget of no vision, and this is a bill of no vision. It should be called the “No Vision Bill” or, as I have suggested earlier, the “Stolen Future Bill”, or the “Robbing Peter to Pay Paul Bill”. There are many other names more suitable than the name the bill has been allocated. I want to ask members opposite to examine their consciences. I wonder how many of them took the $1,000. I wonder how many of them took the $1,000 in their KiwiSaver schemes—how many took the kick-starter—and how many of them are now going to have constituents coming through their doors, saying: “How come it was good enough for you? How come MPs, how come Ministers, how come National Government it was good enough for you to take the $1,000 kick-starter, and then pull the rug out?”. We know that in the next 4 years half a million Kiwis will miss out on this $1,000 kick-starter. Many of them will be on low wages. Many of them will be in their first jobs. They will be on $15 an hour, working part-time, because $1 an hour counts as being employed, under this Government. They will be saving $2 a week if they are lucky. A thousand bucks in your bank account is a good incentive. When you go up to $1,002 or $1,004—it may sound meagre to those National members but one thousand bucks is really a lot of money to people who are struggling to get by and who want to start thinking about their retirement. Starting out with two bucks in your account or four bucks in your account is pretty demoralising. But these guys are prepared to take that away. They are prepared to say that they are going to rob Peter to pay Paul. They are prepared to give up, and admit that they have got no vision for New Zealand’s future. They are taking money from those who are just one or two rungs up the ladder, in order to try to look like they are doing something for the hard end of town. But they made the cuts in the 1990s. They are the ones who actually caused the issues that they are trying to cover over now. We wonder whether the Government will ever get to surplus. It probably will eventually—it probably will eventually—but not through any vision of its own. The Government has made promises to get there sooner. It has so mismanaged the economy. It has failed to diversify in the good times, it has failed to promote new business opportunities, and here once again the Government is depriving the country of the opportunity to save, to have capital depth, and to encourage businesses so that businesses can access capital in those big KiwiSaver funds to promote New Zealand’s economy. The Government does not seem to have a vision for the economy. All it is focused on is breaking promises. John Key said: “We won’t put GST up.” It has gone up to 15 percent. “We will get exports to 40 percent.” That has not been done. “Pushing out the $7,000 wage increase for employees”—the Government is breaking promises.

[Continuation line: MARTIN]

KiwiSaver Budget Measures Bill

Speech - TRACEY MARTIN (Deputy Leader—NZ First)

TRACEY MARTIN (Deputy Leader—NZ First): Kia ora and thank you, Mr Chair. I will take just a short call on the KiwiSaver Budget Measures Bill—just around the title of the bill. New Zealand First would like to offer some more appropriate alternative titles. Let us start with the “I’m All Right Jack Bill”. This is a Government that has forced beneficiaries into budgeting services, so that they can better manage the little amount of money that they have, and that they must go into budgeting services when they go to seek food, because they are so desperate. This is a Government that does not understand the maths of its own Budget. This is a Government, a member of which stands up and says: “I actually can’t make the numbers work.”, and yet this is the bill it has put on the Table. Also, the reason why “I’m All Right Jack Bill” would be a better title for this piece of legislation is that every member in this House has a substantial contribution from the taxpayers of New Zealand to their KiwiSaver accounts. How about we did not have a look at cutting that. How about, instead of taking this incentive from the everyday New Zealanders who require it, from the young people who are going to come into the workforce—it is ongoing. To say that people are not going to sign up to KiwiSaver ongoing just does not make any sense, when we continually have young people growing up and joining the workforce. For goodness’ sake! Think it through before you bring legislation to the House. Here is another one. Here is another title—the “Chop Our Nose Off to Spite the New Zealand Public Face Bill”. No matter what, we are going to get into some sort of—and it is an artificial surplus. I will take a bet with you Dr Clark. I will take a bet. I will bet that this Government will not reside on those benches long enough to get into a real surplus—a surplus that is actually real. You and I—a bottle of lovely red wine that my husband produces. If I lose that bet, it is on you. Here is another title that we might like to consider, the “KiwiSaver Blind Ideology (Surpluses At All Costs, No Matter What it Does to the New Zealand Public) Bill”. How about that? Listen to the maths. I actually noticed that there was silence for a moment there when Fletcher Tabuteau, who knows that he is talking about, went away and did the maths. Mr Woodhouse has not done the maths, and neither has any other member on the backbenches.

[Continuation line: I would actually suggest, I thought it was very interesting]

TRACEY MARTIN

I would actually suggest that it was very interesting that Mr Bishop remarked how many members of the Government benches there were down here today in the daylight, actually talking or being around here for this very important bill, as they stripped away an incentive for the New Zealand public, from the young people who are going to come into the workforce and going to join that scheme. So I suggest that the New Zealand public go and have a look at 8.35, 9.35, 10.35, 11.35 p.m.—go and check out Parliament TV from last night and just tie that in with the comments that Mr Bishop made earlier today. Here is another title: the “KiwiSaver (I Don’t Know What I Stand For But My Whip Told Me To Vote For It) Bill”. This is what we have here. This is actually an incredibly important piece of legislation that has major downstream effects for the New Zealand family, whether it be through the economy side of the New Zealand family or for each individual New Zealand family, or each individual New Zealand worker. The downstream effects of this, of money flowing back into and New Zealand being able to invest in itself, the New Zealand family being able to back itself with its own money as opposed to seeking overseas money—this Government is very good at saying that New Zealand needs more investment. We agree. We would like to see New Zealanders being able to back themselves, and long term this is exactly what this fund has done. But not only has this Government decided to strip away the incentives at the start of the scheme for any young person who want to join up, it has decided that you can now rip your contribution out. Instead of the purpose the scheme was made for, you can rip it out and go and buy a house with it. So basically what the Government has done with regard to this bill is, again, it has removed its responsibilities and its obligations to manage the economy wisely. It has decided that it is going to put this back on to the New Zealand public, and the New Zealand public needs to be aware of it.

[Continuation line: Chris Hipkins]

KiwiSaver Budget Measures Bill

Speech - CHRIS HIPKINS (Labour—Rimutaka)

CHRIS HIPKINS (Labour—Rimutaka): This is where the Budget spin starts to become unravelled, because although the National Government in its Budget on Thursday proclaimed that it was going to do something for New Zealanders who were feeling left behind, for New Zealanders who were struggling to get ahead, the reality is when you break it down, when you get through the spin, this Budget actually penalises those people some more. So let us look at some real examples of real people who might be affected by the changes in this year’s Budget, and let us take someone who is on an unemployment benefit for the average amount of time. Bear in mind that despite all the rhetoric, people are typically on the unemployment benefit for less than 6 months at a time. You might not know that when you hear the rhetoric about the unemployment benefit, but the average person who has one is on it for less than 6 months. So let us assume that they are on the unemployment benefit for 6 months and they have children. They would benefit by about $650 from the changes that the Government has proposed to increase their benefit. Let us say that they then get a job and this is the first time in their life that they have a job with sufficient income to sign up for KiwiSaver, they lose a thousand bucks. That is the reality. So the National Government gives them $650 with one hand and takes $1,000 off them with the other. That is the reality. Break down the spin, go through it, and then you work out that actually they are not going to be better off; they are going to be worse off under the Government because it is giving a small amount with one hand and taking a larger amount with the other. That is the reality and there are everyday New Zealanders who will be in that position. When members on the other side of the House talk about beneficiaries, they only ever talk about the people who are on a benefit for a long time and they neglect to tell the public every time that the vast bulk of New Zealanders who rely on some form of benefit do so for a short period of time. It is a stop-gap measure for them when they find themselves in hardship, and this Government neglects to tell the public about that. It is happy to stereotype people living on benefits, when actually the vast bulk of people who are on a benefit are on a benefit for a short period of time. They will be penalised by this because they will lose the opportunity to get the $1,000 KiwiSaver kick-start, and I think that is wrong. I think it is wrong that somebody who signed up their child for a KiwiSaver on Wednesday gets $1,000 and somebody signing them up on Friday does not. That is simply unfair. It is unfair that the Government did not signal this. It was never promised in its manifesto. So New Zealanders had the comfort of knowing that at some point in the future, if they found themselves in a position to start joining up to KiwiSaver, that kick-start would be there. Had they known, had the Government had the decency to give them warning, they could have signed up and got the $1,000 kick-start. The Government knows that because if it did not, we would not be here under urgency backdating this legislation to Budget day and robbing all of the New Zealanders who are not in Kiwisaver of the opportunity to sign up and get the $1,000 kick-start. Let us just be clear here. The people who are in KiwiSaver now are more than likely to be in middle and upper income brackets. It is the people in the lowest income categories who struggle to get into KiwiSaver, and yet that is something that I know they aspire to. Aspiration used to be something that the National Party is proud of. Now, if someone is on a low income and aspires to be in KiwiSaver, they are kicking them in the guts by taking away the $1,000 kick-start that middle and upper income earners benefited from. This is another kick in the guts to people on low incomes and to future generations of New Zealanders. To the tertiary graduates, who will be leaving university or polytech or their apprenticeships and moving into full-time, fully paid employment for the first time, signing up to KiwiSaver—they have lost the $1,000. And, of course, we know that tertiary students continue to be hammered by this Government as well. It is simply unfair. The National Party hated KiwiSaver from the beginning. It was a package of measures that John Key called communism by stealth. Let us not forget that. When Working for Families and KiwiSaver were introduced by the last Labour Government, a Government, which I should remind people, produced nine surpluses in a row to National’s seven deficits—when we used those surpluses in the good economic times to introduce KiwiSaver to save for the future, to boost family incomes through Working for Families, to reduce the burden on students by interest-free student loans, John Key railed against those policies and called them communism by stealth. National hates KiwiSaver and that was absolutely evident from the very first moment it became Government. What did it do? When National first became Government it cut the member contributions. That was cut No. 1. It then cut the member fee subsidy of $40 per annum. That was cut straight away. It cut employer contributions. This all happened straightaway. It halved the size of KiwiSaver straightaway in its first Budget and it ceased to provide the employer tax credit. Those four cuts were all made in its first Budget. Those were the first of the KiwiSaver cuts made by the National Government. But then the Government came back in 2011 and it had another go. It halved the member tax credit in that year as well. This was yet another cut, and then it made further cuts to KiwiSaver, and now this is the latest one. Eight cuts all up this Government has made to the KiwiSaver scheme since it came into office. It is a Government that hates KiwiSaver. Yet Bill English knows in his heart of hearts, and they all know in their heart of hearts, that New Zealand still has a savings problem. Anybody looking at the wider set of New Zealand’s accounts knows that we are spending more than we are earning and that that has been the case for a very long period of time. KiwiSaver was one of the measures introduced to try to curb that, to try to get New Zealanders saving more. It was a good measure and it still is a good measure, and I am pleased it is still there. But we should be looking at getting more people into KiwiSaver and putting more money into KiwiSaver, because it is a key part of making sure that New Zealanders break even and make ends meet. We heard a lecture from Nick Smith about the Opposition not being able to get their numbers to add up. This Government has not managed to get its numbers to add up for 7 years, because if they did add up we would not be in deficit. For 7 years its numbers have not added up. The Government has been in deficit every year. What does that mean? It means borrowing. The Government has been borrowing every year that it has been in Government. It has been contributing to the problem of New Zealand as a country spending more than it earns. We have to deal with that, and Bill English knows in his heart of hearts that that is a challenge for New Zealand. So why is it that time after time he comes to the House and proposes cuts to one of the few things that we are doing that is designed to turn that round and to increase our savings rate? Then, of course, we have got the Government saying “Well, actually you can cash up your KiwiSaver for your first-home deposit.”

[Continuation line: That is something that the Labour Party has supported]

CHRIS HIPKINS

That was something that the Labour Party has supported as well. But is it not sad that we have reached that reality now where New Zealanders, even if it they cash it up, cannot afford to buy a first home. Those in the middle-income brackets who can are having to place a trade-off between saving for their retirement and buying their first home. I think that is a tragedy. I think it is a short-term stop-gap measure. It is good—it is a good way to get people on to the property-buying ladder, but long term we have got to look at other things. We have got to look at ways that people can own a home and save for their future. Furthering KiwiSaver by making sure that there are good incentives to join, by making sure that we are increasing contributions to KiwiSaver—whether it be through Government contributions, employer contributions, employee contributions and the like—will all make New Zealand a richer country in the long term. Instead, what we are seeing with the current Government is that it is content to manage things for today and not plan ahead for the future. So many of the things in this year’s Budget are designed to create the illusion of doing something, but they do not. When you break down the spin, when you look at it, they are not actually helping the people they claim to be helping. I want to just reiterate that point that I made that for somebody who is moving off and benefit and into work, if they have been on a benefit for 6 months—which is about the average time that someone is on an unemployment benefit—they would have benefited by $650 through the increase in benefits, and that is great. I think that they would enjoy that and I think that they would find that as a welcome relief. But when they finally get into work, they finally get to join KiwiSaver for the first time, and they find that not only is that $650 taken away from; another $350 is taken away as well because they lose the $1,000 KiwiSaver kick-start that they otherwise would have got. That is the reality. So let us break down the spin Give a small amount with one hand, take a larger amount with the other hand—that is the reality of what the current Government is doing. KiwiSaver is a good scheme. The kick-start has resulted in a whole heap of people joining KiwiSaver. Removing the kick-start penalises people who, for whatever reason—

Joanne Hayes: I raise a point of order, Mr Chairperson. The member is not even addressing the actual clause—the title.

The CHAIRPERSON (Hon Chester Borrows): The debate on this clause is wide ranging. It will continue to be wide ranging for some time yet. When we get into the other clauses they are much narrower, and so that will be enforced most closely.

Hon Michael Woodhouse: As I understand it, there was no leave sought for these clauses to be taken as one question, and traditionally in the Committee stage of the House the title part of the bill is at the end of the Committee stage, not at the start, which does, of itself, form something of a wind-up. But in this situation we are debating clause by clause—

CHRIS HIPKINS: 114/7—read it.

Hon Michael Woodhouse:—my understanding is that that requires the member to stick to that clause.

The CHAIRPERSON (Hon Chester Borrows): I do not need any further help with this. In spite of the unlawful interjection, I do draw the member’s attention to Speaker’s ruling 114/7. Because there was no select committee stage on this, the convention is that this is wide ranging. It will continue to be, no doubt, for both sides of the Chamber who may want to seek the call. Chris Hipkins has 20 seconds.

CHRIS HIPKINS: Thank you, and I intend to use every one of them, and I will be very brief. KiwiSaver is a good scheme. The kick-start was a good way to get people in it. We should not be penalising people who are not in it now but who aspire to join it. We should be encouraging them to join KiwiSaver. It is wrong that the Government is taking away this kick-start, and it is wrong that it has not foreshadowed that it intended to do so.

[Continuation line: Clayton Mitchell]

KiwiSaver Budget Measures Bill

Speech - Hon DAVID PARKER (Labour)

Hon DAVID PARKER (Labour): We have got a Minister of Finance who cannot merely not balance a Budget—seven deficit Budgets in a row—but he cannot address the long-term challenges of the economy. The greatest failure of the Minister of Finance and his offsider Steven Joyce is that after 7 years in Government the fundamental indicators of this economy are still going backwards. We have had reports from the likes of Paul Glass at Devon Funds Management in the New Zealand Herald recently showing how real, per capita GDP, when you strip out Christchurch, has been increasing at less than 1 percent per annum. So when you take out the effect of Christchurch and the effect of the huge, rapid increase in population caused by immigration, real growth is less than 1 percent per annum. The export target is trashed. The export target was to increase exports from 30 percent to 40 percent of GDP. This year exports have been 27.9 percent of GDP—

Dr David Clark: How much?

Hon DAVID PARKER: —27.9 percent, and next year they are predicted to be 26.4 percent of GDP and they do not get over 27 percent of GDP until the end of the forecast period. So much for the target of growing exports as a percentage of the economy. In respect of New Zealand’s net liabilities to the rest of the world as a percentage of the economy, as a consequence, they keep growing. New Zealand’s net international liabilities are currently about 69 percent of GDP. They grow every year from here on to 75 percent of GDP. When you have got long-term problems like that, you do not reduce your savings because the savings are the key to investment. Let us look at a bit of history here. When KiwiSaver was first planned, John Key said this—this is his release on 24 August 2006, and this is confirmation that National was right all along—“The scheme’s initial design lacked the incentives needed for people to change their savings behaviour.” We have heard from Dr Clark how the scheme has increased savings, but now we have got National reducing the incentives that John Key said then were inadequate. What has this Government done so far? First off, on 9 December 2008 this Government decreased the minimum contribution rate for members from 4 percent to 2 percent. John Key had already criticised it for being too low at 2 percent, as it happens. Then on 1 April 2009 the National Government cut the member fee subsidy of $40 per annum. Then the third thing it did was to change the compulsory employer contribution and capped that at 2 percent as well. So it cut the employer contribution. Next, it took away the tax credit that applied to the employer contribution. That was cut No. 4. The fifth thing it did was to reduce the member tax credit. It halved it from $1,042 to $520 per annum. Then, the sixth thing it did was to change the taxation treatment of the employer contribution, to the detriment of savers. The seventh thing it did, having cut the contribution rate, was to increase it from 2 percent to 3 percent, so it reversed its reversal. Now we have got it doing away with the $1,000 kick-start contribution. How does this work in practice? The Government says that this is going to save $500 million and it will. It is removing $500 million of incentives for the scheme. What is the effect of this? I will give you a real example of this. This is the example of my daughter. She is in a middle-class family, she is not hard-up, she is a 15-year-old, and she has got a job working in a cafe as a waitress. She gets a $1,000 kick-start payment because she signed up recently, and she adds to her savings by about $2 or $3 a week, and she follows that. Look, if you are a young person, and you are starting at $2 or $3 a week, and after the first few months you have got less than 20 bucks, it seems like nothing—it seems like nothing. If you are a part-time worker, as most young people are when they first enter the workforce, and you are saying that you want to encourage them to get a savings habit for a lifetime, and they are saving at $2 or $3 per week, it really seems like nothing for the first few years. But because of the incentives in the scheme currently, she sees a balance of $1,002, and then $1,004, and then $1,006, and she feels really successful and that she is embarking on a savings pattern that will see her right for life. And it will. Everyone else who is in that situation will be so much better off when they get to the age of retirement if they have started to save. But now a lot of those kids, instead of having a $1,000, which will grow by a small amount every month or week that they get paid, they are only going to have that small amount. This is stealing from the next generation in order to get to a make-believe surplus. That is what this is—it is. This is in the face of dropping exports, rising international debt, and the failure of the Government to make its own targets.

Hon Todd McClay: Why wasn’t the speech yesterday as good as this one?

[Continuation line: Parker: What is that?

Hon DAVID PARKER: What is that?

Hon Todd McClay: Why wasn’t the speech yesterday as good as this one?

Hon DAVID PARKER: It was better than this. It was better than this. The record of the Government in every area of superannuation, and the record of the Government in savings and superannuation is worse on every front. Do you know, it canned contributions to the New Zealand Superannuation Fund —the New Zealand Superannuation Fund, which Bill English, when it was set up said it was a dog. Those are the exact words he used, only to be embarrassed last year at the 10th year anniversary when he turned up and celebrated it as being one of the best sovereign wealth funds in the country—in the world, in the world. It is the only one in the country of any significance but it is one of the best ones in the world. Do you know what happened in the meantime? In the meantime the Government ceased contributions in 2010 at a time when the world’s interest rates were at the lowest than they had been in many generations. It said: “We are not going to incur that small amount of Crown debt at historically low interest rates to invest.” Well, what has happened to the superannuation fund since? Well, you know, the Guardians of New Zealand Superannuation estimate—this is not controversial—and show their rates of return every year and they show how much would be in the fund if the Government had made these contributions. The capital contribution is $16.3 billion worse—New Zealand is $16.3 billion worse off—than if it had contributed to the scheme as it was meant to do. On every front the Government gets it wrong. Then members on the Government side pretend that they are good managers of the economy. Why did they get cleaned out in Northland? Why did they get cleaned out in Northland? It is because the people know that that is just rubbish. That is rubbish. Exports as a percentage of GDP are down. They have got no long-term plan. A good Government builds a country. Everywhere you look they cannot build a country. They cannot build a country metaphorically; neither can they build a country physically. They do not know how to build houses and they do not know how to build an economy. They tear away at the foundations of future growth. They did eventually get to the point—and the Minister was good enough to say this in his introduction—of saying that KiwiSaver is a good scheme that they still believe in; just not enough to keep it working properly. This sort of short-termism is awful: no solutions despite the fact that their own Budget documents released just this week show exports dropping this year and next, never getting much over 27 percent, never hitting 28 percent of GDP to the end of the forecast period. Look at them. They are quiet now. They know that they have not met their target of raising exports to 40 percent. It is a failing Government: no ideas on exports, no ideas on exports. Debt is rising. New Zealand has got high international liabilities and yet those keep rising too, because we do not cover the costs of our imports and our interest bill and our outgoings for dividends through the value of our exports and our overseas earnings. As long as we have got a Government that will not invest in production, that trend will continue.

[Continuation line: Bishop]

KiwiSaver Budget Measures Bill

Speech - CLAYTON MITCHELL (NZ First)

CLAYTON MITCHELL (NZ First): Just on the point of order that was just mentioned before by Mr Woodhouse, I think I will start with the naming of this bill. I think this Government loves to use acronyms that confuse most of us out there in the real world who understand what the real world is about. I have got acronyms here that I think sum up this piece of legislation: the “OMG YOLO #nofuture Bill”. I know everybody back home, the younger ones particularly, will totally get what I mean, because this bill gives no future to our New Zealanders who need this future the most. I have many times stood up in this Chamber and said that New Zealand First is not in the game of opposing bills that the Government puts forward if they make sense. If there is any sense to a piece of legislation, New Zealand First will support it.

Matt Doocey: Sit down then. Sit down.

CLAYTON MITCHELL: Just to that, Mr Doocey, let me say that we supported the Telecommunications (Development Levy) Amendment Bill yesterday because that makes sense. This bill, however, we could not even remotely get the furtherest, wide-ranging view to come up with any conclusion that this is good for the future of New Zealand. This bill is absolutely against what this country should be standing up for: the people’s future. In 2006 the Labour Government came up with the KiwiSaver legislation that kick-started Kiwis off to get them thinking about their future with a $1,000 kick-start incentive. I took advantage of that, and I am sure everybody on the other side of the benches took advantage of that, even if they were not in politics, because it made sense to. It does not matter what compounding interest rate you are going to be using there, Mr Bayly. Whatever that is, whether you want to make it 5 percent under your calculations and say it is going to be only $24,000 or if we are going to be using 10 percent—and, let me remind you, 10 percent is conservative at the moment, when the AMP KiwiSaver investment scheme is averaging out at 16.8 percent at the moment. I know this because I have just changed mine into a bit more of a dynamic fund. If it is getting 10 percent, it is going to give you a heck of a lot more. That is $100,000 to $145,000. You are taking money away from Kiwis. It is short-sighted for the future of New Zealand. I have to say, Mr Bayly, that you can justify it by saying that even $23,000 is not enough. I dare say that when you retire at 65 years old, $23,000 will go a long, long way. We have heard from people emailing and calling us over the last few days—I would love to say I had got some faxes, but we do not have fax machines anymore. We have actually moved into the 21st century.

Iain Lees-Galloway: Really?

CLAYTON MITCHELL: I do not do the fax thing, no, Mr Iain Lees-Galloway. My father does, and if he could, he would send me smoke screens—you know, he does not even text. The point is that we have had Grey Power come and speak to us with some serious, serious concerns. This population that we are currently living in is like an hourglass population. There is a very, very bulbous population of ageing people at the top, a very, very skinny working class of people—those who are actually of the age to work—and a very, very large bulbous group of young people coming into the workforce. The point is that if we are not thinking long term now—I know Mr Matt Doocey you are trying to create your perfect wife there, but this is a very serious curve that we are talking about. [Interruption] I apologise to the people back home who just got an earful with me hitting the microphone. But, seriously, if we do not start thinking about the future and get this Government to rethink about this legislation and the way that it votes, we are going to have this population who are now currently working out starving on the streets with very, very little money to support them. I am sure, Mr Chair, that you have got some investments that would make—

The CHAIRPERSON (Hon Chester Borrows): Do not bring me into this.

CLAYTON MITCHELL: I apologise. The point is that if we do not think about the future of our New Zealanders now and bring this legislation back into the fold, then we are going to have some grave concerns for the future. I have to say I had another phone call from a gentleman who is a constituent in Tauranga who has also contacted the local Minister from Tauranga to put his concerns forward. He was right in the very stages of signing up his three children aged 4, 6, and 9 years old to the KiwiSaver programme—we are talking about filling out the forms to get them sent in. But this retrospective piece of legislation, which takes effect going back to Thursday of this week, stops his ability to be able to get his children signed up to it. In fact, it was just last week my wife and I were talking about the same thing for our three young children—that we should be thinking about getting them signed up. The reality is how many New Zealanders are missing out because of this quick fire from the hip, shooting out the legislation, pulling the carpet from underneath their legs and not giving them the ability to get themselves into it and the time that they require to ensure that they have got the means to actually put that into place? Two years would not be unreasonable. When you look at all the legislation that is coming through now and the 2 to 4 year time period of what the Government talks about with the implementation of legislation, that would not be unfair. In fact, there is a Supplementary Order Paper on the Table today by Mr Fletcher Tabuteau that actually, if it could get support, might be a little more palatable than cutting the legs off before we have got the chance to actually speak to it. We strongly hope that this Government reconsiders this motion. To that end, we understand the fiscal constraints of any Government. This Government, with its bad budgeting over the past 7 years, is clearly having some issues with getting the books to balance up, so we understand that some cuts need to be made.

[Continuation line: But it is a zero sum gained]

CLAYTON MITCHELL

But it is a zero sum gained. When you are giving $25 a week to the people who need it the most—and, hey look, at the end of the day, a little bit helps; I do not think it helps enough, I think GST off food would help far more of our poor, starving, and impoverished people than giving them a $25-a-week handout. Taxing food, to me, is just obscene. But at the end of the day you have given that forward, and well done for that. But at the end of the day taking it away from their future is absolutely crazy thinking. I would like you to reconsider what you are doing there, because if you even thought about looking after the fiscal constraints and reducing the $1,000 kickstart to even $500 in 2 years’ time, we could probably understand that, hey, decisions need to be made. But what about the uncollected taxes? Again, I will give the credit to the Government where credit is due: in the latest Budget coming out now you have just put in $74 million to increase the ability and the money so that we can actually go out and get the tax that needs to be collected. Twenty-nine million dollars of that, 40 percent of that $74 million increase, is going to specifically be targeted at those people who are using their housing schemes, their residential properties, to increase the tax that we can get loading. The rest of that money should be going into corporate tax evasion. When we have got the very wealthy—we are talking about the people who have got hundreds of millions of dollars in this country, who are gloating that they only pay 12 to 15 percent tax when the rest of us are paying more than our fair share. And why should we not be, because we owe it to society. The money that at the moment is sitting in the red is about $7 billion—$700 million in uncollected taxes, which, if this Government spent some of that money to go and collect, we could actually afford to do both. Twenty-five dollars a week as well as a KiwiSaver kickstart programme makes good sense, good economic sense for the now, good economic sense for the future. We do not support this bill in its current form, and we would like to see this Government change the way it is thinking about the future of New Zealanders. Thank you.

[Continuation line: Kelvin Davis]

KiwiSaver Budget Measures Bill

Speech - KELVIN DAVIS (Labour—Te Tai Tokerau)

KELVIN DAVIS (Labour—Te Tai Tokerau): I would just like to take issue with my own colleague, Chris Hipkins , because towards the end of his speech he said that KiwiSaver is a good scheme. Let me tell you this, KiwiSaver was a good scheme. It was a good scheme in 2006, when Michael Cullen had the courage to set up a far-reaching scheme with a vision for the future, and instead what has happened? All we have seen is KiwiSaver, under this Government, get cut, cut, cut, cut, cut. Eight cuts we have heard of today. There was the minimum member contribution cut. That has been taken. The member fee subsidy—that has been cut. The employer tax credit—that has been cut. Compulsory employer contributions—they have been cut. The member tax credit—they have been cut. And now the $1,000 kickstart—that has been cut. We have a member on that side of the Chamber saying they will still be able to get $521 in annual payments. I just query how long before that $521 a year is also going to be cut. The KiwiSaver scheme has been absolutely gutted. The Government lacks vision. They lack courageous policy. The KiwiSaver policy was far-reaching. It was going to help our generations into the future, and that is why I say that this bill should be named the “Dismantle Our Children’s Future Bill”. It is just dismantling the future so that people can scrape by in the present. It is doing nothing at all to look after future generations. This is terrible. We had Nick Smith sitting over there. He was throwing figures around, facts and figures. He is trying to make himself sound intelligent, and then he says that New Zealand is the first country to get into the black. I was sitting here, and on Thursday I am sure I heard the Minister of Finance say that we are still in deficit. I am positive that is what I heard. Two days later, Nick Smith is standing up and saying we are in the black. He does not even know his colours, let alone his figures, and that is why I resent that party over there standing up and saying that this side of the House does not know what we are talking about when it comes to the economy. It is an absolutely shameless distortion of the truth to hear these people say that they know what is good for the country. They have absolutely gutted KiwiSaver. This bill should be called “The Money-Go-Round Bill”, because all they are doing is taking from this side and giving it over here. There is absolutely no long-term vision. This is just about living in the present. The difference between our side of the House and that side of the House is that we do not live in the present; we live in and think about the future. We think about the future and our kids, and we know that there are going to be more good moments in the future, not just living here and thinking about this moment in time, just to make ourselves look good in this moment in time. It is about thinking about the future. Working for Families was thinking about the future. And, as we have heard, John Key was the man who said this is communism by stealth. That party over there is taking credit for our policies. That party over there is taking credit for what this side of the House did, those years ago. KiwiSaver—they are saying it is 2.5 million people are now on KiwiSaver. And it is just more popular than ever—well, it is more popular because it was a courageous policy from this side of the House, and now they are taking credit for it. Because they live in the past; we think about the future. They are taking credit for what the last Labour Government did in 2006. That is because Labour always thinks about the future. Labour thinks about what we are going to do to make the country better off in the future. These guys are just worrying about the next Budget. Five hundred and twenty-one dollars a year—I would say that is going to go, in the next Budget. And we are going to have nine cuts to the KiwiSaver policy. They are just making things worse for the future. They have absolutely no idea about how to make the lives of our children better off. This is a panicked, knee-jerk reaction—

[Continuation line: Jacinda Ardern]

KiwiSaver Budget Measures Bill

Speech - JACINDA ARDERN (Labour)

JACINDA ARDERN (Labour): This is our opportunity, in this part of the debate on the KiwiSaver Budget Measures Bill , to talk about what we believe this bill should be called. The most obvious thing, from my perspective, is that if this bill was really speaking the truth it would be called the “Widening Intergenerational Inequality Bill”. It feels like Groundhog Day , for me to be in this Chamber yet again debating another measure to cut the savings base for New Zealanders in this country.

Chris Bishop: It feels like that for you? I feel like it’s me.

JACINDA ARDERN: I still remember, Chris Bishop , my very first Budget in this House , where that Government made substantive changes to KiwiSaver . I vividly remember walking outside the Noes lobby and seeing Michael Cullen sitting on the couch outside there, with this absolutely devastated look on his face. All of the work that the Labour Government had done to build up savings in this country, to make sure that New Zealanders had a nest egg that meant that they did not just scrape by on a pension but had quality of life in their old age—in one fell Budget, that Government gutted it. I remember that Budget to this day. That Government has done it eight times since, and that has just been during my time in this House. That is not to mention what that Government did under Muldoon to devastate the potential that we had in New Zealand to have a massive savings base. We talk about the gap between New Zealand and Australia—that is when that gap started. The Australians made the sensible decision to have a decent superannuation scheme across the entire population, and we had that opportunity under Kirk . But, once again, National demonstrated its short-sighted approach when it comes to savings, and they gutted it. They absolutely gutted it. Everything we have been doing since then has been trying to regain that ground, and, again, here we are, with another demonstration of the fact that that Government is absolutely disinterested in what it is doing for future generations. It is not just on savings. It is on housing, where we have a generation of renters. It is on education, where student loans are mounting for the next generation. And it is even on things like climate change. If that Government wants to prove that this bill is not about intergenerational inequality, that it is not about them having more than what the next lot will get, I challenge just one of them to stand up and say they did not take the $1,000 KiwiSaver kickstart themselves. Because that is what we are cutting today: we are cutting something that I would almost guarantee every single one of the MPs on that side of the Chamber took up. We did—we did.

[Continuation line: We put it out there and said it is for everyone]

JACINDA ARDERN

We put it out there and said it is for everyone who joins. Did that side of the Committee do the same? I challenge just one of them to say they did not, because if all of you did, then you are absolutely depriving everyone else of something you benefited from. I also challenge members on that side of the Committee to stand up and tell us—give us a guarantee—that you did not tell your kids to sign up before you took it away, as well, because that is what we are debating today. This bill will stop anyone else from getting that $1,000 kick-start contribution that we know so many would have taken. In my short time available I also want to point out that this bill starts from the time the Budget was passed, and, yet, how long are we waiting for $25 a week to go to beneficiaries? It is not happening until next year. So we take immediately and we leave everyone else to wait until they can gain that, kind of, small amount of money. This is a bill that should be renamed the “We Choose Sticks Instead of Incentives Bill , because this bill was always about incentivising people to join KiwiSaver . But we know that that side of the Committee never wanted people to join. And where is the evidence of that? Well, I have got a little article here from the New Zealand Herald , dated 1 March 2006. When Michael Cullen introduced the idea of KiwiSaver, he said it was his aspiration that 25 percent of workers would join it, and things like the kick-start contribution were there to motivate people to do it. What was the National Party’s response to that? The National Party member’s response to that was to say that they thought he was dreaming. They said in 2006 that Michael Cullen was dreaming that people would join up at a rate of 25 percent. Well, how many do we have now? We have 2.5 million people in this scheme. That Government never wanted Kiwis to have KiwiSaver.

[Continuation line: Hon Annette King]

KiwiSaver Budget Measures Bill

Speech - Hon ANNETTE KING (Deputy Leader—Labour)

Hon ANNETTE KING (Deputy Leader—Labour): I have to say we started off this morning with a very spirited debate from the members opposite defending the indefensible. I have to say it was such a good start that the Minister who is in charge of this bill, the Hon Todd McClay , did not know he was in charge of it and tried to move it in somebody else’s name. We have had to listen this morning to National members sitting opposite crowing about how great they have been to beneficiaries, and the payback is because they are going to take it off KiwiSaver . They said: “We are the first Government in 43 years to give money to beneficiaries.” What they forget is that they were the first Government in 43 years to cut the benefits to beneficiaries—to cut the benefits to beneficiaries. They have forgotten about Ruth Richardson and the “mother of all Budgets” . That has all been glossed over. When we brought in Working for Families , that was communism by stealth. Have they got rid of it? No, they have not. They just fiddle around the edges of it. When we brought back income-related rents that helped those on the lowest income, they opposed it. When we brought in 20 hours of free early childhood education, they opposed it. The one that I really like, because we have had to listen hour after hour to Paula Bennett on it, is that we kept the training incentive allowance to help people get off the benefit, and she took it for herself and then canned it. This is another example of National members taking what they can for them and taking it off others. That is exactly what is happening with KiwiSaver today. I wonder whether National has any idea of how many people under 18 have signed up to KiwiSaver. The latest figure we have got from 2013 is: 352,600 young people under 18 have signed up to KiwiSaver. So we have got young people signing up. Why were they signing up? Not because they were necessarily in work; most of them were not. They signed up because they had the incentive of the $1,000 that was going to be there for them to build on when they became KiwiSaver contributors. They had the $1,000. But what National has forgotten is that there are going to be more babies born. It is just a fact of life. There is going to be about 60,000 children born every year in New Zealand in the foreseeable future. They might have wanted to join up to KiwiSaver. Maybe their parents might have liked to join them up to KiwiSaver. I challenge the members opposite—just one of them—to say that they did not sign their children up to KiwiSaver. Well, I wonder whether the member himself took the $1,000 for KiwiSaver. Would he like—he cannot remember. Well, that is always a sign that you did.

Hon Michael Woodhouse: I did.

Hon ANNETTE KING: So he cannot remember. Oh, he did take it. So why would a Minister in the chair take $1,000 for himself and deny it for future generations, for our kids, for those who have not yet joined KiwiSaver? It is a pretty mean-spirited approach. Government members say we have to do this to pay for the beneficiaries. Are we not generous? Well, just go back and think, National members. If you had not given billions of dollars away in tax cuts to the wealthiest, which included everybody in this Committee, you would have money to give to beneficiaries, you would have money to invest into our regions in New Zealand, and you would have money to invest in jobs. But you saw that you ought to give it to the top 10 percent of New Zealand, and then we did not have the money for beneficiaries. We did not have the money for health. We did not have the money for a whole lot of things. I wonder whether the members opposite can remember the promises their party made in 2008. I have to say, you are meant to believe the word of a Prime Minister. The Prime Minister then in Opposition said they would retain the policy. There would be no radical changes to this policy. So there were eight cuts to the KiwiSaver scheme in the 7 long years they have been in Government. That is one for every year, and that is on a solemn promise that they would not change this scheme radically. I have to say, I would actually rename this bill the “’Fess Up to Chicanery Bill”, because that is exactly what this is. It makes promises and then breaks them. You tell the people you will do one thing and then you do something quite different.

[Continuation line: Hon Michael Woodhouse]

KiwiSaver Budget Measures Bill

Speech - Hon MICHAEL WOODHOUSE (Minister of Immigration)

Hon MICHAEL WOODHOUSE (Minister of Immigration): I find myself drawn into the debate in a way I did not quite expect, simply by putting up my hand and saying that my own children are not in KiwiSaver but I am. That is fair enough. Yes, I thought, as the chief executive of Mercy Hospital in Dunedin, that all of my staff, regardless of whether they were doctors at the top end of the salary scale or our lower skilled workers, should take up KiwiSaver, but the question and the thesis we have now is whether or not the incentives have been destroyed. The simple challenge that the members opposite have made is that every single member of the National caucus should give the $1,000 back. So here is my challenge to them: if they are so principled about the changes that this Government has made, I want every one of them who are currently paying the 39 percent top marginal tax rate, when they do not have to, to put their hands up—but they oppose that tax cut. So if they can say that they refused the benefits that this Government imposed, that they were so principled that they continue to pay the 39 percent top marginal tax rate, I will pay my $1,000 back. I will write the cheque today, because what is good for the goose is good for the gander. I want to come to Mr Tabuteau, because Mr Tabuteau is the one sensible, rational New Zealand First member who has half an ear on economics. I understand he lectured in economics, but he is very tricky about those numbers. I, like Mr Bayly, the very smart fellow chartered accountant on the National caucus, was fascinated by the use of the 10 percent rate of return. What is really interesting is that if you do get the excel spreadsheet out and calculate the future value of that lump sum, using a 10 percent hurdle rate, in the 50 years that Mr Tabuteau described, between the 15 years and 65, it is, indeed, nearly $118,000. Except what Mr Tabuteau forgot was that people have to pay tax. Maybe he does not, but that 10 percent rate of return is a gross return. We know that the long-run rate of return in investment schemes is not 10 percent, because there are hard times, not that Mr Cunliffe would have told you that when he said that we should have been borrowing to invest in the New Zealand superannuation scheme. He never said that. In fact, if he was such a genius about how to predict the market, why, in 2007, did he not trot along to the good Dr Cullen’s office, knock on his door, and say: “Guess what, Mike? I think the rates of return are going to drop. We should pull out of those equities and go into fixed interest before the super scheme plummets.”?

[Continuation line: The simple fact is we cannot]

Hon MICHAEL WOODHOUSE

The simple fact is we cannot. Over 50 years there are good times and bad times. So the long-run rate of return at an after-tax pay rate of, say, a generous 6 percent in those 50 years is $18,000. It is not to be sneezed at but it is not $118,000.

Hon David Cunliffe: You’re a medical doctor, not a PhD.

Hon MICHAEL WOODHOUSE: I am a chartered accountant, Mr Cunliffe. Here is what else he did not say. The future value of the $175 million annuity, which is the investment the Government would have to make if the Labour Opposition kept it, and that is fine they have that prerogative to campaign on that, at the same 6 percent rate of return is $54 billion. So we take away the $18,000 future value of that initial investment and we burden those 15-year-olds with an extra $54 billion of debt because we do not have cash in the bank to pay that $1,000. We would have to borrow it. If we use the Government’s average interest rate of about six percent that is an extra $54 billion burden that this Opposition would have us have. They only know how to borrow, spend other people’s money, and tax. Just remember, they know how to tax people but they are not so principled that they would pay the 39 percent marginal tax rate. I will get my cheque book out and I will write that $1,000 cheque when one of them—one of them—can demonstrate that they are paying a 39 percent marginal tax rate.

[Continuation line: Mr Chair: Order! Order! It is going to be a long day.]

KiwiSaver Budget Measures Bill

Speech - The CHAIRPERSON (Hon Chester Borrows)

The CHAIRPERSON (Hon Chester Borrows): Order! It is going to be a long day. I note that last night we were tired and giggly. Today I would like us not to get tired and scratchy. I can assure the members on my left that I heard their cunning and clever interjections the first 15 times they repeated them. Just remember the directions of Speaker Hunt that interjections are rare, reasonable, and hopefully witty. I look forward to those colourful comments through the course of today, into tonight, next Monday, or however long it takes. But just manage to match the noise levels speaker to speaker and I am sure we will progress very well through the business of today.

[Continuation line: Iain Lees-Galloway]

KiwiSaver Budget Measures Bill

Speech - IAIN LEES-GALLOWAY (Labour—Palmerston North)

IAIN LEES-GALLOWAY (Labour—Palmerston North): Let me start where the Minister left off. The Minister said that members on this side of the Chamber only know how to borrow. That is from a Minister of a Government that has been in Government for 7 long years and has borrowed for every single one of those 7 years. There has been $83 billion worth of debt amassed by that Government over there and they have the temerity to say that this side of the Chamber—the parties that ran the Government that got New Zealand into a zero net debt position for the first time in our history, that ran 9 years of surplus, nine-nil—nine-nil—that side of the Chamber cannot lecture us about borrowing because all they know how to do is borrow. They borrow so that they can afford tax cuts for their rich mates. That is what they borrow money for, so they can afford tax cuts for their rich mates. The title of this bill is the KiwiSaver Budget Measures Bill. I wonder if any of the people who have come along and are sitting in the gallery on a Saturday morning watching this would have any idea reading that title what the KiwiSaver Budget Measures Bill actually does. This title tells us nothing. This Government is perfectly capable of giving bills titles that tell us what they do. We had the Anti-Money Laundering and Countering Financing of Terrorism Bill. That tells us what that bill is pretty much about. We have got the Crimes (Match-fixing) Amendment Bill. I think we all know what that one is about. Even the rather dry Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill gives us a pretty good hint of what that bill does. I could probably spend hours reading out names of bills but I will not do that. The thing is what the Government does is they give a bill a title that is meaningful when they are proud of it. They are not proud of this bill because they are hiding what it really does by giving it the driest, most bland title that would not give anybody outside of this House the slightest hint what this legislation does. I have got a better title. I would call this bill the “KiwiSaver Cut Bill (No 8)”—the “KiwiSaver Cut Bill (No 8)”. Because what it does is it implements the eighth cut to KiwiSaver that has occurred under this Government in less than 7 years. Eight cuts in less than 7 years, although we are not that surprised because they hate KiwiSaver on that side of the Chamber. They hated it when it was first brought in. They hate the idea of people in New Zealand saving for their future. It was the National Party under Muldoon that got rid of the Kirk Government’s superannuation scheme. This country would be unrecognisable to us today if that superannuation scheme had remained in place. We would not be so desperately reliant on foreign capital if that superannuation scheme had been left in place. But the National Party does not think of the future. The National Party never thinks of the future. The National Party is always worried about the next Budget and the next election, the here and now. There is never a plan. It is always about how to retain power. Why is this the “KiwiSaver Cut Bill (No 8)”? Well, cut No. 1 was to reduce the minimum contribution rate from 4 percent to 2 percent. What did they tell Kiwis at the time? They said: “Oh, we are putting more money in your bank account by cutting your contribution rates from four percent to two percent.” That is actually like telling someone that you have taken money out of their savings account and put it into the cheque account and you have given them more money. Actually, it just shows that the only way this Government can think of getting more money into people’s bank accounts is not through economic growth, is not through wage rises; it is from stealing from their superannuation scheme and putting it into their cheque account. That is the sum total of this Government’s plan. The second cut was to the member fee subsidy—$40 per annum. That was just a little sweetener to make sure that the fees that are charged by the outfits that run the KiwiSaver accounts did not eat away too much at your Kiwi savings. Of course the Government’s second cut was to remove that. The third cut was to cap the compulsory employer contributions at two percent—again, saying to employers: “We want you to be able to hold on to more money.”, not through growing the economy, not through ensuring that businesses’ consumers had more money in their pockets so that there was more demand for their goods, so that they could employ more people and pay them well; no, by taking money out of people’s savings accounts and putting it into the employer’s accounts.

[Continuation line: James Shaw]

KiwiSaver Budget Measures Bill

Speech - JAMES SHAW (Green)

JAMES SHAW (Green): I also have a suggestion for the title of this bill, which is that we amend it from the KiwiSaver Budget Measures Bill to the “KiwiSaver Arbitrary Budget Measures Bill”. I say arbitrary because there does not yet seem to be much reasoning behind the move to remove the incentive. I just wanted to thank the Minister Michael Woodhouse for his contribution earlier because it was the first contribution from a member of the Government side that actually included facts. I found that very helpful. It included actual information and actual facts. However, it simply reinforced the Government’s case that this is all about cutting costs, reducing the deficit, and so on. I wanted to pick one point with that but then I also wanted to restate some of the questions that I asked earlier on in the debate and to invite Mr Woodhouse to take another call at a later stage to respond to some of the specific questions that lead me to the idea that this is in fact an arbitrary bill. First of all he mentioned the 39 percent top tax rate before. When National first came to Government they reduced taxes for the wealthiest people in society, which has left a hole in the accounts of about $1 billion a year. That would have covered the deficit and it would have allowed us to continue this scheme. The questions that I asked earlier that I have not yet received an answer for are, No. 1: New Zealand is 22 of 24 OECD countries for savings. Cutting the KiwiSaver incentive reduces the savings rate. What is the plan to increase savings? The second question: the ANZ chief economist says that removing the KiwiSaver incentive will reduce the rate of take up. What is the plan to maintain or increase the rate of take up?

[Continuation line: Three: did the Government consider leaving the kick-start in place]

JAMES SHAW

Three: did the Government consider leaving the kick-start in place for, say, 6 or 12 months in order to incentivise those currently not in the scheme to get into the scheme or to give people who are currently processing paperwork a change to actually get it complete? Four: how does reducing the KiwiSaver take-up rate impact the intergenerational equity of today’s working parents paying for three generations’ worth of costs? How does it deal with the change in the dependency ratio from 7:1 today to 2:1 in 30 years’ time? The fifth question is: the Government is reducing a short-term deficit by raiding New Zealand’s retirement schemes again. What is the Government’s plan for long-term financial sustainability? Six: why cut the kick-start rather than the member tax credit, given that we know that the kick-start is the incentive that people actually know about and is the thing that actually gets them into the scheme? Reducing or removing the member tax credit would actually achieve the Government’s goal more substantially because it is the more expensive part of the scheme, but it would leave in place the incentive to get into the scheme, which is the most important thing. As yet, during the course of this debate, I have not heard responses to any of those questions, and that leaves me in the position of simply having to oppose this otherwise arbitrary bill.

[Continuation line: Kris Faafoi]

KiwiSaver Budget Measures Bill

Speech - KRIS FAAFOI (Labour—Mana)

KRIS FAAFOI (Labour—Mana): I think we are on clause 1 of this Committee of the whole House stage. This is an opportunity for some members of the Committee to have a bit of fun with the title. My colleague Iain Lees-Galloway has come up with a few interesting titles but mine is quite a mundane title. This bill should be retitled the “KiwiSaver (Reduction and Privilege) Bill”, and for the benefit of the Committee I am going to use the acronym to make things easy—the “KRAP Bill”, because that is what this is. The “KRAP Bill” is a mean-spirited bill that takes away saving opportunities from our young people. That is essentially what this bill does. The “KRAP Bill” will basically take money from those people who have not yet signed up to KiwiSaver, and from some of our youngest and unborn children. That is what the “KRAP Bill” does. The “KRAP Bill” is an awful piece of legislation. When you look at the numbers, the “KRAP Bill”, as I want the title to be changed to, is not only a mean-spirited bill in terms of what it will do for the savings regime and the culture of savings in New Zealand but it is also a fiscally cynical piece of legislation. By cutting the $1,000 kick-start payment for Kiwis this Government will save about $175 million next year. The projected surplus next year just happens to be $176 million. So this is a lazy Government. It could not look to save a bit here and to save a bit there. It just takes away the KiwiSaver kick-start as part of this “KRAP Bill”. As part of the “KRAP Bill” we have been, I guess, antagonising members on the other side of the Chamber as to who should pay back their KiwiSaver contribution. It is not very often that I get to stand in this Chamber and praise a member on the opposite side of the Chamber. As it stands now—of the National members in the Chamber now—David Bennett is the only one who has not signed up to KiwiSaver. He is the only one on that side of the Chamber who has not signed up, according to the Register of Pecuniary Interests. So is the only one to whom we are not offering the challenge to pay the $1,000 back. So, David, you can leave the Chamber in the next 2½ minutes, and I challenge your colleagues who have all taken the $1,000 kick-start, because they are all signed up to KiwiSaver. You can leave. You are not going to be criticised here. Your colleagues who are sitting in the Chamber right now are quite happy to take $1,000, but from 21 May at 2 p.m., no one else can. That is the reality. Every member on that side of the Chamber who is signed up to KiwiSaver—then, fine; I will take that $1,000, but from 21 May at 2 p.m., no one else can. Not one person. David Bennett, you are either principled or you might be a bit stupid because you should have signed up to KiwiSaver. You should have signed up because it is a great scheme, which was started by the Labour Government. It is so good that 2.5 million New Zealanders have signed up to it, and that National Government is trying to take credit for it. But under this “KRAP Bill” the Government is ruining KiwiSaver. It is ruining it, and it is not the first time. The Government has got a track record of doing this. This is the eighth time—the eighth time—that it has taken the knife to KiwiSaver. This “KRAP Bill” is an embarrassing piece of legislation for the Government because it is trying to get it to a surplus that it will never achieve and it is ruining the savings culture of New Zealand. Why, if something is working, do you in this “KRAP Bill” take away something that is an incentive for the 2.5 million people who have signed up to KiwiSaver? It does not make sense. Here is the challenge again—and David, I do appreciate that you have not signed up. The tragedy for David Bennett is that he cannot sign up. He cannot sign up. The challenge to the members on the other side of the Chamber is that you have got $1,000 but you are now denying every Kiwi who has not signed up to KiwiSaver. You got $1,000 that at least 1.5 million Kiwis are not entitled to now. Give it back. You do not have to, David; you did not get it. Give it back. If you on that side of the Chamber are quite happy to sit there and pass the “KRAP Bill”, pay the $1,000 back. That is essentially what you should do if you have got some honour, and you want to pass this “KRAP Bill”—give the $1,000 back. It is the decent thing to do and it is the honourable thing to do. David Bennett—good on you.

[Continuation line: Louisa Wall]

KiwiSaver Budget Measures Bill

Speech - LOUISA WALL (Labour—Manurewa)

LOUISA WALL (Labour—Manurewa): Kia ora, Mr Chair. Thank you very much for the opportunity to contribute to this Committee stage debate about the KiwiSaver Budget Measures Bill. I will talk about some alternative titles later, but I just want to provide some context for this piece of legislation. We have 4.41 million people in New Zealand and of those, 2,350,000 are enrolled in KiwiSaver. Of those people who are enrolled, 352,000 are zero to 17-year-olds. So, actually, our children have engaged in this process and are taking advantage of KiwiSaver because, like us, we want them to prepare for the future. Seventy-eight percent are not enrolled. That is 2.12 million people, but within that cohort, actually, 338,000 people have opted out. So this bill actually has relevance to 1.7 million New Zealanders—that is the 40 percent of New Zealanders who are not enrolled in KiwiSaver. I would like to highlight the fact that of those not enrolled New Zealanders who earn under $30,000 are actually the most disadvantaged. They are the ones who have chosen not to opt into KiwiSaver, presumably because of their circumstances. I want to take the opportunity to also highlight the Greens’ Supplementary Order Paper 81, which would return the $1,000 kick-start for those holding a community services card. And why that cohort—because actually that is the cohort of low to middle-income earners who are not engaging. So it is very much about ensuring that those who are not in the system have opportunities to participate. I have been looking at the Inland Revenue Department’s report, Who is enrolling in KiwiSaver?. It is dated February 2015 and it was prepared by the KiwiSaver Evaluation Steering Group. Of most relevance to me is the fact that of the New Zealanders who have chosen to enrol, there are three enrolment types. The first type is people who enrol directly with a provider. Forty percent of people who enrolled with KiwiSaver do so with a provider. Forty percent people are automatically enrolled and 22 percent opt in. The rest of my speech is going to be focused on that particular cohort—the 40 percent of people who automatically enrol. These are 18 to 64-year-olds who are in new jobs with a new employer and where that job is either full-time, permanent part-time, or it has got some sense of longevity to it. Here are some of the titles that I think this bill should have, actually. If you are auto-enrolled, this bill could be the “KiwiSaver (If You Are Single and Aged Between 18 and 24, We Don’t Care About You Bill”, because it is that cohort that is automatically enrolled.

[Continuation line: This bill could also be called]

LOUISA WALL

This bill could also be called the “KiwiSaver If You Are Māori and Pacific Islander You Are Not Our Priority Bill”, because, again, it is Māori and Pacific Islanders who automatically enrol. This could be the “KiwiSaver If You Are Secondary School-Educated Hard Luck Bill”, because, actually, hard luck to you—you have got only a secondary school education so too bad, we are going to take this opportunity away from you. This could also be called the “KiwiSaver If You Are Working In Lower White Collar Positions Work Longer Hours To Feed Your Family Bill”. How about we title it that? What about this one: the “KiwiSaver If You Are Working In Retail Trade And Accommodation Industry Get More Tips Bill”, because you have got to go and do things yourself. Obviously, this Government does not care about you. Finally, what about the “KiwiSaver If You Are Earning $35,000 Or Less In Employment Income Be Grateful With What You Have Got Bill”. From our perspective there is lack of analysis of this piece of legislation in terms of whom this piece of legislation is going to hurt the most. This Government likes to stand on platitudes and talk about helping those out of hardship, helping those to create a better life for themselves and their families. But this report actually proves that it does not care, that this is all about saving money, and that at the end of the day evidence like this that they have, should have gone to whoever is responsible for inland revenue and you should know the impact of this piece of legislation on the specific New Zealanders that are now going to have these opportunities taken away from them. If you think out there—

KiwiSaver Budget Measures Bill

Speech - LOUISA WALL (Labour—Manurewa)

The CHAIRPERSON (Hon Trevor Mallard): I call Jan Logie.

[Continuation line: Logie]

KiwiSaver Budget Measures Bill

Speech - JAN LOGIE (Green)

JAN LOGIE (Green): Thank you, Mr Chair, that was a great decision. I am happy to take a call on this the Committee stage of the so-called KiwiSaver Budget Measures Bill, which, as already has been well canvassed, has very little meaning and conveys very little meaning to anyone. I have several alternative titles for this bill that I would like to explore in this Chamber. My first one is the “It’s Working So Let’s Fix It Bill” because actually we know that New Zealand has a massive problem with savings or a lack of savings. It has been much worse than what it is now. My colleague James Shaw has already mentioned that New Zealand is 22nd out of 24 countries in the OECD in terms of low levels of savings. So, in international comparisons we have a real problem and this shows up quite significantly in our current accounts deficit. We have seen it in terms of over time. The Committee might be interested to know that household savings per capita in 1992 were $752, which is not particularly high. But you might be even more interested to know that in 2006, before KiwiSaver was brought in, the household savings per capita were negative $1,359. We were in a crisis in terms of household debt at that point, which is what triggered the introduction—I understand; I was not really involved at that time—of KiwiSaver. Now, since we have had KiwiSaver, the levels of household savings are up to $627 per capita, so we are not even back to the point we were at in 1992. I have some ambivalence over KiwiSaver. I will admit that upfront because we live in such an incredibly unequal society where so many people are surviving well below the breadline in poverty. We know that a quarter of a million children are in poverty and we know that so many workers, the majority of whom are women, Māori, Pasifika, and migrant workers, are in precarious work living below that poverty line as well, and that two out of five children are in poverty are in families of working families. So, in that context, KiwiSaver is a voluntary scheme—it would be even worse if it was a compulsory one—and when people are struggling to put food on the table KiwiSaver actually exacerbates inequality in some ways because those who are earning the most are able to contribute the most and get more contributions from their employers so their KiwiSaver savings go up. That is good for our current account, that is good for our household capital accumulation, but it is not necessarily good for addressing inequality. However, this $1,000 kick-start incentive actually is something that goes right across the board in terms of that universalism and is available to workers who cannot necessarily afford, who cannot sacrifice food on the table to make weekly contributions for their future well-being. It is available to beneficiaries and children of beneficiaries whom we want to have the chance to get a leg up. So really choosing this mechanism to remove this is actually the worst possible thing that the Government could do in relation to KiwiSaver’s impact on addressing inequality. Another idea I had for this bill, follows on from the rather hilarious contribution, I thought, from the New Zealand First member who suggested this could be renamed the “OMG Yolo No Future Bill”—I had to be able to say that out loud; it was a pure moment in the House for me. But I would suggest that another possibility for this could be the “Boom—Your Incentive Is Gone Bill”, but I did not manage to carry that off.

Hon Member: Boom.

JAN LOGIE: Boom—no, I still cannot carry it off. But the point is real. This has come out of nowhere and I have heard from people, just on my Facebook thread where they were in the process—

[Continuation line: McKelvie]

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

The CHAIRPERSON (Hon Trevor Mallard): Yes, I think there has been a reasonable amount of discussion on this and I think the Committee is in a position to decide whether or not it wants to put the question.

[PV on closure motion—Ayes 63 Noes 57]

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

IAIN LEES-GALLOWAY (Labour—Palmerston North): I raise a point of order, Mr Chairperson. I seek some clarification. Thank you, Mr Chairperson. I appreciate your hearing this point of order. I would like some clarification about why you believe that is not a serious amendment to the title. I dedicated probably a good 4 minutes of the 5 minutes I was given—and I was prepared to give more—to the reasons behind why that was an appropriate title. It was not in any way frivolous. There was evidence behind it. I provided that evidence in the contribution that I made. In fact, my colleague the Hon David Parker listed all eight of the cuts that that title amendment relates to in his first reading. It is not a frivolous contribution at all. It does relate to facts and evidence and I would appreciate a serious consideration of your ruling.

[Continuation line: Mallard: And I will be slightly liberal]

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

The CHAIRPERSON (Hon Trevor Mallard): OK. I will be slightly liberal and not take this as a criticism or as an attempt to relitigate, but I will point the member to Speakers’ ruling 116(6), were it makes it clear that an amendment to the title of a bill cannot be an attempt to criticise its contents. That is how—[Interruption] Mr Parker—I have interpreted this.

Hon David Parker: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Hon Trevor Mallard): I just want to make it absolutely clear to the member that he really has only one path now that is within Standing Orders. I have made a ruling. That is not a ruling that I am able to reverse or to change. He does have only one course if he wants to change that.

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

Hon DAVID PARKER (Labour): I raise a point of order, Mr Chairperson. Yes, I am actually not seeking to overturn your ruling, but I am seeking clarification of your earlier ruling when you said that you could not have a point of order in respect of your ruling. I suggest that that was wrong.

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

The CHAIRPERSON (Hon Trevor Mallard): Well, I can contemplate that and do not need to rule on it now. I have ruled that amendment out. I have another one that is even easier to rule on. It is one in the name of Clayton Mitchell, which suggests that we delete the title and replace it with the following: “OMG YLOO #No Future”. I am going to rule that out as not being consistent with current parliamentary drafting standards.

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

CLAYTON MITCHELL (NZ First): I raise a point of order, Mr Chairperson. May I just speak to that ruling?

KiwiSaver Budget Measures Bill

Speech - IAN McKELVIE (National—Rangitīkei)

The CHAIRPERSON (Hon Trevor Mallard): Well, I just want to make it very clear that the member is not going to relitigate or to criticise or to attempt to have it changed, because if he does, he will be being disorderly. I think I have been pretty liberal with a couple of people on this side of the House, and I am unlikely to be liberal again.

[PV on clause 1—Ayes 67, Noes 57]

[continuation line: clause 2]

Clause 2 Commencement

Speech - The CHAIRPERSON (Hon Trevor Mallard)

The CHAIRPERSON (Hon Trevor Mallard): Already we have on the Table an amendment from Fletcher Tabuteau, one from Dr David Clark, and one from Chris Hipkins.

Clause 2 Commencement

Speech - The CHAIRPERSON (Hon Trevor Mallard)

Hon DAVID PARKER (Labour): What a fair chairman. It actually does speak well of the chairman because I just had a wee confrontation with him and he is still big enough to call me, so thank you, Mr Chairman. I want to talk to the commencement date. The commencement date is expressed to be when the KiwiSaver Budget Measures Bill gets Royal assent, but then there are two exceptions to that, which are that particular parts of the bill, once it receives Royal assent, are of retrospective effect. I want to talk about why we need to take particular care in respect of commencement dates in respect of legislation that goes to raiding retirement schemes, because the Government has got prior form on this. The National Party, which forms the majority of this Government, is the same party that raided the earlier retirement scheme under Muldoon. It killed off the Kirk scheme, which would have New Zealand in a similar position to Australia in terms of investment capital. In fact, it was even earlier than the Australian scheme that followed it. It has killed off contributions to the Cullen fund. We have already seen that that has cost—

Dr David Clark: $16 billion.

Hon DAVID PARKER: —the Cullen fund $16 billion at current rates of return because of that folly. And now we have cuts to KiwiSaver, particularly the $1,000. As to the date, you have got ask yourself this. The Government is doing this as of today, in the name, it says, of child poverty. When do its child poverty measures kick in? On 1 April next year. The Government is saying that it is a compassionate Government because it recognises that there are many children, many thousands of children, living in severe poverty in New Zealand. It accepts that these children sometimes go without breakfast, sometimes go without lunch at school, sometimes go without shoes, and can never pay their school fees—just about never. It accepts that we have serious hardship in New Zealand amongst children and that they need $25 a week—we think that is pretty miserly; our policy was $60 a week per child under 3—but it says $25 a week because their circumstance is so desperate that they need more money for breakfast. So those parents are going to go to their kids on Monday and they are going to say: “Next year you can have breakfast.” Look at their eyes down over there. That is actually one of the fundamental flaws in this total Budget package that relates to commencement dates. It is that, actually, the Government acknowledges that there is a real and serious problem with child poverty now in New Zealand, but it is not going to fix it till 1 April next year. This is a wealthy country. But what wi