Post-Cabinet Press Conference: Monday, 17 June 2019

This bill has been around for quite some time, and, actually, it was under the coalition agreement that we agreed as a Government to prioritise turning this into legislation. It was previously a New Zealand First member’s bill, so I do want to acknowledge New Zealand First and the Deputy Prime Minister for their ongoing advocacy of this piece of work, and hand over now to the Minister of Agriculture, who is going to give more detail on the bill, and then we’ll answer any questions.

Kia ora. Look, thank you, Prime Minister, and I’d like to acknowledge the Deputy Prime Minister and New Zealand First. Their slick bit of footwork in the House allowed the introduction of a bill by Mark Patterson that gave rise to the opportunity through the select committee process to develop a bill that is, I guess, better focused and, we hope, will be more effective.

This is about introducing a scheme. It’s not about designating to banks or to the farmers what will come from that. It’s a process that ensures some balance and fairness for farmers in a situation where they would otherwise be powerless. Farm debt is quite complex.

Farmers are subject to many variables outside of their control. They have multimillion-dollar debts. It is their home and their family, and what this bill does is set up a process that can be initiated by the bankers or by the farmers themselves. It sets a process in place. The Ministry for Primary Industries will oversee it. They will oversee the mediators who will be certified to participate in this process, and it will then allow for certificates that will determine the time frame for settlement.

One of the things that farmers have faced is, I guess, a prolonged process where they think the banks might be drawing it out. They feel very powerless and frustrated. This will set some time lines in place and will ensure that when the mediation is developed it will be offered back to the Ministry for Primary Industries, who will then oversee and ensure that that deal is carried through.

I just, again, would like to acknowledge the Deputy Prime Minister. Both of us have been around in Parliament for some time, and I can recall these issues going back over 20 years, into the 1990s, where farmers felt very disempowered when it came to a situation—it may have been outside of their control—where they had lost equity in their property and were, therefore, forced to sell up. This brings some balance back into that situation.

You might not remember but even Colin Meads, the most esteemed rugby player this country has ever had, was taken to the cleaners by the BNZ.

This is the background of circumstances which, in 1999, saw $11 billion owed by the rural community. Today, as the Prime Minister said, it’s just under $63 billion. So it’s been needed for a long, long time, and I’m very delightful that, at last, here in June of 2019, it’s up and running properly.

Thank you, and we’re happy to take questions. The Minister of Agriculture and also the Deputy Prime Minister will remain for questions on the farm mediation.

Minister, what’s actually changing here, because in some situations, mediation does happen already? Is this just making sure it’s more widespread? What are the nuts and bolts?

Look, voluntary mediation has occurred. What this does is allow a farmer who may not be able to pay bills to then seek mediation, a stay of proceedings for six months, and then undertake a formal mediation process. The bank, if they think that they’re not going to receive their money, can then ask for mediation. If the farmer refuses to engage, the bank can proceed as it did; if the bank refuses to engage, then there’s a six-month stay of proceedings. So it brings some balance back into the equation.

There’ll be a list of three mediators put up by the bank. The farmer can choose which one of those three they would like to have, and then the process is under way for about three months. So it does keep things moving, but it does place some disciplines where those disciplines haven’t always been there. I know of mediators who have intervened on behalf of farmers. It’s still been a long and tortuous process, and sometimes the outcome hasn’t always been fair. This won’t guarantee that farmers will walk away from their debt at all, it won’t guarantee that the bank misses out on what they’re entitled to, but it does put in place a fair process.

Why is it something necessary for the Government to intervene in?

Look, I mean, these are people who are at the core of our economy. They often have large, multimillion-dollar debts, and many conditions are outside of their control. Some of these farmers have in the past been able to keep paying their bills, but their equity has slipped through circumstances beyond their control, and the bank steps in in an arbitrary way, they think. What this will do is ensure that those situations in the circumstances can be properly assessed and some balance brought back to that negotiation.

How much of a problem is there to solve, though, because in the last big downturn the banks didn’t actually push people off their farms?

Can I say, I acknowledge the banks—there’s been a bit of pressure on. They haven’t been intervening, but we’re a Government—you’ve a Government here that’s focused on well-being, and this is about ensuring fairness across all parts of society. This is one area where we have seen in too many situations over 20 years—and I know that the Deputy Prime Minister and I can certainly refer to cases—where it’s been absolutely unfair. It’s been an imbalance of power and we’re just trying to rectify that.

Keep in mind, this is also modelled on legislation in Australia, so there’s definitely been a need over the years within that jurisdiction, and, of course, keeping in mind our major banks, our Aussie banks, where they’ve seen the need to put in this legislation, and it’s worked well and I think it’s been well received. As the Minister said, some cases will feel like an absolute David and Goliath, and what we’re trying to do is put a bit of balance back into a situation where a farmer may find themselves in a difficult position with their bank, put a bit of a process and a bit more fairness and balance into those negotiations.

Why is there not a construction sector debt remediation scheme?

As the Minister has said, there are some very specific circumstances that relate to our rural sector, in particular the volatility that they experience around price, but, also, issues like pests and biosecurity, or even extreme weather events, can have a dramatic impact on their operation and on their business over a short space of time. And, also, given the proportion it makes up, and that these are often individual small operators as well, I think that lends itself to having a scheme specifically designed for this sector, in the same way that Australia has.

Federated Farmers and the Bankers’ Association say that the Reserve Bank’s doubling of capital requirements has already started to make farm debt much more stressful for farmers because banks are not passing on the recent cut in interest rates and being much more aggressive about saying “Pay back your debt.” So isn’t it sort of pointless if you’ve got your own Reserve Bank putting the squeeze on the banks, who are squeezing the farmers before anyone else?

Look, I think the important point to make there, of course, would be that those are ultimately decisions and matters for the Reserve Bank and that those decisions haven’t been finalised. So I’d be loath to comment on them until they have.

Do you think that the Reserve Bank should be doubling capital requirements, because it looks like farmers are going to pay the price?

Those are matters for the Reserve Bank.

Why has farm debt grown by 270 percent over the last 20 years?

I mean, much of the farm debt has been accumulated through development of land, conversions, but more recently it’s been because the payouts from the major dairy companies have been down. Farmers have financed some of their income through debt. It’s got to a situation where the banks have been signalling that they want to see that debt paid down. It’s a fair enough call, but, as I said before, some of the circumstances in the past have been where farmers are cash positive but the equity has changed and the banks have decided to arbitrarily intervene. We’re just ensuring that if those circumstances change, then there is a fair process that they have to adhere to and that that brings some balance to the equation.

So why should farmers get special treatment when they’ve taken a risk and knew the problems with the weather and various other things and the banks took a risk? Surely there’s other parts of the economy where they take risks and have a crack? Why should farmers get special treatment?

Look, this is not stipulating an outcome here; this is stipulating a process, and the process must be a fair one. That’s all we’ll ask of the banks and of the farmers. In terms of the risk, I’ve been involved and fought for farmers who had swap loans. Farmers don’t always get all the information when they take out large loans, so this is a safeguard to ensure that if they did get into that situation and they didn’t have all the facts, then at least they have a fair process of exit.

Is the Banking Ombudsman not doing as much as it could be doing?

No.

I mean, can it’s not, sort of, solve some of these issues?

The Banking Ombudsman is limited in their ability to intervene, and I don’t think it’s as effective as it needs to be.

Farm debt has been growing at a third of the rate of other debts of construction— so much construction to residential and business debt—but it’s probably going to need to grow if farmers are going to make the investments they need to transition to a more, sort of, sustainable model. Are you hopeful that this remediation bill will help give banks confidence that they can actually start lending again to farmers rather than pull back?

You could also argue that we hope that we increase the value of our products at the same time, and so that’s also part of, I think, the primary industry’s strategy around increasing the profitability of what we produce as food producers as well.

Look, I think the fact that the bankers support this piece of legislation—because they want a fair process, as well, and it gives some, as I say, balance to the negotiation, so farmers can borrow in the confidence that at least they have a fair process should things go wrong.

Do you think you’ll see more borrowing or less borrowing after this?

I think the banks don’t want to see any more borrowing, but, clearly, working capital is required, not just for individual farmers but across the sector. We have put a large amount of money through the Budget process to assist farmers in a transition into a more sustainable farm situation, where they are not at the moment.

The bill is not designed to either increase or decrease but, simply, create a process where if a farmer finds themselves in a situation where a bank is seeking to foreclose, they are not in a direct power imbalance where they don’t feel heard and they don’t have all of the options available, and are able to have someone act as an intermediary in those situations. So that’s what it’s designed to do.

Who actually pays for mediation—is it the farmers or is it the banks or is it the Government?

They share the costs.

What’s the cost expected to be?

It’s not necessarily that great. These mediators are not highly paid professionals; they are people who are familiar with the rural sector, who are respected by both the banks and by the farmers, and who could come in and often just ensure that there’s a safe process and all the facts are on the table. That hasn’t been the case always in the past.

How does that look in practice? Do they just, kind of, sit down—the two parties— and the mediator asks them questions? I mean, it kind of seems a bit cut and dried, isn’t it—it’s like they can pay it back or they can’t—so what other nuances are there? Hon Damien O’Connor: Look, the reality is that farmers have got day-to-day work going on, and when it comes to a crunch point they’ve still got to carry on milking the cows, looking after the cattle, so they don’t always have the time to focus on a process that the bank has numerous professionals to work on. So it just means there’s someone in there who can ensure all the facts are brought to the table.

And I don’t think it’s fair to say that it’s always black and white. When it involves equity, when it involves payment plans, of course there are always mechanisms and plans available to both lenders and farmers. It’s about whether or not a farmer is able to have those options fully explored through a mediation process, and this is what it seeks to do.

Are there enough mediators across all of rural New Zealand?

That would be a question for the Minister: are there enough mediators?

No, we’ll have to appoint more and there will be a certification.

There is an association; we’ve talked with them. The fact that everyone supports this means that hopefully we’ll get people who have the skills who want to come in and assist. As I say, the numbers won’t be in their hundreds but there will be enough to ensure that we should have a fair process through legislation.

I have another question around the cost. What is the cost expected to be?

Of an individual mediation or of the overall programme?

Of the overall programme over, say, a year—the cost of hiring these mediators, setting the whole thing up?

Again, that’s a cost that’s shared by those who enter into mediation. We could get some figures to you; I don’t have those to hand.

And what’s the time frame for it going through the House, as well?

We’re looking for it to be introduced, my expectation is, in this session of Parliament.

Can I just say this: you’ve asked a question about why farmers? Well, $45.7 billion as at the last record of exports is rather critical to this economy. Secondly, it’s not like an urban mortgagee sale; sad as it might be, the issues are very simple. With farming, it could be a question of the equity doesn’t look like it was under the mortgage; however, the capacity to pay the mortgage is still there. The bank will still move on that, and those sorts of things need to be stopped. And so there’s a whole range of reasons why it should be there, and, as the Minister of Agriculture has said, if the farmers and the bankers want it, what’s the problem? A bit of social responsibility from capitalism is a very good thing.

Henry.

That sounds like a familiar speech I’ve heard before. We’ll take the last one,

Minister Peters, you were just talking about responsible capitalism; do you want to comment at all on the ANZ news out today?

We’re going to keep the front end just to debt remediation, but, Deputy Prime Minister, before I move into the rest of post-Cab?

Ah, well, I could probably say this, Prime Minister, if you’d allow me—

Oh, go ahead. Henry wouldn’t have it any other way.

I don’t think your paper quite understands what it’s going to write about.

There we go. All right, we’ll move on to—

Prime Minister, my question’s on the debt?

On debt? Sorry, go ahead. Last question.

Is this process a reassurance for farmers that could potentially find themselves in a position, given the transition to our low-carbon, low-emissions economy?

No, no—I wouldn’t see it as directly linked to any of the policy work that we’re having to do but rather a mechanism for any circumstances that may amount to a situation where a farmer and their lender ends up in a dispute around foreclosure. This gives them the ability to have a mediated process regardless of the circumstances that have led to that, and at this point, of course, most of those foreclosures won’t be at all relevant to the issue of transitioning our economy and emissions in agriculture, for instance.

OK. Thank you, both. All right—happy to take questions.

Prime Minister, are you concerned about David Hisco’s departure from ANZ?

Obviously, this is an employment matter. It’s a matter for ANZ. I was advised of the situation and the decision this morning, but, again, as I say, it’s really, ultimately, a matter for ANZ and an employment matter.

Does this sort of thing undermine consumer confidence in the banking sector?

I think, actually, regardless of which sector we operate in—you know, the private sector, politics—there are expectations around our behaviour, regardless of what field we work in, and I think it is our duty to constantly try and uphold those.

The chair of the bank blamed the recent capital issues—not the CEO issues; the recent issues around capital accuracy—on a junior staffer. What do you make of that?

Sorry. Do you want to explain—sorry a—

The issues recently that ANZ have run into around capital—

Oh, I see. Yes—yes.

He blamed it on a junior staffer. What do you make of that?

Again, that wouldn’t be a matter for me. Only ANZ can know whether or not that is in fact the case.

Just on the vaccines and—

I will come to you. We’ll just pan across.

Just on the vaccines in Northland, we now know that there were enough to cover everyone under 20, available for purchase. Whether or not the Government was advised at the time—or, you know, in November, that that was an option—are you OK with the advice you were given at the time?

Yeah, look, as far as I can establish, of course, the advice we were given around an outbreak did occur in November, and that was the point at which additional vaccination was sought in order to try and protect that population. Acknowledging, of course, that that has been successful—that the one very sad case we’ve had was actually for a child that was not old enough to be vaccinated under that programme.

The advice on that seems to be wrong, though, too.

And then, coming to your wider question around did we know about wider availability of the vaccination, when it comes to Ministers, my understanding is that we were not informed of additional availability until May. Certainly, that’s what I’ve been advised.

Is the advice on—I think the death you’re referring to is a nine-month-old, or a seven-month-old, rather—

I believe so.

And the vaccine that has been purchased from Sanofi has an earliest indication of nine months. The other vaccine, that was not purchased, actually does go down to six weeks, although the advice that was given to the Government did say a year, but Medsafe, the NHS, and, I think, the FDA all say that is able to be used on infants at six-weeks-old.

Look, that’s just simply a level of detail around the medical advice on the vaccination, and again—

It’s a pretty big detail.

It is, but look—and if you wanted to give me a bit of advanced notice that you wanted detail on that, we could have happily sought some advice, but I just don’t have that in front of me to answer that question.

What about, without that, just the herd immunity argument—I mean, there’s no way that anyone, the Government, could guarantee that that baby didn’t get it from a, sort of, five- to a 12-year-old.

The most important thing here, of course, is that we do rely on expert clinical advice—advice from doctors—as to how we respond when we have an outbreak and how we respond when there is a limitation around the availability of the vaccine, keeping in mind Australia was experiencing an outbreak at the same time. So the advice that we received, which was then acted on, was target those who are more likely to contract the strain of meningococcal we were dealing with, and that’s exactly what happened.

But that doesn’t seem to be the advice the Ministry of Health received. So are you happy with the advice the Ministry of Health gave to the Government?

Are you disputing the vaccines that were available to Pharmac at the time?

Again, we were advised in May that there may have been more vaccine available. It’s not clear to me from what I’ve seen that even when Pharmac was advised, whether or not that was available vaccination, because, of course, there were multiple calls from multiple countries on what was available from the drug companies. But, again, that’s something I’d want to get a bit more detail on. Jessica?

The information seems to show that there were 30,000 available or 20,000 available, depending on which company that you went with. Are you concerned about the information that Pharmac passed on to the Minister if—

Again, what I want to be clear is that what I’ve been advised is simply that that stock was available within the company. It’s not entirely clear to me whether or not it was available to New Zealand, given Australia at the same time had demands on stock too. All I can say is that when it came to Ministers, we were advised of that in May; the outbreak was in November.

[Inaudible] I think, has emailed probably—

Again, keeping in mind the outcome of this, ultimately, was that we followed the advice of clinicians and that, by and large, with the exception of a very sad case where they were, as I understand, outside of the immunisation advice because of their age—but by and large it worked.

Are too many Māori babies being taken from their mothers?

You’ll be referring to the specific case that we’ve had recently involving Ngāti Kahungunu, and—

I’m talking about that but also more widely.

Well, I do want to speak specifically to that case, because we do have different responses. Oranga Tamariki have been working for some time to improve the care of children who are currently with Oranga Tamariki, because they are disproportionately Māori, and the ultimate goal has to be in reducing the number of children who are in State care. So the first thing to say there is that in this last Budget we have invested more in early intervention to try and prevent children from being uplifted in the first place. Secondly, when we have situations where there are concerns around child safety, we have, for instance, successfully had Oranga Tamariki—it was CYFS then—enter an arrangement with Waikato-Tainui where they’re working in partnership with them to now support whānau who may be at risk of having a child uplifted, to prevent uplift.

So from what we’ve seen of Ngāti Kahungunu, the agreement has been out of the weekend hui that was held, that first there will be an individual review of the case that has been brought to light in recent days, conducted by the Chief Social Worker but also someone nominated by Ngāti Kahungunu. Secondly, that work will now occur between Oranga Tamariki and iwi to see if we can form a similar arrangement to try and prevent children coming into care in the first place.

So is that to say that, yes, too many Māori babies are being taken?

There are two things that are happening too often in this country. Too many children are having to come into State care and too many children are being harmed. We want to end both. We want a situation where children are safe and able to stay in their homes with their family and their loved ones. But the sad reality is at the moment that we have too much of both and, ultimately, it is about trying to prevent uplift but it’s also about trying to prevent harm.

How much do you think that institutionalised racism and unconscious bias play a part in this? Kelvin Davis said this morning that that’s rampant across the whole community; it’s not a Government agency thing only.

I think, if you look at the massive reform process that Oranga Tamariki’s gone through only recently, they have acknowledged, of course, just in the sheer numbers—I mean, when you look at the number of children in State care, 70 percent of the children who required care and 80 percent of the children who are in youth justice custody were Māori. So the numbers tell us a story. We’re going through the process at the moment—it started under the last Government—of fundamentally changing the way that Oranga Tamariki are working. They are working much more collaboratively with iwi in trying to find solutions that try and prevent children from being removed from family, and if they are, placing them with wider family. But, actually, the investment in this organisation is ongoing and the work that needs to be done is ongoing. They’re not perfect, but, ultimately, they’re charged with keeping families safe and we need to support them to do that, but we also need to bring in other partners, and that includes iwi, to help them do that job.

Because Kelvin Davis says it’s part of his job, as Crown-Māori relations Minister—it is to eliminate this unconscious bias across Government departments. Is that sort of like a nice thing, but, really, is it practical that a Minister is going to be able to achieve that across Government departments?

Oh, look, it’s a big job, but no big job, I think, is easily achieved. Ultimately, though, as I say, the numbers tell a story. Minister Davis was there alongside Minister Martin to support her in the work that ultimately she will be doing with Ngāti Kahungunu in the long run to try and achieve the goals of supporting children, supporting community, supporting whānau, so that we don’t have uplift in the first place.

Do you think there’s a need, though, for an independent inquiry rather than an internal one where the results aren’t publicly recorded?

Yeah, well, I actually think that the agreement that’s been reached around having the Chief Social Worker work alongside someone nominated by Ngāti Kahungunu is a good one. It means that that case can be looked at fairly quickly as well, and keeping in mind, of course, that the Children’s Commissioner has also indicated—and that is our independent monitoring function—that he also wishes to look into a very specific part of Oranga Tamariki’s policies as well.

Just on that story last week on Radio New Zealand about the foster parents who had the European child taken away, and they said that they were told it was because of their ethnicity, do you think it’s acceptable that a foster parent’s ethnicity would play a part in whether a child could stay with them or not, and do you know whether that is actually part of the framework with the Government agency?

Look, what I might need to do is, actually—I, unfortunately, know a little bit of detail about that case and I’m not entirely clear as to what is able to be publicly shared, so I might take a pause on that particular case and come back to you with what is not subject to privacy. However, more generally, of course, during the debate around the new legislation for Oranga Tamariki, there was a significant discussion around how much Oranga Tamariki was doing to try and find wider family placement for children when it looked like they were going to have to move into care. One of the really strong pieces of feedback that came through was every effort should be made to try and place them with wider family, and so that is one of the things that they try and work with. One of their other principles is to try and keep them with siblings, because, of course, that’s what came through when talking to children who had experienced care, was “Try and keep us with our family if you can.” So those factors do come into play, but so do a range of other factors.

What’s the Government’s position on genetically modified organisms and genetic technologies?

It hasn’t changed from the position that we have at present. There’s a very robust process, of course, because New Zealanders expressed some time ago concerns around GMO being carefully and cautiously managed, with a precautionary approach.

Is it New Zealand’s position that the oil tanker in the Gulf was hit by Iran?

Look, of course, at the moment, I’ve seen the public reporting. I haven’t had a chance to be briefed specifically on the issue, though, since I returned to Wellington.

Are you concerned about the kind of heightened tensions?

You know, I think probably most New Zealanders would take the same position I do, which is that, ultimately, the language that’s used—we’re always extremely cautious. We want to avoid inflaming situations that might lead to more global tension than we already have, and New Zealand is always one to use dialogue to try and resolve tensions where they exist. Right, I’ll take a last question.

What do you think of the extradition bill that’s being looked at in Hong Kong at the moment, and why hasn’t New Zealand made a public response, similar to Australia or others?

Usually, simply because often when it comes to issues of another country’s domestic politics, we don’t proactively put out statements, but I’m always happy to respond when asked. So that’s the reason for no full statement. Ultimately, though, of course, New Zealand’s position is that we do not have a formal extradition agreement with China. We have our own processes, which work well for us, and that’s the process that we choose to use. What Hong Kong does, however, is ultimately a matter for them.

What do you make of all the protest there at the moment and the heightened tension? What’s your take on it?

Look, while I’ve observed it, my interest ultimately is whether or not we’re content with the extradition process that we have in New Zealand for us, and we are. Of course, it enables us to factor in a wide range of issues on a case-by-case basis. Ultimately, extradition for other countries—that’s a matter for them. OK. All right, thanks, everyone.