Chris Hipkins
Minister, Ministerial Services
Minister, National Security and Intelligence
Prime Minister
Kia ora, everybody. Good afternoon. The new Cabinet met for the first time today, with a very full agenda, so bear with me.
I’ll start with Auckland first. The floods in Auckland have had an unprecedented effect in their scale, and the Government will continue to support the local response as they transition into the recovery phase. I’d like to acknowledge and thank all of the emergency services and the community organisations that have been involved in that response so far. I’ve seen firsthand the vital role that they’ve been playing in supporting those who have been most affected, and, of course, the work that they have been doing in supporting the clean-up effort.
While the weather has settled somewhat in recent days, we are aware that further severe weather is still possible. The state of emergency remains in Auckland, and officials are ready and plans are in place in the event that we need to respond again. The Government has already unlocked significant support to boost the mayoral relief fund, and additional funding and support has been made available through the enhanced Taskforce Green scheme.
Among the other support the Government has already provided so far is more than $11.4 million in civil defence payments that have so far been paid out to over 22,000 people. In addition, the Defence Force has been on the ground, helping with the clean-up effort and removal of waste, and that will continue.
Today, Cabinet agreed an emergency package of support for Auckland businesses that have been significantly affected by the flooding. Developed alongside the Auckland Business Chamber and the EMA, it includes up to $3 million for discretionary flood recovery payments to support businesses at high risk of closure or who have experienced very significant impact on their operations; up to $1 million to focus on business continuity and resilience at a community level; up to $1 million for mental health wellbeing support for business owners through a boost to the existing First Steps programme. The IRD will waive penalties for late payments for Auckland, Northland, the Bay of Plenty, Thames-Coromandel, and the Waikato, and further work will take place with banks around the CCCFA obligations to see if we can allow households to access short-term funding to assist in the recovery and the rebuild—and that work is ongoing, with further announcements to follow.
The second item that Cabinet discussed today was the Government’s refocusing, putting different priorities and the cost of living, in particular, front and centre of our new direction. I’ve made it clear that the Government is doing too much too fast and that we’d reassess our priorities and refocus on that new direction. Today, I’m announcing the first set of reprioritisation decisions. Work on the merger of Radio New Zealand and Television New Zealand will stop. There’s a clear need for further support for public media, but it needs to be at a lower cost and without the need for significant structural change. Radio New Zealand will be provided with additional funding to secure its financial stability and to strengthen its role in public media. New Zealand On Air will also receive additional funding to support public media content, and that will be accessible across a range of different platforms. Remaining funding set aside for the project will be redirected to other Government priorities through the regular Budget process.
Social insurance will not proceed as previously proposed. With families and businesses under pressure, it’s not the time to pursue this change and put additional costs on them. No legislation will be introduced in this term, but work will be continuing to explore the best ways to address inequities in the current system in the longer term, when the economy is better positioned to make that change. That’s off the table, though, until we see significant improvement in economic conditions. I want to be clear here that we hear from people that a lot of these things are good ideas and worth pursuing, but now is not the right time to forge ahead with them.
Cabinet also agreed that the Human Rights (Incitement on the Ground of Religious Belief) Amendment Bill, or the “hate speech legislation”, as it’s been more commonly known, will be withdrawn and the matter will be referred in its entirety to the Law Commission. The Law Commission is already considering issues around hate speech and discrimination, and this decision allows them the opportunity to consider a difficult and a highly contested area of the law in its totality. The Law Commission has got a good track record of developing guidance on difficult issues and that’s often in the past helped to generate cross-party support for those issues, and that’s what we hope we can achieve here. The Government will act on the recommendations that come from the Law Commission—in time.
The biofuels mandate will not proceed. Introducing a biofuels mandate will increase the price of fuel and, given the pressure on households, that’s not something that I’m prepared to do at this time. The Government still has a comprehensive emissions reduction plan to reduce emissions across the economy, and that will continue.
Finally, the Cabinet considered the three waters programme. As I’ve previously noted, the need for reform is unquestionable. The events in Auckland have once again demonstrated the limits of our existing infrastructure and the need for change, but careful consideration of those reforms is required. Cabinet has asked the new Minister for local government to report back on options for refocusing the reforms, and that will mean seeking further feedback from local government and from Māori. We know that the status quo isn’t viable. We need to find a new way of funding the billions required for infrastructure upgrades without the huge increases in household rates bills that were projected without further action being undertaken. This is fundamentally about infrastructure, the cost of living, and the quality of life for New Zealanders. We’ll work through those options carefully, and that process is likely to take a few more weeks.
These are the first and the most significant set of decisions that we are taking to refocus the Government’s agenda. They’ll allow us to shift our focus, our time, our energy, and our resources to the most pressing issues that are facing New Zealanders at the moment. They won’t be the last policy changes that we’ll be making, but they are some of the most substantive. All Ministers will continue to review their work programmes to see if there’s further tightening work that we can do.
When I was elected as the leader of the Labour Party—and, therefore, became the Prime Minister of New Zealand—I promised that we would do more to help families with the cost of living. I know that all working people are feeling the pressure of the rising costs of living, and that’s why we moved quickly to expand the excise petrol tax reduction, the RUC reduction, and public transport subsidies through until 30 June. Those are changes that benefit all New Zealanders, but particularly those on middle and lower incomes who are feeling squeezed. But I am concerned for those in our communities who are feeling the greatest financial pain at these times, and that includes those on the minimum wage. They make impossible tradeoffs between food and medical care, dry homes, clothing for their children; these families need our support now more than ever. To that end, the minimum wage will increase by $1.50 per hour to $22.70 per hour. That will kick in on 1 April. The starting-out and training minimum wages will be maintained at 80 percent of the adult minimum wage.
This increase is in line with the overall wage movements that we’re seeing across the economy and with the most recent inflation estimates. I do understand that a number of small businesses will have concerns about this decision. However, in a cost of living crisis we can’t leave those on the lowest incomes behind. An inflation-adjusted lift to the minimum wage will mean that thousands of New Zealanders don’t go backwards. The impact on inflation is negligible. In each year’s minimum wage review, the Ministry of Business, Innovation and Employment assesses the inflationary impact of the minimum wage rate options on the wage proportion of GDP. In the 2022 review, MBIE estimates that an increase of 7 percent in the minimum wage will have only a minor inflationary impact of 0.1 percent on the wages portion of GDP. And, by pushing out work on the social insurance scheme, we’ve removed some immediate complexity and additional costs for those businesses. Analysis from Treasury that fed into our decisions suggests that this increase is unlikely to have a significant impact on unemployment, because it’s broadly in line with the existing average wage movements across the economy.
The broad range of actions that I’ve set out today demonstrate the new direction that I have set for the Government—that’s increased support for businesses, increased support for families, and reprioritisation of our work programme to shift our focus to the bread and butter issues that matter to New Zealanders and that they want to see us focused on. I’m now happy to take your questions.