Chris Hipkins
Minister, Ministerial Services
Minister, National Security and Intelligence
Prime Minister
Kia ora, everybody. I have rather a lot to get through today, so I will allow a bit of extra time at the end for questions.
Cabinet met earlier to discuss further reprioritisation of the Government’s work programme. The Government is focused on the bread-and-butter issues—the things that matter most to New Zealanders—and at the moment the cost of living and the recovery from Cyclone Gabrielle are right at the top of the list. Stopping some of our plans and putting others on a slower track gives us the bandwidth to focus on these immediate priorities while also saving some money so that we can provide a little bit of extra support to help families with increasing costs. It’ll also help to keep downward pressure on any domestic-related inflation. I want New Zealanders to know that the Government’s doing its bit and is cutting its cloth to suit the times that we are in. Some of the things that we’re delaying or stopping do mean a lot to us as a Government, but we’re taking the hard decisions because we know that Kiwis are also making some tough calls at the moment, as well.
A month ago, I announced our first tranche of reprioritisations, and today I can announce the second. Cumulatively, they save over $1 billion that is now available for reallocation to support New Zealanders with the cost of living. We also know that we face big bills to fix parts of the transport network that have been decimated under Cyclone Gabrielle. It will be a massive task for our road builder, Waka Kotahi, and one that needs their total focus. As such, the transport Minister, Michael Wood, has proposed a number of reprioritisations within the transport portfolio, which I am confirming today.
First, we’ll be stopping the implementation of the clean-car upgrade scheme, where households would have been able to scrap their old cars in return for a grant for a cleaner vehicle or to pay for public transport. Trials of the scheme have already proven to be difficult, and it’s not clear that this is the most effective way to increase the uptake of low-emissions vehicles. The $568 million allocated to that scheme will now be freed up to invest in cost of living measures.
We’re also refocusing our goal of increasing and improving public transport as an alternative to driving. We’ll be focusing on the five main centres of Auckland, Hamilton, Tauranga, Wellington, and Christchurch, where there is the scale for decent public transport alternatives to getting around, rather than seeking to direct every council in New Zealand to make these changes. Reducing transport emissions is critical to achieving New Zealand’s climate change targets, but we need to focus our efforts on the areas where we can achieve the greatest reductions, and that’s in our biggest cities.
In other regions, pressing on with regional vehicle kilometres travelled targets doesn’t make sense when many of those areas don’t have good alternative bus networks or trains. So we’re making these targets voluntary in areas like Dunedin, Palmerston North, Rotorua, New Plymouth, and those places that have been affected by Cyclone Gabrielle such as Napier, Hastings, and Gisborne. To be clear, in our major centres we do intend to keep investing in regular, fast, and affordable public transport so that people have choices about how to get around, our roads are less congested, and we are reducing our emissions. It’s good for the environment, it reduces congestion, it improves productivity, and it’s also good for our international brand.
Third, we will be significantly narrowing the speed reduction programme to focus on the most dangerous 1 percent of State highways. We’ll also ensure that where change is proposed, Waka Kotahi are consulting meaningfully with the affected communities. That means that speed limits will reduce in the places where there have been the highest numbers of deaths and injuries. We’ll continue to make targeted reductions in the areas immediately around schools and marae and in small townships that State highways run through.
We’ll also be stopping the social leasing car scheme trials. That scheme was designed to provide leasing arrangements to low-income families for clean cars, but, again, it was proving difficult to implement, and several of the communities where it was due to be trialled have been affected by the recent weather. So that will save $19 million, which will also be available to be reallocated.
Finally on transport, I can confirm today that we will be staging the way we roll out transport projects in Auckland. With around a third of New Zealand’s population estimated to live in our biggest city, it’s where we can make the largest single gains in futureproofing transport systems to tackle congestion and to reduce emissions. Work on Auckland light rail will be continuing alongside other city-shaping investments such as the second Waitematā Harbour crossing, more rapid busways, and better connections to growth areas like the north-west. But just like the London Underground didn’t suddenly appear fully formed—in fact, it took generations to develop—Auckland light rail will happen in stages, with the first stage expected to be confirmed by the middle of this year.
There isn’t anything new in taking a staged approach to significant transport projects in New Zealand. The Wellington Northern Corridor and the Northern Busway projects, for example, are being delivered in successive stages by successive Governments. The Waikato Expressway started in 1993 with the Bombay Hills to Mercer construction, and it was only finished late last year. Auckland light rail is no different. Staging the roll-out will align it with other critical transport investments, particularly the second Waitematā Harbour crossing. Investing in a modern Auckland, where people can get around, where there is less congestion and cleaner travel options, is the least that we should expect, and our Cabinet is absolutely agreed on that.
Justice Minister Kiri Allan has also sought to reprioritise some elements of the justice work programme. We’ve decided to defer receiving advice on the second phase of alcohol reform that related to issues such as sponsorship, advertising, and pricing. That’s been pushed back to April 2024, rather than March this year. These are areas that we do need to take the time to investigate properly so that we can ensure that there aren’t unintended consequences. For example, when community groups are doing it tough, I don’t want to see any restrictions on sponsorship increasing costs for community sports teams. The changes we are already making around how locals participate in alcohol licensing decisions will be continuing. I can also confirm that we are not intending to introduce legislation to lower the voting age for general elections to 16. There is a process set out for how Parliament will respond to the recent Supreme Court decision, and we will continue to pursue that, but in terms of legislation, we will be introducing legislation to lower the voting age in local body elections. Lowering the age to 16 for general elections requires the support of at least 75 percent in the House of Representatives or a successful binding referendum. It is clear that we do not have a 75 percent majority in the current Parliament to make that change.
Lowering the voting age to 16 for local elections requires a regular majority in the House through amendments to the Local Government Act. Giving the vote to 16- and 17-year-olds is something that I do support, and I’m happy to see it progressed. I also acknowledge that there is greater support in Parliament for lowering the voting age for local government elections, and that’s why we have decided to focus on that now. Our intention is to introduce the legislation for that this term and see it considered by the next Parliament.
The Minister for the Environment, David Parker, has proposed that we defer work on the container return scheme that would see small refunds for those returning containers. The evidence overseas shows that this does help to reduce waste. However, it’s also estimated to add small additional costs to households, and we don’t want to be imposing those additional costs right at the moment. This policy does remain on the agenda, and we will look to assess it again in the future when the time is right to do so.
Finally, we’ll be deferring public consultation on a new test to determine who is a contractor and who is an employee. A recent Employment Court case found that Uber drivers were employees rather than contractors. That is a significant court ruling, and it has implications for the legal definition of a “contractor”, so rather than pushing ahead with our proposed consultation on changes, we’ll be putting that work on hold until the appeals in that case have been heard.
All up, the changes announced today and previous ones make just over $1 billion in savings that can be allocated to other measures. That’s in addition to the over $700 million in savings that we reallocated to fund petrol excise reductions and half-price public transport that have been extended through until the end of June. That’s $1.7 billion in savings that represents the clear intent of the Government to focus on the issues that matter the most to New Zealanders right now, including supporting people through the current cost of living pressure. It doesn’t mean that there aren’t more areas that we’ll continue to look at. My expectation is that Ministers will continue to prioritise their own work programmes as part of their businessas-usual jobs, including re-scoping and amending those plans where necessary. These are not the only things that we’re doing, and today I’m announcing that Cabinet has decided to inflation-adjust payments so that all of our superannuitants will receive an inflation increase of 7.22 percent to their annual payments from 1 April this year. We know it’s vital that superannuitants’ income doesn’t go backwards. This will see a couple who are both over the age of 65 receive $102 more a fortnight, and a single person living alone receive an extra $66 a week more.
Benefit levels will also increase from 1 April, by 7.22 percent. That means that a family on a benefit with children will receive an extra $40 a week, and a sole parent will receive an extra $31 a week, as we continue our work to reduce child poverty. In total, since we’ve been in Government, beneficiaries with children are, on average, $190 a week better off, increasing to $222 a week when they’re receiving the winter energy payment over the coldest six months of the year.
In a cost of living crisis, we can’t leave behind those on the lowest incomes, who rely on the Government for support. I know that every little bit helps when it comes to making ends meet. ’m very proud of the work the Government has done this year to support New Zealanders through difficult times. Keeping the price of petrol down, extending half-price public transport, and significantly boosting the minimum wage are all doing their bit to help families. Today’s decisions highlight our absolute focus on the cost of living and recovering from the cyclone. We’re reducing costs for households whilst freeing up our work programme so that we can be most focused on those other immediate issues.
Very quickly, to the week ahead: I’m in Wellington through to Wednesday. I’ll be chairing the Intelligence and Security Committee annual review meeting on Wednesday, as well as showing my support for the kiwifruit industry by attending the annual Zespri function here at Parliament. On Thursday, I will be in Gisborne, and I’m hoping for third time lucky in my attempts to visit Wairoa, and then on Saturday, I’ll be at the Pasifika Festival in Auckland. With that I’m happy to open up to questions. Jenna—and while you ask a long question, I’ll just get a glass of water.