Parliamentary debates: Tuesday, 28 July 2026

14:00

Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the King and pray for guidance in our deliberations that we may conduct the affairs of this House with wisdom, justice, mercy, and humility for the welfare and the peace of New Zealand. Amen.

14:03 · to the Minister of Finance

What recent reports has she seen on Government support for working families?

I’ve seen the latest FamilyBoost figures, which show the improvements the Government made last year are helping more working families. Last year, with the support of the ACT, New Zealand First, and Labour parties, the Government legislated to increase the FamilyBoost rebate to 40 percent, lifted the maximum payment to $120 a week, and expanded eligibility ensuring more working families receive meaningful help with the cost of childcare. I can report that more than 97,500 families have now received a FamilyBoost payment to help with the cost of early childhood education.

What impact have the changes made last year had for families?

The results are very encouraging. Compared with the March quarter before the changes came in place, more than 8,300 additional families are now receiving FamilyBoost; that is an increase of 15 percent. The average FamilyBoost payment has also increased by around 70 percent—from approximately $353 to approximately $599 per family. That means more working parents are getting more meaningful help with one of the biggest costs young families face.

Who is benefitting from the expanded FamilyBoost scheme?

The latest figures show more hard-working Kiwi families are receiving higher levels of support with their early childhood education fees. Since the changes took effect last July, more than 6,500 families have received the maximum FamilyBoost payment of $120 a week, and across the three completed quarters since the expansion, an average of more than 12,300 families each quarter have also received at least $75 a week toward their childcare costs. Those figures show the changes are not only reaching more working families but are also providing more meaningful help with the cost of early childhood education. Again, I want to acknowledge the support of parties across this House, including the Labour Party, for that legislation.

What message does she have for families who may be eligible for FamilyBoost?

My message is simple: if you think you may be eligible, I encourage you to register through Inland Revenue. Around 115,000 families have already registered, and more than 97,500 have received a payment, but we believe there are still eligible families who have not yet claimed. Registration only takes a few minutes, and families have up to four years to make a claim. It is the case that some families will not be eligible, due to their household income or because they are not paying high early childhood education fees. Regardless, FamilyBoost is practical support that helps parents balance work and family life while easing pressure on household budgets, and we want every eligible family to receive the support they are entitled to. Despite the barracking from the other side throughout this question, I’m sure members across the House agree with that goal.

That last comment is completely unnecessary and should not be repeated by other Ministers.

14:06 · to the Prime Minister

Does he stand by all his Government’s statements and actions?

Yes, and particularly the fact that rents are the lowest they’ve been in 25 years.

Does he stand by his statement, just last week, “We are focused on lowering the cost of living for New Zealand.”; if so, does lowering the cost of living mean any prices actually get lower?

Well, again, I’d stack our record up against the member’s record any day of the week. He drove inflation to a 32-year high at 7.3 percent, and he kept inflation outside the band for a remarkable 11 quarters. It’s a particular and special skill that he had doing exactly that.

Does he stand by his statement last week, “Falling prices lead to less spending. That leads to businesses not investing, and as a result, the economy shrinks.”; if he does stand by that, why didn’t he tell New Zealanders when he promised them lower prices that, actually, it was going to result in less investment and a shrinking economy?

Last week, I spent a lot of time invested in educating the member on economics, and I was highlighting to him the perils of something called deflation.

So does he think lower prices are a bad thing?

I think inflation within a band of 1 to 3 percent is a very good thing. I don’t think sitting at 7.3 percent is a very good thing at all.

So does he think lower prices are a bad thing?

No, I think lower prices inside the inflation band is a good thing. I think decreasing prices of deflation is a bad thing, as all economists around the world would highlight.

So does he think that prices rising within the inflationary band are lower prices?

Well, coming off the back of 7.3 percent and a 32-year high—let’s go through some numbers, shall we? Because we actually have rents the lowest they have been in 25 years—[Interruption]

Sorry, Prime Minister. That’s adding absolutely nothing to the information that your leader is trying to seek from the Prime Minister.

Point of order, Mr Speaker. Perhaps there wouldn’t be such a reaction if the Prime Minister was actually answering the question that I’d asked him.

Don’t take that too much further, because, quite frankly, if there’s so much noise coming out of a person, as was the case, there’s no way they’re listening for an answer.

Point of order.

No, no, it’s over. I’d suggest—

Further point of order, Mr Speaker. If the majority of the Prime Minister’s answers are attacking the previous Government, there is going to be a reaction to that.

No, that’s not right. I’ve been listening very carefully. You’ll recall that I did call out the finance Minister for her final comment. The fact that a Prime Minister answering refers to a previous inflation rate is not an attack; it’s a fact. Do you have a question?

Sure. Does he still think that falling prices will lead to less spending, as he told the House last week?

The point I was telling the House last week was what the member’s been advocating for is something called deflation. That is where we have decreasing prices that then lead to less spending—deferred spending—which is very dangerous in an economy. Business incomes fall, the economy shrinks, and people lose their jobs. People lose their jobs in a deflationary environment, and they lost their jobs under him in a high-inflation environment as 7.3 percent and a 32-year high outside the band for almost three years.

Supplementary question, Mr Speaker. [Interruption] So how does a Kiwi—

Wait. Some of your own side are terribly excited about this question. They just need to listen, so they can hear it.

How does a Kiwi family paying less for a block of butter shrink the economy?

I’m talking about deflation. That’s what the member, in the way he phrased his questions last week, was talking about. I’m saying if you have deflation, if you have high inflation, not good. We want inflation within a sensible band of 1 percent to 3 percent. But I just say to the member, he has no credibility, he has no policies, he has no ideas to actually deal with inflation at all.

No, no. Thank you, Prime Minister; that’s enough of that.

So does he want grocery prices to drop?

I want inflation within a band of 1 percent to 3 percent. That’s why we’ve focused the Reserve Bank of New Zealand on a single pace of inflation. The member can’t even keep inflation in a band. It caused huge amounts of suffering for New Zealanders. High inflation, high interest rates, shrinking economy, and people lost their jobs because of a Labour-Green Government and economic mismanagement.

Supplementary question?

Well, remember the rules about the use of supplementary questions.

Yes. Is the Prime Minister aware of any alternative approaches to monetary policy which would see the mandate of the Reserve Bank of New Zealand widened beyond inflation, or to see the target band for inflation increased, which would allow for higher price increases across the economy?

That is the point I’m trying to make, is that you want inflation in the band. The band is there for a reason: low to moderate inflation and 1 percent to 3 percent. But the member’s party has proposed lifting the midpoint of the band to 2.5 percent. You want more inflation. You want life to be more expensive for New Zealanders—that’s not right.

Point of order, Mr Speaker. The Prime Minister’s statement is actually incorrect. He can’t make up policy on behalf of the Opposition which isn’t true.

That is quite right. There is a remedy for you in that circumstance, but I would counsel the Government to talk about its own performance, rather than attacking the Opposition. [Interruption] No, hang on! Whoa! Does the Hon Dr Megan Woods have something to say?

Always has.

Well that would be par for the course.

Does the Prime Minister agree that most reasonable people would think lower prices means lower than they would be with the runaway inflation that we inherited; given most people know that, is it not cynical and disingenuous to keep pretending otherwise?

Well, you can play semantics as much as you like, but I just say to the other side, if you want to help New Zealanders, get on board and support the rates cap. Get on board and support oil and gas.

I just made it clear the Government cannot use supplementaries to attack the Opposition. The question was fine. The answer strayed right into that territory, and it shouldn’t.

14:13 · to the Minister of Transport

What recent announcements has he made on transport?

It was fantastic to be at Glen Innes train station last Friday to mark the opening of the new pedestrian overbridge there. It’s a step forward in replacing level crossings to unlock the benefit of City Rail Link. The level-crossing work started in September last year after the Government and the council brought forward $200 million each in funding to unlock these important projects. We do need to sort the level crossings out in order to take advantage of City Rail Link, which is opening, I’m advised—

And in West Auckland.

—soon.

You’ve left West Auckland out.

Yes, including West Auckland. It would be nice if you’d put some money in towards it.

What further recent announcements has he made on rapid transit transport in Auckland?

It was also good, last Friday, to turn the first sod alongside local MP Simeon Brown and Auckland Mayor Wayne Brown on the final stage of the Eastern Busway, which is a project that Aucklanders will know has taken a long time to get to this point. But we are now at the final stage of the final 500-metre section of the busway, delivering transport choice for Kiwis in East Auckland. When it’s fully open in 2027, it will connect Botany, Pakuranga, and Panmure, giving people a reliable 40-minute trip from Botany to the city centre. We expect public transport usage on the busway to grow significantly from around 3,500 trips per day to 24,000 by 2048. Combined with City Rail Link, it will deliver more people into jobs, education, and other opportunities, and make it easier for people to get around the great city of Auckland.

What recent announcements has he made on further progress on the roads of national significance?

Succinctly.

Yesterday, I announced the opening of the new State Highway 29/Takitimu Drive Toll Road flyover bridge, which is an important milestone on the Takitimu North Link Stage 1 road of national significance. It’s part of a major interchange being built at State Highway 29/Takitimu Drive Toll Road between Tauriko and the Tauranga CBD. Overall construction on the stage 1 project is now well advanced—it’s into its fifth year—and earthworks on the road’s 10 major structures are nearing completion.

What further progress does he expect to be made on transport projects across New Zealand in the coming weeks?

There is a massive transport investment pipeline happening right now, and it will continue to happen under this Government. I can advise the House that new level-crossing replacements at Te Mahia and Takanini will be completed in the next month. On the weekend, the newest railway stations in Drury and Paerātā will open, putting South Auckland and Franklin’s fast-growing communities on the rapid transit map, just in time for City Rail Link. Westgate Station will open in August and make sure that the popular Western Express bus service, WX1, continues. There’s lots happening and much more to do.

14:16 · to the Minister for Resources

What reports, if any, has he seen about the minerals sector?

I was delighted to take part in the Quarry NZ conference last week. However, prior to going there I was invited—

Catch a limo?

—as a guest, as an advocate—and it’s sad that there are random voices from the other side of the House, stigmatising the extractive sector, especially when that individual was born and bred on the West Coast. I would say, however, I had the pleasure of holding a 17-kilogram bar of gold—$3.8 million—and I was told that up to $12 billion worth of earnings has been developed, i.e., gold, and it continues to represent a great factor of positivity in our rural, regional economies.

What more can he tell us regarding the quarrying industry?

The least of which I can say is up to nine projects were listed in the fast-track legislation to ensure that quarries are not trapped in some closed loop of anti-development. We need quarries; they are necessary for the infrastructure outcomes. They have been undermined; they have been weakened by the weaponisation of wildlife and the ideological overreach that now features in much of our environmental law.

How do minerals contribute to the economy?

This could be a very long answer. The reality—

No, it won’t be.

The reality is that in certain regions, the minerals extractive sector is growing. Whether it be critical minerals down on the West Coast; whether it be the antimony and the gold; whether it be the jobs located at Waihī, in the area between Coromandel and Tauranga, we should not allow these tropes and myths to spread, because there are many Kiwis employed, either digging coal, digging gold, and we do not want apocryphal stories of mating frogs to undermine that.

Why do we need minerals?

What a tough question.

In the event that we worry about mineral properties not being available—one good outcome will be to improve the concentration of Willie Jackson who spends all of his time on his cellphone made out of critical mineral properties.

No, no. Right, we’ll move on to question 5—Dr Ayesha Verrall.

14:19 · to the Minister of Health

What was the total number of fulltime-equivalent vacant nursing positions in Health NZ in each quarter from July 2024 to December 2025, and has the number of vacancies increased, decreased, or stayed the same over that period?

I refer the member to written parliamentary question No. 12715 (2026), which answers the member’s question and indeed shows the number of fulltime-equivalent (FTE) vacant nursing positions in Health New Zealand has reduced by 45 percent between 2023 and 2025. This Government has been focused on increasing the number of Health New Zealand’s front-line health staff, particularly nurses. That’s why since coming to Government, more than 2,100 additional nurses have joined the healthcare system. I also note that Health New Zealand’s nursing vacancy rate has reduced significantly, from 9.5 percent in September 2023 to 4.7 percent in December 2025. Voluntary turnover has also reduced, falling from 13.3 percent in September 2023 to 8.4 percent in December 2025. At the same time, nursing vacancies have reduced across the system, both vacancy and turnover rates are substantially lower than they were in 2023. I’m further advised that Health New Zealand is currently advertising for 1,422 nurse FTEs, with a further 297 currently at interview stage, 154 at reference checking stage, and 235 offers under active consideration by candidates. There is still more work to be done and that remains our focus.

Point of order, Mr Speaker.

Oh!

Point of order, the Hon Dr Ayesha Verrall, without commentary from anyone else.

That was a question on notice, Mr Speaker. I’d refer you to Speaker’s ruling 202/1. The Minister had time to prepare an answer with the assistance of officials, and yet he chose to give an answer that referred to a different time period from the one specified in my question. See, my question asked from July 2024 through to 2025, and the Minister answered beginning in 2023.

Well, look, I appreciate the member’s not satisfied with the answer, but the Minister took one minute and 12 seconds to give the House an answer—a very, very long answer—with an extensive number of statistics inside that, which could well have answered the period that was concerned.

Speaking to the point of order. Sir, I’m concerned that the length of the answer now qualifies to meet Speakers’ rulings. My colleague pointed out Speaker’s ruling 202/1, which makes it very clear that when a question is on notice, there is an expectation that it be answered. Obviously, that expectation is not applicable to supplementaries. The Minister referred to a written parliamentary question, which was a different question. He has deliberately used a different time frame. It’s not so much the content that was after that, because, ultimately, if he is choosing to give an answer that relates to a different time frame, all of that information is irrelevant.

Look, I think the point is I was not suggesting for one minute that long answers are good things—quite the opposite. What I was suggesting is that there was so much information in there, I was unable to pick up the point that was being made by the Hon Dr Ayesha Verrall. And further, though, I’d point out that while I don’t have it at my fingertips—I probably should—Ministers are required to address questions, not necessarily answer from the way that those asking it would prefer.

Speaking to that point of order, Sir?

No, that’s a ruling.

OK, point of order.

I’m referring to a ruling. So if you want to speak to that, that’s fine.

Well, Speaker’s ruling 202/1—I’d be interested in which one you’re referring to so that we are specifically aware—but it does state that the expectation on primary questions is much higher than that of supplementaries. If it is the case that Ministers can choose a different time frame than what is quite clearly outlined in the primary to subvert answering a question, that is a serious breach of the expectations that this House has long had.

Well, you leave me in a position of having to consider this matter offline because I’m not going to go into that sort of exercise right here, right now. Do you have another supplementary?

Why, after substantial progress in reducing vacancies in 2023 and early 2024, did progress stall when the Government started its turn-around plan?

The number of vacancies at Health New Zealand, as I said, has decreased significantly. There will always be variation between month and month, but ultimately, as I said in my primary answer, Health New Zealand is actively recruiting for 1,422 FTEs—we currently advertising for, a further 297 currently at interview stage, 154 at reference checking stage, and 235 offers under active consideration by candidates.

Oh, point of order, Mr Speaker. We’re in a very difficult situation now as a result of where we landed following the points of order on the primary question, because it’s enabled the Minister to totally misdirect to things that have happened at some point in the past—

No, hang on—hang on. What is your point of order? That’s an—

Well, my point of order—

No, that’s an assumption, that you are free to make but not one that the House has to accept.

Well, the Minister in his answers refers to different time periods from the one which the question is related to.

You’re not allowed to talk about when you were in office.

No, just a minute. Ask your supplementary again so I can—

It’s my first supplementary: why, after substantial progress in reducing vacancies in 2023 and early 2024, did progress stall when the Government started its turn-around plan?

As I said, the number of vacancies will always increase or decrease from month to month. However, as I said in my answer to the primary question, Health New Zealand is currently advertising for 1,422 nursing full-time equivalents (FTEs), a further 297 are currently at interview stage, 154 are at reference checking stage, and 235 offers are under active consideration. It might surprise the members, but you actually have to advertise for a job to fill a vacancy, you have to interview for a job to fill a vacancy, you have to provide offers to people to fill a job for a vacancy. Those are all of the things we’re doing to fill vacancies in nursing roles to strengthen our workforce at Health New Zealand.

Why do nurses describe it as taking “months and months and months” to get approval to recruit to roles that are already funded when that approval used to take a week or two before his turn-around plan?

I’m not sure if the member remembers that her Government, when she was in office, restructured the entire health system to create a mega-bureaucracy rather than focusing on outcomes and front-line services. We’re turning that around. I also, to answer the question, have set a very clear expectation to the board of Health New Zealand that recruitment time frames need to be sped up.

If the Minister is so concerned about bureaucracy, why doesn’t he remove the requirement for regional approval to fill an already funded vacancy?

Regional approval is not required for those vacancies.

Is it correct that by holding approximately 1,300 nursing vacancies open over two years, Health New Zealand is saving over $200 million, more than half its deficit?

Well, the member is conflating issues. In the previous annual report, there was funding set aside for settlements which took place in the next financial year. That’s what the money was set aside for: for settlements which had not yet been agreed. But as I said in answer to the primary question, Health New Zealand is currently advertising for 1,422 nursing FTEs, currently interviewing 297; 154 are at a reference checking stage, and 235 offers are under active consideration by candidates. It might surprise members opposite, but all of those stages are needed so you can fill vacancies.

Is it a fact that there are 4,000-plus more nurses now than when that questioner was last Minister?

Well, the answer is there are significantly more nurses working for Health New Zealand today: about 2,100 additional nurses working at Health New Zealand, 900 additional doctors working at Health New Zealand. We’re focusing on putting patients first, restoring the health targets, increasing front-line workforces to deliver for New Zealanders.

Ask another question.

No, no one else is asking a question.

Is it fair that Wellington had an average 394 fulltime-equivalent nursing roles vacant over this period, more than double any other district?

Well, as I said, we’re focused on improving and strengthening the front line, as we’re doing. We are advertising currently for 1,422—

Say it again.

—nursing FTE—1,422 nursing FTE—a further 297 are currently at the interview stage, 154 at the reference checking stage, and 235 offers are under active consideration by candidates. All of those stages are required to fill the vacancies across the country, and we are very much focused on improving the front line.

14:30 · to the Minister of Justice

What measures has the Government taken to reduce the number of victims of crime?

Reducing the number of victims of crime has been this Government’s priority from day one. The first step we took was to restore real consequences for crime, and we’ve introduced tougher sentencing laws, restored the three-strikes regime after it was scrapped by the previous administration, and taken action towards addressing serious youth offending and retail crime. Alongside that, we’ve ended the culture of excuses that we also inherited—in particular, we’ve stopped funding cultural reports that were designed to increase sentencing discounts.

How many victims of violent crime are there in New Zealand today compared to when the Government took office?

The most recent New Zealand Crime and Victims Survey estimates that there are 46,000 fewer New Zealanders who are victims of assault, robbery, or sexual assault compared with when we took office. Estimates will move around, of course, but there has been a substantial reduction in the number of victims, and that indicates we’re heading in the right direction. Of course, there are still far too many victims of crime, and that is what motivates this Government every day to continue the effort to restore law and order in this country.

How are the Government’s actions helping to reduce the number of victims of sexual offending?

Our Government is determined to reduce the number of victims of sexual offending, which is why we’ve made changes to the law to prevent sex offenders being granted permanent name suppression unless the victim agrees. A big part of our sentencing reform is about restoring real consequences for the victims of sexual offending, and we’ve also made stalking an illegal and jailable offence after it was raised by victims’ advocates and survivors over a long period of time. Acts of stalking can be a precursor to more serious crime. There’s much more to do in this space, and many parties are talking about that.

Should there be real consequences for sexual offending?

Yes, indeed, there should. Sexual offending cases are traumatic for the victims, they can be difficult to prove, and if the consequence for a successful conviction is a very light sentence, then society, in this Government’s view, is not clearly denouncing the act. That is why we have restricted the ability of judges to heavily discount sentences and why we are disappointed that parties across the other side of the House have not supported us in that measure.

14:32 · to the Minister for Disability Issues

Does she stand by her statement that “Our Government is focused on improving the lives of the nearly one in six disabled New Zealanders”; if so, does she agree with disability organisations saying that disabled people are falling further behind under this Government?

14:33

Yes, I stand by my statement. Our Government is focused on improving the lives of the nearly one in six New Zealanders who is disabled. I’m proud of the work we have under way to improve outcomes for disabled people, which includes launching the New Zealand Disability Strategy, which focuses on outcomes in employment, justice, housing, education, and health; the New Zealand Sign Language plan; Access Activator, where community develops accessibility solutions; the Autism New Zealand pilot funding for early identification for preschoolers; the investment to get a hundred young people into high-performance wheelchairs; and oneinsix.nz, which we’ve been promoting to businesses to support more disabled people into work.

What does she say to the 82 percent of disabled households that have experienced food insecurity in the last year, and who are struggling even more now that white bread costs 67 percent more, mince is up 28 percent, and milk is up 26 percent under her Government’s watch?

Well, we acknowledge, as we have on many occasions in this House, that many New Zealanders are doing it tough right now, which is why our focus on responsible economic management matters when the world is volatile and unpredictable. That’s why we are fixing the basics in the economy and repairing the economic damage done since COVID. We will continue this work to support more New Zealanders who are experiencing tough times.

How can she say, as the Minister responsible for advocating for disabled people, that removing Kāinga Ora’s target for more accessible homes and scrapping My Home My Choice—a work programme aimed at providing disabled people with choice and control over how and where they live—has improved the lives of disabled people?

Well, housing is one of the five areas in the disability strategy, and, obviously, there is a turnaround plan with Kāinga Ora, but it does not mean, in terms of the change with the universal target, that we are not delivering full universal design homes. Since 2019, Kāinga Ora has built 1,464 homes to its full universal design standard. We also need to take into consideration that many houses that are occupied by New Zealanders are in the private market, so we also need to ensure that there is greater accessible housing in the private sector and also in the many thousands of community housing places that are in place. As I said, housing is one of the five areas in the disability strategy, and, as we know, there is more work to do to improve housing for disabled New Zealanders.

How does she justify the reduction to the Total Mobility scheme when disabled people have said that it will force them to cut down their travel by choosing between getting to work, the supermarket, or doctors appointments?

Well, in terms of the Total Mobility scheme, which is the responsibility of the Minister of Transport, one of the areas that we have focused on is ensuring that fares remain lower than they were in 2022, but members opposite tend to forget that what is really important is that disabled people have a service they can rely on. Because of the level of unaffordability, we had providers around the country that were threatening to withdraw from the scheme entirely. That was not going to be a solution that was going to be viable, which is why we have worked on ensuring that the Total Mobility system is sustainable and affordable and is meeting the needs of disabled New Zealanders.

How can she say that her Government is committed to improving the lives of disabled people when decisions they have made have increased food, transport, and housing costs for disabled people?

Well, that member conveniently forgets the economic times we are in. As I’ve said, our Government is focused on the cost of living pressures that people are facing. But what the member fails to acknowledge is that you can’t just spend, spend, spend, and accept that things are sustainable, so we have to look at ensuring that programmes are sustainable over time. As I said, with Total Mobility, some regional councils were threatening to come out of it completely. How was that going to work for disabled people? We want to ensure that what is funded is sustainable and delivered over time, because disabled people want services that they can rely on and count on, not just now but in the future.

Who should New Zealanders believe, the Minister who claims that she is improving the lives of disabled people, or disabled people, who have said that they are exhausted and that her Government is making life harder for them?

Well, the unfortunate reality is that in many areas, disabled people are worse off than the general population, which is why we are focused on initiatives like oneinsix.nz to support more disabled New Zealanders into employment, because they are disproportionately represented in our unemployment figures. What we do know is there is a much larger number of disabled people who want to be in work. That’s what our Government is focused on: improving outcomes so that they can be more independent and lead the lives they choose to.

14:38 · to the Prime Minister

E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga?

[Does he stand by all of his Government’s statements and actions?]

Yes.

When he agrees with the Greens by saying New Zealand needs “sensible, common-sense rules in place” for artificial intelligence (AI) data centres, does he think that those rules should be in place before any more of those AI data centres are consented?

Well, I think the issue I have, now that you heard my public remarks this week, is that turning off investors and investment before it arrives in New Zealand isn’t a good thing. It’s an approach we saw with the banning of oil and gas and mining, and we don’t want to send a message out that we’re closed for business. Our data centres today are about 0.6 percent of our electricity and we’ve got three data centres coming on stream in the next 12 months. It doesn’t preclude the fact that I still think we need some sensible, common-sense rules, but I’d just say to the member that a moratorium for 12 months is absolutely the wrong message.

Does the Prime Minister understand that, if his Government plans to allow the consenting of more AI data centres before these common-sense environmental and energy and water regulations are in place, those new regulations will not apply to those already consented AI data centres?

Well, my point is that we just need to take a step back and actually think about what sensible rules we put about the investment—

How about a one-year moratorium? That’d be nice step back.

There’s no need for a moratorium. There is absolutely no need for a moratorium. It is classic Greens policy to turn off investment and investors before they’ve even shown up in New Zealand. [Interruption]

Just wait for your own side to settle a little bit. Thank you.

Was the Prime Minister briefed on Invest New Zealand’s goal for $35 billion of new investment in AI data centres before the report was published earlier this month?

Make no mistake: we want to attract a lot of data centres to New Zealand. We have a data centre competitive advantage. We have a cool climate, we have abundant renewable energy, and we have political stability, and that is a good thing for big data centre investments. Of course we’ll put some common-sense rules around all that, but, if you look out into the future over the next 10 years, there is a quadrupling of our need for data centres, and it’s a critical part of modern life and a modern economy. We take on board the point—we’ll have some critical common-sense rules—but we’re going to go out and build data centres, and we are going to attract investment to this great country.

Can the Prime Minister tell us, when he first heard that policy, did it remind him of a policy from somewhere else in the world?

I thank the member for his question, but it most reminded me actually of the banning of oil and gas and the unintended consequences that took place when the previous Government—Labour, Greens, and New Zealand First—banned it.

Point of order. The Prime Minister didn’t get the question properly. Can I repeat it?

You’re asking me to put myself in a very dangerous position by agreeing with the member. If the member wants to use another supplementary, he can, but we’ll take Chlöe Swarbrick in the meantime.

How does the Prime Minister reconcile his comment, in answer to me just then, that we have “abundant renewable energy” in this country with the comments that his Government has been making over the last 2½ years that we have a serious dry-year problem, to the extent that the Government wants to funnel in excess of a billion dollars into new fossil fuel production?

Both can be true. I mean, let’s be clear: we have a renewables boom up and running in this country. That’s fantastic. We’ve built more in two years than in the previous eight years. Things like Resource Management Act reform, fast-track legislation—excellent. Lots of people from inside New Zealand and outside New Zealand wanting to invest in renewables—fantastic. But the other reality is that we need to de-risk the dry-year risk. That means doing a liquefied natural gas (LNG) import facility. It means co-investing with potential gas investment in this country. It means having a strategic coal reserve behind Huntly, a strategic diesel reserve up in Whangārei. It’s an “and, and, and” policy. And isn’t it fantastic that, since we announced our investment in thermal firming energies and the things that we want to do, since the beginning of the year we’ve seen wholesale electricity prices, in the forward curves, go from $200 down to $120. Of course, that welcomes more investment into New Zealand to come out and build the data centres.

Prime Minister, when you first heard the so-called “common-sense” one-year moratorium, did you not recognise it as being the same policy emanating from Donald Trump’s United States?

Well, I’m quite focused on making sure we advance New Zealand’s interests. I’m less interested in Donald Trump and the US.

Can the Prime Minister guarantee that New Zealanders’ power bills will not increase as a result of the consenting of new AI data centres, as has been experienced in many other jurisdictions around the world?

Well, the fantastic thing is that, since we announced the LNG import facility, the forward prices have done from $200 down to $120. At one point, they were at $800 in 2024 because of the failed Labour-Greens energy strategy and policy. The fact that we’ve a very competitive global wholesale electricity price means we’re attracting more data centre investment, and that’s great.

Is it credible to promise a moratorium on data centres for a whole year if a person is not prepared to forego their benefits for even one day?

Well, it’s a proposition you’re asking. I’m not sure that he’s got responsibility for what individuals might do in their personal circumstances.

No, no, it’s a point about how society—

Well, I didn’t pick it up that way. Question No. 9—

You’re all having to explain yourselves a lot today.

Oh don’t start asking questions to the member, for goodness’ sake.

14:45 · to the Prime Minister

Does he stand by all his Government’s statements and actions?

Yes.

Why did the Prime Minister choose Federated Farmers’ public campaign for the repeal of Mana Whakahono ā Rohe agreements over the views of iwi who negotiated in good faith?

We covered this last week, but the key messages are that it’s important that any agreement struck are in the context of the new Resource Management Act (RMA) legislation. It’s important that they also operate at the highest level—typically around spatial planning—and, most importantly, we want to make sure, at the individual project level, people can crack on and get things done on their own property.

Can the Prime Minster name one iwi organisation that asked his Government to repeal Mana Whakahono ā Rohe agreements?

Well, I’m just saying to you that we actually believe that those agreements need to be in the context of the new RMA legislation. It makes no sense, getting caught in a transition from an old set of laws to a new set of laws, to have those agreements in the old setup.

Was Federated Farmers the loudest voice the Government listened to?

This Government takes lots of views from lots of different stakeholders, as you would expect. We like a view that comes from outside the Public Service, as well, because often people closest to the problem have good ideas to implement things, which is great. [Interruption]

Just wait for everyone just to settle down a little bit.

Can the Prime Minister identify one Government decision that has strengthened the iwi Māori participation in public decision-making?

I would look at the work we have delivered in terms of outcomes for Māori students, by focusing back on basics. That is a great outcome, and I know many iwi support that effort as well.

Point of order. I just want to clarify, the question was: can the Prime Minister identify one Government decision that has strengthened iwi Māori participation?

I think, with all due respect—[Interruption] While I’m speaking, no one else is. With all due respect, I think it would be worthwhile looking at the Hansard. The answer that the Prime Minister gave—I think it more than addressed the question.

Is the Prime Minister aware of the Māori advisory group that sits in education, advising the Minister of Education on policy—

Elizabeth Rata!

—including Dame Georgina Kingi and the honourable—

No, wait on. The member for Nelson—I won’t use the name, because that would be naming someone—is it necessary for you to ask a question at the same time as the questioner?

To the Prime Minister, is he aware of the Māori advisory group that sits around the Minister of Education, helping to advise on Māori education policy, including Dame Georgina Kingi and the Hon Kelvin Davis?

Absolutely, and I think the work that the Minister has undertaken to ensure that our new resources are now teaching the basics brilliantly. It’s available in Māori medium—it’s fantastic.

Supplementary.

Hang on. Just a moment. Ah—

Rawiri Waititi.

Rawiri Waititi.

Sorry, Chris. Does he believe relations between the Crown and Māori have improved or deteriorated since he became Prime Minister?

What I believe is this is a Government that is very much focused on improving outcomes for Māori and non-Māori.

How does his Government measure success in Māori-Crown relations?

By outcomes.

Can the Prime Minister please confirm that this Government—[Interruption]

Hang on. Today is a particularly rowdy day for some reason; it’s probably the time of the season—the Hon Tama Potaka and no one else.

Can the Prime Minister please confirm that this Government has supported the development of more Māori housing to the tune of over $400 million over the last three years?

Yeah, I think we can very proud of the effort on housing with Māori but also, I’d say, with housing in general—stable house prices, record first home purchases, average mortgages down by about $7,500, rent increases the lowest they’ve been in 25 years—$180 up a week under that Government but stable under ours.

What evidence does the Prime Minister have that improving Māori outcomes has been achieved given that Māori unemployment is up 10.8 percent, Māori incarceration rates have increased, just three in 10 Māori own their own home, 50 percent of the public housing waiting list are Māori, and one in four children living in material hardship are Māori?

Well, I think Māori also appreciate the fact that there are 46,000 fewer victims of violent crime. I think they appreciate the fact that there is a 22 percent reduction in serious youth offending. I think they appreciate the fact there are 2,000 more people in prison, because we want them in prison, not in the communities causing pain and suffering on fellow New Zealanders.

Can he name one policy—just one—that has improved Māori-Crown relations in this term of Government?

Back to basics and structured literacy. [Interruption]

When everyone’s quiet, the Hon Chris Bishop.

Can the Prime Minister confirm that the first commercial Māori aquaculture settlement area to be developed in 20 years, that was previously declined under the Resource Management Act, has received draft approval through fast track—namely Ngāi Tahu’s Hananui Aquaculture project in the South Island?

Yes, I can. I can also confirm that many iwi are on board with the fast-track proposals and have been able to participate in building out infrastructure across this country, and that’s a great thing. [Interruption]

We’re almost at the end of question time, so I’d ask people just to constrain themselves. There are more mundane debates coming in the afternoon; I’m sure people will enjoy a similar level of participation there.

14:51 · to the Minister of Commerce and Consumer Affairs

Why did the Government decide to abolish the Grocery Commissioner before publicly releasing its analysis on grocery competition?

14:52

As I told the member last week, the Commerce (Commerce Commission Reform) Amendment Bill removes the statutory position of the Grocery Commissioner, but it does not the remove the powers or functions of that role. Those responsibilities will continue to be exercised by the Commerce Commission as a whole. The Government’s decision was based on its broader Commerce Commission reform programme, which is focused on strengthening governance, improving decision making, and ensuring regulatory functions are carried out by the commission collectively, rather than through a separate statutory office.

Point of order. Mr Speaker, the question was very specific and asked why the Government made that decision before publicly releasing the analysis on grocery competition. The Minister explained the rationale for making the decision, but in no way addressed the direct question as to why they did that before the information was released.

Well, it’s a bit hard to make that argument given that the Minister has just said that nothing is going to change with regards to the authority that that particular position had.

Speaking to the point of order, sir. With respect, sir, if Ministers are not required to specifically address a primary question, that completely undermines the point of question time. The House is in no way more informed as to why the Government decided to abolish the Grocery Commissioner before publicly releasing this analysis. It’s a straightforward question, it isn’t political in nature, and the House is reasonable in its expectation that we would be informed as to why—and we are not.

Point of order. It’s quite clear, sir—you’ve reminded us on many occasions—that Speakers’ rulings 206 and 207 give adequate cover for the pointed accuracy of that response. We’re getting to a point where we’re trivialising with your authority—please use it.

Thank you, Mr Jones. I’ll take that as an endorsement of some sort.

Speaking to that point of order, sir. I think the use of wording there by the Minister is quite telling. Ministers should not be seeking opportunities to provide cover. They should be complying with the clear direction under Speaker’s ruling 202/1 that for a question on notice—a primary question—the House has an expectation that it be addressed. It was not. The question was not “Why did the Government make this decision?”—that was the answer that was given. The question was “Why was it made before the information was released?”, and that in no way was addressed.

I think what we’ll do is ask the second part of the question again, if you can remember what it was.

Yes.

Well, it’s written down, so she should.

No, it’s—we were on a supplementary.

No, we weren’t, sir.

No.

Were we not? My apologies.

No, it was a primary.

OK. Well, in that case, we’ll make it clear: ask the question again.

OK. Why did the Government decide to abolish the Grocery Commissioner before publicly releasing its analysis on grocery competition?

This will clear this up: we did not need a further report to know that there were steps that we, as a Government, could take to improve the commission’s governance and regulatory framework.

Why won’t the Government release that analysis now, so that Parliament and the public can have an informed debate about grocery competition, instead of more posturing?

The Minister for Economic Growth is working through the potential grocery competition reforms. No decisions have been made, and the Minister for Economic Growth has made it clear that when she’s worked through that analysis, she will have more to say in the coming months.

Does he believe competition in the grocery sector is improving on his watch?

It seems that these supplementary questions, as I said last time, have been written before Statistics New Zealand came out on 21 July and confirmed that grocery prices are running at 2.8 percent. That’s in an annualised context. That’s a lot lower than 12.5 percent under the previous Labour Government.

Does he believe that lamb chops up 32 percent, cheese up 30 percent, and butter up 41 percent shows competition is improving?

Again, I was very encouraged by Statistics New Zealand’s release on grocery prices—as far as, on 21 July, in the year to June 30 2026, grocery inflation is running at 2.8 percent. That is a big improvement on 12.5 percent under the previous Labour Government.

Wasn’t it clear, Minister, that from the very beginning, when the commissioner job was first advertised—filled 15 months later—that the commissioner would be powerless to do any work of any value to the country in the first place?

We are looking forward to the delivery of the Commerce Commission reforms. We are looking forward to the delivery of the commerce amendment bill and the Fair Trading Amendment Bill, because that will give extra statutory responsibilities, including increasing the penalties for fair-trading breaches.

If he gets rid of the Grocery Commissioner while grocers charge more for groceries, which other businesses using their market power to charge higher prices can expect the same treatment?

I go back to my original answer. We are seeing grocery prices coming down from 12.5 percent annual inflation to 2.8 percent. That is a big improvement—that is a big improvement from where we were under the previous administration.

So he does want grocery prices to drop?

As the Prime Minister articulated early, we want things to fall within that inflationary band, and grocery prices have at 2.8 percent. In fact, inflation, if you take out diesel and petrol, has also fallen within the statutory band of 2.9 percent.

14:59 · to the Prime Minister

E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga?

[Does he stand by all of his Government’s statements and actions?]

Yes.

Does he stand by his Government’s record on appointments to the Crown entity boards given only approximately a quarter of the appointees were recruited through a publicly advertised process?

Yes, we have a series of appointments to make in any given year, and we do that with some rigour.

How can he claim his Government appoints people on merit when 75 percent of these senior roles were filled without the public ever being told the jobs existed?

I’m not sure what the member is referring to.

Why did only one out of every three of these roles appointed by his Government go to women?

Well, as I said, we have a rigorous Cabinet Appointment and Honours Committee (APH) conversation most weeks as a Cabinet committee—

So there’s just untalented women then, eh?

No, we go through a series of candidates. We have those discussions. We take that very seriously and we make sure that we promote the best people we can find into those positions.

Oh, the best people aren’t women.

That’s not what I said.

Does he then think women are less qualified for senior governance roles or—[Interruption]

Hang on, wait a minute. When someone is asking a question, everyone knows no one else speaks, not from the front row of the Government or the front row of the Opposition.

Does he think women are less qualified for senior governance roles or does he accept that his Government’s appointment process actively fails to appoint women?

In answer to the first leg of the question, absolutely not.

How can New Zealanders have confidence these are the best people for the job when so many appointments are made through shoulder taps instead of open competition?

I reject the characterisation of the question.

Supplementary.

Is this a supplementary?

Yes, it is.

Supplementary question—the Hon Nicola Grigg. [Interruption] But just wait for everyone to give you the courtesy of their silence.

Can the Prime Minister confirm that, for the sixth consecutive year, Crown-appointed positions have been held by over 50 percent of women?

Yes, I can, and I thank the member for the contribution she makes on the APH Committee where she often brings those facts to us.

Could I ask the Prime Minister: is it wise that, before making appointments with respect to women, you know what a woman is?

We’ll move now to question 12.

15:02 · to the Minister for Mental Health

What recent announcement has he made about introducing psychology assistants to deliver more mental health and addiction workers?

15:03

Good news. Last week, I was pleased to meet the first students on their first day training to become New Zealand’s first registered psychology assistants. This is a major milestone in delivering our Government’s plan to grow the front-line mental health workforce and to deliver faster access to support. Budget ‘26 invested $28.45 billion to establish this new workforce, supporting up to 150 new psychology assistants entering front-line services. Psychology assistants will work alongside registered psychologists providing low-intensity interventions, supporting assessments, monitoring progress, and delivering psychoeducation. This will free psychologists to spend more time with people who have the most complex needs, helping reduce wait times, and improving access to mental health support.

Why has the Government introduced the psychology assistant role?

Every year, many psychology graduates miss out on a limited number of postgraduate clinical psychology training places, and too many leave the profession altogether. This new pathway keeps talented graduates in the mental health workforce, helping New Zealanders today while building the skilled workforce we will need in the future. The Government’s mental health plan is delivering faster access to support more front-line workers and a better crisis response. These graduates will start training in 2026 and enter the workforce in 2027.

How will this new role improve access to mental health services?

Psychology assistants will provide evidence-based, low-intensity psychological support with the supervision of registered psychologists. By sharing appropriate clinical work, psychologists can focus on people with the most complex needs, allowing more New Zealanders to be seen sooner and helping reduce wait times. What’s really exciting, is there are two universities, both University of Canterbury and Auckland University of Technology, now delivering this new qualification—and more universities will start next year—as well as funding 150 of these new roles in front-line services.

What other steps is the Government taking to grow the front-line mental health and addiction workforce?

Another good question. This announcement builds on the significant investment this Government has already made to strengthen the mental health workforce. We are on track to double the number of clinical psychology interns. We’ve increased psychiatry registrar places by 50 percent, increased clinical psychology fulltime-equivalent by 10 percent, while growing the front-line mental health and addiction workforce by 11 percent since coming into office.

That concludes oral questions.

15:09

I move, That the sitting of the House today be extended into tomorrow morning to consider the committee stages of the Employment Leave Bill, the Crimes Amendment Bill, and the English Language Bill; the second readings of the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill and the Building and Construction Sector (Strengthening Occupational Licensing Regimes) Amendment Bill; and to hold a special debate on petitions.

Motion agreed to.

15:10

I move, That this House, noting that the Chief Justice has been consulted as required by section 7(3) of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004, recommend Her Excellency the Governor-General appoint Paul Norman Collins as Judicial Conduct Commissioner for a term of 5 years, under section 7(2) of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004.

Try saying that twice! The Judicial Conduct Commissioner is responsible for investigating and assessing complaints about the conduct of judges. It’s an important constitutional position. They must carry out a preliminary examination of complaints and determine whether a complaint is dismissed or whether any further action is taken; whether or not it’s referred to the relevant head of bench or, if it’s serious enough, it is recommended for a referral to a judicial conduct panel.

The Act provides for the appointment of a commissioner and deputy commissioner. The current commissioner, Mr Alan Ritchie, is not seeking reappointment. Appointments are made by the Governor-General on the recommendation of the House of Representatives for a term of not less than two years and not more than five years. When we look, as a House, for the qualities in a Judicial Conduct Commissioner, we look for analytical and decision-making skills, and good judgment and communication skills. Previous appointees have been senior and experienced legal practitioners with high standing in the community.

Mr Paul Collins is an Auckland barrister with nearly 40 years’ experience in legal practice, including practice before the courts and tribunals, at all levels and in a wide variety of jurisdictions. For the last 30 years, he has specialised in the law and practice relating to the regulation of the legal profession. That includes professional discipline at all levels, from standards committees to the Supreme Court, and he has also conducted public law and regulatory issues before the senior courts in judicial review applications and appeals. I can inform the House that the Chief Justice has been consulted as part of the appointment process and has expressed her support for the appointment of Mr Collins. The proposed appointment has also received support from the shadow Attorney-General, Vanushi Walters, and I thank her for that support. It is very important, I think, that this is a decision made by the House unanimously or, at least, by consensus.

Under Part 1 of Schedule 2 of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004, appointments can be made for a term of not less than two years and not more than five years, and I am proposing a five-year term for Mr Collins. The current commissioner, Mr Ritchie, was appointed in 2015, after first serving as a deputy commissioner. I’d like to recommend the Government’s appreciation and gratitude for the professional and conscientious manner in which Mr Ritchie has carried out his duties over the past 10 years. Thank you, sir.

15:13

Thank you, Mr Speaker. I rise to speak to the appointment of Paul Collins as the new Judicial Conduct Commissioner, and it’s an appointment that we support.

As a bit of history, before 2004, New Zealand had no formal independent mechanism. Complaints were, essentially, handled by the heads of each court, and it was with the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 that, for the first time, we brought in this independent office, really dedicated solely to receiving and assessing complaints about judicial conduct.

The office has a fairly narrow mandate to independently assess the conduct complained of and not judicial decisions themselves. That is a deliberately narrow mandate, because it sits beside a much larger principle that we should all defend in this House, which is judicial independence. Unlike most judicial appointments, which flow from the Attorney-General’s advice to the Governor-General, this commissioner is appointed by the Governor-General on the recommendation of the House, following, as the Attorney-General has pointed out, consultation with the Chief Justice. Parliament, the elected branch, is given a direct role in safeguarding the integrity of the judicial branch. This is really a constitutional choice. It is accountability for judicial conduct and recognising that that should not rest solely with the judiciary nor solely with the executive but should carry the authorisation of the people’s representatives. There are few offices in our system that ask this House to shoulder that kind of responsibility so directly, so this is an important motion in the House today.

That brings me to the outgoing commissioner, Alan Ritchie. Mr Ritchie’s association with this office goes back to 2011, when he became the first Deputy Judicial Conduct Commissioner before taking up the office of commissioner in 2015, meaning his stewardship of this young institution has spanned more than a decade—over half of its entire existence. In these roles, the office has delivered against the intentions it was created for—it has been independent, it has been transparent—and that is Alan Ritchie’s legacy, and this House owes him our thanks.

I won’t speak to Mr Collins’ background, as the Attorney-General has already laid that out for us, but I would say, as we now welcome Paul Collins to this role, we do so mindful of what is being handed on: an office that in many ways is still young, in constitutional terms, but already proven; a mandate that is narrow by design but essential in function, and a responsibility that this House uniquely, in many ways, has a direct hand in bestowing.

Judicial independence and judicial accountability are not opposing values. This office exists because they are companion values. I commend this appointment to the House, and I wish Paul Collins well in the work ahead.

The question is that the motion be agreed to.

15:17

Thank you, Mr Speaker. The Green Party does support the appointment Mr Paul Collins to the role of Judicial Conduct Commissioner, though it must be noted that the Green Party was not consulted on the appointment but was informed by the Attorney-General of such an appointment.

It’s important to first address some of the qualifications when it comes to Mr Collins, and I think the previous speaker, Vanushi Walters, as well as the Attorney-General have given a good overview of the existing role. In this case, I think Mr Collins, from the Green Party’s perspective, is well suited and well qualified for this particular role—particularly considering that he has been the author and also the editor of a number of key textbooks regarding the legal system of Aotearoa New Zealand, as well as being a convenor, and possibly the current convenor, of the New Zealand Law Society’s Ethics Committee, which does go hand in hand in terms of the role that we are currently discussing here.

I think it’s also important to note, as the previous speaker, Vanushi Walters, mentioned, that the importance of this role in terms of upholding the independence of our judicial system warrants a debate on this particular motion. I think it’s important to note that with regards to the role itself, as suggested by the Attorney-General, it was established under the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004. The commissioner is able to investigate the conduct both within and outside of the court of any judge, and in severe cases recommend to the Attorney-General the establishment of a Judicial Conduct Panel.

The main purpose of the empowering Act for this role is to enhance the public’s confidence in the judicial system, and I think that it’s incredibly vital, in this age, for the public to be able to uphold the standards and trust in the Judiciary. We are hoping that Mr Collins will be able to undertake such a role with the effectiveness of the outgoing Judicial Conduct Commissioner.

I think it is also important here to mention and address, in the last few minutes, the fact that, while we’re seeing the importance of this role in order to have public trust in the judiciary, we do not have a parallel system for parliamentarians for the executive. Indeed, we do see that we have the Commissioner for Parliamentary Standards, which has a very narrow scope and was only established in recent years, but that’s specifically to do with conduct within the Parliament and particularly from an employment perspective, however; it does not extend beyond the Parliament itself.

It is important to note that with the establishment of the Judicial Conduct Commissioner role in the 2004 Act, as I mentioned, it is to do with the enhancement of public systems. So we do think that it is important, if we do want to have the public trust, both in the judiciary but also in terms of our political system, that we should see similar standards being placed on parliamentarians as well as the executive, because what we have seen is that while the judiciary is doing its best to uphold the principle of comity and the separation of power between the legislature, the judiciary, and the executive, we haven’t seen the same courtesy extended from other roles, and, in fact, we do see a continued violation of that principle of comity.

So I think while we’re discussing the appointment of Mr Collins to the role of the Judicial Conduct Commissioner, it is important for us to also remind ourselves of the importance that is needed for us to be able to have the trust of the public in our standards and the standards of parliamentarians, Ministers, and other members of the executive as well. It is important for us to remember and realise what an honest political system looks like.

Interesting, but come to the motion.

So, with that, I do believe that while we’re seeing this role—and the Green Party does support this particular appointment, and the importance of the role of the Judicial Conduct Commissioner—we would like to see similar standards and similar accountability being placed on other branches of the Government.

Motion agreed to.

15:22

I present a legislative statement on the Infrastructure Funding and Financing Amendment Bill.

That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Infrastructure Funding and Financing Amendment Bill be now read a third time.

When I introduced this bill—some months ago, I have to say—I spoke of moving to a world in which the economics of development dictate where and how it happens, rather than artificial planning rules which have held our cities back. That is the central thesis of the Infrastructure Funding and Financing Amendment Bill, and it remains so after the Finance and Expenditure Committee scrutiny and the committee of the whole House last week. I want to thank both the select committee and Parliament for the very generous and supportive way that the House has worked through what is quite a complicated bill but with a simple proposition at its core.

Our housing crisis requires a flexible tool kit of funding and financing instruments that mean development can happen where it makes the most sense, and that’s Pillar Two of the Government’s Going for Housing Growth programme. Through Pillar One, we are moving to a system where competitive urban land markets and abundant development opportunities in our land markets and our planning and resource management system means councils will not be able to artificially constrain the supply of developable land through planning restrictions. It’s fine to unlock land through removing the planning restrictions, but you also need an infrastructure system that equally has a flexible supply of development opportunities that are able to be funded and financed. That’s what Pillar Two is all about, and that’s where this bill comes into effect.

The original Act that we’re now replacing started life, actually, under the last National Government: was, essentially, developed by Bill English and Nick Smith in 2016 and 2017; didn’t quite make its way into law by the time of the 2017 election; was picked up by the Hon Phil Twyford and others and eventually passed into law in 2020. I think it would be fair to say, given we’re now making some amendments to the Act, it hasn’t quite delivered on the promises that were intended, and that is why the Government campaigned, or at least certainly the National Party campaigned, on refining and tweaking the Act to make it more user-friendly and make it easier to use.

Since the Act has come into effect, only three levies have been established, and that’s in—what?—six years or so, so that’s one every two years. Actually, it hasn’t really been used for what it was originally designed for, which is new housing projects. Instead, we’ve got the sludge plant in Wellington, and we’ve had a citywide transport project in Tauranga, which is useful up to a point. Only just actually this year, have we seen the first greenfields housing project, which is Te Awa Lakes in Hamilton, which the Government was very pleased to see and I turned the sod on some weeks ago, alongside Ryan Hamilton—very hard-working member for Hamilton East.

The bill makes some changes to make it more usable and viable. We’re streamlining the levy approvals process. This includes simplifying requirements for levy proposals and recommendation reports, simplifying mandatory considerations the Minister of Housing has to take into account when assessing a levy, improving certainty for developer-led proposals by limiting councils’ ability to withhold necessary endorsements where statutory requirements have been met, and removing the requirement to assess a levy’s affordability for those proposals supported by developers and all other existing landowners.

The bill also broadens the scope of the Act to improve its flexibility and viability for a range of infrastructure projects. This is a particularly important change. It hasn’t received a lot of public commentary, I have to say. I mean, it’s a complicated piece of legislation; it’d be fair to say the Infrastructure Funding and Financing Act (IFF Act) itself has not received a huge amount of public commentary. But this is very important, because once this amendment Act comes into effect, it will allow the IFF Act to be used for transport projects delivered by the New Zealand Transport Agency or KiwiRail or water infrastructure organisations established through the most recent round of water reforms.

What that means is, essentially, it’s a more granular form of user-pays: the beneficiaries of infrastructure projects will be required to help pay for some of the benefits that they receive. You know, people got pretty excited over the last 10, 15 years in this Parliament about value capture tools and cost recovery and all sorts of things. There were lots of terms thrown around, and some of the tools overseas are quite complicated. This is a form of cost recovery in which, you know, new State highways that unlock land and there’s a bit of a value that accrues to that land because of the public investment—it means that those who benefit from that public investment can help cover some of the costs of that public investment. If we’d had a tool like this back in the day of the City Rail Link, it could’ve potentially been one of the funding tools available to help offset the enormous cost of City Rail Link. There will be other projects in the future—and it’s probably not appropriate to talk about those projects here, but there will be other projects where the ability to have, essentially, a user levy will be useful. It’s part of broadening the funding tool kit. That’s what it’s about. It won’t always be appropriate in every situation and it won’t be the default, but it’s about broadening the funding tool kit so that we can help address our infrastructure deficit.

I do want to thank the select committee for the hard work on the bill. The Hon James Meager spoke on my behalf during the committee stage. I was here for most of the committee stage, but he spoke in the second reading, and I want to acknowledge the changes made. Changes include a requirement to assess cumulative levy affordability, a requirement for levy proposals to include details of any consultation undertaken, and for a court judgment to be required on funding and financing costs in the case that a special purpose vehicle seeks to use the accelerated recovery mechanism. So there have been a variety of sensible changes made at the select committee.

The Government is looking forward to receiving levy proposals under the new and improved Act in the future, and we’d encourage councils and developers and other infrastructure providers to consider the IFF Act as a potential funding and financing solution.

One of the things that I have to say I do find slightly frustrating about the local government sector is it’s kind of become de rigueur to say, “We need new tools.”, and when you say to people in local government, “Well, have you heard about a thing called the Infrastructure Funding and Financing Act 2020?”—which, by the way, has been on the statute book for, now, six years—they say, “No, I’ve got no idea what that is.” The Infrastructure Funding and Financing Act is actually normally what they mean when they talk about “We need a broader range of tools to fund and finance infrastructure.”, and the answer is “Yes, we agree, and it’s actually been on the statute book for five years.”

It’s not perfect, which is why we’re about to pass an amendment Act to make it easier to use, but the level of knowledge is a bit frustrating. It’s probably not so much a criticism of local government so much as, I suppose, the political system in Wellington itself, where we haven’t been good enough at promoting the use of this tool, and there’s probably a lesson there for all of us. When local government says, “We need new tools and we need new arrangements so that we can get on and build infrastructure.”, I agree with them, and this is one of the solutions that’s there.

The other point I’d often make is that people often say that we need to have a form of targeted rates, but they exist in the Local Government Act now. They can be used now, and, actually, sometimes what it takes is a bit of creativity, thinking a bit outside the box, and just moving away from the simple “Oh well, here are some rates. We’ll just chuck the rates up and spread the costs over everybody and hope for the best.” Actually, the system we’re moving to is a much more kind of granular, calibrated form of cost in which high infrastructure costs are reflected in the pricing for that infrastructure, and over time that will lead to more sensible and efficient investment decisions.

The IFF Act is part of that because it may be that someone wants to do a greenfields housing development and they may go out and say, “Righty-o, I’m going to set up a special purpose levy in order to fund the infrastructure.”, and it may be that there are no buyers for that. It may be that people say, “You know what, the costs of that infrastructure are so vast, we’re not going to do it.”, and that’s fine. That is actually the market working—that is economics in action. Again, one of the other benefits of this model that we’re setting up through the IFF Act is to let costs be reflected in prices. That is a good thing, and it is part of the move towards getting better value for money when it comes to infrastructure.

Anyway, I’ve talked for long enough. I want to thank the House for the support that has been provided to the Government in relation to this bill on the way through. I thank all members for the constructive way that they’ve approached this. Notwithstanding its technically complicated language and its long title, this is actually a very important piece of legislation as part of the Government’s reform agenda, and I commend the bill to the House.

15:32

Thank you, Mr Speaker. The Labour Party lends it support, as it has done throughout the parliamentary process, to the Infrastructure Funding and Financing Amendment Bill. That’s not to suggest that we have been completely comfortable with every single aspect of this bill, but, frankly, we’re of the view that both the local government sector and the infrastructure sector, such as it is—which has a very broad way of bringing in many, many sectors—want to see this Parliament working together. We keep hearing time and time and time again that people are sick and tired of the stop-start carry-on that we’ve seen in this Parliament too long and too often. There are many examples in this Parliament alone, but there were examples in previous parliaments as well, and, at the end of the day, if we can’t agree on the settings around infrastructure, we haven’t got a hope of achieving what this country needs to do for getting anywhere near addressing the infrastructure deficit that this country faces.

So often in the past perfect has been the enemy of the good, as the saying goes, and both sides of the House have opposed things because it’s not quite perfect, or whatever. Now, we’re not saying that this bill is perfect. There are elements that we’ve expressed concern about, but nevertheless we have worked constructively with the Government through the select committee process and through the committee of the whole House to try and identify areas where it can be improved, and there have been improvements through that process.

We would be much further along as a country if Parliament had looked for a compromise wherever possible and had actually looked to stick to its guns on bills like this, where we could have actually helped to get things along further. This actually does demonstrate continuity across parliaments, which, unfortunately, isn’t all that common, and so, as the Minister for Infrastructure outlined in his contribution, the previous Government had put forward the original bill. That had started in the previous Parliament before that, and now, after a period of time, it’s become clear that there needed to be some improvements to make it more effective and easier to utilise for the sector.

I don’t share the Minister’s slightly dismissive attitude towards local government. I don’t think it is as simple as them not being aware of the legislation and not being able to use it. The fact of the matter is that with the best intentions and, as I say, work across successive Governments, it wasn’t quite right. This bill has gone a long way to addressing that, and I am confident, actually, that more local councils will start to utilise this in order to be able to unlock some infrastructure projects in their own areas.

It is important to note, though, that because it is linked to this, it could quite easily have been our local government spokesperson leading off the Labour Party’s contribution to this. Yes, it’s an infrastructure bill, but it is very much a local government bill as well, and, as the Minister mentioned local government in his contribution, it’s entirely appropriate for us to talk about this and in some detail, actually, because this alone won’t fix things.

The local government sector is facing tremendous challenges and some of it is not of their making, frankly, because current councils are dealing with problems that they themselves have inherited in part from, in some cases, decisions made by previous councils but also the situation that is set by Government policy. So when we are considering what this bill can do to assist councils to unlock infrastructure, we also need to acknowledge that councils are facing a rates cap policy which might ultimately lead to fewer infrastructure projects getting funded, even with this mechanism to assist with getting projects procured and funded off councils’ books. That is crucial because many councils around the country are at their debt caps and they simply don’t have the ratepayer base to be able to address the infrastructure needs that they have. Also the changes that were made by this Government around water have not worked like it said that they would, and now many councils are facing the prospect of being part of a water entity that doesn’t have the scale and that cannot deliver the cost savings to their ratepayers.

That’s important because at the end of the day, if the broader settings for local government aren’t addressed, what could happen from this is that it could end up putting further costs on to ratepayers through other fees and other levies that aren’t necessarily rates, and that could undermine the intent of this. We hope that that doesn’t happen, but it’s important that we recognise that that is a risk because at the end of the day, whilst the Government has signalled that it intends to see reorganisation of councils, there’s a massive question as to how that’s going to land. There is a three-month period by which regions need to put forward proposals, there’s no guarantee that even after all that work those proposals will be accepted, and it’s possible that the Ministers may decide that they will put forward or will decide on an alternative proposal that is completely different to what the regions have put forward.

Now, let’s say for argument’s sake that they decide on having a number of unitary authorities across the country. There are, roughly, 16 regional councils at the moment, and so for the sake of this argument, we could say that it’s 16. Then we’ve got a situation where this bill needs to be applied within a situation where we have 16 unitary authorities and 40-odd water entities. How is that going to work? It’s a relevant question that we haven’t had an answer to, and whilst we do support this and we think it’s important, and we also think it’s important to acknowledge that occasions like this, where Parliament has agreed on something—which happens more than people realise.

I spend a lot of my time, actually, as infrastructure spokesperson, talking to this sector and emphasising the areas that we are working on alongside the Government, but it is also important that whilst we are working together and we’ve come to an agreement on how this can progress, we’ve got to acknowledge the challenges that are faced, as well. If we are in a situation where we have a number of unitary authorities, potentially against the will of those areas, and a larger number of water entities, it’s possible that that scenario could significantly undermine the intent of this bill. In the context of a rates cap, as well, it’s possible that the work that is required—be it through water, be it through roading, be it through housing developments—simply might not be able to go ahead. Again, that goes against the intent of this bill.

So, yes, we are confident that this will lead to more infrastructure projects going ahead than would otherwise be the case if this bill doesn’t pass, but it is important to recognise, in our view, that with a rates cap coming, with the way that the water reform has landed, and with the massive question mark hanging over the local government sector in the Government’s proposed restructure, we’re not fully confident that this bill could reach its potential. If those things are addressed, and we have a rational conversation about rates caps and the examples overseas, where they have simply led to a large number of exemptions so that they become pointless, or a significant increase in alternative fees and levies, and the structure of local government isn’t linked adequately to water so that we see unnecessary rises—if this ends up, this bill included, in simply increasing the cost on ratepayers, then we’re back where we started. It is important to make that point.

Having said all that, with this bill passing, it does give local government as it currently exists more options than are currently available. Yes, as the Minister pointed out, this was available previously. But given there’s only a couple of examples where this has been utilised, I think it’s fair to say that this bill is needed, because it does clarify the way in which it’s done, it’s made it more streamlined, it’s made it—hopefully—a bit more user-friendly, and it makes it easier for the local government sector to utilise the funding mechanisms and financing mechanisms that are outlined in this bill. On that basis, having taken into consideration all of those things, it is in everybody’s interest—the local government sector, the infrastructure sector, construction and water, and ratepayers—that Parliament passes this bill today.

15:42

Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. We have a massive infrastructure challenge, and it goes back some decades, I think. It’s largely been because of the neoliberal reforms in the 1980s and 1990s, and nothing has really fundamentally changed since then. The whole attitude that we’re not collectively pooling our resources appropriately through a progressive tax system that sufficiently devolves funding to local government has constrained local government’s ability—and Government’s ability—to invest in the infrastructure that our communities want and need.

With climate change, there’s a massive need to change our infrastructure. Climate change is impacting our communities right now, and there’s going to be a need to adapt and invest in significant infrastructure. We’re having to recover from regular extreme weather events that are impacting our public infrastructure, water, roads, and homes, and it also has some impact on electricity; and the infrastructure we build fundamentally influences our contribution to dangerous climate change. And so, for the last 20 years, successive Governments have been investing in the wrong transport infrastructure that is not doing what we could be doing to have much more affordable transport, much more affordable housing, much lower emissions, and lower pollution. It’s time that we start doing those things.

The origin of this bill—and this is an amendment bill—is the first Infrastructure Funding and Financing Amendment Bill, which the Green Party supported. At the same time, I was saying to the Government of the day, which was then the Labour - New Zealand First coalition that the Greens were giving confidence and supply to, that, firstly, you can’t really solve the funding problem unless you raise revenue somehow. That’s what this does. It provides a mechanism that’s not general taxation; that’s not rates for raising revenue from people. I mean, we could be doing it through taxation, and the issue is we’re not raising enough revenue through taxation, and, therefore, there’s a problem where there’s a constraint on the infrastructure. It’s not fundamentally going to solve the funding problem without impacting people somehow. People will have to pay more. The question is whether this the best way to raise the revenue or whether it is better to pool our resources and do it through general taxation, as so many highly successful small, developed countries do, and that I think New Zealand could learn from.

The second issue is that we really cannot conflate funding and financing. Financing, again, is something that Government could do. Central government can finance more cheaply than the private sector and better than the local government sector, because of the fundamental revenue problem that local government is facing and has been facing. The review of local government undertaken by the last Government made that very clear. What we need is a more progressive tax system that, actually, will tax work less and that will tax passive income from asset ownership fairly—which we don’t have—and then we’ll have more money. With that money—more public money; the money we have that we use together—we can invest in the infrastructure we need.

Look, I can see some small areas where this sort of tool might be helpful and useful in ensuring that we have both financing and funding for some of the infrastructure we need. But it doesn’t change the fact that if you go to other countries and look at the way they’re doing things, most of them aren’t doing it this way, right? Most of them are doing it through general taxation. In countries with really excellent public infrastructure that is helping people move around and that’s creating more productive cities, more affordable cities, and cleaner air, that is being funded by tax, and they have more tax on the wealthiest people and less tax on low-income workers. That’s what the Green Party is calling for here. It’s just, like, so basic, but somehow the Government parties are in absolute denial. They just don’t really have the curiosity to understand how things work, and they love repeating their silly attack lines that are thought up for them by Topham Guerin or whoever their consultants are, and whatever plays well on the Facebook algorithms—

The financing is related to the bill, but it might be nice to be a little bit more specific about the bill. Thank you.

Sure. I’d just say that it’s kind of a shame that we’ve spent a decade not addressing the fundamental problem with funding and financing infrastructure, which is the inadequacy of our tax system and the fact that our tax system is funnelling most of the money—like, 90 percent—to central government rather than just giving it to local communities and allowing them to make smart decisions, which they would, because local communities know what their priorities are. We don’t need the Minister of Transport telling local communities what to build or what the speed limit should be in their local communities. We should just be providing local government with the resources to do their job. That’s what the Green Party is arguing for.

I’m not in the least bit surprised that there wasn’t much uptake with the first iteration of this Act. Frankly, I’m not sure of the amendments made by the select committee, even though we support it. One of the biggest concerns, I think, is removing the requirement to assess a levy’s affordability for proposals supported by private developers. I mean, it’s just a subset of public infrastructure money in a way, just limited to a particular private development, and, ultimately, the people who buy into that development will be paying the levy for 10, 20, or 30 years. That doesn’t make it more affordable. That’s still a cost for people. If the development is happening in the wrong place with really high costs, it’s going to be a problem. That’s why it makes sense to have more Government leadership and a more collective approach to master planning, to what gets built where. Fundamentally, private developers are totally capable of doing a development, but they’re looking at it from the point of view of the land they already own, not what’s in the best interests of the community, and they’re trying to maximise their return off this one little piece of land. That just doesn’t work, looking at it in a disconnected way, because, fundamentally, where you live, where your kids go to school, where one works, and where one’s partner works—all of that is all interconnected. You can’t just go live in a fully private development and have all your needs met. Ultimately, the infrastructure connecting to that private development is still mostly public infrastructure.

I just think this is a big, roundabout way of avoiding the fact that successive Governments are not raising enough revenue from the super wealthy, are not investing enough in the right infrastructure, and especially are not devolving enough power and funding to local government. This Government is making things worse. The previous speaker, a former Minister of Local Government, absolutely nailed the point: right now, local government is being forced to go through these discussions about amalgamation, yet another unfunded mandate has been put on them, where they’re going to have to somehow find the resource to go about and consult their communities under this ridiculously short time frame, which is totally unrealistic and not conducive to coming up with a good structure that’s actually going to deliver for communities—not to mention the fact that Local Water Done Well totally doesn’t align with the idea of 16 unitary authorities.

If we just had a little more forethought and if we were just thinking a little further ahead and being a little more curious as a country about how other countries do things, instead of just buying into certain beliefs about how things have to be done, we’d make better decisions. I don’t oppose the bill, but I don’t think the bill is the solution to the problem that we’re facing. On a case by case basis, we might prefer development contributions or borrowing by local or central government. This is an additional tool, but it doesn’t fundamentally change the fact that if we want infrastructure that serves us, we’re going to have to pay for it; we’re going to have to pay a lot more than what we have been paying. If we did it in a coordinated way and if we built up our public institutions to have the capability and the capacity to do the proper planning with our communities and to properly procure the infrastructure and to have more capability in-house to do this, it would cost us less money and we’d have more long-term planning.

The bill’s fine—whatever. It’s not really what we need. I can imagine it’ll be used for some good projects; that’ll be good. I can imagine it will be used for some crap projects that cost people a tonne of money, and people will look back on Governments and say, “Why didn’t we do better?” The Green Party has a very clear plan and a very well argued rationale—evidence based—for how we can actually deliver for the future for our communities.

15:52

Thank you, Madam Speaker. Today’s third reading of the Infrastructure Funding and Financing Amendment Bill marks an important milestone in making it easier for developments to get off the ground through innovative approaches to funding and financing infrastructure. For decades, we’ve had a planning and infrastructure funding system that made it too hard to build the homes New Zealanders need. That’s why this Government is committed to Going for Housing Growth, a comprehensive work programme to unlock development.

The three pillars of the programme are freeing up land for urban development and removing unnecessary planning barriers—that’s through wholesale planning reform, getting rid of the Resource Management Act and replacing it with two new bills—improving infrastructure funding and financing tools so councils and developers can better fund the pipes, the roads, and the other infrastructure needed to support growth; and directly improving the incentives for councils to support housing growth. That’s kick-started by the $400 million Incentives for Growth Fund in the Budget to ensure that councils and communities can share the economic upside that growth affords. Increasing the effectiveness of the Infrastructure Funding and Financing Act (IFF) is a key component of that second pillar of the Government’s Going for Housing Growth programme.

The Act was originally born out of a market innovation success story where a developer established a pathway to build the infrastructure needed for the Milldale development without having to contend with council infrastructure funding and debt constraints, yet while it was intended to codify this approach to replicate the Milldale success, the IFF Act has fallen short of delivering the additional infrastructure needed to respond to growth, as Minister Chris Bishop, my colleague in delivering this legislation, pointed out. The extensive process required for applicants to have a levy approved and the associated costs of that process can be a barrier when trying to use the Act. To date, only three levies have been authorised.

We’re making it more viable and flexible so councils and developers can get on with building the infrastructure our growing communities need. This amendment bill will remove those unnecessary barriers to uptake, broaden project eligibility, and make the levy development and approvals process simpler and more streamlined. This bill makes various changes to support those developer-led proposals. It requires levy and infrastructure authorities like councils to provide the necessary endorsements where statutory requirements are met, limiting avenues for councils to obstruct approval of development.

That’s important.

That means—that’s right—faster decisions, fewer vetoes, and more developer-led infrastructure projects being built. It removes ministerial affordability assessment requirements where a proposal is supported by a developer and all the other existing landowners. In greenfield areas, levy payers will self-assess affordability. In other words, they’ll work out if they can afford it themselves and opt in to the levy when deciding to purchase a property. As such, ministerial consideration of whether a levy is affordable is simply not needed if the existing landowners are supportive. To the member Julie Anne Genter, that is the property market working.

This bill simplifies the mandatory considerations the responsible Minister must take into account, however, when assessing a levy. This in turn will reduce the extent of supporting evidence applications need to include in their proposals and the cost and time taken needed to evaluate them. The bill also extends eligibility from council- and developer-led projects to projects delivered by the New Zealand Transport Agency (NZTA), KiwiRail, and the new water service organisations. If it’s good enough for the private sector, it’s good enough for all of these entities as well. This is expected to help accelerate the delivery of key growth projects in the infrastructure pipeline, while ensuring the beneficiaries of those projects pay their fair share of the cost.

These changes—alongside other minor, technical, and remedial changes—will cut down on unnecessary process and bureaucracy. Red tape—we’re going to cut it with this bill and deliver a more usable pathway that can be accessed by developers and others to deliver infrastructure that may not have been planned for by councils. Imagine that! Councils failed to plan. But developers, the private sector, and now NZTA, KiwiRail, and the water agencies will be able to use this tool.

Last month, the Finance and Expenditure Committee reported back to the House on this amendment bill, and they recommended it be passed with a number of changes to various clauses. I’d like to thank the members of the Finance and Expenditure Committee for their careful consideration of the bill, and those members of the public who submitted and took the time to provide oral and written submissions. Their input has helped strengthen the bill that is currently before the House.

Important improvements that were progressed included that operational and maintenance—OPEX—costs can now be included in a levy proposal, and that means that those costs can be funded by levy revenue. It’s a sensible change which means instead of just paying for the capital cost of a new asset, the full funding and financing solution will include OPEX that may—in fact, we consider it’s a predict; it will—increase uptake and use of the Act, and it’s expected to better encourage procuring, operating, and maintaining assets based on whole-of-life costs.

A change has also been made to require written notification of endorsement decisions to be given as soon as practical. This is expected to reduce the risk of unnecessary delay, particularly by councils, for those proposing a levy, because if houses aren’t getting built because the infrastructure is not there, it must be sped up. This bill is a key enabler of flexible, market-led housing growth that sees councils relinquish some of their unnecessary control over what gets built where. Our Planning Bill, separately, will facilitate responsive planning rights to develop. Another thing that the infrastructure bill provides is a critical pathway for developer-led infrastructure that turns the planning rights into real development.

We are unlocking the infrastructure block. It’s also, therefore, fitting that these planning and infrastructure streams now come together under the same Ministry for Cities, Environment, Regions and Transport—MCERT—roof. On that note, I’d like to thank Jane and her team of housing and urban development officials for their hard work on this bill. Thanks also to officials at National Infrastructure Funding and Financing, Treasury, and the Parliamentary Counsel Office.

Overall, this bill is expected to improve the workability and effectiveness of the Act so that councils, developers, and other infrastructure providers can get on and build the essential infrastructure that our towns and cities need. This is how we unlock New Zealand’s potential. I commend this bill to the House.

16:00

I rise on behalf of New Zealand First to support this piece of legislation, which had unanimous support as it went through the select committee process, and that is very welcome. This is a tool to support urban development, as you’ve just heard. You’ve heard all the details from Simon Court, so I’m not going to re-traverse those, except at a very high level.

The bill’s about streamlining the Infrastructure Funding and Financing (IFF) levy process, making it easier to establish, and also taking a more flexible approach. I’m really pleased in particular to see the ability for the New Zealand Transport Agency, KiwiRail, organisations like that, developers, water organisations, to be able to establish IFF levies.

Why am I particularly keen on that? If you look at some of the developments, particularly motorway developments or rail developments that have occurred, what has happened as a result of that is it’s opened up land. It’s allowed land to be developed; it’s made that land more valuable. But at the moment, the ticket hasn’t been clipped. It’s not the public sector that’s gained from that. It’s not those organisations that have spent that money. It is the private developer. This is about capturing some of that value. I think about some of the developed—say in Wellington, for example. Kelburn, developed off the cable car development. If there hadn’t been the cable car there, you probably wouldn’t have had Kelburn being developed at the time it was. You look at the development right out through the Hutt Valley again, developed off the rail network. This is something which has been done for many, many years and it’s right and proper that we do use some sort of legislation like this to allow the costs of some of that development to be defrayed.

I think about some of the potential development in Auckland. KiwiRail needs to develop the rail network there; if it doesn’t develop the rail network the freight network is going to get fouled up with all the commuter rail traffic. It needs to be able to develop around that. Can we manage to integrate the development of housing alongside, and help pay for, the infrastructure development? That would make a whole lot of sense, because otherwise some of that infrastructure won’t get built at all. It’s great that we have a more flexible approach, that the SPV, special purpose vehicles, do not have to be a council.

It takes funding tools. Obviously, it’s not a council, but even if it is a council, it allows councils to take development of particular assets off the council’s books. Minister Bishop said that there were only three of these, and the councils don’t know anything about these. I don’t think he’s right there. I think Kieran McAnulty was quite right about that. Councils do know about these. In fact, it was my council that actually did one of those three. It was the sludge pellet plant in Wellington. We did that because we were topping out in terms of the amount that we could borrow, needed to do it that way. But let’s not kid ourselves: this is not a free ride. There is no magic money tree here, because in that situation and in many of these, the cost of that is still going to land essentially on the same people. The unfortunate thing in the case of the Wellington sludge plant is it started off at $200 million; we went for what was then the best option out of about 40-odd. The new council came in, the price doubled, and what they didn’t do is go back and say, “Was that still the best technology?” I think they mucked that up, and of course it ended up at $500 million, not $200 million—but there we go. So we did have some experience of doing that.

The funding tool, as I said, is off council’s balance sheet, but the cost still lands potentially on some of the same people. What I was pleased to see is the select committee’s amendment in clause 17, and that’s looking at cumulative affordability. So you can’t just add and add and add because there is only so much. That’s where things like the rates cap are really important, that we can’t have councils spending far too much. Councils do want more tools. They’ve also got to be disciplined in how they spend the money they’ve got. So it was really pleasing, actually, to hear the Hon Julie Anne Genter saying that there is no magic money tree. That’s not something which you often hear from the Green Party, so it was nice to hear that recognition at least, at least in this context.

One other thing that I wanted to comment on is this idea that it means that development will go where it makes the most sense. And yes, it does send a market signal. If the cost of infrastructure is really high, it is less likely the development is going to go there. That’s a really important signal, because we haven’t been particularly good in this country about targeting investment to the right places.

I would say that councils do go through a very long process—spatial planning process, district planning processes, as they have been—sometimes over decades to get to the stage of saying, “Here is our plan; we’ve consulted with our community; here is where it makes the most sense to do development.” And then we have these out-of-centre developments, these private plan changes. I know it drives them nuts, and it’s not just Auckland, but it’s Canterbury councils, councils all over the place. It drives them nuts that you go through all this process and then development is allowed to occur somewhere else. That’s probably fine, if the development pays all the costs and if the quality of the infrastructure is up to scratch. Sometimes it’s not, on both counts, and that is a real issue, and we shouldn’t kid ourselves about that.

We need to make sure that development is done properly and it does pay its true costs. It’s very easy to say the landowner supports, but if you’re the developer who owns the land or you’ve got a deal with the landowner to do a development there, and the landowner is going to benefit from it, of course they’re going to say it’s a great thing to do. But as I said, it’s important that we are eyes open on these issues, because quality is important.

User pays is an important signal, but we need to make sure that the development which is done is encouraged where the infrastructure is genuinely of lower cost, but not where we’re just hiding that cost and it’s got to get picked up in the future. I know that is a real issue, as I said, for many councils. With that, I, on behalf of New Zealand First, commend this bill to the House and look forward with a great deal of interest to see how it is implemented, because I think we should all be very cognisant of that.

16:06

I rise to support the Infrastructure Funding and Financing Amendment Bill at its third reading, and it’s a pleasure to be able to agree with a number of the statements across different parties today. But we do have to remember that we are a country of 5 million, spread out over a very vulnerable set of land issues. You only have to look at the South Wairarapa to see the increasing costs of fixing those bridges, the coastal roads, and so forth. It’s a welcome change from central government punching down on local government; we actually have an alternative to “you must always spend less”, which is quite unrealistic when you look at the costs for just roading maintenance in our rural councils. The Tararua District Council has got longer roading distance in kilometres than Auckland Council, and yet they have a tiny ratepayer base.

This won’t solve everything by any means, but it is a step in the right direction, and I particularly like what Mr Court said about it including OPEX now, because that’s been one of the issues. We scrabble together and get the money to build something, but we don’t properly finance its maintenance. Whether it’s the New Zealand Infrastructure Commission, or other organisations, or people seeing the flooding in their own rohe, that’s something we have to do better.

I did want to talk a little bit about whether it potentially encourages better infrastructure on brownfield sites. Potentially, it’s a value uplift that would enable things like light rail, or whether it encourages urban sprawl. I think that this bill is pretty neutral about where you should build. My concern is that people talk about, “If all the infrastructure can be funded, the private developers will go ahead and it’s a market-led development. It’ll happen where it best happens.” The trouble is that many people can only afford the cheapest house, so their costs for transport will be higher if they’re going out to a greenfield site. There’s the fact that they won’t have a nearby school, the fact that they won’t have a community centre. They can’t factor that into buying a house, or they often don’t.

I look back to the development of Churton Park, which was many years in the building before it had a community centre, which we opened when I was mayor. But all of the people that lived there for a number of years beforehand had no community centre, no library, no supermarket, and therefore it was at least two cars per household, which is an expense that isn’t necessarily factored into “I can afford that mortgage.” I think we need to think broadly about infrastructure and community infrastructure as well. The other area that I’m interested in—I believe it’s unlikely but it’s possible that this bill could include investment in natural infrastructure. When I went to the Gisborne area and walked up into the Raukūmara Range with kaumātua from there, it was plain that the destruction of the forest understorey was one of the things that contributed to the flooding and the gravel that came down into the river. I think it was something like 14 meters higher than previously, which is extremely expensive, destructive, and difficult.

I hope we could consider how stormwater, whether it’s done by councils or water authorities, could possibly incorporate flooding resilience through natural and, in the long term, cheaper mechanisms than always being bulldozers and concrete.

16:11

Madam Speaker, thanks for the opportunity to speak on this. I’m really proud of the work that the Finance and Expenditure Committee did, and it’s great to see it come through the House in what looks like will be an anonymous passing—

Anonymous? Unanimous.

Unanimous; thank you, Mr Seymour. I’d also like to acknowledge some of the officials up in the gallery watching this come through the third reading. It’s wonderful. The first iteration of the infrastructure fund (IF) was actually a housing infrastructure fund (HIF), which was a housing infrastructure loan, and Hamilton City Council took that out, which was a great way to unlock some development. The challenge with a HIF is that it still sits on the council’s balance sheet, and the great thing about an IF is that it sits off the council’s balance sheet, so we actually want to biff the HIF and get an IF.

This is really great because Te Awa Lakes is a great development north of Hamilton, and they are actually the fourth property development to get an IF $50 million loan, which unlocks 2,500 homes. In fact, by unlocking these homes, further homes can actually be unlocked further up because of the conjoined and connected infrastructure.

This is a fantastic thing we’d like to add to our toolbox. It’s great to see it come past the third reading, and it’ll be a great tool for the funding and financing to make the funding options less binary from just council and developers now that we’ve got a third option. I commend it to the House.

16:12

Thank you, Madam Speaker, and thank you for the opportunity to also make a contribution on this bill. There’s been some interesting contributions so far, and the bill is obviously supported. It’s not universally agreed that it’s anything close to the perfect solution, but it is something that Labour is happy to support. We’re particularly able to do so given some of the changes that were made at the Finance and Expenditure Committee.

I think my colleague the Hon Kieran McAnulty said earlier that it does require us to continue to keep a close eye on some of the potential for some of those implementation roadblocks to occur, particularly with regard to how, ultimately, the cost is passed on, or passed around, from Government to local government and, ultimately, on to the consumer. But we do support this bill, particularly with the safeguards, as I’ve said, that had been added at the select committee process. I’d like to acknowledge the select committee and all of the contributions that were made by submitters through that process—it was an interesting process—and also take the opportunity to acknowledge officials and all of the people that worked on this bill as we’re here at this third reading.

The infrastructure financing tools, obviously, as we’ve heard today, do have the potential to unlock some projects, particularly around housing. As we’ve heard, this has been broadened into transport and other projects, including water projects, which does raise a little bit of a red flag which I’ll come to soon. Our main concern is that they must not become a way of just simply quietly transferring costs and, more importantly, also the risks on to households while also weakening that local accountability. Our position, therefore, is relatively straightforward: we just think that, whilst it’s good to have tools— and we acknowledge the positive contributions that have been made from the Government side—and tools are fine, they do need to be workable. They have to also be fair, they need to be affordable and not lead to extra costs, and I think, really importantly, they must be transparent and subject to proper democratic and legal safeguards.

With regard to financing, I think the number one issue is that it doesn’t undermine affordability in a context and a circumstance that we find ourselves in at the moment where affordability, and particularly affordability for households, is such a major concern. We know that it’s at the forefront of most people’s thinking at the moment, and we know that this Government doesn’t have a track record of doing anything positive to actually reduce costs or to have done anything like what they promised before the election to make life more affordable. We don’t want this to be something that actually adds to that.

On the one hand, while we are perfectly supportive of finding new ways to fund infrastructure, those costs don’t just disappear because there’s another mechanism in town. Simply because local body infrastructure will then be collecting through a levy rather than rates or taxes, it doesn’t mean that the costs disappear. It just means that there’s a different way of paying for it. If those levies can remain on a property for 30 to 50 years, it’s not inconceivable that a developer or a current landowner may be perfectly happy to agree to those levies today but the people who then go on to eventually buy those houses may have no involvement in that decision. A family purchasing a new home could face mortgage repayments, they will face council rates, often water charges, and an additional levy on top of that. It all adds up. Each cost can seem quite manageable in isolation, but considered together, they actually do have quite a material effect on affordability. We, therefore, welcome what the select committee did through that process of ensuring that the Minister of Housing has to consider those cumulative effects, or those cumulative impacts of existing charges on top of what this levy could add. We do, however, remain concerned that the affordability test itself can still be set aside in certain circumstances where developers or existing owners support the proposal, at least initially.

With regard to transport costs, we’ve heard that there’s a broadening through this process, and the bill expands the model from local development infrastructure. It can also now be used for projects undertaken by national transport agencies. As we all know, transport infrastructure has traditionally been funded through those more national mechanisms, mainly because they tend to serve those wider regional or national interests. We do remain somewhat sceptical of the fact that the bill could become a little bit of a back-door mechanism for shifting those costs in particular on to councils and, ultimately, on to local households.

For example, a major State highway interchange or a rapid transit project obviously has a national economic and transport objective, but those nearby property owners could be required to fund at least part of that through a long-term levy. As we’ve also heard, that concern is just elevated and is magnified somewhat when we hear the discourse and the inevitability of things like a rates cap policy. It doesn’t all quite add up, and whilst it sounds good on paper, as I said, we remain somewhat sceptical of how this is going to be implemented.

Councils could expect to facilitate or collect new infrastructure levies while simultaneously finding themselves in a really restrictive environment where they have to weigh up because a rates cap has been thrust upon them. On the one hand, they’re collecting this levy, and on the other hand, they’re quite seriously thinking about how they’re going to continue to fund libraries, parks, public transport, community facilities, and all the other things that local ratepayers do expect from their council. We don’t think that that particular issue has been resolved at all through the select committee process. We think that that contradiction still exists.

With regard to local voice, we noted that was also a salient point made through the select committee process. It’s really important that whilst we all tend to agree that streamlining the process is a step in the right direction, streamlining can’t mean sidelining. It’s really important that councils aren’t put in a position where they are forced to streamline, but they are actually just having a reduced meaningful public consultation process, because that serves nobody’s best interests.

The bill does significantly narrow some of the circumstances in which a council can decline to endorse the levy, which I think is somewhat concerning. In practice, a council may be required to support a proposal unless it believes that actually collecting the levy would place its rating system at risk. An example of that would be a council having serious concerns that a project didn’t fit in with its long-term plan, it had evidence, whether it be anecdotal or formal, that the local communities didn’t support it, and it could find that the project could quite unfairly increase unfair costs on people. But under this bill, those concerns wouldn’t necessarily be enough for them to withhold consent and withhold endorsement, which I don’t think is quite what was intended.

It’s also important that councils are democratically accountable to their communities and they shouldn’t actually be put in the position of being reduced to a levy collection agency for projects over which they ultimately have very limited control. With regard to the strong legal safeguards that are essential when property rights are involved, we also support the Finance and Expenditure Committee’s changes about the accelerated recovery process.

I don’t think anybody’s particularly touched on this, and I’ll leave this to colleagues to finish it off, but the special purpose vehicle—there are several ways in which a development may fail. I think there’s certainly a little bit more discourse to be had about how that would work in practice, but it’s a little bit ad hoc. We have some concerns. We agree in principle that being flexible and freeing up mechanisms is a good thing and, therefore, are happy to support the bill.

16:22

With 102 days to go until the election, it’s great to see unanimity come and break out in the House on this important piece of legislation. This bill is all about the Government’s Going for Growth agenda, freeing up land for development, improving infrastructure funding, and providing incentives for communities around urban growth. It’s all a part of this Government’s plan to fix the basics and build the future, and I commend it to the House.

16:23

Tēnā koe e te Māngai o te Whare. It’s good to stand and take a call on the Infrastructure Funding and Financing Amendment Bill. As other speakers have spoken to, Labour supports this bill and sees it as a step in the right direction in regards to infrastructure in Aotearoa New Zealand.

I want to acknowledge the Finance and Expenditure Committee and the process this bill has gone through to take us to the third reading and acknowledge that there were some changes made through that select committee process, which, in our opinion, improved the bill. However, there are some further improvements that we would have liked to see that were not followed through the select committee process. I’ll speak to some of those today.

Look, Labour supports improving tools that unlock housing and infrastructure, but we do so on the basis that there is an element of fairness, affordability, and local democratic accountability and safeguarding. We know that we need more housing and infrastructure in this country, and I think, as the Hon Kieran McAnulty spoke to, having a joined-up approach to how we approach infrastructure across successive Governments should always be the aim, that we are future-thinking and thinking of a long-term plan for ensuring that future generations have the infrastructure that they need, and that hasn’t always been the case. This bill is a step in the right direction and that is why Labour lends our support to the bill.

However, the conflict sits with the rates cap proposal policy from the current Government and the risk that in one camp, we may have a rates cap, but in another camp, other expenses are expected of homeowners and home users in Aotearoa. We know that when we look overseas from other jurisdictions that have implemented rates caps, it hasn’t always worked, that where exemptions have come from having to follow the rates cap, it hasn’t meant that costs are kept down for homeowners.

Last week, I had the good fortune of having Labour’s spokesperson for local government and transport Tangi Utikere in Hamilton. We took the opportunity to meet with a number of members of Hamilton City Council and staff and we had a robust discussion. The essence of that discussion was that the stop-start nature of what’s happening in local government is not one that suits local government in order for them to get on and do the jobs that they need to do.

The sort of impending possible amalgamation that hasn’t been confirmed or denied—we’re not sure what space that is in. The very short time frame of 90 days for local government to put forward their views to central government—we talked about that truncated time frame and that not being long enough for local government in order to respond adequately. Also, we spoke about the centralisation of decision making. We know that local councils are best placed to understand their communities, but what we’re seeing in the changes from this Government is that more and more of that decision making is becoming central with less ability for local councils to make their own decisions.

So while we support this bill, we need to take into consideration the fact that the space of local government is a complicated one, and adding additional costs to councils and to ratepayers is not something that is going to help us in a situation where the cost of living continues to rise. I’ll finish there. Labour supports this bill. Thank you.

16:28

It’s great to rise and speak in support of the Infrastructure Funding and Financing Amendment Bill. This is going to deliver and help deliver a number of things across our community and across New Zealand. Ultimately, it’s also really important that there is cross-party support in this Parliament, which is a really good thing to see in this sort of space, particularly as we look to create that sort of unanimous support for infrastructure projects and long-term thinking in this country moving forward. I commend it to the House.

New Zealand needs more homes built affordably and quickly. We need them in our cities, we need them in our regions. That is why Labour supports this bill, which is just one of the many tools that we will need. The Minister himself said that this is not the silver bullet; this is one of many measures which councils and central government are going to need to use to meet the increasing challenge which is mounting and has been a challenge for a long time in New Zealand, our infrastructure deficit.

The rubber really hits the road when you look to Auckland, our biggest city, our global city, that we really need to be an economic powerhouse for the country, to be somewhere where young New Zealanders can buy a house and see a future there for themselves instead of going overseas. That is where we also hope to see real gains around including, say, transport projects within the sorts of projects that might be funded by this alternative tool, which has enjoyed bipartisan support in its history. When it was introduced by Labour, it enjoyed some criticism, but then some support as well from the cross benches. This is an important stepping stone in the story of that emerging consensus that we are seeing around this Parliament in support of infrastructure and of a long-term approach which lifts it up above the political fray of the day and into something that is planned for future generations, and something that will benefit everyone. But they still haven’t fixed it; National still have not fixed the funding issues which are underlying the problem here. Their transport announcements are simply a shorter list of unfundable transport projects, and New Zealanders can see that there is not a way out of this simply because we have introduced one more tool to spread the costs in a different way.

Saying, as the Minister did, when he began his statement on this, the last reading of this bill in this House before it becomes law, that councils are artificially constraining supply through planning restrictions is simply to ignore the fact that Government have not provided local councils with any better tools—any better proxies—for the ability to stage development sensibly. Again, I return to the Auckland example here: of course, Auckland Council knows that it can use infrastructure financing tools like this off-balance. They are already doing that for their projects like their water projects. It is important to understand that council are—especially at the size of Auckland Council—sophisticated, quasi-state government - like entities that are able to organise their funding and financing in a way which is the most appropriate way to spread those costs around the ratepayers who will benefit most from the growth.

It is not a lack of knowledge; it is simply because Auckland Council should be able to stage the developments that occur around the city. You should be able to say, “If we’re going to build a new road, the first housing development should be at the beginning of the road. And the next housing development should be in the middle of the road. And the next one should be at the end of the road.” That is not what this bill allows; this bill, we’ve got to be very clear, might continue the very worrying trend in other pieces of legislation, like fast track and like others, where you get out-of-step growth in areas where it is inappropriate. We see this in, say, the 2024 residents who moved into their 300 new homes in West Auckland. We want them to be able to do that; we want those homes to be affordable. Yet, every day—still—their sewage is held in a holding tank and trucked out because there are not appropriate waste-water solutions, or grey-water solutions, or sewage solutions for that development, which was done entirely out of step. When the council tried to get in the way of that development, saying, “We have not sequenced this growth; this is not something we have allowed for in infrastructure development”, they were not able to use any sorts of sensible mechanisms, which most New Zealanders would agree were sensible, for the council to be able to plan for that kind of growth.

We’ve got to make sure that this is not enabling, as the ACT Party would have it, market-led housing growth. We’re not going for a Houston model, where all zones are up for grabs. This is a model which we support, and there is bipartisan support, because it will continue to allow sequenced and sensible growth. Including transport projects in that is an important step, but it is also probably the most open to the kind of political interference that everyone in this House has been busily saying, in the last three years, we are trying to avoid with infrastructure—that we are trying to grow a long-term, non-political, cross-partisan, future-generation - focused commitment to infrastructure that serves the growth of all New Zealanders and spreads costs appropriately and does not get sucked down into whichever developer is first off the block and ready to go, or whichever piece of land or field at the end of a city limit is ready to be developed, or whichever area suits political aspirations at any given time is the one we develop. No, we should allow local communities to have the appropriate kind of say, and this bill should not build that out any more than it already has been.

The point around having more tools for councils to be able to do that planning is also very important, and so part of our support around this is also making sure that we have those spatial planning rules in place and those other tools which enable communities to have a proper say about where growth happens, because if this Government wants to go for growth, it should go for growth in the right places and make sure that growth works for everyone. That is the final point I want to make in this debate: that maintaining faith in this kind of tool, which will create costs for ordinary New Zealanders and will create costs that they need to pay every year in upfront bills to the council—that we should be cognisant of the need to maintain public faith in this law and in the schemes which are run by special purpose vehicles. It is going to be critically important that people not only have a transparent view through the financial arrangements which they’re paying into—this is their money; no taxation without representation is a pretty fundamental part of our legislation-making process, and we should make sure that there is transparency about how those funds are used and the sorts of public accountability mechanisms that attach to them.

It is also going to be really important that people can see they’re getting value for money—if we’re talking about value capture and value uplift, which is the sort of Holy Grail of the last 15 years, I would say, of back and forth between very knowledgeable Ministers and members on this topic, around how to introduce that appropriately—that if we want to get value capture, the value we are capturing is real and that people are benefiting from it, not only those people who want to stay in their homes that are rising in value, because it benefits them and that community, but also that developers who are coming into an area to buy up, say, a four-bedroom bungalow in Auckland and then develop it into a set of units, a set of apartments, are also sharing in the sort of uplift and are incentivised to create the right sort of housing. That will be critical to public faith in this sort of regime. That will be critical in a regime not only about transport projects but around critical infrastructure that people rely on. It’s one thing if we make it about the roads, but this is also about people’s access to those things they need most in their lives, like floodwater infrastructure when their homes flood, like access to space where water can run off. These things are also critically important, so that people can have oversight of them and actually understand how they work at a community level.

That genuine increase in land value is an important thing that we should be able to capture, but it must also never be capricious. The idea that we’re saying, “If these funding tools were available at the time of City Rail Link” sort of ignores the fact that that is a trade-off that is being made here. Central Aucklanders have the infrastructure now that they need to be able to get around the city quickly, to have drinking water that is always reliable, and floodwater systems that they can use, but suburban Aucklanders do not, and so the growth should also be happening in those areas where infrastructure is plentiful, or else you get a system where tools like this one, in the law that is being introduced today, are effectively extra charges on people who live in the suburbs and in areas that were developed in the ’80s, ’90s, and 2000s, and not on those people who enjoy living in the central, leafier suburbs.

The final comment that I want to make is that this consensus on infrastructure that has emerged in this Parliament and the last is important. We should cling tight to it, and the ability for us to continue to build out on this is important. I hope tools like this are used, not only by the smaller councils that really need them but also by Auckland Council, with its level of financial sophistication to be able to build more infrastructure that we need in 50 years and in 100 years as well. This is a real opportunity for our city to be the best that it can be, and I hope we can use it.

16:38

It is brilliant to hear all the support coming from the different parties in the House today to support the third reading and passing of the Infrastructure Funding and Financing Amendment Bill.

Like many speakers have said before me, this is about unlocking growth and the opportunity to grow in many different parts of the country. It is about fixing the basics and removing the red tape and the green tape—the many different coloured tapes—so we can actually just get moving, keep moving on, and continue to build a better future for New Zealand. I commend the bill to the House.

16:39

Thank you, Mr Speaker. This is about ensuring better access to funding and financing tools that local councils need in order to invest in the infrastructure our growing communities require without passing ever higher costs on to our ratepayers. I commend the bill to the House.

Motion agreed to.

Bill read a third time.

I declare the House in committee for consideration of the Employment Leave Bill, the Crimes Amendment Bill, and the English Language Bill.

16:40

It’s a great pleasure to deputise for Minister van Velden briefly in this committee stage.

Part 1 contemplates the meaning of key terms, and the whole basis of this reform is to shift from quite a bulky and difficult set of rules for calculating holiday pay, annual leave, and the like, to an hours-based system, with three types of hours used to count work and leave from work: the standard hours, which will be what most people do, having a standard set of hours that they work, from which their accrual of leave is calculated; additional hours, which are any additional hours on top of the standard hours that somebody works; and casual hours, for somebody who works a variable amount and does not have standard hours. In the latter two cases—additional and casual hours—rather than an accrual of hours of leave, a person will be eligible for compensation equivalent to 12.5 percent of their usual pay during those hours. Part 1 also introduces notional rosters for employees that don’t have a regular roster, for calculating their standard hours. They will be able to use one of these notional rosters. It goes on to define a working day.

This part really defines three key concepts that are foundational to the new framework put in place by the Employment Leave Bill, and I welcome questions on those key concepts in this part.

16:42

Thank you, Madam Chair, and thank you to the Minister, the Hon David Seymour, for outlining Part 1.

I want to take just a couple of minutes first in my contribution to outline where we want to head with this debate, Madam Chair. We think that there are a few questions in Part 1, but the substantive debate—part of the questioning that we would like to look at—is more likely in Part 2, as that is the more substantive part of it. However, as the Minister for Regulation has pointed out, Part 1 does look at those preliminary provisions, and, of course, in there is the purpose, application, and interpretation. That comes in clauses 3 to 5, and that is fundamental to the whole bill. I think we will spend a short amount of time just asking some questions around that, and then some more around the rest of Part 1, but not too much time, if that gives a bit of an overview.

As pointed out in Labour’s differing view, we do feel that there were some changes that were good that were made at the select committee stage, but we also feel that some of those changes were inconsistent with what was left in the bill. So, as part of asking around clauses 3 to 5—the purpose, application, and interpretation—I will be asking a question around those inconsistencies and the level of comfort that those inconsistencies exist.

The “Purpose” provision now specifically and expressly recognises rest and recreation, which we’re actually very happy with, because we see that leave is an important part of a person’s rest and recreation, as did many submitters at the select committee. But the operative scheme still treats leave as a divisible hourly compensation and excludes additional and casual hours from accrual. Definitions in clause 5 drive the whole bill, and there must be that sufficient certainty around the variable work.

I went back to select committee notes when I was preparing for this committee of the whole House, and I had a look at the Law Association and the submission they put in, Minister, around this particular aspect of the bill. They are saying that restoring rest and recreation is a really good thing, but again, going back to have a look at the actual fundamental framework, it seems at odds. I would be really interested in whether the Minister is comfortable with the operative leave compensation payment scheme being consistent with that rest and recreation definition that has now come through—of seeing that that express rest and recreation is there and, from what I can see, is an absolute inconsistency.

If the Minister is comfortable with that, why? And what advice have officials given to give that level of comfort with that? It seems completely at odds with each other in that definition, and it is very, very important to the overall framework of what is set out for the rest of the bill. I do have some other questions, but I think that particular question is fundamental to us going forward.

16:46

First of all, I just give my apologies; I’m not the Minister for Workplace Relations and Safety, who has worked diligently on this for several years. That’s Brooke van Velden.

To me, it seems very clear. First of all, yes, I acknowledge that the Education and Workforce Committee has added rest and recreation as a purpose for having leave—you can take leave so you can do things, like take your kids on holiday—but I don’t see an inconsistency between that and the framework for delivering that leave. The whole purpose here is simplification, so that people can actually be paid the correct amount.

That means, for standard hours, which will be most people who just work their 9 to 5, a certain number of days a week, they will get accrued leave at rate of, I believe, 0.0679, or some percentage that gives them the right number of hours off for the number of hours they’ve worked. In terms of additional hours and casual hours, they will be eligible for a cash entitlement, which they can also use for any purpose they choose, including, I guess, rest and recreation. I don’t see any inconsistency there, if I properly understood the member’s question.

16:48

Thank you, Madam Chair. I rise on behalf of the Greens at the committee of the whole House stage to work our way through the Employment Leave Bill, and just to note, I guess, that having an Act that is clearer and simpler is an intention that I think everybody from across both sides of the House would want. Making sure that things are less complicated, so that people know exactly what their leave entitlements are, is a good thing.

However, I do have some questions around the purpose of the bill, and it really does speak to the heart of actually what this bill is trying to do and what I think any other amendment to this bill should actually be doing. It is about being able to take your annual leave, being able to take public holidays—if you’re sick, you’re sick—bereavement leave, and family violence leave. Making sure that we get that balance right and correct is what is at the heart of this bill. Being able to take that opportunity to take paid time away from work and for rest and recreation, etc., those public holidays, is an important part of getting that work-life balance correct.

One of the things that we grappled with at the select committee, and I don’t think it was adequately answered, was that if this is the purpose of the bill—and, of course, the purpose of this bill is to make sure we get that balance right around sick leave, bereavement leave, etc., etc.—why was this the particular pathway chosen in terms of trying to address that? We do know that people want things to be clearer. We do know that people want things to be simpler. That is not for debate here, in my view, because that is something that the entire House wants. But, when we looked at the three options within the regulatory impact statement, option 1 was the status quo. I don’t think anybody wanted that.

Option two was the weeks-based accrual, which was something that had been worked on over a number of years, to move from weeks-based entitlements to a weeks-based accrual model for annual leave. The focus there, again, was on providing clarity and certainty within the existing weeks-based framework, but instead the option was to move towards this hours-based accrual. My question is: why this one?

If the purpose of the bill is to make sure that we get that balance right—that we make sure that when people are sick, they can stay home; that when they are suffering a bereavement, they can take that leave, and to make sure that people are able to rest—why was this particular option the option that pretty much flows through the entire bill itself and leads itself to all the different types of calculations that, I guess, we’ll be making through in Part 2 and Part 3 and other parts of this bill, when possibly that is not the best option to achieve the purposes outline here in clause 3?

I’m wanting to get to the intention of that—beyond wanting to get clarity and simplicity, which is a good thing. I do take the point that the Minister in the chair isn’t the Minister who has been shepherding this bill through, but it would be good to get some framing comments as to why that particular option was taken, given that option two could have provided the simplicity and clarity as well, while better reinforcing the parts within clause 3 around the purpose—around ensuring that annual leave is able to be taken, and bereavement leave, sick leave, and so on and so forth, because when you look in the media, there is a lot of concern that, actually, what this bill will do will lessen that—will take away people’s annual leave, sick leave, and so on and so forth. If we can get some clarity on that from the Minister, that would be a good start.

16:52

Look, the member is right to identify that there are always different options. When Minister van Velden assumed this role, there had been several attempts which had not succeeded, and she had to throw out the work that had been done to date because it was found to be unworkable.

Why did she ultimately choose an hours-based accrual system rather than the status quo, which everyone agrees is broken, or weeks? I would say that it comes down to fairness. If you imagine, for example, two people who work a public holiday—they both give up a lot—but one of them works a few hours, and the other one works a few days. If you use an hours-based system, then they can accrue different amounts of leave for the work that they do, and that seems only fair that the person who gives up more on that public holiday should get more, whereas if you go by a bigger unit than hours, then you can’t do that kind of discrimination that people should get if they make different choices.

16:53

Thank you, Madam Chair. It’s a good opportunity to take a call on Part 1, looking at the “Purpose” section in clause 3 of this bill, which looks at the purpose of the bill. I have a few questions for the Minister in the chair around that.

I was thinking about, Madam Chair, the correct place to give a bit of context to how this bill came into being, because I do think it is important for our consideration of that. Probably, unless I’m corrected, the “Purpose” section right at the beginning, when it looks at the intention of the legislation and what it’s looking to achieve, is probably the best place—obviously with relevance to those particular sections. I see you’re smiling at me, so, hopefully—

Yes, I just hope that we’re not going to get distracted, and we are going to focus on interrogating the Minister.

No, Madam Chair, I just think it’s important to note that this bill has come through a very long process through different Governments. The intention of it, I think, at the beginning, was to provide some clarity around entitlements for what was then called “holidays”. It was something that was worked on by the previous Government, and I know that it is something that has been worked on by a number of people—not only within this House but externally as well. The reason that that is relevant is because, when we look at the purpose, it’s about—I don’t believe that this bill came to the House with a particular political ideology surrounding it. I believe that it—and the Minister can correct me if I’m wrong—started very much as a clarification exercise. We, of course, have had some famous examples where the purposes outlined in clause 3 have not been achieved in terms of clarity.

I think that that is where it started, and I do recall the Minister who has brought this bill to the House bringing an exposure draft, which is quite different to what we have ended up seeing in terms of the drafting of this particular bill here today. I think that is relevant, because it is a substantive change. The other thing that is a big change, which is kind outlined in the way it’s described in the purpose, is the change of the title, really. I know we’re not debating that at the moment, but we were previously looking at “Holidays Act”—that’s what all of this came under—and now we’re looking at “Employment Leave”.

I think, if you look at the particular aspects that the bill is covering in the purpose—annual leave, public holidays, sick leave, bereavement leave—perhaps they are better described as “leave” rather than a holiday, but it does signal a change in relation to approach to leave. The original purpose often, when you look at the kind of international agreements that look at leave, is for health and safety, and I don’t know if that aspect particularly—I know we’ve talked about rest and recreation, but, actually, most provisions in relation to compulsory leave are based on a health and safety perspective. If we look at countries that don’t have leave provisions, they’re often countries that don’t have the types of fair working conditions that we would consider appropriate in a country like New Zealand. That aspect of it, I think, is important. I’d like to ask the Minister: is there still the intention for this to be an implementation of some of the obligations that New Zealand has in relation to health and safety? Is this part of providing a healthy and safe workplace for New Zealanders by providing them the opportunity to have leave?

A related question to that is: if it is based on health and safety, one of the important purposes for leave to be taken is for people not to be disadvantaged when they take leave. I think this is where the parties diverge in their support of this bill—because that fundamental tenet does not appear to be reflected in the purpose or probably in the provisions that we will look at. The reason that’s important is if you’re disadvantaged when you take some of the leave that’s listed there in the purpose—financially, I mean; if you’re paid less for taking leave than you would be if you turned up to work—then you won’t take leave, most likely, especially for people who are low-paid, or especially in a cost of living situation that we’re in at the moment. That is also related to health and safety, because it provides a disincentive for people to actually take the leave they’re entitled to.

The Minister may say—and I’m interested in his response to that—that what is here is reasonable, and it’s not so low as to be a disadvantage or a disincentive for people to take that leave, but I’m interested in how that balance was struck and whether, if these provisions were lowered more significantly, that would perhaps be something that would disadvantage people.

16:58

Thank you, Madam Chair, and can I thank the Minister in the chair for his answer about the leave compensation payment before. I do take the fact that the Minister is not the Minister who has shepherded this bill through, but this is our opportunity to ask our clarifying questions, too. The reason I’m so really wanting to have a good time of asking the questions—and I thank the Minister for that—is because, actually, there are parts to this bill that we agree with.

I’ve met with the Minister who shepherded the bill through around this bill, and I said, “Actually, this is something that we probably need to have a real conversation about across the House”, whether in this term or the next term of Government—around where we can find that we’re not having the pendulums shift. I think we can all agree with that—that leave is something that’s a fundamental right of our workers within New Zealand. We’re trying to get there too, and that’s why we’re asking these questions. As I say, I totally get the fact that you’re not that Minister—the Minister’s not the Minister that shepherded it through—and these may be questions that we continue to ask and follow through on.

My colleague over here from the Green Party talked about standard and additional casual hours, which are clauses 6 to 8, and I’m happy to move with those clauses just to ask the next question from my point of view.

This is a real area of disagreement that we have, as a Labour Party, around what is happening with this after listening very carefully to submissions in the select committee process. We absolutely believe that all hours worked should accrue leave. We had a number of submitters who agreed with that position, including the Law Society, including many individual workers, and including some businesses too. Particularly some businesses where they had casualised workers within their business who might have some standard hours that they employ for each week but then there are casualised hours on top of that.

Some of those that come to mind were the horticulture sector. They can’t determine what their next week is going to look like, and they have their workers employed on, maybe, 20 hours a week, but they could be working 40-plus hours depending on the conditions that they’re coming through. They were very concerned about that, that all those hours weren’t accruing that leave.

There was one submission that really stuck out for me, and that was Workers First. They submitted about how some of their Cotton On members are guaranteed only three hours a week but regularly work considerably more. That was normal for those particular workers, which is of a concern that if they’re employed for a standard three hours a week, but they’re working way more than that, that they’re not getting that leave accruing on the other hours that come there. This sort of came through a lot from those presenters at select committee; that this was going to almost incentivise casualisation because employers would be paying out less for leave overall. It came through time and time again.

What evidence does the Minister give that the bill will not encourage that no-guarantee model across retail, care, and hospitality, but also, some of our big economic industries such as horticulture, some of our big exporters—Dairy Workers Union was another one that came through. In fact, the dairy workers full stop came through that there was some big—and I know that was a real issue because there was a separate part put in the select committee commentary around the dairy workers, but they weren’t the only ones; it came through in many different industries, and it was employers that were coming through.

So my question is: what is the evidence that that’s not going to incentivise casualisation?

17:02

I’ll try and respond to the last two, which are related.

Camilla Belich was right: she sort of answered her own question. It’s not called “holidays”, because a lot of the reasons that people take leave—being sick, a bereavement, and particularly family violence—I think people would not consider a holiday, so that’s why the name’s changed.

Camilla Belich mentioned that the bill that was initially produced is quite different—that is true—and, as I mentioned in an earlier speech, Minister van Velden inherited some work that, ultimately, she had to start again with, and I think that showed some courage and got her to a better place. So that’s been canvassed.

The question that Camilla Belich asked—the most substantial question—is there still an emphasis on ensuring that leave is used for health and safety? Well, you know, certainly there is a balance here between simplicity and ensuring that employees get the benefit of leave. I think that that balance has been struck very well here. The underlying purpose that employees aren’t disadvantaged for taking leave—that underlying principle of the Holidays Act was never set out in the Purpose, and the purpose of the Employment Leave Bill is the same. There hasn’t actually been a change in the way that the purpose is set out, but the balance between ensuring that people take leave and the complexity of the bill, I think, has been struck well.

That kind of relates to the question that Jan Tinetti asked, which was: is it advantageous for an employer to have fewer standard hours and more causal or additional hours? Well, no, and I think, in a way, the member answered her own question. You have employers coming to the select committee—and I certainly heard them—saying, “Look, this requirement to pay 12.5 percent in money in place of accrued leave for those casual and additional hours, that is, if anything, a little bit more generous than previously to the employee.” So, if anything, the incentive for the employer is probably to have more standard hours and fewer of those additional and casual hours, because when they have additional and casual, they have to pay the extra 12.5 percent.

17:05

Thank you, Madam Chair, and thank you for that answer. Just following up on that, Minister: that’s not what many submitters said; many submitters actually said that it was going to cost the worker more than what it would—they would have less money in their pocket or less time in their pocket than what it would be to get the money. So I’m wondering what modelling was carried out to actually ascertain that that would be the case, that employers would be out of pocket more at the end of it. I’m not debating that employers were saying this or people were saying that; I just really want to know what the modelling was that employers were going to be able to pocket more.

But also, did officials model that there might be a behavioural response to incentivising casualisation more, and, if so—they may not have—what did the modelling show, and, if not, was the risk accepted? So was that an absolute identified risk that there could be that casualisation?

17:06

I can answer that fairly quickly. In terms of modelling, there may well have been. I’m not advised on that, but it stands to reason that given that the 12.5 percent is more generous than what is available under the Holidays Act, whatever incentives are in place now, the incentives under this new Act, as far as employers are concerned, will be to move towards more standard hours because it’s actually the additional and casual hours that have become more expensive from their point of view, under this new law, because the 12.5  percent is actually higher than what went previously.

17:07

Thank you to the Minister in the chair. I just want to ask a follow-on question on that specific point because one of the issues that used to crop up around 20 years ago or so was when holiday pay was paid out on an as-you-go payment. It was very common for employees to receive their holiday pay—and in this case, I want to talk specifically about the extra 12.5 percent—and they’d have it paid out weekly. And what that would, ultimately, mean, if we’re talking about it as leave as opposed to holidays, is that those workers would end up without having any actual time to take off to have a break.

So the concern I just want to put on record, and get the Minister’s response on, is that if those workers, let’s say, are doing five hours a week permanently, that that is used to accrue their leave, and they’re doing anything between 15 to 20 hours a week or sometimes up to 30 casually and getting paid out an extra 12.5 percent during that week, essentially, they’re actually not building up a pot of time to take off, to have some rest and to have a break. And that starts to, in itself, become a health and safety issue. If people are receiving that on a weekly basis, but then, ultimately, it comes time to have two weeks off to have to have some rest and relaxation so they can come back to work refreshed, they actually don’t have enough sitting in the bank in order to be able to look after themselves during that time. So there was always this trade-off—right?—between workers receiving extra money weekly through that holiday pay, and then there were changes made so that it could only be paid out on a weekly basis with the employee’s approval. And now, I just want to get a stronger understanding of whether that will need to be paid out weekly or whether it can be bagged up—firstly. And secondly, whether there has been an analysis done on the behavioural impacts that if someone doesn’t actually have a weekly—isn’t accruing that in order to have it paid out in one lump sum, is there going to be a disincentive for that employee to take time off because they’re actually not able to have enough income generated in that week in order to be able to do so safely?

17:09

I’m advised that the 12.5 percent leave pay is paid out on a normal pay cycle. So if, in the member’s example, someone worked five hours a week, it’s certainly true it would take a long time for them to accrue a whole week’s leave; however, they would only require five hours of leave to get a whole week off, given that we’re moving to an hours-based system. For the rest of their time, their other—I think the member said—15 to 30 hours, they wouldn’t get paid the week that they took off, but they would have been getting an extra 12.5 percent. Effectively, if you have casual hours, then you need to do your own saving for your leave. That’s part of the logic of the bill. But I believe that somebody who chooses to do five hours standard hours and 30 hours a week casual is probably someone who’s switched on and organised enough to do that.

17:10

Thank you, Madam Chair. I was just reflecting on one of the answers from the Minister around assumptions around holiday pay. I recall one submitter who was a care and support worker talked about—

Can I just ask which clause you’re speaking to?

The purpose one—this is something that the Minister talked about in one of his second or third contributions around the reasons why people would take public holidays and the reasons for moving it towards an hours-based accrual system. In that example at the select committee, they were talking about, well, actually an example of where a care and support worker could be scheduled on for four hours in the middle of a public holiday. But, actually, that ruins the entire holiday. Because when we have public holidays, the purpose of a public holiday is you take the whole day off, and there’s possibly other things that people might want to do together as families or as communities, which won’t relate to that specifically 3 to 4 hours. So I just wanted to test the Minister’s assumption around that.

Public holidays are quite different from other days. There’s not very many of them, however, because the intention behind a public holiday is that they’re of national significance, they should be treated differently. From my reading from the Minister, it would be treated as any other day. If you look further through, in the definitions, there’s only a set number of public holidays. So my question is: is that assumption correct? Is the concern by this particular submitter at the select committee also correct that actually this type of schedule—being scheduled on in the middle of a public holiday would mean that they wouldn’t get the full amount owed to them, but just a couple of hours, and the fact that they would feel penalised for doing so.

17:12

Thank you, Madam Chair. I also want to follow on—I’m still on clauses 6 to 8, just for clarification. It’s following on from the answer that came before about the accrual of the work on the hours that are worked. The regulatory impact statement (RIS) itself considered only the status quo, so that’s the weeks-based model that we currently have, and one end-to-end hours-based model, and it says, “Prior decisions and time constraints prevented consideration of all options.” That’s on pages 3 to 5 of the RIS.

I’m really quite interested in what advice the Minister received on the obvious alternative of hourly accrual. I’m not going back to weeks here; I’m staying with hourly accrual, and it’s the obvious on all hours worked. We haven’t had that discussion. We’ve only had the discussion on the standard hours. So I’d like to know the advice that came on all hours worked, what it said, and where is that option assessed? So that’s a very short question, so I’ll leave it there around that.

17:14

Thank you, Madam Chair. Just before we move on completely from clause 4, I just have a specific question. I won’t take a full call, but I think one of the notable factors of this bill is the exemption, basically, for people employed by schools and State schools, from this piece of legislation. Essentially, and it is set out in the application section in clause 4, if someone is employed by, essentially, a board of trustees at a State school, then they are not covered by this bill and they may—I think there’s an intention in the future that they may be covered, but there’s a clause here that states that that may be 10 years after Royal assent. So a significant period of time that State school employees would not be covered. I’m not casting a view on that exemption because I can see that it’s reflective of the complexity of this particular piece of legislation and also the employment agreements that are in place with people who are employed in schools. But I think it’s probably appropriate for the committee for the Minister to provide an explanation as to why that exemption as in place. So I politely request that if the Minister is able to do so, that he do so.

Also, just to check that this is only an exemption in relation to State schools. I don’t believe that is defined in this piece of legislation, but I would assume that that excludes other types of schools. For example, the Minister has a special interest in charter schools, are they exempted or covered? I would imagine they were covered, but good to get clarity from the Minister—and also private schools. The Minister will well know the number of different options in terms of legal entities that schools are set up under. So that’s my first question.

Just in relation to the definition section—I don’t want to go through this in detail. And this is for practical reasons, because obviously each of the terms is expanded further on in the bill, which I think would be the more appropriate place to discuss them. I just wanted to ask the Minister, if we look at the clause 4(2), there is an overall statement that if something’s not defined in this Act, then it’s the Employment Relations Act definition which is the defining piece of legislation that will set out the meaning if not otherwise defined. Many of these, from my knowledge of the Holidays Act, and I didn’t participate, like the Minister, in the select committee—I just wanted to know, maybe officials could tell him, whether there has been a substantial departure from the definitions in the Holidays Act in relation to some of the definitions in clause 4. If so, which are the substantive departures? Obviously, we know that the Act operates differently. I’m not asking the Minister to explain that in relation to the definitions, but it’s more if there’s a notable change in the meaning of a word or a term that was included in the Holidays Act which has been substantially changed, not in an operational way, in relation to this bill. Hopefully, that makes sense to the Minister. So that those are the questions I have in relation to clause 4.

17:17

Just to answer Teanau Tuiono’s question. He’s right. One of the implications of an hours-based system is that a person could work several hours on a public holiday and they would accrue leave in return for those hours. It might be true that some people would feel that they had lost the whole day. I’m not sure all people think like that, but someone might. I just make the point that if a person was to be given a whole day, then the incentive for an employer to have a person working only when necessary and actually have the rest of the time to themselves, is less. Whereas if you only pay and accrue for certain hours, then you’re more likely, rather than losing the whole day, to lose several hours and still get compensated with pro rata leave for that. So I don’t think that is a bad deal overall.

Then there is this question of why, Jan Tinetti asked, was hours-based accrual not the way? Why is it that you get accrual for your standard leave, but there’s 12.5 percent cash up front for your other hours, your non-standard hours. The reason for that is really quite straightforward. If you work the same week, the same hours every week, those are your standard hours, then it’s not difficult to work out what it takes to give you a week off. It’s just you get so many weeks off for the number of weeks you worked. If you start having variable hours then the question is, did you accrue enough to take the hours off that you would have worked in the week you take off, which is irregular? Far simpler to let the person take their money, their share, 12.5 percent, and make their own decisions about when they do and don’t work, or when they would have worked and how much compensation they need in order to take a week off. Far easier to do that in cash than it is to do it in hours.

In fact, moving to that cash compensation for casual hours is one of the main changes that has made this bill so much more workable than the Holidays Act that went before. So I hope that’s clear. I’ve explained it as best as a can, but having different hours in the week you accrued the leave from the week you take off is basically the whole problem with the Holidays Act, and moving to cash rather than accrual for variable hours largely solves that problem.

Camilla Belich asked why State schools are exempt for 10 years. My instinct was that this was terribly Byzantine contracts negotiated by public sector unions and their wily lawyers. It turns out I was almost correct. It’s because of those contracts that the public sector pay system is so Byzantine and it’s going to take a long time to sort that out to comply with the new laws, hence the delay. So if the member knows anyone in that space, if she could have a word with them, I’m sure everyone would be very grateful.

In so far as clause 4(2) and definitions in the Employment Relations Act—is there a deviation from that Act? I’m still awaiting advice on that. That’s a bit above my pay grade, but I’ll try and get an answer for the member as soon as I can.

17:21

Thank you, Madam Chair. I think there was an interesting question on that side from Rachel Boyack around the Cotton On employer, because that was a very real submission that did come to the select committee and we haven’t yet heard an answer to that. And if I can put it this way to get an answer from the Minister in the chair, I think, would be good.

The Minister did answer that.

He did answer it? I didn’t quite hear it.

Pay attention.

I am paying attention.

Clearly not.

Chipping over from the sidelines isn’t helpful.

Yeah, take a call.

Take a call!

Take a call.

I just wanted to jump down to the “Meaning of standard hours”—this is clause 6. Here in subclause (1)(a)(i) we move from “requires” to “may require”. I was wondering if the Minister could clarify for us that particular movement and what that would mean around the concerns of casualisation of standard hours and whether he had an answer to that in the context of the numerous examples that we’ve brought up and the concerns of submitters that did come to the select committee concerned that the impacts that this would have on their ability to take their annual leave. So that’s clause 6(1)(a)(i), we’ve crossed out “requires” and moving to “may require”, and if we could get some clarity around that, that would be good.

17:22

Well, I think a plain reading of that is that it’s actually a concession to the employee. They can qualify for standard hours and hours that they may be required to work, not hours that they absolutely are required to work. So it actually broadens the scope of what can count as standard hours, which I would have thought, from an employee’s point of view, would be advantageous—it gives them additional scope to have a regular roster.

17:23

Thank you, Madam Chair. I just actually did forget to ask—apologies for this—one question around the definition of “work roster”, and that’s under “work roster” in clause 5(1). It states there that a work roster is set by an employer, “(whether in writing or otherwise)”. I cannot think of a work roster that would not be in writing. So I have a question around what is intended by that.

I also have a question around the meaning of “casual hours”. In this definition, there is no obligation to offer any work, and no obligation to accept. So my question is probably more of a fundamental workplace relationship question: if that is the case, then is there a contractual relationship that exists between the employer and the employee? The Minister will be aware that in contracts there are obligations and considerations that need to be provided by each side. It appears, if there’s obligation to offer work or accept it, I have a question about whether there is actually an existing employment relationship. That might be something the Minister in the chair, the Hon David Seymour, wants to get some advice on.

I also have some questions—and it may be that colleagues have questions in relation to earlier clauses—about the idea of a notional roster. Now, as I understand it, this is a new concept that has been included within the Employment Leave Bill. Although the idea of trying to ascertain the normal or regular or standard hours of an employee is not a new concept, the concept of a notional roster appears to me—and like I said to the Minister, I was not on the select committee, so I could be incorrect about that—is a new process.

Interestingly, in this clause, there is a test of how you apply a notional roster, but then also there is a role for the Labour Inspector in determining a notional roster if agreement fails. What I wanted to ask the Minister—in terms of the Labour Inspector, this appears to be a relatively minor, technical decision that the Labour Inspector would need to make. From what I can see in this clause 9, I don’t have clarity around the process that the employee would have to do to get that roster determined by the Labour Inspector. So if it is possible for the Minister even to get some advice on how he expects that would go—whether either employee or employer, I assume, would be to apply to the Labour Inspector for that and whether there’s any additional resourcing for the Labour Inspector to do this type of work. Obviously, they do very similar work at the moment, so I’m not alleging that it is so far outside their additional duties, but I do think it is quite a particular job. What if there is disagreement on the failure to agree? How does that get determined? Is that a Labour Inspector thing or is that something that would need to go to the Employment Relations Authority for determination?

Additionally, is it expected that a notional roster would be something that employees and employers could use the mediation service to determine an alternative to the Labour Inspector, or is it mandatory that it must be determined by the Labour Inspector if there is a failure to agree on a notional roster?

17:27

Quite a few questions there which I’ll try and address. Can a work roster be written or otherwise? I can assure the member from my first ever employment at the very earthy TDC Sawmills in Whangārei that a work roster can indeed be unwritten and can be communicated orally in words that the member may not be familiar with from her legal practice.

Is it a roster, though? Is it a roster?

Well, under this law, yes it is.

I’ve been asked “If there’s no obligation to work or to pay, then is there any kind of obligation that would make consideration for a contract and is there an employment relationship?” I’m awaiting advice on that, so I will come back to the member on that.

In relation to the role of the Labour Inspector in putting in place and determining a notional roster, the purpose of the notional roster is to give a basis for calculating standard hours when the person might not have a precise roster. They might work different days each week but always work the same number of hours, so the notional roster is used to calculate what their standard hours are. If there is a dispute over that, then, yes, they can certainly go to the Labour Inspector who’s been given power here. If the Labour Inspector can’t settle the dispute, well, I draw the member’s attention to clause 11, which says that the determination by the Labour Inspector is binding, unless, of course, the Employment Relations Authority or the courts who have the authority over just about everybody—except for this House, thankfully—can then overrule the Labour Inspector. But, in the first instance, the Labour Inspector, if they make a determination about your notional roster, that’s the rules.

17:29

Thank you, Madam Chair. I just want to ask about the issue of availability provisions—it’s at clause 6(5). It excludes from standard hours, hours that are under an availability provision. Now, I would like to know whether that’s different from the law now, or whether it clarifies the law now, and what will happen if people work on hours as a result of the availability provision, what will then happen with regard to the hours they work? I can understand that, often, availability provisions have a remuneration somewhere in the contract for their very existence—being around at that time—but they are also things that people actually work, so they might be called upon to work on those hours. How are those hours then treated? How are they remunerated, and what happens with regard to leave for them?

Can I also ask about the determination process—and I apologise, I wasn’t on the select committee, but it does look like what you have here is that there are things that the labour inspector is going to take into account, but what’s the actual process that they’re going through to make that determination? Will there be a submission process? Often, that’s a matter of evidence on a worksite, and I’m all for labour inspectors doing this as swiftly and as efficiently as possible, but is that something that is then appealable to the authority? I can see that it’s a binding determination, and then it talks about, in clause 11, except in so far as the authority or the court is looking at it. Are they looking at it like any other determination, or is this its own thing? Is there an appeal process for that determination or, in the context of a wider dispute, could someone take a matter over the notional roster to court, and go through the authority or the court and they would make the determination in that way, because it could come up within a context? Those are my questions for you. Thank you.

17:31

Thank you very much, Madam Chair. It’s good to be able to take a call. In terms of some of those key meanings of terms in Part 1—the meaning of “standard hours” and, also, the meaning of “casual hours”, which is in Part 146 and Part 1, clause 8—I’d just like to then cross-reference into the regulatory impact statement, which talks about what consultation went into place in order for this to be drafted up.

We heard a little bit about this at select committee, but I’m really interested to hear from the Minister in the chair, the Hon David Seymour. In the regulatory impact statement, it makes it quite clear that further consultation was conducted in the first half of 2025 as part of the policy work to develop the hours-based accrual system. In fact, I understand that included engagement with key Government agencies, and those key Government competencies were the Public Service Commission, the Treasury, Ministry of Education, Ministry of Health, Health New Zealand, Ministry for Ethnic Communities, Ministry for Women, Ministry for Pacific Peoples, Te Puni Kōkiri, and, also, Whaikaha - Ministry of Disabled People. A large payroll provider—not named—was also consulted with, as well as a series of workshops with businesses and employer representatives.

The feedback obtained as part of that consultation, in addition to the insights from the targeted consultation, has really been used to refine and develop the key option that is the preferred option, which is then implemented. There’s a lot of consultation going on there with the big end of town, with big Government agencies, with a large payroll provider and, also, workshops with businesses and employer representatives. I’m really keen to know if the Minister is aware of any other consultation that actually involved the lived experience of workers who will be the ones that will be detrimentally impacted by the fact that they will receive fewer days of sick leave and fewer days of annual leave if they work in a precarious type of employment or on a casual basis, and whether any of that kind of consultation actually fed into the development of the preferred option.

17:34

I’ll just come back to an earlier question by Camilla Belich: I’m advised that the concept of casual hours is not intended to alter the concept of casual employment, which is defined in case law. It’s well-understood that casual employment is a legitimate form of employment. I hope that helps—well, I had intended that to help Camilla Belich.

In terms of consultation, the consultation went very wide over a long period of time, and no one can doubt the amount of work that Minister van Velden has put into this bill. I’d just make the point that she did focus on talking to people who are payroll providers because those are the people that need to actually make it work. There’s an old saying, “Amateurs talk strategy; professionals talk logistics,” and I think that’s very much what the Minister’s done.

17:35

I move, That debate on this question now close.

I am not going to take a closure motion, but I will use the opportunity to let members know that clauses 6 to 8 have been well-traversed—six, seven, eight questions on clause 6 alone. So I am looking to move forward.

Thank you very much, Madam Chair. I’d like to skip further ahead to clause 16, and it specifies in there, “When [a] day is not otherwise [a] working day”. We know that it’s important to be clear; it needs to be transparent. It states in here that “Despite section 12, a day is not an otherwise working day for an employee if it would be reasonable for the employee and their employer to expect that the employee would not work on that day”, because the employee is on parental leave; is volunteering under the Volunteers Employment Protection Act and has volunteer leave; has leave for which the employee has ACC for; or has unpaid leave. It also specifies, under clause 16(2), that unpaid leave does not include any unpaid leave that the employee takes during an annual closedown or an agreed closure.

Now, I just wanted to get some specification from the Minister in the chair, the Hon David Seymour: what is his view in terms of when there is a disagreement? Is that a matter for an advocate? Is that a matter for another body, when there is not clear agreement under the specifications here on what is actually deemed to be a day that would be a working day? Under those clear grounds there, there are definitely some grey areas where there might be a disagreement between the employee and the employer as to when a date is not otherwise a working day. I would be interested to understand from the Minister who is the right determining factor for that, because the legislation goes on to provide that there are multiple roles with the same employer that can be treated separately, as well.

I’ll raise that in a separate question, but my key question to the Minister is, with this provision here, when it’s really important that you understand if you’re going into accrual of days as a casual worker—we’re wanting to make sure that’s correct. There may be an incentivisation on the side of the employer for it not to be recorded as a working day, because that would then mean that the employer would have to pay less in either annual leave or potentially even in sick leave that’s not accrued. Who is the correct determining factor for when a day is not otherwise a working day?

17:38

Thank you. Can I ask about clause 13, which is the issue about days that are working days. I can see from that clause that there’s the introduction of a concept—and I did do this work for a long time and I don’t think we had this concept at all, so I’m assuming it is a new concept—that it’s going to take 13 weeks before there was any kind of kick-in to a day being a public holiday. Am I right in saying that workers in the past, if they’ve been working for, say, eight weeks or four weeks and there’s been Anzac Day or Queen’s Birthday on the day that they would otherwise be working—so often it’s a Monday or the Friday—that they would have been eligible for that public holiday and now they won’t be?

You’ve got all these people whose day is normally that day who will not enjoy that public holiday within the first 13 weeks of employment, even though they are in permanent work and they are expected to work—that is their normal day. If I’m right about that, what was the justification for stripping away that right from people? Because that can’t be about clarifying the law. That’s about it eroding the entitlement of people in work.

It doesn’t seem right or fair that somebody who’s been working for eight weeks in a job, and that’s a public holiday they enjoy, is not treated the same way as somebody who’s been working for 14 weeks in that job—or, even worse, 11 weeks in that job and 14 weeks. Am I right about that? I haven’t had answers to my questions before.

I’d just like to say that when I looked at these clauses, and I wasn’t on the Education and Workforce Committee, this is a really difficult area of law. This has not been easy, the issues around working days and what is and isn’t when you get rotating rosters. I appreciate that there are lots of things that need fixing in this area, because what we get is three and four rosters, where people move constantly, and it’s really hard working out whether they’d be working on that public holiday. This is talking about people who’ve worked 50 percent or more on that time. I do understand these things. There were issues in this part of the law, and it would be good if we were able to more easily understand the entitlements, but this doesn’t seem to be that. It looks to me like it’s a reduction in entitlement, and what was the reason why that happened, if I’m right? Thank you.

17:41

Look, I think the logic behind the 13 weeks is that traditionally, and now, there will be four weeks a year, which is one week out of 13 in leave. If you’ve done 13 weeks, you get a whole week off.

It’s a public holiday.

After 13 weeks, you will—yes, you still get the public holiday off, but the question is, do you accrue extra leave? The answer here is that after 13 weeks, you would be entitled to a whole week off, and you’d get it, but you don’t get it straight away. If you think about it under the old system, you wouldn’t necessarily accrue time in that whole 13-week period until you’ve done 13 weeks and got your whole week. It’s a question of going from weeks to hours. No one is being disadvantaged here; it’s just a different way of calculating the same thing.

I also had a question from Helen White—she’s complained she hasn’t had her questions answered. I think all of them have been answered with one possible exception, which was around availability provisions and the fact that under clause 6(5), they were excluded. “Is it different from the current law?”, she asked. Well, additional hours are hours an employee receives additional payment for. Hours worked under an availability provision may be included in salary for a salaried employee. They are not additional hours, but an employee receives salary on leave. This aligns with the current law. The bill includes a new provision that provides an employee cannot be required to work under an availability provision when they take leave. Most of the provisions for availability have been brought over from the previous Act, and in addition, this new provision that provides an employee cannot be required to work when they’re taking leave, which I think is important to honour the spirit that it’s not standard hours.

17:43

Thank you, Madam Chair. I’m just signalling I’ve got a couple of clauses on Part 1 where I’ve still got questions that haven’t been traversed yet. I’ve got one first for the Minister in the Chair, the Hon David Seymour, on clause 17A, which is page 23 of the report from the Education and Workforce Committee, around “Multiple roles with the same employer treated separately”.

This clause seems quite confused in how it’s written, so I’m trying to get my head around exactly how it will operate in practice. Essentially, it states that this is for someone who has more than one role—it could be two, three, four roles; hopefully, maybe, not up to three or four, but that can happen—where you’ve got a separate employment agreement for each role or an agreement that covers off all of the roles. That’s clause 17A(1)(a) and (b). What it states in clause 17A(2) is that “If 2 or more roles provide for the employee to work standard hours, the employee and their employer may agree how leave entitlements and payments under this Act will be treated for each of those roles.”

I’ve got a question first up around the standard hours part because, for example, I had a situation like this myself once; I had two fixed-term agreements. One was four days a week, and one was one day a week—something like that—but I could work them as I wanted to within that week. The one-day-a-week job, I could do two hours a day, or I could do four hours one day. I could dive in and out of the two different roles, which meant that if I was sick one day, I accept, it did present some challenges as to which role—because they were on different pay rates as well—was being covered for that day that I was unwell. I’m interested to understand if, when we’re talking about the standard hours in that context, it actually has to be exact, fixed hours—say you’re doing one role 9 a.m. to 5 p.m. on a Monday, and another role 10 a.m. to 4 p.m. on a Wednesday. These kinds of things do occur. I’ve got that first question.

The second question, which I think ultimately causes some concern, is that if you look at clause 17A(3)(a), it says that “subsection (2) does not apply to a role that provides for the employee to work casual hours”. My reading of that is that in a situation where one role has fixed standard hours—let’s say 20 hours a week—and another role is casual, that could be anything between, say, three and 10 hours a week, it’s not then giving the option of clause 17A(2), which allows the employer and the employee to come to an agreement about how that leave will apply. I’d like to know what does occur in those circumstances, because this is one of those examples where employment contracts can get quite complicated.

I’m interested that clause 17A lists out what happens reasonably clearly, apart from my questions around the “standard hours” definition, when you have two or more roles, but it’s not clear about what should happen in practice—just to be clear, those two or more roles when the hours are fixed standard hours—when you have one role that’s fixed and one role that’s casual. I’d really appreciate the Minister being able to give us some clarity on that.

Then it goes on to say, in clause 17A(3)(b), “if the employee and the employer do not agree under subsection (2), this Act applies to the employee’s leave entitlements and payments for each role separately.” Again, I’m just struggling to understand, a little bit, exactly how that agreement will work in practice. Is there a situation where the two sets of leave under clause 17A(2) could be, I guess, merged so that you’ve kind of got an averaging out of the two roles? Is that the intention of clause 17A(2)? It kind of implies that under clause 17A(3)(b), they’d be treated separately. That’s the kind of default position.

I genuinely would like some more information on how standard those hours have to be—I hope that’s a clear question around that—across that week. Secondly, if you have two roles that are quite different in terms of how the hours play out—one being standard hours that, essentially, could be fixed across particular days and times versus one that’s casual—I’d be really interested in what the bill actually sets out should occur in those circumstances. I will be coming back with some more questions on this part.

17:48

Thank you very much, Madam Chair. I’ve got some questions for the Minister in the chair, the Hon David Seymour, in relation to clause 20A—“When employee receiving accident compensation may also take leave”. I’ve got a real concern in here, and it’s in relation to clause 20A(3) in terms of the family violence provisions that are here.

From my understanding of reading the bill, the way this works is for employees who work casual hours, the amount of family violence leave taken under clause 20A(2)(c) cannot exceed the amount that can be calculated—and they’ve even come up with a cunning little maths formula on how you calculate that someone is entitled to family violence leave. It’s “h” divided by “w”, and that’s in brackets, for those who remember maths, times 0.2—0.2; that’s the number they’ve come up with in the formula—equals how many days of family violence leave.

For people watching, people who could be in a family that has family violence, to understand what this means, this means that the number of hours an employee was paid for is the “h”—so how many hours you worked—divided by the number of whole and part weeks in the reference period, and that is then timesed by 0.2, and that gives you the maximum number of hours of family violence leave that the employee may take in a week.

Now, my concern is that when this was introduced as a bill, the ability to take family violence leave—I think actually quite a few parties voted for it; I’d have to go back and check the record, but the idea is that for someone who is a victim of family violence, doing that maths equation to figure out whether you get a day off or not doesn’t really matter if you’ve got a situation where you’re unable to get medical treatment, whether you’re unable to get psychological support, whether you need some leave to be with your children after a traumatic family violence event.

My question to the Minister in the chair, David Seymour, is: is he comfortable with a maths equation really summing up whether someone gets some family violence leave based on the hours that they’ve worked, because it seems to really undermine the whole purpose of having family violence leave: that it should not matter in terms of how many hours you’ve worked; if you are a victim of family violence, if you are a victim of crime—and that party he’s part of and the others who are in the Government seem to be quite big on victims of crime, and so are we, so we’d like to see victims of family violence given the access to the medical help, the psychological support, and all of the services they need. It would seem the equation “(h ÷ w) × 0.2 = d” would be a prohibitive factor for women who need support yet, because maybe the very same circumstances which are causing them to be victims of family violence may also be inhibiting their ability to attend work; they may have a partner that’s preventing them from getting to work on a regular basis. So it would seem that you’re doubly penalising victims of family violence by minimising their experience and equating it to “(h ÷ w) × 0.2 = d”.

So I’m really interested to hear from the Minister: is he up for some further consideration, maybe even a review of this provision within the legislation from people like Victim Support, people who work in women’s refuge, people who understand that on the front line of dealing with family violence, those circumstances cannot be dictated by the number of hours someone may be working. It’s actually a whole range of other factors. Surely, it’s a basic human right to be able to have access to those services, and that should not be underpinned by the number of hours you’ve attended in any given week. Surely, as a New Zealander, you should still get access to those services. So I’m interested to hear from the Minister: was it him who came up with that equation, and how he thinks that’s going to work in the future.

17:52

Thank you, Madam Chair. I did say I had another question on Part 1, and I haven’t had a response yet—it looked like the Minister in the chair, David Seymour, might be ready to jump up, but he’s letting me have another call, so I appreciate that. I’m still waiting for the response on clause 17A, but I have a question now on clause 18, which is “Restrictions on type of hours”. Just the plain reading of this is that “An employee who—(a) has standard hours cannot have casual hours in relation to the same role: (b) does not have standard hours under an employment agreement cannot have additional hours under that employment agreement.”

My plain reading of this suggests this is utterly bonkers, to be honest. You know, a lot of the examples we’ve been using are around situations—and they happen a lot in retail and hospitality—where somebody does have, let’s say, 10, 20 fixed hours and then flexes up quite regularly. I say this from experience because I used to work for Workers First Union and represented and negotiated a lot of contracts with companies like Kmart, Farmers, Cotton On—as my colleague Jan Tinetti mentioned—Countdown and many others of those common brands. This is something that employees and employers accept. We were always working hard to get employees the maximum amount of standard hours possible for their security and consistency of work.

But if you look at a place like my electorate of Nelson, you know, in winter, it’s dead at the moment—and I know Madam Chair’s looking at me and nodding and understands that—and in summer we’re absolutely bonkers crazy busy. So there’s always been a reasonableness that if you, say, work at a supermarket, you might have 30 hours a week and over summer you’re going to be doing 40 to 50 hours a week, because that’s what happens. We have tourists coming through and stopping off at all our supermarkets on the way to the Abel Tasman. So it’s commonly understood that that’s fair and reasonable to have an element of standardisation to give that security and then have some casual flex above that. It’s what happens in practice, and even having been a union organiser, it’s not something I’d argue against, because it’s very common.

You look at hospitality as another really good example in my region whereby it’s very common for some of our hospitality organisations to close some days during winter because it just is not as busy in town as it would be over summer where they have a seven-day operation. So it could be that if they don’t open on a Monday in the winter, Monday’s never a standard day but would be some casual hours over the summer for those workers.

So just coming back to the plain reading of clause 18(a), an employee who “has standard hours cannot have casual hours in relation to the same role”, I mean, my plain reading of that just seems utterly bonkers from both an employee and an employer point of view. Then it states, if you look at (b), that an employee who “does not have standard hours under an employment agreement cannot have additional hours under that employment agreement.” I’m very confused about what that means. So you can’t have overtime if you’re casual. I mean, that’s crazy, because one of the things that I would hope this legislation still covers is not allowing zero-hour contracts. So that’s, again, a really confused clause that I think is going to actually add more misunderstanding and complexity, because it’s very uncommon for somebody not to at least have, say, four or five fixed hours a week.

So in addition to getting a response to 17A, which was around having multiple roles, I’d really like the Minister to respond to my questions on 18, and I’m particularly interested in discussions that the Minister—I recognise the Minister is not the Minister who’s been shepherding this legislation, but maybe officials can advise him. I’m particularly interested in actually what employers have said about this, because my plain-language reading of this creates some confusion in my mind. As a former organiser, it was my job to actually help advise employees through navigating these clauses in the law, and so I think having some clarity but also just some understanding about how much engagement occurred with employers, particularly on 18(a) and 18(b), I’d find really helpful, because my plain-language reading of it suggests a quite a lot of confusion about how this part of the Act will be interpreted.

17:57

I don’t want any confusion in the member’s mind. Coming to her questions about clauses 17A and 18, in a way, 18 answers the question for her. Yes, you might have one employee, one employer, and two different roles or jobs, and there are multiple possibilities. There might be one role where they have some standard hours and also some additional hours; there might be another role where they have no standard hours and only casual hours. Clause 18 says that you can’t have standard hours and casual hours; you can only have standard and additional or just casual. There might be a situation where for some reason they had two roles, both of which had standard hours—perhaps different standard hours or different pay rates—and in one of them they regularly worked additional hours; the other one they didn’t.

So there’s quite a number of different possibilities under this law that facilitate people to have different arrangements depending on the needs of the employer and the needs of the employee. I actually think if you start imagining in your mind some different scenarios, they do actually make sense. I’m not actually hearing where the contradictions are. In any scenario, there are ways for people to have fixed and extended hours depending on what they want under this framework.

Ginny Andersen asked: are we comfortable with the formula “(h ÷ w) × 0.2 = d”? Well, there’s nothing wrong with that formula, in a sense, but it carries over the same domestic abuse or violence entitlement as was in the Holidays Act. So whether or not we like that particular formula—I don’t think it’s a bad formula—the point is that if you’re a victim of domestic violence, you can take some time off at your employer’s expense, but that is not an unlimited entitlement.

Members, it’s time for me to leave the Chair for the dinner break. The committee will resume at 7.30.

Good evening, members. We are in committee on the Employment Leave Bill, and we’re debating Part 1, clauses 3 to 20A.

19:30

Thank you, Mr Chair. Minister, it’s lovely to see you in the seat. I just want to reiterate that we are really only going through, and asking questions on, the parts that we disagree on and want some clarification on. We are spending the shorter time on Part 1, which we’re currently on now, but we’re on the last clauses, I believe, of Part 1, with the more substantive part being Part 2, as you know.

As I said before, Minister, you know that there’s stuff in this bill that we agree with and we’ve met with and we think is on the right track, but there are other things that we’ve got some clarifying questions around. Some of the stuff that we’ve discussed in this part comes up again, because we’ve talked about the framework, and it will come up again in Part 2—in the more operational side of what it looks like going forward in Part 2. In Part 1, I’m talking now about and asking questions about clauses 17 to 20A. It’s more towards clauses 17 and 18, around the multiple roles, that I wanted to know about. It was just a very short question around the NZNO who—people watching might not know that they are the New Zealand Nurses Organisation—argued that, with the multiple roles, separate balances are unworkable, especially where nurses move between overlapping duties and may need leave from several roles at once. They had an issue where they saw that the employment is with the employer and not an abstract role. I’d be really keen to know, Minister—this is one of our sticking points that we’ve got at the moment, because we didn’t get to that in select committee—what operational advice did Health New Zealand give on clause 17, and did it support separation as the default? That’s the question that I’ve got at the moment. I might have some others depending on the answer to that, but I’d really appreciate having an answer to that question.

19:32

Just on the question that I had around clause 17A around the different roles and the way that those different agreements can be played out, I am interested to hear from the Minister for Workplace Relations and Safety how notional rosters will play within that particular arrangement and also the way that the labour inspectorate might look at the way that work patterns are considered within clause 17A. My concern there is that if you have a particular situation where you have different roles with different agreements, how was the work pattern then determined if there was a disagreement between the employer and an employee, and how will the labour inspectorate determine what is actually the work pattern? Will it look at the agreement by itself and determine whether that one part of that employee’s arrangement has its own work pattern by itself, or will it consider it across the range of different arrangements that it might have? I wonder if the Minister could answer that in the context of the discussions that we’ve had earlier.

I think the Cotton On example was a good example where a submitter came to the select committee—I think it was Workers First—and said, “Actually, we have an example of an employee that has a standard three-hour contract but is actually working 20- or 30-plus hours.” My assumption would be that that would be considered to be a work pattern, but let’s say that that particular employer then divides up those different roles as per clause 17A, how would the labour inspector reconcile the differences? Would it do it purely on that one agreement, or would it look across the range of agreements specifically between that employer and employee?

Mr Chair?

Phil—

How long have we known each other?

—Twyford.

19:34

Ha, ha! Thank you, Mr Chair. Further to my colleagues’ questions, if I could add another one to the list that the Minister for Workplace Relations and Safety is madly scribbling and seek her answer—it’s really just further on this question of whether or not different roles are combined or treated separately. At the committee, the New Zealand Council of Trade Unions argued that the approach in the bill basically overturns established understandings and creates litigation risk. The committee added an agreement option to combine roles and treat them as one, but the Government decided to retain separation as the default, so I’d just be interested in whether the Minister can share the policy thinking behind that. In the case where, basically, you’ve got one employee, one employer, and a continuous employment relationship—regardless of whether there are different roles involved—why has the Government chosen to maintain separation as the default in light of the submissions we heard at committee?

19:36

Thank you, Mr Chair. I wanted to ask about clause 20. It’s about the minimum entitlements. I understand, from what I’m reading in that clause, that this is intended to mean that, no, there was no prohibition on adding to entitlements—you could always have more—but I just wondered about the use of the word “must” in earlier clauses, which seems to prescribe how much those entitlements should be. For example, I noticed, in the notional roster terms, “must be used to determine the standard hours”. Then the same is true throughout. It seems like it’s language that does not point to the fact that there is, in fact, a capacity to go over and above that amount. Now, I’m asking this because of the Hansard, Minister. It’s really important that people understand that there is no boundary on this and that people can, in fact, add to that entitlement.

I know my colleague asked earlier about the issue over family violence leave and a worker who wasn’t going to be entitled to many hours, because it would be calculated in a different way, and so there would be a limits on that. Now, I know that there will be lots of employers out there who definitely, when they’re faced with somebody who’s been through that kind of situation, want to do the right thing and allow that person time off on leave, and so they should be able to. I’d also like to know what happens when it is that kind of oral, discretionary use where people go over and above. What I see in clause 20 is that it looks like that’s much more about having an arrangement in writing over and above that. That’s what I’d like to know. I’d like the assurance from the Minister that people can go over and above, and should go over and above, to meet the human need in that situation, and that that’s what’s intended, despite those strong words that we often associate with an absolute like “must”. Thank you.

19:39

Thank you. Ticking off the contribution by the Hon Jan Tinetti regarding operational advice from Health New Zealand and whether it supported a separation at clause 17A, yes, that is true. Health New Zealand were consulted, and based on the practicalities of managing leave, they did support a separation. This change provides flexibility for employers and employees to agree, based on what is most appropriate within a given context.

19:40

I move, That debate on this question now close.

The question is that Teanau Tuiono’s tabled amendment deleting clause 17A be agreed to.

19:42

Thank you, Mr Chair, and thank you to the Minister for answering that question before. I noted that even though we’ve both left that part now, we might come back to you at some point so that we can understand—not now, Mr Chair, but I mean in the future, so that we can sort of work towards where we can get to that point where we have understanding across the House. Those questions are being asked in earnest around the points that either we disagree with or have some confusion around.

Now, what I’m about to say is probably more for you here. We’re now talking about—I’ve got questions about clause 23. It might sound similar because we’re talking about employees’ entitlement to accrue annual leave. Some of that will be around the standard hours as opposed to the leave compensation payment on hours worked above the standard hours. Now, we have asked a few questions about that before, but that was on the framework. What I’m wanting to ask now is more the operational side of it and what it looks like in Part 2. Even though it might sound similar, there’s quite a big difference between the questions that we asked before to the questions that we’re asking now.

I think the member explaining what she’s doing is a very good idea, because we are not wedded to parts, but information like that is very helpful.

Thank you, Mr Chair. That’s exactly why I have done that, because as I keep saying, these are questions that I really do want to know the answers to so that we’re formulating where we’re standing in these areas.

Early accrual can be administratively useful. We all know that and we all understand it. Absolutely the point of this bill is to take what was essentially a very complicated Act and to simplify it. As I’ve said consistently, it’s hard to disagree with it except that making something simple doesn’t always mean that it makes it better. Our premise is that if there are people who are missing out, when this bill comes in after Royal assent and after the two years, then we can’t support that if we’ve got workers who will be missing out at the end of all of this and are worse off.

We really want to understand why this decision has been made, but from the point of view of those workers who will be missing out. We believe that it should apply to all hours in this bill, and I know I’ve had this conversation with the Minister before.

Can I also say that I’ve got a few examples that have come from the Education and Workforce Committee that I want to ask some questions about. I will say that the departmental report—and thank you to officials because I think the departmental report was an exceptionally good departmental report—outlines the issues really clearly. We had workers from the likes of—I’ve already mentioned the Cotton On workers, so I won’t go back to them. But the Auckland Council delegates urged Parliament to make sure workers earn annual leave and sick leave for every hour they work, including overtime and additional hours, noting that under the bill some would be worse off and would have less leave.

Then I go back to the regulatory impact statement, which expressly acknowledges that some employees will receive reduced leave, including part-time workers and says, “Payroll testing could not be conducted because of time constraints.”

I want to understand the evidence that the Minister has relied on in this particular case to conclude that those losses were proportionate and acceptable. What is the percentage of workers that we’re talking about who are going to be worse off at the end of this and will receive losses or will experience losses? Does the Minister believe that those are proportionate and acceptable? I will leave it there, but yeah, I would really like an answer to that. Thank you, Mr Chair.

19:47

Thank you. Look, I’m happy to give this one a go. Look, I understand the member’s desire to have numbers and figures of specific numbers of people who will be affected in which particular way, but it’s just not possible. If you think about it, I don’t think it would ever be possible. The Government doesn’t hold a central registry of every single employment agreement throughout the country.

We also know that under the current law versus this law, we simply impose minimum standards as a Government, whereas a lot of contracts already go above minimum standards and entitlements. So even if you’re looking at trying to have an analysis of one contract in the present day versus what that contract would look like in a future day when there is a renegotiation happening within that same employment situation, there is always the chance that something goes up and it also goes down because it is quite possibly up for renegotiation. It is actually not feasible to say that this particular number of people will go up or down or sideways or around or whatever you like to call it, because we don’t actually hold how many people already have contracts on minimum standards or have contracts above those standards or how many people through the renegotiation process will even change parts of their contract to be quite different to the current present day. That is where I’ll leave that.

The Hon Phil Twyford.

19:49

That’s music to my ears. Thank you, Mr Chair.

It wasn’t that hard, was it?

No, it wasn’t so hard. It wasn’t so hard. I often forget myself. Further to this point, the Law Society came along to the Education and Workforce Committee and they warned that regular hours not labelled as standard under the bill would not accrue leave. They talked about the incentives that that provides for employers to depress the number of kind of regular hours and keep people on casual hours.

I’m interested in what advice the Minister received on the idea of having a provision deeming actual regular hours, which was clearly not an option that was followed, but I ask whether or not that was considered as an alternative. In trying to get to the nub of this, really, the adoption of the leave compensation payment for non-regular hours or non-standard hours, I’m still not clear, and I’d really like to hear from the Minister why she preferred the option of having the leave compensation payment on additional hours to the simpler alternative, which would have been accruing to a formula on every hour actually worked, which is eminently doable with modern payroll systems. Why was that policy design choice made over the idea of accruing on every hour?

19:50

Thank you, Mr Chair, and thank you to the Minister for Workplace Relations and Safety for engaging. I’m interested in the Minister’s response to the Hon Jan Tinetti about estimations of the number of workers impacted, and I wondered whether the Minister had seen in the media statements—and I’d like to get a reflection—that this will impact 200,000 workers. That analysis was done around figures from Stats New Zealand and they got quite specific, and so I want to know whether the Minister has done any analysis, and, if not, why not, about the impact on workers.

I wanted to tease that into what she feels about that number of 200,000, and they have specific numbers in there. For example, the number in manufacturing, meat, seafood, dairy, fruit and vegetable work, chemicals, and metals is estimated to be 24,000 workers; in electricity supply are 1,500 workers; in heavy and civil engineering and road construction is an estimated 1,500 workers; in retail, supermarkets, motor vehicles, electronic goods, and furniture are an estimated 11,000 workers; in road, bus, rail, water, and air transport are an estimated 13,500 affected workers; in newspaper publishing, broadcasting, and telecommunications are an estimated 1,500 workers impacted; in financial and insurance services are an estimated 6,500 affected workers; in police, corrections, Inland Revenue, the Department of Internal Affairs, the Department of Conservation, and local government are an estimated 35,000 impacted workers; and health, allied health, and health administration workers, and doctors, nurses, midwives, orderly care and support workers, ambulance officers, and social workers number an estimated 106,500 workers, and so that is around about 200,000 workers.

These are very specific numbers. The 200,000 figure is a very big number, and within that analysis there are specific sectors where they have specific numbers. I would like to get a reaction and a reflection from the Minister around whether these figures are correct or not. I ask whether the Minister or her officials have done any estimations on the impact on those workers, and, if they haven’t, then why not—if not, then why not?—and whether there is any other information which gives us a bit more of a reflection.

I don’t think it’s good enough to say, “Well, we don’t know—no one can know. No one can know how many workers this will impact.” I think that it’s important to have done some analysis. If it hasn’t been done, there need to be reasons as to why that has not been done, and if that analysis has not been done, then I think there needs to be some commitment from the Government that an analysis will be done.

Just to round out my question, it is around the Minister’s reflection on those particular numbers—and if the Minister can go into detail on those impacted sectors with their big numbers, that would be really, really helpful—and, following up on that, what analysis has been done, and if no analysis has been done, why hasn’t it? If that analysis has not been done, will there be a commitment to determine how this will impact workers?

19:54

I’m taking a contribution in response to the Hon Jan Tinetti. She queried why the accrual was only on standard hours, I understand. The accrual is on standard hours only, and that does ensure that in most cases the leave entitlements are proportionate to the hours an employee usually works. Removing additional hours from the accrual allows the overall leave system to be simpler.

19:55

Thank you, Mr Chair. I was just going to clause 23, as well. Following the comments from the Minister for Workplace Relations and Safety that she may not have exact figures, I wanted to ask about any consultation that she may have done with the Ministry of Social Development (MSD) or Whaikaha.

There is one group that I’m interested in, which is people who are transitioning from the jobseeker medical or supported living payment into part-time employment. The way that this formula works will see people in part-time employment with, basically, less leave entitlements, and one of the concerns that I have is whether the Minister has done any engagement or received any feedback on how this formula could impact potentially negatively the number of years that someone remains off a benefit but who may be living with health conditions, because those leave entitlements ultimately are critical for people’s wellbeing. If it’s as large for workers who are not working long hours, that will have an impact on them, and so I’m just interested to know whether she actually engaged with Whaikaha or MSD about getting some information around this, and whether the feedback that she received told her that this bill could positively or negatively contribute towards the Government’s overall target of reducing the number of people on a benefit.

We cannot decouple leave entitlements with someone’s ability to remain in employment because, ultimately, there are days that people can then use for a range of other things and other responsibilities, or just to look after themselves. I’m keen to know whether she thinks that the feedback that she got highlighted any issues, and if she didn’t think to highlight it with either of those entities, I’d like to understand why—particularly, the group of people who may be transitioning into employment are those that I think are more likely to find themselves in that sort of precarious state. So does she have any information or any data, and what kind of feedback has she received?

19:57

In response to the Hon Phil Twyford, who queried why I preferred the leave compensation payment (LCP) over accruing leave against every single hour that is worked, this is quite simply about simplicity. Using LCP for additional hours allows the core leave and leave payment rules to be much simpler. The complexity was the main problem with the old Holidays Act, and the core purpose behind this bill is simplicity for everybody.

19:58

Thank you, Mr Chair. I wasn’t on the Education and Workforce Committee, and so I wanted to ask the Minister in the chair some questions that are totally genuine, and I’d like to hear the answers, particularly with regard to the kinds of contracts that I saw that don’t seem to fit this model particularly well. It’s a little bit getting into that area that we’ve talked about, which is about who is affected and about how they’re affected.

One of the groups of workers that I understand are affected are dairy workers, and dairy workers have contractual entitlements which are hours-based over an entire year. I would consider that those would be their standard hours, but they work them when there is a need. That works well for both the employer and the employee, but they work them in crowds, and so they actually work that system to the benefit of both the employer and the employee.

What I am concerned about here is: will some of those hours that they’re working—because they’re working rotating rosters, and you can see the roster pattern. The roster patterns change, but they’re also working additional hours in the milk peaks. They might be a tanker driver and they’re driving in that situation, or they’re processing the milk. What will happen in terms of those workers who are doing the right thing for New Zealand productivity by working a lot of hours at one time, and then they don’t work in areas which are actually the dry season?

So a lot of the Fonterra workers, they go to the mines and they work on the vehicles overseas or they take that time to get that work-life balance. So they can either use it for further income or they can use it for some actual looking after of their children, etc. So those people are using that control they have over their recreation and it’s been based on leave. So what happens to those workers in this situation? Do they have their leave reduced under this bill? I appreciate that they may have a contractual entitlement which is greater than that, but what happens in those situations when we are talking about the productivity that people get through working greater hours and they would have actually accrued leave at the same time under the other system?

I take the point that the Minister’s made that it’s simpler; but is it simpler if, in fact, you’ve got these kinds of complexities in the workforce? What work was done by the Minister, looking at those kinds of contractual arrangements which have been extremely successful in some industries and making sure that we’ve (a) learnt the lessons from them as to what works, and also are we going to detrimentally impact on them? Did we look at, for example, the Fonterra agreement, which is a pretty important agreement and covers a lot of workers in New Zealand? Their collective agreements, they’re a matter of public record, so it shouldn’t have been something that the Minister and the Minister’s advisers couldn’t get hold of—being able to survey the collective agreements. I appreciate it’s very different with individual agreements, where only one person is employed, because they’re not a matter of public record; I think they should be, but they’re not. What sort of analysis was done and are we going to have unintended consequences as a result? Thank you.

20:02

Thank you. Look, in response to that last contribution, I would simply point the member to the commentary in pages 12 and 13 of the Employment Leave Bill as reported back from the Education and Workforce Committee, which actually goes into some detail about the specificity of the dairy industry, because that was something that the committee members raised and asked for official advice on during the select committee period. I would note that they seem to have covered that off quite substantially.

To the query from the Hon Phil Twyford: “What advice did the Minister receive on the actual regular hours deeming provision?” Look, I was advised a notional roster was a simple way to address this. If standard hours are not clear in an employment agreement, the parties will use a notional roster to set them. I was also advised that we would expect employers and employees to engage regularly to ensure that their agreements accurately reflect the hours an employee is required to work.

To the contribution from Teanau Tuiono about analysis on different particular workers: the regulatory impact statement produced by the Ministry of Business, Innovation and Employment identifies a range of impacts. As I have previously stated here in the committee today, it’s not possible to predict the overall impacts because there are so many individual worker contracts and situations. I do, however, acknowledge that employees with variable hours and pay may be experiencing change through this time. In fact, most employees up and down New Zealand will have change in their contracts as we are moving quite a substantial shift from an entitlement to an accrual system.

When it comes to the specific 200,000 figure: look, I think I recalled reading that in the news maybe last week. The example that I remember being reflected back to me was one particular case of somebody who had a particular contract and they said, based on that contract, this is the minimum entitlements under this law, they put that they’ll go backwards. But I would simply raise the point that their contract, on the face of it, looks like they’re already negotiated above the minimum standards now, so, in theory, they would only be going backwards in regards to the minimum standards. But if they’ve already managed to negotiate above and beyond the minimum standards of the Holidays Act, I would be very surprised if they were also not creating an employment agreement that was contracting above the minimum standards of the Employment Leave Bill.

20:05

Thank you, Mr Chair. I just want to point out for the other side of the Chamber that they possibly can’t see that the Minister is signalling to you and we can see on this side. So if they think that we’re not standing up, it’s because we can see the Minister signalling, because we just had someone very eager to take a closure motion, Mr Chair.

That would be very optimistic, I might say. The member should have a look at how big this part is.

Ha, ha! It’s a very, very big part. Thank you, Mr Chair.

I just want to go back to that answer, actually. I had another question that I wanted to ask, but I’m going to ask this one instead. You gave an answer there to Hon Phil Twyford’s question around the variable hours. I get that for salaried workers, such as the New Zealand Air Line Pilots’ Association, had they raised concerns about that and about how hours-based accrual for annual leave is ill-suited to the aviation sector because their employees are salaried but work variable roster-driven schedules, rather than fixed hours. Yes, there were some changes that were made during the select committee process and the select committee reported back with the work around the notional roster. I think that was good work that was done in that particular place. I don’t think that that’s the question Phil Twyford was actually asking about.

So we’re talking about workers who are not salaried, but their standard hours of employment—and I’m going to go back to an example that I used in Part 1, and it was Cotton On, I think, employees, whose standard hours were three hours’ a week, but there were hours extra and above that they were consistently working. So they’re not salaried, they’re not on a set amount, they’re on the three hours’ a week and they are then required to work consistently other hours on top of that as part of their employment agreement. Their leave is only calculated on those three hours, because those are their standard hours. It is not a notional roster—they are not working on a notional roster. I believe that’s what my colleague’s question was about was the advice for those workers as to why a decision wasn’t made to generate leave on every hour that they work. It’s what we’re trying to get to the bottom of here is what advice and why was the decision made to do that, rather than working on just the standard hours? So I hope that clarifies it for you, Minister. Thank you.

20:08

I actually think that’s a good example. I was going to bring it up myself, but I do have the submission in front of me. I would like to test with the Minister whether these calculations are correct as it was submitted to the select committee. Under the Holidays Act 2003, an employee may agree with how the employee’s entitlements to four weeks’ annual pay are to be met. If we look at the Cotton On example, who consistently works around 20 hours—so significantly above the three standard hours—this would constitute a genuine working week for them and that would be like if they took a weeks’ leave. But if we look at the calculations under the amendments put forward under this bill, then, under this definition, the Cotton On members who would only accrue hours on those three standard hours, over 52 weeks, these members would receive less than 12 hours of annual leave. So you have this example of a Cotton On retail worker working three standard hours, but actually working around about 20 hours, give or take, for an entire year. Because they’re only being able to accrue just on those three hours, then their total sum of annual leave is only 12 hours. So I do want to test with the Minister whether that calculation is correct; if not, why not?

My other question does go back to my other question around the potentially 200,000 estimated impacted workers, along with all of those other numbers. I think that the analysis was good enough, done by this particular union—by the PSA—that it did manage to get sector to sector to sector, that it should, I think, warrant a commitment from the Minister to actually do some analysis on how this will actually impact the workers. If it’s not 200,000 workers, then how many is it? Even 100,000 would be absolutely terrible. To not know, I think, is not good enough. I would like to know if there is a willingness from the Minister to actually commit to see how this will actually impact workers—their annual leave, in this particular perspective.

Just to loop back to that Cotton On example, will these Cotton On retail workers, as in the example that we’ve talked about through the night, who are accruing annual leave just for their three standard hours per week, over 52 weeks only accrue 12 hours of annual leave? That’s a problem, because the purpose of this bill, as we have previously talked about, is to make sure that people have the ability to rest, have the ability to spend time with their family—making sure that we get that work-life balance. So, I think it’s a very specific question there around the impacts of this on those particular workers and, also, what the Minister thinks about committing to make sure to find out how this will impact workers in the long run.

20:11

Thank you. In response to Ricardo Menéndez March, regarding the Ministry of Social Development and whether or not we’ve engaged with them about people transitioning from jobseeker support to part-time employment, yes, my officials did engage with the Ministry of Social Development. I expressed my views in the Cabinet paper that I did not expect the changes to impact work incentives. I think most people do want to be in work and not on a benefit.

20:12

Thank you, Mr Chair. There’s a clarification that I wanted to make in this particular clause, clause 23, around an issue that Community Law Centres of Aotearoa brought up during the select committee process. They observed there that the bill, as we’ve discussed here, replaces the week-based entitlements, but there seems to be a bit of an anomaly around how, if you’ve got a worker who increases their hours during that period that they’re working, the leave seems to be less than what they would have got had it been the weeks-based entitlement. Now, it means that they’re going to have quite a lot fewer leave days or hours that they will be getting with that, and it seems that they would be worse off under this bill.

I only ask if the Minister thinks that this is OK or is agreeable to this. I only ask this because it’s quite common, particularly with the world of work now, that we have young people who are starting out at work—particularly young people; there’s others, as well, but young people particularly will start out and only have a few hours and, as they go through, they will start to get more hours. I’d like some clarification around that, please, and if that’s acceptable to the Minister.

20:13

Thank you for the question, and I’ll respond to Jan Tinetti. Look, I think, in part, the way that the previous law worked was quite weird. Some people who had been working at a full-time capacity actually lost, once they moved to a part-time capacity, a lot of what you’d expect if we’d been in an accrual model, because now they were only getting a smaller portion of an entitlement. The same counterfactual is true: somebody who was on a smaller number of hours and who then moved to a full-time role could then, all of a sudden, get four full weeks of entitlement. So, some people levelled up and some people levelled down.

What this bill does is it makes the whole system a lot fairer, and how much leave you get is based on how many hours you have accrued over time or how much work you have done, which, I think, leads us to a better place. So, yes, I’ll acknowledge there will be some change for some people going back and forth based on what the current law has done, but overall, it is a much fairer system.

The Hon Jan Tinetti also queried why we don’t just generate leave on every hour worked, rather than just standard hours. As I’ve already stated tonight, attempting to cater for all additional and casual hours in the core leave system would generate an immense amount of complexity. That is the cause of much of the complexity and confusion that exists under the current Act, which we’re hoping to remove.

20:15

Can I ask about clause 26A; it’s about the issue about taking annual leave. I looked for a definition of “all reasonable efforts”, which is the standard that the employer’s held to when they decide whether an employee can take the leave they asked to take. There was no definition in that. I’d like to know, is that because there’s a good definition in case law on this, or is it an intended consequence that there will be case law developed around the term “all reasonable efforts”?

Then I noticed, when we got to the part that was about an employer being able to choose when leave was taken—if they make all reasonable efforts, but they don’t agree and then the employer gets to decide when that leave is taken, we used to have a rule that said that there was a switch. If it was statutory leave, then it was the employee’s choice. If it was a day that was in lieu of statutory leave, for example, the employee got to choose when it would be, and the employer got to choose if it was an annual leave day. Is that still in play in this law? Have we changed that, or is it happening?

Did anybody think about putting something in the law about what happens in a situation where an employer is facing a pandemic again? This was one of the realities of the last law—it didn’t deal with that very well at all. What we had were employers sending letters out to a whole lot of people saying, “You’re on leave,” and they wouldn’t—I don’t think—have met an “all reasonable efforts” kind of test. There were some that failed to give any notice whatsoever, but I did see the issue for the employers of things that came up that just meant they had to react quickly like that. Was that something that was discussed at all by the Education and Workforce Committee—some sort of mechanism for the use of that in circumstances? Or did we decide, as the case law has, that that’s rest and recreation, and so it’s not appropriate to use annual leave in that way—which is a very valid thing to decide, and, in fact, what I think the case law came down to in the end? Have we decided that’s not a broken part of the law? I’d like your comments on this particular section and what you envisage will happen from now on. Thank you.

20:18

Further to that contribution, I’d be interested in the Minister being able to expand on the amount of time she would think that an employee and employer need to take those reasonable steps in order to get to agreement on when the leave is taken. It’s not just what those reasonable steps look like but the time frame in which that may occur, right? Because in some workplaces, the employee and the employer may not always be in day-to-day or frequent communication—for example, whether it’s remote work, etc.

If there is no case law that the Minister is drawing on to define reasonable steps, I’d be interested to at least hear from the Minister what her intent is with the language in there, and particularly the time frame in which that agreement must happen or the Minister expects it to happen. It’s important, in my view, because sometimes people do have to make leave requests that are time-sensitive due to unexpected circumstances. If the Minister is able to provide further guidance not just on what those steps look like but what would be a reasonable time frame in which that is decided, that would give greater clarity to workers—and employers, actually—across the country on how she expects this to work in practice. Otherwise, I think—and as Helen White points out—without a definition, it could be very broadly interpreted by both parties.

20:20

Thank you, Mr Chair. My question is around Subpart 1, “Annual leave”, clause 24(1)(c), and it’s around when an employee’s receiving accident compensation. My first question is: what we see here is that the capitals “ACC” have been crossed out and we’ve just got “accident compensation.” So my first question is around clarification about what that is. Is that accident compensation as something that is distinct from the ACC system which we all know, or is it something else that the committee might not be aware of or some of us might not be aware of? So getting some clarification on that as well.

When I read 24(2)(b) and it talks about the amount of leave that is accrued while someone is under ACC, it just links it to that “standard hours”. So, just thinking back to other situations, and we have talked about the example of someone with three hours but they’re actually working 20 hours or 30 hours or whatever, and something happens and they’re on ACC—accident compensation. Would it still be, as I’m reading it, that they will still only get the accrual of that annual leave just on those standard hours, or is there something else that we’re missing from that point? If the Minister for Workplace Relations and Safety could expand on that.

I would also be interested in how the Minister thinks that notional rosters might pay in this perspective in terms of ensuring that there’s clarity around those work patterns. I think of an example where perhaps there’s a disagreement between the employer and employee around what should or shouldn’t be a standard hour and being able to include those so-called casual hours into those standard hours. How does that work, and how does that link in in terms of the way that a worker might be receiving ACC and then being able to accurately calculate what their annual leave accrual will be?

20:22

Thank you. Look, Teanau Tuiono and, I believe, other members asked questions about specific examples about not accruing on additional hours. I think, in part, there was an example of one particular contract with a small number of specified standard hours. Look, the advice that I have from my officials is that it’s not just what is written in an employment agreement that matters. The definitions of additional and standard hours mean that if an employee is required to work hours and can’t turn them down, they would be considered standard hours. I was advised that defining types of hours specifically for the purposes of the bill would ensure employees accrue leave on hours they are required to work. So catering for additional hours in the core system would add significant complexity, but it’s quite an important distinction that if someone is actually required to work those hours, they are standard hours, whereas additional hours are things that workers can take or leave, and casual hours are also—you can take it or leave it.

20:23

Thank you, Mr Chair. The primary impact of these provisions, as the regulatory impact statement (RIS) expressly acknowledges, is that there are significant numbers of employees who will lose access to significant amounts of annual leave. That’s in the RIS. It’s the very nature of the provisions in this bill.

The Council of Trade Unions, at the Education and Workforce Committee, gave an example of a worker with guaranteed hours of eight per week but who would regularly pick up additional shifts to give them an average of 32 hours over a four-day week. Now, after working for a full year, they will have, under the bill, 32 hours of annual leave available—after a full year. That’s basically enough to take, you know, one week off, whereas they would’ve had four weeks prior to this bill. If the worker wanted to take days off work, under this bill, based on those hours, they would have enough leave for four days. Under the current Act, one day would represent quarter of a week and therefore they could basically take 16 days off, spread through the year. That’s an extraordinary reduction in access to annual leave for workers who are working close to full-time hours.

I guess, for me, this is central to the concerns that we have about this bill. I’d be interested to hear from the Minister for Workplace Relations and Safety what was the calculus in her mind and her colleagues to, basically, come to the view that that’s acceptable for workers to lose that much annual leave. How is that acceptable?

20:26

Thank you. I have a follow-up to my colleague’s last question, and it does relate back a little bit to Part 1, because we did discuss that part in Part 1. My colleague talked about the practical implications of the leave that people would be losing. We know—and we’ve traversed this—that leave is being generated on the standard hours and then there’s the leave compensation payment for the additional hours that are worked. Often, people will have to take that payment. Yet the Education and Workforce Committee, rightfully, inserted in that one of the absolute principles of leave was for rest and recreation. The fact that now we’ve heard these practical examples and the fact that workers will be getting a payment instead, this is where I think there’s a conflict, and I can’t resolve that conflict easily, because you’ve got money and monetising leave, which I think is a fundamental issue with this bill, that it’s seen as a cost rather than the primary reason for rest and recreation.

My question is on the advice that the Minister for Workplace Relations and Safety received on that new recommendation, which I believe is right, but how the leave compensation payment defeats the purpose of that recreation. So whether the Minister received advice, and why it’s proceeding in the way that it’s proceeding at the moment.

20:28

Thank you, Mr Chair. I just want to talk to a different clause now in Part 2, which is clause 29. That’s what occurs when an employee may take annual leave: “standard hours specified in notional roster”. It talks about subsection (4), which I assume is subsection 4 of clause 28, which states that “The employee may, in accordance with this subpart, take as annual leave any standard hours specified in the work roster”.

What I find confusing is whether standard hours are normally included in a notional roster, because my understanding—and if the Minister for Workplace Relations and Safety perhaps can talk us through this—of the purpose of the notional roster is more around when it’s got changes made to it, because when you look at 29(1)(b), it says, “Subsection (4) applies”—this is in relation to a notional roster—“an employee has a notional roster; and (b) before the employer sets a work roster, (i) the employee makes a request to take annual leave; or (ii) the employee and their employer agree that the employee may take annual leave.” This seems confused, because it seems to imply that the application is made prior to the roster being set, but if the roster were standard, then surely the roster would be fixed and we would know what the roster was.

So my reading of this clause brings me to quite a few interpretation questions. I guess, the overarching comment that I would make is that the original purpose of part of this law was to actually try to make interpreting some of this law clearer for everyone involved in employment practices. When I read this, as someone who used to practise in this area, I read this and become very confused around how these two clauses interact—clauses 28 and 29. It causes me some concern that we’re then going to have disputes between employees and employers about whether that’s a notional roster, whether it’s a standard/fixed roster, and what’s, therefore, operating.

For example, if an employee has a roster that says they’ve got 20 hours a week but they could work across five different days, they might do eight-hour days, and it operates across different days within the week depending on what’s happening that week. Those sorts of rosters can be quite common. We know that you’re going to have 20 hours a week, but we’re not sure exactly which days of the week you’re going to work them. Under current law generally—this is often a collective agreement or some case law—let’s say that, over six months, you’ve built into working Monday, Tuesday, and half of Wednesday, ultimately, that would then become your consistent roster.

What this implies is that you can only apply for the leave before the roster’s set, but if the roster is fixed, then how is it being set again? I’m getting quite confused, reading clause 29, especially in conjunction with clause 28, which implies that annual leave actually only applies when it’s a standard hour that’s specified in the work roster, as opposed to a set of hours that are different. When I read clauses 28 and 29, I’m finding this quite confused in terms of interpretation. I can see that the way this is drafted is going to cause some confusion for employers and employees—potentially some disputes. I’d be really helped by the Minister actually giving a detailed response as to how clause 29 will operate in practice.

20:32

Thank you. Look, firstly, in regards to Teanau Tuiono’s query about clauses 24(1)(c) and, I can only then assume, 24(3)—this is about the words “ACC” being changed to “accident compensation”; are they distinct, or why has this been done?—the change from “ACC” to “accident compensation” is purely editorial. “ACC” is the department, and “accident compensation” is what an employee receives. It’s a good change to have been made in the bill.

Teanau Tuiono also asked what I thought about doing analysis on the bill and how it will impact workers in the long run—yeah, why not? The Ministry of Business, Innovation and Employment (MBIE) has completed a regulatory impact statement for the bill, as has been required, and MBIE would be expected to monitor the impacts of the bill in the long term as part of its regulatory stewardship responsibilities. Helen White also asked a query about the intent of the “reasonable efforts” language in clause 26A. The requirement to agree when annual leave is taken retains the status quo. The addition of “all reasonable efforts” is intended to strengthen the provision and to provide that genuine effort to agree must be made.

20:33

Thank you, Mr Chair. Just to follow up on the answer from the Minister, I’m glad to hear that she will be talking to the Ministry of Business, Innovation and Employment (MBIE) about doing that long-term analysis because I think it is important. Is it the Minister’s expectation that it will look at the potential impacts that that has had on workers? I say that in the context of the discussions that we’ve had so far in this committee of the whole House stage around the impacts on an estimated 200,000 workers and those various sectors that I outlined. I think it would point to whether this bill is working or not. I think it is an incredibly important point to make that if this has actually, post the analysis by MBIE, impacted 200,000 workers and it has reduced their annual leave, then that is something significant that the House should pay attention to. I’d be interested in terms of the follow-up to that.

I did ask an earlier question around the Cotton On example as well. I haven’t yet heard a response on that—whether that was correct or not. This is the example of the three-hour standard hours that the person was working where, over 52 weeks, they would only be receiving 12 hours of annual income. It’s a very specific example, but I think it’s important to give specific examples because I know that a lot of workers across the country will be trying to figure out whether they actually can afford to take annual leave. Can you really afford to take annual leave if you’re only going to get 12 hours, or should we be pitching to try to get more of those casual hours so that they can pay their bills? These decisions have flow-on impacts to the decisions that people make. If they can’t take holidays because they’re only going to get 12 hours, then they actually can’t afford to have a holiday, which, in my mind, defeats the purpose of the Act, which we’ve discussed in an earlier part. I would like a specific answer to that question.

I also think it’s important for us to really tease out the relationship between the way that the notional roster will work to specify standard hours as well, so that we can avoid confusion. I guess on the back of what Rachel Boyack was saying as well, what advice is going to be given to the labour inspectorate, and what resourcing is going to be put into the labour inspectorate when, inevitably, these disagreements are going to happen? You could have a workplace or a work site where you’ve got 30 employees on 30 different arrangements—some of them are on different standard hours, and some of them are on multiple role agreements—and if you’re going to send one inspector in there to do all of that stuff, then can the system actually cope? I really am interested in the answer that will hopefully be presented to Rachel Boyack’s question. How is this actually going to be resourced, and have all the different scenarios or the different permutations of how this will impact different work sites—and we know that they’re so varied and so different in terms of the way that different work sites work, so how is the labour inspector actually going to be able to contain this?

Just to go back, I had a very specific answer on that question I had around the person with the three standard hours: are they going to, over a year, only get 12 hours annual leave? Because that’s terrible; no holidays for them. Secondly, I had questions around the resourcing of the labour inspectorate in terms of what needs to be done and also the relationship between the notional rosters, which was brought up, because I think that clarity is sorely needed.

20:38

Thank you, Mr Chair. I’ve just got two further questions for the Minister. I’m hoping that I’ll have an answer to clause 29 off the back of, hopefully, some advice from officials to the Minister. I actually just briefly want to touch on some of the other comments made by my colleagues Teanau Tuiono and Phil Twyford, which also related back to Part 1. This is just an extra piece of information. I realised that we have traversed this quite a bit, but it’s an extra piece of information I just want to bring into the conversation. This is about the situation where a person has five regular hours, so that’s what’s used to build their annual leave entitlement, and then they may do 15 to 20 hours a week, and then that has the 12.5 percent compensation. What that has led to is that when they actually take their annual leave, they have a very small amount to access. What I wanted to specifically ask the Minister on that is that that’s kind of a combining of two things that currently happens in the law. One is where you do have that fixed annually; the second is where you have holiday pay which can either be paid as you go or it can actually be held back and given in a lump sum. It appears that, in this legislation, an employee can’t choose to hold it back as a lump sum.

The Deputy Prime Minister, when he was in the chair earlier today—and I was intending to push back earlier but didn’t get an opportunity—said, “Oh well, people could save that 12.5 percent so that they’ve got a pot of money sitting there for when they take that leave.” I’ve worked in this area for a very long time, and I was once one of those part-time workers at university who received, I think it was, 6 percent holiday pay on top of my pay. Most workers on low incomes and part-time type jobs don’t have the mechanism to save, especially when we’re in a cost of living crisis like we are now. If that 12 percent they’re receiving weekly is going to be the difference between fixing the car or not, or paying the power bill or not, or taking the child to the doctor or not, they’re not going to save that for their annual leave; they’re going to spend it at the time.

One of the benefits of having that annual leave actually properly accrue is an employee being able to say, “No, I would rather the employer, essentially, built that money up so that, when I take that leave, I can also receive my holiday pay in a lump sum.” My question to the Minister is: what advice did she receive in terms of the impact on those low-paid workers? I accept that, if somebody’s on $100,000 a year or whatever, they should be able to put some money away each week to save for that holiday, but for somebody on a minimum wage job where the hours fluctuate quite substantially and they might be a solo parent, it’s far more difficult to do that. That’s my specific question. Why is it not built into the law that the employee can make a choice between having, essentially, what is a replacement for holiday pay paid out on a weekly basis, or get the lump sum?

Now, this is back to clause 29, and I do hope the Minister, when she makes her next contribution, will respond to my earlier question, but I just want to clarify, because I’ve had an opportunity now. I wasn’t on the Education and Workforce Committee to read through the definition of “notional roster”, which clearly states that it applies if it is not possible to determine one or more of the following: the number of the employee’s standard hours, the days of the week on which the employee has standard hours, or the hours in each day that the employee has standard hours. Reading that, it’s quite clear that the notional roster applies when you do have a difference, potentially, from week to week—that 20-hour scenario I mentioned where each week you might work slightly different days and times of the day.

What concerns me is if an employee has worked, let’s say for three weeks in a row, the same set of hours—they apply for annual leave prior to the notional roster being put in place and they apply for those days that they were working; they’ve been working Monday, Tuesday, and Wednesday for three weeks. The employee receives the annual leave application and then—I’ll be honest, some employers don’t always follow rules in a way that is beneficial to employees—they say, “Well, actually, no, this week, the notional roster says Wednesday, Thursday, and Friday, not Monday, Tuesday, and Wednesday; therefore, there’s no annual leave, because you’re not working.” That’s a scenario I’m just putting to the Minister in terms of the confusion around clause 29.

What types of patterns—I can see a situation where case law is going to come into this quite substantially to determine how many weeks determine the pattern, so that the employer couldn’t fudge the notional roster to kind of, essentially, screw the scrum a little bit. Employers do that. I have seen them do that many, many times, especially in some of these casual type roles. I’d be really interested in the Minister’s explanation of how clause 29 will work in practice, off the back of my earlier contribution and this addition just now.

20:43

Thank you. I’m happy to respond to a number of the contributions here tonight. Firstly, to Teanau Tuiono, who queried employees on accident compensation not being able to accrue leave on additional and casual hours and what role the notional roster would play there: the notional rosters, by definition, account for standard hours only, but separately the bill provides that leave does not accrue during periods when an employee is on unpaid leave and receiving weekly compensation. In part, this is to avoid the potential for a large leave liability for long-term ACC clients.

The Hon Jan Tinetti had a query around the leave compensation payment (LCP) and whether or not that defeated the purpose of rest and recreation and whether or not I received advice on this. I did receive advice on how variable hours could be accommodated in the leave system. The intent of the LCP is to simplify the leave system. The LCP simply shifts the timing of leave pay. Under the bill, compensation occurs when hours are worked, but for every hour worked, employees will either accrue leave or receive a financial compensation. They cannot be required to work any hours that they have received the LCP on.

The Hon Phil Twyford had a question about the number of employees that would lose access to amounts of annual leave and what my thinking was when deciding whether or not this was acceptable. As I’ve already traversed, the LCP will shift the timing of leave paid. For every hour worked, employees will either receive the LCP or they will accrue the paid time off. There is a compensation for work, for leave, either way. People don’t simply lose out; they’re still getting a financial payment either way.

Rachel Boyack had a query about standard hours normally included in a notional roster and also had a secondary contribution, as a follow-up, on what the purpose was of the notional roster. The notional rosters address a situation where an employment agreement states that the employee has standard hours, but it doesn’t include all the information—for example, the days or the hours that are worked—to enable leave entitlements to actually be determined.

Rachel Boyack also then queried clauses 28 and 29, about how that notional roster works in practice. Employees can apply for leave at any time. Clauses 28 and 29 determine which hours leave can be taken on. If a roster has been set for the week in question, when the employee requests leave, that will take precedent. If the exact schedule hasn’t been set yet and leave is requested, the employee can rely on the notional roster to request leave.

The Hon Phil Twyford—members will probably need to keep moving through the bill now. There’s a little way to go. Thank you.

20:46

Thank you. In that vein, speaking to clause 33, the Minister’s answer to my earlier question about the loss of annual leave and its kind of financialisaton, if you like, converting time off into a dollar payment, is quite a good segue into a discussion about clause 33, which introduces to the bill this idea that up to 25 percent of accrued annual leave may be cashed up by request.

On a note in passing, the committee adopted or proposed that it should permit recovery of genuine erroneous payments, cash payments. I think that’s uncontroversial, or it should be, but Labour’s concern about these provisions is that they’re coming on top of the effect of the leave compensation payment. The cashing-up provisions really compound that problem. They create a situation where it’s very likely that significant numbers of workers will, by sheer dint of economic necessity, particularly low-paid workers, choose to cash up the 25 percent and will lose time off and their necessary rest and recreation.

It will be well known to the Minister and all members of this committee that, in the OECD, New Zealanders work some of the longest hours. That applies to part-time workers as well, because they often have multiple jobs. Some people have to drive across town in between doing two or three jobs. We work bloody hard, and people need time off. They need time off for their health and wellbeing, for the wellbeing of their families. Our concern is that the cashing-up provision, combined with the kind of essential element of this bill, which is to convert significant amounts of people’s leave into a dollar payment, is going to mean that many, many workers will end up without the necessary time off work that’s necessary for their productivity but also for their health and wellbeing.

The departmental report makes the observation that the unions, who came along to the committee, consistently reported concern about this—that the cashing-up provisions undermine the rest and recreation that workers need—and employers, in a kind of symmetry on the other side, just argued for administrative simplicity.

That is like a recap of the select committee. I’m wondering when the question is coming.

Yes, the question is: what evidence did the Minister use to weigh up those competing arguments? And what evidence really led her to settle on the 25 percent formula?

20:50

I’m very happy to take that contribution. Look, it was quite a simple way of creating the law for clause 33, getting to the 25 percent amount, in part because we’re moving from the entitlement to an accrual system.

Under the entitlement system, at the moment a person is able to cash up one week. This 25 percent provision is, essentially, an equivalency, as much as we have one, of having 25 percent. However, it does have, I guess, the additional benefit that for some people they do actually do more. They may not actually wish to take the full time off. I know a lot of people do like to take a full holiday, but some people actually don’t and find it really hard to take time off. I know some employers out there actually have to encourage people to take leave sometimes because they’ve got staff that just always want to work. If you have that personality type who actually really enjoys going to work and doesn’t want to be forced to take extra leave because it’s becoming a bit of a liability on the company’s books, you could simply cash up 25 percent; it’s not difficult.

In regard to Rachel Boyack’s earlier question about what advice I received about the impact of the leave compensation payment (LCP) on lower-income workers or why employees couldn’t choose between the LCP and accrual, look, the impacts of the LCP will be felt differently by different workers. Advice I received emphasised that many workers would appreciate the additional cash in hand that an LCP provides. The LCP cannot be optional, because its purpose is to account for the value of leave in relation to certain types of hours. Optionality in this space would have added confusion and complexity.

There was also a query from Teanau Tuiono about whether or not the system could cope with added burden for the Labour Inspectorate and how it would be resourced. As always, the Labour Inspectorate prioritises based on harm. I would expect that the two-year implementation period would provide time for all parties to understand and be ready to implement and enforce the new framework. The Ministry of Business, Innovation and Employment’s enforcement approach will be focused on education and guidance in the very first instance. A simpler framework overall will help to aide our enforcement in the longer term, because it will be a simpler law for both the workers and employers to follow.

Teanau Tuiono also had a query in regard to a very specific example for one company. I did actually respond to that earlier, but I didn’t use the particular company’s name, mainly because I haven’t actually seen that particular contract. I don’t want to, within the Hansard, say hand on heart what that would actually be. However, if you took a theoretical example of a company that had three standard hours for their workers, accruing 12 hours’ leave over 52 weeks would be correct, but only if the employee is not required to work the hours on top of the three hours.

20:54

Thank you, Madam Chair. Just following on the contribution from the Minister for Workplace Relations and Safety, I wanted to know whether the Minister had any evidential basis for whether there’s any sort of sectors or how prevalent this situation and this sort of a very hypothetical scenario that she presented is, where people just want to keep working and not actually take time to rest and instead cash in their annual leave. On the one hand, she talked about it as though this is prevalent. On the other hand, she also noted that there are people who kind of need to be pressured into taking rest because of the impact. I assume it’s due to part of the impact it could have on their wellbeing. I’m curious to know whether she recognises that the lack of rest that these provisions could create could actually worsen our health outcomes for workers. I’m also interested in whether she received any feedback from the likes of Health New Zealand or other agencies on the very same impact it could have on people’s wellbeing and health; and if so, what was it?

I’m also interested in clause 33(5)—moving on to the part where an employer is not required to give an employee a reason for declining the request. I was just curious and I want to know what the Minister’s rationale is for having this written, because we have, basically, a requirement that the request is made in writing. I would assume that perhaps the employee may choose to put some of their reasons why they may be cashing it in, if there’s such broad discretion for the employer to say yes or no. Perhaps, as the Hon Phil Twyford mentioned, it would be a situation of financial hardship that the person may find themselves in—that they may just need that extra money due to the economic conditions and low wages that this Government has contributed to.

If an employer is not required to give an employee a reason for declining their request and that employee sees, for example, that their coworkers are having their cash-up request approved, would it not start raising issues of fairness within the workplace or potentially mask discrimination that may be occurring? I could see a situation where you have 10 employees, a group of them seem to be favoured by the employer and they’re being able to make these requests and the employer seems to be favourable towards them, whereas another group isn’t. If there’s no reason for the employer to provide a reason for the decline, do we not risk entrenching certain biases and gaps that already exist in the workplace in relationship to these requests?

I’m asking the Minister what the rationale is for this and whether she received any advice or is concerned about this entrenching discrimination in the workplace, particularly along gender and ethnic lines, and whether she thinks that this very same provision could lead to tensions in the workplace if one group of employees find themselves on the side of the employer and the employer may be more willing to provide that cash-up? The other one was, just to recap on this, the evidential basis for the comments that the Minister made in relationship to people not wanting to take time to rest and whether she thinks that could actually have an impact on people’s health.

20:58

I can tick off this contribution quite quickly. Thank you to Ricardo Menéndez March. There’s nothing really controversial here in terms of requesting leave and bosses not necessarily needing to give a rationale, because that’s just the current law. We’re just keeping it ticking over into this one.

Hon Phil Twyford—and we’ll have a question, please. Thank you.

I predict that too.

Good. Thank you.

Clauses 34 and 35, essentially, ban employers coercing staff to cash up their annual leave, but, as the Minister for Workplace Relations and Safety will well know, workplaces are not democratic environments. If you think about the position of part-time and casual workers, they’re often getting hours at the whim of a supervisor or an employer. They’re often very vulnerable to pressure and coercion. I wonder what advice the Minister’s had about how effective this statutory ban will be on requiring people to cash up their leave in that kind of environment, when you consider the possibility of indirect pressure and coercion—the supervisor saying, “Well, it’s company policy. We want you to cash up 25 percent of your annual leave. And how many shifts were you wanting to get next week or next fortnight or next month, by the way?”

20:59

Thank you, Madam Chair. I also have a question regarding clauses 33 through to whichever the ones are that talk about cashing up—I think it’s clauses 33 and 34. It follows on from my colleague Phil Twyford’s question before around why the 25 percent was chosen and the impact that that would have, and the advice that the Minister got. I totally, absolutely understand the answer that was given, but following on from that, at select committee, we saw that workforces are changing, and the nature of workforces is changing. There’s more casualisation in workforces. There are more extra hours that are undertaken. Even when I’ve spoken to peak body business groups, such as Business Canterbury, they have said the majority of their employers now will deal with more uneven work rosters. They will have more casualisation within that on top of standard hours.

The 25 percent makes sense, from the Minister’s answer, but given the additional and casual hours that are being cashed out through the leave compensation payment (LCP), and we know that the likelihood of that being generated is increasing according to business peak body groups because of the changing nature of work, what advice did the Minister receive on the cumulative amount of leave converted to cash across the workforce? Both the 25 percent and the LCP together; what advice was given around that? To me, that seems to be the biggest question in this space, given that we’ve heard about the vulnerability of workforces, and also the low-paid nature of some of these workforces in that area. I’m really interested in the cumulative nature of what’s happening.

21:02

I’m happy to answer a contribution by Ricardo Menéndez March about the evidence that I have that anyone actually prefers to cash out their leave. Yes, I’ve received correspondence from both employees and employers who appreciate the flexibility to cash up some of their leave. The framework provides protections for employees, though, that they cannot be required to cash up. I also know Health New Zealand did not raise this with my officials.

First of all, I’ve got a question that is quite fundamental, and I actually don’t feel satisfied with the answer to Phil Twyford’s question about the people who lose under the system, and it’s acknowledged in the regulatory impact statement (RIS). I haven’t heard the Minister acknowledge that she accepts that; that there are people who are going to be on a lot less. It’s often those part-time employees. It’s often women, actually.

What I want to know is: in a world where we need people to parent, we had a system that was weeks of leave. So, if you’re working a short amount in that week, you could still work, in the context, particularly, of asking your employer whether you could take that time off to meet the needs of your kids in the holidays. Isn’t this going to cause issues where those very same people aren’t able to cover an entire week because we’ve gone to a system of hours rather than weeks? Then we’ve got the issue of the 25 percent which they can cash out, but it’s actually 25 percent, in your words; you talked about that, Minister. In your head, as far as I understood, the explanation was that it was because 25 percent is a week. Isn’t it, in fact, that the Minister, in the legislation, is assuming people are working full time and weeks, and in fact, the 25 percent is proxy for a week and the system’s moved on from that and people are much, much worse off because they won’t be able to meet those needs, which are part of the needs of rest and recreation—are seeing our kids. That’s my first question.

My second question is that I was really alarmed when I read the RIS and I looked at paragraph 77, and it says, “Part-time employees, who account for approximately 21 percent of the total workforce, would receive less sick pay while employees on weekly compensation payments would not accrue annual leave while they are off work.” It talks about women and disabled people being the ones who are part-time, and the employees who are in manufacturing and agriculture are the ones who will be suffering the work-related injuries. Have you got a response to that? Those are the workers that we are really going to have as the losers of this legislation—our part-time workers, our women, our disabled, and our manual workers who will suffer injuries. I’d like to know that.

Then I’ve got a question about clause 38, and that clause is about sick leave. Now, my understanding is that the law had a capacity in it until now where it was possible, if you were on annual leave and you got sick, it could be put into your sick leave and you would recover that annual leave to use for rest and recreation, because you’ve been sick during it. This clause 38(2) distinguishes itself from the other sections. It says that the “employee may, with the employer’s agreement, take as sick leave any period of sickness or injury that … would otherwise take as annual leave.” That’s different, isn’t it? Can you just confirm that we’re changing the law and reducing the rights of workers with regard to sick leave?

I see that that’s not the case in clauses 39 or 40. Both of those are about different types of leave: bereavement leave and family violence leave. They are ones where we prescribe that the employer “must”. In what circumstances is an employer going to say, “Let’s change this so that it’s sick leave and swap it out”? It seems to be only if they agree to it, and it’s not what I talked to the Minister about before. It’s not a term like “reasonableness”—that it can’t be unreasonably withheld. There seems to be no constraints on when an employer can say “Tough, you might have had pneumonia but you’ve used your annual leave. You won’t be using your sick leave.” Can I have answers to all those questions? Thank you.

21:07

Thank you. Look, I’ll take a couple of these contributions, firstly from the Hon Phil Twyford regarding clauses 34 and 35, about advice I have received about the effectiveness of prohibiting employers from requiring that an employee cash in their leave. The provisions are carried over from the current Act. The framework was designed to provide protections for employees. I’m not aware of any issues where employers require employees to cash up under the current system. There are penalties that apply if this happened, under the bill, and employees retain the leave that they’ve been required to cash up.

Ricardo Menéndez March also queried if there should there be a requirement for an employer to give an employee a reason to decline a cash-up request. I think I kind of ticked that one off a little bit earlier, but just for any doubt, requiring a reason for declining a request may not have any effect on reducing differential treatment. This is because only the employee that made the request would see the reason. If an employee believes they are being discriminated against or being unjustifiably disadvantaged, there are legal pathways available to challenge that under either the Human Rights Act or the Employment Relations Authority.

Helen White—I must admit I did struggle to follow this contribution a little more, but I will attempt to give it a go, because I think one of the reasons why I struggled to follow it is because I’m a little bit worried that the contribution directly harms stereotypes of women, in particular that women are taking part-time jobs in order to take all of that time off to look after their kids during school holidays, because it just doesn’t work out in practice. There are, I think, 12 weeks of school holidays a year, and if you are taking it as, potentially, a woman working one day a week part-time and if you then tried to take all of that as annual leave, that gives you four weeks, and then you’d have to be taking nearly every other single day of work as a sick day off in order to cover the period of school. It just doesn’t make sense as an example. I’m struggling to follow that.

Teanau Tuiono can take a call, but I did say, when I first came in, that we need to be on point. I’m finding we are going into a lot of examples but we’re not getting specific questions.

21:10

I do think the point—as I understood the point that Helen White was making—around the differences in the section around relationship between annual leave and other entitlements was an important distinction. We have clauses 39, 40, and 41. Clause 39 is “Employer must allow employee taking annual leave to take bereavement leave”. Clause 40 is “Employer must allow employee taking annual leave to take family violence leave”, which is different to the beginning of the formulation of clause 38 where it says, “Employer may allow employee taking annual leave to take sick leave”. Those are differences. What I think I heard was that the Minister indicated that this had come through on the previous Act, but that wasn’t particularly clear in her answer. I would like to get the clarification on whether that is the case.

My additional question to that is: was there any analysis done on the recently passed health and safety Act—previously the health and safety bill—in terms of all the sick leave provisions? This is the first one that we’ve come across, and I know that we get into it a bit further in, because the regime has now changed. I think the person conducting a business or undertaking carve-out is 20 employees or less. They only have to focus on critical risks. Therefore, all the non-critical risks—the things that can get people sick—are not covered under the health and safety Act in the way that they previously used to be. I want to know whether the Minister has done, and the officials have done, any analysis of the impact of that Act on all of the sick-leave provisions—in particular this one here around clause 38 that the “Employer may allow employee taking annual leave to take sick leave”—because it points to the types of decisions that workers are going to have to make.

If we go back to a number of the examples that were brought up tonight where you have somebody who’s on three standard hours—or five standard hours, or whatever—but, effectively, working 20 hours a week and they only accrue 12 hours of annual leave over a year, which I don’t think is a good thing, and then they’re faced with the decision of “Well, actually, I’ve now got to cash out my annual leave because I’ve gotten sick, and I’ve only got these 12 hours.”, those are very difficult questions for workers. Was there any flow-on impact from this clause, any analysis done by officials, around the implementation of the health and safety Act, in particular the way that non-critical risks are now no longer covered in the way that I think they should be under that regime? If so, what does that information say? What does that analysis say? If that analysis was not done, why wasn’t it done? That was a major, major reform that came through this Chamber just a month ago and which will have an impact on the choices that workers have, which are linked to very specific provisions within this bill. I’d like to have an answer to that.

Just to back the truck up a little bit, once again, in clauses 39 and 40, there is an imperative in there that an employer “must” do something, but when it comes to the sickness clause, which is clause 38, where it says, “Employer may allow employee taking annual leave to take sick leave”, why is that distinction being made in these three clauses? Then my follow-up question is: on the impact of the health and safety Act—the reforms that were passed in the House just recently—was there any analysis done on the impact on this? If not, why not?

21:15

I’m happy to take that. Look, I think clause 38 is actually quite straightforward. If someone is on annual leave and they’re expected to be taking annual leave but then it turns out that they’ve actually become ill, they can request that, actually, they’d prefer to keep their annual leave days back so they can use them at another time, because had they been working at this particular point in time, they would have been on sick leave, not annual leave. This makes it harder for an employee, at the next juncture in time, to say, “Actually, I’d like annual leave.”, when they may have run out, because they were using annual leave when they were sick. It actually allows for a little bit of flexibility about “Hey, had I been working this week, I probably wouldn’t be on annual leave, because I’m not enjoying my holiday anyway; I’m sitting at home with the flu. Could I please just have that as my sick leave instead, because I will take my annual leave at a later juncture in time.”

You can already do it, but you just have to give it to them. Now you don’t.

I was just reading out parts of clause 38.

21:16

Thank you, Madam Chair. I want to speak to clauses 45 through 48 about annual closedowns. Those clauses make it clear that employers may have annual closedowns, they have to give notice of them, but they can, during those closedowns, require their staff to take unpaid leave or annual leave.

Now, that’s not a new principle in the law, but my question for the Minister is: what modelling and what advice has she seen on the impacts of the annual closedown provisions on employees who now will have much less annual leave available to them, much less leave accrued, not to mention the possibility of 25 percent being cashed out, or on new employees who under the new accrual rules will have less annual leave available to them? What are the implications of these clauses for workers, under the provisions of this bill, which allow them to be forced to take annual leave or unpaid leave during annual closedowns?

21:17

In relation to some of the queries I could hear fluttering around the Chamber, in terms of the difference between the words “must” versus “may” in relation to bereavement leave and family violence leave—which are phrased as “must” compared to “may” change annual leave to sick leave—the “may” reflects the existing Act and provides flexibility, for example, where the employee may have run out of sick leave.

21:18

I do just want to follow up on that particular point with the Minister, because she was implying that this was something new coming into the Act and that, if an employee who is on annual leave becomes sick, this was a new thing and all of a sudden they could transfer it to sick leave. That’s in the current Act, and it’s actually a “must”.

What it means—absolutely, the Minister’s just responded to say that, if an employee has used up all their sick leave, they can continue on annual leave. That is what the current law says, so this is nothing new. The new piece is that the employer doesn’t have to agree to it any more. What that means is that the employer can say, “No, no, you’re sick. You’re supposed to be in Fiji. No, no, you can be stuck at home sick on your annual leave. Good luck to you. Never mind that you’ve got plenty of sick leave available.” That’s the change. It’s moved from “must” allow that switch to “may” allow that switch. Why has the Minister done that, is our question? It’s actually unfair on employees.

I want to come now to clauses 45 and 46, and this is around annual closedowns, and the Hon Phil Twyford has already made some contributions on this. The concern I, again, want to raise here is in relation to the use of annual leave. Clause 45(a)(iii) has a requirement that “1 or more employees to take all or some of their annual leave;”. Essentially, an employer can say, “We’re going to have a closedown. Use all of your annual leave.” What does that mean for an employee who, throughout the year, may have things come up like a child’s graduation, the wedding of a sibling, or all sorts of things that would lead to somebody wanting to be able to take annual leave? This gives the opportunity for an employer to require an employee to use all of their annual leave during a closedown period. Now, that’s just unreasonable.

Furthermore, the employer, under clause 46, goes on and may have different annual closedowns for different employees. What has led to this? What particular requests from employers have led to this? I’ve worked in areas where I represented workers who had annual closedowns. Timber mills were a reasonably common one, and other food-processing places often did have a closedown, and, also, places like banks would often have a small closedown over public holidays, only around Christmas time. It is quite unusual to see multiple closedowns, and I’d be really interested in which specific industries, with their specific roles, the Minister has considered in terms of this. I understand that my colleague here, Helen White, who’s also had some experience working in these areas, has some questions around annual closedowns as well, and so I’d appreciate the Minister responding to that.

Just coming back to the Minister’s response on clause 38, this is not something new. There is a limitation being placed on employees’ rights in this area. The Holidays Act already allows workers to make a switch. They must be able to make a switch. The only time you wouldn’t make it is in the case where there isn’t sick leave available. It’s not some kind of new, special thing the Minister’s come up with, saying “Hey, have I got an idea for you!” The Minister is, basically, saying that an employer can say to a person that they must continue to use their annual leave even if they’re actually unwell, which is not the purpose of annual leave. I think that’s appalling, actually. Thanks.

21:21

I move, That debate on this question now close.

The question is that the Hon Jan Tinetti’s tabled amendments to clause 22(1) inserting “after hours” and deleting clause 22(2) be agreed to.

Members, the Hon Jan Tinetti’s tabled amendments deleting the word “standard” from clauses 23, 31, 32, 81, 82, 83, 94, 95, and 96 lend themselves to being grouped. I will put a single question on them, unless members indicate that they wish to vote differently on a specific amendment.

The question is that the Hon Jan Tinetti’s tabled amendments deleting the word “standard” from clauses 23, 31, 32, 81, 82, 83, 94, 95, and 96 be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment inserting subclause (2) into clause 23 be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendments deleting clause 24(1)(c) and (2) be agreed to.

The question is that Teanau Tuiono’s tabled amendments deleting clause 24(1)(c), (2), and (3) and clause 74(1)(b), (2), and (3) be agreed to.

The question is that Teanau Tuiono’s tabled amendment deleting clause 31(2) to be agreed to.

Members, the tabled amendments from Teanau Tuiono, Dr Lawrence Xu-Nan, and Ricardo Menéndez March deleting clauses 33 to 37 lend themselves to being grouped. I will put a single question on them, unless members indicate that they wish to vote—

21:29

Point of order, Madam Chairperson. I would just like to get clarification from the Chair as to why those have lent themselves towards being grouped.

Because they were similar in nature, and if one failed, the rest were deemed to have been not passed anyway, and so we said that we’d group them—unless the member felt that there was one that was specifically different.

Yeah, but speaking to the point of order, I just wanted to inquire as to what lent them to being grouped—what was the commonality between those three different amendments?

They formed a single alternative proposition, collectively. The member doesn’t have one specific that he’d like to single out—no?

My one.

We won’t make that a reason.

The question is that tabled amendments from Teanau Tuiono, Dr Lawrence Xu-Nan, and Ricardo Menéndez March deleting clauses 33 to 37 be agreed to.

The question is that Teanau Tuiono’s tabled amendment to clause 38(2) replacing “may” with “must” be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment deleting clause 43(2) be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment to clause 51(1) replacing “12” and inserting paragraph (m) be agreed to.

The question is that Teanau Tuiono’s tabled amendment inserting clause 51(1)(d) and new clause 60A relating to Easter Sunday be agreed to.

The question is that Teanau Tuiono’s tabled amendment deleting clause 55 be agreed to.

The question is that Teanau Tuiono’s tabled amendment replacing clause 63(2) be agreed to.

Members, the tabled amendments from Teanau Tuiono, Dr Lawrence Xu-Nan, and Ricardo Menéndez March deleting clauses 67 to 71 lend themselves to being grouped. I will put a single question on them—

21:37

Point of order, Madam Chairperson. Thank you. If it’s common practice that you’ll outline the reasoning as to why they’ve been grouped into one—

Yes. It was exactly the same as—let me just get the right wording here. It’s because, together, they form a single alternative proposition.

Speaking to the point of order. This has been done previously in this voting session, but I understand that you’re using Standing Order 315 to do this—

Yes, that’s correct.

—and it’s Standing Order 315(3) which allows the Chairperson, at their discretion, to put a single question on a group of amendments, but there are three preconditions to that. One is that they form the same subject matter and another is that they’re necessary to enable the committee’s effective consideration of the bill, but the most important one is that the amendments stand in the name of a single member.

Now, clearly these amendments do not stand in the name of a single member, and, therefore, each amendment needs to be taken separately. These are clearly not alternative grounds for taking—because if we simply had it that it’s necessary to enable the committee’s effective consideration of the bill as a stand-alone ground, then any number of amendments could be taken as a single question. With these three things, each of them has to be satisfied, and these amendments are not in the name of the same member and, therefore, they simply cannot be grouped.

I understand what the member is asking, but, actually, these three paragraphs (a), (b), and (c) are not combined or consecutive. They stand alone. One of them says that the amendments stand in the name of the same member, but the other ones, and the one that I’ve worked on with these ones, is that they form a single alternative proposition.

Well, that simply cannot be the case, because if you could group any number of amendments from a single member simply because they are from a single member—which is what your interpretation would have us do—that would make a nonsense of the Standing Orders.

No, but that wouldn’t be a grouping just because something was from a single member. It would have to have—if it’s related to a different clause or it doesn’t do the same thing.

Well, then, you are agreeing with me that we’d need one, two, and three.

No, I’m not actually agreeing with you. I’m saying that if these are combined and they form a single alternative proposition—i.e., they are doing the same thing—then they can be grouped. If a single member puts up propositions that didn’t make a—if they were making different propositions, then they wouldn’t be grouped as the same thing.

Well, with respect, that makes no sense, because if you can group—

Well, it makes sense to me, Mr Webb, and so we’re going to move on and we’re going to take the vote because I’ve given my reasoning why we’ve grouped them.

I seek leave to recall the Speaker.

Leave is sought for that purpose. Is there any objection to that course of action? There is objection. Thank you. The question is that the tabled—

Speaking to the point of order—sorry.

No, I’m taking the vote now.

The question is that the tabled amendments from Teanau Tuiono, Dr Lawrence Xu-Nan, and Ricardo Menéndez March deleting clauses 67 to 71 be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment deleting clause 72(2) be agreed to.

The question is that the Hon Jan Tinetti’s tabled amendment inserting subclause (2) into clause 73 be agreed to.

The question is that Teanau Tuiono’s tabled amendment replacing clause 89(2)(a) with new paragraphs (a) and (aa) be agreed to.

The question is that Teanau Tuiono’s tabled amendment to clause 121, definition of “leave hourly rate”, replacing paragraph (a)(iii)(B) to refer to “the hourly rates payable” be agreed to.

The question is that Ricardo Menéndez March’s tabled amendment to clause 121, definition of “leave hourly rate”, replacing paragraph (a)(iii)(B) to refer to “the highest hourly rates payable” be agreed to.

The question is that Teanau Tuiono’s tabled amendment to clause 122 replacing subclause (4) be agreed to.

21:48

Thank you, Madam Chair. I want to talk to clause 133, which is around the leave records content. The new architecture that we have in this bill requires detailed records of hour classifications, rosters, accrual, leave use, leave compensation payment, and other payments. Enforcement depends on employees being able to understand and challenge those records. This is where Labour has an issue, in that the theoretically auditable scheme is not necessarily accessible by the employee. The distinctions multiply the data an employee must verify. Workers with the least bargaining power, and that’s the workers that we’ve been talking about throughout the evening, are less able to contest classification. I know that this has, again, been canvassed really well throughout the departmental report, but when we look at all the different reports that have come around this bill, including the departmental disclosure statement, the regulatory impact statement, and the departmental report, we have some questions around this particular part of it.

Let’s start with the departmental disclosure statement. It says that the benefits depend on effective compliance and regular effort. My question with that is: what quantified advice did the Minister for Workplace Relations and Safety receive on the additional inspector fulltime-equivalent payroll expertise that would be needed for this, and what funding would be required around that? Because it doesn’t kind of go into that anywhere, and to understand this particular clause well, it would be useful to understand what we need additionally, with the inspectorate, what payroll expertise would be needed as part of that inspectorate, and the extra funding that would be required, if any.

21:51

Point of order. Thank you, Madam Chair. Earlier, my colleague the Hon Dr Duncan Webb sought to recall the Speaker in a bid to get a ruling on what, I think is fair to say, was a fair bit of confusion regarding a statement that the Speaker made to the House a couple of sitting weeks ago.

At the time, a point of order was raised, and a discussion was held, and at that point, it was made clear by the Speaker that this was not a new ruling, and that it was a clear guidance to the House as to how he intended existing Standing Orders to be interpreted. It is entirely appropriate, when there is confusion and clarity sought, for the Speaker to be recalled, and it is a long-standing convention in this House that when a Speaker be called, particularly for legitimate reasons, that that be allowed.

Now, the point of order has two elements to it: one, that motion should have been taken as a motion, not as leave, and it should have been voted on. And so, the Government parties, if they wish to break that convention, should be on record as voting against it; secondly, I’m very conscious that it is eight minutes to when the House is due to rise for the evening, so I do not intend to move that motion now, but I will do so tomorrow when the committee of the whole House stage continues in a bid to be able to finally get some clarity from the Speaker as to how these amendments are to be grouped so that we all know exactly what we’re dealing with and we can move forward.

I will take that request to the Speaker and inform him that that’s what you’re intending to do in the morning in the intention of getting some clarity from him.

21:53

Thank you, Madam Chair. The theory behind clauses 133 onwards is that this fearsome list of records that employers are required to keep is, at least notionally, able to be understood, audited, information-gathered, and then used by employees to contest a classification or a decision.

I’d like to know, given that the Law Society in their submission identified significant complexity in these provisions, whether or not there was any user testing done to test the idea that employees could actually use the data that employers are required to keep in their records under these provisions. If there wasn’t any user testing done to see whether it is actually feasible and practical that someone could use this information to challenge a decision, why should we accept that the new record obligations, as complex as they are, won’t lead to another kind of chapter of systemic problems that the Holidays Act suffered from?

This debate is interrupted and the time has come to suspend the House, which will resume at 9 a.m. tomorrow morning. Thank you.

Debate interrupted.