Parliamentary debates: Tuesday, 28 April 2026

to the Minister for Economic Growth

What recent announcement has the Government made on economic growth?

The Government has recently announced the signing of a historic free-trade agreement (FTA) with India. This once-in-a-generation deal will support more jobs, higher incomes, and stronger export growth by eliminating or reducing tariffs on 95 percent of New Zealand exports, with almost 57 percent duty-free from day one, rising to 82 percent when fully implemented. I note that the member is from the Bay of Plenty, where growers will be particularly interested that the agreement provides duty-free access for kiwifruit within a quota almost four times our recent average exports, with tariffs outside that quota halved. It also delivers a 50 percent tariff cut for a large quota of apples—listen up, my friends from the Bay—nearly double recent average exports, and improved access over time for avocados, persimmons, blueberries, and cherries. This is good news for horticulture, good news for regional New Zealand, and good news for economic growth.

What opportunities does this agreement create for businesses and exporters across the Marlborough region?

Now, this will surprise.

This agreement creates significant opportunities for producers in Marlborough’s world-leading wine sector. Tariffs on New Zealand wine will reduce from 150 percent currently to either 25 percent or 50 percent over 10 years, depending on the value of the wine, alongside a most-favoured nation commitment. That is a major step forward in improving our competitiveness in a fast-growing market. Since Australia’s free-trade agreement with India, Australia has had a significant tariff advantage over New Zealand wine exporters. This agreement, which the Government has ensured, will put New Zealand producers back on a competitive footing, allowing Marlborough wineries to compete on quality and reputation, rather than being held back by tariff barriers.

What does this agreement mean for businesses and exporters across the mighty Rangitīkei and rural New Zealand?

This agreement is very good news for rural New Zealand indeed. It delivers immediate tariff elimination on sheep meat and wool exports into India, removing barriers that have made it harder for New Zealand producers to compete, and putting our exporters on a more level playing field with competitors. Before the Australia - India FTA, New Zealand had 80 percent of the market share in India for sheep meat. Since then, our share has fallen while Australia’s has grown. This agreement the Government has signed eliminates tariffs and helps New Zealand’s world-class lamb win back market share. For farmers and processors in Rangitīkei, and across rural New Zealand, that is practical support for growth, jobs, and higher incomes.

With respect to the US$20 billion to go from our economy to the Indian economy over 15 years, what does she make of Prime Minister Modi’s comments, “The investment commitment of $20 billion by New Zealand will further strengthen our cooperation in agriculture, manufacturing, innovation and technology”, or the Indian Government Press Information Bureau’s comment, “A Rebalancing Clause is incorporated into the Agreement to provide a framework for addressing any shortfall in investment delivery, thereby ensuring robust and tangible economic outcomes.”—does she agree with those comments by those sources?

The agreement speaks to an aspiration for the levels of investment that will occur into India. Both countries understand this is a landmark trade agreement that expands opportunity. Different Governments naturally communicate to different domestic audiences, but the agreement text is what matters. The substance is clear: better access for New Zealand exporters. In terms of aspiration, I’d point out the aspirations of those who signed the free-trade agreement with China, and I’d point out that the detractors were proven wrong.

As a politician of many, many years’ experience, is she aware that, usually, when there is a deal, both sides talk up the benefits for their domestic audiences, or does she not find that surprising at all?

Well, the member makes a good point. It has also been my experience that, even in things such as coalition agreements, both sides talk up their respective contribution. So has it been, and so may it well continue.

Is the finance Minister telling the country that what Modi is saying, what Goyal is saying, what the Indian press are saying, and what the Indian officials are saying, in terms of their checking the investment pathway into the future, is not on a contractual basis; it’s purely aspirational?

What I’m simply saying is that the Indian side are using a different turn of phrase to describe that aspiration—just as that member’s colleague uses a different turn of phrase of refer to Indian New Zealanders than I would ever use.

Supplementary, Maureen Pugh.

Free speech, free speech.

Just a moment. I call Maureen Pugh.

Thank you, Mr Speaker. What will this agreement mean for businesses, exporters, and workers in the West Coast - Tasman electorate?

This agreement will mean new opportunities for some of the key industries that underpin the West Coast - Tasman economy. The agreement delivers immediate tariff elimination from day one on coal exports into India, improving competitiveness for West Coast producers. It also provides duty-free access on most iron, steel, and scrap aluminium over 10 years or less. For a region like the member’s, built on hard work, resources, and manufacturing capability, that means stronger export opportunities, more confidence to invest, and support for local jobs. It is another practical step toward doubling the value of New Zealand’s exports and growing the economy so that Kiwis can get ahead.

14:10 · 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.

Is he comfortable with the fact that New Zealand workers are 60 percent more likely to die from work-related injuries than Australian workers?

Of course not, and that’s why we’re fixing it to make sure that employers focus on the risk to be managed rather than just box-ticking.

How can he be confident in his health and safety reforms given officials found they will not save any of the, on average, 18 lives lost each week in this country from work?

Because when we go to talk to employers, a lot of them say they go through box-ticking exercises rather than actively managing the real risks.

Can he name one intervention in his Government’s health and safety reforms that will reduce harm or save lives?

Well, again, the focus is on managing critical risks that actually cause serious harm and damage to workers.

Why does he think healthcare professionals and law experts have described his reforms as “a regression in worker health protection” and “a step backwards”?

Well, you’d have to ask them but, again, as I said, we’re about managing critical risk rather than box-ticking.

What does he say to Sonya Rockhouse, who lost her son Ben in the Pike River mine explosion, and who said of his safety at work reforms: “That’s absolutely an insult to the memories of our guys—and not just our guys but the rest of the people killed in the workplace every year.”?

Well, I empathise with all families who lost loved ones in that disaster. Again, as I understand it, there has been no change to our mining regulations.

14:12 · to the Prime Minister

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

Yes.

Does he stand by his statement: “We are starting our 100-day plan with a laser focus on bringing down the cost of living.”; if so, is the cost of living crisis better or worse after 883 days of his leadership?

Well, I’d actually say that inflation is down from the highs of 7.3 percent to 3.1 percent; food inflation’s come down from 12.5 percent to 3.4 percent; interest rates are saving New Zealanders about $8,000, on average, per year, they’re down nine times versus going up 13 times under his Government; and we have stable rents in this country after rents went up $180 per week under your Government.

Is it cheaper or more expensive for the average family to go to the supermarket now than when he became Prime Minister?

Well, again, there are lower levels of inflation and we have inflation within a band, but I do find it a bit curious: we’ve got the Leader of the Opposition arguing for something called deflation. That is essentially the argument that he’s been running over recent weeks and, I can tell you, that is very, very bad for an economy because, actually, that means lower incomes and lower wages for everybody, and that’s not what we’re about. We want stable increases in inflation within the band of 1 to 3 percent, and that’s what we’re delivering.

Why did his Government promise to lower the cost of living and lower grocery prices?

Well, because we have actually taken inflation down from a 32-year high, which that member ran up to 7.3 percent, back within the band. We want to see small, moderate increases in inflation but within a 1 to 3 percent band.

Why has his Government chosen not to provide any additional support during the fuel crisis to nine out of 10 New Zealand households?

Well, we have provided $50 per week to working families, benefitting 143,000 households. We have provided support to health and community support workers; we’ve provided support to relief teachers in rural and isolated school scenarios. As we have said, we have learnt from the mistakes from COVID. Actually, just spraying a cash bazooka around, driving up huge amounts of inflation, interest rates, and putting the economy into a recession is unacceptable, but equally, we have timely, targeted, temporary support for New Zealanders in need.

Why did the Government chose to exclude parents who work part-time from the additional cost of living support he just mentioned?

Well, again, this Government is choosing to have timely, targeted, temporary support for vulnerable New Zealanders, particularly working New Zealanders. That’s why we delivered it through the in-work tax credit. That’s why we’ve delivered support to health and community support workers and also to relief teachers.

Why are parents who go to work every day part-time not eligible for the timely, targeted support that his Government claims it’s providing?

Because our focus has been on working families, and that’s what we’ve delivered through in-work family tax credits. We’ll continue to look at how we can support other New Zealanders, but it has to be through the lens of temporary, targeted, and timely.

Why does his Government adopt a definition of “working families” being only those who are working full-time and not those who are working part-time?

Again, we have focused on families where they are working full-time in order to be able to get their kids to school, to be able to go to work, and, actually, by delivering them $50 in support each and every week.

14:15 · to the Minister of Education

What recent announcement has she made regarding accelerating maths achievement?

14:16

Last week, I announced the findings from the conclusion of the year 7 and 8 maths acceleration trial. The trial was designed to accelerate maths achievement for children who are more than a year behind the curriculum. The final analysis confirmed our approach is working to bridge the gap for students who need it the most. Participants in round two also made up two years’ worth of progress across four key foundational areas in 12 weeks. The data showed that when students were tested three months later, their progress had largely been retained. When achievement is put at the heart of our education system, this is what it looks like to deliver results.

How did the maths acceleration trial boost achievement?

Through the trial, students received maths tutoring four times a week for 12 weeks, focused on core foundational areas of the maths curriculum like basic fractions, percentages, and word problems. Students achieved similar results regardless of their background, their gender, or their ethnicity. These results were achieved through quality teaching, quality resourcing, a structured approach, and a Government committed to the belief that every child should have the ability to succeed. We are providing the support and resources to do just that.

How does this announcement connect to her wider math programme?

Following the success of the trial, we are now rolling out the maths acceleration programme to 14,000 students to set them up for success at high school. As these students progress into year 9 and 10, they’ll also benefit from the new digital teacher guides and student workbooks we’ve rolled out this year to continue to support their achievement in maths. This is all on top of the new structured curriculum, maths books for all year 0 to 8 students, and the 143 fulltime-equivalent maths intervention teachers providing small group support to accelerate learning at primary. Parents, we are committed to providing schools with the funding and the resources required so that your children experience success in mathematics.

What does this mean for parents?

Parents can feel confident that we are delivering a cohesive approach to mathematics education: a clear, consistent, structured curriculum; an hour a day of maths; workbooks in the hands of every primary child; consistent nationwide assessment of progress, alongside clear reporting to parents; and effective, targeted acceleration supports for students who need it. We are committed to raising achievement and we’re not just talking about it—we’re doing it.

14:18 · to the Minister of Finance

Vinaka vakalevu, Mr Speaker. Does she stand by all her statements and actions?

In context, yes.

Is the Prime Minister correct that, under her Government, New Zealand’s economy is shrinking?

I’m not aware of the context or quote that the member is referring to.

Is Stats New Zealand wrong when it shows that real GDP per quarter is smaller now than when she took office?

In general, Stats NZ gets it right, and they also show that nominal GDP is larger.

Does she think that 52 percent of Kiwis that are now pessimistic about the state of our economy under her leadership are in the habit of “glass half-empty economics”?

No, not at all. I think they’re living in the real world where there’s a huge conflict in the Middle East and where we are experiencing the largest oil shock in history. New Zealanders are alive to the fact that those events have implications back at home, and it makes them feel somewhat pessimistic about the state of the world and realistic about the fact that New Zealand will be impacted by that. That member may be living in a delusion where she thinks that events in the Middle East don’t have an impact here, but New Zealanders are not.

Does she agree with the Prime Minister that only full-time working families are a working family?

Well, no, and that’s not what the Prime Minister said. The in-work tax credit is available to families where they are not dependent on a benefit. It is often the case that Working for Families recipients have one parent working and another parent working part-time. The point is that they are not dependent on the Government for benefit support.

When Chris Bishop, on her behalf, said that the economy should be doing better, is that a reflection of how she is performing as Minister of Finance?

No. Attempts to divide Chris Bishop and me will always fail.

14:20 · to the Minister for Building and Construction

What feedback, if any, has he received on granny flats?

The feedback on granny flats has been extremely positive. Where Kiwis used to look at their backyards and see red tape, high costs, and long delays, now they see endless possibilities, or at least up to 70 square metres’ worth. Just recently in New Plymouth, with my colleague and friend David MacLeod MP, a group of builders told us that, after decades in the industry, it is finally good to see rules becoming easier and not harder for a change, and there is more where that came from.

How much interest has there been in the granny flat changes?

There’s been significant interest in granny flats, which shows that the public supports the Government’s plans to make it easier, faster, and more affordable to build. Officials have told me that there have been some 94,000 views of the granny flat guidance web page and 52,000 downloads of the supporting resources. This indicates strong demand by homeowners, tradies, and, of course, businesses.

Is the Government making any changes to the granny flat rules?

Yes. In fact, today, the Government announced, through Mr Jones, Mr Bishop, and me, that we are making changes to the rules to make the regime even easier than we had first said that it would be to use. These include specifically allowing for off-site construction to begin before a project information memorandum, or PIM, is issued by the local council. This will be a game-changer for the off-site manufacturing of minor dwellings. In addition, we are making changes to allow for more products to be used to construct granny flats, such as structural insulated panels with a CodeMark certificate.

What are the benefits of granny flats?

Granny flats give Kiwi families more choice about how and where they want to live. They allow—

Keep granny out of the house.

—extended families to stay connected. They’re not just for grannies, you’ll be pleased to know, but also other old folk—Dr Duncan Webb—and for all ages, as a matter of fact, and they provide a practical housing option for workers in rural areas. By removing the need for a building and a resource consent, Kiwis will save up to $5,650 in direct costs and up to 14 weeks in paperwork.

To put it succinctly, which party is responsible for this brilliantly futuristic granny flats policy?

The Government as a whole is responsible, but I would be remiss if I didn’t acknowledge the point that the member has prompted me to make, which is to say that New Zealand First has been very vociferous in the advocacy of the policy. I’ve been pleased to work alongside the Hon Shane Jones as well as Chris Bishop and, of course, the Government as a whole, and, I might add, we have been supported across the House in this endeavour.

Yeah, no charge for the advertorial. Question No. 7, Chlöe Swarbrick.

Point of order, Mr Speaker. That comment, sir, was totally uncalled for. It just happens to be a fact, and this country has made itself famous for being one of the great property-owning democracies of the world. We’ve tried to do that again, and it’s not a puerile sentiment; it’s a sincere belief held by a political party in this Parliament—and you’re talking to it.

I think the member misunderstands me. I’m a great supporter of that particular policy, as the Minister will attest to.

14:24 · 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.

Is the Prime Minister concerned about our country’s exposure to imported inflation?

We are working very hard to minimise the impacts of the fuel crisis on both inflation and growth, and that’s why we’re taking a very balanced approach to make sure we don’t repeat the mistakes of COVID—causing high levels of inflation and interest rates—while also trying to support vulnerable New Zealanders.

What does the Prime Minister understand imported inflation to be?

Try and make this succinct.

I understand inflation, rest assured. To the member, I understand inflation.

Has the Prime Minister read reports from Moody’s and Fitch downgrading our country’s credit rating outlook for reasons including our exposure to imported inflation, and, if so, what exactly is his Government doing to reduce our exposure to imported inflation?

Well, look, I want to thank the member for raising the issue of the credit ratings because we have a negative outlook from both Moody’s and from Fitch. What’s quite obvious is that they are saying, very clearly, spend more, tax more, borrow more is not the way forward to manage our fiscal track. I’d just say to that member: if she took those warnings seriously, she’d backtrack from her policy of, actually, borrowing another $44 billion and increasing taxes by another $90 billion.

Has his Government increased or decreased our exposure to imported inflation as a result of his $1 billion decision to invest in a new liquefied natural gas import facility?

Well, I’d just say that the single biggest thing that that member needs to take accountability for is the oil and gas ban. That is what has created a huge dysfunction within our energy policy in this country. That’s what this Government’s fixing up.

Can the Prime Minister name just one action of his Government to reduce our country’s exposure to imported inflation?

I would just point to the work of fast track, which is now rapidly consenting renewable projects up and down this country, including, just in the last week, where a housing development with renewable energy was supported, including projects in the South Island that were cancelled or not progressed under the previous administration and that power up 100,000 homes with renewable energy. That’s a good thing.

Isn’t the worst kind of imported inflation the $100 billion of debt borrowed on the global credit markets and pumped into the New Zealand economy while the member asking the question was almost in Government, and is that why this Government is getting us back into surplus?

There’s no doubt about it. There has been damage done to New Zealand’s fiscal track through increasing debt by three times. It went from $60 billion to $180 billion under the previous administration—$66 billion worth of spending, half of which can’t be accounted for.

14:27 · to the Prime Minister

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

Yes.

Does the Prime Minister agree that the Treaty clause review will achieve the same effect as the Treaty principles bill, and, if so, will he be voting against any resulting legislation, just as he voted against the Treaty principles bill?

Point of order. Speakers’ rulings are very clear—I think it’s 195—Ministers are not responsible for responding to unsubstantiated allegations. That is clearly wrong.

Yes, but it was posed as a question, a question to the Prime Minister, who ranges over all topics. It’s something I’m sure he can answer quite succinctly.

Well, what we’re doing is we’re making sure that there isn’t any uncertainty and that everybody’s clear with their obligations under legislation. Open-ended, generic Treaty clauses cause confusion and don’t give clarity. We want them to be specific.

Can he name a single piece of legislation where Te Tiriti o Waitangi protections have been strengthened under this Government?

Well, again, I’d just say the problem that we’re trying to address with this legislation are generic Treaty principle clauses that variously say, “give effect to” and “take account of” the principles. What we want is consistency so that everybody has clarity about the obligations they have to each other.

Is his Government removing Treaty clauses from legislation so that they can avoid honouring Te Tiriti o Waitangi in practice?

No, and I reject the characterisation of that question.

Does he deny that this is a systemic roll-back of Te Tiriti o Waitangi?

No, this is about making sure that everyone understands their specific roles and obligations to each other by having specific clauses that are relevant to the legislation.

How much money is forecasted to be spent on the Treaty clause review in addition to the millions of dollars that have already been wasted on the failed Treaty principles bill?

I can tell you: a lot less than Te Pāti Māori’s taxation policy.

Why is his Government prioritising erasing Te Tiriti o Waitangi from our laws when Aotearoa is facing a climate crisis, a fuel crisis, and a cost of living crisis?

In answer to the first leg of the question, we’re not.

That question was out of order. It’s been answered. Is there another supplementary within the allocation? Not an extra.

OK. I’ve finished.

Good. Question No. 9—the Hon Kieran McAnulty.

14:32 · to the Associate Minister of Housing

Does he agree with the Hon Chris Bishop’s statement, “Homelessness is complex and there are no easy answers, but we’re determined to take meaningful actions”?

Āna. Yes, and particularly the full statement and comment that was made by my erudite colleague, Minister Bishop: “Homelessness is complex and there are no easy answers, but we’re determined to take meaningful actions—like our Priority One policy which has seen more than 2,100 children and their families moved from emergency housing motels into homes.” May I add that that number is now nearly 2,400 children out of emergency housing into social housing, in addition to an extra circa 1,000 children that have come out of emergency housing and contracted emergency housing since this Government took office.

How is fining rough sleepers $2,000, as enabled under the Government’s move-on powers, a meaningful action?

I’m not across the $2,000 matter, but what I am across are the walks that I go on with community housing providers and councils throughout the country, who have said that the actions that this Government has taken, particularly since the announcement of the Housing First 300 places, funded in September 2025, have made a considerable and material impact on the lives of many Kiwis and many New Zealanders and their whānau.

Is the Salvation Army’s Lieutenant Colonel Ian Hutson wrong when he said, “Move-on powers don’t solve homelessness. They just shift it somewhere else.”?

Matters to do with the move-on orders should be directed to the Minister responsible for that, but what I would say is this: the various community housing providers and transitional housing providers, including the Hamilton Christian Nightshelter, which the member of Parliament Ryan Hamilton and I have visited recently, have become far more aware of the intent of that proposed legislation and are absolutely supportive of this Government to continue to work closely with community housing providers and others to support Kiwis in need.

Point of order. At the start of that response, the Minister said that these questions should be directed elsewhere. I just wanted to clarify, given the exchange that we had at the start of the question and given that the Minister of Housing said that homelessness falls under the Associate Minister’s delegation, can I continue to ask questions of this nature to the Minister?

No, carry on.

No?

No. Which Minister are you talking about? You’re dealing with the Minister right now—

The one I’m talking to. The Associate Minister, sir.

Yeah?

Their response was that these questions—

Yeah, but I can’t determine his answers. It’s not my job to do that. His response was to your question about move-on orders; he was making the point that he’s not responsible for those; they’re with another Minister.

Is Community Housing Aotearoa CEO Paul Gilberd wrong when he said, “Move-on powers do nothing to address the causes of homelessness … [they] don’t work. They haven’t anywhere in the world.”?

I regularly catch up with Paul and others who are involved in the community housing space, and they have been absolutely enthusiastic and energised by the way this Government has actually attacked the challenges that come with rough sleeping and a wide range of homelessness, whether or not that is building more houses up and down the country, in places like Ohakune—I was there last Sunday, actually, supporting Ngāti Rangi to open more houses—or, indeed, supporting community housing providers, like the Salvation Army and like many of the entities that Community Housing Aotearoa actually represents, with community finance and the support that we’ve given them around their ability to lend funds to those that are building in this space. There are questions around how fast we can accelerate some of this building, but that’s why we’ve got the Going for Growth platform that Minister Bishop has been diligently leading over the many years, and, of course, the granny flats kaupapa alongside the papakāinga, which are going to see a range of housing typologies built around the country.

Is the CEO of the national Māori housing body Te Matapihi, Ali Hamlin-Paenga, wrong when she said, “Move-on powers create the illusion of action while leaving the underlying crisis untouched.”?

We’ve had three questions conflating the issue of the move-on orders with homelessness and with rough sleeping. What I can assure this House is that to see the amount of people, whānau, who have left emergency housing—that moral, fiscal, social, and cultural disaster that was fomented between 2017 and 2023—we have taken responsibility, and we’re not going to stand by and continue to spend $1.1 million a day on emergency housing.

Is there any suggestion from anybody other than critics that the proposed move-on orders are the Government’s only solution to homelessness; and is he aware that the Government currently has many levers with which to help New Zealanders who are homeless, including one of the most generous welfare systems in the world?

Absolutely—I understand where the Minister’s question is going, and what I can say is this: at the very heart of Auckland Council is a guy called Adrian Wilson, who’s been working on homelessness and rough sleeping for the last 10 years, and he has assured me that the work that this Government has done over the last six months has done more for those that are sleeping on the street than over many, many years. I appreciate that endorsement from someone who works at the council of our largest city, who is working closely with those that walk down Queen Street to wake up people at 6 a.m. in the morning, and I invite members opposite to get up that early in the morning and join me on those walks.

How can he stand by the move-on powers when his own ministry said they don’t work, that they won’t do anything meaningful to improve homelessness, and explicitly advised him not to proceed with them?

There are a range of opinions that are proffered in relation to the steps that we have taken in order to address the root causes of homelessness. I had several opinions offered to me that our work around priority one and tightening the gateway for emergency housing would not work. However, as we have heard today from me, Auckland Council staffers have assured me that the work that we have done has been very successful, alongside community housing providers and people like Barbara Browne, who runs Kāhui Tū Kaha, who I’d invite members opposite to engage with. Finally, some people say and advise of things that would work. Well, guess what? The oil and gas ban didn’t work, and you thought it would.

Point of order, Mr Speaker. Speakers’ rulings make it very clear that Ministers are not to introduce new material into a clear line of questioning. That had nothing to do with the final comment of his question—absolutely nothing.

That is quite true.

If the 100,000 homes policy had been delivered on, how many homeless people would we have now?

There’d be a range of whānau who could have moved into those homes, but they weren’t built and they haven’t.

14:40 · to the Minister for Mental Health

What recent announcements has the Minister made about faster access to mental health support?

Our mental health plan is delivering results, faster access to support, more front-line workers, and a better crisis response. Recently, I opened two new crisis recovery cafes in Christchurch and Dunedin. This means more New Zealanders will have faster access to mental health support. I’ve heard loud and clear from people that emergency departments can be incredibly overwhelming and not the best environment. With these new services opening, there is a calm, non-clinical space where people can receive support from those with lived experience. Crisis recovery cafes connect people with community services, wraparound support, and can help refer people to long-term support. To deliver a better crisis response, we want to ensure there is someone to call, someone to respond, and somewhere to go.

Why is the Government expanding peer support workers in emergency departments?

Improving our crisis response is a key part of our mental health plan. That’s why we’re expanding peer support workers in emergency departments. These are people with lived experience of recovery who understand what it is like to be in crisis, and can sit alongside someone, help them feel heard, and support them through the process. I recently announced that Whangārei, Hutt Valley, and Hawke’s Bay are the latest hospitals to get peer support workers in their emergency department. They will join the roll-out of peer support specialists already working in eight emergency departments around the country since coming into office. No matter where you live, this Government is committed to ensuring that the right support is there.

What progress is being made to ensure young people get faster access to mental health support?

More good news for mental health: we’re reducing wait times and we’re growing the front-line workforce. Last month, I opened a new dedicated child mental health service in Counties Manukau. The service has been established to support young people, up to intermediate age, along with their families who are experiencing, or are at risk of developing, moderate to severe mental health challenges. The multidisciplinary team will provide wraparound support and include psychiatry, nursing, clinical psychology, and social workers to work with young people and their families. Behind every one of these new services are hundreds of Kiwis now getting the support they need.

What recognition has the Minister given to organisations that help deliver faster access to support into communities?

I was pleased to announce Speed Freaks as the winners of this year’s Mental Health and Addiction Service Volunteers of the Year. Speed Freaks have 130 volunteer coaches and peer volunteers who are committed to supporting people recovering from addiction or mental health distress, through running. With networks across Christchurch, Auckland, Taranaki, Whangārei, and the West Coast, they’ve created an effective and welcoming community for those seeking support. I want to thank every volunteer who contributes to our health system: your commitment has a lasting impact on individuals, families, and communities across New Zealand.

14:44 · to the Associate Minister of Education

What recent reports has he seen on school attendance?

I’ve seen the term 1 2026 attendance data that showed school attendance rates were higher over that period than any term 1 since 2022. A student is considered to be attending school regularly if they are at school for more than 90 percent of a term. In term 1 this year, 68.6 percent of students attended school regularly, up 2.7 percentage points than the previous year. It’s also worth noting that many students will be only just below the 90 percent attendance figure and there will always be cases of non-attendance that can’t be helped, through illness or other circumstances, which, for the most part, are communicated to school leadership accordingly. This Government is focused on fixing what matters, and few things matter more to the future of our country than the number of children that get to school each day.

How significant has this increase in school attendance been?

In term 1, 2022, only 46.5 percent of students were attending school regularly. That means, in the term just gone, 176,000 more students attended school regularly than in the same corresponding term 1 four years ago. I’m pleased to report that despite the cost of living pressures being delivered by conflict in the Middle East, term 2 has started promisingly. In the first week of this term, the national average for attendance was 90 percent. That is compared with 88.4 percent for the same week last year—that is, the first week of term 2, 2025. I think what that shows is that the Government taking attendance seriously has been followed by schools, parents, and students themselves taking it seriously, and it’s important that we continue to drive this change in order that we get continued gains in the number of students attending school regularly.

How does the Government intend to build on this positive momentum in school attendance?

While much of the work is being done by simply reinforcing expectations by the school community, by parents, and by students themselves, Budget 2025 provided $140 million of additional funding to improve school attendance over the next four years. This has allowed us to implement a school attendance management framework that will continue that momentum. Every school in New Zealand is now required to have an attendance management plan, which allows schools and front-line attendance services to better manage cases of absenteeism. There is new case management software that allows all schools, attendance service providers, and the Ministry of Education to communicate and monitor attendance data in real time, so that issues can be addressed and resolved more quickly, and we have completely retooled and recontracted the attendance service to get better value for that money.

How do schools deal with cases of absenteeism under the new regime?

Schools each have an attendance management plan, as I mentioned, and that provides an escalating framework for responding to a student who is not attending. For example, if a child is absent for five days, school leadership will communicate with parents or guardians to determine the reason for unexplained absence and set expectations for attending more regularly. After 10 days of absence, school leadership will meet with the parents, and at 15 days, the matter will be escalated further to an attendance service provider. If the absence escalates beyond this point, or for cases of non-enrolment, prosecution of parents becomes a possibility.

Has the threat of prosecution been effective at getting students re-enrolled at school?

Yes. For a long time, there was, really, a blind eye being turned to the possibility of prosecution, there having been none for six years. In the last year, 34 different students have been referred to the Ministry of Education for prosecution. Of those, 17 have decided they would rather go back to attending school. That has been quite effective as a deterrent. However, of the remaining 17, they are in various stages of the prosecutorial process. There was one where a case was to be heard just the other day, but, sadly, the parents in the case did not attend the court hearing, so that has had to be put back to another time. None the less, we do not give up, because we think that attendance is so important to the future of this country.

14:49 · to the Minister for Economic Growth

Does she stand by her statement, “There will be more job opportunities in this country”; if so, how do the numbers of people employed compare to when the Government took office?

Yes, and there will be, as the economy recovers after a protracted downturn. The December quarter of last year saw 15,000 more people in work, compared to the quarter before, so the trend has been going in the right direction. The total was slightly lower than in the December quarter of 2023, but Treasury forecasts are for employment to rise by 60,000 this year and 240,000 by the end of the forecast period. The next Treasury forecasts will be released alongside the Budget.

Is it the case that there are 32,000 fewer jobs compared to two years ago, when she promised that “There will be more job opportunities in this country”?

It is the case that there are more job opportunities in this country today than there would have been in the absence of sensible policies like fast-track legislation to support new developments, housing developments, quarries, and energy developments. There are more jobs in this country than would have been the case without the introduction of the Investment Boost policy, which has supported businesses to make investments in their growth. There are more jobs in this country than would have been the case without a number of the policies that this Government has put forward.

What increased opportunities are there for people in regional New Zealand, such as Hawke’s Bay, where there are 9,400 fewer jobs?

If you were to visit Hawke’s Bay and speak to those people who are working in the agricultural industry, they would tell you that being part of a country where the Government supports farmers and gets red tape out of the way, promotes their wool products, promotes their dairy products, and seeks out new markets for them rather than abusing them makes it a lot easier to create jobs and incomes.

What increased opportunities are there for people who work in manufacturing now that there are 10,000 fewer manufacturing jobs in the past two years?

It is the case that some manufacturers have been particularly challenged by the last Government’s decision to ban the exploration of oil and gas, which has meant an acute shortage in the amount of gas available and therefore spiking electricity prices, which has been a significant challenge for manufacturers. It is also the case that there has been opportunity created in the manufacturing sector as a direct result of the Investment Boost policy, which has reduced the tax paid by those firms who have invested in new machinery. I challenge the member to commit to the Investment Boost policy if she wants to stay on the right side of manufacturers.

What increased opportunities are there for graduates, when careers expert Craig McAlpine reports, “50 percent of employers are saying that they have either stopped or slowed graduate intakes”?

It is the case that, for new graduates, there are a range of opportunities depending on their qualification, skills, and background—but I fully acknowledge that when unemployment is higher, it is often young people who are particularly impacted, and this can be very challenging for them. As we look to the future, it is really important that we have a school system that delivers people the reading, writing, and maths skills, and the comparable international qualifications, that allow them to seek and obtain good jobs.

Why should New Zealanders trust her at all on jobs when her Government’s track record shows that job opportunities were going backwards way before the fuel crisis even began?

Because politics is about a choice, and the choice that that member’s party is offering is more tax, more borrowing, more red tape, fewer fast-tracked projects, less focus on improving the conditions for businesses, and more taxes swallowing those businesses. The choice that our party is offering has been one that has delivered lower inflation, lower interest rates, and fewer taxes. Those are the conditions needed for job and income creation.

That concludes oral questions. We’ll take a short 30-second break while those who have to leave the House do so quickly, quietly, and without conversations on the way.

14:54

I move, That the sitting of the House today be extended into tomorrow morning for the committee of the whole House stage of the Local Government (Auckland Council) (Transport Governance) Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, the Regulatory Systems (Transport) Amendment Bill, the Ngāti Hei Claims Settlement Bill, the Building and Construction Sector (Self-certification by Plumbers and Drainlayers) Amendment Bill; the second reading of the Local Government (System Improvements) Amendment Bill; and the committee of the whole House stage of the Offshore Renewable Energy Bill.

14:55

I present a legislative statement on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill.

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

14:56

I move, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 3 September 2026.

The bill, as tabled in the House in March, underscores this Government’s commitment to restoring law and order. It will see real and practical steps taken to enhance prison and public safety, and it creates a clearer and stronger legislative framework to manage prisoners who pose an extreme risk to prison and public safety, while balancing natural justice. In recent years, Corrections has been focused on ensuring that it minimises the risks posed by a small number of prisoners who pose an extreme threat to others. For example, their history of serious violence towards others, their connection to transnational organised crime, or the risk that their ideology poses to prison or public safety. At the same time, it is important for Corrections’ legislative powers to adequately provide the necessary management tools and protections to manage these prisons.

This bill creates a comprehensive legislative framework for the safe and lawful management of prisoners who pose an extreme risk to prison and/or public safety while in prison. Currently, these prisoners are held in the Prisoners of Extreme Risk Unit in Auckland Prison. They require a high level of custodial management to minimise risks they pose to staff and others in prison and/or to the public.

This bill enables the Corrections chief executive to make both interim and final determinations about whether a prisoner should be a designated-management prisoner. The final decision itself is informed by an expert advisory panel’s recommendation and the information they considered, and any other information the chief executive considers relevant. A designated-management prisoner will likely be subject to more restrictions than other prisoners. For example, they are likely to receive fewer hours of unlock and fewer contact visits. Corrections is also likely to monitor their communications more intensively for intelligence purposes to identify risks to the prison or public safety.

While the bill is focused on protecting the safety of the community and good order of prisons, it balances natural justice. To ensure natural justice, the prisoner must be notified, as soon as reasonably practicable, that an advisory panel is considering whether to recommend that they be designated-management prisoners. They then have the right to provide any written information to inform the panel’s deliberations. Once the prisoner has been designated, the chief executive must provide them with a written summary of the reasons why. The prisoner can request a judicial review of the decision, and the Corrections chief executive is also required to review the designation if new and relevant information comes to light, or if there has been a change in circumstances that may make the determination inappropriate or unnecessary.

The bill strikes a balanced approach that safeguards public and prison safety while managing the designated-management prisoners’ welfare. Designated-management prisoners will be in specific cells that give them more personal space, with each cell having its own self-contained yard. They’ll also be able to make at least two hours of phone calls each week, more than the minimum five-minute entitlement for the general prison population. These important provisions aim to mitigate the potential impact of other restrictive measures.

Designated-management prisoners—and in fact, all prisoners—will also be supported by the bill’s move to explicitly prohibit prolonged solitary confinement. The bill explicitly provides for prisoners to receive 10 hours of meaningful human contact over each 14-day period, while also requiring Corrections to aim for considerably more: 14 hours of meaningful human contact each week. For the avoidance of doubt, “meaningful human contact” is contact by the prisoner with one or more, or other, persons—for example, other prisoners, corrections staff, or visitors—that enables social interaction and stimulation. This is more than fleeting or incidental contact, and could be face-to-face contact or contact via a telephone call or audiovisual link.

The bill also takes action to minimise the risk of prisoner trust accounts being used for illicit activities. I understand that some prisoners use prisoner trust accounts for activities that can undermine prison or public safety. The bill enhances Corrections’ oversight of these transactions, which should minimise the risk of prisoner-to-prisoner intimidation and influence, financial coercion, and other illicit activities relating to prisoner trust accounts.

The bill also makes practical changes to facilitate more efficient Corrections operations in several areas. Prison managers will be able to more easily vary prisoners’ ability to associate with others, based on their risk. This greater flexibility will improve operational efficiency and allow managers to tailor association conditions to individual risk levels. It will also enable prisoners who no longer require the highest level of restriction to move from denied association to restricted association more readily. As a result, fewer prisoners should experience unnecessarily limited social contact, while those who do require strict controls will continue to have them. In some circumstances, prison managers will also be required to treat multiple subsequent segregation directions under the Act as a single continuous period, provided that prisoners move between the same direction within a five-day period. This will enhance oversight of prisoners’ circumstances over extended periods of segregation and supports the lawful and humane management of prisoners.

The bill also makes minor but important amendments to the disposal and destruction of prisoner property provisions. Currently, prisoners must be present whenever an item of their property is destroyed, which is very impractical. This bill changes that so that Corrections can destroy a prisoner’s property without them being present, provided that the prisoner has written notice that their property is going to be destroyed, with a specified period available for the prisoner to respond to that decision. This is a technical change to better reflect operational realities. The type of property that would be destroyed is already listed in the Act: alcohol, controlled drugs, as well as dangerous, objectionable, or perishable items.

A more substantive change is that the bill protects public safety by enabling the destruction of a prisoner’s property who was designated as a terrorist entity at the time of their death. The Prime Minister can designate someone as a terrorist entity under the Terrorism Suppression Act 2002 if they believe on reasonable grounds that the person has knowingly carried out a terrorist act. Currently, Corrections manages only one prisoner with this designation. There may be some situations where the property of a prisoner who has been designated as a terrorist entity may cause harm if it gets released into the community. As an example, the property may cause harm to victims even when the item is not in and of itself an inherently harmful item but is so just by the fact of who owned that item. For this reason, the bill allows Corrections to apply to the High Court for an order to destroy this property when the person has passed away, provided the court is satisfied that the property may cause harm if it is circulated in the community.

I want to conclude by thanking all those who contributed to the development of this bill. It is great to see this important work progress to this stage. I look forward to seeing us debating the bill in more detail during the committee of the whole House. I commend this bill to the House.

15:04

Thank you, Mr Speaker. This is a really difficult bill in many ways, because it is dealing with the conditions of some of the people who would probably deserve the least amount of sympathy from the public.

This bill originated, as I understand, from concerns that were raised by the Ombudsman in late, I think, 2024, and there was a very strongly worded report drafted by the then Ombudsman around the conditions of prisoners who form part of this unit—these prisoners of extreme risk, who, under this bill, will be “designated-management prisoners”. When the Ombudsman looked into this unit, the findings were quite difficult for the Ombudsman to reconcile with the international agreements that New Zealand has signed up to and, additionally, with the values that he reported to recognise in New Zealand as a nation. Some of the comments that were in that report was that the unit was found to be “oppressive”; he said he found human rights abuses; he said there were examples of the use of force; and there was cruel and inhumane and degrading treatment. Obviously, this was something taken seriously by the Government, and I think it is commendable that these types of quite stark findings were treated seriously by the Government.

Since then, I understand—and I did visit this unit in the last recess, because we were aware that this bill was coming up, alongside our corrections spokesperson Tracey McLellan—that a number of the recommendations or a number of the areas have been addressed by some of the staff already in that unit. I do note and want to acknowledge the staff that do work in that unit. They do an incredibly hard job working with some of the most dangerous inmates in New Zealand, and I want to acknowledge the staff for the role that they do play. A reflection that I would have is that this does put some additional responsibilities on to those staff. I do recognise the changes that they have made, but this will legislate additional changes and there will need to be resourcing for that. One of the questions that I’m interested to hear from the Minister at select committee is whether there is resourcing put aside for these changes, so I think that will be important.

One of the questions that remains slightly outstanding for us on this bill is the people who are put within this highly controlled unit. There’s obviously the situation of people designated as a terrorist, and I don’t think there would be much debate, in any forum, that that is the appropriate place for such people to be. Of course, I understand there are around about 16 people in this unit at the moment, and many of those people may be more of a risk from what they can organise, rather than to safety—and so I think that that’s something that I just want to put on notice, which the Labour Party will be looking into at select committee.

On the whole, though, this is a very detailed bill. There’s been a lot of work put into it. It’s been considered. I want to acknowledge that the people who are impacted by this bill have committed some horrendous crimes and there’s unlikely to be much public sympathy for them. But I do think it’s commendable as a country if, for those people who are under probably the most severe forms of public control, we do try and make sure that the areas in which they live their lives reflect our shared view of humanity. I think that that’s an important point to note, without expressing any empathy or sympathy at all to those who may be in that position.

There are some important issues to consider here. We will support this bill through to select committee. It does provide for increased human rights for these prisoners, and it does look to address some of the various serious issues that were noted in that Ombudsman report. It is a very tricky issue, and I just wanted to note, again, the incredible work that many people do in the prison system that’s very dangerous.

15:09

Kia ora, Mr Speaker. I rise on behalf of the Green Party to speak to this bill. We will be supporting this bill to select committee, and it’s really important for us to explain why that is. The main reason we are keen to explore this bill further is because this bill establishes additional minimum entitlements to what is currently in the Act, and extends that to a wider number of people in prison. For those who aren’t aware, minimum entitlements are things like access to daylight, exercise, human contact, bedding—basically, your human rights and your human needs that you need while in custody in order to survive. They really are the bare minimum to keep people alive. We support establishing those really clearly within legislation, because Corrections do not have a good track record when it comes to honouring and fulfilling minimum entitlements in general.

During the COVID-19 lockdowns, there was attention on Corrections’ inability to fulfil people’s minimum entitlements, and within a COVID context, there was maybe some flexibility afforded to them because of the circumstances and the context at the time. However, this behaviour has persisted beyond the COVID lockdowns, and we actually saw the chief executive of Corrections before the High Court at the end of last year as he was issued a mandamus order because he was not meeting his legal obligations under the Corrections Act to fulfil minimum entitlements at Auckland prison. There have been ongoing issues at Auckland prison in terms of people in that prison not being able to have their minimum entitlements met, and that has been taken to the highest level in terms of the chief executive being held accountable for not meeting those entitlements. We support any establishment of those entitlements, because without this bill there would be none, in terms of what it establishes. We support that.

Like the former speaker, Camilla Belich, I’ve been to the Prisoners of Extreme Risk Unit (PERU). I did it straight away when I became an MP with the corrections portfolio. Not only have I been to PERU; I’ve spoken to psychiatrists who work in the unit. This is a unit that was established in extraordinary circumstances in order to hold, if not the worst person, one of the worst people in the history of this country in custody. That is the establishment of that unit. We understand why such a unit has to exist, and we absolutely support parts of this bill that attempt to deter or prevent any further spreading of those kinds of hateful, extremist, terrorist views that are not from here and do not belong here.

I also want to point out that following the March 15th mosque attacks, there were a number of recommendations that were made by that commission around how New Zealand can combat radicalisation and terrorism, and those have not been fully enacted to this day. So, yes, this is a good step in terms of people who are held in custody and any of the materials that they might distribute while they’re alive or after their death, but I just want to note that in dealing with terrorism, there are a whole range of recommendations that sit there to this day that have not been implemented by any Governments following March 15th.

I want to acknowledge the report that the Ombudsman published on PERU, and I acknowledge Peter Boshier himself, because he was really dedicated to corrections and what’s going on in our prisons and had a really good understanding and view of things. Without his report, we might not have known that there were people in PERU who were spending 900 days in prolonged solitary confinement and that this goes against so many international conventions when it comes to custody and torture experienced while people are in custody. I know that there has been a monitoring visit to New Zealand, an inspecting visit, that has looked at our prisons, our youth justice residences, jails, police cells—everywhere where custody happens—and that they are yet to report back on the findings of their visit, but I look forward to reading them.

In summary, we’re supporting this to select committee. We will be exploring what it means and how we can strengthen the bill for the safety of people in Aotearoa and to crack down on terrorism and radicalisation.

15:14

Thank you, Mr Speaker. I rise to speak on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill. As the Minister of Corrections outlined, this bill does make some important changes around establishing a regime for the management of designated-management of prisoners; we’ve got the expansion of the grounds for segregation; the minimum humane treatment standards, which other colleagues across the House have referred to; some new powers relating to prisoners’ property; changes to prisoners’ trust accounts; and then some other technical and operational improvements.

Obviously, the Minister’s indicated this will be coming to the Justice Committee, which I’m a member of, so I look forward to working with my other colleagues on this bill, with the other bills we are looking at.

Look, simply, this bill is about making sure our corrections system can deal with the reality we are facing today with some of these high-risk prisoners and the risk that they pose, both to staff and the community. Kiwis expect that when someone is behind bars, they’re not operating organisations outside the prison walls. Some of the changes this legislation makes will help close that gap. There are prisoners that pose a real risk, and we want to make sure that they are dealt with in a way that gives Corrections the powers to be able to deal with them but also does maintain some human dignity and treatment for them. I think this bill will strike the right balance.

From ACT’s perspective, this is really about focusing on making sure we have a justice and corrections system that actually focuses on what matters, and that is, obviously, protecting the public, supporting the front-line staff, and making sure that all the rules regarding those who are incarcerated are clear but workable—clear but workable. That’s really, really important.

I look forward to discussions around this bill and making sure our corrections system is up to standard. I’m sure there’ll be many submissions from people. I commend this bill to the House.

The Hon Tracey Costello.

15:17

Casey Costello, sir. Thank you, Mr Speaker.

Oh, sorry.

I rise on behalf of New Zealand First to speak on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill. I’d first like to open my address by acknowledging the amazing work, in very difficult circumstances, that our corrections officers do on a daily basis. It is a challenging environment and often thankless, and I would really like to applaud and commend them for their dedication to this role.

I’d also like to acknowledge my colleague Camilla Belich’s balanced approach in this legislation. It is, as she says, very difficult to balance the conversation around this very dangerous cohort of prisoners who it is very difficult to have sympathy for, but we should be reflecting on our message as a society in ensuring that we do provide fundamental human rights and respect and dignity to those in those circumstances. I think that considered response was very useful in this discussion.

It is a difficult piece of legislation to work through, but at its core, New Zealand First supports this bill because it is firmly rooted in our foundational belief that we need to protect community and country. The reality is that the prisoners that fall under this designation are a risk to our communities and to our country. The reality is that they do pose a threat even when incarcerated, and, therefore, the risk is not only to the prison staff and the prison itself and other prisoners but also to our community as a whole. The reality is that in the serious organised-crime space, we have had repeated occurrences of these prisoners continuing to operate criminal activity from this space. Then they have the ability to recruit to abhorrent ideologies, and this is something we need to protect our country and our communities from.

This is a balanced piece of legislation. It will be taken to the Justice Committee, and I’m sure they will do a very robust job of ensuring that we have submissions made. This is about striking a balance to ensure that our corrections officers are protected and supported in the role they do and that the expectations and rights of these prisoners are clearly balanced with the ability to ensure we maintain safety for our communities and our country. Therefore, I commend the bill to the House.

15:20

Tēnā rā koe e te Pīka, otirā tēnā rā tātou e te Whare. E tū ana ahau ki te waha i ngā kōrero mā Te Pāti Māori i te ahiahipō nei, ki tēnei o ngā pire.

[Thank you, Mr Speaker; indeed, greetings to all of us in the House. I stand to give voice to statements on behalf of the Māori Party this evening regarding this particular bill.]

While this bill prohibits the use of prolonged solitary confinement by introducing minimum requirements for meaningful human contact, the bill also authorises greater use of the segregation and separation of prisoners, and new powers to manage prisoner trust accounts and to destroy property connected to and intended to prevent unlawful activity. Regarding Te Tiriti o Waitangi, the bill fails to recognise that the Crown must take positive steps to protect Māori, and it does not meet the Crown’s obligation of active protection.

The bill has been introduced within a broader policy landscape where obligations to Te Tiriti are being undermined, narrowed, and erased. The flow-on effect of this approach is that the bill does not address, nor does it provide a targeted assessment of, impacts on Māori, despite clear evidence and advocacy by justice experts since the He Whaipaanga Hou report in 1988.

The bill makes additional amendments to the Corrections Act 2004, which was recently amended in 2025 to remove explicit references to Te Tiriti. Predictably, Te Tiriti has not been revisited by the amendments proposed under this bill. Māori make up a disproportionate amount of prisoners in the current prison system. Therefore, the use of the new powers proposed under this bill is likely to have a disproportionate effect on Māori within the prison system and their whānau on the outside, who may also be subject to what are otherwise internal decisions made by managers from within prisons.

It is unclear how this bill gives effect to Wai 3060, Te Rau o te Tika, the justice system kaupapa inquiry, which discussed, among other things, the treatment of Māori prisoners, prison conditions, remand practices, rehabilitation, and reintegration to date. No comprehensive Treaty-based redesign of the justice system has been committed to, and parallel legislation on sentencing prisoners and policing has passed without explicit provisions addressing that very Wai claim.

The total effect of this Government’s harmful policy track record on justice compounded with Government inaction on other social determinants of crime that lead to imprisonment means that whānau will continue to fall victim to increased rates in remand and prison expansion. Evidence and expert advice to date highlight the fact that risk-based justice policies disproportionately affect both Māori inside the prison system and their whānau and communities living on the outside. Tēnā rā koe e te Pīka.

15:23

I thought that the Minister of Corrections made a very levelled and very fair contribution in his opening remarks on the legislation. I really want to talk about the substantive amendment in the bill, which is going to establish a really clear statutory basis for the safe, lawful, and humane management of a really small group of prisoners who pose an extreme risk to the Department of Corrections, who manage our prisons, and they are prisoners whom the bill refers to as designated-management prisoners—the DMPs. It is a really pragmatic change that the Minister has outlined as to why we are bringing this about, and, therefore, I commend it to the House.

I rise to speak on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill in its first reading. Just like other members here in the House, I just want to acknowledge the work that our corrections officers do. It’s a tough job, and it’s important that we acknowledge their work.

Labour will support this bill to select committee so that it can receive the detailed scrutiny that it deserves. This is a significant piece of legislation. It expands the powers of the Department of Corrections, it creates new management categories, and it alters the balance between operational control and prisoners’ rights. That means that we must examine it carefully. We approach this bill with three clear tests in mind: is it workable, is it properly resourced, and are the safeguards strong enough? Those questions matter because laws passed in this House must work not only in theory but in the reality of understaffed prisons, stretched front-line workers, and a system that is already under pressure.

The first major change in this bill is the creation of a formal category of designated-management prisoners. This would apply to prisoners assessed as presenting extreme or high risks. It will allow for more restrictive conditions around movement, communications, association, and property.

This bill sets out a formal designation process to be led by the chief executive of the Department of Corrections, informed by an advisory panel. It also requires that prisoners be notified when they are being considered for designation and it allows them or their representatives to provide written information. It gives them the right to receive written reasons for a final decision, and to also seek a review. A final designation may last for up to two years.

Labour acknowledges that if the State is going to impose highly restrictive regimes, then a clear legal framework is preferable to ad hoc arrangements. Transparency, reasons for decisions, and review rights are absolutely important principles, but we also recognise that this is a significant expansion of the State’s power to manage individuals outside of the standard prison regimes, and we’ll be testing whether the thresholds are appropriate, whether decisions are evidence-based, and whether there is adequate independent oversight.

The second major area is segregation and restricted association. The bill rewrites and broadens the legal basis for segregation and it introduces new grounds for allowing prison managers to segregate a prisoner if they would otherwise commit an offence, recruit or radicalise others into harmful ideologies, or recruit others into organised criminal groups. Now, we understand the operational realities here. Staff must have lawful tools to manage genuine threats, but segregation is one of the most serious powers that are available inside a prison. It can have profound consequences for mental health and rehabilitation, and so Labour will be looking carefully at whether these powers are sufficiently targeted and whether they are applied consistently. We’re also keen to ensure that we do not disproportionately impact particular groups, including Māori, Pasifika, and prisoners with mental health needs, who are already overrepresented in the prison system.

This bill also includes what is known as the five-day rule: treating some repeated segregation directions as one continuous period where a prisoner is removed and returned within five days. That may improve reporting and monitoring, but it also highlights the importance of having proper oversight for extended restrictive management.

One of the most important aspects of this bill is the introduction of the minimum meaningful human contact requirements. This is the first legislative recognition of that concept, and Labour welcomes that principle. We know that prolonged isolation can cause real psychological harm. If rehabilitation is to mean anything, then prisons must maintain that basic human dignity. Having this bill set out a minimum of 10 hours of meaningful human contact over 14 days, with an aspirational target of 14 hours a week, is a good move. Overall, despite some scrutiny at the select committee, we commend this bill to the House.

15:28

The Minister of Corrections has covered this all very well, and I’m really pleased with where this bill has got to. Ultimately, we are in a changing environment, and we need to change the law to suit. I commend this bill to the House.

15:29

Thank you, Mr Speaker. As Dan Rosewarne noted in his excellent speech, we do support this bill. This bill has arisen largely out of an Ombudsman’s report into conditions at the most maximum security unit at Pāremoremo and his finding, essentially, that the conditions there were inhumane. One of the real challenges for that unit was that, essentially, it was governed by administrative order, rather than by any clear legal framework.

The fact that the corrections system could so significantly curtail prisoner rights, not because of something that this House had done but largely because the corrections executive thought that it was the best way to go about things, was concerning. Absolutely, the Christchurch terrorist is a dangerous person and needs to be kept in the most secure circumstances.

One of the things that this bill does—and I’m not sure it does it well, but that’s for the select committee—is to, essentially, set a threshold for when people are deemed to be prisoners that need this most serious designation. What that gets around is this facility being used, essentially, as a holding pen or an overflow pen when the prison muster is a bit high, or people being put there because they’ve been difficult or because they’ve got connections within this prison or that prison that are not helpful. It’s entirely appropriate that the threshold for designation is high, because the kind of conditions that people are put in are very challenging indeed.

That’s the other thing that this bill does, which I think is a good thing, and which the Corrections Act generally doesn’t do, which is talk about meaningful human contact. We have constraints on solitary confinement, but actually having interactions with people, meaningful interactions, is kind of a human necessity. I mean, we are a social animal—I think it was Aristotle who said that. The provision for 14 hours a week, I think it is, is modest, but it’s something. The idea that there will be those kinds of benefits extended to these prisoners—even though it’s actually quite hard to manage, and even though you might have to do it with corrections officers present to ensure that nothing goes awry—it’s a good thing. At the end of the day—actually, the minimum is 10 hours, and 14 is the aspiration, but, of course, we know that, in Corrections, when resources are strained, as they very much are at the current time, aspirations are rarely achieved. But, ultimately, this is about public safety.

The other important thing with this bill is that the designation can be reviewed. It’s not a case of putting them in this most significant security setting and that’s it for ever. If circumstances change, which means that that security designation is no longer appropriate, then it is possible for that to be reviewed and for the prisoner to be put back into maximum security or some other setting. What this, essentially, is is putting into the law a set of rules to more carefully prescribe what Corrections can do, rather than leaving it up to the administrative discretion of the corrections system and corrections officers and, ultimately, prison managers. That’s got to be a good thing.

Now, whether we’ve got it quite right, that’s absolutely a matter for the select committee. We do need to have a good look at that, because it’s important to make sure that the test for designation is an appropriate one. That’s what we’ll be doing at select committee. I look forward to it. But making sure we’ve got some rules around prisoner conditions in the most extreme settings is a good thing.

15:34

Thank you, Mr Speaker. I rise in support of the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill. This bill has had very wide support across the House, and I also add my support. I commend the bill to the House.

The question is, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be considered by the Justice Committee.

15:36

I move, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be reported to the House by 3 September 2026.

I declare the House in committee for consideration of the Local Government (Auckland Council) (Transport Governance) Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, the Regulatory Systems (Transport) Amendment Bill, the Ngāti Hei Claims Settlement Bill, and the Building and Construction Sector (Self-certification by Plumbers and Drainlayers) Amendment Bill.

15:39

Kia orana, Madam Chair. It’s great to be able to pick this particular bill back up. I think the Minister in the chair, the Hon James Meager, was the Minister who was answering questions the last time we had this in front of us. One of the questions that I think, to be fair to the Minister, he did seek to address last time was around the disability access to long-term planning documents. Just keen to get the Minister’s reflections since we last raised this issue about whether there’s any change in that particular space. The Minister may recall this is a particular item that was changed as a result of submissions to the select committee from members of the disability community about ensuring that they were able to engage with the long-term planning prospects for Auckland City. I’ll just park that there for the Minister.

I want to move on to the decision-making capacity that’s contained specifically in clauses 6 through to 11. A lot of what has been couched around this bill is the ability for the governing body and local boards to be able to either retain or, in some circumstances, actually gain—as a result of the changes that this bill will deliver—decision-making opportunities. Now, with decision making comes the framework for accountability, as well. There has been a little bit of ambiguity, perhaps, in the past, around where the responsibilities lie—who is responsible for making particular decisions? Now, when we look at the context of other transport decisions that are taken elsewhere around the country, there are regional land transport committees that, effectively, have representatives from across the region that make these decisions.

That’s good.

It’s a very good move. That’s a lot of the genesis behind this particular bill: being able to introduce something similar, moving that away from the Auckland Transport model, across to responsibilities where elected members, or appointed members through ministerial appointees—and we’ll get to that in due course—are empowered to make those particular decisions.

The first question in this area, for the Minister, is: whether he can explain to the committee how these particular clauses will seek to resolve what is, in some regards, longstanding ambiguity when it comes to the role of local boards in decision-making opportunities.

Now, we all know—and those who are from Tāmaki-makau-rau, more than anyone else in this House, will know—that the local government arrangements for Auckland are, effectively, bespoke. There are no other parts of the country where there is this set-up. There are community boards elsewhere, but there are no local boards anywhere else in the country. Many of those local boards do have significant responsibilities—financial and otherwise—more so than other councils around the motu.

The question for the Minister is: where is the comfort around that balance of local boards being involved in this decision-making opportunity but also striking the right balance in terms of, I guess, local autonomy, to be able to make those decisions as elected members, but also the accountability that they have? On the one hand, it’s fine to say, “Well, we’re going to give local boards this responsibility”—and some colleagues might have questions around where that responsibility actually lies and where the line is drawn, but there’s also an accountability aspect to that.

Minister, is it that those decisions taken by local boards—they’d be held accountable every three years, through the ballot box, or is it in association with the annual and 10-year plan opportunities that exist for Auckland Council and the associated boards, or are there other accountability mechanisms that exist that either the public, the community, or the elected members could avail themselves of to ensure that they’re able to, effectively, deliver on that accountability frame?

15:43

Thank you, Madam Chair. I think the accountability question one is straightforward. Along with what the member has outlined, decisions by officials and elected representatives are always subject to judicial review—so if there’s anything that the local boards, councils are doing which would fall foul of natural justice, for example, or the empowering provisions of statute under which they are enabled to make those decisions, those decisions are reviewable through judicial review.

15:44

Thank you, Madam Chair. This clause 4 is really a lot of the impact of this bill, because it changes the status of local boards under the Local Government (Auckland Council) Act 2009 and gives them much greater power. We need to really understand from the Minister what his policy programme is to make sure that Aucklanders have the right kind of say in local transport decisions if they’re being made at the local board level.

I’m going to step through what this change—which is new section 4B, inserted by clause 5—means for the old section 12, with the Minister, because, say, the old section 12(3), says, “A local board does not have separate legal standing from the Auckland Council” and that the function there is that it’s not a local authority in and of itself. I’m asking this because, for decisions by Auckland Transport’s transport committee, for example, which makes hundreds of decisions every time it meets, I’m told, on a Friday, those decisions impact region-wide, if those powers are to be divested to the local boards, as this intends, then that will have a pretty significant impact on how local boards operate. That is the natural reading of his new clause 5, which inserts new section 4B.

The natural reading of this, and most submitters would think, is that what’s being devolved to local boards here is a new power to determine transport decisions, like where heavy trucks can park. Those decisions, at the moment, are made by local authorities, though, and that’s not what the bill actually says, because these local boards are not becoming a local authority, so they’re not empowered to make by-laws in the way that Auckland Council is at the moment—and its council-controlled organisations are—however, they will be empowered to be able to make those kinds of transport decisions.

What I want to ask the Minister is about the outcome for citizens. If I am a resident in Manurewa, and I live across the road from Anderson Park—as the people I was door-knocking this weekend do—how do I now, under his new law, raise a complaint with Auckland Council that I want heavy vehicles not to be able to park there? Currently, they go to Auckland Council and they raise an issue, and it’s the transport committee at the Auckland Transport level that would make that decision. There are hundreds of decisions like this every week. If it is the local board that is empowered to do that, that makes more sense for the local residents—it makes more sense because they know those representatives and it is a representative who makes that decision. In what we are comparing it to in the old system, there is no elected member who sits on that current committee.

Is it the case, now, that local boards will be empowered with that kind of decision, and, if it is, are they playing the role of a local authority? Have we got the empowering legislation right so that they can make decisions as if they are the local authority? If that is the case, then it’s fair to ask the Minister: how are we going to provide further resourcing for local boards to do that? Nothing in the legislation allows for provisions for Auckland Council to make that immediate, and yet, immediately, under law, these changes will have effect. How can the person on the street, raising this query with their local board—because now their local board are empowered to do so, under legislation, to make those rules—know who the person to talk to is? Because, actually, there is not a lady in the office who you can go and speak to about this, because they’re not provided to do that kind of work, they don’t make these decisions currently, and they are not local authorities, and yet this is a role that they will be provided with.

This really gets to the nub of the problem about the Minister’s new clause 7. It allows for two things at once. It says that nothing in the provision will limit the ability of local boards to exercise that power, and yet they are limited from exercising that power because they’re not local authorities under the new law and they don’t have the resourcing to do it.

Which is it, Minister—is it the old section 12, which says “A local board is not a local authority”, or is it the case that nothing now precludes them from playing the role of the local authority in decisions like that? There are several other kinds of decisions that I’ll ask the Minister to take us through, but this is the first and most obvious one that is not provided for in the law and it’s not clear at what level the local boards will be accountable to the people for these kinds of decisions and how they will undertake those kinds of decisions.

15:48

Thank you, Madam Chair. I think, regardless of whether there is a lady or a man in the office, any constituent who has questions about local transport policy, local roading policies—any of that stuff—they’ve got a number of avenues they can go to. They can go to their local board member, in the case of Auckland; they can go to their councillor, they can go to their MP, they could even write to the Minister and seek legislative change. There are plenty of avenues for locals to go and have a say, and, of course, every three years, they get to have a say at the ballot box.

In terms of the crux of the question, local boards make decisions as though they are the local authority. They act as Auckland Council. That is outlined in clause 7, replacement section 12(4) “Nothing in this section limits—(a) the responsibility of a local board to make the decisions of the Auckland Council that are allocated to it in accordance with section 16:”. Section 16 of the Act is the “Decision-making responsibilities of local boards”, which sets out what local boards are responsible and democratically accountable for, including carrying out responsibilities that comply with sections 76 to 82, identifying and developing by-laws specifically for local board areas, under section 24, agreements reached with the governing bodies, identifying and communicating interests. It’s all there in the existing statute.

15:50

Thank you, Madam Chair. I thank the Associate Minister of Transport for his earlier response to my question about accountability, but I have to say that I am somewhat concerned at his answer, because my question was about where the accountability lies and if people who are in Auckland, who have an issue, not too dissimilar to what my colleague Miss Williams has touched on, but maybe something different in nature. I asked and offered up some suggestions around, perhaps, that the accountability lay at the ballot box, perhaps at it lay through other processes. But to hear from the Minister that judicial review is the option that’s available to people as a form of accountability, that is extremely concerning.

Let’s just step through what that would mean because someone—and let’s be frank about this: not many people in our community are familiar with judicial review because they don’t, themselves, go through it. It is a very timely—well, not necessarily sort of timely, but a very expensive process for people to go through. So I’m interested to hear from the Minister now—and this is not something that came in front of the Transport and Infrastructure Committee about the opportunity for judicial review. I am surprised because this is a Government in the environment space that is making a lot of changes when it comes to people’s ability, through the courts, to be able to access that avenue or not.

I’d be interested in the clarity from the Minister around what he was referring to when he talked about judicial review; people always have the opportunity for judicial review. I think most people who engage with either a local board or the governing body would not have to expect to rely on judicial review if they have an issue or they have something to do with accountability. So I’ll leave that with the Minister. Maybe I just didn’t quite get that as clearly as I should have, but given the Minister has raised it, I’m interested in his response around that.

I also note that one of the changes that the select committee made was around some of the terminology. When we’re looking at clauses 7 and 8, there is a lot of, kind of, change between the words “allocated” and “conferred”. What, basically, is the difference there between what is allocated and conferred? Would we expect that the transportation options and choices that would be available to either the local board members or the local board as an entity or the new regional land transport committee that’s going to be stood up—where does the conferment come? Where does the allocation come and where does that sit? Given that there have been some changes made in that particular space, it’s important to understand—for consistency—why one can’t be just the terminology used for all of those changes as opposed to separating them out as two separate ones?

15:53

Well, in the member’s first question, he outlined a whole range of opportunities for ratepayers to hold their decision makers accountable, where he’s included things like elections at the ballot box, the annual planning process, advocacy to their local councillors. I added on top of that. I agreed and I said they are all relevant places that you can go in order to hold your decision makers accountable. I added on top of that the underlying resort that one can take, which is judicial review, which is, I guess, the most legal, formal process of challenging a decision made by a decision-making body. That’s obviously one of the last steps you can do, apart from appealing to legislative change, as well.

In terms of the difference or the removal of the term “allocated to” and replacement with “conferred on”, my understanding is that’s just, essentially, a technical drafting change to make it very clear that the local boards must undertake their conferred responsibilities and they may exercise any of the conferred powers under sections 47A to 47D. I’m advised that it’s a drafting reason rather than any particular change in power.

15:54

Thank you, Madam Chair. I want to ask the Minister to confirm what he said. I think he has said that local boards act as if they are the local authority in setting of the rules such as truck parking. That would be a change in the position that it is currently. I’ll refer him to Land Transport (Road User) Rule 2004, which is the rule which most of these by-laws and other rules are made under, that confers ministerial power to set rules by regulation, and then local authorities are the bodies which are delegated to, within that, to make the rules.

The question I’m asking here is: is his new clause 7 confusing whether the local board is the local authority—and I think he’s confirmed what that is. So if they are the local—he’s shaking his head. He might need to confirm it because I think he’s saying that the local board is the local authority. So if the local board is the local authority then, firstly, what is the status of the Vehicle Use and Parking Bylaw 2025, which was set by Auckland Council? Does that continue until local boards set their own rules? Is it the case that the Manurewa Local Board could have a completely different rule for the parking of trucks to the Papakura Local Board? Would that be a sensible situation given that the Land Transport (Road User) Rule, which is the national rule, is quite permissive for local authorities to set a rule? And yet, you know, one would not imagine that within a metropolitan area for the same carriers, the same providers, a different rule would apply to one side of the street as for the other. That is why Auckland Council has been able to set these rules as a body for all local authorities. What does his new rule mean in that context? If we need one rule for Tangi as the truck driver to park in Papakura and Tangi—

Tangi Utikere.

—Tangi Utikere—as required to park in Manurewa, then who is the appropriate local authority to do that? I ask that not as a—it’s not frivolous. This is a live issue which Auckland Transport is considering at the moment because there are several business districts who are calling for more stringent rules around this, and they would like for local boards in certain areas to be able to set more stringent rules than the rest of the city. But you can see the values judgment that a Minister is being asked to make here around localisation for certain communities—say, in Manurewa, where the trucks are parked outside the local schools, and that wouldn’t fly in some central urban suburbs, where residents would vociferously complain. Yet that’s not what happens in some poorer communities, where people aren’t as availed of their rights and, as the Minister says, they’re not as likely get in touch with their local board members and their councillors.

Isn’t it fair, then, that we would set more stringent rules so that residents can be assured that their sight lines won’t be compromised to their children in the park, or that at night, trucks won’t park in areas that cause near misses and fatalities and crashes? That’s what this issue is about. I think the Minister has said that local boards will now set those rules. That is what some of those business associations are asking for. But it’s not necessarily a rule which is going to serve the needs of those commercial users and, indeed, manufacturers who have different sites around the city and are trying to get their vehicles from one place to another.

It’s not just about trucks. There are several of these rules which have a level of consistency across Auckland, and yet what is being done by new section 12(4) is a further devolution to local boards, where I think the Minister has said that they will be treated as if they are the local authority for the purpose of the secondary regional legislation, which is the rule that applies nationally. Things like: can you sell food that has been made from a home kitchen if you have a certification, that is set at a national level, that is a national rule? And then local authorities set the rules around those—things like: can you sell alcohol from a corner store in a domestic area—

As I understand it, this bill is related to transport.

That’s right, that’s right. But this is about local decision-making and how you would enact that. So the question for the Minister is: is what he has said about local authorities and local wards being synonymous because of his change, at his new clause 7(4)(b), the case for all of these rules, and how will they interact with the national rules?

15:59

Thank you, Madam Chair. Under the existing statute, local boards are able to make decisions as if they are the governing body where they are allocated those decisions and those powers. So the bill itself, as far as I can tell, doesn’t actually outline which decisions should or should not be made by local boards. They are decisions for the council to allocate to it, in accordance with section 16. All I can say on this matter is that if local boards are given decision-making powers, they do so as if they are the local authority. They act as the Auckland Council when making those decisions because they are part of the Auckland Council, and they have been given the power by the governing body to make those decisions. That’s what the law is currently and what new subparagraph (4) says is that nothing in this section or new section 12 as amended or clause 7 in the bill—nothing in the section limits that ability that already exists currently.

16:00

Thank you, Madam Chair. I am going to ask you some specific questions about the streets that are going to be around the Eden Park precinct. The Eden Park precinct belongs in Part 2, but my understanding is the streets that surround that will be in this part. They are part of the same things that Arena Williams is talking about because they are the streets that the local board will have determination over.

I had a meeting the other day with the residents in that area, and it’s actually the outer streets, outside of the traffic precinct, that have issues because there isn’t the same control. My understanding is the proposal here is that that control over the area that is controlled traffic—and I’ll ask some questions about what the Eden Park precinct contains in the later part—but beyond that, we have an area that’s going to have control of the local board.

I would like the Minister to confirm that those streets that are beyond it will be controlled by the local board, and what assurance people can be given that there will be communication between the group that is controlling the area of traffic management, which is smaller, with the local board, because if the local board is making those decisions, it’s going to have an impact in terms of what happens next.

For example, I’d like to know what discussions there will be and what freedom there is to make rules over parking in those areas. What I’m told by residents is you’ve got a spillover effect where people can’t park within the zone and so they park just out of it, and so we get all these issues just out of the zone where people park on the curbs and it makes it, really, a very different thing to live in those streets. I’m not sure what those arrangements are between the two groups, or does the local board simply have to react?

Then my last question on this is really about conflicts of interest. I love the idea of local boards having more control over roads. I think it’s a really sound one. But what I want to know is: what happens when you have people with a conflict of interest in terms of determining what happens to a local street? For example, the local board member themselves might live in that street. That might be an obvious one that’s dealt with, but it’s more about the issue of people having conflicts that are about the connections. Now, they’re naturally going to have connections in those areas. It’s the nature of what they’re doing; they’re local. But what kinds of protections are there around that?

Now, we’ve heard Tangi Utikere talk about the issue over judicial review. Obviously, that whole concept is based on something that’s a really high watermark in terms of appeal. So what is the story here in terms of the normal navigation of conflicts of interests, for example, if your grandfather lives in the street, if your auntie lives in the street, or your best friend lives on the street and you are making decisions about what happens in those situations? Thank you. I’d really like the answers.

16:03

Thank you, Madam Chair. If the member goes to new section 48, inserted by clause 14—well, it’s not technically new in some pieces. But anyway, section 48 is the section which says that the council must develop the Auckland roading classification framework. Within that framework will be the roads and areas that local boards will or will not be responsible for. The bill doesn’t set those decisions; that’s up to the council when they develop the roading classification framework.

Then, just on the questions of conflicts of interests, in the same clause 14, at new section 40A, there’s a conflicts of interest section, which states that “Schedule 3 [of the Act] applies to the ARTC.” When any conflicts do arise, both Schedule 3 applies but also the existing policies and procedures that the Auckland Council would have for managing conflicts generally would also apply. There’s nothing really, I think, in the bill which would address that apart from the obvious robust and thorough processes that the leadership of Auckland Council already undertake to manage the conflicts of interest where they arise.

16:04

Thank you, Madam Chair. As the Minister will know, some of these devolution powers to the local board—look, they are welcomed by all parties in Parliament and many stakeholders outside of it. The ability of local boards to exercise power in his new section 4B, inserted by clause 5—has he managed to capture the frustration of Aucklanders that infringement fees for land transport offences are set under the Land Transport (Offences and Penalties) Regulations 1999 and not at the council level or at the local board level? Is it possible for the conferment of powers under those rules to local boards to set locally relevant fees for parking infringements?

The problem here is huge, in that Aucklanders have fees—for instance, $100 for inconsiderate parking. There were 7,000 traffic incidents concerning heavy vehicle parking in the Wiri Business Association’s district alone, including two fatalities last year. That is serious, and yet the top infringement fee is $100. The call for much of this devolution was based on the lack of local accountability for things like fees. Has the Minister managed, through his new section 4B, to include infringement powers as something that Aucklanders can have a say on through their local boards?

16:06

I’ll seek some advice on that.

The Minister has just indicated he’s seeking some advice. I’m going to call Arena Williams, but I will also say at this time that Part 1 is quite small, so we want to home in on that from here on in.

Thank you, Madam Chair. I also want to refer the Minister to the purposes for local boards in the original legislation. Those are at clauses 152, 153, and 157. They specifically mention those things that the local authorities can set rules around. These also include things like the discharge of pollutants into the environment and things like when you are fixing a heavy truck on a local road or on a national highway. The rules are different, but for different areas, they are resulting in the flow-off of pollutants through fixing vehicles into, say, the Manukau Harbour, which is a significant issue for local residents and is a continuing source of frustration for Aucklanders.

Has the Minister given some thought to the way that local environmental protections for road users will be something that local boards can have a say on? Why is it the case that over the last 10 years of the Auckland super-city, when local areas have been raising these issues like run-off into local streams and local harbours, local boards will seemingly not be able to be devolved powers to set locally relevant rules and solutions to these hazards?

When you have the regular practice of some truck operators in Wiri fixing trucks on the side of the street and not only taking up the road space, which they can be fined for as a dangerous use of the road, but they are also emitting oil and other run-off straight into the drains—which is not caught; it flows straight into the Manukau Harbour—why is it that the local board can’t step in when residents are raising these issues? The Wiri Business Association has petitioned Auckland Transport about this. Auckland Transport says that they need a consistent rule around the city, but that is something that has been raised consistently over the last 10 years and hasn’t been able to be implemented because it doesn’t fit for the rest of the city.

Because this isn’t a huge problem for the residents in the rest of the city, is it the case that with local boards expecting to receive more power because of the result of this legislation, they will, in fact, be stymied once again? For people who are looking at this legislation and hailing it as a big step forward for Aucklanders and their democratic control over their elected members and their transport functions, will they once again see that, actually, things that matter to them like where people can park, like the infringements that can be levied against people who park inconsiderately and cause safety hazards, and to those people who would pour pollutants down the drain because of fixing their vehicles in the wrong kind of way—will all of that actually not be devolved to local boards?

We see this increase on expectations of local boards once again undermining people’s faith in their local democracy and seeing more and more of a stepping back from the need to vote in their local democratic elections and their need for local board members to be accountable to the community.

16:09

Thank you, Madam Chair. I’ve been helpfully advised that if we dig all the way through the bill to Schedule 2, and we look to what will be Schedule 4 in the Act, that lists the local board’s powers, functions, and responsibilities in relation to local roads and collector roads. Hopefully, that will answer most of the member’s questions about what local boards will have the power, function, or responsibility to do. It’s on page 46 and 47 of the bill, for reference. I’m advised that does not include fees. Fees are set by the governing body, not local boards, and they are subject to, obviously, the primary legislative constraints on that as well. As far as I can tell, unless there’s some clever interpretation of those powers in Schedule 4, it would not include discharge of pollutants into the environment. Of course, those are all valid arguments to make about how much you devolve power to local boards, particularly in Auckland. I’m sure that many Aucklanders would agree with some of it and disagree with some of it, but in this instance, we’re talking about particular transport responsibilities. With these changes, local boards will have some powers to make some decisions around transport-related issues.

Tangi Utikere—one more specific question on this part.

16:10

Yes. Thank you, Madam Chair, and I take your direction in terms of where we’re heading. I want to ask the Minister a very tight question, which is about clause 8. It is in relation to the responsibilities and the functions that are conferred to a local board, and they relate to new sections 47A to 47D, which we’ll get to in the next part. It seems to me that there are often funding implications and resourcing implications for any decision that a local board may take, so a very quick question to the Minister is: is he satisfied about the ability for the local boards to be able to be responsive to their communities in making these decisions? Does he have any concerns about the lack of resourcing or empowerment of the local boards to be able to actually go ahead and deliver that? If we’re looking at maintaining or preserving some form of regional coherence as a structure with the regional land transport committee in place but also enhancing local responsiveness, does he have any concern that decisions will be driven around transport to do with an inability for the local board to receive adequate resourcing from the governing body?

16:12

No, I don’t have any concerns. I haven’t had any concerns raised with me. With the excellent leadership of Auckland Council, I’m sure they’ll maintain a close eye on their rates and how they’re spent appropriately.

Thank you, Madam Chair. Look, this is really the meaty part of this bill, which outlines all the different steps that need to be taken in terms of appointments and all of those sorts of things—how much these members will get paid and who decides and who’s going to chair and all those sorts of things. The Transport and Infrastructure Committee spent a lot of time working through these particular issues, so I want to just move to the first question that I have, which is in relation to new section 38A. This is still within clause 14, because clause 14 talks about the fact that all of the items contained from section 38 onwards are, effectively, uncertain. This is the functions and the membership of the Auckland Regional Transport Committee, and this is where a lot of the work will be undertaken in terms of setting direction and guidance.

Now, new section 38A talks about the functions of that particular committee that is going to be stood up. We support the standing up of that committee; it will provide consistency across the country in terms of regional transport committees. The function of this committee, first and foremost, is to prepare what is a 30-year transport plan under section 42. It’s interesting that in the Auckland regional deal that’s been announced, they talk about the 30-year transport plan, which I don’t think many people were surprised about, because it’s already on the agenda and it is, effectively, business as usual. One of the responsibilities that is outlined here is not just preparing that transport plan over the 30-year horizon but also monitoring the delivery of it.

The question for the Associate Minister of Transport is: can he confirm to the committee that the regional transport committee is actually intended to take a long-term, stable view beyond electoral cycles? What concerns might the Minister have around chopping and changing potentially every three years if there is a change of Government or a change in membership at a local government level? What does he see as that long-term stability in terms of that 30-year transport plan, and how will our local decision makers be able to, in his mind, feed into the development of what is going to be a pretty significant and important plan? How is it that the standing-up of this committee will look to align the sense of Government investment through the 30-year plan? It is largely a joint initiative between local Aucklanders and central government by way of the Minister of Transport’s appointees to this committee. How does that improve the alignment of that investment and the priorities and also meet Auckland’s growth needs, which are obviously pretty important?

What we see in new section 38A(d) is actually just a move away from just saying, “Well, look, what this committee’s going to do is it’s going to undertake all the functions.”, but, actually, it narrows it down to transport responsibilities, duties, functions, or powers. Again, is this intended to be a catch-all opportunity to ensure that the regional transport committee can do what it needs to? Or is that going to compromise any particular aspects that the committee, over a 30-year horizon—albeit, the expectation is there would be iterative approaches to planning, and that’s obviously to meet the changing demographics and the changing needs that would arise in Auckland. Is he comfortable that those changes to be made by the committee are able to deliver on that? Also, does he have any concerns that the approach that’s been amended by the committee is actually just to focus on transport functions rather than strategic transport functions?

16:17

Thank you, Madam Chair. In regards to whether or not the Auckland Regional Transport Committee (ARTC) should have a long-term view beyond political cycles, I think there’s an agreement across the country that when it comes to infrastructure—critical transport infrastructure—we need to take a long-term view of these things. There is a lengthy number of new sections that will be in the Act and that outline specifically what this could look like, and I will draw the committee’s attention to, for example, Subpart 2. We’re still in clause 14, but we’re in new Subpart 2: new section 42 outlines that a 30-year transport plan must be prepared: 42A, the publication of it; 42B, the preparation; 42C outlines the content. The statute itself creates some guard rails for the content this plan needs to contain. It also outlines who must be consulted and who must agree on it. For example, in 42B(1)(a), “the ARTC must—seek direction from the Ministry of Transport and the mayor;”, so there is a balance between a long-term approach to this.

Also, we live in a democratic country, and those who are elected to make change or to move the country in a different direction should be entitled to do so within the statutory guard rails that we put in place. I think the regular free and fair elections that we have, and the fact that people can reflect the democratic will of the public in these long-term plans, is a good thing. It’s balanced against some of the stricter statutory guidelines in place. For example, there was a point in here, 42C(e), outlining the “detailed investment priorities for the first 10 years of the period covered by the plan:”. I think, on the one hand, we want to reflect the will of the Government or the council of the day—that being the voters, ratepayers, taxpayers of the day—and on the other hand, we want to have some certainty in forecasting over a long-term period about the kinds of critical infrastructure projects we believe in and we are going to invest in.

I think the committee meets a pretty good balance for them both, and I think the member asked and answered his own question in and around the amendment made to 38A(d), which is essentially to provide—my reading of the new subsection—a relatively wide catch-all in and around transport responsibilities, duties, functions, or powers that the Auckland may delegate to it, and leave the, I guess, wider strategy to the elected officials, the governing body itself.

16:19

Thank you, Madam Chair, and thank you to the Associate Minister of Transport for that contribution. It was good to hear you outline the importance of democratic decision-making in these 30-year plans in such a way as is being outlined in the entire purpose of this bill: providing local accountability to the way Auckland’s roads and roading designers and the feedback that people who are road users have on that, and bringing that to local decision-making. So we have, in here, a 30-year transport plan, which is quite core to what we’re doing here today, Minister, and it’s got direction. So the purpose of the plan is to align the Government and the council’s priorities and set a strategic direction. The plan must promote the following objectives, and there are three listed here: productivity and economic growth; the safe and rapid movement of people and goods; and efficient asset management.

There is a part in there that I have an Amendment Paper on, which I’d like to draw your attention to, which is that the 30-year transport plan in Auckland must seek direction from the Minister of Transport and the mayor. That seems fair enough, but there is, in the co-design of the plan, one more section, which is “establish and maintain processes for Māori”—parentheses nondescript in this particular piece of legislation—“to contribute to the development and preparation of the plan.” Minister, as the Transport and Infrastructure Committee noted, there are other interested groups who have a large amount of interest in the way the transport plan in Auckland works. The select committee had listed a couple here: businesses, the freight sector, and general road users. I’d add to that core nodes in New Zealand’s connection to the world for our economic and trade relationships, which is the Port of Auckland, so these are prime users of the roads. The transport network really, really matters, you would think, Minister.

If there was going to be a move beyond the democratic accountability that is being talked about here, away from just the Minister of Transport and the mayor to Māori, nondescript, in this particular bill, I would recommend, Minister, that you adopt my Amendment Paper, which would edit clause 14, new section 42B, so it was a bit simpler—it would only be one part; there wouldn’t be a paragraph (a) and a (b), and it would say, “(1) When preparing a 30-year transport plan for Auckland, the ARTC must seek direction from the Minister of Transport and the mayor.”, and that’s where it ends; right there. At the end of the day, the design needs to be democratic, and co-design is but a species of co-governance, Minister. I put it to you that this Amendment Paper would solve that problem. Thank you very much.

16:22

The ACT Party has one trick: they’ve found “Māori” in the legislation and they want to take it out. We will not be supporting that amendment, because that is a silly amendment. Not content with new section 42(3), inserted by clause 14, which, effectively, enshrines three political objectives that would usually be found in a Government policy statement (GPS) in the legislation, which is a very unusual move for the Government—and I will invite the Minister to explain why he is lifting up his three values-based judgments from the GPS, which are, frankly, the wrong values, but they are his values, and he has put them into primary legislation here, which will be difficult for a future Government to change.

I think, when you ask most Aucklanders, “What kind of transport system would you want?” They would say, “I want less congestion. I want to get home to my family.” or “I’m a tradie and I want to do my jobs faster.” They would say, “I want a grown-up city that has good transport from the airport to the rest of the city. I want to live in a place where there is rapid transit and it is quick and it is cheap.” That is not what the values here say. It says in new section 42(3)(a), inserted by clause 14, that the plan must promote “productivity and economic growth:”. Does our transport system provide for a productive and economic city? No, but the key problem here that we should be trying to address, both long-term and in the medium-term, is congestion. Does this bill have anything that reduces congestion in it? Absolutely not. It has prioritised three statements from some neoliberalism textbook that Cameron Luxton found at the back of his shelf. The third is, “(c) efficient asset management.” That is not speaking to the aspirations of Aucklanders about the kind of transport and roading systems that we need.

We need to build roads for our communities to get around, we need a bus system that works for people, and we need a train system that works for people. Those are not the hopes and dreams of Aucklanders that have been reflected here in the primary legislation. It’s one thing to have a GPS which sets out what the National Party thinks is significant, which is roads, but it is quite another thing to put it in this legislation. I would invite the Associate Minister of Transport to comment on that before he disavows the committee of any notion that he’ll be voting for the amendment that Cameron Luxton has put up, I hope.

I want to jump back—because we are going to move through this section in an orderly fashion—to the appointments of members by the Minister. I need some guidance from the Minister here, because what assurance can Aucklanders have that there will be a long-term view taken by these ministerial appointments of the kinds of skills that Aucklanders can expect around the table when the Government is saying different things about its transport priority?

Yesterday, with the fuel crisis as the rationale, the Government announced an intention to allow heavier vehicles on New Zealand’s roads. That includes letting freight trucks carry heavier loads and giving them more access on the roading network more of the time. This is ostensibly to boost fuel efficiency, but at the same time, the same Government is running a campaign run by the Energy Efficiency and Conservation Authority about fuel-saving advice for stretching a tank by up to 20 percent. They are telling New Zealanders and spending New Zealanders’ money on a campaign about more fuel efficiency and about lightening the load by removing roof racks. The irony will not be lost on most Aucklanders, when they see a Government that can’t work out what its own priorities for transport are, let alone the priorities in the medium or the long term.

How can Aucklanders be assured that this new section 38F, inserted by clause 14, does not allow the Minister of Transport to appoint ministerial representatives who are straight from the freight and trucking industries, as the ACT member asked for particular consultation rights for those industries? How can the Government say that it is going to have a long-term view of who is appointed around the table, when Aucklanders might have two or three members appointed by the Minister who will come from backgrounds and have professional expertise in trucking and freight, when that is not the aspiration of most Aucklanders for a fair and efficient transport system that reduces congestion over the long term and invests more in transport solutions which get people home to their kids faster?

16:27

Thank you, Madam Chair. I’ve had a look at the so-called values in new section 42(3)(a), (b), and (c), inserted by clause 14, which actually says, “A plan must promote the following objectives:”, and it doesn’t outline a values set in this section. Those objectives are, “(a) productivity and economic growth: (b) the safe and rapid movement of people and goods: (c) efficient asset management.” There’s nothing, I think, in those objectives that would preclude a focus or an emphasis on public transport; a focus or an emphasis on mass rapid transport; a focus and emphasis on safety; on road, rail, light rail—whether it be on paper or physically on the ground. I would just encourage all members to look at the actual text of the bill we are putting in place and not to go too far with imprinting their own values on to that text, and just read it in plain English, as has been passed by the Parliament of the day.

Now, when it comes to the appointment of individuals to the Auckland Regional Transport Committee (ARTC), the bill outlines the appointment process, the length of term, their duties, etc. But the key thing is that these individuals will be bound by their obligations under the Act. The Act says that part of their obligations is to prepare a 30-year transport plan for Auckland. Now, if the best people or best person or individual to be appointed to a committee at a particular time at a particular place is someone who has expertise in the roading, transport, logistics, trucking, freight sector, then nothing in the legislation should preclude that; in the same way that nothing in the legislation should preclude someone who might have expertise in multimodal transport or—

Te ao Māori.

—te ao Māori—or any other demographic, cultural input if that was relevant to promoting the following objectives on productivity and economic growth, the safe and rapid movement of people and goods, and effective and efficient asset management.

Now, I’ve got the utmost faith in those making these appointments—that they will appoint the right people to the positions, but we’re not going to be outlining in the statute a green list or a red list of which particular background or profession you should or should not have when entering this process. It’s hard enough, I think, as it is, to find highly skilled, capable people with the time to sit on public entities already, without limiting it to those groups of people who come from a particular favoured industry or background, so we won’t be doing that.

16:29

Thank you, Madam Chair. I’m a bit surprised to hear some of the questions coming from the Opposition, because those particular things that I’ve been hearing are things that could have been traversed, but were not traversed, at select committee. I am a bit concerned about those questions, but the question that I want to pursue is, as Cam Luxton has raised in his amendment, the issue of co-design and consultation with “Māori”—it’s not “iwi”; the word is “Māori”—and the practicality of that. As you see in the Transport and Infrastructure Committee report back, some of us were concerned about that. I am going to explain why, and I really would like the Minister’s response to that.

This is about a new activity. It’s about the 30-year transport plan. It’s a new thing, and in this new activity we are saying there needs to be, as Cam Luxton has said, consultation with the mayor, with the Minister, and with Māori. Now, given we are told that roughly one in five New Zealanders has some element of Māori whakapapa, that means that one in five - odd Aucklanders is likely to have some Māori whakapapa. That means you are looking at something in excess of 250,000, probably getting closer to 300,000, and this bill then says you need to consult in the design—the design—of the 30-year transport plan. This is not in the consultation about the 30-year transport plan—because that’s in there as well. We do the design first, then we do the engagement on that design, when we consult with the wider public, etc. In the design of that, you are required to identify who are Māori and to have a consultation with, roughly, one-fifth—20 percent—of your population. Now, I ask you whether that is practical, and whether that is a reasonable thing to do.

Bear in mind that this is a new responsibility. It’s not that we’re taking anything away; it’s a new responsibility which is being established. I would say, Madam Chair—Mr Chair now, because you’ve changed.

Ha, ha!

The Chair has changed while I’ve been speaking.

The Chair knows what you mean, Mr Foster.

There is an issue of practicality there, as I said.

I would also like to draw the Minister’s attention to some of the things we have in our coalition agreements, which are sometimes referred to. One of those, between the National Party and the New Zealand First Party, is that the coalition Government will defend the principle that New Zealanders are equal before the law, with the same rights and obligations, and with the guarantee of privileges and responsibilities of equal citizenship in New Zealand. It seems to me that we should be treating everybody equally, and that’s what the coalition agreement between New Zealand First and National says. Then, in the coalition agreement between all three parties, there is the element there, which is pro-democracy, to uphold the principles of liberal democracy, including equal citizenship, parliamentary sovereignty, and the rule of law and property rights, especially with respect to interpreting the Treaty of Waitangi. I am really interested in how this fits with those agreements within our coalition Government, because, as I said, it’s a new activity.

The one thing we were advised—because this is the second time this particular thing has come up in front of the committee; the first time, we didn’t do something with it, but this time there is an amendment to do something with it—is that this comes from the Land Transport Management Act 2003. It’s an Act that has been around for 23 years, and it has just been put in there. The question is whether it should have been put in there, whether it’s a practical thing to do, and, also, whether it’s a fair and reasonable thing. As the Transport and Infrastructure Committee observed, we didn’t say to other people who are really materially involved in the transport system, the people who are moving freight, etc.—they don’t get a look-in at that stage. They only get a look-in when they are consulted. In fact, as we heard from the Opposition, what do most people want? They want the ability to be able to get around their city. They want—

No congestion.

They want no congestion. They want to be able to use a good public transport system. Those things affect all of us. They affect all people, regardless of whether they are Māori or whether they are non-Māori. The question to the Associate Minister of Transport is why it is that at the moment, it appears, you are not supporting this amendment, because it would be consistent with the coalition agreement to support the amendment.

16:34

Thank you, Mr Chair. One of the interesting things that the Minister referred to was multi-modal representation, potentially—rail representation, and the like. Now, the Auckland Regional Transport Committee that this bill establishes will have a mix of voting members and non-voting members, and the non-voting members are limited in number, to a total of three, and that’s contained in sections 38D, E, and F. The non-voting members are specifically identified as either appointed by the New Zealand Transport Agency–—Waka Kotahi—or by KiwiRail or by the transport council-controlled organisation. The question for the Associate Minister of Transport is: is he satisfied, given the changing dynamics of transportation in this country, and indeed around the world, that that descriptor futureproofs the 30-year horizon? We’re talking about individuals who, as a collective, will be responsible for monitoring the delivery, after preparing it, of a 30-year horizon. Is he satisfied that the definition there is not too discreet to avoid what might come in the future?

Often when we have these committees that get stood up, there are opportunities to co-opt. Whether we’re talking about school boards or local government, there are certainly a number of committee opportunities where the governing body or the council or a committee can co-opt members where there is a lack of skill or expertise. Now, this particular bill, under new section 41D, identifies the fact that this committee will be required to adopt a set of standing orders. That can identify whether an entity can co-opt for that purpose, so maybe that’s what this particular committee could do. However, in front of the Parliament at the moment is another bill—and why I’m referring to this as relevant—the Local Government (System Improvements) Amendment Bill. If that bill is passed, as currently recommended by the committee by majority, that would allow for a consistent set of standing orders that would apply across local government.

My question for the Minister is: whilst Part 2—specifically new section 41D, under clause 14—talks about the fact that the Auckland Regional Transport Committee must adopt a set of standing orders, where does that sit if the Government’s other piece of legislation is passed? Will a consistent set of standing orders override this provision, or will this provision stand and, effectively, trump any form of consistent set of standing orders that the bill that I mentioned would actually present?

This is a very important point. It wasn’t actually covered by the Transport and Infrastructure Committee, but when we’re talking about standing orders—and members of this committee are obviously familiar with that as well—where does the mechanism in this bill align? There’s a possibility that the Local Government (System Improvements) Amendment Bill may not pass, but in circumstances where it does, is this a stand-alone piece of legislation that will not be overridden by one consistent set of standing orders that might apply within local government? This is relevant, because we are talking about a bill that is seeking to amend the Local Government Act, just like the system improvements bill is also seeking to override this. It may be that the Minister needs to seek advice on that. It is something the select committee at the time did not turn its mind to, but it will be important. It might be, if there’s a risk that a non-bespoke set of standing orders can’t effectively exist, that there might need to be some change in this particular space. I’ll leave that with the Minister, and I’ve got a couple of other points.

16:38

Thank you, Mr Chair. Actually, it’s quite practically impossible to say whether something applies if another piece of law does or does not pass. This bill applies for the Auckland Regional Transport Committee to adopt a set of standing orders for the conduct of its meetings and those of its subcommittees. If the subsequent piece of law that the member Tangi Utikere referred to passes and overrides those standing orders, and provides a consistent set of standing orders, then it overrides those standing orders. If it doesn’t override those standing orders, it doesn’t override those standing orders.

It’s an impossible question to answer, because you’re talking about a bill that is before the House and that hasn’t passed and the final form of which is unknown. All I can say is that if a subsequent piece of legislation says there is to be a consistent set of standing orders that overrides other standing orders, it will override them. If the subsequent bill does not provide that, it will not override them. That’s about as much as I can say in terms of the question.

16:39

Thank you, Mr Chair. I have got some questions about the membership of the Auckland Regional Transport Committee. While I was on the Transport and Infrastructure Committee and I generally support the direction, I just wanted to tease out some of what I would say were apparent inconsistencies.

Much has been said by this Government about localism and much has been said about this bill giving Auckland the say over transport that Auckland wants, but when I actually look at the voting members, it has potential for a tie with no tiebreaker in that there are three appointed by the Minister, three appointed by the mayor—and we understand that already that power of the mayor is quite different from other councils around the country—and then they’ve got to agree on the chairperson. I’m interested in what happens if there is a radically different either central government or local government.

At what point are there opportunities to replace those people? Do they all get replaced at once? Is there opportunity, perhaps, to change the chair earlier than their term would otherwise dictate, and how does this potential tension between the previous Government’s appointment of a chair and the new Government—it won’t get much done before November with this committee, but whoever. There must be some opportunity, or will that only be—as was referred to earlier—through the new Government setting a different Government policy statement?

The other area that I was interested in is the appointment of members. I don’t think we raised it at the Transport and Infrastructure Committee, but it’s occurred to me since—with the very interesting Infrastructure Commission report and the acknowledgment, I think, from both sides of the House—that the Infrastructure Commission has got a much more serious role to play in having some common path forward so that we don’t waste so much money starting things but not finishing them. It is so that things don’t get thrown out, whether it’s the Auckland rail or the harbour bridge or a cycle path alongside a motorway—whatever—and they’re not thrown out just because it was the other side that started them. I’d be interested to see how the Associate Minister of Transport sees the input of the Infrastructure Commission into the Auckland Regional Transport Committee. Thank you.

16:42

I’d encourage the member, if she would like this committee to see some action before November, that we should hurry along and get this bill passed into law as quickly as possible. In regard to her question, I’ll just refer to clause 14 again and the provisions around new section 38D, which outlines the membership—which the member referred to—which is the chairperson, and then three members appointed by the Minister and three members appointed by the mayor. The chairperson is jointly appointed under new section 38E, and the terms of those offices are under new section 38G.

New section 39A is the provision around the removal of members, and I’ll note that in regard to the chairperson: “(1) The mayor and the Minister of Transport may, jointly, at any time and entirely at their discretion, remove the chairperson of the ARTC from office.” Then, when it comes to the Minister of Transport’s appointments, under subsection (2), the Minister, at their discretion, may remove a ministerial appointee at any time and at their discretion, from office. As well, there is subsection (3): “The mayor may, at any time and entirely at the mayor’s discretion, remove a mayoral appointee from office.”

Now, the member raises relatively valid concerns about politicisation of appointments, but this process happens across a myriad of boards and entities—thousands of them, actually—across the country. There are processes that are followed through, whether that’s through a Cabinet appointment or whether it’s through a mayoral appointment, and, on the whole, I think both sides of the House would agree that it’s worked generally quite well over the years. I would just look to the appointment processes that are in the statute and have some faith in our elected representatives to do the right thing because, ultimately, that’s what we elect them for, and if we weren’t all here to do the right thing, then we should probably walk out the door and go get another job.

16:44

Thank you, Mr Chair. I have some further questions on the functions of the Auckland Regional Transport Committee (ARTC) in relation to the 30-year transport plan. As my colleague Tangi Utikere has said, this was well canvassed. There was no surprise around the introduction of this, but there will be some confusion about what it actually is. To the Associate Minister of Transport: is this plan a different sort of instrument to the Government policy statement (GPS)? Is it a planning instrument? Does it give rise to secondary legislation? What is it, and why is the Auckland Regional Transport Committee tasked with preparing the plan but its objectives are set by Government?

Why is it that its objectives have been lifted up into this new section 42(3) here in clause 14 when we have a new body which is tasked with responding to the needs of Aucklanders, and it has a mechanism for the Minister to remain closely involved in not only the production of the plan but to receive regular reporting from that body? Why is it necessary, then, for the Government to have such a level of central planning as to impose on Aucklanders the three objectives there? Would he not consider, then, if those objectives are going to be imposed on Aucklanders, the insertion of a new subsection (3)(aa) that would read “reducing congestion” as one of the objectives of that plan, given that most Aucklanders tell pollsters and local politicians alike that congestion is their number one problem in Auckland’s transport system, and they say that that is what they’d like politicians to be focused on—elected members and the bureaucrats who support them—to do that work in order to respond to the needs of Aucklanders? The reason I’ve asked the question about why the objectives have been set here is because it is an unusual thing. This isn’t a GPS, this isn’t an ordinary planning instrument, and its objectives have been set in the primary legislation, which is difficult to change later on.

I also wanted to ask him a different question, which is about the role of local boards in contributing to the plan. That’s not set out at the primary legislative level, but, as we know, I think that all parties in this House support having more local democracy in the planning and governance for Auckland’s transport system. If that is to be achieved, why is it that there is not further guidance in primary legislation about how the ARTC is to give effect to the aspiration of local boards for their local transport systems? Why is it that they don’t have an enshrined mechanism to input into the design of the wider plan, given that we know that local inconsistencies will come up if they have complete free reign to operate as local authorities, as the Minister alluded to in his answer to my previous questions in Part 1?

I also want to ask him about this: there’s been an addition in new section 42C in clause 14. I’m at the bottom of page 16, and it’s paragraph (g). It says that the 30-year transport plan for Auckland must include “the likely sources of funding”. I want to ask him how this interacts with the GPS. Usually, local authorities would set out their funding intentions in quite strictly formalised ways, and their funding options are either their rates and their rating income—and that is hotly debated and contested by the people they represent—or through funding from central government, which is provided for in the design of the plan and the appointment is made at the committee level by the Minister, but this is a new thing. What power does the Minister envision for ARTC to canvass and then consult on its intentions for other sorts of funding? Does this allow for the ARTC, for instance, to canvass its intention to sell off some transport assets and to use the proceeds of those to buy other transport assets?

That would usually be contested through the Budget. It is a very well-understood process and it is a process which is governed by the Local Government Act and Auckland Council’s particular legislation, but is this a different mechanism by which Auckland Council can canvass different sorts of uses of its assets?

Usually, if those decisions around funding sources are going to be, say, the levying or tolling of certain routes, the how and why of that is also a well-established process of consultation, and then they are creatures of primary legislation and those kinds of arrangements. Is this a different route for the Auckland Regional Transport Committee to be able to, effectively, consult on and then gain public support for some sort of system which is not provided for in another piece of legislation? Minister, I’d welcome your advice on that.

16:49

Without wanting to overstep the respected boundaries of the Regulations Review Committee and delve into whether or not something is secondary legislation by virtue of being legislative in nature, I am advised that the document—the 30-year transport plan—is a document created by the Auckland Regional Transport Committee (ARTC). It is not legislative in nature; it is a planning document, and so it wouldn’t classify as signed legislation, but, of course, those are some questions for the likes of the Regulations Review Committee and other more practised legal minds than me to take into account.

In terms of where it fits in the planning framework structure, the Auckland Council’s long-term plan (LTP) has to take it into account. That’s under new section 42G, inserted by clause 14: “When preparing [a long-term plan], Auckland Council must take the 30-year transport plan for Auckland into account.”, and apply the relevant legal test for what “taking into account” means. Then, at the same time, new section 42B: in preparation of the 30-year transport plan, “the ARTC must take into account—(a) the GPS … issued under section 66 of the Land Transport Management Act 2003”.

In terms of what this could do to help guide the budget-setting priorities of the Auckland Council, I think it would be common sense to think that if you’ve got a 30-year transport plan agreed to by central government and local government, some of the funding decisions being made at a council level would reflect some of the priorities and the projects in that plan. Again, ultimately, those are decisions are up to the Auckland Council and their leadership to make, and the various constraints and funding constraints that they—like central government—are under, as well.

Then, just to go right back to the very start of the member’s questions: why are objectives set by the Government? Well, there is always a trade-off between making things like this so prescriptive as to make them very unworkable or so broad as to make them very unreliable and unpredictable. We think, as a Government, we should set some frameworks and some structure for local councils to operate within and then provide them the scope within that to meet some of the primary objectives in this, which are, of course, productivity, economic growth, safe and rapid movement of people and goods, and efficient asset management.

I’ll just take the point around congestion into account: it would surprise me if anyone could interpret “safe and rapid movement of people and goods” as anything other than addressing issues around congestion. Of course, it’s wider than just addressing congestion; it could take into account distance of people from where they live to where they get to work, or to main transport hubs or to critical infrastructure. I would put to the member that there, under new section 42(3)(b), congestion is front and centre of one of the problems of getting the safe and rapid movement of people and goods around Auckland.

16:52

Thank you, Mr Chair. In light of those questions about new section 43B and the principles of what the Auckland Regional Transport Committee must take into account, it’s interesting—there’s another part of my Amendment Paper 568 that the Associate Minister of Transport has had two calls on now from two different parties in the Chamber and hasn’t yet addressed, so I’m hoping he does take this opportunity to address it.

That is under new section 43B; there are a whole lot of sections about what the principal objectives of the council-controlled organisation (CCO) will be: operate in a financially responsible manner, use its revenue efficiently, ensure revenue expenditure is accounted for—all very sensible things. There’s one part in there that goes back to the previous question about Māori, which is what was raised by Mr Andy Foster, chair of the Transport and Infrastructure Committee that examined this bill. He talked about, again, what is “Māori” specifically, and do you think, Minister, that either “establish and maintain processes for Māori to contribute to its decision-making process” needs to be defined by your good self either here or in legislation, or you need to at least, Minister, tell us what “Māori” means in this piece of legislation? Is it iwi? As the Chair of the Transport and Infrastructure Committee that examined this bill raised, there’s roughly, say, off his numbers, about 300,000 people who whakapapa to Māori in Tāmaki-makau-rau, in Auckland. How are they to be engaged with? Is this being left to the CCO to discover? How is that going to play out?

I’d appreciate if you, Minister, would take a call and would do this—because I would also point you to the commentary from the select committee, in which some of us consider that the bill should define what consultation with Māori would entail to ensure that obligation is clear. I think that deserves to be addressed by the Minister, and, as I outlined at the start of my contribution, we are still waiting for a reply to this Amendment Paper from the start of this part of the committee stage. Thank you.

16:55

Thank you, Mr Chair. I had some questions that are related to the topics that have previously been discussed, but I just wanted to ask the Associate Minister of Transport: in defining “productivity and economic growth” under new section 43A in new Subpart 2, I’m just wondering how that will be accounted for. I think we can all agree that productivity and economic growth might be useful if it leads to higher living standards and less waste. However, I guess the key question about a transport plan is: how do we know it’s delivering on these objectives, and what’s the definition or measure that we’re using to measure productivity?

Then my other question is around disabled access. New Zealand really doesn’t do well on disabled access for buildings or transport systems. In prior terms of Government, we’ve had a requirement for regional land transport committees to have some representation from groups—like people who are living with different disabilities—to feed in. That’s often been a really useful level at which to get that input, because when the regional committee is looking at specific projects and long-term planning, they’re getting those concerns. If none of the members specifically have that angle on it—and there’s no legislative requirement that I can see in this for consideration about universal access—is that something that the Minister expects will occur just out of goodwill, or is it the case that the Government is simply, kind of, giving up on that perspective?

I’ve been unable to see any part of this bill which mentions a requirement for the Auckland Regional Transport Committee to have that input from specialist groups who have lived experience of trying to access the city, often through the public transport network but also through the streets and the design of it. If there is no specific requirement to think about disabled access then it will often get missed and it will be more expensive to remedy later. I’m just wondering if the Minister is open to—or how he sees that working?

Finally, just a comment—and, look, I don’t expect the Government to change their position on this, but I do think it’s richly ironic that half of the members will be appointed by a Minister of the day. Surely, if we trust the local community to prioritise the transport projects, they have the best information. It’s the locally elected representatives at that local level who probably best express the views and concerns and aspirations of the city. It would make a lot more sense to me to have maybe one ministerial appointment and have the rest of the regional committee be from the council, and not just at the whim of the mayor. The mayor is elected at large, but it’s very, very low participation in that election. If we want to truly get good, sensible transport outcomes, I think we need the 30-year plan to be predominantly put together by people who are elected at that local level—because let’s face it: most people are just voting on vibes, whether it’s for the mayor or the Government of the day.

When you look overseas at cities that have really good outcomes, most of the power and the funding is devolved to the city to make the decision about transport priorities. It’s not done at a national level. Maybe in Australia it’s a combination of state and city, but we’re very—like, a Minister of the day might be very far removed, and even the mayor and a Minister working together might be able to choose a few members of the committee that aren’t actually representative of the whole city. In a way, it’s like, why isn’t the 30-year plan just being developed by Auckland Council and signed off by the governing body? I don’t understand why this Government feels such a need to control what a local city is doing, but it’s apparent in every step that they’ve taken—is pretty much about how the Government of the day and the Minister of the day has a lot more power than the 1.5 or 2 million people who live in Auckland.

17:00

I thought I would address a couple of points before I’m unceremoniously dumped out of the chair at about 5 o’clock by my more than able replacement.

Who?

Well, we’ll see. There’s an owl in here! I’ve got some business to attend to, unfortunately. Look, just to address Julie Anne Genter’s—[Interruption]—well, it’s actually a ministerial meeting with the children’s Minister, so he apologised, having to go to that.

The questions from Julie Anne Genter—one is around a definition and how we’re going to be defining “productivity” and “economic growth”. Look, it’s the age-old question of: when you put something in a statute, how’s it going to be defined without putting some sort of descriptive, long, interpretative section? Ultimately, sensible people will apply this statute to their roles and responsibilities. If other people think that they are not applying that in the correct way, they can challenge that application through the courts, and the courts can make a decision as to what the correct interpretation of a particular piece of statute is.

I think the terms being used in there are both clear enough to point the committee in the direction of meeting those objectives around productivity and economic growth but also provide some space and some flex for those committees to say, “Well, in order to get the safe and rapid movement of people and goods around the country or around Auckland, ‘safe’ would include taking into account particular characteristics or disabilities that individuals might take.”

That could be one interpretation that the committee might take, but I’m not going to get ahead of that because I don’t want to be on the other side of a court case at some point that says, “Oh, the Minister said this in the chair, and he meant that.”, and then we’re going to take what’s in the Hansard as being the intention of Parliament, when, actually, the intention of Parliament is the words that are written in the statute, supported by the context, and the interpretation and purpose of the text and all that kind of stuff, not the ramblings of Ministers and members in the Chamber.

Moving on to the last point, where the member said, “Well, what if these appointees are just made at the whim of the mayor?” I will point to the guard rails set out in new section 38F, inserted by clause 14: “Appointment of members by Minister of Transport or mayor”, and particularly new subsection (3)(a) which is in there, “the mayor must consult the governing body before making an appointment:”. So there are some guard rails put in place there for a mayor who may be going rogue—although, I’m sure that’s never happened in the history of Auckland Council.

Never!

Never, never happens!

In terms of Mr Luxton’s questions around the use of the word “Māori”, look, I can’t answer that directly; all I can point to is a couple of things. First, that term was in the bill as introduced, and so my assumption is, in the absence of any agree to disagree provisions, it was supported by members of the governing parties through that process, so I can only take that process as word. If there was an agree to disagree provision put in place, I’m happy to hear it, but all I can do is put my interpretation of the text of the bill as was introduced and put it through to the Transport and Infrastructure Committee.

The second thing I can point to is, yes, the differing views are inserted within the main commentary of the report, but I would note that, at the top of the report, the committee does agree to all of those amendments unanimously. So I can’t speak any further to the deliberations of the select committee but to comment on what’s in front of me in the particular report.

17:03

Thank you, Mr Chair. I would like to ask a question that’s very practical and comes from a meeting I had with my constituents who live around Eden Park, and that is: what is the Eden Park precinct? If I have a look at the interpretation section amended by clause 12, it talks about that precinct as being defined, and we go to new section 48(2)(e), inserted by clause 14, where it says “an Eden Park precinct road, being a road that is within the Eden Park precinct (see subsection (3))”. I go to subsection (3), and I get (3)(b), “the area that is the Eden Park precinct.”, and I’m none the wiser. I have absolutely no idea what the Eden Park precinct is, and I just can’t tell my constituents what’s in and what’s out.

Now, the difference for them is that there are ones within that area—probably, I suspect, the area of traffic management at the current time—that are treated quite differently. Residents have permits; they are the only people who are able to go into the precinct during the times when the park is being used at a certain capacity, and then the ones beyond that precinct get treated differently. What this does is it puts the area that is the Eden Park precinct under control of a central body in a way that the streets around it won’t be.

I’ve already asked questions about the communication between the two parts who will be making decisions on these places where there is an overflow, and I haven’t really had an answer on that. I just want to know: what is intended by that precinct? It’s not a trick question. I had a meeting the other day; it was a public meeting, it was well attended and people didn’t know what was in or out. I’ve done surveys in this area. The biggest issue I get is not actually any feeling that is particularly anti the park developing, but it’s about this—it’s about the transport issues around the park. I would be very grateful for an understanding of what that precinct looks like—or, if there is no such definition, how will it be defined, how will we decide what the precinct is, and will that change over time? Thank you. I’m grateful for the answer.

17:06

I thank the member for the question. To clarify: Auckland Council will define the Eden Park precinct area when it develops the Auckland roading classification framework. I’m advised that this work is currently under way and that the local boards are being consulted with on the framework. The Minister of Transport must agree to the roading classification framework that I’ve noted, and this provides a safeguard to ensure that the Eden Park precinct is appropriately defined.

17:07

Thank you, Mr Chair. It’s good to have the Minister of Local Government and Minister for Auckland in the chair, because, obviously, it’s very salient to what the committee is working through.

Minister, at new section 38E, inserted by clause 14: this is around the appointment of the chairperson, and it’s identifying that the chairperson of the Auckland Regional Transport Committee would be jointly appointed by the mayor, and there’s a process that the mayor needs to go through, and the Minister of Transport. I just wanted to clarify: is it the Minister’s view that those are two equal parts of that particular equation, that if there’s a circumstance where there is disagreement between those two office holders, how is that brokered? Is it his expectation that it is going to be an equal partnership around that?

In terms of the process that the mayor needs to step through in appointing their particular mayoral appointments to the transport committee, a change that the Transport and Infrastructure Committee did make was a requirement for the mayor to not just make those mayoral appointments themselves but they would be required to have some form of consultation with the governing body. This is actually something that the select committee did spend quite a lot of time on: how far that consultation should go, should it be more prescriptive than what is here, or whether it should exist at all. Now, there are some members in this House—I know Mr Foster is one—who have had the experience of being able to exercise mayoral powers, and there are certain things around the appointment of a deputy mayor and setting up a committee structure, and all those sorts of things. A question for you, Minister, is: are you comfortable that that select committee change is kind of the right balance—that the mayor is still required to consult, as opposed to just the mayor making those determinations by themselves?

If I could just cover a couple of other areas, as well. New section 39F, inserted by clause 14—we haven’t talked about this yet—this is about the expenses, and 39E, the remuneration of members. There is a differential between the remuneration that would be paid to mayoral appointees, and the remuneration that would be paid to ministerial appointees. The Cabinet Fees Framework would deal with one, and the existing allowances and expenses, or existing remuneration, through the Remuneration Authority, would deal with the other. Now, members of the committee are still undertaking the same type of work; it’s not like one gets paid more and they get more of a vote, or thereabouts. Again, is he comfortable that whilst undertaking the same amount of work, there, effectively, would be a potential differential in remuneration levels that would exist there?

The only other area that I wanted to touch on in this exchange—well, actually, no, I’m interested in new section 41D, inserted by clause 14. Before you took the chair, Minister Watts, Minister Meager identified that this is about the standing orders. This is a particular bill that would create a set of standing orders that the Auckland Regional Transport Committee would be required to adopt.

Now, you will be familiar with your own bill that’s currently before the Parliament—the Local Government (System Improvements) Amendment Bill—so I think you are the right person to provide a response, if possible, around this. That bill, if passed as amended, would allow for one set of standing orders to apply across the country. I’m just interested in your view on how that applies alongside this particular bill. Minister Meager indicated that it’s something for the future and that, if it happened, the potential is that this could be captured as a result of this. Firstly, is that your expectation—that it would? Secondly, if so, are you concerned, in light of the fact that the committee spent some time putting into this bill a reference to the fact that there needs to be some standing orders? I’ll pause at that point.

17:11

Just in regards to the questions on the process, there absolutely is the expectation that it is a joint process shared between the mayor and the Minister, and “joint” is what it says on the tin.

In regards to the question about whether I’m comfortable with what the Transport and Infrastructure Committee has recommended: yes, I think, primarily, the purpose here is very much one that is aligned with expectations, which is restoring democratic accountability for transport and Auckland transport matters back with Auckland Council. That is the intent of the legislation, and that is what will flow through as a result.

17:12

Thank you, Mr Chair. I just have a few questions for the Minister regarding new section 42D, “Consultation on plan”, noting that Auckland Council currently has a number of community-based consultation groups, such as seniors, youth, small businesses, etc. I want to check—specifically we’re looking at new sections 42D(2)(c) and (d)—in terms of clear information and members of the public being given reasonable opportunities. I want to check, first, in terms of whether there have been any conversations between the Minister and the mayor regarding how these community-based groups potentially will be able to feed into the consultation process?

I specifically want to address it from a senior’s perspective. One of the really important exercises that Auckland Council and Auckland Transport did a little while ago, under the advice of the seniors community group, was to get policy makers to, essentially, go from the Ferry Building in Britomart to, I believe, the Auckland War Memorial Museum without their smartphone and have to navigate public transport without that. Part of the issue that we’re having, when it comes to seniors, is the rapid change in technology and how consultation may not always be accessible for them. I want to check with the Minister regarding clear information in paragraph (c) and the reasonable opportunity in paragraph (d). How would seniors be captured in a lot of this? At the same time, when we’re looking at Tāmaki-makau-rau Auckland having a third to 40 percent Asian population, how are the voices of the Asian community going to be captured as a part of this as well?

Those are my two questions on new section 42D(2), and for 42D(3), it does say “consult Māori”, which is fantastic, but I wanted—just so we have it on record that, when it comes to “consult Māori”, we’re specifically referring to mana whenua. We’re specifically referring to Ngāti Whātua Ōrākei and Ngāi Tai, etc., with regards to that. Right? Yes, I’m just checking on those few questions there. Thank you.

17:14

Thank you, Mr Chair. I wasn’t looking to take another call, but the answer from the previous Minister in the chair, the Hon James Meager, leaves a lot to be desired. This was in regards to my Amendment Paper 568—

That’s a bit harsh.

Well, it is a bit of a harsh statement, but I think it’s fair to say that saying there was no use of “agree to disagree” when the bill was introduced and so it must be fine is not really, in a parliamentary process, a suitable answer when members from parties across this Chamber are raising legitimate questions for Aucklanders engaged in the process of a 30-year transport plan that has been through a select committee, had issues identified, and had them flagged in the select committee report.

I’m hoping for a more substantial answer from this Minister in the chair, the Hon Simon Watts, because what we’re talking about here is the preparation of a 30-year transport plan. There is a co-design element at the start, which is between the Minister of Transport, the mayor, and nondescript “Māori” in this legislation. We need, as a committee, to understand what that means. If tradies, transport users, and ports are not involved in the pre-design of a plan, what is that definition of “Māori” in this part?

If we go to the next part—consultation on the plan—it says the Auckland Regional Transport Committee (ARTC) must follow the following consultation process: the process must be “available to the public in any manner and format (which must include an accessible format) that the ARTC considers appropriate to the preferences and needs of the persons who will or may be affected by, or have an interest in, the plan.”

Aucklanders, people who are using the Auckland roading and transport network, have a part in this bill where consultation is done on the plan which, if my amendment was adopted, would be prepared with direction from the Minister of Transport and the mayor. This leads to a question that Lawrence Xu-Nan has just asked. We’ve got public and we’ve got “Māori” without a definition of whether that’s individuals, iwi, what sort of entity we’re talking about. I’m very concerned, based on the answers that we’ve received in this committee stage, that that is left undefined. Therefore—I shudder to even mention this—but is this creating a separation in legislation between people if we’re going to allow such a term to remain undefined in this important part of the committee stage? Thank you.

17:16

I just want to make a comment and then I’ll also come back to some other questions in regards to new section 41D, inserted by clause 14, around standing orders as well that was raised by the member Tangi Utikere before. In regards to the question here around the broad term “Māori” used in the bill, the term “Māori” is intentionally used in the bill as an inclusive term, given that there are 19 iwi groups within the Auckland area, and obviously a significant number in that context.

This is also the term used in the Land Transport Management Act 2003 and also the Local Government Act 2002, and in the principal Act, the Local Government (Auckland Council) Act 2009, so there is a consistency in that regard. It is a challenge to replace the term “Māori” with a particular group, as there is no one group that represents Māori in Auckland, noting the 19 different iwi groups there that I’ve referred to.

More broadly, to the Amendment Paper that the member Cameron Luxton has noted in regards to that point, the bill does carry forward existing requirements in both transport and local government legislation that relate to Māori and/or in the case here of new structures and instruments like the Auckland Regional Transport Committee (ARTC) and the 30-year transport plan for Auckland.

There are three clauses in the bill that relate specifically to Māori and the transport system in regards to new section 42B(1)(b), inserted by clause 14; 18HI(a), and 81IA in particular, and also new section 42D(3), which relates to the ARTC consulting with Māori on the 30-year transport plan and new section 43AB as well. There are a variety of provisions that do deal with that. I’m happy to cover off more detail in regards to that amendment.

17:19

Thank you, Mr Chair. I seek to engage with the Minister of Transport now on his new sections 44 through 44AB, inserted by clause 14. These relate to the new transport council-controlled organisation (CCO). It’s good to see a new entity that will be charged with something which is really important to Aucklanders. The provision of public transport is set out there in its primary functions at clause 4(1).

My first question, though, is: can he explain why he has allowed significant straying from what he’s written at clause 1 that it will provide for public transport—that seems clear—but then at clause 2, any other transport functions are something that can be delegated to it? So how should Aucklanders expect to see this council-controlled organisation (CCO) developing? Is it a public transport CCO or is it something else?

My next question to him is about who owns public transport assets under the new legislation, because at new section 44(4), inserted by clause 14, there’s no vesting of land interests—that’s well understood. At the current moment, you have some assets which are associated with public transport infrastructure in Auckland; Auckland Transport is the primary interest holder in those. Then you have some assets which are not associated with Auckland Transport, which would be council. Shouldn’t this legislation give some clarity in the project for reforming Auckland Transport’s governance arrangements, that the public transport CCO should hang on to those assets that are associated with the provision of public transport services, because those are the assets that it will need to continue to perform the public function which is being set out at new section 44(1), inserted by clause 14.

Moving on to new section 44A, inserted by clause 14, the delegation powers here are very broad, and it would be helpful to give us an indication of—for one, there is no mention of delegation to local boards. That was something that Auckland Transport had provision to engage with local boards quite closely on. That was important under the old regime, where local boards didn’t have transport powers. Now they will have some transport powers, but there will be functions within the provision of public transport services—bus routes, for instance—which local boards have a very direct interest in, and, in fact, probably the most popular thing to petition a local board or local board politician about is the provision of where the bus service is going to go, especially for those new developments in Auckland. That is something that isn’t provided for at all here.

What is the requirement and what is the expectation on a public transport CCO, which, reminding members, is an organisation which doesn’t have that level of accountability to the public that is being given in other ways in the rest of the transport system, by this bill, to Auckland Council? How is it, then, that this new body will be accountable at that local level? The old legislation gave local boards a voice in things like this. This doesn’t seem to have those same protections for delegations, or at least engagement and proactive engagement with local boards. What happens, for instance, if the local board wants to have an active plan for its provision of local bus services, but doesn’t have the statutory mechanism to make sure that those things are on the agenda with a CCO that doesn’t want to listen to those local boards? How do we guarantee the democratic accountability and a way and a mechanism for local people to have some oversight over the provision of local public transport services, like they do in other transport services, because now governance will be shifted into a more publicly accountable mechanism?

I also want to ask the Minister a more general question about these powers. Most of the public transport CCO’s powers are granted to it by the council through the long-term plan. That is a well-understood mechanism by Aucklanders, but then we’ve got this other document, which is a creature of his legislation: the 30-year transport plan. One would guess that there will be some overlap and some inconsistencies between those two documents—things like capturing in the 30-year plan the aspirations of Aucklanders for a decongested city will run right up against the long-term plan, where the rubber hits the roads for how to actually fund that. If Government isn’t making provision in this legislation or in other legislation to provide for Auckland’s long-term reduction in congestion, then there will be some inconsistencies there. How do these two documents match up for the public transport CCO?

17:24

Thank you, Mr Chair. Look, I wanted to return to the issue which has been raised by Cameron Luxton, which the Hon James Meager partially answered, but he actually didn’t answer it accurately in terms of the select committee proceedings. I do want to pursue this just a little bit more, because what he said is that he implied that the parties which we’ve got the commentary on from Transport and Infrastructure Committee—which said that “Some of us are concerned that the bill requires the ARTC ‘establish and maintain processes for Māori to contribute’ ”. Now, the implication from his answer was that, in fact, that was some of the Opposition parties; actually, it wasn’t. It was ACT and New Zealand First who said, “Actually, we are concerned about that, because we don’t like the wording there and we think it is impractical.”

We also noted above that we say that we agree—and this was all of us—as a select committee that providing for consultation with Māori in the section 42D(3), inserted by clause 14, is appropriate. So the concern that we had here—and the other thing is that the Minister who was then in the chair said, “Well, look, the select committee said at the front end, ‘We recommend all amendments unanimously.’ ” Well, of course, in that particular instance, that amendment, having not passed, it’s not an amendment which is reflected in what we passed. Therefore, every amendment that was agreed by the Transport and Infrastructure Committee was unanimous. The one that wasn’t agreed just simply has not got through there. I think that was a misread of what was being said there.

Our logic, in part, was that we are saying that we’ve got this situation set up in the legislation, which says, “You’ve got to have the Minister and the mayor being involved in the process, and Māori.” Now, Māori—actually, it doesn’t even say it’s in Auckland. Essentially, it could be one fifth of the entire population of New Zealand. In fact, it doesn’t even say you’ve got to be in New Zealand. You’ve got a very, very large number of people who need to be consulted. This is in the design. This is not once you’ve designed it. It’s not going out to the public. When you go out to the public, then, by definition, you’re going to capture all Māori as well, because the bill is very, very clear that we need to make sure that we provide really good information to everybody. You’ve got the time and the information there to respond to—that’s great, and Māori will be able to respond in that situation.

The problem is that the bill as it is at the moment, says—and this is a new issue, because this is a new responsibility. The Auckland Regional Transport Committee (ARTC) and the 30-year transport plan does not exist at the moment, so it’s a new instrument. It says that we’ve got to “establish and maintain processes to provide opportunities for Māori to contribute to the development and preparation of the plan.” That is an awful lot of people. If somebody feels that they don’t like what’s in the plan or somebody feels that they haven’t been given the opportunity—maybe they missed something—is there the opportunity for them to therefore, in the process, challenge the plan? There is an issue there because it is so loosely defined.

Now, the Minister of Local Government has already said that the intention was to be inclusive because there are 19 iwi groups in Auckland. Great. Well, why not say, “19 iwi groups”? Why not list them? Why not have a Schedule there? That’s not what it said. The previous Minister who was in the chair said it’s what’s in the law that matters, not what the utterances are of the Minister on the Hansard. Now, if that is the case, then saying, “Well, Māori means 19 iwi.”, well, actually, no it doesn’t. It says “Māori”—that’s what’s in the law, so if we mean 19 iwi, let’s say 19 iwi. If we mean something else, let’s say something else.

The Minister also said that it’s been used in the Land Transport Management Act (LTMA) 2003—a piece of legislation which is 23 years old. There are a few things which have changed in 23 years. The Local Government Act 2002, 24 years—a few things that have changed there—and in the Local Government (Auckland Council) Act of 2009. I would put it to you, Minister, that quite a few things have changed in terms of the relationship between Māori—there’s certainly been a lot of settlements which have occurred since then—and the interpretation may be tighter now than it would have been in those days before. The question really is: is that appropriate language to be used at the moment?

The note that I made is, because we’ve had that issue, particularly with the LTMA, which, of course, this relates to in some way—because it said it in 2002, we should just keep on following that up essentially for ever and a day until the LTMA one day maybe gets replaced or repealed. I would suggest to you that that is a fairly lazy way of doing things. If we mean something specific, we should define something specific. Māori to me means Māori. It does not mean iwi. I think we need to be really, really clear, and that is really what the concern is that’s being expressed: that if we mean iwi, we should be saying iwi; if we mean Māori, it’s a very, very large number of people. As I said, roughly one in five New Zealanders, we are told, have some element of Māori whakapapa alongside any other whakapapa that they might have. Of course, that excludes people from Australia or wherever it might be. I will leave it there. I’ll look forward to the answer.

17:29

Thank you. I’ll come back on a number of questions that have come across the House. I mean, first and foremost in regards to the Amendment Paper by Cameron Luxton, the point which I am reinforcing here is that, in practice, Auckland Council will support the Auckland Regional Transport Committee to engage with Māori, using Auckland Council’s well-established processes, staff resources, and existing engagement forums.

The reality is that Auckland Council already has existing mechanisms by which to undertake that task, and this legislation is simply replicating that existing mechanism and not looking to introduce a new mechanism or a new definition over and above what is already in play. For example, in regards to the requirements for new section 42B(1)(b), inserted by clause 14, the provisions in this legislation will impose the same requirements that apply to the New Zealand Transport Agency in relation to decisions about the National Land Transport Fund, under section 18H(1)(a) of the Land Transport Management Act 2003.

In new section 42D(3) of the bill, again, the committee is required to consult with Māori on the draft 30-year transport plan. That, again, is modelled on the existing section 82(2) of the Local Government Act 2002, which requires consultation. Again, we’ve used consistent mechanisms. New section 43B requires consultation, again, based on the Local Government (Auckland Council) Act 2009, which requires Auckland Transport to “establish and maintain processes for Māori to contribute to its decision-making processes”. Again, that process has been replicated. We’re not looking to introduce new mechanisms; we’re looking to utilise existing mechanisms.

To the questions raised by Julie Anne Genter in regards to the disability community, the requirement that the Auckland Regional Transport Committee must consult on the 30-year transport plan, that needs to be made available in an accessible format, and that is outlined in new section 42D(2)(a) on page 17 of the bill, if the member would refer to that. Arena Williams’ questions in relation to the relationship between the 30-year plan and the long-term plan: the 30-year plan must be taken into account by the long-term plan under new section 42G.

In regards to questions raised by Tangi Utikere around standing orders of the Auckland Regional Transport Committee, new section 41D; the passing of the local government bill versus this bill, as answered previously by Minister Meager—well, basically, the short answer is this: we’re going to monitor and ensure that they are aligned between those two bills. The point raised around expenses of members, mayoral versus Ministers, was also raised previously—new section 39E(4)—and it’s appropriate in this instance for the Remuneration Authority to determine the remuneration allowances and expenses of Auckland Council members. This is consistent with the functions of the Remuneration Authority under the Local Government Act 2002.

Arena Williams: who owns the public transport assets? Well, all the assets and other matters currently owned by Auckland Transport will shift to Auckland Council. During the transition period, Auckland Council will determine what remains with the transport council-controlled organisation (CCO). However, obviously, Auckland Council will become the road-controlling authority for which Auckland—most of the assets will shift to Auckland Council.

Arena Williams’ question around transport CCOs and why does it allow further functions: the primary function is public transport, under new section 44(1), allowing for future proficiencies. Also, related functions will be determined to be added. It is the CCO of Auckland Council, and therefore any delegations by Auckland Council must be agreed to by the Minister of Transport, safeguarding future functions.

17:34

Thank you, Madam Chair. First of all, just signalling to the Minister of Local Government, I’m still waiting for his responses on new section 42D(2), inserted by clause 14. Potentially, I think, maybe if the same response for the disability response that the Minister answered regarding the question from my colleague the Hon Julie Anne Genter—that may clarify, but it would be good just to get a confirmation from the Minister regarding the questions I had for consultations with seniors but also consultations with migrant and especially Asian communities as part of the consultation plan.

I do want to move on to Subpart 3, which is “Transport CCO for Auckland”. I take the note of one of the previous speakers, Arena Williams, around the way that Auckland Transport (AT) transitions to the transport council-controlled organisation (CCO) and some of the questions that she had. I want to focus on new section 43B in terms of operating principles of the transport CCO, and I just cross-reference it with section 59 of the Local Government Act. I’m curious to know why the service that the CCO provides is actually not an operating principle of the transport CCO. At no part here—maybe tangentially in one of the parts in section 59 of the Local Government Act—does it actually mention the requirement to actually provide the service, which I assume is a really fundamental aspect of the transport CCO.

The reason I want to pick up on that as an operating principle is that one of the things that frustrates Aucklanders the most—and maybe the Minister also has personal experiences of this—is the lack of train service at certain times. Particularly, whenever there’s a game, we know, in Eden Park, half of the time the train isn’t taking place. The reason for that is because Auckland Transport, along with KiwiRail, along with One Rail, have an over-the-top complicated process in terms of who owns what. For those who are not from Auckland who are interested, Auckland Transport owns the trains and the train stations, but KiwiRail owns the tracks, and so even though the tracks—sometimes, KiwiRail will maintain them, which then takes out all of the trains; Auckland Transport may not be able to do that. That is a huge source of frustration for Aucklanders.

I want to check, under this new transitional plan, and also the transition from Auckland Transport to the transport CCO, whether the Minister has sought any advice or any guidance around what that would mean in terms of the complexity created in terms of the Auckland rail network, and whether there is going to be some way of managing the availability of trains as a part of a genuine core service that AT—now the transport CCO—provides. Again, I think the Minister may remember this, but often when, particularly, there’s a game on at Eden Park, etc., if the trains are not available, we do request that. The one time that I can think of in recent history where it was actually successful in terms of getting the service put on when the service wasn’t supposed to be available actually wasn’t done by the Government or by the council but by FIFA, when they held the FIFA Women’s World Cup. FIFA actually managed to convince KiwiRail to actually put the service back on. So—

Could I just ask the member, please—sorry to interrupt—which clause are you speaking to?

This is new section 43B, and this is to do with the question series around the operating principles and around the service that the transport CCO would be providing for Aucklanders, and that brings in the broader issue that we’re experiencing in Auckland around the availability of rail as a part of that.

OK, so it sounds to me like you’re talking about operational decisions rather than the clauses in the bill.

What I’m focusing on, Madam Chair, is in 43B, in terms of the operating principles, if you’re looking at new subparagraphs (a) to (e), not a single one of those principles actually talks about the service that the transport CCO should be providing for the public and for the population of Auckland. I mentioned that I cross-referenced it with section 59 of the Local Government Act, and that also is very loose when it comes to the operating principle of providing a service. I want to check with the Minister: if that’s not an operating principle, does that mean that—they can talk about in terms of efficiency and cost-benefit, etc., and seeking value for money, but none of this actually talks about providing the service that one would assume the transport CCO should be providing. That’s all. Thank you.

17:39

I move, That debate on this question now close.

Thank you, Madam Chair. I wish to bring the Minister of Local Government to Subpart 4. These are the provisions that relate to the council-controlled organisation (CCO), and I’ll start at new section 45C, inserted by clause 14. His answers to my previous questions were quite helpful because they were not what I had assumed. Under this provision, it says that Auckland Council must specify in the long-term plan the activities that the public transport CCO is going to be delegated with. So, as I understand it from his previous answer, he said that the meaning of new section 44(2) isn’t that council can sort of thwart the intention of the Government to create a public transport CCO with a public transport function, because the Minister needs to OK that delegation. However, then when we come back to what it says in 45C(1), all of the delegation powers are framed as delegating powers around the management of public transport. Is it that the Auckland Council could delegate broader powers, if the Minister was OK with that, to provide for something that was not public transport at the council-controlled organisation (CCO) level? All councils are able to create CCOs, which have delegated functions that sort of remove them from the realm of publicly elected members and into the realm of technocrats and officials. So you would expect that power, but it seems to be that under new section 45C(1), inserted by clause 14, the CCO can only receive delegations that are to do with the provision of public transport, buses, trains—that’s it. Perhaps there are other provisions, but as I understand it, that is what it is quite limited to.

I also want to ask: how is it that—does new section 46(1)(b), where the Minister approves the proposed delegation, create an anomaly whereby Auckland Council could have, like every other council in the country, gone through its process to create a long-term plan (LTP) and then have a Minister essentially disallow part of the instrument? Is this a disallowance power for the Minister in a planning instrument and we should understand it as such, or is it that there would be an iterative process where a Minister would negotiate the LTP and then the LTP would have to be reconsulted with Aucklanders? How is it the case that once you had specified in the LTP, then the rule would need to go to a Minister for further approval? But that is what the legislation says.

I also want to ask him about his new section 46(3). This section suggests to me that it doesn’t have to be in the LTP. The reason I ask him about this is because to specify that it must be in writing would suggest to me that we’re talking about other kinds of written delegations here which might not find themselves to be in the LTP, and that might be his provision for allowing for the Minister and the council to agree on another sort of delegation. Is that what he’s thinking of when he’s talking about delegations which are not public transport delegations that are defined in new section 45C? It’s important that we get to the bottom of this because I think most Aucklanders think that what they’re getting is the public transport CCO, and I think that as the Government has billed this as more democratic accountability in Auckland’s transport system, that is a good thing that is well supported by parties of this House and by Aucklanders. If they’re not getting that—if they’re getting a sort of back door to further delegation in the future that is things that aren’t public transport, or if we actually have a system where there is more ministerial control over what is in the long-term plan—then it’s a useful thing for us to appreciate.

The last question I have is around new section 46(7), which is around how the delegations affect or prevent Auckland Council from performing their duties. This very clearly says that Auckland Council isn’t prevented from doing the things it delegates. This is a well-understood sort of delegation power where you say that the delegator retains the powers to do those things. But, in a council context, that is a little bit unusual—where you would have an elected body delegating to a CCO but retaining the powers to do exactly the same things that it has asked the CCO to do. In this context, I have asked the Minister about bus routes. They are the thing that the public love to write to us and locally elected members about—and so they should—but for that person on the street who is writing to us about bus routes, are they meant to write to Auckland Council? Are they meant to write to the CCO? Are they meant to write to the local board? That is a fundamental question. It should be really obvious, but it isn’t from this legislation, so could the Minister please clarify that?

17:44

The point that was raised was around the operational performance and where does that sit around what time the bus turns up or that level of detail. That will be delegated through to the public transport council-controlled organisation (CCO). That’s the entity which will deal with that. In regards to the question around delegations, there’s concerns that, potentially, this is a back-door mechanism for other things; yeah—absolutely not. There is clear joint responsibility in terms of the appointment of the individuals that go on to the broader Auckland Regional Transport Committee; that’s between the Minister and the mayor, and those individuals will then have delegated power in regards to decision making, and they are the group that will make the decision.

In regards to the clause—more broadly as well, and, again, with delegations—the determination of public transport activities in the long-term plan are different from a delegation which could be broader than public transport under new section 46, which I think is what the member was referring to in her question. It is not a disallowance power in the context of the broader long-term plan. I think, if I heard the question right in the context of the way in which the member was asking, that’s to clarify that point. That should cover off the points that were raised.

17:45

Thank you, Madam Chair. Look, I rise to take a final point on the Amendment Paper 568, which I have raised. The reason for this is I’d like to give the Minister a chance to respond to something that is a concern for the people of Auckland. The concern is that what we’ve heard here is a defence. This bill talks about the people of Auckland and their transport system and the governance thereof. My Amendment Paper specifically says that the people whose direction should be followed are the elected representatives of New Zealanders and Aucklanders, being the mayor and the Minister of Transport. The current bill also has in there “establish and maintain processes for Māori to contribute to the development and preparation of the plan”: co-design of a 30-year plan, Minister. There is concern that by not supporting my amendment, it is not clear that you do not intend the section not to be interpreted as a co-design or co-governance of Auckland’s transport 30-year plan. I would invite you to support my Amendment Paper or to respond to concerns that not doing so means that co-governance is being written into this bill.

17:47

Thank you, Madam Chair. I really do want to thank the Minister of Local Government for his succinct answers in addressing the questions that have been raised because it means that we can just move on, so I do want to thank him for that. I want to have a look at new section 46A, inserted by clause 14. This is where the council has a legislative ability to make the operating rules for the transport council-controlled organisation (CCO). Now, when we look at what’s been inserted there by the Transport and Infrastructure Committee—and there is new paragraph 4A(1)(ac)—this talks about the Auckland Council being able to make rules in relation to the procedures for dispute resolution between the Auckland Council and the transport CCO.

My first question to the Minister for this one is: why is that needed? I think that this bill coming to the House is very clear about where the responsibilities lie, and I think that perhaps there is a view that’s held that the view of Auckland Council on matters outside of public transport is that it should be the Auckland Council view that prevails if there is some sort of dispute between the CCO and the council. I’m just a little bit perplexed as to why the council needs to turn its mind to putting in place some procedures around dispute resolution between the two when the expectation, I think, is pretty clear around that.

One of the things that we haven’t actually talked about yet is the Government’s own Amendment Paper: Minister Bishop’s own Amendment Paper 564. Relative to Part 2, as I understand it, that Amendment Paper will introduce two additional changes that haven’t been covered yet. The first relates to new section 46AB. When I was looking at that, it identifies that the Auckland Council must not perform the functions of the CCO related to things that are delegated and the public transport activities. The public transport activities—that makes sense because what this bill does is it’s basically transferring responsibility for public transport over to the new transport CCO. I had a question for the Minister, which is: why should there be a requirement for the CCO, or the council in this respect, to not actually perform those other functions? I assume the Minister’s amendment to new section 46AB is seeking to clarify that and that it is basically, “Well, no, the only responsibility that the CCO will have will be public transport.”

On new section 46B, which is a restriction on borrowing for the transport CCO, Minister, is the intention there to, effectively, protect—well, at the end of the day, ratepayers who will be footing the bill and the costs for this from any unmanaged financial risk that may arise as a result of a capacity to borrow? That, I think, would be very, very helpful.

I want, also, to turn to new section 47B, which is about the governing body and the local boards having to consider certain matters when exercising their powers. Now, I would like the Minister to perhaps respond to this particular section, because this is the second part of the quinella in this part when it comes to Minister Bishop’s Amendment Paper 564. This is seeking to—basically, instead of what’s outlined there in existing section 47B, which says that when the governing body or a local board exercises certain powers and things, they need to think about or have regard to freight through the area, frequently running public transport networks in the area. So it’s basically saying, as I understand it, those decision makers need to have regard to and to think about those sorts of things.

Now, what’s quite a significant change in the Minister’s Amendment Paper is actually—well, no, what needs to be inserted there in new section 47B is actually that when those powers are being performed, a local board—so not the governing body, but a local board—basically needs to go about those duties and responsibilities in a way “that does not obstruct regionally significant transport projects”. That is actually quite a significant change there, and I think—well, the responsible thing would be for the Opposition to be asking the Minister: why is there that quite significant change that he’s seeking to advance, given that that hasn’t been addressed at this stage?

17:52

Thanks very much, Madam Chair. I want to respond to some of Cameron Luxton’s statements. First and foremost, the Amendment Paper by Cameron Luxton is not an Amendment Paper on behalf of the broader Government. The points that I have noted previously are that the legislation applies similar requirements that are already in place in other legislation that exists today, and while there are mechanisms within that clause that allow for Māori to be able to input and provide advisory and opinions and context through, the definitive and the final decision making lies with the Auckland Regional Transport Committee, who are jointly appointed by both the mayor and the Minister. That is the decision-making body which makes decisions in regards to the way in which this entity will operate. The interpretation or implication that this is somewhat introducing terms such as “co-governance” and that are simply not the reality reflected in the requirements, which are consistent with other aspects of legislation.

17:53

Thank you, Madam Chair. I want to move on and ask the Minister a couple of questions around new section 48, and this is under “Miscellaneous provisions” regarding the Auckland roading classification framework. I have a couple of questions for the Minister. Regarding 48(2), and especially some of the classifications regarding arterial roads for traffic, freight, public transport, or a local road, etc., would this have potentially any implications for the type of vehicles that will be able to travel in certain roads? For example, when we’re looking at “a road that collects and distributes traffic to and from properties within a specific area”, does that mean that certain vehicles, particularly freight—there will be a limitation on what can travel? Again, this comes down to the fact that we do see in Tāmaki, in particular, a lot of, I guess, heavy vehicles travelling down residential roads. I was just curious if that’s something that the Minister has considered.

I’m also curious to know when we’re looking at new section 48(e) and (f)—noting that I was not part of the Transport and Infrastructure Committee when this was heard and I have read some of the departmental reports, but I’m interested to know why other really key stadiums, for example, Mount Smart, to give an example, weren’t also considered as part of that, and why Eden Park was specifically and explicitly stated in this. I’m going to actually just leave it at those two questions for now.

17:55

I move, That debate on this question now close.

I think we are getting close to the end of this part anyway—Arena Williams.

Thank you, Madam Chair. I want to clarify the Minister of Local Government’s answer around Amendment Paper 564 in the name of his colleague Chris Bishop. Is he saying that the operation of new section 46AB in its new form, that Auckland Council mustn’t undertake the transport activities that it set out in its long-term plan (LTP)—when he says that there isn’t an allowance for the Minister, does that mean that anything in the LTP, because that’s the document that delegates to the council-controlled organisation its functions, is something that is then prohibited for the council to be able to undertake?

I ask that because we know now that the Minister needs to agree to that power; and so is it the case that if anything’s in the LTP and delegated by Auckland Council, even if the Minister hasn’t agreed to it, that council mustn’t undertake that function? The LTP isn’t just a document that Auckland Council can change; it’s a document that has to be consulted upon and is well signposted for the Auckland public, so it can exist for years before the Minister could get to the point of being asked for a yes or no answer. Is it the case that then there is a prohibition on Auckland Council to undertake those things which are set out in that?

I also want him to just—hopefully—explain the local board now being prohibited from making decisions which could be impacting city-wide routes, particularly for freight. Freight was something that was enshrined in his new section 48(2)(ii), and that is significant, but it is also important that those local boards have some say over that. The new provision for this is that decisions that are made at local board level would be delegated to do it from Auckland Council, specifically for the purpose of having a local flavour to them. Local boards now don’t have a mechanism for consulting or inputting into the decisions of the new public transport CCO. Therefore, what is the ability of local boards to have a say around those larger roads and the provisions for them that are made when they go through the area of a local board?

It seems that local boards now have far fewer powers than they did under the old system of delegation by their governing body, to impact on what kind of road usage can be applied to roads, given that they don’t have the statutory functions of inputting into transport plans that Auckland Transport would have made, where it would have been relevant for not only arterial routes but local roads to be used by freight and heavy trucks. The Minister will recall that earlier in this committee of the whole House stage, I asked questions not only about the movement of freight but also about the parking of trucks and the levying of infringement. How is it, Minister, that in clause 14 of Amendment Paper 564, new section 47B, local boards have any ability to impact upon those rules if they have to take into account the regional framework that is enshrined in the primary legislation?

The time has come for me to leave the Chair for the dinner break. The House will resume in committee at 7.30 p.m.

Good evening, members. When we stopped for dinner, the House was in committee for the Local Government (Auckland Council) (Transport Governance) Amendment Bill. The question is that Part 2 stand part.

19:30

Thank you very much, Mr Chair. I’m just going to answer a few questions that were raised before the dinner break.

First and foremost, there was a question in regards to the Government’s Amendment Paper 564, and particularly around the purpose of that. The Government’s Amendment Paper introduces a safeguard. If the governing body believes that a local board decision obstructs a regional project or service, it introduces a dispute resolution process modelled on that already contained in the Local Government (Auckland Council) Act.

Arena Williams asked a question in regards to “Why should Auckland Council be able to perform powers delegated?” Well, retaining the powers to perform or exercise a specific power that is delegated is standard for local government delegations in the Local Government Act 2002. Auckland Council are responsible for any powers delegated.

Tangi Utikere asked a question around Amendment Paper 564—the removal of a clause under new section 46AB(a). The removal of this new section 46AB(a) is to remove an inconsistency between the provision and the power for Auckland Council to perform functions it delegates to the transport council-controlled organisation (CCO) under new section 46.

Tangi Utikere also asked a question in regards to new section 46B, inserted by clause 14. This clause carries over from the previous restriction of CCO borrowings in the Local Government (Auckland Council) Act. It helps with the financial management factors related to the CCO and also reflects the accountabilities of Auckland Council.

19:31

Meitaki maata, Mr Chair. Thank you to the Minister of Local Government, in the chair, for those responses. I want to move now to what is new section 48A, under clause 14. This is about the review of the performance of the transport functions. Now, this is a significant change for Auckland in terms of who will be responsible for aspects of transportation. Public transport will sit with the new transport council-controlled organisation (CCO), whereas local boards take up a particular responsibility in other areas.

When it comes to this particular clause, this is, effectively, a review clause that’s been inserted that kicks in after five years. I’m interested in a couple of things: whether the Minister thinks that the five years is appropriate as a time frame. We’re talking about progress on a 30-year transportation plan that has a longer-term approach, we also know that the life of terms of local government are around three by three by three-year chunks, so five years, effectively, might see through to the end of the next term of the local government context there. When we look at what is actually expected under that review, it only talks about the performance of the powers, functions, and responsibilities under this part for the CCO and for the council. It’s important that it’s not just the governing body but it is also the local boards that are included here as well.

Does the Minister see any gaps in that review opportunity? I know that, under subclause (2), it talks about the council being able to consult any person that they consider appropriate in undertaking that review and that the review itself needs to be presented to the Parliament by way of the Minister of Transport. Can the Minister confirm that the review report to the Parliament will provide a checkpoint on whether these forms of reform are delivering the intended outcomes that he and his predecessors have been referring to there?

It’s not quite clear in the bill itself, but will the review consider things like the effectiveness of the governance arrangements? Will it consider the effectiveness of the way in which the transport services have been delivered? I’m not just referring to the CCO, because that’s purely going to have a focus on public transport, but also the public confidence that may or may not exist in the entities in terms of what it is that they’re going to do. It’s not uncommon—from time to time, there are aspects in legislation that relate to a review process—but this is very, very discreet in terms of a review of Auckland Council’s service delivery approach and the CCOs. Does the Minister see any particular gaps as part of that review process?

Maybe the Minister doesn’t see any gaps as part of that particular process; we’re not quite sure. We haven’t talked about the review option as of yet in this particular committee. Maybe we need to think about the different time options that could be available to undertake a review. Earlier, I touched on the three by three by three. Is it the expectation that the five-year review period—I mean, it won’t necessarily align with the parliamentary term, and I guess that’s not so much of a big deal, because the report will land in front of the Parliament when it does. If we’re talking about decision makers who might be on a local board and there may have been an election, and the five years kicks in just after that, and you’ve got new individuals sitting around the table, considering what works and what doesn’t work, why is it that the five years might actually be the particular figure that the Minister is or isn’t comfortable about? Given that we didn’t get a response on that, we can only really infer what some of these reasons might be.

The interesting thing is that the way in which local boards undertake different responsibilities—and this was the point, I think, that my colleague Arena Williams was making to the Minister: there is an opportunity here for there to be quite a lot of discretion amongst the local boards. She used the example of heavy truck movements in particular parts of South Auckland, where there might be a number of local boards that make a determination based on what the local view or perspective is, what the local pressures are, and what the local resourcing opportunities might be at a particular time, in a particular place. It might be that, actually, there are different—and it’s likely to be—transport decisions taken by different local boards. Actually, it’s highly probable that that would be the case, because, otherwise, you wouldn’t devolve the responsibility to local boards. How is there going to be some consistency around the way in which this actually functions? Again, when we’re talking about 48A, it identifies the Auckland Council. It says here “(including the governing body and local boards):”. Now, there will be some aspects in this suite of options—

A lot of decision makers.

—where a lot of decision makers—and, actually, that’s a very good point, Mr Halbert, because local boards, there are many of them through Auckland. Again, we don’t have them anywhere else in the country. It’s a bespoke form of local government sort of arrangements for Tāmaki-makau-rau. Is the five years still appropriate, and, if not, why not?

19:38

Thank you very much, Mr Chair. Yes, in regards to new section 48A, inserted by clause 14, on page 28 of the bill, the five-year term is appropriate for all of the new transport arrangements to be bedded in in Auckland. The transport council-controlled organisation’s (CCO’s) new role, the Auckland Transport committee structure, and the Auckland Council has a roading controlling authority for Auckland.

To Dr Lawrence Xu-Nan’s questions earlier, before the break, on consultation with migrant and Asian communities, new section 42D(2)(a), inserted by clause 14, on page 17 of the bill, outlines the mechanisms in regards to engaging with those who may be affected by the plan. In regards to the question by Tangi Utikere—“Why is new section 46A(1)(c) needed?”, in reference to page 43—Auckland Council’s ability to set disputes resolution procedures are intended to ensure the relationship between Auckland Council and its CCOs are clear from any issues that are resolved officially. The other questions I had already covered previously.

19:39

I move, That debate on this question now close.

The question is that the Minister’s amendments to Part 2 set out on Amendment Paper 564 be agreed to.

The question is that Cameron Luxton’s amendments to clause 14 set out on Amendment Paper 568 be agreed to.

19:41

Thank you, Mr Chair. The questions that I have are around the transitional arrangements, and the Transport and Infrastructure Committee has commented in its report—we’ve covered this in the second reading, so I won’t go too far into it, but one of the concerns that we did have was the ability of Auckland Council and Auckland Transport (AT) to deal with the transition of the staff that were involved. This was actually something that the Public Service Association also brought to the select committee’s attention in making sure that the transitional arrangements that were in place were comprehensive and would ensure a smooth process, because it’s at times like this that there can be some uncertainty around what might be happening and what the positions might be.

I think it’s fair to say that the committee had a degree of confidence with some of the comments that were made, but does the Minister have his own confidence in the abilities of Auckland Council and, indeed, AT to oversee or manage that transition process for staff? We’re talking about a change to the way in which transportation will be delivered in our country’s largest city, and ensuring that that transition is able to be done in a smooth way is really, really important. That’s the first question for the Minister.

The next one is around ensuring there is no gap in the accountability aspects for anyone who is making decisions, and it is important for us to identify what the current approach is. Those decisions for transportation are largely taken by unelected members. This bill seeks to significantly change that, to put the accountability back with those who are publicly elected to these particular roles, so how will the Government ensure that there is no gap in accountability as the process of transition gets under way?

I’m not too sure how much time I’ve got left. The clock says that it’s zero, but I’m sure I haven’t—

Sorry, no—you can carry on. We’ll say that you’ve got three minutes.

Have I got three minutes? Thank you, sir. This sort of confirmation of accountability for employees is really important, and ensuring that the organisation is in a really robust way so that they’re able to look after the staff—which was of real concern—is part of the reason why these transitional arrangements have been alluded to and have been put in place.

Now, the schedules that have been identified as part of this outline a number of different aspects in terms of the process that will need to be followed. It’s not my intention to go through all of that, but ensuring that at the end of the process of transition the staff are protected and there’s confidence from the Government that the entities involved will be able to manage that transition smoothly and in a way that is appropriate is, I think, important for some assurance to be given.

19:45

Yes, I do have confidence that they are going to work their way through this process in an appropriate manner when dealing with the HR matters. Actually, Auckland Council has already released a transition plan in regard to how it’s going to manage the risks related to this mechanism, so that will cover the questions in regard to the schedules.

The question is that the Minister’s amendment to Part 3 set out on Amendment Paper 564 be agreed to.

The question is that the Minister’s amendments to Schedule 1 set out on Amendment Paper 564 be agreed to.

The question is that the Minister’s amendments to Schedule 3 set out on Amendment Paper 564 be agreed to.

19:46

Thank you again, Mr Chair. Well, we’re finally getting to the end of this particular debate, and it’s not my intention to ask the Minister any questions about the appropriateness of the title. Some other colleagues may have some other views, perhaps—particularly colleagues who are based in Tāmaki-makau-rau might have some views as to what might be appropriate, but I’ll leave that for them if they choose to do that.

My question, though, is really around clause 2. This is the commencement clause and, put quite simply, the Minister will be aware that what’s proposed there is not an uncommon approach when it comes to when the Act, once it is given Royal assent, should come into play. What is proposed here is that it would come into effect or come into force on the day after Royal assent is given. Now, given that there are a number of transitional arrangements and a number of changes that need to take place, I guess what I’m seeking from the Minister is whether he is comfortable—I guess it’s a guarantee, really—that the commencement date as indicated here provides sufficient certainty not just for Auckland Council but also for the current Auckland Transport arrangement to begin the transition planning immediately.

What I think is really interesting is that, actually, with the Auckland Regional Transport Committee, there are already calls out there for members to join that committee before the Parliament has even kind of given its approval, so there are already in train some proposals or suggestions that are already under way. I guess the alternative, really, is only a particular calendar date, rather than anything else. It’s very straightforward, and the simple question is whether the Minister can give some confirmation that the commencement date outlined in clause 2 is such that it is sufficient for Auckland Council in terms of the transition, and also whether or not the Minister intends to outline how central government will support Auckland Council during this initial post - Royal assent set-up to ensure the continuity of transportation services. We are talking about decisions that are taken at a local level, but in terms of public transport provision, I also ask whether it is able to maintain some form of continuity.

19:49

Thank you very much, Mr Chair. Yes, I can provide that assurance. Both the Crown and Auckland Council have been working very closely together. It would be fair to say that there is significant appetite from Aucklanders to see the governance of transport-related matters being, in effect, returned back to those who are democratically accountable for transport, which is Auckland Council. The broader reform of this programme effects that change. It better aligns between Auckland Council and the Crown the way in which that entity is governed.

The timeline, really, is let’s get on with this. It’s going to be a significant win for Aucklanders and it’s great to be able to pass that through legislation and keep it moving tonight.

19:50

Thank you. I just note that the title, actually, of this bill talks about it being an Act of 2025 and we’re in 2026. It says that it’s going to commence the day after Royal assent, but, in fact, it’s set out as a bill from 2025, and so I’m wondering whether that’s an accident and it needs an amendment.

Yes, that is done by the Clerk, and that refers to when the bill was put through.

19:51

Thank you, Mr Chair. It’s my first opportunity to speak to this, but I will be brief. I think it is important that this piece of legislation moves beyond this House. There is a sense of urgency that Auckland does prioritise transport.

When I look at the title of this legislation before the committee and with the Minister today, the Local Government (Auckland Council) (Transport Governance) Amendment Bill, one of my biggest concerns is that over the last couple of years there have been major cuts to Auckland Transport, in particular. Up to $120 million, I understand, has been cut annually since the last Labour Government. That is not to be political tonight; that is to clearly say that while we can change legislation, the outcome of moving Aucklanders in and around our congested city doesn’t change without adequate investment.

In particular, I note that in this piece of legislation, it does bring some functions in-house to Auckland Council. I think there are benefits to that, but it does leave within the existing council-controlled organisation public transport only. We know in order to grow our city and to get on top of congestion, public transport has to be a major priority in that, and we haven’t seen good investment. In fact, we’ve gone backwards in investment in public transport in Auckland because of this Government. My suggested title here for the Minister is the “Local Government (Auckland Council) (Transport Governance) (Show me the Money, Minister) Amendment Bill”.

19:52

I move, That debate on this question now close.

19:55

Thank you, Mr Chair, and thank you to the members of the House for joining me for the committee of the whole House stage for the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, which I’ll refer to from here on as the supervisor and levy bill.

I’m honoured to be leading this supervisor and levy bill through the committee stage after the broad support it received at its second reading, and I look forward to hearing your views as we debate the bill. This bill will make a range of structural enhancements to the anti - money-laundering (AML) system. Firstly, it will streamline the AML supervision by moving to a single supervisor, the Department of Internal Affairs, from the current three supervisors. The DIA has vast experience in intelligence-led investigations, with a current track record in supervising casinos, money remitters, and other high-risk sectors.

Under a single supervisor, businesses will benefit from improved and more responsive guidance, and reduced cost and complexity where the risk is low. Businesses will be supported to apply risk-based compliance, lighter compliance when the risks are low, and more intense supervision for higher-risk sectors and situations. As our front line of defence, we want businesses more focused on compliance that identify suspicious activities to detect and deter potential crime, rather than spending time on low-risk transactions that do nothing to tackle crime.

Second, the bill introduces a new industry levy to improve the functioning of the anti - money laundering countering financial terrorism system. It is estimated that over $1.6 billion is laundered annually through New Zealand’s financial system, money that is tied to serious harm in our communities from drug trafficking, fraud, and organised crime that exploits vulnerable people. Industry is telling us they want better intelligence from Governments so that they can be more effective in helping tackle financial crime. Government agencies have not been resourced well enough to address the requests from industry to improve the system, and this change forms part of these reforms.

Finally, the third component of this bill updates some flexible regulation that can result in ineffective use of our resources and undetected crime. Organised crime syndicates are becoming increasingly innovative, using new methods and emerging technologies to outpace regulation. This bill will allow agencies to make regulatory changes through alternative forms of secondary legislation, such as rules and notices.

Point of order, Mr Chair.

Sorry, Minister. I believe the point of order will be in relation to which bill we’re talking about. Now, there are two very similar bills, Minister. This is the one we’re on: Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. That’s the next—

My apologies. I was told that this was the first bill that we were debating.

It’s a very understandable mistake; they’re very similar.

Speaking to the point of order, Mr Chair. If the Minister has skipped over a bill, she’s fully entitled to do that; she just can’t go back to it. It would appear that she’s chosen to miss an item off the Order Paper.

No, she hasn’t skipped over a bill. I read out this bill. She is speaking to another bill and I’m now bringing her back to the bill that she needs to be speaking about, but nice observation there. Just to confirm, we’re now on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and the bill that the Minister is discussing will be the next bill. The Minister can stand and speak, as long as she’s in the bill, so there we go.

Thank you, Mr Chair. I may start with a new introduction. This time, I’m going to speak to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and I’m very pleased to be leading this particular bill through the committee stage. I’m pleased to say that there was broad support across the House for this bill at its second reading and I look forward to hearing the views of the other parties as we debate the bill. This bill will make a range of targeted enhancements to the anti - money-laundering (AML) regime.

It focuses on amendments that make continuous improvements and repairs without major policy or system design changes or significant financial implications, ensuring that the anti - money-laundering and countering financing of terrorism legislation remains fit for purpose. This bill carefully balances the objective of delivering regulatory relief for businesses and people in New Zealand with the effectiveness of the system.

One of the changes in the bill that will make the most difference is relaxing the requirements for businesses to conduct customer due diligence for low-risk trusts. Currently, businesses must apply the same enhanced customer due diligence requirements to all trusts regardless of their risk, even though in New Zealand there are many low-risk trusts like small family trusts. This bill will allow for the application of customer due diligence measures for low-risk trusts that are more proportionate to the risks that they represent. We are also removing the requirement for people to submit a border cash report if they have received cash from someone who physically moved the cash into New Zealand, as this is needless duplication. This change will streamline the process.

This bill is a practical demonstration of the Government’s focus on regulatory stewardship. We must progress this bill as it will help to ensure New Zealand’s regulatory systems remain up to date, fit for purpose, and beneficial for businesses and the public. I welcome debate on this particular bill, but I will also mention that there is an Amendment Paper on the table, Amendment Paper 572. There will also be an Amendment Paper on the following bill—that will be Amendment Paper 573. Effectively, what I’m looking to do is delete clauses 23, 24, and 28 from this particular bill and then insert them into the bill that we are going to debate next. It’s not gone; it’s just removed from this bill and being placed into the next—that’s what those two Amendment Papers are about. I look forward to the upcoming discussion.

20:02

Thank you, Mr Chair, and thanks to the Associate Minister of Justice for the fulsome introduction. I think these bills do have quite similar names, and, obviously, the two amendments are also working between these two bills. We did have them read as one during the last reading, so it is understandable that there is some overlap between the two of them.

I did want to go back to the original legislation, the 2009 Act, and just start at the beginning, as it were, with clause 3, which refers back to that principal Act. I’ve got a copy of that here, and I wanted to just check with the Minister—she’s made a few comments around what this bill will do, and I wanted to check with her that it is her intention, through the passage of this legislation, to make it more difficult and the systems to be more robust in order to prevent money-laundering in New Zealand. The reason that I ask that question is, when you look at—it happens to be clause 3 of the principal Act as well—the purpose of the primary bill which is being amended, and there isn’t a subsequent amendment to the purpose, as I understand, in this bill; the main purpose of the primary piece of legislation is “to detect and deter money laundering and the financing of terrorism; and (b) to maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force; and (c) to contribute to the public confidence in the system.” It’s also got subclause (2) there that I won’t read out.

The Minister, in her opening comments, made comments regarding the proportionality of reporting requirements, indicating that some—and I’m interested to know if this was her intention—of the reporting that is required at the moment may be, and this is my interpretation of what she said, more arduous or more stringent than necessary in terms of the use of the word “proportionate”. I want to know: is it her intention to water down this purpose in the primary legislation at all, or not?

The other thing that the Minister mentioned was the need for reports and the fact that this bill will remove a need for a report to be done in certain instances. I wanted to check with her, in terms of the primary piece of legislation which I’m referring to in clause 3: will that support these goals, which are, I think we can agree across the House, important? It’s important that we have public confidence in the financial system; it’s important that we detect and deter money laundering; and, of course, financing terrorism is obviously something that we have to be very, very concerned about.

I just wanted to allow the Minister to answer those questions, especially with those initial opening comments, which did indicate, perhaps, a lessening of the stringent nature of this regime. In terms of my opening question, I just wondered if the Minister may be able to respond to that.

20:05

Thank you, Mr Chair, and I thank the member for asking for some clarity around what these regime changes will actually do. Quite rightfully, you’ve asked, “Are we lessening or weakening some of these holds?” My answer, hand on heart to the member, is no, we’re not. What we’re looking to do is ensure that when we go after the dirty money, so to speak, that we’re going after it in the right place—that we’re not targeting every single person who is moving money as that potential organised crime prospect.

To give you an example of that is looking at the trusts, for example. We do have, I believe, around 700,000 trusts in New Zealand, and—I might have this transposed—400,000 are high risk and 300,000 are low risk. It’s making those low-risk trusts—basically, your standard family trust—to not have to go through the same rigmarole that some of those higher-risk trusts do. It’s allowing the agencies to be able to determine what is their risk factor.

Another example would be, say, buying and selling a house. You’ll be interacting with a real estate agent, with a lawyer, and with a bank, and at the moment, all three of those entities are asking you to provide the same information. We’re basically saying that if it’s the one transaction, then let’s have one entity get all of that information and confer to the rest that it’s all OK because they have already received that information. This will cut costs. It will enable people to just be able to move on without having to jump through the hoops. In that respect, there is some relaxing, but it’s not relaxing on behalf of organised crime or our ability to chase organised crime. We very much will continue to go after the dirty money and protect as many people as we can within New Zealand.

20:07

Thank you, Mr Chair. Just moving deliberately through the legislation, and just looking at clause 4. It inserts a new definition of “beneficial owner”, and on my reading of it, paragraph (a) is the existing definition—so there’s no change there—but paragraph (b) is, in fact, new. I’d invite the Minister to explain why the additional paragraph (b) is needed, because it would seem that paragraph (a) is fairly broad. The one that does the work is a beneficial owner, so the definition of “beneficial owner” is a person—individual—“who has effective control of the customer or person on whose behalf a transaction is conducted”. That’s a broad test but it’s a clear one, and it’s not any particular number; it’s just “effective control”.

In paragraph (b), we’ve got, essentially, a repetition of that: “and (b) includes an individual (i) with ultimate ownership or control of the customer … or”—and then you’ve got this really odd clause which just seems to muddy the water—“(ii) who is a customer of a customer, and on whose behalf a transaction is conducted, but only if the individual meets the requirements set out in subparagraph (i)”, so it goes up again to ultimate ownership. It seems to be a really convoluted way of saying “effective control”, because it doesn’t matter if you’re a customer of a customer or not if you’ve also got to have ultimate ownership or control, which is effective control. I’m not sure if there’s a case out there which triggered this or there’s some notional gap in the law, but I must say, I find it really frustrating when the law seems to just populate itself—it breeds, and words just multiply before our eyes. So I’d be really interested to know what the thinking behind this one is.

Also, just whilst we’re here, I’m interested to know, because new paragraph (a)(ii) talks about “prescribed thresholds”—we see that a lot in company law, that if you’ve got 25 percent of a company, you’ve got certain restrictions; 50 percent, other takeover rules apply; and once it gets to, sort of, 95 percent, you get a compulsory takeover framework; and so on and so forth. I get all that. I’m interested to know what the prescribed threshold is, because I’m presuming that that’s in regulations already. Control is assumed when you own such and such of a company. That may change depending on how large the company is, but I’d be interested in that.

My real point is simply that one around: why do we need a rule about “a customer of a customer”, which then also includes “ultimate ownership or control”, when you’ve got a very effective test that simply talks about “effective control of a customer or person on whose behalf a transaction is conducted”? I’d be interested to know what’s the gap, what’s the fix—what’s the mischief?

20:11

Thank you, Mr Chair. I think the member was referring to section 5, not section 4, so I’m going to answer it—I’m pretty sure it’s section 5. Clause 4, amending section 5?

Oh, yes. Clause 4 of the bill, section 5.

OK, thank you. Clause 4, “Section 5 amended”, is amending the principal Act to update the definition of a “beneficial owner”, update the definition of “designated non-financial business or profession”, replace the definition of “trust and company service provider”, and insert a new definition of “money or value transfer service”.

The reason why we’re making these changes about the “customer of a customer” is because the statutory review found that there was an issue that the definition of beneficial owner in the Act is capturing some people that it shouldn’t, and that referred to the customers of a customer. It also identified gaps in the definition, in that it did not include a person with ultimate ownership or control. The definition was initially amended in the regulations, and this amendment brings those definitions into the Act. The new definition will include “a person with ultimate ownership or control” and exclude “the customers of a customer” unless they’re the ones with the ultimate ownership. Ultimately, this amendment provides clarity and relief by ensuring businesses do not have to undertake the Act’s obligations on customers of customers.

In relation to the member’s second point, if the member could, please—he said “(a)(ii)”, but I don’t understand where that is. If the member was able to point me to—

20:12

I can do that, if the Chair will allow me. The prescribed threshold is referred to in clause 4 of the bill, “Section 5 amended”: “beneficial owner” means an individual who “(i) has effective control … or … (ii) owns a prescribed threshold”. My question was: what is the prescribed threshold of a company?

Just while the Minister’s taking advice—Dr Lawrence Xu-Nan.

20:13

Thank you, Mr Chair. Thank you for joining us, Minister. I have two broader policy-based questions also in relation to what we’re seeing within the regulatory impact statement as well. I think the first question is: when this bill was first introduced, and then when the second bill was introduced, it was supposed to be one part of four, in terms of some of the changes. I just want to check in terms of how this one’s going to be tied into the broader things, when some of these are now—one and two, once past third reading, will be in effect, and then, you know, just checking with the Minister if there’s any intention around when the subsequent bill is going to be introduced.

The second question I have is: a lot of the things we’re seeing here are the result of the Financial Action Task Force recommendations, as well. I’m noting in the regulatory impact statement that it mentions there were some limitations around the ability to consult because of the mutual analysis between the Financial Action Task Force and, also, in terms of the bill being introduced with a 2028 limit. I just want to check with the Minister, again, with some of the things we’re seeing here, how that would then be implemented and, in terms of that potential, whether that’s a review in 2028 again by the Financial Action Task Force. If you wouldn’t mind just elaborating on what that interaction is going to be like.

On to the bill: I’m actually going to talk about clause 4, “Section 5 amended”, and subclause (3). This is the definition of “trust and company service provider”. Again, noting what the Hon Dr Duncan Webb mentioned before, what we’re seeing with new paragraph (a) is that (a) is the existing definition, but new paragraph (b) is what the Minister mentioned is the new thing. I totally understand in terms of, let’s say, if you have a single transaction and you have three people asking the same thing—it’s easier if it’s just one person. But, in this particular case, when we’re looking at the definition of “designated non-financial business or profession carried out by the financial institution”, I’m interested to know, if it’s one point of contact, who, then, out of the three—in the example that Minister gave—would then be responsible for getting that, or is it going to be transaction based? If the client is, in this case, having that single transaction, that means the client will provide the same document to all three, so where would the onus for that be? I don’t know if I’m making any sense, but if the Minister understands it, that would be great.

I guess the context for that is: I remember when the Anti-Money Laundering and Countering Financing of Terrorism Act got a major update in 2018, and one of my previous jobs, when it comes to working in international education, was helping students open a bank account. One of the challenges we had over there was the requirements that were needed for students, as a client, trying to go to a bank and open a bank account, because there was a potential worry that international students were using the same system to launder money from various locations. I want to check, in this case, with a single source, if it’s a single transaction and now we’re reducing, for example, from three to one, would the same, I guess, compliance lens by all of these agencies be able to be placed on the client to make sure that there’s nothing going on in the background? Again, if I’m making sense—those are my questions for the time being.

20:17

Thank you, Mr Chair. I’ll start by answering the Hon Duncan Webb’s question. The prescribed threshold set out in section 5 of the anti - money-laundering (AML) definitions—it says “R5 of AML definitions regulations 2011”—is greater than 25 percent, if that makes sense.

Moving on to the member from the Green Party’s questions: the first question the member asked was around the four AML bills that we have going through. The first one’s already done; we’ve passed that. This one and the one that we’re debating directly after this are two more, and then the fourth one will be under way this year. It won’t be completed this term, but the most important part of what we need to do to meet our Financial Action Task Force obligations for the evaluation, which starts to take place in 2027 and finishes in 2028, is that we need this to go through in order to be able to say to them that we have addressed the issues they raised at their last mutual evaluation in 2021 and that this is what we have put into place.

They may turn around and say, “Well, you haven’t done it fast enough.” or they might say, “Actually, this looks really good. We want to see what is occurring as a result of that.” By the time we get to that evaluation, we would be 12 months, possibly even 18 months, into a regime to be able to actually show some outcomes for the changes that we’ve had. We won’t know until we actually get to that evaluation point. That’s one of the reasons why we are putting through four AML bills, and three of them in this term: so that we can look to meet those Financial Action Task Force obligations, which would benefit everybody in New Zealand—including every political party, as well. I’m grateful for that cross-party support there.

The member asked me about who does what when I gave my examples. You’ve got three entities collecting the information; who’s going to be doing that? One of the main confusing aspects about AML is that people don’t know who has to do what, and this is partially because we’ve had three supervisors who couldn’t agree on the type of information that needed to go out to the different regulators or agencies.

From 1 July, we will have one agency. It will be up to them to give advice to all the different users of the AML to tell them what their obligations are and help them to work within the new regime that we’re putting in place. If I were to say, today, that it’s the banks that are going to do it and not the real estate agents, well, there may be an area where the supervisor might say, “Actually, we may need someone to capture this, and someone else to capture that.”; or it may be fine for one entity to capture the lot, but they need to work it through and, more importantly, they need to work it through with industry.

This is where the national strategy comes in as being so important—and that’s in the following bill—because we need to understand from industry what it is that they might have an issue with or what it is that is being duplicated that shouldn’t be, so that we make sure that our response doesn’t create more issues for them and actually just gets to the crux of the problem that we’re trying to address, which is the money-laundering and the organised crime within New Zealand. I hope that one made sense.

20:21

Thank you, Mr Chair, and thank you to the Associate Minister of Justice for her engagement and for her answers to members’ questions and to my previous question. As the Minister has alluded to, this has received support throughout the House. It’s good to have that assurance around the stringent requirements and the fact that we’re not diverting from the purpose of preventing money-laundering, or weakening or watering that down. Thank you for that reassurance.

I just wanted to, as colleagues have also been doing, stick to the initial clauses that we’re looking at and stick to the definitional clauses and the interpretation that had been changed. We’ve had a couple of questions on that, but I wanted to bring up a few questions which haven’t been covered yet. There are a few of these, and they’re small things, but I might just go through them, and then if the Minister wishes to respond to them or get some advice, that would be excellent.

The first one, if we’re looking at the clauses, is clause 4(2)(b). In this particular change, there’s a change from “engaging in or giving instructions” to “carrying out, preparing to carry out, or giving instructions”. I just wanted to query with the Minister—and apologies, I wasn’t on the Justice Committee when this was being debated, so it may be that there’s an obvious answer—what the effective intention from that change was. It appears to be a little bit similar but also has the intention of, I think, “preparing to carry out”, as well, which is maybe the fundamental change. I just wanted to clarify with the Minister if that was her intention in that clause.

The next question I have, in relation to the definitional section, is that because the select committee, I understand, has deleted the clauses in relation to a specific definition of “life insurer”. I just wanted to understand, following that change, if the Minister agrees to that change from the select committee, and where those obligations would otherwise be reflected in the bill.

The third definitional question that I wish to ask is in relation to, I think, clause 4(4)(a)(ii), and that’s just under that “life insurer” section in the bill. It specifies here that payments can be in “a corresponding sum in cash or in other physical forms.” I’ve looked at the primary piece of legislation in relation to whether that is, in fact, defined in the definition section of the principal bill. I couldn’t see that there. Therefore, I just wanted to know from the Minister what other physical forms of payments were envisaged. Obviously, we can think of a few that might come to the top of our head—so, for example, gold would be one, I’m interested to know whether that is intended in that physical form; cryptocurrency might be another form. That is something that I just wanted some clarity on in terms of the nature of those types of transactions as to what that might be applied to.

I did have some other questions that have been covered by Dr Duncan Webb and Lawrence Xu-Nan—I won’t repeat those. Those are my questions in relation to that definitional section.

20:25

Thank you, Mr Chair. Yes, crypto, gold, precious metals are all to be in there, as well.

Just looking at what the member had mentioned about clause 4(2), updates to the “definition of designated non-financial business or profession”, and the member was talking about the carry-on provision. The businesses find that the definition of a “designated non-financial business or profession” that is currently in the Act is quite unclear for them. The amendment will modify the definition to clarify that anti - money-laundering obligations will also apply in those situations when a designated non-financial business or profession assists its client but has no direct involvement. The two specific situations that the amended definition captures are to do with managing client funds and preparing to carry out activities.

Managing client funds is an activity that carries anti - money-laundering obligations, except where the client funds are sums paid as fees for services provided by the designated non-financial business or profession, and the updated definition also makes it clear that preparing to carry out certain activities is itself considering an activity and carries the corresponding anti - money-laundering obligations.

When it comes to clause 4(4), providing a new definition of a “life insurer”, this amendment was intended to just address a gap that was in the Act. The upcoming changes in the next bill will mean that it’s no longer required. My officials recommended, through the departmental report, that it should be removed, and the Justice Committee agreed to that removal, but it will be removed in the next bill.

20:27

Thank you, Mr Chair, and thank you to the Associate Minister of Justice for her engagement thus far. I also had a couple of questions in relation to the interpretation section. Just as a supplementary to Dr Duncan Webb’s comment on “beneficial owner”, I do wonder whether there is the possibility for an unintended consequence in terms of the addition to that definition. As Dr Webb pointed out, the initial definition in current legislation is quite broad, and with the specificity in amended section 5(1), amended by clause 4, both (i) and (ii), it just seems that there might be a potential risk that that will be seen to be the stretch of the definition. For example, a beneficial owner could be a customer of a customer, but it doesn’t look at whether it’s possible for that chain to be longer. I just want the Minister’s view about whether there’s potential for the addition of that section not to provide more specificity but, actually, to limit the scope of what “effective control” could be.

The other issue that Dr Webb raised was on the prescribed threshold. He asked about what that was. My question is about where that threshold should be and whether the Minister considered that it may be more appropriate for that threshold to be in primary legislation, as opposed to secondary legislation.

My third question is in relation to clause 4(3). This is the one that replaces the definition of “trust and company service provider”. It also uses part of the current definition and adds on a new paragraph (b). My question to the Minister is about the effect of excluding a person that is a financial institution in those additional circumstances, and the rationale for that.

My fourth question is in relation to the definition of “money or value transfer service”. Clause 4(4)(a)(i) says, “accepts, or is involved in the acceptance of, funds or value”. My question is about the broad framing of using the words “or is involved in the acceptance of”. Is there a risk that that language is too broad, and did the Minister consider either a more defined scope of that to ensure that individuals who shouldn’t be caught in that transfer aren’t caught and who might have a very peripheral role but may still be involved in the acceptance?

20:30

Thank you, Mr Chair. While we’re waiting for the Associate Minister of Justice to get some advice on the previous questions, I do want to move on to—we’re looking at some changes from clauses 6 to 8, particularly when it comes to the replacement of “customer” with “person”. Noting the definition of “customer” within the anti - money-laundering and countering financing of terrorism (AML/CFT) legislation, particularly in section 5 of the principal Act, I want to check: in general, “customer” is referring to a physical person in most cases, but “person”, for example, could include a legal entity? Noting that clauses 6, 7, and 8 amend sections 14, 18, and 22, I want to check with the Minister on what are the potential implications of changing “customer” to “person”, and “person” being interpreted as a legal person—ergo, potentially a company. Would that affect how we interpret that particular clause overall? Also, in the same way that we’re changing from “customer” to “person”, yet I don’t see the cross-heading being changed. What is the implication, then, of not having the cross-heading updated to say “customer or person”, regarding any of those sections as well?

20:31

Thank you, Mr Chair. Just in response to the member Dr Lawrence Xu-Nan as to why are we replacing the word “customer” with “person” in the sections of the Act dealing with customer due diligence requirements. Why is it not appropriate to use “customer”? The word “customer” is defined in section 5 of the Act as “(b)(ii) a person conducting or seeking to conduct an occasional transaction or activity”. Customer due diligence requirements refer to a customer seeking to conduct an occasional transaction or activity—well, this creates a circular and confusing requirement as a person seeking to conduct an occasional transaction is already a customer.

20:32

Thank you, Mr Chair. Keen to just ask a couple of questions of the Minister in the chair, Matt Doocey. The first relates to the amended section 5(1), inserted by clause 4, in particular clause 4(4)(a)(ii) of that. It’s been touched on, but I want to raise a different matter, particularly the section that talks about a service that “pays, or arranges for the payment of, a corresponding sum in cash”—this is the definition of “money or value transfer service”.

Now, I’m just concerned about the word “corresponding” in there, because if I give you $1,000 worth of gold and then you transfer to someone else $1,000, that is a corresponding amount of value—that’s what corresponding means. But, in fact, that’s not how money-laundering works. The way money-laundering works in nefarious places is that you give me $1,000 worth of gold and I give the person you nominate $800 worth of cash. In fact, by definition, the number doesn’t correspond because I skim my money-laundering commission off the top, so “corresponding” is the wrong word. Now, there might be some relationship between the amount of gold I give you and the amount of cash you pay to a third party, but it’s not a corresponding amount. I would hate to see someone get off because they say, “Oh, no, I wasn’t doing money value transfers services because I took a 50 percent commission and it didn’t correspond with it.” That’s the first point—a really narrow point about why are you using the word “corresponding” when money-laundering numbers don’t correspond with each other. They’re always taxing it on the way through.

The second one is new section 24(4), inserted by clause 9. This is “customer due diligence”, and the Minister in charge of the bill has made clear that she wants to make it easier for people who are low risk. But my concern is that this clause essentially enables a person to be low risk if they think they’re low risk, because what it says is: “[the] reporting entity is not required to comply with subsection (1)(b)”—which is the upgraded disclosure requirements—“if the customer or person is a trust described in [such and such] section and the reporting entity is satisfied”—the “reporting entity” is the person who’s regulated by this legislation—“that any risks have been mitigated by conducting [certain due diligence]”. So the test is not whether there is a risk; it’s whether the reporting entity thinks there’s a risk. It’s not objective at all. It’s entirely subjective, and it’s subjective depending on the mind of the person who’s subject to these regulations.

If you think—mistakenly or unreasonably or stupidly—that any risks have been mitigated by standard customer due diligence, then you don’t have to do this next enhanced step. Now, that can’t be right because there are plenty of stupid entities out there that will make mistakes about that. The test should be an objective one, so why has the Minister introduced a subjective test into something that is as black and white as money-laundering?

20:36

Thank you, Mr Chair. I’ve got some questions that follow on from the sections that Dr Duncan Webb was referring to. The Economic Development, Science and Innovation Committee, in this case, has decided to delete the originally proposed clause in relation to “politically exposed person”; however, no need to panic, as that is retained in the existing piece of legislation under section 26. The question I had was—and it may be a similar issue to the one that the Associate Minister of Justice mentioned before, that some of that is going to be included in a new piece of legislation, but if the Minister in the chair, Matt Doocey, could elucidate on whether the Minister agrees with that or not, that would be helpful.

I do have some questions in relation to the following subclauses. I believe that it might be subclauses 10(2) and (3), which essentially talk about changing the wording from “established” and “conducted” to “establishes” and “conducts”. That indicates a move to look towards something that is actively happening as opposed to something which has happened in the past. I wanted to understand that in terms of the nature of the bill and, obviously, in wanting to understand, if there’s any retrospective element to the bill, why that particular language has been chosen.

The next two points I want to make are more substantive to the purpose of the bill—sorry, I did have a question in relation to clause 10(1), and it is an important one because in clause 10(1), it amends section 26(1): after “reasonable steps”, “according to the level of risk involved” is added. That has been added by the select committee, but it does have the effect of probably slightly watering down the impact of section 26(1). Rather than just having “reasonable steps”, it’s “according to the level of risk involved”. So “reasonable steps according to the level of risk involved” is obviously a little bit weaker than “reasonable steps” in and of itself. The Minister has said that the intention isn’t to water that down, and so I just wanted to probe that further with that question.

The second question I had is in relation to clause 11 and this is along similar lines to my previous point. In clause 11, there is a proposal to look at the primary section 29(2)(c) and to delete “and effective”. Essentially, at the moment, we have a requirement that—I’ve got the primary Act here—“the anti - money-laundering and countering financing of terrorism controls to ascertain that those controls are adequate and effective”; this bill deletes “effective”. So I would really like to know why “effective” is being deleted, because it does strengthen the requirements of this bill. In fact, does the Minister agree with that, given the comments that were made earlier about the fact that, obviously, we want a proportionate bill? We are supporting this bill, we want it to be a good piece of legislation, but it does appear that that’s been weakened.

I think especially those last two questions in relation to clauses 10(1) and 11 are quite important to the purpose and the functionality of making sure that this is still consistent with the purpose of the primary piece of legislation. I’d be grateful if the Minister could address those.

20:40

Thank you, Mr Chair. I just thought I’d gather up a few questions there. There was a question around thresholds. I’ve been advised that the threshold in place is 25 percent in 2011, amended to be more than 25 percent in 2013. Not identified as problematic in the statutory reviews—they haven’t looked to change. I’m comfortable that this remains in regulations.

The question was asked about why other enhanced customer due diligence checks are still required for low-risk trusts. Low risk is not the same as no risk. Completely removing the requirement for enhanced customer due diligence for trusts does not align with the risk-based approach. The intent is to remove the requirement to verify the source of fund or wealth, not to remove the requirement to collect the information on the source of funds or wealth.

The question that was asked: why is it not practical for banks to confirm whether banks they correspond with have effective anti - money-laundering and countering financing of terrorism controls? To effectively carry out this requirement, a bank would need to complete an in-depth assessment on whether the controls are functioning as intended. That requires access to the other banks’ internal information.

The final question, I think it’s clause 10(1): what is “politically exposed person”? Politically exposed persons are people who hold, or have held, important public roles in another country—for example, presidents, senior politicians, top Government, military, or court officials, heads of State-owned companies, or key political leaders. The definition also includes their immediate family members and beneficial owners. It allows businesses to apply the requirement proportionately to their level of risk.

20:42

Thank you, Mr Chair. I’ve got a couple of questions for the Minister in the chair, Matt Doocey, also noting that the question might be quite specific. The Minister can feel free to take some advice around that as well.

After clause 9, I’m going to move on to clause 13, but in terms of clause 9, I note that the Associate Minister of Justice mentioned before in terms of synthesising from, potentially, three different supervisors to one supervisor, and that that particular supervisor will be the Department of Internal Affairs (DIA). I want to check with the Minister: in the regulatory impact statement, both the Reserve Bank of New Zealand (RBNZ) and also the Financial Markets Authority (FMA) actually do not support the changes that are being proposed. I do note the Minister of Justice’s response to the RBNZ and FMA, but I want to specifically focus on a couple of things in paragraphs 136 and 137 of the regulatory impact statement. This is on page 28.

The three areas I want to address are, first of all, that the RBNZ’s concern is around the depth of the analysis. I just want to check, because that’s not part of the response by the Ministry of Justice, whether the Minister believes that the level of analysis, or depth of analysis, for this change has been met. The second question is around the suggestion by both the RBNZ and FMA that there should be legislative improvements at the same time, prioritised over the structural changes, such as reducing from three supervisors to one. Noting that this is a series of bills, does the Minister think that that legislative improvement has also been met, alongside the structural changes that are being proposed?

My final question, again, was that in the response from the Ministry of Justice to the RBNZ and FMA, in paragraphs 140 to 143, the RBNZ specifically mentions costly and disruptive structural changes. I just want to check with the Minister what is meant by “costly”. With the changes we’re looking at, how costly would that be? Have there been any figures that the Minister has received from officials on that?

On to clause 13—this is “Section 52 amended (How records to be kept)”. I know this is something that, as a select committee, we did discuss, but I want to check with the Minister. For this particular one, I’m assuming that the person who is required—I can’t remember if this is something we discussed in select committee, and it definitely is not in the commentary of the select committee. The person who is meant to be producing that record or is keeping that record—is that record being kept now by DIA as the single agency, the single supervisor, that’s responsible for all of that? That’s my final question around clause 13. I’m happy, based on the Minister’s response, to move on to subsequent sections.

I call the honourable Minister. But, just before that, can I just say that the noise and the volume of the attempts to close down bear no relationship to the chance of getting it—can I just remind members. Sorry, Minister.

20:45

There is excitement in the Chamber.

There is—perhaps because you’re in the chair, Minister.

Understandably with this legislation—very excitable. I do want to acknowledge Dr Lawrence Xu-Nan with his persistent and detailed questioning. It’s always important to keep Ministers on their toes—always impeccably dressed. When I think of the member Dr Lawrence Xu-Nan, I think of someone who’s ahead of his time in a way, and that’s because the questions he’s just asked are about the bill that will come after this one.

20:46

Thank you, Mr Chair. I wonder if I can move ahead a little bit to a concept that’s been troubling me. That is in new section 67B, inserted by clause 17. I know I’m jumping ahead, but I really want to give officials an opportunity to have a think about this, because it’s got this concept of a “stored value instrument”, and it’s got this bizarre phrase. It says it’s a “portable device”. Now, I would have thought my iPhone or Game Boy was a portable device, right? But the use of the word “portable device” bears no relationship to what it then goes on to say, because it’s “for example, a voucher or a casino chip” or something else “that can be redeemed for cash”. It might include, in the old days, a cheque or a promissory note as well. It includes gold, silver, precious metals, but doesn’t include a debit card or a credit card.

Now, with “portable device”, there’s a real danger, it strikes me, in using the phrase “portable device”, where it just seems to be a random, made-up phrase that bears no resemblance. What it seems to me is it means “personal property, including documents and tokens which can be redeemed for cash.” Now, if that’s what you mean, that’s what you should say, but a “portable device” just doesn’t mean that. The risk is that when you get something which isn’t one of the named things, such as “precious metals”; when you get, for example, a cash-bearing card which isn’t a recognised debit card, such as an Air New Zealand travel card, for example, which carries cash on it—is it a portable device? Well, I don’t know, because I don’t know what a portable device is. If we really mean “personal property, including documents which can be redeemed for cash”, I think that’s probably what we should say, rather than this made-up phrase there.

Going backwards, if I can, to clause 13, amending section 52, which sets out time limits for reporting, there are some strange things that go on there. If I look at the new subsection (2)(b), it says you’ve got to report or provide records “(i) by any specified date given in the notice that the person who requires the records considers reasonable”. Now, why does it have to be that the person giving the notice requires? It should just say, “that is reasonable”. Once again, we’ve got this “What the regulator thinks becomes the rule.” Either it’s reasonable or it’s not. The thought processes of the regulator should not affect whether it’s reasonable or not.

The other point is this: you’ve got this strange thing going on, because you’ve got any specified date that is reasonable in subsection (2)(b), and when you go to subsection (3), if the production is a matter of urgency, you can require them “to be produced as soon as possible”. Now, “as soon as possible” might be different from any specified date, and it might be later than a specified date. You’ve got a bizarre situation where, if it’s urgent, you’ve got to do it as soon as possible but not on a specified date, whereas if it’s not urgent, you can provide a specified date, which could be tomorrow.

The whole section is, frankly, a bit of a mess, but the worst thing about it appears to be that when you’re giving a particular date, it has to be reasonable in the mind of the regulator, and there’s no place for the subjective views of the regulator as to what is reasonable or not in such a situation. I’d appreciate some clarity on both of those things.

20:50

Tēnā koe, Mr Chair. I know we’re stepping through this quite well, but I do want to revisit one of the responses from the Minister in the chair earlier, Matt Doocey, where I believe he was referring to clause 9, which talks about enhanced customer due diligence.

The reason I’m revisiting it is because, frequently, I get feedback from people involved with Māori incorporations—post-settlement governance entities—about the requirements. While the intention of this bill is to streamline the process, often Māori governance entities are still encountering the barrier of the onboarding process—i.e., they still all have to attend in person, and they’re still fulfilling extra identification requirements because they’re perceived as being high risk, etc.

My question to the Minister tonight is, number one: because, ultimately, it’s still at the bank’s discretion, will there be a move to streamline processes specifically around Māori governance structures, and will there be a move, whatever decisions are made at the completion of this bill, to enforce these with banks rather than make them at their discretion?

20:52

Thank you, Mr Chair. My question for the Minister in the chair, Brooke van Velden, is around clause 18, the amendments to section 68. This is “Reports about movement of cash into or out of New Zealand”.

New subsection (4) says, “For the purposes of this Act, a person is to be treated as having moved cash or stored value instruments out of New Zealand if the person”—and then there are a number of defining sections—“intends to leave New Zealand on an aircraft craft or a ship … goes towards an aircraft or a ship through a Customs-controlled area … [or] takes cash or stored value instruments into [that] controlled area … or has cash or stored value instruments in their baggage;”.

My question to the Minister is whether there was consideration of the fact that this section might be drafted too narrowly and that it could be possible for someone to be moving such cash or stored value instruments either through another person, with or without their knowledge, or in another person’s luggage. The section itself appears to me to be drafted quite strictly. I just want to have the Minister’s views on that.

I just also did want to make the point that when the Minister in the chair, Matt Doocey, spoke earlier about the replacement of “customer” with “person”, I do agree with that change, because I do think that it recognises that there can be secondary beneficiaries. But, again, it goes to the point that I made earlier: anything in the Act that talks only about “customers” or “of customers”, effectively, limits that chain, whereas it would be much more beneficial to just leave it open to “persons” more generally. I don’t know if the Minister wanted to reflect on that as well.

In terms of new section 52, inserted by clause 13—this is the one about how records are to be kept—there are some specifics around making records available urgently, and there’s a process in the existing legislation about the individual required to produce the information being able to respond within, I think, 10 working days, but there’s nothing specific about the decision maker needing to consider the response. Just in terms of due process, I’m wondering whether the Minister considered having a more robust process to ensure that the decision maker was considering the response for the production of information before making a decision. Thank you.

20:55

I move, That debate on this question now close.

Thank you, Mr Chair. There are a few questions which I think have still not been responded to and, I think, a few more clauses in Part 1 to go. In respect of the ones that I’m still waiting for an answer on, the Minister in the chair, Matt Doocey, did respond to tell the committee about the definition of “politically exposed person”, but I didn’t receive a response to the reason that “according to the level of risk” is inserted by clause 10(1), which I think was when the Minister replied to the other response. Also, in clause 11, the deletion of “and effective”—I’m still waiting for an answer on that, and that goes to the desire to not want it to be watered down.

I will skip forward, obviously, because the debate has moved on since I asked the Minister those questions. I just wanted to check—in respect of clause 19 of this bill, which amends section 69 of the primary Act, there’s an insertion here of new subsection (2), and also a reference back to new subsection (1). Now, when I look at the primary Act, there doesn’t appear to be a subsection (1) in section 69. Sometimes, there are subsequent amendments; I think there were, when I was looking at this bill, maybe some unincorporated amendments. That might be why. It would be good to just clarify that, because, if not, it might be important to insert, before (a), a subsection (1) in there to make subsection (2) make sense. If the Minister could get some advice on that. It’s a drafting matter, really. It might be that there’s been an unincorporated amendment from a more recent bill—I think this version was 2025 that I was looking at. That would be helpful.

I also wanted to just go back to—and I know my colleague Vanushi Walters has touched on this slightly in terms of the specificity of new subsection 68(4), inserted by clause 18—just the purpose here. I mean, it is quite an illustrative subsection, 68(4). You’re imagining a money-launderer kind of walking towards an aircraft and they’ve got cash on them and they haven’t made a report. It does seem quite specific, so what I just want to clarify with the Minister is: is the intention here to ensure that before someone actually completes the actual act of that cash or similar value moving outside of New Zealand—is the intention with this clause really to kind of provide for the commission of a crime, I suppose, or for this Act to be breached prior to that actually occurring? The intention of the mischief itself, I suppose, in this particular section appears to occur before the actual act of removing the money or stored value instrument from New Zealand. Some clarity around that would be good.

I do have some further questions in relation to clause 20 about accompanied cash, but I’ll just see if the Minister has an answer to some of those questions.

20:58

Thank you, Mr Chair. Look, I’ll respond to a couple of the queries that have come through from the floor. Firstly, there was a question in regard to Māori governance structures, from Labour. Māori trusts are already exempted under Class Exemption Notice 2018, Part 2. There was also a previous question in regard to record-keeping. Record-keeping is required for reporting entities and not supervisors.

20:59

Thank you, Mr Chair—I will be quick. I guess we do have quite a few quite specific questions, and, again, both this and the next bill are quite technical bills. I do apologise to the Associate Minister of Justice for getting the two bills muddled up, because—well, to be honest, the Minister also did that, so I feel like it’s OK for me to mix the two bills up.

I have a question around clause 17, which is “New section 67B inserted”. The Minister before has mentioned that when it comes to stored value instruments, which is the new insertion that we’re looking at here, it does include non-physical currency—bitcoin, for example, and cryptocurrency is something that is mentioned. The question I want to ask specifically is around, for example, non-fungible tokens (NFTs).

Now, NFTs are an interesting case study because of the way that it got hyped up and then went away just as quickly. Particularly when it comes to the way that economists explained it, people bought into the hyping up, the inflation, the financialisaton, and it’s very much unmoored from the physical economy. The question with that is: when you have something that gets pushed up, like NFTs, quite significantly, how would we consider that in the context of money-laundering, or using NFTs for the purpose of money-laundering? Again, cryptocurrency and NFTs, like bitcoin, operate quite distinctly, even though some of the underlying technology is similar. I just want to check with the Minister, specifically in the case of the phenomenon that we saw with NFTs, how that would work and what happens when people use that for money-laundering purposes.

Moving on to clause 20, which is “Section 70 amended”—I know that my colleague Camilla Belich also has a question on that, but I want to check specifically with the replaced paragraph (d) when it comes to “Unaccompanied cash”—this is subparagraphs (iii) to (v). It’s the same question I had before regarding when we’re looking at cryptocurrency or when we’re looking at NFTs. I want to check, in terms of the underlying blockchain technology that underpins cryptocurrency but also NFTs, how would that work in conjunction with the reporting requirement that we see here, and at what point of that blockchain, if it can be described as such, would we start seeing some of the requirements there?

The follow-up question from that is: when we see things like cryptocurrency and when we see things like NFTs, and, potentially, things overseas that could develop quite fast, is what we’ve done here in terms of reporting requirements, or any other kind of compliance requirements, agile enough to anticipate new forms of stored value instruments? That is my final question to the Minister.

21:02

Thank you, Mr Chair. My apologies, colleagues, for having to leave the chair, but upon my return, I have a whole lot of notes. I’m going to read these notes out, having not heard the question, and invite those members who do not understand my answer to ask the question again. I don’t know who asked these questions. I’m going to refer to new section 67B, inserted by clause 17.

I only got here 15 minutes ago as well, so we’re in the same boat on this one.

Ha, ha! A “portable device” captures cards and objects that are not related to debit or credit card mechanisms. The latter includes many of the systems used by cell phones and mobile devices, so are already captured by the Act.

In terms of clause 17, NFIs can do the same with shares, not in and of itself money-laundering. It is for other regulators.

Clause 19(3) does not exist.

Ha, ha!

Just saying! Section 69(a) does exist and contains the word “cash”. It’s a drafting error that can be picked up at proof assent. The error is in clause 19(4): 68 should be 69.

I can confirm that clause 19(3) doesn’t exist, so congratulations to whoever asked that question!

21:04

Thank you very much. I just want to ask a couple of questions. I think they might be my final questions for the night. The new section 90A, inserted by clause 25, is the first question: the “court must order that recovery from pecuniary penalty be applied to the … supervisor’s actual costs”. This is a little confusing, because I had a look at some of the cases when I was preparing for this, and the court already orders costs. The court orders court costs at a given rate, which won’t be exactly the costs incurred, but that is in addition to the pecuniary penalty. They get penalty and court costs, and now you’ve got this strange situation where you’re going to take court costs from the pecuniary penalty so that the court might not award additional costs. Has the department, the Associate Minister of Justice, considered the relationship between court-awarded costs, which are routine when these cases are won, and what the relationship will be when you’re saying that we’re taking full costs from the penalties imposed?

My second point relates to the amendment to section 132 in clause 26, which adds a power to cooperate with foreign counterparts conducting inquiries. Now, this is very tricky, because we have a comprehensive framework for cooperating with foreign Governments on investigations, and it’s the Mutual Assistance in Criminal Matters Act 1992. That Act is an important one, because we cooperate with particular Governments whom we trust, and we don’t simply allow our enforcement agencies to be the arm of any foreign Government, for obvious reasons; but here, it doesn’t appear that there’s any checks on that. It’s also the case that the Mutual Assistance in Criminal Matters Act identifies that some civil proceedings can be treated as if they are criminal. This regime is a classic example where, essentially, you have civil penalties, but it’s a quasi-criminal regime.

My question is: does the new supervising agency just have unlimited powers to cooperate with North Korea or Russia in money-laundering matters, or is it subject to the Mutual Assistance in Criminal Matters Act, which has a very careful regime about how we deal with foreign Governments? I hope it’s the latter, because I wouldn’t want to see decisions about what foreign Governments we cooperate with, essentially, in the hands of people within departments—bureaucrats, for want of a better word—because it’s actually a matter of high national importance.

21:08

Thank you, Mr Chair. To the member from the Greens, Dr Lawrence Xu-Nan, I actually meant to say “NFTs”—non-fungible tokens—not “NFIs”, when I mentioned before that you can do the same with shares—not in and of itself money-laundering. It was meant to be NFTs that I said, which apparently was the question from that member.

To Dr Duncan Webb, the pecuniary penalties and the supervisors looking to recover penalties and costs—this provision just clarifies that supervisors can bring recovery proceedings to those penalties. In other words, it’s also saying that they themselves are entitled to receive their penalties that have been awarded to them and allowing that. It’s, effectively, bringing the Anti-Money Laundering and Countering Financing of Terrorism Act into alignment with similar Acts, such as the Financial Markets Conduct Act, where they too are able to look for costs to be awarded to them.

Clause 26 is amending section 132. The member spoke about international collaboration, and I guess the thing we’ve all found is that money-laundering is international. It’s coming here. We’ve got drugs coming here, money leaving. We’ve got money transiting through here. In order to stop this worldwide use of the internet, I guess, and other forms of getting money and cash in and out of different countries, we have to collaborate with other countries. This is about improving our international relations and improving our international collaboration so that we can stamp down on organised crime, stop the illicit trade of drugs and money coming through our country, and be able to work together with other countries to be able to stop that flow transiting through New Zealand. Clause 26, amending section 132, is about improving that international collaboration.

There’s a supervisor penalty recovery also in clause 26(2), because it’s not currently clear in section 132 whether the anti - money-laundering supervisors have the power to recover their penalties and costs. We are establishing that in clause 26(2) in order to help with clause 25, providing for court orders—a penalty can be applied to the supervisor’s actual costs that have been incurred, as well.

I’d just note that we have been moving methodically through the bill and the Minister has been engaging, so there’s not that much left to go unless there are further questions, but I will go to Camilla Belich.

21:11

Thank you, Mr Chair. Thank you to the Associate Minister of Justice for her engagement on this. There are a few other bits which I think haven’t been covered to date, which I can move through quite quickly under this Part 1 section.

I just have some questions, as I think I indicated earlier, around clause 20, just jumping back there for now. Lawrence Xu-Nan asked some questions about this, so I won’t go into this in too much detail, but I just wanted to check with the Minister that the main purpose of the “accompanied cash” and “unaccompanied cash” definitional changes appears to be the change to the definition to ensure that stored value instruments are covered by the accompanied and unaccompanied provisions there, as well; so just some clarification on that.

Then, I just wondered if we could briefly touch on the civil liability changes that have been included in clause 22. These are adding to the existing civil liability definition, and we’ve been talking about the pecuniary penalties that follow from that, but I just wanted to ask the Minister if this meaning of civil liability—it appears to me to be bolstering this by providing a few other areas in which the civil liability will be met. I just wanted to check that that was the Minister’s understanding, that it was, in fact, expanding that definition.

The final question I wanted to ask, which I don’t believe has been touched on, is just to look at the censure process, which is outlined in detail in section 80A, and that was changed from section 80 by the Justice Committee. I’m just wanting to understand the process, really, for appeal. There’s quite a detailed process about the imposition of a censure and how that would work. Then, of course, there is a provision here in new section 80B to allow that to be appealed to the District Court. There’s no time frame issued here, so I just wanted to check with the Minister if that was intentional, and at what date the appeal would need to be raised if there was an appeal against a censure. Obviously, the District Court has its own limitations, but if it was intended to be simply from the date they received that censure or if there were any other applicable time frames, because it doesn’t appear to be as detailed as some of the other provisions in this part. Those were the quick questions that I don’t think have been touched on.

21:13

Thank you, Mr Chair. Thank you to the member for her questions. With the unaccompanied and accompanied cash at the border—the border cash report—transportation of cash that’s $10,000 or more needs to have a border cash report that’s done, and it’s currently not specified when this report must be made for unaccompanied cash or stored value instruments. The amendment sets the timing requirements that, basically, say that the report has to be made 72 hours before the cash or stored value instrument is moved. This will clarify that the border cash reporting obligations and improved customs enforcement capabilities will actually happen.

When it comes to the civil liability acts that the member mentioned in section 78, all breaches of an obligation are a civil liability act. Section 78 provides a specific list of such breaches. The member asked whether or not we’re making it more rigorous, and we certainly are. The amendment explicitly adds three breaches to the list: failing to submit the suspicious activity report, failing to undertake a risk assessment in accordance with regulations, and failing to submit an annual report to an Anti-Money Laundering and Countering Foreign Terrorism supervisor. Those ones, in themselves, are making it a more robust regime, so that we can capture people.

21:15

Thank you, Mr Chair. I have one final tiny question for Part 1, and that’s to do with the Associate Minister of Justice’s Amendment Paper. Now, in the Minister’s Amendment Paper, it actually does transfer clause 24 from this bill to the next bill, but the explanatory note says, “to ensure that the provisions relating to censures come into force at the same time”.

Now, noting that we can discuss this a little bit later, those two have got two different commencement dates, but it says, “in that Bill relating to the making secondary legislation.” My understanding is that censures are not secondary legislation. Would that be correct? Or is it secondary legislation?

Thank you. My understanding is that we have pieces of secondary legislation that are actually coming into the Act. Effectively, we’ve got information sitting in regulations that we will be taking out of regulations and putting into the Act. That’s why we’re doing this manoeuvring.

21:16

I move, That debate on this question now close.

The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 572 be agreed to.

21:18

Thank you, Mr Chair. I actually only have one question for the Associate Minister of Justice regarding Part 2. Noting this amendment is secondary legislation but not necessarily a consequential amendment, I just want to check—yes, I did get the right bill this time! I do want to check with the Minister: you just mentioned that, for the censure, for example, it is taking it out of secondary legislation and putting it into primary legislation, and the difference of that being by Order in Council, but also the fact that primary legislation would require a parliamentary instrument or a bill to make any further changes.

I just want to check with the amendments—the secondary legislation here—if the changes being made are genuinely consequential changes based on what we’ve done in Part 1, and if not, is there anything in here that has been highlighted, because we’re using a Parliament bill to make changes to secondary legislation, that would also elevate the change to a principal or a primary legislation level? That means that any further changes to things that we’re seeing here in Part 2 will now require another Government bill to change, because they’re no longer secondary, if that makes sense.

I don’t think I’m explaining myself very well, but, yeah, just checking: are they consequential to what we saw in Part 1?

21:19

To the member, my understanding is that this was originally a regulatory systems amendment bill (RSAB), so they’re minor, inconsequential changes to tidy up. Effectively, that’s what we were originally going to do—just tidy it up—and we’d put it in the suite of those RSABs that were there. But, because we were doing other changes in order to meet our obligations, we’ve pulled it out. Therefore, my understanding is that the amendments you see here are minor and inconsequential, and if there was anything that was substantial, I would have mentioned it to the member.

21:20

Thank you, Mr Chair. Not, obviously, wanting to drag this debate out, I just wanted to double-check the two provisions in Part 2 that I looked into and kind of caught my attention when I was reviewing this, which were: clause 30, which revokes regulation 7; and also clause 33, which revokes regulation 5AA. I know that they’re different sets of regulation. I’ve just had a look at both of them, and I just wanted to double-check with the Associate Minister of Justice that regulation 7 deals with, I think, unaccompanied cash or accompanied cash. I just wanted to check with her that the reason that that’s been revoked is not actually to lose anything, it’s just because the “cash” and “unaccompanied cash” definitions have been included in there. I see the Minister nodding.

A similar question for clause 33 for regulation 5AA. This, I believe, covers the definition of “beneficial owner”. Obviously, back to the original beginning of this bill, there is a different definition of “beneficial owner”, but, obviously, there’s a new definition. So just wanting to double-check with her that the reason that’s been revoked is because its intention is to be replaced by not a part of the regulations but part of the primary definition of “beneficial owner” within the new Act.

21:21

That is correct. We’re, effectively, taking it out of regulations and putting the new definitions into the Act.

I move, That debate on this question now close.

21:22

Thank you, Mr Chair. Just apologising to the Chair, and also the Associate Minister of Justice. Now, I am going to sort of step outside and break the fourth wall of this bill because, again, we’re kind of looking at these two bills—this and the next one—together.

I’ll ask it now, so I won’t ask again later on in the next bill. Noting that the commencement date for the two are different: for this bill, the commencement date is the day after Royal assent, but for the next bill, it’s 1 July 2026. I just want to check if the Minister wouldn’t mind, I guess, elaborating on why the different dates and how that would work in terms of the mechanism we’re seeing in the two bills with one being effected ASAP and one being effected in a few months’ time. That’s all.

21:23

Thank you for noticing the two different commencement dates—and there is a reason for it. We can get this one, this particular one, under way the day after Royal assent because we’re making smaller changes that can be implemented straight away.

Whereas, for the next bill that we’re about to debate, the reason why 1 July is the setting date is because that becomes the date that the Department of Internal Affairs (DIA) will then become the single supervisor. That is also the date where they can start giving out their information to the different agencies on how they can mitigate some of their risk—in other words, give the advice out to industry—and it will all happen from that date. I selected that date in order to have a time where the DIA, as the single supervisor, comes through and can start giving businesses relief.

21:24

I move, That debate on this question now close.

21:25

Thank you, Mr Chair. Now, I started off the last debate by reading out my introduction to this bill—accidentally, of course—so I won’t go through and read it out again, because you’ve heard it. There are three substantial changes that we are making within this bill: ensuring that we go from three supervisors down to one, so that we can get relief for industry; introducing a levy, so that we are able to pay for the changes that we’re making to the anti - money-laundering system, changes that will benefit not only the industry but New Zealanders as a whole; and then, finally, other matters, which is just bringing in all the other little bits and pieces that we need to make sure that we have a robust system that fights organised crime and keeps our communities safe. Thank you to our members for engaging in the debate.

Thank you, Mr Chair. I’m going to be asking the same questions I asked previously because, apparently, I also got the wrong bill. Just checking with the Associate Minister of Justice: the question I had before was to do with the regulatory impact statement. This is the one that is entitled, The Supervisory Structure of The Anti - Money-Laundering and Countering Financing of Terrorism System, and this is page 28, paragraphs 136 and 137.

I won’t repeat the whole thing but just want to check that the Reserve Bank of New Zealand (RBNZ) did not agree with the problem statement, but what I didn’t hear is whether the Minister believed that the depth of analysis is being conducted to a satisfactory level for RBNZ—if there have been any follow-up conversations.

I want to check with the Minister then, because I know that in this bill there is the levy structure, which we’ll talk about later on, but if the levy structure resolves the RBNZ—concerning paragraph 127 of “costly and disruptive structural changes”—would that adequately address that? That’s my first question.

21:27

Thank you, Mr Chair. My understanding is, with the three supervisors that we had, both the Reserve Bank and the Financial Markets Authority—although, they’re kind of unhappy about losing their role in this—they were each unwilling or unable to be the single supervisor, but they didn’t want to hand over their role either, but the need for a single supervisor was actually really quite clear. The regulatory impact statement was well-founded in its recommendation that the Department of Internal Affairs (DIA) be the ones that are the single supervisor. I can trace the analysis back to our last Financial Action Task Force evaluation and statutory review because it goes that deep.

What I will assure the member of, though, is that both the membership of the Reserve Bank and the Financial Markets Authority has still been working with DIA on what type of information to get out. So while their anti - money-laundering (AML) teams, as such, will no longer operate as a supervisor, the key people within those agencies have still been working overall with the AML strategy to make sure that the outcomes are still there for everybody.

21:28

Thank you, Mr Chair and good to be moving on to the second bill, and this being my first call on that. I think, as we’ve referenced a couple of times, there is the potential for confusion between these two bills and so I’m very keen to work quite methodically through the areas covered in this bill, the bigger of the two bills. As indicated by the Associate Minister of Justice in closing remarks on the previous bill, this has quite a lot more in it and, therefore, needs a different commencement date to the prior bill, but also we need to work through it quite methodically because there is a lot in it.

The Minister also referenced exactly what this bill does and that that had been profiled at the beginning of her opening remarks on the previous bill, but I just think that one of the areas I really want to dig into is the role of the supervisor and the structure of that. I think that that’s best considered in the broader context of exactly what this bill is doing in and of itself, and in isolation from the other bill that we’ve looked at and examined. I am just going to step through some of the commentary about what the bill, as introduced, aims to do, which is to improve the efficiency and effectiveness of New Zealand’s regulatory system for anti - money-laundering and countering the financing of terrorism.

It’s also, though, about reducing those compliance costs and it’s about seeking to simplify how the system is supervised, and those are some of the questions that I will probably start with when I get to them around that new supervisor role and exactly how the system is supervised. What we are seeing is a number of changes both in the way we operate financial markets domestically and internationally, how we need to comply with some of those international treaties or obligations that we are committed to, but also the changing shape of financial transacting. That’s why these protections are required but it’s also why we need to be certain that we have in place the appropriate supervisory structure to be futureproofed.

That simplification argument needs to be examined quite thoroughly in the context of this bill to ensure that there aren’t unintended consequences. It’s good to see here that it also talks about needing to be agile, which I think is very important, especially considering some of those broader risks that I have talked about, but also in terms of a risk-based approach to supervision through changes to anti - money-laundering and counter financing of terrorism (AML/CFT) secondary legislation. The secondary legislation is another thing that we will need to look at and no doubt there will be a number of questions as we step through the bill.

I move to the principal changes made by the bill. One is obviously reducing the number of supervisors in the AML/CFT system from three down to one. That’s a significant change. Another is the strengthening the supervisory powers of the single supervisor to compel interviews, set time frames for the provision of documents and information, and conduct on-site inspections; and also there is the extending of the regulatory powers of the Secretary for Justice, the Commissioner of Police, and the chief executive of the proposed supervisor to make secondary legislation for the system. There is also the introduction of an industry levy.

Now, this is another part of the bill that we really need to ask a number of questions about and get a really good, robust understanding—shared understanding—of exactly where that levy model sits, to ensure that we think it is fit for purpose and fit for the future.

To jump into the bill, I have a number of questions. Part of this, too, is to ensure that we actually meet the international obligations that we see both from the Financial Action Task Force, as well as the Foreign Account Tax Compliance Act. So it’s not just our own rules and our own standards that we need to meet. It is also those international obligations that we need to ensure we do meet.

The first questions I have really relate to—and I’m conscious I am running a little short on time, but I’m hoping to get this first question out, which is around Part 1: in Part 1, in clause 5(2), where we’re talking about replacing the definition of “AML/CFT supervisor with—”

Wrap it up. That’s five minutes.

What the other members don’t realise is that if they continue to heckle like that, I’ll have to start my sentence again. Clause 5(2) states, “In section 5(1), replace the definition of AML/CFT supervisor with: AML/CFTsupervisormeans the public service agency that, with the authority of the Prime Minister, is for the time being responsible for supervising reporting entities under this Act.”

There are a couple of things that I have questions about for the Minister. The first is: why is the agency not named there? I think we all understand who the agency is, but it isn’t explicitly named there, which seems like quite vague language. Then, adding further vague language into that, you also have “for the time being”. It’s quite an open-ended addition, and I’m keen to get some clarity from the Minister on exactly what that means.

21:34

Thank you, Mr Chair. Thank you to the member for his introductory remarks and his questions. The member made mention of not wanting to have unintended consequences from the single supervisor, and I do appreciate that remark, but I think what we’ve found is that for the last 13 years we’ve had unintended consequences from the three supervisors—that being that they’ve not been able to get adequate resources out to industry to tell them what risk they can take. None of us saw that—we weren’t even around then, but it wasn’t seen and it’s become an unintended consequence; hence why we are moving to a single supervisor.

As to why we don’t name the Department of Internal Affairs (DIA), if we have a look, we’ve had the Reserve Bank, the Financial Markets Authority, the Department of Internal Affairs, and we’re now going to make DIA the single supervisor, but we just don’t know what’s in the future. We don’t know whether Government agencies may change their name or anything like that, so we’re just merely futureproofing so that if there is a name change or if we find there are unintended consequences with it being the DIA and we need to move somewhere else, that we can readily and easily do so. All it is is merely futureproofing for who could be a supervisor in the future.

21:36

Thank you, Mr Chair. I appreciate the Associate Minister of Justice’s remarks about the feedback that was received from industry over the last 13 years, about the under-resourcing of the anti - money-laundering (AML) regulators when they were the Reserve Bank, the Financial Markets Authority (FMA), and the Department of Internal Affairs (DIA). It became a series of commentary from industry—say, lawyers, accountants, firms that are affected by AML and have to know their customers and are required under our international obligations to observe, to the Government—that the regulators were under-resourced. This was the thing that gave rise to the ideas about a single regulator. One submitter said, “As a general observation based on our experience on advising clients on the application of this Act since its inception, the existing supervisors appear to be under-resourced. The benefit of a single super AML regulator could be better, more focused resourcing.”

My first question to the Minister around that definition at clause 5(2) is whether at section 5(1) replacing “AML/CFT supervisor” with an open-ended definition that is at the behest of the Prime Minister is in fact giving effect to what industry has been saying for those years. Will this not only improve longevity and an understanding of the industry that there is one supervisor and that it is DIA, but also that this supervisor will be appropriately resourced to be able to do the work that is it is required to do across the industries that it is required to regulate?

I will come back to this because I think the guts of this bill, really, is the levy, but we don’t come to that until later in the bill, so we will approach that methodically, as my colleague has said. The question I want to ask the Minister underneath this definitional point is about the fact that DIA is mostly the preferred regulator of those submitters who submitted from a professional services bent—accountants and lawyers, say. That is the regulator they have dealt with, but for other participants in the system—say, fintechs and banks—their regulator has been the FMA. The FMA has a particular set of expertise in here, which never needed to be defined in an anti - money-laundering bill because their remit was clear: for the health and oversight of a strong and enduring financial system that was not unnecessarily exposed to risk either from money-laundering or other financial risks that occur because of inadequate supervision. When the FMA is granting its functions over DIA, which is a part of this bill, are we clear and do we have confidence, Minister, that that expertise is also being transferred over?

The example that I point to here is the FMA bringing a set of practice notes with a particular fintech that was warned and then fined $900,000 for not reporting suspicious transactions. That was done by the FMA’s director of supervision. That director of supervision has expertise in supervising all manner of trusts, not just publicly reporting entities that are covered by AML but also trust entities that have these kinds of reporting obligations under other Acts; say, those trusts that take retail investments and need to report to the people who invest in them. That supervision expertise is a set of expertise which is not just public expertise but also exists in the commercial sector. Supervision expertise is something you can buy and pay for and is well understood within the market. That is something that the FMA has a role in all of the time—in supervising the supervisors and then being the supervisor for funds and for trusts, but that is something that DIA is not in the usual business of doing.

I want to ask the Minister about how DIA can play that role for the types of organisations that it is not best set up to cater for, that the FMA was catering for. I agree with her comments that a series of overlapping decisions made it very clear that one regulator would benefit, but, as I’ve said, submitters made the connection there because of the resourcing constraints, not because three regulators who have slightly different remits for slightly different industries was inherently a bad thing. Is DIA well equipped to deal with real estate? I ask this question because from 2020 to 2022, the focus internationally and in New Zealand was on the risk of money-laundering through real estate transactions. That should still be our focus as it is large amounts of money that are laundered in this way. Is DIA well equipped to not only deal with real estate agents but their professional obligations when dealing with real assets and land assets? Is it the supervisor that is best placed to continue their focus that New Zealand owes the rest of the world?

21:41

Yes, but I will explain a little bit more. As I mentioned earlier when we talked in the previous bill, the supervisors that were the Financial Markets Authority (FMA) and Reserve Bank, made up of some very skilled people—some of those people are actually moving over into the Department of Internal Affairs’ (DIA’s) anti - money-laundering (AML) team, so we’re not losing that expertise.

I mean, part of the problem with the three supervisors is that two of them were legal entities and one wasn’t. This is where part of the conflict came when it was time to actually give out advice, because one may be able to give out advice but it may contradict another’s legal references. In order to have DIA be the single supervisor in things that we capture with FMA and Reserve Bank - skilled people sitting on there, and capture the things that they need to still capture—like the example that you gave, but they’re not going to conflict with each other’s Acts when it comes to giving out that information. They can basically nail it, go out there and penalise people who abuse it or who don’t comply with it, but they can also give out that advice that is needed across all of those markets, including the fintechs as well. They will be working together, and I’m really pleased that the team that has come together will have skills and expertise across all three of those previous supervisory roles.

21:43

Thank you, Mr Chair. Thank you, to the Associate Minister of Justice, for that response. That segues nicely into my question, which is on clause 7, “Section 39A amended”, around suspicious activity. Now, I understand that for this particular part, the insertions just in section 39A(b), inserted by clause 7, with the inclusion of additional articles, for example, describing section 67A, which is the prohibition of certain cash transactions, but I want to check with the Minister that while we’re going from three supervisors to one—and I actually want to thank Dr David Wilson for his guidance around this and he may be able to speak more to this particular point—one of the missing links in all of this is the role of banks.

Yep.

Yeah, a lot of that because, again, if when we are looking at three to one, what is the Department of Internal Affairs’ (DIA’s) role in reinforcing or holding banks accountable for ensuring that their processes are up to speed and that they don’t have bank accounts on their books that have been used to facilitate some of the transactions? I noticed that a lot of the things to do with scams, etc., do go through a bank account, so when we’re reporting suspicious activities, I just want to know from the Minister whether there’s any consideration of the role of banks in all of this and how they are being held accountable, or how their processes are being held accountable, for any of these activities.

The next question I have is also with suspicious activity, and I referenced this in the second reading of my speech, which is that recently, in France, we saw the landmark case with the Lafarge cement company, which has been charged with financing terrorism in Syria and adjacent areas. Lafarge cement is now a subsidiary of the Swiss cement company Holcim, which also operates here in Aotearoa New Zealand. I guess the question there is: when we’re looking at suspicious activities, how broad are we able to go when we’re looking at the broader potential parent company or subsidiary of the parent company that operates in another jurisdiction, where, potentially, we just simply don’t know how they can be linked to a reporting entity or for a person conducting a transaction here in New Zealand? Are there any thoughts that you might have, any sort of advice you’ve taken from DIA, or any other things that you’re working together on in this new area, on how we can address that?

21:45

Thank you, Mr Chair. I thank the member for his question. There’s a lot of operational detail in there that we would never cover in legislation, but I think if I can answer in this way—and, hopefully, it answers your question—part of the funding for the levy is to also fund the FIU, which is the Financial Investigation Unit of the New Zealand Police. When the member talks about if we see crime occurring or a bank sees crime occurring, and he’s asking about parent companies, etc., that’s where I expect the FIU would be able to step in and take any potential criminal cases that occur from the money-laundering.

Now, when we went out for the discussions with the banks on the levy—well, not just the banks; we went out to everybody to talk to them about the levy and who would pay what and whether or not it was fair, and those discussions have been had and feedback given—we were looking at proportioning part of the levy based on who has the highest rate of, perhaps, potential laundered money going through their system. For example, banks will have more money going through and being laundered through their system than, say, your average real estate agent, so we’re looking at ensuring that the correct amount is being paid in the correct places. Then the question that remained was, “Well, we’re now paying this amount, so what are we getting for it?” This is why we’ve gone out for consultation, because we’ve basically said to the industry, “What do you need in order to operate well? What do you need to be able to mitigate the financial risks that are being undertaken, but also go after the organised crime?” The people that were consulted with came back and said, “Well, we really need the FIU to also be well funded because it’s one thing to stop these transactions, but if we don’t stop it from where it’s originating or even put some effort into that, it’s just going to keep reoccurring.”

The levy will help pay for the investigation of the criminal activity that comes from those suspicious activity reports that are given to the Police. I hope that answers the question of what happens with the flow-on effect once those suspicious activity reports—or SARs, as we call them—get reported. We do have the other avenues. It’s one thing for the supervisor to give advice, but we also have the FIU in there, which is going to take on the criminal activity that comes from that as well.

21:48

Thank you, Mr Chair. Now, please don’t take this as suspicious activity, but I do want to take a step slightly backwards from where we were in the suspicious activity. I wanted to come to Part 1, clause 6, “Section 16 amended”, which is around the standard customer due diligence and verification of identity requirements. In clause 6(1A), “Subsection (1)(b) and (c) does not require a reporting entity to take steps to verify any information obtained under section 15(d).”

Now, we’ve talked a lot, in various speeches, around the futureproof intent of this bill. A lot of what we’re talking about there is new ways of transacting and new ways of moving money about, potentially, and particularly in new industries and new sectors who choose to transact in different ways, be that domestically or internationally. I guess what they’re looking for, there, is fast and frictionless ways to transact, and that can be beneficial in a number of ways when you are moving money or currency around, but from a knowing-your-customer perspective—and particularly looking at that clause 6(1), inserting new subsection 16(1A)—the question here then is: does it have fingerprints?

If things become too fast and too frictionless, then the lack of fingerprints, or the lack of identification or the ability to be able to identify, becomes more challenging. Also, if, in this Act, we’ve made that ambiguous or vague or haven’t really made that a watertight provision, then the question really for the Associate Minister of Justice is: are you confident that you will still be able to get done what you need to be done, but you will still be able to identify or verify the information that’s been obtained? Similarly, do you believe that it will meet the international obligations that we’ve signed up to, so that what you’re putting into the bill here is actually robust enough to be able to capture that information that you would need?

21:51

In answer to the question, yes, we do believe it’s robust enough. We think all the changes that we’ve made in here will please the Financial Action Task Force (FATF) and will demonstrate to them that we are committed to making the changes that they requested of us back in 2021. All of the changes that you see here contribute to that next FATF evaluation that is upcoming.

I understand why the member raises questions about this particular section being amended: section 16, amended by clause 6. This is in order to ensure that those people—perhaps if I give an example: you’ve been with a bank for 40 years, you’ve just gone in and you’ve not remortgaged but maybe reset the mortgage on your bank. Then you want to go back and get a loan or an overdraft, for example, and then the bank requires you to verify your identity all over again, even though you just did all of that with them when you reset your mortgage, because you hadn’t set it for 20 years. You just provided it to them, you’re the same person, you’ve got the same photo ID. It’s basically saying to the bank, you don’t have to go through all of that again because you’ve just done it—so allowing them to understand and mitigate those risks.

That’s going to be, I think, a lot easier for the banks dealing with customers who are getting very irate with them, saying, “Why do I have to do this every single time I come in, when I just gave it to you the other week?” It’s really hard because the bank then doesn’t—they, basically, don’t say this is an anti - money-laundering requirement. I hear the banks actually just say, “Look, you have to do this.” It’s taking pressure away from both of them and making sure that we’re not just wasting time having to do the same thing over and over, but also ensuring that where there is a change, the banks can ask for the information all over again, but where it’s not needed, allow them to not have to ask for it.

Mr Chair.

Mr Chair.

We are a bit early for closure motions, so I hope this is not—

Oh, OK.

OK. Arena Williams—I appreciate the enthusiasm, though.

21:53

Thank you, Mr Chair. Following up on the Associate Minister of Justice’s contribution there, it’s really useful to have their context that this isn’t intended to capture, say, a refixing of a mortgage scenario, but clause 6, amending section 16—at the top of page 6—does apply to all registered entities. When we think about the context of, say, a real estate situation which might hinge on section 15(d), which is the address requirements of the standard customer due diligence (CDD), you then look to the original section 16 of the Act, which gives the option for a registered entity to take reasonable steps to satisfy itself that the information under that section is correct, and, according to the level of risk involved, take reasonable steps to verify the beneficial owner’s identity.

My question for the Minister is: does the effect of her new subsection 16(1A) mean that real estate agents won’t need to verify that someone’s address information is right? Are they entitled to rely upon address information provided by a buyer or seller as correct information? For lawyers as well—this is an important part of their CDD—is it the case that they no longer have to verify the information about address provided to them by a client? Is it the case that they can rely upon the information provided to them in the first instance as correct information?

This is also relevant in the financial services sector—not in those banks and entities with very mature systems for knowing their customers; these are long term, and they also hinge, for most of our banking institutions, on those requirements in Australia which are more stringent around CDD—but for those smaller institutions where they might be thinking that they are entitled to rely on the documents provided to them by a customer about their address information. The law actually requires them to be sure of that, presently, and now in the future seemingly won’t require them to do that; is that actually to change the law for those smaller entities?

I also want to use the final minutes that I have to flag a question I have for the Minister around clause 7, paragraph (a)(ii) of amended section 39A. Is it the intention of the Minister to limit the meaning of “suspicious activity” to things which are in fact criminal activity? You can imagine plenty of scenarios where, as she has said, this regime applies to, say, gold dealers or jewellery dealers. Does the section apply to people who notice a series of transactions by someone who they might not expect to be in possession of a large amount of money, through goods which are often associated with money-laundering—say, cars, boats, gold—and is it the case that, actually, what they’re looking for is the actual criminal activity rather than transactions which might otherwise ping their radar as things which might be associated with that kind of suspicious activity?

I can understand the value judgments that would be associated with doing that, but my question is, really: does that meet our international obligations in requiring a further identification of these kinds of transactions? There’s a big difference between somebody who is visiting their local pawn shop and is pawning lots of items and regularly. That is not in any way prohibited under any of these Acts, but it might lead you to suspect that there might be an enforcement issue of the Criminal Proceeds (Recovery) Act 2009.

Those are two separate questions, but I think we can cover off that clause 6 and move on to the various meanings in clause 7.

21:58

Thank you, Mr Chair. If I address that last question by the member Arena Williams first. The inclusion of jewellery; watches; gold, silver, or other precious metals; diamonds, sapphires, or other precious stones; motor vehicles, ships—the new definition doesn’t expand on obligations of those current reporting entities. In fact, we’ve put this in here because industry has asked us to. Effectively, the suspicious activity reports couldn’t be filed on these things that they are finding money being laundered in purchasing. They said, “Could you please put it in so that way we can do suspicious activity reporting on those particular things.” That’s why that is there.

The member asked, as an example, about lawyers, real estate agents, accountants, etc.—who’s going to be doing reporting? That advice is going to come from the supervisors. The supervisor’s going to have a look at where the risk is, when they talk with industry as part of their discussion on who’s going to do what. They’ve been communicating with industry over who has what information, where it is best needed and regarded, and then they will give out their advice—I’m hoping—on 1 July, or not far after, as to who has to do what. I’m just giving them the highway to be able to make those changes.

Members the time has come for me to leave the Chair. The committee will resume tomorrow at 9 a.m. Pō mārie.