Post-Cabinet Press Conference: Monday, 8 May 2023

Good afternoon, everybody. I’m joined today by the defence Minister, Andrew Little, as we make a pre-Budget announcement about significant investments that we’re making in our Defence Force personnel. Budget 2023 will be a no-frills Budget with spending going to where it is needed the most. One group of New Zealanders whose wages have lagged behind are the dedicated women and men of our defence forces. It’s unfair and it’s leading to significant rates of attrition. It’s also putting at risk our ability to make necessary deployments whilst also responding to events, such as Cyclone Gabrielle. In the UK last week I saw firsthand the esteem in which our NZDF personnel are held. It was humbling to meet with our trainers putting in 100-hour weeks to ensure the Ukrainian armed forces have the skills necessary to defend their homeland against Russian aggression.

I can tell you from the conversations with counterparts that our Defence Force personnel are held in the highest regard globally and that their contribution in support of Ukraine is making a difference. Our soldiers, sailors, and members of our air force also play a vitally important role in supporting us domestically during times of crisis, and we’ve seen this too often in recent times, most recently with the Defence Force moving quickly to support New Zealand through the Auckland floods and Cyclone Gabrielle.

When we became the Government it quickly became obvious that after nine years of under-investment and neglect and deferring upgrades and investment, our Defence Force workforce and the important assets that they use and rely on had been run into the ground. Since then we’ve invested an historic $4.5 billion to replace and upgrade some key Defence Force assets. We’re starting to see the benefits of these investments flow through, with the first of the new P-8A Poseidon aircraft arriving, replacing our aging Orion maritime patrol fleet. New Bushmaster light armoured vehicles will be operational soon, and the new C-130J Hercules aircraft are on the way to replace the aging C-130H Hercules, that have been in service since the 1960s.

Today we’re talking about tackling attrition, though, and helping to make a career in our defence forces an attractive option, especially at a time when New Zealand and the Pacific are experiencing escalating impacts of climate change and the geo-strategic competition both within our own region and further afield continues to intensify and call upon our resources. Today I can announce that we’re setting aside over $400 million in the Budget to deliver the largest pay increase to our hard-working Defence Force personnel in decades. I’ll hand over to Minister Little to provide the details, and I’ve got a few other things for you and then we’ll open for questions.

Kia ora tātou katoa. Thank you, Prime Minister, and good afternoon. Today’s announcement focuses on what I have been saying has been my top priority as defence Minister since I took up the portfolio. It’s in response to key concerns raised with me by personnel throughout the ranks who I’ve met with or heard from right across the country. It’s clear that rates of pay in our Defence Force have fallen behind rates payable for comparable roles outside the military. Enlisted personnel aren’t subject to the Employment Relations Act, they can’t join a union, and they can’t go on strike, but we know Kiwis expect them to be there when we need them most. A $419 million payroll boost over four years will mean many NZDF personnel, particularly recruits and skilled lower-ranked service people, will receive a salary increase of between $4,000 and $15,000 a year. It means 90 percent of NZDF personnel will be paid at, or close to, market rates for their skills.

This is, as the Prime Minister said, the largest investment in remuneration for NZDF personnel in a decade. We have a moral obligation to ensure our soldiers, sailors, and aviators are paid fairly for the critical work that they do on behalf of all New Zealanders. This is a responsibility that this Government takes seriously. Just as we’ve increased wages for police, corrections officers, and nurses, it’s important our defence personnel, who work hard on behalf of the country, often away from their families and in tough conditions, are paid fairly for what they do. The pay rises resulting from this announcement will come into effect from 1 July this year, and this Government expects this will go a long way to address attrition and continue to make defence a career of choice.

Today’s announcement also includes $328 million for Defence projects, including upgraded aviation fuelling facilities at Ōhākea and world-class communications to our frigates and new Bushmaster protected mobility vehicles. Budget 2023 invests more than $85 million to improve Defence housing, with up to 15 new houses at Waiōuru and a renovation pilot for 13 properties in Burnham, Linton, and Ōhākea. The quality and condition of Defence housing has been left to run down, and this investment will start to remedy this. It’s the first in a number of steps. As the Prime Minister has said, it’s important that we support our NZDF personnel to do their job in the service of Aotearoa New Zealand and our people. Prime Minister.

Thank you. Finally, today, this afternoon I have confirmed the permanent reallocation of ministerial portfolios following Meka Whaitiri’s removal as a Minister. Kieran McAnulty will become the lead Minister for Cyclone Recovery in the Hawke’s Bay, in addition to covering the Wairarapa area. Rachel Brooking will become the new Minister for Food Safety, Peeni Henare will become the Minister for Veterans, Jo Luxton will be made a Minister outside of Cabinet, holding the portfolios of Minister of Customs and Associate Minister of Agriculture and Associate Minister of Education, and, finally, at her request, Nanaia Mahuta’s responsibilities as a regional lead for cyclone recovery will be transferred to Michael Wood. To the week ahead, I’ll be here at Parliament and attending question time on Tuesday and Wednesday. On Thursday, I’ll be in Auckland, and on Friday I’ll be visiting the West Coast. Now, I’m happy to open up for questions. Jessica.

I’ll hand over to the Minister in a minute for some specific numbers, if he has them, but we do know that particularly in the trades, people who have been working in the Defence Force who are trades-qualified have found very lucrative offers out in the private sector, and that’s been a key area of retention challenge for us. But I’ll see if the Minister has got some specifics.

Thank you, Prime Minister. We’ve lost about 10 percent of our NZDF personnel—it’s roughly about 800—and that’s—

Over the last year. That’s the number we need to build upon.

I’m confident that it will go some way to do that. I know that in March, the Chief of Defence Force announced some one-off payments to NZDF personnel, and that saw an immediate reduction—in fact, withdrawal of the number of resignations that NZDF was experiencing. So I think personnel were looking for a structural increase in their pay and this gives them that signal, and I expect that will make a difference.

We’ve got the data, we’ve got the figures, and in a constrained Budget, we’ve got this significant investment. I’m confident that with these levels, and targeted at the lower and middle ranks, this will make a difference.

Amelia.

This, of course, isn’t the first investment we’ve made in Defence over the last five years. You will have seen significant and ongoing investments in Defence, but we have to recognise that, you know, there is always more work to do, and in the area of pay, we think that our Defence Force personnel do deserve a better deal. This additional funding means that they’ll be able to get that.

Well, there’s a clear link between remuneration and attrition, particularly when the private sector are offering more and we haven’t been competing on an even footing with them. So the additional funding will certainly help to address the attrition challenge.

No, I haven’t.

Minister Little.

Sorry, what was the question?

Well, we want to stop attrition. We fund our NZDF for a level of complement, and we want to get back up to that complement.

Well, we fund the NZDF to have a certain number of personnel in each of the services. If they’re below that funded complement, we would get them back up to the full complement.

Well, I’ve indicated we’ve lost about 800 personnel in the last year. I don’t have the precise number of the gap we had to fill, but we want all those gaps to be filled.

Well, I mentioned one of them in my introductory remarks, which is the war in Ukraine, where New Zealand is playing an important supportive role in the UK. And, as I indicated, I had the opportunity to meet our troops, who are doing their bit, based in the UK, to support Ukraine and Ukrainians. We need to be able to do a number of different things at once, and that means making sure that we’ve got the defence force capability and personnel able to do that.

It’s a combination of factors. Ultimately, the region that we’re talking about is one of the less affected regions. There is a bit of work to be done there, but, also, her travel programme means that she’s missing a lot of the opportunity to participate in those discussions. There was just an opportunity to rationalise the number of regional leads that we had. It was ultimately her request. Happy to take that up.

Absolutely not—no, none at all.

It’s the way that those original funding decisions were made; they were funded for the vehicle. The communications in need has changed in the last couple of years, since the vehicles were ordered. The interoperability requirements, particularly with Australia and the US, have changed. We need to have a platform that means that the users of our vehicles can communicate effectively to counterparts from other militaries with whom we regularly exercise, and this equipment will enable that to happen.

It’s still roughly 1 percent. We’ve hovered around that figure.

Well, we have the defence policy review under way at the moment, and that’s very much a strategic review. And we will assess our defence capability needs on the basis of that review, or the documents that come out of that review.

I’m keen to look at models overseas on how defence remuneration is dealt with. I wouldn’t want us to be in the situation again where we leave it for five year, as, in many cases, the people who we’re talking about today have waited to get a pay increase— so, look, other ways that we can determine defence remuneration, given that they can’t bargain collectively; they don’t have the rights of employees under the Employment Relations Act.

Perhaps if I could comment on the last part of the question and I’ll get the Minister to comment on the first part. Certainly the feedback that I’ve had from Defence Force personnel, when I have seen them in action in those cyclone and flood-affected regions, is that they are very engaged and very motivated by that work. It’s work that they enjoy doing, and they get a great sense of satisfaction out of it. So that’s probably likely to be on the plus side, in terms of keeping people in the Defence Force. But, on the first part of the question, I’ll hand to the Minister.

All three services were heavily engaged in the response to Cyclone Gabrielle and, indeed, the Auckland flooding. It was probably one of the biggest deployments that we’ve had within New Zealand for many, many years. I think the challenge we faced was, if another incident had happened either in New Zealand or in the Pacific, we would have struggled to assemble a team to go. All that did was illustrate the magnitude of the problem that we’ve got. Again, because of the experience of what happened in March when the Chief of Defence Force offered lump-sum payments to most Defence Force personnel, that had an immediate effect of reducing the number of resignations, and, indeed, a withdrawal of a number of resignations—I’d be surprised if this didn’t have a similar effect.

How many resignations—

Look, I don’t have that precise figure, but the advice I got was that there was an immediate effect and resignations were withdrawn.

Oh, I don’t think it was in the hundreds—probably less than a hundred.

This is hardly a new phenomena. You know, people with a lot of disposable income who, perhaps, don’t feel the cost of living pressure give a lot of money to the National Party and to the ACT Party, and always have done. We rely on smaller donations from a larger number of people. That’s always been the case; I’m sure that will always be the case.

As I indicated, we tend to get a larger number of smaller donations from quite a wide range of people—past patterns suggest that, you know, the volume of those increases the closer we get to an election campaign. We will never outspend National and ACT—you know, they have people with very, very deep pockets supporting them, but that hasn’t stopped us being very competitive in previous election, and it’s certainly not going to stop us being very competitive at this one.

Ah, if they want to spend their time going relentlessly negative, which seems to be what they’ve been doing so far, that’s a matter for them.

Jo.

Yes, so she’s been an under-secretary with the education-related responsibilities. She’ll now sit down with Jan Tinetti, the Minister, and work out the best way of converting that into an associate ministerial role.

Ah, certainly I left her several messages whilst I was in London—I think the first one just after I landed in London and got messages from back home. I haven’t heard back from her as a result of those. I guess, the time has kind of passed, really, in the sense that she’s made and announced her decision. Whilst I regret that, and I’m disappointed by that, ultimately it’s happened now, so I’m not sure that there would be a lot to be gained from a conversation between the two of us.

Well, she’s got my number. She’s certainly welcome to call me anytime.

I’ll come back to you, yep.

Look, I have absolute confidence in Kieran McAnulty’s ability to pick up that work and to provide good leadership there. Of course, the southern-most part of the Hawke’s Bay is actually within his electorate, so he’s already got some involvement in that work. And I think he’s a safe pair of hands. I think he will do a very good job there. Ultimately, I’m disappointed for the people of the Hawke’s Bay - Tai Rāwhiti region—that Meka chose to walk away from that role, because she did have an ability to effect change and to help to lead change in that area, but that’s ultimately her decision, and you know, it’s done, really: she’s made that call and now we have to move on.

I already had a conversation with King Tūheitia at the time, so as far as I’m concerned the matter has been resolved; I’ve had a direct conversation with him about it. I think it was regrettable at the time. And I’ve also, in my conversation with the Minister, just suggested to her that a little bit of work is done on the part of MFAT to make sure that when incorporating Māori in events around the globe that the tikanga is well established well before and everyone’s clear what’s expected and what’s been agreed so that we don’t have these sorts of things in the future. Because I think that was regrettable; it was avoidable, and I think we can avoid having those kind of things happen in the future.

Yes, I can. It was made by a New Zealander based in London, who was in France and New Zealand’s ambassador to France noted it. I’m not sure exactly what the timing was that that happened, and it was actually gifted then to the New Zealand embassy in France for wearing on ceremonial occasions. So it was sent over to London for me to wear to the coronation, and I was very, very proud to be able to do that.

No. Look, I think there were several mistakes along the way, and Phil Goff himself admitted—in the moment, in fact—that he had made a mistake in that he got the order of proceedings wrong. And so I think there was a combination of factors there. But like I said, I think they can all be avoided in the future with the right preparation, and so I think it’s a good reminder to sharpen up.

Look, I’d describe myself as a “theoretical republican” and that’s a view that I’ve held for a long period of time. Having said that, the constitutional arrangements that we have work at the moment, and there is no pressing need for change; nor do I sense a groundswell of support amongst New Zealanders for there to be a change. There have been several moments in the last year or so where if there was going to be a groundswell towards that, we would have seen that by now and we haven’t.

Ultimately it’s a question for New Zealanders. It’s not something that I’m putting front and centre of my programme: I think we’ve got more pressing issues at the moment.

Look, I think it will become clear when New Zealanders are ready to have that debate, and whether there’s an appetite for it. I don’t think there’s an appetite for it at the moment.

In regard to Willie Jackson, my understanding is that the issues there have now been resolved. And some of it was to do—I think there was some staffing issues in terms of people coming and going, and so on. If you look at the overall timeliness and compliance with the Official Information Act—and if you look at the volume of Official Information Act requests that we’re dealing with across Government—we’ve seen significant improvement. So a lot more OIA requests, and they’re being responded to faster and with more compliance to the time frames required in the Act—very, very high levels of compliance. From time to time, there will be things that crop up. It’s the job of the Ombudsman to follow those up and to make sure the Act is being complied with, and I’ve got confidence that the Ombudsman’s doing that and doing that vigorously.

Well, there will be occasions where the Ombudsman will question judgments that Ministers make under the Official Information Act. That’s the role of the Ombudsman; that’s the reason for having the Ombudsman. I have been in a situation, in my past ministerial roles, where I’ve disagreed with the Ombudsman and we’ve had significant discussion about it and we’ve usually been able to resolve that. But the reality is there are always going to be matters of judgment involved in Official Information Act requests. One of the reasons that we’ve got someone independent to cast an eye over those judgments is to make sure that the public interest is being, you know, really jealously guarded in those decisions.

Look, ultimately, the Ombudsman has the ability to follow that up. The Ombudsman, of course, has the ability to raise issues with me as Prime Minister in the event that he wished to do that. I don’t know all of the specifics of that case; haven’t had a chance to look into them. But I absolutely expect Ministers to comply with their obligations under the OIA, and where asked for information from the Ombudsman, I would expect them to comply with that as well.

No, it doesn’t change anything for me. As I indicated, I saw the transcript at the time and I made my judgment based on that transcript at the time. I said at the time I thought her comments were unwise and I continue to think that her comments were unwise, but I don’t think they reach the threshold for further action from me.

It’s ultimately RNZ’s information, so it’s their decision around when it’s released and to whom it’s released.

I think we’ve previously signalled that we’re concerned about the level of bank profits and that’s something that we will take some time to look at. I haven’t got an announcement for you on that particular topic today, but it is something that we have foreshadowed previously that we would look at.

I certainly wouldn’t rule that out. Like I said, I’m not announcing anything on that front today.

I don’t think there was an ill intention there. I think—you know, plenty of people will have been talking about the fact that King Charles’ coronation is a once in a lifetime thing and not something they will have seen in their lifetime. I don’t think that that was ever intended by anyone who would have said that to in any way diminish the coronation of King Tūheitia here in New Zealand. So I think it is regrettable if that’s the way it’s being interpreted and I think, as I indicated at the time, it’s a good reminder to make sure that we’re careful in the language that we use around these things.

As I’ve indicated, I don’t think that that was intended and I had a conversation with King Tūheitia there, in London, about that very issue. So I think we’ve resolved that particular issue, but of course we always need to be looking to make sure that we’re careful around the tikanga for what we do when we’re overseas, particularly where we’re asking our Māori leaders to be involved in those things. I think it’s important that we make sure that we’re really clear on those things and everybody understands what the process is and what’s to be expected.

I’m perfecting the new art of sausage roll diplomacy. I think it’s working quite well for us so far.

I do. I’m a big fan of sausage rolls—absolutely.

So in answer to the first part of your question, not in the last few weeks. In answer to the second part of your question, they’re completely unrelated events.

The issues around compensation, around managed retreat and so on, of course are integral to our overall work on the cyclone recovery and response, and, similarly, with the Auckland floods as well. These are not easy issues, and we’ve got to make sure that we are being clear, transparent, and fair in the decision that we take, and that does take some time. If we look post Christchurch earthquakes, for example, it was months before early decisions were taken on that. The first decisions around red zoning, for example, I think were taken in June the year following the September quakes. You know, these things take time. We will of course be working to expedite the process and get decisions as quickly as we can, and that will include, you know, questions around what we’re doing, who’s going to pay, and where the burden for all of that rests.

Auckland Council certainly is a significant stakeholder in this process, and so I do expect that, you know, they’ll be involved in these discussions. I’m not going to draw hard-and-fast rules about who pays what until we’ve actually worked our way through that process.

It didn’t come up specifically in my conversations with King Charles, but it did come up in a lot of the interviews and discussions that were taking place around the coronation, because there is global interest in this particular topic.

And so I was able to speak from New Zealand’s experience. So we have an agreed process around how we deal with some of those past effects of colonisation, some of the past injustices, through the Treaty settlement process, through—on a more contemporary basis— the Waitangi Tribunal. And I think that, whilst from time to time that results in uncomfortable conversations, I think it’s a process that is serving New Zealand well; I think it’s a process we should see through and I think we’ve made progress on it and I think we continue to make progress. I think we continue to seek to be better, and that’s something that, as a country, we should always aspire to do. I don’t think it’s for us, as New Zealanders, to say what should happen in other countries, but I would note on those issues, for example, around Crown apologies, the Crown apologies, including, in some cases, directly delivered by the Crown, have been a part of our Treaty settlement.

Ultimately it’s a question for the monarchy with each of the individual countries. We have a process in New Zealand, which I’m quite proud of.

Not really.

I did indeed read out the oath part, as I did when I made the similar pledge when I became Prime Minister. I was, in fact, the first Prime Minister to pledge to do so, given that I’m the first Prime Minister to be sworn in since the succession.

Ultimately, I think the New Zealand Government position on this is very clear: we would far rather the America’s Cup is being hosted in New Zealand. We put quite a lot of effort and work into supporting the bid for the event to be hosted here in New Zealand. Ultimately, it’s a matter for Team New Zealand rather than for us as to what hosting arrangements are. They chose not to go with New Zealand, so really the question should go to them.

Same answer that we’ve given with other significant sporting events: it’s a matter for the sporting body concerned.

Two things: first of all, I understand it’s your birthday today, so happy birthday; secondly, the changes in citizenship rules in Australia are yet to take effect. There is a residency requirement before that happens. And in any event, I think most New Zealanders who want to do military service want to do so for their country, for New Zealand, and I’m confident that will continue.

That’s not under consideration at the moment.

I will take just a few more questions—I know you’ve all missed me. Up the back?

That’s ultimately a matter for them.

They were the ones that took the record.

I believe it was supplied by them.

Ultimately, I don’t know what Meka’s reasons were, she hasn’t shared those—so that’s really a question for her. Of course, I’m disappointed that she’s left; I think she was making a valuable contribution. I wouldn’t have kept her as a Minister if I didn’t think that she was making a valuable contribution. So I’m disappointed that she left, but those are ultimately questions for her.

I’m not familiar with the details of that case, Claudette, I’m sorry, so I can’t help—

Yeah. I’m not familiar with the underlying legal issues to it, so I’m sorry—I don’t have a useful comment to make.

Our policy on that hasn’t changed. So I don’t have it right in front of me at the moment, but our policy on that has not changed; it will be the same.

As I’ve indicated, I don’t have the policy in front of me, you know, to identify whether there are any specific conditions or whatever that we placed on that, but I don’t intend to change the policy.

Like I said, I don’t intend to change the policy. All right, thanks, everybody.