Appropriation (2010/11 Supplementary Estimates) Bill

I rise in this Committee stage to address the amendments set out on Supplementary Order Paper 246, in the context of the broader bill. The debate that preceded the dinner hour continued the themes, in part, of the Budget debate that preceded this Appropriation (2010/11 Supplementary Estimates) Bill. The broad themes of that debate were that the country is in a difficult situation. Most New Zealanders understand that total debt is too high, although only some realise that it is nearly all private debt, not public debt. This is an important context to the debate and to these amendments.

Most people are worried about the security of their jobs and the rising cost of living. What is important for us as a Labour Opposition to get across—

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the member but can I just point out that the debate needs to be to clause 5(1)(a). It specifically states “The Supplementary Estimates of Appropriations” and goes on to state “Addition to the Supplementary Estimates” as well. The member needs to speak directly to these in order to facilitate the debate.

The definitional issue that is contained in Supplementary Order Paper 246 is around replacing part of the definition of “Supplementary Estimates”, to substitute the following: firstly, “(a) The Supplementary Estimates of Appropriations for the Government of New Zealand and Supporting Information …”, which is document B.7. In addition, there is “(b) Addition to the Supplementary Estimates of Appropriations for the Government of New Zealand and Supporting Information for the year ending 30 June 2011”; B.7, Volume 2. There is the consequent insertion of an item, schedule 1, in respect of Vote Canterbury Earthquake Recovery, which is a matter that the Finance and Expenditure Committee will be discussing tomorrow at its hearings. That covers some non-departmental output expenses of—I assume this is in thousands—$27 million for Canterbury earthquake property demolitions and another $3 million for non-departmental capital expenditure.

Mr Chairperson, this brings me back to where I was before you inserted your ruling, which is that the country recognises it is in a difficult state. One of the reasons for that, but by no means the only reason, is the series of tragic earthquakes in Canterbury. They have taken their toll of human life, tragically. They have taken their toll of material and financial resources, to the tune of some $15 billion, and the departmental output expense that we see before us is a small proportion of the total cost to New Zealand. But those Canterbury earthquakes have, more than that, taken their toll of our spirit, of New Zealanders’ spirit. It is funny the conversations one has on an aeroplane. I was sitting next to a gentleman recently who said: “You know, it almost feels like the country is in a wartime situation.” I thought there was great wisdom in that remark. It presents both challenge and opportunity—challenge because in wartime people tend to hunker down, and opportunity because they think in the end about what it means to be a citizen of their country, to be a New Zealander. We learn to pull together, to rise to face the challenge before us.

The Canterbury earthquake reflection in this Supplementary Order Paper is part of that, but it goes deeper and broader. In order to get out of the rut we are in, which only partially is created by the cost of the earthquake, New Zealanders are hungering and thirsting to see a plan—a responsible, non-partisan, fair, data-driven plan that will get people back to work and get our economy moving. Mr Chairperson, I see your signals and I submit to you that this is absolutely within scope. We cannot discuss the addition to the supplementary estimates from the Canterbury earthquake unless we understand the context—

💬 Chris Tremain: $27,000 for demolitions and related costs.

I assume that that is in thousands, and it would be $27 million. That would be the normal convention. The chief Government whip would know that I have already covered that in these remarks. If we are in a wartime circumstance, if New Zealanders are to move together, out of this rut, if we are to cover the expenses of the Canterbury earthquake represented in this Supplementary Order Paper, then we will have to have a plan for growth and for jobs; not a plan to sell off assets. Selling off assets is the antithesis of rebuilding. It is stripping down.

New Zealanders do not want a response to the tragedies of Canterbury to be simply more retrenchment and more hardship. They are looking, if I turn a little more specifically to the situation facing Christchurch, for leadership from this Government, which since September last year has created not one new position of trade training in Christchurch, and which has not yet brought forward to the people of Christchurch a clear plan for those whose streets need to be bulldozed and whose streets will be rebuilt. We all know of, because we have seen the pictures and many of us have visited the area, families living with silt and liquefaction up to their ankles, broken floorboards, and houses that are whistling cold in the Canterbury winter, and that is not good enough. People also want to know not only whether their streets can be rebuilt, or where and when they might be assisted to move, but whether the insurance policy will cover the loss of their, in many cases, only asset—their family home. Of course, if they are insured the Earthquake Commission will cover a portion and private insurance will cover a portion, but it will not cover the lot, and for that gap there is huge anxiety. Every day that now passes is a day closer to the public of Christchurch saying that Mr Brownlee is not serving them well as the Minister for Canterbury Earthquake Recovery.

💬 Hon Dr Jonathan Coleman: Oh, don’t undermine him.

I say to Mr Coleman that it is taking just too long. People’s patience is wearing thin. With every passing day they get aftershocks—

💬 Hon Dr Jonathan Coleman: It’s not something to play politics on.

I am not playing politics. I am reflecting the sentiments expressed to me and my colleagues by the people of Christchurch.

The CHAIRPERSON (H V Ross Robertson): This is about process.

This Supplementary Order Paper is a supplementary appropriation for additional funds for the Canterbury earthquake recovery demolitions and associated costs and non-departmental expenditure in relation to the Canterbury Earthquake Recovery Authority. That is germane because the process in Canterbury is taking too long. Labour will be voting against the broad supplementary estimates, of course, but we would not stand in the way of additional funding for needed demolitions in Christchurch.

Canterbury has been suffering. Canterbury wants to rebuild, but I guess the broader point is that is an emblem for the whole of our country. New Zealand wants to rebuild. New Zealand did not elect the current Government just to cut costs on the Government Budget. Cost cutting has its uses, but it is nobody’s idea of a real plan. It is not a vision for the future, not a way of making New Zealand great, not a statement of the values that bind us together, and not a statement of how we will progress out of this rut and to a better place. But if the Minister in the chair, the Minister of Finance, thinks it is, perhaps he could take a call and explain to us how cost cutting takes New Zealand forward, why the Government does not currently appear to have a plan for jobs and growth, and why it is planning to sell off State assets as a substitute for a plan that creates value and creates jobs, getting people back into work and off benefits, thereby helping the fiscal balance. Why are we selling assets if instead we could have a real plan that created growth?

The CHAIRPERSON (H V Ross Robertson): Can I just say to the member that the first part of the debate is about the definition of “Supplementary Estimates”. What the member is getting into is the second part, schedule 1, where those things can be debated. But here it is more about process, about definition. It is a very narrow debate.

I raise a point of order, Mr Chairperson. My understanding was that in the introduction to this part of the Committee stage you were referring to both the clause 5(1) and the schedule 1 amendments, which are both contained on the Supplementary Order Paper.

The CHAIRPERSON (H V Ross Robertson): No, just clause 5(1).

All right. That would explain the disjuncture in our views.

💬 Chris Tremain: I raise a point of order, Mr Chairperson. I would like to bring your attention to Standing Order 107(2), which points to the fact that if the Chair brings the member speaking to account on more than one occasion—or in this case, on three or four occasions—with regard to relevance, the Chair may terminate the member’s speech. That is something that this side of the Committee would be pleased to see.

The CHAIRPERSON (H V Ross Robertson): The Chair will make that decision, thank you, Mr Tremain.

💬 Stuart Nash: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (H V Ross Robertson): Have I dealt with the issue?

💬 Stuart Nash: No, no; it is different. Are we dealing with Supplementary Order Paper 246, or just clause 5(1) on that Supplementary Order Paper? In that case, are we not allowed to talk about schedule 1 on Supplementary Order Paper 246?

The CHAIRPERSON (H V Ross Robertson): Schedule 1 is the next question. The amendment we are debating here is purely clause 5(1). There are two questions. We are just debating clause 5(1), which is about process and definition. Then we will get into schedule 1.

💬 Stuart Nash: Of Supplementary Order Paper 246?

The CHAIRPERSON (H V Ross Robertson): Of Supplementary Order Paper 246, yes.

Mr Chairperson, I gratefully accept your ruling, but I venture to say that if you reflect on the Hansard, I think you will find that you appeared to introduce the two questions, not just the two sub-questions of the first question—hence the approach that the Opposition has taken in this Committee stage.

If we are therefore not to talk about the substantive schedule, which relates to Canterbury, and if we are limited to clause 5(1), then that clause is obviously a simple procedural swap of certain documents in relation to the supplementary estimates. Key to that is that there is a great lack of transparency in some of the Budget documents that relate to the supplementary estimates. Our spokespeople have found when trawling through the Budget that it is sometimes very difficult and very opaque to find where the money has gone, with reference to the previous year’s spending and current output classes. The Government seems to have a habit of aggregating to a level where it is difficult for the public to follow what is being done. That has been made worse by several—I think grossly unprecedented—acts in this Budget, such as having a $980 million unspecified Budget reduction.

I will take just a brief call on the first question on Supplementary Order Paper 246, to come back to my understanding of this aspect and where we have come to on this matter. Clause 5(1) of the Appropriation (2010/11 Supplementary Estimates) Bill is amended, as we see in the Supplementary Order Paper. That amendment, in a substantive sense, adds paragraph (b) as it appears on the Supplementary Order Paper. It makes it very clear that the supplementary estimates include not only the usual realm of information, which is that in the supplementary estimates documents, but also the addition to the supplementary estimates.

We accept—and it was very clearly set out in the Finance and Expenditure Committee review of this issue—that that is an unusual situation. Normally, of course, all the supplementary estimates have to be presented to the House at the same time. But the point that is worth getting on record very early in this debate is simply to say that obviously an exceptional set of circumstances led to the need for this Supplementary Order Paper and therefore the need for this debate. It goes without saying, of course, that that was not only the Canterbury earthquakes in general but the specific earthquake of 22 February. The earthquake of 22 February was—and my maths is not exact—about only 6 weeks before the cut-off date for the completion and presentation of the supplementary estimates. In that time it was simply impossible to have any sense of the fiscal implications and what supplementary estimates would be required as a consequence of that event.

When we get to the second question we obviously can debate where those numbers have got to, but I thought it was worth just getting on record that process point—that the need for this Supplementary Order Paper, the need for the insertion of paragraph (b) in clause 5(1) simply reflects the time frame and the very small and insufficient window between the date of that deadly earthquake and the final cut-off date for the completion of the supplementary estimates. That is all I wanted to say on this clause. I just thought it was worth getting it on record, so that it was very clear from the outset why this unusual process was adopted in this case.

It was good to have clarification from Amy Adams, but as a first-term MP I would like to seek clarification from the Minister in the chair, the Minister of Finance, on this matter. As Ms Adams highlighted—

💬 Aaron Gilmore: Mrs Adams.

—Mrs Adams—it was 6 weeks between the February earthquake and the presentation of the estimates to Parliament. When we look at the figures in schedule 1 of the Appropriation (2010/11 Supplementary Estimates) Bill, which we will talk about soon, we see that they are very general. I was wondering whether, in fact, there is precedent for this. Did the Minister simply not have enough time? Or did he have an idea of how much money would be needed, but had determined that it was not ballpark enough, or was not robust enough, to actually put in the initial estimates? We are talking about a significant amount of money. We are talking about $28 million. We are talking about one specific event. Is there precedent around this process? What sort of decision-making process did the Minister, Cabinet, or the officials go through when they made the decision that they would hold back from putting those costs into the supplementary estimates?

It is not proper process. The whole of the supplementary estimates, as we know, has to go through a very good, very robust, very transparent process. But at some point there has to be a line in the sand that says we have to put that estimate in, because at some point we will be debating it next year, whether it is in or out.

Although it is a lot of money, in the scheme of things it is not a huge amount. I think, potentially, the Minister could have given an indication that it would cost us $20 million, or maybe $30 million. He could have put a figure in there and tightened it up a little bit later. Or did the amount range between $3 million and $300 million? I suppose I am asking the Minister of Finance whether the figure was so unknown or so wide that he really felt justified in taking it out, and then bringing a Supplementary Order Paper to Parliament for further debate.

I know that when a lot of my colleagues who are Christchurch MPs were reading through the supplementary estimates, they would have liked to know that this amendment would be here. I do not think it was signalled, even though we are talking about a natural disaster that occurred 6 weeks or 2 months before these estimates were presented to the House. It had actually occurred; it is not as if we are dealing with something that occurred after the estimates went to the printing press.

💬 Amy Adams: We were still in a rescue phase. There were still people being pulled out of buildings at that stage.

I understand that. We are not talking about search and rescue here.

💬 Amy Adams: No, I’m talking about the time frame.

Yes, and I understand that. I am not making a judgment, at all.

💬 Amy Adams: Just as well, because you weren’t there.

I am not making a judgment, I tell Ms Adams. I am asking questions in relation to how this process arose. I am not drawing any judgment on the Minister; I am not saying this is right or this is wrong. But I think it is important for the Minister to stand up and explain the sort of process that he and the officials went through when they determined that this was the best route to travel.

As I mentioned, I am not making any judgment whatsoever, but Mrs Adams stood up and said: “Obviously, this is what happened.” There is no “obviously” from Amy Adams, because she was not sitting around the Cabinet table. I could be wrong here, but I doubt that Mr English said that before he made a decision he had better go and check with Amy Adams, because she knows. He might have done that—he might have done that.

I am just curious, as I am sure some of my colleagues are, to know how this process arose, just so that if future precedent arises we can say that back in 2011 this is how the Minister did it, these are the tests he put in place, these are the people he consulted, and this is how it arose. That is all. It is just a simple process. As I mentioned, I am not making any judgments. I know that the Minister has been in the House for a long time, and, as a consequence, he will understand that it is often good to take a call just to clarify for a new member like me. I have not sat around the Cabinet table, so I do not know how this process works.

In a way, I suppose this is a selfish call, because I am just keen to know the process that the Minister used. That is all it is. Like I said, I am not passing judgment in any way, shape, or form, but ask whether the Minister could just stand up and explain it to the Committee, to the new members, and perhaps to a new member such as Amy Adams. She said it was obvious, but it is not obvious to me. Maybe Ms Adams is a lot more intelligent than I am, so it is obvious to her. I have no doubt that the Minister consulted Aaron Gilmore.

I thank the member who has just resumed his seat, Stuart Nash, for his kind invitation to help clarify these matters. I think the first question he raised was about who had been consulted before decisions were made by the Minister of Finance and Cabinet. Of course, we do consult Mrs Adams and the other knowledgable members of the caucus, which means all of them. It is a very democratic caucus, and a very democratic process. I have to admit that not every member of the Government or Cabinet will have their head around just how the supplementary estimates, or changes to them, work, so I will explain it. Mrs Adams and the chief Government whip made a good point, which was that these matters were all dealt with while we were in recovery mode following the earthquake.

The sequence, as I recall it, was that there was a strong push to set up the Canterbury Earthquake Recovery Authority, and the House, including the Opposition, was notably cooperative in getting that entity set up. Because it was a new Government department, the focus at the time was particularly on its powers, rather than on some extensively thought-through budgeting process about exactly what activities it would have. Certainly it was not a process that we would replicate in Government; we would not usually set up a new entity without a lot more clarity about exactly what funding it would require, at least for the next 12 months.

In this case the authority was set up and there was a big focus on making sure it could pick up civil defence emergency management powers so that it could get on with the job of getting the recovery under way. At the time, it was set up with a budget of about $4 million, which was intended to be an administrative budget, and enough to put in place the authority’s people and its capacity to work with the council and exercise some of those powers.

Within a fairly short time it became apparent that it had to get on quite quickly with some practical tasks, particularly to do with demolition. It has been surprising to those of us who have spent a bit of time on it just how complicated these issues can get, quite quickly. So the authority was set up, but the deadline for finalising the details of the supplementary estimates passed in early April. The authority was set up on 29 March, and within about 10 days the supplementary estimates deadline of 10 or 14 days had passed. At the same time, a discussion was going on about what the authority could or could not do, bearing in mind that at this time it had no chief executive, staff, or premises. But because of the urgency of the situation the Government was already aware, particularly under the decisive supervision of the Minister for Canterbury Earthquake Recovery, my colleague the Hon Gerry Brownlee, that there was work to be done.

The money that was then required to allow the authority to get on with the demolitions could not be obtained through the supplementary estimates. In other circumstances and with other departments we might have been able to shift money around, perhaps, but even then it would have been after the supplementary estimates deadline. We did not really have the choice of waiting around to be able to appropriate the money later on in the process that necessarily has to go on between Parliament and the executive. The ideal choice would have been that we would know enough about the activities of the authority within a week of its being set up—and I have to say that that would have been a bit difficult. On the other hand, we could not really have waited around for the next phase, because a big part of the commitment that I think we have all made to the rebuilding of Canterbury is that we should make those decisions that can practicably be made as quickly as possible, in order to build confidence in the face of what are fairly difficult circumstances.

So that is how we have ended up here with this Supplementary Order Paper, which covers about $27 million for property demolition and related costs and compensation, allowing some money for demolition-related property purchases. That all applies to the central business district, where significant progress has been made, with the latest estimate I saw showing that several hundred buildings have been demolished. That progress is not visible to many people, but part of recent progress has been the capacity of the authority to exercise the powers that this Parliament has given it to encourage and occasionally compel building owners to get on with the job. At the same time, it has needed the funds to exercise those powers.

I know that the Committee is approaching this particular issue with goodwill, and it is really the demanding circumstances of getting the authority up and running that have put us in an unusual set of circumstances. The member asked whether there is some kind of precedent. In a procedural sense there is no particular difficulty with carrying out this procedure, but I do not think it has been done for some time. I would expect that in the normal process of good Government it would happen very rarely.

I thank the Minister in the chair, the Minister of Finance, for his clarification of the process, because it is an unusual one, and we are grateful for that clarification. We on this side of the Chamber absolutely understand the need for these measures, and the exigencies of the events in Christchurch that have led to the process that is outlined in clause 5(1) on Supplementary Order Paper 246.

Clearly, the Government has been confronted with an extraordinary set of circumstances, and mother Nature has no regard for the timing of processes of Parliament and Budget appropriations, but there is one further question I would like to ask about clause 5(1) on the Supplementary Order Paper, and I wonder whether the Minister could answer this question, as well. I do not wish to be pedantic, and I absolutely understand the need for additional supplementary estimates in these circumstances, so I am not contesting that need, at all, but I wonder whether the paragraphs of the amendment are numbered correctly. This question goes to the haste with which we make laws, and the question of whether they are sufficiently scrutinised. Of course, Supplementary Order Papers generally do not get the chance for any other scrutiny except on the floor of this Chamber in the course of this kind of Committee stage.

This first part of Supplementary Order Paper 246 seeks to omit the definition of “Supplementary Estimates” that is stated in clause 5 of the Appropriation (2011/12 Supplementary Estimates) Bill. I am seeking clarification, because the existing clause 5(1) already has paragraphs (a), (b), and (c). It also includes, without a number, a definition of “Supplementary Estimates” that this Supplementary Order Paper is seeking to replace by the addition of a further sentence. My question concerns the numbering of those provisions. When we already have paragraphs (a), (b), and (c), should not these new paragraphs be paragraphs (d) and (e) of clause 5(1)? That would make it clearer that the provisions are still part of clause 5(1) in the bill that is under discussion at the moment. I am not sure whether that is an error, or whether it is obvious to everybody else, but it would seem to me that instead of the new paragraphs being (a) and (b), as they are currently on the Supplementary Order Paper, they ought to be (d) and (e), in order to fit with the bill that is currently under discussion.

Paragraph (a), as it reads on the Supplementary Order Paper, is already in the bill, so that is not being altered, at all. The words are the same, except for the addition of “and”. Paragraph (b) concerns the addition to the supplementary estimates, which is the money that is wanted to go towards some part of the repair in Christchurch.

So I ask the Minister whether that is deliberate—or ask the officials advising the Minister whether that is deliberate—and accurate, or whether it is simply something that has been done in haste and would result in there being a clause 5(1)(a), (b), and (c), then further paragraphs (a) and (b). I think, in order to get it right, it would be good if the Supplementary Order Paper were amended to read paragraphs (d) and (e).

Having said that, I also tell the Committee that I have not furnished a handwritten or hastily scrawled amendment to the Supplementary Order Paper because I am seeking the Minister’s advice on this matter. If that clause can be aligned without further complication in this Committee of the whole House stage, and aligned with the original bill that is under discussion, then I think that it would help everybody’s understanding of this matter. Thank you.

The question was put that the amendment set out on Supplementary Order Paper 246 in the name of the Hon Bill English to clause 5(1) be agreed to.

Amendment agreed to.

Clause 5(1) as amended agreed to.

Schedule 1

The CHAIRPERSON (H V Ross Robertson): We now move to the amendment to schedule 1. The question is that the amendment to schedule 1 to the item relating to Vote Canterbury Earthquake Recovery set out on Supplementary Order Paper 246 be agreed to.