Annual Review Debate — External Sector

Well, I will take the member who called first, then. Annette King.

As a new member of the Foreign Affairs, Defence and Trade Committee, I was not able to be there for the annual review, but I have read with interest the report that came out of that committee.

But I want to begin by congratulating the new Minister of Foreign Affairs, the Hon Gerry Brownlee. Gerry, I think, is well positioned to take this place. He is very pragmatic, he does have very good chairing ability, and I think one thing he is going to need in this portfolio is a good sense of humour—and Gerry has all those attributes. Actually, I think he will probably be a very good Minister of Foreign Affairs following on from Mr McCully, who had rather a rocky road in this area.

When I looked at the annual review, there were a number of things that stood out for me from the report. First of all, the Auditor-General recommended that there needed to be some improvements in the ministry’s management of its control environment, its financial systems, and a number of other areas. Although I cannot be explicit about that, I am sure the committee will be keeping a watchful eye for improvement next year when the officials appear before them.

But the thing that really stood out for me was the report on New Zealand’s time on the Security Council of the UN—our 2-year stint on the Security Council. As we all know, it took a lot of work going right back to the Rt Hon Helen Clark to prepare for our bid to get on the Security Council, which we achieved. One of the standout achievements, if you like, of our time on the council has to be UN Resolution 2334, which was adopted in the last minutes of our time on that council, on 23 December last year, when New Zealand was one of the movers of this resolution. It was voted on by all members except the US, which abstained, and it was the resolution to reaffirm the position of Governments of New Zealand, not just this Government but previous Governments over many years, that settlements established by Israel in the occupied Palestinian territories are illegal—are illegal—and are a major obstacle to achieving a two-State solution.

That was a very significant move by New Zealand. It did not go without criticism from Israel. In fact, there was diplomatic retaliation at the time, and I have to say that I was pleased to see that the Minister of Foreign Affairs, Mr Brownlee, has said today that he is going to move swiftly to restore diplomatic relations with Israel, and he has already written to Prime Minister Netanyahu. But he also said at the Foreign Affairs, Defence and Trade Committee that New Zealand is committed to speaking out against the settlement, and it does not matter what the views of the Prime Minister of Israel are—that is the position we have held and held strongly for a long time. But of course we want to improve diplomatic relations with Israel, which has been a long-time friend of New Zealand.

The second issue that was raised in the report is how well our representation did on the Security Council in terms of the developing small Island States. I suppose the way you can judge that is from what those small States said in their feedback, and they believed that our time on the Security Council was pretty successful, particularly in our ability to champion the small States at the Security Council. In fact, we managed to ensure that there was a session held on behalf of the small States where for the first time they got to speak at the Security Council, so that can be ticked off as an achievement from our time there.

But perhaps the most controversial thing that came out of the report is the Auditor-General’s inquiry into the Saudi Arabia food security partnership. It is quite obvious that the new head of foreign affairs, the Secretary of Foreign Affairs and Trade, said that he accepts the Auditor-General’s criticisms that were made of the handling of a very sensitive issue—handling where it appears as if the officials themselves were provided advice as to how they could deflect questions from committee members at last year’s annual review. I do not believe that issue is dead.

Before I call Todd Muller, I do want to apologise. Amongst a number of things I am out of date on was the chair of that committee. I should have called him first. I apologise to him. I am informed not only that he is the chair but that he is doing a very good job.

Thank you very much, Mr Chairman. Actually, in many respects it is very appropriate that Annette went first. She is very much the mother of the committee—

💬 Hon Annette King: What are you—the grandad?

No, no, I mean that in a very warm and kind way.

💬 Hon Annette King: I’m sure.

I do. I do mean it. But, firstly, before I get into a substantial conversation on the review that we had, I really cannot stand here without acknowledging the extraordinary contribution of the former foreign affairs Minister Murray McCully, particularly his ability to take New Zealand’s values, interests, and intent with conviction and effect to the world stage. I think he has done that extraordinarily well. I was in Suva 3 weeks ago, attending on behalf of New Zealand a foreign affairs economics Ministers meeting—there were 15 there—and every one of the 15 came up to me personally and asked after Minister McCully. It was very clear to me that he has made an extremely deep personal connection with those particular Pacific Island nations and he is certainly going to be missed.

I raise that because it talks to some of the key themes that came through our foreign affairs, defence, and trade review. One was the deep capability that resides in that ministry, and the value that is put on people and relationships and on building enduring relationships across the world to progress New Zealand’s interests.

Annette King has, I think, touched on an area in respect of our Security Council participation that I also wanted to give highlight to. That relates to the small Island States and how effective we were in advocating for them on the world stage but backing up that rhetoric with real concrete actions in terms of providing a forum for the small, developing nation States to actually get a forum across the whole United Nations—the first time that this has ever happened.

But I think, more critically for me, as we listened to the feedback from Brook Barrington and his team, was it just did not stop there. There was an ongoing investment in those relationships and those countries to ensure that beyond that debate, the actions that were committed to at that time were reported back on regularly to make sure they felt connected with New Zealand’s efforts on the Security Council. I thought that was impressive, and it was very impressive to hear that from Brook and the team from the Ministry of Foreign Affairs and Trade.

Obviously, in terms of defence, again an acknowledgment, I think, absolutely is due to the outgoing Minister of Defence and new Minister of Foreign Affairs, Gerry Brownlee. You know, defence is one of those areas that, when you are looking at the priorities of Government spending, you can potentially argue—as many previous administrations have—that there are greater priorities than the defence of the Realm, and particularly the expensive assets required to make that more than just rhetoric. He has driven the Defence Capability Plan, and we heard that very explicitly through the review process—the $20 billion that has been set aside for defence, to be spent through to 2030.

The couple of things that really impressed me, to go back to the theme that I would like to draw on this afternoon around capability, were the Defence Force was very clear that to actually execute a $20 billion capital project plan over the next 14 years, real capability and people and systems and process were going to be required. We heard that there is an investment of $27 million over 4 years, employing 25 new staff in 2016 and a further 30 in 2017, to ensure that this programme of significant capital investment is actually delivered. From my own personal experience, procurement is one thing, but delivering and operationalising it and actually getting it done on time and on budget requires top people applying themselves effectively every day, and that is the confidence we got from the Defence Force as it spoke to the investment going in to make sure that that happened.

I do—just to finish—want to make acknowledgment of Todd McClay, our Minister of Trade and a fellow neighbour MP. Again, we heard through the Ministry of Foreign Affairs and Trade update to the Foreign Affairs, Defence and Trade Committee of the extraordinary work that is going on to promote New Zealand’s interests. A number of our questions, as you would expect, related to our trade interests and how they were being impacted on post-Brexit and post the Trump administration. The Minister can be assured we got some very, very impressive responses from the team there at the Ministry of Foreign Affairs and Trade. Indeed, a number of the questions we raised have been subsequently answered with the extraordinary announcement over the last few weeks of our Trade Agenda 2030, which will see $91.3 million of new funding spent over 4 years in the Budget.

Again, just to conclude, why I think this is so critical is it reinforces the point that you need to back rhetoric with capability and people whom you back around the world to be able to take New Zealand’s interests to the world in an effective, competent manner. The message we got from our review is that we have that in spades, and New Zealand’s interests are being well enhanced. Thank you.

I would very much like to pick up on what I take to be the recurrent theme in the intervention of the previous speaker, Todd Muller, because I agree with it very much—that is to say, the superb capability of the diplomats in the Ministry of Foreign Affairs and Trade, who serve New Zealand very well. It comes through to some extent in the report, and that is to be commended. I have to actually add, however, that that includes primus inter pares, Derek Leask and Nigel Fyfe, to whom the State Services Commissioner unreservedly apologised in December last year for being unfairly treated in the Rebstock report, which we recall very clearly. This Parliament can only hope that Dame Paula Rebstock, described by the State Services Commissioner as possessing “immense talent” that could still be used in the future, will not produce further reports that will be, in the judgment of the Ombudsman, “seriously flawed in multiple respects” and unfairly single out future outstanding New Zealanders who work in the best interests of the ministry and this country.

On to more positive things, and I agree with the Hon Annette King that there is a lot in the development of foreign policy in the last year or two that can be commended, particularly the New Zealand support for promoting Security Council Resolution 2334 on Israeli settlements. It is a complicated situation, but the complexities and the sensitivities there do not absolve Israel of the obligation to respect international law. I am aware of Israel’s legal argumentation, and I respect it. I disagree with it, but I respect it, and I think it should be encouraged to put it to independent, objective international judgment.

The other very positive feature, as Annette King did say, was the thematic debate that New Zealand undertook in July 2015, when it had the presidency, on the security of small Island States. I made a point of going up to that meeting, and I have to say it was one of the more impressive meetings out of many, many UN meetings that I have participated in or observed. It was an outstanding day of debate, with 77 leaders, heads of Government, and Foreign Ministers somewhat passionately—and that is unusual for the Security Council—addressing the situation. It was not just climate change. It was piracy, money-laundering, and, of course, sea-level rise but, above all, a plea to all countries coming through from those leaders—and not least to New Zealand in the chair—to undertake more ambitious efforts at emissions mitigation for the sake of avoiding future climate change that will pose not simply an existential threat to those States but, actually, will have them disappear, in some cases.

We do not have time to explore the merits of whether the Security Council should actually undertake more responsibility for climate change. The British and the Germans have sought to have the Security Council declare climate change to be a threat to international peace and security, and the council has stopped short in each case, to this day. It simply describes it as a risk multiplier—a multiplier of other risks—to peace and security, but it has not declared climate change to be such, and that is for the future. To be critical, New Zealand could have pushed that a little bit further in that debate, but, that aside, the debate was superb and it was a commendation to the Government.

Leadership on nuclear disarmament—we look at North Korea and the problem we have there. That was touched on there in the report: how to cooperate under the Trump administration. Just regard Israel’s nuclear weapon programme as not that dissimilar to the North Korean nuclear weapons programme, and let us get a balanced approach to nuclear disarmament. Thank you.

Can I thank colleagues for their praise and their words in support of officials in the Ministry of Foreign Affairs and Trade (MFAT) and the Ministry of Defence. I think our diplomats do extremely well for New Zealand overseas. Indeed, over the last year or so, as the Minister of Trade, when I go to negotiations, we have a small team of very focused, very experienced people. Most other countries have delegations that are four, five, sometimes six times as large as the New Zealand delegation, but I think that for our relative size we not only hold our own, we continue to deliver on behalf of New Zealand. Our diplomats, our mandarins, are unseen and unheard—at least they were previously, but I continue to encourage them to be more outward looking, to engage more with New Zealanders, and to talk more about what they are doing. It is not something that sits comfortably within the field of diplomacy and foreign affairs, but I think that all New Zealanders will be richer for knowing the work that they are doing.

I would like to thank the Foreign Affairs, Defence and Trade Committee for its report. I know from the MFAT officials who attended the hearing that they were pressed very hard. They were challenged in a number of areas. My view, having previously sat on that committee, is that it is Parliament’s and the committee’s job to test not only our ministries but, certainly, our Ministers, and so I think the committee’s report is extremely useful.

I want to just touch on a couple of trade negotiation areas, if I may, that have come out of the annual review, and just give a bit of additional information to the Committee. I would like to start with the PACER-Plus agreement. New Zealand has no stronger relationship with any group of countries than we do with the small and often vulnerable Pacific Island countries. Eight years ago a trade negotiation was started with these countries, and it was to make sure that the trade that we had in other agreements would be modern and up to date. Eight years later, I am very pleased to inform the Committee that we have just concluded that negotiation with 12 of the 14 Pacific Island countries.

But it is not actually a trade agreement; it is a development and trade agreement. The reason for that is that it is very important that we look to work with these Pacific Island countries to find ways to help them grow their capacity, to grow their economies, to be able to sell, to trade more with New Zealand and Australia and, indeed, the rest of the world. We are working through with some of our partner countries as to when we can release the document—they have different procedures than we do—but it is my intention to release it to this House and to the public before it is signed, as we have done with previous agreements. It is a high-quality agreement that I think we should stand behind, because it is as much about development as it is around trade.

The other thing that I think is very important and at the top of people’s minds at the moment is the European Union, the UK, and Brexit. Officials from foreign affairs, and I as Minister, have spent a lot of time over the last year or so in Europe, talking to those countries about why we need a free-trade agreement (FTA). In the report, the question was why we have not got one yet, while other countries have. It is an excellent question from the committee. Indeed, it is because nobody owes New Zealand a living. We are 4.5 million people a long way from anywhere in the rest of the world, and we have to go to find good reasons for others to want to do trade deals with us. There are only six countries in the World Trade Organization that do not have an FTA with the European Union, and we are one of those, but I am very pleased that we have finished the scoping exercise and, with the European Commissioner for Trade, I announced just a month or so ago that each side is now going to seek a mandate so that we can formally launch that negotiation.

Of course, the European Union will be occupied and preoccupied with Brexit and the UK. I am very pleased to say also that in a meeting I had with the UK trade secretary, Liam Fox, he confirmed for us earlier this year for the first time that New Zealand will be the first cab off the rank, along with Australia, for their new FTAs once Brexit is finished, once they are out. In the meantime, we have created a trade policy dialogue with them to continue that work and to deepen that relationship.

That is just a demonstration of the work that MFAT has done over many years, and why successive New Zealand Governments and Ministers have spent a lot of time in trade overseas. Nobody owes us a living. We have to be over there, reminding them of why we are important, making the case for better and fairer access for Kiwis to these markets, and finding every single advantage that we can. The Ministry of Foreign Affairs and Trade has certainly done that for us in so far as the EU and the UK are concerned. It has not for PACER-Plus because PACER-Plus is not actually about fairness to us; it is about a fair deal for our friends in the Pacific. Thank you.

I rise on behalf of New Zealand First to speak specifically around defence, the Ministry of Defence, and the Defence Force. I have got to say, in response to some of the very generous comments that have been made about the Ministry of Foreign Affairs and Trade (MFAT) and how well it does, that some of us would argue that it has never done as well as it did under the leadership of the Rt Hon Winston Peters—since those days of a Labour-National coalition arrangement. Some would argue that, in actual fact, MFAT has gone back under the leadership of Mr McCully. We wait with our breaths held to see what happens under the leadership of Gerry Brownlee. The jury will stay out on that one.

It is interesting, looking at the Foreign Affairs, Defence and Trade Committee report on the annual review—and I will say, just for Minister McClay’s benefit, that we are talking about 2015-16, not yesterday or today. It is interesting, the things that were discussed. Defence House was questioned. I would point out to the Committee that in this briefing from Defence Force officials there was no mention made of the fact that the Defence Force building is going to have to come down, yet they knew. They knew. We subsequently revealed that information through press releases and in questions in this House, and we were proven correct.

The question that now remains is what is being kept from us by the Defence Force so that it does not embarrass whomever. But there are serious questions about the design and the configuration of the AMP Capital - owned building, and the cost that now has been borne by the Defence Force through virtue of the fact that it has had to be relocated and has lost however many man-hours, person-hours—we do not know—as a consequence of a building that was built, what, 7 or 11 years ago. It was supposedly going to withstand hell, because it was our Defence Force headquarters building. Subsequently, it has not performed as well as the Thistle Inn pub just down the road.

On Ministry of Defence funding, we in New Zealand First note that 2015 funding income—sorry, the Ministry of Defence, $14 million, expenditure $14 million. It came up with a surplus of $38,000. It sounds to me like very fine-tuned expenditure. Maybe we should have had a look to see how much it spent in the last 4 months of that fiscal year, to see whether it was wise spending to get down to only $38,000 in the kitty. It did not get to zero, so, you know, that is interesting. The Defence Force itself—the budget is $2.484 billion. There was a lot of trumpeting about the Defence Capability Plan and the injection of $20 billion.

I will come to that more later on, but New Zealand First still says that that is slightly less than 1 percent of GDP. We fundamentally disagree with Labour and National’s view of our responsibility for maintaining a defence force. We believe it should be 2 percent of GDP, end of story. It actually staggers the minds of National Party people who are joining New Zealand First that the National Government has walked away from that commitment. Do not laugh, Mr Bishop. Do not laugh, Mr Bishop. They will be in this House, looking straight at you, after the September election. Mark Patterson—it is looking like he is shaping up to be a wonderful candidate down in Clutha-Southland. The Defence Force, we say, is underfunded. Chris Bishop thinks that the Defence Force is well funded at less than 1 percent of GDP; we do not.

I want to have a look at the auditor’s report and what was stated in there. There are a couple of things that came out that were interesting. We noted that the defence white paper had been released, but what was the result of that? Well, the author of the defence white paper was Wayne Mapp. New Zealand First considers him to be the equivalent of National’s Captain Mainwaring. But now Wayne Mapp has become famous through statements in the media that are embarrassing the current Government, embarrassing the newly appointed—and hats off to Mark Mitchell for getting the job; well deserved. But now Wayne Mapp, who wrote this white paper, is an embarrassment to the Crown. The question is: when we criticise the white paper for its inadequacies, does it not now occur to this National Government that it should go back and rethink it? Because we think that it is inadequate. It is a continuance of the National-Labour dumb-dumber deal on defence.

What else have we got? The ministry is beginning a programme—no, the ministry’s strategic intentions document. It said it would be out in 2016-17. It is not. The Defence Estate Regeneration Programme plan was published in 2016, and yet now we have talk that the Defence Force cannot get 75 houses within 30 minutes of Whenuapai. Mr Chair—[Bell rung] This is a disaster.

The CHAIRPERSON (Hon Trevor Mallard): Ron Mark—oh, sorry, you were not calling?

No.

Firstly, can I just say what a great honour it is to stand and take a call in the Committee today as the newly appointed Minister of Defence. Can I acknowledge the comments from the last speaker, Ron Mark. Can I say that I make a commitment, as I said to the Prime Minister when he called me, to work and do the best that I can to serve this House and our country in this role, and I recognise the fact that it is a great honour and a real privilege.

Can I acknowledge my predecessor, the Hon Gerry Brownlee. I was very lucky that last year Gerry Brownlee took me to Taji, just outside of Baghdad, where our troops are deployed on a joint mission with the Australian troops—an Anzac mission, if you like—delivering training to the Iraqi security forces and, actually, some junior leader training up there as well. While I was on that trip I was lucky enough to attend with him some very high-level meetings with his counterparts, including the Iraqi Minister of Defence. I was very proud of the way he had the ability to be able to advance and state our position very clearly as a country whilst also, at the same time, it was obvious that he was able to develop very strong personal relationships, which are actually very important in terms of Government to Government relationships. So I can see clearly that he is going to be outstanding in his role as our New Zealand Minister of Foreign Affairs and the important work that he is going to have to do. In what we see globally there is a fair bit of instability at the moment, so that foreign engagement is actually very, very important.

Can I just restate as well that as a country we should be very proud of the fact that we have a very independent foreign policy, and we also have a very independent defence policy. That will continue.

Can I just make some comments about our Defence Force, maybe the international situation a little bit, and then I will talk about some of the procurements, because that has been brought up and focused on in this debate as well. Our Defence Force plays a unique and wide-ranging role. Few other militaries in the world cover such a broad range of tasks as the New Zealand Defence Force. Currently we have got people all around the world deployed who are training, who are UN observers and peacekeepers, who are engineers. We have got a wide range and a diverse range of skills and abilities that we use all around the world, and they are highly valued by our partners.

Its core role is being ready for combat. However, our Defence Force also assists with humanitarian responses, protecting our borders and ocean resources, conducting search and rescue, sustaining our scientists in Antarctica, responding to emergencies like earthquakes or floods, and responding to things like bomb disposal callouts. The most recent examples of this are the roles the Defence Force played in responding to the Kaikōura earthquake, the Edgecumbe floods, and the Port Hills fire. You do not often hear it spoken about, but it is always there supporting, providing that backup that is required on the ground for these types of environmental issues that we sometimes face.

Our top priority is investing prudently and appropriately in the defence and security of New Zealand and its citizens. The international environment continues to change. Although there is a degree of uncertainty on the global stage, this does not change the fact that we are a proud country with an independent defence policy. But as a maritime nation dependent on open trade routes—and I acknowledge the comments made by the Hon Todd McClay and the work that he and his officials are doing in terms of advancing a very ambitious trade policy—we are dependent on those trade routes. Our security and prosperity are closely linked to events occurring far from our shores, and it is a very true statement that when we look internationally, anything that is happening internationally eventually—if it has an adverse effect—will end up washing up on our shores. So it is very important that we are engaged in these issues.

New Zealand therefore needs a flexible, combat-ready Defence Force that is able to support national resilience at home while advancing New Zealand’s interests overseas. We have over 300 personnel in operations overseas, including deployments across the Middle East, such as our training mission, as I have spoken about, in Iraq. Thank you very much.

Thank you, Mr Chairperson.

The CHAIRPERSON (Hon Trevor Mallard): I did not quite hear you call.

Sorry. I was thinking that I might have had competition, but in fact there is no competition at the moment.

I begin my contribution this afternoon by acknowledging that I am a fairly new member to the Foreign Affairs, Defence and Trade Committee, and I am finding myself quite surprised by the breadth of what the committee handles. Certainly in this examination for the annual review we covered a lot of bases. I am enjoying it and, suffice to say that at this time, as evidenced by some of the comments that we have heard today, my constituents are now more than ever asking me about New Zealand’s reaction to the international situation. So I begin by acknowledging the Hon Gerry Brownlee’s ascension to the foreign affairs ministerial portfolio. I am sure he will do very well, particularly given his work as the Minister of Defence.

But I also want to acknowledge cousin Murray McCully’s role as the previous Minister, and to say that whilst few of us would ever have seen Minister McCully with a happy smile on his face, I think he probably can now look back with some sense of satisfaction on what he achieved—particularly, as we have heard mentioned here, and as the committee discussed, during our time on the United Nations Security Council. It is something for New Zealand to be proud of, and he played a major role in that.

Today I want to spend a bit more time, though, on trade. I want to acknowledge our trade Minister, Todd McClay. I want to do that also because of the importance my constituents place on trade. The seat of Rangitata, of course, is a primary production seat—[Interruption] Oh, I am live and a whole lot louder now.

💬 Alastair Scott: Start again!

It is OK. I am hoping that somewhere it is being recorded. I do want to say that what we heard about trade filled me with quite a lot of hope. So whilst we have had some success and some disappointment on trade negotiations, the Trans-Pacific Partnership (TPP) being one of those, we caught up in the committee with what progress there was on the possibility of another trade agreement after the TPP—or lack of it. What we also talked about was non-tariff barriers. These are the barriers that are often legally—not always legally—put in place by countries where we already have a trade agreement. We asked Brook Barrington about those. What we were given was an understanding that there are now more people working in the Ministry of Foreign Affairs and Trade on no-tariff barriers, and that also the Ministry for Primary Industries, as I already knew, has increased the number of people whom it has working in this area.

But I want to bring to this debate this afternoon its answer to a written question about some actual examples of non-tariff barriers, which, having been dealt to, were solved, and what that means for New Zealand. One of these was the World Trade Organization disputes settlement panel ruling in New Zealand’s favour—this is around 18 agricultural non-tariff barriers imposed by Indonesia. That is worth a stunning $500 million to $1 billion to New Zealand in beef exports, and that was a non-tariff barrier that took a lot of time and a lot of resource to solve before that disputes settlement panel. But it was well and truly worth it to New Zealand.

Another one: as we know, New Zealand’s wine industry is going gangbusters, and in fact we have increased the amount of wine that we are selling now—I think I did have the figure down here but I cannot see it just at the moment—but we got an assurance from the Liquor Control Board of Ontario that it would not introduce variable pricing or flexible mark-ups. That is sort of a bit gobbledegook to me, but the thing that really does resonate with me is the fact that that meant $60 million worth of additional revenue for New Zealand. So dealing with these non-tariff barriers is particularly important.

I just wanted to finish with one example on how proceeds of crime funding has been benefiting Customs. Customs got $2.78 million through a contestable process. There was $7 million up for grabs. Initiatives from Government agencies were considered, and we now have a Customs liaison officer in Hong Kong and a Customs employee in the International Targeting Centre in Washington. These are concrete examples of how that money is being spent in our customs environment. Thank you.

I want to focus on the defence component to the annual review. Regularly during the review, the Defence White Paper 2016 was noted as being central to our strategic imperatives, and, indeed, the member opposite has raised the question of the white paper as well, so I would like to address some points around that.

The Defence White Paper 2016 is the Government’s regular consultation with the public around how they perceive New Zealand’s defence needs. The last white paper was in 2010, and clearly there is a need to stay relevant in a changing international environment. Back then, in 2010, Time magazine’s top 10 news stories included US/China tensions and the war in Afghanistan. Our defence paper at that time also noted these international issues.

Five years later in 2015, which was when we actually went out to consult on the paper, the top 10 news stories as reported by USA Today was led by the Paris terrorist attacks and then multiple stateside domestic shootings—that is, 5 years later, terrorism was moving further from offshore into our domestic environment, and our international defence needed to adjust as well. The paper was published in 2016, and it received 294 written submissions and 31 oral submissions from the public.

Several themes emerged, and I think these can be grouped into several areas. What the public told us was that their first concern for defence was looking after our own sovereignty and our exclusive economic zone—that was their first issue. The next area was collaborating with Australia and our Pacific neighbours. They saw that as being very important also. The third area of interest to New Zealanders was in maintaining our international responsibilities. So we got this clear guidance and the annual review noticed this, and I want to describe some of the actions that came from it.

The very first question that was asked in the paper was: what are the major threats or challenges to New Zealand’s security now and in the future? The greatest number of responses indicated terrorism as their main concern, followed a little bit later by climate change. Now in the past few months the Government has responded to this specifically—for example, by enacting the Maritime Crimes Amendment Bill, which specifically talks to terrorism on the sea.

Historically, attacks on a sovereign nation can occur by land, air, and sea. But we find that nowadays a fourth event is added—that is an attack by cyber. The defence white paper addresses this concern and specifically identifies the issue by saying that “… cyberspace, and the threat to New Zealand civilian and Defence Force networks from cyber attacks, is growing in importance.” So we recognise the issue. The annual review noted that this is where we are going to apply ourselves. But having identified the issue, what is the action? Well, the action stated that “In the face of an increasing cyberspace threat, the Defence Force will develop a new cyber support capability to improve the protection of its networks.” Finally, there is some urgency to doing all of this: “For the Defence Force to remain effective and deployable, it must be able to protect its computer networks against increasing cyber attacks. Defence will therefore begin work immediately to embed the appropriate organisational and personnel arrangements it needs to support the development of this new capability.”

The Government has also identified issues and stated areas that will support New Zealand’s strategic defence direction over the next few decades. These include—and they were commented to us—(1) by strengthening the third offshore patrol vessel, (2) increasing our air surveillance capacity, and (3) as I have mentioned, cyber security support. That is $20 billion over the next 15 years. Clearly then, the Government is protecting our local interests and our international reputation as we seek and support a stable, rules-based international environment. Thank you.

Stuart Smith—sorry. I had forgotten the member’s first name. Stuart Smith.

That is quite all right—I answer to most things. Ha! I have to confess that I am a very new member of the Foreign Affairs, Defence and Trade Committee, so I was not present during the hearings, but I have read the reports and I have found them to be very interesting reading. I would like to, first of all, relate back to the defence white paper. There is a lot of discussion in the white paper about hardware machinery and some IT upgrades and so on. But I think one of the key things to our defence force is the capability of the people themselves. I saw that first-hand in Kaikōura in response to the earthquake, and I have to say the sense of order that they brought to what was quite a chaotic situation was really very heartening. To see how well these people operate under pressure, I think, is the hallmark of a good armed force.

I would like to go back to the paper itself. The $20 billion that is in the capability plan that is identified within that white paper, I think, is something that we as a country must take very, very seriously. We do not have an unlimited ability to pay in these areas. If we do not make long-term plans, as has been the case with this white paper in an attempt to keep putting white papers out and having a structured manner going forward, we will end up making expensive mistakes, as have been made in the past when purchasing very expensive military items. Sometimes we end up with what can, in fact, turn out to be orphans, in terms of military hardware, which cost a lot of money to maintain and can run out of their economic life very quickly and put a country with a limited ability to pay in quite a bit of difficulty.

I want to talk about Dr Brook Barrington, who appeared before the committee—and there were a number of things covered there. I think the Ministry of Foreign Affairs and Trade (MFAT) has a reputation of having the best of the best in the Public Service and, I think, quite rightly so. I know from my own experience, as an exporter in foreign markets, of seeing those people operating in the market, their capability and their service that they give to New Zealand exporters is second to none. We are a very small trading nation, so we have to do what we do extremely well. That requires a well-funded foreign affairs department. It requires good people in the market, and we have that with those people. I think that is really very, very key to our trading future.

Also in the role that I held with New Zealand Winegrowers, we dealt with free-trade agreements and preparing for that. I note in this paper that there was quite a bit of discussion about the proposed EU free-trade agreement, and I am sure that at the moment there will have been a lot of work going on in the background by MFAT people looking at what it is that is possible to be involved in a free-trade agreement—agricultural products is quite clearly pointed out in this paper. The political reality is, in the report at least, that the sensitivity around agricultural products as part of a free-trade agreement is very high. It is going to be quite difficult to deal with that, but the key is that MFAT has the right people actually going around the various industries at the moment and finding out what exactly happens there, what is possible, and what the barriers are to dealing with trade, because when it comes to the negotiations, if they are not well informed, they will undoubtedly lead to an agreement that would not be of very high quality and not of much use to us.

So I am very confident that we have the capability to do that, and I am sure there is a lot of work that has gone on already in behind the scenes. I applaud the PACER-Plus agreement, and that is referred to in this report as well. I think that the development part of that agreement is key, and I think that to actually stand beside our Pacific neighbours is, really, a very important thing. We are a small country; they are even smaller countries, and it is incumbent on us, I think, to deal with that.

I just want to quickly refer to a New Zealand First statement about National Party members—[Bell rung]—moving over there. I think it raises the IQ of both parties if National Party people leave and join New Zealand First.

Can I just warn the member now. When he is indulged with some extra time, he should not abuse that indulgence.

Reports noted.

Finance and Government Administration Sector