New Zealand Infrastructure Commission/Te Waihanga Bill

Members, we now come to the debate on Part 2: clauses 6 to 26, and Schedule 2.

The term “Waihanga” almost disappeared into another piece of legislation. I direct your attention to Part 2, identifying that in the establishment of this body it is indeed a Crown entity. As civic culture, political culture, and, I’d like to think, our popular culture has evolved we are embracing both languages, although I would say to my Labour colleagues: we have fought the good fight for our reo over the years, but to the best of my knowledge, English is not an official language. I might have to do something about that very soon.

On the question of the members of the commission you will see, fellow parliamentarians, that it will not be peopled by more than seven members. There is a vacancy. We deliberately left that vacancy for Dr Alan Bollard in the event he felt there was a conspicuous absence of a rare skill, or there was a need to involve someone of a trans-Tasman character. The commission members reflect a range of skills, and I have to acknowledge the Treasury officials sitting behind me; they provided a host of names. One or three of the names attracted a fair bit of attention out in the broader community that pays attention to these things, but I stand by all of the people nominated on to this body. I only hope that my colleagues on the Opposition benches see sense, in the very dim and distant point where they might enjoy the privileges that are currently bestowed on this side of the House, to continue what I’ve endeavoured to do—look for people that enjoy a broad level of support on both sides of Parliament’s House.

Now, this part is broken into three subparts. I’ll just talk a little bit about the main function of the commission. What are the words that are used here?—develop, promote, coordinate, encourage, and wellbeing. Now, wellbeing is a key feature that identifies the backdrop against which we are delivering our political mission, by dint of holding the benches of Treasury. I think there is a case that where approaches need to be changed, this entity would provide advice. It may actually be advice that the bureaucracy are not keen on receiving, but a Minister should be able to turn to this organisation and request such a level of advice from them. That may pertain to how you get a better blend between private and public capital. It may also turn on providing an authoritative base of information that enables the politicians of the day to go out and defend certain projects or defend a decision that, God forbid, they were incapable of making themselves.

In terms of additional functions, the most important thing here, I do feel—well, of particular importance—is the right blend between efficiency and effectiveness. I think it’s fairly evident to members of the House that I am totally unimpressed with how long it takes things to get done in New Zealand. Now, it could be said that’s a feature of what the nation voted for in 1996 when MMP came in. Earlier, in 1986, there had obviously been a royal commission. So maybe that’s the culture that has emerged since those days. But I am incredibly interested in seeing not only this bill contribute and the eventual powers that it’ll have, that will be enjoyed by the commission; we need to get things done a lot more quicker and a lot more effectively in New Zealand in the space of infrastructure.

There are a host of other things that I will continue to elaborate upon, but I’m conscious that there’d be one or three other members, and I’ll hear what they’ve got to say and probably correct their misapprehensions. Thank you very much.

Thank you, Mr Chair. As the Chairman might know, I’ve tabled two Supplementary Order Papers (SOPs), and I thought I might just give a bit of backdrop to those. Last week, I attended the Constructive forum in Wellington. In the morning, we had two Labour Ministers, Ministers Twyford and Salesa, and the recurring theme during the course of the day—and particularly when they were questioned—was an issue of inappropriate procurement and contracts being issued by Government entities as well as territorial local authorities (TLAs).

There was a chorus, of the 600 people involved in that forum, of people saying: “Look, even last week”—some of them quoted—Government agencies were out in discussions with some of them and trying to impose very onerous contracts that put significant issues in terms of not only how they were to operate and the penalties if they were late but, much more significantly, around the allocation of risk.

This issue about appropriate allocation of risk is one that permeates the industry. It is the one that is leading to a significant number of company failures and also leading to a general lack of profitability in the building and construction sector.

So the Ministers were questioned quite mercilessly by the 600 delegates, and, unfortunately, I’ve got to say—and I said this last week—that I actually found it quite embarrassing for the Ministers themselves, because they were unable to answer the question that the industry people were saying to them, and the questions were namely: “When you came into office in 2017, you said you would put in proper procurement contracts for the Government and make the Government do that and you would also address the issue around appropriate risk allocation.”

So, with that in mind, I took the opportunity, over the last couple of days, to draft a Supplementary Order Paper, which has now been tabled, which gives an additional power to the Infrastructure Commission. Namely, in SOP 362, it has got the right now, under new clause 22A, to be able to review, at its discretion, specific contracts either undertaken by central government agencies or TLAs.

Particularly, in its non-exclusive list, it asks the commission, when the commission is doing that review, to have regard for procurement policies and practices of the entity that was doing the procurement, identification of risk factors and how they were allocated between the contracting parties—which is the specific issue which was addressed last week in the forum—any funding and financing models relied upon by the entity, and any whole-of-life commercial considerations taken into account by the entity. What it provided for was a mechanism for the commission, if it chose, to highlight good practices or poor practices and to be able to undertake a review, seek feedback from parties concerned, and publish the results, because, if there’s ever a way to ensure that we’ve got better procurement practices across both the Government and the TLA or council sector, this is the way to achieve it.

I was most heartened this morning when I met with the Hon Shane Jones and had a conversation with him about this thing. I was heartened that he was very supportive of my SOP. There is one issue that was raised around the issue of whether we were replicating two clauses relating to the requirement to publish that report. So I’ve responded to that and provided a second supplementary, SOP 363, which gives the option of deleting one of those clauses, so there’s now only one clause relating to a need to publicise the report.

Those two supplementaries are now on the Table, and I’m very hopeful that we’re going to have them passed by the committee today, because, if ever we want to try and help the building and construction people or sector, which employs 250,000 people across New Zealand and includes vulnerable subcontractors, this is one of those tangible mechanisms that will achieve a real outcome and make a real difference. So I’m hoping, and I’m looking across at Government members here today to make sure that they act in the best interest not only of that sector but for all New Zealanders so we get an excellent outcome and help to achieve a sector that is in trouble at the moment.

I am interested to discuss these Supplementary Order Papers (SOPs) that have been prepared by Mr Andrew Bayly. He’s obviously thinking very carefully about it, because he’s brought not just the SOP but then an amendment to the SOP as he thought of another good idea. It would be helpful to have them on a timely basis, Mr Bayly, but I guess that doesn’t always happen, does it?

I’m in two minds about these SOPs. We have had in the Finance and Expenditure Committee quite an extended discussion about procurement and procurement practices, led by a report from the Auditor-General, who does prepare excellent reports for us. The Auditor-General does have a pretty extensive project going looking at procurement practices within Government and how it could be done better. It is, as Mr Bayly says, quite an important issue for us to have a look at.

I do agree that we do need to have a focus on procurement. I’m not sure—and this is genuine “not sure”; I’m not trying to cast doubt on Mr Bayly’s SOPs—that this particular entity is the place to do it, and I think the committee should have a good kōrero about it—a good talk about it—because we haven’t examined this idea in select committee, so we do need to have a look at it now.

I guess the reason why I’m not sure is that even though it is, obviously, a good idea for us to be looking at procurement at some place across Government, I wonder if it would undercut the purpose of the Infrastructure Commission. The purpose of the commission is to make those long-term planning decisions for Government. The purpose is to have a look at what infrastructure we have, have a look at what infrastructure we need, have a look at how we should be maintaining that infrastructure—it is to look across all those issues. The purpose is very much of visualising, of having a vision around infrastructure and building towards it, of ensuring that contractors—sorry, the construction firms and the like; the civil engineers—actually have a very good understanding of what projects are being lined up over the next 10, 15, 20, or 30 years, so that they can plan themselves.

If we add examining procurement to that, I think that’s another whole function. I don’t know that it sits within the original function of the Infrastructure Commission. So there are a series of questions around that, then. One is how it relates to the overall purpose of the commission, and I’ll be interested to hear what the Minister has to say about that. But the other one is straightforwardly a funding issue. The Infrastructure Commission is a planning entity. It will gather information for that purpose, it will assess information for that purpose, and so on. Examining the procurement processes is actually a different sort of activity. The commission won’t be planning those procurement processes; instead it’s planning the infrastructure itself. So I’m not sure that the procurement processes actually fit within the structure of the Infrastructure Commission, and I think we should have a very careful think about doing it.

Now, if we go ahead with putting procurement processes in there, I don’t have concerns about the issues around reporting back and so on. Those are fairly straightforward—you don’t just set the procurement function up and then not actually report back on it. But I do think we should examine the actual purpose of the Infrastructure Commission and whether or not examining procurement processes fit within that.

So I’m hoping that the Minister will let us know what his thoughts are on that issue, and, obviously, I’d be interested to hear from Mr Bayly again on that particular issue as well, especially when he’s, you know, heard my doubts and concerns about it. I would like to hear a little bit more from Mr Bayly about exactly why it fits together with the Infrastructure Commission. You know, the commission does have a variety of functions. I’m just not convinced about adding this one to it. Thank you, Madam Chair.

Thank you. Hey, well thank you for that opportunity, given that you’ve asked me a very specific question about the purpose of the commission. So just to answer Deborah Russell’s specific queries, at the moment, as she knows, under clauses 9 and 10—and the Minister did allude to this—it has the ability or requirement “to co-ordinate, develop, and promote an approach to infrastructure that encourages infrastructure, and services that result from the infrastructure, that improve the well-being of New Zealanders.” So that’s an overarching thing, but its purpose is largely an advisory function. As you know, having sat on the Finance and Expenditure Committee, Ms Russell, the issue is that it has a strategic role, and in that process it can collate information—as we talked about earlier, it can now do it from the territorial local authorities or councils—and provide support and advice and, basically, act as a centre of excellence. And that’s fine—that’s fine for those procurement managers.

I think in terms of getting better procurement outcomes in New Zealand, you actually need to talk at procurement manager level rather than the Government entities and councils, because that is the central issue that came out of the forum last week, which is when the Ministers were repeatedly asked, “Why have you not put in place new procurement arrangements which you promised to do 20 months ago?”, the Ministers talked about requiring entities to do all that sort of stuff, and yet, of course, that hasn’t happened, and that was one of the concerns.

But the real issue is Ministers can issue edicts, but the people that actually implement it are actually at the procurement manager level. There are thousands of projects procured both across central government and local government—$43 billion, as I said, just for central government. So it’s nice acting as a centre of excellence, and I’m sure some people will use that and respond well to that opportunity, but if you’ve had anything to do with the infrastructure sector, and particularly around the procurement, many people believe they are expert, and that is one of the reasons why we have such variability in terms of the level of procurement that goes on at both local government and central government level, but also with outcomes that in some cases are absolutely detrimental.

So what this Supplementary Order Paper (SOP) 362 specifically does is it says, right, that the commission can still continue to do and act as a centre of excellence, but one of the things—it actually has no teeth, the Infrastructure Commission. It doesn’t have the ability to do anything else other than by a special direction. What the SOP does is it gives a clear direction to the Infrastructure Commission that one of its prime roles should be to highlight both good procurement and poor examples of procurement, and from there, by looking at the different aspects—and I quoted before including the one around risk and how it was allocated—it will lead to better outcomes across New Zealand.

As we’ve all talked about, the best thing in life is the disinfectant of sunlight, and this is what this commission will have the opportunity to do, and hopefully it will focus not only on the poor results but the absolute best outcomes, because one of the requirements is it must share its learnings across the sector. That is how we’re going to see improvement over time, and that is why I think the Hon Shane Jones this morning was very supportive of the bill, because we all know that we need to procure much better in New Zealand. There are so many poor examples. I know my colleague Mr Lawrence Yule is going to talk about those, but they are many, and you only need to talk to a building construction firm for five minutes and you will realise that this is the most central issue for these builders. Particularly during periods of downturn, when businesses are struggling, they are prepared to take on contracts, and they feel like they have to, and assume too much risk because they are trying to look after their employees, trying to keep their businesses alive. That is the moment when we now see the results—and we’ve seen recent examples of this—of significant companies’ failures and the consequential impact on subcontractors. That’s why I’m so glad and I’m hopeful that you’re going to support this SOP, because this is what will make a real change to the building and construction sector.

Thank you, Madam Chair. Just speaking to Part 2 of this bill, there was a lot of discussion around the part of the bill which deals with the information-gathering powers of the commission. In fact, it was brought up through the various submissions that came in, through about 10 of our local bodies around the country, 10 local government organisations—Auckland Council, Hamilton City Council, Watercare Services Ltd, Whanganui District Council, and the Society of Local Government Managers. A series of them all put forward in their submissions that, actually, clause 23 of the bill be reset to include local government within the scope of the information-gathering powers. Now, we did toil over that for quite some time. We sought advice from officials, but actually we thought that it was a pretty sensible thing to do.

So in our report back during this committee of the whole House stage, it’s that little part that I just wanted to focus on, because it’s an essential part, actually, the ability for the commission to be able to gather information about New Zealand’s infrastructure. Some of that information is, obviously, held here at central government level, but, actually, much of that is held at local government level. So the strategy, the planning functions, the development of the long-term infrastructure strategy report—all of that is going to rely on the current infrastructure, and knowledge and information about the current infrastructure, in order to be able to chart a pathway forward and decide where exactly the Infrastructure Commission should be setting its direction.

There was something in there as well to make sure that we were going to extend the privacy protections for personal information, so that was a wee bit of a carve-out, that we were quite sure that we wouldn’t be delving into the private lives of people; that, actually, individuals would be safeguarded from the information-gathering powers. But when it came to the information-gathering powers, it is absolutely necessary and it was widely accepted around the table—Local Government New Zealand came and presented to the committee and were united in their voice when they said that they needed to be included specifically in clause 23.

Subpart 5 of Part 2 of the bill empowers also the commission to request and obtain information relevant to its functions from Government departments other than the GCSB and the New Zealand Security Intelligence Service. Those, for very obvious reasons, were carved out, but we would need to find information from departmental agencies, from the New Zealand Defence Force, and from statutory entities named in Schedule 1 of the Crown Entities Act, that being Crown agents, autonomous Crown entities, and independent Crown entities as well.

The actual structure of the commission was set up to make sure, as we’ve said before, that we’ve got a very strong pipeline of infrastructure projects, and the inclusion of local government into that is absolutely as part of that wider conversation. Thank you, Madam Chair.

It’s my pleasure to take a further call, just on Part 2. I really want to talk about Supplementary Order Paper (SOP) 362 from my colleague Andrew Bayly. It may, sort of, be the norm in this House that because my colleague’s put it up, the Government and the Government parties do not want to support it, but I do think there is a real opportunity in this bill to have a different look at procurement. I acknowledge that the select committee chair, Deborah Russell, has said that, you know, it’s a bit late in the piece. Well, it’s never too late if something could be made better, and I want to thank Mr Bayly for bringing it to us. He attended a conference, some things were laid out to him, and there’s an opportunity and time in the committee of the whole House to change things.

I want to give the committee an example of where I think we don’t have it quite correct in the Government, when we look at procurement. Effectively, when you look at procurement, there are procurement guidelines set out by Ministry of Business, Innovation and Employment (MBIE) and they’re about to be renewed. They really look at procurement from a probity perspective, on a value perspective and how the process operates. And then you have, effectively, the Office of the Auditor-General, which looks over that and is doing a big review at the moment on procurement.

I’ve been looking at a procurement issue over the best part of 18 months which is around the building of rapid deployment prison cells in New Zealand and a contract that was let and how that has been followed. It’s all in the public realm, so I can talk about it. But, effectively, a contract worth about $60 million was varied to $185 million without public advertising, without any public notification of it, and I didn’t think that was right, because, ultimately, those prison cells have been built in China, brought to New Zealand fully made, and, effectively, New Zealanders have lost out on jobs. Now, I can accept that, if the procurement process is fair and reasonable, so I followed that all the way through. Yesterday I received a letter from the Office of the Auditor-General saying that in their view the process was fair and reasonable. I still don’t agree that that is the case, but that was the view.

The point I’m trying to highlight is that when you look at MBIE, who are highly respected officials working for the Government on one side, they come up with rules, with advice from the industry and Ministers, and on the other hand you’ve got the Office of the Auditor-General on this side saying: did MBIE follow the rules and does it make sense? What is lacking, in my view, is a real hands-on look from the other side of this equation. That’s what we’re delivering. Rather than the process and the cost, what is the difference we could make in how we procure things? And while it’s a late call, I actually think there is an opportunity with this bill to allow the new Infrastructure Commission to seek out and find on behalf of the infrastructure—not on behalf of the Government, not on behalf of the person that looks out as to how we spend things; that’s the Office of the Auditor-General—what are the ways we could improve the delivery of infrastructure in New Zealand.

Deborah Russell previously said that she was open-minded, and generally open-minded. Well, my comment to this committee is that I think we should be genuinely open-minded to this SOP that Mr Bayly has put up, even though it’s late in the piece. Because my experience over the last 12 months, looking at the issue I’ve been looking at, has been that I don’t think there is a central agency that’s delivering what you have said, the Hon Shane Jones—about how slow things are and why things happen the way they are. We have a Government agency on one side and we’ve got a checker and balancer on the other side. I think we need to tip it on its head a bit. And if in fact the Infrastructure Commission, in doing all its work and advising various Governments, thought that there was an issue with procurement and they wanted to look at best and worst practice, I think absolutely this bill should make provision for that to occur. I understand, and I could be wrong, that the Greens would want to support this type of approach.

I spoke in the House the other day about how we’re going to procure climate change adaptation measures. All those things are going to be really interesting. The current framework may not be suitable. And if we’re serious in this House about having cross-party agreement and doing the right thing for infrastructure in the long term, I think a little tweak to this bill to allow this commission to investigate procurement at its wish would be a useful thing for the taxpayers and value of New Zealand.

💬 Michael Wood: Madam Chair?

💬 Paul Eagle: Madam Chair?

I’m spoilt for choice—Michael Wood.

Thank you, Madam Chair. Life is like a box of chocolates. I want to thank members of the committee for what, I think, has been a good and constructive and collegial debate during this committee stage, and that really does carry on the engagement that was had on the select committee. I acknowledge the chair of the Finance and Expenditure Committee, Deborah Russell. I had the enjoyable experience of chairing the committee prior to Ms Russell at the time when the committee was hearing submitters on this bill.

There were many submissions that related to Part 2 of the bill. In my comments today I just want to focus on two issues. One is the issues that have been raised by Mr Bayly and the Opposition that are reflected in his Supplementary Order Paper (SOP) 362. I acknowledge this is a good faith attempt to respond to an issue that Mr Bayly has been thinking about, but I do actually think that in the course of the select committee considerations, these issues were pretty thoroughly canvassed. They were canvassed in two ways.

The first was that in discussions with officials, members of the committee brought forward a range of ideas about the, sort of, more specific functions that we thought could have been identified in the bill, and this was one of the ones that was mentioned. There was also reference to consideration of infrastructure in respect of the Treaty of Waitangi and other matters as well. The committee actually got very clear advice from officials that the way in which the bill has been written is, actually, largely quite permissive in that the Infrastructure Commission has pretty broad powers to assess matters in respect of infrastructure and to give views on them. So the views of officials that were provided to the committee were that adding in additional specific functions isn’t actually particularly necessary. I hope to some degree that might assist Mr Bayly in terms of this issue.

The other point that I would make is that submitter after submitter said to us that they didn’t want duplication across the sector. I would say very clearly to Mr Bayly that if one is to read his SOP, which, essentially, requests that “The Commission may undertake a review of the procurement processes used by an entity listed in section 23(5)”, that is exactly what the Office of the Auditor-General does and reports to us at this Parliament regularly on. In fact, one of the current theme topics that the Office of the Auditor-General is focused on is the matter of procurement across central and local government, and the select committee has received considerable advice—very, very helpful advice—to the committee and to the Parliament from the Office of the Auditor-General.

So I do believe that while the SOP is really well intentioned, while I believe that it is appropriate that we have a good oversight of procurement practice, because we’re dealing with a lot of money—we need to make sure that the spend is good, and there are a whole lot of issues associated with probity that go to procurement—we do already have a highly competent body with a very specific skill set that does this work. And (a) I don’t think that duplicating that function is good practice, and (b) quite frankly, I think it would result in the Infrastructure Commission having to, sort of, grow a whole other big arm and bring in a whole lot of other specialist expertise that may not actually be available, because it’s highly specialist, and wouldn’t actually add anything to what we know, given the work of the Office of Auditor-General.

The second thing I just want to note in respect of Part 2 is the important change that did occur and is recommended in the select committee report, and that is the bringing into the bill of the power to request information from local government. I think this is really important. I come out of local government, as a number of other members in the House do, and often the role of local government is overlooked by this House, in my view.

Local government in New Zealand oversees, I think, around about $150 billion to $160 billion of capital assets, and it wouldn’t have made any sense, in my view, for the commission to have not had the ability to request information about those assets in order to form a long-term view about how we plan out our infrastructure in New Zealand. We need much greater coordination between central government and local government if we’re going to get the kind of long-term infrastructure that we need. And, fundamentally, that’s what this bill is about. It’s about planning for the long term, not just the coming electoral cycle but the next 30 to 50 years. That’s certainly the approach that this Government wants to take in the purpose of the commission that has been set up here.

So I finish on those two points. I think that the Supplementary Order Paper is superfluous. I think it’s very good that the select committee has recommended bringing in the ability to request information of local government in Part 2 of this bill. Thank you, Madam Chair.

Well, thank you, Madam Chair, and can I say what an honour it is to talk about Part 2. You missed my speech on Part 1, which was hugely exciting to the committee, I know, but I’m happy to talk about Part 2 and, really, just add to and endorse what my colleagues have said.

Look, I applaud the work on the Supplementary Order Paper (SOP), but I also noticed, not being a member of the committee—but I know that the primary purpose of the commission will be to have an advisory role only. I looked in detail around some of its support for projects, and, in that, I noticed it says, “produce best practice guidance on infrastructure procurement and delivery”. I wonder if that’s not enough to satisfy what the member is trying to achieve. I also note that, through its delivery arm, the Infrastructure Transactions Unit will be involved, obviously, in supporting individual projects, and this can include giving advice on the decision to invest and the procurement process—so two pieces of information there that lend support to wanting a stronger focus on procurement. It keeps intact the integrity of the commission’s primary purpose, and that is around an advisory role. And I think that may be enough—in fact, will be enough—in terms of trying to achieve something that is, I guess, a go-between, the intent of a stronger procurement focus.

Look, I totally agree that, in terms of some of the intent of a pipeline of work and having the frustrations of, say, a hold-up with procurement or that process when you are starting to pack in a number of projects that have different time lines for different pieces of infrastructure work, the procurement function may be seen as a hold-up or may be seen as a barrier. I think, though, can I say, that in terms of addressing the SOPs at least there is some information or some intent there in terms of supporting projects already in place.

I want to move to Part 2 and just endorse the work of the Hon Shane Jones, again in terms of putting in place the commission, the board, appointing the chief executive, but also again reinforcing just some of the work of the select committee. One of those was, of course, those information-gathering powers, and we know that, with the arm’s length operation of State-owned enterprises, for example, now in charge of many a piece of infrastructure that is Government owned, people-owned infrastructure, there can be some reluctance in some ways for a whole range of reasons, and I applaud that that’s been addressed there in clause 23.

Likewise, with local government, where they too—and I used some of those examples in my speech in Part 1, around their infrastructure, but I note, though, that it, I guess, restricts it to that of the Local Government Official Information and Meetings Act, to the scope or the extent of that Act. And I think that’s excellent because I think, as we’ve seen what the intent of this body is, they say that we want, I guess, a pipeline or a whole of public works programme of works for the future. Then you are going to have to have local government in the work that they do. Things are co-funded, co-managed, co-owned; so it just makes sense. But I want to, I guess, applaud the committee for showing some common-sense approach in terms of the resource required to get information, and so they get a tick for that.

My colleagues have talked about extending privacy protections. Look, this bill is long overdue, it will be implemented successfully, and I commend this to the House.

Thank you, Madam Chair, and it’s a great pleasure to speak on this Part 2 of the New Zealand Infrastructure Commission/Te Waihanga Bill, and I start with clause 9, which I am surprised, given the Minister, is not exactly elegantly expressed. If you look at clause 9, it says, “The main function of the Commission is to co-ordinate, develop, and promote an approach to infrastructure that encourages infrastructure, and services that result from infrastructure, that improve the well-being of New Zealanders.” It’s not very well expressed, to be honest—“promote an approach to infrastructure that encourages infrastructure”—and it doesn’t really define what the approach to infrastructure is. I wouldn’t have assumed that there was an approach to infrastructure that would discourage infrastructure, but maybe there is, maybe there isn’t. The point that we’ve got here is that, I think, what is trying to be said is that the commission would, well—well, that’s the point; it’s not clear what it’s trying to say. I can’t make head or tail of it. I’m prepared to ask the Minister. I’d love to ask the Minister to explain just exactly what clause 9 means in simple terms. And, unfortunately, without reference to Biblical allusions or passing proverbs—just in clear, simple terms—it would be useful to know what he actually means by that.

In terms of the actual functions in the next clause, it refers to “[might] provide advice in relation to infrastructure … [about] the ability of existing infrastructure to meet … expectations;”. Well, of course, everybody in New Zealand knows, and particularly in Auckland, where I come from, that there is a shortage in the transport estate, which has built up over many decades. The previous National Government, of course, worked tirelessly to try and turn that around and invested significantly in a broad range of transport areas but also worked on some other, wider areas—of course, one of the greatest areas of infrastructure progress that was made was through the ultra-fast broadband and the provision of that sort of thing. So it’s not just about transport, but we certainly need to continue that work, and the frustration that many New Zealanders feel right here, right now is that that momentum that we had over the past nine years—nine years of progress—has been lost and we’ve fallen into a hole and there hasn’t been that continuity. So I think there’s no question that the commission will have a lot to say about the pause that we’ve seen in the provision of infrastructure and the fact that we need to get back to a clear pipeline.

Then the third one, of course, is the priorities for infrastructure, and that’s where we run into a problem, because we, of course, have the Greens and Julie Anne Genter, who is determined not to give in to the car fascists, and then we’ve got Phil Twyford, the Minister of Transport, who is the only person in New Zealand apart from Julie Anne Genter who thinks that we’ve overinvested in roads in recent history, because most people do just want to get around. So when we’re trying to sort of work on what our priorities for infrastructure are, then you get into difficulties because we on this side of the House have the old-fashioned view that the purpose of transport infrastructure, at least, is to enable Kiwis to get around quickly, efficiently, and safely. That’s what transport infrastructure is about, but unfortunately that doesn’t seem to be what the Government sees. And so, instead of having a bunch of projects in Auckland for example, where I am, in terms of dealing with the congestion on the Southern Motorway, they have this focus for the single biggest transport investment ever being a slight improvement to the public transport offering down Dominion Road with a slow train.

So people can’t understand that priority. So it will be very interesting. I’d be fascinated to see the first report from this commission when it sits down, and tries to make head or tail of the priorities for infrastructure. It’ll be a useful and instructive discussion, and, to the extent to which, as a result of the studies of this group, that we can get a more sensible basis for decision making around the priorities for infrastructure, it will be a good thing. But I’d like to hear an explanation from the Minister of what clause 9 actually means. Thank you very much.

Thank you, Madam Chair. I was just, sort of, getting to the point where I thought there’s a fair bit of waffle going on here, so I thought I’d better add a bit of structure of the discussion. I wanted to, firstly, just thank the Minister in the chair for his opening remarks, and remind him that a good dose of cynicism’s a great thing, provided that cynicism doesn’t last too long. I do suffer from a little cynicism around this type of proposition, because we don’t always find that Governments follow the advice they’re given, and I accept that.

First of all, I want to talk about the commission itself, because I think that the commission, the people on the commission, and the people who will be appointed that commission, are hugely important. I think they’ve got plenty of talent, and the ability to carry out the role that’s being tasked to them, and I certainly support—even though I do have a little cynicism about it—this New Zealand Infrastructure Commission/Te Waihanga Bill, and the structure that it leads to. But I want to talk a little bit about infrastructure, and I know we’ve spent most of the time—other than Paul Eagle’s address about some of the airports—talking about roads here, and I’m not going to do that, except to say that one of the challenges we have in a small economy, like New Zealand, is that the people we have in business are hugely important, and the knowledge they carry with them is also extremely important. That skill and experience they have with them, and they have in businesses, like contracting businesses, and businesses that supply services to Governments, and to councils, and communities, is hugely important.

If we don’t have a consistent stream of work coming on, those people are very quickly lost in New Zealand, because they’re poached by overseas operators, and they’re gone, and it’s very hard to replace them in a small economy like this. The other thing that’s obvious in this business, I guess, are big machines, and some of us like big machines. We see them, they do a massive amount of work, they pull hillsides to bits very quickly, build roads, railways, and other things. The challenge with that, of course, is they’re hugely expensive, and if those people that invest in those don’t have confidence in the future infrastructure projects, they won’t invest in them. So it becomes much more expensive for us to replace the infrastructure in New Zealand than it does elsewhere in the world, and that’s very challenging for us as well.

So it’s critical for businesses involved in the infrastructure sector to have some continuity of work. The other thing that’s very important to those businesses, and might be completely unseen, is the intellectual property they carry, and the opportunity that we lose if we don’t have a significant continuity of work in that area. Now, I also think Andrew Bayly’s Supplementary Order Paper (SOP) has some significant merit. I’ve never been that confident, in my time in public life, around how we do procure tenders, or tender for contracts and work, and other projects that we procure in the public sector, and I’m not sure that there’s an easy answer to it. But I do think it’s a stream of work that needs some significant attention paid to it, and this would have been one way of doing that. There, obviously, will be other ways we could do that should this SOP not be accepted.

Now, I want to just talk about one other area of infrastructure, which I think’s probably overlooked, to a large extent, when we discuss things like that, and that’s our defence forces. Some people have a great sea view. Some people have a great view of the back end of another building. I have a great view of Ōhākea air force base, whether I like it or not, every day. But the interesting thing about it is that our defence bases—three of the major ones, which are in the Rangitīkei electorate, interestingly—are very critical pieces of infrastructure for us, and it’s most important, I think, whether we’re in defence, whether we’re in surveillance, or whether we’re just trying to protect our communities from climate events, or whatever, that we have that infrastructure, and that we have it in a fashion, and have it operating in a manner that can be picked up, and used very quickly for whatever it’s used for.

As I said, I look at Ōhākea air force base, and I see an enormous amount of investment take place, and then disappear, and then, four or five years later, another Government comes along, and another enormous amount of investment occurs, and then they disappear again. I don’t think we realise the breadth of work this commission is going to have to undertake. It’s going to be very significant. So having said those few words, I think that this bill is a very good one, and I think it’s well worth persevering with. I’ll be very interested, and my cynicism might be allayed, to see how it proceeds, as it goes through successive Governments. I won’t see that many more of them, of course.

Thank you, Madam Chair. Look, I want to thank the members of the Finance and Expenditure Committee for their contributions. The honourable member from the Opposition Andrew Bayly did come and see me this morning, and I respect him for reaching out to me. I just want to direct our attention to clause 20: “The Minister may give direction to provide report”. Now, as I understand, the contribution and the content of what is quite a reasonable set of expectations in the Supplementary Order Paper (SOP)—and I want to tell the House that, already, the officials—the advisers, and advocates, and whatnot—that will, eventually, be employed by the entity once it’s established, are seized of this issue. I don’t think that today—in fact, I know, today—I’m not able, on behalf of the Government, to commit to this SOP. But I want to say to the member, I actually agree with a lot of what he’s saying, but I’m of the view that to include the SOP today, in quite this manner, and form—I’m not in a position to agree with it.

I do think, though, that there’s a deeper set of questions that both parties have struggled to resolve. We have inherited a set of obligations upon us to be quite miserly, in terms of how we allocate capital, and risk. We’ve never wanted—and, certainly, in my lifetime as a public figure—to burden the Crown with too much of the risk. That’s had the effect of—with the exception of the debacle of the Christchurch rebuild, but put that to the side—actually, creating far too much fiscal disharmony in too many firms. So to the extent that that’s what the member is alerting to us, I agree. My preference, however, is for us to pick this body of work up, possibly after a more exhaustive process, with the actual members of the commission, and I would note that the select committee members themselves have since told me—and not in any partisan way—that they did have this discussion, and I’m confident that one letter, signed with characteristic flourish from the Minister for Infrastructure, to Dr Bollard, will set in train the very thing that the Opposition is seeking to achieve.

So I agree with the contributions, the content. I just cannot agree, this afternoon, for the SOP to be added to this particular bill, but I do give an undertaking—to the extent that a politician can give an undertaking—to bring back either a further amendment, or evidence that the officials behind me are going to push forward with options that our Government can finally deal to this conundrum pertaining to procurement. But I would say to the House, it’s not just a problem that we’ve made. It’s a problem that worsened over the last nine years.

Now, on the question of the amateur author otherwise known as the Opposition finance spokesman not understanding the English language in clause 9, I’d have to say I would direct his attention to the interpretation section: “ ’infrastructure’ means physical infrastructure … that results in services in New Zealand”; “ ’infrastructure projects’ … the creation of new infrastructure; … the maintenance, upgrading, replacement, decommissioning, or removal of existing infrastructure”. Now, I accept some human infrastructure was removed as a consequence of the last election, and may that condition long prevail.

So I think that the member’s making not only nonsense; he’s betraying the fact that despite having written many books that no one has actually read, he’s more than capable of deploying his skills in the English language to get a better set of contributions—a better set of contributions. So good content, a useful contribution, but, as of today, not something that I am able to muster enough support for in terms of voting for the SOP.

Thank you, Madam Chair. I’ve just noted those comments from Minister Shane Jones, and I’ll return back to those in a little while. But I just wanted to talk about the wider issue, because when we’re talking about this bill and this Supplementary Order Paper (SOP), we’re actually talking about 250,000 people directly employed in this industry, who are feeling very vulnerable and have done so for quite some time, partly because of what we do in central government but also what occurs in territorial authorities.

There were two things that Mr Michael Wood referred to, and I just want to rebut a couple of those things. The first thing is this issue around the discussion around the role of the Infrastructure Commission, and, basically, he was saying that it was highly debated at that period of time. I was just checking with my colleagues before. Look, the issue and the role of the Infrastructure Commission was widely debated, but about its function, and the function—as you know—in the bill as it currently stands is essentially one of an advisory function. The commission has no real teeth, and that’s where a lot of the discussion was centred. Certainly, I was one of those who called for greater powers around the issue of the Infrastructure Commission having greater powers, together with other members of that committee. That is why we were successful in getting the mandate spread in terms of obtaining information from councils. But in terms of the specifics around what’s proposed in the SOP, that was not widely traversed at all.

That is something that has arisen principally from the discussion last week at the Constructive forum, and I think from members—and particularly, I sense, from amongst Labour members—there is this view that “You know, it’s fine and we don’t need to worry about it before.” I just wish that you had been there to witness the experience of your Ministers—namely, the Hon Jenny Salesa and the Hon Phil Twyford—as they struggled to respond to specific questions about this very issue around why is their Government still, even as of last week, trying to impose these onerous contracts on them as members of the building and construction industry, and, specifically, this issue around the allocation of risk. If you were there, I’m sure that you would have a different view today, and you wouldn’t be talking in the way that you talk about this issue, as if it’s some unrelated, theoretical issue. It is the burning issue for the building and construction industry.

The second issue that you’ve raised is around the jurisdiction. Michael Wood talked about the issue of whether we should use our Auditor-General to do these types of roles, and he was saying that this is a replication. Well, I think there are three choices of who has the best capability to these types of work. The first one is the Auditor-General, but as he will well recall from the last time they did a review of this project, when we asked them about the specifics around what is best practice in procurement and why couldn’t they offer an opinion on that, what are the tendering techniques and why they couldn’t offer it—all the types of things that are covered in the SOP—they clearly said to us, as a committee, that they didn’t have the capability. They are, essentially, a financially driven audit, and that’s the role of an internal auditor or the Auditor-General.

The other one is that the infrastructure unit in Treasury has been largely disbanded and is now to be formed as part of the Infrastructure Commission. So the question you are asking and raising—and I’m just referring to Mr Michael Wood—is who is the best person or group who has the capacity and the capability. That is why this SOP gives that to the Infrastructure Commission, because they will have the capacity and capability. The third element, as I mentioned in one of my earlier speeches, is that they will also have the independence to be able to do this. At the moment, they have no specific mandate to do this, and they should have this mandate. It is what the building and construction sector is demanding and wants and needs, actually.

I am pretty disappointed, not from my perspective as the sponsor of the SOP, but I know that the Hon Shane Jones was very supportive of it and I know that the leader of the Greens was very supportive of it at a personal level. This is a bill that should go through, and I’ll be disappointed if we find that in time, the Government has played politics on this and that at a later date—even at third reading—they seek to introduce some changes, because the industry will not regard that well.

The question was put that the amendments set out on Supplementary Order Paper 363 in the name of Andrew Bayly to the amendments on Supplementary Order Paper 362 in his name to Part 2 be agreed to.