Estimates Debate — Economic Development and Infrastructure Sector

Members, I understand that responsible Ministers are available to speak to the Votes in the economic development and infrastructure sector volume (B.5, Volume 1). The question is that Vote Building and Construction, Vote Business, Science and Innovation, and Vote Transport stand part of the Schedules.

I raise a point of order, Madam Chairperson. I understood we were going on to the State services, finance, and Government administration sector at this point.

Well, you have a different understanding to the schedule I have. Let’s get it resolved so that we’re all on the same page.

Tim van de Molen: All right, sure. Madam Chair.

CHAIRPERSON (Hon Ruth Dyson): So, you are speaking to what?

Tim van de Molen: Oh, I’ll have a crack at building and construction.

CHAIRPERSON (Hon Ruth Dyson): Economic development and infrastructure? Normally the chair of the committee is called first and the chair—

💬 Jonathan Young: Madam Chair.

CHAIRPERSON (Hon Ruth Dyson): —now is seeking a call.

Thank you, Madam Chair. Look, can I say thank you to the members of the Economic Development, Science and Innovation Committee, who, I understand from the record of our clerks, undertook an arduous series of hearings with Ministers. In fact, when we look at the number of portfolios that the committee covered, it is commerce and consumer affairs; communications; economic development; energy and resources; infrastructure; regional economic development; research, science, and innovation; and tourism. And, particularly, I think, in the current context of the New Zealand economy and the challenges we face with responding to the pandemic, each one of these portfolio areas is very pertinent to addressing the continual issues that New Zealanders are facing.

So, look, we did have a very significant number of Ministers come our way, and the committee did spend a considerable amount of time being able to question them on the appropriations that they were responsible for. In fact, if you do have our report before you, it’s some 39 pages long. So you can see just how incredibly challenging it was to get through all of this and, of course, to come now to this time where we can address these issues in the committee. Can I say, also, that the officials that supported the select committee also worked very, very hard. Look, we covered lots of very important areas. We looked at the responsible lending legislation; we looked at a KiwiSaver review; we looked at the Commerce Commission—the funding and the merger laws that they are looking at, and particularly the challenges they have as they have done market studies and continue to look at doing that.

We looked at the Financial Markets Authority, and the fact that this entity is very important to the health and robustness of our financial sector. They are under increasing pressure as they take on a wider remit and, of course, the funding of that entity was raised by the committee. We looked at subjects such as Air New Zealand credits, and we know that’s an issue that is of current conversation. Our national airline, of course, is working with customers right throughout the country. We looked at communications, the benefits of 5G, that’s going to come into our country and economy. The reality is that all of us during that particular five weeks where we were in lockdown, and many businesses and people across the country, would not have been able to continue their work without connectivity. So that was something, certainly, that we were very keen to review.

We also covered some of the challenges that particular entities, like New Zealand Post, face and we saw that many of the challenges that they have—you would expect, actually, that people being at home during that period of time would be writing lots of letters, but, in fact, they were sending lots of emails. So New Zealand Post had the challenge of a diminishing revenue flow, and how the Government was going to support that. In fact, the previous Government faced the same challenge as well, and we know that this is an ongoing issue.

We continued to look at COVID-19 border restrictions, the America’s Cup—and those issues that were pertinent at the time—and we trust that we will be able to see a magnificent regatta, hopefully, next year. We looked at energy and resources and the appropriations that are occurring there, and we noted that the decommissioning of the Tui oil field is a responsibility that’s come back on to the Government, regretfully. We talked about, particularly, the opportunity that we hope the Government would offer Taranaki businesses and engineering and service sectors to be able to participate in quite extensive work. And it was good to hear the Minister of Energy and Resources say that that is the intention of the Government, to allow as much work to occur in Taranaki as possible. Thank you, Madam Chair.

Thank you, Madam Chair. It has been my pleasure to serve on the Economic Development, Science and Innovation Committee for the last few years and, more specifically, in recent times, just looking at some of the Estimates and the appropriations that have gone to those different parts of our very largely mandated committee. Can I note that, obviously, in this post-COVID world that we are in, we face some pretty uncertain times. We had a very strong health response, and that’s what’s gone and led to the position we are in now, but it’s going to take an economic response to be able to deal with the unemployment and the uncertainty that is all around New Zealand at the moment. Our team of 5 million helped to achieve that, and, actually, it’s great to see that the Government in Budget 2020 has backed New Zealanders to be able to provide jobs in lots of different areas across the board to cushion the blow for the whole country.

When we talked about infrastructure on our committee, we were just noting that the massive amount of investment that has gone into infrastructure all across New Zealand is quite unprecedented, with the Provincial Growth Fund, with the New Zealand Upgrade Programme, and also with the $3 billion investment into infrastructure as part of the COVID relief fund. That has all been welcome, not least the allocation for connectivity with some of our marae in really remote parts of New Zealand. All of that fits under the general heading of “Infrastructure”, and on our committee, we heard from the Minister and the officials about that kind of investment.

When it came to the sciences, we had the conversation with the Minister about where we could increase opportunities for Māori in science, noting that only 2 percent of the science workforce are, in fact, Māori. We have a long way to go to be able to try and address that imbalance—that very obvious imbalance—but part of what makes me happy is the fact that we have allocated $33 million to expand Vision Mātauranga. That’s a capability fund to strengthen the relationships between Māori and, obviously, our sciences as well.

It would be remiss of me as the member for the Waiariki to not mention the investment into tourism that we have had, and part of that conversation was a really welcome sector recovery fund of $400 million, all up, to try and hang on to some of those really strategic assets that we have within our tourism assets all across New Zealand. To date, we’ve had a couple of those announcements: one in the Waitomo and one in Kaikōura. Both of them are really, really crucial to our tourism landscape, and I know that our folks back home in Rotorua are looking forward to some announcements there, as well.

Can I also note that we had conversations about the $10 million which was directed straight into Māori in tourism, of which we’ve got a very strong leader at the helm of that with Pania Tyson-Nathan, who has been doing work with stakeholders that work in Māori tourism around New Zealand. They’ve got their allocation of $10 million to be able to help encourage the work that they do.

Part of Budget 2020 is also looking towards the future of tourism, and we have the task force co-chair that was announced, the Hon Steve Chadwick, who’s been put at the helm of that to help reimagine what the future of tourism is going to look like. So there’s a collaboration going on between the Ministry of Business, Innovation and Employment, Tourism New Zealand, and the sector as well, where they’re looking to reimagine what tourism is going to look like in New Zealand. We know that the borders will open—we know that—but we need to make sure that when they do open, we’ve got an environmental policy and a sustainability policy that absolutely enhances the offerings that we have in the tourism industry.

We have worked hard on our COVID-19 health response. Our economic development is going to play a huge part in our recovery from this, and that’s why we’re committed to working together and, obviously, investing in some of those Māori-led solutions to restart and also to repair our communities. I was pleased, every time we had a Minister in the seat, to talk about the many opportunities that have presented themselves and that are in the report.

Madam Chair, thank you for the opportunity to speak in this debate. I have a particular image I wish to plant in the mind of the Minister for Economic Development in the hope that he will respond to it and I promise it’s a pleasant one. As we went through the COVID crisis, we became increasingly aware that a strong health response was a strong economic response, that keeping New Zealanders safe, keeping our borders safe, and eliminating the virus gave us the best opportunity for recovery because then our economy could get going again. Of course, we are now making moves to help our economy to recover. But there are two particular areas that I wish to direct the Minister’s attention to that I’d like to hear a little bit more about. Let me, Minister, give you the image that has been in my mind for quite some time since early in the lockdown.

Early in the lockdown flights were leaving New Zealand—people, tourists trying to get home. Lufthansa flew one of the last flights out of the country and as it flew out it did a big loop right over Auckland, a big farewell loop to say goodbye. In some ways, it was, for me, quite a heartbreaking moment, the thought that the world was leaving us. How were we to stay in the world? So to me, that was a critical worry as to how we were going to keep in contact with the world. We are an exporting nation. We rely on exports. We rely on trade. We rely on those critical aviation and freight and transport links to keep us going and if we cannot keep those going, we become very closed in. Sure, we can feed ourselves but we need the world as well to thrive. So as part of our critical response, we needed to put money into maintaining those transport links and I’d like to hear more about exactly the process that was gone through in deciding how to keep our critical transport links and our supply chains going and why it was so important as part of our response to COVID-19 in Budget 2020.

But going from that image of the farewell flight and how we maintained our links, and going down to something much more local. Minister, you and I both come from West Auckland, the most beautiful part of the country, of course—[Interruption] The most beautiful part of the country. Recently, there have been a couple of transport announcements in West Auckland and they are just absolutely marvellous. So as part of this economic development, infrastructure, and transport debate, I want to understand those transport links and, in particular, it is the focus on getting people moving, getting public transport going, getting alternative modes of transport going.

As a West Aucklander, we suffer from congestion on the motorways. We suffer from a lack of linked-up cycleways. We suffer from a variety of, I guess, ways in which we just can’t move around our city freely. But building those transport links has been important, not just for the sake of transport but also for creating jobs, creating employment, and keeping our economy moving.

So there are a couple of brilliant projects that have been announced down our way as part of the response to COVID-19, as part of the infrastructure funding that’s coming through in response to COVID-19—in particular, the Whau walkway, which I think is a brilliant announcement, but also the north-western busway. I’d like to hear more about why those busways are so important to us—partly for the reasons of transport, but also, critically importantly, for the reasons of keeping people in employment and keeping giving people jobs and helping our economy to get moving again. It’s all part of the economic development we need to engage in.

I think, Minister, what it speaks to is the need for a joined-up response across the various areas of Government, from economic development to infrastructure, to transport, to all the areas for which we are responsible. So tell us about that, Minister—how all those things make a difference to us as we reinforce our health response to COVID-19 with an excellent economic response, an economic response that will, in the long term, serve us well as we respond, recover, and rebuild.

Thank you, Madam Chair. I will make some comments about aviation and the strenuous efforts that the Government undertook in the months following the COVID outbreak to protect the country’s supply chains and ensure that our aviation system continued to function.

It was very clear that aviation was going to be one of the first and the worst affected. In fact, we saw during March, really, the global aviation system shutting down in large part, and, for an isolated country like New Zealand that relies on our global connectivity through aviation, this posed a really serious threat. So one of the first measures the Government took was to put in place a $600 million aviation support package. That included capital injections into the likes of airways to ensure that our civil aviation network kept operating; six-months’ relief from paying passenger-based levies—a bit hard to generate your revenue when you haven’t got any passengers coming through your airports and flying. We put in place a $10 million freight capacity scheme, and that, to my mind, was one of the really successful early initiatives in the COVID time. I want to acknowledge New Zealand Trade and Enterprise, our export agency, who worked on the ground with their customers who rely on aviation to get sensitive and high value exports to their markets, and they worked very hard with the Ministry of Transport to put in place that short-term scheme which kept a number of flights operating, getting high-value exports to market but also essential items like medical supplies coming into the country when we were in the midst of a pretty severe lockdown. That work has continued and $320 million was put towards funding the international airfreight capacity scheme—so a much bigger programme organised by the Ministry of Transport.

It involved six airlines, Air New Zealand and several of the internationals, flying into New Zealand on scheduled services, and the real merit of the scheme was, I think, that it was market led, if you like. It was supporting the airlines by topping up individual routes to ensure that each flight was commercially viable. What we discovered early on was that 80 percent of the freight pre-COVID that had been coming into New Zealand was coming in the belly hold of passenger aircraft. So, effectively, air passenger services had been subsidising our vital airfreight routes. So the country’s gone into lockdown. There were almost zero people coming across the border in those early weeks. This approach of topping up these particular freight routes ensured that we were connected to the likes of Los Angeles, Shanghai, Sydney, Melbourne, the Gulf and kept New Zealand’s vital air freight supply lines open.

Let me say a couple of other things in relation to public transport. With only essential industries working in lockdown level 4 and some still major restrictions under level 3, and significant and understandable public concern about close social contact, there was very little demand for public transport in our major cities. So the economics of providing public transport more or less collapsed, given, as members will know, 50 percent of the cost of public transport is funded through the fare box, through the tickets, the fares that we pay to use the trains and the buses and the ferries. So the New Zealand Transport Agency, Waka Kotahi, had to step up to make sure the public transport services continued, because how else would essential workers get to and from work.

So a pretty significant sum of money, in the region of $100 million, was spent by Waka Kotahi over the last six months. Ensuring that our public transport services could continue, at a time when local government are also suffering a hit to their revenues because of COVID, really needed the Government to step up and make sure that public transport continued. I’m pleased to say that we’ve seen, in fact, somewhat faster than a number of other countries around the world, public transport demand has returned in our major cities.

Madam Chair, oh, thank you very much. A question to the Minister of Transport about the National Land Transport Fund—in particular, the hole in the fund that’s been created not through any fault of the Minister, unlike everything else in transport, but through COVID-19 and the lack of people driving on the roads, and what effect that will have on the National Land Transport Fund. I think the Minister, in the Economic Development, Science and Infrastructure Committee, told us that some work had been done on the quantum of the hole in the fund as a result of a lack of fuel tax revenue. So I was wondering if he could update the committee on how large that quantum is. I think he said in the select committee that he would have some figures soon, so I’m looking forward to what that is, and, secondly, what the Government intends to do about that gap in the National Land Transport Fund.

The member is quite correct that the COVID economic shock and the effects of the lockdown have for a period of a few months put a big dent in vehicle kilometres travelled, which is how we talk about the level of road travel activity. While driving levels have bounced back in recent times—almost to normal, actually—those few months really took their toll on the revenues that supply the National Land Transport Fund, that is road-user charges (RUC) for diesel vehicles, and the fuel excise duty (FED), of course, that we pay at the pump.

In addition to that, we’ve seen some other costs that Waka Kotahi has had to pick up. In my earlier contribution, I mentioned public transport. Local government without Waka Kotahi stepping up would simply not have been able to continue ensuring that public transport was running, and they had to step into the breach. Some of those costs will continue, actually, for the next few months.

In addition to that, a third extra impost in that is that during the lockdown a number of big construction projects weren’t able to operate in spite of, actually, pretty successful efforts by the Transport Agency through advanced payments to some of the contractors, which enabled them to keep their workforce on—they were genuinely fearful of losing a lot of their workforce during those weeks. And remember, at the time we had no idea how long the disruption to the economy was going to continue for that time.

So those three things—the public transport costs, the additional costs to some of the big infrastructure jobs, and also falling revenues from FED and RUC—have meant that there is a very significant pressure on the National Land Transport Fund. I want to reassure the member that the Government will be protecting the fund. We’re going to strenuous efforts now to put in place a number of different kinds of infrastructure projects to stimulate the economy and boost jobs. The last thing we want to do is see our core transport infrastructure programme falter. So I’m not able to give the member details today on exactly how big the hole is and what the Government’s doing to fill that hole, but I want to reassure him that we will be making that information available publicly before long.

Thank you, Mr Chair. I thank the Minister of Transport for that answer. I encourage the Minister to update the committee in due course on that. I think it is a matter of public interest. I acknowledge that the Government’s been working through that impact and figuring out exactly where the money will come from to fill that hole. I acknowledge the Government’s commitment to protect the fund, but I think it would be in the public interest for an announcement on that to be made sooner rather than later.

Just as a follow-up, I’ve got a series of questions which are designed to be useful and elucidate some information for the committee. The Government policy statement—a draft was released pre-COVID, I think; quite some time before COVID, actually. I understand that is being finalised. I know that there are a large number of people out there interested in exactly what that new Government policy statement will say, so I was wondering if the Minister could update the committee on when he expects to finalise that and release it publicly.

Thank you to the member for that question. For those of you who are listening to this debate who aren’t transport geeks, the Government policy statement (GPS) is, essentially, our transport budget. It’s the Government’s high level statement of policy direction for the land transport system. That includes rail and coastal shipping and other things as well. It’s the chance for the Government to set out its policy direction, and also set a budget for transport for Waka Kotahi. We do that through a number of different activity classes, and we set upper and lower spending limits for the likes of walking and cycling, rail, coastal shipping, State highways, State highway maintenance, local roads, local road maintenance, and a few other things.

It’s a critical input into the transport system, because it’s what allows councils who are major players, funders of parts of the transport system, and the whole of the transport industry into many sectors. It allows people to know the direction, the priorities, and how much money is available. What we do is we set the GPS on a three-year cycle that is roughly aligned with the parliamentary cycle and has a 10-year horizon. So we are about to release, very shortly, the final GPS. The draft form has been out now for a number of months, consulted widely. We’ve considered the feedback, weighed it all up, and we’ll have the final GPS to release shortly.

But I will say that I think we’ve aimed to sharpen and clarify some of the policy direction. You’ll see a continuation of our Government’s commitment to a balanced transport policy that tries to allow every mode of transport—whether it’s road, rail, public transport, walking, and cycling—to play to its strength and realise its potential. A big commitment to better transport options in our cities, making our cities livable through walking and cycling investment, trying to provide more choices through public transport, rail, and other forms of rapid transit, so that some people in our cities will choose to leave their cars at home, allowing the roads to move more freely for people who have to drive.

You’ll see a big commitment to an efficient and sustainable freight supply chain for the whole country. That’s a whole new piece of work, actually, that really hasn’t been attempted before, but it’s about bringing together our investment in road, rail, port reform, freight hubs, looking at the import and export supply chain and how we can make it more environmentally sustainable, reducing carbon emissions, and more efficient, to drive down costs and grow prosperity.

The other really big thing in the GPS is a commitment to net zero carbon by 2050. So decarbonising the transport system is arguably one of the biggest challenges that we face in front of us over the next 20 to 30 years. We’ll be getting cracking on that under the new GPS.

Thank you, Mr Chair. Can I ask the Minister about the East-West Link project in Auckland, which is one of the 12 projects that were re-evaluated following the new Government policy statement from February 2018, I believe it was, and 11 of those projects have gone through their formal re-evaluations and they’ve been published on the website. To varying degrees they’ve been either adopted as part of the National Land Transport Programme or they haven’t been, but the East-West Link project is noticeable by its absence; it’s not clear what’s going on there.

I note the Minister’s comments from, I think it was, December 2017, soon after becoming the Minister that the project was something that the Government realised, basically—I’m paraphrasing the words of the Minister here, but words to the effect of—has to be done in that part of Auckland. It’s a heavy industrial part of Auckland and a major employment centre. The Government was interested in a solution there. We’re now, sort of, 2½, nearly three, years on. There’s a real lack of clarity about exactly what is going to happen there. I acknowledge the Minister’s comments publicly in the past that it’s a very expensive project—no one doubts that. But, equally, I put it to the committee that there’s also a recognition, I would hope, across the House that a solution is required in that fast growing part of Auckland with major congestion problems. So I’d just ask the Minister for an update on exactly what’s going on there and what the Government’s intentions are.

We’ve had quite a lot of debate in this Chamber about the East-West Link over the last few years. I think where we can agree is that it’s a vital freight corridor for Auckland, it suffers a high level of congestion, and there’s a problem that needs to be solved there. We’ve had the view in Government and in Opposition before that the megaproject approach had really got out of control. It was too big, too expensive, and simply couldn’t be justified. So, under the new policy settings in the Government policy statement that’s been in place for the last three years, Waka Kotahi have been looking at what kind of solutions they could find, and they’ve really been working hard to try to see what kind of interventions might fix the problems there. The fundamental problem in my view is the freight corridor, but there are a whole lot of other issues that complicate that in the area.

I think it’s fair to say that Waka Kotahi—notwithstanding their very significant capability in dealing with these issues—have struggled to find a solution that doesn’t cost an arm and a leg. I have encouraged them, they’ve come back to me, and then I’ve asked them to go away and do more work on it, and they’re continuing to do that. I’ve asked them to look at whether or not pricing could be a solution there that could potentially be part of the solution—effectively, congestion charging. I’ve also asked them to look at whether there are other demand management tools like freight booking systems that also might ease the congestion and make it easier for freight to move along that corridor. So the problem’s not solved yet. I recognise that something does need to be done there.

The only other thing I would say to the member is that that part of Auckland, which is currently used to a very high degree for the transit and the storage of containers, is also not immune to rapidly changing land values in Auckland as the city grows and attracts more economic growth and the land from the centre of Auckland moving outwards is becoming more expensive. I’m not sure that in, let’s say, 15, 20 years’ time that land will be used for stacking containers. Also, while we consider the future location of the Port of Auckland, until the idea of a port of Manukau is eliminated—and I want to make it clear, I’m not advocating a port of Manukau, but it is at least one option among several that’s worth serious consideration—you wouldn’t want to invest $1.5 billion in a megaproject on that location until you had far more certainty about its future land use.

Thank you, Mr Chair, and thank you, Minister of Transport, for that answer. There’s a wee nugget that I suspect people may be interested in, which is the question of price and pricing and demand management, which I think people would cautiously acknowledge is something that needs to happen, and we look forward to hearing more about that in due course. I want to ask the Minister about the third and fourth main line in Auckland. I acknowledge the Government’s commitment through the New Zealand Upgrade Programme to starting work on the third main, and I just ask the Minister whether or not consideration was given to doing the third and fourth at the same time. There’s quite a lot of support, certainly from my experience in Auckland in particular, for futureproofing that line. You won’t find many people who disagree that we desperately need the third main now, and probably within five to 10 years we’ll need the fourth—so whether or not consideration was given to that and whether or not the Government would look at expediting doing the fourth at the same time as they do the third. My understanding from reading the business case from, I think, two or three years ago is that there are—I think the phrase used was “cost synergies”—to doing the fourth at the same time as doing the third, and certainly if you did that it’d have the National Party’s support.

Thank you, Mr Chairman. I really appreciate the member’s question about the fourth main. In my view, the building of the third main, an additional and third rail line running in both directions along the southern corridor between Quay Park downtown and Wiri in the south—key industrial and logistics district in Auckland’s southern suburbs—to my mind, is probably the most important transport project right now in Auckland because of the sheer congestion on the network between freight and commuter traffic. That’s why when we put together the New Zealand Upgrade Programme that we announced in January, building the third main was the sitter to be included in that $6.8 billion programme.

The member raises a really good question about the fourth main. We weren’t able to contemplate bringing it into the programme at that time, but he raises a really good question, and it’s something that I’m willing for us to give serious consideration to, to go away and think about it. Part of the reason for it is that much of Auckland’s growth for the next 30 to 50 years is going to happen in the southern suburbs. It’s already happening—huge growth pressures. The big problem that we’ve got is the southern motorway is a bottleneck. It’s not realistic to think, you know, in the next 30 years we can build 28 motorway lanes, because where will those cars go when they get into the city? We have to actually achieve mode shift. We’ve got to build rapid transit, including boosting the capacity of the heavy rail network and, I think, serving the growth that happens in Auckland’s southern suburbs through high-frequency, electric, modern commuter rail, out to Pukekohe, as we’re doing through the electrification right now, and then I would like to see it go further into Tuakau, Pōkeno, and really open up rail-led urban development in that southern corridor. That’s the way we can support high quality growth without killing people by jamming up the southern motorway 24 hours a day. So I appreciate the member’s suggestion.

Well, following on from that—and thank you to the Minister for that answer, and, as I say, I do urge the Government to do the fourth main at the same time as doing the third. I think the business case I referred to earlier—I think I’m right in saying that the benefit-cost ratio was actually higher if you did both the third and fourth at the same time. In the grand scheme of things, it’s not actually that much money given the benefits that it would accrue to the transport system in Auckland.

Genuine question for the Minister around the expansion of the heavy rail network in Auckland and why the decision has been made over the last three or four years to focus on light rail as, I suppose, the solution for congestion in Auckland and transit in Auckland, and why, given that there’s been such heavy investment, quite rightly, into the Auckland rail network through the City Rail Link (CRL)—many billions—I think the budget’s now $4.5 billion or so. Why, given the heavy investment into the CRL but also the electrification over the last 10 to 12 years, which has driven very strong patronage growth on the Auckland rail network currently and in the past few years, has the decision been made to move to an alternative mode of public transport in Auckland which is, frankly, a mode that is not that known to New Zealanders? I mean, many New Zealanders will have gone to Melbourne and other countries and seen trams and light rail in other countries, but it’s not something that we have a great familiarity with in New Zealand, both from an engineering point of view and from a public familiarity with.

So just a genuine question to the Minister as to why the decision has been made to move away from the expansion of the heavy rail network—I’m thinking, for example, of lines such as rail to the airport, the heavy rail to the airport from Puhinui or down from Onehunga to the airport, and particularly in light of the fact that that was the Auckland rail plan for the better part of 40 to 50 years, going back to the De Leuw Cather report of the 1970s, “Robbie’s Rapid Rail”. There’s probably a reason why that tongue twister didn’t quite catch on.

💬 Hon Scott Simpson: Try it again—say it again.

Robbie’s Rapid Rail—there, I did it. You know, going back to those days and, indeed, all the way through until the Auckland plan of 2012. So just a general question as to why the Government is particularly interested, and to relate it back to the Estimates, the Estimates do contain money for rapid transit and light rail—so just a question to the Minister about that. Thank you.

This is a very, very good discussion, so I appreciate the member raising that issue. The first point I want to make is that the core of the policy—the foundation, really—is about rapid transit, and that lies at the heart of our Government’s policy around how we build successful cities. Successful cities need a very high level of mobility. If workers can’t get to their jobs, if firms can’t get access to their workforce, their customers, or their suppliers, productivity falls. So we have to deliver a high level of mobility. As cities get bigger and more densely populated, that becomes more and more challenging. What we have to do in our cities—Auckland, and let’s say at least the other four high-growth centres, the big imperative is that we have to move more people with fewer vehicles. That’s why rapid transit is important.

Why do we talk about rapid transit? Because it embraces a range of different modes from heavy rail, light rail, busways that are running on dedicated grade separated tracks, and, essentially, it’s high-frequency transport that is not competing directly with traffic. That’s the working definition. So rapid transit is the thing that’s important, not necessarily the mode, and then the idea is you make decisions about mode depending on the trade-offs between frequency cost and the terrain that you’re moving through.

So Auckland already has a Rapid Transit Network. It’s made up of the heavy rail network, which has been remarkably successful in terms of the number of public transport journeys growing over the last decade since the big investments and upgrades that started to be made in the Clark years and carried on through the last National Government. So there’s a lot to celebrate with the success of rail in Auckland. We also have the Northern Busway, which is rapid transit as well, which is a massive success story. It’s taken more than three lanes of traffic off the Harbour Bridge every morning, and it’s a great demonstration of how rapid transit, alongside motorways and roads, provides that dynamic flexibility that eases congestion.

So our view is that the big challenge in Auckland—as well as, actually, in Wellington and the likes of Tauranga, Hamilton, and Christchurch—is to build rapid transit networks. In Auckland, we think that the new lines that need to be built are city centre out to Māngere and the airport, connecting the two biggest concentrations of jobs in the country. The purpose of that line is fundamentally not about getting people to catch a plane; it’s about providing modern, convenient rapid transit for people who need to commute for work or for education or community. There are other lines. From Auckland out to the high-growth corridor in the north-west is also important. The south-east—airport, Manukau, out to Botany, and up into the south-east—also one of the poorest areas for public transport in the city. And, of course, an additional is a crossing that includes rapid transit and follows a rapid transit corridor up through the North Shore and up into the northern suburbs. In our view, building that network is the priority, really, for the next 20 to 30 years of transport investment in Auckland.

Why light rail? The answer is simply that, when you’re building a rapid transit network across an already built-up city, light rail offers you far more flexibility than heavy rail does to move through heavily populated areas. Light rail includes a range of different possibilities in itself. You can have a surface-running streetcar model of light rail, that many people will be familiar with from Melbourne, right through to the light metro option, which you can see in so many cities around the world like Paris, London, New York, and others. So there are a number of different options. Light metro tends to have a completely segregated corridor so that it’s not in the street competing with pedestrians and other traffic, and that enables it to go faster. But that segregation then entails a higher level of engineering, which could be going under, being elevated, or in some kind of separated or fenced corridor down the middle of the road, for example.

So it’s been our view—and, really, building on the work that Auckland Transport and the other transport agencies did under the last National Government, looking at that corridor from the city centre out to Mangere—that really agreed that that corridor was of urgent importance; that bus congestion on the isthmus was becoming a major problem, and that has continued to be the case; and that light rail was the optimum mode for that. Since then, as the member knows, we’ve done a lot of work on that route, looking at finance and governance options, as well as whether or not it would be a streetcar model or a light metro option.

I would finally say that it’s been our view that the light metro option offers significant benefits because it enables you to move more people at speed. If we want to build a rapid transit network that can offer an option that rivals people riding in their private car on the motorway to get from one side of the city to the other, speed and journey time become critically important. And the faster the journey is, actually, the higher the amenity benefits, the more urban development that you’re going to get around the stations, and the greater mode shift you’re going to achieve, and the greater use by people of the system.

Tēnā koe, Mr Chair. Tēnā koutou e Te Whare. I rise in this debate to take a short call to speak to the Government’s plans on road safety and the priority of road safety in the transport budget in the Estimates. I just briefly wanted to talk about why it was important in 2017, the very end of the year in which we came into office—

💬 Chris Bishop: I raise a point of order, Mr Chairperson. We have the Minister of Transport in the chair here. This is the Estimates, which is a time for members of Parliament to ask questions of the Minister about the Estimates before us. It’s not the chance for Associate Ministers to stand up and make speeches about the Government’s plans for road safety. We’ve got an associate spokesperson seeking the call. We’ve had a very constructive last 40 minutes or so of debate, and I think the Minister is quite out of line.

CHAIRPERSON (Adrian Rurawhe): My ruling is that the Green Party has an allocated time and any Green member of Parliament may utilise that time the same way that any other member can.

💬 Chris Bishop: Speaking to that—

CHAIRPERSON (Adrian Rurawhe): No, no, no. If you’ve got a new point of order, absolutely. I’ve made a ruling, OK? So if you’ve got a new point of order, absolutely make it, but if it’s relitigating my decision, no, don’t do that.

💬 Chris Bishop: I raise a point of order, Mr Chairperson. It’s just simply to make the point that—

CHAIRPERSON (Adrian Rurawhe): No. If you’ve got a new point of order, please make it, but if you’re—[Interruption] I’m on my feet. If you’re just making a point about the ruling I’ve just made, that’s a serious issue, which will be dealt with.

The Green Party transport policy is very much focused on a sustainable transport system, and part of that includes looking at safety in our transport system and ensuring that we do not accept loss of life or serious injuries as a necessary consequence of getting around the country. In 2017, when we came into office, 378 people—we came in, obviously, at the very end of 2017, but in that year—lost their lives on our roads, and 2,864 were seriously injured. That’s what led to the Government putting serious, significant priority on road safety, and that was reflected in our Government policy statement on land transport and in our funding. Since that time, in the space of two years, this Government has invested nearly half a billion in targeted safety upgrades, improving over 2,500 kilometres of State highways. But, in the next year, the New Zealand Transport Agency will spend that much on targeted safety upgrades. So, in total, we will have spent a billion dollars.

These aren’t big, flashy projects. They’re things like fixing the layout of roads that communities have known are dangerous for years. They’re putting in place crash barriers, whether that’s on the side or median barriers, near gullies and other high-risk spots. It’s those basic improvements to the places where people are currently driving and more likely to be killed or seriously injured. On State highways, we’ve completed 12 significant projects, 12 are in construction, and 26 are in planning. On local roads, 15 significant projects are complete, 40 are in construction, and 21 are in planning. We immediately increased funding for road police by $100 million after it had been cut by the previous Government, and that increase will be reflected in the future, as we see our next Government policy statement being rolled out. We were already starting to see the benefits even pre - COVID-19. Now, obviously the COVID-19 shutdown led to a serious reduction in vehicle kilometres travelled for a few months and a serious reduction in loss of life on our roads, which is great, but that of course will not be sustained unless we continue to invest in enforcement, in maintenance, and in improving the safety of our roads with these kinds of cost-effective improvements.

I just want to put it in context, because sometimes we hear from the Opposition party why we aren’t building roads of national significance when only one person has died on those. Just to put it in context, in the last decade the completed roads of national significance only improved 212 kilometres of our State highway network. That is 2 percent of an 11,000 kilometre State highway network. So, if we went by that logic and it took 10 years to improve 2 percent of our State highway network—which, by the way, is only where 50 percent of the fatal crashes are happening—it would take us 500 years to improve the State highway network to the point where we’d actually be preventing death and serious injury. So that is not a realistic option, and yet we have seen overseas comparable countries, like Norway, make a significant difference, substantially reduce death and serious injuries on their roads—roads that are similar to New Zealand. They are windy, they are mountainous, they have a small population spread over a large country, and they have been able to drastically reduce deaths and serious injuries.

This Government has made it a priority. We have taken action. We’re already starting to see the benefits of that, and we will continue to see the benefits of that—a robust and evidence-based policy, unlike the National Party implemented during their 10 years, when we saw a catastrophic increase in deaths and serious injuries on our roads from 2013 to 2017.

Thank you, Mr Chairman. Thank you very much. I’m a member of the Economic Development, Science and Innovation Committee, ably chaired by Jonathan Young—and I thank you very much for the collegiality we have within our select committee. We’ve done some interesting work, we’ve asked for some interesting briefings, and I think a lot of the work we’ve done has contributed to our overall knowledge of the importance of economic development in terms of recovery.

When we’re thinking about recovery from COVID, for example, we can’t really go past the infrastructure spending that this Government has put into place. Part of that is the additional $3 billion for infrastructure spending. I want to focus on a very small proportion of that and the importance of taking a slightly different approach. In my home patch of Christchurch East, I have a suburb that was particularly devastated by the impacts of the earthquakes nearly 10 years ago. I have to say that I have a very parochial and particular group of people who are very clear about what they see as important in terms of recovery from the earthquakes. What we’ve been able to secure in this term of Government is actually a different way of doing things, where we see infrastructure as not just the build of physical infrastructure—it’s not just about the $400 million that’s going into supporting schools, for example; it’s not just about the rebuilds of hospitals and the like—but it’s also about social infrastructure.

What I want to talk about is an announcement that we made today about a collective group of community facilities in the suburb of New Brighton and how we have, through the COVID-19 response fund, been able to support nine initiatives in a collective to be funded. Now, why that’s important is that my area had been triply disadvantaged: of course devastated during the earthquakes, difficult to rebuild, and there was a piece of legislation—the Greater Christchurch Regeneration Act—which should have supported the rebuild of my part of town. However, the specificity around New Brighton was removed when the bill itself was going through select committee in the previous Government. So New Brighton, which is a very special and significant and iconic community in Christchurch, which could have had specific legislation put—that was removed.

But what we have been able to do with the $3 billion build fund is allocate $7 million to New Brighton. What that does for those nine community groups is staggering. The Eastern Community Sport and Recreation, for example, has 1,500 children which turn up on a Friday for sports, and part of the build is going to be able to finish off this multi-sports canopy which they will be able to use as an all-weather sports facility, particularly for netball. Also as part of our social infrastructure, we’ve got a refurbishment of the New Brighton football club. Now, these things don’t sound big to us across the Chamber, but for my community they are big. Completing the builds of the South New Brighton and the New Brighton surf club; Guardians of Rāwhiti, which will actually build a butterfly garden; the bridge hub South Brighton, which is a community and performance space, which will happen in New Brighton; and Waka Ama—what we are able to do is secure the Waka Ama site to make sure that the gear that our paddlers use is able to be secured, we are able to fence it, and we are able to put lighting there.

These are small but very significant pieces of work and they came together as a collective of community groups. They put in a bid to the infrastructure project and they were successful. It just goes to show that there is more to this Government than just the big announcements that that side of the House keeps telling us to announce, that, actually, the small, the niche, the bijou projects actually can have a potentially great impact.

Members, before I call the next member, I just say that we now have the Minister of Tourism in the chair, if there are any questions around tourism as part of this sector. We have the Hon Shane Jones ready to come to the chair on regional economic development, as well.

I raise a point of order, Mr Chairperson. Thank you, Mr Chair. Earlier, and through the previous committee stages operating under the new rules, which is short contributions in question and answer - type style, we’ve been repeatedly pulled up on this side of the Chamber for not adhering to that format. Just with the last two contributions, we’ve had a full five-minute speech with no questions to the Minister at all, and for the last one it wasn’t even in relation to the Minister of Tourism, who was in the chair. So I’m just seeking your guidance on how we work through that, given the expectation being placed on us to be short with our calls and to ask questions to engage with the Minister.

It’s entirely up to members. It’s the members’ time and each party has an allocated amount of time. It is certainly encouraged, exactly how the member has characterised the new way of carrying out these debates, as an interaction between the Minister and a member on specific issues. But it does not mean that that member cannot stand and make a five-minute contribution—particularly those who are chairs—giving an overview of the reports that they’ve submitted to the House.

Thank you, Mr Chair. Look, I’ll ask a couple of questions, then, of the Minister of Tourism to make sure his time is utilised. Now, I could have asked this—and I had hoped to ask this—of the Minister of Transport, but there is crossover between the two, so I think it’s pertinent, still, for this Minister to be able to address it. It’s in relation to the aviation sector and around the international flights currently. Obviously, there are very few coming into the country, and we understand now that Air New Zealand have had to put a halt on incoming international flights because of the lack of capacity in our quarantine facilities.

So I’m just keen to get a sense from the Minister as to whether he’s had any discussions around the impact on our aviation sector—Air New Zealand, specifically, in this case—if we’re not able to provide consistency around what that scheduling might look like, but then also, flying on from that, around the back loading of freight from the horticultural sector. Obviously, that’s coming up to peak picking season soon, and the cost of freight back loading is significantly higher now—so whether there’s been any discussions between him from the tourism perspective and the Minister of Transport in terms of linking a better solution or more costly approach. That aspect would be my first question, and then one to follow.

Thank you, Mr Chair. Well, it’s a pity the member Tim van de Molen didn’t ask those questions of the Minister responsible for aviation and transport. What I can say, though, is that aviation received some $600 million post-COVID. We’ve got to make sure that the air routes are maintained and that airlines retain the ability to fly between destinations, and also $900 million in loans was given to Air New Zealand. But in terms of the wider questions he asked, it’s difficult for me to answer as they do fall into the purview of the Minister of Transport, whose time in the chair has ended.

I appreciate that. I just would have expected there would be some collaboration between the Ministers across portfolios that clearly intertwine, but if that’s not the case, then that’s fine. I would happily have asked that of the Minister of Transport if the Green Minister hadn’t jumped up and done a self-appreciation speech for five minutes.

Moving on to the next point, though, which is in relation to the proposed international airport tariffs. With his tourism portfolio, I’d be really interested to understand what conversations the Minister of Tourism might have had. Given that Christchurch Airport is 25 percent owned by the Crown and their purchase of land down in Tarras for a new international airport, can the Minister give us some insight into the conversations he’s had or the discussions he’s had? How aware was he of that potential purchase, and where does he see that sitting from a tourism perspective, in terms of contributing to the economy, if we’re putting an international airport in that location?

Well, again, the member Tim van de Molen is asking questions that I don’t have responsibility for. My responsibilities as the Minister of Tourism are to make sure the tourism settings are such that tourism can continue and that tourism businesses can continue, bearing in mind that the definition of tourism businesses is fairly wide ranging. But he’s really asking questions that come under the purview of another Minister, although we do have conversations all the time, and—

Tim van de Molen: No idea, no conversation, no input, no thoughts, no judgment, no work.

Well, if the member would like to listen, I did say that we do have conversations all the time. But in terms of conversations around what he’s actually asking, the Minister of Transport is the person that he should have been asking the questions to.

Mr Chair, thank you. The Minister of Tourism came in for the Economic Development, Science and Innovation Committee and talked about the $400 million COVID response fund, which will be used to fund the Tourism Transitions Programme, protecting tourism assets, etc. I just want to ask the Minister, and it’s coming more to light that there are travel agencies around the country that are working very hard to retrieve prepayments for overseas travel, whether that’s flights, accommodation, or cruises. These travel agencies have virtually no income, yet they are involved in retrieving what I understand to be several billion dollars’ worth of prepayments for New Zealanders. I just wonder, in order to support these businesses, what consideration the Minister is making, or has made, regarding this Tourism Transitions Programme, because these businesses are acting in the best interest and benefit of New Zealanders yet they have no income. If they were to collapse right across the country, then it’s quite possible New Zealanders will not be able to retrieve those prepayments. Often, those prepayments are made to companies overseas.

Exactly—my role is to look after the visitors who arrive in New Zealand and make sure that their experience is the best it can possibly be. What the member is asking is what happens to New Zealanders who are looking to travel overseas and, again, I’m not responsible for—

Tim van de Molen: Does the Minister do anything?

—visitors who are going overseas. Now, the member asked the question “Is the Minister responsible for anything?” Well, the answer is, yes, of course. I’m responsible for visitors to New Zealand and the New Zealand tourism system. So what the member’s saying is that they expect me to be responsible for tourism internationally, tourism overseas. Well, I’m not responsible for those—

Tim van de Molen: I just thought you might have an interest in the wider tourism industry and have some insights—

Here we go again. Rather than actually asking questions that were relevant to the Estimates, asking questions about what happened in Estimates, they’re raising issues that are the responsibility of other Ministers and asking me to make comment on what happens internationally. So if the members really want to ask about Estimates and about what comes under the purview of the Minister of Tourism, I’m more than happy to talk about it.

For example, before COVID hit, we had inherited a number of issues from the previous Government. One of the biggest issues was that the previous Government were really quite good at marketing us as a destination, but not very good at managing us as a destination. And what that meant is that we had a number of communities who, because of the lack of infrastructure from the previous Government, were under pressure from visitors and were in danger of losing our social licence as a destination, and in communities. So our first thing that we did was address that, and our Responsible Camping Working Group actually started to address the issues of over-tourism in various communities. Now, I can take the example of Queenstown, where the mayor emailed me earlier this year to say that, previous to us, in years prior, he had received something like five to 10 complaints a day over the December and January period, and this year he had received one complaint in total over that period. That’s just to demonstrate the work that we had done to address the issues that we inherited.

Secondly, there was a lack of sustainable funding for the tourism industry to address those issues. So we introduced the international visitor levy last year, and we started to collect money on the international visitor levy—some $55 million in a couple of months. We also had a very successful year of tourism with China last year, and at the start of this year the Chinese visitor numbers were starting to pick up. Of course, everything ended when it came to COVID, and our numbers, instead of climbing, of course fell off a cliff. So the Government’s response to that was to put in place a broad-based response, where businesses were able to access the wage subsidy, and tourism businesses accessed $1.75 billion from the wage subsidy scheme. We also had the Small Business Cashflow (Loan) Scheme; we had other various tax measures.

During the course of the lockdown I engaged online via the regional tourism organisations (RTOs). We had numerous online meetings. I met with close to 5,000 people in the tourism industry and asked them what needed to happen. What they wanted was a continuation of the wage subsidy. They wanted investment in the RTOs so that there could be regional marketing. They also wanted support to pivot to the domestic market, because everybody knows that there’s going to be very little international—there’s going to be no international visitors over a number of months ahead of us.

So that’s exactly what we did. We implemented the Tourism Recovery Fund, some $400 million, and we split that into two parts: the Tourism Transitions Programme was to help businesses pivot to the domestic market, to help them to hibernate—if that’s what they needed—or to look at other options. The second part of the Tourism Recovery Fund was the Strategic Tourism Assets Protection Programme, where businesses who had an international or national reputation were supported. They had to be responsible for drawing visitors to a particular area and have significant spillover effects. And that’s coming. In a very short while we’ll be—[Bell rung] Just quickly, Mr Chair. In the very next short while we’ll be making announcements around the Strategic Tourism Assets Protection Programme.

💬 Hon Jacqui Dean: Everything he knows is coming out!

Now, the member over there says everything she knows, and as the Rt Hon Winston Peters said, “We could give her two minutes and she could tell us everything she knows as well.”

So we’ve done a lot in terms of supporting tourism businesses through this COVID period. We know that the trans-Tasman bubble is going to take more time than what we hoped. People had hoped sooner rather than later; it looks like it’s going to be later rather than sooner. But I look forward to some of the questions from the other side related to the tourism portfolio, related to the Estimates. Thank you.

The Minister said that he wouldn’t answer my question because I was referring to outbound tourism, but I’d like to ask the Minister, because these travel agencies right throughout the country are also agents for inbound tourism and they are conduits and brokers for the tourism industries that we have. As I explained in my first question, in terms of the transition fund, in terms of offering advice or support to tourism-based companies, what response is the Minister anticipating that he can make, or the Government can make, to ensure that, especially past the wage subsidy programme, when they will still need to operate—what sort of support will the Government offer?

In terms of inbound tourism operators, we do have an announcement in the next few days, so I suggest that the member waits for that. In terms of the outbound operators, again they are businesses that look after visitors who are going internationally. So I am not responsible for international visitation overseas.

Thank you, Mr Chair. I can see that my colleague Jonathan Young was having trouble getting an answer to his question about the support for the travel agents in New Zealand, so I’ll have another go at that. I’m just wondering if the Minister in the chair is aware that the travel industry supports 5,000 jobs across New Zealand. There are 500 tenancies that they occupy across the country, 660 small to medium sized enterprises, and 500-plus sole traders. They are the only organisations that are on the ground with travellers who are seeking to get the refunds and the credits from cancelled flights, but they are also an industry that is getting no income from the work that they are doing; they’re doing it out of the goodness of their heart. The wage subsidy is keeping them afloat at the moment, but it is not covering their overheads. They are looking for targeted support from the Government. They have written directly and copied you in, Minister, and they are asking, please can this Government target some support to their industry to keep them afloat, because there is going to be a day when we will need them back in work.

What was the question?

So my question, in case there’s any confusion, is: what support can the Minister provide to the travel agencies across New Zealand that they are going to be given targeted support?

Well, in terms of targeted support, there’s obviously not enough money in the Tourism Recovery Fund to pay the outbound tourism operators. One of the members there said that it is close to $1 billion. Now, the Opposition, I think, if they’re saying that they will fund $1 billion to the outbound tourism operators, then what they’re basically saying is—well, what I would have to ask them is, where are they going to find that money? Because they’ve already got an $80 billion hole in all their promises that they’re promising to New Zealand. So, Mr Speaker—

💬 Hon Todd McClay: Mr Chair.

Mr Chair, yes; thank you very much. The Opposition continue to ask questions around a part of New Zealand’s small business network. What they really need to do is make sure that—

Tim van de Molen: Oh, so because they’re small businesses, the Minister won’t talk to them?

Well, the small business Minister is also responsible for them, but, quite frankly, we cannot afford the $1 billion that they’re saying it will cost to bail out the overseas tourism operators.

Thank you, Mr Chair. Just to follow on from that question that I’ve just asked, and picking up on what the Minister has said, because there is clearly not enough money. I just wonder if the Minister can advise us, then, how the Government picks the winners in the tourism industry for Government support. There have been some very big allocations made—and I mention bungy jumping and whale watching, because these tourism and travel agents would very much like to know what criteria they need to meet in order to qualify for targeted support, as these other industries have.

Well, I’ve already covered over the criteria that the businesses need to meet. They need to have a national or international reputation, and they need to be significant for drawing visitors to a particular region. There needs to be significant spillover effects. A lot of the questions that they’re asking, actually, are around commerce; they’re not around tourism. They fall under the purview of other Ministers. What we’re talking about under tourism is the support for tourism businesses here in New Zealand. As I said earlier in my contribution, I’ve already outlined the criteria.

Thank you, Mr Chair. If I could ask the Minister of Tourism: if he’s saying to the committee, based on the questions that have been asked of the Budget, the Estimates, that he’s not responsible for small tourism businesses, because that’s for the Minister for Small Business, and he’s not responsible for large tourism businesses, because I suppose that’s the “Minister for large businesses”, exactly what tourism businesses does he believe he is responsible for?

Could I, secondly, ask him: in as far as the $400 million that came through the Budget to help tourism businesses—large businesses and small businesses, one assumes—why has he not been able to answer in this Chamber or in the committee to the number of jobs that are estimated to have been lost, and therefore, with the $400 million to the tourism sector—doesn’t feel like it’s targeted or focused—how many of those jobs will be saved?

I do remember the Minister has said in this Chamber it’s very hard to know what a job is in tourism, and, therefore, there haven’t been any estimates. Can he tell the committee why it is that Treasury released advice that went to him saying that 92,000 jobs would be lost in the tourism sector, yet he wasn’t able to come to the select committee or stand up in the House and remember that advice? The $400 million that the Government has allocated to itself to spend so far on what, to the tourism sector, feels like, or seems like, businesses that will get the best media coverage when the Prime Minister announces the funding is $400 million from the taxpayer. There are more than 400,000 people directly or indirectly employed in the tourism sector; 92,000 of them, Treasury says, are likely to lose their jobs. Can the Minister tell the committee today: of the $400 million that’s been allocated to tourism—to tourism, not to small businesses Minister, not to the large business Minister, but to the tourism sector under him and his portfolio—how many of those 92,000 jobs will be saved?

Let me say that the $400 million is going to make a better difference than the paltry $100 million that the Opposition was offering—$25 million a year for four years. In terms of the number of jobs, we’ve always said that we won’t be able to save every business and every job, and that goes not just for tourism. We have had 743 tourism businesses access the tourism transitions. The number of jobs that have been saved because of that are difficult to estimate because we know that not every job can be saved. But what we are doing is helping to save a number of businesses as well. We’ll be making, as I’ve said, announcements in the not too distant future about other businesses that will be receiving support from the stat fund, and, again, it’s difficult to announce or estimate exactly how many jobs will be saved through that support, because businesses have to make those decisions. We still don’t know when the borders will open, and what we’re doing is trying to give businesses the best chance to survive and see through until the international visitors do come. But let me say that our $400 million in the here and now is a lot better than the $25 million a year for four years that the Opposition announced as the tourism policy, and that had all the bounce of a rock.

Thank you, Mr Chair. Perhaps I wasn’t clear enough earlier. Treasury has estimated that 92,000 New Zealanders will lose their jobs in the tourism sector as a result of COVID-19. You, Minister, have gone to your colleagues and asked for $400 million to support tourism. I’m asking you directly what advice you sought or received of the 92,000 New Zealanders that Treasury have forecast will be made unemployed in the tourism sector. How many will be saved as a result of the $400 million? If the answer is “I didn’t ask.” or “They didn’t tell me.”, then the tourism sector deserves to know that. But, Minister, for $400 million to be committed to be spent and for you to say it’s hard to know how many jobs will be saved, which is the same as saying, “I don’t know.”, frankly, is not good enough for the tourism sector—those 92,000 people who are to be made unemployed—and it’s not good enough for the taxpayer.

The circumstances have changed quite rapidly from the time when we announced that fund—the $400 million fund—through to now. For example, we were hoping that we’d be able to tide many businesses over until the trans-Tasman bubble was able to be opened. We were hoping that it would be in a matter of months from May. Obviously, that has now changed. Circumstances worldwide have changed. If the member hasn’t been watching the news, he will see that Australia, which were looking like they were getting COVID under control and were hopeful for the trans-Tasman bubble—that, of course, has now blown out with the hundreds and hundreds of cases that we’re seeing in Melbourne and in Victoria. Things are changing, so it is difficult to estimate just how many jobs will be saved. But the reality is that our $400 million is a lot better than their $25 million a year for four years that actually did nothing.

Well, to the Minister, can I ask him: does he not think, for the 92,000 people that Treasury have said will lose their jobs, that his hope is just, frankly, not good enough? What you’ve said, Minister, is between when the $400 million was agreed by Cabinet to today, lots of things have changed. Well, of course lots of things have changed. My question to you though, Minister, was not “Is it difficult to estimate today because your hopes for the tourism sector haven’t worked out?” My question was: when you got the $400 million to spend in the tourism sector, what advice did you ask for and seek as to how many of the 92,000 jobs would be saved? If the answer is, Minister, you didn’t ask, then say so, and the tourism sector will understand what that means.

It’s not good enough, frankly, to stand up here in the committee and say, “Well, it’s hard to know today because a few things have changed.” If you’re going to spend $400 million in the tourism sector to save businesses and to save jobs, is it too much to expect that you ask what the best way is to save these jobs and how many jobs will be saved, because, Minister, you didn’t remember that Treasury had forecast 92,000 jobs would be lost?

We actually asked the tourism sector itself what they wanted, and what we have done is created a programme—

I’m sorry to interrupt the Minister, but it’s come time for me to leave the Chair for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

OK, colleagues. When we suspended for the dinner break we were debating the Votes in the economic development and infrastructure sector volume (B.5, Volume 1), as part of the consideration of the Appropriation (2020/21 Estimates) Bill. The Hon Kelvin Davis has the call, and he has four minutes 30 seconds remaining, should he so desire.

I understand that the Minister for Regional Economic Development is joining us. Is he going to take any speakers or do you want me to move on with the Vote?

I feel I should tell a joke or talk about a funny thing happening on the way to the House! But, look, it’s a pleasure to talk about regional economic development and economic development more generally, because it’s such an important part of, firstly, the COVID issues, but also matters relating to the important role that the Government can play in making sure that our regions thrive economically, socially, and culturally. I have three questions for the Minister that I’m sure the Minister in the chair, the Hon Kris Faafoi, will diligently jot down and inform the Minister of Regional Economic Development—when he gets here—that these are vital questions.

CHAIRPERSON (Hon Anne Tolley): You can’t say that—you can’t say that.

So I shall pause for effect before I give the Minister the opportunity to answer these questions. The first question is one borne out of ignorance and it—

💬 Dr Duncan Webb: Ha!

Well, as the new spokesperson for regional economic development—it’s not an admission members of Parliament make that often. I’m careful not to make the same mistakes—rather, not the same mistakes, but fall into the same trap that those wanting to quiz Kelvin Davis before the dinner break did, where every single question was answered with “That’s not my responsibility.”

So my first question is actually about the relationship between the Provincial Growth Fund (PGF) and the recently announced COVID-19 Response and Recovery Fund and whether or not the Minister in the chair actually has responsibility for the $3 billion or at least an input into it, because we’ve seen a number of announcements made recently that relate to the COVID recovery fund but look very much in all respects like the announcements that we’ve seen out of the PGF. So that’s the first question.

The second question relates to—and I refer the Minister to the plethora of Provincial Growth Fund announcements as articulated in the dashboards that are available online—the region that is dear to my heart and that is the Otago region. The question is the title of funding for the Accident Compensation Corporation, where the recipient is indeed ACC and the sum of $12,503,650 has been announced for whatever project that ACC is the beneficiary of, and that seems a reasonably odd announcement to me—in fact, I haven’t seen an announcement of it.

And the third question I have, in my opening bat, is concerning media that was reported by RNZ last week around plans to announce a roughly $100 million recovery package for Southland in the wake of the imminent closure of the Tīwai Point aluminium smelter and attributing the New Zealand First Party with “scuppering the announcement at the 11th hour”. Now, as members know, and certainly Sarah Dowie, the MP for Invercargill, knows how important the aluminium smelter is to the economy of Southland. The imminent closure, if that indeed happens, will be devastating for that region—and this revelation rubs, I think, salt in the wounds of Southlanders who are very badly affected by this pending news. So I would like to know whether or not the reports were accurate and, if not, or either way, what the Government does have planned for that region in the wake of what will be probably the largest economic detriment to hit any province in a couple of generations. So there’s three questions to kick off with.

I’d like to thank the honourable member for those three questions, and if I can start with his request for information about the connection between the Provincial Growth Fund administrative arm and shovel ready. I won’t delve into which projects have not been yet announced. That lies with a broader number of Ministers than myself and the advice that we’re taking from the Crown Infrastructure Partners, ably led by Mark Binns. But I would like to say that the public information does provide the answer.

Where it is appropriate for the Provincial Growth Fund network to handle shovel-ready announcements that are under $20 million and have been through either the process of the Crown Infrastructure Partners or have also been double checked by the Provincial Growth Fund, then that is the crossover. There will be some cases where additional due diligence has to be undertaken. That’s just to assure the public that, where a party perhaps is not of local government character or another public entity, with this level of pūtea the officials are burrowing into who the counter parties are and whether or not everything that they’ve identified stacks up. This is something that has already been carried out in earlier years during the life of the Provincial Growth Fund.

On the question of $100 million and whether there was some scuttling, I presume is what the former Minister is asking, on the part of the party that I belong to, our party belongs to the coalition Government, and the coalition Government has actually mandated me to make significant announcements in the area of Murihiku, the Southland area, not the least of which is a handsome allocation of pūtea for flood resilience and stop work and catchment investments. So to suggest, number one, that our Government is not willing to put dough in to cushion the uncertainty felt within the economy I think is not only unfair but it’s incorrect.

On the point as to the $100 million, I won’t comment on scuttlebutt that may or may not be floating around Radio New Zealand. When Cabinet and the relevant Ministers who may be delegated to make decisions arrive at those decisions, then the position of the Government is announced. I think that the future of the smelter will be an item of considerable politicking, as we get closer to the election. I think the committee should bear in mind that the current owners have identified a 14-month period at which they will have exercised an option to—well, they’ve exercised their power to haere rā, to leave, but they will have a tremendous fiscal obligation upon them. I did read some reports that the door was fiscally still ajar—I think I’m being reasonably accurate in attributing those remarks to the CEO.

In respect of what personal authority I might have, I’m part of a group led by the Minister of Finance, and that group reports regularly to the Cabinet committee known as Economic Development, and any decisions that have been announced by myself or other colleagues are within the mandate provided by the Cabinet to roll out the $2.6 billion of announcements, some being kept back to deal with the inevitable cost overruns and other administrative challenges that we’ve learnt, to our cost, in the Provincial Growth Fund, often do come to pass in the administration of such a large sum of money.

I thank the Minister for Infrastructure for something of an answer to that question. I think I heard him say that, yes, while it is a separate fund, it’s all part of the same Cabinet and the COVID response and recovery fund is all part of the broader economic development for our regions.

I didn’t hear an answer to the question of why the Government sees fit to be giving—ACC, which has an investment portfolio approaching and exceeding $35 billion, needs $12.5 million for a project in Otago, and I’m still none the wiser about what the issue is there. But what that does speak to, I think, is a propensity for the Government to hoover up as many projects as possible, including shovel-ready projects that would have happened anyway. And one of the patterns that we’re seeing in the dashboards right across the country is that these projects for roading, for fibre connections, for local body infrastructure would have come to pass either with central or local government funding. And what we see is that the Minister gets an opportunity to cut a ribbon or otherwise make an announcement.

So another question—there was an article recently about the Olympic pool for the Hawke’s Bay aquatic centre, and it was announced actually by the Minister’s colleagues the Hon Grant Robertson and the Hon Stuart Nash. I am fascinated at why an Olympic pool is 51.5 metres long, and people with memories long enough will remember that fantastic documentary comedy written and starring John Clarke—the late, great John Clarke—which was called The Games. It had a fantastic sketch around the 100 metres track at the Sydney Olympic stadium being about 100 metres. So I would love for the Minister to be able to elucidate the House as to why an Olympic pool, which in any other part of the world is 50 metres long, is in Napier going to be 51.5 metres long.

While we’re on the subject of pools, I note also that the Gisborne Herald on 14 July reports $40 million for a pool upgrade in Gisborne.

💬 Hon David Parker: It’s a stretch target.

A stretch target—very good. Well, I’ll tell you what, there won’t be any world records broken at the Napier Olympic pool at 51.5 metres. So it’s all down to hundredths of seconds and I don’t think that’s going to help in the least. But the Gisborne pool upgrade is $40 million. Now, I think that’s a fantastic asset for the good people of Gisborne to have, but I think about the community pools that I have been aware of around the country in places like Mosgiel, which is spending a much more modest sum to get a thoroughly decent asset for that community. And I’m just at a loss to know how on earth we can be spending $40 million on the Gisborne pool, which raises the broader question about value for money.

Now, this side of the House understands the need to stimulate regional economies with smart job-creating assets, but I am far less convinced that there is enough scrutiny by the Provincial Development Unit and the Government more generally and whether they are more interested in cutting ribbons than they are about ensuring that they’re getting value for the taxpayers’ investment in these things because, frankly, you could probably hold the Olympics between Poverty Bay and Hawke’s Bay with the two Olympic-sized pools and aquatic centres that they’re going to be building for the great—[Interruption] Well, that’s right. There’ll be no world records broken, Mr Smith. That’s quite right. But I do want the Minister to assure the committee, as he failed to do, actually, in the Estimates review appearance before the committee that, actually, the sufficient scrutiny is under way to ensure that the taxpayer is indeed getting value for money.

I actually embrace this approach that Ministers should be required to address and, hopefully, answer the questions. Now, I have just been assisted by, arguably since Geoffrey Palmer, the brightest lawyer—oh no, I see David Parker, I apologise. I apologise. Dr Webb is the honourable member who has pointed out to me that, in actual fact, the reason a pool is slightly longer than 50 metres is to account for the pads at each end so that the highly athletic, well-trained knuckles, fingers, and other parts of the anatomy are not damaged as they seek to achieve Mark Spitz - like gold status for New Zealand swimmers. So I have to acknowledge that the chairman of the Environment Committee has a tremendous future ahead of him, given that he’s capable of teaching me.

Secondly, look, I know that we have to tolerate these tawdry remarks that the jobs of New Zealanders are being channelled through the political aspirations of the parties that comprise the Government. That is wrong. That devalues our fellow Kiwis. What the Ministers of the Cabinet are doing in taking an appropriate period of time to tick off the various projects is not only to assure this House but to assure the public that this $2.6 billion worth of pūtea goes through a process, especially where we’re dealing with applicants who are not local government. We have a level of expectation that local government in receipt of Crown pūtea will actually not squander it.

Actually, on the point where the honourable member asks about the issues pertaining to three waters and other infrastructure projects, he is absolutely correct. By and large, those projects have been steered to the pot of funding under the administration or the stewardship of the finance Minister and the Minister of Local Government, the Hon Nanaia Mahuta.

But let me come back to that modest area that I have some influence over. The aquatic centre, the Gisborne applications—they reflect people legitimately proceeding into the corridor, otherwise known as the Crown infrastructure process, aided by the Provincial Growth Fund process. It’s not unreasonable that people should have expectations that if they put forward a project that’s going to lead to jobs, it’s going to endow—endow—a region with one of the three following infrastructure outcomes: grey infrastructure, which on this side of the House we tend to regard as bridges and roads, perhaps wharves; green infrastructure, which deals with flood resilience, and there’s well over $200 million, I’d say to the honourable member, that’s available there; and wellbeing infrastructure. Wellbeing infrastructure is akin to community infrastructure, and it’s not the corporate, glittery end of town; it’s those relatively modest projects that have been brought to our attention and promoted by community groups acting in association with local government.

I had the rare pleasure of making an announcement in that regard conveniently in the township of Kaitāia yesterday, and if I can give the honourable member an indication—a sum of $7 million dedicated to Te Hiku enhancement. That project originated with a community group acting in collaboration with the Far North District Council, led by a former parliamentarian the Hon John Carter, a fine Northlander, who from time to time does raise the ire of the ratepayers, but that’s what happens in the North—your good works don’t go unpunished.

Thank you very much, Madam Chair—thank you very much. I’d like to follow on the line of questioning around the Provincial Growth Fund. As we are all aware, in every one of the electorates there are literally billions of dollars being allocated to projects. I recall when the Minister was speaking to the select committee in the Estimates hearings, he mentioned to us that he was surprised at the number of projects that were not able to proceed because they were not consented. It did come as a surprise to me, because projects that sit in a planning stage do not usually get to the consenting stage unless funding is assured, because it’s quite an expensive and time-consuming process to get those consents.

So when the Minister has allocated those funds to those projects pre-COVID, then those projects were working their way through the process; come COVID, the Minister felt he had to reprioritise some of that money. So that money was clawed back. Now, we have heard since COVID, especially from the Prime Minister, that it’s all about jobs, jobs, jobs, but all we’ve seen is it’s all about announcements, announcements, announcements. What I would like to know from the Minister in the chair is: with the very short time frame now ahead of us and all of the funding that’s been allocated to projects across this country that are still not consented and will be unlikely to be consented before the election, are we likely to see, yet again, a reprioritisation of that money?

Also a question to the Minister: how is the Minister going to ensure that contracts will be in place to lock in that funding to those individual projects prior to the election? The concern that I have is that all we are getting is re-announcing the churn of the same money around and around different projects in this country, and it seems likely to me that unless a contract is signed that commits that money legally to all of those projects—those councils and individuals and businesses—then we are unlikely to see it actually realised into a project. Thank you, Minister.

Actually, the honourable member, the list member for Tai Poutini, raises a very good point, which is why no one was more enthusiastic than my good self for the sterling work undertaken and the product delivered by the Hon David Parker in terms of the fast-track process for the Resource Management Act (RMA).

Now, look, I don’t want to delve into why former regimes never delivered; I just want to focus on the fact that there’s now an opportunity for certain projects that may be in receipt of pūtea from the Provincial Growth Fund to be referred to the Minister. Now, let me name one—let me name one. We have an entity called the Tai Tokerau Water Trust. Now, that was formed—and I will come back to Te Tai Poutini in a very succinct fashion—and that trust promoted the first water storage dam near Kaikohe. It was included in Schedule 2 of the legislation and voted for by the other side of the House in a shared fit of illumination. Now, that shows that where there may be projects that are ensnared in unnecessarily long RMA processes, the applicants have the ability to make an application to the Environmental Protection Authority, which will then refer the matter to the Minister for the Environment. Now, I don’t want to comment on who may or may not still be standing after the election; that, properly, in my view, is not the business of this type of debate.

Secondly, in terms of does it mean if there’s a change of Government or different personalities holding a warrant to be Crown Ministers, no single Parliament can bind the next Parliament. That’s the nature of our democracy; that’s the nature of our Westminster-based constitution. But I’m absolutely confident that in the event that a similar group of politicians hold the benches of Treasury, they will want to continue to roll out the kaupapa of endowing our regions with overdue infrastructure, injecting Crown capital into enterprises that lead to jobs that have a transformational impact in certain sectors, and also enhance productivity.

You only have to look at the announcement that I have just celebrated, along with the Hon Damien O’Connor, for the pūtea that’s been given to the Mānuka Trust. Mānuka is an incredibly valuable indigenous species, belonging uniquely to New Zealand. There is a fear that overseas interests are trying to capitalise and gulp down the profits associated with the products that come from that mānuka that rightfully belong here. The Provincial Growth Fund has made an allocation to help transform that industry—which is in the Tai Poutini as well, not only up in the Tai Rāwhiti—so that the science can deliver better opportunities as to what are the goods and services that can be gained from further investing in mānuka. So any suggestion that we’re not prepared to address the outstanding issues of RMA consents I do believe is incorrect.

Secondly, whilst I can’t speculate as to what will happen in October, November, December, these decisions have been made, and we are harrying the officials to ensure that the contractual obligations are entered into as soon as possible. But as you know, they act in a slightly independent fashion, and they have to work at a pace where they feel they can credibly give that advice that the green button is all 100 percent.

Can I just ask the Minister in the chair, the Hon Shane Jones, then, to confirm that all of the projects that have been approved through the Provincial Growth Fund (PGF) will get committed funding assured or a contract signed that will ensure that the project that has been approved by the PGF will be going ahead before the 2020 election.

So, obviously, there are two sides to any contract. We’ve learnt as a consequence of the COVID reset that some of the applicants were working on what we call in Kaitāia “the slow-coach type”; whereas I am akin to the figure out of American folklore:

Along came Jones

Fast-talking

Slow-walking

So I don’t want anyone to feel that their contracts cannot be entered into. The sluggishness is no longer with the Crown; it’s with the other parties.

This politician, I can assure you, working with the other three Ministers—we are insistent that velocity is the flavour of the day, but, most importantly, we have to assure that we’re not entering into a space where Crown funding may be at danger. The other side of the Chamber should expect nothing less.

Can I just follow on from another topic that came up during the Estimates hearing, and that was the Minister’s commitment to providing the information about the full-time equivalents that have been created so far. As we all know, the Provincial Growth Fund is designed to increase the productivity potential in the regions, and so it would be very reassuring, I’m sure, for us all to know that the money that has been invested thus far has created some really impressive figures, in terms of full-time equivalents, for the investment to date. Does the Minister have that information at hand? Will he share it with the House, please?

I rather suspect my time is drawing to an end, but what a great point for me to contribute to. Officials are continuing to do their analysis, and they are uncovering a treasure trove of positive statistics as to how many jobs have been created as a consequence of this highly celebrated OECD-leading initiative. Once the officials have briefed the finance Minister, myself, the Minister of Economic Development, and the Hon David Parker, then a point in time will be identified where this information can be shared, but it would be unwise for us to share this information in the absence of robust advice from the officials. But, rest assured, over the next eight weeks, it’ll be well and truly aired all over Aotearoa.

Thank you, Madam Chair, and if I can just take the opportunity, I guess, to acknowledge the Minister in the chair there, the Hon Shane Jones, and the great work he’s done. But in regard to the discussion that we’ve just seen from across the committee, if the Provincial Growth Fund is to allocate funding—you know, quite a lot of funding—to an organisation, or, say, a council, that hasn’t always had a good track record of financial management, perhaps the Minister might like to answer: is the process of oversight of the spending of all of that money robust? Indeed, what are his expectations of what that organisation might have to meet if it hasn’t had a good track record in the past?

Far be it from me to identify any delinquent councils, but they are numerous in some parts of Aotearoa. But if I could say this: the system operates on the basis of Senior Regional Officials (SROs). SROs are trustworthy senior civil servants, and they engage with the recipients. Where the recipient may be a council that has struggled with the delivery of infrastructure or the delivery of other wellbeing outcomes, the SROs are totally empowered to manage the pace at which the pūtea is allocated, to ensure that the outcomes the Government believes that it ought to be achieving in a collaborative fashion are actually delivered upon. They are called Senior Regional Officials. They report to Mr Robert Pigou, who is the director of the Provincial Growth Fund Unit. He is a member, to the best of my knowledge, of the top team comprising the executive leadership group, led by the CEO of the Ministry of Business, Innovation and Employment, and that lady’s name is Carolyn Tremain.

Madam Chair, I think we might have just about one minute left.

CHAIRPERSON (Hon Anne Tolley): One minute.

So the Minister has said that most of these contracts, certainly since COVID, may not even be entered into but won’t be commenced before the election. He’s also said that one Parliament can’t bind another. So how is it that the public can have any confidence that the announcements they’ve been hearing and will continue to hear aren’t simply announcements to get those governing members re-elected?

The answer is very simple: I can see the future.

OK, thank you—thank you, Minister. I think we’re moving to broadcasting, communications, digital media, commerce, and consumer affairs. I welcome the Minister to the chair.

Thank you, Madam Chair. Well, it’s great to see you again, Minister Faafoi—a simple question for you. We’ll start off with market studies, I think, because I noticed that that’s gone up by a bit in the Estimates. They’re getting a bit of extra cash.

I want to know, Minister, what is the Minister’s commitment to value for money for public expenditure, and the example I would give is the most recent—in fact, the only—market study completed to date. When we got a progress update from the Commerce Commission, they estimated that about $1.2 million at that stage had been expended by them in the work on the study. They couldn’t estimate, but it might be fair to say that something similar will have been expended by those private sector organisations that were caught up in the study, and at the end of it, not a single new idea emerged. What came forward in their report was the same things that the Ministry of Business, Innovation and Employment had uncovered at least two or three years earlier in their report.

So, Minister, what commitment do you have to value for money for public expenditure? How will you ensure, should you return in the position you are in post-election, that future market studies will not simply expend taxpayer money to tell us things that we already know the answer to?

I thank the member for his question and, to answer it directly, we place a lot of value on value for public expenditure. I believe the appropriation for the Commerce Commission to undertake a market study was $1.5 million per annum, so if I am to believe the number that the member has used in the House, they will have come in under budget. But I will have to double-check that number if, in fact, that was—

💬 Brett Hudson: That was a progress number.

—the number that the Commerce Commission did expend. Off the top of my head, Mr Hudson, I believe it may have been a little bit more than that.

But if I look at the function of a market study, which is a new function for the Commerce Commission, I disagree with the member who posed the question about the effectiveness of a response to that market study. He would know that a piece of legislation is traversing the legislative process at the moment in order to ensure that consumers and businesses here in New Zealand have transparency and that we see more competition in the retail fuel market.

If I think about when we set out on a mission to have the legislation for a market study, and, about a year and a half after that point, when we initiated the first market study, I’m quite proud to say that on this side of the House, in what has seemed to be a very quick three years, we’ve (a) been able to initiate and (b) been able to pass that legislation to have a market study and to have a piece of legislation to have an enduring solution to a problem that most motorists around the country have found, or have always wondered why they were paying so much for their petrol. As the member will know, the Commerce Commission did find that people were paying above what they thought was a fair price for their petrol, and it should have been at a competitive level.

So when I think about the value for money that we’ve got from the Commerce Commission market study, the Government’s response to that, and what that will mean to the savings that will come about because of the increased transparency in the structure of the fuel market and also in terms of the increased competition that we will see around the country, I see more players in the fuel market. I think a lot of New Zealanders, once they see changes of the prices at the petrol bowser, will think it’s extremely effective expenditure for the savings that they will make for their families from running their cars on a weekly basis.

I’m very proud that we were able to get that piece of legislation in to instigate market studies, and I would like to commend the Commerce Commission for its thorough work. We’re one for one so far, and watch this space for what other markets we think need looking at in the best interests of consumers.

Well, thank you, Minister, for that very long and comprehensive response, but it missed the key point. So what specifically, Minister, did the Commerce Commission find after expending somewhere between $1.2 million and $1.5 million of taxpayer money? What specifically did they find in terms of recommended actions that was not already found in the Ministry of Business, Innovation and Employment report which was available to the Minister before he instructed them to expend that amount of taxpayer money?

I think we’re going to continue to have a disagreement about what was known before retail fuel market study and post. The difference between the information that the member is relying on is that it was done by the Ministry of Business, Innovation and Employment without their full ability to get the information from those players in the retail fuel market to the granularity that they needed to understand exactly what was going on. The member’s leader, when she was the Minister for Energy and Resources, was actually quite frustrated that she could not get to the bottom of, and the officials could not get to the bottom of, the understanding of why fuel prices were at the level that they were, and failed to do anything about it in the nine years in which they were in Government.

That’s why I stand here, again, quite proud that not only did we initiate the legislation and pass the legislation which enabled the Commerce Commission to undertake those market studies—and, to be frank, the Opposition wasn’t happy about that—but we are able to get the granularity and therefore have the legislative response that the Hon Dr Megan Woods is taking through the House to ensure that there is more transparency in the market, to ensure that there is going to be increased competition in the market. If the Opposition has a problem with that, which will mean that increased competition will see more competitiveness in what people pay at the pump, I’d like to see them go and campaign on that.

Thank you, Madam Chair. Continuing that line of questioning from my honourable colleague Brett Hudson, the cost that’s been incurred in undertaking this one particular study, I’d be quite interested to hear from the Minister in the chair, the Hon Kris Faafoi, (a) what was budgeted for the study, and, secondly, in terms of the breakdown of the sum that was incurred, to what extent that relied on internal Commerce Commission resources and to what extent were external contractors involved. Obviously, the intent of that question is to understand to what extent the Commerce Commission has the capability to undertake these types of studies. So that’s the first question; I’ll come back with some more. But I’d just be interested in the Minister’s input.

Thank you, Madam Chair. When we came into Government, the previous Government had appropriated, I believe, $1.5 million for the Commerce Commission to undertake a market study. So, in broad terms, they was the constraints in which the Commerce Commission was asked to undertake a market study.

I believe, if my memory serves me correctly, in the very early stages of Government, when we asked a question of “OK, the appropriation is $1.5 million, how many market studies could you potentially do with that?”, I think the answer was that you could do one substantial market study or a couple of medium-sized market studies. Again, it is an off the top of my head recollection; the Commerce Commission may have expended a little more than $1.5 million that was appropriated for market studies within their budget, but I would hasten to remind members that this was the first time that the Commerce Commission undertook this function. It wasn’t as if they were starting from a position where they had the resources, the experience, and the ability to do this off the bat. So there was a fair degree of ramping up the processes, ramping up the resources, and ramping up the person power within the Commerce Commission to undertake this work. So if—

💬 Andrew Bayly: And the extent of external consultants?

I can get the answer to that, but I understand that there was quite a lot of external help in order to be able to do this market study in the time frame which is provided under legislation, which is 12 months. If the member gives me a chance, then I can get that to him. But, as I say, the appropriation at the beginning of the term was $1.5 million.

So just continuing along that vein—so just to help the Minister, I think the Minister probably may have forgotten, but he’s actually increased the funding for the Commerce Commission, but to what extent has the increase in the funding for undertaking these market studies been increased for the forthcoming financial year?

Thank you. No reminder needed from the member; I was referring to the amount of money that was appropriated initially, which was $1.5 million. My understanding is that, given the experience of the first market study, the increase to the appropriation for further market studies per annum is a little over $2.4 million.

OK. So, on that basis, that would mean that we’re going to do one major market study and one medium-sized market study to get to our $2.4 million budget. So under the new rules for the Commerce Commission, they have the power to initiate these types of reviews. Clearly, they’ll have the money available—$ million. To what extent are you satisfied that we won’t be undertaking unnecessary market studies, because they’re incredibly disruptive to the businesses that are investigated, and how do we not stop the process of the Commerce Commission just deciding to spend the money and just, basically, working through a low-order priority until they’ve used up the money in the budget?

First of all, I guess, in terms of the member’s first question, it depends on which markets we potentially undertake a market study in, whether it be a relatively simple exercise or something of a size of the retail fuel markets, which has already been undertaken.

I have every confidence in the leadership of the Commerce Commission that they wouldn’t undertake the kind of behaviour that the member is talking about—a very astute organisation, they know the constraints of the appropriation put to them, and there is a public interest test both within the Government-initiated market study and also the Commerce Commission market study that would have to pass not just the public sniff test but also the political sniff test in terms of the legislation.

So, again, if the member doesn’t have confidence in the Commerce Commission in doing that, I would like to send a message to him that I do.

Does the Minister actually have a hit list of potential targets that he may wish to influence the Commerce Commission to pursue?

I wouldn’t use that language. I think it’s a pretty serious and big call to initiate a market study on a sector. It would only be done if we thought that consumers were feeling the sharp effects of a lack of competition. So I wouldn’t use the language that the member has used. Of course, a number of my colleagues have outlined a number of sectors that they believe that some sunlight might be useful for and to ensure that consumers are benefiting from a competitive market, and if and when we’re ready to make an announcement, we’ll let the public know.

So, Minister, are you saying that you haven’t decided yet? Here we are a couple of months into this financial year. The appropriation runs through until the end of June next year. It took the Commerce Commission some time to go through the market study. Are you saying that no decision has yet been made as to what study or studies will be undertaken for the money that’s been appropriated for the coming year or the current year?

No, I’m not saying that; that’s the member’s words. What I’m saying is a number of options have been put to me about sectors that could potentially use some sunlight, and as I say, when we’re ready, we’ll make an announcement.

Vote Building and Construction, Vote Business, Science and Innovation, and Vote Transport agreed to.

Education and Workforce Sector (relating to immigration, workplace relations and safety, and employment)