New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill

The House in committee on the New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill. We turn first to Part 1, this is the debate on clauses 3 to 10, “Changes to the New Zealand Superannuation and Retirement Income Act 2001”. The question is that Part 1 stands part.

I seek leave for all provisions to be taken as one question.

Leave is sought for that purpose. Is there any objection? There is none. The question is that Parts 1 and 2 and clauses 1 and 2 stand part.

Thank you, Madam Chair. It is good to be debating this bill in the committee of the whole House. As I think all members will be aware, this is a bill about increasing the age of entitlement to New Zealand super and veterans’ payment from the current provision, 10 years, to 20 years. It is proposed under the original bill that this would take place over a staged process—effectively, for every two years, there would be a requirement for one extra year to be worked so that over a period of time, over the next 10 years, it would progressively move from a situation of if you were someone who wants to be entitled to New Zealand super, you would not only have to work for 10 years but, progressively over time, to have to work for 20 years before you are entitled to it.

Now, the big question around this is: when should such a provision start? I just want to acknowledge Minister Carmel Sepuloni for working with me to look at the commencement date. There have been discussions with the Retirement Commissioner, who expressed some discomfort that under the bill as introduced into the House, it would have allowed for that progressive increase to 20 years to commence straight away. By agreement with the Minister, we have decided and proposed through a Supplementary Order Paper that the commencement date is deferred not from 1 July 2021 but actually to 1 July 2023, so that people have more time to consider matters of their superannuation, and, if need be, to start planning for working an extra period of time, so that once those provisions start to cut in, then there is more time available to do the planning.

So I am very grateful for the Minister and, hopefully, we will be able to work our way through some more details, but I’m looking forward to the debate.

Thank you, Madam Chair. I’d like to thank the member for his constructive work during the process and during the select committee process. As you can see, the Supplementary Order Paper (SOP) that’s been tabled by the Minister, I understand, has been in consultation with the member as a result of the Retirement Commissioner. Now, I just want to go back to what was agreed during the select committee period so I can walk through it, and then I’d like to ask the member a couple of questions in relation to those changes that have been recommended in the SOP, if that’s OK.

So if I look back during the select committee period, we had submissions from a number of submitters. In particular, I can recall the Browns Bay Chinese Society submission, and they had set out a table which is very similar to the one that is in the revision-tracked (RT) version of the bill that was reported back by the select committee. In that particular table—although it was slightly different in the RT version—I understand that we had come to an agreement during the select committee period that we would go by periods of dates so that there wasn’t so much of a cliff so that as soon as somebody had got to the point where they were able to receive superannuation, instead of just dropping off the cliff straight away from a 20-year to a 10-year applicant period, we would phase it in over particular periods. So if I looked at the RT version of the bill, I think it was clause 4, replacement section 8(4), it was around, I think, between 1 July 1957 and 30 June 1959 it was 11 years; if you look at 1959 and 1961, it was 12; 1961 and 1963, 13; and it carries right through to on or after 1 July 1975, which was 20 years.

That was a really constructive discussion we had during the select committee. I understand that a lot of the submitters—not just the Chinese association but there was a couple of others. I know that the reason that we did this again was to prevent that cliff face. There was also a really good example that was put in there by officials, which is quite unusual for a bill of this type, and that was around if “A person … is born overseas on … 1965, [they move] to New Zealand and becomes both resident and present in New Zealand on 1 July 2020 at age 55. The earliest date … which B can meet their can meet their total time requirement is 14 years later, on 1 July 2034, at age 69. B meets this requirement by being both resident and present in New Zealand for a total of 12 years, in the Cook Islands”. Now, if I look specifically to the SOP that’s been tabled by the Minister, my question is to the member: how did—I see they’ve shifted. They have moved based on SOP 58. Can you please give some background as to why the Retirement Commissioner recommended that move from 1957 to 1959 that’s carried out now in the new clause 4 in that SOP, please?

Thank you—very good question. So the primary driver in the discussion with the Retirement Commissioner that I had was she was particularly concerned that for people who are very close to retiring, even though the requirement might have been that they had to work for an extra year, actually for some that was quite unfair. And so she recommended that we should delay the commencement date to allow those very close to retirement age to be able to have time to work with their employers if they needed to work an extra year, rather than retiring to 65 they could work through to 66. So it meant not only could the individual plan what they wanted to do with their life but also, hopefully, they had the opportunity to continue working at the firm where they were employed. And so it’s just a pragmatic approach to literally trying to deal with the short-term issue of when do you start commencing this progressive stage-in. As you pointed out, in clause 4, effectively we’ve got the same two-year requirement bands, but what we’ve done is just pushed out the first commencement date to, effectively, 1 July 2023.

I thank the member for clarifying that shift between what was recommended by the select committee and then the Retirement Commissioner. My question around that is—I understand perhaps the Retirement Commissioner actually asked for a longer period? I’m not quite sure; I’ve just picked up the Supplementary Order Paper (SOP) off the Table today, but I understand that the delay, based on what is currently in the SOP, hasn’t gone as far as what she wanted publicly. However, I believe this phased implementation does strike a balance, as you’ve just discussed. What exactly was it that the Retirement Commissioner was recommending and why have we not gone with that extended period, rather than the period we’ve currently gone with?

Thank you. Well, the discussion was around whether it should be between one and five years. Obviously, at that point we have had a bill that was introduced to the House that was talking about, effectively, an immediate introduction which had been recommended by officials. We had a discussion—and I’m saying she and I had a discussion. She had a view that it could be certainly longer than two years. Her approach was that we should make it as long as practicable, and she certainly talked about the five-year period. But, obviously, what you’re driving at is a question of discretion and judgment, and it’s something I’ve discussed with Minister Sepuloni as to what is an appropriate date. I think we both came to agree that we thought two years for a delayed commencement date. We’ve still got the same delay over the next 12 years before you get to the full 20-year entitlement, but it was all around just how long do you delay the start point.

Of course, from the Government’s perspective there’s quite a financial cost to that, and one of the reasons why we had a bit of a delay on this bill was that we had to look at the financial considerations—that’s something the Cabinet had to look at. And so we’ve struck a balance which we think is appropriate. Obviously, some people will want it longer. If you look at survey results, there’s an overwhelming desire that this bill be introduced and be made to be in effect very quickly. So you’ve got to get a judgment between those who think we should not be allowing people to come here and immediately get superannuation after 10 years and those who think we should have more delays, and I think we’ve sort of struck a balance on that.

Well, thank you, Madam Chair. This is a fascinating discussion and probably in my time here rather unique—where two things have happened that I think are quite significant. When a member’s bill is supported by both sides of the House, there generally is some sort of background horse trading with the Minister at the select committee period, and indeed that occurred. It was easy to do because there was a general acceptance that the bill as introduced while the purpose was understood the method was poor. The intent was fine, but the bill was not well written and we in select committee had to basically rewrite it. Now, the Ministry of Social Development and the Minister for Social Development and Employment were involved in that, and I thought we had reached what was an appropriate phasing of this and there was no indication from the Minister’s office or the ministry that there was any great concern.

I haven’t seen the advice the Retirement Commissioner has provided and that, frankly, is one of the problems that we have with trying to understand the value of this Supplementary Order Paper. I’m not personally convinced that it’s necessary, but I completely understand the sponsor of the bill, who wants to pass it, actually having Hobson’s choice, really, because we need the support of Labour members in order to get this bill through—so what the Minister wants, the Minister gets.

The second part of the unusual part of this is that at the committee of the whole House it’s very unusual for a Minister to put in such a substantive amendment to a member’s bill. The behind the scenes work is usually done through the select committee and the nod and the wink is given. But this is quite overt. It’s in the Minister’s name, effectively, and giving effect to her wishes. Mr Bayly has just talked about the costs of this delay, but as far as I can tell, on the table, there hasn’t been an assessment of what the cost of this change is. So my question to the member is: has he seen those costs in any great detail? Is he satisfied that that’s appropriate and that the Minister of Finance is satisfied with this? Because, actually, it’s not really a net cost, because the bill overall is going to save money over time. We’re just delaying not the start date necessarily but the effective date. So has the Minister or the Government undertaken an analysis of the costs or the savings that we won’t make now as a consequence of the two-year delay to the start of this?

Thank you. Yeah, there’s two points to that. The first thing is I just want to be clear that it wasn’t necessarily the Minister driving this delay. It was something I was very happy to consider, having spoken to the Retirement Commissioner. And of course, between the time that this bill was introduced and actually consulted on and the stage where we’ve got to today, we’ve got a new Retirement Commissioner. The previous Retirement Commissioner was very, very keen on making a strong recommendation that this should be brought in as soon as possible and very strong that it should be 20 years that we move to. The latest or current commissioner has a slightly different view, and that’s what reflects in the consideration in delaying this. Originally, the Supplementary Order Paper (SOP) was in my name, but as a result of the need to go to Cabinet, it was agreed that the Minister would file the SOP, and, of course, she was in consultation with me. So I’m very grateful for that.

In terms of your second point about the costs, you’re right. What we’re doing with the delay if it gets passed is, effectively, foregoing a certain amount of saving of expenses, so it reduces the cost of superannuation for the Government. If it had been brought in, effectively, today, that would have meant that there would have been a lower cost for superannuation over the next couple of years. That’s the cost of delaying it—that saving in terms of superannuation. I haven’t seen the specific figures in response to your direct question, but it was something that the Minister said that she had to take to Cabinet and has taken to Cabinet, and Cabinet has approved it and, as a result, we’ve proposed this SOP.

Tēnā koe, Madam Chair, thank you. Look, I welcome the opportunity to have this debate in good faith on the merits of New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill.

I wanted to ask the member around the point of sustainability, because I note in the introductory remarks that the bill is intended to contribute to the sustainability of super. I wanted to ask, I guess, around the evidence the member has, or is aware of, around to what degree this bill will contribute to the sustainability of New Zealand super in the longer term.

Because what we do know from the initial briefings by the Ministry of Social Development (MSD) is that there is an expectation that, as we restrict people going on to New Zealand super, some migrants who need income support will end up going to a main benefit. While that number may be slightly lower, there’s higher operational costs to going from New Zealand super to a main benefit, due to just the complexity of the welfare system. I note that the initial briefing by MSD also notes that, in the longer term, the projected savings of this bill to super—and this was before the Supplementary Order Paper was introduced—are likely to be even lower now. It’s only 0.3 percent of the projected cost of New Zealand super.

So we do know that this bill will increase hardship somewhat to our migrant communities but that the sustainability and the cost savings are really minor. So I would love to hear—and this is my question—what further evidence there is, or just the member’s view, on how much this bill will actually contribute to the savings of New Zealand super. Thank you.

Thank you. Very good question. I note that the Greens’ minority view in the report of the committee.

The simple fact is, if you look at what’s happening with superannuation around the world, most countries are moving to increasing the age of entitlement up to 66 through to 68. That has been the trend, and part of that has been brought on by recent economic events. But that has been quite a clear trend if you look across the OECD. So, obviously, at the moment we’re at 65, and that’s where we sit. In terms of the cost of super at the moment, it’s effectively about 4.8 percent. It’s the single highest amount of Government spending that the Government incurs every year in terms of social spending. It is expected to double, under the current projections, to just under 8 percent by, I think, 2040.

What people don’t realise is that even with our New Zealand super fund, which presently is over $50 billion—probably closer to $60 billion—that doesn’t get used to help minimise the cost of New Zealand super, it doesn’t kick in, until about 2033 or 2034. Even when we start to apply that fund—which possibly might be worth $100 billion at that stage—even starting to use it to top up the superannuation payment will only account for about 6 or 7 percent of the total cost of New Zealand super at that point in time. So New Zealand super is just an escalating wave that gets bigger and bigger, like a tidal wave, in terms of cost for the Government. As I’ve said before, in a generic sense, it doubles in terms of the cost of GDP of New Zealand from 4.8 to just over 8 percent.

What’s worse, if you look at it, and take into account health costs, by the time you take rising health costs and superannuation costs, you could easily project by about 2040—and certainly by 2060—that nearly half of our expenditure will be in just those two components. That’s why it’s absolutely necessary to start making these changes, and that’s why other Governments around the world have already started down this pathway.

So one of the ways to deal with that is, certainly, raising the age of entitlement. The second one is—and this is a smaller component. It’s only likely to affect about 6,000 people—that’s the rough guess of what we think—so it’s a small proportion, but it’s part of what virtually every other country in the world has moved to: a 20-year rule. We’re one of the few countries, alongside Australia, who have a 10-year rule at the moment, and by moving to 20 years over a progressive period of time, we’re actually bringing ourselves in line with most other countries. So that is the raison d’être about it, because we’ve got a tsunami of superannuation costs and this is one of reasons of how we might be able to deal with it.

Thank you to the member for answering the question and, again, for having this debate, a really good debate. Look, I take the point of us being able to potentially have a debate just about the sustainability of New Zealand super as a whole, but this bill is very much specifically around the impact that our migrant population has on the cost of New Zealand superannuation, and it very specifically targets a community.

So I guess, wanting to keep it within the scope of the 6,000 people that the member alludes to that will be affected: how does the member justify the fairness of moving people to a main benefit and the potentially higher operational costs that somebody being on a main benefit may have in terms of taxpayer dollars? Also, when the member talks about the compounding healthcare costs, considering that those that may need to move on to a main benefit may end up being worse off and knowing that incomes are one of the most important determinants of health, does the member foresee some of those people affected potentially having deteriorating health outcomes and therefore having a higher need in the welfare system and the healthcare system, and potentially contradicting the purpose of this bill, which is to create sustainability within our income support networks?

Thank you. Well, I think there’s a supposition in your questioning, because if you look at what’s being proposed, there is a staged delay before people are entitled to superannuation. What that means is that people have the opportunity and can and must work for a longer period of time. So what it’s not saying is: you’re not entitled to superannuation. The issue is you must have to work in New Zealand and be working here for a longer period of time. That’s what most other countries have moved to, anyway. So what we tried to do is come up with a practical way of getting to that point of a 20-year entitlement, which is by far the norm overseas. That’s my first point in response to your question.

The second one is I’m not actually persuaded by the issue of complexity. You seem to make out that it’s going to be very difficult and it’s going to be costly, or imply that it’s going to be costly, to administer the scheme. I’m not sure that that’s actually correct. It’s a pretty simple rule: for bands of two years, you may have to work at one extra year of entitlement in New Zealand, or if you’re from a Realm country—we’ve also extended the provisions to Realm countries; Tokelau—you know the three countries that are Realm countries. So that’s part of the provision.

The third area that we’ve been very careful to protect is actually refugees. So what it means is if you’re a refugee and you arrive here, and you’re 55 and older, you’re not caught by these provisions. You only have to work the 10 years, as long as you stay in New Zealand and work. That’s a specific provision to protect refugees. So if you come here at a younger age, then, obviously, you would need to stay in New Zealand and work for that period of time to be entitled to New Zealand super.

So we’ve tried to come up with a balance of looking at more vulnerable groups, particularly refugees. We wanted to make sure we protected our Realm country interests—very important in terms of superannuation. But this is a pragmatic way of trying to increase the entitlement over a period of time so that people have sufficient time to plan for it and to be able to meet their requirements in a way that they can and prepare for it.

It’s a bad day in New Zealand for the Green Party, that purports to support various groups and the youth of New Zealand, by lacking the support for this bill. Let’s put on the record that they’ve let down that group today.

I think Mr Bayly and the Minister have reached a very sensible settlement in the two-year time frame. I think if you look at New Zealand super, it’s one of the few schemes internationally that gives everyone who fits the residency requirement a generous payment, and it’s the last line of defence in terms of keeping people from very difficult situations. So if you’re legally resident now for 20 years after the age of 20, it’s not means tested or income tested, and the two-year time frame and extension has the support of the ACT Party. We congratulate Labour, National, and ACT for bringing this to the committee today.

I call Helen White. Just before the member starts, could members, when they are wanting a call, make a call by addressing the Chair “Madam Chair”, which indicates—I’m telling the whole committee this—that you are seeking the call. Thank you.

Thank you, Madam Chair. This was one of the first pieces of legislation that I worked on in the Finance and Expenditure Committee, and I was very impressed with the cooperative way that things were carried out. I was interested in really considering the universal nature of our superannuation and the fact that, in fact, this was very different from the safety net that many of our migrants will have if they need it. This is a scheme that has been very much thought about in terms of the contributions that people make to it and what they get out of it. Obviously, it is taxpayers’ money. It is actually the superannuitants’ own money that’s going into the scheme, in principle, so it’s very important that we respect that and are careful with the way we use it.

I was interested to see the difference in the bill. When the bill first started, my understanding is—and I’d like your comment on this, Mr Bayly—that it didn’t really accommodate people like refugees, who are not people who have had an opportunity to contribute to such a scheme and were welcomed into our country on quite a different basis. So I was interested to see that; I was interested to see the accommodation of the Realm countries in that process. So I’d really like to hear your comments on that development of the bill into something that was, perhaps, more able to get consensus across at least three parties in that process in terms of what the purpose of the bill was and what it is now.

Thank you, Madam Chair, and I thank the member for her question. I’m just looking at someone in the gallery who was involved in the original drafting of the bill. I just want to acknowledge the original sponsor of the bill, Mr Mark Patterson, who introduced the bill. The bill as it was originally introduced, if I’m reasonably blunt about it, was pretty simplistic in the sense that it made clear that we should move to a 20-year horizon, but, effectively, it meant that would happen overnight—the day following the passing of the bill, effectively, or the signing of the Act. Obviously, when I was asked to take over the bill—because, of course, Mr Patterson left in the last Parliament. He asked me particularly to take over the bill. I accepted that on the basis that, obviously, the bill needed a lot more work, and I think Mr Patterson, to his credit, would acknowledge that. But he’s put a bill in the House that has obviously got us to that point.

I do want to acknowledge the work of the Finance and Expenditure Committee. We did all work hard together, and also we had, gratefully provided by the Minister, officials to work on this. So, as you’re aware—more recently, but certainly what happened in the previous Parliament—there’s been a lot of work on the bill to get it to a stage where it provided for a more appropriate commencement date, it provided for a more staged approach to entitlement, it dealt with the issue of Realm countries, which we have a significant interest in and responsibility to, and it also dealt with the issue of refugees, whom we wanted to make sure were protected, because they’re vulnerable people when they come to New Zealand—they don’t have a choice. So those are sort of the four key aspects of this bill that through the committee we’ve worked through.

Obviously, the subsequent development is the discussions with the Minister around delaying the commencement date by two years. Personally, I’m very happy to recommend that. So I think, as a committee, we worked very well on that, and I think if we do get this through today, this will be a wonderful example of making progress on something that is a very thorny issue—namely, the cost and the issue of superannuation for New Zealanders going forward.

Kia orana, Madam Chair, and kia orana, Mr Bayly. Congratulations on getting this bill to this stage. Look, the provision I’m interested in is the one relating to refugees, which is new section 8A. Just a couple of things: as I understand it—and I’d just really like confirmation—what this means is that the law as it stands will, essentially, continue for refugees; it will be 10 years at most. It may not be something you’re able to answer, because it relates to the Minister’s Supplementary Order Paper (SOP), because—

CHAIRPERSON (Hon Jacqui Dean): Order! Just keep the Speaker out of the debate.

The member may not be able to answer this, and I’m sure the Chair simply will not, but the question is that the Minister’s SOP reproduces the new section 8A, in clause 5, and I’m just simply not clear what the change is, unless it’s simply a comprehensive rewrite. My question is simply whether there are any changes, in the SOP, to section 8A or whether that’s simply a reproduction of 8A. That’s simply my question, because I can’t seem to see any substantive changes or whether the SOP really is just a rewrite of pretty much the entire bill. So perhaps you can help me there.

It’s good to have professors of law involved in these processes, isn’t it? Effectively, the Supplementary Order Paper (SOP) is a rewrite of the bill. The issue, just to be clear, around the refugees is—and I’ve talked about before—effectively if you come here and you’re 55 and older, as a refugee, you only have to comply with the 10-year rule, but if you’re here for longer, you will have to comply for a longer period of time. But there’s that stop point of saying you do not have to comply with these regulations if you’re here aged 55 or over.

So, just to be clear, Mr Bayly, there is never going to be a greater than 10-year period—is that, essentially, what you were saying there? Because as I read 8A—

CHAIRPERSON (Hon Jacqui Dean): The Speaker?

The member—

CHAIRPERSON (Hon Jacqui Dean): Order! Is the member suggesting that the Speaker is saying it?

No. Is that what the member is saying?

CHAIRPERSON (Hon Jacqui Dean): Thank you.

Is that what the member is saying? Point of order, Madam Chair. If I may, there has been guidance around the use of the pronoun “you”, particularly when it’s a flowing conversation, and I might say that, given the direction around committee stage and the encouragement to have a bit of a Q and A, if I may observe, it’s very hard to have a free flowing Q and A—

CHAIRPERSON (Hon Jacqui Dean): OK. Thank you. I thank the member for the point of order, and the rule of thumb I use is that if the word “you” can be replaced with “one”, that is now permissible in the House. But if the word “you” is directed to a member, then I take it as if it is being directed at the Speaker and involving the Speaker in the debate. Does the member wish to continue his speech?

Thank you, Madam Chair. That’s helpful. So I’m just really asking the member to clarify that anyone who is in the country for a period of greater than 10 years, as a refugee, will automatically qualify when they hit their 65th birthday.

Thank you. So maybe I’ll just read this, from the commentary on the bill, to you: “Our amendment would retain the current 10 year residence requirement for a refugee or protected person who becomes a resident at age 55 or higher”. The amendment would ensure that the total residence requirement for a refugee is limited to no more than the difference between the date the person first becomes resident in New Zealand and the date on which they turn 65. So hopefully that will clear it up.

I’d just like to pick up on the member’s points about the best practice overseas, raising the age of superannuation to between, I believe, the member said 65 to 68, and some of the conversation that was had during select committee, and, also, when I look back at the Hansard, around fairness. Indeed, this is a bill which is predicated on fairness both to those who are paying superannuation and those who have been in the country and have been paying superannuation and working for a long time, and balancing that with those who have an entitlement to superannuation yet may have been contributing to other economies, or perhaps have been doing unpaid work. I note in the Hansard it was mentioned that life expectancies are different in Aotearoa New Zealand; there are different ages. So, for example, for women, it is 83.5; for men, generally, it is 80; and when that is broken down for Māori men, the expectation is much lower: it is 73; Pasifika men, 75.5; Asian men, 85; and so on.

So I’m curious to know: when the member spoke with the Retirement Commissioner, was there a discussion around the fairness relating to the retirement age, and did the Retirement Commissioner believe that the two-year extension was going to be a better and fairer mitigation than perhaps raising the retirement age, which, in the earlier debates, had been suggested by Mr Muller from the National Party? And, secondly, did the Retirement Commissioner speak particularly about the ethnic minorities that might be adversely affected by this—that small cohort—and was there particular concern for that group?

Thank you for that questioning. The first thing I would just say is that this bill is about raising the entitlement from 10 to 20 years, not about raising the entitlement for anyone in New Zealand from 65 to 67 or whatever. So it is very specific, this bill; I’d just make that point.

In terms of the discussion with the Retirement Commissioner, it was about this part of it and her recommendation that we should be delaying the commencement date, as I’ve outlined previously—that was the focus of the discussion. So I listened to her and responded, and, obviously, we are where we are today with the proposed Supplementary Order Paper.

You referred to life expectancy—so, yes, there is differing life expectancy between Pākehā New Zealanders and Māori and Pasifika, certainly as you highlighted, and even between gender, women and male, and they are quite substantial. The other thing is—that you are probably not aware of—that if you look at the long-term demographics of New Zealand, if you go back over the past four decades, effectively the life expectancy of anyone living in New Zealand has, effectively, gone up one month for every year that they live. So for every decade over the last 40 years, for every decade, effectively the life expectancy of New Zealanders, on average, has gone up by one year. So there are a whole lot of changing demographics, so pulling out one sort of demographic is only part of the issue.

The wider issue that you are raising about the unfairness, or otherwise, of certain racial groups or even gender groups who have lower life expectancy and whether they should be, therefore, entitled to superannuation at an earlier stage is outside the bounds of this debate today. But I would say to you that it is a long-running issue that most Governments have looked at. It was an issue when we were in Government and, certainly, you’ve been in Government for now nearly four years. The issue and most of the advice—I think, if you look at the advice that most officials give you, if you want to talk about complexity, by doing and looking at those sorts of aspects, you bring an element of complexity that a member from the Greens was talking about, which would make it very complex. That is why, generally, the advice from officials is to stay away from that and just work on a blanket issue. But, as I’ve said before, it is outside the scope of this bill.

Thank you, Madam Chair. I was very interested in the initial comments of Helen White—and I agree with them—regarding the degree of collegiality in the select committee on the first bill that she was part of considering. I sensed something of a surprise that there was that level of cooperation in the committee, and I think new members sometimes come in with this perception that we are sort of hammer and tongs at each other across the aisle. It is, I think, worth putting on record that that’s not the case, because the select committee is the engine room of our democracy, and we do work, I think, by and large, very cooperatively within it, including in the Finance and Expenditure Committee.

I raise that because this is what is slightly frustrating about the conversation that we’re having right now. This committee did work well to take a bill with great intent but not that well worded and make it better. But I note that, actually, as far as I can recall—and I can’t find the documentation—the Retirement Commissioner didn’t actually make a submission to the select committee raising any concerns. Now, I know that there has been a change to the Retirement Commissioner during that period and that somebody else has come in with a different view. That’s fine—I understand that. But one of the things that we could have done is actually answered some fundamental questions.

This is not a criticism of the sponsor of the bill, because he, quite rightly, is almost compelled, actually, I think, to agree with the Minister’s proposed amendments—and they’re well intended too. But it has created some confusion, because what we got in the departmental report and we were able to consider was some quite good information, as far as we could get, from the Integrated Data Infrastructure and from Immigration New Zealand about the number of people who might be affected by this change, and we haven’t been able to go back and sort of recalibrate some of that information as a consequence of the change to clause 8 as articulated in the Minister’s Supplementary Order Paper (SOP). I would like to know how many people who might have had a delay are now not going to have a delay, how material this change is, and what the cost of that delay is.

But for Dr Webb’s benefit—because he was, I think, not confused but asking questions about refugees—actually, the substantive change in clause 8 is not to do with anything to do with refugees. The simple change is this: the amended bill, as we reported it back from the select committee, meant that if one was aged 64 on or before 30 June, the time requirement would be 10 years. The amendment now means that one would be—and I’ve got to find my numbers here—62, I think, on or before in order to have 10 years, or is it the other way around, I think. I’m trying to see—

💬 Andrew Bayly: It’s 64, is it?

Yes—so it would be the other way around. You can be younger now and still have a 10-year requirement. So there’s actually a two-year delay before the 11-year requirement comes in, the 12-year requirement, and so on.

In respect of refugees, I think it’s important to note that when a refugee is granted residence, he or she is not subject to the two-year stand down for any income support, whether that be jobseeker support, the invalid’s benefit, and so on, that a New Zealand resident who has arrived for other reasons might have. The select committee, I think we should acknowledge, was very careful in our amendments to the bill to make sure that refugees would not be affected at all. So the chair’s question—Dr Webb’s question—about how refugees are affected by the SOP, I just want to support Mr Bayly’s response. The answer is they won’t be, and all through this transitional period and beyond, the qualification period will be 10 years. It will remain 10 years, and I see the member—yes—nodding. Good, because that’s certainly my understanding.

I think that’s really important, but I do want to record that I am a little perplexed that we didn’t hear from the Retirement Commissioner, that we weren’t able as a committee to perhaps put the new SOP and turn the handle on it and then see what the impact is. It’s a minor irritant to what will still be, I think, a significant improvement that affects a very small number of people, probably aged between 50 and 64, maybe even a little younger than that—sort of between 46 and 64—but they have a long period of time within which to plan for that change.

Thank you, Madam Chair. I wanted to pick up on the exchange between Ingrid Leary and the member around the fact that, as the member has acknowledged, this bill is not about the overall sustainability of New Zealand super, or, actually, the age of retirement within the New Zealand super system. While I note that the member has said that the intent of this bill is to move us to where other countries have gone in terms of raising, I guess, the requirements towards New Zealand super, this is ultimately about a very specific population group that we’re talking about.

In regards to inequities within our migrant communities, I wanted to unpack on the comments around life expectancy. Does the member not see that there could be some issues and, that therefore, higher healthcare needs between migrant groups that have had disproportionate lower health outcomes and pushing these groups towards perhaps needing a main benefit or perhaps not even qualifying for income support at all, means that we could inadvertently be putting certain groups at higher needs of the healthcare systems?

The actual initial briefing by the Minister for social development very specifically touched on the impact this bill could have on disabled people. So I note in the initial briefing what the Ministry of Social Development was mentioning was that as people get older—and I think we all know this—there tends to be more of a need within the healthcare system and people may end up becoming disabled. So, as the initial briefing touches on, the outcome of restricting New Zealand super will be an increase in poverty and material hardship amongst disabled people affected by this bill, and while the initial briefing and the member’s own contributions and people across the House have said that the savings throughout this bill will be quite minor, we will see an increase in material hardship in some groups. I guess, to me, in terms of reaching a balance or reaching fairness, I don’t see much fairness in increasing material hardship for disabled people or perhaps other population groups.

I guess I am seeking assurances by the members that this bill is driven by evidence and by good research as opposed to an ideological drive to reach a place of sustainability when the evidence that we’ve been given says otherwise. So I’m just seeking assurances that we’re debating something that is evidence-based, not just purely ideologically based.

I move, That the question be now put.

The question is that the Hon Carmel Sepuloni’s amendments to clause 4 set out on Supplementary Order Paper 58 stand part.

Mr Speaker, the committee has considered the New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.