COVID-19 Response (Management Measures) Legislation Bill

Kāti rā, tēnā rā tātou katoa. Mōrena mai tātou. Members, when we suspended last night we were debating clause 3 of the COVID-19 Response (Management Measures) Legislation Bill, which includes Schedules 1 to 8. Members had been focusing their questions, as far as possible, on the Minister in the chair before we moved to the next Minister. The reason for this is that Ministers can only have one adviser at a time in the Chamber and if we mix the questions around a little too much, we will waste time swapping out advisers. I need to let the committee know that Minister the Hon Poto Williams is available in the chair this morning until 9.30 a.m., so I suggest members address any questions relating to residential tenancies immediately, and then Minister Faafoi will be available to address questions relating to property law.

Can I ask the Ministers, that you’re remaining in the seats that you’re in for this first half hour so that members know that the Hon Poto Williams is the Minister in the chair.

Point of order. I’m just trying to make sure—so I have questions for Minister Faafoi. I’m sure this is abundantly obvious but I’m not going to do those now. I’m going to wait till 9.30. Is that the process?

There were a number of points of order last evening during the committee stage. The Standing Orders stand. There was an attempt to try to be efficient in the way that we run the debate on clause 3, to try and help the debate under the restrictions of only allowing one adviser in the House at a time. However, members have taken it upon themselves to address the breadth of the eight schedules, so it’s really up to the members of the committee. The Government has advised that the Hon Poto Williams is available till 9.30, but if members want to address other issues, they’re absolutely entitled to.

Point of order. If I could just, perhaps, be helpful to the committee and suggest that I’m prepared to—well, I have a couple of issues I would like to raise in relation to the Schedule 5 discussion, and then I am available until 9.30. However, if members of the committee want to discuss other schedules, I am happy to use my time for the first part of the morning, and then allow other Ministers to take the chair, if that is useful to the committee.

Point of order. Thank you, Mr Chair. There’s just a couple of things that I think could assist the committee stage this morning—and it may have been discussed last night; I’m not aware. One of the confusions is it’s not actually clear who the Minister in the chair is, because we don’t have the chair beside the Clerk. I wonder if it would be appropriate to designate a chair on the Government bench that would be the Minister in the chair so that we would know then how that order is going. It doesn’t need a prescribed—as we will do, say, for example, with the Budget Estimates review.

I should just finish by saying I did hear Minister Hipkins as Leader of the House saying there was a Business Committee agreement around which Ministers would be available. That’s not entirely my understanding. There was an invitation for parties to say who they would like to interrogate, but there was no agreement in respect of how clause 3 would go through, and you’re quite rightly saying that the Standing Orders prevail.

Thank you for that contribution. The member on both counts is exactly correct. So I’m going to ask the Minister in the chair, if I can, and I would have to ask the Hon Nanaia Mahuta to move—that we designate these front two as the Minister in the chair. It will make my job a lot easier as well, and when—whoever’s in there is the Minister in the chair.

Point of order. Thank you, Mr Chair. Last night, there was a discussion around—I believe it was Speakers’ ruling 52/4—an allegation of an improper accusing of the members of the Opposition by Minister Little of their being controlled by those people who fund the National Party, or that was the allegation—

CHAIRPERSON (Adrian Rurawhe): Yeah, I’m going to interrupt the member—

—and you were going to come back and rule on that.

Yeah, that’s right. That was raised by Chris Bishop. I said I would come back to him, but I’m happy to let the committee know that I’ve been through both Hansard and watched the recording of how things progressed, and taken advice from the Clerk’s Office. I am happy that the ruling that I made was correct and I took the words of the members on both sides as being honourable, and that’s where the matter lies. Members have other avenues if they wish to pursue them, but not through points of order.

Thank you, Mr Chair, and I thank you for the opportunity to speak this morning. First off, can I just say aroha nui to Christchurch for this morning waking up to the fact that we have two positive COVID cases in Christchurch. It really does bring home the reason that we are doing this mahi today: that our responses to COVID have to be swift, and there are some times when we are able to put in responses after the event, but there are some times when we are given the opportunity in which to prepare as a Government and as a Parliament and as local members of Parliament for things that may happen which are outside of our control. Unfortunately, sadly, we have had that experience happen to us in Christchurch today, knowing that we have to now make some decisions about how we move forward, to ensure that all of our communities are safe. So just aroha nui to our whānau and friends in Christchurch and across the Canterbury region.

I want to have the opportunity to speak to the Supplementary Order Paper (SOP) that was put up by the Hon Julie Anne Genter in relation to the changes to Schedule 5, the Residential Tenancies Act (RTA) changes. She made some really useful points, and I want to just say to her that the issues that she raised were issues that our officials also had as a part of the discussion and that Ministers also had an opportunity to discuss. The issues that she raises in SOP 70 are primarily about the changes that we make with regards to turning off the clock for terminations, for residential terminations, and then being able to allow for, once we are out of level 4 lockdown, a top up of 28 days for termination so that if, for whatever reason, tenants aren’t able to continue with being able to move to a new property, they are given a top-up period to allow them to go and seek new accommodation and view it.

The reason that we are not supporting the Hon Genter’s proposal about having that extended into level 3 is that, when we’re in an alert level 3 environment, it’s quite different to level 4 because, in level 3, you are able to go and view properties; you are able to make contact with potential landlords and view those properties, which is quite different from a level 4 setting, where you’re required to stay at home, you cannot view properties, you cannot actually move from your home—you’re actually required to stay at home. In level 3, those restrictions are lifted, you are able to view properties, and you are able to move into those properties. So, for that reason, we are not supporting the provisions as outlined in SOP 70.

The other matter that the Hon Genter raises is the matter of ceasing to have any rent increases in an alert level 4 environment. You may recall that, when we made changes to the RTA, one of the changes that we made was to limit the number of rent increases that a landlord could make on a property in any 12-month period to one. So, in any 12-month period, the landlord is only able to increase the rent once. So, for that reason, because you can only increase the rent once in a 12-month period, we thought that we don’t need to provide any extra support around rental increases, because those provisions have already been taken care of in a piece of work prior to this. So we are not supporting the SOP. However, we are very supportive of having this discussion, and I thank the Hon Genter for raising these matters with us and for her ongoing support of the RTA changes in Schedule 5 as part of this bill. Thank you, Mr Chair.

Thank you, Mr Chair. Well, it looks like we’re going to start to get into a bit more detail, and so I acknowledge the Minister, the Hon Poto Williams, just giving a little bit of explanation around Schedule 5. There are a couple of areas I want to focus on. I’ll just deal with the first one, and then I’ll come back, and hopefully we can make this a little bit more interactive.

So the first one is just referring to Schedule 5 clause 6. As the Minister just said, a tenant may give notice to terminate a tenancy in the area under a provision of this Act, a termination date, but the tenant may, before the COVID-19 tenancy order ceases to apply to the area, give the landlord written notice of their intention to remain in the premises, in which case the termination notice, termination order, or agreement to terminate is of no effect and the tenancy continues as if the termination notice had not been given. And then, in clause 3, it now talks about 14 days—not the 28 days that the Minister just referred to.

So I suppose my first question is: if I’m a tenant, I’ve given the notice, I’ve given the landlord expectation that I’m going to leave, and then the COVID order comes in, what are the grounds for saying, “I just want to stay in there.”? Because, if it’s the case of wanting to get another premises or rental accommodation to move to, I can understand that, but, at the period prior to the COVID notice, I would assume most tenants have already lined up their next premises to move to. And, therefore, has the tenant got any right just to terminate that tenancy arrangement just because of the COVID order? Or is there a requirement that they can’t move because where they intended to go, for some reason, as a result of the COVID order, they can’t? Is there any discretion around that, or is it just an outright right for the tenant just to change their mind and say, “No, I’m not going to move anymore.”?

There are two situations around terminations. There is one that is initiated by the landlord, and one that’s initiated by the tenant. I think the situation you’re talking about is a termination that is initiated by the tenant—so they’ve given notice to the landlord. And it may be for reasons due to COVID that the property that the tenant is moving to is no longer available. That does happen. So, in that situation, what the tenant is indicating is their decision to remain in the property that they currently hold.

Thank you, Minister, but I suppose the question is: does there need to be just cause? Because, what I was suggesting before: if a tenant has already indicated they’re leaving, they would’ve thought about where they’re going to move to and all those sorts of issues, right? They probably would’ve booked the movers if they were going to go down that route, or whatever, right? They’re planned events. Now, a COVID order comes along—can the tenant just decide for whatever reason that they want to stay? Because if there’s a lack of discretion around that, that, I must admit, worries me a little bit, because I think, if there’s just cause, i.e., that their tenancy of the new arrangement has fallen over—that’s just cause, and I perfectly understand it. But that’s the issue I’m asking.

Yep, thank you. I think in a situation where a tenant has decided to move, that’s a situation that they’ve decided, and we don’t know what the reasons are for moving. It could be for another job, it could be they’re moving to a bigger property, smaller property—not sure, right? We don’t want to prescribe the reasons where a situation where a tenant is saying, you know, “I’ve got a situation that I was going to. That situation is now no longer possible. I want to stay in this house.” The landlord doesn’t lose out, because he continues to have a tenant renting his home. So in those situations, I’m not sure why a landlord would require just cause. They already have an agreement. What it means is that we don’t disadvantage the tenant, who may have reasons they are no longer able to take up a tenancy elsewhere. That could be loss of job. I mean, they could’ve been moving for a new job and not able to take it up because of a lost job. So we want to keep it as simple as possible where it’s a tenant-initiated termination, that, for whatever reason they’re not able to enact that termination, they should have the ability to stay in place.

Well, thank you, but I suppose there’s another way of looking at it, if I may suggest, Minister; that is, the landlord may have entered into a new tenancy arrangement. So we’ve got another family on the other side who are now being stymied because they had planned to move into the premises that the tenant indicated they were going to move out of. So what you may actually do is cause more social carnage because people cannot move into the rented accommodation, or the landlord may have gone down a route of selling the property, may have gone down the route of about to demolish it—you know, there’s a whole host of reasons that are all perfectly valid, so actually you may actually be causing more carnage. That’s why I’m asking this—if there must be just cause—otherwise someone might just decide they want to stay on for a while.

I’m just going to repeat the premise. This is a tenant-initiated termination we’re discussing here, not a landlord-initiated termination. A landlord-initiated termination would be for the reasons that you describe, where if they sold the house or they are going to demolish. This is a tenant-initiated termination. If there is another tenant who is going to move in, they too can talk to their landlord about staying in place. That’s the protection we’re putting in place for tenants.

Thank you. Well, I suppose that’s covered under clause 9 of Schedule 5, I think—what the Minister is talking to. So this is “Certain discontinuation notices given by landlord before switching-on date are of no effect”, although some of that’s been struck out through the latest Supplementary Order Paper, I think. So this clause applies if a COVID-19 tenancy order is made for an area, and before the switching-on date, the landlord of a fixed-term tenancy may give notice. “The tenant may, by written notice given to the landlord before the end of the tenancy’s term, elect not to continue with the tenancy.” If the tenant makes an election, the tenancy terminates at the end of the fixed term. If the tenant does not make an election, the discontinuation notice is of no effect. This is where we get into the 28-day issue—although I must admit this area’s had a whole lot of changes to it, hasn’t it, Minister? So perhaps with all these changes—I see clause 3 has been struck out entirely—what is the difference, and how does the 28 days apply? Maybe that’s a good sort of start point on that.

I’m just checking with officials about that. That, I think, is about—I’ll just get some clarity on it—an order that the Tenancy Tribunal have issued. At the end of that period—the 14 days happens at the end of the matter that’s been heard by the Tenancy Tribunal. It’s not in regards to the 28-day top-up that happens at the end of a termination. So when we come back into level 3, a termination is then given a top-up of 28 days so that tenants are able to find another property and then able to move in. It occurs in a different situation, a different scenario. So it’s not a movement of the 28 days to 14. The confusion that you describe is not about the situation where we’re allowing a top-up of 28 days at the end of the level 4 period moving into level 3 on a termination order. This is specifically about an order that’s issued by the Tenancy Tribunal.

I suppose that just raises the question why have a different period of 28 and 14 days, which is covered, essentially, under clause 10 of the Act—why the difference?

Because it’s a Tenancy Tribunal matter, the tenant may want to move sooner than the 28 days, so we’ve allowed that with the 14-day period.

Yeah, I suppose I must be misunderstanding clause 10, subclause (2): the landlord may terminate the tenancy by giving at least 28 days’ notice to the tenant within 28 days of a COVID-19 tenancy order ceasing to apply in that area. What I don’t see reference to is actually any Tribunal decision. That’s the bit I suppose I’m just struggling with.

Thank you, Mr Chair. I’ll just take a call to fill the gap in because I can see the Minister would like to answer the question from Andrew Bayly. When you get to my age and you’ve got more numbers after your name than letters, you listen to things quite carefully, because you need to. I just want to ask a question with respect to a statement made by the Minister for COVID-19 Response last night, in response to his summary of why, effectively, the Government pulled all the clauses related to local government elections. In that summary where he talked about that, he talked about all the reasons why the Government have pulled that, and I accept the fact that the Christchurch situation may change today, but none the less the whole country’s situation could change at any time.

The reason I raise this is that he raised a lot of issues in his discussion around the reason for pulling the local government clauses out of this bill last night that, in my view, effectively make the whole bill null and void other than the property clauses, because, effectively, the reasons he used for getting rid of those clauses were the same reasons you could use for getting rid of every other clause in this bill other than the ones related to the property issue, which the Minister’s dealing with at the moment. So my question is: if that’s the case, why are we actually considering this bill at all other than these clauses related to the property sector?

I find it quite amazing that the Minister last night used all the reasons that I would have thought legitimately justified throwing this bill out, other than the clauses that the Minister’s currently dealing with. So that’s a question that I’ve got for the Minister in the chair, the Hon Poto Williams. I think it’s very odd that we continue to discuss this bill at all given those reasons that were given to us yesterday.

Now, I accept the fact that the situation in Christchurch could change. The situation in Bulls could change tomorrow; we don’t know that. It could change anywhere in New Zealand, and clearly the Government, as the Minister said very clearly last night, have adopted a different approach with respect to COVID since the bill was drawn up. So my question is: why in fact are we considering these issues at all given the answers that we were given last night in good faith by the Minister for COVID-19 Response. I don’t understand the reason we’d be doing that, and Parliament, in my view, deserves an answer to that very question.

Thank you. I thank the member Ian McKelvie for that question; I’ll speak to that first and then I’ll come back to answer the member’s query on new section 10A.

It’s very clear the reason we put measures in place, in anticipation of what may happen. It’s our intention, all of us—I don’t think there’s any member in this House that doesn’t support the initiative to get super-high vaccination rates in this country, which will then permit the restrictions to be eased enough to move into a much freer way of operating. That’s what we intend. However, there’s no doubt that the last 18 months has taught us one lesson, and that is to expect the unexpected.

The Government has not taken the COVID alert system off the table. What we’ve indicated is our intention to move to the traffic light system when we get high vaccination rates, but none of us can predict what will happen in the next little while. None of us can predict what may happen going forward. Having the alert system sit, ready to be enacted should it be needed, is one of those options. As a Government, it’s prudent of us to make sure that we understand the situations we may find ourselves in. Moving into the traffic light system does allow us freedom, and that’s where we want to move, but that’s predicated on high vaccination rates. And that’s something that we’re getting really close to, but we’re not there yet. There are large portions of our community that we need an extra effort into, and if I’m thinking about Christchurch, I’m thinking about one of my own communities in Aranui, for whom we are doing a big vaccination drive this weekend to lift their vaccination rates.

So to the member’s question, we are making sure that we are covering off our bases. That’s why we have got this bill in the House.

Now, to speak to the member Andrew Bayly’s question about new section 10A, if I could be permitted, the explanation around that is when the COVID tenancies order (CTO) is revoked for an area, and a further order is switched on—which may happen; we may turn it off, and there may be an outbreak and we may have to turn it on again—in quick succession, in accordance with the COVID-19 public health order which restricts people from moving house being repealed and then quickly reinstated, the bill needs to provide that the restrictions in termination notice periods in Schedule 5 are able to be reapplied anew. The minor changes in the Supplementary Order Paper ensure that Schedule 5 applies afresh, and if a subsequent CTO is made in short succession, this provides landlords and tenants with clarity of the time frames for serving a termination notice, in the unlikely event of areas bouncing in and out of lockdowns, and CTOs being switched off and on again in quick succession.

There are two exceptions to a subsequent CTO applying afresh under new section 10A. Firstly, landlords will get a further 28-day period to serve a termination notice under clause 10(2). Clause 10(2) allows landlords to terminate fixed-term tenancies which have continued as periodic tenancies under a CTO by giving at least 28 days’ notice to a tenant within 28 days after the CTO ceases to apply. Secondly, tenants will not receive a further 14-day period to serve a termination notice under clause 6(1)(iii). Clause 6(1)(iii) allows tenants to terminate the tenancy by giving at least 14 days’ notice to a landlord, within 14 days after the CTO ceases to apply to that area. Where a tenant has reversed a Tenancy Tribunal—

💬 Chris Bishop: Point of order. I’m sorry to interrupt the Minister, but just I’m conscious that at 9.30 there’s a national ShakeOut. Do you want to issue some instructions around what we’re required to do? Normally, Parliament wouldn’t be sitting at half past 9 on a Thursday, which is, I suspect, why it was set for then. But I’m conscious it’s a couple of minutes away. Maybe we should have some guidance about what we’re meant to do in a couple of minutes.

CHAIRPERSON (Adrian Rurawhe): And very soon I will give that.

💬 Andrew Bayly: Very soon?

💬 Hon Member: We might not be prepared.

CHAIRPERSON (Adrian Rurawhe): Well, I would have expected members to familiarise themselves with the whole aspect of it.

Thank you, Mr Chair. I just wanted to finish that. If a landlord or a tenant did not issue such a termination notice within the initial 14- or 28-day period—

Debate interrupted.