Annual Review Debate — Housing

Thank you, Mr Chair. As the chair of the Social Services and Community Committee, it is my pleasure to lead off the debate for the social housing sector review for the 2021 financial year. In keeping with our whole-of-sector approach, the Hon Dr Megan Woods appeared before the select committee to discuss housing in total. I want to thank the Minister for attending this additional session to the whole-of-sector questions. I thank the respective board chairs, CEOs, and officials for appearing and responding to written and oral questions.

The three entities reviewed were Kāinga Ora—Home and Communities, with the Auditor-General giving an overall rating of good; the Ministry of Housing and Urban Development (HUD), Te Tūāpapa Kura Kāinga, which the Auditor-General issued a standard audit report of a rating of good—we were pleased to see the performance improvement from the previous year—and Tāmaki Redevelopment Company Ltd, which the Auditor-General issued a standard audit report, with a very good rating. Our select committee written report was split into four topics. Each topic was divided into subtopics, and I particularly want to thank the select committee clerk and team for their excellent drafting of our 27-page report.

We heard of the challenges of COVID-19, in particular in Auckland. We also heard of innovations to improve public housing delays due to the pandemic, such as modules and panels constructed off site, private sector labour and expertise, and multi-year contracts to ensure confidence in capacity and capability. We heard that there has been decades of underspending in infrastructure. We also heard about demand and supply and the Progressive Home Ownership scheme, which includes shared ownership, rent to buy, and leasehold wraparound.

We heard about Te Au Taketake, which is a Government housing package, and of the $3.8 billion allocated to accelerate housing supply with programmes such as first-home grants, extension of the brightline test with an extension on new builds, and extending the Apprenticeship Boost to further support trades training. We heard about the changes in rules to limit deductions on interest expenses and that the biggest contributor to renting pressure was supply. We were told that there is a multiplicity of challenges in the housing sector and that COVID-19 has significantly affected these challenges.

Tāmaki Redevelopment told us that they had created a whānau debt relief programme. They noted whānau in the Shared Home Ownership programme decreased debt by 74 percent and increased income by 33 percent and savings by 31 percent. We heard also about the Jobs and Skills Hubs and about partnering under the iwi Māori housing strategy, with Kāinga Ora and Ngāti Toa Rangatira using the Infrastructure Acceleration Fund.

Kāinga Ora told us about their large-scale projects which are regenerative for Auckland and Porirua. Kāinga Ora have increased residential spending to $2.5 billion. HUD advised us that it ensures that expectations and requirements of Kāinga Ora are clear and are actively monitored. We heard that Kāinga Ora has delivered a net increase of 395 homes in the 2021 year. The Minister advised us that gross build yields was much higher. There were 857 homes demolished, 11 leased, 277 bought, and 1,866 built. The Minister said that the Government has funded an increase of 8,861 public housing places since 2017.

We learnt that 21 percent of Kāinga Ora housing was compliant with the healthy homes standard and that 45,000 of the 68,000 homes will need to be renewed or replaced. The Minister updated us with the current figures and advised that Kāinga Ora continue to increase the pace of the healthy homes delivery programme. We also heard that Kāinga Ora has a current goal of 15 percent of its new public housing meeting universal housing standards. We also discussed topics such as feeling safe in public housing, community crime, addressing antisocial behaviour, managing construction providers and partners, the Public Service Commission investigation, and the Kāinga Ora debt profile.

Our select committee review was extensive, and we look forward to hearing more from the housing Ministers today, and thank you, Mr Chair.

Thank very much, Mr Chair. There’s a range of issues I want to canvass with the Minister of Housing—I see she’s supported by her plethora of housing Ministers behind her.

I suppose the right starting point is what the Government itself said was the starting point for their housing policy, all the way back in 2017 when the Government came to office, which was KiwiBuild. It’s the programme that dare not speak its name recently, but we need to remember that this was the fundamental building block for all of the Government’s housing policy. In fact, it was going to be—in 2017 at least—the only thing that the Government really campaigned on when it comes to housing. And so here we are in May 2022, and 1,300 homes have been built that are KiwiBuild homes: zero in December 2021, zero in January, eight in February, but zero again last month—in March, or at least two months ago. So it’s a genuine question, and I know that there was the KiwiBuild reset when the current Minister took over from the former Minister, but it’s a genuine question, which is: what is the future of KiwiBuild?

Is it still Government policy to continue to roll out KiwiBuild houses, and, if so, how many can we expect in the next 18 months before the next election? And if it’s not Government policy to still stand up and support KiwiBuild, then wouldn’t it be better for the Government to put the programme out of its misery and redeploy some of the resources that are going into KiwiBuild into other things, and we can have a debate around what and where that resource should go. But it’s a genuine question around what the future of the KiwiBuild policy is, because that was meant to be the Government’s flagship housing programme.

Thank you, Mr Chair. I’d like to ask the Minister whether she believes it is still acceptable that $30 million was spent from the Land for Housing Programme for the land at Ihumātao and yet there are still no homes at Ihumātao, and can the Minister let taxpayers know when we would expect to see the first signs of development at Ihumātao?

I’ll introduce some general comments and I’ll address the two specific questions that have been put by the Opposition spokespeople for housing.

There are few things more important to New Zealanders than having a safe, warm, dry, secure place that they can call home. That’s why this Government sees housing policy as critical to what we need to do to achieve our wellbeing objectives. We have a housing crisis that is decades in the making. Not only have we not invested in the critical infrastructure that is required throughout our towns and cities to build houses but we’ve also had a sell-off of our State houses in the decade preceding this one. We haven’t had that ongoing commitment to building public housing, or indeed building housing per se and that kind of investment.

We know how we got here. The question is how we get out of this, what we need to do to address our housing crisis. Now, there is no one single, simple fix to our housing crisis that we face today. Instead, what there is is a commitment from a Government to have a suite of policies that work together. So that is why I am so pleased to be joined by my Associate Ministers of housing, who are all playing such critical roles in how it is that we have a multi-faceted approach to addressing a housing crisis that is decades in the making.

First of all, we have to make sure that we strengthen the system now and in the future. We have to increase the housing supply. That is something that we are immensely proud of as a Government that we are seeing start to happen. We have to provide immediate support to our most vulnerable, who are the victims of inaction by successive Governments on the issue of housing. And that is what we are also committed to: that what we do know is that this is decades in the making.

It is going to take time to turn it around, but we are starting to see the green shoots of change coming through, and we can look at some of the evidence points around us. We can look at public housing: there’s 9,075 more net public housing places since when we took Government in November 2017. Of those, we can see that there are new builds—they’re a substantial proportion of those new places: 7,313 of those new public housing places.

We then can look at what we’re doing in the issue of transitional housing. When we came into Government in 2017, there were 1,198 transitional housing places. And this is why we have a homelessness problem. We did not have adequate investment in transitional and emergency housing from the previous Government. I am pleased to report that today, there are 5,143 transitional places in New Zealand—that’s 3,424 that we have added in the 4½ years that we’ve been in Government and something that we can look to.

Progressive homeownership—that we have started for the first time at scale, rolling out a way to help New Zealanders who wouldn’t otherwise have bought a house—and, yes, I’ll come back to that. KiwiBuild—it’s not a programme that dare not speak its name; it is actually delivering at a rate that the previous Government’s eyes would have been watered by, given the special housing areas only delivered 100 affordable houses over a period of nine years. I am pleased to say that what we have is 1,304 completed KiwiBuild houses in the period and the time since we’ve been in Government; 917 are currently under construction now.

One of the Opposition housing spokespeople asked the question around “What is the future for KiwiBuild?” Well, I think, as we face the headwinds of a construction industry that is going to see it harder to get developments off the ground, that a Government that has a commitment to countercyclical tools like KiwiBuild is incredibly important. To hear one of the Opposition spokespeople say it’s time to pack it in and use that money in different ways, I’m interested—genuinely interested—to hear how he proposes to spend that money differently. I think that is important that we start to hear what the Opposition’s plans in housing are, because I’ve been waiting 4½ years and haven’t heard that.

So KiwiBuild does have a future. KiwiBuild certainly does have a future with this Government. But what we do need to do is ensure that we are backing young New Zealanders into homeownership. Now, with KiwiBuild, we had the courage to do one of the more difficult things in politics: to say that, actually, we needed to step back, we hadn’t got it all right; that there were some critical elements missing that allowed us to have KiwiBuild reach its potential. And one of those was the fact that we simply did not have the infrastructure in place in many of the places where we would look to build at an affordable typology, which is in terms of intensification. So if I look at Eastern Porirua, if I look at parts of Mount Roskill, if I look at parts of Māngere, the infrastructure that was laid down when those suburbs were built only allows us to build back one for one. And that is why this Government has committed $3.4 billion to investing in infrastructure, so we can get the intensification, we can get that density, and with it will come affordability. It is the burying of the head from the previous Government when they were in Government, that just did not look at what was required if we were going to have affordability built into our housing system—that is one of the things that we are still grappling with today.

The other housing spokesperson for the Opposition, from the ACT Party, asked me whether or not we stood by our decision of using the land for housing appropriation to buy the land at Ihumātao. We say, “Absolutely, we stand by that decision.” What we had in the stand-off that was happening at Ihumātao was a legacy of the failure in housing from the National Government. This was part of Nick Smith’s last-minute attempt to try and do something that just went horribly wrong. So the number of houses that we were going to get under the current settings at Ihumātao was precisely zero. As a Government, we are committed to taking the time to ensure that we can get some housing there, and to working with partners, and to ensure we don’t get bogged down into that stand-off again.

So the other area that I’d just like to touch on in terms of the green shoots that we’re seeing from our Government’s commitment to a suite of housing policies is a place-based approach. We’re saying there is no one-size-fits-all for New Zealand—that, actually, some of our regional centres are suffering some of the biggest housing deprivation that we’re seeing. We have to take a more nuanced and a more sophisticated approach to our policy settings here. So I look with great pride at an area like Hastings, that has had so little attention in housing for decades. I look at March 2021: a total of 108 Kāinga Ora public homes delivered to date, 117 currently under construction, 52 in feasibility, and 19 in procurement. And the Hastings District Council is developing council-owned land, which will deliver 150 affordable homes for locals that live there.

I’m sure that the Associate Minister responsible for Māori housing will take a call at some point and elaborate on this—we are incredibly proud of our Māori housing strategy, our MAIHI strategy; we simply had to do something to address the issues that stretch the housing continuum from homelessness through to the inability to get into homeownership for Māori. And we are trying things for the first time as a Government. These have never been tried in New Zealand before. We have a programme of work, we have the commitment as a Government, and we are doing things that have never been done before. So I look forward to, through the course of this debate, answering questions, but finally also hearing some detail from the Opposition about what they would do.

As-salamu alaykum, and Eid Mubarak to all of our Muslim brothers and sisters today.

Salaam alaikum, Madam Chair. I thank the Minister for her remarks to the committee, and, actually, there’s quite a bit I agree with her on. We do need to do better density in New Zealand and we do need to grow the number of homes that we build, and planning is all about that and infrastructure is all about that as well.

But I have a few more questions that I would like her to address. The first is in response to what she said around KiwiBuild. The Minister has told us that KiwiBuild will continue, and that’s fine. That’s a question for the Government and a legitimate policy decision. The question is just simply: what is the target for the future of KiwiBuild? Are there any targets? We’ve done 1,300 homes since KiwiBuild started and 917, I think the Minister said, are under construction now. Are we going to rattle along at a thousand homes a year for the foreseeable future, or is the plan for KiwiBuild to grow, and if so, how much? I think we deserve to know as a Parliament exactly what the targets, in broad terms, are for KiwiBuild, and we look forward to that being addressed.

In relation to infrastructure, I for one agree with the Minister that a critical part of enabling more housing is the infrastructure that underlies it, and that’s why I am so pleased to have both shadow portfolios for the Opposition. So my question would be in terms of working with local government—is the Government doing work on any policies to incentivise councils and local government to be in favour of growth? One of the underlying problems with New Zealand’s housing issues is that councils are at best ambivalent and at worst hostile to growth. There have been suggestions from some commentators and some experts in the area that one way around that is to change the planning rules and change the financial incentives upon councils so that new subdivisions and new density is not regarded as something to be pushed against and something to be angry about and worried about but something to be welcomed.

We need to go for growth. Growing cities are good things. Cities that grow reflect cities where people want to live, and I for one don’t want to live in a city where growth doesn’t happen and the city just stagnates and inertia takes over and populations age and stay the same. I don’t want to live in a country where that happens, either. If you don’t grow at the same time that your population grows, you end up in a situation like the Minister rightly talks about, where we have some of the most unaffordable housing in the developed world and we have 26,000 people who can’t afford market rents and are waiting on the social housing wait list and we have 4,500 kids growing up in motels. I don’t want to live in a country like that. The Minister is completely right—no one in this Parliament does. The question is how we solve that.

So my question is: is the Government looking at incentives for local government to be in favour of growth so that we can partner as central government with local government and make sure that when it comes to council planning decisions, the prevailing attitude in local government is not, “Oh, here we go again. This is central government telling me I have to build more homes without providing funding and infrastructure to deal with it, and I’m going to have to do all this work.”, but instead is, “Awesome, let’s go for it. We can provide housing for our ratepayers and get on with growing our cities and our regions.”?

Thank you, Madam Chair. Question: will there be funding for these excellent iwi prototypes like Ka Uruora from July 2023? Are Māori limited to the $780 million Whai Kāinga Whai Oranga funding, or can they apply for part of the $3 billion to meet the needs of their houseless whānau? If iwi prototypes like Ka Uruora are successful, will they be used for other investment like economic investment for whenua Māori? Māori make up over 50 percent of the waiting list for social housing; how many Māori will be placed in social housing this financial year? How many social houses will be constructed, completed, and let out this financial year? If the average house price is $850k and the bank requires a 20 percent deposit at interest rates for repayment pegged at 6 percent, how many Māori will be able to buy a house? Does the Minister acknowledge that the State subsidisation of market rents of up to $2.6 billion per annum distorts the true state of social housing provision? How many private speculated dwellings are subsidised by the market rent subsidy? Given the Minister’s answers to the market rental subsidisation, why should this form of speculation not be taxed? Is the Minister aware that Aotearoa is one of the few countries in the OECD that has no capital gains or wealth tax?

Thank you, Madam Chair. More and more New Zealanders are feeling unsafe in New Zealand—unsafe in their communities and unsafe in their homes. I would like to ask the Minister whether she is concerned that the number of tenants in Kāinga Ora homes are feeling more unsafe. More people who are living in Kāinga Ora homes are feeling unsafe than they were in the past. Does the Minister recognise that as a landlord, like all other landlords in this country, there is a requirement under law to make sure that tenants do not interfere with other tenants’ right to quiet enjoyment? And yet people in Kāinga Ora homes are feeling unsafe because of other tenants in their areas, because of Kāinga Ora policy that they will not kick out people for repeated antisocial behaviour. So my questions are to the Minister around safety. Does she think it’s acceptable that people in Kāinga Ora homes are feeling less safe? Does she believe it’s acceptable that there’s a policy that is different for the Government as a landlord rather than all other landlords around this country? And will she change the policy, or will she ask Kāinga Ora to change its own internal policies, to make sure that tenants have a right to a peaceful, safe environment if they’re in a home?

Tēnā koe, Madam Chair, and thank you very much for this opportunity to contribute to the annual review debate. What I’ll do here is I’ll just take some short time to lay a bit of context more broadly around Māori housing, and then address directly the questions that were offered by the Māori Party in this debate.

We’re proud on this side of the House of our contribution to Māori housing and the support for Māori housing aspirations. The Government committed to the vision of whānau and iwi in making sure that we have healthy, affordable homes with secure tenure across the Māori housing continuum.

The national Māori housing strategy, MAIHI Ka Ora, puts into action what was already built with our strategy to make sure that we can get Māori housing initiatives off the ground and supported. One of the key tenets of that is making sure in the first instance that the relationship is there. We know that iwi, hapū, and, in particular, Māori land corporations for the most part have been locked out of any housing solutions that this country is looking towards. Resetting that strategy was important, and over the past 12 months, we’ve done a fantastic job to bring together our strategy, but, more importantly, it’s to make sure we have actions that will equal homes and amount to outcomes for our whānau and our hapū and our iwi, wherever they might be.

As a result of that, we, as a Government, invested $730 million into our Māori housing aspirations: $380 million of that is for Māori housing and $350 million of that is for infrastructure, as has already been mentioned here in the debate. So with that $730 million combined, we look forward to continuing to grow Māori housing outcomes across the entire housing continuum. Now, that’s really important as I look to address some of the questions very shortly by the member from the other side of the Chamber.

So of our commitment in last year’s Budget of $730 million, we had a target of 1,000 homes, and, to date, I can say we have approved 378 homes to be delivered. We also had a target of 700 homes for repairs and maintenance. To date, we have approved 257. Of the 2,700 homes requiring infrastructure support, we have enabled approximately 411. We’ve supported 11 Māori iwi and Māori groups to build capability to accelerate housing projects and support services.

In direct answers to the questions that have been offered, the answer is yes, Māori housing iwi and hapū and incorporations that are currently involved and looking towards Māori housing aspirations can access what we’d term the general fund, if you like, for housing in general. So the answer to that question is yes.

The $730 million that I’ve already spoken to was quite specific and targeted. I’ve already given the numbers, and I’m looking forward over the coming weeks to sharing with that member and the rest of the House some more of the great initiatives that we have. What I’m proud of too, given where I know the member who asked the question comes from, is also our focus on our regions. We have spoken already about some of the urban centres, but we know that in places where the member comes from and even where I come from, in Te Tai Tokerau, housing is abysmal, and we want to make sure that we can support those housing aspirations.

Just recently, we announced—on Friday last week—Ka Uruora, which the member referenced in his contribution today, and I’m proud of that particular kaupapa because that sees us supporting a tribal collective spanning from Ngāti Rungi, which is in the north at Ōhākune, and Tūrangi, all the way down south to southern Taranaki, to places like Stratford, and everywhere in between. It would have been easy just to simply walk into Ngā Motu, or New Plymouth, to say, “Here we go.”, but what we’ve gone and done in partnership with iwi and those who are involved in Ka Uruora is we’ve identified families and opportunities in places like Ōpunake. When I was speaking to the local mayor from Ōpunake, he said, “Oh, the only thing people build around here are holiday homes.”, and we’re saying, “No, we are here to build family homes for people in Ōpunake.” We also spoke to the local mayor for southern Taranaki, and he said, “You know, Stratford hasn’t seen any new homes for families in some time.”, and he was proud that we will partner with them to make sure that we can meet those aspirations.

I will leave it there for now, but I suspect that I might get the opportunity, hopefully, again to continue to contribute to the debate.

Thank you, Madam Chair. In response to my colleague Mr Waititi, I also wanted to pick up on the kaupapa Māori - led response to homelessness, which is an incredibly important part of our work across our ministerial colleagues, and as Minister Woods said, we are very clear that not one person living without adequate shelter is acceptable to any of us. The vision for the Homelessness Action Plan is that homelessness for anybody is rare, brief, and non-recurring. We also know right now that we have some work to do towards actually achieving that vision, and we are committed and this is a different way of Government responding to the issue of homelessness.

So as we know, homelessness, in particular, has been decades in the making, but we have a shift in responding to homelessness. So the 18-month review of the Homelessness Action Plan was able to point to good progress in particular areas that I did want to highlight, including in ensuring that a housing-first approach here in Aotearoa is specifically prioritising a kaupapa Māori - led response, a tangata whenua - led response to homelessness. I know my colleague Mr Waititi is very genuinely concerned on how we also respond to and prevent homelessness. My colleague the Hon Peeni Henare already outlined the support and the importance of preventing homelessness from happening in the first place. This is the Māori supply, the Māori-led housing development, that we are going to start to see more and more of around the regions, and it has a direct impact on the unacceptable disproportionate rate that Māori experience homelessness in particular. And, as we have heard from our providers, it is unacceptable more so because this is our home in Aotearoa as tangata whenua.

So I did want to highlight that important work to the House, and in response to my colleague. I also want to go on to say that the progress includes action across the entire immediate 18 actions in the Homelessness Action Plan. It included—I wanted to also talk about this—new accommodation places for women leaving prisons and new accommodation places for young people leaving the care of Oranga Tamariki. Making progress on those and many other important areas are nothing to be scorned and are leading in terms of our valuing of who we need to be caring for as Ministers in this House.

Now these are prevention actions as well. The Sustaining Tenancies initiative is about helping people to keep their tenancies in the first place, to stop seeing more people from becoming homeless. Right now, I’m proud to say that we have got 1,063 households currently in that programme. We also have 4,435 households accepted into Housing First. These are important, every single one, but we know that we want to see more work done in those particular spaces as well.

I cannot sit down without acknowledging that through all of the homelessness work that we alone as Government cannot do, the community sector, the iwi, Māori, and marae sector, and the NGO sector has been critical—even through COVID, where they have been on the front line of having to deal with COVID and homelessness and a housing crisis at the same time. I cannot sit down without acknowledging their absolute commitment in the face of the incredible challenge and burden that has fallen disproportionately on them. They were literally the groups and the communities who were needing rapid antigen tests for their residents, who were needing the health services to come directly to their residents and their sites.

I have to give a shout-out. It was only because of them that we are also able to have achieved the actions, and especially the immediate actions in the Homelessness Action Plan. It is good progress. We absolutely need to be doing more. This is why I’m also pleased that the 18-month review threw up some new focus areas, including a highlight on youth homelessness, a highlight which we have never had in Governments before, including a highlight on the mental health and addictions support that we must acknowledge: the health support that goes hand in hand with addressing homelessness, and finally, including a kaupapa Māori focus and leadership for responding and preventing further homelessness. Thank you.

Thank you, Madam Chair, and it’s a real pleasure to be able to take a call in this debate. I do want to respond to the member from the ACT Party Brooke van Velden’s question with regards to safety for tenants. Regardless of their situation, everyone should feel safe in their home, and I don’t think that we have any other expectations that that should be the case.

What I do want to push back against is the notion that people who have the opportunity to live in a Kāinga Ora home are somehow more violent or unsafe than others, and I want to absolutely refute that. The people in Kāinga Ora homes are people who are great neighbours, great tenants, and great contributors to their community, and long may we champion them. I have to say that Kāinga Ora provides housing for those who may find it difficult to find housing in other places. It may be because they have health concerns, mental health concerns, drug issues, or other challenging life situations. That does not mean that they do not deserve to be housed in homes that are warm, dry, and affordable, and are able to take part in their communities like anyone else.

I do have to say that this has come about—there are issues where some antisocial behaviour has occurred, and there has been quite a lot of work done with Kāinga Ora in order to address those issues. Because, as I say, all tenants deserve to be safe, and where concerns are raised about those who are in Kāinga Ora tenancies, Kāinga Ora has acted. You may recall that towards the end of last year, there was quite a lot of discourse in the public arena around antisocial behaviour—that happens across all of our neighbourhoods, not just the neighbourhoods where Kāinga Ora tenancies are. But Kāinga Ora has taken the decision to ensure that we do everything we can to provide the support and what needs to go in place to make sure people sustain their tenancies. It is a policy that started under the National Government where we were faced with thousands of people across the country living in cars, and at that time—and it’s a policy that we have continued with; it’s about finding the solutions for people to sustain their tenancies, but acknowledging that there are times when that behaviour is at a level where Kāinga Ora must act.

So at the beginning of this year, they instituted a policy whereby if there were three significant antisocial events around a tenancy within a period of 30 days, the intensive team would step in and help to resolve that issue. Now, that doesn’t mean that tenancies were ended; it means that there may be issues around health or other kinds of challenging life concerns where some support can be provided to keep people in their homes, because at the end of the day we want to try and do that. But if we’ve exhausted all of those opportunities and we’re still unable to resolve the significant issues, then Kāinga Ora may look at exiting that person from that tenancy. That’s at the very end of trying to resolve these issues, because as I say, they do their upmost to keep their people in their tenancies—that is what we do.

But it is also for us to acknowledge that we have a role to support our whānau who live in Kāinga Ora homes to feel as welcome as they can be in their communities, and I absolutely refute some of the assertions in this House that to be in a Kāinga Ora home means that you are, by the very nature of the fact that you are a Kāinga Ora tenant, to be less safe than others. And that is completely, completely wrong—they are fantastic tenants, they build fantastic communities, and from time to time they need a little extra support to stay in those tenancies, and I for one am completely supportive of the fact that Kāinga Ora has done that. Significant issues they may have to deal with, but if you are the landlord of a last resort—which they are—you will do everything you can to keep people in their whare.

Well, thank you very much, Madam Chair. It was interesting to hear the Associate Minister for Housing (Homelessness) take a call in this debate. It was interesting what she didn’t say, which was the Green Party’s call for economically illiterate rent freezes, which I note is a policy that she is happy to write open letters about to the Prime Minister. But the Minister, an Associate Minister of Housing in this Government, is noticeably silent about and that, I suspect, is because she knows in her heart of hearts it’s a dumb policy. But anyway, I do want to ask the Associate Minister of Housing (Homelessness), given she’s here, about the Homelessness Action Plan, because she spent quite a bit of time in her speech talking about that, the 18-month review. And unlike the Minister, I have gone and read the Homelessness Action Plan—

💬 Hon Dr Megan Woods: For goodness’ sake!

Well, the Minister of Housing says “Oh, for goodness’ sake!” But the actual numbers in the Homelessness Action Plan bear no resemblance to the rosy picture painted by the Associate Minister of Housing. I’ve got the numbers here in front of me. She said, “Oh, things are getting better and the Homelessness Action Plan shows real progress.” Well, one of the 11 measures in the Homelessness Action Plan shows improvement—one; one of the 11. Eight are worse.

Let’s run through them. The number of tenancy tribunal applications is up. The number of distinct clients receiving their first emergency housing special needs grant has continued to rise since 2019. The number of applicants on the public housing register has increased since March 2019. There has been an increase in the proportion of applicants on the housing register who identify as Māori. That is one of the measures. The number of distinct clients granted an emergency housing special needs grant has continued to rise since 2019. The median number of days to house an application from the public housing register has been increasing, getting worse. The average number of weeks spent in transitional housing is getting worse. The average number of consecutive weeks spent in emergency housing is getting worse as well.

So of the 11 measures in the Government’s own Homelessness Action Plan—this was the world-leading revolutionary plan to make life better for the homeless in New Zealand—eight are worse. So my question to the Associate Minister for Housing (Homelessness) is: how can she credibly stand up in Parliament and say that the action plan shows progress when I’ve just read out at least six or seven measures, all of which are getting worse?

There’s a number of questions that have built up, and I’ll just seek to address a few of those. First of all, the question was asked from Te Paati Māori around the number of social houses that will be constructed this year. Given the numbers that we have, happy to give an update on that. This financial year to date, the net number—and it’s really important that we understand the difference between the net and the gross number here. There’s been 721 additional public houses added to the system. Now, within that, one of things, and why I say it’s so important to understand the interplay of the net and the gross number here—that net number of 721, if we look at the Kāinga Ora (KO) builds, it’s been 546 new builds that have been added by Kāinga Ora this financial year. There’s been four new leases. There’s been 122 buy-ins. There’s been 16 leases that have expired, so that comes off the total. But, of course, in order to maintain the momentum in our public housing programme, there’s also been demolitions.

So we report our numbers as the net number, so that actually nets out to Kāinga Ora only adding 106 houses this year, but we can see within that that there’s actually been 546 new builds, but because we don’t want to overplay the hand and report the gross number to try and make ourselves look better, we report the net number. So, net, there have been 721 new public houses added, but I think it’s really important to understand there’s also been 711 transitional housing places in addition to the public housing places that have already been delivered this year. There’s a further 2,560 KO houses that are currently under construction that have been begun or are in the pipeline. The CHPs—community housing providers—have a further 382 houses that are currently under construction, and then there’s a further 1,129 transitional houses that are currently under construction.

In terms of the total number we deliver this year, I’m currently working that through with both Kāinga Ora and the CHPs. Of course, our building programmes are bedevilled by the same headwinds that all of the construction sector in New Zealand is facing. This is a financial year particularly where a lot of our house building programme is taking place in Auckland, where there was a substantial period of lockdown and the impact that that lost time will have on the overall delivery numbers. What we’re seeing across the industry is probably three to six months as the window of delay for a number of construction projects, but we’re working through in a very systematic and a very detailed way with the Kāinga Ora board and management team around what those delivery numbers realistically look like for this year. But we do imagine we’ll see a shortfall in delivery this year. It’s inevitable, and it will be like that across the construction sector.

I was asked by the spokesperson for the National Party what the KiwiBuild targets are. Well, they’re as many as we can as fast as we can, as we stated when we reset the programme. To ask what the target is, I think, shows a lack of understanding of the potential of KiwiBuild. The answer is we do not know the extent of the counter-cyclical measures that we’ll need to put in place to deal with the headwinds that we’re about to face. There will be developments where KiwiBuild is a lifeline that keeps the development able to be delivered, and I think that to put arbitrary targets in place does us no service if we are going to set a target. What I can reassure that member is that it will be substantially more than the 100 houses over nine years that the National Government delivered in affordable housing when they were in Government through their special housing areas. I’m happy to give that reassurance and stand by it.

The National Party spokesperson also asked whether or not we would be introducing growth incentives for councils. The answer is absolutely. It’s called the $1 million contestable Infrastructure Acceleration Fund, of whom the 35 successful to negotiation were notified yesterday. That’s a billion dollars in infrastructure that we have not seen the likes of in New Zealand in generations. It’s not since the 1970s, you could argue, that you’ve seen central government investment in infrastructure like this. But not only are we incentivising; we’re also requiring it. We’re a Government that put in place the National Policy Statement on Urban Development, where we say to councils, “How many houses are you going to need for your population growth, and where are they going to go, and we’re going to put some requirements in place for you to have it?” Nine years in Government, the National Party did nothing to address these issues around growth, and I’m very pleased to say that in Government, we’ve been able to address it.

If what the member is referring to and what I’ve seen some parties in this House talk about is an inducement to councils, a flat fee of, say, $50,000 to put in place to say to councils, “For every house that you consent, we’ll give you $50,000.”—we examined this a few years ago to think about whether or not this was the way to do it, but we found that there are a number of failings with this approach. First up, the funding comes too late. For enabling infrastructure, you need the investment up front. You don’t pay it on a piecemeal, individualised basis like an incentive programme like that would suggest. It also fails to recognise the variability of infrastructure costs by saying there’d be a flat fee that would be applied.

I know in some of the large-scale projects and the investments through shovel-ready that we’ve put through, we’ve had substantially less than $50,000 per property when you do an area-wide approach to this in terms of the infrastructure investment that is required in brownfield setting. Also, the other problem with this is $50,000 flat fails to appreciate the difference in infrastructure costs between brownfields and greenfields investment. Of course, we’re a Government that is serious about meeting our climate targets and ensuring that we’re building climate-resilient cities, and brownfields development is inherently more expensive on the surface—and I emphasise “on the surface”—than greenfields development. You have to address existing infrastructure, and sometimes you have to buy up houses and bowl them. So this is expensive infrastructure investment.

So a crude tool like just paying an untargeted flat fee is certainly not what we’re investigating. Instead, we’ve gone for a far more nuanced approach that actually looks to address the area-wide issues that we have and that will finally see the investment in infrastructure that we need in this country.

Thank you, Madam Chair. Just a quick response to the member in relation to the Homelessness Action Plan. Firstly, acknowledging that on this side of the House we’ve shown that we can play very mature politics when the Ministers, neither of us, are responsible for what any other member of Parliament says, including the co-leader of the Green Party. Now that is a mature response; it’s a mature way of doing politics. I am quite clear that that member is highly capable of mature politics, at some stage.

So, from there, I’d like to say that I was very clear: there has been progress in the immediate actions of the Homelessness Action Plan. There has been progress and, if we want to hear more about it, it actually includes, for example, a local innovation and partnership fund. That’s about local initiatives who respond to homelessness. It includes, for example, pilots to support people leaving acute mental health and addiction patient units. There are many more, but I was clear that progress has been made on the actions. Absolutely, more needs to be done to truly, authentically reach the vision of homelessness being rare, brief, and non-recurring, and I have made no argument—and none of us have made any argument—that that’s where we still need to get to. That is still work to be done. That cannot be achieved in 18 months of a Homelessness Action Plan, but we are absolutely committed to doing more work to achieve that. Thank you.

Thank you, Madam Chair. And I take what the Minister of Housing said in relation to infrastructure incentives—I take that seriously. And I suppose my question as follow-up on a related note is in relation to the Infrastructure Funding and Financing Act 2020, which, as the Minister will know, was work started under the previous National-led Government and passed into law two years ago, obviously—2020 Act. I’ve had a lot of feedback from people in the development community, local councils, and others in the house building game that that Act, which I’m pretty sure I’m right in saying it passed the House unanimously, has proven—as a few people actually said at the time, and their fears have been realised—very complicated, and has proven burdensome to implement in practice. Now, there were high hopes when that Act was passed, and I think we all want to see new, innovative forms of the financing of infrastructure to facilitate new housing. So my very simple question to the Minister is: has she received similar reports to what I’ve received? And is she intending, if she hasn’t already, to kick off a review of the Act through her officials, with a view to potential reform; and, if not, why not?

I’ll quickly address that question. The Infrastructure Funding and Finance Act certainly is a tool that is going to be useful in a number of situations. Discussions are currently under way with councils that are interested in using this tool, but it is inherently a new approach and it is one that has to be worked through with care. One of the things I think that the previous Government—one of the legacies that we had to deal with is, I think, there was a belief that this was a tool that would enable the funding of infrastructure in areas where it was not suitable. So, for example, it’s my understanding there was an understanding that this could be a tool that could be used in Porirua to address the vast infrastructure work that was required to get any form of density and intensification in there. When we looked at that as a tool, we did not see it as a suitable tool for that area. What we wanted to do was ensure that we were building back in a way that allowed existing communities to stay in their neighbourhoods and for that to be in an affordable way.

So the infrastructure funding and financing tool certainly is an important part of the tool kit, but, as I said in my opening remarks, there is no simple single fix for us to address housing, and that includes infrastructure. And we’ve found, like most areas of housing policy, there was way more work to do from what we were left behind.

I thank the Minister for her answer. On a related note, which actually touches on the area of Porirua, but also my own area in Lower Hutt, is the whole issue of what is the Government policy when it comes to growing the community housing sector. The charge that some would accuse the Government of is the view that to grow social housing in New Zealand or grow community housing, the Government’s position seems to be that it has to be Kāinga Ora only. And, actually, as many members in the House will know, we have a whole range of different community housing providers up and down the country—typically closer to their tenants by dint of their smaller scale, their nimbleness—who provide a fantastic service for the communities that they look after, including a range of wraparound support mechanisms, some of which Kāinga Ora doesn’t provide.

The question for the Minister is: what is current Government policy when it comes to growing the community housing sector by way of capital grants, for example? Because there would be a view expressed by some that one of the most effective ways the Government could provide new houses in New Zealand—the new social houses, community houses in particular—is not just to provide money for Kāinga Ora to expand, and I note in saying that that Kāinga Ora built one net new house in the last quarter, but actually to provide money to the community housing so they can grow. And it’s not a binary either, it’s not Kāinga Ora can never build and can never expand—clearly they are going to have a role to play, they are the country’s biggest landlord. The issue is whether or not the Crown, with its large funding base and its large resources, can do more to help the community housing sector grow. And so the question for the Minister is whether or not the Government is looking at that, and what its Government policy actually is towards the community housing sector?

I encourage the member to look at the detail to understand our Government’s commitment to the community housing sector. So if I have a look at the number of new places that community housing providers (CHPs) have provided into the public housing sector since we came into Government, that’s 6,077 since 2017, and 615 this financial year alone.

We have made a number of changes in regard to CHPs since we came in, one of which is, as part of our Māori and Iwi Housing Innovation strategy, we’ve worked to ensure that, actually, we have some Māori providers in this space with by Māori, for Māori solutions. We also have an active programme of work in the Pasifika sector as well, ensuring that we grow our sector in that area.

One of the conversations that we had early on with CHPs is that we were different, as a Government, in our approach to public housing. Our approach to public housing wasn’t the way in which you grow the CHPs sector by selling off the State houses to them. We said we actually wanted to see everybody working together to solve the housing crisis. That involved Kāinga Ora building new houses, and that also involved CHPs building new houses.

Now, at one point, under the previous Government, I think it got as high as something like 67 percent of the new delivery by CHPs was buy-ins. That benefited no one and did nothing to solve a housing crisis. That’s why we changed the settings and have put this very much, squarely, around additionality. That’s why we’ve worked really hard to ensure that when CHPs are providing new places, they are new builds.

If we have a look at the new builds that our CHPs have delivered since we’ve come into Government, of those 6,077, 3,703 were redirects—and, to be fair to the CHPs of the legacy of the previous Government’s sell-off of State houses, still some of those contracts with redirects are in play, so that flogging off is still with us today—and 1,472 of those 6,000 are new builds. I want to see more of that proportion from our CHPs being new builds because building houses is how you solve a housing crisis—in the same way that we’ve put that requirement on to Kāinga Ora to ensure that it is ensuring that new builds are the priority.

We’ve also had to make some other changes to unleash the potential of CHPs, particularly CHPs outside of our urban settings, because what we found is that the settings were very much only focused on CHPs being able to deliver in our main urban centres. So we’ve done a couple of things: we’ve raised the market rent maxima, and we’ve done that outside of the urban centres. The market rent maxima, of course, pertains to the income-related rent subsidy (IRRS) and the top-up that the community housing provider gets between the 25 percent of a tenant’s income and what the market rent would be. It was set very low in regional New Zealand, and it’s one of the reasons why, under the previous Government, not only was Housing New Zealand not building and selling off in the regional centres but the CHPs weren’t either because that rent maxima wasn’t set at a level that made it economic for our CHPs to build in those areas. We have addressed that; we have changed that. It’s why, once again, we are seeing the building of public housing, both by CHPs and by Kāinga Ora, in our regional centres, where we have not seen work happening for decades.

What we’ve also done is early stage Operating Supplement funding. We’re doing 25 years of contracts with upfront funding which allows those CHPs to capitalise and to be able to build. It’s these kinds of initiatives which is exactly why our CHPs sector has been able to grow by over 6,000 in the four and a bit years that we’ve been in Government. But, fundamentally, what it’s taken is a commitment by this Government to commit to increases in the operating funding through the income-related rent subsidy. I’m still waiting to hear what the National Party would do in Government in relation to the IRRS because that is the constraint on growth, whether it be through Kāinga Ora or a CHP. What we can see is it’s nearly a quadrupling of operating funding that’s going to CHPs under our Government compared to the previous Government. So I think the CHPs have a lot to celebrate by having a Government that has a commitment to public housing in power.

CHAIRPERSON (Hon Jenny Salesa): Members, we have about three minutes left in this session.

Oh, right, well, I thought the time was up, but, given we have extra time, I have a very simple question for the Minister, which is more of a local matter, which is: when will there be housing built on the land in Wood Street, Wainuiōmata, which the Government said would be built on in mid-2019, and here we are in May 2022, and not a single house has been built on the land.

Happy to take a call and address that. We are working through with the locals on that. Of course it was opposed by the then local MP for Hutt South, Chris Bishop, before he was voted out, who led a community against having transitional and public housing on the land at Wood Street. So that kind of thing isn’t helpful. But we have seen a number of National Party MPs opposing having public housing built in their communities, so it comes as no surprise to me that we get this from a party when they get the Treasury benches: they flog off public housing.

What were the 1,681 new employees at Kāinga Ora doing in the last 4½ years since September 2017 if they were not engaging with the community of Wood Street to try and build housing here, which everyone in the street, including the former local MP, supports?

What those increased employees are doing is finally building some public houses in this country. Actually, what I invite the member to have a look at—a very detailed look at—is the cost of construction per employee under the previous National Government of Housing New Zealand compared to what it is at Kāinga Ora. It is of magnitudes different in terms of the much less cost. Of course, Kāinga Ora has also had to hire more tenancy managers because we’ve added to our housing stock, not decreased it as the previous Government did.

Members, that concludes our one-hour debate on Housing. We now move on to Agriculture, and we have the Minister the Hon Damien O’Connor in the chair to answer questions for 30 minutes.

Thank you, Madam Chair. It’s a pleasure to lead off the committee stage at the annual review for the primary sector as the chair of the Primary Production Committee. As other committees have done, we have considered the primary sector as a whole. Can I acknowledge my select committee colleagues across the House. We are a really hard working, collegial select committee and I want to thank them for the work that they have done with regard to our annual reviews, and work that they do among other matters as well.

The committee met between 18 November 2021 and 31 March 2022 to consider the annual reviews. We did a lot of those meetings by Zoom, as have many other select committees conducting their annual reviews. We considered the annual reviews for the following entities: the Ministry for Primary Industries (MPI), Land Information New Zealand (LINZ), Landcorp Farming Limited, AsureQuality Limited, Animal Control Products Ltd, Orillion, Crown Irrigation Investments Limited, New Zealand Walking Access Commission, and Quotable Value Limited. Many entities to cover off. This year we held hearings with MPI, LINZ, Landcorp, and AsureQuality as well as hearings with the Minister of Agriculture, for Biosecurity, and for Land Information, the Hon Damien O’Connor. I’d like to thank the sector entities that we heard from, and the Minister for also appearing before the committee to answer our questions.

There was a lot of information from these hearings which will be difficult to cover off in the short time that I have, so I’ll just touch on a few things and I’m sure my select committee colleagues will cover off other things during their time. Minister O’Connor acknowledged the Ministry for Primary Industries and their response over the last two years with regard to COVID-19 and he mentioned there is a forecast $50 billion in export revenue for the primary sector in the 2021-22 financial year. The Minister mentioned that he was also looking forward to progressing New Zealand’s free-trade agreement with the UK, and the committee notes that since our hearing, New Zealand and the UK have signed a free-trade agreement.

The committee heard that in 2020-21 the Ministry for Primary Industries had a surplus of just over $73.5 million against a budgeted deficit of just over $82 million. The surplus was a result of COVID-19 restrictions delaying projects, and a reduction in the cost of the ministry’s Mycoplasma response. Mycoplasma bovis was of interest to the committee as has been the case since it was discovered here in New Zealand in 2017. We heard that since the programme to eradicate bovis began in 2018, over $216 million has been paid to farmers. In 2020-21, $18,000,971 was paid out in compensation and ex-gratia payments. The committee heard that there were currently 50 claims still to resolve and that the average turnaround time for processing claims was 20 working days. We know that M. bovis has had an impact on our farmers and their mental health, and so we were interested to hear about what support has been offered to farmers that have been affected by the outbreak.

The ministry acknowledged that there was a lot of anxiety amongst farmers due to uncertainty and a perceived loss of control of their farms. We heard that the ministry has been providing support in a number of ways, such as providing relief, farm managers for farmers to be able to take leave. They’ve also been working with industry groups like DairyNZ, Beef + Lamb New Zealand, and Federated Farmers to provide assistance, particularly in areas with less access to mental health.

We also heard that National Animal Identification and Tracing (NAIT) compliance has increased. At the start of the 2019-20 financial year 70 percent of NAIT animals were correctly registered. And as it 30 June 2021, this is now at 91.5 percent. The committee was aware of the issues regarding the workforce in the primary sector and so we specifically asked MPI about this. The ministry informed us that Cabinet was soon to make decisions related to rural contractors, halal workers, dairy workers, etc. Noting that our reviews were done in November and March, I’m only highlighting the things that we heard at the time and not taking into consideration any decisions and announcements that have been made since then.

As mentioned earlier, there’s a lot of information from the entities we heard from, plenty happening in the agricultural sector. Again, can I thank the members of the committee, the committee clerks for their work, and the entities and Ministers involved in the annual reviews for agriculture.

Thank you, Madam Chair. We have a short time for an industry that’s worth billions, and it would be nice to have more time but we don’t, so I’m actually going to direct my questions to the Minister in one call, and, hopefully, we can get the answers to those.

Now, the chair, Jo Luxton, who, by the way, is a very good chair, mentioned mental health, and I want to make a comment about a working group with Dairy NZ and others that was mentioned in the annual reviews. I’ve got some information about that working group, which says there are two separate considerations for mental health. So we’ll go to the second one first, and that’s the way we organise and support our mental health services, but the first is described as “matters beyond mental health, which includes drivers such as workforce pressures and the speed, scale, and coordination of regulatory change”. I would like to know, from the Minister, what role he believes the Government has had in the mental health of the farmers, including workforce shortages, public perception, and too many regulations. So that’s my first question.

The next one was around contractors, and I’ve just been informed by my colleague Erica Stanford that of the 200 contractors that were promised prior to Christmas urgently—for our contactors and contracting farmers out there—we actually got nine. I want to know if the Minister’s happy that that’s a good enough number, because nine out of 200 is a pretty poor strike, in my view.

The third question is around the meat industry. On 10 February, we asked Minister O’Connor about what he was going to do for the meat workforce, particularly in light of the fact that it was going dry in Southland—and it’s been particularly dry—but all around the country, and there was big excitement and flap that morning because, finally, after about a year of the National Party’s Chris Bishop asking for rapid tests, this was about to be announced. Interestingly enough, in April, in the AgBrief, issue 14, volume 22: “Meat processors losing millions in value-added products as they attempt to get ahead of a backlog in cattle processing in Southland that may not clear until September.” So I’d like the Minister to comment on that.

I would also like the Minister to comment on this: we talked, in the process, around methane, which is obviously one of the big issues that we have to solve in agriculture. There are a number of solutions on the horizon, and there are a number of solutions that are used in other parts of the world, and one of them is more suited currently to housed animals, but they are working on solutions for New Zealand. Just wondering what the Minister has done in terms of looking at opening up regulations so that when the technology expands in that particular methane inhibitor, we can start bringing it into the country as soon as possible.

The fifth one is around soil carbon. We reached some agreement on the day, Minister, that we both felt that there was more depth in the ability to be able to sequester carbon in our soils. You said at the time—sorry, Madam Chair. The Minister said to me at the time that we agreed, and he agreed with me, so I’m wondering what work the Minister is currently pursuing around soil carbon and its sequestration that will allow some mitigation for the agricultural industry. Thank you.

Thank you, Mr Chair. My question to the Minister is really based around the work that he should be doing, if he’s not doing, around helping our rural communities and our farming communities adapt to climate change and in their farming practices as well. And I would like him to reflect on that on the recent New Zealand SeaRise report that came out, which indicated that, actually, time was even shorter than we thought. The time that we thought we had we don’t have. So my question is around about that urgency, because one of the things that I’ve noticed about this House in my short time here is that we’re easily distracted, we’re easily unfocused. Some of us have been distracted and unfocused and focusing on the Groundswell, when, actually, we should have been focusing on the sea swell.

So in that context, I wonder if the Minister could also focus on that new urgency: whether he will ramp up plans to help our rural communities, farming communities, to transition to regenerative agriculture and to organics as well, because we can’t wait—Napier can’t wait. At the latest they say 20 years, but the earliest in 10 years, it’ll be hitting Ōwhiro Bay out there on the coast, Nelson, Napier as well, so action is urgent.

And on that, I wanted him to reflect on the place of organics in that as well. One of the things that I do like about organics, if you’re going to get into those international markets, you’ve got to measure up. And with measurements—and when you can look at those kinds of baselines, things that they require in order for you to get into those markets—it actually makes it a lot easier because you can use that data to actually see while they’re doing things. And on that, could he talk to us a little bit about where the state of the Organic Products Bill is at? Any ideas around the support policies that will be needed to support those producers and growers, and also other related aspects? Thank you.

Thank you, Mr Chair. Minister, if I may, I just want to touch on what the aforementioned member Barbara Kuriger was talking about—methane mitigation. I believe that $23.52 million has been spent on methane mitigation. Where is it in terms of it being commercially available? I think Barbara Kuriger alluded to the fact that so much of that technology is currently locked offshore, notwithstanding, Minister, that the public—i.e., the farming public—is weighing in on an emissions trading scheme or He Waka Eke Noa. Arguably, many in the industry will see that as a guillotine or a noose scenario, as that technology is not commercially available. We know we’ve got short-term gas in terms of its rate of decay and its emissions, and we seem to be, as the rural sector, front-footing that conversation.

Minister, if I can, and the question I do pose to you, is: when do you see it being commercially available, given that a Minister outside of Cabinet but in Government has said that he agreed with your statements when asked by me in select committee that the national herd size didn’t need to be reduced? You and I agreed. He then agreed and then flip-flopped on that position. So is it not a case that we have a tax before technology and this is a back-to-front conversation?

Thank you, Mr Chair. Minister, I just want to ask you a question about whether you and your Government have turned your mind to food security. Now, the World Bank has noted fertiliser prices have surged in March, up nearly 20 percent globally since January 2022, and almost three times higher than a year ago. High fertiliser prices pose serious threats to food security, as they will impact food production in the next production cycle. In fact, last month the heads of the World Bank Group, International Monetary Fund, United Nations World Food Programme, and the World Trade Organization called for urgent action on food security. They said the world is shaken by compounding crises, and the World Bank estimates that for each 1 percent point increase in food prices, 10 million people are thrown into extreme poverty. The rise in food prices is exacerbated by a dramatic increase in the cost of natural gas, a key ingredient in nitrogenous fertiliser. And I note that surging fertiliser prices, along with significant increases in global supplies, have important implications for food production in most countries. They’ve called on the international community to urgently support vulnerable countries, including by increasing agricultural production. Only yesterday, Edmonds flour in New Zealand advised that due to poor wheat-growing conditions in the South Island this year, they’re no longer able to source enough New Zealand - grown wheat for Edmonds flour, but thankfully they’ve been able to get it from Australia. So my question is: has the Minister turned his mind to food security? Is he turning his mind to how to support the farm industry both for our economy, for our food security, and for our obligations to provide food to other countries?

Mr Chair, thank you very much, and I appreciate the opportunity to answer a number of the questions raised here. I have to firstly lay out and thank the primary sector for what has been an outstanding performance through some really tough times. We had over $50 billion a year in export earnings, which has never before been achieved in this economy. I want to thank all those people from the top of the country to the bottom who in any way, from the farm right through the production system through to the shipping, have shifted this offshore and who have produced the wealth for our country. It’s through meat, fish, dairy—the whole lot, in fact—and the prices at the moment are very, very good. It’s in part because we produce high-quality goods, but international conditions are squeezing things. We’ve heard about inflationary pressures, and they were starting to occur prior to the Ukraine situation, but they have been exacerbated by that, and I just want to thank the people.

At the same time, while producing that, they have been focused on better environmental management. There are 170 catchment groups supported by the Government out around the country focusing on better water quality, better nutrient management, and better biodiversity protection. This is a good-news story, but there are fewer and fewer farmers on the land as we’ve become more efficient over a number of decades, and so there is a larger number of people in New Zealand who don’t understand some of the good work that’s going on. None the less, there does need to be improvement in some areas.

Intensive winter grazing was one area where we saw some horrific images. We’ve put out some proposals, and we’ve adjusted and amended those proposals to be now really pragmatic to ensure that farmers can look after their stock through the winter. We don’t have measurements for pugging. We just want people to replant when they can, and we do want them to plant on not such steep country so that we can reduce the sediment load.

So there are areas of challenge, and one of the questions raised, of course, was around methane and how we might reduce that. It is a big challenge internationally. There is a focus on livestock protein production and a view that it’s contributing in a negative way, and it is contributing in a negative way. Well, that’s up to us to prove that it’s not negative. Yes, there will be emissions, but that will be with high, concentrated protein through systems that do protect the environment as well.

I’ll work through, if I can. As I say, I could go on about all the good things that we’ve done. Progress on M. bovis is better, as it was referred to by the chair, and I’d like to acknowledge Jo Luxton. She’s chaired a really good committee. The cooperation and the points raised in questions are, I think, indicative of that level of cooperation to support the key drivers of economic wealth creation in this country, and that’s great.

Can I just go back—I’ll work through things as I can—to the one on DairyNZ. They’ve put out a report based on mental health, and there have been stresses. It’s been stressful for pretty much everyone across our economy. There have been advantages in the primary sectors in that while there’s been a shortage of labour and there’s always pressures from adverse weather events, generally, people have been able to continue with their businesses and have often had better incomes than they had prior to COVID because of international prices. Look, that’s a plus. It doesn’t mean to say there aren’t pressures in the system, and we do have to do better to ensure people have access to support.

We’ve put more money into rural support trusts, we’ve funded the responses to adverse events, and we’ve had people on the ground. We’ve done all we can, and I think, generally, it’s been accepted that it’s the right level of support from central government, while depending upon people on the ground to deliver that help directly to individual farmers and to their families, and that’s the best way. We can’t do it from Wellington, but we can support the organisations like the Rural Support Trust to do that, and so we acknowledge the stress.

But, again, I’m reminding people who get into business on farms that there are many variables in a farming operation and they have become more acute with the weather events, so you’ve got to build some resilience into the system. The bank may want to provide a bit more money, but I’d suggest that people hesitate to add another $100,000 or $200,000 to your debt loading, because you do need a bit of headroom for those times when there might be impacts on your income. So reducing the financial stress is also part of that.

Can I come back to one of the points raised, and I’ll work through them. The contractors: there was an allowance for 200 contractors at the end of last year, and, indeed, maybe only nine came through. That was in part because the contractors chose to delay bringing those people in and took the lower-cost option of bringing them in later in the season. Look, I know it’s been hard and people have worked long hours, but we’ve managed to get through, and I guess there are many other parts of our economy where people can say, “Actually, we haven’t managed to get through.” So we’re ahead of the game across the primary sector in many, many areas.

Look, there are many other areas of the economy that have faced bigger challenges and haven’t been able to find a way through as the primary sector has, and in spite of the shortage of workers because our people haven’t been able to come in and out of the country, we have picked most of the fruit, we have processed most of the meat, and we’ve got the milk to market, and that’s, as I say, a credit to the people—not just farmers but people driving the tankers and people picking the fruit—who have done that little bit of extra effort.

Our summer fruit, for example, down in the member’s area—you know, we’ve had some crises. We heard it was really tough two years ago. This year, they managed to make do. I’m not saying it was easy for them, but they got through and I want to thank them for their efforts. So hopefully, now, with the borders open, some of that labour pressure will be relieved.

If I can move on to a couple of the other questions and points raised by people, the nitrate inhibitors and the challenge around through He Waka Eke Noa—this is the industry - Government - Māori collective looking at the challenges and progress that we can make—we have a target of 10 percent reduction of methane in agricultural emissions by 2030. I think we can get there, and while we have limited access to technology at this stage, there is quite a lot in the pipeline. We’re working internationally across about 60 countries to come up and share the technology—things like bolus, things like nitrate inhibitors. But as we saw with dicyandiamide, we’ve got to be cautious about how we use these things so that we don’t end up with traces in our products offshore. So that caution is justified; none the less, the challenge of actually reducing our emissions from agriculture remains in place. We’ll work with the industry, we’ll listen to their advice, and I’m sure we’ll put in place a workable solution to that.

If I can just go on to where, I guess, the Greens have followed on and raised some points around adaptation. Many of the most productive areas in this country, like the Hauraki Plains, are actually in low-lying areas. They are the most productive areas because, in fact, the nutrients have flowed off the hills down into the valleys and created these nice, flat, fertile plains, and it will be a challenge. There have been some across the primary sectors for years who have denied the impacts of climate change. I think that’s pretty much disappeared as we have seen more frequent events and more severe events affecting people on the land.

So we are going to have to work together to try to adapt to the new world that we live in—again, building resilience into our farming systems, building it into our business models—so that when an event occurs, it doesn’t tip someone over or create huge stress, and so that you are ready for this. Maybe there will be withdrawal required from some particular areas. I can’t make that judgment, but I do know that, actually, people in the primary sectors, like most Kiwis, are pretty innovative and pretty adaptive, and I think we’ll get through this. But we can’t deny the fact that the world is changing and the environment within which we work is changing as well.

Organics—yes, we need to get that bill through the House to give some consistency, and there’s division within the organics sector as to what we should do. I’m committed to get that through, offer certainty, and I think we’ll grow, as the EU has committed to have 25 percent of their production in organics; I think it’s by 2030. But none the less, people are more conscious of what they eat, and we will be producing higher-value products. Organics will be part of the mix. It won’t be all of it, but I welcome progress in that area.

The ACT Party raised a question around the spending on methane mitigation. Again, there’s been quite a lot of money being spent on R & D here. We have through Sustainable Food and Fibre Futures, in fact, spent money on new initiatives. The important thing is that we’ve changed this to make sure that we have open access to that information and it’s not captured and retained by an individual company. Usually, it’s a fifty-fifty or it’s a joint venture, so a company involved in some of this new innovation wants to have some returns—fair point. But, actually, if we discover something that is good for us and good for the world, then we have a moral obligation to utilise that technology and that knowledge to help reduce emissions across the globe, particularly when it comes to biogenic methane. It’s not simple. We can’t turn off the cow’s system, but there is a growing number of technologies that we will develop.

So working with He Waka Eke Noa and how they want to incentivise uptake of that technology on-farm is really important. They’re working through some challenging areas there as to how we get the funding to put into the technology, and then how we distribute that among the farming sector to get uptake as quickly as possible to meet—[Time expired]

Thank you, Mr Chair. Minister, if I could just change tack very quickly, the M. bovis programme, which you’re acutely aware of and have just previously mentioned, is an ongoing expenditure—this, notwithstanding Five Star Beef feedlot, which I know you’re intimately versed in, was first notified of infection on-farm in 2018. Now, I’m cognisant of the fact that there’s an exorbitant sum of money that’s probably going to be spent on its depopulation and then its compensation. This notwithstanding, I am sure there is disease mitigation from the property that’s ongoing in terms of cost through the programme. Can you please explain to every member in this House what the money will be. I know you and I have had several correspondences on this. There has been no money allocated. There’s been figures thrown around between $40 million and $200 million, notwithstanding there’ll be an inflationary cost to that because, as I say, the property was first notified in 2018 and now it’s 2022. Of the $886 million appropriated, I believe, for the programme, how much of this will directly go to Five Star feedlot?

Look, thank you very much. It’s a fair question. We’re making good progress on M. bovis, as the member has spoken of. The Five Star Beef lot is a challenging situation. They are the recipients of animals from across the South Island. A lot of them are off beef herds or have come through dairy, and so it was probably almost inevitable that they ended up with M. bovis. Ultimately, if we are to make real progress, we have to clean that operation up.

Look, I can’t and I’m not going to refer to the figure. Ultimately it will be a fair negotiation. I guess we’ll want to pay as little as possible and they’ll want to get as much as possible, but somewhere in the middle—somewhere in the middle. And there’s a lot of work still to be done on that, because it is a vertically integrated operation and it runs right through into the marketplace. The Prime Minister and I went to the restaurant that they have in Tokyo, where some of the fine product is sold and enjoyed by people over there. The point is that we understand it’s a challenge. We’ve got to make sure that when we do clean up the Five Star Beef lot there’s a very low likelihood of it being re-infected again, because clearly, when it goes into that operation, then it spreads through. But it’s not contributing to the wider spread of M. bovis at all, and that’s useful.

Very quickly, before I sit down, the one on food security raised by the member over there—look, we are very aware of that. We, in total, produce enough food for about 40 million people. So, unlike the Ukraine, which is a huge contributor to food security across the globe, and that’s been obviously impacted, we’re aware of the flow-on impacts which in the short term mean more money for what we produce. That doesn’t help with food security. In fact, you know, affordability, of course, is a lot harder for many people across the globe. Generally, we don’t supply those people. I guess people are paying more for our food, but none the less, we have a moral obligation to contribute and that’s through the sharing of information. And what people are learning is that the interruption with the fertiliser supply chain means that the fertiliser that we have, we should use more astutely, more efficiently.

There have been times where we’ve taken those inputs for granted; we’re not now. And so while we had access to large amounts of gas across the globe and it was producing urea for very low cost and you just poured it on, with the impact on the environment, now, the cost of urea has gone up. So people will have to revert back maybe to legumes, which was the basis on which we built our pastoral system, and those clovers that contributed the nitrate from the atmosphere into the ground for the grasses to be taken up and utilised were the efficiency that drove our success in the international marketplace. Now, that’s been pushed to one side as we’ve had cheap urea and poured it on and blown the clovers out of the sward. Now we’re going to have to go back.

Now, the fact that we know how to do that gives us an advantage in what is a challenging world of insecurity with some of those input components. So we have an obligation to go out and share our knowledge to actually build more food security in other nations as well. That’s where selling our services, where people will be prepared to pay for our knowledge, is an opportunity, an export opportunity for us. So it’s not just the food we sell, it’s the services and the knowledge that we should share. So in that way New Zealand will contribute to better food security across the globe, not by providing the food but providing the knowledge. In that way New Zealand will be the best country for the world.

💬 Hon Members: Mr Chair?

I’ll take some guidance from the members. It has come time—the Minister’s half-hour is up, but if the Minister’s willing to stay I’ll take another call.

Thank you, Mr Chair. Look, we got some good, long, expanded answers there, but they weren’t really to the questions that I asked. There were two questions that I specifically asked, and it was the first one about mental health. And we had a good description about what happens on-farm, but the question I asked: the drivers around workforce pressures, the speed, scale, and coordination of regulatory change; whether the Government felt some responsibility in all of that. And the second one was around methane inhibitors. I actually asked—I know there’s a whole lot of things going on out there, but I asked what work the Minister had been doing around regulations that allowed those methane inhibitors that we currently can’t use into the country. Thank you.

Very briefly, thank you, Mr Chair. On the methane inhibitors, look, there is an issue of definition of them. And the methane inhibitors used offshore have usually—or some of the ones that have been deemed effective—been fed on a regular basis during the day to animals that are housed indoors. But, actually, there’s an unknown outcome from feeding it for pasture-based systems. So therefore, if you were to feed a larger volume of that in one hit—whether that would then result in residues in the meat or the milk, that would then block us. So officials are working very carefully as to the definition of it under the Agricultural Compounds and Veterinary Medicines Act, whether it’s a fertiliser or whether it’s a veterinary medicine.

So those are tricky issues, and we do have to move more quickly—although I suggest that, actually, the investigation of those technologies in the pasture-based systems have to be fully tested. They are being tested, I understand, in South America—unclear results. We’ll have the advantage of that knowledge when we move through to start the testing here. But I don’t know how long, but I’ll have to say, like dicyandiamide, we have to ensure that when we use it, we don’t put our exports at risk.

Can I come back to the regulations one? Look, I think we’ve given the primary sector plenty of notice around methane, around our commitment—in 1997, in fact, we committed to include agriculture in our emissions reduction obligations. It’s taken us a while to get there; we’re getting there working with the industry around water. Clearly, we put some water regulations out there; we’ve listened, we’ve adjusted them. So there’s still some time, and I think most people are working through to adapt to the new requirements, which is better water outcomes, lower nutrient wastage—and I think they are good outcomes that enable us to stand proud in the world market and say that, actually, we’re running the best farming systems in the world.

Members, our time with the Minister of Agriculture has ended. The Minister of Justice is now available for 30 minutes.

Justice