Education and Training Amendment Bill (No 2)

Members, the House in committee on the Education and Training Amendment Bill (No 2). We come first to Part 1. I call Chris Penk.

Thank you, Madam Chair. I wonder if the Minister can provide a summary of this part for the elucidation of the committee. When he is able to do so, we will welcome any thoughts he can provide on that, particularly in the context of the legislation as a whole, and the regime that the Government is planning to implement thereby.

💬 Hon Member: Madam—

💬 Hon Member: Oh, apologies.

Well, somebody needs to seek the call.

Just to invite the Minister, as I did about 30 seconds ago, to actually provide some information about the bill, as is traditional, of course, in this stage.

💬 Hon Chris Hipkins: Page 1.

Page 1—very good. Page one is actually just the title, so there’s not much useful there. Arguably, there’s actually not much useful in the rest of it, either, but if the Minister would care to actually defend it at all, that would be very welcome.

So I notice, for example, that the direct engagement would actually be helpful, and what we’re seeing, obviously, is a bill that’s intended to promote various positive aims, but it seems to me that the reduction of competition and the increase of prices in the early childhood education sector is evidence to the contrary. So I’d be grateful for any thoughts that the Minister may deign to give this committee in terms of justifying the policy positions in Part 1 of the bill.

Thank you, Madam Chair. I wanted to question the Minister—and I’m sure there’ll be no surprises on this—around the Supplementary Order Paper that was introduced by the Minister and then incorporated in the bill, the one that we spoke about and deliberated on at select committee, around network planning for early childhood. I want to start by questioning the Minister around my tabled amendment to this part of the bill.

The changes that the Minister made to this part of the bill will extend the start date, effectively, of network planning to 1 February. Now, he did this after consultation with the select committee and representations that I’d made to him, in that the 1 August date was unworkable because there were many early childhood education providers who were in the middle of building and wouldn’t make that date. It was a great thing that he went away and changed that to 1 February. The problem, though, lies in the fact that—and I have made this clear to the Minister and he hasn’t taken it into account—over the December/January period, the Christmas period, basically Auckland Council shuts down and the ministry shuts down. So my amendment goes to this very point and asks the Minister to push the start date out another six weeks to account for this. The reason is that the early childhood providers are not able to apply for a building or resource consent or a CPU—a certificate of public use—from the Auckland Council between the dates of approximately 1 December and mid-January, and even into late January it’s a bit patchy because of a lack of staff that are around. They need those sign-offs in order to get their licence application ready to give to the Ministry of Education on 1 February, and they’ve lost six weeks.

Furthermore, the Ministry of Health and the public health entities that are required to do sign-offs for that licence are also closed for applications between, again, approximately 1 December and mid-January and, again, are a bit patchy towards the end of January. So that whole six- to eight-week period is lost because the applicants won’t be able to get the documents they need in order to get their licensing application ready for submission to the ministry. Furthermore, the Ministry of Education themselves close off for receiving applications for licensing around 1 December for six weeks, and, again, have about a quarter of their staff from mid-January onwards for a little while.

So that whole period is effectively a dead period for applicants wanting to get their licence into council. So this amendment asks that the Minister push out the date for another six weeks to account for this loss in time. My question to the Minister is: did he receive representations around this, why hasn’t it been taken into account, and will he support our amendment to make this bill better and fairer for applicants who have effectively lost that six- to eight-week period? Will he consider the amendment? I have other amendments that I will talk to but those are my questions for now.

The Government doesn’t support the amendment that the member has just spoken to, for one simple reason, and that is I think the member suggests by the way she speaks that if centres haven’t applied for their licence and got their licence by the date in question, suddenly it’s all over for them. In fact, it’s not. Centres will still be able to apply for licences after that date—they will just have to follow the new process.

The process is designed to stop the proliferation of services that attract Government subsidies in areas where there isn’t sufficient demand for them. We know that when demand is spread across centres that are struggling to survive, educational quality for children suffers. So these provisions are designed to ensure that where Government subsidies are being applied—and these are quite significant subsidies that get applied to early childhood education services—there is actually a need for them, acknowledging that there are some services that are currently under construction that won’t have had the opportunity to be able to comply with the new process because it was introduced after they had started building their services. We have allowed for that in terms of the time frames in the bill.

Thank you, Madam Chair. I think that the Minister mostly misunderstood my point, but kind of got there at the end, and still didn’t make any sense. The point is that this is around those providers who have already started construction and are trying to get their application in before the deadline so that they don’t have to apply and get caught in this dual licensing scheme that the Minister has set up. He himself pushed the date out from 1 August until 1 February for that very reason: to allow them to get their application in before the dual licensing system sets in. What I’m trying to explain to the Minister is that he did not give them a fair amount of time, because, included in that time that he’s given them—acknowledging that he wanted them to get their application in before the 1st, because they’re already under construction—they’ve lost six to eight weeks. The period that he’s given them—the period of grace that he’s given them—isn’t the period that he thinks it is, because it loses six to eight weeks. My question to him is: why wasn’t that taken into account? Has he listened to the early childhood education providers who are under construction at the moment, who are crying out, saying they’re not going to meet the deadline, and are concerned that they won’t be able to meet the dual licensing criteria?

As I indicated to the member just before, those are issues that the Government considered; that is the reason we have affixed a longer date to this particular deadline. I am satisfied that the new deadline gives centres a sufficient, fair opportunity.

Thank you, Madam Chair. Moving on, I want to talk to the Minister or get him to answer some questions around land that is compulsorily acquired that centres are on.

There has been a recent occurrence of a centre which is close to the Minister’s electorate—a centre called Little Footprints—and there will be others who get caught up in this, who have had their land compulsorily acquired by legislation because New Zealand Transport Agency (NZTA) are building a road through where their centre is going to be. So they are forced to move and they want to relocate up the road. Under the current legislation, it is our understanding that they will be caught up in the new dual licensing requirements, which seems extremely unfair.

My Supplementary Order Paper (SOP) 183 is requesting that centres who find themselves in this situation are exempt from the legislation if they’re moving within a 10-kilometre radius. I’m happy to go back and forward with the Minister on this and reduce that if required. But it is my understanding that they will be caught up in this legislation, including the one that’s close to his electorate, which many of his constituents actually attend—as I found out—who haven’t yet had to move, but they will have to move in the next few months. They only want to shift up the road—less than a kilometre, as it turns out—but under this current legislation will have to apply for a first licence or pre-licence and may, in fact, miss out if the Minister decides that there are enough services already in that area.

So I want to ask the Minister whether or not he will support our SOP. This will go for any early childhood centres in the future who are caught up in this compulsorily acquired land situation where they won’t be required to then apply for—they’ll just be able to move without having to apply for the two licences in the future. Keen to know if he’s heard from anyone else in the same position, if he’s heard from Little Footprints, and whether or not he will support our SOP in this case.

I am very happy to comment on that. I am aware of the centre in question which is being captured. The land is being acquired for public works associated with the flood protection around the Hutt River. I think it is important that centres that are captured by those circumstances, that allowance is made for them.

The advice that I’ve got at the moment is that we don’t need further legislative change or amendments to this to be able to do that. We certainly will be looking to ensure that where services are forced to relocate for circumstances beyond their control—so where land is compulsorily acquired, for example—they are able to transfer their service to a different site as close as practical to the existing site that they operate on.

What we don’t want to do is create a system of tradable licences, effectively, where people can relocate a service well away from where it is at the moment; 10 kilometres, if you think about it in the context of the Hutt Valley, that’s still quite a large area that a service could relocate within. So that service could relocate from Melling to Naenae, for example, and still be within 10 kilometres—which wouldn’t be the intention.

So we will certainly be making sure that services—I have made a commitment that I will make sure that services like that have the opportunity to relocate given that it’s beyond their control that they have to vacate their current site.

Thank you very much, Madam Chair. I just want to echo the comments of my colleague Erica Stanford and also say thank you to the Minister for his comments in relation to this issue.

It is, I think, an anomaly that is produced by the amending legislation that we’re going through. People have their own views about the substantive amendments that the Government is advancing, but I think we can all agree that centres like Little Footprints, which Stanford and I have visited to learn more about this challenge, through no fault of their own, are being, essentially, unfairly put in the situation where they are put at a disadvantage because of, in this case, the RiverLink and the Melling works. They have been advised by the Greater Wellington Regional Council (GRWC) that GRWC needs the land by 30 June 2023, when the RiverLink Melling interchange will finally be under way—God willing—and so of course they wish to move.

In relation to the Minister’s comments around 10 kilometres, I think I’m right in saying, Ms Stanford, that National would be more than willing to enter into a dialogue or discussion around the precise kilometre basis to get this Supplementary Order Paper (SOP) 183, potentially 3 kilometres or potentially 5 kilometres. If the Government wishes to move an amendment to that, that would be fine, but I would just encourage the Government to accept, now, this SOP.

I think it is a sensible SOP. It just says that the section applies to any licensed early childhood service when the premises are required by the Crown or the Public Works Act and the operator of that service may relocate, acquire another service or establish a new service, or have that licence transferred by notifying the ministry, and it has to be within 10 kilometres. As I say, we’re more than happy to enter into dialogue in relation to the precise kilometre distance for this. I think it is a sensible amendment.

The Minister has just indicated to the House that his advice so far is that there’s not any particular legislative change required. I would be interested in some further comment as to why that is particularly the case. But I would encourage the Government to accept this SOP because, at least in the case of Little Footprints—and potentially unknown other numbers of other early childhood education (ECE) services out there—it would provide some surety and some comfort for them. It’s obviously a pretty difficult time for them, and then if this became law they at least would have the backstop of knowing that if, in fact, the non-legislative options don’t work, there is at least that legislative backstop and they will, in fact, be able to proceed and transfer their licence so they continue to provide quality ECE services to the tamariki of the Hutt.

Further to that, I would like to ask the Minister to elaborate on how his officials have told him that these centres will not be caught up by the legislation, because it has been our advice and our reading of the bill that they will be caught up. So I would like the Minister to just elaborate on the exact part of the legislation that means that they won’t have to apply for both licences. If he could specifically point us to the part of the legislation that shows that they won’t be caught up, that would be very useful.

I guess the second part is he’s given us his word that he will make sure that this doesn’t happen in the future. But I guess if the legislation, quite clearly, in our view, shows that they will be caught up, how can he give us that guarantee? What will put in place, exactly, if not legislation—how will he make it clear, put it in writing, put it somewhere, that these centres will not be caught up.

So two parts to that question: firstly, if he can point us exactly to the advice that he’s had showing that they’re not going to be caught up in this legislation, and, secondly, if he’s not going to accept our Supplementary Order Paper 183, then exactly what will he do to ensure that they are not caught up and that they will be exempt? Just saying to us that that’s going to be the case is somewhat comforting—you know, I take him at his word—but it would be nice to know exactly how that is going to happen.

Just to be clear, I didn’t say they wouldn’t be captured; what I said was that in order to facilitate them relocating, I did not believe that additional legislative change was required in order to be able to facilitate that. So in operationalising the implementation of the legislation, we will be able to make provision for that. So that’s the discussion that we’ve had.

I haven’t had written advice on it, because it was a verbal discussion that we’ve had so far. In the event that further change is required, then we can bring that forward, but the provisions in this legislation do still allow for Government to make operational decisions about how they are implemented.

Thank you, Madam Chair. I wonder if the Minister could give us a bit of a general overview, an introduction to the legislation. Because during the submissions we had quite a lot of concern, particularly around the early childhood education (ECE) work—it was a solution looking for a problem, when in fact there are a number of real problems in the ECE sector. And so I’m interested to hear from the Minister how he thinks this legislation might help some of those real problems, like child-to-teacher ratios, there’s major issues there; pay parity, where the Government has actually caused more harm than good; quality assurance—spot checks are not occurring regularly; high costs to parents, and certainly in these times of inflation and the cost of living crisis, that’s particularly relevant. The administrative burden on teachers and centre managers; the restrictions on the use of the six-hours per day skill shortages; and the disparate issues around being able to access qualified teachers and many simply burning out and leaving.

So these are real problems in the ECE sector looking for solutions. And I would be interested to know from the Minister, in a general introduction of this legislation, how his amendment might in some way address any of those. Because with the network planning, Minister, all we are seeing is the likelihood of reducing competition and increasing prices for parents, along with the Minister having more control about being able to decide what happens where; and, also, the Minister giving himself the ability to make whatever changes, whenever he wants to, to the conditions on an ECE licence. So real problems that we would like the Minister to perhaps outline how this legislation might address those.

Before I take the Minister, can I just advise the member that in the committee stage she is to deal with matters that are in the bill. It is OK to refer occasionally and briefly to measures that do not fall within the scope of the bill, but a large part of the member’s question related to matters that are not included in the bill. I have been trying to follow, so I think I’ve got it about right. However, if the Minister wishes to address any of the measures raised, then it is up to him. I call the Hon Chris Hipkins.

Thank you, Madam Chair. I think you’ve just made the bulk of the point I was going to make, so I won’t re-canvass that. But if the member wants a general introduction to the Bill, I refer her to the legislative statements presented during the first and second readings. That is the point of those debates.

Thank you, Madam Chair. I am speaking to the Minister’s Supplementary Order Paper (SOP) 162. The background to part of this is that we approached the Minister to advise him that the two-year period between the two licences that the early childhood education (ECE) centres would need to apply for was never going to be enough. It currently stands at around about 15 months, if you’re lucky, to get a resource consent and building consent for a project, and then at least another year at least of spades in the ground and actually building.

Now, we had this discussion at the Education and Workforce Committee where I quite clearly put this to officials and said to them “The two-year time frame is not enough.” And the response that was given to me was, “Well, the developers and the ECE centres could always apply for their resource consent and their building consent before they apply for their early childhood first licence.” I made the point back to them: “Well, you name me one developer, one early childhood centre that’s going to put $100,000 to $150,000 at risk with a building consent or a resource consent before they know that they’ve got a licence to actually go ahead and operate an early childhood centre.”, and they didn’t budge on that. So the upshot of that was that I went to the Minister and he graciously, in his office, let me explain this case to him.

Now, I notice that the changes that have been made in the SOP have pushed this out to three years, and I just want to get the Minister to explain to us why he made that decision and what will be the requirements within that three-year period around milestones. So at what point will the developer or the early childhood provider need to show certain things have been done? Like a resource consent, a building consent, a spade in the ground, Gib up—I mean I don’t know what the Minister is thinking around those milestones. So if I could just get him to explain the three years and the milestones that will be required by the developer or the early childhood centre along the way.

Yes, indeed we are extending the time frame required from two years to three years. There will be milestones that the licence holders will be required to meet during that period of time to ensure that they’re not simply engaging in anti-competitive behaviour—i.e., getting a licence in order to stop someone else getting a licence, in order to shut them out of the market. So milestones will be set out. They’re not set out in legislation, but they will be set out in the operational part of the process as the new legislation is implemented.

The point of my question, Madam Chair, was to find out what those milestones were going to be, what he’s thinking they would likely be, and at what points they would likely be. If he’d care to elaborate on that, it would be very useful for the developers.

They have not yet been finalised.

Thank you, Madam Chair. I’d like to move on to the part of the bill that deals with the early childhood network planning and not just the Supplementary Order Papers. My first question, I guess, is around the data. I just wanted to know from the Minister what data he will be relying on in order to determine where a centre is required. How will that data be gathered, how will it be analysed, and who will it be analysed by?

While I give the Minister time to read his papers, a further question I would like to ask is: what are the Minister’s priorities when it comes to deciding an application? I’ll give the Minister an example: if a large early childhood education (ECE) provider turns up to the Minister or to the ministry and hands them a pile of research that they’ve spent a considerable amount of money on, showing that there is a need for a certain type of service in a certain area—because that ECE provider has undertaken a great deal of research showing that there is a need in that particular area—how will he balance their data against the data of the ministry? The reason I’m asking that is because all parents know very well that you don’t necessarily put your child in an early childhood centre that is necessarily close to your home. Quite often, you put your children in early childhood in a centre that is close to where you work or on the way to work, or somewhere else.

Now, there are companies out there that are able to provide this data to early childhood centres, and they will do so at considerable sums of money. The Minister’s data—that’s why I asked the question before that; what data is he relying on? How will he get data to show where parents actually want their centres to be? And, furthermore, what data will he be provided by the ministry as to what type of service parents want? Now, there is a plethora of service providers out there, providing everything from a Montessori down to a community service based ECE centre, and everything in between. So the question to the Minister is: will the ministry be able to find out data that tells the Minister where a centre needs to be and what type of centre it needs to be? Secondly, when an early childhood provider turns up with data showing that exact thing—that they’ve spent a lot of money on—how will he balance what they’re saying against what his own officials are saying? Will he use consultants to analyse that data? How will he balance the two?

And I’ll keep going because he’s still not ready. Furthermore, I guess the next question is: how long will the Minister wait between receiving the first application for a centre in a particular area and approving, or not approving, that particular one that he’s received? Will the Minister wait until he receives more applications for a particular area, so that he’s got a number to choose from? How long will he wait for there to be more than one? How long will it take to process the application? And, really importantly, I guess, if a provider turns up, first out of the blocks, with a whole bunch of information saying, “This is where a centre is required. Here is all the analysis I’ve done. Here’s the type of centre that parents want. Here’s where they need it—on their route to work or somewhere else.” and then another four centres come in, late to the party, a month down the track, and don’t have any data themselves but are relying on the data that was already provided by the first provider, how will the Minister balance those applications? Clearly, one has done a lot of work, but he might prefer one of the others—for various reasons that only he will know. So how fair is it that providers who don’t do any of their own data analysis can ride on the coat-tails of one who did, and how will he balance that out?

All of the issues that the member has just raised will be covered in the national and regional policy statements that the legislation allows for. So the requirements around what an applicant will need to demonstrate will be set out. The time frames for the processing of applications will be set out in the national and regional policy statements. So that’s not the subject of the primary legislation, which is what the committee of the whole House is currently debating. And, of course, it will be open to successive Governments to be able to set out different national and regional policy statements. I’m not in a position to answer for what future Governments may or may not do with that ability, but what I can indicate is that there is consultation happening at the moment, which is a matter of public record, which sets out the current Government’s thinking around that.

I’d like the Minister to explain how this legislation around network planning is going to improve the quality of those existing centres in areas where there is no more need for a centre and, therefore, a licence won’t be granted.

The network planning legislation that’s put in front of us also, for a centre who is in an existing area that the Minister may decide no more centres are required in, will have a huge impact on a business in terms of the value of that business, and I want to know from the Minister what research or what evidence or any advice he’s had around the effect on those existing businesses, or the ones that he grants licences to in new-build areas—the likely increase in value to their businesses given that there will not be any competition allowed in their area, therefore forcing up the value of their business.

Thank you, Madam Chair. I wonder if the Minister could give some clarification, for those that have got existing licences, as to what might trigger the Minister to make whatever changes he wants, whenever he wants on their conditions of the licence, given that this is something that will make their security at real risk, and therefore their ability to be able to borrow more money—to be able to know as directors of that centre what they might be able to do in future in terms of greater size, taking on more students. So can the Minister give some indication of what might trigger him to change conditions so that centres at least have some kind of security around knowing what they might or might not be able to do to give themselves better security, given the wide-ranging powers he is giving himself in this area?

I move, That the question be now put.

Thank you very much, Madam Chair. I just want to turn my attention and ask the Minister if he could elaborate a bit about the police-vetting requirements in terms of applications for non-teaching and unregistered positions within the early childcare education environment and whether or not he believes that that’s going to create an onerous burden on applicants into the system. The last thing we want to do is to place that burden on our existing police resources. Does he think that there is some leeway that can be given there? Because we see that most people will provide a police vet on their application or with their application—and whether we can streamline that process in a better way so that we’re not unduly adding a cost to the application which could also then be a barrier to applying for those roles, which I reiterate are non-teaching and unregistered positions.

The other question I have, while I’ve got the talking stick, is in terms of the criteria around locations or localities, is: how can the Minister give some reassurance to the customers of those early childhood centres that the ability to innovate, the ability to be creative in how centres deliver services to families, is not going to be stifled by the mere fact that they have the controlling interest in an area? And what guarantees can he give that there will be that ability for those centres to provide that innovation, if you like, but other ways of doing work as usual—and maybe providing what would normally happen as a consequence of competition in the market? So does the Minister believe that that might create a kind of—I don’t want to use the word “lazy”, but maybe a bit more of a relaxed approach to the long-term future of some of those centres, and that we do end up dumbing down as a consequence of that lack of competition?

If I perhaps just work backwards through those issues, in terms of the room for innovation and the room for different types of services, network planning certainly does not prevent that. And in the operational guidance that will be issued and in the national and regional policy statements, I think it will be clear that there is still room for innovation and for different service types in different areas where they’re offering something different that its current centres don’t offer.

In terms of police vetting, I can tell the member that the Minister of Education and the Minister of Police have had a good conversation about the police-vetting processes and there is some further development happening there in the space of police vetting, which the Minister of Police is leading, which will ensure that that process is continuing to improve.

In terms of the issue raised by Penny Simmonds in her questions, she is simply wrong. In fact, in terms of her assertions around what the bill does, she has a particular clause of the bill that she believes supports the assertions that she has just made. I certainly don’t believe that it is in the bill, that existing centres would be covered, but if she has a clause in the bill that she believes does do that, then of course I welcome her pointing that out.

To back up my colleague Penny Simmonds, I think her point was around the Supplementary Order Paper that is now included in the bill in terms of new section 17A, in clause 5B, which is around network planning. We have always been concerned around the fact that in section 17A it states that “(2) the Minister may, at any time (a) impose new conditions on the approval, or (b) amend or revoke any existing conditions.”, which is a huge red flag especially if you’re talking to the lenders, because nobody is going to lend to a provider when the Minister can change his mind halfway through on any conditions that he imposed at the beginning.

We know this because we spoke to the banks, and they said quite clearly that this is a red flag and they are unlikely to lend on this. Now, when I took this to officials and brought it up with them in select committee, they said to us, “Oh, no, it’s fine. It’ll only ever be driven by the applicant—if there is a change driven by the applicant.” So I drafted Supplementary Order Paper (SOP) 182, which goes directly to this and, basically, says that if that is the case, and if what the officials are claiming is true—that it will only ever be driven by the applicant—then let’s put it in the bill.

Supplementary Order Paper 182 requires the words “at any time” to be replaced with “with the consent of the applicant”. So if it’s driven by the applicant, he needs to consult with the applicant, and the applicant needs to consent to those changes—if it’s true what the officials told us in select committee. This SOP is very important for the reasons I’ve already outlined. It’s a huge red flag for the lenders. It’s a huge amount of uncertainty. It’s a sword of Damocles hanging over the developer or the early childhood provider in that things could be changed at any point during their build, outside of their control, at the whim of the Minister, because that’s how the legislation reads. If it’s true that it will be driven by the applicant, then the Minister should accept my Supplementary Order Paper, which says that the consent of the applicant must be given in order for any changes to be made.

This is the one clause in the bill that all early childhood providers and developers, the council, and banks raised concerns about with me, and at the select committee, and as much as I tried to get this changed, I wasn’t able to. So that’s why I have brought forward this SOP, and my question to the Minister is: is it true what the officials told us? Is it the case, as they told us in the select committee, that it will only be driven by the applicant, and if that is the case will he support my SOP to make sure that any changes that he does make are in consultation with, and with the consent of, the applicant? If he does support this, it is going to make a huge difference to the funding of these developers and the funding of these early childhood centres when they go to the bank and ask for money, because this is the one part of the bill that is a huge red flag. So the question to the Minister is: will he accept my SOP and make sure that he has the consent of the applicant, and was it the case that this will in fact be driven by the applicant?

I would simply point out to the member a couple of things. One is that centres at the moment apply for funding to build new early childhood centres without, in many cases, ever having applied for a licence. They don’t apply for the licence until the centre is already finished. In fact, in one case, as the local member of Parliament, not as the Minister of Education, I attended the opening of a new early childhood centre in my own electorate only to discover that, in fact, at that point, the centre hadn’t even applied for its licence. It’s a very nice centre. It subsequently did apply for a licence. It’s been a very popular centre, and is serving the local community very well, but that centre had gone all the way through the process of consenting, building, employing staff, and getting ready to go before they even applied for a licence. So the idea that there is less certainty now when centres are, basically, being given pre-approval of a licence before they go through that process is, I think, absurd. No banks submitted during the select committee process. No banks have raised this issue with the Ministry of Education, so I don’t accept the assertion that the member makes, that this somehow is going to lead to less certainty.

I think it does somewhat contradict the question she was asking earlier, which is around the ability of the Minister or the person approving the licence to be able to set the requirement for milestones to be met. And as the member will be aware, from time to time those milestones may need to be changed by negotiation, and that’s what the bill allows for.

I do want to give the Minister the exact clause that he told me I was so wrong about, and he may want to reconsider that assertion. It is new clause 5B inserting new section 17A(2): “The Minister may, at any time,—(a) impose new conditions on the approval; or (b) amend or revoke any existing conditions.”

Now that is the uncertainty that we are talking about. Anyone running any business, but particularly an early childhood centre, that may have new conditions imposed, or amendments, or revoking any existing conditions—surely the Minister can see how this uncertainty would make banks lending to an early childhood provider very nervous, and therefore make it more difficult for early childhood centres to be able to extend or try and gain additional loan facilities. So that is the exact clause I was referring to.

Madam Chair, the member is wrong. She continues to assert that these provisions apply to existing early childhood education services. They do not.

I move, That the question be now put.

Thank you, Madam Chair. I would just like to go back and ask the Minister—and I’ve made an assumption here that the Minister has had fulsome discussions with the Minister of Police. As he’s alluded to something coming, maybe he could elucidate a bit more about that, because I think it would give comfort in this particular issue, around police vetting, and if the Minister has got further information that he would like to share in the committee of the whole House, I think that might prove to be very reassuring. And if the Minister could please help us out by sharing the fulsome conversation that he has had with the Minister of Police, that would be great. Thank you.

Just briefly, no I’m not in a position to go into that in greater detail. What I can say is that the Minister of Police is in conversations with the Police about how the Police-vetting process can be streamlined. It is an issue that’s been raised with the Minister of Education by early childhood services and others, including schools—you know, all those covered by the vulnerable children’s legislation where police vetting is required. I have raised this as an issue, and in fact Police have raised this as an issue, because of the resource impost that it has for Police. I do think that there is a potential there to streamline some of those processes to make them quicker, potentially, but also less cumbersome for everybody involved.

So I’m not in a position to go into greater detail on that at the moment, other than to say that it’s certainly on the work programme, it’s being worked on, and the concerns around time frames and around the process are absolutely acknowledged.

I move, That the question be now put.

Part 1 of this bill is a substantive part of the bill. There are a number of members’ amendments; there is also one tabled amendment, so I will keep the debate going. There are members seeking the call.

Thank you, Madam Chair. I just want to take issue with what the Minister said in relation to the answer to my question. He gave the example of a centre that hadn’t applied for a licence when they’d already opened. I think the point to make quite clearly is that the current licensing arrangements are such that they are checkbox exercises. As long as you meet the criteria, you will get a licence. The issue with this new licensing arrangement, and why I brought my Supplementary Order Paper (SOP), is because that is not guaranteed any more. It is up to the Minister to decide who gets the pre-licence out of a number of applications, depending on his set list, which we’ve had an idea upon about who he will prioritise, whether or not he thinks that there is significant demand or enough for another centre in that area. So it is not guaranteed.

So that’s why it’s so very important in the first instance to make sure that these developers and early childhood centres have access to funding more so than they do now, because they know very well that as long as they meet the criteria, they will get their licence, and if they muck up something, then they can go and fix it and come back and reapply and get their licence. It is much more of a guarantee than under this new legislation. That is why I brought the SOP, because it has been brought to our attention by the banks. I did ask the banks to come to the select committee and they refused because they said they don’t normally get involved in this type of thing. But I think it’s very telling that the Minister and the officials didn’t go to the banks themselves when I raised this with them and said this is going to be a problem.

For the Minister to just sit there and say, “Oh, well, the banks didn’t contact us.” isn’t really good enough. It is an issue. Early childhood centres and the council have told us it’s an issue. The banks have told us it’s an issue. We cannot have a clause in the bill that says that the Minister can change his mind at any time that he thinks fit, because no one will lend to me on that, and my Supplementary Order Paper just makes it clear that if the officials have said that it’s to be driven by the applicant, then it should be.

My second point that I want to ask the Minister about is going back to quality. I asked this question earlier and he didn’t answer, and then they tried to close the debate down. I think that this is a question that’s worthy of answer. We have, in some instances, issues with the quality of early childhood centres, and we need to be doing everything we possibly can about that. This piece of legislation, this bill, does nothing to make sure that centres are improving their quality of service. In fact, it does the opposite. It tells them: if you are in an existing area, we will protect you from any competition because we will not allow any competitors in to compete against you to force you to raise your standards, because we want to control the sector and make sure that there is the exact right amount of centres in a region. Now, the upshot of that is that centres will only be incentivised in these cases to do what is the bare minimum.

We all know that competition is the thing that makes sure that people are upping their game, improving their services, adding additional benefits for parents, and that is not going to be guaranteed under this bill. In fact, we’re going to get the very opposite. So the question that I put to the Minister earlier is really important. If you take the example of an existing centre in a person’s local area, that is acceptable but it’s not great. Parents don’t love it, but it’s just there. This bill means that no one will be able to come in and compete against them, if the Minister decides that there isn’t sufficient demand for another centre. There is no incentive for that centre to improve their playground, to improve the quality offering of their food, to improve the resources that the children have access to. The incentive is to do the bare minimum. So I want to ask the Minister: what does he think will happen to the quality of existing early childhood education services when they are not having any competition because he won’t allow it? And will this lead to a race to the bottom?

So two quite clear questions there: the first one about my SOP and, I think, his misunderstanding, and then, secondly, it is really important that we get an answer on quality, because this whole bill is doing the opposite of incentivising early childhood centres to improve their quality through a lack of competition.

The member’s blind faith in the market and in competition delivering better outcomes is somewhat misguided, given the concerns that she’s raising about the quality of current early childhood education services where there is, effectively, a free market operating at the moment. In fact, international evidence suggests that in education settings, particularly in schooling in early childhood education, competition and a free market do not lead to better outcomes for children, and it does not lead to higher quality services. The network planning provisions are nothing to fear in that regard. They’re making sure that Government subsidies are going into high quality services. In fact, one of the problems that we’ve got with the current market model for early childhood education services is that low quality services are able to replicate without any consequence. So even if somebody is operating a poor quality service that’s on a provisional licence, they can go and establish other services elsewhere with very little consequence. That is one of the problems that we have with the sector at the moment. So the network planning provisions will help us to prevent that from happening and I think that that will be a very good thing.

In terms of the member’s contention that the planning provisions in this bill will lead to fewer people being willing to enter the market, that is simply something that the Government disagrees with. It is a debating point but she hasn’t produced any evidence to demonstrate that that’s what’s actually going to happen.

Thank you, Mr Chair. I want the Minister to give me an example of how network planning will improve the quality of existing services in an area where there are to be no more services set up; so in an area where there is currently one centre—let’s take Ruakākā; somewhere where there’s only one centre—and it is operating at minimum standards, barely acceptable. How will network planning improve the quality of that centre when there is no more room for a second centre to come into the market under his legislation?

Secondly, the Minister didn’t answer my earlier question around my Supplementary Order Paper 182, which is to ensure that the consent of the applicant is gained when the Minister makes any changes. He hasn’t answered the question of whether or not it is the case that the officials were right that this will be driven by changes made by the applicant, and he hasn’t answered the question around my argument around how this is so important in this case, because there is no guarantee that you will get your licence—that a licence will be able to be gained compared to now. So if he could answer those questions, that would be very useful.

Mr Speaker—Mr Chair?

CHAIRPERSON (Ian McKelvie): Mr Chair.

Why is the Chair in a different spot than the Chair usually is? Oh, no, sorry—

CHAIRPERSON (Ian McKelvie): I’d remind the member he’s a couple of years out of date.

Thank you, Mr Chair. I want to refer to the issue around elements supporting the reform of vocational education, simplifying qualifications and credentials. I suppose the issue there is it’s in the context of what we in this House would regard as a slow-moving train wreck of the reform of vocational education, where what we had was a very effective set of polytechs around the country, some of them being in financial distress and others of them doing extremely well and serving their community very well. This Government’s impulse towards centralisation meant that their answer to every problem is to nationalise everything and have one rule for all and to lump everything into one organisation. Then, two years on and hundreds of millions of dollars later, we have a combined institution with a deficit larger than ever before—$110 million so far, probably much worse—and then what we have here in relation to proposed legislative changes around simplifying qualifications and setting up microcredentials. I remember when I was tertiary Minister five or six years ago, we were talking about microcredentials. I’m glad we’ve finally made some progress, five years on.

But the point is: the whole experience of this national institution is that it has been very ineffective at listening to the people that it’s supposed to serve. If we take, for example, the nurses, the nurses have given up and withdrawn their—well, the nurses whom the Minister of Health refers to as speaking with a forked tongue, who are being disrespected by this Government from pillar to post. These same nurses have had to deal with the situation that the proposed curriculum hadn’t listened to the nurses, had disrespected them, and this institution has backed down. So we have yet more legislation coming into the House to fix this ongoing, slow-moving train wreck which is the national polytech situation, and I’d like to have some reassurance from the Minister that he’ll do a better job as a result of this legislation to listen to the communities that are being served.

I suppose what makes that relevant for people listening into this debate is that the polytechs were the first of the great nationalising expeditions of this Government. We also, of course, have three waters following next and the health reforms following it as well. We’ve seen, so far, complete calamity in the first, in regard to polytechs, and worse outcomes and worse financial outcomes and less listening to the local communities who are best placed to know what they want and what they had and what they would like to continue to have, and more dictates from Wellington about, you know, “This is what you will have.”, which is how this Government operates. So it would be nice to hear from the Minister to give us some reassurance that these qualifications that are talked about in Part 1 of this bill will have some relationship to what the local communities want and need, and how on earth this great clunking nationalistic bureaucracy that he’s created for the polytechs will be able to respond in a way that is appropriate.

Thank you, Mr Chair. Just a simple question to the Minister: how long will it take to approve an application for a licence, and how long will he wait to receive more than one application for a certain area?

I move, That the question be now put.

The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 162 be agreed to.

Amendments agreed to.

The question is that the Minister’s amendments to Part 1 set out on Supplementary Order Paper 178 be agreed to.

Amendments agreed to.

The question is that Erica Stanford’s tabled amendment to Part 1, amending new section 2(1) of clause 3A, be agreed to.

The question is that

The question is that