New Zealand Productivity Commission Act Repeal Bill

Well, thank you, Madam Speaker. I rise in support of this bill at its second reading.

💬 Hon Grant Robertson: Point of order, Madam Speaker. Far be it from me to help the Minister, but he’s got to move the second reading.

💬 DEPUTY SPEAKER: Oh, yes, I know; I was just going to actually take care of that. So have you got the words there to move the second reading?

Yes, I thank the member for his assistance. I move, That the New Zealand Productivity Commission Act Repeal Bill be now read a second time.

I have been listening very carefully, and I’ve got to say that if a competent Opposition is essential to democracy, then our country is in big, big trouble. I listened carefully to Duncan Webb, the lead critic on this file from the largest Opposition party, and what I got from him was that he thought that it was a contradiction to praise the work that has been done, to note that it will still be available, and yet decide there are better uses for the funding going forward. There is no contradiction. He said it was a contradiction, and several people echoed this, that it was an ACT Minister who introduced a policy and an ACT Minister who got rid of a policy. Well, let me just reflect on that for a second. There was someone, John Maynard Keynes, who said, “When the facts change, I change my mind.” I think it’s actually a good thing that politicians are allowed to change their mind. I think it would be a good thing—and I think, just giving a bit of free advice to the Opposition, if they want to be back in Government this decade, then they may actually need to change their mind about a few things they got wrong. So I don’t see it as a bad thing to change your position on a policy occasionally when the facts change. I think it’s highly revealing of the Opposition that they work themselves into a lather because someone’s done that. We believe the money can be better used for a ministry of regulation, and that is the policy that the Government is now undertaking.

I have to thank James Shaw for a much more constructive contribution. It’s certainly true that any policy can be improved over time. It’s certainly true that there was not a statutory requirement for the Government of the day to respond to Productivity Commission reports, and I agree with him: had there been, perhaps the reports might have got a little bit more coverage and attention. On the other hand, James Shaw was a Minister in a Government for six years—in fact, many of the people who have spoken tonight had six years to do exactly that thing. I thank them for making the contribution now, but it’s about six years too late.

I heard Grant Robertson echo that the set-up wasn’t perfect, but he actually didn’t say anything new that we hadn’t already heard from Duncan Webb. And then there was Ayesha Verrall, who I don’t think had anything particularly new to say other than a series of political attacks, but what she did manage to say is that there should be a regulatory impact statement on this bill. Well, let me be clear: one of the things I intend to do in this Government as the Minister for Regulation is make sure that regulatory impact analysis is focused on regulation that actually puts restrictions on the use and exchange of private property. There is no need to do regulatory impact analysis on the Government deciding it’s no longer going to operate and spend money on a department—

💬 Hon Dr Duncan Webb: Rubbish—Rubbish!

—because that is not affecting the use and exchange of private property out in the rest of the society. There’s Duncan Webb yelling and yelling away, and I suspect the reason that he is so angry is that while he cannot quite bring himself to say anything positive in this debate, he has to reflect on all the things he didn’t do in the fleeting chance that he himself had as a Minister. In fact, there was a little bit of that in Ayesha Verrall’s speech. I heard her make the bizarre accusation that the reason I want to establish the ministry of regulation is not because, you know, over-regulation, poorly made regulation, is one of the biggest challenges facing the New Zealand economy in people trying to work and produce each day; it’s because I want to “lord it over my predecessors.” There’s another person that is nice to quote from time to time, a guy called William Shakespeare. I think he would’ve said that she’s measuring the minds of others by her own. I think that comment probably tells us more about how Ayesha Verrall thinks about policy. It’s not because there’s serious problems we need to solve; it’s because we’re trying to get one over another politician. I thought that was a sad contribution.

I gave the rationale and the Government’s reasoning in my first reading speech. In this second reading speech, there having been no amendments at select committee, obviously, I’ve tried to respond to some of the contributions that have been made by the members opposite. I make these comments because I know that soon we’ll get to the committee of the whole House stage, and that will be to debate whether the wording of the bill reflects the policy decisions made on this second reading. The members opposite, if they have policy points to make, I highly recommend they make them in this reading where they failed in the first, because if they don’t have any good policy points to make in the second reading, we won’t be entertaining or replying to them. I can tell them I won’t be replying to them in the committee stage, because that has a very specific and technical reason.

💬 Hon Dr Duncan Webb: Arrogant!

💬 Hon Grant Robertson: What an arrogant man.

And they say, “How arrogant”—to actually read the Standing Orders and understand what each part of a debate is for! I mean, imagine that—reading the Standing Orders and understanding the place we’re a part of and actually following the rules! In fact, I would say that’s the opposite of arrogant. But I tell you what—I tell you what—it sure does make the Opposition angry. All I can say to the Opposition is: try being a little bit constructive, talking about the policy, talking about the bill, fewer of the personal attacks, and you might just finally get somewhere. Thank you, Madam Speaker.

Thank you, Madam Speaker. Well, the difficulty is that the policy of this bill is simply to disestablish a perfectly good agency.

💬 Hon David Seymour: Oh, the member can sit down then.

And here we have a member who stands on the hustings and talks about scrutiny and good law and good regulation and putting things through their paces and then doesn’t want to send this to a select committee, doesn’t want an examination of it, doesn’t want to hear from the public on it, doesn’t even want a regulatory impact statement on it. And, I mean, I’ve got to give him credit—he does seem to be running the show right now. He’s got his way with this, and he’s got his way with this ridiculous Treaty principles bill, and the Prime Minister’s all over the place trying to answer questions on it.

So it’s no wonder he’s looking smug, but the fact of the matter is that this is just a switcheroo. He’s got a vanity project called the ministry of regulation, and he’s gone into the coalition negotiations and said, “I want my ministry of regulation, and I want it now.”, and the Minister of Finance has said, “Well, we can’t pay for it. We’re going to have to take something away; we’ve got to put a line through something.” So they’ve done a dirty deal. They’ve said, “We’ll take away this little ACT vanity project and give you that ACT vanity project.” That is really what they’ve got. Because that’s what the ACT Party is—it’s a party of individuals. They’ve all got their little projects, their favourite little things, they want to achieve. And here we have it: this is David Seymour’s legacy—abolishing a perfectly good Crown agency that has evolved over time; that, by his own admission, is doing great work in helping us become more productive so that he can have a ministry of his own.

Now, that’s just one of the many reasons we won’t be supporting this bill, and, if Mr Seymour isn’t going to answer our questions in the committee stage, it could be a long night.

Thank you very much, Madam Speaker. I’m going to take the Hon David Seymour up on his challenge and make a couple of policy proposals based on what I heard in the first reading and in his debate contribution just now. He was extolling the virtues of changing one’s mind. So I’m going to suggest that perhaps he might want to take that advice and change his mind about the bill that we have in front of us here tonight.

Madam Speaker, I also would make a request of you. There is a proposal from the Government to establish a ministry of regulation and do regulation or some such. That is not for debate tonight. It is outside the scope of this bill. We shouldn’t be debating whether or not there should or should not be such a ministry. It is simply not on the Table here. So in terms of referring to the Standing Orders, I’m also going to ask the Minister to constrain the debate and his points in the debate to the merits or otherwise of the disestablishment of the Productivity Commission, because that is what this debate is about. That’s all that this involves—

💬 DEPUTY SPEAKER: Can I just say to the member: that basis is fine if everyone across the House wants to constrain themselves to the points that are in this piece of legislation; both ways.

Very well, Madam Speaker—

💬 DEPUTY SPEAKER: I’m not pointing—

No, no, I understand.

💬 DEPUTY SPEAKER: I’m not pointing to that particular member, because you’re doing well.

Thank you very much. Golly.

💬 Hon Grant Robertson: They only say that when you leave.

Indeed, indeed. My ears are burning. What I would like to say is there are a couple of points that were raised by the “Minister for disestablishing the commission”, one of which was perceived politicisation of the commission itself. There is quite an easy fix for that, and it is not just to appoint people who you think agree with you. It’s actually to change the governing legislation to establish an independent nominating committee such as that we have for the guardians of the super fund, or, frankly, for the Treasury board, or for the Climate Change Commission, and so on. It just creates a sort of arm’s length away from the Government in terms of those appointments.

So I would suggest to the Minister that, actually, given that this House is, it seems, universally agreed that the commission is a good thing and does good work, we should retain the commission. That’s point number one; and two, we should amend the governing legislation so that it has an independent nominating committee. The third proposal is one I floated earlier, which is that we also require the Government and Government agencies to respond specifically to the recommendations of the commission.

This is a proposal I made when I was a Minister in terms of the changes to the Environment Act, where the Parliamentary Commissioner for the Environment finds themselves in a similar situation, where they produce extremely good work, some of which, kind of gets legs and, you know, various Governments and parliaments run with it. But, actually, if there was a requirement upon the Government to have to respond within a reasonable time frame—say 12 months—to those reports, then you would actually get a proper policy response from within the Government to that work. So that would be my third point—to require a response.

Included in that, if a Government or if a Government agency disagrees with the Productivity Commission’s recommendation, is that they not just to say they disagree, or produce some kind of weasel words to kind of get out of it, but that they have to find a justification to say why they disagree, why they will not be adopting that or recommending to Ministers that they adopt that recommendation. I think if you were to take that package, you know, three or four simple reforms, then, actually, we would get a great deal more from the Productivity Commission, and that really good work would not go to waste.

So I think those would be the proposals that I would take forward within the constraints of this debate on this bill, which is whether or not to disestablish the Productivity Commission. Because as far as I can discern, everyone who has spoken in this House has extolled the virtues of the Productivity Commission, and thinks that it does good work. Whilst everyone seems to have expressed disappointment that some of their best work has fallen by the wayside because Governments, essentially, have ignored it, that is not an argument for getting rid of it. That is an argument for improving it, and making sure that Governments and parliaments have their feet held to the fire. We have very few independent think tanks in this Government which provide the sort of independent, thorough research that really assists the quality of debate. Ministries provide, you know, kind of their views and so on and so forth. But there are very few places that you can look to that are like the Productivity Commission, which will produce work which actually is inconvenient a lot of the time and does challenge Governments and the rest of the us to say, “Well, actually, have we got this right?”

To my earlier point from my first reading speech, sometimes those recommendations are about fundamental shifts in the economy. That includes things like shifts in our tax system and so on, which Governments don’t want to do because it is inconvenient for their voter bases and so on.

I think that’s important, that we can have that function as an important part of our democracy, and, actually, there aren’t very many other places in our governmental system where we can have that. So I do think, actually, on balance, that I would implore the Minister to change his mind, based on the fact that there is kind of universal support for the work of the Productivity Commission here, and that we say, “Actually, we’re going to continue that.”

I know that the response to all of this will be, “Well, actually, none of those arguments matter because we needed the money to do this other thing”. That is kind of a budgetary decision. But the amounts that we’re talking about, within the grand scheme of, you know, $120 billion - plus that the Government spends in any given year, this is, effectively, a rounding error. I would say that we should be able to walk and chew gum. If the Minister also wants a ministry of regulation, the effect of which, he suggests, will actually be to reduce Government spending, then the savings in Government spending that the new ministry is able to do should pay for itself, and shouldn’t require the disestablishment of the Productivity Commission to get going.

So those would be the main points I would say that we want to take into the rest of the debate, because I do worry that we are slipping into an era of Government where we don’t have facts and evidence available to us for debate. And I say “facts and evidence” quite specifically because that’s a quote drawn from the coalition agreements that pull this Government together. Both of those coalition agreements include reference to basing decisions on facts and evidence. The Productivity Commission has been one of the chief sources of facts and evidence, sometimes inconveniently so. If we weren’t to have it, it reduces the fact and evidence base for this Government to be able to do the work it says it wants to do in the coalition agreements that it has signed amongst the various parties that make it up.

So I do think that we should reject the bill and retain the Productivity Commission, but I do think we should do so with the intention to make those improvements. So when we do get to the next stage, as the Minister has asked, I’ll just repeat those policy proposals: (1) that we retain the Productivity Commission; (2) that we create an independent nominating committee to de-politicise appointments; (3) that we require the Government to respond to each of the recommendations within a reasonable time frame, including justifications for why the Government disagrees with any recommendations. That would enable us to have a high-quality institution which gets a great deal more traction than it has been able to over the course of the last 10 years or so.

Point of order, Madam Speaker. Thank you, Madam Speaker. I just want to raise a point of order in the context of the comments made by the Minister in his second reading speech and the view that he expressed around what members of the House need to do in a second reading in order for him, as the Minister in the chair, to respond during the committee of the whole House stage. The Standing Order that the Minister is referring to is Standing Order 310(1), which says—it’s quite brief, so I’ll read it out—“A committee of the whole House considers a bill to determine whether the bill properly incorporates the principles or objects of the bill as read a second time by the House.”

That Standing Order quite clearly simply refers to the state of the bill at the end of the second reading, not the second reading debate itself, as in the debate in the committee of the whole House will be about the bill as it looks at the end of the second reading, not what people said during the second reading. So you might want to take some advice on this, but I don’t think what Mr Seymour said is at all accurate, and I think that, actually, it’s important for the House that we get a very clear understanding of what that Standing Order means.

There is a relevant Speakers’ ruling as well, which is Speakers’ ruling 125/8 by Speaker Rurawhe and also Jacqui Dean as well, and that also speaks about the particular circumstances of a committee of the whole House stage when there has been no select committee process, at which point there has, in the past, been some leniency about what material is introduced. But my primary concern is that the way the Minister described what is allowed to be debated in the committee of the whole House stage is not what is in Standing Order 310(1).

Thank you for that point of order.

Speaking to the point of order—thank you, Madam Speaker. I fear that Grant Robertson may have mischaracterised my point, which is simply that the next stage—the committee stage—is a debate on whether the bill as passed at the second reading incorporates the principles and objects that were agreed at that reading. I make the point that if someone can’t be bothered bringing it up in the second reading, then you have to wonder if they’re sincere bringing it up in the committee stage.

Well, look, what I’m going to say at this stage is to go to the second part of your point of order first, and Speaker Dean’s ruling about the fact that there has been no select committee. We are in a different environment under urgency. I will take advice on your first point of order, and before the committee stage, I’ll make sure I come back to you. Thank you.

Madam Speaker, thank you for your patience. I would like to begin by commending the Hon James Shaw. I thought that was an excellent speech. I don’t agree with his conclusions, necessarily, but he raised some very interesting points. I’d also like to acknowledge that his standing down from the leadership of the Green Party—I mean, he’s actually made a significant contribution to this Parliament and to New Zealand politics. I think that needs to be acknowledged, and it will be at some point, but I got in first, so there you go. We haven’t always seen eye to eye on everything, James, but I do absolutely respect you, so I want to have that noted.

I do agree with a lot of things that the Hon James Shaw said. The problem we have had is that the Productivity Commission actually came up with some really good reports. It did a lot of good work over its years, and, as I said earlier, I have the highest respect for Murray Sherwin. But their problem is transferring those thoughts into actions and actually getting a result. I mean, if we want a good example of productivity, putting this bill to repeal the Productivity Commission through urgency is highly productive. We’re doing it all virtually very, very quickly. So that’s one example of productivity, but it’s not what we’re aiming to achieve.

But the regulations ministry—and I know that that is not what we’re debating, as the Hon Grant Robertson has said, but the reality is it is related. I remember very well in the term 2014-17, when Madam Deputy Speaker Kuriger and I entered Parliament, the Hon Grant Robertson would ask questions at question time focused on our poor GDP per capita—productivity, actually; our numbers—and they’ve not improved over time. It’s not just down to a Government; it’s been a long-term problem trying to get our productivity up. It’s actually something we all have to acknowledge, because we’re all part of it.

Earlier in the day, Miles Anderson gave his maiden speech, and he touched on the very issue about farmers, and how farmers are disenchanted with the world, and quite rightly so, because they’re being overwhelmed with paperwork. Now, that paperwork has a noble end, which is to ensure that the externalities that farming activity has are dealt with and minimised to the maximum potential for them to maintain their right to farm—their social licence to farm. I can’t disagree with that one little bit, and I don’t think anyone in this House would agree with it. The problem is that we’re actually plucking the goose so much that there’s the maximum amount of hissing rather than the minimum amount.

That’s a real problem for us, but it’s not only a problem for us. We’re seeing the same issue in France. At the moment, Paris is blockaded by tractors, which farmers have got in—

💬 Hon Dr Duncan Webb: Oh, come on! How is this about this bill?

This is productivity, Duncan Webb. France is being blockaded by tractors because farmers have had it up to here with the paperwork that they have to do to ensure that they can maintain their place in their society and get the subsidies, quite frankly, that enable them to survive.

We’re seeing the same thing in Germany, and it is also farmers, who are the lifeblood—and, actually, we have to go back to World War II. The lack of food during that period through the Second World War—and the First World War, of course, played a major part in that—led to the formation of the European Union. They wanted food security, and so they have ensured their food security by giving out subsidies to ensure that their farmers are financially viable.

Now, we can complain about that, and quite rightly so, because we’re actually badly impacted by that. When the British joined the EU, that had a significant impact on New Zealand’s economy, but they are building up their own lack of productivity in that sense. But this is a worldwide trend where costs are being added through needless bureaucracy. We need to get to the ends, so there’s a noble goal behind that sand in the gears that’s going into our economy. But it is such a restraint that it is demotivating people to enter farming, which is our major industry. In fact, most New Zealanders don’t realise how important farming and the primary sector is to their wealth and health, quite frankly, because there’s a very close relationship between GDP, life expectancy, and wellbeing, which, after all, seems to be a major driver from the other side of the House.

The UK is in a similar position. They also have their farmers up in arms over the same issues. It goes way beyond farming. It goes into every sector in New Zealand. I really have already had a contribution towards the Hon David Seymour with his ministry when my local council came to me with an issue about productivity and the regulations that are about to start on 1 February. The regulations state what councils must only and cannot pick up for kerbside recycling. We have a whole lot of waste that goes into productive enterprise that can be recycled, but they’re now allowed to pick it up at the kerbside, because that’s the regulation. It’s a crazy regulation. So we could get the Productivity Commission to write a report on that, and that would be great. I’m sure they would look at it from all sorts of angles, get a lot of information, and do a great job, but it wouldn’t change the regulation, and the regulation is the thing that’s causing the problem. The regulations ministry will have the opportunity to be able to look at those sorts of things and ensure that we actually get on top of the issues that are causing our lack of productivity.

There’s a lot of investment needed to generate productivity, as Catherine Wedd said earlier in the evening about the apple industry. Our apple industry is highly productive, and it could be more productive with more investment in new machinery, all sorts of—

💬 Catherine Wedd: With IP varieties, robotics.

Yes, varieties, and all the intellectual property (IP) involved in—actually, like the kiwifruit industry coming up with their own IP around new varieties that are more attractive to consumers, which is a great thing. But you could in fact breed new plant varieties that are less susceptible to diseases. Therefore, they’d be more productive, with lower costs and so on. But we don’t get that from the Productivity Commission; it has come from industry itself. So we’ve got to find new levers.

The lever of the Productivity Commission, as we’ve already shown, is not doing the job. They’re very good people, well intentioned—and agreement across the House. The honourable Minister, as I’ve said earlier—the former Minister the Hon Grant Robertson—was very passionate about our poor productivity for years, prior to becoming the Minister of Finance. We tried, he tried, and our productivity is well below our peers’, and we must get it up. There is no option, actually. If we don’t get it up, our best and brightest are going to leave our shores and go elsewhere, and we can’t have that. We’ve got to do our best to keep the best and brightest here. As it happens, we’ve retained a large number of them on this side of the House. So with that, I commend the bill to the House.

Just before I call the Hon Mark Patterson, I just want to clarify a point under Standing Order 310. The main point is that amendments to the bill are limited to the principles and objects determined at the second reading, so the Hon Grant Robertson is correct in that regard. Thank you.

New Zealand First to continue to support this New Zealand Productivity Commission Act Repeal Bill. I’m kind of listening to the crocodile tears across the aisle and, essentially, well, what is the Productivity Commission? Essentially, it’s an independent, statutory body that writes reports about productivity. I think the Minister’s made the case that we actually haven’t been actioning the reports that they have been producing, no matter how meritorious they may have been, and I think that’s the core thing here. We’re a Government of action; we want to actually put some of these reports and some of these recommendations—actually get some stuff done, and there is a repository of advice that sits there that we can refer to in our endeavours.

The other thing that has perplexed me a little bit about the protestations over the aisle is that we actually have a massive army of bureaucrats sitting in our—particularly Ministry of Business, Innovation and Enterprise; how many are in there now? There’s 6,500 fine, skilled, and capable New Zealanders over there, highly qualified, that give us exactly this advice. We have the capacity to do that within—and it’s free and frank. It is totally apolitical; they are free to give us exactly what advice they choose based on a very, very well-resourced bureaucracy over there. In my own capacity as the Minister for Rural Communities and as associate agriculture Minister, we have the Ministry for Primary Industries that also have significant capacity; some 3,500 people over there.

💬 Hon Scott Simpson: A lot of talent.

💬 Hon MARK PATTERSON: A lot of talent; a lot of very good people and I’ve enjoyed engaging with them. I’ve been learning about a lot of the work they’ve been doing, reading the reports. There’s some very good stuff in there. We do not lack the capacity to write reports. What we lack is the capacity to actually enact anything and get some productivity going, as Stuart Smith has just pointed out in his previous contribution. Our productivity is woefully lacking. It’s been an Achilles heel of this country for as long as I can remember following politics. It’s always been the thing that’s been wheeled out as being one of our impediments, and why we’ve continued to slide down the scale of OECD economies. It’s why we can’t deliver the Government services that we’d all like. We have to make some pretty hard choices, and we’re in the process of having to do that right now over on this side of the House. It’s because we’re not generating enough income as a country, so we’ve got to prioritise and make some fairly tough decisions, and that does come down to productivity, but that actually comes back to some action and acting on some of the advice that we’ve had in the past. Again, Stuart Smith—and Catherine Wedd, when she spoke—referred to the primary sector—

💬 Hon Scott Simpson: Backbone of the country.

💬 Hon MARK PATTERSON: —the backbone of the country—and just the absolute frustration at the regulation that is holding them back. They’re spending so much time in the office, and there’s uncertainty around what they’re going to have to do, rather than being actually out on their farms farming and putting up the fences and doing the riparian planting and the like.

💬 Hon Scott Simpson: Strangled by red tape.

💬 Hon MARK PATTERSON: They’re strangled by red tape, as the Hon Scott Simpson mentions beside me, and it is a real problem. We’ve had tractors in the street. We’ve had, as Miles Anderson of course pointed out in his maiden speech today, sentiment at an all-time low. And these are incredibly productive people. Actually, one of my favourite statistics from the agricultural sector—and as I might point out, National Lamb Day is coming up on 15 February. What an important industry that’s been for New Zealand, but the red meat sector has—we were at nearly 80 million sheep in the early 1980s; we’re down to about 25 million now, but the actual amount of red meat we’re producing from those sheep is actually very similar. That is productivity above and beyond almost any other sector in New Zealand, and it’s been done at a time when most of the best land has been converted to other land uses, either dairying or horticulture.

This is a sector that knows a lot about productivity; they know how to do productivity. What they can’t handle is the regulation and I think that’s what the honourable Minister is really trying to get to here, and I note that farming regulation is one of the higher priorities on his list. So they haven’t needed the Productivity Commission to tell them how to farm but they do need the Government to get out of the road in terms of the regulations. So New Zealand First does continue to support this bill and—

💬 Hon Member: For very good reasons.

💬 Hon MARK PATTERSON: For good reasons, and also, as a Government and as an incoming Minister, you’re not short of advice; not only the official advice and the excellent advice you get from your ministry, and obviously your constituents, but there’s an absolute platoon of economists and sector groups out there. There’s the unions, there’s a lot of information, there’s a lot of reports, there’s a lot of advice coming from different angles, from different sectors, from the NGOs, that side of things. So we’re not short of advice. What we’re short of is action and a clear pathway to cutting red tape and getting stuff done because we’re just not getting stuff done as a country. I think Miles Anderson made the point that the Clyde Dam was the last piece of major infrastructure in the region. So that’s the stuff that’s going to get this economy moving, that’s the stuff that’s going to grow our GDP, that’s the stuff that’s going to grow the tax take, that’s the stuff that means we’ll be able to deliver some of those extra public services that we know we want to do over time.

So we think this bill is eminently sensible. It’s taking out a group that has done some good work. Their work is going to be subsumed into the ministry of regulation under Minister Seymour, but there is inordinate capacity within the public sector to give us the advice, to look at various issues as they come up. I know we’ve got, I think, the Rt Hon Bill English looking at Kāinga Ora—Homes and Communities about why it costs something like $6,500 a square metre for them to build a house—a public house—when the private sector is doing it for about half of that. So we can still do those things; we’re not restrained in our capacity as a Government to pick issues to look at and to respond to.

So New Zealand First continues to support this bill and we look forward to the committee stage. Thank you.

Thank you, Madam Speaker.

💬 DEPUTY SPEAKER: Sorry, this is a split call.

Split call. Yes, thank you, Madam Speaker. It’s good to be able to take a call, and I’ve just sat through what I believe really encapsulates what this bill is about, and that was encapsulated in the speech by the Minister. I have never in my Public Service career or in my time in this House heard such an arrogant speech. It was an arrogant speech. And then I realised this is what the New Zealand Productivity Commission Act Repeal Bill is about. This bill is about control.

The Productivity Commission was set up to provide a high level of debate, which Bill English in 2010 did say. That was the whole point of the Productivity Commission. It wasn’t about implementing actions—that was very clear in the New Zealand Productivity Commission Act. It was about being able to provide a high-level debate. Since 2011, there has been a number of inquiries into different areas: housing, frontier firms. They’re currently in—or they were in the middle of an economy review. But what I heard in that second reading speech by this Minister is about controlling the evidence that’s coming towards him, because they didn’t want to have a high-level debate where the public could submit, or have a high-level debate where other experts and where sectors can come together and talk to an independent body—yes, funded by the Government but still very independent of the Government—to be able to provide evidence and reviews. So, for me, that only points to one thing, which is this Minister wants to control the evidence that is brought to him, because he can control it if it’s a department which he controls and which he’s the Minister for. The Productivity Commission was independent. This bill is all about control.

I do not support this bill, and that Minister needs to be aware he is no longer in Opposition. You are a Minister of the Crown. Take with that the responsibility. If you’re not even going to allow select committees any more—because it’s, again, another bill under urgency—provide the public the ability to submit so we can have high-level debate for intergenerational problems that are affecting our country. I do not support this bill, and I really, truly wish that the Minister could take the time to be able to absolutely have that debate, but he doesn’t want to because he wants to control this debate.

“Isn’t it ironic?” Sorry, Madam Speaker, but I am so reminded of the Alanis Morissette song listening to the debate in the House tonight—1996, for those of you who might not be as old as some of us in these chairs. It is so humorous, or it would be if it wasn’t for the implications of clause 11 of this bill, the New Zealand Productivity Commission Act Repeal Bill, and what it will do for the staff of the Productivity Commission.

The irony is that this commission was set up by the ACT Party, and now it is the ACT Party that actually want to disestablish it. And while they disestablish it, the ACT Party are singing its praises while taking a knife and committing hara-kiri to the very commission that they set up, and they’re doing this, ostensibly, to be able to fund a ministry of regulation. Now, I don’t put “the ACT Party” and “regulation” together normally in one sentence. For a libertarian party, it’s a strange dichotomy, and I actually wonder whether the ACT Party should be called the “hij-ACT Party” because they seem to have hijacked the Government agenda not only with the Treaty principles bill, but now with this bill—with 8 percent of the vote. So I do tip my hat to the Minister, David Seymour, for doing an incredible job as the de facto Leader of the Opposition.

When I think about “Why would they be doing this?”, there can be only one reason. As my learned colleague, the Hon Duncan Webb said, this is about a vanity project. It is about a Minister wanting to control a ministry so that he can have a legacy because he is not probably sure how long his time in this House will be, given that we will be election-ready in 18 months’ time. The Prime Minister needs to be held accountable for this. Because even though, tonight, all of the focus has been on David Seymour, at the end of the day, as Grant Robertson quite rightly said, it is the Prime Minister’s circus; it is the Prime Minister’s clowns. We cannot support this bill. We do not commend it to the House.

I support this bill. We’ve talked a lot about productivity tonight, and, you know, I’ve come from an industry—the horticulture sector in Hawke’s Bay—which is really, really driven by productivity. During my time in the past 10 years, I’ve really seen this industry grow hugely. We were targeting at one point to be a $1 billion industry. It was up around $900 million, back in 2017. But growers have just found it so tough in the past six years, with just so much regulation, red tape, compliance, cost—it’s been really, really difficult to grow. And I just want to touch on some points that you made, across the House, in relation to immigration, because immigration is a really, really important part of the horticulture sector. I want to touch on the Recognised Seasonal Employer scheme, because this is an incredible scheme where we see a lot of Pacific Island workers coming into Hawke’s Bay and across New Zealand every year, for up to three to six to nine months, where they help the industries and the communities and then they’re able to take the money that they earn back to the Pacific, and they build schools—

💬 Hon Dr Duncan Webb: I raise a point of order, Madam Speaker.

—and they build local water—

💬 DEPUTY SPEAKER: Just a moment. I’m just going to take Dr Duncan Webb’s point of order—I think I know what it is, and the speaker is coming to the point of the productivity—

Yes, and so this is—

💬 DEPUTY SPEAKER: Soon.

💬 Hon Dr Duncan Webb: I’ve heard about apples and I’ve heard about immigration, Madam Speaker. I’m yet to hear anything about a repeal bill.

💬 DEPUTY SPEAKER: Yeah, she’s coming to it.

Thank you very much for that point. What I’m doing is I’m building a picture here of what drives productivity in New Zealand, and it’s not a Productivity Commission that drives productivity; it’s actually supporting the food producers and the growers in our agriculture sector. As my colleagues here have already mentioned, that’s what’s going to drive productivity. So we do need to focus on our workforce, and we need to focus on those labour shortages and empowering some of these industries to drive productivity, which is, essentially, going to enable us to afford the public services that we desperately need. And so those are things like within the industries—[Interruption]

No, but it is actually relevant, because I do have here—I will alert my colleagues from across the House here—an actual Productivity Commission report that was actually a submission by New Zealand Apples & Pears. They were actually very, very disappointed with some of the reports that were written by the Productivity Commission. And to the point—I’m bringing it back to it. They talk in this report about how the New Zealand apple and pear industry is the most productive in the world, producing 61 tonnes per hectare in 2017. That’s 48 percent higher than our nearest competitor, South Africa—you know, 161 percent higher than the world average of 23.4 tonnes. So this actually all comes back to productivity. This is a submission here where they talk about the industry creating value through innovation, supported by well-paid, well-looked-after migrant workers who are also transforming their community, which is what I just did touch on. So that is the relevance of it.

But what happens here is the Productivity Commission is creating these reports and they’re creating some recommendations that don’t necessarily work in practice, on the ground, in the orchards, in the productive sector. So I’m saying that what would be more beneficial is that if we’re using those taxpayer dollars to fund certain organisations or areas, we would be better to focus on reducing regulation and reducing red tape, reducing a lot of the cost and compliance that our growers and our farmers and particularly our primary sector are facing at the moment. You know, it is really, really tough out there, and we need to support better infrastructure around that too. I mean, we need to look at ways that we can drive productivity on the ground. I would say that if we looked at, you know, water storage—I mean, water storage in Hawke’s Bay is a must. At the moment, we’re seeing our Hawke’s Bay Regional Council reducing the allocations of our water supply, and—

💬 DEPUTY SPEAKER: The bill—just bring it back to the bill.

Yeah, but I’m getting to the point of the productivity, because if we’re going to drive productivity, we need water, and, at the moment, we don’t have enough water. So it seems practical that we store the water in the winter so that we can use it in the summer, and the only way that we can do that is by creating water storage. So I think that this certainly needs to be a priority. This will be something that I certainly will be advocating for.

But there are other ways that we can improve productivity. I mean, just last week I was actually at the port of Napier, and it was just incredible to see the exports going through the port from forestry, from apples, from horticulture. We’re actually just about to start onions and squash in Hawke’s Bay as well. This is millions of dollars, and I suppose the more that we can add value to these products, the better. I suppose this, again, is driving productivity.

And so I think that we need to be smarter in the way that we drive productivity in this country, instead of wastefully spending money in bureaucracy in Wellington with people making rules at desks—and then we kind of find out, in the community and the real world, where we’ve got our gumboots on and we’re up the ladders in the orchards of Hawke’s Bay. It’s tough, and I think that the rules that are being made, we need to really focus on are these good rules or are they just creating more compliance than regulation. And so that’s why, if we focus on regulation and how much of it and where it’s being applied to, I think that our provincial New Zealand would certainly welcome a focus in this area rather than more reports and more bureaucracy and more recommendations, which don’t necessarily get quantifiable results. The National Party and on this side of the House, we’re all about results, we’re all about outcomes, and we’re all about driving productivity, and so this needs to be our focus. So I would definitely support us focusing on the key issues, which need to be reducing that red tape and reducing compliance—

💬 DEPUTY SPEAKER: And back, back, back to the bill.

—and ensuring that we’re focusing on the things that matter—

💬 DEPUTY SPEAKER: Would the member come back to the bill, please?

—and that’s looking at better infrastructure as well.

💬 DEPUTY SPEAKER: Back to the bill.

Back to the bill? OK.

💬 DEPUTY SPEAKER: The bill.

And so I absolutely commend this bill to the House.

For the benefit of the public at home, who must be bemused by the filibustering that’s going on by the coalition Government, that would be because their productivity isn’t that great and they’re not ready.

So what I’m going to do is cut to the chase here. This is a really serious issue because we have an economy that has been really built a long time ago on very low wages. And one of the things that happened in that time was that the ACT Party, in fact—the predecessor to David Seymour—proposed the Productivity Commission. And you could hear tonight some of the comments that were made about the scepticism over that.

But I, for one, have been very convinced by the work of the Productivity Commission. I have one report here. You can see it’s rather dog-eared—that’s because I read it. That’s because it’s really important to the work that I need to do in my portfolios, which includes the small business and manufacturing portfolios. And those are areas where we have woeful issues of productivity. We have a lot of little businesses. The average business size in New Zealand is less than four fulltime-equivalents.

💬 Stuart Smith: How many?

Less than four, Stuart—less than four. And we need those businesses to build up and we need them to be high wage. And we’re not going to do it through cups of tea and what we saw at the port; we’re going to do it through good evidence. That’s what we need. Not cups of tea, not what my nana would have told me at the rest home.

I would like to actually hear from people who know this stuff and can do deep dives, and that’s what our Productivity Commission was doing. It wasn’t following an ideology; it was independent. So it’s a tragedy to lose something that maybe we could have done better and strengthened. Maybe we could have listened to it more. It’s a tragedy to lose that for something that is, in fact, as many people have said tonight, a vanity project—and it’s one based on arrogance. Because in this situation, we have not even had a select committee look at this. We have not had any chance for the public to take part.

I suspect there are some people on the other side of the House who think that it is about a cup of tea. It’s what they learnt from the people who were their mentors in the 1980s and 1990s, and that’s all they have to do: just apply a paint by numbers approach. Well, it didn’t work. It’s meant we’ve got a low-wage economy—I’d like to see a stronger one. So I am very sad that we are looking at this repeal tonight, and I do not commend this bill to the House.

Thank you, Madam Speaker. We’ve heard a lot tonight about arrogance and control. I wonder: did the Productivity Commission ask the previous Government to bloat the Public Service? Did the Productivity Commission ask the previous Government to increase the jobseeker benefit by 66,000 over the last six years? Was that arrogance or control?

I might be new here, but I thought I heard the Hon James Shaw talk about a rounding error of circa $6 million. I’m not too good at my maths, but I’m pretty sure $6 million is more than a rounding error. He did make some good recommendations, though, and I’m sure Minister Seymour will be taking note. He mentioned things about amending the policy to inform the incoming Government, and they could maybe listen to those recommendations. I think that’s an incredibly good idea. I just wonder why he didn’t suggest it six years ago, when the Productivity Commission was already up and running.

A coalition Government established the Productivity Commission 13 years ago, and it was quite effective for a season. But that season has now passed. In the interest of productivity, it is actually now time to reset and innovate. We’ve been told that it’s ironic and arrogant, but I’d submit to you that it’s actually called leadership and humility.

Productivity is at the heart of this coalition agreement, and, indeed, a refocused ministry will have the tools to cut through red tape that the Productivity Commission didn’t, especially as the last Government didn’t really listen anyway. There’s a proverb that comes to mind: “hōhonu kakī, pāpaku uaua”—“long on words, short on action.” I think that sums up a lot of what we’ve seen over the previous few years.

We know that housing affordability is inextricably linked to productivity. What have we seen in the housing market over the last few years? Did the Productivity Commission say, “Remove the interest deductibility.”? What happened there? Did the Productivity Commission say, “Remove interest deductibility.”? Did that seem like a good idea? We’ve got more empty houses than we’ve ever had in New Zealand, and yet we’re in the middle of a housing crisis.

What would productivity look like from a policy-setting point of view? Let me give you a few good examples under the coalition’s going for housing growth example. We’ll remove rounding errors of $6 million—they don’t factor in.

💬 Hon Rachel Brooking: Getting rid of medium density, is that going to help?

What about—sorry, there’s a chirping noise going on from the other side there. Value capture—what about value capture and passing the benefit of when a rural property becomes into residential-zoned land and that value shifts, what about sharing some of that with first-home buyers or the housing market? That would be a great idea. What about housing growth that would provide enough residential-zoned land for the next 30 years? That would help housing affordability. What about allowing overseas investment to help our infrastructure deficit? That will unlock infrastructure and housing. Well, here’s a good idea: what about the infrastructure funding and financing legislation?

💬 Hon Grant Robertson: Point of order, Madam Speaker. I know the member has tried hard by starting each sentence by saying, “Did the Productivity Commission do X?” That, however, doesn’t make it relevant to the bill. I could see by the look on your face, Madam Speaker, that you were feeling the same way as I was about that.

💬 DEPUTY SPEAKER: I’ll be responsible for the look on my face, thank you. Look, the member was building the picture around other ways to do productivity as the reason for removing the bill. So as long as the member keeps coming back to the bill, my face will be fine.

Thank you, Madam Speaker. Just going back to the New Zealand Productivity Commission Act Repeal Bill, the infrastructure funding and financing legislation—the IFF—has been in place for some time, and yet the previous Government has done nothing with it. We can’t wait to unlock the infrastructure funding and financing that will undergird the housing and help productivity across New Zealand.

Let me finish with three good reasons why this is a good bill and I will be recommending it to the House. The coalition Government has started to work on the quality of regulation and on reducing Government spending and wastage as part of our 100-day plan. This includes identifying a preferred approach to the establishment of a new regulation agency, and we’ll be using the money that’s currently tied up in that Productivity Commission. So it’s using existing resources, not bringing new money to the table.

Two, part of the new ministry’s role will be to engage in a sector review that will identify the source of red tape that is contributing to poor productivity across New Zealand and Aotearoa, and propose omnibus legislation that will amend such statutes and repeal regulations. This will ensure the ministry has the tools to reduce red tape—tools that the Productivity Commission doesn’t have.

I know, thirdly and finally, that the residents of Hamilton East will be looking forward to better productivity—for example, a more efficient and productive roading network, such as Southern Links. I highly commend this bill to the House.

Thank you, Madam Speaker. I’m just taking the opportunity of a call in the second reading—

💬 DEPUTY SPEAKER: That is a split call. This is a split call?

💬 Hon Member: Yes.

💬 DEPUTY SPEAKER: Yes, it is.

Ah! It is. Fair enough. I’m taking the opportunity—I don’t know who I’m splitting it with, but that’s good. I might split it with myself. We’ll see how we go. But I did just want to take an opportunity in the second reading to raise the point that at this stage, we would normally be discussing what had been put up at select committee from the many members of the public who would have come forward and put in submissions about what they felt about the disestablishment of the Productivity Commission. I imagine we would have been overwhelmed at the Finance and Expenditure Committee by members of the ACT Party saying, “What are you doing, destroying this thing that Rodney Hide brought to Parliament?” They’d be coming and saying, “What’s going on here? We heard our leader, David Seymour, talk about all the great reports that the Productivity Commission had produced, and for some reason, there’s a piece of legislation here disestablishing it.” I think members of the public would have enjoyed that opportunity to come forward to this House and put their views on the table, but they are not being given the opportunity to do that.

I have heard many times, while I have been in this House, David Seymour rail about the use of urgency, and I do want to quote from him towards the end of 2020 when a bill was being passed in urgency. And he says the reason for urgency that was given by the Leader of the House on this legislation is, “Well, we campaigned on it, and we want to do it really quickly.” So forget checks and balances and forget the right of the public to have a say; it’s another case of “We won. You lost. Eat that!”

So adding to the layers of irony and hypocrisy that have been present in the House tonight is the Minister in charge of this bill—who used to rail about the use of urgency, who used to tell us it was undemocratic not to give the public a say—here tonight with a silly and sad piece of legislation that he hasn’t even sought to justify. If we take the Hon James Shaw’s guidance here, this is a bill about disestablishing the Productivity Commission. All we’ve heard from around the House tonight is that the Productivity Commission is a good body that’s done some good things. Mr Shaw has offered up some ideas about how it could be changed. Those are indeed the kinds of things that could have been considered at a select committee when we had this bill. Is it time to change the way the commissioners are appointed? Is it time to change the way in which the Government has to respond to a Productivity Commission report? What other ways could we engage? When this was first done, there was a lot of talk about engaging with Australia and the Australian Productivity Commission, doing joint inquiries. Why haven’t we done that? What could we do to facilitate more work in that area? All of those options—ironically, the kind of thing that you might see in a regulatory impact statement if there had been a regulatory impact statement for this bill—are not here at all.

The only other point I really want to make in the second reading speech is the false equivalence of the Productivity Commission’s work and the work of a ministry of regulation. The idea that, somehow or other, one is an automatic replacement for the other is utterly ridiculous. There may well be a case for a ministry of regulation; I look forward to hearing it made by Mr Seymour at some point. But the case for the Productivity Commission is actually about big-picture thinking. It’s about grabbing the big ideas and talking about how we can then translate those into things that improve productivity.

Actually, on a serious point—and this was a point made in the first reading; I think, it may have been by Mark Patterson—every Government in New Zealand has faced the productivity challenges that New Zealand has, and we’ve all worked to try to improve them, and we all continue to do that. To have an institution that actually supports that conversation, provides the big-picture issues, gives people an opportunity to input on that, and gives its thoughts and recommendations to the Government is a different job than a ministry of regulation. It’s a different job than the Ministry for Primary Industries. And the fact that the ACT Party are prepared to trade that away for the vanity project that is the ministry of regulation that David Seymour has put forward is indeed very sad.

It’s a real thrill to follow my fellow Otago graduate, the Hon Grant Robertson—proud Otago University Students’ Association alumni, passionate about Otago University, and I hope, with the spare time he’s got on his hands now, he spends a lot more time down there this year.

Madam Speaker, as this is my first contribution on a bill in this House, can I just give you my heartfelt congratulations on your ascension as a Speaker in this House. Can I acknowledge Minister Seymour for bringing this bill to the House. As a member of what we like to call the powerful Regulations Review Committee, I look forward to the Minister’s focus on fewer, more high-quality regulations for us to review. And can I just acknowledge the Hon James Shaw, a fellow James in the House, for his service to this House. I wish him well, but I do note, speaking of irony, the irony in the phrase “neo-liberal stalking horse”, which is, of course, how many of his critics have described his membership in the Greens over the years.

The fine people of my electorate, Rangitata—the best, beautiful, and most productive electorate in this country—do not need a Wellington bureaucracy to tell them how to work smarter and more efficiently. This is an electorate where, in South Canterbury, 1.2 percent of the country’s population produces 7.3 percent of our food and fibre exports. That is productivity. It’s not the State that is the key to solving our productivity problems; it is people like my friend and my neighbour Miles Anderson, who many of us have spoken about tonight, the member for Waitaki, who himself took a punt on sheep scanning technology, and 4 million - odd sheep later the productivity gains in this sector speak for themselves.

If members opposite were so concerned about productivity, why did they spend six years strangling the most productive part of our economy? Consultants’ and lawyers’ fees don’t pay the bills, I’m afraid; it’s what we make, it’s what we produce, it’s what we grow, and what we sell to the world that pays the bills. If members want to know how we improve productivity without a Productivity Commission, you can go to www.national.org.nz/national_act_and_new_zealand_first_to_deliver_for_all_new_zealanders, scroll down to the bottom of the page, and check out the National and ACT agreements and the National—

💬 DEPUTY SPEAKER: And now the bill.

—and New Zealand First agreements. There you will see the actions that this Government is taking in lieu of a Productivity Commission, actions like reforming the Commerce Act market studies to reduce barriers to competition. They are the things that stifle productivity in this country. It’s not the report writing from the Productivity Commission, it’s not the Wellington bureaucracies that write the reports, the 89-page report that was written in October and produced last year—and nothing happens to any of those reports. It’s things like rewriting the Credit Contracts and Consumer Finance Act, the CCCFA—an Act which has its own acronym and is either incredibly popular or incredibly unpopular, and I’ll let members opposite make the decision for themselves.

This is a Government that stands for action in this area. This is a Minister who is focused on improving productivity in this country, and when we look at what this repeal bill does, it is a very simple bill. It is a very straightforward, simple bill. It takes what was originally a decent, good, well-intended idea which unfortunately has run its course. The Productivity Commission was built with all the best intentions in the world, but report after report, Government after Government—struggle to see what we could get from those reports that is going to actually make this country tick, what’s going to make the boat run faster.

I can tell you what’s going to make the boat run faster: it’s New Zealanders. It’s the people running our farms, it’s people running our businesses, it’s the hard-working people of the Rangitata electorate, it’s the people who struggle with things like the former Resource Management Act (RMA) and the now-repealed Natural and Built Environment Act.

💬 Hon Rachel Brooking: Now RMA—we’re just back to the RMA, James Meager.

The member opposite says we’re back to the RMA. Well, not for long, because this is a Government of action. This is a Government that’s getting this country back on track. We will be introducing legislation which respects property rights and which allows New Zealanders to get on with the job of building businesses without unproductive and unnecessary regulation. We are going to allow New Zealanders to live in an environment and work in an environment where our regulations are sensible and reasonable and where we all get on together as one people. I commend this bill to the House, and I thank the members for their contributions.

The question is—

💬 Joseph Mooney: Madam Speaker?

I’ve actually started taking the vote—

💬 Hon Dr Duncan Webb: Point of order. The vote had begun?

Yes, that’s what I just said.

💬 Hon Dr Duncan Webb: OK.

Yes. Thank you.

This bill is set down for committee stage immediately. I declare the House in committee for consideration of the New Zealand Productivity Commission Act Repeal Bill.

In Committee

Part 1 Preliminary provisions