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Reports of select committees on the 2018/19 annual reviews of Government departments, Offices of Parliament, Crown entities, public organisations, and State enterprises

Volume 2

Health Sector Justice Sector Māori, Other Populations and Cultural Sector Primary Sector Social Development and Housing Sector

Fifty-second Parliament April 2020

Presented to the House of Representatives I.20E

Contents

Crown entity/public Select Committee Date presented Page organisation/State enterprise

Financial Statements of the Finance and Expenditure 19 Mar 2020 13 Government of for the year ended 30 June 2019 Economic Development and Infrastructure Sector

Accident Compensation Education and Workforce Not yet reported Corporation

Accreditation Council Economic Development, 27 Mar 2020 24 Science and Innovation AgResearch Limited Economic Development, 10 Mar 2020 25 Science and Innovation Limited Transport and Infrastructure 25 Mar 2020 31

Airways Corporation of New Transport and Infrastructure 24 Mar 2020 38 Zealand Limited

Callaghan Innovation Economic Development, 26 Mar 2020 39 Science and Innovation City Rail Link Limited Transport and Infrastructure 25 Mar 2020 47

Civil Aviation Authority of New Transport and Infrastructure 26 Mar 2020 54 Zealand

Commerce Commission Economic Development, 27 Mar 2020 60 Science and Innovation

Crown Infrastructure Partners Transport and Infrastructure 31 Mar 2020 68 Limited

Earthquake Commission Governance and 13 Mar 2020 74 Administration

Electricity Authority Transport and Infrastructure 24 Mar 2020 75

Electricity Corporation of New Transport and Infrastructure 24 Mar 2020 75 Zealand Limited

Genesis Energy Limited Transport and Infrastructure 24 Mar 2020 75

KiwiRail Holdings Limited Transport and Infrastructure 31 Mar 2020 76 I.20E

Crown entity/public Select Committee Date presented Page organisation/State enterprise

Kordia Group Limited Economic Development, 27 Mar 2020 82 Science and Innovation

Maritime New Zealand Transport and Infrastructure 24 Mar 2020 38

Mercury NZ Limited Transport and Infrastructure 24 Mar 2020 75

Meridian Energy Limited Transport and Infrastructure 24 Mar 2020 75

Meteorological Service of New Economic Development, 26 Mar 2020 83 Zealand Limited (MetService) Science and Innovation

Ministry of Business, Innovation Economic Development, Not yet reported and Employment Science and Innovation

Ministry of Transport Transport and Infrastructure 31 Mar 2020 88

New Zealand Post Limited Economic Development, 26 Mar 2020 95 Science and Innovation New Zealand Productivity Economic Development, 27 Mar 2020 103 Commission Science and Innovation New Zealand Railways Corporation Transport and Infrastructure 31 Mar 2020 76 New Zealand Tourism Board Economic Development, 10 Mar 2020 104 Science and Innovation New Zealand Trade and Enterprise Economic Development, 26 Mar 2020 110 Science and Innovation New Zealand Transport Agency Transport and Infrastructure 23 Mar 2020 116 New Zealand Venture Investment Economic Development, 27 Mar 2020 82 Fund Limited Science and Innovation Takeovers Panel Economic Development, 27 Mar 2020 24 Science and Innovation Te Kāhui Whakamana Rua Tekau Finance and Expenditure 13 Mar 2020 127 mā Iwa — Pike River Recovery Agency Transport Accident Investigation Transport and Infrastructure 24 Mar 2020 38 Commission Transpower New Zealand Limited Transport and Infrastructure 24 Mar 2020 38 WorkSafe New Zealand Education and Workforce Not yet reported

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Education Sector Education New Zealand Education and Workforce Not yet reported Education Payroll Limited Education and Workforce Not yet reported Education Review Office Education and Workforce 9 Mar 2020 132 Institute of Environmental Science Economic Development, 27 Mar 2020 139 and Research Limited (ESR) Science and Innovation Institute of Geological and Nuclear Economic Development, 27 Mar 2020 139 Sciences Limited (GNS Science) Science and Innovation Landcare Research New Zealand Economic Development, 27 Mar 2020 140 Limited (Manaaki Whenua) Science and Innovation Ministry of Education Education and Workforce Not yet reported National Institute of Water and Economic Development, 26 Mar 2020 141 Atmospheric Research Limited Science and Innovation (NIWA) Network for Learning Limited Education and Workforce Not yet reported New Zealand Forest Research Economic Development, 27 Mar 2020 139 Institute Limited (trading as Science and Innovation Scion) New Zealand Institute for Plant and Economic Development, 27 Mar 2020 140 Food Research Limited Science and Innovation New Zealand Qualifications Education and Workforce Not yet reported Authority Research and Education Advanced Economic Development, 27 Mar 2020 82 Network New Zealand Limited Science and Innovation (REANNZ) Tertiary Education Commission Education and Workforce Not yet reported

Environment Sector Department of Conservation Environment 25 Feb 2020 146 Energy Efficiency and Environment 1 Apr 2020 153 Conservation Authority Environmental Protection Authority Environment 31 Mar 2020 154 Ministry for the Environment Environment 1 Apr 2020 159 New Zealand Walking Access Environment 1 Apr 2020 153 Commission Parliamentary Commissioner for Environment 1 Apr 2020 153 the Environment Predator Free 2050 Limited Environment 31 Mar 2020 166

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External Sector Ministry of Defence Foreign Affairs, Defence and 6 Mar 2020 171 Trade Ministry of Foreign Affairs and Foreign Affairs, Defence and 6 Mar 2020 181 Trade Trade New Zealand Customs Service Foreign Affairs, Defence and 14 Feb 2020 192 Trade New Zealand Defence Force Foreign Affairs, Defence and 6 Mar 2020 171 Trade New Zealand Antarctic Institute Foreign Affairs, Defence and 20 Mar 2020 200 Trade

Finance and Government Administration Sector Crown Asset Management Limited Finance and Expenditure 21 Feb 2020 206 Department of Internal Affairs Governance and 13 Mar 2020 207 Administration Department of the Prime Minister Governance and 13 Mar 2020 215 and Cabinet Administration External Reporting Board Economic Development, 27 Mar 2020 24 Science and Innovation

Financial Markets Authority Economic Development, 26 Mar 2020 221 Science and Innovation

Fire and Emergency New Zealand Governance and 13 Mar 2020 229 Administration

Government Communications Intelligence and Security 14 Feb 2020 234 Security Bureau Committee Government Superannuation Fund Finance and Expenditure 21 Feb 2020 206 Authority Guardians of New Zealand Finance and Expenditure 19 Mar 2020 235 Superannuation Inland Revenue Department Finance and Expenditure 6 Mar 2020 244 New Zealand Security Intelligence Intelligence and Security 14 Feb 2020 252 Service Committee Office of the Clerk of the House of Governance and 13 Mar 2020 253 Representatives Administration Office of the Controller and Auditor- Finance and Expenditure 21 Feb 2020 206 General Office of the Ombudsman Governance and 13 Mar 2020 261 Administration Parliamentary Service Governance and 13 Mar 2020 253 Administration Reserve Finance and Expenditure 19 Mar 2020 267 Retirement Commissioner Finance and Expenditure 21 Feb 2020 206 I.20E

Southern Response Earthquake Governance and 13 Mar 2020 276 Services Limited Administration State Services Commission Governance and 13 Mar 2020 282 Administration Statistics New Zealand Governance and 13 Mar 2020 287 Administration The Treasury Finance and Expenditure 19 Mar 2020 13 Volume 2:

Health Sector Health 25 Mar 2020 293 District Health Board Health 24 Mar 2020 303 Canterbury District Health Board Health 31 Mar 2020 304 Capital and Coast District Health Health 24 Mar 2020 303 Board Counties Manukau District Health Health 25 Mar 2020 293 Board Hawkes Bay District Health Board Health 24 Mar 2020 303 Health and Disability Commissioner Health 20 Mar 2020 315 Health Promotion Agency Health 20 Mar 2020 320 Health Quality and Safety Health 24 Mar 2020 325 Commission Health Research Council of New Health 24 Mar 2020 325 Zealand Hutt Valley District Health Board Health 24 Mar 2020 303 Lakes District Health Board Health 24 Mar 2020 326 MidCentral District Health Board Health 24 Mar 2020 326 Ministry of Health Health 12 Mar 2020 327 Nelson Marlborough District Health Health 31 Mar 2020 304 Board Northland District Health Board Health 24 Mar 2020 326 New Zealand Blood Service Health 24 Mar 2020 325 Pharmaceutical Management Health 25 Mar 2020 336 Agency () South Canterbury District Health Health 24 Mar 2020 326 Board Southern District Health Board Health 24 Mar 2020 345 Tairāwhiti District Health Board Health 24 Mar 2020 351 District Health Board Health 24 Mar 2020 351 District Health Board Health 24 Mar 2020 352 Wairarapa District Health Board Health 24 Mar 2020 351 Waitemata District Health Board Health 25 Mar 2020 293 West Coast District Health Board Health 31 Mar 2020 304 District Health Board Health 26 Mar 2020 359 I.20E

Justice Sector Abortion Supervisory Committee Justice 9 Mar 2020 365 Crown Law Office Justice 13 Mar 2020 366 Department of Corrections Justice 13 Mar 2020 372 Electoral Commission Justice 13 Mar 2020 380 Human Rights Commission Justice 9 Mar 2020 387 Independent Police Conduct Justice 9 Mar 2020 393 Authority Law Commission Justice 9 Mar 2020 365 Ministry of Justice Justice 9 Mar 2020 399 New Zealand Police Justice 9 Mar 2020 407 Office of the Judicial Conduct Justice 9 Mar 2020 414 Commissioner Parliamentary Counsel Office Justice 9 Mar 2020 365 Privacy Commissioner Justice 13 Mar 2020 419 Public Trust Economic Development, 27 Mar 2020 425 Science and Innovation Real Estate Agents Authority Economic Development, 27 Mar 2020 425 Science and Innovation Serious Fraud Office Justice 9 Mar 2020 426

Māori, Other Populations and Cultural Sector Arts Council of New Zealand Toi Social Services and 9 March 2020 431 Aotearoa Community Broadcasting Commission (NZ On Economic Development, 25 Mar 2020 432 Air) Science and Innovation Broadcasting Standards Authority Economic Development, 26 Mar 2020 438 Science and Innovation Drug Free Sport New Zealand Social Services and 20 Mar 2020 443 Community Heritage New Zealand (Pouhere Social Services and 9 Mar 2020 431 Taonga) Community Māori Television Service (Te Māori Affairs 26 Mar 2020 448 Aratuku Whakaata Irirangi Māori) Ministry for Culture and Heritage Social Services and 25 Mar 2020 461 Community Ministry for Pacific Peoples Social Services and 16 Mar 2020 468 Community Social Services and 9 March 2020 431 Community Museum of New Zealand Te Papa Social Services and 9 Mar 2020 476 Tongarewa Board Community New Zealand Film Commission Social Services and 9 Mar 2020 482 Community I.20E

New Zealand Lotteries Commission Social Services and 9 Mar 2020 488 Community New Zealand Symphony Orchestra Social Services and 26 Feb 2020 489 Community Office of Film and Literature Social Services and 20 Mar 2020 495 Classification Community Limited Economic Development, 27 Mar 2020 502 Science and Innovation Sport and Recreation New Zealand Social Services and 9 Mar 2020 488 Community Television New Zealand Limited Economic Development, 2 Apr 2020 511 Science and Innovation Te Puni Kōkiri (Ministry of Māori Māori Affairs 6 Apr 2020 518 Development)

Te Reo Whakapuaki Irirangi (Māori Māori Affairs 26 Mar 2020 528 Broadcasting Funding Agency, also known as Te Māngai Paho) Te Taura Whiri I Te Reo Māori Māori Affairs 9 Apr 2020 542 (Māori Language Commission)

Primary Sector Animal Control Products Limited Primary Production 5 Mar 2020 551 AsureQuality Limited Primary Production 23 Mar 2020 552 Crown Irrigation Investments Primary Production 5 Mar 2020 551 Limited Land Information New Zealand Primary Production 24 Mar 2020 558 Landcorp Farming Limited Primary Production 23 Mar 2020 564 Ministry for Primary Industries Primary Production 23 Mar 2020 572 Quotable Value Limited Primary Production 23 Mar 2020 583

Social Development and Housing Sector Children’s Commissioner Social Services and 9 March 2020 431 Community Housing New Zealand Corporation Social Services and 20 Mar 2020 588 Community Ministry of Housing and Urban Social Services and 9 Mar 2020 595 Development Community Ministry of Social Development Social Services and 9 Mar 2020 602 Community Oranga Tamariki – Ministry for Social Services and 26 Feb 2020 609 Children Community New Zealand Artificial Limb Service Social Services and 9 Mar 2020 488 Community Ōtākaro Limited Governance and 13 Mar 2020 616 Administration Committee I.20E

Social Investment Agency Social Services and 20 Mar 2020 621 Community Social Workers Registration Board Social Services and 20 Mar 2020 628 Community Tāmaki Redevelopment Company Social Services and 20 Mar 2020 634 Limited Community

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Introduction

This is a compendium of select committee reports on the 2018/19 annual reviews of Government departments, Offices of Parliament, Crown entities, public organisations, and State enterprises. It contains all the reports that had been presented to the House by 27 April 2020.

Some reports were unable to be presented by this date, largely because of the disruption caused by COVID-19. They are noted in the Table of Contents, and will be available on the Parliament website when finalised. About this compendium The compendium has been structured to reflect the organisation of the Estimates of appropriations into 10 sector groupings.

Reports on the annual reviews of security agencies, conducted by the Intelligence and Security Committee, are included in the compendium for ease of reference (under the Finance and Government Administration Sector).

The Finance and Expenditure Committee’s report on the annual financial statements of the Government for the year ended 30 June 2019 is debated separately and so is listed separately from the sector groupings. Consideration of reports by the House The annual review reports are considered in the House during the committee stage of the Appropriation (2018/19 Confirmation and Validation) Bill. The debate also provides an opportunity for debate on the Government’s financial position.

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2018/19 Annual review of the Auckland District Health Board 2018/19 Annual review of the Counties Manukau District Health Board 2018/19 Annual review of the Waitematā District Health Board

Report of the Health Committee

March 2020

Contents Recommendation ...... 2 Joint hearing on these three district health boards ...... 2 About the Auckland region district health boards ...... 2 Financial overview and audit opinions ...... 3 Holidays Act liabilities ...... 4 Collaboration between DHBs ...... 5 Hospital infrastructure ...... 5 Workforce ...... 5 Health inequities ...... 6 Measles outbreak ...... 7 Obesity ...... 8 Whakaari / White Island eruption ...... 8 Care for older New Zealanders ...... 9 Pricing for inter-district flow ...... 9 The Waitematā DHB’s savings plan ...... 9 Appendix ...... 10

Louisa Wall Chairperson 294

2018/19 ANNUAL REVIEWS OF THE AUCKLAND, COUNTIES MANUKAU, AND WAITEMATĀ DHBS

Auckland District Health Board, Counties Manukau District Health Board, and Waitematā District Health Board

Recommendation The Health Committee has conducted the annual reviews of the Auckland District Health Board, the Counties Manukau District Health Board, and the Waitematā District Health Board for 2018/19, and recommends that the House take note of its report.

Joint hearing on these three district health boards The Auckland District Health Board (DHB), the Counties Manukau DHB, and the Waitematā DHB serve the needs of people in the Auckland region. We chose to hear from the three DHBs together because of their geographic proximity and close relationships. We understand that the three DHBs frequently collaborate on health issues facing the Auckland population.

About the Auckland region district health boards Each of the three DHBs is a Crown entity with responsibilities under the New Zealand Public Health and Disability Act 2000 for the health of the people in their respective districts.

About the Auckland DHB The Auckland DHB is the fourth largest DHB by population, serving about 542,000 people. Its population tends to be younger than the national average, with about 61 percent under the age of 40. The DHB has higher Pacific and Asian populations than the national average; 10 percent and 34 percent respectively, compared with the national average of 6 percent and 15 percent.

The Auckland DHB employed 11,363 people in 2018/19. Its chair is Pat Snedden and its chief executive is Dr Ailsa Claire.

About the Counties Manukau DHB The Counties Manukau DHB serves a population of 569,000. It has New Zealand’s second largest Māori population (16 percent) and the largest Pacific population (21 percent)—37 percent of the total Pacific population in New Zealand. The Asian population makes up 27 percent of the district. About 40 percent of the population were born overseas.

The Counties Manukau DHB has a high proportion of people in the most deprived section of the population.

The Counties Manukau DHB employed 7,410 full-time-equivalent staff as at the end of the 2018/19 year. Its chair is Vui Mark Gosche and its chief executive is Fepulea’i Margie Apa.

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About the Waitematā DHB The Waitematā DHB is the largest DHB by population, serving about 627,000 people. It has relatively few people in the most deprived section of the population and a high proportion of people in the least deprived section.

The Waitematā DHB employed 7,412 people in 2018/19. Its chair is Professor Judy McGregor and its chief executive is Dr Dale Bramley.

Financial overview and audit opinions Non-standard audit reports The Auditor-General issued non-standard audit reports for the financial statements of all three DHBs. This was due to the high level of uncertainty about the provisions that the DHBs had made to address the underpayments to their staff as a result of non-compliance with the Holidays Act 2003.

The Auditor-General noted that if the DHBs were required to settle their Holidays Act liabilities within one year of signing the 2018/19 financial year statements, they would require additional support from the Crown. For this reason, the DHBs sought and were provided with letters of comfort from the Ministers of Finance and Health.

We discuss the deficits attributed to this non-compliance in our section about Holidays Act liabilities.

Auckland District Health Board In 2018/19 the Auckland DHB’s revenue was $2.341 billion and its expenditure was $2.574 billion. This resulted in a deficit of $232 million. Of this deficit, $211.7 million related to non- compliance with the Holidays Act and $4.3 million related to the impairment of the intangible asset relating to the finance procurement and information management (FPIM) system.

The Auditor-General rated the Auckland DHB’s management control environment, and financial information and supporting systems and controls as “good”. He recommended some improvements in both areas. He rated the DHB’s performance information and supporting systems and controls as “very good” and made no recommendations for improvement.

Counties Manukau District Health Board In 2018/19 the Counties Manukau DHB’s revenue was $1.747 billion and its expenditure was $1.9 billion. This resulted in a deficit of $153 million. Excluding the Holidays Act costs of $105.9 million, its deficit was $47.7 million, which is less than the budgeted deficit of $53 million.

The Auditor-General rated the Counties Manukau DHB’s management control environment, financial information and supporting systems and controls, and its performance information and supporting systems and controls as “good”. He made recommendations for improvements in all three areas.

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2018/19 ANNUAL REVIEWS OF THE AUCKLAND, COUNTIES MANUKAU, AND WAITEMATĀ DHBS

Waitematā District Health Board In 2018/19 the Waitematā DHB’s revenue was $1.840 billion and its expenditure was $1.966 billion. This resulted in a deficit of $126 million, of which $114.3 million related to non- compliance with the Holidays Act. The Auditor-General noted that the Waitematā DHB is forecasting a breakeven position for 2019/20. This relies on the DHB achieving a savings target of $30 million. By September 2019, $26 million of savings had yet to be identified.

The Auditor-General rated the Waitematā DHB’s management control environment, and financial information and supporting systems and controls as “good”. He recommended some improvements in both areas. The Auditor-General rated the DHB’s performance information and supporting systems and controls as “very good” and made no recommendations for improvement.

Holidays Act liabilities Most of the deficits for the Auckland region DHBs can be attributed to non-compliance with the Holidays Act:

 $211.7 million of a $232 million deficit for the Auckland DHB  $105.9 million of a $153 million deficit for the Counties Manukau DHB  $114.3 million of a $126.3 million deficit for the Waitematā DHB. We note that the Auditor-General is not sufficiently satisfied with the accuracy of those estimates to provide an unqualified opinion on the DHBs’ financial statements. The DHBs said they were unable to get the information to the auditors quickly enough due to the complexity of calculating the Holidays Act liabilities.

Given these complexities, we asked whether the DHBs discussed with the labour inspectorate whether it could use a more straightforward averaging process that would pay people greater than the minimum required amount. The DHBs said it was decided nationally not to do this. They believed doing so would not be workable because everyone would have the right to ask for the amount to be recalculated. The DHBs noted that it was also important to work through the complexities to get things right for the future.

We expressed concern that these compliance issues were not raised earlier. We note that advice to the previous Minister of Health stated that there would be some marginal issues relating to Holidays Act compliance. However, there would be no need to provide for contingent liabilities.

The Auckland DHB said that the advice given to the previous Minister noted that the DHB had been audited by the Ministry of Business, Innovation and Employment and the labour inspectorate in 2015. Based on these audits, areas of non-compliance had been assessed as being $6.9 million. The Auckland DHB said that the interpretation and understanding of the Act had changed significantly since 2015.

The Auckland and Waitematā DHBs told us that they intend to address any non-compliance with the Holidays Act by February 2021. Counties Manukau DHB intends to address these issues by April 2021.

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2018/19 ANNUAL REVIEWS OF THE AUCKLAND, COUNTIES MANUKAU, AND WAITEMATĀ DHBS

Collaboration between DHBs We heard about the collaboration between the three DHBs in the Auckland region and the Northland DHB. These DHBs share services and information and often send patients between their districts. The DHBs are also working together on a long-term health plan, which is a first for DHBs in New Zealand.

We were pleased to hear about the collaborative nature that the DHBs are engaging in and hope to see more DHBs following this example in the future.

Hospital infrastructure All three DHBs expressed their gratitude for the recent investment in new facilities. These investments are to help meet the growing population, and therefore demand for DHB services, in the Auckland region. However, they said that the region will need continued investment to meet the demand in the future. The DHBs told us that the capital they need is not only for buildings and facilities, but also for IT and clinical equipment.

We note that much of the infrastructure at the Auckland region DHBs has reached the end of its natural life. We asked the DHBs how they were dealing with balancing the refurbishment of their facilities with planning and investing for growth in the region. The DHBs mentioned that both had to be done at once: fixing the existing infrastructure, while adding additional capacity.

We heard that the Auckland DHB has a $500 million infrastructure programme and the Waitematā DHB has $400 million in new capital programmes. The Counties Manukau DHB also has very significant infrastructure and development programmes. The DHBs said that managing these projects, while still providing business-as-usual services in the health system, has been challenging. Outbreaks of various diseases and industrial action have added a layer of complexity.

Workforce The DHBs told us that they need a larger workforce across the region to meet the growing demand for services. We heard that workers cannot afford to live in metropolitan Auckland.

Effect of multi-employer collective agreements The multi-employer collective agreements (MECAs) signed between DHBs and unions affected personnel costs for all three DHBs for 2018/19. We note that the actual personnel costs for DHBs were higher than the amount appropriated.1 We were told that the difference between the appropriation and actual costs incurred was about $9 million each for the Auckland and Waitematā DHBs. For the Counties Manukau DHB, the difference was between $6 and $7 million. The difference was partly mitigated because the DHB has a high vacancy rate.

1 The appropriated amount was based on the Ministry of Health’s estimates of the cost of the MECAs.

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Increasing diversity in workforces The DHBs have set themselves the goal of having workforces that look like their communities by 2025. This means that the Māori and Pacific workforces have to increase significantly, and across all disciplines. The DHBs noted that this will take time, due to the years it takes to train specialists.

We discussed the importance of encouraging people to consider health as a career path early, for example in schools, to help them reach this goal. We heard about the Pacific health science academies which work to get young people interested in sciences and get careers in health.

The three DHBs have Māori and Pacific alliance leadership groups that specifically aim to increase the number of Māori and Pacific staff. Waitematā said it had an increase in Māori clinical staff over the past four years from less than 3 percent to almost 7 percent.

The DHBs explained that they need to do more than simply increase the Māori workforce. They noted feedback from some Māori staff who were “tired of being the cultural carriers” and for people to turn to them for anything related to Māori. Those staff said that DHBs had a responsibility to provide a culturally safe environment.

We heard that the DHBs want to create a whole system that Māori recognise themselves in. The Counties Manukau DHB told us about the importance of taking opportunities to develop alternative models of care. For example, the DHB is co-designing services with a small sector of Māori and Pacific providers.

Health and safety of staff We expressed concern that the high number of patients and high volumes of work could cause health and safety issues for staff. The DHBs said they have a variety of policies and programmes about wellbeing and health and safety for staff.

The DHBs acknowledged that fatigue is an issue that was raised by unions and staff groups. The Whakaari / White Island eruption was an extreme example of this, where staff were required to do complex work for long hours. The DHBs said that the issues staff face are well appreciated, but noted that the doors need to remain open to health services.

We asked how the DHBs deal with medical staff who are assaulted at work. The Waitematā DHB told us about its measures to improve the safety of staff. They include cameras on the body vests of security staff, extra training, and leave provisions for security staff.

Health inequities We heard about the significant gaps the Auckland DHB has found between services provided to Māori and other New Zealanders. The Auckland DHB told us it is working to close those gaps by engaging its community in a conversation about equity and institutional racism.

As wealth improves, so too do health outcomes. We asked the DHBs whether inequities in accessing healthcare were compounded by the economic circumstances of their populations. We heard that existing poor health outcomes for Māori and Pacific people due

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2018/19 ANNUAL REVIEWS OF THE AUCKLAND, COUNTIES MANUKAU, AND WAITEMATĀ DHBS to deprivation are compounded by health inequities. The Waitematā DHB observed that inequities might not be limited to healthcare, but could also extend to accessing other social services.

Life expectancy and other measures The life expectancy across populations in all three districts has increased over the past decade. The gap in life expectancy between Māori and other ethnicities in Auckland and Waitematā has narrowed over that same period. However, in all three DHBs a large gap remains in the life expectancy between Pacific people and other ethnicities. In the Auckland district, the gap between Pacific people and other ethnicities has increased by nearly two years.

This gap also exists for other measures, such as ambulatory service hospital (ASH) admissions for children under the age of five. These are admissions that could potentially have been prevented with timely and appropriate primary care and other interventions. In Waitematā, the ASH rate for Pacific children increased by 18 percent in 2018/19. It also remains high for Pacific children in both Auckland and Counties Manukau. We expect DHBs to work on reducing this gap.

Measles outbreak The Auckland region was hit particularly hard by the measles outbreak in 2019—the Counties Manukau district in particular.

We heard about the Counties Manukau DHB having vaccination clinics in community settings and the primary care sector responding quickly to the outbreak. The Counties Manukau DHB mentioned one weekend where more than 1,500 people were vaccinated over a Saturday–Sunday clinic.

Immunisation gap We expressed concern about the immunisation gaps for children under the age of four and for people aged 15 to 29.

The National Immunisation Register means that good records are available of vaccinations for children aged 14 years and under. However, DHBs told us that a number of people in the 15 to 29 age range believe they are vaccinated but are not. The DHBs are pleased with the Government’s announcement in February 2020 of a catch-up campaign focused on the 15 to 29 age group. The DHBs consider that the lack of data is one of the reasons for targeting this group

We note that the Auckland region DHBs requested a national catch-up campaign in 2017 but that it was declined. The request was based on public health expertise showing that a significant number of people were unimmunised, the risk of an epidemic was high, and that epidemics were occurring elsewhere in the world.

Vaccinations at pharmacies The Waitematā DHB said it is supportive of pharmacies as a place to receive measles vaccinations, as well as a number of other vaccines. It already had pharmacist vaccinators

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2018/19 ANNUAL REVIEWS OF THE AUCKLAND, COUNTIES MANUKAU, AND WAITEMATĀ DHBS for influenza and from October 2019 about 120 pharmacies now offer MMR vaccines across metropolitan Auckland. We are supportive of DHBs resourcing pharmacies to become vaccinators in times of emergencies. The Waitematā DHB assured us that pharmacies were part of future planning for vaccinations.

Collaboration with the education sector We believe that there is an opportunity for cross-sector collaboration to ensure children are immunised before attending school. The Waitematā DHB told us about the good relationship it has with the schools in its district. It is pleased with the recent memorandum of understanding for data-sharing with schools, which it sees as an opportunity to increase the number of children vaccinated.

Obesity Seven out of ten people in the Counties Manukau district are overweight or obese. We discussed the challenge the DHB faces due to the combination of high population growth and high levels of poverty and obesity.

The Counties Manukau DHB said that the issues stemming from obesity cannot be solved at a local or regional level; it has to be a nationally coordinated approach. It said people at hospitals are coping with things they have never had to cope with before due to these issues. For example, it may take one and a half times longer to do a gynaecological procedure on a woman who is obese, and she may have to stay in hospital longer because of an infection risk. This has flow-on effects to the wait time for people trying to access these, and other, services.

We heard that the Counties Manukau district has had an encouraging reduction in child obesity rates at the B4 School Check (which is for children aged four). The Counties Manukau DHB said it needs to take a broad approach to reducing childhood obesity. It is working with the other Auckland region DHBs to develop the Metro Auckland DHB Healthy Weight Action Plan for Children 2017–2020. We are pleased that the Counties Manukau DHB has successfully reduced the rates of childhood obesity. We expect the DHB to use lessons from this success to improve other health outcomes.

Whakaari / White Island eruption A large number of burns victims from the Whakaari / White Island eruption were transferred to the National Burn Service at Middlemore Hospital, in the Counties Manukau district. This was a large increase in the number of patients requiring treatment. The DHB made changes to allow it to deal with this influx, such as suspending elective surgeries until January 2020 (230 surgeries were postponed or deferred). We heard that other DHBs supported the Counties Manukau DHB during this time. Auckland and Waitematā DHBs provided care for Counties Manukau patients who were diverted to their districts. The other DHBs with burns units also supported Counties Manukau in its work responding to the emergency.

We asked the Counties Manukau DHB about receiving ACC funding for the costs of care associated with the Whakaari / White Island eruption. We heard that the Ministry of Health is coordinating with ACC on this matter. The Counties Manukau DHB is working with the other

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2018/19 ANNUAL REVIEWS OF THE AUCKLAND, COUNTIES MANUKAU, AND WAITEMATĀ DHBS burns centres to provide a weekly update of their additional costs associated with the care and recovery for these patients. The Counties Manukau DHB said it would seek to recover as much as possible. It mentioned that the costs are not only those directly related to patient care. Other costs have a ripple effect on the system, such as the effect of the delays on surgeries and the burnout of staff.

We commend the work by the Counties Manukau DHB, and other DHBs, on responding to this disaster.

Care for older New Zealanders We heard that healthcare for elderly New Zealanders changed significantly in the past few decades. Elective surgeries are no longer qualified by age. DHBs now look at the patient’s capacity to benefit from the surgery. We heard that some people in their 90s are receiving new hips and knees because the DHB believes they will benefit from the operation.

Waitematā is a district with a high proportion of older New Zealanders. We asked how the Waitematā DHB is ensuring that older New Zealanders are getting the best care.

The Waitematā DHB’s aim is to support people to stay at home for as long as possible, and it is looking to increase its care provision for older people in their own homes. It has several programmes under way, such as KARE. This programme invests more in GP practices to allow practitioners to spend more time with a patient so the root of their medical issue can be determined.

We are pleased at the progress Waitematā is making on quality of life for people with onset dementia, dental issues, and waiting for elective surgery. However, we would like to see these as targets that are measurable.

Pricing for inter-district flow The Auckland DHB provided over $600 million in services in 2018/19 to people outside its district. This was more than any other DHB. It told us that the national pricing for this inter- district flow did not meet the actual cost of providing the services. The DHB also mentioned that the cost of providing these services is increasing. It expressed its concern about the cost pressures that this is causing. We share this concern and have opened a separate briefing into this issue.

The Waitematā DHB’s savings plan The Waitematā DHB has budgeted a breakeven result in 2019/20. To do this, it must achieve $30 million of savings that are set out in a plan. We note that as at the date of the DHB’s audit, $26 million of the savings plan had yet to be identified.

The Waitematā DHB said it would implement a range of initiatives to meet this target, such as saving more through its procurement and investigating different ways to deliver services. We heard that it has implemented a specialist-led ward round every morning in its hospitals. This has reduced the length of stay for patients—from 3 days to 2.7 days. We look forward to seeing at its next annual review whether Waitematā has been able to achieve these savings.

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Appendix

Committee procedure We met on 12 February and 18 March 2020 to consider the annual review of the Auckland District Health Board, the Counties Manukau District Health Board, and the Waitematā District Health Board. We heard evidence from the DHBs and received advice from the Office of the Auditor-General.

Committee members (Chairperson) Hon Dr Matt Doocey Hon Jenny Marcroft Dr Hon

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Auckland District Health Board).

Office of the Auditor-General (Briefing on the Counties Manukau District Health Board).

Office of the Auditor-General (Briefing on the Waitematā District Health Board).

Auckland District Health Board (Responses to written questions).

Counties Manukau District Health Board (Responses to written questions).

Waitematā District Health Board (Responses to written questions).

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2018/19 Annual review of the Bay of Plenty District Health Board 2018/19 Annual review of the Capital and Coast District Health Board 2018/19 Annual review of the Hawke’s Bay District Health Board 2018/19 Annual review of the Hutt Valley District Health Board

Report of the Health Committee

March 2020

The Health Committee has conducted the annual reviews of the Bay of Plenty DHB, the Capital and Coast DHB, the Hawke’s Bay DHB, and the Hutt Valley DHB for 2018/19, and has no matters to bring to the attention of the House. The committee recommends that the House take note of its report.

Louisa Wall Chairperson

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2018/19 Annual review of the Canterbury District Health Board 2018/19 Annual review of the Nelson Marlborough District Health Board 2018/19 Annual review of the West Coast District Health Board

Report of the Health Committee

March 2020

Contents Recommendation ...... 2 Joint hearing on these three district health boards ...... 2 Canterbury District Health Board ...... 2 West Coast District Health Board ...... 7 Nelson Marlborough District Health Board ...... 9 Appendix ...... 11

Louisa Wall Chairperson

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2018/19 ANNUAL REVIEWS OF CANTERBURY, NELSON MARLBOROUGH, AND WEST COAST DHBS

Canterbury District Health Board, Nelson Marlborough District Health Board, and West Coast District Health Board

Recommendation The Health Committee has considered the annual reviews of the Canterbury District Health Board, the Nelson Marlborough District Health Board, and the West Coast District Health Board for 2018/19, and recommends that the House take note of its report.

Joint hearing on these three district health boards We chose to hear from these three district health boards (DHBs) together because of their geographic proximity and close relationships. We understand that the three DHBs frequently collaborate on health issues, and note that there is some overlap in their chief executive and board membership—most notably chief executive David Meates, who leads both Canterbury and the West Coast DHBs.

Canterbury District Health Board The Canterbury DHB is the second-largest DHB in the country, both by geographic area and population size. It is the South Island’s largest employer.

Canterbury DHB is responsible for the health of 578,340 people living in the Canterbury district. This district stretches from Kaikōura in the north to Ashburton in the south. Canterbury DHB also provides services to the Chatham Islands.

Of Canterbury’s population, 9.2 percent are Māori, 2.5 percent are Pasifika, and 10.8 percent are Asian. This demographic has shifted substantially over the last five years, with Māori and Pasifika populations increasing by 31 percent, and the Asian population increasing by 64 percent.

Sir John Hansen is the new chairperson of the Canterbury District Health Board, and David Meates is the chief executive.

Financial performance In 2018/19, Canterbury DHB reported a deficit of $177.839 million, which was $79.364 million more than its budgeted deficit of $98.475 million. This deficit is considerably larger than those reported by most other DHBs.

The increase in the deficit included the following one-off costs:

 $65.26 million for non-compliance with the Holidays Act 2003  $6 million in additional costs arising from the response to the 15 March terrorist attack (this was offset by $3 million additional funding from the Ministry of Health)  $3.108 million for impairment of the finance, procurement, and information management system

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 $2 million arising from strike action. In 2019/20, Canterbury DHB expects a deficit of $180.47 million, and it expects that the deficits over the following three years will remain high. This is partly because of the likely capital charge associated with completing and handing over its new Acute Services Building. We note that recent changes to the application of capital charge for new investments should, when fully implemented, reduce the costs to Canterbury DHB.

We asked whether Canterbury DHB felt confident that it could account for the variation between its budgeted deficit and its reported deficit. The chief executive said the DHB is confident that it can explain the reasons for the variation “almost down to the last cent”. The DHB explained that, aside from the one-off costs mentioned above, the deficit stems from ongoing depreciation of the capital charge relating to buildings that were demolished after the earthquakes, and approximately $72 million associated with delays in new facilities being built. Canterbury DHB outlined a number of costs that have been incurred relating to these delays, such as the need to outsource operating theatres to private hospitals and costs involved with keeping Princess Margaret Hospital open to provide some mental health services.

Results of the annual audit The Auditor-General issued a non-standard audit report. He noted a high level of uncertainty about the provision the DHB has made for compliance with the Holidays Act. This resulted in the Auditor-General qualifying his opinion of the DHB, as he has done with most other DHBs for this period.

Funding the DHB The Ministry of Health uses the population-based funding formula to determine the share of funding allocated to DHBs. The formula considers the needs of each DHB’s population, including factors such as the population size, and its composition by age, sex, socio- economic status, ethnicity, rural communities, and areas of high deprivation.

Canterbury DHB disagrees with the figures used by the Ministry of Health to determine its funding. Specifically, it considers that the estimates do not accurately reflect the size, demographic make-up, and deprivation levels in the Canterbury district.1 The DHB believes that this has been partly due to the difficulty of estimating a population in a rapidly-changing environment, as Canterbury was after the earthquakes in 2010 and 2011.

The DHB notes that the estimation difficulty has lessened as population movement has slowed, and the population has become more stable over time. However, Canterbury DHB believes that the model used to calculate deprivation in the area (which was produced from the 2013 census, after the earthquakes) was flawed, because it identified lower levels of deprivation in Canterbury than in previous models. Canterbury DHB claims that people in areas with a historically higher density of deprivation have dispersed throughout the city, so that people living with higher material deprivation are likely to be “hidden” in areas of lower deprivation.

1 Canterbury DHB annual report, page 3 https://www.cdhb.health.nz/wp-content/uploads/2b541a85-canterbury- dhb-annual-report-2018-2019.pdf.

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The DHB believes that health needs are as high as before the earthquakes—or higher, as demand for mental health services has increased. Accordingly, Canterbury DHB does not think that it is receiving an appropriate level of funding.

We note that this disagreement was raised in last year’s annual review.2 When we asked about the outcomes of further discussions that Canterbury DHB has had with the Ministry of Health, we heard that there has been no change to the funding levels and will not be until the next review of the population-based funding formula. The DHB does not expect the next review to affect its funding until at least the 2022/23 financial year.

Staff costs As a proportion of Canterbury DHB’s population-based funding, salary and wage costs have grown by $56.885 million (4 percent) between 2014/15 and 2018/19. This is roughly half of the deficit that was not attributable to one-off costs in 2018/19.

We heard that the cost of the multi-employer collective agreement (MECA) was higher than Canterbury DHB had budgeted for. Although Canterbury DHB received additional funding from the Ministry of Health to provide for this, it was not enough to cover the cost. This is because the negotiation included the revision of accruals for annual leave, which are revalued at every MECA settlement.

Non-compliance with the Holidays Act In 2018/19, the Ministry of Business, Innovation and Employment’s labour inspectorate identified that the payroll systems in many organisations did not comply with the requirements of the Holidays Act. This meant that many employees did not receive their correct leave entitlements.

New Zealand’s DHBs have now reached agreement with unions on the requirements of the Holidays Act and a framework to review compliance. Canterbury DHB expects to complete its review in early 2020.

Infrastructure and rebuilding after the Canterbury earthquakes The earthquakes of 2010 and 2011 caused substantial damage to many of Canterbury DHB’s buildings and assets. More than 200 buildings sustained damage, with Canterbury DHB demolishing 44 to date.

We heard that delays in the construction of new hospital facilities have cost Canterbury DHB an additional $72 million. This includes the Acute Services Building at hospital, the opening of which is delayed to 2020. Until the new facilities open, Canterbury DHB will continue to outsource eight operating theatres.

Car parking at Christchurch hospital Before the earthquake, Christchurch Hospital had 1,400 staff carparks. Now, it has 800. In addition, other hospital parking buildings have been demolished and free street parking has

2 Canterbury DHB post-hearing questions, question 2 https://www.parliament.nz/resource/en- NZ/52SCHE_EVI_83867_HE5536/e73322a146b43e03e39cad384dc04f76aec5a4dc.

4 308 2018/19 ANNUAL REVIEWS OF CANTERBURY, NELSON MARLBOROUGH, AND WEST COAST DHBS been removed. This has led to significant public frustration about Christchurch Hospital’s lack of parking. We note that patients and their whānau are also seriously affected.

Canterbury DHB noted that the Ministry of Health is responsible for providing long-term car parking. They are working together on a solution with organisations that have facilities nearby, including Ōtākaro, Christchurch City Council, the University of , and Ara Institute of Canterbury.

Māori health Canterbury DHB is working with local stakeholders to address inequities in health for Māori. As part of this, it is considering whether to develop a new primary care kaupapa Māori service. Currently, community and non-government organisations provide these services.

Canterbury DHB acknowledged that previous attempts to establish such a service had failed. Instead, it has focused on designing its services to work better for Māori. For example, Māori use its acute admission avoidance programme more often than non-Māori because it means they can receive health care at home rather than in hospital.

We heard that this may contribute to the trend that Māori tend to spend less time in hospital than non-Māori. Although we agree that this would be positive, we remain concerned about possible inequities that may also influence Māori access to healthcare.

We asked about the difference in average pharmaceutical spending on Māori ($205 per person) and non-Māori ($264). Canterbury DHB considers that this is likely because there are proportionally fewer Māori in the age bracket 65 years or older. It is this age group who tend to have higher rates of pharmaceutical spending.

Mental health services The Canterbury Clinical Network (CCN) is an alliance of 12 health organisations that work together to co-design and improve health services for people in Canterbury. In 2018, it helped launch the Mana Ake – Stronger for Tomorrow initiative to provide mental health and wellbeing support for Canterbury children aged between 5 and 12 years.

We heard that Canterbury DHB works closely with CCN to build its evidence base that will eventually measure the effect Mana Ake has on mental health. This will take time. However, it observed that serious “acuity” referrals are already starting to taper off. Canterbury DHB sees Mana Ake as a preventative mechanism that could substantially lower the long-term demand for mental health services.

Canterbury DHB is positive that Mana Ake is already contributing to an improvement in school attendance, responsiveness in class, and overall learning success.

Increasing demand for emergency department Between 2012/13 and 2018/19, demand for Christchurch Hospital’s emergency department increased by 16 percent. Canterbury DHB considers that this is largely because of Canterbury’s increasing population (growing by about 100,000 people since 2007) and its ageing population (about 35,000 more people over the age of 65 since 2007).

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Canterbury DHB told us that the increase is mainly patients with serious medical needs who require urgent hospital care.3 Patients with less serious needs tend to be managed through one of the three after-hours services available.

Response to the 15 March terrorist attack The terrorist attack in March 2019 considerably strained Canterbury DHB’s services because of the number and nature of the injuries that it suddenly had to treat.

Christchurch Hospital received 48 people directly injured in the attack. A further 81 people presented to the hospital for issues relating to the attack (such as anxiety, chest pain, and mental health issues).

We heard that the initial response to the attack cost Canterbury DHB $6.5 million, and the DHB received an injection of $3 million from the Ministry of Health. Canterbury DHB is working with the Accident Compensation Corporation (ACC) to determine how much funding ACC will contribute. Many of the cases arising from the attack are complex and require ongoing interventions; this has complicated the approval process with ACC.

We acknowledge and commend Canterbury DHB and all its staff who responded and continue to care for those affected by the 15 March attack.

Canterbury measles outbreak Between February and May 2019, the Canterbury district experienced a measles outbreak. During this outbreak, 38 people caught measles, including 6 hospital staff.

Given that hospital staff should be immunised, we asked about Canterbury DHB’s process to ensure that this would not happen in future. We heard that new staff are now required to show proof of immunisation upon employment. However, this is a new practice that does not capture staff already employed. Canterbury DHB is developing a process to fully capture information about staff immunisation, and aims to establish this by winter 2020.

Canterbury DHB could not provide us with the costs to the DHB of the measles outbreak, noting that tasks performed by staff could not be easily separated according to whether they related to the outbreak. We heard that some primary care doctors were receiving more than 250 calls a day. Canterbury Health Laboratories carried out about 2,500 measles lab tests, at a cost of approximately $250,000 in 2019.

Project SEARCH Project SEARCH is an internship programme for young disabled people. Interns are placed within participating workplaces and given practical training, education, and career development.

Canterbury DHB is the first of New Zealand’s DHBs to trial Project SEARCH. Of the first eight interns in the programme, two have already secured permanent employment.

3 https://www.health.govt.nz/our-work/hospitals-and-specialist-care/emergency-departments/emergency- department-triage.

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Canterbury DHB plans to keep up this momentum and is considering how it can be a more accessible employer.

We will continue to follow Project SEARCH with interest, and encourage the DHB to continue its good work in this area.

West Coast District Health Board West Coast DHB is responsible for the health of 32,600 people living in the West Coast district. This makes West Coast the smallest DHB by population size, but the third largest by geographic area: from Karamea in the north to Haast in the south.

Of the population, 12 percent are Māori, 1.2 percent are Pasifika, and 3.4 percent are Asian. People living in the West Coast tend to be older than the New Zealand average. By 2026, one in four people will be older than 65 years.

Jenny Black was the chair of the West Coast DHB for the period covered by this review; took over as chair on 9 December 2019. David Meates is the chief executive.

Financial performance In 2018/19, West Coast DHB reported a deficit of $11.56 million compared to a budgeted deficit of $6.09 million ($5.4 million more than budgeted). The increase in the deficit was mainly because of its:

 $5.2 million provision for non-compliance with the Holidays Act  $280,000 impairment on its investment in New Zealand Health Partnerships Limited. In 2019/20, West Coast DHB expects a deficit of $6.6 million. It expects this deficit to grow over the following three years. This is mainly because of expected depreciation and capital charge expenses from Te Nikau Grey Hospital and Buller Integrated Health Centre. We note, as with Canterbury DHB, that recent changes to the application of capital charge for new investments should reduce the costs to West Coast DHB.

West Coast DHB has not made any budgeting provision for the End of Life Choice Act 2019, should it come into force after the 2020 referendum. However, it has established an ethics committee to consider how best to manage the requirements of the Act.

Results of the annual audit As with most other DHBs for this reporting period, the Auditor-General issued a non- standard audit report. He noted a high level of uncertainty about the provision the DHB has made for compliance with the Holidays Act.

Finance, procurement, and information management system West Coast DHB was one of the four DHBs to have implemented the National Oracle Solution health IT system when it was suspended by the Minister in September 2018. In June 2019, Cabinet approved a business case for a new finance, procurement, and information management system (FPIM) with a more limited scope. The plan is now for 10 DHBs to implement the FPIM, rather than all 20.

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Given the project’s struggles, we asked what West Coast DHB would do differently in future. We heard that it would focus on stakeholder management—in particular, being explicit about what the DHB needs to achieve from the system.

Hospital building projects The building of Te Nikau Grey Hospital is behind schedule and the DHB told us that it expects the hospital to be completed in mid-2020. West Coast DHB acknowledged the building delays, noting that there have been various problems with the project. These include a change in the legislation for seismic bracing requirements, the consequences of which were not fully understood during the project’s scoping process.

We heard that the delay has substantially cost West Coast DHB. It has had to “value re- engineer” the scope of the project with the available capital. This means that some parts of the original business case will not go ahead as planned, including the mental health facility that was planned to be part of the new hospital. We heard that the DHB is now preparing a business case for a separate mental health facility.

Given that the Ministry of Health is responsible for the building contract with , West Coast DHB did not answer any of our questions about possible contract disputes or the tender process, as they are not one of the parties to the contract.

Holidays Act non-compliance West Coast DHB is working to determine its liabilities arising from non-compliance with the Holidays Act. We note that it had budgeted $5.2 million in its 2018/19 financial statements. However, we are advised that it did not provide the Auditor-General with enough evidence to support this estimate. We heard that this is because West Coast DHB is still working through the recalculation process, which will include remediation costs. It noted that this is very complex.

Transalpine service model West Coast DHB has a strong partnership relationship with Canterbury DHB. Since 2010, the DHBs have had the same chief executive and now share much of the same senior management team.

Canterbury specialists provide regular outpatient clinics and surgical lists on the West Coast. They also provide services through increased use of telemedicine technology. This allows people to receive specialist advice without travelling long distances.

We heard that West Coast DHB uses telehealth palliative care specialists in Canterbury to support its nursing teams working in communities. This means that people who generally would have needed to travel for palliative care can now choose to stay at home.

We asked about the practicalities of establishing a remote working relationship of this nature. West Coast DHB emphasised that relationship management is critical. It noted that it has a relatively consistent workforce who have trust and confidence in each other. West Coast DHB also supports its nurses to take on extra training and professional development.

We are very supportive of this working relationship which prioritises helping people stay in their own communities to receive much needed health care.

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Nelson Marlborough District Health Board Nelson Marlborough DHB is responsible for 150,770 people living in the Nelson and Marlborough districts. Of this population, 10.6 percent are Māori, 1.7 percent are Pasifika, and 4.6 percent are Asian.

Compared to the national average, the Nelson Marlborough population is significantly older. Nelson Marlborough has a low proportion of people in the most deprived section of the population.

Jenny Black is the chairperson of Nelson Marlborough DHB, and Dr Peter Bramley is the chief executive.

Financial performance In 2018/19, Nelson Marlborough DHB reported a deficit of $20.57 million compared to a budgeted surplus of $500,000 ($21.07 million more than budgeted). This deficit is mainly because of:

 $7.1 million liability for non-compliance with the Holidays Act  $5.8 million for the nurses’ multi-employment collective agreement  $1 million impairment of the Wairau Nurses’ Home  $302,000 impairment for the FPIM project. Nelson Marlborough is generally one of the better financially performing DHBs; 2018/19 was the first year that it has reported a substantial deficit in some time. It expects to report deficits for the next three years. Nelson Marlborough DHB acknowledged concerns about its financial performance.

During our hearing, Nelson Marlborough DHB pointed to nurses’ strike action before the settlement and the DHB’s response to the Pigeon Valley fires at the beginning of 2019 as additional factors in its deficit, in addition to the points listed above.

Pharmaceutical costs In July 2018, Pharmac took over responsibility from all DHBs for buying hospital medicines. As part of this process, Pharmac estimates each DHB’s pharmaceutical cost so they can budget, then provides them with an actual cost at the end of the financial year. In 2018/19, Nelson Marlborough DHB’s actual cost was $4.7 million more than Pharmac’s estimate.

When we asked why its pharmaceutical costs were higher than budgeted, Nelson Marlborough DHB noted its ageing population. We also heard that Nelson Marlborough DHB initiated a Hepatitis C drive after Pharmac made available an effective cure. This drive cost $1.5 million more than budgeted. The DHB said that it is difficult to quantify the long-term effects that funding the cure would have, but agreed with us that it would prevent the need for some large future costs like liver transplants. Nelson Marlborough DHB considers that the cost was more than worth it when considering how many people benefited, and the extent to which the cure would have improved their lives, saying “it was the right thing to do”.

Rebuilding Nelson hospital Currently, Nelson Marlborough DHB is planning to rebuild Nelson hospital. We heard that it has presented its initial business case to the Ministry of Health, which has asked it to review

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Holidays Act non-compliance Nelson Marlborough DHB is working to calculate its liabilities arising from non-compliance with the Holidays Act. We note that it budgeted $8.5 million in its 2018/19 financial statements. However, we are advised that it did not provide the Auditor-General with enough evidence to support this estimate.

Models of care programme Nelson Marlborough DHB’s models of care programme aims to ensure that the right levels of healthcare are being provided throughout the community, with a strong focus on equity. The programme covers a wide range of projects, including working to help families bond with their children, finding new ways to take advantage of virtual health technologies, and improving communication and the sharing of information between healthcare providers in the area.

We heard that, as part of this programme, Nelson Marlborough DHB is exploring which procedures and types of follow-up can be referred to general practitioners or specialist nurses, to provide capacity for more complex procedures in the hospital. The DHB has been referring work on primary skin lesions in this way, and has also trained a small team of general practitioners to perform procedures on intermediate skin lesions. This has meant that approximately 500 patient interventions have been referred to the primary setting, and has created additional capacity for the hospital’s cancer and ear, nose, and throat specialists.

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Appendix

Committee procedure We met on 11 December 2019 and 18 March 2020 to consider the annual reviews of the Canterbury District Health Board, the West Coast District Health Board, and the Nelson Marlborough District Health Board. We heard evidence from the DHBs and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing paper on Canterbury District Health Board).

Office of the Auditor-General (Briefing paper on West Coast District Health Board).

Office of the Auditor-General (Briefing paper on Nelson Marlborough District Health Board).

Canterbury DHB (Responses to written questions, with appendices).

West Coast DHB (Responses to written questions, with appendices).

Nelson Marlborough DHB (Responses to written questions, with appendices).

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2018/19 Annual review of the Health and Disability Commissioner

Report of the Health Committee

February 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial overview and audit report ...... 2 A long-term trend of increased complaints to the HDC ...... 3 Staff turnover at HDC is high ...... 4 HDC can self-initiate inquiries ...... 4 Appendix ...... 5

Louisa Wall Chairperson

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2018/19 ANNUAL REVIEW OF THE HEALTH AND DISABILITY COMMISSIONER

Health and Disability Commissioner

Recommendation The Health Committee has conducted the annual review of the Health and Disability Commissioner for 2018/19, and recommends that the House take note of its report.

Introduction The Health and Disability Commissioner (HDC) was established as an independent Crown entity in 1994. It acts as an impartial watchdog, promoting and protecting the rights of consumers of health and disability services. It investigates complaints and holds providers to account in relation to the Code of Health and Disability Services Consumers’ Rights, which specifies ten rights consumers have. Its role is summarised in its four strategic objectives:

• To protect the rights of health consumers and disability services consumers under the Health and Disability Commissioner Act and Code. • To improve quality within the health and disability sectors. • To hold providers to account appropriately. • To promote, by education and publicity, respect for and observance of the rights of health and disability services consumers. The HDC has 76 full time equivalent staff, and offices in both Auckland and . The Commissioner, Anthony Hill, has been in the role since 2010.

Financial overview and audit report

The HDC had total revenue of $13.651 million in the 2018/19 financial year (an increase of about 3 percent from $12.87 million in 2017/18). Total expenditure was $13.351 million, resulting in a surplus of $0.299 million. This compared with a budgeted deficit of $0.391 million.

In 2018/19, the HDC allocated 53 percent of its total output expenditure to complaints resolution, and 30 percent to advocacy. Results of the annual audit The Auditor-General issued a standard audit report, indicating he was satisfied that the information audited fairly reflected the Commissioner’s activities and financial position at the end of the year. The auditor gave a rating of “very good” to the HDC’s management control environment and financial information and supporting systems and controls. Its performance information and supporting systems and controls were rated “good”. The Auditor-General recommended that the HDC should consider developing performance measures:

• to address the appropriateness of the output “Efficiently and appropriately resolve complaints”

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• to measure public and provider awareness of the Code of Health and Disability Consumers’ Rights. The Auditor-General noted that a main matter arising from the audit was the increase in demand for HDC’s core service, complaints resolution. He noted that this increase in demand has not been met with a proportionate increase in funding.

A long-term trend of increased complaints to the HDC Over the long term, the HDC has seen an increase in the number of complaints received. Between 2015/16 and 2017/18 the number of complaints rose by 28 percent. In 2018/19, the HDC closed 2,392 complaints, the highest number in any year to date.

However, we noted that in 2018/19 the number of complaints received decreased by 6 percent from the previous year. The Commissioner was unsure of the reason for the decrease, but he noted that the long-term trend—both here and across Australasia—is an increasing number of complaints. He suggested that the steady increase in complaints over previous years could have been due to an easier process for consumers to make complaints, as well as the high profile of the HDC. He noted that the HDC does not receive complaints about all serious or adverse events. He would like to be able to compare data on such events with other agencies (such as ACC) more easily.

The Commissioner told us the organisation has adapted and become more efficient in some areas to manage the increase in complaints, but he does not believe this is sustainable long- term. HDC values the quality of service it provides to consumers. He is concerned that if it does not receive more funding, a continuing rise in complaints could put pressure on its ability to provide a high-quality service.

HDC received a one-off funding increase from the Ministry of Health We note that the increase in demand for HDC’s core service, complaints resolution, has exceeded increases in its funding over the past five years. Towards the end of 2018/19, HDC received $500,000 in additional funding. This was a one-off addition from the Ministry of Health. We questioned the Commissioner about this funding, as it did not appear to have resulted in an increase in the number of closed complaints. We also asked why this was a one-off funding increase when the Commissioner had indicated it would require more funding to update its surveying methods, and to keep to its high rate of complaints closed within appropriate time frames.

The Commissioner clarified that $500,000 was the most funding he had been able to obtain. Although not an addition to baseline, it has allowed HDC to run at a deficit in the 2019/20 financial year. By running at a deficit, HDC was able to put more resources into its investigations team. This team deals with the most complex and challenging complaints, which often take longer to close.

We heard that HDC is discussing its funding with the Ministry of Health, and that it hopes to receive more funding through Budget 2020.

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Staff turnover at HDC is high We are concerned by HDC’s high rate of staff turnover, which was 23 percent in 2018/19, compared with an average of 11.8 percent for the public sector.1 We wondered if it was indicative of any problems with HDC’s organisational culture. We were also worried that such a high turnover rate could cause continuity problems when complaints were reassigned to other staff members due to a resignation.

The Commissioner explained that turnover rates for complaints agencies are typically high. From his knowledge, HDC has a similar turnover rate to complaints agencies in Australasia. He acknowledged that the work HDC does is challenging and confronting for employees. He said it has developed strategies to support staff with the effects of the work they do. The Commissioner also believes that, despite a high workload over the last few years, staff are positive and engaged in their work.

He also noted that HDC is a small organisation, totalling about 80 staff members. Because of its small size and limited roles, there are not a lot of opportunities for career development within the organisation.

Nevertheless, the Commissioner agreed that its turnover rates appear too high and he would like to reduce the rate. He told us that he is considering staff salaries and how he might be able to pay staff more, particularly in relation to Budget 2020.

Recruitment strategies for HDC We also asked how HDC handles its high turnover through recruitment strategies. The Commissioner said it typically hires people from law, health sciences, and clinical backgrounds, and often hires young graduates. He has also been considering how to increase the number of staff in senior advisory roles to rebalance its structure.

HDC can self-initiate inquiries We were interested to hear about HDC’s inquiries, and whether it can initiate its own inquiries into topical issues. We learned that HDC can initiate its own investigations. The Commissioner was unable to confirm how many are currently under way, but he recalled that one in the past year related to community health services. We discussed some of the issues we have been alerted to recently, including the prescribing of anti-psychotic medication to dementia patients, and issues involving access to sexual and reproductive health services in Auckland. The Commissioner responded that HDC is aware of the media reports about prescriptions to patients with dementia, and is considering whether to initiate an investigation. He also said that, as access to services appears in 25 percent of all complaints, HDC would also be interested in investigating issues to do with access to sexual and reproductive health services.

1 Source: State Services Commission. 4

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Appendix

Committee procedure We met on 16 December 2019 and 4 March 2020 to consider the annual review of the Health and Disability Commissioner. We heard evidence from the Health and Disability Commissioner and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Health and Disability Commissioner (Responses to written questions).

Office of the Auditor-General (Briefing on the Health and Disability Commissioner).

5 320

2018/19 Annual review of the Health Promotion Agency

Report of the Health Committee

February 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial overview and audit report ...... 2 The agency works on a wide range of issues ...... 3 The agency views health issues in a wellbeing context ...... 3 New approaches to Māori and youth health ...... 4 Appendix ...... 5 Committee procedure ...... 5

Louisa Wall Chairperson

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2018/19 ANNUAL REVIEW OF THE HEALTH PROMOTION AGENCY

Health Promotion Agency

Recommendation The Health Committee has conducted the annual review of the Health Promotion Agency for 2018/19, and recommends that the House take note of its report.

Introduction The Health Promotion Agency (HPA), also known as Te Hiringa Hauora, is a Crown agent established in 2012. Its key role is to lead and support health promotion initiatives to:

• promote health and wellbeing and encourage healthy lifestyles • prevent disease, illness, and injury • enable environments that support health, wellbeing, and healthy lifestyles • reduce personal, social, and economic harm. The agency also has alcohol-specific functions. These allow it to give advice and make recommendations to a number of government and non-government bodies about the sale, consumption, and harm of alcohol, and to research alcohol use and misuse in New Zealand.

Financial overview and audit report The HPA had total revenue of $30.282 million in the 2018/19 financial year. Total spending by the agency was $30.892 million, resulting in a deficit of $0.610 million. In 2017/18 the agency reported a surplus of $0.601 million.

In 2018/19 the HPA received 59 percent of its revenue from the Crown as part of Vote Health, and 38 percent from the levy on alcohol produced or imported for sale in New Zealand. The remaining 3 percent of revenue came from interest and other sources.

Results of the annual audit The Auditor-General graded the agency’s management control environment “good”, with some recommendations about procurement and contract management. He noted some progress with prior recommendations, but saw further opportunities for improvement in conflict management plans, and in processes for managing conflicts of interests and contracts. The Auditor-General also recommended improvements to the process for changing the vendor Masterfile, which is used to manage transactions with suppliers.

The HPA’s financial information systems and controls, and its performance information and associated systems and controls were both rated “very good”, with no recommendations for improvement.

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The agency works on a wide range of issues The agency’s work covers a wide range of health issues. It works in collaboration with other governmental and non-governmental organisations. We heard that its board is currently reviewing how the agency can make itself more fit for purpose in response to recent reviews and the Government’s Wellbeing Budget.

We asked how the HPA decides what health issues to focus on. The agency said the focus usually depends on its funding. It has historically been funded for work on specific topics such as alcohol, tobacco control, mental health, and gambling. Some of its funding comes from levies on the product itself, such as with alcohol and gambling. The agency also receives a letter of expectations from the Government every year, which it takes into consideration when prioritising issues.

Campaign to reduce cases of Foetal Alcohol Spectrum Disorder We were interested in what work the agency has been undertaking on foetal alcohol spectrum disorder (FASD). The agency has a three-year strategy around FASD called “Don’t know? Don’t drink.” This campaign is targeted towards young women who drink hazardously, are sexually active, and who are not planning to get pregnant. The campaign’s message encourages women to stop drinking if there is a chance they may be pregnant. We heard from the HPA that the campaign is currently in its second stage, which is a social- media driven campaign which shares the idea of a “Pre-Testie Bestie” as a way to encourage women to help their friends who may be pregnant to abstain from drinking. We asked whether the prevalence of FASD appeared to be increasing or decreasing. The agency responded that such data can be difficult to find. It believes the Ministry of Health may be researching this using recent additional funding.

The HPA is also developing an online training tool with the New Zealand College of Midwives about alcohol consumption during pregnancy. It aims to use tools like this to promote consistent and evidence-based advice which health professionals can share with pregnant people.

We also discussed with the agency the similarities between FASD and foetal anticonvulsant syndrome (FACS). FACS is caused by exposure to sodium valproate (an ingredient in some medications) in the womb, and results in physical and developmental problems in children. Based on the work the HPA is undertaking in FASD awareness and prevention, we suggested it could consider doing similar work on FACS.

The agency views health issues in a wellbeing context The HPA discussed how it considers the interaction between individual health issues and overall wellbeing. It explained that what may be thought of as singular issues, such as tobacco or alcohol use, are often influenced by lifestyle and environmental factors. The agency believes that if it views such issues in a wider wellbeing context, it can gain a different perspective and focus more on a whole person rather than a single health issue. Its work with NGOs and community groups is an important part of this, as those groups can also support people’s wellbeing.

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We heard that the HPA is especially considering wellbeing in areas such as drug use and obesity. Some of us asked whether the agency had been in any discussions with the Minister or Ministry of Health about the Misuse of Drugs Amendment Bill, which was passed in August 2019. The agency told us it had been part of some early discussions about the legislation with the Ministry of Justice.

The agency is thinking about changing its approach to obesity. It acknowledged that its previous work on obesity has not been effective, and obesity has instead risen in New Zealand. It now plans to co-design an approach to obesity with those affected, and is committed to a different approach than in the past.

New approaches to Māori and youth health We were interested in what approaches the HPA has taken towards Māori health in the past financial year. Some of its work in this area has been based around using technology more effectively, and removing barriers to accessibility.

One example is a pilot to make some of the agency’s most-visited websites free to access by removing data charges. They include the mental health websites depression.org and thelowdown.co.nz, and gambling website choicenotchance.org.nz. Research indicates that those in socioeconomically disadvantaged populations usually have access to smartphones or similar devices, but do not necessarily have access to the internet or data. This pilot allows people with smartphones, but without a data balance, to access these websites.

The agency has recorded positive initial outcomes from a Māori quit-smoking chat bot, Kuīni. Kuīni has been designed as a digital coach that can support Māori women on their journey to quitting smoking. The quit bot was designed together with Māori women smokers, and has resulted in some Māori women quitting smoking. More statistics around the efficacy of Kuīni are expected in 2019/20.

We also heard that the HPA works with and supports a number of different groups, including iwi, NGOs, and community organisations. It works on co-designing approaches with these groups rather than prescribing, and also aims to include Māori youth. The agency wants to promote a change in perception, to focus on the aspirations of these rangatahi and how it can encourage and support them. It highlighted events like Smokefreerockquest and Tangata Beats, which HPA has been involved with for some time, as examples of programmes which motivate rangatahi to explore their creativity and talent in music. It has also been involved in other programmes such as the Taranki Mounga project which connects rangatahi with their local environment.

We expressed concern about recent anecdotal evidence about the uptake in vaping amongst young people We noted that the HPA has researched vaping extensively, and created a Vaping Facts website to help inform the public about how vaping may be used as tool to quit smoking. We asked whether it has been part of any development of a regulatory framework around vaping, but were told it has not. We hope to see it continue to work on vaping and the effects it can have on young people.

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Appendix

Committee procedure We met on 16 December 2019 and 4 March 2020 to consider the annual review of the Health Promotion Agency. We heard evidence from the Health Promotion Agency and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Health Promotion Agency (Responses to written questions).

Office of the Auditor-General (Briefing on the Health Promotion Agency).

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2018/19 Annual review of the Health Quality and Safety Commission 2018/19 Annual review of the Health Research Council of New Zealand 2018/19 Annual review of the New Zealand Blood Service

Report of the Health Committee

March 2020

The Health Committee has conducted the annual reviews of the Health Quality and Safety Commission, the Health Research Council of New Zealand, and the New Zealand Blood Service for 2018/19, and has no matters to bring to the attention of the House. The committee recommends that the House take note of its report.

Louisa Wall Chairperson

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2018/19 Annual review of the Lakes District Health Board 2018/19 Annual review of the MidCentral District Health Board 2018/19 Annual review of the Northland District Health Board 2018/19 Annual review of the South Canterbury District Health Board

Report of the Health Committee

March 2020

The Health Committee has conducted the annual reviews of the Lakes DHB, the MidCentral DHB, the Northland DHB, and the South Canterbury DHB for 2018/19, and has no matters to bring to the attention of the House. The committee recommends that the House take note of its report.

Louisa Wall Chairperson

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Report of the Health Committee

March 2020

Contents Recommendation ...... 2 About the Ministry of Health ...... 2 Financial overview ...... 2 Audit results ...... 3 DHB financial sustainability ...... 3 Mental health ...... 5 Disease outbreaks and vaccinations ...... 6 Health inequities ...... 7 Publishing of health system data ...... 7 Re-establishment of ministry directorates ...... 8 Hospital buildings ...... 8 Information management system ...... 8 Appendix ...... 9

Louisa Wall Chairperson

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Ministry of Health

Recommendation The Health Committee has conducted the annual review of the Ministry of Health for 2018/19, and recommends that the House take note of its report.

About the Ministry of Health The Ministry of Health is a government department. It is the Government’s lead advisor on health and disability matters. As kaitiaki of the health system, its role is “to ensure the health and disability system continues to meet New Zealanders’ health and disability needs today, as well as in the future”.1

The ministry had five strategic priorities for the 2018/19 year, to:

• improve health outcomes for population groups, with a focus on Māori, older people, and children • improve access to, and efficacy of, health services for New Zealanders, with a focus on disability support, mental health and addictions, primary care, and bowel cancer • improve outcomes for New Zealanders with long-term conditions, with a focus on obesity and diabetes • improve the ministry’s understanding of system performance • implement the ministry’s investment approach.2 During the 2018/19 year the ministry developed a new organisational strategy with new strategic objectives for the 2019/20 financial year.

Financial overview The ministry’s revenue in 2018/19 was $221.1 million. Its expenditure was $217.0 million. The resulting surplus was $4.1 million. These compare with revenue of $202.7 million in 2017/18, and expenditure of $205.9 million, resulting in a deficit of $3.2 million.

The ministry administered non-departmental appropriations of $19.96 billion, of which about $14.89 billion was funding for the 20 district health boards (DHBs). This compares with $16.31 billion of non-departmental appropriations in 2017/18, of which about $12.72 billion was funding for DHBs.

As at 30 June 2019, the ministry employed 1,043 full-time-equivalent staff. This compares with 1,011 in June 2018. The staff are based in Wellington, Dunedin, Auckland, Whanganui,

1 Ministry of Health, Annual Report for the year ended 30 June 2019, p. 9. 2 Ministry of Health, Annual Report for the year ended 30 June 2019, p. 9. 2

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Christchurch, Palmerston North, and Hamilton. Palmerston North had no staff in June 2018 and 20 in June 2019.

Audit results The Auditor-General issued a standard audit report for the Ministry of Health. This means he was satisfied that the information audited fairly reflected the ministry’s activities for the year and its financial position at the end of the year.

The Auditor-General rated the ministry’s management control environment as “needs improvement”, as he did in 2017/18. He noted that the ministry has moved to address recommendations made in 2017/18 to improve its procurement and contract management. These recommendations were made by the Auditor-General and the ministry’s own Risk and Assurance group. The ministry started to address these recommendations in the first quarter of 2019/20. The Auditor-General stated his intention to review this work in the 2019/20 audit.

The Auditor-General rated both the ministry’s financial information and supporting systems and controls, and its performance information and supporting systems and controls as “good”. He recommended several improvements. For its performance information and supporting system and controls, he noted that the ministry’s planned update to its Statement of Intent will make links between priorities and measures of success clearer.

DHB financial sustainability DHB deficits In the 2018/19 financial year, every DHB reported a deficit. Their deficits totalled $1.081 billion. This compares with a total DHB deficit of $247 million in the 2017/18 financial year. The Auditor-General commented that the aggregate deficit for DHBs may change when final results are available, particularly the amount provided for historical Holidays Act 2003 liabilities.

We note that, even accounting for one-off payments such as Holidays Act liabilities, the DHBs’ deficits are worsening each year. The Auditor-General reported that the aggregate deficit in 2018/19, excluding one-off costs, was $415 million, against the budgeted $340 million deficit.

We were interested in whether the ministry believes there are ways to make cost savings so that this downward trend reverses.

We heard about the ministry’s DHB Performance Programme. The programme supports DHB performance, including financial and service sustainability. The ministry believes there are opportunities for DHBs to reduce costs, particularly through collaboration and using resources effectively across the system. It particularly noted opportunities with data and digital technologies such as expanding telehealth services, particularly for mental health services. The ministry also supports DHBs moving hospital services to community settings, which is generally cheaper. However, the ministry pointed out that additional funding will be needed for DHBs each year to support New Zealand’s growing and ageing population.

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We asked what the agreed deficit for DHBs in the next financial year is. The ministry told us that the annual plans from DHBs show a deficit of around $534 million for 2019/20.

Impact of employment agreements and salary increases In the 2018/19 financial year, the Government agreed to pay part of the cost of the multi- employer collective agreements (MECAs) that were settled between DHBs and nurses’ unions. The settlements included both pay increases and increases in the number of nurses employed. A MECA for resident doctors was also agreed. We note that negotiations between DHBs and other unions are in progress. Personnel costs make up 63 percent of service costs in DHBs. We asked how the ministry works with DHBs to manage the large impact of small increases in salaries. We heard that the ministry provides DHBs with advice on remuneration trends and the financial implications of settlement scenarios. We were interested in whether DHBs were appropriately funded to deal with the pay increases across the sector; if not, whether this was a large factor contributing to DHB deficits. The ministry acknowledged that the biggest driver of DHB deficits, unrelated to one- off costs, was the number of staff and associated pay increases. The ministry outlined the funding that DHBs received in Budget 2019. This included $569 million for traditional cost pressures and $130 million to specifically fund the increases in salaries and staff numbers that were negotiated in the MECAs. We heard that funding for salary increases negotiated in the MECAs was based on figures provided by DHBs. The ministry said that if a DHB hired additional staff above the figure provided, then it would likely increase the DHB’s deficit. The ministry emphasised that DHBs are responsible for staffing decisions. It added that DHBs that finished the year close to budget had growth in staff numbers in line with funding increases.

Holidays Act liabilities Holidays Act liabilities contributed to $590 million of the overall DHB deficit in 2018/19. The Auditor-General issued qualified opinions in his audits of 19 DHBs in relation to their Holidays Act liabilities. This means the figures could be materially over- or under-stated. We are concerned about the previous miscalculation of Holidays Act liabilities of DHBs, which contributed to the large DHB deficit. The ministry said that negotiations between DHBs and unions on the interpretation of the Act were still continuing in 2018/19. Before an agreement was reached in March 2019, it was difficult for DHBs to calculate their liability. Once interpretation was agreed, the ministry worked quickly to assess the size of the liability. We asked how the ministry supports DHBs with Holidays Act liabilities. The ministry said it has provided guidance, support, and technical expertise to help DHBs to reach agreement on interpretation issues, take a consistent approach to estimating liabilities, and meet audit and reporting requirements. The ministry also provided letters of comfort in response to concerns about the potential financial implications of remediation payments. The ministry confirmed it will continue to provide support to DHBs in relation to Holidays Act liabilities. We note that, in 2016, the ministry advised the then Minister of Health that all DHBs were compliant with the Holidays Act and that any liability resulting from the Holidays Act would be

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minimal. Given that the estimated liability for Holidays Act non-compliance is $590 million, it is concerning that issues relating to the Holidays Act were not raised earlier.

Mental health Mental health and addiction is one of the Government’s key priority areas. We discussed the Government’s mental health inquiry and resulting report, He Ara Oranga: Report of the Government Inquiry into Mental Health and Addiction, which was released in December 2018. The ministry said it is excited about responding to the inquiry and the significant investment that is being put into mental health. It mentioned the importance of focusing on suicide prevention and primary healthcare.

The mental health inquiry provided an indicative target to increase the provision of primary mental health services from 7 to 20 percent. We are interested whether the ministry is working to this target.

Mental health workforce The ministry is dealing with challenges in the mental health workforce. We heard that growing the workforce is key to ensuring that mental health services are delivered effectively. The ministry is working to grow this workforce. It has established a mental health directorate to bring mental health functions and leadership together within the ministry. Funding was provided in Budget 2019 to improve both the workforce’s capability and capacity.

Primary mental health The ministry confirmed that its aim is, by the end of the new frontline service for mental health’s five year implementation period, to see 325,000 people access primary mental health services each year. The ministry added that the investment into digital and telehealth services should broaden New Zealanders’ access to mental health services.

We look forward to seeing how the ministry evaluates changes in the provision of primary mental health services to ensure that the investment occurs in the right places.

Suicide prevention The ministry has released the Suicide Prevention Strategy 2019–2029, including the establishment of the Suicide Prevention Office. The Suicide Prevention Office will initially be housed in the Ministry of Health and will eventually become independent.

We note that the suicide rate decreased between 2012 and 2015, the latter being the most recent year of full data. However, despite the overall decrease, suicide rates increased for the 15–24 age range and for those in rural communities. We are concerned about this.

In particular, we are concerned that the suicide prevention strategy does not focus on rural suicide. Rural communities were identified in the He Ara Oranga report as one of the particular population groups that experience poorer mental health outcomes.

The ministry acknowledged that the difference between urban and rural suicide rates is an issue. However, it does not believe the suicide strategy excludes particular groups.

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The ministry believes that implementing the primary mental health initiative is fundamental to tackle high rates of rural suicide. It aims to intervene early and help people when they are experiencing mild to moderate health concerns.

We are interested to learn how the health system can learn from the overall reduction in suicides from 2012 to 2015, with the aim of reducing the number of suicides for those groups experiencing higher suicide rates. We look forward to an update at the ministry’s next annual review on how the Suicide Prevention Office is working and the Suicide Prevention Strategy is being implemented.

Mana Ake in schools We commend the ministry for its work on, and the initial success of, the Mana Ake programme for mental health in schools. This service is particularly important to have in Canterbury because of the unique mental health challenges this region faces.

However, we are concerned that the funding for Mana Ake might not continue. The ministry said that the programme’s funding was appropriated for two years. It told us that Mana Ake was one of several initiatives that the ministry will review to see if it should be renewed. We heard the ministry will look at how Mana Ake ranks as a priority against other mental health initiatives.

Disease outbreaks and vaccinations Over the past year, New Zealand has had concerning outbreaks of meningococcal disease, measles, and influenza. During all three outbreaks there was an undersupply of vaccines. This led to vaccinations being restricted to certain target groups. In some cases, target groups could not access the vaccines needed. For example, during the meningococcal outbreak in Northland at the beginning of 2019, there were not enough vaccines for those in the 5 to 12 age group. Some of us believe that vaccine management for these diseases has been poor.

The ministry pointed out that vaccinating populations during an outbreak is different from a vaccination catch-up campaign. It also said there are other barriers to vaccinations that are not to do with vaccine supply, such as the ability of the sector to deliver vaccinations to those who would benefit from it.

Measles outbreak The ministry said it sourced enough vaccines to address the measles outbreaks, in particular, the significant Auckland outbreak. As at the date of the hearing (13 November 2019), the ministry had secured an extra 100,000 doses of the vaccine, with 85,000 more on the way. The ministry believes there was enough measles vaccine because of careful management.

We are concerned that there is no routine policy to vaccinate 30- to 50-year-olds for measles despite the Minister of Health saying that everyone under 50 should be vaccinated. The ministry said it was managing current vaccine supply to ensure availability to those at the highest risk. The ministry said that once the outbreak was dealt with, it would look at

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vaccination catch-ups for groups who are not vaccinated. We look forward to hearing about the success of the catch-up measles vaccination campaign.

Health inequities We are interested in progress the ministry is making to eliminate health inequities between Māori and Pacific populations compared with other New Zealanders. The ministry believes it has made some progress, although acknowledges that equity issues remain a problem. We discussed the ministry’s work engaging with Māori to ensure that the ministry understands Māori health priorities and how best to address them. The ministry believes that it needs to meaningfully work with Māori, using their knowledge and learnings to shape better health services, and therefore better outcomes for Māori. We asked if any DHBs were responding well to equity challenges. We heard that DHBs in the northern and midland regions were establishing partnerships with local iwi boards. The ministry said that its re-established Māori health directorate can play a leadership role in helping support these kinds of initiatives and link the efforts of different DHBs.

The ministry has also been supporting the Waitangi Tribunal’s “Wai 2575” inquiry on health services and outcomes. The Waitangi Tribunal found that the Crown had an obligation under the Treaty to adequately protect the availability and viability of kaupapa Māori solutions, including enabling Māori to have the option of Māori or mainstream health providers. The ministry is working with Māori to support and strengthen kaupapa Māori services. This includes working more closely with iwi and Māori providers, and providing support for kaupapa Māori initiatives that are already operating. The ministry acknowledged that it is not exempt from unconscious bias in the health sector. We were interested in what the ministry is doing to combat that. We heard that it is considering what staff training to provide. Tackling unconscious bias is also part of the Māori Health Strategy, He Korowai Oranga, and Māori Health Action Plan. Some DHBs are also training providers to help eliminate unconscious bias.

Publishing of health system data In our report on the ministry’s 2017/18 annual review, we expressed concern that the monthly financial reports published on the ministry’s website had stopped. We are still concerned with the delay in publishing some health system data, particularly the publication of DHB financial performance data and the detailed data on elective surgeries undertaken by DHBs.

Some of us are concerned that the reports on DHB financial performance have been delayed with the Minister for several months. We asked what the ministry’s expectations were for the timely publishing of this data. The ministry collates this data from DHBs at the end of each month. It aims to have its report on each month’s data sent to the Minister within six weeks of the month ending, and to publish the data as soon as possible after the Minister’s approval. The ministry noted that it is the Minister’s responsibility to prioritise those reports relative to other papers. The ministry assured us that financial issues with DHBs are brought to the attention of the Minister. It stressed that it has regular discussions with the Minister about DHB performance, usually focused on individual DHBs.

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We mentioned the detailed data on elective surgeries that is no longer published on the ministry’s website. The ministry told us it is close to finalising a planned care approach and will regularly report on that once it is finalised. In the meantime, the ministry said it is actively monitoring DHB surgical volumes and ensuring they are appropriate for their populations.

We are frustrated at the lack of available data. We expect the ministry to work to address these delays.

Re-establishment of ministry directorates The ministry is continuing a restructure process that the Director-General started shortly after he began his role. The first phase was completed in 2018/19 and involved top level design of the organisation with a new executive structure and directorates. Directorates were established in four key areas to help better deliver the work programme: mental health and addiction, disability, Māori health, and workforce. The second phase, consultation with staff, started in June 2019. This phase affects staff across all levels of the ministry.

Hospital buildings The ministry is currently managing three hospital rebuild projects, in Christchurch, the West Coast, and Dunedin.

Both the Hagley Building (previously the “Acute Services Building”) at Christchurch Hospital and the Te Nikau and Health Centre Project (previously the “Grey Base Hospital”) on the West Coast experienced delays in 2018/19. While the projects have made progress, neither is likely to be completed by their original proposed opening dates.

The Dunedin Hospital build is the largest single health project in New Zealand. The project progressed in 2018/19 through the procurement of land and contractors for the inpatient and outpatient buildings. A business case is being prepared for consideration in the first half of 2020.

Information management system The ministry has interim responsibility for developing the Finance, Procurement and Information Management system (FPIM). The FPIM was intended to provide a shared finance, procurement, and supply chain system for all 20 DHBs. The aim was to reduce operating costs and enable savings through national procurement opportunities. The ministry outlined the various actions it is taking to ensure that the FPIM will be implemented and deliver results. However, we note that there have been delays to and reductions in scope of the implementation of the FPIM. We note that, under the business case approved by Cabinet in June 2019, only 10 DHBs will start using the system over the next two years.

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Appendix

Committee procedure We met on 13 November 2019 and 4 March 2020 to consider the annual review of the Ministry of Health. We heard evidence from the ministry and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry of Health).

Ministry of Health (Responses to written questions).

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Report of the Health Committee

March 2020

Contents Recommendation ...... 2 About Pharmac ...... 2 Financial position and audit opinion ...... 2 Pharmac’s expanding role ...... 3 Equity of access ...... 3 Transparency of decision-making...... 4 Cancer action plan ...... 5 Reducing times for assessing medicine applications ...... 5 New medicines...... 5 Vaccine management ...... 6 Lamotrigine brand switch ...... 7 Appendix ...... 9

Louisa Wall Chairperson

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Pharmaceutical Management Agency

Recommendation The Health Committee has conducted the annual review of the Pharmaceutical Management Agency (Pharmac) for 2018/19, and recommends that the House take note of its report.

About Pharmac Pharmac is a Crown agent that decides which pharmaceuticals are publicly funded in New Zealand. Its work includes:

• managing and maintaining the Pharmaceutical Schedule—the list of prescription medicines and therapeutic products subsidised by the Government • managing the Combined Pharmaceutical Budget—the funding decided by the Minister of Health for pharmaceuticals • managing the medicines and related products used in public hospitals • considering funding applications for people with exceptional clinical circumstances • promoting the responsible use of pharmaceuticals • engaging in relevant research. Pharmac describes its mission as being to, within the fixed budget, choose medicines to fund that will get the best health outcomes for New Zealanders.1

Financial position and audit opinion In 2018/19, Pharmac’s total revenue was $36.51 million and its expenditure was $26.68 million. This compares with revenue of $24.45 million and expenditure of $28.64 million in 2017/18. This resulted in a surplus of $9.82 million, compared with a deficit of $4.19 million the previous year.

The Auditor-General issued a standard audit report. This means he was satisfied that the information audited fairly presented Pharmac’s activities for the year and its financial position at the end of the year. The Auditor-General graded both Pharmac’s management control environment, and financial information and supporting systems and controls as “very good”. He made no recommendations for improvement.

Pharmac’s performance information and supporting systems and controls were rated as “good”, as they were for 2017/18. The Auditor-General recommended some improvements.

The Auditor-General noted that Pharmac would benefit from updating its performance framework to, among other things, more accurately reflect its expanding role. We note that

1 PHARMAC Te Pātaka Whaioranga Annual Report for the year ended 30 June 2019, p. 8. 2

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Pharmac intends to review its performance framework when preparing its next Statement of Intent.

Pharmac’s expanding role Transfer of the budget for hospital medicines Before the 2018/19 year, district health boards (DHBs) managed the budget for hospital medicines and Pharmac managed the budget for community medicines. In July 2018 the budget for hospital medicines was transferred to Pharmac. Its budget increased from $870.8 million to $985 million to support that transfer.

Some of us are concerned that the messages about this budget increase gave the perception that Pharmac had received more funding for medicines. Instead, most of the funding was to support the transfer of the hospital medicines budget. Pharmac said that this increase in budget had increased its purchasing power, which has enabled Pharmac to fund the purchase of more hospital medicines.

Savings generated through procurement of medical devices Since 2012 Pharmac has also procured medical devices for DHBs. Its role is currently limited to negotiating prices and contracts for suppliers. DHBs retain management of budgets for purchasing devices and decide what devices are publicly funded. Pharmac aims to eventually assume full budget management for this as well. Its goal is to generate $1 billion in savings from procurement of medical devices by 2025.

Pharmac acknowledges that the $1 billion goal is optimistic and is unlikely to be reached. Based on supplier information provided to Pharmac, it estimates savings from Pharmac hospital medical device agreements will be approximately $60 million by June 2020. This figure assumes that DHBs have not changed their usage patterns as a result of Pharmac’s contracts.

Pharmac told us that it receives increased funding not only through the Budget, but also through savings it makes; in 2018/19 it achieved $75 million in savings. Some of us noted that this would only be an increase in funding if Pharmac was able to keep the savings. Instead, any savings are spent on other health and disability services. Some of us believe it is misleading to suggest that savings allow Pharmac to purchase more medicines, when it actually means that Pharmac was able to purchase the same for less.

Equity of access Pharmac aims to eliminate inequities in access to medicines by 2025. This work targets Māori, as Treaty partner, but also Pacific peoples, people living in high socioeconomic deprivation, people living in rural and isolated areas, and people who have been refugees.2 Its actions towards achieving this goal include establishing a framework for measuring and monitoring equitable access to medicines. It has also established a baseline for measuring the rate of medicines dispensed to Māori compared to non-Māori.

2 Pharmac, Achieving medicine access equity in Aotearoa New Zealand: towards a theory of change.

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We expressed concern that already-funded medicines are not being accessed by those groups who need them most. For example, Māori and Pacific men over the age of 65 have low rates of accessing medicines to treat gout arthritis, despite having high rates of this disease. We asked how Pharmac intends to improve the access of medicines to the people who need it most.

In the 2018/19 year, Pharmac has focused on ensuring at-risk populations can access funded medicines that would benefit them. We heard that ensuring equitable access to medicines is not a problem that Pharmac can solve on its own. Other barriers to accessing medicines exist, such as the ability to visit a GP. Pharmac wants to work with others in the health sector to address these barriers. Pharmac told us that its procurement process for medicines is becoming more informed by equity issues and how to ensure people who will benefit the most from a medicine receive treatment.

We asked Pharmac what population groups, in addition to Māori, it is working with to achieve more equitable access to medicines. Pharmac said it is developing links with the Pacific population, including supporting the formation of the Pacific Pharmacists Group. Rather than a top-down approach, Pharmac believes it is important to build networks with community groups and support them to ensure patients can access treatment.

Transparency of decision-making Pharmac and the Minister of Health have identified improving the transparency of Pharmac’s decision-making as a key priority for the organisation.

In August 2019 Pharmac launched PHARMConnect, an online tool that can be used by suppliers, clinicians, and consumers to make medicine funding applications. It also allows the public to track the progress of funding applications. Pharmac has not measured or sought formal feedback from stakeholders on the effectiveness of PHARMConnect in improving its transparency. However, we heard that it has received positive anecdotal feedback.

In the past, there has been uncertainty about where a medicine application is in Pharmac’s system. Pharmac believes its “Close Out” project will increase clarity for consumers. This project clears inactive applications in the system by declining them. Pharmac assured us that if an application is declined, it can be re-admitted into the system.

Pharmac is also looking at how to engage consumers sooner in the process of funding applications. It is reviewing the role of the Consumer Advisory Council, which advises Pharmac on strategy, operations, and communications. The Council includes people from a range of backgrounds, including Māori, Pacific people, older people, and people with chronic diseases.

Other actions to improve transparency include halving the time it takes to produce records of Pharmacology and Therapeutics Advisory Committee (PTAC) and subcommittee meetings, and publishing those records, board minutes, and Official Information Act requests to its website.

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Cancer action plan In February 2020 the Government launched the New Zealand Cancer Action Plan Te Maherere mō te Mate Pukupuku o Aotearoa 2019–2029. The plan identifies Pharmac as having a key role.

One of the actions identified for Pharmac was undertaking earlier assessment of new medicine applications. From January 2020, Pharmac began accepting funding applications for cancer medicines while they are still being assessed by Medsafe. Doing both assessments at the same is intended to reduce the time for applications to reach Pharmac’s list of options for funding. Pharmac believes that 12 months will be saved per application through implementing this change. Pharmac already does this parallel assessment for medicines for rare disorders and aims to expand this process to all medicines in the future.

Another action for Pharmac identified in the cancer action plan is developing options for early access to new cancer medicines. Pharmac is still working on how this sort of scheme would work in New Zealand. It noted that its work reducing the time it takes to assess medicines is different to an “early access scheme”. A parallel assessment of medicines may cause a medicine to be funded more quickly. An “early access scheme” allows medicines, which do not have the level of efficacy that is normally required to be funded, to be accessed.

Reducing times for assessing medicine applications We are concerned about the length of time Pharmac takes to assess funding applications. Between 2011 and 2017 the time taken was two to three times slower compared with other OECD countries—an average of 512 days compared with 233 days.

Pharmac noted that other countries operate different models for decision-making and funding medicines than New Zealand. For example, the equivalent agency in the United Kingdom is not responsible for funding a medicine that is approved; that is the hospital’s role. This means that medicines move through the system more quickly, because the agency does not consider funding. Pharmac believes that different systems partially explain why there is a perceived “delay” of funding medicines in New Zealand.

As previously mentioned, Pharmac is taking steps to reduce the wait time. For cancer medicines, Pharmac hopes it will reduce by a year. Additionally, the “Close Out” project removes medicines from the system that have been given low priority for funding or that PTAC has recommended are declined. This will decrease the average wait time for applications and remove medicines that are unlikely to be funded.

While reducing the application times for medicines is important, Pharmac said there is a limit. Assessments by Pharmac and its subcommittees need a high level of accuracy and DHBs need time to prepare for any changes that Pharmac makes. However, Pharmac is committed to removing any obstacle where it can.

New medicines In September 2019, Pharmac received an additional $60 million in funding over the next two financial years to enable it to fund new medicines. We were pleased to hear that Pharmac

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2018/19 ANNUAL REVIEW OF PHARMAC has been able to fund nine new medicines and widen access to a further 26. As a result, it has expanded access to an additional 138,000 patients.

Hepatitis C Maviret, a new treatment for hepatitis C, has been funded since the beginning of 2019. Pharmac noted that this medicine was a cure for 99 percent of patients. While it is an expensive medicine, it is cost effective for the health system because it prevents more severe illnesses. Around 3,500 New Zealanders have received the treatment and been cured of hepatitis C. Pharmac is now working with the health sector to raise awareness of this treatment.

Rare disorders As we are currently considering several petitions related to the funding of medicines for rare disorders, we are interested in Pharmac’s process for deciding whether to fund these medicines.

In 2014 a pilot was set up to fund medicines for rare disorders, with $5 million of funding over five years. Ten new medicines were funded through the pilot. After evaluating the pilot, Pharmac has changed its processes for funding rare disorders. These include allowing rare disorders medicines to enter the system before being registered, and setting up a rare disorders subcommittee to consider funding applications.

We asked Pharmac why this pilot is no longer continuing. Pharmac told us that its funding of rare disorders is now “business as usual”. Applications go through a process that allows them to get to the final stages, which was difficult under its previous approach. We heard that Pharmac is spending above the amount originally intended by the pilot on rare disorders medicines.

Vaccine management Pharmac is responsible for procuring vaccines in New Zealand. We are interested in how Pharmac responded to the outbreaks of influenza, meningococcal, and measles in 2019.

Measles Some DHBs have told us that there were times during the measles outbreak where they had a shortage of measles vaccines. We asked Pharmac whether there had been a supply shortage.

Pharmac believes that it secured enough vaccines during the measles outbreak. It targeted high-risk groups and distributed over 370,000 vaccines, which is two and a half times more than the previous year. However, Pharmac acknowledged that there had been distribution issues when trying to ensure vaccines were spread appropriately across the country. We heard that Pharmac worked closely with the Ministry of Health, vaccinators, and DHBs to ensure that stock was moved to where it was needed to target high-risk groups.

Meningococcal In December 2018 the Ministry of Health and Northland DHB began a meningococcal vaccination programme in response to an outbreak of meningococcal W. Some of us are 6

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2018/19 ANNUAL REVIEW OF PHARMAC concerned that not enough vaccines were made available for that purpose. Pharmac noted that the clinical advice at the time was that the campaign should target two priority groups, 9- month to 4-year-olds and 13- to 19-year olds. Pharmac said that it was able to secure enough stock to target those groups, although it noted that uptake (about 65 percent) was poor in those groups.

Pharmac told us that it would have secured more stock if the ministry had indicated that it wanted to widen the campaign. Pharmac noted that it had secured 12 times the normal amount of stock for the campaign. Pharmac was also aware that outbreaks could happen in other parts of the country, and it needed to be able to access stock in those instances. It sent an additional 5,000 vaccines to Northland DHB when it was needed.

During the outbreak, Pharmac was offered an additional 30,000 vaccines from a supplier but decided on a cost–benefit analysis that they should not be purchased. Some of us are concerned that Pharmac withheld that information from the Ministry of Health when the ministry was organising the vaccination programme. Pharmac emphasised that it is responsible for making funding decisions about how the pharmaceutical budget is spent, not the ministry. Pharmac said it dealt with the outbreak to the best of its ability with the clinical advice that it had and the amount of stock it could secure.

Lamotrigine brand switch Lamotrigine is a medicine used to treat epilepsy and some mental health conditions, such as bipolar disorder. In October 2019, after a five-month transition period, Pharmac changed the funded brands of lamotrigine (Lamictal, Arrow-Lamotrigine, and Logem) to Logem only. Pharmac told us that about 9,000 of the 11,000 people who are prescribed lamotrigine have switched to Logem.

We expressed concern that Medsafe had raised issues with this drug switch and that Pharmac still implemented it. Pharmac said that it delayed the switch, originally intended for December 2018, as a response to the advice it had received from Medsafe. Pharmac took all of these concerns to a meeting of its neurology and mental health subcommittees. The subcommittees gave clinical advice that it was fine to proceed with the switch. Based on feedback from both Medsafe and the subcommittees, Pharmac changed how it implemented the switch.

In November 2019 Pharmac widened its access to the exceptions scheme for the brand switch. We heard that patients had rising levels of anxiety about the brand switch and Pharmac wanted to give them the option to switch back. This was based on Pharmac’s concern that people would stop taking their medicine.

Since the brand switch, the Centre for Adverse Reactions Monitoring (CARM) has received reports about patients experiencing adverse effects.3 As at the date of our hearing (12 February 2020), five deaths had been reported to CARM. The coroner is currently reviewing these cases. Pharmac emphasised that it was appropriate to wait for the coroner’s review before making comments on the deaths of epileptic patients that might have been

3 Medsafe, Suspected adverse reaction reports to lamotrigine after changing brands.

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2018/19 ANNUAL REVIEW OF PHARMAC associated with the brand switch. Pharmac is not involved in the coroner’s review, but it is assisting the coroner when requested.

In addition to the coroner’s review, Pharmac has commissioned an independent review into its process for brand changes. Pharmac said it often commissions reviews after it has implemented big transactions and had done so with other brand switches. The independent review focuses on the process and implementation of the switch. We were told that the review would take several months.

We have been considering a petition about the drug switch for Enlafax, an anti-psychotic medication. We wondered whether Pharmac would consider widening the exception criteria for Enlafax, given that it widened the exceptions for the switch to Logem. Pharmac said it was not aware of any recent issues around Enlafax and there is already an exception system, which is open for any brand switch. We are surprised at this response, given the publicity around the Enlafax brand switch and this committee’s consideration of a petition in opposition to it.

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Appendix

Committee procedure We met on 12 February and 18 March 2020 to consider the annual review of Pharmac. We heard evidence from Pharmac and received advice from the Office of the Auditor-General.

Committee members Louisa Wall Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Agnes Loheni participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing paper on Pharmac).

Pharmaceutical Management Agency (Responses to written questions).

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2018/19 Annual review of the Southern District Health Board

Report of the Health Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial overview and audit opinion ...... 2 Dunedin hospital project ...... 3 Failure to adequately treat bowel cancer in Southland ...... 3 Preparation for outbreak of COVID-19 virus ...... 4 Availability of vaccines during measles outbreak ...... 4 Mental health treatment ...... 4 Southern DHB’s maternity strategy ...... 5 Appendix ...... 6

Louisa Wall Chairperson

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2018/19 Annual review of the Southern District Health Board

Recommendation The Health Committee has conducted the annual review of the Southern District Health Board for 2018/19, and recommends that the House take note of its report.

Introduction The Southern District Health Board (DHB) is responsible for the health of 332,000 people living in the Southland and Otago districts. It is the largest DHB in the country by geographic area.

Invercargill and Dunedin represent the two main centres for the DHB. In the area covered by the DHB, Māori make up 10 percent of the population (the national average is 15.7 percent). Asian people make up 8 percent of the population (national average 15 percent), and Pasifika make up 2 percent (national average 6.5 percent).

David Cull is the new chairperson of the Southern District Health Board, and Chris Fleming is its chief executive. During the period that that this annual review covers, the DHB was governed by a commissioner, Kathy Grant. Ms Grant had been in the commissioner role since 2015. We wish to recognise the extremely challenging position that Ms Grant took on as commissioner of the DHB, and we thank her and the previous deputy commissioners for their work.

Financial overview and audit opinion The Southern DHB’s revenue in 2018/19 was $1.03 billion. Its expenditure was $1.12 billion. This resulted in a deficit of $89.3 million against a budgeted deficit of $22.4 million. Of this deficit, $39.2 million was due to one-off costs for Holidays Act 2003 non-compliance and impairment of the Finance, Procurement and Information Management system. This compares with a deficit of $21.4 million in 2017/18.

The Auditor-General noted that the main reasons for the $50.1 million deficit unrelated to one-off costs were increased staff costs and the escalating cost of medical supplies. The DHB’s budgeted deficit for 2019/20 is $32.9 million.

The Auditor-General issued a non-standard audit report on the financial statements of the Southern DHB. This was due to the high level of uncertainty about the provision the DHB has made to address the underpayments to its staff as a result of non-compliance with the Holidays Act. The DHB has received a letter of comfort from the Ministers of Health and Finance that confirms the Crown will provide the DHB with support, should it be necessary, to remain viable.

The Southern DHB’s financial information and supporting systems and controls, and its performance information and supporting systems and controls were both rated “good”. The 2

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Auditor-General recommended some improvements for both. However, he rated its management control environment as “needs improvement”. He recommended major improvements at the earliest reasonable opportunity. These improvements related to asset and contract management, and actions to ensure policies are up to date and fit for purpose.

Dunedin hospital project The Ministry of Health has purchased land to build a new hospital in Dunedin. The site of the new hospital will encompass the sites of the former Cadbury factory and a neighbouring car park. The ministry intends demolition work to start in March of this year. The first part of the hospital to be built will be the day surgery unit and outpatients clinic; these are intended to start operating towards the end of 2023 and 2024, respectively. These units are being built first because the current Dunedin Hospital does not have adequate capacity for day surgery. The ministry expects the hospital’s acute inpatient building to be completed in about 10 years.

We heard that, although the Southern DHB is not responsible for the hospital build, it is providing support and clinical input to the Ministry of Health. This is to ensure continuity of services and to help with the configuration of the hospital.

Acknowledging it is ultimately the ministry’s responsibility, we asked whether there have been problems with getting the Treasury to agree to the hospital’s detailed business case. We heard that under the ministry’s current funding system, none of the options that the business case lays out are affordable. The chief executive told us that his job is to make sure that the new hospital needs to be big enough to make it worth rebuilding. At the same time, it needs to be small enough that the size does not result in less money for health services.

We heard that the size of the hospital as laid out in the initial business case was unrealistic. Also, there would have been room in the meeting rooms for up to 80 percent of the hospital’s staff at the same time. The DHB told us that there are “some tensions” within the DHB’s clinical leadership group regarding the necessary size of the hospital. Some of us were concerned to hear that the disagreements related to the hospital’s size. We also discussed clinicians’ involvement in these discussions. We heard that the available space in a hospital affects the space available for medical services, lifts, and travel through the hospital. The Southern DHB considers that these elements are all relevant for clinicians to be concerned with.

Failure to adequately treat bowel cancer in Southland The Southland area has one of the highest per capita rates of bowel cancer in New Zealand. In 2019, an audit report commissioned by the Southern DHB was published, which found that patients in Southland are being made to wait too long for treatment. There are also dysfunctional relationships within the Southern DHB’s gastroenterology department in Dunedin, as well as between the gastroenterology department and clinicians at Southland Hospital.

We heard that the deterioration of the working relationships is something the leadership is working to solve. We expressed frustration that members of the community are getting sick

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2018/19 ANNUAL REVIEW OF THE SOUTHERN DISTRICT HEALTH BOARD and dying while the DHB is struggling with internal conflicts. We expect to see an approach from the Southern DHB that can reassure the public that their health needs are being prioritised.

We heard that the Southern DHB’s bowel screening programme is going very well, with particularly excellent engagement results for Māori. This is encouraging. However, if patients, particularly in Southland, are symptomatic and need follow-up colonoscopies, the DHB has struggled to provide these. This is due to the previously mentioned relationship issues, and apparent process issues relating to internal referrals.

Preparation for outbreak of COVID-19 virus Our hearing with the Southern DHB was held before the World Health Organization declared the spread of the COVID-19 coronavirus a pandemic, and before any cases of the virus were confirmed in New Zealand. We asked what plans the Southern DHB had to protect the Southern community from the virus and contain it if it was found in the Southern area.

We heard that the DHB had set up processes in all of the primary parts of the health system in which people might present with the virus. The DHB said it was confident that everyone within the healthcare system had received the right information, equipment, and contact points. The DHB had tested “a steady stream” of largely tourists who showed symptoms of the virus, and had found no cases at that point. A subsequent reduction in people travelling in the region meant that the number of people being tested also fell.

At the time of our hearing, the DHB was preparing a strategy to pool as many public health resources as possible if the virus reached the district. We heard that the DHB was in the process of adapting its previous H1N1 influenza plans, in the event of a sustained spread of the coronavirus in New Zealand. The DHB discussed the need to maintain services for patients whose needs do not relate to COVID-19. It pointed out that during the SARS outbreak in Toronto, the biggest harm was to patients who could not receive adequate treatment due to the disruption caused by the virus.

Availability of vaccines during measles outbreak Prior to our hearing, we asked the Southern DHB whether it had a shortage of the measles vaccine around the time of the measles outbreak in 2019. The DHB said that it had a “limited supply” between 12 September and 4 November. When asked to clarify this, the DHB said that Queenstown had the highest per capita level of measles in the country, which caused a burden on the community. The DHB would have preferred to have had faster access to the vaccine, and at a higher volume.

Mental health treatment Child and adolescent services We are concerned to note that the Southern DHB’s child and adolescent mental health service has seen a 25 percent increase in wait times to see a professional. We heard that improving its mental health service is a priority for the DHB. It told us that Invercargill currently has only a 0.6 full time equivalent in the child and youth psychiatrist role. We heard

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2018/19 ANNUAL REVIEW OF THE SOUTHERN DISTRICT HEALTH BOARD that the DHB plans to work more effectively with non-governmental organisations and community providers, so that care is shared amongst a larger pool of staff.

Some of us wanted to know what share the Southern DHB has seen of the Government’s $1.9 billion investment in mental health. The DHB told us that it has not yet received the funding and is still in the proposal process. We heard that although Southern DHB was not in the first tranche of providers who had received funding from the Ministry of Health, it has been accepted onto the shortlist for the second tranche, subject to contract negotiations and funding agreements.

The Southern DHB expects that its contract for this additional funding will start on 1 July 2020, and it is working to prepare for that.

Southern DHB’s maternity strategy In 2019 we deliberated on a petition that asked the Government to keep the Lumsden Maternity Centre as a primary birthing unit. This was instead of being transitioned to a “maternal and child hub”, as part of the Southern DHB’s maternity strategy for the region. As part of the petition process, we resolved to regularly follow up with the Southern DHB on its progress with implementing safe and practical facilities for mothers and their babies.

The Southern DHB told us that the reason for the review of its child and maternity services was that there was an inequitable spread and coverage of its services. It also faced a number of workforce-related issues.

The DHB also pointed to the fact that there are still holes in its service coverage under its new strategy, particularly in Wānaka and Te Ānau. The Wānaka area averages more than 200 pregnancies over the course of a year whose mothers live more than one hour away from a primary birthing facility. Te Ānau is now one and a half hours from a primary birthing facility, when it used to be only one hour under the old model.

The Southern DHB also noted that it has concerns with the funding model for lead maternity carers. These positions do not function as intended in rural areas. For example, midwives may be expected to travel with a mother from Wānaka to Invercargill, while leaving the other women in their area who may also need their help.

We discussed the Southern DHB’s communication with the affected communities and local midwives. The DHB did not agree with some of the community members we have spoken to about the extent to which the communities had been consulted. Some of us consider that there appears to have been tensions between the DHB and some of the community members. We would like to see the Southern DHB make efforts to repair the relationship with its community.

The Southern DHB commissioned an Ernst and Young report into the implementation of the DHB’s maternity strategy, which was released in October last year. The report was critical of the DHB’s management processes during and after the implementation. The chief executive told us that he thought the report’s findings and recommendations were “fair”.

We intend to continue to follow the progress that the Southern DHB makes on implementing its maternity strategy.

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Appendix

Committee procedure We met between 12 February and 18 March 2020 to consider the annual review of the Southern District Health Board. We received evidence from the Southern DHB and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Southern District Health Board).

Southern District Health Board (Responses to written questions).

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2018/19 Annual review of the Tairawhiti District Health Board 2018/19 Annual review of the Taranaki District Health Board 2018/19 Annual review of the Wairarapa District Health Board

Report of the Health Committee

March 2020

The Health Committee has conducted the annual reviews of the Tairawhiti DHB, the Taranaki DHB, and the Wairarapa DHB for 2018/19, and has no matters to bring to the attention of the House. The committee recommends that the House take note of its report.

Louisa Wall Chairperson

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2018/19 Annual review of the Waikato District Health Board

Report of the Health Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial overview and audit report ...... 2 Changes to staffing approaches at the Waikato DHB ...... 3 Holidays Act 2003 accruals ...... 3 The Waikato DHB is making progress towards its financial targets ...... 4 Accessibility is a priority for the DHB ...... 4 Plans for a new acute mental health facility in Waikato ...... 4 Future-proofing Waikato’s health services ...... 5 National Oracle Solution ...... 5 Acknowledgement of the DHB in response to the Whakaari / White Island eruption...... 6 Appendix ...... 7

Louisa Wall Chairperson

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Waikato District Health Board

Recommendation The Health Committee has conducted the annual review of the Waikato District Health Board for 2018/19, and recommends that the House take note of its report.

Introduction The Waikato District Health Board (DHB) provides and funds health services to the Waikato district. It serves an estimated 419,850 people in an area of over 21,000km2. It has the fifth largest population of the 20 DHBs in New Zealand, and has a larger proportion of people living in areas of high deprivation than in areas of low deprivation. The Waikato region’s Māori population is estimated to be 23 percent, which is higher than the national average of 16 percent. The Waikato DHB employed 7,767 people in 2018/19.

In May 2019, the Minister of Health dismissed the Waikato DHB board because of dissatisfaction with the DHB’s performance. In particular, he cited its financial position and ongoing performance issues with clinical services as areas of concern. The board was replaced with a commissioner, Dr Karen Poutasi, and three deputy commissioners. The New Zealand Public Health and Disability (Waikato DHB) Elections Act 2019 received Royal assent in July 2019. It exempted the Waikato DHB from holding a board election until 2022, to allow the commissioner to carry out her duties to the Minister’s satisfaction.

Dr Kevin Snee is the chief executive of the Waikato DHB.

Financial overview and audit report The Waikato DHB had total revenue of $1.522 billion in the 2018/19 financial year (an increase of about 5.5 percent from $1.442 billion in 2017/18). Total expenditure was $1.642 billion. This resulted in a deficit of $119.764 million, $63.693 million more than its budgeted deficit of $56.071 million.

The deficit includes a provision of $34.84 million for underpayments to staff as a result of non-compliance with the Holidays Act 2003.

Results of the annual audit The Auditor-General issued a non-standard audit report. He noted a high level of uncertainty about the $34.84 million estimated provision for Holidays Act 2003 compliance. This resulted in the Auditor-General qualifying his opinion of the DHB, as he has done with most other DHBs for this period.

The Auditor-General also highlighted four main areas which exceeded the DHB’s budget in 2018/19: personnel costs, outsourced services, clinical supplies, and infrastructure and non- clinical expenses.

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Changes to staffing approaches at the Waikato DHB Increased staffing levels contributed to a financial deficit We noted that one of the contributing factors to the Waikato DHB’s deficit was a significant increase in staff. The DHB acknowledged that there had been a lack of control and accountability when recruiting new staff over the past 18 months. It said that departments were not communicating with each other about staffing needs, and that most requests for additional staffing were agreed to. Hiring new staff also did not necessarily result in increased efficiency.

The Waikato DHB is now bringing similar services together to use staff more effectively. As a cost-saving measure, it is reducing contracted staff and relying more on core staff. The DHB is also hoping to reduce the pressure on hospitals by upskilling health workers in the community.

Funding of multi-employer collective agreements for DHB staff Some of us expressed concern that increases to DHB staff salaries through multi-employer collective agreements (MECA) have caused increased financial pressure.

The Waikato DHB responded that it was almost entirely funded for the direct effects of MECA increases through Vote Health. However, it said it had not been funded for the flow- on effects such as re-evaluation of accrued leave and sabbaticals. It said these actuarial calculations would amount to $400,000 for the 2019/20 financial year.

The Waikato DHB aims to increase Māori representation on staff The Waikato DHB aims to increase Māori representation in its workforce from 8.9 percent to 13.5 percent by 2022/23. We heard that the chief executive noticed that the workforce at Waikato Hospital did not appear to reflect the demographics of the Waikato region. He also noticed Waikato Hospital had a lack of bilingual Māori/English signage, and that overall there was little indication that the Waikato region has the largest Māori population in New Zealand. The chief executive said that support for cultural awareness and unconscious bias training in the DHB is very limited.

The Waikato DHB currently has initiatives within the DHB to change the organisational culture and focus on creating a culturally safe environment. It acknowledged that increasing representation would take significant work and time. We expressed concern that its goal is 10 percent lower than the actual percentage of Māori people living in Waikato. The DHB said it wants to raise the percentage significantly over time, but has set an achievable initial goal.

We also encouraged the DHB to expand its efforts to increase representation towards other minority groups, such as people with disabilities.

Holidays Act 2003 accruals DHBs have acknowledged significant underpayments to DHB employees due to non- compliance with the Holidays Act 2003. These underpayments have been caused by configuration errors in DHBs’ payroll systems, and date back to 2010.

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The Waikato DHB said that calculating the liability of underpayments is a complex process that has taken a long time. It is now working with Ernst and Young (EY) to extract a sample of the required data. We asked how Waikato DHB reached its initial estimate of $34.84 million if it is only starting calculations now. It said it has calculated estimates previously, but it is now working with EY on more detailed calculations. The Waikato DHB has provided EY with a range of payroll data to analyse, and expects sample outcomes in the first half of April 2020. EY has also worked with the Auckland DHB on Holiday Act 2003 provisions.

The Waikato DHB is making progress towards its financial targets We were pleased to hear that Waikato DHB is showing progress towards its financial goals. It has projected savings of $28 million in 2019/20. It is currently $2 million short of its year-to- date targeted savings as of February 2020.

The Waikato DHB highlighted that a significant culture change has taken place to make the DHB more accountable to its budget. It said it is taking its budget seriously and has worked hard to achieve the results seen so far.

Accessibility is a priority for the DHB We asked the Waikato DHB about its approach to accessibility. We are concerned that often the most vulnerable populations, such as rural Māori, are the least likely to have access to health services. In particular, we asked how the DHB is improving access for vulnerable populations to the National Screening Unit. This unit aims to reduce health inequities through various screening programmes (such as bowel screening, cervical screening, and mammograms).

The Waikato DHB said it is prioritising accessibility and equity. It acknowledges that screening is not currently easily accessible for all populations in the Waikato region, and it plans to improve this. The DHB will be implementing bowel screening next year, and it is reconsidering how accessible and comfortable its breast screening buses are.

The Waikato DHB highlighted the need to work with family, whānau, and communities to increase accessibility when developing services.

Plans for a new acute mental health facility in Waikato In October 2019 the Government announced $100 million in funding for a new acute mental health facility in Waikato. We asked about the expected time frame for this project, and how it would affect patients and DHB staff.

The Waikato DHB is preparing an indicative business case on the mental health facility, which will first be reviewed by its commissioners. This will then be submitted to the Ministry of Health’s capital investment committee by May 2020. Two more business cases will be required as part of the process. The DHB expects building work to begin on the facility in 2022/23.

The current proposition is for the facility to have 60 to 70 adult mental health beds. The DHB is focusing on making sure the mental health facility will meet future needs of its population, 4

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2018/19 ANNUAL REVIEW OF THE WAIKATO DISTRICT HEALTH BOARD as well as current demand. It is also looking at ways to minimise the need for admission into a facility. This would include providing early acute care in the community, and developing programmes for people with high and complex needs that take place outside of an acute inpatient unit.

Future-proofing Waikato’s health services We are interested in any other ways Waikato DHB is preparing for the future needs of its population. In our annual review hearing with the Counties Manukau DHB, we heard that it sees potential for a hospital in an area that would service both Counties Manukau and the Waikato. We asked if the Waikato DHB had discussed this with the Counties Manukau DHB. The Waikato DHB said it has been focusing on resolving its own internal issues (particularly its finances) before considering collaborative work with other DHBs. However, it is interested in having a meeting with the Counties Manukau DHB representatives to discuss their ideas about a new hospital.

We were pleased to hear that Waikato DHB has been in discussions with the Counties Manukau DHB about its work to reduce rates of childhood obesity. The Waikato DHB highlighted that it is happy to make use of work that has proven results rather than trying to reinvent new strategies.

We also heard that the Waikato DHB is more engaged in future-proofing its services than previously. It has noted that although its current Pasifika population is low, it has been increasing. The DHB is considering what effect this may have on its service needs in the future.

National Oracle Solution The National Oracle Solution (NOS) was a financial management and procurement system for DHBs. It was developed by New Zealand Health Partnerships1 with the aim of allowing all DHBs to use the same system to order, track, and pay for supplies. The original business case for the system was approved in 2012. Due to a number of challenges and delays its development was suspended in 2018. The Ministry of Health announced in August 2019 that it would be superseded by a new Health finance, procurement, and information management system (FPIM).

We were interested in Waikato DHB’s involvement in the development of the NOS. Waikato DHB informed us that there had been some inaccurate reporting: its only role had been in engaging with the programme as part of a first wave of DHBs trialling the system. It noted that one Waikato DHB staff member was temporarily made available to the NOS project as programme director, at no cost to the sector. As a result, some of the NOS programme team were temporarily located at Waikato DHB. However, the DHB said that for the purposes of the NOS the programme director was working for Health Partnerships Limited.

1 New Zealand Health Partnerships is a multi-parent Crown-entity subsidiary and limited liability company, supported and owned by New Zealand’s 20 DHBs.

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Acknowledgement of the DHB in response to the Whakaari / White Island eruption We wish to acknowledge the important role the Waikato DHB has had in treating patients after the Whakaari / White Island volcanic eruption on 9 December 2019. We thank staff for the high level of care provided to patients and whānau, and acknowledge the very long hours they have worked in order to provide that care.

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Appendix

Committee procedure We met on 19 February and 18 March 2020 to consider the annual review of the Waikato District Health Board. We heard evidence from the DHB and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Waikato District Health Board).

Waikato District Health Board (Responses to written questions).

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2018/19 Annual review of the Whanganui District Health Board

Report of the Health Committee

March 2020

Contents Recommendation ...... 2 Whanganui District Health Board ...... 2 Financial performance ...... 2 Non-financial performance ...... 3 Māori health ...... 3 Vaccines and immunisation ...... 5 Maintaining a specialist workforce ...... 5 Appendix ...... 6

Louisa Wall Chairperson 360

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Whanganui District Health Board

Recommendation The Health Committee has conducted the annual review of the Whanganui District Health Board for 2018/19, and recommends that the House take note of its report.

Whanganui District Health Board Whanganui District Health Board (DHB) is responsible for the health of 64,595 people living in Whanganui, Marton, Taihape, Raetihi, Ohakune, Waiouru, and surrounding areas. It is New Zealand’s fifth smallest DHB by population.

Whanganui’s population is slightly older than the national average; 27 percent are Māori, 5 percent Asian, and 3 percent Pasifika. Whanganui district has high rates of deprivation and poor health status compared to most other areas of New Zealand.1 Dot McKinnon was the chair of Whanganui District Health Board for the period under review; Ken Whelan took over as chair from 9 December 2019. Russell Simpson is the chief executive.

Financial performance In 2018/19, Whanganui DHB reported a deficit of $13.7 million against a budgeted deficit of $7.9 million. This is substantially bigger than last year’s deficit of $4.2 million, and is mainly because of the following:

• $4.2 million to remedy non-compliance with the Holidays Act 2003

• $1.5 million in increased costs for outsourced services

• $2.6 million in increased payments for inter-district flows (IDFs)

• $1 million impairment of its finance, procurement, and information management (FPIM) system.

In 2019/20, Whanganui DHB expects a $12.6 million deficit. We heard that it intends to meet this target, despite being $1.2 million behind budget between July and September 2019. It has incurred the majority of this additional cost through IDFs for acute care—outsourcing patient care to other DHBs that provide services it cannot. We expressed concern that the DHB cannot control its need to outsource care, so the deficit could continue to grow. However, we heard that the DHB has remained within budget for its IDFs since that three- month period.

Results of the annual audit The Auditor-General issued a non-standard audit report. He noted that the DHB was unable to provide sufficient evidence to support its estimate of $4.2 million for non-compliance with

1 Whanganui District Health Board annual report, page 6: https://www.wdhb.org.nz/assets/Key- Docs/cd104055dd/WDHB-Annual-Report-2018-2019.pdf

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Non-financial performance We acknowledge that Whanganui DHB has a good culture of support for its wider community, beyond the management of Whanganui Hospital. However, we are concerned about the marked reduction in performance against its non-financial measures, a high number of which were not achieved.

Whanganui DHB noted that some of the results reflect the area’s smaller population, which means that a few patients can significantly affect the result. Also, some of the performance indicators are monitored quarterly, which can make the shift more substantial. However, we pointed out that this was a substantial change over the course of a year, with deterioration against several measures, which signals a trend of worsening performance.

Māori health In 2018, Whanganui DHB commissioned an independent pro-equity review to assess how well it is addressing its equity issues.2 The review found that, although the DHB has made visible commitments to equity and the Whānau Ora approach, it needs to back this up with pro-equity action. The review recommended that the DHB:

• strengthen leadership and accountability for equity

• build its Māori workforce and Māori health and equity capability

• improve transparency in data and decision making

• support more authentic partnerships with Māori. The DHB told us that it recognises that the executive leadership team needs to lead throughout all aspects of the DHB’s work, as opposed to placing responsibility on individual parts of the sector or solely on Whanganui’s Director of Māori Health. Whanganui DHB is working on its response to the review. We heard that this will include a specific Māori health care plan, which will be released in 2020/21.

In its 2018/19 annual report, Whanganui DHB acknowledges that there is “persistent inequity in health outcomes for Māori whānau”.3 This includes inequity of access to care, which can be affected by cost and the distance from health care providers for much of Whanganui’s rural population.

The DHB outlined some of the actions it has taken already, which have included:4

• training for management and staff on health equity and ways of improving equity

2 https://www.wdhb.org.nz/assets/Uploads/Documents/9cfc35bcfd/whanganui-dhb-pro-equity-report-december- 2018.pdf 3 Whanganui District Health Board annual report, page 7. 4 Whanganui District Health Board (Responses to additional written questions 366–389), pages 7–9.

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• running workshops with the DHB’s community partners to build their capability and capacity to achieve equity for Māori

• building on its recruitment strategy and creating a new retention strategy that focuses on Māori staff

• holding hui between Whanganui DHB and Hauora a Iwi, a forum made up of representatives of six iwi who act as strategic partners with the DHB.

Disparities in spending on Māori compared with non-Māori We note that, of the pharmaceutical health dollars spent per person in Whanganui, $199 was spent on Māori compared with $270 on non-Māori. There are also disparities in what was spent on Māori and non-Māori for specific treatments.5 We asked Whanganui DHB to explain this. It told us that the age of the populations seeking treatment was a prominent factor, with the district having a comparatively higher non-Māori population over the age of 65. For example, we asked why twice as much was spent on non-Māori than Māori for treatment of urinary tract infections (UTIs). Whanganui DHB explained that the average age of a Māori person presenting with a UTI was 48 years, whereas the average age for a non- Māori person was 70 years. The relative frailty of older patients means that they often need further treatment, or treatment for issues like dizziness, increased falling, or delirium.

The DHB told us that Māori are not going to a GP as often as non-Māori, and that it needs to do more work to understand this.

We asked whether Māori were not being prescribed medicines as often as non-Māori through unconscious bias, or whether the prescriptions were not being filled once they had been prescribed. We heard that because the Whanganui district covers a large rural area, the distance to a pharmacy can be a barrier. The cost of filling prescriptions may also be a factor, although the DHB noted that Whanganui has a new provider that does not charge for community pharmaceuticals. The DHB told us that, as part of its work to address inequities, Whanganui DHB is working with the National Hauora Coalition to determine whether there is unconscious bias in prescribing medication for Māori compared to non-Māori. We look forward to seeing an update on this in the Whanganui DHB’s next annual review.

Mental health and community treatment orders In 2018/19, 274 Māori and 114 non-Māori were served with community treatment orders or equivalent mental health restraining orders.6 This compares with 179 Māori and 102 non- Māori in the previous year. We would like to see Whanganui DHB focus on drug education and prevention to help reduce the number of treatment orders. We heard that it is working with a range of parties to try to address disparities and common issues across the region. They include the Ministry of Housing and Urban Development, the New Zealand Police, and the Ministry of Social Development.

5 Whanganui District Health Board (Responses to written questions), questions 112–117. 6 Section 29 of the Mental Health (Community Assessment and Treatment) Act 1992.

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Vaccines and immunisation In 2019, Whanganui DHB ran out of vaccines for both influenza and measles. It had to prioritise immunising the most vulnerable people, including pregnant women, those aged over 65, and young children.

We asked whether Whanganui DHB is able to routinely vaccinate people between the ages of 30 and 50 for measles. We were told that it would not be able to without an investment of additional resources and planning time. However, it added that if the Ministry of Health advised it of a national programme to vaccinate this cohort, it would “follow that advice and make it happen”. The DHB told us that it relies on the advice of its Medical Officer of Health regarding any local risk or need for an emergency response.

When asked how Whanganui DHB managed the shortage of measles vaccine, we heard that it focused on maintaining communication with the public and receiving advice from its Medical Officer of Health. This allowed it to take precautions with people entering and leaving the district. It maintained regular communication with medical practitioners, community pharmacists, and its Medical Officer of Health. However, the DHB said it has not had any measles cases so far during the 2019-20 outbreak.

Maintaining a specialist workforce Given its small size, we asked how Whanganui DHB maintains its specialist workforce. We heard that it has a relatively stable workforce but is looking to further strengthen its relationship and collaboration with larger and surrounding DHBs. The chair of the DHB noted that Australia uses telemedicine a lot more than New Zealand does. He said he would like to see Whanganui DHB’s relationship with other DHBs extend to supporting each other through telemedicine.

We heard that the DHB wants to focus on these relationships as a way of avoiding the need for locums. It said locums are expensive and do not offer stability for patients, as they are likely to change often.

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Appendix

Committee procedure We met between 18 December 2019 and 18 March 2020 to consider the annual review of the Whanganui District Health Board. We received evidence from Whanganui DHB and received advice from the Office of the Auditor-General.

Committee members Louisa Wall (Chairperson) Hon Maggie Barry Dr Liz Craig Matt Doocey Hon Ruth Dyson Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Whanganui District Health Board).

Whanganui District Health Board (Responses to written questions).

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2018/19 Annual review of the Abortion Supervisory Committee 2018/19 Annual review of the Law Commission 2018/19 Annual review of the Parliamentary Counsel Office

Report of the Justice Committee

March 2020

The Justice Committee has conducted the 2018/19 annual reviews of the Abortion Supervisory Committee, the Law Commission, and the Parliamentary Counsel Office. With one exception, related to a previous review of the Law Commission, we have no matters to bring to the attention of the House.

Our report on the 2017/18 annual review of the Law Commission incorrectly stated that the Office of the Auditor-General recommended major improvements to the Law Commission’s financial and service performance information. However, major improvements were recommended to the commission’s service performance information only.

For the benefit of the historical record, we resolved to set this correction out in our report on the 2018/19 annual review of the commission.

We recommend that the House take note of our report.

Hon Chairperson 366

2018/19 Annual review of the Crown Law Office

Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 About the Crown Law Office...... 2 Financial performance and audit results ...... 2 Preventing legal issues before they arise ...... 3 Māori are underrepresented at Crown Law ...... 4 Crown Law monitors the government legal advice system ...... 4 Competition with the private sector is over staff, not work ...... 5 Crown Law provided advice to the Government on Ihumātao ...... 5 Appendix ...... 6

Hon Meka Whaitiri Chairperson 367

2018/19 ANNUAL REVIEW OF THE CROWN LAW OFFICE

Crown Law Office

Recommendation The Justice Committee has conducted the annual review of the Crown Law Office for 2018/19, and recommends that the House take note of its report.

About the Crown Law Office Crown Law provides specialised legal services and advice to Ministers and government departments, and broader leadership for lawyers working in government. It also supports the principal law officers of the Crown—the Attorney-General and the Solicitor-General.

The Solicitor-General and chief executive is Una Jagose QC.

Financial performance and audit results Crown Law received total revenue of $69.4 million in 2018/19. Around two-thirds of this funding came from Vote Attorney-General, which provided $47.7 million. The rest of its revenue ($21.7 million) came from fees paid by public agencies that seek advice from Crown Law. These fees are charged to cover only the costs of the advice provided, and are not used for wider revenue-gathering purposes.

Crown Law incurred expenses of $68.1 million over the financial year, leaving it with a surplus of $1.3 million. This is an increase on the $150,000 surplus in the previous financial year, due to both slightly higher revenues and slightly lower costs.

Auditor-General’s comments The Auditor-General issued a standard audit report. He rated Crown Law’s management control environment and financial information and supporting systems and controls “very good”, and made no recommendations for improvement in these areas.

However, the Auditor-General had several recommendations for improving Crown Law’s performance information and supporting systems and controls, and rated these “good”. We note that recommendations for improvement in this area have been made in the last several audit reports. It is important for public entities to provide appropriate performance information so that they are accountable to Parliament and the public. We therefore encourage Crown Law to continue to implement the Auditor-General’s recommendations, which are particularly timely in light of Crown Law’s expanding programme of work. We discuss this new work in more detail below.

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Preventing legal issues before they arise One of Crown Law’s focuses in 2018/19 was improving access to its services and expertise. It hopes to do more to prevent legal issues from arising in the first place, rather than working to resolve them once they have arisen. We asked about some of the work it is doing to bring this about.

Improving early engagement with Crown Law We heard that Crown Law is working to be able to better support decision makers throughout the decision-making process. It wants Crown Law staff as well as lawyers in the wider Government Legal Network (GLN) to be involved in projects and decisions at an earlier stage. It would also like to see lawyers contribute more flexibly through discussion and peer review, rather than just through traditional legal opinions.

We were told that Crown Law wants to change perceptions of lawyers as “people who say no”, and instead promote lawyers as problem solvers who contribute positively to government work. Some of this work will be done by Crown Law staff who directly advise agencies, and some will be done through Crown Law’s work in supporting the in-house legal teams in each agency.

Crown Law noted that its cost recovery model may also discourage agencies from consulting its staff at an early stage. Cost recovery is important, but we heard that it can sometimes be a barrier to effective consultation. Sometimes agencies may wish to minimise costs by seeking advice from Crown Law at the last minute, or only when absolutely necessary. Crown Law told us that it is working on alternatives or changes to the model to reduce any barriers to early engagement. It expects the review of its cost recovery process to be completed within the 2019/20 financial year.

Providing more cross-government advice For the last year, Crown Law has been piloting a new programme of system leadership. Under this programme, it has redirected some of its resources away from reactive work based on agency requests. Instead, staff in this new group are developing advice and resources targeted at large legal issues or common problems that apply across the whole of government.

We heard that the pilot has produced several resources over the last year, including advice for decision makers on how to avoid making decisions that may be open to judicial review, and advice on how to establish and respond to inquiries. Crown Law told us that it is happy with how this new group has been functioning. We heard that it received funding in the last Budget to operate the group for the next two years.

Crown Law expects to staff this new group substantially using secondments from agencies that are most likely to be affected by the projects it is working on. In this way, it hopes to ensure that the work being done stays grounded, and the new group does not become a “think-tank”. The new group will also be tasked with developing ways to measure the impact that its work is having.

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Supporting in-house legal services While Crown Law is important as a source of legal support and specific expertise on matters most closely related to government, agencies need their own legal services in some form. We heard that Crown Law is available to support these in-house services, whether they be dedicated legal teams, or services contracted from the private sector. However, Crown Law cannot give expert legal advice on every issue to every agency. Agencies need to decide for themselves what their legal needs are.

Some of us suggested that there may be an incentive for some agencies to rely too much on Crown Law to provide legal support that agencies should instead be sourcing for themselves. We heard that this may be appropriate in some situations. For example, when an agency only rarely needs criminal legal expertise, it could simply be sourced from Crown Law when it is needed, rather than built in to an in-house legal team. However, generally agencies should be either building or buying their own legal expertise on day-to-day matters, or matters Crown Law does not specialise in.

We heard that Crown Law intends to work on helping chief executives decide what legal services they need, and whether they are best to get these services from Crown Law, the private sector, or a dedicated internal team. This will form part of its ongoing system leadership work.

Māori are underrepresented at Crown Law We note that, among Crown Law’s permanent staff, Māori are significantly underrepresented, as are Asian and Pacific New Zealanders, compared to the general population. Crown Law told us that it is working particularly on improving the number of Māori lawyers who choose to work for the Crown. It has created support networks for Māori Crown solicitors, and shared learning groups for Māori lawyers across the GLN. We also heard that Crown Law itself is providing tikanga and te reo classes to all of its staff. It hopes that this will contribute to making the Crown a more attractive employer for Māori lawyers than it has historically been.

Crown Law works closely with Te Arawhiti We asked Crown Law what its involvement is in the Treaty settlement process. Crown Law told us that it works very closely with Te Arawhiti, the Office for Māori Crown Relations, to provide it with the best possible legal advice, and recommendations on how to enshrine Treaty settlements into legislation. However, much of the actual content of the settlements comes about through negotiations that Crown Law is not involved in.

Crown Law monitors the government legal advice system Crown Law’s role in leading the GLN means that it is responsible for monitoring the quality of legal advice and representation in government agencies. It does so in part by surveying government agencies about their satisfaction with the legal services they receive, and also by tracking the results of cases that government agencies are involved in.

We also heard that Crown Law lawyers at all levels, including senior leadership, will at times appear in courts and tribunals on behalf of the Crown. Crown Law said that this allows its

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2018/19 ANNUAL REVIEW OF THE CROWN LAW OFFICE leadership to keep a grounded view of how best to help the agencies it serves, and to maintain an up-to-date understanding of the law.

Some of us asked whether Crown Law had a view on matters relating to the wider functioning of the justice system, particularly the amount of time extradition proceedings can take. Crown Law clarified that these are policy matters that are outside its responsibility, although it is aware that the Law Commission has made some recommendations on that specific issue.

Competition with the private sector is over staff, not work We asked Crown Law the extent to which it has to compete with the private sector on the work that it gets from government agencies. We heard that the Cabinet requires agencies, when they do not have internal expertise, to seek legal advice from Crown Law on some core matters, including constitutional issues, prosecutions, and Treaty of Waitangi matters, among others. On other, less specialised matters, private sector expertise can be accessed, through government-wide procurement agreements. As a result, Crown Law tends not to compete, partly because it must be consulted on certain issues. Even where agencies are not directed to engage with Crown Law, its expertise and the fact that its fees are only intended to recover costs rather than make a profit, mean that it tends to be the most attractive source of legal advice on the matters it deals with. Some of us note that staff with Crown Law experience must be in high demand in the private sector. We heard that there is some competition, and staff of course sometimes move to the private sector or other agencies. However, Crown Law has found it helpful to have lawyers across government and the legal system with the specialised knowledge they learn at Crown Law. It tries to manage the dissemination of this experience as much as possible, through a system of secondments.

Crown Law provided advice to the Government on Ihumātao Some of us were interested in whether Crown Law had provided advice to the Government on the legal questions involved in the ongoing dispute over Ihumātao. Crown Law confirmed that it had provided some advice, but noted that the content of that advice is legally privileged.

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Appendix

Committee procedure We met on 12 December 2019 and 12 March 2020 to consider the annual review of the Crown Law Office. We heard evidence from the Crown Law Office and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Hon Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Hon Dr Nick Smith

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Crown Law Office).

Crown Law Office (Responses to written questions).

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2018/19 Annual review of the Department of Corrections

Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 About the Department of Corrections ...... 2 Financial and service performance ...... 2 The Hōkai Rangi strategy ...... 3 Managing people in the corrections system ...... 3 Transitional housing ...... 5 Prisoner mail ...... 6 Staff safety in prisons ...... 6 Mental health and drug programmes ...... 6 Appendix ...... 8

Hon Meka Whaitiri Chairperson 373

2018/19 ANNUAL REVIEW OF THE DEPARTMENT OF CORRECTIONS Department of Corrections

Recommendation The Justice Committee has conducted the annual review of the Department of Corrections for 2018/19, and recommends that the House take note of its report.

About the Department of Corrections The Department of Corrections works to keep the public safe, and to reduce offending and rehabilitate prisoners. Its main responsibilities include:

 keeping safe custodial facilities  coordinating community-based sentences  electronically monitoring offenders in the community  providing rehabilitation and reintegration services  running community work crews  offering support and information to victims  providing administrative services to the New Zealand Parole Board. The department employs 10,000 people, with 1,293 new frontline staff recruited in 2018/19. The chief executive is Christine Stevenson.

Financial and service performance The Department of Corrections’ total revenue in 2018/19 was $1.614 billion, about 9 percent more than its revenue of $1.474 billion in 2017/18. Its total expenditure was $1.609 billion, resulting in a surplus of about $5 million.

Corrections has a wide variety of property including prisons, community corrections sites, technology, and equipment. In 2018/19 Corrections was subject to a second Investor Confidence Rating review. These reviews indicate the level of confidence one can have in an agency’s ability to use invested money effectively. Corrections achieved a B rating. This reflects an improvement from the C rating the department received in 2016. The Auditor- General’s ratings for the department’s systems and controls were unchanged from 2017/18.

In 2018 Corrections identified that it needed to strengthen its performance measurement framework. Corrections has since improved how it measures its performance in key areas including transitioning prisoners from prison to the community, safety, and rehabilitation. Some of the improvements are included in the Hōkai Rangi Strategy, which we discuss below.

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The Hōkai Rangi strategy The chief executive described the launch of the Hōkai Rangi strategy as one of the department’s most significant achievements in 2018/19. The strategy covers the years 2019 to 2024, and is its most detailed strategy ever for improving outcomes for Māori involved in the corrections system. It is designed to improve their oranga (wellbeing) by incorporating an ao Māori view (Māori world view) and moulding the system around Māori values and practices. One of the key actions under the strategy has been to create a new position of Deputy Chief Executive, Māori.

We heard that the strategy seeks to innovate and try alternative ways of doing things, but also builds on existing work. For example, Corrections is continuing work on improving its connections with iwi, measuring the effects of its efforts to lower the proportion of Māori in the corrections system, and creating pathways for offenders that reflect kaupapa Māori (Māori principles). Corrections explained that the process used to identify iwi connections is monitored closely by its Māori leadership board. Iwi across New Zealand have different ways of engaging with Corrections but all want to know the location of their people.

Managing people in the corrections system The department explained that offenders who enter the corrections system are assessed and given a case plan. If prisoners need help with their literacy or numeracy, or if they have particular needs that make them more likely to reoffend, this specialised help is included in their rehabilitation. We heard that Corrections considers skills to be crucial to a person’s successful re-assimilation into society. It offers rehabilitation programmes that provide prisoners with a range of skills in hospitality, grounds maintenance, and trades.

Reducing reoffending The department is confident that its current programmes, including the Hōkai Rangi strategy, will help to reduce reoffending. It noted that the efficacy of its programmes cannot be determined until at least 12 months after a person is released. It takes this long for someone to demonstrate how well they are managing their release. Corrections said it is always looking at ways to improve its programmes. Its research and analysis team regularly contributes to this work.

Corrections said it works with Te Puni Kōkiri and the Ministry for Social Development, applying a holistic approach to reduce reoffending. Corrections understands that when a person finishes their sentence they need help to find accommodation, employment, health care, and pro-social support.

The department measures reoffending with a Recidivism Index. The latest index shows that 45 percent of people released from prison in 2017/18 were reconvicted of an offence that resulted in a sentence administered by Corrections within 12 months of leaving prison, compared to 46.8 percent in 2016/17. Further, 26.3 percent of people who started a sentence in the community were reconvicted within a year of beginning their sentence, compared to 27.5 percent in 2016/17. While these trends are positive, we note that the proportion of offenders who committed a new offence while on home detention was up from 6.9 percent in 2016/17 to 7.9 percent in 2017/18, and the proportion of offenders who

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2018/19 ANNUAL REVIEW OF THE DEPARTMENT OF CORRECTIONS committed a new offence while on parole increased from 17.6 percent in 2016/17 to 19.9 percent in 2017/18.

We acknowledge that the picture around reoffending is complex. We will follow the trends and their consequences with interest.

Prison population We heard that Corrections is working to reduce the prison population by providing programmes that help people achieve a non-incarcerating sentence. Corrections mentioned its High Impact Innovation Programme (HIIP), which is available to some remand prisoners. The HIIP helps people in custody understand the different types of sentences they could receive, and prepare to meet the requirements of non-incarcerating sentences. The programme also helps remand prisoners explore suitable housing options so that they can apply for home detention sentencing. Some of us are concerned that these programmes may endanger the public as they aim to place offenders in the community instead of in prison.

Some of us are concerned that Corrections did not meet its target of creating an additional 503 prison beds in 2018/19. The department informed us that 220 beds will be available soon at the Mount Eden facility and another 66 at Arohata Women’s Prison. We heard that the modular build programme will provide the extra beds required. We look forward to the next annual report to see how Corrections is meeting its prison beds target.

Community-based sentences Community-based sentences include home detention, community work, and supervision orders. Supervision orders require offenders to address the causes of their offending by attending targeted programmes.

The department manages around 30,000 offenders in the community every day. It said this number has not increased over the past year and the offenders are no more dangerous than in the past. However, they tend to have long offending histories and present complex challenges. It is therefore important that they are well managed, and Corrections has employed more probation officers to handle this work. It assured us that having more staff was improving outcomes and reducing the recidivism rates of people on community-based sentences.

Completion rates for community-based sentences are improving. In 2018/19, 68 percent of prisoners completed their community-based rehabilitation programme, compared with 66 percent in 2017/18. Corrections said it works hard to help people complete their sentences but it can be difficult as people have to manage their sentences and their daily lives. Also, it is harder to enforce compliance when people are in the community. We hope to see Corrections continue to improve its management of community-based offenders.

Electronically monitored bail Electronically monitored bail (EMB) involves the department tracking the movement of alleged offenders waiting for their cases to progress through the justice system. People subject to EMB have a device attached to their ankle that sends information about their

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2018/19 ANNUAL REVIEW OF THE DEPARTMENT OF CORRECTIONS location and movements to Corrections. The decision to put someone on EMB is made by the courts or the New Zealand Parole Board.

During 2018/19, 15,560 people were subject to EMB. In the department’s view, the biggest benefit of EMB is that it allows people on remand (those who have not yet been tried or sentenced) to demonstrate their suitability for a community-based sentence. If an alleged offender is held in prison they cannot demonstrate the necessary responsibility. It also helps people to stay in contact with whānau and to keep their job.

Remand prisoners Remand prisoners are people awaiting trial or sentencing in custody. They may be held in police cells, court cells, psychiatric facilities, or prisons. Corrections acknowledged that its normal programmes have not traditionally applied to remand prisoners. For example, their needs are not assessed, and they are generally not brought into rehabilitation programmes, until after they have been sentenced. This is because of the presumption of innocence: they are not treated as an offender until after sentencing. We heard that some short programmes are run for remandees, such as literacy, numeracy, and parenting programmes, or informational programmes about drugs and alcohol. Some prisons involve them in work in their kitchen or laundry.

We expressed concern about this lack of access to constructive programmes, as some of those on remand could wait 18 to 24 months before their guilt was determined. With allowance for time on remand, their involvement in rehabilitation could be cut very short. The chief executive agreed that this is an area where the department needs to do more. We encourage Corrections to improve its treatment of remand prisoners.

Transitional housing Transitional housing is available to newly released prisoners and offenders on community- based sentences. We heard that Corrections and Kāinga Ora received $57.6 million across four years for transitional housing in Budget 2018. This money has gone towards opening new beds in various transitional homes. Corrections informed us that its partnership with Kāinga Ora helps it take a new approach to transitional housing. Corrections focuses on community-based transitional housing and managing associated support services. Kāinga Ora works on sourcing appropriate houses. If a house is not suitable for Corrections it may meet Kāinga Ora’s housing needs, making the house-sourcing process generally more efficient. We heard that both organisations now look at existing housing options instead of building new.

We were interested in the community consultation process that Corrections uses to assess whether a location is suitable for transitional housing. Corrections said it works with Kāinga Ora to ensure the community understands how transitional housing works, its purpose, and the support services available. We heard that a community’s views on having a transitional house in the neighbourhood are taken into account before the house is established. Corrections informed us that most people live in transitional housing for one year. During that time, Corrections works with them to find suitable long-term accommodation. The department explained that people finishing a stay in transitional housing are not given priority over others awaiting .

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Prisoner mail Corrections said it works to balance prisoners’ statutory entitlements against the public risk that their mail may pose. We heard that Corrections is changing how it manages prisoners’ mail in response to the recommendations of an independent review. The changes include placing dedicated mail-monitoring teams in each prison and conducting regular audits of the mail process. Mail-monitoring teams will ensure that outgoing mail clearly states it is prisoner mail and how recipients can contact Corrections with any concerns.

We asked about correspondence written by the alleged offender in the Christchurch mosque attacks. We heard that a letter was sent from prison and later surfaced on the internet. Corrections apologised for this and explained that it was due to human error. We enquired whether the Minister of Corrections had asked the department to take special interest in this prisoner and his mail. Corrections said that prisoner management is an operational matter that the Minister is not involved in. We learned that Ministers often raise general matters concerning specific prisoners but do not direct how to manage prisoners.

Staff safety in prisons We note that prisoner assaults on staff increased in 2018/19, with 625 non-serious assaults on staff and 29 serious assaults. The chief executive said that prisons are volatile places; over 80 percent of prisoners have convictions for violence, and they often resort to violence.

Corrections seeks to reduce attacks on staff by providing personal protective wear, including on-body cameras and pepper spray. The department has researched the issue in the past year, looking for patterns or particular reasons why assaults occur. It believes that less experienced staff may intervene too soon, rather than letting the prisoner cool off. This can lead to an attack. We heard that staff who have recently received tactical communications training are less likely to be assaulted. We were pleased to hear that the number of assaults has been lower in the current financial year.

Bullying We were concerned by media reports about bullying at the Spring Hill Corrections Facility and asked Corrections to explain what happened. The department told us it received a letter expressing concern about the workplace culture at Spring Hill from the Public Service Association and the Corrections Association of New Zealand. Corrections said it had agreed with the unions that an independent cultural review was necessary. Staff from Spring Hill were invited to speak with the review team about their concerns and what they thought was working well. The review resulted in a range of recommendations that have been incorporated into an improvement plan. We hope to see an improvement in staff culture as a result.

Mental health and drug programmes In Budget 2019, the department was allocated $127.5 million over four years to develop its mental health and drug and alcohol programmes. Drug and alcohol programmes are run in all prisons, but certain prisons are better equipped to provide mental health services.

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A 100-bed mental health facility is being built at Waikeria Prison. We heard that the development is running to time but will take a couple of years. The department is working with the Waikato District Health Board and community services to develop the facility. Corrections told us that the new facility will meet safety requirements and provide a less institutionalised experience that will promote mental health.

We are concerned that prisoners’ mental health often deteriorates while they are in prison, which can contribute to the likelihood of reoffending. We asked how Corrections is addressing this. The department told us it has appointed a Deputy Chief Executive, Health, to manage all health outcomes. Also, the Hōkai Rangi Strategy aims to improve health outcomes for prisoners. Corrections said that its nurses encourage prisoners to take their medications. Upon release, prisoners receive a small amount of their prescription and Corrections tries to arrange GP appointments for people who will require further care.

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Appendix

Committee procedure We met on 21 November 2019 and 12 March 2020 to consider the annual review of the Department of Corrections. We heard evidence from the Department of Corrections and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Hon David Bennett, Brett Hudson, , , and Nicola Willis participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing paper on the Department of Corrections).

Department of Corrections (Responses to written questions).

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2018/19 Annual review of the Electoral Commission

Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial and service performance ...... 2 Maximising enrolment in the 21st century ...... 2 Engagement with communities to increase participation ...... 3 Recent and potential electoral law changes ...... 4 The commission’s investigative powers ...... 5 Appendix ...... 7

Hon Meka Whaitiri Chairperson 381

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Electoral Commission

Recommendation The Justice Committee has conducted the annual review of the Electoral Commission for 2018/19, and recommends that the House take note of its report.

Introduction The role of the Electoral Commission, an independent Crown entity, is to administer all aspects of parliamentary elections, by-elections, and referendums and to encourage participation in parliamentary democracy.

The Electoral Commission has 113 staff. The chair is Marie Shroff and the chief executive is Alicia Wright.

Financial and service performance In 2018/19, the commission reported total revenue of $26.809 million, compared with $65.315 million in 2017/18. Total expenditure was $27.601 million, compared with $65.865 million in 2017/18. The commission reported a deficit of $792,000, compared with a deficit of $550,000 in 2017/18.

The Auditor-General assessed the Electoral Commission’s management control environment and its financial information systems and controls as “very good”, with no recommendations for improvement. The commission received the same ratings in 2017/18.

The Auditor-General assessed the Electoral Commission’s performance information and supporting systems and controls as “good”. The auditor reiterated a previous recommendation that the commission further develop its strategic performance reporting framework. The auditor also acknowledged the progress the commission has made regarding its future performance framework, and that it has begun to take into account the cyclical nature of its work.

Maximising enrolment in the 21st century We asked what the commission is doing to ensure its efforts to maximise enrolment are fit for the 21st century. The commission told us that it has recently launched an updated and easier-to-use digital enrolment service. Voters can use their RealMe, driver licence, or passport number to confirm their identity. The commission has also simplified its forms so that they are less “off-putting”. The service will be actively promoted in 2020. We note that 15.2 percent of all enrolment transactions in 2018/19 were conducted digitally, well above the commission’s target of 10 percent. We will follow the digital enrolments trend with interest.

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In addition, the commission is increasing its “boots on the ground”, with up to 300 people working on community engagement and enrolment in targeted communities, particularly in areas where levels of enrolment and turnout have been low.

We were curious to know whether the commission believes declining postal services have increased the need to modernise enrolment processes. The commission agreed that the postal system was an important factor to consider. It said that it would welcome a review of provisions in the Electoral Act 1993 relating to the use of the postal system for enrolment processes.

Engagement with communities to increase participation Ensuring that all eligible voters participate in elections is a crucial part of a vibrant democratic process. Although New Zealand enjoys relatively high levels of voter turnout, and overall turnout has increased in the last two elections, there are still communities with participation rates that are lower than the average. We discussed a number of these with the Electoral Commission to learn what it is doing to increase these communities’ participation.

A number of new initiatives are discussed below. We wish the commission success in these efforts, and look forward to seeing performance data for the new initiatives at our next annual review.

Māori voters Turnout for Māori electors improved for all age groups at the 2017 General Election, and voter satisfaction for Māori electors rose from 86 percent in 2014 to 88 percent in 2017.1 However, turnout remained lower than for non-Māori. We asked the commission what it is doing to lift Māori participation rates.

The commission told us it had a nationwide series of kōrero in 2018 with Māori communities to help it better understand Māori experiences of enrolling and voting, and what works to encourage people to participate. The commission said it will implement a number of suggestions for the 2020 General Election, including placing voting places directly in communities, having local people run the voting places, and increasing the use of te reo Māori in voting places. The commission will also pilot a voting place at the 2020 General Election with te reo Māori as the primary language.

People with disabilities We are also interested to hear what the commission has done to improve services for those with disabilities. The commission told us that it will be using technology to help deaf voters at voting places for the first time at the 2020 General Election. It will also continue its dictation and remote-voting service for the blind community, which it said has been very popular. The commission has also produced material specifically for the mentally disadvantaged. The commission said it continues to look for ways to ensure that disabled communities are included in electoral processes. We look forward to hearing about further developments at the commission’s next annual review.

1 Electoral Commission (Responses to questions 112–124), p. 5.

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Young people There is a lot of evidence to support the idea that if you vote when young, you are far more likely to vote later in life. Young people have typically participated at lower-than-average rates in recent . Despite a 6.5 percent increase in the number of young voters at the 2017 General Election, enrolment rates among those aged between 18 and 24 declined slightly in 2018/19. We were keen to know what the commission is doing to ensure that young people enrol and vote.

The commission said it has staff visiting schools to raise awareness of the importance of voting. This has resulted in a significant increase in the number of 17-year-olds enrolled on the provisional roll. The commission is also focusing on designing its materials in a way that is engaging for young people, as well as developing its digital services such as online enrolment and a new and simplified website, Vote.nz. The commission hopes that, by making “life admin” easier for young people, more will vote. We will follow young people’s turnout at the 2020 General Election with interest.

Recent and potential electoral law changes We asked the commission about its involvement with and response to recent electoral law changes, as well as proposals that have been announced by the Government or are currently going through the legislative process.

Foreign donations The Electoral Amendment Act 2019 was passed under urgency on 3 December 2019. It amended the Electoral Act 1993 to restrict donations from overseas persons to political parties and candidates, imposing a $50 limit on all donations from overseas persons. We asked what advice the commission provided to the Minister of Justice regarding the formulation and introduction of the bill, and what work the commission has undertaken to implement the changes made to the Electoral Act.

The commission told us that it had “input as part of the Ministry of Justice agency consultation” on the proposed changes and their operational implications. On 17 December 2019, following the enactment of the Amendment Act, the commission provided guidance to party secretaries on the new rules.

Referendums at the 2020 General Election The Referendums Framework Act 2019 was passed on 3 December 2019. The Act sets out provisions to govern the conduct of referendums held alongside the 2020 General Election. Under the Act, a referendum can be triggered by the Governor-General making an Order in Council on the recommendation of a Minister of the Crown.

We note that the Act does not set a cut-off date before a General Election for using this regulation-making power. We asked the commission whether it had provided any advice to the Government about the fact that the Act would allow the Government to add an additional referendum question up to the date of the General Election. The commission said it had not offered any advice on this matter, and was “focused on the conduct of the referendums”. The commission also told us it “has no view” on the last date that an additional referendum

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We were also curious to know whether the commission had been consulted about the Government’s announcement of a unit within the Ministry of Justice that will provide information on the referendums. The commission told us that the two organisations “work closely” together but that the Minister’s announcement “sits with him”.

Extension to the deadline for the return of the writ The Electoral Amendment Act 2020, which was enacted on 10 March 2020, extended the latest date for the return of the writ from 50 to 60 days after writ day. This is intended to allow the Electoral Commission to process election-day enrolments, which is another change made by the Amendment Act. This could, in practice, mean that the results of a general election are released up to ten days later than they have been in the past. This could mean that the next Government is formed up to ten days later than usual.

We asked whether the Electoral Commission had requested the extension in the deadline for the return of the writ. The commission confirmed that it had. It also told us that there had been no change to the timing of election results since 1956, although the number of votes being processed has increased by millions since then. The commission assured us that it is aware of the high public interest in the results of voting, and intends to treat the 60-day period as a maximum, rather than a target.

Prisoner voting The Minister of Justice announced on 23 November 2019 that people sentenced to less than three years in prison will be granted the right to vote ahead of the 2020 General Election. This proposal would see the law governing prisoner voting return to how it was before the passage of the Electoral (Disqualification of Sentenced Prisoners) Amendment Act 2010.

We asked when the law change would need to be take effect by for the commission to be able to reasonably administer the extension of voting rights. We were told that the commission would need to have the law in place “a few months out from the election”. Since our hearing of evidence with the commission, the election date has been confirmed as 19 September 2020.

The commission’s investigative powers Currently, the Electoral Commission does not initiate criminal prosecutions, nor does it have the power to impose civil sanctions. If appropriate, it refers a matter to the Police. In our report on the 2017 General Election and 2016 local elections, we recommended that the Electoral Commission be given investigatory, enforcement, and sanction powers. Under our recommendations, major breaches of electoral law would still be referred to the Police.2

The chair of the commission noted that, on taking up her role as chair, she was surprised to learn that the Electoral Commission has fewer powers than the Privacy Commissioner,

2 Justice Committee, Report on the Inquiry into the 2017 General Election and 2016 Local Elections (December 2019), pp. 32–3.

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Appendix

Committee procedure We met on 5 December 2019 and 12 March 2020 to consider the annual review of the Electoral Commission. We heard evidence from the Electoral Commission and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Electoral Commission).

Electoral Commission (Responses to written questions).

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Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 About the Human Rights Commission ...... 2 Implementing recommendations from the Shaw review into sexual harassment ...... 3 New strategic priorities ...... 3 Meeting demand and assessing performance ...... 3 Hate speech and freedom of speech ...... 4 Disability issues and the end of life choice referendum ...... 4 Appendix ...... 6

Hon Meka Whaitiri Chairperson 388

2018/19 ANNUAL REVIEW OF THE HUMAN RIGHTS COMMISSION Human Rights Commission

Recommendation The Justice Committee has conducted the annual review of the Human Rights Commission for 2018/19, and recommends that the House take note of its report.

About the Human Rights Commission The Human Rights Commission is an independent Crown entity responsible for promoting and encouraging the protection of human rights in New Zealand. It is funded through Vote Justice.

There can be up to five human rights commissioners. At the time of our review there were four: the Chief Commissioner, the Disability Rights Commissioner, the Equal Employment Opportunities Commissioner, and the Race Relations Commissioner. The commission is governed by a board comprising all the commissioners, chaired by the Chief Commissioner.

Organisational changes The commission underwent several personnel changes in 2018/19: the Equal Employment Opportunities Commissioner, Saunoamaali’I Dr Karanina Sumeo, took up her role in November 2018, and the Chief Commissioner, Professor Paul Hunt, took up his role in January 2019. The Race Relations Commissioner, Meng Foon, and the Chief Executive, Rebecca Elvy, were appointed in August 2019, just after the period covered by this annual review. A number of roles were undertaken by staff in acting positions during the transition. We were pleased to learn that this did not affect the reliability of the commission’s financial and performance reporting.

We met with all the commissioners and the chief executive for our review.

Financial overview The Human Rights Commission’s revenue for 2018/19 was $9.951 million, slightly less than in the previous year. Its total expenses were $10.131 million, about the same as in the previous year. This resulted in a deficit of $180,000, compared with a deficit of $51,000 in 2017/18.

In Budget 2019 the commission received an 18 percent increase in funding. This is intended to help it meet increasing demand and strengthen its capability, as well as improving its outreach to Māori. Recommendations from the 2018/19 audit The Auditor-General assessed the Human Rights Commission’s management control environment, financial information and supporting systems and controls, and performance information and associated systems and controls as “good”. The report recommended a number of improvements. We look forward to hearing how the commission intends to address these recommendations. 2 389

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Implementing recommendations from the Shaw review into sexual harassment In 2018, Judge Coral Shaw (retired) completed a ministerial review of the Human Rights Commission’s organisational culture and its handling of internal sexual harassment complaints. The review reported in May 2018 and made 31 recommendations to address shortcomings in the commission’s systems and processes and its organisational culture. We were pleased to hear that virtually all the work to address the recommendations had been completed by the time of our annual review. The final work was due to be completed in December 2019.

An independent quality assurance review was completed in June 2019. We are particularly pleased to learn from it that the commission has responded “positively, appropriately, comprehensively, and substantively” to the 31 recommendations. In keeping with this, we note that staff turnover at the commission reduced substantially, from 35 percent in 2017/18 to 21 percent in 2018/19.

Last year the commission told us that engaging staff in the Shaw review was a core way it hoped to rebuild morale and reduce turnover. We are glad to see improvement in this area. We also heard that the commission intends to build on the Shaw recommendations to promote a positive culture, build collaboration and communication, and develop as a Treaty- based organisation. We look forward to hearing about the results of this work and the completion of the outstanding work from the Shaw review.

New strategic priorities In Budget 2019 the commission received an increase in funding to support it to meet increasing demand, strengthen capacity, and improve its outreach to Māori. We asked whether the commission ever feels it needs to allocate resources according to political pressure or issues that are prominent in the media. The commission said that, as part of the Shaw review, it had worked to develop a new set of strategic priorities that would govern its expenditure. This work took place over several months and involved lengthy public and internal consultation, including receiving 3,000 submissions from the public. We are pleased to hear that the commission has done substantive and thoughtful work to plan its spending.

Meeting demand and assessing performance The commission has experienced increasing demand for its services in recent years. For example, it received 5,666 new inquiries and complaints in 2018/19. This is less than the 6,304 inquiries and complaints in 2017/18, but remains the second-highest number recorded by the commission.

Despite this high demand, the commission met all but three of its key performance indicators in 2018/19. It was generally able to respond in a timely way to inquiries, complaints, and requests for mediation. We commend the commission on its generally good results.

We are pleased that satisfaction with the quality of the commission’s mediation was high, at 78 percent. However, the commission failed to meet a key performance indicator around applications for legal representation under the Human Rights Act 1993. It decided only 64

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percent of these within four months, against a target of 80 percent. This compared with 91 percent in 2017/18. We hope to see improvement in this performance next year.

We asked how it assesses its progress in improving New Zealand’s inclusivity and the position of human rights in New Zealand. The commission told us, and we acknowledge, that this is complex and difficult to assess. For example, the commission told us it gets few pay equity complaints from Māori and Pacific Islanders, despite pay inequity for these groups being consistently identified in survey data. The commission therefore believes that the complaints and inquiries it receives do not necessarily reflect the complete picture of problems with inclusivity and human rights in New Zealand. It is working to increase its outreach across minority communities in New Zealand to try to get a more complete picture and, in its own words, to understand who is and who is not at the table.

The commission is also responsible for reporting on New Zealand’s progress against a range of international conventions related to human rights. The commission told us this was another important way it assesses how and whether New Zealand is making improvements. A major piece of work completed in 2018/19 was the Universal Periodic Review, which reports to the United Nations’ Human Rights Council. We are pleased to hear that the commission consulted across the country in completing this reporting.

Hate speech and freedom of speech In December 2019, shortly after our meeting, the commission published a report about New Zealand’s laws on hate speech.1 We discussed several recent examples of the tension between freedom of speech and regulation against hate speech that had been prominent in the media. We asked the commission whether it planned to recommend any changes to the law in this area.

The commission told us it is alert to these issues. It said it is engaging broadly with the community and conducting independent research in order to take a position on these complex issues, but had not yet reached the point of being able to give advice.

The commission is particularly interested in the inconsistent standards for print and online media. It contrasted the broad scope of the standards for online media in the Harmful Digital Communications Act 2015 with the narrow standards for print media. It intends to produce advice that balances freedom of speech with safety for communities. We look forward to reading this advice in due course.

Disability issues and the end of life choice referendum Some of us were particularly interested to discuss the upcoming referendum provided for by the End of Life Choice Act 2019 with the Disability Rights Commissioner. We asked whether the commissioner intended to continue her advocacy for disabled people by expressing concerns about the legislation. We also asked whether the Ministry of Justice had asked the commission to play any role in sharing information about the referendum. The commissioner told us that she intends to continue her advocacy around the legislation. She said that she was pleased with some of the changes to the bill, but continues to believe that safeguards in

1 Kōrero Whakamauāhara: Hate Speech, An overview of the current legal framework. 4 391

2018/19 ANNUAL REVIEW OF THE HUMAN RIGHTS COMMISSION the legislation are insufficient, particularly regarding coercion and competence of disabled people. The Ministry of Justice had not contacted the commission to discuss its role, but the commission intends to be a reputable, trusted source of information about the effects of the Act on disabled people.

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Appendix

Committee procedure We met on 12 December 2019 and 5 March 2020 to consider the annual review of the Human Rights Commission. We heard evidence from the Human Rights Commission and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Paulo Garcia and Denise Lee participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Human Rights Commission).

Human Rights Commission (Responses to written questions).

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2018/19 Annual review of the Independent Police Conduct Authority

Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial and service performance ...... 2 Increasing numbers of complaints ...... 2 Delay in review of the firearms licensing regime ...... 4 Implementation of new case management system ...... 4 Efforts to improve community engagement ...... 4 The Police’s adoption of recommendations ...... 5 Appendix ...... 6

Hon Meka Whaitiri Chairperson 394

2018/19 ANNUAL REVIEW OF THE INDEPENDENT POLICE CONDUCT AUTHORITY

Independent Police Conduct Authority

Recommendation The Justice Committee has conducted the annual review of the Independent Police Conduct Authority for 2018/19, and recommends that the House take note of its report.

Introduction The Independent Police Conduct Authority (IPCA) is an independent Crown entity established in 1988 and funded through Vote Justice. It is tasked with responding to complaints made about police officers and police practices. The authority reviews and recommends changes to police policies and procedures where necessary and investigates incidents involving deaths or serious injuries that are potentially caused by a police employee.

The IPCA is governed by a three-member board that reports to the Minister of Justice. The board is chaired by Judge Colin Doherty, who has been in the role since 2017.

Financial and service performance In 2018/19 the authority reported total revenue of $5.078 million, an increase of 17.6 percent compared with $4.318 million revenue in 2017/18. Total expenditure was $4.559 million, compared with $4.306 million in 2017/18. The resulting surplus was $518,622, up from $11,781 the previous year. The majority of the authority’s expenditure goes to staff salaries and board member fees.

An additional one-off payment of $100,000 was made to the IPCA in June 2019 to employ more staff to help ease the backlog of cases under examination.

The Auditor-General assessed and rated the authority’s management control environment, financial information, and supporting systems and controls as “very good”. Performance information and supporting systems and controls were rated “good”, with some improvements recommended. These results were in line with the previous two years’ audit results.

Increasing numbers of complaints The IPCA allocates complaints into four distinct categories:

• full investigation by the authority • referral to the Police for investigation under the authority’s oversight • facilitated resolution between the complainant and the Police • no further action taken on the complaint.

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In 2018/19 the IPCA received 3,206 complaints, compared with 2,592 the previous year. It completed 64 investigations and released 35 public reports (59 percent more than in 2017/18). The authority resolved 702 cases through facilitated resolution between the Police and the complainant, reviewed 241 police investigations, and recommended 12 changes to police practice or policy.

The IPCA informed us that the increase in complaints in 2018/19 exceeded its projections. It was particularly prominent in the second half of the financial year, when the volume of complaints rose by about 30 percent. The authority forecasts that complaint numbers will continue to increase, with around 3,800 complaints expected in 2019/20.

We heard that the most common types of complaints related to failure to investigate, an officer’s attitude or use of language, inadequate service, and use of force without a weapon. We asked whether the increase in police personnel was likely to affect the numbers or types of complaints brought to the IPCA. It said the increase in personnel did not affect the types of complaints made or the proportion of each type of complaint made against the Police.

The IPCA pointed to the increase in the volume of complaints as the main reason for its failure to meet some performance expectations. These related to its timeliness in dealing with complainants and completing investigations and reviews.

Under-reporting of complaints by the Police The IPCA explained that the increase in complaints was partly due to some inconsistency and uncertainty around how the Police were reporting complaints to the IPCA. The Police’s professional conduct group identified inconsistencies in the reporting of complaints, with some officers misinterpreting what constituted a “complaint”. It came to the authority to clarify the guidelines for reporting complaints. The authority clarified that any matter brought to the Police as a complaint about a specific individual or incident should be passed on to the IPCA. The IPCA subsequently discovered that some police had not been recording complaints and had instead been telling complainants to take their grievances to the IPCA themselves. The IPCA’s clarification resulted in a steep increase in the number of complaints it received.

The IPCA noted that the adoption of online portals by the Police and the authority has made it easier for individuals to lodge complaints. It may have also contributed to the increasing volume of complaints received.

Resourcing and staff turnover We recognise the work of the IPCA and the enormous pressure investigators face. We note that staff turnover in the IPCA has been significant in the last couple of years. We sought information on the drivers of this trend.

The authority explained that the organisation is split between investigation work and conciliation and resolution work. Turnover is higher in the latter work. It informed us that the nature of the work is high volume and high pressure. It involves a lot of interaction with complainants, many of whom have challenging issues. The IPCA noted that training is provided to staff to assist them to deal with disgruntled complainants. It added that the rate

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of staff turnover has been exacerbated in recent months by the increasing volume of cases referred to the authority.

We asked whether the authority has been able to adequately fill the vacancies created by high staff turnover. The IPCA said that, although the job market for regulatory positions has been quite tight, its recruitment has been successful and it has also developed a summer internship system.

We also asked whether the IPCA is working with the Office of the Ombudsman and other organisations to help it manage the spike in cases. The authority confirmed that it is working with the Ombudsman and comparable organisations in Australia to refine its processes.

The IPCA said it is making an urgent application for emergency funding to deal with the increase in complaints, and is awaiting a decision.

Delay in review of the firearms licensing regime The IPCA undertakes thematic reviews based on the complaints received. We heard that, in the wake of the Christchurch mosque shootings, it paused work on its thematic review of Police administration and enforcement of firearms licensing. The delay recognised that the House was considering legislative changes to the firearms licensing regime as a result of the shootings.

We asked why work on the report was paused and whether the authority’s expertise could assist with firearms legislation before the House. The authority told us that it expected the review would provide recommendations for Police procedure and the licensing around firearms. However, due to an increasing workload and limited resources, it would be unable to complete the review before the second tranche of firearms legislation was enacted.

We asked how far the review had progressed before it was put on hold. We learned that the authority had agreed with the Police on a mechanism, protocol, and process for the review and had conducted a number of meetings with the Police to determine the most salient issues around firearms licensing. However, the authority had yet to conduct research in the field and assess how the firearms licensing system was working in practice.

Implementation of new case management system The authority began the implementation of a new case management system in October 2019. The new system replaced a basic and out-dated system which had limited reporting capability. The new system is designed to enable staff to efficiently manage cases and provide improved data analytics. The IPCA told us that the new system would enable it to analyse information on complaints, complainants, timeliness, and the case resolution process. This could help it to identify trends in the data and resourcing needed for investigations.

Efforts to improve community engagement In the last annual review, we identified community engagement as an area where we hoped to see improvement. We asked about the work being done to enhance engagement with

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Māori. The IPCA assured us that it has tikanga and te reo Māori programmes to improve the organisation’s relationship with Māori. We explored whether the authority uses police connections such as iwi liaison officers and other community networks to broaden its engagement with Māori communities. The IPCA said it makes use of such advice when it comes to cultural issues in specific investigations, but concedes that more work is needed to broaden the authority’s engagement.

The IPCA identified its increasing social media and online presence as an example of increasing community engagement. In 2018/19 its website saw a 36 percent increase in visitors over the previous year, with over 120,000 visits. It explained that a lot more reviews are now published to the IPCA website and this has led to an increase in the number of people interacting with the website.

Review of policing in small communities Another thematic review currently being progressed by the IPCA will look at policing in small and isolated communities. The IPCA explained that during the review process the authority spent time in small communities and talked with iwi and community members about issues with policing. The IPCA noted that it had wanted to take on a more proactive role to identify and respond to community issues and work with the Police to address them. However, a lack of resources meant it had not followed through on these plans. The IPCA plans to publish the policing in small communities report in 2019/20.

The Police’s adoption of recommendations We questioned the timeliness of Police action on the IPCA’s recommendations. We heard that the Police have adopted all of its past recommendations, but there are often negotiations around the timeline for implementing the recommended measures. The authority said it has an open dialogue with the Police before it makes recommendations, and the IPCA has no role in determining the disciplinary and employment outcomes for individual officers under investigation.

We heard that complainants continue to express dissatisfaction about not being informed of the outcome of investigations.

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Appendix

Committee procedure We met on 5 December 2019 and 5 March 2020 to consider the annual review of the Independent Police Conduct Authority. We heard evidence from the IPCA and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Hon Ruth Dyson and Brett Hudson participated in this item of business.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz.

Office of the Auditor-General (Briefing on the Independent Police Conduct Authority).

Independent Police Conduct Authority (Responses to written questions).

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Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial performance ...... 2 Alcohol and Other Drug Treatment Courts ...... 3 Joint venture for family violence and sexual violence ...... 3 Imbalance in Māori representation ...... 3 Hāpaitia te Oranga Tangata: Safe and Effective Justice ...... 4 Prison population projections ...... 5 Referendums ...... 5 Consulting with Opposition parties on electoral law changes ...... 5 Planned legislative changes ...... 5 Ministry response to mosque attacks ...... 6 Christchurch justice precinct ...... 6 Amendments to Māori land law ...... 7 Appendix ...... 8

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Ministry of Justice

Recommendation The Justice Committee has conducted the annual review of the Ministry of Justice for 2018/19, and recommends that the House take note of its report.

Introduction The Ministry of Justice provides various justice services to New Zealand. Its functions include collecting fines, administering legal aid, managing the Public Defence Service, supporting the judiciary, and providing policy advice. The ministry employs 3,795 people.

The ministry’s strategy was updated in May 2019. The ministry has three enduring priorities under the new strategy:

 honouring our responsibilities to Māori  maintaining the integrity of the courts and tribunals  providing sector leadership and policy stewardship. The strategy also sets out three “transformational opportunities”:

 leading the transformation of the criminal justice system  addressing family violence and sexual violence  improving access to justice. In 2018/19, the Office for Māori Crown Relations—Te Arawhiti was set up. It is hosted by the Ministry of Justice. The Māori Affairs Committee is examining and reporting separately on the office.

We welcome Andrew Kibblewhite as the new Secretary for Justice. He replaced the previous secretary, Andrew Bridgman, in early 2019.

Financial performance In 2018/19, the ministry’s total revenue was $664.5 million. This was 10 percent higher than its revenue of $603.2 million in 2017/18. Total expenditure was $657.8 million (8.7 percent higher than its expenditure of $605.4 million in 2017/18).

The Auditor-General rated as “good” the ministry’s management control environment, its financial information and supporting systems and controls, and its performance information and associated systems and controls. He recommended some improvements in all three areas.

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Alcohol and Other Drug Treatment Courts We asked about the Alcohol and Other Drug Treatment Courts that are being trialled in Auckland and Waitakere. They aim to supervise people whose offending is driven by their dependency on drugs. The courts provide judicial oversight over offenders’ involvement with treatment and rehabilitation services before sentencing. The pilot is funded until the end of June 2020.

We learnt that an evaluation, completed in July 2019, found that these courts work well for many people. They are also quite expensive. The evaluation also showed that, although outcomes were good in the first two years, more work may be needed to improve offenders’ longer-term success.

We look forward to reading the evaluation and hearing what decisions are made about the Alcohol and Other Drug Treatment Courts. We note that an early announcement of a decision to continue with these courts would help to smooth their transition into permanent courts.

Joint venture for family violence and sexual violence In 2018/19, a Joint Venture Business Unit was established to address family violence and sexual violence. The unit is made up of 10 agencies and is hosted by the Ministry of Justice.

The 10 chief executives meet monthly to make governance decisions. Work programmes are developed at the deputy chief executive level. The unit recently finished developing workforce standards, which involved working with non-governmental organisations. Many of the agencies have information-sharing agreements to make it easier for them to work with families.

The ministry commented that the agencies are still learning what it is to be a joint venture with joint accountability, as opposed to merely an interdepartmental committee with contributing accountability. We note that Ministers responsible for the Joint Venture Business Unit appeared before the Finance and Expenditure Committee as part of the 2019/20 Estimates process, demonstrating the shared accountability.

Imbalance in Māori representation Māori are over-represented in the criminal justice system. In contrast, we noticed how relatively few Māori were present at this annual review hearing, either as committee members or from the ministry.

We note that issues in the Ministry of Justice annual report are similar to those in previous reports. In particular, we brought the ministry’s attention to Puao-te-Ata-Tu, a 1988 report by an advisory committee on a Māori perspective for the then Department of Social Welfare. We also note that the annual report does not mention the Whānau Ora programme. Links with Whānau Ora are important for the cultural responsiveness of the justice system.

The ministry pointed out that one of its foundational priorities is engaging with Māori. It acknowledged that Whānau Ora is a critical part of the way forward across the wider social

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We hope to see linkages to Whānau Ora approaches set out in future annual reports.

Hāpaitia te Oranga Tangata: Safe and Effective Justice The Ministry of Justice leads Hāpaitia te Oranga Tangata: Safe and Effective Justice, a cross-sector initiative to change principles and processes of the criminal justice system.1 The initiative started in mid-2018. Te Uepū Hāpai i te Ora—the Safe and Effective Justice Advisory Group published its first report, He Waka Roimata—A Vessel of Tears in June 2019. Another report, Ināia Tonu Nei—The Time is Now was published after the national Hui Māori in April 2019. Shortly after our hearing with the ministry, the group published its final report, Turuki! Turuki!

The ministry said it is developing its advice to the Government, informed by all the reports. We heard that the Hāpaitia initiative is aiming to reach a sense of consensus around what the criminal justice system is trying to achieve. Long-term success might be assessed using measures such as victimisation, rehabilitation, and incarceration rates.

Recommendations from these reports will inform the development of an agreed statement of the purpose and principles for the criminal justice system.

The initiative has found that the system urgently needs reform:

[T]he overwhelming impression from people who have experienced the criminal justice system is one of grief. They feel the system has not dealt with them fairly, compassionately or with respect—and in many cases has caused more harm…

[M]eaningful change will require reform throughout the whole system and it will also require a long-term commitment… [W]e need to work together in new partnerships at all levels of the criminal justice system.2

The ministry spoke about the following issues in relation to Hāpaitia te Oranga Tangata:

 the need to make sure that the criminal justice system responds appropriately to victims as well as perpetrators  the importance of individuals being accountable for their actions  the need to engage with community in addressing issues  the importance of engaging with Māori in many ways, at whānau, hapū, and iwi levels. We heard that causes of institutional bias in organisations are hard to identify. To understand how institutional bias is changing, the ministry will keep talking about it, encourage research, be open to questioning and challenge, and be transparent.

1 For more information, see https://www.safeandeffectivejustice.govt.nz/. 2 Ministry of Justice, Response to annual review question 112. 4

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Prison population projections The ministry is confident in its estimates of future prison populations. We heard that, if nothing changes, the ministry expects the prison population to rise. However, it added that many things influence projections. The ministry updates them regularly as underlying assumptions shift.

The Hāpaitia initiative is a multiple-year project. Any changes arising from it would be factored into projections once decisions were made and funding allocated.

Referendums Two referendums are planned in 2020, to be held alongside the General Election. One is on legalising the recreational use of cannabis and the other is on allowing terminally ill people to request assisted dying.

Some of us had understood (from ministerial statements made in September 2019) that the ministry would host a specific unit to inform the public about the referendums. We recall that previous referendums have been managed by an independent unit.

The ministry commented that the 2020 referendums are different from the flag referendum in 2016, which was supported by a group that led and encouraged debate on the issues. In contrast, the ministry said, it is “just providing factual information” for the 2020 referendums.

We were told that the Electoral Commission will communicate to New Zealanders about the referendums. The ministry—and, to some extent, the Ministry of Health, too—will provide factual information about the content by describing the proposed laws. The information will be neutral and fact-based. The ministry will not advocate a position for either referendum. Nor does it intend public servants to lead public debates around the referendums.

Shortly after our hearing, the Government launched the website www.referendum.govt.nz.

Consulting with Opposition parties on electoral law changes Based on past practice, National Party members understand that it is appropriate for Governments to consult with the Opposition before introducing electoral law changes. However, National Party members state that this was not done for recent electoral bills. We asked whether the ministry provided advice to the Government on the appropriateness of not consulting with the Opposition on electoral law change. The ministry replied that its advice would include the approaches that have been taken previously in similar matters. However, the ministry said that it has no particular expertise on the issue and, in the end, Ministers make their own decisions on consultation processes.

Planned legislative changes Declarations of inconsistency with the Bill of Rights Act If a court found legislation to be inconsistent with the New Zealand Bill of Rights Act 1990, it could make a declaration to that effect. The ministry said that it is advising the Minister on a possible statutory regime for the courts’ power to make declarations and requiring a

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Hate speech Since the Christchurch mosque attack on 15 March 2019, the ministry has been consulting affected communities about possible legislation on “hate speech”. We learnt that the Human Rights Commission facilitated the consultation. The ministry is now analysing the information from the consultation and expected to provide advice to the Minister before Christmas 2019. We look forward to hearing an announcement on possible hate speech legislation very soon.

Ministry response to mosque attacks We heard that, on the afternoon of 15 March 2019, the ministry activated its business continuity provisions which included locking the new Christchurch Justice and Emergency Services Precinct. The lock-down continued while the defendant was managed between the police station, cells, and courts. Others were also processed for offences relating to the main attack, including for the misuse of video. The ministry commented that all the services being in one building allowed a good level of co-ordination.

Over the next few weeks, processes for courts, coroners, work with victims, and victim support were centralised. For several weeks, this was very intensely maintained; it has gradually returned to normal, although not entirely.

Court security in various parts of New Zealand was also increased immediately after the attacks. The ministry also established a wellbeing programme for staff.

In the wake of the tragedy, the ministry has employed an extra 12 court victim advisers. Because some families were from outside Christchurch, some of the new positions were established in other areas.

We were pleased to hear that the ministry is carefully planning the management of hearings related to the trial. For instance, victims will have a separate entrance to the Christchurch court.

In court, it will be up to the judge to manage aspects of the case. The ministry said it has reviewed trial processes in countries that have suffered similar crimes. It is satisfied that the judge will have sufficient powers and flexibility to ensure a just trial, while at the same time preventing abuse of the trial process as a platform for hate speech.

Christchurch justice precinct We heard that housing the Ministry of Justice, the New Zealand Police, the Department of Corrections, and civil defence and first responder organisations together in the same precinct has enhanced interactions between the agencies. The ministry is conscious, however, that some agencies must remain distinct—for example, judges are also housed on the precinct but they are a separate branch of government.

The ministry’s main issue with the new buildings is a lack of space. Additional pressure came with the new Canterbury Earthquakes Insurance Tribunal and new victim advisers. The Public Defence Service moved to another building because of space constraints. 6

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We heard that the ministry will use its experience with the Christchurch precinct in the planning of government buildings in other centres. We also note that a review of the ministry’s critical assets was under way in November 2019. When it is completed, the ministry should have a robust database of property information to inform long-term strategic planning.

Amendments to Māori land law We were interested to hear about proposed changes to Māori land law. The ministry has been working on this with Te Puni Kōkiri. A bill currently before the Māori Affairs Committee3 seeks to improve Māori Land Court services in two ways: it would establish a dispute resolution service to encourage parties to reach agreement outside court processes, and allow registrars of the Māori Land Court to make lower-level decisions about land succession.

3 Te Ture Whenua Maori (Succession, Dispute Resolution, and Related Matters) Amendment Bill.

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Appendix

Committee procedure We met on 21 November 2019 and 5 March 2020 to consider the annual review of the Ministry of Justice. We heard evidence from the Ministry of Justice and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Hon Ruth Dyson, Harete Hipango, and Michael Wood participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry of Justice).

Ministry of Justice (Responses to written questions).

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Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial overview and service performance ...... 2 Recruitment, standards, and diversity ...... 2 Supporting mental health ...... 3 Māori reoffending ...... 4 Road safety ...... 4 Firearms regulation and buy-back scheme ...... 5 Members of Parliament meeting with Police ...... 5 Appendix ...... 7

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Recommendation The Justice Committee has conducted the annual review of the New Zealand Police for 2018/19, and recommends that the House take note of its report.

Introduction The role of the New Zealand Police is to provide services to the public that include keeping the peace, maintaining public safety, law enforcement, crime prevention, community support and reassurance, national security, participating in policing activities outside New Zealand, and emergency management. In 2019, this role was highlighted and tested during and after the unprecedented terror attack of 15 March.

As at 30 June 2019, the Police had 13,458 employees located in 400 communities across New Zealand.

Financial overview and service performance In 2018/19, the Police’s revenue and expenditure were both about 7.7 percent more than the previous year. The Police reported total revenue of $1.815 billion, compared with $1.686 billion in 2017/18. Total expenditure was $1.817 billion ($1.687 billion in 2017/18).

The Auditor-General assessed the Police’s management control environment as “very good”, being robust, effective, and appropriate for the activities of the Police.

The financial information and supporting systems and controls were rated “good”, with some recommendations for improvement. The auditor notes that the Police have made progress in implementing previous recommendations, but there are some still to be addressed.

The Auditor-General assessed the Police’s performance information and supporting systems and controls as “good”, an improvement on the previous year’s “needs improvement”. The auditor says the Police have taken positive steps to address feedback about how they report to the public on their performance, and how they measure and monitor performance internally. Some further refinements were suggested.

Recruitment, standards, and diversity Additional police officers and attrition We asked for an update on the recruitment of an additional 1,800 police officers, which was promised as part of the 2017 Government Coalition Agreement. The Commissioner informed us that they were on track to meet the target of 1,800 additional police in November 2019. We discussed attrition rates, and whether the target of 1,800 new officers was net of attrition. The Commissioner told us the target was net of attrition, that is, for 1,800 additional officers “on the beat”. He said the Police’s attrition rate continues to decrease, and now sits at 3.9

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percent, well below the state sector average of 11.8 percent. When asked whether the loss of experienced officers and increase in new recruits was a worry, the Commissioner said he was always sad to lose experienced officers. However, the Police like to retain a mix of experience and capability, together with youth, vigour, and enthusiasm. The Commissioner said he thinks 3.9 percent is a very healthy attrition rate for an organisation like the Police, and he is not looking to reduce it further. On 21 November, the graduation of 59 constables from the Royal New Zealand Police College meant that 1,825 new police have been deployed around the country since October 2017.

Standards We asked how the Police ensures that its standards are monitored and maintained, to ensure that New Zealand continues to have a world-class police service. We were told that the executive looks internationally for benchmarks, and is responsible for the standards of the service provided.

We expressed concern that there appears to have been a reduction in standards for recruits, with the removal of the physical competency test (PCT) at the start of the recruit course. We were assured that this is not a drop in training standards. Recruits still need to prove their physical capability before attending Police College. However, the PCT is technical, and could be unsafe if not done correctly, so recruits are first given training and technical advice. They are still required to pass the PCT before graduating. The Police are one of the few organisations to ensure fitness levels are maintained, and there is a requirement for officers to pass the PCT every two years in order to be deployed.

Diversity We are pleased to hear that the current recruitment drive has seen the number of Māori police officers exceed 1,000 for the first time. There are now more than 2,000 full-time female officers in the Police, which we were told was a significant milestone. At present, 23.1 percent of the Police’s constabulary staff are women, 12.6 percent are Māori, 6.4 percent are Pasifika, and 4.6 percent are Asian.

Supporting mental health A large proportion of New Zealanders—about one in five—are affected by mental distress each year. Police officers respond to around 104 mental health incidents every 24 hours. We discussed the increase in calls to the Police for mental-health-related services over the past financial year, and what is being done to address it.

We were informed of a number of initiatives by the Police at national and district level to improve the delivery of mental health services. They include attending jobs with a paramedic and a mental health nurse to provide a coordinated service; having district commanders working with executives from district health boards to initiate interventions in combination with those DHBs; and providing mental health training for their communication centres to enable efficient and effective access to support for people in mental distress.

We were also interested in what internal services are available to support staff’s own mental health and wellbeing. We heard there has been considerable investment in supporting staff,

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especially since the terror attack of 15 March. The Police have established a national network of 29 mental health champions to help improve mental health for their own people. They are also looking to partner with external agencies to ensure staff are receiving adequate support.

Māori reoffending As at 30 June 2019, 59 percent of Māori offenders reoffended within twelve months of their original conviction. We asked what the Police were doing to work towards their target of a 25 percent reduction in reoffending by Māori by 2025.1 From 2012 to 2018, the Police in partnership with iwi had a strategy called “Turning of the Tide—a Whānau Ora Crime and Crash Prevention Strategy”. They said this strategy had some success, but needed to go further.

In late 2019 the Police launched a new strategy, “Te Huringa o Te Tai”, which aims to continue to strengthen the relationship with tangata whenua. Te Huringa o Te Tai recognises that Māori remain the population most at risk from harm from social and economic disadvantage. The focus is on working with Māori to co-design sustainable and mana- enhancing interventions that reduce offending and victimisation and improve outcomes for Māori. An example of this co-design model is the development and success of Te Pae Oranga (iwi/community panels). Te Pae Oranga is a partnership between iwi, community organisations, and the justice sector. It is a Māori-led approach that provides an alternative justice outcome for people who commit low-level offences where it is not in the public interest to prosecute. The Police consider this one of their key initiatives.

Road safety In 2018, the Police introduced a new road safety target of a 5 percent reduction in road deaths each calendar year. For 2018, this would have meant 19 fewer deaths than in 2017, when 378 lives were lost. The target was not met, with 377 deaths on New Zealand roads. When asked about their road policing action plan, the Police informed us that their focus is on the four behaviours that they know cause the most harm: people not wearing seatbelts, driver impairment (from alcohol or drugs), driver distraction, and speed. The Police have increased their intervention in these behaviours by 17 percent.

We noted a reduction in the number of alcohol breath-tests. The Police conducted fewer than 1.3 million breathalyser tests, against a target of 1.6–2 million. This was 25 percent less than the previous year. The Police acknowledged that they did not meet their target, but said they were taking a more intelligent, informed, evidence-based targeting approach to checkpoints.

In November 2017, the Police recommended to the Government the introduction of random roadside drug-testing. This was due to an increase in the number of drug-impaired drivers responsible for road deaths. We asked whether the Police were satisfied with progress on

1 Baseline reoffending rate: 58% for the year ending June 2016. 4

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implementing the testing. The Police noted the importance of finding a solution, and the sooner the better.

Firearms regulation and buy-back scheme As of 20 December 2019, 56,250 firearms and 194,245 parts had been handed in. Sixty- seven percent of the firearms purchased through the buy-back scheme were in the centrefire semi-automatic category. Also, 2,717 firearms had been modified to be lawful.

Developing improved firearms legislation and managing the firearms amnesty and buy-back have been a significant challenge and priority for the Police. We noted that a report from KPMG highlighted three options for the buy-back pricing, and asked whether the Police made a recommendation to the Government about which of the options should be adopted.2 We were informed that the report was commissioned independently of the Police, and they did not seek to shape its content. The Police said they were involved in conversations about options, but did not strongly lean in the direction of a particular option.

Some of us are concerned about the inability to accurately measure the number of prohibited firearms in New Zealand, with estimates ranging from 60,000 to 240,000. We asked how effective the Police thought the chosen buy-back option would be. The Police said their knowledge about expected firearms volumes and their condition has been supplemented by discussions with trusted firearms retailers and through review of other market information. However, they told us that there is no science or ability to be accurate on the number of prohibited firearms believed to be in the country, and therefore could not comment.

Administering the Arms Act 1983 is an important function of policing. We discussed how much Police resource will be dedicated to pursuing those who have not handed in their illegal guns. We were told that, whenever the Police learn of someone who has not taken the opportunity to surrender their firearms, they will visit them. The Police cannot proactively monitor illegal firearms. However, they can gather information through Crimestoppers3 and their own intelligence systems, which supports investigations.

The Police are in discussions with several key people associated with gangs. The Police hope that people will listen to these conversations and do the right thing by surrendering illegal firearms.

The Police have been pleased with how well the districts have managed at collection events. We were told that Police staff have ensured the events have been safe. They have maintained a high level of security and acted with professionalism, respect, and empathy for firearms owners.

Members of Parliament meeting with police We asked whether there was a policy about opposition members of Parliament being able to visit police stations or talk with serving members of the Police. We were told that, out of

2 KPMG: Firearms Buy-Back Pricing. 7 June 2019 https://www.police.govt.nz/sites/default/files/publications/kpmg-report-firearms-buy-back-pricing-june-2019.pdf 3 Crimestoppers is an independent charity that helps New Zealanders fight crime by providing an anonymous and simple way to pass on information.

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Appendix

Committee procedure We met on 7 November 2019 and 5 March 2020 to consider the annual review of the New Zealand Police. We heard evidence from the Police and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the New Zealand Police).

New Zealand Police (Responses to written questions).

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Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Functions of the Judicial Conduct Commissioner ...... 2 Commissioner’s options when he finds misconduct ...... 3 Funding and expenditure ...... 3 Public awareness of the Judicial Conduct Commissioner ...... 3 Fewer complaints to the Judicial Conduct Commissioner ...... 3 Judges with conflicts of interest ...... 4 Appendix ...... 5

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Judicial Conduct Commissioner

Recommendation The Justice Committee has conducted the annual review of the Judicial Conduct Commissioner for 2018/19, and recommends that the House take note of its report.

Introduction Following a resolution of the House passed in 2019, the Judicial Conduct Commissioner became subject to Parliament’s annual review process. The Commissioner was not previously subject to annual reviews because his office is a business unit of the Ministry of Justice and, as such, is not a public organisation.

The Commissioner’s functions and powers are set out in the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004. The purpose of the Act is to enhance public confidence in the judicial system and protect its impartiality and integrity.

Alan Ritchie has been the Judicial Conduct Commissioner since 2015. The Deputy Commissioner, also since 2015, is Kathryn Snook. The Deputy Commissioner carries out the Commissioner’s functions in limited situations, including where the Commissioner has a conflict of interest.1

Functions of the Judicial Conduct Commissioner The Commissioner receives and deals with complaints about the conduct of judges. Complaints may arise during the exercise of a judge’s judicial duties or otherwise.

Depending on the seriousness of the conduct, various options are available to the Commissioner.2 They include taking no further action, dismissing the complaint, or referring it to the Head of Bench (chief judge) of the relevant court.

In very serious cases, the Commissioner may recommend to the Attorney-General that a Judicial Conduct Panel be appointed to inquire into the complaint. If a Judicial Conduct Panel recommends the removal of a judge, the Attorney-General has absolute discretion whether to do so.

The Commissioner told us that he can, and does, undertake self-initiated inquiries. Often such inquiries arise from his consideration of a complaint.

The Commissioner thinks that his governing legislation works well. Enacted in 2004, it has been amended over the years.

1 See section 8B of the Judicial Conduct Commissioner and Judicial Conduct Panel Act. 2 Under sections 15A to 17 of the Act. 2

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Commissioner’s options when he finds misconduct Serious judicial misconduct is rare in New Zealand.

The Commissioner does not make “merit determinations” of complaints. Rather, he assesses a complaint to see whether it meets the threshold under section 16 of the Act. If he considers that it does, he can choose to take one of the two actions mentioned earlier:

• He can refer the complaint to the Head of Bench. In doing so, he can say why he is referring it, but he cannot direct what the Chief Judge should do with it, nor can he expect to be told the outcome of the referral. The Commissioner and Deputy Commissioner made nine referrals to the Head of Bench in 2018/19. • If a case is very serious, the Commissioner can recommend the establishment of a Judicial Conduct Panel. This has only happened once, in 2010; the process was not continued after the judge in question resigned.

Funding and expenditure The salaries and allowances of the Commissioner and Deputy Commissioner are determined by the Remuneration Authority. The Commissioner and deputy have no staff; they receive administrative support from the Ministry of Justice.

We heard that the Commissioner’s budget is less than $500,000. Most of the costs consist of the Commissioner’s remuneration and legal fees in defending actions brought subsequent to his decisions.

Public awareness of the Judicial Conduct Commissioner The Commissioner’s website helps to inform potential complainants about his functions.3 The Commissioner believes that the public has a fair appreciation of his jurisdiction, although he noted that many complaints are about the decisions made by judges, rather than their conduct. These complaints are generally outside his jurisdiction, but he takes care to examine each one for any exceptional issue.

The Commissioner has found that judges often tell people who are not happy with them that they can make a complaint to the Judicial Conduct Commissioner if they feel they have a cause to do so.

Fewer complaints to the Judicial Conduct Commissioner In the year ending 30 June 2019, the Commissioner received 191 new complaints.4 This compares with 223 in the year to 30 June 2018, and more than 300 in each of the three years before that.

3 The website is found at https://www.jcc.govt.nz/. 4 As explained in comments 2 and 3 of the annual report, the 191 complaints relate to individual judges. The Commissioner actually received 158 complaints, but complaints about proceedings involving more than one judge are counted once for each judge. Complaints arising from proceedings in the higher courts often relate to three or five judges, and each is counted as a separate complaint.

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Vexatious or frivolous complaints The Commissioner may not ban vexatious, frivolous, or obsessed complainants; he must conduct a full examination into each new complaint. However, dealing firmly with vexatious complainants could explain the drop in new complaints. We heard that the Commissioner has reduced the time taken up by these complainants by “being reasonably firm” with the more obviously vexatious complaints. Also, it is easier for the Commissioner to decide on a complaint from a defendant whom a court has declared “vexatious” because that complaint is only about a single judge rather than several.

Judges with conflicts of interest In our role as members of Parliament dealing with constituents, we observe that complaints about judges often relate to perceived conflicts of interest. For example, we may listen to complaints about a friendship that a judge may have with a lawyer involved in a case. We asked the Commissioner when a perceived conflict of interest could be said to affect a person’s capacity to judge a case fairly.

We heard that the judiciary uses a range of documents called the Guidelines for Judicial Conduct. The Commissioner often refers to these when considering complaints. They ask whether an ordinary, untrained observer, looking at all the information, might think something was biased. The Commissioner commented that a mere former association (for example, between a judge and a lawyer many years ago) would not necessarily amount to a reason for a judge to exclude themselves.

We note that the Commissioner’s jurisdiction extends to complaints about judges’ behaviour outside the courtroom.

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Appendix

Committee procedure We met on 14 November 2019 and 5 March 2020 to consider the annual review of the Judicial Conduct Commissioner. We heard evidence from the Judicial Conduct Commissioner and the Ministry of Justice and received advice from the Office of the Clerk of the House of Representatives.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Agnes Loheni and participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Clerk of the House of Representatives (Briefing on Judicial Conduct Commissioner).

Judicial Conduct Commissioner (Responses to written questions).

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2018/19 Annual review of the Privacy Commissioner

Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 The role of the Privacy Commissioner ...... 2 “Privacy 2.0” will bring substantial changes to the Office ...... 4 The Commissioner does not audit public agencies ...... 5 Appendix ...... 6

Hon Meka Whaitiri Chairperson 420

2018/19 ANNUAL REVIEW OF THE PRIVACY COMMISSIONER

Privacy Commissioner

Recommendation The Justice Committee has conducted the annual review of the Privacy Commissioner for 2018/19, and recommends that the House take note of its report.

Introduction The Office of the Privacy Commissioner is an independent Crown entity supporting the work of the Privacy Commissioner. It investigates complaints about breaches of privacy, runs privacy education programmes, assesses the impact of new legislation, and works to promote individual privacy.

The current Commissioner is John Edwards, who was appointed to a second five-year term in February 2019.

Financial performance and audit results The Office of the Privacy Commissioner receives most of its revenue from direct Crown funding out of Vote Justice. In 2018/19 this was a total of $4.97 million. The Office received a further $251,000 in revenue from other grants, payment for forums and conferences, and interest receipts, bringing total revenue to $5.22 million.

Expenditure was $5.42 million, which meant that the Office had a $204,000 deficit overall, compared to a surplus of $61,000 in 2017/18. The Office had budgeted for a deficit, although the final deficit was higher than expected. The Office attributed this to increased costs for IT upgrades, changes in staffing, and slightly lower funding than expected.

The Auditor-General’s comments The Auditor-General rated the Office’s management control environment and financial information and supporting systems and controls as “very good”.

The Office’s performance information and supporting systems and controls were rated “good”, with some recommendations for improvement. These were mainly based on changes that are expected to be made to the Privacy Commissioner’s remit in the Privacy Bill that is currently before the House. In our hearing with the Commissioner, we were told that these changes are a very high priority for the Office. We commend the Commissioner for the work he is doing to ensure that the Office is ready for any expanded role it may receive.

The role of the Privacy Commissioner Many of our questions to the Commissioner dealt with his role in protecting privacy, and the general principles of privacy that he promotes, or that are already part of the justice system.

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Privacy is different in the criminal and civil justice systems We asked the Commissioner about a specific recent criminal investigation that highlighted inequities in how privacy principles are applied in the criminal justice system compared with the civil justice system. The Commissioner was not in a position to respond to the details of the specific incident we referred to, but explained some of the principles involved in the release of data, and how the Office is involved in the process.

The Commissioner noted that the criminal justice system sets aside the Privacy Act 1993. Instead, access to information is governed by the rules of evidence and criminal disclosure. In a civil law setting, the Privacy Act and the Official Information Act 1982 govern the release of information. The Ombudsman is responsible for hearing complaints about information being improperly withheld, while the Privacy Commissioner is responsible for complaints about the improper release of information.

Where the Ombudsman receives a complaint about information withheld on privacy grounds, he consults the Privacy Commissioner. The Commissioner’s role is to advise on the importance of the relevant information and the relevant privacy issues. The Ombudsman then weighs this advice against any other considerations that would support the release of the information in question.

The Commissioner is not empowered to stop “revenge pornography” “Revenge pornography” refers to the publishing of intimate photographs of someone without their permission, often by an aggrieved ex-partner. Currently, the Harmful Digital Communications Act 2015 provides some remedy to this, by empowering Netsafe to require the online platform to take down the images. We asked the Commissioner how well he thinks this process is working.

The Commissioner noted that, although revenge pornography is a privacy issue, it is not a Privacy Act issue in this context. As a result, although he takes an interest in the privacy implications, he does not have precise information on the efficacy of the take-down process, or the success of prosecutions for publication of revenge pornography.

The Office of the Privacy Commissioner only has the power to provide a civil remedy against the perpetrator through the Privacy Act. This power has been expanded recently, by increasing the Commissioner’s power to address actions by private persons where they are posting highly offensive content.

We asked the Commissioner more specifically how he would like to see legislation strengthened against such offensive content. He was unable to provide a response, noting that the Ministry of Justice would be the best place to seek such information.

Privacy must be weighed against other factors We asked the Commissioner what his views would be on the privacy implications of a scheme in which parents were required to disclose their children’s vaccination status to their schools. The Commissioner could not give a detailed opinion on the matter without specifics, but noted that privacy was always something to weigh up against other considerations, in this case schools’ duty to maintain a healthy and safe environment for students. This duty would have to be weighed against the particular privacy implications of a specific scheme.

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For example, the Commissioner felt that a publicly available register of vaccination status would go too far, but some more limited form of disclosure to school staff might be acceptable. The role of the Office of the Privacy Commissioner in consultation about any such programme would be to look at what the programme was trying to achieve, and to try to work out a way to achieve that without unnecessary intrusion into privacy.

“Privacy 2.0” will bring substantial changes to the Office Parliament is currently examining a Privacy Bill that would substantially expand the powers and responsibilities of the Office of the Privacy Commissioner. We heard that the Commissioner intends to entirely re-examine the business model of the Office to ensure that it is well placed to fulfil its new mandate, which the Commissioner called “Privacy 2.0”. This new mandate is expected to include the power to issue general compliance notices, rather than dealing narrowly with complaints on a case-by-case basis. The Commissioner also expects the Office to start initiating investigations based on public reports of privacy breaches, or mandatory notifications, rather than solely through complaints of significant harm to specific people. He expects that this shift will enable the Office to achieve more than it currently can.

The Commissioner told us that, as a result of these changes, the Office will need to get better at prioritising work and triaging its resources. It intends to ask for more resourcing in the future, so that it can address a wider range of privacy issues.

The Commissioner intends to ask for more capital funding We asked what further funding the Commissioner needs. The Commissioner told us that previous estimates of the extra funding that the “Privacy 2.0” changes would require did not include any capital component, but he now thinks that this would benefit the programme. In particular, he noted that the creation of a new online platform for reporting privacy breaches would both reduce costs for businesses and provide the Office with better data on privacy issues. He intends to ask for capital funding for this project, and possibly others, on the basis that his Office can provide services that effectively reduce the costs for the wider economy of privacy compliance.

Establishing a right to be forgotten We are aware of international developments around a new “right to be forgotten”. This right would allow people to request that information related to them be removed from search engine results, so that past privacy breaches or indiscretions are not connected to one’s name forever. We asked the Commissioner what his opinion is on these developments.

The Commissioner noted that the right to be forgotten is reasonably well developed, in Europe in particular, and that it could provide significant benefits to people who have been the victim of malicious privacy breaches. He noted that it is a complicated area of policy, but suggested that the possible benefits and global progress on this issue mean that New Zealand should start looking into establishing a right to be forgotten in some form.

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The Commissioner does not audit public agencies Some of us noted certain recent breaches of privacy by public agencies, and asked whether the Office keeps track of how public agencies are performing on privacy. The Commissioner said he does not do any such auditing, as he does not have the resources to do so. However, he told us that the Government Chief Privacy Officer takes surveys of how government agencies perform on privacy, and would have some idea of how each is performing relative to the rest.

We also asked the Commissioner about two specific recent breaches. One related to the Police’s firearms buy-back scheme, and the other was at the Ministry for Culture and Heritage. The Commissioner told us he is not directly involved in either matter, although he had received complaints about both incidents. He considers that his main role in these matters is to communicate the lessons learned from such breaches to other organisations. The Commissioner suggested that, had these two organisations followed the privacy impact assessment process that he advocates, they might have become aware of the flaws in their systems sooner.

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Appendix

Committee procedure We met on 12 December 2019 and 12 March 2020 to consider the annual review of the Privacy Commissioner. We heard evidence from the Privacy Commissioner and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Privacy Commissioner).

Privacy Commissioner (Responses to written questions).

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425

2018/19 Annual review of the New Zealand Productivity Commission

2018/19 Annual review of the Real Estate Agents Authority

2018/19 Annual review of the Public Trust

Report of the Economic Development, Science and Innovation Committee

March 2020

The Economic Development, Science and Innovation Committee has conducted the annual reviews of the New Zealand Productivity Commission, the Real Estate Agents Authority, and the Public Trust, and has no matters to bring to the attention of the House. The committee recommends that the House take note of its report.

Jonathan Young Chairperson 426

2018/19 Annual review of the Serious Fraud Office

Report of the Justice Committee

March 2020

Contents Recommendation ...... 2 About the Serious Fraud Office ...... 2 Performance over the past year ...... 2 Maintaining the SFO’s high standard of work ...... 2 Modern technology and serious fraud ...... 3 Improving awareness of serious fraud and corruption ...... 4 Appendix ...... 5

Hon Meka Whaitiri Chairperson 427

2018/19 ANNUAL REVIEW OF THE SERIOUS FRAUD OFFICE Serious Fraud Office

Recommendation The Justice Committee has conducted the annual review of the Serious Fraud Office for 2018/19, and recommends that the House take note of its report.

About the Serious Fraud Office The Serious Fraud Office (SFO) is the lead law enforcement agency that detects, investigates, and prosecutes New Zealand’s most serious or complex financial crimes.

As of 30 June 2019, the SFO had 50 employees, led by Chief Executive and Director Julie Read, and a senior leadership team of two general managers and a general counsel.

Performance over the past year The chief executive told us that 2018/19 had been a very busy year for the office. The number of complaints has continued to increase, with 1,138 complaints in 2018/19 (a 7 percent increase on the previous year). The office conducted fewer enquiries and investigations in 2018/19 than in the previous year, but all prosecutions were successful.

Financial performance The SFO’s revenue in 2018/19 was $10.56 million, compared with $10.4 million the previous year. Its total expenditure was $10.185 million, compared with $10.1 million the previous year. This resulted in a surplus of $375,000 being returned to the Crown.

The Auditor-General’s ratings for the office’s systems and controls were unchanged from the previous year.

Maintaining the SFO’s high standard of work We asked whether the office has the resources and personnel required to maintain its high standard of work. We are aware that the number of complaints received has doubled over the past five years but the SFO’s funding has not increased.1 The SFO said it could do more, but it makes the most of the funding it is allocated. We heard that additional funding the SFO received to improve its systems was helpful but it did not advance productivity; it merely helped it keep up with the increasing size of cases.2

Managing costs We asked whether the threshold for investigation into a case had increased because of a lack of money and people to do the work. The office acknowledged “we can’t do everything

1 Serious Fraud Office, Annual Report 2019, p. 24. 2 Budget 2017 provided $2.2 million over four years to upgrade the office’s case and evidence management systems. 2 428

2018/19 ANNUAL REVIEW OF THE SERIOUS FRAUD OFFICE that we might actually consider is a complex and serious financial crime.” Some of us are concerned that people will get away with fraud as the SFO cannot investigate all serious cases.

We heard that the office’s end-of-year surplus arose because operational money built up as employees left. Knowledgeable employees leave for private companies that offer high wages. It is difficult to replace them and the office finds it hard to train junior employees as it does not have dedicated training staff.

Referring cases to other agencies We were pleased to learn that the SFO works with other agencies to determine which agency should investigate a case. It regularly refers cases to the New Zealand Police, the Financial Markets Authority, and the Commerce Commission.

The SFO aims to start investigating cases, or refer them to another agency, as soon as possible. Some cases, based on the evidence, are clearly not for the office, such as a $100 fraud case. Other cases need to be explored further to determine the seriousness of the case and whether to keep or refer it.

Managing cases The SFO acknowledged that multiple small cases of fraud can result in a large sum of money being stolen. It assured us that it takes this into consideration when assessing whether to investigate a case. Victims’ ability to pursue redress is also taken into account.

Modern technology and serious fraud Advances in technology lead to more instances of serious fraud The number of complaints received by the SFO has doubled since 2014, and the office’s workload continues to increase. We asked whether technology was driving this increase. The office explained that technology makes it easier for people to commit fraud and not get caught. People can steal money remotely without having to interact with the person they are stealing from, making this kind of crime very appealing. Organised crime groups are starting to commit serious fraud using technology. Also, more overseas persons are now committing fraud in New Zealand via the internet.

Improving legislation to help reduce serious fraud We asked whether legislation sufficiently supports the SFO’s work in a world where technology is ever-advancing. The office indicated that changes in technology can make it hard to understand how the law should apply.

In the SFO’s view, laws relating to search warrants and service of notice could be updated. Legislation could also better align with the language of the Search and Surveillance Act 2012. It believes these changes would better empower the office to conduct remote access searches and give information to people who are entitled to it.

We were told that the office does not hold a position on potential Ponzi scheme law reform as it is outside its jurisdiction. The office suggested that certain law changes would not affect its work, as it does not play a role in the recovery of money stolen through fraud. It also does

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Improving awareness of serious fraud and corruption Educating people about how to avoid fraud is important to the SFO, although not part of its core work. It receives funding to detect, investigate, and prosecute, but not to prevent cases of serious fraud. Nevertheless, we were told that it takes every opportunity to increase awareness of fraud, whether through speaking engagements or ad hoc preventative work.

In 2018/19 the office worked with Local Government New Zealand and the Ministry of Justice on an anti-corruption programme. The programme aims to deepen people’s understanding of corruption in New Zealand and build a national anti-corruption network. We were pleased to learn that the SFO is producing a webinar about corruption aimed at new local government members, and intends to make this webinar available on its website. We encourage local authorities to use this valuable resource.

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Appendix

Committee procedure We met on 11 November 2019 and 5 March 2020 to consider the annual review of the Serious Fraud Office. We heard evidence from the Serious Fraud Office and received advice from the Office of the Auditor-General.

Committee members Hon Meka Whaitiri (Chairperson) Ginny Andersen Hon Clare Curran Hon Tim Macindoe Hon Mark Mitchell Greg O’Connor Chris Penk Hon Dr Nick Smith Dan Bidois and Brett Hudson participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Serious Fraud Office).

Serious Fraud Office (Responses to written questions).

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2018/19 Annual review of Heritage New Zealand Pouhere Taonga 2018/19 Annual review of the Arts Council of New Zealand Toi Aotearoa 2018/19 Annual review of the Children's Commissioner 2018/19 Annual review of the Ministry for Women

Report of the Social Services and Community Committee

March 2020

The Social Services and Community Committee has conducted the annual reviews of Heritage New Zealand Pouhere Taonga, the Arts Council of New Zealand Toi Aotearoa, the Children’s Commissioner, and the Ministry for Women for 2018/19.

We have no matters to bring to the attention of the House. We recommend that the House take note of this report.

Gareth Hughes Chairperson 432

2018/19 Annual review of the Broadcasting Commission (known as NZ on Air)

Report of the Economic Development, Science and Innovation Committee

March 2020

Contents Recommendation ...... 2 Overview of the Broadcasting Commission ...... 2 Financial performance and audit results ...... 2 Funding through the New Zealand Media Fund...... 2 Joint Innovation Fund ...... 2 A large proportion of applications for funding are declined ...... 3 Developing a pool of diverse creators ...... 3 Child and youth engagement ...... 4 Partnership with Te Māngai Pāho ...... 4 Support for independent and student radio ...... 5 The future of public media in New Zealand ...... 5 Appendix ...... 6

Jonathan Young Chairperson 433

2018/19 ANNUAL REVIEW OF THE BROADCASTING COMMISSION

Broadcasting Commission (known as NZ On Air)

Recommendation The Economic Development, Science and Innovation Committee has conducted the annual review of the Broadcasting Commission for 2018/19, and recommends that the House take note of its report.

Overview of the Broadcasting Commission The Broadcasting Commission, known better as NZ On Air, is an autonomous Crown entity responsible for funding the production of local media content. It distributes public funds through the New Zealand Media Fund (NZMF) for the production of content for broadcast on multiple platforms (such as radio, television, or online). NZ On Air’s funding strategy is founded on core public media principles. These include enriching the New Zealand cultural experience, improving diversity of media content, ensuring content is accessible, strengthening community life, and promoting informed debate.

NZ On Air is currently in the process of recruiting a chief executive following the departure of Jane Wrightson, NZ On Air’s chief executive since 2007. The board chair is Dr Ruth Harley.

NZ On Air was established in 1989 and is entering its thirtieth year of operation. Through the NZMF, it aims to produce content that is “high quality, diverse and discoverable”. NZ On Air described 2018/19 as “extraordinarily busy” with the effect of the one-off funding increase and its new responsibility for the Joint Innovation Fund being felt in the volume of funding requests it received.

Financial performance and audit results NZ On Air received revenue of $149.719 million in 2018/19, of which 98 percent was Crown funding. Expenditure was $145.774 million, of which 2.5 percent was used to fund its operations, with the rest going to fund content. This resulted in an overall surplus of $3.945 million, compared to a $934,000 deficit in 2017/18.

Funding through the New Zealand Media Fund This was the second year that NZ On Air has distributed its funding through the platform- neutral New Zealand Media Fund. It dispersed $141.758 million through the four streams within the NZMF (scripted, factual, music, and platform) and $0.436 million through the industry development fund. NZ On Air received a $4 million one-off funding increase in 2018/19, and in partnership with Radio New Zealand (RNZ) was made responsible for the Joint Innovation Fund.

Joint Innovation Fund In 2018/19 NZ On Air was assigned joint responsibility with RNZ for the Joint Innovation Fund. This fund provided additional funding of $6 million for NZ On Air and RNZ to 2

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2018/19 ANNUAL REVIEW OF THE BROADCASTING COMMISSION commission content with a focus on catering to audiences who are currently not well served. NZ On Air says the fund has enabled them to respond to significantly increased demand and provide more content for under-served audiences such as youth, Asian, and Pasifika peoples. The fund has already enabled the creation of 25 new content titles for the RNZ website, with most also available on other platforms.

We heard that the Joint Innovation Fund allowed NZ On Air and RNZ to team up with the Newspaper Publishers’ Association to pilot a Local Democracy Reporting service to boost civic journalism. With a $1m budget, the pilot will employ eight journalists in smaller centres with the goal of increasing multimedia reporting on the activities of local bodies and public entities.

A large proportion of applications for funding are declined In 2018/19 NZ On Air assessed 926 applications and executed 401 contracts for content and services with 257 producers, platforms, and music artists.

We note that the number of funding applications has increased by 366 percent in the past two years. NZ On Air explained that some of the increase in applications in 2018/19 was due to 12 calls it made for specific content over and above its usual five funding rounds. NZ On Air was able to call for specific content following the one-off funding increase of $4 million in Budget 2018.

Before the NZMF was launched in 2017, funding applications were declined 50 percent of the time; the decline rate is now 72 percent. We raised concern with NZ On Air that many producers have found approaching NZ On Air for funding frustrating. There is a perception that newer creators will not be successful, and that priority is given to experienced producers and content providers. NZ On Air acknowledged that the decline rate is a problem and it has negatively affected industry perceptions of the organisation. It told us that it has to turn down material that it would have funded previously because regular funding is static but the cost of production, and the number of applications, have increased.

Developing a pool of diverse creators NZ On Air told us it has worked hard to create opportunities for newer creators, and it has several initiatives that aim to improve diversity in the industry.

The Industry Development Fund has supported interventions aimed at addressing sector issues, such as the underrepresentation of women in director roles. We were pleased to hear that, in general funding rounds, priority is given to applications that provide opportunities for developing creatives.

As well as funding content and platforms, NZ On Air is also working to build a more diverse pool of talent. NZ On Air recognises that help needs to be provided to those who make unsuccessful applications for funding to increase the pool of talent for under-represented groups, specifically Asian and Pasifika creatives. We were pleased to hear that a workshop is being developed with the Pan Asian Screen Collective so these emerging creatives can learn more about what makes a successful proposal. NZ On Air also partners with Script to Screen to run mentorship programmes.

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Child and youth engagement We asked NZ On Air what percentage of funding is allocated for youth audiences. NZ On Air said that, although some content is funded specifically for children, funding is not divided into age-based buckets. It highlighted that youth audiences are harder to reach because of their tendency to switch between platforms. Because of this, the focus is more on figuring out what content appeals to the youth audience.

We also asked whether NZ On Air has a youth focus, and how it would measure the success of any youth engagement efforts. NZ On Air confirmed that, without specifically having a youth focus, it is working to develop content that is appealing for youth audiences.

NZ On Air was pleased to share the success of HEIHEI with us. Created in collaboration with TVNZ, HEIHEI is a platform for primary-aged children that features local and international content and is advertisement-free. In 2018/19 it celebrated its first birthday with more than 226,000 users, and is continuing to grow. Also in 2018/19 was the launch of Kia Kids News, a video news service presented by children for children.

We asked whether NZ On Air would partner with the Ministry of Education to support the teaching of New Zealand history in schools. NZ On Air said it has not yet considered the option of partnering with the Ministry of Education, but would be open to doing so in the future. It supports this history initiative and said existing content could easily be used.

Partnership with Te Māngai Pāho In September 2019 NZ On Air announced a partnership with Te Māngai Pāho, the Māori Broadcasting Funding Agency. They are creating a $4m factual co-fund, designed to support high-quality, prime-time Māori language content that will appeal to a broad audience. Te Māngai Pāho is a Crown entity that promotes Māori language and culture by providing funding for Māori-language programming on radio and television.

We asked whether Māori Television will be a recipient of the content generated from this funding. We raised concern that projects funded in part by Te Māngai Pāho would be broadcast on TVNZ in the first instance rather than on Māori Television. NZ On Air said that funding decisions are based on what the content is, rather than what platform it will be broadcast on. It added that some platforms pay licence fees that give them a period of exclusivity. However, once this period ends, content can be made available to other platforms including Māori Television. Indigenous stories seeking overseas funding We raised concern with NZ On Air that content makers are securing funding overseas to produce New Zealand indigenous stories. NZ On Air said it is happy that these stories are securing funding, adding that it may partner with some of the larger international companies in the future. It also highlighted that it is unable to co-fund projects that have received a Screen Production Grant from the New Zealand Film Commission, so it often funds the development of projects that then get funded internationally.

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Support for independent and student radio NZ On Air told us it provides support for independent and student radio stations in a variety of ways. Operational funding is provided for certain platforms; this funding does not cover 100 percent of costs, and there are requirements to play a certain proportion of New Zealand music. Other funding comes from its music scheme which funds certain music features that showcase New Zealand artists.

We sought NZ On Air’s views about the potential merger of TVNZ and RNZ into one entity and the potential for this new entity to cater more to the youth audience. NZ On Air confirmed that it is involved in discussions relating to the potential merger. It was unable to provide information on RNZ’s youth strategy or confirm how this would differ from the support that NZ On Air currently provides.

The future of public media in New Zealand NZ On Air says it recognises the critical role quality media plays in disseminating reliable information, linking communities, and creating catharsis in times of national distress. We were interested to hear what NZ On Air thinks about the recent Government proposal for a new public media entity.

New public media entity On 7 February 2020 the Minister of Broadcasting, Communications and Digital Media announced that work will begin on a business case to assess the viability of forming a new public media entity that would be independent, multiple-platform, and multi-media. We asked NZ On Air if it is concerned that the creation of a new entity might result in less money being available for it to produce content.

NZ On Air acknowledged that it is possible that the new entity could supersede it but it does not believe this is likely, as it would “create a huge problem with diversity”. NZ On Air assured us that it is “at the table” for discussions on how this new entity is developed, and is focusing on the broader ecosystem of public media platforms.

Competition from new places NZ On Air recognises the challenge that international online streaming services present for the production of local content. It said there has always been concern about competition from overseas content producers, and this means greater vigilance is needed in producing New Zealand’s own stories.

We asked whether the change in chief executive would lead to a change in the direction of NZ On Air. NZ On Air explained that although there will be change in the near future with the potential new entity, the new chief executive’s individual personality or tastes will not affect the content that NZ On Air funds.

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Appendix

Committee procedure We met on 20 February and 19 March 2020 to consider the annual review of the Broadcasting Commission. We heard evidence from the Broadcasting Commission and received advice from the Office of the Auditor-General.

Committee members Jonathan Young (Chairperson) Tamati Coffey Andrew Falloon Brett Hudson Gareth Hughes Clayton Mitchell Dr Stuart Smith Hon

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing paper, Broadcasting Commission - NZ on Air).

Broadcasting Commission (Responses to written questions).

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2018/19 Annual review of the Broadcasting Standards Authority

Report of the Economic Development, Science and Innovation Committee

March 2020

Contents Recommendation ...... 2 About the Broadcasting Standards Authority ...... 2 Financial performance and audit results ...... 2 Resource for Broadcasters after the 15 March attacks ...... 2 Change of classification labels and timebands ...... 3 The definition of “broadcast” excludes on-demand content ...... 3 Number of decisions issued by the BSA...... 4 Appendix ...... 5

Jonathan Young Chairperson 439

2018/19 ANNUAL REVIEW OF THE BROADCASTING STANDARDS AUTHORITY Broadcasting Standards Authority

Recommendation The Economic Development, Science and Innovation Committee has conducted the annual review of the Broadcasting Standards Authority for 2018/19, and recommends that the House take note of its report.

About the Broadcasting Standards Authority The Broadcasting Standards Authority (BSA) was established by the Broadcasting Act 1989. It is an independent Crown entity under the provisions of the Crown Entities Act 2004.

The BSA is a broadcasting content regulator, covering free-to-air and pay television, radio, and election programmes. Its principal job is to promote ethical standards in broadcasting. It does so by determining complaints alleging that broadcasters have breached the code of broadcasting practice.

Judge Bill Hastings replaced Peter Radich as the board chair in October 2018. The BSA has six staff. Belinda Moffat is the chief executive.

Financial performance and audit results In 2018/19, the BSA’s revenue was $1.5 million and its expenditure was $1.4 million, resulting in a surplus of $142,000. The Crown provided 40 percent of the BSA’s revenue, while 54 percent came from broadcasting levies, and 6 percent came from interest and other sources.

In the previous financial year, the BSA’s revenue was $1.5 million, expenditure was $1.2 million, and the surplus was $335,000.

The Auditor-General rated the BSA’s management control environment, financial information systems and controls, and performance information and associated systems and controls as “very good”. There were no recommendations for improvement in these areas. We commend the BSA on this result.

Resource for Broadcasters after the 15 March attacks We are aware that the BSA is currently reviewing the code for free-to-air television, and asked whether it was taking a position about hate speech in light of the events of 15 March 2019. The BSA explained that it is not funded to do policy work and so could not share a view on this. However, in April 2019 it had issued a guidance note for broadcasters reporting on the 15 March attacks.1 The guidance asks broadcasters to strike a careful balance: keeping viewers informed while not giving prominence to the terrorist’s views. We heard that

1 The guidance note is available here: https://www.bsa.govt.nz/assets/Uploads/a04e6d8e00/2019-BSA- Resource-for-Broadcasters-after-15-March-Attacks.pdf 2 440

2018/19 ANNUAL REVIEW OF THE BROADCASTING STANDARDS AUTHORITY the chair of the BSA thought New Zealand’s broadcast reporting on the attacks was “really, really good”. He thought that the coverage was informative and did a good job of keeping the public up to date.

Change of classification labels and timebands We congratulated the BSA on the changes to its free-to-air television classifications, which it released in February 2020. The new classifications replace the use of “adults only” and “parental guidance recommended” classifications with the G, PG, M, 16, and 18 labels seen on pay television. The BSA will also change the times when more restricted content can be shown.2 These changes will be implemented from May 2020.

We asked why these changes had taken so long, noting that labels have been used for 30 years. The BSA told us that during its last code review in 2016, it was “not quite ready to get there yet”. In its 2019 review, its research showed that viewers are changing the way they view content. This informed the BSA’s decision to change the rules about timebands, and it felt that it was appropriate to change classification labels at the same time.

The definition of “broadcast” excludes on-demand content We discussed the changing nature of how viewers consume media, which includes a large segment of the population now viewing content on-demand online. The definition of “broadcast” in the Broadcasting Act 1989 excludes on-demand content, so the BSA is not able to regulate that type of content. We asked whether the BSA thinks the law in this area should change. The BSA’s chair told us he does not believe content should be regulated according to the medium on which it is conveyed, as content concerns are the same across all mediums.

We pointed out the practical challenge in potentially monitoring all content, which would presumably extend to social media. The BSA believes that it would be unlikely that each individual who uploads content to social media would be deemed a publisher. It would be more likely that the company hosting the content would be held responsible.

Amendment bill aims to address classification of on-demand videos We note that the Governance and Administration Committee is currently considering the Films, Videos, and Publications Classification (Commercial Video on-Demand) Amendment Bill. The bill aims to reduce harm to consumers from viewing inappropriate content. The bill would do this by requiring commercial video on-demand content made in New Zealand to display appropriate and consistent labelling.

We asked why the BSA did not make a submission to the select committee on this bill. The BSA said it provided advice to the Department of Internal Affairs during the formation of the bill. Because this means its views are already publicly available, the BSA did not feel the need to reiterate its views as part of the select committee process.

2 Further information on the classification label and timeband changes can be viewed here: https://www.bsa.govt.nz/news/bsa-news/changes-to-free-to-air-television-timebands-and-classification-labels/

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We note that the BSA is working on a broader content review.3

Number of decisions issued by the BSA We note that the BSA issued fewer decision in 2018/19 than the year before. The BSA sees this as a positive sign that more broadcasters are compliant with the codes. We also note that “accuracy” is the standard most often complained about, with 56 complaints, compared to 38 complaints about “balance”, the next most complained-about standard.

3 Refer to Broadcasting Standards Authority response to written question 135. 4

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Appendix

Committee procedure We met on 13 February and 19 March 2020 to consider the annual review of the Broadcasting Standards Authority. We heard evidence from the Broadcasting Standards Authority and received advice from the Office of the Auditor-General.

Committee members Jonathan Young (Chairperson) Tamati Coffey Andrew Falloon Brett Hudson Gareth Hughes Melissa Lee Clayton Mitchell Dr Deborah Russell Stuart Smith Hon Poto Williams

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Broadcasting Standards Authority).

Broadcasting Standards Authority (Responses to written questions).

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2018/19 Annual review of Drug Free Sport New Zealand

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About Drug Free Sport New Zealand ...... 2 Financial performance ...... 2 Drug testing ...... 3 Educational programmes ...... 3 Lower-level athletes ...... 3 Appendix ...... 5

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2018/19 ANNUAL REVIEW OF DRUG FREE SPORT NEW ZEALAND Drug Free Sport New Zealand

Recommendation The Social Services and Community Committee has conducted the annual review of Drug Free Sport New Zealand for 2018/19, and recommends that the House take note of its report.

About Drug Free Sport New Zealand Drug Free Sport New Zealand (DFSNZ) is the national anti-doping organisation, with responsibility for implementing and applying the World Anti-Doping Code in New Zealand. It conducts a drug testing programme, investigates reports of doping, and provides resources and education to better inform New Zealand athletes about the consequences of doping. DFSNZ is an independent Crown entity under the Crown Entities Act 2004, and, as such, is not subject to ministerial direction.

DFSNZ employs 14 full- and part-time staff. It employs approximately 140 contractors who collect samples and deliver education programmes. The chief executive is Nick Paterson, and the board chair is Hon Warwick Gendall QC.

Financial performance About 90 percent of DFNZS’s income comes from Crown revenue, with the balance from interest and contract revenue (mainly drug testing as a service for third parties).

In the 2018/19 year DFSNZ’s revenue was $3,612,852, about 2 percent more than the previous year. Its expenditure was $3,460,082, which was 7.8 percent less than the previous year, resulting in a surplus of $152,770. This is in contrast to the last few financial years when DFSNZ had deficits.

The reduction in costs for the 2018/19 year was largely due to completing work on the New Zealand Clenbuterol case and having one testing contract with a laboratory in Australia; previously some testing was done in Auckland.

Audit results and performance against targets The Auditor-General issued a standard audit report. He rated DFSNZ’s management control environment as “very good”. Its financial information and supporting systems and controls and performance information and supporting systems and controls were rated “good”. The Auditor-General made two recommendations for improvement.

We hope to see DFSNZ act on the auditor’s recommendations.

DFSNZ met 6 out of its 10 performance targets, which were in the areas of deterrence, leadership, values, and knowledge. It failed to achieve one performance target under each area.

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For deterrence, 9 percent of athletes believe that the outcomes of their sporting competitions in New Zealand are influenced by doping. This was higher than DFSNZ’s target of 5 percent, but lower than the previous year’s result of 14 percent.

For leadership, 87 percent of the CEOs of major sporting bodies agreed that DFSNZ provides good leadership and is expert and efficient. This compared with a target of 90 percent, and a result of 92 percent in the previous year.

For values, the target for “Good clean sport” workshops was 100 seminars to 2,500 youths. DFSNZ achieved 67 seminars to 2,232 youths, which was slightly higher than the previous financial year.

For knowledge, DFSNZ had 6,581 athletes receiving education through seminars or e- learning, with a target of 7,500 athletes.

We hope to see DFSNZ achieve more of its performance targets in future.

Drug testing We were interested to hear that testing for drugs takes up approximately 50 to 60 percent of DFSNZ’s total budget. Since the organisation’s aim is to deter sports participants from doping, testing is an important part of its work.

DFSNZ told us that it needs more money for testing. However, it said it is unlikely that fewer tests would be administered if it does not receive more funding. We heard that a lot of the testing programme is intelligence-led and DFSNZ is able to test athletes in the main sports as well as other sports. Changes in technology will inevitably change what substances can be tested for and how.

Educational programmes Educating athletes about drugs and integrity in sport is one of DFSNZ’s key priorities. Its education programmes are not only for elite athletes but also for younger athletes and lower- level participants in sport. It conducts programmes with children from age 10 through secondary school, and with coaches. It said the programmes are internationally regarded and it has received positive feedback, particularly from school-age children and teachers.

DFSNZ offers online education programmes for athletes and augmented-reality learning. Augmented reality is particularly useful for newer athletes and para athletes to understand the testing process. DFSNZ would like to be educating everyone in New Zealand about integrity in sport.

High-performance athletes have often been through DFSNZ’s programmes several times, so the programmes need to be refreshed regularly to keep elite athletes engaged in the topic. Anecdotal evidence to DFSNZ is that high-performance athletes appreciate this and have found the new iterations interesting.

Lower-level athletes Part of DFSNZ’s strategy is the Speak Out! programme, which was launched in October 2019. It is aimed at encouraging participants at all levels and all areas of sport to report any

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2018/19 ANNUAL REVIEW OF DRUG FREE SPORT NEW ZEALAND concerns they may have about doping. DFSNZ considers that an increase in calls to it regarding rule-breaking shows that the programme is working.

Prosecuting offences We heard that lower-level athletes are not routinely drug-tested. Routine tests are only carried out for national and international athletes.

DFSNZ considers it important for there to be a proportionate response to offending. The World Anti-Doping Agency (WADA) has graduated penalties where there is no significant fault.

Previously the international focus has been on the rule-breaking of high-performance athletes. Currently DFSNZ’s board is investigating whether it is within the WADA’s code for national anti-doping organisations to implement a policy on how to deal with lower-level athletes and doping. DFSNZ is consulting with the WADA on this. Some of us were concerned that DFSNZ might be breaking the law by not taking action or gathering evidence against lower-level athletes thought to have been offending. DFSNZ said that if it has evidence of a rule violation, it has no discretion and must bring proceedings. It assured us that it is not avoiding gathering evidence or breaking the law.

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Appendix

Committee procedure We met on 4 and 18 March 2020 to consider the annual review of Drug Free Sport New Zealand. We heard evidence from Drug Free Sport New Zealand and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Maureen Pugh Hon Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Drug Free Sport NZ).

Drug Free Sport New Zealand (Responses to written questions).

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2018/19 Arotake ā-tau o Whakaata Māori (Te Aratuku Whakaata Irirangi Māori)

Pūrongo a te Komiti Whiriwhiri Take Māori

Poutūterangi 2020

Ngā kōrero Tūtohutanga ...... 2 Mō Whakaata Māori ...... 2 Tūranga pūtea...... 2 Whanonga ratonga ...... 3 Ngā pāhotanga mō ngā take o te wā ...... 4 Te huringa o te ao o te rāngai ...... 4 Tāpiritanga ...... 7 English version...... 8

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2018/19 AROTAKE Ā-TAU O WHAKAATA MĀORI (TE ARATUKU WHAKAATA IRIRANGI MĀORI)

Whakaata Māori (Te Aratuku Whakaata Irirangi Māori)

Tūtohutanga Kua oti i te Komiti Whiriwhiri Take Māori te arotake ā-tau o Whakaata Māori (Te Aratuku Whakaata Irirangi Māori) mō te tau 2018/19, ā, e tūtohu ana kia mataara Te Whare ki tana pūrongo.

Mō Whakaata Māori He kaporeihana ā-ture a Whakaata Māori (MTS) i whakatūria ōkawatia i te tau 2003 e tētahi Ture Pāremata. Ko tana mahi matua he tautoko i te tiakitanga, i te hāpaitanga o te reo Māori, o ngā tikanga Māori hoki mā te tuku i tētahi ratonga pouaka whakaata kounga, he whaitake ngā paunga utu. Ko tā te ratonga nei he whakamōhio, he ako, he whakangahau i ngā kaimātakitaki, ā, he whakahōhonu i te porihanga, i te ahurea, i te whakapapa o Aotearoa.

Koinei te tau tuatahi e wātea ai te Komiti Whiriwhiri Take Māori ki te kawe i te arotake ā-tau o MTS. I ngā tau ō mua, i kawea e te komiti nei he pakirehua, he kaupapa whakamōhio rānei i tana whanonga pūtea. E koa ana te ngākau i te rongo i ngā kōrero a MTS i roto i te pūnaha ōkawa o Te Whare nei mō te arotake i te whanonga pūtea.

Tūranga pūtea I te tau 2018/19, e $36.94 miriona te moni whiwhi a MTS, ā, e $1.7 miriona te tapekenga nama i pūrongotia. He pikinga paku nei tēnei i te nama i matapaetia rā, e $2 miriona, engari he kino atu i te nama i te tau 2017/18, e $1.3 miriona. Koinei te tau tuatoru i pūrongotia ai he nama e MTS, ā, te tau tuawhā i roto i ngā tau e rima ka mahue nei. E ora tonu ana tana rārangi pūtea i runga i te moni i whakaritea kētia, i te tapekenga rawa hoki. Heoi anō me ka ahua tonutia ngā nama nei, ka pau haere ngā pūkainga pūtea e hiahiatia ana hei whakahou i ngā rawa a MTS e karukaru haere nei.

Putanga o te arotake 2018/19 I oti i te Mana Arotake he pūrongo arotake māori i ngā tauākī pūtea, i te whanonga ratonga a MTS. I ngā arotake ō mua, i tūtohu te Mana Arotake kia whakaatu a MTS i tana poutarāwaho whanonga i roto i tana pūrongo ā-tau. Ka kite mātou kua oti i a MTS tētahi poutarāwaho putanga hou te whakawhanake, ko Te Huapae: Our Plan for Success. I kī mai a MTS ka whakamārama Te Huapae i ngā mahere mō ngā putanga e matapaetia ana mō muri nei, ā, me ētahi rawa hei ine i te haere i ētahi kauhanga e toru: te whanaketanga kaimahi, te ū a te hunga mātakitaki, me te whanaketanga hunga mahi.

E koa ana te ngākau i te whanaketanga o tā MTS poutarāwaho putanga, e tūhono ai āna hinonga me āna whakaputanga ki te poutarāwaho nei. Ka kite mātou kāore anō kia kitea te pā o ngā putanga e ai ki te poutarawāho i roto i ngā pūrongo ā-wāhanga, i ngā pūrongo ā-

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2018/19 AROTAKE Ā-TAU O WHAKAATA MĀORI (TE ARATUKU WHAKAATA IRIRANGI MĀORI) tau hoki. E mārama ana ki a mātou ko te takunetanga ia ka noho ko tēnei hanga hei mahi mō muri tata nei, e pā ana ki te whakatinanatanga o Te Huapae. E rikarika ana te ngākau ki te kite i tērā āhuatanga i roto i ngā pūrongo whanonga hei te tau e heke mai nei.

I kite te Mana Arotake i whakahoutia e MTS āna kaupapa here mō ngā whakapaunga utu tapu nei i te roanga o te tau. Hei tērā tau, ka whakamātauria tana whai i aua kaupapa here hou i roto i te arotake.

Hei whakakapi ake, i tūtohu te Mana Arotake kia whakawhanake a MTS i āna kaupapa here mō te hoko rawa, mō te whakahaere kirimana hoki. E mārama ana ki a mātou ko te 31 Kohitātea 2020 te rā i whakatauria hei whakaoti i te kaupapa here hou mō te hoko rawa.

Ngā wero ā-pūtea Ahu mai ai te nuinga rawatanga o ā MTS moni whiwhi i te Karauna, arā i te Pōti Whanaketanga Māori, i Te Māngai Pāho hoki. Hoatu pūtea ai a Te Māngai Pāho mō ngā utu whakaputa pāhotanga, ā, kāore tērā i piki i ngā tau e whitu ka hori, ahakoa te pikinga o ā MTS utu whakaputa pāhotanga. I kī mai a MTS he uaua rawa āna mahi i te tāmitanga ahumoni, i te pikinga o ngā utu whakaputa pāhotanga me ngā utu kaimahi, ā, i te korekore noa o ngā pūtea hou mai anō i te tau 2009. I rongo hoki mātou he nui atu ngā utu whakaputa pāhotanga e whakawhiwhia ana ki ētahi atu kaiwhakaputa pāhotanga. Ko te whakatau tata a MTS, me ka hāngai tana pūtea whakaputa pāhotanga ki te tāmi ahumoni mai anō i te tau 2008, ka nui atu tana moni whiwhi mā te $4.2 miriona i tana moni whiwhi ō naianei.

I tērā tau i kōrero mātou ki a MTS mō tana wāhi hou i te rāwhiti o Tāmaki. Kei taua wāhi hou tētahi whaitua i whakatauria hei taiwhanga mahi tuarua, engari kua hīkina aua mahere nā runga i te āhuatanga pūtea o MTS. I kī mai a MTS i whakaaro tonu ana ia ki te hanga i te taiwhanga tuarua. E hiahiatia nuitia ana ngā taiwhanga mahi puta i Tāmaki, ā, e mātoro ana te ratonga nei i ētahi atu puna pūtea hei hanga i te taiwhanga hou. E tūmanako ana mātou ka pā mai te rongo o ngā mahi hei tērā tau.

Whanonga ratonga Ahakoa ngā wero pūtea nei, ka eke a MTS ki tua noa o āna whāinga pāpāho mō āna ratonga iatohu whitiwhiti, mō āna ratonga matihiko hoki. Kua huarua te tupu o āna pāhotanga ā-ipurangi mai anō i te tau 2017, i tana rautaki e noho matāmua ai te matihiko. Ko te tikanga nei, ka eke ki tua o ngā whāinga te ratonga mō ngā hāora pāpāho, ngā pāhotanga reo Māori, te ako i te reo Māori, me ngā pāhotanga mā te rangatahi, puta i ana hōngere e rua (Whakaata Māori me Te Reo) me te ipurangi. E koa ana te ngākau i te kitenga atu e 4.59 i te 5 te taumata i eketia ai mō te kounga o te reo. Kei tua rawa tērā i tana whāinga, arā e 4 i te 5, ā, koinei te taumata tiketike rawa i eketia i ngā tau e whitu kua hori.

E 50 te ōrautanga o te reo Māori i kōrerohia i runga i te hōngere nei, i Whakaata Māori, mō ngā wā e mātakina nuitia ai, ā, he iti paku iho i te whāinga e 51 ōrau. I roto i ngā tau e ono ō mua atu, he rite tonu te ekenga o te ōrautanga ki tua noa o te 51. Ko te wawata nei ka eke anō taua whāinga.

He pakari rawa ngā ratonga ipurangi a MTS, ka eke ki tua rawa o ētahi o āna whāinga huhua. Hei tauira, e 5,572 hāora i pāhotia rā ahakoa e 1,400 kē te whāinga mō ngā

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2018/19 AROTAKE Ā-TAU O WHAKAATA MĀORI (TE ARATUKU WHAKAATA IRIRANGI MĀORI) pāhotanga i runga ipurangi—tata tonu ki te tāwhātanga. E koa ana te ngākau i te pakari o MTS i koneki, ā, ko te tūmanako ia ka hiki ia i ana whāinga mō ēnei pakaritanga ōna, kia eke tonu ai ia ki ngā taumata tiketike.

Ngā pāhotanga mō ngā take o te wā I tērā tau i kōrerohia e mātou te whakaaro o MTS ki te whakakotahi i āna pāhotanga mō ngā take o te wā. I tēnei tau i kīia mai e ia kua tino eke te whanaketanga o tana pāhotanga hou, ko Te Ao – Māori News. E koa ana te ngākau i te whakawhānuitanga o te hunga mātakitaki mā te 36 ōrau i te pāhotanga hou nei. E huri ana te ao pāhotanga take hou i a MTS, ā, e aro ana ia ki te huringa kia noho matāmua ko ngā pāhotanga matihiko. Nā runga i te huringa nei, ka nui atu ngā pāhotanga e wātea ana i runga ipurangi, i runga paepori i te putaputanga mai o ngā kōrero, kaua i roto i ngā pāhotanga e 60 miniti te roa i te tōnga o te rā. I whakamārama a MTS he mahi nunui tēnei, ā, me tino rerekē te āhuatanga whakaaro o te rōpū nei e pā ana ki ngā pāhotanga mō ngā take o te wā.

Te huringa o te ao o te rāngai E huri hohoro ana te ao pāpāho me te ao pāpāho Māori, ā, e kaingākau ana mātou ki te kōrero mō aua huringa i te taha o MTS. I pātai mātou mena e whai wāhi ana a MTS ki ngā kōrero mō te whakapiringa o Te Reo Tataki (TVNZ) me Irirangi Aotearoa (RNZ) e marohitia nei, ā, mena ka kitea e MTS he wero, he āheinga rānei mōna i te piringa nei nā. I kī mai a MTS he pai ōna whakahoanga ki a TVNZ me RNZ, ā, kua kōrero ia ki te Minita haepapa, e pā ana ki te piringa nei. E whakapono ana ia nā tōna tūranga motuhake i roto i te rāngai nei i nui ai tōna mana, ā, e whakaae ana te Minita haepapa. E whakaaro ana a MTS ka noho ia hei hoamahi ki tētahi rōpū hou. I miramira hoki ia tērā te herenga o TVNZ, o RNZ, o tētahi rōpū hou hoki ki te tautoko i ngā kaiwhakaputa pāhotanga Māori, ki te tuku pāhotanga mā ngā kaimātakitaki Māori anō hoki.

Te urutau ki ngā matea o te rangatahi, ki te āpōpō matihiko He rangatahi te hāwhe o te iwi Māori. I kī mai a MTS he mea nui rawa kia rite ia ki te whakapāpā ki te rangatahi i runga i ngā tūāpapa e pai ai rātou, nā runga i te āhuatanga o te iwi. Ko tētahi o ngā whāinga putanga o Te Huapae ko te aronga o te 30 ōrau o ngā pāhotanga a MTS ki te rangatahi, ki te tamariki. I te Mahuru, i whakarewaina e ia tana tūāpapa e kīia nei ko TUKU, he tūāpapa pāhotanga mō te rangatahi, nā te rangatahi. I miramira hoki a MTS ki a mātou, ka toro ki tawhiti ngā pāhotanga i hangā mā te rangatahi. He whakaari a Ahikāroa e hāngai ana ki te rangatahi, e mātakina ana e ngā kaimātakitaki tokomaha, e ngā pakeketanga katoa; koinei tētahi o ā MTS pāhotanga e mātakina nuitia ana.

He tere rawa te heke haere a te hunga mātakitaki i te iatohu whitiwhiti a MTS i te taha o ētahi atu kaipāpāho, nā runga i te nui rawa o te rangatahi i tana hunga mātakitaki. Manohi anō, nā runga i te tere rawa o te whakawhānuitanga o te hunga mātakitaki i āna pāhotanga ā-ipurangi, i arotahi ai a MTS ki te huringa i te iatohu whitiwhiti ki te aronga matihiko. I pātai mātou mō ngā mahere a te ratonga ki te whakamāunu i te hunga mātakitaki ā-ipurangi. I rongo mātou ko tētahi wāhi o tā MTS rautaki e noho matāmua ai te matihiko ko te whakawhanake i ngā pāhotanga hei-te-minanga e wātea tuatahi ana i runga ipurangi. Ko

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2018/19 AROTAKE Ā-TAU O WHAKAATA MĀORI (TE ARATUKU WHAKAATA IRIRANGI MĀORI) tētahi tauira o tēnei rautaki ko āna pāhotanga o ngā take o te wā. Ka taea hoki aua pāhotanga te whakamahi anō mō te hunga mātakitaki iatohu whitiwhiti, e whakahirahira tonu nei. I whakamiramira hoki a MTS he nui ki a ia ōna kaimātakitaki roroa, arā ko ngā kaumātua me ngā pakeke—nāna nei i whawhai mō MTS mai anō i tana ōrokohanga, e pūmau ana ki ngā ratonga iatohu whitiwhiti—ā, kāore ōna whakaaro kia mahue atu taua hunga.

I pātai mātou he pēhea ngā tatau matihiko a MTS i te taha o ētahi atu kaipāpāho. I kī mai a MTS he uaua te whakarite i āna mahi ki ā ētahi atu kaipāpāho, he motuhake rawa nō te wāhi ki a ia, te whakahaeretia nei i raro i ngā ture mārōrō, me ōna wero motuhake hoki. I whakaae hoki ia “we can never win the numbers game, but what we can win is hearts and minds, and what we can also win is the struggle to revitalise our language and tikanga”.

Te huringa o te ao pāpāho Māori E whakahaeretia ana he arotake kaupapa here mō te ao pāpāho Māori, te pānuitia rā e te Minita Whanaketanga Māori i te tau 2018. Ko te whāinga o te arotake ko te mātoro i ngā huarahi hohoro, huarahi whaitake mō te hoatu pūtea, mō te whakaputa hoki i ngā pāhotanga reo Māori, ngā pāhotanga tikanga Māori hoki. Waihoki ko te hanganga e tika ana mō te ao pāpāho Māori kia eke ai ngā putanga ki te taumata tiketike.

I tērā tau i kī mai a MTS e rata ana ia ki te arotake, ā, e mahi tahi ana i te taha o Te Puni Kōkiri i te hinonga nei. I tēnei tau i rongo mātou e tautoko ana a MTS i te paetawhiti o te arotake. I pātai hoki mātou mena e mārama ana ki ngā kaiarotake te tūranga motuhake o MTS i te wāhanga i muri mai i ngā whakataunga Tiriti. I kī mai a MTS e whakapono ana ia e mārama ana ki ngā kaiarotake tana tūranga nui i te rāngai, ā, me te wāhi ki a ia i te whakapakaritanga, i te whakahōhonutanga o te tuakiri ahurea o Aotearoa.

I pātai mātou mehemea e matapae ana, e hiahia ana rānei a MTS kia arotakea ōna whakatureture. I kī mai a MTS e āta whakatakoto ana ngā ture mahi i ngā ritenga, ā, e aro nui ana ki te pouaka whakaata iatohu whitiwhiti. Hei tā MTS me arotake ōna whakatureture, ōna whakaritenga pūtea hoki ka tika, kia whaitake tonu ai ia, kia taea ai hoki e MTS te whanake tonu i roto i te rāngai matihiko.

Te whakawhanaketanga hunga mahi Ko tētahi take nui i te huringa o te ao pāpāho Māori ko te whanaketanga o te hunga mahi o te ao pāpāho Māori. I kī mai a MTS he wāhi tauwhāinga te rāngai nei, ā, he tokoiti ngā tāngata e whai ana i ngā pūkenga e hiahiatia ana. Ka kite hoki mātou i te wehenga o ngā pāpātanga utu i waenga o MTS me TVNZ, ā, e 12 ōrau te wehenga o te utu taurite i TVNZ i runga ake i tā MTS. I te tau 2018/19, i raro iho ngā utu kaimahi i te tahua i whakatauria mā te $2 miriona (14 ōrau), ā, e $1.5 miriona (11 ōrau) i ā te tau 2017/18. E 26 ō MTS tūranga mahi wātea i te 30 Pipiri 2019 i waenga i ngā tūranga wā kikī e 124, ahakoa te whakahounga rautaki i te hanganga o te rōpū, i whakakorea ai ētahi tūranga e 22 i te tau ō mua.

I kī mai a MTS kāore i pai ngā mahi a te rāngai katoa e pā ana ki te whanaketanga hunga mahi. He tokoiti rawa ngā kaikōrero reo Māori i whakangungua ki te tuhinga niupepa, ki ngā mahi pāpāho rānei. E whai ana a MTS ki te piri kia tata ki ngā kura, ki ngā wharekura hei akiaki i te rangatahi ki te kuhu ki te rāngai. He putanga matua tēnei i roto o Te Huapae. Ka whakaae hoki ia e hiahiatia ana tētahi rautaki whakawhanake hunga mahi mō te rāngai

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2018/19 AROTAKE Ā-TAU O WHAKAATA MĀORI (TE ARATUKU WHAKAATA IRIRANGI MĀORI) katoa kia puta ake ai he hunga mahi nui rawa hei tautoko i a MTS, i ngā reo irirangi ā-iwi, i ētahi atu rōpū hoki. Kaua ko te whakataetae a tēnā rōpū, a tēnā rōpū o te rāngai mō ngā tāngata tokoiti noa iho.

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Tāpiritanga

Hātepe komiti I hui mātou i te 12 Huitanguru me te 18 Poutūterangi 2020 hei whakaaroaro i te arotake ā- tau o Whakaata Māori (Te Aratuku Whakaata Irirangi Māori). I rongo kōrero taunaki mātou mai i a Whakaata Māori, ā, i whiwhi kupu tohutohu mai i Te Tari o te Mana Arotake.

Mematanga komiti, ko (Heamana) Dan Bidois Joanne Hayes Matt King Hon Nicky Wagner Hon Meka Whaitiri

I whai wāhi a Melissa Lee ki ētahi wāhanga o tēnei arotake.

Ngā kupu tohutohu me ngā kōrero taunaki i whiwhi I whiwhi mātou ki ngā tuhinga i raro nei hei kupu tohutohu, hei kōrero taunaki hoki mō tēnei arotake ā-tau. E wātea ana i te paetukutuku Pāremata, kei www.parliament.nz, i te taha o te tuhinga o ā mātou kōrero.

Te Tari o te Mana Arotake (Whakamōhiotanga ki a Whakaata Māori).

Whakaata Māori (Ngā whakautu ki ngā pātai i tuhia).

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Report of the Māori Affairs Committee

March 2020

Contents Māori version ...... 1 Recommendation ...... 9 About the Māori Television Service ...... 9 Financial position ...... 9 Service performance ...... 10 Current affairs programming ...... 10 The changing sector landscape ...... 11 Appendix ...... 13

Rino Tirikatene Chairperson

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Māori Television Service (Te Aratuku Whakaata Irirangi Māori)

Recommendation The Māori Affairs Committee has conducted the annual review of the Māori Television Service (Te Aratuku Whakaata Irirangi Māori) for 2018/19, and recommends that the House take note of its report.

About the Māori Television Service The Māori Television Service (MTS) is a statutory corporation that was formally established in 2003 by an Act of Parliament. Its principal function is to contribute to the protection and promotion of te reo Māori and tikanga Māori through the provision of a high-quality, cost- effective television service that informs, educates, and entertains viewers, and enriches New Zealand’s society, culture, and heritage.

This year is the first year the Māori Affairs Committee has been able to conduct an annual review of MTS. In previous years the committee has conducted inquiries into or briefings on its financial performance. We are pleased to hear from MTS within the House’s formal system for reviewing financial performance.

Financial position In 2018/19, MTS had revenue of $36.94 million and reported a net deficit of $1.7 million. This is a slight improvement on its forecast $2 million deficit but worse than the 2017/18 deficit of $1.3 million. It is the third year in a row that MTS has reported a deficit, and the fourth year in the last five. Its balance sheet remains healthy due to established liquidity and working capital, but continued operating deficits will continue to deplete the reserves needed to replace MTS’s aging assets.

Results of the 2018/19 audit The Auditor-General issued a standard audit report on MTS’s financial statements and service performance. In previous audits, the Auditor-General had recommended that MTS illustrate its performance framework in its annual report. We note that MTS has developed a new outcomes framework, Te Huapae: Our Plan for Success. MTS told us that Te Huapae outlines plans for the future and expected outcomes as well as tools to measure progress across three fronts: staff development, audience engagement, and workforce development.

We are pleased to see MTS develop an outcomes framework, with its activities and outputs linked to the framework. We note that the results achieved against the framework are not yet reflected in quarterly and annual reporting. We understand that this is intended as a next step in implementing Te Huapae. We look forward to seeing this in next year’s performance reporting.

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The Auditor-General noted that MTS updated its sensitive expenditure policies during the year. Compliance with these new policies will be tested in next year’s audit.

Finally, the Auditor-General recommended that MTS develop its procurement and contract management policies. We understand that MTS was due to finalise a new procurement policy by 31 January 2020.

Financial challenges MTS’s revenue is derived almost entirely from the Crown, through Vote Māori Development and Te Māngai Pāho. Te Māngai Paho funds production costs and this funding has remained flat for the past seven years, while MTS’s production costs have risen. MTS told us that inflation and rising production and personnel costs, combined with no new funding since 2009, have made it difficult to operate. We also heard that production costs are funded at a higher rate for other providers than for MTS. MTS estimated that if production funding had maintained pace with inflation since 2008, its revenue would be $4.2 million higher than it currently is.

Last year we spoke with MTS about its new site in East Tāmaki. Its new premises have a large space that was to be the site of a second studio, but MTS’s financial position has meant that these plans have been deferred. This year MTS told us that it is still planning to build the second studio. Studio space is in high demand around Auckland and the service is exploring different funding options to develop the new space. We hope to hear progress on this next year.

Service performance Despite financial challenges, MTS consistently exceeds its broadcast targets in its analogue and digital services. Its digital-first strategy has more than doubled its online content offering since 2017. On average, across both its channels (Māori Television and Te Reo) and online, the service exceeded targets for broadcast hours, Māori language content, Māori language learning, and content targeted at young people. We are particularly pleased to see that its language quality assurance rating for te reo Māori was 4.59 out of 5, well above its target of 4 out of 5 and the highest rating in the last seven years.

The Māori Television channel’s percentage of spoken content in te reo Māori during prime time was 50 percent, slightly below the target of 51 percent. Over the previous six years the percentage has been consistently above 51 percent. We hope to see this target met again.

MTS is particularly strong in its online services, considerably exceeding many of its targets. For example, while its target for the number of hours of content available online was 1,400, it provided 5,572 hours—nearly four times as many. We are pleased to see MTS’s strength in this area and hope to see it raise its targets in areas where it has such great strength, so it can continue to excel.

Current affairs programming Last year we discussed MTS’s intention to amalgamate its current affairs programming. This year it told us that it had successfully developed its new programme, Te Ao—Māori News. We were pleased to hear that the new programming has increased its audience by 36 10

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2018/19 ANNUAL REVIEW OF MĀORI TELEVISION (TE ARATUKU WHAKAATA IRIRANGI MĀORI) percent. MTS is continuing to transform its current affairs programming and is currently focusing on shifting to digital-first current affairs. This shift will involve more content being made available online and on social media as news transpires, rather than in 60-minute bulletins at the end of the day. MTS described this as a substantial piece of work that requires a transformation of the organisation’s mind-set around current affairs programming.

The changing sector landscape The media landscape and the Māori media sector are both changing rapidly, and we were interested to discuss those changes with MTS. We asked whether the service is being consulted on the proposed merger of Television New Zealand (TVNZ) and Radio New Zealand (RNZ) and whether it sees any possible challenges or opportunities for MTS in the merger. MTS told us that it has good relationships with both TVNZ and RNZ and has engaged with the responsible Minister on the merger. It is confident that its special role in the sector gives it a strong mandate and is recognised by the responsible Minister. MTS expects to continue to play a complementary role to any new agency. It also emphasised to us that TVNZ, RNZ, and any new agency also have an obligation to support Māori content producers and provide content for Māori audiences themselves.

Adapting to rangatahi’s needs and a digital future Rangatahi (young people) make up half of the Māori population. MTS told us this demographic make-up means that it is particularly important for it to be ready to engage with rangatahi on the platforms they prefer. One of the target outcomes in Te Huapae is for 30 percent of MTS’s content to be youth- and children-focused. In September it launched the TUKU platform, a content platform for rangatahi, by rangatahi. MTS stressed to us that content developed for youth can find a broad audience. Ahikāroa is a youth-oriented drama that attracts a diverse audience of all ages; it is MTS’s most popular piece of content.

Because a high proportion of its audience is rangatahi, the analogue audience is declining particularly rapidly for MTS relative to other broadcasters. On the other hand, a rapidly growing online audience means MTS is focused on transitioning from an analogue focus to a digital focus. We asked how the service plans to serve its digital audience. We heard that MTS’s digital-first strategy includes developing video-on-demand content that can be made available online first. Its current affairs programming is an example of this strategy. This content can also be repurposed for analogue audiences, which remain important. The service emphasised that it values its established audience of kaumātua and pakeke—who have fought for the service from its inception and depend on analogue services—and it has no intention of leaving that audience behind.

We asked how MTS’s digital numbers compare to other providers. MTS told us that it is difficult to compare its work with other broadcasters because it has a unique remit governed by restrictive legislation and unique challenges. It said it accepted that “we can never win the numbers game, but what we can win is hearts and minds, and what we can also win is the struggle to revitalise our language and tikanga”.

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The Māori media sector shift The Māori media sector is currently undergoing a policy review, announced by the Minister for Māori Development in 2018. The review aims to explore the most efficient and effective ways of funding and producing te reo and tikanga Māori content and structuring the Māori media sector to achieve the best outcomes.

Last year MTS told us that it welcomed the review and was working closely with Te Puni Kōkiri on the project. This year we heard that MTS supports the review’s vision. We particularly asked whether MTS felt that its unique position was appreciated by reviewers working in a post-Treaty-settlement space. MTS told us it was confident the reviewers understood its important role in the sector and its role in strengthening and adding to the cultural identity of Aotearoa New Zealand.

We asked whether MTS expects or needs a review of its legislation. MTS told us that its operating legislation is highly prescriptive and focused on analogue television. MTS feels that both its legislation and its funding arrangements will need a review if they are to continue to be fit for purpose and to allow the service to develop further in the digital sector.

Workforce development A key aspect of the Māori media sector shift is the development of the Māori media sector workforce. MTS told us that the sector is competitive and there are few people with the necessary skills. We also note the ongoing disparity in pay rates between MTS and TVNZ, with TVNZ’s average remuneration being 12 percent higher than MTS’s. Staff costs in 2018/19 were $2 million (14 percent) below budget and $1.5 million (11 percent) lower than in 2017/18. MTS had 26 vacancies as at 30 June 2019 out of a full-time-equivalent base of 124, despite a strategic realignment that disestablished 22 positions in the previous year. This realignment was an effort to reduce costs as part of MTS’s commitment to financial sustainability.

MTS told us that the whole sector has done poorly with workforce development. There are few fluent te reo speakers training in journalism or broadcasting. MTS aims to work more closely with kura and wharekura to encourage rangatahi to move into the industry. This is a key stakeholder outcome in Te Huapae. It also acknowledges the need for a sector-wide workforce development strategy that can produce a workforce big enough to support MTS and iwi radio and other organisations, rather than seeing each organisation in the sector competing for a small pool of people.

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Appendix

Committee procedure We met on 12 February and 18 March 2020 to consider the annual review of the Māori Television Service (Te Aratuku Whakaata Irirangi Māori). We heard evidence from the Māori Television Service and received advice from the Office of the Auditor-General.

Committee members Rino Tirikatene (Chairperson) Dan Bidois Marama Davidson Joanne Hayes Matt King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

Melissa Lee participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Māori Television Service).

Māori Television Service (Responses to written questions).

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2018/19 Annual review of the Ministry for Culture and Heritage

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 Financial overview ...... 2 Results of the 2018/19 audit...... 3 Proposed changes to RNZ Concert FM...... 3 Privacy breach on website for Tuia – Encounters 250 ...... 4 Declining numbers of hard-copy publications ...... 4 Digitisation and accessibility of resources ...... 5 Business case for a new public media entity ...... 5 New Zealand history in schools ...... 5 Appendix ...... 7

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR CULTURE AND HERITAGE

Ministry for Culture and Heritage

Recommendation The Social Services and Community Committee has conducted the annual review of the Ministry for Culture and Heritage for 2018/19, and recommends that the House take note of its report.

Introduction The Ministry for Culture and Heritage funds and monitors 17 agencies in the arts and music, broadcasting and film, heritage, and sport and recreation sectors. It also provides policy advice in these areas. The ministry’s other functions include researching New Zealand history, publishing books and online resources like Te Ara – the Encyclopedia of New Zealand and Te Tai Treaty Settlement Stories, and caring for New Zealand memorials, monuments, war graves, and symbols of national identity.

The ministry’s strategic intentions are based around its overall purpose: he ngākau titikaha, he hononga tangata – promoting a confident and connected culture.

The ministry’s strategic priorities are to ensure that:

 all New Zealanders can access and participate in cultural experiences  the cultural sector is supported and growing sustainably  New Zealanders share a distinct and inclusive identity and value our history and traditions Te Arataki, the ministry’s Māori engagement strategy, has three priorities:

 He ngākau titihaka; striving for confidence across Manatū Taonga.  He hononga tangata; creating opportunities for all New Zealanders to connect with Māori culture through the ministry’s work.  He hononga Tiriti; working collaboratively in line with Te Tiriti to support iwi and Māori priorities by working in partnership with iwi, sector, government, and other external agencies.

Financial overview The ministry’s total revenue was $29.26 million for the year ending 30 June 2019. Its total expenditure was $24.3 million, against a budgeted $26.93 million, resulting in a surplus of $4.95 million. This compares to a $9.01 million surplus in 2017/18.

The 2018/19 surplus arose from underspending and rephasing of the ministry’s work programme. This included rephasing $3.01 million of expenditure for Tuia – Encounters

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250.1 Most of the Tuia 250 spending occurred during the voyaging event in 2019, and related revenue is expected to be appropriated in 2019/20 for this purpose.

In addition, the has made annual contributions towards amounts previously paid by the Crown towards the Great War Exhibition. This funding was paid to the exhibition in previous years, so this contribution is collected by the ministry and returned to the Crown, contributing to the surplus. Personnel costs were also lower than budgeted due to delays in filling new positions.

Results of the 2018/19 audit The Auditor-General issued a standard audit report, meaning he was satisfied that the information audited fairly reflected the ministry’s activities for the year and its financial position at the end of the year.

The Auditor-General assessed the ministry’s financial information and supporting systems and controls as “very good”. He assessed the ministry’s performance information and supporting systems and controls as “good”, the same as in the previous year.

The Auditor-General downgraded the ministry’s management control environment from “very good” in 2017/18 to “good” in 2018/19. He recommended that the ministry set up an independent audit and risk committee, carry out regular reviews of its policies, and update the following policies to meet best-practice requirements:

 sensitive expenditure policy  fraud, corruption, and theft policy  payments for overhead invoices such as telecommunications, made without financial delegations

Proposed changes to RNZ Concert FM The ministry advises on the allocation of radio frequencies for non-commercial purposes, and monitors the use of non-commercial licences. In February 2020, RNZ announced plans to take its classical music station, Concert FM, off the FM frequency and replace it with a new youth-oriented music channel. Following a petition and public protest, the move was cancelled.

The ministry said it had not been aware of the decision taken by the RNZ board and management before it was announced. However, we were told that the ministry had known that RNZ was undertaking a review of its music strategy and was aware of RNZ’s plans to provide youth radio. The ministry also said their officials were present at a meeting with the Minister of Broadcasting along with the Chair and Chief Executive of RNZ on 27 January.

The ministry has an available frequency set aside for youth radio, but it said RNZ had not officially requested to use this frequency. We asked whether the ministry had expected RNZ to do so and were told that the ministry was not waiting for a request because RNZ had

1 Tuia – Encounters 250 was a commemoration in 2019 marking 250 years since the first encounters between Māori and Pākehā in 1769.

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR CULTURE AND HERITAGE other options available to it, such as using multimedia channels. RNZ reported in their Annual Review that they approached the ministry mid-2019 to see if an FM network could be made available for broadening their services. The advice they received from the ministry was it would be incredibly difficult for RNZ to get access to them, and that the frequency required funding.

Following the annual review of the ministry, the Committee has requested a “full and comprehensive timeline of communications to/from RNZ, MCH, Ministers of the Crown, and/or any other Government Agency and/or Crown Entity in regards to the RNZ Music Strategy and any information prepared surrounding the reserved Maori and Youth FM Spectrum (102 & 103 FMs) since 26 October 2017”.

The Ministry of Culture and Heritage informed the committee that a “comprehensive answer in the timeframe asked for by the Committee is not possible due to the substantial collation and research required. However, the Ministry notes that it is currently responding to requests under the Official Information Act that capture more recent material on this topic. Due to the need for consultation and collation, a response to these requests will be provided to the requestors no later than 28 April, earlier if possible. The Ministry would be happy to share a copy of these responses with the Committee once they are complete.”

We find this less than satisfactory considering the committee is required to report back to Parliament on the Annual Review of the Ministry of Culture and Heritage by 31 March 2020.

Privacy breach on website for Tuia – Encounters 250 In 2018, the ministry contracted an external company to build a website to promote Tuia – Encounters 250. The ministry later expanded the scope of the website to allow people to apply to be part of the trainee crew on the voyage. Information provided by applicants, including passports, driver licences, and birth certificates, was accessed and copied by third parties, affecting 302 applicants. The ministry commissioned an independent review to investigate the breach, and received its report in December 2019.

The ministry explained that errors had been made by both the contractor, who failed to properly secure the information, and the ministry, who failed to conduct security testing. The independent review says that ministry and supplier processes did not meet best practice risk management, Privacy Act requirements, or protective security requirements. We noted that the breach undermined public confidence in the ministry, and asked what remedial steps had been taken.

The ministry told us that it has made security testing mandatory for all systems holding personal information, and moved privacy responsibilities to its chief legal officer. In addition, it now requires all systems that hold personal information to receive sign-off at deputy chief executive level. With these strengthened processes and new steps, the ministry is confident it will avoid a similar incident in future. We intend to monitor progress in this area.

Declining numbers of hard-copy publications We note that the ministry has published fewer history books in recent years. The ministry explained that the way people consume information is changing, and a lot of effort now goes

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR CULTURE AND HERITAGE into the ministry’s websites. We learned that the ministry has recently worked on a series of books on New Zealand history relating to the First World War, to coincide with the First World War centenary. The ministry has also been focused on publishing more diverse content, including New Zealand biographies, to Te Ara – the Encyclopedia of New Zealand.

Digitisation and accessibility of resources Some of us are concerned that the National Library of New Zealand has reduced its overseas book collection by more than 600,000 titles, and Archives New Zealand has reduced its reading room hours. The ministry said these are operational matters for the Department of Internal Affairs, although the two organisations work closely together and share many of the same interests. One of the ministry’s strategic priorities is to make sure that heritage is protected for future generations and is as accessible as possible. The ministry told us it is undertaking a major digitisation project to allow users to access resources from their own homes. We look forward to hearing about progress on the project.

Business case for a new public media entity In February 2020, the Minister of Broadcasting, Communications and Digital Media announced that a business case will assess the viability of forming a new public media entity. The ministry has engaged PwC to undertake the business case, and will be working closely with RNZ, TVNZ, and NZ On Air. We asked how the ministry will ensure that New Zealanders have access to quality public media for the medium to long term.

The ministry explained that the aim is to consider economies of scale, and to have an organisation that is flexible. It noted that any new media entity should be able to solve issues into the future, rather than just meet the needs of today. The ministry also stated that a future entity might become more platform-neutral.

We asked whether the different funding models of RNZ and TVNZ could be an impediment or an advantage for a merger. The ministry pointed out that Cabinet wants any new entity to have public media at the heart of its objectives, but different funding models would be examined. The ministry also noted that several TVNZ programmes are already classified as public media, and have broader benefits beyond their commercial value.

We look forward to hearing about the progress of the business case.

New Zealand history in schools In September 2019, the Government announced that New Zealand history will be taught in all schools and kura by 2022. The Ministry of Education will work collaboratively to create an implementation package with teaching and learning resources for the 2022 school year.

The ministry hopes to play an active role in the project, and is already working with the Ministry of Education. For example, it is working to make the information gathered from iwi and hapū during Tuia – Encounters 250 and Te Tai Treaty Settlement Stories available as resources that can be used in school curricula. We look forward to hearing about the progress of this work.

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We asked whether the histories being captured were led by hapū, as opposed to being iwi- specific. The ministry explained that when working on Te Tai Treaty Settlement Stories, the ministry had changed the way it works, and is led by the hapū’s wishes.

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Appendix

Committee procedure We met on 12 February and 18 March 2020 to consider the annual review of the Ministry for Culture and Heritage. We heard evidence from the Ministry for Culture and Heritage and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kangongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Ministry for Culture and Heritage).

Ministry for Culture and Heritage (Responses to written questions).

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2018/19 Annual review of the Ministry for Pacific Peoples

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 Background ...... 2 Financial overview and 2018/19 audit results ...... 2 Pacific Aotearoa Lalanga Fou report ...... 2 Engagement work ...... 3 A new Pacific Aotearoa vision ...... 3 Budget bids for 2019 ...... 3 Organisational growth ...... 3 Pacific Business Trust ...... 3 Pacific Languages Unit ...... 4 Pacific Employment Support Service / Tupu Aotearoa ...... 4 Pay equity in the public sector ...... 5 Pacific leadership and representation in the public sector ...... 5 Pacific health and wellbeing ...... 6 Appendix ...... 8

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR PACIFIC PEOPLES

Ministry for Pacific Peoples

Recommendation The Social Services’ and Community Committee has conducted the annual review of the Ministry for Pacific Peoples for 2018/19, and recommends that the House take note of its report.

Background The Ministry for Pacific Peoples is the Government’s principal adviser on policies and interventions to improve wellbeing for Pacific peoples in New Zealand. Pacific peoples make up 7.4 percent of New Zealand’s population. Of this group, 62 percent were born in New Zealand.

The ministry works with communities and public and private sector organisations to deliver policies and strategies for New Zealand’s Pacific communities. The ministry’s priorities are to strengthen Pacific language, culture, and identity, build Pacific leadership, and increase Pacific income and wealth.

The ministry’s chief executive, Laulu Mac Leauanae, was appointed in July 2017. As at 30 June 2019, the ministry had 49.5 full-time-equivalent employees, located in the national office and three regional offices.

Financial overview and 2018/19 audit results In 2018/19, the ministry received revenue of $8.279 million. Expenses were $8.249 million, resulting in a surplus of $30,000. The previous year it had revenue of $7.656 million, expenses of $7.751 million, and a surplus of $135,000.

The ministry achieved all of its performance targets for 2018/19. These targets included the number of public events held with Pacific communities, ministerial satisfaction with the ministry’s services, the quality of the ministry’s technical advice, and the number of nominees put forward for governance positions and honours.

The Auditor-General rated the ministry’s management control environment, financial information systems and controls, and performance information and supporting systems and controls as “good”.

Pacific Aotearoa Lalanga Fou report In 2018/19, the ministry replaced the 20-year-old vision previously set by the former Ministry of Pacific Island Affairs with a new vision centred on feedback from Pacific communities throughout New Zealand.

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Engagement work We heard that, under an initiative called Pacific Aotearoa, the ministry engaged with 2,500 Pacific people across the country to better understand the aspirations, goals, and concerns of Pacific communities. We heard that it engaged with community groups 99 times over a year, with three or four engagements a week. The ministry received feedback that communities wanted ownership of Pacific initiatives, and to see themselves reflected in them.

A new Pacific Aotearoa vision The information gained from community engagement was published in the Lalanga Fou report, which then shaped the ministry’s new Pacific Aotearoa vision. The vision comprises four priorities:

 thriving Pacific language, cultures, and identities  prosperous Pacific communities  resilient and healthy Pacific peoples  confident, thriving, and resilient Pacific young people.

Budget bids for 2019 We heard that the Budget 2019 bidding process included business cases for these new priorities. These Budget bids were successful and will result in significant organisational growth in 2019/20. Guided by its four new priorities and with a substantial funding increase, the ministry is expanding initiatives like Tupu Aotearoa, the Pacific Business Trust, and the Pacific Languages Unit, as detailed below. The ministry said it now has a greater understanding of its Pacific community’s voice and wishes to deliver the community’s aspirations. The ministry will report back to its communities in a summit in June 2020.

We also heard that the ministry worked across agencies in Budget 2019 to develop a package of $113 million over four years for Pacific outcomes.

Organisational growth Vote Pacific Peoples was increased in Budget 2019. The appropriation for 2019/20 is $19.863 million, a 63 percent increase on the forecast $12.194 million for 2018/19.

We note that the Auditor-General has recommended that the ministry develop performance measures to assess the efficacy of its increased services from 2019/20. It also noted that significant change and growth in the ministry will be necessary to deliver these increased services. The ministry will assess its workforce capability requirements in 2019/20 and update its workforce plan.

Pacific Business Trust Alongside other providers, the Pacific Business Trust (PBT) supports businesses in the Pacific community. Under Budget 2019, the PBT received funding of $11 million over four years, a significant increase from the previous $1.2 million per annum. We heard that with

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR PACIFIC PEOPLES this funding, the PBT aims to develop 140 Pacific businesses. The ministry told us that the PBT will also undertake research and evaluation to assess the status of Pacific businesses, and build a framework to extend beyond the targeted 140 businesses.

We asked about the PBT’s capacity to undertake this increased output. We were assured by the chief executive that the trust can deliver and will be regularly monitored by the ministry. The chief executive noted that there is a robust process around contract negotiations and monitoring this work.

Some of us are concerned that targets have not been put in place to measure the PBT’s success. We note that the ministry has outlined areas of research and evaluation, and relevant partnerships, but not targets to measure success. The chief executive said that the target for the PBT is to support 140 businesses so that they grow and develop employment outcomes.

Pacific Languages Unit In Budget 2019, the ministry was allocated $20 million over four years to develop the Pacific Languages Unit. This will be established in 2019/20 and is expected to be operational by 2022/23. The unit will provide advice on Pacific language revitalisation, commission and publish research on Pacific languages, maintain the orthography of Pacific languages, and fund community-based Pacific language initiatives, programmes, and courses. One example of this work is the Languages Innovation Fund, which funds community groups that deliver community programmes in their languages.

The ministry indicated that the Pasifika Education Centre (PEC) will play a critical part in increasing the use of Pacific languages in communities. PEC is an organisation that delivers educational programmes and advocates for Pasifika languages, knowledge, and cultural skills. The ministry has allocated almost $4 million to community languages.

The chief executive noted that UNESCO has identified the languages of Tokelau, the Cook Islands, and Niue as endangered. He explained that, for many Pacific nations, more people live in New Zealand than in the Islands. Of the 62 percent of Pacific people born in New Zealand, 40 percent speak a Pacific language. The ministry acknowledged its responsibility to ensure that Pacific languages survive.

We heard that the ministry is establishing a technical advisory group to consult on the best approaches for language survival, and to guide the ministry on which languages should be prioritised. This year the ministry partnered with the Ministry of Business, Innovation and Employment, the Ministry of Foreign Affairs and Trade, and the Ministry of Social Development to run a language technology fono. This meeting involved language leaders from the Islands and within New Zealand, as well as technology experts. The ministry said the technical advisory group will follow from that work.

Pacific Employment Support Service / Tupu Aotearoa The Pacific Employment Support Service (PESS), now Tupu Aotearoa, aims to reduce the rate of Pacific young people not in employment, education, or training (NEET). The programme started in Auckland as a pilot, which spread to Hamilton after its success. Under

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Budget 2019, the ministry was allocated $14.5 million to further expand the programme into wider Auckland, Wellington, and Canterbury over 2019–2023.

The ministry also received $8.85 million in funding from the Provincial Growth Fund to expand Tupu Aotearoa into six rural regions in 2019–2021. We asked whether the programme would be extended to smaller provincial areas, some of which have high Pasifika populations. The chief executive confirmed that providers have been secured across the country, including in areas such as South Canterbury, Hawke’s Bay, Waikato, and Bay of Plenty.

The ministry noted that, in total, the expansion of the programme will benefit 2,870 Pacific young people. The ministry has received feedback from providers who say that the programme is life-changing for some people, who, for example, have been placed into apprenticeships and are earning more money than their parents previously had. We heard that this impact flows through to the participants’ families and communities, who see new potential and opportunities through the programme.

We heard that the ministry evaluated the PESS pilot programme and found that, for every dollar invested, the Government saved $11.52. The ministry told us that for the $8.2 million invested in the programme overall, the Government saved $45 million. The savings were achieved by keeping NEET populations off benefits and in employment, contributing to the economy.

Pay equity in the public sector We discussed the ministry’s work to address pay equity for Pacific people, particularly women. Chief executive Laulu Mac Leauanae chairs Pou Mātāwaka, a group of state services chief executives working to address the ethnic and gender pay imbalance, with the support of other agencies. We heard that in 2019 this group commissioned a report titled Exploring the Ethnic Pay Gap in the Public Service, by Professor Jarrod Haar, which highlighted the steps required to address pay equity. Pou Mātāwaka will use this information in collaboration with the Government to develop and build on pay equity initiatives.

We also heard that Cabinet has signed off on a public sector Pacific employment strategy with a focus on Pacific women, who are particularly affected by pay inequity.

Pacific leadership and representation in the public sector The chief executive told us that the ministry aims to increase the number of Pacific people in senior leadership roles across the public service. He said that, ideally, he would like Pacific representation in leadership roles to reflect the proportion of Pacific people in New Zealand’s overall population, which is projected to rise to 10 percent. The chief executive noted that this is a generational issue and a long-term goal.

We heard that the ministry is proud of the leaders it is cultivating within its own workforce. The ministry wishes to nurture its middle level of talent to adopt leadership responsibilities. The chief executive noted that he hopes leaders within the ministry will then have the opportunity to take up senior roles in the wider public sector. The ministry supports public sector employment and leadership initiatives like Tupu Tai and TupuToa.

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The ministry acknowledged its role in providing leadership opportunities for Pacific talent and challenging other public service organisations to ensure Pacific representation in leadership positions. We discussed the need for bolder conversations across the public sector to challenge executives to employ and create intentional leadership pathways for Pacific people. We heard that public sector chief executives have established committees to address diversity and inclusion, and they have created strategies to drive opportunity for Pacific leadership.

We were told that Cabinet has signed off on a cross-agency public sector Pacific wellbeing framework that will include measuring the progress of government agencies in recruiting and appointing Pacific people. The framework includes Kapasa, which is a tool that encourages advisers to engage critically with the perspectives and concerns of Pacific peoples when developing policy. We heard that this cross-agency approach will result in more coordinated and effective engagement with Pacific communities, and will ensure that public sector agencies are held to account in delivering for Pacific people.

We were told that the Ministry for Women and the Office of Ethnic Communities are jointly undertaking ethnicity and gender diversity reporting on state sector boards and committees. The results are expected to come out in May 2020. The Ministry for Pacific Peoples told us that its records indicate that there are 71 Pacific people serving on state sector boards and committees. It noted that not all organisations publish corporate and board memberships.

We also asked about the number of Pacific people in the state sector and the different roles that they hold. The State Services Commission publishes public service workforce data on an annual basis on its website. The data provides a breakdown by ethnicity, occupation, and senior leader trends.1 We expect the ministry to hold public sector organisations accountable for their commitments to Pacific employment and leadership strategies.

Pacific health and wellbeing The ministry noted that mental health is an issue for many Pacific youth. We heard that a group of young people within the ministry is developing initiatives targeted at improving mental health outcomes for Pacific youth. The chief executive explained that the young people within the ministry are driving this work because they have the relevant understanding of youth issues. The group’s work will draw on Pacific influences across New Zealand.

The ministry told us that it is working in partnership with the Ministry of Health to support its Pacific health and mental health strategies. The Ministry of Health is responsible for the programmes, and the Ministry of Pacific Peoples supports it. The ministries have signed a memorandum of understanding, with a particular focus on innovation. We heard that a cultural group at the Ministry of Pacific Peoples will offer guidance and feedback to the Ministry of Health on how funding could be best used for Pacific peoples. The ministry noted that a working group will be established to oversee the work on the ground and ensure effective delivery for Pacific communities.

1 https://ssc.govt.nz/our-work/workforce-data/ 6

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We discussed the ministry’s role in Pacific community engagement around the 2019 measles outbreak. We heard that the ministry worked in partnership with the Ministry of Health to offer feedback and communications during the outbreak. The ministry expects to be involved in a debriefing and subsequent recommendations from the Ministry of Health.

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Appendix

Committee procedure We met on 12 February and 11 March 2020 to consider the annual review of the Ministry for Pacific Peoples. We heard evidence from the Ministry for Pacific Peoples and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry for Pacific Peoples).

Ministry for Pacific Peoples (Responses to written questions).

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2018/19 Annual review of the Museum of New Zealand Te Papa Tongarewa Board

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Museum of New Zealand Te Papa Tongarewa ...... 2 Financial overview and audit results ...... 2 Overview of Te Papa’s activities and achievements ...... 3 Work with iwi ...... 3 Working with universities ...... 4 Te Taiao nature exhibition ...... 4 Caring for collections...... 5 Making Te Papa accessible for all New Zealanders ...... 5 Appendix ...... 6

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2018/19 ANNUAL REVIEW OF THE MUSEUM OF NEW ZEALAND TE PAPA TONGAREWA BOARD

Museum of New Zealand Te Papa Tongarewa Board

Recommendation The Social Services and Community Committee has conducted the annual review of the Museum of New Zealand Te Papa Tongarewa Board for 2018/19, and recommends that the House take note of its report.

About the Museum of New Zealand Te Papa Tongarewa Te Papa was established by the Museum of New Zealand Te Papa Tongarewa Act 1992 and is an autonomous Crown entity.

Te Papa Tongarewa translates literally to “container of treasures”. The museum looks after New Zealand’s national heritage, protecting, acquiring, researching, and providing access to collections of the nation’s taonga. Te Papa also coordinates and assists other organisations with shared goals. In the 2018/19 financial year 1.55 million people visited Te Papa, a slight increase from 1.52 million in 2017/18.

Te Papa’s chief executive, Geraint Martin, was due to step down at the end of 2019. We thanked Mr Martin for his service since taking up the role in April 2017, and wish him all the best for the future.

Courtney Johnston will be the new chief executive, and attended our hearing in December. Dr Arapata Hakiwai is the Kaihautū (Māori co-leader). Dame took over in July 2018 as chair of Te Papa’s eight-person board.

Financial overview and audit results Te Papa’s total revenue increased in 2018/19 to $68.47 million compared with $61.64 million in 2017/18. This comprised $29.6 million of Crown revenue and $38.9 million of commercial revenue. As a result of increased commercial activity, both revenue and expenses increased in 2018/19. Te Papa’s total operating expenditure increased from $55.30 million in 2017/18 to $62.39 million in 2018/19. However, depreciation and amortisation expenses were $17.27 million, which meant Te Papa reported a net deficit of $11.19 million. For the first 15 years of its existence, Te Papa received no funding for depreciation, resulting in a significant backlog of capital projects. In Budget 2019, Te Papa’s baseline funding was increased by $50 million over four years. This was primarily to fund the continuation of important maintenance work at the museum. We were told that Te Papa is now in the process of completing repairs or replacement of infrastructure, as well as planning for new exhibitions.

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Audit results and recommendations The Auditor-General assessed Te Papa’s management control environment as “good”. He notes that Te Papa excludes services for culturally sensitive projects from the scope of its procurement policy. The Auditor-General recommends that Te Papa clarify whether this approach represents a valid exemption from the Government Rules of Sourcing.1

For its performance information and supporting systems and controls, Te Papa was given a rating of “good”. The Auditor-General continues to recommend that Te Papa develop high- level and medium-term outcome measures aligned to its current strategic plan.

Te Papa’s financial information and supporting systems and controls were given a “very good” rating with no recommendations for improvement.

Overview of Te Papa’s activities and achievements In their opening remarks to the committee, Te Papa’s chief executive and board chair described some of Te Papa’s significant achievements from the past financial year.

We were pleased to hear about some successful exhibitions including the terracotta warriors, Toi Art, and Finale: Bouquet. Te Papa’s new nature exhibition, Te Taiao Nature, opened in 2019. It has attracted many visitors and received international publicity. We were told that The Guardian published an article about Te Taio which praised the exhibition for being diverse and inclusive, describing it as world leading.

Te Papa said it was a successful year for the museum as a tourist attraction, and it has been able to tell some uniquely New Zealand stories through exhibitions and events.

Work with iwi Te Papa’s Kaihautū (Māori co-leader) told us about the work Te Papa is doing to engage with iwi, contribute to Māori development, and enable Māori contributions to society and culture.

In June 2017, the Gisborne iwi Rongowhakaata was welcomed as Te Papa’s eighth iwi in residence ahead of the opening of the exhibition Ko Rongowhakaata: The Story of Light and Shadow. Te Papa supports the iwi-in-residence programme by working with Rongowhakaata to pursue, and develop, initiatives of value to the iwi. Te Papa told us that one initiative is to help Rongowhakaata take possession again of their meeting house, Te Hau ki Tūranga. The meeting house, which currently resides in Te Papa, was confiscated by the Crown in 1867 and is set to be returned to Rongowhakaata.

Other initiatives include hosting iwi groups at Te Papa and running a series of korero called Rukupō Talks. In its annual report, Te Papa notes that these talks provided an opportunity for the iwi to reconnect with their whare, giving insight into its history, and enabling the discussion of its future.

1 The Government Rules of Sourcing are the government’s standards of good practice for government procurement.

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We were told about the March 2019 Tūhonohono i ngā taonga-ā-iwi conference which was organised in partnership with the Rongowhakaata iwi trust. This was an opportunity for iwi and hapū in the East Coast region to share their cultural heritage initiatives. We heard that this kind of knowledge-sharing benefits the museum sector as well as iwi.

To celebrate the year of indigenous language, Te Papa participated in a number of projects which showcased te reo Māori. They included opening Te Taiao Nature, Te Papa’s first bilingual exhibition; supporting Te Matatini, a nationwide kapa haka festival; and hosting Matariki celebrations. Te Papa said it looks forward to playing a more dynamic role in the revitalisation of te reo Māori.

Working with universities We acknowledged the close relationship Te Papa has established with iwi and asked if it could work with research institutions and universities in a similar manner. Te Papa said it would like to have a strong relationship with universities because collaboration produces positive outcomes for the museum.

Te Papa said that universities have been involved on the Te Taiao exhibition right from the beginning, which it sees as a step in the right direction. Te Papa has also been upskilling staff and now offers a post-doctoral research position which increases its capacity to do research.

Te Taiao nature exhibition We discussed the newly opened Te Taiao nature exhibition. Te Papa told us the exhibition interweaves Western science and mātauranga Māori, something which could only have been done in New Zealand. The exhibition is based on extensive research and collections Te Papa already had. It also explores two of the biggest environmental challenges facing New Zealand: climate change and water pollution.

Te Taiao includes a display about water quality which features a fridge with nine bottles of dyed liquid intended to represent what different waterways in New Zealand look like. The bottles also have information on them explaining whether the water is drinkable and discussing some causes of water degradation.

One of the bottles represents water from a farm stream. The bottle contained liquid that was dyed brown and featured an image of a cow which appeared to be defecating in water. Some of us were disappointed with how the display framed the water pollution issue. The agricultural community has also expressed its disappointment, saying the display reinforces an anti-farming narrative and fails to acknowledge the work farmers are doing to keep waterways on farms clean.

We asked what can be done to ensure that all New Zealanders, particularly the agricultural community, feel included in conversations about water pollution, and acknowledged for their efforts to protect waterways. As a first step, Te Papa told us it has changed the controversial bottle label. Te Papa said the label was never meant to show a cow standing in water and apologised if people perceived it that way. Te Papa’s chair said she has personally contacted the leaders of all major farming organisations to explain that the display was not

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2018/19 ANNUAL REVIEW OF THE MUSEUM OF NEW ZEALAND TE PAPA TONGAREWA BOARD meant to be offensive. We heard that videos highlighting what New Zealanders are doing as kaitiaki (guardians) of the environment will be added to the exhibition. This will include a video acknowledging the great work being done to protect rural waterways and streams.

Some of us expressed concern that an exhibition catering to a wide audience on complex environmental problems risks the issues being over-simplified. Te Papa agreed that this is a challenge. It expressed confidence that, while it distils information to make it more accessible, every exhibition is rooted in robust science and research. Te Papa is working with Crown Research Institutes and universities to ensure this remains the case.

Caring for collections We asked Te Papa whether it can afford to take care of its collections well, and is doing so. Te Papa said it has invested significantly to ensure it follows good and objective standards of collection care. It does not simply rely on a collection manager’s professional judgement of good practice.

Te Papa said this approach has proven successful. An international panel was very impressed with its work in implementing the standards. Moreover, the process of creating the standards has revealed what is going well and where more investment is needed.

Making Te Papa accessible for all New Zealanders The majority of domestic visitors to Te Papa are from Wellington. Given that Te Papa is such a valuable resource, we asked what it is doing to make its collections more accessible to all New Zealanders.

We were told that digitising Te Papa’s collections is a big part of its work to become more accessible to New Zealanders who live outside Wellington. The digitisation process has begun, but there is not enough money to digitise everything it would like to at this time.

Te Papa is also taking its collections and resources outside its walls by doing more work with other museums, galleries, and iwi. This has involved loaning items to these groups, or facilitating loans from other institutions. For example, we were told that Tairāwhiti Museum was loaned 38 taonga from institutions in the United Kingdom and Germany.

Te Papa said that it recently arranged a meeting with all the major museum directors to discuss the possibility of a national collection which would be held collectively by all of the museums. Discussions about this are in the early days, but Te Papa said the idea holds some interesting possibilities. We are interested to see how this idea progresses and what it might look like in practice.

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Appendix

Committee procedure We met on 18 December 2019 and 4 March 2020 to consider the annual review of the Te Papa Tongarewa Board. We heard evidence from Te Papa and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie-Warren Clark

Todd Muller, Hon Nicky Wagner, and Hon Poto Williams participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Museum of New Zealand Te Papa Tongarewa).

Museum of New Zealand Te Papa Tongarewa (Responses to written questions).

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2018/19 Annual review of the New Zealand Film Commission

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the New Zealand Film Commission ...... 2 Fluctuating funding ...... 3 Adapting to consumers’ changing viewing habits ...... 3 Building international relationships ...... 4 Supporting New Zealand’s screen industry workforce ...... 5 Promoting diversity in filmmaking ...... 5 Thanking the commission ...... 5 Appendix ...... 6

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New Zealand Film Commission

Recommendation The Social Services and Community Committee has conducted the annual review of the New Zealand Film Commission for 2018/19, and recommends that the House take note of its report.

About the New Zealand Film Commission The New Zealand Film Commission is a government agency formed to assist with creating and promoting New Zealand films. It was established under the New Zealand Film Commission Act 1978.

The commission assists New Zealand filmmakers by providing grants and financing to develop and produce films. It administers the New Zealand Screen Production Grant and other grants, and assists with co-productions. It also actively markets New Zealand films and filmmakers, and organises New Zealand participation at major international film festivals and markets. It helps with training and career development within the industry by partnering with other industry organisations, both nationally and internationally.

Kerry Prendergast is the chair of the commission. Annabelle Sheehan is its chief executive.

Financial and service performance The majority of the commission’s funding for 2018/19 came from the Lotteries Grants Board ($16.984 million––about 65 percent of its revenue). The commission received Crown funding of $6.701 million (about 25 percent of its revenue) from the Ministry for Culture and Heritage and the Ministry of Business, Innovation and Employment. The remainder of its revenue was generated by income from films, distribution fees, interest, and write-backs.1

In 2018/19, the commission’s operating income was $26.358 million, compared with $32.296 million in the previous year. Its operating expenditure totalled $32.173 million, compared with $27.482 million in 2017/18. This resulted in an operating deficit of $5.816 million.

The Auditor-General assessed the commission’s management control environment and financial information systems and controls as “very good”.

The commission’s performance information and associated systems and controls were rated as “good”. To improve this rating, the Auditor-General recommended that the commission develop clear data definitions for its performance measures before the start of the year in which they are to be reported. The Auditor-General also recommended that it review its annual reporting processes so it can provide information to the auditors in a timely manner.

1 A write-back entails recording as income a provision that had previously been made for bad or doubtful debts, but which was no longer required. 2

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Fluctuating funding Each year, the majority of the commission’s funding comes as a grant from the Lotteries Grants Board. We asked how the commission manages the risks around fluctuations in the grant it receives.

The commission said it bases its budget on the average of what it has received to date. It told us that it communicates well with the Lotteries Grants Board, which notifies it regularly with updated projections. Midway through each financial year, the commission performs a budget review, and adjusts its operations and programmes accordingly.

When the commission receives more or less funding than expected, it can choose to add or cut programmes and projects. However, it has built a buffer into its reserves to give it flexibility in how it manages funding fluctuations.

We heard that, in the last two years, the commission’s reserves have dropped to about $3 million as it has invested heavily in activating projects from underrepresented sectors in the community. This includes funding for projects where the key creatives are women and Māori, for films where the majority of the dialogue is in te reo Māori, and for the development of films from the Asian and Pacific Island New Zealand communities.

Adapting to consumers’ changing viewing habits The commission reports that the global screen industry is undergoing a time of rapid change. People can now access content on a growing number of platforms, and digitisation has altered the economic structures of the film industry. With the changes in audience habits, filmmakers face “significant challenges to gain finance and reach audiences”.2

We noted too that the US live TV audience for the Oscars fell to an all-time low in 2020, reflecting an industry-wide decline in live TV viewing. We were interested in how the commission is anticipating and adapting to consumers’ changing viewing habits.

Screen Sector Strategy 2030 The commission said it is working with the Government and industry partners to develop the Screen Sector Strategy 2030. The strategy aims to bring a collective focus to the sector to maximize the opportunities and strengths that exist with the changing nature of the industry, both locally and globally.

Developing content for streaming platforms Whereas awards shows, live TV viewing, and cinema screenings might be struggling to capture audiences, we heard that there has been a significant uptake of streaming platforms and services. Particularly for audiences seeking drama, the commission reported that this is the “peak TV” decade, where series drama from all over the world can be streamed by the viewer at their convenience.

The commission is working with filmmakers to find the best format to tell their stories and reach their audiences. For example, we heard that the commission has been working with

2 New Zealand Film Commission, Statement of Intent 2019-2023, p. 9.

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Asian and Pacific Island New Zealanders to develop high-end feature-length dramas that are currently being featured on TV1’s Sunday evening drama slot.

The commission also reported that it works to connect New Zealand filmmakers with international financiers, production companies, and exhibition platforms to ensure that this country’s stories are competing for screen time globally.

Developing important content Because the development of content is guided by the market’s appetite, the commission is constrained in its ability to develop content it thinks is important. However, it told us that it works to leverage and support new and important stories. For example, the commission said that it did not expect that the film, “For My Father’s Kingdom” would attract a big audience. However, it supported the film because of its cultural importance to all New Zealanders.

Building international relationships One of us had recently seen a film, supported by the commission, at the NZ International Film Festival. Entitled, “Capital in the 21st Century”, the film is based on a book by French economist Thomas Piketty, and explores the long-run effects of wealth inequality.

The commission said it had chosen to support the film for a number of reasons. The director, Justin Pemberton, is a New Zealander. As well as wanting to support his work, the commission noted that a lot of the film’s spending would happen in New Zealand during the editing process. The commission also considers that the story has global value.

Co-production partnerships “Capital in the 21st Century”, we heard, was also an official co-production. New Zealand has co-production treaties with 17 countries. The treaties generally achieve a balance of contributions from each country (creative, financing, and expenditure), and specify that the production must have a producer from each country.

The benefits of co-production include: access to local and foreign incentives; access to international markets and audiences; the ability to share resources and risk; and the ability to work together to deliver projects of a larger scale.

Co-productions enable New Zealanders to have their stories told all over the world, but also recognise the importance of supporting creative New Zealanders in telling stories with global value. We heard that the commission works to a ratio to allocate its funding: 80 percent of the projects it supports involve New Zealand stories or New Zealand settings, with the remaining 20 percent supporting New Zealanders telling global stories.

Attending film festivals The commission reported spending of about $350,000 on its “International Relations” programme. The bulk of this allocation is primarily geared to getting New Zealand writers, directors, and producers to international film festivals. The commission said that if it invests in sending New Zealand creatives to festivals, they can often attract up to 40 percent of their production funding from other entities attending the festival.

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Supporting New Zealand’s screen industry workforce New Zealand boasts some spectacular, diverse, and accessible filming locations. However, its landscape is not the only reason New Zealand is an attractive place to produce films. According to the commission, New Zealand’s screen industry workforce has a reputation for being smart, innovative, and flexible.

… in sustainable employment New Zealand’s screen industry workforce is most fully utilised when significant directors, like Sir Peter Jackson or James Cameron, are shooting films in New Zealand. The commission sees these as tremendous opportunities for New Zealanders to learn, upskill, and mature in their industry work. Even after these projects conclude, the commission hopes that the skills that New Zealanders learn will flow back into the industry and the films that they might make themselves.

Working on large-scale projects has also enabled New Zealand’s screen industry workforce to build particular skills and intellectual property that have grown into well-established businesses. We heard that companies like Weta, Digipost, and South Pacific Pictures are able to offer long-term employment to many industry workers.

… in collective bargaining In 2019 the Government restored the collective bargaining rights for screen industry workers. The commission said it was pleased that this process was industry-led, and it believes the outcomes will be positive for the industry overall.

The commission told us that it has no enforcement powers and cannot impose conditions or requirements when a bid is made to it for funding. However, it observed that collective agreements would likely mean that filmmaking becomes more efficient. This would reduce the costs of making a film, and therefore lessen the amount of funding required from it.

Promoting diversity in filmmaking We heard that the commission is developing a diversity policy, guided by a survey that it ran in August 2019. The Gender, Diversity and Inclusion Screen Industry Survey aimed for a snapshot of people’s experiences in the screen industry. This is assisting the commission with identifying people’s needs and creating a benchmark against which to measure progress in future years.

The commission told us that, of the programmes it funds, it aims to have half led by women. We were also pleased to hear that the commission is developing key performance indicators that promote Māori filmmakers and storytellers.

Thanking the commission We thanked the commission for the work it does in promoting New Zealand’s cultures, both domestically and internationally. We also agreed that some of the commission’s valuable and immeasurable work lies in building the mana of communities whose voices are heard and whose stories are told.

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Appendix

Committee procedure We met on 12 February and 4 March 2020 to consider the annual review of the New Zealand Film Commission. We heard evidence from the commission and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata'a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the New Zealand Film Commission).

New Zealand Film Commission (Responses to written questions).

New Zealand Film Commission, Powerpoint to Select Committee.

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2018/19 Annual review of Sport and Recreation New Zealand 2018/19 Annual review of the New Zealand Artificial Limb Service 2018/19 Annual review of the New Zealand Lotteries Commission

Report of the Social Services and Community Committee

March 2020

The Social Services and Community Committee has conducted the annual reviews of Sport and Recreation New Zealand, the New Zealand Artificial Limb Service, and the New Zealand Lotteries Commission for 2018/19.

We have no matters to bring to the attention of the House. We recommend that the House take note of this report.

Gareth Hughes Chairperson 489

Briefing on the 2018 performance of the New Zealand Symphony Orchestra

Report of the Social Services and Community Committee

February 2020

Contents Recommendation ...... 2 About the New Zealand Symphony Orchestra ...... 2 Financial overview ...... 2 Results of the 2018 audit ...... 3 The Orchestra’s year of experimentation ...... 3 Forecasting cycles ...... 4 Financial reporting cycle ...... 4 Building up reserves ...... 4 National Centre for Music ...... 5 Overall response ...... 5 Appendix ...... 6

Gareth Hughes Chairperson 490

BRIEFING ON THE 2018 PERFORMANCE OF THE NEW ZEALAND SYMPHONY ORCHESTRA

Briefing on the 2018 performance of the New Zealand Symphony Orchestra

Recommendation The Social Services and Community Committee has reviewed the performance of the New Zealand Symphony Orchestra for 2018, and recommends that the House take note of its report.

About the New Zealand Symphony Orchestra The New Zealand Symphony Orchestra (NZSO) is an autonomous Crown entity established under the New Zealand Symphony Orchestra Act 2004. It is unusual for an orchestra, as it does not have a permanent home. One of its main objectives, as set out in the Act, is to tour the country and give more New Zealanders access to music.

The NZSO undertakes a variety of touring and school concerts, education and community outreach projects, music recording, accompaniments for ballet and opera, and other commercial work, including film scoring.

The NZSO has 118 full time equivalent staff members, of whom 90 are players, and 28 are administrative staff. The Minister for Arts, Culture and Heritage appoints the five to eight board members. At the time of our hearing, the Chair was Laurence Kubiak, who had been in the role for six months, and the Chief Executive was Christopher Blake, who was due to retire at the end of 2019.

The NZSO’s financial year is unusual, as it runs on the calendar year (1 January to 31 December), rather than the financial year. Although this timing differs from our other annual reviews, we have examined the matters that would be considered in a normal annual review.

Financial overview The Government provides 75 percent of the NZSO’s income, while the remainder comes from ticket sales, sponsorship, and fundraising. In 2018, the NZSO received $3.058 million from concert revenue, $14.646 million from government funding, $2.083 million from other revenue, and $106,000 from interest revenue.

The NZSO’s main cost is staffing, which was $11.259 million in 2018. Staff costs are determined by what is in the union agreement. We heard that the NZSO is concerned about wages rising while government funding remains static. It has begun discussions with the Government to look at options for a more sustainable funding model.

In 2018 the NZSO’s revenue was $19.893 million (against a budgeted $20.774 million). This was a 4.4 percent increase from 2017’s $19.049 million. Expenditure was $21.019 million (budgeted: $21.136 million), an increase of nearly 9 percent from 2017’s $19.289 million. The resulting deficit saw reserves drop to $753,000 from 2017’s $1.879 million.

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A higher deficit than expected in 2018 In 2018 the NZSO returned a deficit of $1.126 million, more than three times the budgeted deficit of $362,000. (The NZSO also returned a deficit in 2017, of $240,000.) We heard that the Board had been shocked at a November board meeting to see the deficit so large.

We asked how the deficit had come as such a surprise. We heard that at the October board meeting the deficit was only $3,000 more than the budgeted deficit of $362,000. By the November meeting it had grown to the $1.126 million total. We were told that a breakdown in management systems had resulted in an individual not making the financial accruals that should have been made. NZSO informed us that this issue with its management systems has been resolved.

Results of the 2018 audit The Auditor-General issued a standard audit report for 2018. The audit found that the NZSO met or exceeded all of its outcome measures. These are that:  New Zealanders are inspired by high quality symphonic music  New Zealanders have ready access to symphonic music  New Zealanders create new symphonic music. We were pleased to see the NZSO’s commitment to delivering these objectives.

Some of us were, however, concerned to see the OAG’s downgrading of two ratings for the NZSO’s systems and controls. The ratings for its management control environment and its financial information systems and controls were downgraded from “very good” to “good”. Its performance information and associated systems and controls remained rated “good”. The Auditor-General made a number of recommendations for improvement. He also reiterated concerns raised in 2017 about the NZSO’s statement of performance: it is not reader-friendly and does not effectively explain how well the organisation is performing.

The NZSO noted that some of its practices are antiquated. It received this audit report early in 2019, so work has already begun on the auditors’ recommendations. External consultants have been brought in as part of a larger programme of work to upgrade systems and IT. We look forward to seeing the results of this work.

The Orchestra’s year of experimentation Using 2017’s reserves surplus, the NZSO made 2018 its “year of experimentation”, aiming to diversify and grow its audience. While keeping its subscription series, the NZSO also launched the Shed Series and the Baroque Series. Both innovations found audiences: 2018’s audience was the highest it has ever been, at 113,683 people (up from 2017’s 83,314). However, this did not translate to higher revenue. Alongside the experimental work, the NZSO also put on a series of all nine of Beethoven’s symphonies. This was highly successful, and audiences were at 104 percent of capacity.

The Shed Series was avant garde music aimed at the “hipster” generation, while the Baroque Series was aimed at a similar audience to the subscription series. The Baroque Series was successfully attended throughout New Zealand. These concerts do not require a

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BRIEFING ON THE 2018 PERFORMANCE OF THE NEW ZEALAND SYMPHONY ORCHESTRA traditional concert hall as they involve only 30–40 musicians, so they can use more unconventional spaces as venues.

Some of us are concerned that there was no correlation between putting on more shows and an increase in revenue. Although ticket revenue was up, there was also a substantial increase in events. The NZSO said that it sees a more experimental and diverse programme as the way of the future. However, it accepts that the way it approached this in 2018 was not sustainable. There is a strong demand for the variety of performances it can offer, and it needs to find ways to deliver this in a more cost-effective way.

Finding solutions for the future In 2020, the NZSO is trialling a project called “NZSO Setting up Camp”. This project is a series of residencies, where the orchestra would spend longer in each city. It would put on several evening concerts, and send smaller ensembles to schools and maraes in the daytime. This would reduce travel and staffing costs while allowing more opportunity for engagement and education with the community. The goal is for this to be a more sustainable and profitable way of combining experimentation and community projects, as well as reducing the NZSO’s carbon emissions from travelling.

Forecasting cycles We asked why the NZSO regularly forecasts a deficit, as this is not standard practice. We were told that the NZSO sees itself in a different position from most other Crown entities, as it is exposed to a lot of market risk. It forecasts conservatively because box office sales are “an uncertain science”. Events like a rugby game on the same night, or the cancellation of a high profile performer can affect ticket sales. It has had difficulty in forecasting, including a pattern of optimism bias. This problem has been fixed by updating the assumptions used in the NZSO’s forecasting software. It is also taking steps to improve its understanding of audiences, so it can better plan its programmes.

Financial reporting cycle We requested a written response about changing the NZSO’s financial year from the current calendar year model to the standard financial year model. We note that it is an outlier in still following this model. As this was also raised in the 2017 annual review, we would like to know whether there are plans for change.

Building up reserves The NZSO’s reserves have declined from $1.692 million in 2012 to $753,000 in 2018. Much of this was used in 2018’s new projects.

We asked whether the NZSO could rebuild its reserves and were told it is confident that it would be able to recapitalise. The music centre is part of a plan to diversify revenue streams and better equip the organisation to take on film scoring contracts, which are a good source of revenue. The Government’s increase in funding in the last budget has also helped with building up these reserves.

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National Centre for Music We were told that a National Centre for Music will be established as part of the ongoing earthquake strengthening and refurbishment of the Wellington Town Hall. This is a joint project between the Wellington City Council (WCC), NZSO, and the New Zealand School of Music –Te Kōkī at Victoria University of Wellington (VUW). WCC is the owner, developer, and landlord of the property, and the NZSO and VUW are the tenants. In 2018’s budget, the NZSO received $6 million for the project. A joint committee between the NZSO and the School of Music has been established to raise the further $30 million that the two organisations must contribute to the project.

This project will co-locate the NZSO with VUW. The fit-out would include a rehearsal space and performance auditorium, as well as a recording space, and would give the NZSO its first permanent home. This would allow it to take on different projects (recording, and film and television scores). At present it is hard to coordinate these projects as the NZSO does not have all the necessary resources to hand.

Construction was due to be finished by the end of 2019, but this has been pushed out to 2023. We heard that this has affected the NZSO’s planning, as it had been expecting to use the new space and opportunities it offers by 2020.

We asked whether the NZSO had concerns about the cost of the facilities, and the risk of putting money into the project before winning any contracts. We also asked whether it had considered things like rising rent costs. We were told that these risks have been budgeted for, and the current 25-year lease arrangements fit within current expenditure.

Overall response Although some of us have raised concerns about the NZSO’s financial forecasting and sustainability, we were pleased to see that it acknowledges these shortcomings, and has started work to improve on them. We also appreciate the work it does to engage with New Zealand’s diverse communities, and its commitment to delivering on its objectives under the Act.

We look forward to hearing about the NZSO’s plans for updating its financial year, and to hearing the work produced in 2020.

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Appendix

Committee procedure We met on 11 December 2019, and 19 February 2020 to consider the annual review of the New Zealand Symphony Orchestra. We heard evidence from the NZSO, and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Hon Nicky Wagner was present for some of our consideration.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz.

Office of the Auditor-General (Briefing paper, New Zealand Symphony Orchestra).

New Zealand Symphony Orchestra (Responses to written questions).

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2018/19 Annual review of the Office of Film and Literature Classification

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Classification Office ...... 2 Financial information ...... 2 Publications released on 15 March 2019...... 3 Classifying on-demand video ...... 4 Is the Office fit for purpose? ...... 5 Blocking known websites that contain objectionable material ...... 6 Support for staff who watch disturbing content ...... 6 Youth Advisory Panel ...... 6 Appendix ...... 7

Gareth Hughes Chairperson 496

2018/19 ANNUAL REVIEW OF THE OFFICE OF FILM AND LITERATURE CLASSIFICATION

Office of Film and Literature Classification

Recommendation

The Social Services and Community Committee has conducted the annual review of the Office of Film and Literature Classification for 2018/19, and recommends that the House take note of its report.

About the Classification Office The Office of Film and Literature Classification is an independent Crown entity under the Films, Videos, and Publications Classification Act 1993. Its purpose is to “inform and empower New Zealanders to experience, understand, create, and share content in a positive way, while safeguarding our tamariki and rangatahi from harm”.

The Office’s activities include:

 classifying films, videos, and publications  informing the public about the classification system  responding to complaints and inquiries about classification decisions  conducting research to inform classification decisions. The Office has 16.5 full-time equivalent staff. The Chief Censor is the chief executive and board chair. We heard from David Shanks, the Chief Censor; and Jared Mullen, the Deputy Chief Censor.

The Office classified 1,468 publications in 2018/19, 20 percent fewer than the 1,825 classified in 2017/18. One reason for the reduced number of classifications was that staff were redirected to support high levels of public interest in the classification of material related to the attacks in Christchurch on 15 March 2019. The Office held 70 public engagement activities against a target of 25 to 35.1

Financial information The year under review was the fourth consecutive year of deficit for the Office. Total revenue in 2018/19 was $2.572 million, compared with $2.609 million in 2017/18. Expenses were $2.9 million, compared with $3.5 million in 2017/18. The resulting deficit was $328,000, compared with $892,000 in 2017/18. Most of the deficit in 2017/18 ($520,000) was due to severance costs from a restructuring. Staff costs are now at their lowest since 2012.

The bulk of the Office’s revenue comes from the Crown as an appropriation under Vote Internal Affairs. It earns some revenue, as Labelling Body, from the fees charged for labelling the publications it classifies. Revenue from selling DVD labels has reduced as DVD sales decline. In 2018/19 it was $496,000, compared to $616,000 the previous year.

1 Office of Film and Literature Classification, Annual Report 2018/19, pp. 8, 16, and 32. 2

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We note that the Office’s funding for 2019/20 increased by $765,000 to $2.735 million. The increase will support work related to commercial video-on-demand. We also note that additional funding has been approved to support work countering violent extremism. For 2019/20, the Office forecasts a significantly reduced deficit of $11,000.

We also note that the Department of Internal Affairs is reviewing the Office’s fees and funding model and is due to report to Cabinet on this in April 2020.

We were pleased that the Auditor-General issued a standard audit report for 2018/19. In 2017/18, he issued a non-standard report because of concern over the Office’s financial performance, continued forecast deficits, and uncertain future revenue and expenses.

Publications released on 15 March 2019 Part of the Office’s work is to classify objectionable material such as extreme, gratuitous, or abhorrent material that expounds or proposes terrorist activities. At the time of the shootings at Christchurch mosques on 15 March 2019, a “manifesto” and video were released on the internet. Sadly, they were seen by many New Zealanders. The Office’s role was to classify that content and make clear to the public how it was to be treated.

Before 15 March, the Office had already mapped out a framework for dealing with material depicting real-life, horrific events. It had already dealt with content associated with overseas terrorist acts. We heard that, in assessing material, it is important to identify the purpose of depicting the content. The Office found that the 15 March material was created for the purpose of promoting the violence and terrorist ideals that provided the platform for those criminal acts. This was similar to the purpose of Muslim extremist publications that the Office had previously assessed.

The Office classified both the video and the manifesto as objectionable. We heard that each edited version of an illegal clip must be assessed separately from the original. Since that first classification relating to the live-streamed video, the Office has assessed many clips and edited versions of it.

The Office explained that material is not considered objectionable if it is merely distasteful, abhorrent, violent, or gory. It said that, although children should be protected from this sort of content, some content can have value for adults for the purposes of evidence, understanding real-world events, or denunciation of wrongful behaviour. We heard that it is not the Office’s role to protect and insulate adults from offensive material. The Office’s role is to assess harm. We were told that there is a high threshold for classifying material as objectionable. We were interested to hear that, after 15 March, the Chief Censor gave a TED talk about his job balancing society’s freedoms and boundaries.2

The manifesto released on 15 March 2019 was objectionable because it promoted and encouraged acts of terrorism “in a manner that is likely to be highly persuasive to its intended audience.”3 Further, the document was linked to the 15 March atrocity and formed

2 TED is a non-profit organisation that facilitates speeches about Technology, Entertainment and Design. The link to the Chief Censor’s talk is here. 3 Office of Film and Literature Classification, Annual Report 2018/19, p. 12.

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2018/19 ANNUAL REVIEW OF THE OFFICE OF FILM AND LITERATURE CLASSIFICATION a defence of it. The Office said that assessing such material involves considering the particular context of the document, including:

 how authoritative the author is  how likely people are to take notice of him  who is the intended audience  how the document is published  whether there is an association with a known extremist movement. We heard that attempts have been made to replicate and duplicate the media harm that arose on 15 March 2019. The Office has had to classify that material too. We are aware that, in the 10 years before 15 March 2019, the Office was referred about 50 publications containing terrorist extremist violence. In contrast, it was referred 50 publications in March and April 2019. They included referrals from agencies such as the New Zealand Police and the Department of Internal Affairs. One publication referred to the Office was an online game that glorified the attacks by putting the player in the position of an attacker murdering innocent people.

The Office said it seeks to adopt best practice in dealing with this complex, extreme content. Its work includes talking to experts and overseas counterparts.

Classifying on-demand video The Films, Videos, and Publications Classification (Commercial Video on-Demand) Amendment Bill is currently before a select committee. The bill would require specified providers of on-demand video services to display rating information for New Zealand viewers.

We asked about the risk of international companies deciding to stop providing content for viewing in New Zealand because of these proposed requirements. The Office considers that this risk is low. It said that providers would likely be interested in making their content available to as wide an audience as possible. We heard that, when material is not available in New Zealand, it is usually to do with intellectual property issues.

We heard that a key difference between the approach to labelling in New Zealand and overseas is our willingness and preparedness to warn viewers about suicide and self-harm content. The Office said that this is important, given our comparatively high youth suicide rate and young people’s concerns about material that portrays self-harm.

If the bill is passed, the Office expects to implement an “authorising environment” for these providers rather than having its own staff classifying video on demand. It noted that many providers already rate their content according to their own or their country’s classification system.

The Office is developing an online tool to give streaming providers a framework that they can use to self-assess their content and generate ratings, including warnings for content such as rape, sexual violence, suicide, and self-harm. We understand that the Office has so far received a $600,000 capital injection to support the development of the tool. It expects development to cost less than $1 million over two years. The Office said this amount is less 4

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2018/19 ANNUAL REVIEW OF THE OFFICE OF FILM AND LITERATURE CLASSIFICATION than 1 percent of providers’ revenue from streaming content to New Zealanders. After the tool has been developed, operational costs are expected to be $250,000 a year.

The Office believes that the tool will be compatible with systems that allow parents to block certain content.

Is the Office fit for purpose? At nearly 30 years old, the Films, Videos, and Publications Classification Act is becoming dated. The Office suggested that it may be irrelevant in 10 years’ time if it is still operating on law made in 1993. The Office considers that the legislation has good fundamentals. For example, it is appropriate that the Office is separate from the Government. However, the legislation was drafted when New Zealand was an island nation with borders that were easily controlled. That has changed.

Access to uncensored publications VPNs (virtual private networks) and IP (internet protocol) address-hiding tools can be used to circumvent geographical restrictions and censorship. We asked about the relevance of the Office given that young people access unclassified material using these techniques.

The Office challenged the suggestion that this is a growing trend. It said that its research indicates that young people will follow the clearest, easiest path to access what they want to watch. For example, if they have a Netflix subscription that allows them to watch what they want, they will use that rather than a VPN.

The Office drew our attention to its research on pornography and teenagers. In late 2018, it released a study about the experience of 14- to 17-year-olds. Nearly 1 percent of New Zealanders in that age group were surveyed. Findings showed that over two-thirds have been exposed to pornography. The Office will soon release a follow-up, qualitative study.

In the Office’s view, simply blocking content is “1960s thinking”. Its preference is to try to mitigate harm by researching, educating, and giving people information.

We asked whether the Office would support a ban on VPNs. The Office said it was an interesting proposition but might not be practical. It could not answer our question without knowing what such a ban would involve and what the implications of it would be.

Censoring social media pages The Office pointed out that, currently, it can censor pages on social media that it knows are objectionable. It reminded us that the chief executive of Facebook recently asked for guidance from governments about harmful content. We heard that Facebook employs some 30,000 content assessors or classifiers. The Office said that governments need to better understand how Facebook applies its classification policies so that they can be more effective at making sure content is appropriate.

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Blocking known websites that contain objectionable material New Zealand’s Digital Child Exploitation Filtering System blocks access to known websites that contain child sexual abuse material. It is voluntarily used by many New Zealand internet service providers.

The Office believes that it would be worth exploring the possibility of expanding the filter so that it also blocks websites containing illegal terrorist content. It commented that the eSafety Commissioner in Australia has powers to require content to be removed. It also pointed out that, in some cases, platforms hosting objectionable material may ignore a government’s request to remove the material.

Support for staff who watch disturbing content The Office is very conscious of the need to support its staff. It pays for counselling and support services, and it has a policy that encourages mutual support between members of staff. It has recently expanded access to counselling so that staff are eligible for it after they leave the Office. We were interested to hear that staff are required to attend at least one counselling session. One reason for this is to prevent situations where people believe, wrongly, that they are coping. Another is to allow staff to build relationships with counsellors so that they can access support better when needed.

Youth Advisory Panel We welcomed some young people from the Office’s Youth Advisory Panel who came to observe our annual review hearing. Panel members are aged 16 to 19. The main purpose of the panel is to involve young people in the Office’s decision-making, particularly on issues that directly affect youth. Set up in June 2018 as a pilot, the panel is now a permanent part of the Office.

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Appendix

Committee procedure We met on 19 February and 18 March 2020 to consider the annual review of the Office of Film and Literature Classification. We heard evidence from the Office of Film and Literature Classification and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Melissa Lee participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Office of Film and Literature Classification).

Office of Film and Literature Classification (Responses to written questions).

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2018/19 Annual Review of Radio New Zealand Limited

Report of the Economic Development, Science and Innovation Committee

March 2020

Contents Recommendation ...... 2 About Radio New Zealand Limited ...... 2 Financial performance ...... 2 Proposal to overhaul RNZ Concert ...... 3 Proposal for a new public media entity ...... 5 Appendix A ...... 6 Appendix B ...... 7

Jonathan Young Chairperson 503

2018/19 ANNUAL REVIEW OF RADIO NEW ZEALAND LIMITED

Radio New Zealand Limited

Recommendation The Economic Development, Science and Innovation Committee has conducted the annual review of Radio New Zealand Limited for 2018/19, and recommends that the House take note of its report.

About Radio New Zealand Limited Radio New Zealand Limited (RNZ) is an independent multimedia organisation and a Crown entity, established under the Radio New Zealand Act 1995. It operates three nationwide networks: RNZ National, RNZ Concert, and the AM network which relays parliamentary proceedings. It also operates RNZ Pacific (formerly Radio New Zealand International) as an overseas shortwave service, broadcasting to the South Pacific.

RNZ is governed by a board appointed by its shareholding Ministers: the Minister of Finance and the Minister of Broadcasting, Communications and Digital Media. The board is chaired by Dr Jim Mather, and Paul Thompson is the chief executive.

Financial performance In 2018/19, RNZ received total revenue of $45.63 million, an increase of about 10 percent on the previous year ($41.1 million). A significant proportion of RNZ’s revenue came from NZ On Air as operating funding ($39.85 million), with smaller amounts from the Ministry for Culture and Heritage ($1.9 million) and the Office of the Clerk ($1.5 million). RNZ reported a net deficit of $465,000 after tax, against a budgeted surplus of $17,000. This compares to a $352,000 deficit in 2017/18.

RNZ’s funding has increased over the past two years. RNZ received a baseline funding increase of $2.84 million in Budget 2017. This was supplemented by a $4.5 million one-off increase in Budget 2018, and a further increase of $7.25 million operating funding and $1.8 million in capital in Budget 2019. Budget 2018 also provided $6 million of funding to the RNZ/NZ On Air Joint Innovation Fund, administered by NZ On Air, to fund the development of content for broadcast by RNZ.

Results of the 2018/19 audit The Auditor-General issued a standard audit report. He assessed RNZ’s management control environment, financial information and supporting systems and controls, and performance information and supporting systems and controls as “good”, recommending some improvements. These include RNZ ensuring that its statements of performance expectations are completed before the start of the financial year to which they relate, in line with the Crown Entities Act 2004. The Auditor-General also recommended that RNZ review its performance framework and measures to ensure they are adequate.

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Proposal to overhaul RNZ Concert On 5 February 2020, RNZ announced a significant overhaul of its RNZ Concert service. Under the proposal, RNZ planned to remove Concert from FM radio and replace it with a service aimed at a younger audience. RNZ intended that Concert would continue on the AM frequency but as an automated non-stop music station, interrupted for broadcasts of Parliament sittings. The proposal was likely to result in 17 redundancies, including all RNZ Concert presenter roles, and the creation of 13 roles in Auckland for the new youth-focused station.

RNZ withdrew its proposed changes to Concert on 11 February 2020. In a subsequent media release, it said that public feedback demonstrated strong support for Concert remaining on FM, and it was working with the Government on establishing a separate FM frequency for a youth-focused service.1 We asked RNZ what prompted the original proposal.

RNZ told us that it has obligations under its charter to provide a public media service for all New Zealanders. It recognised it was not comprehensively fulfilling the requirements of its charter, and sought to identify options to strengthen the relevance of its programming to a broader range of age, ethnic, and socio-economic groups. This led to the proposal to overhaul its Concert service, the audience of which is predominantly but not exclusively older listeners. RNZ believes establishing a youth service on the FM frequency would help it to fulfil its charter obligations to a group of New Zealanders who are “very poorly served” by public broadcasting. It envisaged that the service would produce content that explores topics relevant to young people, such as civic, financial, lifestyle, and wellbeing issues, and also have significant Māori, Pasifika, and Asian content. This would complement other youth- oriented services operated by RNZ, such as its podcasts.

We expressed concern that the proposal to overhaul Concert may have caused a decline in public trust and confidence in RNZ. RNZ said that the feedback it received on the proposal was “more intense and from more quarters” than it anticipated. However, it believes it now has a stronger understanding of what the public wants from it. It does not believe that it has lost trust as a result of its proposal and is working to reassure the public in light of the feedback it received.

Availability of FM frequency The Ministry for Culture and Heritage manages allocations of transmission frequency on the FM network. We asked RNZ whether it had formally requested an additional frequency from the ministry, so that it could operate a youth service without affecting RNZ Concert. RNZ told us it had explored the option of securing a third FM allocation with the ministry in mid-2019, but was told it would be “incredibly difficult” to get access to the frequency because of the costs involved and the complexity. We understand that this was a discussion with the ministry rather than a formal request for the frequency. RNZ said that it was on the basis of this discussion that it began to look at changes to Concert.

1 https://www.rnz.co.nz/media/148

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RNZ’s timeline on the change of the FM frequency is attached to this report. At the time of finalising this report, RNZ has not released all of the information on its website regarding the timeline and communications that was discussed in written question 151.

Request from Minister to delay proposal We are aware of media reports that there had been a miscommunication during a meeting between RNZ and the Minister of Broadcasting, Communications and Digital Media. It meant that RNZ announced the changes to RNZ Concert despite the Minister requesting it be delayed while alternatives were assessed. We asked RNZ whether it stood by its public comments that there had been a miscommunication.

RNZ told us that it should have better communicated its intentions to the Minister, and did not intentionally ignore his request to delay. We understand that it met with the Minister on three occasions to discuss its proposal, most recently in January 2020. During a meeting, RNZ believed the Minister agreed to it not delaying internal staff consultations on the potential changes to Concert while the Ministry for Culture and Heritage looked into the availability of an additional frequency allocation. RNZ told us “there is absolutely no logical reason” why it would purposely ignore the Minister’s request to delay other than there had been a misunderstanding.

Market research on youth-focused service Some of us expressed concern that there may not be a public appetite for a youth-focused service, given that RNZ wound up its existing youth-focused service, The Wireless, during the year under review. We asked RNZ whether it had conducted market research to gauge public appetite ahead of its proposal, and whether there are overseas examples of similar services operated by a public broadcaster.

RNZ said that, ahead of its proposal, it looked at audience data from radio surveyor GfK. These showed that 75 percent of New Zealanders under 30 still listen to the radio each week. However, their overall engagement and time spent listening is decreasing. It also commissioned research from Colmar Brunton, who identified a group of people whom RNZ and public broadcasting do not connect with at all. RNZ said the results of the Colmar Brunton research revealed a public appetite for content that was commercial-free, provided trusted information, was associated with the RNZ brand, and delivered high-quality and high- quantity coverage of New Zealand music.

We were told there are examples overseas of public broadcasters providing successful youth-focused services, including triple J in Australia and BBC Radio 1 in the UK. However, RNZ said it did not want to simply replicate these models, because some of them are up to 20 years old. Instead, RNZ envisaged that its new service would be fit for purpose and current, providing content across a range of different platforms, and would be more than simply a music station. It believes that the capacity for its envisaged service to be across different platforms is a point of difference with its recently concluded service The Wireless. It said The Wireless was restricted by being online only, without a broadcast option, and had limited resources because it was funded internally.

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Proposal for a new public media entity In February 2020, the Minister of Broadcasting, Communications and Digital Media commissioned PwC to prepare a business case for a new public media entity, which would potentially replace RNZ and TVNZ. The proposal was one of three options suggested by the Ministerial Advisory Group on Public Media, chaired by Michael Stiassny, which ran from March 2018 to June 2019. The proposal aims to strengthen public media by improving agility across platforms and providing higher standards of public media content.2 We were interested in whether RNZ had any input into the decisions of the advisory group, and whether it had formed a view on its proposal.

RNZ told us it was not involved in the work of the public media advisory group but did meet with its members to update them on its plans. RNZ believes that the proposal to amalgamate it with TVNZ has merit but will need to be thoroughly tested through the business case process. It nonetheless acknowledged that there is a need for change in the way media entities operate, due to changes in the way media is consumed, with many commercial media outlets under significant stress. It said it is open to doing things differently and is encouraged by the Government indicating that it is open to investing more in public media.

2 https://mch.govt.nz/sites/default/files/projects/Strengthening%20Public%20Media%20August%202019%20Ca binet%20meeting.pdf

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Appendix A

Committee procedure We met on 13 February and 19 March 2020 to consider the annual review of Radio New Zealand Limited. We heard evidence from RNZ and received advice from the Office of the Auditor-General.

Committee members Jonathan Young (Chairperson) Tamati Coffey Andrew Falloon Brett Hudson Gareth Hughes Melissa Lee Clayton Mitchell Dr Deborah Russell Stuart Smith Hon Poto Williams

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Radio New Zealand Limited).

Radio New Zealand Limited (Responses to written questions).

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Appendix B

RNZ’s response to written question 151 RNZ has regular meetings, and often exchanges correspondence with Ministers and Government agencies on a range of issues. Some of these are structured meetings supported by notes, letters and/or emails. Others are more informal in nature and usually verbal only. The following are a summary of those interactions for which there is a formal document or record in the form of notes or emails.

We also note that RNZ has already publicly released all the plans and supporting documents related to its proposed new music strategy which were discussed at these meetings. These are available on the RNZ website.

Timeline is as follows:

October 2017: RNZ’s briefing to the incoming Minister identified “Improving RNZ Music” services as one of six priorities. The briefing said:

To achieve our audience targets and optimise charter performance we need to optimise the mix of (music) services and use these cost-effectively to deliver different services to different sectors of the population.

April 2018: The Government’s public media advisory group issued its recommendations which included “Help RNZ extend its multi-media services to reach more people in different ways”.

July 2018 – Cabinet paper recommendation for increased funding for RNZ titled “RNZ+ Stage 1 funding”. Māori and young people identified as priority audiences for RNZ.

Dec 13, 2018: The Broadcasting Minister, in the letter of expectation for 2018-19, sets out six public media objectives for the portfolio, including “Better catering to Māori, Pacific and other under-served audiences”. The letter of expectation also set out six specific priorities for RNZ, including:

Continuing to support the production of more and more diverse local content and boost reach to under-served audiences, in particular Māori, Pacific, regional audiences, childen and young audiences.

February 11, 2019: In RNZ’s written response to the letter of expectation, the RNZ chairman said:

We serve current audiences well but must expand and diversify our services to meet rising expectations of both the Government and the public and to fill the gaps left behind by commercial media. This requires RNZ to adapt to a disrupted media sector and to the changing needs and preferences of audiences who have more choice than ever in terms of media consumption.

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The letter said the process of adaptation included, “Diversifying RNZ’s audiences and staff composition so that they fully reflect the diversity of the communities we serve.” The letter from the RNZ chairman went on to say:

We particularly endorse your (the Minister’s) focus on underserved audiences (ie Māori, Pacific people, regional audiences and young audiences). RNZ’s future relevance and success will depend in large part on us developing unique and valued services for these groups in a manner that complements our exisiting successful services.

May 29, 2019

RNZ CE sent a letter to MCH expressing an interest in the 102FM radio band for public broadcasting use and catering for audiences which are not a priority for commercial media. (See appendix)

July 7, 2019: Meeting followed up with email. RNZ briefs Ministry for Culture and Heritage about the new Music Strategy, including the potential implications for RNZ Concert and the question of “whether we could access the 102FM frequencies for a new service for young New Zealanders that would play a large proportion (say, 40%) of NZ music”.

August 20, 2019– RNZ Chair and CE meet with Minister. Music plans discussed.

October 1, 2019: Broadcasting Minister attends RNZ board meeting and is informed at a high level about the new Music Strategy.

November 7, 2019: MCH asks for an update from RNZ on whether RNZ had progressed its thinking about a music and youth focused station and whether RNZ was still interested in exploring the use of 102 spectrum. The RNZ email response was that our planning was progressing and that the plan did not require new spectrum but if that was an option we wanted to explore it.

November 13, 2019: After a discussion with MCH about the practicalities of accessing the spectrum, RNZ decided to progress a plan that would not require it.

December 6, 2019: RNZ board approves the Music Strategy. (See appendix)

December 10, 2019: RNZ informs MCH about staff update on new music strategy.

January 28, 2020: RNZ meets with MCH to brief it about the now-confirmed music strategy. Meeting followed up with an email to confirm key points as follows:

 Over the past twelve months RNZ has carried out a full review of its music services, exploring opportunities for music to engage with younger and more diverse audiences in line with RNZ’s Charter obligations.  Arising from this review, from early February RNZ will begin implementing a new music strategy that will expand our range of services to New Zealanders by more efficiently and effectively deploying current resources.  The objective of the strategy is to diversify and grow audiences by developing an innovative new music brand aimed at young people. The new brand will showcase New Zealand artists and their music. 8

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 The new multimedia brand will be based in Auckland. It will be launched in the second half of 2020 and will be available online, on-demand, on streaming platforms and will be broadcast on FM nationwide.  As part of the strategy, the RNZ Concert service will continue and will undergo some changes in the next few months. It will be focused on playing classical music 24/7 and will continue to broadcast live and delayed performances of New Zealand orchestras. RNZ will continue recording live performances alongside other established music industry partners.  From the middle of 2020 RNZ Concert will no longer be available on FM but it will still be widely and easily available through online streaming and on-demand services.  RNZ Concert listeners will continue to access the content on Freeview channel 51 and Sky Digital channel 422, reaching 86% of homes in New Zealand. It will be available on mobile devices through the RNZ app and our streaming partners like iHeart Radio, Rova, and Spotify, and through any other internet connected device.  RNZ Concert will also be broadcast nationwide on AM radio on the Parliamentary Network when Parliament is not sitting, making it accessible to more than 3.5 million people or 83% of the New Zealand population.  Next week RNZ will begin consulting with affected staff. We also have a comprehensive communication and stakeholder engagement plan in place for this project, ensuring the media industry, officials, audiences and orchestras etc are kept informed. January 28, 2020 – Verbal update given to NZ on Air about new plans for RNZ music.

January 29, 2020: RNZ chairman, CEO and a board member meet with the Minister to discuss matters including the new music strategy and the plan to begin engaging with staff on Wednesday, February 5.

February 5, 2020: RNZ confirms to MCH, Treasury and the Broadcasting Minister’s office that at 10am that day consultation with staff would begin.

February 7, 2020 – Brief conversation between the Minister and RNZ CE, where the music plans were discussed.

February 10, 2020:email corresspondence between RNZ and MCH on transmission costings of a new network.

March 2, 2020: RNZ chairman and CEO meet with the Minister to discuss options for seeking support for RNZ’s proposed new service for young people.

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Report of the Economic Development, Science and Innovation Committee

March 2020

Contents About Television New Zealand Limited ...... 2 Audit opinion ...... 2 Financial results ...... 3 Changing media landscape ...... 3 Importance of local content ...... 4 A possible new public media entity ...... 4 Diversity within TVNZ ...... 6 Te Ao Māori ...... 6 Content accessibility ...... 6 Appendix ...... 7

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Television New Zealand Limited

Recommendation The Economic Development, Science and Innovation Committee has conducted the annual review of Television New Zealand Limited for 2018/19, and recommends that the House take note of its report.

About Television New Zealand Limited Television New Zealand (TVNZ) is a Crown entity company. While it is fully owned by the Government, it is a commercial business. Its operations are governed by the Television New Zealand Act 2003, which requires TVNZ to be a “successful national television and digital media company providing a range of content and services on a choice of delivery platforms and maintaining its commercial performance”.1 It has editorial independence and is required to provide high-quality content that:

 is relevant to, and enjoyed and valued by, New Zealand audiences  encompasses both New Zealand and international content, and reflects Māori audiences. TVNZ must provide channels that are free of charge and available to audiences throughout New Zealand. TVNZ has a goal of reaching two million New Zealand viewers each day.

During the 2018/19 year in review, TVNZ’s chair was Dame Therese Walsh. Dame Therese retired in October 2019, and Andy Coupe was appointed chair. The chief executive is Kevin Kenrick.

Audit opinion The Auditor-General rated TVNZ’s management control environment as “very good”. Financial information and supporting systems and controls were rated “good”, compared with the 2017/18 rating of “very good”. The Auditor-General said that, while no deficiencies were noted in the areas reviewed in 2018/19, previously recommended improvements to the financial management system were yet to be made. We understand these will be addressed when TVNZ’s new financial information system is implemented. That project had been delayed in the 2017/18 year because of its complexity.2

We note that TVNZ is not required to prepare a statement of performance, as it does not receive direct Crown funding.3 It receives funding indirectly from the Government, through NZ on Air.

1 Television New Zealand Act 2003, section 12. 2 TVNZ (Responses to written questions), question 13. 3 TVNZ last received direct Crown funding in 2015/16. 2

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Financial results TVNZ’s revenue in 2018/19 was $310.7 million, which was a decrease of $7.8 million from its revenue in 2017/18. Its total expenses in 2018/19 were $286.1 million, which was $2 million less than budgeted. Its net profit after tax was $2.9 million, compared with $5.1 million in 2017/18. We understand that the lower profitability was largely due to a $2.9 million unfavourable movement in unrealised foreign exchange.

TVNZ told us that its financial result for the year was “stable, despite a softening market”, so it considered the result a “relatively excellent performance”.

TVNZ is forecasting an increase in operational costs, and a net loss after tax in 2019/20. The Minister has agreed to forego dividends to the Crown for the foreseeable future. This is to enable reinvestment in the business in the coming years.

Total staff costs were $49.5 million, which is $3.4 million more than in 2017/18. Restructuring costs were $295,000, which is significantly lower than the previous four years.4

Changing media landscape We note that the international rise of online content by global streaming services such as Netflix and Amazon makes it challenging for smaller media companies to compete in domestic markets. TVNZ told us that the increased competition from such services is “significant and growing greater all the time”. It also said that international content is increasingly being delivered direct by the content owners, for example Disney+.5

In response to these challenges, TVNZ is repositioning itself from being just a television broadcaster, to being a video content provider. We heard that “TV is no longer just a thing on the wall”. TVNZ, along with Radio New Zealand Limited (RNZ) and Māori Television Service (Te Aratuku Whakaata Irirangi Māori, or Māori TV), invests heavily in its digital platforms. It considers that video content is one of the fastest growing industries globally. TVNZ said its goal is to provide more local content because that is its “sustainable point of difference” compared with global competitors. We note the 38 percent audience growth in TVNZ OnDemand. However, advertising revenue from digital platforms is less than the revenue from conventional television. We heard that TVNZ seeks to deliver what is demanded by audiences and advertisers. We discussed whether, as the media landscape has changed over recent years, there has been a decrease in experienced journalists in newsrooms. Additionally, viewers are disengaging from conventional news outlets and are getting more of their news from places like Facebook. TVNZ said that the 1News brand—and TVNZ in general—rests on the integrity and credibility of its news. We heard that it is listed as one of the most trusted brands in Colmar Brunton’s survey.

4 TVNZ (Responses to written questions), question 1. 5 Disney+ is a subscription video-on-demand service owned by The Walt Disney Company.

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Spectrum use impact We asked if any current locally or internationally proposed 5G spectrum use frequencies affect the broadcasting services of TVNZ and if so, how.

TVNZ told us that it has experienced impacts to reception of incoming satellite feeds as a result of interference from 5G. Local use of 5G has affected the broadcasting services of TVNZ by blocking incoming satellite feeds that TVNZ uses for news gathering and live entertainment and sporting events. In these situations, alternative fibre circuits have to be purchased at much greater expense and often under time pressure.

To accommodate permanent 5G installations close to its satellite earth station TVNZ has had to install filtering equipment.

Importance of local content We asked whether TVNZ thinks it provides enough local content of all genres. As mentioned earlier, TVNZ sees a benefit in more investment in local content. It agreed there is not sufficient locally-produced content. However, it acknowledged that local content is expensive to make and that generating a commercial return from it remains challenging. We were interested to hear that it is planning a 25 percent increase in the amount it spends on local content. It said that it would not be economically viable to provide 100 percent local content.

We heard that a good portion of TVNZ’s top-rating programmes are produced in New Zealand. We note the importance of local content in connecting New Zealanders with each other and sharing perspectives. For example, the long-running programme Country Calendar is important for sharing rural perspectives with city-dwellers.

TVNZ told us that its “local and live” focus has continued to reap rewards. It pointed out its strong performance in news and current affairs. We note that TVNZ has a national news presence in nine New Zealand localities outside Auckland. We asked if it is planning to increase that presence or consolidate it. TVNZ said it is not looking at reducing the presence but is considering how to cover more stories and whether or not that requires having people in different locations. We heard that TVNZ video journalists have benefited from technological advances, particularly its international correspondents.

TVNZ said its reporting team draw on a variety of experiences. Team members come from diverse backgrounds; this diversity is stronger than it has been in the past.

We wondered whether TVNZ—as a video content producer—could have a role in the Government’s recent announcement about teaching New Zealand history in schools. TVNZ agreed that it could be an opportunity for it. It added that television remains a strong broadcast medium, complemented by digital content.

A possible new public media entity Following consultation in August 2019 about options for public media in New Zealand, Cabinet agreed that three options should be further explored. They were:

 merging TVNZ and RNZ

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 consolidating the news services of TVNZ and RNZ  substantially increasing funding for NZ on Air. On 7 February 2020, the Government announced the commencement of work on a business case “to assess the viability of forming a new public media entity”.6 This could result in the disestablishment of TVNZ and RNZ. The announcement noted that New Zealand’s media sector is facing “unprecedented challenges” primarily due to international competition, declining revenue, and changes in consumer behaviour.

The business case will be prepared by PwC and is expected to be released in July 2020. Final decisions about the future of RNZ and TVNZ will be made once the business case is completed.

TVNZ’s view on the proposed business case We heard that TVNZ supports the development of the business case. It has contributed to the project and wants to ensure the business case is fully informed. It said that it would work collaboratively to implement any resulting decision.

TVNZ said it had never got to a position where it had a specific plan to merge with RNZ. However, TVNZ’s view for some time has been that consolidation in the local media was a “most likely outcome” from the significant challenges facing the sector. It pointed out that large global media organisations are consolidating in order to compete. TVNZ is open to consolidation, whether that be with commercial or Crown-owned media. It also commented that it has developed commercial partnerships with Spark and with Sky.

TVNZ said that the initial focus has been on the structure of a new public media entity. In contrast, the business case would enable greater focus on what a new entity would deliver, which is critical.

Possible changes to funding under a new public media model We note that the Cabinet paper proposing the business case envisages the new public media entity being funded by a mix of Crown funding and non-Crown revenue.

We asked TVNZ how a possible shift to greater public funding of content such as its news programming could affect its advertising revenue model. TVNZ said that it currently operates according to the mandate in the Television New Zealand Act 2003. It suggested that an increased level of public funding leads to a duty to ensure that money is spent on content that would otherwise be less likely to be produced. Public funding should not crowd-out content that would be commercially viable. It also does not want an oversupply of content that is not demanded by audiences.

Effect of business case on TVNZ staff We note that, in the future, TVNZ could face organisational change as a result of any decisions arising from the business case. This could create uncertainty for its people. TVNZ said that it had talked with most people in the organisation after the announcement by the

6 The statement by the Minister can be found on the website: https://www.beehive.govt.nz/release/work-begin-possible-new-public-media-entity

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Minister. However, it said it was important to consider the business case as an opportunity to be excited about rather than fearful of. It was also important not to get unduly distracted about what could happen at some point in the future.

TVNZ agreed with our comment that the mandates of RNZ and TVNZ are different. However, it pointed out that a new entity would have its own mandate that would set the culture.

Diversity within TVNZ TVNZ said it has good diversity in terms of gender, age, and ethnicities.

We asked how that diversity manifested in the content. We heard that TVNZ OnDemand has provided more opportunities to showcase diverse perspectives that would not ordinarily reach the commercial threshold required for conventional television. It anticipates that the OnDemand content can filter into television broadcasting over time.

Te Ao Māori We acknowledge TVNZ’s work to include more Māori perspectives in both its programmes and the TVNZ organisation. We asked whether there was a Māori strategy in place or whether developments were piecemeal. TVNZ said that its content strategy incorporates Māori content. It does not consider that a fixed, written, published strategy is the best way to make progress in incorporating Maori perspectives. We heard that its content strategy changes each month, reflecting the dynamic nature of its business. At the board level, the need to include Māori perspectives is “engrained” into how it governs.

TVNZ told us that it has appointed a long-time employee to the position of Manukura Māori. Their role is to uphold the tikanga (protocols) and reo Māori at TVNZ.

We wondered what might happen to the Māori section of TVNZ under a new public media entity. TVNZ says it views Te Karere as a taonga—the programme has celebrated its 36th anniversary of being on air. We heard that a Māori media sector review is in progress. TVNZ said it is contributing to the review but it is not a decision maker in it.

Content accessibility At our last review, we heard that all of TVNZ’s primetime content on TVNZ 1 and TVNZ 2 was available with captions, and that TVNZ OnDemand also has captioning available. We were also told at our last review that audio description was available for a limited amount of content.

We asked for an update on content accessibility. TVNZ said that more content is now captioned. It would like to caption more, including its morning television show, Breakfast. New Zealand Sign Language (NZSL) is another area that TVNZ has in view. It said more work on emergency messaging for the deaf community was needed, and it was working with the civil defence agency on this. Election year coverage will also be a focus in 2020. It said that in the 2017 election, NZSL coverage was a delayed process. It is working to improve this.

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Appendix

Committee procedure We met between 13 February and 19 March 2020 to consider the annual review of Television New Zealand Limited (TVNZ). We heard evidence from TVNZ and received advice from the Office of the Auditor-General.

Committee members Jonathan Young (Chairperson) Tamati Coffey Andrew Falloon Brett Hudson Gareth Hughes Melissa Lee Clayton Mitchell Dr Deborah Russell Stuart Smith Hon Poto Williams

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Television New Zealand).

Television New Zealand (Responses to written questions).

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Pūrongo a te Komiti Whiriwhiri Take Māori

Poutūterangi 2020

Ngā kōrero Tūtohutanga ...... 2 Mō Te Puni Kōkiri ...... 2 Whanonga pūtea ...... 2 Te whakapaipaitanga o ngā putanga arotake ...... 2 Mahere rautaki ...... 2 Whānau Ora ...... 3 Whenua Māori...... 4 Tāpiritanga ...... 5 English version...... 6

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Te Puni Kōkiri

Tūtohutanga Kua oti i te Komiti Whiriwhiri Take Māori te arotake ā-tau i Te Puni Kōkiri mō te tau 2018/19, ā, e tūtohu ana kia mataara Te Whare ki tana pūrongo.

Mō Te Puni Kōkiri I whakatūria Te Puni Kōkiri (TPK) hei akiaki i te pikinga a Ngāi Māori ki ētahi taumata tiketike ake. Tuku ai a TPK i ngā kupu whakamāherehere rautaki ki te Karauna e pā ana ki ngā take kaupapa here a te Māori, ā, whakahaere ai i ngā haumitanga, i ngā kaupapa kia eke ai ngā putanga mō ngā tāngata Māori.

Ko Michelle Hippolite te tumuaki i te tau e arotakea nei. E koa ana te ngākau ki te pōhiri mai i a Dave Tokohau Samuels, nāna nei i eke ki te tūranga tumuaki nei.

Whanonga pūtea Nā te Pōti Whanaketanga Māori te nuinga o ngā pūtea a TPK. I te tau 2018/19, e $70.923 miriona te moni puta (tōna 3 ōrau iti iho i tā 2017/18). E $69.450 miriona te whakapaunga utu.

I te tau 2018/19, ko TPK te tari whakahaere i te whakapaunga moni kāore i herea ki tētahi tari, e $302.880 miriona te nui. He pikinga tēnei o te 11.5 ōrau mai i te $271.676 miriona i te tau 2017/18. I pau te nuinga o aua moni i te tautoko i a Whānau Ora, i te Hōtaka Whenua Māori te whakahaeretia nei e TPK anō rā, i te pāpāhotanga Māori hoki.

Te whakapaipaitanga o ngā putanga arotake I whakatauria e Te Mana Arotake he “pai” ngā pūnaha me ngā whakamatuatanga a TPK, tae atu ki tana whanonga whakawhiti kōrero, me ngā pūnaha tautoko i taua whanonga, me ngā whakamatuatanga hoki. Tērā ētahi tūtohutanga āna e pā ana ki aua āhuatanga e rua. Ka whakatauria e ia he “tino pai” āna kōrero pūtea, tae atu ki ngā pūnaha tautoko me ngā whakamatuatanga, ā, kāore āna tūtohutanga kia pai ake ai.

Mahere rautaki I te Hongongoi 2019, ka whakaputaina e te Minita o te Whanaketanga Māori tētahi pepa Rūnanga e whakamārama ana i te tūranga me ngā mahi a TPK, ā, me tana mahere rautaki. Ka tautohua ko TPK hei kaitohutohu kaupapa here matua ki te Kāwanatanga mō ngā putanga mō te Māori.

I runga i te inoi a TPK, e mahi ana Te Kawa Mataaho i tētahi arotake i te poutarāwaho whakapikinga whanonga i te taha o TPK. E tāria ana ngā putanga tuatahi mō te tīmatanga o Paengawhāwhā 2020. E rikarika ana te ngākau ki te pānui atu.

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I kimi kōrero kē atu mātou mō ā TPK mahere ki te whakawhānui i tana āheinga e pā ana ki ngā kaitohutohu kaupapa here, e mātau ana ki te ao Māori. Ka kīia mai ki a mātou e tōia mai ana ngā mātanga kaupapa here ki ngā tūranga e whakapono ai rātou ka huri i a rātou te tai, ā, ko te whakapānga o te rongo o tā TPK mahere rautaki he kaitō mai i tērā momo hunga. Ka rongo hoki mātou ko tētahi atu take ko te poutarāwaho whakapikinga whanonga. Hei tā TPK, ka tika ana te pānga o te rongo, me te whakatairangatanga hoki, o te poutarāwaho, ka tōia mai ai ngā kaimahi whai pūkenga.

I rongo mātou e huri ana te aro o TPK i te whakahaere kaupapa i ōna pae katoa, ki te whakawhanake kaupapa here rautaki. I kaingākau mātou ki ngā mahere a TPK ki te whakaawe i ētahi atu tari me ngā kaupapa here. I rongo mātou, me whakauru ngā tari kāwanatanga, te hanga ngātahi nei i ngā kupu tohutohu rautaki, i tētahi poutarāwaho ao Māori kia pai ai te tautoko i ngā hapori e whāia ana. Ka kite mātou ka whānui atu pea te pā o tō TPK mana i te whakatinanatanga o tētahi poutarāwaho pērā.

Te mahi tahi a TPK me ētahi atu tari I pātai mātou mō te wāhi ki a TPK i te whakarite āheinga, te haumitanga i roto i ngā kaupapa, me te whakawhitinga o ngā ratonga motuhake, me ngā kupu tohutohu motuhake hoki. I rongo mātou, whakarite āheinga ai a TPK mō ngā whānau, ngā hapū, ngā iwi, me Ngāi Māori mā tōna mana i roto i ngā rohe, he rohe e noho ana hei aronga rautaki mō te Kāwanatanga.

I whakamārama mai a TPK he rerekē ngā tūranga o ngā tari, te whakaritea nei e ā rātou ture. I rongo mātou kāore e pai te āta whakatau i te wehenga o tēnā i tēnā, he inaki māori nō ā rātou haepapa. I rongo mātou kua oti i te rangatōpū whakahaere o TPK ētahi whakahoanga mahi ngātahi te hanga i te taha o ōna hoa tari. Mā konei e pai ai te hari tahi i ngā inakitanga hei painga mō ngā hapori Māori e tautokona ana e rātou.

I rongo mātou e kaingākau ana a TPK ki ngā kaupapa whakawhānui i te āheinga, i te reritanga hoki o ngā whānau, o ngā hapori Māori, e panoni te āhuatanga mō ngā whakatupuranga. Aroturuki ai a TPK i te pānga o ō naianei kupu tohutohu motuhake, ratonga motuhake hoki. Tuku kupu tohutohu ai a TPK mō te whaitake o te whakawhiti i ētahi tāngata ki tētahi atu tari e tika ake ana mō rātou.

Whānau Ora E $80 miriona i kapohia ki te Pōti Whanaketanga Māori 2018/19 mō Whānau Ora. I roto i taua tahua, e $4.7 miriona mō te “Whakamahi i Whānau Ora”, te hoatu pūtea nei ki a TPK mō te whakahaere i te kaupapa whakamahi i Whānau Ora. Mō te “Whakamahi i ngā Putanga o Whānau Ora” te $75 miriona e mahue ana, arā, mō te hoko putanga mai i ngā rōpū whakahaere ō-waho kāwanatanga.

I rongo mātou ka haere tōna rua-hautoru o te $80 miriona ki ngā rōpū whakamahi Whānau Ora. Hei tā TPK i kitea i te arotake o Whānau Ora kāore e tautokona paitia ētahi takiwā o Aotearoa e Whānau Ora. Nā reira i parea ai e ia e $2 miriona mō te “whakamahinga ā-rohe”. Ko te whāinga ko te whakatūturu i te āheinga ki te whakatinana i a Whānau Ora ki ngā hōngere huhua, kaua ki aua rōpū whakamahi anake. E tautohu ana a TPK i ētahi hinonga e tika ana hei whakatinana i a Whānau Ora ki aua takiwā. E tūmanako ana ia ki te pūrongo i

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2018/19 AROTAKE Ā-TAU O TE PUNI KŌKIRI ngā mahi mō te puku o Paengawhāwhā 2020. E rikarika ana mātou ki te ako mō ngā kōmihana ā-rohe.

E ai ki te tirohanga a te manatū, he tautoko tā ngā kōmihana ā-rohe i ngā mahi a ngā pokapū whakamahi i a Whānau Ora, ā, e haere tonu ana ngā kōrerorero mō te kaupapa whakamahi whānui tonu. Ko tēnei tau te wā tuatahi e whakahoutia ai ngā whakaaetanga kirimana i waenga i ngā pokapū whakamahi e tū nei, ā, e hāngai ana ētahi o ngā kōrero ki ngā mahi hei whakariterite i ngā pūrongo me ngā raraunga.

Whenua Māori Tautoko ai te Hōtaka Whenua Māori i ngā kaipupuri whenua Māori ki te whāwhā i ētahi whakamahinga huhua o te whenua, i ētahi mahi hei whakawhānui i ngā hua hoki. Ko te kaupapa a te hōtaka he whakapā atu ki ngā tari huhua, ā, ka hāngai ki ētahi atu kaupapa a te kāwanatanga mō te whenua.

I rapu māramatanga mātou mō te tūranga ake o TPK, o ētahi atu tari e pā ai ngā mahi ki ngā kaipupuri whenua Māori. I ako mātou ko te mahi matua a TPK ko te whakawhanake kaupapa here. Hei tāna, e mārama kehokeho ana ōna tari ā-rohe ki ngā hapori e tau nei rātou. Koinei hoki tētahi rawa kaupapa here nunui mō TPK me te rāngai tūmatanui.

I rongo mātou he whakahirahira te mahi a TPK i te tīmatanga o ngā mahi whakawhanake whenua Māori, inā rā ko te aromatawai i te whaitake o ngā mahi e marohitia ana, ā, ko te whakapakari i ngā hanganga me ngā mahi. Nāna hoki te haepapa mō te tohutohu i ngā kaipupuri whenua Māori e pā ana ki te tari e tika ana hei mahi tahi me rātou. He kōrerorero tēnei i waenga i a TPK, te Provincial Development Unit, me te Manatū Ahu Matua mō te āhua o te whakakirimana, te aroturuki, te whakahaere, me te whakatinana i aua momo kaupapa.

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Tāpiritanga

Hātepe komiti I hui mātou i te 12 Huitanguru me te 18 Poutūterangi 2020 hei whakaaroaro i te arotake ā- tau o Te Puni Kōkiri. I rongo taunakitanga mātou mai i Te Puni Kōkiri, ā, i whiwhi kupu tohutohu mātou mai i Te Tari o te Mana Arotake.

Mematanga komiti, ko Rino Tirikatene (Heamana) Dan Bidois Marama Davidson Joanne Hayes Matt King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

I whai wāhi a Hōnore Nathan Guy ki ētahi wāhanga o te arotake nei.

Te kupu tohutohu me te taunakitanga i whiwhi I whiwhi i a mātou ngā tuhinga e whai nei hei kupu tohutohu, hei taunakitanga hoki mō tēnei arotake ā-tau. E wātea ana ēnei i te paetukutuku o te Pāremata, i www.parliament.nz, me te tuhinga hoki o ā mātou hui.

Te Tari o te Mana Arotake (Whakamōhiotanga ki Te Puni Kōkiri).

Te Puni Kōkiri (Ngā urupare ki ngā pātai i tuhia).

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2018/19 Annual review of the Ministry of Māori Development (Te Puni Kōkiri)

Report of the Māori Affairs Committee

March 2020

Contents Māori version ...... 1 Recommendation ...... 7 About Te Puni Kōkiri ...... 7 Financial performance ...... 7 Improvement in audit results ...... 7 Strategic plan ...... 7 Whānau Ora ...... 8 Whenua Māori...... 9 Appendix ...... 10

Rino Tirikatene Chairperson

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF MĀORI DEVELOPMENT (TE PUNI KŌKIRI)

Ministry of Māori Development (Te Puni Kōkiri)

Recommendation The Māori Affairs Committee has conducted the annual review of the Ministry of Māori Development (Te Puni Kōkiri) for 2018/19, and recommends that the House take note of its report.

About Te Puni Kōkiri The Ministry of Māori Development, also known as Te Puni Kōkiri (TPK), was established to promote better levels of achievement attained by Māori. It provides strategic advice to the Crown on Māori policy issues and facilitates investments and initiatives to promote better results for Māori.

Michelle Hippolite was chief executive during the year under review. We were pleased to welcome Dave Tokohau Samuels, who has recently replaced her as chief executive.

Financial performance TPK is funded mainly through Vote Māori Development. In 2018/19, its revenue was $70.923 million (about 3 percent less than in 2017/18). Expenditure was $69.450 million.

In 2018/19, TPK was the administering department for $302.880 million of non-departmental expenditure, an increase of 11.5 percent from $271.676 million in 2017/18. This was primarily used to support Whānau Ora, the Whenua Māori Programme, the administration of the Māori Housing Network run by TPK itself, and Māori broadcasting.

Improvement in audit results The Auditor-General rated TPK’s assessment of systems and controls and its performance information and supporting systems and controls as “good”. He made some recommendations in both these areas. He rated TPK’s financial information and supporting systems and controls as “very good”, with no recommendations for improvement.

Strategic plan In July 2019, the Minister of Māori Development produced a Cabinet paper outlining the role and functions of TPK and its strategic plan. It identified TPK as the principal policy adviser to the Government on Māori outcomes.

At TPK’s request, the State Services Commission is conducting a performance improvement framework review into TPK. Early findings are expected by the beginning of April 2020. We look forward to reading them.

We sought more information on TPK’s plans to expand its capacity with respect to policy advisers with ao Māori expertise. We were told that people with policy expertise are attracted to positions in which they believe they can make a difference, and that the effective

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF MĀORI DEVELOPMENT (TE PUNI KŌKIRI) communication of TPK’s strategy is such an attraction. We also heard that the performance improvement framework is another such factor. TPK considers that the effective communication and promotion of results from that framework will attract skilled staff.

We heard that TPK is shifting its focus from managing projects through their stages to developing strategic policy. We were interested in TPK’s plans to influence other agencies and their policies. We heard that central agencies that co-create strategic advice should incorporate an ao Māori framework to better serve the target communities. We note that implementing such a framework could expand the scope of TPK’s influence.

Collaboration between TPK and other agencies We asked about TPK’s role in brokering opportunities, investing in initiatives, and transferring specialist advice and services. We heard that it brokers opportunities for whānau, hapū, iwi, and Māori through its influence in regions that are strategic priorities for the Government.

TPK clarified that agencies’ roles are distinct, as described in their respective statutes. We heard that it is unhelpful to demarcate solid boundaries between them because they naturally overlap. We were told that TPK’s executive leadership has developed collaborative working relationships with its partner agencies. This helps to navigate any areas of overlap for the benefit of the Māori communities they serve.

We heard that TPK is interested in initiatives that build the capability and readiness of whānau and Māori communities, leading to intergenerational transformation. TPK monitors the impact of existing specialist advice and services. It also provides advice on the feasibility of transferring some clients to more appropriate agencies.

Whānau Ora Vote Māori Development in 2018/19 included $80 million for funding Whānau Ora. Of this amount, $4.7 million was allocated for “Whānau Ora Commissioning”, which funds TPK for managing the Whānau Ora commissioning approach. The remaining $75 million was for “Commissioning Whānau Ora Outcomes”, that is, purchasing the outcomes from non- government commissioning agencies.

We heard that nearly two-thirds of the $80 million goes to the Whānau Ora commissioning agencies. TPK said that a Whānau Ora review found that some parts of New Zealand were not well covered by Whānau Ora. It has therefore set aside $2 million for “local commission” with the aim of ensuring that Whānau Ora can be implemented through multiple channels, not just through commissioning agencies. TPK is identifying appropriate entities to implement Whānau Ora in those regions. It hopes to report on progress by the middle of April 2020. We look forward to learning more about local commissions.

In the ministry’s view, local commissions are complementary to the work that the commissioning agencies do, and discussions with them in relation to the broader commissioning approach continue. As this year is the first opportunity to renew the contractual agreements with existing commissioning agencies, these discussions include ways to better align reporting and data.

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF MĀORI DEVELOPMENT (TE PUNI KŌKIRI)

Whenua Māori The Whenua Māori Programme supports Māori land owners to explore various uses of land and ways of boosting its productivity. The programme adopts a multi-agency approach and aligns with other government initiatives for whenua (land).

We sought clarification on the specific role of TPK and other agencies whose work affects Māori landowners. We learnt that the ministry’s primary role is policy development. It said that its regional offices have an intimate understanding of the communities they are located in. This constitutes an important policy asset for TPK and the state sector.

We heard that TPK has an important role in the early stages of Māori land development, notably in assessing the feasibility of proposed developments and strengthening management structures and practices. It is also responsible for advising Māori landowners which agencies they need to work with. This often involves a discussion between TPK, the Provincial Development Unit, and the Ministry for Primary Industries about how to contract, monitor, manage, and ensure delivery on such projects.

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Appendix

Committee procedure We met on 12 February and 18 March 2020 to consider the annual review of the Ministry of Māori Development (Te Puni Kōkiri). We heard evidence from the Ministry of Māori Development (Te Puni Kōkiri) and received advice from the Office of the Auditor-General.

Committee members Rino Tirikatene (Chairperson) Dan Bidois Marama Davidson Joanne Hayes Matt King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

Hon Nathan Guy participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry of Māori Development (Te Puni Kōkiri)).

Ministry of Māori Development (Te Puni Kōkiri) (Responses to written questions).

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2018/19 Arotake ā-tau o Te Reo Whakapuaki Irirangi, e kīia nei ko Te Māngai Pāho

Te pūrongo a te Komiti Whiriwhiri Take Māori

Poutūterangi 2020

Ngā kōrero Tūtohutanga ...... 2 Mō Te Māngai Pāho ...... 2 Ngā putanga pūtea me te arotake 2018/19 ...... 2 Ngā arotau matua ...... 3 Te Ao Pāpāho ki Tua ...... 3 Pāhotanga matihiko, tūāpapa hou ...... 4 Te ine i te pānga rautaki i te tauira inenga ZePA ...... 5 Tāpiritanga ...... 7 English version...... 8

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Te Reo Whakapuaki Irirangi, e kīia nei ko Te Māngai Pāho

Tūtohutanga Kua oti i te Komiti Whiriwhiri Take Māori te arotake ā-tau o Te Reo Whakapuaki Irirangi, e kīia nei ko Te Māngai Pāho, mō te tau 2018/19, ā, e tūtohu ana kia mataara Te Whare ki tana pūrongo.

Mō Te Māngai Pāho He hinonga Karauna a Te Māngai Pāho i whakatūria i te tau 1993 e te Broadcasting Amendment Act, ā, nō te Pōti Whanaketanga Māori tana pūtea. Ko te mahi a Te Māngai Pāho he whakarite pūtea mō te whakaputanga, te pāhotanga, te whakawhitinga, me te rokirokinga o ētahi pāhotanga hei whakatairanga i te reo Māori me ngā tikanga. E haepapa ana a Te Māngai Pāho mō ēnei:

 te hoatu pūtea ki a Whakaata Māori  te tahua tātāwhāinga o ngā pāhotanga pouaka whakaata, ngā pāhotanga reo irirangi, ngā waiata, me ngā kaupapa pāpāho matihiko  te tahua mahi mō ngā reo irirangi ā-iwi  te rokirokinga. Ko Larry Parr te tumuaki o Te Māngai Pāho, ā, ko Tākuta Eruera Tarena te heamana.

Ngā putanga pūtea me te arotake 2018/19 I te tau 2018/19 e $60.079 miriona te tapeketanga moni puta a Te Māngai Pāho. Nā te Karauna te nuinga o ngā pūtea a Te Māngai Pāho, ā, i te tau 2018/19 e $1.02 miriona o tana moni puta i ahu mai i te huamoni, ngā tohanga pūtea i whakahokia, me ngā hokonga hōtaka. I te tau 2018/19 e $58.748 miriona te tapeketanga whakapaunga moni a Te Māngai Pāho. I te mutunga o te tau pūtea, e $1.331 miriona te pūtea e toe ana, he pikinga mai i te $961,000 i te tau 2017/18.

I whakatauria e Te Mana Arotake he “tino pai” ā Te Māngai Pāho pūnaha whakamatua whakahaerenga, ngā kōrero pūtea, ōna pūnaha tautoko me ōna whakamatuatanga.

I whakatauria he “pai” ngā kōrero whanonga, ngā pūnaha tautoko me ngā whakamatuatanga, ā, i tūtohua kia whakapakaritia ētahi āhuatanga. I tūtohu te Mana Arotake kia whakaōkawatia e Te Māngai Pāho te hātepe tāmoko mō te tohu whanonga nei, arā “ka eke ki te taumata kounga o te 90 ōrau o runga i te Anga Arotake Reo Māori, ko ngā pāhotanga reo Māori nā Te Māngai Pāho te pūtea tautoko”. I tūtohu hoki te Mana Arotake kia hangā he pūnaha hei whakaatu i te hāngaitanga o ngā mea i aromatawaitia ki te 90 ōrau, nuku atu, o ngā pāhotanga i whakautua rā. Manohi anō i tūtohu ia kia whakarerekētia te tohu whanonga kia pai atu ai te whakaatu i tana pūtake.

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Ngā arotau matua Ko te whāinga whānui a Te Māngai Pāho ko te whakawhānui i te hunga kōrero Māori, te whakawhānui i te reo e kōrerohia ana, ā, kia whānui atu ai te mōhiotia o ngā tikanga Māori, ngā kawa, me ngā whakaaro i roto o Aotearoa. Tautoko ai, hāngai ai te whāinga ki Te Maihi Karauna, tā te Karauna rautaki mō te whakamāuitanga o te reo Māori 2019–2023. Ko ngā arotau matua a Te Māngai Pāho mō te tau 2018/19 ko ēnei:

 te hunga—kia kaha ake te ū a te hunga reo Māori te whāia nei  te hanga—kia hangā he pāhotanga whakahihiko, he pāhotanga hura kokonga ngākau  te wātea—kia whakatūturutia te wāteatanga o ngā pāhotanga e whakautua ana  te āheinga—tōia mai, whāngaihia atu ngā tāngata Māori whai pūmanawa. Ko tā Te Māngai Pāho i kōrero mai, nā ngā hinonga whai whakaaro i roto i ngā tau e 25 kua hori i tata rawa mai ai te pae tawhiti, arā kia kōrerohia te reo ki ngā wāhi katoa, i ngā rā katoa, i ōna āhuatanga katoa. I rongo mātou e 1,101 hāora ngā pāhotanga pouaka whakaata, e 27 ngā waiata hou, e 92,000 hāora ngā pāhotanga reo Māori i runga reo irirangi ā-iwi, ā, e 23 ngā kaupapa matihiko hou, ngā kaupapa pāpāho hou i whakautua e Te Māngai Pāho i te tau 2018/19.

Te whakatairite i ngā arotau a Te Māngai Pāho I kaingākau mātou ki ētahi kōrero mō te āhua o tā Te Māngai Pāho whakatairite i tāna arotau, arā te whakawhānui i te hunga mātakitaki reo Māori, me tana haepapa ki te tuku pāhotanga mō ngā kaimātakitaki matatau ki te reo Māori. Ka kite mātou e aro ana ētahi rōpū pāpāho auraki ki te whakamahi i te reo Māori i roto i ā rātou pāhotanga, pēnei me Te Reo Irirangi o Aotearoa. Me te aha e whakawhānui ana rātou i te hunga mātakitaki reo Māori. Nā whai anō ka pātai mātou he aha a Te Māngai Pāho i kore ai e hoatu ētahi atu pūtea mō ngā pāhotanga reo irirangi mō ngā kaiwhakarongo e matatau ana ki te reo Māori.

I rongo mātou e whakahaere wānanga ana a Te Māngai Pāho hei āwhina i ngā reo irirangi ā-iwi ki te tono mō ētahi atu pūtea. Ko tana tūmanako ia kia whānui atu ngā pāhotanga mā te hunga matatau. E kawe ana a Te Māngai Pāho i ētahi hinonga hei akiaki i te hanganga o ētahi pāhotanga reo irirangi auaha, whakahihiko hoki ki te reo Māori. I kī mai a Te Māngai Pāho he rongoā wā poto noa iho ēnei, ā, me nui atu te pūtea kia pai ai te whakawhānui i ngā pāhotanga reo irirangi ā-iwi e wātea ana ki te hunga matatau.

Te Ao Pāpāho ki Tua I te Whiringa-ā-Nuku 2018, i whakahuataki a Te Puni Kōkiri i tētahi arotake kaupapa here o te rāngai pāpāho Māori. Ko te pūtake o te arotake ko te mātoro i te huarahi pai hei tautoko i te reo Māori, i ngā pāhotanga ao Māori hoki. I tautohua e te arotake ētahi aronga matua mō te rāngai pāpāho Māori, pēnei me te kaha o ngā rōpū ki te mahi tahi, te kounga o ngā pāhotanga e hāngai ana ki ngā hiahia o te hunga mātakitaki, me te whakamāmā i te tiki atu i ngā pāhotanga.

I kī mai a Te Māngai Pāho e tāria tonutia ana kia oti i Te Puni Kōkiri ētahi whakataunga, engari e mārama ana me kaha ake te rāngai pāpāho Māori ki te mahi tahi. I kīia mai ki a mātou e haere kē ana ētahi mahinga tahi, ētahi mahinga ruruku i roto i te rāngai. Kua

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2018/19 AROTAKE Ā-TAU O TE MĀNGAI PĀHO tāmokohia tētahi kawenata whakaaetanga e ētahi rōpū reo Māori e toru atu (ko Whakaata Māori, ko Te Taura Whiri i te Reo Māori, me Te Mātāwai), ā, e ētahi manatū e rua (ko Te Puni Kōkiri me te Tāhuhu o te Mātauranga) e pā ana ki tētahi huinga raraunga pāhekoheko, me tētahi hōtaka rangahau hoki. I kī hoki a Te Māngai Pāho e whakapauria ana tana kaha kia māmā rawa ai mā ngā kaiwhakaputa pāhotanga te tahuritanga o te ao pāpāho Māori ki ngā pāhotanga matihiko hou.

I pātai mātou e pēhea ana ngā whakaaro o ngā kaiwhakaputa pāhotanga ki te rāngai pāpāho e tahuri nei. I kī mai a Te Māngai Pāho i whakapuaki ētahi kaiwhakaputa i te āmaimai i te huringa ki ngā pāhotanga matihiko hou, i roto i ngā kōrerorero tuatahi mō te ao pāpāho e huri nei i te tau 2017. Heoi anō, e māmā ana ngā ngākau o ngā kaiwhakaputa ki ngā tūāpapa pāpāho hou, ki te mahi tahi hoki, nā runga i te kaha o Te Māngai Pāho ki te whakawhitiwhiti tonu atu i ngā kōrero.

Pāhotanga matihiko, tūāpapa hou I rongo mātou he rerekē te hanga o te iwi, he rerekē ngā hangarau, me te aha e tahuri atu ana ngā pāhotanga Māori i ōna tūāpapa taketake, arā i te reo irirangi me te pouaka whakaata, ka tahuri ki ngā pāhotanga matihiko, ki ngā tūāpapa hou. I te Pūtea 2019, e $7 miriona atu i whiwhi ai a Te Māngai Pāho i roto i te Pōti Whanaketanga Māori. Ko te take he tautoko i te hinonga kaupapa here a te Kāwanatanga kia kaha ake ai te mātakina o te reo Māori i runga i ngā tūāpapa pāpāho huhua.

I pātai mātou mō ngā mahi i puta ake i aua pūtea hou. I kōrero mai a Te Māngai Pāho mō He aha tō Say?, he rārangi pāhotanga ipurangi, he rauemi hoki mō te reo ā-iwi o Ngāti Porou. I kīia mai ki a mātou i ngā wā ō mua ka pāhotia ā-reo irirangitia a He aha tō Say? Waihoki he tohu tēnei o tā Radio Ngāti Porou urutau ki te rāngai pāpāho Māori e huri nei.

Ngā wero o te huri ki ngā pāhotanga hou, ngā tūāpapa hou E whiriwhiria ana e te Komiti Whiriwhiri Take Whakahaerenga i te Films, Videos and Publications Classification (Commercial Video on-Demand) Amendment Bill. Ka whakahau te pire nei kia whakaaturia e ngā whitiata tauhoko ā-tono nei i Aotearoa he tohu kōmaka tōtika, he tohu riterite. E kaingākau ana mātou ki te wehenga o ngā haepapa a ngā tari Karauna, pēnei me te Tari Whakarōpū Tukuata, Tuhituhinga me Te Mana Whanonga Kaipāho. Inā rā, i pātai mātou me ka whakarangirua i te āhua o ngā haepapa o ngā kiritaki me ngā kaiwhakaputa o ngā pāhotanga matihiko, o ngā tūāpapa hou.

I kīia mai ki a mātou, ko te āhua nei kāore he rangirua, engari he uaua mā ētahi o ōna kaiwhakaputa pāhotanga ki te whakawhiti ki ngā tūāpapa matihiko, ki ngā tūāpapa hou. E aro ana a Te Māngai Pāho ki te whakawhānui i te āheinga o ngā kaiwhakaputa pāhotanga reo irirangi, pouaka whakaata hoki. Hei aha, hei āwhina i a rātou ki te whakaeke atu ki ngā tūāpapa pāpāho matihiko, ki ngā tūāpapa hou. Ko tētahi o ngā mahi a Te Māngai Pāho hei whakawhānui i taua āheinga ko te akiaki i ngā kaiwhakaputa pāhotanga rangatahi ki te piri atu ki te rāngai pāpāho Māori.

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Te ine i te pānga rautaki i te tauira inenga ZePA Ko te ZePA te tauira e whakamahia ana e Te Māngai Pāho hei ine i te waiaro o ngā tāngata o Aotearoa ki te reo Māori. He āwhata akoranga te ZePA, ā, e toru ōna āpure:

 kore—kāore he whakamahinga, kāore he aroha ki te reo Māori  torohū—e manawa popore ana te tangata ki te reo Māori  mātātoa—e kaha ana te tangata ki te hāpai i te reo Māori. Whakamahi ai a Te Māngai Pāho i te āwhata nei ki te ine i te eke o āna mahi ki te akiaki i ngā waiaro o te tangata ki te āpure mātātoa, e kīia nei e ia ko te “neke-whakatekatau”. I rongo mātou he poutarāwaho whakarauora reo te take matua o te ZePA, ā, ko tana pūkaha ko tana kaupapa Māori, ko tana aroha ki te akoranga reo ā tēnā, ā tēnā. I te tau 2018/19, e mahi ana a Te Māngai Pāho me ētahi atu rōpū o te rāngai ki te whakapakari i te tauira ZePA. Inaianei e taea ana e rātou te ine ngā pānga hapori whānui tonu o te whakarauoranga o te reo Māori. Nā te aha, nā te whakapaitanga o ngā tikanga tatauranga, nā te whānui atu o ngā tipakonga raraunga i inea.

Ngā putanga tatauranga 2019 Ko te tohu nui o te neke-whakatekatau o te pāpori o Aotearoa ko te pūwaenga o te āwhata inenga ZePA. I pātai mātou ki a Te Māngai Pāho he aha i heke ai te pūwaenga mā te rua ōrau i te tau 2018/19, ā, he aha tana rongoā. Hei tā Te Māngai Pāho he tohu te hekenga nei o te tauira ZePA e tika ake ana inaianei.

I rongo hoki mātou e 23 ōrau o te pāpori o Aotearoa kei te karangatanga “P3”, te wāhanga whakamutunga o te āpure torohū i kō mai o te āpure mātātoa o te āwhata ako nei. E whakaaro ana a Te Māngai Pāho he āheinga whakahirahira tēnei, ā, me whai kia neke- whakatekatau taua 23 ōrau o te pāpori ki te āpure mātātoa.

Arotau haumitanga E kaingākau ana mātou ki te āheinga o te tauira ZePA ki te āwhina i Te Māngai Pāho ki te whakatau ko ēhea ngā āpure o te āwhata hei arotau haumitanga. Te taha ki te tirohanga whānui o Te Māngai Pāho,1 i rongo mātou he whakahirahira te nekehanga o te pāpori katoa o Aotearoa ki te āpure mātātoa o te āwhata ako nei. Heoi anō, i kī a Te Māngai Pāho me noho tonu ko ngā kaikōrero o te reo i te āpure mātātoa hei arotau haumitanga, he whakahirahira nō te matatau ki te tiakitanga, ki te oranga o te reo.

Te mahi tahi, te āpititanga raraunga I pātai mātou mō te wāhi ki ngā rōpū e whiwhi pūtea ana mai i a Te Māngai Pāho, ki te āpiti raraunga mō te tauira ZePA nei. I rongo mātou ko te tauira ZePA te papa mō ngā mahi katoa e whakautua ana e Te Māngai Pāho, ā, e hāngai ana ki tētahi hunga whāiti i runga i te āwhata ako ZePA. E mahi ana a Te Māngai Pāho i te taha o aua rōpū katoa ki te hanga i ngā rawa mahere reo, ki te ine hoki i te whaitake o ngā mahi a tēnā rōpū, a tēnā rōpū hei whakarauora i te reo Māori.

1 Ko te pae tawhiti ko te reo Māori ki ngā wāhi katoa, i ngā rā katoa, i ōna āhuatanga katoa.

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Te pānga o ngā waiata mō te whakarauoranga o te reo Māori I pātai mātou he aha te wāhi ki Te Māngai Pāho mō te ine i te pānga o ngā kaupapa reo kāore nei e tautokona e āna pūtea. Ko tā mātou tauira ko te rōpū waiata reo Māori nei, te rōpū waiata mētara nei a Alien Weaponry. I rongo mātou ka hopukina ki te tauira ZePA ngā kaupapa katoa, he whakamahi nōna ki te taumata o te pāpori katoa hei ine i ngā waiaro ki te reo Māori. Heoi, kāore e taea te ine ngā tauira whāiti pēnei me Alien Weaponry. I kī a Te Māngai Pāho e mōhio ana ia kāore i mihia tikatia te wāhi ki te waiata i roto i te whakarauoranga o te reo Māori. Nā runga i Te Ao Pāpāho ki Tua, e tūmanako ana a Te Māngai Pāho ki te whakarite i te wāhi ki ngā waiata, arā mā te mahi i te taha o ētahi atu hinonga o te rāngai.

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Tāpiritanga

Hātepe komiti I hui mātou i te 4 me te 18 o Poutūterangi 2020 hei whakaaroaro i te arotake ā-tau o Te Māngai Pāho. I rongo mātou i ngā kōrero taunaki mai i Te Māngai Pāho, ā, i whiwhi kupu tohutohu mātou mai i Te Tari o te Mana Arotake.

Mematanga komiti, ko Rino Tirikatene (Heamana) Dan Bidois Marama Davidson Matt King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

Ngā kupu tohutohu me ngā kōrero taunaki i whiwhi I whiwhi mātou ki ngā tuhinga i raro nei hei kupu tohutohu, hei kōrero taunaki mō te arotake ā-tau nei. E wātea ana ki te paetukutuku Pāremata, kei www.parliament.nz, me te tuhinga hoki o ā mātou kōrero.

Te Tari o te Mana Arotake (Whakamōhiotanga ki Te Māngai Pāho).

Te Māngai Pāho (Ngā whakautu ki ngā pātai i tuhia).

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2018/19 Annual review of Te Reo Whakapuaki Irirangi (Māori Broadcasting Funding Agency), also known as Te Māngai Pāho

Report of the Māori Affairs Committee

March 2020

Contents Māori version ...... 1 Recommendation ...... 9 About Te Māngai Pāho ...... 9 Financial results and 2018/19 audit ...... 9 Key priorities ...... 10 Te Ao Pāpāho ki Tua—Māori Media Sector Shift ...... 10 Digital and new media ...... 11 Measuring strategic effect using the ZePA measurement model ...... 11 Appendix ...... 14

Rino Tirikatene Chairperson

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Te Reo Whakapuaki Irirangi (Māori Broadcasting Funding Agency), also known as Te Māngai Pāho

Recommendation The Māori Affairs Committee has conducted the annual review of Te Reo Whakapuaki Irirangi (Māori Broadcasting Funding Agency), which is also known as Te Māngai Pāho, for 2018/19, and recommends that the House take note of its report.

About Te Māngai Pāho Te Māngai Pāho is a Crown entity established in 1993 by the Broadcasting Amendment Act and is funded through Vote Māori Development. Te Māngai Pāho’s role is to promote Māori language and culture by making funds available for producing, broadcasting, transmitting, and archiving programmes. Te Māngai Pāho is responsible for:

 direct funding of Māori Television  contestable funding of television and radio programmes, music, and digital media initiatives  operational funding for iwi radio  archiving. The chief executive of Te Māngai Pāho is Larry Parr and the chairperson is Dr Eruera Tarena.

Financial results and 2018/19 audit Te Māngai Pāho’s total revenue for 2018/19 was $60.079 million. Te Māngai Pāho is funded primarily by the Crown, with $1.02 million of its 2018/19 revenue received from interest, reversed funding allocations, and programme sales. Te Māngai Pāho’s total expenditure for 2018/19 was $58.748 million. Te Māngai Pāho ended the financial year with a surplus of $1.331 million, an increase of $961,000 from 2017/18.

The Auditor-General assessed Te Māngai Pāho’s management control environment and financial information and supporting systems and controls as “very good”.

Te Māngai Pāho’s performance information and supporting systems and controls were assessed as “good”, with some improvements recommended. The Auditor-General recommended that Te Māngai Pāho formalise the sign-off process for the performance measure “Māori language content funded by Te Māngai Pāho achieves a quality standard of at least 90 percent on the Māori Language Evaluation Framework”. The Auditor-General also recommended creating a system to evidence that tested samples relate to at least 90 percent of funded programmes. Alternatively, he suggested that the performance measure should be changed to better reflect its intention.

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Key priorities Te Māngai Pāho’s overall aim is to have more people speaking more Māori, and a greater awareness of Māori values, practices, and views in Aotearoa New Zealand. The aim supports and reflects Maihi Karauna, the Crown’s 2019–2023 strategy for Māori language revitalisation. Te Māngai Pāho’s key priorities for 2018/19 were:

 audience—grow engagement with its target Māori language audience  creation—create content that is engaging and personal  accessibility—ensure the accessibility of the content it funds  capacity—attract and nurture Māori talent. Te Māngai Pāho said that 25 years of considered effort means that its vision for te reo being spoken everywhere, every day, and in every way is closer than ever. We heard that Te Māngai Pāho funded 1,101 hours of television content, 27 new music tracks, 92,000 hours of Māori language content on iwi radio, and 23 new digital and new media initiatives in the 2018/19 year.

Balancing Te Māngai Pāho’s priorities We were interested to learn more about how Te Māngai Pāho balances its priority to grow the Māori language audience with its responsibility to deliver content for fluent te reo Māori audiences. We note that some mainstream broadcasters, like Radio New Zealand, are focusing more on using te reo Māori in their content, and subsequently growing the overall Māori language audience. Given this, we asked why Te Māngai Pāho has not allocated more funding toward radio content for fluent te reo Māori audiences.

We heard that Te Māngai Pāho is helping iwi radio stations apply for additional funding by holding workshops. It hopes that this will increase the amount of content available for fluent audiences. Te Māngai Pāho is also carrying out work to encourage creative and engaging te reo Māori radio content. Te Māngai Pāho said these are short-term solutions, and that it would need more funding to increase the amount of iwi radio content available for fluent audiences.

Te Ao Pāpāho ki Tua—Māori Media Sector Shift In October 2018, Te Puni Kōkiri (the Ministry of Māori Development) began a policy review of the Māori broadcasting sector. The review was to explore how to best support te reo Māori and te ao Māori media content. The review identified several key areas of focus for the Māori broadcasting sector, including increased collaboration between entities, quality and audience-driven content, and improving accessibility to content.

Te Māngai Pāho said it is still waiting for Te Puni Kōkiri to make some decisions, but it is clear that the Māori broadcasting sector will collaborate more. We were told that a coordinated and shared effort is already taking place in the sector. Three other Māori language entities (Māori Television, Te Taura Whiri i te Reo Māori, and Te Mātāwai) and two ministries (Te Puni Kōkiri and the Ministry of Education) have signed a memorandum of understanding on a common data path, and a shared research programme. Te Māngai Pāho

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2018/19 ANNUAL REVIEW OF TE MĀNGAI PĀHO also said it is working hard to ensure that the Māori media shift toward digital and new content is as stable as possible for content producers.

We asked how content producers are feeling about the shifting media sector. Tē Māngai Pāho said that in its initial discussions in 2017 about the changing media sector, some producers were apprehensive about the transition toward digital and new media. However, efforts from Te Māngai Pāho to maintain good communication has meant producers are now feeling much more receptive to new content platforms, and collaboration.

Digital and new media We heard that changing demographics and technologies have meant Māori media is moving away from its traditional platforms of radio and television, and toward digital and new media. In Budget 2019, Te Māngai Pāho received additional funding of $7 million annually through Vote Māori Development. This was to support the Government’s policy initiative to increase engagement with te reo Māori across a range of media platforms.

We asked about the work produced as a result of the additional funding. Te Māngai Pāho brought to our attention He aha tō Say?, a web series and resource about the unique regional variation of Ngati Porou reo. We were told that He aha tō Say? would have traditionally been delivered by radio, and shows how Radio Ngati Porou is adapting to the changing Māori media sector.

Challenges in transitioning to digital and new media The Governance and Administration Committee is considering the Films, Videos, and Publications Classification (Commercial Video on-Demand) Amendment Bill. The bill would require commercial video on-demand in New Zealand to display appropriate and consistent classification labelling. We are interested in the separation of responsibilities between Crown entities, like the Office of Film and Literature Classification and the Broadcasting Standards Authority. In particular, we asked if it is causing any confusion about the responsibilities of consumers and producers of digital and new media.

We were told that there does not appear to be any confusion, although some of its content producers find it challenging to transition to digital and new media platforms. Te Māngai Pāho is focused on building the capacity of its traditional iwi radio and television producers to help them branch out into the digital and new media space. Encouraging rangatahi producers to join the Māori media sector is one of the ways Te Māngai Pāho is building that capacity.

Measuring strategic effect using the ZePA measurement model ZePA is the model used by Te Māngai Pāho to measure the attitudes of New Zealand’s population toward te reo Māori. ZePA is a learning continuum that has three zones:

 zero—in which there is no use and no receptivity towards Māori language  passive—in which an individual is accommodating of the Māori language  active—in which the individual actively strives to advance the Māori language.

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Te Māngai Pāho uses this continuum to measure its success at shifting people’s attitudes toward the active zone, which it calls “right-shift”. We heard that ZePA is primarily a framework for language revitalisation, and its strength is in being both kaupapa Māori and inclusive of everyone’s reo journey. Over the 2018/19 year, Te Māngai Pāho and other sector agencies have worked to strengthen the ZePA model. They are now able to better measure the broader social impacts of the revitalisation of Māori language. This is because of improvements to the qualitative and statistical methodology, and increased data sample sizes.

2019 survey results The key indicator of right-shift in the New Zealand population is the midpoint on the ZePA measurement scale. We asked Te Māngai Pāho why the midpoint declined two percent in the 2018/19 year, and how it will address the decline. Te Māngai Pāho said it views the decline as a reflection of the improved accuracy of the ZePA model.

We also heard that 23 percent of New Zealand’s population falls into the “P3” category, the last step within the passive zone before entering the active zone of the learning continuum. Te Māngai Pāho considers this an important opportunity, and needs to work to right-shift that 23 percent of the population into the active zone.

Investment priorities We are interested in whether the ZePA model could help Te Māngai Pāho determine which zones of the learning continuum are investment priorities. In relation to Te Māngai Pāho’s broader vision,2 we heard that it is important to right-shift the whole New Zealand population toward the active zone of the learning continuum. This would increase the value and status of te reo in broader society. However, Te Māngai Pāho said its investment priority must continue to be the active zone speakers of te reo, because fluency is key to the preservation and survival of the language.

Collaboration and data contribution We asked about the role that organisations funded by Te Māngai Pāho have in contributing data for the ZePA model. We heard that the ZePA model underpins all of the work funded by Te Māngai Pāho, and targets a specific audience on the ZePA learning continuum. Te Māngai Pāho is working with these organisations to implement language planning tools, and to measure the effectiveness of each organisation’s work to revitalise the Māori language.

The impact of waiata for Māori language revitalisation We asked if Te Māngai Pāho has a role in measuring the effect of te reo projects that it does not fund. We gave the example of the heavy metal te reo band Alien Weaponry. We heard that the ZePA model captures all contributing kaupapa because it is used at the population level to measure attitudes toward te reo Māori. However, it cannot measure specific examples like Alien Weaponry. Te Māngai Pāho said it realises the role of music in revitalising Māori language has been undervalued. Through Te Ao Pāpāho ki Tua (Māori

2 The vision is to have the Māori language everywhere, every day, and in every way. 12

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Appendix

Committee procedure We met on 4 and 18 March 2020 to consider the annual review of Te Māngai Pāho. We heard evidence from Te Māngai Pāho and received advice from the Office of the Auditor- General.

Committee members Rino Tirikatene (Chairperson) Dan Bidois Marama Davidson Jo Hayes Matt King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Te Māngai Pāho).

Te Māngai Pāho (Responses to written questions).

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Te pūrongo a te Komiti Whiriwhiri Take Māori

Poutūterangi 2020

Ngā kōrero Tūtohutanga ...... 2 Mō Te Taura Whiri i te Reo Māori ...... 2 Whanonga pūtea ...... 2 Pikinga o ngā putanga arotake ...... 2 Ngā mahere reo ...... 2 Te Maihi Karauna ...... 3 Tāpiritanga ...... 5 English version...... 6

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Te Taura Whiri i te Reo Māori

Tūtohutanga Kua oti i te Komiti Whiriwhiri Take Māori te arotake ā-tau i Te Taura Whiri i te Reo Māori mō te tau 2018/19, ā, e tūtohu ana kia mataara Te Whare ki tana pūrongo.

Mō Te Taura Whiri i te Reo Māori Ko Te Taura Whiri i te Reo Māori he rōpū mana motuhake o te Karauna, ā, nā Te Pōti Whanaketanga Māori te pūtea. Ko Te Puni Kōkiri tana rōpū aroturuki. E whai ana Te Taura Whiri kia whakarauoratia, kia whakatairangatia, kia whakawhanaketia, kia rangahaua te reo Māori.

Kua panoni te wāhi ki Te Taura Whiri i muri mai o te whakamanatanga o Te Ture mō Te Reo Māori 2016. Ko Te Taura Whiri te rōpū takitaki i te whakahaerenga me te whakatinanatanga o Te Maihi Karauna (te rautaki reo Māori a te Karauna). I roto i te tūranga nei nā, e arotahi ana Te Taura Whiri ki te tautoko i te whakamahinga me te whakatairangatanga o te reo Māori i roto i ngā tari kāwanatanga.

Ko Ahorangi Rawinia Higgins te toihau o te kōmihana, ā, ko Ngahiwi Apanui te tumuaki.

Whanonga pūtea E $6.773 miriona te tapekenga moni a Te Taura Whiri i te tau 2017/18, ā, e $6.993 miriona te tapekenga whakapaunga utu. E $220,000 te nui o te nama i pūrongotia e Te Taura Whiri, he hekenga mai i te $4.42 miriona i te tau 2017/18.

Pikinga o ngā putanga arotake I koa te ngākau i te kitenga kua pakari atu ngā pūnaha me ngā whakamatuatanga a Te Taura Whiri mai anō i te tau 2017/18. Ka hopukina ki tērā ko te tohu “tino pai” mō tana pūnaha whakamatua.

Koinei te tau tuatoru i tohua e te Mana Arotake he “pai” ngā pūnaha kōrero pūtea me ngā whakamatua, ngā kōrero whanonga me ōna pūnaha me ōna whakamatuatanga. Tērā ētahi tūtohutanga āna kia pai ake ai ngā āhuatanga, pēnei me te whakawhanake i ngā waeine pānga whanonga. Hei tauira kia whānui ake ngā kōrero mō te kounga me te whaitake o ngā ratonga me ngā hinonga i roto i ngā pūrongo a Te Taura Whiri. E rikarika ana te ngākau ki te kite i te pikinga o aua āhuatanga.

Ngā mahere reo E kaingākau ana mātou ki ngā mahere mō te hanga i tētahi hapori ako, hei whakatenatena i te akoranga tahitanga o te reo me ngā tikanga. I kīia mai ki a mātou, ahakoa kāore he mahere pērā rawa, e mārama ana ki Te Taura Whiri he wāhanga whakahirahira o te akoranga reo ko te tūhono ki te tuakiri. E mārama ana ki a mātou, he kaha te Māori ki te

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2018/19 AROTAKE Ā-TAU O TE TAURA WHIRI I TE REO MĀORI tauwhiro i tōna reo. Akiaki ai Te Taura Whiri i te tangata kia whakaarohia ai te reo hei taonga, ā, inā rā te aronga ki te whakamahinga o te reo.

I pātai mātou he aha ngā whakaaro a Te Taura Whiri ki te whakangata i te hiahia ki te ako i te reo Māori, ā, me āhua ki te ako i te reo Māori i te taha o ngā tikanga Māori. I whakamārama mai a Te Taura Whiri, he pai te mahia o ngā mahere reo, ā, ehara te mahere reo i te ture hei whai engari kē ia me hāngai ki tēnā, ki tēnā o ngā hunga e kaingākau ana.

I rongo mātou he taupā pea te mamae tuku iho ki te akoranga o te reo. Nō reira, he mea nui kia ngākaupai ngā ākonga ki te reo Māori. Mā reira e pai ai te akoranga ōna, ōkawa mai, ōpaki mai.

Ngā rauemi mō te ako i te reo I kimi kōrero mātou e pā ana ki te wāhi ki Te Taura Whiri i ngā rauemi hei tautoko i ngā mahere reo a ngā tari kāwanatanga. I ako mātou, tautoko ai Te Taura Whiri i te Reo Māori i te whakawhanaketanga o ngā mahere, ā, mā tēnā tari, mā tēnā tari ngā rauemi e tohatoha. I whakamārama mai Te Taura Whiri he huhua ngā take e eke ai aua mahere, hei tauira ko te titikaha atu o ngā taumata katoa o te tari. Ko ētahi atu take ko te hanga i ngā mahere e taea nei te whakatutuki, ko ngā rauemi i whakaritea, me te kimi mumu reo e remurere ana māna hei kōkiri te mahere kia eke ai. E mārama ana ki a mātou, ka hē pea te mahere i te wehenga o ngā kaimahi. Ko te take i pērā ai, e kore pea pikitia te tūranga a te mumu reo.

I pātai mātou mō te āheinga o ngā tūāpapa ipurangi, ngā tūāpapa matihiko ki te whakatutuki i te hiahiatia o ngā hōtaka reo Māori. I rongo mātou ahakoa he aha ka taea te whakawhānui atu, engari he taumaha te utu mō te whakahou i taua momo tūāpapa.

Te Maihi Karauna I pātai mātou mō Te Maihi Karauna, te mahere rautaki reo Māori a te Karauna ki te tau 2040, ā, he aha tā Te Taura Whiri e whakaaro ana ki te mahi i taua wā. I ako mātou e mahi ana ngā kaimahi a Te Taura Whiri i ngā tauira pūtea kia mārama ai te nui, te roa o ā rātou mahi.

Hei tā Te Taura Whiri, whai take tonu ai ia mā te whakahoahoa i ētahi atu tari kia tautoko ai tētahi i tētahi, tae atu ki Te Mātāwai. Tērā ko ngā hīkoi hei whakatairanga i te reo Māori i roto i ngā wiki o te reo Māoi i ia tau, i ia tau. I whakatuwhera Te Taura Whiri i Ngā Tohu Reo Māori ki ētahi atu hunga o roto i Te Whare o te Reo Mauriora. He kaupapa tērā a Te Taura Whiri, ā, nāna i whakahaere i mua atu.

E mārama ana ki a mātou kua whai wāhi Te Taura Whiri ki tētahi kaupapa rangahau ngātahi i te taha o ōna hoa i roto i Te Whare o te Reo Mauriora. I pēnei nā ahakoa tana tūmanako kia whānui atu ngā kōrero a te tatauranga o mua tata nei, e pā ana ki te tokomaha o ngā tāngata kōrero Māori, ki tēhea taumata, ā, ko wai te hunga e aroha ana ki te reo. E whakaaro ana Te Taura Whiri ka wātea mai ngā putanga o te rangahau ki ngā hoa rangahau hei te rua marama, te toru marama rānei.

I kī mai te kaikōmihana i mahora ngā tohunga whakarauora reo nō Aotearoa, me te kaikōmihana anō rā, i ō rātou māramatanga mō te whakarauoranga reo ki ētahi huihuinga puta i te ao. Hei tauira, e mārama ana ki a mātou nō mua tata nei i whakamanatia ai e Kanata he ture reo taketake, pēnei anō i Aotearoa nei i te tau 1987. I wātea rā te

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2018/19 AROTAKE Ā-TAU O TE TAURA WHIRI I TE REO MĀORI

Tāpiritanga

Hātepe komiti I hui mātou i te 19 Huitanguru me te 18 Poutūterangi 2020 hei whiriwhiri i te arotake ā-tau o Te Taura Whiri i te Reo Māori. I rongo mātou i ngā kōrero taunaki a Te Taura Whiri i te Reo Māori, ā, i whiwhi mātou ki te kupu tohutohu a Te Tari o te Mana Arotake.

Mematanga komiti, ko Rino Tirikatene (Heamana) Dan Bidois Marama Davidson Joanne Hayes Mike King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

I whai wāhi a Alastair Scott rātou ko Hōnore Tākuta Nick Smith, ko Chlöe Swarbrick ki ētahi wāhanga o te whakawānga nei nā.

Ngā kupu tohutohu me ngā kōrero taunaki i whiwhi I whiwhi mātou ki ngā tuhinga i raro iho nei hei kupu tohutohu, hei kōrero taunaki hoki mō te arotake ā-tau nei. Kei te paetukutuku o te Pāremata, kei www.parliament.nz, me te tuhinga hoki o ā mātou kōrero.

Te Tari o te Mana Arotake (Whakamōhiotanga ki Te Taura Whiri i te Reo Māori).

Te Taura Whiri i te Reo Māori (Ngā whakautu ki ngā pātai i tuhia).

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2018/19 Annual review of Te Taura Whiri i te Reo Māori (Māori Language Commission)

Report of the Māori Affairs Committee

March 2020

Contents Māori version ...... 1 Recommendation ...... 7 About the commission ...... 7 Financial performance ...... 7 Improvement in audit results ...... 7 Language planning ...... 7 Te Maihi Karauna ...... 8 Appendix ...... 9

Rino Tirikatene Chairperson 548 2018/19 ANNUAL REVIEW OF TE TAURA WHIRI I TE REO MĀORI (MĀORI LANGUAGE COMMISSION)

Te Taura Whiri i te Reo Māori

Recommendation The Māori Affairs Committee has conducted the annual review of Te Taura Whiri i te Reo Māori for 2018/19, and recommends that the House take note of its report.

About the commission Te Taura Whiri i te Reo Māori (the Māori Language Commission) is an autonomous Crown entity funded through Vote Māori Development. Te Puni Kōkiri is its monitoring agency. The commission aims to revitalise, promote, develop, and research the Māori language.

The role of the commission changed after the introduction of Te Ture mō Te Reo Māori 2016 (the Māori Language Act 2016). The commission is now the lead agency for coordinating and implementing Te Maihi Karauna (the Crown’s Māori Language Strategy). In this role, the commission focuses on supporting the use and promotion of te reo Māori in government agencies.

Professor Rawinia Higgins is the chairperson of the commission’s board and Ngahiwi Apanui is the chief executive.

Financial performance Te Taura Whiri i te Reo Māori’s total revenue in 2018/19 was $6.773 million, and total expenditure was $6.993 million. The commission reported a deficit of $220,000, a significant decrease from $4.42 million in 2017/18.

Improvement in audit results We were pleased to note that the commission’s systems and controls have improved since 2017/18. This included a rating of “very good” for its management control environment.

This is the third year that the Auditor-General assessed the commission’s financial information systems and controls, and performance information and associated systems and controls as “good”. He made some suggestions for improvement, such as developing impact performance measures, and including more about the quality and effectiveness of services and interventions in the commission’s reports. We look forward to seeing improvements in these areas.

Language planning We are interested in plans for developing a learning community to encourage the joint acquisition of language and culture. We were told that while there are no specific plans, the commission accepts that connecting with identity is a fundamental part of language acquisition. We understand that Māori can be very protective of te reo Māori. Te Taura Whiri i te Reo Māori encourages people to think of the language as a taonga (treasure), with a particular focus on the use of the language.

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We asked how the commission plans to meet the demand for Māori language acquisition, and reconcile the teaching of te reo Māori alongside tikanga Māori. The commission explained that working on language plans has been helpful, and that language planning is not a formula but instead must be relevant to each interested party.

We heard that inherited trauma related to language acquisition can be a barrier. Therefore, it is crucial that learners feel positive about te reo Māori to allow acquisition, be it formal or informal.

Resources for language acquisition We sought information about the commission’s involvement in the resources that each government agency puts behind their language plans. We learnt that Te Taura Whiri i te Reo Māori provides support to develop the plans, and that each organisation allocates resources. The commission explained that the success of these plans depends on several factors, including the level of commitment to them at all levels of the organisation. Other factors are developing realistic plans, the resources allocated to them, and identifying passionate language champions who will drive the implementation of the plans. We understand that staff turnover can compromise the success of the plan. This is because the role of champion may not be taken up.

We asked about the ability of online and digital platforms to meet the increased demand for reo Māori programmes. We heard that there could always be more, but keeping such platforms updated is resource intensive.

Te Maihi Karauna We asked about Te Maihi Karauna, the Crown’s Māori language strategic plan to 2040, and what the commission expects to implement in that time. We learnt that the commission’s staff is working on financial models to clarify the scope and scale of their work.

The commission told us that it remains effective by building relationships with other agencies to support each other, including Te Mātāwai. This includes the hīkoi (marches) to promote te reo Māori during the annual Māori language week. The commission also opened up Ngā Tohu Reo Māori (the Māori Language Awards) to the other parties in Te Whare o te Reo Mauriora, a Māori Language Commission initiative that it had previously managed on its own.

We understand that the commission has participated in a shared research initiative involving its partners in Te Whare o te Reo Mauriora. This was despite it hoping for more information from the recent census concerning the number of people who speak te reo Māori and to what level, and who values the language. The commission expects initial results from the research to be available to the partners in two to three months.

The commissioner told us that language revitalisation experts from Aotearoa, including herself, have shared their insights on language revitalisation at international conferences. For example, we understand that Canada has recently passed indigenous language legislation, as was done in Aotearoa in 1987. The commissioner was able to offer advice to language revitalisation experts from Canada, and other countries, about the issues to focus on to make quick progress.

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Appendix

Committee procedure We met on 19 February and 18 March 2020 to consider the annual review of Te Taura Whiri i te Reo Māori (Māori Language Commission). We heard evidence from Te Taura Whiri i te Reo Māori (Māori Language Commission) and received advice from the Office of the Auditor-General.

Committee members Rino Tirikatene (Chairperson) Dan Bidois Marama Davidson Joanne Hayes Matt King Adrian Rurawhe Hon Nicky Wagner Hon Meka Whaitiri

Alastair Scott, Hon Dr Nick Smith, and Chlöe Swarbrick participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Te Taura Whiri i te Reo Māori (Māori Language Commission)).

Te Taura Whiri i te Reo Māori (Māori Language Commission) (Responses to written questions).

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2018/19 Annual review of Animal Control Products Limited (trading as Orillion) 2018/19 Annual review of Crown Irrigation Investments Limited

Report of the Primary Production Committee

March 2020

The Primary Production Committee has conducted the annual reviews of Animal Control Products Limited and Crown Irrigation Investments Limited for 2018/19.

We have no matters to bring to the attention of the House. We recommend that the House take note of this report.

Hon David Bennett Chairperson 552

2018/19 Annual review of AsureQuality Limited

Report of the Primary Production Committee

March 2020

Contents Recommendation ...... 2 About AsureQuality Limited ...... 2 Audit results ...... 2 Financial performance ...... 2 Biosecurity responses ...... 4 Response to COVID-19 ...... 4 Contract for bovine tuberculosis testing ...... 5 Future plans for joint ventures ...... 5 Appendix ...... 6

Hon David Bennett Chairperson 553

2018/19 ANNUAL REVIEW OF ASUREQUALITY LIMITED

AsureQuality Limited

Recommendation The Primary Production Committee has conducted the annual review of AsureQuality Limited for 2018/19, and recommends that the House take note of its report.

About AsureQuality Limited AsureQuality Limited was established as a state-owned enterprise on 1 October 2007, from an amalgamation of Asure New Zealand Ltd and AgriQuality Ltd. It is a limited liability company with its shares held by two Ministers on behalf of the Crown: the Minister for State Owned Enterprises and the Minister of Finance.

AsureQuality provides a wide range of services to the food and primary industries in New Zealand and internationally. It groups its business activities under three broad areas: food testing services, inspection and certification, and specialist services, which include biosecurity services.

AsureQuality has a joint venture in Australia with Bureau Veritas, owning 49 percent of Bureau Veritas AsureQuality Holdings Limited. AsureQuality has also formed a joint venture with Bureau Veritas Singapore for food testing in Southeast Asia.

Dr Alison Watters is the chair of the board, taking over from Janine Smith in November 2019. John McKay is the chief executive.

Audit results The Auditor-General assessed AsureQuality’s management control environment as “good”, with some improvements recommended. He assessed AsureQuality’s financial information systems and controls as “very good”, an improvement from the previous year’s rating of “good”. We were pleased to note that over the past year AsureQuality has addressed deficiencies identified in previous reviews.

Financial performance Increase in revenue AsureQuality’s total revenue for 2018/19 was $254 million, compared with $212 million in the previous year. It reported a net profit after tax of $25.9 million, a threefold increase from the previous year ($8.5 million).

In 2018/19, AsureQuality’s revenue increased by about 20 percent (slightly over $40 million). It attributed this to three areas. Its biosecurity responses to Mycoplasma bovis (about 25 million) and fruit-fly incursions (about $5 million) accounted for $30 million of the increase. AsureQuality said that its M bovis work has quite low margins—about 19 percent compared to an average gross margin of 37 percent for its other business.

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Strong demand for food and specialty testing services, driven by more exports of infant formula, accounted for about $10 million of the increase. Revenue for inspection and certification services also increased by about $5 million. This was partly due to AsureQuality being awarded the nationwide contract for tuberculosis testing.

Balancing AsureQuality’s role as a state-owned enterprise About 37 percent ($8 million) of AsureQuality’s increased profit before tax came from its testing business. We note that AsureQuality is a government business making a large profit from work that imposes a compliance cost on businesses, and that more compliance is likely to be required in the future. Some of us believe that AsureQuality needs to find a balance between operating a profitable business and controlling costs for the farming and food manufacturing communities. This would ensure that they maintained high levels of quality assurance and did not move to internal testing because AsureQuality’s prices were too high.

AsureQuality explained that the state-owned enterprises manual is very clear that businesses are expected to operate as if they were publicly listed organisations. It agreed that it needs to strike a balance to remain successful. In the past year, AsureQuality has worked to ensure that its business is operating in a way that is sustainable. Previously, it did not believe that it was doing so. AsureQuality highlighted that its earnings before tax are lower than its global competitors. Its competitors achieve about 15 percent, compared with about 12 percent for AsureQuality.

Given AsureQuality’s strong international business, we are interested in whether it plans to cross-subsidise New Zealand to encourage uptake of quality assurance. We also asked whether it believes that the organisation should have two businesses—an international-type business and a public-good business in New Zealand.

We heard that AsureQuality has different models for its New Zealand and international businesses. In New Zealand, AsureQuality owns and operates 100 percent of its business. In international markets, it has partnered with Bureau Veritas, which is well established internationally. AsureQuality said that this minimises a lot of risks needed to enter those markets.

Exiting low-performing parts of the business AsureQuality told us that it is looking to exit the low-performing parts of its business. We asked whether this means that it could exit parts that are essential for New Zealand but are not necessarily profitable. AsureQuality said it considers this as part of its decision-making process. It is trying to ensure that it focuses on its core services in the food and primary sectors where it can add value to New Zealand.

AsureQuality told us that other players in the market were able to service the parts of the business it has exited. It believes that those providers can do a better job than AsureQuality, leaving it to focus on the core part of its business.

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Biosecurity responses Fruit flies AsureQuality told us that it dealt with three responses to incursions of fruit flies during the year under review. Ordinarily, it would see one about every 18 months. AsureQuality explained that the Ministry for Primary Industries manages the responses and AsureQuality coordinates the operational fieldwork.

AsureQuality described a critical part of its role as ensuring it meets necessary key performance indicators (KPIs), such as required tasks on each day of the response. We were pleased to hear that AsureQuality met every operational KPI across the three responses. It attributed this to the depth, breadth, and skill sets of its staff.

Mycoplasma bovis We are interested in the extent of AsureQuality’s role in the response to M bovis. For example, we asked whether it merely undertakes herd testing or whether it manages relationships with farmers on the ground.

AsureQuality told us that it works in several main areas. At the initial stage, AsureQuality staff, known as incident control point managers, visit farms to explain to farmers that they are on a notice of direction. To get the response started, AsureQuality said it took its staff from their usual roles, which have been backfilled over time. AsureQuality also completes blood testing of animals on farms and coordinates the depopulation of farms if required. We heard that AsureQuality also subcontracts cleaning and disinfecting of farms to people with those specific skills.

We note that AsureQuality staff may have to deal with stressful situations, such as when farms are being depopulated. Given this, we asked how it ensures that the mental health needs of its staff are met. AsureQuality said it has training and support for mental health resilience and the stresses that these roles involve, particularly for the farmer-facing roles.

Some of us have heard about strict secrecy requirements for people working on the response to M bovis. This involves being unable to share information about what people are seeing, the response, and any statistical analysis. We asked whether this is a requirement from the Ministry for Primary Industries. We heard that AsureQuality, and anyone working for it, can only disclose this information back to the ministry, which then controls the information. AsureQuality considers that this is appropriate for these types of responses. This is because it prevents the farming community being confused by a lot of different pieces of communication.

Response to COVID-19 AsureQuality told us that it is monitoring the COVID-19 situation closely. However, it said that COVID-19 is more in the area of human health, whereas its work focuses on quality assurance for food safety. This also extends to animal welfare and what is happening on farms.

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AsureQuality said that it is taking a similar approach to most businesses around New Zealand. This involves considering its business continuity plans and how to ensure that the organisation can keep operating as COVID-19 evolves.

We asked how AsureQuality is preparing for the economic effects of COVID-19 and whether it has any staff who have to travel internationally. AsureQuality explained that its joint venture partner, Bureau Veritas, has significant international operations, including a large one in China. As a result, AsureQuality has been able to learn from what Bureau Veritas has been doing in its inspection, certification, and testing businesses.

AsureQuality is following the Ministry of Health guidelines for international travel. The chief executive already authorises international travel as part of standard business policy, and any other travel is governed very closely. AsureQuality also has its business continuity planning team operating and meeting twice a week.

The chief financial officer told us that AsureQuality had not seen any economic effects to date. Although exports of logs have slowed, log inspection is quite a small part of its business. Also, AsureQuality has not yet seen a decrease in live animal exports or dairy. However, it was conscious that “something’s going to hit at some point”. AsureQuality said it will need to be agile enough to react when demand decreases.

Contract for bovine tuberculosis testing In 2018/19, AsureQuality successfully gained the nationwide contract for tuberculosis (TB) testing through an open tender. We heard that TB testing is a competitive environment and AsureQuality needs to keep costs down to secure contracts. AsureQuality noted that a lot of the improvements in its profit derive from focusing on areas where it performs well and finding ways to work more efficiently. It said it is considering how its teams can be more proactive when AsureQuality is completing TB testing and audits around the country.

Future plans for joint ventures We heard that AsureQuality’s joint venture with Bureau Veritas in Australia (BVAQ AU) is now the top food-testing business in Australia. Its other joint venture with Bureau Veritas (BVAQ SEA) is now the leading food-testing network in Southeast Asia. AsureQuality described these regions as key export markets, and its two priorities at this time.

AsureQuality said it is very pleased with how the business is progressing in Australia. Although the business is mature, it still has a lot of opportunity for growth. AsureQuality explained that the business in Southeast Asia is still in the early stages. Its focus is on ensuring that it delivers its business case and brings business in.

AsureQuality has managers for BVAQ AU and BVAQ SEA. The businesses are governed through joint boards, with each board having two AsureQuality representatives and two BV representatives. An AsureQuality director and a member of its executive team act as directors in Australia and Southeast Asia. They run board meetings every two months and share verbal and written information with the AsureQuality board.

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Appendix

Committee procedure We met on 4 and 19 March 2020 to consider the annual review of AsureQuality Limited. We heard evidence from AsureQuality Limited and received advice from the Office of the Auditor-General.

Committee members Hon David Bennett (Chairperson) Hon Kiritapu Allan Kieran McAnulty Todd Muller Mark Patterson Rino Tirikatene

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on AsureQuality Limited).

AsureQuality Limited (Responses to written questions).

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558

2018/19 Annual review of Land Information New Zealand

Report of the Primary Production Committee

March 2020

Contents Recommendation ...... 2 About Land Information New Zealand ...... 2 Summary of financial and audit results ...... 2 Overseas investment ...... 3 Christchurch red zone ...... 4 Crown pastoral land ...... 4 Rebuilding Landonline ...... 5 New Zealand Geospatial Strategy ...... 5 Appendix ...... 6

Hon David Bennett Chairperson 559

2018/19 ANNUAL REVIEW OF LAND INFORMATION NEW ZEALAND

Land Information New Zealand

Recommendation The Primary Production Committee has conducted the annual review of Land Information New Zealand for 2018/19, and recommends that the House take note of its report.

About Land Information New Zealand The core purpose of Land Information New Zealand (LINZ) is to ensure that New Zealanders have accurate information about property and property rights, and that Crown property is well managed for future generations. Achieving this purpose involves a range of work, including:

 managing property transactions and land titles  administering the overseas investment regime and the Overseas Investment Office  managing and maximising external use of location information, including running the New Zealand Geospatial Office  managing Crown land, rivers, lake beds, high country pastoral leases, and forestry licenses for land held for Treaty settlements.

Organisational changes We note that LINZ has taken on 79 staff since the last financial year, an increase of 12.7 percent. We heard that the extra staff were needed for its expanded functions brought about by legislative amendments to the Overseas Investment Act in 2018, and to work on the STEP project to replace Landonline.

Summary of financial and audit results Total revenue for LINZ in 2018/19 was $152.5 million, compared with $146.5 million in the previous year. Total expenditure in 2018/19 was $154.2 million, resulting in a $1.7 million deficit. This result almost met LINZ’s expectation of breaking even in 2018/19. It was a significant improvement from the $15.1 million deficit recorded for the previous financial year, when total expenditure was $161.6 million.

Audit results The Auditor-General graded LINZ’s financial information systems and controls and its management control environment as “good”, with some recommendations for continued improvement. These grades remain unchanged from the previous year. Recommendations include improving the way LINZ collects and uses information about Crown property assets.

The performance information systems and controls remain graded as “needs improvement”, with the comment that major improvements are needed at the earliest reasonable opportunity. During the previous annual review, the Auditor-General noted that although

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LINZ has developed a new outcomes framework, it has not adequately developed and updated its performance measures against which to report on the success of those outcomes. We are disappointed that it still has not done so. We consider appropriate performance information essential for ensuring that public entities are accountable to Parliament and the public. We expect the implementation of the Auditor-General’s recommendations to become a priority for LINZ.

Overseas investment We heard that there has been a significant increase in pace in the Overseas Investment Office (OIO) as LINZ implements changes from the Overseas Investment Amendment Act 2018, which came into effect on 22 August 2018. That Act made a number of changes to do with overseas acquisition of residential property, forestry rights, and rights to take natural resources. There has also been an increased focus on enforcement.

Use of increased expenditure We noted that LINZ’s costs associated with overseas investment have exceeded revenue from applicants and asked the reason for the increase in expenditure. We heard there were two main reasons for the increased expenditure: to cover the cost of setting up the expanded functions from the 2018 Amendment Act, and to improve the capability and capacity of the enforcement team. The number of staff in the Overseas Investment Office has increased by three to 30.

Application rates and approvals of applications We questioned LINZ about the new tests for overseas investors, as it appears that more than 90 percent of applications are approved, which seems a very high approval rate.

“One Home to Live In” applications We were told that the “One Home to Live In” applications were introduced on 22 October 2018. LINZ informed us that the criteria for getting this consent are very clear. They include having a relevant visa, being in New Zealand for a certain period of time, and intending to live in the home for the duration of their time in New Zealand. Most applications are likely to be approved, as those who are not eligible tend to not progress to the application stage. In addition, LINZ has a practice of sending proposal-to-decline letters to applicants who are unlikely to be granted the consent. This results in a number of applicants withdrawing their applications before a consent is formally declined.

We asked how LINZ oversees this process and checks compliance. LINZ assured us that its monitoring and intelligence team, established during the last financial year with six staff, is adept at monitoring and enforcing compliance. For example, LINZ has information-sharing arrangements with Immigration New Zealand, among other agencies, to keep track of when overseas investors leave the country.

Special forestry applications We also asked LINZ about the 100 percent approval rate of the special forestry applications. LINZ informed us that the criteria for the new special forestry test is whether the applicant meets the investor test, and whether they are implementing and maintaining existing

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2018/19 ANNUAL REVIEW OF LAND INFORMATION NEW ZEALAND conditions. We expressed concern that there is a lack of follow up with these decisions, such as measuring whether jobs were actually created as a result of an application.

LINZ noted that the legislation provides for a review of the forestry part of the overseas investment regime.1 We hope that as part of this review we will see some development in the output measures used by LINZ, not only in regard to forestry but across its whole outcomes framework.

Delegation of decisions We asked about the delegation policies between LINZ and its Ministers. LINZ assured us that the majority of sensitive land applications go to the Ministers as they are more complex. On the other hand, the most recent delegation letter delegates the “One Home to Live In” applications to LINZ directly, as the test for that is very clear.2 LINZ also added that it is careful to follow the legislation and its delegations in all decisions it makes.

Timeliness of OIO applications We asked what LINZ is doing to improve the timeliness of processing applications. LINZ acknowledged that it needs to improve, but noted that some applications are more complex than others, such as sensitive land applications. It has implemented a quality assurance process to ensure that applications have all the relevant information before they are accepted. Other measures include changing the way it allocates work within the office, and being more particular about tracking an application through the office.

Christchurch red zone We asked LINZ to update us about its handling of the Christchurch red zone land and completion of the Christchurch Global Settlement Agreement (GSA). The GSA is an agreement released in late 2019 regarding negotiations between the Crown and Christchurch City Council on the ownership and management arrangements for land and assets following the Christchurch earthquakes. Currently LINZ maintains many of the assets on behalf of the Crown.

LINZ informed us it has set up multiple working groups between the Crown, Christchurch City Council, and itself to work out what needs to be done by the June 2021 deadline (when the Greater Christchurch Regeneration Act 2016 will expire). LINZ said its largest piece of work between now and the deadline concerns the Ōtākaro Avon River corridor, and the reconfiguration of about 5,500 titles. It is confident it will meet the deadline as it has developed a reduced survey standard for this work. LINZ assured us that the reduced survey standard will not affect the quality of the titles and will simply help speed up the survey and reconfiguration work.

Crown pastoral land The Government announced in February 2019 that it would be ending tenure review. Tenure review is a voluntary process that gives pastoral leaseholders an opportunity to buy some of

1 Part 1(10) of Schedule 1AA of the Overseas Investment Act 2005. 2 The Designation and Delegation Letter, dated 17 October 2018, is publicly available on the LINZ website. 4

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2018/19 ANNUAL REVIEW OF LAND INFORMATION NEW ZEALAND their leasehold land. The remainder of the land then returns to Crown ownership, usually for conservation purposes. LINZ told us that it has been consulting with the public on proposals to improve the regulatory system, and is working with stakeholders to better understand the effect of the proposals.

LINZ told us it had been very focused over the last year on improving engagement with high country farmers. It has reorganised its Crown property team to better engage with farmers and ensure it is collecting the right information to better understand the high country properties it is responsible for. It said it is making good progress, but still aspires to do more. One thing it has done is set up an advisory group to assist with increasing engagement and to advise the Commissioner of Crown Lands (an independent statutory officer responsible for Crown land). We look forward to seeing the relationship between LINZ and high country farmers improve and for LINZ to take on board the concerns of those farmers.

Wilding pines We expressed concern about the spread of wilding pines in the high country. LINZ informed us that it is working closely with the Ministry for Primary Industries, which is the lead agency on this issue. LINZ has also been focusing on the information aspect: keeping track of the location of the wilding pines and learning the seed movements, as well as studying the results of the work being done to control wilding pines.

Rebuilding Landonline At the last annual review, we heard that LINZ had decided to build its own replacement system for Landonline (New Zealand’s property transaction system), instead of procuring an international solution. The rebuild project is called STEP (Survey and Title Enhancement Programme) which was approved by Cabinet in October 2018. To ensure a smooth process, the programme has been organised into four tranches over a five year period. Tranche one is currently on track for a June 2020 completion.

We heard that the majority of LINZ’s 79 new staff have been taken on for the STEP project. It aims to have as many employees as possible on the project, rather than using contractors. LINZ advised us that this approach would ensure it retains the capability to maintain and continue improving the system. We look forward to hearing how STEP is progressing at the next annual review.

New Zealand Geospatial Strategy The New Zealand Geospatial Strategy was released in 2007 and set out the vision, guiding principles, and strategic goals that would provide the future direction for geospatial information. We asked about the progress of the strategy and were told that the strategy was a key document at the beginning of New Zealand’s geospatial journey 13 years ago. However, the government, private sector, and international contexts have changed considerably since then, with significant advances in technology and changing needs and expectations of data users and holders. LINZ told us that the first outcome in its strategic intentions for 2019 to 2023 focuses on high-value geographic and property information. It said the outcome embodies the key principles of the New Zealand Geospatial Strategy for open, accessible, and interoperable geospatial data.

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Appendix

Committee procedure We met on 12 December 2019 and 19 March 2020 to consider the annual review of Land Information New Zealand. We heard evidence from Land Information New Zealand and received advice from the Office of the Auditor-General.

Committee members Hon David Bennett (Chairperson) Hon Amy Adams Kiritapu Allan Kieran McAnulty Todd Muller Mark Patterson Rino Tirikatene Hamish Walker

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Land Information New Zealand).

Land Information New Zealand (Responses to written questions).

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2018/19 Annual review of Landcorp Farming Limited

Report of the Primary Production Committee

March 2020

Contents Recommendation ...... 2 About Landcorp Farming Limited ...... 2 Audit results ...... 2 Financial performance ...... 3 Diversifying land use ...... 4 Comparative analysis of Landcorp’s farms ...... 4 Organic farms ...... 4 Perception of Landcorp among farmers ...... 5 Future of the sheep milk industry ...... 6 Effect of coronavirus on Landcorp ...... 6 Effect of certain factors on log prices ...... 7 Enabling the use of genetic technologies ...... 7 Appendix ...... 8

Hon David Bennett Chairperson 565

2018/19 ANNUAL REVIEW OF LANDCORP FARMING LIMITED

Landcorp Farming Limited

Recommendation The Primary Production Committee has conducted the annual review of Landcorp Farming Limited for 2018/19, and recommends that the House take note of its report.

About Landcorp Farming Limited Landcorp Farming Limited, trading as Pāmu, is a state-owned enterprise that was established in 1987. As at 30 June 2019, it owned 84 farms and had 117 farms managed throughout New Zealand.

Landcorp’s vision is to be a world leader in farming natural resources sustainably to produce premium, high-margin food and fibre products. Its strategy focuses on three areas:

 Excellence in food and fibre production: This is traditional pastoral farming, which comprises about 80 percent of its business.  Connecting to customers to create premium value: This involves seeking to supply products that will attract premiums, such as speciality milks and branded products.  Transforming land to new sustainable uses: This accounts for about 8 percent of its business. The chief executive is Steven Carden. Dr Warren Parker was appointed as chair on 1 January 2019.

Landcorp aspires to expand its role to drive innovation and have greater influence across the industry. It works alongside the Crown research institutes to scale up their ideas from the laboratory and small farm laboratory trials. Landcorp tests and proves their concepts in a commercial, real-life situation and shares its findings with farmers. It is also keen to learn from farmers and bring investors together, enabling Landcorp to contribute more widely and generate substantial benefit for New Zealand.

We congratulated Landcorp on its work, acknowledging that its objective will probably achieve the “best public good” that New Zealand can from the assets.

Audit results The Auditor-General assessed Landcorp’s management control environment as “very good”, with no recommended improvements. He assessed Landcorp’s financial information and supporting systems and controls as “good”, with some improvements recommended. These related to eight medium-risk to low-risk deficiencies in general IT controls on four IT systems relevant to financial processes.

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Financial performance In 2018/19, Landcorp earned revenue of $241 million, with a net deficit after tax of $11 million. This compares with revenue of $247 million and net profit after tax of $34 million in the previous year. The deficit was primarily due to a $22 million fair value loss on biological assets (mainly livestock).

Decrease in EBITDAR In 2018/19, Landcorp reported EBITDAR1 of $34 million. This was a 29 percent decrease from $48 million in 2017/18. Landcorp attributed the decrease to a range of factors, which are detailed below.

The chief financial officer explained that two main factors drive the earnings of the business. They are commodity prices (split into red meat and dairy) and weather conditions. In 2018/19, the weighted average milk price decreased by about 26 cents. Also, the central North Island, where Landcorp gets about half of its milk from, had particularly dry conditions. The combination of these two factors was about $3.5 million.

In 2017/18, Landcorp had $8 million worth of carbon credits awarded to it when the Ministry for Primary Industries assessed the forests that became eligible. Ordinarily, it would have between $3 million and $4 million.

Several parcels of land on Landcorp’s Wairākei Pastoral lease, which previously had a rent holiday, now have rent charged. This was about $2 million for the year under review. Landcorp said that the rent will continue to increase as parcels of land become productive and are no longer rent-free.

Landcorp also highlighted several other increases:

 Costs increased by about $10 million. This included general cost increases for electricity, fuel, and fertiliser.  Staff caught up on deferred maintenance during the drought because the livestock has generally left the land. This amounted to about $1 million.  Milk powder that Landcorp had bought two years previously was revalued, and written down by about $3.5 million. Landcorp said that it had been forecasting this for some time.

Payment of dividend Landcorp paid a dividend of $5 million in 2018/19, which was the same amount as the previous year. We note that the 2017/18 dividend payment was the first dividend since 2013/14. We asked whether Landcorp believes that this created the expectation that it needed to continue paying dividends.

Landcorp said that the board believes that it is a good discipline to pay dividends. Landcorp explained that it received a gain of about $6 million on the sale of Westland shares. It

1 Earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs.

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2018/19 ANNUAL REVIEW OF LANDCORP FARMING LIMITED believed that it was appropriate that this was returned to the Crown. Landcorp also considered that its operating cash-flows and ability to manage debt were sufficient.

Diversifying land use Landcorp told us that it is looking for alternative land uses across its portfolio where it is appropriate. We heard that a lot of its land is in classes 5, 6, and 7, which is steeper, more difficult hill country. This means that Landcorp is relatively limited in how it can diversify its land-use options.

Landcorp is trialling an avocado plot of about 20 hectares at one of its farms in Northland. It plans for this eventually to be a whole farm conversion of about 50 hectares. The chief executive views the trial as an initial step for the board to assess whether Landcorp can make land-use conversions and diversify into horticulture. However, he does not believe that it will undertake large-scale horticultural developments because of the cost.

We asked whether Landcorp is exploring land diversification in other areas, such as profitability and the sustainable use of land. Landcorp said that it anticipates that the east coast of the North and South Island will get dryer summers on average in the future. Therefore, it needs to consider different plant–pasture mixes and crops that can withstand drought conditions.

Landcorp told us that it welcomes opportunities to partner with others when it is diversifying the use of its land. This is because partners can provide expertise that Landcorp does not have and share some of the risk. For example, it has partners for its land-use conversion to sheep milk and for its forestry portfolio. Landcorp is also considering opportunities for kiwifruit, with potential partners offering a range of options for capital and expertise.

Comparative analysis of Landcorp’s farms In 2018/19, Landcorp undertook an analysis that compared its farms against the top 20 percent of farms in the private sector. It used the databases of DairyNZ and BakerAg to find farms that could be used as “like for like” comparators. Landcorp was unable to find a comparator for the West Coast so it used Southland as a proxy for its livestock, beef, and cattle farms. The farms were then compared against a set of indicators. Landcorp was also able to rely on a KPMG report for ANZ Bank that provided a similar set of indicators.

Landcorp said it is satisfied that its farms are performing at a level that is comparable to its peers in the private sector. However, it believes that the potential from increasing productivity on its farms is significant. As a result, every farm now has key performance indicators relating to where their performance can be improved.

Organic farms Landcorp has a strategy to transition some of its farms to production systems that are certified as organic. When determining which farms should be organic, it assesses the farms that can manage the risks from organic farming. The risks primarily relate to having fewer tools available to manage animal health and welfare issues and dry summers, and being unable to bring in foreign feed. We heard that Landcorp looks for farms that are relatively

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2018/19 ANNUAL REVIEW OF LANDCORP FARMING LIMITED resilient to these risks and are part of a broader group of conventional farms. This enables stock to be moved around to mitigate the risks.

Landcorp explained that productivity drops by about 30 percent when farms are converted to organic. However, it is now starting to see productivity on its organic farms return to similar levels as its other farms. Landcorp credited this to working with the organic industry to share ideas and introduce new tools. It also believes that it can help increase the productivity of the organic sector by bringing a level of corporate professionalism to the industry.

Landcorp told us that it regularly benchmarks all of its farms. It said that 2019 was the first time that its organic farms appeared in its top 20. This was from the perspectives of productivity, profitability, and environmental sustainability. Landcorp observed that organic farms depend heavily on attracting a $2 premium over conventional milk. This expectation adds some risk.

We heard that Landcorp does not have a plan for an organic programme for meat at present. This is because the market has not signalled it as an opportunity to the same extent as dairy. However, it said there may eventually be an opportunity for organic bull beef.

Perception of Landcorp among farmers We asked how Landcorp measures the way it is perceived among other farmers, noting that it was previously “pretty poor”. Landcorp told us that it monitors what is happening in the media and talks with its neighbours. The chair said that the board now meets with sector and farming leaders when Landcorp visits the regions.

Landcorp also held a field day at its Eyrewell unit, which 600 farmers attended. The day, held in partnership with Synlait, Craigmore, and Farmlands, involved sharing knowledge and ideas. Landcorp believes that it needs to open up more of its farms for mutually sharing information and knowledge.

Landcorp observed that it would be helpful to receive cross-party support about Landcorp’s future role. This would include how its performance should be measured, what its contribution as a state-owned enterprise needs to be, and the influence it needs to have. Landcorp considers that clarity about its role would remove “a fair bit of the noise” about what it is doing and what its role should be.

Communicating Landcorp’s work Landcorp told us that its gain in productivity has been about 8 to 10 percent annually over the last decade. This is due to genetics improvements in animals, and better fertiliser and management.

Landcorp said that it is very excited about Focus Genetics, which is the biggest genetic improvement company in New Zealand.2 Landcorp considers that it now has the opportunity to determine whether it can breed low-methane sheep and animals that are better suited to organic farming.

2 Landcorp has a 100 percent interest in Focus Genetics Limited Partnership. It aims to enhance genetics in sheep, cattle, and deer, and to market those genetics to farmers in New Zealand.

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We encourage Landcorp to publicise its work. We acknowledged that the perception of Landcorp is improving. We consider that Landcorp has huge potential if its future is based on leading work to change farming systems based on gains in animal genetics.

Further, we suggested that the perception of Landcorp might not be as bad as some reports suggest. For example, Landcorp told us it has been working with farmers in the South Island on deer milk, sharing their combined expertise. We suggested that it must be getting a “reasonably good reception” if established producers are willing to share and receive information and guidance.

Future of the sheep milk industry Landcorp has a 50 percent interest in Spring Sheep Dairy, a joint venture for sheep milking. Landcorp also has 35 percent investment in Melody Dairies, which is constructing a specialist facility for spray drying near Hamilton. Construction is expected to be within budget and the facility operating by July 2020.

We asked whether Landcorp would consider devolving its share of Spring Sheep Dairy to farmers as more of them become suppliers to the company. In effect, Landcorp would act as the cash bank to get a new cooperative entity started. Landcorp told us that the opportunity is “still live” to explore. It is working to understand what the potential might be and the level of interest.

We commented that it would not be good for New Zealand if Landcorp builds up assets that are then sold to overseas investors. Landcorp noted that the sheep milk industry has received a lot of government funding through the Primary Growth Partnership. We heard that the sheep milking farms are for private-sector farmers. Landcorp said that it is not going to build a supply base without them having a view on certain matters. This includes the long- term viability of the sheep milking business. It believes that it needs to identify how to link these farmers into a longer-term stake, which would provide assurances to farmers about continuing to invest.

Effect of coronavirus on Landcorp We are interested in how the coronavirus epidemic in China is affecting Landcorp. It explained that it is dealing with two issues—a very complicated supply chain and a medical epidemic in a large market. Landcorp said that its partners, particularly meat processors, are reporting a lack of capacity in cold storage, resulting in product backing up. The situation has been exacerbated by the climatic conditions (a flood in Southland in February 2020 and drought conditions elsewhere). Demand from China has also been reduced because people are in lockdown.

Landcorp told us that the supply chain complications are also pushing prices down. This is affecting red meat more than dairy, which has a different supply chain. Landcorp said that it is monitoring the situation closely with its partners. It expected to have a better idea by the end of February 2020 about how it would be affected.

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Effect of certain factors on log prices European spruce bark beetles China can now transport logs overland from Germany, at a low cost. This has coincided with climatic conditions in Germany and Eastern Europe that have increased the vulnerability of their forests to European spruce bark beetle. As a result, they are felling huge areas of forests, which are being sold cheaply to China.

We heard that these logs are damaged (with beetle borer), resulting in the log category being graded as low. This product is a potential substitute for New Zealand’s low-grade radiata pine. However, Landcorp noted that the radiata has a niche because the European product is unable to perform at the same level as radiata for other purposes.

Landcorp told us that existing inventories and the logs from Germany and Eastern Europe have resulted in an inventory level of more than 6 million tonnes. It said that, typically, an inventory of about 3.5 million tonnes will affect log prices in New Zealand. Landcorp said that it will “just have to weather the storm”.

We were told that it took Canada about five or six years to work through a similar issue. Landcorp observed that the matter highlights the need for the forestry industry to create more resilience. Depending on a single market (China) for 80 percent of exports increases New Zealand’s vulnerability.

We asked whether resilience relies on a “wood first policy”. Landcorp said that the most powerful way to increase wood use and domestic wood processing is through government procurement.

Pruning We note that some forests in New Zealand are not being pruned and asked what would happen if this continues. Some of us expressed concern that this could damage the reputation of New Zealand’s timber and “close some markets out”.

Landcorp explained that the price difference between pruned logs and structural timber is not sufficient to cover the cost of pruning. Also, at present the demand in China is for lower- quality wood. Landcorp believes that wood processors need to signal that they have the capacity to pay forest growers enough to cover the costs of their silviculture regime.

Enabling the use of genetic technologies We note that a lot of the issues that the agricultural industry is trying to solve are based around science. We asked whether Parliament could assist somehow in relation to genetic technologies that are currently unable to be used. Landcorp highlighted several examples of possible technology, including gene editing that modifies the genome but does not introduce foreign DNA.

Landcorp said it believes that New Zealand needs to have a conversation about these technologies. It considers that New Zealand should be testing them in laboratories and in the field, while at the same time understanding the market and consumers’ preferences and perceptions.

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Appendix

Committee procedure We met on 13 February and 19 March 2020 to consider the annual review of Landcorp Farming Limited. We heard evidence from Landcorp Farming Limited and received advice from the Office of the Auditor-General.

Committee members Hon David Bennett (Chairperson) Hon Amy Adams Kiritapu Allan Kieran McAnulty Todd Muller Mark Patterson Rino Tirikatene Hamish Walker

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Landcorp Farming Limited).

Landcorp Farming Limited (Responses to written questions).

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Report of the Primary Production Committee

March 2020

Contents Recommendation ...... 2 About the Ministry for Primary Industries ...... 2 Financial performance ...... 2 Essential Freshwater...... 3 One Billion Trees Fund ...... 4 Land-use change for forestry ...... 5 African swine fever ...... 7 Māori representation in leadership ...... 8 Mental health for farmers ...... 9 Pea weevils ...... 9 Mānuka honey definition ...... 9 Appendix ...... 11

Hon David Bennett Chairperson 573

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Ministry for Primary Industries

Recommendation The Primary Production Committee has conducted the annual review of the Ministry for Primary Industries for 2018/19, and recommends that the House take note of its report.

About the Ministry for Primary Industries The Ministry for Primary Industries provides most of its core services through five business units: New Zealand Food Safety, Biosecurity New Zealand, Agriculture and Investment Services, Fisheries New Zealand, and Te Uru Rākau (Forestry New Zealand).

In 2019, the ministry developed a new strategy, with a vision and four outcomes. The vision is that New Zealand will be the world’s most sustainable provider of high-value food and primary products. The outcomes are:

 High-value food and primary sectors build prosperity for more New Zealanders.  Products are safe, and New Zealand is protected from biological risk.  Future generations will benefit from improved environmental performance by New Zealand’s primary industries.  The food and primary sectors are enabled to thrive. Ray Smith is the director-general of the ministry. He replaced Martyn Dunne in November 2018.

We thanked the director-general and the ministry for their efforts in a very wide and varied portfolio of work on behalf of New Zealand.

Financial performance In 2018/19, the ministry’s total revenue was $723 million. Its total expenditure was $714.5 million, resulting in a surplus of $8.4 million. This compares with revenue of $581.6 million and a deficit of $1.2 million in 2017/18. The significant increase in revenue from the Crown during the year under review is primarily due to funding for an operational response to Mycoplasma bovis.

The Auditor-General assessed the ministry’s management control environment as “very good”, with no recommended improvements. He assessed the ministry’s financial information and supporting systems and controls, and performance information and supporting systems and controls as “good”, with some improvements recommended.

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Essential Freshwater The ministry’s involvement in the Essential Freshwater proposals The ministry uses “rural proofing” when developing government policy. Rural proofing asks officials to consider the challenges that the rural sector faces when designing and implementing policy. We asked what advice the ministry provided from a rural-proofing perspective during the development of the Essential Freshwater package of proposals that have gone out for consultation.1

The ministry explained that the Ministry for the Environment (MfE) has the core leadership role for the policy process. The ministry told us that it played an important role in providing input alongside MfE throughout the process. However, the ministry said that it was ultimately for others to decide what was included in the consultation documents. We heard that the primary inputs into the consultation document were from three working groups—the Freshwater Leaders Group, Te Kāhui Wai Māori, and the Science and Technical Advisory Group. These were established to provide advice, primarily to MfE.

The ministry told us that the advice it provided directly to Ministers was from the perspective that the decisions for Essential Freshwater were “a little way out”. It expects that the main piece of advice is “about to come”. The director-general considers that the ministry now has the opportunity to develop feedback on how rural communities believe the proposals will affect them. He said that the ministry has been heavily engaged in the meetings it has had with its colleagues in the primary sector groupings.

We asked whether the ministry’s input reflected what it had been told by the rural community. The ministry told us that it has worked with groups in the primary sector to ascertain their views and to represent and understand them. From the process, the ministry has identified some key themes.

We were told that the ministry had a lot of representatives at a lot of the freshwater consultation. It said that the main issues that emerged through the consultation were concerns about: the nutrient attributes; the proposals for stock intensification and stock exclusion around the farm; environmental plans; and the feasibility, speed, and overall effect on the community of the combined package.

Values to be considered in the National Policy Statement for Freshwater The Draft National Policy Statement for Freshwater Management contains a set of compulsory “values” (such as ecosystem health), as well as other values that must be considered. We asked whether the ministry was comfortable with the values in the National Policy Statement for Freshwater Management, noting that science underpins all of its work.2 The ministry told us that its role is to help the Government achieve its goal, which is to advance the Essential Freshwater work programme. While the ministry was not the only decision maker in the document that was produced, it was heavily engaged during, and following, the consultation process.

1 Consultation on the discussion document “Action for health waterways: A discussion document on national direction for our essential freshwater” opened on 5 September 2019 and closed on 31 October 2019. 2 The draft statement was included in the Essential Freshwater consultation documents.

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The director-general does not believe that key science advice was sought from the ministry. Although it was involved, the science came from the science group, which consisted of a range of individuals. The director-general said that they probably had different views about the science, as do a lot of people. Some of us consider that, to date, the ministry has been marginalised from the process.

Economic analysis of the Essential Freshwater proposals We discussed whether the ministry provided a detailed economic analysis to its Minister about the likely effect of the proposals before the consultation documents were released. The ministry told us that it did not do so as part of the initial policy proposals that went to Ministers for consultation. At that time, it said to Ministers that a more detailed impact analysis would be provided when Ministers made final decisions in 2020.

The ministry told us it has quite a small water team, with one agricultural economist. It believed that it would be more beneficial to ensure that MfE’s analysis was done well, rather than doing its own. We heard that this included high-level analysis and scenarios on how the agricultural community would be affected.

The ministry told us that it provided very high-level advice that the combined reforms as a whole would have a “potentially big impact” on farmers. The effect on each farmer would depend on the individual farm. Some of us expressed disbelief that the ministry would not have given its Minister more detailed information on the biggest proposal that will affect the rural sector.

We sought the ministry’s view on economic analysis undertaken by key stakeholders. DairyNZ has projected an impact of $80 billion through to 2050, or an annual impact of $6 billion by 2050. Beef + Lamb New Zealand (through BakerAg) has estimated a capital impact of $180,000 to $680,000 for sheep and beef farms. The director-general explained that a panel has been established to consider feedback, of which this analysis is part.

We were told that the ministry is now working on a detailed impact analysis with MfE. The ministry is focusing on the agricultural parts of the package.

Work with sector groups We asked whether more work is under way regarding the feedback from sector groups as a result of the consultation. The ministry said that it is talking to the farming community and sector groups. The director-general explained that some important factors need to be understood in relation to the science. They include the conditions in which dissolved inorganic nitrate has an effect, and how practices such as winter grazing can be made to have less of an effect on the environment.

The director-general told us a range of panels is continuing to meet. They will be involved in the decision making that will inform Ministers for a final position in early 2020.

One Billion Trees Fund In November 2018, the Government launched the One Billion Trees Fund. It consists of a direct grants scheme for landowners and a partnership fund. Te Uru Rākau said it has approved about $60 million out of the total of $240 million funding for the programme. This 4

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR PRIMARY INDUSTRIES consists of $18 million worth of direct grants to landowners and $42 million to the partnership fund. For the 2019/20 financial year, it has committed about $31 million of direct grants to landowners for planting in the 2020 season. Te Uru Rākau still has about 450 applications that it is considering for the 2020 season.

Land-use change for forestry We discussed the increasing concern about land-use change amongst rural New Zealand. There is concern that farms are being sold, transitioning from pasture to forestry.

We note that the Minister of Forestry and the Minister of Agriculture have acknowledged the significant rural resistance to the apparent land-use change. Cabinet has also discussed this matter and has asked Te Uru Rākau to work with other agencies on two things. The first is to delve into the information to “ground truth” about what communities are saying they are witnessing. Te Uru Rākau said it needs to understand the scale of the changes and the type of land that is being converted.

The second thing to work on is considering options to manage afforestation if Te Uru Rākau confirms a trend of land-use change. It met with farming leaders in early December 2019 to discuss the issue. Te Uru Rākau also planned to bring together a group of people from the farming and forestry sectors in early 2020.

Te Uru Rākau described the matter as complex. It considers that the Government and communities need to discuss how to balance the actions that would enable New Zealand to meet its climate change commitments. They include offsetting emissions with forestry, making emissions savings in the economy, or buying offsets from offshore.

We asked whether the Government would be interested in reassessing the extent to which offsets for forestry are used in the medium term. Te Uru Rākau said it believes that the Government wants to explore how it gets the balance right.

Collecting data about land-use change Te Uru Rākau is monitoring the statistics for overseas investment and real estate. These can be challenging because there is a lag between the data and what is happening. Also, the real estate statistics do not capture the intended use of the land. Te Uru Rākau said that it has not seen an abnormal spike in sales of the land classes that it would expect to move to forestry. It has also not seen a spike in land prices. However, it has been talking to regional communities and mayors who are reporting an increase in land moving to forestry.

Te Uru Rākau has also examined the data from the emissions trading scheme to determine the classes of land that are being used. It said that this is primarily class 6 and 7 land that it would expect to be used for forestry, with small areas of other classes. Te Uru Rākau receives geographic information system (GIS) map files when people register land into the scheme. This means that it has a good understanding of what is being planted on class 6 and 7 land.3

3 Te Uru Rākau also receives GIS map files for land that it grant-funds.

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Te Uru Rākau surveys nurseries to find out the number of seedlings sold and records this on its website. It also completes a follow-up survey to confirm that the plants grown by the nurseries were sold. However, Te Uru Rākau noted that the survey also includes a large amount of planting that is replanting of the existing forestry estate.

We asked how the land-use conversion compares with what has happened in the past. Te Uru Rākau told us that the statistics are “pretty modest” when compared with the early 1990s. It said that overseas investment statistics show that the streamlined path for forestry has been growing since it was introduced. Although the majority of purchases have been of existing forestry land, about 14,000 hectares of farmland have been purchased for forestry.

Projected land-use change by 2050 Some of us expressed concern about projections from the Parliamentary Commissioner for the Environment and the Productivity Commission. They reported that at least a third of sheep and beef farms will transition to forestry by 2050 if the same trajectory continues. We asked whether the ministry is comfortable with this being the price of New Zealand meeting its climate change obligations.

The director-general told us that this is not the ministry’s assessment, nor what it is aiming for. He recognises concerns that high carbon prices might push afforestation beyond what is planned or expected. However, the director-general said that there is still time to make changes if needed.

Some of us queried why the ministry disagreed about the number of sheep and beef farms that would transition to forestry if current policy settings remained. The One Billion Trees 4 programme would remove between 4 and 13 million tonnes of CO2 by 2030. We observed that this is a relatively small part of the 200 million tonnes that New Zealand needs to sequester by 2030. We understand that the price of carbon is likely to increase steeply when the fixed price cap is removed. Further, we note that limited technology is available for CO2 emitters to mitigate their emissions in the short to medium term. This means that forestry is the only option for offsetting emissions. Therefore, we asked why the ministry did not believe that there would be significant pressure on land-use change.

The director-general acknowledged that the One Billion Trees programme is a “piece of this puzzle”. However, he believes the broader macroeconomic environment could lead to more afforestation in areas that the ministry had not anticipated. He described the matter as incredibly challenging. The director-general told us that the ministry is open to having conversations about finding a solution, and has been directed to do so.

Regulatory policy settings We are interested in whether the regulatory settings have been appropriate for the last several years to enable a forestry mantra to be met—that is, “right tree, right place, right time”. Te Uru Rākau considers that they have been, at a broad level. However, it said that the settings may need to be refined over time as it monitors what happens in areas such as the emissions trading scheme.

4 The programme aims to plant one billion trees over 10 years. 6

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We heard that the economic incentives for introducing forestry to the emissions trading scheme are now leading to investment in tree planting, as originally intended. Te Uru Rakāu told us that the component of the One Billion Trees programme that provides grants to landowners is also working. It has resulted in more interest in areas such as riparian planting, integrating trees on farms, and planting on steeper land. Te Uru Rākau told us it will complete a review in 12 months and determine whether it needs to recommend tweaks to the programme.

African swine fever Some of us have heard concerns from the pork industry that New Zealand is being complacent about African swine fever and that the current measures do not match the level of urgency required.

The ministry’s work with the pork industry The director-general told us that the ministry has held a number of meetings with the pork industry. They have both committed to completing an operational agreement for readiness and response should African swine fever arrive in New Zealand. The ministry hoped to have this agreement completed before the end of December 2019. As part of the agreement, the ministry would like to complete a comprehensive test of how New Zealand would respond in an outbreak.

The ministry has also committed to working with the industry and Government to ensure that the virus does not arrive in New Zealand. The director-general said that it is important for the pork industry to communicate certain messages to its members. For example, workers from areas where African swine fever has been detected have been advised to have stand-down periods before beginning work on a farm.

We also heard that the way that pigs are fed is important—it is illegal to feed uncooked pork product to pigs. The director-general believes that the biggest risk is likely to come from people who keep, say, 10 to 20 pigs on their property. The ministry is communicating messages about feeding to this community.

Imports of fresh pork The director-general explained that New Zealand only exports fresh pork from five places: Australia, the United States, Canada, part of Mexico, and the European Union (EU). Of these places, the EU is the only one with African swine fever.

We were told that the EU operates a regionalisation process across Europe. In areas where African swine fever is present, pork is not allowed to be moved around Europe or to countries the EU trades with. The ministry has visited the EU to ensure that the process is operating well and meets the ministry’s requirements. It described the process as very stringent and very robust, with veterinary supervision and extensive legislative controls. The ministry said it is confident that the oversight is appropriate.

The director-general compared this process to the ministry’s response to Queensland fruit flies in Auckland. New Zealand has to guarantee to its trading partners that it will not export

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR PRIMARY INDUSTRIES any contaminated fruit. The trading partners accept this because they have a trade agreement with New Zealand. Likewise, New Zealand has the same process with the EU.

The ministry has not tested any imported pork products in New Zealand. It said that African swine fever has always been spread by the illegal movement of pork and pigs. The ministry is confident that the only legal pathways where the product could enter do not have the virus. Also, testing is quite complicated and is not necessarily clear-cut.

Sixty percent of New Zealand’s pork is imported from the five markets listed above. We asked what percentage comes from the EU, querying whether it may be easier to stop those imports. The ministry subsequently confirmed that between 2015 and 2018, 60 percent of fresh and frozen meat imports were from the EU.

Import health standards The ministry explained that import health standards are critical for preventing African swine fever from entering New Zealand. It said that it has absolute confidence that the standards are correct. The ministry would change the conditions if the disease profile shifted.

Since the spread of African swine fever, the ministry has changed the import health standard that applies to passengers. This prevents people from bringing in fresh or processed pork. It has also considered the standards for pet food, processed pork, and machinery.

Imports of processed and frozen pork New Zealand also imports processed pork from countries that have African swine fever. It relies on its trading partners processing the product to a certain standard. This includes retortion, which involves heating the product, rendering any viruses or bacteria safe. We heard that the reliance on trading partners providing assurances is not a new provision and is the way that New Zealand trades.

We understand that some frozen pork is imported for processing in New Zealand and asked whether this presents a risk of contamination. The ministry told us that the legal trade in pork is low-risk given all of the protections that are in place.

Work with Australia The ministry told us that Australia is monitoring the spread of African swine fever very closely. New Zealand is working closely with it to plan the response measures should African swine fever spread to Australia. The Australians will have a readiness exercise in 2020, which New Zealand will be part of. The two countries are also sharing technical capability to ensure they are prepared.

Māori representation in leadership In its 2018/19 annual report, the ministry stated that it is focusing on raising the visibility of its leadership on issues of importance to the food and primary sectors. Given that Māori are big stakeholders across primary industries, we are interested in how the ministry is showing visible leadership in its work with Māori.

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The ministry told us that the director of Māori agribusiness (Ngati Porou) is its most senior Māori team member. We expressed the importance of having visible Māori leadership and of rangatira leading the way.

The director-general recognises that the ministry has quite low Māori representation within the organisation. He believes that the challenge is to ensure that its talented Māori staff are promoted through the organisation and given opportunities. The ministry is building a capability plan to do so. It said it had other Māori leaders in the organisation but acknowledged it has some work to do.

Mental health for farmers We asked how many farmers are on suicide watch, noting our discussions about a number of areas where the rural sector is under quite a lot of pressure. The director-general was unsure of the number. He said that rural support trusts are an important investment for the ministry. These support rural farming families and connect them with the right services.

The ministry told us that it has an avenue for qualitative information, rather than quantitative information. It has staff around New Zealand from its rural communities and farm support directorate. The ministry also has a range of policy agents who provide the ministry with an understanding of what people are experiencing at a community level. It said that this has led to informed policy advice in initiatives such as rural proofing.

We acknowledged the support that the ministry provides. However, some of us expressed concern that the ministry does not hold data about the numbers of farmers on suicide watch. This makes it difficult to understand how Government policies are affecting rural communities.

Pea weevils Pea weevils were found in the Wairarapa area between 2016 and 2017. As a result, pea plants and pea straw were banned to remove the pea weevil’s food source and cause them to die out. The director-general told us that no pea weevils were detected in the two rounds of testing undertaken since then. He expected the pea growers to be allowed to start operating again in 2020, with residual compensation also being paid.5

The director-general acknowledged that the process has been difficult for particular growers. This was because it was a long time for them to be out of business and to have to work with the ministry. However, he considers that the process was well handled, with good involvement from Federated Farmers. We thanked the ministry for its work, including addressing concerns about compensation payments.

Mānuka honey definition We sought an update on the ministry’s work on the regulatory definition for exported monofloral and multiflora mānuka honey. The ministry explained that it made some adjustments to the standard just before it came into force in February 2018. It will be working

5 On 17 February 2020, the Government announced that the pea weevil had been successfully eradicated.

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2018/19 ANNUAL REVIEW OF THE MINISTRY FOR PRIMARY INDUSTRIES with the industry on a review of whether those adjustments are working well, which it expects to take several months. The ministry will also work with the industry on a joint science programme that will consider the science underpinning the authenticity of honey and how to best progress that. The ministry emphasised that this work is not a review of the definition. Rather, it is anticipating how the science is evolving and what this might mean for authenticating mānuka and other honeys in the future.

The ministry said it has had no issues with exported mānuka honey under the definition and it has a good relationship with the industry. In August 2019, the Mānuka Honey Appellation Society was granted $5.7 million through the Provincial Growth Fund to help secure intellectual property rights for the term “mānuka honey”. If the society is successful, the ministry noted that that this will provide further assurance to consumers about the authenticity of the honey.

We understand that the monofloral mānuka honey definition might be causing mānuka honey sourced from certain regions, particularly Northland, to be misclassified as non- mānuka. We heard that the ministry is working with Northland on this issue. It said that understanding the regional differences and the composition of the markers in honey will be a “fairly long process”.

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Appendix

Committee procedure We met on 5 December 2019 and 19 March 2020 to consider the annual review of the Ministry for Primary Industries. We heard evidence from the Ministry for Primary Industries and received advice from the Office of the Auditor-General.

Committee members Hon David Bennett (Chairperson) Hon Amy Adams Kiritapu Allan Kieran McAnulty Todd Muller Mark Patterson Rino Tirikatene Hamish Walker

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry for Primary Industries).

Ministry for Primary Industries (Responses to written questions).

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2018/19 Annual review of Quotable Value Limited

Report of the Primary Production Committee

March 2020

Contents Recommendation ...... 2 About Quotable Value Limited ...... 2 Summary of financial and audit results ...... 2 Amalgamation of Darroch Limited ...... 3 Value of being in the Australian market ...... 3 Rural property trends ...... 4 Accuracy of valuations ...... 4 Appendix ...... 5

Hon David Bennett Chairperson 584

2018/19 ANNUAL REVIEW OF QUOTABLE VALUE LIMITED

Quotable Value Limited

Recommendation The Primary Production Committee has conducted the annual review of Quotable Value Limited for 2018/19, and recommends that the House take note of its report.

About Quotable Value Limited Quotable Value Limited (QVL) is the largest valuation and property services company in New Zealand. It is wholly Government owned as a state owned enterprise. It provides valuation and property services across the residential, rural, government, and commercial sectors in both New Zealand and Australia. It holds an 87 percent market share of the New Zealand valuation market.

Until 1 November 2019, QVL comprised two subsidiary companies—Darroch Limited and Quotable Value Australia Pty Limited. Darroch Limited was then amalgamated into QVL, so it is now a business unit of QVL rather than a separate subsidiary. QVL and Darroch provide services in New Zealand, and Quotable Value Australia Limited provides services to local government organisations across Australia.

QVL sees its core purpose as helping New Zealanders to make better property decisions by providing property intelligence. Its strategy is to continually focus on operating its core business efficiently, and only then pursuing options for growth when and where possible.

Summary of financial and audit results In 2018/19, QVL earned total revenue of $34.18 million, compared with $38.20 million the previous year. It recorded a loss after tax of $556,000, compared with an after-tax profit of $792,000 in 2017/18. This was a $1.35 million decline in profitability.

We heard that QVL’s total profit after tax is predominantly affected by the three-yearly cycle of the company’s valuation work for local authorities. Some years show lower revenue depending on when, and how many, council revaluations occur in a particular year of their three-yearly cycle. In addition, QVL’s profit was also affected by new IFRS accounting standards which QVL was required to apply for the 2018/19 financial year.1

Audit results At our last annual review, we learned that the Auditor-General had downgraded its rating for QVL’s financial information systems and controls to “needs improvement”. We are pleased to see that QVL has returned to a “good” rating for the 2018/19 financial year, although there are still some recommendations for continued improvement. The management control environment remains graded at “good”, also with some recommendations for improvement.

1 International Financial Reporting Standards. 2

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Sensitive expenditure As in the previous year’s audit, the Auditor-General again identified some instances where expenditure was not in line with good practice, was not appropriately approved, or was not supported by appropriate documentation. However, the auditors noted that this had improved by the second half of 2018/19. We encourage QVL to implement the auditors’ recommendations regarding financial information systems and controls to ensure that its expenditure practices continue to improve.

Compliance with the Holidays Act 2003 QVL identified issues regarding payments to be made under the Holidays Act 2003. An initial assessment estimated that it might be liable for payments of anywhere between $500,000 and $1.5 million. Given the degree of uncertainty, this was disclosed as a contingent liability in its financial statements as it could materially affect QVL’s financial situation. This was noted as an “emphasis of matter” paragraph in the audit report.

We look forward to an update from QVL at the next annual review on the resolution and settlement of these payments.

Information provided in the annual report At our last annual review we expressed disappointment about the limited information in the 2017/18 annual report. We appreciate the fact that this year QVL has produced a more informative annual report than in previous years.

Amalgamation of Darroch Limited We asked QVL about the reasons behind amalgamating Darroch Limited into QVL. Keeping it separate could have helped to identify its profitability issues, as we note that it was a loss- making business.

We were told that QVL’s internal review of Darroch showed that it retained strong business potential, and was well aligned with QVL’s business. However, it had lost scale over the past decade due to a highly competitive market and ongoing operational costs. Amalgamating the two companies meant that many of the operational costs previously incurred by Darroch no longer exist, as QVL has absorbed them. For example, Darroch no longer needs separate board meetings or separate financial statements, as these are fixed costs already being met by QVL.

We look forward to hearing about performance in the first year of the amalgamation at the next annual review.

Value of being in the Australian market We were interested in why QVL has an Australian operation as part of its business, when the company’s core purpose is to provide services to New Zealanders. We heard that financially it benefits QVL, and there is also an element of mutual interest, as each country can learn from the other. However, the new board is considering whether the risk associated with a bigger market abroad is still worth pursuing in the future. QVL is also aware that renewal of

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2018/19 ANNUAL REVIEW OF QUOTABLE VALUE LIMITED the Australian contracts was not as successful as it had hoped, so this will also be a consideration for the future.

Rural property trends We inquired about rural property trends, particularly in the South Island. QVL said it has seen on average a 5 to 15 percent decrease in dairy property values around the country.

We asked what QVL sees as the main reason for the decrease in dairy values. It said there are always a number of factors that influence property prices up and down. In the rural sector, they include factors such as Overseas Investment Office rules, global dairy pricing, environmental factors such as water policies and irrigation, as well as available capital. QVL also noted that the influencing factors are not always the same and can change from season to season, and from property to property.

Accuracy of valuations We asked how QVL checks the accuracy of its valuations, and specifically whether it cross- checks the revaluations with actual subsequent property sales.

QVL assured us that it checks its accuracy against sales. In practice, the valuations are generally released with an “as at” date that is in the past. This means that the valuations are compared to actual property sales before they are even released to the public. In addition, valuations are not released to the public until they have been audited and approved by the Valuer-General. The Valuer-General will only pass the valuations for release once certain standards have been met. QVL noted that there is generally a tolerance margin of plus or minus 5 percent.

We were also pleased to hear that QVL holds detailed information on every property. This means that valuations undergo detailed analysis, as opposed to an averaging process across a particular sector or building type.

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Appendix

Committee procedure We met on 5 December 2019 and 19 March 2020 to consider the annual review of Quotable Value Limited. We heard evidence from Quotable Value Limited and received advice from the Office of the Auditor-General.

Committee members Hon David Bennett (Chairperson) Hon Amy Adams Kiritapu Allan Kieran McAnulty Todd Muller Mark Patterson Rino Tirikatene Hamish Walker

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Quotable Value Limited).

Quotable Value (Responses to written questions).

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2018/19 Annual review of the Housing New Zealand Corporation

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Housing New Zealand Corporation ...... 2 Purchasing housing from the private sector ...... 3 Developing higher-density living ...... 3 Partnering with other agencies and NGOs ...... 4 Innovating construction ...... 4 KiwiBuild homes ...... 5 Complying with healthy homes standards ...... 6 Addressing methamphetamine contamination ...... 6 Appendix ...... 7

Gareth Hughes Chairperson 589

2018/19 ANNUAL REVIEW OF THE HOUSING NEW ZEALAND CORPORATION

Housing New Zealand Corporation

Recommendation The Social Services and Community Committee has conducted the annual review of the Housing New Zealand Corporation for 2018/19, and recommends that the House take note of its report.

About the Housing New Zealand Corporation Now part of Kāinga Ora, the Housing New Zealand Corporation (HNZC) was established as a statutory corporation under the Housing Corporation Act 1974. The Act sets out HNZC’s functions to support the Crown’s social objectives by providing housing and housing-related services, specialising in New Zealanders in need of housing assistance.

HNZC and its subsidiary HLC (formerly the Hobsonville Land Company) became part of the new agency, Kāinga Ora – Homes and Communities (Kāinga Ora) on 1 October 2019. Kāinga Ora also incorporated the KiwiBuild Unit, which moved from the Ministry of Housing and Urban Development. Under the Kāinga Ora Act 2019, Kāinga Ora assumed responsibility for all the operations, assets, liabilities, rights, and obligations related to HNZC.

Andrew McKenzie served as chief executive of HNZC from 2016, and is now chief executive of Kāinga Ora. Vui Mark Gosche was appointed board chair of HNZC in June 2019 and now serves as the chairperson of Kāinga Ora.

Financial and service performance In 2018/19, HNZC recorded total operating revenue of $1.451 billion. This was about 8 percent more than 2017/18’s operating revenue of $1.338 billion. About 86 percent of HNZC’s total revenue ($1.248 billion) comes from the Income Related Rent Subsidy (IRRS) or from tenants receiving the IRRS.

HNZC’s expenses for 2018/19 totalled $1.349 billion, which was about 14 percent higher than the previous year’s expenses of $1.185 billion. HNZC’s most significant costs included repairs and maintenance ($366 million, up 15 percent), depreciation on rental properties ($265 million, up 12 percent), and personnel costs ($152 million, up 20 percent).

Reflecting other gains and losses, HNZC achieved a net surplus, after tax, of about $60 million. This compared with $76 million the previous year.

The Auditor-General assessed HNZC’s management control environment as “very good”.

HNZC’s financial information and supporting systems and controls were rated “good”. The Auditor-General suggested improvements to how it classifies and values assets.

The Auditor-General rated HNZC’s performance information and associated systems and controls as “good”. It recommended that HNZC clearly define targets for all significant

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2018/19 ANNUAL REVIEW OF THE HOUSING NEW ZEALAND CORPORATION measures and that it reconcile differences between its enterprise asset management and its fixed asset register.

Purchasing housing from the private sector Some of us were concerned by reports that some real-estate agents are selling homes directly to HNZC, bypassing the housing market. Some of us were also concerned by an instance where a developer had sold a development block of 44 one-bedroom apartments in Onehunga to HNZC. Some of us were of the view that seven or eight tenants who had been pre-sold apartments there had been displaced.

Some of us consider that these practices, and buying on the open market, mean that less housing is available to first-home buyers and renters who are already struggling to enter the market. Some of us are also concerned that these practices are displacing people from the market, and buoying up the cost of houses, as they are not being sold at “market value”.

HNZC said that, in the past year, it purchased 84 homes from the private sector in Auckland. It did not see this as a high proportion, considering that about 4,500 homes were sold in Auckland last year. Although HNZC’s focus is on adding to its housing stock through new builds, it buys houses from the private sector when:

 its current housing stock is not fit for purpose; for example, if it needs homes suitable for larger families  it is seeking to house people in their own community but it does not have existing housing stock to meet demand  it needs to find homes for people currently living in housing that it wishes to redevelop or increase in densification. Regarding the purchasing of the Onehunga development, HNZC said it was an attractive proposition because the development was offered to it as an entire site at a good price, and was suitable for use that HNZC needed. It knew that some of the apartments had been presold, but was not aware what arrangements the developer had come to with these intended purchasers. Overall, HNZC regretted that the intended purchasers were affected and was committed to making sure that this kind of situation did not arise again.

HNZC has added 2,017 homes to its housing stock in New Zealand in 2018/19. Of these, 1,461 have been new builds and 436 have been purchased. HNZC said it would sell purchased homes where there was no longer any demand for them.

Developing higher-density living HNZC told us that about three-quarters of its housing stock has reached the end of its useful life and requires renewal. As it undertakes its renewal and retrofitting programme, HNZC often works to maximise the capacity of its land asset by demolishing the existing house and building up to three new ones in its place.

High-density housing is increasing in New Zealand, particularly in urban areas, as the sector responds to a greater need for housing. HNZC said that it is mindful that high-density housing is a movement away from what New Zealanders are used to. It is careful to balance

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2018/19 ANNUAL REVIEW OF THE HOUSING NEW ZEALAND CORPORATION the optimisation of its land with understanding the needs of its tenants and of the wider community. One of the ways it does this is by considering what community facilities are available for its tenants, such as parks and playgrounds for families who might not have much lawn space on their property. Where it is building larger developments, HNZC engages extensively with the community to understand what amenities and facilities there are, such as schools and medical centres, and minimise disruption to them.

Partnering with other agencies and NGOs Before it transitioned into Kāinga Ora, HNZC was focused primarily on its housing stock and the approximately 4 percent of New Zealanders who lived in its homes. However, Kāinga Ora’s operating principles encourage much greater collaboration across the sector to recognise and meet the needs of New Zealanders in social housing.

For example, we heard that it works with community agencies and NGOs like Women’s Refuge, district health boards, the Department of Corrections, Oranga Tamariki––Ministry for Children, the Ministry of Social Development, and Monte Cecilia Housing Trust. Working with these community partners helps Kāinga Ora understand its customers’ needs and how to best support them so they can live with stability, dignity, and connection within their communities.

HNZC does not work directly with other community housing providers. However, the Ministry of Housing and Urban Development coordinates its work so that processes are not duplicated and the housing stock is used optimally.

Innovating construction In 2018/19 HNZC exceeded the target in its Statement of Performance Expectations for building 1,100 state homes a year, recording a net increase of 1,223. As of 30 June 2019 it manages 65,256 state homes and has the goal of managing 68,000 by June 2022. HNZC estimates that in January 2020 it will have 3,000 homes under construction, with about four or five being completed each day.

To improve the efficiency of its building programme, HNZC set up an innovation team to test and pilot different building and manufacturing approaches. The introduction of long-term contracts has also enabled HNZC’s construction partners to invest in equipment and people. This has increased their efficiency and reduced their costs.

HNZC calculates its value-for-money not just on the up-front building cost, but on the home’s total lifecycle cost. Its quality-assurance team ensures that the new homes meet specifications, are cheap to live in, and will keep their occupants warm, secure, and dry into the future.

Offsite manufacturing HNZC’s use of offsite manufacturing facilities allows for the rapid production of buildings and components such as cross-laminated timber buildings and steel-framed buildings, as well as bathroom pods and other elements, which can be transported to and assembled onsite.

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HNZC estimates that it is up to twelve times quicker to build a component offsite than it is to do a traditional build. It also said that the quality of the offsite component is usually better than a traditional build, and that there are fewer health and safety risks because there are fewer machines and “movements” on the building site.

Reducing waste and carbon emissions HNZC acknowledged that offsite manufacturing might generate more carbon emissions because of the transport required to move building components to the site. However, it believes that much less waste is produced than on a traditional building site because of the efficiencies of offsite manufacturing.

We observed that a study led by Massey University and the Building Research Association of New Zealand revealed that the climate impact of a typical new build in New Zealand exceeded the Paris climate accord target by a factor of five.1 We were pleased that HNZC had committed to a minimum of Homestar 6 certification for new builds (except apartments) that are contracted from 1 July 2019, and for apartments from 1 January 2021.2 HNZC said that it is always seeking to improve its Homestar rating and sustainability practices.

KiwiBuild homes As part of Kāinga Ora, KiwiBuild works with property developers and manufacturers to provide more homes for New Zealanders. KiwiBuild helps facilitate new housing developments by underwriting homes in new developments, making land available for development, and integrating affordable housing into major urban development projects. When a developer is supported by the KiwiBuild programme, they are required to offer a portion of the homes to eligible KiwiBuild buyers first. The homes are designed for New Zealanders at different stages in life and must be sold under a price cap to ensure their affordability.

We observed that the number of KiwiBuild homes being sold has been declining over recent months––59 in October 2019, 35 in November 2019, and 11 in December 2019. HNZC said that it was normal for house sales to slow down over the Christmas period, but expected that they would pick up again as the markets reopen.

Some of us are concerned that some KiwiBuild homes, in places such as Wānaka, had remained unsold. HNZC said that KiwiBuild has improved its processes for making underwriting available, to limit the Crown’s financial risk. This includes working with the developer to ensure that where the homes are being built actually meets demand.

We wondered whether the requirements for KiwiBuild first-home buyers might be adjusted in places where KiwiBuild homes were not selling. HNZC told us that the requirements for KiwiBuild first-home buyers is policy that is being worked through by the Ministry of Housing and Urban Development.

1 Chandrakumar, Chanjief & McLaren, Sarah & Dowdell, David & Jaques, Roman (2019), A top-down approach for setting climate targets for buildings: the case of a New Zealand detached house. 2 Homestar is a comprehensive, independent national rating tool, run by the not-for-profit Green Building Council, that measures the health, warmth, and efficiency of New Zealand houses. A home is rated on a scale from 6 to 10.

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HNZC said it would not significantly lower the prices of these hard-to-sell KiwiBuild homes, as it is mindful of protecting the investment of first-home buyers who have already bought KiwiBuild homes in these places.

HNZC told us that it is currently contracted to build about 2,200 KiwiBuild homes. As at 31 December 2019 it had purchased 137 underwritten homes. Of these, 72 have been onsold and 65 remain in HNZC’s ownership.

Complying with healthy homes standards The Healthy Homes Guarantee Act 2017 provided for the development of standards to improve the quality of rental housing in New Zealand. The healthy homes standards introduce specific and minimum standards for heating, insulation, ventilation, moisture ingress and drainage, and draught-stopping in rental properties.

Where all private rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, all houses rented by Kāinga Ora must comply by 1 July 2023. Some of us wondered why Kāinga Ora had been exempted from the standards for an additional two years, and why, as a government agency, it was not leading the sector on government policy.

HNZC told us that the size of its housing stock needing intervention—about 65,000 homes— would be a significant project of work that would take time. However, it was also taking a measured approach to limit its competition with the private sector for resources in bringing homes up to standard, so as not to force costs and prices up.

Addressing methamphetamine contamination HNZC said it has 33 properties currently vacant due to methamphetamine contamination above the recommended safe levels. Its policy is to rehome the affected tenants while it refurbishes the property.

Some of us argued that sanctions should be applied to tenants who contaminate properties that must be refurbished at the taxpayers’ expense. However, HNZC said it did not have the power or authority to determine or prosecute criminal behaviour. As long as a potential tenant met its eligibility criteria, HNZC’s focus is to find a home for them.

HNZC told us that it does not report methamphetamine contamination to the New Zealand Police unless there are signs of manufacturing at the property. However, where it finds methamphetamine contamination in properties occupied by children, this would be reported to Oranga Tamariki––Ministry for Children.

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2018/19 ANNUAL REVIEW OF THE HOUSING NEW ZEALAND CORPORATION

Appendix

Committee procedure We met on 19 February and 18 March 2020 to consider the annual review of the Housing New Zealand Corporation. We heard evidence from the corporation and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata'a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Housing New Zealand Corporation).

Housing New Zealand Corporation (Responses to written questions).

Housing New Zealand Corporation (Powerpoint to Select Committee).

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2018/19 Annual review of the Ministry of Housing and Urban Development

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 Introduction ...... 2 The housing system ...... 2 Financial overview and audit results ...... 3 Staff capability...... 3 Public housing...... 4 KiwiBuild ...... 6 Urban development ...... 6 Appendix ...... 7

Gareth Hughes Chairperson 596

2018/19 ANNUAL REVIEW OF THE MINISTRY OF HOUSING AND URBAN DEVELOPMENT

Ministry of Housing and Urban Development

Recommendation The Social Services and Community Committee has conducted the annual review of the Ministry of Housing and Urban Development for 2018/19, and recommends that the House take note of its report.

Introduction The Ministry of Housing and Urban Development (HUD) leads New Zealand’s housing and urban development system. It is responsible for the performance of the system. The ministry’s functions include:

 setting the strategy for the housing and urban development system  providing the Government with policy advice  monitoring the performance of the system  funding initiatives in the housing sector  providing regulatory oversight for community housing providers  purchasing social housing  paying income-related rental subsidies.

HUD is a relatively new government department, operating since 1 October 2018. It was established to bring together housing and urban development functions that were previously spread across the Ministry of Business, Innovation and Employment (MBIE), the Ministry of Social Development (MSD), and the Treasury. Its Chief Executive is Andrew Crisp.

The housing system In HUD’s view, the housing system in New Zealand is not working, especially for low income New Zealanders, Māori and Pasifika, and first home buyers. It said this is evidenced by the number of people who are homeless, the lack of affordable housing, and the low quality of housing stock.

Changes made to the housing and urban development sector aim to improve the housing system. HUD’s establishment in October 2018 was followed by the establishment of Kāinga Ora—Homes and Communities in October 2019. Kāinga Ora was created by merging Housing New Zealand, its development subsidiary HLC, and the KiwiBuild unit within MBIE.

HUD and Kāinga Ora work closely together. HUD is responsible for overseeing the housing and urban development system and its strategy. Kāinga Ora is responsible for delivering the system strategy. It is the landlord for public housing, and is responsible for urban development projects.

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF HOUSING AND URBAN DEVELOPMENT

HUD also works with other government agencies, local government, iwi, and the not-for- profit and private sectors to deliver its strategy.

Financial overview and audit results The audit report for HUD covers the period from its establishment on 1 October 2018 to 30 June 2019, which is not a full financial year.

In 2018/19 HUD’s total revenue was $51 million, and total expenses were $46 million. Its total assets were $17 million, and total liabilities were $8 million.

Systems and controls The Auditor-General assessed the ministry’s management control environment, financial information systems and controls, and performance information and associated systems and controls as “needs improvement”. HUD said that the Auditor-General’s office has told it that it is not unusual for a newly created entity to have “needs improvement” grades. The Auditor- General’s office said that HUD has made good progress towards developing systems and controls necessary to deliver its functions. Some of us remain concerned by these ratings. We were told that HUD aims to improve on all of its ratings by next year’s annual review. We expect this target to be met and will monitor the ministry’s progress.

Risk management During the 2018/19 audit period HUD did not have a risk management framework or a risk assessment process. We asked how it manages risk without these tools. It said that it documents risk using a risk register which is discussed regularly by the senior management team. An interim risk and audit committee was in place until the end of 2019; we were told that it would be replaced by a permanent committee. This committee advised HUD about risks and how they should be managed.

Legislative compliance The ministry is responsible for administering nine Acts of Parliament. It does not yet have a formal framework for assessing and reporting on whether it is complying with this legislation. It expects to finish developing this by the end of 2019. At the moment staff take responsibility for ensuring the legislation is complied with, and any concerns are raised with the chief executive.

Staff capability We note that HUD initially had a large number of staff seconded from MSD and MBIE, but over the course of 2018/19 it appointed more than 120 staff. We asked about areas in which the ministry still needs to improve its capability.

The ministry said that, to improve housing outcomes for Māori, it is trying to employ staff with an understanding of the issues in the housing system that Māori face. In order to develop its market intelligence, it also needs staff who understand the housing market and the differing needs of communities. This will help it to analyse whether the Government’s interventions are working and are cost effective. In other areas, it needs more people to monitor the work

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF HOUSING AND URBAN DEVELOPMENT done by Kāinga Ora, more people for policy work, and more people who can arrange contractors.

We will follow with interest the ministry’s progress in developing its staff capability.

Public housing Public housing is made up of state housing provided by Kāinga Ora, and community housing provided by community housing providers (CHPs). HUD is responsible for contracting Kāinga Ora and CHPs to buy and lease public housing, and for setting the strategy for public housing.

Demand for public housing In the last five years the number of people on the waitlist for public housing has increased significantly. The ministry sees the main drivers of this increase as fewer affordable homes, more people asking for help, and more opportunities for people to receive support. It commented that not enough houses have been built for generations, and that the housing problem goes back to the 1970s.

We discussed the challenges involved in providing more public housing to respond to the increase in demand. HUD said that more than 2,500 houses have been contracted to be built as part of the state housing building programme. Kāinga Ora and CHPs are also purchasing houses off the market to increase the public housing stock.

Some of us are concerned that Kāinga Ora is outcompeting people who are trying to buy a home for themselves. HUD acknowledged that there may be some instances of displacement. It is trying to minimise this while ensuring there is sufficient public housing stock. It said that Kāinga Ora is not purchasing or leasing properties that are already rented, so as not to displace people. It also predicts that the amount of public housing that is built new or purchased off existing plans will surpass the number of existing houses purchased off the market. This is expected to reduce competition between Kāinga Ora and private home buyers. We were told that, when Kāinga Ora purchases a house off the market, it does not pay more than 5 percent above market valuation. However, approval to exceed the 5 percent threshold can be given by an executive staff member if there is a pressing business need.

HUD said it monitors Kāinga Ora to ensure that its methods of purchasing houses off the market do not distort the market or unfairly disadvantage competitors. Some of us raised concerns about instances where these things appeared to be happening. HUD said that it would not expect Kāinga Ora to approach real estate agents to buy houses before they are put on the open market. We followed up this matter and were told that, although Kāinga Ora does not approach real estate agents, real estate agents sometimes approach it before properties are put on the market. In this case Kāinga Ora may purchase a property if there is a strategic reason to do so. We were told that Kāinga Ora may also contact home owners directly to sell their home if it is needed for strategic reasons. The chief executive of HUD said he was not aware of the claim that emergency housing managers in Papakura

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF HOUSING AND URBAN DEVELOPMENT employed by Kāinga Ora were renting their properties to emergency housing providers. We also followed up this matter and Kāinga Ora said such a practice is not occurring.1

The community housing sector HUD has a goal of Kāinga Ora providing 70 percent of the public housing supply, and CHPs providing 30 percent. The community housing sector exceeded this target in 2018/19, providing more public housing than forecast. HUD said that it is continuing to support CHPs using tools such as the operating supplement, and noted their good work.

Transitional housing HUD is responsible for transitional housing, to provide individuals and families with short- term accommodation while long-term housing is found. As of September 2019 there were 3,001 transitional housing places across the country.

Each transitional housing placement has a transitional housing provider associated with it. Providers work with tenants to find them long-term housing. They also provide tenants with a range of support services to help them transition successfully to long-term housing. HUD partners with non-governmental organisations and community organisations to provide these services.

The Housing First programme is a form of transitional housing that provides housing for people who have experienced homelessness for a long time and who have complex needs. As of September 2019, 939 households were housed by the Housing First programme across eight towns and cities. Housing First provides tenants with comprehensive support services suited to their needs.

Of the 38 territorial authorities, 29 have no transitional housing places available. HUD said it is working to increase the supply of transitional housing.

Tāmaki Regeneration Programme The Tāmaki Regeneration Programme is a project to develop the suburbs of Glenn Innes, Panmure, and Point England in Auckland. It began in 2013 with the aim of building more than 10,500 new homes and improving the amenities in these communities. The project is run by the Tāmaki Regeneration Company in partnership with Kāinga Ora.

We heard that the programme will continue to remove rundown state houses from properties in Tāmaki and build new houses in their place. HUD said that when a state house is being replaced it houses the tenants from that house in the same community.

The Hastings project We are concerned that the number of people on the waitlist for public housing in the Hastings District increased from 324 to 459 between July and September 2019. We asked why public housing is not being built in Hastings when there is empty land available. HUD said it is piloting a place-based approach to housing in Hastings which has been under way for several months. This approach tailors housing solutions to the needs of the Hastings

1 Ministry of Housing and Urban Development (Responses to written questions), questions 118 and 120.

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF HOUSING AND URBAN DEVELOPMENT community, in partnership with the community, iwi, and council. We heard that significantly more state housing will be built in Hastings.

KiwiBuild A number of KiwiBuild houses in Wanaka, Te Kauwhata, and Pegasus remain unsold. We asked whether these houses would be used for state housing. HUD said that these houses will be sold on the open market if they remain unsold to KiwiBuild buyers. It is not aware of any plans to make them available for state housing.

Urban development We asked whether HUD was confident that Kāinga Ora would be able to successfully execute its urban development functions. Some members expressed concern that Housing New Zealand had failed to facilitate such projects in the past, and questioned whether Kāinga Ora would be any different. HUD said that the establishment of Kāinga Ora is a significant change to the operation of the housing system. HUD believes that the scale of the new ministry and the powers in the Urban Development Bill will provide Kāinga Ora with the tools it needs to execute urban development projects.

The Urban Development Bill is currently being considered by the Environment Committee. This legislation would provide Kāinga Ora with the powers it needs to undertake complex development projects including land assembly, land acquisition, infrastructure designation, consenting, and planning. We heard that these powers are currently held by a number of different entities. HUD said that centralising these powers would speed up the development process which is currently complex and slow.

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Appendix

Committee procedure We met on 20 November 2019 and 4 March 2020 to consider the annual review of the Ministry of Housing and Urban Development. We heard evidence from the Ministry of Housing and Urban Development and received advice from the Office of the Auditor- General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry of Housing and Urban Development).

Ministry of Housing and Urban Development (Responses to written questions).

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2018/19 Annual review of the Ministry of Social Development

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Ministry of Social Development ...... 2 Summary of financial and audit results ...... 2 Improving employment outcomes...... 3 Housing support ...... 4 Engagement with Māori ...... 5 Culture change at MSD ...... 5 Debt write-offs ...... 6 Appendix ...... 7

Gareth Hughes Chairperson 603

2018/19 ANNUAL REVIEW OF THE MINISTRY OF SOCIAL DEVELOPMENT Ministry of Social Development

Recommendation The Social Services and Community Committee has conducted the annual review of the Ministry of Social Development for 2018/19, and recommends that the House take note of its report.

About the Ministry of Social Development The Ministry of Social Development (MSD) provides services and support to people in the community, and advises the Government about social policy. MSD describes its purpose as helping New Zealanders to be safe, strong, and independent. Its main functions include:

 providing financial assistance, including benefits, superannuation, accommodation costs, child-related benefits, and student support  providing employment and housing support and services  assessing eligibility for housing assistance  designing and funding community services  providing policy advice on a wide range of social issues. MSD is continuing to adapt to changes in its structure over recent years. On 1 April 2017, Oranga Tamariki—Ministry for Children took over various functions relating to children and families. On 1 October 2018 the new Ministry for Housing and Urban Development (HUD) took over the majority of responsibility for social housing. MSD retains responsibility for assessing eligibility for public housing, managing the housing register, and supporting clients with emergency and some other forms of housing assistance.

Summary of financial and audit results Total revenue for MSD in 2018/19 was $1.043 billion, compared to $1.016 billion in the previous year. Total expenditure was $1.024 billion, resulting in a $19 million surplus. This compares to a surplus of $28 million in 2017/18.

Audit results The Auditor-General graded all three types of systems and controls as “good” (the management control environment, the financial information systems and controls, and the performance information and associated systems and controls). The ratings were unchanged from the previous year and include some recommendations for improvement.

Unappropriated expenditure During the year under review, MSD incurred unappropriated expenditure in regard to Winter Energy benefit payments. This will be validated through the Appropriation (2018/19

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Confirmation and Validation) Bill. Other relevant legislation has already been amended to mitigate the risk of it reoccurring.

Improving employment outcomes Success of employment initiatives We note that in 2018/19 MSD had nearly 25,000 clients participating in various employment programmes. We asked about the success of the various employment initiatives. They include Oranga Mahi, Mana in Mahi, Limited Service Volunteer (LSV), and Flexiwage, among others.

Oranga Mahi is a trial aimed at people who have significant health and disability conditions. Questions were raised about how many people were still in employment after 6 months. MSD acknowledged that the results have been less than hoped for. Of 348 people enrolled, 91 completed the programme and half of them went on to employment or training. It will continue to trial the initiative while working on improvements.

Mana in Mahi Mana in Mahi is a programme developed to help 2,000 young New Zealanders (particularly 18–24 year olds) find and maintain employment, while also receiving formal industry training and qualifications.

MSD informed us that even though the dropout rate for Mana in Mahi is around 35 percent, only half of those who drop out are going back on the benefit. The other half generally go into other work or other programmes.

We asked whether MSD is recording the outcomes of the Mana in Mahi programme. We were informed that, as the official programme is only in its infancy, there is limited data available to assess its success and sustainability. In time, more comprehensive results will be available.

Employment case management We asked what else MSD is doing to help people maintain employment. MSD said it has funding for an extra 170 case managers, rising to 263 in 2020. They will primarily undertake “work-focused” case management, as opposed to working on general hardship assistance.

MSD said it is confident that the new case managers will enable it to improve employment outcomes by working more proactively with clients. In recent times it had lost capacity to engage proactively with clients as changes in the economy and housing pressures have led to more people on benefits. We heard that, since the increase in staff, MSD has seen a 13.5 percent increase in the number of people exiting the benefit system to employment, compared with the previous year.

Overlapping work of case managers We asked MSD why the new case managers still have to spend time administering hardship assistance, since their purpose is employment-focused. MSD said there will always be an element of administrative work or hardship assistance involved with any case manager, as clients often need help in multiple areas. To get someone into employment, MSD often has

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2018/19 ANNUAL REVIEW OF THE MINISTRY OF SOCIAL DEVELOPMENT to address the emergency needs first (such as housing and food) so that the individual is in a more stable position to think about work. In addition, MSD said it is seeing an increase in the number of clients with mental health conditions, addictions, or violent family circumstances. This also affects the work of the case managers.

Engagement with clients MSD acknowledged that its general engagement rate with clients has dropped, for the same reasons that proactive employment work has decreased. However, not everyone in the benefit system requires individual case management. For example, people receiving a student loan often have little direct contact with MSD. Instead, MSD focuses its resources where it can make the most difference. For example, it works proactively with people who seem at risk of staying in the system for a long time.

In addition to the extra case managers, MSD has been taking other steps to increase engagement and employment outcomes:

 It has increased its focus on employment expos. This targets a wider audience who are not in contact with MSD but who are looking for work.  It is increasing its digital capabilities to help people get into work, and to provide ongoing support.  It is continuing investment in industry partnerships, at both a national and regional level. MSD believes that working alongside industry is a key part of improving employment outcomes.  It is self-reviewing and adapting its programmes to become more successful. For example, with Mana in Mahi MSD saw a higher attrition rate among participants who went into the forestry industry due to the long commutes, the hard work, and the long days. In response, MSD is making sure it puts participants into work that fits the individual, as opposed to any available job. However, it notes that sometimes getting a participant into an available job is a stepping stone to a more suitable job.

Housing support We asked MSD what it is doing about trends in the public housing register. We note that the waitlist is now at about 14,000, compared to about 10,000 at our last annual review. We heard that, with the pressures on accommodation around the country, it is understandable that the waitlist for public housing is increasing rapidly. In response, MSD received funding to employ 68 case managers to help people who need emergency housing. It is also encouraging people to come forward sooner about any housing issues. It wants to help people retain their current housing rather than getting to the point of requiring emergency housing.

We also enquired whether other more creative options have been explored, such as putting the money used for emergency housing grants towards deposits on homes. MSD said that would be a question for the Ministry of Housing and Urban Development. We acknowledge the separate roles of the entities, but we note that MSD and HUD work closely together and frequently interact. We therefore hope to see this issue considered further between the two entities. 4

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Engagement with Māori We asked how MSD is enhancing its relationships with Māori, and what feedback it receives. MSD explained a number of things it is doing:

 It has launched Te Pae Tata, a Māori strategy and action plan that uses understanding of tikanga and te reo Māori to support Māori.  It developed a Te Ao Māori capability framework.  It introduced Te Rito modules for staff to access.  It launched Kimihia, a digital app to help staff improve their te reo Māori and tikanga knowledge.  It is drafting a te reo Māori language plan.  It has held workshops to teach staff about the historical relationships between the Crown and Māori. This has initially been directed at managers but will be extended throughout the organisation. In addition to this internally focused work, MSD is also working with hapū and iwi across the country, and with other Crown agencies to increase positive engagement with the Māori community.

Benefit trends of Māori We asked why there has been a sharp increase in the number of Māori receiving the three main benefits. MSD said that the number of people increased for all ethnic groups in 2018/19. The percentage increase in Pacific peoples and people of other ethnicities receiving the three main benefits was similar to that of Māori.

Culture change at MSD We are aware of negative media reports about MSD’s treatment of beneficiaries, and the suggestion that culture change is needed at the ministry. MSD said that most of its staff act professionally and care about people who use its services. However, it acknowledged that it can do better. We were told about a number of initiatives to improve the service culture.

MSD has implemented a system called “Heartbeat” which gathers feedback from people who have interacted with it. We heard that 10 percent of people asked to give feedback using Heartbeat are doing so, and that MSD’s average score is 8.6 out of 10. MSD said it uses this feedback to make changes to its services. An example is the changes it has made to its contact centres as a result of feedback from Heartbeat. If someone calls a contact centre and has to wait for over 10 minutes to speak to an operator, MSD now calls them back when their place in line is reached so that they do not have to wait on the phone.

Service centres MSD is redesigning its service centres to make them more welcoming and user-friendly. Changes to 67 service centres are scheduled to be completed by 30 June 2020. We heard that MSD’s changes aim to treat clients with dignity while creating innovative solutions to how service centres operate.

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We heard that people who use the centres were involved in the design process. MSD received feedback from Māori and Pasifika clients that service centres should be more private. The resulting changes have been well received. Other improvements to the amenities at centres include access to play areas, toilets, water, and better seats. MSD is also making changes to security at service centres; clients no longer need to present ID to security guards when visiting centres; and MSD is considering changing the uniforms security guards wear. MSD said that it considers the security guards at its centres to be part of its staff and it is working to integrate them into its business.

Debt write-offs We asked MSD about the significant increase in the amount of debt it had to write off in 2018/19 compared to previous years. We were told that the majority of debt that is written off (around 92 percent) relates to people who have either passed away or have been declared bankrupt, where there are no assets to recover. A small percentage is written off as office error, and the remaining debt is written off for other reasons such as fraud. In relation to the small percentage of fraud cases, MSD informed us that it is taking more of an early prevention approach to help people comply earlier on.

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Appendix

Committee procedure We met on 4 December 2019 and 4 March 2020 to consider the annual review of the Ministry of Social Development. We heard evidence from the Ministry of Social Development and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Ministry of Social Development).

Ministry of Social Development (Responses to written questions).

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2018/19 Annual review of Oranga Tamariki––Ministry for Children

Report of the Social Services and Community Committee

February 2020

Contents Recommendation ...... 2 About Oranga Tamariki—Ministry for Children ...... 2 Financial overview ...... 2 Implementing the changes to the legislation ...... 3 Building stronger partnerships with iwi ...... 4 Developing transition support services ...... 5 Increasing remuneration for social workers ...... 6 Developing trauma-informed practice ...... 6 Developing a Pacific strategy ...... 6 Appendix ...... 7

Gareth Hughes Chairperson 610

2018/19 ANNUAL REVIEW OF ORANGA TAMARIKI––MINISTRY FOR CHILDREN

Oranga Tamariki—Ministry for Children

Recommendation The Social Services and Community Committee has conducted the annual review of Oranga Tamariki—Ministry for Children for 2018/19, and recommends that the House take note of its report.

About Oranga Tamariki—Ministry for Children Oranga Tamariki—Ministry for Children was established in April 2017 after an expert advisory panel recommended an overhaul of the existing child care and protection system. Originally named “Ministry for Vulnerable Children, Oranga Tamariki”, the ministry took on the functions of the Ministry of Social Development’s Child, Youth and Family business unit, children’s teams, and a large portion of the Community Investment teams.

The ministry’s new operating model is built on the following principles:

 A child-centred system that puts the child at the heart of decision-making.  High aspirations for tamariki Māori.  An approach that moves away from a reactive focus and toward intervention and investment into the wellbeing of a child across their lifetime.  Strategic partnerships.  The development of a best-practice framework.  Engaging all New Zealanders in growing healthy communities that support children and young people. As of 30 June 2019, there are 6,450 children and young people in the ministry’s care, 100 more than the previous year.

The ministry employed 4,021 full-time-equivalent staff in 2018/19, a 5.1 percent increase from the previous year. Gráinne Moss is the ministry’s chief executive.

Financial overview For 2018/19, the ministry received revenue of $994 million, compared with $866 million in 2017/18.

The ministry’s expenditure in 2018/19 was $966 million, compared with $856 million in 2017/18. The ministry’s main expenses are personnel costs, which were $363 million in 2018/19. This was over 20 percent more than the previous year.

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Budget boost to effect legislative changes The Oranga Tamariki Act 1989 (formerly the Children, Young Persons, and Their Families Act) introduced significant legislative changes that came into effect on 1 July 2019. They include:

 the introduction of National Care Standards  the extension to 17-year-olds of the statutory care and protection system  provisions to allow young people to remain living with a caregiver until the age of 21  transition supports to be available to age 25  extension of the youth justice system to include most 17-year-olds. The new legislation also requires the ministry to reduce disparities and improve outcomes for Māori.

Budget 2019 allocated more than $1.2 billion of new funding over four years to the ministry to deliver child-centred services that meet new legislative requirements.

Implementing the changes to the legislation We were interested in how the ministry has been managing the challenges and risks associated with the changes to the Oranga Tamariki Act from July 2019.

Extending the youth justice system The ministry told us that its biggest concern has been to ensure it could extend the youth justice system to include 17-year-olds, observing that similar changes had failed in other jurisdictions. The ministry had planned carefully, knowing there could be up to a 40 percent increase in youth justice users following the legislative changes. It worked hard to build capacity for community-based remand so that young people were not being disconnected from their communities or clustered into prison-like institutions.

We heard that the ministry has established eight community-based remand homes around the country, including Mahuru in Kaikohe. Mahuru is a youth remand service developed by Ngāpuhi Iwi Social Services with ministry support. The service is for tamariki Māori in who commit a crime and need to spend time in a safe and stable environment while they await their court hearing. In January 2019, Ngāpuhi Iwi Social Services received the Indigenous Service Award at an indigenous affairs conference held by the Australia and New Zealand School of Government in Melbourne. The award recognises innovative work in designing services for indigenous communities. The ministry hopes to co-design similar models with other iwi and community-based providers throughout New Zealand.

Partnering to optimise social change The ministry said that its other greatest challenge in bringing the new legislation into effect is maximising its opportunities to partner with communities and other agencies to transform the system. The children that come into its care continue to face concerning levels of harm, including domestic violence, alcohol abuse, and mental health challenges. These harms cannot be addressed by a single government agency.

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Building stronger partnerships with iwi Hawke’s Bay practice review In May 2019, the ministry planned to uplift from its mother and take into care a six-day-old baby at Hastings Hospital. After media released footage of the attempt, the ministry launched an internal review into its uplift practices. The review examined the quality of the ministry’s assessment and planning, the methods it used, how it worked with other agencies, and its engagement with whānau, iwi, and other professionals and stakeholders.

The review was undertaken by the Chief Social Worker, with independent oversight from the Office of the Children’s Commissioner and a representative of Ngāti Kahungunu. It found that safety concerns for the baby meant the ministry did the right thing to get involved. However, mistakes were made in how it worked with the family and other partners. Following the review, the ministry issued an apology and announced immediate changes to ensure better oversight of how children are taken into care.

Entering into partnerships with iwi Section 7AA(2)(c) of the Oranga Tamariki Act 1989 requires the ministry to develop strategic partnerships with iwi and Māori organisations, including iwi authorities. We asked how the ministry determines whether it enters into a strategic partnership.

The ministry told us it considers three criteria when deciding on a strategic partnership. First, it investigates whether the iwi or Māori organisation has the mandate to be able to engage with it from a Treaty perspective. Second, it considers whether the iwi or Māori organisation has the capability or potential to implement the provisions of section 7AA(2)(c). These provisions, for example, require the ministry to seek partnerships that create opportunities to improve outcomes for Māori, provide robust information and advice, and can accept delegated responsibilities. Third, the ministry seeks strategic partners who have considerable potential to influence outcomes. For example, its current four strategic partners represent over 50 percent of the Māori children in care through whakapapa.

Monitoring the effectiveness of its partnerships with iwi We are pleased that the ministry has been growing partnerships with iwi and Māori organisations. Its work has included:

 investing $4.7 million over the last year in partnerships with NGOs, iwi, and Māori organisations  signing new partnerships with three iwi  hosting a nationwide hui of iwi and Māori organisations. We enquired how the ministry would monitor the effectiveness of its partnerships. It said that quality assurance of strategic partnerships is monitored on several levels. The first level of assurance is working with the iwi partner to co-design performance measures for the partnership. These performance measures are unique to the agreement as they take into account the outcomes the iwi are seeking to achieve.

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A second level of assurance is evaluating whether strategic partnerships are reducing disparities for all Māori tamariki across New Zealand. Section 7AA of the Oranga Tamariki Act 1989 requires the ministry to set measurable outcomes to reduce disparities between Māori and non-Māori and to report annually on the steps taken and their effects. The ministry’s first report will be released after 2019/20.

The ministry said its relationship with Waikato-Tainui is one example of an effective partnership. An iwi support adviser works with ministry staff to implement the supports and services that whānau need, so that tamariki do not need to be brought into care. In the past 19 months, only two mokopuna from Waikato-Tainui have come into state care.

Building day-to-day engagement with iwi We appreciate the ministry strengthening its partnerships with iwi. On top of this, we asked how much involvement iwi are able to have in decision-making at ground level, such as about the placement of children in care.

The ministry said its strategic partnerships focus on the overall system and how it can be improved. However, it is working alongside iwi to understand what engagement they would like at a day-to-day level. This varies across sites depending on the capacity and capability of iwi and ministry staff. We heard that some iwi sit on interview panels, work with ministry staff to help them understand the whakapapa of tamariki who come to their attention, lead and facilitate family conferences, and deliver services, such as Family Start in Te Tai Tokerau.

Some of us are concerned by reports from some iwi that they remain frustrated by limited participation in day-to-day decision-making. The ministry said it would work to facilitate better participation where it learns that this is happening.

Developing transition support services Approximately 600 young people aged between 15 and 17 leave the ministry’s care every year. In the past, these young people received little financial or social support, but as of 1 July 2019, the ministry has developed a range of new transition supports and services. These services have been co-designed with more than 1,000 young people and will see every eligible young person having a transition worker to maintain regular contact up to the age of 21. They will also be supported to remain (or return to) living with their caregiver between 18 and 21; and will be able to get advice and assistance from the ministry after they leave care until they turn 25.

We asked for an update about the provision of transition services. The ministry told us that currently just under 300 young people are receiving specialist transition support. All of its supported accommodation has been filled. It had been planning to increase this type of accommodation significantly over the next four years, but it is now bringing forward some of that investment. It has also needed to employ more social workers.

We heard that the ministry has been particularly excited by the arrangements it has developed with other government departments to support this cohort. They include driver licensing initiatives, apprenticeship opportunities, and teen parent programmes.

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The ministry receives real-time feedback about the success of the services from its youth advisory panel. A comprehensive review of the services’ effectiveness is scheduled to be completed in three years’ time.

Increasing remuneration for social workers In December 2018 social workers employed by the ministry were awarded a 30.6 percent pay increase over two years in an equal pay settlement affecting 1,300 employees. Some of us noted that this pay increase had made it increasingly difficult for NGOs to recruit and retain staff because they could not pay as much as the ministry.

The ministry accepted that the pay equity settlement had created some tension in the system. It said that the pay settlement addressed a fundamental undervaluation of women and it was proud to have achieved a settlement that recognises the skilled, challenging, and life-changing work that social workers do. Additionally, although their jobs are not necessarily more dangerous or challenging than the social workers employed by NGOs, the ministry’s social workers do carry the burden and responsibilities of statutory powers.

The ministry argued that the historic undervaluation of women’s work also needed to be addressed in the NGO sector. It said that it continues to support social workers in the NGO sector by ensuring appropriate funding for the services they deliver, and increasing long- term funding from 29 percent to 80 percent of their contracts to give NGOs greater confidence.

Developing trauma-informed practice The ministry’s new Practice Framework recognises the impact of adverse life experiences on children and young people as it helps them to recover and be happy and healthy. We heard that staff are being given resources and training to recognise the significance of a child’s psychological and emotional needs on their wellbeing. The training encourages staff to be much more aware of trauma in their interactions and assessments of whānau, and equips them with strategies and tools to navigate trauma-saturated situations.

In 2019 the ministry also introduced trauma training for caregivers, recognising that many caregivers deal with tamariki who have experienced trauma. Delivered through group sessions, coaching, peer support, and online training, the programme is based on a mātauranga Māori bicultural approach, and focusses on restoring the mana of tamariki in care.

Developing a Pacific strategy We are pleased that the ministry has developed a free interactive mobile app—Talanoa Mai—to support staff and caregivers in their day-to-day work with Pacific children, young people, and their families. The app contains the ministry’s Pacific strategy and guides users through the various unique cultural heritages and identities of Pacific peoples.

The ministry told us that children with Pacific whakapapa are one of its focus cohorts this year. It is currently working in partnership with the Pacific panel to do its first piece of research into the experience of Pacific young people in care.

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Appendix

Committee procedure We met on 11 December 2019 and 19 February 2020 to consider the annual review of Oranga Tamariki—Ministry for Children. We heard evidence from the ministry and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata'a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on Oranga Tamariki—Ministry for Children).

Oranga Tamariki—Ministry for Children (Responses to written questions).

7 616

2018/19 Annual review of Ōtākaro Limited

Report of the Governance and Administration Committee

March 2020

Contents Recommendation ...... 2 About Ōtākaro Limited ...... 2 Financial and performance overview ...... 2 Governance and management ...... 2 Central Christchurch anchor projects ...... 3 Appendix ...... 5

Dr Jian Yang Chairperson 617

2018/19 ANNUAL REVIEW OF ŌTĀKARO LIMITED

Ōtākaro Limited

Recommendation The Governance and Administration Committee has conducted the annual review of Ōtākaro Limited for 2018/19, and recommends that the House take note of its report.

About Ōtākaro Limited Ōtākaro Limited is a Crown-owned company that was established in 2016 under Schedule 4A of the Public Finance Act. It took over some of the functions previously carried out by the Canterbury Earthquake Recovery Authority.

Ōtākaro has two purposes: delivering Crown-led anchor projects in central Christchurch by providing procurement, design management, and construction management services, and divesting Crown land and assets. In doing so Ōtākaro is required to balance good commercial outcomes against the Crown’s regeneration objectives for Christchurch.

Financial and performance overview Ōtākaro reported a deficit of $6.3 million for the year ending 30 June 2019, considerably less than in previous years. In 2018/19, total revenue was $73.7 million, compared with $129.7 million in 2017/18. Total expenditure was $80.4 million ($159.8 million in 2017/18). A key reason for this deficit was the recognition of an $11 million provision to transfer assets to Christchurch City Council at nil value.

The Auditor-General issued a standard audit report. The auditors assessed Ōtākaro’s management control environment and financial information and supporting systems and controls as “very good”, with no recommendations for improvement. Ōtākaro’s performance information and supporting systems and controls were assessed as “good”, with some improvements recommended.

We were pleased to learn from the Auditor-General that Ōtākaro’s project management disciplines are of a very high standard.

Governance and management The senior leadership of Ōtākaro has undergone substantial change in the last two years. The company’s initial chief executive, Albert Brantley, resigned in August 2018 and was replaced by John Bridgman. In December 2018 the company’s chairperson, Ross Butler, stepped down. Ōtākaro’s board is now chaired by Corinne Haines, who has served as a board director since August 2016.

We asked for an assessment of the health of Ōtākaro and the efficiency and effectiveness of its operations. The chief executive told us that the company has very good people, systems, and processes, which is evident in the way it is managing its projects, land divestment, and general operations. We asked whether there had been any significant change in the

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2018/19 ANNUAL REVIEW OF ŌTĀKARO LIMITED company’s priorities or in the way it operates as a result of its new leadership. We were told that Ōtākaro’s key priority continues to be to deliver projects on time, to budget, and in line with quality expectations.

Central Christchurch anchor projects Metro Sports Facility The Metro Sports Facility is intended to be the largest aquatic and indoor recreation and leisure venue of its kind in New Zealand. We discussed the length of time it has taken to complete the groundworks, and asked for an update on the facility and an expected completion date. We were told that the work is due to be completed at the end of 2021 and is within budget. We asked if this target was likely to be met, and were told that the project is currently within a month of schedule.

The East Frame The East Frame residential area is to be a new housing area comprising 900 homes in the heart of the central city, built around Rauora Park. The goal is for the East Frame to accommodate 10 percent of CBD residents. At the time of our hearing, Fletcher Living had sold 55 of the 172 completed houses in the area.

We asked whether Ōtākaro was disappointed with the number of sales. We were told that sales have picked up significantly over the last five months as the new homes have been completed and potential customers can view them. Ōtākaro has also broadened the sales avenues, with Harcourts now involved in selling some of the townhouses. This has resulted in much greater reach and awareness of the project.

We discussed what is being done to bring people into the Christchurch CBD. Ōtākaro informed us of its work with Christchurch City Council and their programmes for attracting people to the central city. Ōtākaro has also been working with Fletcher to ensure that construction in the months ahead is aligned with what the market wants. At the moment, the two areas with the most interest are rental accommodation in the CBD and 2–3 bedroom townhouses with a small amount of private space. The next rounds of houses to be built will focus on these two areas.

Multi-use arena Planning work is being done on a multi-purpose sports and entertainment precinct for central Christchurch. The project is to be co-funded by the Crown and Christchurch City Council. We asked for an update on the project, and how Ōtākaro may be involved.

No decision has been made about how the multi-use arena will be funded. The investment case is being led by Christchurch City Council. At this stage, it is unclear whether Ōtākaro will be involved in the project.

Te Pae Christchurch convention centre Ōtākaro Limited is responsible for the design, construction, and operation of the Te Pae Christchurch Convention Centre. Te Pae will be a world class business events facility supported by the adjacent central city retail and hospitality sectors. It will have the capacity

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2018/19 ANNUAL REVIEW OF ŌTĀKARO LIMITED to host 2,000-person events as well as simultaneous smaller events. We note that the plan is for four hotels to be built alongside the convention centre. We asked Ōtākaro to elaborate on the timing of their construction.

We were told that there is flexibility as to how the hotels proceed. The intent is to prioritise building a five star hotel to support Te Pae, which would make it easier to attract high-end, high-yield, and international conferences. Decisions still need to be made around the design and capacity of the hotel. There is interest in building a four star hotel in conjunction with the five star hotel. The intent is to get construction under way in July 2020 and to have the five star hotel completed by April 2023 at the latest.

There is also agreement with Carter Group Limited for the construction of a further two hotels opposite the Central Library. Their timing is more flexible, but Ōtākaro would like to start work on these prior to 2023.

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Appendix

Committee procedure We met on 11 December 2019 and 11 March 2020 to consider the annual review of Ōtākaro Limited. We heard evidence from Ōtākaro Limited and received advice from the Office of the Auditor-General.

Committee members Dr Jian Yang (Chairperson) Ginny Andersen Kanwaljit Singh Bakshi Sarah Dowie Hon Willow-Jean Prime Lawrence Yule

Sarah Dowie replaced Hon as a member of the Governance and Administration Committee on 19 February 2020.

Hon Nikky Wagner participated in some of this review.

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz

Office of the Auditor-General (Briefing on Ōtākaro Limited).

Ōtākaro Ltd (Responses to written questions).

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2018/19 Annual review of the Social Investment Agency

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Social Investment Agency ...... 2 Audit results ...... 2 Cost of name change to Social Wellbeing Agency ...... 3 Data protection and use policy ...... 3 Social wellbeing approach ...... 4 Working with The Southern Initiative ...... 4 Capability of the agency ...... 5 Evaluation of place-based initiatives ...... 5 Appendix ...... 7

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2018/19 ANNUAL REVIEW OF THE SOCIAL INVESTMENT AGENCY

Social Investment Agency

Recommendation The Social Services and Community Committee has conducted the annual review of the Social Investment Agency for 2018/19, and recommends that the House take note of its report.

About the Social Investment Agency The Social Investment Agency is a departmental agency hosted by the State Services Commission. It was established on 1 July 2017.

The agency is funded from Vote State Services. In 2018/19, its total revenue was $15.490 million. Its total expenses were $12.546 million, resulting in a surplus of $2.944 million.

Dorothy Adams is the acting chief executive of the agency.

Changing role of the agency The chief executive explained how the agency’s role has changed over the past several years. It was established in 2017 to implement the previous Government’s social investment approach. This approach focused on investing sooner and more effectively to improve long- term social outcomes. The agency’s role was to support social sector agencies to adopt that approach and to provide the infrastructure, tools, and methods to help them do so.

In 2018, the Government asked the agency to consult on a proposed approach, known as improving social wellbeing. The agency was also asked to seek people’s views about their data being collected and how it was being used. The agency sought this feedback in the second half of 2018.

The Government adopted its social wellbeing approach and approved a policy for data use and protection in September and October 2019. On 20 February 2020, the Minister for Social Development announced that the agency will be renamed the Social Wellbeing Agency. The name change will come into effect on 19 March 2020.

Audit results The Auditor-General did not conduct a separate audit for the Social Investment Agency. The audit results for its host agency, the State Services Commission, were reported to the Governance and Administration Committee. The Auditor-General assessed its management control environment and financial information and supporting systems as “very good”. No improvements were recommended. He assessed the commission’s performance information and supporting systems and controls as “good”, with some improvements recommended.

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Cost of name change to Social Wellbeing Agency The agency explained that the costs for rebranding to the Social Wellbeing Agency fall in two parts. The cost for the actual rebranding, which includes items like signage inside the building, is about $23,000. The cost for technical details, such as changing email addresses and legal details, is about $75,000. These will be part of its 2019/20 expenses.

Data protection and use policy Feedback about the collection and use of data The agency held face-to-face meetings around New Zealand to understand people’s views about their data being used and collected. It also surveyed about 800 people online. The chief executive said that people are generally comfortable with their personal information being used provided that the conditions of use are clearly stated. People also want to understand the conditions and be involved in creating them.

The agency said it was very careful to ensure that the discussions were not biased either for or against data collection. It sought to understand people’s views across a set of topics that arose from research the agency had completed over the past several years.

We heard that people’s main response was that the purpose of the data collection needs to be very clear. People need to understand why information is being collected from them, what it is being used for, and whether anything will happen as a result. The agency developed its data use and protection policy based on this feedback. The policy, which was endorsed by Cabinet in November 2019, has been published on the agency’s website.

Privacy of data We are interested in how the privacy of data will be protected, noting previous concerns from the sector about data gathering. The agency said it hopes that individual government agencies will implement the policy and it will work with them to do so. However, the individual government agencies will decide how they collect, store, and use any information that they collect.

The agency told us that it recognised early in the process that some data is particularly sensitive. Throughout the development of the policy, the agency has had a working group to help it understand different perspectives. These perspectives included the Women’s Refuge, NGOs, and community representatives representing Māori, Pacific, and disabled people.

The agency emphasised that the policy asks people to be clear about why they are considering collecting people’s information. People also need to ensure that they only collect what is needed following careful analysis, discussion, and agreement with the affected communities. We were told that another important factor is that only people who genuinely need to use data collected for the purposes stated should be able to see it.

Implementation of the policy The agency said that a number of organisations have already used the data protection and use policy and applied it to their work. We were pleased to hear that they have found the policy to be well structured, with useful advice.

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Implementation of the policy began in early 2020. The agency told us that four of the larger government agencies have become members of a foundational group. It also hopes to invite 40 to 50 NGOs to join. The group, alongside the agency, will be the “front leaders”, learning collectively as the policy is implemented.

Some of us expressed concern about duplication among larger government agencies. We note that the agency has a significant role coordinating the implementation of the policy in a strategic and measured way. Given the scale of this task, we are interested in a timeline. The agency told us that it was asked to provide cross-sector advice after the Cabinet paper was approved. It was also asked to lead work programmes on behalf of the social sector system, where appropriate. The agency is working with the social wellbeing board, which consists of the chief executives for the social sector agencies, to identify some programmes of work. The agency said that it would like to have agreed the first programme of work by April 2020.

Social wellbeing approach We asked whether the agency learnt during its consultation what people are seeking from a social wellbeing approach more broadly. The agency explained that the most common response about social wellbeing was that communities need to be involved. We heard that agencies often make assumptions about the meaning of people’s wellbeing without involving them from the beginning.

The agency said that people are also asking for a much broader understanding of wellbeing and how it is measured, and a more collective approach to measuring success. This would involve the Government, service providers, and users of services collaborating to understand what they all need to know and measure. They would then work together on the measures of success and a broader set of measures.

We asked what criteria the agency will use to measure success. The chief executive told us that the measurement frameworks will vary across programmes. This is because they have different information needs. For example, quantitative measures of success can be obtained for some programmes, while for others they cannot.

Working with The Southern Initiative The agency described its partnership with The Southern Initiative (TSI) as very successful. TSI is a group within the Auckland Council, established to take a more innovative approach to improving service provision for families in South Auckland. TSI’s “early years challenge” aims to ensure that young families and whānau in South Auckland are getting the best service support. It uses the Growing Up in New Zealand data to understand the demographics of the communities. It has also considered science to understand the stresses that some families face.

We heard that TSI approached the agency to use its expertise to investigate the Integrated Data Infrastructure (IDI).1 The agency used the IDI to construct timelines of individuals and

1 The Integrated Data Infrastructure is a large research database that holds data about life events. The data comes from government agencies, Stats NZ surveys, and NGOs. The data is linked together to form the IDI. 4

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2018/19 ANNUAL REVIEW OF THE SOCIAL INVESTMENT AGENCY whānau in South Auckland who were having a baby. It then, along with TSI, spoke to some of the whānau who were in that data to understand their experiences.

The agency has published a report on the work, which contains seven insights. It has been talking to some government agencies about working with them to consider how the social sector system can respond to the findings.

The agency considers that the work with TSI reflects where the social wellbeing approach is going. Through this work, the agency said that it learnt that lived experiences are a legitimate and necessary information source for understanding how to design policies and programmes. The agency told us that the work also reflects that it needs to partner with people working on the front line.

Capability of the agency The agency describes itself as small, with about 45 permanent roles, not all of which are presently filled. It also employs people in non-permanent roles when it needs certain expertise. The agency consists of:

 a data analytics team  a data team which is implementing the Data Exchange2 and understanding the tools it needs to better use data  an insights team that works with the analytics team and with government agencies  a sector engagement team, which works with partners such as TSI to identify shared opportunities to learn together to make improvements. The chief executive considers that the agency’s biggest challenge is that it is small but there is a lot of work that it could be doing. She said that the agency needs to focus on the “critical few” that will have the biggest influence. We heard that another challenge for the agency is to get embedded into the social sector system so that other agencies understand its role.

Evaluation of place-based initiatives We note that the agency has a contract with Litmus Limited to evaluate the place-based initiatives (PBIs).3 The contract value is $487,475. The agency told us that it received funding in Budget 2019 to commission an evaluation of the PBIs. Litmus was chosen from a competitive process.

The evaluation was originally in two parts—qualitative and quantitative. However, the agency found that the numbers were too small to perform a robust quantitative assessment.

Litmus has completed the qualitative component of the evaluation. It found that the PBIs are having some success. This information has been communicated to the two PBIs and the Ministry of Social Development, which is the lead agency for the PBIs.

2 The Data Exchange is technology that allows data to be moved more safely and effectively around the social sector. 3 Place-based initiatives were established to bring local social sector leaders together to address social issues and improve outcomes for children, young people, and their whānau.

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Within the same contract, Litmus is now undertaking work on determining some agreed measures of success for place-based initiatives. The agency said that this will provide clarity for the PBIs, the people they work with, agencies, and the Government. We heard that Litmus has done a good job and the PBIs have liked that Litmus has involved them in the evaluation. We look forward to receiving an update about the measures of success.

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Appendix

Committee procedure We met on 4 and 18 March 2020 to consider the annual review of the Social Investment Agency. We heard evidence from the agency and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata’a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Social Investment Agency).

Social Investment Agency (Responses to written questions).

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2018/19 Annual review of the Social Workers Registration Board

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Social Workers Registration Board ...... 2 Mandatory registration for social workers ...... 2 Measuring the SWRB’s performance ...... 4 Becoming a modern regulator ...... 5 Increasing the number of Māori and Pacific social workers ...... 5 Appendix ...... 6

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2018/19 ANNUAL REVIEW OF THE SOCIAL WORKERS REGISTRATION BOARD

Social Workers Registration Board

Recommendation The Social Services and Community Committee has conducted the annual review of the Social Workers Registration Board for 2018/19, and recommends that the House take note of its report.

About the Social Workers Registration Board The Social Workers Registration Board (SWRB) was established as a Crown entity under the Social Workers Registration Act 2003. It is the regulatory authority responsible for the registration of social workers. The SWRB’s primary function is to protect the safety of the public by ensuring that registered social workers are competent, fit to practise, and accountable for the way they practise. The SWRB also aims to enhance the professionalism of social workers.

Sarah Clark is the chief executive of the SWRB. Shannon Pakura took over from Shayne Walker as chair of the SWRB board in February 2019.

We expressed our appreciation for the work of social workers throughout New Zealand.

Financial overview and audit results In 2018/19, the SWRB’s total revenue was $2.335 million, about 5 percent more than in 2017/18. Its total expenditure was $2.464 million, resulting in a $129,000 deficit (before finance income).

The SWRB has forecast that revenue will double in 2019/20 and expenses increase by about 80 percent, reflecting the costs involved in moving to mandatory registration.

The Auditor-General’s ratings for the SWRB’s systems and controls were unchanged from the previous year. Its management control environment, financial information and supporting systems and controls, and performance information and supporting systems and controls were all assessed as “good”. The Auditor-General recommended some improvements, including in monitoring compliance with legislation and enhancing its reporting.

Mandatory registration for social workers In 2019, amendments to the Social Workers Registration Act made registration mandatory for all people practising as social workers. They must be registered by 27 February 2021 and hold a current practising certificate.

The SWRB has started an information campaign to keep the sector informed about the changes and help with the transition from voluntary to mandatory registration. It considers that its top risk for the transition is that not all people who use the title of social worker will have undertaken the process to become registered by the due date.

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We acknowledged the challenge and work ahead of the SWRB as it moves to mandatory registration. We assured the SWRB that it has the support of Parliament, which recognises the importance of its regulatory role.

Funding the transition to mandatory registration Prior to 2018/19, the SWRB was almost exclusively funded by social workers’ fees to practise and other fees. These accounted for 98 percent of its funding in 2018/19. Budget 2019 allocated funding of $2.358 million over four years to support the establishment of mandatory registration. We asked whether this funding will be an ongoing requirement or whether the SWRB anticipates that its fees will cover costs in the future.

The SWRB explained that it has been set up under a full-cost-recovery model so it anticipates that it will use fees in the future. However, the SWRB recognises that it is not appropriate for social workers to pay for its Crown entity obligations. Therefore, its Budget bid contained a component for these obligations, which the SWRB expects will be an ongoing requirement. The SWRB observed that the transition period is not the ideal time to test what its baseline should be.

Increase in staff at the SWRB During the period under review, the SWRB had about 10 full-time-equivalent (FTE) staff. We asked about its expected future staffing needs, both during the transition and for business as usual when the mandatory registration period is under way.

The SWRB told us that it now has about 24 FTEs, with the additional FTEs primarily consisting of fixed-term contracts. It considers that this allows it some flexibility to establish what the “new normal” will be in February 2021. The SWRB considers that it will need to operate differently because of the increased size of the register and its transition to being a modern regulator. This means that the SWRB will need to have more than 10.4 FTEs in the future. It believes that it will probably have between 20 and 30 FTEs. However, the SWRB is unable to determine the number until it knows the base size of the register.

Projected numbers for the register We congratulated the SWRB on the number of social workers registered to date, which we understand is about 8,100. We are interested in the SWRB’s projections for the final number.

The SWRB explained that, when it completed its forecasting, it estimated that up to 4,000 social workers could be unregistered. This would bring the number of social workers eligible to be registered to about 12,000. The SWRB acknowledged that it is difficult to predict a final number because information is not compiled about the workforce for social services and social work. Instead, the SWRB’s estimates are from census data and the number of people in education programmes.

The SWRB believes that it is in the “right ballpark”. After discussions with some employers and the sector, it has identified a reasonably significant pool of people who are eligible to be registered but are not.

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Registering as a social worker based on practical experience People without a recognised social work qualification can be registered as a social worker under section 13 of the Social Worker Registration Act 2003. Certain criteria must be met, including a specified level of experience practising social work in New Zealand. This pathway is available until 2024. We asked whether the SWRB has an additional work stream to support those workers to register.

The SWRB told us it is encouraging people who may be eligible through section 13 to apply for registration. It said that the SWRB has made it clear that it will do everything it can to support people through the process.

Partnering with employers to increase registration We are interested in the role of employers in ensuring that their social workers are registered by 2021. In particular, we asked how the SWRB is partnering with employers. The SWRB described this work as happening “slowly but steadily”. It said that it is developing relationships with employers to help them understand the value of being registered. We heard that the SWRB also visits employers when it travels around New Zealand to talk to social workers and students.

The chair told us that the board and the SWRB are using their relationships to access the places that are “hard-to-get”. They aim to demystify the registration process and answer any questions. The work has included talking with Māori and Pacific organisations and the SWRB visiting five Māori NGOs.

Measuring the SWRB’s performance We noted that the SWRB failed to meet several of its performance targets in 2018/19. For example, only 84 percent of eligible registered social workers maintained their registration through a relevant process, against a target of 95 percent. The SWRB explained that the targets were set in its previous statement of intent, and do not fully capture the work it is now doing. It believes its current education and information campaign will help social workers to understand its role and the value in being registered. The SWRB intends to revise its performance measures so it is clearer what it is measuring and recording.

In this context, we asked why new registrations are lower than the number of applications received. We heard that this is because the data merely reflects the number of times the application process is started. It does not mean that applications are being turned down. The SWRB told us that it is transitioning to a new database by the end of 2020, which will help produce more useful data. It said it is confident that the database will be secure, having been through a rigorous process overseen by the board and the Ministry of Business, Innovation and Employment procurement team.

We also noted that the SWRB did not meet its target for employers’ satisfaction with its advice, achieving 82 percent against a target of 90 percent. The SWRB explained that the target was “aspirational” at the time it was set, as some of the mechanisms needed to achieve the target are “just coming into play now”. The SWRB said it is working on improving employer satisfaction by directly engaging with employers. It considers employers one of the key targets for its information campaign. This is because the SWRB will not be successful if

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2018/19 ANNUAL REVIEW OF THE SOCIAL WORKERS REGISTRATION BOARD employers do not fully understand its role. The SWRB said that it hopes to see change next year, as do we.

Becoming a modern regulator We heard that the SWRB intends to move from being a transaction-based, traditional regulator to a modern one that focuses on outcomes and intervenes at a system-wide level. We asked what being a modern regulator looks like in practice. The SWRB explained that, as a regulator, it can use three tools to get people to comply with regulations: support, encouragement, and requirements. The SWRB has been doing a lot of requiring in the past, but as a modern regulator it needs to be providing more support and encouragement.

The SWRB told us that it will still have to “require”. Examples of this include deregistering social workers, revoking practising certificates, and bringing Disciplinary Tribunal proceedings. However, it wants to prevent people failing. The SWRB hopes to achieve this by giving people better information that is informed by trends across the system.

The SWRB explained that it would like to improve its ability to analyse trends in complaints data. For example, in the future it might be able to identify a trend in the number of complaints with an element related to burnout. The SWRB could then develop tools with the sector and employers to prevent burnout rather than waiting for complaints.

We heard that a measure of success may not necessarily be fewer complaints. At present most of the complaints the SWRB receives come from the public. The SWRB said that social workers or employers might approach it more if they have a strong sense of professional identity.

We noted that this work would require significantly more staff, and asked whether this will lead to a fee increase. The SWRB explained that it undertook a funding model review within 2019/20 to ensure that it has sufficient funding for its future expenditure. It expects that it will do this more regularly to ensure that it has sufficient resources.

Increasing the number of Māori and Pacific social workers The SWRB told us that it is very pleased to see an increase in the number of students identifying as Māori who are enrolled in social work practice. It has been discussing how it can increase the number of Māori and Pacific social workers. One priority that the board has set for the SWRB is a piece of work around competence to work with Māori. The SWRB would like to create a system where there is a base expectation of what this entails, with specialist skills also recognised alongside it.

The chair said that she makes an effort to talk to the Māori institutions and Māori social workers from a Māori perspective. She also has discussions with them about the benefits of being registered and how the profession will help them do so. We heard that the board and SWRB are working on how to get all of their people more comfortable with doing this.

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Appendix

Committee procedure We met on 12 February and 18 March 2020 to consider the annual review of the Social Workers Registration Board. We heard evidence from the Social Workers Registration Board and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata'a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Social Workers Registration Board).

Social Workers Registration Board (Responses to written questions).

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2018/19 Annual review of the Tāmaki Redevelopment Company Limited

Report of the Social Services and Community Committee

March 2020

Contents Recommendation ...... 2 About the Tāmaki Redevelopment Company Limited ...... 2 Achievements of the TRC ...... 3 Working with Kāinga Ora on housing redevelopment ...... 3 The Tāmaki Precinct Masterplan ...... 3 The Maybury Green Project ...... 4 Whānau by Whānau ...... 4 Wider lessons for New Zealand ...... 4 Appendix ...... 5

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2018/19 ANNUAL REVIEW OF THE TĀMAKI REDEVELOPMENT COMPANY LIMITED

The Tāmaki Redevelopment Company Limited

Recommendation The Social Services and Community Committee has conducted the annual review of the Tāmaki Redevelopment Company Limited for 2018/19, and recommends that the House take note of its report.

About the Tāmaki Redevelopment Company Limited The Tāmaki Redevelopment Company Limited (TRC) was incorporated on 6 August 2012 and is jointly owned by the Crown and Auckland Council. It was set up to lead a first-of-its- kind urban regeneration programme in the East Auckland suburbs of Glen Innes, Point England, and Panmure. These suburbs are characterised by a youthful community where generations of Māori and Pasifika families live alongside more recent migrants. Significant challenges within the area include many people seeking work and a high number of residents receiving government support. It is also home to a large number of state houses.

TRC’s aim is to transform Tāmaki over the next 20–25 years through co-ordinated economic, social, and housing initiatives in collaboration with the local community, government, businesses, educational institutions, social agencies, developers, and financiers.

Tāmaki Regeneration Limited (TRL) was established as a subsidiary of TRC in November 2015, for the purposes of housing redevelopment. In May 2018, the Government directed that the Hobsonville Land Company (HLC), a subsidiary of the Housing New Zealand Corporation, be responsible for the delivery of TRC’s housing redevelopment programme. In October 2019, both the HLC and the Housing New Zealand Corporation were subsumed into a new entity, Kāinga Ora – Homes and Communities. TRC retains the role of “master planner” and HLC as the “master developer” for housing redevelopment in Tāmaki. TRL retains overall responsibility for the Tāmaki regeneration programme.

TRC’s shareholders are the Crown and the Auckland Council. Its board consists of one director appointed by the Crown, one appointed by the Council, and up to five other board members. The current board is chaired by Evan Davies who replaced the previous chair, John Robertson, in August 2018.

Financial and service performance In 2018/19, TRC’s total revenue was $22.796 million, compared with $11.145 million in the previous year. Its operating expenditure totalled $15.911 million, compared with $16.034 million in 2017/18.It reported a surplus for 2018/19 of $5.931 million, compared with a deficit of $5.701 million the previous year.

TRC reports its performance against four strategic priorities: housing resources, social transformation, economic development, and placemaking. These priorities contribute to the strategic goals of the Crown and Auckland Council, the wider social and economic objectives 2

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2018/19 ANNUAL REVIEW OF THE TĀMAKI REDEVELOPMENT COMPANY LIMITED for the region, and the Tāmaki Outcomes Framework.1 TRC reported that it met all of the targets for its 2018/19 priorities.

Achievements of the TRC In its opening statement at our meeting, TRC shared some of its significant achievements over the last financial year:

 TRC has provided more than 500 homes since 2012, including 177 in the last financial year.  TRC has commenced a shared home ownership programme. About 40 whānau have achieved home ownership through the programme.  The Jobs and Skills Hub has supported almost 600 people into employment in the past 5 years, with 220 people supported into employment in the past year.  The Tāmaki Housing Association scored 88 percent for overall customer satisfaction in a recent survey of state-housing tenants. The TRC has formed a strong partnership with Kāinga Ora as its principal delivery arm and will continue to monitor its performance.  Through TRC’s “Pathways to Housing Independence programme”, 105 local families are mortgage-ready. About 40 percent of these are Māori and Pasifika, and about 20 percent are state-housing tenants.

Working with Kāinga Ora on housing redevelopment We observed that the HLC assumed responsibility for TRC’s housing redevelopment programme in May 2018, but then had its functions subsumed into Kāinga Ora in October 2019. We wondered whether this might have introduced some disruption and uncertainty into TRC’s ability to plan and determine outcomes for the Tāmaki community.

TRC said that it is working to overcome the challenges it faces as it hands over responsibility for its housing programme. It noted that these challenges are to be expected for a change of such magnitude, but it is glad that its relationship on the ground with Kāinga Ora is strong. It looks forward to the efficiencies that Kāinga Ora will provide to the redevelopment programme because of its greater economies of scale and coordination opportunities.

The Tāmaki Precinct Masterplan Having Kāinga Ora take increased responsibility for meeting housing targets has also allowed TRC to focus on developing community programmes and outcomes.

In the past financial year, TRC developed the Tāmaki Precinct Masterplan in collaboration with HLC, and in consultation with the Maungakiekie–Tāmaki Local Board, Auckland Council, and key community stakeholders. The plan acts as the overarching development framework for the area and defines the key moves that are required to make Tāmaki a safe, sustainable, and connected community.

1 The Tāmaki Outcomes Framework defines the long-term outcomes for Tāmaki that TRC’s work contributes to. It was agreed with the Crown, Auckland Council, and the community in 2016. 3

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We heard that the plan encompasses more than just spatial and development objectives, but also includes social outcomes, such as living streets, health and wellbeing outcomes, education strategies, and the development of social infrastructure. TRC retains responsibility for the plan and its wider social outcomes. It will ensure that Kāinga Ora develops the housing infrastructure in a manner consistent with the plan and in a way that allows TRC to leverage social outcomes through those developments.

TRC told us that it will need to be mindful of balancing the tension between driving social outcomes and commercial outcomes in its ongoing work with Kāinga Ora.

The Maybury Green Project In October 2018, TRC demolished and removed 20 state houses bordering Maybury Reserve, extending the reserve and creating a safer, more accessible space for community use. TRC told us that the project was a good example of the idea that regeneration is not just about driving commercial outcomes, but also achieving social outcomes for the good of the community.

We were pleased to hear that feedback from the community about the Maybury Green Project had been positive. TRC said it looks forward to continuing to develop the space. It has plans to build a destination playground and bike hub in the reserve.

Whānau by Whānau This year TRC plans to launch a new programme, Whānau by Whānau. The programme will be developed in partnership with Te Whānau o Waipareira and three local NGOs—Pōtaka Marae, Glen Innes Family Centre, and Tāmaki Community Development Trust. It will develop an intensive support service for families with multiple and complex needs who are trapped in crisis and poverty.

TRC estimates that about 300 households with whānau are continually in crisis.

The programme will not deliver a predesigned service but will determine the needs of each whānau in consultation with them. The programme will be able to provide practical support with housing, food, and debt relief, but will also consider the factors that keep whānau locked in poverty and crisis over time. TRC hopes that the programme’s lessons will be applicable across New Zealand.

Wider lessons for New Zealand We congratulated TRC on its accomplishments to date. We asked whether it thought that its model of urban regeneration could be applied to other New Zealand suburbs.

TRC said that the success of its programme is based on its practices of strong community engagement and participation that drive social outcomes as well as housing outcomes. It said that other communities have expressed interest in learning about TRC’s model, and any opposition to the programme has largely evaporated as people have seen the quality of the outcomes being achieved.

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2018/19 ANNUAL REVIEW OF THE TĀMAKI REDEVELOPMENT COMPANY LIMITED

Appendix

Committee procedure We met on 19 February and 18 March 2020 to consider the annual review of the Tāmaki Redevelopment Company Limited. We heard evidence from the company and received advice from the Office of the Auditor-General.

Committee members Gareth Hughes (Chairperson) Darroch Ball Anahila Kanongata'a-Suisuiki Agnes Loheni Hon Alfred Ngaro Maureen Pugh Priyanca Radhakrishnan Hon Louise Upston Angie Warren-Clark

Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, www.parliament.nz, along with a transcript of our hearing.

Office of the Auditor-General (Briefing on the Tāmaki Redevelopment Company Limited).

Tāmaki Redevelopment Company Limited (Responses to written questions).

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