Hon MARYAN STREET (Minister for ACC) on behalf of the Minister for the Environment: I move, That the Aquaculture Legislation Amendment Bill be now read a first time. At the appropriate time I will move that the bill be referred to the Primary Production Committee, with an instruction that the committee present its final report on or before 25 August 2008, and that the committee have the authority to meet at any time while the House is sitting, except during questions for oral answer, and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 192 and 195(1)(b) and (c).

This bill amends the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004, the Resource Management Act 1991, the Fisheries Act 1996, and the Maori Commercial Aquaculture Claims Settlement Act 2004. The aquaculture industry is sustainable; it has tremendous capacity for growth. Since 2001 there has been a 56 percent increase in the size of the area approved for the industry, from 9,086 hectares in November 2001 to 14,188 hectares today, with most—that is, 11,723 hectares—in known, productive, inshore areas. It is important to ensure that this growth occurs with proper planning.

Since the aquaculture reforms were enacted in December 2004, a number of issues with the legislation have arisen. The issues dealt with in this bill relate to a May 2006 decision of the Environment Court, in the case of SMW Consortium Ltd v Tasman District Council. This could have the effect of blocking the allocation of space to iwi under the terms of the aquaculture settlement in the Maori Commercial Aquaculture Claims Settlement Act 2004. It could also create problems in processing other applications and in developing aquaculture management areas. It is, therefore, necessary to clarify the policy intent of the aquaculture reform legislation, which is that applications to occupy space for aquaculture activities can be made only in relation to aquaculture management areas included in operative regional coastal plans. These issues need to be progressed quickly, as they are subject to ongoing litigation. We cannot allow a loophole to block the aquaculture settlement obligations being met.

The bill also amends the Fisheries Act 1996 and the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 to ensure that the Ministry of Fisheries is not prevented from carrying out an assessment of any undue adverse effects on fishing. The SMW Consortium decision has highlighted a small number of consequential issues that provisions in the bill also address.

The bill also makes amendments to the Resource Management Act to ensure that councils cannot grant coastal permits for non-aquaculture activities in an aquaculture management area, except to the extent that the activity is compatible with aquaculture activities. It will also ensure that applications for coastal permits for non-aquaculture activities will not prevent councils from tendering or otherwise allocating space in an aquaculture management area for aquaculture activities.

The bill also makes an amendment to the Maori Commercial Aquaculture Claims Settlement Act 2004 to ensure that applications that are not cancelled do not prevent an allocation of space to the trustee. It further makes amendments to the provisions relating to the assessment of undue adverse effects and the definition of “new space” in the Maori Commercial Aquaculture Claims Settlement Act 2004. I commend this bill to the House.

PHIL HEATLEY (National—Whangarei) : I thought I would bring a little bit of reality to the debating chamber this evening on the issue of aquaculture and the progress of marine farming over the last decade. It is true to say that the amount of marine-farming space has increased, as is evidenced by those figures the Minister put forward, but that increase came largely from applications under the old legislation. In fact, the setting aside of marine-farming space since Labour’s reforms in 2004 has brought the creation of aquaculture space, or marine-farming space, to a grinding halt—a grinding halt. No new significant aquaculture management areas have been created since 1 January 2005—

John Carter: You’re joking.

PHIL HEATLEY: None have been created since 1 January 2005. Labour members will be digging around for their calculators to work this out, but members of New Zealand First and the Māori Party have already worked it out. I can tell those Labour members that since 1 January 2005—3½ years ago—there have been no, nil, none, zilch aquaculture management areas created anywhere in New Zealand. Not a single regional council has created a new significant aquaculture management area anywhere.

I will explain to Māori Party members what that means. In 2004 Māori were promised 20 percent of new aquaculture space, but none has been created. Labour members need not scramble for their calculators to work out 20 percent of nothing. It is nil, zilch, zero, nothing. Māori have not received their aquaculture settlement, and that is an absolute disgrace.

The aquaculture reforms of 2004, to be kicked off on 1 January 2005, were supposed to boot along aquaculture and to put a rocket under the industry. But that has come to a grinding halt. Members will recall that in 2004, Māori were appeased over the foreshore and seabed issue with the offer of 20 percent of aquaculture space, but that has not eventuated. We are here tonight with legislation to amend those reforms.

So that there is no confusion in the public domain I point out that two aquaculture bills are coming into Parliament in the next few weeks—this one and another one. The Labour Government, through a pincer movement, has decided it will introduce two bills to try to fix the reforms of 2004. I say that it is too little, too late.

Will National vote for this bill? Yes, we will, because any progress is good, even if it is as minimal as this. Even if we are just creeping ahead, inch by inch, foot by foot, at least it helps. Hopefully, this bill will deliver something over and above the big nothing that has come after a wait of 3½ years, including nothing for Māori.

This bill deals with a court decision where, essentially, the Tasman District Council went to court against SMW Consortium, which is made up of Sealord’s, Maclab, and Westhaven Shellfish marketing. The SMW Consortium, which is involved in aquaculture anyway, applied for aquaculture space, or marine-farming space, under the coastal control of the Tasman District Council during the period leading up to 9 May 2006. Of course, 9 May 2006, as people will know, was my 13th wedding anniversary, and on that date the court ruling was made.

Marine-farming activities under the current law—Labour’s legislation—can occur only in aquaculture management areas. Essentially, that is zoning, just the same as if we were talking about land in a district council. Land is zoned residential, commercial, or heavy industrial. The same applies with the sea. There are areas called aquaculture management areas, which are zones where aquaculture can occur.

SMW Consortium argued that it could apply for space outside aquaculture management areas, but the Tasman District Council argued that one could not have marine farms outside aquaculture management areas. SMW Consortium argued it was just applying for the space and was not intending to farm inside that area. It was just “applying” to farm in the area, but not intending to farm it physically. Some would argue that the consortium was splitting hairs. Then a whole bunch of marine farmers decided to apply for space outside aquaculture management areas. The law states that they cannot farm outside aquaculture management areas, but the applicants said they were not farming, they were only applying for space.

This court process highlighted a loophole where one could apply for marine-farming space outside aquaculture management areas. One cannot farm there but one can apply for space. This bill makes it very clear that people cannot apply for space unless it is within an aquaculture management area, and that they cannot marine farm unless they are on space that is inside an aquaculture management area. That is the crux of this bill.

If the SMW Consortium and other marine farmers were allowed to apply for space outside an aquaculture management area, then they would not have to pass 20 percent to Māori. Where they applied for and got space that later became an aquaculture management area, they would not have to give 20 percent to Māori. Interestingly, if they applied for that space outside the aquaculture management area, then they would not have to go through a fisheries test, either. The test makes sure that the marine farming does not impact on fishing activities such as searching for crayfish, trawling for scallops, trawling for other fish species, or any recreational fishing. If they applied for marine-farming space outside a aquaculture management area, then they would not have to pass 20 percent to Māori, they would not have to consult commercial fishers, and, in the future, when it became a aquaculture management area, they could merrily go on and farm that space.

Of course, it was the intent of the law that 20 percent should go to Māori. How much has gone to Māori?

Eric Roy: How much?

PHIL HEATLEY: None, because no marine farms have been created since the new law was passed. Setting that failure aside, if some marine-farming space had been created in the last 3½ years instead of the process coming to a grinding halt, then those particular groups would not have had to pass 20 percent of that space to Māori. So Māori would have missed out anyway. Are Māori currently missing out under the current reforms? Yes, they are. That has been happening for about 3½ years. What is the go-forward for them? It is very little. Will this change in the legislation help? Incrementally it will, but essentially we need to see much more significant change in aquaculture legislation than we see here.

I reiterate that National will support this bill being referred to the select committee. We will look at the issues, but we do not think the bill goes far enough. The industry wants this legislation supported, and the National Party actively supports the industry. John Key made a speech to commercial fishers and the aquaculture industry recently, where he actively promoted and pushed to help this industry. Even if this bill helps only a little bit, we will support it for that reason. Thank you.

ERIC ROY (National—Invercargill) : I am a little surprised to get a call without an intervention from somewhere else in the Chamber, after the very spirited dissertation given by our fisheries spokesman, Phil Heatley. He has outlined a number of the issues about which National has some concerns. I will reiterate some of those concerns, and for the information of those who have just tuned in, we are debating the Aquaculture Legislation Amendment Bill. It is a rather complex bill, which impacts on four different Acts in its attempt to move forward the process of advancing aquaculture in New Zealand.

Members will know that in many parts of the fishing industry, New Zealand has a very fine record. We were perhaps the first in the world to have an advanced fisheries management bill, and set out in the purposes and principles of the 1996 Act was something that has since been mirrored in many places around the world. At that time some quite extravagant claims were made about the future of New Zealand fishing, and not only in the sustainability area of harvesting wild fish. New Zealand has the fifth or sixth largest exclusive economic zone of any country in the world. Our isolation makes the management of that so much better, in that we do not have shared waters, so we set out a blueprint.

Then some things happened that were a kind of enhancement to that, particularly in the shellfish area. A lot of work went on with enhancement programmes, such as for the likes of the Bluff oyster or “tiotio Chileans”, found in Foveaux Strait. It is world renowned, and it is in my electorate so I am interested to make sure that it is safe and secure. It is one of those iconic things. Then we had the enhancement and advancement of what were natural fisheries.

But ultimately one looks at the spectrum of harvesting fish. One can only do so much in management and enhancement, but feeding the planet in the future has a lot to do with having sensible and viable fisheries management through aquaculture. As I said, some quite extravagant things were said about New Zealand’s potential. For example, I was at a seminar about 6 or 7 years ago—

Pita Paraone: How long?

ERIC ROY: —6 or 7 years ago—and a fast-forward scenario of aquaculture was put out. It was proposed that by the year 2015 we could be exporting $2 billion worth of aquaculture products, although some of that would still be consumed locally. Not only that, but the production processes we put into processing high-value species could give us an entrée to other species that we might catch naturally, and one of those would be salmon. Again, New Zealand’s image as a pristine country is well known around the world, and it is a real value-added thing in terms of what we sell. It was calculated at this seminar that if we were producing $2 billion worth of fish product from aquaculture, that product could be harvested from 2,000 hectares. When we see the size of the area in New Zealand that it would take to produce $2 billion worth of milk, lamb, wine, or something else, we know that it is certainly a lot more than 2,000 hectares. So there was all this excitement and speculation about where we were going, but my colleague Phil Heatley spelt it out—where has it gone?

John Carter: Nowhere.

ERIC ROY: Well, since 2004 it has gone nowhere, so National is supporting this bill. We want to move the steps forward; we still have this dream, this anticipation. Is New Zealand suited to it? Well, certainly. We need only look around the world at countries that are of a similar latitude to New Zealand. I was speaking recently with a fisheries management consultant from Argentina, an Angelo Massini, who told me that the growth rate of aquaculture in Argentina is 7 percent. We can compare that with the rate where we sit—zero—so we need to move on. Mostly this is about a spatial thing. I mentioned earlier that if we had those 2,000 hectares engaged, then we would be doing much, much better, so a number of issues need to be resolved.

When an area has been set aside for marine farming we have had a bit of a gold rush. People have kind of just put a peg in the ground and said that they will do it, and some of them have not even developed the claim but have earned huge profits from just getting their names on a patch of a sound, a fiord, or an area that has been set aside. They have then had quite a speculative advantage from onselling that patch, so the spatial thing is one of those areas that really needs to be resolved. There needs to be some clarity about just how we develop those areas in a way that lets the real players in there, and this bill will go some way towards doing that.

Earlier this evening many members of Parliament were at a function for Saunders Unsworth. I spoke to some fishermen there and said that we had the aquaculture bill before us. I asked them whether they had a word of advice that I should bring to the House, and they said: “Just get on with it!” They made some interesting comments about fisheries management in New Zealand in general. They said that our exclusive economic zone is one fish farm and that we are managing its aquaculture sustainably, but they said that we need to be able to set in place some aquaculture management for those specific products that do very well under a management process, either in cages or in some form of ocean ranching.

I am sure the select committee will look very closely at one or two issues in this bill. At any time when we bring a fisheries bill into the House and it ends up before a select committee, we get an absolute plethora of people trying to bring all kinds of issues to be developed or debated in and around the whole area of fisheries management, and I do not expect this bill to be any different. I note that this bill has some retrospective aspects to it in terms of where some of those licences have been granted, and I am sure we will get a number of submissions around that issue. Most probably there will be some people who feel there are some unjust provisions within this bill, and we will have to sort our way through that. That is why I say that we are happy to support this bill to go to a select committee.

We want to see the advancement of this vibrant industry, but property rights are involved. At this point of the debate I do not know whether there are any robust arguments about what is happening with this bill with regard to retrospectivity, but I can assure the House that we will be looking at that as an issue we will really have to grapple with, to make sure there is equity and fairness, as well as to make sure that we do not delay what goes forward from there.

I mentioned that we have some activity now that is very well regarded and well known, such as the work on the green-lipped mussel, which is found in a number of places around New Zealand but particularly in the Marlborough Sounds and in Big Glory Bay in Stewart Island. This iconic species was not known in the world 15 years ago, yet now it has been discovered there is a whole technology around its development, and there is a variety of products in relation to it. It now has significant space internationally, and is recognised as a high-value product that comes from New Zealand.

There are other things, as well. We could look at some of the native—and they are all native, I guess—shellfish species that are under threat. Gradually we have seen the closure of the toheroa fishery right around New Zealand. Since 1993 we have not had a toheroa season at Ōreti Beach—

Hon Mahara Okeroa: That’s right.

ERIC ROY: —and Mahara Okeroa acknowledges that. But there is a huge potential for us to develop these things in a way, with fish farming. A lot of really iconic species can be developed, such as kingfish. But what is the hold-up? We have had a Government that has sat on its hands for 4 years, we have had a spatial argument, and we have had issues around the retrospectivity of the property right in terms of where people can ocean ranch or fish farm. So this aquaculture bill is important. I doubt whether it goes far enough. Members of the select committee are keen to get into it and to resolve the issues. I am not sure whether it will be completed by the time this House breaks for an election, but at least we will have the process going. It is our commitment to see that there is some advancement, so we will be supporting the bill.

SUE MORONEY (Labour) : I rise to take just a short call on the Aquaculture Legislation Amendment Bill at its first reading. This Government is getting on with it, I say to Mr Roy. I thank the member for his encouragement for the Government to get on with it. This is just another example of this good Labour-led Government getting on with it once again.

This bill amends the legislation governing aquaculture, in order to clarify the original intent of the aquaculture law reform. The bill is required because of an Environment Court decision that allowed applications for aquaculture activities to be made before aquaculture management areas were defined in regional coastal plans. I know there are many of those regional coastal plans where people have taken a lot of time to think about these areas very carefully, and to think about the development of aquaculture management areas in their region. This bill clarifies the position that applications for aquaculture activities are to be made only for aquaculture management areas in regional coastal plans.

I ask members whether such planning is not a very fine thing brought to bear on this country by this Government. I think that in regard to the good old market-led days of the National Government—where it thought that anything could go, that no rules were needed, that no planning was needed, and that anyone could just be allowed to do whatever he or she wanted to do—those days fortunately are gone. These days we actually do plan. We take our time over things, we get them right, and we get good plans in place.

The bill also cancels any applications made after 9 May 2006 that did not relate to these aquaculture management areas in the operative regional coastal plans. It freezes the applications made between 1 January 2005 and 9 May 2006, and allows them to be processed only if the area concerned becomes an aquaculture management area in an operative regional coastal plan. It clarifies the process for creating those management areas, and clarifies the various provisions of the aquaculture legislation relating to non-aquaculture activities in the aquaculture management areas. It also clarifies the obligation to provide new space for iwi, and the assessment of areas of aquaculture management areas that are already subject to an existing marine-farm approval. So with those few words in outlining the real purpose of this bill at its first reading, I commend the bill to the House.

PITA PARAONE (NZ First) : Tēnā koe, Mr Assistant Speaker. It is a privilege to be able to participate in this, the first reading of the Aquaculture Legislation Amendment Bill. I listened to some of the comments made earlier on in this debate. Although some speakers would like to express the suggestion that they are sympathetic to the Māori cause, I would suggest that that sympathy is really just to solicit some support from a particular party in this House, and that the sincerity of their concern for that particular part of our community is, shall I say, not real.

Our fish stocks at this very time are under threat, and it is only proper that we, as Parliament, should consider other alternatives in terms of providing protection for our existing stocks and look at ways of growing that stock outside of mere reserves. I believe that this legislation, which is an omnibus bill that amends a number of pieces of legislation, goes towards that end. The bill is, of course, a result of the Environment Court’s 2006 decision in the SMW Consortium Ltd v Tasman District Council, which raised issues about the wording of current law. It was all about applying for space, as one earlier speaker mentioned.

I say this in conjunction with the Maori Commercial Aquaculture Claims Settlement Act 2004. I can recall that some parties in this House were expressing concern about that legislation. The question being asked was where we would get the 20 percent space that was needed to fulfil the requirements of that particular legislation. I suggest that the application in this court case was being made not to be able to farm or to develop that particular space, but to hold it in case it was required under the terms of the Maori Commercial Aquaculture Claims Settlement Act, so that the consortium had the space to give up to Māori—that is the first point.

The second point is that although comment has been made about the fact that there has been no movement in regard to that particular Act in terms of providing aquaculture management areas to Māori, I am not sure whether any Māori interests have actually applied for an aquaculture management area under that settlement legislation. However, this bill adds clarity to the intent of the Act.

As I read through the bill, I see that it clarifies the intent of the original aquaculture reform legislation, which was that applications for aquaculture activities were to be made only in aquaculture management areas in operative regional coastal plans. It cancels any applications made after the court case of 9 May 2006 that do not relate to aquaculture management areas in operative regional coastal plans, and it freezes those applications made between 1 January 2005 and 9 May 2006. It allows them to be processed only if the area covered by the application becomes an aquaculture management area in an operative regional coastal plan.

The bill also provides clarification that aquaculture management areas can be created in a number of ways. They can be created through a regional coastal plan that provides for aquaculture management areas under the Resource Management Act, by the interim aquaculture management area process currently in the Aquaculture Reform (Repeals and Transitional Provisions) Act, or by approved marine farms being deemed to be aquaculture management areas under the old legislation, as provided under section 45 of the Aquaculture Reform (Repeals and Transitional Provisions) Act. The bill also clarifies aquaculture legislation relating to non-aquaculture activities and aquaculture management areas, contains an obligation to provide new space to iwi, and provides for an assessment of aquaculture management areas that are already subject to an existing marine-farm approval.

New Zealand First will support this bill going to a select committee. As we always say when we support legislation going to a select committee, it is an opportunity to allow the people of New Zealand to have their say on this bill. I hope that those in the industry, and particularly Māori interests, will avail themselves of that process. New Zealand First will ensure that the aquaculture industry’s legislative needs are met by fisheries and resource management legislation. On behalf of New Zealand First, I say again that we will support this bill going to a select committee. Kia ora.

Dr RUSSEL NORMAN (Co-Leader—Green) : This bill in many ways is a technical bill amending a mistake. It was a mistake in the original legislation, in which various actors in the industry managed to find the loophole. It is a pity that we did not manage to find it ourselves, but there we have it. For that reason the Greens will be supporting the bill.

I think it is important to make the point that in fisheries, as with many other activities, sustainability is one of the key issues. I heard Eric Roy lamenting the fact that we did not have a 7 percent growth rate, like the Chileans, in aquaculture. Of course, a 7 percent growth rate means a doubling every 10 years. It is hard to imagine how we could continue to double the size of our aquaculture industry every 10 years; only so many places are suitable for aquaculture.

We have already had the problem of the gold rush that Mr Roy talked about. We had the gold rush before, which is why we had to have the moratorium on aquaculture in order to give us some space to try to work out how to deal with it. All the legislation that came out after the moratorium was an attempt to manage that, and this legislation is an attempt to make sure that we follow through properly. But I cannot help but notice that just as we had a gold rush in aquaculture, which required a moratorium on issuing new consents, we have also had a gold rush in dairying in this country. Perhaps we also need a moratorium on issuing new consents for dairying—to take water, and to have effluent discharge to water—just as we had to have for the aquaculture industry. When we have a finite resource, as we have with our water resources, and as we have with our aquaculture or environments suitable for aquaculture, there is often a gold rush as people try to be the first in to stake their claims in the gold rush. Although that is entrepreneurial and we can be only encouraged that people want to get ahead, the fact is that with a finite resource it is the job of the Government and Parliament to actually manage the process, and to manage what happens with aquaculture, just as it is our job to manage what is happening with water right now—a job we are spectacularly failing to do at the moment.

Mr Roy may well want a 7 percent growth rate every year, but we cannot continue to double the size of our aquaculture industry indefinitely every 10 years. In fact, we should aim, ultimately, for a steady-state aquaculture industry—one that works within the limits of the natural environment. Although it may come as a surprise to a species like ours, which has become accustomed to exponential growth, we cannot have exponential growth in a world that is finite. It is simply not possible. We cannot continue to increase the size of our aquaculture industry by 7 percent every year and not expect to run into serious problems.

There is, of course, an interesting connection between the aquaculture industry, the dairy industry, and water in general, which is that the aquaculture industry runs into real trouble when there are large amounts of E. coli and other faecal matter coming down our rivers and streams; large sections of our aquaculture industry, when that happens, have to stop harvesting. So there is actually a very close connection between cleaning up our rivers and lakes and protecting this very important and, I hope, ultimately sustainable industry, which is the fact that if we do not clean up our rivers and lakes, then we will continue to have a negative impact on our aquaculture industry.

I am hoping, then, that what has happened with aquaculture could be a lesson, and perhaps, if we do it properly, a model for how we deal with managing our water resources in this country. These will need a serious intervention of the level of the aquaculture moratorium if we stand any chance of actually having a sustainable dairy industry in New Zealand, as well as, hopefully, a sustainable aquaculture industry. The Greens will be supporting this bill to go to the select committee, and we will look forward to its deliberations.

TE URUROA FLAVELL (Māori Party—Waiariki) : Mr Assistant Speaker, tēnā koe. Kia ora tatou. Kia ora tatou i tēnei po. I do not know whether members have heard about a good Te Arawa gentlemen by the name of Arthur Bloch, author of the Murphy’s Law books. He summed up this bill, I think, in one short sentence, when he said something like this: “If you improve or tinker with something long enough, eventually it will break or malfunction.” It seems to me that the aquaculture legislation is kind of like that—a tale where the art of tinkering has been taken to an extreme.

In response to Māori claims regarding aquaculture, the Māori Commercial Aquaculture Claims Settlement Act 2004 was introduced to commit the Crown to provide Māori with the equivalent of 20 percent of aquaculture space in the coastal marine area, which Mr Phil Heatley discussed a little earlier. Most believed that it had incredible potential for tangata whenua and for the nation. The concept was that Māori were granted 20 percent of the existing space, but if the space was not made available by 2014, then a cash settlement would follow. This was a measure that tangata whenua appreciated in recognition that they could decide to buy commercial aquaculture space with the settlement money.

The second part was that iwi would be granted 20 percent of new space—and this was where all the problems started to flow from, as, again, Mr Phil Heatley and other speakers have talked about and pointed to. The fundamental problem is that too few new players, including Māori, will be able to enter the aquaculture industry. There is basically no existing space to allocate to Māori, and because the process is so difficult and bureaucratic, it is too difficult to get new space.

I am not an expert on the industry, but this is what I understand happened. Tinkering No. 1: in December 2006 the Government made a technical amendment through the Māori Purposes Bill, related to the definition of pre-commencement space. Tinkering No. 2: on 15 May 2007, the Minister for the Environment, David Benson-Pope, announced that the Government had an intention to introduce a bill to make technical amendments to the aquaculture legislation. Tinkering No. 3: on 7 June 2007, the Government introduced a five-point scheme to tell Māori what they should do to work with a Māori manager employed by Te Puni Kōkiri and to establish some national standards for sustainable aquaculture.

That is all well and good, but the problem is that there is a big, fat, white elephant in the room that no one wants to see. That fat, white elephant is the major structural problem in aquaculture, and that is the requirement for all new aquaculture management areas to require a private plan change to a regional coastal plan. This would be a huge expense for a private venture trying to get into the aquaculture with no certainty that it will get aquaculture space, even after investing what could be thousands and thousands of dollars. So when this bill came up—tinkering No. 4—we had every expectation that maybe this time we would see the fundamental changes needed to address the issue of how we would get new aquaculture space in Aotearoa.

The bill amends the legislation governing aquaculture—the Resource Management Act 1991, the Fisheries Act 1996, the Māori Commercial Aquaculture Claims Settlement Act 2004, and the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004. The bill, we see, corrects technical issues and provides some assistance in amending experimental areas outside the aquaculture management areas, more usually known as AMAs. It seems that the Environment Court had defined these aquaculture management areas before the Act came in. This bill has been necessary to tidy up the definition of these areas before the High Court makes a decision on the matter. The bill also amends the Māori Commercial Aquaculture Claims Settlement Act 2004 by revising the definition of “new space”. The No. 2 bill, which is destined to follow this one, also goes a little bit further to deal with the possible effects of spat catching and marine farming on fishing.

These amendments are all very helpful, but at best are nothing more than tinkering around the edges. The problem with this version of tinkering, and the trail that preceded, it is that it fails to address the private plan change requirement in the Resource Management Act that enables a new area to be established, which other speakers have talked about. While iwi wait in line for the Crown to come up with the marine space, others are fast losing patience with the Government, which is tinkering rather than making a tangible effort to find any unused space.

So is it any wonder that the Te Tau Ihu iwi have announced that they will take the initiative to join forces to seek early settlement of their aquaculture claims? I am told that Richard Bradley from Rangitāne has confirmed that the iwi have asked for aquaculture to be included in their Treaty settlement. They have also included Ngāi Tahu in their discussion. So we are seeing, looming on the horizon, the possibility of a settlement covering the entire South Island, Te Wai Pounamu, for we know that other iwi such as Ngāti Rārua, Ngāti Tama, and Te Ātiawa have invested considerably on legal action to try to get the issues addressed. The block has come about because there is simply no new aquaculture space at the top of the South Island, so iwi are working together towards a cash settlement instead. They have had to do it themselves, because the Government has not.

Officials of the Ministry of Fisheries have estimated that the total cost of the aquaculture settlement post-2014 could be up to $100 million, but the essential issue for tangata whenua is not essentially about a cash offer; the issue is around protecting and preserving our rights to whenua, space, and resources, rather than seeing space alienated further into the creation of private marinas. In this way there is a link to the Foreshore and Seabed Act, in that the Crown is allocating space that does not belong to it and making decisions about marine spaces that tangata whenua should rightly be involved in. The decision by the Government to provide all Māori with aquaculture space since September 1992 was a unilateral decision made entirely by the Crown. In doing so, it established a dangerous precedent, in that it proposed settlement without any substantial discussion or negotiation with tangata whenua.

The key point is that aquaculture will be too significant a feature of the fishing industry in the future for Māori to be excluded at this point. We need to see regional councils being consistent in the way in which they respond to aquaculture management areas. Currently, it is an extraordinarily large process to go through—a process that is rather bureaucratic, with no guarantees at the end. We need to have clear and consistent management that will oversee the issue of the quality of representative space for allocation to iwi. Our major concern is that tangata whenua will end up with marine-farming areas that are not likely to yield a higher than average productive capacity.

Iwi and Māori organisations have already been playing a crucial role in the marine-farming industry, as we know. A central challenge facing Government could be how to ensure that the sector is able to respond to the economic and environmental aspirations of iwi. We are also interested in seeing demonstrated the way in which the sector can sustain the progress of iwi in upholding the ancestral responsibilities that come with kaitiakitanga.

We will support this bill at first reading as it attempts to move forward, albeit in a very limited sense—as alluded to by Mr Phil Heatley. But we recognise also that the real issue of the quality of representative space for allocation to iwi remains on the agenda. The Government rushed through the 2004 bill, leaving in its wake a lot of loopholes that left Māori vulnerable. The Government has not changed the legislation and closed these loopholes as promised, according to many whom we have talked to, but we believe that this bill at least closes one of those loopholes and, as such, it should be supported.

Although iwi have been allocated aquaculture space under the Māori Commercial Aquacultural Claims Settlement Act 2004, a recent press release issued by the Minister of Fisheries indicates that the actual transfer of this aquaculture management area space to iwi has not yet occurred and that consultation is ongoing. The fundamental flaw, of course, is that none of the iwi aquaculture organisations has taken full possession of its aquaculture management area allocation under the Act. Many of these organisations had been undertaking aquacultural activities on aquaculture management area space obtained outside the provisions in the 2004 Act. These were established, privately owned Māori businesses that have also qualified as iwi agricultural organisations under the 2004 Act.

This bill is still needed for those iwi who want to get into aquaculture where there is new space available. So we support this first reading and we look forward to the ongoing debate.

COLIN KING (National—Kaikoura) : At the outset, I say National will support the referral to the select committee of the Aquaculture Legislation Amendment Bill. The failure by this Government to see its way forward in realising the potential of the aquaculture industry has been well canvassed.

I will come back to the bill. This bill amends four particular Acts, and I make the comment that the legislation is complex. That is, of course, borne out in the very court case that has been referred to between SMW Consortium Ltd and the Tasman District Council.

If we stop to think about the complexities of the law, and to talk about them in real terms, we should go into the judgment. It is very interesting, when looking at the judgment of that court case, to see that under the heading “Tasman District Council”, it states: “Unfortunately, the TDC did not take this opportunity to argue which version of s19 applies, and whether the prohibited rule in the Transition Plan is still operative. The TDC spent most of its submission instead trying to reopen the discussion about whether s12A creates a prohibited activity. The TDC considers that the two preconditions in s12A(1)(a) are at the heart of the matters left for determination by this Court. It submitted that the matter for ultimate determination is whether the TDC is required to accept an application for coastal permits for mussel farming when occupation is a prohibited activity”.

When we start to understand the complexities of the law from the point of view of the people who are trying to administer it and who get it wrong, we can understand why this bill is in front of the House. As the general policy statement in the explanatory note of the bill states: “The effect of the court decision is that applications can be made outside of AMAs in operative regional coastal plan.” So effectively the amendment in front of us, at the moment, freezes those decisions—the decisions from 1 January 2005—and they will proceed only if the areas concerned are in fact registered as aquaculture management areas.

It should be of interest to members on the other side of the House that the Marlborough Sounds has half a million hectares of intrinsically sheltered waterways. Those waterways were an area identified early on as a primary place to establish a new industry known as the aquaculture industry. Most of the aquaculture industry grew out of hobby farming or hobby part-time operations. It was a way in which pastoral farmers in that region supplemented their incomes or in which people who had a quota of wet fish also grew their incomes. From 1971 the marine farms were under the auspices of the Marine Farming Act 1971. In 1991, when the Resource Management Act came into effect, that then came to take control of the way in which the aquaculture industry was treated. In fact that Act enabled councils, or the local authorities, to assess the effects of aquaculture. Those effects are something that cannot ever be dismissed. There is a saturation point, because the area in which aquaculture is established is a public area and on that basis many, many people use it. That was the second leg from 1991 onwards, when the Fisheries Amendment Act came into play. As aquaculture was established under the Resource Management Act, it displaced people who had quota to fish in those particular areas. That meant that before anybody could set up aquaculture and be approved to do so, that person had to receive a permit from the Ministry of Fisheries.

However those dual purposes were replaced in 2005 by the four Acts that we are facing today. From that point on, a multitude of things had to be met by people who wanted to commence farming mussels or whatever form of aquaculture they wanted to undertake. Therein lies one of our major challenges. Although our local governments control areas like the Marlborough Sounds under the Resource Management Act, it is always going to be very hard for a council to justify spending money on setting up aquaculture management areas when using ratepayers’ money. That has been one of the choke points in the whole system, so that in actual fact nothing has occurred. It is quite serious that we are in that dilemma, because we have not only the complexities around competing interests, be it people wanting to compete for scallops, cod, or whatever else, but also the issue that people want to farm mussels.

Today in the Marlborough Sounds we have 3,023 hectares of aquaculture distributed between 616 separate marine farms. It is very interesting to see the range of aquaculture—it is something that has not been talked about very much tonight. There is salmon, there is pāua, there is seaweed, there are sponges, there are scallops, and there is oyster farming. When we look at aquaculture in Marlborough, we see the region has 65 percent, by area, of the mussel farms in New Zealand and 95 percent of the finfish farming in New Zealand. We all talk about the sea, but there is also, to a varying degree of success, aquaculture on the land. We have salmon being farmed up the Wairau River. Also, in Kaikōura we have crayfish, or what would be more affectionately known over in Australia as yabbies.

As members can see, there is a fair amount of history to the aquaculture industry. A wonderful book has been written on the industry; it is called Lines in the water. But we can be as sure as eggs that if we measure what has been achieved by this Government, we find it has been well articulated by the National Party spokesperson Phil Heatley as being absolutely nothing.

The member from the Māori Party articulated that a $100 million - plus bill is sitting at the end of the process to ensure that Māori get 20 percent of the previously allocated space. It has to be underscored, too, that they are entitled to 20 percent of the future space that will be allocated. How did all that come about? That is quite interesting, because at the very heart of it all was the Ngāti Apa issue. Once Ngāti Apa got the allocation of 20 percent, there were so many people in front of them that there would never have been an opportunity for them to get up to or near the front. So, in fact, the debate came out of the Ngāti Apa claim to the foreshore and seabed, and, of course, it took off from there. It is with great comfort that I see, in relation to the Kurahaupō settlement, that Richard Bradley and others are talking about including that sort of solution in their final settlement. I believe that we have to move forward on that. I have absolute confidence and faith in the process and in the Kurahaupō people. I see Dr Cullen acknowledging that that would be a good outcome.

But I say the sad thing about the aquaculture industry is that under this Government’s watch, our best and finest people have left this country and invested in places like Port Lincoln in South Australia, or over in Chile—people who have really worked hard and grown this industry from infancy, and who have had nothing but roadblocks and obstacles from this tired Labour Government.

Hon Dr NICK SMITH (National—Nelson) : The aquaculture industry is one that has huge potential for New Zealand. We are a coastal nation. We have beautiful, clean oceans, and we have many areas of New Zealand where aquaculture can play a very important role in regional development. But it is an area that has been wrecked by poor public policy from this Government. Only a month ago I had 320 constituents lose their jobs at Sealord Shellfish as a consequence of the mess this Government has made of the aquaculture industry. To put those job losses in context, I note that it is the biggest single loss of jobs in Nelson in its 158 years of settled history. It is a huge blow to my electorate’s economy. I say to the Government opposite that accountability day is coming up later this year, on which the people of Nelson—

Hon Clayton Cosgrove: Is Lockwood accountable as well?

Hon Dr NICK SMITH: I notice that Labour members are laughing. They think that the loss of 320 jobs is a laughing matter. I have to say to members opposite that that is one of the reasons why the people of New Zealand have lost confidence in the Government. When members think it is a laughing matter—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I apologise for interrupting the member’s speech, but I felt compelled to correct the record. I was not laughing at the loss of jobs—that would be reprehensible. I was laughing at the need for Lockwood Smith to be accountable.

The ASSISTANT SPEAKER (H V Ross Robertson): It is a debatable issue. The member can take the next call.

Hon Dr NICK SMITH: I say to Mr Cosgrove that the part Labour does not understand is that when 320 people in Nelson lose their jobs because of botched aquaculture legislation, this Government has done its day. When Clayton Cosgrove and his colleagues opposite laugh their heads off, I say to them that this is not a laughing issue. This is an issue that goes to the core of the wealth creation that New Zealand needs to engage in if it is to maintain living standards and stop the tide of New Zealanders departing for Australia.

What has been so depressing for me in Nelson is to watch scientists, investors, and skilled people in Nelson, the leadership of the aquaculture industry, take their skills and wealth to Australia because of the botched regulatory regime that this Government has made of aquaculture. Let us compare the record. In 1990 the aquaculture industry was worth $40 million. With the very careful stewardship of people like Doug Kidd, the Minister of Fisheries in the last Government, that industry grew from $40 million a year to $260 million a year, and was one of the reasons during the 1990s that the economy was growing so strongly in places like Marlborough and Nelson. The first thing that this Government did when it came to office in 1999 was to impose a moratorium on aquaculture. The first thing that Clayton Cosgrove and his colleagues over there did was to freeze the growth of this industry. They rushed into Parliament an aquaculture moratorium bill that resulted in freezing this industry. Since that time they have had four cracks at trying to get the aquaculture—

Hon Clayton Cosgrove: Ha, ha!

Hon Dr NICK SMITH: The member is laughing again. The members of the Labour Party are so out of touch with New Zealanders that they think, when they make a mess of legislation, that it is a laughing matter.

Let us read the intent of this bill. It is to clarify the aquaculture reform legislation of 2004. Well, the reason that it needs to be clarified is because the Government botched it up—it made a mess of it. And now we have the fourth attempt, a desperate attempt, in the dying, gasping days of this Government to get some sense in to the development of the aquaculture industry. The great irony is that about a year ago I and Phil Heatley, our very capable spokesperson on fishing and aquaculture, attended a function in Nelson where the Prime Minister launched a billion-dollar strategy for the aquaculture industry. She told the people of Nelson, my community, that hundreds of new jobs would be able to be produced as a consequence of this Government’s policies—and within a year 320 jobs were down the toilet. So the members opposite should say “Mea culpa.” They should accept some responsibility for the mess they have made of this important industry. They should accept some responsibility for the job losses that have occurred as a consequence of the legislation they have passed that has not worked at all well.

I, like Phil Heatley, do not have confidence that the reforms in this bill will go nearly far enough for what will be required to get the aquaculture industry onto a growth path. We will support the bill’s referral to the select committee, because we want to have a crack at trying to fix the mess that Labour has made of this aquaculture law. Clayton Cosgrove and his Labour colleagues think it is funny that they have frozen an industry. They think it is funny that 320 jobs have been lost in Nelson as a consequence of the mess they have made in the aquaculture industry. They think it is funny that we have a large number of aquaculture investors who have taken their capital to other parts of the world because of what those members have done in New Zealand. They think it is funny that research scientists who work in the aquaculture area have taken their skills to other parts of the world. National says that that is not good enough. One of the reasons this Government will be tossed out on its ear is poor legislation in this sort of area, which has cost the growth of areas like Nelson and Marlborough because of poor public policy and lost opportunities.

I say to the aquaculture industry that help is on the way. There is a mood out there in New Zealand for change—change to a Government that recognises the potential that this industry has and will get rid of the ridiculous bureaucracy and red tape that Labour has tied up the aquaculture industry in over the last 9 years. I say to members opposite that the statistics paint a very clear picture of the Government’s failure in aquaculture. Average compound growth during the 1990s was 23 percent per year—23 percent year on year growth within the aquaculture industry. In 1 year, over the last 9 years, it got to 2 percent, but there was an average of just 1 percent growth. That is why New Zealand is going backwards, that is why we need a change of Government, and that is why we need an aquaculture reform bill that goes considerably further than this fourth botched attempt by the Labour Government to get the law in this important area of resource management right.

• Bill read a first time.

Hon DAVID PARKER (Minister of State Services) on behalf of the Minister for the Environment: I move, That the Aquaculture Legislation Amendment Bill be referred to the Primary Production Committee, with an instruction that the committee presents its final report on or before 25 August 2008, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 195(1)(b) and (c) and 192.

• Motion agreed to.