Hon Dr NICK SMITH (Minister for ACC) : I move, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Transport and Industrial Relations Committee, with an instruction that the committee report finally to the House on or before 12 February 2010, 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 on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189, and 190(1)(b) and (c).

Accident compensation has become financially unsustainable, and reform is required to secure its future for New Zealanders. The 2008-09 annual report of the Accident Compensation Corporation (ACC) showed a loss of $4.8 billion, on top of a $2.4 billion loss for the previous year. Over the past 4 years the unfunded liabilities of the accident compensation scheme—for example, the difference between its liabilities and its assets—have grown from $4 billion to $13 billion. This is a significant and serious problem that cannot be ignored. The underlying issue is the steep rise in accident compensation claim costs, up by 59 percent in the last 4 years, or rising at five times the rate of inflation. The accident compensation scheme cannot sustain the ongoing huge increases in claim costs arising from greater claim numbers, deteriorating rehabilitation rates, and unfunded extensions to the scheme. The underlying problem is that ACC has drifted from being a State insurer to being an extension of the welfare State. Changes in the accident compensation scheme are needed to make it affordable, to make it sustainable, and to make it fair.

The changes in this bill are part of a wider reform of accident compensation that began with the changes that I made to the ACC board in March, the stocktake that has been announced, and other regulatory and operational improvements. The Government’s objective with this bill, in that wider package, is to make savings of $2 billion in the scheme’s liabilities. The first amendment in the bill will extend the full funding date for residual claim liabilities from 2014 to 2019. This is done by setting a final valuation of the residual claims liabilities as valued at 30 June 2009, and folding those residual liabilities into the main accounts. Some people have presented this as a panacea for the scheme’s financial woes. Shifting the full funding date does not actually save levy payers a dollar; it simply changes when they pay. Delaying payment actually increases the costs and it also increases the Crown’s net debt in the intervening years.

There are 10 amendments in this bill that deliver cost savings, most of which are reversals of scheme extensions made by the previous Labour Government. Over recent months with colleagues and officials, I have been reviewing each of the add-ons that the previous Government made to the scheme. I note that not all have been reversed but a number have, because of the financial problems. The first change relates to enhancing the rehabilitation rates of the scheme, which have been declining over the last 5 years. The previous Government made it a mandatory consideration for a person’s pre-injury earnings to be considered. This means that a person who previously had a very high income did not have to return to work unless a job would provide a similar level of earnings. This is too tough a test, and adds to the costs for accident compensation. This bill reverses that consideration.

The second change reverses the changes to the vocational independence test in order to bring it better in line with what was there previously and with the standard definition that is used both by Work and Income New Zealand and by Statistics New Zealand—that is, 30 hours of work per week. The third reform is to reverse the changes in respect of the three-part test for gradual workplace injury, infection, or disease. It will be simpler to apply and it removes the presumption that the accident compensation scheme should automatically provide cover.

The next four changes in the bill relate to the way weekly compensation is calculated, and return the scheme to the principle that accident compensation provides 80 percent of earnings for the first 4 weeks, based on a person’s average earnings for the previous 4 weeks, and then after that earnings compensation is based on income over the past 12 months. One of these changes reverses the decision to increase compensation for the loss of potential earnings—back from 100 percent to the standard 80 percent.

Changes are also being made to the calculation for longer-term compensation for casual or seasonal workers. Our concern about the change that Labour made was that standard seasonal workers who were injured in the long term would find themselves better off on accident compensation than they would be in their normal pattern of seasonal work. We are also reversing the change around part-time workers so that their compensation, again, is based on those same averaging principles that go all the way back to the Woodhouse report.

The eighth change around cost saving is to reverse the decision of the previous Government to include suicide and self-inflicted injuries within the accident compensation scheme. I acknowledge this is a sensitive area, but the Woodhouse report never intended to include such injuries. Suicide is a tragedy but it is not an accident. I also want to make plain that in respect of these five amendments around entitlements, the bill affects only future claimants; no existing person receiving compensation will receive a reduction.

The bill contains two further cost-saving measures. The first is to introduce a hearing-loss threshold of 6 percent, a provision that is in many of the Australian state schemes and is used in the United Kingdom. Hearing-loss claims have risen at a very strong pace in recent years. We are effectively concluding that the cost of hearing aids for low levels of hearing loss is not justified by the benefits.

The last change is to strengthen the disentitlements for criminals. The proposal is that people who commit a crime that has a maximum sentence of 2 years or more, and who are sentenced to imprisonment, should automatically be disentitled from receiving compensation. The claimant will continue to get the emergency treatment that is required, and the treatment that is required to restore function.

The Government also wants to improve the incentives for safety, so this bill makes provision for experience-rating or risk sharing in the work account, and provides for no-claim bonuses, higher or lower levies, and claim thresholds to be set. It also enables risk rating in the motor vehicle account for vehicles and for vehicle owners, to link safety to levy payments. Those are enabling provisions, and the really important work will be in the regulations to make these practical and workable, albeit the principle is important. The Government and ACC should be better rewarding those motorists and employers who have better safety records.

A further amendment in this bill gives the Government greater flexibility to be able to use the petrol levy for residual claims in the motor vehicle account. A further provision allows self-employed shareholders to buy extra entitlements under the scheme. That is a programme that I think is actually quite useful for self-employed people, who can voluntarily have the security of a higher level of income by paying a higher level of levy.

The bill removes two statutory advisory committees. Ministers can establish advisory committees as is required, relative to the particular challenges that exist for accident compensation at the time, without them being enshrined in statute. A further provision enables information sharing between ACC and the Inland Revenue Department. There is also provision in this bill to link accident compensation with other parts of the Government’s programme. The Minister of Justice has done some very good work on increasing support for victims of crime, and this bill will enable the accident compensation scheme to deliver some of those services.

The last important amendment ensures that the accident compensation scheme does not again end up in this level of financial difficulty. That is why this bill provides for improved financial accountability for the scheme by requiring a financial condition report to be produced by ACC and tabled in this Parliament. This provision is similar to that which is best practice for insurance companies internationally, in the wake of a number of high-profile collapses. I note, for instance, that in 2006 ACC’s actuaries noted with concern the very optimistic assumptions about investment returns, but such information did not make it into the annual report. This additional check on the scheme’s finances is part of recognising that thousands of New Zealanders rely on accident compensation for their well-being, and that they need the security of knowing that the institution is financially robust.

I conclude by making plain that this Government is committed to the core concept of ACC being a 24/7 no-fault insurer for New Zealanders at work, at play, and on the road. There is not a person on the Government benches, despite the rhetoric from members opposite, who wants to return to the days of suing, and the uncertainty that goes with it. What Government members say, though, is that to secure the accident compensation scheme’s future, it needs to be affordable and financially sustainable, and that is what this bill seeks to achieve.

Hon DAVID PARKER (Labour) : New Zealanders should make no mistake: this year has seen already an unprecedented attack on our accident compensation system by the Government, which has been exaggerating the degree of seriousness of problems in the accident compensation scheme in order to justify fundamental changes to accident compensation that are not necessary.

New Zealand has long been proud of our world-leading accident compensation and rehabilitation system. Indeed, many commentators in this country and many politicians in this House, especially on this side of the House, believe most strongly that we have the best accident compensation and rehabilitation scheme in the world—in the world, bar none. It is second to none. It achieves that and is affordable in New Zealand because of its core principles, which are that we should have no-fault rehabilitation and compensation for 24 hours a day, 365 days a year, whether people’s accidents are at work, on the sports field, in a motor car, or in the home when they fall over. Wherever their accidents occur, they should have no-fault accident compensation and rehabilitation.

We have heard from the Government again today, saying effectively that the accident compensation system is fundamentally broken, therefore justifying the fundamental changes the Government has on the way. They are changes not just to the scope of cover but also to whoever will provide the social insurance under the accident compensation scheme, which currently can be only the State or a large employer that self-insures. Contrary to what Dr Smith said in the House today, not one private insurer in New Zealand is providing insurance cover at the moment, because currently it is illegal under the accident compensation legislation.

We heard Dr Smith say a $4.8 billion loss has been made in the accident compensation scheme this year. He said it again in the speech that he just gave. I say to Dr Smith that that is not correct. The Accident Compensation Corporation (ACC) takes great care to describe what has happened this year. There has been a $4.8 billion increase in the liabilities of accident compensation, but there has not been a $4.8 billion operating loss by the corporation. Indeed, page 72 of ACC’s annual report shows there was a $1 billion excess of levy income over claims expenditure this year. In other words, the corporation took in $1 billion dollars more than it spent. But the National Government says that the scheme has made a $4.8 billion loss. Well, it is true that the scheme’s liabilities have increased from where they were last year, but that is not the same thing as an operating loss. This year the scheme took in $1 billion more—as shown on page 72 of the report—than it spent. Even if we look at the whole-of-life cost of the claims that were made last year, the corporation still collected more revenue than was the cost.

We can take the case of the person who was in a terrible car accident last year and became a tetraplegic. By the time we fully fund that claim to the end of that person’s life—because he or she will be on the system until death—and even if we fully cost all of those whole-of life-claims for every claim laid last year, the scheme still collected more in levy income last year than the whole-of-life claims of every claim made last year.

What have increased are the scheme’s liabilities. Dr Smith continues to misrepresent the increase in liabilities as being a loss made by the scheme in the one year, which somehow points to the scheme being fundamentally flawed when it is not. What have increased are the corporation’s liabilities. What is the cause of that increase in the liabilities? Well, one and a half billion dollars of it relates to economic factors—this is from page 34 of the annual report, for those who want to have a look at the detail of how the liabilities have increased from $9.3 billion to $23.7 billion since 2004. Of that, $1.4 billion relates to economic factors. That is the decreasing rate of return that ACC now expects the scheme to earn on its investments as a consequence of the recession and a long-term decrease in the expected rate of return on investments around the world, a factor that is affecting not only ACC but every other insurance company in the world.

Even more, a liability of $2.6 billion arises from a change in accounting standards. Liabilities used to have to be reported based on the probability that investment funds would be able to cover those future liabilities. The probability to be assured was 50 percent, but those setting the accounting standards said “No, we’re going to change that. You’ve got to have enough money in the bank so that we are 75 percent sure that you will have enough money.” That change in accounting standards has caused $2.6 billion of change in liabilities.

There have been some other undeniable changes in cost drivers. It is true that we now pay nurses and doctors more, and that there has been inflation in the health sector that has run ahead of general inflation for some years. Those were changes that were made by the previous Government, because New Zealand was losing too many doctors and nurses to Australia and overseas. At the time National members supported those changes, because they knew that that was a real problem that we faced. So it is true that health inflation has increased at higher than the general rate of inflation, but I say that that trend will not continue to the same extent in the future.

It is also true that people survive accidents that they used to die from. Medical advances mean that many people who used to die in serious motor vehicle accidents now live, but that they have long-term care costs and needs that are higher. That is a cost driver that is unavoidable.

It is also true that our population is ageing, and as people age more of them are falling over in their homes, breaking their hip, needing care at home, and needing orthopaedic interventions. Again, that is a real cost increase. But even when we take into account those cost increases, and they are unavoidable cost increases, the cost of the New Zealand accident compensation scheme is cheaper than the Australian equivalent. The National Government is forever saying that New Zealand needs to model itself on Australia because it is doing better than us, but in the area of accident compensation New Zealand is already doing better than Australia. Our scheme has more scope. A New Zealander’s decision to play sport is not based on whether he or she can afford to pay the fees to cover insurance premiums. We do not have that problem. We have a broad scope of cover, but lower costs than the Australian scheme.

Where is the case for fundamental changes to the scope of the accident compensation scheme? John Key said, a couple of weeks ago, that there is a need for an honest conversation with New Zealanders about the trade-off between levies and the scope of cover. That is a very proper conversation to have in New Zealand. But we should have the conversation before we cut the scope of cover, not after we have done it. That is why the Labour Opposition said that it would have backed parts of this bill. It would have backed the extension of the date for full funding. That is not the total panacea to all issues of accident compensation; I acknowledge that. But it is a big part of it.

One of the things that the Government has been scaremongering about is an increase in car registration fees. It has said that unless it passes this bill, registration fees will go up by $130 a year. But the actual increase the Government promoted, after that scaremongering, is $30 a year. It is less than a quarter. The Government was scaring people with levy increases four times more than were necessary. What is responsible for the vast majority of the difference between a $30 a year increase and a $130 a year increase? It is the extension of the date for full funding. We said to the Government: “We agree with you that full funding all of those historic claims by 2014 is too tough. It drives levies too high in too short a period of time. We will back that date extension.” Then let us have the honest conversation with New Zealanders about the scope of cover. Let us see whether this is truly affordable.

I think we will find that most New Zealanders will agree that the date extension will cure much of the problem, when they realise that most of these cost increases for the likes of the motor vehicle levy can be avoided by pushing out the date for full funding, so that we catch up on those costs by 2019 rather than 2014.

Hon Dr Nick Smith: Not true.

Hon DAVID PARKER: Dr Nick Smith shouts out that that is not true; he cannot help himself. It is true. We know, from the briefing to incoming Minister, that more than $80 is knocked off the increase in registration fees by the extension to the date of full funding. The Minister has still refused to answer in this House the exact breakdown, but we know that the majority of savings comes from that.

Privatisation is next. We will see socialisation of losses and privatisation of profits in accident compensation as it is being fundamentally undermined.

Hon PANSY WONG (Associate Minister for ACC) : In the year 2000 the Labour finance Minister, Dr Michael Cullen, said he would recommend that the House accept a 31c residual claims account levy, and promised with that that the accident compensation scheme liability would be fully funded in 5 years’ time. In fact, he went one better. He asked why the House should not take the increase to 35c, so that the liability should be fully funded 2 or 3 years earlier. From my quick calculation, the previous Labour Government had promised that the liability would be fully funded by 2014 or earlier. But here we are today, in the House once again, and the front-bench Opposition spokesperson on accident compensation, the Hon David Parker, is asking what the problem is and saying that all we have to do is push out the funding date for another 5 years. We can choose just to ignore those statements.

In 1972 the 24-hour, comprehensive, no-fault accident compensation scheme was introduced into the House by a National Government. National is very proud of introducing that 24-hour, comprehensive, no-fault scheme, but the problem is that every time Labour is in Government, its ill-disciplined tax-and-spend mismanagement of the accident compensation scheme consistently wrecks the scheme and puts it under risk.

I will focus on only three areas, to demonstrate why our hard-working, dedicated Minister for ACC, Dr Nick Smith, has been forced to bring into the House dramatic measures to ensure that the accident compensation scheme brought in by the National Government will continue to be sustained for a very, very long time, for the benefit of New Zealanders. First of all, in 1999 the National Government opened up the work account to competition for 1 year. At that stage, the Accident Compensation Corporation (ACC) was charging the levy for the work account at the rate of $1.47 per $100. Under the 1-year period of competition, the amount dropped immediately to $1.20. Then the Labour Government took over, ruined all the good work, and chucked back the account to the ACC monopoly. But through this exercise ACC became disciplined, so the levy amount continued to track downwards to $1.12, 91c, and 90c. Unfortunately, today, after 9 long years of ill-discipline and mismanagement by Labour, we are staring at an increase that will put the levy back to the 1999 level. So I welcome the investigation into competition for the work account, because that 1 year of competition introduced good discipline and showed the corporation that it could have managed the account much better.

The other area I will touch on concerns fairness. As Associate Minister for ACC, I have the delegated responsibility of answering individual complaints. Many good, law-abiding New Zealanders have been totally frustrated with people who have incurred an injury during the committing of a crime and who have then gone on to claim all sorts of compensation. I remember that 2 years ago we heard a case about a burglar who demanded to have cosmetic surgery because a small part of his ear had been bitten off during a burglary attempt. The then Labour Minister for ACC came out and said: “Well, he’s entitled to it.”, and all that nonsense. But from this side of the House Dr Smith has brought in changes to say that if the injury is incurred during the committing of an offence that will incur 2 years’ imprisonment, no compensation will be payable. It is about time that the accident compensation scheme answered to the needs of law-abiding New Zealanders. We will not squander compensation on people who are injured while committing a crime.

The third issue I want to put on the table is the reason why the Labour Party is never going to be trusted again. Last year, after the general election, both the Minister for ACC and I were summoned to an urgent meeting with officials. There was an urgent request to inject $300 million into the earners account. We are supposed to operate on a no-surprises policy, so this type of bad news set ACC off to a very bad start.

The last point is that apart from this legislation, the good Minister, Dr Nick Smith, has also set out to change the culture in accident compensation. I think that everyone in the House and out there will remember the extravagant $5 million Covered campaign run by ACC on television, etc. That campaign was challenged by the Advertising Standards Authority for being misleading. We can contrast that time with this year, when ACC ran a 1-week home safety campaign. It was very well-covered and effective, and it cost only $500,000. I congratulate the Minister for ACC on making the tough call to ensure that the accident compensation scheme that was proudly introduced into this House by the second National Government will continue to exist to protect and benefit New Zealanders.

LYNNE PILLAY (Labour) : It saddens me that it is necessary to take a call on this bill in the House. This bill is an absolute sham. It is based on a campaign of scaremongering that the accident compensation scheme is financially unsustainable. That is what we heard Pansy Wong say. She said, effectively, that it was broken, but we know that that is absolutely not true. This is about promoting the idea that accident compensation is in crisis, and it is about talking up National’s true agenda, which is not a surprise—it is a return to privatisation. It is nothing new; what did we see in the 1990s? Is this new? This is an absolute rehash of the 1990s, but worse. Again, what did we see? In the 1990s we were told that accident compensation was unaffordable, and that is when we saw the axing of lump-sum payments under a National Government.

Hon John Carter: Really?

LYNNE PILLAY: Yes, really, Mr Carter. You have a short memory if you cannot remember it.

Mr SPEAKER: The member will not use “you”.

LYNNE PILLAY: I am sorry, Mr Speaker, although I am sure that you can remember it, too. It was the National Government that scaremongered and tried to convince the public that the scheme was unaffordable.

Hon John Carter: What happened?

LYNNE PILLAY: What happened is that many, many people in New Zealand—many victims of horrendous accidents—received no lump-sum payment whatsoever under the National Government. I put it to this House that this legislation is the first of many changes, and probably the axing of those payments is what is next on the agenda. But I think the Government thinks that perhaps it is just a little bit unpalatable at the moment, so it will bring in this measure—

Hon Dr Nick Smith: What’s your position on the bill?

LYNNE PILLAY: My position on the bill is that we oppose it. We know that our accident compensation scheme is the envy of the world. I heard Pansy Wong refer to the introduction of the accident compensation system in 1974.

Hon John Carter: It’s not a welfare system; it’s an insurance system.

LYNNE PILLAY: It is a social insurance system; there is a difference. Let us talk about that. Let us talk about the difference between social insurance or social compensation, where there is no-fault, 24-hour coverage, and where the principle is to provide the support, etc., that is necessary, as opposed to National’s agenda, which is the shipping of accident compensation out to the insurance industry. I heard the leader of the National Party, our Prime Minister, say there is no difference.

I say to members opposite that they have said that the scheme is broken and that it is running at a loss. Yet in the last financial year it had a $1 billion operating surplus—$1 billion—and a return on investment that was performing very well, comparatively. I am sure that the National leader, John Key, who was in that industry, will accept that the Accident Compensation Corporation has performed very well, given the recession and given the challenges. I see the Minister nodding, but still the scaremongering goes on that the scheme is broken, and that despite the $1 billion surplus we have to cut costs.

The costings have been done for all long-term liabilities—they go out 40 years. We can make all the worst assumptions—and be really conservative amongst the scaremongering agenda—such as low return on investments, high inflation, and the most expensive cost-management scenario of all the cases. I note that the Government has changed its mind in terms of full funding, but this is not bad from a Government that has no commitment whatsoever to putting money aside for the Superannuation Fund. The Government is having a rush of blood and it is scaremongering about the dangers of accident compensation and the funding deluge there, yet it is not making any commitment whatsoever to funding superannuation into the future. Where is the logic in that? I hope that someone from the National Party will explain the logic in that. It is an absolute indictment.

As I said before, our accident compensation scheme is the most comprehensive compensation system anywhere in the world. It is more effective than Australia’s system.

Hon Dr Nick Smith: Is it financially sound?

LYNNE PILLAY: It is financially sound. Labour members are asking whether we have to look at going into the future and keeping the scheme financially viable. Of course we do. We will do it through consultation; we will do it through working with people; and, most important of all, we will do it through investing in schemes that prevent accidents. But what are we seeing under this Government? We are seeing those schemes being axed. The very things that prevent accidents, and that encourage the good behaviour that does not lead to accidents, are being axed by this Government.

Hon Dr Nick Smith: If they worked, why are accidents still going up?

LYNNE PILLAY: That is the Minister’s argument: if something does not seem to have worked, then let us axe it. For the Minister for ACC to sit there and claim that preventive schemes that educate—

Hon John Carter: No, he never said that.

LYNNE PILLAY: The Minister did say that. The best investment we can make in the accident compensation system is in accident prevention.

Hon Dr Nick Smith: Even if it doesn’t work?

LYNNE PILLAY: It does work. Again, the Minister is scaremongering by saying that it does not work.

I also want to talk about the cuts, and they are cuts. Let us not misinform people by pretending that these cuts are here to help victims. In terms of the sensitive claims—

Hon Dr Nick Smith: Do you support self-inflicted claims?

LYNNE PILLAY: Never mind trying to change the subject! Every time members on this side of the House talk about sensitive claims—[Interruption] Let us talk about the cuts in counselling compensation for victims and survivors of sexual assault. Let us talk about a Government that argues that it will implement guidelines no matter how many professionals are opposed to them, no matter how many people meet or ask to meet the Minister about them, and no matter how many people sign petitions. This Government says that guidelines are in the victims’ interests. That is simply just not true. I put it to this House that that is the biggest, most offensive insult of all. At least with other groups, such as motorcyclists etc., although there is a degree of untruth in it, the Government is saying that it wants to cut costs. The most offensive thing to victims of sexual assault is that this Government is saying: “We are here to help you. That is why we are going to move the goalposts, so it is even harder to access the counselling that you need and deserve. That is how we are going to help you.”

Hon Dr Nick Smith: That’s your law.

LYNNE PILLAY: That might be our law, but I have just seen a press release that states the Minister is going to review the sensitive claims unit. Mind you, it will take 6 months, but the Minister will review that unit. I urge the Minister to delay the implementation of the guidelines until the review is complete. There is evidence from every professional spoken to, from every victim of sexual assault and survivor of sexual assault who has the courage to speak out about this—

Hon Dr Nick Smith: Not true.

LYNNE PILLAY: The Minister should listen to them and say: “Right, we have said we got it wrong. We will carry out the review. But until that time happens, we will not implement these Draconian changes that will only serve to re-victimise victims.” That is what I urge the Minister to do. I can see that he is considering that very carefully. I thank him for doing that.

Hon Dr Nick Smith: I am not going to interfere with clinicians.

LYNNE PILLAY: The Minister says he is not going to interfere. That is really rich coming from him. I urge him to talk to the professionals.

Hon Dr Nick Smith: What’s your qualification to make clinical decisions in this area?

LYNNE PILLAY: I am not pretending to make them. I listen to the professionals.

Hon Dr Nick Smith: Why won’t you come to the briefing with the clinicians?

LYNNE PILLAY: I am coming to Mr Smith’s briefing, actually, and I do listen to the professionals. At the risk of sounding a little big-headed, I, coming from a nursing background, probably have at least some understanding. But my claim to any knowledge about this comes from listening to counsellors, psychotherapists, victims and survivors of sexual assaults in New Zealand who have said to us: “Please don’t try to re-victimise the victims.”

SUE BRADFORD (Green) : The Green Party will oppose the Injury Prevention, Rehabilitation, and Compensation Amendment Bill at every step of the way. I am really sorry that National has chosen to stick to its ideological guns and once again begin the process of readying the accident compensation scheme for privatisation by cutting back entitlements and raising some levies unreasonably.

In almost every respect this bill is a shocker, and I hope all affected individuals and organisations will feel moved to make clear, strong submissions to the select committee. Some of those impacted by the Government’s attacks on the accident compensation scheme, notably sexual abuse survivors and those who work with them, and also motorcyclists, are very effectively filling MPs’ in-boxes and holding rallies already. But many more people are and will be affected than the people in those two sectors. Accident compensation is something most of us prefer not to think about until we are in a situation where we have had an accident or injury ourselves. Then, suddenly, it becomes a serious business, in terms of whether we are eligible for cover and support, and, if so, for how long, and in which ways. Slashing people’s entitlements and making changes in the way that vocational rehabilitation works will have insidious impacts that will undermine the health and well-being of many New Zealanders for a long time to come.

The fundamental problem with the bill in front of us today is that it is based on a false premise. The National Government has deliberately manufactured a crisis, and even before the time of the shift to the new board chairmanship early this year National was cooking up this diabolical brew. All through 2009, and with accelerating intent, National has been creating the notion that the accident compensation scheme has an impossibly huge deficit, that its liabilities have blown out, and that the only things that will save us all from impossibly huge levy rises are measures like those contained in this bill and the readying of the accident compensation scheme for partial or full privatisation. The major reason for the so-called liability blowout is not costs, although there is no question that costs are continuing to rise, but rather it is the change in the assumptions underlying the accounting and forecasting practices of the Accident Compensation Corporation (ACC).

The big mistake that Labour made was to push for the full funding of potential liabilities by 2014. That was the first step on this slippery road. The one thing that National is doing that we do support is pushing out the date for fully funding the residual claims liability to 2019, although the Greens actually believe that if we are to have an honest conversation about accident compensation, as the Prime Minister proposes, we should look seriously at the possibility of returning completely to a “pay as you go” system. Full funding ahead traps the scheme and the Government in a private insurance accounting model. On top of that, the ACC board had changed some of its other accounting methodologies. For example, $1.3 billion has been added through claims experience and modelling changes, $1.3 billion for revised economic assumptions, $500 million for adding more safety to the risk margin, and $1.3 billion for the cost of “future Cabinet and regulated rate increases”, whatever that means. I thank last week’s excellent New Zealand Listener editorial for that compilation of figures.

At the same time as the ACC board and the Government continue to push the line that the scheme is impossibly in the red, in fact this year its revenues were $4.5 billion, which is $1.5 billion more than it spent on claims. As some experts keep saying—sadly, like voices lost in the wilderness—ACC is a mature organisation with enough reserves to pay for around 3½ years of claims. That is the highest level of reserves the scheme has ever held. Sir Owen Woodhouse, famous for the principles on which our current accident compensation scheme is founded, has stated clearly that he did not intend it to be pre-funded, and that the latest Government moves are beginning to undermine its very heart.

The report of the Woodhouse commission recommended a 24-hour-a-day, no-fault compensation scheme that covered people whether they were injured at work, at home, at play, or on the roads. The underpinning Woodhouse principles are community responsibility, comprehensive entitlement, complete rehabilitation, real compensation paid at 80 percent of previous earnings for as long as a person is incapacitated, and administrative efficiency. An injury prevention, rehabilitation, and compensation scheme that at least strives to live up to those principles is what is at stake here today. The bill in front of us hacks into those fundamentals in a variety of ways, only some of which I have time to mention here.

One of the most pernicious changes is in relation to vocational independence assessments. They are used by ACC to decide whether a claimant who is receiving compensation is fit to return to work. Once people are considered to be ready to go back to suitable employment, their weekly compensation is stopped within 3 months, or sooner, of course, if they start a job. The bill removes the requirement that the vocational assessment takes into account what a person earned or did before the injury, and reduces to 30 hours the minimum number of hours that the person can be assessed as being able to work per week. That means in practice that someone who was earning, say, $1,500 a week before an accident will lose his or her weekly compensation if he or she is found to be able to do a job for 30 hours a week for the minimum wage—that is, $375 a week. It does not matter that the job might be to do something far below the person’s experience, education, or capability.

The broader impact of lowering the bar in this way is that, overall, people will be pushed out of the system a lot more quickly. For a number of them, that does not mean necessarily that they will get a job, but simply means that they will be forced into the benefit system or, in the worst-case scenario, which happens quite often, they will end up with no work and no income, because their partner is in paid employment.

A second major area of concern for us is, of course, the many disentitlements that the bill contains. The cuts to sexual abuse counselling are one of the meanest attacks on people’s well-being, and are deeply ironic, when one considers National’s and ACT’s rhetoric about providing support for the victims of crime. That change in accident compensation policy is a deliberate reinterpretation of the law, aimed at ensuring that only those sexual abuse survivors who are diagnosed as having a mental illness will receive financial assistance from the scheme. That will mean that many people who until now have had support will no longer get it. Many sexual abuse survivors simply will not seek cover and counselling, for fear of the stigma of being labelled as being mentally ill. Others will go through the process and will find that they do not receive cover anyway, which in some cases will actually increase the likelihood that they will go on to develop severe mental illness, or even end up committing suicide in the future.

On the subject of suicide, I say this bill also goes as far as to end accident compensation entitlements relating to wilfully inflicted self-injury and suicide. That means that in future a suicide victim’s family will receive entitlements in only the very narrow circumstances of the victim’s mental injury being caused by sexual abuse or as a result of a physical injury, or by a traumatic event in the workplace. The suicide victim will also need to have already gone through the process of having his or her claim for mental injury approved under the accident compensation scheme before his or her family can get any entitlement. It will not matter whether the victim was incapable of forming a rational intent, or whether the suicide was caused by some abject failure of the mental health services to provide appropriate care and treatment. This law change will impact deeply on affected families, especially low-income family and whānau, at a time when they are most desperately in need of support.

These disentitlements and others are why I simply cannot understand the Māori Party’s support for this legislation. Cutting back on who receives accident compensation and on how long people receive it for, and lifting motorcycle levies by monstrously huge amounts will, in different ways, have a very damaging impact on people on low wages and benefits—a population among which, sadly, Māori are disproportionately represented.

Instead of raising levies and cutting back on a whole range of entitlements, we should be having the honest conversation that Mr Key referred to. For example, let us talk seriously about a “pay as you go” scheme. If we reverted to that, levies could be reduced in the short term, because the accident compensation scheme would no longer have to add to its investment. In moving to full funding, the Government is effectively borrowing in order to invest, with the inherent risk of further losses being caused by investing, as happened last year when the global financial meltdown added about $1.6 billion to the scheme’s liabilities. Reverting to a “pay as you go” scheme would simply mean that we would go back to seeing the scheme as being part of the functioning of the Government, just as we do the provision of benefits and pensions, health care, and education. The reserves that have already been built up could be used to smooth out future levy increases.

Hon Sir ROGER DOUGLAS (ACT) : ACT will be voting for the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. Unlike Sue Bradford, the member who has just spoken, ACT takes an opposite view. The member who has just spoken said that this legislation was too harsh, but ACT believes that it does not go far enough. However, the legislation makes improvements, and we will, therefore, be supporting it.

This bill does not reform the accident compensation scheme. This bill keeps the scheme largely in its current form. It continues to fund the scheme through compulsory levies, and it does not apply any ongoing commercial pressure to the scheme’s operation. All it does, in fact, is manage the pay-out system a little differently. It stops those who harm themselves on purpose from getting payouts. It stops criminals who injure themselves breaking into someone’s house from getting payouts.

In reality, there is nothing of great substance in this bill. There is the same kind of management of the scheme that Labour undertook, except that this bill, rather than expanding entitlements, reduces them in a number of ways. Nothing in this bill deals with the fact that from the scheme’s inception, it was a flawed Ponzi pyramid scheme. In the beginning it operated on a “pay as you go” basis. That meant that for many years it seemed to be cheap. The full costs were not apparent, because the scheme had not fully matured. All those people with long-term injuries were not in the claims system in those early years. Unfortunately, those years of low costs saw the range of entitlements expand, so that by the time the system had reached maturity and had absorbed all those with long-term injuries and covered the expanded entitlements, the scheme no longer looked cheap. It looked as if it cost an awful lot.

These problems are set to get worse. We have in New Zealand an ageing society. An ageing society implies not only payouts but also a lower proportion of people paying levies to cover the non-earners account. Because the scheme was essentially a Ponzi scheme in the beginning, it required an ever-increasing number of people who were working to pay levies or substantial rate increases.

To Labour’s credit, it realised that that was a problem. It realised that operating the scheme as a “pay as you go” scheme was not viable when we have an ageing population. That is why, I believe, Labour announced that the scheme would be fully funded by 2014. Unfortunately, Labour also undertook a massive expansion of entitlements under the scheme, meaning that despite its promises to have the scheme fully funded, the unfunded liability expanded.

The scheme’s unfunded liability now stands at around $13 billion, up $5 billion in the past year. If any private insurance company had the books that the scheme has, it would be declared bankrupt. The only reason that the scheme still exists is that it has the capacity to increase its levies. In essence, it is solvent only because it can force people to cover its costs and has the Government standing behind it.

In these circumstances, the only viable way to ensure that the scheme delivers results for reasonable prices is to open it up to competition. If people can get cheaper rates elsewhere, then they should be allowed to leave. If that means that risky workplaces start paying higher premiums, then so be it. It will encourage them to improve workplace safety.

The benefits of competition become apparent if one listens to the nonsense peddled by Labour in its opposition to it. The first thing Labour will tell us—and its members said so today—is that costs will increase because we now have to pay the profit margins of private companies. The facts speak otherwise. The last time that competition was introduced, premiums declined by around 30 percent. The argument that profit margins lead to higher prices is simply absurd. By that logic, Labour would nationalise everything.

The second thing that Labour has said is that premiums were lower only because private companies offered cheap rates as loss-leaders. Well, that is very interesting. A private insurance company has to have its books signed off by an actuary. That actuary has to say that the income the company received in that year takes into account not only its costs in terms of what it wrote out in cheques during that year but also whether sufficient funds are left over to put into an account that would meet its future liability. Labour, on the other hand, oversaw a scheme that was meant to be moving towards being fully funded, yet its funding liability moved in the other direction and actually expanded.

The system needs to be fully funded, but, in my view and in ACT’s view, it should also be opened to competition. We can look at it this way. Every single monopoly, be it the post office, Telecom, or coal has always delivered more for less when it has been opened up to competition. Three things happened: prices went down, the quality of their services went up, and there was more variety in the products offered. I believe that that would happen if the accident compensation scheme was opened to competition. In other words, there is no reason to think that the scheme would be any different from the post office or Telecom. In fact, it is even more important in some ways to open up the scheme to competition.

Currently, the scheme sets a flat-rate levy based on the risk in an industry. Those employers that have a safe environment subsidise those that have an unsafe environment. There is little commercial incentive to create safer workplaces. Private competition would ensure that that happened. By keeping the scheme as a monopoly and not properly allowing risk pricing to emerge, we are increasing the number of workplace accidents.

In the private market, we have insurance excesses. We have no-claim bonuses. We have risk-based insurance. The private market is all about mitigating risk. The scheme, on the other hand, is about forcing good employers to subsidise bad ones. That is why the last time the scheme was opened to competition, not only did costs decrease but also we saw a decline in the number of accidents. Those who oppose competition in the scheme are not just wasting taxpayers’ money. They are also ensuring that more people suffer accidents in the workplace than is necessary.

RAHUI KATENE (Māori Party—Te Tai Tonga) : When Sir Owen Woodhouse presented the results of the 1967 royal commission report on workers’ compensation, he summed them up by concluding: “Injury arising from accident demands an attack on three fronts. The most important is obviously prevention. Next in importance is the obligation to rehabilitate the injured. Thirdly, there is the duty to compensate them for their losses.” They were simple goals arising out of an admirable commitment to principles such as community responsibility, comprehensive entitlement, complete rehabilitation, meaningful compensation, and administrative efficiency. The important challenge before Parliament now, some four decades and more later, is to assess whether these goals are still relevant, whether they have been achieved, and how successful the scheme has been in following them.

Seven years after the Woodhouse report, the Government of the day created the Accident Compensation Corporation (ACC), introducing what would later be described as a revolutionary model for cost-effective rehabilitation and compensation. The essence of the exchange negotiated by the State was that, in return for giving up the right to sue, all New Zealanders had the right to a new, universal, 24-hour, no-fault coverage against injury, along with associated rehabilitation and compensation services. For the last 35 years New Zealanders have been contributing to injury accounts that variously cover employers, the self-employed, earners, non-earners, and motor vehicle and medical misadventure.

Part of the process of change introduced by the Injury Prevention, Rehabilitation, and Compensation Amendment Bill is the proposed increase to three of the levies: the work account levy, the earners levy, and the motor vehicle account levy. The justification is apparently an increase in the number of claims and rising health costs. Yet conflicting information seems to question why these levy changes need to occur. The recent ACC annual report suggests that claims have stabilised. In fact, there was a 7 percent decrease in the last financial year. The annual report also points out progress in the rehabilitation of workers. The goal was to have an 88.5 percent rehabilitation rate 9 months after injury. The achieved rate was 87.5 percent. One percentage point hardly seems worth making a fuss about. Why would we want to review a scheme that has been lauded as a world leader, on the basis of a one percent difference? What could be the rationale for a bill reforming accident compensation?

The Māori Party has raised one major issue before in this House and consistently throughout the term of the previous Government and the current Government, and it demands reform. That issue is the significant difference in the rate at which Māori and the general population claim for accident compensation services. This difference appears to be most marked for non-earners, the young, and the elderly, who are arguably the most vulnerable New Zealanders. The difference in rates is even more inexplicable, given that Māori are overrepresented in injury statistics across all ages and in all areas. In fact, injury is the leading cause of death for Māori aged 30 and under, and most of those deaths are preventable. The March 2008 report of Statistics New Zealand revealed that Māori have significantly higher injury rates by occupation, with 155 injuries per 1000 fulltime-equivalent workers, compared with 111 for Pākehā. It is higher particularly in occupations such as agriculture, fisheries, manufacturing, and trades. There are also significantly more injuries in lower-paid occupations, where Māori are overrepresented.

Meanwhile, ACC figures continue to show that Māori make fewer claims to accident compensation and are less likely to receive compensation entitlements. ACC has tried to do something about this by establishing formal channels such as the Māori advisory board, Te Roopu Manawa Mai, to exchange valuable ideas and information. It also introduced a Code of ACC Claimants’ Rights, which contains eight rights encouraging positive relationships between claimants and ACC as they work together for the claimant’s recovery. Although ACC undertook initiatives to improve access through information programmes and better engagement with Māori communities, these programmes have not demonstrated significant success in closing the delivery gap. Access for Māori has been consistently lower than for other groups. The data that is available demonstrates that Māori receive treatment at a lower level than non-Māori, and where services are accessed, they are accessed later, and claimants exit programmes earlier. A similar record applies in the area of injury prevention.

If any amendments are to be made to the Injury Prevention, Rehabilitation, and Compensation Act 2001 to reduce levies and Crown costs, one would think that the broader question of eligibility for accident compensation support would be high on the change agenda. The absence of data around the business significance of Māori claimants could be something the corporation addresses as a priority going into the future. For example, if we were to plan for a given level of improvement in access for Māori, such analysis might estimate what the impact might be on ACC’s bottom line. Before we even begin this exercise, we know intuitively that because Māori are a small population group and constitute a small group of claimants, it is unlikely that Māori will be considered a high-value market segment to provide a financial incentive for private insurers to develop Māori-responsive business strategies, such as the use of rongoā Māori or mirimiri treatments in the context of a rehabilitation regime.

The Minister for ACC, Nick Smith, promoted the context for the changes outlined in this bill as the need to return to a position where accident compensation is both affordable and fair. The goal of being affordable and fair sets up a spectrum ranging from institutional racism at one end to cultural competency at the other. Under the bill, Māori in high-risk occupations will pay higher levies. High-risk occupational areas have significant numbers of Māori workers, and the bill provides for a matching of risk environments with levy rates, so the cost of cover can be expected to increase. Across the board, a possible result will be employers structuring employment relations to shift responsibility for risk to employees, along the lines of the independent contractor model. There is reason to expect that this model would eventually apply across the board. Preliminary analysis of the changes also reveals that they will disproportionately impact on vulnerable workers and low-income families, as the bill decreases access to cover and decreases the level of compensation to these claimants.

At the other end of the spectrum is a scenario in which the accident compensation scheme values cultural competence. Professor Mason Durie describes cultural competence as being “about the acquisition of skills to achieve a better understanding of members of other cultures”. Culturally competent care involves practitioners establishing and maintaining positive relationships through improving their understanding of tikanga Māori and effective communication. The end goal, of course, is to achieve better health care outcomes for Māori. Cultural competence is a major focus for the Māori Party. We campaigned on it. We have consistently spoken of it across the health and social sectors, and this bill is no different.

There is another dimension to our decision to vote for this bill’s being referred to select committee to let the people have a say on accident compensation, and that is the potential for Māori entrepreneurship and enterprise to rise to the opportunity for innovation. In 2007 ACC undertook a risk-profile review with groups within the Ngāi Tahu umbrella, resulting in a considerable annual levy reduction. The Federation of Māori Authorities has also been interested in pursuing dialogue around levy rates and the possibility of a Māori consortium leading a corporate arrangement with ACC, possibly focusing initially on specific industry sectors such as forestry, fishing, construction, and farming.

For all of these reasons—and for more reasons that will, no doubt, arise from submissions—we agreed to support the introduction of the bill and its referral to a select committee so that people can express their views. We want to hear about people’s experience with the scheme. Among others, we want to hear from workers and their whānau who have suffered an injury, health workers, and providers of rehabilitation services. We do this so that the accident compensation scheme can once again be a world leader; so that it can be affordable, fair, and culturally competent; and so that it can remember always to focus on the best interests of the community.

ALLAN PEACHEY (National—Tāmaki) : Thank you for the opportunity to speak in the first reading debate of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. There is no better place to start in making a contribution to this debate than to go back to the words of the chair of the New Zealand Medical Association, Peter Foley: “Along with the rest of New Zealand, we are stunned at the situation ACC finds itself in.” That was Dr Foley, chair of the New Zealand Medical Association. I listened with care to the contributions of the two Labour members who spoke, Mr Parker and Ms Pillay. Both of them seriously missed the point. There is only one thing that New Zealanders want to hear from Labour on the subject of accident compensation, and that is three simple words: “We are sorry.”

Of course, Labour has a major problem with the scheme. It has a major problem with the scheme, I say for the benefit of Ms Pillay. It was not Labour’s idea. It was an example of far-reaching social legislation introduced by a National Government nearly 40 years ago. The National Government now finds itself trying to rescue the scheme from its mismanagement under 9 years of the previous Labour Government. I ask Mr Goff to say sorry. It is time for Mr Goff to say sorry to New Zealanders in respect of the scheme. They were so badly let down by the Labour Government that he was a part of.

Members should look at the figures that Labour is in denial over. On 9 October the 2008-09 annual report of the Accident Compensation Corporation (ACC) was released, reporting a loss of $4.8 billion. I invite the next Labour speaker to get to his or her feet and deny the accuracy of that figure. We know that it is true. That comes on top of a $2.4 billion loss for the year before. It tells the current Government that this scheme, as it currently stands, is unsustainable. The primary purpose of this bill is to save the scheme. It is too late for the crocodile tears on the other side of the House. It is too late to pretend that things are not as bad as that, because they are as bad as that. Mr Goff should say sorry. That is what the people of New Zealand want to hear from him.

The primary purpose of this bill is to reduce the scheme’s ongoing costs to make it more affordable for current and future generations of New Zealanders. The changes contained in this bill will make the scheme more affordable, more sustainable, and fair. It will improve financial reporting and accountability, and will provide for closer working relationships between Government agencies and ACC.

To sum up, this bill will save the accident compensation scheme. This bill will rescue it from the mismanagement of the previous Labour Government. Mr Goff should say sorry. It is time to say sorry.

Hon RUTH DYSON (Labour—Port Hills) : There certainly is a lot to be sorry about, as the House considers this legislation. I feel sorry for seasonal workers and their families. I feel sorry for people who have a work-related hearing loss. I feel more sorry, than for anyone else, for people who have attempted or committed suicide, and for the loss their families have to endure not only because of the loss of their loved one but also because of the further insult that the Minister for ACC dished out to them in a pre-determined, calculated way. Further, they have to suffer because of their disentitlement in this legislation.

Allan Peachey, the member who just resumed his seat, quoted Peter Foley, the chair of the New Zealand Medical Association. Although Peter Foley welcomed this announcement of the privatisation of accident compensation, his predecessor, Dr Pippa McKay, who is an obstetrics and gynaecology specialist from Canterbury, said that when she heard the announcement of privatisation on the radio, it made her groan and gave her a sense of déjà vu. She said that the last time the scheme was privatised, during which time she was leading the doctors, it was just a nightmare. She knows what she is talking about. She has been through this crazy experiment in the past, and she has described it, from a general practitioner’s point of view, as a nightmare.

This bill is very easy to summarise. It says that New Zealanders will pay more and get less. They will pay higher levies to the scheme or to their private insurance companies, and they will get a lower level of entitlement. The legacy that Dr Nick Smith as Minister for ACC will leave New Zealand is this: pay more, get less. It was only in March this year, and it is not even November yet, that Dr Nick Smith was adamantly denying any interest in introducing competition—any interest, at all, in opening the work account to private insurers. He said that would happen only if it were in the best interests of taxpayers, business, and workers. But he had one meeting with Rodney Hide and he said he would forget about that, and forget about John Key’s commitment to having an honest and open conversation about how much people will want to pay and what their level of entitlement will be.

In this bill Nick Smith has delivered what he wanted to do. He wanted to spend 6 months scaremongering around the country, telling us that the accident compensation scheme was insolvent, that it needed fixing, and that it was totally broken. He wanted to do exactly the same thing that Bill Birch wanted to do. He wanted New Zealanders to pay more money into the scheme but to get a lower level of entitlement. This is part of Nick Smith’s reforms to ensure that people get less.

The National Government knows from its polling that New Zealanders are allergic to the words “privatisation”, and “private insurers”, so it has been parading up and down the country talking about opening up the scheme to competition. Well, New Zealanders fell for that in 1998 but they will not fall for it again. We know that this is not about more efficiency, fairer entitlement, better access to rehabilitation, and an easier return to work. We know that this is about having private insurers come in, and about having New Zealanders pay more money and get a lower level of entitlement. That is all that this is about.

Some specific areas in this legislation are described quite accurately in the explanatory note of the bill. I was very interested in the comments in the section on “workplace gradual process, disease, or infection”, which reinstates a three-part rule in order to get cover. It quite specifically says that this will reduce the number of people who receive cover. It quite specifically says that it does not matter whether someone has an injury. It does not matter any more to Dr Nick Smith and his National Government colleagues whether someone is so badly injured in his or her workplace that he or she cannot work any more. It does not matter that that person is in pain. To the National Government, it matters only that that person is costing the country money, and costing that person’s employer money if it is a workplace injury. That is not acceptable to the Government. It does not matter to Dr Nick Smith if a person has been injured at work and is so badly injured that he or she cannot even go to work any more. Under this legislation, quite explicitly it says that this will reduce the number of people receiving cover. Does this legislation fix the injury? Does it make the injury go away? Does it suddenly restore a person to wellness? Does this legislation get people access to the treatment and to the rehabilitation they need to be able to work and support their families? No, it does not. This bill states that it has upped the bar and increased the threshold. So even though that person still has exactly the same injury as he or she had last year—tough! That is what Nick Smith says to injured people. He says “Tough!”. They are injured but they will no longer get cover.

This is the same approach as that for hearing loss. People who suffer hearing loss in their workplace currently get accident compensation cover. They have done so for a long time, but that cover is out the door now. People with hearing loss now have a 6 percent threshold to reach before they are entitled to receive cover. So if someone has lost only 5 percent of his or her hearing in the workplace and wants some help to hear fully again, what will Nick Smith say to that person? He will tell that person to sod off. That is basically what the Minister will say. He will say that, yes, he knows the person has a 5.9 percent hearing loss, but the National Party does not care about that because that person is costing his or her employer money. Well, in my view, if employers allow a workplace to be so noisy that people lose part of their hearing, then those employers should front up and bear the responsibility and the cost for the hearing loss their workers have suffered. That is an employer’s responsibility.

This bill says “Tough!” to the people who have not reached that magical 6 percent threshold, but the worse insult, in my view, is to the people who were so callously insulted by the Minister, Nick Smith, last week. That was when he said that under accident compensation legislation, people get such great money if they kill themselves that if he had a terminal illness and his doctor said that in 30 days’ time he would die, he would wait till the 29th day and then throw himself under a train so that his family would be better off. Not only was that a highly offensive comment about the state that people are in when they injure themselves or commit suicide but it is deeply offensive and hurtful to the families who have lost loved ones through suicide. Today in the House Dr Smith said that suicide was not an accident so it should not be covered. Well, a lot of injuries are not accidents. A lot of injuries occur to people who know full well that they have a very high risk of having an injury. In my view, if people are so unwell and so distressed that they attempt to do harm to themselves, even to the point of killing themselves, their families deserves all the support that we can give. If it is good enough for the accident compensation scheme to offer financial support to and cover the injuries of those who go hang gliding and then crash and do serious damage to themselves, to those who go mountain climbing, to those who play sport, or to those who drive a car, when all those people know full well the risks they are taking, then, in my view, people who are so unwell that they harm themselves or commit suicide deserve to have their injuries covered, as well. I think that the Minister made a highly offensive contribution.

This legislation is a winding back of entitlements that New Zealanders signed up to in a social contract. We gave up the right to sue, but under Nick Smith we are paying more and getting less.

MICHAEL WOODHOUSE (National) : I begin by affirming my party’s commitment to the principles in the royal commission report, so well articulated by the member Rahui Katene, but also to the Accident Compensation Corporation (ACC) itself, and its goal of ensuring a fast and lasting return to work or independence for New Zealanders. But having said that, an awful lot has changed in the 42 years since the Woodhouse report was published. It is important to periodically review whether the scheme continues to deliver value for New Zealanders; and if ever that review was necessary, it is right now.

I congratulate the Ministers on their timely and carefully considered amendments, as set out in the bill. It is a bit surreal to have to defend the changes being proposed by this bill, in the face of the accident compensation scheme’s recent financial performance. I think the public have been a bit numbed into disbelief by the scale of the numbers, such as $2.4 billion 2 years ago, and $4.8 billion in the last year. The first of those reports, of course, was signed off as correct by the previous Labour Minister, Maryan Street. She had no problem doing so, but now is part of a party that continues to deny that a problem even exists. Frankly, it strikes me that Labour members are either completely ignorant of the way the scheme works, or deliberately evasive about their role in the parlous financial state that it has found itself in. That is no real surprise, given Labour’s contribution to the situation. Even Labour’s finance spokesman, Mr Cunliffe, adds to the chorus of people who think that because there was a cash surplus, everything is all right in the scheme. It beggars belief that that is the extent of Labour’s financial literacy. But it does seem to be the theme of the previous administration, which believed honestly that it left office with everything all right. It is a bit like saying somebody had jumped out of a plane without a parachute and is OK 50 metres above the ground.

Members opposite might not think that the accounting result is real, but the proposed levy increases that are the consequence of that are very real. The earners levy, for example, will have doubled in 2 years under the proposed levy increases, if nothing happens. I certainly do not need to remind the House about the response that the motor vehicle levy increase has. At least, the Green member who spoke was honest in her party’s preference that it wants to go back to a “pay as you go” system. In contrast, the Labour Party does not oppose full funding, but does not want to pay for it. Well, it cannot have it both ways.

Contributing to that confusion was Labour Party President Andrew Little, who attacked just about everybody involved in the preparation of that financial report: the accounting staff, the auditors, the actuaries, the independent overseers, and even the Minister’s office. As a chartered accountant, I am frankly insulted at the accusation that the report, which was prepared absolutely in accordance with financial reporting standards, should somehow have been made to look worse for political ends, particularly when that accusation comes from the president of the party that is the main reason for the state that the accident compensation scheme finds itself in.

Mr Parker would have us believe that the performance of the scheme is down to negative investment returns. It is true that it has suffered in the downturn, albeit ahead of the rest of the market, and it should pick up. But two things are not being said by Mr Parker. Firstly, the projected upturn is already built into the projections; and, secondly, the increases in the scheme’s unfunded liability started 4 years ago, which was well before the economic downturn. But even when it was apparent, what was Labour’s response? It continued to widen the entitlement base, and allow ACC to take its eye off the rehabilitation ball, even though working to exit claimants is not only good for claimants but a legal requirement, and then refused to accept ACC’s recommendations for levy increases that more accurately reflected the cost of those changes. In a nutshell, when it should have been applying greater levy increases, and at least holding entitlements, it was doing the opposite on both fronts.

When the financial chickens come home to roost, what happens? We had the debacle of the failure to disclose the true state of the scheme, particularly in the non-earners account. On several occasions in the lead-up to the pre-election fiscal update, Labour had a chance to disclose what was going on and chose not to. Despite being in clear breach of the Public Finance Act, the Opposition used a minor comment in the Jenkins report to lump complete responsibility for that on to Treasury in an attempt to remove itself entirely from any blame. So much for loyalty to Government staff, or the ownership of one’s actions!

Well, the Opposition can blame Treasury officials all it likes. But I think Dr Cullen, a very experienced Minister of Finance, the previous Minister Maryan Street, and the Cabinet knew exactly what they were doing. I think they made that decision not to include ACC’s parlous financial state in the Pre-election Economic and Fiscal Update, and the responsibility should lie firmly at Labour’s feet.

I come to some accusations that the Opposition levelled. It said that the changes in this bill are somehow against the stated intention of the original royal commission report. Members opposite would do well to familiarise themselves with that report, because they quote it a lot, but there are a number of changes that are entirely consistent with the Woodhouse report. The first has been mentioned; it is self-inflicted injury. The report recommended that it “should not be the subject of compensation”, nor should the majority of sickness or disease. It said “the general basis for protection should be bodily injury by accident which is … unexpected”, but to “the exclusion of incapacities arising from sickness or disease”.

Another matter is the importance of using classification systems like ICD or DSM-IV—systems that have been very recently much criticised by the Opposition. All of this underscores the fact that the scope of compensation has been an issue that has challenged successive Governments since 1974, and it is not appropriate to say that remedying the nonsense that went on over the last 9 years by the previous administration is somehow in breach of the underlying principles of the scheme.

I shall touch on comments by Labour spokesperson Mr Parker about whether changes to the scheme mean widespread cuts to entitlements and that the only way to save money in Vote ACC is by cutting those entitlements. It is absolute nonsense. The best way—

Carol Beaumont: Then why are you doing it?

MICHAEL WOODHOUSE: I tell that member to listen up and I will tell her. The best way to reduce expenditure is to reduce the rate of injury and to rehabilitate people in a more timely manner. It is as simple as that, and, frankly, one of the more disappointing aspects of the changes being made to accident compensation by the previous administration was the way in which ACC was tacitly encouraged to take its eye off the ball in rehabilitation. It was a kind of “come one, come all” approach. It meant that to get people back to work or to full fitness sooner than they otherwise might be is a bad thing, or that they are being kicked off the scheme. It simply is not the case.

The legislation requires ACC to work as hard as it can to ensure a return to work or independence. Not only that, but we owe it to the claimants to do that, even when the challenge of getting back to work after time off is pretty daunting for them. In fact, that is when they need the most support. It is also when ACC should not shirk its responsibilities in that regard. Unfortunately, rehabilitation rates have been declining significantly over the last few years, and I do not think that is down to a change in the population base, or an ageing population. It has to do with the way we approach the rehabilitation of our claimants.

The bill extends the time for full funding of pre-1999 claims, and I am sure the Opposition will not be opposing this, because Mr Parker even had a member’s bill to that effect. We have a widening gap between the present value of the future cost of residual claims and the asset base to support them. Extending the time for fully funding on its own will not take pressure off levy payers in the long term, so we need to ratchet up our rehabilitation for those claimants. Some who have been on income compensation for years will be a challenge to be rehabilitated, but I support and encourage ACC’s efforts in that regard.

One of the philosophical things to establish is whether accident compensation is an extension of the welfare system, or an insurance scheme. There is no doubt in my mind that accident compensation is an insurance scheme. When premiums are being set according to pools of risk, and when the premiums go up and down according to the claims rate and claims duration, which is the key cost driver, it is an insurance scheme. There is absolutely no doubt about that.

I conclude by congratulating the Minister on his efforts to bring the public’s attention to this very important financial risk to the Crown, and on involving me in some of the policy discussions on the amending legislation, but mostly on his courage in doing the right thing by New Zealanders, by ACC, and by its stakeholders in the face of considerable hostility from the Labour Opposition and its union supporters. I congratulate the Minister and I commend the bill to the House.

CAROL BEAUMONT (Labour) : If the previous speaker, Michael Woodhouse, thinks that is hostility, he has not seen anything yet. I rise proudly to speak against the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, and to confirm that Labour will be opposing this legislation. The bill is another example of a Government that does not care about the needs of ordinary New Zealanders.

The changes being proposed in this bill, and the other changes being mooted in the area of accident compensation, will, no doubt, increase costs, reduce entitlements, and move further to an insurance model—I think that the previous speaker made that pretty clear—and away from the principles of our world-class accident compensation scheme. During tough times, that will put costs back on to ordinary New Zealanders. It is a cost-shifting exercise, and it will be New Zealanders who pay. The costs do not go away; they are merely shifted to the injured person.

I want to talk about some of the history of accident compensation, because a number of people, including Mr Peachey, have talked about that. I quote Sir Owen Woodhouse, who said that accident compensation changes being mooted by the Government were uncaring and predatory, and that they breached the principles of the scheme he authored as head of a royal commission in 1967.

The accident compensation scheme, implemented in 1974, was the first comprehensive, no-fault accident compensation scheme introduced in any country using the British legal system, and it did some very important things. In particular, it ended costly legal battles to force employers to pay compensation for work injuries. It also cut administrative costs from about 30 percent in private insurance schemes to 10 percent. There was a very good comment by Tapu Misa in the New Zealand Herald recently. She talked about the fact that it is easy forget how revolutionary our accident compensation scheme was and how visionary its architect, Sir Owen Woodhouse, was.

It is easy to forget what life was like before April 1974 when the accident compensation scheme was introduced. It was not introduced just by National. It was introduced under a National Government, certainly—the Holyoake Government—but it was bipartisan cooperation that led to the introduction of the accident compensation scheme. Sir Owen described the pre-1974 situation as constant litigation and arguments about how an accident should be defined and whether it had arisen in the course of employment. He said that the benefits were “meagre and limited in duration.”, and that the process could be very long, expensive, uncertain, and unfair—for example, before 1967 only one negligence claim in every 100 was even partially successful.

I think it is important to recognise that background, because I do not believe that the changes in this bill go anywhere near what we will see from this Government. It will do a great deal more than this. So members opposite, including the Minister, can introduce this bill and say: “We had no choice but to make these changes, and anyway they are quite specific and that is it.”, but New Zealanders know that that is not it.

I remind people of the Woodhouse principles, because, again, we have referred to them in this debate. They are very important, and I think the real conversation should be about a scheme that meets those principles of community responsibility. It was felt, as a matter of national obligation and interest, that the community must protect all its citizens. In other words, we all reap the benefits of a modern, fast-paced, industrial society, and we should be prepared to pay for the detriments and not leave those who are inevitably injured to struggle on alone. The second principle was comprehensive entitlement—that it should be financed on a uniform method of assessment regardless of the cause that gave rise to the injuries. Complete rehabilitation was another principle, and none of us would argue about proper rehabilitation despite the comments from across the House that somehow Labour does not agree with or support rehabilitation. The next principle was that compensation needs to be real compensation.

Those are very important principles, and I want to know what, at this stage, the Government is doing to justify its moves to privatise, increase costs, and reduce entitlements. If we look at this bill and the things that have been said since the Government was elected, we see a cynical manipulation. It is absolute scaremongering.

Hon Dr Nick Smith: Oh yeah, we made up the $2.4 billion last year!

CAROL BEAUMONT: Let me give the Minister some examples. He talked about a very significant blowout in liabilities, and that the accident compensation scheme is technically insolvent and going down the gurgler. Let us talk about that a little bit more. What is the definition of insolvency? Insolvency is the inability to pay one’s debts as they fall due. But Dr Nick Smith’s definition of insolvency is “unless the future cost of all existing claims is fully funded by investments set aside for that purpose, it is insolvent”. Of course, by his definition the accident compensation scheme has been insolvent since the day it started. So the member’s words are a nonsense.

However, Nick Smith is right in saying that Labour agrees with the extension of the period to fully fund residual claims from 2014 to 2019. That is the one thing in this bill that actually makes sense, and, actually, that extension was proposed by the previous Labour Government. We said that it needed to happen. People are not being sucked in by the member’s comments. People are nervous about what is going on, and they are starting to get very, very angry.

I quote a couple of media commentators who have been looking at what the Government has said. In the New Zealand Herald Brian Fallow writes: “For the Government to wrap legitimate concerns about slippage in ACC’s performance in a whole lot of shrill scaremongering and scapegoating is gratuitous. Indeed it is downright irresponsible when talking about the scheme to use terms like ‘insolvent’ and ‘going down the gurgler’—even if the context is counterfactual—because there are people who are dependent on it to keep body and soul together and will do so for the rest of their days.”

In the Dominion Post Vernon Small writes: “costs are increasing, investment returns are down, the unfunded liability is swelling, and some changes are necessary. But is ACC critically injured? Labour has called the assault on the state injury insurer—an assault coming from everyone in the government from the Prime Minister John Key down—a manufactured crisis, and Labour is right.”

Sadly, as I said, people are worried and they are asking questions. They are worried about what the Government is proposing to do, and there is mounting anger. Over the course of the long weekend, I went to a number of events, and at every single one of them a range of people asked me what you were doing with accident compensation.

Mr DEPUTY SPEAKER: Order!

CAROL BEAUMONT: Sorry, Mr Deputy Speaker, not you. Well, actually, you too, but the Government—

Mr DEPUTY SPEAKER: Just stick to the point, thank you.

CAROL BEAUMONT: People are concerned about what the Government is doing. People do not trust this Government when it denies its real agenda with accident compensation. The Minister, in his first reading speech on this bill, said that the Government had no choice and that a small number of specific changes were being made. Sir Roger Douglas said that the bill is just about managing the payout system a little differently.

But what is the Government really planning? There have been so many flip-flops and changes of mind—it is almost unbelievable. On 8 March, for instance, Nick Smith said that 2011 was the earliest date the Government would allow private insurers to compete with the Government in this area. On 2 July, in response to a question from me, he said that it is not intended that the stocktake group will do an investigation into introducing competition into the work account because, quite frankly, it is not a priority. He said that it is not the area where the scheme needs attention. Today Gerry Brownlee said that every account is in an utter mess. Well, which of these is it?

In relation to the privatisation of accident compensation the Government is talking about competition in the work account. Well, that does not fool people any more. People understand that that is code for privatisation. Clearly, this bill is the first step to full privatisation and an insurance model. We have all heard about some of the possibilities being considered, such as people being required to pay excesses before they get any compensation. It is a slippery slope when we start setting up one group of New Zealanders against another. Now it is motorcyclists. What about extreme sports people or kids playing sport? In Australia children are being denied the right to play sport because their parents cannot afford the levies. Where is the honest conversation with Kiwis over these changes?

JO GOODHEW (National—Rangitata) : It gives me great pleasure to stand and support the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. This bill brings the House to the stage where we begin debating how the National-led Government will preserve and protect our 24/7, no-fault accident insurance programme. Quite frankly, after the debate over previous weeks it is time that we refine exactly what is going to happen. We need to get it out there, get it debated, and—I must say, after years of neglect—get the accident compensation scheme back on track. It gives me great pleasure to support the first reading of this bill.

Hon Dr NICK SMITH (Minister for ACC) : I move, That the Transport and Industrial Relations Committee consider the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, that the committee report finally to the House on or before 12 February 2010, 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 which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189, 190(1)(b) and (c).

Hon NATHAN GUY (Associate Minister of Justice) on behalf of the Minister of Justice: I move, That the Electoral (Administration) Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Justice and Electoral Committee for consideration.

The State agencies responsible for the administration of our parliamentary electoral system are a central component of New Zealand’s democracy. Those agencies facilitate both the right of New Zealanders to vote and their opportunity to be elected into this Parliament. They also undertake a challenging operational task. The general election commands a considerable budget and, at its height, it involves approximately 17,000 staff. Therefore, our electoral administration must be designed to provide first-class electoral services to New Zealanders and to safeguard the public’s continuing confidence in the administration of our electoral system.

Three electoral agencies are responsible for our existing system. First, the Chief Electoral Officer, as part of the Ministry of Justice, has responsibility for conducting general elections, by-elections, and referenda. The officer also administers the electoral finance regime for constituency candidates and supervises compliance with it. Second, the current Electoral Commission has a number of functions relating to political parties including registration, allocating broadcasting time, and funding prior to the election. It supervises parties’ compliance with the electoral finance regime. It also supervises compliance with the electoral broadcasting rules, and conducts public education and research on electoral matters. Third, the Chief Registrar of Electors, acting through the Electoral Enrolment Centre and New Zealand Post Ltd, is responsible for the electoral roll and enrolment.

The three-agency structure, although generally effective, has created some problems including duplication and increased costs and complexity for people dealing with the three agencies. As a result, there has been disjointed decision-making on electoral matters. Fragmentation has also become an obstacle to achieving any strategic overview of the sector’s performance and its priorities, and may limit technological development for use in future elections. There has been longstanding support for a better integrated form of electoral administration that includes the findings of the Election Framework Taskforce in 2001 and of the Justice and Electoral Committee, which has been recommending better integration since at least the 1999 election. More recently, the issue re-emerged during consultation with other political parties on the current review of electoral finance law.

Therefore, the Electoral (Administration) Amendment Bill establishes an independent electoral agency that will be given overarching responsibility for electoral administration—a new Electoral Commission. This new commission will be an independent Crown entity, placed at arm’s length from an executive Government, with a statutory responsibility to act independently when performing its statutory duties and functions. The measures in this bill have been the subject of consultation with all of the parliamentary parties, which is a longstanding convention for significant electoral reform. The new Electoral Commission will provide improved access to electoral services, as well as a more integrated, efficient, and strategic approach to electoral administration. Reform of the electoral agencies will be in stages.

The Electoral (Administration) Amendment Bill takes the most significant step in the reform exercise by creating the new Electoral Commission that will take on the functions of the current Chief Electoral Officer and the Electoral Commissioner. If the bill is passed by the middle of 2010, the new Electoral Commission will begin operating on 1 October 2010 and will be ready to administer the 2011 general election. The second stage of the reform, a transfer of the responsibility for the electoral roll to the new Electoral Commission, will be dealt with in a separate bill. Enrolment will continue to be the responsibility of the Chief Registrar of Electors until October 2012. In addition to its status as an independent Crown entity, the new Electoral Commission is also assured by a specific statutory duty of acting independently in performing its statutory duties and functions and in exercising its powers.

The new Electoral Commission will be governed by a three-member board comprising the chairperson, the Chief Electoral Officer, who will also be the chief executive, and one other person. Electoral commissioners will be appointed by the Governor-General for a term of up to 5 years, on the recommendation of the Minister of Justice. To enhance the independence of these appointments, the bill requires the Minister to consult the leaders of all political parties represented in the House before making the appointment recommendations. This requirement was added following consultation with other political parties over the shape of the proposed bill, and the Minister of Justice, the Hon Simon Power, wishes to thank all parties in the House for engaging on these matters. The new commission will also be subject to the usual Crown entity reporting mechanisms in order to monitor the performance of electoral services and the expenditure of taxpayers’ dollars during the 3-year electoral cycle. The bill also provides certainty and consistency for the staff of the current Electoral Commission and the Chief Electoral Office during the transition to the new arrangements by transferring them directly to the new Electoral Commission on terms and conditions no less favourable than those they currently enjoy.

This bill is an important step in reforming the way in which our elections are administered. I would like to commend the current electoral agencies for the high calibre of their work to date and for their valuable advice during the development of this bill. Their assistance will be even more valuable during the transition to ensure minimum risk to ongoing electoral administration. It is their professionalism that has already contributed to New Zealand’s reputation as a country with effective, independent, and impartial electoral management. The Government is confident that this bill will create more efficient and accessible electoral services for New Zealanders as they exercise their democratic rights. I commend this bill to the House.

Hon DAVID PARKER (Labour) : The Labour Opposition will be supporting the Electoral (Administration) Amendment Bill. I thank the Minister of Justice for the consultative process that has surrounded this bill. He has properly engaged with Labour, as, indeed, I am sure he has with other parties in this House in the preparation of this bill. As a consequence of that, Labour members are happy to support it in its reference to a select committee.

Initially, the Electoral Commission, which is a new body set up by this bill and not the current Electoral Commission, was to include the Secretary for Justice as a member. Labour and, I understand, some other parties said that would not be right. Of course, the Secretary for Justice is the head of a Government department, so it would not be appropriate for that office holder to hold a role on the new Electoral Commission. The Minister agreed with that, so the commission will now be fully independent, and we agree that that is appropriate. I think there is still a question as to how the commission should be appointed. I have heard some people suggest that the commission ought to be appointed by Parliament, rather than by the Minister as part of the Government. I think that some people may submit on that issue to the select committee. We in Labour would be interested to hear from submitters and be informed by them on that matter.

We agree that the new entity—which, as the previous speaker, Nathan Guy, speaking on behalf of the Minister of Justice, has said, merges the functions of the current Chief Electoral Officer and the current Electoral Commission—will provide an improvement in the way in which elections are run in New Zealand. New Zealand has a proud history of having non-corrupt elections. One of the reasons why we have those is our tradition of having strongly independent regulatory bodies to enforce the rules that surround elections, so that the public can have faith that they have an uncorrupted, honest, and transparent election process. That means they can trust the election result. That, in turn, means that people, because they think that our elections are open and honest, are more likely to participate in them. If we had a cloud over the transparency of our electoral processes, some people would be turned off from the electoral process and would not vote. That, of itself, would undermine people’s faith in democracy, because in the minds of some people it would be seen to be less representative of their interests than it currently is. They would not participate in the voting process, nor would they value the democratic institutions that we are endeavouring to protect. So Labour members agree with this legislation, and we will be supporting it.

I will make one negative comment, which is that this bill does not clean up the problem that we have in New Zealand about the lack of transparency of donations. It is all very well for the Government to say it wants to have agreement on issues relating to electoral law, but when agreement on issues relating to electoral law cannot be obtained because the Government refuses to move on its positions, then I say that is self-serving on the part of the Government. The Government could improve the degree of transparency around donations to political parties.

Paul Quinn: I can’t believe this.

Hon DAVID PARKER: Mr Quinn, who says he cannot believe this, sat on the Justice and Electoral Committee inquiry into the 2008 general election. After every election in New Zealand, we have an inquiry. It is part of the normal processes of Government; it happens every time that there is a general election. We look at the things that can be improved, and in that way we have a gradual improvement in our electoral system and it is updated to take account of recent events. This year’s inquiry, amongst other things, looked at whether we had transparency around donations. Mr Dave Henry, who is the chief executive of the Electoral Commission, gave evidence at the inquiry into the 2008 general election, and in particular he answered questions about donations.

In the select committee report back to Parliament, which I have before me, there is a record of the spending on the electoral process that was declared by the different parties. For example, the Labour Party disclosed expenditure of about $2.2 million, and the National Party’s expenditure was about the same. Other parties spent less than that: the Green Party spent $1.4 million, and the ACT Party spent $1.1 million. If there was transparency around donations, we would expect that for the majority of that expenditure corresponding donations would be recorded, for which we would know the source. But the only donations that we have transparency on were those to the Labour Party—a total of $422,000 of donations. There was $2.2 million of expenditure, but we knew the source of only $422,000 of donations. That is not transparent enough. If we think that was not good enough, I say transparency in relation to donations to the National Party was even worse. National disclosed far less than 10 percent of its sources of funds. It spent $2.2 million and disclosed the source of only $130,000 of donations. The provision of transparency about donations is one of the ambitions of our electoral laws, but they are not working when the source of less than 10 percent of the donations that came to the National Party was disclosed. In fact, that figure was very close to 5 percent; it was closer to 5 percent than to 10 percent. Between 90 and 95 percent of National’s donations were secret, and that is wrong in principle.

We ought to have transparency around donations. No one is calling for there to be transparency around donations of $5, $10, or $100; we do not need to have that kind of level of transparency. But we do need to have transparency in terms of larger donations. The amount that, at least in theory, we are supposed to make transparent as to the source of donations at a constituency level is $1,000. The Labour Party says that is what the figure should be in respect of donations to parties, as well. Without that kind of transparency, public confidence in our electoral system is undermined. We never know what policy is for sale.

Before the election, Merrill Lynch Australia said that if accident compensation was privatised—and National’s euphemism for that is “opening the work account to competition”—there would be $2 billion of accident compensation levy revenue up for grabs and $200 million of additional profit would be earned by Australian insurers. That is not in a report from me; that is in a report from Merrill Lynch Australia, in June 2008. We all know that private insurers stand to gain from the privatisation of accident compensation; there is no doubt about that. But what we do not know is whether those same private insurers were contributing to the National Party. I can never prove that they were, but it is wrong for our democracy to be tainted by that accusation. It is wrong for it to happen—and it may have happened; I cannot prove it—but it is also wrong, even if it did not happen, for our election process to be tainted by the implication that it might have happened. That, in itself, undermines public confidence in our electoral processes.

There is nothing wrong with people making donations to political parties. We rely upon donations to go about the business of democracy. But we should have transparency about who is making those donations, so that people can assess whether politicians are too accountable or whether they owe too much, if you like, to their donors in a way that reflects on a policy outcome. That is not fixed by this legislation. The Government says that is because there is no consensus around the issue of donations. But that is because the Government refuses to be part of the consensus. It is a self-fulfilling outcome, which National refuses to fix. I think there is a glaring problem with our electoral system: we do not have transparency around donations. This legislation does not fix that problem.

CHESTER BORROWS (National—Whanganui) : As I am sure the previous speaker, David Parker, will agree, the Justice and Electoral Committee is looking forward to having the Electoral (Administration) Amendment Bill come before it. The committee has a great mix of wise and sage counsel, and youthful vibrancy and enthusiasm from members such as Paul Quinn, Kennedy Graham, and Simon Bridges—I do not know which pigeon-hole he fits into. The committee is looking forward to having this legislation before it. It will be interesting, too, to be part of a consultative process in respect of electoral matters, which is a novel approach. It is something that we did not experience so much under the previous administration. I can give an indication to the committee and to Parliament at large that it will not be a case of the chair saying: “We’ve got the numbers, so we’ll just stick it to the vote and we won’t have any further discussion on it.” Committee members will enter into a debate around the table and with the submitters who come before us.

It is true to say that the threefold electoral process watchdogs that we have within our electoral system at the moment have been messy to deal with. It has been suggested for many years—in fact, for about 25 years—that they should be amalgamated into one. Although that task has been put off by successive Governments, it is good to see that the three agencies will be brought together as a result of the suggestions of the 2001 Election Framework Taskforce. It conducted a comprehensive review of the arrangements and recommended a single agency.

The taskforce recognised four basic flaws. The public, candidates, and parties were confused, and remain confused, over where and how to access electoral information services and advice, and this contributes to additional compliance costs. There is no natural coordination of effort in the system, and it succeeds only through the considerable time and work the three agencies put into coordinating their activities. But so often they overlap, and there is an expense to the taxpayer. Thirdly, there is the difficulty of coordinating decision making, which hinders organisational development, including the use of technology. In our review of the 2008 election, there appeared to be the opportunity to use technology in many ways in coming years that will see ease of use for the average voter, especially for those New Zealanders who are overseas, and a much quicker ability to get election results. Fourthly, there was no overview of the electoral sector’s performance and priorities. Although, for instance, the Justice and Electoral Committee is charged with, and always has been, reviewing elections in the year following a general election, those reviews tend to be a little staccato in that three different organisations come before the committee. There needs to be a far more coordinated approach.

Those issues will be addressed in a single agency that is being created—the new Electoral Commission. This body will have significant responsibility, performing all the functions of the Chief Electoral Officer and the Electoral Commission. It will be an independent Crown entity to ensure independence, accountability, effective discharge of duties, organisation capacity, cost effectiveness, and easy implementation. The board will have three members who will be appointed by the Governor-General, on the recommendation of the Minister of Justice, following consultation with the leaders of the political parties represented in Parliament.

The previous speaker made a lot about campaign donations and transparency. This Government is happy for transparency in those issues, and we are pleased to be supported by Her Majesty’s loyal Opposition now that Labour members find themselves sitting on that side of the House. We would like to have a lot more transparency, and that was what National was pushing for when it was in Opposition several months ago. I commend the bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I too rise to support the Electoral (Administration) Amendment Bill. I was pleased to listen to my colleague the Hon David Parker advising the House of a consultative process that involved engagement with the Opposition, and I thank the Government for that process. I think it is important that we discuss matters such as electoral law reform as far as we can in order to obtain agreement. As the previous speaker, Chester Borrows, said, this matter has been the subject of review at select committee for a number of years now, and a merging of the functions of the three agencies—or three arms, as it were—that are now involved in our electoral system has been recommended.

In saying that we support this bill I want to make it absolutely clear that it is no reflection on the three agencies that will form the new Electoral Commission, nor, indeed, on the individuals who have shown incredible leadership in those areas over a large number of years. In fact, New Zealand has been very well served by all three agencies in terms of integrity and also dedication to the oversight of free and fair elections. I think in a place like New Zealand we sometimes take for granted the holding of free and fair elections. In other countries people are prepared to die for the right to vote. That probably would not be seen in any aspect of elections in New Zealand. I think some people find it hard to get out of bed and drag themselves down to the polling booth on election day, whereas in other countries people have fought for the right to vote and to have those votes freely and fairly given and counted. As my colleague the Hon David Parker has said, we have a well-deserved reputation in New Zealand for holding corruption-free elections, and this goes to public confidence in the process. When people go to vote they know that their vote will be received in confidence and that they can have confidence that the result will be a fair reflection of the votes cast on the day. What happens after the votes are cast and the count is done, when the various machinations occur for the forming of a new Government, may not necessarily go to public confidence in the process, but I think the process produces a much fairer system than any other system we have had in this country before.

When I look around this Parliament and I see people representing different ethnicities, I often reflect that when I first came to Parliament in 1990 there was not one MP from another ethnicity in this Parliament. We had Māori MPs and European MPs. I think one Pasifika MP made it into Parliament prior to the 1996 election—Taito Phillip Field in 1993—and that was it. There was no one else. Now we have two Chinese MPs, a Korean MP, and two Indian MPs, one of Sikh origin and one from Fiji, which is a tremendous advance. We also have a Muslim MP from Pakistan, so we have tremendous diversity in this Parliament under MMP that we simply did not have before. The number of women in Parliament has increased since we have had MMP, from a quarter of the Parliament to a third of the Parliament. However, sadly, with the loss of Sue Bradford tomorrow, I think we slip to just below a third, hopefully for a very short period of time. I think it is important that we have a system that reflects the integrity of the vote; we have that not only with our electoral system but also with MMP, as well.

Obviously there are benefits to be obtained from merging the three functions into a single agency. I quite like the way in which the Government has adopted this merger as a two-tier approach. The bill we are discussing today sets up the commission with two of the agencies before the next election, so by the time we get to the 2011 election the two agencies, the Electoral Commission and the Chief Electoral Office, will be merged into a single Electoral Commission, which will be in place to conduct the next general election. After that election the Electoral Enrolment Centre will come into the commission, as well. I think that that stepped approach is quite sensible because it gives the different agencies an opportunity to establish themselves in their roles before they are called upon to perform their function under the new regime. So I am very, very pleased with the approach that has been adopted.

I also commend the Government. I do not do this very often, so I will make this point, because I have criticised regulatory impact statements on many occasions since National was elected. Here is the regulatory impact statement—

Paul Quinn: Did you produce one? I can’t recall you producing one.

Hon LIANNE DALZIEL: I congratulate the Government on an excellent regulatory impact statement.

Paul Quinn: Oh, leadership! Excellent.

Hon LIANNE DALZIEL: I am happy for the member to interject across the House to say that the Government is showing leadership in this regard. It is about time. It has had a Minister for Regulatory Reform since the general election, yet here is one of the very few regulatory impact statements that meets my standard—that meets the test I want it to meet.

The Government has measured the status quo against two other alternatives. One was a new Electoral Commissioner within the Ministry of Justice, and the other was a new Electoral Commissioner created as an Officer of Parliament. Going through the regulatory impact analysis process, which I think is excellent, the Government has managed to identify the concerns and the benefits around each of those alternatives. I commend the Government for this very, very good process. The reason the status quo is not preferred—and I think it is important to place this on the record—is that, firstly, it would continue the unnecessary overlap of roles and duplication of administrative costs; secondly, it would provide for disjointed decision-making on electoral matters; and, thirdly, it would limit technological development for use in future elections. I think the third bullet point is the most important, because I am sure we will see a change in the way we vote in the future as technology develops. It will enable us to utilise different technologies that exist now and will exist in a better form in the future. Those technologies will not only ensure the integrity of the vote but also will enable us to ensure greater convenience. That is one thing I would like to see, because I get frustrated when I see people who think they have cast a valid vote—they have actually gone down to the ballot box on election day—but who discover afterwards that their vote did not count because they were not enrolled on the electoral roll the day before that vote was cast. I like to think that we will have the technology to enable somebody to enrol and vote on the same day. In my view, there is absolutely no barrier to that occurring, and the sooner we can put that technology in place the better it will be. I do not think we have to have an absolute prohibition on enrolling on election day, as we do at the moment with the roll closing the day before the general election. So I am very, very pleased to see that something is put in place to ensure that we can take advantage of technological development.

The last point I make is to comment on the points made by my colleague the Hon David Parker about the need for the transparency of donations to political parties. In the last inquiry into the 2008 general election, questions were put to Mr Henry, and I think it is worth remembering them. He was asked: “do you think there is a need for transparency of donations to political parties?”; he replied: “Yes.” He was asked: “Do you think we need to do better in respect of the transparency of donations?”; he replied: “Yes, I do. I think that in the new regime we need to look very carefully at how we might look through to the true donors.” That is what this bill is about. The public has a right to know who is funding the election campaigns. It is very, very important that we address the issues raised in these reports as they come up. With that one exception I commend the bill to the House.

METIRIA TUREI (Co-Leader—Green) : I do not intend to take a long call on the Electoral (Administration) Amendment Bill. The Green Party will support its first reading to get it before the select committee. We look forward to submissions by the public on the bill.

We think that the overall purpose of the bill is very good. The bill establishes a new Electoral Commission. The commission will combine the functions of the current Chief Electoral Officer and the Electoral Commission, and it will eventually also have oversight over the electoral roll, which, as my colleague Lianne Dalziel explained, will be transferred by a second bill at a later stage. The intention of this legislation is to provide integrated, efficient, and consistent oversight of, and decision making in, electoral administration, and to have those measures in place well before the next election. So there are quite reasonable intentions behind the bill. It is fundamentally important that the oversight of our electoral system is run by an independent and impartial body that has the power to make fair and effective decisions about the running of our democracy. It is a crucially important part of our democratic process.

The bill is an improvement on the existing three-agency arrangements, which create, we agree, unnecessary duplication and potential confusion. The independence of the Chief Electoral Office, which is located as part of the Ministry of Justice, causes some problems, in our view, under the current arrangement. So this bill is an improvement, as it moves that office, to some extent, and therefore we support it going to a select committee.

The bill is by no means perfect, and we are interested in the submissions on how it can be improved. When the National Government consulted the Greens on the proposal, we suggested from the outset that an Officer of Parliament - type body should be established, that it would be preferable to ensure that the new agency is absolutely and fully independent of the Government, and does not report to a Minister. The Officer of Parliament model is used here in Aotearoa with the Parliamentary Commissioner for the Environment, for example. It is also used in Canada for their electoral organisation and management. It places the oversight of the body with Parliament, as opposed to a ministry of the Government managed by one particular political interest. It reinforces its role to oversee and enable free and fair elections, which is a core concern of the House of Representatives and of Parliament. Certainly an Officer of Parliament model would be perceived by the public as more truly independent and would have more ability to comment on how the electoral process is operating, because it would not report to a particular Minister in the executive.

I note that in the regulatory impact statement there is a comment that the Officer of Parliament model provides a high level of independence because of the institutional separation of that body from the executive branch of Government, which is what we would like to see. But then the statement goes on to describe why that would not be appropriate, and it refers to criteria that were established by the Finance and Expenditure Committee in 1989, saying that the proposal does not meet the criteria. On my reading of those criteria, it does. The criteria state: “an Office of Parliament must only be created to provide a check on the arbitrary use of power by the Executive;”. But the role of the new commission would be to manage New Zealand’s elections, including referenda, for the public as a whole. That includes all of the electoral tools that the public have to decide who is in their House of Representatives. It is absolutely crucial that power over those issues is not held by the executive, and that there is a body that is fully independent from any potential arbitrary use of power by the executive.

There have been arguments about that in the not too distant past, saying that Governments and politicians have long had their sticky fingers in the business of electoral issues. The Electoral Finance Act was one. There was a lot of criticism from the public about that. The best way to deal with that criticism is to take those issues out of the hands of politicians, particularly those in the executive, and to put them in the hands of an independent agency.

The criteria further state: “an Office of Parliament must only be created to discharge functions that the House of Representatives itself … might carry out;”. I am not 100 percent sure—I have been here only 7 years, which is not quite long enough yet to work out all of the functions that the House of Representatives might carry out—but it seems to me that the integrity of Aotearoa New Zealand’s electoral system is a core concern of the House of Representatives, and that therefore the issues that the electoral body would be concerned with are sufficiently significant that the House itself would choose that an independent agency would have control and management of those.

We would still continue to argue that an Officer of Parliament model is the best model for the management of those issues, and that that discussion should continue through in the select committee. We will be very interested to see what the public thinks about whether higher levels of independence and accountability of that agency to the voters through their House of Representatives would be gained by the agency that this bill implements, or by an Officer of Parliament.

We would also like to see the new agency tasked with providing guidance and advice on electoral finance rules. That is another area where we do not want politicians’ sticky fingers in the business. We want there to be an independent assessment of those rules, and a great deal of clarity for the public and for political players so that they understand what those rules are and how they are applied.

We do not agree that the board of the new Electoral Commission should be appointed by the Minister. There is consultation in the process, with the Minister talking with other political parties, but it is a decision that is made by a recommendation by the Minister to the Governor-General, and we think that that power, again, could be taken out of the hands of the Minister, so that there is no imprint of any one particular political force on the board, and there is a greater sense of independence and separation of the agency.

That is one reason why we continue to advocate strongly for an independent agency to continue now with the process of the electoral system referendum that was proposed by National. Now that the timetable has been set, in our view it is crucial that the Government of the day takes its hands off the issue and allows for an independent agency to manage the questions—how those questions are set and how they are decided on.

There is a really interesting issue around whether a preferential system like single transferable vote (STV) should be used in Part B of the first questions of that referendum as to which is the most preferred system. The Electoral Commission, as it is established at present, could do that work, particularly around the establishment of the questions and how they would be managed. This bill and the agency that it establishes would not come into effect until 1 October 2010, and that is quite a long time away. Nonetheless, that new agency could certainly be charged with the responsibility for informing and educating the public about the different options that the Electoral Commission is proposing, on the issues around MMP, for example, and other kinds of proportional or first-past-the-post systems, such as supplementary-member representation. Despite the fact that the agency will not be set up until October of next year it is quite possible for the whole referendum issue to be transferred to the Electoral Commission at this stage, and then, from there to the new agency after October 2010, in time for the referendum in 2011.

The public do not want their electoral systems to be fixed for the benefit of any one particular political interest. Since this Government has clearly expressed a preference for a particular system—that is, the first-past-the-post system, supplementary-member representation—the issue is now tainted in the minds of the public. So it is important that the Government takes its hands off, because we must ensure that the questions that are put to the public on the electoral system are such that they believe that decisions are being made in their best interests, and not in the best interests of particular political players, particularly of the Government, which has the most power in these circumstances.

We support the bill, as far as it goes. We will continue to argue for a truly independent agency through an Office of Parliament. We look forward to the submissions on that issue, and to the continuing discussion that the country is having around the nature of elections, election finance, electoral donations, and electoral agencies. It is a very important discussion for the public to be having, and we hope that it will be managed in a careful and independent way, where political interests, such as those of the National Government, are not promoted. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Deputy Speaker. Kia ora anō tātou katoa. Parliament is one of the very few structures in our society that is inhabited by people who truly believe that elections, in and of themselves, make a crucial differences in our lives. I am reminded of a comment made by a person by the name of James Freeman Clarke. He said: “A politician thinks of the next election. A statesman, of the next generation.” The Māori Party supports the latter school of thought—that the future of our people can be greatly improved by the opportunity we can provide for them to participate in our democracy.

We come to this Electoral (Administration) Amendment Bill and we consider how the various legislative amendments to be introduced will impact positively on the future prospects of New Zealanders. We absolutely welcome the move to get the electoral shop in order, to reduce the duplication of functions, and to get rid of the confusion regarding costs and complexities for political parties, candidates, and the general public. We do so for reasons that come from very recent history. Administrative issues arose on election day in 2005 for voters on the Māori roll. Those issues arose in 2008, as well. The issues included an insufficient number of Māori roll voting papers and a lack of Māori roll data at some polling booths. Both issues would have been extremely easy to rectify, yet a lack of information had the immediate and adverse impact of compromising the rights of individual Māori to vote.

In the inquiry into the 2005 elections, the Justice and Electoral Committee drew attention to the issues raised by the Māori Party. The select committee concluded that, although the problems outlined were isolated, they should have been avoided. We tabled three major issues with the committee. Firstly, there was a lack of, or an inadequate supply of, ballot papers. In the Te Tai Tokerau electorate, voting papers ran out in several polling places by mid-afternoon on polling day. In the Tāmaki Makaurau electorate, voting papers were not available in some polling places in the South Auckland area until about 10.30 or 11 a.m. I recall that one of the worst-affected areas in the north had a problem as a result of a large influx of people being in the area to attend a tangihanga. Those people had every right to be able to register their vote, yet many were turned away due to the lack of papers. They chose not to return and take up their voting entitlement, because of the lengthy delays experienced in waiting for the new ballot papers to become available.

The second issue was to do with reports that Māori electoral rolls were unavailable in some polling places in the Manurewa area in the Tāmaki Makaurau electorate until midway through the morning. That is another issue that needs some attention. The third issue was that electorate votes were disallowed because incorrect voting papers were issued. In some cases, the electorate vote was disallowed and only the party vote was counted. In addition to these issues, concerns were raised about others such as the incorrect pronunciation of Māori names by issuing officers in polling places and reported incidents of voters being confused about whether they were on the Māori roll or the general roll. It is well known that those administrative errors were not large enough to have an impact on the voting outcomes. In Tāmaki Makaurau and Te Tai Tokerau, Dr Pita Sharples and Hone Harawira achieved resounding victories despite the problems with the paperwork, but the issues give a particular edge to the need for the Government to review its organisation and resourcing of polling places.

We believe that all polling places must have sufficient supplies and trained staff to cope with the demands that they may face on polling day, and this is of particular importance for voters on the Māori roll. In thinking of the bigger picture, outside that one election day in 2005, we are concerned that the democratic entitlement of some Māori constituents was compromised and, therefore, future voting practices may be affected. We believe that the overhaul of both the Electoral Act 1993 and the electoral administrative regime is both timely and in the long-term interests of the nation. It is also in line with our policy position, which supports the call for a single administrative body for elections. Reviews have indicated there a need for the creation of a single administrative body for elections and the benefits that would come from having such a body. As the House has already heard, the responsibility for electoral administration is currently split between the Chief Electoral Officer, who works under the Ministry of Justice, the Electoral Commission, which is an independent Crown entity, and the Chief Registrar of Electors, who works through the enrolment centre, a business unit of New Zealand Post Ltd. Although the distinctions between the roles are clear, the overriding public perception is that this is an overly complex and complicated way of allowing the voting process to take place.

This proposal, which is intended to provide a better service to voters, candidates, and parties, is an idea that has been some years in the making. In 2001 the Election Framework Taskforce conducted a comprehensive review of the electoral agency arrangements and recommended that a single electoral agency be given overarching responsibility for electoral administration, along with mandated statutory independence. Therefore, we are extremely supportive of the intention to amend the Electoral Act 1993 and the Crown Entities Act 2004 in order to create a new, independent Crown entity and Electoral Commission. We are interested in how we can ensure that long-term outcomes will be achieved through the efficient operations of the electoral administration functions of the Chief Electoral Officer and the current Electoral Commission.

I will share with the House a particular matter of relevance, not just for the Māori Party but, more broadly, for the representation of Māori throughout this nation. In structural terms, the bill merges the Chief Electoral Office and the current Electoral Commission, with a projected cost saving to the Government of 3.19 percent expected from the bill. This is all very positive and we welcome the views of the public through the select committee process. However, we do not want the review to focus on the administration and structures of our political system without considering a far more comprehensive look into electoral law. Any reform of electoral law should be preceded by consultation with the public.

For the Māori Party, the focus is on increasing Māori electoral participation, including a review of the Māori electoral option and, in particular, timing constraints. We believe that electoral representation in a democracy not only is a basic human right but also enables our nation to move forward together. Some of the issues that we consider to be useful for public feedback are particularly located around the issue of Māori electoral participation. We would be interested in the views of New Zealanders about the decisions to be identified on either the general roll or the Māori roll. We believe that all New Zealanders should be automatically entered on to the general roll at 18 years of age, or, if Māori, entered on to the Māori roll with the option to transfer to the general roll. We are interested in the views of whānau, hapū, and iwi on whether electoral rolls should also identify constituents on the basis of iwi and hapū. Such a process could assist tribal development, planning, and the maintenance of identity.

We welcome the feedback of Māori as to whether the Government should also extend the provision in the census for people to identify tribally to electoral roll, where tribal affiliations are also stated. Finally, but not insignificantly, we will be interested in the feedback about a proposal to amend section 45 of the Electoral Act in order for it to be consistent with section 35 of that Act, meaning that no Māori electoral district shall be situated partially in the North Island and partially in the South Island. This has particular relevance for my colleague Rahui Katene as it will mean in effect that the voters on the Māori roll would be treated equally with voters on the general roll, in that voters living in the South Island would not need to be merged with voters living in the North Island.

Those are just a few of the issues that we look forward to hearing from the public on during the select committee process. We recognise that a move to a single body will be an enormous task, and it will not be easily achieved without the risk of some disruption to elections. We also acknowledge the high quality of the advice from the officials and the outcomes that have been evident in the current arrangements. As we move our eyes to the next generation, we say that it is about time to review the current system. Therefore, we support this bill at its very first reading.

SIMON BRIDGES (National—Tauranga) : It is good to take a call on the Electoral (Administration) Amendment Bill. This legislation amends the Electoral Act 1993, which is a constitutional statute in our country.

• Sitting suspended from 6 p.m. to 7.30 p.m.

SIMON BRIDGES: As I was just saying, it is good to rise to take a call on the Electoral (Administration) Amendment Bill. I was warming to the theme that this Government legislation is in keeping with a theme of the National-led Government of removing waste, duplication, complexity, unnecessary cost, and confusion. We are moving from a multiplicity of electoral agencies to a single one. That is very important.

I come back to confusion, because we can well imagine situations where it would be easy to be confused with a number of bodies—

Hon Gerry Brownlee: Yes, of course. Sometimes if your name’s Rick you might call yourself Phil.

SIMON BRIDGES: Exactly. It would be easy to be confused when there are a number of bodies. Look at the Labour Party and its situation. I think Labour members found it very confusing as to whom to go to, and whether to use genuine or made-up names. Here we are narrowing those electoral bodies down into one body, so it will not be so confusing. I know others might have rather more unparliamentary ways of describing what the Labour Party did, but I think it was just general unabashed confusion by the Labour Party. It did not know what to do. [Interruption] Exactly. Labour members were not really sure whether they should use real names or fake ones. We are doing away with some of the confusion. Of course, the Labour Party will still find other things to be confused about.

As I said, by going from a number of agencies to one we are doing a good thing. We are removing waste, duplication, complexity, unnecessary cost, and confusion. We are providing consistency and efficiency so that Darren Hughes, Rick Barker, and other Labour members will know where to go to get their answers on these significant issues.

Hon Nathan Guy: Darren might have been Rick, and Rick might have been Darren.

SIMON BRIDGES: Exactly. This bill reduces several bodies to a single agency. That is a recommendation that has been made a number of times by the royal commission and the Election Framework Taskforce. There are a lot of flaws in the current system that we are doing something about. In its first reading, I commend this bill to the House.

CHARLES CHAUVEL (Labour) : What a pleasure it is to rise to speak—

Simon Bridges: A pleasure to hear you.

CHARLES CHAUVEL: Thank you. It is indeed a pleasure to speak on the Electoral (Administration) Amendment Bill.

Paul Quinn: Charles Bronson!

CHARLES CHAUVEL: It is nice to have the customary acclaim from the Government on this matter.

An electoral management body takes various forms around the world. It is the body charged in a nation with administering the electoral process. These bodies typically take one of four forms. They can be independent, mixed, judicial, or governmental, and it often happens that they carry out different functions depending on what model is adopted. Obviously, in federated states there may be bodies that serve the federal jurisdiction and the states or provinces as well. In jurisdictions where there are very large cities, like New York City in the United States with its population of 8.2 million, or Los Angeles County with just under 10 million, there are municipalities that have very specialised bodies to perform their electoral administration. As we have just mentioned the New York example, it is interesting to note in passing that apparently the body that supervises New York City’s administration of elections is a real model when it comes to looking at the adoption of new technology like the Internet, and at continuous disclosure requirements and obligations—for example, donations.

Hon Maurice Williamson: The Internet’s nearly outdated.

CHARLES CHAUVEL: Mr Williamson tells us that the Internet is nearly outdated; no doubt he will reveal what will come next. I look forward to saying “Gee, Maurice, do you remember the Internet?”.

Let us consider the various models that could be adopted for an electoral management body. We have the mixed model, where perhaps we might have an independent board for determining the policy to apply to elections, but where implementation of that policy can be a matter for the executive, with varying degrees of supervision by the independent board. If we are looking for democracies that operate that model and that have some relevance to New Zealand, we might look to France, Spain, or Germany, or, if we wanted to look to our own Asia-Pacific region, to Japan, which also operates that model. Other Commonwealth countries include Jamaica.

Then we have the possibility of the straight-out Government model, where we have the Minister or Secretary of State operating within the executive, and where, directed by a Cabinet Minister, the department itself conducts the election. That is the sort of model that has been adopted in countries like the United States, Denmark, Singapore, Sweden, and Switzerland, and in some other jurisdictions around the world.

Then we have the possibility of a judicial model. This model is very much the vogue in Latin American countries. Because of the time at which they developed their constitutions, those countries thought that the way to go was to have elections closely supervised by, and ultimately responsible to, an electoral court. Countries that operate that model include Argentina, Brazil, and Mexico.

We also have the independent model. Typically under this model we have an electoral commission that is autonomous and independent of the executive, and that has and manages its own budget. Interestingly, this is the model that is operated in the jurisdiction with which we most like to compare ourselves—Australia. It is also the model in Canada—federally—in India, and in South Africa. From the point of view of our region, it is again interesting that this model is used in Timor-Leste, as well, a new country with a new constitution. The South African constitution has made permanent provision for this independent model, because the South Africans, on independence, decided that it was important constitutionally to do so.

The New Zealand model is the classic mixed model, but it is a bit of a mishmash. It contains five different bodies. There is the Chief Electoral Officer, who happens to be a senior employee of the Ministry of Justice but who is autonomous as far as the electoral function is concerned. That person is responsible for the conduct of general elections, by-elections, and referenda. He or she employs returning officers for the 70 electorates, receives donations and election expenses from parliamentary candidates, and provides information on electoral events to voters, candidates, and parties. That is one of the five bodies that are currently charged with our electoral administration in New Zealand.

Then we have the Electoral Commission. An independent Crown entity, the commission has four functions. It has to register political parties, allocate broadcasting funding, supervise financial declarations, and conduct public education. That is the second body. The commission is fairly independent of the executive. It must be headed by a retired judge, and the executive does not get an enormous amount of choice as to which retired judge is to be appointed. Generally speaking, the nomination tends to be that of the Chief Justice, and the Minister of Justice chooses from a relatively narrow range of people who can chair that body.

The third body that has a role in our system at the moment, funnily enough, is the chief executive of a State-owned enterprise, New Zealand Post. That person is responsible, via the Electoral Enrolment Centre, to maintain the electoral rolls and to conduct the Māori electoral option. When one drills down into that, one sees that a chief executive of a State-owned company is conducting this function, by contract with the Ministry of Justice, as one of the outputs that the Minister requires of the ministry. It is a very convoluted arrangement.

Those are the three bodies that are mentioned in the explanatory note of the bill, but at least two other bodies have a role in the system. The Representation Commission draws the boundaries. Often in overseas regimes the Representation Commission is included within the structures that are required to organise and conduct elections. There is also the police, and I will speak a little bit about their function, because the police are the enforcement body as far as our electoral law is concerned.

Although Labour supports this bill being read a first time, we believe that the bill does not address the issue of the enforcement machinery when there is a breach of electoral law. I suggest that that might be something the select committee looks at. The problem that the police always have, of course, is that electoral offences never go to the top of the queue. The police will always be concerned with crimes against the person, and with dealing particularly with violent crime. They will never be able to prioritise electoral matters, nor will they necessarily have the forensic expertise to do so. These days those questions require skills in dealing with tracking donations and financial disclosures, and so on, which call for quite sophisticated levels of skill that are probably more properly found in organisations like the Serious Fraud Office rather than the police. It might well be that with the forensic skills that are required, it would be useful to think about having an enforcement function under this new independent Crown entity rather than the police being responsible for that function, if we are truly interested in bringing all the functions together in an expert body that has the resources and the time to deal with the questions before it.

The final point I make is that if one has a look at the explanatory note, one sees that one of the options canvassed was to have an Officer of Parliament for this function. Personally, I think that would have been the most compelling option to go for. The explanatory note suggests there was not enough time to get that sort of apparatus going before the next election. But if we really want a truly independent body, charged with the conduct of elections in an honest and serious way, then, given the conduct of our other Officers of Parliament, in whom we have enormous faith, then that seems to me to be the best way to go.

PAUL QUINN (National) : I followed the exegesis of the previous speaker, Charles Chauvel, and all it demonstrated was that he was able to read his Political Science 101 notes to explain this bill.

The simple fact is that the Electoral (Administration) Amendment Bill is very simple. It brings order to chaos. It combines two bodies—administration is currently undertaken by the Chief Electoral Officer and the Electoral Commission—and enables them to bring the transparency and honesty that members have spoken of on both sides of the House. On this side of the House, we strongly recommend it to members and to this Parliament.

LYNNE PILLAY (Labour) : I am surprised that Paul Quinn took such a short call. I nearly was not ready to take my call.

Chris Hipkins: It was all he was capable of!

LYNNE PILLAY: I find that Paul Quinn usually has quite a bit to say, so it was a bit disappointing that he took such a short call.

In opening, I want to recognise and talk about what Lianne Dalziel referred to in her speech, and that is the diversity of our Parliament. A decade ago—it was even more so two decades ago—our communities were not reflected in Parliament. It is fair to say that Parliament is now far more representative of the diverse communities we have in New Zealand—although I have to acknowledge that some of those members are not sitting on our side of the House.

It is also important to acknowledge our democracy. Many MPs in this House have assisted in elections—I do not know whether Gerry Brownlee has—in a number of other countries where democracy is not so open, accessible, or safe.

Hon Gerry Brownlee: I’ve never been one for a junket.

LYNNE PILLAY: I find that to be a very flippant remark. That member should be ashamed of himself. That was a very flippant thing to say.

In New Zealand we have the ability for all New Zealanders to freely engage in elections without fear of retribution and without fear for one’s life. We can all recall—Mr Brownlee might be flippant about it, but this side of the House certainly is not—that it was empowering and wonderful to see the indigenous people of South Africa attain their right to vote. Many voters walked tens of kilometres in order to celebrate having that right. That is something that we in New Zealand hold dear, and it is something we should celebrate.

When I attend a citizenship ceremony, I know that many new citizens from other countries find it very empowering. One of the first things they say to me as new citizens or as permanent residents is that it is great to have the right to vote. It is indeed the right of all permanent residents, as long as they have lived here for the right amount of time, to vote in New Zealand, and it saddens me when people do not use that right. When we are out and about in communities we find many people who say they did not participate in the previous election. They did not participate—and indeed they are not happy with the outcome.

I want to speak about some of the new initiatives, and I will acknowledge some of the agencies in terms of the 2009 New Zealand Effective Advertising Award. I have the document here to show to members of the House. Most members probably received it only a day or two ago. It tells us about the award for excellent advertising throughout New Zealand—obviously before the “plain English”, airbrushed Bill English advertisement came on. This document covers 2009. Members opposite are probably thinking about what this has to do—

Simon Bridges: We are.

LYNNE PILLAY: I dare say that the Assistant Speaker is as well. Let me enlighten members.

I note that that the electoral enrolment campaign attained a silver award for the campaign about easy voting. We all remember the little orange man on our television screens. He encouraged people to vote, and showed people the easy ways to vote. That campaign won an award. I congratulate the Electoral Enrolment Centre, because it owned that campaign in terms of making sure that those advertisements were on air. I hasten to add—and I know that Paul Quinn will find this extraordinary—that it achieved a higher award and was on a par with a number of others, such as the Saatchi and Saatchi “Irresistible to Men since 1889” campaign, which related to the DB Breweries advertisement with the women and the blokes and all that sort of thing. That is more in Paul Quinn’s line.

Paul Quinn: Commonly known as the Tui ad.

LYNNE PILLAY: No, it was not known as the Tui ad; it was the DB ad. But I want to say that promoting a very serious subject to attain a silver award is quite an achievement, so I say “Well done!” to the Electoral Enrolment Centre.

I return to the purpose of the bill, and in doing so I recognised the Electoral Enrolment Centre. The bill is about establishing a new, independent Crown entity. I congratulate the Government, because this was, as David Parker said earlier in the House today, done in consultation with the Labour Party, and, indeed, with other parties in the House—I would hope—to ensure a smooth transition. I will talk Justice and Electoral Committee, which will be chaired by Chester Borrows, later in my speech.

I know that the three agencies—the Chief Electoral Officer, the Electoral Commission, and the Chief Registrar of Electors—came to the Justice and Electoral Committee before the last election and talked about a process to amalgamate the three agencies, so that a far more user-friendly service would be delivered and so that issues could be worked through. As, I think, Lianne Dalziel said, we do not often get the opportunity to do this. I congratulate the Government on this bill, because it does do that and it does so in quite a sensible way by doing it in two stages.

When the amalgamation of these three agencies has been looked at, we have seen that there is some complexity around it. It is really important to do it in such a way that it does not disrupt democracy and so that at the end of the process we have a transparent, effective, independent agency.

I note that the new body will be called the Electoral Commission again, and that could create a little bit of confusion, but we can look at that in the Justice and Electoral Committee, and I dare say there will be some submissions on that. Bringing together two of the agencies in the first year will bring some stability in the first instance. Then, the following year, the third agency can be brought in.

We again need to stress that the new agency will be independent. As I said before, democracy is something we all celebrate in this country. It is something that is a right, but, indeed, if we compare ourselves with other countries not too far away we see that it is also a privilege that many, many citizens in other countries do not enjoy. Democracy is something we should all hold dear.

I am very happy—and we are often not as happy as this in Opposition—to support this bill. I look forward to it coming to the Justice and Electoral Committee, where I know we will have excellent submissions on it. I know that we will devote appropriate time to considering the bill very carefully, and we will return some very good recommendations to this House. Thank you very much.

KANWALJIT SINGH BAKSHI (National) : Lynne Pillay was just talking about diversity in this Parliament. I am proud to be a member of the National Party, which has brought diversity to Parliament. As the first member from the ethnic community, Pansy Wong came to Parliament through the National Party. The Hon Pansy Wong was the first ethnic Cabinet Minister as Minister for Ethnic Affairs, a position given to her by National. So diversity came through the National Party. Labour is always talking about it, but it did nothing about it.

I stand to support the Electoral (Administration) Amendment Bill in its first reading. This bill will establish a new independent Crown entity to manage the electoral system, and will provide the best balance of high independence with good accountability and the ability to administer electoral functions to high standards. In 1986 the report from the Royal Commission on the Electoral System recommended that Parliament’s electoral administration be merged into a single independent Crown entity. They found that the current multi-agency structure did not provide the best service to the stakeholders or a sound platform for future development. The bill also provides for the new Electoral Commission to carry out the functions of the current Chief Electoral Office and Electoral Commission. Under this legislation, the new Electoral Commission will come into existence on 1 October 2010. I commend this bill to the House. Thank you.

• Bill read a first time.

• Bill referred to the Justice and Electoral Committee.

Hon NATHAN GUY (Associate Minister of Justice) : Part 2 implements the second stage of the Criminal Investigations (Bodily Samples) Amendment Bill by extending the provisions in Part 1 that apply to those adults suspected of committing a relevant offence to those suspected of committing any imprisonable offence. This part also makes the District Court the court to which applications under the Criminal Investigations (Bodily Samples) Act are made, rather than the High Court, and provides for a mandatory retention period of 10 years for DNA profiles from adults who are convicted for imprisonable offences that are not relevant offences. This staged approach is to allow police the time to develop guidelines and train staff, and will also assist the Institute of Environmental Science and Research to cater for the increased workload.

As a result of the Justice and Electoral Committee’s input, Part 2 of the bill has undergone three notable changes. I would like to make some comments on those. The first is that the range of offences for which it is possible to collect DNA from a young person will not be expanded to include all imprisonable offences, as for adults. As it applies to young people, the new power will be available only where the young person is suspected of a relevant offence to ensure that only the most serious young offenders are subject to the new power.

Secondly, the select committee made a number of important amendments throughout Part 2, one of which was to include the relevant offences listed in the schedule of the Act. For example, peeping or peering is a relevant offence in the schedule but it does not carry a sentence of imprisonment. As originally drafted, this meant that DNA samples could not have been collected from persons suspected of committing that offence under Part 2, but could under the first phase.

The third point I wish to make is that a new definition of “District Court” has been inserted to clarify that when judicial functions are transferred to the District Court, they can equally be exercised by the Youth Court in cases where it has jurisdiction.

In respect of Mr Chauvel’s amendment to require a review of the provisions in 5 years’ time, members will be aware that, as expressed in the explanatory note of the bill, the Ministry of Justice will review the entire Act by August 2011. That review will look at the broader operation of the Act and will include how the provisions are operating and whether they should be amended. That review will be completed before the second stage of the bill is implemented.

CHARLES CHAUVEL (Labour) : In the Committee stage on Part 1 of the Criminal Investigations (Bodily Samples) Amendment Bill, the Government used its majority to vote down an amendment in my name that required a warrant to be obtained prior to the exercise of the novel powers that Parliament intends to give to the State through this bill. Now, under urgency, we are debating Part 2 of this bill in Committee, and I think it pays for Parliament to think about the novel power that we propose to confer through this legislation: to “allow the Police to collect, without prior judicial approval, a bodily sample from any person whom they ‘intend to charge’ with certain specified offences.”, which is later to be expanded to “allow the Police to collect a bodily sample from any person whom they intended to charge with an imprisonable offence.”

As the Minister in the chair, the Associate Minister of Justice, the Hon Nathan Guy, correctly recorded, I have put forward another amendment, which is designed to require a select committee of this Parliament to conduct after 5 years a review of the operation of the new power that we intend to give to the State. Given that we are now sitting in urgency—and given the Committee’s decision to reject the requirement for a warrant the last time this bill was discussed, when we were debating Part 1—I suggest that the review is even more important. A power of literal, physical compulsion will be conferred under urgency with no judicial supervision whatsoever intended. The Associate Minister said that the ministry would conduct a review of the operation of the legislation by August 2011. But, of course, that review is intended to satisfy the State that it can move satisfactorily to Part 2 of the bill, which extends the powers contained in the legislation from the specified offences it deals with to all imprisonable offences. This is a very different sort of review to the one my amendment proposes. I suggest that this Parliament takes a long, hard look at whether it has, overall, been a good idea to extend the powers of the State, without judicial supervision, under urgency in this way. I submit that a select committee would be well suited to report back to the Parliament after hearing all the evidence. It would not be in an election year—as August 2011 is, which is the deadline for the ministry’s review—but after 5 years of operation when we have a track record, when the police and their actions can be looked at in an objective fashion, and when we can properly work out whether this legislation has made the contribution that we all think it will to overall law and order.

I hope that the Associate Minister will take another call at some point during the debate, and that there will be a reconsideration of what appears to be the Government’s initial decision to reject the idea of a more independent review, given that the State intends to take a very new power to itself. The State is proposing that an organ of the Crown will review the exercise of that power after a very short period of time—in an election year—for the purpose deciding whether that power should be extended. My proposed review is an entirely different beast: it seeks to consider the exercise of the new powers in the round to help us decide whether we have made a wise choice in extending the powers of the State the way that the bill is intended to do, without judicial supervision. I have to say that if Parliament thinks about this carefully, it will determine that the review that is set out in my amendment is a much better mechanism than the substitute offered by the Minister.

MOANA MACKEY (Labour) : I am happy to stand in the Committee stage to speak on Part 2 of the Criminal Investigations (Bodily Samples) Amendment Bill and to perhaps seek some reassurance from the Minister in the chair, the Hon Nathan Guy, regarding this part. As he said in his brief words to the Committee of the whole House, this part of the bill dramatically extends the workload of the Institute of Environmental Science and Research. From the Opposition’s perspective, I think we would like some reassurance from the Minister that that will come with adequate funding. The bill gives the State far greater power in this respect than it has had before, and there is a real danger of a miscarriage of justice if these new powers are not backed up by adequate funding for the police and the Institute of Environmental Science and Research, which will be doing the data analysis.

I hope that the Minister for Research, Science and Technology, who I think is with us, although he does look tired, might take a call on adequate funding for the institute. We have to look beyond simply how much a DNA sample costs and multiplying it by a factor of how many more one expects to be doing. The kind of reassurance that we would like to see is that there will be adequate money for the extra reagents, for the extra equipment, for the extra work area the institute may need to carry out all these extra analyses, and for the extra staff. But, as I said in the second reading of this bill, one of the most important things is that we need to make sure that the administration of this bill is adequately funded. I know that the Government does not like bureaucrats. I know it does not like people who are not front-line staff, but the fact is that the chain of custody is just about the most important thing that one can have in a laboratory. If the institute is not adequately funded, we are in real danger of seeing a miscarriage of justice.

I would like to seek reassurance from the Minister in the chair that that will be adequately funded. I assume that he must have had those figures done. I cannot believe that the Government would pass legislation where it has not had advice from officials about what the fiscal impact will be and what the needs of the institute will be in terms of this extra funding. This is particularly so around the administration of samples—where the sample is collected by the police, where it is labelled appropriately, where it is sent to the Institute of Environmental Science and Research, where it is logged in, where from then on through the process the correct sample is logged next to the correct results. I do not need to tell the Committee that if that is not done properly—if the institute is put in a position where it is understaffed and under-resourced, and where it is having to do all this without adequate funding—then those extra powers suddenly become very dangerous. I am sure the Government has done this work. I would really appreciate the Minister taking a call to let us know what those fiscal costs to the Crown are, and giving us the reassurance that that money will be there.

My colleague Charles Chauvel talked earlier about a review period in the law. That review would have been incredibly important when one considers these extra powers. We need to make sure that the system is working right. If the Institute of Environmental Science and Research, or any other Crown agency, is not on track to be able to do this work properly, then it should not be put in the position of having to do the work. Frankly, the cost to the citizens of New Zealand of having an agency in the position of doing the work when it is not ready is too great to even contemplate. So I hope the Minister will take a call.

This is not an issue that I am trying to be trite about; this is an issue that I am genuinely concerned about, having worked for the Institute of Environmental Science and Research and knowing the kinds of pressures that Crown research institutes are under. To be fair, I say to the Minister that they now have to provide a 9 percent dividend to the Government, and that money will have to come from somewhere. I want to know that these extra powers that we are giving will be properly funded, so that we can avoid any kind of suggestion that there may be a miscarriage of justice.

I note that Labour put up amendments to Part 1 where we wanted people to be able to question the process, as well as the actual charge. That is important when one is doing this. I note that when we look at comments from forensics professors from the United Kingdom, we see that they said there is a real risk, when one moves down this path, of opening up the possibility of miscarriages of justice. That risk is from having so many more samples in a DNA databank. It is especially so if institutes are not funded properly, and if protections are not put in place for someone to challenge that process and the way that those Crown entities deal with those samples, not just the charges that are against them. I hope that the Minister will take a call on this, as it is a very, very serious issue.

The CHAIRPERSON (Lindsay Tisch): I call Chester Borrows.

Hon Trevor Mallard: Most popular chairperson in Parliament!

CHESTER BORROWS (National—Whanganui) : Fair enough! It was interesting to hear the comments from the previous speaker, Moana Mackey. She will recall, from her time spent sitting on the Justice and Electoral Committee and hearing from the officials in respect of the recovery of DNA samples and the processing of them, that the costs were given to the committee. She will recall that they had been calculated on the basis of an expectation that the numbers coming through the system would build up over time, of the requirement to maintain the chain of evidence, and of the costs of collating and storing the information. Those costs were given. She also made a comment about the ability to challenge the charge, and the issue of the recovery of the DNA or the sample that had been given. Of course, the samples will not be profiled until a conviction has been entered. So it is not the case that every sample that is taken will move through the process.

But it is important not to lose sight of one particular thing, which is that of all the bills that have been passed through the House in recent years and that are anticipated to be passed in the near future, this Criminal Investigations (Bodily Samples) Amendment Bill is the one that will save more victims than anything else has saved or will save. This legislation will identify offenders very, very early in the piece, based on their early offending. The offences contained in the schedule are a number of precursor offences. We know that offending by way of home invasions and sexual offences—offences against the person—can be predicted by the sort of behaviour that is reflected in the offences that are listed in this bill. In the same way, we know that those people who go on to commit tragic offences against the person, whom we particularly want to be able to identify by DNA evidence—for instance, offenders like the “Parnell Panther”—start off their offending at a very low level, with offences against what we now call the Summary Offences Act. So having their DNA on record very early in the piece would identify them as soon as they left traceable bodily evidence at the scene of a crime or on a victim. They would be able to be caught a lot earlier than they are caught at present. They would not be able to go on to commit a hundred more home invasions or rapes before they were caught.

I go back to the point I made just a few seconds ago that this legislation has the ability to save more victims than any other legislation has. That is not a reason to give carte blanche to any infringement of people’s rights that the State may want to impose, but we have to look at what we are doing here. The ability to obtain a DNA sample through the use of a cheek swab is fairly simple and straightforward. There are issues raised by the process of maintaining the chain of evidence and doing a test on that sample, because the DNA test is much more extreme and requires more resources than, say, testing a blood sample. At the same time the Institute of Environmental Science and Research specialists have been doing that with blood alcohol samples for years and years. Their processes along the chain of evidence are simple and very streamlined. There is no reason why that will not apply here.

The evidence given at the select committee hearing by officials from the Institute of Environmental Science and Research and from the Ministry of Justice as to funding and resources was very plain. I am sure that given her understanding of what is involved here, the previous speaker, Moana Mackey, will know very well that there is no risk there.

Moana Mackey: I just want a guarantee from the Minister.

CHESTER BORROWS: She calls upon the Minister, so the Minister in the chair, the Hon Nathan Guy, can get to his feet and tell her exactly what she has already heard within the select committee. No doubt he is able to do that. However, Moana Mackey made her decision early in the piece that she was going to support this legislation because of what it will do. I commend her for that. I do not see any point in trampling over ground that she already knows very well.

CARMEL SEPULONI (Labour) : I will talk a little bit about what Charles has been saying, and also Moana, with regard to extending the permission of the State without judicial evidence. One thing that has not come up as much across the duration of the debates and the discussion over this issue is the cultural implications of the Criminal Investigations (Bodily Samples) Amendment Bill. Labour is not opposed to DNA testing. In fact, Labour members were leaders with regard to the legislation around DNA testing in New Zealand. We have very much kept up with the technology that has taken place. We do support this bill, but we do have some reservations.

This, perhaps, is one of those reservations. It was a conversation that some colleagues and I were having about the cultural implications of this bill with regard to what DNA testing means for Māori, and for some Pacific groups, also. Even just now I was looking at one of the district health board websites and saw there that it encourages staff with Māori patients to give them back any hair, toenails, fingernails, or bodily tissues that had been collected from them, because of the fact that those items are seen as tapu.

One of the reservations that have come from Māori and Pasifika is the ownership over the information that is contained in our DNA. One thing that seems of concern is the fact that that information can be gathered from people when they have not been charged with any particular crime—when there is the intention to charge but the suspect has not been found guilty of any crime. It seems a worry, and it is something that will come up with those particular groups. Given that someone has not been found guilty of any crime, and that he or she has not necessarily done anything wrong, to have that information taken will be a concern to those particular groups because that information is seen as tapu. It is held in those parts of the body, whether it be in hair, fingernails, or even in parts of the skin that a sample has been gathered from. I do think it is something that needs to be mentioned. Some thought needs to be given to that, perhaps, because in this country we regard those cultures as being of importance, so we need to take into consideration their viewpoints on such things.

One of the things that Moana has also made very clear is the fact that DNA testing is not foolproof. A concern that she has put out there, as a scientist and as someone who has a background in this—in fact, I think she is the only person in the Chamber who has a background on this subject—is that DNA testing has been held up very high and is perceived by many as being foolproof. But the concern arises where jurors and others may look at DNA tests and decide that that evidence is it. That is what it proves, therefore that must be 100 percent the truth. Scientists have said, and Moana has said—

The CHAIRPERSON (Lindsay Tisch): The member must use full names, not members’ first names. That is the third time, so I ask the member just to remember that.

CARMEL SEPULONI: I apologise, Mr Chairperson, and I apologise to Moana Mackey. Moana Mackey has said that no scientist would say that DNA testing is foolproof. I think that is something that we need to take into consideration when we look at this bill, because we do not want to put out the impression that DNA testing is 100-percent fact, and that jurors can take this information and believe that it is all the evidence that they need.

Moana Mackey also raised the fact—and this is something that has come up in the US and in other places—that there are more and more cases of people planting evidence with regard to DNA, so getting other people charged with crimes and convicted of crimes when in fact the evidence was planted. That is something we need to be very cautious of as we go down the road of putting out DNA testing as the test. We have to make sure that we do not put it out to be foolproof.

Before I end, I want to talk about the evidence involved and how much the cost will be. That is something that keeps coming up with regard to this bill. It does not seem that the Government has looked into how much it will cost with regard to storing the DNA and collecting the DNA. We have a Government that says that money and resourcing is everything at the moment, and that it needs to be very tight on the money that it spends.

KELVIN DAVIS (Labour) : I agree with what my colleague Carmel Sepuloni has outlined in terms of cultural safety in the Criminal Investigations (Bodily Samples) Amendment Bill. It is really important, I think, that people understand the Māori perspective on the collection of bodily samples. I make it clear that I support legislation that makes it easier for us to identify and apprehend offenders. I think that DNA is the new fingerprint and it will be very useful in apprehending offenders. But I think we need to be mindful of the cultural side of things.

I will use three examples from my own background to illustrate how Māori feel about bodily samples. Some people may think that I am being a bit silly about it, but I tell them that those beliefs are very real to Māori. The first one is a very simple example. At our family homestead in the sleepy hollow of Taumārere there is a plum tree that produces the greatest plums, but nobody is allowed to eat them. The reason is that, traditionally, that is where my grandfather, great-grandfather, and all my great-great-uncles had their hair cut, and the hair would be buried under that plum tree. Hair is treated as tapu, as Carmel Sepuloni said. It was buried under that plum tree, so nobody was allowed to go near the plum tree or touch the plums.

Another example is the cutting of fingernails or any other sort of—what is the word?

Hon Darren Hughes: Bodily functions.

KELVIN DAVIS: —intimate articles that belong to a person. It does not have to be only bodily samples; it could be someone’s possessions that are intimate or close to that person. If somebody was able to get hold of them, they could do some sort of harm to the person. In Māori terms we would call that a mākutu. We are always mindful that when we cut our hair or fingernails, we never just dispose of them where people can get hold of them, in case they get hold of them and create some harm for us. That is the basis for why Māori are particularly concerned about what happens to bodily samples such as DNA.

To make it clear, I believe that if someone is guilty and he or she has DNA or bodily samples taken from him or her, then, quite frankly, I am quite glad that that is happening, and I am not precious about it, at all. We have to make sure that New Zealand is a safe place. We need to be able to identify and apprehend offenders. But we need to be cognisant of the cultural aspect of taking body parts or body samples from people—Māori and Pacific Islanders in particular.

Another example I would like to give occurred earlier this year. About 6 weeks ago, a baby passed away and an autopsy was held. The samples taken from the organs were very small—about the size of a fingernail—yet they were not returned in a culturally appropriate way to the family, and it caused a lot of angst. The coroner had a heck of a lot of explaining to do. The coroner, being Māori, had spent a lot of time and effort trying to make sure that the processes that the Coronial Services went through were culturally sensitive. However, they were let down at this time, and a lot of rebuilding had to be done.

Those are just small examples of how, when we take bodily samples from people, we have to treat those samples in a culturally sensitive way. But I express my belief that this bill will be good for New Zealand. It will help to apprehend offenders and identify them, and that is good for New Zealand. Labour supports this bill, but it is really important that the Māori perspective—the Māori aspect—is taken into account.

STUART NASH (Labour) : I rise to take a call in support of the Criminal Investigations (Bodily Samples) Amendment Bill. Labour supports this bill for a number of reasons, but the main reason is that the people who elected us have a reasonable level of expectation around the support we will give to victims. I believe that this bill does that. First and foremost, the main expectation of a person going to trial is that the case will be wound up as soon as possible. Any early resolution to a case, or anything that helps to achieve an early resolution, has to be good for victims’ rights and for society in general. A classic case would be this: we all know the dreadful statistics around the number of women who come forward after they have been sexually violated, abused, and raped. The number is incredibly low. The trials are incredibly traumatic, for a whole lot of reasons. Often what happens is that it appears as though the woman herself is on trial, and the perpetrator of the crime gets off the charge or sits there while the woman’s history is denigrated. I think that this bill will help in achieving a speedy resolution to a lot of those trials. But I also hope it will ensure that a lot more women who have been victims of sexual crimes will come forward in the knowledge that DNA samples will help to achieve a speedy resolution to any trial. I hope this will encourage women to come forward.

Clauses 31 to 46 in Part 2 of the bill as introduced extend the authority to obtain a DNA sample from suspected persons. Primarily these clauses would permit a sample to be taken from a person suspected of committing an imprisonable offence and allow a compulsion order application to be made to the District Court to allow a sample to be taken from a person suspected of committing an imprisonable offence who had refused to consent to the taking of a bodily sample. As we know, there are fundamental human rights issues around this. The Human Rights Commission has expressed concerns that the proposed changes may go a little too far. The bill allows the police to take DNA from anyone charged with an imprisonable offence, whereas the current law has a much higher threshold—for example, for serious offences punishable by more than 7 years in prison.

The Human Rights Commissioner stated: “The bill infringes the right to freedom from unreasonable search and seizure, but also creates the possibility of discrimination on the grounds of race, family status, and impacts disproportionately on youth.” Perhaps, but I would also argue that the rights of the victim and the rights of society in general have to be weighed up against individual rights. I think it is time that people started taking individual responsibility for their actions. If they have done nothing wrong, they have nothing whatsoever to fear from this. However, if they have committed a crime or if they do have something to fear, then they have to take responsibility for that, and they will be caught.

This bill sends a very strong message to the criminal classes of New Zealand that this Parliament will not tolerate the level of crime that we are beginning to see these days. It is simply not acceptable. Labour demands that people start taking individual responsibility for their actions, and I think this is what this bill does. The Privacy Commissioner has expressed concerns that the changes proposed jeopardise the value of the existing criminal DNA databank in detecting and preventing crime, by undermining public trust in the police and the Government. I would argue quite the opposite. If the people of New Zealand know that the police have these sorts of tools in their tool kit to solve crimes, my personal view is that that will increase the confidence in the police’s ability to solve crimes in a quick, clear, and decisive manner. Again, this brings me back to the point that there are a lot of women out there who have been victims of sexual crimes but are too afraid to come forward because of the distress that a trial will put them through. I think this bill will help to send a message that we will not tolerate this at all.

There is one other issue I am slightly concerned about, and my colleague Ms Moana Mackey alluded to this. I have read the regulatory impact statement and I do not see any costing anywhere at all for administering the consequences of this bill, the cost of storing the DNA, the collecting of the DNA, or anything around that. It is my personal view that any regulatory impact statement should have a cost-benefit analysis in it. What I am not saying is that we can put a cost on the price of justice. However, I think that provision should be included in this bill. Thank you very much.

LYNNE PILLAY (Labour) : I am happy to stand and take a call on the Criminal Investigations (Bodily Samples) Amendment Bill. In doing so I acknowledge the previous speakers from this side of the Chamber who, I believe, gave really measured speeches on this bill. In particular I acknowledge my good friend and colleague Moana Mackey, who, with her background in science, has been able to give a little bit more information on the bill. I publicly congratulate Moana Mackey on that contribution.

Labour members agree with the use of DNA profiling. We accept that it is a tool that will be an advantage in mainstream policing. But in saying that, I explain to the Committee that Labour when in Government had already amended legislation to significantly extend DNA testing and its effectiveness. I acknowledge what Carmel Sepuloni said about our concern in terms of the added costs. The added costs under National’s regime come from the proposal that all who are arrested are tested, not just those who have been charged. One would ask about this proposal, I hope, in terms of getting the best bang for the buck. Testing a large number of people who are arrested but not charged means that the tests and all the expense that goes with attaining them under the proposed system would be thrown out. That would result in, effectively, an added cost, or even a waste of money and police resources.

I also acknowledge that Chris Finlayson, the Attorney-General, had reported after scrutiny some inconsistencies with the New Zealand Bill of Rights Act. It would have been far better if the Government had supported Charles Chauvel’s amendment, which went a long way towards addressing those concerns. It is really unfortunate that that amendment was voted down. I would be very interested to hear from Government members why that happened. I think that supporting his amendment would have gone a long way towards addressing not only Labour’s concerns, but also the Attorney-General’s concerns about inconsistency with the New Zealand Bill of Rights Act. That is very disappointing, but it is what must be.

I also note that the Privacy Commissioner expressed concern that the changes could jeopardise the value of the existing criminal DNA data bank in preventing crime by undermining public trust. As I said, if there had been some clarity and some certainty around this bill’s complying with the New Zealand Bill of Rights Act, putting the mind of the public at ease on those concerns, then I believe that the bill would deliver more. It would deliver what was intended, rather than the things we have some concerns about. When concerns are present that the bill does not comply with the New Zealand Bill of Rights Act, and when the public is concerned about privacy, there is not confidence in the system.

The Justice and Electoral Committee spent considerable time considering the bill. Of course, at this stage I would not go past acknowledging the chairperson, Chester Borrows, who I can see looks flattered by that acknowledgment. It is a select committee that works well. As well as the staff of the Justice and Electoral Committee, I also thank the officials, because I know there were some robust discussions about the intent of the bill, its consequences, and, perhaps, its unintended consequences. I believe that the participation by officials was very valuable, and it certainly gave more clarity to our deliberations. Thank you.

STUART NASH (Labour) : As mentioned, Labour does agree with this measure. We are not opposed to further DNA testing. But, alluding to what Ms Moana Mackey talked about, it is unclear whether the legislation will have a significant impact on serious crime, compared with the many significant changes the Labour Government made in important areas of the law and order debate.

National is proposing to test all of those who are arrested, not just those who are charged. The reason there is a slight problem with that is that a large number of people are arrested but not many are charged, which means that under National’s proposed system many tests may well be thrown out, resulting in poor use of money and police resources. I suppose that is why Treasury has stated that a lack of clarity around the problems with the current DNA testing regime, along with the anecdotal and empirical evidence to support that, is an issue with this bill.

I would like to talk about two very high-profile cases in the area I come from, which is Napier. A woman called Kirsa Jensen was found murdered on a beach in Napier. She was last seen riding her horse. The killer of Kirsa Jensen was never ever found. This was a case of national significance. It was widely profiled. The police believed that they knew who did it, but they could never prove it, because they did not have the evidence. This case tore apart families and in some cases it tore apart communities. It was a dreadful case and a dastardly crime. I believe that with the sorts of tools we have today the Kirsa Jensen case probably would have been solved. Her family would not have been spared their anguish, but at least there would have been some closure. There was no closure for that family whatsoever, and the case is still a festering sore in Hawke’s Bay.

The other case is that of Teresa Cormack. We often hear about stranger danger. The one case in the last 20 years of a young girl being raped and murdered by a stranger was actually that of Teresa Cormack. It was a dreadful case of a young girl, I think she was aged only 7, who was snatched on the streets of Napier and raped and buried. Again, it was a dastardly crime. It was the sort of crime that does not bear thinking about. I believe that her killer was caught in the end, many years later, through DNA profiling.

One of the big benefits of this legislation is that it may well help solve a lot of crimes that have gone unsolved. I can imagine nothing worse for the family of a victim than not knowing what happened or why, and, certainly, not having anyone to answer for the crime perpetrated against a family member, a friend, or a person in the community. As I said, I believe that the Kirsa Jensen case probably would have been solved with the use of DNA profiling and collection. The police believed they knew who the person who did it was, but they did not have the evidence. With DNA profiling and DNA collection, they probably would have had the evidence to enable them to catch Kirsa Jensen’s killer. Therefore, a very, very dangerous man would have been taken off our streets, taken out of our community, and put where he belonged. We know of other dastardly, high-profile cases that are unsolved at the moment that could well be solved due to DNA profiling.

One of my Labour colleagues, who spoke very well on this bill, Moana Mackey, alluded to the fact that this bill will not allow repeat offenders, like the “Parnell Panther”, to continue offending. He went for months raping woman after woman, creating fear in communities and fear amongst the female population. That insidious creep went around communities committing the most heinous of crimes. With this sort of DNA profiling, that sort of monster may well be caught a lot earlier. The technology did not exist back then, and therefore he was able to go on and on, but he was finally caught.

This bill provides a very valuable tool in the police tool box that I think will make a big difference. It not only sends a very important message to the criminal element that this offending will not be tolerated but also sends a very important message to the people of New Zealand that we are prepared to go out there and protect their rights and put in place laws that will ensure that crimes are solved as soon as they possibly can be. As mentioned, there are the rights of the individual, but I firmly believe that the rights of the community and the rights of the country must come first. We must get these monsters off the street, and if this bill helps then that is fantastic.

• The question was put that the following amendment in the name of Charles Chauvel to Part 2 be agreed to:

to insert the following clause:

48Independent review of changes

The following new section is inserted after section 84:

“85Review of operation of certain provisions of this Act

“(1)This section applies to the provisions of this Act inserted by the Criminal Investigations (Bodily Samples) Amendment Act 2009 (the provisions).

“(2)The House of Representatives must, as soon as practicable after 1 December 2014, refer to a select committee for consideration the following matters:

“(a)the operation of the provisions since the date of the commencement of this section:

“(b)whether the provisions should be retained or repealed:

“(c)if they should be retained, whether any further statutory amendments are necessary or desirable.

“(3)The select committee to which these matters are referred must report its view on them to the House of Representatives before 1 December 2015.”

Hon NATHAN GUY (Associate Minister of Justice) : Although it may not be apparent from its title, the Criminal Investigations (Bodily Samples) Amendment Bill expands the ability of police to collect and use DNA samples to help solve and prevent more crime, which is a big focus of the National Government. This is because in many cases DNA technology provides more possibilities to obtain evidence from crime scenes than traditional fingerprint searches.

The bill will be brought into effect in two phases. The first phase will allow a DNA sample to be taken when the police intend to charge a person with a relevant offence as defined in the Criminal Investigations (Bodily Samples) Act 1995. The relevant offences will be expanded to include minor offences that have a link to more serious offending, and offences where DNA is often left at the crime scene. This phase will be brought into effect in July 2010 to allow time for the police to finalise operational guidelines and train their officers, and also to assist the Institute of Environmental Science and Research to prepare to manage their increased workload.

In the second phase the power to take a DNA sample will be extended for adults to all imprisonable offences. This will be brought into effect by Order in Council following a broad review of the operation of the Act and the new power. It is my intention that full implementation will be achieved by the end of 2011.

MOANA MACKEY (Labour) : I am happy to speak on the title and commencement clauses of the Criminal Investigations (Bodily Samples) Amendment Bill. To respond to the comments of the Minister in the chair, Nathan Guy, I say that I am very disappointed that he did not confirm that the funding that is needed by the Institute of Environmental Science and Research to ensure that the testing will be carried out properly will be there. I acknowledge the comments that were made by the chair of the Justice and Electoral Committee, Chester Borrows, in the debate on Part 2, but the most important part of the question that I put to the Minister in the chair—the part that he has not answered yet, and that I hope he will—is whether he will guarantee the money that is needed by the Police and by the Institute of Environmental Science and Research to ensure that this process—

Hon Nathan Guy: It’s all in here.

MOANA MACKEY: No, will he guarantee it? He should stand up and tell me that the money that the institute needs will be there. He should not tell me that he has a bit of paper that gives the figures that the institute needs; he should tell me that the Government will give it that money, and that there is no question that it will get the money that it needs to ensure that there is no risk of a miscarriage of justice. That is what we are talking about here.

I was a little bit concerned to hear the chair of the committee say that the Institute of Environmental Science and Research already does chain of custody, and it does it very well. He is right, but I have worked in a laboratory, and I can tell members that when one suddenly gets thousands of extra samples and there is not the funding for more staff, more space, a computer system to put them on, or whatever might be needed, there is a real risk. I am not saying this to be smart, to be tricky, or to try to create problems; I am genuinely asking. The officials may well have come to the committee and said that everything is hunky-dory, but they know what they would get if they crossed the Government at this stage. I know people who work at the Institute of Environmental Science and Research who do this job, and they are concerned. They are worried, particularly with the financial pressures on the Crown research institutes at the moment. They have to look overseas for work to be able to pay a 9 percent dividend to the Government, which was not required of them under the last Government, because that money was able to be reinvested. A 9 percent return? Yes. A dividend back to the Government to pay for things like private schools and national standards? No. I want the Minister in the chair to tell me that the Institute of Environmental Science and Research will have the money that it needs in order to ensure that we do not run any risk of a miscarriage of justice.

I also want to go back to the Minister’s discussion of the power of this technology. He is absolutely right: this is incredibly powerful technology. It is being improved all the time. I cannot remember who said this—I think it might have been Spider-Man, although he might have been quoting someone—but with great power comes great responsibility. The responsibility on this Committee is to get it right, because this is powerful technology. I feel like I sound a bit like a DNA denier, which I am not. I am a realist. I want this Committee to accept that there is a danger, when it comes to juries, around the fallibility of DNA. DNA, like any technology, is not infallible. There could be human error or deliberate planting. It is not infallible, but it is an incredibly powerful tool. People who go before a jury with DNA evidence against them are not in a very good position.

Stuart Nash: Toast!

MOANA MACKEY: Yes. The fact is that we need to be aware of this fallibility if we are to increase our use of this technology, and if we are not sure that the funding will be there to ensure that we have all the proper safeguards for this very powerful technology. We need to make sure that the general public understand that, as I said in my second reading speech on this bill, unlike taking an entire fingerprint, DNA is tested at only a limited number of loci. We do not test the entire DNA profile of someone. We do not get someone’s entire genetic profile. Although DNA is one of the best technologies that we have, that fact needs to be understood. There needs to be education of the public around that, so when people serve on juries, they understand how the technology works, and they do not think that just because someone has DNA evidence against them, it means 100 percent, absolutely, and unquestionably that it has to be that person. That needs to be understood.

I come back to this matter again, and I say to the Minister in the chair—he waved a bit of paper at me, and I am not sure what is on it—that he should get up and tell us that the money will be there. He should tell the people who work for the Police and the Institute of Environmental Science and Research that they will be properly funded to do this testing. The Minister might think this is funny, but we run a real risk of a miscarriage of justice if the money is not guaranteed to the organisations that are to be collecting, testing, and storing the samples. When those organisations are put under significant financial pressure and workload pressure, and they are not given adequate resources to look after and protect this incredibly powerful technology, we really run the risk of unintended consequences.

Labour supports this bill, but we just want to hear from the Minister in the chair—or from the Minister of Research, Science and Technology, who is responsible for Crown research institutes, and who is sitting across the Chamber and has not taken a call yet—that the money will be there for the Institute of Environmental Science and Research.

Hon Dr Wayne Mapp: Contract. It’s contract-based.

The CHAIRPERSON (Lindsay Tisch): The question is, that clause 1 stand part. I call Moana Mackey.

MOANA MACKEY: The Minister just yelled something out to me, and I feel I need to respond.

Chris Tremain: I raise a point of order, Mr Chairperson. The question had already been put, and I ask—

The CHAIRPERSON (Lindsay Tisch): I am the sole determiner of that. I have called Moana Mackey.

MOANA MACKEY: I thank the senior Government whip for trying to shut me down on this very important issue, which is clearly causing the Government embarrassment.

Hon Member: It was a serious point of order.

MOANA MACKEY: That is right; that is true.

The Minister in charge of Crown research institutes has just washed his hands of the institute. This man is meant to be in charge of the organisation that will be given a huge increase in workload.

Simon Bridges: DNA expert? Body language reader?

MOANA MACKEY: What?

Simon Bridges: Well, how did he wipe his hands of it? What did he do to wipe his hands of it?

MOANA MACKEY: Oh, for God’s sake!

Simon Bridges: No, you’re saying it. Tell me what he did.

MOANA MACKEY: If Mr Bridges just listened, instead of sitting up there, chipping away constantly, and never actually listening to anything other than his own voice, he might hear. The Minister of Research, Science and Technology, Wayne Mapp, interjected across the Chamber.

Simon Bridges: What did he say?

MOANA MACKEY: He said that it will just be on contract, so it does not matter. I would like the Minister to take a call, because the people who work at the Institute of Environmental Science and Research are concerned about what will be a long-term increase in their workload. I ask whether the Minister will guarantee that within the contract for the institute for this increase in workload, it will get not only the funding that the select committee was told it would need, but also funding that goes beyond the testing of the samples to the chain of custody—the administration. I know that the Government does not like talking about administration, because that is bureaucrats; it is not front-line staff. But it cannot work if the administration—

Hon Dr Wayne Mapp: Obviously you haven’t looked at their contracts.

MOANA MACKEY: Well, I ask why the Minister Dr Wayne Mapp does not get up and take a call. Rather than just sitting there like a dried arrangement, I ask why he does not get up, take a call, and speak on his portfolio area of responsibility. I know that he did not want the job. I know that he does not like it. He keeps going out to people in the Crown research institute community and telling them that he never wanted the job, which does not exactly instil confidence in their new Minister. I know that he was trying to lower expectations considerably, and I say to the Minister that it is a job well done, but he might want to get up in the Chamber and answer this question. I say to the Minister that I am not trying to be difficult and I am not trying to be argumentative or problematic. I have worked for this Crown research institute and I have worked in other similar areas. I know how often the chain of custody does not get picked up in the administration side.

Chris Tremain: This debate is on the title and commencement.

MOANA MACKEY: It should be called the “Criminal Investigations (Bodily Samples) Pay Them Properly Bill”. Does that make the Government whip happy? The chair of the select committee got up and said that the Institute of Environmental Science and Research already had a great chain of custody process. Well, that said to me that the institute would not get any more money for doing chain of custody. I am sure that the Minister will agree, because he has been around and he has looked, that that is one of the most important parts. There is no integrity in the entire process if one is not absolutely 100 percent sure that from the moment that sample is taken, the process is sound. It is transported, it arrives at the Institute of Environmental Science and Research, and it is logged in. It is stored, because it will not be tested yet, and then it goes through the laboratory process. It is then analysed—a person does data analysis on it. Those results are then logged back against the person. Finally, the sample, whether it is a DNA data sample or a DNA physical sample, is stored. I ask how all of that process will be properly funded—it is not expected to come out of the baseline funding of Institute of Environmental Science and Research—given that the Minister now expects the institute to pay a dividend to the Government to pay for private school funding increases rather than that money going back into science. The Crown research institutes are under financial pressure; I am sure that the Minister would acknowledge that. I do not think it is too much to ask for the Minister in charge of this portfolio area—who has sat there the entire time I have been speaking and has been chipping away, but he will not get up and take a call on his portfolio area—to say to the Institute of Environmental Science and Research and this Committee that the funding will be there and that the Government will make sure that the contract includes all this extra area. I do not know why that is such a difficult thing for him to do. If he does not want to be the Minister for this portfolio, then he should give it to someone who does want to be the Minister. That is all I would say about it.

Hon Darren Hughes: He only got three out of 10 in the Dominion Post.

MOANA MACKEY: Three out of 10. If the Minister does not want to do it, then he should not do it. He should step aside and give the job to someone like Dr Paul Hutchison, who understands how the Crown research institute sector works, who works really hard with those people, and who knows the importance of funding the administration of sample collection and sample chain of custody care.

Hon Dr Wayne Mapp: Why don’t you look at the latest results for all of them?

MOANA MACKEY: Well, the Minister should get up and take a call. I am happy to sit down now so that the Minister of Research, Science and Technology, who is responsible for Crown research institutes, can stand up and give the Committee the guarantee that it needs that this bill will be properly funded so that we do not run the risk of any kinds of miscarriages of justice.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I am pleased to be able to take a call on this section of the Criminal Investigations (Bodily Samples) Amendment Bill. As my colleague Moana Mackey said, it could have a new name. Its new name could be the “Criminal Investigations (Are You Going to Pay Them Properly) Bodily Samples Amendment Bill”. But I think there are some very serious issues apart from the payment. I will come back to that aspect, because it is part of the reason why I have taken this call. The Government needs to take account of how much it will cost. I think that an assumption is being made here that once a sample has been taken, it somehow identifies itself and it does not have to go for analysis to a Crown research institute that is already under pressure. That analysis will provide the basis for evidence, but it is not evidence in itself of anything other than the presence of somebody who is more likely to be that person than anyone else.

Unfortunately—and I think my colleague has raised an extremely good point here—the police are up against it as far as this issue goes. Any police officer will tell us today that the programmes they hate the most on TV are CSI, Cold Case, and anything that deals with DNA in any way, shape, or form, because there is almost an assumption that if the police do not turn up with a DNA sample from a crime scene, then somehow they do not have sufficient evidence to convict somebody who may be guilty of an offence. I think we do a great disservice to the criminal justice system when we put all of our eggs in one basket, and when we try to rely on a single technology and assume that, because facts fall in a particular way, that then results in certain conclusions being able to be drawn.

But that is not my only concern around this legislation. The cost is a significant part of it. DNA does not analyse itself. The sample does not analyse itself. The process needs to be properly resourced, and consideration has to be given to the effects of having such a large volume of material available. I sat in a police station once, Christchurch Central Police Station, where they—

Hon Trevor Mallard: I’ve done that, too.

Hon LIANNE DALZIEL: Well, I was not there for the same reason as that member! I was there as a visiting member of Parliament, not as a person under an inquiry. So, there we go. The police let me do a database search of a fingerprint, which was quite an exciting thing to do, but they had already arranged for it to produce a match so that I could see how the match came up on the computer system. But otherwise, even the process of matching takes hours. It generates hours of computer time to find the exact match, or the closest possible match in terms of—

Hon Trevor Mallard: It doesn’t do that on CSI.

Hon LIANNE DALZIEL: Well, the thing about CSI is that young women are led to believe that they can go on to a crime scene wearing lipstick, fingernail polish, and high-heeled shoes, so there we go. A lot of the things about those programmes are not really real, I say to Mr Mallard. I am sorry to disappoint him. But the point is that an incredible amount of pressure is put on the whole string of the process that has to be put in place in order to bring that evidence in front of a court at some future stage. It is not just a matter of taking a swab and then the swab looks after itself. A lot of work has to be done after that.

The second point I would make is that Treasury says that this legislation does not stack up in terms of its regulatory impact statement. I was involved in the original decision-making when I was on the select committee that looked at the original extension of DNA testing in this particular framework. This bill takes it a step further from the legislation that our Government introduced. We highlighted at the time that there were considerable links between certain types of crime and other types of crime. For example, there was a very strong association between previous convictions for burglary, and a rape conviction. The reason that there was a strong correlation was the opportunistic element involved with finding somebody at home when a burglary either was in process or was perpetrated when somebody was at home unexpectedly.

That is certainly a correlation between types of offences where one would think that DNA would be a useful source of information, and a useful correlation could be made. Gathering DNA from people convicted of burglary offences had a very distinct purpose when one looked at trying to find people associated with rapes later on, where the person was not caught immediately. I think that in those circumstances, the regulatory impact analysis, the cost-benefit analysis, stacked up. It made good sense to target those particular offences because of that strong correlation.

Here, all of that whole cost-benefit analysis has just gone out of the window. There is no cost-benefit analysis to substantiate the broad sweep, as it were, in terms of the collection of DNA in these circumstances for those charged with imprisonable offences without any judicial oversight whatsoever.

The second point is that even the Human Rights Commission has said that this has gone too far and has the real risk that allowing this to be used in this way will undermine public confidence in the system. The Privacy Commissioner also expressed concern that the value of the existing criminal DNA data bank would undermine public trust in the police and the Government. These things are of concern. But apparently we are not concerned that Treasury thinks there is a lack of clarity around the nature of the problems with the current DNA testing regime, that the Privacy Commissioner has expressed real concerns about undermining public trust in the police, that the Human Rights Commissioner is concerned that the proposed changes go too far, and that even the Attorney-General has tabled a report showing the inconsistency with the New Zealand Bill of Rights Act.

Charles Chauvel: That well-known civil libertarian.

Hon LIANNE DALZIEL: That well-known civil libertarian, as has been highlighted! The point I am making is that, given all of those things, and the fact that we have not taken the opportunity for this bill to be remedied by the very good amendment that my colleague put up, first of all, to make the judicial oversight—

Charles Chauvel: What’s his name?

Hon LIANNE DALZIEL: My good friend, the soon-to-be Hon Charles Chauvel. He put up two amendments. One amendment was to address the question of judicial oversight. The second one, which I think was also important, addressed the question of a review after the legislation had been in place. It is all very well for the Minister to stand up in the debate on this particular aspect of the bill and to say that the bill will be given a “once over lightly” before it is implemented. Actually, he will just implement the bill, and the “once over lightly” will not be the detailed analysis that I think Treasury, the Privacy Commissioner, the Human Rights Commissioner, and, I would assume, the Attorney-General would expect. With those defects sitting around this issue, there is, indeed, a sense of disquiet on this side of the Chamber about where this legislation has taken us. It would be helpful if the Minister would simply stand and provide my colleague Moana Mackey with the information she has requested, which is very simply that if the extent of the pressure that will be put on the Institute of Environmental Science and Research is not remedied in advance by a commitment to the funding that is required to meet that pressure, we will, in fact, create a greater problem than we have today with this legislation, instead of going anywhere near to resolving the issue.

As Treasury has said, the Government has not even provided clarity around the nature of the problems with the current DNA testing regime. There is a little bit of a sense of smoke and mirrors here, and a sense that this bill might be showing that the Government is doing something, but may not be achieving that, without the kind of commitment that we have been seeking here tonight.

KELVIN DAVIS (Labour) : I will take just a short call to talk about the title of the Criminal Investigations (Bodily Samples) Amendment Bill. I will talk a little bit more on cultural sensitivity and, in particular, the sensitivities that the police will need to demonstrate when they apprehend suspects, as I guess we could call them. The question I have for the Minister is whether the police will receive training in cultural awareness and training on how to deal with Māori offenders, in particular. I can think of a number of people up north, unfortunately, some of whom are my relations, friends, and people I have played rugby with, who have had cause to be apprehended. If the police were not careful in the way they dealt with them in requesting a bodily sample, I could understand that there would be quite a bit of concern. The reaction of the person who was being apprehended might not be the best.

I think it is really important that the police have training on how to deal with Māori in this situation. I recall watching on television one of those police programmes in which the TV cameras tag along with a police unit at night. I recall a situation where a young Pākeha policeman dealt with a Māori offender, and just the language that this policeman used when talking to this person created a lot of confusion. In fact, even for me watching the programme there was a lot of confusion. The way that the policeman dealt with this person inflamed the situation, and in the end this person was arrested for quite a minor offence. I would hate to see the situation where the police were trying to get a bodily sample from a person and were not particularly sensitive in the way they went about it, and that inflamed the situation. It could mean that the person was charged with another offence.

I see in the bill that the police are to provide suspects with some sort of written description of what is being requested. They are also meant to ask for bodily samples in plain language that suspects can understand, so that they know what is going on. As a teacher, I have had experience of trying to talk to people, and I know that even though people might nod and say “Yes”, that does not necessarily mean that they understand what is going on. It is really important that the police are able to get the information across in a sensitive manner so that they do not inflame the situation in terms of taking a bodily sample in the form of a mouth swab or whatever. It is important that the situation is not made worse and that everybody’s needs are respected, bearing in mind, as I said earlier, that in the case of those people who are guilty of an offence, I have no problems whatsoever with bodily samples being taken from them.

It is important that we use DNA testing, as my colleague Stuart Nash said earlier, where people have been traumatised, sexually abused, or assaulted. Mr Nash brought up a situation in Napier where, if DNA testing had been available at the time, the murder of a girl could have been solved.

It is important that there is cultural training for the police when they collect these samples. I know that means more funding, and already my colleague Moana Mackey has asked the Minister of Research, Science and Technology about more funding. The more samples that are brought in, the more funding will be necessary to support the testing of samples. Another question that I have for the Minister is whether the police will be funded so that they have some training in cultural sensitivity.

The CHAIRPERSON (Lindsay Tisch): I move, That the report be adopted.