CHRISTOPHER FINLAYSON (National) : Madam Assistant Speaker informs me that I have 1 minute and 30 seconds remaining to speak on the Central North Island Forests Land Collective Settlement Bill. I note that I started speaking last night at 9.52 p.m., so strictly speaking I should have 2 minutes, but I will not quibble with the Chair, because that would be inappropriate.

All I want to do in closing is address the question of public access. It has been comprehensively dealt with in the bill. It is not an issue between the parties. The deed of settlement requires the Crown to grant public access easements over the forests prior to the settlement date, and we can deal with that issue in the Committee stage. Clauses 10 and 11 deal with the issue, and they are substantially the same as the clauses that the Committee of the whole House debated last night in the context of the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill; I refer to Supplementary Order Paper 250, which brought into that bill clauses 130A and 130B. The intent is the same, even if there are minor differences in wording.

With those closing comments, I believe that all the issues have been considered and that there is no impediment to the bill proceeding through all its stages as quickly as possible.

Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) : I naturally stand in support of the Central North Island Forests Land Collective Settlement Bill. I intend to take only a very short call. I listened very carefully to the Hon Dr Michael Cullen’s second reading speech in the House last night, and I am pretty confident that he covered all the technical aspects of the bill, and also highlighted some of the important issues around the process that was undertaken by the Central North Island Iwi Collective.

If I have any comment at all to contribute to this discussion, it is about the process. It is important to acknowledge the leadership of the iwi collective leadership by Te Ariki Dr Tumu te Heuheu, and also the efforts of his executive team and all those tribal leaders who made a contribution to the process and also to the manner in which the allocation of interests to all iwi concerned will be undertaken.

It is also important to comment about the effect that this particular process has had nationwide where there are collective interests involving a number of iwi over a number of areas, and relating to specific claims. It seems that a forum for the representation of common interests is very, very popular. I have met with a number of iwi around the country since the central North Island agreement was signed who wish to look at a similar process so that they themselves can resolve issues that they all share as iwi. For example, the Muriwhenua forum will look at a number of areas, including Te Oneroa-a-Tōhe, Landcorp farms, forests, rivers, and mountains. They themselves will decide how individual iwi interests will be represented and also how those interests will be distributed. Interestingly enough, I met with iwi from Wharekauri—Moriori and Ngāti Mutunga—who are also looking at a similar process. I am sure that over the next few months we will see similar arrangements being implemented around the country.

The way in which the central North Island settlement was reached has gathered a lot of momentum and a lot of support. It is important to congratulate all those who have been involved in the central North Island settlement to date, and to thank them for the contributions they have made. I thank my colleagues Dr Cullen and the Minister of Māori Affairs for the great work they did, and I acknowledge the independent facilitator, Wira Gardiner, who conducted the whole operation like a military exercise. I do not mean he shot prisoners; I mean he made everyone stand to attention—but I was getting worried sometimes! [Interruption] And Matt Te Pou; there are so many whom I could mention, but if I go through them individually, I am bound to offend by leaving somebody out.

I also acknowledge the contribution to this debate by Chris Finlayson. I was not sure whether he was talking about the bill or auditioning for a job as Crown prosecutor, but I thank him for his contribution. Kia ora tātou.

Hon GEORGINA TE HEUHEU (National) : I am pleased to rise to take a call on the second reading of the Central North Island Forests Land Collective Settlement Bill. This bill came to the Māori Affairs Committee at the same time as the bill we dealt with last night, the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill, and the select committee travelled to the central North Island to hear submissions on the bills at the same time. I think it is a tribute to the significance of this bill and its ground-breaking approach that there was a very, very good attendance of the interests represented by this bill, as for there was for the Te Arawa bill as well, and that there was generally widespread support for it. So it is very good to be here this morning to see the return of the bill to the House and to anticipate its passing into law later this week.

This is an important bill, as has already been referred to. It is important to remind ourselves that it addresses only claims as far as licensed Crown forest land is concerned, and that there will be future negotiations over various packages for each of the iwi in the collective. I was interested to hear the honourable member who spoke previously, the Hon Mita Ririnui, talking about how this bill, and the approach in it, appear to have acted as a springboard for other settlements across the motu, in terms of the way it is possible for various iwi and various interests to come together in a settlement when there are interests in common. That obviously makes sense if having to wait to deal with them individually would not result in a better settlement and would also result in a further time delay. I look forward to the Hon Mita Ririnui outlining several other areas where the Government has been engaging with iwi over the last wee while since the central North Island settlement, and to seeing some of those settlements come down the line, as well. I am very interested also to see that progress appears to be being made in terms of settlements in Tai Tokerau.

I would just flag a slight anxiety of the Opposition members that there appears to have been a rush to settle these claims. That is not to take away from the importance of doing so or to take away from the fact that the iwi involved have been willing to engage in the process in this last 12 months. After all, they are not witless, either. They know when they are ready to settle, and if they see a readiness on the other side, which they obviously did, then they have been willing to move to the table. It bodes well for the future, and that is good, considering that there had seemed to be a bit of going to sleep on the job in the previous 8 years of this Labour Government.

In any event, we had very good gatherings at the select committee. I will refer briefly to one or two issues. The mandate issues that arise in all settlements certainly were not absent from the select committee hearings on this bill. Several submitters opposed the bill on the basis that the collective had no mandate to represent them, and that the inclusion of their claims in the bill was of prejudice to them, because it removed their ability to pursue their claims through other avenues, such as the Waitangi Tribunal or the courts. Issues of mandate were raised in relation to Ngāti Manawa, Ngāti Hikairo, Ngāti Whāoa, Ngāti Tahu, and Ngāti Rangitihi. The submissions from all of them were well put to the committee. They were certainly aired and given a good hearing.

But in the end what is unique here—and we have acknowledged this already—is that the Government has basically seen fit to let the iwi sort through issues that are internal to them. This has been unlike previous matters, where the Government has tended to go where it should not tread. It appears that in the end one has to accept certain mandates, because there seems to be a majority there, and because various interests have been mandated for other purposes. That does not mean to say that those who feel aggrieved ought to be ignored. Hopefully, the collective in time will find a way to bring those parties into this settlement as well. I understand that in the case of Ngāti Hikairo, since the select committee went to Taupō there may have been some progress on their issues in relation to the Taurewa Forest. If so, that is good.

I would again urge the tribes within the collective to take that issue seriously—I am not suggesting that they have not—and I hope that when this bill passes into law, they will take all possible steps to bring those interests into the settlement. This is a big settlement; it is a settlement that will provide a very potent springboard for the tribes of the central North Island. It is a very sensible one in the commercial sense, because it keeps the forest estate under one entity. That makes sense, undoubtedly. It also makes sense that everyone who is entitled to benefit from this settlement does so in the future.

The other matter that I would like to refer to is the allocation model and the tikanga-based mana whenua resolution process. I raised this issue in my first reading speech. We were interested as a select committee to explore the issues involved with submitters. The proposed allocation for the commercial benefits in schedule 3 of the bill appears to be problematic for some iwi, but, again, the collective itself proposed that to the Government. The tikanga-based allocation model, or resolution process for the allocation of land interests, of course, is still to come. It is still before us. There are some anxieties about that, as well. It interests me again that the iwi have proposed that to the Crown. It is good that the Crown accepted that, given the experience we had over the fisheries model—although it has been laid to rest some time ago, and we have seen the allocation of fisheries to iwi over the last 2 or 3 years.

This model tries a new approach, which leads us to the iwi themselves. After all, they are the ones who know best, or who ought to know best, who has mana whenua in the various areas covering the Kaingaroa Forest. So that does seem to be a sensible place to start. The Opposition will be watching with interest, and should we make it into Government we will certainly be monitoring and supporting the process. As I say, it makes sense to leave those internal matters to the collective itself, but it does require great leadership. Maybe it requires the various individual entities to put to one side their own interests, in an attempt to make sure that the collective remains strong and united, and to realise that everything is possible if one continues with dialogue and kōrero. Anything is possible, if one does that. So we look forward to seeing how that model works, and obviously if it is being followed elsewhere, then maybe that is the way that other tribes will be able to see their way forward too. Thank you.

PITA PARAONE (NZ First) : Tēnā koe, Madam Assistant Speaker. I am pleased to take a call in the second reading of the Central North Island Forests Land Collective Settlement Bill. The Māori Affairs Committee heard submissions on this bill, and I was a member of the committee. This will be one of the few times I give some self-praise, because I think the way in which the committee handled the various views on this bill would have given all the submitters a sense of satisfaction that they had received a fair hearing.

One of the observations I made during that whole process, however, was that I was mindful of the oft-stated phrase used to advertise State of Origin rugby league matches in Australia: “state against state, mate against mate”. Well, in the case of this bill—and I am not wanting to be derisive about the whole process—the sad part for me during the hearing process was to see whānau against whānau, elder brother or elder sister against younger brother or younger sister. Although I sympathise with the views of both parties, I think when we have settlements affecting land, and, in particular, mana whenua, then certainly we will see more of that kind of division. That is the challenge that awaits the leadership involved in this settlement.

Having said that, I acknowledge the real leadership that was exercised by those who represented their respective iwi at the negotiating table. I think some of the decisions they made showed true leadership. One of those decisions was a preparedness to give up a percentage of what was already agreed to, to allow another iwi to have a bigger slice of the cake, so to speak. I want to acknowledge that sort of leadership.

There are a number of issues that are worth making mention of, and, in particular, the issue of mana whenua. Although this bill is essentially, in the first instance, about the allocation of rental funds held by the Crown Forestry Rental Forestry Trust, the fear of many of those who had some resistance to the bill was that it might set a benchmark in terms of the exercise of mana whenua. As I say, that will be a real challenge for those involved. I will give members an example. Part of this settlement is known as the Taurewa Forest. One hapū made private submissions to me to say that in their view, and not only in their view but also by virtue of their tikanga, they felt that that part of the settlement should be allocated to them. That is an issue that will have to be dealt with by the leadership.

The other point I will make with regard to the issue of mana whenua is that we received several submissions, both written and in person, from a particular submitter, all emphasising the fact that in terms of history and his tribe’s tikanga, his particular tribe owned a majority of the land that this settlement is about. His real fear was that if this bill was to go through in its present form, then the percentages that were used for the allocation of Crown Forestry Rental Trust funds and future rentals would determine how the land would eventually be distributed amongst the claimants. His concern was such that he has an application with the Māori Land Court, and I understand that he wanted an urgent hearing with the Waitangi Tribunal. But at the end of the day we have to take into consideration the fact that the negotiators, who may not have had a 100 percent mandate but certainly had a majority mandate, have made the decision. They have made the decision on behalf of their iwi. Who are we to amend that decision? Any amendment would take the whole process back to square one, and we all know that, for this particular settlement, the negotiators have had to travel a very long and rocky path to get to the point where we are at the moment.

I will also make reference to Ngāti Rangitihi, who were at the table very early in the piece, but, as part of the mandate process, quite clearly did not have the support of their people to accept the settlement. Whatever the argument might be as to why they did not get their support, I think it is to the credit of those who have negotiated this settlement that they have allowed an opportunity for Ngāti Rangitihi to get the required mandate. I understand that postal voting closes on 6 October—I am not quite sure about the date, but it is very soon. Those people have until Christmas Eve 2008 to indicate whether they have the required support, and I think it is to the credit of the negotiators of this settlement that they have allowed that to happen.

Suffice it to say, New Zealand First supports the second reading of this bill. Kia ora.

KEITH LOCKE (Green) : The Green Party will be supporting the Central North Island Forests Land Collective Settlement Bill. It has been interesting to hear the contributions so far about the complexities of the process, about the submissions to the Māori Affairs Committee, and about how to resolve the unresolved issues. The Green Party will be supporting this bill.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Madam Assistant Speaker. Kia ora tātou e hoa mā, i tēnei ata. The date 25 June 2008 was a unique moment in parliamentary history. The downside for me was that I was not here. I was, in fact, away at a tangi. I arrived back in the House to take a call in ACT’s slot, following on from my co-leader Dr Pita Sharples. But one could not help but feel, though, that something significant had happened on that day. I am, of course, referring to the first reading of the Central North Island Forests Land Collective Settlement Bill.

As the member of Parliament for Waiariki, I was very disappointed that I was not here to witness a piece of history. Engari, e kore e taea te karo i te karanga ā-mate. One cannot escape the call of those who have passed on. The taxi driver commented on the migration of Māori here, as we headed from the airport back to Parliament. He talked about, and the people talked about, kuia and koroua, whānau, children, babies in arms, all having been drawn to this place to be a part of history in the making, and about seeing that everywhere one turned, there were Māori. When I finally got into the House, the public galleries that were crowded earlier in the day had thinned out as people had moved off for kai and to celebrate the event.

The Māori Party acknowledges that day. We acknowledge those who made it happen, te ariki Dr Tumu te Heuheu, the iwi negotiators, Matiu Te Pou, the Ministers, and Dr Cullen in particular, and Wira Gardiner on the pursuit of kotahitanga as the underlying principle, the focus of unity. As I did during the first reading debate, I give credit where credit is due, and I acknowledge, as I say, Dr Michael Cullen for leading a new approach that sees us considering a heap of settlements prior to the closing-off of Parliament.

The Māori Affairs Committee report describes the complexity that is associated with the mandate issues of iwi within the collective, but clearly the approach taken to achieve kotahitanga within ourselves has been achieved, for the most part. We certainly heard in the select committee, as other speakers have spoken about, from those who had issues, but, considering the task, Matiu Te Pou and Wira Gardiner must take a great deal of credit for the result. This would never have been a straightforward procedure.

The iwi making up the collective, as we have heard, are Ngāi Tūhoe, Ngāti Manawa, Ngāti Tūwharetoa, Ngāti Whakaue, Ngāti Whare, Raukawa, and the affiliate Te Arawa iwi and hapū that are all detailed in the bill. There is space there for Ngāti Rangitihi, and I am hopeful of hearing in the Committee stage about the progress of the meeting that was held over the weekend. I have not been able to catch up on the detail of that. I am sure that the Minister will help us out on this occasion. The collective is a significant grouping of iwi.

Having followed this process from the start, it was pleasing to me to see the move away from caution like that shown at the hui held at Waitetoko last year, through to kotahitanga, to unity. I am clear in myself that getting to consensus views would not have been reached without fierce and robust debate in that sort of forum—and so it should be. There is much at stake here, so all of the lead-in should be given the utmost scrutiny.

Amongst all of this is Ngāti Whāoa, who, for all intents and purposes, may be classed as a small player. I spoke about this matter in relation to the Te Arawa affiliates bill. The desire on the part of Te Rūnanga o Ngāti Whāoa to uncouple itself from Ngāti Tahu is clear, and I have statements from Te Rūnanga o Ngāti Whāoa to confirm that. I will raise that issue again in the Committee stage, but it is a major issue. Why? Because Ngāti Whāoa has not insignificant interests in the central North Island forests under mana whenua. It is a small iwi, with significant interests, but its place in the scheme of things will be gone, lost in fact by way of its being, firstly, coupled with Ngāti Tahu, then, secondly, wrapped into the Te Arawa affiliates. I will continue to do the best I can to represent the interests of Te Rūnanga o Ngāti Whāoa, which has asked me to take up its concerns.

We know that this settlement, like every settlement, carries with it the legacy of generations that have gone before. The central North Island settlement is no different from others; people have passed on but have left behind matters that can be addressed only within and between the hapū and iwi who form this collective. I remain hopeful that matters of concern will be sorted out internally, for it is clear that damage done between and among whanau, hapū, and iwi will be long lasting and talked about on our marae for years to come. Mr Pita Paraone spoke about that in his speech.

As we now know, mandate concerns were raised to do with Ngāti Manawa, Ngāti Hikairo, and Ngāti Rangitihi, and, as I say, Ngāti Whāoa and Ngāti Tahu. There were accusations of people feeling they were not receiving basic information, suggestions that there were inconsistencies around all of those who could say they spoke for the tribe, and reports of people being shut down at hui. Although I and other members at the select committee may have concerns about some of the accusations, it is significant that the Crown believes that those interests are best dealt with by those iwi and hapū themselves. I have to say I concur with that view. Iwi must hold their own to account and deal with issues internally. I must add, to be clear, that I mean this should apply when the disagreement is intra-iwi. Where there is inter-iwi disagreement and a settlement is at stake, I say the new model of rangatira ki te rangatira with experienced facilitators can work and would save a heap of stress at the business end. It is important that resolution is achieved if it results in long-term gains for the people.

Today we acknowledge the significance of the $400 million - plus settlement as providing a foundation for the future of the people of Te Waiariki. Much has been made of the return of 176,000 hectares of land, which will make Māori the largest forestry operator in the country. Much has been made also of the collective ownership, the large natural grouping, that brings together the seven iwi representing over 100,000 Māori. We know, too, that the settlement will make those iwi amongst the largest investors in Aotearoa. Those are all significant features of the settlement, but we cannot lose sight of the injustice that is part and parcel of every settlement process, which is that, at its core, compensation is only ever a fraction of the losses experienced.

The Māori Party will not be quiet about the ongoing anomalies that must be responded to in the broader context of settlement policy. We will continue to raise the issues around cross-claims and time frames, and around decisions being made in haste. But today is a day to recognise the precedent established by this bill. This settlement is innovative in the way in which it is iwi driven and tikanga based. The tikanga-based mana whenua resolution process, set out in schedule 2 of the bill, is a really interesting concept, which we welcome as the initiative of the iwi involved. The concept involved three different criteria, in the consideration of mana whenua, ahi kā roa, ahi tahutahu, and ahi mātaotao in three different tiers: negotiation, mediation, and adjudication. This provides an innovative model for other iwi to examine.

The matter of the splits of rental moneys to iwi versus mana whenua is at the heart of concerns by submitters, but I will talk about that at the Committee stage. Ngāti Manawa, for example, has significant mana whenua interests over the land, yet it gets only 6 percent of the rentals. An explanation of that would be appreciated. It is of note, too, that the Waitangi Tribunal, in its report on the Native Land Court’s investigation of Kaingaroa No. 1, suggested a fluid, overlapping, and complex layering of interests. It may well be that the process that the central North Island negotiators and iwi have come up with satisfactorily addresses that point, although the proof will be in the pudding.

Perhaps a mark of how people have viewed this settlement has been the lack of strong and coordinated public opposition to it. Although issues have been raised, it would be fair to say that the unique process the collective has followed has received a positive response. In fact, only a week after the signing, three northern leaders drew out comparisons for arrangements that might work, say, for Ngāpuhi, Ngāti Hine, and Ngāti Whātua. Rāniera Tau, Ērima Hēnare, and the Māori Party list member Naida Glavish have sent a call to their respective iwi organisations to explore the potential of the central North Island process for advancing their own collective plans.

At the other end of the country, Te Wai Pounamu, Ngāi Tahu has also been watching on, in terms of how this settlement will impact on its potential relativity top-up as it relates to the billion-dollar cap. In June my co-leader Dr Pita Sharples asked the Minister of Finance about the implications of this bill for the ratchet clause relativity mechanism. His response was that the point at which such a mechanism would apply could be expected to occur probably within the next 2 to 3 years, in terms of reaching the point expressed in 1994 dollar terms. But as Ōtākou rūnanga chairman Tahu Pōtiki pointed out, “there is definitely some subjectivity with the whole thing.” There are so many eyes on the central North Island, watching the progression of this settlement and contemplating what it will mean. There is every opportunity for the economic development of the iwi involved in the settlement to prosper, and every opportunity to increase the original investment and to generate greater value and higher returns.

And so we come to the culmination of over two decades of energetic and inspired negotiation to bring this claim to a conclusion—or at least tomorrow it will be concluded. This bill represents a great deal of work since the passage of the Crown Forest Assets Act in 1989. The central North Island forest estate is an area not just of economic value but of huge cultural significance as well. The generosity of iwi in agreeing to preserve and enhance existing public access is an incredible statement from the iwi to the nation. We in this House must always remember that gift. The Māori Party will support this bill at its second reading.

Hon TAU HENARE (National) : I start by congratulating, first, the claimants themselves, then the Government, and then our little Māori Affairs Committee on a job reasonably well done. I will take a couple of minutes to talk specifically about what I think comes out of the Central North Island Forests Land Collective Settlement Bill. I will not talk specifically about what is in it, because I think although much is made of the allocation model, the tikanga-based resolution process, and although it sounds really good in a fantasy world, there are still people outside of that, even though we have a tikanga-based resolution process, who think the deal is not up to scratch. I suppose it tells us that no matter what system we have, there will always be somebody outside the process who might think the deal is not right.

One of the more interesting facts I found out about this bill during the select process was the result of a question I asked one of the submitters. It was about mana whenua, it was about property rights—it went down that avenue. I asked that person, who will remain anonymous, about the land shares that that person and that person’s family had had for years and years. The answer to the question was that they had gone back even further, to communal ownership. I thought, OK, I can cop that. I accept that that is a line of thinking that goes pretty well with the settlement. But I got to thinking about who compensates the person who had the individual shares. At the establishment of the Native Land Court, communally owned land was individualised, but now that we are going back to a point in time before the individualisation of land, who compensates those people who have just been left out, vis-à-vis the individual shareholders in the land? So whatever we do, out of this we will create, I think, another set of grievances, more than with any other settlement I have seen.

I am not saying this is a bad settlement and a bad bill. I am saying that out of this, we have created, most probably, if people are clued up—and I am sure they are—a situation where in 5 or 10 years’ time, they will trot back in and say they have been hard-done-by and can we please sort it out, because we were the ones who made the grievance and gave them the ammunition to have a go at us. National will support this bill going through, and I just wanted to raise that issue, because I do think it is a huge issue.

I will read out a little paragraph on the select committee’s report on the bill: “Ten submitters implicitly or explicitly disputed the mandate of Te Rūnanga o Ngāti Manawa to agree to the inclusion of their claims in the settlement bill. The key concern underpinning all these submissions was that Ngāti Manawa should have done better out of the settlement, given their strong mana whenua interests in the Kaingaroa. Some of the submitters also asserted that Ngāti Moewhare … had been excluded from the settlement negotiations, or that Ngāti Manawa representatives had not had a significant role in” the central North Island negotiations.

I want to bring something up at this stage, and you can rule me out of order if you want to, Madam Assistant Speaker. This process raises the issue, when we are dealing with Treaty negotiations and Treaty settlements in the House, that it does not matter how many submitters the select committee gets, and it does not matter how many are opposed and in favour of the settlement, the select committee has no jurisdiction to change the settlement. In fact, the House itself does not have any jurisdiction whatsoever to change the settlement. So with all due respect to the mana of the House, this process is a bit of a farce. It is a bit of a farce in terms of when we expect the community to come to us and say: “Excuse me, these are my feelings on this legislation.” But we cannot change it, so what is the point? Is the point itself just giving the community the opportunity to say hello and air its grievances, and to then go away and nothing happens? I think that is a Clayton’s way of dealing with issues.

It might make them feel nice that they fronted up to the select committee and had their say, but nothing comes of it. I was not astounded but gobsmacked that there was a Speaker’s ruling on this matter that pertained even to an amendment to Treaty legislation. I can certainly understand why. I am not quibbling and arguing against it; I am just pointing out the fact that when we are dealing with these issues, it seems a bit on the nose that we call for submissions, that we spend money going up the line and hiring out a hall at the hotel, and that we call hundreds of people together so that parliamentarians can listen to their submissions, only to find out that we cannot do anything about it.

I just wanted to raise that issue. Maybe in the future a select committee, or even the House, can look at this issue in a bipartisan manner. How do we deal with the issue of submitters coming to the House and asking us to change something because of the way they feel about it? Instead of saying no, maybe in the future there will be some way of saying that we will look at it and see whether we can change it. That is one of the main points I want to make in respect of the Central North Island Forests Land Collective Settlement Bill.

The last point is that I think the people who have worked on this bill have come up with a way of dealing with issues that is particular and peculiar to them. So I commend those who have been involved; there are too many to name. I think this is a watershed time in terms of Treaty settlements, and, hopefully, some other people can look at how the process has been achieved and at the road we have gone down, so they can follow the lead of those involved in the bill. But we will not hold up the show too much longer. Thank you, Madam Assistant Speaker.

• Bill read a second time.

Hon LIANNE DALZIEL (Minister of Commerce) : I move, That the Financial Advisers Bill be now read a second time. I would like to begin by thanking the Finance and Expenditure Committee, in particular Charles Chauvel, the chairperson of that committee, and Simon Power, the lead member for the National Party. I also thank all of the officials for the work they have done. We now have a bill in this House that will accomplish its objective of encouraging the sound and efficient delivery of financial advice, which should boost confidence in the use of such advice.

A number of comments have been made in the last few weeks—and, indeed, seconds—suggesting that the Government should slow the passage of this bill, primarily because of the extent of the changes the committee has made. However, I have personally made the effort to speak to, or meet with, as many of those people as I possibly could, and I am confident that we now have a way forward with this bill. I thank the industry for sharing its expertise with me in order to help us get this right. As I said to the industry, I did not want to lose the 6 months that a delay beyond the election would entail, because those 6 months can be put to very good use.

That being said, I have taken on board the concerns expressed by those who fear that we may not have picked up everything. Given that a lot of the detail of the new structure will be included in regulations, I have decided to establish a working group that will encompass representatives of the industry, the Ministry of Economic Development, and the Securities Commission to provide a feedback loop as we go forward.

The committee has recommended changes to the bill that, first, focus on financial products, in contrast to financial decisions, as was originally proposed in the bill; second, adopt a tiered approach to the authorisation of financial advisers that will provide two tiers of advisers, category 1 and category 2, based on the complexity of the products they advise on, and enable the adoption of a qualifying financial entity model, which will ensure there is appropriate regulatory coverage of advisers within these institutions while minimising the compliance costs that would otherwise be associated without that model in place; and, third, ensure that the bill provides clear and appropriate exemptions from the definition of a financial adviser.

The most fundamental of these changes is the adoption of what the committee has termed a tiered approach to regulation. The risk-based approach will see more complex advice, such as advice on derivatives, portfolio investment entity products, and other complex securities or financial planning services, subject to greater regulatory control than advice on simple products. These category 1 advisers will need to be individually authorised by the Securities Commission to provide financial advice. They will be known in the future as authorised financial advisers.

This does not mean that advisers who advise on simple products will be totally unregulated. Rather, the bill provides that advisers, namely those who are providing advice on products such as consumer credit contracts and insurance products, must comply with basic conduct and disclosure requirements. They will also be required to be registered and be members of a dispute resolution scheme, and that is dealt with in another bill that we will be dealing with before the House rises.

The third category of adviser will be employees or agents of a qualifying financial entity, and I envisage that they will be banks and insurance companies, credit unions, potentially, and other organisations such as building societies—that sort of thing. The qualifying financial entity status will be granted to those institutions that have appropriate processes in place to ensure that any employees or agents covered by that status operate appropriately. These entities will be able to meet all of the registration and disclosure obligations on behalf of their employees and agents, and, indeed, the membership of the dispute resolution body, as well. However, employees who are category 1 advisers or agents working for those institutions, or working to them, will still need to be individually authorised. That means they will have to be authorised financial advisers individually authorised by the Securities Commission. This will ensure that there is a level playing field between advisers who work for such organisations or to such organisations as agents and those who operate independently.

The most fundamental change proposed by the committee was one signalled early on in the process, and that is the proposal to shift away from the approved professional bodies co-regulatory model, which I announced nearly 2 years ago. The committee has recommended that the Securities Commission undertake all regulatory oversight of financial advisers. I agree with that, and, as I have said on more than one occasion now, the co-regulatory model could not have survived the level of mistrust and anger that exists amongst an investing public who feel they have been betrayed. I wish that was not the case, but it is the case, and that is why we cannot go forward with anything that signals any form of self-regulation in this environment. In my view, such a proposal at this time would not be sustainable. My regret is that I was not alert to this issue before the Financial Advisers Bill was introduced.

Some industry organisations raised concerns about their ability to undertaken the disciplinary functions that were contemplated for approved professional bodies in the bill as it was introduced. If it had ensued that industry organisations did not have the capacity to undertake the necessary disciplinary functions, the Securities Commission would have been required to act in the place of approved professional bodies anyway. This would have required the commission to adopt an approach that catered to the diversity of standards that may have emerged across the industry. This in itself would likely lead to increased transaction costs for both the industry and the regulator. The approach we have adopted in the end aligns with the approach taken in respect of other occupational regulatory regimes in New Zealand, including the regulatory framework for accountants, lawyers, real estate agents, electrical workers, and architects, which means it is better placed for trans-Tasman mutual recognition, as well. Although some commentators have claimed that this would result in the loss of industry expertise and the development of rules, I believe that the committee has come up with a sensible and workable solution to alleviate this concern, as well. The committee has recommended that a commissioner of financial advisers be appointed to the Securities Commission, with the front-line focus of the commissioner’s work being on financial advisers.

A code committee and a disciplinary committee will be established under this bill, as well. Both committees will obviously need to include advisers with industry experience. This will allow industry representatives to be involved in the promulgation of the professional code of conduct to govern authorised financial advisers and the discipline of the profession. I think the select committee has done a good job of ensuring that we get the best of both worlds. Further, the code committee will obviously be obliged to consult with advisers more broadly, and with other stakeholders, when developing the code.

In conclusion, I reiterate my gratitude to the industry, especially to those who came to talk to me about their concerns; and to the Finance and Expenditure Committee. Again, I single out Charles Chauvel as an excellent chair of that committee, and Simon Power. They were both excellent to work with. The other thing I place on record is that I have really appreciated the fact that where there were concerns, people came and talked to me about them and we were able to address them in a sensible way. I also congratulate the officials, who worked long hours, well beyond the call of duty, and the parliamentary counsel officer assigned to work on the bill. This bill represents an extraordinary effort and a very good outcome. I commend the bill to the House.

SIMON POWER (National—Rangitikei) : Thank you, Mr Assistant Speaker—

Hon Darren Hughes: Oh, Sarah Palin!

SIMON POWER: What does that member’s billboard look like! I take this opportunity to thank the Minister for her opening remarks. It seems that the Hon Lianne Dalziel and I ended up with two of the most complicated and difficult pieces of legislation to work on—this bill, and what is now the Commerce Amendment Act—over the course of the last 12 months. As I said also in the debates relating to that Act, the Minister has always been forthcoming, has made advice available, and has been pretty open-minded, on the whole, when I have made suggestions during the course of the development of this legislation, and I am grateful for that.

One or two things do need to be said in respect of the opening stages of this bill. First of all, the Minister has been generous in her praise of the officials, and I certainly share that view when it comes to the enormous amount of work those people on the committee did in the initial phases. But in fairness, and in no way reflecting on the Minister, who I think did her best in the initial stages, I say that the first draft of the legislation that was put before myself and others—and, to be fair, probably before the House—was poor. It was not up to scratch.

Hon Lianne Dalziel: Fundamentally flawed.

SIMON POWER: The Minister is prepared to say that it was fundamentally flawed, and good on her for saying that! Quite frankly, the legislation showed so many different drafting styles within the one bill that to the outside eye it was obvious that personnel and staff had changed during the course of the development of that first draft. It was hopeless legislation. It would have meant that the way financial advice was defined, and the way that financial advice was captured, was so random—for want of a modern term, for the sake of the Hon Darren Hughes—that big holes would have emerged instantly in different areas of financial advice. I think—and this is a personal view—that the first draft of the legislation that we looked at did not bear that good a resemblance to the original recommendations under the review of financial products and providers done by the ministry. To be fair to the Minister, when those issues were raised with her she took them on board and asked those officials for some changes.

It became clear early on that trying to define advice by occupation was simply not going to work. That meant, for example—and I know the Minister tires of me using these examples, but it is my 10 minutes—that if a bank teller standing behind a counter told a customer who had $10,000 in a savings account that the money should be put on term deposit, the bank teller would have been caught for giving financial advice. If a real estate agent put an advertisement in the paper to say that a rental property was currently returning a 5.7 percent yield on investment in rent, and that that was what it would continue to return, should the property be purchased at the current price, in my opinion that would also be financial advice. If a travel agent told a customer what insurance product the customer should purchase for his or her trip, that would be financial advice. We may not think about it in those terms, and, frankly, for nine out of 10 people purchasing travel insurance it probably would not have made the slightest bit of difference. But for the one out of 10 instances where someone in the family ends up ill—and I myself have been in this position—what is given in the advice and what is contained in the insurance policy does matter. But, again, that is financial advice, because it will have an immediate financial implication on what a traveller can or cannot do, based on the wording of the policy.

So then the Minister decided that we would try to look at it from a product perspective, which I thought was a more sensible approach. It became clear, though, that even within that approach, trying to create a layered level of differentiation and differing regulatory environments, depending on the level of advice or product—whether it was simple or complex—provided its own difficulties. In that case, it would have been difficult to provide an overall framework that then allowed those more distinguished categories to fall underneath it. This was where the beauty of the select committee process was so helpful. On the first day of the select committee hearing, the chairperson of the committee, Charles Chauvel, decided that he would allow everybody 10 minutes speaking time—he had negotiated with me; there was nothing wrong with that. But it became clear, after we had heard a 35-minute submission from the first submitter, I think, from memory—it was certainly well over 20 minutes—that we would have to use the submission process to try to rewrite the bill. So at that point, as submitters were coming forward, I and others on the committee—the Hon Paul Swain was there; I remember that clearly because he had his disc with his CV on it, on the table—started negotiating in a way that put ideas on the table, at the time, for submitters to comment on. That was a bit unfair to the submitters, because they had not come prepared for that type of approach. But I think, in the time I have been here, it was one of the most constructive discussions we were able to have. Then we decided that an interim report was appropriate, in the first instance, and then, extraordinarily—in my time here I cannot remember this happening before—a second interim report would be made to the House, consequently driving further consultation with the industry, which was absolutely essential because of the massive changes being made.

I remember sitting in the committee one day and the poor chap from the Parliamentary Counsel Office was sitting opposite. We said at that time: “OK, if we were to make these changes, how much of the existing legislation would remain in place and how much would you have to redraft?”. He said we could keep the first three clauses. At that point we knew we had a big job on our hands—a big job on our hands. But to be fair to parliamentary counsel and to the officials on that committee, who were just stunning in the way they approached it, we managed to get the job done.

I do not think that the job is finished. I still think there will be a much more subtle refining of the categorisation of financial product, as time goes on, and I think that the flexibility around the regulatory regime at that level is important. That will develop and mature as time passes. I hate to say it but I do not think we have seen the last of a discussion about financial advisers legislation. I still think we will have to refine it as we go along. Having said that, I say that National certainly supports this bill in its second reading and believes it is an extremely good step in the right direction.

When we come to the detail of the bill in the Committee of the whole House—the financial accreditation—the Securities Commission as the sole regulator is a model that is absolutely correct. The Securities Commission should be the sole regulator. I believe that that is absolutely the right move, but I will talk about it in more detail during the Committee stage.

Before we move to the Committee of the whole House—and I know there will be other members in the House who will want to make a contribution—I say that I was very interested to hear the Minister of Commerce talk about a working-group being set up for further discussion. I think that is a good move. I believe she said that industry representatives, representatives from the Securities Commission, and officials from the Ministry of Economic Development would be involved. When we get to the Committee stage, I will be interested to know whether we will have any investor representation on that working-group—in other words, whether we will hear what the users of those people who are providing the product would be looking for. I would be interested in any comment the Minister might want to make in that regard.

We are dealing with an industry that we can talk about having losses or funds at risk in the billions. This is an extremely serious matter. It is a matter that the National Party will not delay during this urgency motion, because we are keen to give a signal very early on, as John Key did when he wrote to the Prime Minister many, many months ago to say we would work with the Government in a bipartisan way on this issue. I was then dispatched to deal with the Minister of Commerce, and this matter has been dealt with in a bipartisan way. Sometimes in politics, issues are too big for political discourse, and this is one of those issues. We have an obligation as a Parliament to ensure the security of our financial markets. This is a step in the right direction. We will deal with the detail in the Committee stage. National will support this legislation.

R DOUG WOOLERTON (NZ First) : I will take just a short call to say New Zealand First supports the passage of the Financial Advisers Bill. As the Minister of Commerce and Mr Power have said, this bill is long overdue. A few financial advisers and people who came before us in the Finance and Expenditure Committee thought there should be no more regulation around their activities. They believed that their business was a fast-moving one, and that the people they were talking to could judge in their own best interests whether the advice they were given was good or bad. Obviously, we disagreed with that, and so did the majority of the people involved in the industry. It was heartening to see that, with a few exceptions, people had a responsible attitude to the proposed legislation, and were keen to help.

We have also heard from the two speakers earlier that a lot of changes have been made to the bill. In fact, when we look at the bill, we see there are many pages of ruled-out text, with new text following that. That is the way it should be. It is not until we come face to face with the participants in the industry, not just the ones chosen to help officials through the process of preparing the legislation—although that is a good process, as well—but the ones who are actively involved, day to day, with their customers, and until we hear about their problems, the distinctions they have to make, and the care with which they have to approach these issues that we can actually get a full handle on the situation. I also agree that refinements will be made to the legislation in years to come. It was admitted during the hearing of submissions that every time new regulation comes into force, somebody out there will find a way around it that is not in the clients’ interests, and that will need to be blocked off in the future.

There were days, years ago, when the Government of the day believed that there was no need for any of this regulation, and that both those who were seeking help with investments and those who were giving advice on investments could go about their business without any need for the Government to be involved in those transactions in any way whatsoever. We have come to rue the day when those thought processes were the rule rather than the exception, and we are now seeing something rather nasty start to happen in this country, of a similar nature to what has occurred elsewhere. In America we are seeing the Government has had to hop in and prop up institutions where the people involved were not, in fact, qualified to know what was going on and did not know what was going on, but proceeded without any caution nevertheless.

Just as with any other industry, the public have a right to know whom they are talking to when they seek financial advice. They have a right to know the qualifications of that person, the experience of that person, and whether that person has been involved in any shonky dealings hitherto.

Hon Darren Hughes: Like John Key.

R DOUG WOOLERTON: I could not possibly comment. This legislation provides some of those assurances. I have to say, just before I sit down on this part, that it will not take away the risk to the public. It cannot do that, and it is not professing to do that. But it will give the public an indication of whom they are dealing with, and, in another bill, an avenue to redress the situation as well, because this is part of a suite of bills.

I say New Zealand First supports the Financial Advisers Bill, and we will be supporting the other bills that surround this issue.

Dr PITA SHARPLES (Co-Leader—Māori Party) : Tēnā koe, Mr Assistant Speaker, tēnā tātou katoa. The Māori Party is pleased to support the Financial Advisers Bill, to enable a clear distinction to be made between financial advice that carries significant risk for consumers and advice that carries minimal risks. The intention of the bill is honourable, but the bill is well overdue.

An analysis of 25 financial advisory firms by Stephenson Thorner and fi360 Australasia, released earlier this year, concluded that many financial advisers may look trustworthy but are potentially risky. The risk factor is all around the concept of trust. The study showed that most New Zealand advisers ran their businesses with an inadequate duty of care. In fact, the study went as far as to say their reports verged on becoming dysfunctional. Just how dysfunctional some of the sharks in the industry have been is old news now, given the fact that more than a dozen New Zealand finance firms have gone under in the past 18 months. That is nearly $2 billion of investors’ money gone down the tubes. It is not in dispute that something had to be done. There have been frequent and increasingly urgent calls for tighter Government controls, to tidy up the sector and make it more accountable to investors.

It is not as though we have not been down this road before. Many of us remember the mortgage scandals of the mid-1980s, when an unregulated sector of the finance industry extracted millions of dollars from what could only be called unsophisticated investors. That is a flash name for what the industry calls mum and dad investors: a segment of the population, including Māori, who have been investing their savings without necessarily realising the risk—

R Doug Woolerton: Most of the population.

Dr PITA SHARPLES: —yes—that they were exposing themselves to. In the 1980s the contributory mortgage companies screwed millions of dollars from New Zealanders lured by the promise of a quick buck and high interest rates. The classic was Registered Securities Ltd (RSL), which, when it collapsed in July 1988, had ratcheted up loans to the sum of $97.8 million. Overnight, more than half of that was deemed to be irrecoverable.

But there is a startling difference between the contributory mortgage companies and the risk of the non-regulated financial companies and financial advisers. Back in mid-1988, when RSL hit the bottom of the market, the then Minister of Justice, Sir Geoffrey Palmer, immediately took decisive action by amending the Securities Act. His amendments covered contributory mortgages and introduced sector-specific regulations, yet here we are, 20 years later, finally getting around to introducing regulations to increase prudential standards—a move we support, but action that should have taken place a lot earlier than it has.

The point is, we are not talking about people getting sucked into the Nigerian multimillion-dollar banking scams. Members know the type: “A tragedy has befallen us. Your long-lost Uncle Nigel has drowned, leaving you as the sole benefactor of his estate. All we need is your bank account.” Everyday New Zealanders—the mythical middle New Zealanders—are being stung here. We are not talking about businesses or corporates; everyday citizens have been placed at risk. We are talking about the people whom successive Governments have ignored: humble, trusting investors, many of whom have entrusted their life savings to finance companies. Their lives have been turned inside out by the callous squandering of their funds. Worse, not only do they have to endure the shame and guilt of having their funds squandered but also they are literally powerless and unable to afford the cost of legal advice.

The Māori Party has always stood up for people who too often are voiceless in the corridors of power, and our support for this bill is no exception to that. Sure, the bill is a good thing. The regulatory framework should promote confidence and participation in the financial markets by investors and institutions. That is all positive. But what about those who have been burned by financial advisers and who are teetering on the brink of collapse? What measures have been put in place to look after their interests? Will the Securities Commission launch an inquiry into how those large-scale losses were able to occur? What support will be available for clients who have lost money to enable them to launch court proceedings against financial advisers who have been negligent?

The issue all comes down to the basic truths around justice and the nature of power. One of the tikanga of the Māori Party around kaitiakitanga encourages us to promote the active exercise of responsibility in a manner that is beneficial to resources and the welfare of the people. In everyday language, that means we promote the goals of living in a society where crooks and shonky advisers are not welcome. In other words, there should be sanctions in place to ensure that those types of people—people who are negligent in their responsibility to care for the resources and collective good of their community—are not able to prosper.

One could say, as the National Business Review has said recently, that there have been sanctions against murderers and robbers for centuries, but society still has not been able to eradicate such crimes. But for my money, I want to live in a society where careful analysis and prudent assessment of risk are routinely part of the package for any financial deal, where credibility and experience matter, and where an individual can make an informed judgment about the qualifications and professional standing of a financial adviser before leaping in. In reality, Māori businesses do not usually use finance companies to finance their business developments. The interest rates are too high, and often security is required over land, so it is a no-go area. Banks are more likely to secure loans over cash flow, stock, equipment, and machinery, without having to rely on putting our whenua at risk.

The Māori Party will support this bill. We think it provides changes that are necessary to allow deposit takers to be better monitored and evaluated, and at the end of the day that has to be better for the nation and for all our people in moving forward. But, notwithstanding all the regulations, approvals, enforcement, and remedies included in the scope of the legislation, the key to success will rest in the conduct obligations outlined in the bill. The bill specifically obliges financial advisers to act with integrity and competence. Integrity cannot be regulated for, but it nevertheless must be a foundation in order for the changes to actually work. We need to have protection for consumers, and we need to have the changes provided in this bill in order to ensure an effective environment operates.

Finally, although we support this bill at these final readings, we wonder why it was separated out from a bill that is on the Order Paper to come up later, the Financial Service Providers (Registration and Dispute Resolution) Bill. Surely logic would demand that the two bills be read together to ensure due focus on the health of the sector. Thank you.

CHRIS TREMAIN (National—Napier) : Thank you for the opportunity to speak on the second reading of the Financial Advisers Bill. I pick up where my lead speaker, Simon Power, left off. He said that we are dealing with an industry where the losses are in the millions of dollars. I add to that by saying that the focus is not just on the industry, where the losses are in the millions, but, more rightly so, I think, on the consumers who have invested in those businesses and who have lost multiple millions of dollars in the process. That is really where the focus of this legislation should be. At the end of the day this House stands to protect the rights of individuals in the community, and to understand that there will always be risk in any investment across the range, but that, ultimately, we should be there to try to protect consumers as much as possible in their decisions around investments.

I want to pick up on the losses, just to make it clear to people who may be listening to this debate on this Wednesday morning what we are actually dealing with.

R Doug Woolerton: Not that many!

CHRIS TREMAIN: Not that many! We are talking about $1.925 billion of losses, which is significant. That was highlighted in the May Financial Stability Report. That is huge money. We are talking about $300 million out of Provincial Finance, $459 million out of Bridgecorp, $149 million out of Nathans Finance, $187 million out of Capital + Merchant, $127 million out of Lombard Group, $141 million out of Geneva Finance, and $319 million out of MFS Boston. This is huge money—$1.925 billion. These companies have gone into receivership or into moratorium over that period. There have been a few more since that financial stability report came out. By no means have all these companies fallen over because of shonky dealings—not by any stretch. It was due mainly to the credit crunch and not due to fraudulent activity. It is important that people understand that.

Hon Lianne Dalziel: How do you know that? There are still investigations going on.

CHRIS TREMAIN: I am saying that by no means did all of those companies fall over because of fraudulent activities. I think the Minister would have to acknowledge that. Certainly some of them did. The credit crunch has caused a run on funds. Many of those companies, under the market as it was before, had quite sound—

Hon Lianne Dalziel: The failure of Bridgecorp caused the run in New Zealand.

CHRIS TREMAIN: —just listen—balance sheets. Some of them have fallen over because of the credit crunch, not because of fraudulent activities. A number of high-profile companies outside the finance sector have also recently gone into liquidation, and I will talk about Blue Chip properties, which have gone under in very dubious circumstances, and are still under investigation.

Hon Lianne Dalziel: What’s that got to do with the Financial Advisers Bill?

CHRIS TREMAIN: A heck of a lot. The member will understand that many financial advisers actually recommended their clients to go into that company, and that is whom we are trying to regulate.

Hon Lianne Dalziel: Not any I know.

CHRIS TREMAIN: No financial advisers that the member knows? A heap of them out there recommended Blue Chip properties. I ask the Minister what world she is living in.

Hon Lianne Dalziel: No, they were specific Blue Chip advisers.

CHRIS TREMAIN: No, there were not. Third party advisers were recommending Blue Chip. That is for sure.

Hon Lianne Dalziel: Name one.

CHRIS TREMAIN: I could do that, but I think I would be breaching parliamentary privilege. I will not go there. I will not enter into that argument. Most of the investors were referred by way of a strong commission incentive and were referred by financial advisers around the country.

A number of constituents have come to see me in my office about this particular issue. One woman, whose husband died in the middle of the process, had been encouraged to gear up her house to buy not one but two apartments. Recent valuations on two properties she owns show that if she sold on today’s market she would stand to lose the majority, if not all, of the equity in the property that she owns. She is faced with the liquidation of Blue Chip and no rent guarantee. She cannot afford the monthly commitments to mortgage costs and has therefore been forced to sell her apartments at a significant loss.

Financial advice like that puts some people into very difficult situations. With all this contagion around the global financial market place, the Government has seen fit to introduce a suite of legislation not to remove the risk from financial investments, as there will always be risk, but to raise the bar on those who enter the financial markets either to provide investment products or to proffer advice and to benefit from that advice by way of a fee or a commission. The Reserve Bank of New Zealand Amendment Bill (No 3) was the first in this suite of legislation. That bill addressed prudential requirements of the non-bank deposit takers, and it was passed during the previous sitting period. National supported that legislation.

The Financial Advisers Bill, together with the Financial Service Providers (Registration and Dispute Resolution) Bill, aims to address the regulation of financial advisers, and to lift the benchmark and rigour around those who can be financial advisers, their qualifications, and the means by which consumers can seek to resolve disputes with financial advisers and those who provide financial products. The Financial Advisers Bill is being debated in its second reading today, and quite clearly National supports it.

The purpose of the bill, which we will cover in the Committee stage, is quite detailed in Part 1. The first purpose is to require disclosure by financial advisers, and the second purpose is to require increased competency in the financial advisers who are proffering a range of products. Some advisers out there—and the Minister begs to differ with me on this—were proffering advice not only on financial products but also on some real estate investments in Blue Chip. The third purpose of the bill is to ensure that financial advisers are held accountable for the financial advice they give.

The first round of submissions on the bill received much debate and we have covered that in the debate today in the House. The draft legislation hit the Finance and Expenditure Committee, which my colleague Craig Foss and I are on, and was ultimately thrown out. In fact, as the Minister agreed, it was totally amended.

There are four key areas of change that I would like to address today in my remaining time. Firstly, the bill now amends the coverage of the bill—whom it applies to and what is covered. Secondly, the new legislation amends the Securities Commission, which will now have the sole responsibility to undertake the regulatory oversight of financial advisers. As such it is proposed that the commission will be responsible for approving, monitoring, and having oversight of all financial advisers. The third area of change is to amend the bill in relation to statutory offences, obligations, and a penalty framework. I propose to spend the rest of my speech focusing on the coverage of the bill where there have been five significant changes to the bill as first mooted.

Firstly, the focus now shifts to financial products whereas the original focus of the bill was on financial decisions. We now have a definition, which we will cover in the Committee stage, for two categories of financial product: category 1 and category 2. There are effectively seven products that have been divided into two tiers of financial product. The seven products are complex securities, investment broking, savings or investment planning, simple securities, insurance, credit, and real estate. These are very important distinctions now, because the complexity and level of risk that accompany these products are significantly different between each product. Some products at the higher end certainly involve a lot more risk, and we believe more regulation needs to be provided for the level of advice given in the higher categories. We heard in the select committee process from many different submitters, from the high end to the low end, but it was in respect of those who provide financial advice at the lower end—the salesperson at the Noel Leeming store who is providing pretty basic advice under the Credit Contracts Act—that the level of financial regulation that we were initially looking to impose was really out of control.

The second area of change is the adoption of a tiered approach to the authorisation of financial advisers, which I have spoken on briefly. Effectively, the products I have just described are broken into two tiers and there will be two levels of regulation that deal with those two tiers.

Thirdly, we are going to ensure that those providing financial advice on securities or investments, savings, and planning now become authorised financial agents. Members will see references to “authorised financial advisers throughout the legislation. An authorised financial adviser will be required to have certification to deal with tier 1 advice on tier 1 products.

Fourthly, in terms of changes to the bill, we will be adopting certified financial institutions. Large institutions dealing with significant franchise networks will be able to apply to be a certified financial institution and effectively take responsibility for their advisers and make sure that they are imparting not only the knowledge but the responsibility and accountability for their advisers going forward.

Lastly, the amendments that relate to the scope of the bill will ensure that the bill provides clear and appropriate exemptions from the definition of financial adviser. I will use my time in the Committee stage to focus particularly on the exemption of budget advisers, who originally were in the legislation but have now been taken out of it. Thank you, Mr Deputy Speaker.

CRAIG FOSS (National—Tukituki) : I rise to continue the National speeches in support of the second reading of the Financial Advisers Bill. Colleagues have talked about the suite of bills—and I am sure that the Minister of Commerce covered it; I missed her speech—that hold hands with this particular bill: the Reserve Bank of New Zealand Amendment Bill (No 3) and the Financial Services Providers (Registration and Dispute Resolution) Bill. It is all good stuff and quite timely—even more timely now, I guess, given the condition of, and events in, the financial markets since this bill was referred to the Finance and Expenditure Committee on 19 February 2008.

There is one thing. My colleague Mr Tremain gave the example of someone caught up in the current crisis, and I heard someone from the Government side of the House—I do not know whose voice it was—say that real estate agents are exempt from this bill. Yes, real estate agents are exempt from this bill, but that comment showed the incredible naivety and the lack of financial literacy of whoever it was who shouted it out. The commentary on the bill talks about “category 1 products (complex products such as a security other than …”. The bill excludes property quite explicitly—that is right. But if members look at the cause of the current subprime mortgage crisis around the world, they have to ask what a subprime mortgage is. It is not the initial transaction of purchasing a property for sale; it is the ongoing leverage or de-leverage of the financing of property. That is what a subprime mortgage in the United States is. Investors around the world, including some in New Zealand, have been caught out by lending on property with a somewhat dubious valuation and, perhaps, associated transactions and fees. So, yes, those investments in property are affected by the intent of this bill; they will be caught up by it.

At the end of the day, it is all about asset classes, be it hard assets such as property, the derivatives of property, or financial instruments down the chain. They will all be picked up. Property is explicitly excluded here in the first instance, but if we go down one or two generations of any transaction, of any of the current crises, we see that the core asset devaluation, the core deflation of those balance sheets, is about property. Yes, those investors might not be the initial owners of the property, but if we look down the titles, we see that they are guarantors and there is cross-party lending on the titles. Yes, this bill and the other two bills pick up some of those issues, but let us try to talk sensibly about the financial markets.

I have here the first version of the bill, which was referred to the select committee. I notice only one Government member of the committee here, and I am looking forward to her speech on this bill. The bill that was referred to us on 19 February 2008 and the bill that we have before us are a credit to the process, but, goodness gracious me, the first 70 pages of the original version are struck out—the first five parts are totally gutted, struck out, rewritten. That is a good reflection of the process, which Simon Power alluded to—well done. Yes, we acknowledge the Minister and her ambitions to have good, robust, and long-lasting legislation—we fully appreciate that—but we went through a fair few hoops on the way to get there. Who is to blame? I do not know. Perhaps those who were involved in the first draft needed a bit more input from the real world. What we see before us now is a better reflection of the real world, because it is a reflection of the risk of investments and advice, and that is entirely what financial markets are about. They are about the pricing, applications, and return—reward—of risk, rather than individual occupations, individual products, etc. As Mr Power said earlier, there is still some work to do, but this bill is a good start. I am pleased to have been able, with my colleagues on the select committee, to contribute to the bill before us now.

My colleague Mr Power also made the point about travel agents. I remember during the submissions process asking about travel agents, and we seemed to park that issue, saying that it was just travel agents and insurance. But we made the point that many people ask their travel agent when they should buy some foreign exchange. They say they are going to the United States, and they ask whether they should buy US dollars now or in 6 months’ time when they go there—and we have all seen the volatility of the foreign exchange markets. The travel agent’s response qualified as financial advice; the travel agent is doing his or her best, and maybe is just reading something off a computer screen, but, under the original bill, that information would have constituted financial advice. There are myriad different examples like that, from the hire purchase example in the commentary to the car salesman who offers advice on which loan to take, or even which deposit to make—a 3-month, a 6-month, or a 12-month one—if the rates for each one are the same, because, as those with some financial literacy will know, they are not actually all the same.

My colleagues have spoken about the current conditions in financial markets around the world, which are under major stress. I think about $5 billion is either frozen or very, very stressed within New Zealand. But I acknowledge that New Zealand has many robust institutions—banking and non-banking—that are performing very well, and their depositors’ funds are very, very safe indeed. I acknowledge those institutions, and I appreciate the tough times they are having as they search for funding and capital.

I would like to make the point that the original bill was referred to the select committee on 19 February 2008, and the closing date for submissions was 4 April 2008. As submission after submission came in, goodness gracious me, it was pretty obvious by that stage that the bill would need amending. So there was the first interim report, and the closing date for submissions on it was 16 May 2008. Then the second interim report came out, and that is pretty much what we have before us today, and the closing date for submissions was 22 August 2008. I sat in on many of those submissions and there were common themes. As I said before, I acknowledge the path that this bill has taken to get to the more realistic and real-world form that it is in now, but again I question why it needed to take such a tortuous and long path in the first place. It was almost an example of real-time submissions and bill-making, as Mr Power alluded to earlier. Engaging with the submitters was a very healthy process. They knew their stuff, and, for a lot of it, they knew it better than many of the members sitting round the committee table did.

It is interesting to have this example, because, at least, better legislation come out of the select committee process. Imagine if that process had been extended to the Electoral Finance Act, which was raced through under urgency prior to Christmas last year. That legislation is creating all sorts of problems. Imagine if the same process had been extended to the emissions trading scheme bill. A thousand amendments to that bill were not submitted on, and another 785 amendments were made to the bill that arrived back in the House. A total of 1,785 amendments that had not been submitted on were raced through the House under urgency. Even KiwiSaver was in the same bucket. Good legislation does take good select committee time, but most members would acknowledge that they are on a select committee to, at least, make legislation as good, robust, and long-lasting as possible.

During the Committee stage I will be picking up a few points. My colleague Chris Tremain picked up that about $5 billion is under stress at the moment within New Zealand. Some of that is because of allegedly fraudulent and dodgy activities, but much of it is from the market going against the investors—whatever they were. We have to distinguish between the two, because the Serious Fraud Office, the Securities Commission, and the police are investigating many of those instances right now.

I again make the point in this House that in the current environment—and I am sure the Minister said the same thing—with the stress in the financial sector, now is a terrible time to be getting rid of the Serious Fraud Office. This bill is forward-looking—it is not retrospective—but at least we have the Serious Fraud Office to look at alleged misdemeanours that this bill cannot address, yet the current administration is trying to wipe that office off the face of the earth. What an absolutely absurd time to do that, with the stresses and the strains that the financial markets are under!

I look forward to the Committee stage. I look forward to robust speeches from the other side; as we are sitting under urgency, they must urgently want to speak. I will speak again in the Committee stage.

• Bill read a second time.

Hon LIANNE DALZIEL (Minister of Commerce) on behalf of the Minister for the Environment: I move, That the Aquaculture Legislation Amendment Bill be now read a second time. Since the aquaculture reforms were enacted in December 2004, a number of issues have arisen with the legislation. This bill contains amendments to deal with those issues that have arisen from a May 2006 decision of the Environment Court in the case of SMW Consortium Ltd v Tasman District Council. The effect of this decision is that applications can be made for aquaculture outside of aquaculture management areas, even though they cannot be granted. This could have the effect of blocking the allocation of space to iwi under the terms of the aquaculture settlement in the Maori Commercial Aquaculture Claims Settlement Act 2004. It could also create problems in processing other applications and in developing aquaculture management areas. We cannot allow a loophole to block aquaculture settlement obligations being met.

The bill cancels any applications that were made after 9 May 2006—the date of the Environment Court decision—that do not relate to aquaculture management areas in operative regional coastal plans. As far as officials know, there have been no such applications. The bill also freezes applications made outside of operative aquaculture management areas between 1 January 2005 and 9 May 2006. I thank the Primary Production Committee for clarifying that this amendment applies only to applications outside of operative aquaculture management areas. These applications can be processed only if the relevant area becomes an aquaculture management area in an operative regional coastal plan. In the event that the relevant area does not become an aquaculture management area in an operative regional coastal plan within 10 years of commencement of the amendment bill, the applications will be cancelled. These applications are the ones that were the subject of the Environment Court case.

The bill also clarifies, in light of the Environment Court’s decision, how aquaculture management areas are created. The bill makes it clear that from 1 January 2005 aquaculture management areas can be created only through the post - aquaculture reform provisions of the Resource Management Act, by either developing a regional coastal plan that provides for aquaculture management areas, and completing the interim aquaculture management area process set out in a regional coastal plan, or deeming marine farms approved under old legislation to be aquaculture management areas.

The bill also amends the Fisheries Act 1996 and the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004, to ensure that the Ministry of Fisheries is not prevented from carrying out an assessment of any undue adverse effect on fishing. The select committee has assisted by adding clarification in clauses 9A and 9B as to whom aquaculture agreements should be made with, when an area is covered by a reservation. Supplementary Order Paper 251 provides an additional technical fix to ensure that the fisheries register records a memorial against all quota stocks affected by a reservation. This keeps those trading quota supplied with the information that agreements could have been made that might affect the value of the quota. The Environment Court’s decision has highlighted a small number of consequential issues that provisions in the bill also address.

The bill makes amendments to the Resource Management Act, to ensure, first, that councils cannot grant coastal permits for non-aquaculture activities in an aquaculture management area, except to the extent that the activity is compatible with aquaculture activities. Secondly, an amendment to the Maori Commercial Aquaculture Claims Settlement Act 2004 ensures that applications that are not cancelled do not prevent allocation of space to the trustee. Thirdly, there are amendments to the provisions relating to the assessment of undue adverse effects and the definition of “new space” in the Maori Commercial Aquaculture Claims Settlement Act 2004.

The select committee has added a definition making it clear that unitary councils—and Tasman District Council is one of those—are regional councils for the purposes of the Maori Commercial Aquaculture Claims Settlement Act 2004. This is a very sensible clarification. I thank the select committee for its speedy and detailed consideration of the bill, and commend the bill to the House.

PHIL HEATLEY (National—Whangarei) : I acknowledge my colleague and the chairman of the Primary Production Committee, David Carter—a man who is quick to his feet, with a sharp mind, and who helped navigate the select committee through its consideration of the Aquaculture Legislation Amendment Bill. I look forward, like most members of the House, to—

R Doug Woolerton: He’s got no idea what he’s talking about.

PHIL HEATLEY: Oh well, there is Doug Woolerton toeing the party lie. We see that he is over there, contributing to this House, and we look forward to his integrity perhaps shining through when he speaks about this bill. I imagine it is very difficult to present that type of face to the country at the moment.

I will return to the legislation. As the Hon Lianne Dalziel said, on behalf of the Minister for the Environment, this bill amends four Acts: the Fisheries Act 1996, the Resource Management Act, the Aquaculture Reform (Repeals and Traditional Provisions) Act, and the Maori Commercial Aquaculture Claims Settlement Act. That is why this legislation will be divided into four bills.

The bill addresses the Environment Court decision of 9 May 2006. There was a difficulty there where a whole bunch of investors had applied for aquaculture space—marine-farming space—that was not deemed an aquaculture management area through the processes of the new Act, which came into effect on 1 January 2005. Two things fell out of that. Firstly, there were difficulties over what effect on fishing the marine-farming area would have and, secondly, there was an issue around the settlement with Māori—the 20 percent provision of new aquaculture space that was to be passed over to Māori as aquaculture developed in this country. Of course, that was the provision of 20 percent of existing aquaculture space that Māori were entitled to in the form of cash, aquaculture area purchased by the Crown, or new aquaculture space. Those applications at the top of the South Island threw a spanner in the works, so to speak, and a court case ensued. This legislation seeks to fix that.

There is some irony, particularly in the Minister’s speech where she talked about the need for this legislation, that in the relatively small area applied for, Māori will get 20 percent of the marine farm area to be developed down there in the future. I say that because it has been over 1,300 days since the Labour Government’s aquaculture reforms came into effect. The total area of new aquaculture management areas, which are the areas where marine farming that did not previously exist, that has developed in those 1,300 days of marine farming now amounts to—and members need to get their pens out, because I need them to write down this number—zero. I want the House to know that none, zero, zilch, zip, nothing has been created in the way of aquaculture management areas in over 1,300 days—over 3 years—since those reforms were put in place. No new aquaculture management areas, new marine farms, or new areas have been created in that time under Labour’s legislation. Is that not absolutely appalling?

Māori were to get 20 percent of the new space that was to be created—that is, one-fifth of the new space, for those members who are struggling. I want members to get out their pens and paper again, because we will do a little sum. Are members ready? Essentially, Maori have one-fifth, or 20 percent, of however much has been created in 3 years. So 20 percent of zero, or nothing, zip, or zilch, means that Māori have not received a single square metre of new marine-farming space in over 3 years anywhere in the country. Is that not an absolute disgrace?

But the Minister has brought into this House some legislation that will patch up a small area at the top of the South Island, and I tell members that the National Party will support it. Why are we supporting it when it goes very little towards fixing a 3 or 4-year problem? We think that anything we can do to help marine farmers is at least something, so we may as well support this legislation, even if it is only incremental. Could the Labour Government have done much better? It certainly could have done better than zero. We will help it to do this small amount; we will be supporting this legislation, particularly given the input of National members on the select committee.

The irony of the Minister’s initial speech about passing this legislation for Māori is, of course, that Māori have received nothing in terms of aquaculture space—20 percent of new space created—because no new aquaculture space has been created anywhere in New Zealand. Marine farmers, in a mainstream sense across New Zealand, have not received any new space, and Māori have certainly not received any percentage of that. Therefore, they are no better off after the promises of over 3 years ago.

Hone Harawira might remember that there was a bit of quid pro quo 3 or 4 years ago when Labour said to Māori: “We will do you a deal. Stop marching for the seabed and foreshore and we will give you some marine-farming space.” Māori now have neither, so I will be very interested to hear Hone Harawira’s speech shortly.

It is true that this bill is very, very complex. It reflects some of the fundamental problems with the underlying legislation. We know that it will go only a small way to fix it up—it is a sticking plaster approach—but we are happy to support it.

During the course of the Committee stage I will speak about particular areas and particular clauses of the bill, because we had some issues to resolve when the legislation first came to the House. The first issue regarded the way that new marine-farming space affects those who fish. Members can appreciate that if there is a marine farm across the surface of the water, it is very difficult for fishermen to run a trawl line, to run nets, or to fish in that same area. They are essentially locked out of a geographical area of the sea. What happens is that there is a fisheries test—an impact assessment, if you like—to show how a marine farm put in that area would impact commercial, recreational, or customary fishers.

Unfortunately, previously the Act was not clear about the negotiations between marine farmers and fishers to make it fair for parties so that they could both be satisfied that a marine farm could be put in place. It states that the parties have 6 months to undertake those negotiations, but it was not clear as to when the 6 month-period started. The 6-month period was a bit open-ended, so we have closed that loophole and identified when it is to begin.

We have also looked at the issue of the regional council definition, because, believe it or not, when the original Act was passed the Government, when it identified regional councils in the Act, it did not put in a definition of what a regional council was. Unfortunately, under the Local Government Act, the councils of Marlborough, Tasman, Nelson, and Gisborne, which are all unitary authorities—they have regional and district council functions—are excluded from the Act. But in this legislation before us we say that those councils should be recognised as if they were regional councils.

Rt Hon WINSTON PETERS (Leader—NZ First) : The people of this country have had the pleasure of hearing the National Party’s spokesperson on fishing.

Hon Clayton Cosgrove: Who?

Rt Hon WINSTON PETERS: That is a very good question, so for the public’s information I will say his name is Mr Heatley, from Whangarei. I recall at the fishing meeting we had at Onerahi in Whangarei some years ago, he told people there that he was going to be the next Minister of Fisheries. I think they are probably still laughing, but the fact is that he has come out today and pretended he is on the side of Māori. That would be the world’s best kept secret, because hitherto, until National members have most recently aligned with the Māori Party, they have been anything but. On this bill we have had Mr Heatley speaking; and, of course, the chairman of the committee that looked at these four bills, and this one in particular, is one David Carter.

Hon Clayton Cosgrove: Who?

Rt Hon WINSTON PETERS: David Carter is a front-bench MP for the National Party but he is known—

Hon Rick Barker: I thought he left at the last election.

Rt Hon WINSTON PETERS: I thought he left at the last election, because there has been no evidence he has been here since then.

Hon Clayton Cosgrove: He carved his name on the desk.

Rt Hon WINSTON PETERS: He has carved his name on the desk, that is true, but that would take a bit of work, of course, and doing any work on things to advance the economic and social interests of the people of this country is not what the National Party has done lately. No, National has been engaged not in terms of aquaculture and the hopes and dreams and aspirations of people on the coastline of this country, and investors and shareholders in what should be a burgeoning economic aquaculture future, but has been obsessed with character assassination, day in, day out, until, of course, its lead man, Mr Key, was caught out again. I am speaking because I am from the tribe called Ngāti Wai, and that means people of the sea.

Hon Member: A great tribe.

Rt Hon WINSTON PETERS: It is a great tribe, and we have a serious interest in unlocking the aquacultural potential of this country in the interests not just of the Māori people but also of the region up north and of the nation, so that people can make a full economic contribution, hopefully, as exporters to add to this country’s wealth. Every time Māori sell a product offshore they bring home money for the family New Zealand, and that is the economic inspiration and vision that the party I am proud to be part of, New Zealand First, has always believed in. The areas designated in this legislation can be employed for only aquacultural purposes. I just want to put one thing on record here, because I heard a Māori Party spokesperson say—

Phil Heatley: Apparently, you are Italian. Does that go on the record?

Rt Hon WINSTON PETERS: I tell members why he said that. When I was young I did not sit on my backside sunning myself at Christmas time, lying around, surfing, and leading the rich man’s life that Mr Heatley used to lead. No, I used to work on the then new Panmure bridge for an Italian company called Codelfa-Cogefar.

Hon Member: What’s this got to do with aquaculture?

Rt Hon WINSTON PETERS: He raised it. They do not like it. They put up something smart and when they get the retort they do not like it. But just to finish off, I used to be the union delegate on the bridge, working every day in the rigging, getting things ready, doing something productive for New Zealand, and getting paid. I was a poor, humble student, unlike Mr Heatley and Mr Carter, who inherited all his wealth, and he is not prepared to share it with anyone at all. He watches every cent. He criticises me for the magnificent causes I have run in my life—and they have cost a fortune—and he has not been prepared to spend a cent himself but has criticised and passed judgment on a member of Parliament who is engaged in worthy causes, including suing him for saying defamatory things. Guess what Mr Carter said when he got to court?

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

Rt Hon WINSTON PETERS: I will get there very quickly. The case was about fishing. He told the court through his lawyer that nothing he said ever meant to impugn the honour and integrity of Winston Peters. That was his defence. There is a word for that that starts with “h”.

The ASSISTANT SPEAKER (H V Ross Robertson): No, no.

Rt Hon WINSTON PETERS: Oh, yeah! He is a big man in Parliament, he is a big man out there, but he gets to court, with all his millions, and he is dead scared.

Hon David Carter: I’m never scared. You lost.

Rt Hon WINSTON PETERS: The member has not won yet.

Hon David Carter: I have.

Rt Hon WINSTON PETERS: The member and Bill Ralston and Television New Zealand and Radio New Zealand? No, no. Tell the truth. Last December the judge said that there was a prima facie case to face here. In other words, when Mr Ralston goes on TV spewing his bile, it is because he is the one I sued, and he is losing. He does not look too flash now. Mr Carter is a mere bagatelle, so I thought I would let him go. Listen to him! Let me tell members something. He is not so happy about that, because he thinks he might have won, but when one is down the tubes $180,000 to one’s law firm as he is, do members think he has won? I do not. If I were the member, I would keep my mouth shut. I would not try to criticise Winston Peters and try to defame him. I say to the member to get up and tell the House now—

The ASSISTANT SPEAKER (H V Ross Robertson): Can we get back to the debate.

Rt Hon WINSTON PETERS: I would love to. Let me say that the Government is, through this bill, enabling Māori—because of the Waitangi settlement—to have 20 percent of this future resource. Why is that apposite now? Well, the Māori Party actually said that New Zealand First does not support the Treaty of Waitangi. That of course is not true. What we do not support is the phrase the “principles of the Treaty of Waitangi” that not one Māori member can tell me they can describe, not one historian can tell me what it is, nobody at law school can tell me what it is, and nobody in this House can tell me what it is, but they would love to have it in the law. When one asks what the principles of the Treaty of Waitangi are, one is told that it is a sort of catch-all phrase.

Pita Paraone: A feel-good phrase.

Rt Hon WINSTON PETERS: A feel-good phrase. It means whatever one wants to say it means. There is one party in this country that does understand Māori, and once, when we were better understood by Māori, we won all the Māori seats, which the Māori Party never will. One way to get offside Māoridom is to say one thing on the marae, one thing over Māori radio, and then do something privately that is different. That is what happened here. To put the record straight, I came down to the House because it was chance to say to Māoridom—and I know that they are listening in their tens of thousands now that they know this debate has started—that what they are hearing over the airwaves from the Māori Party is not the truth.

Hone Harawira: I raise a point of order, Mr Speaker.

Rt Hon WINSTON PETERS: I see I have struck a nerve.

Hone Harawira: I ask you, Mr Assistant Speaker, to ask the member to come back to the bill.

Rt Hon WINSTON PETERS: That is what is in the bill. The 20 percent is the Waitangi settlement that the Government has agreed to, as to their fair proportion. That, after all, is the deal that was struck with Māoridom. The chairman of the select committee that sat on this bill, Mr Carter, can call it a load of rubbish. That is his speciality—a load of rubbish. But he obviously did not do anything when he was on the Primary Production Committee.

Hon Clayton Cosgrove: He was sent here to be kept out of the family business, wasn’t he?

Rt Hon WINSTON PETERS: I cannot be certain of that, but if it has any truth to it I can understand why. If there ever was a cowboy in this place it is David Carter, from the South Island. In fact, Federated Farmers said: “Who on earth appointed him to that role?”. They want to know what they did to deserve him as the National Party spokesman on agriculture.

Hon Member: Invisible man.

Rt Hon WINSTON PETERS: They called him the invisible man, but unfortunately not the silent one. He is still interjecting in this House.

The New Zealand First Party is pleased to support this legislation, and to put a few things on the record that are factual—which are to do with the truth—rather than have ourselves so vilely, unfairly, demonstrably misrepresented.

Hon DAVID CARTER (National) : For a start, I want to put on record my thanks to Winston Peters for the cheque of $9,600 that we received last week as full and final settlement of a case that he lost. Thank you very much, I say to him. It took a long time to get it. It was probably the threat of bankruptcy proceedings that did it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You cannot have a man get up and say that a transaction was done because of the threat of bankruptcy. That is humbug. The member has no right to make that sort of statement, at all. We paid Mr Carter because we always have paid people when we have to—not for the kinds of vile, selfish, venal reasons he has, but because it is called honour.

Hon DAVID CARTER: Speaking to the point of order, I want to say that payment was received only after the second letter was sent to Brian Henry saying that unless money was received, bankruptcy proceedings would be initiated.

Rt Hon Winston Peters: There he goes again. That cannot possibly be true. As he well knows, any such letter had to be sent to the instructing solicitor, who is Dennis Gates—not Brian Henry, who is the barrister sole and does not get such correspondence. Whether the member’s lawyers are so stupid as to send it to the wrong man, I do not know. But I know that the cheque that Mr Carter got came from Dennis Gates. I ask the member whether the cheque came from Dennis Gates—yes or no. [Interruption] The answer is that, yes, he does not know what he is talking about.

The ASSISTANT SPEAKER (H V Ross Robertson): I think that we have had our fun, and I think that both members have made a contribution.

Hon DAVID CARTER: I would certainly like to speak to the Aquaculture Legislation Amendment Bill, which the Rt Hon Winston Peters has just spoken on—probably as the deemed Minister of Fisheries in the Labour - New Zealand First Government. Of course, in recent weeks he has had more contact with the fishing industry—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You cannot, surely, have a front-bench member of the National Party demonstrate his hopeless ignorance by referring to a Labour - New Zealand First Government. There is no such thing.

The ASSISTANT SPEAKER (H V Ross Robertson): It is a debatable point, Mr Peters, and I will not tolerate frivolous points of order.

Hon DAVID CARTER: The Labour-Progressive Government has been supported ably in recently months by the New Zealand First Party as it has maintained its position in Parliament.

I was saying that Mr Peters has had more contact with the fishing industry than the actual Minister of Fisheries, particularly over the last few weeks, with regular contact with the likes of Mr Simunovich and Mr Vela—

The ASSISTANT SPEAKER (H V Ross Robertson): Can we just keep to the bill, please.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. See, he is at it again. He is making it up as he goes along. I have had no contact whatsoever recently with Mr Simunovich. I would not even know where he is living. That is the kind of deceit that member engages in all the time.

The ASSISTANT SPEAKER (H V Ross Robertson): What we are having may well lead to chaos, and I am not going to have that in this House. We will have order. This is a place for full and vigorous debate, but contributions will be made with respect for the traditions of the House as enshrined in the Standing Orders. That is why I am on my feet—because I represent those Standing Orders. I crave your respect for them, and your understanding. Let us get back to the debate.

Hon DAVID CARTER: The biggest contribution that the Labour Government, supported by New Zealand First, has made to aquaculture during the last 9 years is this pamphlet I have here, produced in June 2007. It is a very fancy brochure and states: “Now is the time to get out on the water, whatever the weather, and join the journey.” Join the journey! The brochure is signed by six Ministers. The first is the Hon David Benson-Pope, the Minister for the Environment, but he is not that any more; he was fired. Then there is the Hon Chris Carter, the Minister of Conservation, but he is no longer the Minister of Conservation. Then there is the Hon Parekura Horomia, the Minister of Māori affairs; he is the only one who has kept his job. Next is the Hon Trevor Mallard, the Minister for Industry and Regional Development, but I do not think he has that job any more. Then there is the Hon Jim Anderton, the Minister of Fisheries. Last is the Hon Mark Burton, the Minister of Local Government, but he is another one who has been fired.

I make the point to Clayton Cosgrove, who is interjecting, that despite producing a very expensive and fancy brochure, the Labour Government has done nothing to promote the aquaculture industry. The industry, both domestic and international, is currently worth about $300 million, and it has potential to do significantly better. All that the Government had to do was to pass legislation that would facilitate aquaculture development. The member Winston Peters was in this House supporting the Labour Government’s legislation in 2004, and, as my colleague Phil Heatley has pointed out, subsequent to that legislation the amount of new aquaculture space that has been created in this country is zero. I say to Mr Peters and the Labour Ministers: “Well done on producing a fancy brochure!”.

We are today passing this little bill in an attempt to patch up what was completely unworkable. Doug Woolerton was not on the Primary Production Committee in 2004, but what the select committee told the Minister at the time—

Hon Clayton Cosgrove: How did you mess up that selection?

Hon DAVID CARTER: I think Mr Cosgrove might have been on the select committee in those days. The select committee told Mr Benson-Pope, as the Minister, that the legislation would not work. Mr Benson-Pope did not listen to the select committee, but the proof of the pudding is in the eating, because the legislation has not worked. Today we have a little bill that patches up but one court case.

R Doug Woolerton: The actual fact of the matter is that the area has now been filled with product.

Hon DAVID CARTER: Mr Woolerton sat on the select committee. He heard people saying that not one new aquaculture area has been created, and he is now saying there is lots of product. Mr Woolerton should listen when he is sitting on the select committee. What we have today is this single piece of legislation, and all that it does is attempt to sort out a mess that we knew was likely to occur. It concerns a particular area in Tasman Bay where some resourceful fishers under the name of SMW Consortium applied to occupy space before the Tasman District Council had actually deemed it to be an aquaculture management area. All that we are doing now is pass legislation, in the dying days of this Parliament, to patch that up. If we look further down the Order Paper, we see another bill of a far more technical nature, we are told, which will try to further tidy up the mess.

Hon Clayton Cosgrove: You will struggle.

Hon DAVID CARTER: If Clayton Cosgrove had only listened when he sat on that select committee as a humble backbencher, he could have worked with us in 2004 to pass legislation that would allow this industry to reach its potential. He could have been part of historic legislation being passed through this House. It would have had the label of the Labour Government on it, and it would have been successful. But Mr Cosgrove would only do what David Benson-Pope would tell him to do. As a consequence, no new aquaculture spaces have been created, and we have a little bill today to patch up but one silly mistake made by David Benson-Pope, and another bill sitting on the Order Paper to try to further patch up the mess. But they will not be enough. Mark my words, the aquaculture industry will not get ahead until satisfactory legislation comes before the House that recognises the potential of the industry and allows our space to be utilised.

Hon Rick Barker: Why is that member running a family business?

Hon Clayton Cosgrove: He is running it into the ground.

Hon DAVID CARTER: Minister Barker asks why I am not running a family business. Well, for that Minister’s information—and what it has to do with aquaculture legislation, I do not have a clue—I do run a family business, and I do it with substantially more success than that Minister will ever do anything. That is the difference between this side of the Chamber and that side. Over here we have people who have run businesses and understand what makes businesses work. On the other side they have nobody. They had one guy called Jim Sutton. He knew how to fill out a GST return, and they fired him. Helen Clark fired him. That is the difference between this side and the other side. We actually know how to run businesses. The select committee in 2004 heard from a substantial number of submitters who ran small family businesses in the Marlborough Sounds and they said to the committee, in front of Mr Cosgrove: “You get this legislation right, and we’ll stay in New Zealand, but you get it wrong, and we’ll take our expertise to Australia and Chile.” Does Mr Barker know what happened? Those people have gone to South Australia. Who is the loser? Well, certainly the Labour Government is the loser, and deservedly so, but the real loser is the whole of the New Zealand economy.

R Doug Woolerton: They have not gone, at all. Rubbish!

Hon DAVID CARTER: Doug Woolerton can chip in all he likes, but he was part of the party that supported the Government to pass legislation that has not worked and will not work. This bill is a small band-aid to patch up the problem. It will not be enough to fix the underlying problem and to give the industry a real chance. The industry has huge potential, billion-dollar potential, and could be a goer, if only we had a Government that knew a little bit about business, knew a lot about fishing, and would create the legislative framework to get the industry going.

Hon SHANE JONES (Minister for Building and Construction) : Tēnā tātou, Mr Assistant Speaker. In inverse proportion to the speech given by the last speaker, this speech will be short and will point out that in actual fact this simple, legal modification closes a gap brought about by an unwise decision flowing from the Environment Court.

Hon David Carter: No, it didn’t make a mistake.

Hon SHANE JONES: Yes, and the Tasman District Council, etc., will enjoy a higher level of clarity. I say the notion that investors are leaving in droves from the industry is absolute rot. I am glad to hear that all members of the Primary Production Committee supported this improvement. They realise that from time to time members of the judiciary do come up with decisions that are beyond the purview of the original legislators when they are passing legislation. It is not unusual for that to happen.

I am looking forward to the fact that speaking in the House today, from the Māori Party, is Hone Harawira, who, I have no doubt, will support this bill. Had he been here, he would have supported Winston Peters. Had he stayed on the Privileges Committee, he would have supported Winston Peters, unlike the wittering we heard from Te Ururoa Flavell, who fulfilled that great Māori proverb: “Kei runga te kōrero, kei raro te rahurahu.”—there is wittering upstairs; noises of a different nature are being emitted downstairs. Those members will be punished for that type of rauhanga, which is what we in the Ngāpuhi call it. However, it will be good to hear Hone Harawira speak shortly and support this bill, which will drive aquaculture forward. That will make a small step towards atoning for the very unwise, short-sighted decision made by Mr Flavell to cuddle up to John Key.

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

Hon SHANE JONES: I will come back to the bill, Mr Assistant Speaker. I am just pointing out that that Māori member will stand to support this bill, because it is good for our Māori claims process. That other Māori member did not stand with another Māori who deserved to be given a fair go. Kia ora tātou katoa.

METIRIA TUREI (Green) : Tēnā koe, Mr Assistant Speaker. The Green Party is supporting this Aquaculture Legislation Amendment Bill, so I will take just a short call on it.

In our view, aquaculture can be a growth industry, and it can be a very good supplier of an alternative source of seafood for New Zealand, particularly while our wild fisheries recover from the incredible over-exploitation of those stocks that is going on as we speak. But, really, aquaculture is useful for this country only if it is done sustainably and excludes any kind of genetically engineered aquaculture. Aquaculture processes must protect conservation values and the public recreational and customary rights that our community has to the resources and places of the coast. It must avoid damaging fish-breeding grounds and valuable aspects of the coastal ecosystem. It must not pollute; there is always a serious risk of that with aquaculture. It must not pollute, it must be sustainably managed, and, what is very important, it must involve the public in decision making on aquaculture management areas. There is considerable uncertainty as to whether the current regime—with or without this amendment, and with or without its more substantial brother bill, which the House is yet to debate—can adequately do that.

The National Party has described aquaculture as having stagnated under Labour. Although there are complications with the resource management of aquaculture, it does not mean that all aquaculture development has been stalled, at all. I am advised that the Northland Regional Council has approved many aquaculture management areas recently, with only six applications out of 25 being contested. Most of them have gone through relatively easily. That said, it is also suggested that the council railroaded the community and non-governmental organisations in some of those instances, and there is considerable disquiet in the area about the loss of public coastal places to marine farming. It is our coast, it is not the developers’ coast, and the community has the right to have a say. The public must never be shut out.

The Minister of Conservation must also have a say, lest our marine ecosystems are sacrificed simply for profit. National’s intention to liberalise coastal management will be disastrous for the community, for the habitat, and for conservation values.

I know that there is a particular Māori interest in aquaculture. It has been discussed here before, and, no doubt, it will be discussed later this afternoon. I had the privilege of talking with the Wakatu Incorporation about its aquaculture proposal in Nelson. It is very exciting. The Greens are looking forward to that development.

National’s policy is about certainty for investors. National’s policy is about having the freedom to change species, about reducing bureaucracy and cost, and about removing—entirely removing—conservation from the picture of aquaculture management. This means that National would shut out conservation and shut out the community; it would shut out those interests from decision making over commercial projects, so that those projects can reduce costs and can have more freedom to make a profit at the community’s cost and expense. That is not what New Zealanders want to see happen with their coastal areas. They want to have a say. There is no doubt that there are opportunities for development, and for local and regional economic development, in this area, but not at the cost of destroying the environment, destroying the habitat, and preventing people from being involved in those decisions.

There is considerable concern about GE aquaculture. Members will remember the threat of GE king salmon back in the 1990s. The Greens fought GE aquaculture hard then, and we will continue to do so if it rears its ugly head again. The world does not want GE, and our New Zealand brand advantage, including the brand for aquaculture, is clean, green, and 100 percent pure. GE aquaculture would erode and, indeed, destroy our competitive advantage. It is not only that; the biosecurity risk of GE marine organisms is very high, as the ocean is a very dynamic environment. They would put at risk our marine environment, for no benefit whatsoever to the community or to our industry.

This bill is very technical. The Greens look forward to its brother bill being debated in the House. We are pleased that the bill restricts applications to approve aquaculture management areas only, and we support it.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Kia ora, Mr Assistant Speaker. Kia ora tātou e te Whare. I was really pleased when Rāhui Kātene, the Māori Party candidate for Te Tai Tonga, proudly told me about Nelson’s Wakatu Incorporation, which has just released plans for a 78-hectare Horoirangi Centre of Seafood and Aquaculture Innovation. It will include fingerling fish hatcheries, high-value extraction and aquaculture research facilities, and complementary activities including seafood and marine education and Māori cultural tourism. I congratulate Wakatū on their vision, their leadership, and their enterprise in the face of adversity.

I say that because, although we know well the tremendous commercial opportunities that can come from aquaculture, we know too that the iwi from Te Tau Ihu have not exactly had a lot of support from the Government. The crux of the matter for Te Tau Ihu is that although they were promised 20 percent of new aquaculture space, there is nothing left, so they were given nothing. They were forced to pursue a cash settlement because the Government refused to offer them anything at all.

Putting all that aside, this Aquaculture Legislation Amendment Bill will be important for iwi wanting to get into aquaculture in that it defines what aquaculture management areas, or AMAs, will be available, although we also note that this bill will stop iwi from developing aquaculture projects outside of aquaculture management areas, which Te Tau Ihu did in 2006. We understand the need to clarify the way in which aquaculture management areas can be established, and we are glad that the bill confirms obligations to provide new space to iwi, but we will not be holding our breath waiting for that to happen anytime soon, given the fact that although the Maori Commercial Aquaculture Claims Settlement Act was passed in 2004, the agreement to provide iwi with 20 percent of aquaculture space simply has not happened.

We are not surprised to hear, though, that all of a sudden the Government is running a consultation exercise with iwi, just prior to the election, about aquaculture space allocation. What it is not bragging about, though, is that what it is talking about with this consultation exercise is what it was supposed to do in 2004, and now will not be doing until 2014—if we are lucky. We are also mindful of the recent aquaculture consultations, which the Government called a success but which cost the taxpayer $180,000, and some hui attracted only five people. Given how poorly those consultation exercises have been to date, and given that this is election campaign time, it would not be unrealistic for people to think that this exercise was nothing but a publicity spend to profile the Government. The Māori Party co-leader Tariana Turia summed up the situation perfectly when she asked the Minister of Māori Affairs last September: “Since the legislation, can the Minister tell the House how many new aquaculture farms have been established by and for Māori, and where they are?”. The Minister’s response was “None.”

The Māori Party will support the bill in the interests of trying to get the Government to honour the Māori commercial aquaculture settlement, but we do so mindful of the bad faith and broken promises that have characterised this Government’s commitment to Māori aquaculture development. Sorry, I apologise; this Government did keep one promise to Māori. It promised to steal our foreshore and seabed, and it did exactly that. Kia ora tātou.

• Bill read a second time.

The ASSISTANT SPEAKER (H V Ross Robertson): This bill is set down for Committee stage forthwith.

Rt Hon WINSTON PETERS (Leader—NZ First) : I raise a point of order, Mr Speaker. Mr Clarkson wants to make his valedictory speech early. Do you see, Mr Assistant Speaker? Oh, he has pulled the sign down. It will be a short speech. He has been totally incomprehensible since the day he arrived. He jumped before he got pushed.

BOB CLARKSON (National—Tauranga) : I raise a point of order, Mr Speaker. I have just two words, Mr Assistant Speaker: good bye.

Rt Hon Winston Peters: That’s his valedictory.

The ASSISTANT SPEAKER (H V Ross Robertson): We must be in urgency, I think.

GERRY BROWNLEE (National—Ilam) : I raise a point of order, Mr Speaker. Thank you, Mr Assistant Speaker. I appreciate the opportunity to make a contribution to the proceedings in the House this afternoon, as we appear to have reached some form of impasse, whereby the Government is not able to proceed with its business, because the Minister has not turned up.

The ASSISTANT SPEAKER (H V Ross Robertson): I thought that was going to be a point of order, Mr Brownlee.

Hon Members: What’s going on?

GERRY BROWNLEE: I sought the call. You gave me the call. I assumed that—

The ASSISTANT SPEAKER (H V Ross Robertson): No, I did not give you the call, Mr Brownlee. Please be seated. I was under the impression that you had a point of order. I declare the House in Committee for consideration of the Aquaculture Legislation Amendment Bill.

Hon STEVE CHADWICK (Minister of Conservation) on behalf of the Minister of Fisheries: I move, That the Fisheries Act 1996 Amendment Bill (No 2) be now read a second time. This bill amends the Fisheries Act 1996 and it is particular to section 13 of that Act. The provisions of the bill address an issue pointed out by the High Court in February 2008 in a case reviewing decisions on total allowable catch for the area 1 stock of orange roughy. The court pointed out that the practice of the past two decades in the management of many of New Zealand’s fisheries has been inconsistent with the current wording of the Act. This effectively disabled the key management measure for the majority of our fisheries—that is, the setting of total allowable catches under section 13 of the Act.

This short bill addresses the problem identified by the court and restores the ability of the Minister of Fisheries to set catch limits for all quota management system fish stocks. It introduces new subsection 2A into section 13 of the Act. This new subsection will enable catch limit decisions to be made for quota management stocks where full quantitative estimates are not available for the current biomass of the stock and the biomass that would enable the maximum sustainable yield to be taken. It is intended to preserve the balance of consideration in setting total allowable catches under the Act that has prevailed in recent years, providing for the utilisation of fisheries while ensuring sustainability. It replicates as much as possible the language and concepts of the existing provisions as they have been applied to date.

The new provision will not only be used where quantitative estimates of biomass as required by the existing provision are not available at reasonable cost, effort, or time; it also requires that decisions must not be inconsistent with the objective of managing fish stocks at or above a level that can produce a maximum sustainable yield. In short, the new provision restores the ability of the Minister of Fisheries to set sustainable catch limits for all fish stocks and allows the management of fishing to continue as it has in the past.

The Primary Production Committee reported this bill back to the House with minor amendment only, to cross-references under clause 4(2) that correct a drafting oversight. Essentially, the committee agrees that this bill does what it sets out to do and that it is important to focus on this task alone. Submissions made to the committee asked for a variety of additions and alterations to be made to the bill. However, anything that departs from the simple task of restoring the ability of the Minister to set total allowable catches for all stocks with the best available information will inevitably be controversial and delay this important bill, and it is important that this bill is passed into law this week.

The Minister of Fisheries has total allowable catch advice put before him at this very time every year and in March so that fisheries may be managed sustainably. The current decisions need to be finalised and gazetted by 1 October if they are to have effect in the coming fishing year. The need to expedite this bill is not to deny the work of many of the submissions made to the select committee. The Fisheries Act could, of course, be improved, and a forthcoming review of the Act has already been signalled by the Ministry of Fisheries. The ideas for new approaches put forward in submissions will be taken forward into that wider view of legislation.

This bill contains provisions that will correct the deficiencies in the Fisheries Act 1996 that were identified recently by the High Court, and it will allow our most important fisheries management decisions to be made in a timely manner, consistent with practice in recent years. This will restore the ability of the management system to fulfil the purpose of the Act, which is to provide for utilisation of fisheries resources while ensuring sustainability. I commend the bill to the House.

PHIL HEATLEY (National—Whangarei) : The National Party supported the Fisheries Act 1996 Amendment Bill (No 2) going to the select committee, because we believed the ministry, Crown Law, the Minister, and the industry when they came to us and said that the law needed clarification. There was no will on the part of the National Party to change the law; what we wanted to do was clarify the intent of the law, and we believe that the legislation does that.

This bill amends section 13 of the Act to allow the continuation of what has always been done—that is, to use a range of methods and management strategies in the setting of a total allowable catch. The ministry claimed that clarification was necessary following a recent court case decision where the total allowable catch and the total allowable commercial catch settings of orange roughy were successfully challenged. Although there was at that time dispute over whether it was the interpretation of the law that led to the judgment against the Ministry of Fisheries, rather than poor advice from the ministry, the fact is that since the judgment commercial fishers, the ministry, and Crown Law agree that the intent of the law needs to be clarified. We welcomed that into the select committee. We understand that the industry, the ministry, and others agreed on wording that does not extend the current law and does not curtail the current law. It does not extend current practice when measuring fish stocks, and it does not curtail current practice in measuring fish stocks; it simply endorses both.

Current law and current practice allows the Minister to set the total allowable catch and total allowable commercial catch based on a maximum sustainable yield that has been estimated using a range of methods, not just a single method. The law as it currently stands could be interpreted to say that there is only one way to estimate the maximum sustainable yield. We would not like to see the Ministry of Fisheries restricted to using only one method to estimate the maximum sustainable yield, simply because that would mean that the vast majority of fish stocks would not be able to be measured in this way, and certainly the resources to do so are limited, so it would just not be practically possible.

This amendment has no relationship, we should add, to the section 10 fisheries amendment bill that was languishing on the Order Paper with no political or industry support. We saw that in the mid-year. The section 10 legislation was to clarify the law that the Minister must take a cautious approach where there was inadequate information on fish stock health. I have to say again that this legislation here has no relationship to that section 10 legislation; this legislation deals with section 13 only.

National agrees that the current Act is not explicitly clear. We agreed to clarification, not change. We can say, particularly to recreational fishers who are concerned that this legislation makes a change that favours the commercial fishing industry, that members of the select committee—members from Labour, National, and other parties across the debating Chamber—were very careful to ensure that this legislative change that we are debating today made no change at all to the intent of the Act or to how the Act currently works. There is no shift of the goalposts, at all; we have been very careful to make sure of that. We agree that the current Act is not explicitly clear. We agree to clarification, we do not agree to change, and we believe that this is what this legislation does achieve.

SUE BRADFORD (Green) : The Green Party believes that the Fisheries Act 1996 Amendment Bill (No 2) is a necessary fix to one of the many flaws in the Fisheries Act 1996. Given that for many, if not most, fish stocks we have very limited actual biomass data, let alone good enough data to accurately estimate what sustainable yields are, it is an unacceptable situation for the Minister to not be able to set or change the total allowable catch for those fish stocks. A number of alternative methods for guesstimating maximum sustainable yields are required for fish stocks without good biomass data. As a result of a High Court decision, those are unavailable to the Minister. The bill amends section 13 of the Act, to use the best available information to estimate the maximum sustainable yield.

The Green Party believes that fisheries management in New Zealand is fundamentally unsustainable, with fish stocks continuously being depleted, and that deep quota cuts are required. Orange roughy is the classic example of that, having been fished almost to death by bottom-trawling. Since quotas were reduced in some areas in the 1990s, the state of the fish stock has hardly even begun to recover. The hoki fishery, despite recent recertification by the Marine Stewardship Council, is heading in the same direction, as are many of our other fish stocks. The Minister may describe the New Zealand quota management system as a world leader, but the sad fact is that it is not. It could be a world leader if the Fisheries Act was based on a precautionary principle, if the sustainability of fish stocks in the wider marine ecosystem was paramount, if customary and recreational interests came before commercial interests, if the Minister mandated best-practice fishing and by-catch avoidance methods, and if foreign fishing vessels were restricted in New Zealand waters.

The fish in New Zealand waters are a natural resource that belongs to all New Zealanders, yet since 1992 the commercial fishing industry gets to catch them for free, provided that it owns quota. The public of New Zealand get no return on the use of that resource. If commercial fishing was required to pay resource rentals for the fish it profits from, our fisheries management would be better and fairer. When total allowable catches are based on treating biomass maximum sustainable yields as targets, we regularly overfish the stocks. The biomass maximum sustainable yield should be treated as an absolute maximum in setting the total allowable catch, not a target. I have learnt that only 24 of the 629 fish stocks managed under the quota management system have quantitative estimates of current biomass and maximum sustainable yield. By number that is just 3.5 percent of all fish stocks, but due to many major fish species being in the 24, by volume it is actually 24 percent.

In addition to general concern about the inadequate precautionary and sustainability principles in the current fisheries legislation, this bill raises a more specific issue about research. We can estimate fish stocks in ways other than quantitative estimates, but we must not rely on them. There are woefully insufficient incentives for the fishing industry to do the necessary research to obtain hard evidence of the sustainability of fish stock and catch levels. I am advised that we invest less today on stock assessment research than we did 15 years ago. Taking inflation into account, it is under half what was spent in the early 1990s. The investment dropped drastically during the period when the National Government was in charge and the Hon John Luxton was the Minister. Those were dire days for fisheries management. The current Government has improved things somewhat, but it is still a fact that we invest significantly less in research than we used to. That has to be addressed.

The Green Party amendment to this bill would help. It says that if the Minister has to set a total allowable catch under new section 13(2A), inserted by clause 4 of the bill, he cannot increase the total allowable catch. In order to increase the total allowable catch the Minister would need to be satisfied that there is sufficient information on the stock. Where there is uncertainty, then the precautionary principle would apply and the total allowable catch would not be increased. It could be reset at current levels or reduced, depending on what the limited information available suggested was prudent. The incentive should be that if one does more research, one gets estimates of sustainable yield that comply with section 13(2) of the Act, and then one can increase the total allowable catch if the reliable estimate can sustain that. The second part of the Green Party amendment simply ensures that the broader purpose and principles of the Act are taken into account when setting a total allowable catch using the new section 13(2A) and section 13(3). We commend this amendment to the House, as a way of ensuring that the bill does not have the perverse outcome of allowing catches to be increased in the face of uncertainty.

Finally, I say the test of this legislation will come when the Minister sets the total allowable catch allocations for the major bluenose stocks, which have one stock with a quantitative estimate that has not been updated since 1991 and no estimates for other areas. Limited evidence suggests that this fishery is actually unsustainable. This legislation should allow those total allowable catch allocations to be reduced. For that reason the Green Party will support this bill, even if the House does not accept the Green Party amendment.

Dr PITA SHARPLES (Co-Leader—Māori Party) : Tēnā koe, Madam Assistant Speaker. Well, we know only 44 days are left until an election, when suddenly everyone wants to consult “the Māori”. Curiously, this bill, the Fisheries Act 1996 Amendment Bill (No 2), is being debated at the same time the Ministry of Fisheries is consulting tangata whenua about ways of improving the processes for working together on fisheries management—interesting! Some 12 years after the Act was introduced, the ministry now deems it appropriate to talk with Māori about ways to implement the requirements of the Act. The Ministry of Fisheries is going around the country, between now and 31 October, asking Māori what participation looks like. Twelve years later, the ministry is asking the people what the Act means when it allows the Minister of Fisheries to approve measures “to better recognise the rangatiratanga of iwi and hapu over their non-commercial customary fisheries.” We are not criticising the fact that there is consultation; quite the contrary. Engaging with Māori before making sustainability decisions, such as changes to catch limits and amendments to regulations, is absolutely fundamental, and consistent with the Fisheries Act. But we are concerned about why it has taken until now to willingly involve tangata whenua in fisheries management—and I take this time to commend the Minister of Fisheries, the Hon Jim Anderton, for taking particular care to ensure that tangata whenua are consulted.

This bill was always inevitable. The problem identified by the High Court in relation to setting the total allowable catch had to be rectified, and there is a particular reason why we have supported the section 13 amendment coming up under urgency. That is, of course, the fact that this time next week—1 October—signals the start of the new fishing year, and so the amendment is needed to establish new catch limits. We acknowledge the pressure that a tight time frame has placed upon the sector, with literally the whole process being tied up within the space of 8 weeks. The amendment will enable the Minister of Fisheries to determine the catch limit decisions for fisheries in the quota management system, according to established practice and using the best available information. The emphasis on established practice and best available information is of particular interest to the Māori Party. The Fisheries Act requires that the Minister must provide for the input and participation of tangata whenua, and, additionally, have regard for their kaitiakitanga in matters such as changes to catch limits.

We are pleased that the Minister has initiated a more robust consultative process with Māori fisheries. We are aware, however, that not all parties are satisfied, and that non-commercial fishing representatives, both amateur and customary, are concerned that the amendment was reached without sufficient input from them. Demands were also made at a recent hui of the Hokianga Accord, the mid-north iwi fisheries forum, for a more open and democratic process before making such a significant change to the Act. The concerns from the Hokianga Accord, the New Zealand Big Game Fishing Council, option4, and other non-commercial fishing representatives spoke of the vital need to work together, to ensure sustainability, and to avoid international condemnation of fisheries management in New Zealand.

In thinking about an international context, I want just to mention a recent announcement from the United Nations that has confirmed New Zealand’s rights over seabeds outside the country’s exclusive economic zone. It is a fascinating irony that a Government that was hell-bent on taking the foreshore and seabed off Māori has, at the same time, been negotiating for 10 years to extend the outer limits of the continental shelf. And it is with even more irony that we learn that the new continental shelf boundary will enable what the Prime Minister describes as “New Zealand” to exercise its rights to resources such as minerals and petroleum. I cannot help contrasting this new-found enthusiasm for rights to petroleum with statements back in 2000 in response to the claims by ngā hapū o Ngā Ruahine o Taranaki and by Ngāti Kahungunu of Hawke’s Bay and Wairarapa in relation to their interests in the petroleum resource. In that significant finding, the tribunal concluded that the claimants had a subsisting Treaty interest in the petroleum resource, and that they were accordingly entitled to redress beyond that to which their historical land-loss grievances entitled them. But of course it is history now—that the Government briskly moved to reject the findings, and to ignore the conclusion that this was a breach of the principles of the Treaty of Waitangi, and to quickly rule that oil and gas were public assets.

As I have found in this place, political intelligence is all about connecting the dots, pointing out the inconsistencies, and addressing the anomalies. It would appear that the fisheries area has more than its fair share of loopholes and fishhooks, trapped within the sector. This bill, we believe, is an honest attempt to untangle one of the more recent issues impacting on quota management stocks, and we welcome that. We do not believe that it will create major change for the general approach of the Fisheries Act, and we do, as I said earlier, have the concern that we do not want to delay decisions on catch limits before the start of the new season. We are very aware that the current status for the majority of the 629 fish stocks in the quota management system is such that the information threshold can simply not be met. So we hope that this amendment will enable due process to occur, with best practice and robust information, to set catch limits without incurring unreasonable cost, effort, or time, across the sector. The warning is there, however, that effective progress in fisheries management will come only with full, frank, and informed consultation with all parties.

I end with a concern that the Hauraki Māori Trust Board’s spokesperson, John McEnteer, has raised, regarding the seabed decision I referred to earlier. His comment was that with the foreshore and seabed legislation, the Government grabbed more than $100 million of assets from Māori, and in excluding Māori from the new development—the additional 1.7 kilometres of seabeds—it continues to marginalise and ignore the rights of Māori even further. The Hauraki Māori Trust Board suggested back in 2004 that moves to claim the continental shelf should be done in partnership with Māori, but the Government refused to do that. What is worse, when Mr McEnteer has gone to officials for robust information, they have refused to give it, claiming the matter is confidential. All that such action does, of course, is to further erode the confidence of Māori in the Government, and ultimately affect the perceptions around the integrity of the consultation process. The fisheries sector is very familiar with the notion of the precautionary principle—that we should not introduce a new initiative unless we are convinced that it is safe for us and for the environment. The Māori Party recommends that this same precautionary approach is considered of value when thinking about consultation on anything relating to fisheries management. We will support this bill at its final readings, and we signal our support for the ministry and the Minister to continue to demonstrate their commitment to consultation. Thank you.

PHIL HEATLEY (National—Whangarei) : I raise a point of order, Madam Speaker. I did not want to interrupt Dr Sharples in his speech, but when he was talking about seabed exploration he mentioned an Andrew. Was it a place name or a person’s name? It was Andrew, I think, and I did not catch the surname. Or did I misinterpret? I am just interested in that.

The ASSISTANT SPEAKER (Hon Marian Hobbs): I think you might have to settle that out of House time. Is that all right? It is perfectly legitimate.

PHIL HEATLEY: OK.

PITA PARAONE (NZ First) : I say to the member that the name of the person I heard referred to is John McInteer, who I understand is a member of the National Party.

The ASSISTANT SPEAKER (Hon Marian Hobbs): Does the member wish to seek the call?

PITA PARAONE: Tēnā koe, Madam Assistant Speaker. I stand on behalf of New Zealand First to take a short call, and to indicate that New Zealand First will certainly be supporting the Fisheries Act 1996 Amendment Bill (No 2). The bill imposes a technical change in regard to section 13 of the Fisheries Act 1996, where it provides for the continuance of established practice by the Minister of Fisheries when setting a total allowable catch for a stock covered by the quota management system. It would allow a total allowable catch to be set even where estimates of the current and target biomass of a fish stock were not available. The bill is a response to a recent High Court ruling, which found that as the principal Act stands, the Minister must be provided with estimates of the current biomass of a stock, and of the biomass that can represent the maximum sustainable yield from that stock, before setting a total allowable catch.

Reference has been made by a previous speaker that two particular lobby groups within the industry expressed some concern about the short notice and, possibly, about the lack of opportunity to be consulted on this bill. I say that around about this time last year I, and a number of members of this House, attended the quarterly meeting of option4 and the Hokianga Accord. At that particular conference this whole fishing issue was discussed. I extended an invitation for the members of that conference to come and visit New Zealand First to clarify the concerns they might have, but I can report that from that day to this day neither I nor any of my caucus colleagues have received a visit from either of those groups. We have heard today that they have been making approaches to some parties, complaining about the process this House has adopted, but they have not wanted to express their concerns to other parties.

Suffice to say, this bill will certainly give more clarity and, dare I say it, more authority to the Minister of Fisheries. If I had a personal concern, it is that it may become the norm, rather than the exception, for the Minister to exercise his or her prerogative to issue, or not to issue, a particular quota for a particular species, irrespective of there not being sufficient evidence or documentation to prove that that species is under threat. New Zealand First supports the second reading of this bill. Kia ora.

• Bill read a second time.

Hon DAMIEN O’CONNOR (Minister of Tourism) on behalf of the Minister of Fisheries: I move, That the Fisheries Act 1996 Amendment Bill (No 2) be now read a third time. The Fisheries Act 1996 Amendment Bill (No 2) amends the Fisheries Act 1996, and, in particular, section 13 of that Act. The provisions of the bill address an issue pointed out by the High Court in February 2008 in a case reviewing decisions on total allowable catch for area 1 stock of orange roughy. The court pointed out that the practice of the past two decades in the management of many of New Zealand’s fisheries has been inconsistent with the current wording of the Act. It has effectively disabled the key management measure for the majority of our fisheries—that is, the setting of total allowable catches under section 13 of the Act.

In short, the bill addresses the problem identified by the court, and restores the ability of the Minister of Fisheries to set catch limits for all quota management system fish stocks. It introduces a new subsection (2A) into section 13 of the Act. The new provision restores the ability of the Minister to set sustainable catch limits for all fish stocks, and allows the management of fishing to continue as it has done in the past.

The Primary Production Committee reported the bill back to the House. Essentially, the committee agrees that the bill does what it set out to do, and that it is important to focus on this task alone. I acknowledge the amendments put forward by the Greens, but it was the view of the Committee and the House that the bill as reported back achieves what we set out to do—that is, to take a precautionary approach but allow enough flexibility for the Minister to set total allowable catches.

The bill contains provisions that will correct the deficiencies of the Fisheries Act 1996 identified by the High Court ruling, and allows the most important fisheries management decisions to be made in a timely manner, consistent with practice in recent years. That will restore the ability of the management system to fulfil the purpose of the Act, which is to provide for utilisation of fisheries resources while ensuring sustainability. I commend this bill to the House.

Hon DAVID CARTER (National) : National will support the Fisheries Act 1996 Amendment Bill (No 2). We also were happy to grant leave to Dr Cullen 5 or 10 minutes ago to change the Order Paper specifically so that this legislation and others could be enacted by 1 October this year. It is critical that this legislation be dealt with by the Primary Production Committee, passed through the House, and enacted by 1 October, so that we do not have any difficulties—or have fewer difficulties—with the setting of total allowable catches for the coming fishing season.

The fishing industry is intensely litigious. This legislation is before us today because of a decision made by Justice Miller in February 2008, when Antons Trawling Co. Ltd took a case against the Minister of Fisheries regarding his establishment of a total allowable catch for area 1 orange roughy. Antons Trawling challenged the establishment by the Minister of Fisheries, Jim Anderton, of a total allowable catch, and, on the basis of a ruling from Justice Miller that it was necessary to establish the maximum sustainable yield, the original quota decision of the Minister was overturned.

We now have about 629 species in the quota management system, and those total allowable catches are set annually—in many cases, without the information necessary to establish the maximum sustainable yield. Although the ruling by Justice Miller is, obviously, the strict interpretation of the original legislation, for a long period of time now the sustainable yield has been established on a variety of information. Clearly, the cost and complexity of having to establish total allowable catches based on only full information about the maximum sustainable yield would make it be impractical. National acknowledges that and is happy to support the legislation.

The Minister of Fisheries should have done a lot better for this industry. The original decision from Justice Miller came out in February of 2008. Mr Anderton sat on his hands, aware of that decision and of the difficulty of establishing total allowable catches from October this year. He then rushed legislation into Parliament on 11 August, and told the select committee that it had to report it back to the House by 22 August. The select committee did that; it reported it back by 22 August, and the bill has sat on the Order Paper for the last month, when we have had the ability to get it through Parliament. That is just typical of the Minister of Fisheries. He has been absolutely hopeless for this industry. He has never been interested in the portfolio, and, consequently, it is of little surprise to me that his relationship with the fishing industry is similar to the relationships that he has established with the farming industry and the forestry industry.

The Primary Production Committee received a number of submissions, and many of those submitters made points that were outside the scope of the bill. I am comforted by the fact that the Ministry of Fisheries acknowledged to the select committee that it intends to conduct a wider review of the Fisheries Act 1996. It is very complex legislation; it provides a ground-breaking mechanism for managing fisheries and fishing stock that is well regarded around the world, but it is not perfect. It is timely that a review be undertaken, and I hope that that review will find ways of addressing some of the submissions that came before the select committee.

It is with pleasure that National members support the legislation. It needs to be passed by 1 October. I certainly hope that, in setting fishing limits for the coming season—which starts on 1 October 2008—we do not then see too much litigation, with too many challenges from the industry to the Minister’s decision, which, after all, is about ensuring that we have a sustainable fishery into the future.

PITA PARAONE (NZ First) : Tēnā koe, Madam Assistant Speaker. New Zealand First, of course, supports the Fisheries Act 1996 Amendment Bill (No 2). We are indeed pleased about the fact that it is being passed at this stage, because that will then allow the Minister of Fisheries to start the process of issuing the various quotas that are required for the beginning of the fishing season, which starts on 1 October.

One of the things I note about this bill is that it came about because of a court action. Like the previous speaker, David Carter, I hope that as a consequence of this bill we will not see any further litigation in this regard.

The bill provides for a precautionary approach to be taken, and it is great that it is being passed at this time. This country has a resource that many other nations would like to have—I am not quite sure whether they would like to share it. But certainly we as a nation, because of the proximity of the various fish species and the importance they have to our economy, should ensure that, one, we have processes in place to protect that resource, and, two, we are able at the same time to get the maximum return and the maximum benefit from it not only for the people of New Zealand but for ourselves as a nation. With what seems to be the trend of entering into free-trade agreements, I suspect that the fishing industry will have a major input into increasing the benefits that such agreements provide for our nation.

In conclusion, I reaffirm that New Zealand First supports this bill.

• Bill read a third time.

Hon LIANNE DALZIEL (Minister of Commerce) : I move, That the Financial Service Providers (Registration and Dispute Resolution) Bill be now read a second time. This bill requires that all financial service providers must be registered with the New Zealand Companies Office, from banks right the way through to moneylenders, including the loan sharks that prey on vulnerable people. I know that in a previous debate we heard mention of a particular moneylender who was advertising rates at 8 percent, but only in the small print did we notice that that was 8 percent per week, not 8 percent per annum. These are the people who will now have the spotlight put upon them by the requirements to be registered. We will know who they are, we will know where they operate, and we will know what services they offer. The register will provide a very useful resource for consumers, the industry, and regulators, by providing a searchable access point for information on all financial service providers in New Zealand. The register will also enable New Zealand to meet certain of its anti - money-laundering obligations under the Financial Action Task Force’s requirements.

I am aware that the Opposition spokesperson on commerce may be somewhat surprised that we are dealing with this bill in the order that we are, so I think it is probably worthy of a slight diversion from my speech to say that one thing that had not been appreciated—something that I had overlooked myself—was that there are cross-references to the Financial Advisers Bill. For that bill to take effect in the time frame we want, we have to pass this bill pretty much at the same time, so that the cross referencing can take effect at the point that both bills are brought into—

Nathan Guy: It’s good you’ve got that organised.

Hon LIANNE DALZIEL: Yes, I apologise to the House if that has caused a problem. The bill also requires all financial service providers who provide a service to the public to belong to an approved dispute resolution scheme. Approved dispute resolution schemes will, hopefully, build on the existing industry-led dispute resolution schemes in the financial sector. I pay particular tribute both to the Banking Ombudsman and Insurance and Savings Ombudsman schemes, and to the organisations that have established them, because the banking sector and the insurance and savings sector have set up schemes well ahead of the Government’s requiring such schemes to be set up. I think the Banking Ombudsman scheme has been in place for something like 13 or 14 years. It is a tremendous resource and support for consumers of the banking industry, and the level of work that is done is considerable, given the complexity of some of the issues that have to be dealt with. The bill provides that the Minister of Consumer Affairs may approve industry-led schemes that meet the principles of accessibility, independence, fairness, accountability, efficiency, and effectiveness, as well as fulfil a number of operational and capability requirements.

Simon Power: No—make the Minister of Commerce do it!

Hon LIANNE DALZIEL: The very generous Opposition spokesperson on commerce suggests that it should be the Minister of Commerce who takes up that role, but in fact, the Banking Ombudsman and the Insurance and Savings Ombudsman, and the codes of practice they operate under, directly relate back to the Minister of Consumer Affairs, and it is the Minister of Consumer Affairs who has oversight in that area. Therefore it makes sense for consumer dispute resolutions services to sit with the Minister of Consumer Affairs—it just makes very good sense—and it enables the very good Minister of Commerce to get on with the job of dealing with the more detailed elements of the Review of Financial Products and Providers that are yet to come, because these bills are the first of several bills and maybe the member has forgotten that nine discussion documents resulted in the legislation we have now, and in future legislation to come.

The legislation will also establish a reserve scheme, so that financial service providers who are not members of an approved industry-led scheme will be able to meet registration requirements. One of the issues that came very, very clearly out of the Finance and Expenditure Committee was that there is very much a need for certainty for consumers, so that when they make an initial approach it is almost like a single entry point for any dispute resolution. I think we are going to be working very closely on the development of the regulations around the various schemes that will operate in this space, to make sure there are no wrong doors and that anyone who makes an inquiry in this area is able to get the assistance needed.

I will not go through the detail of the changes that were made at the select committee. Again, this select committee focused its attention very much on legislation that is detailed, but the committee probably did not have some of the more difficult elements of the preceding legislation. There was good support on both sides of the House to see this legislation pass through the House. I am not going to hold it up any further; I simply commend the bill to the House.

SIMON POWER (National—Rangitikei) : I was minding my own business in my office when I got the call that the Financial Service Providers (Registration and Dispute Resolution) Bill would be proceeding a couple of days ahead of time. That means my evening has now been altered beyond recognition. Nevertheless, that is a small price to pay for the continuation of this suite of legislation, which is designed to deal effectively with what has happened. It was not the intention to do this when the review of financial products and providers was first undertaken, but since that time a range of finance companies have collapsed, tens of thousands—if not more—of New Zealanders have been affected by the collapse of those finance companies and mortgage trusts, and literally billions of dollars have been put at risk as a result.

I have to concede to the House and to the Minister of Commerce that my attention over the last 12 months has been very much on the Reserve Bank of New Zealand Amendment Bill (No 3) and the Financial Advisers Bill. It is really Craig Foss who is the expert on the Financial Service Providers (Registration and Dispute Resolution) Bill. I myself was involved with another committee for much of the time that this bill was before the Finance and Expenditure Committee. I was effectively drafted on to the committee to deal with other bills, but I have to concede that this was not one of them. Having said that, I can say that this bill falls within my area of responsibility, and it is one of those bills that seeks to regulate the financial service providers in the same way that the Financial Advisers Bill does. I am sure that the Minister Lianne Dalziel is right when she says the two bills are joined at the hip, as it were, and that one cannot proceed effectively without the other. Therefore, being the flexible party that we are, here we stand ready to debate this legislation through all its stages—for the rest of the evening, I imagine.

This bill seeks to reinforce that suite of legislation that Doug Woolerton spoke about so eloquently during the day. It seeks to establish a registration system for those service providers. It requires—and that is an important word—them to join an approved industry-led dispute resolution scheme, or what the legislation and the Minister describe as the reserve scheme. As the Minister alluded to, we have already dealt with the Financial Advisers Bill and the Reserve Bank of New Zealand Amendment Bill (No 3), which dealt with the regulatory framework on—

The ASSISTANT SPEAKER (Hon Marian Hobbs): You have 2 minutes.

SIMON POWER: How can that be possible? I have just started. Madam Assistant Speaker, are you sure that you did not start me at the end of the Minister’s time?

The ASSISTANT SPEAKER (Hon Marian Hobbs): That is exactly what has happened. I duly apologise.

SIMON POWER: The Minister Lianne Dalziel and I have got on well in recent months, but this is getting ridiculous; I am not sharing a call with her!

The ASSISTANT SPEAKER (Hon Marian Hobbs): I apologise to you, profusely.

SIMON POWER: There is an election coming up—we have to differentiate on some issues! There are some things that the Minister and I do not agree on, and sharing calls in this House is probably one of them, unless the Minister wants me to answer the questions—but there are no question times left, so I cannot do that!

Clauses 5 and 6 determine the application of the legislation that defines those activities considered to be financial services. I presume that that is consistent with the suite of definitions that were offered in the financial advisers legislation considered earlier today. Importantly, clause 13 sets out the matters that disqualify a person from registering as a financial service provider, and is amended to specify the types of offences that would count as fraudulent or dishonest. That is an important qualification because it sets the legislation up in a way that makes it clear that there are legislative parameters rather than codes of conduct or industry understandings that relate to the registration process. I think that that degree of statutory rigour is required in this industry, given the recent events we have seen.

We know that the bill covers things like the deregistration of financial service providers and, indeed, the reregistration of financial providers. The bill establishes the register itself and outlines access rights to that register. The dispute resolution regime and scheme is also outlined. Interestingly, in the same way that the Commerce Amendment Bill did for decisions of the Commerce Commission on price setting, any decision of the registrar that is subject to an appeal remains in force. That brings some clarity to the process, and it provides some consistency with other legislation in this area that we have debated in recent days. The bill also sets out the number of schemes that are available for registration, the public access to information, and the rules of those schemes. It imposes duties to cooperate and to communicate in certain circumstances, and, of course, it requires the appointment of a reserve scheme from an established recognised dispute resolution service. I imagine there are good reasons for that requirement.

I believe that the House is unanimously supportive of the passage of this legislation—certainly, I have not had any indication up to this point that any party present intends to vote against it. Any legislation that is put in place to add rigour to the financial advice industry should be welcomed, but with the following rider—and it is the same qualification that I put forward in my third reading speech on the Financial Advisers Bill.

People who choose to invest their money in New Zealand should not form the view from the passing of this legislation that no risk accrues to those investment decisions. Ultimately, the Government has a role in providing a safer environment for investment by way of a sturdy, transparent, and accountable regulatory framework around those investment protocols. In the end, Governments cannot be vicariously liable in many situations, but they have a responsibility to provide mechanisms to people who wish to invest their moneys in order to ensure that those people are as safe as they possibly can be.

I probably have 4 minutes left on my call—

The ASSISTANT SPEAKER (Hon Marian Hobbs): You have 2 minutes left.

SIMON POWER: OK. I do not intend to labour this matter any further, other than to say that Craig Foss will also be taking a call on this bill. He is, as I said, the expert from the Opposition side of the House on the technical aspects of this legislation. He will have some comprehensive views to share with the House on the matter of the registration and the reserve schemes as they relate to the provisions of the legislation dealing with the registration, dispute resolution, and appeal processes. I will certainly be hanging around to listen to that discussion.

As we head into the Committee stage I suspect we will hear from a range of other members of Parliament on this side of the House. As I said during the debate on the Financial Advisers Bill, we are in no way attempting to delay or slow up the passage of this legislation. In fact, as I said endlessly during the debate on that bill, the Opposition has worked cooperatively with the Government on this suite of legislation and will continue to do so—although in a slightly surprised way—throughout the remaining stages of this legislation, which has come up a little earlier than we thought it would.

On that basis I will resume my seat and say to the House that no doubt Doug Woolerton will have plenty to offer on this subject matter. As a permanent member of the Finance and Expenditure Committee—which I am not—he has taken some interest in this issue. I am sure that Lindsay Tisch, although he is not on the select committee, will make a contribution that is worth listening to. But it is really Craig Foss whom we are looking to on the more complex and technical matters contained in this bill.

Hon Shane Jones: They want to hear from him in Flaxmere!

SIMON POWER: That is the former chairperson of the Finance and Expenditure Committee yelling out from over there. Perhaps he would like to take a call and express a view on these matters. I am waiting with some interest for Mr Foss to cover the technical aspects of clause 10, particularly in respect of the provisions relating to the licensed service offence. National will support the Financial Service Providers (Registration and Dispute Resolution) Bill through its second reading.

R DOUG WOOLERTON (NZ First) : New Zealand First is supporting the Financial Service Providers (Registration and Dispute Resolutions) Bill, which, I guess, is the disciplinary side of the Financial Advisers Bill. I will not be taking a long call. In fact, it will be for only a couple of minutes, because we have other business to get through before the House rises. Like all my New Zealand First colleagues, I am looking forward to fighting an exceptionally good election campaign, and to New Zealand First returning with increased numbers. We are keen to get on and not hold up the process.

I think we cannot have a registration process, as proposed in the Financial Advisers Bill, without some disciplinary procedures to go with it. This bill provides that. There is a fairly decent amount of industry involvement, so that these people will not be judged just by some cold, harsh people. They will have an involvement in the disciplining themselves. This legislation was intended to be light-handed so that we do not stifle entrepreneurial activity altogether in this country, and to give some surety to the public so they can have some confidence in the people who are giving them advice. For them to know that the advisers are subject to some disciplinary action just adds to that surety. That is all I want to say. We intend to sit here and support the bill to its conclusion, and to listen to the contributions of my colleagues. Thank you.

DAVE HEREORA (Labour) : I take this opportunity to speak in the second reading debate of the Financial Service Providers (Registration and Dispute Resolution) Bill. In doing so, I want to highlight some of the benefits for consumers that will occur following its enactment. The introduction of freely accessible dispute resolution for all consumers is not only something that is based on a moral principle; it is also a practical initiative that will increase confidence in the financial sector.

Currently, there are a large number of consumers who are using financial advisers and non-bank credit providers and who cannot access consumer dispute resolution. When consumers are in dispute with their financial provider, be it a mainstream bank or a local service, they can feel quite powerless and not sure where to turn. Under this bill, consumers who have a grievance with their financial service provider will always have somewhere they can go to get a fair hearing. The framework established by the bill supports the formation of industry-based dispute resolution schemes. These will be approved if they meet the benchmarks of accessibility, independence, fairness, accountability, efficiency, and effectiveness. Experience suggests that industry-led schemes are particularly flexible and responsive in addressing consumer complaints.

This bill represents a win-win situation for consumers. It provides a free service to assist with the resolution of disputes against financial service providers, and it incentivises providers to put in place good complaint resolution processes and to be more responsive to consumers. Consumers will be able to confront any unethical or sub-standard dealings from a provider, through challenging behaviours that do not meet acceptable practice. Consumers will help to raise the quality of financial services in New Zealand, and to that end I stand in support of the bill.

CRAIG FOSS (National—Tukituki) : Like earlier speakers and colleagues, I say the debate on the Financial Service Providers (Registration and Dispute Resolution) Bill is like déjà vu all over again. We debated the Financial Advisers Bill this morning, and, for the record, it was debated under urgency. It surprises me that we are under urgency on the Financial Service Providers (Registration and Dispute Resolution) Bill and that it is deemed to be more urgent than other bills. But I noted in the Minister’s speech the reason for moving this bill further up the Order Paper. She spoke about the cross-references between this bill and the Financial Advisers Bill, which we passed a few hours ago. When I was looking through the Financial Advisers Bill it occurred to me that there are a lot of cross-references, and in fact all the way through the process we have dealt with these bills in partnership. Anyway, we are now debating the second reading of the Financial Service Providers (Registration and Dispute Resolution) Bill.

An earlier speaker raised a concern that this legislation will come under the portfolio of the Minister of Consumer Affairs rather than that of the Minister of Commerce, and I missed the bit about the Banking Ombudsman’s recommendation. I think it was that it be put under consumer affairs and not commerce.

Hon Lianne Dalziel: It was preferred that it went under consumer affairs rather than commerce.

CRAIG FOSS: I thank the Minister for clarifying that point. I realise this is not the Committee stage of the bill, but it is all very friendly in here at the moment.

On looking through the bill I see some issues that I started to raise in the debate on the Financial Advisers Bill are also pertinent to this bill. There was a part in that bill where we talked about information sharing, and, of course, as the Minister earlier noted, this bill forms a suite of measures—not only the Reserve Bank of New Zealand Amendment Bill (No 3), the Financial Advisers Bill, and this Financial Service Providers (Registration and Dispute Resolution) Bill but also a raft of other bills. I think there were nine papers in total, all around money-laundering, etc. and a total review of all things financial in New Zealand. I think there are a few more discussion papers out there. That is good policy development, and we are happy about that. We have enjoyed being part of the process around this bill and helping to make it better legislation.

Earlier speakers have noted the events that have occurred subsequent to this bill appearing before the Finance and Expenditure Committee, which I think was on 9 February this year. The financial crisis around the world has become much tougher. It has hit home here in New Zealand much deeper and quicker than many people thought it would, but as we are part of the global financial system we will always be impacted on by what happens around the globe. The sad fact is that New Zealand, as a debtor nation, faces an increased interest premium that we have to pay, and as we are No. 22 in the OECD we are at the back of the queue, so any impacts and effects on economies around the world will be felt exponentially down here. Hopefully, a change of direction—a change of Government—will start to address that position.

I will look at just a few issues in the bill. There is a Supplementary Order Paper with this bill: Supplementary Order Paper 254 in the name of the Hon Lianne Dalziel. Again I give my apologies for missing this in my first speech, but around the not-for-profit organisations in the Financial Advisers Bill there was a bit of sneaking in the door, in that the only not-for-profit organisations that were originally to be covered were those that already had some contractual obligations or arrangements with the Ministry of Social Development. The Finance and Expenditure Committee in its wisdom did very well and turned that round, talking about not-for-profit budgetary advice institutions, etc. We had many, many submissions from such groups, and sometimes there were conflicting views, which we found somewhat curious at the time. The core argument was about the cost of compliance for those organisations, which may have annual budgets of only $25,000 or so. The cost of initial set-up here would have been quite onerous for them.

But I did note that the Minister had an amendment to the definition of a not-for-profit organisation in the Financial Advisers Bill. I have just glanced through Supplementary Order Paper 254, and although I may have missed something, I do not see any new change there to the definition of a not-for-profit organisation. Perhaps I am missing something, because, like previous speakers, I fully expected to debate this bill not tonight but perhaps tomorrow, so I have not gone through that Supplementary Order Paper. I am quite happy to be corrected, but I cannot see an amendment to that definition at the moment. Perhaps that issue may be addressed by officials or the Minister later on.

There is good consistency between the two bills, and again I say it would have been more consistent if we had debated this bill in conjunction with debating the Financial Advisers Bill earlier today. But much of the select committee’s work was about the consistency of definition and of process, given what I have just said about not-for-profit organisations, just to make sure the terminology we used was the same, there was no arbitrage between the two bills, and there was no opportunity for either bill to be exploited. Wherever possible across the select committee we did use the same definitions. We had the same discussions, and, in fact, submitters spoke to both bills. As my colleague Simon Power noted earlier, most of their energy was spent on the Financial Advisers Bill, and this service providers bill was just sitting to one side, important and pertinent though it is.

There is a reserve scheme for disputes resolution, which I find quite interesting. Basically, that is the backdrop scheme if organisations have not found themselves the time or got themselves organised to do it, but there is a very good point on page 11 of the commentary on the bill. It is again a credit to the select committee that the commentary notes that the disputes resolution body does not necessarily have to be a financial disputes resolution body, because the issues are about resolving and mediating disputes rather than financial disputes. That is a small and subtle change, and we took out just a couple of words along the way, but none the less it is a good change, because many people help to mediate or solve disputes in many fields. That is what they do, and a dispute is a dispute is a dispute, I would argue.

There is a very good clause in this bill—and again there is a similar provision in the Financial Advisers Bill and in the Reserve Bank Amendment Bill (No 3)—which is the 5-yearly review clause. Again I highlight the consistency and tie-up between those bills, and I presume any other bills that the next Government brings in will also be aligned to that time frame. I think that is very, very healthy. Again, that is because this bill and the Financial Advisers Bill are joined at the hip, and then I guess holding hands with the Reserve Bank of New Zealand Amendment Bill (No 3). But also I say it is not a bad process to bring in for all bills that they have an ongoing review clause in them, because, particularly in the area of financial markets, things change rapidly. What is being talked about in the headlines today was probably not even contemplated 4 or 5 years ago, or even 3 years ago. So who knows what will be happening in 5 years’ time, particularly with the globalisation of the financial markets, etc.?

I highlighted another point as to who must register. I spoke about the cost to the not-for-profit organisations, so I will probably just end on that note. Again, I say that we just found the amendment quite curious, and I understood the Minister’s explanation earlier as to why it happened. But I would be intrigued to have it pointed out to me where the amendment or definition of a not-for-profit in Supplementary Order Paper 254 is the same as, or aligns this bill with, the amendment on the Supplementary Order Paper in respect of the Financial Advisers Bill that we saw earlier on this morning. Thank you very much.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Kia ora, Madam Assistant Speaker. Kia ora tātou i te Whare. On behalf of the Māori Party I am happy to take a short call today on this “Let Us Nail Those Filthy Bloody Loan Sharks and Try To Stop Them From Ripping Off All The Poor People by Making Them Go Through Registration and Dispute Resolution Protocols Bill”, because I see the level of poverty being exacerbated by some of these vultures preying on poor Māori communities right throughout the country and, in particular, in my own area. I see that these companies are charging upwards of 450 percent for finance. I see families that are so pushed to the wall that they are taking out these quick loans just to pay for kai, and already, by the very next week, they are behind the eight ball. I see the way that these companies come into my home town of Kaitāia at Christmas time because they know of the massive pressure put on people to try to buy things for their families, and already those families do not have money. I see people coming out of pokie parlours, busted for the week, and trying to get some money so that they can go home and make out like they still have their benefit. I see these sorts of things happening and I am glad that somebody is at least trying to propose some kinds of protocols to keep these guys in line. I am glad, because poor people do not have the money—if they did, they would spend it on something else—to pay for lawyers to try to deal with some of these rip-off merchants that are preying on our communities.

I would like to see other things like being able to ensure that any time a loan shark company tried to come swinging through a town, it would have to ensure that there was sign-off from a budgeting service before a family was able to get access to that kind of money. I would like to see those people being banned from decile 1 communities, because those are the places they prey on. I would like to see a whole range of things, including some of these buggers being strung up. I would like to see them not getting on the front page of the Times of Tonga in South Auckland. I would like to see them not taking up the centre spread in some of the community newspapers in some of the poorer South Auckland communities, where they are ripping people off. I hope that some of them have gone to the wall over this financial crisis, and that the people who have loans out to them can just move a few houses down the road and get out of having to repay those loans.

If I speak with passion about this issue it is because if there is anything we can do in this country to help poor people get by, particularly at this time when money is so short and prices are rising so much and at such a rate, then the Māori Party, as members know, is a fan of it. That includes taking GST off food—we are just so surprised that the rest of the House does not go along with that great idea—raising the minimum wage to $15 an hour, and ensuring that anyone on an income of less than $25,000 does not need to be stung with tax. But if I bring it back to the bill, mihi atu ki te Minita e whakatakoto nei i tēnei kaupapa. I thank the Minister for laying down this first step in a long, long process of reining in some of these loan sharks. We look forward to doing better in future to ensure that people in desperate need will not be preyed on by these vultures in the years to come. Kia ora, Madam Assistant Speaker. Kia ora katoa.

CHRIS TREMAIN (National—Napier) : I just pick up where my colleague Hone Harawira left off, and I say to him that one does not have to be in Kaitāia to experience loan sharks. Electorate offices around this country, across the spectrum, have constituents coming in to see MPs, from both sides of the House, with regard to the issues they face with various loan-related difficulties they get themselves into.

It is interesting to note that it is probably not the loan sharks that Mr Harawira speaks about but more the actions of some of the high-profile companies that have brought about the legislative changes that are being proposed today. We were talking about a number of high-profile businesses that many people around this country have been on the tough end of. They are businesses like Provincial Finance, which has gone to the wall with some $300 million outstanding; Bridgecorp, at $459 million, which I spoke about earlier today; Nathans Finance, with $149 million; Capital + Merchant, at $187 million; Lombard Finance, at $127 million; Geneva, at $141 million; and MFS Boston, at $319 million.

These are huge dollars that we are talking about here—some $1.925 billion. I believe that it is not just the poor people of New Zealand who are suffering because of these finance companies but that a lot of people in middle New Zealand have also been in the gun in this respect. I am the first to stand up and say that not all these companies have gone to the wall for fraudulent activities—though some of them have and are still under investigation for matters before the courts in that regard. A number of them have gone to the wall due to the credit crunch and the difficulties they have found as their balance sheets have not been able to handle the run on funds, and they have had to close down the funds in the short term to protect other investors’ money.

The point I make is that there will always be risk in this market place. Business is about taking some risks and investing money is about taking risks. We will not get rid of risk entirely from the business scene, nor should we; that would be crazy. If we were to do that, then we would put a lid on our economy, and we would stop economic growth entirely, and without economic growth, none of us could stand on the rostrum and say that we will be able to put more money into certain areas. Economic growth is a driver, and finance companies are a key part of doing that.

Hon Darren Hughes: You’d borrow for tax cuts.

CHRIS TREMAIN: In fact, I have talked to a number of constituents, and I was out at Upper Hutt the other day—close to the member’s electorate of Ōtaki; across the road there. I was speaking to some property developers who have been big developers in Upper Hutt and have been big drivers of the economic growth in the community there. They have borrowed money largely from the banks, at about 65 percent, and second-tier finance companies, at about 30 percent to 35 percent, and they have put in maybe 10 percent of their own equity. The second-tier finance company has gone out of the mix now, so it is very difficult for these investors to get that second-tier finance. That is why we are seeing quite a slow down in investment in new property investments. That is a major issue for us.

In talking about the wider finance industry and the suite of bills we have seen before the House, I also mention the Reserve Bank of New Zealand Amendment Bill (No 3), which approves the prudential requirements around finance companies, making sure that their balance sheets are stronger and not leveraged as high, ensuring better control over second-tier, non-bank deposit takers, and giving the Reserve Bank the authority to get down to that second tier of finance companies as opposed to where it would normally regulate, with the banks at the top tier.

The second part of the suite of financial service bills is the Financial Advisers Bill, which we have debated at some length this morning. That has now passed through the House, bringing more regulation around those who seek to be financial advisers and lifting the benchmark there, and I think that that is definitely a good thing. Thirdly, today, we stand here now to debate the Financial Service Providers (Registration and Dispute Resolution) Bill. It requires all providers of finance services to be registered, and in order to be registered they have to be part of a dispute resolution service.

The Māori Party asked earlier why the two bills were not merged together. The key thing to note is that this bill has a much wider scope in that it requires a wider section of finance companies and banks to be registered under the public register, and to also be registered with a dispute resolution service in order for them to be registered.

I think that this suite of bills is a good step in the right direction. Once again, as my colleague Simon Power has said, we know that we will not take the risk out of the equation of investment in New Zealand, nor should we. That would be crazy. However, we must provide regulation at a level where consumers understand what they are letting themselves in for. We will put a high bar there, which is what we must do, and I think it is good to provide better consumer protection.

• Bill read a second time.

CHRIS TREMAIN (National—Napier) : Before I speak to the Financial Service Providers (Registration and Dispute Resolution) Bill I acknowledge the valedictory speeches of Mark Blumsky, Katherine Rich, and Clem Simich, who all set a very good tone in terms of their speeches, and who were not afraid to acknowledge their political opponents. They were excellent contributions to the House.

For the first part of my speech I will focus on clause 3, and then I will turn to clauses 5 and 6. Clause 3, “Overview”, provides the reasons why we are enacting this legislation. Members of the community who are listening to this speech will remember that three bills form part of a portfolio of legislation that has been put in place to provide greater protection for consumers. The Financial Service Providers (Registration and Dispute Resolution) Bill is the third of those bills. Clause 3 provides us with an overview and states: “This Act requires financial service providers to be registered.” So the bill forces all financial service providers to be registered, and it makes sure that they are all members of a disputes resolution service.

The key area where the Māori Party got a little bit confused between this bill and the Financial Advisers Bill was in the fact that this bill has a wider scope, and nowhere is that more confirmed than in clause 5, which defines the meaning of a financial service. It widens the scope of who will need to be part of the register and who will need to register with a dispute resolutions service. Clause 5 states that a financial service includes any service that has a financial adviser service, that acts as a deposit taker, that is a registered bank, that keeps, invests, administers, or manages money, that operates a money or value transfer service, and that issues and manages a means of payment—for example, credit and debit cards. Thus, one starts to get a feel for the fact that the scope of this Act is a lot wider than the scope of the Financial Advisers Bill.

Although the scope of this legislation will include a number of financial organisations, a number of them already have dispute resolution services that are set up and operating effectively. The officials thought that a couple of dispute resolution services were not operating effectively, but this legislation forces organisations to be registered and to be involved with a dispute resolutions service. If these organisations do not have one set up within their industry grouping, they will be forced under the legislation to join a reserve scheme. That is an important part of the bill.

I also want to focus on clause 6, “Application of Act”. What we tried to do here was to replicate the clauses that were in the Financial Advisers Bill so that those organisations that were exempted from that bill would also be exempted from this bill. Clause 6(2)(a) provides that lawyers and chartered accountants who were always exempted from the Financial Advisers Bill, pretty much from the word go, will remain exempted in this legislation, and will remain covered by their own legislation and their own disputes resolution services within their own professional bodies. In respect of clause 6(2)(ba), one group that lobbied quite hard to be excluded from the legislation was tax agents. They felt that they provided a similar service to that of chartered accountants, who had their own body and code of conduct, and who had their own disputes resolution service. Tax agents really felt they were being treated unfairly and separately from chartered accountants. I think that all of us on the Finance and Expenditure Committee—and certainly the Minister—thought it was wise to keep tax agents separate from the bill.

Interestingly, I have to declare a conflict of interest in respect of clause 6(2)(bb), as I have businesses in the real estate industry. Real estate agents have been exempted from this legislation largely because the advice they tend to give is secondary to the actual act of buying and selling a property, and also because they are covered by their own legislation. Now that there is a separate Real Estate Agents Authority there is a disputes resolution service for members of the public in those instances.

CRAIG FOSS (National—Tukituki) : I continue in the Committee stage here, but I would like to acknowledge the very good valedictories we enjoyed before from Mark Blumsky, Katherine Rich and Clem Simich. We will miss those members, not only in our caucus and in our party but also in the House.

I will concentrate on a couple of clauses. Clause 42 was of interest to me at the Finance and Expenditure Committee, and even as we have it now as new clause 42B. It is about the territorial scope of this bill. Again, it is one of those particular clauses that at the select committee we made sure was totally aligned with, and very much the same as, those in the Financial Advisers Bill. But at the select committee we had some interesting discussions about this one, and even towards the last minute I think it was being constantly improved. I just note that, because there are many theoretical examples in which people could fall outside this bill. Under the title “Territorial scope” the clause states: “This Act applies to the provision in New Zealand of a financial service by a person who is in New Zealand, regardless of where the financial service provider is resident, is incorporated, or carries on business.” We had a lot of discussions, actually, because we had the theoretical example of someone—as the bill was originally drafted—who could whip through Auckland airport and make a few phone calls, and we were not sure whether that person would be covered. So the provision has been tightened, but, again in this new clause, and in the same clause in the previous Financial Advisers Bill, it is a very difficult part, and almost a glaring hole in both bills. Although I am not offering a solution to it, I am identifying the problem.

This relates to the common theme of what I was speaking about earlier—the globalisation of everything. For example, we could make up an example right now: someone living overseas could offer an interest-free loan to people in New Zealand. If New Zealanders went offshore to solicit that money, or to get advice to get such funds, etc., took ownership of those funds outside of New Zealand, and then came back and in some way utilised those funds for themselves or others without getting advice, and if various regulatory bodies had problems with those particular transactions, then they would fall outside the gambit of this bill. The same applies for the Financial Advisers Bill.

I am not offering a solution to that. I do not think there is one, unless we tighten up our agreements with other jurisdictions. Some authorities are quite tight—Australia in places, and other places in Europe—and of course any dodgy activities happen in places that are commonly known as tax havens, or that have somewhat lower thresholds of regulatory integrity than we expect here in New Zealand. Sadly, there have been examples in the past. A while ago people from Thailand were calling down to New Zealand, offering to New Zealanders wonderful deals on equity trading and all sorts of commodity gains, and unfortunately some New Zealanders were taken in by the scams and sent funds to Thailand. Those people had no recourse whatsoever; there was no civil or legal recourse. Even under this bill there is no recourse whatsoever if a New Zealander transacts funds and sends them overseas to some unusual pyramid scheme or to what is basically a simple rip-off.

Again, I am not offering a solution to that but just identifying this practice as a potential problem, because those who are of a mind to exploit others and rip them off are also of a mind to look through regulations such as these, look for the holes, and find them. They could be New Zealanders deciding to transact from outside New Zealand, or they could be people pushing something down into New Zealand from an offshore entity with which New Zealand does not have strong arrangements. Unfortunately, we will probably see ongoing examples of that activity. Between now and earlier, when I spoke on the second reading of the bill, I note that I saw a headline going across the news wires that the FBI—a major regulatory body in the United States but not even a financial regulatory body—was reviewing the activities of Lehman Bros, Freddie Mac, and Fannie Mae, for potential or alleged mortgage fraud. That was very interesting.

I have a question to ask of the Minister concerning clause 62, which is under the heading “Annual reports and information requests by Minister”.The clause states: “The person responsible for an approved dispute resolution scheme must supply to the Minister, within 3 months after the end of the financial year applying to the scheme, an annual report containing prescribed information about the scheme …”. I ask about the time period, which is kind of touched on there. We see, by the words that were struck out by the committee, that we originally said the report had to be supplied “by 1 July each year, … in relation to the 12 months ending on 31 March in that year.” I ask the Minister whether the provision relates to the financial year of the particular scheme, because, of course, there can be many end dates for financial years—31 December, 31 March, 30 June, or even others. Because I see that the Minister has to report back to the House, I ask whether there would be any interest by the Minister to have reports presented all in one go. From the time of the first annual report back to a Minister—let us say 3 months after 31 December—to the potential last one, which is 3 months after 30 June and is therefore 30 September, one can see there is quite a long time between drinks—a long time between annual reports to the Minister. I would be interested in that explanation, because I see that that provision is sitting alongside the 5-year review of the scheme in relation to the robustness of the regulations we are putting in place tonight.

Finally, I tell the Committee that clause 59 relates to the obligation to publish rules about any approved dispute resolution scheme. I understand that the wording of this clause comes from other legislation, but something does not read quite correctly to me in subclause (b), which states that the rules must be published “on an Internet site in an electronic form that is publicly available (at all reasonable times).” Well, first of all, “on an Internet site” means that it is electronic; it cannot be anything but electronic. And I would just like to question what is meant by “at all reasonable times”. Reasonable time for one entity, for the Minister, or for the public can mean many different things. I fully realise that the common-sense test there is about being available all the time. The net is wide open somewhere 24/7, and back-up sites are available, so most sites, particularly for these financial services, are cached somewhere and are available 24/7. It is not the availability on the Internet site that would be the problem; it would be a power cut or something like that. But the rules would still be available on a site somewhere in the world. That is just a little bit of a quirk, and I wonder whether the Minister had thought about that or whether there had been any advice on that. Otherwise, I will just leave it on the Table as something to consider. Thank you.

CHRIS TREMAIN (National—Napier) : I rise to continue where I left off previously, which is on clause 6, “Application of Act”. I made the point, when debating the Financial Advisers Bill, about non-profit organisations and their exclusion now from the Act. New Zealanders will be interested to know that initially non-profit organisations’ budget services were part of a dragnet inclusion in the Financial Advisers Bill, and there was a debate about whether they would be included in this Financial Service Providers (Registration and Dispute Resolution) Bill as well. Now we have reached the point where we have excluded them specifically, which is good.

That is a point that New Zealanders need to be careful of, and it comes very much to the fore in terms of where National is at with its wider economic policy. Our five principal policies cover ongoing reduction in personal taxation, a real focus on education, looking at the line-by-line item of Government expenditure, making sure there is value for money in everything that is delivered through the Government, and investment in infrastructure to try to promote growth in our economy so that we can actually deliver additional services to the people of New Zealand on an ongoing basis. But a real driver for us is that fifth point around that sort of creeping bureaucracy that we see, and that we so often are questioned about by people in New Zealand who say we talk about bureaucracy and its impact on New Zealanders, but ask what we are actually talking about. What we are talking about is reflected in new paragraph (cd) of clause 6(2), which excludes from the Act non-profit organisations that provide free financial services. Initially they were included in the Financial Advisers Bill, and were potentially part of this financial service providers bill. That meant that voluntary organisations providing free financial services around the country were going to be potentially included, and would certainly be included in the Financial Advisers Bill, with the raft of additional regulation that was going to be wrapped around them. That meant their members would have to become accredited, registered, and have ongoing professional development. There were all sorts of varying costs around doing that.

We are not talking about people who are advising mums and dads who have earned $300,000 and are looking to invest their life-savings for their retirement. We are talking about volunteers in our communities who are looking after those who have fallen on tough times and who maybe are on a benefit and have only a couple of hundred dollars a week to go on. Some of those people, whom Mr Harawira was talking about earlier, struggle with their budgets big time. They need some help. They need to know that $50 is going on clothing, that $120 is going towards their rent, or whatever, and they need budget advice. The problem with this creeping regulation in clause 6(2)(cd) is that it has the potential to exclude many of those people, and for them to walk away from providing those voluntary services. Quite frankly, that is just crazy. We need those people in our community.

Those members of the community, who put their hand up day after day, and who put in their own time, do not expect one cent from the help they give. Sure, they might not be qualified accountants, they might not be qualified budget advisers, but by heck do they deliver a service to our community! Every day they go out there; they have people come to them, and those people value the service they receive. We cannot afford to let the legislation that we draft down here in Wellington bog down and capture these people in a dragnet, wrap bureaucracy around them, and wrap compliance costs around them to keep them out. It is very good that we have reached this point now. So non-profit organisations will be exempt from this legislation; they will not be wrapped up in it, and that is good.

I move on to Part 2 in terms of registration and the purpose of Part 2. It is to “establish a compulsory public register of financial service providers …”. A compulsory register will be developed. It will be an online register, which is documented in Subpart 4 where it talks specifically about the register of service providers. Clauses 23 and 24 in particular deal with that. It will be an online service, similar to the service run by the Companies Office, and it will be run by the Ministry of Economic Development, I understand. I am hoping that this service will be as straightforward as the online service provided for the registration of companies around the country. That service is world leading; I stand here and acknowledge that. The Companies Office online service for the provision of registration for companies is world leading, and acknowledged as such. One can log on to that service very easily, one can register one’s company, directors, and start-up capital, and one can very quickly walk away with a company. It looks as though the Inland Revenue Department will now provide the department’s tax numbers together with that information, as well.

I just hope that the service for the online registration of financial service providers in this bill will be as efficient as the service provided by the Inland Revenue Department, and that it can facilitate the easy provision of registration to make sure that we capture the necessary information.

That is all I would say at this point in time, Mr Chairman; thank you very much for this opportunity.

• The question was put that the amendments set out on Supplementary Order Paper 254 in the name of the Hon Lianne Dalziel and the following amendment in her name to clause 66, be agreed to:

to omit from subclause (4) “subsection (3)(c)” and substitute “subsection (3A)(c)”.

• Amendments agreed to.

• Clauses 1 to 75, and schedules 1 and 2, as amended agreed to.

• Bill reported with amendment.

• Report adopted.

Hon CHRIS CARTER (Minister of Education) : I move, That the Education Amendment Bill (No 3) be now read a first time. At the appropriate time I intend to move that the Education Amendment Bill (No 3) be considered by the Education and Science Committee. This bill does two important things. It implements a number of policy changes to improve accountability for student attendance and engagement at school and to make early childhood education services and schools safer for children and students.

The Government wants to support young people to stay in school, complete their qualifications, and identify the opportunities available to them once they leave school. This bill underpins this focus by making school responsibilities for managing student attendance more explicit. It sets out the minimum steps that a school board of trustees must ensure are taken to ensure school attendance, including taking action when students are absent without reason or justification. More and more, schools are searching for opportunities to provide individual learning programmes for their students and to link them with potential destinations beyond school. The $40 million Schools Plus package, announced by the Prime Minister at Massey High School last week, enables schools to offer new options for secondary students in 2009, with further decisions to be announced next year as we further develop Schools Plus. The bill also ensures that students get good guidance on career choices and pathways. Students will stay at school until at least the age of 16, and boards of trustees will get greater clarity about their roles and responsibilities.

The bill also strengthens students’ safety in early childhood education services and schools. New measures will improve and streamline the current provisions for police vetting of all non-teaching staff, contractors, and volunteers who may have unsupervised access to children as part of their role. We are also taking the opportunity to reduce the compliance burden on early childhood services and schools, so instead of applying through the New Zealand Teachers Council for a police vet, early childhood education services and schools will directly apply to the New Zealand Police. The bill also provides for information matching between the Ministry of Education and the New Zealand Teachers Council to identify those who are teaching in schools without registration, and for the Teachers Council Disciplinary Tribunal to suspend teachers for more than the current limit of 3 months, if needed, where potential serious misconduct is being investigated, while the matter is being resolved.

Other amendments in the Education Amendment Bill (No 3) will enhance the effective governance of schools. The timing of boards of trustees elections will be moved from term one, which is the busiest time of the year for schools, to later in the year. Establishment boards will be allowed to establish more than one new school, and the education Minister will have greater discretion to approve alternative constitutions for school boards. Several other measures in the bill are of a remedial nature and correct a number of unintended consequences of the current law, including the retrospective validation following an imperfect change of proprietor in an integrated school and removing the need for an Order in Council to authorise the continuing payment of teachers’ salaries through the central resourcing system. Finally, the bill introduces a small number of technical and minor remedial amendments. These include clarifying certain definitions, validating Crown payments to integrated schools, and correcting drafting errors.

Taken together, the measures contained in the bill serve to strengthen the education system so it can better respond to the different learning aspirations of students and better support improved educational outcomes for all of our students. I commend the first reading of the Education Amendment Bill (No 3) to the House.

ANNE TOLLEY (National—East Coast) : I rise to speak on behalf of National to the Education Amendment Bill (No 3). I read in the general policy statement of the explanatory note of the bill, which the Minister of Education, Chris Carter, has just spoken to, that the purpose of the bill is “to enhance student safety in both the early childhood and compulsory sectors; and improve accountability for student attendance and engagement …”. The last sentence of that general policy statement states: “These changes will help to modernise and improve education legislation.” If that is the case, it is a very dark day for education in this country as we know it. It is a very dark day, because, typically, the current Minister has over-inflated exactly what this bill will do.

This bill has no vision whatsoever for education in the 21st century. There is no substance to this bill but a whole lot of rules and regulations. It reflects a socialist agenda reaching out to claw back control from schools and communities and to put in place central control over how our schools are run. In the last week of Parliament we get a bill on education, and, like the Minister, the bill is going nowhere. National is not supporting this Education Amendment Bill (No 3) as introduced to the House.

The Minister stood in this House and said he and Labour want to support young people in school to gain skills and to learn. But the bill and this reheated policy called Schools Plus—which is actually all about the 2002 Mayors Task Force for Jobs policy, which has been pumped up and given a catchy new name—show that this Government has no idea about how to keep and support young people in school so that they can develop some skills and get some qualifications. The bill shows that the Government really does not know what to do. Instead of the Government putting some real support behind the many principals out there who are doing amazing, innovative things with kids, who are enthusiastic, dedicated, and, what is more, very successful, despite the meagre resources that this Government is making available to them, and instead of the Government getting in behind those principals and asking what it can do to help them keep those kids in schools, what do we have? We have a bill that is full of rules and regulations telling those principals exactly what they can do, but, more important, what they cannot do. That is Labour’s answer to everything.

So let us look at what the bill is all about. We have police vetting. That has been dressed up as trying to keep our kids safe in the school environment, and we all want to do that. But because this bill has been rushed into the House without any consultation, to show that this Minister, who has done nothing for 12 months, has finally got off his chuff and done something—

Hon Shane Jones: Widely supported.

ANNE TOLLEY: By whom? Here is a press release from the New Zealand Playcentre Federation that states that 11,000 volunteers at playcentres alone would need to be checked. We know that the Labour Party does not care about the parents of playcentre kids, because it would not even include them in its 20 hours early childhood education policy. It would not even include them in that. It does not think that parents who take their kids to playcentre are worth supporting—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Politics, as we all know, is the art of the possible, and the possible we will explore today is good order. I refer the colleagues on my right to Speakers’ ruling 57/3.

ANNE TOLLEY: The Playcentre Federation has stated that its whole existence is placed at jeopardy by this bill because of the very rushed nature and non-consultative manner in which it was brought to the House. This is a draconian set of regulations. The New Zealand Educational Institute—a great favourite with this Labour Government—is also concerned that the measures being introduced to Parliament regarding police vetting could seriously impact on community and family involvement in schools and centres. So we have a draconian set of rules and regulations that will change the very nature of parental involvement with children’s education at a time when the Government is saying it wants to do all it can to support students to stay in school to gain more skills and to learn more.

The information-matching programme is the piece of the legislation that we have all been waiting for, for 12 months. I was on the Education and Science Committee, and I know that the Teachers Council has been asking for this legislation for more than a year. The Minister promised that it was coming. We simply do not know how many unregistered and unauthorised teachers are out there in our classrooms around the country. Why is that important? Well, it is important because there is such a shortage of teachers. In fact, last year more teachers left their profession than had done over the last few years. Teachers are leaving their profession in droves. Schools are really strapped to get replacement teachers, and they are being forced to take teachers who may not be registered or authorised. So data matching is the important piece of this legislation, and it should have come to the House well over 12 months ago.

Let us talk about early-leaving exemptions. Two years ago anyone could leave. It was easy to get an early-leaving exemption. A bit of heat is put on the Government, it goes right the other way, and it is now getting rid of all leaving exemptions. What a load of rubbish! There has been absolutely no consultation with schools. Principals up and down the country are saying: “What! Where did this come from?”. The Secondary Principals Association president, Peter Gall, said that some pupils who have been exempted from school have mental health problems, but most were “chronic truants whose fit with school just wasn’t right.” We in the National Party understand. We understand, like most Kiwis out there, that for some students—just a small number of them—alternative non-school options meet their needs better. Those alternatives meet not just the needs of those individuals but also the needs of the rest of their classmates and the teachers whom they share their classrooms with. So not putting in place early-leaving exemptions is a complete flip-flop by this Government, and it will have quite perverse outcomes from those that it wants to achieve.

I have here a letter that my colleague the Hon Bill English received from the parent of a child. That parent was trying to get an early-leaving exemption for his daughter to leave high school to begin a hairdressing apprenticeship in January 2009, when she will be 15¾ years old. She is a good student, does not have any problems at school, and therefore does not fit the current criteria for an exemption. If the bill comes into place she will not be able to leave at all until she is 16. How ridiculous it is to stop a child from leaving school to take up an apprenticeship for hairdressing, which will give her a good career. Under the current criteria she cannot get an early-leaving exemption, but we can appeal to the Minister for an exemption; under this legislation she will not be able to leave at all. That just does not make sense.

That brings me finally to the legislation around what boards of trustees can and cannot do. Why on earth do we have to put that into legislation? The Tomorrow’s Schools programme has now been working for 18 years. It has been working without any legislative detail on what the responsibilities of a board are. The Education Review Office considers that 60 percent of boards are governing well, and that only 7 percent are struggling to achieve good governance. Where is the rationale for suddenly putting into legislation the requirements of a board of trustees? I am talking about the requirements around what boards can do, what they must do, what they are allowed to do, and what they can ask the Minister or Cabinet for permission to do.

I suspect that this is not actually about boards of trustees. It is the dark hand of socialism reaching into schools and saying that Tomorrow’s Schools gave too much power to communities; it gave too much power to parents to decide what was right for their children in terms of their children’s education in their children’s schools. This legislation is reaching out to pull that back, because this Government believes that only it and the Ministry of Education here in Wellington know what is right for those children. I am reminded of Yes, Minister and that magnificent saying that the Government knows best. That sums up what this Labour Government is about. It cannot trust parents. It cannot trust communities. The Government knows best.

DAIL JONES (NZ First) : I have read the Education Amendment Bill (No 3), and I can say that the speech that Anne Tolley has just given bears no relationship to what is actually in the bill. The member created a speech, and she has been determined to give it, come what may, at some stage during the latter part of this year. Tonight seemed to be the time to do it. But what she has just said has no relationship to what is in the bill. I am absolutely astonished that the National Party is prepared to allow people who are not vetted to have unsupervised access to young and little children. That is what this member would allow to happen by opposing this bill.

This bill is about the safety of children under 5—student safety in the early childhood and compulsory sectors—and the vetting of the people in charge of those children. The National Party says that anyone can be in charge of those children, regardless of what his or her criminal record may be. Essentially, Anne Tolley is saying that she is not interested in the criminal record of someone who is in charge of a child under 5. She is voting against legislation that says that Parliament wants to make sure people supervising young children are vetted by the police. Surely that is a fundamental point. We do it in every other area of the community; why should we not do it for the early childhood sector?

Of course, the issue in respect of playcentres has to be considered carefully. They have been around for a long time. We know the care and concern that parents have for children in playcentres. But the situation today in New Zealand is unsatisfactory. People with criminal records get involved in these areas for one unsavoury reason, and the National Party is opposing legislation that will ensure that there can be vetting of these people. I really do not believe it, but I guess I have to. That is the level to which the National Party has reduced itself today.

On the question of accountability for student attendance and engagement in the compulsory sector, Anne Tolley goes on and on about truancy levels in schools, and this bill makes a slight adjustment and improvement in this area, yet that National Party member, who is asking for something like this to happen, opposes it now that it is happening, even though in a minor way. How can we win with some people?

Hone Harawira: You can’t.

DAIL JONES: I agree with Mr Harawira. Gosh, we have agreed for once! It is good to see that I can agree with Mr Harawira from the Māori Party. I say to Mr Harawira that we have to watch this, as people might start talking.

Hone Harawira: No chance!

DAIL JONES: Ha, ha!

This bill makes largely technical amendments. We have just heard a dramatic speech from Anne Tolley about socialism in the administration of school boards. Clearly, she has never read the Education Act 1989 or the provisions with regard to boards of trustees. She has never read the schedule of the Act that sets out the controls and the constitutions for boards of trustees, how elections are to be held, and suchlike. They are extensive. On occasions, I as a lawyer have helped school boards of trustees with administering elections and suchlike. All those provisions are there already. This bill gives an option as to how that type of control can be exercised. It increases the opportunities that a school has as to the way in which the existing measures can be carried out. It does not reduce the options; it increases them. It gives more possibilities to a board of trustees in terms of how it can carry out some of its requirements. The bill does not limit the boards; it increases the opportunities they have.

I have one question to ask the National Party. We have this bill. What is the National Party’s policy on education?

Anne Tolley: You’ll see.

DAIL JONES: The National spokesperson on education says we will see. Well, we are just over a month out from the election, yet the National Party still does not have a policy on education. How can the National Party be critical of anyone else’s policy when it does not have a policy of its own, other than to oppose simple legislation of a technical nature? Just because the legislation was introduced by Labour, the National spokesperson believes that it has to be wrong, and she has given a speech that has no relationship to this bill, whatsoever.

I would have loved to see a bill introduced that introduces a non-repayable student allowance—a universal student allowance, which is New Zealand First policy—but, of course, that might have forced the National Party to say whether it had a policy on that. As we know, it does not support a universal student allowance. That is just an aside, and I must move on.

As I see it, this bill is straightforward legislation. It deals with various administrative matters. There is nothing awesome about it, other than the need to protect our children. For example, clause 26 inserts new section 78C, “Police vetting of persons with unsupervised access to students at school”. I want police vetting of people with unsupervised access to students at school. National does not want that; National is quite happy for there to be no vetting of persons with unsupervised access to students at school. New sections 78CA to 78CC set out when a police vet must be obtained, they set out procedures relating to police vets, and they also provide for an exemption. Some vetting-exempted agencies are identified by a Gazette notice. So it is a very broad-ranging bill in that respect.

I am absolutely staggered that National is moving away from a strong law and order policy. We saw that in the Law and Order Committee in respect of legislation relating to Wanganui and tattoos, the Wanganui District Council (Prohibition of Gang Insignia) Bill. We saw that National members did not support the Wanganui District Council. We know that National is weak on law and order, and that has been confirmed yet again tonight.

The bill also provides technical amendments with regard to the matching of register information and information about payment of teachers’ salaries at payrolled schools. How can one possibly oppose legislation as technical as that? If there is a drafting error, it will be picked up by the Education and Science Committee, and we will consider what it says. The National Party wants to oppose a bill that includes the matching of register information and information about payment of teachers’ salaries at payrolled schools. I would have thought that those provisions would improve the situation of the teaching profession. New Zealand First wants the standards and conditions of the teaching profession to improve. The National Party obviously does not want the standards and conditions of the teaching profession to improve. That is why it is opposing this legislation.

The bill also includes, in clauses 50 to 53, provisions regarding the duration of interim suspension, investigations by a complaints assessment committee of reports of convictions, complaints about competence, and the requirement that the Teachers Council must coordinate police vetting. What is controversial or difficult about this legislation? National even opposes a provision relating to the transfer of land.

This is straightforward legislation, largely of a technical nature. It ensures the protection of young people who are in a situation where there is unsupervised access to them, which is clearly defined in clause 77, “Interpretation”. The definition of “vetting-exempted agency” is set out there, and I am sure the Education and Science Committee, when it considers this legislation, will have no difficulty working with Playcentre to make sure that its concerns are well noted, that steps are taken to make sure that the children concerned are always supervised, and that any problems with regard to unsupervised access are taken care of.

I understand that one of the worst paedophile cases reported