Hon SIMON POWER (Minister of Justice) : Part 1 deals with preliminary matters, as is normally the case in bills such as this one. The bill as reported back now explicitly describes in the purpose clause the Government’s intention that the private sector and public sector cooperate in the implementation and operation of the bill’s regime.

I will draw attention very briefly to the interpretation clause and the changes made to it by the Foreign Affairs, Defence and Trade Committee. The committee inserted clause 3A, “Overview”, which is consistent with the advice of the Legislation Advisory Committee. The committee also reviewed and refined a number of the definitions in the interpretation clause to eliminate any confusion or misconceptions about the scope of definitions, such as what should be considered an occasional transaction.

One important amendment is the addition of clause 4A. This clause eliminates any doubt that reporting entities may have about whether other services they offer are captured by the requirements of the bill. For example, the bill is not intended to capture the restaurant or hotel services of a casino operator. Clause 4A clearly puts these additional services outside the span of the bill.

As was referred to in many of the second reading speeches, the committee also amended the definition of “politically exposed person” in order to exempt New Zealanders holding prominent public functions. As I mentioned in my second reading speech, enhanced scrutiny of domestic politically exposed persons is not a strict requirement of the Financial Action Task Force.

Hon TREVOR MALLARD (Labour—Hutt South) : I wonder why the Government has decided to bring this up. We went out with this legislation as we went into the adjournment. We had a long discussion about politically exposed people. We had quite a lot of focus at that time on Bill English, and I am sure that there will be more focus on Bill English as we work our way through not only the interpretation but also the rest of this legislation.

Since that time Melissa Lee has become a politically exposed person as well. I will be interested to know, as will my colleagues who sat on the Foreign Affairs, Defence and Trade Committee, whether Melissa Lee was there under the original interpretation of the legislation. I think that the Government has moved in a smart way to try to exclude her from this Anti-Money Laundering and Countering Financing of Terrorism Bill through the amendments made by the select committee, and I am not very happy with some of my colleagues on this side of the Chamber who let the Government get away with it. I want to know from the Minister in the chair, the Hon Simon Power, why those changes were made.

I think that we need to look at paragraph (c) of the definition of “politically exposed person” in the interpretation clause, clause 4. The paragraph states “having regard to information that is public or readily available,—(i) any individual who is known to have joint beneficial ownership of a legal entity or legal arrangement, or any other close relationship, with a person referred to …”. So I wonder whom that would refer to. I wonder whether the bill as introduced would refer to the circumstances of Bill English, and whether he has a beneficial interest, albeit a beneficial interest that is discretionary. It is a discretionary beneficial interest that Bill English has in this area. I want to know whether that was something that the Minister carefully considered as he worked through this bill and the amendments that were put to him.

Did the issue concern the discretionary beneficial interest that Bill English had in the additional funding that he was getting from the taxpayer, over and above what he was entitled to, as someone who is normally resident in Wellington? Was the reason this bill was narrowed an attempt to take Bill English out of it? If the discretionary beneficial interest that Bill English had was not the reason for the narrowing of the bill, then I want to know what was. If it was not to cover up the rorts, to stop the money being laundered through trusts in a way to hide it, then what was the reason for the change? We have heard nothing about that from members opposite.

I also want to know about the Melissa Lee situation, and about the money that was going through not a trust but a company. In the bill as introduced, that member would have come under paragraph (d) of the definition of “politically exposed person”, but that provision has been cut out by the select committee. I want to know why Melissa Lee has been protected in that way. Why was it that this money that Melissa Lee has known about since July, or 12 June—

Hon Steve Chadwick: June.

Hon TREVOR MALLARD: Since 12 June Melissa Lee has known that she has ripped money off the taxpayer. She has known this for 4 months but did not pay it back. She had that additional money in her laundry for 4 months. I am not suggesting that she was laundering money for terrorism, but what was she laundering money for? Why was she keeping it hidden from the public view? Why was she not fronting up?

I want to know whether Melissa Lee has declared an interest in this bill. Has Bill English declared an interest in this bill? Bill English is certainly caught under the definition of “politically exposed person” in the bill as introduced. He is someone who is politically exposed. He is very, very politically exposed—partly to us but mainly to members opposite.

The CHAIRPERSON (Hon Rick Barker): Just before I call John Hayes, I draw members’ attention to Speaker’s ruling 108/5: “Members must focus on the wording of the bill, on the intention in this bill, and not focus on alternatives that are not part of this bill.” I just draw members’ attention to the fact that what has been done before is not the focus of the debate.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. I want to ask you whether it is permissible to debate in the Committee stage whether it is appropriate to revert to the bill as introduced as an amendment with alternative wording to that which is currently before the Committee. I submit to you that it is quite within the realms of the Committee to put forward, and pass, an amendment to have the bill reinstated in the way that the Minister originally brought it to the House, and if to do that is within the competence of the Committee, then to suggest that it is done is also within the competence of the Committee.

The CHAIRPERSON (Hon Rick Barker): I just remind the member that if there was an amendment on the floor of the Chamber to that effect, the member could then start to construct that argument. But as I understand it there is not an amendment on the floor of the Chamber to that effect. The member will appreciate that I did not call for order at the time that he mentioned it, because I accept that the Committee is entitled to fair and broad-ranging debate. But I draw members’ attention to the fact that when we are in Committee we are focusing on the wording of the bill and on the intention of the bill, and not on alternatives that are not part of the bill. Words that have now been struck out are not part of the bill. As I said, we like to have a fair debate. Members are entitled to nudge against things but not make it the focus of their presentation.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Chairperson. Again, I am vaguely apologising for doing this, but my view is that your saying that people can debate amendments only when they have been tabled is a new ruling. For as long as I have been a member of the House members have indicated their intention to table amendments or the possibility of amendments being tabled. Very, very specifically in this area, I say that if it is the wish of the Committee for the Labour Opposition to table some amendments, and to withdraw them later or not to withdraw them later, then we can do that. My submission to you—and because you are my friend and colleague I do this with some reluctance—is that the ruling that you are making is without precedent. I have certainly never seen it in the time that I have been a member. In the past people have often discussed the changes and the subtleties that have occurred at the select committee and the effect that that has had on a particular clause of the bill, and they have discussed whether that has been a good thing or a bad thing. I think that to rule that out would be something that is very new.

PAUL QUINN (National) : In my view the member killed his own argument. He spoke about the intention to introduce an amendment or the possibility of introducing an amendment—those were his words. In this case he gave us a diatribe of why the wording had been cut out, and he chastised his own members on the select committee for allowing it to be cut out. I submit that that is not the same thing that he tried to say, which related to the prospect of moving an amendment.

The CHAIRPERSON (Hon Rick Barker): I do not want to carry this on. Without taking the varnish off the matter, I say that if the member reflects on this issue and reads his Hansard, he will see that his speech was more appropriate to a general debate on Wednesday afternoon after 5 o’clock. His speech was getting on to issues that were well beyond the scope of the bill. I have said to the member that I will not rule out entirely the matters that he raised, and I have made that point. But I would be concerned if those matters became the sole part of the presentation on parts of this bill. I just draw the member’s attention to what the House has decided by way of Standing Order 292(1): “A committee of the whole House considers a bill to determine whether the bill properly incorporates the principles or objects of the bill as read a second time by the House.” That being the case, the Speakers’ rulings are quite clear. We are here to discuss the bill, not to discuss what it had been or what it might have been. If a member wants to provide an amendment, he or she can do that, but that member must talk to the amendment. That is what members must do.

JOHN HAYES (National—Wairarapa) : The last 5 minutes have been a great example of the saying that a little knowledge is a dangerous thing. I would have thought that it would have been helpful to the Committee if the member opposite—experienced as he is, given that he is a former Minister—had taken the time to speak to his colleagues on the Foreign Affairs, Defence and Trade Committee about this issue before he came into the Chamber.

The reason why the select committee members took the action they did, and I have to say that we were absolutely united in making our decision, was that we judged that there were sufficient checks and balances in the New Zealand system—including audits, company requirements in legislation, and a whole raft of other obligations on people who are engaged in business and in politics—to render totally unnecessary the sorts of changes that Mr Mallard was talking about.

Furthermore, I report to the House that we have something like 55,000 names of politically exposed persons—

Hon Clayton Cosgrove: Not me.

JOHN HAYES: —including Mr Cosgrove and me. All members of this House and their relatives are already on lists that are held commercially and used by each one of our banks. The suggestions that Mr Mallard is floating are absolutely unnecessary. I support the bill in its present form. Thank you.

Hon PETE HODGSON (Labour—Dunedin North) : I am aware that an amendment has been tabled in the name of the Hon Trevor Mallard to remove four words from the definition of “politically exposed person”. Those words are: “in any overseas country”. The effect of that amendment as proposed by Trevor Mallard would, in essence, be to return the Anti-Money Laundering and Countering Financing of Terrorism Bill to the state it was in as introduced in respect of politically exposed persons.

I oppose the amendment of the Hon Trevor Mallard. I have come to the view that the amendment does not take us forward, and I will lay out to the Committee why that might be. The situation in respect of politically exposed persons was looked at carefully by the select committee, and a number of matters were brought to bear. We looked carefully at the issue of trust and how it may apply to domestically politically exposed persons. We came to the view that because of the existence of a thing called a discretionary trust, it was rather too easy for a domestically politically exposed person to sneak through that particular proposition. It was unknown to us at that time that the Deputy Prime Minister of the land had a discretionary trust in his part of his family trust, which proves the point—I think rather well—that it is not difficult at all for a smart person to sneak through legislation. Therefore, being prescriptive about the legislation may not be the best thing to do.

The second thing is that amending the politically exposed persons lists as proposed by the Hon Trevor Mallard means, for example, that members of the executive of a nation would come under some sort of scrutiny. Members of the executive of this country would come under some sort of scrutiny, but backbenchers would not. People who headed State-owned enterprises would be caught; people who headed district health boards would not. And on it went. Where was the list going to stop? What was so good about a positive list? We threw out that idea of politically exposed persons partly on that basis, as well.

So we come to the issue that Trevor Mallard speaks of in respect of Melissa Lee, who is not a member of the executive but a mere backbencher. We did not give ourselves false comfort that by leaving the domestically politically exposed persons provisions in the legislation, we would somehow be better protected. That idea is given lie to by the fact that Melissa Lee has, in recent times, been determined to have owed $100,000 or thereabouts to NZ On Air, specifically because she moved it from one part of the company’s accounts to another.

That leads me to another point. That is not laundering, because the money has not left the company yet. It becomes laundering at the point when the money leaves one company and moves to another. This was pre-laundering. It was what one might call the “soak” phase. It was the phase where the enzyme stain remover was applied and the laundry had not begun. It follows like night after day that when a company is successful because things have moved from one line item to another—inappropriately, as we now discover—sooner or later laundering might follow and the start switch might get pressed. But this Melissa Lee example is pre-laundering, and it will not be caught by this legislation, although it is true to say that it would never be of benefit to an individual until laundering had taken place.

So for a range of reasons I think the amendment put forward by the Hon Trevor Mallard falls short of the ideal. We have a couple of really good instances in front of us. They are both unfortunate. We used them to demonstrate that the advent of a loophole in the form of a discretionary trust means that seeking the beneficiaries of a trust, which is a requirement of this legislation, cannot work where that trust is a discretionary trust, because the beneficiaries have not been described. The idea of who will be a beneficiary and who will not is discretionary. It cannot be detailed with any particularity.

Secondly, in respect of a positive list, the question immediately arises as to who is missing from that list. Whether it is a district health board chief or a backbencher does not really matter. The point of the story is that the best way to maintain an appropriate supervision of politically exposed persons is to be vigilant in general and not vigilant in particular. The best way this country can keep its high state of transparency, with the very excellent reputation it has against any form of corruption, is to be vigilant generally, not to be specific and say we are looking only at these people and only at the beneficiaries of a trust, etc.

That is the essence of my opposition to the amendment tabled by the Hon Trevor Mallard. I am not even sure that it should go to the vote. My view is that the legislation as reported back from the select committee is in a much better form than that which was introduced. Although I understand the debate put forward by the Hon Trevor Mallard, it is the same debate that we had within the committee for a long time, and that was our resolution.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I concur with my colleague the Hon Pete Hodgson, but on a different aspect of the Anti-Money Laundering and Countering Financing of Terrorism Bill. When we look at the bill that has come from the Foreign Affairs, Defence and Trade Committee, we see it is indeed in better shape than when it went to the committee. I would be grateful if the Minister in the chair, the Hon Simon Power, would perhaps report back to us or let us know why that is, and whether he took his eye off the ball. I note that the committee said that the bill as introduced did not give sufficient emphasis to a risk-based framework for countering money-laundering and the financing of terrorism, and that it had amended it substantially. I am not quite sure whether the Minister may be busy and, unlike some of his colleagues—Mr Brownlee and company—may have taken his eye off the ball.

The Minister will recall that his predecessors who had some stewardship of, and relationship to, this bill embarked on a costing of the legislation. We wanted to give the private sector the assurance that we were taking a precise and risk-based approach to it, that the department was not putting an extra zero on the invoice and trying to “Rolls-Royce” it, and that we were attempting, especially with the monitoring regime, to meet our international obligations in an appropriate way to ensure that we countered money-laundering in any aspect, but that we were not ramping it up like some other jurisdictions have perhaps done by creating new departments and by putting in a lot of cost, which is ultimately passed on to the private sector and to customers. That seems to have been lost in the transition from the bill being authored by the Minister to it being referred to the select committee.

Under one of the Minister’s predecessors, the previous Labour Government got Deloitte to do an independent costing of the proposals that were being put forward. As I said, that was to give the private sector a level of comfort that we were meeting our obligations, but that we were doing so in the most efficient and cost-effective way possible, bearing in mind that even in doing that, there is a substantial cost related to this legislation, which banks in particular and other institutions will have to deal with. I wonder whether the Minister could take another call and tell us what happened to the quality control process in the time between the bill being launched off his desk and it finding its way to the select committee.

I think the select committee has done a very good job in requiring some more precision in respect of the bill’s aims and objectives. Likewise, in terms of the purpose and overview clauses in the bill, I turn to the point that the select committee made when it recommended inserting an overview clause, new clause 3A, to set out in plain English the contents of the bill. The obligations in the bill are complex, but again I ask what happened to the quality control. This bill will affect a large number of stakeholders. I ask the Minister again whether his eye was off the ball, because it is helpful and preferable to draft modern legislation—the Minister is a lawyer; I am not—in a way that is as clear and as user-friendly as possible, even given the constraints of parliamentary counsel around the language that is used. That is necessary so that those who read the legislation and those who have to implement it can see precisely what the aims and objectives are and what their obligations are. So I ask the Minister what happened. What happened between the work that was done by the officials and the legislation that was put in front of us?

A lot of work was done by the officials—I acknowledge them. Originally it was put to the officials that the framework around this legislation was good, but where were the costings? They then had to go away and have a wee look at what was going on. The officials did agree with me at the time that we should engage Deloitte—that we go out into the market place to have the propositions that now form part of this legislation tested independently. This Government, over a whole series of policy platforms, shrinks absolutely from that precedent. Whether it be—not to digress from this bill—the issue of private prisons, whether it be cuts to various Government services, or whether it be propositions around accident compensation, there is a reluctance, unlike the previous Government, to have those propositions tested by independent organisations, like Deloitte. That is what we did in respect of this legislation under my stewardship. We did so because there has always been an accusation when these kinds of international obligations are being implemented by—to be fair—any Government of the day that certain departments try to say it is a great grab bag: a great opportunity to load up the budget for a series of different purposes that they may perhaps see value in, but that business may not, and, at the end of the day, Ministers may not.

So we broke the mould somewhat. I invite the Minister to take a call and indicate whether he may do the same as we did in relation to other things that he is proposing in his portfolio. As I said, we engaged independent consultants, in the form of Deloitte, to go out and challenge our own thinking and our own proposals. The request that I put to them was simply this: given that we have to meet our international obligations, why can we not do that in a least-cost manner, or with the least burden to the private sector?

I recall—I may have brought this up with the Minister before—that I said to the banks that we did not want to create different levels of obligation. The banks put a very interesting proposition to me. They said that if we were to go to a lower level of obligation than, perhaps, our Australian counterparts, we would actually increase the compliance costs. The banks are set up in Australia, which is ahead of us in terms of its legislation, for a number of reasons. The banks said that even if we tried to establish a cheaper proposition for the banks here, that in itself may create an additional compliance cost, because even a cheaper option would require some systems adjustments. But we wanted to give the private sector confidence that we were not simply putting up a proposition to meet international obligations holus-bolus, and we were not going to write our own bill with whatever obligations we thought we should meet that the private sector, and ultimately the customer or the client down the chain, would have to pay for. We did engage Deloitte and it did come up with a substantial report, and that informed our thinking. Also, I believe it engendered a high degree of confidence within the private sector.

I say again to the Minister that I think that is a good thing to do. I wonder why—without digressing from this bill—his colleagues do not test the propositions that they are putting forward regarding accident compensation. Some say the propositions are spurious, some say they are wrong, and some say they are downright deceitful. The way to alleviate that concern is to ask an independent third party like Deloitte or PricewaterhouseCoopers, or whoever it may be, to go and test the Government’s propositions and the Minister’s ideas. If they stack up, then we would have an independent agency with no axe to grind providing some ammunition, I suppose, for the Government. But, equally, if the propositions are bunkum, if they are simply smoke and mirrors, and if they are simply designed to put fear and panic into folk, then that would be exposed by an independent third party with no axe to grind. I am pleased that the Minister, at least when he was the Opposition spokesperson, I think, supported Deloitte coming in and having a look at the propositions in this bill. Well, he says he was benign to the whole issue.

The National Government campaigned on the basis of providing the most efficient solutions for business. We put this issue to Deloitte, but again I say to the Minister that I wonder whether his colleagues will do the same on other issues. I wonder whether his colleagues the Minister of Corrections, the Hon Judith Collins, or the Minister for ACC, the Hon Dr Nick Smith, will do the same as we did. If they believe in the robustness of their arguments, I ask what the problem is. They should put the propositions out to an independent third party, have them costed, roll the dice, and see how they go. But I sense there is a reluctance on the part of this Government to do that. It talked fast and tough before the election about providing least-cost options to business, but I note that over a whole series of portfolios it is very reluctant to have its propositions and its theses tested by anybody other than its own officials, whom, of course, it can control. It can tell them what to say and they are required to follow the Government line of the day; that is the professionalism of the public servant. But, oh, no, this Government is very, very reluctant to have third parties examine, at the very least, the cost-effective nature of the propositions it is putting forward.

I ask the Minister again to take a short call. I hope he will tell us why the wheels went off the rails, and why the bill went from his desk to a select committee when it was so imprecise and unclear that the select committee had to put a bit of plain English into it in order to explain to the folk who will have to use the legislation what it means.

JACQUI DEAN (National—Waitaki) : I move, That the question be now put.

Hon PETE HODGSON (Labour—Dunedin North) : I raise a point of order, Mr Chairperson. It was a matter of courtesy to let the Government take the call, because the Opposition took two calls in a row, and, indeed, the speaker before that was another Opposition speaker. We have plenty more to say on this bill. If the matter is one of whether we have challenged the chair sufficiently, then I guess we are guilty. But the fact of the matter is that we thought that the member who has just resumed her seat, Jacqui Dean, wanted to make a contribution. She is on the select committee; it was her turn.

The CHAIRPERSON (Hon Rick Barker): The member makes a fair point. I was considering accepting the motion simply because I did not think the Opposition was interested in taking any more calls. If the Opposition members are interested in having some more calls, then in the interest of debate the Opposition had better start to call. Do I have any bidders?

Hon CHRIS CARTER (Labour—Te Atatū) : I rise to make my first contribution to the debate on the Anti-Money Laundering and Countering Financing of Terrorism Bill in the Committee stage. I am a member of the Foreign Affairs, Defence and Trade Committee. In fact, I am the senior Labour member on that committee, and I am really pleased to make a contribution.

I begin my contribution by praising John Hayes, the chairman of the Foreign Affairs, Defence and Trade Committee. John and I, of course, have our political differences, but I want to tell the Minister in the chair, Simon Power, that Mr Hayes acted in a very non-partisan way during the process of this legislation.

Mr Hayes was receptive to Opposition suggestions, and he was very accommodating to experts from the banking sector. He worked particularly closely with my colleague, the Hon Pete Hodgson, who, in my view, made a first-class contribution as an Opposition member of the select committee. Pete Hodgson is a master of detail—I guess that is because of his scientific training—and he really focused the whole select committee’s attention on the details of this bill, and especially on the processes of working with the banking industry on this piece of legislation, which I am proud to say was introduced by the previous Labour Government.

My colleague the Hon Lianne Dalziel was a driving force in getting this issue dealt with. It is an important national issue. We are faced with the spectre of global terrorism as well as with the efforts of organised crime to launder illicit funds through the global financial systems of the world. New Zealand and Australian banks, with their fine reputation for honesty and stability, along with being away from the financial centres of Europe and North America, have been a target, an opportunity for international criminals to launder funds through our system.

In our confidential briefings from the police we were told that this is, in fact, a real issue within the South Pacific. There have been significant issues in Vanuatu and elsewhere where illegal funds have been moved globally and money has been washed through financial systems, including New Zealand’s. This legislation will go a long way to putting in better systems to ensure that that does not happen.

Sadly, we also have a global political framework whereby different groups, be they in South Asia—Sri Lanka comes immediately to mind—the Middle East, within the Russian Federation, or elsewhere have moved funds to finance global terrorism. As part of the global community we must make an effort to make sure that our financial systems are not used for this illicit activity. All of that sounds fine. Nobody would disagree that we must have more robust and effective systems. Indeed, we have global obligations to make sure that our systems are up to scratch and that they address these issues, which are so important.

The Financial Action Task Force has been looking at how effectively we can do this, but that then comes down to the practical issues that the Foreign Affairs, Defence and Trade Committee struggled with. How do we make these noble intentions actually work within our banking system, so that we do not place too onerous a financial burden on banks and so that we have effective systems? Particularly in the context of our close economic relationship with our largest market and closest neighbour, Australia, our systems need to be in sync with the Australian systems.

I have to say that it was quite a laborious process for the select committee to ensure that this legislation fitted as closely as possible with the Australian system and that the banking sector was comfortable with what we were doing, because we will be relying on that sector to make it work. Through a process of negotiation we set up a group of banking experts, who came in on a regular basis to look at the legislation. They moved through it carefully. At times they came up with suggestions that we took on board, and on other occasions they made suggestions that we felt were not appropriate. The consideration of the bill provided one of the best examples I have seen in my 12 years as an MP of the select committee process and of a cross-party opportunity where people worked really well together.

Hon PETE HODGSON (Labour—Dunedin North) : I want to make some initial comments about clause 3A. If I recall correctly, the original idea came from the Legislation Advisory Committee. If it did not, then it came from the chairman of the Foreign Affairs, Defence and Trade Committee, John Hayes; and, if it did, then it was the chairman, John Hayes, who picked it up and ran it through. What that provision does—it is called an overview, in the chapeau—is tell the reader, I think in something getting pretty close to plain English, what the bill is about, and that is not a bad thing for us to adopt as a legislative practice. It takes us through, in a page and a half, something that would have been the early part of the explanatory note when the bill was introduced. Therefore, the question that arises is whether in the future we will, as a nation, get into the habit of having an explanatory note in legislation. I know that there is a possibility of lawyers claiming that because it is part of New Zealand law, they can therefore take a look at the explanatory note, or the overview, and determine that therefore it means that clause 16 in Part 2, or something or other, means something other than what it says it means. I know that there is danger in that, but the benefit is that for someone like me who does not have a law degree, and does not read law easily—my brain does not read law easily—this part is pretty meritorious.

I wonder whether the Minister in the chair, the Hon Simon Power, who happens to be the Minister of Justice, might like to indicate to us whether he thinks it is good drafting practice for us to take an overview clause, like clause 3A, and make it something more than the routine we have at the moment.

Needless to say, my second contribution to this legislation has to be about the issue of politically exposed persons. I think my colleague the Hon Trevor Mallard has made a grave mistake. I think my colleague the Hon Trevor Mallard should be invited to withdraw his amendment. He certainly has good intentions in putting the amendment forward. Indeed, the bill as introduced was exactly what the Hon Trevor Mallard would now have it be. But I think my colleague the Hon Trevor Mallard was not party to the select committee hearings. He was not party to an exploration of how these things were managed in Australia. He was not party to an exploration of how these things are done in other jurisdictions—such as Britain, Canada, the US, and so on—and, as a result, I think he is the poorer for it.

I would like to say briefly, in order to bring my beloved colleague the Hon Trevor Mallard up to speed, that we run the risk of giving ourselves false comfort if we think that by delineating a certain number of domestically politically exposed persons we are therefore able to take a lighter or easier approach to people who are not on that list. Furthermore, we need to take into account the fact that politically exposed persons are as likely as anyone else who is laundering money to try a bunch of falsehoods in order to achieve that laundering, whether it is just making one’s trust a discretionary trust so that there can be no see-through to who the beneficiaries are—and the legislation allows for that see-through, for that piercing of the veil, if one likes, of a trust—or whether it is the issue that if a person is not on a list, somehow he or she cannot be at risk. Either of those options might lull us into a sense of false security that we have the issue of the politically exposed person covered when, I think, demonstrably we do not.

The two issues in front of this House over recent weeks, involving the Deputy Prime Minister of this country, and involving a backbencher, Melissa Lee, draw specific attention to how it is that one can be lulled into a false sense of security. Neither of those issues would be caught if the Hon Trevor Mallard’s amendment were to be put and were to pass. In the case of the Deputy Prime Minister, it is because he has chosen the vehicle of a discretionary trust. In the case of Melissa Lee, it is because she is not a member of the executive. So let us not be lulled into a sense of false security on the basis that we might have a nice, positive list, in the bill as introduced, of politically exposed persons and therefore we need not bother, because we have two instances involving two members of this House, neither of whom would be caught if the Hon Trevor Mallard’s amendment were put and passed. And that is the point; it is general vigilance, not particular vigilance, that matters. It is an overview that matters, and not a degree of particularity. It is a culture of supervision that matters, not the names and addresses of these named and addressed people.

Of course, there are other reasons why a politically exposed domestic person would be a difficult one to cover, and that is that the legislation as introduced said we needed to cover the wives of such people, or their husbands, or their spouses in general, including their de facto partners. It also included the children of that politically exposed person, including, presumably, the children of the de facto partner of the politically exposed person. Nobody knows that list, so we were kidding ourselves that we could have known it.

When the honourable chairman of the select committee made his brief remarks he pointed out that commercially there are available internationally lists of thousands of people who may or may not be suss. No doubt those lists will be altered every day. They are used by financial institutions now. There is no doubt that New Zealanders are on that list, either because they are thought to be suspect or because they are politically exposed. There is no doubt that that list is in use and contains the names of New Zealanders now. The view that the chairman came to, and the view that I came to, is that such a list and such an approach is the more viable way of keeping a degree of vigilance, and that it is not appropriate for us to give ourselves the conceit that we have this thing covered by a particularly narrow approach to politically exposed persons domestically.

For that reason I shall be voting against the amendment in the name of the Hon Trevor Mallard when it is put. I think it is a bad amendment. I think it is one that was put up with the best of intentions and that it does mimic precisely the bill as introduced. It is not that the Hon Trevor Mallard has made some foolish suggestion; it is just that with the benefit of examination and the benefit of international experience or international comparison, we think we have a better way forward. For that reason I think the amendment in the name of the Hon Trevor Mallard should be resoundingly defeated.

• The question was put that the following amendment in the name of the Hon Trevor Mallard to clause 4 be agreed to:

to omit from paragraph (a) of the definition of “politically exposed person”, “in any overseas country”.

• Amendment not agreed to.

• Part 1 agreed to.

Hon SIMON POWER (Minister of Justice) : It is worth making a few introductory remarks in respect of Part 2. I will not be making any further remarks about Part 2 other than those matters that I am about to share with the Committee.

Effectively, Part 2 sets out the obligations that will be imposed on reporting entities and the new requirements for the cross-border transportation of cash. The intention of the bill is that reporting entities will take a risk-based approach to their anti - money-laundering and countering of terrorism obligations, and this is the part of the bill that enables that to happen. Part 2 is large. It has six subparts, and there have been a number of changes to note in Subpart 1, which requires reporting entities to satisfy themselves that customers are who they say they are and that their financial transactions are legitimate. Simply put, this process is known as customer due diligence, and the bill sets out different levels of customer due diligence depending on the type of customer, the nature or circumstances of the transaction, and, broadly speaking, the level of risk that is involved in that transaction.

The changes to the bill’s customer due diligence requirements recognise some of the operational difficulties and unnecessary costs in conducting customer due diligence on low-risk existing customers. The changes also recognise that it would be difficult for reporting entities to be required to identify a customer as a politically exposed person at the point of first contact. The changes also give reporting entities discretion around verification requirements. Subpart 2 contains the detail on the reporting of suspicious transactions. It is through those reports that financial institutions and casinos will be providing the police with intelligence on possible criminal activities. There are no important changes to note in that subpart.

Hon Trevor Mallard: The Department of Internal Affairs is involved, and Ministerial Services.

Hon SIMON POWER: I say to Mr Mallard that we should not start talking about individuals who have been or are in Parliament in that regard.

Subpart 3 sets out the requirements for a reporting entity to keep relevant records. There are no important changes to note in that subpart. Subpart 4 concerns reporting entities’ internal policies and procedures. It requires reporting entities to have programmes for detecting and managing the risk of money-laundering and the financing of terrorism, to carry out risk assessments, and to review, audit, and report on risk assessments. There are no important changes to note in that subpart.

Subpart 5 provides for the preparation, approval, and publication of codes of practice. The inclusion of codes of practice is a way to provide regulatory certainty. Again, there are no real important changes in that regard. Subpart 6 replaces the cross-border transportation of cash regime in the Financial Transactions Reporting Act to include unaccompanied cash, as well as bearer negotiable instruments such as traveller’s cheques. Again, there are no important changes.

I will respond to one remark made by Mr Hodgson in respect of Part 1, and I seek the Committee’s indulgence in that regard. Had he heard my preliminary remarks in respect of Part 1, he would have heard me note the contribution that new clause 3A makes to this legislation.

Hon PETE HODGSON (Labour—Dunedin North) : Mr Chairman, I was happy for my colleague Jackie Dean to take the next call on the Anti-Money Laundering and Countering Financing of Terrorism Bill—and I am sure she will.

I will give a serious contribution to Part 2, and it will not take particularly long. Part 2 is the guts of the bill, and, regrettably, the politics are not brilliant, although I sure my colleague the Hon Trevor Mallard will be able to give the lie to that. Part 2 is where the major changes occur, other than to the definition of “politically exposed person”. In essence, in terms of this part, members of the Foreign Affairs, Defence and Trade Committee believe we took out a huge number of costs, got rid of what the chairman called “bureaucracy central”, and returned it to something closer to, we think, a risk-management approach, and this was the part about which most but not all of the discussion between officials and the banking advisers took place.

It is worth putting on the record again that the banking adviser people from the New Zealand Bankers’ Association are not with us, but officials are. I want to place on the record the fact that although we initially got ourselves into quite a sticky position where some of us were pretty frustrated with the legislation as introduced, the process by which it was resolved in the select committee was a tribute to all involved. And that certainly includes—in fact, it is pretty much limited to—the banking association and the officials who served the committee. They got down, got talking, and got negotiating, and they were solution-oriented instead of problem-oriented, and that gave us the majority of the changes in the legislation.

I give members an example. If someone from Zimbabwe—or someone from the North Island, who is therefore a bit on the suss side to a South Islander—walks into a bank, and if there are politically exposed person questions about the person, then the bank does not have to fix that up and satisfy itself then and there. The bank can do that on day two, and that means that the transaction can take place. Of course, the records of the person will have been made available, and the records will be checked in back-office activities the following day, but to have that person—suspected of being but almost certainly not a money-launderer—waiting in a long queue at a bank was a bad idea.

In a simplistic way, I am trying to give the Committee some idea of what a risk management approach looks like. I conclude my remarks by saying again that I think those who were involved in getting down and sorting out the clauses and subclauses into what we have now did a very fine job, and they ought to be thanked.

JACQUI DEAN (National—Waitaki) : Part 2 of the Anti-Money Laundering and Countering Financing of Terrorism Bill describes the requirements and compliance with the legislation as proposed. The critical part for the Foreign Affairs, Defence and Trade Committee was around customer due diligence. The concern expressed by a number of submitters was that the bill as introduced was perhaps overly prescriptive, although it would be fair to say that the intention of the bill was well described and very clear. It was the job of the select committee to work through the specific issues, and, together with the input of members of the banking industry, the bill that came out of the select committee better reflects the realities of customer due diligence requirements on behalf of the banking sector.

Part 2 of the bill describes standard customer due diligence. It also describes the circumstances under which banks and financial institutions might be able to utilise simplified customer due diligence. That would be for customers with a relationship with the bank and, again, enhances customer due diligence. A number of other subparts to this part of the bill include Subpart 2, “Suspicious Transaction Reports”, and requirements around that; requirements around record-keeping on behalf of financial institutions; and compliance with anti - money-laundering and countering financing of terrorism requirements. There are also codes of practices and requirements around cross-border transportation of cash. Part 2 of this bill is quite lengthy and goes into detail on the compliance requirements around the intention of this bill.

Hon TREVOR MALLARD (Labour—Hutt South) : I am pleased that we have got to Part 2 of the Anti-Money Laundering and Countering Financing of Terrorism Bill, which is the substantive part of the bill. I found it interesting to look through the bill when we dealt with it before the adjournment last month, during the adjournment, and subsequently today. I have a series of questions for the Minister as to how Part 2 applies and where it is appropriate.

I note that one of the entities with responsibility for reporting suspicious transactions is the Department of Internal Affairs. I think all members are aware that the Department of Internal Affairs is the organisation that is responsible for Ministerial Services. I want to know how much of a responsibility the department has, and where within the department the responsibility lies for reporting suspicious transactions that involve Ministerial Services. I would appreciate an answer on that.

I see that under clause 9, “Customer due diligence”, due diligence must be conducted on “any beneficial owner of a customer”. I want to know whether the Endeavour Trust is a customer of the department and of Ministerial Services. I think it is important that we find out whether the Endeavour Trust is in fact a customer, because if it is, the next question would be about beneficial ownership. I think it is interesting that this bill concerns that—and “bill” is the appropriate word in this case; there are a number of bills involved in this: there is the legislative bill, there is Bill English, and there is the unpaid bill for a decade of cash—and I want to know whether the beneficial owner under clause 9(1)(b) is a direct beneficial owner of a customer or is someone with a discretionary beneficial interest in a customer, where that customer is a trust. It would be good to work through that.

Clause 12 talks about reporting entities and their establishment of business relationships with new customers, and particularly, in paragraph (e), about when, in relation to an existing customer, there is a change in the level of risk involved. That is stated under subparagraph (i), for example, as being where “there has been a material change in the nature or purpose of the business relationship;”. I want to know whether, in the particular case where a trust goes from being the owner of a house for which an allowance is paid to being in an arrangement whereby that trust leases a house to the Crown, that is regarded as being a material change in the nature or purpose of the business.

Hon Pete Hodgson: Very good question.

Hon TREVOR MALLARD: My colleague, Pete Hodgson, says he thinks there is a material change in the nature and the purpose of the business relationship. What I then want to know is how that is caught under this legislation, and whether, in anticipation of this legislation, the Secretary for Internal Affairs has issued the appropriate notices with regard to the Endeavour Trust.

Moving through the bill, I jump—I know that within this part we are allowed to go back and forward, and it is my intention to do that during the debate on the bill—now to clause 20, “Circumstances when enhanced customer due diligence applies”. Subclause (1)(aa) states that due diligence applies “if the reporting entity establishes a business relationship with a customer that is—(i) a trust or another vehicle for holding personal assets:”. I would have thought that not many cases were clearer than that of Bill English, where the Endeavour Trust is an organisation for the holding of personal assets. I want to know what triggers that. Is the trigger the setting up of the trust, is it the development of the relationship between the trust and other organisations, or is it particular commercial transactions?

I now go to clause 23, which is a completely new clause, on politically exposed persons. It is a rewrite of the legislation. I can accept that the Foreign Affairs, Defence and Trade Committee had a look at this area, and for reasons that I do not think have been very well explained by my colleagues some changes have been made to the bill. I am willing to hear over a period of time their explanations for the changes that have been made. I want to know what the relationship is between this legislation and overseas legislation. I understand that the relationship is going to be sorted out at a conference, and there will be an attempt to pass this bill in time to follow a particular timetable. So I ask whether this legislation has been shared with overseas jurisdictions, and if it has been—for example, if this legislation applied in Australia, and if the Australian legislation was the same as this—whether Bill English would be deemed to be a politically exposed person when he leaves the country.

We have worked it out that there is an attempt in this legislation, and in the changes made in the select committee, to take out people who are currently Ministers from automatically being deemed to be politically exposed people. But that does not apply to people from other jurisdictions, and I want to know whether, if people have been involved in activity that results in enhanced customer due diligence where there are suspicious transactions—as in the case of the Auditor-General versus Bill English at the moment—and if they travel overseas, this legislation is triggered for them in those jurisdictions. If it is triggered in other jurisdictions, I want to know whether there is a reciprocal arrangement whereby it is triggered in this jurisdiction, as well.

I now turn to organisations that have quite an international background, and I will speak in particular about the financing by the New Zealand Government of organisations that appear to be involved in fraudulent activities. These are organisations that have inflated their costs and inflated their overheads, and that have over a period of several years presented false invoices to the New Zealand Government and received payment on the basis of them. I refer, in this, to a television company—one that produces a programme called Asia Downunder. I understand there is one shareholder in that organisation, and that person is a member of Parliament. Is there more than one shareholder?

Hon Member: I don’t know—no, I think you’re probably right.

Hon TREVOR MALLARD: I think it is one shareholder. We are then left with a question where we have an international organisation, but its ownership is in New Zealand. The organisation has basically accepted that over a period of years it has presented fraudulent invoices to the New Zealand Government and, unfortunately, been paid out on those invoices.

As a former Minister of Broadcasting, I say I am ashamed about that. It now appears that while I was the Minister of Broadcasting, NZ On Air was paying out on fraudulent invoices from Melissa Lee’s company. I think that on occasions I was accused of being a micro-manager, and of looking too carefully—

Hon Parekura Horomia: That’s right. That’s right.

Hon TREVOR MALLARD: Well, I know that Te Māngai Pāho thought I was a micro-manager. It was not particularly happy with me on a number of occasions when I was the Minister of Broadcasting, for taking too close an interest in the activities of Te Māngai Pāho. I note that Māori Television, when it is let off the leash for at least a period of time, seems to have some more flexibility these days.

I now go back to the question of Melissa Lee and the money that her company has received fraudulently as a result of a series of invoices that her company presented to New Zealand On Air. She now accepts that these invoices were fraudulent, inflated, and bloated, and she accepts that there is a six-figure, I think, sum to be repaid. But I want to know whether that money, while it is in her possession, is regarded as being, in effect, in a laundry.

Hon Pete Hodgson: I think it’s in the soak phase.

Hon TREVOR MALLARD: It is in the soap phase? No, I do not think it is soap. I think the National Government’s handling of this might be described as a soap, but my view is that there is nothing clean about this at all, and I regard soap as generally—

Hon Pete Hodgson: Soak—s-o-a-k.

Hon TREVOR MALLARD: Oh, the word is soak. I thought the member was putting soap into the laundry. I see; it is in the soak phase. I thought it was one of those soap holes that all the dirty stuff goes down after it has been through the laundry. I thought that was what the member was referring to.

But I want to know at what stage Melissa Lee is caught in this particular area. Is she caught when she admits there is a problem? Was she caught back on 14 June—

Hon Gerry Brownlee: Where’s the relevance to the bill?

Hon TREVOR MALLARD: This is very clearly relevant to the bill. If the member would like to get a copy of it, I will point out to him the particular clauses. I would probably start at clause 4A, and if the member Melissa Lee took the money offshore, as I sure she has on occasions, there is clause 5. The conduct of due diligence is in the first part of clause 9(4). There are a lot of areas where there is particular relevance to the activities of Asia Vision and what it is doing with particular large amounts of cash. I want to know, for example, whether a material change such as someone shifting from what was previously the role of a full-time executive director to that of a part-time executive director, and becoming a member of Parliament as well, is a material change that triggers this particular legislation. I am happy to take the word of the Minister in this area, but it is important and it has to be sorted through.

Again the question of whether this is a reciprocal arrangement is something that is subject to further interrogation over a period of time. I still do not understand, and my colleagues have still not explained to me, why, if Melissa Lee travels to Hong Kong or Seoul she is caught by this legislation, but if she stays at home she is not. We seem to have a higher standard of behaviour for overseas politicians who come to New Zealand than for New Zealand politicians who stay here, and to me that is illogical. Why is it that Melissa Lee can stay at home, not go overseas, and not be caught by the money-laundering legislation, but that a Korean politician who does in Korea exactly what Melissa Lee is doing here in New Zealand will get caught by it if he or she then comes to New Zealand? I generally have a lot of faith in my colleagues and in the work that they do in select committees, but I cannot see why they have provided this escape path.

We have three investigations going now. We have the Melissa Lee investigation, the Bill English investigation, and the ongoing jobs-for-cash investigation involving Bakshi. We have three people who appear to be benefiting in this particular area and who, if they left the country, would be in trouble. But because they are staying tight here, they are not. I am sure there is a good explanation for that, and that Simon Power will be very keen to defend his colleagues and to go on there—

The CHAIRPERSON (Hon Rick Barker): This is your final call. I am listening very carefully to the member, and at times I am struggling to catch where he is actually engaging in debate on Part 2 of the bill.

Hon TREVOR MALLARD: If you like, I will keep on referring to some of those provisions of the bill.

Clause 25 in Part 2 is about wire transfers. I want to know whether, if the Endeavour Trust, Melissa Lee, or Bakshi took some of their ill-gotten gains and attempted to transfer them from New Zealand by way of wire transfer, they would be caught under this legislation. That is a pretty simple question. I want to ask the Minister whether this legislation is good enough to catch the money that has been flushed through a company, in Melissa Lee’s case, or through the Endeavour Trust, in Bill English’s case. I do not know how Bakshi handled his jobs-for-cash arrangement: whether there is a trust, personal money, cash in a jar, or how it worked. But I want to know whether, if that money was sent offshore by way of wire transfer or, more important, if it went—

John Hayes: You could ask Taito.

Hon TREVOR MALLARD: The member is saying something about Bill “Taito” English. Why did he say that? Why did he want to bring up Bill English in that way and associate him with Mr Field? I think John Hayes is trying to get into Cabinet. That is why he wants Bill English to be associated with Taito Phillip Field. I thank the member for the interjection. He is laughing; he is happy. He knows that when Bill English goes down, there will be a Cabinet vacancy. But I want to tell him that I think it is pretty unlikely that he will become the Deputy Prime Minister and Minister of Finance. I do not really like his chances very much, at all.

The next point I would like to make is around new or developing technologies or products that might favour anonymity. Again, this goes right to the case of the Endeavour Trust. What happens when someone takes his or her name off a trust as a trustee, and goes from clearly being a beneficiary of the trust to being a discretionary beneficiary of the trust? If there is a new product—a new trust—from which anonymity is gained, as is absolutely the case with the Endeavour Trust, which Bill English is a discretionary beneficiary of, then I want to know why the Government is doing that. Why is it bringing that up now, and why are we not hearing from Bill English on this?

I want to know from the Government whips whether there has been a declaration of interest in this from any National member, or whether any of them are at all concerned. I will give the whips an assurance that Labour will vote for this legislation, but the question is whether all the National members will. I am pretty tempted to ask my whips for the right to vote against the bill so as to force the vote to be taken, in order to see the numbers for National on it. If the legislation goes through on the voices, of course, we will not be able to tell whether Mr Bakshi, Ms Lee, and Mr English are all voting for this legislation, when there can at least be an argument put that they have an interest in it—and I know they have an absolute interest in this legislation, in terms of the differences between the bill that was introduced and the version we now have. So the legislation, not generally but in its details, affects them differently in different ways.

The next question relates to reliance on other reporting entities or persons in another country. Again, the issue is a very similar one, because at least in the case of Asia Downunder and in the case of Mr Bakshi Singh, there is reliance on people overseas in order to give information back to the New Zealand prosecutorial systems in order to work out whether Melissa Lee and those two individuals should be prosecuted. It is a question of whether other countries are those reporting entities.

I will leave it at clause 35, which relates to a prohibition on the use of false customer names and customer anonymity. I think if any of the three, but in particular Melissa Lee or Bill English, were in this area, they would be caught by this measure.

• Part 2 agreed to.

Hon SIMON POWER (Minister of Justice) : Part 3 deals with enforcement and contains provisions relating to civil liability acts, offences, search and seizure, penalties, and immunity of certain persons from criminal proceedings. In the first instance the bill obliges supervisors to engage in education, awareness raising, and guidance at the higher end. Supervisors may issue formal warnings and accept enforceable undertakings or initiate civil or criminal proceedings. The bill recognises that in extreme cases it may be necessary to take court actions against businesses that do not comply with their obligations. There are two levels of pecuniary penalty for civil liability. The bill contains criminal offences that range from smaller fines of $10,000, to $50,000. The penalties are, I believe, fair, and consistent with other business-focused legislation in New Zealand.

Part 3 also contains the search and seizure powers for the bill, which clearly set out the expectations for the way supervisors and police officers should interact with the reporting entities they are investigating and the processes for seizing documents and items as evidence.

I would now like to address the two significant changes that the committee recommended to Part 3. The first was to give immunity from liabilities to supervisors and reporting entities when they act in line with their duties and obligations under the bill. For example, if a reporting entity terminates a business relationship, then that reporting entity should not be open to a civil action from its customer. Clause 72A provides protection and certainty to supervisors and their employees. When they are discharging their duties in good faith, they cannot be subject to civil or criminal action. Significantly, the committee also removed—and the Government welcomes the committee’s recommendation—the explicit liability of senior managers of reporting entities in order to ease the concerns of industry that their managers would be held accountable for matters outside their control.

Hon PETE HODGSON (Labour—Dunedin North) : I am going to make some brief remarks, I believe.

Hon Trevor Mallard: Not too brief. About four calls.

Hon PETE HODGSON: OK! No, I think I will make them reasonably brief. We will see what notes come my way.

The short of Part 3 of the Anti-Money Laundering and Countering Financing of Terrorism Bill is that the enforcement regime is against not the people who do the money-laundering, but the people who try to catch the money-launderers. In case there is any doubt about it, that may lay the matter to rest. That is why it is important that a person who is acting in good faith—as a banker, a bank manager, a bank teller, or whatever—is entitled to some freedom from civil action from a disgruntled customer who was perhaps wrongly suspected of being a suspicious transaction - type person. That is, they are suspected of being a money-launderer or a prospective money-launderer. It is also the reason why individuals are removed from criminal proceedings under this legislation, though the corporate is not. The corporate can be fined a very large amount of money; $5 million comes to mind as the likely figure.

There were no huge changes to the legislation. Most of the changes came as the result of submissions to the Foreign Affairs, Defence and Trade Committee. Some of the changes came especially around the interface between customs and money-laundering.

Jacqui Dean: Due diligence.

Hon PETE HODGSON: OK, the member can tell us about the due diligence aspects of it. She is quite right. The bit about customs is quite interesting because it gets into who has what access to software that might be brought across the border. Some changes were made. Some of them emanated from officials, some emanated from submitters, and they were equally dealt with by the select committee.

I do not think it is a particularly contentious part. My colleague the Hon Trevor Mallard may think that there is contention in it.

Hon Trevor Mallard: I think about 20 minutes’ worth.

Hon PETE HODGSON: I was not aware of that much contention, but I admire my colleague’s almost instant and deep understanding of legislation that is put in front of him. I believe that he has the sort of hawk eye one would expect of a person trained in accountancy; he can spot a rort from 100 miles—indeed, 160 kilometres, as we say these days. I think that if my colleague can find errors in this part of the legislation, then it is really important that we examine them in order to address them before we move to the next phase of the legislation.

TODD McCLAY (National—Rotorua) : I rise to speak on Part 3 of the Anti-Money Laundering and Countering Financing of Terrorism Bill. Part 3 deals in particular with enforcement. I want to focus on two provisions concerning civil penalties.

Clause 72A is about the protection of supervisors of anti - money-laundering and countering financing of terrorism and the obligations of those supervisors. I believe that this is particularly important, because it means that no civil or criminal proceedings may be brought against supervisors when they are conducting their duties. This means that when there is an issue before a supervisor—the supervisor is investigating something—those whom the supervisor is investigating cannot spuriously put obstacles in the way to stop the supervisor’s work. It means that the supervisor can go about his or her duties without fear of interference from civil prosecution. However, the bill also states that where the supervisor has acted in bad faith, then he or she can face censure or penalty.

I also want to talk about Subpart 2. In particular, it is directly relevant to civil liabilities. Clause 76 states that where the anti - money-laundering and countering financing of terrorism requirements are not met by a reporting body, then it could be liable for prosecution. This means that when it fails its due diligence, when it has not done enough work, it can be prosecuted. In particular, when we look at this provision, we see that it suggests that a reporting body’s due diligence must be done in such a way that it can be assured of the nature of the person whom it is conducting business with.

Subpart 1 deals with the issue of what reasonable due diligence is, and I think that this is also important to look at. It means that reasonable due diligence would not be intrusive or unnecessary, and could be risk-based. We know that a number of New Zealand banks and Australian banks have adopted a risk-based approach to their consideration of this.

To summarise, I want to draw attention to what this really means. If someone has had a relationship with a bank for quite some time and that relationship has not changed, then the changes to the bill mean that a bank would not have to do additional due diligence on that person, and I think that that is reasonable. But in the case where the relationship does change, then it would be upon the bank, as a reporting body, to do additional due diligence. Let us say that someone has had a bank account for quite some time and has small amounts of money going through that account, such as a few hundred dollars a week. And let us say that all of a sudden we find that person might have a patch on his or her back, have a new motorcycle, and have thousands and thousands of dollars going through the account. One could assume that that person was involved in P and selling P, and may be a gang member.

In such a case the bank would not merely be able to say that it has known the person for a long time, that the person has had an account with the bank, and that, therefore, the bank does not need to do any more due diligence. Should the bank not conduct further inquiries and report, it could be liable for prosecution. I support this part of the bill, along with the rest of the bill, and cannot wait for it to enter into law. Thank you.

Hon TREVOR MALLARD (Labour—Hutt South) : Although colleagues have described Part 2 as being the substantive part of the bill, and I accept that there is quite a lot of meat in that part, within Part 3 there are also some pretty interesting questions that have to be discussed. In clause 85 the question of restraining injunctions is addressed. That goes to an ability to get a restraining injunction against the shifting of cash in a way that people believe is contrary to this legislation. I point out that this is money that could be going out of New Zealand, but the other situation could be if it was coming into New Zealand; and if it was money that had previously been laundered and taken out of the country, there is an ability to get a restraining order to stop people bringing it back in. Part of my question to my colleagues is why the hell anyone would want to do that. We have money that has been offshore and been washed, and now it is coming back in again. You know, the $100,000 that Melissa Lee had—if she had that money, sent it offshore, had it laundered and all cleaned up so it is dressed, sparkling, and ready to go, I am sure we would want the ability to let it come back into the country and grab it when it was back here again, rather than getting an injunction to stop money coming in.

Hon Pete Hodgson: It might help the current account deficit.

Hon TREVOR MALLARD: I’m not sure that bringing in laundered cash helps the current account deficit. I am not absolutely certain about that. It would probably depend on her liabilities offshore.

The CHAIRPERSON (Eric Roy): Again I say that I am listening very carefully, and I detect the member accusing another member of money-laundering.

Hon TREVOR MALLARD: Oh, no.

The CHAIRPERSON (Eric Roy): Well, that is my detection, so I ask the member to choose his words a lot more carefully than that. All members are honourable members.

Hon TREVOR MALLARD: Of course. I apologise if there was any indication that I was doing that at all. All I was trying to say was that there is $100,000 cash floating around here somewhere. It may or may not have been shifted offshore, and may or may not have breached the legislation as it went. I make it clear that in the case of Melissa Lee there is no doubt at all that there is $100,000 extra cash, because she has said that there is. She has accepted that there is that extra cash, and all we are speculating about is what she has done with that cash in the interim. Where has that money been? I ask whether it has been offshore, and why anyone would want to have a restraining injunction to stop it coming back in if there is the opportunity for the Crown to grab the money that belongs to NZ On Air as it hits the country. Why would there be a restraining injunction to stop that?

The next clause I would like to get to is clause 88, and in particular the heading of the group of clauses—and in fact this group is only one clause long. I do not want to criticise parliamentary counsel too much, but it is not the normal practice to have a heading over a sole clause. We will take that as it is. This clause is about pecuniary penalties, and the definition of pecuniary is something that at the moment is very live within New Zealand. Some of us thought it was a pretty simple thing. I thought it was like cash, in that if one had a pecuniary interest it was pretty clear. What has become clear to a number of us now is the fineness of this definition, both with regard to the general law and to this bill in particular, which is something more detailed than we might otherwise have thought. I want to know where someone who is paying a pecuniary penalty can get the money from. Can that person get it from a trust of which he or she is a discretionary beneficiary? Does that meet the definition of pecuniary penalty? If a pecuniary penalty is applied, can someone get that money from a trust in which he or she has an interest as a discretionary beneficiary?

I would be interested in hearing the interpretation of the former professor of law, the Hon Dr Wayne Mapp, who is currently sitting in the chair, on that. I know that he is more learned in matters of the law than the Minister who has been in the chair until now, the Hon Simon Power. If he wants to share with us his views on pecuniary interest, I think that would be good for the Committee, but possibly career-limiting as far as the Minister is concerned.

I move now to the provisions on failing to report a suspicious transaction. My old schoolmate Catherine Delahunty is in the Chamber, and I want to spread the joy and the love around, and ask why she did not report a suspicious transaction when she became aware of it. I ask why she took a few weeks to do that, in a similar way to Melissa Lee failing to report for 4 whole months not only one suspicious transaction but years’ worth of suspicious transactions. In fact, under clause 90(b)(i) a transaction has to be “relevant to the investigation”. It does not even have to be relevant to a prosecution. It just has to be relevant to an investigation. So that means it is relevant if there is any possibility at all of the money being shifted offshore—and I assure Catherine Delahunty that I do not think her colleagues are going overseas with her superannuation, so I do not think there is much danger of her one going offshore.

I ask how much is involved in this. How much would Bill English have to put in his pockets, when he is doing a ministerial trip, to trigger this particular legislation? On the face of it, we cannot tell. My understanding is that in that case it would be a matter for the regulations that follow. On the face of the bill, it is possible that if there is a suspicious transaction while there is an investigation going on, and someone makes an overseas trip and has cash in his or her pocket, then this legislation could be triggered, depending on the level that is set by way of regulation. I understand that sometimes in the past, $10,000 in cash has been the amount that one has had to declare at customs as one goes through. I ask whether it counts in this particular case if someone loads up his or her credit card. If, say, someone takes the Endeavour Trust credit card offshore as a discretionary beneficiary, because that is apparently allowed with the permission of the trustee, my question is whether that triggers this legislation.

I also ask whether, if someone else who is on the trip fails to report, that person is in breach of this legislation, or whether that would be the case only if he or she were an employee of the Department of Internal Affairs. If someone were a seconded Treasury official, would he or she be caught? I am interested in hearing from any of my colleagues who could answer that question, and the question of whether, if someone were seconded and his or her salary for the time spent was being paid through the Department of Internal Affairs, that person would become one of the people required to report that sort of transaction.

It is not a simple matter. There was a case of someone who was a current Minister who went shopping in New York using a Department of Internal Affairs credit card. To be fair to her, after a period of time she repaid the money.

Chris Hipkins: It’s the National Party pattern.

Hon TREVOR MALLARD: Well, there is a bit of a pattern emerging here. I ask whether that counts as money-laundering. If someone uses a credit card for a purpose for which he or she is not entitled, such as shopping in New York at Saks Fifth Avenue and a number of other places, spending a total of about $5,000 on the company credit card for personal shopping, and that someone is a current National Minister—

The CHAIRPERSON (Eric Roy): I just ask the member to reflect a little bit on Standing Order 116, “Personal reflections”, which mentions personal reflections, imputations, and so on. The member is on the border, and is crossing it now and again. I would be happier if he would desist from using names in that regard.

Hon TREVOR MALLARD: I have just now.

The CHAIRPERSON (Eric Roy): Yes; you saw me looking at you. OK.

Hon TREVOR MALLARD: I was not naming the woman concerned, who was a Minister in the previous National Government and this one, but I think people will end up doing that by a process of elimination.

The CHAIRPERSON (Eric Roy): What about the bill?

Hon TREVOR MALLARD: I will get back to the question. The next clause is clause 92, “Unlawful disclosure of suspicious transaction report”. I want to know whether the whistleblower legislation applies here, and, if so, which legislation takes priority. If someone is a whistleblower “for the purpose of obtaining, directly or indirectly, an advantage”—I am not going to suggest that he or she gets a pecuniary gain—because a whistleblower is often seen as someone who is of high standing in the community and a very ethical person, then is whistle-blowing seen as an advantage under this legislation? What overrules that?

Clause 93, “Failure to keep or retain adequate records relating to suspicious transaction”, is relatively simple, I think. There are lots of cases that we could consider, at the moment, of people who have failed to keep or retain adequate records relating to a suspicious transaction. If we consider one of those, we see that in the end, New Zealand On Air did an audit, and it went through someone’s books with a fine-tooth comb. I will repeat the comments I made when I was the Minister in charge of New Zealand On Air when it was ripped off by Asia Downunder when it and its parent company gave inflated invoices to New Zealand On Air. It is something I find particularly embarrassing. Some very senior people chaired the board, and it had some very experienced chief executives. But they had the wool pulled over their eyes by Asia Downunder, and a six-figure sum, I understand—

Hon Pete Hodgson: Just over $100,000.

Hon TREVOR MALLARD: —just over $100,000 was ripped off from that organisation. That was a suspicious transaction. I want to know whether there was a failure to keep records.

Clause 94 is about obstruction of an investigation. That raises a very serious question. I see that the Minister of Broadcasting is not in a position to answer at the moment, but I want to know whether there is a conflict of interest between running a campaign and being the main organiser for an individual, and being the person to whom the organisation doing the investigation is reporting, especially if that money has gone offshore and is caught by this legislation. Again, I do not want to be too critical of Melissa Lee. To be absolutely fair to her, she has indicated, albeit 4 months after the identification of the shortfall on her part—that is putting it particularly nicely; other people would have called it a misappropriation—she has decided to repay the money that has ended up with her and that should not have, 4 months after being informed of it.

I say to Bill English that that is a very good example for him. If he wants to avoid being caught by this legislation as he takes the Endeavour Trust credit card offshore—and depending, again, on the monetary level at which the legislation applies—then he should look at the previous decade and pay all the money back. It will not make an enormous difference to the Government deficit, but it would help its credibility. I say that a lot of us, as we go overseas, rely on New Zealand’s reputation. The reason we do not end up on black lists under money-laundering and financing of terrorism legislation is that in New Zealand we have a very good reputation for ethics in Government. If we lose that good reputation under this legislation and in a number of other areas, New Zealand Ministers will not be as welcome as they are.

Hon PETE HODGSON (Labour—Dunedin North) : The Hon Trevor Mallard has raised a number of interesting questions, and some of them are deserving of an answer. I do not have the accounting skills of the Hon Trevor Mallard, and I do not pretend to have them. But I have had the benefit of listening to a range of advice that came forward to the Foreign Affairs, Defence and Trade Committee, and I have been part of some of its discussions on the Anti-Money Laundering and Countering Financing of Terrorism Bill.

I say to the honourable member that I think he has probably got some of the Melissa Lee case wrong. That is to say, the suspicious transaction he referred to in relation to the legislation, in my reading of it, is one that does not get caught by the money-laundering definition. The reason I say that is that in that particular instance, as far as I understand it, money was shifted, certainly. It is a money-laundering activity to shift money from one thing to another. But in this case it was shifted from the contingency line of a company’s accounts through to the profit line, and then not shifted back again. The reason I think it is not money-laundering is that it never left the company.

Hon Trevor Mallard: How do you know?

Hon PETE HODGSON: Well, I do not know that. It is true that I do not know. But what I do know is that it shifted within the company.

Hon Trevor Mallard: This is a very poor defence. It’s a shocking defence.

Hon PETE HODGSON: I am sorry if it is not a very good defence. Let me just try to continue.

It has been described as a simple accounting error, and I think that probably under-represents it a little. I do not think it is a suspicious transaction according to the legislation that is in front of us, but I do think it is a great deal more than an accounting error. The reason I say that is that if it was an accounting error, it raises the question of how that accounting error occurred each year—the same error—for 5 years. It was, apparently, repetitive. Now, that is a feature of money-laundering. That is to say, money-laundering usually does not occur in one big lump sum. The suspicious transaction that the member referred to in relation to the legislation is usually one of a series of suspicious transactions, the idea being to shift small amounts of money on a regular basis, and indeed, shift some of them back to cause a bit of confusion.

The CHAIRPERSON (Eric Roy): Can the member just tell me what clause of the bill he is discussing?

Hon PETE HODGSON: The clause on suspicious transactions—

Hon Trevor Mallard: I think the—

The CHAIRPERSON (Eric Roy): I have asked the member.

Hon Trevor Mallard: Clause 90.

Hon PETE HODGSON: Clause 90—OK. Clause 90 is about failing to report a suspicious transaction. So the suspicious-transaction feature of the legislation can be found right through it. There was a failure to report 5 years ago, 4 years ago, 3 years ago, 2 years ago, 1 year ago, and 4 months ago. So even when it was drawn to the attention of the transactor, there was a failure to report that suspicious transaction, as clause 90 refers to.

I know the member thinks that my defence of Melissa Lee is poor, but I hold the view that it is probably not money-laundering, although it does have a lot of the characteristics of money-laundering because small amounts of money were moved on a regular basis. I suspect it is not money-laundering because it is yet to leave the company, but the Hon Trevor Mallard may be correct when he says it has already left the company. I simply do not know. So I say to the member that I think to accuse Melissa Lee of money-laundering as defined in this legislation may be an error. But to suggest that it is a suspicious transaction is something that I strongly agree with him on, and to suggest that there was a failure to report it, as mentioned in clause 90, is absolutely the case. And not only that; there was a failure to report it, as far as I can see, on five separate occasions. So maybe there is a point of agreement between the Hon Trevor Mallard and me, but there also remains the point of disagreement. I think it might be worth exploring that point further.

Hon TREVOR MALLARD (Labour—Hutt South) : Well, this situation is rather unusual and it actually takes me back to the days when I was first a member of Parliament and the Committee stage used to be a lot less formal, a lot more back and forth. There was a lot more debate with colleagues, and there were often amendments from the floor. I think those were more civilised and probably less partisan days, and I think we are seeing a little bit of that now. I do want to disagree with my colleague who sees the bright side of life on every occasion. I think that on this occasion he has been far too generous.

My colleague has gone through the Melissa Lee case, and he has shown the repeated appropriation of money—into profit, into loss, and into profit—that should have been returned to the Crown. There have been a number of instances here, so we have established that we have money that has been misappropriated—it has been appropriated wrongly; it has gone into the profit.

The question then is what happened to that money after that, and I think that is where the member and I might start to differ. What I know is that if it has been paid to Melissa Lee as part of dividends and she has spent it offshore, then, depending on the reporting levels of this, it is misappropriated money—money that has been obtained in a way that it should not have been and has then been taken offshore. My view is that unless the levels of reporting of this are so low, then the legislation has been triggered. If it is not the case, then the member has something to answer for, because he, along with a number of other members of the select committee, did the work to ensure that this legislation does in fact catch people.

I might go back to clause 104 later, because it deals with thresholds and with failing to report “cash over applicable threshold value moved into or out of New Zealand”. But going back to the time limit for prosecution, in clause 102, I compliment the select committee because it—

Hon Pete Hodgson: 3 years, isn’t it?

Hon TREVOR MALLARD: The committee decided on 3 years—3 years after the time when the matter of the information arose—and that is a more standard approach, rather than the 6 months originally. But is that long enough?

Hon Pete Hodgson: It should be 5 years.

Hon TREVOR MALLARD: It is a question of whether it should be 5 years. In the case of Melissa Lee, if the money that has been wrongly appropriated has, in fact, gone offshore, it would be 5 years—and it is accepted by Melissa Lee that it has been wrongly appropriated. Melissa Lee has accepted that she has wrongly appropriated money. She calls it an error. Some people say that when one is the managing director and the chief executive of a company, one takes responsibility for the errors. When one is drawing money down, as a result of having that extra money to draw, then it is particularly suspicious. But I am assured by my colleague that this goes back 4 or 5 years.

I want to say that it is good to share some of the grief with my former colleague Steve Maharey who was the Minister of Broadcasting for part of that time and was also responsible for it. What is the current Minister’s name—the cigar-smoking one?

Hon Pete Hodgson: Jonathan Coleman.

Hon TREVOR MALLARD: I also share some of the grief with Jonathan Coleman, who is the current Minister of Broadcasting and the person responsible.

I want to know whether clause 108 applies in this case. Clause 108 relates to persons who provide false or misleading information in connection with a cash report. If people have some money that they have gained through misappropriation in their pocket or handbag as they leave the country, and they do not declare their sources in the way they are meant to, is that caught by this provision? That is a very real question. Are they caught by this provision if they put the money on a credit card? What about if they put it in a TAB account? Actually, no—a TAB account would not work offshore. But those are the sorts of ways that people launder money around the country, and if people take that sort of approach, are they caught by that provision? My final comments go, and this is—

Hon Pete Hodgson: It’s certainly not my final comment.

Hon TREVOR MALLARD: No, it is my fourth call on this particular set of clauses.

My final comments go to new clause 112A, which deals with the duty of persons with knowledge of computers. I ask whether the legislation goes too far or not far enough. It depends on which approach one takes.

Hon PETE HODGSON (Labour—Dunedin North) : It is a matter of fact that the Foreign Affairs, Defence and Trade Committee worked across party lines, and it is a matter of fact that members of the committee from time to time would argue freely with one another, even arguing with members of their own side. It is a matter of fact that from time to time the National members went to sleep for long periods of time during the select committee, and that is simply being replicated in the Chamber this afternoon, as my colleague with his skills and I with whatever skills I have seek to tease out some of the finer points of this legislation.

I think the member who has just resumed his seat has made some interesting points about the 3-year limit on prosecutions. It is an improvement on the bill as introduced, but the member points out that money-laundering can reach back deep into history. We, I think, have probably come to the view that although that might mean that some people may get off some earlier misdemeanours, none the less there is a degree of uniformity in the way that we approach a sort of limitation on prosecution, and that that uniformity mattered.

I do not have anything to offer on whether we have gone too far or not far enough on the issues around computers and access to computers. I am afraid the member did not have time to develop his argument there and I therefore do not have an ability to refute it, but I do want to take the member back to clause 90. I say to the member gently, and I suppose I am partly to blame here, that failure to report suspicious transactions does not refer to the money-launderer but to the person who is supervising the money-launderer.

Hon Trevor Mallard: That’s right—John Key!

Hon PETE HODGSON: That is the point. That failure to report a suspicious transaction is something that might, say, if we were to use the analogy of the Melissa Lee case, take us to New Zealand On Air, to the Minister of Broadcasting, and to the Prime Minister, because all three of those bodies failed to report. The first of those—New Zealand On Air—reported the suspicious transaction to the person who had undertaken it, for God’s sake! It was not reported to anyone of authority but to the person who was suspected of the transgression. That same person has now indicated that she will pay the money back. That is the person to whom New Zealand On Air reported. The Minister of Broadcasting tells us that at the time he did not know. Well, we might explore that as the weeks go by, but he did say that he knew, some time in August. And here we are in October. He did not report.

Then we had the Prime Minister on the TV3 programme Breakfast this morning saying that his office knew but that he did not. So somehow his office staff failed to report this suspicious transaction, and the only organisation that reported the suspicious transaction, according to the obligations in clause 90, was TV3. Now what have we come to in this country where a quango, a Minister, the Prime Minister’s staff, the Prime Minister, and, indeed, the person who is responsible for the suspicious transactions did not report to anybody, but TV3 did? That is why probably legislation like this matters, and certainly why clause 90 matters, because failing to report a suspicious transaction commits an offence.

The rest of Part 3 tells what those offences might lead to—what sort of pecuniary penalty, what sort of fine. Indeed, in some cases the fines become very significant indeed. So I think we do have a nice little case in point here where there has been a serial failure to report a suspicious transaction by Government agencies, by a Government Minister, and by the Prime Minister of the land. If that does not tell us that there is a case for having legislation with clause 90 and the subsequent features of that legislation, then it is hard to know what other argument one could adduce for such a necessity as we have in clause 90.

• Part 3 agreed to.

Hon Dr WAYNE MAPP (Minister of Defence) : Part 4 of the Anti-Money Laundering and Countering Financing of Terrorism Bill contains the institutional arrangements and regulation-making provisions, including the establishment of the supervisory agencies that, alongside the police, will be responsible for the oversight, regulation, and enforcement of the new regime. As supervisors, the Reserve Bank of New Zealand, the Securities Commission, and the Department of Internal Affairs will support reporting entities to implement and maintain the new regime. These agencies already have supervisory and regulatory roles in respect of most of the industry sectors for which they will be responsible under the bill. Those existing relationships will be used to create efficiencies. The multi-supervisor model within the bill also helps to reduce transaction costs for businesses. They will have to deal with only one agency instead of a separate agency for credential or gambling matters, or another for money-laundering or terrorism financing. These agencies know the sectors they will be supervising and are less likely to pursue strict interpretations of compliance issues than a single regulator that may not have an adequate understanding of the business environment of a particular reporting entity.

Part 4 also enhances the financial intelligence powers and functions of the New Zealand Police. Provisions within this part require the Financial Intelligence Unit to produce guidance for reporting entities on establishing what transactions are suspicious and what should be reported to it. It also gives the Financial Intelligence Unit formal powers to get additional information from a reporting entity when it submits a suspicious-transaction report. This important power will codify important intelligence-gathering tools to combat financial and organised crime.

The select committee made a number of changes to Part 4, the most important of which was the inclusion of provisions for supervisors to delegate some of their monitoring or investigatory powers and functions. Clauses 130A, 130B, and 130C allow supervisors to efficiently and effectively carry out their roles without the undue burden of hiring, for instance, specialist investigators, lawyers, or forensic accountants. The committee reviewed the regulation-making powers in Subpart 2, and moved some of these from clause 147 to clause 148, which deals with regulatory exemptions and has a robust set of criteria that the Minister must take into account when recommending a regulation. The committee also made ministerial exemption provisions within clause 151 subject to the Regulations (Disallowance) Act 1989. These changes to Part 4 make it more responsive and allow greater transparency for decision making.

The institutional framework set out in Part 4 is appropriate to New Zealand’s financial system and is compatible with the framework of our trading partners. A Supplementary Order Paper to schedule 2 will make a consequential amendment to the Reserve Bank of New Zealand Act to make it clear that the Reserve Bank Governor can delegate the functions and powers that the Reserve Bank will receive under this bill. Thank you.

• Part 4 agreed to.

Hon Dr WAYNE MAPP (Minister of Defence) : Clauses 1 and 2 set out the bill’s title and commencement provisions for the financial service providers and casinos, collectively referred to as the financial entities. The bill anticipates a lead-in time for reporting entities to make sure that they have the measures required by the bill in place before their obligations become law. Because some flexibility is required, the commencement provisions relating to important reporting entities’ obligations will be through an Order in Council. The expectation is that at least 2 years will be provided, but the Government does intend to consult further with industry on the appropriate lead-in time.

Certain provisions will come into force immediately following the bill’s Royal assent, including the New Zealand Police’s financial intelligence functions and the supervisors’ functions and powers, along with the ability to make regulations. This will enable the Government to gear up the regime and allow supervisors to assist reporting entities in the implementation of the responsibilities.

The provisions relating to the cross-border transportation of cash will come into force 12 months after the bill receives its Royal assent. This aspect of the bill is relatively self-contained and will update and replace the border cash-reporting regime of the Financial Transactions Reporting Act 1996. The commencement provisions of the bill will make sure that the obligations for reporting entities are brought into force within a time frame that is practical for industry and sensitive to implementation costs.

Hon TREVOR MALLARD (Labour—Hutt South) : I will speak relatively briefly to this. Again, it is to thank officials for the work they have done on the legislation, and to congratulate Ministers, especially Steven Joyce as he enters the Chamber, on their timing in bringing this bill to the Committee in embarrassing times for Melissa Lee and Bill English. I have no doubt whatsoever that Gerry Brownlee was totally ignorant when he put it on the Order Paper, but I would not say that the other Cabinet Ministers were. It is a particularly embarrassing time for the Government in New Zealand, and for Bill English in particular. Never before have I seen a Minister in place and not suspended while the Auditor-General is conducting this sort of investigation. I can see it. Given the revelation around Melissa Lee last night on TV3—although some of us have known about it for some time—one would have thought that a cautious Leader of the House would have taken the opportunity to defer this legislation. I say thank you and congratulations to Mr Joyce on his promotion.

• Clause 1 agreed to.

• Clause 2 agreed to.

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

• Bill reported with amendment.

• Report adopted.

Hon STEVEN JOYCE (Minister of Transport) : I move, That the Land Transport (Enforcement Powers) Amendment Bill be now read a second time. I thank members of the Transport and Industrial Relations Committee for their work on the bill. In particular, I acknowledge the work of the chair, David Bennett.

Chris Tremain: Excellent hair.

Hon STEVEN JOYCE: It is an excellent hairstyle.

The Land Transport (Enforcement Powers) Amendment Bill addresses dangerous driving and the antisocial use of vehicles. This year we are looking to take major steps to further improve the road safety of this country. It is important, then, that we do not allow extremes of dangerous behaviour by some road users only because the police and local authorities do not have the power to stop it.

This bill will give the police and road-controlling authorities appropriate powers that more accurately reflect the danger and disruption caused by illegal street racing. Several incidents this year, including the attack on a lone police officer and the attack on an aviation security officer by illegal street racers and their supporters, have made it clear that the need for these powers is overdue.

The bill will enhance the powers of police, courts, and road-controlling authorities to tackle illegal street racing and the antisocial behaviour that goes hand in hand with it. The bill empowers road-controlling authorities to make by-laws restricting cruising—the circling of streets in a way that disturbs local residents and has a negative impact on many businesses. The bill also increases penalties for failing to stop for police, failing to give details of a driver, registration plate offences, and graduated driver license system breaches.

The bill contains provisions for dealing with the problems caused by illegally modified vehicles. The police will be given additional powers to direct a vehicle to a testing site when an officer believes it has been modified illegally. Vehicles ordered off the road for excessive exhaust noise will be made to undergo an objective metered noise test. This bill also makes impoundment mandatory for vehicles involved in illegal street racing, or sustained loss of traction such as burnouts. Those who lose their licenses because of disqualification or demerit point suspensions will have their licences cancelled, and they will have to pay a reinstatement fee to get their licenses back. This will ensure that other road users are not paying for the actions of a few.

This bill was referred to the Transport and Industrial Relations Committee in June of this year. The committee received 126 submissions on the bill, and a number of changes have been made in response to those submissions. The definition of “cruising” in the bill is amended to mean “driving repeatedly in the same direction over the same section of a road …”. This makes it clear that driving up one side of a road and then down the other would not constitute cruising.

A change has also been made to remove the power of a road-controlling authority to permit street racing. This provision was unnecessary, as road-controlling authorities already have the power to close roads for street racing events. The by-law powers in the bill were amended to allow a road-controlling authority to prohibit cruising, not just to control or restrict it.

Amendments have also been made to allow by-laws that specify the section of road or roads on which cruising is to be prohibited, restricted, or controlled, and to set the period of time that must pass between each time the driver drives on the specified road to avoid being regarded as cruising. A road-controlling authority would be able to amend by resolution the specified roads and the times at which the prohibition applies. The bill has been amended to empower the Minister of Transport to amend or replace these by-laws; currently the Minister is able to review and disallow by-laws.

There are minor technical amendments to the provisions for the driver licence reinstatement fee. These technical amendments are necessary for the effective operation of these provisions. For example, driver licences of suspended or disqualified drivers will be cancelled by operation of law.

Currently, when drivers are disqualified they are supposed to surrender their photographic licence cards. This does not always happen, and those who retain their licence cards continue to use them after disqualification. The amendments to the bill will see all licence cards being cancelled automatically when they are required to be surrendered. This amendment clarifies that any licence card, whether surrendered or not, is no longer valid. The driver will have to pay to have his or her license reinstated once the period of disqualification has ended.

Changes have also been made to the vehicle seizure and impoundment provisions. An amendment will require a person to provide his or her driver’s licence number to an enforcement officer if requested, as well as other personal information that can be asked for. These amendments bring section 96 of the Land Transport Act 1998 in line with the fines collection regime.

A consequential amendment has been made in relation to the need to update the driver licensing register when a driver is forbidden to drive. Currently, the register must be updated every time police forbid someone to drive. In some cases, the period for which a driver is forbidden to drive is very short and may have ended before the register is updated. For this reason, an amendment has been made to remove the requirement to update the driver licensing register. The information will still be recorded on the New Zealand police system.

The bill has been amended to clarify the ownership of personal property in a confiscated vehicle. Storage providers have expressed concern that former owners of unclaimed vehicles have demanded that their unclaimed personal property be returned many months after the vehicle was confiscated. The amendments allow for the ownership of any personal property in an unclaimed vehicle to be transferred to the storage provider at the same time that the ownership of the vehicle is transferred to that storage provider.

Alongside this bill, I will be soon considering the content of Safer Journeys, the road safety strategy for the next decade. This strategy will be seeking to significantly improve the safety of all our road users, with a particular emphasis on our young people. The initiatives in this bill provide a strong platform for improving the safety of our young drivers by ensuring better compliance with the graduated driver-licensing system, and by tackling dangerous behaviour like illegal street racing.

On average there are 137 crashes a year that result in injury or death and are caused by illegal street-racing activity. Three-quarters of these crashes involve young people aged 15 to 24. We are working to cut the numbers of young people being killed and injured on our roads, and this bill is an important step towards this goal.

I again thank the Transport and Industrial Relations Committee for its work on the bill. The bill will send a strong message that our streets are no place for antisocial and dangerous behaviour. It will help to ensure that householders and business owners are free from the excessive noise and intimidation that often comes with illegal street racing. This bill is important in setting boundaries around the type of behaviour we are prepared to tolerate on our roads. I commend this bill to the House.

DARIEN FENTON (Labour) : It is a pleasure to take a call in the second reading debate of the Land Transport (Enforcement Powers) Amendment Bill. As we said in the first reading, Labour supports all measures to help combat the problem of illegal street racing, but I remain unsure whether this bill and the companion bill that we will be debating later tonight, the Vehicle Confiscation and Seizure Bill, will be any more successful than current laws.

Having said that, I pay tribute to the submitters. We heard submissions in Christchurch, Auckland, and Wellington. There are some very, very genuine concerns about illegal street racing. It is a nuisance to people who live in those areas, and so on. I commend the Automobile Association for its very thought-provoking submission to the committee on this bill and the vehicle confiscation legislation. Its submission, along with that of the Police Association, was professional and well-researched, and Parliament would be mad to ignore what these organisations are saying.

As I noted in the first reading debate, I believe that many of the actions permitted under this bill can already be undertaken within the existing legislation, particularly Labour’s Land Transport (Unauthorised Street and Drag Racing) Amendment Act 2003, but there are some useful provisions in the bill, such as changes in terms of breaches of the graduated driver licensing system.

Labour believes that demerit points are a far more effective deterrent than fines. I note with interest the Automobile Association’s recent report called Saving Ourselves. I commend the reading of that report to all members of the House, if they have not done so already. It calls for a change from the current crime and punishment model of enforcing transport rules to an injury prevention model. I think that proposal needs some serious consideration. The Transport and Industrial Relations Committee heard that fines have become a badge of honour for some illegal street racers, and that the racers have no intention of ever paying those fines. All they do is clog up the court system, and we all know the consequences of that.

Unfortunately it will take a lot more than passing a few new laws to deal with the scourge of street racing and other illegal transport activities by young and not-so-young drivers in our country. I urge the Government to think innovatively about our approach to transport law enforcement. I hope the Minister of Transport will take the opportunity to take a wider look at road safety and enforcement during the current consultation on the road safety strategy, Safer Journeys, which he mentioned in his second reading speech. It is very easy to press the buttons and talk up car crushing and bigger penalties. Anyone can do that. I fear that this bill and the bill that we will be debating later tonight are an unfortunate hoax perpetrated on the New Zealand public whereby National is trying to be seen to be doing something when, in fact, this bill and its companion bill will not do much at all.

The Government says that this bill is about protecting New Zealanders and keeping them safe from harm. The Government says that it is seeking to address road safety in New Zealand. Well, I have to say that while we are debating these two bills there is a more urgent transport issue that we need to be dealing with. Right now in Auckland, nearly a thousand bus drivers are locked out, with 80,000 passengers affected. That is a transport compliance and transport safety issue; whether or not the Government wants to own up to it, that is a fact. Drivers have been locked out because they said they would work to rule. Let us talk about what work-to-rule means in their case. First, it means that the drivers will not drive any bus that is without a working radio-telephone. What is so terrible about that? They will not drive any bus that is without a current certificate of fitness or a current road user certificate. I ask whether anyone would want to go on a bus without one of those.

Hon Tau Henare: What’s this got to do with the bill?

DARIEN FENTON: I say, with all due respect to the member, that it is a transport safety issue. The drivers will not drive any bus that has a safety defect that the driver is aware of. Unbelievable! Drivers also will carry out full pre-shift bus checks as described in the defect card supplied with each bus. They will spend 5 minutes at the end of every timetabled trip carrying out full terminal duties, including lost property checks, using toilet facilities if required by the driver or the service person operator, performing stretching exercises, and preparing the bus for the return journey. And they will keep to all lawful speed limits. I want the New Zealand public to know that when we talk about transport safety and Auckland bus drivers, we are talking about a transport safety issue. These workers are following the rule book. I do not want to go on any bus without a current warrant of fitness or safety certificate.

The Government keeps telling us that the role of transport legislation is to keep citizens safe from harm. So I ask why the Government thinks it is OK for Auckland bus drivers to be locked out because they are working to the rule book. In other words, they are working safely. They are keeping their passengers safe, and they are keeping other drivers and pedestrians safe, as well. Transport safety is more than coming up with a couple of laws that might scare a couple of illegal street racers. It is about ensuring that drivers, pedestrians, and everybody else on the road are safe. Unfortunately, it has become an industrial issue in Auckland. In my view, no worker should have to work to rule. What is obvious is that the expectation—

The ASSISTANT SPEAKER (Eric Roy): I draw the member’s attention to Speaker’s ruling 106/2: “On the second reading of a bill discussion must be confined to the bill before the House as printed.” If the member is making analogies she needs to draw them precisely into the bill. The second reading is really about a response to the work that the select committee did.

DARIEN FENTON: Speaking to the point of order—

The ASSISTANT SPEAKER (Eric Roy): No, the member is not speaking on the ruling; I have ruled. The member will continue her speech.

DARIEN FENTON: I am making an analogy in relation to transport safety. The Minister said in his second reading speech that this bill was about transport safety and that he would be looking at safer journeys. I am making an analogy, and although I am aware that some progress is being made with the help of facilitation, I want to know what the Minister will do about safety for bus drivers and the safety issues that the bus dispute has exposed. I am aware that we are dealing with legislation, but there are more important things to be dealing with right now and, forgive me, I do not think it is outside the Standing Orders to draw those comparisons.

The ASSISTANT SPEAKER (Eric Roy): It is. The member should speak on the bill.

DARIEN FENTON: The Minister of Transport has been promising his friends in Auckland from NZ Bus and Infratil that he will not only deal with this legislation but also repeal another Act, called the Public Transport Management Act, that was brought in last year that gives the Auckland Regional Transport Authority and others more control over routes and conditions, such as those that NZ Bus currently services. What is so dreadful about that?

If the Minister of Transport is trumpeting this bill as a means of protecting citizens from harm, because that is what he is saying it is, why does he think that enabling contractors to hide their books from Auckland ratepayers is OK? I think that is a fair question to ask, and I will certainly be asking it in the Committee stage.

This bill, by and large, will not address the concerns of the submitters who came before the Transport and Industrial Relations Committee with genuine concerns about illegal street racers. Once again I acknowledge those submitters, because it was obvious from their submissions that they are living in some pretty terrible situations, particularly in Christchurch. I am aware that the submitters will not be satisfied with this bill or the next bill to come before the House tonight. The legislation does not deal with the issues they raised. It does not deal with the issues around Nicky Wagner’s petition on noise. She went out and rarked up the issue in Christchurch, and here we are. We cannot find a legislative solution to the problem; it is going to take a lot more than that.

I predict there will have to be further changes. This bill and the companion bill will not deliver on the expectations this Government has raised around the issue of illegal street racers and others. For example, there are some really interesting definitions in this bill, like the definition of “cruising”. I think it will be up for a lot of future interpretation, and it will be a money-spinner for lawyers. It is bad lawmaking. We need to get this right so that we are not providing endless opportunities for lawyers. Labour members are concerned about a number of things—

Hon Lianne Dalziel: Cruising? Good grief!

DARIEN FENTON: Yes, honestly. We are concerned about a number of things, which we will discuss in the Committee stage.

Our judgment is that the bill is harmless, although, overall, we think it is pretty useless. As I said at the commencement of my speech, we support this bill, but we will be interested to check in a year to see whether it has made any difference to the issue of illegal street racers. I predict that it will not have done so.

Hon NATHAN GUY (Associate Minister of Transport) : We have just heard a whole lot of mumble-jumble from Darien Fenton, the previous speaker. I am not sure whether she is aware that there is no illegal street racing going on with buses in Auckland. I was in Auckland on the weekend and I did not see any. We have just heard the member say that the Land Transport (Enforcement Powers) Amendment Bill is bad lawmaking, but we know from her that the Labour Opposition is supporting it. How can it be bad lawmaking when the previous speaker sat through all of the submissions and, as the chairperson of the Transport and Industrial Relations Committee, David Bennett, has just told me, never said that this bill was bad law? I think the member needs to take stock of the speech she has just given and get up to speed with a whole lot of the facts.

The member also went on about road safety, which is a real focus of this Government. The Minister of Transport, the Hon Steven Joyce, put out the Safer Journeys discussion document, and we are looking forward to feedback from all of New Zealand by the end of the year. That is very important. What is also important is that 137 serious crashes or deaths have resulted from 15 to 24-year-olds being involved in this type of activity. When we think about the social costs of those accidents, injuries, or deaths, it is huge. It is very important—

Hon Lianne Dalziel: From cruising? You’re talking about the next bill.

Hon NATHAN GUY: No, I am not.

Hon Lianne Dalziel: Yes, you are.

Hon NATHAN GUY: No, I am talking about—

Hon Gerry Brownlee: They’re not listening. That’s why they’re not in Government.

Hon NATHAN GUY: That is right; that member over there is still cruising around in Opposition. She has not quite worked it out yet. When we think about it, the illegal street racing and disorder occur on the weekends. We have serious concerns that the police are out chasing those young hooligans around. They are not necessarily boy racers; they may be girl racers, as well. We have to ask why this is occurring up and down the country. One particular hotspot is Christchurch, and it was good to see the select committee down there. It had a hearing in Christchurch and heard from people who are directly affected in the communities where those people are out hooning up and down their streets in these noisy cars. Noise was an issue that came up, and it was good to hear the Minister talk about how there will be an objective noise test when these people are pulled over, because noise is a serious problem that those vehicles create.

To bring my speech to a very quick summary, this legislation comes into force on 1 December this year. It is very important that all the good work the select committee has brought about is captured in this second reading. I will let some other speakers on the Government side who sat through those submissions talk in detail about those things we gathered through the select committee process. I support this bill in its second reading.

CAROL BEAUMONT (Labour) : Tēnā koe, Mr Speaker. No doubt everyone in this Chamber recognises that there is a problem, and Labour supports the Land Transport (Enforcement Powers) Amendment Bill and will support any genuine effort to deal with the issues of illegal street racing and antisocial behaviour. I want to acknowledge the people whose lives are impacted on by the actions of the so-called boy racers. Those people made submissions to the Transport and Industrial Relations Committee and I am fully aware that in many cases their lives are absolutely blighted by the actions of those people. We listened to a 15-year-old talk about not being able to sleep at night because of the noise and we heard from her parents about their business being impacted on. I acknowledge that this is a serious problem, particularly, it would seem, in Christchurch, and there are genuine issues being raised.

I also want to acknowledge the efforts made by my colleagues, particularly Clayton Cosgrove but also other Christchurch MPs, in relation to this particular issue. But the reality is that this legislation and its companion bill that we will be talking about later are, in many cases, just window dressing. They have the appearance of trying to deal with what is a serious problem. I say that for a number of reasons. One reason is that there is a real issue in enforcing any law that targets boy racers, and that is the ability of the police to have sufficient officers present at the right time and in place to witness offences taking place and then to safely intervene and make arrests. The bill does nothing to deal with those issues of policing, and I will come back to that.

The current legislation, including the bill my colleague Clayton Cosgrove put in place, allows courts to permanently confiscate cars. However, the reality is that tough laws work only if courts back up lawmakers. Confiscation is presently happening in only a very small percentage of cases. The reality is that we have no guarantee that this new bill will change that position and lead to a change in the behaviour of our courts. If the courts do not back up legislation, then we do not deal with the issue. We need to be passing legislation that is enforced, and, of course, the other side of that coin is that we need to pass legislation that is enforceable and practical. I will come back to that later as well, because, as my colleague Darien Fenton said, there are some real issues in this bill that will make enforcement difficult.

The real issue here is that the Minister of Police, Judith Collins, has raised public expectations on this issue by talking tough. This is National talking tough, but she will not be able to carry through on those expectations. This legislation and its companion bill will not provide the solutions she says will be put in place. The reason for that is the issue is one that does not have an easy answer. We cannot just decide that one or two changes to the law will solve the problem. When listening to the submissions, it seemed to me that the key issues were around road safety and safe driving, noise, and antisocial behaviour. The drivers of those issues—road safety, noise, and antisocial behaviour—will require a wider range of interventions than the ones this bill and its companion bill put in place.

Before I go into the detail, I would like to acknowledge the submitters on the bill. There were 126 submissions from interested groups and individuals, and the select committee heard 30 submissions. As has been mentioned, that included hearing submissions in Christchurch and I think it was a very powerful day of submissions. Some very, very good submissions were made in Christchurch by those who are negatively affected by the behaviour of boy racers and, in fact, by those who would consider themselves to be the good boy-racers. Those submissions were important to our efforts and I acknowledge those submitters.

We also received a lot of advice from a range of officials from the Ministry of Transport, the New Zealand Transport Agency, the New Zealand Police, the Ministry of Justice, and the Parliamentary Counsel Office. Again, I acknowledge those people, because they were trying to deal with some quite difficult propositions to try to give us the advice necessary to put those measures into place.

I still think there are many problems with this bill and I will talk about some of those. One of the areas that is covered is the issue of by-laws. This bill provides for the making of anti-cruising by-laws, and it will enable local authorities—road-controlling bodies—to create those by-laws. One of the interesting things was that most of the local authorities that submitted did not want to have that ability. When looking at the submissions and going back to them, we see that considerable concern was expressed by many of those local authorities about the efficacy of by-laws in this situation. So I think that is an issue that sits there for us. Those by-laws will look at things like the roads where cruising can take place, and will deal with issues such as the amount of time that must elapse between successive times a vehicle can be driven along a section of road for it not to be regarded as repeatedly using the same section of road. The Minister also has some powers in relation to those by-laws, including the powers to amend, replace, and disallow by-laws, and there is a really important issue in there about what requirement there is on the Minister to consult. That is also an area of concern.

I suppose the biggest area of concern in relation to these by-laws is the definition itself. The definition of “cruising” refers to the act of driving repeatedly over the same section of road to draw attention to the power or sound of the motor vehicle, or in order to create a convoy that impedes traffic flow. The bill was unclear as to whether a driver should be allowed to drive in one direction along a two-way road and back in the other direction without being considered to have driven on the same section of road twice, so the select committee recommended an amendment to clause 4 to the effect that “cruising” means “driving repeatedly in the same direction over the same section of a road …”. That certainly raises some very interesting questions, because in my opinion driving backwards and forwards along the same stretch of road is just as much cruising as repeatedly driving over the same stretch of road in the same direction. It is as likely to cause people living in the area as much harm in terms of issues like noise as driving over the same stretch of road in the same direction. I think there is still a need for clarity about this matter. It seems a pretty foolish sort of definition, and we do not want to have legislation that enables boy racers effectively to thumb their noses at the police over the issues concerned. So by-laws are one part of this—in particular the interpretation of these terms.

A number of submitters raised concerns about the sort of legitimate activities that they hoped would not fall under the definition of cruising, which is why we ended up with the definition we did. I think that although the submission process was actually quite a good one, and a number of good submissions were made, as Darien Fenton has already raised, the consideration and deliberation phase in the select committee was rushed and quite flawed. We had to deal with things without the documentation in a timely manner, due to some reasoning on the Government’s part that we had to meet some sort of timetable that it had put in place. We were not able to really get down and deal with issues like the question of the cruising definition I just raised.

As I said, if we distil it all down, one of the key issues that came up in the submission process was the issue of noise. Noise is fundamentally the most significant problem that boy racers create. I recognise the fact that provisions are already in place that allow us to deal in some way with noise. They are the Land Transport Rule: Vehicle Equipment 2004 and the Land Transport (Road User) Rule 2004. Those rules provide a range of powers to deal with the issue of noise, but they require sufficient policing resource to do just that. That is a fundamental problem with this legislation, because we are seeing cuts to police budgets at the moment, and we are seeing police cars being taken off the roads. In fact, overwhelmingly, our deliberations showed that police resourcing is the key to dealing with the issue of boy racers. Thank you.

Dr RUSSEL NORMAN (Co-Leader—Green) : I stand to speak on the second reading of the Land Transport (Enforcement Powers) Amendment Bill. The Green Party will be supporting this bill, and I have a few short comments to make on it. We in the Green Party support the right of local councils to set by-laws to clamp down on illegal street racing. We think it is essential that councils have those powers, and we support them in doing that.

However, we think that the term “cruising” requires rather more work, as it is a rather loose term, and the definition is pretty loose. The current definition is quite broad, and could encompass, for example, the activities of political parties, such as the convoy of ACT Party sport utility vehicles (SUVs) that were cruising in Mount Albert earlier this year. They were cruising up and down, chewing through gas. We think that the ACT Party’s SUVs could have been caught within the “cruising” term, because that term is a bit loose.

We also think that making vehicle impoundment mandatory may not be the best course of action in all situations, and that it is essential to retain flexibility and discretion for the authorities. Impoundment may have its place, but we think that without some flexibility in the use of impoundment, people will just feel alienated. Heavy-handed enforcement is not always the best strategy. Sometimes it is the only option, but it is not always the best strategy. Boy racers and girl racers are, in fact, examples of young people who are creating their own communities of interest. We should be trying to direct them in constructive directions, rather than simply coming down on them like a tonne of bricks in every situation or occurrence. Obviously, there is the need to have these powers, but we have to ask ourselves this: if we clamp down on young people’s civil liberties and further alienate them, how will that help us? Motor racing is a big business and a legitimate sport, and it would be good to steer young drivers into a more structured and safer environment, where they could race or even just parade their vehicles. We should not forget to find them opportunities to do that, because if we simply go in there and use impoundment and heavy-handed enforcement, we may find that we make the problem worse. It is a matter of using discretion and using our brains to deal with the issue.

The Green Party particularly supports the provisions of new section 121A, inserted by clause 26, where enforcement officers may give directions or immobilise vehicles if drivers such as those on learner or restricted licences breach their licence conditions, and of new section 128C, inserted by clause 27, about vehicle inspections. These are both good safety measures, and I welcome the comments from the Minister about road safety. I will have a few things to say about that myself.

The police already have the powers to deal with people who drink alcohol in cars. That drinking leads to many of the problems associated with illegal street racing. We would prefer the police to have the resources they need in order to enforce the current law around driving and drinking, and we think that that needs to be the first priority. We also welcome the work of the Law Commission on the control of the sale of alcohol, which is also an issue of safety. Of course, the Greens have been advocating for quite some time, with the previous Government and the current one, for there to be restrictions on the advertising of alcohol on television, but so far our efforts have been without any success.

In terms of road safety, which the Minister alluded to, certain things are absent from this bill. For example, we know that it has been very difficult for some communities to impose lower speed limits. The roading authorities have been extremely resistant to communities lowering speed limits, yet we know that doing so would make a significant contribution to safety and may even help with the issues that this bill tries to deal with. There is also the issue of safety for cyclists and pedestrians. Our roads are designed so that they are extremely unsafe for cyclists and pedestrians, and it would be great to see central government agencies become interested in making our roads safe for cyclists and pedestrians. If we want to improve safety on our roads, of course, it would also be great to move freight off the roads. Instead, this Government’s priority is to move freight on to the roads. So if road safety really were a central concern of the Government, it would address those issues, not to mention that it would invest heavily in public transport so that we can reduce the number of cars on our roads in the first place.

None the less, in spite of the weaknesses in and absences from this bill, the Green Party will be supporting it, and we commend it to the House.

DAVID GARRETT (ACT) : It is always a great pleasure to rise and find things to support in speeches from the opposite side. In this case I was glad I was sitting down, because I thought for a while there I would have to agree with everything that Dr Norman said. The first part of his speech was extremely sensible. He said he would support the Land Transport (Enforcement Powers) Amendment Bill, and made some very sensible comments. Then, sadly, he departed a wee bit and provided me with something to act as a foil, which was the idea that these guys and girls are basically just sad youths who really need facilities to be provided for them. It is the idea that if we provide burnout pads, they will all happily pour their diesel there in a paddock somewhere, surrounded by hurricane wire fencing, and everything will be fine. Well—

Dr Russel Norman: Not from the libertarian wing of the ACT Party, are you, David—not from the freedom-loving wing?

DAVID GARRETT: I will come to that, I tell Dr Norman; I will address that in a moment, but I was obliged to respond to the points he made earlier. It is the same as the phenomenon of skateboard parks. Every time I am driven to the airport when going home from here, I pass a large skateboard park down by the supermarket in Chaffers Street. I think the most skateboarders I have ever seen there would be two. But that does not stop them from going down Molesworth Street, frightening pedestrians, going up walls, and on to fences, because part of being a young punk—as many of us were—is breaking the rules and causing trouble. I tell Dr Norman that I am sorry but the idea that all we need to do is to provide them with alternative outlets and everything will be fine is very naive. Again—

Hon Clayton Cosgrove: Hear, hear!

DAVID GARRETT: Good God! I am glad I am propping myself up, because Mr Cosgrove is agreeing with me, and that is a rarity. Dr Norman said quite rightly that the ACT Party was the party of freedom, and for that very reason there have probably been more debates on this among members of our caucus than there have been in the Greens’ caucus, and that is amusing—

Hon Clayton Cosgrove: More than the gang patches bill?

DAVID GARRETT: At least as much! The question is the balance between the rights of people to do as they wish, which some people say is classical liberalism—I do not quite agree—and the rights of others to enjoy their lives without their rights being infringed. That is the balance. Doing what we like regardless of infringing others’ rights is not liberalism. With the limited amount of political philosophy I know, I believe that that is anarchism, and we are not the party of the anarchists. Liberalism means freedom to act without State interference or interference by others as long as one does not interfere with others. All the speakers from Labour and National, as well as Dr Norman, have pointed out that this bill is about stopping those people who are causing sleepless nights, anguish, and distress to people who are going about their lawful business. It is about people being able to enjoy a balmy evening barbecue in Christchurch without having a bunch of clowns driving up and down the street with their large-bore exhausts, which substitute for other things. It is about having a balance.

The Land Transport (Enforcement Powers) Amendment Bill is not a perfect bill. It would not be here at all if Mr Cosgrove’s measures had worked. They were a good effort, a good try. He tried to make the measures work, but this bill is necessary because those guys, as is the nature of the beast, have found ways round the legislation.

People sometimes say that these things have always been with us, and that nothing has changed since the internal combustion engine was invented. I am someone who is, sadly, in the upper quartile of the age range in this House—or beyond the middle, anyway—and I can say that in my lifetime hot-rodders—as they used to be called—have always been with us. But there is a difference. I remember seeing a chap on the telly the other day talking about traffic cops in Auckland. He was about 65, and he said that a particular cop was probably still looking for him, and everyone laughed. It was a game, but people knew the rules. If people went hooning down Queen Street and got caught, they took their medicine and paid their fine; or, in those days, if they did not pay their fine they did 14 days in jail.

As other speakers have said—Ms Beaumont, for example—we have a generation today who know, because they are very skilled-up on their rights but not on their responsibilities, that fines do not matter. Fines are essentially a voluntary thing in this country, and are paid only by the middle classes. Someone can rack up 30 grand in fines, and eventually some silly judge will say that that person will never be able to pay that amount, and the judge will waive the fine. These guys know that. This bill attempts to take a different tack in the realisation that fines are not working. It recognises two things that those guys value: their car and their licence. It moves away from the focus on fines and towards demerit points, leading to a loss of licence. That is sensible because the fine approach has not worked.

It comes back to rights, which are competing rights. No one has the right to race up and down suburban streets with big-bore exhausts, causing upset to others. It is as simple as that. If people want to do that on their own property or on daddy’s property, that is fine; they can do what they like. I personally believe that they can kill themselves if they like; I do not really care. But if they want to race up and down Moorhouse Avenue or Harper Avenue in Christchurch, or wherever the spots are in South Auckland, and disturb people going about their lawful business, then we need to find ways of curbing them.

The legislation that has gone before has not worked, so this bill is an attempt to have another go at it. We can laugh about the limitations of the definition of “cruising”, and everyone has been very careful not to extend the analogy too far, but it will be shaken out and we will see whether it works. Some members of our party have said—as I have admitted freely, there has been considerable debate in our caucus and among our membership—we do not need this law, because the problem seems to be solved in Auckland. I met with the police up there, and the problem is not solved.

Hon Tau Henare: Come out west!

DAVID GARRETT: Exactly. The police target a particular area. The boy racers—for want of a better term—decide it is not worth the hassle, so they lie low for 3 weeks, then turn up out west. So the problem is not solved.

The other sinister thing is a significant difference between the Christchurch problem and the Auckland problem. Whereas the Auckland boy-racers are predominantly working class, mixed race, and from the lower socio-economic group, the Christchurch group are predominantly white, middle class, relatively well-educated—especially about their rights; they know all about rights but not about responsibilities—and include a significant number of white racists.

Hon Clayton Cosgrove: Are you out of touch completely?

DAVID GARRETT: No, not at all, I say to Mr Cosgrove. I am probably more in touch than him. I bothered to turn up yesterday to the Crimestoppers launch, which he was invited to, but was too busy to attend.

This law is necessary because previous attempts have not worked. It is not perfect. We may well amend it next year or the year after, but it is another attempt to ensure that people’s lawful enjoyment of their lives is not interfered with by those who simply wish to disrupt them. Thank you.

DAVID BENNETT (National—Hamilton East) : It is a great pleasure to speak on the Land Transport (Enforcement Powers) Amendment Bill. This legislation has been canvassed widely in the public eye and also in this Parliament. When we think about the bill we think of the terminology “boy racers”, which is convenient in the public eye, but with this bill National has shown an ability to listen and to deliver to people, especially in the great city of Christchurch, where boy racing is a huge issue. We went there and heard from the council and many individuals in that area. When we heard some of the stories, many of us could not believe that people had to deal with antisocial behaviour on such a scale, which we would not expect to result from this kind of activity. I think we need to pay tribute to the National Government for actually delivering to the people of Christchurch, because they have waited long and hard for this to happen. Members on the other side of the House have been saying that other cities are affected as well as Christchurch, and it is true that other cities have had to deal with this issue as well, partly through a combination of the use of legislation and police powers, and what others intend to do in a particular city.

I say boy racing is problem, and it is problem that we intend to deal with. The previous Government had a chance to do so; it had 9 years, and it did not deliver for the residents of our major cities who wanted to have some peace and quiet, or for the businesses in our major cities that wanted to be able to carry on operating hotels and other businesses. National has delivered; it has listened and delivered.

Hon David Carter: They did a lot of talking about it.

DAVID BENNETT: Exactly. The previous Government talked about it; we have delivered. The people of this country know that, and they will be thankful to National for doing that. It was a great pleasure to put this bill forward. Thank you.

MOANA MACKEY (Labour) : It was hard to believe that the previous speech was from the chair of the Transport and Industrial Relations Committee. One would have thought that the chair of the select committee might have had a little bit more to say about legislation that he thinks is so great than 30 seconds of random comments and rhetoric strung together. David Bennett will be able to add to his resume “random rhetoric generator” when he leaves this place, because he is capable of delivering speeches that go for 10 minutes and saying absolutely nothing. I pay tribute to him for that skill; it is very difficult to speak for 10 minutes and say absolutely nothing. This time, fortunately, he spoke for only 30 seconds and said absolutely nothing.

One thing he said was that this Government is delivering to the people of Christchurch. They are going to pass legislation that does nothing more than the legislation that Labour passed when we were in Government; it does nothing more than the legislation that my colleague Clayton Cosgrove put through when we were in Government, and he is a Christchurch member of Parliament who knows the reality of what people in Christchurch are having to deal with. I do not know whether David Bennett just did not read his research notes properly or whether, once again, we have National trying to rewrite history. But the fact is that while Labour will support this bill because it backs up what we did when we were in Government—

Hon David Carter: Huh!

MOANA MACKEY: —we have serious concerns, I say to Mr Carter, about whether it will do anything. We support any moves to enhance the power of the police to deal with illegal street racing and with the antisocial behaviour that goes along with it, and we know how terrifying this behaviour can be for many members of our community who have to deal with it. The noise is very intimidating and people are scared to go out on the streets at night, particularly if they live on a main drag. I myself live in a cul-de-sac but it is a cul-de-sac that is nice and long—

Hon Tau Henare: What sort of sack?

MOANA MACKEY: Watch it! It is a long cul-de-sac and we have a lot of boy racers who love to whizz up and down it. One night, it would have been about—

David Bennett: I hope we are not paying for the bridge.

MOANA MACKEY: I am sorry?

Hon Clayton Cosgrove: Get the breathalyser out.

MOANA MACKEY: I know. The member’s interjections are just as incomprehensible as his speeches. One night, it would have been about midnight, I was sitting in the front room of our house. We know when we hear that boy-racer sound coming down the street, and then hear the terrifying noise of a car skidding out of control and just wait for the crash. Well, the crash came, and thankfully the car took out a tree on my front lawn, which I was quite fond of, and did not take out the front room of our house. If the tree had not been there, there is absolutely no doubt that that car would have come straight through the front room of our house.

John Hayes: What’s that got to do with the legislation?

MOANA MACKEY: It was a boy racer, I say to Mr Hayes. He might want to listen, instead of interjecting the whole way through my speech.

So I understand how terrifying this can be. I went outside and found the boy racer backing away hurriedly, but fortunately he left his front bumper behind with his licence plate number on it, which made it a lot easier for the police to trace him. I can absolutely testify to the fact that it is terrifying when it happens. When it happens on a main drag, when there are a lot more boy racers than just the one or two I get every Friday and Saturday night, it is a problem that needs to be dealt with.

My question is whether this bill will actually do that. I have serious doubts that it will. There has been a lot of talking up of this legislation. As I said, Labour will support it, because we do not think it does any harm, but we need to make sure there are the police resources behind this bill, to make sure they can police it. There is no point in having laws if we do not have the police resources to back them up. On Friday and Saturday nights that is a real issue. But it is good that this law is being updated. As I think Mr Garrett said, times do change, and laws do need to be updated to reflect the reality of what we are dealing with. When I was at high school, only one of my friends had a car. It was a Morris Minor, and if it went above 75 kilometres per hour, bits started to drop off it. One day the gearbox dropped out in the middle of the intersection of Lytton Road and Gladstone Road, and that was the end of the car.

If one goes to a high school now, one cannot get a park because of all the students’ cars parked there. The fact is that more young people have cars nowadays, the cars are more powerful and more expensive, and the laws need to be updated to reflect this reality.

It is important that this bill differentiates between those who are causing a serious problem and those who are acting legally—those who are law abiding. There is nothing wrong with having a car, and there is nothing wrong with enjoying having a car and taking pride in it. If a young person gets a part-time job and saves up to invest in a vehicle and work on it, and takes pride in it, that is a good thing. One of the problems we have is that it is difficult for the police to differentiate between those young people who are law abiding, who are acting responsibly, who just want to be able to enjoy their vehicle without causing problems, without being antisocial, and without scaring and intimidating people, and the ones who are causing all the problems that we are trying to deal with in this legislation—the ones who want to act illegally, the ones who want to act dangerously, the ones who put people’s lives at risk, the ones who terrify our elderly people, terrify our families, and the ones who keep our families off the roads on Friday and Saturday nights. That is one of the most important things that this legislation can do.

I am a member of the Transport and Industrial Relations Committee, but I was not on it for most of the deliberations, because I was on the ridiculous Emissions Trading Scheme Review Committee, which was a waste of time. But I understand that there were a number of submissions on the bill. There are a large number of young people out there who hate this problem as well, for the reasons I have outlined. They do not want to be targeted for what their peers are doing. They do not want to be targeted when they are acting legally and responsibly, because of the actions of a few idiots who come alongside them. I think they probably have a better idea than we do of what would work to stop those people. We come from a completely different generation. Tau Henare probably acted up by listening to rock and roll music—

Grant Robertson: On his crystal set.

MOANA MACKEY: That is right; on his crystal set. There are a lot of young people out there who would tell us what we can do to knuckle down on these young people and make it difficult for them to act in the way they do. We should engage those young people who want to be part of the solution, and then we can help to deal with the young people who are the problem that we all want to solve.

I shall talk about police resourcing. This bill will not work if we do not have police resourcing. I know that Government members do not want to hear about police resourcing; they are out there, taking police cars off the roads, and closing police stations. As any of us who have been out with our local police on a Friday or Saturday night know, the police can be overwhelmed by the sheer number of people whom they have to deal with, particularly when it comes to illegal street racing. The police need to be in a million places at once. The police also have to deal with the serious problems of domestic violence in this country, which often come up on Friday and Saturday nights when people have been out to the pub or have been drinking at home. When the police get a call to say that there is an illegal street race occurring, there are often not enough police officers out on patrol on Friday and Saturday nights to be able to get over to the other side of town or out to the rural areas where a lot of this activity happens. These people know that the police cannot get out to those areas fast enough. They know that the police will be tied up in town with the liquor bans and with all the issues that occur in the cities.

If we really want to crack this problem, we need to drastically increase our police numbers, and we need to drastically increase their resources so that they are able to deal with this problem. [Interruption] I say to Mr Woodhouse that we can pass all the laws in the world, but if we do not have the police numbers to enforce them, they will not make a blind bit of difference. I think it is a very good idea to allow our local communities to make by-laws relating to this issue. They know where the problems are, they know what will work, and it is much better than having a top-down approach from central government, where we decide what will happen. The local people can make that decision. I hope this bill works.

John Hayes: Boring.

MOANA MACKEY: I say to Mr Hayes that I think he is boring, so there we go; we are equal. I hope this bill does make a difference. I seriously doubt that it will, but, as I said, it will not cause any harm.

The confusion around the definition of “cruising” just highlights how difficult it is to legislate in this area, and how much easier it would be if we gave the police more resources to deal with the problem that we have and to use the laws that we already have. I remind this House that Clayton Cosgrove’s legislation already allows for the permanent confiscation of cars, yet the courts are not enforcing it. Once again, if we do not have the police resources to back up this legislation, it will not work. If the courts are not prepared to back up Parliament’s intention, which was to allow for the permanent confiscation of vehicles where there is a serious recidivist problem, then we will never get on top of this problem, as my colleague Lianne Dalziel said. We need to make very clear Parliament’s intentions in the event that the courts do what they did with Clayton Cosgrove’s legislation, which was to have such a low rate of confiscation as to render it ineffective compared with what it could be if they followed Parliament’s intentions.

The definition of “cruising” is difficult, and we will trust the police to use their discretion—that they will know that an ACT Party cavalcade is not cruising, and that illegal street racing is cruising. Once again, this is another law and order bill that is all public relations and no substance. As we say, it does not do a lot of harm. Government members will go out there and crow about it, but the reality is that it is not a lot different from the present legislation. I look forward to the next stage of legislation and the support of this House for Labour’s amendments that will toughen it up and make it easier to enforce.

Hon TAU HENARE (National) : We have just listened to 10 minutes of diatribe from Moana Mackey. We have just listened for 10 minutes to a person who had the gall to accuse the chairman of the Transport and Industrial Relations Committee, Mr David Bennett, of having no substance. She said that his speech was only 2 minutes long and there was nothing in it. I have been in this place for a wee while. I have listened to some good speeches, and I have listened to some bad ones. The point made by Moana Mackey at the end of her speech, which was the best part, was that the Land Transport (Enforcement Powers) Amendment Bill was “all public relations and no substance.” That speech was 10 minutes’ worth of public relations and no substance.

Most people in this House will support the bill. There was nothing in what that member said or, for that matter, what anybody from Labour said, including Darien Fenton, who went on about the bus strike, for goodness’ sake! She went on about the bus strike. Her speech had nothing to do with the legislation before the House. All she did was prattle on about the poor people in Auckland, because some bus drivers and a bus company cannot get their a. into g. That is all she prattled on about.

This is a serious bill. It is about mayhem on our streets. It is about people who do not care about the community. Yes, there are people in west Auckland who have to sit by their windows and listen to the boy racers as they go up and down. Let me tell the House something. More important, let me tell the boy racers—and I hate using the words “boy racers”—

Hon Clayton Cosgrove: Hanging on every word.

Hon TAU HENARE: I am sure they will be. They will be lined up on the four avenues right at this point in time, and they will be listening. I tell them that when they have five children, and three under the age of 5, and they are trying to get them off to sleep at night, and some hoon is going up and down past their window, they will be on the verge of nuttiness, as most people in this country are when they have been not only attacked by—and I mean attacked by—noise, but also—

John Hayes: Assaulted.

Hon TAU HENARE: —assaulted by antisocial behaviour.

Darien Fenton: Try getting three over 5-year-olds to school with no buses.

Hon TAU HENARE: What? Oh, now that member is on the buses again. I am dumbfounded, and all I can do for the House in response to that member is to say thanks very much, and sit down.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : Tonight we have heard an interesting debate and a bit of jocularity, which I suppose is not unhelpful in these circumstances, but I will bring us back to earth a little bit by quoting the Police Association, which made a submission on the Land Transport (Enforcement Powers) Amendment Bill. I agree with one thing that the previous genius of a speaker, Tau Henare, said; this is a serious issue, even though he behaved like the local court jester. When making a submission before the select committee, the Police Association said that between 2004 and 2008 illegal street racing was implicated in the following figures: 49 fatal crashes, 160 serious-injury crashes, and 376 minor-injury crashes, resulting in 56 fatalities, 247 serious injuries, and 762 minor injuries.

I note that when I introduced a bill on this issue, Mr Garrett and his party dealt with their principles, as that party always does—I think there was one other party, but I particularly remember Mr Garrett’s party—and vehemently voted against it. As the debate goes on I will quote to him his former colleague Deborah Coddington, but I will not waste a lot of time on that party. Its principles wave in the breeze like a piece of dry straw. I will say that I struggled with trying to assess the mentality of those people. One would think that after so many times of going out on a Friday night and coming back less one friend because he or she is dead, or having lost a mate or mates because they are dead, the average human being under normal circumstances would say, as young people generally did with drunk-driving through Students Against Drunk Driving: “We’ve had a gutsful. This is silly. We’re losing too many friends.” At a very basic level, one would think that that is what some of those people would do.

I have heard people talk about civil liberties, and I have heard the old tried-and-true arguments rolled out. Having been directly on the sharp end of behaviour by these people, I say that in my view they do not reflect 95 or 99 percent of young people. They are a small but growing group who are intimidatory. Many of them like a bit of violence. I remember doing a live TV interview with a young guy called Hemi, who was beatified by the Christchurch Press because he wrote a few slick letters to the editor and everybody thought this young fellow was a genius. I believe that he was then done for violent crime. The police told me his rap sheet, but he behaved as if he did not give a damn about anybody else, including his mates. He took the view, as many of these people do—reflecting badly therefore on young people per se—that it would not matter what we did, whether by giving him facilities for free or passing any laws, because he did not give a damn.

In my own electorate, Waimakariri, I attended a meeting out at Mandeville with a really good group of people. Out there they had had 400 boy-racers or girl-racers, call them what you will, leering it up. A police senior sergeant, Peter Cooper, a fine gentleman, was there, and there were a couple of the hoons. They were two thugs. I was publicly criticised for calling them thugs. Well, to hell with that; they were thugs, and they are. A woman stood up and said that the night those guys came around—and they mostly were guys—leering it up, kicking the letterboxes over, and creating merry hell, she was nursing her mum, who has since died of cancer. That is a factual story. This woman asked this young guy a reasonable question. I paraphrase, but she basically said “Come on, mate, fair go.” She said that it was a terrible night for her and that she did not need the leer up—I am using my words, not hers—and she asked him what he thought of that. I will not repeat the four-letter word that was used in response to that, but let me put it in more parliamentary language. He said “Well, I don’t really give a damn.”

If we think about the person we might hate in our lives the most or the person we think might be most disreputable in our lives, I suspect even that person may have had a pang of guilt or compassion in that situation. But I have to say that some of these people do not. They are intimidators. They are violent. Some people call them hot-rodders and some call them hoons and say that we all did it, generation to generation. Maybe that is true, but these people are not car enthusiasts. I support car enthusiasts. Young people who were car enthusiasts came to me. They act legally, putting a lot of dough into their cars—some people collect stamps. I do not have a problem with that. They act legally, showing off to their mates and parking the car across the road, but acting legally. I support them in their hobby; it is a good thing. But let us be very, very clear that people have died, violent acts have occurred as perpetrated against the police and innocent folk, and we in the Opposition support acts by this Government against that behaviour.

I will show the Government the same courtesy that some of its members showed me—I think Gerry Brownlee was one—when I tried to do my bit. I said it was not a utopia and that the legislation I was introducing was not a silver bullet, but I was the only person in this House, including members of the Opposition of the time, who brought legislation on this, as a private member, to this Chamber in 9 years. Members opposite criticised me for years after, but they never got up and brought legislation as a member’s bill. Of course, Stephen Joyce was not in the House then, but neither the current Minister of Police nor others got up and said “Cosgrove, we do not think it is working, we will put our own legislation up.” They never did that. In this robust way, I ask them to reflect on some of those issues.

We will not vote against this bill. We will show the same courtesy that I was shown, but I say to the Opposition—

Hon Judith Collins: We are not the Opposition. We are the Government.

Hon CLAYTON COSGROVE: I say to the Government, that is, and I will say it in greater terms in the debate on the companion legislation, that although Government members are concerned about the parliamentary niceties, people out there are concerned about the substance.

I say to Government members that I do not think this bill will have the effect they intend. If the Government had brought this bill and the companion legislation in a mild way to this House and said that in its best endeavours it wanted to do something, then, OK, we would have had a closer look at it. There has been a lot of hot air. I am not allowed to use the word “crusher” in conjunction with the name of a member of this House, so I will not. Although the testosterone has flowed, although it will be all on once these bills are passed, and although a certain Minister considers this legislation a cause celebre for her, we will see.

There are problems in respect of the definition of “cruising”. I know some commentators have said that cruising is called “trying to find a park in Christchurch”. Looking at the definition, we could argue that it defines a vintage car club. I do not know how the police will enforce that, and I suspect that a boy or girl racer may well test that particular definition in a court, and a court, through case law, will be required to rule on it. When I passed my bill I thought that some little smart person would have a go—

Hon Judith Collins: You didn’t pass your bill; Parliament did.

Hon CLAYTON COSGROVE: —my Government passed it, I say to the Minister—test the law, and a judge would weaken it. I was thankful that they did not.

Hon Judith Collins: We helped you.

Hon CLAYTON COSGROVE: Now the Minister is taking credit for our legislation, as well. That Minister is good, I must say.

Hon Judith Collins: I know she is.

Hon CLAYTON COSGROVE: “I know she is.”, the Minister says. That woman is a legend in her own lifetime. She is so good. What is the old saying that Shane Jones says? A kumara does not say how sweet it is. Well, my word, that Minister says she is full of sugar; she is full of it. We know that. I look forward to the next bill, but I say that we will allow this bill to go through because we believe it is worth a crack to try to sort this issue out.

Looking at what has been put up, I say that I like the demerit point stuff. I think that has merit—excuse the pun. There are a number of provisions that are catered for in existing legislation, but we will not stand in the way of those who wish to pass the legislation. I argue that this bill and the companion legislation are more about sloganeering, about being seen to be tough, and about winning a headline than they are about the substance of the issue. That is less so in the case of this bill than in the next bill, the Vehicle Confiscation and Seizure Bill, that we will address. It is less about substance and more about desperation on the part of a certain Minister to be seen as “tougher than tough”, as I think she said in the article in North and South. I invite members to read it.

Hon Judith Collins: Oh, you’ve read it!

Hon CLAYTON COSGROVE: Oh yes, I read it. It was another eye-opener into how modest that Minister is. I have to say that that Minister makes Tim Groser look quite modest in many respects.

This is a serious issue. I know people in Christchurch, and I say to Mr Bennett that he should get a life. He should go and walk through the crowds in Christchurch, like I and other politicians have. I do not think the kids in Christchurch are much different from those in Auckland. David Bennett orbits a different stratosphere from most of us, but I tell the member that this is a serious issue. It is a serious issue in Hamilton, where I launched the bill that we passed. It is a serious issue in Auckland and Christchurch. It goes beyond nuisance. It goes beyond physical intimidation to violence, and, sadly, as the police has said, to the worst of all consequences: young people and other people dying on the roads.

MICHAEL WOODHOUSE (National) : I will start by saying, in relation to the first half of the previous member’s speech, that I absolutely agree with him. Despite the jocularity that we have had tonight, this is a very serious issue. The Hon Clayton Cosgrove went somewhat AWOL in the second half of his speech, though, and into some areas that I, frankly, could not follow. But I think the point he made was a very good one: this is a serious issue.

Between the first and second readings of the Land Transport (Enforcement Powers) Amendment Bill, there was an accident in the city of Invercargill—some members may recall it—where an illegally modified car slammed into a wall, killing three teenagers. I well recall video footage of the funeral, where two of the caskets were draped in Tui flags, and a young man, standing up in tribute to those fellows, said: “Keep on cruising.” Well, here is the message. They are dead. They are not going to cruise any more. The Green member Dr Russel Norman talked about changing attitudes, but those sorts of things will take a long time to change. This is about changing behaviours.

I have to be a bit gentle on Moana Mackey, because she did not hear the submissions made to the Transport and Industrial Relations Committee, particularly those in Christchurch. When she says that this bill will do nothing more than what the previous Government said it would do, I say that she was not there when the people of Christchurch said with one voice: “Thank goodness we have a Government that’s listening.” That is the measure of the concern that that city has around this issue, including the concern of some submitters who were so traumatised by their experience with illegal street racers that they did not even feel confident enough to speak up. Their local member of Parliament, the Hon Lianne Dalziel, came along and made a submission to the select committee. I am sure those people were very grateful to that member, because she articulated the sorts of fears they had. This House should not be under any illusions. Despite the attempts by car enthusiasts to portray street racing as some sort of innocent recreational activity of an evening, it simply is not. We had a long line of submitters who said so.

I will quickly touch on some of the things that are not in the bill, because they dominated the submissions. I think we need to elaborate a little bit more on the issue of noise. Submitter after submitter said that if we want to control the issues around illegal street racing, we have to control the noise because that is how this issue is manifested. In particular, a number of councils, including Christchurch City Council and Waimakariri District Council, talked about using the Australian noise control standard of 90 decibels. The select committee considered that very carefully, and I think that despite the fact there is no change to the bill as a consequence of those submissions, it does behove the members of the select committee in the House to explain to those submitters why that is.

The officials gave the select committee some very good advice around the fact that most of the noise is actually coming not from the engine but from the tyres of the cars, particularly at speed. A lot of the noise complaints are due also to the people inside the cars and the music inside the cars. The issue was very carefully considered, and was one that the police also helped out with, by saying that they felt they were able to police noise effectively with the powers they had, and with the extra impoundment and restraint powers that this bill would give them. So I want to give all submitters, and the people of Christchurch particularly, the reassurance that the fact we did not put a change in the bill as a consequence of their submissions around noise does not mean that we did not take that issue very seriously.

There are a number of other submissions that I will discuss during the Committee stage of the bill, but I just wanted to touch on that. I commend the bill to the House.

TE URUROA FLAVELL (Māori Party—Waiariki) : Kia ora, Mr Assistant Speaker Roy. Tēnā tātou katoa i tēnei pō. Kia ora tātau me te āhuatanga o tā tātau noho i tēnei pō.

[Greetings to you, Mr Assistant Speaker Roy. Greetings to us all tonight. Greetings to us in respect of how we are sitting tonight.]

The last month has provided more than enough reason for the Land Transport (Enforcement Powers) Amendment Bill to be progressed through the House. This month began with a 3-year jail term handed down to a young man in Christchurch, I believe, who was racing another car and probably going over 150 kilometres an hour when he lost control of the car and slammed into another vehicle. The impact of the crash was so severe, I am told, that it basically tore his vehicle in two. But by far the most profound impact was felt in the lives of the families who continue to suffer from an accident that never needed to happen, an accident that injured the driver and killed the woman passenger, Laureen Reilly. Over the hill in Masterton a three-car crash on the rural Manaia Road involving carloads of students from Wairarapa College was a depressing reminder of a period of 5 years earlier when a Wairarapa College student had been killed in a crash in similar circumstances. Even in my own area in the rohe of Waiariki, we too have experienced the chaos and catastrophe that seems to be part of the association with illegal street racing.

A little over 3 weeks ago, as some members might recall, Rotorua went through the spectacle of what was supposed to be a peaceful protest or demonstration against the suite of legislation we are debating tonight. There were some 900 people gathered and 230 cars. There was not much evidence of peace to be seen, with the amount of abuse being pelted out at the police, not to mention the bottles that were thrown, the windows smashed, and the cars damaged. All in all, 31 arrests were made, five cars impounded, and two police cars damaged by that demonstration of wills.

The legislation we are debating today will increase the powers of councils and police to disrupt, deter, apprehend, and prosecute drivers who are street racing. If we were to believe the positions put forward by those who represent boy racers, we would think that they are a law-abiding group that simply wants to have a forum to be passionate about their souped-up cars. But the situation that occurred in Rotorua last month threw absolute doubt on the accuracy of any such claims by that group. The protest apparently attracted supporters from Auckland, Taupō, Hastings, and Tauranga. I would be the first in the House to defend the rights of any citizens to put forward their case, to have the opportunity to protest, to challenge, and to articulate the views they believe in—absolutely. But the focus must surely be on the principles that the protest movement is defending, and not behaviours which detract all attention from the actual cause itself. Those arrested in Rotorua face charges including breaching the liquor ban, drink-driving, unpaid fines, driving while disqualified, and possession of methamphetamine. There are a whole host of public safety issues here, including senseless injuries and the deaths of young people and innocent bystanders, that mean we must look seriously at how the boy-racer culture contributes to such situations. We are concerned about a whole range of safety issues raised by, for example, the pouring of diesel on the road, speeding, and the driving of unsafe vehicles.

I was interested in the positions put forward by YouthLaw Tino Rangatiratanga Taitamariki, which raised questions about the reasons why the boy-racer subculture was being targeted, rather than, say, a firmer stand being taken on the offensive behaviours demonstrated by any drivers breaching the law. The report of the Transport and Industrial Relations Committee noted that some of the antisocial behaviour associated with illegal street racing is caused by alcohol consumed in cars. In actual fact, of course, someone who consumes or possesses liquor in an open container within a car can be in breach of the liquor control by-law under the Local Government Act 2002. The committee also noted that the recent Law Commission review on the effects of alcohol discusses the issue of the possession or consumption of alcohol or liquor in open containers within a vehicle. So if drink-driving causes problems, there are other mechanisms that can be relied upon. Some submitters pointed out that alcohol plays a far greater role in accidents, and therefore should be accorded a higher priority above illegal street racing. For us in the Māori Party the question of balance is the key issue.

Josh Hāwira of Hamilton told the Transport and Industrial Relations Committee that this bill ignores basic human rights under the New Zealand Bill of Rights Act—namely, freedom of association, peaceful assembly and movement, and the right against disproportionate punishment. In his view having one’s car impounded for simply driving around would in most cases be disproportionate. It was a view shared also by Mātene Te Aho, who asked the committee to look beyond penalising boy racers per se and instead refocus efforts on applying and enforcing existing laws to control public nuisance or disorder related to antisocial behaviour. Mātene described various initiatives trialled in Manukau, Hamilton, Tauranga, and New Plymouth to control boy racers, including, for example, a skid pad in New Plymouth, which has been instrumental in reducing the number of street races on the nights on which it is opened up to boy racers.

Another range of interesting ideas came from a group called Activate, a Wellington-based youth advisory group with members aged between 15 and 21 years. Activate collected a wide range of views through surveys and talking to young people. Those views included the opinion that the Land Transport (Enforcement Powers) Amendment Bill created mistrust between young people and the police. Oliver Ibbetson, Tai Ahu, and Alexis Luo represented those views to the select committee, noting that their advice included the perspectives of young car enthusiasts, youth workers, and other interested young people. The overwhelming theme in their analysis was that the proposed law would not achieve what it was designed to achieve, and that the real issue of education around driving attitudes was being ignored. In the words of one of the participants: “It will decrease the number of racing cars on the street but not necessarily change driving behaviours.” Another theme from Activate was that heaps of young people felt that there was no real harm in cruising.

In this House tonight we may have different views and opinions about street racing—indeed, this legislation makes that very evident. However, in the process of introducing any changes to laws that will have some direct relevance to our young people, we must make it absolutely clear that we want to consult young people, we are concerned about their views, and, what is more, we will listen to them. If young people are truly alarmed that their rights as car enthusiasts will attract more serious legal consequences, we need to ensure that their views are heard and, in our response, demonstrate that their views do matter. We must provide opportunities for our young people to be involved in decision making that affects our communities. The Māori Party will be supporting this legislation because we support any initiatives that are designed to promote public health and to prevent the ongoing record of death and injuries to young people. Although the factors of public nuisance and disorder—the noise and tragic street crashes—are the causes that this legislation responds to, we must never lose sight of the outcomes of the health and long lives of our population. Thinking of the people, and particularly our young, the Māori Party will vote in support of this bill and the accompanying Vehicle Confiscation and Seizure Bill. Kia ora tātou.

• Bill read a second time.

Hon JUDITH COLLINS (Minister of Police) : I move, That the Vehicle Confiscation and Seizure Bill be now read a second time. This bill, along with the Land Transport (Enforcement Powers) Amendment Bill, builds on existing legislation to enhance the powers of the police and the courts to tackle illegal street racing and associated antisocial behaviour.

It is important to acknowledge the incident that prompted this bill: the January evening on which a lone Christchurch police officer was ambushed by over 300 illegal street racers and shot at with an air rifle. I thank the members of the Transport and Industrial Relations Committee, and, in particular, the chair of the committee, David Bennett, for returning this bill to the House in good time. The committee has made a sound recommendation that failure to stop for an enforcement officer should qualify for discretionary confiscation under section 128 of the Sentencing Act 2002. That recommendation has been adopted as part of the bill. The select committee has made a number of other recommendations that add clarity to the bill.

I also thank the ACT Party, the Māori Party, and United Future for indicating their support for this legislation. I understand that Labour has indicated that it will support the bill for the second reading but is reserving its position for the next stage, but I thank them anyway. I believe that this demonstrates that we have achieved the right balance in terms of this level of support—of cracking down on persistent illegal street racers without unnecessarily penalising the wider population.

I thank all those members of the public who took the time to make submissions on this bill. The majority of submitters supported the bill, stating that their sleep and lives were continually disrupted by the noise and social disorder created by illegal street racing. In particular, the submitters whom we heard from in Christchurch spoke of how their quality of life has been severely affected by the noise and mayhem caused by illegal street racing. Some were visibly shell-shocked from the relentless noise.

This bill, along with its companion bill, will provide the courts and police with powers to specifically target individuals who have no sense of community and no consideration for other people. Penalties will be directed at those individuals in order to deliver the message loud and clear: “Three illegal street racing offences within 4 years will mean that your car is up for confiscation and destruction.” In addition, the Land Transport (Enforcement Powers) Amendment Bill will increase driver’s licence demerit points for offences regularly committed by illegal street racers. These two bills will have the combined effect of systematically penalising recidivist illegal street racers to the point where the offender either has no driver’s licence or has no car.

Under the current law a vehicle owned by an offender can be confiscated if the offender commits an illegal street racing offence. If the offender commits a second offence within 4 years the court must confiscate the vehicle, unless that would cause extreme hardship to the offender or undue hardship to someone else. This bill adds a third stage to the current law, allowing the court to order that a vehicle be confiscated and destroyed for a third illegal street racing offence within 4 years. If the court does not order that the vehicle be destroyed, it must still confiscate the vehicle, unless that would cause extreme hardship.

The bill provides that the court will be able to confiscate and destroy vehicles owned by third parties, referred to as “substitute for the offender” in the bill, in cases of repeat offending. However, unlike situations where the offender owns the vehicle, the decision to confiscate is always discretionary with third-party vehicles. There is no mandatory confiscation. I believe that this strikes a fair balance between targeting illegal street racers and warning those people who may, unwittingly, facilitate this behaviour. Of course that was not dealt with in the previous bill from the previous Labour Government. A snapshot of confiscation data under the current law indicates that approximately half of all offences where vehicle confiscation was available to the courts, were committed by offenders in a car licensed to someone else.

This bill is firm but fair: the vehicles of repeat illegal street racing offenders will be confiscated and potentially destroyed after three offences. However, vehicles that do not belong to the offender will be dealt with at the discretion of the court, to ensure that third parties are not being unfairly punished for another person’s offending. However, the fact that the courts can confiscate vehicles owned by someone else provides a disincentive for parents, relatives, and friends to lend their car to any individual who participates in illegal street racing.

Under the confiscation destruction order a vehicle will be confiscated and sold to a vehicle wrecker or scrapyard. It will be a condition of the sale that the purchaser remove any saleable parts and destroy the remainder of the vehicle. This is to ensure that vehicle destruction is not an outright waste of property, especially if the vehicle has incurred outstanding fines. Once a vehicle is confiscated and destroyed, the proceeds of sale are applied to the following order of priorities: first, to pay the costs of the sale, which includes all costs incurred in seizing the motor vehicle—towing and storing it, including any prior impoundment costs. Secondly, they are applied to pay any amount owed pursuant to a security interest. Thirdly, they are applied to pay any fines or reparational court costs owed by the offender, and any surplus to the offender or substitute as if it was a substitute’s vehicle. Destruction of a vehicle is designed to be a last-resort option to punish the most serious repeat offenders, and act as a deterrent to illegal street racers.

This bill also strengthens existing provisions in the Summary Proceedings Act to seize a motor vehicle in order for unpaid fines to be collected. If fines remain unpaid after the vehicle has been seized, then the vehicle can be sold at public auction or in any other manner directed by a District Court judge. The proceeds of the sale are applied in the same order of priority as for confiscation and destruction.

As I have said previously, I acknowledge the efforts of the previous Government to address this problem. The Land Transport (Unauthorised Street and Drag Racing) Amendment Act 2003 introduced specific new offences for illegal street racing. This legislation builds upon the earlier street racing legislation, but goes a lot further in penalising individuals who persist in breaking the law. In particular, it closes the loopholes in the existing legislation that have enabled illegal street racers to circumvent the law. We know that illegal street racers frequently avoid vehicle confiscation penalties for breaking the law by exhibiting such practices as switching vehicles with each other, registering their vehicle to another person, and selling their vehicle to a friend for a nominal fee before a court appearance.

Illegal street racers will no longer be able to commit an offence in another person’s car and avoid vehicle confiscation penalties. Illegal street racers will no longer be able to keep their offending from vehicle finance companies. In the past, finance companies have been unaware of illegal street racing offences committed in cars that they have an interest in. This bill includes anyone who has an interest in a vehicle under the definition of “substitute”. This will mean a finance company would receive a written caution if the vehicle that has money owing on it is used to commit an illegal street racing offence. Illegal street racers will no longer be able to sell their vehicle before a court appearance. The Land Transport (Enforcement Powers) Amendment Bill provides that the police can issue a sales prohibition notice to anyone charged with an offence that is punishable with vehicle confiscation. Penalty for disregarding this is a fine of $2,000. The Vehicle Confiscation and Seizure Bill also provides for sham transactions by third parties to be set aside.

In addition to these loopholes being closed, measures have been taken by Police National Headquarters to ensure that the operational response to illegal street racing is national and consistent, that police are fully utilising existing legislation, and that there is a clear measurement of illegal street racing activity in each police district. I am satisfied that these operational changes will work in tandem with the new legislation to effectively clamp down on illegal street racing in New Zealand.

Illegal street racing is not a new phenomenon in New Zealand. All towns and cities have tolerated the odd hoon over the years. However, in the past 5 to 6 years the problem has escalated, and the statistics reflect that. High-powered cars, easy access to finance, and younger drivers have created a lethal combination on our roads. Since January this year, police have issued more than 1,800 offence notices for illegal street racing incidents. A culture of dangerous driving has evolved, which puts young lives at risk and has little regard for the lives of others. It is a culture that has pushed some communities to the very edge of their tolerance limit. This bill, alongside the Land Transport (Enforcement Powers) Bill, responds to the demands of New Zealanders and closes the loopholes. It gives a suite of comprehensive powers to police, the courts, and local authorities to tackle this problem. I commend this bill to the House.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I say from the outset that I will do what Minister Judith Collins does not very often do to those in front of her: I will commend her for her efforts in this regard. I support the Minister’s efforts in closing a number of loopholes that were not anticipated either by myself or by the police back when we passed the legislation. Specifically, as the Minister says, there is the loophole regarding the ability to, if you will, penetrate the third parties and go after their vehicles, and there is the tightening of the hardship provisions.

I do not believe that anybody disagrees with the impact of this behaviour. No one disagrees with that. Labour members will not stand in the way of this bill, but we say to the Minister, who read the Ministry of Justice notes very succinctly, that in putting forward the bill her rhetoric does not meet her action. I will explain why. The Minister said before we had this bill that every boy racer’s car will get closer to the crusher. She told everybody in New Zealand that people who engage in this behaviour will have their cars crushed. That is what she said. She ratcheted it up, she jumped up and down, she stomped her feet, and then we got through to the detail of this bill.

Although we will not stand in the way of the bill, we do not support the car crushing, because its theory is defeated by the Minister’s own words. She said as recently as a couple of weeks ago on Radio New Zealand National that, far from every boy racer’s car heading for the crusher, she anticipates that as few as 10 cars will be crushed per year. That is what she said: 10 cars per year. That proves—

Brendon Burns: Less than one a month.

Hon CLAYTON COSGROVE: My colleague Brendon Burns’ constituency bears a heck of a lot of the brunt of this. The Minister’s own words were that 10 cars a year will be crushed. If one goes to Christchurch on any given night, one will see 500 to 600 boy-racer cars, if not more, just in our area. Sometimes it is more like 1,000 cars, even in Amy Adams’ electorate. The Minister told everybody that all the cars will head straight to the crusher, but now we know, thanks to the Minister’s own words, that it will be 10 cars a year. It proves that that part of the bill is a fiction. It is a stunt. It will not work, simply because only 10 cars a year will head to the crusher, as the Minister says.

We are giving the Minister the opportunity in the Committee stage to toughen this bill. Here is what is wrong with it. As the Minister has said, on the first offence under the existing legislation where the offender is also the car owner, the court today has the discretionary power to confiscate the vehicle for ever, but it rarely does. One could argue, and there will be a few hisses, groans, and noises from members opposite about this, that some of our judiciary have been less than strong in their implementation of the legislation. On the second offence, if the offender is the owner, the court must take away the car for ever.

Then we get to closing the loophole with regard to the third party and to the measure put in place by the Minister, which I support. But this is where she is weak. This is where the legislation is weaker than the existing legislation. The Minister has ratcheted up the rhetoric, but she is weak. She penned a reply, I am told, to the feature article that I put in the Press noting some of the points I am making tonight. I am told that when she wrote the article and talked about balance, she pulled it, because it was not tough enough for her persona.

Here is the problem: if a car owner is a third party and another person takes that car and commits an offence, then what happens to the owner? Well, Judith Collins sends the owner of the car a letter, via the police, saying that somebody has been naughty in the owner’s car. That is how tough the Minister of Police is. A real beauty! Somebody has been naughty in the car. Then somebody takes the owner’s car and commits a second offence. The Minister sends another letter, via the police, to the owner saying that somebody has been very naughty in the owner’s car. Ooh, that is tough. My word, I can hear the boy racers shaking in their boots.

Then on a third offence—and if members do not believe me, then they should look at the police briefing to the Transport and Industrial Relations Committee, from which I quote—“a court has the discretion” to take the car. It is not “must” take the car. It is not “must take the car for ever”. A court has the discretion, on the toss of a coin, on the whim of a judge, to take the car for ever, and maybe, if it is one of the 10 cars crushed in a year, the court will order the vehicle to be crushed.

I ask the Minister how tough that is. It does not even line up with the existing legislation, which provides that on a first offence the court may take the car and that on a second offence the court must take it. But if there is a third party, then that person gets two letters from Judith Collins and the police saying that somebody has been naughty. I am sure that the people in Amy Adams’ electorate, in my electorate of Waimakariri, and in Brendon Burns’ electorate will be really rapt with that. They will get a letter saying that someone has been very naughty on a second offence, and then it is up to a judge’s discretion to take the car. [Interruption] Members opposite are saying I am a tough guy. Dr Mapp is a doctor of law, apparently, although I do not know how many arguments he has ever made in a court of law as an advocate.

Hon Darren Hughes: Zero.

Hon CLAYTON COSGROVE: The member says it is zero. I ask Dr Mapp to get up and refute anything I say, because that is in black and white in the police briefing paper.

This law will be weaker than existing legislation, because it takes away the mandatory provision that requires a court to take a car on the first offence simply because the car belongs to a third party. Minister Judith Collins said—and I agree with her—that half of the offences committed by boy racers are committed by those who have their cars licensed in someone else’s name. She said that the right balance is that two naughty letters will be sent, and then something might be done. Well, I have talked to parents who say that if their son or daughter took their car and got a warning to say that if it happens again an offence is committed, then those parents would sort it out pretty quick. Their son or daughter would not get the car. I offer the Minister—

Nicky Wagner: Well, it’s done then. That’s the answer.

Hon CLAYTON COSGROVE: The member said that is the answer. Great, lovely, wonderful!

Labour members are here to help. We will put forward an amendment in the Committee stage that simply states that car owners who are third parties—[Interruption]; I think members opposite have gone a bit troppo; they do not like it, because they have been found out—will get one warning and then the court must take the car on the second offence. We know, because the police have told us, that the hoons do not sign the car over to mum and dad. They swap ownership amongst themselves.

I say to the Minister that what she has proposed tonight is a grand hoax. The media wrongly reported that Labour would stand in the way of this legislation—which we will not do—because it would show her up. I know that the Minister was in turmoil, because at that point she did not have the numbers to get the legislation through. She did not have ACT or the Māori Party, and she is desperate, as one person who would know has told me, to get that crushing clause through.

If members of this Parliament believe that it is being tough to crush 10 cars in a year, and to write to car owners who are third parties to say that somebody has been naughty and then very naughty and to then leave it up to a judge—when judges take cars in only 2 percent of cases now, sadly—then I say that it is not tough. I say that it is rhetoric. One of the reasons we will let this one go through to the keeper is that I look forward in the next year, as does Mr Burns, as does Ms Dyson, and as do all our colleagues in Christchurch and around the show whose constituents are impacted by this, to showing up the Minister when it comes to the gap between the rhetoric, the foot stomping, and the Clint Eastwood impressions, and what is real.

The Minister has the opportunity now. I asked her in the House whether she would support an amendment from us that would toughen the legislation, and she said that she had not seen it. It is a pretty simple amendment. It is about one line long. She does not even know her own legislation.

This is a hoax on people. I will wait for my constituents to come to me to say that boy racers have gone nuts around their street—on Blackett Street and in Kaiapoi, for example—and to ask what has happened. Well, Mr Jones, or Johnny who has signed over his car to somebody else, has got two letters from Judith Collins saying that the car owner has been very naughty, and then we will leave it up a judge. Then, as the coup de grâce, the Minister said in some sort of clairvoyant way that she knows that judges will take the cars. Well, I say that they should take the cars, make it mandatory, and use the parts to pay off the fees and the court costs. Let us get really tough.

DAVID BENNETT (National—Hamilton East) : When we are speaking on the Vehicle Confiscation and Seizure Bill I think it is important that we have a sense of reality about what happens on the streets and what the law and what this Parliament can actually do. It is a bit sad when we see the Labour Opposition not wanting to be supportive of this legislation. It knows that its attempts in the past have not worked—it has said that. It said that it could not solve the problem, and now when we put a solution up, it will not accept it. It will not fully back it. Labour members go out there and try to find an alternative so they can say that that is the way it should be done. The Labour Opposition had a chance to do it the way it should have been done, and it did not do it. It did not go out there and make confiscation mandatory, as the last member who spoke, Clayton Cosgrove, said. He had a member’s bill on the subject that this legislation covers. Why did he not do it then? It appears that now it is all right for him to say that that is how it works and that is how it should be, but the reality is he knows that is not the case. He knows that this is the best solution on the table.

When we look at the kind of mandatory solution that Labour is talking about, we have to ask where we see that in our law. Where do we see mandatory penalties being proposed? We do not see them. We see penalties that go up to a maximum. The reason is that we have a disincentive basis in our law. In law, we basically know what the full sanction can be, and the actual penalty leads up that sanction. For example, if a person is convicted of an offence, does that mean that he or she will always get, for example, the 10-year sentence that might be the maximum sanction as the penalty in that case? No.

Hon Dr Wayne Mapp: It’s graduated.

DAVID BENNETT: It is graduated, as the fine doctor beside me said. That is the case in law. But what we need in law are some examples of what can be the full sanction, because that is the deterrent. We are giving that deterrent. That crushing of vehicles will be the deterrent. We are also giving ourselves the ability to have a graduated process leading to that. It is a simple and effective process—

Hon Clayton Cosgrove: Tell that to your constituents in Hamilton!

DAVID BENNETT: Our constituents in Hamilton are very happy with this legislation, and they are happy with this Minister of Police, Judith Collins, who has shown some leadership. She has done something when she had the chance, and she has done something that is practical, reasonable, and will be successful. Thank you.

DARIEN FENTON (Labour) : First of all, I make it very, very clear that Labour will support the Vehicle Confiscation and Seizure Bill, but with amendments. My colleague Clayton Cosgrove has proposed those amendments, and we will be interested in the Government’s response to them.

Once again, I acknowledge the submitters who came along to the Transport and Industrial Relations Committee to make submissions on this bill, along with the companion bill that we debated earlier tonight, the Land Transport (Enforcement Powers) Amendment Bill. For me, because I do not live in Christchurch, it was a revelation to hear what some people are going through in Christchurch as they suffer the effects of illegal street racing, and the noise and behaviour that goes with it. Quite frankly, many of them were at the end of their tether. We are enormously sympathetic to them; we cannot help but be. Anyone who has had his or her sleep disturbed by anything, including noise, will be sympathetic. It does one harm not to get a good night’s sleep because one is constantly being disturbed. Of course that does damage to people’s well-being. But it worries me a little that I think the hopes of those who came along and submitted to the select committee have been raised enormously. We are back to saying that there is a silver bullet that will fix this problem. There is not. There needs to be a range of things, and I do not think that this or the previous bill go anywhere near to dealing with the problem.

Labour wants to work with the Government to support measures that will crack down on the issue of illegal street racing. I acknowledge all of the members in the House who come from the Canterbury region, and the Christchurch region in particular, who I know have had meeting after meeting with people. In fact, I think my colleague Mr Burns lives in one of the streets or near one of the streets that is affected. So I acknowledge what a huge issue it is for those members and, I think, to a much lesser degree, for other parts of the country.

We are really concerned that the hopes of those submitters that we will find a solution have been raised, and this bill does not do it. It has missed the mark. That is why we are proposing an amendment to the bill to toughen it up a bit. We think that the bill as proposed is window dressing. There has been a whole lot of hot talk and tough talk, talking up the issue of car crushing and so on. However, as I said, there are some things that we can do to the bill. I really am looking forward to the Government’s response to our amendment. We will not stand in the way of the bill; we made that clear in the select committee. It goes part of the way towards closing a loophole, but we want to see how determined the Government is to toughen this bill up and see it work more effectively by seeing its support for our amendments.

As previous speakers have talked about in debate on this bill and previous bills, the Labour Government has already passed a law to deal with boy racers. It is interesting to reflect that that law is tougher than any law in Australia. I have just been to Australia and, obviously, I took notice of the transport issues around me because of my transport safety role and my role on the Transport and Industrial Relations Committee. I asked what the Australians had done about this issue and I had it confirmed that the Labour Government passed a law that was tougher than anything in that country.

Under the current law the court may confiscate a vehicle on a first offence. It is mandatory to confiscate the vehicle on a second offence within 4 years, but that has rarely happened. I think the focus of the work of the select committee and, perhaps, the Government should have been on why the courts are so hesitant to confiscate, rather than just moving to crushing. The courts and people have to get through many obstacles in order for cars to be crushed, to the point where the Minister has admitted that it will be only about 10 cars every year. That seems pretty ineffective to me. In 2006 there were 9,600 offences in which mandatory confiscation applied under the current laws, and over 50,000 in which discretionary confiscation applied. But only 1,062 confiscation orders were granted, which puts the current rate of confiscation at less than 2 percent. So that seems to indicate a real problem we should have been addressing rather than trying to talk up the idea of crushing.

I am not sure what makes the National Government think its bills will make the courts use the powers of confiscation, which are already available to them, any more than they already do, and when we get to the Committee stage I will be interested in seeking an answer to that question. If the courts are not using the current confiscation powers, what makes the Government think they will use the new destruction powers, particularly when they are not mandatory?

Hon Member: They have been getting through the loopholes you left, and that we are closing. Even Clayton admitted that.

DARIEN FENTON: A loophole in the current law has allowed boy racers to avoid confiscation of their vehicles by having them registered in someone else’s name, usually in the name of one of their mates, so we support the closing in the bill of the loophole in order to allow the confiscation of vehicles owned by a third party. We will be happy to support that provision during the debate.

However, the Government’s bill does not make practical sense. If the Minister of Police has closed that loophole so that the current mandatory confiscation on the second offence is more likely to be enforced by the courts, what is the point of having a third offence provision? The car should have been already confiscated. The third offence provision is discretionary. What is the point of that? The car should be gone by then. We do not believe in allowing cars to be crushed on a third offence, when the car should have already been confiscated. It should be gone; it should not be in the ownership of illegal street racers after a second offence. We believe that if that provision were enforced properly, it would help combat the boy-racer problem. The focus should be on toughening up the current law and making sure it works so that vehicles are confiscated on a second offence, as the law always intended.

We believe that it makes little difference to offenders whether their cars are confiscated or crushed because, either way, they lose them. That is what matters: they do not have a car; it is gone. They lose their cars for good. The only people who will suffer as a result of the crushing of cars will be the New Zealand taxpayers, who will have to pay for the costs of crushing the car and the fines that cannot be recovered through the sale of the vehicle.

The National Government has talked tough, but in our view the new confiscation and destruction order will be only a last resort. It can be used only if an offender is convicted three times in 4 years. That does not sound very tough to me. It is a higher threshold than the current law and it provides for the mandatory confiscation of a vehicle. I am disappointed that the Government and the Minister have talked up this issue. The submitters came along to share their stories, and an earlier speaker talked about how one submitter in Christchurch was so terrified, they had someone else come along and present their submission for them because the situation was so awful. I am really sorry because I think that those people will find within a year that nothing has changed. The cars will still be outside their property, they will still be making the noise, and there will still be the awful behaviour that they described to us. These people will still be losing their sleep and suffering all of the harm that they do.

I think the Government has missed an opportunity to make some useful improvements to the current law. That is partly because the Minister rushed out of the blocks and started talking tough without really taking the time to think this whole thing through and to look at why the current law is not working. As I said, Labour plans to introduce an amendment to the current bill to make confiscation mandatory on a second offence, even if the vehicle is owned by a third party. That will reinstate the original intention of the current law that Labour introduced. Labour hopes, in the interests of community safety, and in the interests of all the submitters who came along and told their stories, that the Government will support its amendments. All of the members of the select committee were very moved by those submissions. We were all committed to doing something about it, so Labour members hope that National agrees to support the amendments we plan to propose. If the Government really wants to deal with this problem, why would it not support our amendments? Thank you.

JEANETTE FITZSIMONS (Green) : New Zealanders who have the misfortune to live in some parts of some of our cities, and in particular in some parts of Christchurch, are fed up with the noise, intimidation, and associated criminal activity that goes along with boy racers. The Green Party acknowledges the size of this problem and how desperate people can feel when, night after night, they cannot get a decent night’s sleep because of what is going on in the street outside. The submissions made very clear how some people are suffering as a result of the behaviour of these people.

But the Greens are not supporting the Vehicle Confiscation and Seizure Bill, because we have a history of not supporting window dressing. This bill will not solve the problem. It is actually nothing more than an expensive ideological branding exercise. The bill is unnecessary because the police and the courts already have the powers they need to deal with dangerous driving and associated behaviours, and the nuisance and intimidating effect that they have on our communities. Judges already have the power to confiscate cars after the first offence, and they must do so after two offences within 4 years. This bill actually goes backwards on that count.

The fact is that, as successive Governments have found, it is easy just to pass another law. It is much harder to give the police the resources they need to enforce the law that is already there. In fact, if the money that this bill will cost were put in to greater enforcement of the powers that are already there, I believe we would see a much greater decrease in this activity than the decrease we would see under this legislation. After all, the Minister herself has said that nine or 10 cars a year will be destroyed. I wonder whether the people in those streets in Christchurch will be able to notice any difference in the decibel level if there are nine or 10 fewer cars than there were previously. I suspect that they probably will not.

It also raises the wider issue that confiscation and destruction are being used for cars that are noisy, but not for cars that are used to maim and kill people. Why is it that we are giving a higher priority to noise and nuisance—awful as they are—than we are to behaviour that is actually killing and maiming people in large numbers? Just this year, and these are today’s figures from the library, 314 people have died on our roads as a result of road crashes. But instead of focusing on those kinds of transport issues, we are looking at ways of dealing with nuisance. Surely there is a hierarchy here; both are important, but we do not put nearly enough effort into preventing deaths and injuries on our roads.

This will not be a cheap bill to administer. The operating costs for the courts alone are estimated to be $470,000 a year, going up to about $1.5 million in the second year and out-years. The theory is that fines may compensate for this, but we have a lot of illegal street racers now who already owe money to the Crown. The fines are not paid. Successive fines are not paid. The fines cannot be collected if those people do not have money. If their cars are destroyed, they will be even less likely to pay. It seems to me very unlikely that there will be enough money collected through fines to compensate for the greater cost of putting this law into practice. If we put that $1.5 million a year extra that it will cost the courts into enforcing the law we have against boy racers now, I predict that we could reduce the nuisance even further.

The bill will also, of course, turn Government agencies into used-car dealers. I wonder whether those agencies do not have better things to do with their time than disposing of cars that are confiscated but not crushed. We support the intention to do something about this serious nuisance that is causing citizens a lot of distress, but this is not the right way to do it. It will be ineffective and the Green Party will not support window dressing.

Dr JACKIE BLUE (National) : I am very pleased to rise and speak to the second reading of the Vehicle Confiscation and Seizure Bill. This bill, along with its companion bill, the Land Transport (Enforcement Powers) Amendment Bill, is designed to tackle illegal street racing. The bill will give the courts the power to order the confiscation and destruction of vehicles driven by persistent street racers, as well as wider powers to enforce the collection of unpaid fines and reparation.

We know that illegal street racers frequently avoid being penalised for breaking the law. They do this by switching vehicles with one another or registering their vehicles to another person. They can sell their vehicles to friends for a nominal fee before a court appearance. But illegal street racers will no longer be able to commit an offence in another person’s car and avoid being penalised.

The Transport and Industrial Relations Committee received and considered 58 submissions on the Vehicle Confiscation and Seizure Bill. Thirty submissions were heard at its hearings, which included hearings in Christchurch. We heard from ordinary citizens. The public are simply fed up with hoons running riot and with cars doing skids, churning up grass verges, and scattering rubbish. It is not just about dangerous driving and putting the public at risk; it is also about what these hoons leave in their wake—rubbish such as soggy beer cartons, broken bottles, and flattened cans that litter pavements and roads, and spray-painted start and finish lines on the roads. It is also about property damage. Fences are destroyed and grass areas are ripped up.

These idiots have gone on far too long and have got away with it. Well, they will not get away with it any more under this legislation. I commend this bill to the House.

CAROL BEAUMONT (Labour) : Tēnā koe, Mr Deputy Speaker. I rise again to acknowledge the seriousness of the issue. In speaking on the Land Transport (Enforcement Powers) Amendment Bill, I indicated that as a member of the Transport and Industrial Relations Committee I had got the message loud and clear from the people who submitted to us about the real scourge that this issue is and the impact it has on people’s lives. When we met with submitters in Christchurch, we had some very strong submissions indeed about people who were suffering from sleep deprivation, people who were not able to use parts of their houses at certain times of the week, and people whose businesses were affected by street racing and so-called boy racers. We absolutely accept the seriousness of the issue.

I thank all of the 58 people who submitted on the Vehicle Confiscation and Seizure Bill. As various members from the other side of the House have indicated, the submitters clearly articulated their concerns and their desire to see something done. But I have to say that they did not fully and wholeheartedly endorse the legislation as drafted. I do not think that many of the submitters saw the issue, for example, of car crushing as being the real issue here. When it was all distilled down, people outlined three key issues. The issue of noise was the overwhelming one. They wanted something to be done about noise, and various ways of addressing that were talked about and discussed during the select committee process, such as limiting decibel levels, various things regarding modified exhaust pipes, and so on.

As my colleagues have said, we will be supporting this bill but we will seek to put forward amendments on it. The bill accompanies the one we discussed earlier tonight, the Land Transport (Enforcement Powers) Amendment Bill. The purpose of the Vehicle Confiscation and Seizure Bill, as outlined, is to strengthen the power of the courts to order vehicle confiscation, to empower the courts to order the destruction of motor vehicles used by persistent illegal street racers, and to strengthen the provisions to seize motor vehicles in order to enforce the collection of unpaid fines and reparation. This bill amends three Acts. It is an omnibus bill that amends the Sentencing Act, the Summary Proceedings Act, and the Privacy Act.

We have always said we will support any measures to crack down on the issue of illegal street racing, but we believe that this bill has missed the mark. As I said, we will be proposing an amendment, and I think that my colleague Clayton Cosgrove has articulated perfectly well what needs to change there. We hope that members on the other side of the House were listening to what Mr Cosgrove had to say and will be willing to put their money where their mouths are. They talked tough on this issue, and we are saying this bill is actually weaker than the existing legislation. We think that that is a problem. Our proposal will be to toughen up the bill so that it becomes something more than window dressing.

We are not opposing this bill; in fact, as I said, we support it, because it has dealt with one particularly important loophole. I will come back to that issue, but I say the “substitute for the offender” provisions set out in this bill are positive. They are a step forward and they add to what is already in place in the law to deal with boy racers passed by Labour while it was in Government. That law is certainly tougher than anything in, for example, Australia. The Land Transport (Unauthorised Street and Drag Racing) Amendment Act provides that the courts may confiscate a vehicle on a first offence and that it is mandatory to confiscate a vehicle on a second offence within 4 years. But that rarely happens. One of the things that were not adequately discussed by the select committee was why the courts are so hesitant to confiscate those cars and why that legislation has not been working as it should have. Darien Fenton has already mentioned that effectively the current rate of confiscation sits at somewhat less than 2 percent.

Clearly, a very strong provision is not being effectively used by the courts. We did not get to think about why this bill would make the courts use the powers available to them—the powers that they have or, indeed, that the Government is proposing. If the courts are not prepared to use the current confiscation powers, what does National think will make them use the new destruction powers?

Again, I say the focus should be on toughening up the current law so that vehicles are confiscated on a second offence, as the law always intended. Frankly, it makes very little difference to an offender whether the car is confiscated or crushed; either way, the offender loses the car for good. That is the point, really. There has been a lot of tough talk, but we do not think that this measure really goes there, at all. As Mr Cosgrove said earlier, the Minister has already admitted that maybe 10 cars a year will be crushed under this legislation. I do not think that that is going to deal with the very important issues I raised before about the road safety implications, the noise implications, or the antisocial behaviour implications of boy racers.

I will put that to one side for a minute, to give a bit more detail on the issue of the “substitute for the offender” provisions. We do support those provisions and we think they are very good. That does close a loophole that is currently there. Essentially, the bill will provide for a vehicle belonging to a third party to be dealt with. The vehicle’s owner will be served with a written caution, unless, of course, the court is satisfied that the vehicle was stolen or converted, that the person in fact did not own or have an interest in the vehicle at the material time, that the person was a creditor and had no other relationship with the offender, or that the vehicle was hired. There are provisions in the bill to make sure that an owner is warned, as an offender is, of the implications of any further infringement. We support very strongly this closing of a loophole.

I will come back to the key issues I have raised. I listened very carefully to the submissions, and very strong they were. The noise issue really was the key one. The police already have tools in their tool box to deal with the question of noise. They include the Land Transport Rule: Vehicle Equipment 2004 and the Land Transport (Road User) Rule 2004. I have looked at the use of those rules and found that it varies markedly around the country. I think that is a question of policing, which is an important one that I will talk a little more about.

In terms of the road safety issues, again I say the best way to deal with those, both the safety issues for the drivers and occupants of the vehicles concerned and for other road users, is with adequate policing. The other area that was raised was that of antisocial behaviour. The police were quite clear, when we talked about that with them, that one of the key contributors to the problems around the antisocial behaviour of the boy-racer grouping was alcohol, so we are pleased that the Law Commission report deals with that and raises some suggestions in that regard. We think that the Government should look very, very carefully at whether we need to toughen up on issues like drinking in vehicles by people other than the driver.

Finally, I will go on to talk about policing, because policing is the key to dealing with all of the issues I have just raised. In fact, what really goes to the heart of dealing with this problem is providing adequate policing. In our report on this bill, we said that “Labour members are concerned that proposed cuts to Police resources will impact negatively on the ability to effectively deal with the problems arising from illegal street racing.” We believe that that is absolutely true.

We were given very good evidence of policing that works, and is using the rules that I have mentioned. One example is that we received a lot of evidence around Operation Sniper, which is an initiative in Counties-Manukau Police District that has made a real difference to illegal street racing. Basically, it was about a concentrated focus on it. Operation Sniper looked at the collection and coordination of intelligence on what people were doing, having appropriate staff training, using education campaigns in high schools, making sure that the by-laws already in place were being enforced, using overt and covert police tactics, working with partner agencies like the councils, working with local business owners and residents, and really addressing the problem in a holistic way. That has made a significant difference; the drop in the number of cases is high. Across the House somebody argued earlier that we cannot translate that to other areas. I dispute that most strongly. I believe that this issue is about providing adequate policing.

NICKY WAGNER (National) : I am very pleased, and indeed relieved, to support the Vehicle Confiscation and Seizure Bill. All I can say is that it is about time.

Hon Clayton Cosgrove: Got rolled on the noise provisions didn’t you, Nicky? You didn’t get any noise provisions through.

NICKY WAGNER: Clayton Cosgrove has been raving on and talking tough tonight, but I would like to remind him that it was his Government that allowed the toxic boy-racer culture to develop. Coming from Christchurch, I have been agitating for legislation to curb this problem in our city for years, but until the change of Government I could not get any action, at all.

The boy-racer problem has grown and developed over the last decade. It has morphed from being a handful of thoughtless, naughty boys into a full-blown culture of antisocial road users. These antisocial road users distress and torment law-abiding communities. They distress and torment them with excessive noise, illegal street racing, smashed bottles and litter, and violent pack behaviour. It was at an incident of dangerous and violent pack behaviour late in January this year in Christchurch where Sergeant Nigel Armstrong was ambushed by a large number of boy racers, attacked with bottles, and shot at with an air rifle. It was stupid, dangerous behaviour, and the last straw in a series of escalating boy-racer incidents across the greater Christchurch area, which Labour, unfortunately, did nothing to curb.

The Vehicle Confiscation and Seizure Bill, hand in hand with the Land Transport (Enforcement Powers) Amendment Bill, will strengthen and empower the courts to take action to manage and control antisocial road-user behaviour. Police across the country, but particularly in Christchurch, spend many, many fruitless hours policing our city streets and the surrounding roads, and these bills will provide a greater deterrent and more tools to curb boy-racer behaviour.

Over the past decade Christchurch people have been wound up and wrung out by the thoughtless, noisy, dangerous behaviours. They have had enough—in fact, more than enough—and they are waiting impatiently to see the first cars of the worst offenders crushed. Many of them joke darkly that they would like to crush the drivers as well.

As an inner city resident, I share their frustration, and I look forward to a quieter, safer, and cleaner city. However, I also believe that we need a sensible, balanced approach. This bill with its “three strikes and you’re crushed” law gives the legislation balance. There are two warnings for the car owners, whether the owners are the drivers themselves—and they tend to be quite slow learners—their families, or their finance companies. They are put on notice. If drivers value their cars they have an opportunity to change their antisocial ways, and car owners can repossess their vehicles before another offence is committed, and before the cars are seized, confiscated, or crushed.

This bill will also enforce the collection of unpaid fines and reparations. We have all heard the stories of young boy racers who flout the law and wallpaper their bedrooms with offence notices. The young boy racers I have heard on this topic seem to believe they are bulletproof, and they thumb their noses at the long-term consequences. But I have also come across several slightly older drivers who realise the consequences of their stupid behaviour when they try to establish a home and a family and still have boy-racer fines to pay.

The boy-racer culture has absolutely no merit. It has been allowed to develop over the past decade, and it involves pointless noise, dangerous driving, the smashing of bottles, vandalism, and intimidation from violent pack behaviour. The people of Christchurch and citizens right across New Zealand want to be rid of it. I fully support this bill and its companion bill, because it is high time that the boy racers were held to account.

BRENDON BURNS (Labour—Christchurch Central) : I am very pleased to speak in the second reading of the Vehicle Confiscation and Seizure Bill. I acknowledge the opening comments from the Minister, who at least had the grace to say that this bill builds on the past legislation of the previous Labour Government. That was unlike the previous speaker, Nicky Wagner, who suggested that she was not able to get any traction on this issue, at all. It is foolish for her or for any member of this House to believe that this legislation is going to be some kind of magic bullet solution. It will build—and Labour is supporting this bill to build—on some of the past actions, but we will probably continue to have issues, especially because this bill in its current form is not tough enough to deal with some of the issues that are presented by the boy-racer problem, certainly in electorates like mine of Christchurch Central.

I have to ask the previous speaker where the action is on the noise issue—action that was promised time after time after time. People in Christchurch who turned out to endless public meetings were told that we need to reduce the noise to 90 decibels. There were parliamentary petitions, and a private member’s bill, but there is nothing in this bill on that issue; there is not a squeak on the issue, at all. What we have, instead, is a bill that proposes to take 10 cars a year off the roads and crush them. As has been indicated by my colleague Clayton Cosgrove, on a given evening in the Christchurch Central electorate there can be 400 to 500 cars going around and around the four avenues. This bill proposes three warnings and maybe, just maybe, that a driver might lose his or her car. Labour will be proposing an amendment in the Committee stage to deal with that issue.

I need to acknowledge that my electorate has the unenviable reputation of being the boy-racer capital of the country. Every weekend we see random and reckless activity, with much impact on the quality of life of inner-city residents, my constituents. I say to the House that we cannot overestimate what it is like to be somebody living within the four avenues or thereabouts of Christchurch central and having to listen to that incessant noise. People have told me they have had to vacate their homes and leave them empty, simply to escape the noise and the accompanying intimidation. Earlier this year I visited the residents of Edgeware Road, which is well outside the four avenues area, who were being intimidated by a group of boy racers doing burnouts as they did their circuit around the four avenues. I personally was kept awake many nights through the summer before last, and I was living hundreds of metres away from Fitzgerald Avenue. It is not just the cars that are making the noise. There is the incessant shouting, and also the people who park up and drink in the lay-bys. One of the resulting issues is the broken glass, which was a huge problem on mornings when I made my way on foot to the nearby gym. I would often have to pick my way through the glass that was left during the previous weekend. Cyclists in inner-city Christchurch know they face never-ending problems with punctures, because of the glass left by the boy-racer problem.

So I say, with all due respect to Jeanette Fitzsimons, that we need to attempt to close some of the loopholes in the legislation introduced by Clayton Cosgrove. The Minister has acknowledged that this bill builds on the past measures from the previous Labour Government. She acknowledges, and so do I, that the police are doing their best, with 1,800 offence notices issued in the year to date. But, obviously, if 1,800 offence notices have been issued, we have issues that we need to address.

We have to acknowledge that this bill is full of rhetoric, in respect of what it intends to do. Taking 10 cars a year off the road will simply not do the business. We will inevitably have a photo opportunity with the first few cars that are taken off the road, and with the Minister right on the spot, glowing and grinning for the cameras—

Hon Clayton Cosgrove: She might do it herself.

BRENDON BURNS: She might; she might push the button. But that will not deal with the problem. We come back to the point that the bill will have an effect only on the third offence, and then it is still a matter of discretion. The amendment that Labour will be proposing before the third reading will deal with that issue. It will propose that a warning be sent to the owner of the car, whoever it is, for a first offence, and that a second offence will see the car summarily confiscated and disposed of. Surely that makes much more sense. I think that will send a very clear message to anybody who is having his or her car driven and for whom one offence notice has emerged. We can imagine if it is a mum and dad. Most often it is not; most often it is the mate of the boy racer, and they do a swap of the registration to avoid the impacts of the current legislation. The message will get through loud and clear that if someone is caught on a second offence, the car is gone; it is history. That is the sort of message that changes behaviour. Three strikes and a maybe, as this bill proposes, will certainly not have that sort of impact upon behaviour.

Hon Clayton Cosgrove: It’s tough, eh!

BRENDON BURNS: It is weakening the current position. It is unfortunate that there are loopholes that people are exploiting. Some of the boy-racer fraternity are cunning and devious. They know how to bend the rules and they know how to avoid getting caught. If the Government adopts the proposal that we will put up, I think this bill will have the potential to start shaping and curbing some of the behaviour that is being exhibited on a weekend evening in my electorate and in many other electorates around the country, most notably—[Interruption] That is even on the North Shore, I tell Mr Mapp. I ask Government members whether they really think that if they say to their constituents that nothing will be done until the third offence, when maybe the offender’s car might go, that will change behaviour. I do not think it will do anything, whatsoever.

Nicky Wagner: That’s only part of the measure; you know that.

BRENDON BURNS: We are hearing noise again from Ms Wagner, but I made the comment earlier that noise is not being touched on in this bill, after many repeated promises that this issue would be resolved by that member.

Hon Darren Hughes: She was going to fix it.

BRENDON BURNS: She was going to fix it. In fact, there were even promises made that there would be a reduction to 90 decibels, yet there is not a squeak or a whisper about that in this bill or in its accompanying measure. So it is very clear that there is much noise and no traction on that issue from that member.

Hon Clayton Cosgrove: She’s very quiet now, though.

BRENDON BURNS: She was very loud in Opposition, but now she is very soft in Government. We have to be very clear that Ms Collins took very much to the title of “Crusher” in respect of this bill when it first emerged, but I really think the epithet is now more like “Cruiser” on this issue. There will be a lot of cruising going on, because no boy racer will be put off by the fact that perhaps his car could be one of the 10 that will be taken on the third offence—maybe, if the court decides to do that. That is not tough; that is weakening the current provisions. Labour is proposing an amendment to toughen this bill because at the moment we think that that provision is really just window dressing and a photo opportunity. I think the Government really needs to take account of what Labour will put in front of it.

As Labour has said very clearly, this bill will be supported by the Labour Opposition, but we will be proposing that amendment because we want to make this bill as effective as possible. Members should make no mistake: the Labour Party wants to deal with the issue of boy racers. We have passed legislation on it in the past. We have made very clear that we want to support the closing of the loopholes. Some measures of this bill are going in that direction, but on the key issue of the confiscation of cars, we say that it would be much better to give an indication to the owners of the cars on the first offence that they will see their cars go on a second offence. That would make it very, very clear to the owners of those cars that their cars would be gone by lunchtime on the day of the second offence. That is how it has to be. We believe that the loopholes in the law need to be closed, we will support this bill through the process, and we will be putting forward a proposal to this House before the third reading. I hope that if the Government is truly interested in a bipartisan approach to dealing with this issue, it will listen to that amendment and not dismiss it out of hand, because the potential is there for Parliament to deal with this issue on a serious and rational basis, and to make sure this legislation delivers what has been promised—that is, an attempt to close the loopholes, to toughen up the legislation, and to make sure we reduce the menace that boy racers present in electorates like mine and in others around the country.

MICHAEL WOODHOUSE (National) : If there was an example of the confusion that Opposition members have around the Vehicle Confiscation and Seizure Bill, that speech was it. How sad it is that it came from Brendon Burns, the member for the electorate that has the greatest problem. Members opposite say they will support the bill, then they say they do not support it. They think it will work, then they do not think it will work. That is about as confused as anyone can get.

I say congratulations to the Minister of Police, because I recall that in January following a terrible incident the young men interviewed were absolutely dismissive. They just said to bring it on, as we could not touch them. Well, the Minister is bringing it on. She is introducing legislation that, by the previous Minister’s own admission, closes loopholes and will make stronger legislation. For that reason there will be a much stronger deterrent effect.

I support the bill and I look forward to discussing in the Committee of the whole House some of the details that members opposite have raised, because I think they warrant a response. Otherwise, I support this bill.