Hon TREVOR MALLARD (Minister of State Services) : I move, That the State Sector Amendment Bill be now read a third time. The purpose of the bill is to make generic provision for matters resulting from the machinery of Government reorganisations. It enables the Crown to organise itself for administrative purposes without unduly consuming House time. The most important element of the bill is to limit the cost to the taxpayer of compensation for technical redundancy. Where functions transfer from one department to another and an employee’s position ceases to exist, the employee is redundant and entitled to redundancy compensation, even if a substantially similar position is available in the transferee department. In such a situation, the employee is technically redundant.

Hon Richard Prebble: Point of order—

Mr SPEAKER: I think the member is about to raise a point of order on something I was just about to comment on myself. I could hardly hear the Minister. There are meetings going on now. Could members please leave quietly, and could the Minister please speak into the microphone.

Hon TREVOR MALLARD: Well, I wonder—

Mr SPEAKER: I do not want any comment. I just want the Minister to continue. He is using up his time.

Hon TREVOR MALLARD: Under the bill, where an employee is offered a substantially similar position in the transferee department on no less favourable terms and conditions of employment, no redundancy compensation will be payable. The bill covers similar situations where functions of a Crown entity are transferred to a department, affecting an employee’s position. These provisions will only apply following the making of Orders in Council. Specific legislation will still be required to disestablish a department that is established by legislation. The bill applies to the generic provisions of the transfer of functions from the Department of Social Welfare to the Department of Work and Income, and changes the name of that department to the Ministry of Social Development. It also applies to the merger of the Department for Courts into the Ministry of Justice.

Hon ROGER SOWRY (Deputy Leader—NZ National) : I do not think I have ever seen a Minister so embarrassed about a bill than the Minister we have just heard from. He managed to get up and mumble his way through his departmental notes, making a few mumbling comments about it and sitting down as quickly as possible. That is because he is embarrassed to be here.

This will not the first time this week, we are led to believe, that this Government will be carrying out retrospective legislation. The bill we are passing today is deemed under the commencement clause to have come into effect on 1 October 2001. This Minister has been so hopeless in trying to shepherd this bill through that he actually gave up on it. He wheeled it in with all the bluster and might he could muster at the time, and decided that this was the “Get Work and Income New Zealand Bill”—merge Work and Income New Zealand with the Department of Social Welfare and create a new superministry, the Ministry of Social Development. Then his plans got derailed. We had a court case and a whole lot of other issues that arose around the dismissal of Christine Rankin and the Minister’s blameless life of excellence. We went from there into another round of restructuring, involving the Department for Courts and the Ministry of Justice.

This bill that we are passing on 29 July 2003 is deemed to have been passed on 1 October 2001, so the bill will be voted for and passed by a whole lot of United Future members of Parliament who are voting for legislation that is deemed to have come into force before they were even in Parliament. In fact, the leader of United Future was voting on this side of the House at that stage. Now, all of a sudden, he has changed his mind. The only principle that party has is to support this Government, and it has now decided that all the things it said about this bill in 2001 are wrong and should be forgotten. Now it is going to vote, as it always does, with the Government and pass the bill into law.

This is not good legislation. It gives the Government the power to reorganise Government departments and not have to come back into the House to seek a mandate to do so. This is the sort of bill that can allow Ministers to get rid of their ministries, such as the Ministry of Youth Affairs, which we know is one that is particularly targeted. The Ministry of Pacific Island Affairs and the Ministry of Consumer Affairs are probably others. We know that the Government is quite keen to get rid of those ministries, and now it will be able to do that without any need to come back to Parliament to have mergers and new arrangements with the staff affected scrutinised. This legislation gives the Government and the Minister of State Services the power to say to a chief executive: “If you and your department are going to continue to inhibit this Government’s advice, then watch out. We can now get you because we have legislation that will enable us to do that.”

I will give members an example. We all know that this Government does not like public servants who give free and frank advice. I saw a piece of advice that went through the Ministry of Education recently. Typed in the space where the conclusion should be were the words: “Minister to write.” There is nothing about the department being fearless in recommending things to that Minister of Education. No, he writes his own conclusions in his departmental Cabinet papers. It should not surprise anyone that that is the same Minister, Mr Mallard, who comes into this House with this legislation so that he can wander into a troublesome department—one of the smaller ones—that might well be causing him a bit of grief by holding out for its own group in society and saying things that the Government does not like, and tell it that if it does not buckle down, there is now legislation enabling the Government to easily subsume it into a larger department without having to go to Parliament.

I think that is outrageous. If this side of the House had done that, the Labour Party and the trade union movement would have been up in arms about the rights of Public Service Association members, and the rights of workers in the departments, to negotiate new contracts and to make sure that their terms and conditions were being carried over under the same rules. All that is gone. There is no concern at all for Public Service Association members. They do not get consulted anymore. In fact, the bill we are passing today came into Parliament as a 13-page bill and sat here for 2½ years. Then last week we saw the Minister drop a 13-page block of amendments into the House. That tells us we have a Government that is not interested in process, and is quite happy to come in here and pass legislation in 2003 that is deemed to have come into force in 2001.

I want to spend a few moments talking about retrospective legislation. One of the most impassioned speeches I have heard in my time in this House about retrospective legislation came from the current leader of United Future, Peter Dunne. I can remember him railing long and hard against Governments passing retrospective legislation. I can remember the Greens doing exactly the same. The Greens have long stood out in this House and said that they will not support retrospective legislation, but on this bill they seem to have forgotten that. The Greens have long said in this House that they stand up for the rights of the union members, yet on this bill they have forgotten about that. They do not care at all about the workers in those departments that are being merged.

I will be watching very closely to see how the Greens, in particular, vote on this legislation. I hope they will continue to oppose this bill, because it is particularly bad legislation. It is the sort of legislation that a Government wheels in when it wants a big stick to hold over the head of a few troublesome public servants. They might be the kind of public servant who would write in a memo that they were hung out to dry because everybody from the Minister down agreed to lie, and then he or she was the only one singing that tune. One can imagine a public servantwho had been a bit troublesome—and we know that with regard to the Immigration Service the Minister has been caught out a couple of times, and once blamed her officials. She is now caught out by something that has still has a little way to go over the next few weeks, where she has obviously been party to something that is now starting to unravel. We can imagine that that department and chief executive will suddenly find this piece of legislation hanging over his or her head, and the Immigration Service might find itself a new home—a nice convenient way for a Government to tame and cower the public service. That is why we oppose this piece of legislation.

MURRAY SMITH (United Future) : There is some irony here with the last speaker, Mr Sowry—because I read his speech of 31 July 2001 to the House on the first reading of this bill. It was very interesting. He said that the bill was half sensible and half not. The bit he thought was not sensible was that it was going to be rushed through Parliament. But generally he concentrated his speech on wondering why the Greens were supporting the bill and why the bill was going to be rushed through Parliament, rather than on anything he saw, at that time, as not being sensible. Suddenly he has changed his tune. I really wonder why that is. I was going to compliment Mr Sowry, however, because it seems to me that he was rather prophetic when he gave his speech. Mr Tisch was also prophetic when he gave his speech.

Way back then, when Mr Sowry gave his speech, he said: “It is not as though I can say that the track record of the Government is that it will get this bill reported back on 4 September and passed on 5 September.”, when the Government intended to do that. “The track record is that we will report it back on 4 September, and around maybe 18 December we will deal with it. After the Government has sewn things up and has denied a whole lot of people the opportunity to speak, it will not rush this bill through the House.”

I must say that Mr Sowry certainly did predict that. But his date of December in which to deal with the bill was a little bit short. Here we have a bill that was introduced on 31 July 2001 and sent off to the Government Administration Committee to report back on 4 September of that year. Suddenly, 2 years later, it is only just coming back to the House.

Mr Tisch also criticised the legislation, and he was prophetic too. He said: “Everything it does is a rush. It is a rush to get things through. Then, at the end of the day, after the bill is reported back, it will take a long time before it is enacted. That is the record of this Government, and certainly this bill is on a par with that.” So I must agree with those speakers about the length of time that the bill has taken. So what is the justification for the length of time? Firstly, September 11 happened, and maybe that distracted the House. That might have distracted it for a few months, but it is hard to believe that that kept it distracted for 2 years. Secondly, I think that what really happened was that once the bill was introduced, the Government’s intention to legislate was signalled, and therefore—when the Department of Work and Income’s name was changed to the Ministry of Social Development, and the Department of Social Welfare was abolished and its functions transferred to the Ministry of Social Development—the redundancy claims dried up. Therefore there was no immediate urgency for the bill.

However, I find a great deal of contradiction in Mr Sowry’s claiming, firstly, that United Future is now passing legislation that it was not even here for in 2001, which is true; and then claiming that we have changed our position from where we stood in 2001, when we were not here. I find it rather difficult to see how he can take both sides of that. However, suddenly 2 years later, we find, probably through the motivation of the merger of the Department for Courts and Ministry of Justice, that we have the bill now before us. But it is hard to accept that the Government could not have tidied up its mess earlier, and certainly it should have done so prior to the general election, notwithstanding the predictions that it was going to regain the Treasury benches.

There are two issues in this bill that need to be considered and that United Future considered in deciding whether to support it. Firstly, the bill is altering legislation by regulation, and, secondly, there is the provision about redundancy payments, and the denial of redundancy payments to employees. In terms of the altering of legislation by regulation, United Future is, of course, the “common-sense” party, and we took a common-sense view about this situation. It is the executive’s prerogative to organise its affairs as it sees fit, including changing names of departments or merging departments, and, once it has done so, those changes need to be reflected in schedules—such as that in the State Sector Act—and that should be done in a timely fashion. It should not take the executive 2 years to make those fairly technical changes.

It is absurd, and, quite frankly, a waste of Parliament’s time, that the executive should have to go through the entire primary legislative process, merely to reflect a name change in the schedule of an Act. We take the common-sense approach that—notwithstanding this is a change of legislation by regulation, rather than going through the House—that such minor changes as simply changing the name of an organisation should not take up Parliament’s time when the bill is only giving effect to something that the executive is entitled to do as of right.

In terms of the redundancy issues, I am conscious that the issues of “similar job descriptions” and “general locality” do not cover everything that employees may look for when they are looking for a change of job position. They look at the office environment—the people they would work with in specific surroundings. They look at the broader environment—the general policy work, the goals of the organisation, and the culture of the organisation.

I shall quote from the Public Service Association’s submission to the Government Administration Committee, which, I think, accurately reflects this: “One aspect of reorganisation that is a significant consideration from an employee’s perspective, but is seldom catered for in management-of-change provisions, is the change in culture. There have been times when the change in culture has been so great that it is difficult to reconcile the difference with the standard definition of ‘same or similar’ position. On paper the job descriptions may look very similar, and the status of the employee within the new organisation may be at the same level as it was in the former organisation. However, dramatic change in culture may not be evidenced in the job descriptions but may be evidenced in what has driven the reorganisation and the direction of the new department.”

Should employees then be required, under penalty of not getting any redundancy, to change from one culture of organisation to another, albeit on paper it is simply a name change? Is it fair to require a person to change his or her job or be made redundant without compensation? A number of considerations have led me and led United Future to the position that it is reasonable that these changes be made. Firstly, we know that departments can move offices, change staff, change department focus, change policy, without the consent of employees. So those factors are something that could happen in any event, and are the normal right of an employer, including the Government, to do.

Secondly, redundancy payments have become rare these days. They are not things that are commonly found, out in the business world; and where there is a reassignment, simply in terms of one department to another, without a real job change, then ethically I do not believe that it is appropriate for redundancy to also be paid, as a bit of a windfall to employees, which they do not really deserve.

Thirdly, there is a balancing of the interests of the public and the individual. It is in the public interest not to lose the valuable experience and abilities of key employees through what, in the light of the comments I have made, amounts to a technical redundancy. There is a real danger that, if a redundancy option were given, good employees who are valuable and essential to the organisation might be lost; and also, in terms of the public interest, it would not be in the public interest that all that happened in practice was that there were significant redundancy payments and then the same people were re-employed, by contract or otherwise, to fill the jobs in the new department. So in the public interest I believe that it is appropriate in these instances that there is no redundancy payment.

I commend the Public Service Association for its attitude to this bill. It is there to protect Government employees, but it responsibly accepted this position and endorsed it. It stated in its submission: “The PSA has a history of supporting job retention over redundancy. We do not encourage employees to seek redundancy payments when there is the opportunity to continue employment with substantially the same terms and conditions. The PSA recognises that in reconstituting the new public service there is likely to be amalgamation of existing departments with fewer and larger departments. We understand that the motivation of this change, unlike the restructuring of the 80s and 90s, is to reduce the fragmentation of the public service rather than reduce jobs or prepare services for sale.” I commend the Public Service Association for its attitude and support, and it was that support that at the end of the day persuaded me and persuaded United Future that it was appropriate to support this bill and take the common-sense approach that seemed to be so clearly shown.

Hon RICHARD PREBBLE (Leader—ACT NZ) : This State Sector Amendment Bill originally had one purpose, which was to enable the reorganisation of the Department of Work and Income and the Ministry of Social Policy, and the abolition of the Department of Social Welfare and the transfer of its functions to the Ministry of Social Development—in short a sort of “Christine Rankin Restructuring Bill”. That was its original purpose but since then, and very suddenly last week, the bill has taken on a total new purpose—that is, to abolish the Department for Courts. That is quite a large department with 1,890 staff. That change was added to the bill last Wednesday, after it had been through the Government Administration Committee, so it did not allow for the public any right to discuss it.

I want to make this comment to the Government, and to Mr Smith, from the United Future party, who has just sat down: they owe a duty to this House to tell us why a department of State, the Department for Courts, should be abolished.

Murray Smith: This bill doesn’t abolish it.

Hon RICHARD PREBBLE: Well, that is interesting. It must be very easy to get them to support the Government when they actually do not even realise they are voting for a bill to abolish the Department for Courts. [Interruption] Well, it says so—that is what the bill says. An interesting thing, I say to Mr Smith, concerns the Committee stage of this bill. I say to the fourth estate that they have a duty to report this House, and how the Government is treating Parliament, the judiciary, the legal profession, and the public. We are being treated with contempt. I say quite sincerely that I do not know why the Government is promoting this measure, because no Minister has seen fit to get up and explain.

The Minister said: “Oh, I put out a press statement.” I found it, thanks to the help of the library. Yes, on 16 May he put out a press statement, and this is what he said: “The merger between the policy and operations functions of the Ministry of Justice and the Department for Courts will strengthen the overall justice sector”. That is interesting. How? I read the rest of the press statement, and there is no way of telling. The United Future members told us they all got a briefing, so I thought they were going to come and tell us. But they have not.

I have made some further inquiries, and I discovered—and I wonder whether Mr Smith can tell us whether he knows this—that Treasury does not agree. This is what Treasury said to the Government about it: “There is limited evidence that sector performance is impaired by the way it has been structured.” It then went on to say: “The five indicators for structural change do not present a strong case for merger. Our view is the proposed merger would be more likely to worsen performance.” That was said by Treasury—but the Government has not told us why it thinks it would be strengthened. I would like to know whether the judges were consulted. Are the judges unhappy with the Department for Courts?

Stephen Franks: Some of them are.

Hon RICHARD PREBBLE: Some of them are—righto. Now I have the ridiculous position that one of my own members of Parliament thinks he can answer for the Government, and I want to know from Government members whether they think that.

Darren Hughes: It’s only a junior member.

Hon RICHARD PREBBLE: What?

Darren Hughes: It’s only a junior member saying that.

Hon RICHARD PREBBLE: Well, that is all right, but I am asking the Government whether it thinks that. In 1995 there was a review of the Ministry of Justice, which concluded that the ministry was not doing its job properly because it was confused between operational matters, like looking after the courts and the prisons, and providing policy advice. That was the decision in 1995. I am asking the Minister what has happened to change that. Why are we not entitled to know? If the Government does know some reasons, why the secrecy? Why can it not be shared? I would like to know this from United Future members: why does the United Future party think that a department of 1,800 staff should be abolished by a press statement, then a Supplementary Order Paper, with no opportunity for any member of the public to make a submission? [Interruption] The member has just said it is the executive’s prerogative. Why bother, I say to Mr Smith, having Parliament? He said it is the executive’s—well, actually, it is not, because it is actually in a statute, and that, I say to Mr Smith, is legislation, and that is our prerogative—in this Parliament. If we did not agree as a Parliament to this vote, the Department for Courts could not be abolished. It is not the executive’s prerogative to abolish statutorily set-up departments.

I would like to know from United Future members why they just agreed to this. They actually campaigned saying they wanted to improve the accountability of the Government. They said they wanted to lift the standard of Parliament—yet they want to know why they are regarded as a rubber stamp. They have agreed with a press statement of 18 May, not setting out any reasons, then with a Supplementary Order Paper that came in on Wednesday of last week. Now, on Tuesday, the department is abolished, with no consultation at all. I say that that is a parliamentary outrage. I believe that the Labour Government is abusing Parliament. When Labour wants to know why the public are concerned on a serious constitutional issue like that of the Privy Council, things like the foreshore, and things the Government is doing in other negotiations, it is because the Government is treating this Parliament and other constitutionally important institutions with contempt. Indeed, this bill is contemptible in that it is retrospective—right back to 2001. Even the United Future party did not think that that was a very good idea, yet it is going to vote for the measure. I say to the House that we—

Murray Smith: I wasn’t here in 2001.

Hon RICHARD PREBBLE: That is true; the member was not here in 2001. But he is here now and he is now going to vote for a measure that is retrospective. He is now going to vote for the abolition of the Department for Courts without in any way knowing whether that is a good measure. I have to say to the House that I do not know whether it is a good measure, because the Government has not put forward any arguments. But I can see some counterarguments. If it has not been working well when it was administered by the Department of Justice prior to 1995, it seems to me extremely unlikely that it is going to work when it goes back to the department in 2003. It also seems to me that when the Ministry of Justice is going to have 1,800employees in the Department for Courts and only 180 from the old Department of Justice, that this is such a large addition that, as Treasury rightly observes, this could easily result in top management getting diverted. In fact, they say the Ministry of Justice could become overly focused on court operations, and the other departments will not perceive the combined Ministry of Justice and courts department as neutral, and that the restructuring process could distract management focus from current initiatives. Those are not my words; they are Treasury’s.

We have the right to have the Minister actually speak to this part of the bill. If we look at his third reading speech we see that there was not a word about the Department for Courts. There was nothing during the Committee stage. Government Ministers and members just sat in their seats when we asked these questions. They would not answer. United Future members just called out from their seats: “We know the answer but we won’t tell you—there, there, there!”. I just say to them that they are not performing correctly as parliamentarians. This bill is a piece of contempt to Parliament. The Government owes it to Parliament, the judiciary, the legal profession, and the public to get up and give us an explanation of why the Department for Courts is being abolished. If they will not, then we as a Parliament should vote against the bill.

DARREN HUGHES (NZ Labour—Otaki) : I rise in support of the third reading of the State Sector Amendment Bill, the reasons for which were outlined by the Minister of State Services when he began the third reading debate and went through the bill’s implications. Currently, when there are mergers of Government departments it is necessary to come back to Parliament for a legislation change, which does not seem so appropriate when it is a case of two existing Government agencies being brought together and when the opportunity for Parliament to question that is through parliamentary questions to Ministers in the estimates debate. It does seem that it takes a long time to bring in special legislation in that regard, so I support the bill, and I look forward to its being passed.

PETER BROWN (Deputy Leader—NZ First) : I have to say to the member who just resumed his seat that he read that speech exceedingly well. Perhaps after a little more rehearsal he will have it off pat. Then perhaps he will understand exactly what he is talking about.

Hon Annette King: Keep practising those walk-outs.

PETER BROWN: I know nothing about walk-outs. The way this bill has been handled in this House is absolutely disgraceful. We have here a 12-page bill, and a 12-page Supplementary Order Paper that appeared in this House last Wednesday and has not been referred to a select committee, but changes things dramatically in terms of the Department for Courts. The member over there, Mr Smith, said he was not aware that the Supplementary Order Paper abolished the Department for Courts. I shall read clause 3(b)(iii): “the abolition of the Department for Courts and the transfer of its functions to the Ministry of Justice.” Members of United Future voted for that, for no select committee, and clearly, they did not even understand what they were told at their briefing. They call themselves the common-sense party—the party that is dedicated to the interests of New Zealand and New Zealanders. That is the biggest load of waffle that I have heard for some time.

Whilst the bill was going through the Committee stage I took special note of who made a contribution and to what extent, particularly from the Government. There was only one speech from the Government, and that was from the Minister on the title.

Stephen Franks: He then denied what he said, in the next interjections.

PETER BROWN: I think he did. I think the member is correct. There was nothing at all from the Government members, from the Labour members. There was not one single contribution during the whole debate when the bill went through the Committee stage. There was nothing at all from the Greens. There was not one single contribution from the Greens. The abolition of the Department for Courts is quite radical stuff, and the Greens sit there in silence. There was not one speech from United Future in the Committee stage.

Stephen Franks: They know everything. They’ve been briefed.

PETER BROWN: I know. They have been briefed. They did not even know. They interjected on the Hon Richard Prebble and denied that the Department for Courts was to be abolished. They did not even know that. They did not know that the Department for Courts is an employer of nearly 2,000 people. That member can sit there and smirk and say that they voted for it, that they do not care that the public has no say, that New Zealanders have no say; they voted for it, because they are the common-sense party. That is what they are saying to New Zealanders.

Stephen Franks: It’s called prerogative.

PETER BROWN: That is the polite term for what it is. I can think of another term. It is disgraceful. One thing that makes me hot under the collar in this House, and it has happened on too many occasions now, is that bills go through with fairly significant Supplementary Order Papers not being referred to a select committee. This House stands for democracy and we should all stand for that. We should all be proud of the democratic process we have here. The public expects it. Indeed, the public demands it. We have no right to come to this House and take them for granted. That is absolutely treating the public and the people of this country in contempt. If that is the best that United Future members can do, it is absolutely not good enough by a long way.

When the bill first progressed, there was no United Future. It did not have a “Future”, and the United Future member, without the “Future”, was voting with the National Party. When United Future got a “Future”, it went backwards and became autocratic. It knows better than everybody else. United Future is displaying that it knows better than anyone else. Now it votes exactly the opposite to what it did when it did not have a “Future”. That is the quickest way I can think of to be written into the history books and to become “United Past”.

New Zealand First recognises that there is some merit in what the Government wants to do in this bill. But the procedure to push this bill through with no democratic process whatsoever is absolutely disgraceful. We will not be supporting this bill—not at all. I regret that a new political party can come into this House and display the arrogance that it knows it all and is not prepared to refer a significant bill like this, and a significant Supplementary Order Paper, to a select committee. United Future should be standing up for New Zealanders and ensuring that their democratic rights are looked after. New Zealand First opposes this bill.

NANAIA MAHUTA (NZ Labour—Tainui) : I rise to make a brief contribution to the third reading of the State Sector Amendment Bill. I just want to highlight that one of the important elements of the bill is to limit costs to the taxpayer of compensation for technical redundancies. This is to ensure that taxpayers’ money is used more efficiently. That part of the bill finds that where employees are offered a substantially similar position at the transfer of the department, on no less favourable terms and conditions of employment, no redundancy compensation will be paid. If that is not common sense, I do not know what is. I support this bill.

SUE BRADFORD (Green) : The Green Party will be supporting the third reading of the State Sector Amendment Bill today. We are glad to see it finally reach this point, after lingering on the Order Paper since some time around the middle of 2001. Some of the bill seems somewhat redundant now, given that the restructuring of the former Work and Income New Zealand happened ages ago, but at least that merger will be retrospectively tidied up as of today.

Overall, the Green Party believes that there is nothing radical or distasteful about this bill. It is simply a common-sense step towards dealing in a sane way with what happens when Government departments are abolished, restructured, amalgamated, or otherwise subject to one of the many forms of organisational change so popular in both the private and public sectors these days. It is sensible that from now on, when new Governments come in, they will be able to change the name and focus of departments without having to bring in new legislation each time this happens. However, this does not change the fact that when a department is set up by statute, legislative change will still be required to amend or establish its purpose, and that is how it should be.

The core of the bill comprises amendments to the State Sector Act that put into place general rules with regard to the technical redundancies that occur when Government departments merge or reorganise. When employees are affected by restructuring, they will now have legislative protections, including the right to substantially the same position and substantially the same geographical location, and the right to be employed on terms and conditions that are no less favourable than those that they previously enjoyed, and on terms that treat the new position as continuous in relation to sick and holiday leave and other entitlements.

The Green Party would have liked to see similar provisions legislated for in clause 66 of the original Employment Relations Bill in 2000, as we believe that all workers should have protection such as these when their job is restructured or sold out from under them. However, as it turned out, clause 66, commonly known as “transfer of undertakings”, was not to be. We are now looking forward to seeing what the Government comes up with shortly in its proposed legislation to reform and improve the Employment Relations Act. We hope that nothing in the State Sector Amendment Bill will limit the Employment Relations Act review and amendment process, and we will certainly be seeking consequential amendments if the new legislation once again ignores transfer of undertakings, or comes up with clauses offering less protection than those contained in the bill before us today. Above all, what is needed is generic legislation that covers and protects all workers, whether or not they are in the State sector. The Green Party will be doing everything we can over the coming months to make sure the Labour Government does not let workers down on that issue the second time round.

A second aspect of this bill deals with two specific mergers of Government departments. One of those is the abolition of the Department for Courts and the transfer of its functions to the Ministry of Justice. This merger undoes the separation of courts from the justice ministry that was misguidedly brought in by National in 1995 as part of its peculiar and costly drive to separate policy from operations throughout the State sector. The Green Party welcomes the reuniting of the administration of courts and tribunals with the Ministry of Justice. It makes sense to us that unnecessary duplication of administration and other infrastructure functions is discontinued. The new ministry, with around 2,000 staff, will be a department of a rational size, rather than the Ministry of Justice having just 180 staff and being split off on its own. We also appreciate the fact that the passing of this bill means that, as we understand it, all staff involved will be offered their existing jobs or similar jobs at the same terms and conditions, and that the Public Service Association will be involved in the merger process.

The bringing together of the justice and courts departments is a useful consequence of the review of the centre, and we welcome this particular restructuring, which is geared to reducing fragmentation, improving the two-way interface between policy and practice, especially in relation to public law, and creating a single, rather than dispersed, point of contact between the executive and the judiciary.

The second reorganisation that this bill specifically covers is that of the changes to the Department of Social Welfare and Work and Income New Zealand, commonly known as WINZ, which the Labour Government fortunately instituted as soon as it practicably could after the 1999 election. The era of Christine Rankin and WINZ will surely go down in history as one of the most unfortunate in the entire ramshackle annals of New Zealand’s social security system. This late 1990s flowering of the National Party’s approach to beneficiaries was characterised by a Government department focused on style rather than substance, and by an underpinning “blame the victim” mentality that reached its epitome with the dob-in-a-beneficiary campaign on prime-time television, at the same time as departmental staff, senior-level staff, were flown by private jet to a Wairakei resort for a so-called training weekend, which was actually just a social occasion, as far as I could tell.

During that period, both the people served by WINZ and groups served by the department, such as those served by the Community Employment Group, suffered hugely. The Hunn report, carried out shortly after Labour had regained the Government benches, was a fairly accurate and revealing reflection of what had gone wrong in those years. The Green Party, at the time, welcomed the Government’s decision to change WINZ’s name in the wake of that report, because the branding of “WINZ” had become totally contaminated by the excesses of that particular era. We also welcomed the bringing together of social policy, income support, and employment functions into one department, and the quite different and far more positive approach to leadership taken by both the Minister and the new chief executive officer, Peter Hughes. While the Ministry of Social Development, which is retrospectively mandated by this legislation, is not without ongoing and substantial problems, the Green Party unhesitatingly supports the changes made in this bill. I just hope I live to see the day when people will stop using the now very out-of-date term “WINZ” in describing the department, because it carries with it a legacy of contempt for beneficiaries and for staff that I hope we will never see again.

DAVID BENSON-POPE (NZ Labour—Dunedin South) : I am pleased to rise in support of the third reading of the State Sector Amendment Bill, and I know that the New Zealand community will overwhelmingly welcome the opportunity it presents for more efficient reorganisation of the public service.

Sandra Goudie: How do you know?

Peter Brown: Tell us why you’re doing it.

DAVID BENSON-POPE: Indeed, I say to those members interjecting from the Opposition benches that they could well follow the same path, with some more efficient reorganisation within their own National Party structure. Of course, they would need to maintain fairness towards employees, which is a problem they have.

The New Zealand community will also be pleased at the savings in public money through the reduction of the unnecessary technical redundancy provision. Nothing has made more of a nonsense of our redundancy laws than those people who pick up repeated redundancies when there has been a technical shift only. For that reason alone, I am please to commend this bill to the House.

LINDSAY TISCH (NZ National—Piako) : It has been interesting over the last couple of sitting days to debate a completely new State Sector Amendment Bill, because that is what we have. A Supplementary Order Paper was lodged at the eleventh hour—when we started the Committee stage—the other night that was longer than the original bill. This Government brings this sort of legislation in at the last minute, there is no opportunity for debate or for referral to a select committee, so the close scrutiny that is what this House is about does not happen. As I have said in previous debates, and as I reiterate now, that is an absolute abuse of the parliamentary process. This sort of legislation can be brought in, and those who are affected by it and those who know something about the area do not have an opportunity to have a say.

National is opposing this bill. We are opposing it because, first, we do not agree with the concept of departments being able to be merged, amalgamated, or abolished by way of an executive decision by Order in Council. That is what this bill does. This Government, by way of regulation, will be able to say that it does not like a particular department or that it thinks particular departments should merge. The Government will not bring that to the House for us to say what we think about it, to hear some submissions on it, and to look at the pros and cons, the advantages and disadvantages. That will not happen. What will happen is, by Order in Council, this executive will politicise the process, and will be able to merge a couple of departments if it wants. If one of those departments has a chief executive that it does not like, this is one way that it can get rid of that person. Members will be aware, as it has been discussed over time, of the Christine Rankin affair. This bill is a consequence of that.

If this piece of legislation is so important, why has it been so long since its first reading, in July 2001? At that stage there were only 4 weeks for the select committee to have a look at it, and of those 4 weeks there were only 9 days in which submissions could be heard. In addition, one of those weeks was an adjournment week. I was on the select committee that looked at it, and at the time we said— I said—that it was very hasty legislation. It is very important legislation, and the Government gave us only 4 weeks and cut down the submission time. We reported it back in September 2001, and what has happened since then? Twenty-two months later we are having the Committee stage and the third reading, and, as I mentioned, the Committee stage dealt with a completely new bill by way of a 13-page Supplementary Order Paper. We had never seen it before. No one had had an opportunity to have any debate on it or input into it. There was no transparency or accountability. We are now debating the third reading. National does not like that sort of process. We believe that if legislation is important, it needs to have a fair hearing. People who will be affected by it need to have a say.

It was also interesting that, during the Committee stage, not one Government member was prepared to stand up to defend or support the legislation, or to add value to the debate in terms of what the bill was about and, more particularly, what the Supplementary Order Paper was about. Even United Future party members, who support the bill, did not bother to take a call. I was interested in the comments from Murray Smith, who said he supported some of the points made by National, but when it comes to the crux, to voting on something like this, those members vote with the Government. I remind the United Future party that way back in September—

Peter Brown: When was that?

LINDSAY TISCH: Back in September 2001, the leader of that party voted against the bill. National held the proxy for him at that time, and I have here the record of his vote.

This bill is now retrospective. Clause 2, “Commencement”, now states that sections 6 to 11(1), 12 to 15, and schedule 1 will be deemed to have come into force on 1 October 2001. This is retrospective legislation. These things have already happened, and what we are doing here today, in the debate on the third reading, is supporting that. I would have thought that a party that is supporting the Government in order to allow this legislation to be passed would be able to stand up during the Committee stage and advance its position by looking very closely at whether it supported the legislation, and say what the advantages or disadvantages were. Well, it did not surprise me that United Future members did not stand up to support it. They were not even around way back in 2001 when their leader voted against this legislation, but they have not given us the courtesy of giving us their experience and knowledge of the bill. They probably have not read it—that is why. They probably do not know what it really means, and, therefore, they have not come forward to say what it really means and how it is to be implemented.

I want to recap on what the bill does, because we have major concerns about it. In essence, it allows the Crown to reorganise, abolish, or merge Government departments, to do whatever it wants, by this very important power that the executive of this minority Government has—by Order in Council. The Government does not have to bring that proposal back to Parliament, ask us what we think about it, and have a debate on it to see whether it is in the best interests of the country. No, that will not happen. It will be done by Order in Council, by the executive. Members should remember that this is a minority Government. That is the power that it will now be exercising, and we—

Darren Hughes: This is a super-minority Opposition.

LINDSAY TISCH: “It’s a super-power.”, he says; he is right as it is super-abuse of the system. In my view, the parliamentary process is being abused. It is being abused in two cases. First, we had a Supplementary Order Paper that no one knew about, and we had to debate it. Second, the Government is taking all the power and will be making these important decisions by Order in Council. We are not happy with that. We are voting against it, and I have said that before. Not only are we concerned but organisations like the Law Society are concerned. The society said that there was a need for cautious assessment of the proposed provisions. That is given emphasis here because one of the parties to the contracts to be overridden by statute is the Crown. The Crown not only is promoting this legislation but also will be the contractual beneficiary of it. In this legislation the Crown is determining its own destiny. National members look for accountability, and that is why we are not happy with the bill.

The Regulations Review Committee also put out a warning at that time. It said: “We question there are sufficient reasons to allow an Act of Parliament to be amended by a regulation in this way.” The committee sent out a caution. It was not happy about this happening. The bill may be administratively convenient, but that must be weighed up against the loss of parliamentary oversight. National says that when legislation comes in with no accountability and with no opportunity for members to have a say, then that is an abuse of the system and we are not happy with it. The Regulations Review Committee had a very, very powerful message for us, but this Government said that it was not interested in that message, and would go ahead regardless with the points it wanted to make.

For the points I have mentioned—the abuse of the system and the way that this bill will allow the executive, by Order in Council, to make decisions that will affect all of us in the future—I say that National is strongly opposed to this bill.

Hon ANNETTE KING (Minister of Health) : I stand to support this bill. Having just listened to the member who has resumed his seat, I realise that National members speak out of both sides of their mouths. On one hand, they are always talking about wanting to keep down the costs of bureaucracy, but when a bill gives us the ability to get rid of things like technical redundancies, they are opposed to it. National cannot have it both ways. The senior Labour whip said in his speech that the public would be pleased with this bill, and he is right. This bill saves money for long-suffering taxpayers by reducing unnecessary payments for technical redundancies, which occur when a person gets a payout when moving from one Government department to another. This is a good bill, and I am glad it is making progress through this House.

SANDRA GOUDIE (NZ National—Coromandel) : As members are aware, the National Opposition opposes the bill. One of the greatest concerns I have is the continual stream of ill-conceived legislation being put through the House by this Labour Government. In the formulation of legislation there is a set of guidelines that can be referred to, called Legislative Changes: Guidelines on Process and Content. Submitters referred to those guidelines because of their grave concerns about this legislation. There have been a number of revised editions of those guidelines, and the copy I have is of Report No. 6, December 1991. The committee members were people with significant experience, and I will name a few of them: Professor Brookfield, Fogarty QC, Galbraith QC, Sir Kenneth Keith, Justice Robertson, and Judge Sheppard.

The first question to ask is whether the legislation is necessary. Essentially, the bill does two things. First, it removes structural change to State departments from public scrutiny. Do we need legislative change for that—in the interests of maintaining accountability to the public? No, it is neither needed nor wanted, because for any of those sorts of changes, Parliament must be accountable to the public. We have here a bill that intends to ignore the guidelines already mentioned. Page 29 of those guidelines states that Parliament has to approve the addition of new departments to the list of departments scheduled in the State Sector Act, as well as deletions and alterations. The reason for that recommendation is quite simple: Parliament must be open to public scrutiny. The august body of significant expertise that comprises that committee has already described the reasons for that, and makes that recommendation objectively and free of constraint or political interference.

One very valid concern about this bill is that the ease of changes to departments would result in the politicisation of the public service and give the Government the ability to use the disbandment of a department as a threat. The committee’s concern was expressed during the public submission process of the original bill way back in 2001, but, as members are aware, the bill has sat on the shelf since then. We come to 2003, and there is an amendment to that bill even longer than the bill itself, which has not been through the public process.

The second critical aspect is that the bill allows the Crown to override contracts by statute. That was a major concern of the New Zealand Law Society, and so the question arises: do we need legislative change for such a purpose? Again, the answer is no. It is neither needed nor wanted. Here the Government is not only promoting legislation, but promoting legislation, knowing fully that it intends to be the beneficiary as a result of that bill being passed.

How does this bill fit with the Employment Relations Act? The Public Service Association’s submission makes it quite clear that many aspects of the bill are based on principles already negotiated in management-of-change clauses in collective contracts and agreements, so that outcome can already be achieved through the negotiation phase of those agreements. We do not need legislation to do that. What will this bill do to the Public Service Association’s ability to negotiate contracts freely? Without going through a full legislative process and the scrutiny of a select committee, the bill has absolutely no commentary to address any of the real questions of concern that have been raised.

So what are the legal implications of so-called technical redundancies, where employees of Government departments are not entitled to compensation even though their employment contract agreements might provide for compensation? As I have already mentioned, their negotiated contracts—whether they are individual or collective contracts—can address those areas of concern, and so they do not need to be part of a legislative change. Yet again, I refer members back to the guidelines.

Another basic principle in the formulation of legislation is that the legislation being formed must fit appropriately into the general body of existing law. Moreover, the guidelines also state that where there has been any departure from the guidelines set down in the No. 6 report, the departure needs to be indicated, along with the reasons for it. Clearly, that has not been done with this bill. There is no commentary on the substantive changes that were introduced into the House last week.

I am sure that all of the questions could have been answered had the bill been allowed to go through the proper legislative process, by which amendments would have been referred back to the select committee. That is where the proper parliamentary process has been sidestepped. This Government has failed the people of New Zealand in the promotion of this bill. Apart from the denial of public process when undertaking changes in the State sector, there has been a denial of public process when attempting to find answers to the many questions that have been raised as a result of substantive amendments to the original bill.

The responsibility for developing legislation in accordance with the guidelines rests with the Minister, and it is quite clear that the Minister has failed in a number of respects in introducing this legislation. He has failed to provide the opportunity for the Supplementary Order Paper to be put before the select committee, which is a gross omission on the part of this Government and a failure of its fiduciary duty. Lianne Dalziel mentioned fiduciary duty last week, but I wonder whether this Labour Government understands what fiduciary duty actually means. It means governing for the benefit of the nation as a whole, and to do that one has to go through proper legislative processes and invite the public to be a part of that process. But although this Government requires a huge amount of consultative process on the one hand—particularly with local government—it is sidestepping its responsibility in not providing for a consultative public process on the substantive amendment to this bill on the other hand. It has absolutely failed in its fiduciary responsibility to the people of New Zealand.

National is glad to oppose this bill. We would expect the Government to reconsider it and send it back to the select committee, although I doubt it will do that at this late stage of the process. I think that is shameful, and we expect more. We can see the deterioration of the processes of this House in question time, and we can now see it with regard to legislation. This Government has absolutely failed in its fiduciary duty to the people of New Zealand.

KEITH LOCKE (Green) : When I was speaking last Thursday I was expressing the Green Party’s support for this bill, which allows the International Criminal Court to function more freely through granting immunity to judges and others involved. Unfortunately, the United States is challenging the ability of the court to function by going around the world and signing agreements with countries to exempt its citizens from the jurisdiction of the court. For example, we could have a situation where United States soldiers commit crimes under the Rome Treaty, but because of these exemptions they do not fall within the jurisdiction of the court. That may already be a very practical problem, in that Amnesty International issued a report last week slamming the United States occupation forces in Iraq for torture and ill treatment of prisoners, beating prisoners with rifle butts, and killing people. It said that reported methods of torture included prolonged sleep deprivation and prolonged restraint in painful positions, sometimes combined with exposure to loud music, prolonged hooding, and exposure to bright lights. Then on the television news last week we saw the United States commander north of Baghdad explicitly threatening to punish a village and bulldoze crops, which is the sort of collective punishment deemed to be a crime against humanity under the Rome Treaty.

To give members an idea of the scale of Bush’s campaign to get Governments to sign up to such exemptions for its citizens, the 3 July edition of the New Zealand Herald reported that 44 Governments had already signed article 98 exemptions for US citizens, and seven countries had secret agreements—that is, their Governments were scared to tell their own people that they had caved in to the US administration on that matter. The Bush Government is trying to blackmail 35 other Governments into signing such agreements by announcing a cut-off of military aid to those particular countries. It is no doubt using the carrot of more aid to get other countries in line, which is perhaps why Nauru, Tonga, and Tuvalu have signed up to those exemptions. It is disappointing that our Government took no diplomatic steps whatsoever to stop that from happening, and the Minister of Foreign Affairs and Trade admitted that in his answers to written questions from me.

I think we should do more to challenge United States’ efforts to undermine the International Criminal Court in the South Pacific. Unfortunately, New Zealand’s support for the court—which is reinforced by the very good bill before us—is compromised by the nature of our commitment to Afghanistan in terms of the hundred or so troops who will be going there shortly to join Operation Enduring Freedom, which is a US-run operation. That operation does not have a Status of Forces Agreement with the interim Karzai administration in Afghanistan, specifically so as to allow US troops to do anything they like without any reference to the Karzai Government. If US troops should do anything that would be classified as a crime under the Rome Treaty, there is no possibility that they will fall under the jurisdiction of the International Criminal Court.

There is a problem here for New Zealand and our troop commitment, because if the New Zealand forces take prisoners in Afghanistan and hand them over to American jurisdiction, and if they are mistreated by the United States, then those crimes will not be under the jurisdiction of the International Criminal Court. We already know that the world community is outraged by some of the things that the United States has done, both in Afghanistan and to prisoners held at the prison camp at Guantanamo Bay. There were reports in our papers not long ago from a coroner’s report showing that the US forces in Bagram Airbase had tortured two prisoners to death. The treatment of prisoners at Guantanamo Bay also amounts to torture.

On 8 July the United Nations Commission on Human Rights issued a press statement expressing alarm over the military trial of detainees, and criticising the military trials that America tends to implement in Guantanamo Bay. Those trials will be a travesty of justice. Those accused are not allowed even the right to have their own lawyer. They will be quite the opposite of the very fair trials that will exist under the provisions of the International Criminal Court that we are supporting in this bill, which are very careful trials with proper defence and good quality international judges. We should not do anything in Afghanistan that might in some way compromise our position in that respect.

Reading further into what Amnesty International came out with last week, it is very disturbing to find the way that war crimes may be being committed by the occupation forces in Iraq. Its press statement talks about the death of one innocent person, Saadi al-Ubaydi. It says that several soldiers forced their way into a house in and beat him with their rifle butts. He ran out of the house to get away from them, but they shot him a few metres away, and he died immediately. It talks about soldiers forcing neighbours in a community to the ground, and one of the people involved being killed. That is the sort of thing that is going on in Iraq, and in other countries around the world.

I have concentrated here on the United States because its Government poses a problem of jurisdiction for the International Criminal Court, but war crimes are going on in Liberia and in other places around the world. We want a proper universal system to enhance that process of justice, and this bill will support that, but we should not do anything else that would assist the United States in encouraging other countries not to sign the Rome Treaty, or to exempt its citizens from the jurisdiction of the International Criminal Court.

DARREN HUGHES (NZ Labour—Otaki) : This is a very short bill, but it is also a very important one because it reaffirms this Parliament’s commitment to the International Criminal Court. The bill will allow New Zealand to ratify the Agreement on the Privileges and Immunities of the International Criminal Court, which will mean that if there is ever a time when the International Criminal Court has to sit in New Zealand we will be able to provide those protections to the judges who sit on, and the staff who service, that very important international panel. It is another example of the Government’s and Parliament’s response to international cooperation. I support the passage of this bill to the select committee.

STEPHEN FRANKS (ACT NZ) : I rise for the ACT party to oppose the passage of this bill. This bill cements in the International Criminal Court’s jurisdiction in this country by revising and expanding the range of immunities that may be enjoyed by people working for that court in New Zealand. We say Parliament should be spending time on the task that the Foreign Affairs, Defence and Trade Committee and this Parliament failed in when we passed the International Crimes and International Criminal Court Bill in 2000. We should be looking at the immunities we may need in order to protect New Zealanders from forms of justice and from offences that would be repugnant to our law—the things that were not reserved out of the reach of that court, which may well become a victors’ tribunal.

The United States has stayed out of the International Criminal Court, for the very good reason that it is dominated, and is potentially permanently dominated, by countries that may not share the values that are embedded in our traditions of law and freedom. Despite the very good intentions of those who support it and the best wishes of those who have set it up, that court could well end up becoming one of the very worst evidences of the kind of globalisation that the Greens usually oppose. Paradoxically, in this case they are keen to see globalisation extended. The Europeans who have been very keen on the court do not appreciate the sentiment in the United States, and the United States Congress, against it.

Unlike most of the European Parliaments, Congress is not a rubber stamp. The United States Congress has active constitutional concerns in its Congress. The United States is, as the Green member Mr Locke said, going around the world and making sure that at least it protects its soldiers from possible victors’ tribunal political show trials. Trials like that could be conducted at the urging of members of national legislatures—like Mr Locke—who are not interested in the topic or in the real merits of a case, but who are interested in fulminating against only what they see as the power of the United States, and against the values they so detest that the United States upholds.

We believe this bill should be a chance for Parliament to take a good look at what it has signed up to. We should recognise, for example, that our troops in the Solomon Islands could easily end up in a position where, should events turn in a nasty direction and history go against New Zealand, we could well find people coming back and accusing our people in the Solomon Islands of activity that, under the very vague statute that sets up the International Criminal Court, could be classified as war crimes.

For example, it may be, given the dire ethnic tensions in the Solomon Islands, that a form of separation is seen as the most practical way of stopping the dreadful attacks and assaults that have occurred. I hope that will not happen, and as I understand it, it is unlikely at this stage. But some kind of separation is not beyond the realms of possibility, given that it has been called for by many people in the Solomon Islands. Of course, the very root of much of the problem in the Solomon Islands started when there was a call to send the Malaitans back to Malaita.

If the New Zealand troops and police are involved in anything that ends up adopting that kind of separation, they may well fall foul of the apartheid crime under the international statute. That crime is not defined; it could mean just about anything that a tribunal wanted to make it mean. We could find, in 15 or 20 years’ time, that those New Zealanders who went there in idealism are being hauled before a court that simply wants to make a political point of attacking a relatively defenceless former ally, or ally, of the United States. Far stranger things have happened in international affairs than an attack by proxy, in order to see what the major power does in response. New Zealand has set itself up for that by naively signing up to a tribunal and a set of rules that do not define the core offences, and that should be of concern to us.

We are concerned also that the immunities that are spoken of here in this bill are immunities for people who may share none of our values. These are diplomatic immunities for people who may come in here to press a charge that would be double jeopardy, if it were made under New Zealand law. There is no right to a trial by jury. There is no certainty that the judicial philosophy of the International Criminal Court will respect our traditional liberties or protections. There is a power, for example, for evidence to be given by bodies that have no real connection with the victims: non-governmental organisations. The statute provides for non-governmental organisations to represent victims. That is just a recipe for political show trials without the accused having a chance to face the real accuser.

Those breaches of the liberties that took hundreds of years to evolve in our law could be cured if this bill, instead of meekly submitting to the wish of those who want to make New Zealand look respectable in third-way forums, had restrictions on the surrender of New Zealand citizens. For example, this bill may have been an opportunity to ensure that a New Zealand citizen could not be hauled before the International Criminal Court unless the New Zealand courts were satisfied that it was for an offence that would be an offence under New Zealand law, or under the statute as properly interpreted.

We could have this law ensure that we have the lawful authority to make sure that United States troops are not at risk of an opportunist seizure, while in New Zealand. The countries that Mr Locke referred to, which are signing agreements with the United States not to hand over United States citizens to the International Criminal Court, will be places where United States forces can go when invited, without having to worry about an opportunist act by that court or its agents to seize people whom they could not otherwise seize. In fact, the immunities that are being provided for in this bill may one day be an opportunity for the enemies of New Zealand to embarrass New Zealand, by endeavouring to seize and hand over people whom the International Criminal Court is prosecuting, when the New Zealand ally—the United States or another country that comes to similar arrangements—is not considered by us to have been in breach of international law, at all.

When this bill goes to the select committee, if it follows the pattern of the previous legislation it will come back with an utterly anodyne report that does not address the real issue. When the International Crimes and International Criminal Court Bill came back to this Parliament from the Foreign Affairs, Defence and Trade Committee the report did not even mention the vital fact that neither Australia, at that time, nor the United States proposed to sign up, and that as they were our two most closely allied countries the bill would, therefore, be a problem in our relationship with them. The committee failed even to note for the information of this Parliament that the bill would be a major problem in the relationship with our then two closest allies.

Since then, of course, the Prime Minister of Australia has been rolled by his Foreign Minister, and Australia has signed up to the Rome Statute. But it has also made it very plain to the United States that Australia is sympathetic to the concerns of the United States. I would not be surprised if Australia, in the new spirit of realism it has exhibited in its foreign affairs, at some stage considers repudiating the treaty, in the same way as the Bush Government has. Until the offences under the Rome Statute are properly defined we are living under a statute that, if it had been in force at the time, could have seen, for example, our service people in Malaysia prosecuted as war criminals for the successful suppression of the terrorist rebellion in Malaysia and the kampong policy. It could also have seen, for example, our officers at Monte Cassino prosecuted as war criminals for the mistake they made in relation to the abbey at Monte Cassino, and it could in future see our people who participate in good faith in humanitarian efforts involved in actions that the International Criminal Court may decide, for political reasons, are war crimes.

This bill should not proceed until Parliament looks at the International Crimes and International Criminal Court Act properly.

NANAIA MAHUTA (NZ Labour—Tainui) : Unlike the comments made by the previous speaker, I say the privileges and immunities that are provided for in this bill will be in the best interests of the International Criminal Court. They are not for the personal benefit of the individuals concerned, and that is the point to make. As we all know, the International Criminal Court is the world’s first criminal court that is capable of trying those individuals who are accused of the most serious violations of international humanitarian law—namely, genocide, war crimes, and crimes against humanity. This bill sets out the privileges and immunities that the judges and staff of the International Criminal Court will have while working in New Zealand. While it is unlikely that the court will ever sit in New Zealand, it is possible that investigators may wish to question witnesses here about events that have occurred elsewhere around the world. I commend this bill to the House.

Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) : Members of the public who are listening to this debate could be forgiven for being totally confused as to what on earth this Parliament is debating this afternoon. Having listened to the Green member Keith Locke’s rantings, they could be fully excused for not having a clue what we are talking about. This bill amends the Diplomatic Privileges and Immunities Act, which is the Act that provides for diplomats in this country to enjoy very important privileges and immunities that other citizens of New Zealand, or other visitors to New Zealand, do not enjoy. Diplomatic privileges are very, very important privileges. We all need to be conscious of that.

Back in the year 2000 New Zealand passed another piece of legislation that implemented a very similar law to this—the International Crimes and International Criminal Court Act. Back in 2000 that legislation implemented the necessary law changes in New Zealand following the establishment of the Rome Statute for the International Criminal Court. So we have already put provisions in our law once before, in the year 2000, to provide for the Rome Statute, which established the International Criminal Court that some members have spoken about. Subsequently, following the establishment of the International Criminal Court and following the Rome Statute, the parties involved agreed on a set of privileges and immunities of the International Criminal Court. After the Rome Statute established the court, a quite recent agreement was reached to establish the privileges and immunities of that court. The legislation that we passed in this Parliament back in 2000—the International Crimes and International Criminal Court Act—did not meet all the requirements of that recent Agreement on the Privileges and Immunities of the International Criminal Court. That is why this amendment legislation is back in this Parliament right now.

I was saddened when I listened to one or two of the contributions this afternoon, and especially to that of the Green member Keith Locke. We did not hear any debate over the detail of this bill or about the wisdom of the privileges and immunities that this country is about to provide for people involved with the International Criminal Court. We heard Keith Locke rant against the United States of America. All I can say is that that saddens me hugely. There is a risk that people who listened to him might think that that is the view of all New Zealanders. When a member of this Parliament makes those kinds of statements against the United States of America, it concerns me that people who listen to them from overseas, or even good New Zealanders, may think that that is what we parliamentarians think. I want to make it very clear that I and the National Party dissociate ourselves totally from what Keith Lock had to say this afternoon.

One of the fascinating things with regard to the Green political party here in New Zealand is that what unites it is not a care about conservation—not at all. What unites Green members is their distaste of most of the values of the United States of America, and more important than that, their intense hatred of some of the values that emanate from that country. For example, those members hate with a passion the multinational corporations, which I guess tend to emanate more from the United States of America than from elsewhere, as it has the biggest economy in the world. It is sad to hear that expressed in the Parliament of New Zealand, when the United States of America is one of our best friends and one of the countries that is most important in terms of New Zealand’s future. I simply say to Keith Locke that he does New Zealand a great disservice when in this Parliament he simply emits a litany of condemnation against the United States of America, which holds values that are very dear to us. Its values are very similar to ours. It has defended New Zealand in the past, and is vitally important in terms of our future.

Let me come to the detail of this particular bill. The real substance can be found in clause 3. This is a very short bill, which has only 4 clauses. Clause 3 replaces section 10D of the principal Act and adds a new section 10E. Section 10D was inserted in the year 2000, when we first had a go at providing for the Rome Statute and the International Criminal Court. I do not see any particular problem with that. It makes sense that the International Criminal Court is able to operate, should it ever need to, in New Zealand. Certainly, it may at times have to interview people in New Zealand, so it makes sense to provide proper diplomatic privileges and immunity for people involved in that court. I do not see any great question around new section 10D in clause 3.

To me, the more interesting part of this bill—the bit that I would like the select committee to examine in somewhat greater detail—is the part that the Minister of Foreign Affairs and Trade omitted to mention in the publicity statement he issued quite recently. In that statement he said the bill protects the International Criminal Court’s staff. However, he omitted to include in his comments about what the bill does those matters that are covered in new section 10E. He talked about the matters in new section 10D, which cover the officers and staff associated with the International Criminal Court, but he did not mention the matters covered in new section 10E, “Privileges and immunities of representatives at Assembly of States Parties or its subsidiary organs”. I am sure that not many people would understand what on earth that is all about. I do not claim to understand exactly what new section 10E does.

But it worries me that the diplomatic privileges and immunities that this legislation will provide for certain people in our country are very, very important and valuable privileges and immunities. They are not to be dished out lightly. They are dished out to international diplomats who have to function in New Zealand; it is an international custom that such diplomats are provided with certain immunities and privileges. Our diplomats receive those privileges and immunities in the countries they work in around the world. However, what worries me about new section 10E is that it appears to me to provide for all sorts of hangers-on of the UN to be granted the same vitally important privileges and immunities in this country. Section 10E(1) states: “(1) The Governor-General may, by Order in Council, confer such privileges and immunities as may be required by article 13 of the Agreement on the following persons:... (c) representatives of States or intergovernmental organisations invited to meetings of the Assembly of States Parties or any of its subsidiary organs.” We are proposing a hugely wide provision, and the Minister did not talk about that in his press statement. In this legislation we are proposing to provide the hugely important privilege of diplomatic immunity for a whole range of people who do not require that for the functioning of the International Criminal Court, at all.

That worries me. Why did the Minister not mention that in his press release about the bill? Why did he talk about new section 10D and not about new section 10E? Sure, there can be no question that article 13 of the recent agreement requires us to do something in this area. But when the select committee examines the bill, I want it to have a good look at what new section 10E provides, because it confers very important immunities and privileges on a whole range of people who are not remotely involved in the functioning of the International Criminal Court and who may not require those immunities and privileges, at all. I think we should think very carefully about how we implement article 13 of the agreement in new section 10E.

We support this legislation in principle, of course, but I want to make sure we have a very good look at that provision in new section 10E, because I think it needs further scrutiny.

MARK PECK (NZ Labour—Invercargill) : I support this bill.

RICHARD WORTH (NZ National—Epsom) : The previous speaker was good enough to say, without reason—perhaps because he had no reason to offer—that he supported this bill. It is great to come to a position with no reason for coming to that position. On behalf of National, I would like to start by congratulating the new member who has joined Parliament today and express the hope that when she gives her maiden speech that this bill, the Diplomatic Privileges and Immunities Amendment Bill, might be one of the issues she takes up and talks about. The bill is probably the very first of the bills she will hear debated in the course of what I do not doubt will be a long and distinguished parliamentary career.

The need for this legislation arises as a result of the enactment 3 years ago of the International Crimes and International Criminal Court Act. But for that Act we would not be hearing these comments today. The purpose of that legislation was to do two things: first, to make provision in New Zealand for the punishment of a number of international crimes that either were not in their own right crimes or were not well spelt out in that way, and they touched on issues of genocide, crimes against humanity, and war crimes; and, second, to enable New Zealand to cooperate with the International Criminal Court, which was established by the Rome Statute.

So it was that the International Crimes and International Criminal Courts Act was passed in the year 2000. The statute itself deals with international crimes and offences against administration of justice. It deals with arrest and surrender of persons to the International Criminal Court, with domestic procedures or other types of cooperation, and with enforcement of penalties, including, interestingly, in a restorative justice context, orders relating to victim reparation. So we see in that legislation something I learnt only 12 hours ago in Korea, where people in the streets were wearing T-shirts that had written on them: “Freedom is not free”, and that is assuredly so.

Of relevance in the context of the Diplomatic Privileges and Immunities Amendment Bill that we are now debating are those parts of the year 2000 statute that have a clear New Zealand involvement. The two principal parts of that Act that deal with this issue are Part 7, which is all about serving sentences imposed by the International Criminal Court, in particular the enforcement of sentences in New Zealand, and Part 9, which deals with the investigations or sittings of the International Criminal Court in New Zealand. That is likely to be a rare event, but it will certainly be possible.

I have greater faith than the ACT party speaker who made critical comments about this legislation and expressed the hope that it would not pass, because, unlike him, I do have a high degree of confidence in the institution and organs of the United Nations and similar international bodies. It seems to me to be drawing a very long bow to say that soldiers deployed in the last week to the Solomon Islands to deal with issues of law and order and to seek to make the peace might face criminal prosecutions in respect of war crimes. After all, the personnel who are there were invited at the behest of the Solomon Islands Government, and they are there with the committed support of the surrounding States in the South-west Pacific.

The bill itself amends the Diplomatic Privileges and Immunities Act—an Act that is, certainly in the context of this Parliament, quite old legislation that has not been much amended. Annexed to that statute are the schedule provisions that pick up the relevant conventions, including the Vienna Convention on Diplomatic Relations and Optional Protocols Done at Vienna. There to be found are privileges, such as those that exist in respect of criminal prosecution, and they put on a diplomat who crosses the line the clear choice of facing criminal prosecution or else maintaining diplomatic immunity, with the consequence of recall to the sending State.

We are looking at changes to the principal Act that revolve around section 10. Clause 3 repeals section 10D and substitutes new sections 10D and 10E. Section 10 has, of course, been earlier amended; we would not be talking about numbers like 10D and 10E were that not so. It was section 10A that provided facilitation of international inspectors under disarmament treaties, section 10B that provided privileges and immunities of judges, prosecutors, and staff of the International War Crimes Tribunal, and section 10C that provided privileges and immunities of members of the International Tribunal for the Law of the Sea. This is the second crack at getting privileges and immunities of judges, prosecutors, and staff of the International Criminal Court right. Section 10D, as it was passed, was clearly unsatisfactory, so we face a new section 10D of remarkably greater scope.

Dr the Hon Lockwood Smith has probably made a very fair point in his criticisms, not of new section 10D but of new section 10E, which is extraordinarily widely worded. I express the hope that it may very well be that the Foreign Affairs, Defence and Trade Committee will look in a hard-nosed way at that particular provision to see whether its width is really justified.

The final issue I wish to speak about and note is that whilst Australia has—apparently with some reluctance—been prepared to sign up to the International Criminal Court, the United States has held out. It holds out, I suggest, for reasons that, in the context of the world community, are not wholly satisfactory. I hope that the select committee has a very hard look at the reasons that compelled the United States Government to that course. That course may be understandable in the United States context, but it equally may not be. I say “may not be”, because New Zealand is one of those countries that have peacekeepers in many, many nations—in more nations than the United States currently has. Our recent activities in the last 10 years have seen international peacekeepers posted to some of the toughest and harshest areas of the world. Angola is a very simple illustration of that. The sorts of pressures that our peacekeepers came under in Angola were certainly comparable with the very worst circumstances that existed in the Vietnam War, for example, for some of our personnel deployed in that station. So I express the hope that the Foreign Affairs, Defence and Trade Committee will, when it considers the Diplomatic Privileges and Immunities Amendment Bill, look hard at those reasons that have impelled the United States’ action, and be thoroughly satisfied that this provision is an appropriate change to be made to our longstanding statute on diplomatic privilege and immunity.

• Bill read a first time, and referred to the Foreign Affairs, Defence and Trade Committee., referred to the Foreign Affairs, Defence and Trade Committee

Hon LIANNE DALZIEL (Associate Minister of Justice), on behalf of the Minister of Justice: I move, That the Lawyers and Conveyancers Bill be now read a first time. It is my intention to move that the bill be referred to the Justice and Electoral Committee for consideration, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of a House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 193 and 196(1)(b) and (c).

The bill reforms the structure of the legal profession and creates a new occupation of licensed conveyancers. As a result of the passage of this bill the Law Practitioners Act will be repealed. The structure of the legal profession is supported by the New Zealand Law Society, which favours a more responsive regulatory structure better suited to the changed nature of the legal services market. There is also a more general need for an improved structure that meets consumers’ needs for an accountable legal profession.

The impetus for the introduction of the occupation of conveyancers has its origins in the Hon Phil Goff’s 1997 Conveyancers Bill. More generally, the bill will provide consumers with greater choice among legal services providers. This choice is not, however, at the expense of their protection. The bill combines, appropriately, elements of professional self-regulation, with governmental control.

This is a large bill, comprising 11 parts. Part 1 sets out the fundamental obligations of lawyers and licensed conveyancers. Lawyers and conveyancers must be independent in providing services to their clients, and they must act in accordance with all fiduciary duties and duties of care owed by them to their clients. Subject to other requirements, and particularly in the case of lawyers in their overriding duties to the court—and I make the point to the House that they are, indeed, officers of the court—they must protect the interests of their clients, and, in the case of lawyers, they must uphold the rule of law and facilitate the administration of justice in New Zealand. Firms will be able to incorporate. The bill will allow lawyers to practice in incorporated firms in which all the directors and shareholders are lawyers actively involved in the practice, and it will allow conveyancers to practice in a similar structure. There will be requirements under professional rules for practitioners and incorporated firms to have indemnity insurance.

Part 2 contains title protection provisions. For example, it will be an offence to use the term “lawyer” or “law practitioner” if not entitled to do so. The part also defines the areas of work that are restricted to lawyers and licensed conveyancers. The select committee will need to consider which legal services should be restricted exclusively to lawyers. There are benefits, obviously, in a more open market, such as innovation and lower fees, but there are also possible risks for consumers when obtaining services from unregulated providers. As Minister of Immigration, I can certainly assure the House that that is so, knowing full well the implications of lack of regulation for immigration consultants who are often giving quite technical legal advice. I look forward to the select committee having a close look at what areas of work should be protected exclusively for lawyers, but specifically for the benefit of the clients.

Work reserved for lawyers includes representation before any court or tribunal, subject to existing statutory exceptions, giving legal advice for reward to a person in relation to the conduct of court or tribunal proceedings, and the giving of advice required by statute to be undertaken by a lawyer. Persons other than lawyers will be able to provide general legal advice in the drafting of legal documents. Generally, only lawyers will be able to draft court documents for reward, appear in courts or tribunals, give advice on the conduct of proceedings, or perform statutory functions, such as certifying matrimonial property agreements.

Part 3 provides the criteria for admission as a barrister and solicitor. Parts 4 and 5 make provision for the New Zealand Law Society and the New Zealand Society of Conveyancers respectively. Both societies will have a range of broadly similar regulatory responsibilities, including overseeing enforcement of the legislation, admission and enrolment of practitioners, and implementation and enforcement of complaints in disciplinary processes.

Part 4 separates the current regulatory and representative functions of the New Zealand Law Society. Although all lawyers will be regulated by the society, they will no longer be required to be members for the purposes of representative functions.

Simon Power: Trying to do away with unionism.

Hon LIANNE DALZIEL: District law societies will no longer be statutory bodies but may continue to exist and offer representative membership services. I hear the member interjecting across the House. I am a voluntary associate member of the Canterbury District Law Society already. Practitioners will determine the ongoing viability of district law society services, such as the provision of district law library services and local seminars. Until the New Zealand Society of Conveyancers is established, and Part 5 comes into force, the New Zealand Law Society will regulate conveyances.

Part 6 deals with practice rules on matters such as professional conduct, trust account rules, and indemnity insurance by the respective societies. These rules must be the subject of consultation with the relevant professions, and they require approval from the Minister. The part also contains provisions relating to trust accounts, which must be kept by those practitioners receiving money for or on behalf of others. Part 6 also provides that regulations may be made relating to the office of Senior Counsel, which will replace the title of Queen’s Counsel. Eligibility for appointment by the Attorney-General will be expanded to include all litigators, whether at the separate bar or in firms, so as to make it possible to select from the full range of leading advocates in New Zealand. There will be greater transparency in the appointment process. Existing Queen’s Counsel will have the option of retaining or changing their title.

Part 7 creates a new three-tier complaints and discipline system, with greater elements of independence and focus on timely resolution of complaints. Professional standards committees run by each society are intended to resolve consumer complaints quickly and effectively. A new legal complaints review officer will provide independent oversight of standards committee decisions. The legal complaints review officer may refer, overturn, or substitute decisions of a standards committee. In effect, the legal complaints review officer will replace the role of district lay observers and ensure more effective scrutiny of complaints.

The bill also creates a New Zealand Lawyers and Conveyancers Disciplinary Tribunal, which will hear and determine any charges against practitioners and any application for restoration of a practising certificate. Part 8 continues the Council of Legal Education. The council regulates the education of candidates for admission and the recognition of foreign legal qualifications.

Part 9 establishes the Lawyers and Conveyancers Special Fund. This fund is drawn from the interest paid by banks on trust accounts. The part requires any money standing to the credit of the fund to be paid to the Legal Services Agency for the purposes of funding community law centres. Part 10 requires both societies each to maintain a fidelity fund to compensate clients for particular pecuniary losses. This is an important consumer protection.

Finally, Part 11 contains the miscellaneous provisions. Two reforms are particularly significant in this part. Firstly, lawyers will be able to enter into conditional fee arrangements. A lawyer and client can agree that either the entire fee or an agreed proportion of the fee will only be payable upon the success of the client’s claim. This provision provides greater flexibility to clients in the way they choose to fund their legal services. However, Family Court, criminal, and immigration cases are excluded from conditional fee arrangements. The second element of this part is that a lawyer or a conveyance practitioner, or a person acting under his or her supervision, may undertake the work of a real estate agent—something I know that my colleague the Hon Phil Goff commenced with the bill he introduced into this House as a member’s bill back in 1997.

I commend the bill to the House.

JUDITH COLLINS (NZ National—Clevedon) : Following on from the comments made by the Minister, I rise to say that the National Party supports sending this bill to the select committee. We have a few reservations, and I would like to talk about a couple of them. I know that my colleagues Simon Power and Richard Worth will be dealing with some, so I will keep mine to just a few.

One of the issues is that district law societies will no longer have any statutory powers or rights even to exist. I note that this bill has the support of the New Zealand Law Society, and, as the Minister did not refer to any support from district law societies, I have to question, as a former president of the Auckland District Law Society, whether district law societies are quite so keen on this bill. The work of the district law societies is great and varied. Certainly in relation to the Auckland District Law Society, I would like to take this time to praise the society for the work it has done.

One of the services that district law societies provide for the use of all lawyers is district law libraries. They are located in High Courts and District Courts around the country. Practitioners pay for the libraries in their areas. It is a service that we are constantly told by the larger firms is of no use to them. Certainly, in my time in a large firm that was said. But it is not true. Large firms, as well as small firms, and barristers, are constant users of the libraries. It is extremely important for the legal profession and the people it serves, and for justice generally, that lawyers have access to information in libraries. People who are in practice in small firms, who are sole practitioners, or who are barristers, often do not have the spare funds available to spend on extensive libraries. Even the most basic library will cost mere tens of thousands of dollars a year. That is all money that those people could use in building up their practices, in continuing their legal education, and in employing staff. So it is often a huge bonus for practitioners to have these libraries—libraries that are likely to face the chop.

In addition, the district law societies currently deal with complaints against practitioners. They do this, often on a no-cost basis, because the people making the decisions are fellow practitioners who are giving of their time voluntarily. Having sat on complaints committees for several years at the Auckland District Law Society, I know that many times we were faced with situations of practitioners who were somewhat past their use-by-date; who had really not done anything wrong but who had just come to the end of their practice life and someone needed to tell them that. So we often took a very kind view in the way we helped those people to leave the profession with some dignity and self-respect. I would hate to see a situation whereby the process becomes so institutionalised and bureaucratic that a kindly ear and a helping hand cannot be given to people who have perhaps stayed a bit longer than they should have in the profession.

Another area that the Auckland District Law Society is very much involved in is continuing legal education. I see that is given some emphasis in this bill, and I am very pleased about that. But the fact remains there was no such concept in this country until the Auckland District Law Society invented it. In addition, the society has been involved in the establishment and funding, through its practitioners, of the Grey Lynn Neighbourhood Law Office, as well as other law centres around the Auckland region. From that germ, as such, grew all sorts of other law centres and community law centres throughout the country.

Other innovations from the Auckland District Law Society included standardising forms for agreements for sale and purchase, and debentures. That district law society has done other things, including all sorts of things that today in legal practice, and even often in accounting practice and real estate practice, are accepted as the norm. The Auckland District Law Society produces those things, as a close look at the forms will show. Plenty of things are done by district law societies that have never been done by the New Zealand Law Society, and I have a concern that centralisation of issues and the people in Wellington—away from the very people who use the services—will fragment the legal profession. I would be very sorry to see that happen, and at the select committee the National Party will be looking very closely at that.

I am concerned as well about the costs of the new structure, because a lot of the bills that are intended to modify existing structures on the basis that it will make the whole process cheaper and more accountable often have exactly the reverse effect. That is one of the concerns I have, particularly in relation to complaints. I will be very pleased to see a standardisation of transparency in complaints procedures, and I will be very pleased to see practitioners who practise in large firms treated in the same way as practitioners who practise in small firms. Certainly, it has been my experience, in my many years of connection with both the Auckland District Law Society and the New Zealand Law Society, that there is often a disparity of power, and therefore a disparity of treatment. It is something that I personally took a stance on, and I have to say that many of my colleagues felt that it was very important, as well.

The conveyancing issues, which, of course, dominate this bill—and certainly they have been in the Hon Phil Goff’s mind since 1997—are in fact a bit of a nonsense really, because conveyancing has been a very unprofitable side of legal practice for many years for many practitioners, certainly for those in the bigger firms and those in the higher-rent areas. So conveyancing has, in many ways, been pushed out into the suburban parts of Auckland and other large centres, well away from the higher-rent areas.

Conveyancing has not been a monopoly, as many practitioners and former practitioners here in the House will know. It has driven us mad to hear politicians with very little between their ears talking about conveyancing being a monopoly. How can it possibly be a monopoly when there are 7,000 lawyers in the country, almost all of whom, at one stage in their life, have practised in conveyancing? Not only that, when the scale fees were done away with back in the 1980s—I was practising at that time and remember the consternation about that—a tremendous amount of effort was put into competing on the basis of fees, none of which effort, I have to say, has ever led to a rise in standards. That is one of the issues, and I do not think that opening up the area to licensed conveyancers will necessarily raise those standards. I do not see that it is a terrible thing to bring in licensed conveyancers. I welcome the fact that we will now see a process whereby they, along with lawyers, are licensed and regulated, because, at the end of the day, if we are to have these professions and industries, we need to have a level playing field as much as possible.

I raise a concern at this stage in relation to accountants and tax advice. I am concerned that clauses 6 and 18 may render some of the work currently done by tax accountants, and even by tax practitioners in the Inland Revenue Department, under some sort of threat, because they are not necessarily going to be registered as lawyers or conveyancers. That is something that the select committee will need to look at. So in many ways we have concerns, but, at the same time, we will allow and support this bill going to the select committee. I will be keeping a very close eye on the results and will be interested to see what comes back to us.

MURRAY SMITH (United Future) : United Future will also support the first reading of this bill, but will not necessarily support it beyond that stage—that will be determined largely by the outcome of the select committee process. Unlike almost all the legislation now introduced, United Future has not had the opportunity to discuss with the Government the philosophy behind the bill, or to be involved in the development of the policy that is reflected in the bill. This is because the bill has been in train over many years.

I am aware, as a lawyer, that there has been much discussion within the profession, from the top to the bottom, about these reforms, and general acceptance of the need for reform to bring the Law Society in line with current business norms. However, the detail is yet to be analysed, and I look forward to hearing from submitters. I hope that not just the New Zealand Law Society but district law societies—as my colleague has encouraged—firms large, medium, and small, sole practitioners, barristers, Queen’s Counsel, and others will take the opportunity to make their views known so that we can look at all the various perspectives on this bill.

There are quite a number of issues involved in the bill, but there is time in this speech to address only a few of them. Obviously, the key one is the licensing of conveyancers, and, as a practitioner who did a great deal of conveyancing over my 26 years in practice, it is my opinion that lawyers have generally abrogated their exclusive right to conveyancing, and, in a sense, this bill is just a reflection of that. The abolition of the scale of charges in the late 1970s led to competitive pricing, which meant that solicitors were often doing conveyancing for less than the cost to their practices—a cost that they needed to recover. That led to a subordination of conveyancing to legal executives, who, often, had only a few years of polytech training to prepare them. In terms of the basic paperwork of conveyancing—the preparation of documents for the transfer or discharge of a mortgage—that is all very straightforward work that legal executives could certainly cope with, and with the information technology developments that have occurred at Land Information New Zealand over recent years, the paperwork has become more and more simplified.

The problem arises, in my view, when one comes to the complexities of conveyancing; when there are Resource Management Act issues, when there are disputes over contractual terms, and when contracts relate to unbuilt or partially built houses—those are just a few examples. It is not just a question of dealing with those issues when they arise, and I hope that the conveyancers who do this work will know their limitations and will know when they need to pass issues to a lawyer; it is seeing problems coming that is the lawyer’s real skill. It is providing clauses in agreements to protect against potential problems; it is taking early steps to ensure that potential problems do not arise; it is taking early steps to nip problems in the bud so that they do not become significant. Those are things that will be missed in the downplaying of conveyancing to conveyancers rather than lawyers. I fear that, effectively, the public will not get the same level of service in those areas.

However, as I said, many firms and, indeed, the profession generally have abrogated that responsibility. With legal executives doing most of the work, those issues are not being picked up, either. I refer to peripheral issues such as whether a client should register his or her property as a joint family home. That seems to be left to the side, and I think we are in real danger of losing the protection of joint family homes generally, simply because that provision is not used when it should be. The setting up of trusts and estate planning are other issues that arise at the time of conveyancing that a conveyancer will not have the expertise to address or recognise. There are property partnership issues, and things of that nature. That is really where we are going to suffer a loss, I think, in terms of this proposal.

The second major impact of the bill is in enabling lawyers to sell real estate. I guess this is an attempt to bring competition into the real estate industry, but I have real questions about it. Again, as a solicitor with extensive experience I established good working relationships with real estate agencies, but learnt that it was very dangerous to get involved in mutual referral arrangements, because of the conflict of interest that very easily arises when one does. I remember one occasion when a real estate agent rang and said: “I’ve got a chap here who wants to sign an agreement for a house, but he wants a lawyer to check it over before he signs it. Can you see him now?”. I said that, yes, I was happy to, and when I questioned him about it, it seemed that the house was probably not the house best suited to him. I had some misgivings, and he had some misgivings, so I suggested he sleep on it overnight before rushing into a decision. The next day he advised me he had changed his mind, and when I told the real estate agent about it he was absolutely ropeable because he had sent me his client and now was going to lose his commission.

Those sorts of difficulties arise where marketing business, such as the sale of houses, conflicts with professional business that requires the giving of independent advice. Selling property, or any product, requires a different sort of approach from that of the provision of independent advice. I know valuers, who were used to giving independent advice, who became real estate agents and tried to sell properties, only to discover that they simply could not tolerate the situation that they could tell the purchaser only the good things about the house, and not the bad things, and they pulled out from being real estate agents as a result. That just demonstrates the two different approaches.

Lawyers may simply, if they have this power, put clients’ houses on a website in order to market them, and be fairly non-active when it comes to the actual marketing. But the danger is that if they get into marketing, they will end up selling existing homes for their vendor clients to clients who are purchasers, and therefore be in a situation where one firm is acting for both vendor and purchasers. However, lawyers have looked at this whole thing quite closely over a number of years, and whilst, initially, there were some shopfront stores that explored and flirted with the idea of selling real estate, and looked at ways of getting round the Real Estate Agents Act, I notice that in the last few years there has been a backing off from that, and perhaps this part of the bill will also have little impact.

However, the danger that is there, in terms of conveyancers, is similar to the danger in terms of conflict, and the close affiliation that conveyancers may well have with real estate agents is likely to cause problems. For example, mortgage brokers are often aligning themselves with real estate agents, and even working out of their premises, and I know from my experience that conflicts have arisen that have caused a disservice to the public. If a mortgage broker in those circumstances does not get the finance, the real estate agent loses his or her commission, so there is a lot of pressure on such mortgage brokers to deliver. Therefore, they lose a degree of the objectivity and independence that are necessary for their clients.

There also can be breaches of confidentiality. Mortgage brokers are privy to personal information that real estate agents are not. I have known examples where that information has been passed on, to the client’s detriment. Conveyancers will be expected by real estate agents to get the transactions through so that the commission is received, and I have some concerns about that. If the bill goes through, I hope that the Society of Conveyancers is able to regulate to ensure that that danger is protected against. Independence, lack of conflict of interest, and confidentiality are ingrained in the law profession. Legal executives within firms are taught the importance of those. That is not so with conveyancers, and whether the same high ethical standards will be able to be expected is yet to be seen.

As I have said, there are a number of issues. The abolition of QCs is another one that is quite contentious. There is the incorporation of law practices. In relation to cost revision, I have real questions as to whether it is still appropriate for law societies to be running cost revisions, but I do not have time to deal with that now. There are many issues. The select committee process will enable those to be worked through. They are matters that the Law Society and lawyers generally will have to consider carefully. They will have to make sure they have their say, so that the select committee will be able to look at all sides of the issue and all the potential consequences that come out of the legislation. I look forward to reading and hearing those submissions, and being part of that process.

DAIL JONES (NZ First) : New Zealand First will support this bill going to a select committee, but will be strongly opposing the creation of the new rank of Senior Counsel. It is New Zealand First policy that the office of Queen’s Counsel should be retained, and on New Zealand First coming into Government after the next election we will make sure that the office of Queen’s Counsel is reinstated in the New Zealand way of life and in the New Zealand legal way of life. Of course, in so far as this legislation is concerned, it may be that if New Zealand First can get the support of other parties in this House—and it seems that there might be considerable support—we might be able to prevent the office of Queen’s Counsel from being removed from the bill. I will be interested to hear the National Party’s views on that. United Future, which has close links with the Government, has said that it is a contentious issue. The Greens being almost a coalition partner, I would be interested to hear their view on Queen’s Counsel, to see whether they want it retained, and I would be interested to hear the ACT view, as well.

New Zealand First has said, for example, on the Supreme Court Bill, that it supports excellence in New Zealand, excellence in the law, and excellence in having a Privy Council still hearing our cases. For much the same reason, we support the continuation of the office of Queen’s Counsel. I started my legal career in 1961 as a clerk in the then Magistrate’s Court.

Simon Power: That can’t be right. The member looks far too young.

DAIL JONES: I was 16 at the time. That tells members how old I am. I have had more than 40 years experience in the law, for which I am eternally grateful. I have never aspired to be a Queen’s Counsel. It is a bit too lofty for me, perhaps a bit too academic for me, and perhaps a bit beyond my capabilities. However, just because I do not want to be a Queen’s Counsel, or am not capable of being a Queen’s Counsel, is not a reason to remove the office of Queen’s Counsel.

I suspect that Labour’s view on this bill is that it has a dumbing-down approach, as it has to so many areas in New Zealand. It is dumbing down the education system and our superior court system, and it wants to dumb down the way in which the legal system operates, as well. Not many people become a Queen’s Counsel or even want to become a Queen’s Counsel. It is a title that is earned. It is not a title that is given to one as a matter of course. It is something that is earned. We could have the new title of Senior Counsel in addition to that of Queen’s Counsel, but the title of Senior Counsel is very general. It is very broad-based, and it does not reflect the superior intelligence, superior work, and ambitious nature, perhaps, of those who want to leave their mark on the law at the highest possible level.

New Zealand First will work hard to ensure that, when this bill comes back from the select committee, of which I am a member, the office of Queen’s Counsel remains, and any regulations to replace the office of Queen’s Counsel are not passed; or, if we are to have Senior Counsel, that it is in addition to Queen’s Counsel, and I can see no problem with that situation. The Government has tried to create a South Pacific legal backwater with the Supreme Court Bill, and now, once again, it is trying to create a South Pacific backwater in the quality of the representation to which people will be entitled in our courts.

Of course, people are strange; they want to pay for Queen’s Counsel. Time and time again, big firms, small firms, and ordinary citizens seem to want to have someone at the top, someone with the rank of Queen’s Counsel, representing them. As members may know, in view of the trans-Tasman legal links Australian Queen’s Counsel can practise in New Zealand as Queen’s Counsel. Big banks, big commercial concerns, and people who can afford it will employ Australian Queen’s Counsel to represent them in the New Zealand courts. That is inevitable. It is just a fact of human nature. People like to have a big name representing them. If they have the money, they want to big note in the pub, or the club, or wherever, and say that they have X Queen’s Counsel representing them. It sounds so much better than X Senior Counsel, whatever that means. We will find more and more Australian Queen’s Counsel working in the New Zealand courts, taking over the role that New Zealand Queen’s Counsel used to have, and thereby depriving New Zealand lawyers of work. This Labour Government takes the view that it wants New Zealanders to have more access to the law. The way in which it is running the Supreme Court Bill and this bill will result in less work being available to New Zealanders, and lawyers from other jurisdictions coming into New Zealand, due to the reciprocal way in which we practise these days. I make that strong point. New Zealand First opposes that aspect of the bill.

It is good to see that law firms can now be incorporated. That is long overdue.

Stephen Franks: Why?

DAIL JONES: I support the concept of an incorporated law firm. It is an option, if one wants to have it. I say to those people who will be making submissions on the bill that I would be interested to know their views on multidisciplinary firms as well. The bill seems to have left out that concept. I would be interested in submissions being put to the Justice and Electoral Committee on the concept of multidisciplinary firms. I went to a seminar on this in about 1986. It has been around for a long time; it is not a new concept. I think the people out there who want to make submissions should not be disbarred or prevented from making submissions on matters that are not in the bill at the moment. If they do have good ideas on multidisciplinary practices, those views should be expressed to the select committee.

Previous members have made comments about conveyancing and suchlike. Most of my work was involved in conveyancing. I did a fair amount of criminal law and civil law, but generally it was conveyancing.

I see no problem with any degree of competition from licensed conveyancers and suchlike. If they can do the work for the type of rate for which a lawyer does that work today, good on them. There is competition between lawyers already, and I have the feeling—I have had it since early last year—that those licensed conveyancers who were out there in practice last year were feeling the pinch, and that life was not as simple as they had thought it might be. Those who had set up in the inner city of Auckland were finding it rather difficult, compared with those lawyers who practise out in the suburbs because of the better availability of parking and the lower rents, as the National member Judith Collins was saying.

I have to express a concern I have, having been a lawyer for many years. I am concerned that there is now too great reliance on legal aid, and that the more lawyers rely on legal aid, the more they come within the possible control of a Government. If the Government is paying lawyers legal aid to the extent of tens of millions—if not hundreds of millions—of dollars, it can start to call the tune on the legal profession. I am slightly concerned that we have allowed ourselves, as a legal profession, to become tied to the financial strings of the Government in the legal aid area. Although many lawyers try, time and time again, to extend the field of legal aid, one sometimes gets the impression that, as the Government tries to cut back here and cut back there, at the same time it is trying to cut back on the standards that apply in areas where legal aid is being obtained and granted. I feel, looking back on the whole situation, that there used to be greater independence; lawyers in general practice were more independent, more likely to take a Government on, and more likely to disagree with a Government than they are today, when they are so dependent on legal aid. So many law firms today would go out of business if legal aid were not paid to them. That, on its own, must give us concern about the independence of the legal profession.

I say that also of the New Zealand Law Society. The Law Society knows that many hundreds of lawyers out there are dependent on legal aid. If the Government says to them that it might be cutting back on legal aid if such-and-such does not happen, the Law Society has to try to balance the needs of the profession as a whole with the society’s own requirement to stand up for all New Zealanders, big or small. That is the ultimate role of a lawyer. If someone goes to a lawyer and has a good case, the lawyer has a responsibility to present that case regardless of who might be on the other side, and regardless of whom the lawyer might be taking on. I trust that the Lawyers and Conveyancers Bill, which will be repealing a bill that, in 1982-83, went through a select committee of which I was the chairman, will have that as its main standard.

STEPHEN FRANKS (ACT NZ) : I look forward to sitting on a Justice and Electoral Committee that has as a member a former committee chairman, Dail Jones, whose institutional memory goes back as far as that. That will be very interesting.

In particular, it will be interesting because the Lawyers and Conveyancers Bill is an absolutely monstrous bill. It is an extraordinarily large piece of drafting. I am not sure whether it is a monstrous indulgence. In other words, the legal profession has been allowed by Ministers, and departments that do not know what they are doing to write, essentially, the prescription it wanted. I suspect that might be the case. I cannot tell whether, instead, it is a monstrous imposition. It is possible that the officials wore down the representatives of the profession and, eventually, succeeded in prescribing in minute detail the structure of the profession in a way that is almost unbelievable. Or is it a monstrous own goal that they, in fact, have finally succeeded in persuading the Minister of Justice, who has been totally engrossed in foreign affairs? Although he was the author of a bill in 1997, I think, that was going to open up what he called the conveyancing monopoly, he lost all interest in it as soon as he became the Minister and had the power to do what he had been threatening to do.

This bill seems to have been handed to the Hon Lianne Dalziel for her to try to finish it. From the look of it, she has probably decided that being captured by Wellington and by the officials is a better fate—

Simon Power: She’s got other things on her mind.

STEPHEN FRANKS: She might have other things on her mind. Lianne Dalziel was asked to introduce the first reading of a bill that is of an unbelievable size, particularly when it is compared with, say, the re-regulation that the accountants managed to achieve. I see nothing in this bill to explain why we do not have a simple empowering statute that used the precedent that reformed the New Zealand Society of Accountants, given that the importance of the functions carried out by the professions are probably comparable. Given the extent to which the community relies on the integrity of audit and the standard of accounting, in a country that has 30,000 accountants, the importance we place on their integrity should be at least the same as the importance we place on the integrity of lawyers and the legal profession, which has only 7,000 or 8,000 practising lawyers. Yet we have a bill that goes into micro-management and micro-detail on all sorts of aspects that should surely, in a genuinely self-governing profession, have been left to evolve. This is not self-governing, in any respect.

This measure is the muddy outcome of the loss of confidence that the profession experienced 10 or more years ago, when the Law Society engaged a firm of economists to take a bottom-up look at the society and at the profession. When the economists’ study came back, it terrified the board of the society. The board sat on it for months. A bowdlerised, or censored, version finally emerged. From recollection, the board had taken out chapters 3 to 7, or something like that. The resulting rather puzzling economists’ study of the profession and of optimum methods of regulating the profession emerged and caused bewilderment all over the country. It seemed to the conveyancers that it was a subtle plot to get rid of the remaining restrictions on entry to that profession. It seemed to the large firms that it was an excuse for not ending the subsidies that they had been providing to the smaller firms for a very long time, through their fees, which supported activities mainly availed of by the smaller firms. It did nothing, eventually, for the fidelity fund—a foolish piece of work if ever there was one—or the cost review jurisdiction, an equally foolish piece work, and it did nothing on multidisciplinary practices or anything else that had been seen as a topical issue. So it got buried. Then we had the long obfuscation and repeated new arrival dates for this legislation from the Minister of Justice, the Hon Phil Goff. Finally, this bill emerged.

What does it do? It nationalises the profession. The mark of a genuinely self-governing profession is its control over its brand, over its quality standards, and over the members of that profession. Although this legislation keeps the form of self-regulation, it completely subordinates the profession to New Zealand politics. When the Minister of Justice has final approval of the rule book of the Law Society, which is what this legislation does, the Minister of Justice is politically responsible and politically liable every time a lawyer defalcates. Where will the buck stop, every time there is a failure of practice by a lawyer? Obviously, it will stop with the Minister. Why did he not make rules that would have stopped it, prevented it, or fixed it?

Once a Minister is faced with that kind of liability he or she cannot afford to allow any rule that leaves an element of risk, but law is a business as well as a profession. Rules have to be written so as to allow for a certain level of experimentation, flexibility, and judgment, and they have to recognise that people will fail, there will be dishonesty, and it will sometimes have adverse consequences. Of course, the Minister has the best of intentions, at the moment, to ensure that the standard is not set so high that it becomes a barrier to entry, or becomes an undue cost, which is spread across all clients. But the Minister will have almost no choice. When the Minister has to approve the rule book, and when every rule that looks as though it has failed becomes a matter of political liability, the Minister has to dictate.

That is what has happened in other areas. It is what has happened in the securities industry, and to the self-regulatory organisations in Britain after the “bold new dawn” in 1987 in Britain’s finance industry. The British finance sector was the envy of the world, and now it is the creature of Ministers, because they cannot afford not to dictate.

What is the Minister inheriting here? A profession that is truly ludicrous in its own eyes. When the profession has not managed to bring Russell McVeagh before its own disciplinary processes in over a decade, since the bloodstock partnership scandal erupted, when it has spent, apparently, more than half a million dollars, and is still arguing about what evidence will be provided, we have an absolute spectacle. It is a profession that purports to be self-governing and self-disciplining, but it cannot even manage to get one of its largest members before its disciplinary processes for a substantive hearing. That is what the law has come to.

I think that the Minister should not be rescuing the profession from its own shame in this position. The Minister will now have to make the rules, and will be held accountable next time there is a Russell McVeagh - type scandal. He will not be able to do any better than the Law Society has done, because it has not analysed yet what it is that is going wrong. We will now see that the conduct, the standing, and the branding of the profession will be a matter for politicians to resolve, however fondly the Law Society thinks it has managed to rescue the profession from that class.

We also have the provisions that have attracted a little bit of media attention, like the fact that multidisciplinary practices are not allowed. The offence, actually, is to share income with non-lawyers. I wonder how that works with a turnover lease, for example, which is pretty common—for shops, anyway. Is one sharing income when the lease rental is determined by turnover? What about all the other Islamic banking practices that manage to disguise interest as profit, or profit as interest? There are plenty of ways of getting round something as silly as a rule that says income cannot be shared with non-lawyers. We have the prospect of compulsory indemnity insurance, which is another way, basically, of supporting those who otherwise ought to be pushed out of the market. There is the fidelity fund, which is the sole practitioner benefit from the large firms.

There is the cost revision regime. In a business as competitive as law, what possible justification is there for the very extensive provisions in this bill that preserve and extend cost revision and what is called the client care regime? I wonder whether the other lawyer members have noticed that there is now to be a set of rules governing client care. Is that not what business competition is about? Is that not what all those seminars are about? I tell members that there is an awful lot to do on this bill.

MARK PECK (NZ Labour—Invercargill) : I support this bill.

NANDOR TANCZOS (Green) : I do not intend to make a long speech this evening on this bill. I want to indicate that the Green Party supports this bill at this first reading and in going to the Justice and Electoral Committee. The various provisions in this bill have been well canvassed by previous members, so I will not go into great detail about them. I understand this to be a large bill, as was pointed out by Mr Franks. It is a highly technical bill—

Stephen Franks: Just weigh it.

NANDOR TANCZOS: Ha, ha! I understand that there has been significant consultation on the bill, and that it has had broad support from the profession. I look forward to going over it in detail at the select committee—

Stephen Franks: I don’t believe you.

NANDOR TANCZOS: Ha, ha—because I have such erudite colleagues to assist the committee in that regard. I am not a lawyer, so I am not able to speak with the level of experience and erudition of some of the members who have spoken this evening, but I hope that I can bring something to the committee as a non-lawyer. I think that that perspective is useful.

In general, I understand this bill to be a substantial review of the law relating to legal practice, including a restructuring of the New Zealand Law Society, the establishment of the New Zealand Society of Conveyancers, which is new, and the ending of the statutory status of district law societies. The bill makes provision for how practice rules will be set. It opens up the real estate industry, by enabling lawyers and conveyancing practitioners to sell real estate. It establishes a new complaints procedure, and allows the formation of the incorporated societies that Stephen Franks referred to earlier.

The bill continues to provide for the special fund used for the funding of community law centres, and I am pleased to see that continue. The underfunding of community law centres has been of great concern to the Green Party for some time. We have attempted to address that in previous years by means of Budget initiatives negotiated with the Government, to provide some extra funding for community law centres. We believe that those organisations provide a crucial role, in terms of making the law accessible to some of the most underprivileged members of society. It is very much an access-to-justice issue, and at the select committee I have queried a number of times why banks have always kept 50 percent of the interest generated by that fund as banking fees. I have always thought that that was a bit extortionate. I am pleased to see that the percentage kept as banking fees has been reduced by 5 percent to 45 percent, so at least there is a minor gain there.

The other thing I would like to touch on before I finish is the provision to establish a new rank of Senior Counsel, to replace that of Queen’s Counsel. Dail Jones queried the Green Party’s position on that provision, and it will be no surprise to the members of this House to learn that the Green Party is totally in support of it. We believe that the title of Queen’s Counsel is a colonial vestige, and that it is high time it went. We find it quite bizarre that Mr Jones should think that changing the name of those senior practitioners from Queen’s Counsel to Senior Counsel would somehow make them less intelligent or less able. That seems quite a bizarre notion.

Simon Power: It’s obvious.

NANDOR TANCZOS: Well, he said that we would see a reduction of the quality of representation that people are entitled to. That is quite bizarre, when we are talking, primarily, about a change of title in terms of that provision.

Dail Jones also made the point that people will go to Australia to get a QC to represent them in New Zealand, so that they can go and boast about it to their friends at the pub. I would suggest to Mr Jones that people do not pay the significant fees of a QC in order to boast about it at the pub; they pay the money because they want to get the best representation that they can. Whether such a person is called a QC or a Senior Counsel, he or she will still be the best representation that is available, so we support that provision wholeheartedly.

We support the bill going to the select committee, and I look forward to working with my colleagues to see whether it needs amending.

Hon JUDITH TIZARD (Minister of Consumer Affairs) : I rise to support this bill. I commend it to the House.

SIMON POWER (NZ National—Rangitikei) : It is not often that I rise in the House to agree with Nandor Tanczos. In fact, I think that in the time we have been in this House together, which is nearly 4 years, this is probably the first time that I have done so. It could be the last time, too. But I agree with him that it is odd to say that having a QC is a good thing to brag about in the pub. Perhaps Mr Jones could take a call from Labour, fill 10 minutes, and explain that position to the House a bit further.

I come from, I guess, a slightly unique position, in the sense that—

Hon Judith Tizard: You can’t be “slightly unique”. It’s either unique or it’s not.

SIMON POWER: Thanks. I appreciate that outburst from the Associate Minister for Arts, Culture and Heritage. It was a more substantial contribution than she has made towards the reading of this bill, so I thank her very much for that. I practised law for 5½ years before coming into the House as a member, and I think that a number of the things that are proposed in this bill make reasonable sense. As my colleague Judith Collins has said, members of the National Party will be supporting this bill’s referral to the select committee for what I consider to be an initial look at how these provisions are to be enacted, and at how those within the profession view them and the effect they will have on their ability to deliver quality legal services to their clients.

However, National does have some grave reservations about this bill, particularly with regard to the issues surrounding the abolition of the rank of Queen’s Counsel. Unlike my colleagues who have spoken previously, I do not necessarily hold a view on the weight associated with that title in terms of colonial vestiges and hangovers, as Mr Tanczos suggested, nor do I agree with Mr Jones’ view that it is a title that one can brag about in the House. However, I am extremely concerned about that particular title being removed from the profession—not for the reasons that my colleagues on the Opposition side of the House have outlined, but for this reason. I say to Mr Tanczos, who will be sitting on the Justice and Electoral Committee, that the role of a Queen’s Counsel as an independent member at the bar is to hold an office that allows him or her to challenge authority, Governments, and those who conform to the rules of our society, in a way that gives him or her a certain degree of independence from such conformity.

I am worried that the way in which it is proposed that the rank of Senior Counsel will replace that of Queen’s Counsel could easily see senior members of legal firms that are involved primarily in the area of Government work end up with the title “Senior Counsel” next to their name. I direct my comments to Mr Tanczos when I say that what worries me the most about that is that it will remove the independence of a senior member of the bar to challenge the police and the Government, and to challenge any other arm of what I guess could be called the last conservative vestiges of the State, through that appropriate avenue for the taking of such action.

I am worried that the role of Senior Counsel will be too readily available to those members of the profession who practise in large law firms and who undertake substantial commercial work for the Government. They act on behalf of the Government in those roles. The idea of a Queen’s Counsel is to lift an individual barrister above the mire, so that he or she is able to take on the unpopular cases that other barristers and solicitors turn down, and is able to hold without fear the view of a client whom all others in society may view as having committed wrongs—be they civil or criminal—well ahead of the time that a judge or jury has to make those decisions.

I say to the Green Party that it should think very carefully before it votes to remove that last vestige of barristers’ independence at that level, and to replace it with a label that could easily be assigned to any senior lawyer in any firm. Many of the large firms in New Zealand do large amounts of commercial work for State-owned enterprises, Crown entities, and other Government departments, and in my view that is where the real concern lies in relation to the removal of the rank of Queen’s Counsel.

This bill is intended to maintain public confidence in the provision of legal services, and to provide protection for consumers. Who would have thought that Mr Dempster would cause all this? Who would have thought, when Mr Dempster decided to try to register as a conveyancing agent, that it would lead to the monster bill that is about to go before the Justice and Electoral Committee? I am sure he did not think for one moment that this would be Parliament’s answer to his quandary with regard to carrying out conveyancing as a person who has not been admitted to the Bar as a barrister and solicitor of the High Court.

I am not particularly concerned about some of the issues that Mr Smith from the United Future party has raised in respect of ethics, integrity, and the way that lawyers or conveyancers carry out their duties. There is a combination here of clients who are not silly working out who does, and who does not do, a good job. People who need surgery do not go to someone who might like to try to be a surgeon; they generally work out the best place to go to for an operation, and it is the same when seeking legal services. I am convinced that the practice of law in New Zealand has reached a level of maturity where self-regulation and competition in that paradigm will make the practise of law perhaps a little more exciting to be in than it has been in previous years. The right of lawyers and conveyancers to sell real estate is an interesting concept. As Mr Smith has said, it has been tried in various forms by various solicitors around New Zealand over time. Frankly, I have never met a lawyer who has been a particularly good salesperson, and I think one will probably find a situation where, again, the separation between those who sell property and those who provide legal services will pretty much find its natural equilibrium after a period of time.

I return to the point I made initially, which is the grave concern that the National Party has over the issue surrounding the removal of silks from our system. What concerns me the most is that the level of independence available to those who wish to challenge the State, the police, and those in authority who make the laws will be seriously undermined, by replacing the high level of independence that Queen’s Counsel enjoy in New Zealand with a far more politically muddied appointment to the rank of Senior Counsel. During the select committee process the National Party will be monitoring that very carefully indeed, and I place on record our reservations about that issue. As I said in the first instance, we will be supporting this bill going to the select committee, notwithstanding the reservations that I have outlined.

DAVID BENSON-POPE (NZ Labour—Dunedin South) : I am delighted to rise in support of this bill.

RICHARD WORTH (NZ National—Epsom) : Was that not a helpful contribution that we just heard from the senior Government whip? He gave no reasons for the views he offered, yet he gave a clear statement of support for legislation for which we have waited a substantial period of time. It is important legislation, because there are some key issues of principle that will clearly challenge the intellect of the Justice and Electoral Committee.

Members before me have spoken about key aspects of the bill, and I will not cover that ground again. I want to focus on a specific area touching client care, and also on an issue that relates to the professional indemnity obligations that sit on lawyers. Before I do that, I will just highlight the main changes in the bill. They are quite clearly to end the exclusive right of lawyers to provide conveyancing services, and to restructure the New Zealand Law Society and abolish district law societies.

There are a number of district law societies throughout the country of varying effectiveness and efficiency, and some of those law societies with small numbers and in quite remote areas clearly find it difficult to discharge their obligations under the Law Practitioners Act. Allied to that is the plan to establish a new complaints and discipline regime. In a small district law society area, where there are, say, 10 members, and where members are constantly sitting in judgment on their peers, it is difficult to run an effective system of sanctions that will provide quality legal peer review in cases where errors occur.

There is a plan to enable lawyers to incorporate their practices.

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

RICHARD WORTH: My recollection is that before the break I was talking in a general way about what the main changes to the bill were, and I would just like to conclude by noting that a significant provision is to continue a fidelity fund. It is an arguable proposition when a number of professions and trades—if that is an appropriate distinction to draw—have done away with such funds, and I question the need for lawyers to continue with a fidelity fund. But that is certainly the way this legislation is structured.

In the remaining time I would just like to talk about two aspects of the bill that are not given great flesh in the introductory state in which it is currently drafted. They deal with the ability of the Law Society to make rules, and it is very much part of the plan that the New Zealand Law Society is to be the dominant animal in all of these events, and that the district law societies will fade into desuetude. What I would like to talk about are rules that the Law Society may make under these enabling provisions in respect of client care. I hope that something perhaps not far short of a clients charter of rights may emerge from the rules that the Law Society is given power to make in terms of this legislation. I would like to touch on what lawyers can legitimately be asked to do, and what can be required of them from the client perspective, and I would put it first under the heading of “engagement”.

The first proposition is that at the commencement of an engagement the lawyer must agree with the client the objective and intended outcome of the engagement—in other words, the service to be provided. Second, there needs to be a discussion between the lawyer and the client as to the events that are likely to occur, the processes to be gone through, the actions to be taken, and the best estimate that the lawyer can give as to the likely outcome of that engagement. That was a truly difficult proposition in the good old days of a judicially active Court of Appeal, where the best one could say might be: “Well, it depends what the Court of Appeal thinks is fair on the particular day.”

The third proposition I would advance in the context of engagement is that the lawyer defines for the client at the commencement of the engagement the basis of the charging and the charges that will be applied during the course of that process. Of course, the lawyer will inform the client of the client’s entitlement to that cost estimate. I think it is also very necessary to provide an estimate of the time required to carry out the engagement, and the probable time schedule for the main components within that engagement.

The second broad heading would be “performance”. That is the obligation to respond in a timely manner to client requests for information, and also to proactively keep the client informed when the main components of the transaction are achieved. Then, of course, there are the obligations of due care and skill, which are now put in the context of the provision of professional services by a provider to a consumer.

Finally, in the context of the relationship, consideration needs to be given to the aspect of complaints. The lawyer needs to document processes that will enable the validity of a complaint to be determined. That documentation should be made available to the client on request, and in the event of the client expressing a complaint in respect of which judgment is to be made as to the lawyer’s performance.

Those are aspects relating to client service. I guess if I have a reservation about the power that exists in the legislation to make rules, it is in respect of compulsory professional indemnity insurance. Lord Levene, the chairman of Lloyd’s, has just visited New Zealand, and he made some comments about professional indemnity and the obligations that sit on professionals to provide professional indemnity cover. In looking at the materials that are currently in the bill, I see that it is proposed that there be a fair degree of specificity as to the terms of any policy of professional indemnity insurance that should be arranged. I simply note that with the rise in premium costs in Lloyd’s and other markets, competent lawyers might find themselves rated out of the market.

I suggest that one of the key aspects in running a professional legal services firm, or any professional firm, is the skill of the owners in managing the risk of the business. There are choices to be made in managing risk, which include the transfer of risk. One of the core elements in transferring risk is the application of insurance. For the law firm and the professional services firm, judgments have to be made as to how much cover should be secured, what the upper indemnity level should be, and what should be deductible, or the amount that the law firm, in the first instance, meets—what is more popularly known as the excess. In respect of the Law Society, and particularly with rules to be made with the concurrence of the Minister of Justice, a non-worldly view might be taken to the setting of such terms, with the outcome that either the cost of cover will become prohibitive or, alternatively, lawyers will seek to take short cuts in the context of that aspect of risk management known as risk transfer.

Sure, there are other issues that the select committee will have to consider. One of those issues—as a member of the committee, I am conscious that there are other members present in the House who will also be on that committee—relates to the issue of reservation of work. What work is it appropriate for lawyers to do on an exclusive basis? What work is appropriately no longer the domain of lawyers? We all know the story that just as there are good doctors and bad doctors, so there are good lawyers and bad lawyers.

Hon PAUL SWAIN (Minister of Transport), on behalf of the Minister of Justice: I move, That the Lawyers and Conveyancers Bill be referred to the Justice and Electoral Committee, referred to the Justice and Electoral Committee.

RICHARD WORTH (NZ National—Epsom) : I raise a point of order, Mr Speaker. I rise on a question of clarification. That vote, of course, has now been taken, but I would be grateful to learn from you whether what has happened is an unusual occurrence, whereby for non-urgent legislation the select committee may sit during a period that the House is sitting. I am saddened to see that United Future and one other party joined that vote.

The ASSISTANT SPEAKER (H V Ross Robertson): It is a debatable point. The reality is that it does actually occur.

Hon PAUL SWAIN (Minister of Transport) : I move, That the Civil Aviation Amendment Bill be now read a first time. At the appropriate time I will move that the bill be referred to the Transport and Industrial Relations Committee, that the committee finally report on the bill by 13 November 2003, and that the committee have the authority to meet at any time while the House is sitting, except during questions for oral answer and during any evening on a day in which there has been a sitting of the House, and to meet on Friday in a week in which there has been a sitting of the House, despite Standing Orders 193 and 196(1)(b) and (c).

The bill proposes that amendments be made to the provisions of the Civil Aviation Act without altering the basic policy that underpins the Act. The bill also provides a number of changes to support the Government’s objective of assisting economic development, safety, and personal security. The provisions will remove regulatory barriers for Australia and New Zealand airlines, taking up opportunities to operate within and between each country. It will provide improvements in aviation safety and security and it will ensure aviation safety law is clear, effective, and relevant.

A memorandum of understanding on open skies was signed on 20 November 2000 by the New Zealand and Australian Ministers of Transport. This reaffirmed the commitment of New Zealand and Australia to adopt mutual recognition of aviation-related safety certification by December 2003. Part 2 makes the legislative changes required to implement this Government-to-Government commitment. Similar legislation was introduced in the Australian Parliament on 25 June 2003. The mutual recognition regime proposed in this legislation will improve the ability of New Zealand airlines to enter the Australian market by enabling eligible air operators certified in New Zealand to operate domestic services in Australia on the sole basis of New Zealand certification. Complementary measures in Australia will enable Australian airlines operating in New Zealand to operate in New Zealand on a similar basis.

At present, airlines wishing to operate domestic services in both countries must obtain and hold an air operator certificate issued by each country. In New Zealand the issue of an air operator certificate requires, among other things, that the airline has a head office and operational base, as well as a chief executive and other relevant personnel based in the country issuing the air operator certificate. The mutual recognition amendment will remove the need for duplicate certification, and therefore many of the costs associated with obtaining and maintaining separate certification in Australia and New Zealand. Upon mutual recognition, arrangements mean the certification is issued in one country on the basis of certification issued in the other country. However, Australia and New Zealand are breaking new ground by implementing a mutual recognition regime whereby each country will simply accept the safety certification issued by the other as authorisation for operations in both countries. Individual differences in safety standards can be accommodated, because each country accepts that the other has a safety regulatory regime that delivers an equivalent level of public safety to its own.

A feature of the mutual recognition arrangements is that the safety oversight of a New Zealand airline operating in Australia will still be undertaken by the New Zealand Civil Aviation Authority, and vice versa. This already applies in respect of New Zealand international airlines operating in other parts of the world, but is unique in terms of domestic operations. Under mutual recognition, any safety concerns that might be held by one authority about the other country’s airline will be resolved through direct communication between the Civil Aviation Authority and the Australian Civil Aviation Safety Authority. However, in the unlikely event of an unacceptable departure from safety standards requiring urgent action the host authority will be able to issue a temporary stop notice. This means the visiting operator will cease operations and the home authority must deal with the solution or the situation under the home regulatory system.

In recent years there have been a number of high-profile incidents of unruly passenger behaviour on board aircraft, ranging from those involving offensive language and behaviour to those raising serious safety concerns, such as tampering with smoke detectors. Obviously, such incidents can be distressing and frightening for those on board. If an unruly passenger incident occurs in New Zealand the present law is not always adequate to ensure firm and effective enforcement action, because the particular incident may not fall within the description of an existing offence. In addition, if an incident of unruly behaviour occurs outside New Zealand it cannot be addressed under current legislation, at all, unless the behaviour involves a serious criminal offence. In such cases the consent of the Attorney-General, and, if a foreign aircraft is involved, of the relevant foreign Government, is required before proceedings can be brought. However, most unruly passenger incidents do not involve serious criminal offences. Consequently, New Zealand cannot usually take enforcement action if they occur beyond its borders. This is inconsistent with emerging international practice and the expectations of the International Civil Aviation Organisation. Accordingly, this bill proposes a coherent regime of offences and penalties that will have an extraterritorial effect, thus enabling New Zealand to prosecute passengers committing offences on aircraft flying outside New Zealand where New Zealand is the next port of call after the occurrence takes place. To ensure the new regime of offences and penalties is workable the bill contains an accelerated infringement offence procedure to ensure that, as much as possible, visitors on short-term stay in New Zealand do not escape the enforcement of the law.

I would like to take the opportunity to acknowledge the previous Minister of Transport, the Hon Mark Gosche, for his work in developing this initiative. The bill also makes a number of minor amendments to civil aviation legislation to further enhance civil aviation safety and personal security. Firstly, the bill amends the functions and duties of the Aviation Security Service to enable it to provide security support services outside of aviation at the request of the Commissioner of Police. This may include screening of people and baggage or the use of the Aviation Security Service, such as the explosive detector dog capability. The Aviation Security Service would provide an off-airport service to the police only if it did not compromise its core airport services.

The bill also proposes amending the maximum fines for various offences against the Act to ensure the Act is an effective deterrent. The fines need to be amended to take account of inflation since 1990 and to bring them into line with the penalties of similar offences created subsequently. The final package of changes proposed responds to a need to update, consolidate, and ensure consistency across different pieces of legislation.

Two main sets of provisions relate to domestic air carrier liability: the carrying over of the existing regime in respect of damages for passenger delay and the repeal of personal injury regime. Both are currently contained in the outdated Carriage by Air Act. It is proposed that the provisions imposing liability for delay in domestic flights be carried over to the Civil Aviation Act. These provide that unless delay is caused by factors beyond the airline’s control, such as weather conditions, or is due to reasons of safety, airlines are liable for damages to the value of ten times the price of the passenger’s tickets or the actual cost of his or her delay, whichever is the lesser.

The bill also proposes to repeal the provisions of the Carriage by Air Act, imposing liability on airlines for aviation-related personal injury. These apply only to non-physical mental injury, such as may be caused by witnessing the death of another passenger. The changes will enable common law claims to be brought against airlines for mental injury. This would mean that the burden of proving the airline was responsible would lie with the passenger, just as it would if the injury were suffered in any other mode of transport. However, it would also remove the statutory limit on the level of damages that may be obtained. Airlines are also currently required to maintain adequate insurance for such mental injury claims. In the 36 years since the Carriage by Air Act was passed no completed cases have been heard before the courts on the issue. It is proposed to dispense with this requirement, thus further ensuring a uniform approach to mental injury claims across all modes of transport.

Finally, the bill proposes a variety of minor and consequential amendments. These include a minor amendment to the definition of dangerous goods to align more closely with the Chicago convention. The bill makes provision for the application of the Privacy Act to ensure that requests by individuals for information held about them must be dealt with under information privacy principle 6 of the Privacy Act. The bill also makes a minor procedural amendment to recognise the director’s new power to impose permanent conditions on an aviation document. This will ensure a streamlined process if the director proposes to exercise the power where the document has already been suspended. Other minor amendments have been inserted into the bill to rectify omissions from previous amendments and to ensure consistency with other provisions in the Act.

This bill ensures our civil aviation is safe and workable, and it offers New Zealand’s aviation community the opportunity to benefit from a closer working relationship with our Australian neighbours. I commend the bill to the House.

JOHN KEY (NZ National—Helensville) : National will be supporting this bill, but before I touch on a few remarks about it I want to draw reference to a statement made by the Minister when he began his speech. He said he intends to move a motion at the end of this debate—assuming the legislation passes its first reading—to instruct the select committee that will review this legislation to meet on a Friday and during the sitting hours of the House. The Minister is capable of doing that, but it goes outside Standing Orders 193 and 196, and National is very disappointed he has flagged this. We wish him to recognise that we do not believe that is the way things should happen.

We will support this legislation to the select committee because it endeavours to do two very important things. The first is to improve aircraft security and safety, which is something that has become far more paramount to individuals post - September 11, 2001. I think most of us recognise the significance of that event and that an aircraft must be a safe and secure environment. The bill contains quite broad definitions of what is unruly, but I thought I might recall for members an experience I had before the Act came into being. It involved an unruly passenger and way he was dealt with. It was a somewhat unusual technique—

Hon Paul Swain: Maurice Williams.

JOHN KEY: Well, there are few National Ministers who got into trouble with this legislation, but, no, that is not what I was thinking about. My experience happened 21 years ago when I went overseas with my wife—my girlfriend at the time. We were going to Singapore. As it was her first time overseas she was very excited, so I suggested to her that we go up to the lounge at Auckland airport and through the bar where we would get the best opportunity to view the plane—a jumbo jet. As we walked through the bar we saw a guy who happened to be a tour leader. His name was Roy. Roy, surrounded by the tour party he was intending to take to Singapore, was drinking heavily at this point. I said to my then-to-be wife, Rona: “You wouldn’t want to be sitting on the plane next to Roy.” Well, those words came back to haunt me as we were escorted to seats 56K and 56J on the jumbo jet. There was Roy in full flight.

As the flight progressed, Roy became more and more unruly and obnoxious. As the meal went through, the staff came around with trays of port and cognac, as they did in those days. I was sitting there saying: “No, no. Don’t give him any more to drink. He can’t possibly have any more to drink.” But the gentleman next to me said: “No, you’ve got completely the wrong approach. Give him as much as he can possibly take and he’ll definitely flake out between here and Singapore.” Well, sure enough he drank what every member of his tour did not want—every port and every cognac on that plane. He was asleep within half an hour. That would not have been so amusing except that when we got to Singapore, my last memory of Roy was seeing him being helped off the plane by the tour party he was meant to be leading. He was literally being dragged out through Customs in a semi-conscious state. Two days later we found ourselves in a Buddhist temple in Malaysia, and, lo and behold, there was the same tour group. So I asked one of the gentlemen on the group how Roy was. Roy was still in his hotel in Singapore, some 2 days later! I am not sure whether he ever went on to lead another tour, but he certainly should not have. That was one way of dealing with an unruly passenger. However, I suggest that the Civil Aviation Amendment Bill is a much better way to do it.

The House will be interested to note the range of offences people can be charged with if they are unruly on an aircraft. They range all the way from disruptive conduct towards a crew member to interference with the aircraft, being intoxicated—as indeed Roy was before he got on the aircraft—not obeying commands by the pilot in command, offensive behaviour or language, behaving in a threatening or disorderly manner, which sounds like Parliament, operating portable electronic devices, not obeying seating and seat belt instructions, and smoking or carry on dangerous goods. If members refer to the legislation—and I am sure the select committee will have a look at this part of it—they may be interested to see that the different offences carry a range of different penalties. For instance, non-compliance with commands by the pilot carries a fine not exceeding $3,000, as indeed does stumbling on to the plane in an intoxicated condition. But offensive behaviour or language carries a fine of only $2,500. Not switching off portable devices carries a fine of $2,500.

Some members of the public may ask what difference it makes if one does not obey the portable electronic devices. I simply reflect on a comment I saw—I do not know how much truth there is in it—in one of the papers that reported on the very unfortunate and tragic crash some weeks ago with the Crop and Food Research scientists on it. One of the possible reasons given was that a mobile phone may have been left on, and a text message may have been sent. The coroner is looking into the full reasons for the crash, but there is certainly no doubt that there is risk when those safety rules are not followed. So a whole range of potential things can take place under this legislation.

The second thing I want to touch on for a moment is something the Minister outlined in his remarks: the ability to implement the mutual recognition of an aviation-related certificate between Australia and New Zealand. We see that as very positive, although I must say that the sceptical side of me looks out at this with a degree of cynicism and hopes it will not be brought in, because if the Government-backed Qantas - Air New Zealand deal goes through that will be just another thing not to have to worry about. One of the reasons we see this as being very beneficial is that clearly airline costs in this country will be reduced, and, if that is the case, as it certainly will be—and clearly the safety standards coming out of either Australian-serviced aircraft or New Zealand - serviced aircraft is to a world-class level, as indeed it is—then reducing that cost will simply mean that travel will be cheaper for trans-Tasman flights and for New Zealand carriers. That is good for New Zealand business and for New Zealand travellers. We all know that New Zealanders like to travel abroad, so we see that provision as a very positive part of this legislation. We will be looking at it in the select committee, but we certainly support it.

I want to turn for a moment to one other alteration that the law will be making to the existing domestic air carrier liability. The provisions in clause 32 allow for the repeal of the current regime for mental injury in favour of the common law. There is an anomaly in the law as it currently stands, whereby the liability as currently stated in the Act requires the airlines themselves to prove they are not guilty, as opposed to the complainant proving the airline has done something wrong.

One might ask what kind of situation could occur in aircraft travel where someone sustained mental injury. The very obvious example is, as some members might remember—I think it was Aloha Airlines or Hawaiian Airlines—where the top of a 737 ripped out and people were sucked out of the plane, eight or 10 being killed. A whole lot of people actually saw that take place. That would be a really horrific sort of event to witness—one where mental injury would definitely occur. This provision will change the legislation to give such people protection under the law and to tidy up the way it is covered.

We will be supporting this bill. We do not want to see New Zealand travellers suffer in any way from legislation that fails to deal with those who are unruly—the Roys of the world who make aircraft travel less pleasant for others—and we are certainly in favour of lower airfares for New Zealand travellers. We see some great strength here. We hope that in the next few moments the Minister will reconsider the position he took in respect of the select committee. He is a very understanding, kind, and generous Minister, and I can see from the look in his eyes now that he probably will change his mind—[Interruption] I hope I do not have a privileges claim taken against me!

We will be supporting this bill to the select committee.

• Debate interrupted.

PAUL ADAMS (United Future) : United Future supports the Civil Aviation Amendment Bill. I must agree with the comments of John Key on unruly passengers, as I am also one who has been on a plane under such circumstances. I will not bore or scare members with some of the circumstances I have seen, but unruly passengers definitely are a problem on international air travel.

I will be brief because this bill is largely technical in nature and therefore quite uncontroversial. It will, in effect, serve to enhance the safety and economic efficiency of airline travel in New Zealand. The bill gives legislative effects to the Australian and New Zealand mutual recognition agreements. This will enable Australian airlines to operate in New Zealand under Australian Civil Aviation Authority certification and safety oversight, and a complementary measure will be passed in the Australian Parliament with regard to New Zealand airlines. This will serve to reduce regulatory barriers to aviation activity in Australia and New Zealand, and therefore cut operating costs for New Zealand and Australian airlines, which we welcome. So air travellers win and the airline companies win. Both countries have similar and very robust safety regulatory regimes, so this measure does not give rise to any safety concerns.

Another part of the bill implements new security measures, and is in part a response to the increasing security concerns of airlines, passengers, and Governments in the wake of the September 11 attacks. The bill allows for the prosecution of passengers who are unruly on New Zealand aircraft or other aircraft flying to New Zealand, outside New Zealand territory. Unruly actions are those, excluding actual hijacking, that may be considered dangerous, such as threats, insulting behaviour towards crew, interfering with the aircraft, operating cell phones when told not to, being blatantly drunk—and we have just heard about that—swearing or being abusive, smoking, carrying dangerous goods, and not obeying seating or seat belt instructions. A series of strong penalties is also included.

This bill brings New Zealand’s aviation security laws into line with Australian, Canadian, and British law, and it eliminates certain sovereignty-related complications that, in the past, have made it difficult to prosecute foreigners for offences committed outside New Zealand territory. The safety of passengers on airlines travelling both within New Zealand and internationally should be a top priority, and United Future is satisfied that the Civil Aviation Amendment Bill goes a long way towards helping to ensure this. We also approve of the streamlining of provisions relating to the liability for a delay in a domestic air service that is within the airline’s control, such as delaying or cancelling a flight at the last minute due to a lack of bookings. Airline customers pay enough for air travel without being subject to unwarranted delays and the extra costs these can bring with them in terms of lost productivity, or simple stress. United Future commends this bill to the House.

PETER BROWN (Deputy Leader—NZ First) : I open my contribution this evening by expressing my concerns to the Minister on the way he opened his speech a few moments ago. I did not catch the whole gist of his speech, but I assume that he is forcing us, or compelling us by vote, to sit on Fridays.

Hon Paul Swain: Ask me nicely!

PETER BROWN: Is the Minister not going to put it to a vote?

Hon Paul Swain: Yes, we are.

PETER BROWN: I think that if the Government has got itself into that sort of a pickle, it would have been appreciated if it had consulted the whips of the parties. We have been to the Business Committee this afternoon, and there was no mention of anything like this. We think that a little bit of trust goes a long way. We do not lack understanding on this side of the House, and I echo the comments of John Key earlier, that this is not the way to do the business. I assume that United Future has rolled over and agreed totally.

New Zealand First will be supporting this bill going to the select committee. Although we do not like sitting on a Friday, we will cooperate with the Government to the degree that the bill gets there and gets thoroughly examined. However, I have to say that we have concerns over the repeal of the Carriage by Air Act. We feel a little bit uncomfortable with what the Government is proposing in this bill, but no doubt that will all come out in the wash at the select committee. But I would like to put on the record that there is something about this part of the bill that does not sit comfortably with us. I was hoping that the United Future members would explain why they are so happy with that part of this bill, because it just does not sit comfortably with New Zealand First at this point in time.

We have no problem with the mutual recognition regime that this bill proposes. We think that is an excellent idea, and we are fully supportive of that being implemented. The bill reads very soundly and, as I say, it makes common sense to us that we can have a law in this country that polices Australian aircraft, and that the Australians have the same law, in Australia, that polices New Zealand aircraft. Our first response is to ask why this did not occur some time ago. It will save costs, and it will be in the interests of the safety of the flying public. We think this is the right road to go down.

We also welcome the part of the bill that deals with unruly passengers. I have personally had the misfortune to fly on two aircraft in my lifetime where an unruly passenger—probably affected by drugs, booze, or both—tried, not to take over the plane like a terrorist would, but tried to become the centre of attention. I can tell members that there were moments when the captain of one particular aircraft got rather agitated by what was going on in the cabin, and it was pretty darn scary. We were flying into London, approaching Heathrow Airport—and, I might add, this was not an Air New Zealand aircraft; it was a foreign aircraft—and a passenger really went berserk. He was suffering, as I said earlier, from the effect of drugs, booze, or both. I can tell members that many of the passengers sitting in their seats did not know what the dickens was going on, and did not know what the dickens to do about it. In the cabin of an aircraft, as all members know, it is quite confined, and it was not possible to crawl across the seats to get at the guy. In the end, it took four or five—it might even have been six—people to haul the guy down. He escaped again, and got into the toilet. We did not know what the dickens he was going to do once he locked himself in the toilet. The captain, at that stage—he was foreign, and English was his second language—broke into his first language and sounded somewhat hysterical, and we were doing loop-the-loops over Heathrow Airport. I can tell members that it was not one of my most pleasant memories of flying.

On a second occasion, I was flying from here to the UK, shortly after I became an MP, I believe. I was going home, with my wife, on a private trip to London—a trip totally paid for by myself and my wife, I might add, so it was at no cost to the taxpayer. On that occasion, someone—a New Zealander, I have to say—who was filled to the brim with duty-free liquor and that sort of thing, went berserk at the tail end of the aircraft. He spilt red wine over everybody, and he, too, took some restraining. The passengers around us were pretty nervous about how to deal with the guy, who was charging up and down the aisles like a madman—even worse than the National Party caucus, I understand.

Hon Dover Samuels: Can’t be any worse than them.

PETER BROWN: Cannot be any worse?

Dr the Hon Lockwood Smith: Well, it’s not a dictatorship.

PETER BROWN: It is not a dictatorship—oh, well. It might be as bad as our caucus has been at times. Again, the issue of unruly passengers is one that is well taken care of in the bill. I raised the issue when a civil aviation amendment bill came up during the last term. I said then that that we should be talking about controlling unruly passengers, and we were promised by the officials that a measure would come to fruition in due course. So we welcome the bill. We think it targets all the areas of concern: disruption, intoxication, interference with the aircraft, offensive behaviour and language, wrongly using electronic devices, etc. There is also a clause dealing with smoking. We think that the Government, in that segment of the bill, has got it right, and we are prepared to support the bill going to the select committee. But we have reservations about the part of the bill that repeals the Carriage by Air Act. We agree that that Act needs looking at, but we have reservations about whether it needs to be totally repealed. On that basis, New Zealand First will support the referral of the bill to the select committee.

JILL PETTIS (NZ Labour—Whanganui) : I intend to take only a brief call. Although the bill deals with the security of passengers, and with acceptable and unacceptable behaviour, or lawful and unlawful behaviour, on an aircraft, there are other important provisions that relate to civil liability for delay in a domestic service and bring this law into the area of conformity, in particular with the accident compensation scheme—transfers them from that Act to this legislation.

There are other important provisions in this bill that contribute to aspects of the New Zealand Transport Strategy—for example, in assisting economic development, which is so important in this country; assisting personal safety and security; and improving access and mobility, which is an important aspect that is sometimes overlooked with regard to the travelling public but is certainly something this Government has paid a great deal of attention to. I support this bill, and I look forward to its rapid passage through the House.

The ASSISTANT SPEAKER (H V Ross Robertson): Just before I call the next member, I inform the House that the ACT party will get the next call. ACT has indicated it wishes to split its 10-minute call—one call to the honourable member Deborah Coddington, and the other to the honourable member Stephen Franks.

DEBORAH CODDINGTON (ACT NZ) : The ACT party supports the Civil Aviation Amendment Bill, but speaking as one who is on the Transport and Industrial Relations Committee, I point out that ACT does not believe there is a need for urgency in dealing with this bill. That select committee is already overloaded with legislation. If the Government keeps piling on legislation in urgency, that is when we get the passing of laws that are faulty and have to be decided by the courts.

This bill is an enlightened piece of legislation. I am interested to see that the general policy statement states that the Government released the New Zealand Transport Strategy, and that the provisions of this bill contribute to the objectives of that strategy. One of the objectives of the transport strategy is stated as being “assisting economic development”. I have to say that this is the only piece of legislation relating to that transport strategy that, at this stage, does promote economic development. This bill does recognise that increased competition will benefit consumers and will have the potential to lower the cost of airfares for international travellers, and that will be a good thing. After listening to the speeches made tonight, I think that there must be unruly passengers on damn near every aircraft that flies around the world, because we all seem to have a story about unruly passengers.

Peter Brown: It’s the same guy!

DEBORAH CODDINGTON: Peter Brown says it is the same guy—and it is Peter Brown! Well, Peter Brown was on the last flight I took to London, and we experienced a case of air rage, as it is called. It is very, very frightening when six passengers have to restrain a passenger, handcuff the person to the seat, and when, for the rest of the flight, they hear someone raving, swearing, and carrying on. One of the issues concerning increased penalties for unruly passengers is that one would hope that when this bill is passed there will be advertising and education, as well as signs to act as deterrents to those people who believe they can climb on board an aircraft and make the flight hell for everybody else. It is impossible for security screening to pick which passengers will be unruly, even though security staff X-ray baggage, and so on. One cannot just look at people, decide who is going to be unruly, and exclude them. This bill probably will not stop air rage but, hopefully, it will go a long way towards reducing it.

I notice that one of the other benefits of this legislation is that it will reverse the burden of proof regarding mental injury. I will be interested in watching this issue when the bill comes to the select committee, because, so far, the bill refers to mental injury only where it is caused to other passengers who might be sitting in a plane and see somebody sucked out. John Key mentioned a flight—I think it was a United Airlines flight—during which the top of the plane was ripped off. I remember that the parents of one of the passengers—a New Zealand guy—spent a considerable amount of time trying to find out why that plane was faulty and why that accident happened. They went to huge lengths to overturn the finding—I think it was in America—which was sort of a whitewash. The mental anguish and injury that those parents suffered was quite considerable. I am not saying that the mental injury clause should be extended, but I think this issue is something that should be canvassed at the select committee, and I will be interested in looking at that.

The only other issue I would like to flag, which I will also be interested in when it comes to the select committee, is clause 31, which covers the function and duties of the Aviation Security Service. It means that the Commissioner of Police will be able to use aviation security to assist the police on the basis of a security threat. As it stands, I feel that that provision is a bit loosely drafted. I understand the intention is for a situation like APEC, or a visiting dignitary, and when it is not going to compromise aviation security at the airport, the Commissioner of Police can say: “All hands on deck”. We will be looking at that issue.

STEPHEN FRANKS (ACT NZ) : I raise a point of order, Mr Speaker. I intend to speak to a proposed motion to amend the resolution to commit the bill to select committee. Is that a matter on which I may move as of right, or do I require to seek leave for that purpose?

The ASSISTANT SPEAKER (H V Ross Robertson): The member needs only to hand the amendment in at the table.

STEPHEN FRANKS: Thank you; then I will speak to it. The purpose of this motion, which I think I have advised each party of now, is simply to ensure that the referral to select committee is on the ordinary terms for a select committee, with the ordinary deadline. There has been no indication, that I am aware of, that this bill is of particular urgency that should truncate time, or that should put the committee in the difficulty of sitting while the House is sitting, with all the adjustments and problems that can cause, particularly for smaller parties whose members are thereby obliged sometimes to choose between doing their duty properly at a committee, and attending in the House and taking part in debate on other matters where the committee members are involved. Of course, it is not only a problem for smaller parties, but it is probably often more acute for them. The motion would be an amendment that would omit the words after the reference to the select committee, so that the proposed suspension of Standing Order 196 would not proceed and the committee would not be given an express instruction that it should or could meet while the House is sitting or after the normal sitting hours of the House, without the leave of the committee.

As I said, this is not intended to signify any particular concern about the content of this bill. We would give it the careful consideration that the ACT party gives to all bills. We regard the quality of legislation as the responsibility of all members, but we take particularly good care because of our respect for the rule of law. If law is to be strictly enforced or observed, then it should be as sparse and as unobtrusive as possible. But we do not wish that to extend to suspending the normal proceedings of select committees. We are prompted in this by the surprise that the motion on the previous bill should have suspended that Standing Order. We would be very pleased if any member of the Government could explain why this was appended to the motion to refer to select committee, both for the previous bill and this bill. If this is a practice that the Government intends to adopt, then it needs more than simple adoption; it needs explanation of some kind.

I understand from our whip that the Business Committee has not discussed this matter. Therefore it must relate to something that the Government has decided unilaterally. If so, it would be very helpful to know exactly why. Is it related to these two particular bills, or is it intended by the Government that this become a standing practice? If it does that, it is essentially saying that the Standing Orders are being amended by default.

With regard to the previous bill, the Government might understand that we are particularly concerned because that bill has been foreshadowed for the entire time I have been in Parliament. It follows from a bill that the Minister of Justice introduced in 1997. It is a massive bill, and if this is to be a practice, then I think that the experience of being on the select committee will be very much more burdensome, and less satisfying and less useful to members of the House. So we ask whether the Government does or does not intend this. Is it some oversight or some procedural experiment? We ask that the Government take the time, in a call, to explain whether it has a particular reason, whether it is related to this bill, the Civil Aviation Amendment Bill, or whether we just happen to be in the first stage of a change in practice by the Government.

If the amendment that we have moved is accepted, the select committee motion would revert to the normal select committee motion, which means that we are not attempting to frustrate the Government or infringe the Government’s rights or expectations, at all.

SUE KEDGLEY (Green) : The Green Party, as with all other parties in this House, is happy to support this legislation going to the select committee. But I would like to start by saying how deeply unhappy we are with the procedural motion that has been sprung upon us tonight that would suspend the normal procedures of the House and require the select committee considering this bill and the previous bill to meet at all hours, virtually, of the day and night and during the proceedings of the House. As other colleagues have said previously, we can see no reason that this should be sprung upon us. We are aware that there was a Business Committee meeting this afternoon. We are unable to understand why, if there were some good reasons, this was not raised at the Business Committee.

I am very grateful to the ACT member for having moved his motion, which I hope will be supported, that would, basically, seek to amend the proposal. Otherwise, the way it is all rolled up into a composite motion, it may have required us to vote against the entire move of this bill to the select committee. In fact, we are perfectly happy that the bill goes to the select committee, but we are deeply unhappy with this suspending of normal procedures that has been sprung on us at the last minute. May I also say that we are very unhappy that the Government denied us leave to change our vote on the procedural motion on the previous bill.

I turn now to the Civil Aviation Amendment Bill itself. We support the various clauses in the bill. I will spare members my own stories of civil disobedience on airlines. Fortunately, my experiences have not been as dire as some that have been recorded. I am very pleased that the regulations covering unruly passengers also include such things as persons operating portable electronic devices. I think that is important. We know that people operating cellphones can in fact interrupt the safety of the aircraft, yet we see people on aircraft who insist on using them. So I think that provision is really excellent, and we are absolutely delighted with those proposals in the bill. Indeed, they are long overdue.

We do have some concerns about the repeal of the Carriage by Air Act and its replacement with the Consumer Guarantees Act. We are not convinced that the Consumer Guarantees Act will give consumers the same degree of protection that was granted to them by the Carriage by Air Act, which is being repealed. But this is the sort of technical detail that can be thrashed out at the select committee. I notice that other members have also expressed concerns about that, so, hopefully, this is an issue that the select committee will address.

We are happy, too, with the provisions for the mutual recognition of aviation safety certification between Australia and New Zealand. We are very pleased that in this bill we have opted for mutual recognition with Australia, not harmonisation. As Associate Minister of Transport, Harry Duynhoven, who originally introduced this bill, said in his press release: “We have decided on mutual recognition, not harmonisation.” We are very pleased with that. We think that mutual recognition between Australia and New Zealand makes a lot of sense, as compared with harmonisation. We are deeply opposed to harmonisation, which ultimately involves relinquishing our sovereignty, and we cannot understand why the Government is pursuing harmonisation rather than mutual recognition in other areas, such as the regulations surrounding dietary supplements. We hope that we will carry on the tradition of mutual recognition, as this bill does, and not try to move towards harmonisation, which always seems to mean New Zealand adopting Australian legislation and Australian rules, and us giving up our sovereignty. So we are very happy with that, as well.

Indeed, as I said, apart from our concerns about repealing the Carriage by Air Act, we are perfectly happy to support this bill. The only thing I would say is that, basically, this bill is a bit of a hotchpotch of different bits and pieces of the Civil Aviation Act that are being amended. It seems to us that there is one important issue that we ought to be addressing in this legislation, with regard to runway safety, and that is the fact that at present we are not implementing the rules of the International Civil Aviation Organization in respect of, for example, airport runway safety ends. Our airport runway safety ends do not comply with international regulations, and we think that this bill would be a sensible place to try to look at ensuring, perhaps in the purpose of the Civil Aviation Amendment Bill, that there is a requirement to implement those obligations, including the ones relating to runway safety.

So there are issues, like those, that we believe ought to be covered in this omnibus civil aviation bill, but we are happy with it as far as it goes. But we are deeply unhappy with the idea of the select committee being required to meet at all hours of the day and night, and while the House is sitting. As we are a small party this would be a real burden on us, and we will be opposing the motion. We hope that it will be defeated. We will then be able to support the bill going to the select committee.

HELEN DUNCAN (NZ Labour) : I am pleased to support this bill. Its provisions contribute to aspects of the New Zealand transport strategy, assist economic development through the mutual recognition between Australia and New Zealand of each other’s air safety approvals, assist personal safety and security by the measures dealing with unruly passengers, and improve access and mobility. I commend this bill to the House.

PANSY WONG (NZ National) : The Hon Paul Swain should take a deep breath and reflect on all the objections raised by Opposition parties to the procedural motion. I looked at that when this legislation was first introduced to Parliament on 1 July. If the Labour Government believes that this legislation is so urgent that it requires the select committee to sit on Fridays, etc., why did it not organise its business a lot better by referring the legislation to the select committee a month ago? I certainly felt that it was mean of the Labour Government to deny the plea from the Green Party to change its vote on the procedural motion. After all, it happened very quickly, and if one had not been paying 100 percent attention, one might not have picked up the fact that the Minister had sneaked in a procedural motion that would override the Standing Orders of the House. The Green Party should be given the opportunity to change its vote on that procedural motion, on the grounds that it was not aware of the proper wording of the motion.

As my colleague Mr John Key has indicated, National will support the bill’s referral to a select committee. We certainly support the three key changes introduced by this legislation. The first change is to enable Australian airlines to operate in New Zealand under the Australian Civil Aviation Safety Authority certification and safety oversight. We understand that a complementary measure will then be passed by the Commonwealth Parliament of Australia. It makes a lot of sense to us to enable the avoidance of duplicate aviation requirements and the need to build extra training education in both countries The particular part that would attract most public attention relates to unruly passenger behaviour. I doubt whether anybody in the House would raise an objection to the introduction of that part. Indeed, I have seen flight attendants express delight over its introduction, because they reckon that cabin crews have been coping with offensive and insulting behaviour from passengers for years, which, if repeated on the ground, would be illegal. Certainly, the National Party is very happy to support that part.

I also want to raise technical aspects of some of the clauses. Hopefully, the select committee will examine those in detail. Some of the unruly behaviour that will be ruled as illegal—we will not oppose that—is disruptive conduct towards a crew member. The second category is interference with an aircraft. It is stated that any person who tampers or interferes with any aircraft or its equipment commits an offence and will be liable to a fine not exceeding $5,000. The intention of that clause, obviously, is to deal with people who would interrupt the flight schedule or interfere with the technical equipment that is necessary for the plane to operate effectively. I wonder what might happen in unfortunate circumstances where, as we all know occurs, children get really excited about the audio-visual equipment on international aircraft. One would want to know that the interpretation of that provision would not be carried too far.

The other provision that needs to be debated a little bit more relates to intoxicated persons not being permitted on aircraft. I certainly would accept that, but the provision refers to a person committing an offence who is intoxicated and boards an aircraft, or becomes intoxicated on an aircraft. We come to a bit of a dilemma, because any person who has had experience of international air flights in particular, waiting for an international air flight in the lounge, would have been subject to the temptation of lots of free alcohol. I wonder whether the lounge staff or airline will take precautions to make sure that an individual will not give in to those temptations. Of course, intoxicated persons should be stopped from boarding an aircraft. I would hope that the airport or airline staff would have the authority to stop those individuals from boarding an aircraft, and I presume a fine would be imposed at that juncture. They should not even be allowed to board the aircraft.

The second issue is that they would also commit an offence if they became intoxicated on an aircraft. Once again, when people are subjected to free drinks on an aircraft, measures need to be looked at in terms of educating or warning individuals when they are faced with the temptation of the abundant availability of alcoholic drinks.

The other issue I raise is about the operation of portable electronic devices not being permitted. We are all very clear that cellphones, etc., should not be allowed to operate on an aircraft. However, I wonder about the situation with laptops. Increasingly, people are carrying on with their work using word-processing facilities. They may not be allowed to connect to the Internet, but certainly, lots of people are carrying laptops on to aircraft and they might be using those for word-processing functions or to clear their email during a long-haul flight. So it is a question whether the reference to portable electronic devices also applies to laptops in those circumstances, because certainly on domestic flights it is quite common for passengers to continue to do their work. All those provisions need clarification.

I was interested to note that the introduction of references to unruly behaviour was largely because, according to the introductory note to the legislation, the increasing number of threats of terrorist activity in New Zealand and worldwide has focused attention on the need to ensure that appropriate security measures are available in this country. I am very pleased to hear that. When our Prime Minister, Helen Clark, mentioned that New Zealand exists in a benign environment, a lot of us became concerned that we might be lured into complacency. Certainly it should be acknowledged that particularly after September 11 we are faced with an increasing number of threats of terrorist activity, so every measure should be taken to ensure that international passengers feel safe to fly. As the National spokesperson on tourism, I certainly think that the measures introduced by this legislation are eminently sensible. New Zealand is enjoying growth in tourism, and we want to ensure that every measure is taken to enhance that growth. We will support this bill going to a select committee.

BRENT CATCHPOLE (NZ First) : Before I express New Zealand First’s support of this bill, I express our concern about the need for urgency in dealing with it, and, particularly, the need for select committees to sit on Fridays and to late hours. I do not see that it is necessary for this bill, and I have great concern as to the reasons that the Government would want to do that. If the Minister could convince us, perhaps we would agree, but so far the Minister has not been able to convince us that such action is necessary.

New Zealand First supports the majority of the provisions in this bill. One of its provisions that I like is the extension of the open skies agreement, particularly the seventh freedom, of traffic rights. We already have the fifth and sixth freedoms, for passenger and freight pickups and drop-offs in multiple ports in the destination country, and the seventh freedom takes it a step further in allowing an airline to begin and end a flight in a country without passing through its home country. That is a concept that will allow for an increase in tourism.

One issue that I would like to raise is the agreement between the Australian Minister of Transport and the New Zealand Minister of Transport in 2002. They agreed, on the grounds of safety and ease of access, on the two countries working together and passing legislation that would allow air operators certified in one country to operate in the other country without having to go through the process of getting a new operator’s certificate in that country. That is a good result. However, it does remind me of the problem when Ansett Australia was owned by Air New Zealand, and the Civil Aviation Safety Authority Australia suddenly closed Ansett Australia down, for the reason, it said, that it was unsafe. I would hate to see those powers passed on and used, particularly when one considers that the explanatory note to this bill gives a lot of weight to the Civil Aviation Safety Authority Australia—the same authority that closed Ansett down. I would hate to think that it would have far more powers to shut Air New Zealand down within New Zealand boundaries, because that would go against the sovereignty of our State. To allow an authority that has a mutual agreement with a country the extreme powers to do that—in particular, the power to shut down an airline that originates from another area—would be a concern.

The Government of Australia does agree to that mutual arrangement, but I would like to make sure that, before we finally agree to allowing this bill to pass, we are certain that the Australians are going to mirror our bill. If they do not, we have allowed them to have the upper hand. I would hate to see that, because tourism in New Zealand is very important, and our airline is a very, very important aspect of that tourism. To have an overbearing regulation that would limit tourism and direct it to Australia would be a gross overuse of the powers in this legislation.

A number of members have talked about the provisions relating to unruly passengers. Unruly passengers on aircraft are a frightening concept. I have had a first-hand experience, not on an aircraft, but on a tour bus on which a passenger suddenly got out of his seat carrying a knife. It would be much the same as on an aircraft, except that the bus was able to stop while I attempted to disarm the passenger. With 45 passengers on board—it was a fully laden bus—it was not an easy feat. It came down to a lot of calm talking, and we eventually persuaded the passenger to give up the knife.

Alcohol at altitude has a much more damaging effect on the brain and actions, because it takes effect rapidly and a person gets out of control, if he or she is that way inclined; that is one of the problems on aircraft. If the passenger with the knife had been so inclined, I suspect we would have had a far more sinister situation, at the end of the day. In that circumstance, we were lucky and were able to disarm the person.

New Zealand First has reservations about civil liabilities for delay, because when an aircraft is delayed there are often ongoing connections that it is necessary for a passenger to make in order to carry on to another destination. If an airline abdicates its responsibility to get passengers to their destination, that is one thing, but it is a weakness in this bill to allow the airline carte blanche with regard to its reliability in getting them there, with no responsibility to look after passengers because they have missed their ongoing flights. The select committee really needs to look at that aspect and make sure that it is not giving the airlines unnecessary powers or freedom to neglect their passengers and not be responsible for their well-being, whether or not they are outside their own countries. If that support is not in the mechanisms in the legislation, we will be letting them down. The passengers are an important aspect.

In summary, New Zealand First supports the open skies agreement. Under the open skies agreement, Air New Zealand and Qantas have often had code-share agreements, so it is a case of allowing a little bit more freedom in that.

Jill Pettis: Oh, come on.

BRENT CATCHPOLE: I hear Jill Pettis piping up over there. She wants me to hurry up and finish. I say to her that she takes very short calls, but we have some very grave concerns about a few aspects of this legislation. We are supporting the bill for her party, but she should give us the due of allowing us to express our concerns where we see them. I would like to make sure that the select committee has the opportunity to listen to our concerns and not be shut down by her comments. I recap on the issue of unruly passengers: we do find that it is most important to support the flight crew and make sure that unruly passengers are curtailed, or even stopped in their tracks before they become a problem, but our main concern is civil aviation liability.

• Bill read a first time.

Hon PAUL SWAIN (Minister of Transport) : I move, That the Civil Aviation Amendment Bill be referred to the Transport and Industrial Relations Committee, referred to the Transport and Industrial Relations Committee

STEPHEN FRANKS (ACT NZ) : I move, That all the words after the word “Committee” be omitted.

Hon PAUL SWAIN (Minister of Transport) : I move, That the Railways Bill be now read a first time. At the appropriate time I intend that the bill be referred to the Transport and Industrial Relations Committee—the House will be relieved to know—with no conditions.

The rail industry in New Zealand is moving away from being vertically integrated, with one major operator, to being fragmented, with a number of different key players. This devolution creates safety gaps at the margins, which need to be effectively covered by legislative change. I flagged the introduction of this legislation late last year, but a few issues relating to how the bill would affect small heritage operators meant that introduction was delayed. However, the bill is now ready and its introduction should not be delayed any further.

This bill will have a positive effect on rail safety as it brings a more robust system, and it will help those who are interested in investing in New Zealand railways to understand the proposed regulatory regime. The safety legislation will apply to all rail participants, regardless of who they are. New legislation needs to recognise changes in rail ownership and operational activities. This Government has made a commitment to recognise the recommendations made by the Ministerial Inquiry into Tranz Rail Occupational Safety and Health2000, also known as the Wilson Report. A subsequent review of the state of the infrastructure, conducted by Halliburton KBR, has reinforced the need to introduce changes.

This bill consolidates legislation relating to rail safety from the Transport Services Licensing Act and the Land Transport Act into a single Act. It also incorporates relevant parts of the Railway Safety and Corridor Management Act, and contains remedies for a number of deficiencies in the current rail safety legislative framework. At present, rail operators are accountable for rail safety through their approved safety management systems. In future, however, there will be participants in the rail sector whose activities are fundamental in the safe delivery of a rail service, but who will not be covered by a safety management system.

This bill extends the licensing regime to cover a greater portion of rail participants. It requires a clear and visible chain of responsibility between licence holders and subsidiary organisations. It improves the audit process by introducing a wider-ranging process of safety assessment, and it enhances the range of powers available to the regulator—the Land Transport Safety Authority—to enforce safety. Operators who perform well in their safety assessments will be rewarded with reducing compliance costs over time. Operators who do not perform well can expect more regulation, including more regular assessments and the requirement to produce safety improvement plans. At the moment, it would be very difficult to prosecute a member of the public, or, perhaps, an employee, who might do something that has a serious safety consequence. The bill changes that. Although the safety manager is responsible for the overall safety of the operation, an individual could be held accountable for his or her actions if necessary, and the court will be allowed to decide a penalty suitable to the level of the offence.

The bill also contains new provisions in which the Minister can make rules, which are a form of legislation, to do with a wide range of issues, including driving hours and drug and alcohol standards. Current law requires only rail operators to have a licence, and before a licence can be granted, operators must have a safety system approved. Because Tranz Rail and heritage organisations were vertically integrated, the safety of the whole rail operation was managed through the rail operators’ safety system. However, with the sale of the Auckland rail network, we have moved away from that model. Similarly, further possible changes in track ownership, outsourcing maintenance, or contracting train control will mean that those activities are no longer covered under a single rail operator’s licence or its safety system. Extending the licensing regime to include those who provide access to the track means that access providers will also require a safety system. All rail participants will be captured under the safety system of either the rail operator, or the access provider, through interoperability agreements. Those agreements will be approved by the regulator, and must demonstrate a chain of responsibility from the licence holder right through to the individual contractors who are part of the wider operation. This is important in order to maintain accountability.

Both the Wilson and Halliburton reports criticise Tranz Rail’s safety management systems for being voluminous and unwieldy. Their sheer size makes it very difficult for the regulator to navigate, and, in practice, reduces their efficacy. Rail licence holders will still have a safety system. The bill requires a safety case—a high level public document that contains, among other things, an overview of the rail operation’s key activities, and a description of the safety policy and objectives. This safety case must include a strategy for managing identified risks, and an outline of the safety monitoring and reporting regime.

In addition, key documents relating to the operation will be listed in the safety case. The safety case will be approved by the regulator, and should that licence holder wish to make changes to it, those changes also need to be approved by the regulator. Secondary documents and manuals relating to the operational practice will sit underneath the safety case as part of the wider safety system. Those documents will not require approvals for variations, but in the case of a safety assessment they will be subject to audit, to ensure that an operation is complying with its own standards. As well, the regulator can require the safety risks to be remedied. That means that licence holders will be required to change aspects of their safety systems, or add to them, if deficiencies are found.

The current audit process is a paper-based test that ensures an operator’s records match the standards set out in the safety management system. That means that it does not matter what the standard is, just that it is consistent. There is no provision for the auditor to make sure that the standards required of the regulator are actually being carried out. If we are to achieve full safety assurance for rail operations, a combination of audit, inspection, investigation, discussions with staff, and the use of accident-reporting data must form the basis of safety assessment. The bill provides for that level of safety assurance.

Under this bill, the regulator will negotiate with the licence holder the frequency with which the operation should reasonably be assessed. For those who demonstrate a consistently good safety record, the time between assessments may be extended, thereby reducing their compliance costs. The regulator may require an operator with an unacceptable safety record to develop a safety improvement plan. This plan recognises continuous improvement, and allows the licence holder to work proactively with the regulator to achieve agreed safety outcomes. It should also help the licence holder achieve a good safety record and reduce compliance costs in future. While the current audit system merely checks compliance with a system that may be outdated or ineffective, this bill will allow the regulator to review the safety case. That would occur in situations where the regulator can reasonably demonstrate that the nature of the business has changed considerably, and that the operation is significantly different from that for which the safety case was originally proved.

I am committed to ensuring that non-commercial operators, and particularly small heritage operators, are not unduly penalised by the costs associated with this new safety regime. Those charges are still being finalised, but they will be kept to a minimum where possible. Over the next few months officials will consult the industry over the structure for fees and charges under the bill, and will also encourage heritage operators to address the issue in submissions to the select committee. I should add that I have had discussions with the heritage operators, and they have indicated to me what their concerns are. We have indicated that we will meet them some of the way. There are still a lot of details to be worked through, but they have my assurance that we are trying to ensure that compliance costs are kept as low as possible, given the charitable nature of many of those organisations. I am also conscious of the need to minimise paperwork for small operators. The Director of the Land Transport Safety Authority may, if appropriate, allow an operator to use the documentation required for its current licence as its safety case.

The bill will make the sanctions regime more effective by allowing the regulator a series of ramped-up powers that can be used accordingly, and in relation to the seriousness of a safety breach. The current sanctions regime relies on imposing conditions on the operator’s licence or suspending the licence. Both options are restrictive and impractical. There is no scope to effectively enforce lesser breaches without disrupting the whole operation. Graded powers will allow the regulator to acknowledge small breaches without having to impose hefty penalties. It will also encourage licence holders to be proactive andidentify their own risk without incurring a penalty if the risk is managed quickly and effectively.

The bill proposes a number of positive changes to the way the rail industry is regulated and how safety is assured. Given the direction the industry is taking, moving from vertical integration to fragmentation, New Zealand would be sensible to learn from the mistakes made in other countries—particularly in the United Kingdom, where poorly managed safety gaps have resulted in disastrous rail accidents that have taken many lives. This Government has a vision for transport in which rail plays a significant part. If we want to fulfil that vision, we must improve our rail safety performance up to international best practice. We must ensure the continued success of our efforts to reduce serious injury and deaths in the rail area. The bill does that, and I commend it to the House.

Hon ROGER SOWRY (Deputy Leader—NZ National) : The National Party will be speaking in favour of this bill and voting in favour of its introduction, but we do so with severe reservations, because we are very concerned about some aspects of it. Although we will vote for this bill to go to a select committee, we will be reserving our position, depending on the bill that emerges from the committee.

I want to start by saying that I notice that the Government and United Future have decided that this bill will have full submissions. I acknowledge that a bill like this needs full submissions from a range of people interested in the process. I regret that we will not be allowed to do that for the Civil Aviation Amendment Bill, and I regret that United Future has stopped that, given that it has no one on the committee and shows very little interest in transport issues. That aside, United Future has rolled over, as is its wont.

I take issue with the Minister, who said that rail was moving away from being vertically operated—and he is right there—to being fragmented, with a number of players. I am bemused that he can say that with a straight face, given that just a few weeks ago in this House, he was trumpeting a deal that the Government had signed with Tranz Rail for its management to have sole management rights to the track. It was denying access for anyone other than the odd heritage operator and the obvious passenger transport that is already broken down. That deal is still on the backburner, because, after having signed the deal with Tranz Rail executives, the Minister raced around behind the bike sheds and did a deal with Toll Holdings, which undermined the Tranz Rail executives. So the Government went from having total faith in Tranz Rail and buying the track back and giving Tranz Rail’s chief executive and management the total rights to run it, to racing around and doing a deal with Toll Holdings, saying: “No, you can have total rights. You can get the same money. The Government will own the track, and Toll Holdings can operate it.”

We now know that that deal is effectively dead in the water. Toll Holdings will not be able to get the 90 percent shareholding that the Government had insisted upon in that arrangement. So now we have other operators lining up to purchase the operation, and they do not know whether they will get the same deal from the Government. It may well be that Tranz Rail is moving away from being vertically operated, because it is in such a shambles after the Government’s meddling in the sale process that people do not have a clue as to who will operate or own what.

The Minister stood in the House a few weeks ago and said that the reason he had had to front up with $200 million for Tranz Rail was that the company would be broke by Friday, and if he did not come up with the money the trains would stop. Well, the trains are still going. I tell the Minister that Tranz Rail could go broke because of the reports it has to commission every few weeks to evaluate another deal that the Government is trying to stitch up with another potential buyer—that is what might send Tranz Rail broke; it has nothing to do with the original reasons.

Hon Jim Anderton: Do you really believe that?

Hon ROGER SOWRY: Mr Anderton sits there chuckling away, but he is the man who has been promising rail all over the country, visiting everywhere but Nelson. He has promised rail all over the country, but he has not delivered on it at all. Richard Prebble has a better track record in delivering services than Jim Anderton. Jim Anderton has been going to Gisborne just about every month for 4 years and saying the same thing: “Don’t worry, the trains will start.” There is not one extra log on the rail now than when he started going—and he knows that.

Mr Anderton can sit there and chuckle all he likes, as the only Cabinet Minister to be on New Zealand superannuation and proud of it. That says a lot about the high stand he takes when it comes to using taxpayers’ money—$180,000, plus the car and Vogel House are not enough for him; he has to take New Zealand superannuation, as well, just to make sure that ends meet, and that he can pay for his regular Thursday or Friday night at the movies. I tell Mr Anderton that that sort of behaviour goes down with the populace at large about as well as his continual promises to save rail in Gisborne. People have stopped laughing about Mr Anderton in Gisborne; they are polite to him because they are never quite sure whether the chequebook is coming out, but they suffer him only begrudgingly. That is what they tell us on a regular basis.

What is of concern in this bill is the huge amount of fines. It is the good old Jim Anderton approach to Government: if something is going wrong in the rail business, sock some fines in there. We have fines that will apply to staff—to the workers whom Mr Anderton represents. If a staff member fails to act in a safe way, he or she is liable for a fine not exceeding $100,000.

Hon Jim Anderton: If he or she does something causing death.

Hon ROGER SOWRY: No, that is not what the bill says. I suggest that Mr Anderton reads clauses 60 to 65, because he will then see what it means. Next time Mr Anderton is on the plane to Gisborne he should read them, and stand up in Gisborne and tell the people there—when they have stopped laughing—that this Government is happy with $100,000 fines. The union movement is not happy with that. It is on record as saying that it opposes these clauses. We will oppose them as well, and we will not support the bill with those sorts of draconian fines, particularly when the company can also be fined under the occupational safety and health legislation. So not only does one have to be content with fines under the occupational safety and health legislation, under this bill one is also able to be fined up to $100,000 under clause 60, and up to $50,000 with imprisonment terms not exceeding 1 year or 6 months, depending on the section of the legislation.

We think that is draconian. We think it is likely to mean that the person operating in a shunting yard—[Interruption] Government members can chip away, but do they think that the person down in the shunting yard who makes an error of judgment will be happy with the fact that because he is standing alongside the track, doing his job, and an accident occurs for which he is found to be liable, he can be fined up to $50,000, or $100,000, depending on the error of judgment?

What other industry has those fines? None—not one. Why would we fine the workers at that level? Does Mr Anderton believe that they can pay for it? Are those workers on a salary plus New Zealand superannuation like him? Are they double-dipping? No, they are just getting a salary. He is out there saying: “No, that is not good enough. We will get the company under the occupational safety and health legislation, and we will get the staff members, the managers, the shunter operator, the person”—

Hon Jim Anderton: The shunters usually get run over—that’s the problem.

Hon ROGER SOWRY: Oh, he says the shunter gets run over, so he is not worried about him. Well, I want to say—

Darren Hughes: Be sensible.

Hon ROGER SOWRY: Mr Hughes says this bill will stop them being run over. Mr Hughes also said that the alcohol tax on port would stop youth drinking, and they are still laughing about that in Levin on Saturday night. I say to the Government that we will not support this bill in the shabby condition that it is in.

PAUL ADAMS (United Future) : I rise to speak in support of the Railways Bill. United Future is supporting this bill because we believe it is a much-needed, common-sense piece of legislation that will enhance the safety of all users of Tranz Rail’s network, from railway workers to freight users to suburban commuters. The days when the rail network was fully owned and operated by a single organisation are long gone, yet our rail safety regulations do not yet reflect the new reality. New Zealand’s rail system has become increasingly fragmented, with Tranz Rail contracting out maintenance and selling off assets, including passenger services. Adding to the fragmentation has been the emergence of small independent players, such as heritage operators. The fragmentation of New Zealand’s rail network is set to continue apace, and may well gain momentum once the ownership of Tranz Rail and the rail tracks has been settled.

The Railways Bill will establish clear lines of accountability for rail network safety issues. It will also impose robust new safety requirements on rail operators, requiring them to be licensed, to appoint safety managers, and to develop safety plans. The new safety requirements will be backed up by greatly increased penalties for non-compliance, and wider monitoring and enforcement powers for the Land Transport Safety Authority. Failure to enact this legislation, and thereby to enable the implementation of the new safety regime, could well expose New Zealand to the sorts of problems now besetting British Rail. That is the last thing the beleaguered rail industry, and indeed the transport sector with its large and growing infrastructure deficit, needs right now.

No one in the United Kingdom has yet introduced a safety regime along the lines of that being proposed in the House tonight. As a consequence, the British rail system is an incomprehensible mishmash of Government interests, network owners, rail service owners, maintenance contractors, rail service contractors, and a whole host of others. That means that when UK regulatory authorities want to enforce preventive safety requirements by checking rail traffic tracking systems, the maintenance of railway lines and equipment, or general safety regimes, they are often unable to determine who exactly is responsible for any given area.

The same problem applies to determining issues of responsibility and liability after a serious rail accident has occurred, as has been the case several times in recent years. At best, this leads to extensive delays, similar to those faced by Wellington commuters last summer when Tranz Rail had to slow trains down due to the heat-buckling of some parts of the track. At worst, it can lead to serious accidents involving heavy loss of life, such as the Paddington rail disaster, which was seemingly caused by a preventable signal failure, and in which 31 people were killed and 400 others injured. In fact, the distressing state of the British rail system led to an interesting debate in the UK Parliament between those who thought Britain had the worst railways in Europe and those who thought they were merely awful. During the same debate Tony Blair was accused of having neglected the rail issue since being elected in 1997.

Thankfully, New Zealand’s rail problems have so far been largely confined to the category of inconvenience, rather than outright disaster on the scale of that seen at Paddington. It must be remembered that the impetus for the Railways Bill was a ministerial health and safety inquiry into Tranz Rail convened by the Minister of Labour, Margaret Wilson, after the death of five Tranz Rail employees in 7 months. Rail safety in New Zealand is a serious issue, and we should not simply trust to luck to prevent more of the same, or worse, from occurring in the future.

That is not to say that United Future does not have some concerns about this bill, and we will continue to monitor those carefully. In particular, we are concerned about the compliance cost levels facing small players, such as heritage operators. The cost of applying for a licence, paying annual licensing fees, developing a safety case, and paying for approval from the Land Transport Safety Authority could easily become prohibitive. However, those concerns have been partially mitigated by various economies that can be made, and partially by an effective subsidy that will cover a certain proportion of the cost of the regular safety assessment that heritage operators will be required to undergo. United Future raised this concern with the Government very early on in the process, and we are satisfied that reasonable efforts have been made to find practical solutions to the challenges faced by smaller operators without compromising the safety regime that this bill is to put in place.

Another issue, and one which has proved to be the most controversial, is the proposal that individual rail safety managers may be liable for death or injury caused as a result of deliberate negligence on their part. However, we are comfortable with that provision, given that the threshold has been set quite high, and that it is necessary if proper lines of accountability for safety are to be established. Quite frankly, we do not see anything wrong with holding people personally responsible for their own deliberate actions when any misjudgement or neglect could result in serious property damage or loss of life. I ask the House how robust safety standards—or, in fact, any standards—are to be enforced without any notion of personal responsibility.

This legislation will play a vital role in the future of rail in New Zealand. We believe that rail can play, and will continue to play, an increasingly important role as part of New Zealand’s transport infrastructure. We would certainly prefer to see as much of that as possible achieved by the market without Government intervention, but given the fiasco caused by Tranz Rail’s ownership of the network, we realise that some intervention is required to bring the rail network back up to a high standard and assure its future viability.

Nevertheless, rail freight and passenger service operators will continue to operate commercially no matter who owns the tracks, and, hopefully, on an increasingly competitive basis that will see the volume of rail transport increase and the price of freight by volume decrease. But to achieve that we need to get the fundamentals—and particularly the safety and accountability issues—right from the start. This bill is a very good start, and we commend it to the House.

PETER BROWN (Deputy Leader—NZ First) : I listened with interest to the contribution made by Paul Adams. I have to ask whether we heard about another background backyard deal between United Future and the Labour Government. United Future does not even have a member on the select committee, yet the member said that he was very happy with everything. The United Future members sit in closed rooms and discuss what a bill will be, what it will do, and the intention of it. That is not democracy. It is an abuse of the system to come to the House and say that the bill is all hunky-dory when nobody has had any input in it whatsoever, and United Future has not even made an attempt to have a member on the select committee. The member is very misguided in saying that.

I accept that Paul Adams’ concern about the British rail system was genuine. However, the British have really addressed the issue over there. They have really gone into their system and played hardball. They have a company called Network Rail that the British Government has taken over, without any doh, ray, me or waffling along like this Labour Government did here, when it talked one day about doing a deal with Tranz Rail and the next week about doing it with Toll Holdings.

Paul Adams: Will the member support this bill?

PETER BROWN: We will support this bill, but for genuine reasons. The United Future members are so misguided that they need our expertise to straighten the thing out. We will support this bill. We will sit on the select committee, unlike that member. United Future will not have anybody on the select committee. It has already done a deal with the Government, and the member thinks that it is all OK. He is quite happy with the fines and the penalties that have been imposed in this bill, although we have some major concerns with regard to them. I can now see where the Government’s woolly thinking came from. With due respect to Mr Adams, I can now see why the Government is so woolly on transport issues. The Government does not have a clear idea in its head about what needs to happen.

Fundamentally, if we want to develop rail, then we have to have the track in Government ownership. Dr Cullen refused to do that at one time, but now he is talking of doing it. First of all he talked about a deal with Tranz Rail, whereby it was to have monopoly rights of operation, and then 2 weeks later he wanted to do the same deal with Toll Holdings. In essence, what needs to be achieved is to have a rail track company, with competitive operators providing the services. Mr Adams alluded to that, but he could not have said anything to the Government about it, because there is nothing in the bill that outlines that sort of theory. Mr Adams alluded to the fact that competitive services on our rail track system would make an improvement, yet there is nothing in this bill that will encourage anybody to move one single log from the roads on to rail—nothing. I have searched the bill, looking for some sort of incentive to do that, and have found there is absolutely nothing here that will do that. However, the bill does go to one of the core issues, by trying to address the safety concerns that we have with Tranz Rail.

About 10 years ago a political party was formed in this country.

Hon Paul Swain: What was the name?

PETER BROWN: That political party was called New Zealand First. One of the reasons for forming that party was our concern about the State asset sales; that was a fundamental reason for forming the party. There is no greater example than Tranz Rail of why we were concerned about State asset sales. I have heard people criticise the Hon Richard Prebble over the issue of the railways. However, in fair dos to the man, he sorted out New Zealand Rail and made it efficient for 1 year, and he made it available to—

Hon Jim Anderton: Oh!

PETER BROWN: The member indicates that he would not have sold New Zealand Rail. I can recall that member sitting very comfortably in his seat when Labour was in power between 1984 and 1990, selling all sorts of assets.

Hon Jim Anderton: Was the member in England then?

PETER BROWN: I was here. I know that the member made a little bit of a ruckus on the side, but basically when push came to shove he was part of that Government between 1984 and 1990, when $11 billion worth of State-owned assets were sold to private people.

We are concerned about the level of fines and penalties provided for in this bill. We are not comfortable with the level that is to be imposed here.

Hon Paul Swain: Too high or too low?

PETER BROWN: The penalties may well be too high.

Paul Adams: Well said, Paul!

PETER BROWN: Does the member disagree with me? When one imposes penalties they have to be realistic and fair. In this bill they seem to be fairly on the high side, to put it mildly. We do not agree with people offending or agree with the failures that are addressed in this bill, but we believe that the penalty should reflect the crime. To go back to the example of Britain, which Paul Adams referred to, I tell members that that country is actually holding the directors of Network Rail to account for manslaughter in relation to one of the big rail crashes that occurred there. In my personal opinion we should look at a lower fine level for modest offences, but if we get into the serious stuff then the penalties should be very severe. I am not sure whether this bill reflects that sort of philosophy; in fact, I am certain that it does not. It seems to whack a heavy fine on to somebody for what could be a very modest offence.

We would be interested to know when the Tranz Rail track will become the responsibility of Track Co. The Hon Roger Sowry said that Tranz Rail went cap in hand to the ministry some time ago—and I think the Minister concurred—saying that it would go belly up within a few days or weeks. But Tranz Rail is still continuing.

Hon Paul Swain: It’s got $40 million; that kind of helps.

PETER BROWN: That keeps Tranz Rail ticking over, but when can we have a resolution to this problem?

Hon Paul Swain: When the shareholders vote.

Hon Jim Anderton: It’s still a democracy.

PETER BROWN: I am glad to know that. It will be a step in the right direction to get the railway structured correctly, and to apply this legislation in order to get the track company running properly, taking appropriate safety measures, and bringing the whole system up to standard.

I believe the money that the Government proposes to invest in the track company will not be sufficient in the longer term. I think it is $20 million a year for the next 5 years. That is not enough, and the Minister knows it. The amount should be at least double that for the first few years, and probably for as long as 10 years. The reports that I have had about the condition of the track cause some concern.

We will support this bill being referred to the select committee. We will listen to the submissions, and we will endeavour to give the Government our best advice on how to get the rail track company up and formed, so that rail freight can take cargo from the roads through competition, thereby removing congestion and making the roads a safer place to operate on. New Zealand First supports this bill going to the select committee.

Hon JIM ANDERTON (Minister for Industry and Regional Development) : I rise to speak in support of this important measure. The aim of the proposed legislation, as members have noted, is to promote the safety of rail operations by adopting recommendations made by the Ministerial Inquiry into Tranz Rail Occupational Safety and Health, led by my colleague Margaret Wilson. This bill will transfer rail safety legislation into a single piece of law, and consolidate the laws relating to the management of the railway corridor.

As the explanatory to the bill outlines, a number of gaps in existing laws have been identified, and they will be exacerbated if action is not taken by a number of users that may ultimately be using the lines. Those gaps will, if not addressed, compromise safety for rail employees and for the general public. I do no know whether Mr Sowry has noticed this fact, but most of the people who are killed on the rail network are killed while working for Tranz Rail. In particular, the ministerial inquiry highlighted deficiencies in Tranz Rail’s safety system, and in the audit and inspection processes.

The duties of all rail participants in New Zealand, whether they be rail vehicle owners, railway premise owners, infrastructure owners, or long-term leaseholders of the railway lines, whose operations contribute to the safe operation of rail activities are set out in this new bill. The bill places a duty on rail participants to take all reasonable steps to ensure that none of the rail activities for which they are responsible causes or is likely to cause the death of, or serious injury to, individuals, or significant property damage.

I heard Mr Sowry say that we are introducing draconian measures, and that these measures are unreasonable and are not spelt out. Well, I say they are spelt out, firstly in clause 6, for the benefit of rail participants—the owners of the various sections of the rail system. Rail participants must take all reasonable steps to ensure that none of the rail activities for which they are responsible causes or is likely to cause the death of, or serious injury to, individuals, or significant damage to property. Why should they not take those steps? It would be extraordinary if we changed the legislation and said they should not worry, because it was all right just to keep on killing people. Then in so far as rail personnel are concerned, a rail participant may not do or omit to do anything in respect of a rail vehicle, railway structure, or railway premise if he or she knows that act or omission will cause or will be likely to cause the death of, or a serious injury to, individuals. If somebody knows that something will kill someone and does nothing about it, why should that person not be held responsible? That is the problem with the present Act: those people cannot be held responsible.

I urge all members to support this bill. It makes sense, and it represents an important improvement in the health and safety of rail employees, as well as the travelling public. It also introduces significant financial penalties, and even jail terms, for serious neglect of safety measures.

I first became aware of the failures of the present legislation surrounding the rail system when a tragic accident occurred to one of my young constituents. That is why I am here tonight—to celebrate the progress of this bill. I am sorry that Mr Sowry is not here to hear this, because if he had asked Morgan Jones’ family what they thought about the existing legislation, they would have told him plump and plain, and he would not die wondering what they thought. On 2 July 1994 a 6-year-old boy, Morgan Jones, fell off a gangway leading to a viewing platform on a New Zealand Rail train. He suffered multiple head injuries. He lost a leg, part of the use of one arm, and the sight in both eyes. Is that serious enough for Mr Sowry? It was certainly serious enough for Morgan Jones. What could he claim from New Zealand Rail? He could claim nothing. What could he claim from the Accident Compensation Corporation? He could claim only $43.90 a week. Could he sue New Zealand Rail? No, he could not.Did the agencies of the State take on New Zealand Rail? No, they did not.

I said this to the House at the time: “Despite the requirements in the Transport Services Licensing Act that the railway operators have a comprehensive safety system, virtually every aspect of safety management was shown to be lacking in the circumstances surrounding Morgan Jones’ injury. The basic design of the guardrails was insufficient. There was no consistency in the actual guardrails and parts used, no secondary safety devices, no reliable system of safety checks, and no designated responsibilities among management staff.” That is what the inquiry found, and according to its report the guardrails used on the train would not have met the requirements even for a stationary ramp in a factory under the Factories and Commercial Premises Act of 1981. So even if Morgan Jones had been walking up a ramp into a factory instead of being on a train, the guard rail on the train would not have complied. But because New Zealand Rail was exempt from those safety regulations, no action was taken against it.

Three Government agencies—the Department of Labour, the Land Transport Safety Authority, and the Police—had jurisdiction to investigate the circumstances of that accident and take appropriate action against New Zealand Rail. The Land Transport Safety Authority recommended some safety improvements; that is what it did. No prosecution of New Zealand Rail was mounted, despite the prima facie evidence of negligence and the very serious injuries sustained by Morgan Jones. The Department of Labour and the Ministry of Transport passed the buck between one another. According to the Ministry of Transport, there was scope for New Zealand Rail to be prosecuted under the Health and Safety in Employment Act. The Department of Labour, however, declined to initiate a prosecution, and declared that the accident came under the jurisdiction of the transport legislation. Does that sound familiar?

That is what this law change is about. It is about holding people accountable, and making sure that the rail system in New Zealand is safe. The accident to Morgan Jones and other accidents like it were simply damning indictments of the safety standards of New Zealand Rail. The bracket that Morgan Jones held when he went across that platform did not secure the handrail against upward movement. The bracket was not in accordance with the original design of New Zealand Rail; it had actually been fixed so that it did not work. New Zealand Rail did not have adequate inspection systems in place even to detect that fault. This legislation is meant to make sure that New Zealanders feel safe when they travel on public transport in this country—and rail, we hope, will be an important element in that public transport system.

Most, if not all, New Zealanders will support the measures that Parliament has before it today for the safety of rail operations. Many New Zealanders will know that this country’s record has been shamefully inadequate in the rail system network in recent years. They know that we have to do better than we have done. This legislation is aimed at doing just that. I recommend to the House that we support this bill, get it through as rapidly as we can, and take the steps that are long overdue to make sure that Morgan Jones’ experience is never again repeated in this country on a rail passenger system that should have known better than it did, and should have been an awful lot better than it was.

SUE BRADFORD (Green) : The Green Party welcomes the bill that we have before us tonight. After the shocking record of Tranz Rail, including a series of five worker deaths on the job within 7 months in 2000, we certainly support all moves to make the rail industry safer and its structures more accountable. This bill has been developed within the cooperative working relationship on transport that exists between the Green Party and the Government, and it is on that basis that we wholeheartedly back its introduction.

This bill marks a comprehensive attempt to introduce a sensible and an up to date system for rail safety, in the wake of changes over the last two decades that mean the Government no longer owns, operates, and regulates the railways as it did in the past. Much as some of us would like to turn back the clock on Richard Prebble and his friends, and their selling, rather than saving, of rail, all of us have had, alas, to learn to live with the consequences of that.

The overarching intent of this bill is to fix the problems raised by the ministerial inquiry into Tranz Rail, which reported back in late 2000, and the 2002 Halliburton KBR infrastructure review. While the language of legislation like this can be quite technical and dry, I would like us all to remember the number of rail workers and passengers who have been injured, the workers who have died, and all the human tragedies that lie behind the commissioning of the Wilson inquiry and the Halliburton KBR report, which have led to this legislation. The bill draws together provisions of the Transport Services Licensing Act, the Land Transport Act, and the Railway Safety and Corridor Management Act. It imposes clear duties, and gives the Land Transport Safety Authority clear powers to address safety issues. Those steps are long overdue.

We are about to see a renaissance of rail in this country, and it is appropriate at this time to put forward new safety legislation to replace the disjointed and outdated systems that exist at present. For too many years rail was left to moulder, as it was seen as a dying industry or as just a commercial venture that was not really worth very much attention. We are delighted to be part of restoring the role of rail as a key part of a sustainable transport network for New Zealand. If rail is to carry much more freight and, I hope, a whole lot more passengers as well, we need to have excellent safety systems. More trains and more staff mean less of a margin for error, not more. There can be no compromising on safety as rail is rebuilt.

During the select committee process we will be listening carefully to the submissions. We do have a few areas of particular concern with regard to the bill, and the first of those—shared, I know, by the Rail and Maritime Transport Union and others—is over the way that the penalties provided for in the bill apply equally to rail workers and to employers. I will be looking at that very closely during the hearings on and consideration of this bill, as I do not think front-line workers should ever be put in a position of carrying the can financially, personally, or in any other way for management or governance failures for which their employer bears real responsibility.

On a second matter, the Green Party is particularly mindful to ensure that heritage railway operators, who by and large have a good safety record, are not subject to undue costs. The Government has taken a positive approach to that issue, and we are confident that there will be no problems. I believe that the solutions in this area are likely to be administrative as much as legislative, and that the fears of some small operators will not actually eventuate.

We have also been anxious to ensure that there is a seamless interaction between occupational safety and health systems and the rail safety system. It is important to both that there are no gaps between the two regimes. It is also critical that there is no needless duplication, especially as that would impact heavily on the smaller operators. In addition, many of the heritage operators use a mixture of paid staff and volunteers, and it is important that all parties understand their obligations and are not subject to unnecessary bureaucracy. I understand that the Land Transport Safety Authority and the Department of Labour have already been discussing how the new systems will interface. Again, many solutions will be administrative.

On a final note, I particularly want to draw the attention of civil libertarians and others to clause 73(2), which may otherwise be missed. The bill includes a relatively extensive regime of prohibitions and fines, compared with the present regime. Almost all are necessary for safety. However, we will be interested in the views of submitters on whether clause 73(2) goes too far when it comes to people’s mere presence on a station platform, or to their crossing a rural railway line. We are sceptical as to whether such a broad range of penalties, in addition to the existing powers of the Trespass Act, is good lawmaking.

This bill is really needed. I hope Parliament will work cooperatively to make it the best bill it can be. Those who suffered under the old system deserve nothing less.

HELEN DUNCAN (NZ Labour) : I am pleased to support this bill, which seeks to improve safety so that rail passengers, rail workers, and indeed, even rail freight will not come to harm and can travel safely on our New Zealand railway system. The bill is focused on safety issues, and I commend it to the House.

BRENT CATCHPOLE (NZ First) : I rise on behalf of New Zealand First to support this bill to the select committee. We believe that the uniform safety regime the bill promotes is a good step in the right direction. Without such safety measures, we have seen the occurrence of a number of rail accidents. Jim Anderton talked of one in particular, where a young boy fell through railings and suffered horrific injuries.

The bill, as it stands, does not talk about a minimum standard of service that rail participants must provide. It talks a lot about safety but it does not talk about the service they should provide. This is a weakness, and I hope the select committee will look at it when it considers the bill. The Minister of Transport will be able to make rules to provide for safety in relation to rail participants, and this bill is a good way of ensuring that. But the Minister must ensure that the system he or she is trying to implement does not wipe out the likes of heritage operators. There are a number of heritage operators around the country, and they should be subject to safety measures but not to the extent that they are driven out of the system altogether.

David Benson-Pope: You’re the “Heritage Supporting Party”.

BRENT CATCHPOLE: Well, let us hope the Government supports the heritage operators with this bill as it goes through the House; if not, we will see quite a number closing down—

David Benson-Pope: We would be the last people to disadvantage hard-working heritage operators in this country.

BRENT CATCHPOLE: I think I have the call here. Does the member mind if I carry on?

David Benson-Pope: You can carry on.

BRENT CATCHPOLE: Thank you very much. This bill identifies problems with the current audit and inspection process, by introducing a broader system of safety assessment that is able to be tailored to reflect the participating safety history and the prospect of each rail licence holder. That is very good, but there is no incentive to do this. Some huge costs are listed. They are very prohibitive, and the fines are not realistic. They are way out of proportion to what would be expected, and they are considered to be unfair. We certainly consider them to be unfair.

Another big gap in this bill is the incentive to encourage more logs off the roads and on to rail. The bill does not provide for that. If we look at the real reason that Toll Holdings is trying to purchase Tranz Rail, we see it is not for the rail; it is for the road transport that Tranz Rail operates. It is interesting to note that Tranz Rail is the largest trucking operator in this country. That tells us something: there is no incentive to get goods off the roads and on to rail, which would help to make our roads safe.

Jim Anderton said earlier that the majority of people killed on the rails are workers, but he conveniently forgot that a large number of people are killed at level crossings—admittedly on the roads. This bill does not address the dangers of level crossings and the number of people who are killed in that way. I would like to see the select committee take more notice of that aspect, because it is an area where safety can be improved immensely.

New Zealand First firmly believes that the Government should own the track and provide incentives for competitive operators to run the passenger and freight services. A competitive structure would create more incentives to get the passengers and the freight on to the track, making it a worthwhile prospect. We would hate to see the smaller branch lines continuing to be closed. I would like to make sure that this bill is not so prohibitive that it makes it impossible for those smaller branch lines to operate.

With that, I would like to summarise by saying that New Zealand First will support this bill going to the select committee, provided that the select committee looks at the concerns I have raised and at the concerns Peter Brown raised with regard to rail and the safety of rail.

DAVID BENSON-POPE (NZ Labour—Dunedin South) : I am pleased to rise briefly in support of this legislation and to respond to the specific comments made by the previous speaker about heritage rail operations. As the member for Dunedin South, I am pleased to live in a city, and to represent an area, that has not one but two of the most important heritage rail operations in the country. Arguably, the Taieri Gorge operation is the most important heritage tourist operation in New Zealand. Equally important is the Ocean Beach Railway heritage operation, which is a smaller but none the less very enthusiastic and dedicated heritage restoration group, like so many others throughout the country.

I have had discussions about the concerns that were raised prior to the introduction of this bill—exactly the issues that were raised by the previous speaker. I am confident, from discussions with the Minister—and I have communicated the information to those operations, being aware also that the national heritage umbrella organisation has been involved in the formation of this legislation—that those operators who are so welcome and who contribute so much to this country’s heritage and tourism attraction will not be unduly penalised by this measure, which is consistent with the proper protection of their own workers and volunteers, and members of the public. In fact, I am aware also of the ministerial discretion included in the bill that would allow for particular circumstances to be acknowledged and accommodated.

So I believe that those concerns have been adequately met. I will certainly work to ensure that that is the case, and in supporting the legislation I am pleased to recommend it for further consideration.

JOHN KEY (NZ National—Helensville) : We are certainly in for interesting times in the rail industry, just as this bill is in for interesting times when it goes to the select committee. National will be supporting the Railways Bill going to the select committee, but not without a great deal of apprehension. Why are we in for interesting times? Let me point out why that could be the case.

The Minister said that we are moving away from a vertically integrated operation. He would know all about that, because he has his chequebook out to build Track Co., the Government-owned rail network. The only problem is that when the Minister of Finance sat in front of the Finance and Expenditure Committee and was grilled by my good self about how much money it would cost, he did not have a clue. He knew it was going to cost a whole lot more than the $100 million he pathetically tried to cough up as a figure when journalists asked him. He knew it would probably be more than $200 million—a figure he begrudgingly told a few more journalists a day or two later. But he does not know whether it will cost $300 million, $400 million, or $500 million.

I will tell members the answer. It will be a lot. Do members know why? It is because this Government is not happy with its pork-barrel politics when it comes to just the roads. It is not happy enough dumping Auckland’s roading problems on us, and promoting its own roads in its own members’ electorates. Now it wants to do the same thing with rail.

When this legislation is rammed through by this hopeless Labour Government, I can tell members what will happen. Track Co., a Government-owned company, is going to be caught by its own legislation, the Railways Bill. Does that worry this Government? No, it does not. Do members know why? It is because when this Government has problems with its own, it retrospectively legislates. It does not worry the Government that Harry Duynhoven happens to have crossed the law, because it will hold this Parliament under urgency, and it will change the law retrospectively. That is what it will do. So when Track Co. has all sorts of problems with this hopeless legislation that the Government is going to ram through, then the Government will retrospectively change the law, anyway. That is why it is not worried.

We are in for interesting times, all right. I look at Labour members over there in the Chamber. They are like deer caught in the railcar’s headlights. They do not know what is going on. They do not know who to believe. They are frightened, and I can understand that concern and fear. I look into those members’ eyes and see that they are absolutely terrified. They do not know what is coming next.

I can tell them what is coming next. Lower growth, more unemployment, and fewer Labour members in the 2005 Parliament are coming next. But let us not worry about that. Of course, Labour will buy a few roads from Napier to Gisborne. It holds the Napier and Gisborne electorates. It does not matter that it will cost the average taxpayer of New Zealand hundreds of dollars extra every week. The Government will be propping up some pork-barrel rail politics, but let us not worry about that. That will keep the member for Gisborne and the member for Napier in their seats, and that is all the Government cares about. That is what is in front of us for the rail network.

I would like to talk for a moment about the problems taking place concerning the maintenance of the rail network. Government members may not know of a term “CWR”. Let us test them. They are living experts on everything that goes on in New Zealand. I ask Mr Cosgrove what “CWR” stands for. There is a blank look on those members’ faces. It is like the blank cheques they want to write out to run the rail network. They are all awake now, but they do not know what “CWR” stands for. It stands for continuous weld rail.

Members on this side of the House do their research. We do not just ram through hopeless legislation. We do not just hit, and hope that it will work. We worry about the poor taxpayers. We know who the buck goes to. We know that our people are out there working day and night, up to 80 hours a week, day in and day out, to pay for the hollow promises being made by that Government.

CWR—continuous weld rail—means that at every 12 metres there used to be a join in our rail network, up and down the country, over thousands of kilometres. Labour came up with the bright idea of welding the track all together. That happened under the 1984 Labour Government, which said to weld it all together and not to worry about it. Did I hear someone ask whether the track had been stress-tested, or whether Labour had thought about what would happen when the heat was up?

Well, the track buckled—just as Labour will when it comes under pressure, and it is under a lot of pressure when it comes to the foreshore and seabed. But we should not worry about that. Labour is under so much pressure that it is seeing its majority swept away just as the sands of time are swept away on our beaches across the country. That is what is happening. Anyway, the rail network buckled. It buckles at temperatures of 32 to 33 degrees. If someone had asked me about that 12 years ago, it would have saved the country hundreds of millions of dollars, but no one asked so I did not tell them. The rail network buckled, and now hundreds of millions of dollars will have to be spent. That is the kind of work that will take place when Track Co. owns the rail network. That is what will happen to bridges and the track network up and down the country.

I return for a moment to the Wilson report, which is the foundation of this legislation. The Wilson report will redefine who the rail participants are, and who, therefore, under this legislation needs to come up with a safety plan. It is quite an extensive and long list, as one would expect from such prescriptive legislation. I am hoping that that wonderful Transport and Industrial Relations Committee, chaired by Helen Duncan and attended by my good self, the Hon Roger Sowry, and Deborah Coddington of the ACT party, will be able to whip a bit of sense into this legislation. [Interruption] No, Clayton Cosgrove is not on that select committee; he is on one of the other ones.

Under the legislation, what is a rail participant? It is an infrastructure owner. No. 1 on the list is Track Co. It is the infrastructure owner. That is right. It is the Government-propped-up-by-votes rail network. That is the long-term name.

I do not want to digress, but I do want to make a comment for a moment about the way in which the Government has put that particular thing in place with Toll Holdings.

• Debate interrupted.