Hon ANNETTE KING (Minister of Justice) : I move, That the Summary Offences (Tagging and Graffiti Vandalism) Amendment Bill be now read a second time. This bill seeks to amend the Summary Offences Act 1981. It creates a specific offence of graffiti vandalism, prohibits the sale of spray-cans to people under 18 years of age, and compels retailers to physically restrict access to spray-cans. The bill is designed to complement the wider legal framework to manage graffiti vandalism. It establishes a specific new graffiti vandalism offence—section 11A, in clause 4. The bill consequently amends section 33, “Billsticking, defacing, etc.”, of the Summary Offences Act by removing reference to defacing. The bill is thus clear that the offence relates specifically to graffiti and tagging, although still including defacing. Penalties under the new offence include a community-based sentence, or a fine of up to $2,000, or both.

The Law and Order Committee has recommended several changes to the bill. I commend the committee’s work, which has resulted, in my view, in a stronger bill. Reference to damaging property has now been added to the graffiti vandalism offence, to indicate that tagging should be considered damage. This makes it clearer that the bill does not limit or diminish the ability of the police to charge people with the offence of wilful damage, under section 11 of the Summary Offences Act, or with intentional damage, under section 269 of the Crimes Act, for more serious graffiti damage. The penalties for these offences are stronger than those proposed in the bill. I wish to emphasise, however, that I believe that the new offence option of a community-based sentence, whereby the offender can be involved in cleaning up graffiti vandalism, will be used most often and will be the most appropriate and effective penalty for most offenders.

When introduced, the bill did not include any offences for possessing tools that could be used for graffiti vandalism. This precluded police action prior to a graffiti offence having been committed. The bill now makes it an offence to possess implements that could be used for graffiti vandalism. A person can be charged if he or she does not have a reasonable excuse for possessing an implement in circumstances where it can be reasonably inferred that that person intended to commit a graffiti offence. This enhances the ability of the police to take action in order to prevent damage to property before it occurs. The bill gives judges discretion about whether the offender pays a fine of up to $500, or completes a sentence of community work, or both, for the offence of possessing tools. Thus the possessing offence, appropriately, has a lower penalty than the actual graffiti vandalism offence.

Submissions on the bill noted that there was some uncertainty about what was expected by the provision that spray-cans must be secured in shops. Some people took it to mean that spray-cans must be kept in locked cabinets. That was not intended. To clarify the intention, the bill now reads that access to spray-cans in shops should be restricted. This should make it clear that shopkeepers must simply physically restrict access to spray-cans, so that the public cannot access them without the help of staff. I trust this change allays some concerns about retailers’ compliance costs, in that they will not be compelled to provide locked cabinets. I do believe, however, that it is appropriate to require shopkeepers to take measures to prevent spray-cans from being readily stolen from shops.

No specific agency has been given responsibility for enforcing the bill’s provisions, and this is consistent with other provisions in the Summary Offences Act. A key feature of effectively enforcing the bill is keeping enforcement responsibility flexible. It is important that either the police or territorial local authorities can potentially enforce any part of the bill, as appropriate, while having primary responsibility for enforcing certain parts. This flexibility will enable local prioritisation, collaboration, and alignment of enforcement between the police, territorial local authorities, and any other Government agency that may wish to enforce provisions or to take actions under this bill. Operationally, I expect the police to be the primary enforcement body for the graffiti vandalism offence. I expect that spray-can sales and restriction measures will largely be enforced by territorial local authorities, with supporting police action where appropriate. This aspect of the bill fits more appropriately with territorial local authorities’ regulatory functions, and provides a mechanism for them to contribute to the prevention of an offence of which they are often the most significant victim.

I take this opportunity to signal my intention to introduce a Supplementary Order Paper to the bill. The Manukau City Council (Control of Graffiti) Act was recently passed. I commend the Manukau City Council leaders for developing that Act, and the Hon George Hawkins for proactively introducing and progressing it, for the benefit of the people of Manukau. The Act contains a range of provisions to address the Manukau graffiti problem that are broadly similar to those in the bill that I am currently addressing. Although the Act is certainly a good thing for Manukau, I believe that it would be inappropriate to retain it should this current bill, which provides consistent responses to graffiti vandalism across the whole country, be passed. The existence of both pieces of law is likely to cause confusion and inconsistency in Manukau around which piece of law is to be followed, and to lead to offenders in Manukau being treated differently from offenders in the rest of the country. It is logical that national law should supersede local law that addresses exactly the same problem. But we must commend the Manukau City Council for bringing in a local bill to set in course some action. I therefore believe that the legal framework would be simplified and strengthened if the Manukau City Council (Control of Graffiti) Act was repealed upon the passage of the Summary Offences (Tagging and Graffiti Vandalism) Amendment Bill. Consequently, I intend to introduce in the Committee of the whole House stage a Supplementary Order Paper that repeals the Manukau City Council (Control of Graffiti) Act.

To conclude, I want to make it clear that this bill forms only part of a comprehensive strategy that the Government is developing to combat graffiti vandalism. The Government has agreed that the core content of the anti-tagging strategy—the Stop Tagging Our Place (STOP) strategy—is a very important part of it. This strategy will include a range of strategic and operational responses to the graffiti problem, in addition to this legislative response. The Government has also backed the STOP strategy with $6 million of funding over 3 years to support local communities and councils to establish new or additional anti-tagging activities. The Government expects the STOP strategy to be finalised by July this year.

This bill will create a clear graffiti offence, stop spray-can sales to under-18s, and restrict the physical availability of spray-cans in shops in order to avoid theft. It forms an important contribution to the STOP strategy. I commend the bill to this House, and thank the members of the Law and Order Committee for the very constructive work they did on improving this bill.

SIMON POWER (National—Rangitikei) : I thank the Minister for her concluding remarks. The Summary Offences (Tagging and Graffiti Vandalism) Amendment Bill was one of those bills on which, when it went before a select committee, members formed the view early on that there were some major holes surrounding the way it would be enforced. In particular, our view was that the controls on the actual sale of a spray-can and the way it was secured in the shop that was selling it would not be enough to deal with the potential criminality that would flow from the sale and purchase and subsequent use of a spray-can or other tagging device.

I was interested to hear the Minister say—and this is the first of my points—the Government intends to introduce a Supplementary Order Paper to repeal the legislation George Hawkins was in charge of, the Manukau City Council (Control of Graffiti) Act, during the Committee of the whole House. I think that is appropriate, in the sense that having laws that work area by area when an alternative national approach is available—and that is an important qualifier—is not a useful suggestion. I note also, from memory—and I stand to be corrected by the next Government speaker if I have this wrong—that the legislation the Hon George Hawkins was in charge of did not include a possessory offence. The Minister is nodding, so I will take it that is her understanding of that legislation, as well. I think that would have left Manukau in a very difficult position, because there would have been one law for Manukau and another for the rest of the country. Presumably, if statutes that are specific rather than general take priority in an application, we would have had the curious situation where a well-intentioned local bill may have been less effective than a national bill. I do not believe that the Hon George Hawkins would like to see that occur. However, I would be interested to hear during the Committee of the whole House what Mr Hawkins has to say about the application of the more general bill to the specific circumstances surrounding graffiti—the application of this particular legislation—in Manukau.

The Minister raised a really interesting point about the different enforcement roles of the police and territorial authorities, and in particular about the regulatory checking function that a territorial authority would have in order to ensure that retailers were meeting their obligations as to the security of cans that were contained in the original bill. Now, of course, the bill refers to a lesser standard of cans simply being stored in such a way that members of the public cannot obtain possession without the help of the occupier. I want to come back to that, because that particular clause was not without controversy at the Law and Order Committee.

I just return for a second to the difference between the role of the territorial authority and that of the police. What we did not want, as members of that committee, was to have the police tied up in checking dairies, shops, and hardware stores throughout New Zealand to see whether spray-cans were being secured properly. They have far more pressing issues on their minds, as this House has heard from members on both sides many times over the last 2 or 3 years. Rather, the territorial authority may be in a better position to deal with what we would call first-instance compliance issues. Then the police would take an enforcement measure or an enforcement role at the point where it became clear that the smaller compliance issues were not being met. It is really important that we do not lose sight of the differing responsibilities that the bill puts in place.

I just make this significant point. This bill is not the answer to graffiti, actually. I am sure those parties that are opposed to this legislation will have the view that regardless of the intent of the policy, perhaps the legislation has not been drafted in a way that will ever be regarded as comprehensively dealing with this issue. But National will support the second reading of this bill, because we believe it is a step in the right direction. We are keen to look carefully at amendments and improvements that may be offered during the Committee stage, and we will do that with an open mind. But at this point, we are supporting the second reading.

We are pleased to note that the select committee, under the guidance of the chairperson, included a clause that made it absolutely clear that the remedies available today to the police and the public under the Summary Offences Act and the Crimes Act are not to be overridden. It was always our argument with regard to the putting forward of legislation on graffiti that existing mechanisms in the law could actually be used to deal with some of these problems to a point. So this particular bill should be seen as being complementary to those existing provisions, which, I have to say, create much harsher penalties for the more hard-end use, I guess, of graffiti implements. In this bill, the possessory offence proposed by the committee has a fine of up to only $500. That is because the nature of the proposed offence is a wide one, and that provision, if used inappropriately by the authorities, could capture a wide net. When the definitions are looked at closely, we see the penalty suggested by the committee is appropriate. Otherwise we would get ourselves into a very difficult situation indeed.

National does remain concerned about the practicalities of the implementation of restricted access to spray-cans in shops, and we make that statement in the debate on the report back to the House today. Originally, the bill provided that spray-cans had to be secured, and the Minister was quite right when she said that meant retailers envisaged having to expend a considerable sum of money to run out and buy lock-secured cabinets for these particular spray-cans. We heard evidence from the Retailers Association that if that were the case, the lead-in time of 3 months offered in the bill would be insufficient for retailers to react to that proposed new standard for the securing of spray-cans. So that particular issue of secured spray-cans was changed in favour of a recommended amendment to indicate that access to spray-cans in shops should be restricted. What the committee meant by that was that it was sufficient to make clear that the occupier of a shop would be required to keep spray-cans where the public could not access them without help from a staff member. That is quite different from keeping them in a locked cabinet.

That meant the committee formed the view that the lead-in time of 3 months was appropriate. I do think that is the case, because the last thing we need to do is to pass legislation that was rushed through the first reading and went to the select committee for a very short period of time, and then to say that Parliament has done this in a very quick and driven manner but that we will wait 6 months until it is implemented. I do not think that would have been satisfactory in terms of the Government’s so-called Stop Tagging Our Place strategy or of common sense when it came to applying these provisions.

Some things remain to be done during the Committee stage. I am sure that amendments will be offered around the definition of the possessory offence. Now that the Minister has indicated a Supplementary Order Paper will be put forward so that this bill overtakes Mr Hawkins’ legislation, I am sure discussion around the way those two pieces of legislation are married and what that means for the Manukau City area in particular will be the subject of debate during the Committee stage. But at this point National will support the second reading of this bill.

I close by endorsing the comments of the Minister. I thank the chairperson of the select committee, Mr Ron Mark, for enabling discussion to broaden in a way that enabled the committee to suggest and include the possessory offence, which I think is probably the crucial difference between this bill and the one offered earlier this year to deal specifically with the graffiti issue in Manukau City.

Hon DAVID BENSON-POPE (Labour—Dunedin South) : I rise to take a brief call. I begin by thanking the preceding speaker for the positive and constructive way in which he and his colleagues addressed this issue. I think most members of the House and the wider community would agree that tagging—let us not be too forgiving of tagging—is nothing other than a form of vandalism. Acceptable street art or graffiti is quite another matter in the appropriate place, and one of the things we have done is focus on this form of vandalism and property damage. Most members of the House and the community would agree that tagging is not just an offence against individual property owners. It damages our communities both in respect of the visual and aesthetic problems and in terms of, at least, perceptions—and, probably, more than that—about people’s safety.

We care very much in this Government about developing, supporting, and empowering strong welcoming communities in which people’s rights are respected and upheld, and I think this bill in its amended form—and in whatever form in which it emerges from the Committee stage—will empower communities right across New Zealand to eliminate this most unfortunate and undesirable practice.

One of the earlier speakers—the Minister, in fact—talked about the desirability of seeing those involved in this practice, mostly young people who are mostly young males, out on the streets cleaning up their handiwork and that of others. That is highly desirable, and I have yet to hear anyone criticise or object to it.

As members know, the Government’s initiatives do not consist of just this one bill. This bill is part of our Stop Tagging Our Place (STOP) strategy, and that strategy is about discouraging tagging, at the same time giving local government and community groups the tools they need to help clean it up and discourage young people from doing it, or rather to encourage young people to make a more constructive contribution to their communities.

We acknowledge the wide support in the community that this bill has received. It has support from local government, from community and business groups, and from other non-governmental organisations. I guess that is evidenced in the change of attitude we have seen about this sort of activity. That has not happened just in the community. We have seen it reported more recently in the changes of attitude of the judiciary to the seriousness of this nascent behaviour, which leads on to much worse and much more serious antisocial behaviour. We should all welcome that attitude change, but certainly there is very little disagreement about the unacceptability of tagging.

Most people would agree that there is no confusion over what tagging is. It is clearly just territorial marking, very similar to the behaviour of tom-cats. It is no more nor less that sort of territorial behaviour. We saw some of the most undesirable forms of tagging a year ago or more in some of the street behaviour in other parts of the country.

Members will be aware that this initiative is part of a $6 million funding initiative over 3 years for anti-tagging and anti-graffiti vandalism initiatives, including grants for community groups for their own anti-tagging initiatives, a fund for local government programmes, funding for restorative justice programmes, targeted law enforcement by police in tagging hot spots—including the 250 extra community police officers who will be in the force by 2009—and the establishment of an expert community advisory group.

Just before I close I would like to publicly acknowledge the efforts of those people who have already been well and truly on the case. I refer not just to some very extensive initiatives run mostly by local government and other community groups in a number of our main centres, but also to commercial operators—paint recyclers, and so on—who have taken the trouble to do not just the correct environmental thing by picking up their own product, but who have gone a step further and distributed that product, grey and all as it might be, to the groups that are out correcting this sort of damage.

The other matter that is important, and to which the Law and Order Committee has made improvements, is in respect of the widening of the kinds of implements referred to. As members will be aware—and if they are not, they should look at the detail—this provision no longer talks just about spray-cans and their availability; it actually talks about the issues around the use of other implements. I do not need to be more specific, but it is not just felt and vivid pens, which also cause a lot of damage in public places around the country that is very difficult to erase.

I commend the bill to the House. I think it is significantly improved. I look forward to the ongoing discussion and refinement, if necessary, in the Committee stage.

JUDITH COLLINS (National—Clevedon) : The members of the House who are interested in this issue will recall that I often spoke on the Manukau City Council (Control of Graffiti) Bill, which is now an Act, and which was first introduced by the Hon George Hawkins in November 2005. There is a reason for that. I am a South Aucklander by choice. I prefer to live and work in South Auckland, and paying rates to the Manukau City Council makes me extremely aware of the cost of graffiti, certainly in terms of money. Living in South Auckland means that I am fully aware of the effect that graffiti has on the 98 percent of people who live in the South Auckland region who are very good people, but who, unfortunately, so often have their landscape absolutely destroyed by taggers.

I do not subscribe to graffiti being art. I do not subscribe to the view of the Children’s Commissioner, and others of that thinking, that graffiti is some sort of resistance-type statement and is therefore legitimate; I think it is vandalism. It is destruction of property, it is destruction of the environment, and it is destruction of people’s peace of mind. In Papakura, there are areas of lovely woods. Kirks Bush is lovely bush that is very close to the centre of town. If members go through there they will see that the trees have been graffitied. How could this possibly be some resistance-type art work? What rubbish! I think that most New Zealanders—most young New Zealanders, most old New Zealanders, and most middle-aged New Zealanders—feel threatened by the presence of graffiti. The reason is that it is actually about marking out territory; it is about saying “We don’t care about you. We expect respect from you but we’re not going to give you any back.” That is the sort of nonsense that goes on in the minds of those who commit these crimes.

We have waited an awfully long time for this bill. The Labour Party promised in its 1999 manifesto that it would get tough on the issue of graffiti. It said that it would have a restorative justice programme in which “young offenders and their families can opt for community work, e.g. cleaning up graffiti, as an alternative to prosecution.” That is what Labour said. It is now 2008 and we finally have a bill before the House. What made that happen was that the Manukau City Council became tired of waiting for something to happen so that these young offenders and their families could opt for community work—for example, cleaning up their graffiti—and it said it was going to do something about it, and it brought forward a bill.

The only thing that I can really see wrong with the Manukau City Council (Control of Graffiti) Act is that it did not include other areas. However, I thought it was a great first start and I was very pleased that my party was able to support its passage right the way through the House. I do not agree with the people who say there is no need for legislative change. The reason for that is that until this Parliament signals that it takes graffiti seriously, then why should judges? I am absolutely certain that the few cases that have been very recently noted in the newspapers—I think from places like the Hawke’s Bay, where graffiti artists or taggers have been dealt with in a very sensible way, in the opinion of most people—reflect society’s views about what is happening to our communities. People have said that they have had enough of being told by liberal-type people that this is some sort of art.

Metiria Turei: Ha, ha!

JUDITH COLLINS: They have had enough of being laughed at by people who think they are too good for the ordinary Kiwi. People are sick of being laughed at by people who do not care about the people who pay the bills—in other words, the taxpayers who live decent lives and who go about their business causing no harm to others, but who get terrorised by these people. I find it very interesting that the Green Party member, Metiria Turei, finds it so funny. I do not think she would find it so funny to have graffiti all over her driveway, as some of my constituents have. Would she find it so funny to have graffiti all over her letterbox, then to have it smashed down as some of my constituents in Papakura have? I am sorry that she finds this so funny, because I think it shows just how out of touch the Green Party is, and that member in particular. It is absolutely appalling that she finds it funny. I do not think it is funny at all. In fact, the people of Papakura do not think it is funny at all, either.

Not long after I became a member of Parliament the police in Papakura instigated a scheme whereby they picked up these young taggers and got them to clean up their tagging. The police put these young taggers in nice orange outfits, which was, of course, for occupational safety and health reasons so that they did not get run over, and got them cleaning it up. One day a Queen’s Counsel came through town. We do not get too many Queen’s Counsel wandering through Papakura unannounced, but she came through. She lives in the city and is a very flash person. She looked at this scheme and, as a human rights expert, she was horrified and she made a complaint. It was all over the Sunday Star-Times newspaper. The poor old Papakura police were told to shut the scheme down and that they were not to have it going on. I can tell members that there is no way the people of Papakura are putting up with that nonsense. We recently had a law and order march in Papakura, and that was because we like the police. It is the police who are the people who help to keep Papakura safe.

Until we pass legislation that states that we expect the police to do something about tagging, and that we are going to back them over these namby-pamby types who do not have to live in the real world—who simply want to live in some sort of dreamland—we will not get any different reaction from the police because they have priorities. People can talk all they like about more police around the place, but that is because we have more crime. If people want to look at the figures relating to the increase in violence, they need just to come to our patch to see what is happening. It is incredibly important that we give the police the message that we will support them, that we will not go all silly and namby-pamby and go and back some little tagger and his or her parents just because we cannot be bothered to support the right thing, and because we are frightened of a bad headline. We actually have to say to the good people of places like Papakura, Manukau City, Porirua, Tokoroa—all those sorts of places—that we will back them. I know that there will be a cost to some of the shopkeepers, but I tell the House that many shopkeepers in Papakura already do this; they lock away these paint products. They do it because they care. They care about a good environment and they care about a good community. They will be pleased with this legislation when it goes through, because they do not want to be party to the sort of vandalism that has become, unfortunately, almost the norm in many parts of this country.

This is vandalism by the few, and it is actually a brutality on the environment. The very people who will go around calling themselves “tree-lovers” will be very happy to see graffiti on trees, as long as it is not on their trees. Well, I am here to tell them that we will not put up with it and that we will back our people—the good people of the area. We will back the police, and we will not stand by and say that it does not really matter. National will support this legislation because it supports the good, law-abiding people who want to live in a good community.

RON MARK (NZ First) : I rise to speak on behalf of New Zealand First on the Summary Offences (Tagging and Graffiti Vandalism) Amendment Bill. As the chairman of the Law and Order Committee, I thank the committee members and congratulate them on the way in which they worked on this bill. I know that committee members the Hon David Benson-Pope and Simon Power have already expressed such thoughts, but I wanted to add to them because I truly did appreciate the work of the committee and the way in which the members took on this task.

It saddens me just a little that Kate Wilkinson was not here to take the first call for the National team. Kate and Chester Borrows were both on the committee, but they have not spoken. That is a little disappointing. I see that Judith Collins, who was not on the committee, has taken a call, and I am just wondering whether Kate is off crook, or something. I know she was off crook recently with the flu. I hope that is not the case, and that she will be able to make a contribution later on at the Committee stage, because she does understand the bill and will be able to speak to it, as opposed to the wider issues that the committee confronted.

I know that previous speakers have canvassed all the issues, and, specifically, the issues in respect of charges, the amendments we made, and the question of possession. I want to give credit where it is due, so I give credit to Chester Borrows, because at a very early stage he saw a deficiency in the bill in respect of possession. I guess it was the old cop within him. The committee very quickly turned its mind to that matter, on that initial prompt from Chester.

A number of submitters came to the committee. The local government sector was strongly represented by the Manukau District Council, the Christchurch City Council, the Auckland City Council, the Papakura District Council, the Waitakere City Council, to name a few; other councils included those from Wanganui, Upper Hutt, Wellington, and Hamilton, and the Far North District Council. They made very, very clear to the committee what the cost of cleaning up tagging was.

The committee received a representation from Local Government New Zealand. We were surprised that the organisation did not appear to have at its fingertips a consolidated database of all the issues that the district councils and other councils were raising severally. It would have been nice to have accurate figures on precisely how much money ratepayers are spending nationwide to deal with tagging and graffiti.

Mark Blumsky: Millions.

RON MARK: We know that it is millions of dollars. The Wellington City Council gave us its figures; so did the Wanganui, far north, and Northland councils. We came away with the view that the figure is in excess of $10 million.

So often in this House we hear members from political groups of a certain ilk rant, rave, and chastise the wider House for not spending more money on social initiatives in their districts and in their communities. The councils are chastised and criticised for not contributing. Let us pick an example: providing artistic opportunities for young people to display their skill. Just imagine how many artistic opportunities we could give young people, in properly constructed venues and with prizes, if we had $10 million to spend. Just imagine how much positive work we could do with young people, helping them to express their artistic ability in the right forum, in a constructive way, and in a way that could be recognised, with $10 million. But we cannot do that, because certain people believe that young people should be allowed to do this sort of thing willy-nilly, all over the street, and anywhere that takes their fancy. That figure of $10 million is a conservative estimate, because, as I said, Local Government New Zealand could not give us a consolidated figure. The councils are spending in excess of $10 million of ratepayers’ money the length and breadth of this country, just to clean up tagging.

If the cameras in the House were able to focus in on the photos I am holding, which came from one submitter, they would show the sort of nonsense I am talking about. This is not an example of artistic ability; this is scrawl. It is the equivalent of a dog peeing on a fence, or, in this case, on the garage door of an elderly couple—the lady is aged 60 and the gentleman is aged 70. We need to keep our minds focused on that.

Two submissions stood out for me, as chairman. Submission No. 3 was from Judi MacKenna from Mount Maunganui. I will read out part of it: “My husband and I are both New Zealanders who have both worked from age of 15 to retirement. Between us we have raised eight children and have made a significant contribution to our country. We bought a piece of commercial land and constructed a commercial building. My husband ran a very successful business, whilst I worked 5 days a week for a legal firm, and Saturday with my husband. We constructed our building with Colour Steel as this was a no maintenance product.

Over probably the last six or seven years we have had on going problems with Graffiti or Tagging. My husband is in his late 70’s and I am in my late 60’s, and trust me spending our Sundays cleaning Tagging off our building has made us form some very strong opinions of how Taggers should be dealt with. I dislike the idea that we have to penalise the general public for the sake of minority groups but see no other way to deal with this other than the banning of spray-can sales to under 18’s. We would certainly like to see Taggers made to clean up their tagging and do community work.”

That submission stuck with me. When the committee discussed the bill, I sought an amendment to make community service an option for the judiciary when sentencing these offenders. Quite frankly, given the $750 million - odd of outstanding fines, it does not make a lot of sense either to me or to New Zealand First to be giving anyone a fine for tagging, if it can be avoided. It is much more preferable to have offenders out on the streets on Saturdays—when they would like to be watching the Super 14 or doing whatever—cleaning up their tagging. That is what this bill now allows.

Another submission stood out to me. We have heard people in this House profess to speak on behalf of young people who want to demonstrate their artistic ability all over the land. This submission was wonderful because it came from Wanganui Girls’ College students in years 9 and 10. They said: “Our submission is in support of the Tagging and Graffiti Vandalism Amendment Bill. We represent two classes—a total of 45 students. In addition we have consulted with the Wanganui District Council staff about their draft policy statement on graffiti.” We often hear our elderly folk say things like “Out of the mouths of babes oft come words of wisdom”, and we would do well sometimes to listen to some of these wise young people, because these girls have quickly identified some of the things that the critics of this bill have not identified. First, the bill does not claim to be the be-all and end-all silver bullet that will end tagging problems; it is but one tool. The submission goes on to say that education should be encouraged—”Education on the negative effects of graffiti” on people. It also says: “Strict rules on truancy should be in place because of a possible link to tagging and graffiti.” And they emphasise the need for truancy officers to be more vigilant and for schools to be more vigilant.

How refreshing that young people do not see the bill as a direct attack on young people. How refreshing that they should identify that the bill is but one step that needs to be taken, and that other steps should be and could be taken. How refreshing that they condemn tagging, that they promote graffiti under supervision at organised events, and that they have the courage, the wisdom, and the confidence to come to this House to make their representation as young people from Wanganui Girls’ College. I pay my respects to them and thank them for helping the committee with the work it has done.

NANDOR TANCZOS (Green) : The Summary Offences (Tagging and Graffiti Vandalism) Amendment Bill was a shameless piece of electioneering when it went into the Law and Order Committee, and it is even worse now it has come out of it. In fact this debate has been all about the fact that we do not like tagging, and there has been very little explanation of how this legislation will stop tagging effectively or stop people from simply moving on to other antisocial activity.

I and the Green Party were criticised quite heavily in the media for opposing this legislation, not because anyone thought it would be effective but because people somehow thought it was outrageous that we should think that Parliament should spend its time passing legislation that works and actually does something. We think the law should not be about sending signals to young people but should be about putting into place effective and good legislation. Just for the record, I say the Green Party does not like tagging any more than anyone else does; we just do not agree with passing over-reactive law, especially if it will be entirely ineffective. In fact, even the most sympathetic media commentators have said this legislation would not make any difference—it is all about sending a signal. That surely should not be the business of the House.

The bill was bad when it went into the select committee; it was even worse when it came out of it. Amazingly, the select committee managed to make the bill even worse than it had been—even worse! So who are the people on the select committee, I have to ask? Ron Mark is the chair of the select committee. This is what we would expect from Ron Mark, but what about the others: David Benson-Pope, Chester Borrows, Martin Gallagher, Darren Hughes, Simon Power, and Kate Wilkinson? Those people should be ashamed of themselves. I think it is important for the public to understand who was on the select committee, because the amendments to this bill are something to be ashamed of.

Let us look at the amendments. First of all, the select committee has added a whole new dimension by saying it will now be an offence to carry things like a marker pen, a can of paint, a bottle of glue, or even car keys if it can be inferred that the intention is to mark something. I was surprised to hear that Mr Borrows was the motivator of this amendment; that is what Ron Mark said during the debate. I was surprised at that, given Mr Borrows’ usual concern about just process. We have to ask what is meant by “inferred”. How do we infer that the intention is to use something to commit an offence? There is no indication in the bill or in the commentary on it of how that is to be inferred. I guess the select committee chose the term “inferred” because it carries some vague notion of evidential support. The danger is, of course, that it risks turning lawyers into philosophers, and some obvious ungulate analogies spring to mind—notwithstanding Mr Borrows’ multiple lives. Or perhaps, given that he is now a National member of Parliament, that proves the point.

But in any case, having found someone to be in possession of a felt-tipped pen, how will the police infer that that person intends to use it to commit an offence? How could they tell that? What evidence will be adduced to prove that point? Judging by the comments in the debate through the various stages on this bill, the person’s age will probably be a factor. Unlike other elements of this bill, that amendment does not restrict possession of those items to people over 18; it says anyone will commit an offence if it can be inferred that he or she is going to use the item to commit an offence—to mark something. However, being young would appear to be a predisposing factor to criminality, according to some members of this House—

Phil Heatley: Driving while black.

NANDOR TANCZOS: Mr Heatley says: “Driving while black.” What about clothing? Is wearing a beanie circumstantial evidence that a person is likely to commit an offence or intends to—or the wearing of provocative trousers, or a predilection for unsavoury musical tastes, such as a liking for hip hop? What about hanging out with friends after dark? Surely that is a deeply suspicious activity? What about transportation? If someone rides a skateboard or owns a pimped-up ride, surely that is all evidence that can be used to infer that the person is trying to commit an offence with a felt-tipped pen—that he or she is going to use the felt-tipped pen for a nefarious purpose? It is a bit hard to see what else we could suggest to use as evidence. It is hard to figure out what we could use to infer that the possession of a crayon is evidence that it is intended to be used to commit an offence under the legislation.

Of course, the real issue is that the provision is actually quite a significant breach of a fundamental legal principle: it introduces a balance of probability standard of proof into the criminal law. That is really what it does, and that is why I am surprised Mr Borrows put it forward. I am surprised he supports that. I say shame on the select committee amendments. It is a shame that select committee amendments do not need to be vetted under the New Zealand Bill of Rights Act. It would be interesting to see what Crown Law had to say about this amendment, especially because it is—which I think is quite a significant breach of a legal principle—in the words of the committee, to be used to address “minor offending”. This amendment is about addressing “minor offending”. Well, is that a good use of a legislative power? I do not think so.

Mr Benson-Pope said in his speech that we should make a distinction between tagging and vandalism and things like graffiti art. I heard that during the debate as well—that there is a big distinction between graffiti art and tagging, and that we all like graffiti art because it is kind of hip but we do not like tagging because it is kind of ugly. But this bill is not about tagging. If members look at the bill itself, they will see it states every person is liable who “damages or defaces any building, structure, road, tree, property, or other thing by writing, drawing, painting, spraying, or etching on to it, or otherwise marking it.” The Good Water Company recently did a promotion that promoted its product by using a water blaster and a stencil to blast its company logo—it cleaned the pavement in the shape of the company logo. That would actually be in breach of this legislation, because the company marked a thing. This bill is clearly not just about tagging; any kind of activity that marks anything without the consent of the owner is in breach of this legislation. I think that is serious.

Everyone agrees that we want to stop tagging. Even though pretty much everyone seems to agree this legislation will not do that, there are things that we know will help to reduce tagging. There are models all over the place. Members just need to look at Billy Graham’s boxing academy to see something that has a proven record in reducing tagging and other kinds of antisocial crime. The issue is not just about tagging. If we stop tagging without addressing its causes, people will just move on to something else. The issue is about making an investment in our young people. I do not mean just an investment in terms of dollars; I am talking about an investment in terms of time and energy.

We seem to have lots of money for anti-tagging measures and for paying for all those kinds of things, and lots of time for a legislative futility such as this bill, but why do we not put the same kind of effort and resources into our young people? Ron Mark talked about the $10 million that we would have available to spend on young people’s art expression if we did not have to spend it on cleaning up tagging. If we were not cleaning up tagging, I somehow doubt whether we would spend that $10 million on artistic expression for young people. But in any case, it is a kind of chicken-and-egg scenario. It is like the situation regarding preventive health measures. Oh, we say we will not spend money on preventive health, because we have to treat people for obesity-related diseases. That is a pointless argument. One has to put the money in at the beginning; it is a preventive measure.

That is why the Green Party says that it will not support futile legislation that will have no real effect. This bill is simply about election sloganeering, and sending a signal to the public that we care about tagging. We will support initiatives that will actually make a difference and that will invest in our young people.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Tēnā koe, Madam Assistant Speaker. Tēnā koe to Nandor—that was a choice kōrero. While Mr Tanczos was speaking, one of my colleagues in National made a quip about how one could have got arrested “Black while driving” in the US. That was just a passing joke, but I recall one of the things that Ngā Tamatoa raised back in the 1970s. There was a law on the books right up until the 1960s in this country whereby one could be arrested for being out at night with one’s face darkened. It did not say anything about artificially darkened, either. Apparently it used to be an old English law to stop people from putting soot on their faces and going out burgling. It was a law used to arrest Māori in Auckland if they could not think of any other reason.

I do not mind saying right up front that I am not a fan of tagging—none of us are—not today, not yesterday, not tomorrow. It is ugly, it is offensive, and makes one’s town look like crap. People do not want to stop in those towns, because they see the existence of tagging as a clear mark of the existence of crime. I personally do not mind some of that cool looking stuff like they did for Sir Edmund Hillary, but I do not like ugly tagging. Up my way, some places really attracted taggers, like the skateboard bowl in Kaitāia and some of the parks in Whangarei. Some of the taggers keep coming back again and again, but the locals are working on trying to overcome it, and involving all sorts of community groups as well as schools, police, etc. I know that Tai Tokerau is pretty much the same as everywhere else in the country with this problem as far as tagging goes, although the Māori Party candidate for Te Tai Tonga, Mr Monte Ōhia, tells me they have a pretty good initiative being run down there by the Kahurangi Employment Trust to keep Nelson tag-free and litter-free by helping the taggers move on.

But tagging is the reaction of the poor to alienation, anger, boredom, frustration, and low esteem. It is pretty basic, really. One reduces tagging by reducing the factors that lead to it: some really complex stuff, such as poverty, poverty—and poverty. But what have we got? We have a bill to fine kids up to 2,000 bucks and to fine people $1,500 for selling spray-cans to under-18s. Just to hear Mr Tanczos talk about kids wandering around with crayons and pens, made me think: I got home in the weekend to find my mokopuna had artistically scribbled all over my sofa; I was thinking that if this bill had been passed I would have rung a cop! But how progressive is that? How intelligent is it? How innovative is it? Guess what—the select committee actually wanted to take it even further to make the penalties even tougher! But I repeat: when the jails are already full, where does one put the taggers?

Chester Borrows: You were not there.

HONE HARAWIRA: One does not have to have been there to know how senseless the recommendations were. One has to ask oneself the question: does getting tough really work? Last night I saw a programme on drugs in New Zealand, and if I learnt one thing from it, it was that trying to bash something out of existence just does not work, and it is the same all over the world. Look at the mess George W Bush has got the whole world into with his “make my day” brand of gunboat diplomacy. Is Afghanistan a better place for the presence of the Yankee war machine? Is Iraq? If the US invades Iran, will that solve anything? Will that stop people hating the United States? Of course it will not.

We in the Māori Party favour the Barack Obama approach, actually—negotiation, building relationships, and dealing with reality rather than dealing out of fear. Because we know that punishment and tougher sentences simply do not work. Take this Government’s current prison construction programme. It has been building prisons all over the place, yet we already know from projections that by the time the last prison is built, every bed in it will already be filled. So what happens to the next prisoner, the next tagger, and the next prisoner? I will tell Mr Mallard what the answer to that is. One just goes and builds another prison, of course! Then when that one is full, and full 2 years out, one arrests somebody else, builds another prison, and builds another prison. That is the lunacy of tougher sentencing. It is a pathway to nowhere.

Where are the programmes to change the behaviour to reduce crime? Where are the programmes to reduce the causes of crime? Nowhere. Why? It is because this Government is committed to the knee-jerk policy-making that is taking us all to hell in a handbasket. We need to stop thinking that stiffer penalties, jail for 12-year-olds, more prisons, and more police powers to chase kids who might be graffiti artists, will actually succeed when all the evidence tells us that it will not. Look at that dickhead of a judge who sent that kid to jail for tagging because the judge thought it was culturally offensive. Culturally offensive! Is that part of the law now? Because it sure was not the law when a bunch of us in Ponsonby and Ōtara went up to the Auckland University and gave those racist fools from the engineering society a bit of a tune-up for having offended Māori and Pacific Island culture for decades. It was we who nearly got sent to jail, when it should have been those boorish, drunken cowards from the mean streets of Remuera.

Culturally offensive! What a bloody joke! That is where this whole thing has gone haywire, because here we are about to criminalise taggers for what is called environmental pollution, while allowing the real polluters of society to bypass the cost of their carbon emissions. How come we let big industry in the form of the agriculture and transport sectors get away with not paying for the cost of their pollution but we will slap our kids down without even blinking? How come the kids have to pay, but big business does not? How come the tagging legislation gets shunted up to No. 1 on the Order Paper, while the legislation to disestablish the Serious Fraud Office gets dropped down to No. 3 and the climate change carbon killers get another 5 years’ holiday?

Yes, tagging is ugly, it is offensive, and it is soul-destroying, but with a bit of paint and a bit of effort one can clean it up. But backsliding on our commitment to climate change like Labour is doing by giving the big polluters a longer holiday, or like National wants to do by getting Australia to take the lead, cannot be just brushed over. If we get climate change wrong, there will be no tomorrow. We will not get a chance to paint over the problem, because we will all be toast.

This bill is an overreaction to a minor problem in our society. It is punitive, it is pointless, it is unproductive, and it represents a paucity of intelligent thought. This bill lacks vision, it lacks courage, it lacks consideration for the consequences of the penalties, it lacks any sense of hope, it lacks wisdom, and for those reasons the Māori Party will not be supporting it.

Hon DOVER SAMUELS (Labour) : Te mea tuatahi māku kei te mihi atu ki a koe te Kaiwhakahaere o te Whare me koe anō hoki e te whanaunga, e Hone, tēnā koe.

[The first thing for me is to acknowledge you, Madam Assistant Speaker of the House; and you, also, Hone, the relative, greetings.]

I was not going to speak on this bill, but I thought I would take a short call. When colleagues get up and speak they make me enthusiastic about their perceptions, and certain things happen—my springboard legs automatically stand up and I take a call.

I am interested in the people who say “Yes, none of us like tagging. We have had a gutsful of it, and blah, blah, blah.” The first thing I want to know is where this word “tagging” comes from. Somebody said that it is an interpretation of some sort of artistic talent—tagging. I looked for it in the dictionary and I certainly could not find that definition. But let me say this. In the old days, if I had wandered around and did some of the things that these people—I will not say young or old—are doing, defacing and destructing private property, I would have got a boot straight up the backside by my old man. I would be scared as hell to come back and say to the old man: “Listen, I went down the road and saw a beautiful fence, and I scribbled all over it with spray paint. Come and have a look at it because I believe it is art. That is the new description for tagging.” Do members know what the old man would have done? He would have said: “Bend over. You’ll get six of the best right on the backside.” That is the answer to that one.

I am very, very interested in these guys who say that they do not want tagging but that tagging is a minor offence. Perhaps it is minor for someone whose property is not tagged. Let me say something for the old ladies or the people who own houses in Epsom and come out every morning, twice a week, and find that their fences have been sprayed with spray-cans, in all sorts of ways. Is there any difference if the same thing happened to a marae in Rotorua or Ngāruawāhia? Members should just think about it. What if our king came out one morning and found that some imbeciles—whatever they thought they were doing, and whether or not it was artistic—had taken a spray-can and defaced the whole front of the marae? I would say that Hone Harawira would be the first—and I would back him up—to say that we should identify who did it and very quickly put him or her in a hāngi, as Shane Jones was saying. Hone Harawira would be the first one to say this. I am saying there is no difference if this happens to a marae or to anybody else’s home in this country. If somebody is going to destroy one’s private property, then that person should get his or her beans, big time.

I have been listening to some of our more liberal colleagues, and they have been in trouble with me. I have been upwind of the smoke, sometimes. Some of them were downwind of the smoke, and they got a little bit carried away in terms of their interpretation of what tagging is, and about their belief that it is some sort of artistic talent. As I said, Chester Borrows has been a policeman and he is too tough to think that. Most of these members of Parliament, if not all of them, have never come out in the morning and seen that their fences have been desecrated, tagged, or painted. Half of those member would not have the time to get out and clean those fences themselves; they would have to pay somebody else to do so. Could members imagine Nandor Tanczos going out with his bucket, organic soap, and brush, and cleaning his fence? I could not imagine it. It would be something for the New Zealand Herald to take a good photo of—here is Nandor with his brush and eco-friendly toothpaste trying to clean up this tagging! Get real!

I said I would take only a short call, but this is a serious situation for many, many people, and a lot of them are elderly and cannot get out and clean it up. Some of them are even more frustrated because they pay somebody else to clean it, and within 2 weeks they come back and see the desecration again. I support the Summary Offences (Tagging and Graffiti Vandalism) Amendment Bill, and I recommend it to the House. Kia ora tātou.

CHESTER BORROWS (National—Whanganui) : I wish to address a number of the issues that have been raised so far. I must say that I thought that the Hon Dover Samuels had got his speeches mixed up and that he meant to deliver the first part of his speech during the debate on section 59. But I am glad for his contribution tonight. I think he made a number of points that made good sense.

A number of comments have been made around tagging and where it comes from and the reasons for it. I was interested to note, on a trip to Canada last year, when walking around the city of Calgary and attending a number of the public places of interest, that there was an obvious lack of tagging. In fact, the most prominent tagging that was there was on railway carriages. Well, what a surprise—that is often the case in this country, too. But the fact is that railway carriages move. There is no proof that the tagging on the railway carriages was done in Calgary, and, in fact, I would suggest that it probably was not. I had a good look around for tagging, and I found one example on a power box and another example on the back of a sign at the zoo that was about the size of a piece of A4 paper, and that was all there was. When I spoke to the Calgary police about that, they made a number of comments, and one of them was this. The fact is that street gangs in New Zealand are poor and identify themselves by wearing clothing and colours, and by tagging. Street gangs in Calgary are rich. They drive big cars, make money from selling drugs, and remain under the radar by not wearing colours, not tagging, and not making signs and calls. So there are issues there in relation to why tagging actually occurs. I agree that the issue is very similar to a dog that runs around peeing on a lamp post. People tag for a number of different reasons, and it is also true to say that where it appears once it will appear again and again, and that a clean or recently painted wall is more of a target than anything else.

I will take some issue with a number of points raised by the Green Party and the Māori Party. One of them concerns the issue of why there is a need for making a law against this stuff. They tried to make the point that we should not be making laws but channelling our energies, our efforts, or our money somewhere else. The point has also been made that about $10 million a year is spent on dealing with tagging across district councils around the country. If we looked at how much those same councils spent on youth activities and promoting youth development, we would see that the figure would be far, far in excess of $10 million. There is nothing in this legislation that prohibits, prevents, or provides a hindrance to people spending money on those positive youth development initiatives, and they do spend money on them. Just because we make a law against something does not stop it happening. A law against rape does not stop people being raped, and a law against tagging will not stop tagging. But that does not mean that we should not do anything. If we tried to make a law to get rid of a crime, I am sure that my friend from the Green Party would be jumping up and down, because by not having an offence and not creating a law about it, we are endorsing it. One has to take—

Nandor Tanczos: It’s already illegal.

CHESTER BORROWS: Well, we will address the point that it is already illegal. It is already illegal, and those points were made by me and others at the time of the first reading. It is currently covered under sections 33 and 11 of the Summary Offences Act and section 269 of the Crimes Act. Those sections refer to different tiers of damage. Section 33 is around bill sticking, and it also covers graffiti. It provides for a penalty of $200, and it is virtually never used. Section 11 concerns the wilful damage offence. It has a penalty of $2,000 and 6 months’ imprisonment, and it is used if someone kicks over a letterbox, smashes a window, or puts graffiti on a fence or wall, or whatever. Section 269 of the Crimes Act is around criminal damage, and it is used mainly when people smash big and valuable objects, or, for instance, if they key cars, because of the cost of repairing that damage. In that case, charges are brought under the Crimes Act. The problem that we have is that under the section 11 offence, for instance, of the Summary Offences Act, there is no preparatory offence and there is no possessory offence.

The question was asked as to how one could know whether a guy was going to use his big black felt tip pen or spray-can for graffiti. Well, if he had the lid in his gob, he was holding it in his hand, and he was about to draw on the fence, someone would think he should be going for something, yet there is no offence for that. So if a guy is squatting down in the dark with his spray-can poised and is ready to squirt it against the fence, there is nothing there that he can be arrested for, and one cannot even demand his name and address. Is the Green Party really suggesting we should have left the law like that, or do its members think there should have been a provision within the legislation that that person could be stopped and his name and address demanded, or that an arrest could be made, or that he could be taken into custody, or whatever? I am sure that the House would be happy to give leave to hear that little point raised by the Green Party, if it wants to come back to it. The wording used in the new section 11A inserted by clause 4, which is “without reasonable excuse” or “in circumstances in which it can be reasonably inferred that he or she intends to use it to commit such an offence.”, is wording that is similar to other possessory offences within the criminal jurisdiction. For instance, if members look at the law relating to possession of implements for burglary by night, they will find that if people have some stuff on them that they can use for burglary—even though there might be all sorts of legitimate reasons why those people may have those things with them—and if there are circumstances where one can infer that those implements will be used for the commission of a crime, then there is an offence, and I reckon that most New Zealanders think that there should be.

Nandor Tanczos: You’re talking about a pen—you’re talking about a marker pen.

CHESTER BORROWS: Well, the matter is raised: we are talking about a marker pen. The onus would still be on the prosecution to find that the pen was being carried in circumstances that implied that it would be used in the commission of a crime—that is, for drawing on the wall, or whatever. [Interruption] Well, does Mr Harawira want an explanation or does he just want to throw rocks? We heard points made earlier on that National’s and Labour’s support for this legislation was purely around political point-scoring. And it was quite interesting to note that the jocular vein in which the Green Party presented its arguments—some would say a “piss-take”; I think that that is a fairly colourful but pretty honest description of the way it was delivered—was pandering exactly to its target constituency. I would also argue that the way in which the Māori Party presented its arguments against this legislation was pretty much targeted towards its constituency, too, if we look at the points that were made and the manner in which they were made.

We can be a little cynical in thinking that Labour members were not happy to support George Hawkins’ bill in respect of graffiti. The previous Minister of Justice said that there were a series of problems with the New Zealand Bill of Rights Act in relation to that bill, but nothing has been raised in respect of this bill. At the time the commentary was prepared for the House in respect of the Manukau City Council (Control of Graffiti) Bill, none of those issues were raised because, of course, at that stage we knew that we would be seeing a series of national initiatives to be announced shortly, as Mr Goff said in June 2007.

The point I make here is that people support legislation to go through the House for a number of reasons. I hope it is because the bills are a good idea. But the way in which people support them and the way in which they address them—in fact, the bills they tend to support—also tend to represent the constituency that put them into this House. But the fact that Labour is supporting this bill and that National is supporting this bill, but the Greens are not and the Māori Party is not, is no surprise to anybody. But nobody should go climbing on a high horse and pointing the finger, saying that one party is political point-scoring and another is not. The whole guts behind this bill is that we make laws to show a societal abhorrence to criminal offending. None of us believes for a single moment that a law will stop that offending, and that it will be a silver bullet. If anyone comes to this House thinking they can do that with law, they have come to the wrong place and maybe it is time they walked away. The fact is that this legislation is addressing a problem. It enforces society’s abhorrence of graffiti, and I am proud to be in a party that supports this legislation.

Hon SHANE JONES (Minister for Building and Construction) : Tēnā koe, Madam Assistant Speaker. I rise to take a short call, for fear that anyone in the north will believe that the view of my colleague and whanaunga Hone Harawira reflects the entirety of the Tai Tokerau.

I know that it is slightly treacherous territory for the words, etc., of this House to become mixed up, but recently we have had some decisions out of our District Court in the Hawke’s Bay area that have given weight to the fear, anger, and frustration that ordinary, everyday, garden variety Kiwi families feel when they wake up and find that their properties—which they have worked away at, in struggler’s gully, to amass enough dough to afford—have been defaced.

If there is one myth being peddled that must be stopped, it is that somehow we can compare graffiti to the moko. Well, the word “moko” is very close to the word “muku”, which means to wipe one’s backside after doing business. And that is what graffiti looks like to me; there is not a single redeeming feature. I have wandered around places, such as outside the Taipā School not far from where my parents and I come from, after I have woken up in the morning, and seen that some young waster has gone there and defaced local school property with something that would offend any mother or any wife. We should be fearful of it when we see it, because it reflects markings belonging to a gang. The only reason young people are doing that is that their habits are beginning to resemble those of the canine variety.

It might be said that this is an overreaction, but it is not an overreaction when people are beginning to experience daily, regular fear. One or two things happen. If the State is unable to bring forward sanctions, then communities are filled with a vigilante fervour. Then the people who are in control of or working with the youngsters who are tagging—and they are not all young—begin to fear that their hold over the community is being threatened, and it causes them to become bolder and more dangerous. The notion that we should stand back in this House and allow those elements to increase their reach, whether in Heretaunga, Tai Tokerau, or South Auckland, is abhorrent. I do not wish any particular taggers a life of misery, but if they are going to be miserable then please spare me from it, and please spare our communities from those habits.

This bill ought to be supported. Earlier speakers are correct: it will not wipe out all the motivations that make people tag. But if this bill gives further strength to the judiciary—District Court judges—to get these young gang-related taggers and give them a holiday in the hīnaki to bring them to their senses, then it is money well spent, in my view. It is not very good for the parents of those young children, and having seven kids myself I do know what it is like to have ups and downs with kids who go around and get into trouble occasionally. This is a matter of constant, ongoing threats, not only to private property but to the meaning and affection that people are putting into their homes. That is why this bill is a clear statement that that element in society, in the community, must not be allowed to hold the community to ransom.

If they want to create some art, they should go down to the Sunday schools and teach the mokopunas how to draw a picture. If they want to enhance art and carving, they should go down to the marae, which are being run largely by volunteer kuia and kaumātua. The average tagger is associated with gangs. They are not doing enough to uphold those institutions that give us our identity. There is no single contribution or redeemable quality associated with these young taggers, in terms of their making a strong contribution to Māori culture. So we must never ever let it be said that they are at the forefront of a new version of Māori art; they are at the forefront of Māori art spelt with the letter “f” in front. I salute this bill. Kia ora tātou.

Hon JUDITH TIZARD (Associate Minister for Arts, Culture and Heritage) : I move, That the Copyright (Artists’ Resale Right) Amendment Bill be now read a first time. This bill amends the Copyright Act 1994, to insert a new stand-alone part establishing a resale right for visual artists. At the appropriate time I intend to move that the bill be referred to the Government Administration Committee for consideration. It is my enormous pleasure as Associate Minister for Arts, Culture and Heritage and as Associate Minister of Commerce to introduce this bill. It constitutes a separate part of the Copyright Act, with its own interpretation clauses. The Copyright Act covers a wide range of creative work, including dramatic, literary, and musical works, and film and sound recordings. This bill includes visual artists and widens their right to benefit from increases in the value of their works over time. This provision gives New Zealand artists the same rights that artists in many overseas countries have had for many years.

A resale right is a variation of the rights that exist under the Act, and it recognises the unique nature of visual art. As much as possible, the new resale right aligns with the provisions of the Act. The bill entitles visual artists to receive a royalty payment each time their original artistic work is resold on the secondary art market through any auction house, gallery, dealer, or any other business that deals with artistic works. The resale right will not apply to the first sale or transfer of an artistic work, and will not apply to sales between private individuals. A resale right is a moral right that recognises the continuing relationship between visual artists and their artistic works. It also recognises that visual artists, unlike creators of some other types of work, have limited opportunities in most cases to benefit from copyright, which deals mainly with reproductions or repeated uses of works.

Visual artists may be able to get some royalties from the reproduction of artworks in a variety of publications, but most of the real value for artists is in their original one-off work or in limited editions of prints, and it is currently rare for visual artists to benefit, once their artistic work has been sold, unless they have made special provision in the contract of sale. This amendment bill was signalled by the Labour Party manifesto in 2005 and it follows a discussion paper released in April 2007. The paper was very widely distributed to artists, art collectors, art dealers, galleries, auctioneers, iwi, second-hand dealers, museums, art institutions, and lots of members of the public with an interest in visual artworks. Over 200 submissions were received on the discussion paper, with most supporting a resale right. Artists made up about half of the submitters, with art collectors the second-largest group of respondents.

Generally, artists and arts groups supported the resale right, and auction houses and dealers did not. It is noted, however, that a few artists have spoken out against the resale right—something that also occurred when provisions of this sort were introduced overseas. It is also noted that a number of art dealers, curators, and collectors supported the resale right, and some already voluntarily pass on a percentage of resale proceeds to artists.

One argument against the resale right was the concern of increased compliance costs for businesses such as dealer galleries and auction houses. The Government has considered this and taken it on board. We are introducing a flat 5 percent royalty rate rather than the variety of royalty rates that applies in some other countries, such as the UK. Monitoring and enforcement will be undertaken by one appointed collecting agency, which will be selected through a tender process and will assist businesses in calculating royalties due and determining the eligibility of artists. Auction houses already publicly report sales of artistic works, and all businesses have to complete sales and financial returns, so any additional work to determine a resale right should not prove onerous. It is also argued that a resale right would depress the art market, but there is no evidence to establish that that will occur—it certainly did not in the United Kingdom.

There is already a range of costs inherent in the art market, such as a buyer’s premium, and an additional 12 to 15 percent charge by the business on top of each sale of an artwork. Dealers and agents can also charge similar amounts, or more, as commission on each sale. There is no evidence to show that any of these factors impact negatively on the price people are prepared to pay for an artwork, nor that they reduce demand for art generally. I do not believe, therefore, that paying 5 percent to the creators of artworks will depress the art market. In the UK, surveys show that the art market has strengthened considerably since the introduction of a resale right in February 2006. Visual artists in the UK have benefited from this demand, with the main collecting agency reporting resale royalty returns of more than £4.6 million going to artists.

In tackling this complex issue, the Labour-led Government is honouring an election promise to examine international developments relating to resale royalties and their possible application to New Zealand. I also note that the Australian Government has indicated that it will undertake a similar investigation. The Government is also honouring an optional international commitment under the Berne Convention for the Protection of Literary and Artistic Works, and engaging with like-minded countries that enable their visual artists to have an ongoing economic benefit from their work. Many countries already have a resale right for their visual artists, including France, which in 1920 was the first country to introduce this right. New Zealand will pursue reciprocal understandings with those countries, particularly in the European Union, that will enable New Zealand artists whose work is sold in other countries to also benefit from a resale right.

The resale right will apply to artwork sold in New Zealand by artists who are residents or citizens of New Zealand, and to artists who are nationals of reciprocating countries that offer a similar right on artwork sold in their countries by nationals of New Zealand. A resale right will apply to any visual artwork on which copyright exists. In line with the Act, this includes original work such as paintings, drawings, photographs, sculptures, glassworks, and ceramics. It includes limited editions made by the artist or made under the artist’s authority, and it also includes unique pieces of jewellery or furniture made by an identifiable artist.

In line with international practice, a resale right will not apply to works of architecture, such as a building or a model of a building. Although architecture is deemed as an artistic work under the Copyright Act, overseas practice is to exclude architecture from resale right schemes, and that is what has been done with a separate part of the Act in New Zealand. A drawing or a plan of a building, however, would be included in the resale right scheme and could attract a resale royalty if it were sold on the secondary art market.

The bill deems an artist who creates an original artwork to be the holder of a resale right. That right will be inalienable and it protects an artist from being pressured to contract out of the right. It also protects artists from being pressured to share the rights with someone else. However, the right can be left to others in an artist’s will.

Resale royalties will be collected on artworks sold during the artist’s lifetime and on works sold for 50 years after the artist’s death. This is the same duration as for copyright under the Copyright Act. All commercial dealers will be liable for payment of the resale royalty, and royalties will be collected by one appointed agency that will have been appointed under regulations made under the proposal in new section 204R. Only that agency will be able to request information from those selling artworks, and it may use this information only for the purposes of the provision. Non-payment of resale royalties or the failure to provide information will be subject to civil proceedings, and only the collection agency can take court action on behalf of resale right holders.

In return for managing the resale right on behalf of artists, the collecting agency will charge a fixed fee or percentage of the royalty. This is also consistent with international practice and with other agencies in New Zealand and overseas that collect copyright royalties. This fee will cover the collecting agency’s administration costs. Therefore, the scheme will be self-sustaining and of no ongoing cost to the Government, and it will operate the same way as the Australasian Performing Right Association and the Copyright Licensing Ltd schemes do.

The resale royalty right will be 5 percent of the resale price of the artwork. It is a relatively small amount compared with the combined 30 percent or more that is typically collected by art dealers from buyers and sellers of artworks. A resale right will also apply only to works that sell for $500 or more. That threshold and the flat 5 percent rate make it a simple scheme, and make it easy to understand and enforce. Many overseas schemes are, by contrast, more complex and difficult to administer. The Government is pleased that this stand-alone part of the Copyright Act recognises the contribution made by both established and emerging visual artists and that it offers some of the economic benefit that artists can derive as creators of original works as their works increase in value over time.

Research shows that New Zealanders are more likely than many others across the globe to have original artworks in their homes, be it for pleasure or because art is seen as a good investment, or both. This bill recognises, as most New Zealanders do, the contribution that artists make to our society. The Copyright Act 1994 and amendments recognise a range of interests and rights by a wide range of creative workers and users. By its nature its use covers different rights in different ways. I am happy to see this amendment being proposed. This Government recognises that Parliament must continue to review and update copyrights so that there are clear incentives for creators to create, innovate, and develop across creative and technical sectors.

I thank those parties who have supported this legislation being referred to the select committee. I urge all parties to support the first reading of this bill and its referral to the Government Administration Committee for the calling of submissions and further consideration.

CHRISTOPHER FINLAYSON (National) : The Copyright (Artists’ Resale Right) Amendment Bill proposes yet another piecemeal amendment to the Copyright Act 1994. As the Minister said, it proposes to establish a scheme that entitles visual artists to receive a royalty payment each time an original artwork is sold commercially through an auction house, gallery, dealer, or other professional involved in the business of dealing in works of art.

Some history is perhaps instructive. The resale royalty right is known in France as the droit de suite and it became law there, as the Minister said, in 1920, for a number of reasons. In the early 1900s, for example, the widow of Impressionist painter Jean-François Millet was found living in poverty just as the resale price of her husband’s work was spiralling to new heights. One of the stated reasons for the law was to ensure that such a situation would never recur. It was also established, apparently, to assist the widows of French artists who were killed in the First World War, at a time when no welfare or social security systems were in place. Over the years since the French introduced this scheme in 1920, more than 50 countries have adopted a type of resale royalty right, and indeed quite recently, in 2001, a European Union directive was passed that mandated that those member countries that did not have a resale royalty right had to introduce one into domestic law by 2006. That is why Britain implemented the Artist’s Resale Right Regulations in February 2006.

National will not support this bill, for a number of reasons. The first reason is that it is yet another example of the episodic reform of copyright law. What is required is comprehensive reform. In my first reading speech on the Copyright (New Technologies and Performers’ Rights) Amendment Bill, I put the case for a complete review of the law of copyright. I expressed concerns about the episodic reform of the law. I said that such reform can undermine the structure of the substantive legislation. I reiterate those concerns here. The time has come for a comprehensive review of the law of copyright, where all competing interests can be examined in the light of technological change since the last major revision in 1994. Parliament can then make decisions about the appropriate structure of copyright legislation for the next few years of the 21st century. Such a task is, admittedly, a major undertaking, but I believe it is one that is needed.

The Government has an important role to play in defining artistic property rights. Indeed, it is far more important than its funding and subsidy decisions. Copyright law that protects the expression of artistic ideas specifies, for example, who has the rights to revenues. In New Zealand, the domestic retail sales of music were worth $173 million in 2005, book publishing generated $204 million in 2002, and the total gross revenue for the New Zealand screen industry for 2007 was $2.45 billion. The creative sector contributes about 3 percent to New Zealand’s GDP, so copyright law in New Zealand is a very important issue. Yet for 8 years this lazy Government has done very little in the area, preferring to tinker, and we all know about the mess it made of the most recent amendment. Then, out of the blue has come this stand-alone proposal. National will not support this amateurish mode of law reform for such an important statute.

The second reason National will not support the bill is that this scheme is contrary to basic property law concepts. The droit de suite was founded on, and is consistent with, civil law notions of property. Such a notion sees the artist joining his or her individual will to the work, and as a result the work comes to embody the owner’s personality. Yet in our property law system, an artist’s work is treated as a commodity, and generally no continuing connection between artists and their work subsists. Accordingly, the purchaser of an artwork who pays the market price, and who assumes the considerable risk that the work may decline in value, should receive unfettered ownership.

The essence of the argument for an artists’ resale royalty is the disparity between the initial sales price of a work in the primary market and the price for which the work is later sold in a secondary market. However, that raises the question of why artists should be treated differently from other producers of negotiable goods. It would be unreasonable, for example, if a person who had invested in shares had to share any profits with the company or its management when he or she sold those shares. There is also a strong argument that because investors carry the financial risks of owning an artwork, it is inappropriate for an artist to benefit from the resale but share none of the risks or costs in between sales.

The third reason we do not support the bill is that this legislation will encourage an exodus of art transactions to jurisdictions where the royalty is not paid. Art resales will become private and underground, in order to avoid the resale imposition. It is worth noting that the UK Government fought the introduction of the droit de suite scheme, arguing that the levy would cost up to 5,000 industry jobs and would divert trade to the United States and Switzerland in order to avoid it. The effect on the French market since the introduction of droit de suite supports that argument. At present, although roughly a third of the fine art sold in the world is French in origin, only 7 percent of all French art sales take place in France. Indeed, I was reading an article just last week that indicated that the French are trying to water down their own system because they have seen the harmful effects of it.

A fourth point is that the measure is economically detrimental to the art market and to artists generally. It is basically a tax on sales, and as such it could have the effect of discouraging investment in, and consequently depressing, the art market. In the secondary market, collectors may hesitate to buy the works of contemporary artists, because as soon as they purchase a work it immediately drops in value, as any subsequent sale will be subjected to a resale levy.

The fifth point is that the measure would only benefit successful artists. The secondary market for contemporary art is very small indeed. Only a handful of contemporary artists will ever see one of their works resold. Resale royalty payments therefore benefit only a small number of already successful artists, as those are the artists whose works attract large prices and typically resell frequently. They are also the people who do not generally need a resale royalty. Less successful artists fail to benefit, as their works are less likely to be resold at a high price. Again I refer to the United Kingdom situation. The scheme has been condemned by the people it is designed to benefit. Seventy percent of the 50 million francs levied under the French scheme in 1996 went to the families of only seven artists, including the heirs of Picasso and Matisse. The same situation has occurred in both Germany and Australia.

The scheme will be very costly to administer, and I note that $500 is a very low threshold price. It is probable that the cost of administering the scheme would outweigh the benefit of the royalty.

The other point that needs to be emphasised is that some schemes have not been particularly successful overseas. The Californian statute has been described as having teeth like those of a gummy bear, and it is rarely enforced. Of the 11 European Union member States that currently have legislation, seven do not enforce it, or, at the very least, do not enforce it on a regular basis.

Finally, the scheme may create privacy concerns. The Minister also failed to address an interesting issue that has arisen recently with members of Parliament. Who is to receive the royalties? In the context of a painting, for example, will it be those who paint the work or those who sign it? That is a very difficult legal issue, which the Minister has dodged.

So this is a very poor bill. It comes after 8½ years of the Government’s doing nothing to address the real concerns of artists. Copyright law is an extremely important subject, but this bill is a poor bill introduced in the dying days of a Labour Government. It deserves to go no further than its first reading, and National will oppose it.

Hon PAUL SWAIN (Labour—Rimutaka) : That was actually quite a disappointing contribution from the member Chris Finlayson.

Hon Member: Come on!

Hon PAUL SWAIN: Well, I am going to come on and talk about it in a minute. The member raised some historical issues. I learnt a few things regarding the French experience, which I thought was entertaining. It is the old story: if we keep our ears open we learn something every day.

The member made the point that this is episodic lawmaking, and he wants a back-to-basics, blue-sky, full review. You see, the problem is that in all cases that is usually an excuse for doing nothing. If that member were ever to become a Minister—mercifully, it will not happen in my lifetime—the standard old thing would occur. Officials always say: “This is a bit piecemeal. What you need is a full-scale review.” That is code for “Minister, you should really do nothing.” That is the point.

The member knows that the complex area of copyright is difficult. Of course it is. I acknowledge that, and that was acknowledged when the last piece of legislation went through the House. It is particularly the case in the area of electronic reform. There is no question that it is difficult. From start to finish, a legislative change is probably a 5 or 6-year piece of work. Is the member saying that nothing at all should happen in the meantime? Is that what the member is honestly saying? That could be applied across every piece of portfolio work.

Christopher Finlayson: Why wasn’t this done in 1920?

Hon PAUL SWAIN: In 1920 the French did it, but the point I am making is that from time to time issues come up that need to be addressed. I am not saying there is not a need to go back and look at the issue; I am saying that that is a poor excuse for doing nothing now.

Let me ask the member the basic question: is the fundamental principle of an artist being able to recoup a royalty on resale a fair and good principle?

Christopher Finlayson: No. Did the member listen to the speech?

Hon PAUL SWAIN: I did listen to the speech.

Christopher Finlayson: Well, then the answer is entirely clear.

Hon PAUL SWAIN: So the member is definitely saying no to that. I am acknowledging that there are complexities with the issue that a select committee should look at, but is the member saying that artists should not be able to recoup something? [Interruption] All right, so the member is saying that an artist should have no right at all to recoup any royalty on resale. That is what I take the member to be saying.

Hon Judith Tizard: They don’t like creative people.

Hon PAUL SWAIN: That leads me on to my next point; the Associate Minister for Arts, Culture and Heritage has reminded me of it. The member saying that the Government has not done anything for 8½ years is a bit rich. In that short period of time, this Government has done more for the arts community than the previous National Government did in its entire 9 years in office. The Minister for Arts, Culture and Heritage, the Prime Minister, has put the arts back on the agenda in New Zealand. There is absolutely no question about it. Is the member prepared to acknowledge that the Prime Minister and the Government have done a lot of work for the arts community over the last 9 years?

Christopher Finlayson: Political interest in the arts.

Hon PAUL SWAIN: Well, I would like that member to talk to the film industry, to the arts industry, to the writers, to the creative sector, and to the music industry. All of those sectors would acknowledge that under the leadership of the Prime Minister, and with the hard work done by her hard-working Associate Minister, the issue of the arts has come back on the agenda in New Zealand, whereas the arts were dead, buried, and gone under the previous National Government. It is not right that the member does not even grudgingly acknowledge that a lot of work has gone on in the arts community. Maybe he is talking to audiences that are different from those that we talk to. But, irrespective of people’s political persuasion, irrespective of their hue, most people in the arts community will say not only that there has been a commitment to bringing the arts back on to the agenda but that funding has gone into the arts as well. So the argument the member tried to raise that somehow nothing has gone on in respect of the arts is a poor one, because in fact that is not the experience of people in New Zealand. We have had a vision to ensure that the arts community, the community that promotes New Zealand’s identity, comes back as part of our national identity. We have done a good job on that. We should be proud of it, and outside this House that member would probably acknowledge that some good work has been done in this area.

Sandra Goudie: And you blew it all with a stupid bill.

Hon PAUL SWAIN: The member says it is a stupid bill. I come back to the other question: is the fundamental issue an important one? We can argue about whether this bill is the right way to do it, but is the principle—which, presumably, a number of people have been arguing for, for some time—the right thing to do? As the member says, it has been in place in France since 1920. He raised some other interesting issues, which presumably the Government Administration Committee might want to look at, but the point is that we have drawn on the experience of other schemes to get to this particular point.

The bill amends the Copyright Act, as the Associate Minister correctly pointed out, to establish a mandatory resale right for artists when their artistic works are resold in New Zealand. The bill creates a 5 percent royalty payment, and artists will receive the payment when and if the work is resold for over $500. I think that counteracts one of the arguments Chris Finlayson raised. A collecting agency will administer the royalty payments, which are an economic right that provides an extra incentive for artists to create works of art in that they will receive ongoing benefit from that art. I thought those were some pretty important basic principles. The Associate Minister has brought forward legislation that encapsulates those principles. That is what needs to be done, if we want to do something about the principles. I have not heard an argument against the principles. I have heard a lot about the need to delay, to have a holistic review, and to talk about these things more and more. The Associate Minister has brought forward an issue that, in my view, does need addressing.

The sorts of issues the member has raised are ones that I imagine will be discussed at the select committee. I imagine that some contrary views will be aired at the select committee, but in the end it will report back progress after having heard those considerations. If it were the case that we should do nothing until we had done a full review, then we would never do anything about anything. We would never do anything about the health system, never do anything about education, never do anything about labour reform, and never do anything about superannuation. We would never do anything about anything. Tragically, that was the record of the National Government of 1990-99, apart from a few things around benefit cuts, changing legislative law, and superannuation. The real problem is that members opposite thinking they can sail into Government by promising to do nothing and to have reviews just will not cut it.

Some reasonable issues were raised by the member, but the point is that the Associate Minister has started from a basic principle, which is that artists should have some right to a royalty when their art is resold for a sum over a certain threshold. She has brought in legislation that encapsulates that principle. It will go off to the select committee. I will support it going to the select committee. The select committee will look at the arguments and bring back a report in due course. I urge the House to support the bill going to the next stage.

NICKY WAGNER (National) : I rise to speak to the Copyright (Artists’ Resale Right) Amendment Bill. I will consider the operation of such a scheme and explain why under this legislation it just will not work.

At first view, the idea of droit de suite, or an artist’s resale royalty, appeals, as the previous speaker was saying. After all, most New Zealanders who enjoy the visual arts are keen to reward and support artists. It is well known that economic success in the world of visual art is unusual and that the vast majority of New Zealand artists struggle to make ends meet. Instinctively, the idea of a struggling young artist selling his or her work for peanuts and later having to watch the art dealer make a fortune out of the artist’s creation disturbs the Kiwi idea of fair play.

Making a living in the art world is not easy, and payments for ongoing work are irregular and incomes are low. We all know artists, particularly the young, the talented, and the passionate whom we would like to see earn a decent living. I really like the story of artist Michael Smither, one of our most renowned and top-selling artists, who has created his own DIY resale royalty scheme—and it works for him. After finding that some of the paintings he originally sold for about $150 to $400 back in the 1960s and 1970s were being resold for up to $100,000, he created a very simple contract that required buyers of his paintings to return 5 percent of gross resale value of the work to the living artist. The contract is simple and straightforward, and it pertains only to the first sale of the work and only whilst Mr Smither is alive. Mr Smither has had no problems promoting his scheme. He found that 85 percent of potential buyers happily agreed to the contract, and as far as he was concerned the other 15 percent, whom he thought were trading in his art only for profit, were not worth dealing with anyway. His paintings, even with their own resale royalty, have retained their value and have, in fact, been in huge demand.

Over the last 5 years Mr Smither has sold over 100 paintings under his resale contract, and although not a large number have been resold, so far all the vendors have voluntarily repaid the resale royalty. Mr Smither is also confident that he is able to track the resales. His scheme is simple and cheap, and it has proved to be very effective. He would therefore favour a voluntary code of practice that works rather than an unproven legislated royalty scheme.

Recently, I was talking with Don Binney, who has created a similar resale scheme for his work. He found that although the contract at times made the original sale more complex, as buyers grappled with the concept, they were still purchasing. But at the time of our discussion he had not had any resales.

It is great to see these artists creating simple, effective systems that work for them and their buyers. But that does not mean that a Government-legislated scheme will be equally successful. A Government-legislated droit de suite is a totally different animal. Whereas Smither’s and Binney’s DIY systems are simple and effective, the scheme proposed by the Copyright (Artists’ Resale Right) Amendment Bill is complex, expensive, and, most likely, ineffectual. It all boils down to the size of our art market versus the cost of regulating, and the size of the bureaucracy needed to recover and redistribute the royalties.

Art sales data is difficult to quantify, but it seems that the entire New Zealand visual arts sales through dealers or at auction is only about $15 million a year. So even if all art works included a 5 percent royalty, the whole scheme would have a maximum collect of $750,000. But when we exclude artworks that are sold for the first time and all art works under $500, just how much money would there be in the pot? When we deduct the cost of monitoring, collecting, and distribution, how much money would actually get to the artists? That is the key issue. Some estimates are as low as $300,000. That will not go very far. Three hundred thousand dollars to support all New Zealand’s visual artists? It will not do anything. In fact, it is pretty close to the amount that the Ministry for Culture and Heritage pays to one person at the top of its organisation. Who will head the organisation that collects the royalties, and how much would that person be paid? Then there is the problem of who is likely to benefit from the little amount of royalty there is likely to be. Payments from similar schemes overseas tend to favour the already successful and the dead. In France, for example, the vast majority of the droit de suite levy goes to a handful of families of dead artists, including the heirs of Picasso and Matisse. In Germany, the royalties are paid out to about 500 artists out of an artistic population of 12,000.

It should be noted that one of the reasons that the Australian Parliament voted against a resale royalty recently was that 20 percent of the art auction sales in that country that would have attracted a royalty would, again, have gone to prominent and deceased artists such as Arthur Boyd, Sidney Nolan, and Brett Whiteley. It should also be noted that as long as Australia does not have an arts resale scheme it would be very simple for New Zealand art sales to transfer to Australia. There is a risk that the Australian art sales network would be strengthened at the expense of New Zealand’s, and with absolutely no benefit to our artists. I certainly do not fancy supporting the outsourcing of art sales overseas.

Although we are all keen to support the visual arts, and although a method of funding that would support working artists by providing a more reliable income is attractive, this scheme gives me no assurance that it will do anything significant for New Zealand artists at all. In fact, the size of our arts market means that under present legislation this scheme will be a bureaucratic disaster, with costs eating up the majority of the royalty revenue and resulting in tiny payments to a small number of artists. This bill is a Clayton’s bill. Like so much of Labour’s legislation, it promises much but delivers very little more than bureaucracy and red tape. It would be expensive, impractical, and inefficient.

DAIL JONES (NZ First) : This Copyright (Artists’ Resale Right) Amendment Bill is very interesting legislation. It is a new idea. With the way the bill is drafted, it is almost a work of art in itself, bearing in mind the new concept that exists in it. New Zealand First will be pleased to support this bill’s referral to a select committee.

New Zealand First is a party that believes in actually doing things. We do not believe in opposing things just for the sake of opposing, which is what we have just heard in the speech from the preceding speaker, Nicky Wagner. Sometimes we should try an idea, send it to a select committee, and see what the people of New Zealand have to say about it, rather than listen to a member pontificating in a speech that was probably prepared by someone in a research unit rather than one that gives the member’s own viewpoint. We in New Zealand First would much prefer to hear the views of the people of New Zealand—in this case, particularly, the views of the artists, the auctioneers, and all of those who are interested in the art field.

I have a few paintings myself. I have never thought of selling any of them. Maybe they are not very good, but one never knows. They might be very valuable for all I know. We seem to collect them at various places we go out to in New Zealand. As a member of Parliament in particular, one might go to an A and P show, and there is always an art exhibition there of some kind. I have bought pictures to support the local artists. I have bought pictures at Muriwai Beach, in the Helensville area, and in Nelson. I tend to collect them. Of course, one day I might sell them, or someone might sell them for me when I am no longer around.

We in New Zealand First wish to try anything that can be done to support artists, who are not terribly wealthy people. We want to do things for people to encourage them to produce more art in New Zealand, and if they can get some sort of royalty over the years for the work they have done, then why not? Why should a, perhaps, speculative buyer make all the profit rather than the person who painted the item or did whatever was necessary to bring it within this definition?

Mention has been made of an interesting scheme set up by one artist, and I think it is a very good idea. It is good thinking, but the problem that that artist clearly has with the scheme is that he has set it up to do it only once, because of problems with assignments and suchlike, whereas I would like to see a scheme whereby if something is sold more than once within the time frame set out in the bill, then the artist can profit from it.

Why should artists not make a profit? What is wrong with artists making a profit? I would ask why the National Party is against a profit being made by an artist, because that is what we are looking at—artists profiting and making money. It is called private enterprise. It is called the open market. Why are National members opposed to the open market? Why are they opposed to artists making a profit? Do National members have it in their minds that artists are not allowed to make money?

R Doug Woolerton: Sounds like it.

DAIL JONES: I say to Mr Woolerton that it sounds like that to me. Mr Woolerton is a great fan and patron of the arts—not quite in the Medici style, but in the Woolerton style, no doubt. So why can artists not make a profit?

New Zealand First is all in favour of having a market economy in this area if artists, in particular, can profit on the open market by some sort of system being set up. New Zealand First wants to see legislation that allows something to happen. We are a party that wants to do things in favour of the arts, so we will support this bill going to a select committee. We look forward with great interest to the submissions, which I hope will do a lot to continue to improve art in New Zealand.

KATRINA SHANKS (National) : It is my pleasure to rise to speak to the Copyright (Artists’ Resale Right) Amendment Bill. When I was looking at this bill—and I have been briefed on it a little bit—I asked where the sector actually sits and who is for and who is against it. Not a lot of people are really for this bill. When one goes into the sector and talks to the people in the auction houses and asks them whether they support the bill and whether they think that it is a good idea, I must say they are not very hot on it. I have a couple of friends who are artists and who sell a bit of art. I asked them whether they support this bill and whether they think it is a good idea. They were not very hot on it, either. They said they were happy to sell their art, to get what it is worth on the day, then to let other people enjoy their art and onsell or on-gift it if they wanted to. So I tried to figure out why this bill is here and why it is going to a select committee. Then I worked it out. It is because when Helen Clark leaves Parliament and her art is sold at an auction or through a broker, she will get 5 percent royalty. That is what this bill is about. It is about protecting her revenue source, going forward. It is to protect the Prime Minister’s revenue in the future.

Eric Roy: But she never painted it.

KATRINA SHANKS: No, she did not paint it. So that must mean that—

Eric Roy: There’s an issue.

KATRINA SHANKS: —there is an issue. If Helen Clark’s picture of the Beehive were to go to an auction house and be sold, who would receive the proceeds of that auction?

Eric Roy: That’s a good point.

KATRINA SHANKS: I say to Eric Roy from Invercargill that it is a really good point. Would the proceeds be shared between the person who signed the picture and the person who drew it? I imagine that it would be a 50:50 cut. Say the sketch was worth $500 on a good day, 5 percent of that would be $25, and half of that would mean she would get $14.50 from its sale. We need to consider whether it is worth passing this bill for $14.50. One would think the administration costs would be a little bit higher than that.

National opposes this bill on a number of fronts. We believe there are huge issues in the copyright sector and that this issue is probably not one of the big issues. If we are going to talk about doing something about copyright, let us talk about a comprehensive reform so we can look at how copyright should be. To do that we need an energised Minister who can come in here with fresh eyes, look at it, and add some value to the sector. I believe that in a few months’ time that Minister will be Chris Finlayson, who will be stamping his mark on copyright matters for New Zealanders.

The bill was introduced on 13 May to establish a scheme entitling visual artists to receive a royalty payment each time an original work is resold commercially through an auction house, gallery dealer, intermediary, or professional involved in the business or dealing in works of art. It would not apply to any private sales, trading, or anything less than $500 in value. So we are talking about a very, very small catchment with this bill. In fact, I would hate to think how many pieces we would be talking about in New Zealand. As this bill will apply only to those pieces of art that are sold to New Zealand residents or sold in New Zealand, the pool will get a lot smaller.

It will be interesting to see at the select committee how many pieces of art this bill will affect. When we think of the cost of getting this bill through Parliament, the cost of setting up an agency, or an agency tendering to take on the right to monitor and to distribute funds from a pool to artists, will it be worth it, or will it be just setting up another agency with just another cost attached? Will it be just something else for people in New Zealand to deal with instead of focusing on what we should be dealing with, which is child poverty, raising education standards, addressing taxes, or providing a first-class health system, which are the real issues facing New Zealanders? I can tell members right now that those mums and dads who are struggling to pay their mortgages as a result of increased interest rates, increased petrol prices, increased food prices—and that is without talking about the cost of cheese, milk, and butter, which is just astronomical—are not really concerned about resale rights for artists. We are talking about a small pool of people when our country is facing much bigger issues, and those issues will, unfortunately, get worse.

The issue of resale royalty rights came about from France in the 1920s. In 1920 a resale royalty right law was passed in France that was known as droit de suite. It came about because of the wife of Jean-François Millet, who was an Impressionist painter who lived from 1814 to 1875. He died and his wife was left in poverty, but the price of his paintings was spiralling up. The Government at the time thought that that was really unfair, and in order to make it fair it brought in a law to allow her to get royalties from the resale of her husband’s work. This law was brought in at a time when there was no such thing as welfare or social security. The law was also brought in to assist the widows of the French artists killed in World War I. So the law was brought in for a reason, which was to allow the widows of artists who were living in poverty to get some money. We are in a much different place today in our society than we were back then.

If we look at overseas schemes, to date over 50 countries have a type of resale royalty right. Under a European Union directive in 2001, member countries that did not already have a resale royalty right had to introduce it into domestic law by 2006. Britain implemented the Artist’s Resale Right Regulations in February 2006. In Australia a resale royalty right measure has not been adopted. The Federal Government announced, in its 2006 Budget, an allocation of $6 million over 4 years to support visual arts, as an alternative to introducing the scheme. So Australia does not believe that the scheme would be good, and it found another way round it, just as New Zealand has for our struggling artists.

National will vote against this bill for a number of reasons. Artists should be able to sell their pieces of art freely, and they do, at market price, and they are rewarded for that. However, when people go to resell that piece of art, and there is a resale commission, which in effect is an additional tax, then the value of the art they bought will reduce immediately.

We also oppose the bill because it could encourage the exodus of art transactions, if the royalty is paid. By that we mean that if someone has a piece of art, he or she could sell it overseas, and not in New Zealand—

The ASSISTANT SPEAKER (H V Ross Robertson): Sorry, that was my mistake with the bell. The member still has 2 minutes. I see that the member has finished.

JUDY TURNER (Deputy Leader—United Future) : I stand to speak to the first reading of the Copyright (Artists’ Resale Right) Amendment Bill, which amends the Copyright Act of 1994 and inserts a new provision to establish a resale right for visual artists in New Zealand.

This resale right entitles visual artists to receive a royalty payment each time an original artistic work is resold on the secondary market. The provision does not apply to the first sale or transfer of an artist’s work, and does not apply to sales between private individuals. The scope of this bill is limited to original works of visual art—paintings, photographs, sculptures, and some jewellery. It expressly excludes works of architecture, original manuscripts of writers and composers, and artefacts like that. The scheme will be extended to all auction houses, galleries, dealers, and any other intermediary or professional who is involved in the business of dealing in works of art. Interestingly enough, auction sites such as TradeMe and eBay are excluded from the provisions of this bill.

United Future is opposing this bill because although similar schemes or variants of it exist in other countries—like France and, as has been mentioned, the UK—the application of those schemes is broader than what is proposed for this New Zealand scheme. Those countries also have long-established art markets and a greater population of art benefactors and investors, whereas the New Zealand market—particularly of works by New Zealand artists—is a comparatively fledgling market. It is only in recent times that emerging notable and collectable New Zealand artworks have attracted premium prices. United Future believes that as this emerging market develops, it could come under threat by this proposed scheme.

The bill has a tendency to be elitist. By restricting the scheme to visual artworks, it also starts to define, in economic terms, what art is.

A key argument for a royalty fee is to help artists, and, in particular, emerging artists, to get early recognition of their creative outputs, and to enable them to support themselves as full-time professionals. The claim is often made that a struggling artist, out of necessity, often sells work at a very low price, and thereafter derives no benefit from capital gain, should the artist’s work subsequently appreciate in value.

United Future asks when it is the State’s role to legislate in order to guarantee in virtual perpetuity an assured share of the potential capital gain of any goods or any service. If the State is concerned about ensuring the financial viability of professional artists, then it would be better to specifically target funding at assisting such groups. United Future looked very closely at what has happened in places like Ireland, where there has been a real flourishing of the arts, due to some really good Government initiatives—but not this kind of control and tracking.

One of the concerns I have had as I have been thinking about the ongoing implications of this bill is around issues of privacy. I can imagine an artist selling his or her piece of art, then having an extremely close interest in where it is, who is looking after it, and how it is being displayed. A lot of people who purchase art for their private collection do so for their own personal enjoyment; it is not necessarily an investment. I am not sure how appreciative they would be if, over the years, they are constantly contacted and asked whether they still own the art, where it is, and whether they are looking after it properly, because the artist has an ongoing sense of investment in the ongoing care and—

Sandra Goudie: What about the person who burns it?

JUDY TURNER: Exactly.

Another issue is the risk that a buyer takes, particularly an art investor. Very often, people are in the market with an eye to up-and-coming, developing artists, and are prepared to take a risk on someone who looks like he or she has some potential, but they do not have any sense of its future value. People I know who spend considerable amounts of money on art say that nine times out of 10 they go on their gut instinct and their own preference for a piece of work; they buy it because it is something they would like to hang in their house, knowing full well that if it never appreciates much in value, they will still enjoy owning it because they selected it according to their personal taste. So I am concerned about the privacy issue.

I am concerned that we are looking at this mechanism, when we could be doing a range of other things to better support visual artists in New Zealand. We also are getting into the whole issue of redefining what ownership is, and although I understand that artists often feel very personally invested in their artwork, the decision to sell it is one that they make at a commercial level. My own mother is an artist, and she often invests so much in something that she has painted that she will not put it on the market, and will not put it in any display where it is required to be available for purchase, because she does not want it to be sold. Artists make those calls all the time about their pieces. In other things that they do, commercial outcomes are very much the motive for their painting, sculpting, or producing the piece in the first place.

United Future would love to see greater support for artists. We think New Zealand could do better in that regard; we just do not believe that this mechanism is the best way forward. I agree with the first speaker from the National Party, who said we need to have a very thorough look at the whole issue of copyright in New Zealand and the way that we deal with the whole arts community—not just visual arts but music and everything else—to see whether we could do a lot better by it. United Future would prefer to support that type of robust investigation and legislation, not this bill, which feels a little bit piecemeal at this stage.

Hon PHIL GOFF (Minister of Defence) on behalf of the Minister of Justice: I move, That the Serious Fraud Office (Abolition and Transitional Provisions) Bill be now read a first time. I intend that the bill be considered by the Law and Order Committee and that the committee report finally to the House on or before 15 August 2008.

In summary, this bill disestablishes the current small and stand-alone Serious Fraud Office and transfers those important functions, powers, and commercial fraud investigative capabilities into the larger police infrastructure. This bill is the second of four major legislative initiatives by this Government to tackle serious and organised crime in New Zealand. Those four measures are the Criminal Proceeds (Recovery) Bill, the Serious Fraud Office (Abolition and Transitional Provisions) Bill, the Organised Crime (Penalties and Sentencing) Bill, and the Search and Surveillance Powers Bill. The new powers, penalties, and law enforcement improvements provided in these four bills will enable tougher investigation and tougher action against organised crime and gangs. These criminal groups plague our communities with intimidation, illegal drugs, identity fraud, serious property crimes, and violence.

This particular bill must be viewed in the context of the creation of the new Organised and Financial Crime Agency of New Zealand. This agency will be created within the police, and its mission will be to improve the safety and security of New Zealand by combating serious organised and financial crime through an inter-agency partnership approach. Amalgamating the skills and experience of the Serious Fraud Office and the police will bring a new capability to tackle corporate fraud and sophisticated organised crime groups. The Organised and Financial Crime Agency of New Zealand offers a mechanism to increase the attention given to serious and complex fraud, while significantly challenging those engaged in domestic and international organised crime. Accordingly, this bill disestablishes the Serious Fraud Office so that its existing functions and powers can be re-formed into a permanent financial crime task force within the Organised and Financial Crime Agency of New Zealand. Combining the skills, abilities, tools, and resources of these two organisations will allow us to better focus our forensic accountants and financial investigators on the unravelling of complex financial dealings wherever they may occur. These illegal financial arrangements are not the domain just of commercial fraud but the mechanism by which organised crime launders its money, hides its assets, and attempts to create a front of legitimacy for criminal wealth derived at the cost of New Zealanders.

The Serious Fraud Office was established in the wake of the 1987 share market collapse. However, since the late 1980s the nature and scale of fraud offending has changed. Fraud has become more complex and widespread. The results of globalisation, computers, and Internet access provide for levels of anonymity, speed, and identity fraud well beyond those of the 1980s. In addition, more than ever, organised criminal groups in New Zealand are using commercial and financial tools as part of their criminal offending. To their credit, I believe that the small group of people working in the Serious Fraud Office to date have done an admirable job of keeping pace with changes in the commercial fraud sector. They are to be congratulated. But the growth of fraud generally and the expansion of organised crime has led to the development of specialist commercial fraud and financial crime investigation teams in the police and other Government departments. This can result in jurisdictional overlaps, competition for expertise, difficulties with coordination amongst agencies, and reduced overall effectiveness.

Against that background, it makes sense to integrate the Serious Fraud Office within the police to allow the greatest degree of flexibility and coordination in the investigation of serious complex fraud and financial crime. This much-needed pooling of personnel and expertise will act as a resource for investigations around the country. It will ensure that the whole range of illegal and harmful commercial activity employed by both company fraudsters and organised crime can be addressed. Accordingly, Subpart 1 of Part 2 of the bill contains the provisions required to disestablish the Serious Fraud Office and amalgamate its current resources and expert personnel into the police. This includes provisions to ensure that the current Serious Fraud Office investigations and prosecutions continue under the new umbrella of the Organised and Financial Crime Agency of New Zealand.

Since the Government’s announcement that it would amalgamate the Serious Fraud Office with the police, we have received expert advice that much of the Serious Fraud Office’s investigative capability is linked to its document production and compulsory examination powers. These powers are seen as essential tools in the investigation, detection, and unravelling of complex commercial transactions and serious commercial fraud. They often facilitate the cooperation of good corporate citizens whose ability to assist authorities may be hindered by fears of potential civil liability at the hands of less scrupulous clients. The Government is committed to retaining this current investigative capability and ensuring that banks, accountants, and other professional advisers are able to assist the police. However, the Serious Fraud Office’s current framework for these powers is out of step with modern police practices and human rights safeguards that have developed to prevent potential abuse. Thus we have restructured these investigative tools to better reflect our modern expectations of criminal investigations and bring them into line with the Law Commission’s proposed comprehensive reform of the search and surveillance law. These powers will now be the subject of independent judicial authorisation, and applications for these orders will require approval by the Commissioner of Police or his delegate. In those rare instances where compulsory examination orders are sought in respect of individuals whose knowledge is obtained in a social or non-business context, such applications must also receive the additional approval of the Secretary for Justice. I do not consider these new safeguards to be of any hindrance to the efficient investigation of corporate or financial crime. Indeed, they are disciplines that are welcomed by the police.

As this bill relates to the repeal of the Serious Fraud Office Act, the powers provided to police for the investigation of serious or complex fraud are transitional. These powers expire on 31 July 2011 or an earlier date by Order in Council. It is intended that these powers will be eventually overtaken by the wider reforms set out in the Government’s Search and Surveillance Powers Bill, once it is considered and enacted by Parliament.

Finally, I note that clauses 35 to 43 of the bill retain the secrecy provisions from the current Serious Fraud Office Act. This type of investigation requires the analysis of large amounts of commercially sensitive information, and the retention of these provisions ensures that the current high standards of confidentiality are maintained by the Serious Fraud Office and will continue in the hands of the Organised and Financial Crime Agency of New Zealand. Officials will continue to look at this issue across the wider police operation to determine whether similar provisions should be put in place for all police investigations.

Some will question the disestablishment of the existing Serious Fraud Office. However, I have confidence that combining this small specialist office with the greater resources and support structures of police will have only benefits for the investigation of serious fraud throughout New Zealand. I thank those existing staff and experts within the Serious Fraud Office for a job well done, but they should now look forward to the future and the even greater benefits that their expertise will bring to all New Zealanders. Their ability to investigate and capture serious or complex commercial fraud will be enhanced, and now their financial investigation expertise can be used to capture P manufacturers, drug smugglers, gangs, and other violent, organised criminal groups that threaten and destroy the lives of New Zealanders every day. I commend this bill to the House.

SIMON POWER (National—Rangitikei) : I thank the Minister for outlining the provisions of the bill. If the bill passes its first reading, the Law and Order Committee will welcome the opportunity to deal with this issue. In particular, I note the report-back date of 15 August 2008. It was interesting that when the Organised and Financial Crime Agency of New Zealand was first mooted as a good idea, everything was going to be up and running by 1 July this year—a date that is now well out of reach.

National, of course, supports all moves to deal with gangs and organised crime. But I stand here today in the House to say that the National Party is extremely concerned about the disestablishment of the Serious Fraud Office and will be opposing this bill at its first reading. Indeed, the Minister’s statements about the establishment of the Serious Fraud Office in the wake of the 1987 sharemarket crash were, without sounding insensitive, on the money, and it seems to me that there has never been a more important time, with the large number of finance company collapses that we have seen in recent months, for an organisation like the Serious Fraud Office to do its work, and I will come back to that shortly.

The National Party remains slightly unconvinced about the birth of the Organised and Financial Crime Agency of New Zealand. We know, of course, that the idea of an organised crime agency was launched at a hurriedly put together press conference on the same day that the former Minister of Corrections was due to come home from an overseas rugby trip with one of his officials who had been suspended from work at that time. We know from looking at background documents that very little policy work had been done leading up to that announcement. In fact, the powers that were to be held by the so-called Organised Crime Agency, as it was then known, were not clear, and it took months and months to get information about what sorts of abilities this particular organisation would have.

It seems unfortunate that with that policy work taking so long to get done this Government now wants this legislation rushed back to the House on 15 August, like the electoral finance legislation, the emissions trading scheme legislation, the real estate legislation, and the bail legislation. I urge the smaller parties in this House to think very carefully about voting for legislation that would remove the Serious Fraud Office from our law books. The Government is proposing a very substantial change, and at a time when the papers are describing work that is being done to deal with those people who have lost substantial amounts of money because of finance collapses. I ask other members of the House to consider these comments from an article dated 3 May entitled Blue Chip Investors Battle for Justice: “The Securities Commission is limited in what it can do about Blue Chip because it was property investment. Property is not covered by the Securities Act …”, meaning that the Serious Fraud Office has an extraordinarily important role to play here. In fact, Grant Liddell, the interim appointed chief executive of the Serious Fraud Office who was put in that position by sloppy planning by the Government over the new Organised Crime Agency, said: “The SFO has spent a substantial amount of time and resources” on Blue Chip since the February liquidations. The paper itself describes the Blue Chip issue as “firmly in the soon to be disestablished SFO’s court.” Now, whether or not an investigation goes ahead, we know that Mr Liddell, who is the existing director of the Serious Fraud Office, had this to say: “We have had over 150 investors contact us and have made a large number of inquiries concerning the issues in this case, and we’re nearly at a point where I will determine whether an investigation using our statutory powers ought to proceed.”

What the Government is proposing here today is to replace this body—and let us be clear about this, because the Minister, in fairness to him, did allude to this—that has already undertaken substantial investigations into these issues, with a body that has fewer powers to make those investigations. Although any organisation that has as its goal the tracking down and prosecution of organised crime and gangs is to be welcomed, one cannot help but feel that fraud could well be sidelined if a specialist organisation is not retained to deal with that particular issue. In fact, the Minister of Justice herself has confirmed that gangs will be “very much the focus of this new OFCANZ body”, which is fine in itself, but that does not give us confidence that these complex issues of fraud will be dealt with in the same way.

In his final annual report, retiring Serious Fraud Office director David Bradshaw said that serious and complex fraud remained an issue, but that every year several cases his office investigated would not be regarded a priority by police. Mr Bradshaw also questioned whether the balance of New Zealand’s laws was tipping too far in favour of the rights of defendants. Although I do not stand here to agree with Mr Bradshaw on every matter that he raises, I can say that one thing that would concern National is if, on the removal of the Serious Fraud Office, fraud took second place at the very time when expertise is needed to deal with these issues around so many collapsed finance companies.

National is not convinced that this legislation, nor the background work behind the Organised and Financial Crime Agency of New Zealand, has been well-thought-through. We are not convinced that a body that is also charged with dealing with gangs and organised crimes, but has fewer powers than the Serious Fraud Office, would be as intent or as focused on issues of fraud as the Serious Fraud Office has been. I am not saying that the Serious Fraud Office has not had its difficulties. I am saying that to replace it with a body with a wider mandate across organised crime and gangs, but with fewer powers, at a time when we have seen about $1.6 billion of investors’ money lost, is not a smart thing to do.

On that basis I can stand and let the House know today that, of course, National shares concerns about issues relating to organised crime and gangs, and supports any moves made by any political party to deal to that scourge of society, but wiping out the Serious Fraud Office at a time when specialist fraud powers are needed to deal with the current climate around finance companies seems to lack a considerable amount of thought and foresight.

CHARLES CHAUVEL (Labour) : It is disappointing to hear that the National Party appears to have changed its position on the Serious Fraud Office (Abolition and Transitional Provisions) Bill, but I suppose it is no surprise given that positions seem to change quite regularly on that side of the House.

Hon Mark Gosche: They will change it again by tonight.

CHARLES CHAUVEL: Well, it is to be hoped, as my friend and colleague Mr Gosche says, that the position will change back again to what it was in September 2007 when Dr Worth, the associate justice spokesperson for the National Party—

Hon Mark Gosche: Who?

CHARLES CHAUVEL: That is probably a slightly unfair question to ask about Mr Worth. He is often heard speaking late at night in the House. But he said: “Organised crime spans the width of the criminal activity spectrum. It is a good plan to scrap the Serious Fraud Office in favour of an Organised Crime Agency within the New Zealand Police.”

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

CHARLES CHAUVEL: Prior to the House rising for the dinner break I noted that Dr Worth, the associate justice spokesperson for the National Party, had initially expressed support for this bill. It is delightful to see Dr Worth in the House, and I am sure he will take a call to reiterate that support. Before he does I thought I would make a few brief comments about the bill as introduced, which I understand is going to be referred, when it passes its first reading, to the Law and Order Committee. Regrettably, that is not a committee of which I am a member, so I will not have the pleasure of being able to consider and deliberate on the legislation, but I do want to commend the bill to the House. Clearly, the nature of fraud has changed since the original Serious Fraud Office was established in 1990. Factors such as globalisation, the Internet, and identity fraud on a far greater scale allowed by technology than was ever envisaged previously mean that the threat posed by fraudsters warrants a new and bold approach.

It is interesting to note that the United Kingdom and Australia have already taken steps to modernise their laws relating to the detection and prevention of serious fraud. As early as 2004 the United Kingdom Government proposed modernising its fraud laws to better equip police and prosecutors to deal with the challenge of combating fraud in the 21st century. The reforms were designed in the United Kingdom to address the concern that the law, as it stood, focused on specific frauds, and failed to adequately take account of the wide range of possible fraudulent activity or to keep pace with rapidly developing technology. The responsible Minister noted at the time that the Government was aiming to create laws that were effective and responsive to the society we live in. The proposals would overhaul the law to simplify it, cast its net wider, and make it easier to secure just convictions.

So it was that in 2005 the Home Office produced a report summarising community concerns regarding modern forms of crime and noted that these would be reflected in the development of a serious organised crime and police bill. That report specifically acknowledged that modern fraud is often committed across national borders, using advanced technology. In March last year, the United Kingdom Government put forward a further proposal to amend and enhance the powers of the United Kingdom’s Serious Fraud Office in foreign bribery cases. The Australians followed in 2005; in October the Australian Taxation Office completed an analysis of trends in tax evasion and serious fraud in Australia, noting the emerging threat of identity crime. The Australian Crime Commission, which is the body of the Commonwealth charged with countering organised crime in Australia, produced a report earlier this year on current trends in organised crime. That report notes the growing influence of transnational organised crime, international money laundering, identity crime, and high-tech cyber-crime, and it highlights the importance of collaboration between Government agencies to combat such crime.

When the provisions of this bill are considered, it is obvious that this legislation is designed to ensure that New Zealand is similarly well equipped to combat these new types of fraud. The development of a new Organised and Financial Crime Agency of New Zealand offers a new mechanism to increase the attention given to serious and complex fraud, tacking on both domestic and foreign fraudsters. Clearly, the Organised and Financial Crime Agency of New Zealand will need to work with national and international law enforcement and intelligence agencies, as well as with border agencies, the regulatory authorities, the financial authorities, and a range of other Government agencies. It is good to see that the agency will be hosted by the New Zealand Police and headquartered in this fine city of Wellington.

With those words I welcome the legislation. I commend it to the House and eagerly anticipate Dr Worth’s speech in support of it.

Dr RICHARD WORTH (National) : It is always an excellent outcome to be invited by an opposing member of the House to comment on legislation. I am delighted to take this call in respect of the Serious Fraud Office (Abolition and Transitional Provisions) Bill. My delight, I hope, is tempered by dismay from Mr Chauvel that I will not take the stance he so keenly wants me to take. National opposes this legislation, and I believe that there is very good reason for doing that. I remember, as a lawyer, the circumstances when the Serious Fraud Office was set up in 1990 following the 1987 sharemarket crash, when there was widespread public concern about corporate misconduct.

Just thinking back to those days, some 18 years ago now, I say that there were companies that developed overnight, including the like of Omnicorp and Equiticorp, with practices that were later judged to be extraordinarily shady. So it was that the Serious Fraud Office Act was enacted in 1990. It was modelled on what had been a proven institution in the United Kingdom—the Serious Fraud Office; an organisation of the same name—with the intention that this small, specialist, multidisciplinary agency would fill a gap between existing law enforcement and regulatory agencies. Although it is right to say that since 1990 the nature and the scale of fraud offending has changed, it is also the case that the changes that have occurred are changes that are—and, I am certain, will be—within the scope of the Serious Fraud Office as it is now established to deal with.

I would make the comment, however, that over the period that the Serious Fraud Office has been established, some doubts have been expressed about the culture of that office. Many of the comments are anecdotal. Some of the comments may not be true, but it is right to say—certainly from a lawyer’s perspective—that some of the criticisms of the Serious Fraud Office that have ascribed to some members of that office an almost cowboy character have done nothing to advance the image of that office. So a culture change may well have occurred, but certainly there was a period where the Serious Fraud Office was bedevilled by its image.

I also say that in the world of pursuing so-called white-collar criminals, there are particular difficulties. Those charged with such offences often have substantial means and substantial resources that can be deployed in defence of charges brought against them. So although it is right to say, perhaps, that the nature and scale of fraud offending has changed, nevertheless many of the activities and structures that are now being set up to take advantage of criminal activity are not, in any way, new structures.

One of the major problems, I suggest, with this bill, which the Government seems determined to pass, is that it strips away significant powers that the Serious Fraud Office had. At the time, those powers were seen as powers of substantial constitutional significance. One of those provisions, section 27 of the Serious Fraud Office Act, is headed “Privilege against self-incrimination no excuse”. There is an American expression, “Pleading the Fifth Amendment”, and that is, in effect, claiming the privilege of not incriminating oneself. And here, in that section, that privilege is swept away with these words: “No person shall be excused from answering any question, supplying any information, producing any document, or providing any explanation pursuant to section 5 or section 9 of this Act on the ground that to do so would or might incriminate or tend to incriminate that person.” There was good justification for that provision in 1990, and there remains great justification for the retention of that provision in 2008. Just in the last 12 months we have seen some 19 finance companies collapse. We have seen activities, particularly activities involving the two companies Blue Chip and Bridgecorp, that clearly called for intensive investigation.

It was under section 9 of the Serious Fraud Office Act that the director of the office could require production of documents. He could require—it has always been a male director—a person whose affairs were being investigated, or any other person for that matter, to attend before the director and to answer questions in respect of any matter that the director had reason to believe might be relevant to the investigation. Those are powers needed today to tap into the real issues that touch serious fraudulent activity, yet the Government, with what it says is its passion and its commitment to law and order, would see those provisions removed. This is assuredly not the time to do that.

So here we have the Government moving to make it easier for white-collar crime to occur, and having no real justification, at all, for legislation of the type that would abolish the Serious Fraud Office and set up an organisation called “OFCANZ”—the Organised and Financial Crime Agency of New Zealand. It is held out that this agency will be able to do a better job than the Serious Fraud Office. I think not. I think that the Serious Fraud Office is well resourced. It has a competent director in Grant Liddell, who has an enviable reputation in the law. I think that the Serious Fraud Office is more than able to tackle, on a strong basis, these aspects of white-collar offending that concern us all. So it is that National, I am certain, is correct in stating its opposition to this bill with its lack of merit.

RON MARK (NZ First) : It is quite interesting listening to this debate. I will put on the record before I start that New Zealand First has agreed to support this bill to go to a select committee. I note, with a degree of satisfaction, that it just happens to be going to the Law and Order Committee, the committee I chair. I point out that that is an interesting committee, because it has seven members: three National members, three Labour members, and one New Zealand First member. I also point out to the House that much of the criticism I have heard here tonight from National members, who have now indicated that National will vote against this legislation at this stage, was not aired when this bill was first publicised. In fact, since it first became apparent that this bill was going to come to the House, the concerns that are now being expressed by the National debating team today have simply revolved around the concerns that New Zealand First raised right at the outset. I am left blinking and wondering, because Mr Power did not exactly express those concerns then. But I have a sneaking suspicion that he has had a bit of counsel along the way somewhere; he certainly now recognises one of the concerns that New Zealand First had right at the outset.

We understand that this is the first piece of legislation within a package of legislation that is all aimed at dealing with organised crime, serious fraud, money laundering, and the recovery of assets gained through the illicit activities of organised crime—recovery of assets legislation. I guess both Mr Power and I were a little bit gobsmacked when we had the recovery of the proceeds of crime bill come to the Law and Order Committee, because contained within that bill we found that the recovery body designated in that legislation to be responsible for taking action to confiscate the assets of criminals was to be the Serious Fraud Office. Mr Power and I sort of looked at each other; I do not know whether we were looking at each other for the same reason but I think we had thoughts going through our heads as to why the Serious Fraud Office would be doing that task.

I guess that one of the other reasons New Zealand First did a double take is that, quite frankly, everybody knows that the relationship between my leader, the Rt Hon Winston Peters, and the Serious Fraud Office over the years has not been a very comfortable one for the office. The battles he has had, and the statements he has made over the years, in respect of its failure to investigate, and its failure to prosecute, certain matters relating to the wine-box inquiry are legendary, and are infamous. The clashes at the select committee table, when it was alleged that the head of the Serious Fraud Office was getting advice from a Minister, are well documented, and people could be forgiven for wondering why New Zealand First would have any interest in or any concerns whatsoever about the notion, the concept, the idea of disestablishing the Serious Fraud Office, because it is an organisation the Rt Hon Winston Peters has often said he has absolutely no faith in.

New Zealand First has been told by the Government that it believes there are many reasons now why the Serious Fraud Office has passed its use-by date and its services are no longer required, and there are reasons why its functions should be picked up by the police. The Government believes that the police have developed a capability with the finance intelligence agency, and that they are quite capable of picking up this role. The Government believes that the Serious Fraud Office has become a little insular and a little isolated, and that it has about 25 new cases a year but that some do not get pursued. That is funny, because in all the time I have sat on the Law and Order Committee, one of the things I have been gravely concerned about is the number of fraud cases that have been taken to the police but never ever picked up. I have three major cases sitting on my desk in my office right now—one of them going back to the Tui Cooperative Dairy Co. days—cases that the police have been repeatedly requested to investigate but they have failed to do so. They have been requested to prosecute, but they have shown little interest in doing so.

So we get to this point with some reservations and some concerns. New Zealand First has agreed to move this legislation forward to the select committee, but we will be looking for a broad view by all participating members of the committee as they look at the total issues and seek to assure the public—by either endorsing the legislation as it is currently written, or amending it—that this new body will be able to perform the functions, the tasks, for which it is going to be made responsible. We are concerned about the denigration of the powers of the investigating body—the Organised and Financial Crime Agency. I think the bottom line is that although we understand the concerns that have been expressed by the Minister today, and by other people, as to the range of powers there now should be within the police fold, or the range of powers that should now be vested in the commissioner through this body, we also do not underestimate the need for such powers when investigating high-level white-collar crime, money laundering, and organised crime on this scale and at this level. We understand the Minister’s reason for having judicial oversight of the exercising of those powers, but at this point I think it would be fair to say that we want to discuss and pursue those matters further.

It worries us that on television tonight there was a lady from Tauranga—90 years of age, with the name of Gwendoline—who stands to lose her home as a result of Blue Chip’s activities. It interests us that the allegations and accusations are swirling around Mr Bob Clarkson right now. We wonder why he is not now to stand in Tauranga, but we know that many people in Tauranga are talking about him and Blue Chip. We saw a lady on television tonight who is losing her home, and we wonder to what level and depth the Serious Fraud Office has already commenced its investigations into Blue Chip’s activities. So the National Party and Dr Worth are quite right to highlight the need for Blue Chip to be investigated thoroughly by a fully competent body whose powers have not been in any way diminished.

New Zealand First proudly stands by the fact that its reputation has been as a party that wants to clamp down on and wipe out organised crime as much as possible. We want to see credible law enforcement agencies that are empowered to do so. We believe that for far too long the police have not lived up to their obligations and responsibilities with regard to investigating and prosecuting fraud. So we want to be absolutely assured, in supporting such a bill as this one, that the police will pursue with vigour their responsibilities and that we will not continue to hear in the future the same sorts of excuses and the same sorry tales that we have been hearing for the last 10 years about police failure to investigate fraud.

This legislation will place a serious and onerous task upon the New Zealand Police—a task we do not expect them to shrink from. If in the examination of this bill and in the hearing of submissions New Zealand First is in any doubt whatsoever as to the commitment, the capacity, and the drive of the New Zealand Police to investigate and prosecute serious fraud with vigour, then there is a very strong possibility that we will not support this bill.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Tēnā koe, Mr Assistant Speaker. Tēnā tatou katoa e te Whare. Tēnā koe, Anikaaro. Yesterday the whole context of fraud, corruption, and serious crime took an interesting and, I have to say, a bloody pleasing turn—

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

HONE HARAWIRA: —with the announcement that victims of South Africa’s apartheid regime could finally sue the corporate world for all the help that it gave South African police and military intelligence squads during the murderous years of apartheid. Many of those victims are now represented by an organisation called Khulumani, which means “to speak out”. Khulumani is suing the really big boys like BP, Barclays, Fujitsu, Daimler-Benz, Deutsche Bank, and others for their corporate investment in a system of racial domination, a system known the world over for harassment, intimidation, torture, violence, and murder. That corporate investment was in the form of finance, oil, weapons, and corporate technology. So although it is sad to be reminded of the horrors of apartheid, it really is pleasing to see that those big companies that profited from the oppression and repression of the blacks of South Africa are finally being dragged, kicking and screaming, before the courts to answer for their complicity in the deaths of the thousands of people whose lives were destroyed under apartheid.

Meanwhile, back here in good old Aotearoa, are we going after the big criminals, the corporate raiders, the big thieves who have blighted the lives of tens of thousands of ordinary New Zealanders? Like hell we are. Although our Serious Fraud Office is supposed to have been going after the big crooks charged with defrauding the public of amounts greater than $500,000, complex fraud, and fraud of major public concern, in fact it has been spending most of its time chasing the little boys, like the $25,000 worth of improper expenditure by a school in Hamilton. Yes, the office has averaged something like 13,000 fraud investigations a year, but while it has been doing all that the big bandits like Blue Chip and Bridgecorp get away scot-free.

I shall give a bit of background on these guys. Last year the property finance company Bridgecorp went into receivership owing $500 million to 18,000 investors, and this year 22 Blue Chip property investment companies collapsed, with 2,000 investors being owed some $80 million. Guess what? To no one’s surprise, although the Serious Fraud Office is currently investigating Bridgecorp and Blue Chip, it would appear that a prosecution might not necessarily follow. The fraud was so bad, in fact, that the Serious Fraud Office actually called it a “deliberate, dishonest presentation of records so as to give investors a false position of the company’s financial position”. Yet, for all that, the pathetic conclusions at the end of last week were that no matter how explicit the corruption appears to be, how blatant the theft, or how improper the activity, apparently the Serious Fraud Office reckons that a prosecution might not necessarily follow.

It is this kind of rank hypocrisy, this racist protection of the corporate world, that really, really upsets me. The sum of $58 million was stolen from mum and dad investors, and we are expected to just sit back and watch while the thieves simply change their jackets, go back out, and do it all over again, and while Māori and Pasifika get thrown in jail for pinching mum’s handbag and stealing dad’s car. Blue Chip steals millions and millions of dollars of investor money then goes belly up, dragging down 19 other companies, and the “UFO”—the “U can’t be serious” Fraud Office—lets them get away with it. Sure, the Commerce Commission is looking into breaches of the Fair Trading Act and whether investors have been conned by misleading representations, but these guys are not going to jail any time soon, and everybody in this House knows that. In fact, when I heard Blue Chip founder Mark Byers say he wanted to put some of his own money into a compensation fund, the first thing I thought of was a Tui ad: “Honest, I’m gonna give it all back. … Yeah, right!”.

While the Blue Chip crooks get away with doing far, far more damage to far more people, far more often, instead of the “UFO” being beefed up and given some serious grunt, the Serious Fraud Office is being disestablished and its functions are to be transferred to the Organised and Financial Crime Agency, which will have increased search and surveillance powers, and which will be targeting money-laundering and large-scale drug-trafficking money, with a central focus on countering the billion-dollar methamphetamine market. That is cool; let us do everything we can to nail the meth gangs and cut off their supplies of finance, ingredients, cooks, and the dumb and desperate fools who are sucked into selling P to their own relations. But given how quickly the Taser got used to zap all the wrong people—like the way that a cop slipped and zapped the wrong person, the way that another cop ended up zapping himself, or the way that those lazy buggers zapped that poor guy lying face down on the footpath with his hands handcuffed behind his back—let us not get so gung-ho that we do not keep a very careful eye on the new search and surveillance powers included in this bill.

The Law Commission’s 500-page report on search and surveillance laws, which was released last year, noted huge inconsistencies in the powers of the police and non-police agencies, and it called for a wide-ranging review to bring search and surveillance laws together into one comprehensive statute. Given that we have not even seen the proposed new search and surveillance bill yet, the Māori Party members are naturally very concerned about the granting of new powers to the police, and about the way that those powers will be independently monitored to guard against their excessive use against Māori communities.

I note that this new Organised and Financial Crime Agency will also be charged with going after cyber-criminals—the crooks of the new age; the Internet fraudsters. And, no offence to the group of officials that is stitching this whole thing together, but given the way that the Inland Revenue Department lost $60 million recently, and the fact that a few agencies have just been conned by a fraudster from within, I struggle to see how a hotchpotch of the Ministry of Social Development, the Department of the Prime Minister and Cabinet, the Department of Internal Affairs, Te Puni Kōkiri, the Ministry of Pacific Island Affairs, the Department of Corrections, the Customs Service, the Department of Labour, the Inland Revenue Department, the Ministry of Health, and the Ministry of Fisheries will be able to put together the infrastructure, the expertise, and the information technology intelligence needed to respond to the highly intricate nature of Internet crime. It took the FBI and the Dutch police to track down that kid in Whitianga who crashed the entire computer network of the University of Pennsylvania. We now know that he has earned more than $40,000 as a professional hacker, making software especially to crash networks. And we are supposed to be getting Work and Income to do the investigations over here? I can just see another Tui ad coming on.

Organised crime is significant, it is pervasive, and its reach is global, but the pain it causes is very, very local, and beating it will take skill and cooperation. The Māori Party will support this bill going to a select committee to ensure that these issues are given the serious consideration they deserve. But we challenge this House not just to focus on the crimes of the poor but also to target the rampant and criminal activities of the financial classes, the big boys who do not steal just from families but who, as the multibillion-dollar bail-out of Bear Stearns in America proved, can bring down whole countries. Tēnā koe, Mr Assistant Speaker. Tēnā tātou e te Whare. Tēnā koe, Anikaaro.

CHESTER BORROWS (National—Whanganui) : I rise to speak in respect of the Serious Fraud Office (Abolition and Transitional Provisions) Bill to clarify a number of issues raised by my colleagues Simon Power and Richard Worth and in response to some of the comments made by Mr Ron Mark. I want to look at the history of the Serious Fraud Office Act 1990. I note that that legislation had its third reading in June 1990, a month before the New Zealand Bill of Rights Bill was introduced to the House.

National’s major problem with the bill as it reads at the moment is that it takes away a number of the serious investigative powers that are open to the Serious Fraud Office. The reason why it is said that these powers should be removed is that the legislation predates the New Zealand Bill of Rights Act. It seems strange to me that the Serious Fraud Office bill would have been introduced to the House and then given its third reading within a month of the introduction of the New Zealand Bill of Rights legislation, and not be given the protections of the New Zealand Bill of Rights Act by the same Government that introduced it, without good cause.

I say to the House that good cause exists right now. We have not seen an environment like this, with a number of finance companies going under and mum and dad investors being hurt, since the crash of 1987. Of course, the Serious Fraud Office grew out of the 1987 crash. It is interesting to note the Rt Hon Jonathan Hunt’s comments at the time, in respect of the Serious Fraud Office Bill. During its second reading debate he said: “The bill provides the Serious Fraud Office with forceful and rigorous powers to combat serious or complex fraud. It also provides protections to deal with possible abuses of those powers. While the passage of the bill will not, of course, eliminate fraud, it will assist in the battle against serious and complex fraud.” He commended the bill to the House. The comments he made at that time, from the other side of the House, are just as fitting today as they ever were.

It was also interesting to note the comments made before tea by the Hon Phil Goff. A comment was made in respect of companies like Blue Chip going under. He made some disparaging comments in relation to Blue Chip and asserted that National wanted to protect its mates. We have to remember just who has been affected by the collapse of Blue Chip and other similar companies.

One of the victims happens to be my mother-in-law. She is a lady who had very little money but she had an asset, which was a nice home in Nelson. It was worth a lot of money. She decided she wanted to shift to be close to her family, which includes me, fortunately. She shifted from Nelson to South Taranaki. She was able to buy a house of much less value than the one she sold, so she had a significant amount of money to invest. Her money was invested, on the advice of advisers, in companies, of which Blue Chip was one and Bridgecorp was another. Those companies went under, and she did her dough. She is now 82 years of age and does not have much, except her home, and not a lot of assets. Now is not the time to be withdrawing those powers from the Serious Fraud Office.

National believes that the Serious Fraud Office has had some concerns, and of concern is the number of million-dollar costs that have been awarded against it. Also, we note the way the investigations have been run over time. A number of serious charges have been thrown against various defendants, and gradually they have fallen away. A number of companies have gone down for what have been a large number of more trivial offences, such as using a document, and the rest, which any constable in the Criminal Investigation Bureau could prefer and successfully prosecute.

National’s concern, though, is not only the reduction in powers under the Serious Fraud Office Act and their dissipating away once they have moved to the police but also the state of fraud investigation in this country at the moment at the hands of the police.

Last year in the review of the Police Act a number of us heard speakers at a seminar talking about what the review would mean. One of those speakers was a man called Ron McQuilter, the Managing Director of Paragon New Zealand. He started his discussion with a true case, and I will read just a few lines of it to the House: “John is a senior auditor with a Government department. In September last year John lodged a complaint with the police that an employee had stolen $80,000. After hearing nothing for 4 months, in January 2006 John wrote to the police inquiring as to the progress of his complaint. Ten days later they called to say they could not find the file, but they would get back to him. On 26th February 2006, some 5 months after he had laid the complaint, John received this letter.” Mr McQuilter proceeded to read out to the seminar a letter he had received from the police that said that the police would not be investigating the complaint—in spite of the fact that it was an $80,000 theft and the offender was identified—for several reasons out of a possible five reasons: it was not a significant priority at that time, they did not have the staff to do it, and so on.

Later on, Mr McQuilter got in touch with the detective senior sergeant who had written him the letter. When he spoke to him, the detective senior sergeant said: “We can’t handle it at this time. We can’t give a time frame, and we don’t like it any more than you do.” The fact is that corporate fraud, or fraud in general, has not been listed as a key strategy of the police for a number of years because they are focusing on violence, drugs, traffic, organised crime, burglary and theft from or of cars.

The question then is: can it really be that bad? Mr McQuilter said: “Well, let us consider the police statistics themselves.” Police statistics for the year 2005-06 detail that the resolution rate for dishonesty complaints is 15.5 percent out of 36,407 complaints in Auckland alone, and 32,125 complaints in Manukau. That means that in these two districts alone some 57,491 complaints per year, or 4,790 complaints per month, are not resolved. The total number of non-resolved dishonesty complaints for the entire country is 184,965 per year, or 15,500 per month.

The problem is that the police do not have the ability, either through resources or manpower, or for whatever reason at the moment, to do the job on fraud that people expect them to do. Moving the Serious Fraud Office into the police poses a number of concerns. One of them is that they will be used to clear a backlog of other fraud that is not being attended to at the moment. The other concern is that part of the Organised and Financial Crime Agency of New Zealand initiative will see the fraud aspect being run alongside such things as a national gang strategy and operations relating to gangs. Gangs will be a distraction. There needs to be an emphasis on gangs. The Minster has admitted she has dropped the ball on gangs when she admitted she dropped the ball on P. But that emphasis will be to the detriment of dealing with fraud investigations.

The initiative for this particular legislation came in only in the last half of last year, in the middle of a Law and Order Committee consideration of the Criminal Proceeds (Recovery) Bill. It was done ad hoc and sloppily. In December the Minister was sent by Cabinet to go back and have another think about it. We now find it before the House in a form such that Government members cannot tell us how it is will work. In answers to questions I have received back in the last 2 days, the Minister cannot even tell us how many people will be working in the office, how it will be manned, or what other staff requirements there will be.

National is not prepared to support this piecemeal, on-the-trot legislation at this stage, although we see that it has a number of laudable objectives. We will deal with clear law that is open and transparent before the House and before the New Zealand public. That is what we are here to do and that is what we as members of this House are tasked to do.

NANDOR TANCZOS (Green) : The Greens are supporting this bill going to a select committee. However, we do so with a number of reservations and after some lengthy discussion among ourselves. I guess we take a position similar to the one outlined by Ron Mark on behalf of New Zealand First.

The Government has made the point that the nature and scale of fraud offending has changed since the 1990s. Fraud, it says, is now made more complex by globalisation, computer and Internet access, and identity fraud. It talks about the anonymity and speed that these things allow. It says that although there still exists a category of fraud that is strictly the criminal abuse of commercial practice and not covered by the taint of organised crime, there is a clear track of convergence between organised crime interests and the commercial world. The more serious organised criminal enterprises, the Government says, are using commercial and financial expertise as devices not just to launder the proceeds of the crime or to accrue assets but also to utilise financial processes and decision makers within the system for criminal financial gain.

This may be so, but it does not demonstrate to us that a dedicated Serious Fraud Office is no longer required. Although there is no doubt that organised criminals use complex financial transactions both to hide their wealth and to create further wealth, that has always been the case, and I am not sure exactly why that is an argument for disestablishing the Serious Fraud Office. So our first concern is that the Government has not clearly demonstrated the need for this legislation.

I heard Mr Goff speak at the beginning of this debate about how this legislation will allow the police to crack down on drug dealers in particular. I guess he does not mean the shareholders in DB Breweries Ltd, Lion Nathan Ltd, Philip Morris, British American Tobacco, or Glaxo Smith Kline. I know that these kinds of bills—and the Criminal Proceeds (Recovery) Bill is another very good example—always hold up drug dealers as being the most heinous type of criminal, despite drug transactions being made generally on a “willing buyer, willing seller” basis. But in this focus on targeting drug dealers, the fear of many is that white-collar criminals, who actually defraud both the Government and ordinary people of their property, who often leave elderly people robbed of their savings, and who reduce unwary investors to penury, will become simply a secondary concern for investigators. That is not to say that gangs do not engage in activity that robs often the poorest people and causes tremendous hardship in their communities; it is simply to reiterate the point made by a number of previous speakers that the effects of crime are not lessened by being of a corporate nature and that, unfortunately, the discussion focused on crime and criminal investigation too often centres on a class-based myopia. So that does reduce the focus on white-collar crime.

In any case, when we look at what the organised crime unit is likely to spend most of its time doing, there is no doubt that busting gangs is much more sexy work for the police, and actually also a whole lot easier, because unravelling the complex strands of financial crime is an enormously difficult task. Perhaps it is that complexity that has meant that the Serious Fraud Office has not been as effective as many had hoped when it was established.

Certainly, it is no incentive for the police to go after white-collar criminals. This, I guess, is really our second reservation, because although the Government has assured us that the focus on serious fraud will not be lost in this new organised crime unit, I am not at all sure what the guarantees are within the bill. I am unclear what will lock in a focus on serious fraud, and without such an assurance we cannot really be satisfied. That is not to say that the Serious Fraud Office itself has been satisfactory in this area, anyway, but the solution to that, as my colleague Mr Harawira indicated, may well be more a case of boosting the Serious Fraud Office, perhaps reforming elements of its legislation, and ensuring that it undergoes a meaningful culture change rather than wrapping up the agency and folding it into an organised crime unit.

So, as I indicated, the Greens are supporting this bill going to the select committee, because there are issues here that need to be properly discussed and aired, and we think it is important to provide an opportunity to hear from the public, and from experts in the field, about the best way forward in addressing these serious issues. But we give no assurance of further support unless the evidence more clearly stacks up that this is the best way to move forward.

Hon NANAIA MAHUTA (Minister of Customs) on behalf of the Minister of Justice: I move, That the Serious Fraud Office (Abolition and Transitional Provisions) Bill be considered by the Law and Order Committee and that the committee report finally to the House on or before 15 August 2008.

• Motion agreed to.

Hon Dr MICHAEL CULLEN (Leader of the House) : I move, That the Parliamentary Service Amendment Bill be now read a first time. At the conclusion of the first reading debate I will move that the bill be referred to the Standing Orders Committee with an instruction that the bill be finally reported back by 21 July 2008. For reasons I will explain in my speech, it is essential that this bill passes before the House rises for the election.

The bill provides for the Parliamentary Service to maintain a longstanding practice of giving administrative and support services to candidates who are to become members of Parliament. It addresses a technicality that relates to the status of candidates who will clearly be elected but have not yet become members of Parliament. It has been the practice over many years to make some travel and accommodation entitlements available between polling day and the day that members are declared to be elected, to those new candidates who clearly will be elected. It has also been the practice to continue to give support during that period to those candidates who were members of Parliament before polling day, and the duration of that period has usually been approximately 2 weeks. The practices allow contractual arrangements such as telecommunications and office leases to continue uninterrupted. The practice has also allowed new candidates who clearly will be elected to travel to Wellington to participate in the processes of forming a Government. Doubt has arisen that these past practices were authorised by legislation and therefore are probably illegal under the Public Finance Act. This legislation will remove any doubt about the lawful authority of continuing these practices.

It is necessary for this legislation to be brought to the House at this time to provide for the continuation of funding entitlements following the close of polling at the general election later this year. Section 7B of the Parliamentary Service Act 2000 requires that funding entitlements administered for parliamentary purposes must relate to specified persons, and those specified persons are members and former members. There are no references in the legislation to candidates for election. Therefore the Parliamentary Service is constrained from maintaining the longstanding practice of giving administrative and support services to candidates who are to become members of Parliament.

It is clearly stated in the Constitution Act 1986 and the Electoral Act 1993 as to who is a member of Parliament. Members are persons who are elected in accordance with the Electoral Act 1993, and they continue in office until the close of polling day at the next general election. From the day after polling day until the day elected candidates take office, there are, in one sense, therefore no members of Parliament in existence. As the Parliamentary Service has authority to approve expenditure in respect of members of Parliament and former members, it is doubtful at best as to whether the service can continue to approve expenditure for certain candidates for election from election night to the time when people are declared to be elected.

It should be noted that this does not apply to Ministerial Services since there is a period after an election when a person can continue to be a Minister even though he or she has not been elected as a member of Parliament, and, therefore, authority to continue expenditure for Ministerial Services continues and does not require further legislative authority.

If the legislation is not passed it creates the risk of incurring unnecessary but not avoidable additional expense for the taxpayer and the Parliamentary Service, because contracts for certain support arrangements would have to be cancelled and then re-established some 2 weeks later. It could prove to be at the least very inconvenient for the short period between the election and the time when candidates formally become members, because the service is currently constrained from providing entitlements to candidates. The bill therefore recognises that candidates need to be supported by the Parliamentary Service after the election, and that the Parliamentary Service requires clear lawful authority to provide this support. There will be no new entitlements of costs, compared with previous practice, as a result of this bill. It merely in effect codifies current practice.

I think that the Standing Orders Committee will need to look in particular at the provisions under new section 9A(4) in terms of how it is decided who these people are who are the candidates who are going to be elected. At the end of the day the bill provides, in clause 4, that such a person is a person who “(a) in the opinion of the General Manager (formed in the light of the election night results) it is clear that the person will be declared elected;”. There is, of course, a certain degree of uncertainty around that. The past practice under first past the post was actually relatively simple. The person who was ahead on election night was presumed to be a member of Parliament, and services began to that member, including pay and rations, from the next day.

Under MMP, of course, it is slightly more complicated. Not only is the complication the fact that special votes can change the result in the electorates but, as a consequence, that can lead in some cases to significant changes to the provisions for list members. Members will recall one election when on election night the Green Party did not qualify for Parliament but once the special votes were counted the Green Party qualified to be within Parliament. That, of course, significantly changed the entire membership of the House at that point.

I think there is no way of avoiding some degree of uncertainty in that fashion under the new arrangements, because, as happened at that point, Green members were not serviced by the Parliamentary Service on election night to the time of declaration of the results, but nor was any money clawed back from other list MPs who had temporarily been serviced and who then ceased to be members of Parliament when the Green Party was returned to Parliament. So there will always be some uncertainty around the edge, but the broad continuity needs to be maintained. Once this matter has been drawn to the attention of the Parliamentary Service it has no choice but not to fund candidates from election night onwards because the illegality has been drawn to its attention and this must be fixed before the next general election.

GERRY BROWNLEE (National—Ilam) : This Parliamentary Service Amendment Bill is one of those bills that is necessary for the protection and, indeed, the promotion of democracy in our country. I think Dr Cullen has very adequately outlined what the bill sets out to do. He used the example of the Green Party facing some difficulties as a result of this law, or potentially facing those difficulties, but what I would add is that all of the parties in this Parliament have, I think, faced that situation at some time or another.

The reality is that in New Zealand we take a pretty simplistic approach to things. We have just the one House and we have a complex electoral system in MMP. The two of them need to be melded in a way that means that if someone is thought to be or is declared to be the winner on the night of an election and the party wants to engage in activities that are appropriate beyond an election as Governments are formed, etc., then the expense of calling that person to Wellington is, quite rightly, met from a fund that recognises the costs of running the democratic institution. Certainly, people have come here immediately after an election only to find themselves, 2 weeks later, to be no longer part of the institution and out. I do not think it is right that those people should face that expense on their own. I think it is only appropriate that when people are summoned here, they should have their basic expenses met.

I know that people listening out there will be thinking that this is some sort of a clever featherbed deal. It is not. It is pretty straightforward. It will not cost the State any exorbitant amount. I think people should rightly accept this cost as being part of our democratic arrangements, ensuring that in a country like New Zealand access to the legislature is not determined by a person’s own resources, but rather by the people who choose to elect them on a ballot paper.

We look forward to the deliberations of the Standing Orders Committee. We will participate fully in those. There will be an opportunity for people to make submissions to that committee over a relatively brief period of time, and I suspect that the basic principles outlined in this bill will be upheld.

The National Party is very keen to support this bill through its first reading to ensure we uphold the idea that anyone who is elected can come to Parliament freely and unimpeded by any personal situation or, for that matter, any barrier put in front of them by the State. With that, I will conclude my remarks, and repeat that the National Party will support the first reading of this bill.

Hon DARREN HUGHES (Deputy Leader of the House) : I rise to support the first reading of the Parliamentary Service Amendment Bill, and I follow on from the comments from the Leader of the House and the shadow Leader of the House, who have set out what an important bill this is for several reasons of the practicality of running our Parliament. It is clearly needed to enable the Parliamentary Service to maintain its longstanding practice of giving administrative and support services to candidates who are to become members of Parliament either because they have gone into the general election as a member of Parliament or because of their candidacy being successful either in a constituency seat or by way of a party list, based on the support that their party received in the general election.

If we do not pass this legislation, we do face the risk of there being a number of adverse effects, which I do not think serve any political party, member of Parliament, or, most important, member of the public well. It would put at risk a whole range of services that MPs are able to deliver to their constituents, which is not a beneficial outcome at all.

Without this bill there will be issues about the ability of the Parliamentary Service to continue funding electorate offices, for example. That would mean completely unnecessary costs would be incurred as things like leases for electorate offices are broken, only to be re-established once the formal declaration has been announced, and also in relation to things like power bills and telephone bills. I think it is worth mentioning those; as Mr Brownlee indicated, these are very practical matters. It is not about feathering any nests, but power bills need to be paid, rents need to be paid, and, most important, the salaries of those who support members of Parliament in electorate offices and out-of-Parliament offices need to be addressed.

There is one other point that I think is important from a fairness point of view, and it relates to the state of political parties during coalition negotiations following a general election. This legislation impacts on members of Parliament, not on Ministers. The arrangements for supporting Ministers are, of course, made by Ministerial Services under the Department of Internal Affairs, and Ministers act under warrants. That is why it is important to widen it out to all members of Parliament so that members who are elected at an election can continue to come to Wellington while those talks are continuing. The parties that are most benefited by this legislation are those that do not have Ministers within their ranks.

The legal advice to the Parliamentary Service made it clear that it would not be able to continue its longstanding practice of providing support to those who would clearly be elected as members of Parliament following an election, which would mean, in effect, that following an election Ministers would be able to be supported and MPs would not. Clearly that is not a tenable position and the Government is moving to address that.

Dr Cullen indicated that he would be moving an instruction to the select committee for the bill to be reported back by 21 July. That is a very sensible approach because it will need to be passed in time for the formal processes to be completed and for Madam Speaker to issue her directions in accordance with it. Having the bill back in the House in late July means that we can realistically aim to pass it by early August at the latest. That will allow the process for the Speaker’s directions to be completed well in advance of the general election.

This is a sensible bill. It is a practical bill for the operation of our Parliament and it is supported by parties across the House. There is a need to progress the bill expeditiously and I commend it to the House.

NATHAN GUY (National) : I want to make a short contribution on the Parliamentary Service Amendment Bill. In essence this bill is a bit of a tidy-up, because currently there is no legislation to cover the gap between the time of the polling booth closures and the time when candidates officially become MPs and take office.

This bill is an important step forward, and we have heard from previous speakers that it is important, particularly in relation to covering office rentals and telecommunications. We all know that if those services are not continued, then there is a reconnection fee, and that would be of considerable cost to the taxpayer when it is weighed up across all MPs’ offices and the vital communication services that are provided to them.

The crux of this bill is covered in subsection (3) of new section 9B, in clause 4. It will allow the General Manager of the Parliamentary Service to cover the criteria. The directions will come through the Speaker, as is set out in new section 9C. New section 9D is also an important aspect for the Standing Orders Committee to look at.

National supports this bill. One of our MPs actually came into the House for just a few weeks at the 2005 election. Katrina Shanks came into the House at that time, but when the special votes were counted, she, unfortunately, could not stay. Lo and behold, when Dr Brash stood down, Katrina Shanks came back into Parliament, and she is making a wonderful contribution. This bill will cover the period of 2 weeks that otherwise would not be covered by legislation.

I was pleased to hear from Mr Hughes tonight that he has ruled out an early election. This bill will come back to the House at the end of July and be passed in August. I have heard from Dr Cullen and Mr Hughes that an early election following the Budget has obviously been ruled out and that we will have to hang on until August, and, possibly, right through to November, and we are ready for that. National supports this bill. We look forward to the Standing Orders Committee reporting it back in July.

Hon PETER DUNNE (Leader—United Future) : United Future joins other parties in supporting this bill. I will not go over the history of the reasons why such a measure is necessary. I want to make just one observation. It is a sad commentary on our times perhaps that we now face the requirement to legislate for what was always regarded to be the case. In fact, in earlier times we would have simply carried on the way that we were and none would have been too concerned about it. I recall the famous case of the gentleman, whose name temporarily escapes me, who in 1954 took this Parliament to court because he discovered that the writs for the calling of the 1946 election had been issued improperly and he therefore contended before the court that not only was that election invalid but every subsequent action of the Government between that date and the date in 1954 when he lodged his action was equally invalid.

Hon Dr Michael Cullen: Was it Kevin Brady?

Hon PETER DUNNE: No I do not think his name was Brady. When the Supreme Court heard the case it ruled that he was correct but that the consequences of giving some effect to the decision would be simply impractical so it let matters lie. That was an eminently sensible solution. Unfortunately, such solutions do not seem to be de rigueur today and when we become apprised of a situation such as this, which we all know is a nonsense, we have a requirement for legislation to put right what we have always thought was the case. If that is the way we do things in this day and age, so be it. However, it is an unfortunate situation and it makes one wonder what else we will discover in due course that we have long thought was legal and permissible is not and needs to be corrected.

This is not a particularly controversial matter. It is a straightforward matter and I welcome it going to the Standing Orders Committee and soon being back here to be passed into law so that the next group of members of Parliament who may be affected by it can rest easy on election night that whatever their fate they will at least get their allowances paid between that date and the return of the writs.

• Bill read a first time.

Hon Dr MICHAEL CULLEN (Leader of the House) : I move, That the Parliamentary Service Amendment Bill be considered by the Standing Orders Committee and that the committee report finally to the House on or before 21 July 2008.

• Motion agreed to.

SHANE ARDERN (National—Taranaki-King Country) : I had about 4 minutes left of my 5-minute call when we were last in Committee on the Births, Deaths, Marriages, and Relationships Registration Amendment Bill. It was the second call I had taken in the Committee stage; from memory, I think it was last Wednesday evening. I was raising the issue that no fraudulent activity or fraud was able to be uncovered by the Government Administration Committee when we considered the bill, although that had been one of the main platforms put forward as the reason for this revised legislation. I also spelt out my view that Dr Michael Cullen had gone through the legislative business before the House going forward to the election and had decided that the Order Paper was a little thin—that it did not have quite enough on it—so he had sent someone off to trawl through old bits of legislation, or legislation passed before a certain point, to find something to fill up the time of the House. We do not know why it was thought necessary to bring this bill before the House at this time.

In my speech I also talked about concerns that submitters had raised at the select committee. One submission in particular caught my attention. The submitter asked whether the provisions of this bill breached the New Zealand Bill of Rights Act. I did not have the expertise to know whether that was right, and the select committee asked the officials for advice on that. The officials were not absolute in their answer, but, none the less, they gave an answer, and I acknowledge the work they did. The submitter said that the New Zealand Bill of Rights Act “guarantees freedom of expression, taken to mean, after the Lange v Atkinson case, freedom of expression within the bounds of honest opinion. Within freedom of expression is the implied right of freedom of dissemination—the right of people to obtain and use previously public information for lawful purposes.” Well, I cannot say whether that is correct, but I do know that the person who submitted that view had clearly put a lot of effort in and had done his research. That was his view. We have to ask why we would restrict people’s access to information when that, in the view of that submitter, would breach the New Zealand Bill of Rights Act, and when no evidence had been presented to the committee to suggest why that should be necessary.

The National members on the select committee simply concluded that this bill should not be supported. To the best of my knowledge, nothing that has taken place in the debate so far has convinced National members that we should change that view. I note the Minister is about to introduce a number of Supplementary Order Papers in the Committee stage, and I suspect they are more substantial than the bill as submitted to the select committee. I base that statement on the number of clauses covered and the thickness of the Supplementary Order Papers.

In conclusion, I say the only thing the Committee can draw from this process is the fact that the Minister’s bill should never have been submitted in its original form. Either he was merely trying to gather up numbers by introducing amendment after amendment until he got enough people to say yes, or the Supplementary Order Papers will substantially change the bill. We may end up with something that is of some use to the public, going forward. I do not know whether that is the case, because we simply have not had the time to thoroughly examine the amendments and have not had the official advice that would probably be needed in order to determine whether the changes improve the bill. I ask the Minister to explain to the Committee at some stage why the process was hijacked in such a way, and why we need to have such a large number of Supplementary Order Paper amendments. I ask him to explain those amendments in detail, so the Committee can understand the reasons for such substantial amendments. I ask him also to explain why they could not have been open for public submission in the select committee, which is the standard and proper process. I look forward to the Minister’s response in that regard.

DARIEN FENTON (Labour) : I would like to defend the select committee process on this bill, the Births, Deaths, Marriages, and Relationships Registration Amendment Bill, because members opposite have appallingly misrepresented it—in particular, Brian Connell; the esteemed chairperson of the committee, Shane Ardern; and Sandra Goudie. Actually, the select committee process was a decent one. I have heard members opposite say that it needed to be democratic, and so on, but I say that the process of the select committee is that people come along, put their points of view, and then the committee members consider them, take them into account, and make changes accordingly. I confirm that that is absolutely what happened. So this idea that the Minister has dreamt up a whole lot of new ideas by means of Supplementary Order Papers is just not true.

I can confirm that the Minister wrote to the Government Administration Committee in the middle of the process and suggested some changes, and he has always been absolutely open to workable solutions. He made that clear from the very, very beginning. I can also confirm that some parties in the House, including New Zealand First, the Greens, and United Future, were open to having a sensible discussion about how this bill could be made more workable. But oh no, not the National Party! One need only read the report. That says it all about what the National Party thought. I say to members opposite there is no point in coming into the Chamber and complaining that the Minister did not go along to the select committee and put proposals. We discussed these proposals during the select committee process, and the National Party members chose to vote against them.

I have been very interested to hear National members say this is socialist mischief. Let me quote from the Privacy Commissioner. Let me tell the Committee exactly what the privacy risks are in our current registration of births, deaths, marriages, and relationships. First of all, there is a lot of sensitive information on our registers, such as health and family information, including past and present marital status, and ethnicity. The Privacy Commissioner goes on to state that information held on the death register will include cause of death—for example, syphilis, suicide, or cancer. It will include the place of death—for example, a mental hospital. It will include the place of burial—for example, a Jewish, Catholic, or Muslim cemetery. It will include ethnicity and also the full names of all previous spouses and partners. It will also include sensitive, personal information on the birth registers—for example, whether the named father is in another relationship. The marriage register will also show existence of earlier marriages. If people do not think that is sensitive, it is worth having a discussion on those issues in the Committee.

I do not understand where the Opposition is coming from on this. I have absolutely no idea. I have heard an observation from Brian Connell, who was a member of the select committee on the bill, and I have to say I liked him a heck of a lot better when he was not allowed to speak in the Chamber. Suddenly the ghost that walks has been released, and he was allowed to speak on this very important Births, Deaths, Marriages, and Relationships Registration Amendment Bill. He said stupid things in the select committee. He said the bill was arrant, bloody nonsense. I have just read out what is on the registers. If the National Party thinks that is arrant, bloody nonsense, I look forward to going out and telling our constituents and the electorate that the National Party thinks it is arrant, bloody nonsense to know whether people’s parents died of a particular disease, and whether people would want that kept to themselves and to have some privacy about it. All of what Brian Connell talked about is “PC mates”. Well, how lame is that? Can he not think of something a little different to say? I loved the fact that Brian Connell and others took credit for the fact that they invited people, some academics, to make submissions on the bill. They did not need to, because by that time we had figured it out, we had worked together with other parties, and we said, yes—as the Minister had always said—that any workable solution was acceptable, and we should work it through. That could have happened with the National Party members, but no, they decided to make a political decision to oppose the bill.

Sandra Goudie: Rubbish! You don’t get it.

DARIEN FENTON: I get it, but Ms Goudie does not get it. She missed out on being part of the solution, and wanted to be part of the problem.

SANDRA GOUDIE (National—Coromandel) : I have to say we did hold the Minister to task and asked what the premise was for this bill. Time and time again he said it was to prevent identity theft. That was an absolute nonsense and he well knows it. We asked the officials time and time again what the problem was that they were trying to fix and constantly they said it was to prevent identity theft. We have to look at the KPMG report because that says that in no way does identity theft have any relationship to access to information from the births, deaths, and marriages register. The premise for the bill was just not there.

I ask members to read the reports in the press. Here is one from the New Zealand Herald that states: “Faced with a walnut-sized problem arising from identity theft, the Government once again reaches for its sledgehammer.” That is exactly what it has done with this legislation.

There were some fantastic submissions—and I am referring to Part 1 of the bill, which we are required to do—and one of those submissions goes to the heart, the nub, of what we are supposed to have in terms of information. It states: “The free flow of information and ideas is the lifeblood of a participatory democracy.”, and that submitter is absolutely right. This is a Government that has forgotten all about one of those fundamental, basic principles of democracy. It is for this reason that freedom of speech is protected by section 14 of the New Zealand Bill of Rights Act, to ensure that everybody has the right to freedom of expression, including the freedom to seek, receive, and impart information and opinions of any kind and in any form.

The submission goes on to refer to our right to free speech being under threat and says that the warning was sounded more than 70 years ago when Justice Louis Brandeis of the United States Supreme Court said: “Experience should teach us to be most on our guard … when the Government’s purposes are beneficent. … The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.” I say that this bill completely undermines our freedom and our democracy. It is death by a thousand cuts and this bill is just one example of it. It is what submitters said right across the board, and in spite of some of the changes that people tried to negotiate, that death by a thousand cuts has not changed.

I note that Darien Fenton talked about the Privacy Commissioner. Well, what did she say about privacy? She actually described access to information as privacy pollution! That is just so bad. What sort of premise is that? What does that say about transparency and openness and the freedoms of democracy? That is what we get from the current Privacy Commissioner. Her idea of access to information is to call it privacy pollution. That is why we now have this current Government in the back rooms looking at how we have access to registers—and there are dozens of them—right across Parliament and at how it can shut down our access to those registers. It is very like the sort of thing a Mugabe regime would indulge in.

It was interesting to see who many of the submitters were who made submissions on this bill. The members of the Trade Union History Project opposed the bill. Sir Geoffrey Palmer expressed grave concerns about the bill, as well.

Hon Tau Henare: Who’s that?

SANDRA GOUDIE: Sir Geoffrey Palmer—goodness me, who was he? He is actually the president of the Law Commission. He had scathing criticism of Labour’s ill-thought-out amendments to the Births, Deaths, and Marriages Registration Act, and that is there in the documentation if the public want to take the time to read it. This current Government cannot deny that those criticisms were made by Sir Geoffrey Palmer.

It comes back to this whole stretch about the reason—the premise—for this bill in the first instance. One of the hallmarks of this Government is its inability to do good problem-definition, so we constantly have legislation coming out of this Government with poor problem-definition. We have all of these consequent problems as a result, including the regulatory problems that go with them. That whole compliance area has been a major issue.

What did the Trade Union History Project members say? Actually they did not want to appear before the Government Administration Committee; they just opposed the legislation outright.

Hon RICK BARKER (Minister of Internal Affairs) : I want to respond to a couple of things. Firstly, National Party members have said there is no problem with identity theft. Let me give them but four quick, brief examples.

Sandra Goudie: Directly related to information from—accessed from—births, deaths, and marriages registers.

Hon RICK BARKER: Well, let us start with the member who is sitting just along the bench from that member, the member for Hamilton East, David Bennett. He wrote to me on 15 October 2007: “Dear Sir, We have been approached by a constituent Andrew Hansford. Please find enclosed a copy of his authorisation form. Recently Andrew’s brother was able to obtain a copy of Andrew’s birth certificate by filling in a form and paying a $26 fee. He was then able to obtain a driver’s licence from the birth certificate. Could you please advise if there are any plans to make requirements more stringent when obtaining a birth certificate in order to reduce the opportunity for identity theft?”. That letter was from David Bennett, who is in the same caucus as Sandra Goudie.

Now let us look at question for written answer No. 1503 in 2008 in the name of Sandra Goudie to the Minister of Internal Affairs: “How was the birth certificate of a dead New Zealand girl obtained by Laurelyn Smith?”.

Hon Mark Burton: Who was this from?

Hon RICK BARKER: This was from Sandra Goudie, who said this was a complete surprise. This was in February 2008. Although the member has condemned the bill because she says there is no issue with stealing identity and identity theft, and there is no problem with untrammelled access to the records, she wanted to know how a person got that birth certificate. How bright is this? It shows why she is the intellectual genius of the National Party.

There are just two other examples—very important examples—and they relate to the two Israelis who came here and got false passports. They did so on the basis of ransacking our births, deaths, and marriages records. They obtained all of the records, gained access to all of the information, and recreated their own identities in order to steal a New Zealand passport. They stole people’s identities to gain a New Zealand passport fraudulently.

Now Sandra Goudie says that this is no problem. People can steal records, she is still trying to figure out how people get access to the records, and beside her is a member of Parliament who said: “… Andrew’s brother was able to obtain a copy of Andrew’s birth certificate by filling in a form and paying a $26 fee. He was then able to obtain a driver’s licence from the birth certificate. Could you please advise if there are plans to make requirements more stringent …”. I say to David Bennett that yes, there are.

We agree with the member that there is an issue with unrestricted access to the births, deaths, and marriages records. There has to be a balance between access and restrictions, I grant him that. What we have at the moment is open access, with no record of who has been into the records. In this legislation we are saying that identity theft is important to all New Zealanders. As the Government requires people to put important information forward to the registers, the Government is therefore required to have some record of what happens to that information, and we have struck a new balance.

I want to thank those members who made a contribution to this debate to find the best balance this Parliament can get. But I have to say to National Party members that if they are going to continue to deny there ever is a problem, then they are never ever going to see that there is a solution. If Sandra Goudie wants to know what the problem is, I suggest she moves two seats along to sit next to David Bennett and asks him to tell her about the situation that occurred and that she would like to know because she is struggling to find out what the problem is.

KEITH LOCKE (Green) : I think it is up to the Greens to cool down this situation a bit by agreeing, in large measure, with both sides. It is true that the original bill seriously affected the traditionally open access to births, deaths, and marriages records, and the National members who have spoken are quite right to say that there was an outcry around the country from journalists, genealogists, historians, and biographers—that was actually the select committee process working. It showed that MMP was working too, because the small parties, like the Green Party and United Future, were involved in the process. Peter Dunne and I presented a joint submission to the Government Administration Committee, we talked to Government officials together, and we helped transform the bill.

The National speakers are right to say that there has been a transformation of key elements of this bill. This is probably the most changed bill that has been before Parliament in a long time, and that is for the better. The bill retains some of the original good elements, and is transformed in terms of the bad elements. Essentially, the changes preserve open access. It is true that in certain circumstances people can close off their records—their birth records and their marriage or civil union records—but only for a prescribed period and on prescribed grounds, and those grounds have to be substantive. One cannot, just on a whim and without giving any reasons, close off one’s records or close them off for life.

I think it is up to us in this Parliament, in what we say in this Committee stage and in the third reading, to make it clear that we do not want regulations that are Draconian, and that determinations have to be on really substantive grounds to close off records. We want records to be closed off only in really difficult situations, such as some of those presented to the select committee. For example, someone who has been beaten up by a former partner, and who has left that partner and has linked up with another partner, does not want the former abusive partner finding out his or her address through finding the new partner’s details on certain records and then perhaps following through to get the new address. That is a real situation, as were, I think, some examples that have been used here today.

Actually, one cannot close off one’s death record. It is a little hard to close off one’s records after one is dead; that is fundamental. The fact that a person may have died of syphilis will be on the death record. The record will not be able to be closed off, and could, theoretically, be linked to that person’s birth record, as well.

We do not need to get too carried away with identity theft, because there are ways to avoid that. The Minister is right to say that having the access register helps monitor that. There are other improvements relating to the Department of Internal Affairs being able to link death records with birth records on its computer database. The matching of the records in this new system makes it very difficult for a person to go down to a graveyard and take something off a gravestone, because it will all come up on the births, deaths, and marriages record in the department if there is something fishy going on. Similarly, with regard to getting hold of birth certificates, I think the system is now tighter. One can get printouts quite easily, but if we want to get a real proof of identity birth certificate, then we have to go through a more rigorous process, so there are various controls.

The other thing is that although there is identity theft, it often occurs because of the incompetence of the various commercial organisations or banks that do not do proper checking. There are plenty of ways to check who people are these days. In fact, everyone is on about a thousand different databases with all kinds of information, so it is very easy to ask people appropriate questions and to check their identity. One of the things that came up at the select committee was that it is not a question of somehow getting Draconian in terms of the births, deaths, and marriages records and excusing those banks that do not do the proper checking.

JOHN HAYES (National—Wairarapa) : I would like to stand with my colleagues in total opposition to this piece of red tape and box-ticking led by a Minister who is totally confused by the issues. Let me try to explain this simply. There are two parts to the problem. The first bit of the problem is this. The public are entitled to access the records of their lineage and their genealogy. Plenty of people want to sort out their whakapapa. I might want to sort out my particular lineage—plenty of people in the Wairarapa want to do the same, and they do not want to be obstructed by unnecessary information. [Interruption] If the Minister in the chair, the Hon Rick Barker, would stop talking so loudly, we could hear ourselves think.

The second part of the problem is this, and this is where the Minister is totally confused. What the Minister’s officials are doing is giving away legitimised original documents to his Israeli friends, and that is the wrong thing to do. One must have a requirement in the legislation that for someone to collect an original document—a certificate of authenticity from the State about a birth, a death, a marriage, a passport, or whatever—that person must provide proper identification, as happens with a gun licence, and as happens with a driver’s licence. That is all one has to do. One does not need to shut down the whole system and lock it down behind great bureaucratic walls for people who want to get access to ordinary information.

There is no reason people cannot get the information. If a person had syphilis, so what? If a person died of cancer, so what? That is a matter of public record, and that is how it should stay. If one wants to sort out one’s birth record, one can go to any church in the country, look up who did what to whom, and produce a particular record for a person. That information is in the public record. One cannot lock it down. This is totally unnecessary box-ticking, red tape, and the sort of legislative arrangement that this country is going to tip this Government out for, because it is bad, because it is wrong, and because it is absolutely misguided. This Government needs to differentiate; if an agency is going to give someone a legitimate certificate that states where he or she was born, or whatever, it is done on the basis that the person getting the certificate provides identification. The State should not cut everybody’s access off to the whole system.

The second fault of this bill, brought to my attention by a resident of Carterton, is that a person who has had a gender change cannot go back to alter his or her birth certificate to provide for that change. I think that that is a hole in the legislation.

Hon Rick Barker: The member is misguided and has been misinformed, and confused.

JOHN HAYES: No, no, the Minister is the one who is confused here. I will again explain to the Minister the confusion he has. There are two issues. One is public access to the public record, and nobody should be denied that. That is why we are opposing the legislation. The second part of the equation is that if one wants to go to the State and get a birth certificate or whatever, then one must provide identification to do that, as happens with a gun licence, a driver’s licence, or anything else. But to shut down everybody’s access to this information is totally wrong, and that is why the National Party is standing against the Government on this. This is why we think that the Government’s legislative programme is poorly thought-out, is wrong, is confused, and is totally unnecessary red tape. I tell the Minister that this is what our community does not want. It wants very clear, simple systems. The select committee process was very unsatisfactory. Many submitters came to the committee, including Geoffrey Palmer, and said: “Look, Minister, with respect, you’ve got this wrong.” The Minister has not listened to any of their suggestions.

SANDRA GOUDIE (National—Coromandel) : I rise to respond to the Minister’s assertions about the confusion that has arisen over the Births, Deaths, Marriages, and Relationships Registration Amendment Bill. Essentially, John Hayes is right. There are two parts to it. One part is about the New Zealand public having the freedom of access to the information that is currently within the births, deaths and marriages register. That has been a time-honoured tradition for many, many years, and that is as it should be. The public should not be shut out from access to that information—I think it is over 100 years for births, and 50 years for deaths. Why do we not leave their access to that information as it was? That is where the sledgehammer came in, because all that was needed was to say that if one wants a birth certificate, instead of just paying $26 and getting an authorised document, which at the moment anybody can do about anyone, then one has to show some form of identification. I know this because I tested the system myself. I gave someone $26 and sent them off for a copy of a document to see what that person would get. What the person got was a properly authenticated document—no identification was necessary and no documentation was necessary.

Why is a whole raft of legislation necessary just to require that some form of identification is shown before an authorised document is issued? It is as simple as that—it is very, very simple. Any amount of information could be given out on a photocopied bit of paper or on a printout. It did not matter; that was all OK. The fact is that properly authorised documents were being given out. How dumb is that? It is simple. It is so dumb to do that, and it is so simple to fix. When one goes for a driver’s licence, one needs some form of ID. When one goes for a gun licence, one needs some form of ID. There is a whole raft of things for which one needs some form of ID. That is all that is absolutely necessary—people just have to wander along with some form of ID and say they need a properly authorised document. Otherwise, people just say they want the information, and the information is handed over. They pay a few dollars and they get the information, which is just a computer printout or a photocopy or whatever. But no, the registry office is handing out authorised documents. That should have been stamped out long ago. And what do we get? We get this monstrous legislation cutting off everybody’s access to information, without jumping through a whole lot of hoops and hurdles, then denying them access to information—some aspects of it for 100 years and some aspects of it for 50 years.

When the media said it is all about using a sledgehammer to crack a nut, the media was absolutely right. This issue should have been able to be addressed without having to deal with legislation, because there are legislative guidelines there. The first question asked is “What is the problem that you’re trying to fix?”. I do not think that that question is ever asked of any legislation by this current Government. The second question asked is “Is there another way of addressing the problem?”. Well, I am sure that the Government does not ask that, either. So what do we get? We get this ridiculous legislation where people’s rights are trampled all over for no just cause.

One of the wonderful things about people having open access to this information is that over a period of a number of years 86,000 corrections were made to the registry. It is only because people have access to that information that the information is actually corrected. A lot of the financial and banking institutions that do background checks are in a classic position to provide that very good information to the registry, to make sure that all those corrections take place. There is no way that the registry office would ever be able to do any work around correcting and substantiating the information on that register to make sure it is correct. It is actually the very nature of its openness and transparency that keeps it honest, and I for one applaud that openness and transparency and the honesty that goes with that. I am a huge supporter of that, and I am saddened by the fact that this legislation cuts across the bows of that. I think that is a tragedy, when all that we had to do was to say that next time a person wants an authorised document, he or she will be required to come in with a couple of pieces of documentation. It is as simple as that—no problem. We just need to go through the process and see what needs to be fixed. Let us not bring out the sledgehammer. But that is exactly what has happened, and that is exactly why we are in this position today. We could not get them to see sense.

Dr WAYNE MAPP (National—North Shore) : I have been listening with considerable interest to the debate tonight. I am aware that we have discussed the Births, Deaths, Marriages, and Relationships Registration Amendment Bill in our caucus over the last few months. Various arguments have been put to our caucus about why it should not be supported.

I have to say that, listening to this debate, reading the bill, and reading the report, I find that it is completely clear why this Government is in such a state of terminal decline. It is extraordinary, is it not, that valuable parliamentary time is taken up with this interfering, busybody legislation. It is symbolic of the nature of this Government that this bill is the best it can come up with.

Every day on the North Shore—and I know that my colleagues hear the same thing up and down the country, as well—one of the major complaints I hear about this Government is that it interferes in people’s lives and conducts a nanny State type of policy. Often people will not necessarily have a particularly good set of examples to explain it, but they get a sense of interference, of restrictions on their freedom, and of an inability to go about their lives freely and without restriction. This bill, in its small way—I have to admit that this is quite a narrow bill—is completely symbolic of that fact.

You know, thousands and thousands of New Zealanders take great pleasure in researching family records. Of course they take an extremely broad approach. They are not confined just to the narrow circumstances of their parents and grandparents; people follow all sorts of little byways and highways. It is a very active part of social life and social discourse. In fact, it is actually one of the largest categories of Internet research. Reading the report, and, indeed, listening to my colleagues today and also to caucus discussions, I see that it is clear that this bill will interfere with those rights. That is what it will do. It will interfere with the rights of people to do extended research that, as I say, takes them far beyond their close family relatives.

One has to ask oneself why a Government would even want to do that. Why would a Government be bothered introducing legislation that would have such an impact, unless the fundamental motivations of such a Government are to interfere in people’s lives? When I look across at those members on the other side of the Chamber—many of whom, I suspect, will no longer be here in a few months’ time—I see people who think they know better than their fellow citizens, and who take it upon themselves to say that they know best and that they know what is good for people. Well, the citizens of New Zealand are heartily sick of that approach.

The clearest possible demonstration of that was the debate on the Electoral Finance Bill. That debate was completely about restricting the freedom and choice of New Zealanders, about restricting the ability to get engaged in public debate. In a small way this bill represents exactly the same kinds of tendencies and impulses on the part of the Labour Government.

National took this bill very seriously. We had numerous discussions in our caucus on it. We looked at the details of it. We heard numerous reports from our colleagues, and they were clear on it. It was a restriction on freedom, it was a restriction on choice, and it was a restriction on the fundamental right of New Zealanders to live their lives without excessive interference from the Government. My colleagues who have spoken on this bill so far have made those points absolutely clear.

If New Zealanders want to look at a whole range of busybody, interfering statutes, they can do no better than to look, in the dying days of this Government, at the Births, Deaths, Marriages, and Relationships Registration Amendment Bill. They will say: “If this is what this Government is doing, then it is time for this Government to go.”

Hon MARK BURTON (Labour—Taupo) : I move, That the question be now put.

The CHAIRPERSON (Hon Clem Simich): These are clauses on the title, the commencement, and the principal Act being amended. There will be one debate and three votes.

SANDRA GOUDIE (National—Coromandel) : I rise once again to support National’s decision to vote against this legislation. In speaking to the title, we could call the bill a number of things, but I would call it the “Death of our Democracy by a Thousand Cuts and This is Just Another Slice Bill”. It absolutely is so. Openness and transparency is a fundamental principle of democracy, and that is being denied in this bill.

I ask what is driving it. Earlier I mentioned Sir Geoffrey Palmer, who expressed some serious concerns about this legislation. Just for the benefit of members on the other side of the Chamber, I say that he had serious concerns about this legislation, and I will tell members why. The reason was that the access provisions proposed in the bill will not only affect birth, deaths, and marriages registers but also may have other implications for wider registers. With regard to this we can probably bear in mind the driver for this measure, which is partly the view of the Privacy Commissioner, whose new concept of access to information is called privacy pollution.

The other concern expressed by Sir Geoffrey Palmer was that there is no evidence of how much identity fraud in New Zealand is made by access to births, deaths, and marriages records. Indeed, the information required for identity theft can be obtained from many other sources. He is absolutely right. I said previously that the KPMG report on identity fraud made no linkage between access to the births, deaths, and marriages information in the registers. Sir Geoffrey said also that no figures are available as to how many people, if any, have expressed concern about the current availability of information on the births, deaths, and marriages register. The officials had a great deal of difficulty dredging up the half a dozen that might have existed. We are one of the most open societies in the world, and I think it is to our shame that we are starting to shut down on that openness.

As I have said before, there are two aspects of this legislation that in our view are absolutely unnecessary. All of the submitters who opposed this bill were absolutely right in that this bill is a sledgehammer to crack a nut. This is about, essentially, two things. The bill in its current form—the Minister is still putting through Supplementary Order Papers—is denying people that ready and free access to the information on the registers. They should have been able to have free access, and they should still be able to have it. They should be able to get printouts or photocopies of information.

The other problem we tried to bring to the Government’s attention was the fact that anyone can go to the registrar’s office and get an authorised document without providing any form of identification. For some reason, the registrar’s office produces authorised documentation to people who go there just wanting a bit of information. How dumb is that? I cannot understand how those officials could make that connection between providing an authorised document without the person having any form of identification whatsoever.

Identification is required for a driver’s licence, for a gun licence, and for a whole raft of other licences. If people want an authorised document, they should be required to provide some form of identification. I am sure that that could have been done through any other process than legislation. As I have said before, and as the Government seems to ignore completely, one of the first principles of legislation is to identify the problem—define clearly what the problem is that we are trying to fix.

Sir Geoffrey acknowledged that the linkage to identity fraud was essentially dropped, and that the driver was this thing about privacy pollution coming out of the Privacy Commissioner. We should be very, very clear in the first instance what the problem is and define it very, very clearly.

The second thing that the legislative guidelines ask is whether there is some other way that this could be addressed without having to introduce yet another piece of legislation. I feel that this could have been done by a simple requirement through regulations that some form of identification be required if someone wants an authorised document—not if someone wants any other information—and free and ready access to all of that information. But no, this is the sledgehammer to crack a nut.

Hon RICK BARKER (Minister of Internal Affairs) : I want to respond to members and sum up the situation we have now. Firstly, I come back to Sandra Goudie’s point. She says that there is no point to this legislation, that it is unnecessary, and that identity theft is not an issue. I go back to the several examples I gave earlier in the discussion. Her caucus colleague David Bennett, the member of Parliament for Hamilton East, wrote to say that he had been approached by a constituent who was concerned that his brother had been able to obtain a copy of his, Andrew’s, birth certificate by simply filling in a form and paying the fee. The brother was therefore able to obtain a driver’s licence in Andrew’s name. That is what he said had occurred. That is identity theft. Sandra Goudie herself, in a parliamentary written question, asked how the birth certificate of a dead New Zealand girl was obtained by Laurelyn Smith. Again, Laurelyn Smith used that information for fraudulent purposes. Another high-profile case I alluded to was that of the people who used the registers to get information to steal identities and then fraudulently obtain New Zealand passports for Israelis.

The fact is that the information had to be given by law. That is what it required. If anybody turned up, the law required the registry staff to give that person a certificate—an authorised duplicate. There was no other option. The staff could not just change the requirement by their own wish or will; I could not change it by regulation. That was the law, so we had to change the law. We have taken up, by coincidence, the suggestion of John Hayes, who was here earlier. He asked why the people who turned up should not have to identify themselves. Sandra Goudie said the same thing. I say to Sandra Goudie and to John Hayes that that is exactly what the legislation now requires. If people are going to turn up and get a certificate, they have to produce some form of identification.

But I come back to the point that Sandra Goudie has missed. The certificate is not of value in itself. It is the information on it that is of value, such as the name of the person, the date of his or her birth, and the names of his or her parents. From that, someone can start to track back. When that person has the information, he or she then has the ability to steal an identity. It is not the certificate itself that is of value; it is the information that is on it. We require people to give that information to the State, and therefore the State has an obligation to do its utmost to protect the information. That is why, in the future, people will have completely open access to the registers. Nothing will be closed off to them. There will be no limitation on family searches for family members, or on anything like that—none whatsoever. But when people turn up to seek the information, they will have to identify themselves as to who they are and identify the information that they are taking.

If someone wants to access my record, he or she will be able to do that. But when that person does that, his or her name and details will be taken. Sometime later, if I find that that person has been up to mischief and has been doing things with my name, then I will be able to go to the registrar and ask about who has been there. If it happens to be the Hon Mark Burton, I will be able to go to him and ask him what he has done with my information, because I will know he has had access to it. That is the purpose of the provision. We will then be able to track the mischief. It is simple. So we will do as John Hayes suggested. If people want a driver’s licence or a gun licence, then they have to prove who they are. It will be the same in respect of the register.

The other good thing about this legislation is that it will enhance the capability of researchers to get information. At the moment if someone wants to get information from the births, deaths, and marriages register, he or she has to identify the individual names. Because all the information will now be on a computer data sheet, people will be able to do group searches in areas where they could not before. The research ability will be enhanced significantly by this legislation. [Interruption] I want to assure the member who interjects that he is absolutely wrong on that; he has been misadvised.

Sandra Goudie: He’s not wrong. You can’t read.

Hon RICK BARKER: I say to Sandra Goudie and the Committee that we have good legislation. Members have agreed, I think, to a very good compromise: a balance between open access and ensuring as best we can the protection of the identities of New Zealanders who are on that register from theft and exploitation.

There has been a good process on this bill, and I commend the House for that. I recommend to other members on the National side of the Chamber that they read the legislation now and think about their concerns. With the Supplementary Order Papers, I am sure they will find that all of their concerns have been assuaged. This will be good and enduring legislation.

JUDITH COLLINS (National—Clevedon) : It has been my pleasure to be a member of the Social Services Committee and, particularly, to be its deputy chair during the course of the hearings on, consideration of, and deliberation on the Family Courts Matters Bill. We have had a great deal of cross-party agreement on a lot of things, and that has extended all the way through, really.

Nathan Guy: That’s a surprise.

JUDITH COLLINS: Yes, it is a surprise. I think it is very difficult to look at these matters in relation to the Family Court and not to do so without, I think, a degree of humility and gratitude that there are people who work in this area —judges in particular, as well as lawyers, social workers, and others—whose concern it is to try to take a very difficult situation and make it as least difficult as possible. We see that is so particularly when we look at clause 50A, which concerns the duty of legal advisers to promote reconciliation and conciliation. That is not a new thing. We have always had that duty, but it is not one that many people expect of lawyers.

We have gone further than that in this bill and promoted mediation as a primary role within the Family Court when people come before it with issues that they have not been able to resolve beforehand. I am a great believer in mediation, having dealt with it over the years as a lawyer, and having promoted it not only in Family Court matters but also in commercial matters. At the end of the day, most issues that come before the Family Court will, at some stage, involve children, and most do involve children for most of the time. Those children who are the innocent victims of their parents’ behaviours, difficulties, issues, and unresolved conflicts are the ones who suffer the most. Adults, I have always believed, are pretty good at looking after themselves. Children, however, do not get a choice in terms of the behaviour of their parents.

Mediation is the most reasonable way for people who have been unable to see eye to eye with one another over their children, or over relating to their children, to actually come together and be encouraged to promote the interests of their children first. I do not know of any parents who, when confronted with what is in the best interests of their children, do not in their heart of hearts want to do the best thing for their children. Often they simply need to be shown the way and to be given the assistance of trained mediators and facilitators to help them to work through that. Mediation is a pretty difficult process, but in my experience it generally works. It is very seldom that it does not work.

• Progress to be reported presently.

• House resumed.

• The Chairperson reported the Births, Deaths, Marriages, and Relationships Registration Amendment Bill with amendment, and progress on the Family Courts Matters Bill.

• Report adopted.