Hon ANNETTE KING (Minister of Transport) : I move, That the Land Transport Management Amendment Bill be now read a second time. Most submissions were very supportive of the principles underpinning this bill and they offered many constructive suggestions to improve it. I would like to thank the members of the Transport and Industrial Relations Committee for the work they have done in strengthening this bill. I support the changes that have been recommended.

This bill will further embed the Government’s push to ensure that we have a transport planning and funding system that reflects the sophistication and complexity of the 21st century. The bill will see the full hypothecation of fuel excise taxes for land transport purposes. This is a very significant point in the history of land transport funding in New Zealand and will involve about $600 million per annum, previously retained in the general Crown accounts, being now ring-fenced exclusively for land transport activities. The bill also clarifies the existing legislation in respect of funding of land transport activities from revenue received from motorists and heavy-vehicle users.

The bill has a requirement for a Government policy statement to guide the allocation of national land transport funds by the New Zealand Transport Agency on the basis of regional transport plans. As Minister of Transport, I will remain responsible for decisions around the allocation of the fund to New Zealand road safety initiatives, based on recommendations developed by the agency. The bill also provides for moneys from the National Land Transport Fund to be paid for activities that benefit users of pleasure craft. This is in lieu of a refund of the petrol tax paid by recreational boaties. This provision received very widespread support from the marine sector.

The select committee has recommended allowing the funding to be used for more generic search and rescue activities. Under the bill, regional land transport committees will be replaced by regional transport committees. These committees will have enhanced functions, including the preparation of new 3-yearly regional land transport programmes and regional fuel tax schemes. The bill as introduced reflected the Government’s decision to move to a 3-yearly regional land transport programme and a 3-yearly national land transport programme. This move will increase certainty in the sector and will reduce consultation and “planning churn”, and was well received by submitters. There will be increased flexibility to combine planning documents and consultation processes.

To further acknowledge local government’s concerns, the committee recommends that the bill expressly requires the agency to take into account the regional priority attached to activities when making decisions on the National Land Transport Programme. Groups such as the Automobile Association, the Road Transport Forum, and local government made strong submissions about the need to be involved in decision-making processes around land transport. The bill as reported back acknowledges such views.

The Government’s commitment to rail’s role as a critical part of a sustainable transport system is evidenced by our very recent announcement that the Government will be purchasing Toll’s rail interests. I therefore strongly endorse the committee’s recommendation that an expressed reference be made to rail and coastal shipping in the purpose section of the Land Transport Management Act.

The bill will see Land Transport New Zealand and Transit New Zealand replaced by a new entity—the New Zealand Transport Agency. Transparency and accountability of this agency was a major issue for the select committee, and it has recommended improvements to the bill as a result. Given the role of the New Zealand Transport Agency as a funder and provider of land transport activities, decision making must be transparent and there must be suitable accountability provisions.

Finally, the bill will allow regions to use a regional fuel tax to fund priority projects that cannot reasonably be funded from any other source within the time frame desired by the region—for example, the electrification of the Auckland rail network. This is a vital project to achieve a sustainable future and to give users of public transport greater choice. It will be up to each region to decide whether to introduce a regional fuel tax. The bill provides that a region may raise a tax of up to 10c per litre for land transport projects, with expenditure on roading projects capped at 5c. Many local government submitters, although generally supportive of a regional fuel tax, sought to remove the 5c cap on roading projects. The committee has recommended that changes be made so that the funding of facilities—such as walking, cycling, and bus lanes; and high-occupancy vehicles—does not crowd out the demand for general traffic projects under the 5c roading cap.

In the Auckland region, because it already has a well-developed idea of what projects it would like to fund under a regional fuel tax scheme, the initial Auckland scheme will be developed by the Auckland Regional Council. The council will need to take account of the views of the Auckland Regional Land Transport Committee.

I would also like to take this opportunity to signal my intention to introduce a Supplementary Order Paper. Members will be aware of recent media attention given to the rise in fuel prices. The Government always expected that a regional fuel tax scheme would need to provide for phasing, in order to meet the affordability criteria that Ministers must apply when considering a regional fuel tax. Phasing will be a requirement of a regional fuel tax in the bill. Once again, I would like to thank select committee members for the work they have done on this bill. It is a very significant piece of legislation.

Hon MAURICE WILLIAMSON (National—Pakuranga) : I start by saying that although the National Party will be voting against the legislation, we think there are some quite good bits to it. We think this legislation is a bit like the curate’s egg in that it is good in some places and not so good in others. I want to cover the areas where we are in support of the bill, and it is a shame that it could not be split into parts so that we could vote on those parts separately. We will get to do that at the Committee stage, but we will not be able to do it for the whole legislation.

First of all, there is the issue of hypothecation. The vast bulk of the public out there have not a clue what that is. It sounds like some dreadful disease that only penicillin can cure. But, in its simplest form, hypothecation is the dedication of everything that is collected from road users going to a dedicated land transport fund so that it can be spent on land transport - type purposes.

For decades now the view of the general public was that we were just stealing their money. I was certainly on the raw end of some sharp, barbed tongues over that, and I am sure Labour Ministers in the 1980s would have got it as well. I think the public thought that Ministers were heading off to the Bahamas with a crate of Moët under their arms and spending up large. Of course, they were not; the money was going to the consolidated account or to the general accounts, and it was being used by the Government to fund education, health, and all sorts of other things. But that did not ever wash with the public. They all felt that if the money had been collected at the petrol pump, from the road-user charges, or from motor vehicle registrations, then it should be dedicated back to that purpose.

Treasury hates hypothecation. If there is one thing that stops Treasury staff from sleeping at night, it is when we raise the word “hypothecation”. They start asking whether we will have a frigate tax, a breast cancer tax, and so on—why should one thing get a hypothecation and not the others? But I think it is a good move. It is a move the National Party campaigned for with our billboards at the last election. We thought that the times when the Government accounts were heavily in surplus were the times it should happen—as opposed to the times in the 1990s when the entire accounts of the Government were in deficit and finance Ministers had no scope to release any of the money they were getting from that. I think it was a coming together of all the political parties, and the fact that organisations like the Automobile Association had campaigned so heavily for it.

So there is that, and there are a whole lot of things with regard to the aligning of the planning cycle, and getting more purpose into how the programmes are constructed, with some more certainty. There have been some bizarre examples of 1-year plans where the following year something that was due to start the next year was not even in the next 10-year plan. I think the Taupō eastern arterial route was a great example. In 2005 it was in the plan to start in 2006, and then when the 2006 plan came out it was not even in the next 10-year plan. As people all around the country used to say, how can we make any provision for it, how can we plan for it, and how can we make things work?

The Government is introducing a new thing called a “GPS”, which is not the global positioning system that people might have in their cars but a Government policy statement. I will be interested to watch what the first structure of that comes out like. In theory it is quite a good idea. It sets out what the Government’s plans for investment and funding priorities are for the coming 3 to 6 years and it gives some strategic guidance to the transport sector. I hear about these things—about strategies and general guidance documents and so on—and basically they can be all things to all people, from motherhood and apple pie to something of real substance. If the Government policy statement is to be a funding and priority planning - type tool, then it will have some substance to it.

The introduction of the regional land transport programme to rationalise land transport planning documents and to reduce consultation is, I think, a good point about what this legislation should be doing, because the level of consultation across things like road building is absolutely crippling. The consultation has to occur at local level, it then has to occur at regional level, it has to occur at national level, and then quite often it has to go back for a second or third tranche.

I guess National’s biggest concern with this legislation is not so much some of the stuff that is in it—and I will get to the regional fuel tax and a couple of other bits that we are highly opposed to—but what is not in it. When Labour passed the Land Transport Management Act in 2003, the claims that the National Opposition made at that point were that if the legislation went through as it was, it was so restrictive and so prescriptive on private sector participation in the funding and building of roads that it would never happen.

Peter Brown: So it should be!

Hon MAURICE WILLIAMSON: There we are—New Zealand First says: “So it should be!”. They do not think the private sector should be involved in funding the building of new roads. I can tell members that National does. I can tell members that every state Labor Government in Australia uses the private sector to fund roading. So does the Labour Government in the United Kingdom, and so do socialist Governments in Europe. In fact, Peter Brown would be hard-pressed to tell us of a country in which the private sector is not involved in funding road building. But he still brings his cloth-cap, socialist dogma to the idea of private sector funding, and he feels that New Zealand should somehow line itself up with Burkina Faso or Zimbabwe—no, actually Zimbabwe allows it. Interestingly enough, the biggest builder of private sector roads in the world at present is communist China. So Peter Brown is further left than the communists—that is all I can say.

This bill should have done something about the Land Transport Management Act. This is a Land Transport Management Amendment Bill, so it could have. It could have taken out some of the prescriptive dragnets that are in there, such as the 35-year concession period. It could have opened that up and made it a bid parameter. It could have allowed some things that the private sector has regularly said it would participate in if they were in the legislation. The private sector has said it would participate in building roads but not while the legislation is as blocked and prescriptive and as restrictive as it is.

Now I come to some of the stuff in the bill that we are very, very opposed to. The first of those is obviously the regional fuel tax. One of the things I found interesting happened at the Transport and Industrial Relations Committee last week when we asked Land Transport New Zealand how it was that it finished a financial year with $220 million unspent. It said it was because there are so many little pots of money. It said: “Money that is allocated for this purpose, to this region, for that, cannot now be moved over to another region or another purpose if the project does not come on stream on time.” That is quite clearly a nonsense. If the money is in the account and a project falls over because it does not get its consents or it does not get its ducks in a row, or get lined up by the local authority, or whatever, then surely the funding agency should have the ability to move that money to one of the other projects that is begging to get started.

What we will be doing with the regional fuel tax is creating yet another small packet of pots, so that one region can have it but a region next door may not. That was interesting in itself. We heard a lot of the big trucking operators say that if they are going to be operating out of Auckland, which has a regional fuel tax—and the Waikato region does not—then they can set up a fuel base just across the regional border and transport their trucks down there with hardly anything on them, and fuel up accordingly.

Those grey, mucky lines in the sand mean that a regional fuel tax can cause major disturbances for a proper regime. More important, what is hilarious about this is that we are passing this legislation at a time when the Prime Minister says she knows that New Zealanders’ pockets are under strain. She knows they cannot afford it at present, so we will not allow the regional petrol tax to come in next year, at any rate. So why are we passing it? Why are we rushing legislation through to allow a regional fuel tax when the Prime Minister says she knows it cannot be afforded by New Zealanders and that she will not be allowing it to occur in the next year?

I say that there are plenty of other mechanisms to fund land transport. Some of our opponents are now saying: “Oh, if you don’t allow a regional fuel tax, it means you’re opposed to a whole lot of projects that could be built, such as Penlink.” We are not opposed to Penlink at all. We are very much in favour of Penlink, the big road project out to the Whangaparāoa Peninsula, being built. But a regional fuel tax is not the only mechanism to fund Penlink. It could be a whole range of other instruments that other countries use, such as public debt, private debt, infrastructure bonds, a whole range of public-private partnerships, and so on.

The last thing I want to say, because I think I have only about 10 seconds left, is that for a long time Land Transport New Zealand and Transit were separated. Everyone thought that was a good idea. Now, somehow, for some reason, the Government thinks bringing them back together is a good idea, even though it was totally and highly opposed to it at the time.

MOANA MACKEY (Labour) : I am very happy to take a call on the second reading of the Land Transport Management Amendment Bill (No 2). That was a very interesting speech from the National member Maurice Williamson; I point out that this Government is very supportive of public-private partnerships, and say that of course they have their place. But, unlike the member who has just resumed his seat, we believe that the Government has an active role in providing infrastructure in the country, and that is why we have had an unprecedented road-building and infrastructure-building programme. It explains why, when Maurice Williamson was Minister of Transport, he did not build a single new road in this country. Every morning he would get out of bed, rush to the window, and hope that the market, like the tooth fairy, had somehow magically delivered him a new road overnight. He would throw open the windows, and be incredibly disappointed that the market had not delivered for him. Unlike that member, we understand the reality for a country like New Zealand, and the Government is an active partner in the road-building business in this country.

I am not a member of the select committee that considered this bill, but I am chair of the Local Government and Environment Committee. I tend to try to look at all these pieces of legislation in the view of climate change policy, because the Government has taken an all-policy approach to climate change, and we are looking across the board. This bill is very good for climate change policy. The member pointed out the hypothecation of a fuel excise tax, which just means, basically, that the tax is all tagged now for land transport purposes, and that includes public transport. The Minister responsible for Climate Change Issues told us at the select committee this morning that there has been a 6 percent increase lately in people taking public transport. Obviously, fuel prices are taking people out of their cars and putting them on to public transport.

But the Minister made the very good point that public transport has to come first. There is no point waiting for there suddenly to be this overwhelming demand and then trying to play catch-up. If the buses and the trains are not there for people to travel on, then they will not be able to take public transport. So public transport has to be ahead of the game, and we have put an awful lot of money—I think it is over a 100 percent increase—into funding for public transport; I cannot remember the exact amount. But this hypothecation of that money going towards things like public transport will be very good for the Government’s commitment to climate change and to carbon neutrality.

On that note I will pick out just two things in this bill that again flow into the Government’s climate change policy—those are, of course, rail and coastal shipping, both of which the Minister mentioned. The Government’s decision to buy back the rail system is an incredibly important decision for this country. I think all of us know people who go overseas and then comment on the extensive use of rail in other countries that we like to compare ourselves to. We can look at what happened to our rail system in the 1990s and the early 2000s, and be incredibly happy that the Government has bought back those assets and is committed to getting them going again. In Gisborne we have not had rail since Cyclone Bola, so we have been a long time without any kind of formal rail system. We are very, very pleased, up my way, to know that the Government is committed to rail, and that rail does form an important part of transport policy when it comes to climate change.

The other system that forms an important part is coastal shipping. I believe that coastal shipping is key, in the climate change transport area, to reducing our emissions. We need to remember, of course, that the transport sector is a very large part of our emissions. Imagine if across the whole country we had integrated transport networks, and that more people—not just the people in Auckland and Wellington who already have pretty good public transport systems—were able to move out of their cars and into a public transport system. I am sure we would see an even greater emissions reduction.

I wanted to take a very short call on this bill, following on from the evidence given this morning at the select committee by the Minister responsible for Climate Change Issues. We spent some time on this matter and it is good to see that across all Government portfolios, and across all Government areas and ministries, we are taking an integrated approach to climate change issues. We are also taking a consistent approach. I challenge the next National Party speaker to stand and speak on climate change. Are we surprised that when something else has come along that is good for the environment—another piece of policy that is good for climate change—those members are voting against it? There is a huge vacuum in the area of climate change that the next National speaker needs to address. This part of our emissions profile is big, it needs to be addressed, but once again from the National Party we have all problems and no solutions. Thank you.

PANSY WONG (National) : I have not heard another member manage to confuse so many of us in such a short speech. For a start, she challenged the next speaker, which is me, Pansy Wong, to talk about climate change. I thought, let me have another look at the Order Paper. We are actually debating the Land Transport Management Amendment Bill—right? I was really confused; she wants me to take a call on climate change? I thought, wow, she might like to join our Transport and Industrial Relations Committee, because she might learn a few more things in order to clear up some confusion. I wish that the next Labour member to take a call would speak to the statement, made by Moana Mackey, that the Labour Government embraces private and public partnership in building roads. I would like Labour members to name just one instance where that has happened in the last 8 years—just one, not two; we need only one. Well, I bet there are none.

The other thing that has me even more confused is that every week in the Transport and Industrial Relations Committee when we consider another bill like the Public Transport Management Bill, the Labour members keep complaining about the lack of usage of our public transport and about how we have to do more. But just now Moana Mackey told the House that Labour is very happy that the usage of public transport has gone up and up in the last 8 years. So why is it that half of the Labour members complain about the lack of usage of public transport, while the other half keep saying how much it is going up? I am looking forward to the next Labour member taking a call to clarify some of those statements.

Another statement that I thought quite interesting was that the member said New Zealanders were really happy that the Minister of Finance had spent almost $1 billion on buying back the train system. Actually, I want to tell that member that Australians are even happier than New Zealanders about that. They actually described New Zealanders, particularly Michael Cullen, as having a “Helen moment”—whatever that means! After negotiating a so-called sale price, the Government suddenly discovered that it might have had a liability there that it had not taken account of.

During the select committee process on the Land Transport Management Amendment Bill we travelled to Christchurch and we travelled to Auckland. We met during the adjournment, and we listened to submissions during House sitting hours after question time, which meant there was a real sense of urgency to push the passage of this bill. Our chairman, the Hon Mark Gosche, kept impressing on us the importance of rushing the passing of this bill, and I now have a lot of sympathy for a lot of the submitters, who travelled to all sorts of places—Invercargill to Christchurch, etc.—to help rush through this bill. They thought that the Labour Government was being courageous and bold when it announced that its policy, and measures such as a regional fuel tax, would be implemented as soon as the bill was passed. They thought that the Government would have the conviction to carry that through.

We have just learned from the Minister of Transport, though, that she is going to introduce a Supplementary Order Paper. She will introduce a Supplementary Order Paper, but I believe that she has also been taken by surprise. I remember that one day while we were in the process of rushing through this bill, the intelligent and effective member, my colleague the Hon Maurice Williamson, came to the select committee and asked whether anyone had heard that the Prime Minister had already gone out and made an announcement saying that she would not let New Zealanders suffer from another petrol price hike. Well, I have bad news for the Prime Minister, too. Another of her Ministers, the Hon Maryan Street, announced just prior to Christmas that the accident compensation levy on petrol would go up by 2c on 1 July. I am afraid that the price of petrol is on the rise; accident compensation seems to be a black hole in terms of cost escalation there. So it was to our surprise that while we were rushing the passage of this bill, the Prime Minister unilaterally made an announcement saying we could forget it; the regional fuel tax would not be introduced until New Zealanders found it affordable. Looking at the forecasts for the price of a barrel of oil, I am not too sure for whom and when it will become realistically affordable. But it was very disappointing for those of us who had put so much time and effort into the bill—in the spirit of cooperation, even though we will not be supporting it—to see all that rushing come to a standstill.

The other issue I will raise is that this Labour Government does seem to like to tinker with structures. For some reason, Labour believes that fixing structures or dismantling structures will somehow achieve a policy objective. So here we are debating this Land Transport Management Amendment Bill, and looking at the coming together—the integration, the merger—of Land Transport New Zealand, the office of the Director of Land Transport, and Transit New Zealand into a single strategic Crown entity, to oversee policy, funding, etc. It was quite interesting when the Hon Maurice Williamson started to find it necessary to question all of the submitters who came before the select committee, because they were the same people who had complained to him years ago, asking why the Government had one single entity, with the priority of being the essential body overriding local authorities. People felt that local projects were being given low priority. They badgered him, and eventually he yielded to their wisdom and agreed to the disintegration of that structure, only to find it is being put together again 9 years later.

I get a bit cynical, because the Labour Government also has a ploy, a plan, and it keeps changing its Minister, as well. Therefore, if anybody brings up a query, they will say: “Oh well, that was the previous Minister.” So I am very cynical about this move, which means that in future whenever there is something wrong, people will say: “Well, that was the previous Land Transport Authority.”, or “That was the Office of the Director of Land Transport.”, rather than say: “Well, that’s where the buck stops.” I can demonstrate with Immigration New Zealand, which is in big trouble at the moment. We have the Hon Clayton Cosgrove, who has just taken over from the Hon David Cunliffe, who took over from the Hon Lianne Dalziel, and before her was the Hon Paul Swain. That is why we have lost track of who can actually be held accountable, and I wonder whether the same ploy is now being used on this structural change. So I am afraid, even though we like some parts of this bill, we will find it hard to support it.

PETER BROWN (Deputy Leader—NZ First) : There are parts of the Land Transport Management Amendment Bill that we are delighted with, and there are parts that we will endeavour to change.

Let me first explain the parts we are more than happy with. We are happy with the merger of Land Transport New Zealand and Transit. Providing that there is the right governance structure in place, the right management structure in place, and the right amount of transparency and accountability, we are more than happy with that. We are more than happy with the planning arrangements that this bill provides. We are delighted—absolutely delighted—that money will go into maritime search and rescue from the excise tax taken on the fuel that boat users purchase. We have advocated this for a long time, and the Minister was gracious enough to tell me sometime ago that this is a direct extract from New Zealand First policy. We are—and, indeed, I personally am—also delighted with the hypothecation of the excise tax into road and transport funding.

As I listened to the Hon Maurice Williamson I was thinking that in 1989 I went to the Rt Hon Winston Peters when he was shadow Minister of Transport, or the transport spokesperson. At the time I was working for port companies on port reform and we were trying to get ships to work 7 days a week, 24 hours a day, and with modern equipment. That would make a huge impact on shipping and the export of our commodities. It would also make a huge impact on cargo—freight—travelling to and from ports in a timely, managed manner. I told the Rt Hon Winston Peters that our roading and rail networks would not keep pace with the port network. That was long before I even thought of becoming an MP. Sometime later, when New Zealand First was formed, I reinforced those concerns to Winston Peters, again before I was an MP, even before I put my hat in the ring, I think.

He put into the ballot for members’ bills a bill that would hypothecate all the excise tax into the transport account. The bill came out of the ballot, and I have here the Hansard of the then Minister of Transport. Much of what he said is childish. He said: “I want to start by saying right from the very beginning that the Government is totally opposed to this Bill.” He went on to say: “we disagree with … ‘all duties and taxes’ because it is just a nonsense. The first thing is, there would not be enough roading projects out there to do, or enough contractors out there to do them”. This was 6 years after I went to Winston Peters in a professional capacity and told him that roading was not keeping pace with the freight on the roads. The honourable Minister went on to say: “Even at conservative estimates, with the doubling of the current annual road expenditure and present levels of charge, Transit New Zealand has identified no more than $500 million worth of projects that are worth doing in the future.” With that, the bill was voted down. The Minister, of course, was the Hon Maurice Williamson.

Winston Peters had a second go at this when, as Treasurer of this country, he started the scheme to transfer money across to the roading account on an annual basis—an extra 2.1c a year. By now it would all have been done. One year after New Zealand First started that, we got dumped—we were in coalition at that time.

Hon Maurice Williamson: You walked away.

PETER BROWN: We were dumped by the National Party. Months after that, the transfer ceased—it was a no-no. We have heard for the last 3 years from the Hon Maurice Williamson, who in particular has been on the road to Damascus, that all the money must be put into the roading account, yet he told us tonight that he will walk away from it again.

Having said that, I also have to say that we have some major concerns with this bill. I want to outline our concerns—first and foremost in respect of clause 5, which describes the new section 4, “Treaty of Waitangi”. The new section begins: “In order to recognise and respect the Crown’s responsibility to take appropriate account of the principles of the Treaty of Waitangi and to maintain and improve opportunities for Māori to contribute to land transport decision-making processes”. In other words, it does not say what the principles of the Treaty of Waitangi set out to achieve. Nobody knows. We will put up a Supplementary Order Paper to amend that clause—at least two amendments, possibly three—and we hope the House will vote for them because we want every clause in this bill to make sense to any New Zealander reading it. Nobody can tell us what that clause means when it refers to the principles of the Treaty of Waitangi, and I invite subsequent speakers to tell me, if they know.

Another concern that New Zealand First has relates to the regional fuel tax. We think it is unnecessary, and we think it is another imposition that will be put on to motorists—the truck motorists, the diesel motorists, and the petrol motorists—in an unfair and unnecessary way.

Hon Maurice Williamson: But you’re going to vote for it.

PETER BROWN: I say to Mr Williamson that we will put up a Supplementary Order Paper to address this; we will not just abdicate from the situation. I am certain that the member will support our efforts to do that.

There is a better and fairer way to use some of this GST windfall that the Government is collecting due to the price of petrol and fuel going through the roof. I have figures that show that the current cost of a litre of petrol is 212.9c. Of that figure, the Government collects 23.65c in GST. Pansy Wong just reminded the House that the accident compensation levy will go up by 2c or so in July, and there will be GST on top of that. So the price of a litre of petrol will go up even more. A year ago, or thereabouts, the cost of a litre of petrol was 155.9c, and the GST component was 17.322c. At current levels that is a windfall gain in excess of 6c—nearly 6.5c.

Dr Cullen’s argument is that if people buy petrol, they will not buy butter or cheese and they will not go to the movies—areas where he would collect GST. There is an element of truth in that, but it does not apply to every New Zealander. Some New Zealanders put their money into the bank, some put their money into shares, some go out and spend it leisurely—there would be a GST component there—and some probably put their banknotes or coins under the bed; I do not know. Those people have the ability to spend their dollars in a discretionary manner. They spend it, use it, or invest it for their social and economic well-being. We say that 4c of this 6c windfall should be put into a regional fund for the economic well-being of the whole country, and that regions should be allowed to bid for it. It will work and it should be given a go. We must get away from the idea that every time we have a problem we should charge the motorists more. We must move away from that.

Let me just briefly comment on public-private partnerships. We do not believe in them, because they will mean paying tolls. There are two or three areas of concern. Firstly, the Government can borrow money more cheaply than private enterprises. Secondly, there must be a profit motive when private enterprises are invited into building or doing any enterprise. If people agree with that, so be it. Thirdly, and more important, when a member of Parliament gets into his or her car and travels here and there, he or she gets refunded by the taxpayer, as do the businessman and the person servicing the community. But the average Joe pays his toll from his net income—he has paid tax before he has to pay his toll, and that is unfair. That is why we are against tolling this country and raising petrol costs above what is reasonable and fair. This bill needs to address the concerns that New Zealand First has raised. Thank you very much.

JEANETTE FITZSIMONS (Co-Leader—Green) : The Greens support the second reading of the Land Transport Management Amendment Bill, subject to some minor tweaking in a Supplementary Order Paper at the Committee stage, which I am sure will be no problem for the Government. I want to talk about two main issues today in this second reading speech. The first one is about the question of hypothecation of all petrol excise and road-user charges to the National Land Transport Fund. The Green Party is the only party in Parliament that has consistently challenged the view that all tax on petrol ought to go into roads, any more than the view that all tax on tobacco ought to go into cigarette factories or that all tax on booze ought to go into liquor outlets. The reason is that road use causes substantial external costs to the rest of the economy that have to be funded out of general taxation. Until now the petrol excise has been contributing to those costs. It has not been paying all of them; it has been contributing to them.

Last night the Institution of Professional Engineers put out a very well-considered report, Transport: Engineering the Way Forward. Although we do not agree with everything the institution says, in many respects it has agreed with Green Party policy, particularly where it states in its report: “The mix of public and private providers, funding mechanisms, the interdependency of modes, and network availability may deter the selection of economically optimal modes. Government needs to ensure that the pricing of each of the three freight modes matches the real costs, including non-direct costs.”

There have been two major Government reports, the Land Transport Pricing Study of 1998—which Mr Williamson will remember—and the surface transport costs and charges report of the early 2000s. A lot of money has gone into both of those reports. Both of those reports showed markedly similar outcomes. Rail, for example, paid a very high proportion of its total costs to the economy, private motorcars paid very substantially less, and heavy trucks paid substantially less again—56 percent was the figure for heavy trucks.

So if we are to put all the petrol tax and the road-user charges into a land transport fund in order to pay for transport, then we need to have another way that makes real, in terms of the price of transport, the costs that it causes to the rest of the economy. Something that would do that transparently would be better than the current system, but we do not have anything to do that. There is no intention to do that. Both of those reports showed that the minimum band of confidence for the costs that are caused to the rest of the economy is about $1,200 million a year. That was at the bottom of the band. There is no proposal by anybody in this House that transport users should pay that; that is a subsidy from the taxpayer.

I will turn now to the regional fuel tax, which is the second-best way of funding public transport. It seems that even full hypothecation is not enough, and the Government wants even more money to go into more roads. This is a huge subsidy, again, to road transport users.

Our preference was for the regional fuel tax to go into public transport, which has been dramatically underfunded compared with roading over many years. We did manage to negotiate that only 5c could go into roading. If a second 5c is wanted, then it has to go into alternatives—not just public transport, but cycling facilities and so on. But it has been clear for many, many years that public transport is the poor relation and has been underfunded in terms of what is economically efficient for the economy, and the oil prices have just brought that home very clearly.

Last month’s figures show that vehicle kilometres travelled on the Auckland motorways are down by 3 percent. When have we seen that? Not only has the rate of increase stopped growing but also there is now no increase; there is now a reduction. That 3 percent is an average; it is 7 percent on the North Shore. Is that because the people who live on the North Shore cannot afford petrol and the people who live in South Auckland can? I do not think so. It is because the people on the North Shore now have an alternative. They have a very good busway, and they are using it. The people in South Auckland, who can afford transport the least, do not have a very good alternative. So they are still using their cars.

Let me spell it out really clearly for the House: better public transport reduces road traffic. It reduces maintenance costs, it reduces congestion, and it reduces the need for more roads. The Green Party is not saying that we should have no roads, as the Government always suggests when we ask a question—”Oh, we need roads for buses.” We have a lot of roads; they are full at the moment. They do not need to be full if we use them better, and that is what we want to do.

But what happens if we need public transport? Auckland pays. What happens if we need a new road in Auckland? The country pays. If we need to electrify the rail system to increase the number of passengers it can carry, from 6 million trips a year to 38 million, then Auckland pays not just its own nominal half share but also the interest on the Government’s half share, as well. Auckland is effectively funding the whole thing and, with this legislation, we are very generously allowing it to do it. If we want a new motorway, costing more than twice what that full electrification programme will cost, for just 4.5 kilometres of motorway tunnel in Waterview, then the approach is: “No problem; the Government will pay for that.” We keep hearing that Invercargill is not prepared to contribute to electrifying Auckland’s rail, but Invercargill is apparently quite happy to pay for a tunnel under Waterview, to complete, as they call it, State Highway 20. This is completely false economics.

But the Greens are pragmatists. In the absence of any other form of funding and given the essential nature of finishing the rail scheme in Auckland, we will support the regional fuel tax, and it is important that Auckland has asked for it. The Supplementary Order Paper will make clear, I gather, that that will be phased in at the rate needed. We support that, as well.

But there is a problem. On top of the regional projects chosen by democratic consultation in the region through the regional planning process, Ministers can add their pet projects on top and make Auckland pay the interest charges on those pet projects under new section 65N, which is to be inserted into the Land Transport Management Act by clause 31. This is what I call the Ministers’ pork-barrel clause. I thought initially that new section 65Q, which references new section 65J, meant that the Ministers’ choices for new roads in Auckland would also have to be consistent with regional priorities, as established by a democratic process in Auckland. But a closer reading of that clause has revealed to me that that is not the case. In fact, after the regional priorities have been established and applied to the first 5c that Auckland will fund through the regional fuel tax, Ministers can add a second 5c that does not go through that process and that they do not have to put through that process, and Ministers are not obliged any longer, after the select committee—as they were when the bill came in—to be satisfied that their projects are consistent with the region’s priorities.

This is the worst kind of roading pork-barrel politics, and I do not believe that the Government intended it. It took me so much time last night, when I had another look at this, to work circuitously around the clauses, and around the actual impact of what the select committee had done, that I think it is a mistake. I do not believe that Ministers would want to force Aucklanders to pay the interest costs, through a regional fuel tax, on roading projects that they had not chosen and that were not consistent with their priorities. I think that it is just one of those drafting things that creep in inadvertently. On that basis we will vote for the second reading, because I believe that can be very easily fixed in the Supplementary Order Paper next week. Thank you.

Dr PITA SHARPLES (Co-Leader—Māori Party) : Tēnā koe, Madam Assistant Speaker. There is an out-of-Parliament experience that a select group of MPs have on a regular basis as we go back to our homes. It is called the “rush-hour rock”, a curious tradition in which over 1.4 million New Zealanders, or about a third of our national population, juggle and jostle for road space.

This morning I logged on to aucklandtraffic.co.nz, to see whether things had miraculously changed. I want to share some of the views of Aucklanders about the traffic flow in Auckland City. There is Shaun, who says “I live in Pukekohe. Leaving at 6.30 a.m. each morning, it takes me approximately 1.5 hours to get to Greenlane where I work.” Warren says “Auckland’s public transport system has the worst patronage in Australasia. There are more cars per capita in Auckland than any other city in the world.” Andrew says “Insufferable and Third World. I have lived and worked all around the world, and this is my context. Major investment is needed quickly.” Juanita says “It is horrible every morning north bound and it is horrible every evening … south bound. That’s a possible total of 1½ to 2 hours a day … when I can spend that time at home with my kids. Not just that … I have to leave even earlier, which takes time from my kids, to get to work on time, and leave way later than the actual time I work till … just so the traffic isn’t soooo bad … again more time away from home … I hate Auckland traffic …”. Is it any wonder that in the 2007 Quality of Life Survey the residents of North Shore, Waitakere, and Manukau are the least satisfied of all New Zealanders with their work-life balance?

The Land Transport Management Amendment Bill is huge—huge in its scope and huge in its impact on New Zealanders. It sets out the Government’s high-level priorities for land transport, puts in place a new system for the funding and planning of land transport, and introduces full hypothecation of fuel excise duties to the National Land Transport Fund. The impact of two key issues addressed at the Transport and Industrial Relations Committee is alone significant: firstly, the proposition that rail should be more integrated into the transport planning and funding framework; and, secondly, the tightening up of the rules and regulations around regional fuel taxes.

But many other aspects of this legislation must be seen as being some of the most significant issues facing the nation. No discussion on this bill could begin without acknowledging that the development of public transport, including walkways, must be a key response to the dual challenges of peak oil and climate change. Across New Zealand, 70 percent of our carbon dioxide emissions from transport occur in urban areas. Improved public transport systems will result in lower emissions, greater oil independence, less smog, lower petrol bills, and a greater quality of life given that the chronic road congestion could significantly diminish. We need to make a long-term investment to significantly reduce emissions by making our cities more walking and cycling friendly, investing in high-quality bus services and innovative light-rail systems, reducing our dependence on fossil fuels, and reducing our relatively high levels of car ownership. The issue of investment—the economics of change—is the crux of the matter.

In the medium to long term, public transport will benefit lower-income earners by providing affordable transport as petrol costs continue to increase as a result of the global peak oil production crisis. In the face of this crisis, our priority in the Māori Party has always been to ask what measures might be put in place to assist low-income earners with petrol price rises in the short term. Although we must significantly reduce oil dependency and strategically plan for the utilisation and development of sustainable energy resources, we must equally be vigilant to ensure that all New Zealanders are able to access affordable transport options in a world where oil shortages will mean ever-escalating petrol prices. We will not forget the relentless pressure on working families, on families living in severe and significant hardship. Homeownership, education, energy, food, and health care costs have also risen faster than the overall rate of inflation. Families are struggling to meet the cost of a basic standard of living. Our hospitals are facing the pressure of children suffering Third World diseases, the origins of which have been clearly linked to overcrowding and income poverty. We will continue to speak out about poverty and the desperate conditions that many of our urban dwellers face.

We must protect their interests at all costs, so we will demand that the motorists who pay the extra tax are able to see a clear benefit from doing so, in the form of additional public transport options, including footpaths, that the region might not otherwise get. There must be a clear relationship between the introduction of the fuel tax and tangible results—and quickly. In the case of Tāmaki-makau-rau—Auckland—for instance, we need to see progress made immediately in developing a high-quality rapid transit system incorporating an electrified rail service and the North Shore busway, as well as a significantly improved network of public transport services right across the whole Auckland region.

There are, of course, other groups that stand to benefit from the improvements to the land transport management system. The inaccessible nature of public transport was brought to the attention of the Transport and Industrial Relations Committee by CCS Disability Action. The concepts of participation, accountability, and non-discrimination against disabled people must permeate through land transport planning and funding. It is pleasing to see that specific provision is made for such groups to be included in the consultation rounds of regional transport committees.

I have concentrated on Auckland in response to the concerns of my constituency in my capacity as the member of Parliament for Tamaki Makaurau. There is no doubt that the electrification of the Auckland rail system will be a major step forward for passenger rail services. The Ministry of Works had plans to electrify Auckland rail in the 1940s. The plans were shelved then, just as they were shelved again in 1970. This is the third go at ensuring that the Auckland region is equipped with a world-class public transport rail service. Who would not support the decision to invest in new electric trains, upgraded rail stations, ferry terminals, passenger information and integrated ticketing, and other public transport capital projects? Putting it another way, if it is a choice between fast, clean, quiet electric trains and old, polluting diesel trains that are bursting at the seams at rush hour, I know which locomotion I would be sitting on.

Finally, we are well aware that the controversy around the regional fuel tax has fuelled hot debate in our own party and across the motu—the land. I believe that the submission from the New Zealand Council for Infrastructure Development had some interesting things to say in support of the bill’s provision to enhance long-term, integrated planning and funding of land transport in New Zealand. The submission suggested that we need to better integrate rail, ports, and freight transport logistics into transport planning. Given the need to keep the cost of consumer goods like food, as well as the cost of public transport, as low as possible, this is a critical point that perhaps needs more work in the Committee stage of this bill. The submission also recommended that regional fuel taxes should be optimised according to the transport needs and priorities of a region, not to a predetermined formula decided by statute.

The stages that are required to secure approval for a regional fuel tax include sign-off by the regional transport committees, the regional council, and, finally, the Minister. In all of these stages the existing Local Government Act consultation process requires that tangata whenua and Māori communities be involved. We are satisfied that such a process is adequately robust to ensure that regional fuel taxes are committed to only if they will contribute to publicly supported and beneficial regional transport projects.

During the select committee process of this bill the regional fuel tax regime was tightened up. This resulted in a decision that the regions are unable to implement a regional fuel tax without the prior permission of the Minister. But the other key change was that the maximum amount of 5c for roading has been amended and clarified to include carriageways, bridle-paths, and footpaths. This created a much broader definition of roading that effectively includes within it all but a handful of public transport and freight terminal projects.

We will not shirk from being outspoken in caring for the interests of those who are suffering. We are enthusiastic about getting people off the roads, improving the public transport system, and making a long-term investment in the quality of life of New Zealanders, while at the same time enhancing the quality of our global environment. Thank you, Madam Assistant Speaker.

Hon PETER DUNNE (Leader—United Future) : United Future strongly supports the second reading and subsequent stages of the Land Transport Management Amendment Bill as providing a new way for the planning, development, and funding of land transport - related issues in this country.

I will use two local examples this afternoon to demonstrate the impact of this legislation on the people whom I am privileged to represent in this House. In a few days’ time we will celebrate the 70th anniversary of New Zealand’s first urban electric rail passenger service—the Johnsonville line. For about 25 of the last 70 years I have been fighting a battle to keep the Johnsonville line, and it has come and gone as various councils have come and gone, and as various people with their bright ideas have come and gone. But the really good news is that the decision made last year to commit $227 million to the upgrading of Wellington’s urban rail services has finally given that line a security it has lacked from probably the very early years of its foundation. We will soon start to see work developing to upgrade the tunnels and the platforms so that new units can come on to that line as part of the bigger Wellington urban transport package from 2010.

I say that today because the framework this Land Transport Management Amendment Bill ushers in, in terms of the funding and the responses given to the various modes of transport, is what makes it possible. I can recall in the late 1980s that a very prominent report, the McCutcheon report on public passenger transport, was supposed to be definitive in terms of assigning a value to the various modes of passenger transport alongside roading and ensuring that we got a fair and equitable funding regime for public passenger transport services, be they bus, train, ferry, or whatever, in comparison with the funding that was dedicated to roading. The presumption at that time was that our system was biased in favour of roading and against public transport. Frankly, 20 years later, it has not really worked out that way. This bill is the latest effort to put in place a much better coordinated strategy that will deliver benefits to the people we represent.

The second example that I will quote to the House is almost as old as the first one—that is, the struggle to get some finality on the best way in and out of this city to the north. It is called Transmission Gully. It has had a variety of names over the years. There was an ill-fated plan a few years ago to cantilever a highway out around the rugged Cook Strait coast to the north and somehow go through a whole lot of local communities and provide that security and safety for the people of Wellington. Well, that was utterly rejected—90-something percent of the submissions made were against that proposal.

One of the things United Future was able to do in negotiation with the current Government after the last election was to get a commitment that the funding that had been hitherto set aside for resolving Wellington’s western corridor transport issues could be transferred to Transmission Gully, if that proved to be the most popular and viable outcome from the region’s point of view. So that has come to pass. Now we have the decision this week on a new route, which will be announced shortly, and a clear commitment from the Government—which we welcome—that the next stage can proceed, thus making possible the construction of this highway, which has been posited as a highway since 1939. The area was first identified in 1906 as being a viable option for the main trunk railway line north, so the idea has been around for over 100 years. We are now finally at the point where decisions can be made that give some certainty that this project will proceed.

That is where the other part of this bill becomes important—the provisions relating to how the funding will be delivered through the regional fuel tax. We support the notion of having a regional fuel tax for projects of this type. We welcome the cap being put at 5c for roading projects. The other criteria contained within this bill are to ensure that that tax will be applied only under very specific and tight conditions, and they are these. Firstly, the project has to be identified as being the primary priority of the region and of regional significance. Clearly, that would apply in the case of Transmission Gully. Secondly, the funding has to be for a specific project—for example, the development of a road. It cannot just go into the general pool. Assuming that the time comes when the funding for the project has been exhausted, then the tax itself is exhausted.

The regime that the bill introduces is critically important for the delivery of good transport services for the people of my electorate and for the people of the Wellington region in general. Right across New Zealand we have had the debate for a very long time—the previous speaker, Dr Pita Sharples, alluded to it in respect of Auckland—as to how we fund necessary transport infrastructure. We can all hark back to a golden era, which is ill-defined, when all these things were provided for perfectly, but the reality is that over the postwar period in particular, at the urban level, at the State highway level, and at the national level, funding for our transport infrastructure has been on a steady decline. It reached its apogee in the early years of this century when, in short order, the Government had to rescue the airline and the railway, it had to acknowledge that roads were chronically underfunded, and it also had to rescue the national power system. We can never let that situation occur again, and that is why a bill of this type is so critical.

I am aware that there will be a whole variety of issues and interests about some of the bill’s provisions. I noted yesterday, for instance, at the Federated Farmers national conference, that some concern was expressed about the composition of regional land transport committees. People were asking why it was that some of the major user groups were, apparently, excluded from at least some of these committees at a specific regional council level. That is a matter that the House can explore as the bill proceeds through its remaining stages. But it is important that we have in place framework legislation that enables us to start to make real progress on some of the big transport issues, the resolution of which have eluded us for so long.

The relevance of this to our national economy should not be underestimated. We are a small, isolated trading country. We rely on our ability to get products to market quickly and efficiently. If our roading systems or our rail systems are not up to the mark, then a couple of things will happen. Firstly, we will simply be bypassed by a number of the shipping companies—that is happening already. The outlets for our products will be reduced. Secondly, at a provincial and regional level we will see competition taking away goods from our area to other areas, not necessarily because the prices are better but simply because the transport networks make that more possible. If we are really serious about good infrastructural development to assist the growth of our regions, then the package of measures that this legislation introduces needs to be proceeded with.

I am very supportive of the Land Transport Management Amendment Bill. I welcome the fact that it means we can address significant local transport priorities, particularly those relating to rail and to road. When we talk about peak oil and everything else, there are people who ask why we are building more roads at a time when petrol prices are rising. Those people fail to acknowledge that the motive power for vehicles will change. It may be that some of the hybrid systems now being developed will become more sophisticated. Other alternative forms of energy will be developed. There will always be cars. There will always be people wanting to go from A to B by motor vehicle. We need to ensure that our roading network is capable of serving their needs.

I am very happy to support the bill. I see it as a hugely positive step forward. I acknowledge that the climate that it has brought about—which has seen issues like urban rail in Wellington given some certainty for the long term—will see the development of Transmission Gully, which will give certainty not just to current generations but also to future generations of Wellingtonians. These are immensely positive and beneficial steps for our region. This bill is certainly part of making that happen.

DAVID BENNETT (National—Hamilton East) : It is with great pleasure that I speak in regard to the Land Transport Management Amendment Bill. This bill relates to the fundamental changes that the Labour Government is bringing about in the transport sector as the result of a number of inquiries that have identified some major problems in terms of value for money that the sector has encountered over a number of years. The ministerial advisory group report was probably the first report on the issue, and it indicated there was a serious concern about value for money in many of the projects, especially in the Auckland region. That report was, I guess, a bit of a wake-up call for the Government, and it gave a formal indication that there were problems in the transport sector in terms of the way money was being used in the procurement of roading projects.

That led to the Next Steps in the Land Transport Sector Review, which was a more substantial document that had to determine what the options would be for the future reform of the transport sector. We are seeing that reform in the legislation here today. The proposed merger of Land Transport New Zealand and Transit New Zealand, with the enhanced role of the Ministry of Transport, really is an indication of one of the options that the Next Steps review came up with, and it has been followed by the Government in this case.

On National’s side of the House we have a former Minister of Transport, Maurice Williamson, who has indicated that in many cases in the past the combination of provider and funder caused a number of problems. Not very many years ago they were actually devolved into two separate groups in order to resolve that problem. Now that we are putting them together again, the problems encountered many years ago may potentially come back to haunt the transport sector in the future.

That is of great concern to National, because the strategic decision to merge the two organisations under the Next Steps review may not be the best solution to the problem of ensuring there is value for money in roading. It smacks of a rushed decision-making process by the Government. First of all, the Government was not willing to acknowledge it had a problem regarding value for money and procurement. Then, when proposals did come before the Government, it became a matter of snapping up the proposals that it thought would be easiest to get through before an election. The Government did not have the confidence that the sector would demand in decision making at a level that will influence the future of the transport sector for many years to come, because this is a major structural change in how we govern our transport sector and a large amount of Government funding is used in that sector.

Another aspect of this legislation is the use of extensive planning processes. The National Party welcomes that; planning certainty has been long overdue. Many contractors have made it clear that they believe that certainty is a key driver of their ability to deliver serious roading projects for New Zealand. Those projects typically have a long-term life cycle in building and construction, and also in usage. A year-by-year process of indicating what would be funded has caused a number of dilemmas to those who would provide the construction capability, because they cannot plan ahead in the sense that they want to. The 3-year planning cycle that has been provided here is a start, but the reality is that that industry, along with many other strategic industries in New Zealand, needs to have a much longer process than that. If we look overseas, we see that many countries engage in 20 to 30-year time frames for their planning processes, which gives even greater certainty to organisations involved in providing construction services. So although some planning is provided here, it is not planning to the extent that would provide the impetus for the long-term solutions to be reached that we need as a country on many of these issues. In some ways having that planning provision in the legislation is a start, but it certainly is not a solution that is in the best interests of New Zealand transport policy.

Regional petrol taxes are another big part of this legislation, and that is probably the most interesting provision from a public perspective. That is probably the element that people have grappled with, because they understand the potential for 10c a litre to be added to petrol prices at the pump. At the moment petrol prices are excessively high, as they are around the world. In a lot of cases the issue is one of supply and demand, but essentially the public are resistant to another petrol tax being put on to them at a time when the economy is very slow and personal household budgets are very tight. The Prime Minister has even indicated that although this legislation will provide for regional petrol taxes, she does not intend to implement them in the next year. We have an election coming up, and it seems very convenient to pass legislation to provide for regional petrol taxes but then not implement them.

If the Prime Minister thinks her decision will influence the voting public and they will be swayed by having a 1-year moratorium on petrol taxes, even though they know they will be hit with them in the second and third years, then she has a lot to learn. Clearly the public will see through that. They know that that provision is only a temporary measure to try to abate any cost increase and influence them to vote for this Government at the election. That simply will not work. The public know that petrol prices are high now and will go higher. A 1-year moratorium on petrol tax increases by the Prime Minister for the sake of political expediency will not work in terms of getting votes at the ballot box.

It is also interesting to look at what the Minister of Transport, Annette King, said at the Transport and Industrial Relations Committee last week about regional petrol taxes. She was very averse to agreeing with the Prime Minister’s statement. The Minister is much more resilient in terms of knowing that if the roading projects or the public transport funding that is envisaged for Auckland is to go ahead, there probably will need to be some kind of regional petrol tax in Auckland in the next year. The Minister was less willing to grant an assurance to the public of New Zealand that there would be such a moratorium for the next year. So we see a conflict within the Labour Party as to whether there will be a moratorium. It is doubtful whether the public can give much credence to what the Labour Party has been saying in this area, because if Labour is passing a provision for a petrol tax, then it intends to impose the tax. It may give a short time-frame out of that process, but in reality it will impose that petrol tax at some point in time.

It was interesting also to see what New Zealand First has come up with today in respect of petrol taxes. From listening to the speech by its member, it seems that New Zealand First will not support the petrol tax and thinks it should come out of the GST component of the petrol price. That would be an interesting proposal in the sense that if the money was taken out of the GST component of the petrol price, then that money would have to be taken out of some other form of Government spending. The GST component goes into the funding of the Government accounts, so is New Zealand First also proposing that funding for superannuation or for its SuperGold card be reduced so that the funding the petrol tax would have provided can come from GST? Maybe that is what New Zealand First is saying, but we will have to wait and see whether that is the case. But perhaps it is talking about a reduction in the foreign affairs budget to take account of lower funding from GST and from the Government from taxes, to reconcile with New Zealand First’s reduced petrol tax formula.

The regional petrol tax was also probably the part of the process that most submitters concentrated on, in the sense that many councils told the select committee that they would want to have the ability to determine how the funding would be split. Currently this legislation provides for a mandatory 5c:5c split, and although the Māori Party indicated that there had been some change in that definition, the change is very nominal. The reality is that many councils, especially those outside Auckland, will not want to spend 5c a litre of any regional petrol tax on public transport, simply because they do not have the ability, or need, to do that. The Government of the day should have taken notice of what the regions have said; the Auckland region was the only one that encouraged that split. That is another issue to do with a regional petrol tax that needs to be addressed in this legislation.

Hon DARREN HUGHES (Deputy Leader of the House) : It is amazing how little can be said in 10 minutes, and the previous speaker is an expert at it. He gave a description of everyone else’s policies, but there was not a sentence about what he thinks about this bill from a policy perspective. However, I am happy to take much less than 10 minutes to say how important this bill is for my constituency of Otaki.

The Horowhenua and Kapiti area is looking for new transport initiatives to take place, the most important of which is Transmission Gully, and that is why I am in support of this bill. I believe that it provides a valuable tool in our toolkit so we are able to construct that important road, but the fact that the bill also puts out longer-term plans to allow for the inclusion of public transport is also very, very important. We need electrification of that railway line. It goes through to Waikanae at the moment but it needs to go right through to Palmerston North. The region has to take a holistic view of that issue. To build an expensive road like Transmission Gully we need to look at every option around. That is what this bill does. It gives us another option to look at, as a region, and I appreciate that enormously for our community.

This week alone the preliminary investigation has come back showing the road as being $285 million cheaper than we thought it would be, but there is still a gap between Crown funding and what the region will have to come up with. That is why this kind of legislation gives us that extra tool in the toolkit. I support it, because we have to ensure we have modern 21st century transport for the Wellington region, and this legislation will be welcomed by my constituents. That is why I wanted the opportunity to take a brief call in support of it.

Hon MARYAN STREET (Minister for ACC) : I move, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) be now read a third time. This bill continues to progress this Government’s commitment to a fair and sustainable accident compensation scheme by making changes to cover for work-related injuries; to eligibility for, and entitlement to, weekly compensation; and to entitlement to, and processes for, vocational rehabilitation.

The bill introduces cover for a mental injury caused by exposure to a sudden traumatic event in the course of employment. This is a major development for the scheme, and brings New Zealand’s cover into line with the cover offered to workers in many other countries. The bill is not intended to provide cover for work-related mental injuries caused by a gradual process such as mental stress caused by work overload, or the temporary distress that constitutes a normal response to trauma.

The bill introduces changes to the provisions for work-related gradual process, disease, and infection, to provide more clarity around whether cover is available and how it is determined, and to remove some existing barriers to cover. It does this through amending the test of work-causation set out in the existing Act. The bill also introduces changes that allow greater flexibility to amend the list of occupational diseases provided in schedule 2. The bill updates the weekly compensation framework in order to improve access to weekly compensation, particularly for seasonal and casual workers. It provides fairer and more straightforward weekly compensation for seasonal and casual employees through improving access to weekly compensation for people who are injured while temporarily between jobs. It allows earlier access to minimum weekly compensation for certain claimants, and increases the rate of weekly compensation paid to potential earners.

The bill also enhances the existing legislative provisions for vocational rehabilitation in order to provide better outcomes for claimants. The changes include removal of the existing age-limits for eligibility for vocational rehabilitation. The bill also addresses a number of other policy issues and improvements aimed at making the scheme clearer and more responsive to the needs of claimants.

The Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) builds on the framework provided by the existing legislation to provide a fair and sustainable accident compensation scheme for reducing the incidence and impact of personal injury. It enhances the scheme’s responsiveness to the needs of claimants. I commend this bill to the House.

PANSY WONG (National) : We have seen the headline in the New Zealand Herald today: “More price hikes in the pipeline for drivers” due to the Accident Compensation Corporation (ACC) levy increase through the petrol tax as well as motor vehicle registration fees. We can be assured that with the passage of this bill with the support of New Zealand First, there will be continuing price hikes for employers and for the self-employed in terms of their ACC premium through the work accounts.

Last night we had the revelation from the Minister for ACC, the Hon Maryan Street, that she and the ACC actually have no idea of the cost of some of the new coverage that is introduced by this legislation. For example, the estimated cost for mental injury caused by witnessing a traumatic event ranges between $7.6 million and $76 million. That is a wild guess—I would not even use the word “estimate”. According to the Minister, it does not matter to her that they do not know how much, roughly, the changes will cost, so long as New Zealand can lead the world. We are quite fed up with the Labour Government wanting to lead the world and leaving New Zealanders behind to cope with the increased living costs—those arising from the emissions trading bill, the regional petrol tax, and now the ACC premium—so that the Government can stand up and say it is leading the world. Last night we heard the expression “leading like a pack of lemmings jumping off a cliff”. That expression kept resurfacing, and it is very appropriate.

Let me go into a bit of the detail of this legislation. I will cover the three major changes or new areas of coverage introduced by this legislation. The interesting thing is that the first two—mental injury caused by witnessing a traumatic event, and the changes in the onus of proof with regard to injuries caused by gradual process—are all changes that would apply to those we call workers, but it would not apply to non-workers or non-earners. The reason the Labour Government so boldly introduced those changes is that they have to be funded by employers and the self-employed. When it comes to non-earners, the Government suddenly says providing cover would be too expensive and is not affordable. Indeed, officials have produced reports stating that it is too expensive to extend the coverage to non-earners, so it cannot be done. It is interesting that the Labour Government is blatantly making the statement that an earner’s life, his or her well-being, is worth more than that of a non-earner. If women who are not in the workforce suffer the same traumatic experience, then they will not be covered. There is a problem of equity. If new coverage is to be funded by employers and the self-employed, then the changes will be introduced, but when it comes to non-earners and the cover is to be paid for from general taxation, then it will not be funded. That is the equity issue.

There is also another problem. I am not sure whether this is true, but someone has told me—this has still to be checked out; I learnt this only yesterday—that in respect of volunteers, the Volunteers Employment Protection Act means that when volunteers attend their voluntary work they are assumed to be in the normal workforce. The Minister may think that volunteers who attend the same traumatic event as, for example, a firefighter, would be treated as if they are in the normal workforce, which means they would be covered. We were told that volunteers will not be covered. Of course, that is also a contradiction, given that the Minister said that the cost of providing cover is not a concern because such events will not happen very often. After 9 long years, Labour has suddenly felt the need to rush this legislation through. On the one hand it is confessing that it does not know the cost of providing cover, and on the other hand it is saying we should not worry about the cost and this provision is being introduced because such events will not happen very often. I am afraid that with law and order being an issue and crime getting out of control, they may happen quite often.

The other issue I want to point out is that this legislation is not very fair to employers. Representatives from Massey University came before the Transport and Industrial Relations Committee and said they had tried very hard to be good employers and had introduced good work practices to avoid injuries due to the height of laboratory bench tops or using a keyboard all the time, yet no matter how much good work practice the employer introduces into the workplace, when there is an injury the employer will assume the liability for it. At present, there is a need to prove that the injury was more likely to have occurred at work than after work. My good colleague Colin King raised a very good point. He is a champion shearer, but he is too modest to admit it, and he is also a rugby player. Last night he gave us some personal examples of the difficulty of holding the employer totally liable for back pain, for example. He asked how we could know how much of it was attributable to shearing work, and how much was because the individual also engaged in rugby activities. It was very, very unfair to make that change in the onus of proof, even though a provision has been put in to say that where there is doubt, the ACC can investigate. We all know that the Privacy Act and all sorts of legislation will make it difficult for employers, or even for the ACC, to inspect any individual’s home environment in order to decide whether it has contributed more than the work environment has to those gradual injuries.

The last matter that I want to raise is one that I think is really outrageous. For a long time the legislation has had a provision that if an individual intentionally inflicts self-harm, then he or she would not be entitled to accident compensation. Labour, with the support of New Zealand First, has repealed that provision. That means that an individual who intentionally inflicts self-injuries, or who attempts to commit suicide, will now be entitled to compensation as well as to treatment. We would feel appalled about anyone in New Zealand going out there to encourage or entice people to commit suicide. But we in this House are now passing legislation that is against the objectives of the accident compensation scheme. One of the scheme’s principal purposes is to minimise injury. We are now sitting here and debating the passing of legislation that says it is OK for people to inflict injuries on themselves, and in fact the corporation will pay them compensation. What a nonsense that is. In 2005 there were an estimated 5,000 reported cases of attempted suicide, and the Minister and the officials did not even bother to estimate the costs relating to that. But what is the message we are sending out here to people—that it is OK to inflict self-injury? Is that why the corporation is spending $5 million on a campaign—to say that is OK? It is appalling, it is an outrage, and National will vote against this bill.

Hon DARREN HUGHES (Deputy Leader of the House) : It is an extraordinary admission that one’s plan for the future is as pessimistic as that of that member, Pansy Wong; that one can be an Opposition spokesperson and longstanding member of Parliament—as that member is—whose main criticism of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) is that one does not want New Zealand to be a world leader in the area of injury prevention and compensation for working people. That shows a remarkable lack of optimism for our country and security, and a lack of confidence in our people. I am staggered at the contribution that member has made, because if there is one area where New Zealand has an extraordinarily proud record, it is accident compensation. I say to Mrs Wong that we can be very proud of this scheme, and that her speech and lack of policy detail and vision in this area are extraordinary. To criticise something around the edges then say she will not vote for the whole thing is absolutely unbelievable.

Labour is very proud to support this legislation in Parliament this afternoon because in Government we have continually expanded, extended, and maintained the protections for our accident compensation scheme. That has been an important principle underlining our policy whenever we have brought bills like this to Parliament. The Minister for ACC, the Hon Maryan Street, has outlined the two key areas that the scheme will now cover: workers who suffer a sudden traumatic event, and casual and temporary workers in our economy. The passing of this bill alone could benefit up to 400,000 people. I find it unbelievable that any party could vote against a bill that could potentially extend the hand of support from our society to 400,000 temporary workers. That is why this bill is so important and why our plan for the future is so important, as well.

The National Party’s record on accident compensation is woeful. We are more than happy to debate that with National members on the campaign trail, because National’s policy will always mean less cover, not more, for the most vulnerable workers. That is the stark reality of National’s privatised model, and the fact that National members will not talk about it in the debate shows how embarrassed they are about it. It is not aimed at helping the many; it is aimed at delivering to the few. That is why that party will not talk about it. But we know from National’s record in Government that the people it puts in charge of accident compensation are the likes of Jenny Shipley and Murray McCully. Those two names are an open-and-shut case as to National’s commitment to accident compensation.

We know from the work that has been published—I know that the Minister recently launched a book by Hazel Armstrong and Rob Laurs that covers this area—how important this scheme that Sir Owen Woodhouse brought to our country has been. I say to Mrs Wong and the other members of her party that when we debate in Parliament the importance of the scheme, we ought to debate how to improve the scheme—how to make it better and take it—

Pansy Wong: We’re so scared.

Hon DARREN HUGHES: The member says she is scared, but this is not about intimidating politicians. She is so limited in her vision that she thinks this is a political issue. This is about working people in our country, and about making sure that if some terrible event happens to them—it could happen an hour from now and none of us would know about it—then our community gives them protection. If the member is too narrow-minded to support a bill that does that, because she is interested in the politics rather than the principle and the policy, then she can go out on the campaign trail and debate it. We want to do that; we want to make accident compensation an election issue. By passing this bill we can report to the people we believe in and represent that 400,000 of them will get extra cover that they did not have before we became the Government. For that reason alone, the bill is worth our support.

Dr PAUL HUTCHISON (National—Port Waikato) : Thank you, Mr Deputy Speaker, for the opportunity to speak on this third reading of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2). I must say that the previous speech was a somewhat self-righteous contribution by the Hon Darren Hughes. He forgets who introduced accident compensation back in 1974.

Hon Darren Hughes: No, I didn’t forget.

Dr PAUL HUTCHISON: Well, the member might have forgotten that in a commentary on Rebuilding ACC Beyond 2000, people such as Sir William Birch were very much endorsed in their views by none other than the Rt Hon Sir Owen Woodhouse.

I think it is important to go back for just a moment to 18 October 1972 and the occasion of the third reading of the initial bill, when the Rt Hon Sir J R Marshall said: “I am proud to have been associated with it, and proud that the National Government has taken the lead in introducing legislation which leads the world in this field. No other country has ventured into this area to the same extent as the National Government in New Zealand has done to provide coverage for people who are earners and who suffer accidents at any time of the day or night, without recourse to the question of negligence.”

What we are concerned about in regard to this legislation that Labour has brought in is the fact that, unfortunately, it blurs the margins between injuries and accidents and other medical conditions. The bill is extremely poorly thought-out, and it is extremely poorly costed, which has been evidenced by the fact that when I spoke on this bill in its first reading, we learnt that the difference in the costs estimated by the Labour Government at that stage of events went from $7.2 million to $72.2 million—a 1,000 percent rise. And 9 months later, after the select committee process—which unfortunately I was unable to be present at—the Labour Government still comes up with totally inappropriate and loose costings. It is no wonder this Labour Government is on its way out. It is no wonder this Labour Government has taken New Zealand two slots down the OECD ladder in the last 9 years, to the point where we cannot afford decent health, we cannot afford decent education, and we cannot afford a good social welfare system—let alone the sort of accident compensation scheme that we deserve.

I would like to go through some of the aspects of this legislation about which the Labour Government has been only too ready to lead New Zealanders over the cliff like lemmings. The first aspect relates, of course, to work-related gradual process, disease, and infection. If I look at the report of the ministerial advisory panel, I see on the very first page that the advisory panel recognises that further research is required to fully calculate the cost implications of its recommendations. Surely, any responsible Government should have made sure that it is more accurate than a span of 1,000 percent. The Labour Government of 2008 has totally, totally failed to do that.

The ministerial advisory panel also suggested that the barrier for cover for claimants was inappropriate, and the panel noted that the burden of proof rested with the claimant and could be hard to meet. But this Government has totally reversed the burden of proof so that it now rests totally on the employer. It is very interesting to see what large companies such as New Zealand Steel—a very good New Zealand employer that employs over 1,200 people in my electorate—have to say about the costs. That company is absolutely appalled as to how those costs have been worked out.

But I want to just go on in the last few moments to talk about self-inflicted personal injuries and suicide, and what New Zealand Steel had to say about that. It said that the proposed change will provide entitlements and incentives for individuals who wilfully self-inflict injuries, actions that New Zealand society considers abhorrent. It actually provides incentives for individuals to self-harm. The very fact that this Labour Government seriously considers adding this clause is an indictment on it, an indictment on its sense of fairness, and an indictment on the very fact that it lacks a practical common-sense approach to problems facing society. That is why there cannot be a bipartisan agreement on this legislation today, as there was back in 1974. I have looked through the Hansard of 1972 to see whether there was any mention of self-inflicted harm and, indeed, there was not. It is a sad day when this Labour Government brings in such incredibly irresponsible legislation.

PETER BROWN (Deputy Leader—NZ First) : Just on that point—about self-inflicted harm—I agree with the member that it is a sad day. But the bill actually reflects what is happening in society, and there is little anybody can do about it. New Zealand First members checked into the issue and we felt as concerned about it as the member obviously does, but the bill reflects what is actually happening, and it is better to have legislation that covers it.

Let me just say that the accident compensation scheme legislation that the National Government brought in, in 1974, was good, but, by crikey, subsequent National Governments decimated it—cut it to shreds. In 1974 it was good legislation, but then that Bill Birch and a few others got on to it, and they tore it to shreds.

New Zealand First will be supporting this legislation, but we think it should have gone further. For example, we would like to extend the coverage, and we would like to blur the line between accidents and sickness, and that can be done. Years ago—

David Bennett: Is that out of self-interest, Peter?

PETER BROWN: Mr Bennett should shut his mouth for a minute and he might learn something. Years ago I was covered by accident compensation. [Interruption]

I raise a point of order, Mr Speaker. Members are making so much noise over there that they cannot even understand their own thinking.

Mr DEPUTY SPEAKER: It is about time members paid attention to the speaker.

PETER BROWN: Some years ago I was covered through workplace insurance—and most New Zealanders see the Accident Compensation Corporation as an insurance company. My health was also covered by the company. I cannot for the life of me see why, gradually, those two entities cannot be combined together.

Katrina Shanks: How are you going to fund it, Mr Brown?

PETER BROWN: We can fund it in the same way—pay for it. Think a little bit and pay for it! The National Party has raised two issues and they both revolve round funding. If that woman over there would stop shouting like a fishwife, she might learn, also.

The National Party wants more coverage, and New Zealand First has some support for that. National wants cover for people who witness a traumatic event who are not workers—in other words, people covered by the non-earners account; in other words, people covered by the taxpayer—and it wants retrospectivity.

David Bennett last night made a big play of retrospective legislation, only to be torn to shreds, because he had no substance to his argument, by Russell Fairbrother. I have never seen an MP in this House verbally torn to shreds to such an extent because he did not know a thing. He was so bad, so ashamed, that he got under the desk. All one could see was the cue ball!

Both aspects require extra funding, so where does it come from? Well, the National Party tells us that there are umpteen dollars in the Crown account—so much that it will give very significant tax cuts if, and when, it becomes the Government. So National is saying—and I assume it has done its homework—that there is plenty of money to dish out to taxpayers. Well, what about giving a little bit to accident victims by extending the coverage?

Katrina Shanks: How much, Mr Brown; how much do you need?

PETER BROWN: I do not need it; National is saying it wants to extend the coverage. Let me give the other option. Accident compensation is meant to be fully funded by the year 2014. That is not set in concrete. Moving the date out another 10 years would allow some funding that currently goes into accident compensation to be spent in another area. I have checked that out. It is quite reasonable and quite straightforward.

Katrina Shanks: How much?

PETER BROWN: That member does not have a clue what she is talking about. National had a very good idea, and it implemented that very good idea. It saddens me somewhat, because at one time I was a member of the National Party, that National members are now behaving like hollow men with an empty drum making an empty noise. That member behind me, David Bennett, makes as much empty noise as anybody I have ever known.

Hon Darren Hughes: He is their star!

PETER BROWN: He is their star! We need to do more for accident victims in this country. In our view this bill is a start, and it is a good start, but there is more to come. I hope the National Party takes that on board, because, from the way National members are talking, I think they will rescind this legislation if they get on the Treasury benches. The public should be aware that National will rescind this legislation if it gets on the Treasury benches, and that would be a sad day for New Zealanders.

I have the utmost sympathy for people who are involved in very serious accidents. I have spoken to many of them. I have seen serious accidents during my time on the waterfront and in shipping; we do have them, from time to time. I can tell members that accident victims lead a life of hell, and it is about time that this country did more for them. The Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) goes some way towards doing that, but it does not go far enough, and I know that the Minister for ACC has taken note of New Zealand First’s views. However, New Zealand First supports this bill because it does that much more for accident victims.

Mr DEPUTY SPEAKER: Before I call the next speaker, I want to apologise to Dr Paul Hutchison, the speaker before the previous one. He was due to speak for another 4 minutes, but because of an equipment malfunction that time was taken off him. I say to Dr Hutchison that he has 4 minutes remaining. I know that the member was just warming up, and he is most welcome to take the remainder of his call now if he wishes to seek leave to do so.

Dr Paul Hutchison: I seek leave to speak for another 4 minutes.

Mr DEPUTY SPEAKER: Leave has been sought for that course to be followed. Is there any objection? There is no objection.

Dr PAUL HUTCHISON (National—Port Waikato) : That is very generous of you, Mr Deputy Speaker, and very generous of the House, because the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) is important legislation that needs to be properly aired.

One of the things I wanted to speak about was the fact that it was Sir Owen Woodhouse who acknowledged, in a piece he wrote entitled Rebuilding ACC Beyond 2000, that the “basic principles which support the accident scheme have been under the closest scrutiny for about 30 years, both here and overseas.” His piece continues: “Except for the occasional ideologue they have been regularly approved during that long period. In Government circles, for example, they were expressly endorsed by Sir William Birch on 11th November 1991, and as recently as 2nd May 1995 by the Honourable Bruce Cliffe.”

The concern that National has had today involves the excesses that Labour has gone to in terms of this legislation. If the amendments that Labour proposed to put in had been well thought-out, equitable, and not inconsistent, then maybe we could have achieved a bipartisan approach to them.

In my last few minutes of speaking time I want to express the fact that good employers such as New Zealand Steel—employers that took a very practical aspect and view towards accident compensation—were horrified by some of the things in this legislation. In relation to cover for work-related mental injury, New Zealand Steel stated: “the proposals offer an increased level of cover, but only to one group of levy payers—those funded by employers. This creates further inconsistencies in the recognition of a condition suffered by an individual.”

When New Zealand Steel goes on to talk about personal injury caused by work-related gradual process, it states: “The proposed changes remove all onus of proof from an individual … the ACC scheme should not be a default for what the New Zealand public health system cannot cope with.” That indeed is a very important and appropriate point to make. The company says it is virtually impossible to investigate a person’s non-work environment without encroaching on an individual’s right to privacy.

Finally, New Zealand Steel made the point about self-inflicted personal injuries and suicides. We heard time and time again about the awful incident involving the train driver and the mental injuries that he received. But if there happened to be a young woman with a child at that rail crossing who witnessed that horrific scene, that young woman would not be covered under this legislation. That is why National will not support this legislation. It is inequitable, it is inconsistent, and, as well as that, it has been hopelessly costed in terms of the realities of the funding. Thank you, Mr Deputy Speaker.

Dr PITA SHARPLES (Co-Leader—Māori Party) : Tēnā koe, Mr Deputy Speaker. Last night, as the debate raged on about this Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2), I thought back to when I was the chief executive of the Race Relations Office, and to the incidents that happened at my workplace. Someone collapsed in our office and we tried CPR. Green stuff started coming out of his mouth. It was pretty yucky, and he died. I remember another time when a young man’s face was half shot away by a gang member in front of us. It is 30 years later, and I remember every incident so very clearly, so it gives me a real understanding of some of the issues that this bill is trying to address.

The mental injury arising from a sudden traumatic event, such as a death in the workplace, is not something that one can address just as an agenda item at the weekly staff meeting and then hope it is the end of the matter. Mental injuries are not that easy. Fortunately, the level of awareness around mental health issues has advanced dramatically over recent years. In fact, in a recent infamous poll, veteran rugby hero John Kirwan was ranked at the top end of the list; he was placed sixth for being open and honest about mental health issues. In a poll of 85, politicians were ranked at an all-time low, stuck between slot 66 and 82—that is, the dozen of us who even made the grade. Although the poll did not do much for our collective mental health, I did think it was interesting that the public mood was so positive about the way in which Mr Kirwan has brought a taboo subject out into the light. So it is pleasing that today we have legislation in place to ensure that there will be cover for the appropriate treatment to facilitate rehabilitation for mental injury from such traumatic events.

The Accident Compensation Corporation (ACC) currently compensates for mental trauma for victims of sexual abuse and physical injury, and we are glad to support the extension to cover mental trauma resulting from workplace incidents. It is indeed progress, as the Aotearoa New Zealand Association of Social Workers found, that we have legislation that appears to reflect an improved understanding of mental injury. Of course, there is probably no more stark example of the need for an appropriate response to workplace trauma than the tragedy that occurred in my own electorate of Tamaki Makaurau in 2001—the horrible triple murders at the Mount Wellington - Panmure Returned Services Association—that were experienced by a survivor who has suffered years of serious injury and rehabilitation. I place on record here my acknowledgment of the significance of the recent decision by the Supreme Court in upholding the appeal for the right to sue the Department of Corrections, which manages Parole Board orders. But for the purposes of this bill today, I simply say that when we consider the types of workplace incidents in which trauma may be experienced, there is no more powerful justification for the need of such support than when one considers the horrific violence witnessed in the RSA murders.

There was, however, a very good point made in the course of the bill by Victim Support and the Employers and Manufacturers Association (Northern), which has been spoken about today. Both of those groups highlighted the fact that treatment for mental injury from witnessing a trauma should be available to all people, not just to employees. The Employers and Manufacturers Association (Northern) gave a recent example of the horrific effects that would play out for years to come in relation to that 8-year-old boy—again in my electorate—who witnessed his mother being attacked in the Manukau City shopping centre car-park. The association submitted that it was blatantly unjust that although a young boy would not be eligible under this scheme because he is not a worker, an employee of the supermarket who witnessed the event would be covered. The distinction between compensation in respect of whether mental harm occurs in the workplace or elsewhere is an arbitrary one, and we sincerely hope that the Minister is able to give priority to ensuring that appropriate cover is in place to support all persons.

The recent case before the Human Rights Review Tribunal gives us considerable confidence that this Minister is prepared to respond quickly. My colleague Tariana Turia is responsible for having brought to the House a ruling from the Human Rights Commission of 19 May 2008, which was described as a “landmark in human rights law in that it shows how any New Zealander can challenge legislation they believe to be discriminatory and impacts upon them adversely”. The decision made on that day concluded that provisions in the accident compensation law are inconsistent with the right to freedom from discrimination, specifically on the grounds of age. And here we are, just a month later, with amendments that stipulate that age limits for weekly compensation cannot be used as a factor in deciding whether vocational rehabilitation would be cost-effective. So I congratulate Minister Street, Tariana Turia, and, of course, the plaintiff, John Howard, on a successful action across all fronts.

I can only hope that it paves the way for another ground-breaking ruling to be made on another case now before the Human Rights Review Tribunal. I refer to the case taken by the Child Poverty Action Group, in which it alleges the in-work tax credit discriminates against 220,000 children on the basis of work status. This is an act of discrimination that leaves around 150,000 children in severe or significant hardship because their families are denied at least $60 a week in family support.

We support the changes to provisions for vocational rehabilitation and independence. The bill gives ACC the discretion to extend the 3-year limit on vocational rehabilitation, recognising that for some claimants rehabilitation cannot be easily wrapped up within the defined time frame. We are pleased also to support the repeal of section 119, so that ACC can provide entitlements to claimants suffering wilfully inflicted injury. There is still much to do to address the gaps in the protection of young and older workers, the disabled, and those who have been affected by asbestos or chemical solvent exposure. But this bill makes significant steps to improve access to compensation for previously disenfranchised groups, particularly those engaged in non-standard work, those mentally injured by trauma, those between work, and those in seasonal and casual work. The Māori Party has always taken an active interest in both workers’ rights and the right to work, and we are happy to support this bill at its third reading. Kia ora.

DAVID BENNETT (National—Hamilton East) : It is a pleasure to rise to talk on the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2). This is the third reading of a bill that we have had substantial debate on over the last couple of days.

I think there is an element of irony in that we are about to farewell one of, I guess, the personalities of this House, who is known as somebody who will stand up and say what he believes in. It is very good to see that such a good-sized audience has come here to hear him. I will try to stretch out my speech to 5.30 p.m., when Nandor Tanczos will come here to give his valedictory speech. It is good to see that so many people have come here so early to support him.

This bill is an example of ideology not being implemented in reality. If the ideology behind this bill were taken to its full extent, the bill would not have the limitations that Labour has put in it. Although it recognises that mental injury deserves accident compensation treatment and support in the future, it has a number of fish-hooks that limit the application of accident compensation coverage.

The biggest delineation in the bill is that between work-related and non - work-related injury. The bill applies only to work-related injury. A number of submitters suggested to the Transport and Industrial Relations Committee that it was unfair that there was no encompassment of non - work-related injury. If we were to take the ideology, the pure basis for the legislation, to its full extent, we would have the legislation cover both work-related and non - work-related injury.

One of the submitters gave a very clear example to show when mental injury is covered and when it is not covered. The New Zealand Institute of Safety Management gave an example that had a number of possible scenarios. A motor vehicle accident could create two classes of injury. First of all, the employee, who was driving, will have his or her physical injuries covered, which is what happens now, plus any mental harm that may arise—that is the additional component under this legislation. The pedestrian who was hit by the employee, not being at work, will have his or her physical injuries covered, and any mental harm that is caused by those injuries will be covered under this legislation. That is pretty much as one would expect for those two cases. However, the witness, who was mentally injured, not being at work, will get nothing. That situation is not covered by this legislation. That non - work-related injury is exempt from receiving the benefits of the accident compensation system. But an ambulance employee who experienced mental trauma from seeing the event is entitled to claim; because that employee was at work, he or she will be covered under the legislation. Many submitters raised that concern in the select committee.

Another big concern that was raised in the select committee related to the examples that were provided. A number of examples were given of train drivers and dairy company tanker drivers who, in circumstances totally beyond their control, had suffered mental injury because of somebody else’s actions affecting them when they were driving in the normal course of their work. Such situations will be covered when they arise in the future, but the examples that were given to the select committee will not be covered under this legislation, because there is no element of retrospectivity in it. The point that was being made last night was that if we are going to provide cover for people, then, taking it to its pure policy extent, we should also provide cover for the examples that had come before the select committee—people who, while being engaged in their normal work conduct, had experienced circumstances beyond their control that had resulted in their suffering mental injury. Those people had quite horrific stories. I do not think anyone on the select committee would wish those experiences on anyone. I think the select committee members would certainly want to see some kind of recognition of the injury that those people had sustained. But they will not get anything under this legislation. This legislation will not provide any support for people who have suffered that kind of mental injury in the past.

That is a shame. If Labour, in promoting this legislation, had really wanted to deal with the issue, it would have dealt fully with it. It did not. Labour members picked out only what they felt they could deal with in terms of this situation, because they had looked at the numbers, and, from the way that the numbers stacked up, it would be very expensive to extend this legislation in the way that New Zealand First had proposed earlier. Full coverage across a whole range of situations would be a major expense for the accident compensation system and on the Government of the day.

This legislation also will be a major expense for the employer. There is no definite indication of what the actual cost will be. The cost to the employers is up in the air; there is no definite figure that can be plucked out as being the amount that the employers will have to cover in the future. There was a range of estimates, from the extremely low—say, $30 million—to a much higher figure that would be well beyond the means of many employers.

So there are three problems with this legislation. The first is the exemption of non - work-related injury. The second is that it does not cover all situations, in the sense that the people who provided their stories in front of the select committee will not be covered by it. The third problem is that the costing of it is not identifiable; there will be major costs for the employers, but those costs have no formal basis in the sense that they have not been promoted and we do not have a concrete figure to work with.

We are getting close to 5.30 p.m. and Nandor Tanczos’ valedictory speech. Nandor has not arrived yet, but I say to the Green Party members that, as a National Party MP and also as somebody from the Waikato, it has been a privilege to have Nandor represent the Waikato and his party in Parliament. He has been a national figure, and I think everybody in this Parliament will treasure his having been here. The personalities who make up a Parliament are something that we look forward to, and something that I think the public look forward to, as well. The personalities are the ones who get the coverage; they represent different points of view, different beliefs, or different expressions.

Hon Member: The House of Representatives.

DAVID BENNETT: It is the House of Representatives, as my colleague has said. It is good that we have representatives from a wide range of backgrounds. The public support for Nandor in the gallery today is an example of that. I have been told that I have to keep going! I say to Nandor that he is late for his valedictory speech. We will have a vote now, but I want to say that it has been a pleasure to serve with Nandor, and the National Party wishes him all the best.

Hon ANNETTE KING (Minister of Justice) : I move, That the Organised Crime (Penalties and Sentencing) Bill be now read a first time. I intend to move that the bill be considered by the Justice and Electoral Committee and that the committee report finally to the House on or before 1 September 2008. In summary, this bill increases the maximum penalty for participation in an organised criminal group from 5 years’ to 10 years’ imprisonment. It also makes participation in such groups an aggravating factor when sentencing an individual for offences committed as part of the offender’s involvement in organised crime.

Organised criminal activity in New Zealand ranges from sophisticated transnational operations involving many millions of dollars to small-time street gatherings of patched gang members. It is those criminal groups, both large and small, who plague our communities with intimidation, extortion, illegal drugs, identity fraud, serious property crimes, and violence. The tools needed to combat the diverse organised criminal gangs must therefore be comprehensive, flexible, and effective. This Government is dedicated to combating organised crime at all levels, and has previously announced key initiatives such as the organised crime strategy and the intended establishment of the Organised and Financial Crime Agency of New Zealand, or “OFCANZ”.

However, the success of the Government’s strategy and of the Organised and Financial Crime Agency will depend on the provision of a strong statutory framework that provides an effective platform from which to launch our law enforcement interventions. Thus this bill is the third of four major pieces of legislation to tackle serious and organised crime in New Zealand—namely, the Criminal Proceeds (Recovery) Bill, the Serious Fraud Office (Abolition and Transitional Provisions) Bill, the Organised Crime (Penalties and Sentencing) Bill, and, finally, the intended search and surveillance powers bill. The new powers, penalties, and law enforcement improvements provided in these four bills will enhance investigations, facilitate prosecutions, and provide tougher action against organised crime and gangs.

The first amendment provided in this bill increases the penalties under section 98A of the Crimes Act 1961. Section 98A was originally enacted to meet New Zealand’s international obligations under article 5 of the United Nations Convention Against Transnational Organized Crime. The section extends criminal liability beyond the traditional parameters of aiding and abetting or conspiracy, by enabling the prosecution of those who direct criminal organisations without otherwise engaging in criminal acts. Section 98A enables the prosecution of the leaders and members of organised criminal groups who plan and organise those criminal businesses without getting their hands dirty. Those gang chiefs, or kingpins, are often the real controllers of criminal activity: the ones who direct others and make the big decisions; the ones whom prospects look up to and want to emulate. Therefore, the formulation of section 98A is broad enough to capture the recruiting of gang prospects and the financing and strategic planning of gang activities.

This bill will increase the maximum penalty for those activities from 5 years’ to 10 years’ imprisonment. I do not believe that the current penalty level adequately reflects the range of culpability caught by section 98A offending. In particular, it does not reflect the potential application of the section to deal with crime bosses who organise criminal activity without directly committing crimes themselves. Increasing the maximum penalty for the offences covered by section 98A will not only send a strong message to gang leaders that their behaviour will not be tolerated but also greatly increase the ability of the police to combat those socially corrosive activities.

Section 98A of the Crimes Act requires proof of the existence of an organised criminal group and of the gang members’ participation in that group. In the absence of proof of a completed crime, communications interception is critical. However, because section 98A does not carry a penalty of 10 years’ imprisonment or more, an investigation undertaken under that section does not qualify for the issuing of an interception warrant. That also means that intelligence gathered when using an interception warrant obtained on other grounds cannot be used in a prosecution undertaken under section 98A. Those are critical deficiencies, and they have resulted in the police being hamstrung when they have attempted to enforce the law. Increasing the maximum penalty for breaches of section 98A from 5 years’ to 10 years’ imprisonment will ensure that interception warrants will be available to the police when they investigate offending by crime bosses, and will thus significantly increase the ability of the police to obtain a conviction. Although the availability of interception powers is not the substantive justification for increasing the maximum penalty, it is an important consequence of the amendment. This bill will not only make it easier for the police to detect and prosecute gang leaders but also ensure that when crime bosses are held to account for their offending, the penalties imposed reflect the seriousness of their actions.

The second amendment in this bill adds gang or organised crime participation as an aggravating factor for sentencing under section 9 of the Sentencing Act 2002. The list of aggravating factors in section 9 already targets elements of violence, premeditation, and severity that are inherent in gang-related offending. But, once again, this amendment sends an important message to those organised crime leaders who try so hard to avoid direct responsibility for their actions. The Court of Appeal has acknowledged that gangs and other groups within the community who are responsible for major organised crime must expect those who represent them in committing crime to have their connections recognised as increasing the seriousness of the offending. Similarly, the courts have long recognised gang leadership as an aggravating feature. This bill will extend section 9 in recognition that offending is more serious when it is committed for the benefit of, at the direction of, or in association with an organised criminal gang. The purpose of that is to provide parliamentary support for that judicial observation, and it is aimed at deterring and undermining ongoing participation in entrenched gangs.

This bill is an omnibus bill—that is, a bill that amends more than one principal Act. As such it is intended that the bill be divided into the following two separate bills in the Committee of the whole House stage: a crimes amendment bill and a sentencing amendment bill.

This bill will enhance the capabilities of law enforcement agencies and ensure that organised criminal gang leaders who organise and plan crimes are able to be brought to justice. I intend to move that the Organised Crime (Penalties and Sentencing) Bill be considered by the Justice and Electoral Committee, and that the committee be directed to report finally to the House on or before 1 September 2008. I commend this bill to the House.

Dr RICHARD WORTH (National) : There cannot be too many bills that come to this Parliament with only two pages, but that is the case of the Organised Crime (Penalties and Sentencing) Bill, which National unreservedly supports. These are serious issues, and I think most members on this side of the House will ask why the Government has not moved more quickly to deal with those issues. The problem of organised crime in New Zealand, which the Government has been hugely slow to deal with, is an insidious, growing, and dangerous one. I note, for example, that Hell’s Angels is rated the most influential crime group in New Zealand and the hardest to catch. I raise its motto as an issue for consideration by this House as to the seriousness of this issue. What is its motto? Its motto is “Three people can keep a secret, if two are dead.”

I think we all know about the rise in violent crime in New Zealand. I think we all know also about the epidemic of methamphetamine, otherwise known as P, that is taking an increasing hold on communities—not only communities in South Auckland but communities where what might be known as the higher socio-economic groups live. It is truly frightening. As grandparents and as parents we must be very concerned about what might happen to our children who are exposed to these drugs, which to a significant extent are distributed by gangs in New Zealand. We are not talking about only one gang. I have probably been wrong in singling out Hell’s Angels. We are talking also about groups like the Headhunters and Highway 61.

National has been very committed in taking a strong stance on organised crime. I think we have felt incredibly frustrated that the Government has not been prepared to respond to some of the things that National has said, as a matter of policy, are very much part of the fabric of what I am certain will be a new Government in 2009. I will talk for a moment about some of the things we will do to deal with this issue, some of the things we will do to give the police increased powers to listen in on gang communications, and some of the things we will do to give the police increased powers to storm gang fortifications and destroy them. This Government is seemingly reluctant to do that, even though—and I am looking at the Minister of Justice—there are already some powers in the legislation that the Government seems reluctant to employ. We will also make it illegal to be a member of a criminal organisation. I pause, sadly I guess, but with wry amusement, to note that, in connection with Part 2 of the bill, our announced policy is to amend the Sentencing Act to make membership of a gang an aggravating factor in sentencing. Wow! The Government has taken that policy. Well, maybe it is good that it has snatched the policy, but it should have taken it a long time before this and it should have implemented it in legislation, rather than leaving it to this very last moment.

I think also, when we look at these issues relating to organised crime, that we need to focus a little more strongly on the plight of victims than this Government is prepared to do, and I would like to say something about that. It may be the case that the Government will take these policies; if it does, then good on it! That is an acceptance of the fact that the policies that National espouses are strong, and an indication that they enjoy some degree of bipartisan support across this House. One of the things we will do, for example, is set up a victim compensation scheme, funded by a levy on all offenders at the point of sentencing. To this point, the Labour-led Government has dismissed that, and I think in quite sneering terms. It is interesting to note that in Canada there is such a scheme, and that the United Kingdom Government brought in such a regime as recently as April 2007. There are other things that we will do in connection with the plight of victims.

Dealing with organised crime is very challenging and very difficult—I doubt anyone would dispute that—and we have a whole lot of policies that are firmly focused around that issue. It is unenviable police work, and those who are present in the House who have had experience in policing will know how dangerous it is, and what the consequences are for those involved.

• Debate interrupted.