Hon STEVEN JOYCE (Acting Minister of Finance) : I move, That the Appropriation (2010/11 Financial Review) Bill be now read a second time.

Hon PAULA BENNETT (Minister for Social Development) : I move, That the Social Security (Youth Support and Work Focus) Amendment Bill be now read a first time. At the appropriate time I will be moving that the bill is referred to the Social Services Committee, that the committee reports back to the House finally on or before 31 May 2012, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions, and during an evening on a sitting day, and on a Friday in a sitting week, and to meet outside the Wellington region when the House is sitting, despite Standing Orders 187, 188, 190, and 191(1)(b) and (c).

The welfare system is failing many New Zealanders. It has created a cycle of dependency for many, and 13 percent of working-age New Zealanders are on benefits, directly affecting more than 220,000 children. The system, I say, is failing them. It is out of step with today’s needs, because times have changed. Today we have teenagers on welfare—teenagers—who are given a weekly sum of money, and then just left to get on with it. Many of these teenagers are parents. It is an abdication of responsibility to simply leave them to fend for themselves and their babies. We have sole parents trapped in welfare with little support, and, quite frankly, little hope. We have women consigned to a life of welfare, because over 30 years ago society said women could not support themselves without a man.

This Government is bringing the system out of the dark ages and into the light of modern-day New Zealand. We started the Future Focus changes in 2010, which proved the benefits of moving from a passive to an active approach. We are continuing with reforms, because we owe it to New Zealanders. We will provide more support, and we will expect more too. It is a fair balance, and it is about time. Young people on benefits are our most vulnerable citizens, because more than half of those who first go on to a benefit at 16 or 17 years old will spend at least 5 of the next 10 years on a benefit. The lifetime costs of paying these young people a benefit are higher than for any other group. The social cost, of course, can be devastating. More than a third of those on the DPB became parents as teenagers, and almost half of all of those on the DPB have no formal school qualifications. The long-term consequences are obvious.

But we can make a difference. The measures we are introducing will reduce the risk of long-term benefit dependency for teenagers. They are designed to balance support and obligations in a way that will improve outcomes for young people. I will be frank: we want to make welfare a less attractive proposition for many young people. We will not continue to dish out money to young people and teen parents, and just hope that they will be OK. Instead, with the youth payment for 16 and 17-year-olds, and the young parent payment for 16, 17, and 18-year-old teen parents, we will help them manage their money into their being less dependent. A youth service provider will be attached to each young person and will help them to set up redirections, so their rent and utilities are paid. After bills are paid, the provider will help them budget an amount to go on their payment card to be used for food and living essentials, with the remainder paid as a cash allowance. The payment card will work in supermarkets, much like it does at the moment for those who get hardship assistance. The money goes on that so they can go into supermarkets.

In return for this financial support, young people will have clear obligations to be in education, training, or work-based learning. The idea is that we are moving them to being less dependent on the welfare system. For some young people, they will need a lot of help first up, and they will actually have more restrictions and have a youth provider working very closely with them. With others, you can see them being further down the line, needing less of that kind of control, and able to move themselves quicker.

There are three different incentive payments. They can earn an extra $10 a week for meeting certain obligations. A 16 or 17-year-old receiving the youth payment could earn up to $20 a week by completing a budgeting programme and remaining committed to education or training. I think it is a really positive thing that for once we are incentivising the kinds of behaviours we want, instead of actually sanctioning young people like we so often do through the system. There will be incentives and obligations for teen parents too. We will no longer just assume that teenagers who are sole parents on welfare know how to look after their children without support around them. These are very young people bringing up babies, and, quite frankly, both can be vulnerable a lot of the time. These young parents will have to enrol their children with a primary health care provider and complete Tāmariki Ora Well Child checks. As an extra incentive, someone on a young parent payment could earn an extra $10 a week by completing a parenting programme, and, of course, as with the other youth payment, they can also earn extra by doing budgeting and by staying in education for a sustained period of time. It makes sense to provide these incentives to reward positive behaviour, particularly when it is just so beneficial—not just to that youth but also, for those who are parents, to their children as well. But failure to meet obligations means those incentives could be removed, as well as their cash allowance.

Education, training, and having these young people in learning are absolutely crucial. I think the key to this part of the reforms being successful is going to be the relationship with the service provider, with the contracting model that we have in place for where we put the incentives, so they are actually reaching milestones themselves, so that we can see these young people actually moving ahead, and not being in the same place that they are now in 5 or 10 years’ time, which is what we see at the moment. We recognise that for teen parents to resume or continue their education or training, childcare is vital. A guaranteed childcare assistance payment for children under 5 will remove what can be a barrier for many. A key component to the changes for young people will be the way that we really engage them. That guaranteed childcare assistance payment will be vital to seeing them move on.

Then, that wraparound support is for more than just those young people who are on benefit. It is also available to those disengaged 16 and 17-year-olds who are leaving school early. We know there have been anywhere up to 13,500 or 14,000 young people falling out of school, and not going into work or training. This Government cares enough to change the law so that Government departments can keep track of these young people, and we can help them. We hear repeatedly from organisations out there that are working or want to work with these young people that they are too hard to find. Those few months from their dropping out of school and actually being picked up by a provider on the street can be absolutely vital, so insisting that schools report in real time where those young people are will make a huge, huge difference.

Another point that has not been picked up as these reforms are being talked about is that they will extend this support to 16 and 17-year-olds and 18-year-olds with children who are the spouse or partner of an older beneficiary. We often forget them. These young people are also vulnerable at times, and not seen as individuals but actually seen just as the partner, and they can miss out on the sort of support that we think they need.

Sole parents have been let down, and we need to look at the changes that we make around them. Yes, there will be changes to the age when they are part-time work tested. That work test is at 15 hours a week, but will have some flexibility around it. The reason we are putting flexibility in is that someone who is working 12 or 13 hours a week at the moment would still be work tested. That does not make sense. Let us put a bit of flexibility around that for the numbers of hours that they work, so that it works more for them and works better for them as individuals.

There has been some talk around subsequent children, and, yes, there are certainly changes there. We are looking at those who have a baby while on a benefit. The work test will go to those when the child with whom they went on to a benefit turns 5. In the work test they will be work exempt for a year, and then after that the work test goes to the child whom they came on to a benefit with. So if they come on to a benefit with a 2-year-old, they have another one in that year, and the child that they came on to a benefit with is only 3, they will not be work tested until that child is 5 years old. But there are changes there, as well.

We are making changes to the widows benefit and women alone benefit. They are available only to women, and not to men, obviously. There is no work availability expectation, and, quite frankly, it is a very outdated concept and one that needs to change, so that will be changed in line with these reforms. I believe that is reasonable and exactly what is needed.

The fiscal costs of welfare are a serious problem, as is the waste of human potential associated with long-term benefit dependency. We can make a difference. These reforms are vital. I commend this bill to the House.

GRANT ROBERTSON (Deputy Leader—Labour) : Is it not interesting that the Minister for Social Development began her speech by telling us that the welfare system is failing New Zealanders. Well, I would suggest to the Minister that what is failing New Zealanders is a Government that has not even got an economic plan to grow jobs in this country. That is what is failing New Zealanders. The culture of blame that underlies everything that the Minister is doing in this area means the Government is failing to take responsibility for actually creating the jobs, for actually being part of growing the economy. Instead, it is much, much easier for this Minister and this Government to find small groups of people in society to blame. That is the best this Government can do when it comes to a welfare policy—find people to blame.

Ms Bennett said she wants to make welfare less attractive. I will tell you what will make welfare less attractive: jobs. That is what will make welfare less attractive—that people actually have jobs they can go into. The whole premise of this piece of legislation, the Social Security (Youth Support and Work Focus) Amendment Bill, is to find people to blame—to couch it in a culture of dependency, rather than couching it in a culture of a Government prepared to invest in New Zealanders and invest in their future.

New Zealanders want to work. There will always be one or two people in our society who will shirk their responsibilities. That is wrong, that is unacceptable, and the Ministry of Social Development needs to work with those people to make sure they do not shirk their responsibilities. But let us not kid ourselves that that is the majority of people. Let us not kid ourselves that New Zealanders do not want to work. People want to work. The job opportunities are simply not there, and it gets harder and harder every day. When university graduates are taking between 6 months and a year to get a job, no wonder it is hard for people who have been on benefits and who have not got qualifications to get a job. But this piece of legislation just says blame. It does not say invest, it does not say support, it does not say train, and it does not say create work opportunities. It says blame, and that is simply not good enough.

The biggest problem we have in New Zealand is that we are not creating enough jobs for our young people, and we are not creating enough training opportunities for people to develop their skills. One consequence of this bill is, effectively, the end of Youth Transition Services. Youth Transition Services has been extremely successful in supporting young New Zealanders who are struggling to find work into work opportunities. Many members of this House will have visited Youth Transition Services’ offices. There is a very successful one in Gisborne. It helped 500 people last year. Under this bill only 38 of those people will qualify for assistance. Five hundred people were assisted under Youth Transition Services. Ms Bennett comes along with her proposal and only 38 of those 500 people will still be supported. This bill is letting down young New Zealanders. It is not supporting young New Zealanders into work, and work should be the first focus. The availability of work should be the first focus, not a political dog-whistle, not an exercise in blame towards our young New Zealanders.

It is interesting that in the justification for this legislation we hear that the Government believes that there will be savings in the order of $1 billion over 4 years—savings of $1 billion. Well, it came out in the select committee process that that is, in fact, a guess. The Government is quite fond of guessing when it comes to its economic proposals. We had that with the sale of State assets, where Bill English decided to guess. But that is simply a guess.

There is an extraordinary statement in the regulatory impact statement on this bill. Once upon a time regulatory impact statements were attached to legislation. In this one, after the Government suggests that there will be savings of around $1 billion, it goes on to say that Treasury and the Ministry of Social Development have isolated the impact of the policy changes that are in this particular piece of legislation. As it goes on to describe what the impact of the changes in this legislation will be, there is a sentence withheld. I think that is possibly the first time I have ever seen a regulatory impact statement—the statement provided to this House to allow us to debate a piece of legislation properly—with a sentence withheld in it. That is extraordinary. It means that the Minister and the Government do not want us to know what the actual projections of the impacts of this bill are. I regard that as a major issue for this House. The fact is that the regulatory impact statement, which we as Opposition members rely upon to tell us about the impact of the Government’s legislative programme, has a sentence withheld in it about how much money the Government thinks it is going to save. No wonder the officials at the select committee did not want to talk about it. They did not want to confirm what the so-called savings would be, because now the Government is withholding the information. I think that is unacceptable. It means that we go into debating this legislation unaware of what the Government actually thinks the impacts of these changes will be, and I do not think it should be proceeding with them with that kind of situation taking place.

When we look at the issue of the changes around those on the domestic purposes benefit, we need to be absolutely clear about whether the Government is focusing on the correct problem here. Between January 2009 and January 2012 the number of people on the DPB rose by 13 percent, but between January 2009 and January 2012 the number of people on the unemployment benefit rose by 82 percent. So are we really addressing the biggest problem in terms of people who are relying on welfare today by doing what the Government is doing? If we were focusing on jobs, if we were focusing on legislation that was providing training opportunities for people who were on benefits, then perhaps we would be addressing that 82 percent increase in the number of people on the unemployment benefit. But instead what we have from the Minister is more of the culture of blame, the culture of so-called long-term welfare dependency, when many of those people would just like to find a job. They would just like to find a job.

The other element that always confuses me about these kinds of proposals—particularly the changes around the age someone’s children are when that person is asked to go out and work—is what are the costs involved in finding some of these mythical jobs that happily exist in the middle of the day, between 9 and 3. How much do we actually know about those sorts of jobs out there, and how much do we know about the cost and accessibility of childcare? We know that in many cases getting to and from these jobs and the cost of childcare will actually make it worthless to be in those jobs. What is the point of that? What is the point of putting that much pressure and stress upon young families by doing that, by putting on those obligations? Yes, let us make sure that where people can work, they will. But let us not put obligations on them that are impossible to deliver and that actually end up putting them in a worse economic situation.

The Labour Party is opposing this bill. We are opposing this bill, because it does nothing to actually create job opportunities. It focuses on the wrong issues. It, in fact, does not support childcare costs, and it does not support the kinds of training opportunities that we want New Zealanders to have.

Hon Paula Bennett: Read the bill.

GRANT ROBERTSON: Well, the Minister chips in, but once again we have the issue that this Government cut the training incentive allowance for people to get qualifications that are beyond the basic qualifications. It cut that allowance, and, therefore, said to those people: “We don’t want you to go on and succeed. We don’t want you to actually go and be part of the workforce in the future. We’re going to limit your opportunities.”

There needs to be far greater investment in training for people on benefits—far greater. There needs to be far greater investment in training generally, because at the moment we know that over 48 percent of people on the DPB have no formal educational qualifications. Every member of this House knows that if we invest in people in their training, in their skills, they will make a greater contribution to New Zealand. We know that if we invest in helping to create jobs, we will provide the economic environment in which all New Zealanders will flourish.

This piece of legislation is nothing more than a political dog-whistle. It is not going to help New Zealanders get into work. It is not going to ensure that the future of New Zealand is offering itself up to be the future of New Zealand, to have the potential of New Zealanders realised. This bill is not addressing the issues that New Zealanders want addressed. It needs to focus on jobs, it needs to focus on training, it needs to focus on skills, and it needs to support New Zealanders, not blame them.

Hon CHESTER BORROWS (Associate Minister of Social Development) : This Social Security (Youth Support and Work Focus) Amendment Bill is part of a step change in the way we do social welfare in this country. No longer will we just give people a handout and then leave them to fend for themselves as the previous Government did. Instead, this Government wants welfare to be an active and focused system—a system that supports people towards making better choices, and a system that lifts them out of dependency rather than trapping them in it. New Zealand has one of the most comprehensive welfare systems in the world, but, in spite of the good intentions of its architects, it no longer works in the way that they thought it would. All too often it traps people on a low income into a life of poverty, and right now around 330,000 working-age people receive benefits—that is about 12 percent of our entire working-age population. Times have been difficult lately, but even back in 2007, following years of good economic times, we still had 270,000 beneficiaries, and that was as good as it got. Welfare costs $8 billion a year to the New Zealand taxpayer; the lifetime costs are much, much higher; and New Zealand cannot afford to have one in eight working-age people on a benefit, or over 220,000 children growing up in benefit-dependent homes, not to mention the accompanying social costs: poverty, crime, illness, child abuse and neglect, underachievement, poor health, and lost opportunities.

That is why National campaigned on making some big changes to the way we think about welfare. That is one of the reasons New Zealanders returned a John Key - led Government with one of the largest single-party results in recent history. The changes in this bill will help people get off welfare and into work, and that means a better life for New Zealand families and better opportunities for their children. The current system hands out benefits and leaves two-thirds of beneficiaries to their own devices. Most are not expected to work, even if work is offered to them. There is little focus on personal responsibility or independence. Our system, founded in the 1930s, is based on an old-fashioned assumption about who can and cannot earn a living, especially when it comes to sole parents, widows, and single women.

I was pleased to hear the previous speaker, the deputy leader of Labour, say that if you can work, you should work. He agrees with us. He agrees with us, because that is exactly the point of this legislation: you must be work-ready. You must be able to present yourself for work, and if there is a job that you can do for some of the time, you should go and do it. Well, welcome to National Party philosophy, Grant Robertson! Society has changed, and attitudes are different, and, given that speech, they are certainly different on that side of the House.

This Government will not accept a system that writes off tens of thousands of New Zealanders like this. The success of our Future Focus reforms proves that a more active approach to welfare results in more people with jobs. Year 1 of Future Focus resulted in 13,000 people going off the domestic purposes benefit and into work, and that is a 16 percent increase. This bill builds on those successes that place a much stronger focus on work for sole parents with school-age children, and it also values the capacity of widows and single women to work. Our welfare system will always be there to support those in genuine need, but in the main we expect that more people will be available and looking for work, and we will be actively supporting people to do that with work preparation activities, training, budgeting, and parenting programmes.

We are targeting our resources. The current system does not step in early enough with support and resources to help those most at risk of becoming long-term beneficiaries. It channels the vast majority of resources into the people who are likely to be on a short-term benefit like the unemployment benefit. Not any more. Employment and training services in support will be more flexible with an investment approach that focuses more resources up front where the returns are the greatest. That means we will be focusing resources on people who, without the right support, are most likely to remain on welfare for a long time. We are helping young people because we care enough to intervene in their lives and give them a hand exactly when they need it, and to place a budget mentor alongside of them, teaching them how to spend their money and how to direct the funds that come their way. That is why this bill targets the young people on a collision course with long-life welfare dependence. It is vital that we intervene early and help young people at risk. The younger that young people join the welfare system, the more likely they are to remain there as they move on into adulthood. That is going to change. The changes in the bill will give young people at risk the hands-on support they need to move from school into work or further training.

This Government is determined to deliver a brighter future for all New Zealanders, and we are so pleased that the leader of the Labour Party agrees with us in achieving that brighter future for all New Zealanders—that means, helping those who are in need. More important, it means helping those Kiwis who help themselves. This Government is standing alongside those New Zealanders, not standing by as they fall through the cracks, as the Labour did when it was in Government. That is what this bill is about. I am proud to commend it to the House.

Dr RAJEN PRASAD (Labour) : I also am pleased to take a call on the Social Security (Youth Support and Work Focus) Amendment Bill. I say as strongly as one possibly can that Labour will be opposing this bill because it is a bad bill. It starts on the wrong principles and ends up in the wrong place.

The member who just took his seat, Chester Borrows, works the trick again that National Governments have worked for a long time: link beneficiaries with poverty, with abuse, and with crime, and then create the space to do whatever you want to do, whatever the members want to do, whatever the Government wants to do. But there are members in this House who have been beneficiaries. They have taken the largesse of the State, have used it appropriately, have brought up children properly, and have moved on. That is the purpose of the benefit system. But the last speaker did not acknowledge that. The Minister for Social Development herself does not acknowledge that.

I remember when the National Minister Ruth Richardson tried something similar about beneficiaries with children being given, in a sense, negative treatment. That did not survive; that Government was kicked out. I remember when the Hon Jenny Shipley came up with a social responsibility bill. Where did it go? Nowhere. Our society turned against those approaches, and it will turn against this approach as well, because it is a negative approach.

It is very interesting that members opposite talked about the nanny State when this side was in Government. If this is not nanny State, I wonder what is. This Government is going to tell young people how to manage their life and how to spend their money, but where is the training? The Government wants to talk about parenting, yet it will not give parents the opportunity to parent. I will return to those in a minute.

In a sense, the question I ask fundamentally is this: where is this Government’s detailed plan for welfare reform? We have not seen it. It is coming through in pieces. Why does the Government not do the decent thing, if it is absolutely intellectually honest about trying to create a better, more effective system? Because it is not. If it was intellectually honest, it would bring the whole plan, it would put it together, it would bring the bills to the House, we would debate that, we might even support some of that, and the select committee could do its work. No, what it is doing is really itching the sores that are in society. It is itching those prejudices that exist in society for its own political advantage. This is not designed to make the lives of our beneficiaries any better. If it was, I would be the first to support it. This is not. This is designed to be punitive. There is no comprehensive plan. This approach is just another one of those piecemeal approaches, which go just so far as to give the sense to the public out there that the Government is doing a lot.

Let us look at the technique. The technique is that the Prime Minister comes out—and the Minister did it again in her introductory speech—and says that 328,000 are receiving a benefit, which is around 12 percent of the entire workforce. The Government creates this image that there is a huge group out there and the Government is now ready to address it. What does it pick on? It picks on domestic purposes beneficiaries—mums who are doing, by and large, a great job. And what percentage is that? Four percent—four percent. So what happened to the rest? What will the Government do about the rest? There is no plan about that. Nothing changes but subtly Government members do their darnedest to create this sense of fear and concern in our society.

How did the Government get here? The Government got here by creating this myth of dependence—this myth of dependence. I do not hear members from that side talk about the dependence of businesses on the largesse of the State. Are they dependent, and is it therefore negative? No, they are all right, because they are somehow great! Of course, I am not impugning businesses, but they are dependent as well. That is good dependence. But if a beneficiary bringing up children—

Tim Macindoe: How are you making that link?

Dr RAJEN PRASAD: Mr Macindoe, they are bringing up children to the best of their ability, like that Minister did. That Minister brought up her daughter with a benefit and did well, and good on her. I knew her then, and good on her. That is what these parents are doing. But here we are creating this notion of welfare dependency in the most negative way possible, and then using that as the whipping boy, whipping any beneficiary with that, and almost disregarding that many of them are doing a great job under very, very trying conditions. Yet the Government is not doing the very thing it ought to do.

Members opposite asked about what Labour did when it was in Government. Well, let me tell members opposite, and I hope they are listening, it was the Labour Government that introduced under Work and Income the most intensive triaging programme imaginable for anybody who walked in through the front door of Work and Income. They were triaged right at the beginning—so much so that they got jobs, and unemployment was the lowest in the world. It was under 4 percent. That is what happened. That is what the Labour Government did, because it believed that the best way out of poverty, the best way out of this, is through work. But you cannot do it by creating an image that there is work out there, because this Government has not created work. In fact, it is going to put thousands more into this programme of work testing, and they will have nowhere to go. They will probably have people with a lot of CVs but nowhere to go. That is unfair. That is leading people up a garden path, and that betrays the lack of interest that this Government really has in the lives and outcomes of beneficiaries in this country. This is what this bill is trying to do. It is a punitive approach. It is a negative approach.

Why does the Government not realise that this is mean-spirited? This is really mean-spirited. These are the families that produce the workers that partner capital to produce and enhance this country’s social development. They have always done so. I do not believe there ought to be a big divide between workers and capital. There ought to be a synergy amongst them. Our families produce the workers. They work day and night to bring these children into the world and give them the best start possible, sometimes on their own and sometimes with some assistance. For the period those children are growing up, that is the best investment the State can make. Yet the Government here is discounting that.

If it believed in that, it would design the most effective system possible, but the Government is devoid of ideas on how to design an effective, comprehensive system with solutions for contemporary social issues and problems—the very issues the Government members articulate. But they do not show any passion, any smarts, to actually design 21st century ideas. They use those words, they talk about backing these people, but they go nowhere. There is so much that is wrong about this bill.

I want to focus on parenting for the last 2 minutes of my speech. Why is the Government trying to make it so difficult for sole parents trying to bring up their children? Parenting is difficult. The Government ought to be supporting them, but the Government is trying to create a punitive system, and in the same way it does not understand the needs of youth. Why are we not training our youth to use the money that they are given? No, the Government is going to create a nasty system whereby people are watching them and telling them what they can spend. Why is that not nanny State? I am asking the Minister, and I am asking Mr Macindoe, who will speak next for National. Why is that not nanny State? Members on that side pilloried us when we were designing this system, and said it was nanny State.

The Government has no ideas for job creation, but it thinks the jobs will be there. I predict that there will be a treadmill that will make many of our young people turn against this Government and turn against the State, and that will create more problems. There will be a treadmill of people coming in, finding themselves in a situation where they are going through the system in this really negative way, and really beginning to doubt themselves, their ability to bring up their children, and the very State they desire to be a part of.

The perverse effects of this programme are going to be felt long term. This is discounting a generation. It does not put any value on our families, and it does not value our youth, yet it is couched in the language of valuing our parenting and valuing our youth. This is about cuts. This is about reduction. This is about trying to pay for those tax cuts.

Tim Macindoe: This is about hope.

Dr RAJEN PRASAD: They are selling our State assets to do it. Why is there one line missing, Mr Macindoe? Answer that question—why is the one line missing from the regulatory impact statement? That is holding this House in contempt. That is not telling us as legislators the whole truth. This is an awful bill, and I look forward to debating it throughout the Social Services Committee. Thank you.

HOLLY WALKER (Green) : I am a new member of this House. I am new enough to remember why I got into politics and whom I am here to represent. When I decided to stand for Parliament I said I wanted to defend our welfare and education systems, which served me so well as a child, to ensure that they continue to provide every child in New Zealand with the essentials at the start of their lives so that they can grow up and have the same opportunities I did. So it is with some sadness that I find I have to stand and defend the welfare system from attack so soon after entering this House. But I am also very proud to do so. I am proud to defend our welfare system from this cynical attack, and I am proud to represent the parents, the young people, and the children who will suffer if we allow the Social Security (Youth Support and Work Focus) Amendment Bill to pass.

Despite the title, this bill is not about work focus. It does not create any new jobs or any new training opportunities. It is not about youth support. It does not help young people to take responsibility for their lives and their finances, or support them into employment. It is about dismantling the social safety net and casting vulnerable New Zealanders loose for the sake of a few votes, and it is reprehensible.

New Zealand needs jobs and training for everyone, not beneficiary bashing. Making life harder for people on benefits will not magically create jobs for them to move into. The welfare reforms in this bill will increase inequality and they will make life harder for everybody. They will compound the challenges faced by unemployed and disengaged young people, and they will undermine the ability of parents to take good care of their children. The Green Party cannot support this bill.

The Government seems to believe that if you make life tough enough for beneficiaries, if you introduce enough work tests, and if you threaten them with enough sanctions, jobs will magically appear for them to move into. Government members know it does not work like that. Their own officials have told them so, but it is the only response from a Government that seems to have zero commitment to real job creation. It seems to be the only response it can come up with.

It is actually possible to help people move off benefits and into work. Most people on benefits would cry out for the opportunity to do so, because, as many members of this House will know, trying to make ends meet on a benefit is almost impossible. But the best way to help people off benefits and into work is to invest in job creation. We know this in the Green Party; that is why before the election we proposed a job package that would have created 100,000 sustainable new jobs for New Zealanders, including many that would be appropriate for currently unemployed and young people. But the Government’s package does not create any jobs. What it will create is misery and hardship for those who are already doing it tough. I say to this Government that if you are serious about helping people move off welfare and into work, then invest in skills, training, and job creation. The Green Party will support you. But do not talk about helping young people move off welfare and into work when what you really mean is that you are forcing people off welfare and into oblivion. It might make the benefit statistics look better but it will create poverty, inequality, and desperation, and it will cost us all in the long run.

I want to focus on the impact that this bill will have on sole parents and their children. This Government seems to have forgotten something that every single parent in New Zealand knows—in fact, not every single parent, but every parent. Parenting is work. It is one of the most important jobs that there is, and if we can support parents to give their children the best start in life, we can save the country billions of dollars in future welfare, health, education, and justice spending. The changes proposed in this bill will undermine the ability of parents to take good care of their children by taking parents away from their children at key stages of their development. Perhaps even worse than that, the changes will entrench poverty for many children by sanctioning their parents.

Children have the same needs—the same needs—for food, clothing, a warm, dry house, and a secure attachment to a loving caregiver, no matter what the income status of their parents, and whether their parents are in work or not. I challenge the Minister for Social Development to explain how it is fair to punish innocent children by cutting their parents’ benefits because they cannot meet work-testing requirements. It is an inhumane and uncaring approach that undermines all the Minister’s high rhetoric about improving the situation for vulnerable children. These changes will create vulnerable children and create the conditions of poverty, financial stress, and insecurity in which child abuse and neglect are rife. So I say shame on Paula Bennett for presiding over the Green Paper for Vulnerable Children on the one hand, and introducing this bill, which will create more vulnerable children, on the other.

Sole parents want to work, and there are ways to support them to do that when they are ready. This starts with respecting those parents and respecting the fact that they almost always know what is in the best interests of their family. They are better placed than any of us in here to make a decision about when they are ready to re-enter the workforce. So it is about being flexible, creative, and supportive in helping parents find appropriate part-time work that suits their needs and the needs of their children. It is about encouraging employers to make this kind of work available.

It is also about recognising that it is not necessarily better for parents or their children for them to move off welfare and into a minimum wage job. Supporting sole parents into higher education and training is one of the most effective ways to reduce the amount of time they spend on a benefit and to increase the amount they earn when they move off it. But in the face of this evidence, the Government has cut access to the training incentive allowance for degree-level courses. The Green Party would help parents to move off benefits and into work, but we would do that by reinstating the training incentive allowance for degree-level courses and extending it to sickness beneficiaries and invalids beneficiaries.

We need a welfare system that recognises that caregiving and parenting are important and supports and empowers parents to move into work when their children are ready. Many children born into two-parent families get all the benefits associated with having a secure attachment to a full-time caregiver in the early years of their life, including being breastfed past the age of 1. We know how important these things are to child development. It is well documented, so why would we deny that start in life to a child born into a sole parent family? The message that this sends is that the child of a sole parent family is not as important as a child born into a two-parent family. That is a message that starts the moment the child is born. If this bill passes, that message will be compounded at every turn until that child itself is an unemployed and disengaged young person facing a future of insecurity. This Government talks about breaking the cycle of benefit dependence. If that is what it really wants to do, then it should not enact this flawed and uncaring bill.

This bill is also about young people. We have a massive youth unemployment problem in New Zealand, but this bill does nothing to support young people into education or employment. Young people need jobs, and this bill does not provide them. They need skills and training opportunities, and this bill does not offer those either. What it does is punish young people, especially young parents, for the tough situations they find themselves in.

The National Party purports to stand for personal responsibility, but in the provisions of this bill that relate to young people it does the complete opposite. How does income management by Work and Income or private sector providers teach young beneficiaries personal responsibility in relation to their income? It does the exact opposite: it makes them more, rather than less, dependent in terms of the way that they manage their lives. It will foster resentment and disengagement amongst those young people, and it will not help them to become independent and resilient.

The involvement of the private sector in the provision of services to young beneficiaries is also deeply disturbing. This approach has been tried in the United Kingdom and it has failed spectacularly. We should learn from these mistakes, not replicate them. In the UK we have seen similar private sector involvement in welfare as is proposed by this bill lead to the displacement of paid workers and to existing staff losing the opportunity for overtime. We have seen the exploitative use of beneficiaries as free labour, and we have seen Government funding being claimed fraudulently by private providers.

If this Government is serious about helping people off welfare and into work, it is clear what it needs to do, and it is not what is in this bill. The Government should go back to the drawing board, read the submissions to the Welfare Working Group, which it ignored, read the report of the Alternative Welfare Working Group, and come up with a set of reforms that puts children’s well-being at the heart of the welfare system. Putting children first, guaranteeing that their needs are met no matter what their family income status is, supporting their parents to develop secure attachment with their children in the early years, supporting their parents into education and training, developing young people’s potential and supporting their independence, and creating sustainable, flexible jobs that pay a living wage is how you break the cycle of benefit dependence.

TIM MACINDOE (National—Hamilton West) : This Government is definitely serious about this issue, and nothing in the contributions of the two previous speakers, Dr Rajen Prasad and Holly Walker, has indicated that the Opposition members have learnt anything from the experiences of at least the previous generation. Nothing in the contributions of the two previous speakers has offered any hope to any New Zealander trapped in the cycle of welfare dependency. It is not good enough. I ask those speakers to take their blinkers off, to look at the reality of the issue that we face today, to look at the reasons why we have this problem, and to support this Government in our determination to do something about it.

The Social Security (Youth Support and Work Focus) Amendment Bill, which has been introduced into the House this afternoon, is not only one of the most important measures that members of the 50th Parliament will face over this 3-year period but is, in fact, one of the most significant and demanding challenges that this generation of members of Parliament will face in our lifetime. I am proud to be here to tackle the challenge, and I am absolutely determined to ensure that we make a significant difference in improving it. I sincerely hope that this bill will be enacted. The bill is not about cynicism, blame, or beneficiary bashing, as the two previous speakers have told us. This bill is about hope. It is about aspiration. It is about a conviction that every New Zealander has a right to fulfil their potential.

The parents and grandparents of this country want the best of opportunities and security for their children and grandchildren—their mokopuna. I say to the previous Green speaker that nobody has anything to fear from work-test obligations. Many have everything to fear from a Government that expects nothing of them. The teachers of our country want to see their pupils well prepared to cope in the modern workforce; successful and confident that honest employment will be available to them and fairly rewarded when their schooldays are over. And those young people themselves need, and deserve, to know that our society believes in them, wants the best for them, and will not abandon them before they have had a chance to fulfil the considerable potential that we know they have.

I care passionately about this issue, and I am 100 percent in support of this bill. I commend the Hon Paula Bennett for her vision and determination in tackling this issue head-on and in bringing this legislation before the House. I am proud to stand shoulder to shoulder with her as we commence this work. I do so because for too long we have, as a country, sat on our hands and watched as intergenerational welfare dependency has robbed our young people of aspiration, while robbing many of those who care for them of hope and direction. For far too long, as the Minister said at the outset of this debate, our welfare system has been failing far too many New Zealanders. The Future Focus programme has already demonstrated not just the benefits of, but the essential need for, refocusing our welfare system on an active, rather than a passive, approach. The Future Focus programme has shown that targeted intervention and the imposition of work obligations make a very positive difference.

The Labour and Green Opposition speakers whom we have heard from so far this afternoon have shied away from this reality. Sadly, and predictably, they have resorted to their ideologically blinkered spin—that this bill is about beneficiary bashing and blame.

Dr Rajen Prasad: If the cap fits, wear it.

TIM MACINDOE: That, Dr Prasad, is nonsense, and I would like to think that you know it is.

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

TIM MACINDOE: I beg your pardon, Mr Assistant Speaker. I would like to think that deep down Dr Prasad and the other speakers know that it is nonsense, but, unfortunately, they cannot bring themselves to admit that the worst examples of beneficiary bashing are those that occur where young people without qualifications are thrown on the scrap heap and left to slide into a lifetime of welfare dependency. I am absolutely confident that if Michael Joseph Savage were alive and here today, he would be 100 percent in support of this bill, and that all those who were the architects of the welfare State would say that this was never how it was meant to become. It was never about trapping people. It was always about providing them with assistance.

I return to my main point: this is a bill of vital importance to all of our society. We must not settle for the status quo any longer, if we are serious about creating a brighter future for every New Zealander. I say to the Minister “Thank you for the work you have done.” As a member of the Social Services Committee, I look forward to working on this bill, but, more important, I look forward to overcoming a problem that dogs our country.

BARBARA STEWART (NZ First) : On behalf of New Zealand First and Asenati Lole-Taylor, I rise to speak to the Social Security (Youth Support and Work Focus) Amendment Bill. We have heard this afternoon from the Government speakers that the purpose of this bill is to transform the benefit system into one that is modern, active, and work focused. That sounds really well and good. We could agree with that, if the economy was moving along. It would be perfectly acceptable, but in New Zealand First we have one question. Where are the jobs? The biggest incentive of all for training is a job. That is what people want. Unfortunately, the brighter future that we have all been promised has not eventuated. We need far more than the hope and aspiration that the previous speaker, Tim Macindoe, was talking about. We do want the best for our young people and our people, but we want jobs—real jobs—out there.

As the YouTube video states—there is a YouTube clip—“We don’t want your ghost jobs, John. We want real jobs.” As a result, many of our young people are heading across the Tasman because they want to work. They see a brighter future over in Australia, not here in New Zealand. Since National came to power in 2008, unemployment has absolutely soared. The National Employment Indicator published by Statistics New Zealand suggests that there are almost 40,000 fewer jobs since December 2008. This has been in spite of the vaunted Job Summit and Mr Key’s bold prediction of 171,000 new jobs.

Even Treasury does not agree with these figures. They have provided a job forecast of 1.6 percent per annum over the next 3 years. We do not know whether these are full-time jobs or part-time jobs. We know that many people are not counted in the job seeker statistics because they are married, they are working part-time, and we have got a whole group of young people who are moving from one short-term job to another. They want to work full-time but they cannot; there are no full-time jobs. We want them to have career jobs, but does this legislation look as if it is going to promise that? Unfortunately, no. The Government basically sold its voters the belief that the economic forecast was based on a whole lot of optimism around jobs, but the reality is that there is not. It is such a shame.

The cycleway alone—and I know a lot of people hung their hats on that cycleway—was supposed to create 4,000 jobs, at least. In fact, it created 70, and they were just very localised. I know that in my community five people were employed for a very short period of time. That is only five—far short of the 4,000. What did we have? We had a bobcat driver, we had a concrete truck driver and his assistant—so there is three—and we had two women to direct the traffic, one at each end saying “Stop” and “Go”. It was definitely not a career-type opportunity for a young person. It is not enough to keep them here in New Zealand for a long period of time; it is only another short-term job. In New Zealand First we believe that the benefit system should actively help and promote paid work and independence, but have we really overlooked the barriers to finding real full-time work? I think that this legislation has.

There need to be full-time jobs. The concept of a Government passing legislation to declare that beneficiaries should be work-ready is just totally ludicrous. It is offensive to those who are genuinely trying hard to find themselves full-time work. It is a hard economic time, but there are a lot of people out there looking, but there is nothing to look for. There is no lack of will to work. New Zealanders have always been keen to work, but there is simply not enough work available for men and women of all age groups. Young people especially are affected. The number of 15 to 24-year-olds out of work and training is enough to fill Ericsson Stadium to full capacity and still not have enough room for them all. Trying to shame them into work, like this bill is doing, just is not the answer. The jobs are not available. Employers are extremely choosy, and the bottom line is that they are not willing to try people out if they have not got the right experience, the right qualifications, or even if they do not know the right people, and that is the crux of the matter.

It also means that employers are taking advantage of our young people—particularly young employees—so I am waiting to see Minister Wilkinson’s bill come back into the House, because the scarcity of jobs means that employers are tough. I know of one multinational employer right in my home town who will not allow their employees to have annual leave, who will not let them have work breaks, and who lets them work unreasonable hours. It is just ludicrous. These young people work all of those hours because they want a job. A poor job like that is far better than no job.

If the Government is really serious about addressing unemployment, then it needs to propose a whole new way forward. New Zealand First said that it would support good legislation, and we intend on being very true to our word, but this is not good legislation. It would be better suited to Victorian England than 21st century New Zealand. Although there are a few measures in this bill that might go a small way to addressing some of the problems the Minister highlighted, it fails to address the root causes of welfare dependency. Our welfare system is not so much an ambulance at the bottom of the cliff at this point in time, it is more of a case of kicking somebody when they are down.

We all agree that the benefit system should actively help and promote paid work and independence, but we do need jobs. The Government believed that jobs would be available, and it is now predicting only job losses. So we can only infer that this bill is based on extreme optimism, which is far different from reality.

Finally, New Zealand First has got some very serious reservations about this increase in the use of the private sector in finding jobs. The goal is to pay private companies or organisations for every person they get off welfare. It sounds really good in principle, but we want to know what audits or safeguards are in place to ensure that these private providers actually assist young people into employment. We know about the case of A4e in the UK, and that should serve as a warning to the Government. If these sorts of schemes have resulted in systemic fraud abroad, we should be very wary about adopting them here.

The other area that we have got concerns about is women alone in the 50-plus age group. Where are the jobs for this particular group? They are not there. It is hard enough for our young people to find jobs, let alone a woman or any person over the age of 50. It is just a joke. There needs to be a lot of work done in the select committee for us to consider that this bill would be acceptable to New Zealand First. Smoke and mirrors around benefit figures and training does not mean that real jobs are available for the groups that are actually targeted by this legislation. So New Zealand First does not support this legislation at this stage. We will be looking very closely at it when it comes back into the House.

ALFRED NGARO (National) : I stand in support of the Social Security (Youth Support and Work Focus) Amendment Bill. I hear much of the talk from my colleagues next door who talk about the fact that we should be blamed and we should be shamed for the things that we are doing. I find it ironic that the very party that talks about a plan is in review at the moment. In fact, if you look on its website it is asking questions. It does not have a plan; it is not sure. Why? It is because the things that it said before have not worked, so it has become a one-trick pony—a one-trick pony—where it keeps saying the same things over and over and over again. If anyone should be blamed, if anyone should be shamed, it should be that party.

I stand here today and say this: my colleague talked about Mr Savage and what he talked about. When he set up the welfare systems that we are talking about now, they were set up to be a safety net. Over generations, when that party was in Government, it became a mattress for people to lie on rather than a safety net, which is what it should be. That is what this policy is doing. It is very clear that it is talking about youth support and work focus. It has a vision; it has an ability to take our people forward.

I hear all this rhetoric. I hear young people talking about what this ideology should look like. I have just recently worked with the very young people whom we are talking about—these young people who are looking for opportunities. I remember just recently talking to a number of young people—20 of them—and I asked them one question: “What is your dream?”. They could not come up with a dream. They were not sure. Why? The fact is that for many of them they saw just a life of dependency where they were heading. So over a period of time—

Dr Rajen Prasad: Rubbish!

ALFRED NGARO: That is right; it is rubbish. The fact is that the rubbish was that they lost their sight to dream. That is what this is doing: we are giving them a sense of dream. We are giving them a sense of optimism and hope to believe that they can become something, rather than be stuck, time and time again, in a form of dependency. That is what we are doing here.

Many of them said to us: “Mr Ngaro, nobody wins at WINZ.” I asked them why they said that. They said that all it does is provide them with the things that they need; it does not provide them with the opportunities that they are looking for. These young people have been saying to me: “Mr Ngaro, give us opportunities.” I want to applaud the Minister for Social Development, because this is what this bill is doing. We talk about being trapped in a cycle. We want our people to have an opportunity to be successful in the dreams that they have, to be successful in their lives.

This system has been letting our people down for years, allowing too many to become trapped in a cycle of dependency, and with this bill that has to change. We want people to participate in the workforce. The words talked about by members were “It’s about jobs.” It is more than just about jobs. What the Minister is saying to us here today through this bill is that it is about an attitude for change. That is what she is telling us. That is the vision that she is giving to us. It is not just about the jobs, the counting of jobs, and how many are out there. It is about the fact that we say: “Let us have an attitude to be work-ready, to train, and to seek out the best opportunities.” A job is just a means to an end.

Dr Rajen Prasad: You’re going to legislate for attitude, are you?

ALFRED NGARO: A job is a means to an end, Mr Prasad. That is what it is, and that is what we are talking about here. It is using the words “future focus”. We talk about hope. It has future focus. It is encouraging our families. It is encouraging our young mothers to be future-focused. That is what we are asking them to do.

Here are some of the changes we are talking about. We are introducing financial support in the form of a new youth payment and young parent payment. We are introducing greater flexibility in the hours of work for part-time and full-time work tests for beneficiaries, subject to a work test obligation. We are introducing work obligations and preparation for sole parents, widows, women alone, partners, and for parents on benefit who have additional children. We are also authorising information sharing so that we can improve the process as well.

There was a lot of talk about jobs. It amazes me that somehow the Opposition members do not take time to read some of the statistics. Let me just remind them. The household labour force survey produced by Statistics New Zealand found that 62,000 jobs were created over the past 2 years, and the ANZ Job Ads report for January showed that jobs were on offer in every region in the country, with 30,000 positions available. If you look at Work and Income, it receives 1,300 to 1,500 vacancies a week. The Department of Labour job index indicates that job vacancies will increase by 0.8 percent in January alone—and I could go on and on.

I am a strong supporter of this bill. I am a strong supporter of this bill because our Minister and this Government have taken the courage to make a stand. No longer are we one-trick ponies. No longer are we going to say “Same old, same old.” Instead, we are prepared to take courage and say that this is the day that we will make sure that the opportunities for our young people and our young parents are there for them. Thank you.

Dr MEGAN WOODS (Labour—Wigram) : I am happy to take a call on this bill, the Social Security (Youth Support and Work Focus) Amendment Bill, and continue the arguments that Labour is putting forward on why we are opposing this bill. This bill does nothing to address the barriers to work for people who are seeking work. It does nothing to address the availability of work, it does nothing to address the childcare costs, and it does nothing to address whether the person has the skills required to move into the paid workforce.

What we have heard from members opposite today is a whole lot of conjecture about whether, if Mickey Savage were here today, he would be supporting the bill. We have been told by those members opposite is that if Mickey Savage, the architect of the welfare state in New Zealand, were here today, he would be supporting these reforms. I am here today to remind those members opposite that if Mickey Savage were here today, he certainly would not be supporting this bill. When Mickey Savage put in place our welfare State, he recognised several things. He saw that we needed a safety net welfare State to be there for people in the time of need. He recognised that there were obligations on those receiving welfare, but what Mickey Savage realised, and what this Government fails to realise, is that there is an obligation on the Government and the State, and that obligation is job creation. That is where this Government is failing the young people whom it claims to be seeking to help with this piece of legislation.

We are told by the Minister and by this Government that large numbers of people on benefits are a sign that the welfare system is not working. The issue is the number of people on welfare, we are told, and the system needs reforming because of this, and the system is failing those on it. The Government says that the welfare system and those using it are the problem, not its own failings in job creation, and that is what we want to draw attention to today. There are now 40,000 fewer jobs since National took office. Despite the numbers game that we have heard, trying to talk about “the 0.8 percent over several months”, the very simple fact of the matter is that today there are far fewer jobs available for people than when National took office. What is more, there is no plan from the National Government to address this.

In the last year’s Budget we were told that 170,000 jobs were going to eventuate over the next 5 years, and 36,000 of those jobs would be created by March of this year. Well, as at the end of last year we had seen 10,000, with a deficit of 26,000. This is no surprise, because these jobs were to materialise as if by magic. There was no plan to create them. In fact, John Key said that he did not see his Government as being able to have a great deal to do in this, and that he was not responsible for the global economic conditions. Labour firmly believes that it is the Government’s job, it is the Government’s role, to create jobs for people, not to resort to the kinds of things that this package we are seeing here before us today will do. This is a classic clamping down on domestic purposes benefit mums, in an effort to show action and mask inaction in the vital area of employment and creating jobs.

We have seen projections in the regulatory impact statement that these reforms will result in 84,000 people having work obligations. This will be another 84,000 people joining the 60,000 who are already out there looking for work. This will be 84,000 people looking for jobs that are not there. To tell us how many jobs are on SEEK and how many jobs there are on websites—the reality for so many individuals is that there are thousands of applications for jobs in supermarkets, when there are only hundreds of jobs available. It is not good enough to say that if you look hard enough, the jobs are there, but that is what this Government and the Prime Minister are telling people all the time, burying their heads in the sand and turning a blind eye to the fact that there are tens of thousands of people in this country who want to work but cannot work, because the jobs simply are not there.

We also have nothing in this package or this bill to address the issue of childcare, and how it is that we are going to ask women on the domestic purposes benefit who are responsible for the parenting of children to be back in the workforce when there is no comprehensive childcare plan to go alongside this. In fact, so little thought has been given to this that there have been musings in Cabinet papers about child-minding clubs, where we have unqualified people coming together and looking after those who we are being told are the children of some of the most vulnerable people in our society. The thinking that needs to go alongside this to allow these women to enter the workforce simply has not been there. Instead, what we are seeing is the Government playing the blame game in terms of getting these people back into the workforce, without having the adequate support and planning around how we are going to do that. As for the magical notion of there suddenly being all this part-time work that fits perfectly with the school day for these women to be able to go back into the workforce, we have seen no plan that this is going to be there. There needs to be thought, and that thought needs to go a little bit deeper than floating ideas of babysitting clubs for the children who are so crucial to our future.

The other vital piece of the puzzle that is missing in this bill, and one of the many reasons why Labour cannot support this legislation, is the issue of skills training. If we are going to talk about people being prepared for work, well, first of all they need to be prepared for there to be jobs to go into. But in terms of the skills training that is in here, it is not adequate. What we have seen, and what my colleagues have talked about, is that 48 percent of women—and they largely are women—on the domestic purposes benefit have no formal educational qualification. We are seeing the route that so many women who have been in this circumstance have used, in terms of the training incentive allowance, is being closed down, and this opportunity is not available to them. We have seen changes for sole parents that saw those studying at the higher-level courses, such as nursing, miss out, and these opportunities not being there for them. This is a package that does absolutely nothing to address these issues.

We see the disappearance of the youth transition funding with this bill. This is going to be a huge problem, because we do have a disconnect between getting young people into work, into education, and into training. What we are seeing, in terms of the solution proposed in this bill, will do nothing to help the 83,000 young people who are in that position. What this legislation will do is actually remove some of the empowerment of these people. We are told that somehow we are teaching people better budgeting for the future by the State taking control of their spending. We are told that these people can earn the right to manage their own payments if they continually meet their obligation and show themselves to be financially competent. Well, I would like to ask how people get the chance to do this, because the State is going to be paying their rent, and the State is going to be paying their power bill. Why do we not put the resources into equipping these people with skills for life, into budgeting, and into learning to do this, rather than leaving it?

It is not good enough for us to stand here in this House and listen to members opposite use the rhetoric of hope and of aspiration and of the great reforms to help some of the most vulnerable in society, and claim that if Mickey Savage were here, he would support it. This legislation fails on the Government’s obligation to create jobs and it fails on the Government’s obligations to put in place the childcare, the skills, and the training needed for people to move into areas where they can have hope, where they can have aspiration, and where they can see a better life for themselves. This Government is doing nothing to achieve that. Thank you.

MIKE SABIN (National—Northland) : I am delighted to be able to speak to the Social Security (Youth Support and Work Focus) Amendment Bill, and as a member of the Social Services Committee I also want to acknowledge the tremendous work, courage, and focus shown by the Minister for Social Development in this bill and its rhetoric of hope—rhetoric of hope.

Let us drill down a little bit into what this bill is all about. There is not a rising tide of welfare dependence; there is something of a tsunami. I have heard from the other side conversations about blame, the small number of people on benefits, and the myth of dependence. Let us peel back the layers and see what we are really talking about: 351,000 New Zealanders. That is 13 percent of the working-age population of New Zealand. Small numbers? A myth of dependence? I do not think so.

We also hear much from the other side about the fact that there are no jobs; there are no jobs for these young people. Well, Statistics New Zealand’s household labour force survey found that 62,000 jobs were created over the past 2 years, and the ANZ Job Ads report for January showed jobs were on offer in every region of the country, with 30,000 positions available—30,000 positions available. If you look at Work and Income, it receives 1,300 to 1,500 vacancies a week. On average it has some 3,500 jobs on offer. Perhaps we should turn to TradeMe. Some 10,500 jobs are available on TradeMe today as I speak. SEEK has some 15,000 jobs. I notice members on the other side are a little reluctant to provide the details on that.

Dr Megan Woods: Are they in the far north?

MIKE SABIN: Yes, the far north does come into the conversation, does it not? Far too many young people in the far north have been thrown on the scrap heap. I believe our region epitomises everything that welfare dependence has created and will continue to perpetuate.

It is a welfare trap. It is not enough that we simply throw more money at the problem and hope that it will go away. This was a tactic of the previous Government. It does not support them into work, and it comes at a cost of some $7 billion a year to the taxpayer, none of which provides the hope and the ability for these young people in particular to find their way towards the opportunities and towards their potential. Moreover, there are—

Darien Fenton: But where are the jobs?

MIKE SABIN: Do you want me to read out the jobs again? Would the member like me to tally them up? There are 30,000 positions available. I could go on.

I want to focus on one particular point that this bill is seeking to address, and that is the area of youth. This has to be a significant focus for welfare reform because there are an incredible number of people in the pipeline to a long time on welfare dependence. What we know is that there are some 14,000 teens in New Zealand who are currently not in employment, education, or training. There are another 3,000 16 to 17-year-olds or mothers between 16 and 18 years of age who are on a benefit, and 90 percent of this considerable number of people, the young people, the future of New Zealand—90 percent of them, statistically—will go on to an adult benefit at the age of 18. I say we can and must do better, and that is exactly what this bill is aimed at achieving.

What will the changes for young people do? Let us think about the support that they do not have that we are looking to put in place and that this bill will remedy. Youth support providers will work with young people to get them into education and training. That is called mentoring, and is something many of these young people have lacked. Young people will be required to attend their classes and attend budgeting and parenting courses. Again, these are skills they lack, and support they need. Youth support providers will manage young people’s benefits and help to pay those essential bills that so often get young people into trouble—their rent, their power, and so on. A payment card will be provided that will not facilitate the purchase of such things as cigarettes and alcohol. The State is not there to provide assistance in these ways.

This bill is the first step and a very necessary step in this nation’s need to reform welfare. I commend this bill to the House.

RINO TIRIKATENE (Labour—Te Tai Tonga) : We have heard a lot of scaremongering from the Government in this debate so far. In particular, the last speaker, Mike Sabin, was demonstrating his mathematical or statistical—

Mr DEPUTY SPEAKER: This is a split call.

RINO TIRIKATENE: Kia ora, Mr Deputy Speaker. The last speaker was wanting us to drill down a little bit into the detail. We have heard the talk that there is a tsunami of welfare dependence that is actually going to swamp our country. Well, let us drill into those numbers a little bit. The previous speaker mentioned that there are 328,000 people receiving a benefit, which is around 12 percent of the entire working-age population. That is appalling—absolutely. But the Social Security (Youth Support and Work Focus) Amendment Bill targets only young DPB recipients, and of those 328,000 beneficiaries only 4 percent are DPB recipients. Four percent of those 328,000 are actually directly addressed by this bill. But wait for it; we can go further, if you want to go deeper into the detail. Only 3 percent of those DPB recipients are under 20 years of age. So much for all the talk about this great tsunami!

What that statistic does demonstrate is that this Government is absolutely failing in its social contract duty of creating an economy with jobs that can employ our people. It is the 96 percent of the people represented in that statistic of 328,000 whom it should be focusing on, not targeting the most vulnerable DPB recipients: young mothers and young people. The figures show for themselves that this bill does not actually address the problem; it is just picking on the most vulnerable: young mothers, and young people. Those young people, as the member would be aware—if you go up into the far north, you can see them in places like Moerewa, and if you go to Te Tai Rāwhiti, you will see them in Wairoa—are right throughout the country. They are the ones who are going be adversely prejudiced by this bill.

We have demonstrated that the numbers that the Government is bandying about really just show its own incompetence and its own economic mismanagement. All of that is just a diversion. The diversion is to cover the fact that this Government has no plans for jobs, it has no plans for growth, the economy is stagnant, it wants to sell the assets off, it is putting austerity cuts through the public sector, and now we are seeing poor standards of ministerial conduct—poor standards of ministerial conduct—and cronyism and deals for its rich mates. That is what it is all about.

What are Government members saying? They are describing it as a tsunami—a tsunami. We have a lot of scaremongering going on here—a lot of scaremongering—but it does not address the real issue. The real issue is that there are too many people out of work in this country, and now the Government is going to implement punitive measures for young mothers and their children.

I will conclude my speech right now. I just want to say that we are opposing this bill. Labour will be opposing this bill, and I join with my colleagues here in opposing this bill. Kia ora tātou.

CATHERINE DELAHUNTY (Green) : Tēnā koutou e te Whare. I am delighted to have this opportunity. Is it not interesting how those of us who have direct experience of working, or experience of being on a benefit, have such different conclusions about that experience. I do not believe that legislation should be based on the personal experiences of people who have thrived for a variety of reasons, who then consider that they should cut the ladder out from underneath them. Beneficiaries—we are all beneficiaries. What is a beneficiary? Beneficiaries pay taxes, spend in local communities, care for families, contribute to communities, have human rights, and deserve respect.

Simon Bridges: But taxpayers pay for them.

CATHERINE DELAHUNTY: And they pay taxes. So what is a beneficiary? We are all beneficiaries of the State at some time in our lives. Some of us who do this very job here are being paid for right now by the State. Some of us when we are parents, some of us when we experience disablement from society because we experience impairment, some of us who are made unwell or made redundant need, at some time in our lives, to receive support. One day, believe it or not, any one of us in this room could wake up and need a benefit, and when we do, the stigma, judgment, and job testing proposed in the Social Security (Youth Support and Work Focus) Amendment Bill will fall upon our heads.

In the region where I helped to set up a beneficiary advocacy service, in Te Tai Rāwhiti, the Future Focus legislation—the past one and this current one—is known as “Future Unfocused”. Why? Because beneficiaries and beneficiary support services know exactly how many jobs are available in their region, and how many meaningless seminars run by brokers, shortly to be called youth support providers, will tell them to look at TradeMe jobs they have already looked at. Ask the advocates for disabled youth who is actually looking after their interests and who is the last cab off the rank, before you pass the judgments that we have heard in this House.

The welfare system in a decent society would be part of a broad belief system that values unpaid work. Hello? At least 50 percent of the work in the world is not paid, and we do not value it. In fact, we judge people who are not in paid work. We treat them as if they have no value. We believe a decent society would have benefits you can live on while you need them, and would invest in youth and real training, and education not punishment.

What about sole parents, especially women? Perhaps, if you are really concerned about women, how is this bill for women experiencing domestic violence? Every 7 minutes the police deal with a domestic violence incident, and one in three women will experience physical and/or sexual violence at the hands of her partner. In acknowledgment, this Future Focus has an exemption on work testing for people escaping violent relationships, yet in 2010-11 Work and Income New Zealand recorded only 54 women going on the benefit for that reason, because of domestic violence. When asked why the number was so low, it responded that it does not ask, and so some women are understandably reluctant to disclose this. It is critically important that we have a welfare system that makes leaving a violent relationship as easy as possible, and this bill will not make it easier, because women are not safe to disclose, and women are now going to be work tested if they do not disclose.

If we are going to talk about youth—and we have heard a lot just recently about young people and the thousands of jobs out there just waiting for them, not to mention the ones that work for sole parents—perhaps the Minister should talk to the Mayor of Ōtorohanga about the nil youth unemployment rate. That did not happen because of welfare, punishment, or privatisation of the welfare system as is proposed in this bill. That happened with real support, and real engagement by the community, which refused to abandon its young people, did not use the law as a stick to beat them with, and did not disempower them by giving them a plastic card and telling them where to eat or what to eat. What that community did instead was to say that these children are part of us, these children will always be part of us, let us work in the community and broker something real. That is not going to happen with Work and Income. Believe me, I have spent a lot of time in that office advocating for people, and I have never heard anyone offer them the creation of a job, let alone the kind of mentoring that has happened in Ōtorohanga.

Another rather heinous aspect of this bill is the aspect of “encouraging” contraception—somewhat controversial contraception—for women, because, of course, women are responsible for children. Women create children all by themselves! We are all immaculate conceivers! There is no role for men in this, apparently. So we will be punished. We are responsible. To incentivise contraception and effectively disincentivise women from having children—because criminal women from the lower classes should not breed while receiving a benefit—ignores the complex nature of sex and contraceptive use, and reinforces negative gender roles. To highlight this issue, we will ask the House to consider whether incentivising vasectomies for men who have relationships with women receiving a benefit or on a benefit is perhaps appropriate. Contracting out services is not opening up anything except profit for those companies.

We need to support our young people who are increasingly disconnected from their employment in the community. We need to build trust; we do not need to build punishment. So the Green Party is very happy to be opposing this bill, delighted to stand up for women, delighted to stand up for beneficiaries and young people, and to support positive models instead of the punishment model and the failure of imagination that is inherent in this bill. Kia ora tātou.

MICHAEL WOODHOUSE (National) : Not a single person listening to this debate on the Social Security (Youth Support and Work Focus) Amendment Bill this afternoon will be any the wiser about what the other side thinks. We already knew that it thought the Government was bashing beneficiaries. We have heard for so long “Where are the jobs?”, and “Not a single, solitary, coherent alternative argument or plan has been put in place.” I have to say I find it very ironic that Mr Tirikatene said today “Where is the plan?”, when in this House last week all Labour could say was “There are too many plans. We are being overwhelmed by plans; stop producing so many plans. We cannot keep up with them.” There is a very good reason why that is the case, because when we came to office, Treasury was predicting that unemployment would go above 9 percent, and that we were facing 10 years of fiscal deficits. Well, I am very proud of the fact that this Government has halved those fiscal deficits, the unemployment rate never went over about 6.5 or 6.6. percent and is dropping, and we have had growth in every single one of the last 10 quarters bar one. That is a plan. That is a plan that is working.

The most disgraceful aspect of this debate was the member Holly Walker and her scaremongering for beneficiaries about what this bill will mean for them. Well, I have a reassurance for them. There is not a single person on a welfare benefit in this country who needs fear anything by this bill. But I will tell you what is bashing beneficiaries: it is leaving 16 and 17-year-old young men and women to disappear out of the education system—90 percent of them popping back up on the unemployment benefit when they turn 18. It is leaving vulnerable young women to drop kick boyfriends who are not the parents of the children those women have borne, and it is about leaving them to fend for themselves—that is bashing beneficiaries.

I am very proud of the work that is being done by this Minister and this Government to rectify that. I am very proud of the fact that this bill is being brought in at a time when it is most needed, and I strongly support it.

Mr DEPUTY SPEAKER: The Minister for Social Development, in her first call, indicated that there would be an instruction to the select committee, and as we are breaking new ground somewhat I thought it might be pertinent and of assistance to the House just to acquaint the House with the appropriate Standing Order in relation to the debate. It is Standing Order 286(3), if members wish to look at that: “Any debate on the question for a motion under this Standing Order is restricted to the special powers or instruction set out in the motion. It may not extend to the principles, objects, or provisions or the bill to which the motion relates.” Furthermore, the report from the Standing Orders Committee re-emphasised that very point by saying: “Relevancy should be strictly enforced by the Speaker during the debate on an instruction to a select committee.”

Hon PAULA BENNETT (Minister for Social Development) : I move, That the Social Services Committee report finally to the House on or before 31 May 2012, and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area during a sitting of the House, despite Standing Orders 188, 190, and 191(1)(b) and (c). I make mention of the shortened time period for the select committee, particularly on the basis of there being a 3-week adjournment period where members will have an opportunity to hear submissions and actually hear the rest of it. This bill has been well and truly traversed. In August last year the Prime Minister made announcements and gave details around it. We had a Welfare Working Group that worked over a period of quite some months and traversed up and down the country. We believe that the public have had a great opportunity to see this. They should be able to get their submissions in on time, and that is why we advocate for the shorter select committee process.

Hon MAURICE WILLIAMSON (Minister for Building and Construction) on behalf of the Minister of Revenue: I move, That the Student Loan Scheme Amendment Bill be now read a second time. The main purpose of this bill is to improve the efficiency and the fairness of the student loan scheme, by encouraging greater personal responsibility and accountability on the part of borrowers towards their repayment obligations. The measures contained in this bill, which I will now recap briefly, are designed to achieve those objectives.

To introduce greater fairness across the student loan scheme, the bill proposes to maximise loan repayments made by New Zealand - based borrowers by removing the ability to offset losses against income in order to reduce their liability for student loan repayment purposes. As a consequence of this measure, the bill also proposes to extend pay-period assessments to the earnings of all borrowers, thereby removing the need for the annual square-up assessment of the salary and wage earnings of borrowers. Borrowers who have significantly overpaid their repayment obligations on a pay-period basis will still be able to apply for a refund, while those who have significantly underpaid will have catch-up deductions made.

To further improve borrower accountability, the bill gives the Inland Revenue Department the ability to receive a borrower’s contact person details from StudyLink from 1 January next year. That person will be contacted only for the purposes of providing a borrower’s most recent contact details, but will not be privy to details relating to the borrower’s loan balance. This will help facilitate the Inland Revenue Department’s contact with a borrower who is in default and who has not updated their current address details, so they re-enter the repayment system. It will also help the Inland Revenue Department to maintain contact with borrowers who leave New Zealand to embark on overseas travel, as well as New Zealand - based borrowers who may change addresses frequently.

In a further measure to improve the repayment levels of overseas-based borrowers, it is proposed to reduce the current repayment holiday provision from 3 years to 1 year. Borrowers must apply for the repayment holiday, and, as part of the application process, provide a New Zealand - based contact person. As this measure has generated some discussion around the perceived fairness or otherwise of restricting the ability to take a repayment holiday while overseas, I would like to further clarify the purpose of this change. The current 3-year repayment holiday is a generous one. It was introduced during the term of the previous Government, when the focus first shifted to the number of borrowers overseas with significant student loan debts, as a legitimate means of incentivising overseas-based borrowers to face up to their repayment obligations. It was, in effect, a trade-off, allowing borrowers who had gone overseas to have a reasonable period of time during which their repayment obligations were suspended. However, some years down the track we have taken the opportunity to review how the policy has been working in practice. Research conducted by the Inland Revenue Department in 2011 suggests that overseas-based borrowers generally travel and work casually in the first 12 months of their OE, but after that they tend to remain in one city and seek permanent work. The changes contained in this bill are designed to recognise that and the emerging fact that, as a result, borrowers can easily lose track of time and their loan repayment obligations by the time the repayment holiday ends. The changes in the bill are therefore intended to act as a timely prompt to borrowers that they must repay their loan when the holiday comes to an end.

For the vast majority of loan borrowers, who do the right thing and repay their loans on time, the changes proposed in this bill will be welcomed as bringing greater fairness and accountability to the student loan scheme. For the Government, the measures in this bill are consistent with the need for good governance over this substantial Crown asset. With this in mind, the Minister of Revenue has released a small change to the bill by way of Supplementary Order Paper 15 to clarify that the current commencement date of 1 April 2012 for most of the bill’s provisions will continue to apply in spite of the passage of time that has occurred since the bill was introduced last year.

In bringing the bill to its second reading, I want to acknowledge the work of the Finance and Expenditure Committee, and its recommendations to further improve the content of the bill. The result is a bill that will add greater strength, integrity, and transparency to the student loan scheme for borrowers, for taxpayers, and, indeed, for the Government. It is therefore with great pleasure that I commend this bill to the House.

GRANT ROBERTSON (Deputy Leader—Labour) : Hello, Mr Deputy Speaker. It is good to be back here discussing the Student Loan Scheme Amendment Bill. What I would say in response to Mr Williamson is that everyone on this side of the House wants to see people who are overseas paying back their loans. In fact, when the interest-free student loan scheme was introduced, the key element of it was the fact that it was interest-free when you were still in New Zealand. It was a way of incentivising people to stay in New Zealand after they graduated, and to contribute to our economy. What we see now is yet more tinkering from the Government—yet more tinkering around the edges, trying to achieve the stated goal of the Minister for Tertiary Education, Skills and Employment of dampening the demand for tertiary education. That was the very first thing Mr Joyce said when he came in to be the tertiary education Minister, when Anne Tolley was removed from that post. The very first thing he said was that his goal was to dampen the demand for tertiary education. What “dampening demand” means is taking away the opportunity from New Zealanders to get further education.

So what we see in this bill that has come back is more of the tinkering.

Simon Bridges: This member’s still got a student loan.

GRANT ROBERTSON: What was that, Mr Bridges?

Simon Bridges: Have you still got a student loan?

GRANT ROBERTSON: No, no. I paid my student loan off—I might add, before Labour’s interest-free student loan policy came into place. I was one of those students who suffered under the National Government’s student loan scheme. I paid interest while I was studying. I paid interest while I was studying, which meant that I had absolutely no ability to pay that money back. My loan increased. I became what was known as a flat-spotter, which meant that I spent a period of time earning when I did not even get close to meeting the interest payments. I did not even get close. But then the Labour Government came along—and I thank Mr Bridges for giving me the opportunity to recite this—and said “No. We will remove interest while you are studying, because that is unfair. That is unfair.” Then the Government followed that up by removing interest altogether, and saying to people “What you borrow is what you will pay back.” That is a fair system. It is a system that was designed to encourage people to come and stay in New Zealand and make sure that they contribute to the economy.

What this Government has done since it has been in office is tinker around the edges. I do think it is worth reflecting at this time that the most insidious of the changes that the National Government has brought in is stopping people aged 55 years and over from borrowing for the living cost component of student loans. These people, who have been in my electorate office, have been laid off from their jobs—laid off from their jobs—and they now want to go and retrain. What is this Government saying to them? It is saying “We are not going to support you to do that. We are not going to support you. We would rather you stayed on a benefit. We are not going to support you to contribute.” That is the kind of change this Government has made a priority when it comes to the student loan scheme. It is not looking at the way in which the loan scheme can be used to support students. It just wants to dampen the demand for tertiary education.

Well, when we look at the bill, Mr Williamson did dwell a little bit on this question of the change to the repayment holiday, and it disappointed—I am not allowed to say what I am about to say, Mr Deputy Speaker. I would have liked to hear from the Minister of Revenue on this matter, because just a few years ago, when he was also the Minister of Revenue in a previous Government, Mr Dunne waxed lyrical about the importance of the repayment holiday. This is what he said: “The reality [faced by students] was a … massive debt upon their return to New Zealand, which in some cases would be enough for them to make the decision not to come home at all, and our country would be the loser.” Mr Dunne went on to say “We needed to take a pragmatic way through this,”—he likes pragmatic ways, does Mr Dunne—“and, being someone who places great virtue on pragmatism, it struck me that the logical course of action was to derive the solution that we have: to extend the repayment holiday period for 3 years,”—

Andrew Little: Who said that?

GRANT ROBERTSON: —this is Peter Dunne—“recognising the fact that young New Zealanders take that extended period overseas;”.

So Mr Dunne thought it was pragmatic in 2007, but now he has changed his tune. Simon Bridges has got to him over there on the National Party side. He said to him “No, take that holiday off those people. Take that holiday off those graduates. Reduce it down from 3 years to 1 year.”

Well, this is not going to work. It is completely unnecessary, and it is not going to work. Treasury has actually told the Minister in the Budget documents that there is “Little evidence that this will improve repayments. It is likely to increase debt held by overseas borrowers, discourage them from returning and therefore increase the annual student loans impairment.” So this wonderful idea from the Government to help improve the loan balance and get more money back actually turns out to increase it. It actually turns out to increase the annual student loan impairment. That is what Treasury told the Government, yet the Government has decided to pursue this change. The Ministry of Education has gone on to say as well “This [change] can be expected to have a negative impact at the margin on borrowers’ decisions regarding whether to return to New Zealand.”

So that is what the Government has managed to do with its tinkering and its changes to the student loan scheme. It has actually pushed students away from coming back to New Zealand and contributing to our economy.

I want to make it clear again that there are elements of this bill that this side of the House sees as useful. These are changes that will help tidy up what happens when students go away overseas. But to say, as Mr Williamson did, that the change around the repayment holiday will somehow help with getting money back is absolutely not the case. Treasury has said it is not the case; the Ministry of Education has said it is not the case.

Andrew Little: They know best.

GRANT ROBERTSON: Well, they are the ones that advise the Government, Mr Little, and unfortunately on this particular matter the Government has decided not to take that advice. So we have a situation where, once again, the tinkering, the changes that Mr Joyce is making, actually is not helping graduates come back to New Zealand and make a contribution.

The other matter—

Simon Bridges: This sounds like you’re going to vote for it, Grant.

GRANT ROBERTSON: What was that, Mr Bridges?

Simon Bridges: Sounds like you’re voting for it.

GRANT ROBERTSON: Well, no, I have already said that we will be voting for the legislation to go through this stage, but just wait until the Committee stage, Mr Bridges—just wait until then. And then, when we get to the Committee stage, we can assess whether Mr Dunne will be the Mr Dunne of 2007 or the Mr Dunne of 2012. Which will it be? Clearly—

Hon Maurice Williamson: He’s in two minds.

GRANT ROBERTSON: He often is in two minds, Mr Williamson. That is right; he often is in two minds. It will be a little bit of back to the future for him to see whether he can cope with the fact that his pragmatism of 2007 is suddenly dispensed with in 2012, in the face of ruthless radicalism from Simon Bridges, who says “No, I don’t want those graduates coming back to New Zealand. I don’t want to see those New Zealanders contributing to our economy. I would much rather they stayed away, seeing their debt increase—no incentive to return to New Zealand.” That was not the pragmatism of Peter Dunne when he was with the Labour Government. It is the hard, right-wing attitude of Simon Bridges that is now finding its way into legislation.

All of the changes that have been made by this Government to the student loan scheme fail to actually contribute to getting more students into tertiary education, because that is not its goal. Its goal is the stated goal of the Minister for Tertiary Education, Skills and Employment: to dampen demand. We saw that with the changes around the over-55s that I have already mentioned. I do think it is important to remember that in an environment of high unemployment, where people in their 50s are losing their jobs and are expecting to work on into their 60s—and up to 70 for some people—to say to those people “No, you cannot have any support for living costs under the student loan scheme.” is effectively to say to those people “We don’t want you to retrain. We don’t want you as part of the workforce.” I know that Grey Power and other groups are very concerned about the impact on their members of these kinds of changes.

The other changes that have been made, again, tinker around the edges and do not actually make a substantive difference to the loan balance. I am aware from the Finance and Expenditure Committee’s report to us that, in fact, the additional revenue that is going to be coming back to the Government from this “represents about 0.12 percent of the total nominal loan balance of approximately $12 billion, of which … $2.5 billion is owed by student loan borrowers currently overseas.” That is it—all of this for 0.12 percent of the loan balance. This Government is tinkering at the edges. It is not actually going to be doing anything in this legislation that will support more people going into tertiary education. Although there are some matters in here of merit that will, in fact, allow more information to be held by the Government about where borrowers are, overall it does some minor things and one very non-pragmatic thing around the repayment holiday. We look forward to contributions in the Committee stage where we can, in fact, see whether we can get Mr Dunne to return to the pragmatic roots that he had in the Labour Government, rather than following the radicalism of Simon Bridges.

SIMON BRIDGES (National—Tauranga) : Like the member who has just taken his seat, Grant Robertson, I went through university in what some might consider the bad old days of interest on student loans—it was not ruthless, it was “Ruthanomics”. I worked three part-time jobs: I waited tables, I put books on shelves, and I worked at Te Atatū South Foodtown, and I paid my loan back.

Grant Robertson: Did you walk barefoot?

SIMON BRIDGES: I walked over hot coals and broken glass to get to university. I lived in a hut made of stone. But they were not the bad old days; they were the good old days, because they gave me the moral fibre that I now have. We are, of course, keeping the interest-free component, because, contrary to basically everything that the members opposite have said, actually we want to see people in universities and polytechnics and wānanga.

I have to say that despite all that heat and light we just heard from Grant Robertson, this bill proceeded through the Finance and Expenditure Committee very peacefully, and that is because what we are doing makes sense. It is common-sense stuff, and it really is about just putting back a bit more personal responsibility into the student loan regime so that the students of today do have a little bit of moral fibre.

The bill does three things. Let me just canvass them very, very briefly. Firstly, repayment holidays go from 3 years to 1 year. I think that just emphasises that a repayment holiday, when you are off in London, or New York, or Sydney—wherever it may be, doing whatever you are doing—is a privilege and not a right. It is not something tradesmen get when they buy something on hire purchase from Noel Leeming, or anywhere else. They do not get a repayment holiday. I think it is right that we do have one, but we are shortening it from 3 years to 1 year, and I agree with that.

We are also requiring borrowers to make clear a contact person. They must have a contact person. Be very clear, there is no requirement on the contact person to have to front up. There are no penalties on the contact person, but there must be one. I can understand members asking what the point is. Actually, it is quite clear that by having that there, we will see repayments. There is a level of accountability and we believe that will make a difference.

Finally, we are excluding investment and business losses from the calculation of net income of borrowers in assessing student loan repayments. That just brings an element of consistency here, and it will raise some money.

Mr Robertson asks what the point of this bill is. He says it is just tinkering. Actually, this bill alone will raise an additional $14 million, conservatively speaking. But even more important are the behavioural changes that it will make for those who decide to take out a student loan. When they finish and they get around to repaying those loans, we want them to do it quicker. We want them to have greater personal responsibility. So this is a very good bill, which members of the select committee worked cooperatively on, and I am proud to stand and support it.

Dr DAVID CLARK (Labour—Dunedin North) : I rise, following that very mediocre speech from the member opposite, Simon Bridges, to outline a few points about why we would support such a bill despite its various inadequacies. Look, Labour supports all attempts to make sure that people do pay back what they have been loaned, that it is done in a fair way, and that everyone pays their fair share. But the way that this Student Loan Scheme Amendment Bill is structured begins to hint at some of the other things that we have seen recently in terms of restricting access and opportunity.

I want to say a little bit about the repayment holiday changes as I go on. We have seen already in the last 2 years a series of restrictions placed on tens of thousands of New Zealanders, who have been cut out of higher education—55-year-olds and over, new migrants, pilot trainees, part-time students—and John Key’s statement last week suggests that student loans are going to be reined in, in a big way. The Government is not finished yet.

This bill is more of an effort to tinker around the edges of student loans, but it does, at the same time, affect the hundreds of thousands of Kiwis who depend on them. The bill would exclude investment and business losses from the calculation of net income in assessing student loan repayments. This presents a risk where there are significant losses for someone starting their own business soon after university, who may then have to borrow more or make other arrangements in order to meet repayment requirements. Various submitters raised questions about this in the Finance and Expenditure Committee, but the Government would not resile from it.

The bill requires alternative contact details to be supplied as a precondition of accessing a student loan, and presumably the thinking behind that is to provide an alternative contact point for tracking down defaulters. If that is handled in a way that is true to what we believe to be the intention of the bill as the Government has outlined it, that will not be a particular problem, as long as it is carefully policed and the Government remains true to its objective of merely tracking down those who are defaulting on their loans. But, as we have seen, the efforts so far have been generally in the direction of claw-back, and so we retain a few nervousnesses around that.

The changes around the repayment holidays are the ones that have been concerning to me. The members opposite wish to rein in the repayment holiday and make it just 1 year rather than 3 years. We argued in the select committee about the merits or otherwise of this proposal, and we were clear that this would likely affect unfairly those who are second-chance learners—those who have, perhaps, already repaid a student loan and decide to go back and take on another one. If I was to take out a mortgage, repay that mortgage, carry on with my life for some period of time, and then decide to take out another mortgage, I would expect to face the same conditions with that second mortgage as with the first one I had taken out.

With student loans, in terms of what is proposed around this repayment holiday, that is not the case. A person is not entitled to a second repayment holiday under this legislation. That will disadvantage disproportionately those who have gone out, sought some education as a young person, and decided that they could not cope or it was not for them at that stage. They have had gainful employment, gradually paid down their student loan, and then come back with a real ambition in mind, determined to get ahead, determined to make the best for themselves and their family by taking out a second student loan. Suddenly, their opportunity set is restricted. This is the kind of change we have come to expect from the Government members opposite. We have challenged this. They said that this is something they are sticking to. We asked for further information on it; it was very slow in forthcoming.

The mortgage repayment example is a fair one. I think that everyone should have the opportunity to have fair conditions when they take up their loan, and expect to have the opportunity to face that loan in the same way as they would at any other point in their life. A few statistics: $17,000 is the average student loan held currently and 58 percent of the borrowers are women. When I talk about those who are faced with that reduced opportunity set, I think we should bear in mind that 58 percent of those who are borrowing are women. And 70 to 80 percent of eligible borrowers take on a loan. So this does affect a lot of New Zealanders. I think we should provide the opportunity for people to retrain, particularly those who are motivated so to do. Restricting future options for our citizens who want to better themselves seems counter-intuitive. Labour is determined that the principles of fairness and opportunity should win out in this case, as in all cases.

The bill also inserts clauses 7B to 7E to reflect “current administrative practices regarding the repayment codes used for income tax and student loan repayments. The treatment specified in the Student Loan Scheme Act 2011 was designed in anticipation of changes to the Inland Revenue Department’s computer system which will now not be made.” These changes will not be made because that computer system was a flop. Millions of dollars were poured into the Oracle Corporation for mainframe redevelopments and they were subsequently written off. That raises a very important question around this to do with the major project that the department that will be administering this legislation is about to embark upon, and that is an estimated spend of $1 billion to $1.5 billion overhauling a computer system to manage our tax take. That amount of $1 billion to $1.5 billion—

Scott Simpson: Over 10 years.

Dr DAVID CLARK: —over 10 years is not as big as Texas but it is certainly bigger than INCIS. So we need to be very careful, when we are dealing with this new computer system that is being put in, that it should, I think, be able to cope with the kinds of changes that were anticipated in the smaller investment in the Oracle Corporation for the original mainframe developments. It seems to me strange that we should be now making amendments to the legislation in order to cope with a computer system that did not work, when a bigger one that theoretically should work is planned. One has to ask whether the Government has faith in its officials and in the contracts that it is letting, and whether it is sure that it can carry out the work that it has promised with this amendment.

My colleague Grant Robertson mentioned earlier that Treasury and the Ministry of Education had cast aspersions on the Inland Revenue Department’s calculations for estimated savings that are likely to eventuate. This is worrying because this legislation, by one calculation, will cost us—or cost the taxpayer, I should say more correctly—approximately $2,761,000 to pass. That calculation, done for me by the Parliamentary Library, says that that is what it costs to pass a bill in this Parliament. We have to wonder in this case, when we are passing a bill that hopes to regain $15 million from the taxpayer, whether that is money well spent, especially when the Ministry of Education and Treasury have questioned whether this bill actually achieves what it sets out to achieve.

In order to conclude, I wish to just recap that Labour will, indeed, support this legislation, but it supports it with reservations, and those are around the repayment holiday and the way in which that is intended to be put in place to restrict the opportunities of second-chance learners. That is because Labour always supports fairness and opportunity. We want to see people get ahead. Where they want to work hard, where they want to take the opportunity to better themselves and better their lot for themselves and their families, Labour wants to support that. We have seen from National restrictions to student loan eligibility, which have seen tens of thousands of New Zealanders shut out of higher education, and more is promised. John Key needs to come clean on what he is planning for student loans, as hundreds of thousands of Kiwis depend on them.

These restrictions that will be placed on 55-year-olds, new migrants, pilot trainees, part-time students, and so on are not the end of it. Labour wants to see fairness and opportunity, not a bill that tinkers around the edge, aiming to get back just 0.12 percent back in an estimate that has been described by officials as a guess. We want to see this money come back to New Zealand where it is due—that much is true—but we also want to see in place a system that is fair and that supports Kiwis who are working hard to get ahead and who are bettering themselves for the future of us all.

HOLLY WALKER (Green) : The Green Party will continue to oppose the Student Loan Scheme Amendment Bill. The main reason for our opposition to this bill has not changed after discussions at the Finance and Expenditure Committee, and that is the very poor, contradictory proposal that is supported by no research or analysis to reduce the repayment holiday from 3 years to 1 year. We have heard in the debate so far about the repayment holiday. It is when borrowers living overseas receive an automatic suspension from their obligations to repay their loans while they are living overseas. If we want to understand why we have a 3-year repayment holiday in the first place, who better than the Minister who introduced the repayment holiday in the first place to explain the reasoning for it. I am quoting here, as we heard earlier, Peter Dunne from 2007: “The new rules will make it easier for people overseas to repay their student loans, and will offer the chance of a fresh start for those who have fallen into arrears. There will be a repayment holiday of up to 3 years for borrowers going overseas. During that time they will not have to make repayments, although their loans will still attract interest. This change recognises the fact that it is not always easy for people to repay their loans while doing their OE or working overseas …”.

I would like to ask the Minister, although he is not here, and the parties that are supporting this bill, including the Labour Party, what has changed since then to make that statement any less true or relevant. I can tell the House one thing that has changed since the Minister made that statement, and that is that more New Zealanders are moving overseas than ever before. If we want them to ever come back, we should be making our policy settings in such a way that encourages them to do so.

So we might fairly ask what impact this bill will have on borrowers’ decisions to come back to New Zealand, and we have had advice from the Ministry of Education on this bill that “This can be expected to have a negative impact at the margin on borrowers’ decisions regarding whether to return to New Zealand.” Mr Dunne’s arguments about recognising the importance of the OE and offering a fresh start so that people are incentivised to come back to New Zealand after travelling are even stronger in 2012 than they were in 2007.

We have seen in the select committee report that a typical borrower based overseas may face interest obligations after a repayment holiday that amount to two to three times the original value of the loan. So that is a huge disincentive for that person to ever pay that loan back or, indeed, to return to New Zealand. It is really important to note that the advice of the Government’s own officials is that this bill will have a negative impact on people repaying their loans and then returning to New Zealand. I really challenge those on the Government benches to explain why on earth we need this change.

I think it is very important to note that the original 3-year repayment provision for a repayment holiday has not been in place for very long; the repayment holiday was introduced in 2007. So it is not actually a very long time in which to analyse the evidence of how that repayment holiday has been used and what impact it has had on people’s repayments in order to make a considered judgment about whether or not it should be shortened. The select committee heard about this. It quizzed officials about the level of evidence and how much research has been done into the impact of the 3-year repayment holiday, and they said: “there was not enough empirical evidence to evaluate the effect of the three-year repayment holiday introduced in 2007, and that limited modelling has been done on the likely effect of curtailing the holiday, as borrowers’ response to the change is uncertain.” They described their best estimate as a guess in the select committee.

So why are we doing this? Why are we shortening the term of the repayment holiday from 3 years to 1 year, when there is not enough empirical evidence, there is limited modelling, and the best that officials can provide is a guess as to how much it might change people’s behaviour when it comes to repaying their loans? It seems to me to be an ideological attempt to rein in the student loan scheme, with no credible analysis of the impact and a very real risk that it will in fact influence borrowers to stay away, not return to New Zealand after their OEs, and not repay their student loans.

The fact that the Government is pursuing this change with no research to back it up and against the advice of officials seems to support what we heard recently from the Prime Minister when he was speaking to an audience of property developers—and he obviously thought he was in a safe space—that he wants to rein in student loans in a big way. We have already seen some examples of the Government doing this, like cutting the access to living costs for those over 55, like restricting access to StudyLink for permanent residents. It has begun already, and I am very concerned about what the Prime Minister might be referring to when he says he wants to further rein in student loans in a big way.

It is a shame that Simon Bridges has left the Chamber, because he said earlier—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member twice has mentioned the absence of members. You cannot mention that a Minister is not here, which was the first indiscretion earlier on, and I did not pick you up on that, but you cannot refer to the absence of a member from the Chamber.

HOLLY WALKER: Thank you, Mr Assistant Speaker. I apologise for that. I did want to point out that Mr Bridges said earlier that National is keeping interest-free student loans because it wants to see more students at university and polytechnic. I am sorry to break it to Mr Bridges, but that is not the reason that National is keeping interest-free student loans. John Key said why when he spoke to the audience of property developers. He said that it is about the only thing that will get young people out of bed before 7 o’clock at night to vote, but it is not politically sustainable to put interest back on student loans. So although we have heard from Simon Bridges that it is all about wanting to see more students at university, it is in fact all about what is best not for students but for National’s votes. That is what the Prime Minister revealed to the property developers—his real attitude towards students and young people.

I am also disappointed to see that the select committee decided not to proceed with the fruitful discussion about allowing people who have paid off their loans in full to take a second repayment holiday, which was an interesting idea that came out during the hearings and which I think deserved better consideration. If someone has paid off their loan in full and they later enrol to do a second degree or course and take out a second student loan, why not reward the behaviour that we want to incentivise—that they have paid off their first loan in full—with the opportunity for a second repayment holiday? As the select committee noted in its report—or as some of the members of the select committee noted—this could be especially helpful for women and for second-chance learners, and I think it is a shame that the select committee did not see fit to recommend this helpful change, or, indeed, as the previous speaker referred to, to consider it seriously.

The Green Party will continue to oppose this bill. There are, as we have heard from our colleagues, some provisions, such as providing a contact person back in New Zealand for overseas borrowers, that we think are sensible, but like our colleagues in the Labour Party, there are some parts we can support but there are also some parts we cannot support, and those are enough for us to vote against this bill.

The changes to the repayment holiday are significant. They are not well researched. They are not well analysed. They are not supported by officials, and they will probably result in people taking longer to pay off their loans and staying away from New Zealand. So the Green Party will not support this bill.

PAUL GOLDSMITH (National) : I rise to speak in favour of this bill, the Student Loan Scheme Amendment Bill, which implements reforms announced in Budget 2011 and builds on earlier Acts passed last year. These are modest changes to a very expensive scheme. The costs have ballooned since Labour’s cynical act during the 2005 election campaign—to promise interest-free student loans. Now every dollar that we lend is immediately written down to around 54.75c, and borrowers are naturally in no hurry to repay their loans when the money is free. But of course the money is not free. It has to be paid for by taxpayers and the rest of the population. So this bill will help turn things round a little and reduce the burden on the rest of society for the cost of this scheme.

I am amazed to hear members from the other side—members from the deep south, whom, I would have thought, would be concerned about rioting students jumping on the roofs of houses—complaining about the provisions of this bill. If anything, it could be going further.

In detail, what we are looking at here is a bill that makes it mandatory to provide a New Zealand - based contact person when applying for a repayment holiday, and that holiday will be cut from 3 years to 1 year. This is very simple stuff that I do not think anybody reasonably could object to. The student loan Budget package includes a change requiring every new loan received by StudyLink to include that contact person as a condition of getting a student loan. This bill would allow for that contact information to be used by the Inland Revenue Department. That is important. It is a very, very small thing, but there is just a practical detail of trying to contact someone who has gone overseas and disappeared without a trace, and to be able to talk to the parents, most likely, and to catch up with where that person is will make a very significant improvement to the way we collect these student loans.

The latest bill also includes a very important provision in relation to excluding losses from the calculation of net income. To maximise repayments from New Zealand - based borrowers, the bill makes amendments to exclude losses, such as rental losses, from the calculation of net income for student loan repayment purposes. Again, this is an important feature in terms of just trying to be more realistic about what the net income of the student is and to raise the repayment rates for the loans, which are costing the rest of the country a great deal of money to maintain.

We have heard also that the prediction is that this may be increasing repayments by around $14 million a year. It is not a large amount compared with the overall loans, but it is quite a significant increase—about 2 or 3 percent—on the repayments that we are getting on a regular basis. So that is very worthwhile. It is getting extra money in to repaying what is a very large debt to the rest of the community. I am in favour of this bill, and I am looking forward to hearing further about it in the Committee stage. Thank you.

TRACEY MARTIN (NZ First) : I stand on behalf of New Zealand First to provide our conditional support for this bill, the Student Loan Scheme Amendment Bill, to the next phase of the House.

Tim Macindoe: Unconditional?

TRACEY MARTIN: Conditional support, sir. We note that one of the purposes of this bill is to improve compliance and to encourage personal responsibility around loan repayments. [Interruption] Mr Goldsmith, New Zealand First is a party that believes in personal responsibility, and as a previous credit controller whose working life was spent in the pursuit of those who were avoiding paying debt, I also understand some of the necessities of this bill. But today we are talking about student debt.

Students are those young New Zealanders, who, we all in this House agree, are the future of this nation—those young New Zealanders to whom we consistently send the message that they must seek higher education and must prepare for their own financial future through recognition of their achieved skill levels, and that can be via a university or a unitech. We as a society send this message again and again and again: “Go and get some higher education.”, and when they take our advice, we charge them for it. We give them a debt. But, ultimately, the purpose of this bill and its amendments is to lower the levels of student debt and to encourage repayment of student loans.

We note that there are several administrative clauses, such as the recommended insertion of clause 30B, which would amend schedule 1. We would like to draw the attention of the House to the fact that this requirement had originally been included in the Student Loan Scheme Act 1992, but it got omitted from the Student Loan Scheme Act in 2011 through an oversight. We would respectfully suggest that this is what happens when legislation is rushed through the House to meet a predetermined, predescribed, politically comfortable date as opposed to the goal being good legislation that then does not need to come back into this House a second or a third time for amendment. However, New Zealand First sees the logic of the provision for a New Zealand - based contact person for borrowers. We are sure that there will be many a mum and a dad, or any other contact person out there, who will be breathing a sigh of relief to read that by becoming that New Zealand - based contact person, they will bear no liability for the loan repayments, although we are unclear as to the enforcement that might be suggested if they choose not to provide borrowers’ current contract details.

There are two points that New Zealand First would like to bring to the attention of this House. We take this opportunity to remind the House that since the tertiary education fees were introduced in 1989, student debt has, as has been mentioned, spiralled out of control. The latest figure is $12.07 billion, affecting 621,000 New Zealanders. New Zealand First advocates that not only are some of these amendments required to tighten a bill rushed through in 2011 but it is actually time for a change of direction around some of the tools used in student debt reduction.

I sit on the Education and Science Committee, and I have heard from the National Institute of Water and Atmospheric Research, the Ministry of Science and Innovation, and AgResearch. Each of them has explained to that committee about the need to encourage more studies in science so that this nation can move forward with greater economic development, and the need for the retention and return of those graduates to this nation and those industries. We hear the same in the area of medicine and education, but rather than trying to pick “winner and loser” industries, which history has taught us is very dangerous, New Zealand First believes that the authors of this bill should consider the inclusion of New Zealand First’s dollar for dollar student debt write-off scheme for those graduates who remain and work in New Zealand. We should recognise that those who participate in such a scheme will be working and paying taxes in New Zealand—all taxes, not just PAYE but GST on every purchase, fringe benefit tax if they happen to get a good job with some perks, and resident withholding tax if they manage to save some money. But by removing some of the administrative cost on pursuing debt collection—people like me are quite expensive when we seek out debt—it is possible that this scheme may well, to coin a phrase from the National Government, become fiscally neutral.

The second point that we want to draw the House’s attention to, and it has already been mentioned by our Labour and Green colleagues, is new section 107B(3)(a) in clause 17. We see this as a serious flaw in this amendment bill. This section refers to the ability of an individual to access repayment holidays, and from our reading—and I am pleased to see that it has been picked up by others—it restricts repayment holidays. I quote subsection (3): “a borrower reaches the borrower’s limit if—(a) the borrower has had 1 or more repayment holidays, granted under this Act, for a period of 365 days or for periods that total 365 days;”. We note in the commentary, which is at the front of the bill, that the Finance and Expenditure Committee considered how this might affect second-chance learners and women. For some reason that is not mentioned in the commentary, although there is a paternalistic comment towards the end about protecting people from themselves, this access has been restricted.

It is worth pointing out that this is not suggesting that a borrower can take a repayment holiday and another repayment holiday. These are people who have already paid off their loan; they are the very people we want to encourage to use the system. It is exactly what the Government is trying to do—get people to repay the loan. So those people have already proved themselves to be reliable creditors. They have taken advantage of the repayment holiday for the period, then they completed the contract, and that contract was between themselves and the State in that moment. I do not know of any other contractual law where you go to borrow money, pay it back, and prove to be a good creditor, and then suddenly somebody says they are now going to remove something from you. So those people have achieved what was asked of them. They have upskilled themselves and have repaid their financial debt to the nation.

I ask the House to consider that section again with particular attention, and I draw its attention to the reality of what this means in women’s lives. It is very, very likely and is a reality of our world that a young woman will go to tertiary education, and as we have heard already 58 percent of the people we are talking about here are women. She will go to tertiary education and will seek a higher qualification using the student loan scheme. Just as with her male counterpart, she will then, if there are any jobs, go out and actually find herself a job, and repay her loan during that time. She might take a loan holiday, let us say on the birth of her first child, just while she and her family readjust. That does not mean she is not working, but it may mean that she wants to take that 365 days while they get over the birth of their first child, re-suss out their financial priorities, reset their budget, and move on. Later on in life, and as a more mature woman I can speak to this, after we have looked after our families and fed our husbands, and our children have grown up a bit, we might like to upskill a bit more. That means we might need to go and reaccess the student loan scheme. Unfortunately, if my husband leaves me and I now need another 365 days to figure out how the children and I are going to live and just readjust our financial circumstances, I do not get a repayment holiday. I do not think that the reality of these circumstances has been considered by the select committee. I would ask that they be considered, before we come to the Committee stage.

Just to close, New Zealand First will be supporting this bill, but the support will be conditional—I must repeat, conditional—on some of these issues, and possibly we could have discussion on these issues prior to the next level. Thank you.

DAVID BENNETT (National—Hamilton East) : That was a very interesting speech from the New Zealand First member, who talked about debt spiralling out of control, yet at the same time New Zealand First wants to give extended repayment holidays and it wants to bring in a one-for-one debt write-off ratio. The things do not match, and I guess that is the truth of its policy as it goes out there and says what it thinks it wants those voters to hear, but does not deliver actual policy that is real and constructive.

That is the problem that this Government has had to deal with in the student loan area. It was a process done by the previous administration—interest-free student loans—and it led to support amongst the student body, as you would no doubt expect, but also it meant that there were a couple of problems with that policy. The first problem was that it created a huge debt for New Zealand going forward, and my colleagues talked about how nearly half of the amount of money lent on student loans has been lost. So that is a major contributor to the Government’s economic situation.

The second thing that it did is that it created a situation where you needed to have a cap on the number of students. So we often hear that our opposition talks at universities about caps on students and blames the Government, but it was actually brought in by Labour as part of this interest-free student loans policy. I think that is something that needs to be made clear. Labour capped the number of students in New Zealand who could get education. Labour deliberately limited the number of New Zealanders who could get those educational opportunities. It is a bit rich for those members to come into the House now and say otherwise.

When we look at this bill, the Student Loan Scheme Amendment Bill, this is an attempt to try to get some of that money back that the student loan budget faces, in the sense that we are requiring borrowers to provide details of a contact person to StudyLink. That will give the opportunity for the Inland Revenue Department and StudyLink to then be able to follow up and look at those borrowers, and will lead to a situation where there will be more repayments.

As with anything in this area it is not a case where you can necessarily say that that will implicate a certain number of repayments; it is something that relies on the individuals. Setting up a system where you get as much information as possible and setting the process will lead to a better repayment outcome. In essence, you will probably see that there is a greater repayment to the Inland Revenue Department and through StudyLink by virtue of people having to put down a contact person.

There are also some changes around excluding losses from the calculation of income for student loan repayment purposes, and that is also to assist in a greater recovery of that loan repayment. Reducing the repayment holiday from 3 years to 1 year is another part of that process. Requiring borrowers to apply for their repayment holiday and provide a New Zealand - based contact person when they go overseas is important as well.

In essence, this bill is an attempt, and will be a successful attempt, to get some more repayment of that student loan debt. It is something that political parties in this House obviously agree with, apart from the Green Party. We look forward to the bill progressing through the House.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) : The contribution of David Bennett before me raised a very important point around the issue of capping student numbers. He put a fine point on the fact that—

David Bennett: Labour brought it in.

Hon NANAIA MAHUTA: Yes, Labour did do it, but you have to understand the context of the time. When Labour was in Government significant tertiary reforms were needed. At that time unemployment was sitting at around about 3.2 percent, from memory. So we did not have high unemployment; we had low unemployment. We needed a skilled workforce, and we needed a tertiary sector that was better aligned and was specialising in areas that aligned to labour market needs. That is the context that that member failed to comment on.

So when we are talking about the challenge ahead of this country to reduce student debt, by the same measure we need, in times of recession, to lift the skills of our people. We can do that only by investing in our people and sending the right signals to say that, in a time of recession, now is the time to upskill so that we can ensure that productivity can be increased so that we have a highly skilled workforce able to meet the demands of the newer economic challenges. At least, that is the vision that Labour sees. We see that as a very serious challenge that is partially understood by National, but not fully embraced. The signal that National is sending, indeed, is that it wants to reduce student debt, it wants to continue to put caps on tertiary education at a time when we should be lifting them, and it wants to limit the numbers of people who can access student loans to get a higher education. All the signals are in the wrong place.

We will be supporting the Student Loan Scheme Amendment Bill because we do believe that efficiencies can be gained in terms of reducing the student loan debt. However, there need to be incentives. A regulatory measure, in itself, will not do a great deal to send important signals to our people that by reducing their student loan debt, and by ensuring that the student loan scheme continues to be available to them, they can continue to upskill and increase their skill set to become more productive in an economy that would be thriving if the National Government had a plan. But under Labour there is hope—under Labour there is hope.

I want to pick up on some of the comments that were raised by speakers before me. Firstly, there was the reduction in the student loan repayment holiday. The one question that I had—and I am not a member of the Finance and Expenditure Committee—concerns the arbitrary rationale in terms of reducing the student holiday from 3 years to 1. If you look at the bilateral agreements that New Zealand has with other countries in terms of working holidays, they all exist for about a 2-year period. So even then, common sense would say that if the working holiday schemes exist for 2 years, the holiday period should be for 2 years, and they would align. That way you are sending signals to those young people who want to have their OE, maximising on our bilateral partnerships with other countries, that say: “Look, have the holiday for a 2-year period, and, you know, get a job, and if you can repay, then repay.” But the signals are all in the wrong direction and there is no strong rationale for the reduction in the repayment holiday. I think some very important questions were raised in this House that should come out in the Committee stage and be answered by the Minister of Revenue around the rationale for the reduction.

The other point that I wanted to comment on is the profile of those people who have access to student loans, and looking at how flexible types of arrangement might be a greater incentive to mature people going back into study, and to mums and women going back into study. They will want to ensure that they do meet their debt obligations, and they will want to earn a track record, but also they want some flexibility around just some everyday life challenges that come up. If we take that kind of approach in working with people and being more responsive to their life context and challenges, then I think we have a fully functioning student loan scheme that is operating on a high-trust basis, on an incentive basis, and on a basis where people are actually saying: “Look, it is good to continue to make repayments. I can earn a track record here with the Inland Revenue Department, and there will be an opportunity in the future to continue to take up student loans should I wish to upskill in the future.” Those are all very real questions when people start to consider whether or not to go back to a tertiary institution to upskill and get a qualification. They are all very real considerations that I think underpin a broader context for considering the New Zealand student loan scheme.

There were other comments made by speakers before me around the Government’s changes and the way in which they are restricting those over 55 years of age, new migrants, and part-time students from accessing the student loan scheme. Again, the signals are all in the wrong place here. What we need more than ever before is for an ageing workforce to continue to ensure that their skills are relevant to the new workforce labour market demands, and we can only assure them of that if they have pathways into higher education. For a lot of people, especially a lot of mature people whom I certainly come across who have a family and who have to weigh up the cost of taking up tertiary education with that of looking after their family, student loans sometimes become a option. They can manage with, maybe, their partner who is working part-time, and then they go back to study. So I think people cannot simply shake their head and say that that is not a reality, because it is a reality for many. I think the needs of upskilling young people are just as important as upskilling a maturing workforce who actually can continue to work at 50 and 55 if they are upskilling and transitioning, perhaps to a new career pathway, through a supportive loan scheme.

There are a lot more questions here to be asked, and a dearth of responses from the Government on some very fundamental challenges that certainly Labour set it, which are that in a time of recession we should be sending signals to New Zealanders to say that they matter and we want to invest in ensuring that they have access to be able to improve their skill set in order to be part of a productive economy in a labour market that will be able to ensure that there is a place for them.

Again, the thing I am most concerned about in the contributions from the Government today is that this is all just about reducing debt. Well, if it is all just about reducing debt then you can tick the box on this bill, but it has to be about people at the end of the day. If we are serious about investing in people and lifting their skills so that they continue to be a part of a productive economy, then all of the signals are in the wrong place and we are certainly not going in the right direction. We do support efficiencies in the Student Loan Scheme Amendment Bill, but we have concerns and we want to raise them so that during the Committee stage those questions can be responded to by the Minister. Kia ora.

TODD McCLAY (National—Rotorua) : It gives me pleasure to rise to speak on this bill, the second reading of the Student Loan Scheme Amendment Bill, and I want to do so pledging that without reservation, without additional questions, and without complaining I will be supporting this bill. We continue to hear these sorts of things from the Opposition: all the reasons why we should not do things in New Zealand, yet they are going to support it, none the less. I will be supporting this bill and I say so at the beginning because I believe it is an important piece of legislation. I note that with the exception of the last speaker, Ms Mahuta, for whom I have a huge amount of respect, it is good to see that the Opposition has got the B team out today for such an important piece of legislation.

Can I say a couple of points here. We have heard from the Opposition that this is about another cap on student places. I can say without any doubt at all that the National Government is focused on more opportunity for students so that they can do more and they can learn more. We have funded more core student places in universities, polytechs, and private training providers than at any time before. It is a very positive and important thing. But this legislation is about saying to New Zealanders that they have an obligation to each other and to themselves to repay. This is around the rules of how they will repay.

The reason it is important is that $1.6 billion was lent by the Government in student loans in 2010-11, and $690 million was repaid in that period of time. So our commitment to New Zealanders who study is absolutely clear. That cannot be called into question. But what must be called into question is the ability for a Government to continue to find more money to pay into a system so that people can study and go overseas and enjoy themselves, learn, and come back again, and the burden that that places upon the taxpayer. This is one degree; we will take another step forward in making sure that those who study, who are supported not by the Government but by the taxpayer—because this is taxpayers’ money that is borrowed on behalf of the taxpayer, and it is the taxpayer who, therefore, has the obligation—that they must meet an obligation to the taxpayer to be productive and to pay that money back.

I want to finish here because there will be opportunities later on to go into some of the greater detail. I think it is not too much to ask that when people go overseas they provide good contact details for somebody whom the ministry or the Inland Revenue Department can correspond with to make sure that they can be involved with them and pay their money back.

But I want to give an example of a time when the Opposition party—the Labour Party—when in Government was in favour of only a 1-year repayment holiday. Now it is saying that there are lots of reasons for it to be longer than a 1-year repayment holiday. Cast your mind back to just after 2005 when all of New Zealand said to the Labour Government of the time: “You have used almost a million dollars of our money to put a pledge card out there to get re-elected.”, and Labour took a 1-year repayment holiday before it changed the law so that what it had done was not illegal any more, and paid the money back anyway. So when it suits Labour to have only a 1-year repayment holiday, that is fine. That was the taxpayers’ money it used. In the case when we lend money to New Zealanders to study, it is a good use of money; back then, for Labour to borrow from New Zealanders for 1 year was not. But I commend this bill to the House, and I look forward to more from the B team on the other side. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call: Labour and the Greens.

CHRIS HIPKINS (Labour—Rimutaka) : If that was Todd McClay’s audition for Cabinet, I would not be making an appointment to see the Governor-General just yet. In fact, Todd McClay talked about the 2005 election. That is kind of ironic, because at the 2005 election I seem to recall the current leader of the National Party going up and down the country promising to fight interest-free student loans with every bone in his body. John Key must have become a bit of a jellyfish these days, because interest-free student loans are still here after 3 years of a National Government.

We do not know for how much longer they are going to be here, of course, because we know that Steven Joyce does not like them, and at every opportunity that he gets Steven Joyce takes a pot-shot at interest-free student loans. The real question is who is going to win out in the end of that. Will it be Steven Joyce, or will it be John Key? I suspect Steven Joyce is going to be around a little bit longer than John Key is, so I suspect that Steven Joyce might just get there by attrition. But, of course, the question is when John Key goes. If he goes before the next election, which is very possible, then Steven Joyce might get his way. Of course, if John Key holds out to the next election, which he is bound to lose, then Steven Joyce will not get his way, because there will be a Labour Government, and interest-free student loans will be here to stay.

Hon Maurice Williamson: Ha, ha! It’s good to see a member with a sense of humour.

CHRIS HIPKINS: We know that Maurice Williamson does not like interest-free student loans. He was another one who railed against them when the Labour Government introduced them, yet now he is sitting there supporting interest-free student loans. Maurice Williamson, of course, is one of the National Ministers whom we can always rely on to say what he actually thinks, rather than what he is told to say, so if I was Maurice Williamson I would not be making an appointment to see the Governor-General for a position in Cabinet either. He has been—

Hon Maurice Williamson: Oh, really?

CHRIS HIPKINS: No, I really would not. I move to the substance of the Student Loan Scheme Amendment Bill and the issue of the repayment holidays, which the current Government is decreasing from 3 years to 1. I thought it was interesting to go back and look at why they were increased in the first place from 1 year to 3. Of course, that was done only back in 2005—

Moana Mackey: Dunne!

CHRIS HIPKINS: It was only “Dunne” back in 2005, and there were some very, I think, pragmatic words offered to explain that at the time, back on 27 March 2007 during the Committee stage of the debate. A member of the House who was arguing in favour of it said—and I think this is really good, so I am going to quote from it; I know other members have quoted from it as well—“The reality they all faced was a very massive debt upon their return to New Zealand, which in some cases would be enough for them to make the decision not to come home at all, and our country would be the loser.” I agree with that sentiment. I think that if you create these huge penalties, there is a risk that people will simply not come home, in order to avoid them. But the quote goes on: “We needed to take a pragmatic way through this, and, being someone who places great virtue on pragmatism, it struck me that the logical course of action was to derive the solution that we have: to extend the holiday period for 3 years, recognising the fact that young New Zealanders take that extended period overseas;”. I thought those were very sage words of advice—

Moana Mackey: Common sense.

CHRIS HIPKINS: Common sense, in fact, from “Mr Common Sense” himself, Mr Peter Dunne. Unfortunately, Peter Dunne’s pragmatism these days tends to go along the lines that the pragmatic approach is to vote for whatever the Government—whoever the Government is—is proposing in order to pragmatically hold his ministerial warrant. That seems to be the Peter Dunne approach these days.

Andrew Little: Well known.

CHRIS HIPKINS: That is right—that well-known pragmatic principle of supporting whatever is required in order to keep his ministerial job.

I think Peter Dunne was right the first time. Peter Dunne was right the first time, when he said the pragmatic thing to do was to extend the repayment holiday to 3 years. I assume that he is going to vote in favour of this new pragmatic decision to reverse his earlier pragmatic decision, because, if he is not going to—if he is going to stick with his first pragmatic stance—then the Government presumably will not have the numbers to pass this bill, because, of course, it needs Peter Dunne’s vote to pass this. So I would invite Peter Dunne to, in fact, reverse his position and go back to the position that he held before. We will be testing that in the Committee of the whole House stage, I am sure—

Moana Mackey: To see which Peter Dunne.

CHRIS HIPKINS: —to see which Peter Dunne will be coming out to play when this is debated in the Committee of the whole House stage.

The reason why this is important is that all New Zealanders revel in the opportunity to go overseas at some point. Many people do that after they have studied, and I want to make sure they come home again.

GARETH HUGHES (Green) : Ngā mihi nui ki a koutou. Kia ora. I rise to take a call and oppose this bill, the Student Loan Scheme Amendment Bill. I would like to thank the submitters, the Finance and Expenditure Committee staff, and the officials who worked on it.

The Green Party is the only party—I am not sure about New Zealand First—that is opposing this bill, and we have been clear throughout the whole process of this bill from first to second reading that we are opposed to this bill, because of the repayment holiday, first and foremost. We are opposed because it has not been analysed, we are opposed because it has not been recommended by officials, and we are opposed because what we are going to see is more Kiwis moving overseas. That is going to be the outcome. It is not an outcome that we want to see on this side of the House, and that is why we will be voting against it.

The bill does three key things. The first is closing the loophole around the pay-period changes for repayment. The Green Party supports that. We think that is common sense; it is about time we did it. Secondly, the bill introduces the requirement to have a New Zealand contact for a person going overseas. Again, it is common sense, and the Greens support it. We do not know why we did not do it more than 10 years ago, because I think it is uncontroversial, and everyone in the House could support it. However, the third key part of the bill, the repayment holiday, is the reason we will be voting against this bill.

It is coupled with the other changes made on the Government benches to tertiary education, which have seen it become less accessible, less affordable, and in some cases downright impossible. The Government, for the first time in our history, is slamming the door on prospective students with its capped enrolment, and is not even giving students a heads-up that they cannot enter university and that it has slammed the door on our open, egalitarian system. At a time of huge economic questions and huge social questions, when we are struggling for a big-picture economic strategy that is actually going to deliver prosperity and will be able to lift our kids out of poverty, the Government has dropped the education ball. It has made it less affordable, less accessible, and in some cases impossible to be a student in New Zealand, to get upskilled, and to contribute to our economy.

Instead it has gone down the path—and Minister Heatley knows all too well about this—of the “drill it, mine it” approach. Coupled with the “cut it, sell it” approach, these are the only ideas the Government has: to sell off our assets, to cut our essential services, and to dig up the ground.

In a sector where we already spend $3,000 less per student than the OECD average, when we are dropping down all the international tertiary education rankings, this Government, coupled with that ideological solution in search of a problem, the voluntary student membership legislation, is all about trying to harm the sector, and that is our big fear in terms of the Student Loan Amendment Bill we have in front of us now.

What we have heard from the Greens spokesperson on education, Holly Walker, is that there has been no empirical research and no analysis of the impact of the repayment holiday changing from 3 years to 1 year. We know that the officials advised against it, and we know we are actually going to see Kiwis going overseas. National was elected and ran on a platform of seeing fewer Kiwis going across the Ditch, of closing that gap with Australia, yet what it is doing is legislating bills that are going to see more Kiwis move overseas. It is self-evident common sense that if people go overseas for an OE—and we know the average, from the New Zealand Kea survey, is actually between 3 and 5 years, not 1 year—we are going to see Kiwis stay overseas. We are not going to see Kiwis diligently run home to start their repayments because the Government has changed the rules from 3 years to 1 year. What we are going to see is Kiwis move overseas, and that is the advice from officials. A key question I would like to see resolved in the Committee stage is what happens to those students who apply right now or tomorrow, or who applied a month ago, for a 3-year exemption holiday. What happens? Do they automatically go down to 1 year? Do they exist on the 3-year current regime?

In a nutshell, what we are seeing is bad law, with no empirical analysis, ignoring the advice from officials, and actively seeing more Kiwis move overseas. We will be having none of this, and this is why we are the only party opposing this bill.

MICHAEL WOODHOUSE (National) : That was exactly the same speech that the member Gareth Hughes gave, I think, during the last time we amended the student loan scheme provisions, particularly in respect of the student loan repayment bonus. Remember what the Greens said about that? They said it was bad law, it had not been researched, there was no empirical analysis. Only, what we know is that it worked. It worked by reducing the amount of debt that these students had to repay when they graduated.

Let us just disavow ourselves of one notion, and that is, debt is not interest-free. The only question is: who is paying the interest? Under the present legislation it is interest-free to the borrower, the student, when they are there. But that does not mean it is not interest-free. It is not the State that pays it. The State might pay it, but it is on behalf of every single taxpayer in this country—hard-working, earning New Zealanders and pensioners who have income through interest and other investments are paying for these student loans, and it is only right to expect that good value is gained from that investment.

At a time of recession we are seeing more people going into tertiary education than ever before. The pass rates are higher, and the amount of student debt that is accumulated is now finally starting to slow because of the very sensible policies that have been put in place by this Government.

It is a really straightforward thing. Do not you think, if you are going to borrow, should not one actually repay the debt? Only, the previous Government did not do anything about the number of people who were going overseas, with a repayment holiday for at least 3 years, and then creating such a debt burden that they were not prepared to come home to face it. Well, if Mr Hughes is so concerned about that, if he is so concerned about the number of graduates who are going away overseas, he should be supporting this bill, the Student Loan Scheme Amendment Bill, because this is exactly what this bill is going to do.

I thank the Finance and Expenditure Committee for their careful consideration, and the officials who helped us. I really look forward to debating this bill clause by clause in the Committee stage. Then we will see what this will really do for our students. I commend the bill to the House.

Hon NATHAN GUY (Minister of Immigration) on behalf of the Minister of Customs: I move, That the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill be now read a third time. These bills were introduced to Parliament in September 2010 as the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill, which was an omnibus bill. This bill had its first reading on 15 September 2010. The bill has been reported back from the Justice and Electoral Committee, and the Committee of the whole House stage was completed on 6 March this year, at which point the bill was divided.

These bills amend the Customs and Excise Act 1996 and the Biosecurity Act 1993. The amendments in these bills are important improvements that are required to support the sharing of information across border sector agencies. These amendments will ensure the Customs Service and the Ministry of Agriculture and Forestry meet the Government’s priorities in relation to the delivery of the Joint Border Management System, and support effective collaboration at the border. The Customs and Excise Amendment Bill also provides for improvements in the effectiveness of customs law enforcement. These amendments will restore the level of effectiveness to the administrative penalty and petty offence schemes that was intended when the Customs and Excise Act was passed in 1996. Finally, the Customs and Excise Amendment Bill addresses emerging customs and border management issues, and provides clarity to existing legislative provisions to improve administration of the Customs and Excise Act.

In terms of the purpose of the amendment bills, they contain three categories. The first one is amendments to provide for planned information-sharing by the Customs Service with the Ministry of Agriculture and Forestry, and across a range of other agencies with interests at the border. There are amendments to enhance the effectiveness of the customs law enforcement mechanisms, and, finally, nine smaller amendments to clarify provisions within the Customs and Excise Act.

I wish to thank the Justice and Electoral Committee members, who provided a number of amendments, including the insertion of definitions of “biofuel” and “biofuel blend” into the bill, and clarification of when blending of biofuel for home consumption occurs. These amendments have been incorporated into the legislation.

The amendments in the bills enhance customs law enforcement, which is essential to ensure that the Government can prevent the importing of drugs and precursors and other illegal activity at the border, and contribute to the prosperity of New Zealand as a whole. I commend the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill to the House.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) : I rise with some concern and certainly with a lot of commitment to speak on this legislation. The legislation is basically the mechanism by which the Joint Border Management System can be implemented. On the face of it, it is a very sensible piece of work—that is, that the Customs Service, MAF Biosecurity, and the Immigration Service can share information on people or on goods coming into this country. That is a very worthwhile move, we would think. Given the computer technology and the sharing of information on everything else around the world, that is the first thing we should be able to do. That is great, except that what we have got is a National Government that has cut funding in core parts of border safety and security to pay for this computer system.

Hon Member: Really?

Hon DAMIEN O’CONNOR: Absolutely. So what they are going to do is have this wonderful Rolls-Royce information-sharing process, and people will be there plugging in the information. Meanwhile goods will be slipping past their very noses and coming into this country, with the potential to cause billions—yes, literally billions—of dollars of harm to our economy.

I have to go back to the 2009 Budget, when the National Government came into office. One of the many things it did in its first Budget was cut 54 front-line staff from biosecurity. It cut $2 million from the biosecurity budget, and then it proceeded to announce that there would be this wonderful new system. Well, to be fair, it had been talked about while Labour was in Government; it has been around as a concept for a while. The National Government proceeded down this path, assisted, of course, by the Minister of Tourism, the Rt Hon John Key. He was very keen to sit down with his Aussie mates and say “You can come to our country”—as quick as a flash—“and we’ll cut 8 minutes off the processing time from when you get off the plane until when you get out with your bags—8 minutes. That’s why you should come to New Zealand.”

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

Hon DAMIEN O’CONNOR: I am sorry, Mr Assistant Speaker Robertson. You are in New Zealand; it is not why you should come. I apologise for that. For the saving of 8 minutes, we introduced SmartGate.

Simon Bridges: A lot can be done in 8 minutes, Damien.

Hon DAMIEN O’CONNOR: It can be—probably two or three times for the member over there.

Simon Bridges: Shame on you!

Hon DAMIEN O’CONNOR: Can I say to the young member over there, I am sure it would be two or three times. That 8 minutes is a very expensive 8 minutes.

The new Joint Border Management System, where the sharing of information, along with SmartGate, will allow the Australians to waltz into New Zealand without any checks or balances, is a very high-risk situation. We have many, many visitors from around the world coming through Australia, coming across the Tasman, and coming through the system. Many, to be fair, will not be able to use SmartGate, but this system and the change that we are addressing here is to allow the implementation of swift, efficient border processing of both people and goods. I say that that is really dumb. This is one country that, more than anywhere else in the world, relies on biosecurity. We have biological systems in this country that produce the vast majority of our export wealth, and will do for some time in spite of our attempts to move into other areas of exporting.

Biosecurity is a thin line, and it is even thinner now that the National Government has been in power for 3 and a bit years. It has cut funding, and what funding has been there between biosecurity, the Customs Service, and immigration has been put into this new Joint Border Management System. I have a letter, forwarded to the Minister for Biosecurity, from an ex-employee. He has moved on to another job because he lost faith in what he was trying to do. This is not a fly-by-nighter; this is someone who worked for MAF Biosecurity New Zealand for years, and sent a letter in despair to the then Minister for Biosecurity, the Hon David Carter. He said in his letter that there has been one dog in use in Auckland for quite some time, shared between the airport and the ports, to sniff out possible biosecurity breaches or Customs Service breaches, because they have not trained enough dogs.

Well, I have asked questions of the Minister, and he has not been able to give me answers on that. How many dogs are actually available? Do they provide 24/7 cover? Planes come into this country on a 24/7 basis, and so do ships. Are we checking the border as we should, as a country entirely dependent on the biosecurity systems that we have around this country? It is a sham. The effort has gone into, firstly, the SmartGate system, which is distracting front-line biosecurity people from their work. They are trying to help the Customs Service and the immigration people to make sure that SmartGate works, because they want to please the Prime Minister. Well, that is all well and good, but they should not forget their front-line objectives.

The Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill, as it was when introduced and referred to the Justice and Electoral Committee—it was divided into the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill, the ones we are debating here tonight—had as an objective from the National Government that it was keen that retailers at Auckland International Airport could get access to border information, so they could customise their business decisions based on the nationality of passengers on specific flights. Well, did that mean that if there were a number of Japanese on the flight, they would get out their sheepskins? Or did it mean, if there were a whole lot of people from the US, that they would open up McDonald’s? And if they were from the UK, did it mean they would open up Kitty O’Shea’s and they could all have a Guinness or a warm beer? The point is that this was the kind of dumb objective from the National Government to assist their mates at the key airports to make more money from visitors who were flying in and out.

That kind of shallow objective identifies the risks that we are dealing with here. If a Government can put those objectives into a bill, then what about biosecurity? What about the compromises that have been made in both resources and front-line efforts to ensure that we keep out fruit fly or foot-and-mouth, or the whole range of organisms, unwanted pests, and diseases that can be brought into this country by people who fly around the world in 24 hours? They could, within 36 hours, have been on any farm or in any park anywhere in the world, and they could turn up on our border here, and be assisted through, to keep the Prime Minister—the Minister of Tourism—happy that no one has been offended at the front line. That is shallow. It is dangerous, and it is not something that we should tolerate. I am sure that the select committee has given fair consideration to the bill, but I am concerned that what we have here is a shallow objective around computerisation and resource efficiency—which in themselves are not bad objectives—at the expense of front-line biosecurity in this country.

The Minister cannot answer, and has not answered, the claims made in the letter to me from a front-line biosecurity officer, and which have been identified in the papers today. There has been no clear explanation, and I will certainly call for a thorough investigation and inquiry into whether those allegations are true, because if they are, we are at serious risk and this economy is at serious risk. The bill we are passing now will only exacerbate the risks that we are facing 24 hours a day, 7 days a week, because the resources that we need are not in the biosecurity systems. The Labour Party has concerns about what is happening here. I challenge the Minister to get up and address all the claims made in the letter—claims that are now in the public arena—and reassure us, if he can, that we are not dumbing down front-line biosecurity systems just to appease the people who want to come into this country for a holiday, or the people who want to import goods from anywhere in the world. We have open borders. We have said that you are welcome to sell anything into our country, but we cannot afford to do that at the expense of some major incursion. Biosecurity is paramount, and this Government has compromised that biosecurity protection.

Dr CAM CALDER (National) : It is a great pleasure to rise and make a brief contribution to the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill. This Government has over the last couple of years made no secret—no secret at all—of the fact that we are rebalancing our economy away from the debt-fuelled consumption of the previous 9 years, when the other Government was in power, to an export-led growth.

We have had some very, very good news. We have had some very good news. Exports are up by almost 10 percent—almost 10 percent. Exports to Australia, our No. 1 market, are now $11 billion a year and exports to China, our No. 2 market, are up by 22 percent—22 percent. Our total exports from New Zealand are $47.3 billion. It is an extremely important linchpin, foundation stone, for our health and prosperity. It is underpinned by our rural economy. This Government does not take biosecurity lightly. The rural economy has had an excellent year—an excellent year. Milk production is up by 7 percent, and that is twice the average growth of the last 10 years. The meat and fibre sector has had a record financial year. Our national well-being is underpinned by our rural economy, and it is vitally important that we have a high level of security at our borders. We earn our keep not just from goods—or, as it is often called, merchandise trade—but also from services. Total services in exports to June 2011 were $13.5 billion. This is dominated by tourism, travel, and education.

The thrust of these bills, as we have heard, is to encourage and enhance effective collaboration at our borders—effective information-sharing. The Government has put its money where its mouth is. It has made a $75 million investment in new systems to make that information sharing more effective and more able to underpin the security of our borders. The new Joint Border Management System will bring the Customs Service and the Ministry of Agriculture and Forestry biosecurity processes together under the same system so people do not fall through the cracks. So, as the previous speaker alluded to, we can trace somebody and alert the relevant authorities if a person has declared that they have been a visitor to a farm in an area of concern, or indeed any farm at all, which we can then take appropriate steps to address.

In summary, the Joint Border Management System will enable importers, exporters, and other supply-chain parts of it to electronically submit clearance documents, declarations, and supporting documents to the border agencies through one channel using standardised information. What is the advantage to the Government here? It will safeguard border services, enhance the management of border risks, and enable this information sharing. What is the advantage to industry, I hear you ask. Industry will benefit under the Joint Border Management System, particularly through the Trade Single Window. It will enable industry to enable access and electronically submit all the border clearance documents once, and once only. It will provide more certainty about the clearance status of those documents and result in the faster, more transparent, and efficient movement of goods through the supply chain. I commend this legislation to the House.

Hon DAVID PARKER (Labour) : I rise to take a call in respect of the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill and the related customs legislation, the Biosecurity Amendment Bill. We have another occasion when the Government, which is already overseeing a current account deficit, seems to be focusing its effort on making it easier for importers to import more goods at low cost, when we already have a current account deficit, which is because the cost of our imports and interest bill exceeds the value of our exports. So although this legislation is not bad legislation, it really does not cure the underlying problem of the New Zealand economy, which is that we get poorer every year because the difference between the exports that we sell as a nation and the cost of our imports and interest bill is met every year by the sale of New Zealand assets and the borrowing of more money from overseas sources. They are the only two ways that you can meet a current account deficit. You either sell some of the assets that you owned at the start of the year to an overseas owner or you borrow money from overseas lenders.

The shame of this particular legislation is that the Government, once again, seems to be unduly focused on the import side of the economy rather than the export side of the economy. Instead, it is concentrating on changing things that would make a difference to our exporters. We heard the last speaker talk of the increase in trade with China, and it is true that there has been an increase in trade with China since the date of the free-trade agreement that was negotiated under the last Labour Government, but it also remains true that we have a trade imbalance with China in that the cost of our imports from China exceed the value of our exports to China. So I would not cry too loudly about that if I was on the National Party side of the benches.

Of course, another difference between us and the National Party on the other side is that we think that in light of some of the substantial trade imbalances in the world we should be moving to protect the sale of some of New Zealand’s most important assets like our land; stopping the land being purchased by overseas interests, including—

Maggie Barry: The ones you didn’t sell off in the 1980s?

Hon DAVID PARKER: Sorry? The ones we did not sell off in the 1980s? I would have thought that Maggie Barry of all people would understand that in a democracy one of the ways that we progress is by learning from our mistakes and changing, otherwise we would be all stuck in time and there would be no point in having a democracy. All of the decisions would have been taken in the 1980s, and there would be no new decisions to be taken today. But we in the Labour Party have a different view. We learn from our mistakes and we learn from the mistakes that—[Interruption]

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

Hon DAVID PARKER: We hear from Maurice Williamson whenever he turns up and talks about customs legislation it is more good news for the Government. It is a mantra that he has repeated so often that we have fun on the other side of the House thinking about what more good news for the Government could come from initiatives around customs information-sharing.

I suppose the question I would pose for the Government in respect of this information sharing is whether these improvements to the system would have picked up on the dual passport of David Garrett of ACT, the former member of the coalition partner. It would be interesting to hear from a later call from the National Party whether the information sharing would have been sufficient to pick up the fact that David Garrett had not one passport but two. For those who want a bit of information around that, you might recall that David Garrett, who was a supporter of the National Party, came to this House and railed against short sentences. He said that everyone should have longer sentences and no one should have a discharge without conviction, and he also railed against name suppression, all the while having sought name suppression and a discharge without conviction for his having been caught with two passports. The second passport was from a dead baby’s identity, the idea for which he got from some bizarre story—The Day of the Jackal I think was his excuse at the time. Well, he had two passports, and I would be interested to know whether the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill would have meant that SmartGate, or whatever this improved system in customs is, would have picked up David Garrett earlier than he was picked up when he used one of his multiple passports.

Can I also reinforce the comments made by the Hon Damien O’Connor. He raised a letter that has been received by us and forwarded to the Government that suggests that systems improvements are all very well and good—no one objects to improvements in efficiency in the Government service—but when it comes at the cost of biosecurity front-line services, as this person was suggesting, then there is a concern for us on this side of the House that there is an overall backward movement in the quality of our border security arrangements, particularly when it comes to biosecurity.

Labour does support these changes in process because there are some sensible changes in here, but we do make the point that this is not the big game in town. The big game in town is increasing—

Simon Bridges: Oh, this is the big game.

Hon DAVID PARKER: Yes, the big game in town is to increase our exports. We have for decades now imported more than we have exported, and every year we do that. The cost of the difference between our exports and our imports and interest bill is met by selling our assets overseas—

Hon Members: Oh!

Hon DAVID PARKER: —and borrowing more money from overseas. The National Party does not like to talk about this, because it has been trying to convince New Zealand that the issue for New Zealand is the Government deficit. The Government deficit that the current Government has run up, including through some unaffordable tax cuts, is quite dire and does need to be overcome, and it will be overcome by 2014-15, but the export imbalance will remain because the underlying imbalance in the economy has not been properly addressed by the Government. And this bill does not do it. This bill makes some technical changes to the way in which customs and excise joint border management information-sharing and other matters are dealt with, and that no doubt benefits importers more than it benefits exporters, and the imbalances in the economy remain.

STEFFAN BROWNING (Green) : The Green Party is supporting these two bills, these joint bills, the Customs and Excise (Joint Border Management Information Sharing and Other Matters) Amendment Bill and the Biosecurity Amendment Bill.

Simon Bridges: That’s the first time this term.

STEFFAN BROWNING: It happens. But there are a number of things that we are very, very concerned about, and we will be looking to make sure that the bills are implemented in a sensitive and sensible way. The bills, a little bit like the security and surveillance legislation that went through last week, actually impact on personal freedoms in a potentially significant way, depending on how the regulation is managed by the Minister of Customs and the customs and biosecurity services. It may be a fast and efficient system that moves people through airports, and moves trade, more quickly—and we all appreciate it when it affects us individually. We hope the improved profiling system can make that happen. However, moving people through very quickly does not necessarily remove risk.

I can recall coming back from my only trip to Tonga and, while on the plane, finding ants in a book we were reading. My partner and I thought we had better do the right thing and declare that to the customs people. That turned out to be everything except fast and efficient. Not only that; because we had actually declared what we saw as a potential risk to New Zealand horticulture—and I am a horticulturist—the Customs Service decided that it needed to charge us for the time and effort spent in dealing with it. Because of the nature of these bills, with regulation after regulation after regulation, they take everything away from people actually joining in and making a decent decision. I am just wondering where these bills will actually take situations like that. I think there is still a significant risk of people thinking that, OK, they can be fast-tracked as long as they do not declare anything, as long as they just zip on through. This risk profiling is going to let in, as another member of the House just mentioned, fruit fly or some other one.

While we are impinging on these freedoms, we have got the accessing agency being any class of agency. The customs bill allows huge freedom for various organisations being the ones privy to the information. The information is without limitation—information about goods and persons. So a wide range of information can go to whomever. I note that in previous speeches there was mention of Auckland Airport’s getting commercial information for customer profiling and that sort of thing. If that sort of thing carries on, as this bill allows for, although the Greens support it at the moment, we will be looking at that again when it comes back before the House. We hope it is not just some sort of revenue-making exercise on the part of the Government.

In terms of biosecurity—and I have mentioned the ants and I have mentioned fruit fly—we even have issues now where the Government has decided this week it is not going to worry about the Schmallenberg virus. There are no plans to test imported animal semen and embryos for it. It can create fever, reduce milk production, and produce birth abnormalities and abortions in our primary production, but the Government says, no, it is not a problem, because a certain sort of midge is needed to be the vector for it.

As for speeding things up, although we might get some better information in terms of risk profiling and the like, if we are not really going to apply biosecurity services in an absolutely thorough way, these bills are going to be just a veneer for a sped-up tourism industry and, obviously, for importers. I am very concerned, as is the Green Party, that although we can see the benefits of better risk profiling, we might actually end up letting some new biosecurity risks into this country. So support the legislation we will, but with a lot of trepidation about how it will be managed by the Minister and the services. Thank you.

TIM MACINDOE (National—Hamilton West) : I wonder whether members of the public who may have been listening over the last 20 minutes to some of the Opposition speakers have been left wondering what on earth it is that we are actually debating tonight. Thank goodness for the typically erudite and learned contribution of my good friend Dr Calder a short time ago, which brought some focus and clarity back to the discussion, because those who listened to Mr Parker would have heard him roaming far and wide. We had a little discourse on The Day of the Jackal, and I think he spent a little bit of time back in Epsom. He certainly left me thinking that I am not sure where he stands, but right at the end he confirmed that Labour is supporting this legislation.

Prior to that, we listened to Damien O’Connor, who began reasonably well. He was right to emphasise the importance of biosecurity—no question about that; that is a major focus of this legislation—but he was absolutely wrong to attack the Government’s record in this area, or our commitment to improving our biosecurity arrangements, because we stand on our record and it is a very good one. Mr O’Connor lost his way during his preoccupation with his rather infamous 8 minutes of mystery and intrigue. I have to say that he completely lost sight of the purpose of the bills, he certainly lost his audience, and I think he even lost the thrill of his 8 minutes. Those who were listening when he started speaking, I very much doubt were still listening at the end. The mystical 8 minutes was not as magical as he had led us all to expect it was going to be.

But for those with real stamina and perseverance, I would like to remind them that the purpose of these two bills, the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill, which are being read together, is to make improvements that are required to support the sharing of information across border sector agencies, and that has got to be a really positive step. I am pleased, after cutting through all the fluff that we have had to listen to in the last 20 minutes, that most parties in this House seem to accept that point.

The Joint Border Management System that the Government agreed to fund is dependent on effective sharing of information. In fact, it is quite a theme at the moment in Government across a whole range of different aspects of legislation. It reflects the far more technologically advanced age that we live in, I guess. We are looking to ensure the effective sharing of information among agencies operating at the border. These bills provide for important information-sharing between the Customs Service and what is currently the Ministry of Agriculture and Forestry, and will be the primary industries area, and in particular will ensure that the Government’s $75.9 million investment in new systems can deliver a real change in border management, because obviously we are looking for a good return on that investment—and we did not hear anything from Mr O’Connor on any of that.

I want to congratulate those who have worked on these bills. It is appropriate that we do that as we move towards the final stages of their passage through the House. There has been very good work done by the previous Justice and Electoral Committee and by the officials, and I congratulate them. I know that my very good friend Kanwaljit Singh Bakshi was fully involved in that, and I commend him for his real commitment to that exercise.

I just want to reiterate the purpose of the bills and why they are broadly supported. These bills will ensure that the Government’s investment can deliver a real change in border management. The Joint Border Management System that we have introduced will safeguard our border services, it will enhance the management of border risks, and it will enable the Customs Service and those working in what will be the primary industries area, which is currently the Ministry of Agriculture and Forestry, to give trading partners fast and accurate assurance about the safety of goods leaving New Zealand. As an export-dependent country, we cannot overstate just how important that is. Our partners depend on that assurance from us, we depend on our ability to give it to them, and therefore we need the most accurate information and the most rigorous, robust systems to ensure that we can put our hands on our hearts and give those assurances. That is why this Government in recent Budgets has provided significant extra sums to the Customs Service.

I just want to finish by focusing in particular on the illicit drugs trade. Through enhanced tracking and surveillance we have seen some real successes in a really insidious aspect of modern culture, I guess. It is something that we have to be constantly wary of. We hear some horrific reports quite regularly about attempts to move drugs through the country. We need to ensure that we can fight that. I will close by pointing out that the amount of precursors to P, that awful methamphetamine, that the Customs Service intercepted last year was enough to manufacture at least 169 kilograms of methamphetamine. That saved us over $68 million of potential harm to the community, and that cannot be measured in just an economic cost; it has to be measured in a human cost. I say well done to everybody who did that, who has achieved it, and I commend these bills to the House.

DENIS O’ROURKE (NZ First) : New Zealand First supports all parts of these bills, the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill. We believe, as does the Government and other parties on behalf of which recent parties have spoken, in the efficient sharing of information at the border and in the effective use of modern technologies that these bills promote. The devil, of course, as is so often the case, is in the detail, and New Zealand First still has some concerns and reservations, especially in relation to the privacy of personal information. One reservation relates to section 282 of the Customs and Excise Act, which empowers, as we know, the sharing of border information between accessing agencies and holder agencies. The definition of those, as set out in the regulations, relates to regulations to be brought down under the Act. The new section 286A in clause 25 of the Customs and Excise Amendment Bill allows regulations to specify “any agency or any class of agencies as an accessing agency:”. That is very wide—very wide indeed. In fact, it could not possibly really be any wider. We wonder eventually just how wide that will be in practice, just what sorts of agencies will be included, and we think that it will give scope for the commercial use of private information, which may not necessarily be what is intended under this bill. We do, of course, accept that the Privacy Commissioner will be involved, and that there are other safeguards such as the chief executive officer of accessing agencies being required to assess and report on impacts on the privacy of individuals. Very good stuff, but will it be effective enough?

Nevertheless, New Zealand First does support the new provisions, as they do allow appropriate agencies, we hope, to share the border information better and more efficiently, and effectively allow those agencies to carry out their duties, and it is sensible to share information at the border and make good use of new technologies. It is a shame that there are not really sufficiently clear limitations on the types of agencies that can access that information, and we think there is insufficient control on what the information may ultimately be used for. It ultimately relies on ministerial discretion as to which agencies will get the information. So a particular concern is that the information may reach the wrong hands and be misused. It may be passed on to others, perhaps unofficially, who should not have that information, and it may not be shared for genuine border security or related reasons.

We note that the Board of Airline Representatives suggested that the agencies should be required to have a border security function, and of course the Customs and Excise Amendment Bill, as it is, is much, much wider than that. But of particular concern to me is that the agency may access and use personal information for private commercial reasons, and there really needed to be more limitation and attention paid to the legislation in that. This is not such that New Zealand First believes we need to oppose the bill, but it is something we would have liked to see improved. I note in particular that new section 286A, relating to matters to be considered by the Minister, could have had something in it such as, for example, whether the personal information accessed might be commercially sensitive or might confer a commercial advantage on the accessing agency. We think it is a shame, really, that provisions of that kind were not included.

Another concern in new section 286A is that it refers to regulations that may prescribe the conditions under which an accessing agency may access border information held by a holding agency, but this does not provide a means for a holding agency to place controls on the way information provided to commercial interests could be used. It does not provide a means for the holder agencies to place controls on the use for commercial purposes; it allows regulations only to prescribe conditions under which accessing agencies can gain access. Again, there could have been a little bit of a narrowing down of the bill’s provisions in those ways, and the lack of specific controls on the use of the information for commercial purposes is the real core of the concern that New Zealand First has in relation to this legislation.

But other than that, we think they are both good bills, and that they will promote efficiency and effectiveness in the way that information is used and shared at the border in New Zealand, and, as I said before, will promote the use of modern technology in an effective way.

I would just like to finalise by saying something about biofuels. New Zealand First supports the provisions of the bills in relation to that. We note with pleasure that the home production of biofuels is exempt, and biofuel blends as well, from licensing requirements if for personal use and not for sale. We also note with satisfaction that there is a similar exemption for home-produced biofuels from excise duty, which is appropriate and consistent with exemptions in other legislation for home-produced tobacco and alcohol.

I have considered the amendments to section 2, however, in the Customs and Excise Amendment Bill, relating to the definition of “biofuel”, and congratulate the work of the Justice and Electoral Committee on those definitions, but I still do not think they are satisfactory. The definition of “biofuel” refers to biomass, and of course there is no definition of biomass, raising the risk that fossil fuels could still be included in the definition, thus defeating various provisions in the Act. However, I do not think it is fatal and I note, for example, that Wikipedia says of the term—

Simon Bridges: That’s where I got my speech from.

DENIS O’ROURKE: —“Biofuel is a type of fuel whose energy is derived from biological carbon fixation. … Although fossil fuels have their origin in ancient carbon fixation,”—and I wish the member opposite would listen, because he might actually learn something if he does—“they are not considered biofuels by the generally accepted definition because they contain carbon that has been ‘out’ of the carbon cycle for a very long time.” So if you accept the definition in Wikipedia, the definition of “biofuel” will be sufficient in the Act, but it would have been preferable for a better definition to be included. Notwithstanding all of those reservations, however, New Zealand First is happy to support both of these bills.

SIMON BRIDGES (National—Tauranga) : I want to congratulate the member Denis O’Rourke on having the honesty that I have never heard in this House before to make clear that he has done what I suspect others have done, and that is to get their speech notes from Wikipedia. So well done to the member.

But I also want, in relation to his speech, to have a mea culpa of sorts, because it was about this time last week, after Denis O’Rourke had spoken—I think on the Search and Surveillance Bill—that I was critical that New Zealand First might be taking the same line that the Greens often do of being holier-than-thou and opposing bills simply for the sake of it. But the member for New Zealand First and, actually, the member for the Greens, come to think of it, have both proved me wrong by supporting the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill, albeit with their reservations.

I think Tim Macindoe said it well when he said that there has been a lot of bunkum spoken in the speeches made in the first, the second, and the third readings of this legislation—a lot of twaddle, to put it frankly—and probably I have been guilty of some of that in the first and second readings as well.

Hon Nathan Guy: No!

SIMON BRIDGES: Well, probably not, but you never know. But the reason for that, I think, is this: this is bland legislation. It is not going to be one of the more exciting pieces of legislation that this House ever debates, and it is actually not very controversial or in any way controversial. But that does not mean that it is not important.

Actually, to the extent that David Parker in his earlier intervention was saying that this is a bit of a poor cousin of a piece of legislation and that we are really fiddling while Rome burns—we should be dealing with economic questions, and so on, and so forth—I disagree with him, because our border security is really fundamental to nearly everything we do economically in this country. Earlier today I had a very graphic illustration of that. I think Labour members and New Zealand First members also met with members of the kiwifruit industry, and if ever there was an example of an industry that relies on the Government to take biosecurity at our borders exceptionally seriously, that is one. It will get through the Pseudomonas syringae pv. Actinidiae bacteria that has blighted particularly the golden kiwifruit crops, but it will not be easy. I come back to the fundamental importance of security at our borders for our No. 1, No. 2, and No. 3 industries in this country and also, as Tim Macindoe said, in relation to other very significant issues like drug control, ensuring that those precursor substances, pseudoephedrine and the like, do not get through our borders.

To repeat my point, this may be bland legislation, it may be legislation that is not going to have people rushing back to the readings to see what was said about it, but nevertheless it is important on a very significant subject. Really, the key phrase here is “information sharing”. What we have done through this legislation is allow the various agencies to link up with each other so that there is not a silo mentality. Again, as Tim Macindoe said, that is really a cross-Government theme at the moment. That does not mean, though, that it is not important. It is fundamentally important when we talk about border control.

In this, the final reading, I say that I wholeheartedly support this legislation on a very important subject, and I commend it to the House.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : I find myself agreeing with the previous speaker, Simon Bridges. That is a rare moment in the House and I will savour it for as long as it lasts; I completely agree with him. The Customs and Excise Amendment Bill and the Biosecurity Amendment Bill are a technical pair of bills. He used the word “bland”. He may impugn the legislation, I think, with that word, but he is absolutely right. These are a technical couple of bills, but nevertheless, because they deal with issues of customs and of biosecurity, they are absolutely fundamental to New Zealand’s security and to New Zealand’s economy.

We are a small country with big borders and we rely heavily on our primary industries, and for those reasons biosecurity needs to be paramount in our thoughts. We need to make sure our biosecurity systems and our biosecurity personnel are resourced to the maximum that they can be, so that they can carry out the work that is required to keep our borders safe and to keep our economy moving. Although it is absolutely true that what these bills really deal with is goods and people coming into the country, biosecurity and that ability to secure our good name internationally are very important for our exports. Of course, trade is absolutely fundamental to our place in the world and what we do. So these are technical bills and reasonably bland, as Mr Bridges said, but they are extremely important.

Again drawing on what Mr Bridges said, what is central to these bills is that they are about information sharing and improving processes. It is important, I think, and some of my colleagues have mentioned this, that we do not put such an over-reliance on process and on technology that we ignore the role of people like biosecurity officers. It was their role that was ignored by the Government in the last term, and I think what Damien O’Connor was alluding to is that you need a system and people—a total system—that is robust and reliable and you cannot reduce the focus on personnel and shift all the responsibility on to technology in some misguided attempt to save costs at our borders. As much as we support this legislation, we recognise that you need total systems to be able to ensure that our borders are safe and robust.

I think there have been some aspects of these bills, particularly the Customs and Excise Amendment Bill, that have been overlooked in this third reading. I am quite happy to admit that I was not on the Justice and Electoral Committee and I am reasonably new—

Simon Bridges: Missed out.

IAIN LEES-GALLOWAY: I did miss out. I am sure it was a very pleasurable experience. I found a couple of things in the legislation that I thought were particularly interesting. The issue of biofuels has been mentioned by some other members. Duty will not be applied to biofuels that are manufactured for personal use, which is an interesting phrase, given that we are talking about customs and some of the other substances that we are trying to keep out of the country, maybe, that people want to have for personal use. But it is good to see that a sensible amendment was made by the select committee there.

I am interested to see that customs officers are now able to use reasonable force to remove people from a customs area, and that it is now going to be an offence to harm a customs dog. I am surprised that those two provisions had to be introduced. The poor beagles have apparently been able to be harmed in some way by some upset traveller as they are arriving at Auckland Airport in the wee small hours of the morning, and the dogs now have some method of defence available to them, which is good news; I am surprised to hear that it is being introduced in this legislation.

What has been completely overlooked is the increase in fines that can be applied to travellers coming into the country—petty offence provisions. It will now be easier for the Customs Service, apparently, to extract a fine from people who commit minor offences, but those fines are being dramatically increased. Minimum fines increase from $50 to $200 and maximum fines increase from $10,000 to $50,000. So whilst we are smoothing the passage through the customs area at the airport, we are dramatically increasing those fines.

This is one bit I am really interested in, and this shows my sort of lack of experience of the passage of the bill through the House. The Customs Service will no longer be required to give any infringer the opportunity to say why they should be exempt from a penalty, which seems to me to be contrary to the laws of natural justice. I am sure this was addressed at the select committee, and if any member who was on the select committee can address that issue and say why that is not contrary to the laws of natural justice, I would be interested to hear what they have to say. Counter to that, interestingly, the infringer will now have to pay the fine up front, and if their case is either reviewed or appealed, the fine will be refunded. The bill introduces a system of bargaining where the infringer can admit an offence in writing and pay a fine of about a third of what a court might order. So it facilitates someone who is accused of a customs offence to admit their offence, but it actually takes away their ability to offer some defence up front for their infringing, which is an interesting development in the bill. As someone who is new to it, I found that particularly strange.

There are some costs associated with this bill, as well. Although everybody has been talking about how this will improve processes, how this is going to be good for travellers, and how this is going to make our borders safer and more robust, there are some costs associated with it. Industry sources have estimated that the cost of new information-sharing systems could be around $200 million. The Government has conceded that it expects to recover at least some of those development costs from the expanded import transaction fees. So people who are bringing goods into the country are going to face higher costs as a result of this legislation. As David Parker said, we should be focusing on trying to drive our exports, not our imports, so perhaps increased fees for people importing goods is not such a bad thing. But a country that is reliant on trade wants to be careful not to apply too many, I suppose, hidden tariffs to people who are trying to import goods into the country, lest we be faced with a similar approach to additional costs and tariffs from the countries that we are trying to send our goods into.

As I said, these bills are an important part of ensuring that we have strong borders. Biosecurity is such an important part of ensuring that the New Zealand economy is resilient. The examples of Pseudomonas syringae pv. Actinidiae, the varroa mite, and the concerns that the pork industry has over the possible introduction of porcine reproductive and respiratory syndrome in the future with the loosening of pork importation rules are all part of this total system, of which these bills are a small part. We need to be constantly vigilant and aware of what is going on across the whole system. The relaxing of rules that allow less stringent treatment of pork before it comes into the country, the laying off of biosecurity officers—those things actually undermine what these bills are trying to do. So let us be honest: it is not all roses. These bills are good, but there are other things going on as well that we need to be vigilant about. On these bills, we do support them.

ALFRED NGARO (National) : I stand in support of the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill in their third reading. I really do want to commend the Justice and Electoral Committee for the commendable work it has done to get this legislation to this stage. This is especially shown by the fact that there is widespread support right across the whole of Government here and inside the House tonight. It is great to hear that support. These bills make improvements that are required to support the sharing of information, and key to that is that border management is dependent on the effective sharing of information amongst agencies.

One issue in which I am particularly interested is that National has focused on preventing the importing of drugs and precursors and other illegal activity at the border. P is destroying families and communities in all areas of New Zealand, and the people who import it must be stopped. Budget 2010 shows that $5.9 million was invested into the Customs Service over the next 2 years to fight the illicit drugs trade through enhanced tracking and surveillance. Tools of this kind are vital to clamp down on criminal gangs and the methamphetamine trade. The Customs Service is already doing a great job, but this continues to help give the Customs Service the conditions it needs to keep busting drug importers. The amount of precursors to P that customs officers intercepted in 2011 was enough to manufacture at least 169 kilograms of methamphetamine, saving an estimated $68.3 million of potential harm to our communities.

There is enough that has been said tonight about the legislation. It is in its third reading. We do support the legislation. The great thing about this is that the Government has made a $75.9 million investment in new systems that can deliver a real change in border management. The member across the House talked about the importance of not being too reliant upon information technology systems, but the issue around information technology failure is often to do with human behaviour rather than the information technology itself. I think a combination of a good information technology system with good training makes a real difference to these bills and also to the industry, as well. So I stand in support of these bills tonight. Thank you.

Dr DAVID CLARK (Labour—Dunedin North) : I stand to support the Customs and Excise Amendment Bill. Labour supports this bill. The bill stands in the name of the Hon Maurice Williamson, although it is rapidly becoming known as the “Bland Bridges Bill”, it seems, perhaps unfairly because this is a worthy bill—a very worthy bill. That is why we support it. We support the principle of ensuring that we have a strong Customs Service and that our biosecurity is strong in New Zealand to protect our industries here and to ensure that things function as they ought.

The sharing of information about goods and people as they arrive in and depart from New Zealand is important to this, and it is pleasing to see that the Justice and Electoral Committee substantially redrafted the Government’s regulation-making framework, requiring the Minister to consult widely on information sharing including with the Privacy Commissioner, affected agencies, and the public. The bill, it should be noted as well, provides the Privacy Commissioner with an obligation to review the department’s data-sharing capabilities after 5 years. That seems a sensible provision, and it alludes to the good work that can happen in select committees to make sure that sensible precautions are taken to ensure that the bill does what it says it should do. So I congratulate those people who worked in the select committee on this matter. As Mr Bridges pointed out earlier, it is sometimes these more bland bills that achieve useful things and without controversy, and we should celebrate the unity across the House on these matters.

Simon Bridges: The aroha.

Dr DAVID CLARK: The aroha.

The bill makes a number of amendments and it is interesting to consider what would have happened if these did not happen. Householders who produce their own biofuels will be exempt from the duty, and that is good to see. I imagine that the intention here is that those who make biofuels at home will be encouraged to do that. The incentive is set up so that we have a more sustainable New Zealand over the longer term, bit by bit, through these small measures.

It is also interesting to note there is an amendment that customs officers will be able to use reasonable force to remove people from the customs area. Presumably, that amendment was as opposed to the other option that might have been considered—that customs officers were able to use unreasonable force—and, surely, that is not a good idea.

Another of the other smaller amendments here that I note is that goods designed to facilitate a crime of dishonesty like card skimmers are banned, and, as my colleague noted just a short time ago, it will be an offence to harm a customs dog. This is something that we worry a little bit less about in Dunedin, as it happens. At Dunedin International Airport, I have yet to see a beagle, but I am comforted to know that those customs dogs will be protected when they visit.

Simon Bridges: They’re undercover.

Dr DAVID CLARK: They are very secretive customs dogs doing their duty alongside those others who are doing their duties to protect our borders.

It is interesting here also that goods in multiple shipments can be classified as if they were in a single shipment. Again, this appears to be an efficiency measure—another sensible step taken in this bill. Likewise, in respect of the ability to define when an item of post has been delivered to a customs officer, not having this definition might have been problematic.

Likewise, finally, on the other amendments, providing a method of calculating duty on imported goods that are soon to be used and exported is also a helpful provision to have in the bill. Not providing a method of calculating duty on imported goods that are soon to be used and exported would have meant the bill was a disaster.

The increasing of fines is something that has also been commented on, and it seems a sensible measure.

KEVIN HAGUE (Green) : It is a pleasure to take a brief call on the Customs and Excise Amendment Bill and Biosecurity Amendment Bill. As returning members to this House are aware, biosecurity is a bit of a passion of mine. We are an island nation; our biodiversity in this nation is entirely unique in the world. If we lose it here, we lose it everywhere in the world, and thus we have a duty as custodians—not only for that magnificent natural heritage for our own sakes, and for its own sake, but also on behalf of the world—to look after that heritage. But that unique biodiversity that New Zealanders love, and want to protect, is also crucially important to our economy. Tourism is our No. 1 industry, and the tourists come here because of that natural biodiversity. So the stakes around biodiversity and protecting it are extraordinarily high. Likewise, our other major industries tend to be trading industries, and, in particular, trading of primary products. Those industries, too, are extraordinarily vulnerable to imported threats. So getting biosecurity right is fundamentally important to our nation and to our economy.

In the debates on a succession of biosecurity bills that the Government progressed through the last term of Parliament, I spoke about a couple of major things. One was the level of risk that was posed by getting biosecurity wrong, and the other was around the changes that were being made, particularly at the border—as we are addressing in this bill—that we were also getting wrong as a nation. The risks are extraordinary. If we think about a single piece of fruit infected with fruit fly coming into this country, the cost of that single piece of fruit is estimated to be $800 million in the first year alone, and to cost 5,000 jobs in the Bay of Plenty alone. We are talking very high stakes—foot-and-mouth higher still—and yet our border measures are not keeping pace with those threats. They are not proportional to those threats. The latest number I have is from 2009.

Approaching 400,000 loaded containers coming into New Zealand each year are not inspected at the border—400,000. That is an extraordinarily cavalier approach to something that potentially has such major impacts on our country and on our economy, yet the Government’s direction around that interface between customs and biosecurity has been going in the wrong direction. Biosecurity is inevitably a process. It starts in the country of origin, it comes through border control measures, and it progresses into post-border mechanisms in the event of incursions. All of that is important, but what the Government has been doing has been weakening the bit that goes around the border, which is entirely the wrong thing to do. We have seen the budget cuts, we have seen the reduction in staff numbers in biosecurity, and we have seen the adoption of an approach in biosecurity based on risk profiling, which means fewer people actually being checked. When that was trialled, in fact, those who were not profiled for inspection were found to be bringing in significant threats. So the direction of travel is wrong.

Thankfully, this bill is not fundamentally enacting that machinery, and we are happy to support it—for the dogs alone; that is enough for me. One last caution: the main thing that this bill does is facilitate information sharing. In the last 2 weeks we have seen a State agency that is fundamentally concerned with the confidentiality of information getting it entirely wrong. These two agencies need to really step up their game to get it right.

KANWALJIT SINGH BAKSHI (National) : It is my privilege to participate in the third reading of the Customs and Excise Amendment Bill and the Biosecurity Amendment Bill, otherwise known as the “JBMS” legislation. This omnibus legislation expands the range of requirements to maintain the sharing of information across the border security agencies. To this end, the Government is investing $75 million in a new system to administer border management.

There are three categories of amendment in this legislation, which is amending the Customs and Excise Act and the Biosecurity Act. Information sharing between the New Zealand Customs Service and other agencies that are involved in border security is vital for them to ensure that our borders are protected effectively. An example of the good use of technology is the use of SmartGate, which uses a computer electronic system to process arrivals and departures. The Joint Border Management System, together with the Customs Service, has developed this new system.

There are enormous risks to New Zealand associated with harmful pests and diseases. We need to have a system that is more responsive to the changes, is cost-effective for the users, and involves everybody doing their bit to manage the risk. Our aim is to get the balance right between managing biosecurity risks and minimising any unnecessary impact on trade and travel. We need to protect our borders. The new Joint Border Management System will bring the Customs Service and the MAF Biosecurity processes together under the same system, providing improved security at New Zealand’s border.

Another major problem affecting our country is the illegal importation of prohibited drugs, especially for the trade in methamphetamine. The tracking of illegal drugs through the new Joint Border Management System is essential, to prevent these drugs from making it on to our streets and thereby giving criminal gangs the ability to distribute these drugs into the neighbourhoods of our country. The Government is providing $5.9 million to the Customs Service over the next 2 years to fight the illicit drugs trade by intercepting these drugs before they reach our borders.

In conclusion, the National Government intends to do all in its power to throttle the illegal trade in drugs to New Zealand by using the effective sharing of information among the agencies operating at the border. I commend this bill to the House.

• Bills read a third time.

Hon JOHN BANKS (Associate Minister of Commerce) : I could not help but notice that this particular bill, the Trade (Safeguard Measures) Bill, was referred to the Foreign Affairs, Defence and Trade Committee on 11 March 2009. Little would the members of that committee, chaired by the first-class member of Parliament John Hayes, have appreciated that some 3 years later I would be in the House, promoting this bill. Now—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry, but the Minister must move that the bill be read a second time, so—

Hon JOHN BANKS: Oh yeah, well, I move that the bill be read a second time.

The ASSISTANT SPEAKER (Lindsay Tisch): OK. The protocol must be that when the Minister starts, he moves that it be read a second time. The Minister might like to start again. I will start the clock again, so we get it right.

Hon JOHN BANKS: Oh, that is very generous, Mr Assistant Speaker. I move, That the Trade (Safeguard Measures) Bill be now read a second time. The year 2009 was some time ago, but this is an important bill. The closing date for submissions was 14 April 2009, and we are now in March 2012. So the National Government has been waiting for me to arrive, via the people of Epsom, for all of these years to see this bill—“Can-do Banksy”—promoted in this Parliament tonight, because it is a critical piece of legislation, particularly for the productive tradable sector of the New Zealand economy. I want to thank John Hayes, the chairman of that select committee at the time, for the great stewardship of this bill.

In the commentary to the Trade (Safeguard Measures) Bill it says: “The Trade (Safeguard Measures) Bill seeks to repeal the Temporary Safeguard Authorities Act 1987”—and I was in Parliament in 1987 when that bill was passed through with much more urgency; it had been only 5 years in the making, not 4, so this bill is well overdue—“and to implement a new safeguard regime for New Zealand that is consistent with the World Trade Organisation’s rules and promotes efficient, transparent, and objective investigative and decision-making processes” for safeguards. In case people do not quite know what safeguards are, they are emergency measures applied at the New Zealand border: any duty and any other facilitation to make sure that a domestic industry exposed to competition from increased imports is well and truly looked after. This country does not mind competitive trading, but it does not like unfair trading, and in the context of this bill and in the context of the trade agreements that this country is entering into all over the place, it is important that this measure comes through Parliament.

What I was going to say about the bill is something rather significant, and it is this. It repeals the Temporary Safeguard Authorities Act. The bill proposes four major changes to New Zealand’s safeguards regime. They are quite technical, and they need to be narrated here tonight in Parliament for the record.

Firstly, safeguard investigations will be undertaken by the Ministry of Economic Development, rather than by appointed temporary safeguard authorities. I think that is important and that has helped streamline these measures. This will align the conduct of safeguard investigations with other trade remedy investigations that are carried out by that ministry—that is, the Ministry of Economic Development. It will also allow the expertise of the ministry to be fully utilised when carrying out safeguard investigations, to ensure the efficient use of resources.

Secondly, the time frame to complete an investigation will be extended from the present 30 working days to 75 working days, or 85 working days if provisional duties are requested at the border. The extension of the time frame also allows sufficient time to undertake a high-quality investigation to make sure that fairness is delivered. This will reduce the risk of any safeguard measure taken by New Zealand being overturned through the World Trade Organization dispute settlement process—and we have seen that work against sovereign States on many, many occasions, to the detriment of those countries.

Thirdly, the Minister of Commerce will be authorised to impose a provisional safeguard duty in order to provide protection to a domestic industry while an investigation is being completed. I think that mechanism is also very useful and serves as a deterrent to unfair traders—that at the border we have got aligned mechanisms in place for dealing with unfair competition at the border before the arrival, with money being put up front so that that is secured. The ability of the Minister to impose a provisional duty will also allow swift action to be taken where necessary, and will ensure that an industry is not disadvantaged by the extension of the time frame to complete a complex negotiation and investigation. So the Minister of Commerce will be authorised to impose a safeguard duty, to allow a quick and efficient means for taking safeguard action at the border.

Lastly, as a trading nation—this is important—the bill introduces guidelines for determining whether the imposition of a safeguard measure is in the public interest.

The bill also includes a number of technical matters aimed at improving the efficiency of applications and investigation processes, and ensuring conformity with World Trade Organization rules. As we go forward negotiating more free-trade agreements with other sovereign States, we need to have these absolutely aligned with World Trade Organization rules, so that there is no opportunity for going to the World Trade Organization and having one of these overturned.The ACT Party believes that the more we can liberate trade between our nation and the rest of the world, the more our exporters will flourish—and exports are the key to this country’s future, particularly farming exports. The World Trade Organization leads the way in promoting multilateral free trade and it is in our interest to ensure our legislation aligns with its rules, and this is what this bill does.

Following the first reading of the bill, the Foreign Affairs, Defence and Trade Committee has recommended a number of amendments. These amendments do not alter the original policy intention outlined in the philosophy statement on the front page of the bill; these amendments simply strengthen and clarify the bill. Overall, submitters were supportive of the bill and recommended that it proceed. If I remember rightly, there were five submitters. Why it has taken 4 years to come through this House and why you have waited for the new member for Epsom to be driving this bill, I do not know.

I would like now to outline the most significant changes recommended by the committee. The committee has recommended the inclusion of an overview clause to explain that safeguard measures are one of several trade remedies available, and to explain the difference between them. This is a useful addition to the bill. It will assist in guiding potential users to the most appropriate form of remedy, to fast track remedies. The committee identified a number of provisions in the bill that granted the Minister of Commerce the discretion to exercise power—and by the way, I am enjoying working with the new Minister of Commerce, the Hon Craig Foss. He is well over these issues, he clearly understands the importance of them, and he has given me the opportunity to move things along with my portfolio responsibilities around commerce.

Terminating or reducing the provisional or final safeguard duty—that is what it includes—are the powers the Minister is given, and also refunding provisional duties, and exempting certain countries from safeguard measures. The bill included in the definition of “safeguard measure” any other action the Minister considers appropriate. So the Minister in this context is very important, and this bill gives the Minister of Commerce quite a lot of authority, both legal and moral authority, in the new legal authorities as defined by the bill. It updates the 1987 Act, which was simply inadequate circa 2012 in protecting New Zealand industry and commerce against unfair competition and in delivering remedies at the border.

This is what this bill does, and I congratulate the select committee. It is not riveting stuff for the select committee, but it is important stuff for the future of this nation. I would like to note that at the Committee of the whole House I will be authorising a Supplementary Order Paper to make minor technical amendments to the bill, as recommended by parliamentary counsel.

Finally, I would like to thank again the members of the committee for their thorough examination of this bill. It is well designed. The trade policies allow New Zealand firms to operate in a more predictable environment. These policies play an important role in providing New Zealand industries with confidence to invest, confidence to grow, confidence to employ people, and, more important, confidence that they can compete on the world stage, which is made uncompetitive by some trading nations that would otherwise take advantage of this small State. That is what this bill does. It aligns all of the protocols with the World Trade Organization rules. I recommend the bill to the House.

Hon MARYAN STREET (Labour) : I am delighted to rise and speak to the Trade (Safeguard Measures) Bill, having been one of the people on the Foreign Affairs, Defence and Trade Committee who, at the time, considered this measure. The member who has just resumed his seat, the Minister for Regulatory Reform, who was standing this evening in his capacity as Associate Minister of Commerce, was right to draw attention to the fact that this bill was first of all introduced to the House in September 2008. It proceeded to the select committee on 11 March 2009, the closing date for submissions was 14 April 2009, and we on that Foreign Affairs, Defence and Trade Committee received five submissions from interested groups and individuals—five submissions. So it was reported back quite promptly after its referral to the committee in the early days of this Government’s first term, and here we are, an election later, around about the same time—11 March 2009 was when it was referred to the committee—3 years almost to the day later, and it is finally appearing in front of the House.

It is quite extraordinary that this Trade (Safeguard Measures) Bill should have languished for so long on the Order Paper. There is no excuse for it, apart from the shambling, bumbling, incompetent management of the House that we have seen ever since this Government took office. That has only been underscored by the ridiculous speech we have just had to endure from the Minister who was moving it—or forgot to move it—for its second reading. So all of the responsibility for where this piece of legislation has finally arrived lies with the incompetent management of the House, which this Government is famous for. It is just lucky that very few members of the public actually realise what a bad job it makes of running this House, because if more people knew about it, they would be scandalised that the country and this Chamber could be run so incompetently. But there we have it.

When we considered this bill at the Foreign Affairs, Defence and Trade Committee, it was clear that it was a technical bill and it had a limited appeal outside of the select committee, and hence attracted only five submissions. But I think there is always a good reason in this House to air some of the principles by which this country’s trading relationships are governed. I think this is another opportunity to do that, and I welcome that opportunity.

First of all, this bill clearly aligns us with World Trade Organization practice, as the Minister so meticulously read from his notes a moment ago. It makes us consistent with World Trade Organization regimes, and there are some reasons why that is a good thing. These reasons are not universally agreed with across this House, so it is worth traversing them, I think. In terms of the trade portfolio, New Zealand has enjoyed for quite some time now a bipartisan approach, and that is right and proper. The major parties, the National Party and the Labour Party, have for many years now agreed on a bipartisan approach to trade, and there are very good reasons for that. We are too small a country, and we have too short an electoral cycle, to allow our trading policy to be changed, potentially, every 3 years. There is no good purpose served for foreign direct investors, whom we welcome, or for our exporters if our trading arrangements and the policy framework that our trading arrangements are set by are changed, potentially, every 3 years.

So it has been a sensible approach of both Labour and National to adopt a bipartisan approach to trade. I support that. When I had the trade portfolio in Opposition in the last term I supported that, and I was pleased to accompany the Minister of Trade on several occasions when he was signing free-trade agreements. He invited me to accompany him on the basis of our bipartisan approach. His predecessor, the Hon Phil Goff, extended the same courtesy to him when he was in Opposition—when the Minister now, Tim Groser, was in Opposition. That is a good thing. That allows for policy stability, and that is important for not only the productive sector of our economy but the relationships we have with foreign direct investors and the security that they can rely on in terms of our policy settings, regardless of whoever is the Government.

So this bill was no trouble at the select committee. It is, in fact, a slightly modernising bill, but, who knows, the rules can change in the future, as well. But in this sense it is modernising. It actually hands over to some of the expertise that we have in the Ministry of Economic Development—or whatever it was before Steven Joyce got hold of it; I hope those people of expertise are still there—the ability to examine safeguard measures to ensure that New Zealand is adequately protected in its trading arrangements: that at our borders, safeguard measures are applied that prevent dumping, and that prevent illegal trading arrangements that would undermine and disadvantage New Zealand. There are ways of coping with these things if we think they have happened, and they lie in the disputes procedures in the World Trade Organization system. Those disputes procedures are referred to here, as well.

This bill, although it will not set the world alight, at least will not bring our trading relationships to a close. I think that it should progress, but let the Government not be under any illusion that we are impressed with its ability to bring this bill, which was ready 3 years ago, to the House at this late stage. A little more attention to detail is helpful when the parliamentary programme and the Order Paper are being devised and are being constructed. Surely the Ministers—the Minister of Trade in particular, but also the Minister of Commerce—have been warned about this by officials. I am sure officials would have said: “Ministers, this bill needs to proceed. We are getting seriously behind the play with World Trade Organization rules and regimes, and it is time to bring this into order.” This bill does that and I commend it to the House. Thank you.

Dr PAUL HUTCHISON (National—Hunua) : It is a pleasure to speak on the Trade (Safeguard Measures) Bill. I too want to congratulate the excellent Associate Minister of Commerce, the Hon John Banks, on his moving the second reading of the bill in this timely fashion.

It was intriguing to hear the Hon Maryan Street make some comment about how long it had taken to bring this bill in. But I note that in actual fact it was introduced under a Labour Government in 2008. After 9 long—what did she say—shambling, bumbling, incompetent years of management, finally a good National Government was able to take over this bill, and now here we are today bringing it through the second reading.

This indeed is a technical bill, and indeed it is important to New Zealand. I can think of my own electorate, Hunua, which is responsible for a great deal of exports—in particular, producer goods such as tomatoes, such as garlic, such as onions. They are all good for you. They are all good for growing bonny babies. These are the sorts of things that can be dumped, and have been dumped, in New Zealand, and that is what this bill is all about.

It is important to point out that by definition safeguard measures are emergency measures applied at the border, usually in the form of a duty, to temporarily protect a domestic industry from a surge in imported goods. As I think the Hon Maryan Street said, these safeguards conform with World Trade Organization rules, and therefore are appropriate for safeguarding our very important international exports.

The other point I wanted to note was that the Hon John Banks had commended the Foreign Affairs, Defence and Trade Committee for its excellent work, and, in particular, the leadership of the honourable John Hayes. Mr Banks did ask why the bill had waited for him in order for it to come into the House. Well, indeed, this is the Hon John Banks’ second coming and it is fitting and nice that he is able to bring in this technical bill. It is something that is very much consistent with one of the issues that is dear to John Banks’ heart, and that is, of course, basic economic growth of the New Zealand economy. Indeed, it is one of the very, very important parts of the framework that are going to bring that about.

After all, over the last few years New Zealand under National—and, I must say, under the previous Labour Government—has forged a variety of free-trade agreements. In the next 3 years we will be leading at least 28 high-level missions to Asian countries to expand trade and business links. We will also continue to pursue high-quality trade agreements, including the Trans-Pacific Partnership and bilateral free-trade agreements. Once again, whenever we enter into these free-trade agreements there is always the problem of dumping occurring. That is why, technically, this bill is so important.

Hon Member: Rev it up.

Dr PAUL HUTCHISON: Rev it up? Well, you see, over on that side, we had those 9 long—what did she call them—shambling, bumbling, incompetent years of management, and in those days of very, very dire concern for New Zealand, when there was a world economic crisis, how did Labour handle it? Absolutely abysmally.

Here we are today, fortunately, bringing in this highly constructive technical bill. As John Banks pointed out, the bill prevents New Zealand from receiving a rapid influx of cheap imports. It allows time for New Zealand businesses to bring themselves up to the level of international competitiveness required to stay afloat. As a temporary measure, New Zealand consumers will continue to have the benefit of the free-trade principles that underpin New Zealand’s trading environment. It can also have a positive effect on investment, as it can help balance economic swings so that long-term investments may be safer. Finally, an effective safeguard regime can help build support for future trade liberalisation amongst domestic manufacturers that compete with imported trade. So I am very glad to commend this bill to the House.

Hon CLAYTON COSGROVE (Labour) : To reiterate my colleague Maryan Street’s sentiments, the Trade (Safeguard Measures) Bill is a bipartisan bill; I took over from Maryan as our trade spokesperson. Traditionally, the bill has always been a bipartisan issue. That is a principle that I will adhere to, but can I make a couple of observations. Mr Banks has come into the House tonight—

Hon Nathan Guy: He couldn’t resist it.

Hon CLAYTON COSGROVE: Oh, absolutely! Well, for some reason this is the second time in 2 weeks where I have followed Mr Banks in a speech, and the ammunition and fodder is just too good to resist, in that somebody left the crypt door slightly ajar, yet again, and the old dinosaur came out and decided that he would take credit for everybody else’s work. The interesting point is this: he made a far better effort than he did almost a week ago tonight, when his first salvo in his professional performance as a Minister was to introduce a piece of legislation that I will not go into in any detail about at all, because it is not worth it, but just suffice to say that the bill repealed 31 pieces of legislation that were spent and effectively repealed anyway. That was an absolute doozy, so we have made progress, I say; we have made progress tonight. A week later Mr Banks has gone back to the crypt, dusted off a few old books and a few bits and pieces, and somebody said: “Banksy,”—to quote him—“we’d better stick you out on a pole and give you a bill to go back into the House that has some degree of substance in it.”

I have to say, in all seriousness, that this bill does have a high degree of substance. This may not be the sexiest piece of legislation to come before this House, but it is vitally important, and I give credit to the last National speaker, actually, Dr Paul Hutchison, and my colleague for highlighting the safeguards and the necessity of this bill. It is a bill of substance. That answers another question as to why it did languish since 2009. Yes, it was introduced by a Labour Government in September 2008. Colleagues on the other side might recall they then won an election and there was a change of administration a couple of months later, but the reason this bill of substance languished was that it actually had substance in it. It was not a political slogan, it was not the usual sort of National Party slipshod, like the Minister of Justice’s old sort of “lock ‘em up, throw away the key”—all good populist stuff that you could rev a few people up in the provinces over. No, no, this probably does not have a lot of political capital that you can use to get a 5, 6, or 7-second grab on the 6 o’clock news and beat up on somebody. No, this is a bill of substance. This is not the sort of hollow bill that we normally get: normally a couple of pages long, a good slogan on the front, a political pamphlet, but actually it does nothing.

This is a bill of substance, and that is why, of course, it languished for 3 years, because they just wanted to get all the propaganda out and all the sort of hollowed-out stuff—the political pamphlets and the slogans. This is an important piece of legislation. Mr Banks would do well not to trivialise it, because what it does do is it brings us in line and makes us consistent with the World Trade Organization. I know there are members in this House, and in other places, who deride the World Trade Organization. Mr Banks made one point—we all sat up and took notice because it was the only valid point he has made in his last two contributions in the Parliament—in that the rules-based system of the World Trade Organization is indeed important. It is important because those countries that are vulnerable now have a regime where they can take disputes to an institution internationally, have their case heard, and have judgments made. Of course, we were, after 100 years, colleagues, I think, a recipient of that regime in the Australian apples case—

Hon Maryan Street: 97 years.

Hon CLAYTON COSGROVE: Ninety-seven years, my colleague says. I believe that the Aussies, our brothers and sisters over there—our best mates whether we like them or not—are still resisting our apples, but we had a judgment. We could go to an international institution, make our case, have it heard, and have a valid decision made. That is why a rules-based system, I would argue, is important, rather than those who deride the World Trade Organization as some sort of unrepresentative body, even though it is represented by ambassadors who in the vast majority of cases are appointed by democratically elected Governments and take their positions and their decisions from capitals made up of democratically elected Governments. So I support this bill.

• Debate interrupted.