SUE BRADFORD (Green) : I move, That the Minimum Wage (Abolition of Age Discrimination) Amendment Bill be now read a second time. It is with really mixed feelings that I speak to the second reading of my youth wages bill this afternoon. I have mixed feelings because, on the one hand, it is a significant step to get any member’s bill through its first reading and the select committee process, and I welcome the statement of the Transport and Industrial Relations Committee in the commentary on the bill that the majority of members believe the premise on which my bill is based is right. On the other hand, however, it is clear to all that the bill that has emerged from the select committee bears very little resemblance to the bill that went into it.

The fundamental point of my original bill was to remove discrimination based on age from our minimum wage law, with particular reference to 16 and 17-year-old workers. However, the bill as amended, which we are debating here this afternoon, does not do that. It continues age discrimination for young workers, albeit in lesser terms. Even the short title of the bill has been amended by the committee to reflect the fact that this is no longer a bill to remove discrimination; it is, instead, a bill that will allow a new form of discrimination. If we read clause 4 of the amended bill carefully, we see that it continues to allow for minimum wages to be set on the basis of age, and that it actually adds a further category of age discrimination, in the form of the new entrants rate. This is certainly no longer an abolition of age discrimination bill.

What is this new entrants rate likely to be, and how long will it apply for? The amended bill states that the new entrants rate—something horribly redolent of people aged 5 starting school—must not be less than 80 percent of any rate that applies to workers who are 18 years of age. But the bill itself is silent as to the length of operation of this new entrants rate. Instead, the select committee has chosen to make a recommendation to the Minister of Labour that she or he consider introducing a new entrants minimum rate that applies for the first 200 hours of employment on or after an employee’s birthday, and that that rate would not apply to 16 and 17-year-olds employed in supervisory positions. In its current form we are, therefore, being asked to hand a blank cheque to the current Minister of Labour and—and this is more worrying—to a future Minister of Labour to set the length of the new entrants rate by regulation as she or he sees fit, or not to have a new entrants rate at all and simply continue with complete age-based discrimination, as currently occurs.

The main argument that supporters of the new 200 hours new entrants rate are putting up is that young people aged 16 and 17 who are entering the workforce for the first time do not have the basic work skills or experience needed for the job and, therefore, need more supervision and training than workers aged 18 and over. This argument was backed by a handful of employer submitters, including one from just south of Auckland who rather famously offered the committee the opinion that it took her some time to train her young workers to smile correctly for the customers. When I looked around the committee room that day and saw the many broad, natural smiles on the faces of the young Pasifika, Māori, and Pākehā workers from Manukau and the rather dour looks gracing the countenances of a number of somewhat more mature submitters, I could not help feeling that the training in how to smile correctly might be of benefit if it happened quite the other way around.

This argument that young workers need orientation and training when they start a new job does, of course, have a basis in reality, but that reality is the same for anyone of any age who starts a new job. All of us take time to learn the job itself, and to learn the kawa of the particular workplace, and the annoying little requirements essential to survival there. In fact, when we are young our brains are sharper and our ability to learn and adapt is somewhat greater than when we are older. Even if one supports the idea of the new entrants rate, surely 1 month would be long enough, rather than 3, 6, or even 9 months.

The National Distribution Union, one of the main unions representing young workers, says: “Our numbers show that 50 percent of 16 and 17 year olds would take 5 months or more to qualify for the full minimum wage. Some of them will have turned 18 long before that. Others will have had many more than 200 hours work experience before turning 16 but that isn’t going to be counted.” Indeed, many young people these days have already been in the workforce for a considerable period before they even turn 16. As most members of Parliament will know from their own experience with family members and friends, a lot of young people have been working part-time in the local shop, petrol station, takeaway, or elsewhere for some months if not years by the time they reach their 16th birthday. To then suppose that these experienced workers should be plunged back on to a lower wage if they start a new job after their 16th birthday shows contempt for the reality of the time and effort they have already put in to adapting as successful participants in the New Zealand workforce. It is simply a continuation of age-based discrimination by other means and is quite the opposite of what the original bill intended.

I was very impressed with the level and quality of most of the submissions we heard at the select committee, even the ones I did not agree with. A majority of submissions stated that all workers should receive equal pay for equal work, regardless of age. I want especially to thank the Human Rights Commission, the Human Rights Foundation, and the Children’s Commissioner who, along with a number of others, called for the repeal of section 30 of the Human Rights Act, which entitles employers to pay lower wages to those aged under 20 years. Unfortunately, the committee did not give adequate consideration, I feel, to these points nor to our responsibilities under international human rights or International Labour Organization conventions.

Instead, it was swayed more by the anecdotal accounts of how the abolition of youth rates could act as a barrier to young people obtaining work or the negative effect it would have on young people’s education by encouraging them to leave school too early for so-called high-paying adult minimum wage jobs. These issues were mentioned in the National Party minority view, and, I understand were also behind the Labour and New Zealand First members of the committee sponsoring the amendments that have come through. These two concerns completely miss the point and are simply used as excuses to continue the discrimination against young people.

Firstly, most young workers aged 16 and 17 are actually in school or in other training. An increase in the minimum youth wage to the adult rate will have a positive effect for them, not negative. It will mean they will be able to work less and study more for the same income. Will young people really be tempted away from school or other training into full-time work by the prospect of earning the princely sum of $450 a week—the adult minimum wage? I do not think so. If it is good enough for us to have stopped using these so-called positive wage discrimination arguments for Māori and women, why should we be using them for young people?

Then there is the issue of compliance costs. To implement a new entrants form of wage-based discrimination in the way that the amended bill proposes, introduces yet more compliance costs for employers. A number of employers have already got rid of, or would like to get rid of, youth rates altogether. What stops others from doing this is the ability of their competitors down the road to continue to pay youth rates and therefore have a lower cost structure.

This brings me, finally, to the elephant that sat in the select committee room right throughout the hearings—that of human rights. I am referring to legal advice to the Attorney-General on the consistency of my bill with the New Zealand Bill of Rights Act 1990. That advice stated: “it is our view that the principal Act does not authorise the Governor-General to make orders that discriminate in a way that is prohibited by the Bill of Rights Act … Section 6 of the Bill of Rights Act requires that wherever an enactment can be given a meaning that is consistent with the rights and freedoms contained in the Bill of Rights Act, that meaning must be preferred to any other meaning. … Based on this analysis the Bill appears superfluous.” What that opinion means is that the regulations allowing for youth rates that have been promulgated for many years under the Minimum Wage Act could be ultra vires when the principal Act is interpreted in relation to the New Zealand Bill of Rights Act.

My gravest concern with the bill as reported back is that it adds new forms of discrimination rather than removing them. We should not be passing law that is inconsistent with the New Zealand Bill of Rights Act. The bill still needs a lot of work, and there is still time to do this work before, and when, it reaches the Committee stage. I urge all parties to vote for the second reading to enable us, during the Committee stage, to undertake the work to bring this bill back more closely to its original kaupapa.

KATE WILKINSON (National) : In rising to speak to the second reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, it is interesting to note that when this bill was originally introduced by the honourable member Sue Bradford it was quite simply to get rid of the youth rate. It then morphed into a bill that introduced a new-entrants minimum rate that would apply for the first 200 hours of employment for 16 to 17-year-olds, during which time they would be paid 80 percent of the adult minimum wage—that is, the youth rate—and after which they would be paid the adult minimum wage. The question is whether the bill is better or worse than before it went to the select committee. Who knows? Media reports over the issue originally suggested that the bill itself may be pulled by the very author of the bill because it has been so altered since its original draft that it is now being opposed.

I would like to make one comment in relation to what the honourable member Sue Bradford has stated, and that is in relation to age-based legislation and whether it is discriminatory. The wonderful irony of that argument is that if it is age-based legislation—and it is age-based legislation—and if it is discriminatory, which we do not believe it is, and if it does comply with the New Zealand Bill of Rights Act, then it would be discriminatory and still age-based whether the age was 12, 16, 18, or 20. So whatever the age limit, it would, based on that argument, still be age-based legislation, and all this bill does is increase that age to 18.

Can I say at the outset that whatever one’s view on this, it is important to state that National believes that all workers, whatever their age, should be valued for the work they perform. They should receive fair pay for a fair day’s work. We all want a high-wage economy, but that is not achieved by propping it up by artificial and arbitrary levels. It is also important when considering passing legislation that some consideration is actually given to the consequences it will have, to the problem it is supposed to be addressing, to the solution it proposes, and to whether that solution will work, may work, or may in fact do the exact opposite of what it is trying to achieve.

We believe that this bill will not work for youths or for employers, for a number of reasons. We heard submissions that many employers already pay above the youth minimum wage. In fact, some employers pay their staff above the adult minimum wage because they recognise that the value staff provide warrants a higher level of pay. Secondly, in some cases youths may not be able to provide the same value to an employer as older employees, so the minimum rate of pay provided to them should be set at a lower rate than for those older than they are; they are not doing the same job.

There may be youths who suffer because in future employers will have to factor in a full wage bill for youths and may choose not to employ them at all because of this. This may be a disincentive to employing youth in the first place.

Dr Wayne Mapp: A perverse incentive.

KATE WILKINSON: It is a perverse incentive. Increasing the minimum wage that a 16 or 17-year-old can earn creates an added perverse incentive for youths to leave school. We appreciate that there is a 200-hour threshold and that the initial reduced take-home pay may lessen the incentive for a youth to leave school to undertake work. But assuming someone left school to undertake full-time work, or near full-time work, the 200-hour threshold would be finished maybe within a month or a month and a half. The incentive to leave is still reasonably high for some. We want a highly skilled, high-wage economy, and encouraging youths to leave school before they have attained those skills is not the right way to do it.

Furthermore, if youths have to be paid at the adult rate, then some employers may simply choose not to employ them. In effect, raising the youth minimum wage rate will risk young persons being priced out of the market. In some cases employers who pay 16 or 17-year-olds the youth minimum wage do so because that is all they can afford. That is the price that is set. If youths had to be paid at the adult rate, then the employer may simply choose not to employ them. We are concerned that this bill may price young people off the job market. That is a very, very serious consideration and a very important reason for National to vote against this bill. National is not against the employment of youth. This is about fair pay for fair work. We do not want this bill to be seen as a barrier to employing young people.

Support for a youth rate is premised also on the belief that 16 and 17-year-olds are not worth as much to their employers as someone aged 18 years or more. The new-entrant rate compromise is designed to recognise that 16 and 17-year-olds initially are not worth as much as someone who is older, but it suggests that after 200 hours of employment those young people have had enough experience in the workplace to mean they have the same value to an employer as someone over the age of 18. We have heard—and we have to agree—that age limits are by their nature inherently arbitrary and do not apply well to individual cases. There is nothing to suggest that the 18th birthday of a particular individual means that on the next day he or she will automatically be of more value to the business than when they were 17. This legislation will not change that. This legislation will still kick in once the youth turns 18.

There are also some practical problems in the presumptions the legislation makes in relation to the 200-hour threshold, and I would like to mention some of those. The first example is of a youth working for 200 hours for an employer, thus qualifying for the adult rate. That is fine. The employer has had 200 hours to upskill the youth and the youth has had 200 hours to gain experience within that workplace to ensure that he or she is worth, or may be worth, the adult rate to the employer. I give another example of a youth who works for employer A for 50 hours, changes jobs and works for employer B for 125 hours, then again changes jobs and works for employer C for 25 hours. After working 25 hours for employer C the youth, under this bill, would qualify for the adult rate. Because the 200 hours accumulates over several employers, and despite the youth having spent only 25 hours with employer C, employer C still has to pay him or her the adult rate. That assumes—perhaps rightly, perhaps wrongly—that the experience the youth has gained in previous employment is transferable to his or her latest employment.

A third example is where a youth works 70 hours for employer A and over the same period works 130 hours for employer B. Having accumulated 200 hours work, employer A and employer B both have to pay the youth the adult rate. The youth at that stage has a combined total of 200 hours. Again, this assumes that the skills and experience in the two jobs are transferable—that they are equal—so that the youth is valuable enough to the employers to justify them paying him or her the adult rate.

Finally, I would like to add—and on this point we are in complete agreement with the Green Party, which may be unusual, and I quote from its minority report on the bill—that “this will add to the compliance burden for employers”. We are concerned about that. We are concerned about the collection of hours and about the value of the hours. If a youth is working for two employers at the same time—not exactly the same time, obviously—then just because the 200 hours clicks over, the youth is entitled to an adult rate, notwithstanding the skills and experience involved.

If this bill is to avoid exploitation and discrimination of young workers—and we do not condone exploitation and discrimination of young workers—then it should have been so framed. This bill risks pricing young people out of the labour market. It creates a perverse incentive for young people to leave school, rather than boost their own skills and training. It fails to recognise that many employers already pay above the minimum wage to youths, and it adds to the compliance costs of business. For those reasons National is opposed to the bill.

Hon RUTH DYSON (Minister of Labour) : It gives me pleasure to support this Minimum Wage (Abolition of Age Discrimination) Amendment Bill at its second reading. I begin by congratulating Sue Bradford from the Green Party on taking the initiative, introducing the bill to the House, and stimulating the debate at the Transport and Industrial Relations Committee. I also acknowledge and thank the other members of the select committee for their rigorous consideration of this issue.

Since Labour was elected to lead the Government at the end of 1999, our Government has reviewed, then raised, both the minimum youth and adult minimum wage annually, and that is a fact that I am very proud of. Under the previous National Government, the youth minimum wage was set at 60 percent of the adult minimum wage. Our Government increased this to 80 percent of the adult rate, and we also lowered the age of entitlement for the adult rate from 20 years, as it was under previous National administrations, to the 18 years that it now is. Prior to that, one had to work on the youth rate, if one was on the minimum rate, right up to the age of 20, rather than 18 as it is currently.

It is my view that those steps have been very positive, but it is still obvious that there is a debate to be had about the suitability of paying workers at a different rate for the same job just because of their age. That debate has in part been held at the select committee and it is now continuing.

Labour recognises that employees who are aged 16 and 17 often do the same work as adults. Therefore, for those employees to earn 20 percent less than their adult colleagues is unfair. In employers’ submissions to the committee considering the bill it was noted, though, that 16 and 17-year-old workers often lack the work socialisation skills that older workers have. Submitters also noted that they did not think it was fair that youth supervisors were paid less than the adults they were supervising.

In response to the submissions and within the original intent of the member’s bill, the Transport and Industrial Relations Committee has proposed that for the first 200 hours of their employment, 16 and 17-year-olds should be paid at no less than 80 percent of the adult minimum wage. After that 200-hour period, 16 and 17-year-old employees will be paid the adult minimum wage. Those 200 hours of employment can be accumulated across several different employers.

The previous speaker talked about increased compliance costs, as if this strategy would be a new trigger. Actually, the strategy changes the trigger from a requirement of 2 full years of work and the date of one’s 18th birthday to a requirement of 200 hours of work, which even for a part-time worker is a significant step forward. Concerns that those younger workers who are in positions of responsibility would be disadvantaged by the bill have also been answered by the committee’s recommendation that the minimum rate would not apply to 16 and 17-year-olds who are employed as supervisors.

The enticement of young people away from the education system—from high school, polytechs, apprenticeships, or university—with the possibility of a job that might pay higher in the short term but is unlikely to lead to better career prospects in the long term, is an issue. The 200-hour threshold is intended to protect against the possible risk of a negative impact if we were to immediately abolish youth rates completely.

This measure will be yet another step in our steady progress in ensuring that all workers, including young workers, have fair minimum-pay protection. This year the youth minimum wage was increased from $8.20 to $9 an hour. This stands in stark contrast to the youth minimum wage of $4.20 per hour under the previous National Government in 1999.

From Labour’s perspective, the voices of employers and unions, and the voices of young New Zealand workers, should be heard. The Transport and Industrial Relations Committee was an appropriate forum in which to host that debate. I know that the members of the select committee gave fair consideration to both the perceptions and the facts around this debate, and I personally thank all the members of the committee for their considered deliberations on this matter. The select committee’s proposals offer a balanced way forward on a complex issue, and they address employers’ concerns as well as recognising that younger workers doing the same job as adults should be paid fairly.

This member’s bill is another example of our Government working with other parties in an MMP environment to achieve the best solution for the diverse interests of all those affected by these proposed changes. I wish the next stages of this bill a very speedy progress.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) :Ā, tēnā koe. Tēnā tātou te Whare. I tērā wiki, ka tukuna kia kitea e Aotearoa te tino pikitia, arā, Ka mau te wehi a Kerehi. He waimarie kua puta tēnei pire i te wiki nei, arā, te pire kia murua i ngā utu whakaparahako i te rangatahi. He tino miharo rawa atu ngā mihi mo taua pikitia, ā, neke atu ki te 22 miriona taara, te pūtea kua kohia i Amerika. I Ingarangi tino hāwene hoki te BBC me te kī “E ōrite ana ngā mahi o te Pāremata ki tērā o tētahi pukapuka whakamataku.” Ā, ka tika koia nei te āhua o te Pāremata nei.

Ko te pikitia nei he korero mo William Wilberforce me tōna whawhai, kia mutu ai te mahi whakataurekareka i te kirimangu e noho ana ki ngā whenua i raro i te mana o Ingarangi. Nā, hara i te mea i whai atu au i ōna tapuwae engari, he ōrite ngā whakaaro. E kore au e noho koretake nei kia tae mai te tau 2027 hei muru i ngā utu whakataurekareka rangatahi. E tika ana kia tae mai i nāia tonu nei. Hoi nō, me hoki taku kōrero ki ngā pikitia. Ko te āhua nei kua whakaoreoretia ngā tāngata o te ao, he aha ō rātou whakaaro mō te mahi whakataurekareka tangata. Kua puta muri mai he rōpū, Te Huringa Whakamīharo, ko tōna kawenata kia wetekina ngā here taurekareka kua pā ki te 27 miriona tāngata o te ao.

Ka huri au ki tēnei pire me te whakaaro, me ahatia e tātou tēnei pire Whakaparahako Utu ki te Rangatahi, ā, tērā pea, ka uru tēneki ki te kāri ripoata o te rōpū Huringa Whakamīharo. I te taenga tuatahi mai o tēnei pire ki te Whare i te Pēpuere o tērā tau, ka mau te wehi o te whaikōrero o taku tumuaki a Tariana Turia, me tana kōrero, e tino tautoko ana mātou o Te Pāti Māori i tēnei pire, ā, i whakahīhī tā mātou tū ki te taha o ngā rangatahi. Engari, konei au i tēnei rā e mea ana, e kore mātou e tautoko i tēnei pire i te mea, “E whakakahoretia ana e mätou te pire whakataurekareka kaimahi a Wayne Mapp, ā, e kore hoki mātou e tautoko i tēnei pire whakataurekareka rangatahi a Reipa.” Kore, kore, kore rawa atu!

Nō reira, me pēhea rā ka tino hē te mutunga o te kōrero nei? Ko te pūtaketanga o tēnei pire, kia mutu ai ngā utu whakaparahako kaimahi—he kaupapa tino mīharo ka tautokohia e mātou. E mārama hoki mātou ki ngā hiahia o wā mātou rangatahi. Me te mōhio anō hoki, 30 paihēneti o ngāi tāua, kei nga tau 10 ki ngā tau 25, ā, tae atu ki te tau 2050, 50 paihēneti o mātou kei raro tonu i ngā tau 26. Nā tērā ka kitea te tini o ngā Māori ka pā ki ngā āhuaranga whakaparahako i te Ture Iti Te Utu o te tau 1983.

I tautoko mātou i te mōhio ko ngā Māori me ngā Pasifika nga tino rawakore. Me te mōhio anō hoki ko ngā rangatahi Māori, Pasifika hoki me ō rātou whānau ngā kaimahi rawakore rawa atu o tēnei whenua. Ā, mēnā ka whakapono mātou ki te tono a te rōpū Tino Rangatiratanga Tai Tamariki me te Ture Rangatahi, arā, ahakoa kua hipa ngā tau e whitu i muri mai i te tūtanga o te Ture Whakawhanaunga Mahi, ko ngā rangatahi tonu ka noho tuwhera ki ngā mahi whakahāwea kaimahi. Kua takahia tonu te mana o wā tātou rangatahi. Horekau he kirimana ā-mahi, ka pangaia tonu mō te kore noa iho ngā whakarere ketanga o te āhua o te mahi, hakoa e kore e pānuihia me ngā whakahawini, mahi tinihanga i ō rātou wāhi mahi.

E te Kaihautū, nā Martin Luther King i tuhi tōna reta i a ia e mau i te whare herehere o Birmingham i te tau, 1963 te korero: “Mēnā ka takahia te mana tangata i konei, whānui rawa atu te raruraru.” Mēnā ka tangohia e Te Pāti Māori ngā kākahu o te pire nei, ko te pātai, he aha ai i tangohia ngā kupu “muru whakaparahako” kia whakaurua ngā kupu “tīmatanga hōu”. Nā, hakoa ka whakakākahutia e Reipa tēnei pire ngā momo kākahu katoa, e kore e taea e rātou te peita ā-hau nei, kia kore e kitea ēnei mahi whakaparahako.

Kua whakaae te komiti Pāremata ki tētahi mahi whakahāwea hōu. I a rātou mahi mūrere ki te whakapai i te kino, arā, ngā hāora 200 nei, ka tapaina he “tīmatanga hōu” mō te kaimahi hōu. Ko te utu he “utu iti nei, ā, ko tā rātou whakamārama, he āhua ngohengohe nei, he “wā ako” anō hoki. Ko te mea katakata, ko te utu “tīmatanga hōu” e ōrite ana ki te utu iti mō ngā rangatahi i tēnei wā. Nō reira, he aha rawa te rere ketanga?

Koia nei i kōrerohia e te rōpū Huringa Whakamiharo, ko tēnei te āhuatanga taurekareka hōu—ngā tāne, wāhine, tamariki hoki kua ākina ki te mahi i raro iho o ngā kirimana ā-mahi, horekau he mana, te mahi rānei i ngā wāhi mahi nanakia. Kahore te utu iti nei kua tohua i raro i te utu “tīmatanga hōu”, he whakatika i ngā whakaparahako ka tau ki runga i wērā 16, 17 rānei te pakeke engari, ka taea te kī, tērā pea kua whakapakaritia. I raro i te ture ka taea kia utua ngā rangatahi i te 80 paiheneti o te utu mō ngā kaimahi pakeke mō ō rātou hāora 200 tuatahi. Kei raro e putu ana te kaupapa ārai i te mana o ngā kaimahi o Reipa! Aue, aue, taukuri e!

Ko ngā mahi o te tika e wānangahia nei, kei roto i te wāhanga 21 o te Ture Tikanga Tangata o te tau, 1993, me te wāhanga 19 o te Ture Mana Tangata o Aotearoa o te tau, 1990. Nō reira, mēnā e kore koe e mārama, i raro i te wāhanga 5 o te Ture Mana Tangata kore taea te kī, he tika paku nei tenei momo whakahāwea. Ko te kōrero a wētahi kaiwhakatakoto kōrero, ko ngā utu rangatahi, kei te utua i raro iho i te ture Utu Iti i tēnei wā. He tirohanga tuatahi mō te āhua o te whakaparahako i raro iho i te Ture Mana Tangata o Aotearoa. Ko tā te tautoko a te Komihana Tamariki, a Tākuta Cindy Kiro, kaua e rere kē te utu kia kore te whakaparahako i te rangatahi, mēnā e orite ana ngā mahi. Mēnā e ū ana tātou ki te kaupapa whakarangatira tangata, me whakamana tātou i ngā ture hei ārai i ngā tāngata kua whiwhi mahi, hakoa kahore anō rātou i eke ki te18 tau. Kua kitea e ia i taua whakaaro i te ripoata ki te käwana mai i te Komiti Whānui o te Ao mō te Mana o te Tamaiti, i te tau, 2003.

E kore tēnei Kāwanatanga e aro ake ki ngā tirohanga, ki ngā whakarite rānei o te Komiti Muru i te Mahi Kaikiri. Ko te tino whakapono a Te Pāti Māori kia riro e te kaimahi te utu ka utua hakoa he aha te pakeke. I te pānuitanga tuatahi o tēnei pire, he whakaatu mātou i wā mātou āwangawanga mō ngā mahi whakahāwea ki ngā kaimahi hauā. Kei roto i te Ture Kia Iti Te Utu o te tau 1983 e mau ana—he kaupapa kua tau i raro i te pire Tautoko Mahi Mō Ngā Tāngata Hauā (Ture Whakakore me wētahi atu Take). Engari, kore mātou i whakaarohia, horekau he tuarā tā te Komiti Waka, Tikanga Mahi Tahi; tō rātou mataku, kia whakakorea ngā mahi whakaparahako i a tātou rangatahi, rātou anō ka noho tuwhera ki ngā kino o te ao.

Tini ana ngā rawa ka taka ki a Reipa mēnā i whakapakari ai tō rātou tū mō te mana rangatahi engari, i te wa o ngā whiriwhiringa o te komiti Pāremata, ka rere kē haere te āhua o Reipa. Nā, kua tae ki tēnei wā, kore rere kē atu te āhua o Reipa ki tō rātou hoa a Nāhinara, rātou i tautoko i te pire a Wayne Mapp. E whakapono ana mātou, mēnā ka tōtika te utu ki te rangatahi, ka pai ake te āhua o wā rātou wāhi mahi; ā, ka whai haere te oranga ki ō rātou whānau.

I pānuihia e te Komihana Mana Tangata tētahi rangahau, arā, i tiro whānui ki te 458 tāngata, ā, ka kitea i reira e 81 paiheneti i tautoko kia tōtika te utu i te rangatahi. Nō reira, he aha tūturu ai, ka āhua tame heihei te komiti Pāremata, kia kore rātou e tautoko i te kaupapa mana tangata.

Ko tēnei te 200 tau mai i te pire a Wilberforce kia murua ngā kaupapa whakataurekareka tangata i te Pāremata o Ingarangi i te tau, 1807. Nā tōna kaha ki te whawhai, nātōna māia, hakoa te tini o ngā wā i raru ai ia, ka riro i a ia te taitara. “Ngākau Whakawā o te Pāremata”. Ko tāku e whakaaro i te tau 2007, mēnā ka taea e ngā mema o te Whare te whakawā i ō rātou ake ngākau, te pōti kia whakakāhoretia i tēnei pire i te mea, kua huri tuarā a Reipa ki te kaupapa taketake i hangaia i te tuatahi. Kore rawa mātou o Te Pāti Māori e tautoko i tēnei pire i te mohio, he pire whakataurekareka i nga kaimahi rangatahi. Te mutunga mai o tērā hē, me whakamā tātou katoa.Tēnā tātou katoa.

• [An interpretation in English was given to the House.]

[Greetings to you, and to us all in the House. This time last week, the new blockbuster Amazing Grace was released on to New Zealand screens—timed conveniently for the reading of the Minimum Wage (Abolition of Age Discrimination) Bill—a movie that has received rave reviews around the world, climbing to the top 10 in the USA’s box office charts, where it made over $22 million domestically. In England, even the good old BBC got excited, reporting that “It makes the workings of Parliament as gripping as a good suspense thriller.”, which, of course, is an accurate description of life here in Parliament.

The film tells the story of William Wilberforce, who over 20 years led a fierce political battle to abolish slavery and its trade throughout the British Empire.

So I come to this bill today, wondering whether what we are doing with this

So how did it all end up so wrong?

As Martin Luther King Jnr wrote in his 1963 letter from Birmingham Jail, “Injustice anywhere is a threat to justice everywhere.” The Māori Party found it extremely revealing that the select committee chose to amend the title of the bill, removing the words “abolition of age discrimination” and replacing them with “new entrant”. And we ask why. Well,

The select committee has opted to introduce a new form of discrimination, justifying the repackaged 200-hour “new entrants” minimum wage as being all about “soft skills”, and representing a “learning phase”. Funny, that, but this “new entrants” rate is set at the same rate as the current youth minimum! So what has changed? This is what the Amazing Change movement calls the new form of slavery —the men, women, and children who are physically forced to work, often under the guise of meaningless contracts or in sweatshops. The “new entrants” minimum rate to be set by minimum wage order for 16 and 17-year-olds fails to address the issue of discrimination—indeed, it could be said that it entrenches it. It will make it legally permissible for young people to earn 80 percent of the adult wage for their first 200 hours. So much for the

The rights in question are those

This Government ignores the observations and conclusions of the Committee on the Elimination of Racial Discrimination.

Labour members

The Human Rights Commission shared the results of a survey of 458 respondents, of which 81 percent considered it important that young people have a fair wage. The commission also reminded the select committee that there is no strong evidence that a youth minimum wage is necessary to increase employment of 16 and 17-year-olds. So what could possibly be the reason that the select committee would chicken out from standing up for the right to non-discrimination?

This year marks 200 years since Wilberforce’s bill abolishing slavery was passed in the British Parliament of 1807. For his courage, and the enduring struggle he persisted with, despite a series of defeated bills, Wilberforce was awarded the title “Conscience of Parliament”. I wonder whether, in this Parliament in 2007, the members of this House are prepared to examine their conscience, and vote to oppose this disastrous back-down on the original proposal to abolish age discrimination in benchmarking a minimum wage. The Māori Party will never support discrimination against workers, which is just what this bill promotes. This discriminatory bill is wrong, and we should be ashamed of it. .]

PETER BROWN (Deputy Leader—NZ First) : Well, I have to say, listening to that contribution, that the member clearly cares. Clearly he is concerned, but he is not concerned enough to go to the Transport and Industrial Relations Committee and listen to submissions, and he is not concerned enough to take a genuine interest when the public of New Zealand came before a committee of MPs to outline their case.

But I have to say to the member that he made another good point, which I want to concur with. The film Amazing Grace is an absolutely excellent movie. I say, for those who have not seen it, that it is well worth seeing. It is largely the story of an English MP who has genuine concerns about people; he does not bad-mouth people, and he finally gets listened so. So I say to this House that if members can think of an English MP who, basically, does not bad-mouth people and thinks about genuine concerns, he or she is well worth listening to. I recommend that members take the member’s advice.

We gave some serious consideration to Sue Bradford’s original bill. We listened to the people who made submissions to the Transport and Industrial Relations Committee very honestly and very openly, and they made some very good points. Nevertheless, the Government made a move—and I think it is a very good move—to introduce a new entrants rate, and New Zealand First will be supporting this amended bill as it has come back to the House.

Let me outline some of the concerns put to the select committee by a number of employers—small employers in particular. They said that they take on young people to give them their first chance. One lady in particular impressed me with her submission. She told us about the difficulties she has faced with some young people. They do not turn up and they do not take the business to heart; they have all the skills, they know what to do, and they adapt themselves, but they consider going to work as secondary to having a good time. Nevertheless this lady has persevered by employing young people. I thought she had a very good point. She made it clear that the only advantage, if that is the appropriate word—I do not think she used the word “advantage”, but I will—that the only difference between a younger person and an older person in terms of cost is the youth minimum wage rate. She said that if she is compelled to pay what she called the adult minimum wage, then she would employ older people.

Dr Wayne Mapp: That’s right.

PETER BROWN: Wayne Mapp was on the select committee at the time, and he has just acknowledged agreement. So that is a genuine concern. New Zealand is made up very largely of small businesses.

The second thing that concerns us—particularly my colleague Brian Donnelly, who is sitting alongside me now—is the incentive that paying the minimum wage will give young people to sacrifice their education. If I could give a young person three pieces of advice in one word it would be “education, education, education”. If young people think they can leave school at 16 years, work in the workforce, and advance themselves without being fully educated, then they are fooling themselves. If we abolish the youth minimum wage and put those young people straight on to the minimum wage, we will give a number of them the incentive to leave school and go into the workforce then and there. New Zealand First is not prepared to chance that on a one-off basis.

It might not only be young people who give themselves the push to join the workforce; it could well be their parents. A parent may say: “Well, you can now earn as much as your father. Go out there and earn it.”. So the incentive to join the workforce could, first, come from the individual youngster, or, second, from his or her parents. I do not normally tell people about my own growing up. I have to say that it was quite a long while ago, when I was—

Rodney Hide: Which century was it in?

PETER BROWN: I can tell Mr Hide that, believe it or not, it was last century. My father wanted me to leave school at 15, I think it was in those days.

Rodney Hide: Did you know Charles Dickens?

PETER BROWN: Charles Dickens was a personal friend of mine. I knew him well at school. I read many of the books he wrote.

My father was very keen for me to join the workforce at 15, but my mother knew my desire to become a merchant navy officer. For some peculiar reason I had wanted to do that from when I was a very, very young guy, and I had to get certain school qualifications. She knew that if I left school at 15 I would never get there. In our household it was she who compelled my father. She said: “Look, if Peter wants to stay at school and do what he wants to do in life, we’re going to support him.” It was a little bit more toey than that, but the point I am trying to make is that, at times, parents do encourage their kids to leave school too early, and this would be another incentive to do just that.

Rodney Hide: It was 200 years ago though.

PETER BROWN: The other point I want to make—and I know that Mr Hide will not overlook it—is that as a result of New Zealand First being in this House the minimum wage is going up to $12 an hour by the end of this term. That would not have occurred but for the political party that I stand here representing right now. It was part of our confidence and supply agreement with the Government. The Government put a little rider on the end—“subject to economic conditions”, or something like that—but we will get to $12 an hour, which means that the youth minimum wage will become $9.60. Had we not reached that agreement with the Government, one could expect that at the end of this term the minimum wage would be about the $10 mark, which would mean a youth minimum wage of $8. So youngsters will get an increase of something in the vicinity of $1.60 that they would not have got but for the political intrusion by New Zealand First. We ensured that the minimum wage will go up and, as a result, the youth minimum wage will go up. This new entrants rate is a step in the right direction. It may not be the be-all and end-all, but it is a good point for youngsters to start their working career from.

As to the 200 hours, we recognise that if a person is working full time it will take a matter of weeks, but if he or she is working part time it could take a good deal longer.

Hone Harawira: 5 years.

PETER BROWN: Five years? Two hundred hours would take 5 years?

Hone Harawira: They work in the holidays and when they finish they go back to school. The next time, they start all over again. That’s how it works.

PETER BROWN: I would be totally surprised if it takes anybody 5 years to get to the minimum wage.

Hone Harawira: Every time they stop, it starts again.

PETER BROWN: I can promise the honourable member that if there is such a case, then New Zealand First will be prepared to look at it.

The point I am making is that it will not take terribly long, in anybody’s book, to get to the 200 hours. As the 200 hours will be spread across all employers, the biggest problem will be keeping records. A guy could work 10 hours a week for company A, and then 2 weeks later work 10 hours a week for company B, and someone has to keep track of those records. I have a feeling that there will be employers who will say: “I don’t want to be bothered keeping a track of that. We’ll give you the full minimum wage anyway. You’re only 50 hours, or 60 hours, or 10 hours, or whatever, short of the 200 hours. We will put you on the minimum wage virtually from whoa to go.”

I think the Government has got it right. We have had a long discussion in New Zealand First about this bill, about the first bill that Sue Bradford appeared with, and about the way the Government has doctored it, if I might use that language. We think it is fair, we think it is a good move, and we think that this will work exceedingly well, given the opportunity both for employers and for young employees.

JUDY TURNER (Deputy Leader—United Future) : I spoke at the first reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, and United Future supported its first reading. We felt there were some very good intentions contained in the bill, and we wanted to see what the select committee would do with the raw material that was in the first draft. I would like to congratulate the Transport and Industrial Relations Committee on what has come out of that process. It certainly has addressed some of the concerns that United Future signalled at that first stage. Our concern was that we could end up disenfranchising the very people whom this bill intends to help; that is, we would price young people out of the labour market, so that if employers had a choice they would go for the more mature workers, in the belief that they would be employing people with a better work ethic. We think that this new entrants provision improves the bill immensely.

One of the things that has always amazed me, particularly since I moved to Wellington for part of the week, is the huge difference between the life experiences of young people in the city and young people in the provinces. We raised our children in the provinces. What is quite typical out in the provinces is that when young people leave school, either to go into training or to go into work, they often have to leave home; that is not uncommon. Smaller towns do not always provide work or training opportunities. So it is quite possible for someone to be 16 and leaving home for a work opportunity that he or she really wants—that person has weighed up the options and feels that for his or her life this is the best way forward—but somehow that person has to survive independently on youth rates, which is extremely difficult. This bill provides the opportunity for young people who are working to capacity and doing a good job to have that work recognised.

I do not agree that this new provision is in any way similar to Mr Wayne Mapp’s bill. This provision does not mean that a person can be let go at the end of the 200 hours if he or she has not met the standards. It is only a training period, where the skills that a person needs are put into place.

As a parent who has raised three children, I often look with appreciation on some of those early jobs that my children had as teenagers, such as working at McDonald’s, working at all sorts of little restaurants, and labouring on worksites. They learnt so much from having good bosses in those situations. They had a lot of skills to learn. They had to learn how to fill downtime, when there was not an obvious job facing them. They had to find that secondary level of activity on a worksite. These are all skills that they did not necessarily have, coming out of the home environment. They had to pick up a lot of skills, and they became extremely employable young people.

I think there is a real need for a training period. Certainly, employers will tell us that it costs them a lot to employ somebody who has a low skills set and low employment experience. That is why, for instance, we have support for disabled people, where we help them to come up to speed. We understand that for an employer to take on disabled people, he or she will have to spend some considerable additional time training them. It is a very similar situation here.

United Future is pleased with the work that the Transport and Industrial Relations Committee and the Government have done. We think that the additional provisions have improved the bill, and it means that we can continue to support it at its second reading. I do want to signal, though, that I heard a few rumours about amendments that could be floating around at the Committee stage. We will be watching those very carefully, to make sure that any further amendments made at the Committee stage do not disqualify us from giving further support to what we believe to be right. We would like to be able to support this bill right through to its third reading, and with the bill in its current form we would be able to do that. We are very happy to support the second reading.

RODNEY HIDE (Leader—ACT) : I listened to Hone Harawira’s speech and I am quite surprised, given the Standing Orders, that we are considering this bill, because it is clear to me that the bill has been so changed in its purpose that it is a different bill. Technically we should bar it from consideration in this House, it would seem to me. Obviously, I am not right, because I know that the clerks and the Speaker are very good on this. This is a bill that is designed to prohibit discrimination, in the terms described in the bill, but what has come back from the select committee is a bill that just perpetuates discrimination, and that is why the bill had to have its name changed.

Having said that, I take issue with Mr Harawira’s point. He quoted Martin Luther King and his concept of discrimination. I should say that ACT opposed the bill at its first reading and opposes it still—however, I understand it is a different bill now. I think the key point is this idea of discrimination and the concern that Martin Luther King had, that people should be treated equally by the law and should be free. I believe that everyone in this House should support that.

But in order to be free we have to be able to live as we choose, and not have the Government telling us who we can work for and at what rate of pay. That removes freedom. If I am unable to pick raspberries for a price that I am willing to pick them for, for someone who is prepared to pay for them, I am not a free person. Someone is making the decision. In fact, that is the situation that makes me a slave. The Government is saying that I cannot work. Rather than concentrating on what Martin Luther King said, we have twisted it here today and turned it inside out. Let us think.

Hon David Cunliffe: Dickens, here we go. Dickens is back. David Copperfield.

RODNEY HIDE: I know that David Cunliffe likes getting exercise. He is one of those MPs—and it is easy to do—who stands up in this House and says: “I care about poor wages. Let’s make a law about it, to show how much I care.” David Cunliffe has never in his life actually employed anyone. He has never in his life been employed in the productive sector. He has always lived off the taxpayer.

I ask members to think about it. If this kind of legislation worked to boost wages, why are we debating a piddling $12 an hour with New Zealand First? Why not make everyone rich and make it $100? Everyone thinks that is silly, do they not? In fact, why not make it $100 an hour for a 16-year-old? We are against slavery, are we not—let us make it $100 an hour, and let everyone get it, and we will be rich.

We know the consequence of doing that. Suddenly the House has gone quiet. We know the consequence of that—there will not be very many people working, because for the minimum wage to have an impact, it has to force wages above the going rate. That is the trouble with it: if members vote for a minimum wage, yes, it is good for those who have work, but it excludes people from the job market. Where is the justice in that? Where is the fairness in that? How does that help a Māori youth wanting to get a job? Of course we want that Māori youth to have a job. If we want that, we have to have the freedom to set a price.

If we want wages to go up, we cannot do it from this House. We cannot do it by passing a bit of feel-good law. We cannot sit around and pat ourselves on the back with self-satisfied smirks thinking we are helping the poor. No, it requires hard work to drive up wages, hard work from this place—from the Government. We need to be driving up wages, and ultimately the only thing that can do that is a more productive economy. Passing a law in this place to set a price for labour does nothing to improve the productivity of this economy. Setting a minimum wage does nothing to improve the productivity of labour. If it is effective, it actually excludes people from the market and makes our economy less productive, and the very people we are trying to help will be poorer now and poorer in the future.

We should be asking some basic questions: “What is it that enables people to get a job?”; “What is it that enables wages to go up?”; and “What is it that enables a country to prosper?” The answer is not in regulating prices, it is not in regulating wages and it is not in sitting here with a self-satisfied smirk saying: “Hey, look at us, don’t we care.”

I know that David Cunliffe is smarter than he appears by taking the mickey out of me for speaking out against minimum wages—he has been to Harvard; he knows the impact. He is just wanting to play a bit of politics by implying that I, who am speaking the truth, am suggesting that I am in favour of low wages. Of course not—someone who is speaking out against regulating prices is not in favour of a sweatshop. Someone who is speaking out about trying to regulate our way to prosperity is not a person who does not care. Someone who is speaking out against making a minimum price is not someone who says: “Let’s all help business and not care about the workers.” No, that is someone who is addressing the issue of what we need to do in the New Zealand economy to help our young people, not just today but tomorrow, next week, and in the years ahead. We should be looking at our economic circumstance—

Hon David Cunliffe: The member cares about stakeholders, about robber barons?

RODNEY HIDE: Mr Cunliffe sits in a Government that is seeing interest rates driven up, workers laid off, and businesses shut down. He is in a Government that is unable to respond to that predicament. Solving the predicament is hard work. It requires a Government to take a good hard look at itself and not just sit there and play politics, not just sit there and take workers’ hard-earned money and spend it to try to win votes. It requires a Government that says: “Hang on, we do not need to spend this money here. It is nice to spend it here, but it would be better to lower taxes so that everyone has more money in their pockets.”

If we lower taxes, we get more investment, and therefore more capital, and it is capital and technology—as Mr Cunliffe well knows—that drive up wages. Capital and technology are what drive up wages because they are what make us all more productive. That is why, for example, New Zealand workers cutting hair or driving trucks get paid more than workers in, say, Fiji or workers in South Africa. It is not that they work harder, it is that they have more capital and more technology to work with.

The danger is that we are falling behind; we are falling behind on the capital and technology fronts and it is because we now have a regime operating that is too highly taxed. There is a huge fiscal stimulus going into the economy and driving up interest rates, and we have regulated ourselves so that people look at it and think it is all too tough. We in Parliament cannot understand the rules that confront small business. We cannot understand the rules, and yet we expect people in small businesses, whose job is not to understand the rules—that is our job—but to run their businesses, to understand the rules that we cannot understand.

That is what we are doing. What we should be doing is not piling up regulation upon regulation but doing the hard work to get this economy going. That is caring, because to care we have to deliver results. I tell the House that putting in minimum wage laws and driving up the minimum wage do nothing to increase wages. Thank you very much.

Dr WAYNE MAPP (National—North Shore) : It has been a very interesting debate this afternoon, and I think that Mr Hide has identified the core problem with the New Zealand economy—that is, productivity. The latest productivity figures for the economy actually show that things are going backwards. That is the reason why we are not doing as well as Australia. Our productivity is lower than Australia’s. There are a variety of reasons and Mr Hide identified two of them. He identified—

Hon David Cunliffe: It’s still growing!

Dr WAYNE MAPP: The economy is growing, but productivity is not—that is the difference.

The issues that were identified were technology and capital. There is actually a third reason as well, which is skills. That is built around education. It is clear that in Australia more is spent on tertiary education of all kinds than in New Zealand; a greater percentage of its GDP goes on tertiary education than in New Zealand. That is one of the reasons why John Key’s recent speech on trades and skills focused on building skills, particularly for those people who might otherwise miss out. If the Government wants to know why New Zealanders are listening to John Key, it is precisely because he is solution-focused. He has practical solutions for real problems and education is at the heart of it.

Why do I stress this point in relation to this bill so much? It is because National is concerned that the bill is effectively a perverse incentive. We want young people to stay at school or, alternatively, at least to be in trade training—to build their skills, and to make them more productive members of the community. That is where, in some respects, I would have to say that both Mr Hide at one end of the spectrum and, indeed, Mr Harawira at the other end of the spectrum miss the point. Of course there is a need for minimum rules around employment. National has no difficulty with that. We have always accepted that. We have never supported the position of employment at will. I know that many people will argue for that. That is not our position. That will be perfectly clear, and, indeed, has been clear over the years, in the nature of the employment legislation we put to the public for adjustment. [Interruption] As the Minister interjecting well knows, right through the 1990s there was always minimum wage legislation. That was protected throughout that period, and it is an important point to put on record.

However, we do not believe that this bill is the correct way forward. The first reason is the perverse incentive, and I want to focus on that point just a little bit more. As I said, we want people either in school or in trade training. By lifting the minimum wage for, effectively, 16 and 17-year-olds—members should remember we are talking about those 2 years only—we actually provide an incentive for some young people to make a choice to leave school and go to work. We say that that is a bad choice. We do not want that perverse kind of incentive in the system. We are not talking, after all, about the university student, or the person doing a 5-year trade training course; we are talking about vulnerable young people for whom it is most critical to build their skills.

I say to Mr Harawira in particular that the National Party’s approach, which was certainly clear from my 90-day probationary employment bill, was to provide the opportunity for young people to get ahead—to get out of unemployment and dependency and, essentially, into work. That will be a core part of our employment legislation going forward. I remind the Māori Party that I listened very carefully to its concerns at the time, and I prepared, I believe, a carefully thought-through Supplementary Order Paper for the Parliament at the time, which was supplied to those members in advance, so that in a sense the concerns they raised would have been fully covered. I have to say to members opposite, and to Judy Turner as well, that that was intended to be a moderate measure. I have to remind the House that New Zealand is the only country in the OECD that does not have probation periods. That is a far cry, I say to the Māori Party, from the era of Lord Wilberforce. So let us not take absurd analogies to ridiculous extensions.

The second reason that we are not supporting the bill is the deterrent effect it will have on employers. I heard many of the submissions. Naturally enough, most of the young people—not all, but the vast majority—came along and said they wanted the bill. I guess that is understandable. They were, in effect, the lobbyists for the measure, and people will always want the immediate advantage that they see. In contrast, virtually every employer—although I will not go so far as to say every employer, because some had a different view—said: “Hang on a minute, this bill poses a risk.” The risk is this. Common sense tells us that 16 and 17-year-olds are building experience, not just in the workforce but in life in general—in maturity, in understanding the adult world’s expectations, and so forth. It does not happen overnight. The whole point of having this introductory phase into work, when one is 16 and 17, is to get a chance to get that first job, for those people who make that choice—as unwise as it is for many of them.

Many of the employers were very clear in saying that if they had to pay the full wage, they would go for an older person. They said that it is not just the technical job skills that are required in that first 6 months; it is all the other things that a person acquires as he or she gets a little older—that is, maturity, judgment, reliability, and so forth. All of those things play their part. They may not be job-specific as such, but they nevertheless bear on the value of a person in the workforce. Many of the employers said that if this bill is introduced, it will actually reduce the opportunities for those young people to be able to get a job.

One of our own members, Mr Bob Clarkson, made this point very clearly. He said he wanted to give people a chance. He also said, during the debate on my 90-day bill, that he wants to give people a chance, but he needs incentives to be able to do that. He needs to be able to give people a go. The legislative environment has to be able to favour that in order for employers to give that incentive. He is saying to the Government and to the Green Party that, as well intentioned as these measures might be, it will be a deterrent for him to do precisely that. Is he going to take a risk on someone who has perhaps a difficult background in terms of minor lawbreaking and the like? Is he going to take that risk? He said he probably would not, but my 90-day bill would have given employers a chance to do precisely that; it provided the leverage up into the workforce that those people need.

It is the same principle here. National is taking a principled approach to this. We believe in moderate, reasonable employment legislation—in that sense we differ from our colleagues in the ACT party—but, similarly, we do not go to the other end of the spectrum, as represented by some of the other speeches given today. There is a sensible, middle way around these things, and National supports those middle ways.

Hon MARK GOSCHE (Labour—Maungakiekie) : The bill we are debating today is not the Employment Relations (Probationary Employment) Amendment Bill that the previous speaker sponsored into this House and that was soundly defeated, which it should have been.

This Minimum Wage (Abolition of Age Discrimination) Amendment Bill deals with the reasonably straightforward issue of whether we pay young people of 16 and 17 less than an 18-year-old or over, as the current law allows, or whether we take that discrimination away. The Transport and Industrial Relations Committee grappled with the opposing views and—as select committees should do in this Parliament—we listened to both views. In the fine balance that this reported-back bill shows, we have taken into account the strong opposition by some employers to doing anything, and have listened to their fall-back position, as I would describe it, of saying that there is a genuine need to deal with the 16-year-old who has never worked before and is coming into the workplace with none of the informal skills that they require, and that they think there should be a short period of time where they pay them a lesser amount. That is what this new entrants rate is all about.

I know there will be people who are disappointed. We had some wonderful young people come before the committee, up and down the country, and they put forward a very sound case. Many of them told stories about being employed in supervisory positions as 16-year-olds and being responsible for supervising people older than them, who happened to be eligible for the adult minimum wage, and there was no logic in that. That was unfair, and that is why the select committee has said those people should not be paid a lower rate.

I listened to some of the speeches made earlier—unfortunately, not all of them—and I listened to Rodney Hide’s final comments about complexity. Well, it is not complex at all. The facts are that everybody has to keep time and wage records. That is the law. Nobody thinks it is wrong. Nobody thinks it is onerous; it is sensible. Maybe the ACT party is alone on that one. If we are running a business, it is not hard to count up to 200. If we have kept a record of all the hours of work and they add up to 200, then we know that that person is then eligible for the full minimum adult wage. I do not think that is onerous. I do not think it is onerous to keep records of hours and wages. Those requirements are in the legislation, they have been there under various forms of Government, and they continue to be there.

The reason people are paid youth rates out there in some situations, notably the fast-food industry, is because the employers can do it. The law allows them to. Employers expect this legislation to be passed, and have been budgeting and preparing for it for a very long time. Some of them do not pay youth rates at all at the moment, because they choose not to. But some of them do it purely because of the competitive pressures of the fast-food chain down the road paying lower wages, even though they agree that their workers should get paid the minimum adult wage. In essence, this bill allows a level playing field. It does not give anybody an out by having a legal minimum wage for 16 and 17-year-olds, thus giving employers the excuse to pay lower wages.

The interesting thing about hearing submissions on industrial relations, as I have done for some years now, is that the employer organisations do what I think is a good job in that they go out and survey their membership up and down the country. They came and told us there was not a lot of interest in this bill from most of their membership, because those employers do not pay youth rates. I think about 85 percent of them do not pay youth rates. Who does? It is largely employers in the retail sector, the hospitality sector, and, most notably inside that, the fast food sector. Those people are concerned about this bill, but 85 percent of employers in New Zealand do not give a toss, because they do not pay youth rates. They do not see them as a necessary part of running their business.

When I think about the words of the previous speaker, Dr Wayne Mapp, who said that if we require employers to pay young people more, it will displace young people, I say we should look back at the last time that happened. When we brought the minimum wage threshold down from 20 years, which is what the threshold used to be, to 18, was there displacement? Were fewer hours worked by young people as a result of our doing that? The evidence before the select committee said, no, there was not. Nobody could give us any evidence to show that young people lost work, lost work opportunities, or had reduced hours as a result of the last move made by this Government in this area. I do not expect there will be this time, either.

Really, I think that the question that will be debated—and I know that it will be debated very fiercely at the Committee stage—is whether we should have the new entrants rate at all. I think the House should have that debate, because the select committee had to grapple with it, and it came to the majority view that members have now been presented with in the House to debate. I look forward to hearing the debate from those who, like the Māori Party members, would like to support the bill, but without this new entrants rate. I look forward to hearing that debate, because it is an important debate for us to have.

But I also think that this amended bill has a fairly broad amount of support across the political spectrum. In reality, the National Party, if it could get over the fact that it has been in Opposition so long that it has to oppose things just for the sake of it, would be supporting this bill. If those members were using their common sense, they would be supporting this bill. If they had actually listened to the submissions before the select committee, they would be supporting this bill on the basis that they would have done a bit of homework and found out that the unemployment rate out there 2 weeks ago, when I launched a report in Auckland on the labour market, stood at 1,227 for 18 and 19-year-olds, compared with 17,000 when National was last in power. Then David Benson-Pope, in the House last week, I think, reported that that figure had dropped to 990 unemployed 18 and 19-year-olds. If National members actually looked at those sorts of statistics and took notice of them, they would know that a bill like this will not have very much effect at all on young people in that age group in terms of whether they are in employment, education, or whatever, because most young people over the age of 17 are either in employment or in education right now.

The other question that National raised in its minority report is an interesting one. It is about whether this bill would encourage people out of education and into work because they would get the minimum adult wage. Again, I return to the evidence we heard about who is paying youth rates, and I do not think that a lot of young people will rush out of school tomorrow in order to get a job at McDonald’s because suddenly the adult rate is being paid. Young New Zealanders are brighter than that. They would go to McDonald’s and work part-time to get them through study and to help their families out whilst they were still at school, but I do not think they would rush out and leave their education behind because of a minimum adult wage being available to them 200 hours after they begin work. That could be in as little as 5 weeks.

To the critics of that new entrants rate, I say that the current situation is that a 16-year-old has to work for 2 years before getting the adult minimum wage. Under the bill, after about 5 weeks of full-time employment young people can get on to the adult minimum wage. That is really where the argument lies as to whether the select committee was correct in putting forward that amendment. That matter will be determined by way of a vote in Parliament as the bill goes through the Committee stage.

As I said, if National members were not just playing politics on every single piece of legislation that came into this House, if they started to engage the brain, read the evidence, and listen to the submitters—including the many employers that came before us—they would be agreeing with this bill, and not mucking around and being stupid about sensible legislation like this. As we know, living on $12 or $11.25 an hour, or whatever it might be, is a very tough struggle. Those workers who have finally got their boss, that lousy outfit called Spotless Healthcare Services, to pay them the wages that they deserve were living on $11 and $12 an hour. We as a Government think that is shocking, and that is why we put so much money into the public health system to fix that problem.

We do not think that people should be earning the minimum wage, full stop, in this country, but we must always have a floor that employers cannot go below. A huge number of workers never ever earned the minimum wage in this country, before the previous National Government brought in the Employment Contracts Act. We are fixing up the problem; bills like this one help.

DAVID BENNETT (National—Hamilton East) : It is my pleasure to speak on the Minimum Wage (Abolition of Age Discrimination) Amendment Bill today. I thank members of our Transport and Industrial Relations Committee for the work we have gone through in looking at this bill, and I thank the proponents of the bill for their work. We were certainly very pleased to see this issue come before the select committee.

All committee members took a great deal of enjoyment in hearing from the submitters. Some really successful people in business made submissions, but also some young people made submissions, and I will draw attention to the submission made by representatives of Young Labour. Actually, it was probably the best submission that was made. Those guys really did a lot of work on their submission, and it was a real credit to them. Even though it was slightly misguided in where they wanted to go, it was a very good submission and they presented it very well.

Today we have just listened to some arguments, and one argument made about discrimination I think we need to address at a very early stage in this House. This bill is not about discrimination. Drawing comparisons with Lord Wilberforce are unfair to Lord Wilberforce, as this is not a case where we have an upper limit on what someone can be paid. If we had a limit specifying that we can pay 16 and 17-year-olds only $5 an hour, then that would be discrimination. We have a lower limit; we do not have an upper limit. So there is no discrimination in the sense that the Māori Party has promoted today. I think that is something we need to look at, as it is fundamental to the employment situation out there. It is a matter of choice. Employers can choose to pay more than the minimum wage, and in a lot of cases, they do. We had submissions saying that 58 percent of some employers pay above the minimum wage. I think it is fundamental to look at the opportunity for an employer to recognise a good employee. If someone is good, the employer will reward that person. The employer will pay that person.

We come into this House and we talk about equality and we think of one big level playing field—well, members should have a look around at themselves. This is not a place of equality; this is a place that is all about hierarchy. We have members in the front row representing their time in this place. They get the jobs in the front row. Cabinet Ministers get paid more than backbenchers in Labour. It is all about hierarchy. How are we going to change that hierarchy? Are we to say that we cannot have that at the start of someone’s working career—it is all right to have a hierarchy in the later stages of one’s career, but it is not all right to have a hierarchy in the early stages? That just does not make sense. The reality is that whatever people do in life, they start in one position and work up.

Will this mean that young people getting their drivers’ licences will go straight on to full drivers’ licences? No, it does not. We make sure that people have to go through a whole system, and if anything, there is talk about extending the system so that people have more time under restricted or learner drivers’ licences. How can we say that in employment we now have to charge or be paid a certain amount that is at the highest level, when this would not happen in other areas of life? Will this mean giving 16 and 17-year-olds the vote? No; there are proposals to do it but they will not get very far, because we have some limits in our society.

We recognise some degree of growth. We recognise, especially in employment, degrees of success and how people progress through their careers—and their salaries are generally commensurate with that. That is the key thing; that is the basis of our society. We do that through our community and through our leadership in this place, and we do that through the wages we pay our people. We do that in all aspects of our society. To come in here and talk about discrimination is not true. This is not about an element of discrimination. This is a case where people are living the reality of how our lives are based—people have to go through structures to get to the success that they want to get to.

The second thing I think we need to look at, before we look at some of the arguments for and against the position, is the treatment of the Green Party. Those members came to the select committee with high ambitions. They were philosophically in the right place. They said that they wanted to have all of the stuff gone, but then Labour came back at the last minute and said no, we are going to have this 200-hour element. Labour stymied the Green Party, as it does time and time again.

If there is one lesson the Green Party needs to learn from this, it is that it cannot trust those Labour members. The Green Party had a good idea. Labour should have been backing the Greens all the way—it is full of unionists—and it did not. Then Labour came back and changed the bill. Labour brought in a 200-hour change. Labour changed its mind. It was backing the Green Party all the way, saying that this is a good idea, this is great; and then what does it do? It puts in this 200-hour element. One could see the Green Party members’ faces drop. It was the last thing they expected. Their dreams had gone out of the window. They do not want to support this bill now; that is how bad it is. They want to turn round and say no.

The Māori Party is in exactly the same position. Its members want to say no because they do not like the 200-hours change. Labour cannot have it both ways. If Labour wanted it, it should have done it the whole way, but it did not do that. Labour could not be there for the Green Party in terms of the pure philosophy. So that is something that has been missed out.

I will look at some of the other things in the bill. Employers generally pay what they want for staff. Employers make that conscious choice. However, the young people who came in front of the committee said that that was not the case. They have situations where, as a 16 or 17-year-old, they can be training somebody who is new, who may be a 20-year-old, and not getting paid the same amount. This is what the young people said. If they were 17 and had been working, say, at McDonald’s for a year, potentially a 20-year-old could come in and that 17-year-old would be paid less but would be training the 20-year-old. That is a very good argument. They were saying that they were not getting paid for the work they had done; that was the argument put forward. The reality is that employers make the choice to retain such people and if they want to retain them, they will pay them what they are worth.

We have a tight labour market out there. Employers need good staff. The hardest thing to find is good staff. As members of Parliament, we go around businesses and communities and every time we go into an employment situation, the first thing we are told is that the employer wants good staff. Employers will pay to keep the people they want. That is the fundamental basis of what is happening in our employment situation at the moment. If employers will pay that rate, they will recognise if someone is 17 and training a 20-year-old. They will take that into account in making the wage decision for that 16 or 17-year-old. So the market is achieving that already.

The other argument out there, and the one that Bob Clarkson put forward in a very good manner, was that people need a start; they need a chance, they need a break, they need to get in. How many people actually go and walk into their first job? I would say very few. Most people who get their first job have to do something special. They have to get their foot in the door. How many people in this Chamber have gone and worked for free to get some experience? I bet that people have. How many people here have gone out and given of themselves before they got a job?

Hon David Cunliffe: Only to the Labour Party.

DAVID BENNETT: Exactly; they have given to the Labour Party. They give before they get. And when they give, they get what they want; they get a job. They had to give for years working for the Labour Party with no payment and now they are in here; they got a job. So how can they say anything other than that? One has to give to get. What is the difference between paying a lower rate while people are giving and learning skills—[Interruption] Now, people like David Cunliffe get to sit over there and talk about these things, because only the rich can think like he does. That is the reality of this world.

There will be a lot of other effects from this legislation. The minimum wage will go to $12 before we know it. That will hurt young people. The number of young people going into unemployment is so high. In fact, 12 percent of young people are unemployed, compared with the 3 to 4 percent national average. That is a big difference. If wage rates are increased to $12, that difference will be accentuated and young people will be put at a disadvantage. Time and time again, submitters came in and made that point.

There is the argument that this will be a disincentive for people to go into education, when that is what we should be promoting as a country. All in all, we say there are some problems with this legislation. We do not believe it is a matter of discrimination, and we have some pity for the Green Party, which went out there but did not achieve its full goals.

The ASSISTANT SPEAKER (Ann Hartley): Just before I call the next speaker, I remind members not to bring the Speaker into the argument. If we had an honesty box with a dollar for every time the Speaker was brought into the argument, it would get a lot more than the minimum wage per hour.

• Sitting suspended from 5.58 p.m. to 7.30 p.m.

DARIEN FENTON (Labour) : I am pleased to speak in support of the second reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, and I congratulate Sue Bradford on bringing this debate to the House. I also congratulate New Zealand First and United Future on supporting the bill as it stands. Also, as people will have noticed, the majority of the Transport and Industrial Relations Committee are recommending this bill. I think the select committee report does reflect the genuine consideration we gave to all submitters.

I want to acknowledge particularly all the young workers who came to the select committee to tell their stories. It was very entertaining at times. In fact, I think it was the first time I have been at a select committee meeting where we had submissioners telling their stories by mime. That was from the Radical Youth, and I think they told the story very well. I think there is no doubt that our future is in very good hands when we consider the leadership and passion of the many young people whom the select committee had the privilege of hearing from.

I think the majority of the select committee have agreed that the basis of the original bill is right, and that it does not make sense—nor is it just—to continue to pay workers less just because of their age. I think we all believe that age discrimination is wrong, just as discrimination on the basis of gender and race is wrong, and that it is not fair to pay 16 and 17-year-olds a lower minimum wage.

However, I do not agree that the bill as reported back entrenches discrimination. Our recommendation for the 200 hours means that workers get more pay once that initial experience of 200 hours has been gained—and it is worth noting for the Māori Party that it is not included in the bill; this is a recommendation to the Minister when she considers, after consultation with the social partners at the end of the year, recommendations on setting the minimum wage in the future.

The proposal for 200 hours makes sense to me because in my experience as an advocate for workers, paying workers for experience is quite common and many collective agreements often reflect just that. A worker gets paid more for the experience once he or she has worked for a particular time. It is called service pay. It might be a bit old-fashioned in the minds of some employers but it is something that workers feel very strongly about. I have had many debates with workers about that particular issue. They often say: “Why is it fair that someone coming into a job who is brand new should get paid the same as me when I’ve been here 2 or 3 years?”. That is how they feel about it. So the select committee’s proposal is talking about 200 hours of experience and being paid on the same basis once they have gained that experience. What is more, that experience can be accumulated across many different employers.

The other question that I think will come up as we go through this debate will be about whether those workers work 200 hours for 5 weeks as full-time employees or 200 hours for however many months for part-time workers. I have to say, again, that my experience tells me that workers will say it is unfair if some workers have to work 5 weeks as a part-time employee, working a couple of hours a week, and others have to do 200 hours as a full-time employee working for 5 weeks at 40 hours per week. I have tried to think through how that could be adjusted, but for me it comes back to a matter of fairness. We are talking about fairness and experience, and it is a hard issue, but it is something that I think many, many workers will be saying about this.

So what we are saying is that 16 and 17-year-olds who supervise other workers should not be paid a youth minimum wage. I think that also reflects that the bill as written actually locks in 80 percent for people who are new entrants. Some people may not be aware that the Minimum Wage Act does not say that young workers who are 16 and 17 years old should be paid 80 percent of the adult minimum wage. It is left to Governments and Ministers, and so on, and we all know what our experience has been of that. So it locks it in at 80 percent of the adult minimum wage, and that is a good thing.

One of the interesting things employers were telling us—and in fact unions were, as well—was that progress is being made on collective agreements on youth minimum wages. They are abolishing youth rates, and I say congratulations to the unions on running a campaign and getting employers to listen to it. What employers were really saying to the unions and to us was that they will not pay youth minimum wages provided their competitors are not paying youth minimum wages. I think we will see that change over time. If we look at the industries where youth minimum wages are paid, we see that they are in the supermarkets, in the retail industry, in the hospitality industry, and in jobs where young workers often do the jobs that adults will not do.

But it is also worth noting here that we are talking about minimum wages. We are not talking about paid rates as we would call them, as advocates in our past lives. We are talking about minimums—the minimum, below which no workers can be paid. We were told that most employers pay above the youth minimum wage. So what we are trying to do here is to deal with the most vulnerable; the workers who are most likely to be employed by employers who rely on minimum wages and who pay young workers less than they are worth.

One of things the select committee heard, which I think needs further consideration—it is not in the report back, but I think we do need to reflect on it—is the issue of workers under 16. Many of the submitters who came to the select committee talked about their lives as workers as 14 and 15-year-olds. Of course, the Government is currently considering ILO Convention 138, the minimum age convention. It is a tricky issue, really, as to what is the balance between enabling young people to work and raise a little bit of pocket money or money to support their study versus the minimum age at which people should be able to work. But it is an issue that needs attention, and I think it will continue to come up, but it was outside the scope of the bill.

The other thing that has not been mentioned in the debate so far is that although the author of the bill is disappointed in the result from the select committee, the response we have come up with is a world-leading one. I was very interested in hearing from various groups, including the Department of Labour, about which countries do not have reduced rates for young workers. It is very hard to find too many countries, actually. There is Cyprus, Estonia, Greece, Latvia, Slovenia, and Spain—so we are talking about being among, I suppose, OECD countries that are leading the world in this in being able to say we are making progress on removing lower rates for 16 and 17-year-olds on the basis of their age.

I want to make a response to Hone Harawira. He said in his speech that he would be voting against the bill. One of things that perhaps members do not understand is that this bill is an enabling bill. He will not find, when he goes through the bill, anything about 200 hours. As I have mentioned, the select committee proposal provides a recommendation to the Minister, but the Minister is then required to review the rates, to discuss that with its social partners, and to come up with a solution at the end of it. So I simply do not believe that the hundreds of young workers who submitted on this bill would prefer to continue to wait, for 2 years, to get their adult minimum wage rather than for 5 weeks or 200 hours as in the proposal that has come forward.

Finally, I would just like to say that the National Distribution Union, which has been very active on this particular bill, says in its press release today that it is urging Parliament to take the next step and vote for the second reading of this bill so we can continue the debate. I think it will be a real shame if members like those in the Māori Party vote against it, because all that will do is ensure that the injustices we have at the moment will continue in their current form. Thank you.

KEITH LOCKE (Green) : It is somewhat disappointing, after my colleague Sue Bradford put this bill in, and after it got though the first reading and went on to the Transport and Industrial Relations Committee, that the bill has been rather gutted at that committee. It is very much a fifty-fifty sort of bill, a half-hearted bill, in the way it has come back from the select committee. It is very unfortunate that the Labour Party choked at the critical moment of putting it though in its original form. We had a real chance to abolish completely, in minimum wage terms, the injustice that has been done historically to 16 and 17-year-olds.

There was every reason for the select committee to come out with a clear position in favour of the bill. We had legal advice, given to the Attorney-General, stating quite clearly that to continue this age discrimination would be against the New Zealand Bill of Rights Act—that, in essence, the bill was illegal. Secondly, the entire trade union movement—including the Council of Trade Unions—which historically the Labour Party has some association with, was fully for the bill in its original form, and the Labour Party has alienated the entire trade union movement by having this compromise—

Darien Fenton: They want something rather than nothing.

KEITH LOCKE: I think there is a certain embarrassment there, because those members know that that is true. The Green Party has stood alongside the trade union movement on this; the Labour Party has not. The unions are not just formally in a position; they have conducted rallies and campaigns, high school students have mobilised, and there have been student strikes. There have been all kinds of things supporting this bill to get rid of youth rates completely. As a result of this campaign, certain industries like BP, McDonald’s, and Postie Plus have conceded full rates. They have got away from youth rates, as a result of the campaign by unions that has run alongside the bill.

And these unions are not giving up. Darien Fenton, who spoke before me, referred to the press release put out today by the National Distribution Union—a union of which I am a proud member. The National Distribution Union, along with Unite! and the Council of Trade Union’s youth movement, has set up a website, called www.endyouthratesnow.com, to help people to mobilise to get this bill through in its original form, and to make sure that in its Committee stage it is improved. That youth movement, those unions, and others, will be having a march and a rally, on Saturday, 11 August, leaving from Britomart in Auckland at 12 noon. It would be good if some MPs went there, participated in that rally, and steeled themselves for the Committee stage in order to move amendments to get the bill back to its original form.

I refer to some of the myths that surround this bill. The first is that somehow young people are low-quality labour. Nobody is saying that experience does not count for something, but we all know that in a lot of areas of the economy, particularly where there is some level of computerisation and information technology involved, young people of 16 and 17 years of age are much more on to it—they are much quicker to learn—than are people who are, say, over 30. That is why young people are often chosen as casual workers in the fast food industry and in supermarkets. Employers know that they will be on to it more quickly than most of the older people. Young people are not poor quality labour. The idea that somehow profits will suffer if young people are employed on full rates is quite wrong.

As Mark Gosche rightly pointed out, 85 percent of employers do not go for youth rates. It is mainly in the fast food and retail industries where those rates apply. The reason—and Darien Fenton reinforced this, as well—is the competitive pressures in those industries; it is not some basic cost structure in the industry itself. If one lot of employers goes for youth rates, other employers think they have to follow suit for reasons to do with competition.

I think it is quite wrong to say—and I am glad that Mark Gosche also said this—that young people are suddenly going to leave school early and go out and get full-time jobs at age 16 if youth rates do not apply. It is disappointing that the Government put out a press release today talking about the “possible negative impact” of an incentive for 16 and 17-year-olds to leave school early, with fewer qualifications. I think Mark Gosche put the lie to that, correctly, in his speech. In fact, we could look at it in another way. If there are no youth rates, then people who are going on to, say, universities and institutes of technology, etc., will have more from their part-time earnings to support them in their studies. They are more likely to be able to afford to continue in education, not less likely. There are not too many people, as I think Mark Gosche mentioned, who will go out and forgo any possibility of a career, and the education towards it, for $450 a week on the minimum wage.

There is the whole question of “new entrants”. This bill is called a new entrants bill; whereas, as has been pointed out, a lot of people at 16 are not necessarily new entrants into the workforce; they may have done odd jobs previously. There are all kinds of problems relating to the 200-hours qualification period. I thought from the debate that the 200-hours qualification period was mentioned in the bill, and I am sure that a lot of people who have been listening to the radio will think that this bill contains a provision about a 200-hours qualification period before young people go on to full rates. It is nowhere in the bill; it is only in the commentary, where there is a recommendation to the Minister of Labour, saying: “Dear Minister of Labour, you might consider this 200 hours.”

Unfortunately, Labour members seem to be arguing both ways on this. On the one hand, when they are criticising Hone Harawira they tell him not to worry because the 200 hours is not mentioned in the bill; on the other hand, when they are arguing to get United Future’s support, or whatever, they say that the 200 hours is mentioned as a strong recommendation. So it is sort of an argument both ways, but I do take Darien Fenton’s point that we still have the Committee stage to come and we can still work our way through this to a better result.

The 200 hours matter is going to be a mess. It covers any employers young people might be working for in that first 200 hours after they turn 16. If they go through a number of employers, then keeping all the paperwork and being able to check it will be difficult, and if there is some question mark or matters of legal cases, then it is all going to be a total mess—a bureaucracy for anyone in the Department of Labour who has to check it all. It will be a nightmare for employers and everyone else—and for what purpose? As the National Distribution Union has indicated, the average person will be 5 months in part-time work to achieve the hours, going through different employers. It will be a mess. It is not a fair system.

What this will lead to, really—and Hone Harawira used the term “youth slavery”—is that young people will be treated as second-class citizens, all for the cost of a few dollars extra from employers. Employers can afford it, but young people cannot afford being without those dollars, particularly at their stage of life. It is a new form of discrimination being created unnecessarily.

There is a positive side to the bill, of course, which is why the Greens are supporting it. It retains a lot of what was in the original bill, but this complication, this rotten compromise, only mucks it up. Hopefully, we can end that in the Committee stage.

Darien Fenton mentioned other countries, such as Spain, Greece, etc., where youth rates have been abolished. Sure, those countries may not be the main OECD countries in terms of gross national product, but we should be following best practice. I think the Green’s aspiration is that we should be modelling best practice in our labour relations. I think that all National’s talk about how having youth rates is important for productivity, and everything else, rings rather hollow in fact. It is not respecting the rights of young people.

The Greens respect the rights of young people. We should respect the 16 and 17-year-olds who are contributing—we meet them in the supermarkets day by day. We should defend their rights and we should defend the union movement and the activities that these young people have taken to achieve support for the bill. I think that it is a bill we should all support.

• Amendments recommended by the Transport and Industrial Relations Committee by majority agreed to.

Hon Dr NICK SMITH (National—Nelson) : It is with great disappointment that I inform the House that the Government has decided to reject the Building (Late Consent is a Free Consent) Amendment Bill, which seeks to address a very real problem for thousands of New Zealanders and for an industry that is worth over $18 billion a year to the New Zealand economy. This bill attempts to address a subset—

Darren Hughes: I raise a point of order, Mr Speaker. The member is a member of long standing, and we have delayed the second reading of the bill in order to enable him to be here tonight to move his bill, but I notice that he is a couple of minutes into his speech and he still has not moved the motion that the bill be read a second time.

Mr DEPUTY SPEAKER: He is not a couple of minutes into his speech, and he was just coming to that part.

Hon Dr NICK SMITH: So, despite my disappointment, I do wish to move, That the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time. I want to make the point to members opposite that the biggest issue on the minds of New Zealanders today is the huge dilemma presented by our economy. In our economy we have strong house-price inflation, which is resulting in the Reserve Bank governor having to wind interest rates up. The consequence of that is a record high exchange rate, which is destroying regions like my own that are dependent on exporters.

One would think that a Government might want to do everything possible to try to constrain house-price inflation. In fact, Government members sit back like Pontius Pilate, saying that this is nothing to do with them, that it is someone else’s problem. Well, I have to say to members opposite that their refusal to amend the Resource Management Act, with the effect that is having on the supply of homes—this is Economics 101, supply and demand—plus the bureaucratic costs that have been added with the Building Act 2004, are contributing to that problem and to New Zealand’s wider economic woes. There has been a dispute in the Local Government and Environment Committee about how big this problem is. The Registered Master Builders Federation told us that it now takes longer in New Zealand to get a consent to build a house than it actually takes to build it. That is disgraceful. That is absolutely killing off—

Darren Hughes: Whereabouts?

Hon Dr NICK SMITH: The member asks where. If we look in my own community of Nelson, we see that the problem is significant. We heard submissions from every part of the country, and if the member for Otaki actually bothered to speak to some practical people in his own electorate, he would know it is a problem there, too. I say to members opposite that even the Government accepts that this is a problem for at least 20 percent of building consents. Twenty percent of building consents means 16,000 homes a year. I cannot believe that members opposite would want to ignore a problem of that size.

I have some sympathy with the plight of councils. The reality is that this Government has imposed huge extra bureaucratic costs on them. The process by which building consent authorities are accredited is over the top. Where the Government has got its response to the leaky home problem out of order and wrong is that it has not bothered to strengthen commercial accountabilities, to make sure that those who build shonky buildings are held responsible. The end result is that councils have ended up as the guarantee of last resort of our building industry. Because councils face liabilities of not hundreds of millions but billions of dollars, they inevitably have become incredibly risk-averse and they, in response to that, are contributing to this problem. So I have some sympathy with councils, and the reality is that the Government has made the problem so much worse for them.

I will give a really practical illustration. I actually come from the construction industry, as does my colleague Bob Clarkson. I will give the House a practical example of what the Government has done. Here in my hand I have a building consent for a $240,000, very standard home in Nelson, built by Jennian Homes—a good company. There are 35 pages of documentation here, and the building consent fees in 2004 were $2,700. I have a second building consent in my other hand. As a consequence of the Government’s Building Act, not 30 pages but over 200 pages of documentation are required, and the fees for the homeowner in this case were over $7,600. I do not think members opposite have any idea of the bureaucratic, paper-ridden system that they have introduced into the building industry, or of the costs that is imposing on the average homeowner—costs that are contributing to the huge pressure on house prices that is doing so much damage to the New Zealand economy.

So what would this bill do? This bill focuses quite specifically on the issue of the legislative requirement for building consents to be processed within 20 working days. Every other New Zealander has to obey the law—so too should those administering the law. Members opposite effectively say that when councils breach the law, and go over the 20 working days, there should be no penalty. The most interesting part of councils’ and the Government’s argument is that they say it is perfectly proper for councils to put a penalty on ratepayers when they do not pay their rates on time. That is what councils do. Why do councils do that? They all admitted that they do it because a penalty incentivises people to pay their rates on time. Well, if it is good enough for the goose, is it not good enough for the gander? If it is good enough for the council to put penalties on citizens when they are late, what about when the council is late?

That is where members on this side of the House make no bones about the fact that we are on the side of the average Kiwi, not on the side of the bureaucrats. We are here to back those builders and homeowners who are trying to get ahead in life and are having a huge heap of paperwork and delays imposed on them.

Let me go through each of the arguments the Government has put forward as to why it is opposing this bill, to show how weak the Government is. The first thing it said is that if the council has to process the consent within 20 working days, it will not be done properly. Well, is that not interesting? We spoke with the Hamilton City Council. It has 100 percent compliance, its fees are lower, and it is on time. I note that Hamilton’s good mayor, Bob Simcock, a good former National member of Parliament, has applied some common sense in his district, and there is absolutely no evidence to show that his council is now doing anything less in terms of quality. Then, how about this for an argument from Labour? It said that if there is a penalty, the council will process the little consents and not the big ones. Well, I have heard some daft arguments. Members should remember that the size of the fees is proportional to the scale, so the size would make no difference to the financial incentives for the council to do the work on time. And then, the weakest of the arguments that have been provided by the Government in rejecting this bill is that it is unfair because the councils are having difficulties attracting the skills. Well, I have to say that if I do not pay my tax on time to this good Government and I say: “Look, I’ve had trouble getting hold of an accountant.”, does the Government say: “Oh, we’ll let you off your tax.”? Of course not! If I do not meet my regulatory requirements as a building owner and get an engineer on time to provide my annual building certification will the Government let me off the hook because there is a shortage of building certifiers? Not on your life! So I simply tell members opposite that they apply one set of rules for bureaucrats and a different set of rules for average citizens.

So I plead with this House, is it not time we took a stand on behalf of the average citizen? Is it not time that we stopped talking about reducing paperwork and actually made some attempt to do it? Is it not time that we stopped talking about compliance costs and actually did something about them? Is it not time to give the homeowner a win? Is it not time that we made councils accountable? And is it not time we actually ensured that when councils break the law there is a penalty?

The last point I say to members is this: National’s view is not that we believe there will be a cost to the ratepayer. Hamilton City has shown that with the right incentives building consents are done on time. As a result there is an increasing supply, homeowners are getting a better deal, and that is the right sort of way forward for us to provide fair laws for this country and for the building industry.

Hon CLAYTON COSGROVE (Minister for Building and Construction) : I will unpack the lack of logic around this bill, but, despite all the hot air, the member finished by saying two things. He said we should help out the average Kiwi. I will put that aside and get to that in a moment. But then he quoted the jewel in the crown of local authorities, the case winner for him, the Hamilton City Council, which he says is doing this, and he uses this as the only example in New Zealand that should win the argument logically in this Chamber for him. Well, it is interesting.

Let us read the reaction to his bill by a chap called Graeme Fleming, the environmental services manager for Hamilton City Council, the council that Dr Smith quite rightly cites as the be-all and end-all, as one that is doing this—[Interruption] Hang on, taihoa. The , on 17 February 2007, quoted Graeme Fleming of Hamilton City Council as saying that Dr Smith had got it wrong, that “It’s no use being a quick consent if it’s not a quality consent.”

The second thing that Dr Smith rabbited on about was this: he said, and I agree with him on this, that we should think, and do something for the average Kiwi ratepayer. I agree with that. We know that Dr Smith’s National Party policy is not to visit extensive rate increases on the ratepayer. That is what he said, and he nods in agreement, and I acknowledge that. I am glad to get him on the record. So what does this bill do? This bill says that if the person wanting the consent—the person wanting to build a house—rocks up to the council and the council does not meet the 20-day deadline, then the costs of that consent are absorbed by the council, and the person who wants to build the house gets the consent for free. That is what the bill says. But Dr Smith’s understanding of economics and cost accounting is so limited that he fails to acknowledge that the costs associated with that consent process do not vaporise into the ether, but are then spread across every other general ratepayer who does not want a building consent. If he is so naive that he thinks that local authorities will not raise rates in order to absorb those costs, then he is a lesser man than even I think he is. His understanding of what we should do to assist the average Kiwi ratepayer is sadly lacking.

This bill is a simple political pamphlet. It is thin; one A3 page is all there is of it. That is the intense thought process that Dr Smith went through. That is the depth of his knowledge and research. The bill does not address the systemic organisational problem that one finds in every organisation. If an organisation has a doubling in its customer base, and if it has a doubling in building consents, then the organisation needs to address the organisational factors within. Does the organisation have enough building inspectors, clerical people, and consent people to get the consents out? Are there management systems in place to deal with them efficiently? Are there resources to back the consenting process? Nothing in this bill addresses that. And Dr Smith got the following wrong. The Labour Party has said that councils would be incentivised not to deal with the small consents but to deal with the large commercial and residential consents—the big ones—because that is where the high risks and the big dollars are if a council misses the 20-day mark on them. And mum and dad average Kiwi ratepayers, whom Dr Smith purports to want to protect, get done over.

Dr Smith waxed eloquent last night and did the old parish political pump. He had a go at the leaky building stuff, saying we need quality, we need safety, and we need benchmarks. I agree. Yet his bill tonight does not propose to address any of those issues. It does not address the issue of a council that has not met the 20-day mark, but has addressed quality and safety issues. It says that if the 20-day mark is not met, then that is it. That is what the bill says. It does not address quality. It does not address safety. It does not address the inherent failures we have had in some local authorities when building inspectors, for instance, have not done their job. That is what the bill does not address.

The bill is a limp attempt at politics. I say this: members do not have to believe what I say about the bill; let us have a look at the reaction to it. I cite this wonderful piece of information called the East Coast Informer, and what that newsletter called the bill. A woman called Pat Seymour, a National Party member and chairwoman of the East Coast branch of the National Party, called the bill “daft”. Now, I am a young man—I know that people will not believe this—and I had to look up this word “daft” in the to see what it meant, and this is what it says: “daft—foolish, simple, stupid”, and the clanger for Dr Smith is that it says “insane”. It is an insane piece of legislation from a daft member. This is what a member of his own National Party said about him. I quote from Pat Seymour, and I can do no better than that member of the National Party, when she said: “From a local authority perspective this is a daft piece of potential legislation. The only one that will end up paying every time is the general ratepayer.” Pat Seymour, a member of his party, and a member of Anne Tolley’s electorate committee, said that. She understands absolutely what will happen to the average Kiwi general ratepayer.

She goes on to say: “All costs have to be budgeted for within a local authority. If a consent not provided within the described time frames is made a free consent to the applicant—then departments will simply budget a sum within the rate strike to allow for any such eventualities.” She said: “From my experience council officers make every effort to meet statutory time frames and there is usually a very good reason for consents being late.” Now they are the words from one Pat Seymour, East Coast National Party electorate chair, in January 2007. Do not judge me by what I say, judge the member’s own party member, who has worked out that this is a daft, to quote her, piece of legislation from a daft member.

This is about politics. This bill does nothing to address the systemic failures that have occurred within local government. So the question is: what is the alternative, and what should we do about it? Well, the member is right. We have embarked upon an audit and accreditation process. What does that mean? That means we go in with International Accreditation New Zealand, an internationally renowned accreditation procedure, and ask: “Are your systems up to it? Are they efficient? Do you have the skills and knowledge? Do you have the people and are you adequately resourcing”—

Mr DEPUTY SPEAKER: Do not bring the Speaker into it, please.

Hon CLAYTON COSGROVE: I am sorry. Are the councils adequately resourcing the consenting function? That is basic organisational theory. One does not go into an organisation saying: “Look, you haven’t got enough people, your systems are not good enough, you haven’t got enough resourcing, so if you don’t beat the mark, we’ll chop ya.” One does not say that—or say: “Give it away free.” That is not how one solves a logical problem. But we know that there is inherently a basic lack of logic with this member. That is what one does. One goes and addresses the systemic failure. And, of course, councils are doing that. Some councils are finding it tough. Smaller ones are struggling to meet the 30 November deadline, but they are working towards it. Palmerston North has met it. The Government has put 3 million bucks into a system to address the core issues.

The crowning jewel for this member was Hamilton City Council. Well, that has been torpedoed. His crowning jewel was his National Party policy. Well, Pat Seymour has put the sword into him tonight, slashed him open, and slashed the policy open. What will the member say? Will he get up and say that Pat Seymour is wrong and his colleague Anne Tolley is wrong? Yes—he nodded his head. Let us have a look at what Len Clapham, the Chief Executive of the Building Officials Institute, said. He called the bill “idiotic”. Let us look at what the media has said about this great genius from the National Party. The Christchurch Press states: “Nats’ own-goal”. The states: “Consent fee waiver plan nonsense” and “Consent bill very dangerous”. I have a quote from the —and I see that John Carter is here—“Building consent plan short-sighted”. These are quotations from the independent media.

So on all counts Nick Smith has no credibility. He stood up and said National wants quality in the building industry, yet this bill does not address that. He stood up and said National does not want costs visited on the general ratepayer. Well, this bill does that. Pat Seymour, the National Party member, agrees and knows it and has put it on record. On every count this flimsy political pamphlet of a bill, with about as much thought in it as he gives most of his work, has been done over. I say to New Zealand that the Government is dealing with this. Local authorities are stepping up to the plate and we are going to deliver to consumers in the correct way, in the proper way, and in a way that works—not with political stupidity. This is a daft bill from a daft, daft member.

JOHN CARTER (National—Northland) : It is with a great deal of pleasure that I get to follow the Minister Clayton Cosgrove. If ever there was a Minister who was right outside of his own ability, we have just seen it. He is a guy who has imposed so much cost on to New Zealand, on to local government, and on to individuals that he is a disgrace. Of course, he is part of the Labour Party and just being part of the Labour Party is a disgrace, anyway. But let me tell members that this Minister is not just a disgrace but also an absolute failure. In the next few minutes that I have to speak, I intend to explain why. The first thing is that when this Government took over in 1999, the Department of Building and Housing—or its equivalent—employed 31½ people.

Tim Groser: 31½?

JOHN CARTER: I think Clayton Cosgrove was probably the half, but the department had employed 31½ equivalents. Does anyone want to have a little guess at how many people are employed there today?

Hon Dr Nick Smith: 50?

JOHN CARTER: No, not 50. Give me a bit more.

Chris Auchinvole: 80?

JOHN CARTER: No. Would members believe it is over 300? Over 300 people are now employed in the Department of Building and Housing. It is a disgrace. How many percent has it gone up? Who can calculate that? Is it a zillion percent? In Northland terms, it is a zillion percent. It is an absolute disgrace. But do members know what the outcome is of 300-plus people writing rules and regulations? It is that we now have departments in the Department of Building and Housing. One department has to write some rules, the next department has to check them, then the third one has to get them and see whether they are OK, and, when they are not, it has to send them back because it has to be busy. So it goes on and on. But what is even worse—and this is why my colleague Nick Smith has brought this bill to the House, and he deserves to be applauded for it—is that we are over-governed and we have more compliance than we absolutely need. The reason is that local government now has to try to match the Department of Building and Housing. The upshot is that the bureaucracy in local government has grown from 30,000 in 1999 to over 40,000 in 2007. It has gone up 25-plus percent. The building inspectorate of the Department of Building and Housing—and the Government knows this—has grown like crazy in the number of people it has to employ. The reason for that is the volumes of paper. With the volumes of paper, the books, and all the things those people have to understand, they cannot keep up.

Let me tell my colleagues what is even worse, because it is another thing we need to understand. Do they know where the 300 people who are now employed in the Department of Building and Housing came from? They came from local government, of course. So why can local government not get staff to deal with what the Department of Building and Housing has put out? It is because they are all employed in the Department of Building and Housing. So local government is left without staff who are capable of responding to issues and administering the rules that their previous colleagues are writing.

Clayton Cosgrove is saying that we have got to get on top on this, we have to get the compliance down, and we have to make it easier. Let me tell members the next thing. When ordinary John Citizen goes into the council and says: “I would like to fill out a building permit, please. Could you let me have the pieces of paper.”, he comes out with a wheelbarrow full of reams and reams of paper. So John Citizen has a look around and says: “I don’t think I can do this.”; and the council says: “No, we would advise you to go and get a lawyer. Go and get someone who is capable of filling out the building permit, because you won’t be able to.” That is what Nick Smith is telling us. He is telling us that the compliance costs are just so hideous that he has brought in this bill.

Clayton Cosgrove is responsible. He is the one who has seen this grow exponentially. He does not care about compliance costs. The Labour Government does not care. Let me tell members what I think is the best thing Clayton Cosgrove could do. The one thing we can say about Clayton Cosgrove, as far as I know, is that he is not a liar. As far as I know, he does not lie. He would be better to take over David Benson-Pope’s place as the Minister for Social Development and Employment.

But let us move on from there, because there are several other things that are a real worry, and it is why my colleague Nick Smith has brought in this bill. Nick Smith knows that we have a leaky home problem in this country, and what he is worried about—and what we are worried about—is the fact that under Mr Cosgrove’s regime more leaky homes are being built. We have this department that employs 300 people who are meant to be making sure there are no more leaky homes. Members will be interested to know that right now the materials in current homes that are being built are faulty. Mr Cosgrove has a department that is meant to make sure that materials are certified. Over 600 sorts of materials go into houses. So far the Department of Building and Housing has managed to certify four. With a staff of 300 people it has managed to certify four materials that go into our homes.

If we get copper pipes from Australia they are certified for 50 years. If we get them from England they are certified for 60 years. But people are importing them from Asia with no certification at all. Those pipes are being put into New Zealand homes. They have been tested and they might last 7 years at best. Right now they are being put into our New Zealand homes. They might last 7 years—it is a lottery. What will happen is that in 10 years’ time someone will flush the toilet and mum will get a shower in the kitchen. That will be the upshot, and this Minister is responsible for this. That is why my good colleague Nick Smith has brought in this bill—to try to bring some focus on what is happening in the building industry in this country.

That brings me on to my next point, and it is why my good friend and colleague Nick Smith has brought in this bill. The worry in the building industry is that it will become so difficult to comply with the regulations that the Department of Building and Housing, Clayton Cosgrove, and the Labour Government have brought down that a number of people are thinking of exiting the industry.

They are seriously thinking of exiting the industry. It has got to the stage where they cannot make a living out of it. They are seriously worried about the fact that the compliance costs are so difficult, they cannot get by.

Let me finish on one other point, and it is a serious one. It is this issue of certification that the Minister talked about at the end of his speech. He talked about the fact that we do not need Nick Smith’s bill because all the councils will soon be able to be certified and all the building inspectors will know what they are doing, and therefore it will all be OK. The fact—and it is one of the reasons why my colleague brought in this bill—is that the Minister himself admitted that there are a number of councils that will not comply and be certified to be able to issue permits.

Hon Members: How many?

JOHN CARTER: There are at least a dozen. But there is more. We will have areas in New Zealand where people will apply to the council for a building permit and the council will say: “Sorry, we aren’t able to issue a permit because we’re not certified. We haven’t got the qualifications.” The cost that is imposed on councils by Mr Cosgrove and his Department of Building and Housing is all part of this. It is estimated that the cost to ratepayers in this country to try to comply with what Mr Cosgrove is asking councils to do will be in excess of $8 million. In fact, some councils are saying that it will be as much as $250,000 a council, and a number of them will not be able to pay it.

Mr Cosgrove stands up and tries to denigrate my colleague Nick Smith for bringing in a bill to draw to the attention of Parliament and the country an issue that seriously is a problem. Local government admits it is, the building industry admits it is, the people of this country know it is—they know there is a problem. It seems the only people who do not know are Mr Cosgrove and the Labour Government. They think it is all OK. They think it is OK to have 300 bureaucrats writing rules and regulations that are causing more problems. Nick Smith does not think it is; neither does the National Party. That is why we support what Nick is trying to do.

STEVE CHADWICK (Labour—Rotorua) : Normally, the Local Government and Environment Committee works very well on legislation. It is any member’s right to bring legislation to this House in a genuine attempt to fix a problem, but this bill simply does not do that. This bill is absolutely barmy.

Nineteen of the 24 submitters to the select committee were not just opposed to this bill but vehemently opposed to it, and I want to talk about the reason. Fundamentally, there is no such thing as a free consent and the member opposite knows it. Somebody has to absorb those costs somewhere; somebody has to pay. The National Party wants to hold or reduce rates, so it is a delicious irony that this bill’s approach—that if the council is late in processing a building consent, it has to waive the fee—has the perverse incentive of loading on to every other ratepayer in the community the costs of those who apply for a building consent. What are councils going to do when they do not get the fees and they do not get the levies? How are councils going to address issues like research, standards development, and dispute resolution? Who will fund those activities, which are needed now, in a very complex building environment?

But there is one other aspect that I find deeply disturbing, because it is punitive. Of course the local authorities voted against this bill. Why? Because it is punitive and provides the wrong incentive for them to improve their performance. I think that the local councils have had a very clear message in the National Party’s local government bill. It is perform, or penalise; those members say they will penalise and come down hard on the local authorities. That is why the local authorities rose up and were violently opposed to this bill.

Jacqui Dean: Violent? Not violent.

STEVE CHADWICK: They were very angry about it, actually. The Wellington City Council said it did not want a punitive approach. It would rather work with the industry and work with the Department of Building and Housing to learn about the new building code, to learn about the accreditation system, and to learn about the regulatory environment that is fixing systemically the dreadfully deregulated approach in the 1990s that resulted in the Hunn inquiry and the leaky buildings inquiry. I was involved with both of those inquiries, and they showed a totally fragmented, deregulated, and untrained environment. There was no trade training or apprenticeships at all during the 1990s. That is why we ended up with the systemic problems of leaky homes. The Wellington City Council did not want a punitive approach. It said it will fix it; it is not right yet—certainly not.

There is plenty of scope currently, a local government sector told us, to reduce delays in the consenting process. One quite good aspect of this bill is that we started to look at what we can do to improve the current problems. But the size of the problem is not half as big as the member opposite is telling us. Twenty percent of building consents are not granted within 20 days. So this bill is a sledgehammer to crack a nut. But we certainly do need to improve the process. Every local authority said that.

The local authorities also told us that 50 percent of the documentation they get before them is totally inadequate. They are blamed for the lack of documentation and rigour in applicant information that comes before them, and they then have to waive the fee. It is quite daft. They asked why they have to carry the burden of a shortage of qualified building inspectors and a shortage of licensed building practitioners. Who got rid of trade training and apprenticeships in the 1990s? It was National. It is no wonder we are left with this mess.

We heard some good submissions. The Property Council talked about the 19-day syndrome. Because of inadequate information from the applicant, not the local council, the council is going to stop the clock. It also said that a 20-day limit does not fit all situations. It was just a ridiculous time-limited boundary that did not take into account the complexity of the many building processes and the many building specifications that its members have to deal with. The Property Council wants incentives that are not perverse and do not induce silly behavioural responses. The councils will simply stop the clock, and we know that.

Some of the arguments we heard stated that delays in processing occur because of a multiplicity of factors. It is unfair to penalise the councils for that. The bill risks promoting speed in consent processes at the expense of quality, so what will the councils do? They will cut quality. I know that Dr Smith does not want that. We were told that the councils will make a deliberate shift in policy to deal with the high-cost, highly complex building consents first, because they do not want to carry the risk of losing the fee for those. So the ordinary punters, whom the Opposition says it likes to support, will be way down the order in the consenting process. It simply will not work.

We were also really concerned that the systemic failures that caused the leaky homes, and that we are trying to address, are simply not covered in this bill. It is absolutely silent on things that can be done to improve processes. It is simply a time-framing issue. The bill is silent on levies, and it is silent on consent application fees. There is no mention at all as to who will fund the research, the development of standards, and the dispute resolution services.

This bill is a failed approach to try to address a problem. The local authorities asked for some best-practice guidelines so that they can learn from one another. They all admitted that they needed to do better than this. They asked for some education on the building code. They asked us to go—as we did on the resource consent process—around council hearing committees and give education; to go and have some workshops twice a year with the building industry, so that applicants and developers do know what the requirements are. [Interruption] What a good idea! It has happened with resource consents, and that certainly improved the performance of the consenting process under the Resource Management Act.

This bill is fundamentally flawed. It was really quite tragic to have it in front of the select committee. Then the media response—not the select committee response—to this bill came out. The Queenstown Lakes District Council said it was nonsense and hoped it would not be passed, and the Whangarei District Council said it was just an appallingly short-sighted bill. We cannot do a quick fix in a member’s bill to try to fix these systemic problems.

I am very confident that the accreditation process, which is putting some pressure on local authorities to meet the deadlines, and the current review process are actually raising lots of issues for the Department of Building and Housing to go back and work on with local authorities. I know that developers and builders will come to grips with the building code in the new Building Act. As a result of that, in 10 years’ time we will be looking back to see that we no longer have the dreadful depth of problems of leaky buildings in this country. It is a problem that we all need to fix.

Hon BRIAN DONNELLY (NZ First) : Although I agree with the previous speaker, Steve Chadwick, that the Building (Late Consent is a Free Consent) Amendment Bill is flawed legislation, I must take issue with one set of comments that she made about apprenticeships and the fact that there was no vocational training in the 1990s. In fact the demise of apprenticeships actually occurred in the 1980s. Although it is true that National got rid of the Apprenticeship Act, it replaced it with the Industry Training Act, which referred to trainees. I tell members that in July 1996 there were 17,000 trainees and in July 1998, just before the demise of the New Zealand First - National coalition, there were 57,000 trainees—the biggest percentage increase ever. Nick Smith will tell members that the delegation for vocational education at that time was held by a New Zealand First Minister. I could also say that when the Modern Apprenticeship Training Act was put in by the Labour Government there were, in fact, 47 pieces of legislation that referred to apprenticeships, so they certainly were not completely got rid of at that time.

New Zealand First recognises that there is a problem with regard to delays in the issuing of building consents, and that there has been frustration on the part of some developers. Although New Zealand First members acknowledge that frustration, the situation is not as monumental as has been made out in some of the rhetoric that has been used. As has been mentioned, approximately 20 percent of consents are not issued within 20 days, but there are certainly not deliberate delays by local councils. We need to look at what is causing those delays.

There are two major problems. The first is that not all applications are completed adequately, so councils have to go back—

Hon Dr Nick Smith: Not true, because they can stop the clock.

Hon BRIAN DONNELLY: Yes, they can stop the clock. I am well aware the clock is stopped in those particular cases, but those applications are part of the problem. The second serious concern, which is a major concern, is the shortage of people with the capacity to carry out the duties of the job. The pool of qualified and experienced staff capable of carrying out that work is just not big enough to meet the demand from both the private and the public sectors. I think the mover of the bill would recognise that that is a genuine issue.

Hon Dr Nick Smith: I acknowledge that, but the Government has stolen them for the Department of Building and Housing.

Hon BRIAN DONNELLY: That does not really matter, because this legislation says that regardless of whether the Government has done that, it is—through the councils—going to penalise ratepayers, the citizens of New Zealand. That is where the cost is going to go, unfortunately.

Recruiting and retaining staff is becoming increasingly difficult for local authorities, to the extent that the New Zealand Society of Local Government Managers earlier this year initiated a staff recruitment and retention project to overcome the shortage. I think this legislation is totally unfair. Whatever the cause of the shortage of skilled staff, it is totally unfair then to come along with legislation that penalises councils because the shortage exists.

Be that as it may, the bill would lead to some—we believe—unacceptable perverse effects. As the Local Government and Environment Committee has pointed out, expensive, big developments would be given priority over small projects. Woe betide a householder who wanted to put in a small retaining wall with only a small consent cost, or a deck with only a small consent cost, because those applications would be shelved in favour of the big developments where there are big costs. That would cost the councils even more money, and that would have to be handed on to the ratepayer. Moreover, we believe that it opens a door for developers to put in proposals that are short on information and therefore to create delays themselves. It could lead—and this has been mentioned before—to unholy haste and shonky developments being approved. As has been said, it is not good to have a quick consent if it is not a quality consent. We have to concur with that particular proposition.

I will mention the worst outcome: the legislation would lead to increased rates for ratepayers. There is no doubt that when faced with a shortage of supply, councils could do only two things. They could either cough up or not receive the money because there are delays to consents, or they could put in huge salaries in order to attract staff. Whichever way is chosen, there would be additional costs and additional rates.

New Zealand First is the only party that has taken any constructive action over the issue of rising rates. National voted for Rodney Hide’s bill to freeze rates, and now it is putting up legislation that will increase rates. How is that for a contradiction? New Zealand First will not support legislation that will drive up rates. As I say, we put in place the rates inquiry. That was our initiative, and we drove it forward. I do not have a clue what will come out of that inquiry, because it has been completely independent and/or autonomous. However, David Shand, the chairman of the review inquiry, has already come out and said that within the next 10 years rates will be unaffordable. This bill would impose additional costs upon the ratepayers, and therefore we do not believe we can support it.

Nick Smith has asked whether it is not time to take a stand on behalf of the ordinary citizen. Well, by voting against this bill we believe that we are taking a further stand on behalf of the ordinary citizen to ensure no more drivers that will push up rates are put into the system.

I have to mention Pat Seymour, who has been referred to. She obviously has the confidence of the National Party, because in the 1990s she was the chair of the Early Childhood Development Board. She was appointed to that very important position by none other than the National Government, which obviously had confidence in her judgment about those things. It was Pat Seymour who said this bill is daft.

I finally refer to the Whangarei District Council, and I ask the member for Whangarei whether he can explain to that council why he will be supporting such short-sighted legislation. Thank you, Mr Deputy Speaker.

METIRIA TUREI (Green) : I do not intend to take a long call on the Building (Late Consent is a Free Consent) Amendment Bill. I have say the speeches have been very entertaining, given that the select committee process has been much more congenial than the debate tonight would suggest.

The Green Party voted in favour of sending this bill to a select committee, because we thought some useful issues could be explored. That was the case, and it was great to hear councils, and people involved in the industry, talk about the real issues. It became very clear that delays with building consents are serious and cost significant amounts of money to non-commercial developers, developers of smaller projects, and people doing small renovations. We are not talking about commercial developers of multimillion dollar projects. These people find it quite expensive if they do not have the time and resources to wait.

In our view enough is being done to try to resolve the problem, so we think Dr Smith’s bill is not necessary. In fact, it is the wrong kind of tool to sort out this kind of problem.

I understand that about 20 percent of building consents are delayed. There are a few primary reasons. Some applications are incomplete, and often that is just a lack of information. Definitely, there is a lack of qualified building consent processors and inspectors. I think that was the No. 1 reason given in the Local Government and Environment Committee. That is not the fault of councils. The question is whether councils should bear the cost for something that really is not their fault. There is also the difficulty faced by small councils in retaining qualified staff and in their disproportionate difficulty mismanaging the costs of building consents in their area.

Changes were made to the Building Act in 2004, but they have not completely bedded in yet. I think we will see advantages coming out of those changes later on that will deal with these problems to some extent. It is certainly true that solutions are needed, but ratepayers cannot take on the cost of the problem.

I agree there is no such thing as a free consent. I completely agree with Steve Chadwick. It is rubbish to say there is. Somebody has to pay. The Green Party certainly does not agree that all ratepayers should have to pay because of late consents, particularly where very large commercial developers benefit. They could probably afford it, but lots of ratepayers simply cannot.

Some solutions are in place such as the accreditation and registration of building consent authorities, which are required under the 2004 legislation. That accreditation is required to be done by November 2007, so it is worthwhile waiting to see that process bed in. We should see some good progress from there.

Some councils have systems and good models they could use. Some councils have a fast-track process where people pay more, but that is useful only if the councils have enough numbers of staff who are sufficiently trained to do that work. But that system can be useful sometimes. It is always an advantage if better information is provided to applicants and they know how to complete an application, so that there are no further delays when the council requires more information.

On balance, we do not see any need for this bill to progress any further. We do not think it is a sensible tool to deal with the problem, but it did provide the opportunity for having a useful exploration of the issues. So we thank Dr Smith for bringing it to the House. Kia ora.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Deputy Speaker. Kia ora tātou i tēnei pō. Kātahi te pire nei. Ko tōna tikanga me whakaae mai. Engari, arā anō te “engari”. Āe rā hoki, he raruraru kei reira nā te takaroa o te wā ki te āta titiro ki ngā tono hanga whare nei; “engari”, ko te whakairi i te pūtea te rongoā? He tauira anō tēnei o tērā ture kōura nei—ka hinga i konei, waihotia mō ngā rā 20, waiho ake mā te wā tērā e whakatika. Mēnā he kōrero tāu e pīrangi nei, e ai ki tā te Official Information Act tatari ake mō ngā rā 20 kātahi ka puta he māramatanga ki a koe.

Koi nei pea te āhua i tērā wiki mō Te Tari Hauora i a rātou whiriwhiri ana i ngā huarahi hei whakatau i ngā take o te hunga i haere ki Vietnam, te hunga kani rākau, te hunga noho mai ra i Paritūtū. Ka mutu, ko ngā tāngata kua rongo nei i te ngau o te paihana – tāria te wā, tirohia anō ā ngā rā 20.

I tēnei pire, koi nei te pōrangi o taua tikanga, arā, o ngā rā 20, mēnā ka whakamanahia tēnei wāhanga o te rāngai kāwanatanga ā-rohe. E 20 rā i raro o te Building Act 2004 ki te āta wetewete i ngā tono kia kitea mai ai mēnā ka eke te pai o ngā whare ki tērā e tika ana, ā, kia tū kaha tonu mō ngā tau. Ko te mate o ngā Ture Kōura nei, he wā tōna kāore he take o aua ture. Pēnei ki tā George Bernard Shaw i kī nei, ko te ture matua e kī ana, karekau he ture matua.

Kei te mōhio tonu mātou, mai i te mahi rangahau o Te Tari Hanga Whare i te Whiringa-ā-rangi o te tau 2006, kāre te tata o ngā 20 ō-rau o nga tono i whakaaetia i roto i tērā rā 20. Ko te 1 o te 5 tono i mua o te kaunihera, kāore i whiwhi whakaaetanga e tika ana mō rātou.

He aha i pēnei ai? Arā noa atu ngā tāngata i tua atu o te kaihanga whare i tōna kotahi, te āpiha kaunihera i tōna kotahi. Arā anō hoki ko te hunga nō rātou ngā whare, ko te tangata waihanga, ko ngā kaimahi i te tuatahi ka mutu i tua atu, ko ngā tāngata, whānau rānei ka noho i aua whare ā te wā.

Pēnei i tā John Scarry kōrero, he tangata pūkenga nei o Tāmaki-makau-rau ki te komiti whāiti, ko te hunga whai hua nā te āhuatanga o tēnei huarahi whakaaetanga, ko te hunga ka whiwhi, ka mahi rānei i roto i aua whare e kōrerohia ake nei, otirā, me Aotearoa whānui.

Nō reira me hoki ki taua kōrero rā. “Āe”, engari “But”. Arā noa atu ngā pātai. Ko te mea nui hei mea wānanga mā tēnei Whare, ko tēnei. Āe rānei, kāore rānei. Mēnā ka tangohia mai, ko te utu te tikanga ka utua. He mea whakatau tēnei i te raru, ka whakapoto nei i te roa o te tatari ki ngā whakaaetanga?

Arā anō hoki ētahi take. Mō ngā rōpū ā-rohe e āta wetewete nei i nga whakaaetanga a whare, ko tōna tikanga, kei a rātou ngā pūmanawa, me te kaha nei ki te āta whiriwhiri, whakatau rānei i ngā tono. Ki tā te Ture ā-Hanga Whare ko te tikanga, he tikanga arotake anō wā rātou kia taea e rātou te whakamātautau i a rātou anō, kia kore tātou e whakarite tikanga, ka hoki mai ki te ngau i a tātou ā te wā. Ko te pūtake o tēnei pepa whakaaetanga ā-whare, he hiahia kia kore ētahi mahi huna e noho pērā, arā, e noho huna. Mēnā ka puritia te utu mō ngā whakaaetanga i ngā kaunihera, tērā pea, ko tōna mutunga mai ahakoa ehara tērā i te hiahia, he akiaki tonu i a rātou ngā kaunihera, kia tere oti ngā tono mua mai o ngā rā 20. Kei wareware i a tātou, me āta haere kia kore ai e whakapau kaha mō te koretake noa iho.

Ko te mate o te whai i ngā here ā-ture me te kore aro ake ki take kē, ko te aronga kē o ngā kaunihera me ngā tāngata kaipakihi kia oti wawe nei ngā tono, mā te wā tērā e aki, nā, ka wareware ko te huanga ki muri. Ko te mutunga mai o tērā, ko ngā whare pākarukaru nei. Ko te aronga o tēnei ture hōu, ko te taumata tiketike e taea ana. Ko tōu titiro ki a koe anō, he mea nui hei whakapakari ake i ngā whakahaere me ngā whakaritenga engari, e hia kē nei ngā take hei mea wānanga whakatau mō ngā āwangawanga. Koi nei te kōrero i kaha tautokongia e ngā kaitono.

Nā te rōpū Hanga Whare o te rohe o Manawatū-Wanganui, te kōrero tino mārama ki a mātou. Hei tā rātou, he pōhēhē nui te kī, nā ngā mahi ngoikore ā-kaunihera anake i takaroa ai ngā tono. Hei tā rātou, arā noa atu ngā uauatanga. Ko te ngako ki tēnei take katoa, kia tukua ngā momo uauatanga here e whakaroa ana i ngā tono.

Nā, ki tā te Kaunihera ā-Wāhi, ko te ingoa pai mō taua raru ko te “capacity constraints of councils”. Tērā pea ko tētahi huarahi hei whāinga, ko te whakarahi ake i te hunga matatau ki te mahi hanga whare, me te hunga tirotiro whare. Ki tā te Kaunihera ā-Rohe o Franklin titiro, ko te uauatanga nui ko te whakaaetanga, ahakoa ko te ngoikore o te mahere, he ngoikore nō ētahi ki te āta titiro ki ngā mea pakupaku nei, me te kore pepa hei tautoko i ngā tono. Kei te kaha tautoko a John Scarry i tēnei kōrero. Hei tāna, koi nei te take nui mō te takaroa, arā, he koretake nō ngā tono.

Kāore mātou o Te Tōrangapū Māori paku tohe ki tērā whakaaro o Nāhinara mō te raru, otirā, ki tēnei pire—engari āe, ki te rongoā kē. Kei te mārama tonu mātou ki ngā raru e haere tonu ana mō te tautukunga, te ekenga me te kaha ka puta ki ngā kaunihera ia wā, ia wā. Kei te mōhio anō hoki mātou mēnā karekau he rōpū whiriwhiringa whakarongo ki ngā take Māori, kāre aua take e rongohia, e arongia. Ka mutu, kei te mōhio mātou mō te itiiti o te Māori e eke ana ki nga kāwanatanga ā-rohe. He āwangawanga nui tērā ki a mātou. I te tau 2004, ko te nuinga o te hunga i pōtingia ki ngā kaunihera, he Pākehā, arā, e 94 ō-rau, engari he aha tā te Māori? E 4.3 ō-rau noa iho. Nā, arā anō hoki, ko te roanga ake o te whāinga i tōna kotahi, ko ngā momo uauatanga e hia kē nei, pai mai, kino mai. Ki te pōhēhē tātou ka taea e tātou te whakatika ngā take katoa mā te moni i tōna kotahi, mā te patu i nga kaunihera ngoikore nei, me te pupuri i ngā moni, ki tā tētahi he tirohanga whāiti, he pōhēhē nui tērā.

E kore Te Pāti Māori e tautoko i tēnei pire engari, kei te kaha tautoko mātou i te hiahia ki te āta titiro, ki te māia, ki te mātau me te tautukunga o ngā rōpū ā-rohe ki te whakatutuki i ngā mea e hiahiatia ana.

Mēnā he painga o tēnei huarahi, koia tērā ko te putanga o ngā take pēnei i te noho tūturu mai, me te mātau o ngā kaimahi, he take tērā e whakaaro nuitia ana e mātou nā te āhuatanga o te māia o te ao Māori. Ā, me whai tikanga anō tātou kia aro pūmau ki ngā kāwanatanga ā-rohe ki ngā huanga, ki te noho ā-tangata, ki te tika me te pono. Ahakoa ēnei mātāpono katoa, ko tā mātau e tohe ana kia kaua he “āe/engari” i te taha. Kia ora tātou.

• [An interpretation in English was given to the House.]

[Greetings, Mr Deputy Speaker, and to all of us here this evening. What a bill! We could easily say “Yes”, but this is a “But” situation. Yes, there is a problem in the delays incurred in the processing of building consent applications, but, will financial incentives fix the problem? It is also another brilliant example of the golden rule—when all else fails, apply 20 days and hope that the problem will sort itself out. If we are desperate for information, the Official Information Act says just to wait for 20 working days and we will find out all we need to know.

Last week, the Ministry of Health resorted to the rule when puzzling over what to do with all those Viet Nam veterans, sawmillers, residents of Paritūtū, and in fact any person exposed to the risk of dioxin—call a review for 20 days.

In this bill we see the folly of the 20-days rule applied to the local government sector—20 days, under the Building Act 2004, to deal with consent applications to ensure that buildings will be built to a standard that will guarantee they are still standing in years to come. The problem with golden rules is that there is always some situation that makes them redundant. Or, as George Bernard Shaw said, the golden rule is that there are no golden rules.

What we know now, from the Department of Building and Housing survey undertaken in November 2006, is that approximately 20 percent of consents are not issued within these golden 20 days. One in five applications before the council is not receiving the approved consent it is entitled to.

And why is this such a problem? There are a lot more people at stake here than an individual builder and a council officer. There are household owners, architects, contractors, and developers, in the first instance; and of course, in the longer term, the people who will inhabit the buildings for years to come.

As John Scarry, an Auckland structural engineer told the select committee, the greatest beneficiaries of the building consent process are the people who will own and/or live and work in the building concerned, and the public of New Zealand.

So again we come back to the crunch “Yes/But” question. The issue for this House to determine is whether removing the requirement to pay fees will actually address the problem and reduce building delays.

There are other factors. For the authorities that undertake building consent review, the theory is that they have the capability and capacity to make the appropriate assessment. The Building Act requirements rely on these authorities being able to undergo the accreditation and audit processes with such efficiency that we do not set ourselves up to fail in the future. The purpose of the building consent process is to ensure that building faults are avoided. Withholding the fees that councils rely on from processing consents, may of course have the u

The whole problem with meeting fixed timing rules at the expense of all else is that

The Manawatū-Wanganui Regional Building Group summed up the argument for us. Its submission alleged that it was naive to assume that delays in processing building consents were due to the inefficiency of councils alone, concluding that in reality the situation is much more complex. The key to this whole issue must therefore be in unpacking the complexity of the factors causing delay.

The Property Council named the problem as the capacity constraints of councils. Part of the solution, therefore, may lie in addressing the gaps in numbers of qualified building consent processors and building inspectors. The Franklin District Council saw the problem as being the difficulty of verifying compliance because of poorly presented plans, poor attention to design detail, and a lack of supporting documentation. John Scarry also endorsed this, alleging that the biggest single cause for delay is caused by the design documentation submitted for consent being seriously deficient.

The Māori Party has no argument with National’s identification of the problem—well, not with this bill, anyway—but we most certainly have difficulty with the solution. We know there are ongoing issues with competency, with compliance, and with capability of councils. We know that in the local government sector, unless there are specific consultative forums where Māori can raise our particular issues, those issues generally do not get heard or addressed.

The Māori Party will not support this bill, but we do support the urgent need for a review of the capability and capacity of local body organisations to do the tasks we expect of them.

If this process has done anything, it has brought issues to the surface around retention and expertise of the workforce—issues that we are acutely concerned about in the context of Māori capability. We need to ensure that local government is as committed to quality, committed to representation, and committed to justice. However, for all these principles, we insist that there be no “Yes, but” about it.]

JUDY TURNER (Deputy Leader—United Future) : I will take just a brief call on this second reading, and I congratulate the sponsor of the Building (Late Consent is a Free Consent) Amendment Bill, because he has tried to address a very serious issue. I know that a number of constituents who have come into my own office outside Parliament have reported some really concerning stories, particularly around mistakes that had cost dearly in terms of time and wasted materials. So I appreciate what the member has intended to do with this bill.

This bill has also highlighted something that probably concerns United Future even more than what is being attempted here. I have had some very interesting discussions with members of the master builders association, and they have assured me that they believe compliance costs on homes could be reduced substantially as part of the efforts we need to be making to make housing more affordable. This issue needs to be considered seriously beyond this bill, because if the kinds of figures that were quoted to me by the gentlemen from the master builders association are true, then those figures are shockingly high. A sum of something like $30,000 may be able to be recuperated while still maintaining robust regulations around housing practice, and I think that is something that needs further exploration.

United Future is unable to support this bill going any further. We commend the Local Government and Environment Committee for the work it has done. Obviously, some very interesting content came out of the submissions, which confirmed a little bit for us some of the reservations we had about this particular approach to solving the problem. I think the biggest concern for us is that people who put a real effort into making a very sound application would end up paying the price for that work, and that those who had put in poor applications, with insufficient information and without meeting all that was required, and who then had delays as a result of the fact that they were required to put in more information, could end up getting a free consent process.

I am also concerned about the fact that this bill is a little bit like using a sledgehammer to crack a nut. Some other issues need to be considered around things like the combination of factors regarding the workforce, and the serious need for workforce development. The sector could improve to the stage that a bill like this one could become a very viable option, but in the current environment, with the lack of experts who are able to complete that work in a timely way, it would be a foolish step to take right now.

I do congratulate the member; I think his intention was extremely worthwhile. I think the discussion has been worth having, and I, for one, am very, very keen to go back and talk to people like the master builders in order to find out the specific detail on what we could be changing around building compliance, so that we can start to see the costs of New Zealand homes tracking downwards as part of a multifaceted approach to making houses more affordable in New Zealand. I am sorry that we cannot support the next stage of the bill, but we think there is more work that could be done.

RODNEY HIDE (Leader—ACT) : The ACT party rises to support the Building (Late Consent is a Free Consent) Amendment Bill, and to congratulate Dr Nick Smith and the National Party on taking a serious issue and dealing with it. I will go through some of the arguments we have heard being made against this bill in order to show that they clearly cannot stand up.

I have an interesting thing to share with members. Web cameras are a fantastic thing, and I just got an email from someone on the other side of the world who is following this debate. It is quite something, when one thinks about it, because most people in this complex cannot be bothered, but there we go.

Chris Auchinvole: Most New Zealanders can’t.

RODNEY HIDE: Most New Zealanders cannot be bothered to, but if people in Europe want to, then they can log in.

Mark Blumsky: Why would they?

RODNEY HIDE: I tell the member why they are logging in. They are figuring out whether this good bill will succeed, because it will be part of the measure of whether they will bother to come back to New Zealand and build houses.

I will go through what this bill does. It puts a financial penalty on a council if it fails to meet a deadline for handling a building consent. Do members seriously believe that when we pass a law requiring every person to get a building consent, councils can just take as long as they want? Members surely cannot believe that, surely not. There has to be a time limit. If we ask ourselves what we will do to enforce that time limit, it is actually quite simple: we put a financial penalty on the council.

Members opposite are bleating on about the costs to the ratepayers. Councils get whacked for costs regularly when they screw up. That is how it works. But this situation gets worse, because with this Government in power, we have seen the costs put on local government rise dramatically, and I did not hear the poor ratepayers being consulted then.

If we are serious about this, I would not mind moving an amendment even at this late stage, I say to Dr Smith. If we want to save ratepayers dosh, then let us put the penalty on the councillors and the staff, because they are the ones who are screwing up. Let us get the incentives right. I tell members that if 20 percent of deadlines are being missed now, once we put the financial penalty on the councillors and their staff, not one would be missed. So let us get that canard we heard against this bill out of the way. Of course there should be a penalty. My goodness, what sort of penalties do taxpayers and ratepayers have to put up with when they get it wrong? And they are the ones who are paying for these councils!

The second thing is that we cannot have a situation where a council can just take forever. We heard the complaint that if councils rush it through, then they might screw it up. Actually, my experience of life is that when people do things properly, they do them briskly and well. It is when they have forever to do things that they actually go wrong. We see with the leaky homes issue that this Government was ticking boxes left, right, and centre. It was taking forever and not doing any proper checking. But we all know ourselves, in our own lives, that when we have a time line, we work towards it, and that is what we should have with our councils. If they cannot do it properly in 20 days, then there is something seriously wrong with the councils. I am astonished to hear that 20 percent are not meeting their deadlines. It is disgusting.

Hon Dr Nick Smith: Master builders say it is 50 percent.

RODNEY HIDE: Dr Nick Smith has said that it is up to 50 percent. Members can just imagine the cost and the heartache that is going on with householders and in the building industry as a consequence.

I would ask Mr Donnelly, along with the Green Party, the Māori Party, and the Labour Party, whether we do not care seriously about that, and whether we are interested in having a Government that works. Are we interested in putting some stakes in the ground, and saying that this should be done in 20 days and, just to show we are serious, saying we have a penalty if it is not done? Or do we operate in a country that says that any old thing will do when it comes to Government and to local government—but woe betide the homeowners who do not tick all the boxes, fill out all the forms, and jump through all the hoops that councils and the Government put on them?

I say that if it is good enough for ratepayers to be penalised when they are late and for ratepayers to have to have time lines, then the same discipline should apply to local government in every instance. I commend Dr Nick Smith for this bill. I have to say that I am very disappointed in the parties that have backed up lazy and incompetent bureaucracy, at a cost to all of us, in defeating this bill.

MARK BLUMSKY (National) : I rise to stand and support my colleague’s Building (Late Consent is a Free Consent) Amendment Bill here in the House. I have to say that I have been in Parliament now for about 18-odd months and the select committee process has been one I have enjoyed. I feel it is in that process that one actually gets to see some real people and some real issues that are confronting New Zealand.

The Local Government and Environment Committee is a good select committee. We have had some good bills come before us, and I think we have made a positive impact on those bills. We have worked hard and, I think, with the right attitude. That is why Steve Chadwick must not let Clayton Cosgrove anywhere near our select committee. His performance today, and the way he spoke to members of this House and the way he turned what I thought was a positive discussion into a personal attack on my colleague who sponsored this bill, was sad. If he has that influence on our select committee, which works well together, then I think that will be a bad day, I say to Steve, for the business we do.

Dr Nick Smith has done a huge favour; he has brought an issue out of the closet and put it on the front page in a way that it was not. He has done New Zealanders a favour and he has done builders a favour. We have to fully understand that late consents are an issue. I never understood that. I am not a builder. I look at a hammer and go looking for the instruction manual on how to use it. So it is not an area of interest to me at all. But it came through in the submission process and in the select committee process that it is an issue to one heck of a lot of people—not just builders but many hundreds of thousands of householders and homeowners.

So I say to Nick Smith that I believe that a real difference has already been made by the fact that his bill has gone through the parliamentary process. He has woken up local government, big time. He has woken up many councils that were just drifting along with this issue. I tell members now that the councils got scared. They got very nervous that this bill was real and that it would really create a wake-up call within their local authorities.

The submission process did actually bring some pretty good feedback through, and I know the committee chair, Steve Chadwick, brought some of the comments to the table. I thought I would also take the opportunity to bring some of the other submissions to the table, because I feel that they add value to the debate, as well. I have just chosen a couple. One of them is from a gentleman by the name of Colin Hill, the former president of the august organisation Architectural Designers New Zealand. In his submission he slammed local authorities for the huge backlog of lodged consent applications that are just not being processed within the statutory period. His organisation represents architectural designers throughout New Zealand. As he says, we can speak to any architectural designer, builder, or group housing company and they will tell us of numerous cases of building projects that have been postponed or put off indefinitely because of the unacceptably high level of costly delays by local bodies in the processing of consents. We are looking to be productive country, a country that is encouraging growth, and this sort of commentary would have to be of serious concern. Colin Hill is obviously very supportive of the bill that Nick Smith brings to the House.

The other interesting submission came from the New Zealand Business Council for Sustainable Development in a media release. It surveyed 418 interested parties, and 63 percent of those supported the bill. I have to say that if we look just at those who are business proprietors, or self-employed, or business managers, we see that that number goes up to 77 percent. The survey revealed that 23 percent of those who applied for a consent in the past year rated their council’s performance as good, but 28 percent rated it as poor. Of the 400-odd surveyed, 28 percent said that this member’s bill would improve council efficiency, 21 percent said it would give them more certainty and allow them to plan, and 20 percent said it would force councils to comply and take accountability. I have to say that if we add those numbers up we get something like 70 percent saying that this member’s bill would make a significant difference to their ability to do the business.

It became very clear, even from those who were not in favour of this bill, that a high level of sympathy was being generated for the reason for bringing it forward. There was real sympathy from pretty much all the people who came in. They acknowledged—and this was a comment in the report—that more delays are occurring in the processing of building consents than is acceptable.

Local authorities, quite understandably, are concerned about this bill. I can feel for them. They understand and feel the downside on this. If they miss a deadline, they have to carry the can for it—it is all on them. They will get no fees, and that is a concern for them, for sure. So they, understandably, have a concern.

But this is where Brian Donnelly has it wrong. He was talking about the fact that a lot of extra people would have to be employed if this legislation were to pass. He said that all the extra building inspectors that would have to be employed would add a cost to the council wage bill and that the wage bill would follow through in the rates. Well, every consent that a council processes has a fee attached to it, so it is a matter of self-recovery. There is no added cost to a council when building inspectors are employed. All the cost of all staff being added to the council wage bill will actually be recovered by cost recovery.

One of the reasons I do not have the issues that the Government has with this bill, and why I am very, very supportive of it, is that there is a very simple fix for the problem, and that fix came though loud and clear in the submission process. It comes down quite simply to the fact that councils understand that the problem is caused by a lack of qualified staff—that is the issue, full stop. Let us be honest about it. I have not yet met a kid leaving school who is saying: “I want to be a building inspector when I leave school.” It is not what one would call the sexiest profession. I do not think I have ever heard—or that other members have, either—any one leaving school saying: “I’m going to be a building inspector when I grow up.”

Jacqui Dean: They don’t say: “I want to be a politician.”, either.

MARK BLUMSKY: Yeah—I did not say that when I left school. I did not say I would be a politician. So the building inspector career is not one that people are racing into. We can compound that with the problem that my colleague John Carter alluded to, and that is the fact that the Department of Building and Housing is absolutely taking the top people from local government. That is a fact for true. Also, business is going great for private consultants because of the inability of local government to do the business, so private consultancies are also taking the good people.

But good things are happening, because local government is actually making a difference. We heard very clearly that the answer is on its way, in that the New Zealand Society of Local Government Managers has commissioned research into shortages and is developing a staff recruitment and retention programme. That is happening, and the society is confident it will fix the problem. This means that the 20-day issue will not be a problem, which means that a disincentive like a no-fee for a late consent is actually more effective because it will move the slack councils forward. It will move those who do not have the excuses to be late. It will move them onwards because they will not want to incur the wrath of ratepayers by having to write off fees.

So the fact that a training and career programme is in development gives us the confidence that there will not be a shortage of building inspectors, which means there will be enough inspectors to do the business, which means that will not be an excuse for a late consent, which means there should not be as many late consents, which means those late consents are due only to very poor management or council governance and administration practices, which means authorities jolly well should be fined by a late fee if they cannot do the business. So I say to Nick Smith that his bill is a cracker, it has made a difference, and congratulations.

MARTIN GALLAGHER (Labour—Hamilton West) : I want to briefly compliment the previous speaker. I did not agree with everything he said, but I agreed with the tone with which he addressed the House. He emphasised the very good Local Government and Environment Committee we have, which is ably chaired by Steve Chadwick. In the select committee we take a very cooperative approach to a number of things, even in the case of this Building (Late Consent is a Free Consent) Amendment Bill where there was genuine division.

I also want to commend particularly the contribution of the Hon Brian Donnelly. I have to say I was a little sad that one member on the National Party benches took it upon himself to interject and interject rather than listen to some of the words of wisdom from the Hon Brian Donnelly, and I say for the benefit of that member that as he grows older he will realise that Mr Donnelly is a very wise man indeed.

I acknowledge that in the House we have a difference of opinion on the bill. I certainly acknowledge the work and effort that Dr Nick Smith has put into presenting it. I think the actual debate in the House is a good thing, and I think the work we did in the select committee is a very good thing, in terms of highlighting this issue. I respectfully differ as to the solution, but certainly the debate is a very important one to have.

I note that Labour opposes this bill for the simple reason that, in our view, it shifts the cost of building consents that take more than the 20 days provided for under the Building Act from the user to the ratepayer. We also believe that the bill risks adding to ratepayer or business costs and risks leading to a reduction in the quality of building consent processing and inspection. In our view, it would also put at risk capacity development initiatives for building practitioners who are already under way. I will quote in a moment from the majority conclusion in the select committee report. It is Labour’s view that, certainly, as a result of our very buoyant economy under this Government, New Zealand’s current building boom is partly responsible for processing delays. We note that existing provisions in the Building Act are already largely remedying these problems.

I also want to acknowledge the good work of many councils around the country—and I will talk in a moment about a collaborative relationship, which I do not think this bill will achieve—that are taking some very sensible steps to manage their workloads and to process those building applications.

In respect of the issue of staff recruitment, which I think is something that previous speakers on this side of the House, including Brian Donnelly and others from other parties, have highlighted, I just say that it was the considered view of the majority of members on the select committee that this bill would unfairly penalise territorial authorities that have had real problems in recruiting enough staff.

I think the bill would set negative precedents in the consent process, such as benefiting poorly prepared applications, which take longer to process than well-prepared applications. Notwithstanding the arguments I have heard tonight, it is still our considered view that low-fee applications would be disadvantaged, as clearly local authorities would have a real incentive to give top priority to the high-fee applications. In our view, high-fee applications, in effect, would be the priority.

I acknowledge there is a range of views on either side for and against this bill. On balance, however, I would agree—and I am not being gratuitous—with the East Coast electorate chairperson for the National Party, quoted in the East Coast Informer newsletter, which I think is a parliamentary publication from the local member, where he disagreed with this bill. I would not use—

Darren Hughes: What did she say?

MARTIN GALLAGHER: “She”—I apologise to Ms Seymour. I personally would not use Pat Seymour’s language. I would not use the terms she used, that from a local authority perspective this is “a daft piece of potential legislation” that will mean “the only one that will end up paying every time is the general ratepayer”. I am not going to use the words “daft piece of legislation”; I am actually going to acknowledge that, having sat on the select committee and having listened to the evidence first hand, I will not agree with the words of the electorate chairperson, Pat Seymour. I will not agree with her.

Sandra Goudie: This Government has probably already jumped on the council enough.

MARTIN GALLAGHER: I do not think it is appropriate that the member for Coromandel should be criticising the East Coast electorate chairperson. All I am saying is that I respectfully disagree with Pat Seymour, the National Party’s East Coast electorate chairperson. I am not going to use the words “daft piece of legislation”, because I accept, absolutely, that there is a legitimate concern with reference to this issue—

The ASSISTANT SPEAKER (Ann Hartley): Please be seated. We have a point of order.

John Carter: I raise a point of order, Madam Chairperson. I can tell you that Pat Seymour opposes the Labour Government. I wonder whether the member agrees with that.

Hon Members: Yeah!

The ASSISTANT SPEAKER (Ann Hartley): I just remind members that I am ruling on a point of order. There are two members who are very lucky to remain. They know very well that a point of order is heard in silence, and when I am ruling on it there is to be silence. That is a warning. The member knows very well that was not a point of order. Please continue.

MARTIN GALLAGHER: Thank you. My politics and those of Pat Seymour differ, but I acknowledge her community service. All I am saying is that the fact I have quoted a hard-working chairperson of an electorate committee of the National Party, whom I acknowledge, means that the views on this are not straightforward. There are even people who are strong supporters of the party opposite who do not agree with this bill. I was merely using that as a respectful example of the diversity of viewpoint. I said that I would not have used the word “daft”, because I respect that there were many submitters who came before the select committee who disagreed with the conclusion I eventually reached. I will not call them daft because of that.

In terms of the select committee considering a member’s bill, this was a useful, useful exercise. I listened very intently—as did the chair of the committee, Stevie Chadwick, who does a fantastic job, and other members—to the local authority submissions in particular. I think that local authorities are well aware that in some parts of the country there is genuine concern around delays in processing applications. But the majority of the committee respectfully do not believe that this bill is the way to change things. We believe that this bill is something of a mallet to whack a problem that is not necessarily as great as perhaps other members would say it is.

Hon Member: It’s a huge problem!

MARTIN GALLAGHER: Is it not sad that when someone with a slightly different point of view makes a respectful contribution to this House we have members opposite—not all of them, because there are some good members opposite—who probably have not done too much work themselves on this bill, ready to heckle and interject. I think it is sad that one or two members opposite did not listen to the very considered wisdom of Brian Donnelly.

In the time I have left I will quickly summarise the conclusion of the select committee. I compliment Dr Nick Smith in the sense that I think that this bill was a very useful bill. It really enabled us to consider the very serious questions around this issue. It certainly enabled us to consider what I thought were some very thoughtful and conscientious submissions, particularly from representatives of local government in New Zealand.

I quote from the select committee’s report: “We acknowledge that delays in the building consent process have caused frustration and increased costs for the building industry in recent years. However, the majority of us do not believe that making late consent a free consent is an effective solution. Many of the factors that cause delays in the consent process are not entirely under the control of local authorities. The most significant of these is the ability to recruit and retain qualified, experienced staff at a time of expansion in the sector and low unemployment. The majority of us are satisfied that initiatives planned or operating will reduce the problem of consent delays, but they must be given time to work. These initiatives include accreditation of building consent authorities and the recruitment drives being undertaken by some authorities.” The committee goes on to note: “The majority of us are concerned about the equity issues raised by the negative financial incentive set out in this bill. Poor applications, which take longer to process, would be more likely to be free than well-prepared applications, thus rewarding poor practice.” That is the view of the majority of the committee—its considered view in the light of the submissions we received. As I mentioned before: “Small (low-fee) applications would be disadvantaged as authorities would give priority to high-fee applications. The consent process might be hurried in some cases,”—and this is my real worry—“with poor-quality buildings being constructed as a result.” We certainly do not want to see that.

We oppose this bill, but I do want to commend the work of the select committee and all members of the select committee in raising what I believe to be a very serious issue. The select committee members, however, disagree on the solutions that have been suggested in this bill.

JACQUI DEAN (National—Otago) : The Building (Late Consent is a Free Consent) Amendment Bill is a very, very good bill. This bill, brought by my colleague Nick Smith, is an excellent bill, and I will tell members why. It is an excellent bill because it seeks to make councils accountable. It seeks to make councils accountable for providing building consents in a timely manner.

You know, I often reflect, and have often reflected in the past, that there is a difference between those who work for a local authority, or indeed, any bureaucracy, and those who work out in the business community. On the one hand, the person who works in the bureaucracy gets paid every fortnight. They get their annual leave, their other entitlements, and whatever else accrues to them. It does not really matter how they perform; they still get paid. On the other hand, the builder, the architect, or whoever is working in that sphere, gets paid only if he or she does the work—and there is a bit of a difference there. That is why this bill, the Building (Late Consent is a Free Consent) Amendment Bill, is so excellent.

Today and this evening we have been debating in this House the conflict and the friction between those bureaucrats who get paid regularly every fortnight, whether or not they provide the consents, and those who do not get paid if they do not do the work. Under the Building Act 2004, all building consent applications must be dealt with within 20 working days—and we know that. If a consent authority requires further information from the applicant—and that is fair enough—it can suspend the 20-day period until it gets the information. In other words, it can stop the clock, and that is fair enough. There is a contract here between the local authority and the person seeking consent. The person seeking consent should provide robust information, and the local authority should deal with that information in a good and timely manner.

It is interesting, is it not, that the Department of Building and Housing estimated—and I am reading from the notes here—that in November 2006 approximately 20 percent of consents were not issued within the right time frames. Twenty percent is actually quite a bit when one is talking about those builders who get paid or not depending on whether they get their building consent and can proceed with their building project. Maybe that 20 percent does not really mean much for those people who have dined on the public purse for the amount of time that a lot of the Labour members opposite have. But I can tell members that that 20 percent actually represents a lot of building consents that have been lodged with local authorities. The Government may not think it is a problem, but I do.

In fact, the Registered Master Builders Federation reckoned that the situation was even worse than that: “While [building consent authorities] might contend that, on average, they are processing consents within 20 days (as required by the Building Act), the truth for the building industry practitioners”—and these are the guys that stand or fall on whether they get their building consents, which means whether they can get on with their building project—“is that the consents are taking much, much longer.” Who cares about that? Does the bureaucrat who gets paid every 2 weeks care about that? Or does the builder, who lives or falls on whether he gets his building consent and can proceed with his client’s building project, care about that?

As the building consent authorities have noted publicly, with some building consent applications it takes longer to sort out consent issues than it actually takes to build the house. Those are words that one can gloss over and say: “Oh well, never mind, it is just a problem. It’s only 20 percent.” But I can tell members that for a builder in a small town like I live in, any delay in a building project costs money. Any delay in a building project means that the subbies do not know when they will be coming to work. Any delay in the building consent issued means that the solicitor will not get paid, that the architect will not get paid, and that the family who is hoping to move into the house will have to pay rent a little bit longer in its rented accommodation.

This excellent bill that my colleague Nick Smith has brought to this House is raising some absolutely critical issues for the building industry in New Zealand. I have noted that, as the Registered Master Builders Federation told the committee, it now takes longer to get a building consent in many parts of New Zealand than it actually takes to build a house. Where is the onus on the local authority to provide a timely building consent? Where are the penalties for the local authority if it fails to provide a building consent in a timely manner? Interestingly, when we were hearing submissions—I was part of that Local Government and Environment Committee that heard those submissions, and I was there on the day—we heard that there are no practical consequences of non-compliance for local authorities. I think it was Nick Smith who asked the chief executive how often he invoked the powers of section 203 of the Building Act in any of those cases, and the answer was—“What was it?”, I ask Dr Smith—not once.

So there are no consequences for the local authority that fails to issue a building consent in a timely manner. What does that tell our local builders, our local architects, and our local architectural draftsmen? It says that actually it does not really matter. They will not be paying their bills, they will not get paid at the end of the month, but oh well, never mind, that is OK. The local authorities are only doing their job, and shucks, we heard through the submission process that actually it is not the local authorities’ fault, because they cannot find enough planners. I have some sympathy for that position, but I note also that we heard submissions on this excellent bill in May, and I have not seen a Government bill come into the House to address the issue of the lack of planners in New Zealand. Where is the sense of urgency on behalf of this Labour Government to fix this problem so loudly identified by the local authorities? Well, the silence has been absolutely deafening.

There are a few basic truths in the discussion of this bill: councils should be accountable—they should be accountable to the elected members, and they should be accountable to the people who come to them to get consents. Interestingly, I was at a local government planning conference in Hamilton back in 2003 where the Hamilton City Council planners outlined their plan to become 100 percent compliant in dealing with Building Act requirements. That was back in 2002 or 2003, in Hamilton, with the Hamilton City Council. The local authorities want to be able to provide good service but they cannot, because they are absolutely tied up with the red tape associated with the new Building Act. In the small councils, which I am particularly familiar with, the engineers and the building officers—who all work in the same room because the authorities are small—are tied up in red tape as handed down by this Labour Government. I will quickly go through those requirements. There is the long-term council community plan process and the annual plan. The engineers are also trying to comply with the new drinking water standards and trying to comply with new sewerage scheme standards—in fact, they are busy.

I want to refute the argument that a local authority providing a free consent will provide a cost to the ratepayer. That is not true, because that will not be covered under the general rate. Building Act activities are rated on a cost recovery basis, so it would be quite proper to recover the building cost. [Interruption] If the members would care to listen—which they are not very good at doing for the building community—I will tell them that the building industry agreed at the submission process that it would be happy to pay a premium to get good timely service from building consent applications. What we are looking for here is accountability. We can provide a timely consent and it can be cost effective.

Hon Dr NICK SMITH (National—Nelson) : During the course of Jacqui Dean’s speech, the junior Government whip suggested—and I thought it was a very good suggestion—that we have a general election immediately. I seek the leave of the House that we have a general election, as suggested by the junior Government whip.

The ASSISTANT SPEAKER (Ann Hartley): Leave is sought. Is there any objection? There is objection.

• A party vote was called for on the question that the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time.

DARREN HUGHES (Junior Whip—Labour) : I raise a point of order, Madam Speaker. Party votes are meant to be conducted in silence, and the National Party is being very noisy.

The ASSISTANT SPEAKER (Ann Hartley): I just say to members that it is very difficult to conduct a vote if people are making a noise, and everybody knows that there should be silence during voting.

• A party vote was called for on the question that the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time.

DARREN HUGHES (Junior Whip—Labour) : I raise a point of order, Madam Speaker. You have just given a ruling that party votes are to be heard in silence. Mr Bennett, who finds it hard to control himself at the best of times, failed to listen to your advice and called out while one of the parties was casting a vote. It is a very simple rule. We conduct a vigorous debate, then we conduct party votes in silence.

The ASSISTANT SPEAKER (Ann Hartley): The member is quite right, and I guess I probably should ask the member to leave the House. But I will give the member a chance, seeing as it is nearly the end of members’ day. But I ask the member to apologise for his behaviour.

DAVID BENNETT (National—Hamilton East) : I apologise.

Hon BRIAN DONNELLY (NZ First) : I move, That the Education (Establishment of Universities of Technology) Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be considered by the Education and Science Committee.

In New Zealand we have a university of technology which is not a university of technology, because there is no such thing as a university of technology. At the same time, if we read between the lines of what the chair of the New Zealand Vice-Chancellors Committee told the Education and Science Committee as true, neither is it a university—yet. This is not to malign that institution, which is a fine one and which serves its students and New Zealand well; it is to point out the untidy state of affairs of the structure of our tertiary framework. This bill intends to tidy up the framework of our tertiary education system in order to future-proof it.

The tensions in the framework arose from the decision in the early 1990s to allow institutions other than universities to teach and confer degrees; a decision, I might say, that Clarence Beeby had gently suggested as far back as 1956. Two factors combined to create a rapid rise in degree programmes at non-university institutions. The first factor was the “bums on seats” approach that dominated the 1990s tertiary education policy, and that created incentives for institutions to rapidly develop degree programmes in a variety of areas. The second factor was the exponential growth in the sophistication and complexity of knowledge required for vocational and trade areas.

Polytechnics and institutes of technology have come from a very different history and set of traditions than universities. Indeed, the first mention of trades education is to be found in the laws of Hammurabi of Babylonia, formulated around 1800BC, about 1,500 years before Plato developed his Academy and Aristotle his Lyceum—the forerunners of universities. Those two were very aristocratic institutions.

In New Zealand our first university, the University of Otago, was established in 1869. The first lecture was given by G S Sale, the professor of classics, in which he claimed that education in Greek and Latin was of little value to a person whose life was to be spent in the ordinary trades or callings of a colony, but they were the means to a liberal education that would enlarge one’s powers, cultivate taste, and refine the manner of him who obtained it. Within 5 years Parliament had passed an Act that absorbed the University of Otago as a college of the University of New Zealand.

New Zealand polytechnics and institutes of technology can also trace their ancestry back more than a century. Although they are part of a national system of education today, their roots lie not in some grand national plan, but in a series of local initiatives from the 1880s to provide technical instruction for those who were among the nine out of 10 New Zealanders who went straight from primary school to work. The first such initiative was by the Wellington Education Board. When drawing became a compulsory subject in schools, teachers needed to be taught to draw, so the Wellington School of Design was established in 1886.

The point is this: society was able to function at the time with nine out of 10 young people entering work directly from primary school. It would be an absurdity to suggest that the same could happen today. That is a function of the increased complexity of our society and the greater levels of knowledge required in all fields of learning—in particular, vocational learning.

In certain fields the level of knowledge and skills required can no longer be publicly recognised with just certificate or diploma status. Degree titles are necessary. Ian Dougherty’s work Bricklayers and Mortarboards chronicles how institutions such as Unitec have responded to that demand for developing levels of knowledge. Construction management, quantity surveying, and business studies in 1992, then, later, design, nursing, environmental studies, engineering, and landscape architecture, are just a few of the areas where the level of knowledge justified degree status of the qualification in that domain.

Nowhere is the case more clearly demonstrated than in medical imaging. Up until 1990, the school of radiology at Auckland Hospital taught students how to take X-rays. Diploma status for the qualification was justified. However, medical imaging is one of the most rapidly developing areas of health treatment. Not only do graduates need to know about X-rays; they also need to know about computer tomography, ultrasound, magnetic resonance imaging, nuclear medicine, mammography, and interventional radiology procedures. Clearly, degree status in this field to master’s level is not only appropriate but required.

As institutes of technology built larger and larger graduate portfolios, it was inevitable they would want parity of esteem with universities for their qualifications. Therefore, in 1996 both Unitec and the then Auckland Institute of Technology made application for a change of status. This led to a flurry of activity, and the use of international panels to decide just what a university looked like beyond the vague definition in the Act.

One of the criteria that was arrived at was telling. It was that a university could have only a small proportion of sub-degree programmes. That is in tune with the definition of a university in the Act, which established that universities are primarily concerned with more advanced learning. The problem with this is that if an institution wants university status in order to achieve parity of esteem for its degrees, it must first proportionately reduce its sub-degree programmes. This state of affairs creates all the wrong incentives. Not only are sub-degree programmes the strength of our institutes of technology, but, according to the recent Leitch report from Britain, it is through increased participation in level 4 to 7 programmes that we create the greatest productivity gains for our national economy. Those level 4 to 7 programmes are the certificate and diploma trade and vocational programmes that are the very essence of these institutions.

The horse has bolted on graduate programmes in institutions other than universities, given that 16 percent of bachelor degrees are now taught by non-university institutions. The same could be said of postgraduate programmes, but the horse is not so far out the gate.

The submission by the New Zealand Vice-Chancellors Committee on the distinctive contributions of universities states that the Government must act to prevent further proliferation of degrees in non-research institutions. This may resolve the “bums on seats” problems, but the tertiary reforms will do that. What it will not do is accommodate the pressure for recognition of increasingly complex and sophisticated knowledge in trade and vocational fields through graduate and postgraduate qualifications. What it will not do is resolve some of the gatekeeping behaviour of the universities through the 1990s. What it will not do is resolve the issue of duplication of teaching infrastructure, which would result in degrees in these developing areas having to be taught, by law, within universities. What it will not replace is the within-institution scaffolding that is able to take place in, for example, the case of radiography and imaging.

A new class of institution is needed that has the characteristics of both a university and a technical institution with significant sub-degree programmes. Degree programmes would be taught within a research-based environment, but that research could be more applied scholarship and currency based, than that of our current universities. A university of technology would have a different balance from that of a university as defined in the Act.

The argument is advanced that every polytechnic in the country will rush off and want to become a university of technology. The tertiary reforms provide the tools to prevent such a gold rush. The Tertiary Education Commission should not be allowing degree programmes that do not fill a specific need. Institutions would have to advance a clear case for any graduate or postgraduate qualification in an area of endeavour normally covered by certificate or diploma recognition. Genuine evolution of knowledge and skills could be accommodated, while non-genuine claims could be rejected. Therefore, this bill leading to NorthTec or Telford Rural Polytechnic becoming a university of technology could happen only if the Tertiary Education Commission was not doing its job.

I therefore reiterate what I said at the beginning of my speech. This bill is about future-proofing our system for conferring tertiary degrees. I hope that parties in this House will see fit to support the bill through its first reading, so that the issues raised can be fully explored through public submission. Thank you, Madam Speaker.

Dr PAUL HUTCHISON (National—Port Waikato) : Thank you for the opportunity to speak on this Education (Establishment of Universities of Technology) Amendment Bill. National will be supporting this bill going to the Education and Science Committee. We must say that we are looking forward to enjoying the debate within the select committee.

This sector is particularly confusing right now with its eight universities, its 26 polytechs, its 42 industry training organisations, and its 800 private training establishments, and here the member is adding yet another category of university. I note that no one, other than Unitec and the member, has lobbied me to support this bill. Nevertheless, the discussion in the Education and Science Committee, hopefully, will be an elevated and enlightened one, and one where we can make progress on taking away the confusion that Labour has created in the tertiary education system, and bring sense and rationality to it.

I acknowledge Brian Donnelly for picking up this bill. But I also acknowledge John Webster, the Chief Executive Officer of Unitec. He is a man who has shown extraordinary perseverance and dedication in trying to achieve university status for the institution he has worked so hard for, for so long. I was shown around the campus by him a month or so ago, and also taken over to the western side of Auckland where a new campus is expanding. I must say that he has developed a very, very impressive diversity of courses, despite the Labour Government.

There certainly is an irony in Unitec wanting to become a university of technology. It insists that this is a different category from a university, but when we look back to the history of the early 1990s when the Auckland Institute of Technology and Unitec both applied to the Government to become universities, we see that, of course, only the Auckland Institute of Technology was chosen to be one—the Auckland University of Technology. Here we would have an even further confusing situation, where Unitec would be a university of technology, and we already have the Auckland University of Technology, but they are supposed to be different.

Here are some questions that the member has to let us know the answers to. How is this actually going to help students. Is it going to help students? Will it make them better off? Will it, indeed, ensure that the staircasing that he has been talking about will happen?

I note that he says in the general policy statement: “By comparison with research-led universities, their lower proportion of research post-graduate students, and intensity of internationally published research, will be offset by a particularly strong commitment to high level professional and vocational education, establishment of close links with business and industry, engagement in applied research and advanced practice, delivery of appropriate sub-degree programmes, and provision for pathways by which students can progress to higher levels of education and training as and when required to pursue their career goals.”

I understand that Mr Donnelly and Unitec feel there is a great need to have parity of esteem. Yet one really wonders whether just conferring the title of “university of technology” will do this. If we look around the world we can immediately think of highly esteemed universities such as Oxford, Cambridge, and Johns Hopkins, and, on the other hand, there is the Massachusetts Institute of Technology—not a university, but surely of hugely high esteem. It is an institution of only about 10,000 students, yet it does an enormous amount of research. That is another of the ironies relating to this particular bill.

I remember several years ago also debating in this Chamber the question of how many universities we should have in this country, and this bill may lead to many. The view that we in National had was that it really depended entirely on quality; the number did not matter so much. Of course, all the Labour Government wanted to do was to control the number; it was not worried about quality.

It is of interest to me that, in the background of this bill, the Education Act 1989 currently categorises institutions as universities, polytechs, colleges of education, specialist colleges, or wānanga, and there is a degree of flexibility, but not enough. However, since 1992, as we have learnt from Brian Donnelly, polytechs have been allowed to confer degrees up to PhD. I note that Unitec does have that full spectrum of certificates and diplomas all the way to PhDs.

I absolutely agree that technology and technology courses have changed dramatically since the 1990s. The example given of radiologists is absolutely pertinent; that technology has changed enormously during the time that I have been a practising obstetrician and gynaecologist. As the member said, the whole range from simple X-rays to ultrasound to magnetic resonance imaging has happened in the last 15 to 20 years. It is important that nurses and radiographers, etc., are able to staircase from diplomas to degrees, then perhaps to go on to PhDs and do research. However, the big question is whether a university of technology is needed to do this.

I also note that there has been considerable discussion about what constitutes a university. I am sure Dr Cullen will have some erudite and woolly definition of it, but The Concise Oxford Dictionary defines a university as “a high-level educational institution in which students study for degrees and academic research is done.” It does not necessarily mean that it is research-led, which is the situation or the understood preference of the eight universities in New Zealand. The Education Act 1989, which I think Brian Donnelly mentioned, is a little vague on the definition of universities here, but research rather than teaching is the vital focus.

That brings up some curious scenarios of what might happen in the future if, indeed, this bill is allowed to go through. We have a situation in New Zealand where it looks as though three or four or five universities are getting the lion’s share of the Performance-based Research Fund.

• Debate interrupted.