CHRIS HIPKINS (Labour—Rimutaka) : Let us be clear what the Student Loan Scheme (Repayment Bonus) Amendment Bill is about, once and for all. This bill is a precursor to the abolition of interest-free student loans. The policy of interest-free student loans is one we know that National opposed, and it is still opposed to it. John Key called it reckless and irresponsible. National never wanted to see it enacted in the first place, and it is getting ready to do away with it. We know that National will use the economic downturn to simply turn round and say that the policy is not affordable any more and that the Government will get rid of it. We know that this bill is a precursor to that because the only way that this bill makes any sense whatsoever is if we do away with interest-free student loans. If that is not the case, then there is absolutely no reason why anybody would want to take up the option in this bill. Why would students take up the repayment bonus when they are better off leaving the money in the bank earning interest, and then making a lump-sum payment at the end? We know that this bill does not make any sense unless interest-free student loans are done away with.

We know that the National Government wants to do that, and it will just be yet another one in the long line of broken tertiary education promises by National Governments. Let us go back to 1990, when National broke its promise to students. National members went around the country saying National would abolish student tuition fees. What happened? National got into Government, and tuition fees went up. The then Minister of Education, who travelled the length and breadth of the country saying that he would resign if student tuition fees were not abolished, put fees up. He went up and down the country signing pledges at every university campus that said he would resign if tuition fees were not abolished. What did he do? He put them up. Did he resign? No, he did not.

It gets worse. Not only did the National Government keep the tuition fees but it put up the parental means test for allowances, so that fewer students got allowances. And it got worse.

National increased the age for means testing from 20 to 25. None of this was in National’s manifesto. It was going the opposite way to what their manifesto said. Then we go to 1996, when National promised students a universal student living allowance. Did it deliver that? No! Thirteen years on, students are still waiting for the universal student living allowance that they were promised. Instead of delivering that, in the 1998 Budget the National Government changed the name of all funding for tertiary education—calling it the universal tuition allowance.

Hon Annette King: What a hoax!

CHRIS HIPKINS: What a hoax that was, because students did not see one dollar of the money that the National Government promised them.

This bill is yet another example. What about when Max Bradford went around the country in 1999 and said that the overall size of debt was not the issue because loans are an investment by the undergraduate? We know that that is what National thinks. Its members think that students should pay interest on that investment. Those members think that tertiary education is purely a private good, therefore anybody undertaking it should be forced to pay interest not only when those students graduate but also while they are still studying. That was the position of the previous National Government.

The Labour Government did away with interest on student loans while students are studying, and then it did away with interest in loans altogether. It was a policy that John Key called “reckless” and “irresponsible”. We know that National wants to do away with interest-free student loans, because those members never supported it in the first place. We are fully prepared for this to be yet another one of the National Party’s broken election promises. Its members went the length and breadth of the country during the last election, making all sorts of promises that they just knew they were not going to keep. We have seen tax cuts go by the wayside in the last few days, and keeping the interest-free student loans policy—implemented by the previous Labour Government—is likely to be the very next one to go.

MICHAEL WOODHOUSE (National) : I am delighted to rise in support of the Student Loan Scheme (Repayment Bonus) Amendment Bill. This is the last call in a debate that has been quite robust but, frankly, in the case of the Labour Opposition, somewhat nonsensical. It really beggars belief, does it not, that Labour members can stand up and claim, with straight faces, that this bill is not good for students who are saddled with debt. We have just heard from the member for Rimutaka, Chris Hipkins. He is so keen that he will take a call on just about anything and argue against it. He argued that, in effect, this bill is so good that there must be a hidden agenda. He has seen through it; there is a hidden agenda. This Government actually wants to encourage students to get out of debt sooner so that they can get on with their lives under less of a burden. That is it; that is all.

But the most extraordinary call came from Labour’s tertiary education spokesperson herself, Maryan Street. In her best Sylvester the Cat elocution, she accused the Government of being duplicitous. How on earth the Government sticking to its campaign promises and delivering its policy agenda in a timely manner is duplicitous, only she could explain. I will tell members what is duplicitous. It is duplicitous when a Government spends 8 years barely mentioning a policy then rolls it out 4 weeks before an election, as the previous Labour Government did with its cynical universal student allowance policy—8 years. I searched the Labour Party’s website for any reference to a universal student allowance, and I found none.

As recently as August last year the then tertiary education spokesperson, Pete Hodgson, incurred the wrath of the New Zealand University Students Association at a conference in Dunedin by saying that the policy was not on Labour’s agenda. Even in this Chamber a couple of months previous to that, in a debate about the concerning levels of student debt, when asked by a New Zealand First member whether Labour would introduce a universal student allowance Mr Hodgson said “… I have other priorities. I need to pay attention to the quality of tertiary education. I need to ensure that the completion rates continue to rise.”—and here is the real kicker—“I need to ensure that access—especially for Māori and Pacific Island students, which is well below par—must be increased. These things all cost money and I happen to place them above the move to a universal student allowance.”

Well, that must have really warmed the hearts of Te Ururoa Flavell, who spoke in this first reading debate, and his Māori Party colleagues. He must have been encouraged by such commitment but then destroyed by the announcement on 14 October last year, at a rally in Dunedin, that this not only was part of Labour’s agenda but also was a long-held vision of the then Prime Minister. That is duplicitous.

Ms Street also claimed in her speech that “it makes no financial sense to pay off more than is required of a loan that is generating no interest.” Hang on, is she not a member of the same Labour Party whose former member Mark Gosche said in response to accusations that an interest-free scheme would be abused: “It is like saying that all the students will go and borrow this money because it is free.” I am glad to say that very few people think like that. We now have Labour members saying “It’s free! Don’t worry about paying it back.” That is duplicitous.

Is this the Labour Opposition’s new approach to debt reduction? We know that New Zealand household debt is high in comparison with other OECD countries. It increased fivefold in the last generation, and more than doubled as a percentage of disposable income. But 24 hours after the previous Minister of Finance made his valedictory speech expressing concern that the Government “still has not grasped the significance of the profound contribution that the growing gap between saving and borrowing economies has made to the present economic crisis”, Ms Street is telling people not to bother getting out of debt, even when they are incentivised to do so—24 hours after the second parent departs, the Labour children are acting like the Lost Boys.

The member for Hutt South is a very clever and experienced politician and I take the opportunity to congratulate him on his return to the front bench—out of the cold of Coventry and back into the sunlight of the front. He probably could not resist the opportunity to take a call to say that black is white, that night is day, and that this opportunity would not be picked up by students, because they pay no interest on their debts. He said that smart students will take the money they would otherwise earn in interest, put it in the bank, and not pay down the interest-free debt. He challenged the accountants amongst the National caucus to say that this would not happen.

I am a chartered accountant, so I will give my professional opinion. This is an outstanding opportunity for students, and here is why. Let us say that the member for Hutt South has a mortgage—he is clearly far too old to have a student loan.

By some serendipity the bank offered him a zero interest rate that required him to repay the principal by regular instalments. Any extra payments would be supplemented by a kindly benefactor, thus reducing the number of regular payments he has to make, and getting him out of debt sooner.

Trevor Mallard would have us believe that he had turned down the supplementary principal payments because the interest is free. It does not make sense. Even he, who was giving a quite convincing performance, does not believe his own speech. He got a good way through the speech and then let the cat out of the bag by saying that graduates could save the money, earn the interest off it, and then pay their loan. I think he said that they could do it in the last 18 months or so. What he did not say was that the only way a graduate could take advantage of this would be if the bill was passed into law. I accept that he supports it; he just does not want to say it. All power to any graduate who is disciplined enough to do the savings thing and then repay it at the end, but I expect most will be happy enough to take advantage of the Government’s incentive to reduce debt quicker. Mr Mallard is really telling the House that he thinks this is a good bill; he just has to shout it down like a good Opposition member.

It is also interesting to note which Labour members were not there. Where was Iain Lees-Galloway, whose electorate is very much dependent on students? Where was Pete Hodgson, the Dunedin North MP? Where was the Labour member for the electorate that has the largest university in the country? Oh, hang on—she lost her seat, so she is next on the list. Well that is rejuvenation for you! I think those people are not taking part in this debate because they know that they will have to front up to their student electorate and explain why they oppose this very sensible legislation. Instead we have people like Mr Hipkins and Mr Nash, a fellow who became a bit confused about following like sheep, and tried to put us all to sleep like we were counting them. If his name was a bit different he would, in all likelihood, be on this side of the House, because his lack of enthusiasm certainly suggests he does not support this bill.

Although this bill is being introduced in the name of the Hon Peter Dunne—and I acknowledge the excellent work he has done in bringing the bill before this House—I also pay tribute to the hard-working Minister of Education, the Hon Anne Tolley, for her sterling work not only in bringing this very important National policy to this point but also for the timely manner in which she is delivering on the promises that National made prior to the election around the education portfolio. I strongly support this bill. It will be good for students. It will arrest a mildly concerning rise in student levels of debt. I look forward to its passage through the House, for the benefit of our students and all of our graduates. Thank you, Mr Assistant Speaker.

Hon PETER DUNNE (Minister of Revenue) : I move, That the Education and Science Committee consider the Student Loan (Repayment Bonus) Amendment Bill, that the committee report finally to the House on or before 30 July 2009, and that the committee have the authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

• Motion agreed to.

Hon MITA RIRINUI (Labour) : As the Hon Nanaia Mahuta is not in the Chamber, I am more than happy to take a call in the Committee stage of this bill. Just to recap much of the earlier debate, it is important that we go over some of the issues that were canvassed, debated, and certainly thrown around the Committee at that time. I welcome to the chair the Minister of Māori Affairs, the Hon Pita Sharples—I welcome him back. Kia piki te ora ki tō hoa rangatira.

[May your good lady’s health be restored.]

As stated previously in the Committee stage, the bill was introduced with some very, very essential and long overdue changes. There is a strong focus on the establishment of the Māori Trustee as an independent organisation. The necessary changes to the Maori Trustee Act were put into place to legitimise much of the activities of the Māori Trustee.

This bill was introduced to the House under the previous Minister of Māori Affairs, the Hon Parekura Horomia. Our support for this bill still stands, although when people listened to the earlier debate in the Committee stage they may have wondered whether members in this Committee were really aware that this bill was introduced by the previous Minister.

Essentially, the bill was divided into the Māori Trustee Amendment Bill and the Māori Development Amendment Bill in order to address two distinct subjects. The first was to introduce changes to establish the Māori Trustee as a stand-alone organisation. This sets up a new independent statutory corporation to further Māori economic development by using the resources available to Māori. Having considered and heard submissions on the bill, the Māori Affairs Committee concluded that the first intention of the bill was to establish the Māori Trustee as a stand-alone organisation, and Part 1 is essentially focused around that. But the committee expressed the view that the arrangements proposed for the statutory corporation to further Māori development were very contentious and that they naturally deserved further consideration. That is desirable, and that sentiment was expressed during the round of consultations on the bill. Although there was support for the Māori Trustee as a stand-alone organisation, it was also made clear that Māori economic development would benefit very much through the utilisation of the Māori Trustee funds.

In terms of the main changes to the bill, we see that there are changes to the termination and appointment of the Māori Trustee. The changes to the operation of the Māori Trustee accounts make it very clear that where money held in the common fund has been invested, the investments are to come back into the fund. I suppose that this change was necessary to make that very clear, because obviously it has not been clear in the past.

It is also interesting that section 41 of the Maori Trustee Act 1953 allows the Minister of Finance to recover the amounts paid for the expenses of the Māori Trust Office before 1 July 2008. The previous Government was authorising the writing off of the accumulated debt of the Māori Trustee. The Crown wants this bill to pass through all its stages in the House. Obviously, we have seen some changes over a number of months.

This is a very, very important step forward for the Māori Trustee, as the bill clarifies a lot of the trustee’s operations and functions, as well as making it very clear that it will become a stand-alone organisation. I look forward to the next debate we have about the Māori Trustee taking another gigantic step forward by playing a major role in the acceleration of Māori economic development. In the past, we have seen organisations benefit from Māori Trustee funds, and I see no reason at all why that cannot continue into the future. I would be very, very interested to hear the views of the Minister of Māori Affairs, the Hon Dr Pita Sharples, who is now in the chair, on the way forward for Māori through the assistance of the Māori Trust Office.

Hon TAU HENARE (National) : I will go back to where we were in the beginning in terms of what Part 1 of the Māori Trustee Amendment Bill does. But before I get to that point, I say that I suppose my colleague Mita Ririnui was saying that he wanted a bit of recognition. There was a cry for a bit of recognition that this bill was essentially the previous Labour Government’s bill. Well, I will give my colleague the recognition. After 9 long years, this bill is what Māoridom got—the Māori Trustee Amendment Bill. I congratulate the previous Minister of Māori Affairs, the Hon Parekura Horomia, who did a sterling job trying to get this bill through.

But let us not forget that the bill, in its other clothes, was actually a bigger bill, and that the second part of the bill was the real humdinger. It was not particularly about independence, or about a stand-alone agency, and it did not have a lot to do with the appointment of the Māori Trustee and how to get rid of the trustee if we did not like him or her. Instead, it was about the $35-odd million that was going away from the Māori Trustee, and about the Government using it as some sort of model of Māori development.

This bill is specifically about the independence of the Māori Trustee, as per any other entity that we have in Government. The Māori Trustee is a stand-alone organisation. Prior to these provisions, it was always on the coat-tails of Te Puni Kōkiri—or, as it was called in its former life, the Ministry of Māori Affairs. It was always part of that big picture of the Ministry of Māori Affairs. In fact, the previous Māori Affairs Committee was quite happy to see the Māori Trustee come away from the apron strings of Te Puni Kōkiri. We are quite happy to see this bill go forward.

One of the issues that my colleague the Hon Nanaia Mahuta brought up in her kōrero last week was about the appointment of the Māori Trustee, and how he or she could be dismissed. New section 6(1), in clause 7, states: “The Māori Trustee is appointed by the Minister.” I have some questions to ask about the appointment of the Māori Trustee by the Minister of Māori Affairs. The bill does not really set out the process of how we get to that position. Is it that somebody hands in his or her CV, and the Minister has a look and handles the appointment process? I think it is a must that we say not only that the Maori Trustee is appointed by the Minister of Māori Affairs but also how he or she is appointed and what sort of process we use when we appoint that person and when we wish to terminate that person’s appointment, if, for some reason, the Minister feels that is necessary to do so. Overall, it is a good start in the 21st century.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti) : Mihi atu ki a koe e te Minita Māori, e Pita, tēnā koe.

[My acknowledgments to you, Pita, Minister of Māori Affairs, greetings.]

I will reconcile some of the matters progressed by the previous speaker about the great term that I undertook in steering the Māori Affairs portfolio. When that member was the Minister of Māori Affairs, he did nothing. When I came into Parliament, unemployment was running at 21 percent, the minimum wage had not been touched, and a whole lot of our people were in disarray. But I will recognise that member’s effort in starting the commissions that he established. I thought they were good under his tutelage.

Paul Quinn: I raise a point of order, Mr Chairperson. Notwithstanding my great respect for the honourable member, I fail to follow his train of thought as it relates to the Māori Trustee Amendment Bill, and, in particular, to the Committee stage.

The CHAIRPERSON (Eric Roy): I think that is a little heads-up that probably is in order. If we are using these examples, they should be comparative to Part 1. I ask the member to continue.

Hon PAREKURA HOROMIA: I was getting there. The issue with this bill, in all of its parts, is timing. Certainly, the accountability issues that have pervaded the Māori Trustee over a long period of time need to be dealt with. I am very pleased that the Minister of Māori Affairs continues to take those provisions through.

The issues relevant to the Māori Trustee as a stand-alone organisation, as outlined in new sections 4 and 5, are provisions that the Labour Party was committed to and is keen to follow. The issues around accountability in new subsection 6(1), in clause 7, which provides that the Māori Trustee will be appointed by the Minister of Māori Affairs, as was brought up by the previous speaker, are truly issues that need to be dealt with. The accumulated funds that the Māori Trustee manages are beneficiaries’ funds, as the previous speaker continually reminds me. The bigger part of the bill—which he suggested has started to disappear—has now become the Māori Trustee and Māori Development Amendment Bill. It is about kick-starting assets owned by Māori to help those who were short of cash flow. The beauty of the Māori Trustee system is the management of multiple layers. Multiplicity pervades the title.

There were some really unfair situations relating to the Māori Trustee that Māori people had to put up with. Evaluations of Māori properties, as discussed during the genesis of the original bill, which is now split into two bills—and this is some of the detail of that discussion—are recognised in the sense that they are considered similar to Pākeha properties, and there is the issue of saleability. The real issue is that those property owners are paying the same level of rates, yet they will never sell that property. There is a contradiction in terms. The freeing up of the Māori Trustee, ensuring that the role was more transparent, and that accountability, in some way, came back to the people were the reasons behind the second thrust of the original bill, which now makes up the Māori Trustee and Māori Development Amendment Bill.

The Māori Trustee has stood the test of time. The services purchased from, and paid for, by the Crown are those services that had to be differentiated, because they were stuck together. The bill is quite specific that those services are differentiated. There is a whole host of things that the Māori Trustee can do in a better fashion, in my mind, but which have not yet been done. So if one takes the basic fundamentals of what comprises Māori land, one adds multiplicity, which is brought about by a succession plan whereby the title or hectarage is divided amongst all family members. That is the Māori situation. The land does not necessarily, or generally, go from one owner to the next owner. That multiplicity then makes it unmanageable, yet the premise that the land is valued as land of production, similar to Pākehā land, is something that it really has to be measured on. I cite the Mangatū case in relation to the rates that Māori pay and the value they cannot get because they do not sell. It seems quite weird.

The bill also makes changes to the way in which interest on money held in trust in the common fund is determined, because that is something we have to be very clear about—about it being banked and the interest gleaned off it, then minimised, and returned to the owners at a lesser rate. That is not fair. The bill provides that the Māori Trustee must pay the amount earned by the trustee in interest, less the management fee. The Māori Trustee will be required to review the amounts paid on a quarterly basis in light of appropriate market rates.

One point I want to make is the unfairness on Māori beneficiaries in relation to what the nation, the State, or the Government places upon them. The property is valued like anybody else’s property. It is rated like anybody else’s rates. Māori owners actually pay huge rates in areas like the Bay of Plenty, North Auckland, Hawke’s Bay, and Tai Rāwhiti. Huge amounts of rates are paid, but Māori do not get the benefit of selling their property. This bill will make things better.

AARON GILMORE (National) : I am honoured to stand up and talk more on the Māori Trustee Amendment Bill. I spoke in the earlier part of the Committee stage of the bill. We are now talking about Part 1, and I want to focus on one particular clause, which I think a number of members have spoken about, which is clause 11. Clause 11 amends a number of sections in the original Māori Trustee Act and talks particularly about the issue around distributable income and about who is entitled to income and who is not. In the area I am from in the South Island we have talked about the $35 million fund that was going to be set up in a statutory corporation for use for Māori development. But I want to talk about some of the people whose money that would have been. Clause 11 protects that in many ways. Many people who are listed are owed money by the Māori Trustee. In particular, I want to talk about one family: the Johnson family. The Johnson family comprises six individuals on the Te Wai Pounamu register. They are entitled to about $38,000. That is $38,000 that that family would not have received had this bill passed in its earlier form, as the former Minister of Māori Affairs proposed it. In particular, Mr Richard Johnson was entitled to $28,747.35. That is $28,747.35 that would have gone, had this bill been done in a different way. Clause 11 is a very important clause, and I think it is important that we make a good account. It allows the ability to give back the income earned off this land, which the previous speaker spoke about, to those people like Richard Johnson and his family—his $28,747.35.

Another important part of this bill, in particular—and the previous speaker spoke about this—is clause 12 and the repeal of section 41 of the Māori Trustee Act. Clause 12, which repeals section 41, takes away an enormous debt that existed to the trustee from the Minister of Finance. Again, that means that Richard Johnson and many others in a similar position would be entitled to make sure he and the rest of his family—including John Johnson, Mary Johnson, and Moira Johnson—got the $28,747.35. In fact, a number of families are entitled to many more funds than the Johnson family is, and one of the good things about this bill is that it will make sure that that money is protected and that mechanisms of governance are put in place to ensure that these families, who are in need and are entitled to this money, get it in time. It might be that the Māori Trustee sets up a mechanism just like the Inland Revenue Department has done for people to claim refunds, and promotes in a stronger fashion how to get this money back to their families so they can spend it on the things they think are necessarily, not that some bureaucrat in Wellington thinks are necessary.

Another important aspect of this bill—as has been touched on by many other speakers—is around the setting up of the independence of the Māori Trustee. That is an important aspect that has not really been talked about in this Committee stage. One of the roles of the Māori Trustee is administering a large number of Māori scholarships—in particular, one that is in the name of Sir Apirana Ngata. He is one of the most famous former members of Parliament, who has been honoured in a special way. That scholarship is one that, I must admit, I wish I knew about when I was at university. It is something I would have applied for, but I did not know it existed. Te Puni Kōkiri has had too much oversight of the Māori Trustee. In particular, that means that a scholarship in the name of one of our greatest New Zealanders has been hidden a bit behind the skirts of that organisation. I do not think that is really wise.

The other things that have been spoken about this bill—

Hon Parekura Horomia: Te Puni Kōkiri’s a good ministry.

AARON GILMORE: Apparently so.

The other big issues that exist in this bill that have been talked about include worries around the appointment of the Māori Trustee and the removal of the Māori Trustee if issues arise. If one looks at the bill one sees there are many mechanisms, should the Māori Trustee need to be replaced for impropriety. There are many mechanisms to deal with that situation. They are very clear that the trustee can be removed, should the Minister decide to do so. The Māori Trustee is actually appointed for a period of time. It is not a job for life, in many ways. I think that is important, as well.

The other good thing about this bill is that it actually requires disclosure. Disclosure from the Māori Trustee has been a problem for some of these beneficiaries, like Mr Richard Johnson with his $28,747.35. I am sure Mr Johnson—if he is out there listening today—will be ecstatic to know that he is entitled to $28,747.35. I think one of the problems that existed with the trustee is the ability to disclose how the money flows through, who is entitled to it, and where it actually is. One of the important things that exists here is the vision, values, and mission of the Māori Trustee—as outlined in its annual report—which are to provide a productive and sustainable framework for the development and utilisation of Māori resources that the Māori Trustee administers. That sounds pretty good. The previous speaker stood up and said that that was the idea around his statutory corporation and the use of funds for that statutory corporation. That already exists as the vision of the current Māori Trustee. We have to talk about how we use that $39 million in assets and funds for the best use of those people who are entitled to that money, including the Richard Johnsons of the world.

Previous speakers have spoken about the 111,000 hectares of land. Yes, it is problematic and, yes, this land is highly unlikely ever to be sold, which is one of the reasons why the protective provisions around Part 1 exist: to make sure that the land can be retained, returns can be earned, there are funds in terms of management fees, there is no debt issue because of the repeal of section 41, and people like Mr Richard Johnson can actually receive the funds they deserve.

Some of the other particular issues that exist here are the economies of scale and the uncertainty around some little things, particularly around the management fee. Part 1, as it has been put forward here, allows some changes around the management fee and gives more certainty and surety for the deduction of the management fee, which can be given back to the recipients, like Mr Richard Johnson and the rest of his family.

The other aspect that has some issues is around the confusion that existed between Te Puni Kōkiri and the Māori Trustee—where the roles and entitlements actually start and stop for some of these things. Whose job has it been to promote whether Mr Richard Johnson is entitled to $28,747.35, and where does Te Puni Kōkiri’s role start and finish? Part 1 outlines in a clearer fashion the vision, values, and mission of the Māori Trustee and how it will be much clearer in terms of its governance. I think that is a good step, and it is wonderful for Mr Richard Johnson and other families of the world. If we can get more of these funds, like the amounts for the Johnson family and many others, back to those families, with the Māori Trustee as it will function under this bill, then it will be a neat thing for them to be able to use.

In fact, I am actually shocked that more members of this Committee are not standing up and talking about the Mr Richard Johnsons of this world, and making sure they are aware of their entitlements. If those people are not listening, then maybe members who know them can pass on the fact that the Māori Trustee is set up to make sure these people get what they are entitled to. As the previous speaker said, some of these families may be greatly in need, particularly in these tough economic circumstances, and if we can get some of the money they are entitled to back to them, so they can use it for their own families to do what they want to do for their own homes, or whatever, then they will have the choice to spend their funds in the way they wish. I think that would be a good step, and particularly so in the economic times we have today.

I want to touch on just one more thing. One of the key things about the change in the $52 million debt is that the debt treated as a one-off, of course; it means that it can never happen again. One of the important things in relation to governance under Part 1 is to make sure that the Māori Trustee is managed in a certain way so as to ensure that the Māori Trustee does not incur such a large debt owed back to the Crown, and that $52 million does not get racked up again. To have a $52 million debt and $39 million in assets and funds means that the Māori Trustee is in negative equity, which is not good for Mr Richard Johnson and the other people who might not get their funds, given the uncertainty around the equity position of the Māori Trustee.

I think this bill is non-controversial. The only issue that has been controversial has been the $35 million statutory corporation that was originally proposed by the previous Government. The previous speaker is right: we as a new Government are happy to run with this bill, because with the removal of that proposal it is a good piece of legislation, and it will be good for Mr Richard Johnson and the other people out there who are entitled to some of the funds that exist in there. In the main, the Māori Trustee can deliver what it can do, in education, land management, and other things, in terms of getting money back to those people who deserve it the most. There is nothing wrong with that. We have heard discussion from some members on the other side about who is responsible for how good this is, and who is not. But I think we should all be focused on how we get the money held by the Māori Trustee back, in the most efficient way, to the Johnson family and to the other people who are entitled to funds that currently exist, rather than thinking about how we can best spend the $35 million. The Johnson family is entitled to its $37,000 or $38,000, and Mr Johnson himself is entitled to his $28,000. We should be focusing on how we get the Māori Trustee to operate in the best way and to maximise returns. Thank you.

KELVIN DAVIS (Labour) : Tēnā koe, Mr Chairperson. Tēnā rā hoki koe e te Minita, e Pita. I am happy to stand again in support of the Māori Trustee Amendment Bill, and in particular I want to return to new section 5, which I think is an important and essential part of the debate. New section 5, which is inserted by clause 7, states that the Māori Trustee must act independently of the Crown, “free from any direction or instruction from the Crown.” This is great news for Māori. This bill, which was introduced by the previous Labour Government, sought a way for Māori to have resources at their disposal and the authority to make decisions as Māori over those resources.

In effect, the intent of this provision is to ensure that Māori assume—and rightly so—tino rangatiratanga over the Māori Trustee. This was never going to be the case while the Māori Trustee was attached to a Government ministry. There are many ways in which tino rangatiratanga can be interpreted, and this is one of them—to have the ability and resources to make decisions for oneself. So I expect that new section 5 will be welcomed by Māori the length and breadth of the country.

The big problem with this bill, though, is that it does not go far enough. The bill was split in two, with the first part of the original bill being about establishing the Māori Trustee as a stand-alone organisation. The second part of the original bill, which provided for the establishment of a statutory corporation to further Māori economic development, is being left to the side for now.

I spoke earlier in the Committee stage about clause 11, which substitutes sections 26 to 26B and refers to money held in a common fund being invested in the fund. New section 26(1) states: “any income derived from investment of the money forms part of the Common Fund.” If Māori were to think boldly and outside of the square, we could see the Māori Trustee becoming an integral part of Māori development, and financial gains being reinvested in the common fund so that the fund available grew and we could reinvest in more Māori initiatives. This would mean that we could see Māori entrepreneurs and business people investing and supporting yet more Māori to be successful. Success could well breed success, and we could lift each other out of the oft-quoted cycle of dependency. We would then be enabling more and more Māori to become financially independent, and when we have that sort of independence, we take a large step towards tino rangatiratanga. This would be a case of Māori helping Māori. It would mean a giant step away from dependency on other people to fund and support our initiatives.

Just this last Saturday I was talking to a person from Te Rarawa, up in Ahipara, who, along with a group of friends, has invented a device that will aid recreational fishermen while out boating. These Māori entrepreneurs have had to make contact with non-Māori investors, who have poured close to $30,000 into developing and improving the prototype of this invention. I congratulate these backyard inventors, and I believe that their product will be a success. The problem for these inventors—and for all Māori—is that the investors will expect a dividend to be returned to them, and so they should. They have taken on board a financial risk, and they expect payback somewhere and somehow. I believe that it would be a lot better for Māori if that dividend were paid back to Māori, so that Māori received all profits from a venture like this. Sure, there are risks attached, but the Māori Trustee should be someone with a nose for investment and the ability to put in place strategies to minimise those risks. If the Māori Trustee invested in that invention, then royalties could be paid back into the common fund, and the growth of that fund could be used to invest in further Māori ventures. This is progressive thinking.

We could be doing a lot to help already established Māori businesses and enterprises. Some say that this is purely a Māori bank. In response to that, I say, firstly, that there is nothing wrong with Māori owning banks—and there is a subtle implication there that we are not actually capable of running a bank—but, secondly, and more important, this is about Māori becoming financially independent and successful. We have the basis here for Māori to develop financial success, so why do we not just go for it but put checks and balances in place to make sure those risks are minimised? But, true to Māori form, instead of having a go, we hear the knockers and pessimists spouting off, and basically, by their backward-thinking conservatism, they continue to condemn Māori to being second-rate citizens.

New section 6D(1), inserted by clause 7, explains that “The Māori Trustee may appoint the employees … to enable the Māori Trustee to exercise the powers and perform the functions and duties of office … effectively and efficiently.”

Hon TAU HENARE (National) : I am intrigued to hear my whanaunga from the north, Kelvin Davis, talk about progressiveness, the idea of a Māori bank, and the financial independence of the Māori Trustee. He talked as though the money that was in the common fund—or any fund, really—belonged to Māori. Well, let me point out that it does not belong to all Māori; it belongs to the beneficiaries whose land is under the auspices of the Māori Trustee. The dividends from that land should be paid to those beneficiaries. It is their money.

I am not sure whether Labour members can understand that this money is not for all Māori; this is about the beneficiaries. This is about the shareholders and their property right. So when people talk and wax lyrical about the ideas of a Māori bank, I say that they should first and foremost think about whose property right they are taking away in order to establish this so-called brilliant idea of a Māori development fund or bank. I also want to say that this issue has absolutely nothing to do with Part 1; Part 1 is about the independence of the Māori Trustee. It is about the stand-alone nature of the trustee. Part 1 is about how the Māori Trustee is appointed, and also about how the Māori Trustee is removed from office—and a few other things I have not got to yet. All in all, yes, it is great to see the Māori Trustee break away from that influence of Te Puni Kōkiri and strike out on his or her own. But let us not forget that the purpose of the Māori Trustee is to look after the assets of owners of land, and of shareholders of land. The position was not set up to do anything else. When we want to change that then we should spell it out, as the previous Minister did last year when he wanted to use beneficiary money. There is still an argument about whether that was beneficiary money or whether it was the interest on beneficiary money, and I still contend that even the interest belonged to the beneficiaries. If we are to go down that path, then let us have a bigger discussion and a bigger consultation around the issue than there has been in the past.

Nobody disses the idea of Māori development. Nobody disagrees with a fund for Māori development. The argument was always about where it came from. If it came from a property right that was owned by beneficiaries, then that was the sticking point. Nobody wanted to pooh-pooh the idea that the former Minister had; it was all about the propriety of taking the money out of a fund that was essentially a shareholders’ fund. I make those points with all due respect to my colleague and my whanaunga from the north.

Hon MITA RIRINUI (Labour) : I thank the speaker who has just resumed his seat for that valuable contribution to the Committee stage of the Māori Trustee Amendment Bill and for reminding us that we are, in fact, discussing Part 1 of the bill. Having said that, in the next breath he wandered off on to other matters totally unrelated to Part 1 of the bill, but I will come back to him in a minute.

My colleague the Hon Parekura Horomia, the previous Minister of Māori Affairs, who introduced this bill to the House, raised some interesting matters about the difficulties the Māori Trustee has in terms of identifying beneficiaries of funds held within the Māori Trustee Office. One of the previous speakers from National, Aaron Gilmore, also made reference to that particular matter and to the difficulties around it. He mentioned a particular person—a Mr Richard Johnson—and quite a substantial amount of money being held in the Māori Trustee. There are many similar instances where the Māori Trustee has held funds on behalf of beneficiaries who have not stepped forward to claim those moneys, and there are legitimate reasons for that. Apart from the fact that many beneficiaries are not aware that they have these funds sitting there, waiting to be uplifted, many of those beneficiaries no longer exist, and it is difficult to deal with that particular matter—

Paul Quinn: They are not with us.

Hon MITA RIRINUI: I thank my whanaunga from Ngāti Awa for that elocution lesson. Many of those beneficiaries have passed on, as we might say, and no succession orders have been lodged on their behalf. As the previous Minister of Māori Affairs mentioned, it is a major task to attempt to locate potential beneficiaries, particularly as many of them no longer even take an interest in their family business or their family estates. Some of them, like the member from Whakatāne said, are no longer with us, and that itself is a reason why the Māori Trustee has accumulated such a high level of funds that are being held in certain accounts.

We have certainly debated a lot around what Part 1 of the bill essentially means in establishing a stand-alone Māori Trustee, and the necessary legislative amendments to ensure that the responsibility of the Māori Trustee is clear and that strong and robust financial management systems are in place. There has been a lot of debate around clause 11 of Part 1 on when the funds are held in the common fund and invested. Any returns on that investment must come back into the common fund and not, as has been the case in the past, transferred into the general fund. I always find it an unusual practice when Peter pays the bill and Paul receives the benefits. It is certainly very unusual—

Paul Quinn: Not me. I wish they would.

Hon MITA RIRINUI: Yes, something like that. I really found the contribution from my colleague Kelvin Davis to be very, very valuable, and I did not appreciate the attack on the quality of his contribution. I am reminded of a speaker who was previously on his feet. Before his return to Parliament he worked for an organisation that was established using funds from the Māori Trust Office. That is not the only case where that has happened in the past—where organisations have been set up using funds from either the general fund or the common fund of the Māori Trust Office. I do not know why people get so uptight at any suggestion that the funds held by the Māori Trustee should be directed to Māori economic development. It is a bold step, but it is also a step that I believe will be taken responsibly. I could not say with my hand on my heart that it has been done so in the past. I am sure the Minister of Māori Affairs will have some views about that.

CHRIS TREMAIN (National—Napier) : Tēnā koe, Mr Chair. Tēnā koe, te Minita. I wanted to take a call on Part 1 of the bill just to clarify a few figures for the benefit of members of the New Zealand public who may be diligently listening to this debate, so that they can put into context exactly what we are talking about with regard to this Te Pire Whakatikatika Kaitiaki Māori—the Māori Trustee Amendment Bill. We are dealing with an organisation that manages a considerable number of parcels of multiple-owned land. In fact, I have just been speaking to the officials, who told me that 111,000 hectares of land are managed by this organisation. That is close to 250,000 acres of land that is managed by this organisation, and I put it to members of the Committee that in some parts this land is being well utilised and has been well developed, but in many instances it is possibly well located but is considerably underdeveloped. When I look at my own rohe back in Heretaunga in Hawke’s Bay—and I know the Minister who is sitting in the chair today, the Hon Dr Pita Sharples, can speak fondly of that part of Aotearoa—I see there is a considerable amount of land managed by the Māori Trustee in Hawke’s Bay. Some of it is returning real value; a lot of it is underdeveloped and could be better utilised. That is essentially what the organisation exists to manage.

But over the course of time a common fund has also been developed. I asked the officials to put some numbers around that common fund, and I was told that at 31 March 2007, which I must admit is somewhat out of date, it stood at $39,496,263. So we are talking about a serious amount of capital in that fund. But I must add to what my colleague Tau Henare said today: that money has been accrued over time from rents and from interest for the beneficiaries of the land that is managed in many small parcels by the Māori Trustee. It is their money. I am informed—and it is an interesting debating point raised by my colleague from the north—that the money is currently not invested in small entrepreneurial businesses or Māori business. It is actually invested in a range of portfolio investments at quite low risk at this point in time, and that money is returned to the common fund. In effect, it is not being returned to the beneficiaries of the fund.

There is a dilemma in regard to this. When the legislation was first put up, it was proposed that the money be utilised specifically for wider Māori development, rather than being for just the beneficiaries, and that is where the issue arose in regard to this side of the House opposing that part of the legislation. What we now have is the Māori Trustee Amendment Bill. Two bills have come out as a result of the original bill that was put up, which proposed establishing a stand-alone Māori Trustee, and also proposed establishing an economic development arm under it. We have now divided that bill into two bills, and Part 1 of this bill gives effect to the independent establishment of the Māori Trustee role.

If we look at the various clauses of the bill, we see that new section 3, “Māori Trustee established”, which is inserted by clause 7, provides the legislative means to separate the Māori Trustee from Te Puni Kōkiri; new section 4 deals with the capacity and powers of the Māori Trustee; and new section 5 deals with the independence of the Māori Trustee. Many speakers in the Committee have spoken this evening about how important it is that the Māori Trustee is independent—particularly for the sake of the beneficiaries of the small parcels of land throughout New Zealand, so that sensible decisions can be made about the rents that accrue from that land, and so that, ultimately, the best use or purpose of that land is fostered.

New section 6, also inserted by clause 7, talks about the appointment of the Māori Trustee, and, interestingly, states that the Māori Trustee is appointed by the Minister. So there is a strong involvement by the Minister of Māori Affairs, who will play a key part in taking this legislation forward.

KELVIN DAVIS (Labour) : As I listen to the debate going on, I keep coming back to the feeling that this bill has missed a number of opportunities. I hear what my whanaunga over there is saying about money being held in the common fund. I am not talking about taking, taking, taking, and depleting that common fund; it is about investing—it is about Māori investing in Māori, and returning funds for Māori.

Hon Tau Henare: It’s the Government’s job.

KELVIN DAVIS: I come back to what I said. It is a missed opportunity—and I just heard my whanaunga say it is the Government’s job—but what I am talking about here is that this is an opportunity for Māori to invest in Māori and return to Māori. It is about aspiration. What I am hearing is just dull conservatism that is missing a huge opportunity to actually do something for Māori. I hear about underdeveloped land, I hear about significant sums of money just sitting there doing very little, and I hear the member Mr Tremain saying the money is already invested in low-risk opportunities and then invested back. What is wrong with investing in Māori initiatives? It does come under Part 1 of the Māori Trustee Amendment Bill, in that the Māori Trustee, acting independently from Te Puni Kōkiri, should have the ability to do something significant so that Māori get a greater return.

I will now touch on new section 6D, inserted by clause 7, in Part 1, which allows for the Māori Trustee to employ staff. Here is another perfect opportunity for us to actually do something. Instead of just employing people to do administrative things, we could employ those people, make sure they have financial skills and acumen, and get around to helping our whanaunga who are trying to develop businesses and enterprises and trying to be entrepreneurial. We could use this opportunity to get those employees of the Māori Trustee out amongst the whānau, and help them to work with the investment that has been made in them, so they can make more money and then return a dividend to the common fund.

It is not about just taking money; as I said earlier, it is about Māori having tino rangatiratanga—having the resources and the independence to make decisions for the betterment of themselves, and then making returns to the fund. The beneficiaries would not miss out. Mr Gilmore spoke about a Mr Johnson being owed thousands of dollars—that would not change. That money, if it were invested back into the common fund, could still be accessed by Mr Johnson, if and when he is found, and his family—and Mr Gilmore named them all.

As I say, I believe this is a missed opportunity. We, as Māori, need to be aspirational and see how we can develop ideas further so that we do not stagnate and do not continue to have our hands out and be dependent on other people’s help to invest in and develop our businesses. I take this short call to reiterate that I think this bill does not go far enough, and I would really like, when Part 2 is discussed and debated, for us to open our eyes and think outside the square, so that Māori do develop and become financially successful and independent. Kia ora.

Hon Dr PITA SHARPLES (Minister of Māori Affairs) : I acknowledge the previous speakers for giving their general support to the Māori Trustee Amendment Bill. A lot of people speaking on this bill today have been major architects in its development and in getting it to this stage, and I congratulate them on their efforts, particularly the previous Minister of Māori Affairs, Parekura Horomia, who introduced the bill and sent it off to the Māori Affairs Committee, where it went through the select committee process.

As everyone knows, the bill is one part of a two-part bill—the Māori Trustee and Māori Development Amendment Bill—that was divided by the select committee. This division took away the economic development part of the original bill, and left the Māori Trustee part, which is what we are considering today. The bill gives the Māori Trustee stand-alone status; at the present time the Māori Trustee is an employee of Te Puni Kōkiri—a staff member.

Under the bill, the Māori Trustee is appointed to that role by the Minister of Māori Affairs. Appointment by the Minister gives the position the mana that it deserves. Many would see flaws in the Minister’s having the appointment process in his or her hands. However, there are some benefits, as well. It guarantees that there will be transparency in the appointment and that there will be a selection process by which the Minister will seek the acumen and experience required to carry out the role, so that it is not left to chance. In some ways there is support for the idea that the Minister does this. That support came through in the consideration of this bill, and that provision is in the bill now. The appointment is an administrative process, and—as I said in my second reading speech—I, having the role of Minister at the moment, have committed to consulting and to ensuring that this process is definitely open.

In answer to the question about the removal of the part of the original bill about the economic development of the Māori people, and the suggestion that it would be good to see an economic development arm of the bill, I say that the opportunity to establish some sort of pūtea, or bank, to help Māori economic development—say, for small-business enterprises—is still a possibility, and there are Māori moneys around that could be called upon to support such a venture. However, I am also really happy to say that the promotion of Māori economic and business development is currently in action, and a lot of that action results from the Māori economic summit conference, which we held about the end of last year. It also results from the Prime Minister’s Job Summit, which followed the Māori economic summit conference, and the proposals that came out of that summit. There is quite a bit of activity in that particular area.

I acknowledge an earlier speaker’s comment that a Mr Johnson’s $28,000 would have gone down the tubes if the bill had not been changed, but I say that that would not have happened, because the common fund moneys are not, and never were, to be touched in that operation. The economic side of the bill, which was to be called Māori Business Aotearoa New Zealand, was to be funded through the general purpose funds and not the common fund moneys. So Mr Johnson’s money would have been quite safe and used appropriately.

I am happy to take the call and to acknowledge the contribution of members, especially those who served on the Māori Affairs Committee last year. Kia ora.

PAUL QUINN (National) : Tēnā koe, Mr Chair. Tēnā koe, te Minita. I start by saying I am pleased that the Hon Nanaia Mahuta has not been left to battle on the Opposition benches, as she was last week, as the only speaker who was put up by the Opposition. Up until about a minute ago we at least had the waka triangle present to provide some robust debate, although how robust it was I am not very sure. I wondered in bewilderment when my cousin Mita Ririnui, who opened the proceedings today, said this bill had been introduced by the previous Labour Government, and told us what a great job that that Government had done. I again quote from the Māori Affairs Committee’s commentary on the bill, because there is this interesting statement in it: “Because it is desirable that changes to establish the Māori Trustee as a stand-alone organisation be passed into legislation before the close of this Parliament, we resolved that splitting the bill along these lines was prudent.”

If we look at the bill, we see it was originally intended to be passed into law in July 2008. So I ask what the previous Government had been doing. If it was so good at its work, what had it been doing with regard to this bill? That speaks for itself, and once again it has been left to this National Government to carry out the role of cleaning up legislation to clear the decks. It is interesting to refer to an independent report in the latest version of the Trans Tasman that espouses the great and dedicated work this Government is doing. So this Government is again cleaning up a matter that the previous Government failed to address. This Government is committed to passing this bill into law by July 2009, and that will be achieved.

The other issue that my cousin Mita Ririnui waxed eloquent on and that Kelvin Davis talked about was Māori economic development, and, although I agree with the sentiment that was expressed, the fact is that the Minister has now clarified the purpose of the bill. The purpose, as reported back by the select committee, is to deal with a number of operational matters in respect of the Māori Trustee and how he operates now. It is not about expanding those activities, vision, mission, and all those sorts of things. The purpose is about dealing with a number of operational matters. Those issues are all fundamentally about independence and being able to make the Māori Trustee more independent, more accountable, and in a greater position to progress the issues that confront him in the normal administration of his job.

I sympathise with the thoughts expressed by Mr Davis about aspiration, but that is why the National Party came into Government. People do want to have aspiration, and that is why this Government is clearing the decks, getting rid of all this administration stuff, and moving forward. The previous administration, with my friend the Hon Parekura Horomia as Minister of Māori Affairs, had 9 years to do that. It started with closing the gaps, and what happened? We are still waiting. Members opposite still stand and talk about aspiration and Māori economic development, but nothing happened about that when they were in Government. Although I agree that “that must happen” and “this will happen”, fundamentally this bill is about independence.

The CHAIRPERSON (Hon Rick Barker): Before I call the next speaker, I just remind members that we are debating Part 1.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti) : Part 1 of the Māori Trustee Amendment Bill is expansive and can bring into play a whole lot of discussions, like those about activity. Yes, Labour was in Government for 9 years, and we shared 6 wonderful years with Minister Turia, who was there too at that time. I am very pleased that the Minister of Māori Affairs has the courage to go forward and to really spend some time reading about the second part of this activity, so we can get to the space that Kelvin Davis was talking about.

I want to assure members, as certain aspects of Part 1 point out, that the Māori Trustee has held, over a long period of time, certain independence. Staff members of Te Puni Kōkiri and the Māori Trustee are to have a clear delineation and differentiation between them, because the profit margin, or the accumulated fund, was becoming the Māori Trustee’s in isolation. Part 1 is about ensuring the independence of those staff—between Te Puni Kōkiri and the Māori Trustee. They have done a damn good job.

Part 1 gasses it up a bit. I like Kelvin Davis’ paraphrasing, in relation to Part 1, that we had better put a bit more speed on this, so people can utilise the accumulated funds. We did that when we started the Poutama Māori Business Trust, we did it when we started the Māori Education Trust, and we did it when we started te kōhanga reo. We saw that those would bear benefits for most of the beneficiaries of this fund. We saw fit to do that at that time, and we can still be bold and courageous enough to do things like that now.

Part 1 is about restructuring. I remind the previous speaker that it is about reconfiguring the role of the Māori Trustee, and that just a short period back the Ngāti Awa Trust Board was reconfigured—and he led the restructuring of it—because it was becoming antiquated and had old-fashioned practices. It has been gassed up in order to modernise it and bring it forward. That is what this bill is about. It is about trying to ensure we can get some clarity. Part 1 is about exposing relevant issues so that there is a template that people can understand in relation to the assets held by, and the practices of, the Māori Trustee. Those staff have done a good job. I am encouraged that the Minister of Māori Affairs will continue to appoint the Māori Trustee, and I say that so he should. That is no different from what Nick Smith did with regard to the chair of the Accident Compensation Corporation. He did not take cognisance of—

David Bennett: Come on!

Hon PAREKURA HOROMIA: He did not take cognisance of what the participants wanted. He appointed the board members. He knocked some over, and he put some back. I can assure the Committee that knowing the Minister of Māori Affairs as I do, he will do a better job in ensuring that the Māori Trustee continues to ensure that Māori beneficiaries get the benefit out of this change. Additionally, a lot of our people are in Australia.

I was going to wax lyrical about our previous Labour Government taking 200,000 children out of poverty and ensuring that our people’s minimum wage went up nine times. We never bought into the rubbish that the previous speaker was talking about. We should have this discussion this time next year and see how many Māori have been put on to the unemployment heap, but members opposite do not care about that. They sip their lattes, they sit in their pastel confines, and they put our people into despair and despondency. This bill is imaginative. It is a forward-thinking bill. Part 1 ensures that National can have a crack at everything that is going. What is wrong with Māori getting a hand up? This is not a handout. This bill talks about Māori funds; it talks about putting them over there. [Interruption] Yes, Mr Quinn, let us have this discussion this time next year. Let us see where we are at.

Paul Quinn: I am looking forward to it.

Hon PAREKURA HOROMIA: I am looking forward to the Minister of Māori Affairs continuing to use his courage in order to get this issue sorted out. I want to make sure he refocuses on Part 2 of the original bill, which ensures that Māori beneficiaries can have a say in lifting up our people in the future. I certainly applaud the Māori Affairs Committee for standing by this bill.

I want to go back to the Ngāti Awa reconstruction, because that trust board was reconfigured. Why? It was stepped up and modernised to ensure that beneficiaries would get the best out of it. [Interruption] That is right. I signed it off as the Minister at that time, and that member led it and made sure it was OK then. So why is it that when we come to this bill, National is trying to pooh-pooh it and make believe that it ain’t a good idea for Māoridom?

Paul Quinn: No. We support it.

Hon PAREKURA HOROMIA: It is an excellent idea for Māoridom. I am glad the member supports it.

DAVID BENNETT (National—Hamilton East) : For anyone who does not know, that was the previous Minister of Māori Affairs, a Labour member, who was speaking. He has talked about this bill as being imaginative and something that is good for Māori. When we compare that comment with a Labour member who spoke before him who said it was dull conservatism, we see that the Labour Party does not actually know what it thinks about this bill. On the one hand, it looks at this bill and sees it as being imaginative and something it wants to support. On the other hand, it cannot say it supports the bill, because it cannot support the National Party doing the right thing by Māori. That is the reality behind the Labour Party.

When we look at the Māori Trustee Amendment Bill we see there are two parts that were originally considered. Part 1, which I do not think anyone has any problem with, establishes a stand-alone Māori Trustee organisation. People see the benefit in that. Recognising that reflects the maturity of Parliament and a maturity in the way we deal with issues of land ownership. The second area of this bill, which is more contentious, is related, basically, to the siphoning off—as the great Tau Henare described it—of money into a fund that Labour would use to invest in what it thought was right at any particular time. That was more contentious, because it did not relate to any aspect of land ownership.

There is an increasing maturity in how we deal with the issues that need to be dealt with by Parliament. The National Party has supported the legislation coming forward, but only in the sense of Part 1, which deals constructively with the issue of trying to find a solution that represents more modern thinking around land ownership. It gives Māoridom the ability to have control over that ownership through the Māori Trustee being a stand-alone organisation rather than just an employee of Te Puni Kōkiri. That is part of the process that will go on. It still enables the unique aspects of Māori ownership to be part of what the Māori Trustee will deal with, but in an increasing role of independence from the State, and independence from a Government department that is in control of Māori land. I think that is a good starting point, and it will probably lead to more development over time in this area in the future.

If we go back to what Labour was looking to do when it originally introduced this bill, it wanted to have control over another slush fund to dictate where that money would go. That is basic Labour theory: that it knows best how to spend somebody else’s money. It does not trust other people to be able to deal with their own assets. It certainly does not trust Māori to be able to deal with their own assets. Labour says that it knows best. That was the whole decision-making process behind the Labour Party. At the select committee and at the last election the good people of New Zealand decided that they did not want to be told any more that the Labour Party knows best. They want to have the ability to make those decisions for themselves. They want independence.

Hon Parekura Horomia: Like the ACC board! When was that?

DAVID BENNETT: The previous Minister of Māori Affairs is going on about things that do not even relate to this bill. If he actually stayed on the point and talked about what was in the best interests of the Māori Trustee it would be more appropriate for this debate. That is what we are doing; we are concentrating on the issues at hand, we are looking at what is in the best interest of Māori and the Māori Trustee role, and we are coming to constructive solutions that are in the best interests of New Zealand and the Māori Trustee, going forward.

That independence is actually very important, because the title of this bill identifies an entity that we commonly consider has an independent role—a trustee. When we talk about legislation related to a trustee, we normally expect the person to be independent and making the right decisions in relation to looking after somebody else’s funds. That is what we are doing here. We are setting up a stand-alone organisation that is free from political pressure, which I know Labour members find very difficult to stomach. They want to have organisations that they can control so they can dictate their terms, but the National Government does not want that. We want something that is free from that political pressure.

Hon MITA RIRINUI (Labour) : Once again, I take a call on Part 1 of the Māori Trustee Amendment Bill. I am not sure whether I am amused or bemused by the statements of the previous speaker, David Bennett, but I recall that earlier in the Committee stage of this bill he took a call also. His speech was so hilarious—for want of other words—that the member for Hauraki-Waikato, the Hon Nanaia Mahuta, had to stand up in the Chamber and ask if he had been drinking water out of the Waikato River, because he was well off track. I find that his contribution to this particular debate is no different. Although the member espouses considerable understanding of various clauses within Part 1, he has no understanding at all of the dynamics of Māori land ownership. If he had been listening to the debate so far he would have understood—as has been commented by a number of people who have stood in the Chamber to speak to Part 1—that it is not as straightforward as he seems to think. He thinks that he can walk into the Chamber, get to his feet, take a glimpse of the bill, and have a complete understanding of Māori land issues. Mate, I have never seen so much arrogance in my life. That was the most paternalistic speech I have heard in the time that I have been in this Chamber.

David Bennett: I raise a point of order, Mr Chair. I require the speaker to withdraw and apologise for that last comment.

Hon MITA RIRINUI: Mr Chair, which comment in particular does the member want me to withdraw?

David Bennett: I do not have to repeat the comment. You know.

Hon MITA RIRINUI: He said that “You know.”, Mr Chair, so I am asking you whether you know.

The CHAIRPERSON (Hon Rick Barker): I was talking to the Clerk at the time, so I am a little bit at sea here. Offence has been taken. I take it that Mr Bennett is serious about this, and that it is a genuine point of order. If that is the case I accept his word. I ask the member to withdraw.

Hon MITA RIRINUI: I withdraw in the interests of time, but it would have been interesting to hear his clarification—

Chris Tremain: I raise a point of order, Mr Chair. The member was asked to withdraw and apologise. He did not need to add on the words: “in the interests of time,”. Can the member just do what he was asked to do?

The CHAIRPERSON (Hon Rick Barker): The point of order is well made. The member will simply withdraw and continue with the speech, and will not refer to the matter again.

Hon MITA RIRINUI: Thank you, Mr Chair. I said that I found much of the previous speaker’s comments and the comments of a number of speakers in the Chamber this afternoon quite paternalistic.

There is no dispute around the need for the Māori Trustee to become a stand-alone organisation. There is no dispute that the legislation needs to reflect very clearly the roles and responsibilities of the Māori Trustee, including the Māori Trustee’s appointment and—if it ever comes about—dismissal. There is no dispute that the legislation needs to include robust financial management systems, and clarification around the investment of funds from out of the common fund and where the return on those investments must go. The change in that particular area is, of course, that returns will not go into the general purpose funds but back into the common fund. As mentioned in the Chamber many times through this debate, there is support for that particular approach.

As I said earlier, there seems to be a total lack of understanding of the complexities around Māori land ownership and Māori land tenure, and the difficulties the Māori Trustee will face in identifying beneficiaries. I believe that a previous speaker referred to a particular case in Te Tai Tonga—in Te Wai Pounamu—of a particular family that has a sizable amount of money already accumulated in the Māori Trust Office. Kelvin Davis, Parekura Horomia, and I—and, I am sure, many other Māori members around the House—either are beneficiaries of lands held by the Māori Trustee or know someone who is. There are reasons why many do not come forward, as I said previously. Those reasons are that they are no longer with us—

Paul Quinn: They don’t know it exists!

Hon MITA RIRINUI:—they do not know it exists, or they are basically just not interested enough in their family’s affairs to inquire into the possibility of funds being held on their behalf.

The Māori Trustee has made some tremendous steps forward over a number of years. I am familiar with cases where the Māori Trustee has actually held shares in particular blocks around the country, and those shares have been handed back to the governing authority of those estates. I can recall very recently the encouragement of the then Minister of Māori Affairs, Parekura Horomia, in interests in Tuhua Island—or Mayor Island, as it is commonly known—in the Bay of Plenty, just off the coast of Tauranga. It is a very, very popular spot. In years gone by it was frequented by a lot of recreational fishers. Those shares were handed back to the Tuhua Trust Board. Now the board holds those shares on behalf of all the beneficiaries with interest in Tuhua Island. So although we might be making changes to the role of the Māori Trustee, I hope that that particular important function carried out by the Māori Trustee remains in place for a long period to come.

• The question was put that the amendments set out on Supplementary Order Paper 14 in the name of the Hon Dr Pita Sharples to Part 1 be agreed to.

• Amendments agreed to.
• The question was put that the amendments set out on Supplementary Order Paper 16 in the name of the Hon Dr Pita Sharples to Part 1 be agreed to.

• Amendments agreed to.
• The question was put that the amendments set out on Supplementary Order Paper 17 in the name of the Hon Dr Pita Sharples to Part 1 be agreed to.

• Amendments agreed to.

• Part 1 as amended agreed to.

SANDRA GOUDIE (National—Coromandel) : I am delighted to support the Māori Trustee Amendment Bill. It appears that there is general support for the bill from throughout the Committee, and that is rightly so. When one looks at Part 2, one sees that it is largely procedural. It is about the procedural matters to do with the Māori Trustee and with the Māori Trust Office. I looked up the current legislation regarding the Māori Trust Office, because I was interested to know what the situation was. Essentially, it is an office of the Public Service and that will continue. One of the aspects that I particularly like is that there is some oversight in regard to the Māori Trustee. I think that is actually quite important.

I will digress slightly, with the indulgence of the Committee, and talk about an actual trust, because I think this bill is a really good example of doing things right—a really good example. We do not always get things right. I would like to talk about a particular trust, the Earthwise Living Foundation New Zealand. The same person from this trust also happens to be involved with Kiwi internships and provides activities under the auspices of being a trust. This can be very misleading. One of the things about this bill is that there is some oversight here for the activities of a trust. In the case of the trust I have just mentioned—the Earthwise Living Foundation New Zealand—the main individual involved with it, one Jon Traylen, provides the activities, gets donations and funding, and is paid considerable sums of money for what he says he will provide but does not deliver. Often the young people who come from overseas looking for Kiwi internships, or who provide voluntary labour for the Earthwise Living Foundation New Zealand, do not get the sorts of care, support, education, activities, or services that have been promised.

I will tell members about one girl who was assigned to go and feed the chooks—this is an environmental trust. She was assigned the job of feeding the chooks. Everyone had been working very hard day after day doing all Jon Traylen’s dirty work, and she actually refused in this instance. Mr Traylen said that if she did not feed the chooks, he would kill them all. She still refused to feed the chooks, because she did not believe him, but that is exactly what he did. He killed the chooks, and then he made her bury them. This is seriously unconscionable behaviour. This is not the sort of behaviour for somebody to engage in who purports to be a representative of a trust, and who offers these sorts of opportunities to young people from overseas—and not necessarily just young people. Earthwise Living Foundation New Zealand purports to be an environmental trust, but it is not offering the sorts of things that the trust purports to offer.

That is why I applaud this bill. There is some oversight here. Yes, I have digressed, but it is very difficult to try to bring the Earthwise Living Foundation New Zealand to account. This is one of the real issues that Fair Go is exploring tomorrow night on television. That is why I applaud this bill—and what I have said is a long stretch from the bill we are discussing, but there are some things that one can say here that one cannot say elsewhere, and I am taking full advantage of that opportunity. It is very important that trusts have integrity and are accountable. This is why this bill is particularly important in terms of the Māori Trustee and the Māori Trust Office.

As I said previously, Part 2 is about fiduciary rights and liabilities. It is about the new Māori Trustee succeeding to existing undertakings, and about the dissolution of the Māori Trust Office. It is about contracts and other instruments, the status of existing securities, the effect of the Act, registers, the registrar of deeds, and the Registrar-General of Land. It is also about the transfer of employees, the protection of employment conditions, and continuity of employment. One certainly could not say that with regard to Jon Traylen, because when he did employ the services of young people, they were volunteering, and they were paying money for services they did not receive. In actual fact, Mr Traylen would claim any moneys that were left unspent as a non-refundable donation. I have never heard of a donation being able to be enforced, but in this instance that was the case.

Hon MITA RIRINUI (Labour) : I thank the member who has just resumed her seat for her contribution. During the course of this debate in the Committee stage on the Māori Trustee Amendment Bill, we have been reminded many times that we are speaking to particular parts of it, so I will do my best to stay in line—[Interruption] It is hard not to laugh, but I will try to stay in line, lest, as my colleague the previous Minister of Māori Affairs says, I be scolded like a headless chook. I think he was referring to the previous contribution.

Nevertheless, this is a very important part of the bill. I would like to talk about the necessity of change, and the necessity that the Māori Trustee become a stand-alone organisation. I would like to talk about the necessity of very clear roles and responsibilities, and the necessity of robust financial internal systems to guide prudent financial management. We still have to get there. This part of the bill explains to us how we should get there. We are debating the transitional provisions, and they are showing us how we will get there. The consequential amendments are required, to ensure that everything we have voted in favour of this evening meets certain standards. There is reference to the existing undertakings in relation to “all property and estates administered, held, managed, or controlled by the Māori Trustee or the Māori Trust Office before the commencement of this Act”.

I mentioned earlier that much of the work done over a number of years by the Māori Trustee has been viewed by Māori as favourable and quite necessary. This part refers to shares held by the Māori Trustee, certain land blocks and estates where it has been thought that the Māori Trustee should not in any way be a beneficiary or a shareholder in these estates, and where the Māori Trustee has, through a transparent process, transferred the assets back to their rightful owners.

Having said that, the Māori Trustee still holds a lot of interest in lands. I mentioned earlier one particular area that I am familiar with, but I am also familiar with several others where the Māori Trust Office holds shares. I recall some time ago in 2001 where the Māori Affairs Committee, when speaking with the Māori Trustee, inquired into the interests of the Māori Trustee in terms of certain estates. We were pleased to hear that the Māori Trustee had, over a period of time, been transferring those assets back. Some of it was very difficult, because the Māori Trustee just could not locate the rightful beneficiaries of the estates.

In Part 2, I highlight the fiduciary rights and liabilities. It includes “all rights, capacities, authorities, discretions, duties, and liabilities of the Māori Trustee”. We expect that the Māori Trustee would perform his or her particular role to an extremely high degree, because that is the expectation of this Parliament and it is certainly the expectation of those who have interests held on behalf of their families within the Māori Trustee. To be fair, the Māori Trustee has managed many of those interests, if not all of them. That is the prudent way. But it has still been subject to criticism. Naturally, there are those who think they know better and have better ideas about accountability, reporting, and a whole lot of other things. But when we want them to front up to a particular meeting, we cannot find them. They never turn up. We do not see them about. Nevertheless, the Māori Trustee has taken a lot of this criticism on the chin. In my view, over a number of years the Māori Trustee has boldly tackled a lot of the difficult issues.

The new form of the Māori Trustee would, naturally, succeed to the existing undertakings of the current Māori Trustee, even though we are talking about the same person. As I say, these transitional provisions are necessary for this to be enacted.

Hon Dr PITA SHARPLES (Minister of Māori Affairs) : I will continue along the lines of previous speakers by explaining exactly the provisions in Part 2 of the Māori Trustee Amendment Bill, “Transitional provisions and consequential amendments”. Part 2—clauses 17 to 30—provides continuity for the Māori Trustee, for the staff of the Māori Trust Office, for clients, and for others who deal with the Māori Trustee in the transition to being a stand-alone organisation. It is a very important part.

As the previous speaker, Mita Ririnui, said, the “New Māori Trustee succeeds to existing undertaking”—that is clause 18. This clause provides that “the new Māori Trustee succeeds to—(a) the existing undertaking,” as defined in clause 17, and to the Māori Trustee’s “fiduciary rights and liabilities,”. I think clause 18 is a very important clause. It is one of a number of clauses that provide continuity for the Māori Trustee clients and others who deal with the Māori Trustee.

Why does the office need to be dissolved? It needs to be dissolved to allow for the transfer of staff and of the Māori Trustee. The Maori Trustee Act 1953 currently provides for an office of the Public Service called the Māori Trust Office. At present, all employees of the Māori Trust Office are employees of Te Puni Kōkiri. As the Māori Trustee will be a stand-alone organisation separate from Te Puni Kōkiri, the current Māori Trust Office needs to be formally dissolved. Staff who are employed in the Māori Trust Office at the time of the bill’s enactment will be transferred to the new Māori Trustee organisation. These clauses provide for the continuation of their contracts, and of other instruments and proceedings involving the Māori Trustee. Any proceeding against or in favour of the Māori Trustee or the Māori Trust Office may be continued. This is covered in clause 22, which provides continuity for “An action, arbitration, proceeding, or cause of action …”. So this whole part is important; it is concerned with continuity during the transition from the Māori Trustee’s current status to its new status.

Clauses 25 to 29 provide for the transfer of staff employed in the Māori Trust Office to the employment of the Māori Trustee: continuity of service, and continuity for the staff of the Māori Trust Office. As well, staff employed in the Māori Trust Office immediately before the commencement of these amendments will become employees of the new, stand-alone Māori Trustee organisation. The only exception is the incumbent Māori Trustee, who is currently the general manager of the Māori Trust Office as well as being the Māori Trustee. This person will be appointed as the new Māori Trustee under new section 6A, which is inserted by clause 7, ensuring continuity for both staff and clients, and helping to ensure a smooth transition. The transferred staff will be employed on terms and conditions that are no less favourable than those applying before the commencement of this Act.

Clause 30 provides that “every reference in any enactment or document” to the Māori Trustee must be read as applying to the new, stand-alone Māori Trustee established by this bill. I just thought I would take a call to clarify the importance of the transition stage set out in Part 2.

Hon TAU HENARE (National) : Part 2, clauses 17 to 30, ranges from the dissolution of the Māori Trust Office to taxation issues. All of the clauses in Part 2 are procedural, and without them we would not have the new Māori Trustee.

Let us cut to the chase and talk about the real issues. I reiterate the point that some beneficiaries may like the idea of sharing their largesse or their dividends. That is cool; no one has a problem with that. The problem is when Big Brother, the nanny State, or the grandpa State—call him or her what you will—determines for everybody an outcome from a pool of people who hardly see anything out the Māori Trustee. I will give members a couple of examples. Why is it so easy for Bay Collection Agency and the Inland Revenue Department to find us, but not for the Māori Trustee to do so? Why is it that people who have no known address, and who have been missing for 8, 9, or 10 years from the planet, all of a sudden are found by Bay Collection Agency and the Inland Revenue Department because they want their 500 bucks? Why is it that we have a situation like that, yet the Māori Trustee cannot find anybody? I do not want to personalise the issue in any way, shape, or form, but why would we not contract the Inland Revenue Department and Bay Collection Agency to go and find these fullas?

Hon Member: Pay them a commission. Get it sorted.

Hon TAU HENARE: We could then hand over what is rightfully theirs.

On another tack, in the past 25 to 30 years assets have been handed back to the owners, and the owners have got on and looked after their assets. Nobody could argue against that. One of the greatest things the Māori Trustee has been able to do is to hand back the assets, so that the beneficiaries and the whānau can get on with making a living. What I have not liked over the past 25 to 30 years is the handing back of not only an asset but also a huge debt. That debt has got out of hand. There is no point in handing back something with a massive debt that takes the owners years and years to get over.

All in all, without the 13 or so clauses in Part 2, we would not be able to move forward. I take my hat off to the previous Minister of Māori Affairs, Parekura Horomia. Let us not be disparaging. We would not have this bill if it had not been for the previous Minister sitting down with the officials and saying this was what he wanted to do. OK, we can argue the toss about splitting the bill and about what was in the other part of the bill, but the fact of the matter is that there is no other part of this bill. Only one bill is in front of us. It tidies matters up, as the Minister has said, and it parks the Māori Trustee in the position of being there for the benefit of beneficiaries in the future. Who can argue against some of the clauses that we have discussed in the Committee stage?

I will make a small reference to clause 28, “No compensation for redundancy”. Let me read it out: “A transferred employee is not entitled to compensation for redundancy by reason only of the person ceasing to be an employee in the Maori Trust Office.” Am I to take it that if a person who is employed at the Māori Trust Office becomes superfluous to the needs of the Māori Trust Office, he or she is not entitled by virtue of this clause to redundancy? It is an interesting little question. [Interruption] Well, to some it would be bad; to some it would be good. I say it is bad. I say there must be some sort of protection there, notwithstanding the side of the Chamber that I am on at the moment. It is an interesting juxtaposition.

The fact of the matter is that that little clause, clause 28, has been there forever and a day. Ever since the bill was promulgated by the previous Minister of Māori Affairs, who just so happens to represent a party—

Hon Tariana Turia: Do the unions know that?

Hon Parekura Horomia: It was there, the same, when you were there.

Hon TAU HENARE: Oh, no! Just to correct things, I say that I was never put in Parliament to represent the unions. I did not scab money off the unions to run my campaign. But we all know that Parekura Horomia—

Moana Mackey: You were the worst union organiser ever in the history of New Zealand—sold them out.

Hon TAU HENARE: Oh dear, I am hurt. How sad! Let us move on. It is those members’ party that represents—or is supposed to represent—the workers.

But here is the little clause, and I will read it out again. It says there will be no compensation for redundancy. What a shocking state of affairs! [Interruption] Absolutely! But who put it in there? I do not blame the Māori Party or even the National Party for this clause, because this bill was promulgated by the previous Minister of Māori Affairs, the Hon Parekura Horomia. All night we have been thrashed about what a good job the previous Minister of Māori Affairs did. If clause 28 was such a good idea, then maybe the previous Minister can take a call and just tell us where he got the little doozy of an idea of no compensation for redundancy from.

What about those fullas up on the coast who work in the Gisborne office? I ask what will happen if they are made superfluous to the needs of the Māori Trust Office. Does this clause mean that they will not get any redundancy? I am just asking. It is not a question of whether I believe they should. Does the clause mean that they will get redundancy? It is a simple question, which I would like the previous Minister of Māori Affairs to answer, because I know that in his heart the present Minister of Māori Affairs would not wear that.

Hon Tariana Turia: Must need an SOP from you.

Hon TAU HENARE: Yeah, maybe; let us not push things along too fast.

But it is interesting to see what can come out of the procedural parts of a bill if we look hard enough. I do not know whether I am barking up the wrong tree. I am sure that somebody will be able to help me out in my understanding of clause 28. I would really like the previous Minister to help me out on that clause, which relates to there being no redundancy for workers.

MOANA MACKEY (Labour) : That was yet another very interesting contribution from Mr Tau Henare, on clause 28. Is it not funny to hear National MPs get up and talk about how much they care about workers and redundancies, what with the slash-and-burn job they are doing across the public sector at the moment? For Tau Henare to get up in this Chamber and claim to care about workers, after being largely regarded as one of New Zealand’s worst union organisers, and then to have him supporting a Government that has slashed and burnt the public sector and has told public servants that they are not allowed to be part of the 9-day fortnight plan as only the private sector qualifies—

The CHAIRPERSON (Lindsay Tisch): We are on Part 2.

MOANA MACKEY: Mr Chair, I am responding to the points made on clause 28 by the member who spoke before me. Tau Henare claimed to care about workers, and he has asked the Minister in the chair, the Hon Dr Pita Sharples, to respond to what he said about this clause. My understanding of this clause—and I am sure the Minister will correct me if I am wrong—is that this provision is to ensure that any workers who are transferred over to a new job do not get redundancy pay and the new job at the same time. It is just to make it clear that even though they technically lose their job in one place, it is a technical redundancy, as they are picking up a job somewhere else. This clause is just to make it clear that they do not get the redundancy pay and the job. I look forward to having the Minister clarify this point, and I think it is fair to say that I look forward to hearing his contribution far more than I looked forward to hearing the contribution of the member who spoke before me.

This part of the bill deals with transitional provisions, and my colleagues have spoken earlier about the need to get on with this legislation. We are very pleased that National has come on board with this legislation. We were not quite sure where it would be on it. There was a long period of time when we were not sure how it felt about Māori development, and I wonder whether the clauses in this legislation outline National’s transition from not caring about Māori development, to its suddenly wanting to embrace it wholeheartedly. In considering this part of the Māori Trustee Amendment Bill, I was reminded of the Local Government Act, and the discussions we had around Māori development in that context, which are very relevant to the issues raised here. In particular, when it was clear that we wanted Māori input on issues of land and waterways, the Hon Dr Nick Smith said it was “apartheid” to suggest that Māori should have to be considered, and that Māori rating should be dealt with separately under the Local Government Act. In Hansard it shows that he even attacked the then Minister, Tariana Turia, along those lines. I think it is interesting to hear National debating and wholeheartedly endorsing the transitional provisions of this bill in the Chamber today, considering that when we looked at similar provisions in the Local Government Act, Dr Nick Smith said: “This damn law that we are being required to pass is nothing less than apartheid. It offends National’s principle of one standard of citizenship, and I say to Tariana Turia that she should take a call and explain to me and to the people of New Zealand why one sort of people have a rates remission policy and others do not.” Well, of course, here we are with an entire bill that deals with Māori development.

Chris Hipkins: How things have changed.

MOANA MACKEY: How things have changed. I wonder whether the Minister in the chair can point to the clauses in this part of the bill that deal with National’s enormous transition on issues of Māori development, and how we can be assured that in the next term of Government this will not be completely changed around, and that we will not go back to the “one standard of citizenship” type of rhetoric that we enjoyed for a long time.

Hon Tariana Turia: You had 9 years. You had 9 long years.

MOANA MACKEY: I say to Tariana Turia that I think she did a very good job on the Local Government Act. She was a Minister for 6 years in previous Labour Governments, and she did some very good work while she was with us. We very much want to work with the Minister to ensure that we can further that work. But, again, I raise the point that this sudden “road to Damascus” situation that we are being faced with from the National Government is slightly hard to believe, given the comments National members have made in the past, relating to legislation that is specifically to do with Māori. I restate my point on clause 28. I think it is an important issue. I am sorry that the member Tau Henare just got up to make fun of the situation.

Hon Tau Henare: No, I got up to make fun of you.

MOANA MACKEY: Oh, he is over there now. I am sorry, I did not see that he was there. I ask him to reconsider his position on this bill in light of the cuts that his own Government is making in the public sector. I say that if he cares about workers as much as that, he might need to go a little bit beyond a very political speech made in jest. I would be very interested to see a Supplementary Order Paper put up by that member if the Minister in the chair stands and confirms what Tau Henare has said, which is that this provision will mean redundancies across the board, with no payout. Tau Henare has indicated that he might be interested in putting up a Supplementary Order Paper. We would always be prepared to consider that. But I think we do need clarification, because that certainly was not my understanding of clause 28.

Hon Dr PITA SHARPLES (Minister of Māori Affairs) : I will take another call on this point of redundancy. Clause 28 of the Māori Trustee Amendment Bill states that employees are not entitled to redundancy compensation by reason only of their ceasing to be employed by the Māori Trust Office. I think that is the key point—for only that reason. The bill’s provisions are intended to provide continuity for all clients and staff. All staff are transferred to the Māori Trustee. Following that, normal employment law applies. What clause 28 really means is that an employee of the Māori Trust Office does not get redundancy just because he or she is no longer employed by the Māori Trust Office. If the employee is surplus to the needs of the Māori Trustee, which is a different situation, redundancy is not necessarily ruled out by clause 28.

PAUL QUINN (National) : It is a pleasure to take a short call. I want to focus on and address Part 2 of the Māori Trustee Amendment Bill. As the Minister of Māori Affairs rightly pointed out in his brief overview of this part, it is about the transitioning arrangements between the old organisation and the new organisation. It is appropriate that we reflect for a bit of time on transitioning, because that is something that this Government has done extraordinarily well. It has transitioned from the previous Government to the new Government. In fact, we have done outstandingly well in terms of, for instance, getting through our 100 day programme. That is particularly important in terms of transitioning to ensure that the right things are in place and life can go on. That is what we are particularly good at.

Part of that process is to clean up the mess that was left behind. That is evidenced in this part, which originally made reference to 1 July 2008, when this bill was supposed to have become an Act. Of course, the previous Government was totally unable to do that, so we have had to take on the responsibility. We have changed that date to 1 July 2009, which is mentioned in this bill. We have been able to push it through with determination because we care about the Māori people. We care about economic development. We do not stand there and just talk about it. We do something about it. That is why the transitional arrangements in this bill will come into force in July 2009.

Hon Phil Heatley: Talk, talk, talk.

PAUL QUINN: We are sick of talking. Unfortunately, my colleague and friend Kelvin left the Chamber when I last spoke about economic development. That is not part of this debate, so I will not talk about it, but I am happy to talk to him about economic development, because that is exactly what we are on about—aspiration for Māori iwi and hapū. We do not talk about it; we are getting on.

This is exactly the Government to push through the transitional arrangements in this bill. As I said in an earlier call, it is about making sure that, prior to the enactment of this bill in July 2009—and members should remember that date, July 2009, because we will stick to that; we will not put it in the bill and sort of think about it—the new corporate sole, as it is described in the bill, will take over all of the legal requirements of the existing organisation. Simplistically, the existing organisation will go out of existence. It will have in place, for instance, contracts with employees or contracts to deliver, and, if we do not have these transitional arrangements, no one will be able to pick them up. An employee will have a contract with the old Māori Trust Office, and if he or she is not covered by these transitional arrangements, he or she will not have a contract for employment. We want to make sure that these people are cared for, because we are a caring Government. We care about making sure that these transitional arrangements go into place.

Once we have the Act in place in July 2009, as we have timetabled, we will then be able to move on and meet the needs of Kelvin, who really should be on this side of the Chamber—

H V Ross Robertson: I raise a point of order, Mr Chairperson. I know the member is a new member, and I did not pull him up on the first occasion, but I will on the second. On both occasions he has used a member’s first name. Under the Speakers’ rulings, members must use a member’s full name, his or her portfolio, or his or her title.

The CHAIRPERSON (Lindsay Tisch): That is correct. I ask the member in future to refer to the member by his or her full name.

PAUL QUINN: Thank you, Mr Chairperson, for that guidance, and I apologise to the member. I hope the member, Mr Kelvin Davis, does not take offence. If he has taken offence, I ask him to please accept my apology. We will have to have a beer in the pub later. Anyway, I get back to the business at hand, and focus specifically on these transitional arrangements. It is important that these are put in place so that we can have a seamless transition.

Hon MITA RIRINUI (Labour) : I congratulate the previous speaker, Paul Quinn, on a very robust contribution to this debate. It was something like 120 decibels. We have been reminded on a number of occasions throughout the afternoon that we are referring to particular parts of the Māori Trustee Amendment Bill. As Tau Henare said earlier, there seems to be a strong desire for people to be acknowledged for their contribution, but I will steal a bit of the limelight away from the previous speaker and remind him that this bill was introduced to the House by the former Minister of Māori Affairs. All the provisions within the bill are the provisions that the previous Minister of Māori Affairs insisted be included in the bill, and all of the what we call transitional provisions and consequential amendments—from clauses 24 to 28—were introduced to the House by the former Minister of Māori Affairs.

It is very interesting that one of the previous speakers, Tau Henare, made mention of clause 28. I could see by the reaction of a lot of the members on the opposite side of the Chamber that there was considerable concern, and a reaction to the misunderstanding of that particular clause. I thank the Minister for clarifying the matter, because had he not clarified it then one of us on this side of the Chamber would have had the obligation to do that. We are talking about transitional provisions, mainly about roles and responsibilities and making sure that assets are not only accounted for but protected, and that the Māori Trustee is aware of his roles and responsibilities, including accountability, as the Māori Trustee under the new legislation.

We should spend quite a bit of time talking about the issues that relate to employees. I congratulate Tau Henare on the fact that he raised an employment issue, and it is probably incumbent on members to spend some time talking about employment conditions. My understanding of the bill is that the previous undertakings are transferred across. The employees will continue to be employed under the same conditions and protections as they had as employees of the Māori Trustee, and all of those conditions are highlighted. There is considerable comfort to employees of the Māori Trust Office that they will not be disadvantaged in any way, shape, or form whatsoever with the new arrangements—particularly as the new legislation takes effect. Changes in employment arrangements are of concern to anyone when there is restructuring—in this case a restructuring of the legislation—and the transferring of employees to a new organisation. I congratulate the Minister in the chair on clarifying that situation, and I am sure that those staff employed by the Māori Trustee will find the transition, transfer, and arrangements to be smooth and without too much difficulty.

When we talk about transitional provisions and consequential amendments we must keep in mind that we are talking about the well-being and continual employment of staff members. They themselves should be kept informed as to what the changes may mean, if anything, to them as employees. That is a very, very important matter that we need to discuss at the Committee stage for Part 2 of the Māori Trustee Amendment Bill. It is not just a transfer of responsibilities but also a transfer of employment rights of staff members to the new Māori Trustee office and the new regime. That is my contribution on this particular part of the bill. I congratulate the former Minister of Māori Affairs on his foresight in ensuring that these provisions are in place.

SANDRA GOUDIE (National—Coromandel) : I thank the Hon Pita Sharples for his excellent contribution, for being such a magnificent Minister of Māori Affairs, and for seeing the passage of the Māori Trustee Amendment Bill through the House. His explanation of Part 2 was exemplary and was much appreciated by all those listening in, so I thank him for that. I certainly appreciated his contribution just to expand my own understanding of the bill. Part 2 of the Māori Trustee Amendment Bill is largely procedural, as previous members who have spoken on it have said. I recall the comments from the Hon Tau Henare about beneficiaries and about actually finding beneficiaries, because there are multiple beneficiaries. That is problematic enough, but I have to say that judging from the recent attempt to find Jon Traylen, who is one of just two trustees of a trust, and who would appear to be its sole beneficiary, it is very difficult to find just one beneficiary, let alone a whole lot of beneficiaries. It was extremely difficult. I think that, because of the investigation by Fair Go, he is probably trying—so far, successfully—to evade its attempts to find him and make him accountable for the lack of services he is providing.

When looking at the Māori Trustee Amendment Bill I am mindful of clause 29A, which is about taxes and duties. The clause “applies for the purposes of the Inland Revenue Acts and any other enactments…”. I will pause here because the one thing we have not really done much of in the Chamber today is speak slowly for the benefit of the interpreters. I wonder how many people are aware of the fact that it is really important to speak slowly and clearly for those people who are signing for others who cannot hear what we are saying. I acknowledge Sign Language Week and the fact that the interpreters have been working all day to interpret what is being said in the Chamber. That is why it is so important to speak slowly. I do not know how many members understand sign language; I do not understand anything very much at all. But it is relevant because whatever we say about the Māori Trustee Amendment Bill—and, in particular, I am looking at clause 29A, “Taxes and other duties”—is being interpreted. That is why it is so important. It is as important for those people who cannot hear as it is for those who can.

I will go through what clause 29A, “Taxes and duties”, actually states. It states: “This section applies for the purposes of the Inland Revenue Acts and any other enactment that imposes or provides for the collection of any tax, duty, levy, rate, or other charge.” When reading that particular portion I am very mindful once again of Jon Traylen, a particular trustee of a particular trust, who uses donations in what appears to be a coercive manner. Donations are contributions that are given willingly. Donations are something a person gives freely. People choose to give a donation. I do not know whether donations have any relevance to this clause, but they certainly had relevance for those people who provided money to Jon Traylen. Whatever was left over from the services he provided to them he claimed as a donation. He would state on the registration form that a donation was a non-refundable part of the fee. But I do not see anything in this particular clause that relates to donations. It is quite extraordinary how some people can use that particular aspect of a trust.

Clause 29A goes on to talk about the commencement of this bill. I will refer to what the Minister said before: the bill is about disbanding the Māori Trust Office and establishing more comprehensively the Māori Trustee as a separate entity. I think that is really commendable. I think it is fantastic what the speakers have had to say in the Chamber tonight. I do not know whether the enactments that will be amended by clause 30 have been covered to any great extent.

KELVIN DAVIS (Labour) : Part 2 of the Māori Trustee Amendment Bill is really about the transition from the old Māori Trustee regime to the new regime. But first of all I will touch on the generalisation that my whanaunga, the Hon Tau Henare, made about collection agencies, and about how easy it appears to be for the likes of the collection agency Baycorp to collect money. That really is just a generalisation, and it is a bit of a fallacy. I know, from talking to constituents up in the far north, that they are having trouble getting money owed to them by other members of the community. They have had collection agencies going around, and bailiffs trying to find the people who owe them, but they are finding it quite difficult to get that money.

Moving back to Part 2, the whole transition side of things is just to ensure that the transition from the old regime of the Māori Trustee to the new regime is smooth, and that it ensures that work conditions and other parts of people’s employment move smoothly into the new regime. In particular, in relation to the transfer of employment rights, the legislation makes sure that just because an employee has worked for the old Maori Trustee and then moves to work for the new Maori Trustee, there is no degradation of his or her work conditions—things just tick over and make that transition nice and smooth.

There is also the part in clause 28 about compensation and redundancy issues, which the Minister clarified for us. The clause basically states that if somebody is transferred over, just because he or she finished working for the old Māori Trustee and moved over to work for the new Māori Trustee, his or her work does not actually cease there. Employees should not receive redundancy from shifting from the old regime to the new regime, but if their work in the old regime finishes then they might be entitled to redundancy.

Clause 26, “Protection of employment conditions”, states that if “a transferred employee … is employed on an individual employment agreement, the transferred employee must be employed by the new Māori Trustee on terms and conditions no less favourable than those applying to that employee immediately before …” the transfer. It is really important that people have that security in their employment and know that, although there will be changes, their work conditions will remain the same.

The effect of the Act, as outlined in clause 23, is that “(1) Nothing done or authorised by this Act—(a) places the old Maori Trustee, the Maori Trust Office, the new Māori Trustee, or any other person in breach of contract or confidence, or makes any of them liable for a civil wrong;”.

Hon Tau Henare: Take your time, bro!

KELVIN DAVIS: I thank the Hon Tau Henare. As I said, it is important that the transition goes smoothly and that under people’s conditions of employment they are not liable for things that occurred before they moved into a new regime or for any acts or omissions from it. It is important that people have the security of knowing that the transition will be smooth for them. It is important that employees know that their employment conditions will ensure that they will be looked after. So with that I say that this is a short call. I thank the Committee. Kia ora.

Hon TAU HENARE (National) : Finally! I congratulate the Minister Pita Sharples again on his understanding of clause 28, and, with the help of his officials, of course, on giving us that definition. That puts my mind at ease: no worker from the Māori Trust Office will go away without any redundancy compensation if he or she is out of a job. So I am happy.

The previous Labour speaker—

Hon Member: Who was that?

Hon TAU HENARE: Mr Kelvin Davis from Kāretu—

Hon Mita Ririnui: Great speaker.

Hon TAU HENARE: He is a great speaker, although he traversed one of the issues I brought up before, which was the finding of beneficiaries—the hunting of beneficiaries. I make no bones about the fact that if it is easy for agencies like the Bay Collection Agency and the Inland Revenue Department to find all these fellas quick-smart, then somebody is doing the job properly.

But I want to take this a bit further. Currently, the Māori Trustee produces a book full of names. It is a list of names, and next to the names are the amounts owed by the Māori Trustee to the individuals. It is no good just putting that book in the library or the rūnanga office and expecting a Mr Harry Walker to jump out of the ether and say “Wow! I am owed $500; I think I will go down to the rūnanga or the Māori Trustee’s office and get my money.” A concerted effort has to be made by the office of the Māori Trustee to find these people. Maybe our Government and our Minister of Māori Affairs should be looking to the future and saying “OK. Maybe we bring in a time period whereby we really go and look for these people who have gone and left no address. And if we can’t find them after a period of time, then the money can be used for another purpose, in terms of Māori development.”

We have to protect the initial property right. We cannot just flick it off because we have bleeding hearts or believe we have a good idea. We cannot do it, and this is where I think the biggest issue will take us in the next couple of years—the issue of the property right that belongs to the beneficiary, that belongs to the shareholder. What if we make all the attempts to find these people and they still fail? Do we have the right, then, to be able to use that money for another purpose? That is a discussion, no doubt, that we will have in the future.

Other than that, I want to say again that it was a sterling effort by our Minister of Māori Affairs on the explanation of clause 28. It was very succinct. I do not think there is too much else wrong with Part 2—in fact, there is nothing wrong with this part. As I said, it is very procedural and very straightforward.

Chris Hipkins: Is the Government filibustering this bill?

Hon TAU HENARE: Oh, well, “Opie” asks the question—

Hon Member: It’s “Richie Cunningham”.

Hon TAU HENARE: It’s “Richie Cunningham”—I am sorry.

The CHAIRPERSON (Lindsay Tisch): Can I just say before the member speaks that we are moving, in some parts, away from relevancy. We want to bring this back to be relevant to Part 2 of the debate.

Hon MITA RIRINUI (Labour) : Thank you for that reminder, Mr Chair; quite often we have a tendency to wander off and use some of our life experiences to support what we are about to say. I was hoping the previous speaker was going to hang around but—

The CHAIRPERSON (Lindsay Tisch): You cannot refer to a member who is not here.

Hon MITA RIRINUI: I apologise, Mr Chair, but I think that in his contribution he actually meant that he was putting a challenge to the current Minister of Māori Affairs to basically go out and find those beneficiaries—those who need to succeed to these unclaimed moneys. He also made reference to the Bay Collection Agency and to how well it does its job, and to the Inland Revenue Department and to how well it does its job. He said that they do not seem to have any problem locating people, and asked why the Māori Trustee has a problem. But the problem with the Bay Collection Agency—I am told; I am not 100 percent sure of this—is just that it employs heavies to do its bidding. The Accident Compensation Corporation does not need to do that; it is accustomed to locating people that it needs to speak to. But the Māori Trustee is dealing with an intergenerational problem, a problem that has been around for a very, very long time, and we have to give some credit for the attempts that the Māori Trustee has made over the past years—over decades—to locate the beneficiaries of unclaimed interest.

I took from the Hon Tau Henare’s contribution to this part of the debate that he was issuing a challenge to the current Minister of Māori Affairs. I want to pick up on that particular point, because it is a real issue—an issue around whether the Māori Trustee can continue to accumulate funds on behalf of unknown beneficiaries without making serious attempts to locate those people, wherever they may be, and whether they are still with us. I do not think that it is such a huge undertaking for the Minister of Māori Affairs to take on that responsibility, but I will say to him that it is a bold move because, from my experiences over a number of years, the Māori Trustee has done everything possible to locate those beneficiaries. But who knows? There may be a much simpler way of doing it. I do not think that all of the ideas have been discussed, or all of the attempts have been made, to locate those people. Some ideas that may sound absolutely ridiculous sometimes seem to be the most effective. So as the Hon Tau Henare has issued a challenge to the Minister now sitting in the chair, the Hon Pita Sharples, I hope the Minister will take a call on this particular matter, because it is one that would resolve a lot of concerns, not only in this Chamber but also around the country, when we look at the size of the fund that has been accumulated through the Māori Trust Office.

As Tau Henare said, I think, in another challenge to the Minister, once all these attempts have been exhausted and we are quite happy that we are not going to find those people, then we spend their money. Essentially, he is saying “Let us use the money”—I am sure he means in a transparent and prudent way—“to promote Māori economic development.” We are getting close to the dinner break and I am sure the Minister in the chair has a response for us, because this issue, as I said earlier on, is a very, very important issue. I say to the Minister that we on this side of the Chamber are very, very interested in his response, and we are more than happy to sit down and work with him around this particular matter, because, as I said earlier on, many of us in this Chamber know certain families—we know everybody; let us be honest about it—from every whānau, from every iwi, and from every hapū in the country. Just mention a name and I am sure there is a Māori member in this Chamber who can tell us who that person is—not necessarily the person involved, but who his or her family is. Thank you.

Hon Dr PITA SHARPLES (Minister of Māori Affairs) : I would like to respond to the kind of challenge that has been waving around the room. I agree with the last speaker that the Māori Trust Office has gone to great pains to seek out owners, in a variety of activities. One of the core duties of this Government is to provide extra funding towards the location of beneficial owners, but the Māori Trustee has always sought to locate those owners—for example, through actively seeking them out by writing to them, and by circulating ownership lists at meetings. The Māori Trustee also publishes and distributes an annual unclaimed moneys book. This is available at the Māori Trust Office, at Te Puni Kōkiri, and at Māori Land Court offices. It is distributed to over 150 Māori organisations and libraries, and to Māori MPs, and it is also now available online. Māori Trust Office staff check electoral rolls, and directly contact other whānau members to try to obtain current addresses. As part of the Māori Land Court succession orders process, the Māori Trustee routinely checks and updates client addresses, where they are available.

Everyone knows how important it is to let people know about the funds to which they are entitled, but I would like to make the point emphatically that this is the Māori Trustee’s responsibility. That is why we are setting up the Māori Trustee to be totally independent; it is certainly not for me as Minister to interfere in that. The Māori Trustee is quite independent and should pursue that with vigour, not the Minister of Māori Affairs. I ask members to remember that beneficial owners’ money always belongs to beneficiaries. Kia ora.

• The question was put that the amendments set out on Supplementary Order Paper 14 in the name of the Hon Dr Pita Sharples to Part 2 be agreed to.

• Amendments agreed to.

• Part 2 as amended agreed to.

DAVID BENNETT (National—Hamilton East) : Clauses 1, 2, and 3 are quite simple, and relate to the title, the commencement, and the amendment of the principal Act. Clause 1 states that the title of this legislation is the “Māori Trustee Amendment Act 2008”. If members look at this clause, they will see that it says “2008”—

Paul Quinn: That was last year!

DAVID BENNETT: Yes, that was last year. Paul Quinn raised a very good point earlier when he asked why Labour did not pass this legislation last year if it was so good and Labour was able to do it. Well, Labour had a slight problem that Mr Quinn might not have been aware of because he was not in the House at that time. Labour had a problem with numbers, and it had the problem of an election coming up. Labour was not doing so well at the time, and it needed support from within the Māori community because there were some seats that it wanted to win.

When we look at the title clause, we see that the reference to 2008 is probably incorrect—it should be 2009. So we may have to amend the legislation to take into account the inability of Labour to gain votes last year. That point is at the heart of why there is this inconsistency in the legislation. The title clause clearly refers to 2008. I say to those who are reading the legislation now that the date is typed in bold print. It will be 2009 when the bill is passed, so maybe that is an issue that needs to be dealt with by the officials. I do not know whether an amendment has to be made to that provision in order to make sure we pass legislation that is correct. The title says “2008”, when in fact the real date in the title will have to be “2009”, according to my understanding of calendar years. There is also the fact that we had an election where the Labour Party lost more Māori seats, which reflects that Labour had not been recognising what Māori actually wanted.

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

• Debate interrupted.

DAVID BENNETT (National—Hamilton East) : Thank you, Mr Chairperson, for the chance to finish off my call on these very important parts of the Māori Trustee Amendment Bill, being the title, commencement, and principal Act amended. Before the Committee stopped for dinner, we were talking about the title of the legislation and the very important point that Paul Quinn raised in his speech, about the fact that this—

Paul Quinn: He missed it! The chief whip missed it.

DAVID BENNETT: The chief whip of the Labour Party missed it. The important part is in bold, so the chief whip should get it. It states “2008” when the reality is that this bill will be passed in 2009. The very important point that Mr Quinn made was that the Labour Government did not have sufficient grace to pass this bill when it had an opportunity to do so. The reason it did not pass it was that it did not have the votes. It was election year and it was struggling. The other fact is that, basically, this bill has been amended in the sense that the controversial part is not part of the legislation any more. There was a controversial part to it in the sense of the slush fund that Labour was looking to set aside—

Paul Quinn: For their mates.

DAVID BENNETT: Yes, for its mates, for its own purposes, and, in typical Labour fashion, for its own interests. This bill needed to be, and is now, in the best interests of Māori and in the best interests of the Māori Trustee. That is what the National Government has endeavoured to do, and we have achieved it through this legislation.

Members will note that the Act commences 6 weeks after the date on which it receives the Royal assent, so essentially it comes into force straight away, once it has been passed through this House and receives the Royal assent. Clause 3 states that the principal Act amended is the Māori Trustee Act 1953. The important part of the title is not only the word “Māori” but also the word “Trustee”. When we think of a trustee, we think of somebody who holds something in trust—somebody who has a fiduciary duty to act on behalf of the beneficiaries of that trust. We have heard throughout the debate on this legislation some issues raised by Tau Henare in particular about the ability to find the beneficiaries. He eloquently related it to the fact that the Inland Revenue Department would be able to pick up someone pretty quickly, but the Māori Trustee was not able to do so. He felt there was a dilemma there that should be dealt with in this legislation, or in the future as we look at the Māori Trustee going forward, and that is a very important thing. I think that, although all parties in this Chamber agree with the legislation—

Hon TAU HENARE (National) : As my learned colleague Mr David Bennett has said, these provisions in the Māori Trustee Amendment Bill deal with the title, commencement, and the principal Act as amended. I want to draw the attention of the Committee to this: the Act comes into force 6 weeks after the date on which it receives the Royal assent. So from the time the bill was promulgated—

Paul Quinn: Prior to July 2008.

Hon TAU HENARE: —that is right. Those fellas on the other side—

Hon Mita Ririnui: Us fellas?

Hon TAU HENARE: —those fellas and “fellesses”—have consistently tried to put up this bill in two parts. We went through the select committee process and through the process of listening to submissions, and it was pretty obvious, even in the late stages of a dying Government, that it could have got the bill through. If only it had used common sense—

Paul Quinn: And a will!

Hon TAU HENARE: —and had a will to do it, the bill would have passed. It had the numbers to pass this part. In fact, the Māori Affairs Committee suggested to the previous Minister of Māori Affairs that he should split the bill, that everybody would be happy with the first part, and that he should leave the second part. But what did the previous Minister do? He was so stuck in the mud that he would not and could not move. The Minister was unwilling to move, as my colleague Paul Quinn said, and that somewhat shocks me.

The fact remains that the Minister in the chair, the Hon Dr Pita Sharples, is the one who has come in and swept aside the old. He is in with the new. How long has it taken him? How long has this Government been in place?

Hon Mita Ririnui: Too long!

Hon TAU HENARE: Mita Ririnui says that it is too long, but we have been in Government only 6 months.

Hon Damien O’Connor: It’s 6 months too long.

Hon TAU HENARE: Now we hear from Damien O’Connor, the new blood of the Labour Party; the new face of the Labour Party! But, all kidding aside, the commencement date for this bill should have been prior to July 2008, because the previous Minister had it within his powers to shunt this measure along—to move it along—but, unfortunately, there was not a will when there was a way. So that is the disappointing part of this matter.

Clause 1, “Title”, states: “This Act is the Māori Trustee Amendment Act 2008.” It is a long time since the actual Māori Trustee Act has been amended. So I suppose, to be gracious, we have to tip our hats just a little to the previous Minister—

Hon Mita Ririnui: Just a little?

Hon TAU HENARE: —just a little—for having the discussion and going through the select committee process. But, all in all, the bill does what it says; it heralds a new era for the Māori Trustee. It heralds a better form of accountability and transparency for beneficiaries—for those people whose lands are tied up under the Māori Trustee. The bill enables the Minister of Māori Affairs to appoint the Māori Trustee and to appoint other people, as well.

Hon MITA RIRINUI (Labour) : It is interesting that since the beginning of the debate this afternoon members who have spoken, including the Chairperson, have said we need to narrow our comments to relevant aspects of the different parts of the bill. I am surprised, Mr Chairperson, that you did not pull the Hon Tau Henare up on a couple of occasions because he talked about a part of the bill that does not exist. That discussion may have taken place during the process in the Māori Affairs Committee, but certainly his comments were not relevant to the bill.

However, the bill is aptly titled the Māori Trustee Amendment Bill, and that title covers a lot of the debate this afternoon about what Part 1 means in terms of setting up a stand-alone Māori Trustee Office free of the shackles of Te Puni Kōkiri and free of the encumbrances that come with the position of Māori Trustee in the current legislation. This amendment bill, which is going through the parliamentary process, will set up that stand-alone organisation, once the bill is enacted.

In listening to the quality of the debate and some aspects raised, it is interesting to note that both the previous Government and the current Government have supported this bill. It is important that we take another look at the way in which Māori-owned assets that are held in trust are administered, and whether we can put in place a regime that will help the Māori Trustee do the job better. We believe, as we have since the bill was introduced by the previous Minister of Māori Affairs under the previous Labour-led Government, that it is an important bill to bring about those necessary changes. It was really pleasing to see the present Minister of Māori Affairs stand in the Committee stage and commit his total support to the bill. He also provided some clarity around some of the issues that were raised during the debate on Part 1, and also Part 2 in terms of the transition process where it concerns not only the transfer of assets from one entity to another, which technically tends to be the same organisation under separate legislation, but also provisions that affect employment-related issues for Māori Trustee staff. I believe there are not too many of them, but if the Minister picks up the challenges that were put before him this afternoon by a former—three times removed—Minister of Māori Affairs, the Hon Tau Henare, I am sure he will have an incredible task ahead of him.

As I said earlier on, members on this side of the Chamber are committed to improving the quality of trusteeship over Māori-owned assets, so we will work with the current Minister of Māori Affairs, put our political differences to the side, and have the best interests of Māori at heart. However, having said that, we have high standards and high expectations. We will be reminding the Minister on a regular basis, should we go down this pathway, of what those expectations are.

I did not leap to my feet to respond to the unkind comments of the previous speaker but I need to clarify some of the things that he raised, because they are relevant to the good work of the previous Minister of Māori Affairs under the previous Labour-led Government. As I said, the present Minister of Māori Affairs is certainly showing leadership on this very, very important issue. Thank you.

SANDRA GOUDIE (National—Coromandel) : I also acknowledge the excellent work of the Minister in progressing the Māori Trustee Amendment Bill—

Hon Mita Ririnui: Which one?

SANDRA GOUDIE: —and that Minister is obviously the Hon Pita Sharples, who has done a wonderful job. We could call this trust a good trust as opposed to being a bad trust, and I have alluded to the fact that there are bad trusts. This bill is an excellent bill. It provides for the Māori Trustee entity, and that is as it should be.

The bill introduces a level of accountability for the office of the Māori Trustee that has not previously been required. It also allows for the Māori Trustee to be free of political pressure, by establishing it as a stand-alone organisation. That is to be commended. The bill provides for better, more open communication between the Māori Trustee and its beneficiaries, and the bill’s provisions mean that the beneficiaries of the Māori Trustee can be sure they are receiving equitable income from the common fund.

The National Government’s support of the bill shows our commitment to a strong relationship with the Māori Party. In the current financial climate it is important that all public entities be seen as transparent and accountable.

I do not know whether members recall my earlier comments about one entity, the Earthwise Living Foundation New Zealand, a trust that also runs Kiwi Internships. That trust does not have that same level of accountability, and it certainly does not have that same communication with its beneficiaries. It does not have the openness and transparency that the Māori Trustee is gaining through the process of this bill. Jon Traylen of the Earthwise Living Foundation New Zealand is questionable in what he purports to represent. His environmental site, which I have visited, is a mess, and he treats the environment, animals, and people disgracefully. He makes his visitors, volunteers, and interns, who are all overseas visitors, feel unsafe. He is more of a predator of young women as time goes by. He promises a lot but delivers little.

The CHAIRPERSON (Lindsay Tisch): Order!

SANDRA GOUDIE: He exploits people for personal gain. I say that, Mr Chair, because I am talking about a situation where someone is not accountable. That is not the case with the Māori Trustee Amendment Bill—that is what is so good about the bill. It provides for those accountabilities, it provides for that communication, and it ensures that those things are there for the benefit of the beneficiaries. In a lot of respects the Māori Trustee is very similar to the Public Trust.

It is interesting to note that many members have spoken on this bill and spoken so well, and they know so much more about the implications and the subject matter than I do. But I was very impressed by the words spoken tonight by the Minister. He clearly enunciated the intent of the bill—that it does away with the Māori Trustee office and establishes a new stand-alone entity. I am delighted to be able to speak in support of the bill, and I commend it to the Committee.

• Clause 1 agreed to.
• The question was put that the amendment set out on Supplementary Order Paper 16 in the name of the Hon Dr Pita Sharples to clause 2 be agreed to.

• Amendment agreed to.

• Clause 2 as amended agreed to.

• Clause 3 agreed to.

• Bill reported with amendment.

• Report adopted.

Hon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of the Minister of Commerce: I move, That the Patents Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Commerce Committee for consideration. I suppose the first issue to be confronted is the pronunciation of the word “patent”. Some people say “pay-tent” while others say “pat-ent”. Indeed, I am reminded of the story of three leading barristers who were called to the inner Bar many years ago. Mr Turner advised the court that he had in his hand letters “pay-tent”; Mr Leicester advised the court that he had letters “pat-ent”, and Mr Leary advised the court that he had in his hand a document essentially similar to the other two! This bill reforms a very important aspect of New Zealand’s intellectual property regime. The Patents Act 1953 is overdue for reform. It is modelled on the Patents Act 1949 of the United Kingdom, and that legislation had its roots in the Statute of Monopolies 1623, which was enacted following the famous case of monopolies that struck down a royal monopoly on the manufacture of playing cards. As was observed in a 2005 decision of our Court of Appeal called Pfizer Inc v The Commissioner of Patents, the 1953 Act is a curious amalgam arising out of very old and peculiar circumstances, which arose out of the long history of the royal grants of privilege in the United Kingdom. It then evolved through various statutory provisions, and the law has been supplemented over the years by the leading decisions of senior appellate courts, which set out case law landmarks against which the law of patents had to be viewed. I agree with the observation of Justice Hammond at paragraph 110 of that case that given the already intrinsically challenging subject matter of patents, this background has not made the law readily accessible or easy to understand. It was the deplorably obscure state of the law that led Charles Dickens to write A Poor Man’s Tale of a Patent.

What are patents? They are an intellectual property right granted for inventions providing the patent owner with the sole right to capitalise commercially on the invention for the term of the patent. They therefore provide an incentive for innovation. However, patents can also impose costs on society as they are, effectively, a form of monopoly right. This is a particular issue for New Zealand as most patents granted are to foreign applicants.

In New Zealand patents are granted after an examination process by the Intellectual Property Office of New Zealand under the authority of the Commissioner of Patents. The standard of patent examination required by the 1953 Act is less strict than that required for most countries. This means that patent rights granted in New Zealand may be broader in scope than rights granted for the same invention in other countries. Another consequence is that patents may be granted for inventions that already exist or where they are obvious variations on existing technology. This has the potential to disadvantage New Zealand businesses and consumers as technology that is freely available elsewhere could be covered by a patent in New Zealand. Since innovation is often incremental, building on what already exists, local innovators may also be disadvantaged.

To be granted a patent under this bill, an invention must be a manner of manufacture, novel, involve an inventive step, and be useful. These criteria are stricter than those in the current Act, and are more closely aligned to the criteria applied in most other countries. Applying the stricter criteria will substantially reduce the potential disadvantages to local firms and consumers arising from criteria applied under the current Act. Inventive steps and usefulness are not part of the examination process under the Patents Act 1953, although lack of an inventive step or usefulness are grounds upon which third parties can challenge the grant of a patent.

Novelty and an inventive step will be determined on the basis of all information that has been made publicly available anywhere in the world before the filing date of a patent application. Under the current Act, these criteria are determined with respect to what is known or used in New Zealand only. No notice is taken of information published outside New Zealand. The courts have also interpreted the 1953 Act to require the Commissioner of Patents to give applicants the benefit of the doubt when deciding whether to grant a patent. The effect of this is that the commissioner may have to grant patents that a court is likely to find invalid. The bill removes this requirement, requiring that the decision to grant or not to grant a patent be based on a balance of probabilities approach.

The bill excludes some inventions from patent protection, even though they might otherwise meet the requirements for a patent, if there is no benefit to the nation in allowing these inventions to be patented. Methods of treatment of human beings by surgery or therapy, and methods of diagnosis practised on human beings will not be able to be patented under the bill. The courts have decided that such methods are not patentable under the Patents Act 1953, but there is no specific exclusion in the 1953 Act. To remove any doubt as to whether such methods are able to be patented in New Zealand, the bill introduces a specific exclusion. In line with the recommendations of the Royal Commission on Genetic Modification, human beings and biological processes for their generation have been excluded from patent protection. Perhaps an exception could be made for the chief Opposition whip, but it would be defeated, I think, by the usefulness test I referred to earlier. Also excluded are inventions whose commercial exploitation would be contrary to morality or public policy. It is likely that few patent applications would be refused on this ground. This provision is intended to be used only in relation to inventions where commercial exploitation is likely to be offensive to a significant section of the community, including Māori.

No matter how thorough the patent examination process is, some patents may be granted that should have not been granted. Such bad patents have the potential to impose unnecessary costs on the Crown, for example, in the health budget, and also impose costs on consumers and businesses. The bill, therefore, introduces simplified procedures that will reduce the cost and complexity involved in challenging bad patents. The bill also provides for the establishment of a Māori advisory committee to advise the Commissioner of Patents in relation to applications for inventions involving traditional knowledge or indigenous plants and animals. The establishment of a Māori advisory committee was recommended by the Royal Commission on Genetic Modification.

The bill also contains a number of procedural and administrative matters associated with the application for a patent so as to minimise costs and delays. It also updates the regulatory regime for patent attorneys who provide technical and legal advice on intellectual property matters.

The bill is consistent with New Zealand’s international obligations in this area, including the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS agreement). The TRIPS agreement has been amended with regard to the granting of compulsory licences for the production of patented pharmaceuticals for export to countries that require such pharmaceuticals to deal with public health problems, but have insufficient or no capacity to produce them themselves. The Government proposes to accept this amendment to the TRIPS agreement, and appropriate amendments to the bill will be proposed during the select committee consideration. I commend this bill to the House.

Hon DAVID PARKER (Labour) : First, I say that I agree with everything the Attorney-General said. The bill, of course, is one that the National Government has taken over from the outgoing Labour Government. It is a matter of public policy that seeks to balance two interests. First is the interest of New Zealand to stimulate the creation of new inventions in New Zealand and to ensure that we readily have access to inventions that have been developed overseas. We do that by giving inventors who have developed something novel a right to exploit for commercial purpose that novel invention for a period of time, and during that period of time they have monopoly rights. Those monopoly rights confer the right to extract monopoly rents. We all know that monopolists have a reputation for extracting monopoly rents, and left uncontrolled they impose an inappropriate cost upon a society. This is the second public policy interest.

Patent legislation tries to give an appropriate period of exclusivity to the patent holder to exploit his or her invention for commercial gain. This gives the person or the company that owns those rights the incentive to develop the invention in the first place for the betterment of society. But the quid pro quo of the granting of those rights is the societal right to limit the period over which the person or company can exploit those monopoly rights. Under the current patent legislation, and as will be the case if this bill passes into law, that period is 20 years from the date when the application for the patent is made. So through that time-limited grant of monopoly rights, we attempt to strike a balance.

I endorse some of the Attorney-General’s comments about the imperfections in the current patent law. It is now clear that New Zealand’s patent law is too generous to those people seeking patents. It confers patents and, therefore, monopoly rights on, mainly, corporations. In New Zealand’s case it is mainly multinational corporations outside of New Zealand that can gain patent rights to inventions in New Zealand that they would not be able to gain patent protection for overseas. As the New Zealand regime is more lenient than overseas regimes, we are effectively allowing those patent holders in New Zealand to extract monopoly rents at the cost of the New Zealand economy and at the cost of New Zealand society in circumstances that would not be allowed in overseas jurisdictions. To remedy that ill—because it is wrong that the current law in New Zealand is more lax than overseas rules relating to granted patents—this bill tightens up the criteria upon which the Patent Office can grant a patent. Those criteria apply if the patent is novel and has its first patent application as a consequence of a New Zealand - based invention. But they also apply to inventions that come from overseas and are patented in New Zealand, because when that happens the New Zealand economy is faced with that monopoly rent being extracted for the benefit of the overseas patent holder. There needs to be proper control on those overseas patents coming into New Zealand. They should not be given out too freely.

How does the standard change? It changes in a number of ways. For a start—and I think this is a very important change—there are changes to the standard of proof that is required of the applicant for the patent. Previously where there was a doubt as to whether an invention was patentable, or where there was a doubt as to whether the invention was novel, as was claimed, those doubts were resolved by the benefit of the doubt being given to the applicant. That meant that people were getting patents in New Zealand because they could say that there was a doubt as to whether it should be granted. New Zealand had to give the benefit of the doubt to the applicants. Hence they got their patents.

That standard of proof is being changed. Now the patent applicant will have to show to the Patent Office that on the balance of probabilities the prerequisite tests for the grant of a patent are met. So rather than the benefit of the doubt being given to the applicant, the applicant has to prove his or her claims on the balance of probabilities.

The other main change is that now there are requirements that novelty, an inventive step, and usefulness must be proven. The standard of examination in New Zealand was relatively low on this issue, compared with other countries. Until now there has not been an examination for an inventive step or usefulness as a prerequisite to the granting of the patent.

Todd McClay: A bit like Labour Party selection.

Hon DAVID PARKER: That was an irrelevant comment from Mr McClay.

As a consequence, New Zealand was granting patent rights that would not have been granted in overseas jurisdictions, and again this was an abuse, from a public policy sense, of the monopoly rights that are given to patent holders.

Another matter being made clear in New Zealand, as well as in most overseas jurisdictions—but not in all overseas jurisdictions—is that it is not permissible to patent medical treatment or methods of medical treatment. In my opinion, that is a very proper limitation on the right to grant patents. One should not be able to patent methods of medical treatment on humans. That is an area that has long been excluded in New Zealand and in similar jurisdictions. It is permissible in some other jurisdictions, and, indeed, some fine points have been drawn in New Zealand patent jurisdictions. If my memory serves me correctly—it is a little while since I have looked at this area of law—I think “Swiss claims” is the professional jargon used to describe some of the close-to-prohibited methods of treatment of human ailments that are able to be patented. This legislation makes it clear for the first time in statute law, as opposed to judge-made law, that treatment methods of human disease, etc., are not eligible for patent.

One of the other major changes here, which I think is important, is that instead of the Patent Office looking only for prior instances of that which is claimed to be invented in New Zealand, it is now looking internationally. The Patent Office will have to be satisfied that the applicant for the patent can show that it is novel and inventive. The Patent Office will not be looking just at what is called “prior art” in New Zealand, but will be looking at what is prior art internationally. If, for example, the thing for which patent protection is sought in New Zealand has previously happened in the United States of America, then that fact will be taken into account. If there was an identical discovery that had been published previously in America, that would prevent a patent from being granted in New Zealand, because it would not be novel. Again, that is an appropriate change to the legislation and, again, this will benefit New Zealand economically because the monopoly rents will not be extracted by a patent holder for a patent that might have been granted otherwise, when it should not have been.

There is one other change that I think is worthy of note. That change relates to the instance where a disclosure has been made by someone who should not have made that disclosure, and, therefore, the invention is no longer secret. When someone goes to the Patent Office and tries to establish that something is novel, that person has to show that it has not been effectively published—that it is not out there, known to other people already. The reason is that that person is meant to be patenting something that is novel. If it is already known, then obviously it is not novel, and that person should not get a patent for it and the monopoly protection and advantage that come with it.

But if the disclosure was made by someone who had received that information confidentially, and if that person had a duty not to disclose it, but then did the dirty on the inventor by disclosing information that he or she had a duty to keep secret and should not have made public, then it seems unfair that the inventor cannot claim patent protection for that. This situation can arise for inventors. For example, they might be seeking capital funding for the invention they are trying to develop, there is a confidentiality agreement, and then the financier breaches the confidentiality agreement. Until now that vitiated the ability of the patent applicant to get the patent. This bill makes an exception and gives them a year to follow up and apply for a patent. I think that is a good change. Thank you.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : I rise to speak on the Patents Bill, and may I first acknowledge the first two speakers, the Hon Chris Finlayson, the Attorney-General, as well as the Hon David Parker, for their contributions tonight. I think they have both made valuable contributions to our discussion and debate tonight. I also acknowledge the previous Associate Minister of Commerce, the Hon Judith Tizard—who is, of course, the next person on the Labour list—for introducing this bill on 9 July 2008.

We have already heard tonight that the purpose of the Patents Bill is to update the Patents Act 1953. This update is well overdue, as both previous speakers have explicitly intimated in their representations. Our Act is based on the United Kingdom’s Patents Act 1949. But, of course, a number of amendments to the UK Act have been made subsequently—not only the Patents Act 1977 but also the Patents Act 2004, which made a number of legislative developments to UK statutes.

Intellectual property, of which patents are only a part, has been touted as the foundation for New Zealand’s economic development into the future. As we have already discussed tonight, the current statute, which is 56 years old, is largely outdated, and most other countries examine for both novelty and inventive step. Many countries examine for usefulness, as well. When we consider both those concepts, we find that nearly all developed countries that have such legislation consider that information should be made available anywhere in the world. Applicants are generally given the benefit of the doubt in any dispute.

Novelty is currently determined on the basis of what is known or used in New Zealand. Sadly, information available overseas but not in New Zealand is not considered when determining novelty. As previous speakers have suggested, the consequence of this is that patent rights granted in New Zealand are often broader than the patent rights granted in other countries for the same invention.

If we look to the Australian experience, we see that Australia’s current law is being reformed. The first of the two pertinent areas that the Australians are looking at is patentable subject matter. The main legal test in Australia in terms of whether an invention is patentable subject matter involves the manner of manufacture. The three main tests are its breadth, whether its patents are allowed in subject matters, and whether the granting of patents hinders innovation, investment, and public access to new technologies.

The second area of concern to the Australian legislature that is being reviewed is the post-grant patent enforcement strategies, for which there is also a current consultation process in place. In the United States, congressman John Conyers introduced the Patent Reform Bill in March of this year. It overhauls the US patent system in order to harmonise US laws with international best practice and to award patent coverage to entities that first file a patent application. The US patent law currently operates under a first-to-invent system.

We have heard various definitions of patents tonight. However, the expression “use of patents” could be understood in different ways. For example, a business might use someone else’s patent to develop an improvement, and then apply to patent that improvement. This is at the heart of our patent system. In exchange for making inventions publicly known, the inventor is given sole rights to profit from the invention for a limited period of time. Using patents could also be understood to refer to applying for patents to protect one’s own inventions. Many thousands of patents are applied for each year in New Zealand, but the majority are applied on behalf of overseas companies. Although patents must be granted in New Zealand to have validity here, most New Zealand patents are of foreign origin and protect the inventions of foreign applicants. Patents are classified in New Zealand under the International Patent Classification system, or the IPC. This system is quite different from that of the United States, which has subject class numbers shown on the patent record.

The main purpose of this bill is to ensure that the patent is granted for inventions in appropriate circumstances only, by establishing appropriate criteria and providing procedures that allow for the validity of that patent to be tested. In terms of the reforms being proposed in this country, it is unique that we will be addressing Māori concerns relating to the granting of patents for inventions derived from indigenous plants and animals or traditional Māori knowledge. Of particular importance will be the establishment of a Māori advisory committee to advise the Commissioner of Patents in this area. The relationship that our Government is forming with the Māori Party is really important, as are the number of initiatives that we are putting in place to address the needs of tangata whenua. This is just another example of our positive work with the Māori Party.

The bill is also designed to improve and promote the quality, expertise, and integrity in the profession of patent attorneys. I have talked about some of the international developments, and this new regime will take some of those into account.

I will say a quick word about some of the exclusions under this bill. An invention is not patentable if the commercial exploitation of that invention is contrary to public order or morality. We have also heard that human beings and biological processes for their generation cannot be patented, as well as inventions of methods of treatment of human beings by surgery or therapy. Of course, some of these changes and proposed clauses will be subject to select committee consideration, and we look forward to healthy discussion on this at the Commerce Committee when we go through the various clauses.

Clause 21(1), “Who may be granted patent”, states: “A patent for an invention may only be granted to a person who—(a) is the inventor; or (b) derives title to the invention from the inventor; or (c) is the personal representative of a deceased person mentioned in paragraph (a) or (b).”

I sum up by saying that I support this bill. There is much discussion to be had at the select committee around some of its clauses, but overall these amendments are long overdue. They bring us up to scratch with international best practice, and I support this bill. Thank you.

CHARLES CHAUVEL (Labour) : Law students know that in general terms a patent is a set of exclusive rights granted by a nation State to an inventor or his or her assignee for a limited period of time in exchange for public disclosure of the fact of the invention.

Internationally, there are widespread differences between the practice of nation States as far as the requirements that are placed on patentees and the extent of the exclusive rights conferred are concerned. These vary widely between countries according to national laws and international agreements. Typically, a patent application must include one or more claims that define the invention, which must be new, inventive and useful or industrially applicable. In many countries, certain subject areas are excluded from patents, such as business methods and mental acts. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission.

In England, the Crown issued letters patent, which provided any person with a monopoly to provide or produce particular goods or services. The first such letter was granted by Henry VI in 1449 to a Flemish man for a 20-year monopoly for his invention, a manufacture process for stained glass destined for Eton College. This was the start of a long tradition by the Crown of granting letters patent that granted monopolies to favoured persons or people who were prepared to pay for them. The famous legal scholar Blackstone explained how letters patent or, in Latin, literae patentes—literally, “letters that lie open” —were so called because the seal hung from the foot of the document. They were addressed “To all whom these presents shall come” and could be read by anyone without breaking the seal, as opposed to letters closed, which were addressed to a particular person, who had to break the seal to read them.

The power to grant monopolies began to be abused as a revenue-raising technique for the Crown. As an alternative to calling Parliaments together to seek appropriations, the Crown began to grant patents in respect of all sorts of common goods—salt was a notorious example—so the courts began to limit the circumstances in which they could be issued. After a public outcry over the abuse of patents, James I of England was forced to revoke all existing monopolies and declare that they were thenceforth to be used only for projects of new invention. This declaration was incorporated into the Statute of Monopolies, which Parliament used to explicitly restrict the Crown’s power so that the king could issue letters patent only to the inventors or introducers of original inventions for a fixed number of years. In the reign of Queen Anne—1702-14—English lawyers developed the requirement that a written description of the invention must be submitted along with the patent application. These developments, which were in place during the colonial period before the independence of the United States, were the foundation for patent law in the US, New Zealand, Canada, Australia, and the other English-speaking jurisdictions.

Interestingly—and the previous speaker, Peseta Sam Lotu-Iiga, touched on this development—in the United Kingdom the Patents Act 1977 and its successor in 2004 harmonised UK patent law with the European Patent Convention. As a result of this, although New Zealand law remains based on the old English Statute of Monopolies, UK patent law is now an amalgam of UK and European practices. International law has also had a bearing on the development of contemporary patent law and practice. Under the World Trade Organization Agreement on Trade-Related Aspects of International Property Rights, patents should, in general, be available in World Trade Organisation member States for any inventions, in all fields of technology, and the term of protection available should be a minimum of 20 years—harking back to the old Henry VI first patent for the production process of stained glass for Eton College.

New Zealand patent law has not been updated for over half a century. Given the history that I have just recounted, and the fact that the relevant UK law is now largely a reflection of European treaty provisions and developments in international law, it was clearly timely for the previous Labour Government to introduce the present bill. I pay tribute to Judith Tizard, the Minister responsible for this area in the last Government, for having done so.

As the Labour Party’s associate spokesperson on commerce, I am very pleased to say that—

Paul Quinn: Why is she not here now?

CHARLES CHAUVEL: —as this is a reintroduction of our own measure, I say to Mr Quinn, we will obviously support it. Members opposite will be interested to remember that New Zealand has a small economy, we are remote from our markets, Kiwis like to travel and live abroad, and our high level of education and mobility means that we are free to do so in significant numbers. With some notable exceptions, we remain reliant on innovation in the primary production and services sectors. We are innovative people.

So what are the virtues that a reformed patent law system should embody, and what are the evils that it should seek to regulate? There are six virtues that I think the system should promote. First, and above all, we should have a system that incentivises invention in the first place. Secondly, there should be incentives to disclose the invention once made, so that the general science in the applicable area can advance. Thirdly, it should be attractive to invest the sums of money necessary to improve the invention and to produce and market it. Fourthly, it should be relatively easy to design around, and improve upon, earlier patents—again, to build innovation into the system on a continuous basis. Fifthly, a patent scheme should promote any unique cultural and other advantages that New Zealand possesses. Finally, it should interact consistently and robustly with the international legal rules surrounding the protection and promotion of innovation.

The major evil that a patent regime should avoid, given that, as I said earlier, it confers a negative right upon a patent owner, is unduly excluding competitors from using or exploiting the invention, even if the competitor subsequently develops the same invention independently. As I have tried to show, the history of patent law is too full of examples of abuse of the right that it confers because of just how sweeping it is, so too rigid a system will stifle innovation. That must be avoided at all costs, particularly for those of us who care about building a robust economy in New Zealand, which certainly includes all the members on this side of the House.

Labour members look forward to measuring the Patents Bill against the tests that I have mentioned. We look forward to hearing submissions in the select committee from affected parties. Above all, we look forward to contributing to modernising the New Zealand patent system in a way that balances respect for the rule of law with promoting a vibrant culture of innovation in this country.

KEVIN HAGUE (Green) : Clearly this area of law was long overdue for review. As such, the Patents Bill contains quite a number of helpful developments that we are pleased to support. For example, we support the tougher absolute novelty test and some of the specific exclusions from patent protection. Many of those exclusions have already been listed: human beings, biological processes for human generation, methods of medical treatment of humans, plant varieties, and inventions whose commercial exploitation would be contrary to public order or morality. The Green Party also supports the establishment of a Māori advisory committee to provide advice on patent applications involving indigenous flora and fauna. We further support the various process improvements to the ways in which patents are granted and how their validity may subsequently be challenged.

However, given that the review has been so wide ranging and was so overdue, it is a great shame that the Government has not seen fit to unpick the fundamental ideas underpinning patent law. I liked the Hon David Parker’s use of the word “monopoly”. A patent essentially provides an absolute monopoly on the use of a particular idea. Proponents of patents argue that they are necessary to encourage innovation and, thus, the development of knowledge. Their assumption is that innovation will not occur unless there is a financial return, and that a patent is the best way of providing such a return. Time does not permit a detailed analysis of that assumption, but I want to focus on some areas where the use of patents is clearly counter-productive and poorly addressed—or not addressed at all—by the Patents Bill.

I will begin by looking briefly at software. The bill proposes that software should be patentable; the opposite direction to that being pursued by the European Union. This is a very bad idea. The foremost theorist in this area is Richard Stallman. Stallman eloquently argues that the use of software patents stifles creativity, massively reduces efficiency, and can lead to whole areas of software usefulness remaining unexplored. Software patents are a substantial cause of software incompatibility, for example. He draws an analogy with the composition of a symphony. Suppose someone had patented particular chord progressions, sequences of notes, or combinations of instruments playing at the same time. What sort of problem would Beethoven have had? We regard him as a brilliant and innovative composer, but he wrote symphonies using a musical vocabulary comprised of very many musical ideas developed by multiple composers. Stallman argues that even a genius software programmer must draw on a standard vocabulary of programming ideas. If software patents are permitted, then the programmer cannot draw on such ideas without infringing patents. The consequences are that whole areas of software development are avoided lest software developers breach patents, and in other areas inefficient or otherwise unsatisfactory programmes remain in use because it is not technically feasible to develop better options because of this restriction. In this area patents are clearly a brake and a hindrance on innovation.

Stallman also makes some other points. He points out that the 20-year duration of patent coverage may be reasonable for a new mousetrap, but is effectively for ever for a software idea—think back to the software that we were using in 1989. He also notes that it is effectively impossible for somebody developing a new program to be aware of all the patents that may apply to her or his area of work. In the United States there are over 100,000 software patents—possibly as many as 200,000. It is hard to count because they keep growing and growing at a faster and faster rate. It is not possible to be aware of all the patents that may apply, and, in general, it is not feasible to research the matter.

I do not intend to again rehearse the arguments over genetic modification. This bill will enable the patenting of genetically modified organisms. This ability is not required for scientific inquiry or for the development of knowledge—in fact, it will inhibit these—but rather for the commercial exploitation of genetically modified organisms. This is absolutely opposed by the Green Party and by most New Zealanders. Professor Jonathon King, for example, told the Royal Commission on Genetic Modification that the “undermining and reversal of the biomedical culture of open communication and exchange is one of the most destructive impacts of life patents.”

We know that this issue is also a concern for Māori, whose interest is often the protection of collective and traditional knowledge, rather than its commercial exploitation. The assumptions implicit in patent law are at odds with the promotion of knowledge and ideas for non-commercial purposes. Professor King also raised with the commission the enormous public disquiet over what he called “the transformation of biological entities into private property through the use of intellectual property rights.” Although it is good to see some protection against patenting of indigenous flora and fauna, there is no such protection in respect of micro-organisms. I cannot see any argument or basis for this distinction. This whole area of the relationship between biological entities and traditional knowledge and so-called intellectual property rights, is one that we know is of particular concern to Māori. As far as I can tell, consultation with Māori on this issue, including this bill, has been minimal, at least since the 1990s.

Another area in which the existing patent approach is counter-productive to progress is that of international development. As George Monbiot points out, “Because capitalism is built upon the lending of money at interest, capitalist economies are driven by the need to repay debt, which is why survival in this system is contingent upon endless growth.” Monbiot points out that endless growth is physically impossible, but the rich world attempts to achieve this by bleeding the poor world of natural resources and human capital. One of the methods for doing so is through the insistence that poor countries open their borders to free trade and capital flow, while conveniently ignoring the fact that the rich countries became rich largely while operating protectionist policies themselves.

Another mechanism is through patents. Of all patents in the world, 97 percent belong to corporations in the rich world. This means that in order for poor countries and their economies to gain access to new technologies, they are forced to permit these corporations to operate from their soil. These corporations usually repatriate the profits, so the economic benefit to the poor economy is slight, and the cost of being able to access new technology in this way is usually environmental degradation and exploitation of labour. In Monbiot’s words: “Corporations wishing to invest abroad seek the cheapest of all possible conditions: low wages; no obligation to pay for pensions, health insurance or other benefits; low health and safety and environmental standards; low tax; and few regulations to prevent them from extracting as much money from the nation as they can, while leaving behind whatever mess they choose to make”. Patent laws and requirements through the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights are used by big corporations from the rich world to maintain privilege by exploiting the poor world.

The fact is that we have only one world. We are all in this together. It is evident that the global economy needs fixing, that our international institutions need reform, and that wherever we live in the world, we are the victims of environmental degradation wherever it occurs. We need a global Green New Deal. These times demand not tinkering but a fundamental rethink of many of the constructs that have been used to facilitate business as usual. Patent law is one of these. What we need instead—or, at least, in addition—is the development of some non-antiquated ideas for how knowledge and new ideas can be encouraged for the benefit of us all. It is not as if there is a dearth of such ideas. In fact, there are plenty, such as open-source software, Creative Commons, and the flexible application of intellectual property rights to facilitate development in the poor world.

The Green Party would be very happy to work with the Government and with other parties to develop positive ways of encouraging innovation without stifling some of the most important reasons for doing so. The bill is not fit for this purpose, and the Green Party will oppose it.

RAHUI KATENE (Māori Party—Te Tai Tonga) : There is a comment made by the late Professor Sir Hugh Kāwharu that I want to share at the very first reading of this Patents Bill to ensure that the context for our position on patents is firmly established. At the Waitangi Tribunal hearing in May 2002, Professor Kāwharu referred to the significance of the Wai 262 claim, saying: “In my opinion, the present claim has had no equal in terms of significance to Maori since the Te Reo Maori claim in 1985. Such a statement is not made lightly.… The Wai 262 claim takes another step forward from that auspicious claim in 1985. It focuses on that simple phrase in the second article of the Māori version of Te Tiriti o Waitangi—Te tino rangatiratanga o o ratou taonga katoa. It talks of a way of life, a world view, a culture, an identity. Denial by the Crown partner of these matters is the cause of historical and contemporary Treaty breaches.” What more is there to say? The protection of our cultural and natural resources and the preservation of our traditional knowledge are imperative for our future. It was because of this significance that Wai 262 was initiated, to make evident the guarantee of tino rangatiratanga over all taonga that was promised in article 2 of Te Tiriti o Waitangi.

Now, here is the challenge. While Wai 262 is still before the Waitangi Tribunal, it simply makes no sense—indeed, it is nonsense—to be considering legislative proposals that cut to the very heart of that claim. This bill contains provisions that, supposedly, are to address Māori concerns about the granting of patents for inventions derived from indigenous plants and animals, or from Māori traditional knowledge. It establishes a Māori advisory committee to advise the Commissioner of the Patent Office on whether an invention claimed in a patent application is derived from Māori traditional knowledge or from indigenous plants or animals. Having done so, the Commissioner must consider the committee’s advice on whether the commercial exploitation of that invention is likely to be contrary to Māori values. I want to make it quite clear that the fact that some Māori may choose to use patents in the pursuit of their research or commercial endeavours does not mean that the patents system is a tool of any great protection for our taonga. Patents, by their very nature, are monopolistic. They exclude others from use, and they are expensive to obtain. When applied to physical natural life forms, traditional food crops, medicines, and knowledge, patents can suddenly accord individuals legal rights as inventors and owners, while the indigenous world view is ignored.

In the closing submissions to Wai 262 from Ngati Puri, Te Arawa, and Ngāti Wai, the claimants of Te Tai Tokerau were unanimous in their view that patenting is not an appropriate mechanism to protect our mātauranga, specifically in relation to the biological and genetic resources of taonga species. What was even more revealing from the submissions was the outright commercial corporate greed that has been associated with the misuse of patents. They described the fact that patents derived from traditional knowledge of plants and medicines generated tens of billions of dollars in revenue for major international pharmaceutical and agrichemical companies. Companies like Monsanto and GlaxoSmithKline reap tens of billions of dollars from the traditional knowledge and resources of indigenous peoples. In 1990, it was estimated that the sum of US$45 billion was derived directly from traditional knowledge. If I think back to around that time, when I was a tutor in this subject, the figure that I pull out coming back to indigenous peoples to pay for that knowledge was about 0.001 percent of that total amount.

This is big business, big bucks, and big risks. This is complex stuff, and it is not helping our people. The issues that tangata whenua have with patenting are the very issues that drove Saana Murray from Ngāti Kurī, Dell Wīhongi from Te Rarawa, Te Witi McMath from Ngāti Wai, Tama Poata from Ngāti Porou, Katarina Rīmene from Ngāti Kahungunu, and my father, John Hippolite, from Ngāti Kōata to the Waitangi Tribunal in the first place. It will certainly not be the Māori Party that sells them short on the visions and aspirations they took on our behalf for the recognition and protection of our cultural and intellectual property rights in relation to indigenous flora and fauna.

It is expected that the Waitangi Tribunal will recommend the implementation of what are known as sui generis systems in order to protect Māori knowledge and indigenous flora and fauna. “Sui generis” literally means “of its own kind”—unique. It conveys a new way of doing things. In the case of patents it would be about providing adequate protection for traditional knowledge, because the current frameworks are woefully inadequate. We all know that new measures are needed. Patents have been widely used to exploit indigenous knowledge and our peoples. They are a tool of commerce—a means of establishing exclusive property rights. But we want to get it right. There is no point rushing something through for the sake of this bill when waiting in the wings is a robust opportunity for the development of new mechanisms to enable ongoing protection of our knowledge and indigenous resources.

This bill puts forward the Māori advisory committee as a sui generis measure. There is obviously something about National and Māori advisory committees—first Auckland, now patents. Well, the jury is out as to whether the concept of a Māori advisory committee is the best means by which to protect the exercise of tino rangatiratanga and kaitiakitanga over our taonga. The crux of the matter is that all the best evidence tells us that the tribunal hearing of the Wai 262 claim will recommend the development of new mechanisms, intrinsically different from the patent regime, which will enable ongoing protection, and could possibly mean new legislation. A more innovative response is needed for the problem of patents. With all the developments out of Wai 262, and at global levels with the World Intellectual Property Organization, we should be coming up with more proactive solutions than this bill.

The Mātaatua Declaration on Cultural and Intellectual Property Rights of Indigenous Peoples has made it very clear that indigenous peoples are willing to share their knowledge, as long as their fundamental rights to define and control their knowledge are respected. Indigenous peoples are not anti-science or anti-development. All we are calling for is that the integrity of life and cultural knowledge is respected. Although we recognise that traditional knowledge and use—including, of course, the medicinal use of indigenous flora—can bring about economic benefit for indigenous peoples, the fact is that patenting, as a process, is seen by our people as just another means of stealing the ownership away from the original peoples. Patenting is aligned with private economic rights, whereas our rights, as recognised in Wai 262, are collectively based and in line with our obligations and respect for natural resources.

This Patents Bill, even with its Māori advisory committee, is, at best, only a partial answer dealing with the complex implications of the recognition of traditional rights and mātauranga Māori. There are new ways and approaches that we could look to. The Trade Marks Act 2002 is an interesting case in point. Alongside the measures of trademark law there is a new sui generis measure that enables the Commissioner of Trade Marks to refuse to register a trademark if it is offensive to Māori. So it can be done.

We are influenced by the expert advice of those who paved the way to remind the nation that the Crown has an obligation to protect Māori knowledge and indigenous flora and fauna. We defer to their wisdom, and we therefore recommend in the strongest terms that this bill should be deferred until the response to Wai 262 is in front of us all. We do not support this bill.

JO GOODHEW (National—Rangitata) : I wish to begin my contribution on the Patents Bill’s first reading by acknowledging the contributions by members from Labour, the Green Party, and the Māori Party. There is every indication that the submissions on this bill will be very interesting, maybe even fascinating. I look forward, as a member of the Commerce Committee, to hearing those submissions, and to further debate on this bill.

This bill replaces the Patents Act 1953, and reforms and modernises New Zealand’s patent law. It would be fair to say that not only is the Patents Act a last-century Act, but it is significantly early in the last century. The fact that this bill was introduced is an indication that it is perhaps long overdue for review. This bill was introduced in July 2008—I acknowledge that—but it is now having its first reading under the sponsorship of the Minister of Commerce, the Hon Simon Power. In short, because a patent provides a form of monopoly right—and it has been covered by other members here this evening—the granting of patents can impose costs on society, particularly as most patents granted in New Zealand are granted to applicants from outside New Zealand. It is consistent with National’s philosophies that we should be looking at all ways to minimise costs; here it is to ensure that the patents system provides a net benefit to society. Patents should therefore be granted only for genuine innovations that are new, involve an inventive step, and are useful.

In speaking today on the first reading of the Patents Bill I believe that it would be useful to start with an outline of what I understand a patent to be. A patent is a right granted by the Commissioner of Patents, after an examination process by the Intellectual Property Office of New Zealand, to prevent others from using an invention for 20 years. That is a significant period of time. The right continues for that length of time, provided that renewal fees are paid by the end of the fourth, seventh, 10th , and 13th years after the grant. The patents regulatory system is established under the Act that I previously mentioned—the Patents Act 1953—and the Patents Regulations of the following year, 1954. That 1953 Act was based on the United Kingdom’s Patents Act of 1949. The statute was replaced in the United Kingdom by the Patents Act 1977, and the Act made significant changes to the United Kingdom’s patent laws. But New Zealand, as I have mentioned, has made no substantial changes since 1953.

The law in relation to patents in the United Kingdom and New Zealand has its origins in England in the early modern period. Patents giving monopolies for new inventions were first granted by Queen Elizabeth I to encourage the establishment of new industries within the realm. In 1623 Parliament passed the Statute of Monopolies, which restricted monopolies already granted, and prohibited the granting of new monopolies except to the true and first inventors of—and I quote—“a manner of new manufacture” that was not being used by others at the time of the grant. So this concept is one that goes back many hundreds of years.

A patent may be granted for an invention that is a manner of new manufacture, and entitles the grantee—that is, the patent owner—to a right to exclude others from making, using, or assigning the patented invention during the term of the patent. The patent owner must make public a complete description of the invention so that once the patent expires, other persons will be able to use it.

The purpose of this bill—and I intend to elaborate on the purpose—is to “ensure that a patent is granted for an invention only in appropriate circumstances by establishing appropriate criteria for the granting of a patent; and providing for procedures that allow the validity of a patent to be tested; and provide greater certainty for patent owners and the users of patented inventions that patents will be valid after they are granted; and address Māori concerns relating to the granting of patents for inventions derived from indigenous plants and animals or from Māori traditional knowledge; and promote quality, expertise, and integrity in the profession of patent attorneys; and ensure that New Zealand’s patent regime takes account of international developments.”

Members may well be thinking: “What is the need for this bill?”. Well, there are plenty of reasons why this bill is needed, and I would like to go through some of those reasons. It is to strengthen the criteria for granting a patent by introducing an absolute novelty standard—and maybe the novelty aspect might interest those opposite—examination for inventive step and usefulness, and a whole of contents approach to dealing with conflicting applications, and to provide that the current requirement for the commissioner to give applicants the benefit of the doubt when deciding whether to grant a patent be replaced by the balance of probabilities approach.

This bill retains the current definition of patentable subject matter as a manner of manufacture, but provides specific exclusions from patent protection for human beings and biological processes for their generation, methods of medical treatment of human beings, plant varieties, and inventions whose commercial exploitation would be contrary to public order or morality.

This bill seeks to establish a Māori advisory committee to provide advice to the commissioner in respect of patent applications for inventions involving indigenous plants and animals—and here I acknowledge the concerns of the member for the Māori Party in respect of that, and look forward to addressing in the select committee some of those concerns, as I am sure they will come through in submissions.

The bill seeks to introduce a specific experimental use exception into New Zealand’s patent legislation.

It is clear to me from reading the notes around the bill, and commentary, that this bill will significantly improve current legislation; it will significantly bring patent law into the realms of this century. It will provide for automatic publication of patent applications at 18 months from the earliest priority date, and provide that where an invention involves a micro-organism, the requirements for disclosure of the invention can be met by depositing a specimen of the micro-organism in a recognised depositary—and one may only wonder what would happen if in fact, instead of that, a complete description of that micro-organism were given.

The bill will provide that all examiners’ reports and communications relating to a patent application be open to public inspection once the application has been accepted, and provide that disclosures of an invention, up to 12 months prior to the filing of an application, will not destroy novelty if the disclosure was derived from the inventor and disclosed without the inventor’s consent.

As members present can tell, this bill is significant. One has only to look at the bill itself to see that there will be quite some interest in its various clauses, and I expect that we will be receiving a number of submissions from interested parties.

I want to cover again some of the exclusions from this bill, because I think it is important that we note these exclusions. An invention is not patentable if the commercial exploitation of the invention is contrary to public order or morality. It will be interesting to hear how those two terms are in fact determined. In addition, the following are not patentable: human beings and biological processes for their generation, inventions of methods of treatment of human beings by surgery or therapy, inventions of methods of diagnosis practised on human beings, and plant varieties.

The wording of this exclusion is intended to be consistent with the World Trade Organization Agreement on Trade-related Aspects of Intellectual Property Rights, and it is interesting, perhaps, for us to note here that this agreement states: “Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step, and are capable of industrial application. … patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.”

In addition, under patent ownership, this bill provides that a patent for an invention may be granted only to a person who is the inventor, who derives title to the invention from the inventor, or who is the personal representative of a deceased person mentioned previously, and that patent ownership is particularly important.

This bill also deals with ways in which disputes can be dealt with.

CLARE CURRAN (Labour—Dunedin South) : I rise in support of the Patents Bill, which is designed to replace the Patents Act 1953 and was introduced by the previous Labour Government. This bill reforms and modernises New Zealand patent law, and it provides an appropriate balance between adequate incentives for innovation and technology transfer and ensuring that the interests of the public and Māori are protected.

As outlined, this bill was originally introduced by the former Labour Government, and therefore we will be supporting it. I cannot help but think, though, that here we are, talking about patents, while we are facing changing times ahead and are in the midst of a recession the like of which has not been seen since World War II. Where are the Government’s ideas? And will reforming patents save the countless people who have lost their jobs to unemployment from this recession?

Although this is an important bill, which indeed needs to be passed, I cannot help but worry about those who face redundancy. We have seen Governments around the world spending billions of dollars trying to stimulate their economies to prevent recession and keep people in work, yet in New Zealand right now we have a Government that is talking about a cycleway as a good idea, as one of the results of its Job Summit. Has work started on that cycleway yet? Well, our counterparts across the world have been busy—

Hon Member: This is a patent bill, not a Job Summit one.

CLARE CURRAN: I am getting there. In the US there has been investment of $150 billion in the development and deployment of green technologies, and a million dollars is being put into getting hybrid plug-in cars on the road by 2015. In Australia, billions of dollars are being invested in investment partnerships, the provision of liquidity support, and a nation-building package of $4.7 billion. In the UK there is a billion-pound housing package to contribute to building more council houses and to extending stamp duty holidays when buying houses.

Hon Christopher Finlayson: Get on with the bill. Mr Speaker—

Mr DEPUTY SPEAKER: I ask the member to get back to—

Hon Member: Talk about patents.

Mr DEPUTY SPEAKER: —patents. Yes, that is what the bill is about—patents.

CLARE CURRAN: A patent is a right granted by the Commissioner of Patents after careful examination by the Intellectual Property Office of New Zealand. Patents are very important to modern society, and they prevent others from using an invention for 20 years. This right continues for a length of time, provided that renewal fees are paid by the end of the fourth, seventh, tenth, and thirteenth year after the grant.

The origins of such laws came from England in the early modern period, as we have heard. Patents usually refer to the right granted to someone who invents or discovers a new or usable process or invention, or any new and useful improvement. Here in New Zealand, as mentioned earlier, that process is handled by the Patent Office, which keeps a register of patents. The patent owner must carefully make public a complete description of the invention, so that once the patent expires other persons will be able to use it.

This bill updates the criteria for granting a patent, and aligns those criteria with the criteria applied in most other countries. The bill defines a patentable invention in clause 13 as involving a “manner of manufacture within the meaning of section 6 of the Statute of Monopolies … involves an inventive step”—as we have heard—“and is useful;”. All of these criteria must be satisfied before a patent application can be accepted and granted. Current law does not include an inventive step and usefulness in its criteria, so, under this bill, the Commissioner of Patents must not accept a patent application for a grant unless satisfied, on the balance of probabilities, that the requirements for the grant are met. The courts have ruled, under the 1953 Act, that the commissioner must give the patent application the benefit of any doubt, and this bill aligns patent laws to match this important case law.

This bill examines the meaning of “prior art base” and modernises patent law. Novelty and the inventive step of an invention are determined by comparing the invention with the relevant prior art base. The prior art base is any information made available to the public in any way, anywhere in the world, before the filing date of a patent application. Under the 1953 Act it was confined to what was published or used in New Zealand, not in the world, unlike the provisions of this bill.

Exclusion of patentability is also modernised, and inclusions are inventions that would meet the criteria but are excluded for policy reasons—for example, methods of treatment for human beings by surgery or therapy, and things that clearly should be secret or not available too freely. This has been clearly ruled upon by the courts.

This bill also intends for the exclusion of patentability to be consistent with Article 21 of the World Trade Organization Agreement on Trade-related Aspects of Intellectual Property Rights. This bill will also introduce a simpler, less complicated procedure to reduce the cost of appealing and challenging the validity of granted patents. Procedures introduced allow third parties to make an application to the Commissioner of Patents rather than going through the courts, which reduces costs and the complications resulting from them.

The establishment of a Māori advisory committee to advise the Commissioner of Patents is convened under this bill. It is very important that Māori traditional knowledge and indigenous plants and animals are recognised in New Zealand, and we must keep this in mind when examining patents. The function of the committee will be to provide advice that can be used by the commissioner to determine whether patents are contrary to Māori values.

This bill replaces the current right to apply with a right to grant. It allows any person to make an application for a patent, but only the inventor or the assignees may be granted the patent. Importantly, patents applications will be published at 18 months from the earliest priority date. Under the current Act, this may take 2 to 4 years after the initial application has been published. Also, once an application has been accepted, all documents associated with such patents become available to the public. This practice brings New Zealand into line with most countries.

This bill is intended to reduce compliance costs and to increase certainty for applicants. It will set time limits for applicants to respond to examination reports issued by the commissioner, so it will reduce the number of false claims to patents that are received.

In closing I commend this bill. It is a good bill—a bill that was introduced by Labour—but I am still concerned that this National Government needs to come up with its own ideas that will keep hard-working New Zealanders in jobs. Patents are very important, as is the modernising of the 1953 Act, but we must not lose focus on the fact that we are facing challenging times and that people are struggling.

This bill intends to reduce compliance costs, which is a good thing in these times, and patents are a sensible idea and need to be modernised, so we will support this bill. But we need to have discussions about how to protect New Zealanders from the effects of the recession. Many people are feeling the pinch and are worried about their jobs and livelihoods. Will they be able to pay their mortgages, will they be able to continue to put food on their tables, and will they be able to pay their power bills during the winter? Unemployment in New Zealand rose to 4.6 percent in December, which is 105,000 people out of work. Six months ago the unemployment rate was 3.9 percent. It is expected that that number will rise to 5.3 percent by the time of the next announcement. Budget day is just around the corner, and many New Zealanders want to know what this Government will do.

Finally, this bill modernises the Patents Act 1953 and ensures that patents are more in line with modern technology. It recognises what is happening around the world in patent law. It is a Labour bill, therefore we are supporting it. It is a good bill. It is very important that we examine and modernise patents and the protection of property, so I commend this bill to the House.

KATRINA SHANKS (National) : It is my pleasure to stand today in support of the Patents Bill. The bill is to protect innovative, creative people and their “innovations that are new, involve an inventive step … and are useful.” It is only fair that the inventors and creators who have invested time and money on a product that will be useful and have a commercial value have modern patent legislation that will protect their investment.

Protection of patents will allow an environment that encourages inventors to take a risk. There will be some protections for their investment that will allow them to have a commercial return. This legislation is a good example of modernising legislation for our current times. New Zealand’s future growth will involve the commercialisation of our ideas and our intellectual property. New Zealanders have a number eight wire mentality: if we can see a better way of doing something or have a great idea, then we just get on and do it.

A number of companies in New Zealand have commercialised great ideas and are cutting edge. I will mention just two or three off the top of my head: Spidertracks does global positioning systems (GPSs) and is cutting edge in its field globally; Metalform has created the Ezi-Riser wheelchair, which is the first wheelchair in the world that can tilt; and Martin Jetpack is an innovation from the “jetpack man”—and the list goes on. It is important that we have good, strong patent law that is relevant to our environment.

I will talk about one of those businesses, which without good, strong patent legislation would never have got as far as it has. It is very important for businesses to know that if they have an idea—a good idea—and if they create something, nobody else will be able to copy it, at least for 20 years. Those businesses can have the benefits of investing their time in an idea. Once they have that idea and build it up, if it looks like a good goer then they can commercialise that idea. They can go the extra step, find some global markets, and find a manufacturer to produce the idea and get a commercial product for the good of growth in our economy. But without the ability for businesses to patent that idea, they would never take it so far. Why would they put tens of thousands—hundreds of thousands—of dollars into an idea if they could not protect that idea before they went to commercialise it? That is why this legislation is so important.

I will tell members why that is so with one little example: Spidertracks in Palmerston North. The company produces a GPS tracking system. Previously, if a tracking system was put on to an aeroplane, for example, there had to be two boxes in the aeroplane: one that sent out the signal, and one that received a signal to say where the aeroplane was. Both signals could not be sent at the same time; only one could be sent at a time. Spidertracks developed a box that has both the signal receiver and sender in the box. The boxes can send and receive signals at exactly the same time. This was the first time anybody has been able to create that technology in New Zealand—in fact, globally. The company managed to put the technology in that one box, which is the size of a cellphone. Before, there had to be two boxes. The product contains a sender and a receiver in a box the size of a cellphone. The company patented the product and took it overseas, and this one little cellphone-sized instrument that has the capability to receive and send signals at the same time is in something like 59 countries now.

Without patenting that idea, the company would have never taken it so far. That is why it is important that we have legislation that is very current for the environment we are in—especially when an invention is sold into countries where it is easy to copy and then be mass produced. Because we are such a small player, it is hard for us to enter some of these markets, and it is easier for other countries. That is why this legislation is so important for New Zealand and for New Zealand’s growth.

At the moment, the way the New Zealand patent system works is that a patent is a right granted by the Commissioner of Patents, after examination by the Intellectual Property Office of New Zealand, to stop others from using an invention for 20 years. The system was established under the Patents Act 1953, which was based on the UK Patents Act 1949. Britain replaced its statute in 1977, but New Zealand has made no substantial change to the legislation since 1953. For over 50 years we have had the same legislation around patents. As New Zealand has grown and we have become more global, it has become more and more important that we get this legislation up to date.

Patents giving monopolies for new inventions were first granted by Queen Elizabeth I to encourage the establishment of new industry. In 1623 Parliament passed the Statute of Monopolies, which restricted monopolies already granted, and prohibited the granting of new monopolies except for the true and first inventors of a manner of a new manufacture that was not being used by others.

So it is very important that this legislation is being modernised, and under the sponsorship of the Minister of Commerce, the Hon Simon Power, the bill is here today having its first reading. It will be interesting when the bill goes to a select committee and we can listen to the submissions on it. The bill will affect many, many entities, enterprises, and inventors out there, so it is important that we get it absolutely right.

Because a patent provides a form of monopoly right, it is really important that we get the bill right, because when there is a monopoly, costs can go up in order for the consumer to receive a product, because no one else in the field delivers exactly the same product. In order to minimise these costs and to ensure that the patent system provides a net benefit to society, patents should be granted only for genuine innovations—innovations that are new, involve an inventive step, and are useful. We do not want to ensure that anybody can get a patent for an idea that will not be useful and that is not totally inventive. That is not what this legislation is about, and it is not what a patent is about. A patent should be granted for something that will be inventive, is new, and will be useful for people.

In New Zealand a patent may be granted for an invention that involves a manner of new manufacture, and a patent entitles the patent owner the right to exclude others from making, using, or assigning the patented invention during the term of the patent. The patent owner must make public a complete description of the invention, so that once the patent expires others will be able to use it. It is interesting to know that someone cannot just keep a patent for 20 years. A fee must be paid in order to renew the patent after every 3, 4, 7, and 13 years, otherwise other people will be able to use it. So it is important that inventors keep current with the legislation and the changes to it, and know how often they will have to pay those fees in order to protect their investment.

We need this bill because intellectual property has been touted as the foundation for New Zealand’s future, but we have been hamstrung by old legislation—the Patents Act 1953. It is important that we protect our intellectual property, because if we are talking about the growth of New Zealand, our ability to bounce back after the horrible recession, and being globally competitive, it is very important that we protect our intellectual property. We are distant from our markets, and innovation is the one area in New Zealand where we can really get ahead in order to bounce back from the recession.

It is important that we get this legislation right and that anybody out there listening who has an interest in this area—an inventor or someone who commercialises ideas—looks at this bill when it goes before a select committee. I ask such people to please put in a submission and to please come and present it, because it is the New Zealanders who present to select committees who let us know what is happening in their environment and whether we have got the legislation right or wrong. Thank you, Mr Deputy Speaker. I commend this bill to the House.

RAYMOND HUO (Labour) : I rise to support the Patents Bill at its first reading, for a very simple reason—that is, this bill brings New Zealand’s patent law into line with many of our trading partners, and will reform and modernise New Zealand patent law. The bill is the culmination of the Labour-led Government’s review of patent legislation begun in August 2000. The bill will ultimately replace the current Patents Act 1953, which has long been considered to be outdated. It is hoped that the Patents Bill will provide a regime that ensures that an appropriate balance is maintained between providing adequate incentives for innovation, and protecting the interests of the public.

With the exception of a number of significant developments, the bill is essentially the same as an exposure draft bill released for consultation in late 2004. Although the bill introduces a wide variety of changes, some key features are summarised as follows. There is the introduction of an absolute novelty standard. The bill removes New Zealand’s current local novelty requirement for patentability, and replaces it with absolute novelty—meaning that an invention will not be considered novel if it has been disclosed or performed anywhere in the world. Under the current Act, novelty is determined in respect of what is known or used in New Zealand only. No notice is taken of information published outside New Zealand. This fundamental change recognises that innovation is a global matter. Under the bill, novelty will be determined on the basis of all information that has been made publicly available anywhere in the world before the filing date of a patent application. This change brings New Zealand into line with the great majority of countries, because, as some lawyers have rightly said, New Zealand cannot operate in a vacuum.

Patent applications will now be examined for an inventive step and usefulness. Again, this change will bring New Zealand into line with most other countries that generally examine not only for novelty and an inventive step but also for usefulness. For an invention to be considered useful, it must have a specific, credible, and substantial utility. The change is sensible because it ensures that patents will be granted only when the inventor identifies a real-world use for the invention. This will be of critical importance to claims involving genetic material, whereas in the past there have been instances of patents being granted for material when no specific use has been disclosed.

The term “manner of manufacture” is taken from the current Act. The courts have interpreted this to exclude such things as products of nature, mere discoveries, mathematical algorithms, mere schemes, plants, and methods of medical treatment of humans.

The bill provides for establishment of a Māori advisory committee to advise the Commissioner of Patents in relation to patent applications for inventions involving traditional knowledge, or indigenous plants and animals. Similar provisions are found in New Zealand’s plant variety rights and trademark legislation.

The bill will introduce a specific experimental-use exception into New Zealand’s patent legislation. It is not difficult to understand that the disclosure of an invention prior to filing a patent application will destroy the novelty of the invention and prevent the grant of a valid patent. The bill provides that in the event of unauthorised disclosure, a valid patent can still be obtained if a patent application is filed within 12 months of the disclosure.

The current pre-grant opposition procedure will be repealed, and replaced with new procedures for challenging the grant of a patent. It now appears that we have conflicting views on that point. Some say that the procedures introduced in this bill will be much simplified and will reduce the costs and complexity involved in challenging the validity of granted patents. This includes a re-examination procedure in clauses 88 to 92, and an expanded administration revocation procedure in clauses 104 to 106. Both procedures allow third parties to make an application to the Commissioner of Patents challenging the validity of a patent, as opposed to going through the courts. The current provision allowing the courts to revoke a patent will remain.

However, some believe that by removing pre-grant oppositions, this bill is “curiously out of step” with the more stringent examination requirements. Experts from A J Park say that pre-grant oppositions give competitors an opportunity to oppose the grant of the patent. Under the new system, the opponent will be vulnerable to an action for infringement because the patent is granted. An infringement action is not a risk under the current law until the opposition process is completed.

After its first reading the bill will, of course, be referred to the Commerce Committee, which will hear submissions on it. It will be interesting to hear what the submitters will say on these changes, or “controversial provisions”, according to those experts. I look forward to those submissions. I expect there to be vigorous debate, with the possibility of sensible and better changes being proposed, if necessary. Thank you.

AMY ADAMS (National—Selwyn) : I rise to take the final call on this first reading of the Patents Bill. Taking the final call late at night is always such a privilege and such a pleasure, and tonight more so than ever because, certainly, the intensity in the House around this bill is something to behold.

This is a bill that is long overdue, and it is a bill that has been welcomed not just by the majority of this House but the majority of the “pat-ent” industry, or, let me say, the “pay-tent” industry, because, having gone through law school, “pat-ents” are what they have in America and “pay-tents” are what we have here. They were always “pay-tents” where I went to school. So it is a bill that is being welcomed by the majority of the patent community, and that is amongst both patent attorneys and applicants and patent holders. Interestingly enough that is so, even though the bill will make the patents regime tougher; it will make patents harder to get. I think the reason that the industry is supporting it none the less is that it recognises that, despite those challenges, the bill will give us a far more appropriate patent regime.

What I would like to do tonight is just begin by taking somewhat of a helicopter view and just consider—

Hon Members: Oh, oh!

AMY ADAMS: Members opposite are awake! That worked; that was easy. I thought one had to say something really contentious to get them going, but that was really easy, like taking candy from a baby.

Let us consider some of the wider aspects of intellectual property, which patent law forms a part of. Broadly speaking, intellectual property is any output of the human mind—even those from Labour—but law has, over time, defined clear rules as to which parts of intellectual property can be capable of legal protection and ownership. Certainly, the best well-known of these are copyright, patents, registered designs, and trademarks. What has always, however, been outside intellectual property is the ability to protect ideas. Instead it is the tangible expression, or application, of ideas that the law protects. That is a slightly technical and legal distinction, but an important one.

It is often said that it is, and will be, the quality of the intellectual property of a nation, and what it possesses, that will determine its economic prosperity. Certainly that is a true statement, but I would add that the quality and usability of that country’s laws around protecting intellectual property are equally vital. If we do not get those laws right, then two things are likely to happen. Firstly, individuals and businesses will not be motivated to create intellectual property; it is a straight economic assessment. Secondly, we can be sure that if the rules are not right, the intellectual property that is created is likely to be lost by this country. It is likely to be lost by those who created it—quite possibly lost to overseas competitors, who will exploit it and ensure that the money to be made works for the benefit of their economies, rather than ours, as it should. So in this period when we are all, right across the House I would hope, so very aware of the need to protect, preserve, and grow our economic base, so aware that our ability as a country to provide all the wonderful services and support to our citizens that we would like to be able to provide depends on that economic base, and so conscious that if we are to raise the standard of living of the average New Zealander, we must lift productivity, surely now, more than ever, we can understand why we must have laws that ensure our protection of intellectual property is robust, sensible, and in line with other major overseas nations. If I can just come back to the points made by Ms Curran earlier, rather than saying it is unnecessary at this time, I would have thought that anyone who understands economic growth knows we have to get the underlying conditions right if we are going to have a strong economy. This bill goes towards doing that.

In New Zealand, particularly, we have a strong and proud heritage of ground-breaking, novel, often niche-technology solutions and inventions, as we use our world-famous No. 8 wire mentality to get things done, which Ms Shanks spoke about earlier. Consider for a moment Burt Munro’s modified Indian bike, which set unheard-of land-speed records on the salt flats of America. Think of Richard Pearse’s aeroplanes from 1906 and John Britten’s motorcycle from Christchurch, which destroyed competing bikes from all the major production companies in the world at Daytona. Think about the Anzacs’ self-firing guns, developed on the beaches of Gallipoli when the men were under the most fearsome of attacks—

Hon Kate Wilkinson: The Hamilton jet.

AMY ADAMS: That was the next one on my list. I thank the Minister! Think of the Hamilton jet and the work being done at Weta Workshop—the list goes on and on. In fact, it brings to mind the opening of the New Zealand ICT Innovation Institute at Canterbury University—the leading institution of its kind in this country. We opened it with the Prime Minister just recently. The opening highlighted much of the wonderful innovation and technology that this country can offer the world. If we do not get the conditions and the law right, such innovation will never take off. The business community will drive it, but our job is to get the law right, and we are going to get that done.

With this country’s heritage and with the skills we have amongst our small population, we have to get our intellectual property laws right. But I just point out for a moment—and it is a point worth making—that intellectual property is not just about the whiz-bang gadgets and it is not just about the high-tech world. Certainly patents, and quite successful patents, can relate to all sorts of simple inventions. I knew a client who was working on a patent for a revolutionary way to hang pictures. Now, it might not be world record breaking stuff—it did not involve technology, it was effectively the way he designed a little bit of metal—but let me tell members something: it did something that had never been done before. It provided a solution to a common problem, and that client created a huge potential industry. We also remember the wonderful days of the spork—the spoon-fork, which was, famously, patented, and made the inventors rather a lot of money. So innovation is not all about high-tech, whiz-bang gadgetry, but certainly that is a proud part of it.

We know that patents form valuable business assets and they can be traded like any other property right. In fact, a number of people are in the business of simply creating and registering the patents, and trading them, with no intention to actually commercialise the product themselves. That is perfectly valid. As we have heard on numerous occasions already this evening, these have been around since the time of Queen Elizabeth I. The English Statute of Monopolies 1623 gave the “true and first inventor” of a “manner of new manufactures” the right to use that invention to the exclusion of others. As we have heard rather often this evening, the New Zealand system was adopted from the English 1949 legislation and turned into our own Patents Act 1953, which remains largely unchanged to this day. That is the case, even though the English updated their 1949 Act in 1977. We have failed to do that in New Zealand. It is long overdue, and I am certainly pleased to see it happening now.

Patents, as we have heard, give protected monopolies for up to 20 years. The price that the inventor pays for that is that, in return for that period of undisturbed use, the inventor must fully disclose how the invention is made. That is a bargain that societies have been making for hundreds of years. In return for the monopoly with which to commercialise the invention, the applicant shares his or her new knowledge with the world, thereby growing the knowledge base of the entire population, so that after a period of monopoly everyone can benefit. The area that we are probably most familiar with is medicines, where we have all become familiar with seeing a generic brand of medicine coming on to the market when the name-brand product’s patent expires. The drug companies have had a period in which to make a fair return on their investment, but the net result is that, after they have done so, their knowledge is widely shared, and society gets cheaper medicine as a result.

This bill certainly keeps a number of the main structures that we have in our patent system—the examination by the Intellectual Property Office of New Zealand of prior art, the grant of patent rights by the Commissioner of Patents, the renewals at 4, 7, 10, and 13 years, and the ability to make one application under the Patent Cooperation Treaty that covers protection in a number of countries. But there are important changes that this bill will bring in, and I think the most important of those is that we are changing the current local novelty standard and replacing it with an absolute novelty standard. That means that if the application or the invention has been disclosed anywhere in the world, patent protection will not be available. I would have thought that that was a reasonably obvious thing. Most countries already have that standard. New Zealand was out of step, and this bill will certainly go towards addressing that matter. The grounds of inventiveness and utility are also going to be added, along with the novelty ground, once again bringing New Zealand back into line with most of our major trading partners.

We have heard how the bill specifically excludes diagnostic, therapeutic, and surgical methods from patent ability, as it does plant varieties, which, of course, have their own protective legislation. Other major changes involve the commissioner being able to refuse a patent on the grounds that the invention is obvious to persons skilled in the art. Previously, it was permitted for a private person only to object to the grant of a patent on this ground. Now the commissioner can do it of his own merit. This is a bill that needed to be introduced. I commend the Minister for bringing it to the House.

Hon Dr RICHARD WORTH (Minister of Internal Affairs) : In a crowded House and before a full gallery I move, That the Gambling Amendment Bill (No 2) be now read a second time. The bill amends the Gambling Act 2003. We have progressed this bill, which was introduced by the previous Government, because it responds to a number of issues that have been identified while implementing and administering the Act. I think it is important to resolve those issues, and clarify the law, because large sums of money are at stake in the gambling sector. The bill does not contain any major policy changes. Instead, a few small policy amendments and many technical amendments proposed by the bill are all about making the Act operate as originally intended.

I would like to briefly summarise some of the measures contained in the bill. One of the Act’s objectives is to ensure the fairness and integrity of games. To further assist with the achievement of this objective, the bill introduces minimum disclosure requirements for non-cash prizes. The Act, of course, already contains a prize disclosure regime, but it is only partially achieved, and in quite a fragmented way. Introducing a statutory requirement for the accurate disclosure of all non-cash prizes would increase certainty, and it would remove any inconsistencies between different types of gambling.

The bill contains a number of measures intended to assist its community funding objectives. I just highlight these in the opportunity I have to speak. First of all, these include clauses requiring venues that host gaming machines on behalf of gaming-machine societies to bank community profits directly into the society’s dedicated account. This amendment responds to the practice whereby some venues have been banking society money in their own accounts for a few days, and occasionally have not been able to account for it when it is time to bank the money into the society’s bank account. Second, there are also explicit obligations on community grant recipients to use grants from gaming-machine proceeds appropriately, including an offence for non-compliance. That measure obviously reduces the risk of grant recipients misappropriating gaming-machine proceeds. Third, conflict of interest safeguards are extended to all persons who make decisions on gaming-machine grants. Currently they apply only to those people with key roles in the management of the society. Fourth, the bill specifies in more detail the circumstances in which a gaming-machine society, such as a club, can apply gaming-machine proceeds to its own purposes, as opposed to when it can make grants to community groups. At present the Act does not provide sufficient clarity on that point.

There are also a number of measures intended to assist with the achievement of the Act’s harm prevention and minimisation objectives. One provision clarifies a grey area relating to the identification of problem gamblers by gambling venues. New section 309A, inserted by clause 82, states that gaming machine and casino operators have an ongoing duty to “take all reasonable steps to assist a person” they have identified as a potential problem gambler. Essentially, this means it will not be enough for an operator to just approach a person on one occasion, provide information about problem gambling, and then take no further action if the person’s gambling behaviour continues to cause concern. The bill also provides that gambling venue staff do not have to issue venue exclusion orders to persons who approach them and identify themselves as problem gamblers, if those persons do not provide a reasonable means of identification, such as a recent photograph. The requirement to provide a recent photo will assist venue staff with the re-identification of excluded problem gamblers who return to a venue in defiance of their exclusion orders. The bill also makes a number of modifications to the Act’s harm prevention and minimisation regulation-making powers.

The bill recognises the importance of gambling-related research with the inclusion of a clause designed to make it easier to conduct research on gambling in real-life gambling environments. The clause authorises the Secretary for Internal Affairs to temporarily approve the operation of gambling equipment in a venue for the purpose of testing whether the equipment’s introduction is consistent with the Act’s objectives.

The bill provides more flexibility for clubs who wish to merge in order to address financial viability issues. By clubs, I mean organisations like RSAs and chartered clubs. The Act currently allows two or more clubs to apply for ministerial approval to operate up to 30 gaming machines at the venue on which they merge. However, they may merge only on to an existing 18-machine venue. The number of 18-machine venues is limited. So the bill will allow clubs to apply for ministerial approval to operate additional machines at any venue, even if that venue would not otherwise be an 18-machine venue. They would still be subject to territorial authority consent. Other provisions in the bill and, in fact, in the Act would mean that this would lead to an overall increase in the number of gaming machines.

In addition, a number of clauses in the bill are designed to assist the Gambling Commission with the performance of its functions. One clause enhances the Gambling Commission’s protection from liability, along similar lines to the immunities provided to statutory entities under the Crown Entities Act 2004. The clause provides the commission with the flexibility to determine when it sits as a division and to decide whether the division includes the Chief Gambling Commissioner.

The bill, of course, was reported back by the Government Administration Committee during the last Parliament. I would like to take this opportunity to thank the committee for its work on the bill during the last Parliament. I note that the committee reported the bill back with a number of amendments for the House to consider. These amendments have the Government’s support. I would like to make a few comments on some of them.

One of the amendments recommended by the committee is the insertion of a new clause clarifying and enhancing an existing provision that allows the Secretary for Internal Affairs to collect gambling-related information from gambling operators, together with an obligation to make the information that is collected available to the public. Information on grants made to the community by gaming-machine operators is a very good example of the type of material that could be collected under this clause. I believe there is a clear desire on the part of the public to be more informed about what happens to the community funds generated by gaming machines in their district. In fact, I have very strong views on this issue. A more informed public is in a better position to form a view on whether there is a net benefit from gambling in its district. For similar reasons, more information on grants will also assist territorial authorities and community groups when territorial authorities review their gambling venue policies. Essentially, this clause will assist in facilitating community involvement in gambling, which is one of the Act’s key objectives, and for that reason it is a worthwhile addition to the bill.

Another amendment that was recommended by the committee concerns the definition of a “gaming machine”. The current definition is very wide, and it has the potential to unintentionally capture ancillary gambling equipment like electronic card shufflers used in casinos, which do not need to be regulated as gaming machines. The committee has recommended changes to the definition, which should eliminate this problem.

The committee has also proposed some useful enhancements to the Act’s processes for identifying problem gamblers and excluding them from gambling venues.

Finally, the committee recommended a number of amendments that protect the privacy of excluded problem gamblers. All of these clauses will assist in preventing and minimising gambling-related harm, which, as members will know, is one of the Act’s key objectives.

In closing, and in a message to Labour, I would like to touch again on the issues around the distribution of funds generated by gaming machines. I just say, and place it on the record, that I am particularly keen to ensure two things.

Mr DEPUTY SPEAKER: The member’s time has expired.

CHRIS HIPKINS (Labour—Rimutaka) : The anticipation was building up, and we felt that the Minister of Internal Affairs was cut down in his prime. I have to confess that I am still slightly in shock about being lectured on conflicts of interest by the Hon Dr Richard Worth, although it would appear that he certainly has superior knowledge of the issue of conflict of interest in the House.

I am happy to take a call on the Gambling Amendment Bill (No 2). The Gambling Act 2003 is a large, complex, and very prescriptive piece of legislation, which was passed by the previous Labour Government in 2003. As with any Act that is as prescriptive and complex as this, a number of issues that were going to be identified as it was implemented would need to be addressed through a fairly technical amendment bill. That is what this bill is.

I would like to acknowledge the work of the former Minister of Internal Affairs the Hon Rick Barker, who I know put in a lot of work to get this bill before the House. I would also like to acknowledge the members of the Government Administration Committee in the last Parliament, who put in a lot of work to get the bill through the select committee process and back into the House. I acknowledge the work of my colleague Darien Fenton, who was the deputy chair of the Government Administration Committee in the last Parliament.

The bill contains several small policy amendments and technical amendments. The purpose is to allow the Act to operate as it was originally intended. The Gambling Act brought about the biggest changes to the gambling sector in over 20 years when it became fully operational on 1 July 2004. Among the things it aimed to do was to control the growth of gambling. There has certainly been significant growth in the gambling industry. Turnover in the gambling industry increased from $6.1 billion in 1998 to $14 billion in 2007. I think we would all agree that that is very significant growth in gambling. Another aim of the Gambling Act was to prevent and minimise gambling harm. I will talk a little bit about that in a moment.

I will talk largely about pokie machines rather than casinos. It is worth noting at this point that one in five regular pokie players has been identified as having a gambling problem. The Gambling Act also authorises some forms of gambling and prohibits the rest. It ensures the integrity and the fairness of the games involved. It restricts the opportunities for crime or dishonesty, it ensures that money from gambling benefits the community, and it facilitates community involvement in decisions on the provision of gambling.

It is useful to inject some more facts into the debate at this particular point. The gambling industry’s turnover, as I noted, was a little over $14 billion in 2007, and money lost was just over $2 billion, of which about $950 million was lost on non-casino pokie machines. That is a very significant amount of money. I am told that the money collected from non-casino pokie machines is roughly the equivalent of the entire operating cost of the New Zealand Police. Up to 42 percent of the revenue from pokie machines is from problem gamblers—people who have been identified as having a problem. They make up around 3 percent of gamblers, so a small number of people are gambling a very large sum of money through these pokie machines. Six major societies distribute around 60 percent of all non-casino expenditure funding to community organisations and each pokie-machine grant is approximately $2,438. There were 1,537 gambling venues and nearly 20,000 pokie machines in New Zealand as at December last year. Every day, $2.7 million is lost on non-casino pokie machines.

I think we would agree that there are some significant issues around gambling that we need to look at. This bill, which is largely a technical bill, does not necessarily address those issues. It tidies up the Gambling Act to ensure that it operates as intended, but I think we would agree that some significant issues still need to be addressed and may warrant further investigation. It is a tragic reality that hundreds of sports clubs and community groups throughout the country rely on the proceeds of gambling in order to survive. The Gambling Act was an attempt to ensure that the proceeds of gambling are invested back into the community in a way that is transparent and fair. It is fair to say that before the Gambling Act was passed, there was a lot of rorting of the system.

I was given pause when reading through this material to recall that back in the late 1990s - early 2000s, when I was involved in the students association movement, one of my jobs was to secure funding for our sports teams. We used to send a sports team to the New Zealand Uni Games, the winter games, and so forth each year. One of the major sources of sponsorship was the pubs, and the money they gave us had been obtained from pokie machines. But it came with a lot of conditions. Although there were some potentially quite significant sums of money involved, the conditions usually involved most of the money going back to the establishment that it was obtained from. So we would be told “Yep, you can have $20,000 for uniforms for your sports teams.” The uniforms themselves might have cost a couple of thousand dollars and they had to have the name of the sponsoring pub on them. The remainder of the money was expected to flow back across the bar of the pub involved. That was very commonplace. Of course, there were some significant issues with that, because the pubs involved would select groups for sponsorship that were more likely to put most of their money back across the bar. If a sport typically did not involve people who were likely to be heavy drinkers, it was less likely to get pub sponsorship. The organisations that typically had an after-match function would get the money, because the establishment owners knew that they were likely to get most of that money back across the bar. That situation needed to be cleaned up, and that was one of the things that the Act was designed to achieve.

It is fair to say that the gambling sector has cleaned up its act significantly since 2003, but there are still some significant issues to be dealt with. One of the issues that has come up is the use of pokie money by the racing industry and, effectively, the transfer of the proceeds of one form of gambling to another form of gambling. It would be fair to say that even though I agreed with much of what the Minister of Internal Affairs said, I am still a little confused as to what the Government’s position on the racing industry is. I particularly refer to the Otago Daily Times on 27 April. The headline is “Shake-up possible for pokies” and the Minister said: “My priorities in this area are to maximise the community funding generated by non-casino gaming machines and to resolve questionable funding practices in the sector.” A further article appeared on 1 May, which stated under “Racing bodies fear for future” that the Minister of Internal Affairs had indicated he may scratch charitable gaming trust grants to the racing sector, a move that could result in the collapse of the industry, according to some. Another article on 2 May stated that the Minister of Internal Affairs did not intend to look at the issue of pokie money being used for racing. I think everybody is a little bit confused, and we would welcome, at some point in the proceedings, a clarification of the Government’s position on the use of pokie money in the racing industry.

I will turn very briefly, in the remaining minutes that I have, to congratulate the Government Administration Committee on its work. It received 168 submissions on this bill, which is obviously a very significant number. Of those 168 submissions, 32 expressed general support for the bill. Many of the submitters proposed additional amendments or commented on specific matters that were outside the intent of what this particular bill was designed to achieve—the effective running of the Act as it was passed in 2003. But many of the issues that were raised were genuine and worthy of further consideration. The committee decided not to consider those issues, according to its report, because they were outside the intent of the bill. But that is something the new Government and the Department of Internal Affairs will want to consider.

A number of the issues raised also related to regulation, and to issues that could be better dealt with through regulation rather than through changes to the Act. They included things such as reducing maximum gaming-machine prizes, regulating a gaming-machine’s spin speed, pre-commitment and player tracking systems, advertising standards, and the accumulation of gaming-machine profits. I encourage the Minister and the Department of Internal Affairs to look closely at those issues and consider whether any further action may need to be taken on those particular concerns.

One area that the committee could not agree on, and that we in the Labour Party have a strong view on, is the location of gaming machines in outside areas. Our view is that gaming machines should be located indoors, and that any attempt to move them outside is clearly designed to circumvent the Smoke-free Environments Act 1990.

Hon Dr RICHARD WORTH (Minister of Internal Affairs) : I seek leave to make two comments lasting no more than 20 seconds. They arise from what the member, Chris Hipkins, has said.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there any objection? There is none.

Hon Dr RICHARD WORTH: I would just like to say this—and I think it is very much on a non-partisan basis; I certainly hope it is. I am particularly keen to ensure two things. The first is that we maximise community funding generated by non-casino gaming machines in commercial premises. I think that is really important. The second thing is that we resolve questionable grant funding practices in this sector. I hope that there might be, in the context of work that I plan to do, a broad commitment to achieving that sort of outcome.

JACQUI DEAN (National—Waitaki) : In speaking to the second reading of the Gambling Amendment Bill (No 2) I guess there is no question by members from across the House that gambling damages people, damages homes, and has damaging effects on whole communities. I think that this bill is a good attempt to make several policy amendments and a number of technical amendments to the Gambling Act 2003.

That Act is quite a large piece of legislation. It is technical and complex. It brought a number of reforms to the gambling sector that I believe were quite welcome at the time. Those were a moratorium on the opening of additional casinos and a reduction in the number of class 4 gaming machines and new venues. There was also a significant shift in focus towards the minimisation of the harm associated with gambling. I know that the Minister of Internal Affairs has shown a lot of concern about the effects of problem gambling. Recently I have had several conversations with the Minister on just that subject, and I know that he has a deep and ongoing concern and would like to see more work done on the issue of problem gambling.

But here we are this evening, facing the second reading of this bill, which does bring in a number of provisions. I guess it is worth noting, because it is a little unusual, that there were 168 written submissions on this bill to the Government Administration Committee of the previous Parliament. Although 32 of those submissions expressed direct support for the provisions within the bill, the remainder of them were supportive in ways that fell outside the scope of the bill. That tells us something very significant. It tells us that around 136 people were concerned enough to submit on this bill. Their concerns were outside the scope of the bill, but they were concerned enough about problem gambling in New Zealand and in our communities, and about the effects of it on individuals, to make a submission to the select committee of the day. I think that is significant and is worth noting in this House. It is something that the Minister of Internal Affairs, the Hon Dr Richard Worth, has certainly taken on board and is very concerned about.

Turning to the amendments that the bill makes to the Act, I say there are many, but I think it is worth rehearsing them in this second reading. I know they have been raised by members across the House, but it is important to restate some of the amendments. One is a requirement to bank gaming-machine profits directly into the gaming-machine society’s bank account. Of course, the reason for that amendment is that some societies have been utilising profits to ease the cash flow, which is a rather delicate way of saying that the cash could not then be accounted for. That must be a very useful amendment to be brought in as part of this bill.

I pause here very briefly to comment that members across the House have noted the fact that I have been speaking rather slowly and carefully. Of course, there are people who are unable to hear my words. This is a very special week, and I think it is incumbent on us as parliamentarians, particularly in Deaf Awareness Week, to recognise that slow and careful speech can be useful to those who do not hear as well as we do.

Returning to the policy amendments, there will be a requirement in this bill that community grant recipients use those grants only for the specific authorised purpose for which the grant was made. The justification for requesting the grant cannot be changed. That is a rigour that I believe will be very welcome in this context. The legislation will set out the circumstances in which a gaming-machine society may apply gaming-machine proceeds to its own authorised purpose, as opposed to making grants to the wider community. It will also set out the duty for gambling venues to assist potential problem gamblers where ongoing problems are suspected. Essentially, this means that it will not suffice for a venue to approach a person on one occasion, provide him or her with information on problem gambling, and then do nothing further. What would be the use of that? I would argue that it would not be particularly useful. It will not be sufficient to provide information about problem gambling and do nothing further if the person’s gambling behaviour continues to be of concern. It is not adequate for someone in a gambling situation to approach someone whom they perceive to be a problem gambler only once, when they suspect that ongoing problems are occurring.

The amendments to the Act will tighten the regulations around the monitoring of gaming. Organisations or people who receive grants from gambling societies will need to be accountable for how that money is spent.

• Debate interrupted.