Dr CAM CALDER (National) : Tēnā koe e te Mana Whakawā. Ko te taiao e awhi nei i a tātou, tihei mauri ora. I wish to acknowledge the passing of Lieutenant Tim O’Donnell DSD, killed in action on active service in Afghanistan, and also the severe wounding of two of his comrades in arms. Lieutenant Tim O’Donnell was a veteran at the tender age of 28. I wish to extend my deepest sympathy to family, friends, and unit colleagues of all three men.

As my honourable colleague Nanaia Mahuta observed in an earlier part of this debate, John Key’s National-led Government is making great progress in negotiating Treaty settlements and working with Māori in addressing challenges facing the whole of New Zealand society. The Resource Management Act 1991 recognises the role of tangata whenua in various ways. Those exercising power under the law are required to have regard to both kaitiakitanga and the principles of the Treaty of Waitangi. Consent authorities are required to consult iwi. We have already achieved so much in reforming the Resource Management Act. The first phase of our streamlining reforms went a long way to reducing costs, uncertainties, and delays that have frustrated New Zealand homeowners, small businesses, and farmers for years. It ensured a better balance between environmental protection and economic growth. One of the four objectives of the phase two reforms is achieving the efficient and improved participation of Māori in resource management processes. So there is no need for a separate amendment bill, and National does not support this bill. Thank you.

Hon STEVE CHADWICK (Labour) : I am pleased to support the Resource Management (Enhancement of Iwi Management Plans) Amendment Bill. I was astonished to hear National’s position, and to hear the previous speaker say that the Resource Management Act is working in terms of consultation and involvement with, and the participation of, Māori, when this is an elegant little amendment to the 1991 Resource Management Act that will make consultation easier for Māori. Therefore, the results will be a far improved model of hearings and consenting under the Resource Management Act, in terms of iwi management plans.

I sat in on the hearings in Auckland on the Resource Management Act, along with my colleague Nanaia Mahuta, when Mark Solomon gave a plea to the Local Government and Environment Committee, in its consideration of the Resource Management Act, that as far as Ngāi Tahu were concerned they were not involved in the resource consent process, and that due recognition of iwi management plans was simply not happening, at either local council level or regional council level. I think it is really sad that National is saying that because the Act is strong enough now, it therefore works. National is saying that because it has done a lot about streamlining and turbo-charging the Resource Management Act, and taking away the regulatory barriers to the consenting process, the Act therefore works for iwi; I do not think so. That is not what we heard at the select committee.

All this little bill does is make three amendments. It amends, under clause 5, the “take into account” provision. All that consenting authorities have to do now is just to “take into account”, but the bill substitutes “recognise and”—the strong word is—“provide for” iwi management plans. This bill is yet another solution, a part of the puzzle, that would strengthen the Resource Management Act.

I wonder what has happened to the iwi leaders forum that consults National and the Māori Party on the foreshore and seabed legislation. I wonder whether National has taken time out from its agenda and its crowing about achievements to say: “What do you think, iwi leaders, whom we consult openly with? What do you think about this amendment that has come from Nanaia Mahuta, who knows only too well, along with the Tainui people of the Waikato River, that here is yet another streamlining amendment that will make it easier for Māori to be recognised and to be taken account of?”. [Interruption] No, they have not even asked.

This amendment gives a focus for iwi management plans in both regional and district council plans. All it does is put the issues that iwi have laid on the table at the front end of the planning process. It ensures the participation of iwi in the consenting process; what is wrong with that? Why would National vote against this bill, other than for political pique? If iwi do not like what is happening in terms of what they have proposed as a vision and a strategy in an iwi management plan, and if they are not taken notice of, all that they can do now is look for redress in a Treaty settlement process. How cumbersome is that? I think all parties would benefit if only National could be generous enough today to support this bill. I am glad the Māori Party is supporting it. We will be speaking about that when we are out on the hustings next year.

Current iwi authorities—and Mark Solomon told us this—have consultation fatigue, absolute consultation fatigue. They said that they have put together their iwi management plans, and that this bill is just a plea and an amendment to the Resource Management Act that asks for those plans to be taken notice of. If we had done that earlier we would have got right issues in relation to the Maketū Estuary and the Kaituna River when we looked at the Rotorua lakes and their clean-up. If we had had that right in the Resource Management Act currently, there would not have had to be a Treaty redress through the Waikato River settlement legislation. We would have got it right at the front end.

In conclusion, I tell members that in answer to question No. 6 today in the House from the Māori Party, Nick Smith said that iwi had an ongoing role. He gave that assurance in respect of Goat Island and the Poor Knights Islands. But iwi do not have that role, because the very instrument that means most to them in the Resource Management Act is the iwi management plan, which does not have to be taken notice of.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) : I have listened to all the contributions in the House on the Resource Management (Enhancement of Iwi Management Plans) Amendment Bill. I thank my Labour colleagues for their contributions and practical experience, in terms of the information we have heard as to the positive impact that this bill could have. I am disappointed that National in particular is not supporting the bill, but I am not surprised. In the preceding debate Government members stood and said: “But wait. The second tranche of Resource Management Act amendments are issues affecting Māori and will be well dealt with then.” The difficulty with that is they failed to clarify how that would be done, and in what way. If the response is just to retain sections 6, 7(a), and 8, then frankly that is not good enough. This bill seeks to normalise practices that have arisen as a result of Treaty settlements and as a result of moving towards best practice, and placed towards the landscape that we are going to, which is beyond Treaty settlements and towards better co-governance, co-management practices in relation to resource management. I think that in time, on reflection, National will see that these small amendments are progressive and a positive way forward.

I am concerned that many iwi are not able to learn from the experiences of the iwi who have settled earlier. Ngāi Tahu was a very good example, which was raised by Stevie Chadwick. They have iwi management plans that are more than aspirational, high-level statements. They are planning documents that have, and can be, integrated into the policy, plan, and rule-making process, which in effect will lead to better decision-making about developments, protection of areas, natural spaces, and heritage reserves.

The bill acts as a carrot, not a stick, to lift the responsiveness of regional councils to recognise and provide for priorities set out in iwi management plans, in the regional policy statement, in local authority district plans, and to ensure that policies and rules followed by the council give greater recognition in the planning regime to what has been expressed by iwi in their plans. It is a progressive and positive step, as I have said. If anyone wants to talk about a step change in working with hapū and iwi in the planning landscape, then I think this is it. I regret that members on the other side of the House failed to recognise that in taking this step forward the community and the public at large will have a better opportunity to understand how Māori perceive their natural environment and the planning challenges that result from trying to provide for that perspective, because it is difficult.

I want to point briefly to the legal advice I received from the Office of the Attorney-General in relation to the New Zealand Bill of Rights Act test. In particular, I am quoting from paragraphs 9 and 10: “Arguably, and placing greater weight on IMPs, clause 5 of the bill draws a distinction indirectly on the basis of race. This is because it distinguishes between planning documents generated by groups that are predominantly Māori and those that include non-Māori. Nevertheless, in our view the provision does not give rise to discrimination because it does not create any substantive disadvantage. In reaching this view we have noticed that section 6(e) of the Act already requires all persons exercising functions and powers under the Act to recognise and provide for the relationship of Māori and their culture and traditions with the ancestral lands, water sites, wāhi tapu, and other taonga. This provision needs to be read with section 7(a) and 8 of the Act. Section 7(a) requires decision makers to pay particular regard to kaitiakitanga, or Māori stewardship. Section 8 requires decision makers to take into account the principles of the Treaty of Waitangi.”

So the bill passes the New Zealand Bill of Rights Act test. By virtue of including iwi management plans into the planning regime, we know that the process is better. In my first reading speech I cited a small number of examples in my electorate that have frustrated hapū and led to this particular bill. It is about bringing the interests of hapū and iwi to the front end of the planning regime, towards a more integrated response to deal with planning challenges so that communities and iwi can deal with it at a practical level. Māori, just like anyone else, want to preserve their natural environment, and their cultural and historical heritage, as they want to be a partner to the development of their lands and coastal spaces. The bill is about finding a practical solution to a shared future in integrated resource management. They are largely aspirational statements but they can be much more than that. The bill will set a pathway for greater recognition that they should and can be integrated into the planning process at a local government level. I commend the bill to the House.

GRANT ROBERTSON (Labour—Wellington Central) : I move, That the Ethical Investment (Crown Financial Institutions) Bill be now read a first time. At the appropriate time I hope and intend to move that the bill be considered by the Finance and Expenditure Committee. This bill seeks to ensure that our Crown financial institutions invest the money of New Zealanders in an ethical manner. It does that by amending the relevant legislation for Crown financial institutions, setting forth investment policy criteria consistent with internationally recognised norms and conventions for ethical and socially responsible investment. Although Crown financial institutions do not directly control their investments, this framework will require them to instruct their fund managers to invest according to the criteria described in the bill. I want to stress that the main goal of our Crown financial institutions is and should be to generate healthy returns that can fund our future commitments to accident compensation, superannuation, and other key initiatives. This bill will not change that, nor does it aim to change that. It is quite clear that part of sustainability for a business, or, indeed, for an investment fund, is to be profitable. This bill continues that as a key goal, but it introduces meaningful criteria to guide and instruct those funds to invest in a manner that is ethical and socially responsible.

A bill such as this one will inevitably raise questions about what the word “ethical” means. In the context of this bill, it is defined as being socially responsible and environmentally responsible. UN conventions and treaties in those areas are used to set the parameters of what “ethical” is. Essentially it means that Crown financial institutions will be expected to invest in organisations that maintain good human rights and labour standards, are conscious of their ecological footprint, and are not engaging in activities that are harmful to resources such as water, land, and air. “Ethical” also requires that stakeholders are treated fairly, and that the organisation maintains good governance, finance, ethical integrity, and transparency. I take the opportunity to commend the investment policies that our Crown financial institutions have already implemented.

At the same time I pay tribute to my colleague Maryan Street. She conceived this bill at a time when Crown financial institutions had no policies and had taken no action regarding their responsibility to invest, as the law currently has it, in a way that does not prejudice New Zealand’s international reputation. Maryan Street, in her role as the Minister for ACC, worked hard with the Accident Compensation Corporation (ACC) to improve its investment policies, and since then a number of other actions have been taken. In particular, the New Zealand Superannuation Fund has excluded investment in certain activities, such as whaling, some nuclear weapons, and landmine manufacturers. It has also engaged with companies using the UN criteria for socially responsible investment, and all of our Crown financial institutions have discontinued their investments in tobacco. Policies such as those should be encouraged and supported. Furthermore, their existence demonstrates that New Zealanders and Crown financial institutions recognise the importance of ethical investment, and are willing to act to implement it practically. However, they do not indicate that nothing else needs to be done, nor should they be seen as an excuse to sit back and fail to consider what else could be done. There are several reasons, I believe, why changes are desirable. Having in our legislation a commitment to avoiding damage to New Zealand’s reputation is a defensive position, in my view, in terms of ethical investment. Parliament should be acting not only to back up the ethical investment policies we already see from our Crown financial institutions, but also to extend them in a positive manner.

This bill would establish Crown financial institution ethical investment criteria as law, not relying simply on whether the guardians of the Superannuation Fund, at a particular time, believe ethical investment is a good thing, or whether a particular Minister wants to encourage it within ACC. It would put that into law, give some consistency across our Crown financial institutions, and extend the policies. It would also demonstrate Parliament’s support for ethical investment. Policies on ethical investment for our Crown financial institutions need streamlining, clarity, and consistency. At present, legislation for all of the Crown financial institutions remains vague and inconsistent when it comes to what ethical investment might actually mean. My bill would remedy that by creating consistent and extended ethical investment criteria across the Crown financial institutions. It would also provide more direct guidance to the managers of the funds, and, importantly, as I said before, that would occur without taking away any of the fund’s decision-making power. The bill also aims to improve accountability and transparency by requiring more adequate reporting of the social and environmental impacts of each Crown financial institution’s investments. Such reporting practices would also bolster each Crown financial institution’s ability to respond to public interest. Although the changes that are being made by the Superannuation Fund and ACC are to be applauded, there are still issues to do with reporting and engagement with the investment managers and companies on how they go about interpreting ethical investment.

The New Zealand people support ethical investment. We saw that when the public opposed the Superannuation Fund’s investments in companies involved in cluster munitions and nuclear weapons. The public sentiment is also backed by civil society groups, which are active in New Zealand in support of Crown financial ethical investment. Such groups include Investment Watch Aotearoa/New Zealand and the Council for Socially Responsible Investment, and I thank them for their support and encouragement on this bill. I have also received support and encouragement from organisations such as Amnesty International and Oxfam, and a much broader group of non-governmental organisations around the world are working hard to encourage that work.

Internationally there is increasing support for ethical investment, and a growing trend amongst both public and private investors to invest ethically. The UN has endorsed ethical investment. The UN Principles for Responsible Investment, which embody an internationally accepted framework for investors to manage environmental, social, and governance issues in a manner consistent with improving long-term returns, has gained widespread support from companies and State financial institutions alike, receiving over 700 signatures. Other countries have adopted ethical investment policies for their State institutions.

A particularly successful example is the Norwegian pension fund, the Government Pension Fund - Global. It is the second-largest sovereign wealth fund in the world, with assets of over $400 billion. Its investment decisions must be consistent with a set of ethical guidelines. They are extensive guidelines. For instance, the assets of the fund shall not be invested in companies that themselves, or through entities they control, produce weapons that violate fundamental humanitarian principles, produce tobacco, or sell weapons; people who undertake serious or systemic human rights violations such as murder, torture, the deprivation of liberty, forced labour, the worst forms of child labour, and other child exploitation; serious violations of the rights of individuals in situations of war; severe environmental damage; gross corruption; and other particularly serious violations of fundamental, ethical norms. This fund is able to be successful with those criteria. Another aspect of the Norwegian fund’s operations that I think is useful and is something that we can talk about further if this bill proceeds is the ability for it to establish relationships with companies that the fund invests with, in order to observe their behaviour and to ensure that it is ethical.

It is important that this becomes a positive measure rather than a defensive measure. Companies that are seeing their investments potentially withdrawn will want to know in advance that that is a possibility and potentially change their behaviour. So the Norwegian Council on Ethics is involved in observing the behaviour of individual companies. Meanwhile in Sweden the five largest State-controlled pension funds are required by law to follow environmental and ethical considerations in their investment policies, and to report annually to the Government detailing how they are adhered to. Sweden and Norway are only two examples of States that have adopted ethical investment for their State financial institutions.

These international developments give us food for thought. New Zealanders are justifiably proud of New Zealand’s stance on the world stage in areas such as human rights, the environment, nuclear weapons, cluster munitions, and landmines. Therefore, it makes sense for us as a country to put our values into practice in the way our Crown financial institutions invest public money. It also makes sense for us to avoid the embarrassment of unethical Crown financial investments prejudicing our international relationships. This bill is a tangible means of practising what we preach. It is a tangible means of enhancing New Zealand’s image on the world stage, and proving that we are socially conscious and environmentally sound. I commend the bill to the House.

DAVID BENNETT (National—Hamilton East) : It gives me pleasure to speak on the Ethical Investment (Crown Financial Institutions) Bill. This is a bill being put forward by Grant Robertson—

Grant Robertson: So far you’ve got everything right.

DAVID BENNETT: Well, the next bit the member will love because National will not be supporting the bill. So that is the right bit about it.

We need to look at the policy behind the bill, first of all, before we go into the detail of why we support it or do not support it. The policy behind it is not something that any party in this House will have a particular problem with. The nature of investment is such that countries are very careful about how they invest and also the institutions that invest for them. However, although there is that policy of wanting to be seen as ethical in a sense, this bill is not necessary. It is just an attempt by the Labour Party and by that member to try to get some publicity, which they are definitely very short of.

The nature of investment is that ethical investment happens now, and will happen in the future. I want to go through two reasons why it is happening now. The first is very much the market. If we look at the market effect in investment, companies that have a problem in the way that they conduct their operations are seen very poorly in the market eye. Modern markets are not big investors in companies that do not take an interest in the environment, the community, and the sustainable development of their people and their communities. We have just to look at what is going on in the US at the moment with a large oil company, and see the effect of the market price of that oil company, to give us a reflection of what the market says, as if it does not even think it is investing in an environmentally friendly way, or actually working in an environmentally friendly way.

Why would we as a Parliament need to set these rules in concrete and in motion, when the market is achieving the very things that the member wants to see achieved, by forcing companies and corporates to conduct the affairs of their operations in a way that is seen as suitable in the public eye? In essence, this bill is not even necessary, because the market forces those organisations to act in a way that is respectful of what the public would demand.

Grant Robertson: Leave it to the market?

DAVID BENNETT: But public demands do change. Mr Robertson says to just leave it to the market. He thinks that is a problem. But the point is that public demands have changed, and what was publicly feasible a few years ago may not be publicly feasible in a few more years’ time. So the market develops with public opinion, and it would be very poor of this Parliament to hold public opinion to one level when we could look at public opinion developing even further in the future. Mr Robertson may do the opposite to what he wants to do, by holding investment back to levels that are seen as publicly acceptable now, when in the future we could see the institutions’ investment and the investing companies being respectful of the nature of public opinion at that point in the future.

The other argument as to why this legislation is not required is that there are already established and developed ethical investment policies within our own institutions. If we look at the New Zealand Superannuation Fund we see a very good example of what we are talking about. The Guardians of New Zealand Superannuation are signatories to the United Nations Principles for Responsible Investment, and that provides a framework for shareholders to work together to encourage companies to improve investment analysis on environmental, social, and governance risks. So in this way the Superannuation Fund is already part of the United Nations Principles for Responsible Investment.

The guardians are also signatories to the Carbon Disclosure Project; it requires the secretariat for the world’s largest institutional investor collaboration on business implications of climate change. Basically, when it comes to climate change they are already part of an international organisational project—in this case the Carbon Disclosure Project—providing such a basis in respect of investment for carbon, when we are looking at greenhouse gas emissions, including a risk analysis and comparative data.

The guardians are also a member of the Investor Group on Climate Change—the IGCC. That group is a collaboration of New Zealand and Australian investors who are focusing on the impact of climate change and the financial value of investments. It consists of many institutional investors across New Zealand and Australia, and represents a large sum of money under the control of those companies and investors. We have achieved through current processes the results that this legislation seeks to achieve, and we have also achieved those results through the market process anyway. There is no need for this legislation at this time, so the Government will vote against it accordingly.

Hon MARYAN STREET (Labour) : It gives me great pleasure to rise and speak to the Ethical Investment (Crown Financial Institutions) Bill, and I congratulate my colleague Grant Robertson on bringing it to the floor of the House once again, through a member’s provision.

This small bill requires something that is very simple, and I ask Government members opposite to consider again the position that has just been outlined by the member who has taken his seat. The work is not yet done on ethical investment. The work is not yet done on socially responsible investment. We would have a much safer planet if it were. So the member who has just resumed his seat is quite wrong in every respect.

Here is an opportunity for the five Crown financial institutions—the ones that Parliament and the Government can have some influence over—to make sure that their investments align with ethical standards, which might include proper business methods, proper consideration of natural resources, the non-exploitation of labour, and the prohibition on slave labour or forced labour. That is the stuff that this bill attends to.

I am a little surprised, I have to say, to see in one of the media releases the co-leader of the Green Party Dr Russel Norman being somewhat surprised that this bill has come out of the Labour Party. That demonstrates how little time the man has spent in Parliament. This bill was in the ballot in the last Parliament’s term.

This is a significant change. It is not just business as usual. I draw to the attention of members opposite that 2 or 3 years ago, when I last looked at these figures, $1 in every $8 of US investments was being invested in ethical investments or socially responsible investments. We are now in the era when fishing companies like Sealord in Nelson changes it practices because its customers, like Waitrose, will not take its hoki as it is damaging the seabed.

We are in that era. Customers are saying that they will not buy products that they consider to be purchased, manufactured, garnered, or sold at the expense of the planet. If the customer base has that mentality around it, and one-eighth of US investment money was going into ethical investments a few years ago, it is only a short step from there for a Government that has the courage—and, in this case, a Parliament that has the numbers and the courage—to ensure that Crown institutions that invest money on behalf of the New Zealand taxpayer do it in ways that do not bring New Zealand into disrepute. We should do it in ways that do not make us an irresponsible international citizen and in ways that uphold ethics.

That is what ethical investment is about. It is about making sure that everything that this Parliament and this Government in particular has jurisdiction over is done in a way that is consistent with other Government policy. How can we invest in tobacco companies at the same time that we are having a no-smoking policy or an anti-smoking campaign? We cannot be inconsistent in that way. The same thing applies to cluster munitions. In case members opposite did not know, the Foreign Affairs, Defence and Trade Committee has just passed a cluster munitions treaty that those members opposite supported. The treaty prohibits investment by Crown financial institutions.

Mr DEPUTY SPEAKER: I am sorry to interrupt the honourable member, but her time has expired.

CRAIG FOSS (National—Tukituki) : In talking to the Ethical Investment (Crown Financial Institutions) Bill, I say that Mr Grant Robertson is written up quite well as a future leader. He is a nice man, and he may well win an election one day sometime in the future, but he has let himself down here.

I pick up from the previous speaker’s points. Perhaps this bill is aimed at distancing Dr Cullen from Labour as it is now, or from the superannuation fund that the previous Labour Government set up and the directives for responsible and ethical investment that it put in place, because it is a bit of an insult to those institutions that are already practising, and have written and adhered to, all sorts of various directions in ethical and responsible investment policies. In fact, the New Zealand Superannuation Fund is very proud of its ongoing work and the way it measures its investments and makes sure its investments are looked after.

Sue Moroney: Introduced by Labour.

CRAIG FOSS: Well, Labour, National, whomever—the point is whether the legislation is necessary to replicate something that is already being done. The explanatory note of the bill lists the Government’s five major financial institutions. There is about $45 billion to $50 billion in them.

I note a ministerial direction from the Hon Dr Cullen to the Earthquake Commission in 2001—and this is online; I would not try and table it. I am picking up on reputation issues, as the previous speaker mentioned. Paragraph 4 of that ministerial direction states that the commission must avoid: “prejudice to New Zealand’s reputation as a responsible member of the world community.” The direction refers to best portfolio management and all the financial things, but then point No. 4 in paragraph 7 talks about: “ethical investment for avoiding prejudice to New Zealand’s reputation as a responsible member of the world community;”.

So is it working now or is it not? If those members want to talk about this bill being on the books for a while, it implies the failure of organisations already. In an Accident Compensation Corporation document I have here, I see a whole series on ethical investment. It talks about activities repugnant to the laws of New Zealand and about guiding principles of the—

Grant Robertson: Support the bill, then.

CRAIG FOSS: I am not criticising the fact that it is already there; I am pointing out that it is there, so the need for this bill is redundant.

I see that the New Zealand Superannuation Fund is in the Responsible Investment Association Australasia; it is a founding member. The United Nations Principles for Responsible Investment, the United Nations Global Compact, and the Carbon Disclosure Project are mentioned on page 1. I have here a section on responsible investment from the group that looks after $16 billion-odd of our superannuation. The document goes on to define responsible investment. Further on, it talks about responsible investment policy, meetings obligations, and responsible policies for responsible investment. There is a diagram showing that the fund must engage with those the fund invests in and with to make sure it adheres to responsible and ethical investment, and, low and behold, here is the New Zealand Superannuation Fund’s responsible investment practice. There are about 15 pages on responsible investment right here in this document, which is bigger than this entire bill’s 4 or 5 pages.

This bill is a typical leftie bill. It sounds good and it sounds nice, and it will get a bit of public relations coverage for sure, but in a practical sense it is already being done. Some of it is work in progress, but the five financial institutions that look after the Crown’s financial assets are adhering to responsible, ethical progress and management. If it is already working, why would a member want his first bill to be pulled out of the ballot to replicate what is already being done? Perhaps it is all about job creation in the Public Service, but if we do that and follow this bill through, then we would have to lay off people in these other four or five institutions in order to follow through on the ethical progress. Perhaps the member would like to close the loop for us.

As I said, this bill is quite typical of the left. It sounds nice, and it is very cushy and fuzzy and comfy, but at the end of the day this would cost New Zealand taxpayers. The costs would go up as we would have to take out something the previous Government had already put in place and replace it with this bill. I say to Mr Robertson that it is a nice try, but he could do better next time. Thank you.

Mr DEPUTY SPEAKER: Before I call the next speaker, I remind members that when we are debating a bill on a members’ day and there are 5-minute speeches, the bell goes at 4 minutes with 1 minute to go.

Dr RUSSEL NORMAN (Co-Leader—Green) : I rise to speak on the Ethical Investment (Crown Financial Institutions) Bill. The Green Party will be voting for this bill because the Green Party is a strong supporter of ethical and responsible investment. I think it is important to begin by talking about the rationale behind a bill like this. Fundamentally, there are two basic ideas. The first is the objective to make capital cheaper and more available to businesses that are acting responsibly. So for businesses that are not destroying the planet, and hopefully are trying to make it a better place, we want to make capital cheaper and more available in order to make it easier for them to expand and prosper. For businesses that are acting irresponsibly and destroying the planet, we want to make capital more expensive and less available to them.

There are numerous other ways that we can influence the behaviour of businesses, but one way to do it is through the availability of capital—the cost and easy accessibility of capital. A number of large sovereign funds around the world have adopted responsible investment criteria in order to achieve that.

The second major purpose of ethical investment is about us living in a way that we think is ethical, and investing our savings—whether those are collective savings through the tax system such as the Cullen fund, or our own superannuation funds—in a way that is ethical, and making a living off them in a way that is ethical. Ethical investment is a system-transforming objective to move our economy in a much more sustainable and humane direction, and its objectives relate to what is appropriate ethical behaviour. The bill before us tonight will make a small difference towards that, and, for that reason, we support it.

The Greens have been strong critics of Labour in the past over its approach to responsible investment, so we are very pleased to see this bill. When the Cullen fund was introduced in 2001, my predecessor, Rod Donald, attempted at great length to put responsible investment clauses into the New Zealand Superannuation Fund legislation in order to make the Cullen fund operate in a responsible way. Unfortunately, we were not able to do that, and all we got was a clause stating that the Cullen fund was to avoid prejudice to New Zealand’s reputation as a responsible member of the world community. That resulted in the fund investing in whale meat, in cluster bombs—in fact, the Cullen fund quite liked cluster bombs; it was very much into them—and in companies deeply involved in human rights violations, labour rights violations, severe environmental damage, and nuclear weapons systems. The Cullen fund had some very modest direction on responsible investment, but its direction was so weak that it proceeded to invest in all sorts of things that most of us would find reprehensible—although obviously not all of us in the House. The problem with the original Cullen fund legislation was that although we tried to put in a responsible investment clause, we were blocked at that stage. In spite of Rod Donald’s best efforts to put a responsible investment clause into the legislation, the fund went off and started investing in all sorts of things.

The fund is still invested in all sorts of reprehensible things even today, in spite of the Green Party campaigning outside of the legislative framework to stop the fund investing in numerous things. We managed to stop the fund investing in whale meat, tobacco, and cluster bombs, which is a great thing, but it is still invested in, for example, BAE Systems and United Technologies Corporation, which make nuclear weapons delivery systems. The fund is still invested in Halliburton, which, of course, is a profiteer from the Iraq war. It is still invested in Rio Tinto and Freeport-McMoRan, which are causing massive environmental damage, and it is still invested in Wal-Mart, which has very poor working conditions and is renowned for its union busting. Those companies, with the exception of Halliburton, have been ruled out by the Norway Pension Fund. The Norway Pension Fund is the second-biggest sovereign fund in the world. All the oil profits that go into that fund are invested in a way that is ethical. It has ethical criteria, which means that it has pulled out of investing in lots of firms that our Superannuation Fund is invested in.

For those reasons, we support this bill as it makes modest progress towards cleaning up the sovereign funds so that they behave in a way, and invest in companies in a way, that is helpful to our future, rather than detrimental.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Tēnā tātou katoa. It is amazing that what goes around comes around, and in this case that some seriously dodgy investments made by Crown financial institutions under the Labour Government, and rigorously defended by it when challenged, are now coming under fire from—surprise, surprise—Labour now that it is in Opposition. Only a few years back the Labour Government provoked a frenzy of condemnation from the press gallery and political pundits alike when it was revealed that the Superannuation Fund was linked to companies that invested in cluster munitions and nuclear weapons production. The Superannuation Fund is just one of this Government’s five Crown financial institutions, all of which have that nice ring of being sound, conservative, socially responsible investment options—but apparently that is not so. The Superannuation Fund was mentioned earlier by David Bennett as being run by a Crown entity called the Guardians of New Zealand Superannuation, which has had investments in whaling, anti-personnel landmines, the tobacco industry, and cluster munitions, for God’s sake. To its credit, though, that entity has dumped its tobacco stocks, based on the set of international guidelines on environmental, social, and governance issues. Indeed, the Māori Party agrees wholeheartedly with the proposal of this Ethical Investment (Crown Financial Institutions) Bill, which is that all five Crown financial institutions sign up to a commitment on ethical investment, based on socially responsible and environmentally sustainable development.

The guardians’ decision to dump its tobacco investment explains perfectly why we support this bill so strongly. Everyone knows that the Māori Party has been a key driver behind setting up the Māori Affairs Committee inquiry into the tobacco industry. Tobacco is directly responsible for the deaths of about 5,000 New Zealanders every year, more than 600 of whom are Māori. It is responsible for billions upon billions of dollars of indirect cost to this country every single year, through health costs and the loss of productivity.

A few weeks back, thanks to the support of Action on Smoking and Health, we had the honour of having Dr Jeffrey Wigand come before our inquiry. Dr Wigand, as people will know, was played by our Academy Award winner Russell Crowe in a memorable movie called The Insider, a story about Dr Wigand’s time of working within the tobacco industry and becoming a key witness against that industry in multibillion-dollar court cases all across the United States of America. Dr Wigand told us heaps of stuff, including the facts that the tobacco industry had solid data on which to base its cigarette sales to different ethnic groups, that its lawyers rewrote tobacco company reports to make cigarettes look safe, that flavouring was added to make cigarettes taste nice, that chemicals were added to make the nicotine addiction work faster, and that tobacco companies specifically targeted young people to replace the older consumers who had died off from tobacco diseases. That is what I mean when I say that the tobacco industry is an example of the kinds of unethical investment we are all well rid of.

Mark Peck, a former Labour MP who was never able to get any real action on stopping tobacco, has gone on to become the director of the Smokefree Coalition. He said something that I really agree with: “There is nothing good about the tobacco industry. It has lied about the harm its product causes to smokers, lied about the addictiveness of tobacco products, and lied about the harm caused by second-hand smoke. Because of these lies, millions of people have died.”

The Māori Party welcomes this new resolve from Labour to set some benchmarks in making it morally untenable for taxpayer funds to be invested in projects that are neither socially responsible nor environmentally sustainable. We are happy to support this bill. Kia ora.

STUART NASH (Labour) : I stand in support of my colleague Grant Robertson’s bill, the Ethical Investment (Crown Financial Institutions) Bill, for three reasons. The first reason is that New Zealanders need to be assured that the Crown, on our behalf, is putting our money in investments that meet our clear test of what we believe is right. The second reason is that New Zealand markets itself globally as a clean, green, 100 percent pure country. If we are to be true to this branding, then we need to be sure that we walk the walk in every sphere of what we do on the global stage. Ethical investment is a large part of this branding. The third reason why this is important is that there is no legislative framework in place to ensure that the agents acting on our behalf actually follow the guidelines and principles expected by all New Zealanders.

Firstly, again, the Crown, through five existing Crown financial institutions, invests huge sums of New Zealanders’ money, gathered through taxation and many forms of investment, right across the globe. I suspect that many Kiwis would be most displeased if they were to find out that agents acting on our behalf were investing in industries and organisations that go against everything that we as proud New Zealanders stand for. Secondly, we market our wonderful country as clean, green, and 100 percent pure. We declared ourselves nuclear-free before it was trendy to do so. We stood up to the world’s biggest superpower and said no. It was a principled stance based on what we believed was right for the people of New Zealand. We fail ourselves if we do not continue to act in such a noble and practical manner. Therefore we need to be able to walk the walk when it comes to our actions as a global investor. We will not be able to articulate a vision on the international stage when we ourselves are seen to be investing in industries that forge the tools of war and death, are involved in activities that directly cause environmental degradation, and engage in activities of human abuse. Therefore this legislation is important in mitigating this global risk to our country’s brand.

The third reason I support this bill is that there is no legislation in place to ensure that agents acting on our behalf behave in an ethical way. Most of our Crown financial institutes have already made commitments to ethical investment through recognition of the United Nations Global Compact, which stipulates 10 ethical, human rights, labour, environment, and anti-corruption principles for businesses to abide by. The Accident Compensation Corporation, the Superannuation Fund, and the Earthquake Commission are all signatories to the United Nations Principles for Responsible Investment, which give guidelines for investment that is socially and environmentally responsible. In fact, section 58(2)(c) of the New Zealand Superannuation and Retirement Income Act 2001, the New Zealand Superannuation Fund’s governing legislation, requires the fund to manage its investment “avoiding prejudice to New Zealand’s reputation as a responsible member of the world community.” This bill will introduce the framework needed to actually implement these commitments fully. Without this legislation, they are little more than empty lines on a page.

In conclusion, there are three reasons why I urge this House to support the bill. First, New Zealanders need to be assured that the Crown on our behalf is putting our money in investments that meet our clear test of what we as New Zealanders believe is right. Second, New Zealand markets itself globally as clean, green, “100% Pure New Zealand”. If we are to be true to this branding, then we need to be sure that we walk the walk. Ethical investment is a large part of this branding. The third reason this bill is important is that at the moment no legislative framework is in place to ensure that agents acting on our behalf actually follow the guidelines expected by all New Zealanders. This is great legislation, and I commend it to the House. Thank you.

AARON GILMORE (National) : It would be great to sit here and hear the previous speaker, Stuart Nash, talk about the issues around ethical and social investment, if he did not take so seriously the fire engine he drives around Napier every week, as I understand it. I will talk a little bit about why the Ethical Investment (Crown Financial Institutions) Bill is not necessary. Capital markets theory talks about the importance of diversification and the importance of investing in very broad and wide-ranging things. I commend the member Mr Robertson for actually coming up with some of these ideas. I think he has thought about an angle that he thought might make some sense.

Unfortunately, there are a whole lot of issues in this bill, some of which are currently taken into account. Some flaws in this bill would actually cause some problems. I will talk about that, but first I want to talk about some of the issues around why this bill is not needed. You see, a former Labour Party Deputy Prime Minister, the previous Minister of Finance, Mr Cullen—

Stuart Nash: Dr Cullen.

AARON GILMORE: Dr Cullen. He was concerned about the nature of investment of our Crown financial institutions, so he would turn round and put forward certain directives to some of them for various reasons. For example, he put a directive to the Earthquake Commission about how it should invest its natural disaster fund with best practice portfolio management, maximising return without undue risk and avoiding undue damage to the reputation of New Zealand as a responsible member of the world community. That basically means exactly what this bill is designed to do. A directive is already in place for the Earthquake Commission to do what this bill essentially says. It is a waste of our time.

Equally, there is a particular problem with some of the definitions in the bill. What is “ethical investment”? What is “socially responsible”? What is “environmentally sustainable”? There are a lot of issues around those definitions. What might have been completely appropriate 12 months ago might not be today. For example, BP, whose branding is “Beyond Petroleum”, might have been seen as a great place to invest a year ago, whereas today it is a social pariah. That has led to a massive drop in its share price.

One of the other issues is that we have seen the Accident Compensation Corporation, which has one of the most active management portfolios that exists with the Crown, put in place some very tight rules about where it should and should not invest its money. For example, it has recently, in the last year or two, got out of a number of investments that it considered to be inappropriate. It exited from investing in a company called Lockheed Martin because it was involved in nuclear explosive devices and it was deemed inappropriate for a Crown operation in New Zealand to have investments in a business like that. But there is a very fine line between what is Lockheed Martin and what is, say, Boeing. Over half of Boeing’s investment, for example, is taken into account by the defence sector. Is that appropriate or not?

Dr Russel Norman: No.

AARON GILMORE: Exactly. Mr Norman would say that it is not appropriate; other Governments and other members would say that it is appropriate. A whole lot of problems and issues exist in some of the definitions in this bill; what they may or may not mean has not been thought through. I actually think that that is a sensible thing to think about. Maybe the member should think more about some of the details, and work with the directors to get this put in place.

The bill puts in place some ideas about some of those definitions, about international conventions and things like that. Again, I commend the member for that, but at what stage would this actually happen? For example, would we invest in oil companies and extractive industries? In New Zealand those industries have seen some of the fastest-growing returns to New Zealand. A company that I am on record as being a shareholder in has increased about 400 percent in the last 5 years. The belief that that rules out certain types of investment is problematic for our good, hard-working Kiwi mums and dads, who are worried about their investments in Crown enterprises. They would actually lose 1 or 2 percent of their returns if this bill got tightened to an extent where those definitions were far too tight.

I like some of the issues that Mr Norman pointed out about the Norwegian sovereign wealth fund. I think it is a good fund and has some merit, but its money came from what some would call socially irresponsible investment. It got its money from mining—in particular, oilfields. In this day and age that is seen as not necessarily a good place to have one’s money. So if we rule out those sorts of things, we would be in a position where we would make New Zealand poorer—for whatever reasons. I think it is great that the member has had this bill pulled out of the ballot; I have not had the great luck to have that happen yet. I commend the member for actually having some of these ideas come through.

Grant Robertson: Do you have a bill in the ballot?

AARON GILMORE: My bill has been in the ballot for nearly 2 years, I say to Mr Robertson, but we will not talk about that. I believe that this bill is superfluous. It takes into account a situation that we are talking into account anyway.

Hon DAVID CUNLIFFE (Labour—New Lynn) : I rise to take a call in support of the Ethical Investment (Crown Financial Institutions) Bill. In so doing, I commend its proponent, Grant Robertson, for this excellent initiative. Billions of dollars are invested in the Crown’s financial institutions. They are an important part of the Government’s asset book, and they are determinants of corporate behaviour in many sectors of our financial markets. It is absolutely appropriate and, indeed, necessary from a fiduciary duty point of view that the boards of those Crown financial institutions, such as Guardians of New Zealand Superannuation, have clarity and legislative protection of their mandate.

Let us put the counterfactual if one did not do that. I ask members to take National’s argument at face value—if they can bear it—which is that the market will provide. That argument is straight out of 1950s ideology. It is actually asking people who have fiduciary responsibilities to shareholders to break their duties in order to suboptimise their return on investment to informally satisfy, potentially, some ethical or sustainability criteria. I will say that again. National argues that if one invests in a green share and it is earning less than an oil company or an armaments manufacturer, then that is OK because the market will provide.

Mr Deputy Speaker, you know, I know, they know, and the public knows that that is arrant rubbish—arrant rubbish. Directors have a legal responsibility to their shareholders. The guardians of the Superannuation Fund have a legal responsibility to the Crown. We owe it to those directors, and to taxpayers, to make those obligations crystal clear in law. That is what this bill does.

This bill goes only a small step beyond the existing requirement on the guardians of the Superannuation Fund, which is that they exercise good corporate citizenship and do not to bring the Government of New Zealand into disrepute. But that requirement gives the guardians a hard job, because it does not define what that means in practice. This bill assists them by bringing more clarity to the question.

In advancing that argument, I will briefly note the important and ongoing role of the Council for Socially Responsible Investment, which has been a continuous and sensible proponent of progress in this area. I also acknowledge Sustainable Aotearoa New Zealand, the Sustainable Business Network, the Business Council for Sustainable Development, and a whole range of other entities. There is also the 100 percent plan, which the Government has turned a blind eye to. I acknowledge all of those groups that have been pushing in this direction.

I particularly single out one individual, Dr Robert Howell, who has been a longstanding advocate on these matters. When I was a brand-new backbencher on the Government side, he helped me with a member’s bill on triple bottom line reporting for Crown entities. My bill did not get as far as this bill has, so I am really proud of the work that Grant Robertson is doing here.

This bill is a sensible and legally necessary step forward—a legally necessary step forward—if we are to uphold New Zealand’s international brand image as an environmentally sustainable, peaceful, and just beacon of hope in a world that is getting worse and worse to live in with every passing year. But the point is that we cannot informally put an expectation on directors bound by fiduciary responsibilities; we need to give them clarity. We need to protect them from second-guessing, and the Crown owes it to boards to pass this bill.

GRANT ROBERTSON (Labour—Wellington Central) : I thank all colleagues who have contributed to the debate on the Ethical Investment (Crown Financial Institutions) Bill. I particularly thank the Green and Māori Parties for their support for the bill. I recognise that my colleague Dr Norman was perhaps concerned about the lack of progress on this issue under the previous Labour Government. I think it is important to note that this bill was proposed and put into the ballot by Maryan Street during the last Parliament. It is an issue that Labour feels strongly about. I acknowledge that as a person who was not part of the previous Government, I come in here with a fresh look at these matters. I think that it is extremely important that this bill has had the opportunity to be heard today.

I also acknowledge the comments that Hone Harawira made about the role of the Māori Party on the issue of tobacco; I think that that has been an important leadership role. It highlights the fact that there is nothing in law today that would stop the Superannuation Fund going backwards on that decision. Nothing would actually stop it from doing that. That is why we need to move beyond minimums.

It is sad for me that National members on the other side of the House see everything in the sense of minimums. Where is the ambition for New Zealand that we heard so much about? Where is the ambition to get out there on the front foot and say that a bill like this is good for New Zealand? It is good for our reputation internationally; it reinforces everything we try to say on the world stage about New Zealand. It does not just rely on minimums and on the fact that some good things have happened in terms of investment. This bill is trying to say that we can actually be proactive. We do not have to be defensive, and we do not have to be passive about our commitment to sustainability and our commitment to human rights; we can actually be active on the world stage and promote what we believe in, not only because we think it is good for the planet today but because we believe in making positive change on those matters.

We can look to historical events like the decline of apartheid in South Africa, and ask what role sanctions played in that. What was the role of the fact that people pulled investment out—

Dr Russel Norman: What was the role of the National Party in that?

GRANT ROBERTSON: Exactly. I say to Dr Norman that that is true. We can look to that and say that it was an opportunity for people all around the world to contribute to making social change happen. That possibility stands again if people are prepared to back this bill.

National’s main argument against this bill is that the market will provide—the market will provide. Well, that is simply not true, because investment procedures could change overnight without the kind of legislative protection that is in this bill. It is a defensive, negative position from National, which simply follows along with the tyre-kicking style of the Government. Mr Joyce likes to influence us with the view that they will go along with where public opinion is; they are not too interested in showing any leadership. But I say that this is the opportunity to show leadership.

The already established ethical investment principles—such as those of the UN, which the Superannuation Fund follows—are good and useful, and they set a benchmark. But it is interesting to note that companies that are particularly focused on ethical investment questions, like HSBC, have moved to develop their own guidelines about things like climate change, specifically because they do not believe that the UN principles go far enough. That is what this bill is trying to do. Let us move away from a passive stance on ethics and sustainability to a more positive one. New Zealand could use that stance to our advantage globally rather than sitting back and saying that we will put into law a clause that says these investment funds simply must not do anything that is prejudicial to our reputation. Instead, we should go out and try to enhance our reputation.

In conclusion, I thank all those organisations that have supported this bill and these issues; I am sure they will go on supporting them. I also mention Dr Robert Howell. I thank my intern Hannah Blumhardt, who has done a significant amount of work in helping to develop Labour’s position in relation to both this issue and the speeches that have been given here today.

New Zealand has an opportunity to be a leading global citizen, to make real the statements we often make about punching above our weight, and to ensure that our investment funds invest in companies that are ethical, sustainable, and positive for the planet. I urge National members to support this bill and take it to a select committee. The bill is not perfect, but it takes us steps forward in New Zealand’s ethical investment, and in our reputation on the world stage.

Hon Sir ROGER DOUGLAS (ACT) : I move, That the Education (Board of Trustee Freedom) Amendment Bill be now read a first time. The purpose of this bill is to give boards of trustees much greater freedom in the way they manage school affairs. Currently, schools are free to decide how they spend operational grants, as the Ministry of Education acknowledges that they know the best uses for the money. But when it comes to teachers’ salaries, schools have little say, in that they cannot trade off between salaries and other forms of spending. This bill would implement a system similar to the one National introduced in the 1990s, the fully funded option, alternatively known as bulk funding. I will talk briefly about that experience.

The Ministry of Education in the late 1990s undertook to determine how the schools that had opted for full funding had fared. The ministry found an overwhelming positive: 94 percent of respondent schools felt that they had been mostly advantaged by bulk funding, and 80 percent confirmed that their school would prefer to continue with bulk funding. The ministry found also that the common claim that was then made—that bulk funding helped the wealthy schools but not the poor schools—was totally incorrect. After all, the previous model of bulk funding was optional and 36 percent of bulk-funded schools came from the ones in low-decile areas, in deciles 1 to 3.

I ask why so many low-decile schools would opt in if the scheme, in fact, harmed them. What did the schools use the money for? Over 80 percent of bulk-funded schools used the money to hire extra teaching staff. This shows that schools used the increased flexibility in order to increase teacher quantity and quality. Why should schools be prohibited from doing that?

As soon as this bill was drawn, numerous attacks were made on it. Probably the worst came from the Labour Party. Trevor Mallard stated that the bill was unnecessary because schools could already increase salaries by moving around their management units. Well, first, if the Labour Party likes flexibility, I ask what the problem is in extending it. Secondly, management units are a terrible way of rewarding good teachers for performance. It is absurd that the only way to pay good teachers more is to put them into a managerial role and have them spend more time out of the classroom in order to receive higher wages. I ask why Labour would support a policy that sees the best teachers not teaching.

How would this bill place us internationally? Well, the Australian Labor Government has just announced a policy to give schools much greater control over their budgets. Prime Minister Julia Gillard has argued that it is unfair to create league tables of schools, while tying their hands over improving their relative position by preventing them from managing their own staff. In other words, this National Government is to the left of the Australian Labor Government.

How would a principled National Party vote? Those members say that they support freedom of choice; that is what they say. I ask why schools should not have the choice to pay teachers more, to reward good teachers, and to hire more staff rather than build a new gym, if that is their choice. Of course, schools should have that choice. National members say that they support having rewards for achievement. Well, I ask why quality teachers should not be paid more than sub-par teachers. Why should we not try to attract some of the best and brightest into the teaching profession?

Of course, there is no chance that National members will vote for this bill. After all, National members have spent the past 2 years in Government desperately trying to prove that they stand for nothing and that they just want to be popular; they just want to be popular. They will happily sacrifice good policy at the altar of the Prime Minister’s popularity. They will happily vote down a bill that was once their policy. They will happily pretend that they do not believe in this bill, because they want to govern for governing’s sake. They simply do not care about the quality of the policies. They do not care about the children. They care only about the possibility that they might lose a vote or two. Children do not vote; teachers do.

Hon Tau Henare: Oh, it’s not like that.

Hon Sir ROGER DOUGLAS: Yes, it is, I say to my friend. It is like that. Children spend around 15,000 hours of their lives in the classroom. What they get out of it matters for the rest of their lives, and it impacts on how well New Zealand fares. Good teachers are the most important factor in whether children benefit from school. Teachers determine whether children get a quality education, not the curriculum, not the class size, not funding, and not computers or the Internet. Those are all secondary to having quality teachers. This bill is all about allowing schools to employ and retain quality teachers. During the work of the working party on school choice, one thing became clear, and that was the desire of head teachers to have more control over staffing issues. This included training. From decile 1 to decile 10, head teachers wanted to be able to train their own teachers. They wanted more pay flexibility. This bill would allow that to happen.

The centralisation of policy that has occurred in education over the last 40 or 50 years was aimed in part at driving out poor teachers through Government fiat. It has failed miserably. Decisions on how and what to teach and on the deployment of resources were taken away from head teachers in schools and are now made in Wellington, with disastrous results. The fact is that 30 percent of children leave school with inadequate outcomes in mathematics, reading, and writing skills. Any other business in New Zealand that failed 30 percent of its clients just simply would not survive. The fact is that the rules and regulation that are basic to centralisation disempower teachers. The result is that they drive out good teachers and they protect poor ones.

New Zealand has ended up with an education system that simply cannot work, and in an overall sense it fails between 25 percent and 40 percent of all students. The system is propped up by many good schools, which continue to exist despite the system rather than because of it. We have in New Zealand a centralised system of planning and direction, Soviet Union - style. It is a system that systematically shuts out the power of incentives and choice to raise standards. My bill helps but it does not solve the problem. The Ministry of Education, which created and runs this education monopoly, is also a monopoly provider of advice to Ministers on policy and on how the system might change. The result is that we have a closed system that locks in declining performance.

JO GOODHEW (National—Rangitata) : I rise to speak on the Education (Board of Trustee Freedom) Amendment Bill, and I say from the outset that National will oppose this bill. We heard from the previous speaker, Sir Roger Douglas, and I quote him, that “My bill helps but it does not solve the problem.”, and that, in fact, is exactly why National will not be supporting this bill.

The purpose of this bill is to allow boards of trustees to have control over the employment of the teachers at their schools. It would see schools paying teachers’ salaries out of operations grants and allow boards to negotiate employment contracts with teachers. Now is not the time for us to be considering this. The National Government has a plan for the education of the 20 percent—although Sir Roger said it was 25 percent—of students who are failing to make the grade when they need to enter the workforce, but the plan in this bill is not our plan. That is not what we want for education.

I can speak with some authority on bulk funding, having been the board chair of a large school that was bulk funded. I have been through the discussions with school principals and with boards of trustees and parents over bulk funding. It is quite a contentious issue. It is a battleground, actually, I say to Sir Roger; the member knows that it is. The bulk-funding battleground is not the battleground to be on at the moment. Having said that, though, boards of trustees could negotiate the employment of teachers on any terms and conditions of employment as they see fit. That clause would allow schools to offer different terms and conditions to different teachers, with the effect that teachers could be paid based on performance.

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

JO GOODHEW: This bill is a return to bulk funding and it opens up performance pay for teachers. The National Government has said it will not support these measures, and therefore it will not support this bill. Prior to the 2008 election the National Party campaigned on education being one of the top five most important parts of National’s policy planks, but its plan for education was not this one, and the National Government is delivering right now on its priorities for education. However, National members will not be drawn into Sir Roger Douglas’ descriptions of us; we will say simply that we know in which direction we are heading and this is not it.

The Government has announced a major new approach in education to focus on lifting student achievement. It is innovative and exciting for education in New Zealand. At least 50 expert practitioners will now be appointed to work closely with schools to lift student achievement, and the response to that has been very, very positive. Professional development for teachers and principals will be focused on how to lift students’ educational performance. This National Government is investing $36 million to help children who need extra support in reading, writing, and maths. This follows the identification of students needing help, which was made through the national standards. The Government is continuing to help schools roll out national standards to make sure that parents receive clear, plain-language reports so they know how their child is progressing against the standards. Parents said they wanted better reporting, and that is exactly what national standards provides.

As I go around the schools in my electorate of Rangitata and talk with the principals I am really heartened by the progress they are making. It has not been an easy time for them; they have told me that. I have fed their views to the Minister of Education and I have also been able to, in effect, answer some of their questions. I have also been able to celebrate with principals the feedback they are receiving from parents about how they are enjoying these plain-language reports provided against the national standards. We encourage parents to get in touch with their schools to discuss their child’s report, so that they can see what it means for their child, and to give feedback to the schools, as this year is, of course, just an embedding year for national standards.

Hon Member: They do anyway.

JO GOODHEW: I just heard a plaintive little voice from across the other side of the House saying: “They do anyway.” Clearly, they do not. Most of the schools I know are doing a fantastic job but when 20 percent of the children going through our schools are not achieving by the time they get to National Certificate of Educational Achievement level 2, then clearly there is room to do better, and National aspires as a party, and as a Government, to do much better than we have been doing.

We want to give children the best possible start in life. We want to give them the skills and opportunities they need to succeed. That is not too much to ask. We recognise that quality teaching is the key to achieving better educational outcomes, and we are committed to supporting our schools and teachers. National has delivered more for education in Budget 2010 than ever before: $12 billion. It is a bitter pill for Labour to swallow—$12 billion for 2010-11 is the most ever. Therefore, I conclude my speech by saying that we have a plan for the education of our students. We are working on that plan, and this bill is not part of that plan.

Hon TREVOR MALLARD (Labour—Hutt South) : I say that if national standards is the plan, if measuring is the plan, then it is pretty sad. There were some classic lines in that speech by Jo Goodhew, which we will share at some stage, but I, unlike that member, will focus on the bill that is before the House. The Education (Board of Trustee Freedom) Amendment Bill is a member’s bill.

The first question I ask is what happened to the leading education expert on the far side of the House, Allan Peachey. I have been sitting here waiting and listening for Allan Peachey’s speech. Allan Peachey, I think it is fair to say, is a person of incredible integrity, with a wonderful understanding of how bulk funding works, and he is probably the person who rorted it more than anyone else in the country. He got the biggest amount of bulk funding because he was the principal of the biggest school in the country. He made enough on it to purchase a corporate box at North Harbour Stadium for his school—he is someone who knows how it works. Instead, we had someone who gave a speech of which at least 80 percent was about standards, which are not part of this bill at all.

This bill is about bulk funding, something that the National Party believes in. It is about competition between schools, something that the National Party says it believes in. It is about performance pay, something that we know all of the National Party agrees with, as far as teachers are concerned. It is about giving power to boards of trustees that they do not currently have to negotiate salaries—something that the National Party believes in. With all these things that are part of the core raison d’être of the National Party, part of its core beliefs, why is it that not one of the National members is prepared to stand up for their principles? Why is it that not one National member is prepared to stand up and support the bill?

I will be interested in the speech from the co-leader of the Māori Party, because this bill fits very nicely with a number of things I have heard her say in the past. It fits well with Whānau Ora, for example. It would allow the money to follow the students in a way that she prefers and has supported for quite a long period of time, so I am interested in her point of view and the direction she will take on this bill.

In fact, I think I am just about prepared to suspend my judgment on our vote on this legislation until we have heard from the Māori Party. I ask my colleagues not to be too firm as to the way we vote, because it may be that there could be even more embarrassment for National members if they were the only members to vote against this bill. Maybe we could get it to the Education and Science Committee. Then we could have discussions about National’s principles and plans for months and months and months on the basis of the bill. We could have submissions from all around the country. We could have Mr Peachey chairing the select committee on bulk funding, and then we would have the view of National. So it is fair to say that it could well depend on the Māori Party. We look to see whether Ms Turia’s vote will follow her views as they have been expressed.

Of course Labour does not think this bill is a fair approach, we do not think it is a good approach, but I do not want to totally rule out yet the possibility of letting the community have this discussion. It could be a good discussion for the community to have: to go over the issues around bulk funding, and to look at some of the longer-term plans of National.

At the select committee we have a couple of bits of legislation in front of us now, but I think this would be a good debate to have so that we could get the clear views of the community. We could get an understanding around New Zealand about the issues of performance pay, bulk funding, and the role of boards of trustees. We could have that debate, as I say, which would be very well led by Allan Peachey.

LOUISE UPSTON (National—Taupō) : It is good to be able to speak on any education bill in the House, but unfortunately, the Government will not be supporting the Education (Board of Trustee Freedom) Amendment Bill, which is the member’s bill of Sir Roger Douglas. I will address some of the previous comments. There have not been many times in my lifetime—actually it is a first today—when a member of the Green Party has referred to the National side of the House as being communist, which I took quite personally and found quite staggering. ACT, on the other hand, is saying that this National Government is to the left of the Australian Labor Party. Again, I found that to be a staggering comment. I will say that I enjoy my time on the Education and Science Committee with the Hon Sir Roger Douglas. I enjoy his debate and the things that he brings to the committee. On this particular one, though, National priorities are not the same as ACT priorities. Some parts of the bill could possibly have some merit at some point in time, but we want to focus on different priorities in education—ones that are clearly around lifting achievement.

The proposal of this bill is to allow boards of trustees to have the responsibility for teachers’ pay. In effect, that is really about the return to bulk funding. I ask whether there is a real problem. If I look to my own constituents, not one single person has raised bulk funding as an issue. If it was an issue, I am sure that it would have been raised on more than one occasion, because I quite proudly go around my electorate saying that education is my top priority. I am sorry to say to Sir Roger that not one person has said that bulk funding is top of their list in terms of making changes in education.

Let us talk about boards of trustees. I have met with many boards of trustees over the last 20 months, and I will tell the House what they talk about. They talk about achievement. Some of them talk about teacher training, and how to make good teachers great and great teachers excellent. They talk about infrastructure, the roll-out of ultra-fast broadband, the New Zealand curriculum, and well-rounded students. They do not talk about a return to bulk funding. So I take my steer from what my constituents tell me, and bulk funding is not one of them.

Obviously, National wants to give children the best start in life and give them the opportunities they need to survive.

Sue Moroney: You’ve cut the funding for early childhood education.

LOUISE UPSTON: The list member Ms Moroney talks about early childhood education. Clearly, this is a Government committed to making more early childhood education available to more young people through an increase in the Budget. This Government has committed $12 billion into education, which is more than ever before. We are supporting our schools and supporting our teachers. We want to say that bulk funding is not something that this Government is focused on. It is not a priority. I can understand that that member might like to bring it to this House, but we will not go there.

I will talk about one reason why the Government is not focused on bulk funding. Recently, I have been in discussions with a State Representative, Christine Scanlan of the Colorado House of Representatives, who has just put through Senate Bill 191, which has brought in performance pay for teachers. No, she was not a Republican; she was, and is, a Democrat. She introduced performance pay for teachers, and—goodness—what a battle she fought. That is not a battle we are focused on.

We are focused on lifting achievement, which is why we are focused on getting more participation in early childhood education, more students, and getting plain English reporting to parents. If I think about my own child’s recent school report and my interview with his teacher, I know that I have great information with which to partner my son and his teacher in improving his education. That is what parents want. Teachers want to do well in their schools, principals want to get on with school leadership, and not one board of trustees that I have talked to lately wants anything to do with bulk funding. Thank you.

Hon TARIANA TURIA (Co-Leader—Māori Party) : Tēnā koe, Mr Assistant Speaker Barker. The origins of the Education (Board of Trustee Freedom) Amendment Bill arise from the revolution that took place in Aotearoa in 1989 under Tomorrow’s Schools. When the Education Act 1989 swept into place, the responsibilities of governance and management of schools shifted from the Government to individual schools. Each school was to be governed by an elected board of trustees, which would be responsible not just for the management of the school but also for the legal compliance with national education guidelines. This responsibility brought with it the power to employ teachers, to hold the principal accountable for performance issues, and to manage finances, school property, and the implementation of the curriculum. This bill essentially extends those 1989 powers to the fullest degree, enabling boards of trustees to manage their own affairs by having full control over the employment of teachers at their schools.

Teacher salaries are currently paid out directly by the Crown. This bill will remove that obligation from the Crown and place it in the hands of boards of trustees via the grants process. It is a radical move. In a technical sense, it is the creation of a new section 91, which states that all teacher salaries must be paid out by the board of trustees from grants paid to it under section 79 of the Education Act.

More than that, it is about consolidating the autonomy and the self-determined direction of local schools. It is about establishing their total and absolute control. Associated with that, of course, is the potential for discrimination or questionable practice by the boards in hiring teachers, given their newly acquired authority under this bill. Although we are keen to learn how the unfettered power and authority of boards of trustees would be monitored and scrutinised, we cannot overlook the significant call from many kura for autonomy, for self-management, and for self-determining schools.

I think it is worthwhile to mention that the same legislation that brought in Tomorrow’s Schools in 1989 also brought in the provision for communities to begin new schools—the kura kaupapa Māori movement. Kura kaupapa, as we all know now, is a means by which te reo Māori is the principal language of instruction, and the history, values, beliefs, and practices of mana w’enua are honoured and protected. Kura kaupapa are in many ways the ultimate expression of mātuaranga Māori motuhake—the full autonomy and status for Māori knowledge and values. The distinguished Professor Graham Hingangaroa Smith spells it out in more detail, saying that the three key themes of kaupapa Māori are validity and legitimacy of Māori, the survival and revival of Māori language and culture, and Māori autonomy over their cultural well-being in their own lives.

It is this last principle that has really influenced us in considering this bill. It is about the relationship between autonomy and mana motuhake, self-determination and independence. We consider the questions as to how kura can demonstrate meaningful control over one’s own life and cultural well-being. When the Māori Party came across this bill, we saw in it the possibility to respond to the call from kura to support the ability of Māori to make their own decisions as an example of Māori educational independence. If there is one thing the Māori Party is really keen to support, it is providing a mechanism by which we can attract w’ānau, hapū, and iwi to engage with Parliament in creating a vision for Māori educational independence, prosperity, and success.

In line with our usual practice at first reading, and in the hope that Māori will be able to contribute at the select committee, we will support this bill at the first reading. This bill will allow the kōrero to be had. Kia ora.

SUE MORONEY (Labour) : It is a pleasure to rise and speak to the Education (Board of Trustee Freedom) Amendment Bill put forward in the name of the Hon Sir Roger Douglas. I congratulate Sir Roger. I think I want to take him with me to the races sometime soon, because he seems to have very good luck in getting his bills drawn out of the ballot. I may wish to borrow that luck not only for going to the races but also for the ballot draw myself. I have a bill in the ballot that I would rather like to see pulled out, so I look forward to learning the secret to his success.

As for the purpose of this bill, the words “board of trustee freedom” have been used in the bill’s name—and have we not heard “freedom” used as code for a whole range of things—and in this instance it is code for bulk funding. The words “board of trustee freedom” are code for bulk funding, and we have been there before. Sometimes this place is like being in a bit of a time warp. Sir Roger Douglas is doing the time warp of bulk funding yet again. He is revisiting a failed experiment from the 1990s, and it was a failed experiment. [Interruption] Mr Ardern is noting that I have not said how Labour is voting on this bill, and he is quite right. I have not stated Labour’s position at all. I think everyone in the House must acknowledge that bulk funding was a failed experiment in the 1990s, although clearly the Māori Party has a different view. I am not sure where they were during the 1990s when we saw how that all unravelled. Certainly, it would create unhelpful competition between schools for teachers and would result in winner and loser schools. But that is not unusual in the current environment.

The approach that the current Government is taking to early childhood education creates winner and loser early childhood education facilities. This bill is not out of keeping with what currently happens. When Jo Goodhew spoke, I note she warned Sir Roger Douglas that this was not the time to discuss this bill. When talking about code for things, we know that “this is not the time for this bill” is code for “not in this term”. The Government is not brave enough to do it in this term, but if the public should give National a second term it will be into it, boots and all. That is what it is code for. “Not at this time,” said Jo Goodhew, while looking directly at Sir Roger Douglas—that is the signal, the little wink and nudge to the ACT Party—“just not right now, Sir Roger, because we have this stuff going on with national standards.” The whole school sector is up in arms. This is not the right time.

The Government is fighting on all fronts, in education. It has cut funding to early childhood education, and is that not striking a chord in the community! Jo Goodhew and Louise Upston can undo their own credibility as many times as they like by getting up and saying they want to give children the best start possible, as they did say in their speeches. But the fact remains that the Government has cut funding to early childhood education. Clearly, this Government does not wish children to have the best start possible, because it is taking qualified teachers out of the early childhood education sector. There is a lot of double-speak in this debate; a lot of double-speak. Certainly, much of the double-speak has been coming from the Government benches. Government members are running a mile from having the bulk-funding debate all over again. They are running so far from it that the chair of the Education and Science Committee, Allan Peachey, is not able to take a call in this debate. I think that is a great shame. Government members are running a mile from this debate, because they know how much it compromises them. It will be very interesting to see a select committee, chaired by Mr Peachey, taking submissions on this bill. At the end of tonight’s debate, that could very well be a reality. Thank you.

DAVID CLENDON (Green) : Kia ora koutou. Before beginning, I must acknowledge my colleague Catherine Delahunty, who might otherwise have delivered this speech and whose thoughts have gone into the preparation of it.

The purpose of the Education (Board of Trustee Freedom) Amendment Bill, clearly, is to enable boards of trustees to manage their own affairs by having full control over the employment of teachers in their schools. This is highly reminiscent of the 19th century. It would undo consistency and equity, and it would create chaos in our education system. It somewhat reflects, and causes some recollection of, a children’s series called Little House on the Prairie, where schools were totally controlled by the fathers on the school board, the pay and conditions were set by those boards, and all people lived happily ever after in their small communities. However, we know, of course, that that is not how it works.

The reason the education system has developed with the Crown negotiating with the profession and setting a standardised, equitable, and incremental wage structure based on qualifications and professional progress is that it is better for the communities, it is better for the children, and it is better for the teachers. A fair society is better for everyone, and we need to protect the values of equity in the face of such unthinking and blind commitment to the free-market model. It raises the question of why we are wasting time on this bill. It is probably because these old ideas have a deep emotional appeal to a narrow group of ideologues who believe that we are only individuals, rather than individuals within communities and individuals enriched by our strong social and cooperative instincts. This approach does not include an understanding of collective equity or empathy. The logic of the Crown negotiating consistent pay rates for all teachers appears somewhat sophisticated to the designers of this bill. Why is it difficult to grasp that each school board of trustees would be placed in a highly invidious position if it were obliged to set the pay rates for the teachers at its school?

One questions the genesis of this bill. A number of my colleagues stay in close touch with boards of trustees and teaching staff, and with parents and students at schools. Nowhere are we hearing a call for a measure of this sort to be undertaken. Boards of trustees have their hands full dealing with complex finances, not to mention being caught in the battle between the Minister of Education, the principals, and the teachers over national standards. The boards are not looking for the burden of setting pay rates, which would exacerbate the difficulties they already have in trying to divide up the limited funds to maintain buildings and evaluating that need against the need to fund special-needs support, or in balancing the purchase of classroom equipment with providing support staff in the classes. The very last thing the boards of trustees, which are made up of parents and volunteers, want or need is the additional stress of endeavouring to add teachers’ wages into the competition for tight resources. That would be a very poor recipe for good local school or community relationships.

The world is made, and not least of all in education, and maintained through respectful relationships—our sense of what is fair. It is maintained not by individuals scrapping against each other but through structures that create at least some kind of balance and equity. Schools exist as communities within the education system, and teachers and principals move between schools. It is not every school alone; it is a network of communities trying to cooperate, despite the best efforts of the free-market model. They do not particularly want or need to waste energy in justifying a consistent and collegial approach, so the Greens will simply refer to this bill as being retrogressive in the extreme.

Twenty years ago the Lange Labour Government introduced Tomorrow’s Schools. The marketing of Tomorrow’s Schools was based around parental involvement and control of schools. Having 7 or 8 years’ personal experience on a board of trustees, which spanned the time of the transition from Tomorrow’s Schools, I know that some schools did very well out of the increased flexibility. The Greens also know that the least well off, most vulnerable, and poorest communities struggled because they did not have lawyers, they did not have accountants, they did not have a stable school community, and therefore this new model did not meet their needs in the way that it ought to have done.

The passing of this bill will take us a considerable step away from progressive community engagement at schools. It will be a step towards complete bedlam and mayhem, and the Greens will have no part in it. Kia ora.

DAVID GARRETT (ACT) : I was not intending to take a call on this bill, but I cannot resist after hearing that typically hysterical contribution, full of code words, from Mr Clendon. He began by calling our colleague Sir Roger Douglas, and ACT Party members by definition, narrow ideologues. That must also apply to the Māori Party; their members are not normally described as narrow ideologues by the Greens, but with the particular alignment of the planets today that seems to be it. We are very happy to be aligned with the Māori Party on this bill, and that is for one very simple reason: both the ACT Party and the Māori Party are interested in the best results for our kids, and the ability to send our kids to the schools that suit them best. It may be for somewhat different reasons, but we have the same end.

I am reminded of the complete lack of understanding of the supporters of that sorry lot over there. During the election campaign I attempted to explain the ACT Party’s education policy, but perhaps as a learner candidate I did not do too good a job. I tried to say that at my old office, which is situated on what used to be farmland but is now office space, there are I think four private schools, which have sprung up in the last 10 years. They have sprung up because there is a market there—because there are wealthy Asians who can send their kids to those schools. The minute I said that, the typical supporters of the Labour Party howled about wealthy Asians, saying: “We don’t want to be at schools like that.” They just did not get it. We were trying to say that everyone should be empowered to send their kids to schools where they think their education will be best served—Māori parents, ACT parents, and Green parents.

That is what this bill is all about. It is attempting to allow people to have the choice to go to schools where the education will be best for their kids. I am one of those members in the House—and I do not know how many other members there are who have young children at school—

Sue Moroney: Oh, quite a number.

DAVID GARRETT: —OK, there is another one—who is as happy as Larry with the performance of the local school.

In fact, my son started school just today. It would not make the slightest bit of difference whether or not we had a voucher system because, with his sister, he would be going to, and would stay at, Kaukapakapa School, because it is a great school. My daughter is top of her class in English, and at that school they are allowed to put up which students are doing better than others because they do not believe in everyone being the same. It works well, but if it were not working well, she would be down the road at Waitoki School. That is why we are supporting this bill.

It is no surprise that the Māori Party is supporting the bill. We are behind those members, and we agree with them. Even half of the Labour members do; I notice members opposite have gone very quiet. Mr Mallard had a very interesting and useful conversation with Sir Roger, but unfortunately he could not break through to “Planet Green” over there, so sadly the bill will go down. However, we are very happy to stand with our colleagues on this side of the House, and it will be very interesting to see when we are next described as narrow-minded ideologues who cannot see anything. Thank you very much.

KELVIN DAVIS (Labour) : If I thought the Education (Board of Trustee Freedom) Amendment Bill would raise achievement, then I would support it, but it will not, so I cannot. The bill amends the Education Act 1989. It gives wealthy boards of trustees control over the employment of teachers. It gives boards of trustees in Remuera, Howick, Epsom, and the other leafy suburbs flexibility and choice. It also gives them licence to pillage and plunder the best teachers for their own schools, while less fortunate schools struggle to recruit and retain excellent teachers, which will get a whole lot more difficult.

In this House we must be careful that when we advocate for the rights, choices, and freedoms for some, we do not restrict the rights, choices, and freedoms of others as a result. We have to ensure that advocating for the rights, choices, and freedoms of some is not really an excuse to concentrate the skill, talent, and expertise in just those schools that can afford to pay for it. We have to be careful that the concentration of that skill, talent, and expertise does not simply exacerbate the inequalities in our system and country, and entrench burdened and despondent communities across New Zealand.

As it is, many low-decile schools have to run deficit budgets to survive and provide for their students. I ask Sir Roger Douglas how he expects those schools to have the resources to compete with wealthy schools for the services of excellent teachers. The vision from the ACT Party should be for every child in every class in every school to have an excellent teacher, because excellent teachers raise achievement.

Bulk funding will not raise achievement. The vision should not be for excellent teachers simply to be concentrated in schools that are concentrated in wealthy communities. When every child in every class in every school has an excellent teacher in front of them, the Government’s responsibility is then to provide the conditions where those excellent teachers can weave their magic. Bulk funding is not a condition that will enable excellent teachers to weave their magic.

People who sing the praises of bulk funding in the 1990s always forget to mention the fact that those schools that opted into bulk funding received a hefty and attractive bonus for joining up, and, therefore, their allegiance to the scheme was guaranteed by a bribe. They received substantially more funding than was necessary to pay all their staff at the top of the scale. This bill is evidence that parties on the other side of the House do not have a plan for education or raising achievement.

Reporting achievement does not lift achievement; good teachers raise achievement. The parties opposite do not have a plan to reduce inequality and inequity in communities, and they do not care that their ideological beliefs for education mean that schools that struggle because of the geographic isolation or socio-economic status of their communities will struggle to compete with more fortunate schools for the services of the best teachers in New Zealand.

In the far north we struggled at times to get any applicants for some teaching positions. In order to attract the best teachers under bulk funding, we would have had to divert tens of thousands of dollars away from the curriculum, professional development, and resources for the students, in order to pay bonuses for teachers’ salaries.

In Kaitāia the allowance for hard-to-staff schools is simply not enough to attract excellent teachers. At Kaitāia Intermediate School we would have needed tens of thousands of dollars in bonuses to attract teachers to move them away from the big centres. In fact, I added it up and it would have come to over $200,000, which is more than two-thirds of our operational grant. When I hear of some wealthy schools being able to raise $100,000 in 1 day at a school gala, I can understand why this bill would be attractive to them. They can afford to pay those bonuses. For those of us in struggling schools, raising $2,000, $3,000, or $4,000 in a fund-raiser would pay for little more than one-third or one-quarter of the bonus we would need to attract an excellent teacher.

This bill will harm educational outcomes. It will reinforce educational and therefore social disparity. It will mean that struggling schools in struggling communities will be at a disadvantage compared with wealthy schools in wealthy communities. It will make it harder for every child in every class in every school to have an excellent teacher in front of them.

AARON GILMORE (National) : I agree with the previous speaker, Kelvin Davis, about some of the things he said. I think he is a smart man and a very good person. He understands education, and he has been a very good teacher. But I also think the Education (Board of Trustee Freedom) Amendment Bill represents an idea whose time has not yet come.

I will talk about a few things, and one thing in particular. It was my son’s parent-teacher interview at school today, and my partner managed to go along to see my son’s new teacher, who is a first-year teacher just out of college. Lo and behold, my son is doing quite well. He is exceeding the standards, and I think that is great. He is a 7-year-old who is performing at the level of an 8 or 9-year-old, but given his wonderful mother, that does not surprise me.

One of the issues is that we are dealing with many other things in terms of the education sector. I generally like voting for bills with the word “freedom” in the title. I believe freedom should reign. But this bill has some issues, which have been pointed out by prior speakers.

I will talk a bit about Colorado. Louise Upston and I, and a number of Labour members, were in Colorado about 3 weeks ago, and we met with a senator there. She was introducing a bill to put in place a performance-based pay system that is very unpopular in that state. She pointed out some of the extreme problems that exist with implementing that policy in Colorado. If this policy from Sir Roger Douglas was ever to be adopted, there is a lot we could learn from what those people are doing in America. I encourage Sir Roger Douglas to look at what is going on in Colorado and to learn about that.

With regards to this bill, I agree with Kelvin Davis. I grew up in an environment where I went to a low-decile school, and I agree that there would be some potential issues in low-decile areas with this bill as it is currently drafted. I think the intent of Sir Roger Douglas is admirable. He means well with this bill, but the reality is that there will be a lot of problems in some areas. We are not yet ready to take into account some of the measures that Sir Roger Douglas wants to adopt. That is not to say that I do not agree with some of the concepts behind what this bill could do. As I said, there is a lot of work to be done down the track. I point out the value of learning from international experience, particularly what Colorado is doing.

I will explain what is being done in Colorado. Effectively, the legislation will cut the bottom 5 percent of teachers and give their funding to the top 5 percent. The top 5 percent of teachers will be paid double the salary of an average-performing teacher. I am not saying that is the right way to go, but that is what one state in America is doing. It is putting a trial in place to see how that system operates, and it will be very interesting to see whether it works.

We should learn from examples of what works and does not work in terms of what Sir Roger Douglas is trying to achieve. I do not want New Zealand to be a test case for a policy like this bill, because there are some things that we are looking at. [Interruption] I will tell that member opposite about national standards. The school that my son goes to, and my daughter will start at in about a month’s time, performs very well.

Sue Moroney: Your son is a guinea pig.

AARON GILMORE: The students are doing very well, and the parents love the reports they are getting. Boys’ performance is one of the problems in New Zealand education, because they are underperforming relative to girls. Boys at the lower level are not performing.

I agree with Kelvin Davis that national standards in themselves will not lift achievement, but they will identify those students who are not doing well and need some help. That is a very positive thing. In some cases we know who those students are; in other cases we do not. The implementation of national standards will allow us to identify not only the students who are doing well but also the teachers who are doing well. The systems currently in place reward teachers who are not doing well, which is not necessarily the best way in the long run. I admire Sir Roger Douglas’ attempt to put in place a system that he thinks will deal with that problem. I do not think the bill will do what he wants it to do; there may be better ways to do that. There are other things that we are looking at in the education sector. The time will come when a policy like this will be in place. We can learn from overseas experience how to reward good teachers. We can learn from the experience of Colorado schools and other places around the world, but this bill as it is drafted will not achieve what Sir Roger Douglas wants. It will not achieve what the Government wants, either. That is a reason why National will vote against it.

In time we will realise that schools not having the ability to choose the good or bad teachers in this current environment will put too many restrictions on a bill like this. I agree with Kelvin Davis. One of the issues is that some schools do not have the ability to choose good teachers over bad teachers. Until we get those things right, until we have the right people becoming teachers, this bill will not be effective.

Hon Sir ROGER DOUGLAS (ACT) : I start by thanking the Māori Party for its support in relation to this bill. It is appreciated. The fact is that centralised management and funding of schools have put the Government in a wholly conflicted position, not only as provider but also as purchaser and regulator. It has resulted, whether or not we like it, in schools with poor teacher motivation, bored children, and falling standards while education spending has increased dramatically. I think everybody in this House agrees that good teachers are the most important factor in whether children benefit from school. Teachers determine whether children get quality education; much more than the curriculum, the class size, funding, computers, or the Internet. These are all secondary to having quality teachers.

One of the things that I learnt when I was doing the work as part of the working party on school choice was that it did not matter whether children went to a decile 1 school or a decile 10 school; the principals told us that more than anything else their desire was to train their own teachers. They wanted to train their own teachers because they felt that the quality of teachers who were coming out of the training school was not high enough, and they wanted to have pay flexibility so they could reward and retain the quality teachers.

There is evidence, whether or not we like it, of system failure in the education system. We have a system that is failing to teach the basics to children. We have a system that allows 20 percent of school-leavers to be functionally illiterate. We have a system that allows around 25 percent of school-leavers to be functionally innumerate. In South Auckland, this year, a decile 5 or 6 secondary school tested the maths of the 13-year-olds who were coming in. One of the sums was “subtract 27 from 36”, and 23 percent of them—one child in four—got it wrong.

If we claim that we have an education system that will set this country up for the future, we are very wrong. It also fails the disadvantaged children. We have a school system that discriminates against the least well-off, and particularly in the big cities. That does not need to be the case.

There is a well-documented case of a school in Australia, where 87 percent of the parents of the children attending the school were on a benefit. Those children were 20 percent behind the performance of the average Australian child. It was so bad that the Department of Education told the principal, John Fleming, to go and fix it. He could appoint whoever he wanted, and what have you. Seven years later that school had an average recording of 20 percent above the average in Australia. So do not tell me these kids cannot learn. They can learn if we give them the right environment. They can learn if we give them the right motivation. That principal of the school, where 87 percent of parents of the children attending were on a benefit, turned round the children’s performance from being 20 percent below the average to being 20 percent above. It can be done.

It is an absolute disgrace that we allow kids not to learn. I think the Māori Party and the leader of the Māori Party know that with some freedom, concentration, and motivation they can do it. I have seen it in Māori schools in New Zealand. A school out of Gisborne is doing a fantastic job, with the right teachers and motivation. But we want to have one system, and we will never have one system that fits all.

CARMEL SEPULONI (Labour) : I move, That the Employment Relations (Probationary Period Repeal) Amendment Bill be now read a first time. I say to my parliamentary colleagues that I seek their support for people who are being exploited in the workplace due to the National Government’s Employment Relations Amendment Act 2008.

I need to acknowledge many people. Let me start with Charles Chauvel and the important role he has played in drafting this bill. Malo ‘aupito my Tahitian brother Charles Chauvel. Secondly, I acknowledge our Labour team, who worked tirelessly in fighting for the rights of wage and salary earners. I particularly acknowledge our spokesperson on labour relations, the Hon Trevor Mallard, and our associate spokespersons on labour relations, Darien Fenton and Carol Beaumont. Thirdly, I acknowledge the ongoing work undertaken by all union members in their fight to protect the rights of workers and ensure that fairness is achieved and maintained in the workplace.

My bill seeks to repeal the 90-day trial period that the National Government introduced for new workers and businesses that employ fewer than 20 people. My bill will restore the relevant provisions of the Employment Relations Act to the pre-2008 application. We were vehemently opposed to the 90-day fire-at-will bill because it was an attack on workers’ rights, on fairness, and on decency, and it was an unnecessary move by the National Government. It has hindered rather than helped employment during the recession, and we are of the strong belief that it must be repealed as soon as possible before more damage is done.

With that in mind, what has caused outrage from us on this side of the House and from numerous members of the public is the Government’s recent announcements, one week after my bill was drawn from the ballot, that it would be looking to extend the provisions of its Act to apply to all workplaces of all sizes. This will be negative for all wage and salary earners, including those who change jobs.

Every year 700,000 Kiwis start a new job. That will be 700,000 workers whose employers can sack them without a reason and without a right of redress. There are no two ways about it. The 90-day trial legislation should not be extended; it should be done away with entirely. The 90-day fire-at-will bill that the National Government introduced in 2008 can only be described in the following four ways: exploitation of marginalised New Zealanders; arrogance towards ordinary working Kiwis; a corporate favour from that Government to its business mates; and disregard for fairness and the fundamental rights of wage and salary earners.

What needs to be highlighted is that prior to the Government’s 90-day fire-at-will bill trial periods were not unknown in employment contracts. Trial periods were about fair appraisals of a new employee’s capability to do the job. For employers, they mitigated some of the risks of employing new people, but the key element of those trial periods was fairness. Employees had a right to a fair appraisal. If they were dismissed, they had a right to know why. They also had the right to appeal the decision if they felt they were being unfairly dismissed. That was the situation before the National Government’s changes.

What happened next is that the Government decided that legislation for fair dismissal was not enough. It decided to legislate for unfair dismissal. This move was seen as so important to the National Government that it included it in its first 100 days of action programme. In hindsight, the National Government had no qualms about demonstrating its right-wing agenda from the get-go. By introducing the 90-day trial period, it put all the power in the hands of the employers and took away employees’ rights to appeal. It was nothing short of an attack on fairness, decency, and workers’ rights.

The National Government has taken the position that the 90-day legislation has been a boost for people on the margins of the workforce who need an employer to give them a chance in a new job. The National Government has tried to tell New Zealanders that the 90-day legislation encourages small businesses to give a prospective employee a go without fear of costly or protracted legal proceedings if the relationship does not work out. The National Government has touted this legislation as being a success, but let us look at the unemployment rates and gauge for ourselves how much of a success this legislation has been.

When the National Government took office in 2008 the unemployment rate for Māori was 8.3 percent. It is now 13.6 percent. When the National Government took office in 2008 the unemployment rate for Pasifika was 7.4 percent. It is now 13.3 percent. When the National Government took office in 2008 the unemployment rate for young people aged 15 to 19 was 17.9 percent. It is now 25.2 percent. The unemployment rate for 20 to 24-year-olds was 7.3 percent, and it is now 11.4 percent. The overall unemployment rate when National took office was 4.4 percent, and it is now 6.6 percent.

How can members of the National Government stand up in this Parliament and tell us and the rest of New Zealand that the 90-day bill has been a success? How can members of the National Government stand up in this Parliament and suggest that the provisions of its Act be extended even further? It has done nothing to alleviate the poverty imposed on an increasing number of New Zealand families. The provisions of the 90-day bill serve only to deny New Zealanders starting out in new jobs the dignity they deserve and the employment rights they should be automatically entitled to in this country.

Last month the Minister for Social Development and Employment cited a Department of Labour report on the 90-day trial period scheme as apparent proof that the original legislation was working as intended, but it noted that many employees hired under the scheme felt vulnerable to unfair treatment and job loss. Nearly a quarter of the workers employed under the scheme were sacked. Is this what the Government intended when it implemented the scheme? The report found some instances where trial periods appeared to have been misused by employers. Is this what the Government intended when it implemented the scheme? The report notes that it cannot be stated categorically that the scheme has created any extra job opportunities. So what does the Government do? It pushes on with the expansion of the scheme, despite the lack of any clear evidence that it is creating new jobs.

We know that the trial period scheme has been abused by some employers. There are many examples of that, including one recently in the Dominion Post about a woman named Alison Murray. We have been told time and time again by this Government that the 90-day trial is about giving people a chance, particularly those who are disadvantaged in the labour market. This includes young people, Māori and Pasifika, migrants, and people with disabilities or mental illness. This Government gives them chances by taking away their right to a fair go. The Government told us it would increase job opportunities for the most marginalised working-age New Zealanders. I ask this Government today where those job opportunities are. I cannot find them, the Department of Labour cannot find them, and the young, Māori, Pasifika, migrant, and disabled job seekers cannot find them either.

It is insulting that the National Government would patronise New Zealanders in search of employment by stating over and over again that the legislation is there to help them. The only people who are benefiting from the 90-day fire-at-will legislation are the National Party’s mates who own businesses and want to employ workers but do not want to have to adhere to the legislation.

Our workers are our greatest asset as a country. They deserve respect and job security. They do not deserve this prolonged attack on workers’ rights by the National Government. I ask all my parliamentary colleagues tonight to support my bill, which will see the National Government’s 90-day fire-at-will legislation repealed. Thank you.

DAVID BENNETT (National—Hamilton East) : We just heard from Labour about the Employment Relations (Probationary Period Repeal) Amendment Bill. Labour’s one reason for bringing this bill before this Parliament is unemployment rates. Unemployment rates are the responsibility of the previous Labour Government. That Labour Government put New Zealand into recession before the rest of the world. It destroyed this economy through its 9 years of mismanagement. If members want to talk to the people out there who do not have a job, they can tell them about what Labour did for 9 years that put them in that position. The previous Government did that. It destroyed this economy in our best times, it created a recession before the rest of the world, and it created the unemployment that New Zealanders live with. The National Government has been delivering jobs and trying to get this country out of recession. There would be a lot more unemployment if we had not done what we did in creating legislation like the 90-day bill.

Members of the previous Government want to go back to the days of the past, when they had the glory. Well, they did not have the glory, they did not use it properly, and the people of New Zealand suffer now because of what the previous Government put in place. The public of New Zealand made the choice in the last election, and that choice cannot be reversed through a member’s bill here tonight. It is a sad indictment of Labour that it has to use the member’s bill process to go back to the past, when it could be looking forward and looking to help New Zealanders. But, no, it wants to go back to the past and resurrect what it had before, under some kind of image of a past, fleeting party, rather than look forward and deliver what New Zealanders want and deliver the future they want. New Zealanders want that future.

Kelvin Davis: Why do you hate New Zealanders so much?

DAVID BENNETT: Labour members ask that, but they put this country in recession. Labour did it. Who was in Government when New Zealand went into recession? It was Labour. Was the rest of the world in recession then? No. The Labour Government put New Zealand into recession; that is where we got the unemployment from. The one reason Labour members are using for this bill—unemployment rates—is actually the one thing that Labour left as its legacy for the New Zealand economy. Labour left us with unemployment; we had to deal with it. Labour created the unemployment, and it cannot take this away with a member’s bill tonight. That is the reality of the situation and what this country has faced.

When we look at what we need to do as a forward-thinking, progressive Government, we see that we want to create an environment where people get the chance, the opportunity, and the ability to prove themselves. What more do young people want and what more do migrant communities want than to prove themselves and to get a step in the door? They want to be able to walk into those jobs and show that they can deliver the services where there may have been barriers put up against them in the past. That is what the 90-day bill did; it gave the opportunity for New Zealanders to get that first job. It gave the people whom Labour members talk about as being the most marginalised—the young, and those who do not have the experience—the chance to show their potential, prove their worth, and not have to go through the systems and structures that Labour deems to be appropriate.

That party over there wants to have its systems, because it believes that people are automatically entitled to have them. Those were the words of the previous speaker, Carmel Sepuloni—“automatically entitled” to having such things. Labour members look upon it as if there is an automatic entitlement, and as if they know what is best for New Zealanders. That is not right—New Zealanders can prove what is best for New Zealanders, and we are giving them that chance to get a job. We do not say who is automatically entitled to anything; we say people should be given the chance and they should prove themselves, make it work, and get the rewards. What more could a human being want than to be given a chance, to be given an opportunity, and to be given the ability to prove himself or herself—not to be seen as automatically entitled to something under some great plan that Labour had 9 years ago?

Labour members bring out the concepts of poverty—all of those great stories of poverty—and say that the 90-day bill created the poverty that many families encounter. That is a load of rubbish. The thing that created the poverty in this country is a Labour Government that wasted 9 years and that took away our best economic times and threw them down the drain. We are not going to do that. We are going to give people the chance, we are going to deliver them the opportunities, and we are going to make it worthwhile for them to take advantage of those opportunities.

This debate goes to the heart of the difference between the National Party and the Labour Party. This is the heart of the difference between a party that cares, that wants to give a future, and that wants to deliver prospects, and a party that thinks it knows best, that wants to tell people what is right, and that does not give anybody a chance. That is the point of difference between the Government and the Opposition. We are here to help to give an opportunity; Labour is there to take and direct. That is the whole political difference that this House represents, and this is a House that the public has made a decision on in terms of what it wants to see. The public wants to see opportunity, they want to give people a chance, and they want to see a 90-day bill. We campaigned on one, the public voted for it, and tonight we will see the public vote, through the parties in this House, to tell the Labour Party again—it took Labour 2 years to get the message, but it will get the message again tonight—that the public do not want to be told what they have to do; they actually want to be given the opportunity to prove themselves. That is the prime lesson that Labour should have learnt at the last election—which it did not—and now it is trying to reinvent the wheel and bring back things from the past and say it had the glory and the answers. But it does not, because Labour created the problems that led to the situation we are in today.

As we can see, National will not be supporting this legislation, because this bill is a movement back to the past. It does not reflect the energy and commitment of this Government. It does not reflect the ability and desire of New Zealanders, and it does not reflect what is in the modern world in terms of the way that employment relations are structured. If we look at most OECD countries, we see that they have longer probationary periods than this.

Hon David Cunliffe: The right to be dismissed at will.

DAVID BENNETT: I say to Mr Cunliffe that they have longer probationary periods. I ask Mr Cunliffe what he is saying.

Hon David Cunliffe: The right to be extorted by the unscrupulous.

DAVID BENNETT: Oh, let us put those lines on a billboard! It is no wonder that the member will never get the votes of middle New Zealand. Those are the longest words—

Hon David Cunliffe: Back to Dickens!

DAVID BENNETT: Oh, Charles Dickens—now we are getting the academic nature of the member coming out. That is why he will never be a success in New Zealand politics—he will never be Prime Minister. He will lead the Labour Party after the next election, but he will never be a Prime Minister, because he cannot relate to people. People do not want to hear about Charles Dickens; we have moved on from those days. The days of Charles Dickens were when the Labour Party was the great instructor of what could be done. We have moved on. We want to give people the chance; we do not want to put them in forced labour as the Labour Party would, when Charles Dickens was in control. No, National believes in our people, we believe in their future, and we want to give them—

Carmel Sepuloni: What is he talking about? How did Charles Dickens come into this argument?

DAVID BENNETT: That is the member promoting the bill. What is she talking about? She has come into this House promoting a bill—

Hon Pansy Wong: It must be Andrew Little.

DAVID BENNETT: Yes, it must be Andrew Little texting those members. In reality, this is not a time to go back to the past; this is a time when we can build a future. One of the big parts of building that future was the 90-day bill. It has been shown to be successful. It has given people an opportunity. It is something that we should enhance and deliver upon, not take back. Why would another political party want to hold New Zealanders back by saying that it could determine the rules? We do not think it is appropriate to hold our people back. We think that there is a future for our people, and that future will allow people to prove themselves and to give that opportunity so that they can get a job and then take their lives forward in a constructive way, rather than being told that this is what they are automatically, or not automatically, entitled to, as the case may be under Labour.

The ASSISTANT SPEAKER (Hon Rick Barker): Before I call the next speaker, I say that the next speeches from here on will be 5 minutes’ duration. I will give a bell at the 4-minute mark.

Hon TREVOR MALLARD (Labour—Hutt South) : I think it is fair to say that Mr Macindoe started off in a fairly spirited way, but the further away he got from lunchtime the less spirited he was.

Hon Tau Henare: I raise a point of order, Mr Speaker. When we are talking about people in the House, we have to use their correct names.

The ASSISTANT SPEAKER (Hon Rick Barker): I must admit that I was a bit confused. I think the member said “Mr Macindoe”, when the previous speaker was Mr Bennett. I was trying to figure it out myself. The Hon Tau Henare makes a point, and I am sure we will get this corrected—[Interruption] When the Speaker is speaking, we will not have a babble—

Hon David Cunliffe: Or a rabble.

The ASSISTANT SPEAKER (Hon Rick Barker): Or a rabble. If there is one more comment, I should make members stay here until midnight as a suitable punishment, rather than sending them home early.

Hon TREVOR MALLARD: I apologise to the members for Hamilton; they are all forgettable these days. This bill is about people having the right to have a reason when they get the sack as to why they got the sack. That is what it is about. It is pretty simple: one should be allowed to have a reason—

Hon Tau Henare: They do.

Hon TREVOR MALLARD: No, no; the member should not believe the Prime Minister. The Prime Minister overturned the Acts Interpretation Act. It is very, very clear in New Zealand law that the specific overrides the general. Under the 90-day legislation people are specifically taken out of the requirement for reasons to be given, and any general good-faith arrangement cannot override that. One does not have to be a very good lawyer to work that out. I would have thought a briefing to a Prime Minister would work that out. The facts are very, very clear: the 90-day legislation is designed so employers can fire without giving a reason. Most Kiwis do not think that is fair. Most Kiwis think that if one is getting the sack, it does not matter if that person has been employed for 5 minutes, 89 days, or 50 years, that person should be allowed to have a reason for getting the sack. This legislation stops that occurring.

This is part of a general package. Some of my colleagues say that there is no plan, but I actually disagree. There may be no plan to catch up with Australia on wages and salaries—I agree with that—but there is a plan: to drive down wages and salaries in New Zealand. This is part of that plan. This is part of the plan to deskill our economy and to have a lower-wage economy. That is something National has always believed in. It does not care about lower incomes. I apologise to the member Tim Macindoe. Getting him mixed up with the member David Bennett is a bit rough. There are some other arrangements. This is clearly very bad for vulnerable people.

Tau Henare has been one of this bill’s biggest supporters, but over the last 24 hours we have seen his innovative solution to low incomes for Māori. What is it? That they should shack up with rich Pākehā. That is what he said: if Māori do not have enough money, they should find rich honkies and live with them. That is the Henare approach to getting Māori incomes higher in New Zealand. He does not want them to have jobs and he does not think people should earn their money; he thinks poor Māori should find rich honkies and shack up with them.

Hon Tau Henare: Why not?

Hon TREVOR MALLARD: If that is National’s approach to improving Māori skills and Māori unemployment these days, I think it is very, very sad.

I must say that National is consistent. It is consistent with this legislation, which undervalues people who earn salaries and wages. It undervalues skills, it discourages skills, and it discourages capital investment. It accelerates the approach to the bottom, which is what National wants. It wants us to have a lower-skilled economy, and it does not care about the rights that it is taking away from people as that occurs. National quite likes this. It has been going very well from its perspective. National has depressed wages—it has been successful from its point of view—and stopped people going to good jobs. That is the approach that National wants, and we are absolutely opposed to it.

Hon TAU HENARE (National) : I say to my colleague Mr Trevor Mallard that somebody had to help the Europeans out, to add a bit of colour to the race. Instead of being colonised, we did the colonising.

I am happy to join the debate. Forty-five smoke-free days ago I had what they call a cardiac event. While I was having this cardiac event, I was wondering to myself whether, if I was looking for a job under the Labour regime and I had had a heart attack—or a cardiac event, as they are wont to call it these days—I would have been successful. No. Under the Labour regime, not one employer would have given me a trial. Not one employer would have given me a go. Do members know why? It is not because I could not do the job, because I could not learn the job, because I would be a health risk, or because I might fall down dead. It would have been because of the risk to the employer of something going wrong—one of the things I have just mentioned—or something happening. The employer would have worn it.

It is not the job of the employer to make workers drink after leading them to the pond; it is for the employer to make sure that the risks are spread evenly, and actually giving the person an opportunity to show his or her wares is the best thing. It is not up to the employer to pay for the worker’s health risks after the worker has had a cardiac event. It is certainly not the employer’s job to risk the consequences of having the worker drop dead on the job after he or she has had a cardiac event away from the employment.

Trial periods have been around for donkey’s years. Even in my time there was the national awards system. Most of those members across the way would have had their union experience under the national awards system. They had trial periods, some of 2 months, some of 3 months, and some in the national awards system had a 6-month trial system, where the employer could trial a person and that person was given 6 months to learn the ropes of the job. The employee could bail out at any time that he or she wanted to.

Trial periods are good things. Trial periods spread the risk right across the board. If I think about the cardiac event—

Dr Rajen Prasad: Probation’s not the problem.

Hon TAU HENARE: Well, what is the problem? Oh, I know what the problem really is. It is that the Labour Party does not have a single thing to go to war on.

Darien Fenton: We have now.

Hon TAU HENARE: Who gives a hoot about what those members have now? It is just like what I said in the House yesterday to the Hon Maryan Street—two words—“Who cares?”. I tell members what, the worker who is looking for a job and who wants the opportunity to show his or her wares does not care what the Labour Party is on about. Those workers care about having the opportunity. Once Carmel Sepuloni finds her way around the new metropolis of Waitakere, she will understand that the young workers out there—the workers whom she thinks she represents; Māori, Pasifika, and all the other people—will love this, because they will be able to have the opportunity to show their wares.

DAVID GARRETT (ACT) : I raise a point of order, Mr Speaker. I have noticed that the Hon Pete Hodgson is in the House without a tie. I raise this point not to castigate the honourable member. If I could just be heard on this—

Mr DEPUTY SPEAKER: I thank the member. The member is correct. I say to the member that standard business attire is what is required, which includes a tie.

DAVID GARRETT: Mr Deputy Speaker, I had not actually finished my point of order, I—

Mr DEPUTY SPEAKER: I knew what the—

DAVID GARRETT: With respect, Mr Deputy Speaker, you do not. I thought that Mr Hodgson may in fact be testing the boundaries, because I have consulted the Speakers’ Rulings and indeed, as you say, Mr Deputy Speaker, Speaker’s ruling 16/8 states that “The Speaker will take issue with any member who is not dressed in appropriate business attire,”. I think there is actually a very good case to be made that these silly things that men are required to wear traditionally are no more. I say that because my legal colleagues at large law firms now routinely do not wear them—

Mr DEPUTY SPEAKER: I thank the member for that very enlightening example of what ties are about, but I have ruled. The member has brought the issue to my attention; I thank him for that. We will move on with the debate.

KEITH LOCKE (Green) : Mr Garrett has a point. We should be moving to a broader dress code. Perhaps, as a transition, we could have a 90-day probationary period where people wear ties, and then after that they can go without ties. In reply to Tau Henare’s comments, I say that the question is not whether we have trial periods or probationary periods; it is a question of what type we have. The type that Tau Henare referred to in the past was the type—

Hon Tau Henare: I raise a point of order, Mr Speaker. We have just come out of Māori Language Week, and I would not mind if my name was pronounced Tau “Hen-a-re”, not “Hen-ah-ree”.

Mr DEPUTY SPEAKER: Thank you for that. I ask members, when referring to other members, to try to get the correct pronunciation.

KEITH LOCKE: My point was that Tau Henare’s position was similar to what the Greens and Labour have been arguing. In the past there have been—and even currently there are—some probationary periods that are fair ones, where after a certain period an employee can transfer to permanent employment. If that employee is not transferred, there are appeal procedures and the unions can be involved, etc., as they were in the days past that Tau Henare referred to.

What are the Government’s arguments in favour of keeping this 90-day period? The first is that somehow more people are hired, when in fact the research on the legislation since its introduction, provided by the Department of Labour, says that it could not be stated categorically that trial periods had created extra job opportunities. That is common sense, really, because employers hire according to need; they do not go down the track of scratching their heads for 10 minutes about the quality of employees.

Secondly, the Government argues that more young people will get jobs in this way too. It is true that young people often have fewer CVs and find it more difficult in the job market. David Bennett went on about the fact that that was what the bill was all about, and that the present legislation was giving workers a chance. In fact, the situation with fair probationary periods that exists now in certain industries, and that existed in the past before the current legislation came in, does allow young people to have a go. In fact, when there is an unfair probationary period where the employer has the arbitrary right to fire at any time without any reason, there is a charter for bullying, in effect. The employer does not need to provide any care for employees, because employees can be sent down the road at any stage. Carmel Sepuloni mentioned the case in the Dominion Post of Alison Murray, who got a job as an art valuer for Dunbar Sloane. She was not even given a desk to work at, and later on was just fired arbitrarily.

This legislation is also a charter for a greater level of sexual harassment in the workforce, if the employer has arbitrary power over a new worker for 90 days. It is also a charter for dividing the workforce between those who are established and perhaps in the union, and new employees who will not dare to join the union, because a lot of employers are anti-union and would sack the person if they showed a great interest in joining the union. So the legislation will divide the workforce, and that is bad for morale. It is much better to have a united workforce. In fact, a unionised workforce, in my experience, is the most confident and productive workforce, particularly if it has a good relationship with its employer.

Kate Wilkinson, the Minister of Labour, said not to worry about all that, because employers would act in good faith. Well, we just cannot operate on that basis, and we have plenty of examples where employers have not acted in good faith in that respect. If we generalise the 90-day period, as the Government says it is intending to do, that will have a lot of ramifications for the workforce. It will make workers much more reluctant to shift jobs because they will not be certain that they will not be sacked in the first 90 days. Migrants will be more reluctant to come to this country, because they could come here and then their jobs could go down the drain overnight. So I think this bill should be passed because it will reverse a very bad piece of legislation from the National Government.

DAVID GARRETT (ACT) : The ACT Party has a particular interest in the Employment Relations (Probationary Period Repeal) Amendment Bill, as, indeed, I have personally. Not only was the Employment Relations Amendment Bill 2008 one of the first things we considered when I came into the House, but we managed to put forward a Supplementary Order Paper to enact the legislation a month early. So I followed the issue with great interest.

Back in December 2008 it was very interesting to hear the hyperbole that I have now learnt is typical of the Greens: the sky is always falling in, the world is going to end tomorrow, and global warming is going to get out of hand uncontrollably by next Thursday. But on this occasion we heard the hyperbole from Labour. We heard about the roll of shame. I will allow a little pause, because when Carmel Sepuloni began her impassioned speech I interjected on her a couple of times and asked her to read out the roll of shame. I very much doubt that she did not hear me. Is she not familiar with the roll of shame? Members will recall that when the matter was being discussed back in December we heard about a roll of shame. It was going to be a regularly updated list of bad employers who employed people, sacked them after a week, hired others, and then sacked them. I listened with great interest, because I could not actually believe that the roll of shame would ever contain any names.

So in the last year or so, when the matter of employment law has come up in the House in a number of contexts, I have interjected across the House and asked for the roll of shame to be read. When I have done that, Labour members have always managed to find their papers very interesting. So the roll of shame, I tell Ms Sepuloni, is the list of bad employers who constantly sack people. I ask whether she would now like to read out that roll of shame.

Carmel Sepuloni: I started it: David Garrett—

DAVID GARRETT: That is it, is it?

Carmel Sepuloni: —John Key. I can keep going; I have about 60 of them—

DAVID GARRETT: Neither of us are employers, so that is interesting. The roll of shame, as I thought, is empty. There are no names on it, because in the real world employers have better things to do. They have better things to do than go through a lengthy process of hiring, training, and getting people acculturated into their workforce. They do not want to be sacking people all the time.

It is very interesting that we heard from members on that side of the Chamber that this bill was designed to “support National’s mates”—I think they said “rich mates” as well—which completely overlooks the fact that the majority of employees in this country are employed by small and medium sized businesses. Eighty percent of them are employed by small and medium sized businesses. So it is a very interesting but sad admission that those employers, those small and medium sized tradesmen and tradeswomen, are all considered to be National’s mates.

The reality is that the roll of shame has no names on it. Labour managed to find a few bedraggled employees—sorry, I mean workers, in Labour “union speak”—but I noticed that the chaps and “chap-esses” down at my local, who are actually mostly Labour voters, said that they would not employ those employees either. Out in the real world, many people do not even have written employment contracts; they just get on with it. We heard Ms Sepuloni and others say that there are many examples of employment trial periods being misused. Well, in this House the Hon Ruth Dyson regularly comes in and reads out quite heart-rending and upsetting examples—who knows whether they are real—of people who have allegedly suffered from having their home help taken off them, etc. So I would have thought that if a large number, or even a small number, of workers have truly been treated badly by employers, who should be on the roll of shame, then we would hear about it. But we have not. That is because out in the real world people have better things to do.

I close by saying that I was disappointed when Mrs Turia told me just a moment ago that she was unable to support the bill because one of the selling points was that it was intended to get more Māori and Pacific Island people into the workforce and apparently that has not happened. That is very unfortunate.

Again, it was surprising to learn that 90 days is actually a very short trial period and that the UK Labour Government for 15 years or more has had probationary periods of 12 months. Thank you.

Hon TARIANA TURIA (Co-Leader—Māori Party) : Tēnā koe, Mr Deputy Speaker. Firstly, I congratulate Carmel Sepuloni on introducing this Employment Relations (Probationary Period Repeal) Amendment Bill to restore the relevant provisions of the Employment Relations Act 2002 and, in doing so, to overturn the legislative measures that would allow workers to be fired at will in the first 90 days of their employment.

In doing so, I am particularly conscious of the statistics that come across my desk on a regular basis telling me of some 21,000 Māori job seekers and 7,000 Pasifika job seekers. Of that number, roughly a third of them fall into the youth category, so they are under 24 years of age. It is those rangatahi in particular who drive us to support this bill.

We were told, and we have heard it again tonight, that the 90-day scheme would result in employment opportunity for youth to prove themselves—a chance to prove their worth. Well, what happened? What we know too well is that Māori and Pacific youth under 24 are struggling to get into the workplace, and they will be vulnerable to some unscrupulous employers who exploit the subsidy scheme.

The Māori Party voted against the 2008 Employment Relations Amendment Bill, which was passed under urgency and without going through a select committee process. Like other speakers, we want to scrutinise claims that there is evidence that the 90-day scheme has created outcomes that demonstrate employers are giving more opportunities to young people. I agree—I actually do agree—that the majority of employers are unlikely to want a revolving door of employees, but the problem for our young people is that they cannot even get through the door.

I read a disturbing result from a recent study entitled Young(er) People’s Conceptualisations of the World of Work: A Qualitative Study. The sample chosen for the Māori component of the research was drawn from an existing longitudinal study of Māori households called The Best Outcomes for Maori: Te Hoe Nuku Roa. It gave some very clear warnings about the fragile state of many of our young people embarking upon the workforce. The study revealed the tendency of a number of participants to consider themselves solely responsible for their success or failure both in study and in the labour market. In other words, they blame themselves for not being able to sustain long-term, secure employment. In doing so, they seal off their future; believing that their options are limited and that they will not go there again. The cost of failure to the State and to the whānau is huge.

The workplace environment is a more complex world than one which many members of this House would ever have known. Amongst the inevitable challenge of standing up to apply again for job opportunities, recent international studies highlight the fact that the transition from school that young people are experiencing today are increasingly becoming less predictable and more complex than the school-to-work transitions of the past.

But some pervasive issues still impact on the opportunities for young Māori people to succeed in employment options, not the least being the institutionalised racism that exists. The question we have to ask of the Government is how the 90-day probationary period will overcome that which Māori call the brown barrier—a phenomenon of systemic bias against employment and promotion of young Māori in the job market.

It is a core feature of Māori Party employment policy that we support the right to be treated fairly and with dignity in the workplace. We want to do everything we can to enhance the chance of success for our young and for young Pasifika peoples, as well. So we will be supporting this bill at its first reading. Kia ora.

DARIEN FENTON (Labour) : First of all, I congratulate my colleague Carmel Sepuloni on having the Employment Relations (Probationary Period Repeal) Amendment Bill drawn in the ballot. I think it is very timely, given the Prime Minister’s announcement at the National Party conference that the Government will be extending the 90-day trial period to all workers throughout New Zealand. It is interesting to look at the justification he used for that at the National Party conference. The deliberately delayed Department of Labour research report on the current 90-day trial provision was used by the Prime Minister to justify the move to extend it to all wage and salary earners.

First of all, what I will say about that report is that it was extremely unbalanced. As part of that report, 3,532 employers were contacted, but only 13 employees were contacted. How unfair is that? That kind of methodology will not uncover the real impact of the 90-day trial law. But even with that imbalance, the report provided some really interesting evidence—well, a lack of evidence, actually—to back up the Prime Minister’s claim that this provision should be extended to all workplaces. I will address a couple of issues.

My colleague Carmel Sepuloni has addressed the issue of the claim that the provision will provide jobs for disadvantaged people. Well, we know from the report that 72 percent of the people who got jobs under the 90-day trial period were Pākehā. The number who were Māori and Pasifika was very, very small, and employers said that very few of them used the provisions to hire workers whom they may not have hired otherwise. Employers were more focused on hiring the most suitable candidate. The Minister of Labour and the Prime Minister keep saying that the 90-day trial period can be entered into only by written agreement.

I spoke to someone today, and her name is Tyla Howard. She is 24. She got a job in an Auckland laundromat. After some months she was laid off, then she was re-employed a few months later. As is the situation with so many other workers, there was no written agreement—and the report shows that even though the law requires a written agreement, so few employers bother with that—and nothing was said about the 90-day period. In fact, in her case, she should not have been on a 90-day period because she was re-employed. The law states that the employer cannot do that, but she was re-employed under National’s fire-at-will Act. Anyway, she turned up to work one day and was told that she was being let go—do not come Monday. She was being let go, and it was because of the 90-day trial period. Tyla did not even know she was on a trial. She had not heard anything about it. She should not have been on a trial, because the law states that she should not have been, but this law has given employers the impression that they can use the 90-day trial period with impunity—with impunity.

Another worker I heard from in the last 2 days is a woman called Lauretta. She said in her email: “I am one of the people that was on the 90-day trial period. The 90 days came up and I got a phone call from someone ringing up about my job advertised in the paper.” It was advertised in the paper! She said: “I went to my boss and asked him what was going on, as I didn’t even know my job was coming to an end. He told me I didn’t have enough experience, which he knew when he employed me. Now I am unemployed, desperately looking for work.” The Government’s own report, which it delayed quite deliberately until the National Party conference as a means to try to justify extending this provision to all workplaces, shows categorically—

Hon Dr Nick Smith: Tell us the company’s name. Did you make it up?

DARIEN FENTON: I am happy to provide the evidence. I ask whether the member is saying that my word is not what I am saying in this House.

Hon Dr Nick Smith: I’m saying you should name the company.

DARIEN FENTON: I am happy to name the company and I will name the company. I am happy to provide that evidence, and I have many, many more examples, which I am happy to use in the next couple of days.

In summary, National’s own report, exposed by the Department of Labour, shows that employers have been using this law as a means of employing people and avoiding their responsibilities, rather than as a means of creating jobs. The law has not created jobs for disadvantaged workers, and certainly there are many, many instances in that report, if members care to read it, of employers not even following the very, very lightweight requirements that are already in the law—for example, the requirement to have something written down in an agreement.

MICHAEL WOODHOUSE (National) : There is a great scene in the Monty Python movie Life of Brian. It starts—do members remember—with the question: “What have the Romans ever done for us?”. A few things are named—the aqueducts, sanitation, roads, irrigation, medicine, wine, and public baths—but the question is asked: “What have the Romans ever done for us?”. That is pretty much what we have heard from the Labour Opposition members, with all these questions about the Government and whether there is a plan; they cannot see the wood from the trees. The list is so long that I do not have time to go through it. Those members are either asleep at the wheel, or they truly believe there is one big lever that we can pull. In fact they would believe that, because they spent 9 years pulling two large levers: tax and spend.

But we know that there is not a big lever to pull; it is about things like cycleways, oil and gas exploration, lower taxes, increasing free-trade agreements, and it is certainly about moderate changes to our labour laws. One would think that every worker had been chained up and sent to the salt mines, when very moderate changes were announced, such was the over-the-top reaction from our friends on the left.

But amongst the din of disgust there was one voice of left-wing reason. That voice said: “I don’t have huge objections to these changes affecting the fourth week of a holiday, as long as the decision is freely arrived at by the worker and the worker is not pressured into it. If somebody chooses to do that, I am quite relaxed about it.” Who said that? It was the Leader of the Opposition, Phil Goff—a lone voice of reason, while the rest of the Labour Opposition were so happy to jump on the bandwagon and flog what were very moderate proposed changes. They said, when the 90-day legislation came in, that they would name and shame. They have had opportunity after opportunity. Miss Fenton told us terribly sad stories, but not a single workplace has been named by a single member of the Opposition.

I want members of the Opposition to take a call to say why they think so little of the workers of New Zealand, why they cannot be trusted to make up their own minds about trading in the fourth week of their holiday, or why they do not want to give workers a chance—the marginalised workers, the immigrants who are saying “give us a go”—because that is what the flexibility of the 90-day probation period gives us. Better still, why do Labour members not dust off their bus? Do members remember the bus that had “Axe the Tax” written on it—the tax that they would not commit to axing? Why do they not get the bus out, get out their guitars and sing their “Ging Gang Goolie” songs all the way to the vineyards of Marlborough, the electrical companies of Christchurch, the salmon farms of the Mackenzie, and the biotech companies in Dunedin, and say why they are so down on employees? Why will they not give hard-working workers a chance to say “give me a go”? Better still, they could take the bus all the way to Tīwai, to the aluminium smelter, and tell the 725 workers there, who are not members of the union, who contribute hundreds of millions of dollars into the Southland economy, whose workplace health and safety record is as good as it gets in that industry, and whose electricity is almost entirely renewable, why they are so down on employees.

There is a plan. It is about having flexible labour law, it is about less regulation, and it is about enabling employees to enjoy tax cuts that leave 82c in every dollar in the pockets of 73 percent of workers.

Darien Fenton: What’s the plan?

MICHAEL WOODHOUSE: Can members hear them; they are still asking “What’s the plan? Where’s the plan?”. They are too busy yelling, and nobody is listening. It is about those things. It is about lots of little things, and it is definitely about giving employees a chance to be flexible—a chance that is given in 29 out of 30 countries in the OECD, many of which are run by left-wing Governments. I think that is not a bad model to follow.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) : I want to know what the plan is for young people. What is this Government’s plan to get young people into employment? On this side of the House we know that over 60,000 young people are currently unemployed, but what is the Government going to do about it? Nothing! National members have said absolutely nothing about how they will generate employment opportunities in our communities so that those 60,000-plus young people can get a job and keep a job—that is, real jobs, real wages, and our young people being looked after. That is why I want to speak to this particular bill. If the 90-day probationary period is the solution that the National Government has to get young people into employment, then I can say now, and I am supported by the Māori Party, that it is not working for Māori young people and it is not working for Pacific young people. For the 60,000-plus young people who are currently unemployed, this bill has not made one iota of a difference.

Meanwhile, members on the other side of the House continue to say that this bill will be fantastic because it is a probationary opportunity to give a young person a go. Well, the statistics speak for themselves. This is not about naming and shaming; this is about saying “Look at the statistics; they speak for themselves”. Over 60,000 young people are currently unemployed and they are not helped by the 90-day probationary period bill, so this bill that Carmel Sepuloni has brought forward to get rid of the 90-day probationary period bill signals a clear message. That is why Labour is supporting it. It reaffirms our values that workers should be given a fair go when they are given a job. They should not be able to be fired at will for no reason.

I ask members to put themselves in the shoes of young people getting a job, their first job. They are excited; they are keen to do something—anything. They have an opportunity, they get into the workplace, they get tasks to do and their supervisors say that those are the tasks for the day. The young people do the jobs to the best of their ability but, hello, at the end of the day their supervisors are unhappy. The supervisors have not thought for one minute that they were unclear on the instructions that they gave to such young people. When a supervisor relays information back to the boss, who is worried about only time frames and bottom lines, the next day the young person is called and told not to bother going back because the company has too much work to do. Under the current law, which this Government is promoting as being popular for young people, those young people can be fired without any reason whatsoever, and got rid of.

How would those young people feel? They would feel rejected, dejected, and, most of all, unconfident about their future job prospects. They would have nothing on their CV. Getting released from their first jobs for no reason at all leaves them nothing on their CV, so what are their future job prospects?

One member on the opposite side of the House decided to accuse Carmel Sepuloni of not knowing anything about her electorate. But Carmel knows that in the places where young people work—McDonald’s, Burger King, supermarkets, movie theatres, and such places—they are really afraid of the type of legislation that might hurt their opportunity to keep a real job. If young people got jobs today, wanted to campaign to increase the minimum wage, and went out on a limb to say “Well, actually, the work that we do should be valued, and paid as such.”—that is, if those young people campaigned to increase the minimum youth wage—their boss could get rid of them. Is that fair?

Under National’s labour market legislation that situation would be absolutely within the realm of possibility, but under Labour we say no. Workers deserve a fair go, they deserve to be protected in the workplace, and they deserve to be given a fair go. If they are released from work they should be given the opportunity to know why. That is why we are supporting this particular bill.

I just cannot believe that the member for Hamilton East stood up in this House to promote a bill that will have impact on those young people who work in Countdown in Hamilton East, and in the Warehouse in Hamilton East, saying that the legislation will create more opportunities. In fact, there are far more young people looking for work than there are jobs available, yet the member for Hamilton East is continuing to promote that bill. He needs to get in contact with real people on the ground, because young people want to know what the National Government’s plan is to create growth so that young people can be employed—so that they can keep their jobs, get paid a real wage, and, more important, ensure that their future job prospects will continue to grow from further opportunities and not be cut off at the post by the 90-day probationary period bill.

CARMEL SEPULONI (Labour) : What New Zealanders need at the moment is a Government committed to growing our economy and creating decent jobs, a Government with a plan, and a Government that will invest in people. The National Government has failed to deliver on all of those fronts. That Government has no commitment to growing our economy, it has no commitment to creating decent jobs for Kiwis, it has no plan for our country, and it has no desire to invest in New Zealanders. We have heard a number of speeches—predictable, but still disappointing, speeches—from the other side of the House, and I will touch on some of the stuff that has been said tonight.

Mr David Bennett said that New Zealanders should not be automatically entitled to rights in the workplace. He has challenged my assertion that they should be entitled to those rights automatically. I say to Mr Bennett that I am sure that the electorate of Hamilton East would side with my assertions and disagree with what he has said. Let us get straight to the point. This bill is about giving New Zealand wage and salary earners the right to a reason if they are dismissed from their jobs. When 700,000 Kiwis start new jobs each year, that National Government is looking to extend the provision of the 90-day, fire at will bill to apply to each and every one of those 700,000 wage and salary earners who will begin a new job in the next year. I have no doubt that each and every one of those 700,000 workers would be opposed to their rights being removed by that Government. They would oppose the National Government’s corporate favours to its mates, they would oppose being exploited by that Government, they would oppose the arrogance that is being expressed by that side of the House to ordinary working New Zealanders, and they would oppose the complete and utter disregard for fairness and the fundamental rights of wage and salary earners.

Another speech that we had to endure tonight that I want to mention came from Mr David Garrett from the ACT Party. He talked proudly about the fact that National and ACT supported this bill when it came to the House not long after that Government first took office. He talked about something called the “roll of shame”, but the only roll of shame that I know of is the roll of shameful politicians who supported this bill when it first came to the House in 2008. That list includes each and every one of those ACT and National members, including the ones who sit there tonight whom I could name but that would be a waste of my good time with regard to this speech.

Over the last week, we have heard where the priorities of the National Government lie. They lie with such trivial things as the Prime Minister sending a letter to the Queen trying to get the title of “Right Honourable”. That is where the priority of that side of the House lies. Never mind the workers. Never mind the fact that they have been denied their rights. Never mind the fact that the Government side of the House is trying to take away the dignity that each and every New Zealand wage and salary earner should automatically—

David Bennett: Rubbish!

CARMEL SEPULONI: Yes, I say to Mr Bennett, they should automatically be entitled to that dignity. Instead, the Prime Minister concentrated on his title of “Right Honourable”. Obviously, the National Government’s priorities are in the absolutely wrong place. That side of the House fails to recognise that each and every worker in this country, whether on the minimum wage or a higher income, deserves to be treated fairly in the workplace. Each and every one of them is an asset to this country. Each and every one of them deserves respect. Each and every New Zealander deserves job security. They do not deserve what they are getting from the Government side of the House.

Mr DEPUTY SPEAKER: I am sorry to interrupt the member. The cross dialogue here in unacceptable. Keep the noise down. We have a member who has a very short time to go to finish her speech.

CARMEL SEPULONI: New Zealanders do not deserve a prolonged attack on workers’ rights by the National Government. The Employment Relations (Probationary Period Repeal) Amendment Bill seeks to repeal the 90-day trial period that the National Government introduced for new workers and businesses and is looking to extend. We want to repeal the bill, which the Government introduced, to stop the damage being inflicted on New Zealanders. I ask all of my parliamentary colleagues tonight to support my bill, which will see the National Government’s 90-day, fire at will bill repealed.