Hon NATHAN GUY (Minister of Internal Affairs) on behalf of the Minister of Immigration: I move, That the Immigration Bill be now read a third time. The review of the current Immigration Act started in late 2004. Now in 2009 the new Immigration Bill is having its third reading today. It is not a bad thing that the history of this bill has been lengthy. There has been extensive public consultation, which shows the importance of getting this legislation right. It has also been the opportunity for this Government to make some key changes to the bill. I thank the hard-working officials, the Transport and Industrial Relations Committee, and my parliamentary colleagues right across the House. I also acknowledge the contributions that previous Ministers of Immigration have made.

The aim of the Immigration Act review was to modernise and future-proof our immigration legislation. The future is upon us, and this bill has never been more important. It is vital that we have legislation that allows us to protect the security of New Zealand’s border and the integrity of our immigration system. We must also manage immigration in a fair and balanced way. This bill allows us to do all of those things.

One of the reasons that the Government’s aim to create a world-class immigration system is so important is the essential contribution that immigration makes to New Zealand. Consider, for instance, the fact that between 2001 and 2006, 60 percent of New Zealand’s workforce were migrants. In the crucial age group between 25 to 34 years, all of the growth came from migrants. In 2005-06 migrants contributed an amazing 68 percent more in taxes than they received in benefits and services, a net financial contribution from our migrant population of about $3.3 billion. Immigration also plays an invaluable part in the success of our tourism industry and the export education industry. Along with the economic contribution that immigration makes, a world-class immigration system is also important to the Government’s goal of bringing expat New Zealanders home. We want to make it easy for them to come home and to bring their families with them.

The current Immigration Act was written before the New Zealand Bill of Rights Act. It contains a number of provisions that may be inconsistent with that Act. For example, the current Immigration Act has a provision that enables forced inoculation. That provision has not been carried over into this bill.

The Government was concerned about the practical implications of a recent Supreme Court decision that required a complex humanitarian test to be applied by immigration officers at the final point of removing an overstayer. That is why the Government’s Supplementary Order Paper 32 included amendments to the Immigration Act 1987 in relation to the cancellation of a removal order, and to the provisions in the bill relating to the cancellation of a deportation order. There is a formal process that allows most overstayers to lodge a humanitarian appeal within 42 days of becoming overstayers if there is good reason they should not leave New Zealand. The time for overstayers to raise concerns is not at the last minute before they board the plane. Expecting an immigration officer to apply a complex legal case at that time is just not practical. However, immigration officers will still take account of New Zealand’s recent relevant international obligations when executing removal or deportation orders, if an overstayer gives information relevant to those obligations to the officers. The amendments to the bill have made this clear.

Immigration legislation will always create debate. It is about people. But we must always remember that the Government’s decisions about immigration are made in the best interests of New Zealand and our people. Balanced with the sovereign right of the New Zealand Government to make immigration decisions, the bill clearly and closely prescribes the rights of foreign nationals. For those who do the right thing, the compliance aspects of the bill should not be of concern. However, to address the circumstances where people do the wrong thing and seek to abuse our openness and generosity, the provisions are necessary.

For example, there has been some discussion in the House around the use of biometric information. Most people have nothing to fear about the use of biometrics, as that information should actually facilitate quicker and easier interaction with the immigration system. The bill contains robust safeguards for the collection, storage, and use of biometrics. On the other hand, for those who seek to abuse the system, we know that paper-based identity documents are inadequate to manage risk. The use of biometric information should help us identify those who seek to commit identity fraud. The use of biometric information is regarded as being essential to a modern immigration system.

There are several other positive changes to the current legislation that I would like to highlight today. The bill’s purpose is to manage immigration in a way that balances the national interest, as determined by the Crown, and the rights of individuals. This statement strikes at the heart of what I have been talking about in the House today. The bill establishes a universal visa system that maintains flexibility in managing people’s travel to New Zealand and to stay here. It removes the distinctions between the categories of visa, permit, and exemption, and uses the single term “visa”. This change will make life easier for migrants to New Zealand, as “visa” is widely accepted and understood by them. The bill introduces a new concept in allowing interim visas to be granted for the purpose of maintaining the lawful status of foreign nationals when they have applied for a further visa and their application is being considered. This indeed is a very positive change.

The bill creates a streamlined deportation process that balances efficiency with fairness. In most cases the bill allows foreign nationals to remain lawfully in New Zealand and continue to work or study if they are permitted to do so if they appeal. The bill allows for liability for deportation to be cancelled or suspended at the discretion of the Minister, and suspended on appeal by the tribunal. A suspension may be used to put foreign nationals who are liable for deportation on a form of good behaviour bond. The bill creates a new independent appeals body, the Immigration and Protection Tribunal, to replace the four existing appeals bodies. It essentially maintains the existing rights to appeal, but creates a more streamlined appeals process.

A huge number of people have made contributions to this bill. That is why I am comfortable in saying that it is a bill for all of New Zealand. On behalf of the Minister of Immigration, the Hon Jonathan Coleman, I thank the members of the public who have made submissions, the officials from the Department of Labour and other Government agencies who have worked on this legislation, the Transport and Industrial Relations Committee, which clearly has done a lot of work on considering the legislation and these important changes, my ministerial colleagues who have had input, and members of the Opposition whom I have acknowledged.

On that note this third reading is the final step in the parliamentary phase of the review of the Immigration Act. It has been a long time coming. The implementation work will begin next. I look forward to that and to the new systems that the bill provides for, and putting them in place. On behalf of the Minister of Immigration, I am pleased to commend this bill to the House.

Hon PETE HODGSON (Labour—Dunedin North) : I am not sure I will need all of my 10 minutes in this third reading debate on the Immigration Bill. I acknowledge the speaker who has just resumed his seat, the Hon Nathan Guy, who gave us an overview of the legislation. I will make some remarks that I hope are not repetitive of what the member has just said. This is the first time in over 20 years that we have looked at a complete rewrite of the immigration legislation, and in that time the movement of peoples across borders has increased hugely. This is partly because of immigration per se—people migrating—and partly because of the explosion in tourism numbers. There are now 2.5 million people who cross our borders every year, and that number will continue to increase. As a nation, we need to keep our borders open and safe, so immediately there is tension because an open border will be less safe than a closed one. But there is no way that this country can operate without having very, very open borders.

Indeed, there is another tension in immigration. On the one hand, the Immigration Service sets out to be a gatekeeper, and, on the other hand, it sets out to be a recruitment agency. Those two issues are directly in conflict, but it must do both. There is a need for New Zealand to keep itself safe from people who purport to be something they are not, such as people who might have criminal intent or might have deployed misinformation to represent themselves as being a good possibility for a work visa or for permanent residence. However, we are in a competition for talent with the rest of the developed world and an increasing part of the developing world. There is a global quest for talent. New Zealand does pretty well in that global quest, simply because we are a relatively attractive country in terms of lifestyle and so on. We are not a high-wage economy, so people do not come here; they go to California to make a bucket of money, but they come here, often from California, after they have made a bucket of money. We are part of that global quest for talent.

For all those reasons, the legislation needed a complete rewrite. It began pretty much under the watch of the Hon David Cunliffe, although there was some early work done by Minister Dalziel before she left that job. The Hon David Cunliffe was the Minister who introduced the bill into the House, and it is worth noting the efforts that occurred at that time with both him and, more particularly, with officials. Having arrived in the House, the bill was referred to the Transport and Industrial Relations Committee, which was chaired by the Hon Mark Gosche. The Hon Mark Gosche is no longer a member of this Parliament, but he is a fine guy. I am sure that members on the Government benches who were on the select committee, such as the Hon Dr Lockwood Smith, would hold that view too. Mark Gosche is a fine man. When he turned his mind to immigration, most people on the committee would agree that he was the person who led the quite significant changes that occurred to the legislation in the course of that select committee. The Hon David Cunliffe would point out that as the bill passed through his hands, a bunch of changes were made. In a sense, those changes and the direction of those changes occurred under the chairpersonship of the Hon Mark Gosche and with assistance from across the House of those folk who were on the select committee. I was not on the select committee, but I am sure I am entitled to congratulate it on what was a pretty hard look at quite a big piece of legislation. I think it is useful to put on the record that the select committee process, as far as I am aware, worked really well.

The bill then came back to the House where it languished for some time, when officials made a bunch of other changes that resulted in a very large Supplementary Order Paper. That is not an unusual thing, but it led to a further set of consultations with Labour members and I acknowledge the Government, the Minister, and the officials for that. We ended up arguing over the details of some of that Supplementary Order Paper. In particular, my colleague the Hon Lianne Dalziel, with her legal background, was able to carry that argument well into the detail. That Supplementary Order Paper was then put in front of the House, and a couple of mistakes in it were picked up by Lianne Dalziel, and changes were made in the course of the bill making its way through the House.

That was an example of cross-party analysis to try to get legislation that had the right level of tension in it. Immigration law has to be harsh in one respect, because it has to say no to people in a way that is, if you will, full and final, and it has to be fair, because we demand fair processes in this country and we are obliged to maintain fair processes because of our obligations under some aspects of international law, especially as it affects refugees. We have international obligations and national obligations, and they are both for fairness, but we have an obligation to ourselves to make sure that if we catch crooks, we can throw them back to where they came from. That is what I mean when I speak of tension. It is just an inevitable part of any immigration law.

That concludes my remarks. The Minister of Internal Affairs, who spoke at the start of the third reading of the bill, took us through what the legislation does. I have spoken mostly about process. I have spoken favourably, even glowingly, of some folk who have been involved in this legislation—other than myself, as I had a very minor role. I think the House can take comfort that although I am sure someone will find fault with it soon enough, this legislation has been subject to the sort of inquiry and detailed examination that we would hope all legislation is subject to.

DAVID BENNETT (National—Hamilton East) : Mr Assistant Speaker—

Hon Member: Great speech!

DAVID BENNETT: Yes, it will be a great speech. The Immigration Bill, I think, is something that many members of this House, on both sides of the political spectrum, have put a lot of effort into, and I would like to follow the last speaker, the Hon Pete Hodgson, in congratulating Mark Gosche, who was a tremendous member of this House. He was held in high regard on both sides of the House, and also in the community. He was the chairperson when I joined the Transport and Industrial Relations Committee and when it first looked at this bill. I am sure that he would savour seeing this bill progress through the House, as well.

I congratulate the current members of the select committee, who have worked equally hard to make sure the bill goes through, as well as the Ministers who have been involved on both sides of the House—former Labour Ministers and current National Ministers.

Immigration is a topic that touches at the heart of many a New Zealander, not only in terms of our migrant roots but also in the nature of our perceptions of where we see our country going in the future. Many people will expect an immigration bill to deal with the substance of who comes to New Zealand, but this bill is not about who will be coming to New Zealand. It is about the substance of the procedures and processes that people will go through when they come to New Zealand.

That differentiation is at the heart of what this bill is about. It is about the processes we need to use when New Zealand opens its borders up to individuals and families coming to live here. When we looked at that, we saw that it is something that had not been done for many years and was due for reform. It took a while for each political party to come to terms with how it saw that reform working out in the end, but I think we have a very good solution that all parties will find they can live with. All parties that have taken an active interest in it have had the ability to influence and direct the vision that this bill portrays.

Although, as I said, this bill is not necessarily about who comes to New Zealand, that angle is one that many speakers will touch on in this third reading. I want to touch on it, as well. I think that New Zealand, as a country, can have a much more open approach to its immigration, and that we should not be afraid of being a country that enables other people to come here and make their lives in New Zealand. Far too often we try to jealously guard what we have here and we do not let in others who have the spirit that our country needs. This issue is all about the spirit, I think, to build a stronger future for the individuals who will build the future for our country.

The last member who spoke talked about California and the fact that people go there to make money and then come here to live. Well, people certainly go there to make money, but people do not come here to live after they have made money in California, because we do not get a lot of migrants coming from California to New Zealand. That is because they have a spirit with which they have built a future in that state and in that country, and we need to engage with that spirit in people around the world so that they want to come to New Zealand, make it their home, stay here, and do not want to leave.

Many migrants who come to New Zealand come on a very short-term basis, and once they get citizenship they look to move to fresher fields, like Australia or America. That is not sustainable for New Zealand, because we are in the global talent pool, looking for the best, brightest, and smartest in the world. There are some key things that we as a country need to do as the next steps beyond this immigration bill if we are serious about achieving our goals in the world, and about getting the right people to come to this country.

The first thing I think we need to do is have the attitude that we will be open and able to let people come to New Zealand. We need to be able to be seen as a country that offers opportunity, a future, and the spirit of hope and direction that those individuals will bring. Probably far too often we put too many limits on people coming to New Zealand. We look for academic achievements and monetary value, rather than looking at what they want to build and bring to this country. That should be the crucial thing that we look for in the future. Some of the Labour members may be trying to pooh-pooh that by saying that they are against it, but the reality is that we need those people here. We need to enable them to have a future in New Zealand.

When we look at the people in New Zealand we see that they are the strength of our country. The people of this country provide the future income-earning potential, the cultural and spiritual future, and the diversity in our communities. They provide a future for New Zealand that looks different from the New Zealand that many members of this House grew up in and very different from the New Zealand that members of this House are living in now.

New Zealand will change. It is inevitable that we will have this change. We have a choice as a country. We can embrace that change and make it happen, or we can try to stop that inevitable change. When it does happen we will not have the ability to influence it in terms of how we would have wished it to come about. I think most members, at the point that they leave this House, will realise the inevitability of some actions, the inevitability of the changing face of New Zealand, and the inevitability of the need for more migrants to come to New Zealand. They will realise the inevitability that this country will be an open place for migration, and the inevitability that New Zealand will need to provide an environment that attracts the right migrants. These are things that we need to do.

When I say the “right migrants”, I am looking at that spirit and ability to build a future, to get an education, to start a business, and to actually make New Zealand their home. That is the spirit that I think we should look for in our migrants. They should be people who want to make New Zealand the best place for their futures, and in doing so they will make New Zealand a much stronger place. That is the key to migration in the future, and that is the strength of California, as the previous speaker, Pete Hodgson, has said. California does not necessarily attract the most holders of doctorates, but it attracts the most spirited people who want to build a strong future, and they do that in that state. I think that is the thing we can look at as we go forward.

The second thing we need to look at when we look at immigration—on top of this bill; if we look at immigration on a wider scale—is the nature of the environment that we as a Government provide. National, in conjunction with its political allies in the coalition Government, is providing the kind of future that will provide that environment, whereas the previous Government did not provide an environment that allowed New Zealanders and migrants to see a future.

Now, that is a long-term gain. It is not done overnight, and it involves many issues, ranging from economic issues to social issues that affect people’s ability to see a future for themselves in a country. That is simply what National does better than Labour, and it is what members see from this Government when it is compared with the previous one.

In effect, this bill sets out the procedures for immigration, but in doing so it touches on some of the wider issues that many of us in this House will have to debate and consider. Those issues include how we provide a much more open environment for migrants to come to New Zealand. They also include the environment we provide within New Zealand, so that those migrants can see their future here, wish to stay and make New Zealand their home, and build this country so it is as strong as we need it to be.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I join with other members in supporting the Immigration Bill. As has been previously said, this is the biggest rewrite of the Immigration Act in two decades. It is worth acknowledging the contribution of a number of Ministers of Immigration and latterly, of course, the current one, and I am sure he will take a call today on this bill. I think it is also worth acknowledging that this bill deals with some very, very emotional and high-profile issues. Throughout this debate, we have had debate about the ability to use classified information, and I am sure a Green member will probably deal with that again when the Green Party takes its call.

We have had debate about the ability the bill gives not to truncate but to put in place a single independent appeals tribunal. Whereas there were four appeal authorities before, which created—and a number of us who were Ministers at the time had to deal with this—the ability for those who were inappropriately in New Zealand to, bluntly, drag the chain through appellate body after appellate body after appellate body, and then make request of Ministers. This bill will not truncate their rights or somehow decrease their rights, but I am pleased that the House has accepted a single appellate tribunal to deal with all those rights in an efficient but fair way. I think those, perhaps from the Green Party or outside, who may stand in this in debate and make an argument that the rights of individuals are somehow being eroded because we have simply amalgamated, in its crudest form, the four appellate bodies into one tribunal, miss the mark in their argument.

I have said, and I said when I was Minister, that I think that people in New Zealand will have confidence in an immigration system, and confidence that that immigration system is bringing the right and appropriate folks into this country as migrants, only if they have an equal amount of confidence that we are appropriately and fairly dealing with those who are here under false pretences and those who are, or potentially are, bad guys, and that we are removing those people who would abuse our good graces as a country and our generosity as a nation, and who would also abuse our borders. If through this legislation we can get that balance right, we can increase the confidence in the community that we are attracting, efficiently processing, allowing into our country, and welcoming into our nation the right and appropriate folks, which is defined over a whole series of personal assets that they have. We need to do that, and I believe this bill will do that. We have to balance that with giving our immigration officials and department the appropriate tools to deal with those who would, bluntly, take advantage of our generosity. I think that this bill also gives us a basis on which to do that in terms of evidence.

As the previous Minister of Immigration, I have said in a number of the debates we have had as this legislation has gone through that I do not believe it is appropriate that we use as a measurement as to whether people should get into our country factors such as that they are seen to be popular by some interest groups—well meaning though those groups may be—that they have cooked for presidents, or that they may have converted to another religion en route to New Zealand via Seoul airport or wherever. Nor should the measurement be that there is enough public pressure on either politicians or appellate bodies that those factors should be the measurements and benchmarks for allowing people to stay in this country. If we get to that stage, then we may as well do away with any relationship with the UN High Commissioner for Refugees, for instance. We may as well dump the legislation if our benchmarks are to be the court of public opinion and listening to those who shout the loudest on behalf of a migrant. There have been such cases. I dealt with some, my predecessors dealt with some, and I am sure that the current Minister of Immigration will have to deal with those cases, if he is not doing so already. The pressure goes on from outside, often on religious grounds or on other well-meaning grounds, that we should acquiesce to that pressure and not make decisions based on the capability of our intelligence agencies or the capability of our Immigration Service. Somehow, we are meant to put aside any reference to the UN High Commissioner for Refugees as the people who set the international benchmarks, and we are meant to make decisions based on public pressure. To put it bluntly, I think that some of the arguments that have been made by some individuals that a person is a good bloke, a good woman, or a nice person do not hold water.

I have said in earlier debates that I think all Ministers of Immigration carry with them the responsibility—and I choose my words carefully—to ensure that we secure our own borders. This is not to be confused, if members will excuse the pun, with a “New Zealand first” definition of what is right. Both meanings are relevant in this debate, whether it be in terms of our nation or in terms of the political party that does not exist in this House today. That party took a very, very different view, and it was one that I think did this country no credit in respect of immigration. I am glad that Tau Henare, who is a former New Zealand First member, nods in agreement with me. Maybe we have all grown up as a nation.

I think this legislation hits the mark. I was the Minister of Immigration just before the election. I recall giving a presentation to a particular group, and the current Speaker, Dr Lockwood Smith, who was National’s immigration spokesperson at the time, stood up and basically said that the National Party agreed with the legislation in the form that it had been put forward. I think that improvements have been made to it since. I think it is also appropriate that we acknowledge the officials who have worked on it. The officials were ridden pretty hard by a number of Ministers, including me, to get the legislation into shape. We relied as Ministers on the technical knowledge of people like Graham Buchanan, the Deputy Secretary of Labour. I hope that I have not truncated his career by naming him in the House while I am an Opposition member, but I acknowledge Graham Buchanan as the senior lawyer, if you will, in respect of this legislation. I acknowledge his legal team, the names of whom will be etched, I suspect, on the pages of the draft copies of this legislation as it went through.

I think this legislation is future-proofing at its very essence. It deals with new technologies. It allows more flexibility at the border for our immigration folk. I think that it gives appropriate levels of power to our Immigration Service and an appropriate level of discretion to the Minister to do the job of protecting our borders. It also has the counterbalance of making our immigration system more efficient—to grease the wheels, if you will—to allow a free flow of immigration with appropriate migrants.

From the self-interested view of the previous Minister of Immigration, I am particularly pleased about the delegations that the Minister will be allowed to provide in terms of residency policy. I know that I, and other Ministers of Immigration, often had to deal with almost a couple of hundred applications a week, it felt like. We dealt with them on planes, on buses, and in cars, and the silver suitcases followed us around the country. But I, as a Minister, often found it was reasonably absurd that the work had been done by a plethora of technicians and officials in the department, and then it was up to the Minister to have the file put in front of him or her. The Minister has no technical knowledge on the subject—very few Ministers of Immigration who get that warrant have that knowledge, and if they do, they are very lucky—but is asked to make decisions on the papers. I recall that we often involved a number of senior managers in those decisions, because those senior managers worked with the units and had the intricate knowledge. So I am glad that there will be some discretion and that the ability to delegate has been put into the legislation.

I will conclude by simply restating Labour’s support for the legislation. I hope it will breathe new life into the Immigration Service, a department that has been kicked around by politicians—some who are here and some who are not—for many, many decades. I would note that although things have gone wrong in the department and there are individuals who have sinned, and there is one in particular whom I will not mention, I believe that the department as a whole is in very good heart. Immigration decisions by their very nature deal with human beings’ lives. In my view they are more of an art than a science. No two immigration decisions that I ever dealt with as the Minister were exactly the same in every particular way.

CATHERINE DELAHUNTY (Green) : Tēnā koe, Mr Assistant Speaker. Tēnā koutou. I am presenting this speech on behalf of the Green Party’s immigration spokesperson, Keith Locke, who cannot be with us today, but is very passionate about this issue. The Green Party is voting against this Immigration Bill; it contains too many restrictions on people’s rights. But before we discuss that, I will talk briefly about migration. Many of us Pākehā here and others are descendants of migrants from the 19th and 20th centuries who had the good fortune to come into this country without having to pass through tight border controls. We were protected by an agreement called the Treaty of Waitangi. In that Treaty we were given rights and responsibilities towards tangata whenua and tangata Tiriti, which we need to uphold, including new migrants. The Green Party would like to see all migrants have a deeper understanding of what our obligations are in terms of Te Tiriti o Waitangi.

However, getting back to this bill, I say that in the Committee stage of the bill the Green Party put forward several amendments to help address its human rights deficiencies, but none of them were successful. One of the major problems in this bill is the increasing secrecy in decision making on refugee claims, residence applications, and visa matters. The blanket of secrecy in immigration matters is now to cover many more Government institutions. Fourteen agencies can now determine immigration information to be “classified”. One of the Green amendments sought to reduce the number of those agencies to those who have traditionally had such information, namely, the Security Intelligence Service, the New Zealand Police, and the Government Communications Security Bureau. We oppose the other 11 agencies being included, such as the Aviation Security Service, Maritime New Zealand, the Ministry of Fisheries, and the Department of Corrections. These 14 agencies can not only use secret material against people in immigration cases but also stop the Immigration and Protection Tribunal and the courts from releasing any of this so-called classified information if the tribunal or the courts decide it should really be in the public domain. This means that a bureaucrat, say at the Ministry of Fisheries, can veto even the Supreme Court on what should be made public in a hearing, and that is a very dangerous thing.

The Greens also opposed the sometimes vague grounds for determining whether information should be determined classified or secret. For example, simply because the information is deemed to prejudice the “international relations of New Zealand” does not seem sufficient. On behalf of the Green Party, Mr Locke recently organised a short tour of Aotearoa New Zealand by Ms Rebiya Kadeer, leader of the Uyghur people, a mainly Muslim people who are discriminated against in the western part of China. It appears that there was some discussion in New Zealand Government circles before she was granted a visa. Thankfully she was. But on one level, we can say that the decision to grant her a visa did prejudice the international relations of New Zealand, if we are talking about Government to Government relations, because the one-party State in China puts pressure on Governments around the world not to grant Ms Kadeer a visa. This pressure was successful in Taiwan, where the Government decided that she could not have a visitor’s visa. In fact, the University of Auckland administration, in an outrageous attack on academic freedom and the freedom of speech, cancelled the booking for Ms Kadeer’s Auckland meeting at the university, citing the effect the meeting would have on relationships with “Chinese partners”.

In addition, classified information is inherently unreliable, because it is less tested in the public space than unclassified information. Mr Stuart Grieve, the special advocate appointed by the Government to look at classified information in the Ahmed Zaoui case, was very scathing about the quality and accuracy of the classified information that he saw. Yet clause 289(2)(c) of the bill requires the High Court to treat classified information as accurate. That whole case was a shame on this nation’s history. Ahmed Zaoui, as many members will remember, spent time in solitary confinement, even though he was a democratically elected member of the Algerian Parliament. In relation to special advocates, it is disappointing that the Parliament voted down one of our amendments to allow the advocate to talk to the person whose interests he or she is representing after the advocate has seen the classified information. Surely we should trust the advocate, who is appointed on the recommendation of the Government, not to divulge anything really secret, like sources. It is difficult for people to properly defend themselves without being able to give those defending them the context of any evidence in the hearing. David Bain, for example, would not have been able to clear his name under such restrictions as proposed in this bill.

The Green Party moved an amendment to stop the Minister of Immigration being able to rely on classified information in refugee and protection claims. To be able to rely on such information is dangerous and contrary to international best practice. Classified information can be rumours spread by spiteful people. It can be disinformation spread by State agencies of the asylum seeker’s home country—as was the case with lies spread by the Algerian junta in the Ahmed Zaoui case. Even more confusing, it can be slander spread by the intelligence agencies of democratic countries, because it fits the narrow interest of their Governments. For example, good economic reasons—that is, access to oil contracts—made the French Government retell the Algerian Government’s lies about Ahmed Zaoui. To increase fairness, the Green Party put in an amendment to allow for appeals of the cases involving classified information. Presently, clause 234 prevents this from happening.

There is an extreme arbitrary power given to the executive under clause 152. Under this clause the Minister of Immigration can deport anyone he or she deems “constitutes a threat or risk to security,”. This parallels a provision in the old Act that was used to deport overnight Rayed Mohammed Abdullah Ali, an innocent man who had been living freely in Saudi Arabia, but after being unjustly deported back to Saudi Arabia from so-called liberal New Zealand, he was thrown in jail for a period by the Saudi Arabian authorities. The deportation from New Zealand occurred without any due process or transparency whatsoever. An earlier speaker talked about the lobbying and support for individuals by interest groups, and this is why they exist. The law is insufficiently robust to stop such cases from happening. These cases are real and they are recent in our history.

The Green Party is also disturbed that we have not corrected a fault in the old immigration legislation, such that the new legislation will prevent the Human Rights Commission under the Human Rights Act from bringing any proceedings on immigration matters or being party to any proceedings. This is wrong. It is not necessary to restrict the Human Rights Commission in this way. The Green Party is also concerned about the extended detention powers in the bill. No good reasons were advanced for allowing the initial period of detention without warrant, such as for asylum seekers arriving at our airports, to be extended from 72 hours to 96 hours. Asylum seekers have suffered enough in their home countries already. The new detention powers for those awaiting deportation, under clauses 271 and 289, are marked with denial of habeas corpus. Firstly, clause 271 denies bail to such people, and then clause 289 denies a judge the right to determine that “the period of time that a person has already been detained” is an exceptional circumstance justifying his or her release from detention. This clause comes out of the controversy over the imprisonment of several Iranian Christian converts from Islam, for up to 4 years, after they refused to sign Iranian Government documents enabling them to be deported to Iran where, they rightly thought, they might be persecuted. The Iran Parliament has passed the initial stage of a law allowing for the death sentence for people such as them who convert from Islam.

The Government’s tough line towards asylum seekers is not justified on either a moral or a practical basis. Aotearoa New Zealand now gets only a tiny number of asylum seekers arriving at the border, partly because it does not get any boat people, and also because asylum seekers whose papers are not in order find it very difficult to get on a New Zealand - bound plane because of tightened advance passenger processing arrangements. In fact, these arrangements can offend the 1951 United Nations Convention Relating to the Status of Refugees, whereby airlines that allow asylum seekers on board should not be penalised as they are under clause 89 of the bill.

Another problem in relation to refugees is that the new Immigration and Protection Tribunal, which incorporates the work of the old Refugee Status Appeals Authority, is not required to have members specialising in refugee law. Unfortunately, Parliament did not accept the amendment that Keith Locke moved, which was that at least one of the tribunal members should have “extensive experience in refugee law”. The bill also allows much more intrusion into our bodily spaces.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Tēnā koe. Ki ora tātou katoa e te Whare.

Hon Paula Bennett: We haven’t heard from you for ages!

HONE HARAWIRA: I say tēnā koe to Paula Bennett. Yesterday I got back home after being away for 3 weeks as part of a delegation to the assembly of the Inter-Parliamentary Union in Geneva. While we were there we visited the European Parliament in Brussels, where we met with MPs and officials to see how they got 27 different countries to work together on issues as diverse as the global financial crisis, trade, immigration, and multiculturalism. We also visited the World War I battlefields in Flanders, laid wreaths to fallen New Zealand soldiers, and took part in the last post ceremony at the Menin Gate on the outskirts of Ypres. Visiting memorials dedicated to hundreds of thousands of soldiers who gave their lives for a war that many of them did not understand brought home to me the importance of our own country’s commitment to human rights overseas.

This brings me to the bill before us today, the Immigration Bill, and the importance of having a strong, positive, and fair immigration system in Aotearoa. Apirana Ngata said that Māori participation in the First World War was our price of citizenship. That was the price we paid to be part of shaping this nation. The price went through the roof with the commitment of the Māori Battalion in World War II. The Māori casualty rate was 50 percent higher than that of every other New Zealand infantry battalion. More Māori died per head of population than any other people in the Allied forces.

I raise these matters because I want this House to be reminded of the price we have paid for our citizenship and the right we have as tangata whenua to sit at the decision-making table as Treaty partners, and not as tenants nor as a minority. Our own Declaration of Independence, which we celebrated yesterday, and the Treaty of Waitangi serve as this nation’s very first immigration charters. Indeed, Dr Ranginui Walker described the Treaty as the source of all migration to Aotearoa from Europe, Australia, and the United Kingdom. It was the guarantee of a developing social contract. It was a partnership of the two cultures, with, at its very core, the expectation that Māori, as a Treaty partner, would be consulted on every aspect concerning people who want to come here.

Yet this bill is more about managing immigration and balancing the rights of the individual than it is about serving the national interest by having all new citizens complete a course in the history of Aotearoa and the Pacific as part of their price of citizenship. That is exactly what Māori told the last Government it should do, during a consultation hui in 2001 on immigration policy. The last Government ignored that call, and it would seem the current Government is also ignoring it. But the Māori Party takes the view that contracts are to be honoured in the deed rather than in the breach, and suggests that an understanding of the Treaty is a critical component of immigration policy.

The Māori Party’s confidence and supply agreement with National states: “Both the National Party and the Maori Party will act in accordance with te Tiriti o Waitangi,” yet the Government has decided unilaterally that the Treaty is not relevant to immigration policy. So I introduced Supplementary Order Paper 18 to give Māori a right to participate in immigration management consistent with the rights guaranteed to Māori under the Treaty of Waitangi. It is no big deal, really. In fact, it was very similar to other Supplementary Order Papers we have put up on other legislation. Unfortunately, however, it suffered a very similar fate to those other Supplementary Order Papers: it was voted down by every party in the Committee except us and the Greens. Again, I thank the Greens for their continued support of Treaty issues.

The Māori Party also has grave concerns about significant human rights issues in the bill, such as the possible abuse of private information, the prolonged detention of asylum seekers, the lack of protection of the rights of children born in Aotearoa without citizenship, and the refusal to allow the Human Rights Commission to have jurisdiction over immigration matters. For those reasons, and for many others, the Māori Party will be opposing this bill. Tēnā koe.

Hon TAU HENARE (National) : What my cousin, colleague, and friend Hone Harawira failed to mention in the beginning of his speech was his 4 days in Hawaii.

Hon Paula Bennett: Aloha!

Hon TAU HENARE: Aloha. The Immigration Bill takes all of the legislation that we had in the past, with its mistakes, its good things, and its bad things, and tries to come up with a new foundation for New Zealand’s immigration system. Essentially, to me, the foundation for New Zealand’s immigration system is the management of incoming new New Zealanders, whether they are here to visit and might feel that they would like to become part of the country, whether they are here in transit, or whether they are looking for a new start because of whatever has happened in their home nations. This legislation is flexible, enduring, and it makes our immigration laws and system very, very strong. It is not only about the nuts and bolts—the passenger processing, the universal visa system, one independent appeals tribunal, a tiered detention and monitoring system—but also where we go in the future, and about who controls—and how they control—those who want to be part of our system.

I hear what the Greens and the Māori Party have said, and some of that strikes a chord when we talk about nationalism or allowing people the right to come into our country. On the other hand, when we talk about people coming into the country we have to be certain about a number of things, especially in the times we live in today. Back in 1900 there were not too many things wrong with immigrants when they were looking for a new start, but now we have a lot of security issues around the world that people need to be aware of. I think new technology such as the new biometric tools that are available is a wonderful thing and will be a very handy tool, not only for this country but also for other countries, as well, when they come online. I also think there are other issues at stake, and one is how we find out whether a person who wants to get into the country is sound and has a nice character. We can do that only by seeking out information.

Those who say that this law is an abuse of human rights are far, far wide of the mark. I say that because most of the countries that people who want to get in here come from have fewer human rights than we do. We have a duty to treat those people nicely and in a kind and humane way, but we also have a duty to every other person who lives in the country to make sure that our visitors, whether they are in transit, on holiday, or want a new start, are the right sorts of people. I know that can sound a wee bit funny sometimes, but I think members know what I mean.

I want to make a brief comment about what the Hon Clayton Cosgrove said about some parties that are no longer here, namely the party that I used to belong to. I am glad that party is not here, and that it is not here in this debate, because it made its name on getting stuck into immigrants and blaming them for every problem that arose in this country. We may have our problems—

Hon Maurice Williamson: And did it with a pommy accent!

Hon TAU HENARE: Yes, that party did it with a—no, I will not say that. The fact of the matter is that every nation in the world has to have a strong, vigorous, and vibrant immigration system. If it does not, it opens the door to all the security risks and naughty and bad people in the world. I am glad that we have had and continue to have a very safe system in this country.

My last point is that I congratulate all the people who have come to this nation and chosen our nation to be their nation. It not only builds the economic capacity of our country, but it also builds the social capacity of this country. We have problems, but, hey, we do not throw bombs at each other and we do not kill each other in the way that people do in other nations. I am proud that this legislation is the foundation of what should be, and what I think will be, a very, very strong, enduring, and flexible immigration policy.

DARIEN FENTON (Labour) : It is a privilege to take a call on the third reading of the Immigration Bill. I acknowledge all of the work that has been done on this bill over many, many years. As a member of the Transport and Industrial Relations Committee that considered this bill, I know that it was a marathon job. It was a marathon job before the select committee received it, with work from previous Labour Ministers of Immigration, it was a marathon job for the officials and advisers, and it was a marathon job for the Hon Mark Gosche, who very ably chaired the committee and steered the process through. I acknowledge all of the people who have been involved in putting this bill together, and in getting it to the point it has reached. I know that the select committee was very demanding of advisers and officials because there were some concerns, and I will talk about those a little bit; we had to deal with some pretty challenging issues

As my colleagues have said, Labour supports this bill, but I think that in its third reading it is incumbent on all of us to remember that those on the receiving end of this law are real human beings. We are talking about people here, and we must bear in mind that this legislation affects people’s lives. Decisions from this bill affect everyone: they affect the lives of families, of children, of workers, of travellers, of refugees, and of those who seek to make new lives in New Zealand. We need to bear that in mind, but I also agree that New Zealand must have the right to protect its borders, and to decide who can live and work here.

Having said that, I also say that we have to ensure our reputation as a country. We have a reputation for treating people fairly, humanely, and compassionately, and I want to ensure that that reputation is retained, and that we do not get carried away in this bill, and in other measures like it, with punitive measures because of the fear of terrorists and others. As the Hon Tau Henare said, we live in a pretty peaceful country, and we are far away from many other—

Hon Chris Carter: Even in west Auckland!

DARIEN FENTON: Even west Auckland is pretty peaceful; that is right. Other people have observed, as well, that New Zealand has been built on migration from other countries—from the first peoples of our land to our most recent migrants.

Some of the issues the select committee considered were pretty difficult, and I acknowledge the Greens and the Māori Party, as well, and the work of Keith Locke, who was involved in the committee. There were issues around detention, classified information, and the refugee protection system, which are not easy things to deal with. There were many times during the process in the select committee that I felt uncomfortable; we heard some awful things. There was strong opposition to some things in this bill, and some people are still unhappy about them—there is no doubt about that. But I assure the Greens and the Māori Party that we worked really hard in the select committee to try to address submitters’ concerns. Again, I say it was the able chairpersonship of Mark Gosche that got us through a lot of the issues that we, and I think the Greens, felt concerned about. Because of that work, on balance, the resulting bill does the job of both protecting our borders and treating people humanely.

It is interesting that about 2.5 million people a year cross New Zealand’s borders—our little country has 2.5 million people crossing our borders. That is because people are moving around the world at an unprecedented rate as tourists, students, workers, or permanent migrants, and that provides many challenges but also opportunities for New Zealand. There are about half a million applications to come to New Zealand each year—about 500,000—and that is why this bill is necessary. It is necessary to modernise the legislation so that we have the tools to manage that sort of increase, to manage that large number of people who want to come and live here.

Labour introduced this bill and we worked hard on it. We worked hard on it with other parties, as well, because we recognised the realities of the global labour market and the risks in the modern security environment. We should not overstate those risks but they are there, and we needed to adapt the immigration system to ensure the best outcomes for our country.

If we go back to the 1987 Immigration Act, we find that it has been amended numerous times. Such amendments have included changes to the removal regime for people unlawfully in New Zealand, and the strengthening of provisions to prevent people-smuggling and trafficking. Major changes took place in 1999 with the introduction of New Zealand’s now highly regarded refugee status determination process. At that time Part 4A, which enabled the use of classified security information, was also introduced. Further changes took place in 2003 with the introduction of the expression of interest approach to the selection of skilled migrants. Although all the amendments to the 1987 Act have led to improvements in the way that the immigration system works, they have been incremental and have resulted in increasingly complex legislation.

The review of the Act that led to this bill sought to address the problems of increasing complexity, by making sure that the legislation was as transparent as possible and was also future-proofed. New Zealand has to stay in the race with modern immigration legislation that allows us to build a modern society, but also to protect our borders from people who may be a risk. As I said earlier, I think the bill provides the right balance between allowing us to choose the migrants we want and need, protecting our national interests, meeting our international obligations, and ensuring that we protect our borders. So this bill will support the immigration system now and into the future, to enable firm, fast, and fair decision-making.

I have noted that people have taken the opportunity in the third reading to make comments about the future of our country. There have been some very “interesting”—I will not use any other word—observations. I note in particular David Bennett’s comments about encouraging migrants. I think that if we want to encourage migrants to come to this country to live and work, we have to do better than we have been doing in the last couple of months. In previous debates I have brought up this issue, and I intend to do so again as it is my last opportunity.

I am talking about the 30 or 40 migrant lines engineers who actually live in Minister Coleman’s own electorate, and who were encouraged to come here to work as lines engineers when we needed their skills. Now they have been left high and dry, because a new contractor called Visionstream came in and decided to change their employment arrangements from being employees to being owner-operators. But because the migrants were on work permits, they could not change over. Those workers have been laid off with no redundancy pay and nothing to tide them over. They cannot continue on as employees, as I have said, but they have nothing to help them get home; they are not entitled to any welfare benefits. But they are being supported financially by their union. Do members know how that is happening? The public have been making donations to help support them. So those workers are being supported by their union, but that support is limited and it will come to an end. They are not legally able to work anywhere else, or outside the telecommunications industry. But the sad fact is that they were encouraged to come to New Zealand. They were told that this was a wonderful place and that we needed their skills. Now, they have been left high and dry; they will have to go home. I say that we have to do better with employers who want to bring skilled migrants to New Zealand—

Carol Beaumont: They’re people, not commodities.

DARIEN FENTON: —that is dead right—then dump them on the scrap heap and say: “Well, sorry; off you go—go home.” If we want skilled migrants to come here to live and work, we have to do better. I hope we have an ongoing conversation about this particular matter, because it is a conversation that needs to take place. Thank you.

ALLAN PEACHEY (National—Tāmaki) : The purpose or primary objectives of the Immigration Bill have been well outlined by the Minister of Immigration, who spoke earlier, and by other members.

I will make a couple of general comments. The first is that if one reads the history of New Zealand, one finds that immigration goes to the very heart of what this country is all about. I have heard suggestions during the parliamentary process dealing with this bill that somehow immigration has suddenly become significant to the social fabric of our country and to its economic well-being. In actual fact, it has always been significant, and we should not lose sight of that. We should not lose sight of the fact that as New Zealand has grown and developed, so much of that growth and development has been based on migration and on immigration.

It is important that we have legislation that is modern and appropriate to the 21st century, and that it is enduring. Probably the most satisfying aspect of this debate has been the bipartisan approach that both major parties have shown. Immigration should not be a political football. It should not be a way in which politicians score cheap points at the expense of easily identified groups. It is good that the House is currently rid of that sort of thing.

I acknowledge the work done by immigration Ministers in two Governments, and by members on the Transport and Industrial Relations Committee over two Governments. I have been particularly interested to pick up on the acknowledgments given to our previous colleague on the committee, Mark Gosche. I was not on the committee when he chaired it, and I am beginning to think maybe that was to my disadvantage. But I certainly knew Mr Gosche as a very, very fine electorate MP in the electorate neighbouring my own constituency of Tāmaki, and I know that he was well-thought-of as a very hard-working and diligent member. He certainly set some standards that I felt obliged to maintain in the neighbouring electorate.

I also acknowledge the hard work done by officials over a long period of time. This legislation has been a bit of a marathon but it was absolutely vital that we get it right, because, as I said, immigration and migration go right to the heart of what New Zealand is as a country. Thank you.

CAROL BEAUMONT (Labour) : I rise to speak in support of the third reading of the Immigration Bill, and I acknowledge the fact that this is a very comprehensive rewrite of what is quite complicated legislation and a complex area of policy. One of the things I am aware of is the extensive consultation process that has been undertaken, over a period of some years. I think the bill probably reflects what we would hope is best practice, if you like, in the development of legislation. The history is that in April 2006 the previous Labour Government published a discussion document on a review of immigration. Submissions were called for, and key options for change were considered as part of that review. Officials travelled the country and talked to people about those options, and I understand that over 650 people attended meetings. Almost 4,000 submissions were received, as part of that process, from migrant organisations, community organisations, unions, employers, and national and key international human rights organisations. That is quite amazing, because that process then helped to contribute to the bill, which then went through the select committee process.

The Transport and Industrial Relations Committee received 90 submissions from interested groups and individuals, and heard 61 submissions. That included hearing submissions in Auckland. As others have done, I would put on record the work of Vui Mark Gosche in relation to this bill. This is not an easy area of work. There are many competing demands in immigration: making sure that national interests and security interests are balanced up against the interests of those who come to this country, and making sure that the rights of those people are protected. It is never easy to get that balance right. I know, as somebody who made a submission on the bill—I was not in Parliament at the time—that there were many complex matters to look at.

The bill is framework legislation, and that is quite deliberately the case in order to enable it to capture core concepts and processes, without being unduly weighed down with particularities that may quickly become outdated. I want to talk a little more about the purpose of the bill and some of the key elements. The objective is to establish a stronger, more flexible, and enduring foundation for New Zealand’s immigration system, and to manage immigration in a fair and balanced way. Changes have been made to include a new visa system, the ability to use classified information, international protections, a single appeals tribunal, a more transparent deportation system, flexible compliance and enforcement powers, and so on.

The bill, as I have mentioned, was introduced by the previous Labour Government, and it is now going through the House under a National Government. There was a great deal of cooperation, I think, to get to the point we are at now. It is the biggest rewrite of immigration law for over two decades, and it will replace the Immigration Act 1987. The previous Government introduced this bill because it recognised the realities of the global labour market and also the risks in the modern security environment, and it was trying to balance those interests. It is clear to all of us in this House, I am sure, that people are moving around the world at unprecedented levels, as tourists, students, workers, and permanent migrants. That provides challenges and opportunities.

New Zealand is a country of migrants, as many members have already reflected on. We are a stronger country because of the successive waves of people that have come here. One thing that I think is particularly interesting about New Zealand, in terms of immigration, is that one in four of the people who are working in this country were born somewhere else, and one in six of the people who were born here are working somewhere else. That is actually a very interesting thing, because it means—and this is different from the situation in a number of other countries—that New Zealand is both a country of origin for migrants and a country of destination for migrants. Both elements are substantial for us. I am also sure that the members of this House would all recognise the importance and value of immigration for our country. Migrants coming to New Zealand bring their skills, they bring their links back to their home country, they bring investment, and they bring cultural diversity. They strengthen our country. I have always found it of real concern to hear people whip up anti-migrant sentiment. They somehow imply that New Zealand is doing migrants a favour by letting them come and live here. Well, nothing could be further from the truth. Any objective analysis of the balance will show that in fact the balance is to the benefit of this country, for all of the reasons that I have just given.

I think it is worth putting it on the record, as part of this discussion, that the reason that many people migrate is to have a better quality of life, or to find more opportunity—a better opportunity for themselves and their families. One of the real factors behind migration around the world is poverty, or the desire of people to try to gain a better standard of living. It concerns me that already this Government, in relation to the issue of poverty, has changed the focus of NZAID away from poverty elimination. I wonder about the implications of that for migration—

Darien Fenton: And what that message sends to other countries.

CAROL BEAUMONT: Yes, what my colleague says is right.

We have to stay in the race in order to attract people to come to our country. We need to have a modern immigration system, but we need also to protect our borders from those who could potentially threaten us. We need to strike the right balance between allowing us to choose the people whom we want and need to protect our national interests, and ensuring that we can protect our borders and successfully fulfil our international obligations. New Zealand has a reputation as a country that honours international agreements; it actually supports the work of multilateral agencies and abides by the guidelines and best practice in this area. Certainly, in the area of migration a lot of work is currently going on regarding the sorts of frameworks that we should have, and from my previous experience I know that the best practice is to have a rights-based framework. It is about making sure that the people who are moving around the world are treated with respect and that they do have rights.

Each year in this country 2.5 million people cross our borders. One of the reasons why we have quite robust immigration and actively seek out migrants is to provide skills, as I have previously mentioned. I place it on the record that I think that it will be necessary to continue to seek out migrants, perhaps at even greater levels, because we are failing in the skills area. The current Government is failing to address our country’s skills need. At a time of economic recession, when it could really invest in people and really generate a much more knowledgeable and well-skilled population, what is going on? The answer is nothing. The truly shocking aspect of our Budget this year was that there were no new initiatives in the skills area, and that much of the very, very good work that had been done by the previous Government, in terms of developing the Skills Strategy and looking at some very comprehensive programmes like Schools Plus, has been completely ignored.

I have yet to see anything come out of the Government to try to address skills and to invest in our own people in this country, to ensure that we have the skills we need. We have major skills deficits; there is no doubt about that. We have skills deficits in many technical areas. So the Government could have really taken the opportunity, when people have been struggling, when people have been made unemployed—thousands and thousands of people have become unemployed—to put a lot of money into providing them with positive hope for their futures and doing something that would be good for our economy.

MICHAEL WOODHOUSE (National) : I will take just a short call in support of the Immigration Bill. It has been discussed at length not only today but also on previous days, and I do not want to unduly delay the passage into law of this very important piece of legislation. But I add my congratulations to all those who have been involved in what has been a quite long gestation—several years—in getting the bill into its form and now into law, and those people have all been named.

What I do want to do is to add a message of best wishes to the staff of the Immigration Service, the New Zealand Customs Service, the new Immigration and Protection Tribunal, and the very many other departments that will be involved in the implementation of this Act.

There are some very challenging aspects to the new law, particularly in relation to the streamlining of the immigration processes. There are things like simplified passenger travel between Australia and New Zealand, and the bill allows for that to go further afield in the future; the collection of biometric information; and the information-matching and information-sharing processes that the Act will allow. There are many other initiatives that are very beneficial, and how successful the law will be will in large part relate to the ability of those departments to deliver on the technologies and processes in an efficient and timely manner.

The last couple of years have been a challenging time for Immigration New Zealand, and I am sure we all want to wish it to be strong and confident in the discharge of its responsibilities under the law that is about to be passed. It may even be the case that those challenges energise it and refocus it. I wish the immigration officials very well in that regard. I commend the bill to the House.

Hon NATHAN GUY (Minister of Internal Affairs) : I seek the leave of the Committee to take this bill as one question.

The CHAIRPERSON (Eric Roy): That would include the debate, I presume.

Hon Nathan Guy: Yes.

The CHAIRPERSON (Eric Roy): Leave is sought for that purpose. Is anyone opposed to that course of action? It appears not. Leave is granted.

Hon DAVID CUNLIFFE (Labour—New Lynn) : I take a very brief call to say that although Labour supports the principles of the Settlement Systems, Futures, and Emissions Units Bill, it comes at a very important and difficult time for this Parliament. I see colleagues around the Chamber who are on the Finance and Expenditure Committee. It is currently considering deeply flawed legislation, the Climate Change Response (Moderated Emissions Trading) Amendment Bill, which is the companion bill to this one. It is essential to make cross-reference to that bill because it is moot to be talking about the Settlement Systems, Futures, and Emissions Units Bill when the basics of the trading scheme are themselves in doubt.

I will give the Committee several examples of why this is, for New Zealand, a train wreck waiting to happen of such serious magnitude that it will result in an intergenerational disaster for our children. The first of those issues is that it is not possible to have a coherent “cap and trade” system without a coherent cap. The companion bill to this one, which is before the select committee, removes the cap that is currently in law from many of the sectors that this bill would cover. The economic effects at the macro level would be that it would be impossible for efficient trading to occur between sectors and therefore impossible for the New Zealand economy to adapt to, mitigate, or prevent climate effects at the lowest economic cost. That means, unfortunately, that ordinary, hard-working New Zealand families will be paying too much tax, losing too many jobs, or paying too high a price for their power or petrol because this Government is too determined to suppress dissent and ram the bill through Parliament than get it right.

Simon Bridges: Ha, ha!

Hon DAVID CUNLIFFE: I hear the member laughing. The Government will make this country a laughing stock in Copenhagen, and that saddens me.

The second reason this bill is being cynically manipulated at this time is that it is predicated, as is its companion, on interface with the Australian emissions trading system, which does not yet exist and in its current form has been thrown out of the Australian Senate. I argue that matching the Australians, when they have a different emissions profile, is in itself about as smart as putting a fox in a chicken coop. The Australian system is devoted to protecting its minerals sector, and Australia’s agricultural emissions are less than half of ours, as a percentage. Why are we trying slavishly to fall on our backs in front of our largest neighbour, which has a different emissions profile by a factor of two? The answer is that this Government has given up. It has given up the idea that New Zealand is a nation. It has given up the idea that we stand for something unique to our identity and that we are proud New Zealanders. We are not slaves of Canberra, and we should not be fawning over the Australian system when it does not exist. It is ridiculous, embarrassing, and illogical, and the Government should be ashamed.

The third reason the bill is a train wreck is that it and its companion bill, in their current form, will imply huge risks to New Zealand’s fiscal balance. The only way that the Crown and future generations of taxpayers will not be subject to massive fiscal liabilities is if the carbon price increases by less than 1.3 percent per annum on average, because that is the rate of decay built into the companion bill to this bill for the decline of the subsidies to National’s rich donor mates. No forecaster I know of, not even the New Zealand Treasury, believes that is the case. Nobody is saying that the carbon price will be flat or have less than 1.3 percent growth. Of course it cannot happen. Most of the developed and developing countries of the world will find themselves in carbon deficit and will be competing on the open market for the credits. How ironic to have this bill’s second reading the day the New Zealand Treasury has published its long-term fiscal outlook! Absent this bill, it already projects a total net debt by 2050 of 220 percent of GDP. Do members know what net debt was when Labour was in Government? Zero.

Moana Mackey: How much?

Hon DAVID CUNLIFFE: Zero. We were in credit for the first time in a century. Under National less than a year later, debt is projected to rise to 220 percent. Here is the rub. Can members guess what the imputed carbon liability in Treasury’s long-term fiscal outlook is? Zero. The 220 percent net debt is without any carbon component. Another branch of Treasury tells us that it does not believe that there has been adequate analysis, and it does not believe that it will be possible to have a growth rate in carbon of less than 1.3 percent. So not only is this embarrassing bill here on a day when Treasury has not been talking to itself, but it adds to the burden on our children. I do not know how members of the Government can look their own children in the eye and say to their sons and daughters that they are leaving them a world so much worse than the one they inherited. It is so much riskier that their children’s very existence—their lives—are on the line because of climate change. They will do nothing much about it other than give open-ended subsidies to some of their best mates at the Wellington Club and the Northern Club and to the other people who have paid them handsomely to sit on that side of the Chamber. How can those members opposite look their children in the eye and say that they are bequeathing them a future that is at least as good as the one that the people remembered around this hallowed Chamber fought and died to give us?

Hon NATHAN GUY (Minister of Internal Affairs) : I rise to make a contribution on the Settlement Systems, Futures, and Emissions Units Bill. It was good to hear that Labour is supporting the bill, but then I just heard the previous speaker say it is an embarrassing bill, which somewhat confused me. I want to get back to the facts of the parts of the bill, which we are debating as a whole.

Part 1 provides that trades, securities, and other products can be cleared and settled through designation systems that meet expectations of international and domestic participants in the New Zealand financial sector. Part 2 contains a savings provision that ensures that two payment systems already designated under existing Part 5C of the Reserve Bank of New Zealand Act are not affected by the amendments in this bill. Part 3 of the bill is to do with the Securities Markets Act 1988, and it amends the Act to align the regulatory environment for exchanges seeking to operate in both securities and futures markets. Registered securities exchanges and authorised futures exchanges are regulated slightly differently from each other under the Securities Markets Act. Currently, a securities exchange registers under Part 2B of the Securities Markets Act, while a futures exchange is authorised under Part 3 of the Act. Part 4 of the bill, which addresses the Personal Property Securities Act 1999, claims to clarify the regulatory treatment of emissions units to support the development of the market for emissions units. We have just heard a fair bit about that from the previous speaker. Emissions units are a relatively new product in our market. Some members of the financial sector submitted that in order to trade emissions units, the treatment of those units under our securities legislation needed to be clarified. Part 4 of the bill supports that objective by defining what an emissions unit is for the purposes of the Personal Property Securities Act. Part 5 addresses issues to do with the Securities Act 1978. It defines what an emissions unit is, and it amends the definition of “chattel” in the Securities Act to include an emissions unit. It also inserts new definitions of “emissions units” and “greenhouse gas”.

There are two Supplementary Order Papers on the table. The first, Supplementary Order Paper 81, divides the bill into four bills. That will enable Part 1 and Part 2 to become the Reserve Bank of New Zealand Amendment Bill; Part 3 and schedules 1 and 2 to become the Securities Markets Amendment Bill; Part 4 to become the Personal Property Securities Amendment Bill; and Part 5 to become the Securities Amendment Bill. Supplementary Order Paper 80 makes very technical amendments to the bill.

CHARLES CHAUVEL (Labour) : The Settlement Systems, Futures, and Emissions Units Bill is a very good bill, and Labour does support it. It might be useful to briefly remind the House of the legislative history of the proposal. The bill in its original form was introduced by my friend and colleague Lianne Dalziel, on 2 September 2008. On 23 September 2008 it was read a first time and referred to the Commerce Committee. Some time later, on 18 June 2009, we see that the bill was reported back to the House, and we finally get to debate it now.

I will touch on some of the main features of the bill for those listening to the debate. The legislation is intended to signal that trades in securities and other products can be cleared and settled through systems that meet the expectations of both international and domestic participants. The bill provides for settlement systems to operate in New Zealand with the option of applying for designation and being regulated to relevant international standards. In return for that, a designated settlement system receives additional legal protections to support the integrity of the system in the case of a participant’s default or insolvency. As we have just heard from the Minister, the legislation will also amend the Securities Markets Act. Clearly, if it is done properly, that will reduce compliance costs. We will be able to align the regulation of exchanges that seek to operate in both the securities and the futures markets. Also, if we enact that a person approved by the operator of an authorised future exchange is an authorised futures dealer, then we ought to get that level of efficiency as well. One would assume that the New Zealand Exchange would expect to benefit from those amendments through a reduction in its compliance costs.

The legislation also clarifies the regulatory treatment of emissions units to support the development of the all-important market that we want to see arise for these emissions units. The bill will give effect to that policy through a number of technical amendments to existing legislation. Settlement systems do contribute to a well-functioning capital market—there is no doubt about that. Capital market development will also be enhanced by this legislation, and, hopefully, it will also contribute to building our infrastructure.

I reiterate some of the concerns that were pointed out to the Committee of the whole House by my colleague David Cunliffe. The first concern is that this legislation has been allowed to languish on the Order Paper for some time. As I said earlier, it was reported back from the Commerce Committee on 18 June. Since that time we have seen an excessive amount of urgency used in this House on matters that surely any objective reader of the Order Paper would agree simply do not merit the use of urgency. There has been a shambolic management of the House by those responsible. Why this legislation has had to wait until now is really beyond members on this side of the Chamber. We could have got to it much earlier than we have. We should have debated it soon after its report back in June. There was ample time for the Commerce Committee to do a good job as I think the report back indicates.

The legislation was thoroughly considered by the Commerce Committee. There are sensible amendments being put forward, and I pay tribute again to the able chairpersonship of my friend and colleague Lianne Dalziel, in that regard. Quite why some of the measures that we have been considering in urgency in the House have been allowed to proceed while this has had to wait its turn beggars belief.

The second concern that has to be stated is that although this legislation has no direct bearing on the operation of the Government’s emissions trading scheme, it will facilitate the creation of a system that will allow for the trading of units generally. It is incumbent on any speaker trying to give an honest context to this legislation to point out the fact that while it has been languishing on the Order Paper we have also had climate change policy, in general, languishing in this country. As Mr Cunliffe said, we currently have a process where emissions trading legislation is simply being rammed through the Finance and Expenditure Committee with no regard for the public’s right to give proper submissions, no regard for the right of this Parliament to hear properly from officials, and no regard on the part of the Minister for the obligations that exist under the Official Information Act for the release of Cabinet, and other, materials. Members and the public are not able to make a proper assessment of whether the fiscal cost of the emissions trading scheme amendments are those that we should agree to. In fact, as Mr Cunliffe said, the evidence that the committee has heard to date on that question is of fiscal recklessness and a complete lack of transparency. But more of that anon, when we come to what will no doubt be the debate of the emissions trading scheme, mark whatever it is, under urgency in this House next month.

The other concern is that we have had yet another select committee, the special committee on the emissions trading scheme, considering questions arising out of the scheme. That has meandered on from February through to June or July with no particular urgency. The Government finally forced it to a conclusion and put that committee out of its misery. That was probably a very good thing, but it again points to a real waste of the time of members in this House. That process occurred, we had this rushed Finance and Expenditure Committee process, and now, finally, we are dealing with the Settlement Systems, Futures, and Emissions Units Bill. I note that it was introduced under urgency yesterday. Thank goodness we are at least not taking the Committee stage also under urgency! It is good legislation, it does deserve proper consideration, and I do hope that the Committee will give it that under this process.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : I rise to take a short call on the Settlement Systems, Futures, and Emissions Units Bill. Unlike my colleagues opposite, I will not traverse what was said in this House yesterday during the bill’s second reading, but I will acknowledge the officials who are here in the Chamber for the good work they did during the course of the select committee process.

I think it is apt that a member who attended the Commerce Committee and heard the submissions should stand and speak on this bill, rather than speak on another bill that is currently going through another select committee.

This bill is being supported by all parties in the House. As we have already stated, it is part of the economic package that this Government has put in place during its first year of government.

Grant Robertson: It’s a Labour bill.

PESETA SAM LOTU-IIGA: Dare I remind my colleagues opposite of the sort of damage they did in 9 years in Government in this country. Dare I remind them of their failure in respect of economic growth; we had 0.2 percent annual growth in GDP in the year ended December 2008. Dare I remind those members of the high inflation rates that the previous Labour Government oversaw during its period in office. Dare I remind members opposite of the contraction in exports that occurred over the last 5 years. According to my colleagues opposite, it is all National’s fault.

This bill is part of a package that will transform this country. It will transform our economy. That is the reason why members opposite as well as Government members support this bill. I commend this bill to the Committee.

MOANA MACKEY (Labour) : I would like to make a few things clear to Peseta Sam Lotu-Iiga, the member who has just resumed his seat. First, this legislation was brought into the House by the previous Labour Government. He can stand up and lecture members about how wonderful it is and say that we should be so grateful to be here debating it, but he might also like to acknowledge the fact that the Labour Party in Government brought this legislation into the House. Secondly, the member may not like the fact that we are discussing the implications of this legislation in conjunction with the emissions trading scheme amendments, but members on this side of the Chamber will not stop talking about the huge liability being forced on to the next generation of New Zealanders just because the National Government does not like hearing about it. Thirdly, I would also tell him that it is very worrying for the public of New Zealand that Government members are talking about the kind of fantasy situation that was outlined by the member in terms of the economic position that National inherited from the previous Government. It should be very concerning to New Zealanders that the National Government is trying to rewrite history and is not acknowledging the fact that it actually inherited the lowest levels of debt as a proportion of GDP in the world, the lowest unemployment in the world, and zero net debt. I find it very concerning that a member of the Government would stand up and attempt to rewrite history in that way. It does not bode well for the future.

Labour is very happy to support this legislation and to take a call in the Committee stage. As we said in the bill’s second reading, we thank the Commerce Committee for its work. It was ably chaired by the Hon Lianne Dalziel. We acknowledge the work of the officials in bringing it to this House. We will be supporting this bill, because it is important legislation. I concur with my colleague Charles Chauvel, who said that it is a shame it has taken as long as this to bring it before the House. Many pieces of legislation that are not as important as this bill have been pushed forward.

I believe that the select committee made its report back on this bill in June. I acknowledge that at least this bill has had a proper select committee process, unlike so much other legislation that we discuss in this House. The bill was fulsomely considered by the Commerce Committee, and I think we can see that in the quality of this legislation. When we take the processes of this Parliament seriously and allow bills to have a proper amount of time at select committees for proper consideration and the proper interaction with the members of the public who want to come along and submit, then we can see that in the quality of the legislation that comes out the other end of the process. This bill is of far greater quality than much of the legislation that we have seen forced through this House under urgency, without a proper select committee process. But it is a shame that this bill has taken so long to come back before the House.

I think we must reflect on why this legislation is so important when we are looking at carbon trading, both domestically and internationally. The reason it is so important, particularly when we look at the process for purchasing international emissions units—and I do not think that people realise this, and it has not been said in public often enough—is that when we see, for example, the Government’s target of a 10 to 20 percent reduction in greenhouse gas emissions by 2020, a target that has been heavily criticised in public because it will not do enough to address the issue of climate change, most people do not realise that the Government has no intention of trying to reduce our emissions by 10 to 20 percent. Saying that it is an emissions reduction target is very misleading.

What the Government intends to do is to purchase emissions units internationally to pay for that difference. Instead of the Government saying that it will try very hard to get our emissions down by 10 to 20 percent, it is saying that it will go overseas and buy emissions units for the 10 to 20 percent reduction, which is the target. Those are two very, very different things, and they are core to this legislation. Purchasing emissions units overseas costs a lot of money. This Government has decided that its preferred method for dealing with climate change is to buy our way out of it and not actually reduce our emissions at all.

Some people might ask what the point is. If the intention of the emissions trading scheme amendments, or legislation—as it currently exists, and as it will exist once the amendments have been passed, with the support of the Māori Party, which I am sure will just support it all the way right through to the end, regardless of who has to pay for it—

Hone Harawira: Kia ora, Moana.

MOANA MACKEY: Welcome back, I say to Mr Harawira. It is nice to see the member again.

Hone Harawira: You are voting for this, I take it?

MOANA MACKEY: I am voting for this bill, because it sets up a carbon trading market, but I am talking about the emissions trading scheme legislation amendments, which is something quite different. I am a little concerned that Mr Harawira does not seem to realise that this bill is not the emissions trading scheme legislation. I find that more than a little concerning. I know that he has been out of the country for a little while—

Stuart Nash: We’ve got your interest now, Mr Harawira.

MOANA MACKEY: —that is right—but he might like to know that that legislation is coming up later. He might like to talk to his colleague Rahui Katene, who is having to carry the can at the select committee on that legislation. She is doing so, I have to say, with great dignity, given the pressure that she has been put under. He might like to talk to her about that.

But what this comes back to, and why this is so important, is the fact that we will be purchasing all these emissions units from offshore, no matter what the cost. If the carbon price goes up, then that is billions of dollars’ worth of liability being placed on the New Zealand taxpayer, because this Government has decided that a reduction in our emissions target of 10 to 20 percent is not about reducing emissions. That is a really important point to make, because I do not think the general public understands that.

Simon Bridges: How cynical!

MOANA MACKEY: Ha, ha! Mr Bridges should wait until the report comes back from the select committee where it has been confirmed by officials, and then see whether it is still cynical. Alternatively, he could stand up in this Chamber and take a call, and say that the Government will reduce emissions by 10 to 20 percent—but the Government will not do that.

It is very important that we set up international carbon trading, because we need to buy ourselves out of a big problem, according to this Government, given that the companion emissions trading scheme legislation is currently being rammed through the select committee process. We finished hearing submissions this week, and in 2 weeks’ time the legislation has to be reported back. It cannot be done. It is impossible. [Interruption] This is the third select committee I have sat on, I say to Mr Lotu-Iiga, on this legislation. Last year National criticised Labour for the fact that we considered the legislation in 6 months. Now we have 2 weeks to get this legislation back before the House. It cannot physically be done.

When we are being asked to truncate parliamentary process to do it, because we cannot get a departmental report and we cannot get a revision track bill in time, that is a serious problem. Why are we being asked to do this? It is so Nick Smith can go to Copenhagen and brag that he has passed a scheme that will not do anything. That is why. Why not let the select committee go through its proper process, and then go to Copenhagen and say that the legislation is still in the process? Why would the Government not do that? Mr Tremain thinks this is funny. Why would the Government not do that? Why can select committees not do their work?

Simon Bridges: You’re confusing me!

MOANA MACKEY: This is very difficult. I will have to explain it like explaining literacy and numeracy standards to someone who thinks they will actually improve education.

Simon Bridges: The process was good.

MOANA MACKEY: This process was good for this legislation, but the companion legislation relating to the emissions trading scheme has had a very, very bad process. They are actually linked to each other, I say to Mr Bridges. It is very worrying that the Government is so ignorant on the basics of legislation that it is passing. It is very worrying to the Opposition. If Mr Harawira does not realise that this is not the emissions trading scheme legislation, and Mr Bridges thinks that as well and is getting very confused, then I am worried about how we can seriously think that this Government will be able to pass any kind of climate change legislation of any meaning. This is very, very concerning. This bill—

Simon Bridges: What is this bill about?

MOANA MACKEY: “Come on!”, I say to Mr Bridges. Seriously! This bill will help us to facilitate trading in the emissions market. It is important for that reason, and Labour supports it. It is also very good that the select committee has allowed the definition of an emissions unit to be more flexible to allow for innovation. That is good as well. But the fact is that there is no point doing all this when the opportunities in the carbon market have been missed.

We had an opportunity to be one of the very first countries to set up carbon trading in conjunction with a European company. That company looked across and saw great opportunities in New Zealand, on the other side of the world and in a different time zone, but pulled out because of this Government’s moves in stalling on the emissions trading scheme. That is the reality of the situation we face. That is why this has been delayed.

This Government has no sense of urgency around carbon trading. It has no sense of urgency at all. We are setting up a flawed “cap and trade” scheme that has no cap. We will be purchasing an awful lot of emissions from overseas, so we had better get this right because it will be a big part of this Government’s target. We will not be reducing emissions; we will be paying for them. When I say “we”, I mean the taxpayers of New Zealand who will be subsidising big polluters to the tune of billions of dollars, for 90 years or more. That is an outrage.

STUART NASH (Labour) : I must admit that it is good to see Hone Harawira back in the Chamber. He has been in Geneva representing New Zealand at an Inter-Parliamentary Union conference. He said that he gave a speech in front of a delegation; I will tell members what Mr Harawira would have said. He would have stood and commented on what an aspirational country he comes from. He would have commented on what an amazing place he lives in. It would have been fantastic. Now he has come back here and is part of the support party that will ram through an emissions trading scheme bill that is an absolute disgrace. That is the irony. We saw the same sort of behaviour from Nikki Kaye. She stood up and said she was a leader in climate change and a magnificent ambassador for the youth of New Zealand, yet she supports this legislation. Simon Bridges was the same: he supports this rubbish legislation. It is amazing.

I stand in support of the Settlement Systems, Futures, and Emissions Units Bill, but just because I support it does not mean that I support the companion bill, the Climate Change Response (Moderated Emissions Trading) Bill. In fact, it is quite the opposite. There is a big difference. Like other speakers have done, I acknowledge the hard work of officials and I congratulate them. This is a very good bill. Any bill that gets the unmitigated support of both sides of the Committee must be well drafted and must have gone through good processes.

Moana Mackey: Who drafted it?

STUART NASH: That is the thing! This is a Labour bill. It is unbelievable, is it not? Sam stood up and said—

The CHAIRPERSON (Eric Roy): Order!

STUART NASH: Sorry. The acting chair of the Commerce Committee stood up and said this is wonderful legislation. It is fantastic legislation, but that is because it is a Labour bill. It goes without saying.

I also say that, without a doubt, settlement systems contribute to a well-functioning capital market, capital market development, and world-class infrastructure objectives. I think we all agree with that. But most of us would also agree that in this country at the moment we have an underdeveloped capital market. This is perhaps one of the reasons why many New Zealanders prefer to invest in the housing market as opposed to other forms of investment. For example, if we look at our capital markets and the finance companies, then—goodness me—we see what a disaster they were. Many good, hard-working New Zealanders took responsibility for saving for their retirement. Savers put money in finance companies and they were let down absolutely. They have been let down even further by the axing of the contribution to the Superannuation Fund and the cut to KiwiSaver. Then there is the sharemarket. I admit that Mark Weldon has done a superb job in raising the standard of the sharemarket, but we did not have the regulation right. I will use the example of Feltex Carpets. There was a “buy” recommendation on Feltex Carpet shares a week before it fell over. I congratulate Mark Weldon on getting the regulations right around the NZX. There is a lot of mistrust from people investing in banks as profits head offshore. There were allegations in the Multi-party Parliamentary Banking Inquiry, led by Labour, of price gouging. The banks would not turn up to that inquiry and none of the National Party members turned up, and that just increased the mistrust we had.

I am hopeful that this bill will facilitate the trade in carbon units and New Zealanders will embrace it in the knowledge that we have it right and that this is a step to ensuring legislative integrity. I am hopeful that investors will invest and trade in the knowledge that Parliament has got it right, so that this sector of the overall capital market at least is disassociated from market risk. Of course, we understand that there is risk in any sort of international trading, derivative trading, or futures markets, and investors will understand that. But ordinary, hard-working New Zealanders do not want and should not expect other types of risk associated with poor legislation. That is why I say that this legislation is pretty good. It will take away that risk. It is just a shame, as my colleague Moana Mackey said, that the emissions trading scheme, which is before the Finance and Expenditure Committee at the moment, will really suboptimise the ability of people to trade in emissions trading units. That is the shame of this bill. It had the potential to be of huge benefit to New Zealand—absolute huge benefit. [Interruption] Is anyone on the other side keen to take a call? I was half expecting Simon Bridges to stand up. I saw him in the Chamber, but when I heard him ask what the bill was about, I knew we were in trouble. Mr Bridges should listen and he might learn something, or maybe he should go back to his office and read a little bit.

This bill is good legislation. But as I mentioned, I am without doubt a big supporter of anything that improves the economic prosperity of a country. In fact, if we look at the statistics of the 9 years under the previous Labour Government, we see that businesses thrived, GDP flourished, and this country boomed. There was zero debt under the previous Labour Government.

Charles Chauvel: A country good for business.

STUART NASH: Mr Chauvel makes a very good point. The World Bank came out and said that New Zealand was the easiest place in the world in which to do business. We had zero debt. As Mr Cunliffe said earlier, Treasury has come out and said that by 2050 we will have a gross sovereign debt of 250 percent of GDP. That started on this Government’s watch. It is a disgrace.

In my maiden speech when I came into Parliament, I said that my time in this Parliament will have been successful if I can walk away knowing that I have left this country slightly better off than it was when I entered Parliament. But the emissions trading legislation is dreadful. When I heard about the emissions trading scheme, I saw opportunities for forestry. I tell Mr Bridges and Mr Harawira that there was real opportunity in Rotorua for Māori. The emissions trading scheme was going to be a fantastic scheme to really optimise the forestry sector in this country. But when the National-led Government put Labour’s emissions trading scheme on hold, $700 million in forestry investment went south. I am sorry to say that when I say “south”, I am not talking about Invercargill. I am talking about it disappearing in a puff of smoke because the investors said that they could not operate under that level of uncertainty. Millions of seedlings are rotting in the ground. How was Mr Bridges going to go to the people of Rotorua—

Peseta Sam Lotu-Iiga: He’s from Tauranga!

STUART NASH: —and tell them that the forestry industry in Rotorua, which is a huge supplier to the people of Tauranga, had been thrown into disarray? I am sorry; I must admit I got him mixed up. I never know where he is at. He is all over the place, is he not?

Rotorua will be an easy trick for Labour. When I worked in the forestry sector we used to go out and give forestry plans to farmers to plant up unproductive land. They were planting for the value of the timber. But Labour’s scheme—and this is a very good point—meant that people could go out and plant trees not for the value of timber but for the value of carbon credits. That scheme has gone. That has been wiped away, and it is an absolute disgrace. I cannot believe it—$700 million of investment.

Simon Bridges: The people in the gallery are leaving!

STUART NASH: That is because they have heard enough from that side of the Chamber. They have heard the facts, they have got the arguments, and they can now go out and say that the emissions trading scheme under the National Government is a disgrace. They are walking out because it is a disgrace what the National Government has done to the emissions trading scheme. I agree with them. Sue Bradford left because of what the National-led Government is doing, and now people in the gallery are leaving. It is an absolute disgrace! What Labour would have done! What could have been! But we are very lucky: there are only 2 more years. Mr Bridges should probably leave because he does not know what this legislation is about. Tony Ryall does not even know what the health legislation is about. The only thing the emissions trading legislation does is create uncertainty and unemployment. The previous Labour Government believed in taking responsibility. Our emissions trading scheme created a level of certainty, it created responsibility, and I must say it was superb legislation. Thank you very much.

CHRIS TREMAIN (Senior Whip—National) : I move, That the question be now put.

RAYMOND HUO (Labour) : Case study 2 involves a young couple with three kids under 8 years old. They had credit contracts on their cars and television, and rented their home. They were encouraged by the bank to consolidate their finances, which they did with a personal loan. They got into further debt, and the bank refinanced them by putting all their debt on to a credit card. The couple subsequently separated. The credit card was in the male’s name only as he was the income earner. He was unable to cope and was accepted into the no-asset procedure.

From those two cases we can tell that there are good, solid reasons why the no-asset procedure had been designed in the first place—to help financially distressed individuals to reboot their lives. As I said earlier, any form of legislation will inevitably have a catch-all effect. Therefore, it is important for us to strike the right balance and take into consideration all possible factors. On this point, it is a balance between the purpose of the no-asset procedure and the legitimate interests of credit providers. It is the view of the Privacy Commissioner that a total of 3 years on the public register, for a no-asset procedure debtor, would be more consistent with the purposes of the procedure and more proportionate to the period for which individuals are publicly listed following bankruptcy.

Further, there is no international consensus on this in overseas jurisdictions. Therefore, I say that the issue would be better dealt with separately and not necessarily in this bill, and that, given that the Commerce Committee was unable to reach consensus, further consideration and consultation are necessary. To conclude, this is generally a good bill and I commend it to the House.

KATRINA SHANKS (National) : It is my pleasure to take a call on the third reading of the Insolvency Amendment Bill tonight. This bill came before the Commerce Committee, and I acknowledge the hard work of all the committee members, and the officials who helped us with this bill. I also acknowledge the submitters who came forward, especially those from the citizens advice bureaux and the not-for-profit groups, who took time out of their busy days to present submissions to us. They were very powerful.

The no-asset procedure, or NAP, is described as a soft form of bankruptcy procedure. It was introduced as an alternative to bankruptcy in December 2009, and it was mainly brought in for people who are down on their luck as opposed to people who are corrupt or who have tried to take the banks for a ride. The no-asset procedure was for people who have got sick and lost their jobs, or who have gone into unemployment for other reasons, and have debts owing that, due to the change in their circumstances, they can no longer meet. It was brought in for people like that who are down on their luck. Those who are eligible have no realisable assets that can be sold to pay the money owed to creditors, have not entered into a no-asset procedure or a bankruptcy procedure previously, and have debts between the value of $10,000 and $40,000 with no other means of paying them back. After 12 months the debtor is discharged from the debt that is owed and he or she starts all over again—it is like a fresh start. This legislation is also aimed at people in Pacific Island and Māori communities, so that they do not have to go to loan sharks when they are down on their luck to pay off debts. This bill is focused on a certain type of person in a certain type of situation.

This bill fixes up a few little loopholes in the December 2007 legislation. One loophole related to fraudulent debt. Previously, if people had fraudulent debt and went through the no-asset procedure, that fraudulent debt was discharged as well. This legislation closes up that loophole so that people who have fraudulent debt can no longer have it discharged; once they come out of the no-asset procedure they will still have to pay back that fraudulent debt and any interest owed on it.

The other loophole related to gifting. If people who owed money to creditors gifted their money away, they were able to get away with that. Now there is, basically, a claw-back: if people in trouble gifted money away up to 5 years previously, that money can be clawed back. It was really important to fix that loophole.

This bill makes an amendment relating to the official assignee. It extends the period of time that a debtor is participating in the no-asset procedure by a maximum of 25 working days. This measure gives the official assignee a little bit more time to do more work to investigate further areas of concern without affecting the no-asset procedure.

The bill also makes an amendment to extend the period of time that a debtor’s name remains on the bankruptcy public register. This was probably the most contentious issue for the select committee and for the submitters. Previously, people who were participating in the no-asset procedure were on the public register for only 1 year, those who were bankrupt were on the public register for 7 years, and those who were subject to a summary instalment order were on the register for 5 years. It is really important to get the right balance between creditors and debtors. We have to ensure that creditors understand what they are getting into if they are lending money to people with a bad credit-rating. We had an in-depth and heated discussion on that over many sessions and we came up with a compromise. We thought that 5 years would be an adequate period of time to be on the register. It is a significant increase from 1 year, but it is still less than 7 years. People with multiple insolvencies are basically on the register indefinitely. This measure gets the balance right so that creditors who are lending people money can understand what is going on.

The no-asset procedure is relatively new, so we have only quite recent data. From December 2007 to February 2009, 4,000 people were discharged from the no-asset procedure process. That is quite significant. Previously those 4,000 people would most probably have gone through some form of bankruptcy, so the no-asset procedure has been good for them.

Overall, though, unfortunately, insolvency has increased in New Zealand, whereas bankruptcy has decreased. New Zealanders have still not got it quite right in being able to pay back money they have borrowed and in how they manage their finances. The select committee discussed the issue of financial literacy. We talked about having a component of this legislation provide for people who went through the no-asset procedure to be educated on financial literacy. We thought that that maybe took things a little too far. At the moment, we will see how it goes and we can always tweak it later on if we have to.

It has been my pleasure to stand in the third reading and present this speech to the House today. Thank you.

CHARLES CHAUVEL (Labour) : It is a pleasure to follow my friend Katrina Shanks to take a call on the third reading of the Insolvency Amendment Bill. As we have heard, the bill will address a small number of concerns that have arisen since the enactment of the principal Act. It will also amend the public register provisions so that creditors can make informed lending decisions, by ensuring that a public record of people who have been discharged from the no-asset procedure is available for a period, and by providing permanent public records when a person has had multiple insolvency events.

The House has already heard that Labour has a couple of issues with this bill. The first issue is the proposed length of time that people will be on the public insolvency register. Labour members feel it would be better to deal with this matter separately, not in this bill. There has not been proper consultation on it and we view the proposed change as a knee-jerk reaction. The Commerce Committee, ably chaired by Lianne Dalziel, heard submissions that lengthening the time a no-asset procedure debtor remains on the public register would delete the important distinction between bankruptcy and the no-asset procedure. That procedure was introduced to provide a one-off opportunity for financially distressed people to avoid the stigma of bankruptcy and to rebuild their lives. The Privacy Commissioner’s view, with which we agree, was that a total of 3 years on the public register in the case of the no-asset procedure would be much more consistent with the overall purposes of the procedure. Lengthening the time really does mean that there will not be the same distinction between the no-asset procedure and bankruptcy as there was before.

It is the view of members on this side of the House that there has not been sufficient consultation with key stakeholders, and this was reinforced by the concerns that were expressed by the Office of the Privacy Commissioner. Veda Advantage recently stated: “The numbers of New Zealanders unable to meet their financial obligations continue to run at high levels as the country weathers the recession. In the month of July 2009, 461 New Zealanders applied for either bankruptcy or the no-asset procedure.” I think that shows that there is a need for this type of legislation, but the greater need is to do more to provide assistance for people so that they do not get into this sort of position in the first place. It is incredibly sad that 461 people have needed to apply for either procedure.

The Government’s claims that it is blunting the sharp edges of the recession are not helping. Veda Advantage’s statement shows how tough it is for many New Zealanders right now who are heading towards insolvency because of situations that they have no control over. The problem with the Government’s approach is that there is not any overall plan to prevent these sorts of insolvencies. That would have been a much more useful focus than rushing this sort of legislation through the House and claiming to be doing something.

Members on this side of the House believe that much more has to be done to prevent insolvency and people applying for bankruptcy and non-asset procedures in the first place. The Government has to concentrate on putting people into jobs, and move on from its line by line reviews of Government departments, which continue to make more people unemployed in the first place, as so ably pointed out, time and time again, by my colleague Grant Robertson. We have seen hundreds of Telecom service technicians and engineers laid off recently, because Telecom has been foolish or craven enough to try to bring in a new contracting arrangement aimed purely at driving down labour costs and skill levels, in an environment where those skills will be vital—very shortly—to roll out broadband across the country. Let us hope those skilled people do not simply decamp to Australia in the interim, and we do not lose that skill set.

Redundancies are rife in this country right now. It is estimated that more than a thousand people are being laid off every week with little or no redundancy pay, leaving them to struggle to pay mortgages and rents, and support their families. This is horrendous when we consider the impact on the lives affected. So in this third reading speech I am very proud to be able to refer to Labour’s associate spokesperson on labour issues, Darien Fenton, and her campaign to boost support for her redundancy protection bill to give workers a fair and decent level of protection in redundancy circumstances. Her campaign is called A Fair Deal in Hard Times. It has the backing of Labour, the Māori Party, the Green Party, unions, and community groups. It aims to drum up additional support in Parliament to get the redundancy protection bill to the select committee. A fair and decent system of redundancy protection is becoming increasingly urgent in this country as more people’s jobs are at risk. The redundancy protection bill is just common decency; it allows these Kiwis a reasonable financial buffer to help them keep their families together while they look for new work opportunities.

In a similar vein, I have a bill in the ballot entitled the Credit Reforms (Responsible Lending) Bill. That bill is designed to provide some real protection to people in distressed situations, not the sort of window dressing and cosmetics that we see in the Insolvency Amendment Bill. My bill would do two things. First, it would allow for the prescription of a maximum interest rate by the Governor of the Reserve Bank. There is no such power in the country at the moment. I know that you, Mr Assistant Speaker Roy, are as astounded as I am by that, but we would be able to see that power put in place, if that legislation was adopted. Second, we would see the requirement that there be responsible lending practices put in place by fringe or pay-day lenders, who, at the moment, charge 8 percent per week, which, when it compounds—for those who do not understand these things—has the effect that people pay between 2,000 and 3,000 percent per annum to, effectively, loan sharks. We must regulate that sector. I have written to the ACT Party and National and asked them to give their support to this measure, which is the expression of a bit of basic, common human decency in a time of economic distress. I do hope there will be positive responses to that plea.

In closing, Labour believes that this bill is generally a good bill. We will support it, but we think it would have been better to review the processes that were put in place around the no-asset procedure to ensure that there are no unintended consequences, rather than the piecemeal amendment to the time on the register that we see in the legislation. That approach is not supported by the Privacy Commissioner. She is reviewing the time that credit agencies can retain this information, and she should be allowed to complete that process.

Labour would like to see this Government focus on the bigger issues that really matter right now: keeping New Zealanders in jobs, preventing redundancies, ensuring good redundancy provisions are in place, ensuring that there is an environment where people are less likely to become insolvent, and ensuring that people are protected from loan sharks when they are financially vulnerable.

MELISSA LEE (National) : It is a pleasure to rise to speak in the third reading debate of the Insolvency Amendment Bill, and to follow the member who has just resumed his seat, Charles Chauvel. I do not remember seeing him at the Commerce Committee, but it was lovely to hear him talk about the no-asset procedure and how he hoped that it would not create problems in dealing with the loopholes in the Insolvency Act 2006. This bill does exactly that: it closes a loophole that was created in that legislation of 2006.

This bill was introduced earlier in the year by the wonderful Minister of Commerce, the Hon Simon Power, to amend the Insolvency Act 2006 to preserve the integrity of the personal insolvency processes, particularly the no-asset procedure and bankruptcy procedure, and to provide more protection for creditors and potential creditors. This bill will protect not only people in low-income levels who are vulnerable, but also the people who lend money to potential fraudsters. Earlier speakers have said that we need to protect people on lower incomes, and that is definitely so. We do not want fraudsters to rip off people who are very poor. I am sure all members of the House agree with the objective of upholding the integrity of the personal insolvency processes, and pretty much agree with most of the provisions in the bill. I do not see any of the members from the Opposition who participated in the select committee process here in the House, but in the majority of cases we agreed on most things.

At this juncture I would like to thank the officials, who were wonderful in assisting the committee, and to thank my committee colleagues, who were very, very cordial, indeed—both National and Labour, and other minority parties, as well.

Let me start by going over the no-asset procedure. The procedure was introduced in 2007 as an alternative to bankruptcy, to assist people with no means of paying off debt between $1,000 and $40,000, and with no way of getting themselves out of this conundrum. To enable them to have a fresh start, they could apply to go under the no-asset procedure. It was a great opportunity for someone who was in financial distress and could see no way to get out. The no-asset procedure was to help those people to effectively get a clean slate after 1 year and to rebuild their financial lives. It was a great opportunity for people who were genuinely in difficulty. However, it also created a loophole, as we have already heard in this House, by allowing fraudulent debts incurred by individuals going into the no-asset procedure to be wiped. That was one anomaly that needed to be corrected, and the Insolvency Amendment Bill will fix just that.

The recommendations from the Commerce Committee will contribute to and strengthen this bill. The fact that fraudulent debts become enforceable again after a debtor is discharged from a no-asset procedure is fantastic. If people who are in this no-asset procedure for a year—and, as we are proposing, on the register for 5 years—incur interest, they will need to pay back debt after their discharge. Some of the amendments are to prevent fraudulent debts under the no-asset procedure from being cancelled after a person is discharged from it. The current Act does not explicitly exclude fraudulent debts under the no-asset procedure, as it does for bankruptcy. An example of fraudulent debt would be where a social welfare benefit had been obtained on false grounds, such as by providing false details, alternative identity, etc. A reversion to the provisions in the Insolvency Act 1967 about gifts made in the 5 years prior to being declared bankrupt is another amendment. Those provisions put the onus of proving that the debtor was solvent at the time of the gift on to the recipient rather than the official assignee.

This bill also gives more power to the official assignee to investigate a debtor who applies to go on the procedure, by extending the period of discharge by a maximum of 25 days. Any new information on debts, or information relating to concealed assets, can be brought to the attention of the official assignee right up to the day that the debtor is discharged. That means that, with this new information, the procedure can be terminated. I think that is absolutely fantastic.

Another aspect of the bill is to allow the official assignee the ability to recover gifts made by a bankrupt person to a third party prior to his or her bankruptcy. It is an accepted presumption that a person who is declared bankrupt would have been insolvent for some time before bankruptcy was declared. If one is able to make a gift to a third party, then surely insolvency should be questioned. The gift should be seen in the light of a person’s bankruptcy as a way to hide assets; often he or she will set up trusts, etc., to avoid paying his or her creditors. This bill puts the onus not on the official assignee to prove the solvency of the person who has made the gift, but on the recipient of the gift. How can one make a gift to another when one is insolvent? This bill fixes that problem.

The bill also amends the Insolvency Act in relation to insolvent gifts, by extending the 2-year time frame to 5 years prior to the person becoming bankrupt. So if one becomes bankrupt tomorrow, any gift one has given in the past 5 years can be taken back to pay creditors. That ensures that debtors cannot conceal assets from creditors by gifting them to another person.

In earlier stages of this bill as it went through the House, we heard a lot of opposition to the length of time the bill proposed a debtor’s name should remain on the no-asset procedure’s public register. The time period is not to harm poor or vulnerable people. This bill proposes to protect the people who lend money to fraudulent people. It proposes that fraudulent people stay on the list for 5 years. The names of people with multiple insolvencies—for instance, two or more bankruptcies, or a no-asset procedure and a bankruptcy—will stay on the register from 7 years to indefinitely. This measure is just for people with multiple insolvencies.

The no-asset procedure was introduced to protect innocent people who had difficulty paying off their debts. The increased length of time that people with multiple insolvencies will remain on it is to make sure that people who do fraudulent activities are recognised as being fraudulent. Changes brought about by the Insolvency Amendment Bill will prevent fraudulent debtors from avoiding their legal obligation to repay debts, and remove the potential to reward dishonest people, which should not be happening. I commend this bill to the House.

STUART NASH (Labour) : I stand to support the Insolvency Amendment Bill. It amends the Insolvency Act 2006 to address a small number of issues that have arisen since its enactment. The bill preserves the integrity of the new no-asset procedure by preventing the discharge of fraudulent debts and bankruptcy by restoring the official assignee’s ability to recover gifts made by a person prior to bankruptcy. The bill amends the public register provisions to increase the period for which a person discharged from the no-asset procedure is on the record, and to provide for permanent public records where a person has had multiple insolvency events. This is generally a good bill and Labour supports it, but we think it would be better to review the processes that were put in place around the no-asset procedure to ensure there are no unintended consequences, rather than have piecemeal amendment to the time spent on the register. It was not supported by the Privacy Commissioner who is reviewing the time that credit agencies can retain this information.

The Insolvency Act 2006, which was enacted as a result of a major reform of New Zealand’s personal and corporate insolvency laws, came into effect in December 2007. The Ministry of Economic Development proposed that the Act be amended to maintain the integrity of personal insolvency processes and bankruptcy, and, further, to enable better access to respective public registers regarding a debtor’s previous insolvency. The no-asset procedure provisions of the Act are proposed to be amended to, firstly, prevent the discharge of fraudulent debts under the no-asset procedure; secondly, allow the official assignee to extend the time a person is under the no-asset procedure when late information in relation to a debtor’s entry, including valid objections, is received just prior to a debtor’s expected date of discharge; thirdly, allow a no-asset procedure debtor’s information to be kept on the no-asset procedure public register for 5 years from the date of entry to the no-asset procedure; fourthly, reinstate the no-asset procedure debtor’s details on the no-asset procedure public register permanently, when a debtor subsequently enters a bankruptcy process; and, fifthly, amend the bankruptcy provisions to better protect the interests of creditors by strengthening the ability of the Auditor-General to cancel gifts, and to enable public registers to permanently retain details of individuals who have entered into insolvency processes on two or more occasions.

As mentioned, the bill proposes to lengthen the time that information about a debtor remains on the public insolvency register from 1 year to 5 years in the case of a no-asset procedure—

David Garrett: Really?

STUART NASH: —yes, really; it is true and it is the case—and from 7 years to indefinitely in the case of multiple insolvencies. That is defined as two or more bankruptcies—“three strikes and you’re out”; it is probably why the ACT Party is supporting this bill—or a no-asset procedure and a bankruptcy. The Commerce Committee heard that lengthening the time a no-asset procedure debtor remains on the public register would dilute the important distinction between bankruptcy provisions and the no-asset procedure. The procedure was introduced to provide a one-off opportunity for financially distressed individuals to avoid the stigma of bankruptcy and to rebuild their lives. It is the view of the Privacy Commissioner that a total of 3 years on the public register for a no-asset procedure debtor would be more consistent with the purposes of the procedure and more proportionate to the period that individuals are publicly listed following a bankruptcy.

Labour feels it would be better to deal with that matter separately, and not in this bill. There has not been proper consultation and it was a knee-jerk reaction to an article in the paper. There is no international consensus on this in overseas jurisdictions. The Labour Party believes that there should have been further consultation on this part of the bill, before proceeding to make what are significant changes to the public register provisions and significant changes to the lives of people who find themselves in financial distress. It was noted that the provisions are not an essential component of this bill, which was essentially designed to deal with fraudulent debts, and, as a result, had a shorter report-back requirement than would normally be expected. It is the Labour members’ view that there has not been sufficient consultation with key stakeholders, which is reinforced by concerns raised by the Office of the Privacy Commissioner. Therefore, Labour would have preferred that the public register provisions be separated from the rest of the bill.

I would like to mention this slightly unusual part of this bill: the retrospective application of fraudulent debt provisions. There is a general principle that statutes and regulations operate prospectively—that is, they do not affect existing situations. That principle is set out in the Interpretation Act 1999, which provides that enactments do not have a retrospective effect. This bill proposes to apply the proposed new law in relation to the treatment of fraudulent debts under a no-asset procedure retrospectively to all no-asset procedures that remain undischarged on the date the bill was introduced into the House, and to all new no-asset procedures that were entered into after that date. The committee was of the view that very limited retrospective application is justified in this case, as it retains the integrity of the no-asset procedure process by preventing a debtor from being rewarded for a fraudulent act or behaviour and, therefore, does not affect any person’s legitimate interest.

There is something else that I would like to reiterate ever so slightly, and that is the length of time a person is on the public register. As I mentioned, the committee heard that a lengthening of the time the no-asset procedure debtor remains on the public register would dilute the important distinction between bankruptcy provisions and the no-asset procedure. The procedure was introduced to provide a one-off opportunity for financially distressed individuals to avoid the stigma of bankruptcy. There were some on the committee who accepted advice that it is a matter of balancing the interests of debtors, who seek to move on with their lives, which we understand, and creditors, who require reliable information about a debtor’s history to make informed business decisions. The committee considered that the approach proposed in the bill strikes a reasonable balance between those interests. The diversity of reasons for financial distress means that the length of time the information remains on the public register will inevitably be more appropriate for some debtors than others, no matter what the chosen period is.

I reiterate that Labour believes there should be further consultation on that part of the bill before proceeding to make significant changes to the public register provisions. It was noted that those provisions were not an essential component of this bill. Essentially, the bill was designed to deal with fraudulent debts, and, as a result, had a shorter report-back requirement than would normally be expected. It is Labour members’ view that there has not been sufficient consultation with key stakeholders, which is reinforced by the concerns raised by the Office of the Privacy Commissioner. Labour would thus prefer that the public register provisions be separated from the rest of the bill.

JONATHAN YOUNG (National—New Plymouth) : Thank you, Mr Nash, for leaving me just a good couple of minutes to speak on the Insolvency Amendment Bill.

This bill is to bring some necessary small but significant amendments to the Insolvency Act 2006 that will increase the integrity of particularly the no-asset procedure in order to prevent people from discharging debts that were acquired fraudulently. The bill covers four areas: fraudulent debts, the discharge period under the no-asset procedure, insolvency gifts, and the personal insolvency public registers.

Let me touch on one aspect in the moments that I have regarding insolvent gifts. When a person or company is in financial difficulty, an unscrupulous person may attempt to remove assets that could otherwise be sold to pay a creditor. A person may gift money, land, a vehicle, or some goods that have a realisable value. A person may sell an asset to a friend or family member for a nominal amount. This bill will stop that from happening. Thank you. I commend this bill to the House.

The ASSISTANT SPEAKER (Eric Roy): The question is that the motion be agreed to. Those of that opinion will say Aye, the contrary No. The Ayes have it.

SUE KEDGLEY (Green) : I raise a point of order, Mr Speaker. I would like to call for a division—sorry about that.

The ASSISTANT SPEAKER (Eric Roy): All right. It is the end of the week. I am not sure whether I should put leave for that, but I will accept what the member says. The member is now calling for a party vote. The Clerk will conduct a party vote.