Hon SIMON POWER (Minister of Commerce) : I move, That the Securities Disclosure and Financial Advisers Amendment Bill be now read a first time. At the appropriate time I intend to move that the Securities Disclosure and Financial Advisers Amendment Bill be referred to the Commerce Committee for consideration, with the committee to report finally to the House on or before 30 April 2009.

This bill is another part of this Government’s response to the current international financial crisis. The most immediate financial sector issue has been the breakdown in credit markets, which has resulted in credit rationing restricting, to some extent, New Zealand firms’ access to capital. This bill will assist in removing unnecessary impediments to raising capital, while continuing to ensure the timely disclosure of relevant information to prospective investors—a balance that is very important to get right.

Across the OECD, Governments are working with financial regulators to shore up financial institutions in response to severe liquidity shortages and a breakdown in lending markets. However, any steps to improve access to capital must be balanced against the interests of investors. We must not make the mistake of relaxing the rules to the point that we undermine investor confidence, which is already under strain. I would ask the select committee to address this balance directly at the time that it considers submissions.

In November last year the Capital Market Development Taskforce released an interim report in response to the financial crisis, and I acknowledge the work of my predecessor, the previous Minister of Commerce, the Hon Lianne Dalziel, in setting up that task force. That report made a number of recommendations on how securities law could be improved to increase the availability of capital and reduce the compliance costs of raising capital. This bill addresses a number of the task force recommendations requiring legislative change that are considered to be most likely to make immediate differences for firms seeking to raise capital.

The bill principally provides for “a simplified disclosure prospectus”. It may be used by listed issuers who are already subject to continuous disclosure requirements but who would otherwise be required to produce a separate disclosure document for each offering. This new type of prospectus will enable stock exchange - listed issuers to offer designated debt and equity securities without the need to duplicate information they have already publicly disclosed under their continuous disclosure obligations. The simplified disclosure regime applies only to those securities being offered that rank equally or preferentially to the issuer’s existing listed securities, and may not be used for the issue of securities such as units in, say, a unit trust or managed fund.

The detail and content of the simplified disclosure prospectus will be contained in regulations to be promulgated under the regulation-making authority of the Securities Act 1978. Information material to the offer that has already been released under continuous disclosure will appear in list form. The simplified prospectus must also include a signed statement from directors to the effect that the issuer has complied with the requirements of continuous disclosure, and that they can confirm that all information material to the offer has been disclosed. It is my bet that this matter will receive some attention at the select committee, and I look forward to hearing the views put forward, and the advice of the committee, on that specific point.

The Securities Commission will monitor and enforce compliance with the simplified disclosure prospectus regime, once it is introduced, and will have the ability to prohibit an issuer from using the regime. The commission will also have the ability to extend the date of allotment under a simplified disclosure prospectus when the commission thinks it is desirable for an extension order.

In addition, the bill proposes other, relatively technical changes to categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act. The cumulative effect of these changes will be to make it easier for all businesses, listed or unlisted, to raise capital. For example, changes to the categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act will apply to both listed and unlisted companies, including small and medium enterprises. This will particularly benefit private companies—which traditionally seek capital by so-called shoulder-tapping of known investors directly—that fall into an existing exemptions category, such as when they are well-known to the issuer. Investors will not be disadvantaged by these amendments, because exemptions from disclosure requirements apply only to investors who already possess the information necessary to make an assessment of the offer, are capable of obtaining the necessary information, or, indeed, have sufficient experience in the market not to need the standard level of disclosure.

The bill also provides an opportunity to correct an error in the Financial Advisers Act 2008, which was passed by the House in September 2008, and to make a number of other minor, tidying-up amendments.

Let me reiterate that the Government’s primary objective in this bill is to ensure that firms have cost-effective access to capital, whilst ensuring that investors receive full, accurate, and timely disclosure of information. I should also add that I am also considering with some urgency a number of other non-legislative recommendations proposed by the Capital Market Development Taskforce, including possible changes to the stock exchange listing rules and the securities disclosure regulations. In the medium term, I will undertake a full root and branch review of the Securities Act, looking at whether the regulatory scope is sufficiently clear. The review will also consider whether the overall regulatory design is optimal, and will examine the efficiency and effectiveness of the institutional arrangements currently employed. Specifically, this will include the role of corporate trustees. The Securities Commission itself and the Registrar of Companies will also be part of that review.

The House can be assured that it is this Government’s intention to provide solutions that not only will minimise the harm to our economy in the short term but also will help to turn the tide over the medium term. These reforms will help to ensure that a well-balanced and strong financial sector emerges from this financial crisis in which regulation is effective, competition is encouraged, and, significantly, investors are protected.

This bill has been developed quickly as part of this Government’s response to the global financial crisis, so I invite directly the select committee to consider whether this bill meets the objective of easing capital requirements whilst at the same time significantly balancing the securing of investor protections. It is the Government’s view that it does, but we look forward to advice in the report back. I also encourage both the industry and investors to remain actively involved in the development of the bill through the select committee process, to ensure that the legislation is workable and effective in achieving its objectives.

I place on record my appreciation of the work of the Capital Market Development Taskforce in identifying the policy issues that this bill attempts to remedy, and I thank the officials of the Ministry of Economic Development for their swift response in drafting this bill. I commend this bill to the House.

• Debate interrupted.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I begin my contribution to the debate on the first reading of the Securities Disclosure and Financial Advisers Amendment Bill by simply noting that I am very pleased it was not introduced under urgency. A number of bills were dealt with under urgency during the first 2 parliamentary weeks this year in order to meet the Government’s—what was it called?

Moana Mackey: The 100 days of action.

Hon LIANNE DALZIEL: Yes, the action plan. But I do want to make this point seriously, because tabling a bill and giving that 3 days’ time for scrutiny is always a preferable course of action when it can be achieved. Obviously, because this bill will be referred to a select committee, it was able to be achieved, and I am very pleased that it could be done. I think this is particularly the case where we talk about securities law reform, because confidence lies at the heart of everything that we do in respect of securities law. Therefore it is very important that we get the framework right when we make changes. I listened very carefully to the Minister of Commerce’s comments, and, as the chair of the Commerce Committee, I will certainly undertake to ensure that full scrutiny is applied to this bill—as, indeed, I would with any bill.

That being said, Labour generally supports the bill. As the Minister said, it is designed to provide for the use and regulation of a simplified disclosure prospectus, by stock exchange - listed issuers offering certain debt and equity securities. In that regard, it does not reduce the information required to be disclosed. In many respects, it merely removes the duplication of information already provided pursuant to continuous disclosure obligations. Although the stock exchange has those obligations around continuous disclosure, the information that needs to be provided in a prospectus is essentially provided anyway, so this bill removes duplication. I guess that is why the Minister is able to say with reasonable confidence that the bill is designed to remove impediments to capital-raising without undermining investor protection.

I think the Minister’s point, though, about why it is so important that close scrutiny is applied to this legislation, is important because the substance of this particular reform lies within the Review of Financial Products and Providers, and it was to be included in the current review of the Securities Act. I am certainly pleased to see that the Government is proceeding with that. In many respects, this bill is simply bringing forward something that would have happened otherwise.

We have already had a number of bills go through this House that have failed their regulatory impact statement requirements. So I will give praise to this Minister for having an excellent regulatory impact statement, even though this brings forward something that has not been fully consulted on yet. I will give him 10 out of 10 for this regulatory impact statement. It will be a relief to Rodney Hide, I would imagine, to—

Moana Mackey: Finally.

Hon LIANNE DALZIEL:—finally have legislation introduced that meets the requirements of the framework that the previous Government put in place around regulatory impact statements.

What I like about this regulatory impact statement is that it acknowledges that in fact this issue was part-way through a process of consultation because the Capital Market Development Taskforce had suggested a mechanism for bringing this forward in order to improve access to capital under the current conditions. I think that the way it has been presented in this report and undertaken in this consultation beyond that, in a very short time frame, has been excellent. I take my hat off to the people involved.

According to the regulatory impact statement, the Ministry of Economic Development consulted with a targeted group of industry experts in order to agree technical details to give proper effect to the policy, and worked very closely with the Securities Commission in the development of the policy. Given the role of the commission in terms of oversight that it will pick up as a result of this legislation, I think the right people have certainly been chosen to meet and discuss this bill.

The other thing I will comment on is that officials have notified Australian authorities of the proposals in the context of the Agreement Between the Government of Australia and the Government of New Zealand in relation to Mutual Recognition of Securities Offerings. Again, this is a vital piece of making the relationship between Australia and New Zealand work, and that is to give advance warning of any changes that we make in our legislative framework. Having been the Minister who signed that agreement with the Australians, I am very pleased that that has been picked up, and that the notification has been made. I know that the Commerce Committee will want to know what the Australian Government’s response to the proposals in the legislation has been, because how that mutual agreement works will be very dependent on the answer that is given.

The other thing the regulatory impact statement does—and it is an excellent approach, one that is required by the process that the previous Government put in place—is to set out the alternative options, with option 1 being the status quo. That is not an option if we really do have a desire to bring down the barriers to capital-raising. The fact that the regulatory impact statement starts with the words “The world is currently in the midst of the worst financial crisis for many decades. The most immediate and pressing financial sector issue has been the breakdown in credit markets.” really does get to the nub of the problem. I think it is a little bit better than the Job Summit’s cycle track idea, which is probably why it came from the Capital Market Development Taskforce.

The next option was “listed issuers may offer securities with only an investment statement”. The third option was “listed issuers may use a term sheet for debt offerings”. The preferred option was “to provide for a new prospectus that may be issued by listed issuers of designated debt or equity securities who are subject to continuous disclosure requirements, and to amend the provisions for exemptions from standard disclosure requirements.”

As I say, the regulatory impact statement does exactly what the regulatory impact process was designed to achieve. It alerts people to all of the options that are available. It critiques each one of them. Then it sets out a preferred path, which is based on the information that has been collated from the consultation process. It really is a very good process. So I say 10 out of 10 to the Government for its regulatory impact statement. Given that it got nought out of 10 for all of its other bills, this is a marked improvement, and I hope to see all of the Government’s subsequent legislation meeting the very high standard that the Hon Simon Power has set for this House. The Labour Opposition will support the referral of the Securities Disclosure and Financial Advisers Amendment Bill to the Commerce Committee.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : I rise to support the Securities Disclosure and Financial Advisers Amendment Bill as well. I am glad that I follow the previous Minister of Commerce, and I acknowledge the role she has played in this process.

I will give a bit of background. We have heard that this bill addresses some of the issues around the global downturn. In my experience in my electorate, I know from talking to a number of both large and small businesses—corporates—that one of the big issues facing our business community and workers in our country is the global credit crisis, and the problem of gaining access to funds. This bill addresses that by providing for the removal of some of the impediments to capital-raising, while acknowledging that the timely disclosure of relevant information to potential and actual investors is still critical to the process of investing in companies.

Part 1 talks about how we can simplify the prospectuses that are sent out to investors in the form of an investment statement. Having worked on prospectuses myself—from the legal perspective of compiling prospectuses and offer documents for the raising of capital, both debt and equity—I do understand how this bill will streamline some of the duplication of the information that is disclosed by companies. One thing that we should be careful to ensure is that investors still get the right type of information on which to make informed and sensible decisions. This bill does not lighten the load on the disclosure of that information, but it does try to eliminate some of the duplication that comes out of some of the disclosure documents.

I am glad that the—she has gone now—previous Minister of Commerce, Lianne Dalziel, referred to the regulatory impact statement in the explanatory note of the bill. That states quite clearly that the preferred option for some of the amendments relating to listed issuers is to streamline the disclosure requirements and to amend the existing definitions for exemptions from standard disclosure requirements. One of the examples that has been put forward is in terms of the persons who are subject to such requirements. One of them concerns those persons who have made investments in the last 12 months. I think that is a positive, and I think the Minister has done very well.

The issue really is about building up the confidence and trust of our investors. We have seen, both here and across the world, that the equity markets are really suffering. Last night the Dow Jones plummeted to an all-time low since the US presidential election. I think what we need from our legislators are a sense of purpose and an understanding that a lot of our corporates are suffering because credit is not readily available. I think the Government has done a great job in its first 100 days. Some people would disagree with that, but we have tried in a number of different ways and in a number of different areas to make business easier to transact. That has been done through the Resource Management Act reforms, through the recently enacted legislation that has put in place a 90-day probationary period of employment, and through passing bills like this one, which is business-friendly while still acknowledging the roles that workers and businesses play in our communities.

I support this bill. It recognises that we are in a predicament that we have not been in for a number of years. It is about helping our businesses to raise the requisite capital—not only the working capital that is needed for the day-to-day operations of our corporates but also the type of capital that businesses raise to build plants and machinery, and to hire workers. The issue is about growth, it is about productivity, and it is about jobs. The recent Job Summit, which was a success last Friday—

Nathan Guy: Hugely successful.

PESETA SAM LOTU-IIGA: Hugely successful, as the chief Government whip would say. It was hugely successful because we brought together a number of different parties from across the political spectrum, a number of different parties from across the community, the unions, business leaders, and various other community leaders. It was not dominated by politicians. We need to understand that the job will not be easy. If we are to get out of this recession, the right people need to be in place, the right Government has to be in place, and the right type of legislation has to be in place. That is what this bill is about. It is about protecting investors who need to be protected from corporates—and there are some out there—that are, shall we say, unsavoury and not very trustworthy.

But this bill is also about allowing our businesses to grow and develop. Many of the changes we see in the bill are about avoiding double-ups and reducing compliance costs. Businesses are totally run down by compliance costs, in terms of overburdening taxes and also the reporting requirements that have been put in place by Governments. We need to free businesses up a little and allow them to do what they do best, which is to deliver products and services to New Zealanders, and to deliver products and services to foreign countries so that we can reduce an overburdening balance of payments deficit.

I speak in favour of this bill not because it will save us from the economic recession—it is a small step. The previous Minister of Commerce mentioned that the Securities Act needs to be looked at, reviewed, and reformed, and we will give careful consideration not just here in the House but also in the select committee to producing the type of legislation that promotes growth and businesses and also promotes the interests of our workers, who need their jobs to be protected.

In summary, I speak in favour of this bill. I think it is a good bill, and I think it will be passed with the generous support of our friends across the House. The bill does need to go through the select committee process, where we will refine certain clauses. But the bill is a good start. We have made a good start to our administration, and we will move forward with certain legislation.

CHARLES CHAUVEL (Labour) : I rise to speak in support of the Securities Disclosure and Financial Advisers Amendment Bill. I do not intend to repeat at length the reasons why Labour will be supporting this legislation. They have been very ably set out by the previous Minister of Commerce, Lianne Dalziel.

Nathan Guy: You support everything nowadays.

CHARLES CHAUVEL: It is great to be able to support legislation that we began and that the National Government has wisely, on this occasion, adopted. The main proposal in the legislation is to provide for the use and regulation of simplified disclosure prospectuses by stock exchange - listed issuers that offer certain debt and security instruments. As I understand the proposal, it does not reduce the information that is already required to be disclosed. Rather, it removes duplication requirements for information that is already provided under the continuous disclosure regime that is now in place in our markets. It will also remove unnecessary impediments to capital raising while, hopefully—if the balance in the legislation is struck right, as we believe it is—not undermining investor protection, which certainly we on this side of the House think is a very important part of the armoury that is required in this area.

The proposal that is set out in the legislation comes from a set of recommendations made in an interim report issued by the Capital Market Development Taskforce at the end of last year in response to the global financial situation. I would like to pay tribute to the task force for the work it did, and also to Lianne Dalziel for her foresight back in July last year in setting up the Capital Market Development Taskforce. It was clearly the right thing to do, given the work that Labour had done to build up New Zealand’s capital markets, for example by encouraging—at that stage—700,000 people to join KiwiSaver, our business tax package, and the changes to the portfolio investment entity regime. All of these played a real and vital role in strengthening capital markets in New Zealand, and the work of Rob Cameron and his team on the development task force, particularly judging by the interim report in November 2008, took all those steps further, by suggesting that a more sensible regulatory regime be put in place. My colleague Stuart Nash is going to talk at further length about the desirability of strong capital markets in New Zealand and about the credibility of the New Zealand Exchange as a result of the regulatory and other reforms put in place over the last 8 years by the Labour Government.

The substance of the capital market development task force interim report proposal was consulted on as part of the review of financial products and providers. It was intended, as I think the Minister said, to be included in the current review of the Securities Act. But in that regard clearly the bill just brings forward something that one would expect to be introduced in any event later this year.

I see that the bill also tidies up rules for exempt persons and people deemed by the Act not to be members of the public for the purposes of disclosure. Clearly that is a sensible technical amendment that ought to be supported. Anything that removes duplicating requirements in this area is to be supported. There are also minor amendments to the Financial Advisers Act—legislation that came before the Finance and Expenditure Committee in the last Parliament when I was chair of that committee, and I hope I can say that it is very good legislation.

It is useful to reflect on the much better regime that now exists in New Zealand in this area as a result of that legislation, to which this bill will make a technical amendment. That is also as a result of the Financial Service Providers (Registration and Dispute Resolution) Act, which for the first time has put in place a registration requirement for non-bank financial providers to tidy up what was at one stage a real Wild West situation, something that really embarrassed New Zealand as far as our international reputation was concerned.

The other important measure that was a counterpart to the Financial Advisers Act and also to the Financial Service Providers (Registration and Dispute Resolution) Act was the Reserve Bank Amendment Act—legislation that also came before the Finance and Expenditure Committee last year and that had cross-party support. The Reserve Bank Amendment Act, in respect of non-bank deposit takers, put in place, for the first time, a proper prudential supervision regime so that people who put their money in credit unions or in other non-bank entities that take money from the public can have the confidence that there is proper oversight of those entities, proper oversight of their governance, and proper oversight of the deposit levels they must have, so that people can have real confidence that if, as in many cases, they are putting their life-savings with these institutions they are doing so within the framework put in place by the last Government—a much more responsible regime as far as the whole prudential oversight of the market is concerned. This legislation continues in that vein and helps to tidy up this general area of the law.

I would like to observe that there is probably one area of the law that still needs some tidying up, and that is the area of pay day lenders or loan sharks. I have said that the bill before the House will do some good tidying up in its respective area and it will also make the technical amendment that I have mentioned to the Financial Advisers Act. But the one thing that the suite of measures that I have also spoken of—the Financial Advisers Act, the Financial Service Providers (Registration and Dispute Resolution) Act, and the Reserve Bank Amendment Act—does not do is to regulate the activities of these pay day lenders, many of whom are, frankly, loan sharks. Their activities are going to become of even greater concern as we head into the sort of economic climate described by Lianne Dalziel and by the previous speaker—a very difficult climate particularly for the less well-off in society.

When those people coming into Wellington City see a sign off the Vivian Street motorway on-ramp that says: “Loans available at only 8 percent”, and do not see the “per week” addendum at the bottom of the sign, they probably do not realise that “only” 8 percent per week amounts to 5,370 percent per annum. That is what so-called “only 8 percent” interest a week means on the sign that people see. This Parliament is one of the few in the Western World that has not yet done anything to regulate the outrageous interest rates charged by pay day lenders in suburbs like Porirua, Newtown, and in South Auckland. We need to rise to that challenge.

So I am delighted to use the concluding moments of my speech today to foreshadow that I will, at the next opportunity, put forward in the ballot a Credit Reforms (Responsible Lending) Bill. One of the things that that legislation will do is allow for the regulation of those usurious rates of interest so that our fellow citizens will not be facing 5,370 percent per annum interest charges just because they need a loan to tide them over from pay day to pay day. This legislation that I propose will also amend the Credit (Repossession) Act so that if a lender does not make a proper inquiry about the borrower’s ability to repay, then in the event of a default the lender will be required to repay only the principal amount rather than an outrageous set of charges in interest. Once we get the legislation that we are now speaking about through the House, it will go through along with that suite of measures that I have mentioned—the Financial Service Providers (Registration and Dispute Resolution) Act, the Financial Advisers Act, and the Reserve Bank Amendment Act—and we will then be able to hold our heads high and say we do not have a Wild West financial system in this country.

KEVIN HAGUE (Green) : The Green Party will oppose the Securities Disclosure and Financial Advisers Amendment Bill. I spoke earlier in this House in support of the Government’s assistance package for small business, but at the same time I expressed frustration at the lack of coherence in the Government’s response to the overall financial crisis. At the same time that small business was being lent a helping hand in the form of relief from taxation and over-regulation, an extra obstacle was being put in its place in the form of the withdrawal of the research and development tax credit. I said that the response to the crisis from this Government, and indeed from other Governments around the world, would in fact stoke the fires that will lead to the next, larger financial crisis. An economy based on the paradigm of continuous economic growth through consumerism, irrespective of the environmental and resource constraints within which it must operate, is doomed to failure.

It is typical of such paradigm failure that Governments also fail to make important distinctions. Green Parties around the world have been campaigning for the use of more useful indicators of the health of an economy than the GDP. GDP makes no distinction at all between economic activities that are helpful and productive, and those that are damaging and destructive. Both count equally towards GDP. It is like using both wellness and sickness indistinguishably to measure someone’s health. Yet that is what our Government does. Any kind of economic activity, and any kinds of goods that consumers are persuaded to buy, are equally encouraged.

We see the same failure to make a critical distinction in relation to jobs. In the House the Green Party has asked how many of the jobs the Government hopes to create from its infrastructure package would be green-collar jobs—in other words, jobs that would form part of a sustainable economy. The Prime Minister’s response to that indicated that the Government neither knew nor cared; a job is a job as far as it is concerned. There is not time in this speech to really unpack the idea that anything that one person is prepared to pay another to do is of equal value to something else, but only a moment’s thought should be sufficient to see that the question goes to the heart of what kind of society we wish to live in, let alone what kind of natural environment we want to leave for future generations. It seems extraordinary that the Government does not care about that.

Once again, in this bill we see the Government’s failure to make appropriate value judgments and recognise that a more sophisticated response is needed. Not all deregulation is created equal. Some regulations are more trouble than they are worth, and by all means let us get rid of them. That is why we supported the Government’s small-business package. But other regulations serve a useful purpose or, as in this case, provide an important safeguard for New Zealanders.

The speculative economy perches vulture-like, bloated, and flatulent upon the shoulders of the real economy, weighing it down. It is failure in that speculative economy that now threatens the real economy in which people actually make products or services that others really need. The succession of burst bubbles in the speculative economy has been fuelled by greed. But the reality is that productive businesses will need capital, particularly, as it happens, because of the withdrawal of Government assistance for research and development. The goal of the bill, to remove unnecessary impediments to raising capital, is therefore a sound one.

But given the dynamics that led to the credit crunch, we have to wonder whether the Government has been seeking guidance from the Red Queen in Alice in Wonderland in bringing this bill forward. Requiring less disclosure to potential investors and providing fewer safeguards are the absolute reverse of what is required. It is important to recognise that giving good businesses access to capital requires a rebuilding of investor confidence. That will not be achieved by providing less information; rather, that will require greater transparency, greater Government scrutiny, and increased regulation. Unsurprisingly, that is what most Governments around the world have been doing. I guess we should like the fact that our Government is prepared to think for itself, but the outcome in this case is bizarre.

I want to say a word or two about those special investors, the sophisticated habitual investors who are putting in $500,000 or more, for whom even less disclosure is proposed. My mother used to talk about some people having more money than sense. Perhaps in this case it would be more correct to talk about having had more money than sense. If the unmitigated and still ongoing series of corporate failures, arguably starting with Enron, and the credit crunch have taught us anything, it must surely be that the so-called experts show exactly the same lapses into gullibility and greed that Roosevelt railed against in launching the New Deal. For example, how about all the good and the great, the experts who have lost their shirts investing in Madoff’s transparent Ponzi scheme? That is just like the aeroplane game and numerous other pyramid-style investment and moneymaking schemes that plagued New Zealand in days gone by.

The lack of expertise by so-called experts was also demonstrated in the audit and accountability mechanisms in many of those cases, and indeed at international level also. As recently as 2006 the International Monetary Fund was pointing to Iceland as one of the absolute stars of the world economy. The most recent number I heard was that at the point of collapse of Iceland’s economy, its financial institutions owed six times the entire economic product of the country.

The point is that the decisions made by those special investors have been proven again and again in recent times to be ill-judged and to have in very large measure shaped the crisis we are now experiencing. Their bad decisions affect us all profoundly. More disclosure and regulation is required, not less. Clearly in Iceland’s case a lot changed between 2006 and the present day. Actually, the same applies here, and with all due respect to the consultation work done by the Ministry of Economic Development, which is referred to in the explanatory note of the bill, consultation undertaken on these matters in 2006 is almost certainly completely worthless. It seems extraordinary that a Government that was paying attention to international events would apparently be unaware of that. I am drawn to an irony in the fact that the Minister says this bill has been drafted in a hurry, in response to the crisis, but the Labour members instead talk about the Government having inherited Labour’s bill. I suspect that the latter explanation could be the real one.

Right now, the priority for consultation on how to improve the sector is consultation with the many thousands of New Zealanders who have been victims of the numerous collapses of apparently sound investment and finance companies. When I first started drafting this speech, it appeared that there had been 26 of those collapses. More recently, I have been informed that the number had grown by yesterday to 45—and counting. It is good that the bill is going to a select committee, and I praise the Minister for that. If the bill passes its first reading, then I urge the select committee to seek out the views of those investors who have lost their money, and if it does not, then the Green Party will.

Ever since the economic crisis first struck, the Green Party has been speaking about the need for a Green New Deal: a raft of measures intended to address the crises in the environment and in energy concurrently with the financial crisis, moving our economy on to a long-term sustainable basis. To pretend that it is possible to do otherwise is ultimately futile and will condemn New Zealanders to more and more severe consequences for our way of life, including bigger and worse financial meltdowns while mortgaging our kids’ future. The Green Party has, for example, supported the call for a new Bretton Woods agreement. Our central bank needs to be more proactive in supervising our own financial industry.

We also support the very sensible recommendations of the bank workers’ union, FinSec, for the reform of the finance industry, including the establishment of an independent financial consumer agency, establishing a New Zealand code of lending practice, establishing a code of responsibility for the finance sector, and strengthening the role of the Reserve Bank in licensing and supervising financial institutions’ lending practices. In many cases the interaction between an institution and a person who is borrowing money is similar to that between an institution and a person who is investing. Both transactions require full transparency, full disclosure, understanding, consent, and ethical behaviour from both parties, with appropriate independent oversight and enforcement.

The Green Party will be voting against the first reading of the bill. It is an artefact of the past, left behind by changed circumstances, and it needs to be consigned to the dustbin of history, save for the minor amendments to the Financial Advisers Act. The Green Party wants to see investor confidence rebuilt, because that is the only way that we will reduce the barriers to raising capital for good, sustainable businesses. That will be accomplished only through greater disclosure, not less, and by a more active role being taken by the Government.

JOHN BOSCAWEN (ACT) : I rise on behalf of the ACT Party to support the first reading of the Securities Disclosure and Financial Advisers Amendment Bill. Unlike the Green Party, we will be supporting this bill going to the select committee. However, I agree with my colleague Kevin Hague that this country is facing a total failure of investor confidence, and that is one of the biggest challenges that we have to rebuild. The Minister said that this bill will be broken into two parts when we reach the Committee of the whole House. The first part will be the Securities Disclosure Amendment Bill and the second part will be the Financial Advisers Amendment Bill. The regulatory impact statement, which the Hon Lianne Dalziel referred to earlier, states that the world is currently in the midst of the worst financial crisis for many decades. The most important and pressing financial sector issue has been the breakdown in credit markets. This bill seeks to go some way towards building up that confidence in the wholesale investor markets, with larger institutions dealing with publicly listed issuers. Although I acknowledge the lack of confidence that Mr Hague referred to, our party will be supporting this bill. We think the bill is very important because it takes some small steps towards minimising the cost of regulation and making it easier for companies to raise finance in this current market.

The part that will become the Securities Disclosure Amendment Bill seeks to make it easier for listed issuers to raise either equity capital or debt capital when it comes to raising money from, if you like, habitual investors or those investors who have already committed over $500,000 to the company in the last 12 months. What it enables the issuer to do is to issue a simplified disclosure prospectus, so rather than having to repeat information that is already in the public domain, that information is assumed to be there. We do not believe that the concerns the Green Party has in that regard are real, and we think this legislation will go some way to minimising the cost of raising capital.

The part that will become the Financial Advisers Amendment Bill makes a number of technical amendments to the Financial Advisers Act that was passed last year. I thought it was very interesting that in question time earlier this afternoon the Labour Opposition continually referred to the job losses at Sealord, Irwin Industrial Tools, and GE Money. Although I acknowledge that those potential job losses are very real, I think that one of the biggest issues this country has faced has been the absolute devastation of many thousands of families, mainly retired families, who have invested money over the last 4 or 5 years in finance companies. As Mr Hague says, the losses now total 46. That, I think, has been a disgrace on the previous administration. It concerns me greatly that those losses in some part are still continuing.

I think what we have to do is address the lack of confidence, because we have seen a number of straight, outright rorts. Some of the companies concerned are being brought to justice in the courts. I will give an example. What some of the finance companies have done over recent years is to simply create artificial profits. They have lent large sums of money to their client customers, they have done it at a market interest rate—for finance companies, below the going rate—but they have loaded the loan with large upfront fees. For example, a finance company lending a major property development $50 million might charge an upfront fee of $10 million, and that immediately allows the finance company to bring that $10 million charge to profit in the current year. It has not received that money in cash, but it can book the money as profit, and the finance company charges it or capitalises that sum to the loan.

What then happens is that new money comes in the door of a finance company as cash, and because the company is then solvent and has that cash, it is able to pay that money out in dividends to its shareholders. What we have seen in the last 2 or 3 years is the collapse of a large number of finance companies, which can be put down to one thing, and one thing only, and that is straight-out fraud. We need to bring the people who perpetrated and initiated those schemes to justice.

I notice also that Mr Hague referred to the fact that the Government needs to seek out the people who have lost money. He says that if the Government does not do so, the Green Party will. I am also very conscious of that, and I actually met some investors yesterday. I met Ron Jensen and his wife, Kathleen Jensen, who invested $200,000, supposedly in an apartment to be built by Blue Chip. Mr Jensen was told by the solicitor acting for him that the solicitor could look out of the window and see the building under construction, that it was in strong shape, and that it was a good and sturdy building. That building does not even exist; it is a car-park. That gentleman, Mr Jensen, is in his mid-70s and he faces losing the sum of $200,000.

I met Owen and Margaret Dawe yesterday afternoon in Auckland. Their losses could exceed $500,000. They were sold an apartment—admittedly their apartment existed—but they were sold two apartments with a guaranteed income. A number of representations were made to them, and those representations were false and fraudulent. They have evidence that the document they completed for their application was falsified after they had signed it.

The measures contained in this bill go some way to making it easier for our listed companies to raise money in the current environment, but the biggest challenge we face is restoring the confidence of the smaller investors. Those are people who have worked their entire lives, are in their 60s and 70s, and have invested money with organisations they deemed to be safe, based on representations that have been proved to be fraudulent. What this Government needs to do, if it is concerned about the people of this country, is to look into those schemes, investigate them, and bring appropriate legal action. It also needs to put a moratorium on attempts by finance companies to put properties through mortgagee sales, particularly when it involves an issue of fraud. Until those cases are brought to court and determined, the ACT Party believes there needs to be some sort of moratorium.

Finally, I would like to comment on one of the issues that the last Government introduced—the Government guarantee of finance companies. Mr Hague referred to the fact that up until yesterday, 45 finance companies had collapsed, and now there are 46. There is something very special about that 46th company, which is called Mascot Finance, in that it has collapsed with the benefit of a Government guarantee. What is surprising about that Government guarantee is that Mascot Finance has not raised one single dollar since that guarantee was put in place. That guarantee will guarantee the former investors—and good on them, because they may well have been duped by fraud. But no charge has been made to that finance company, so essentially what we have is the Government subsidising private companies, which enables private companies to offer a guarantee at interest rates that are now well and truly above the market rate.

Yesterday we saw the collapse of Mascot Finance. Many millions of dollars will need to be reimbursed at cost to the taxpayer, and the taxpayer will not get an appropriate return on those funds—on that guarantee. I do not deny that there is a need for a guarantee to shore up confidence, but it should be done at a commensurate return to the taxpayer. Yesterday we saw the first loss, and I have no doubt there will be many more. We need to ensure that we are not subsidising private business. Thank you, Mr Assistant Speaker.

RAHUI KATENE (Māori Party—Te Tai Tonga) : On the eve of the first reading of the Securities Disclosure and Financial Advisers Amendment Bill the New Zealand dollar plunged to a 6-year low. Anyone trading on our dollar yesterday would have earned a meagre US49c per New Zealand dollar. Suddenly the precarious state of the global financial economy is hitting home in dollars and cents. Then, by the end of yesterday, came the other shocker: Sealord was planning to lay off 180 workers, with further wage cuts imminent. That announcement has particular meaning for our whānau. Many of my nieces, nephews, and cousins have been working for Sealord for decades. Indeed, Sealord provided me with my first pay packet many years ago. We then learnt overnight that not only are there worst-laid plans about discarding workers, many of whom are Māori, but also there are rumours afoot of a possible $70-a-week cut in wages.

The signs certainly indicate that we are facing the worst international financial crisis for many years. Desperate situations can strike fear in the hearts of even confident investors, who will be nervous that Government interventions may undermine their interests. In this context, the Government has moved slowly, surely, and soundly. While the dollar fell in one direction, the Government moved in another, yesterday placing Mascot Finance in receivership. It has become the first finance company to benefit from the Government’s retail deposit guarantee. With that move, depositors can expect to enjoy a certain confidence that even if an approved financial institution fails, their money will be secure.

But, as any reputable financial adviser will know, the change needed to address the current credit crisis will not occur from one initiative alone. And so enters the Securities Disclosure and Financial Advisers Amendment Bill. The decision to remove unnecessary impediments to the raising of capital is not a new idea, by any means. But, as they say, if an idea is worth having once, it is worth having twice. The bill is a response to a recommendation from the Capital Market Development Taskforce—launched last July—to develop capital markets for New Zealand. The task force, which includes Ngāti Porou business leader and the chair of the Business Roundtable, Rob McLeod, had been meeting, along with the Ministry of Economic Development, Treasury, the Reserve Bank, and the Inland Revenue Department, to find ways to improve businesses’ access to capital. The 10 representatives of the private sector in the task force, along with Government officials, have been working to develop a simplified disclosure prospectus. But it has not just been a job for the boys or a report written by and for the chosen 10 experts; the bill also reflects recommendations made by the New Zealand Exchange. Furthermore, having the Cabinet paper and various related documents available for download from the Ministry of Economic Development website means that the concepts are virtually open to receive the broadest public support. That is how it should be.

The interest of all parties is about the clarity of the arrangement. The bill seeks to ensure that the rules work better, that information is efficient and duplication avoided, and that the disclosure documents are simplified. Disclosure statements must be kept up to date and must not be deceptive, misleading, or confusing. The ultimate goal is that the amendments set out in this bill provide greater certainty to businesses wanting to raise capital in today’s troubled markets. Part 1 makes the simplicity explicit: instead of an investment statement, investors will be sent a simplified disclosure prospectus. Before investors are asked or encouraged to subscribe, potential investors will be given time to consider all the necessary information.

The Securities Disclosure and Financial Advisers Amendment Bill is a result of the Government’s decision to act boldly. It ensures that all relevant information is available to prospective investors while, at the same time, ensuring that any unnecessary barriers are removed. The bill implements ways to improve businesses’ access to capital and reduce the costs of raising capital. It is about making things easier, streamlining the raising of capital, and making things happen for listed issuers. Instead of duplicating the information faced by many businesses listed on the stock exchange when they make a securities offer, there will now be a simpler, clearer process.

We have to be aware, however, that no matter how successful this bill is in making it easier for all companies—listed and unlisted—to raise capital, there are still huge problems with the assumption that exponential growth is an ideal we all want to sign up to. No one can ignore the fact that the global financial system is on the cusp of ultimate failure. The recklessness of some banks in squandering depositors’ funds, and the drowning of a market that was already flooded, is simply not sustainable on a finite planet. Simply printing more money, or assuming that the stock exchange is the all-important vehicle for creating wealth, will only exacerbate the problem. Theoretically, we may end up with a lot of money and no resources.

The New Zealand Exchange chief executive, Mark Weldon, told Māori who were gathered at the Māori economic workshop that the economic crisis posed threats to Māori, especially those in low-skilled occupations such as construction. The enormity of this issue must not be trivialised. We are at a turning point where not only must we tackle inflation, raise capital, and find ways to support the productive sector, but also we must ask searching questions about the very nature of the economy and the society we are producing. Central in this must be the question of how well the living standards of New Zealanders are being taken into account. This bill is but one of many strategies that must be taken into account in order to lift living standards for New Zealanders. The Māori Party will support it at the first reading to enable the doors to be opened and new ideas to come in. Thank you.

JO GOODHEW (National—Rangitata) : It is my pleasure to speak today on the first reading of the Securities Disclosure and Financial Advisers Amendment Bill. The bill is part of the National Government’s response to the current economic crisis. I have been very interested to hear previous speakers all traversing parts of the economy at the moment, and talking about how they believe this Government should be addressing the current economic crisis. The previous speakers have spoken from their own experience of what is important to the people they know and the businesses they understand. This bill is typical of a National Government that is determined to look at all ways that we can reduce unnecessary impediments within the business world. Not for many decades has this been so important.

It is probably a good idea to look back at how the problem was identified that necessitated this bill, and others as well. In doing so, I acknowledge the Capital Market Development Taskforce, which was established back in July 2008. It was to produce a plan to develop New Zealand’s capital market, and it released a report in response to the financial crisis. It focused primarily on increasing the availability of capital for New Zealand firms and reducing the costs of raising capital. I acknowledge the report, which was released in November 2008, and the fact the task force was set up under the previous Labour Government. This bill is part of a process where we are responding to the current economic crisis.

Today I would like to focus on the aims of the bill as well as more specifically focusing on National’s wider commitments to New Zealand and to New Zealand businesses. The overarching aim of the bill is, as I have said, to free up available capital for business and, ultimately, to help business to do business. The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international crisis by removing the unnecessary impediments to capital raising, while ensuring, at the same time, timely disclosure of relevant information to prospective investors. We all know, from our own territory within New Zealand where we are the representatives of our local people, how nervous New Zealanders are and how nervous businesses are right now. This bill will help to reduce compliance costs, and it will help businesses through tough economic times.

The bill principally provides for the use and regulation of a simplified disclosure prospectus. The new type of prospectus will, in connection with regulations that will be made under existing regulation-making powers, enable stock exchange - listed issuers to offer certain debt and equity securities, but without the need to duplicate information that has already been publicly disclosed under their continuous disclosure obligations. I want to reflect on a couple of words within that description. We actually need to make sure that if there is duplication of information within our business environment, we get rid of that. That is just one more of those compliance costs that New Zealand businesses have asked us to look at to make the environment they are working in more simplified and more user-friendly.

The bill will amend two separate pieces of legislation—the Securities Act 1978 and the Financial Advisers Act 2008. The bill implements changes to simplify the process and reduce the cost of compliance within existing securities legislation. As I have already said, the bill is part of the recommendations made by the Capital Market Development Taskforce. It made other non-legislative recommendations that the office of the Minister of Commerce is currently assessing. It is part of an urgent response to the current global financial crisis, and it is part of the Government’s plan to actually come through the economic downturn. We want to enable our businesses to forge ahead when the recovery period is upon us.

The Financial Advisers Act 2008 amendment corrects an error made by the Office of the Clerk when the Financial Advisers Bill was being prepared for Royal assent. It corrects the phrase: “This Act applies to a financial adviser service performed in New Zealand by a person in New Zealand, regardless of where the person performing the financial adviser service is resident, . . . or carries on business.” It changes that phrase to read: “This Act applies to a financial adviser service performed in New Zealand regardless of where the person performing the financial adviser service is resident, . . .or carries on business.” That is an important little alteration.

As I have said, the purpose of the bill is to free up capital for business and to help businesses to do business. National is committed to cutting red tape for businesses, and this bill is just part of the many steps that this Government intends on delivering for business. As other speakers before me have done, I want to reflect on what is happening out there for business. National has already addressed some of the issues for small to medium enterprises in a package that was widely supported in the House. We know that those small businesses are vital to the New Zealand economy, and we believe that that small and medium enterprise package unveiled last month will help to lighten the load on those small and medium sized businesses. They employ a large number of New Zealanders, and employment, and maintaining employment, is of course uppermost in our minds right now. That package has five parts, which included tax changes, an expansion of the export credit scheme, an extension of the jurisdiction of the disputes tribunal, the expansion of business advice services, and a prompt-payment requirement for Government agencies. It is only fair that Government agencies should be required to pay promptly, as do private agencies.

The package as a whole was aimed at urgently improving the business environment by reducing the impact of taxes on firms’ cash flows, and improving firms’ access to credit, thus, importantly, reducing business compliance costs. The reaction I have had in my own electorate of Rangitata has simply been one of people saying “Wow! This is just absolute common sense. This is what we have been waiting”—in some cases, they tell us—“9 long years for.” In fact, they are just common-sense measures to help our businesses to do business.

National’s jobs and growth plan is also about keeping the economy running as strongly as possible, easing the sharpest impacts of the recession, and preparing our economy for future growth. Unlike the previous Government, the National Government believes in creating a business-friendly economy. We are taking a hard look at any possible action, from any angle, to help business; this bill is part of that package. It is all about businesses staying in business, and helping New Zealanders to stay in employment. We have seen action from this Government. Times have changed and, again, many constituents have said to me how wonderful it is to see action. In the first 100 days we have certainly seen this Government deliver on all 27 actions within our 100-day plan. Again, we have had congratulations from many that the Government is getting on with the job of Government and adding to the confidence that New Zealanders can feel.

New Zealand—and in fact the whole world—is in the midst of the worst financial crisis for decades, and no one disputes that. Credit markets are in disarray and confidence is low and, unfortunately, falling. But this bill, and other bills that are part of the measures to address what the task force identified as problems, will help create some confidence—confidence of investors, and confidence so that credit markets can, in fact, best meet our business needs.

The bill will address the simplification of the disclosure prospectus that may be used by listed issuers subject to continuous disclosure requirements. The remedy is to amend the existing definitions for exemptions from standard disclosure requirements. This bill is about removing unnecessary impediments to capital raising, while—importantly—making sure there is still timely disclosure of relevant information. That is absolutely essential for prospective investors.

I look forward to participating as a member of the Commerce Committee as we examine this bill, and as we hear submissions on it. I commend this bill to the House, as others have done before me. I am pleased there is quite a lot of support for this bill, and I look forward to seeing it again at the select committee.

STUART NASH (Labour) : I rise to speak in support of the Securities Disclosure and Financial Advisers Amendment Bill, for a number of reasons. First and foremost, in these difficult economic times the ability of any company to raise capital in a timely manner is imperative in order to stimulate economic development and advance measures that will facilitate employment, export revenue, business growth, and, quite possibly, business survival.

Current securities legislation is in place to ensure that all who invest in New Zealand’s capital markets can invest their hard-earned money with confidence in the knowledge that any risk around negligence, incompetence, and—worse still—unlawful or misleading information is mitigated. Registered prospectuses are a very important part of the capital fundraising process. Not only do they allow the company to ensure that its business planning and financial analysis is sound, robust, and correct but they provide a legal document that allows any potential investor to fully investigate and undertake an analysis of any offering, in a prudent and thoughtful way.

As the Minister said, the provision of relevant information in a timely manner is imperative. I would not, in any way, support any motion to do away with this investment tool. However, in certain circumstances I fully support the recommendation of the Capital Market Development Taskforce—set up by the previous Labour Government with a mandate to identify key constraints and key opportunities for the development of the New Zealand financial system—to identify and debate options to improve the performance of New Zealand’s financial system, and to develop a blueprint for the development of New Zealand’s financial system. That is very, very important.

I support any measure that provides security of process to the investing public, and that protects New Zealand’s reputation as a safe place to invest, whilst also ensuring that companies that seek to raise capital are still subject to the legal rigour and regulatory requirements needed to ensure a robust financial system and robust capital markets. New Zealand needs to be very sure that its regulations governing public and private capital market activity meet not only the international standards expected of New Zealand’s investors but also the criteria of global investors.

Our stock exchange once had a reputation of being run by cowboys from the Wild West, and that was alluded to by Mr Charles Chauvel. I say that, having spoken to senior investment strategists and finance people who often travelled offshore to raise capital for New Zealand companies listed on the New Zealand stock exchange. Their anecdotes paint a picture of New Zealand as a place the vast majority of international investors would not touch with a bargepole. I am very pleased to report that now, under the direction of the current chief executive, and as a result of the regulations and legal environment created by the previous Labour Government, our stock exchange has achieved an international reputation for transparency and good governance. We must ensure that that transparency, good governance, and robustness remain in place if we are to have any chance of developing our capital market—which at this point, I think, is acknowledged by all as being underdeveloped.

I also support this bill because I understand that the ability to raise capital through traditional financial institutions, like banks, has suddenly become extremely difficult in the current economic climate. This situation is not likely to change in the short to medium term, as the so-called credit crunch continues to limit the amount of capital available for institutional financing. I also understand that this bill may ensure the survival of certain companies, when under current legislation that might not have been the case. Companies, therefore, do need another avenue, or at least a simplified process, to raise capital in a timely manner. The simplifying of the prospectus process is therefore welcome, at a time when regulation must work to ease the regulatory burden—whilst maintaining the very important transparency we have all talked about—upon the business sector.

Cost-effective access to capital is essential and important. There are investors who are feeling a little bit burnt under the current environment, and we have talked about 43 finance companies that have gone under, so I am encouraged that this bill arises out of extensive collaboration with those from both sides of the fence—investors, even bankers, company representatives, and companies that are required to raise capital. I hope further recommendations in the report tabled by the Capital Market Development Taskforce, set up by the last Labour Government, will appear before this House in an effort to continue to stimulate the investment environment and ease the capital fundraising process, thereby removing any real barrier to economic and business growth.

In conclusion, I pass on my congratulations to a previous speaker and former Minister of Commerce, my colleague the Hon Lianne Dalziel, for without her foresight, effort, and energy we would not be here debating this excellent legislation. Just to close, I would also like to show my support for my colleague Charles Chauvel’s comments on loan sharks. They are truly social parasites, in my humble opinion. Mr Chauvel’s member’s bill will be a welcome addition to the continual tidying up and timely revision of the mess that is this insidious industry. Thank you.

KATRINA SHANKS (National) : It is my pleasure to stand here today and talk on the Securities Disclosure and Financial Advisers Amendment Bill. This bill has been needed for quite some time, and particularly in the current environment, when credit is very hard to get globally and in New Zealand. It is important that this bill comes into place now, as it implements changes to simplify the process and reduce the cost of complying with existing securities legislation.

This bill is based on the recommendations made by the Capital Market Development Taskforce. This task force produced a report at the end of last year, and I will quote a couple of pieces of the report: “In large part, the impact of the financial crisis on firms and households will depend on how we respond. … Ensuring that capital markets remain well functioning is an important part of that package. … The recommendations set out in Section II of this report, concentrate on easing barriers to firms raising capital, without undermining investor protection.”

The last part I will read states: “In this case, much of the material in a prospectus is costly duplication and a simpler offer document would contain the relevant information potential investors need without undermining their protections. Some of these proposals draw on practice in Australia, so are not out of line with settings in other countries.

The second principle is that in a number of cases the existing exemptions under which firms are able to issue securities without offer documents can be simplified and clarified. … Given the importance of ensuring that firms can access capital as efficiently as possible in the current economic environment, we encourage the Government to consider implementing these recommendations by March 2009 where possible.”

I found it very interesting when Charles Chauvel stated earlier that under a Labour-led Government this legislation would eventually have come into play near the end of this year anyway. We have to move quickly in the environment we are in if we are serious about getting our economy moving forward and about allowing capital and credit to be freed up in New Zealand. To have legislation like this coming in at the end of this year would not be timely enough. The quick introduction of this legislation shows how focused John Key is on delivering an environment for New Zealand where this country can prosper, move forward, and not be disadvantaged by red tape and bureaucracy.

Lianne Dalziel gave 10 out of 10 to the Minister sitting in front of me, Simon Power, in terms of how good this legislation is. I stand here proudly as a National member of Parliament in support of this legislation at its first reading, before it goes to the Commerce Committee.

We have heard many speakers today talk about many things. We have heard them talk about finance companies, loan sharks, financial advisers, and the securities sector. It was all interesting, but the focus of the legislation is not on loan sharks; it is on how we can cut red tape and bureaucracy. What does the bill do? It reduces compliance costs to help New Zealand businesses focus on business, rather than on reporting. It is absolutely important that we allow businesses to get on with business, instead of having to file reports or prospectuses that are duplicating what has already been done.

This bill is not about taking away information from investors or hiding things from them; it is about making sure that investors get what they need from a prospectus that they can clearly understand—in simple English. Where a securities company has more than one prospectus, it does not have to repeat information over and over again. Exemptions are in place in this legislation, as well.

The provisions in the bill cover both stock market - listed and unlisted businesses, which benefits all sectors that are lending money or raising security out there. The bill will free up capital for businesses. This means that there is going to be more capital available out there for businesses, to help them get through the crisis we are in, and it will also help growth and productivity moving forward.

We have to remember that credit is not just for right now; there are many people who need credit for their working capital for their businesses. This is where many companies are struggling right now, because they cannot get credit for their working capital. The bill not only frees up working capital but also frees up capital for those who are in a growth stage. Believe it or not, some sectors out there are absolutely thriving and doing really well at the moment. Although many sectors are struggling, some businesses are doing very, very well. We have to ensure that they can grow in the economic environment we are in and allow them to be able to get capital more freely. This legislation is also focused on all those types of businesses.

The bill is about issuing shares and the information that must be provided when shares and security are offered. Currently, there are double-ups in the system when shares are provided for offer. The bill’s provisions aim to reduce inefficiencies in reporting processes by reducing that duplication, leading to less time and money being taken up without losing information. In effect, that sounds really, really simple, but this is legislation that we have not had in place to be able to allow companies to do that.

It is really forward thinking, in terms of the duplication and bureaucracy in this environment. It will help small, medium, and large sized enterprises to access capital, and investors at all levels are going to be able to understand information more easily. Many investors come along, pick up an investment prospectus, and see that it is 100 pages long. Not many people can honestly say they read the full 100 pages. The bill will make it easier for those people to understand information, but at the same time it will keep transparency there. People will be getting all the important information they need to make decisions when they invest money.

Part of the Government’s response to the current economic climate will help to ease the credit crunch currently being experienced by all New Zealand businesses across all sectors. That is the good thing about this legislation: it is open to all businesses and all sectors. When we look at this legislation and at the regulatory impact statement we see that it clearly reflects what is in the task force report and what we are trying to achieve as a Government.

I will read just a little bit. It states: “The world is currently in the midst of the worst financial crisis for many decades. The most immediate and pressing financial sector issue has been the breakdown in credit markets. The preferred option is to provide for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements and to amend the existing definitions for exemptions from standard disclosure requirements. These changes should remove unnecessary impediments to capital raising while still securing the timely disclosure of relevant information to prospective investors.”

That is what the bill is all about. It is about simplifying things for people who are trying to invest money and simplifying the process for those who are issuing money, security, or shares.

It is with pleasure that I stand here today and recommend this bill to go to the select committee, and we look forward to hearing all the submitters who come in and give their opinions on this bill and the way it stands. I look forward to it coming into the House for a second reading and to discussing it further. I thank the Minister Simon Power for getting this bill ready so quickly, because having a bill put forward this quickly is quite incredible. It takes a lot of hard work and commitment to get a bill to this stage. I look forward to seeing it at the select committee.

RAYMOND HUO (Labour) : I rise to support the Securities Disclosure and Financial Advisers Amendment Bill in its first reading. The bill amends both the Securities Act 1978 and the Financial Advisers Act 2008. The explanatory note states that the bill “responds to the current international financial crisis by removing unnecessary impediments to capital raising, while ensuring the timely disclosure of relevant information to prospective investors.” It also makes a number of minor tidying-up changes to the Financial Advisers Act.

From the explanatory note it is clear that the bill will undoubtedly streamline the raising of capital for New Zealand businesses. Central to the bill’s key provisions is the objective of making it easier for businesses to raise capital by introducing a simplified disclosure prospectus regime into the Securities Act 1978, doing away with a lot of duplicated information for New Zealand stock exchange - listed issuers. At the same time, the simplified disclosure prospectus aims to ensure that accurate and timely disclosure of information is made to prospective investors. The bill does not reduce the information required to be disclosed; it merely removes the duplication of information already provided pursuant to continuous disclosure obligations. It therefore removes unnecessary impediments to capital raising without undermining investor protection.

This bill also tidies up the rules for exempt persons and people deemed by the Act not to be members of the public for the purposes of disclosure, making it easier for all companies, both listed and unlisted, to raise capital. The Labour-led Government passed legislation in September last year to toughen up the rules of professional conduct and competence for financial advisers. This bill follows recommendations made by the Capital Market Development Taskforce in November 2008 for steps to respond to current financial conditions, which are particularly relevant for listed issuers and also reflect recommendations made by the New Zealand Exchange. The Capital Market Development Taskforce should be applauded for the speed with which it has come up with a series of recommendations in November 2008 that address a number of impediments to capital raising, particularly by listed issuers. The measures recommended are practical, conceptually sound, and will significantly reduce the barriers to capital raising by listed issuers.

The Capital Market Development Taskforce was established in July 2008 and included members from the Government and the private sector. The objectives of the taskforce were to identify key constraints and opportunities for the development of New Zealand’s financial system, identify and debate options to improve the performance of New Zealand’s financial system, and develop a blueprint for the development of New Zealand’s financial system. Originally, the task force had a year to produce its specific outputs, but in response to the global financial situation it produced an interim report in November 2008. It outlined a package of proposals designed to boost access to capital for New Zealand businesses and reduce the cost of raising capital. As a commercial lawyer I recall that on 21 July 2008 both my fellow lawyers and our clients from the financial sector were excited at the news that the Capital Market Development Taskforce, which was launched by the then Minister of Commerce, the Hon Lianne Dalziel, would see the Government and the private sector working together to develop New Zealand’s capital markets. The Hon Lianne Dalziel rightly stated at that time that improving the investment environment was a key part of the former Labour Government’s economic transformation strategy. The Hon Lianne Dalziel went on to say: “To deliver wealth and jobs, New Zealand firms need ready access to affordable capital. The taskforce will identify ways to make this happen.” Now this has happened.

I am delighted that the Government considered and adopted those recommendations by introducing this bill. It is worth reiterating that the Hon Lianne Dalziel in her speech this afternoon gave the regulatory impact statement 10 out of 10. To introduce legislation such as this bill is important, particularly at this time, when New Zealand, along with the rest of the world, is in the midst of a financial crisis. In large part, the impact of the financial crisis on firms and households will depend on how we will respond. New Zealand will need to adopt a comprehensive package of measures if we are to minimise the costs of the downturn and speed the recovery. Ensuring that capital markets remain well functioning is an important part of that package. Thank you.

AMY ADAMS (National—Selwyn) : I am pleased to rise this afternoon and add my voice in support of the Securities Disclosure and Financial Advisers Amendment Bill. As we have already heard today, this bill aims to respond to the current troubled financial climate by removing the unnecessary barriers to capital-raising that exist currently. At the same time, the bill seeks to ensure that relevant information is disclosed in a timely manner to prospective investors. In essence, what the bill does is provide for a simplified disclosure prospectus, allowing certain debt and equity instruments to be issued without the need to duplicate already disclosed information.

As we have also heard this afternoon, the bill arose from the recommendations of the Capital Market Development Taskforce after it completed, in November last year, its very considered analysis of the technical rules that surround this complex area of law. The point to remember is that the provisions of this bill will make it easier for applicable businesses to raise capital while protecting the timely and accurate disclosure of information to those considering investing.

The Securities Disclosure and Financial Advisers Amendment Bill will do away with a lot of unnecessary duplication, notably for companies listed on the stock exchange, and, in doing so, it will reduce compliance time and costs. In that regard, it is one more example of this Government putting getting business done ahead of the value of bureaucracy for bureaucracy’s sake. This Government understands that New Zealand must support the productive commercial sector if we are to navigate our way through the current international crisis and do so with the minimum amount of impact on ordinary New Zealanders. We all know that, unfortunately, there is nothing we can do to prevent the hard times ahead, but we can take steps to soften the hard edges of that crisis and to put New Zealand in a good position for a strong recovery when the time comes. This bill is part of achieving that aim.

In addition to addressing issues of duplication, as we have already heard from the Minister of Commerce, the Hon Simon Power, the bill also usefully clarifies the law around the category of persons who are exempt from the securities disclosure regimes by adding a further category of exempt persons, and it does so through an amendment to section 3(2)(a)(iia) of the Securities Act. Notably, this will remove from these strict disclosure regimes only people who already possess all the necessary information or who are very experienced in the business of investing. What it does in this regard, in effect, is create further safe harbour provisions for those who have already made an investment of $500,000 or more in identical securities within the past 12 months.

We will not, of course, accept any changes that would undermine investor confidence in the securities market—and now more so than ever—but where unnecessary red tape, compliance, and double-ups have been identified, it is the duty of any prudent Government to remove those unjustified hurdles in favour of a capital market in which businesses can raise funds more easily.

Although this bill falls outside the National-led Government’s 100-day plan of action, it is none the less part of what we are doing to help New Zealand through the economic downturn. It should also be remembered that the existing safeguards within the Securities Act are maintained, that a full and complete disclosure of the risks that come with the investment remains compulsory, and that, in addition, the extensive penalties continue to apply. From my experience within this area of law, I know that the Securities Commission, in conjunction with the Companies Office, acts as a particularly vigorous watchdog in this regard.

In difficult financial times access to capital is fundamental. The importance of this fact is coming into sharp focus for many New Zealand businesses right now. Many businesses that are otherwise strong and should not by reason of any inherent problems fall victim to the worldwide financial crisis may well still fail simply due to issues relating to their ability to access capital. Keeping capital flowing through business communities is vital, now more than ever. This bill is a step towards doing this, and it is before this House as part of a number of matters, including non-legislative matters, that are being looked at.

The Taxation (Business Tax Measures) Bill, which we saw previously in the House, focused on small to medium sized businesses. The bill before the House now is more relevant to the listed issuers, so it is looking at a different sector of our productive economy. But I would also touch on the fact that it will be very relevant to start-up businesses, angel investors, and those going through initial public offerings. Let us remember that if we want to bring growth and productivity back into the economy, then it is important that we support those businesses and not just those that already have a place on our stock exchange, and this bill will be a part of doing that.

Even in these tough times I find it very interesting that several businesses in my electorate of Selwyn have tremendous expansion opportunities ahead of them, and when we consider the economic climate in which they are operating, that is quite a feat. Some of them have the potential to double their existing operation. The markets are there, the willingness is there, but the one thing between them and achieving that growth is capital.

This bill, by removing some of the barriers and some of the duplication and excessive cost, will help to create that growth, and, more important, it will help to create and keep jobs in our economy—which is the one thing that I think this House agrees is crucial at this time. But it can do that only with capital, and that is worth remembering. Freeing up capital markets is, therefore, a very important part of keeping the growth in the economy.

The Capital Market Development Taskforce has identified some ways we can assist in that process. Therefore, I am very pleased to support this bill. On that point I will just take a moment to agree with the previous speaker, Raymond Huo. As a lawyer who has worked in this area of law, I agree that the people who practise in this area support these measures. They have been calling out for them. They were very pleased to see the task force brought about, and they will be equally pleased to see the measures given effect to.

I think we can summarise the effect and the importance of the bill by taking a moment to reflect on the first paragraph of the explanatory note of the bill: “The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international financial crisis by removing unnecessary impediments to capital raising, while ensuring the timely disclosure of relevant information to prospective investors.” It seeks, and achieves, that balance of getting rid of unnecessary duplication, freeing up red tape, and continuing to help the capital flow through to our business sector.

Finally, I should make reference to the fact that the bill also has another objective, which is to make technical, admittedly, but necessary amendments to the Financial Advisers Act 2008. That legislation obviously had errors in it when it was passed through the House last year, and taking the opportunity to address those errors is, I think, timely, and I support doing that. This bill is a necessary step towards addressing the current situation. It is not a silver bullet or a panacea, but it is a small step in the right direction, and for the companies that are affected it will be of particular benefit. I am very pleased to commend this bill to the House.

Hon SIMON POWER (Minister of Commerce) : I move, That the Commerce Committee consider the bill and report finally to the House on or before 30 April 2009.

• Motion agreed to.

PHIL TWYFORD (Labour) : I rise to complete the call interrupted by the rising of the House just a couple of weeks ago before the adjournment. The Labour Party supports the Corrections Amendment Bill (No 2). Significant progress has been made in this area over the last decade, but much still needs to be done.

I will note some of the progress that has been achieved over the last 10 years under Labour. The number of prison escapes per 100 prisoners was just one-sixth of the number of escapes 10 years ago, under the previous National Government. That means a fall of 84 percent in the rate of escapes. Drug taking in prisons is down by 84 percent. Fewer inmates are returning positive drug-tests. Labour made it significantly more difficult for people to escape, by putting in 17 kilometres of perimeter fencing. A lot of progress was made in the area of increased security and surveillance against contraband, such as new security fences and electronic devices and monitoring. Increased surveillance included a doubling in the number of drug-dog teams, to 12.

All those operational initiatives need support, and this bill aims to complement those operational initiatives. It aims to crack down on drug use in prisons, eliminate the illicit use of cellphones, enhance powers of search in relation to inmates and to those working in prisons, and adopt a zero-tolerance approach towards staff who pass contraband to prisoners. Penalties will go up from 3 months to a year in prison, and the maximum fine will double to $5,000.

The bill authorises the electronic detection and jamming of all cellphones used within prisons, and it extends prison powers to enable inmates’ mail to be screened for unlawful or harmful communications. In doing so the bill makes consistent the ruling that applies to both telephone communications and mail. Finally, the bill creates a penalty for publishing unauthorised communications from inmates that may prejudice the interests of victims.

The men and women of our corrections service do essential work for the community, and we, rightly, expect that our prisons will be secure, safe, and lawful places. This Corrections Amendment Bill (No 2) will give those in our corrections service more of the tools they need to do their job. It is a good bill, it is a practical bill, and it was developed by the fifth Labour Government. It was improved in the select committee and was progressed by the current Government to its second and third readings. I call on the House to support this bill. Thank you.

CHESTER BORROWS (National—Whanganui) : I rise in support of the Corrections Amendment Bill (No 2). As the previous speaker, Phil Twyford, indicated, this bill is supported pretty much without contest between parties or across the House. The fact is that this bill raises and deals to a number of issues that have been waiting in the wings for some time, and it is good to be able to get around to dealing with them.

During the course of the select committee process the Law and Order Committee heard evidence in respect of various parts of the bill from not only advisers but also those working within and outside the prison system. I would like to address some of those issues now. One issue was around the carriage of firearms within prison facilities. The legislation expands the ability of prison staff to be able to use firearms in response to sick or injured animals, and to put them down for humane reasons. To ensure this is clear, the words “sick and injured” were inserted into the bill before the word “animals”. That may seem an unduly precise point to make, but it is the case that firearms are also used for pest destruction and those sorts of activities on prison farms and prison property. Those things were not accounted for in the previous legislation because of concerns, obviously, around firearms and prisoners, and around the health and safety of those living in the vicinity.

It is sad to note, though, that there needed to be some specific powers around the authority to search property. We have found over recent years that the people who come under the most pressure within the prison system are prison officers, particularly from gang members who live within the prison system and who contact gangs on the outside to “get to” prison officers. Unfortunately, under the previous administration—not that that is necessarily an issue—we had prison officers bringing contraband into the prisons. They did not have to undergo search procedures as they came to and from work; neither were their staff lockers searched. This bill means that searches can now be made, without needing a specifically obtained search warrant, of staff quarters and personal areas such as staff lockers during the course of business. It also means that the prison service has the ability to search officers as they come to work, to make them go through a screen, and to check them for contraband coming into prison. It is as much for the protection of the prison officers as it is for the prevention of contraband items inside prisons.

Prisoners may be required to submit to drug or alcohol tests. Previously, drug testing had been on a fairly predictable sort of a regimen. Although people were subjected to random drug-tests, when we scrutinised that we found that the random drug-tests generally happened on a particular day of the week and were fairly predictable. Prisoners could look out the window and see parked outside the drug testers’ vehicles, which they recognised, and they knew they could acquire in one way or another a little sample that they could put in the bottle when it was their turn from some mate who they knew was clean.

This means that the sorts of statistics the previous speaker referred to may not necessarily be that believable because of the predictability of the drug-testing regime. Although we have had an 81 percent drop in recorded drug-use inside jails, the reason for that may have more to do with who is supplying the sample than with who is taking drugs. If any DNA test was done, we might well find that “Prisoner A” was actually supplying 856 samples that went into bottles, and that he was paid well for it.

Hon Steve Chadwick: That’s cynical.

CHESTER BORROWS: No, it is not cynical. It is actually a fact, once we start exploring the possibilities. When someone has 24 hours a day to sit down and think of clever ways of getting around the system, that sort of stuff happens, and clever they are at it. I say all power to those who can stand back and admire such creativity. If only such prisoners could apply such creativity to lawful purposes.

In respect of religious and spiritual needs, much has been made in a humorous way of inmates’ ability to celebrate the sacrament of Holy Communion with real wine. I guess it is a point to make, though, that when people are locked up and eventually hear that cell door slam, they are confronted with their own inadequacies, and they tend to look within to consider their circumstances and what might have been. It is a time when those people who are involved with organisations such as Prison Fellowship New Zealand and our hard-working prison chaplains make some serious inroads into people’s views of themselves, and have an impact on the likelihood of future offending by those within the prison system. One of the provisions of the bill allows for the use of alcohol in Holy Communion by those people ministering to people within the prison system, and that is as it should be.

It is true that the prison system in New Zealand has some records that are very good, and some that are very bad. It is a shame, for instance, that we have a very high rate of incarceration of our citizens within the prison system. It is a shame that people want to take a fairly shallow view of the prison system and of how it can be used as a means of addressing reoffending. The fact is that we have a system in this country where people who have been arrested, charged, and convicted and who find themselves behind prison wire go for a long time without any help or ability to rehabilitate.

Under the previous Government, if someone was in jail for less than 2 years, the opportunity for that person to access help in respect of drug and alcohol dependency, violent offending, or literacy and numeracy problems was very much restrained. I look forward to a time under this Government when, having implemented what have largely been seen as fairly punitive measures in the first 100 days, we take a closer view of those programmes that will assist prisoners in rehabilitation so that when they leave the prison system they can gain employment more easily and form relationships that will be helpful in their ongoing life outside the wire. Then we will see a tracking down of recidivist rates in those former inmates as they leave their time of incarceration.

I recall quite clearly attending the Kaitoke prison and speaking to a man who had been convicted of a drug-dealing offence. This was the first time he had ever been to jail. He had received, quite rightly, a sentence of 8 years’ imprisonment. Having heard that cell door slam, he had thought about what he had lost. He had lost not only his illicit job of drug dealing but also his legitimate job. He had lost his family and, obviously, access to them. He knew that he would be in jail for a period of 8 years, and that he would not be able to have the relationship with his children that he wanted, because of his circumstances and of what he had done. He immediately recognised what he needed to do, and he wanted some help with his drug problem. He was unable to achieve it until he had done two-thirds of his sentence, and was unable to even get on to a programme that would help him with his drug dependency.

I look forward to a time under this Government when we take a far more pragmatic and realistic view of helping people with their problems as they recognise that they need help. They will be able to access those programmes much, much earlier and will be able to present before the Parole Board and their families at the end of their sentences as people who are much easier to live with and much less likely to come back before the courts and to find themselves back in prison. I commend this bill to the House.

CARMEL SEPULONI (Labour) : Just like my Labour colleagues who have spoken on the Corrections Amendment Bill (No 2), I wish to congratulate the Government on progressing this bill—a bill that the previous Labour Government introduced. Fortunately, we have here a bill that has been appropriately scrutinised by the Law and Order Committee.

I wish to reinforce what my Labour colleagues have already articulated in relation to this bill, in that we will happily support legislation we believe to be in the best interests of New Zealanders. Given that this bill was introduced by Labour, it is, of course, in the best interests of New Zealanders. We support the Corrections Amendment Bill (No 2) wholeheartedly. It is fair to say that Labour is committed to having a modern, effective, fair, and accessible justice system, which makes offenders more accountable, reduces reoffending, helps the victims of crime, and in turn strengthens our communities. It is this commitment that drove the significant level of progress made by Labour during its time in Government.

Let us reflect on that progress. As my colleague Phil Twyford mentioned, the number of prison escapes per 100 prisoners was just one-sixth of what it had been 10 years ago under the last National Government. What does that mean? That means that the escape rate fell by 84 percent. The amount of drug taking in prisons was less than half of what it was when the National Government left office in 1999. The Labour-led Government was able to put effective measures into place to lower the number of drugs making their way into our prisons. This is reinforced by the fact that fewer inmates were returning positive drug-tests.

Under the previous Labour-led Government it was significantly harder for prisoners to escape, due to the additional 17 kilometres of perimeter fencing that was constructed. Labour made progress in its fight against contraband through increased security and surveillance. Increasing the surveillance has included doubling the number of drug-dog teams to 12, and setting up regular checkpoints outside prisons to screen visitors and staff. On top of that, new security fences, electronic security devices and cameras, closed-circuit television, motion detectors, and microwave sensors will be introduced.

I will say it again: Labour is committed to having a modern, effective, fair, and accessible justice system. It was this commitment that ensured that significant progress could be made in this area under the previous Labour Government. But Labour recognised, and continues to recognise, that there is always more work to be done and more progress to be made. Labour has never been a party to rest on its laurels, which is why the Labour-led Government introduced this bill to the House on 3 December 2007. Labour’s intention was—and continues to be—that this bill would complement all of the operational initiatives that I mentioned earlier.

The bill aims to crack down on drug use, to eliminate the illicit use of cellphones in prisons, to enhance powers of search in relation to inmates and for those working in prisons, and to adopt a zero-tolerance attitude towards staff who pass contraband to prisoners. Penalties will be increased from 3 months to up to a year in prison, and the maximum fine will be doubled to $5,000. The bill aims to authorise the electronic detection and jamming of all cellphones used within prisons, and to extend prison powers to screen inmates’ mail for unlawful or harmful communications. Mail, as well as telephone communications, can be subject to surveillance. The bill aims to create a penalty for publishing unauthorised communications from inmates that prejudice the interests of victims.

As Chester Borrows said, there is no contest regarding this bill. There are measures that need to be put into place to further increase the safety for New Zealanders. We want our prisons to be drug-free. We want our prisoners to be prevented from engaging in criminal activity with outsiders while serving their time in jail. All of these things we agree on. So Labour supports this bill wholeheartedly.

To conclude, I say that we will be voting for this bill; we wrote it. This bill meets the public’s expectations in that it has been subject to select committee scrutiny and New Zealanders have been given the democratic right to participate in the process. This bill is in the best interests of New Zealanders, and Labour supports it wholeheartedly. Thank you.

JONATHAN YOUNG (National—New Plymouth) : I stand to support the Corrections Amendment Bill (No 2). This bill will improve the way our corrections facilities are run—addressing the rules of the house, so to speak. The bill provides corrections institutions with increased powers of search and detection—as well as drug testing—in order to remove contraband and increase control of prisoners’ communications with the outside world, particularly around the use of cellphones and the screening of mail.

Although we hear about the previous Labour Government’s commitment to build 17 kilometres of wire fencing, technology—with its associated power of miniaturisation—has given us minuscule electronic communication devices that can easily be concealed. The Corrections Amendment Bill (No 2) seeks to update legislation to respond to the increased capability of communications. It also uses such advancements in technology for the detection of contraband. The bill will make it harder for people to bring prohibited items into prisons, make it easier to detect such prohibited items, and increase the punishment for prisoners and others for bringing in or using such items.

The bill addresses important issues that the people of New Zealand have great concern about: the protection of citizens from crime, and the proliferation of crime from prisons. We understand that one of the primary purposes of our correctional institutions is to protect society. The availability of contraband and unauthorised means of communication, through cellphones in particular, keeps a prisoner locked into the culture of crime; it keeps feeding crime on the outside. When social and gang networks remain intact, they allow a continuation of criminal behaviour, undermining the protection of society. An easily accessible means of unauthorised communication can make prison into a pretence of punishment for inmates on the inside and a pretence of protection for citizens on the outside.

One of the key purposes of our corrections facilities is to remove criminals from society for the protection of that society. A Government’s responsibility is the security of its citizens, and this responsibility must be taken seriously. Time and again we hear the plea of victims to be cautious about the release of prisoners when they come up for parole, particularly in relation to violent crime, because when prisoners are released the victims lose their sense of security and protection.

On the other side of the issue, there are many genuine cases where inmates have made amends and have reintegrated back into society as responsible and contributing citizens. This is the highest aspiration for an inmate, and we want to support people in the challenging and oftentimes difficult task of reintegrating. That is why this bill is called the Corrections Amendment Bill (No 2)—we want people to be corrected, not just incarcerated. It is blatantly incorrect for an inmate to be able to continue a life of crime from within a corrections facility.

Although this issue is always a work in progress, 10 years of consideration is too long. The bill is a catch-up on those lengthy periods of consideration. The previous Government was too slow in cracking down on crime being run from inside prisons. The current Opposition will claim credit for the fact that it penned this bill while in Government, but it may not be so quick to acknowledge the effective work of the National Opposition at the time, which goaded it—and, some feel, even shamed it—into addressing this issue because of the litany of problems plaguing prisons. The previous Government failed to deliver the big hit it promised: preventing contraband from entering prisons, which was enabling prisoners to commit crimes from behind bars. Consequently, the Corrections Amendment Bill (No 2) languished on the Order Paper under two successive Ministers of Corrections. However, this Government is addressing these pressing needs with no such hesitation but with utter determination, because public safety is an increasingly dire concern among New Zealanders. As the Minister of Justice, Simon Power, said in December: “The new Government places public safety above all other issues when it comes to the law and order and justice debate.”

The Labour Opposition may claim a strong record, yet under its watch we saw an alarming increase in crime rates in New Zealand. Crime has increased by over 11 percent during the last year. The number of grievous assaults is up by 11.7 percent, serious assaults by 13.7 percent, minor assaults by 13.2 percent, intimidation and threats by 7 percent, and group assemblies by nearly 20 percent. So we have seen large increases.

This bill will also ensure greater protection for New Zealanders by drastically reducing the ability of inmates to engage in criminal activities outside of prison. But the bill also assists inmates in their rehabilitation, and I will speak about that momentarily. Successful rehabilitation is the highest aspiration for inmates in our corrections facilities. We do not want to have to build more facilities year after year. As legislators, we must seek to be intent and committed regarding the rehabilitation of inmates to their families, their communities, and society as a whole. But too often, because there is a continuance of their lives in the outside world—through contraband and unauthorised communication—there is very little shift or change from the culture of crime that surrounded them and that, often, sent them to prison in the first place.

A strict and stringent prison environment is necessary. It is often the only opportunity inmates have to create distance and separation from their past lifestyle and associations. There is severely decreased opportunity for rehabilitation when associations from the outside world continue inside—and we all know they continue. We all understand the complexity of the criminal environment and the corrections facilities that people live in. Without doubt there are generational issues regarding the continuation of the culture of crime happening in our country. Where are the circuit breakers? What prison does is isolate inmates from continuing their activities in society, but it also severely limits inmates’ contact with their past associations. This separation enables greater effectiveness of drug and alcohol programmes by ensuring that access to drugs and alcohol stops.

The leading edge of this bill protects our society from crime being perpetuated from inside corrections facilities, but the hidden edge in this bill gives tools that will stop inmates from being continually surrounded by the culture of crime that sent them to prison in the first place—thus enabling a more effective opportunity for an inmate to rehabilitate.

We have delivered on our promise to introduce legislation that will enhance police tools, crack down on gangs, provide greater financial assistance to victims, create Fresh Start programmes for young offenders, make it harder to get parole, bail, and home detention, and increase penalties for crimes against children. Now we are clamping down on contraband and unauthorised electronic communication—amongst a raft of other measures—to make our corrections facilities even more effective. We want this legislation passed because it contributes to a suite of legislation introduced by the Government that works to bring a combined effect: providing New Zealanders with greater confidence that New Zealand will become a safer place for us today, for our children, and for our children’s children, who are tomorrow’s future. Thank you.

Hon ANNETTE KING (Deputy Leader—Labour) : Labour supports the Criminal Proceeds (Recovery) Bill in the second reading, and right through to its completion. This was a Labour bill introduced in my name; it was picked up by the current Government, which is carrying it on. I congratulate the Government on that. I say to Mr Young that I am big enough to thank National for the work it did on this legislation when in Opposition, alongside the Government of the day. In fact, a joint approach on the issue of the proceeds of crime has led to this bill being supported by most members in this House. Would it not be nice if just now and then, instead of the grandstanding and the written-out speeches, there could be some acknowledgment that Labour in Government did a number of very important things in terms of law and order? Unfortunately, the total political approach that we often hear from National speakers does not allow that to happen.

I thank members of the Law and Order Committee who took part in the deliberations on this bill for the work they did, and for bringing back to this House a bill that is in better shape than it was when it went to the select committee. That is why we have select committees; that is why they are important, and that is why we send legislation to them. We know that in our democracy, which is without another House or Upper Chamber to scrutinise legislation, the importance of select committees is huge. That is why we send bills to them. This bill was sent to a select committee; it was not introduced and passed under urgency. It went to a select committee, the public of New Zealand had a say on it and helped with the changes in it, and we now have a bill, I believe, that will pass by the overwhelming majority vote of this House.

The truth is that New Zealand, like many countries, has an organised criminal gang problem. The problem is not unique to New Zealand, although sometimes when we hear people speaking about it we would think that New Zealand had invented it, and that we are the only country with the problem. Those who have studied this problem, and who have taken the time to travel to other countries to talk to people in other jurisdictions, tell us that New Zealand, like many countries, has an organised criminal gang problem. It is a problem that cannot be addressed by quick-fix, one-off bills or some sort of smart approach where we take one particular resource and say that it is going to be the panacea. In fact, this is a very complex problem indeed, and one that will take all our collective wisdom and resources to resolve.

Let us look back at the history. Perhaps the person who started trying to address this issue was Sir Robert Muldoon. He thought the way to get alongside the gang issue in New Zealand was to get alongside the gangs—to actually work with the gangs to see if their behaviour could be changed. There are those who believe there is some merit in that. But we know that since those days of the 1970s and 1980s, gangs in New Zealand today—organised criminal gangs—are highly sophisticated organisations. They are not there for the good of New Zealand; they are there to make money from the misery of other New Zealanders, and I deplore the fact that they make their money from the misery of our young people. They make their money out of peddling drugs to young people. They are organised criminals.

Our approach to this issue has to be one that has many facets to it. In Government, Labour looked at what we could do. It was not just to have one piece of legislation—

Hon Phil Heatley: You did nothing!

Hon ANNETTE KING: —it was quite a number of things, I say to Mr Heatley. In fact National has picked up, by reinstating this bill, one of those pieces of legislation. The issue needed to have legislation, it needed to have an overall strategy to approach organised criminal gangs, and it also needed the police to have the powers to carry out their surveillance and their work. Those three legs of the stool were what Labour put in place to address this problem. As I said, it was not a new problem; the previous National Government had had the problem, the Labour Government before that had had the problem, and we can go back through the decades. So the previous Labour Government put in place an overarching approach to organised criminal gangs in New Zealand—a strategic approach that had with it partners working with us, from local government to our police, our corrections system, our non-governmental organisations, and our communities, because gangs live within communities and they are intergenerational. We can go into parts of New Zealand today where the third and fourth generations of young people are now in criminal gangs, so we needed to have an overall strategic approach to our gang problem.

We also needed to ensure that the police had the powers they required. That is why we established the Organised and Financial Crime Agency of New Zealand to attack the issues of organised criminal gangs and financial crime in New Zealand; they overlap, in fact. The old idea that only white-collar criminals ripped off people is not the case today; in fact, many of our organised criminal gangs wear white collars, and they have their money laundered through the fronts of businesses, and so on. So an agency was put in place that had powers that rested with the police—additional powers—for them to be able to undertake the work they needed to do, from surveillance to the tracking of these people, and the getting of overseas intelligence so that we could see what they were doing, we could see where the precursors to the drug P were coming from, and we would be able to follow up in an international sense. That is why the Organised and Financial Crime Agency of New Zealand was put into place.

The third leg of this approach was legislation—legislation that we believed could be effective, not legislation that looks good on the books but is not going to do anything. I believe that a law that just makes patches illegal is not going to do that, but this bill will add to the arsenal of legislation to help in that approach with gangs.

Let us look at what the problem is. Currently, the Proceeds of Crime Act 1991 allows the Crown to confiscate the profit made from crimes after someone is convicted of that crime. But the profits of crime can be spread amongst many people, not all of whom are able to be convicted of the crime. So they get the proceeds from that crime and they spread it amongst other people, but they are not able to be convicted of the crime. Organised gangs are an example of outfits that do just that. That is why this bill will add to the arsenal of legislative approaches that we need to tackle gang problems.

I also think we need to look at other jurisdictions to see how they have handled this problem. In January this year Phil Goff and I went to South Australia to look at its legislation. That state has put a lot of effort into tackling organised criminal gangs to reduce the harm they are doing in its communities. I believe that we ought to look closely at South Australia’s overarching legislation and the approach that it is taking. There are many lessons for us to learn from that. There are many examples that we can pick up and put in place here in New Zealand to tackle a problem that we all should be concerned about.

We support this bill firstly because it was our bill, and it was part, as I said, of the arsenal of legislation that we were putting in place and part of an overall approach. We support it because we believe that it will work. It has worked in other places where this sort of legislation exists. In fact, it exists in places like Australia, Ireland, and the United Kingdom. Those countries have passed similar laws to this one. The legislation has already been tried so we believe that it will work. We believe that it will help in the fight against organised criminal gangs. Therefore, we will be supporting this bill to its conclusion.

PAUL QUINN (National) : It gives me great pleasure to stand and join the love feast that has been going on this afternoon. Aside from the Greens, who for reasons known only to themselves are voting against this very important bill on crime, and law and order, it is great to see that we are joined as one on these very important issues. I note the previous speaker’s comments about sharing some of the glory. I would be happy to do that, but I think in so doing we need to remind ourselves that the previous administration promised, in its 2005 manifesto, that it would pass into law a civil fortitude regime to allow gangs to be stripped of the proceeds of crime, having introduced legislation earlier in that year. It is interesting to note that in July 2006 that bill was dumped without being debated, and nothing more was heard of it until March 2007, nearly 18 months after the election, when Labour introduced the Criminal Proceeds (Recovery) Bill, this bill.

It is important to note that, although acknowledging the words of the Opposition, it is actions that count. It gives me great pleasure to be able to stand here and say that this is a Government of action—when it says it is going to do something, it actually does it. We are committed to repealing the Proceeds of Crime Act 1991 and replacing it with this legislation, which provides not only for the confiscation of property where the owner has been convicted of a criminal offence but also for the confiscation of the property of those people who have tried to distance themselves once removed and send their lackeys on the job. I shall share some important cases with members a little later.

In pursuing this bill, this Government realises that we must hit gangs in the pocket, where it will count. The difficulty is that serious criminals, who are intent on making large sums of money, operate in an environment of extreme violence. They protect their wealth, and perceive that they have worked hard to acquire their assets. Therefore, sending them to jail for 1 year or 10 years is a badge of honour. It is a flea in their ear. They take a joy trip into jail, in the knowledge that when they come out, there will be a small fortune waiting for them to sit back and enjoy. The thing that really gets to them is when we start attacking their assets. If we put those assets at risk, these criminals become extremely resistant and confrontational.

One of the aspects of the bill I shall cover a little later, which is a major change from the initial bill when it was tabled, is the recovery agent. The previous administration had intended that the recovery be done by the Serious Fraud Office. Some members who were members at that time might remember this. I find it interesting, of course, that they had done a deal with an honourable Minister of the time to do away with the Serious Fraud Office—at the time we were anticipating giving $3 million to fight this. But $3 million against gangs such as the Mongrel Mob, NZ Red Necks, and Black Power just does not do it for the country. In terms of one of the principal changes, which I will talk about a little later on, we now have it in the right place and properly resourced for the police.

The other thing I want to reflect on is that the reason the Government has given this bill high priority is simply that law and order is one of the critical issues that we went to the country on. It gives me great pride to be able to stand and say that we have been able to achieve all of the commitments that we made at the election and that the people voted us in on. Let me go through them, for members on the Opposition benches.

Hon Kate Wilkinson: We’d like to hear it.

PAUL QUINN: Members would like to hear it? We introduced legislation to remove the right of the worst repeat violent offenders to be released on parole, clamped down on criminal gangs and their drug trade, toughened the bail laws to make it harder for criminals awaiting trial to get bail, tackled increasing violent youth crime by bolstering the Youth Court with a range of new interventions and sentences, required DNA testing for every person arrested—the list is exhaustive—gave police the power to issue on-the-spot protection orders, and introduced legislation to compensate victims. The list goes on. It would take too much time to cover all of them. All I can say is that this administration has taken in its stride the responsibilities of governing, in contrast to the previous administration. It is like a velvet glove. It has just fitted in.

I want to focus on the policy objectives.

Jacqui Dean: Repeat that.

PAUL QUINN: The member wants me to repeat that? She would like to hear it again. No, after all, it is a love feast. We are being kind to each other today.

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

• Bill read a second time.

Hon ANNE TOLLEY (Minister of Education) on behalf of the Minister of Health: I move, That the Alcohol Advisory Council Amendment Bill be now read a second time. This bill is a technical amendment to the Alcohol Advisory Council Act 1976 to address problems with the current levy-setting mechanisms by introducing an updated and simple calculation system that reflects the current alcohol market and future-proofs the levy against new types of alcohol products. The amendment bill also provides for regulations to be made by Order in Council to fix the rate of levy payable. This Government has chosen to progress this bill because it proposes a pragmatic improvement to the system that is long overdue. I will outline the rationale for the bill, discuss the select committee’s recommendations, and note a further very minor change to the bill that will be introduced by a Supplementary Order Paper.

The Alcohol Advisory Council (ALAC) was established under the Alcohol Advisory Council Act in 1976. ALAC’s primary objective is to encourage and promote moderation in the use of liquor, to discourage and reduce the misuse of liquor, and to minimise the personal, social, and economic harm resulting from the misuse of liquor. ALAC’s functions include research, dissemination of information, educational programmes, and innovative treatment programmes designed to achieve its objectives. It is important to acknowledge that ALAC has a significant role in reducing the significant burden of alcohol-related harm in New Zealand, and that this bill is not intended to contribute to reducing alcohol-related harm. This Government is very concerned about alcohol-related harm, but plans to address the harms through other mechanisms. A technical amendment to simplify the funding of a Crown entity is not the place to debate ways to reduce alcohol-related harm.

ALAC is funded by a levy on all alcoholic beverages manufactured in, and imported into New Zealand. The way the ALAC levy is calculated and apportioned is outlined in the Alcohol Advisory Council Act 1976. The total levy amount for ALAC during the 2007-08 financial year was $12.4 million. This is small in comparison with alcohol excise payable on alcohol manufactured in New Zealand, and excise-equivalent duty payable on alcohol imported into New Zealand, which was $795 million in the year ended June 2008.

In 2004 the Ministry of Health reviewed the current levy-setting mechanisms of the Alcohol Advisory Council Act 1976. The review found four major problems with the way the ALAC levy is calculated and apportioned. First, the levy-setting mechanism is outdated, as it is based on only four classes of liquor. The alcohol market has changed considerably since 1976 and the levy-setting provisions no longer reflect the diversity of alcohol consumed in New Zealand. For instance, the emergence of ready-to-drink—RTD—products of around 5 percent alcohol, and an increasing number of standard spirits of less than 42 percent alcohol by volume, are not readily accommodated by the way that the levy is currently struck. This highlights the need to future-proof the classification system by enabling the easier classification of emerging types of beverage. Second, the spirits category requires the calculation of proof letters—a concept that is no longer in use. Since 1986 New Zealand’s Customs Service has measured spirit volumes as litres of alcohol, and proof litres are no longer recorded. Third, the current levy-setting mechanism is unnecessarily complex when viewed alongside the way excise and excise-equivalent duties are set on the basis of alcohol content. Alcohol importers and producers have often noted that this procedure could be simplified. Fourth, section 27 of the Alcohol Advisory Council Act 1976 allows the levy to be set by the Minister of Health by Gazette notice. There is no process for Cabinet to be involved in the levy-setting procedure, which is inconsistent with more robust approaches to setting levies, such as the procedure for the problem-gambling levy.

This bill seeks to introduce a system of alcohol classification bands—an approach that aligns with the system the New Zealand Customs Service uses to collect alcohol excise duty and excise-equivalent duty. Under this system a dollar amount per litre of beverage for the ALAC levy could be set for each alcoholic beverage according to its deemed alcohol content or average alcohol content. This means that alcoholic beverages with a higher volume of alcohol would contribute a higher proportion to the levy. Two other options were considered: incorporating the levy into excise, and replacing the levy with funding through Vote Health. The Government and most stakeholders prefer the chosen option of retaining the levy but aligning it to excise, because it will be simpler than the status quo and more transparent and cheaper than the alternatives.

The new system will not affect the total sum collected for the levy, and the effect on price to consumers through shifts in the levy payable between beverage types will not be significant—approximately 2c less for a 750 ml bottle of spirits, and a difference of less than 1c for a bottle of wine, a six-pack of beer, or a four-pack of ready-to-drink beverages. Estimates from the 2006-07 levy round suggest that the beer industry will be affected most by the proposed change to the calculation of the levy, due to the high volume of imported and manufactured beer products in New Zealand. The spirit and wine sectors would both contribute a lower proportion of the levy under the proposed system. The change will have minimal impact on those who pay the levy, and industry groups are generally supportive of the bill.

After looking at the bill and considering submissions from six submitters, the Health Committee recommended that the bill proceed with two minor amendments. At the time, every committee member supported the changes. The first minor amendment is to insert a definition of “rate” to make it clear that it means the percentage figure given in the schedule of the bill. The second minor amendment is a replacement of the table set out in the schedule. The revised table includes a list of the applicable tariff items for each class of beverage. The purpose of this amended schedule is to address the concerns raised by New Zealand Winegrowers by making it clear what rates will be applicable to particular products. This will ensure that the bill continues to be in line with the excise and excise-equivalent regime.

The Ministry of Health engaged with industry groups prior to making the recommendation to the Health Committee in order to ensure that the recommended approach was easy to understand and accurate from the perspective of industry groups. The Minister of Health intends to propose a Supplementary Order Paper to correct a typographical error in the revised schedule of the bill that was discovered after the Health Committee had reported back to the House. One tariff item was drafted as 22.90.08 rather than the correct format of 2208.90.08. The error relates to the list of class F tariff items under the heading “Legal definition of class”. I recommend that the House supports the passage of this bill to the next stage.

Hon RUTH DYSON (Labour—Port Hills) : First of all, I commend the acting Minister, Anne Tolley, for that extraordinarily well-read speech, and I express my slight regret that the Hon Tony Ryall has not been able to join us in this particular part of the debate.

This Alcohol Advisory Council Amendment Bill was introduced to the House—

Hon Anne Tolley: I raise a point of order, Mr Speaker. I am sorry to interrupt the member’s speech, but she is an experienced member and she knows that under the Standing Orders she cannot comment on the absence from the House of any particular member.

Hon RUTH DYSON: Speaking to the point of order, Mr Assistant Speaker, I say that I understand the point the Minister has made, but that was not what I said. I said that the Minister of Health was unable to join us in the debate.

The ASSISTANT SPEAKER (Hon Rick Barker): It is a fine point, and the member raising the point of order could normally be entitled to draw that conclusion, but it is not the only conclusion that could have been drawn. Let us be fair: people have raised these issues before, and Ruth Dyson did not specifically say the person was absent from the Chamber. Now that the member has raised a point of order, I think that her conclusion was the only conclusion one could have drawn, but it was not necessarily so at the time. The member will continue her speech.

Could I just say there seems to be a bit of confusion on the drill sheet. I should have said to the House before I called the Hon Ruth Dyson that the question is that the motion be agreed to. Just for the sake of precision, I mention that that is the question before the House.

Hon RUTH DYSON: Mr Assistant Speaker, it gives me great pleasure to speak to the motion that you have just put before the House and it is one that Labour will be supporting strongly, because the Alcohol Advisory Council Amendment Bill was introduced to the House by the previous Labour-led Government. I commend my friend and former colleague the Hon Damien O’Connor for introducing this legislation.

As Minister Anne Tolley indicated, this bill is a technical amendment bill. There are no party politics involved in it, and, as such, our speakers will not be taking up the time of the House, but we are a little concerned that if we were to do what the public would think appropriate, and just say: we do not oppose this bill, we agree with the Supplementary Order Paper that is about as technical as it can get; we contributed strongly through the select committee, there is cross-party agreement on this; and then sat down, I would be very anxious about the health and well-being of the Government whips. I can imagine that Chris Tremain and Nathan Guy would be scrambling around for a bit more work to put on the Order Paper, because, once again, no bills have been introduced into the House. The only issue we are debating tonight is yet another bill that was introduced by the previous Government. Would I wish ill health and the wrath of Gerry Brownlee on those two young men? The answer is no to both of those questions. I wish them good health and an easy life but I fear that, despite my good wishes, they are not about to get them.

As I said earlier, this bill is primarily technical. It provides for an updated levy system that is fair, that is simple to calculate, and that everyone understands. Minister Anne Tolley went through the details of that at quite some length, as did the Health Committee, even though it heard only six submissions. That should be an indication of the fact that the industry, the key health players, the New Zealand Customs Service, and the legal advisers all agreed with the basis—and, in fact, the legal writing—of this amendment bill. Advice was received from the Ministry of Health, the Customs Service, and parliamentary counsel, in addition to the six submissions. It does not sound to me like it was a very contentious process.

The report from the select committee outlined the reasons for updating and changing the rating regime: to ensure that the rating fairly reflects the alcohol content, and to ensure that the public are supportive of it. This is a very common-sense move, introduced by the Hon Damien O’Connor in his capacity as a previous Associate Minister of Health. The then National Opposition supported the first reading of the bill. I am delighted that this bill is one of the many bills introduced by the previous Labour Government that remain on the Order Paper—

Hon Darren Hughes: Time for a change!

Hon RUTH DYSON: I am not sure how much of a breather we will be giving the Leader of the House and those Ministers, because this bill is another example of legislation that was introduced under the previous regime. We will continue to support the bill, nevertheless, and I commend its speedy progress through the House.

Dr PAUL HUTCHISON (National—Hunua) : Thank you, Mr Assistant Speaker, for the opportunity to speak on the Alcohol Advisory Council Amendment Bill. I note that this bill is about simplifying and bringing into line the levy paid to the Alcohol Advisory Council (ALAC) with the excise duties that are otherwise collected. It is interesting, after the somewhat partisan contribution from the Hon Ruth Dyson, to see that the legislative history began with the introduction of the bill on 11 December 2007—a long time ago. It was quite fascinating to hear Ruth Dyson say that surely this bill is non-contentious and could go through expeditiously. Why did the Labour Government not get this bill through the House, if it was to simplify legislation? But, no, that was not the way of the Labour Government, because, after all, its legacy is one of cementing in an enmeshed and entwined conglomeration of bureaucracy over the last 9 years.

It is refreshing that a new National Government has come into office, taken up this bill in the first few months, and is passing it with alacrity, as it should have been passed by that somewhat lazy Labour Government over those long 9 years. It is very refreshing that there is bipartisan agreement on this bill, because clearly it is sensible, and the sector was supportive of it. The sector had concerns, of course, about various technical aspects, but I did note it was generally very supportive and helpful in terms of ensuring that the technical aspects were progressed.

It is important to make mention that the bill is not intended to contribute to reducing alcohol-related harm, but, instead, it aims to simplify the calculation of the levy. The Government, of course, is extremely concerned about alcohol-related harm in New Zealand. However, this bill is purely a technical amendment to simplify legislation. I note that ALAC does some tremendous work in its role of reducing harm from the use of alcohol, and its various other efforts in terms of education and research. The council is dependent on the $12 million that it receives each year, and I understand that about a third of it comes from these levies.

The aim of the bill is to bring the levy-setting regime into line with the excise-setting regime, and I think it has done that very comfortably. I note that in the schedule there is now quite a clear description of what percentage of alcohol by volume in most item classes relates to the rate. It is important that the method for determining the variable rates is set out in the schedule for a given financial year. The variable rate for a class is the average alcohol content by volume of all the liquor of that class that was imported into, or manufactured in, New Zealand in the preceding statistical year.

Four major problems noted by ALAC were that the levy-setting mechanism was outdated, ready-to-drink beverages did not exist at the time the law was introduced, proof litres have not been used to measure spirits since 1986, and the current levy-setting mechanism was extremely complex. Although the current Act allows the levy to be set by the Minister of Health by Gazette notice, there is no process for Cabinet to be involved, which is inconsistent with many of the other levy-setting approaches.

There is no doubt that the proposed regime is up to date and very simple to calculate. There is no doubt—

Hon Ruth Dyson: Why are you filibustering, Paul?

Dr PAUL HUTCHISON: It is very important that members opposite realise the virtues of this bill, which at last has been taken up by a forward-looking National Government.

Further, the new regime is flexible enough to allow for the emergence of the new types of beverages that do not easily fit into any liquor class in the current system. The definition of “wine” itself was something that was important for the committee to consider, because “wine” has many definitions. The Oxford Dictionary describes it as an alcoholic drink made from fermented grape juice, or as a fermented alcoholic drink made from other fruits. But the verb is slightly different; apparently it is an Indian dance with gyratory movements of the pelvis. Maybe that it is an after-effect of the wine, but it is very important that the definition is clearly made. Hence the bill repeals previous definitions, and replaces them with one definition, that of “wine”, which means “the product of the complete or partial fermentation of any fruit (including grapes), vegetable, or honey, and—(a) includes—(i) cider, perry,”—if members have not heard of perry, it is wine from pears—“and mead; and (ii) fortified wines such as sherry, port, and fruit or vegetable-based liquors;”. But the definition does not include beer or spirits, or any liquor containing more than 1.15 percent volume of alcohol. It was important to make sure that those definitions were clearly incorporated into the bill.

It is also very important that there is minimal impact on those who pay the levy, and, indeed, the sector has agreed that that is the case. As I said before, the sector has been very helpful with the evolution of this bill, and very supportive also of ALAC. Price changes will be very small. The estimates are less than 1c for a bottle of wine, a six-pack of beer, or a four-pack of “RTDs”, and less than 2c for a 750 ml—

Hon Members: What’s an “RTD”?

Dr PAUL HUTCHISON: Well, I have already told members about “RTDs”. They should remember; they should think back and see whether their attention spans are more than 60 seconds. It is a shame that the members of the previous Labour Government not only failed to pass expeditiously legislation that was necessary, but have also lost their retentive memory spans—they are less than 60 seconds. I tell them that “RTD” means ready-to-drink—you know, an alcopop. They might not have heard of that either; they should come into the new millennium. But it is important to point out that price changes will be very small—less than 2c for a 750 ml bottle of spirits.

The new schedule addresses the concerns raised by New Zealand Winegrowers about the clarity of what rates will be applicable to particular products, and ALAC will continue to receive the necessary funding to continue its work: research, dissemination of information, educational programmes, and innovative treatment programmes. So it is with much pleasure that I support the second reading of this bill.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : I intend to take a very short call on the Alcohol Advisory Council Amendment Bill this evening.

Hon Ruth Dyson: You don’t need to filibuster on a bill we already support.

IAIN LEES-GALLOWAY: Ha, ha! I found it quite amusing that the previous speaker decided to start off by having a crack at the previous Government over the length of time taken to progress the bill as far as this reading. I am a young fella and I am just learning my way around this place, so I thought I would have a look at its wisdom—

Paul Quinn: Those grey hairs don’t show.

IAIN LEES-GALLOWAY: —its wisdom, I tell Mr Quinn. So I thought I would look at the Hansard of the first reading. What did I see? I saw that an utter diatribe was given by members on the National benches at that time, as well. For reasons known only to themselves, the National members have chosen to do that again tonight. I am not sure why that is; I am sure we have other business we can get to tonight. I do not know how many times I read in Hansard that the Alcohol Advisory Council (ALAC) was established by an Act of Parliament in 1976. We all know that. We know that this legislation is a technical adjustment; we know that it is about streamlining the funding for ALAC. This is a good bill. It has cross-party support, and there is no real need to spend much time on it.

I will briefly reflect on why we still need ALAC today, and why it is important that the funding is sorted out so that it is nice and easy for that body and is not something it has to worry about. There is plenty of other work for ALAC to deal with. We know that New Zealand still has a problem with its drinking culture, but cultures can change. We have seen that with the drink-driving culture, and we have seen that with the smoking culture, although there is still more work to be done on that. Plenty of things need to be done, and the issues involve the drinking age, the prevalence of cheap booze, the act of loss-leading by supermarkets, the availability of alcohol, the advertising of alcohol, the recent invention of alcopops or “RTDs”—

Hon Ruth Dyson: What are “RTDs” again?

IAIN LEES-GALLOWAY: —ready-to-drinks, yes—and enforcement issues to do with the Sale of Liquor Act. All of those things need to be seen to, and we need an independent body like ALAC to keep us, as politicians, reminded that those issues need to stay in the forefront of our minds. I am heartened to know that Parliament will be looking at those things later on this year.

As I said, this bill does not require too much talk; there is plenty to get on with. This is a good bill; let us get on with it. I commend the bill to the House.

MICHAEL WOODHOUSE (National) : I rise in support of the Alcohol Advisory Council Amendment Bill. It is yet another example of a good idea spinning round and round in the Labour Party’s spin-dryer. I am sure those members appreciate but do not act on the fact that bills become law only once they are passed. This bill amends an Act that, after 33 years of existence, is a bit tired and out of date in terms of current needs and, indeed, drinking habits—something some members of the House may well empathise with.

Examples of the dated nature of the present legislation can be found in the fact that the Act deals with only beer, wine, and spirits, and clearly there is no accommodation for more modern drinking products, including ready-to-drink products, or “RTDs” as they are known. There are some quite quaint descriptions in the 1976 Act, including this pearl of wisdom about wine, which states that grape wine “means wine manufactured . . . from grapes.” One presumes that is as distinct from other wines that are not produced from grapes. Indeed, there is a definition of fruit wine, which states: “Fruit wine means manufactured in New Zealand from any product other than grapes”. So it is time that the legislation is updated to reflect those current drinking products.

As my colleague Dr Hutchison pointed out, the purpose of this legislation is not to contribute to debates about reducing alcohol harm, but it is appropriate, I think, to reflect on the need for an organisation like the Alcohol Advisory Council, and that need is as great now as it ever was. There is a Kiwi culture, I think, of binge boozing, which appears to be more prevalent and more prominent than it was in the past. We have had many examples of this.

Recently—last Tuesday night—in my home town of Dunedin, the freshers’ toga parade, which is a traditional event, and the contribution of significant quantities of alcohol created a climate of lawlessness in the city. Students frightened bystanders and trashed the main street of the city. People were going about their business in the middle of the throwing of some unseemly and pretty dangerous items, frankly. Of course there is a degree of larrikinism in all student behaviour, and many of us, I am sure, have been involved in the odd student prank or two, but this was well beyond anything that could have been described as harmless fun.

There is no doubt that alcohol played a material part in the behaviour that was evident that night, and that demonstrates yet again that we, as a nation, by and large do not have a responsible approach to the consumption of alcohol. There is an immaturity about that approach. It behoves us to continue to support the excellent work that the Alcohol Advisory Council does, to make the levy-setting process current with New Zealanders’ drinking habits, and to line that process up with the excise duty collection process.

I support this bill for that purpose. It future-proofs changes in the drinking habits of New Zealanders going forward, and it simplifies the calculation of the levy that funds the Alcohol Advisory Council. I support this bill.

TE URUROA FLAVELL (Māori Party—Waiariki) :Tēnā koe, Mr Assistant Speaker. Kia ora tātou katoa i tēnei pō, tātou kua hoki mai ki roto i te Whare Pāremata.

[Greetings to you, Mr Assistant Speaker, and to us all this evening who have returned to Parliament House.]

I am told that today’s Christchurch Press has all of the reasons why we need to amend the Alcohol Advisory Council Act in relation to the levy imposed on all alcoholic beverages manufactured in or imported into Aotearoa. The paper talked about a study of 12,000 young people that found that the onset of drinking “goes up very steeply from age 12”, and that children as young as the age of 4 are trying alcohol—4 years old, for goodness’ sake. It seems that child’s play now extends to having a drink or a glug of liquor that is meant for adult lips. In response to these shocking headlines, Tuari Pōtiki, a spokesperson for the Alcohol Advisory Council (ALAC), confirmed that the age at which people first drink has been steadily decreasing.

That was not just an isolated headline or a one-off story. On any weekend, in most towns in the nation—and Rotorua is no different—we find our young people out drinking themselves to drunkenness, to a level where they probably would describe themselves as “wasted”. That is what they call it: getting “wasted”. We say that it is probably more wasted potential. We think it is pretty outrageous that alcohol and drugs are involved to such a large extent in youth crisis situations, as has been spoken about and has been written about in newspapers, particularly in more recent times. The lowered purchasing age and the prevailing attitude of a society that associates alcohol with fun and freedom are having an impact on our communities. The Māori Party, along with our colleagues in the House tonight, says that we need to look at and instigate strategies to address matters to do with getting “wasted”.

The negative consequences associated with under-age drinking, especially the pattern of heavy binge drinking that many minors engage in, are pretty substantial. The Māori Party has always suggested that there should be a variety of strategies, both legislative and non-legislative, to reduce the overall supply of alcohol to young people in order to limit their drinking and its associated harms. As other speakers have said, we know that in order to stem the tide of this desperate problem of binge drinking by young people, we cannot just put up ad hoc proposals in isolation from the overall drinking culture of the nation. We think the Alcohol Advisory Council Amendment Bill is heading in the right direction in terms of putting in place different approaches to address those who have the responsibility of purchasing alcohol and supplying it to our young people.

The bill proposes to calculate the levy for each product according to an alcohol classification band stream similar to the approach used by the New Zealand Customs Service to collect alcohol excise and excise-equivalent duty. A dollar amount per litre would be set according to the beverage’s alcohol content or deemed alcohol content. Beverages with higher alcohol content will contribute a higher proportion of the levy. It is not a quick fix or a one-stop catch-all to improve industry compliance and responsibility and to put the focus squarely at the feet of alcohol barons and the alcohol industry; in many ways, it is just tidying up the regulations and making the new system easier to operate.

Five years ago the 2004 Ministry of Health review of the levy-setting mechanisms found that the way the levy is calculated and apportioned is outdated and overly complex. The levy calculation system used to be very complex; some levies were calculated by volume in litres and some by the percentage of alcohol per beverage. The purpose of this legislative amendment is to get the levies all calculated on the basis of alcohol by volume in order to achieve a standard measure and a consistent approach applied across all alcoholic beverages. What is good for wine and cider will be good for beer and spirits. It is not about the brand that we are drinking, but about the amount of alcoholic content that we are consuming. We believe that these changes are for the good.

In essence, the changes will ensure that alcoholic beverages with a higher volume of alcohol will contribute a higher proportion to the levy, but they do little to address 4-year-olds replacing Fresh Up with Lion Red. They do little to address the fact that young people are more than twice as likely to suffer from alcohol-related harm as other age groups. We know that the issues are pretty overwhelming. The drinking behaviour of young people all too frequently ends up with road trauma, violence, depression, suicide, disruptive relationships, high-risk sexual activity, delinquent behaviour, decreased productivity at work, increased absenteeism, and educational failure. Some of the images on TV recently about what young people get up to adds fuel to the fire. Updating and simplifying the current mechanisms for setting ALAC’s levy will not solve all this raft of problems; they cannot be addressed by one solution. They require a multifaceted, multi-pronged, holistic approach.

ALAC itself has plenty more ideas to share with the House, which we should listen to if we are truly committed to doing something about the complex problems associated with alcohol misuse and abuse. ALAC was established over three decades ago in 1976 following the report of the Royal Commission of Inquiry into the Sale of Liquor. That commission recommended establishing a permanent council to encourage responsible use of alcohol and minimise its misuse—and so it has come to pass. ALAC’s key objectives in all of its activities are to promote moderation in the use of alcohol, discourage and reduce the misuse of alcohol, and minimise harm resulting from the misuse of alcohol.

We hope that the amendments recommended by the Health Committee and the new system of alcohol classification bands may have some impact on the range of alcoholic beverages manufactured in or imported into Aotearoa. As we understand it, the revised standard provisions for the ALAC levy will not necessarily affect the price that consumers currently pay for alcoholic beverages, but the changes may influence the proportion that each type of alcoholic beverage contributes towards the ALAC levy. We in the Māori Party will be interested to hear from the Minister of Health as to exactly what impact—and the scale of the impact—we can expect of the changes introduced today. We intend to continue to talk of the impact that alcohol abuse is having on our communities, along with the dreaded P epidemic and, of course, smoking.

We believe that significant changes to the Sale of Liquor Act are needed. The Act has a predominantly business focus, where alcohol is a mere commodity that can be bought or sold. It is our firm belief in the Māori Party that the Act needs an increased public health focus and a focus on reducing alcohol-related harm—that is, addressing the physical and sexual violence, accidents, crime, and arrests that have been mentioned before.

We note the statement from the Minister of Justice that connects alcohol to the rising tide of crime, and we go further and suggest that addressing alcohol misuse and abuse must go across all sectors, all portfolios, and all age groups. The Māori Party will support changes to the proposed regime, but we signal our concern about many other issues, such as excess quantities of alcohol being consumed by our young people. We know that fixing the levy is a partial solution; real solutions are likely to be more effective when coordinated across the board with a multilevel approach in society. Real solutions will involve stakeholders at all levels. Most of all, real solutions will involve our families and must engage our whānau. We support this bill at the second reading and look forward to a prompt and effective hearing of the wider issues in front of the House.

The ASSISTANT SPEAKER (Hon Rick Barker): Thank you. I just remind members that cellphones are not to be ringing in the Chamber. The usual tariff is morning tea. With 122 members, the Clerk’s Office, the Hansard reporters, and the messengers, members could end up with a worryingly large Bellamy’s bill at the end of the month.

SUE KEDGLEY (Green) : The Green Party will be supporting this Alcohol Advisory Council Amendment Bill but without huge enthusiasm. The previous speaker, Te Ururoa Flavell, asked the rhetorical question of what impact the bill would have on the huge problem of alcohol abuse in New Zealand. The answer is sadly very little, if any. It seems ironic that we have a huge and growing problem of alcohol abuse and a culture that absolutely tolerates alcohol in New Zealand, yet this Parliament, rather than addressing that issue, has come up with a bill that does some technical amendments to calculate the levy on alcohol content, which, frankly, will have very little, if any, impact on the consumption of alcohol in New Zealand.

I certainly agree with the previous speaker that we have a huge culture of abuse in New Zealand, particularly amongst our young. One of the issues we raised when this bill was being considered at the Health Committee was alcopops. Why is this bill not dealing with the issue of alcopops? We know they are drinks that are almost predatory, in my view. They are targeted at young New Zealanders. They are very, very cheap. Young New Zealanders are made to think that they are drinking just lemonade and soda, but, in fact, they are drinking alcohol. If there was one single thing that we could be doing to try to reduce the amount of binge drinking amongst young people it would be dealing with the issue of alcopops. We tried to get this issue dealt with when we were considering this bill, and we were told that it was absolutely outside the scope of the bill and we were not able to deal with it.

The other issue we should be discussing, if we are really serious about addressing the culture of alcohol abuse in New Zealand, is the fact that alcohol is on sale virtually everywhere we turn in our society—in every supermarket and dairy in the land. So how can we say we are seriously trying to reduce the amount of consumption of alcohol by young people and wring our hands about the culture of abuse if we are going to have alcohol available, advertised, and on display in every dairy and supermarket everywhere we turn in New Zealand? These are the issues we ought to be addressing today, and I am very, very sad to say that, frankly, we have come up with, I think, a rather irrelevant bill—a technical amendment. All it does is calculate the levy on alcohol content. It is not going to affect the amount of consumption of alcohol in New Zealand. The Green Party is very sad that we are not able to use the opportunity of legislation on an important issue—alcohol abuse—to actually tackle the real problems and the causes of the problems instead of this rather trivial technical amendment.

Finally, there is no question that if we are concerned about drug abuse in New Zealand then we must accept that alcohol is overwhelmingly the issue we should be concerned about. We have to ask ourselves why we have such a culture of tolerance. Why do we encourage young people to drink this stuff and then all wring our hands and carry on about how terrible it is that they get dressed up in togas and get drunk in the streets down in Dunedin? That is the inevitable consequence of our culture of tolerance and of the fact that alcohol is available everywhere we turn and that everything is encouraging the consumption of alcohol. There is no point in being hypocritical. Until we address the causes, there is no point in just wringing our hands about alcohol abuse. What a sad day it is that this Parliament could not deal with the real causes of alcohol abuse rather than with just some technical amendment. Thank you.

Dr JACKIE BLUE (National) : I am pleased to rise to support the second reading of the Alcohol Advisory Council Amendment Bill. This bill amends a 30-year-old Act, the Alcohol Advisory Council Act 1976. The bill in front of the House is a technical amendment to the Act. In 2004 the Ministry of Health reviewed the levy-setting mechanisms of the Alcohol Advisory Council Act 1976 and found four major problems, which are dealt with by the new bill.

The first problem was that the levy-setting mechanism is outdated and based on only four classes of liquor. The old Act uses proof litres, which have not been used to measure spirits since 1986. The New Zealand Customs Service measures spirit volumes as litres of alcohol. The review also found that the current levy-setting mechanism is unnecessarily complex when compared with the method of setting excise and excise-equivalent duty based on alcohol content. Finally, the review noted that although the current Act allows the levy to be set by the Minister of Health by Gazette, there is no process for Cabinet to be involved. The Ministry of Health review felt that this was inconsistent with other levy-setting approaches. This bill updates and simplifies the current mechanisms for setting the Alcohol Advisory Council (ALAC) levy, which is imposed on all alcoholic beverages manufactured or imported into New Zealand. The original bill when it was introduced in the previous Parliament proposed to align the ALAC levy according to alcohol classification bands, which is similar to the approach used by the New Zealand Customs Service. In essence, this means that higher-volume alcohol drinks would have a greater levy than lower-volume alcohol drinks.

There is no doubt that the proposed legislation is fairer and modernises current practice. The proposed regime is also simple to calculate and has been worded in such a way that new composition alcohol drinks not yet thought about or designed, other than beer, wine, fortified wine, or spirits, can be accommodated. Who would have thought back in 1976 that ready to drinks would be one of the biggest growth markets, particularly with young people? The new regime is flexible enough to allow for the emergence of new types of beverages that would not easily fit into any liquor class in the current system, such as ready to drinks. This is not a contentious bill. It was heard by the Health Committee of which I was a member in the previous Parliament. The Health Committee was sure that this bill would have minimal impact and would be far easier to operate. Indeed, it was evident from submissions that industry groups, including producers and importers, were generally supportive of simplifying the process of calculating the levy. We were told that the price changes would be very small. The estimates were less than 1c per bottle of wine, six-pack of beer, or four-pack of ready to drinks, and 2c for a 750ml bottle of spirits.

The Health Committee recommended some changes to the original bill. We were concerned that there was inconsistency between the excise and the ALAC levy-collection systems. For example, in the original table of the original bill, table wine with more than 14 percent alcohol would have incurred a higher ALAC levy than table wine of lower than 14 percent alcohol, but under the current excise both would incur the same levy. The Health Committee felt that this was inconsistent. As an example, the new table provided ensures that there is consistency between the two systems. For the table wine example I just gave, in the new table there are six classes. Class C is for drinks of more than 6 percent alcohol but not more than 9 percent. Class D is for drinks of more than 14 percent alcohol but not more than 23 percent. Retaining the levy but aligning it to excise was the option supported by the Government and most stakeholders, as it is simpler than the current method, as well as cheaper and more transparent than other alternatives.

One other change was recommended by the Health Committee. The definition of rate has been inserted into the bill to clarify that it is a percentage figure given in the schedule of the bill. Importantly, this bill does not address measures to reduce alcohol-related harm. That is not its intention; that will be for future debate and legislation. This bill aims to simplify the calculation of the levy that funds ALAC, which has a significant role in reducing the burden of alcohol-related harm. I acknowledge the important work that ALAC does, and it will continue to receive the necessary funding to continue its important work in encouraging responsible consumption of alcohol and minimising abuse. ALAC has existed since 1976 when a royal commission recommended its establishment following an inquiry into the Sale of Liquor Act. Its budget for the 2007-08 year is $12.5 million.

There is no doubt that in the community there is a growing concern about the effect of alcohol, and the community wants to say more. This has been clearly evident in Mount Roskill. Last year the community in Roskill South came together to oppose the imminent opening of a liquor outlet store that was 100 metres from two schools, a kindergarten, and a church. If the proposal had been successful, it would have meant there would be 10 outlets in the Roskill South area. The community was very concerned about the serious and growing incidence of youth crime and violence in the area, and it felt that alcohol would only fuel that trend. The community was extremely concerned that the current legislation, the Sale of Liquor Act 1989, had no teeth to stop licences being granted where density and location were major concerns. Members of the community were concerned about research that showed a direct link between the number of alcohol outlets in a community and alcohol-related harm and violence. They were very concerned that the local body alcohol strategy, the Auckland strategy, had no legal status. I was very impressed by their passion and the fact that they were united.

Rarely has a community come together in such a united way. I am pleased to report to the House that the community was successful and that the proposed outlet did not go ahead. The activism from this small community has given me hope for the future. But my community is not alone. Many communities all over New Zealand are up in arms and are determined to have a say. That will be for the House to consider in future debate and in future legislation. In summary, in the second reading of this bill, the Government supports this bill and the amendments that have come through after the bill’s consideration by the Health Committee. Thank you.

STUART NASH (Labour) : Like everyone in this House, I rise to speak in support of the Alcohol Advisory Council Amendment Bill, and, like my colleagues before me, I welcome the change that this bill will facilitate. Any bill that provides a level of consistency across any form of industry and/or product can be only a positive step in the right direction.

Even though this bill is technical in nature, we must, as parliamentarians, always work to ensure that all legislation is fair, up to date, and simple to calculate. Not only this but also we must work to ensure that as far as possible we work to future-proof legislation, to take into account possibilities imagined that have not been realised.

I think we all know that the Alcohol Advisory Council (ALAC) does a magnificent job and is a very important body in the delivery of social outcomes to our diverse communities. ALAC was set up by Norman Kirk’s third Labour Government and is just one of the many examples of how Labour has put in place checks and balances through having workable, credible councils to help mitigate the risks of social harms through education, advice, and counselling.

When we think about the harm carried out through the excessive consumption of alcohol by those who lose control when under the influence we understand how necessary it is for an organisation such as ALAC to exist. One of the most famous and public falls from grace under the influence of the demon drink was that of the Rt Hon Sir Robert Muldoon when he called a snap election in 1984 while rather inebriated. That was not damaging to the country; in fact, the outcome was hugely positive. But one cannot help but wonder what might have happened if Sir Robert had taken the advice and had seen the educational material put out by ALAC.

We probably should be thankful that Sir Robert did not mothball ALAC as he did Big Norm Kirk’s superannuation scheme, which, if kept in place, would today be worth billions and billions of dollars, and we would not have had to debate legislation around capital markets, as we did earlier this evening.

Now let us fast forward to the 21st century and leave behind notable alcoholic politicians. Well, in fact, we cannot go past this serious topic without injecting a note of humour into the debate. The most famous quote from an inebriated politician comes from one Winston Churchill in a conversation with a Mrs Braddock, who said: “You are drunk, Sir Winston. You are disgustingly drunk.” “Yes, Mrs Braddock, I am drunk, but you, Mrs Braddock, are ugly. Tomorrow morning I, Winston Churchill, will be sober.” Perhaps Sir Winston’s New Zealand political namesake, who left this Parliament at the previous election, took too much notice of that great man’s habits.

On a more serious note, as I was saying, let us move into the 21st century. ALAC does a fantastic job with a very limited budget of only about $13 million. As members of Parliament we have all heard stories from victims who have felt and experienced the effects of the misuse of alcohol, and from councillors and organisations that are there to deal with the effects of the misuse of alcohol. ALAC’s role is extremely important and will become more so as this economic crisis starts to deepen even further into the bowels of society, and for those for whom life has lost its purpose and are tempted to turn to alcohol for solace and company.

Families suffer, communities are polarised, and public health services are stretched. It is in times like these—which we will, unfortunately, experience over the next couple of years—when organisations like ALAC come to the fore. ALAC does a fantastic job in the areas of strategy formulation and implementation around the use of sensible drinking and work to minimise alcohol misuse and abuse. ALAC also undertook valuable research—

Paul Quinn: According to the previous speaker, they’re not.

STUART NASH: I ask that member when Louisa Wall is to represent New Zealand rugby in this House. I think she might have played for the All Blacks, did she not? Anyway, I am sorry about that; I digress. ALAC also undertakes valuable research, disseminates information, and runs educational programmes and innovative treatments for programmes designed to target those who are at risk.

Paul Quinn: Do you know what rugby is? Have you played the game?

STUART NASH: Louisa Wall was a great rugby player—probably the best rugby player this House has seen since Grahame Thorne. There is still a long way to go, however. We, as public representatives, must not only ensure that ALAC survives but also that it is provided with the resources necessary to make a difference at a time when some people in this House, while playing rugby, took too many knocks to the head and drank too much alcohol at the after-match function.

Hon Member: Paul was all right.

STUART NASH: Yes, he was. But I must admit that it is on that note that I will register my support for the Alcohol Advisory Council Amendment Bill. Thank you very much.

NICKY WAGNER (National) : I rise to support the second reading of the Alcohol Advisory Council Amendment Bill. As we are all aware after tonight’s debate, this is only a technical amendment to the Alcohol Advisory Council Act 1976.

The Greens are disappointed that this bill does not tackle the problems of alcohol in the community. That is not the purpose of this bill, and that is not part of the scope of this bill. This amendment is designed to produce an updated, streamlined, and cheaper calculation system for the levy that funds the Alcohol Advisory Council (ALAC). ALAC was established in 1976. It was set up following a report by the Royal Commission of Inquiry into the Sale of Liquor. The commission recommended the establishment of a permanent council that aimed to encourage the responsible use of alcohol—which is just as relevant today as it was in 1976—and to minimise the misuse of alcohol, and ALAC has been doing that useful work ever since.

This amendment retains the existing levy, but it aligns the levy with the separate excise and excise equivalent duties that are also calculated on alcohol. This will make the levy easier to calculate and more transparent. The amendment is also designed to reflect the current alcohol market. For example, it repeals four different definitions of wine and replaces them with only one. It is also designed to future-proof the levy calculation process, so that it automatically includes future new types of alcohol products—things that we may not have thought about quite yet. It will also catch the present newest products, such as ready to drinks—the ready-to-drink alcohol mixes. Yes, they have been considered a difficult thing for young people to deal with, and they are commonly known as alcopops. They will be caught in this levy, as well.

Operationally, the changes will not significantly affect those who pay the levy, and the price changes will be minor. They will be less than a cent on a bottle of wine, a six-pack of beer, or a four-pack of ready to drinks. The changes are all supported by industry groups, producers, and importers. The levy funds ALAC, and ALAC has a significant role in educating New Zealanders to use alcohol sensibly and reduce alcohol-related harm. The money will be used to support ALAC’s work in four different areas: to fund research, to help disseminate information, to support education programmes, and to look into innovative new treatment programmes. ALAC leads research in alcohol and alcohol-related subjects in New Zealand. The ALAC website is a repository of numerous research documents, publications, and web links. It provides useful guidelines, supports training and community groups, and provides advice on managing events.

ALAC is absolutely focused on educating New Zealanders about alcohol and how to manage alcohol. Most members will be aware of ALAC’s controversial binge-drinking advertisements. These advertisements show graphic examples of excessive drinking that leads to harm. The advertisements are so hard-hitting and shocking to the public that they have actually won an award for effective advertising, and for cutting through the clutter of the advertising space. The ALAC chair, Peter Glensor, acknowledges that the commercials are unpleasant, but, as he says, “so are the consequences of binge drinking”. The ads mirror what is unfortunately happening every week around the country, and these ads have proved to be enormously high profile. Research shows that 94 percent of adults remember seeing at least one of the ads, and many members in the House tonight will also remember them. Members might recall the ads featuring the young woman who gets drunker and drunker over a long evening of drinking in the pub and at clubs, or the two men who come to violent ends—one after spending the night, round after round, in the pub, and the other after socialising at a barbecue with family and friends. I do not know about others in the House, but I cannot watch the ad that shows a dad playing with his boy. Early in the evening, the games are full of fun and laughter, but later in the evening, the drunkard dad swings his young kid round and smashes the boy against the furniture. There is an absolutely sickening thud as the son hits the sideboard, and then, of course, there is chaos in the family. They are shocking and graphic ads, but they are incredibly memorable.

Again, the research tells us that nearly all adults are aware of the “It’s not the drinking. It’s how we’re drinking.” message that accompanies the ads. Interestingly enough, over half of the drinkers surveyed reported that after seeing the ads, they thought about how much they drank and discussed it with their families or friends, or thought about how much they drank and started to drink less.

ALAC is doing very effective work in our community. We want to see more of it; therefore, the Alcohol Advisory Council Amendment Bill will ensure that the levy that underpins ALAC’s work will be collected in the most cost-effective, simple, and efficient way. I therefore support this bill.

Hon SHANE JONES (Labour) : Kia ora anō tatou. I stand to support the Alcohol Advisory Council Amendment Bill. The word in Māori for alcohol is waipiro—rotten water, or nauseating water. Of course, we do not need to look at alcohol; we can look at sights around this House to feel nauseated. I feel the need to add some clarity to what Mr Nash said in respect of the current Māori representative in this House of New Zealand rugby. He was asking when that member will stand down and let Louisa Wall, a fearless Māori advocate for the Māori All Blacks, take his place. That is what he was saying. She has more time, and does not have a history of drinking far too much after the game.

But let us come back to this well-crafted bill. This bill is a timely reminder to parents, families, and the House that we can never stamp out the drinking of too much alcohol, but we must ensure that one area remains heavily regulated. It is what I call the lollipop alcohol drinks. Those drinks have created utter havoc, in particular in our own community, Te Ao Māori, amongst our rangatahi. After Michael Erceg’s sale of his alcohol empire to a private equity company—and, boy, I bet that company is sweating and wishing it never paid that much for it now—no company can plan to go on selling these lollipop alcohol drinks, which create carnage and destruction amongst families etc., without contributing to the need to have our families educated, and to challenge our parents, our schools, ourselves, and the community to use alcohol moderately: “Unumia te inu engari kaua e tuku ko te inu hei rangatira mōu—drink with pleasure, but don’t allow the drink to be the rangatira for you.”

That is why this bill contains some sensible suggestions, why it should go ahead, and why it will no doubt be focused on those areas in which alcohol is changing its shape and form, although its ability to make the consumer feel very piro has never changed. The bill should go ahead. Kia ora tātou katoa.

Hon MAURICE WILLIAMSON (Minister for Building and Construction) : Thank you, Mr Assistant Speaker—[Interruption] I thank members of both sides of the House for their warm accolades. I am really happy to take a brief call on the Alcohol Advisory Council Amendment Bill, because I think there is some merit to the bill. But I heard some comments while I was in my office that made me come down. As Minister of Customs, I am responsible for enforcing some of the excise—

Hon Annette King: What? Are you Minister of Customs?

Hon MAURICE WILLIAMSON: So they tell me, I say to Mrs King. I thought tonight I would go through some factual bases to give a counterfactual. I say to members that this is not meant to be rude nor meant to be embarrassingly nasty or anything, but I heard Sue Kedgley talking before about the damage that the high number of alcohol outlets can do to our society.

I hope members will listen to this, because it really is from the heart. I will give members two absolutely gospel stories, and then let them think about whether this makes a difference. I go back to the year of 1981, when I was working for British Airways. I was seconded to work for Aeroflot Soviet Airlines in Moscow. I went to Moscow under the Brezhnev regime, and I arrived one grey, very cloudy, awful day in the afternoon. As we got into downtown Moscow and were pulling into the hotel, I asked my driver: “What is that big queue over there? Is that for the Bolshoi Ballet?”. He said: “No, sir. That queue right there?”, and I said: “Yeah, the one that goes round the corner from that big, old concrete building.” He said that it was for the liquor outlet. My ears pricked up and I asked whether the shop had a special on today, thinking that could be the only reason for a queue. He said no. I ask members to listen. The only alcohol that people could buy in Moscow was from a Government-owned store that opened from 3 in the afternoon until 6. It was open for only 3 hours.

There were no ads anywhere in Moscow. People would not see ads on TV, on billboards, or in the newspaper. The existence of alcohol was not even mentioned. Yet while I was there over the next few months I witnessed the worst level of alcohol abuse and drunkenness I have ever seen. People on the bus coming home from Aeroflot flights some nights were so absolutely blotto, and throwing up on the bus, that one actually got off the bus and tried to get on another one. In the park across the road from the hotel where I was staying people were on the park benches throwing up. It is no good telling me whether it is right or wrong. This is just a factual statement about the fact that booze was available only from 3 p.m. until 6 p.m. from a Government outlet, and I have never seen such abuse of it in my life.

Thank God I was then transferred to do some work at Airbus in Toulouse. The difference was stunning. As one drove in from the airport into the city of Toulouse, there were billboards as far as the eye could see, with beautiful ladies draped over the bonnet of a Daimler or a Bentley, drinking Rémy Martin, Kahlua, or Moët et Chandon. Every newspaper one picked up would have adverts. Every magazine had stunning, glossy pictures. In every shop in Toulouse, the little town where I was living, one could buy alcohol. Every family I knew had alcohol available. Even the kids of the French family that I was staying with at Airbus were allowed a glass of wine—

The ASSISTANT SPEAKER (Hon Rick Barker): I have a point of order.

Hon MAURICE WILLIAMSON: —and there was no alcoholism whatsoever.

The ASSISTANT SPEAKER (Hon Rick Barker): I have called for order. The member heard; he should stop speaking immediately.

Hon MAURICE WILLIAMSON: I did.

The ASSISTANT SPEAKER (Hon Rick Barker): Excuse me; the member did not stop speaking. He should not say he did, when he did not.

Stuart Nash: I raise a point of order, Mr Speaker. I thought we were talking about the Alcohol Advisory Council Amendment Bill, not about Mr Williamson’s overseas travel experiences in Russia. I am just wondering what the relevance to this bill is.

The ASSISTANT SPEAKER (Hon Rick Barker): I just say to the member that it has been quite a friendly and wide-ranging debate. We have heard about football matches. We have heard about representation. We have heard all sorts of things. If we were to take that point we would have done it a lot earlier. Let us continue with the debate, please.

Hon MAURICE WILLIAMSON: Thank you, Mr Assistant Speaker. I came to the conclusion—and obviously Mr Nash does not like the idea of what the conclusion is—and the conclusion is simply this. In one place, alcohol was totally regulated, totally controlled, limited in access, not advertised, and not even spoken about, and the actual social outcomes were appalling. In the other place, it was as freely available as anyone could imagine. It was openly promoted. It was an ordinary, everyday product, and I never once saw a drunk person in Toulouse—ever. Members can take that story anyway they like. All I am asking is for members to compare those two societies and decide which one they would rather have.

I know that some of the hard-line lefties on the opposite side of the House still think the Brezhnev regime was great. They still think that Moscow in 1981, with everything locked and regulated, was the way to go. I feel sorry that there are still people who think like that in Parliament. But I ask members to think very seriously about that matter.

The intention of this bill is to get some funding from the excise on alcohol for the Alcohol Advisory Council (ALAC) to do what I think has some merit. Alcohol has a major downside to it—we all know that. While ALAC is involved in promoting harm minimisation, in trying to encourage responsible use, and in trying to encourage post-intervention and server intervention along with the other programmes it offers, I am very willing to sign up to legislation that lets us take a small sum of money as an excise tax from the alcohol being sold, and to use that to fund those sensible, moderation-type programmes.

I want members to think about this as a last question. One society—it was not Russia, and it was not Toulouse—decided that alcohol was so evil that it would ban it altogether. I want members of this House tonight to give me a score between one and 10 as to how they think prohibition went, with one being really awful and shocking, and 10 being stunningly successful and the way to go.

Paul Quinn: Zero.

Hon MAURICE WILLIAMSON: I hear my friend Paul Quinn say “zero”. I think that zero is too high. I should not say this about some members of the Labour Party, but I do not believe that anybody with half a brain in his or her head thinks that prohibition was a successful way to go.

Hon Phil Heatley: Al Capone.

Hon MAURICE WILLIAMSON: My good friend and colleague and the member from Whangarei, Phil Heatley, reminds me that some people did think it was a good idea—Al Capone, for example. He thought that prohibition was a cracker. My worry about this whole alcohol debate is that some neo-prohibitionists out there believe—

Grant Robertson: Where?

Hon MAURICE WILLIAMSON: I say to Mr “Whatever his name is”—I am hard pressed to give names and electorates for some of the new members; I am not trying to be smart—that there are even some neo-prohibitionists in this Parliament who think that the best thing we could do is to lock up the alcohol and throw away the key, and that everything will be all right.

I say to members of this House that the exact opposite is the truth. The more responsible our attitude is and the more we encourage education, server intervention, host responsibility, and harm minimisation—all the good things associated with the work that ALAC does, and I am delighted that it is there and doing that work—then the more likely it is that we can look forward in hope that New Zealanders will have an attitude to alcohol that is sensible and sane. We are more likely to have a good attitude than one of pulling down the blinds, going with prohibition, and wreaking the worst havoc we can.

I say again that I support this bill. I think that having the level of excise related to the alcohol content is a sensible way to go. Some alcoholic drinks are very strong and require very small volumes for people to get out of them whatever it is they are seeking. Other drinks have very low volumes of alcohol relative to their volume, and I think that such a levy is the right way to go. I repeat, just as a counterfactual, that if members of this House think this problem will be fixed by locking up the number of outlets and blocking this activity and making it illegal, then I ask them to please look at history. It has not ever happened anywhere else.

• Bill read a second time.

Hon KATE WILKINSON (Associate Minister of Immigration) on behalf of the Minister of Immigration: I move, That the Immigration Bill be now read a second time. National has supported the review of the Immigration Act, and we support this bill because we want New Zealand to have a robust and progressive immigration system. Through our membership on the Transport and Industrial Relations Committee we made a substantial contribution to the bill, but it must be made clear that this bill is not a “party bill”; it does have broad support. It is a bill that will enable us to deliver on our campaign promise to create a world-class Immigration Service.

I thank the members of the Transport and Industrial Relations Committee. It is evident from the changes to the bill that the committee worked tirelessly to review it and to give full consideration to public submissions. I must also give thanks to everyone in the public who made submissions on the bill. The public’s contribution highlights the importance of the Immigration Bill, which will rewrite the foundation for our immigration system.

The select committee has recommended a number of amendments to the bill. The Government supports these amendments because they will improve New Zealand’s immigration system, making it fit for purpose now and into the future. I will elaborate on these amendments shortly. I can also advise that the Government plans to make some further changes to this bill as it progresses through its next stage. We will be making a number of minor and technical amendments to ensure that the drafting of the bill is as clear as possible, and that it is consistent with the other legislation that has been passed since it was introduced. These changes are not significant but, overall, they are many. The Supplementary Order Paper will also address a matter raised by the select committee. It will enable a deportation order to be cancelled if appropriate. The Government supports this change as it will allow further flexibility and fairness in the deportation process.

The bill rewrites the immigration legislation that provides the foundation for New Zealand’s ability to choose who may travel to, enter, and stay in New Zealand. It is increasingly important that this happens in a way that benefits all New Zealanders, especially in this uncertain economic climate. Although the current immigration legislation will work for us until this bill is implemented, this bill will help us to take immigration into the future.

The immigration system manages the movement of people across New Zealand’s borders. Since the Immigration Act 1987 came into force, the global movement of people has undergone considerable change. Travel is cheaper and more accessible. The flow of people around the world and to New Zealand has increased. Risks have also increased. The 1987 Act has been amended numerous times. Such amendments have included changes to the removal regime for people unlawfully in New Zealand, and have strengthened provisions to prevent people from 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 Section 4A, which enables 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 the immigration system works, they have been incremental and have resulted in increasingly complex legislation. The Immigration Act review has sought to address the problem of complexity by increasing the transparency of the legislation and future-proofing it, so it is fit for purpose now and into the future. A core goal of the 1987 Act review has been to ensure that immigration legislation facilitates the travel, entry, and stay of the non-citizens that New Zealand wants and needs. It has also been to ensure that the legislation works to protect the security of the border against, and facilitate the deportation of, those non-citizens whom New Zealand deems to be undesirable. The security or compliance aspects of the bill may be seen to outweigh the human rights or facilitation aspects. This is because the facilitative aspects of the immigration system, such as the rules and criteria for the granting of visas found in immigration instructions and settlement-related services provided or supported by the department, are not visible in the bill. The Immigration New Zealand operational manual contains the detail of immigration policies and the facilitation aspects of the immigration system; it is available on the immigration website.

The bill enables the development of immigration policies but does not contain them. The bill does, however, contain the provisions for responding to those non-citizens who are deemed undesirable or who do not comply with the immigration system. For this reason, it is also prescriptive in areas such as deportation review and appeal. The bill is also prescriptive in the areas of compliance, enforcement, offences, and penalties. This is because the Government needs to be clear about the powers that the police, customs officers, and immigration officers have, and the rights of non-citizens in these circumstances. Consequently, the immigration legislation may appear to be weighted in favour of compliance.

The security-related provisions of the bill will not have an impact on New Zealand citizens, as they provide an ability to appropriately manage non-citizens who fail to meet their immigration obligations and/or threaten New Zealand security. The security provisions of the bill are designed to enhance the integrity of the immigration system, and to allow New Zealand to respond effectively to threats or risks to security. The ability in the bill to more effectively address these threats and risks, and to enforce immigration obligations, will provide a positive benefit for all New Zealand citizens and non-citizens who are lawfully in New Zealand. Most non-citizens in New Zealand are cooperative and compliant with regard to their immigration obligations. The security-related provisions in the bill will not have an impact on those non-citizens. The provisions are designed to effectively address those non-citizens who do not comply with their immigration-related obligations as well as those who pose a threat or risk to New Zealand security.

In response to public submissions, the select committee has recommended important changes to some provisions in the bill. Those of particular importance relate to the use of classified information and to the refugee and protection system. Comments from submitters indicated concern that the chief executive of any Government agency could certify information as classified information. Because of this concern, the ability to do so has now been limited to the chief executives listed in security, defence, law enforcement, and border agencies, along with the Ministry of Foreign Affairs and Trade and the Department of Internal Affairs. It is important to understand where classified information may be used in decision making under the provisions of the bill: it is only where the Minister of Immigration determines that it relates to security or criminal conduct. This means that it will be used only where the safety or security of New Zealand, or New Zealand’s law, may be compromised. It is crucial that immigration, refugee, and protection decisions can be made on the basis of all available information, in these cases.

The select committee has recommended changes to the bill to give more weight to natural justice when classified information is used. A key change is that a summary of allegations will always be provided to an individual when classified information is used in relation to a residence decision, a temporary entry decision about onshore applicants, a refugee or protection matter, or a deportation decision. The change will allow the individual to be informed of the allegations contained in the classified information prior to a decision being made about his or her status. The select committee has also recommended amending the bill to clarify that its classified information provisions do not rule out the application of the Ombudsmen Act, Official Information Act, or Privacy Act.

A number of other changes by the select committee, which should be supported by submitters, have been made to the classified information system. For example, the restriction on a special advocate lodging proceedings on behalf of an appellant has been lifted. There had been some concern over the ability of a special advocate to communicate with the person he or she was representing after the advocate had seen the classified information; at no point does the bill stop written communication between the two parties.

The select committee received many submissions on the refugee and protection provisions in the bill. These were valuable in ensuring a more appropriate approach to the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, and to the International Covenant on Civil and Political Rights. Key changes have been made so that the codification of these obligations is more consistent with the wording of the obligations in these international instruments. The changes to the review and appeal rights—

Mr DEPUTY SPEAKER: I am sorry but the Minister’s time has expired.

Hon PETE HODGSON (Labour—Dunedin North) : The outbreak of peace across the House continues tonight with the Government speaking in favour of legislation that happened to be in the name of the Hon Clayton Cosgrove, because that member was the Minister of Immigration prior to the election when the Immigration Bill was introduced and put to the Transport and Industrial Relations Committee.

It is probably timely to remind ourselves that the select committee did a lot of work on the legislation. The legislation is significantly amended, having come out of the select committee. It is really important to point out that this legislation has passed through a positive Human Rights Act vet. Unlike the “three strikes” legislation, this legislation is regarded as being consistent with the human rights legislation in this country, which is something we should be pretty pleased with.

The select committee made a number of changes, one of which did not make it into the legislation as reprinted. I heard the Associate Minister of Immigration, Kate Wilkinson, when she gave her address say there were going to be some minor technical amendments, with one of them to do with the deportation order being able to be cancelled where appropriate. That recommendation was made by the select committee but was not put into this draft of the bill, so I am glad the Associate Minister picked that up.

Immigration is always going to be a balance. The immigration laws of this land and other lands are always a balance. Immigration is a positive feature in New Zealand society. It is how we have come from our bicultural beginnings to our multicultural future, it is how we engender new blood and new global linkages, it is how we have an export education industry, and it is why this country now has such a wide range of ethnicities and cultures, which is a remarkable feature of our country.

It is also legislation that is designed to keep out bad people. Bad people might be people who are here pushing drugs or they might be people running a bunch of rackets and coming across our borders to do so. Anyone who has been a Minister of Immigration—I am pleased to say I am not a person who has held that portfolio—is full of war stories of the underside, I suppose, of human nature.

It is always going to be a balance. It is also going to be a balance in terms of numbers. The legislation allows for the Government of the day to set quotas in various forms for immigration purposes, and those numbers need to be kept under review. Interestingly, in very rapidly changing economic times such as this, they need to be kept under review on a very regular basis. It is not yet clear to me that this Government is doing that. However, National members, without a hint of irony, advised that this legislation, which they can thank the outgoing Labour Government for, allowed them to go into the hustings to say they are going to have a world-class immigration system. Let me say to the Associate Minister, Kate Wilkinson, who made that remark, that law does not a world-class immigration system make. Law is a very good start for a world-class immigration system, but there needs to be a budget, there needs to be attention given to quality of service, and there need to be standards of interaction between those who seek to come to New Zealand and those who are dealing with their applications. Onshore and offshore we should be treating people well and politely, and that does not always occur.

I can remember about 10 years ago when some refugees fetched up in my life. They are both now New Zealand citizens, but they waited for 21 months for their first interview. During that 21-month period they were not entitled to anything that was available in New Zealand. They were not entitled to anything. They could not work and they could not draw any support from the State. They were allowed to go to English language lessons and that was it. They waited 21 months for their first interview.

That was a second-class immigration system, and it begs the question of whether there is enough funding for immigration even now. The issue back then was one of funding, under a previous National Government, and one wonders, for example, whether the removal orders that are drawn up, week after week, in this land to have people returned whence they came will be able to be actioned or whether the budget for removals has been cut. If the budget for removals has been cut—and some say it has—then the removals will not be able to take place.

The Associate Minister might like to get one of her colleagues taking call after me to respond to the possibility that there might be some constraint in the removals budget. How would it look if there was a decision to remove someone who was regarded as not a proper person to be in New Zealand and there was no budget to send that person back home? A world-class immigration system requires world-class legislation, and it requires more than that. I leave those thoughts with the Associate Minister.

In general, we have legislation that is now simpler. We have a visa system that is simpler. Those of us who have always struggled to work out the difference between a visa and a permit, and exemptions to both, do not need to worry about it quite as much as we used to. We have a more transparent deportation system. Those of us who have struggled to work out the difference between deportation and removal, or revocation of a visa, or whatever it might be, and have tried to work out the technical differences between them, do not need to do that any more because we have one word for that and it means “Be on your way.”

We have, if you will, quite a lot of simplification of this system, but it is also a system that has some inbuilt security, including some stuff that I think some members of this Parliament might find awkward. I am referring to the use of various “biomarkers”. We use photographs as a “biomarker”, we use fingerprints as a “biomarker”, and we can photograph someone’s iris and use that as a “biomarker”. All three “biomarkers” can be used under this new legislation before us that is being considered today, although the only “biomarker” that will be used for New Zealand citizens getting across their own border will be, as it always has been, just a photograph.

We have a more robust system, in terms of protection, and the Associate Minister has gone through the changes that have been made in respect of section 4A of the Immigration Act and the new approach that has been put in place there.

It is worth noting that the Transport and Industrial Relations Committee changed this bill materially. It did not change it in any way fundamentally, but it made a lot of small to medium sized changes, and the select committee needs to be given some credit for the time and effort it put into it. I cannot remember who chaired the select committee. I wonder whether it was the Hon Mark Gosche—I think it was—so let us remember his work. He is no longer with us, but Mark Gosche was a pretty good chair of a select committee, and I think he ran a pretty good ship. I offer my congratulations to him and to other members of this Parliament, past and present, who sat on the committee and have given us, at this second reading stage, legislation that the Associate Minister thinks is almost right. Minor technical amendments excepted, we think we have got it about right, so we should not debate it too much further.

Hon PANSY WONG (Minister for Ethnic Affairs) : It is a pleasure to take a call on the Immigration Bill, along with David Bennett, my hard-working National colleague—we were both members of the Transport and Industrial Relations Committee in the last Parliament—who will speak shortly.

The bill has taken a lot of thought. The select committee received 90 submissions, and 61 submitters presented a submission that deserved our attention. This legislation has quite a few controversial parts, which I want to share with the House. Lots of submitters were concerned about biometric information in respect of the protection of an individual’s privacy and in respect of whether it infringes human rights. How long can an individual’s biometric information be stored, and who can retrieve it? The select committee took a very considered and professional approach to that issue. We engaged at length with the Privacy Commissioner and the Chief Human Rights Commissioner, and eventually we struck the right balance in the legislation.

The other provisions that caused a lot of controversy were about classified information. Which chief executives of which departments can provide this information; once again, who can access it; and what is the Minister’s authority with regard to it? Once again, the select committee took those concerns to heart and had very lengthy discussions. The Chief Human Rights Commissioner and the Privacy Commissioner made return trips to the select committee, which is quite unusual. We also authorised the officials to work with the Privacy Commissioner and the Human Rights Commission to make sure that the provision that eventually ended up in the legislation provides the sensible and right balance between an individual’s rights and the rights of New Zealand to protect its border from people who might present a threat to New Zealand.

I would like to talk about three other matters I have raised, some of which have been incorporated into the legislation. First of all, a new provision that has been introduced caused quite a lot of concern to employers. Currently, employers can rely on the fact that a potential employee would provide a PAYE code to prove that he or she has the right to work. An employer could employ someone if that person had an Inland Revenue Department tax code—the employer could assume that person has the right to work.

In this legislation, that provision has been changed. The provision is about employers having to take reasonable steps to prove that the potential employee at least has a work visa, has permanent residence, or is a New Zealand citizen. That caused quite a lot of concern to employers. Some of them were concerned that it might be interpreted as racist. I can just imagine the types of potential employees who might be asked for further identification. They could possibly be people who look like me or who speak with an accent. Employers are quite concerned that if they ask certain candidates for a passport or whatever as identification, a complaint might be laid with the Human Rights Commission that they are racist.

We traversed alternative proposals with the Inland Revenue Department and asked whether the department could come up with some solutions to help. Could, for example, a potential employee have a tax code so that employers can safely say: “Yes, from that tax code, it looks as though that person has either a work visa or has permanent residence status.”? We were told by the Inland Revenue Department that it was too difficult. I must say a lot of the select committee members did not take that response from the department too kindly. If that was too difficult for a Government department, then spare a thought for employers, particularly smaller employers.

We eventually came to a compromise whereby the Immigration Service agreed it would have an online website to ensure that it responded to any inquiries from employers very quickly. We were also assured that some employers already have an interview form that might be extended to include additional requirements that may satisfy the criteria that employers take reasonable steps to ensure that an individual has the right to work. I hope that works out. We want to send a signal to Immigration New Zealand and to the Inland Revenue Department that we want them to cooperate to ensure that the burden on employers has not been made so difficult that they will be put off employing people.

The other matter I want to raise is the use of limited purpose visas by Immigration New Zealand. Way back in 1998, when National was in Government, a limited purpose visa was introduced. The reason it was introduced was to ease the consideration of risk by immigration officers. Immigration officers might take the attitude—possibly correctly—that there was a higher risk that people entering New Zealand from certain countries might become overstayers. They were very reluctant to issue those people with visitor visas, work visas, and so on. But that posed a lot of problems for people who genuinely had extended family and friends and wanted to come to New Zealand to visit them for special occasions. A limited purpose visa was introduced for that purpose, but unfortunately it has not been used in that spirit.

I realise that a lot of immigration officers use the limited purpose visa as a last resort rather than using it more liberally at the front end to allow people to come in. The reason they should be at ease is that if the protocol is properly introduced by Immigration New Zealand, a person who holds a limited purpose visa cannot change to another category. That should give immigration officers peace of mind when giving those people a visitor visa to come to New Zealand. I wanted that provision to be used in a much better way, because right now I am sure that all members of Parliament are constantly being approached by their constituents in relation to the difficulty that their friends and family members have when wanting to visit New Zealand.

I finish my second reading speech by saying that the Hon Pete Hodgson made a point I agree with to a certain extent. He said that a world-class immigration system starts with legislation but does not end there. I can safely say I am glad that this immigration bill will be passed under the National Government. The law had to be updated and changed. I have confidence in the Hon Dr Jonathan Coleman and in the Hon Kate Wilkinson to ensure that immigration policy and the Immigration Service will be run as a first-class system—in contrast with the time Labour was in Government.

Let us look at the shambles of Labour’s so-called business investor policy. The previous Minister of Immigration introduced a $20 million threshold for the investor category. Can members guess how many applications have been received since its introduction? The answer is a big zero. That policy has been in place for a year, but there have been no applicants. It is a waste of the time of the department, and it is a waste of New Zealand’s time to advertise ourselves and try to show ourselves as a country that values expertise and financial capital. I am glad to take a call in support of the second reading of this bill.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : My colleague Annette King has just made a very, very good point. For the benefit of those who did not hear it, I tell them she said there was a nasty little ending to Pansy Wong’s speech—as usual, for members from that party. Kate Wilkinson has spoken in this debate. Kate Wilkinson lives in my electorate and every time I challenge her, her people write letters to the editor saying I should stop picking on Kate, because she cannot hack being challenged in Parliament. Apparently it is a personal attack to challenge a member of the Government.

I remind Pansy Wong, who talked about the single investor category in the policy that the National Government introduced, that it became a revolving door policy. The National Government introduced the policy and it encouraged passive investment. For the benefit of those who are listening to or who may be tuning into this debate, I can tell them that that means an immigrant could bring in money—

Hon Pansy Wong: Open the door! No one is coming!

Hon CLAYTON COSGROVE: I think there is a squawk or something parrot-like coming from across the Chamber; I cannot quite make it out, but the member may want to listen. National introduced a passive investment policy, which meant that an immigrant could bring in a sum of money, place it in a bank account passively, gain residency—gain the status—ultimately gain a passport, then send the money out to the next person in a revolving door fashion, so that that person could use it, as well. That was the legacy of Ms Wong.

Labour changed that policy to an active investor policy. It may well have been less attractive to someone who wanted to rort the system, because it meant that people had to bring investment funds into this country and actively invest them, so that there could not be a revolving door policy whereby the funds were recycled over and over and over again and their mates could rort the system, get residency, get a passport, then send the dough out. Of course, that revolving door policy was Ms Wong’s legacy. It is the nasty little ending of her speech.

The Immigration Bill is the biggest rewrite of immigration policy in two decades. In fairness to the Hon Dr Lockwood Smith, who is now the Speaker of the House—and I do not want to bring him into the debate inappropriately—I say I was at several forums with him when he was National’s spokesperson on immigration and, to be generous, I found he took a pretty non-partisan view in respect of this legislation. We all agreed that it was good legislation. He did not stand up and trumpet, as Ms Wilkinson did, that this bill shows the National Government’s commitment to immigration. Maybe it does, but she did not write it, her Government did not write it, and in the initial stages the National Party opposed many of the facets within it. But I have to give the Hon Dr Lockwood Smith credit, because in the latter days of his reign as the Opposition spokesperson on immigration he did indeed come to the party, and I commend him for the logical way in which he looked at this legislation.

Immigration law, as always, is a bit like the issue of law and order: it becomes a bidding war between the parties. The truth is that we have had parties in this House—some of which are not here now—that used immigration policy to ratchet things up and pick the scab off certain ugly facets of certain folk within New Zealand society. It would be fair to say that the race card has been played by some parties. From time to time, normally around elections, immigration policy becomes a bidding war between the parties.

This is very good legislation, because it future-proofs the law and brings us up to date with where technology is—with biotechnology. It also streamlines appeal rights—for instance, it has a single independent appeals tribunal. But unlike what somebody at the back of the Chamber said when calling it bad legislation, I say it does not do away with human rights. It streamlines the process, but it does not allow people to abuse our taxpayer dollar and our process by illegitimately dragging the chain.

For instance, it does not degrade human rights to have all issues dealt with at the same time rather than having one appeal, having that appeal decided, then having another appeal on another ground, and having that decided. I think that one could legitimately argue that taxpayers felt that the Zaoui case—and I do not challenge the decision—exhibited many facets of what I have described. This bill does not do away with human rights. It does not degrade the protections for migrants, but it streamlines the process whereby they can be dealt with, have their day before the tribunal, and have their rights examined.

I have to say, though this may be unpalatable to my Green colleague, that it is the role of this Parliament and of the Minister of Immigration—of any colour and of any party—to protect the border of New Zealand. The first responsibility of the Minister of Immigration—and I have been one—is to protect the borders of New Zealand. I say to that member and to others who criticise that stance that the only way they will create confidence within our communities is by letting into New Zealand the right, the appropriate, and the fantastic folks.

I remember the Tampa and Helen Clark taking a huge stance on that issue. I remember the criticism she got from some members who are in this Chamber now—and from some who are not in the Chamber—and the race card being played on that issue. I met many of those young people—

Hon Ruth Dyson: Degree-qualified.

Hon CLAYTON COSGROVE: —as have my colleague Ruth Dyson and other colleagues in Christchurch. Those people are now degree-qualified. Sadly, one has passed away through a tragedy that we know about. Helen Clark showed a ton of guts in saying we were going to do the right thing, as Kiwis always do. She did that in the face of huge criticism, some of it ignited by people who still sit in this Chamber, which was made for reasons of political expediency. Helen Clark said that we were going to put a stake in the ground; that we were going to be humanitarian, and we were going to do our bit as a global citizen. That stance paid off.

David Bennett: Come on!

Hon CLAYTON COSGROVE: From the cue ball opposite we have “Oh, come on!”. Well, this is a serious issue. I was at the citizenship ceremony of those kids from the Tampa and I say they are wonderful citizens. They love being Kiwis, and they are very grateful that our country stood by them and allowed them to come in. That is what this bill is about.

The National members stand up and make comments that remind me a bit of Judith Collins’ comments when she was opening police stations—stations that Labour initiated, funded, and built. She said those stations were the result of her commitment to law and order. Kate Wilkinson stood up earlier and said this bill shows her Government’s commitment to immigration policy. Well, that may be so. I think Lockwood Smith deserves more credit than Kate Wilkinson does; he did more work on it than she ever did. National members say this bill is their commitment to immigration, but the test, of course, will be what they decide to do as their 3-year term progresses: whether they choose a humanitarian stance or otherwise in respect of immigration. I say again, the only way we engender confidence in our community that we are letting the right people in is to ensure that the community has confidence that we are keeping the bad guys out.

I do, indeed, pick up on Pete Hodgson’s comment. It will be interesting in the Budget round—[Interruption] Members opposite laugh and scoff, but it will be interesting to see whether the removals budget is contracted, cut, or suspended, and whether those who are charged with removing people have been told not to do so. I know that for our Green brethren it is an unpalatable thought that anybody should be removed from this country, but there are people who come out of prison after having broken our laws and committed crimes against our citizens, and they should be removed and deported. Though the Green member may not think so, it is appropriate to protect our border. But it will be interesting to see whether those in our Immigration Service who are charged with that task, which is pretty awful, I would think, are actually given the resources—it will be interesting to see whether the resources are maintained and not cut. I am told, as Mr Hodgson said, that certain people believe the removals budget has been cut, and that people have been told not to go and catch the bad guys, not to go and remove those who abuse our system and make it difficult for those who do not, and to suspend what they are doing, because we want to save money.

This is good legislation, and I hope, as we progress it through the House—and I say this in all sincerity—that we will not go down the road, as other parties that are not here now did, of picking off the scab, and of picking on the most vulnerable people and using them as a target for politics. I think this legislation should be progressed. It does future-proof our Immigration Service, and it does further professionalise those good human beings—our public servants—who administer the immigration legislation.

Dr RUSSEL NORMAN (Co-Leader—Green) : I stand to speak on the Immigration Bill on behalf of my colleague Keith Locke, who sat on the Transport and Industrial Relations Committee, and, unfortunately, cannot be here tonight. I do not get up to speak as an expert on immigration law, because I am not one, but I am someone who has a deep and abiding belief in, and commitment to, natural justice.

There are some parts of this bill that, to a person who has just a basic understanding of natural justice and how it should work, really are quite extraordinary. It seems to me quite remarkable that anyone in this House who says he or she has any commitment to human rights or freedom—on one side we have the pious cries of human rights and on the other side we have the pious cries of freedom—could actually vote for this bill.

Let us talk about some of the elements of this bill. You can get convicted on the basis of secret information. You can have a case—

Mr DEPUTY SPEAKER: The member cannot bring the Chair into it. The member cannot use the word “you”.

Dr RUSSEL NORMAN: Thank you, Mr Deputy Speaker. A person can be convicted on the basis of secret information. Fourteen different Government agencies can have secret information that they keep from the person. The person is not allowed to know what it is. They have this secret information and they can use it against the person, who has no idea about it. Fourteen different agencies can do that. It strikes me as quite extraordinary the breadth of power that we are giving to the Government—a conservative Government. It is supposed to be suspicious of State power, but it seems to ladle it out in great quantities whenever anyone wants to go hard on refugees, some of the most vulnerable people in the whole world.

The list includes the SIS, the Government Communications Security Bureau, the New Zealand Police, the Department of Corrections, the Department of Internal Affairs, the Department of Labour, the Ministry of Fisheries, the Ministry of Agriculture and Forestry, the Civil Aviation Authority, the Aviation Security Service, the Customs Service, the Ministry of Foreign Affairs and Trade, Maritime New Zealand, and the New Zealand Defence Force. These are all State agencies that can have secret information on people.

They do not tell the person. The person turns up in court and says: “I’d like to defend myself.” They say: “We’ve got this case against you, but we’re not going to tell you what it is because it’s secret. But we can appoint a special advocate for you.” So a special advocate is allowed to look at the secret information they have against the person. The special advocate is allowed to go and look at the secret information, but once the advocate looks at the secret information, he or she is not allowed to talk to the person who is being convicted on the basis of secret information held by all these Government agencies, to which the conservatives amongst us want to give lots of power to override basic human rights. Suddenly we are going to give all this power to these State agencies. Goodness knows why. The special advocate can look at the secret information that any of the 14 different agencies has on the person and that is being used to convict the person. The special advocate can communicate to the person in writing only, via the tribunal. The advocate can communicate to you in writing only, via the tribunal. That is extraordinary. You never get to see the information that you are being convicted on.

Mr DEPUTY SPEAKER: I have reminded the member that he cannot bring the Speaker into the debate. He must use the third person.

Dr RUSSEL NORMAN: Thank you, Mr Deputy Speaker. So people being convicted by this secret information are not allowed to see it, but they can have a special advocate who sees it on their behalf and then communicates to them in writing. So how are the people against whom the secret information is being used supposed to pull apart this supposedly special information, this secret information, held against them? How do they challenge this information, when the only way that people being convicted on the basis of this information find out about it is when the special advocate who gets to read it writes little notes and sends them to them. How on earth are they supposed to find out and illustrate that, in fact, that information is false? We know that in the Zaoui case the information that was being given against Zaoui was false, and it was on that basis that Zaoui managed to become a genuine refugee.

This law could be seen as the revenge of the Immigration Service, because it lost the Zaoui case. That is actually what it is. The bill is the revenge of the Immigration Service and the SIS, because they lost the Zaoui case. They were exposed for providing false and misleading information. So they have decided they are going to stop that, because the person being convicted on the basis of this false information will not get to see it any more. So it is revenge, because those services lost the Zaoui case.

Just in case the High Court might consider that it could look at the secret information and determine whether it was true, there is another special clause in the legislation. There is another special clause that the Labour and National parties are very happy to have in there, which states that the High Court is not allowed to challenge whether or not the information is accurate. The High Court has to assume that the information is accurate. This is the information provided by the SIS and 13 other Government agencies, which in the Zaoui case was proven to be completely wrong. But, no, the High Court is not allowed to look at it and say that it is wrong. No, if the SIS says that black is white, then the High Court must accept that. That is what this law says—this law that members are so happy to vote for; that those members who say they believe in freedom, and who say they believe in human rights, are happy to vote for. Something that can be manifestly false must be accepted as true by the High Court, because this Parliament is passing a law that says that it has to be considered to be true even when it is not. Under the Zaoui case, it was proved to be false. So where is Labour’s commitment to human rights? Where is National’s commitment to freedom? They are willing to vote for a law that says black is white because the SIS, the Ministry of Fisheries, or 12 other Government agencies say that black is white. If they say it is so, the High Court must accept that it is so.

This House is very happy to pass a law that says to a High Court judge that he or she is forced to accept a piece of information as accurate that the judge knows is false. That is the law we are passing tonight. That is the law this Parliament is so happy to pass. It is a law that says we will convict people on the basis of secret information that they will never see, and that they will never be able to challenge, no matter how false it is, and even when it gets to the High Court, the High Court judge will not be able to say that black is black and white is white, because if the Government says that black is white, it must be so. Do members know what that is called? That is Nineteen Eighty-Four, when the Government says that black is white, and forces the High Court judge to accept that, because the court is not allowed to challenge it under the law that is being passed tonight. Under this law, when the Government says that black is white, the High Court judge has no choice but to accept the Government’s word on the matter, even though the High Court judge knows that black is black and white is white. That is the law that you are passing tonight; I hope you feel proud about it. Is this the way we are going to treat the most vulnerable people in the world? Refugees are people who have nowhere else to go and who are in danger of being tortured when they are sent back, because they cannot challenge their cases in the High Court because the Government has said you have to accept something that is false—

Mr DEPUTY SPEAKER: I remind the member, for the third time, that he cannot bring the Speaker into the debate. He must use the third person.

Dr RUSSEL NORMAN: Thank you, Mr Deputy Speaker; my apologies. Even when a person is aware that a piece of information is completely false—even when a piece of information is completely false—the High Court will have to accept it. The court will have to accept that it is true. Our so-called Attorney-General is smiling and thinks that this is OK. It is not OK; it is not OK to force the High Court to accept something that is false, to say that it must accept that it is true. That is not OK. And the outcome of this manifestly unjust process is that some of the most vulnerable people on the entire planet—refugees—will be sent back to where they came from to be tortured or killed, because we cannot possibly allow them to stay in our country. That is totally unacceptable.

Of course, there are some other really choice bits of this law. There is the whole search and seizure, without any warrant, provision. That is another great commitment to freedom from National, and to human rights from Labour. They are passing a law that says a police officer can go into someone’s house without a warrant—without a warrant from a judge—and can just wander in there and grab people. It is just like the dawn raids, the good old dawn raids. It is back to the dawn raids. Is that really the kind of law that we as a Parliament should be passing? Should we be passing a law that fundamentally breaches everything that we supposedly stand for as a democracy? I refer to the kinds of things that people represented by all the names on these walls around us here fought for.

There is also the matter of habeas corpus, because this law allows for indefinite detention. This law allows for indefinite detention. Do members of the Labour Party want to vote for that? Great! They can vote for indefinite detention, and members of the National Party, the party of freedom, can vote for indefinite detention. It is my view that this law is completely unjust.

DAVID BENNETT (National—Hamilton East) : It gives us great pleasure to put forward the Immigration Bill, which was started under the Labour Government in the previous term of Parliament. I pay due respect to the Hon Mark Gosche, who was the Transport and Industrial Relations Committee chair we served under. He did a very good job of taking this legislation through to the stage we are at now. In that process a number of changes were made on the basis of some reforms that both sides of the House thought were applicable and in the best interests of New Zealanders and our New Zealand immigration system.

It is important to remember that this bill is very much a procedural bill. Although it is one of the largest bills that we would deal with in a normal sitting, it is simply procedural. When people talk about immigration, they talk about the issues of who comes to New Zealand, how many people come to New Zealand, and under what criteria they come. This bill is not necessarily about that. It sets out the procedures for immigration cases, it sets out some of the visa requirements, it sets out some of the appeal processes, and it sets out provisions for people to make an appeal against a judgment made in their particular case. So it is not legislation about which one can use the fear tactics of saying that it is about how many people come into New Zealand or who we do not let into this country, as the Greens have just said it is. It is not about that. In fact, this bill is about procedural aspects; is about making immigration law something that is effective.

It has been long overdue. Many years have gone by without these kinds of reforms being introduced. Our immigration legislation was a hotchpotch of basic laws that had been put together and amended over time. It was due for a major reform, which was started under the previous Government. The National Government has completed it in this term.

I pay tribute to the Hon Dr Lockwood Smith. He was a very important part of that, because as our immigration spokesperson Lockwood had a keen interest in this legislation. We made it quite clear from the first stages of the select committee process that we would work constructively to get a solution that would be in the best interests of all New Zealanders, and that would be passed through Parliament, whatever the result of the general election. That is why we did not see Labour promote the passage of this legislation before the last general election; its members knew that the bill had cross-party support. There was agreement between the parties that, essentially, the nuts and bolts of this legislation would be passed at some later date.

When we look at the legislation, we see some key points that need to be highlighted. These are points that the select committee made a numbers of changes to. One point was the use of biometric information in decision making. If people have travelled to America, they will know that as soon as people get to the airport they undergo retina scanning, which is now common in New Zealand international airports, as well. We were a little bit behind the game in terms of that information about individuals. We were not storing the information that some other countries stored. It was a matter of amending our laws to take into account technological advances and how we store information on people who arrive in our country. Biometric information is very important, and will be more crucial as we go forward with technological advancements in visa processing, entry processes, passports, and identification. It is a matter of the New Zealand system catching up, and of making sure that we have legislation that supports a more robust system of identification of people coming into the country.

Another big issue in the legislation is classified information, which is information that highlights or flags some kind of problem that may be perceived in terms of an individual who is coming into the country. In many cases, it is something that other Governments have notified us about, or that we see as a potential risk. The issue of classified information was part of the Zaoui case, which a Green Party member talked about in the previous speech, and it is also related to some of the other changes in the legislation around special advocates and suchlike. Essentially, we were looking at a system where that information could still have an element of secrecy, so that people would not be able to publicise it widely, where there would be some privacy issues involved around how that information is distributed, and where anyone who comes into New Zealand in unusual circumstances who has been identified as having a problem is given a fair go. In many cases, those problems are very easily sorted out, and the individual does not become a problem or go through to further levels of our system. However, in some cases they do. In those cases, we need to make sure that we have that information in a manner such that it is not necessarily in the public domain, so that it cannot be blown out of proportion as has happened in some cases, but can be used by the relevant authorities to make decisions based on the facts and what has actually been provided, not on the basis of the coverage that a case has got through being publicised in the media. Those are the important changes to clauses 30 to 32 in regard to classified information.

Another big change was in regard to special advocates. This is where we need to put some realism into what the Green Party has been talking about. The Zaoui case was a very public case in New Zealand, and it was probably one of the biggest migration cases that we had seen in recent years, from a publicity point of view. It went through a number of court challenges and a quite detailed process. It probably needed the Government to take a firmer hand in the initial stages and to make a decision, rather than it allowing it to drag on and be played out through the court system, as it was. Mr Zaoui’s lawyers were very active participants in the select committee process. They made numerous submissions, and they raised some very important points that were incorporated into this legislation. So people cannot say that this legislation is necessarily detrimental for somebody in Mr Zaoui’s situation. In fact, many of the points that his advocates had raised were incorporated into the legislation—not everything, but they were looking at it from one extreme. We had the point of view that the Government has to look after its boundaries and borders, and to make sure that we have some control over people who come into the country. But we need to do that in a manner that gives everybody the ability to be heard, and that is not detrimental to human rights. So the role of special advocate was very important.

Let us look at another big part of the bill, the universal visa system. For a number of years additions have been made to our basic visa system. We have added a couple of new categories of visa over time. Well, it really needed to be rationalised. We needed a visa system that was much simpler and could be easily followed by not only those who were entering the country but also those administering the laws through the Immigration Service. Part 3 goes through the visa requirements. It sets up a much simpler system for New Zealand visas, so that people coming into this country will be well aware of what their opportunities are and what the visa categories are. Clauses 120 and 121 deal with visa requirements.

Another big part of the bill deals the appeals process. Through the system having been built up over many years, the appeals process was very complicated in that there were a series of different appeal processes. That overcomplication of the system meant that it was very difficult to follow for the appellant, and also the Immigration Service found it very difficult to go through the process. We needed a satisfactory result, and we have it through the changes made to the appeals process.

In summary, this legislation is a reflection of the need to reform law made over a number of years.

GRANT ROBERTSON (Labour—Wellington Central) : We have heard a great deal this evening about some of the more contentious elements of the Immigration Bill, and I will address those shortly. I start by saying that there are some elements of this bill that I think a lot of people around this country—universally around this country—will certainly welcome, which are around the whole issue of simplifying the visa system that we encounter. As a relatively new MP, I can say that certainly in my electorate office the overwhelming number of cases I get are around the immigration issue. They are always emotional. They are emotional because we are dealing with people’s lives—with their very existence, in many cases—and the fact that they want to be in a country such as New Zealand where they feel safer and more secure. They want their family to join them, in many cases, because they want their family to continue to stay together and have an existence that is safe. It is always going to be emotional and there are always going to be contentious elements in immigration policy.

We need to have a balanced immigration policy. We need to have rules that allow flexibility but also uphold rights. It is a very difficult balance, and we can see by the work the select committee did that there is an awful lot of material here to work through to ensure that we have that balance right. But it is difficult. We are looking to build a world-class immigration system in this country. In order to do that we have had to have another look at the overall policy settings. A simpler visa system that means that visas, permits, and exemptions will all be rolled into one system is something that will be welcomed by applicants.

I would also say it will be welcomed by the public servants who administer this legislation. I know that here, as the representative of Wellington Central, the public servants in the Department of Labour who work in the immigration section have had a very difficult time in recent years. In general, they are people who work extraordinarily hard and they are people who know they are dealing with people who have been in some of the most difficult circumstances we can imagine. It is a very difficult role to play. I pay tribute to some of those immigration officers—both here in New Zealand and overseas—who face that daily challenge of balancing the different elements of protecting New Zealand’s borders but also of working with people from fragile existences, people who have severe humanitarian concerns. I think we all, as members of Parliament, know from our interactions with the immigration system that it is not perfect. It is certainly something that could do with being improved. But the people who work in it have the best interests of New Zealand at heart, and indeed of the people who want to come here, I hope.

Another element of the bill that people throughout New Zealand will be happy to see is more flexibility in terms of making positive exceptions to residence policy. One of the most time-consuming things I have seen, even in my short time as an electorate MP, is people having to go through multiple hoops, over and over, to get what seems on the surface to be a relatively simple exception granted. I think we can see in this bill that there is now a simpler process for that. We have already heard mentioned tonight the people who came off the Tampa. I also am working at the moment on behalf of some of those people. As a country we have to be proud of the fact that we have stood up in the past and said we will bear our fair share internationally of those who end up at the margins and fringes of society. We need legislation that can support our ability to respond flexibly but also continues to protect our borders. I say tonight to the National Government that it must continue to take on that responsibility when that time arises. We know that when Helen Clark—as my colleague Clayton Cosgrove said earlier tonight—took the gutsy call to take those people from the Tampa into New Zealand there were people in the then Opposition who are now in Government who opposed it. I call on those people today to rethink that to ensure that we can continue to play that role internationally, as they now have charge of immigration policy.

Speaking of international considerations, one of the other things the bill does is create a more robust international protection system. That really means that New Zealand is now going to be able to say under things like the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment and the International Covenant on Civil and Political Rights that we are acting consistently. This is important because, again, our immigration policy is part of how we are seen in the world, and it is important that we are seen to be upholding those international conventions. I know that the Transport and Industrial Relations Committee dwelt on this area as well, and made some changes, and that is important. I know, again, that some of the things that people are asked to prove when they come to New Zealand are very difficult to prove, and occasionally have been seen to be inconsistent with international law. This bill brings us into line and improves that situation in a way that will provide a better and more sustainable immigration system going forward.

Another element that it is important we mention is the single independent appeals tribunal. There were four appeal authorities; they will now be amalgamated into a single Immigration and Protection Tribunal. Again, that is vitally important, because there are too many hoops, too many different processes, for people to deal with. They are confusing processes that I think we have managed to simplify here, and that is a really important element of this bill.

There was a huge consultation process around this bill. There were 650 people who submitted before the bill even came into the House, 4,000 written submissions, and 67 oral submissions when the select committee heard the bill. It is important that New Zealanders have had the chance to have that say. We have also heard tonight from the Minister that some amendments will be introduced at the Committee stage, and I have no doubt from the speech we heard earlier from Dr Norman that other amendments will be also introduced at the Committee stage. I look forward to debating those, because the contentious issues in this bill are contentious, as I said before, for a reason—these are emotional issues. I will mention briefly the ways in which the select committee has dealt with some of the concerns that have been raised.

We have heard about the concerns about classified information. It is important that we acknowledge tonight that one of the changes is that a summary of the classified information will now be provided to the person who is the subject of it. That was an important amendment made by the select committee, and it is important that we put on the record tonight that it has been made. There will no doubt be further debate about the use of classified information. It is a very difficult area, but it is one where the select committee, building on the bill, has tried to balance how that information is used, who has the ability to use it, and what the person who is the subject of it knows about it. Biometric information is another area that is contentious and difficult. Again, the committee has made some changes. Privacy impact assessments will be done by the Department of Labour, they will be publicised on the website, and the Department of Labour will consult with the Privacy Commissioner on that biometric information. That again is important, because it will give New Zealanders some confidence that safeguards have been built into this legislation.

At this second reading I can say that there are some elements in this bill that I believe all New Zealanders will like. It is a simpler system—a system that keeps us in line with our commitments internationally. I acknowledge that some other elements are contentious, but I think that the select committee has done a good job under Mark Gosche’s leadership in trying to bring some balance into those elements, and I look forward to further debate on the bill.

MICHAEL WOODHOUSE (National) : I rise in support of the Immigration Bill. If the Hon Mr Cosgrove thought Pansy Wong’s speech had a nasty little ending to it, then perhaps I am to be accused of starting with a nasty little beginning, because although I agree with the member for Dunedin North that the law in itself does not make a world-class Immigration Service, I believe the failure to pass the necessary legislation that creates the environment for such a service to thrive certainly creates its own problems. I also wonder whom Mr Hodgson looks to as the cause of any problems—if, indeed, they exist—with the Immigration Service after his having had 9 years on the Treasury benches. But this is not really the time for petty gibes. With the exception of the Greens, I think we have pretty much bipartisan support for the passage of this legislation, and I think that is as it should be with regard to legislation that is just too important to be treated as a political football.

I also congratulate the Transport and Industrial Relations Committee of the previous Parliament, which had the unenviable task of carefully considering this bill and the very many submissions on it. I have, obviously, carefully considered all 525 pages of the bill in the time available, and I have to say that I admire anybody who has been able to do so with that level of detail.

These are challenging times for immigration. In the 22 years since the original Act was passed, there have been three pretty significant changes. One is that citizens—and, in particular, New Zealanders—travel in far greater numbers and far more frequently than they have ever travelled before, and the second is that the technology available to store and process the information has reached levels of sophistication that we probably did not even imagine in 1987. Thirdly, as we all know, and as some of us have discussed tonight, there are risks posed by organisations and individuals who are a threat, and who seek out New Zealand as a safe harbour and as a place from which to carry out their illegal activities. Those risks are ever-present and probably increasing. It is entirely appropriate, I think, that we bring our legislation into the 21st century and into line with those environmental changes. Of course, those changes will continue, and the legislation needs to have built into it the necessary nimbleness and flexibility to enable it to be current now and into the future.

The fundamental roles of good immigration law are, firstly—obviously—to protect our country’s citizens, and, secondly, to provide a process for the fair and equitable consideration of applications by people who want to come into our country. Obviously, these are not normal times, particularly when we talk about risk. Although Dr Norman may not admit it, the fact of the matter is that the people who want to do us harm will not be honest. It seems obvious to say that, but it really needs to be mentioned. I say that in the context of Dr Norman’s concerns, which were shared by people who made submissions to the select committee, that some of the provisions around the classification of information might be misused. I think the select committee has come up with a very pragmatic response to that real risk.

But I think Dr Norman needs to be careful, because the implication he makes that the authorities would seek to use the powers accorded them under this legislation to unreasonably remove genuine refugees is, frankly, an insult to those public servants, and is very disappointing. I say that notwithstanding the case involving Mr Zaoui, and I think it is also worth considering to some degree what might have happened had Mr Zaoui’s case been considered under this legislation. The fact of the matter is that the outcome might well have been the same as it was, but I do not think anybody in this House would argue that the process would have been smoother, more efficient, and fairer on Mr Zaoui and on the people of this country.

Just as the member for Wellington Central has said, as a new MP the issues of immigration have been a surprisingly material factor in the constituent inquiries that I have had to deal with in my short time as a MP. They are extremely emotional issues. My own perception of the process is that, certainly, improvements could be made to take some of the stress out of the application process, in particular where there are quite obvious grounds for doing the right thing, especially in the likes of family residency applications. Those applications presently take between 12 and 18 months to consider, which is certainly well outside the time frame for the expiry of visitors’ visas.

It is also interesting to speculate on the issue of the Tampa situation. Personally, I would accept that there was quite a serious and legitimate concern about the risks that the Tampa refugees posed, and there was, obviously, a very successful outcome. I see that as a journey on the path to enlightenment, but that does not mean those situations are without risk. Therefore there needs to be a very real framework within which those applications can be considered carefully. I might be so cheeky as to suggest that the Prime Minister of the day’s decision to support those refugees was probably as much political as it was humanitarian. She backed a winner on that occasion.

In summary, I would like to support the bill. I do so for the reasons that have been provided by a number of members in the House. I look forward to it providing the necessary natural justice and protection for non-citizens, while at the same time protecting our own citizens from the people who seek to do us harm.

I also want to talk a little about the single Immigration and Protection Tribunal.

• Debate interrupted.