Hon HARRY DUYNHOVEN (Minister for Transport Safety) : I move, That the Aviation Security Legislation Bill be now read a first time. At the appropriate time, I intend to move that the Aviation Security Legislation Bill be referred to the Transport and Industrial Relations Committee, that the committee reports finally to the House on or before 16 July 2007, and that the committee have the authority to meet at any time the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on the Friday in a week when there has been a sitting of the House, despite Standing Orders 192 and 195(1)(b) and (c).

In today’s aviation security environment we are faced with new and evolving threats to personal and national security. Such threats are dynamic, can be highly sophisticated, and are difficult to predict. Aviation remains an attractive target because of the disruption that can be caused. Each State must consider the implications of these ongoing threats, not only to itself but to its neighbours and the wider international community. We must ensure that New Zealand’s reactions are appropriate for our circumstances and that we are not out of step with the approaches taken by our closest neighbours and the international community. In addition, we must be mindful of the impact on the aviation industry and on the passengers.

New Zealand has long been a contracting State to the International Civil Aviation Organization, which is known as ICAO. As a contracting State, New Zealand is expected to conform to International Civil Aviation Organization safety and security standards. This Government does not believe that non-compliance with International Civil Aviation Organization standards is an option for New Zealand. Non-compliance would undermine international confidence in New Zealand’s aviation security and would damage our ability to maintain air links with other countries. The provisions contained in the bill will enable New Zealand to continue to comply with the International Civil Aviation Organization standards and strengthen our own aviation security. The bill will therefore help ensure continued confidence in the security of New Zealand’s aviation services, both domestically and abroad. It will also strengthen the legal framework for New Zealand’s aviation security system.

The bill is consistent with the New Zealand Bill of Rights Act and does not in any way target or profile ethnic, religious, or political groups. The main elements and objectives of the bill are to provide aviation security officers with the power to search for and seize items prohibited or restricted from being taken on aircraft; to enable the screening and searching of airport workers; to provide a power for aviation security officers to search passengers’ outer garments and undertake pat-down searches; to require that airlines deny carriage to passengers who refuse to be searched; to provide a power for aviation security officers to seize potential weapons; to enable foreign inflight security officers to enter and depart New Zealand and enable New Zealand to deploy inflight security officers should the Government decide to do so in the future; to formalise the process for checking the background of people working in areas critical to aviation security; and to provide a general regulation-making power to ensure that the law is able to respond to new aviation matters in a timely fashion.

The bill is an omnibus bill that amends the Civil Aviation Act 1990, the Aviation Crimes Act 1974, the Arms Act 1983, and the Civil Aviation Rules. Recent threats to international aviation security have drawn attention to new groups of items that may need to be prohibited or limited from being taken on aircraft by passengers or crew. These include components of weapons, such as chemicals and electronic components, and items that are not weapons but that look like or could be used to disguise weapons, such as a liquid explosive disguised as a sports drink.

Existing aviation security legislation clearly prohibits dangerous goods and traditional weapons such as firearms from being taken on aircraft. However, there is a lack of clarity regarding whether potential weapons are also covered. Recent consideration following the alleged UK terrorist plot shows that the legislation is not sufficiently clear on this particular point. To address this, the bill clarifies the position around items that have an innocent purpose but that could be used as weapons, such as, for example, cricket bats or scissors. It also ensures that items or substances that could be the ingredients of weapons are prohibited where there is an intention that those items or substances will be used as weapons.

In the past no formal procedures have been in place for screening and searching people who work at airports. Although passengers and crew boarding aircraft are screened, those who have access to baggage and in-service aircraft are not. The International Civil Aviation Organization has introduced a standard that New Zealand is required to meet to ensure that a proportion of people with access to secure airport areas undergo the same screening and searching as passengers and crew. The bill provides a mechanism for this to occur. However, searching and screening by themselves are not likely to be enough. There is a need to formalise the process for checking the background of people who work in areas critical to aviation security. In any case of background checking it is necessary to provide appropriate natural justice provisions for people whose backgrounds are checked, and the bill fulfils this need.

The bill also establishes a power for aviation security officers to search passengers’ outer garments and conduct pat-down searches. Currently the search power is limited to searching a passenger’s “coat or similar article”. The limited scope of the current search power creates a risk to New Zealand’s aviation security as passengers could carry non-metallic potential weapons on board aircraft concealed in garments other than coats. The extension of search powers to include outer garments will allow more effective searching to be carried out by aviation security service staff.

Further, it has become evident that there is a need for legal clarification regarding the powers of aviation security officers to seize potential weapons. Prohibited items pose a security risk because they could be used to hijack or damage an aircraft. Aviation security officers are responsible for preventing prohibited items such as potential weapons from being taken into the cabin of aircraft. However, they do not currently have the power to seize such items discovered during screening in order to prevent this offence from occurring. Instead, they rely on passengers voluntarily relinquishing items subject to the airlines’ refusal to carry passengers who do not comply. The bill formalises requirements for dealing with potential weapons and for airlines to deny carriage to passengers who refuse to be searched.

Existing legislation does not permit foreign inflight security officers to enter New Zealand. This would pose a problem if an aircraft carrying foreign inflight security officers diverted to New Zealand, or if another country wanted to deploy inflight security officers on its aircraft at short notice. Under our air services agreements that enable us to fly to other countries, we are obliged to consider security requests from those countries. This could include a request for inflight security officers to be on board foreign aircraft flying into New Zealand. New Zealand has not received any such request to date, but the Government does not want to be in a situation where flights are cancelled because we do not have the right legislation in place.

New Zealand does not currently possess an inflight security officer capability as part of its aviation security regime, and this position is not changed by the bill. The Government has decided that inflight security officers should not be deployed on New Zealand aircraft at this time but that we should continue to rely on ground-based security measures. However, as we have seen in the past, the global aviation security environment can deteriorate very rapidly. Therefore, the bill allows New Zealand to respond quickly to worsening conditions. Future-proofing provisions in the bill will allow foreign inflight security officers to enter and depart New Zealand and allow the deployment of inflight security officers on New Zealand aircraft should the Government decide to do so in the future.

I want to be clear that Cabinet would need to approve any agreement between New Zealand and another State seeking to deploy inflight security officers on its aircraft flying into New Zealand. In addition, in the unlikely event that New Zealand deploys inflight security officers on New Zealand aircraft, this will also require Cabinet approval. This role would be undertaken by specially trained members of the New Zealand Police. The current rule-making powers can be time-consuming and can limit the Government’s ability to make rapid changes to aviation security legislation in response to international security events or short-notice changes to international practice. The bill, therefore, includes a general regulation-making power to ensure that the law is able to respond to new aviation security matters in a timely fashion. At stake is the economic and trade security of the country. The Government would welcome a discussion at the select committee on the advantages and disadvantages of this provision.

I consider that the amendments contained in the bill provide an appropriate balance between the rights of New Zealanders to travel to destinations of their choice, their expectations of privacy, and the need to ensure that aviation security measures meet international requirements. I commend the Aviation Security Legislation Bill to the House.

Hon MAURICE WILLIAMSON (National—Pakuranga) : I am happy to tell the House today that the National Opposition will indeed support this legislation to go through to the very fine Transport and Industrial Relations Committee—

Hon Mark Gosche: Very well chaired and deputy chaired.

Hon MAURICE WILLIAMSON: —which is very well chaired and deputy chaired, as one of the members points out. If I were not in my very cooperative mood towards the Government today, I would stop right there, and I would ask all the other National MPs to stop right there as well, because, frankly, the Government desperately needs National members to talk today. If we look at the Order Paper, we see that, for the first time in my history in this place, it is now down to a single sheet of A4—on which the first two items are first readings, which will be out of the way today. We would be in grave danger of getting down to the Conservation (Protection of Trout as a Non-commercial Species) Amendment Bill, if I were not in my cooperative mood and choosing to take my entire 5 minutes—as will other members of National’s team today—in speaking on this bill.

It is not very easy to speak on a bill that you believe is sensible, but I am going to pose some questions that I hope the Minister for Transport Safety, Harry Duynhoven, will actually think about. The first thing that always worries me with legislation like this is its time frame. If, in fact, Osama bin Laden is sitting around in the cave tonight and it says on his Internet service that New Zealand has introduced the first reading of this bill, is that likely to get Osama and the boys saying: “Right, that means we have no more than 4 months for our next attack, because once the third reading is through, it will be law and we can’t do it.”? That is how silly this legislative sort of approach to things can be. This bill will not be law for at least 4 months—probably more, although I am not sure—and that means we have signalled to the terrorist community that in the meantime they will not be searched like this and that there will not be air marshals on planes when they come from other countries. I wonder why, when the big terrorism attack occurred in 2001, it is 2007 when we are introducing legislation like this. But it would be churlish and flippant to suggest that the Minister has probably sat on his hands for 6 years and done nothing.

So what are we doing here? Well, according to the explanatory note, we are providing “aviation security officers with the power, … to search for or seize items … prohibited or restricted from being taken on board an aircraft;”. That seems pretty sensible to me—why would anyone oppose that, why would we not do that, why have we not been doing that all along anyway? I thought security officers did have the power to search for and seize items prohibited or restricted from being taken on to an aircraft. Certainly, I have experienced long, long queues at airports when going out of here internationally, with people having all sorts of things taken off them, like snippy scissors. One lady the other day had some tweezers taken off her because one side had a sharp edge on it.

The bill will “enable the screening and searching” of airport workers—and there, I think, is a real hole in security. I have worked at an airport. I worked out there once when there was a big strike on, and management were actually called out to the airport for 2 weeks to load bags, check out the aeroplanes, fuel them, and so on.

Hon Mark Gosche: The only time he earned his money.

Hon MAURICE WILLIAMSON: Yeah, yeah—of course all the trade unionists will say “Scab worker!”, and that was probably true. But that is how I earned—

Hon Harry Duynhoven: No, no—for once you earned your money.

Hon MAURICE WILLIAMSON: Yes, for once I earned my money. I can remember walking in and out of the engineering shops where we were, and then going down to the conveyor belt, and actually going up into the belly of the aeroplane, and not a single person stopped us from the moment we arrived at work till the time we drove out the driveway and back to town. Of course, this idea that the only people who can get explosives on to a plane and blow it up are passengers is silly. It is the silliest person who would try to get explosives on to a plane, because they would kill themselves. If terrorists were going to target a plane, the best way would be to try to get the explosives on to the plane when it was in the engineering shop and being serviced. They could get the explosive in there and have it activated to go off at, let us say, an elevation level, so that it triggered at 3,000 feet or something. So that is another sensible move.

Moana Mackey: The member is talking about this a lot. Talk about something else.

Hon MAURICE WILLIAMSON: I thank the member for the interjections. It is helping me fill my 5 minutes of filibustering to keep the Government away—

Hon Harry Duynhoven: Ten.

Hon MAURICE WILLIAMSON: —10 minutes; oh, this is even better—from having an Order Paper collapse altogether.

The next item is to “provide a power for aviation security officers to search passengers’ outer garments …” and to undertake pat-down searches. Maybe the Minister will help us with the definition of “outer garments”; how many layers of garments can people have before they can finally start saying: “Hang on—those are my middle-layer or under-layer garments.”?

Hon Harry Duynhoven: Maurice’s imagination is running riot.

Hon MAURICE WILLIAMSON: The Minister says there is a definition of outer garments? That is excellent. I will look forward to having a look at that, and then see whether I always comply in terms of the stuff I wear.

The bill will “provide a power for aviation security officers to seize potential weapons;”. Again, I would have thought that that was just straight common sense; I thought we already had that. “Potential weapons” is interesting. What did the 2001 terrorists use in New York? They used what Americans call box cutters, and I think we just call them—come on, what do we call them—Stanley knives, or something.

Hon Harry Duynhoven: No, no. Stanley knives are much bigger.

Hon MAURICE WILLIAMSON: Are they? So a box cutter is not even as big as a Stanley knife.

Then we get into the whole debacle about what is really a potential weapon. Just about anything can be used. I do not know for sure, but a story I was told was that the people on board the plane that crashed in Pennsylvania—the fourth plane that did not crash into buildings—used jugs with boiling water. Because the terrorists had taken weapons off people, and had them all seated so they could not do anything, people boiled some water in the galley and then threw the boiling water at the terrorists to disarm them. So where is the limit for what is a potentially dangerous weapon? Now a jug in a galley or a kitchen can be dangerous. Even a glass of boiling water—if people asked the hostess whether they could make their own tea and just asked for boiling water—could be a potential weapon on a plane and used to overpower someone and take the plane over. So setting definitions and boundaries as to what is potentially a dangerous weapon becomes very difficult.

The next proposals are very interesting. They are to enable foreign inflight security officers to enter and depart New Zealand and to enable New Zealanders to deploy inflight security officers should the Government decide to do so. I think it will be a very long time before New Zealand has to invoke its own security officers on aeroplanes that are New Zealand domiciled, such as Air New Zealand flights going out of here. But I accept that we are flying into some potentially dangerous zones, and some airlines are coming out of them. The difficulty in New Zealand is that we do not have an American airline flying into New Zealand—because Air New Zealand, to its great credit, was able to see off all the competitors. I think we have seen off five major competitors in the past. United Airlines tried and could not do it, Pan American World Airways tried and could not do it, Continental Airlines tried and could not do it—there is one other. I ask members to help me with this. There were five.

Hon Harry Duynhoven: American Airlines.

Hon MAURICE WILLIAMSON: American Airlines was along the way. They all had a crack and could not do it.

Hon Member: BA.

Hon MAURICE WILLIAMSON: Yes, and British Airways from the other side. We do fly to the United States.

One of the things we always have to worry about in terms of the security issue is what will happen if airlines really toughen up. El Al has always been tough; the Israeli airline has made it impossible for terrorists to hit at it. What the terrorists can then do is shift their target to a softer touch. I am pleased that New Zealand is at least enabling this legislation, which will allow air marshals. I would like to know from the Minister whether he thinks air marshals have come in and out of New Zealand already on some foreign carriers. There probably have been some.

Hon Harry Duynhoven: How would you know?

Hon MAURICE WILLIAMSON: A great question. How would we know? Air marshals could be on any flights coming in and out of the country and we would simply not know. I guess the whole point of having an air marshal on a plane is that we should not know. Passengers should not know.

Hon Harry Duynhoven: You have a big badge!

Hon MAURICE WILLIAMSON: Yes, a marshal would have a big badge on the front saying “I am the marshal.”! I do not think that would work because the terrorists would probably deal to that person first.

This is sensible legislation. With any legislation one always wonders whether it will have the desired impact. We have not made ourselves a target. To New Zealand’s credit, our behaviour on the world scene has been a reasonably exemplary performance, and we have not attracted radical terrorists who say they are going to get us. In fact, to be fair to Osama bin Laden in the cave tonight, he is probably first asking the question: “Where is this New Zealand you are talking about?”, rather than wanting to get his bombs and come down here before the passing of the legislation.

Finally, the legislation proposes to formalise the process “for checking the background of people who work in areas critical to aviation security,”. That is probably where the biggest hit of this legislation will be. We need to do thorough and proper background and character checks on those people. That is a much better process. Good people will ensure that, even if the systems do not pick up things, people will still be safe. If good people are not employed, even with the best checking, then people will still be able to sneak stuff in, hide stuff under their overalls, or bring stuff in on the back of a tractor. If anyone has ever done a shift out at an airport at night, they will have seen the machinery, the loaders, and the volumes of big containers moving on and off the runway.

I am happy to say that not only will the National Party support this legislation but all our speakers will take the necessary time to keep the Government’s Order Paper looking OK.

Hon MARK GOSCHE (Labour—Maungakiekie) : I look forward to the Aviation Security Legislation Bill coming to the Transport and Industrial Relations Committee. I am pleased to hear from the previous speaker, the Hon Maurice Williamson, that the National Party will be supporting it.

I would imagine that every party in the House will look at this bill and ask the question why—as most New Zealanders will. It is important to explain, as the Minister for Transport Safety did in his speech, why we have to take steps in legislation that, hopefully, will never have to be implemented. It is largely because of the international scene in which we operate. Although New Zealand is perceived by most people to be a very safe place to live in, a very safe place to visit, and a very safe place in which to fly, it is necessary to take account of the laws that apply internationally, particularly if we want to be able to fly to other parts of the world that are less safe. As people line up at the security checks at Auckland International Airport, or at other international airports throughout New Zealand, they may wonder why they are have to do so, as they did when we first implemented screening. The reason is largely so that the planes they get on can land somewhere. That is the difficulty of the environment, internationally, we now operate in.

The legislation talks about enabling foreign inflight security officers to enter and depart New Zealand and enabling New Zealand to deploy inflight security officers, should the Government decide to do so in the future. But it is important to note that provisos sit alongside that. In fact, if we ever reach that stage, such a step will require full Cabinet approval. I think that is a very good thing, because in the past I have heard in this House, and in the Transport and Industrial Relations Committee from airline pilots organisations in New Zealand, that pilots are very reticent about this step—and rightly so. They get into those planes every day, as we go to work here, and they want to go home at the end of the day, just like we do. They are very wary of the idea of having security people in the air with them because of the potential difficulties that that could entail—and nobody needs to have those spelt out to them. I am sure the select committee will hear such views, take them into account, and consider what is probably the most significant change in New Zealand legislation and aviation security for a very, very long time.

As the Hon Maurice Williamson pointed out, the other matters need to be in law and need to be clarified. The Minister has pointed out that there is some lack of clarity around the carriage of certain items that at the moment we could very easily describe as dangerous goods, such as firearms and traditional weapons. But we are getting into other areas where people might carry something else that on a sports field would be considered quite normal but on an aeroplane could be used as a weapon. These things need to be more clearly defined in law.

We all sit here with some trepidation in terms of passing such legislation, asking ourselves why we need to and why it is necessary in a safe little country like New Zealand so far away from the rest of the world. We have to answer that question very simply by explaining to the New Zealand public that many parts of the world now will just not allow aeroplanes to touch down—whether they are aeroplanes flown by Air New Zealand or by airlines that have passed through New Zealand and are going on to another part of the world carrying visitors and tourists.

It is a plain, simple, and awful fact that we have to abide by these international standards. We need legislation that copes with the international standards if we are to be part of the global economy. Of course, tourism in New Zealand is a massive earner of income. It is a huge employer of people, and we have to ensure that tourists are able to fly to New Zealand, as they do now, and not get held up by the fact that in our own laws we have not sufficiently guarded against danger and have not sufficiently satisfied our trading partners in other parts of the world that allow our planes, or planes transiting through New Zealand, to land.

I look forward to what I think will be an interesting round of public submissions on this bill. It raises some very interesting and important matters of civil rights—

Hon Maurice Williamson: Are you going to write to any terrorist organisations seeking their views on the matter?

Hon MARK GOSCHE: I would not be sure about who will make those submissions, but we will probably have the security guards checking them as they come through the door, as we do already. Seriously, I know that a lot of people will be looking at this legislation very carefully, wanting to be sure that New Zealand has to pass this law. I think that will be an important aspect for the select committee to consider and I am looking forward to being part of that process as the chair of that committee.

DAVID BENNETT (National—Hamilton East) : The Aviation Security Legislation Bill seeks to enhance New Zealand’s civil aviation security measures and to support its obligations under international covenants. The catalyst for this legislation was the terrorist attacks of September 11. The bill also amends a number of other Acts. This major legislation coming before this House—as Maurice said, to fill in the Order Paper—does not represent any major controversy, so National supports it.

Security is vital for New Zealand and for New Zealanders. Our biggest industry is tourism. Our failure to retain world-class standards in security will diminish our base as a tourist destination, and it could potentially affect international visitors’ perceptions. The relative safety of New Zealand has been a driver for increased migration over a number of years, since September 11. Our country has an international airline in Air New Zealand. It is also very important that we maintain top-rate security in order that Air New Zealand can be competitive as an international carrier.

Let us have a look at some of the contentious parts of the legislation. First, there is now the possibility of armed marshals on foreign airlines flying into New Zealand and the possibility of armed New Zealand police on New Zealand - based flights. Although there are no immediate plans to take advantage of these possibilities, it does open up New Zealand aviation to a whole new travel dynamic.

Hone Harawira: What are the advantages?

DAVID BENNETT: The changes have some advantages. They will give us the security we are looking for in our industry, such as being able to counter threats when APEC leaders gather in our region later this year, and they will bring New Zealand into line with countries such as Australia, Canada, Britain, and the United States. It is inevitable that we would do this, as those major countries of tourist origin and destination deploy many people as air marshals on their own flights. With APEC leaders gathering here, it is important that we have that international comparison with our neighbours and are able to provide security for world leaders as they pass through this region. New Zealand has required specific threats to be notified to the Government, and then it will decide whether to grant the air marshal request. That seems a fairly reasonable request and process. This is not, as some people may contend, a bowing to pressure from major countries; rather, it represents New Zealand playing its role in the international community.

New Zealand has no intention of cramming New Zealand flights with armed officers. It is to be only in certain special cases, where certain processes have been complied with. When we fly in New Zealand we often think that our major cities, like Auckland and Wellington, are very vulnerable, because in many cases they have major large buildings in direct flight paths. It would not take much for someone to turn one of our domestic airliners into one of our major city buildings. The risk to New Zealand from terrorism is quite great.

Greater restrictions on what needs to be limited or prohibited from being carried on to planes will be imposed. Anyone travelling through the US would have encountered the 100-gram limits that mean that most toothpastes and allied products cannot be part of passengers’ carry-on luggage. Somewhat innocent products like these, and sports drinks, could in fact be liquid explosives. New Zealand needs to be aware of such risks and play its part in reducing the likelihood of such occurrences.

The greater search powers of security officers are aligned with this issue. It is common place when travelling internationally to have to take off one’s shoes when being screened. Other outer garments, as Maurice has disclosed, are undefined to a large extent, but they also have to be removed. There are also pat-down searches, if it is felt there is a need for them. Airlines will also have the power to deny the carriage of passengers who refuse to be searched. This mandatory searching requirement also maintains the integrity of the system.

Overall, there are a number of changes. The desire is to make New Zealand’s rules comparable with those of its major tourism countries. Although New Zealand aviation has an international element, its most likely weakness is in domestic air travel. There is little or no security at provincial airports covering domestic flights. Planes flying domestic routes can still be hugely dangerous and would be seen as an easy target for terrorists. For example, this weekend a passenger carried a rifle on board a flight from New Plymouth to Auckland.

Hon Harry Duynhoven: Wrong. It was over a year ago, and it wasn’t a rifle.

DAVID BENNETT: That was from the Minister’s own area. The passenger was pulled aside after his plane landed in Auckland and as he was boarding another flight to Kerikeri. The gun should have been in the cargo hold. This incident serves to represent how relaxed we are about provincial airline travel in New Zealand. Our relaxed attitude could, one day, spell disaster. People often fly from Hamilton on packed planes. Those planes could be just as dangerous as a 737 airplane that is full. They could do as much damage to a major city when flying from there to Auckland or Wellington. Those are the kinds of areas that New Zealanders need to be aware of, as well.

A campaign called FLYSMART has been designed to educate people who are travelling overseas. It covers the new limits on the amounts of liquids, aerosols, and gels that can be in people’s carry-on baggage. That is quite a good policy, as it educates people at this stage. Such education programmes are necessary, because the travel environment has changed. People need to know what they are dealing with post - September 11. Similarly, the new International Civil Aviation Organization Aviation Security Training Centre, which is based in New Zealand, recognises international training standards that also have a role in assisting in aviation security throughout this country.

Overall, this legislation contains a number of initiatives that will lead to a safer environment for New Zealand travellers and for international travellers coming through New Zealand. By doing something to counter the major terrorist threat to our world, our reputation in the world of travel will be enhanced.

PETER BROWN (Deputy Leader—NZ First) : Let me say that New Zealand First will support the Aviation Security Legislation Bill’s first reading, but it is a very, very sad day for New Zealand. I can remember the time when I first came to New Zealand from the UK, and this country had absolute maximum freedom. People could leave their doors open and go down the street, and could leave their cars unlocked.

Hon Maurice Williamson: Was that before airplanes?

PETER BROWN: Did the member say something?

Hon Harry Duynhoven: He said: “And then all the Brits arrived.”

PETER BROWN: Oh, did he?

Hon Maurice Williamson: I didn’t say anything. But I think it’s a sad day, too.

PETER BROWN: It is a sad day, because this bill represents a little bit more loss of freedom. Freedom and security pull the country in different directions. If we want maximum freedom we have minimum security, and if we want maximum security then freedoms have to be impinged upon. Freedoms get lost. Freedoms are put in the too-hard basket.

We live in a very, very volatile world. There is an obligation in this country to strengthen security again, and New Zealand First supports that. Sad as it is, we support the passing of this bill. We know that it will restrict freedom, it will inconvenience passengers, and it will make extra work for many people who work at airports. I think I recall the Minister for Transport Safety, Harry Duynhoven, saying that the economic and trade freedoms of this country are at stake. It is more than that. At stake is the economic well-being, the trade well-being, and the social well-being of many people in this country who want to travel. It is a sad day for New Zealand, but this sort of legislation is essential in the world in which we live nowadays.

I will not go into the details of the bill because they were well canvassed by the Minister earlier on and by some members who have spoken before me. But one area does concern me, and that is the little bullet point that states: “require airlines to deny carriage to passengers who refuse to be searched;”. I have to say to the Minister that I hope the Transport and Industrial Relations Committee, when it considers the bill, looks at that point very seriously. I am aware, and I know the Minister is aware, of a young woman who went through an airport and had to be searched. Something made the bell ring, but the staff could not find it very readily. They could not find what was setting off the alarm, so they asked the woman to remove more and more clothing, or unzip whatever she was wearing, to the degree that she was totally embarrassed.

Hon Harry Duynhoven: Not in New Zealand, though.

PETER BROWN: I am aware of a similar type of case occurring in New Zealand. The member has corrected me; the case he is aware of did not occur in New Zealand. But it could easily occur here. The select committee will have to consider such situations. If people refuse to be searched in a public area, then they should be able to go into a private cubicle, where the situation can be handled with a degree of decorum, or whatever. It is not the right of aviation security guards to embarrass people, particularly young people or old people. So New Zealand First will want to see some alternative option for people who do not want to be searched publicly.

But we cannot fault this bill. We wish we could say that New Zealand does not need this legislation—that we do not live in such a world and that we do not want to be captured by this sort of legislation. Unfortunately, those are not the facts of life. The world is getting more and more volatile, more or less as we speak. The problems are of a huge dimension. It is not impossible that some terrorist will get into this country and try to use his—

Hon Maurice Williamson: Or some soccer hooligan.

PETER BROWN: That is not impossible; some of them get up to weird tricks. On a more serious note, it is not impossible that somebody will want to do something very, very sinister in this country in terms of airport security and what have you. We need this bill to protect the many New Zealanders and tourists who travel internationally and throughout the country. New Zealand First supports the first reading of the bill. As I said, we wish that the bill was not necessary, but it is very necessary. In fact, it is essential.

KEITH LOCKE (Green) : The Green Party is very disturbed that the bill allows for armed marshals on planes flying in and out of New Zealand. Those marshals are supposed to make plane travel safer in New Zealand, but in fact they introduce more danger. It is quite obvious that allowing people to use guns in the confined space of an aeroplane is dangerous. Innocent people are liable to be hit accidentally, and if a bullet goes through a cabin wall it could have disastrous consequences for those on board. A bullet hole could cause the cabin to depressurise and bring the plane down.

In the years since the United States put air marshals on planes, I do not think they have dealt with an actual terrorist. But air marshals themselves have terrorised many passengers. In 2005 one air marshal on an American Airlines flight shot and killed RigobertoAlpizar, a schizophrenic, despite pleas from his wife that he was a sick person, not a criminal. Mistakes like that are perhaps even more likely to occur now, when more and more people can qualify as terrorists—such as anyone having in their possession more than 100 millilitres of hairspray or shampoo.

The explanatory note of the bill talks about the danger of “liquid explosive disguised as a sports drink". A Time magazine in 2004 had an article with the headline “Air marshals or cowboys?” detailing 600 cases of misconduct, including one air marshal who drew his gun on a man who had stolen his airport parking space and other marshals who had left their guns in the plane’s toilet, been on drugs, been drunk, etc. I do not think that airliners in the sky are the places for any sort of armed exchange. If there is any possible specific threat to a plane, that plane should not be let off the ground. That is the view of many of the pilots and why they have expressed concern about the proliferation of air marshals on planes. They do not want the airlines saying: “Oh, there’s been a threat to this flight, but rather than lose money by cancelling it, we’ll put an armed marshal on board.”

Do we want to gamble with the lives of New Zealanders by seeing an armed marshal as the answer to a specific security problem on a plane? I ask members not to take my word for it, but there is some counterbalancing of a specific threat to a plane, either cancelling it or putting an armed marshal on board. The explanatory note states that in the absence of air marshals we could have a situation where “Air New Zealand could sustain a loss of revenue associated with the cancelling of flights occasionally”.

Then there are other dangers with air marshals, like one identified in the British Guardian that the system could “play into the hands of well-trained hijackers who could identify the marshal and use his weapon themselves.” A variation of that scenario could be a hijacker, smartly dressed with the right crew-cut, claiming to be a marshal when the stewards or stewardesses were otherwise occupied, and go to the front of the plane. Who would know who was the marshal, or whether there was a marshal on the plane, or whether a marshal was a fake—because marshals, as we know, are always in plain clothes. Masquerading is not very difficult. We read in this morning’s about two carjackers in Sydney who posed as police. They pulled a Sydney doctor over, asked for his ID, took his keys, robbed him, then locked him in the boot. So masquerading is not too difficult, and in an aeroplane it would be very dangerous.

Another reason why pilots have been worried about these measures is that their presence creates a problem as to who is in command—the pilot, who is supposed to be in charge traditionally, or the air marshal? In the bill the air marshal is allowed to take initiatives but is supposed to talk to the pilot at a later point, if he or she can. So there is a sort of joint security command on the plane, with the air marshal being in control of the cabin.

Just this month Dragonair pilots have complained about guns on flights within China. The crew have queried the need for guards armed with regular military-issue semi-automatic pistols and knives on Air China planes leased through the Hong Kong airline. The Hong Kong Airline Pilots Association wrote to the city’s aviation authority: “The carriage of armed personnel not responsible to the commander of the plane is the cause of particular unease. … There appears to be no legal indemnity for the commander, should one of his security personnel take actions that result in the death of or injury to passengers.”

It is quite clear that this air marshal provision in the bill is being driven out of the United States, and perhaps Australia, and not from any identified extra security need in New Zealand. We should not be buckling to the Bush administration in its over-the-top implementation of the so-called war on terrorism. I think Mark Gosche in his speech admitted that the driving force is really what some other countries and Governments are doing. He used the term “the awful fact” that we have to abide by their views. I do not believe we have to. Instead of just abiding by such measures enforced from overseas, we should be aligning ourselves internationally with those people and Governments that are resisting this measure—in Europe and elsewhere—and not just going along with it.

It is clear that the Government is a bit embarrassed about the way this measure is coming in and about the nature of the measures, because it is using the little dodge of saying that it is going to pass this legislation but that the provisions relating to armed air marshals are not coming into effect until Cabinet ticks off the implementation of those clauses. As we know, Cabinet meets every Monday. It would be very easy for Cabinet at its next meeting, the following meeting, or whenever, simply to approve these measures. I do not think we can take that as a reassurance. Similarly, Cabinet can, overnight, put armed marshals on Air New Zealand planes under this legislation, simply by passing something through its Monday meeting.

What about the cost of these measures? I think that has to be borne in mind, because we all know that sometimes we want to go to, say, Australia and when we check out the cost we find that about half of it is for the extra security measures that are coming in all the time. On 19 August last year, the Guardian newspaper stated that there were now over 1,000 American air marshals, and they have a budget of $700 million. Now who, in the end, pays that money? It will be the people buying tickets on the airlines. So do we really want to go down that line?

Of course, there are some good points in the bill, such as having more secure areas set aside, and having proper checking procedures for people moving in and out of those secure areas. Maurice Williamson talked about the fact that someone who wanted to put a bomb on a plane would likely put it in baggage in one of those secure areas, rather than just marching on board with it and probably getting caught at the security check. So, although the bill contains some good measures, I think the issue of air marshals is so dangerous that the Greens will not support it.

We have to look at the whole question of security checking. Maurice Williamson talked about tweezers being taken off people. We almost turned the older generation—women, in particular—into terrorists by taking all their knitting needles off them for a whole period. We have to assess what checking we are doing in terms of the real risk. Perhaps we need statistics from the Government on how many real security incidents have occurred in our several years of intensive checking on aeroplanes. If there have not been any, then perhaps we need to downgrade the checking somewhat.

I do worry sometimes about the powers being granted under this bill for the security people to take what is called outer clothing off people, which has already been talked about in this debate. “Outer clothing” is subject to different interpretations, and it can lead to very embarrassing situations. We could go too far down the road of intrusive checking. Perhaps we should not give the powers to the security people but, rather, give a sort of back-up security power to the police who are in every airport. In really difficult situations, such search powers could be given to police who are called in, rather than give them willy-nilly to the security people, who are often with private security firms.

TE URUROA FLAVELL (Māori Party—Waiariki) :Tēnā koe, Madam Speaker, kia ora tātou katoa, itēneipō. One of the accusations that sometimes comes to us in the Māori Party is that our positions on bills seem predictable. If that is the case, we stand guilty as charged. We apply a methodology that is not subject to the whims of political number crunching to every vote. Our interests are always in how we defend Māori rights and advance Māori interests for the benefit of the nation, Aotearoa. We are not about being suppressed by Cabinet conventions or coalition conditions. Our position is a position driven by kaupapa and tikanga Māori.

So how does this methodology apply within the context of provisions to enhance the security measures for New Zealand civil aviation? Well, the relationship of our kaupapa is not always immediate, but it is always relevant, even if it takes a little bit of time to work through. We are always happy to do the hard work in order to ensure that a strong and independent Māori voice is brought to bear on every issue.

First and foremost, our concern is always to support initiatives that seek to create a clean, safe, and healthy environment in which the well-being of people is protected. Our belief in the value of kaitiakitanga entails an active exercise of responsibility in a manner beneficial to resources and the welfare of the people. We believe that aviation security threats lead to increased risk of danger, whether in the national or international environment. We support the intention of the Minister for Transport Safety, Harry Duynhoven, to ensure that New Zealand can respond to such threats responsibly, promptly, and immediately. We seek also, through the expression of manaakitanga, to create an environment where the care and welfare of people is still important. So we look to the Aviation Security Legislation Bill to ensure that passengers and the families they may have left at home are not exposed to any security risks that could be addressed through the course of the legislation.

We note the new groups of items that pose sufficient threat to safety concerns, including items such as chemicals and electronic components that could be disguised in one form or another as weapons. We also welcome the consistency that will be applied through the bill in prohibiting dangerous goods, traditional weapons, potential weapons, imitation weapons, components of weapons, and innocuous items and substances. The Māori Party notes the inclusion of traditional weapons in the list. This does cause us some concern, and we will be asking some questions around the treatment of our traditional taonga. Does this mean, for example, that our patu, our taiaha, and our mere pounamu will now have to be removed from inside an aircraft and placed in the baggage hold? It is a question to which the Māori Party will be interested in seeing some sort of answer considered when the bill comes before a select committee. This may well be an area of interest that Te Whare TuTaua o Aotearoa, the National School of Maori Weaponry, should be consulted on further, and we would be happy to facilitate such hui, should the Minister wish to take up this idea.

The key point is that there has been a revival in maurākau, or the use of taiaha, and in tikanga. The stories that go with our weaponry invest such taonga tūturu with considerable significance. They may have been passed down from generation to generation. In many cases they will carry the name of a tupuna, and as such they are treated with the utmost respect. Many such taonga may be classified or interpreted as traditional weapons, such as our pātītī, a whalebone-handled tomahawk, or the tewhatewha, a two-handed fighting weapon. Wrapping such taonga in plastic and shoving them in the baggage compartment of a 737 may thus bring more risks to one’s cultural essence than, perhaps, the bill anticipates. All we are saying is that there is an issue here that needs further consideration.

We also suggest that it would be useful for the select committee to consider the value of a public education programme so that people are fully aware of the requirements that lead to the new procedures. We would expect that such a campaign would also include what is to be expected of passengers, their rights, and the consequences of certain actions they may take.

The other issue we come to through the expression of manaakitanga is the anticipated impacts on staff of the increased compliance costs to airlines in increasing security measures. It is not as though this is an industry that needs any more industrial disruption. This House will recall that the threat of outsourcing of about 1,800 ground services jobs has only just this month been resolved. The airline had wanted to contract the work to Spanish company Swissport International, causing the Engineering, Printing and Manufacturing Union to take action to the Employment Court. It alleged that Air New Zealand acted in bad faith regarding consultation over its plans to contract out. A different union, the Service and Food Workers Union, has also strongly objected to the company’s proposal, which it alleges will jeopardise the security of 300 check-in staff, mostly at Auckland International Airport. With such a fragile employment environment, it is essential that the impacts on staff operating at the international airports are taken into account.

Such industrial turmoil is, of course, made worse by the fact that the same airline company recently announced a $109 million half-year pre-tax profit and a special share dividend of $105 million. The Government, as the majority shareholder, receives $83 million of that. Meanwhile, back on the ground, staff are being asked to take a $12 million cut in pay and conditions—an average of more than $7,000 per full-time staff member. Although all these conditions and contractual risks are particular only to Air New Zealand, they will, of course, be highly relevant to the likelihood of this bill being successful in its implementation. The threat of work being contracted out at lower terms and conditions, the reality of staff working harder, and the prospect that many staff will be offered a pay cut or the path to redundancy is already placing the sector under considerable stress.

The analysis to which we subject every bill before we consolidate our position takes into account the influence and direction of kaupapa Māori, the foundation principles of the Māori world and the bedrock from which we frame our analysis. So finally, in relation to the kaupapa of rangatiratanga, we caution that our sovereignty may be put at risk if, in responding to the security paranoia of the United States, we succumb to having American armed in-flight security officers on our planes amongst our people. I mention this, as I have been aware of the trigger-happy nature of the Americans from tales related to me by my uncles and cousins who fought in World War II, the Korean War, and Viet Nam, and, more recently, from what our Special Air Service troops have reportedly said of their experiences in Afghanistan.

In balance, however, we consider that the opportunity in front of us to ensure that New Zealand can participate in an international response to a threat to aviation security is one that requires our full support. The possibility of a risk to life being placed by passengers who take firearms, explosives, or dangerous weapons on board is simply too great for any member to disregard. The Māori Party will be supporting this bill. Kia ora tātou.

JOHN HAYES (National—Wairarapa) : Thank you, Madam Assistant Speaker, for the opportunity to speak in support of this Aviation Security Legislation Bill this afternoon. I was very pleased to hear, through that fatuous twaddle spoken by my colleague from the Māori Party, that the Māori Party will support this bill, because it is a very important issue that all New Zealanders are able to travel safely on our public transport. I just point out to the member that the Treaty of Waitangi was in place some years before the issue of airplane security became important—in fact, some years before airplanes were invented. But the fatuous twaddle from that colleague was not as bad as what I heard from the Green Party member Keith Locke in his wholesale slaughter of the American people and American air marshals and his assertion of irresponsibility.

I say to this House that this issue is not on the House’s agenda this afternoon by accident. It is there because that “itinerant masseuse” Helen Clark is off to the States to massage President Bush’s political erogenous zones. This bill is on the Table today because Helen Clark needs to be able to say to George Bush: “Yes, we have this issue under control.”

The issues began to arise, as people will recall, back in 2001. I note that the Australian Government was able to move very quickly—in fact, far more quickly than the New Zealand Government—and it introduced new aviation security laws back in 2005. If my memory serves me correctly, when there was a scare in London about the use of liquids on aeroplanes, Heathrow Airport was closed down the next day and the taking of liquids on to planes was banned immediately. It surprises me that we have to mess around with this legislation—it is now 2007, some 6 years after the twin towers incident—for something that I would have thought this Government could more efficiently put in place through Order in Council. Nevertheless, we are going down the road of spending probably the next 3 to 4 months putting this important legislation into place.

I particularly commend the select committee and its staff, who have done what I think is arguably the best general policy statement preceding a bill that we have seen in the life of this Parliament. I make that point because this piece of work identifies the major issues of concern, sets out the consultation with stakeholders—other Government agencies and businesses—and then sets out, under each of the areas where change is being recommended, feasible options that can be considered.

Hon Harry Duynhoven: They’re in the gallery.

JOHN HAYES: Well, I commend those people up in the gallery. I think they have done a really good job.

Darren Hughes: Must have used simple language to help the member out.

JOHN HAYES: Most important—I will use very simple language for the member for Otaki—in the bill’s explanatory note there are little headings, “Statement of public policy objectives”. The people in the gallery should really be congratulated on that, because when I go to my own select committee and look at other reports coming before Parliament, I do not find clearly identified statements of why particular legislation is under consideration. Certainly in our select committee we have had occasions when we have asked officials what the consequences might be of not doing something or why we are not doing something, and very often they have been unable to answer us. So I commend those people who have put this bill together.

For example, when we come to “Issue 3: potential weapons”, we see that the public policy objectives are to ensure, first of all: “New Zealand has an aviation security system that gives the public confidence that every reasonable measure has been taken to ensure their security; …”—and I would recommend that Mr Locke of the Green Party read that—and, secondly, “the confidence of our international trading partners and tourists in New Zealand’s aviation security.” These are fundamentally important issues, and I cannot understand that any party in this Parliament would regard this bill as an infringement of civil rights or civil liberties. We have huge interests to protect in tourism and trade and in the context of providing security to our own community.

If we go through “Issue 4: in-flight security officers”, we see that legislative change is needed because the current law does not allow for the discharge of a weapon on board an aircraft in the event of a security incident. Mr Locke thinks it will be an everyday occurrence that weapons will be discharged, people will be injured, and the skins of planes will be broken. I have spent many years flying—including in areas of the Middle East—when armed security officers have been on the planes, and generally I have appreciated their being there for the safety of those flights and for the safety of the people on them.

One particular issue I would like to canvass is that of searches of persons. I am interested in the phrase “rubdown searches”—and this interfaces with what I was suggesting before about the “itinerant masseuse”. We will have to carry plastic bags everywhere, particularly those that fit over our hands, because under the new legislation, the search of a person must be directed by an aviation security officer.

Hon Maurice Williamson: Oh, so you can’t just request one.

JOHN HAYES: No, but people will be instructed, under new section 12 to be substituted for the current section 12 of the Aviation Crimes Act by clause 6 of the bill, to “remove, raise, lower, or open any outer clothing, including (but not limited to) any coat, jacket, jumper, cardigan, or similar article that the passenger is wearing …”—

Hon Maurice Williamson: What about a kilt?

JOHN HAYES: There is a problem here, because kilts are certainly not mentioned in this legislation. But one may be asked to “remove any gloves, footwear, … head coverings, belts, jewellery, or other accessories:”. Then one is to “allow … an aviation security officer, … to carry out a rubdown search:”. The legislation will require that “a female may only be searched by a female unless the search is made by means of a mechanical or electrical or electronic or other similar device.” This is absolutely wonderful legislation; I think it is really quite brilliant. But it is in contravention, I suspect, of the equal employment opportunities legislation. Why should male aviation security officers be disallowed from rubdown searches of female passengers?

New section 12 provides: “(6) For the purposes of this section, rubdown search—(a) means a search of a clothed person in which the person conducting the search may do all or any of the following: (i) run or pat his or her hand over the body of the person being searched, … (ii) insert his or her hand inside any pocket or pouch in the clothing (other than any underclothing) of the person being searched: (iii) for the purpose of permitting a visual inspection, require the person being searched to do all or any of the following, … (A) open his or her mouth: (B) display the palms of his or her hands: (C) display the soles of his or her feet: (D) lift or rub his or her hair; and (b) includes the authority to search—(i) any item carried by, … the person; … (ii) any outer clothing … and (iii) any head covering,”—burka—“gloves, or footwear, … for the purposes of the search.” These are very thorough rules. We in the National Party are in total support of them, although I think there will be a certain scrutiny of these arrangements in the Committee stage of this bill. Accordingly, I will now resume my seat in full support of this bill.

Hon MARK BURTON (Minister of Justice) : I feel the necessity to take a brief call on the Aviation Security Legislation Bill. I was disappointed by the member who has just resumed his seat, John Hayes. He started his speech with unprovoked personal attacks on other members of the House who simply exercised their role, their right, and indeed their courtesy—I suggest to the member—by explaining to the House how they arrived at the conclusion they have on this particular legislation. I think that is a perfectly good thing. The member followed that with quite smutty personal references—[Interruption] To be fair, before Mr Power joined the House there really were smutty, and I thought quite unfortunate, references made not only to our Prime Minister but to the head of State of a very, very good friend.

The laboured discussion the member has just gone through of certain intimate and personal aspects of this legislation does draw some questions. I say to the member, though, in relation to perhaps the most important factual part of what he said, that the reason this bill is before the House now is simple: it is before the House now because it is timely for it to be so. It is consistent with similar legislative provisions of our international partners in terms of meeting our international obligations. It is as simple as that. For the member to go off on some wild and woolly tangent, with some great conspiracy theory as to why this legislation is here now, is simply nonsensical. I suggest to members that it is time we get on with it. I will bring my brief comment to a close there and commend the bill to the House.

Hon HARRY DUYNHOVEN (Minister for Transport Safety) : I move, That the Aviation Security Legislation Bill be considered by the Transport and Industrial Relations Committeereferred to Transport and Industrial Relations Committee

Hon MARK BURTON (Minister of Justice) : I move, That the Criminal Proceeds (Recovery) Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Law and Order Committee. The Criminal Proceeds (Recovery) Bill, which is before the House, provides for a new forfeiture regime for the proceeds of crime. It replaces the Proceeds of Crime Act 1991. Both that Act and the new bill are based on the principle that crime must not be allowed to pay. The bill before the House will achieve this in a fundamentally different and I believe more effective way than its predecessor. The Proceeds of Crime Act allows the Crown to confiscate the profit made from crime, after a person is convicted of that crime. That approach is all very well if the criminal is the only person who profits and if the crime is readily provable, but in this day and age, increasingly, that is quite often not the case. Organised criminal gangs—particularly those involved in large-scale drug dealing—will not be caught for every crime they commit. They will also spread the profits from crime around their membership. We see a lot of evidence of that. In the end, the person selling the $20 tinnies every day is usually not the same person who, as with their gang mates, lives a lavish lifestyle off the proceeds of such criminal activity.

The Criminal Proceeds (Recovery) Bill deals with this issue. It gives the Crown the power to confiscate profits and assets obtained through criminal activity on the civil standard of proof. That is to say that if the Crown can prove on the balance of probability that a person has benefited from significant criminal activity, that person’s property will be liable to forfeiture. Unlike the current regime, no criminal conviction will be required before forfeiture can occur.

The bill establishes two orders to deal with this property. One is the profit forfeiture order, which is directed at the unlawfully derived income of a person. The other is the assets forfeiture order, which targets property that has been acquired or directly or indirectly derived from criminal activity, regardless of who the owner is. This approach will allow us to target gang leaders who do not get their own hands dirty but in the end enjoy the benefits of their fellow gang members’ illegal activity. It will also help New Zealand to meet its international obligations regarding laundered money, international crime, and terrorist funds. The bill will enable New Zealand to cooperate with other nations to confiscate the proceeds of overseas crime if they ever end up in this country. This will be made possible through expanding the Mutual Assistance in Criminal Matters Act 1992 to expressly enable the enforcement of foreign civil forfeiture orders.

The bill also targets property used to commit a crime, such as a farm used to grow marijuana. In the bill this sort of property is termed “an instrument of crime”. As with the current regime, it will be liable to forfeiture, only after a criminal conviction. The court case that leads to that conviction will usually also prove whether particular property was in fact used to facilitate the offence. If the crime is of sufficient seriousness, which the bill defines as an offence carrying a maximum penalty of at least 5 years, the prosecutor can then apply for the forfeiture of the property to the Crown.

Requiring a conviction before an instrument of crime is in whole or part forfeited acknowledges the fact that instruments of crime—unlike profits of crime—may have been obtained quite legitimately. The instruments we refer to—whether a farm growing marijuana or a basement of a house being used for meth lab activity—may in fact have been passed down from generation to generation, from one honest Kiwi to the next, only to come in the way of one wayward son or daughter who abuses his or her legacy.

The bill takes a new approach to instrument forfeiture in one important aspect. It recognises that confiscating a person’s lawfully gained property is itself a sanction, in a similar way to a reparation order or fine. In the same way as those sanctions are taken into account in determining the total sentence imposed on an offender, instrument forfeiture should also be taken into account in the sentencing process. This will not stop the courts from imposing appropriate sentences on culpable criminals, but it will make sure that the penalties for committing crime are consistent and proportionate. I suggest that this is not the case under the current law, where the forfeiture is completely separate from the sentencing process.

As with the current regime, in all cases the Crown can gain control over property before a forfeiture order is made, to ensure that property stays in one piece. This occurs through what is called a restraining order. A restraining order can be granted over property if there are reasonable grounds to believe that it is an instrument of crime, an asset derived from crime, or that the person who owns the property has unlawfully benefited from significant criminal activity.

Effective operation of the regime is dependent on the right enforcement agencies being chosen to take charge of forfeiture. The bill establishes the Serious Fraud Office as the home of a recovery body to be responsible for the civil forfeiture regime. The New Zealand Police will continue to be responsible for the confiscation of instruments of crime, because of the criminal aspect of such orders. The official assignee will continue to be responsible for the maintenance of restrained property and the dispersal of forfeited property.

These agencies need powers to help them carry out their roles. The bill contains a broad suite of powers to enable enforcement agencies to search for, to seize, and to restrain the proceeds of crime. The bill gives the Crown significant new powers, but it also provides protections for those targeted by the various orders. For example, when a property is restrained, the courts can allow reasonable living and business costs to be met out of restrained property. The courts can also ask that the recovery body undertake to pay any damages or costs associated with the making of a restraining order. More significantly, protections are available for those facing the forfeiture of property. Often, third parties will have a legitimate interest in property targeted by this regime. These third parties can apply to have their interest in property excluded from any order, and I think, again, members would generally see that as a sensible and reasonable protection. The exclusion provisions are primarily intended to protect people and institutions in business relationships with property owners such as banks. They may also protect the spouse, children, and dependants of criminals who might otherwise become innocent victims of forfeiture orders.

In all cases of forfeiture, the courts can look at the hardship that might be caused to people whose property is at risk, and make orders accordingly. This applies to the person who is targeted by the order, as well as the third parties. These orders might exclude property from forfeiture, or provide that a payment be made from forfeited property to the applicant. Again, spouses, children, and other dependants are likely to benefit from such orders.

Overall, I believe that this bill finds an appropriate balance between targeting the proceeds of crime and toughening up on that, as we should, while protecting personal and property rights. Accordingly, I commend the Criminal Proceeds (Recovery) Bill to the House.

SIMON POWER (National—Rangitikei) : It is with pleasure that I rise to agree with Mark Burton on something today, and I can say that the National Party will be supporting the Criminal Proceeds (Recovery) Bill through its first reading. I take this opportunity to make a few preliminary remarks about the background to the bill and the scope of the bill itself. At the 2005 general election it was National’s election policy to amend the Proceeds of Crime Act in order to target the economic base of organised crime. Members on this side of the House believe that the bill currently before Parliament warrants the support of the main Opposition party, in order that further discussions can be held at the Law and Order Committee.

It has to be said, though, that with the best will in the world the Government has taken its time to bring this legislation to the House, after it introduced the Criminal Proceeds and Instruments Bill back in June 2005—something that the Minister did not spend a lot of time dwelling on during the course of his introductory remarks. That bill was intended to introduce a civil forfeiture regime that would force criminals to prove that all their property was not the proceeds of crime once the court had decided it probably was. In fact, the then Minister of Justice, the Hon Phil Goff, said at the time that the retrospective legislation would have “an immediate impact” and would recover an estimated $14 million a year. Of course, the problem with that statement of Phil Goff, and with the subsequent lack of explanation from the Minister in his speech, was that the Government mysteriously withdrew that bill in the following month after that statement was made, before it could even be debated. So members, in hearing the Government claim this afternoon that it is getting tough on those who are secondary parties to the proceeds of crime, should not forget the history of the procedural muck-up that the Government is presently mopping up with the first reading of this bill today.

One thing I do agree with the Minister on, in respect of the process around this bill, is that we need to hit the gangs, in particular, in the pocket if we are to have any impact on their activities, and especially to hit those presently making supposedly millions of dollars from the manufacture and peddling of methamphetamine or the drug P. Of particular concern, though, linked into that, is the fact that in recent weeks we have seen a huge number of P cases presently clog up the High Court. The High Court, of course, in many instances has been unable to get to those cases. I suggest to the Minister that one of the things National will be interested in when this bill goes to the select committee—and I am pleased it is to go to the Law and Order Committee, which I sit on—is to ascertain how this legislation will work within the courts’ capabilities, in order to deliver not only timely justice but also the slightly more complicated regime that is currently being proposed. I will also be interested to see how the practicalities around establishing a separate mini-bureaucracy for the enforcement of recovery will work, and I see the Minister is acknowledging that that is probably a novel point in the legislation. I wait with interest to hear from the officials on that point.

I have to say too the value of assets that the Government is confiscating under the Proceeds of Crime Act is presently dropping, despite the number of cases increasing. Despite the number of cases doubling to 41 since 2002-03, the total value seized is one-third of what it was—a drop from just under $4 million to $1 million—and the average value of each seizure has dropped from about $183,000 to $24,000. So this legislation, in that sense, is timely.

I will also be very interested to receive advice around the comment the Minister made that this legislation will help us to meet our national obligations in respect of the laundering of money. I will be interested to hear advice from the officials on that point. I did not place a lot of emphasis on that when I first read through the draft bill late last week, but I look forward to receiving advice in that area. That leads to the point set out in the general policy statement that what this bill does do—and we hope it does this—is, finally, to put us in line with countries like Australia, Ireland, and the UK, which, as I understand it, operate similar regimes to the one currently proposed. [Interruption] I say to Judith Tizard that that was a very helpful contribution!

As I said, it will be interesting to take the opportunity at the select committee stage to have the officials run through how the procedure will actually work, from start to finish. Although the bill is filled with good intentions, of course, often the problems associated with our court system and the recovery of the proceeds of crime are far more technical and difficult than any legislation will at first, perhaps, predict. I think the Minister, in fairness, would acknowledge that these problems are not straightforward. So I will be interested to see whether the—to be fair—laudable policy statement can be translated into workable mechanisms to ensure the recovery of the proceeds of crime.

Members should make no mistake about this legislation; even from National’s point of view, some of the steps proposed in this bill are large ones. We are talking about shifting, in a couple of cases, the burden of proof quite substantially. That is not without merit, in my view, but it is a big step. I think that members of the Law and Order Committee will be interested to question officials, and those who make submissions on the bill, as to how that would lie against any international obligations we have in respect of civil liberties, or the like. It is a discussion worth having, and the only reason I say that is that if we are to take the confiscation or recovery of the proceeds of crime seriously, we must balance the loss of rights of some people against the requirement of the majority of New Zealanders to make sure that gangs and the like cannot profit from crime second or third-hand. It is a delicate balance. National said at the last election that it would tackle this issue if elected. National members are convinced that this legislation, at the very least, starts the debate in a constructive way. We are prepared to support the referral of the bill to the select committee at its first reading.

I note there is no regulatory impact statement in the bill, and I would be interested to know whether that is because it does not need one or because one was not asked for. Perhaps the Minister would like to talk to me privately, prior to the vote, about exactly what the background is to that issue. I think one of the things National will have to be convinced about is the separate bureaucracy that is to deal with the issue of recovery—the separate director of the recovery body, who will have the power to act independently in relation to decisions to investigate. I would hate that body to cut across the work that the Sentencing Council, for example, might be doing, or something similar to that to occur. We would hate to have yet another body in the justice system that served to create another barrier between those seeking justice and those delivering justice on behalf of the legislature.

On that basis, and with those few preliminary remarks, I say National will support this bill at its first reading. I have highlighted some areas where National does have concerns about the bill. We believe the bill is a step in the direction that National promoted at the last election, which was to target the economic base of organised crime, and we will be interested to see how thoroughly it is able to do that. We will also be interested to see that the mechanics involved in that particular process work, not to the advantage of those who profit from crime but, quite to the contrary of that, to ensure that those who profit from crime find themselves dealt with more harshly than this Government has been able to do for the last 8 years.

JILL PETTIS (Labour) : I am pleased to take a call on the Criminal Proceeds (Recovery) Bill at its first reading. One of the principles we need to pay attention to, as the Law and Order Committee members process and progress this bill through its stages, is the principle that the bill is largely based on; that is, that crime must not pay. I think that is a statement and a belief held by most civilised people. Labour strongly believes that this legislation upholds the principle that crime must not pay.

Currently, the Proceeds of Crime Act 1991 allows the Crown to confiscate the profit made from crime, after someone is convicted of that crime. But the profits of crime, as we well know, can be spread among many people—not all of whom are able to be convicted of the crime. Gangs, unfortunately, often fall into that category, when the leaders are clever enough to distance themselves sufficiently from the criminal activities of the people whom they are associated with. So the “Sherpas”, so to speak, do time, but the leaders remain immune from any conviction. So this bill will be effective, in that it deals with this problem. It gives the Crown the power to confiscate, on the civil standard of proof, profits and assets obtained through criminal activity. The bill, as I said, will help us to tackle those leaders of illegal organisations who do not get their hands dirty.

One other aspect of the bill I am pleased to see included is that there are, significantly, protections available for those who are facing forfeiture of property as a consequence of crime, because, although some people may not choose their associates, partners, and spouses very carefully, families, or organisations, such as banks, can sometimes be innocent victims or innocent third parties. So there will be some protection for the spouse, children, and dependants of people who are engaged in criminal activity.

This bill is timely, and I look forward to the committee receiving submissions on the bill. I think there will be considerable public interest in the debate. The bill is about seeing that people do not profit from illegal activities. I look forward to the progress of this bill as it goes through the select committee and returns to the House. Thank you, Mr Speaker.

KATE WILKINSON (National) : In speaking in support of the first reading of the Criminal Proceeds (Recovery) Bill, it is useful to repeat the object of the bill, which is a worthy one, set out in the explanatory note. It is “to make more effective provision for the confiscation of property that either represents the profits of criminal offending or was used to facilitate the commission of crime.” It has been said that the bill is intended to repeal the Proceeds of Crime Act 1991, but I have to say its passage so far has not exactly been speedy. Unlike the previous speaker, Jill Pettis, I do not believe it has been timely; in fact, it is somewhat overdue. But having said that, the bill is now before the House, so let us make sure it proceeds with due expedition.

Mr Power, my learned colleague, has stated that nearly 2 years ago the Criminal Proceeds and Instruments Bill was introduced to Parliament. According to the then Minister of Justice, Phil Goff, millions of dollars a year were to be confiscated from gangs and organised crime. At that stage it was estimated that up to $14 million per year would be recovered under that new legislation—which would now have been old—with about 70 confiscations per year. It is disturbing that 2 years later there have been approximately $28 million of lost proceeds and 140 lost opportunities to confiscate property, and we now have the newly named bill, the Criminal Proceeds (Recovery) Bill. We have asked why this bill has taken so long to even get to the House, and why the previous bill mysteriously disappeared from the Order Paper 2 years ago.

Under the currently existing Proceeds of Crime Act 1991, the owner of property has to actually be convicted of a criminal offence before property can be confiscated. This bill departs from that and introduces a non-conviction - based regime to deal with property other than items actually used to commit or facilitate the commission of criminal activity. A court can order the confiscation of such property if it has reasonable grounds—and that means it is satisfied on the civil test of the balance of probabilities, not the criminal test of it being beyond reasonable doubt—to believe that the person derived some benefit from criminal activity. In practice, this may—and, hopefully, will—capture, for example, gang bosses who are at arm’s length from any actual offending but who, on the balance of probabilities, did actually benefit from such offending.

We must ask, however, as a matter of principle, whether it is acceptable to give the State significant powers of confiscation when it does not have sufficient evidence to prosecute those gang leaders in the criminal courts—in other words, to rely on the lesser civil test of the balance of probabilities, rather than on the criminal test of it being beyond reasonable doubt. This legislation should not be regarded as giving the courts the easier path and the less strenuous test of proof. Other jurisdictions internationally—and it is often sensible to align ourselves with some of them—such as those in the United Kingdom, Ireland, and Australia, have introduced similar legislation to this, enabling criminal proceeds to be targeted without a conviction necessarily being obtained. However, I believe that we need to proceed cautiously. We need to be satisfied that the lesser standard of proof is used properly and not lazily, and that safeguards are in place to prevent a misuse of that power in a fishing expedition in circumstances where, for example, there is not sufficient evidence even to arrest the defendant for the commission of a criminal offence. We need to be satisfied that there is a reasonable suspicion that a criminal offence has been committed in relation to the property in question and that the burden of proof is being applied properly to ensure justice and to avoid injustice.

The other caution at this stage that I put on record relates to the department or organisation that is to be designated by the Attorney-General as the recovery body. The Minister has suggested that it will be the Serious Fraud Office. However, it may be the police. I again caution that if it is to be the Serious Fraud Office, that office has a dubious record in relation to cases such as the Westpac helicopter case, Digitech, and others. It certainly has a perceived poor prosecution rate. Despite the Serious Fraud Office having more powers than the police, it seems to have significant orders for costs awarded against it for failed prosecutions. It draws criticisms from many, including one judge troubled by its decision to pursue a case independently of the Inland Revenue Department. The judge himself said that he did not think that that prosecution was “reasonably and properly pursued”. With such a track record, it is crucial that the select committee scrutinise and consider very carefully whether the Serious Fraud Office is or will be the appropriate body to oversee this Act.

That was my very brief call in support of this bill. I look forward to being part of the select committee that scrutinises in more detail the terms of the bill and the issues raised by it. National supports this bill being submitted to the careful scrutiny of the select committee.

RON MARK (NZ First) : I rise to take a call on behalf of New Zealand First and to indicate that we will be, naturally, supporting the passage of this bill. It is the type of legislation that is core to New Zealand First beliefs, and always has been. Before we all get too comforted and lulled into a false belief, that has not been the position of either of the parties whose members have just spoken—historically speaking, that is. It is interesting to note from the outset that this bill will repeal the Proceeds of Crime Act 1991—an Act passed supposedly for the purposes of providing for confiscation of property gained as a result of criminal activities, an Act passed under a National Government, and an Act that National is now saying should have been repealed long ago. National is criticising the Government for being tardy in its progress of improving National Government legislation. It might sound somewhat churlish, but had some people done the job they were paid to do—and paid exorbitantly well, at that—for 9 long years, we would not be debating this bill right now, as the legislation would be perfect. Of course, we all know that perfection is what Simon Power and the National Party all strive to achieve, albeit they always seem to find it impossible to achieve when they are in Government, but easy to talk about and lambaste other people about when they are in Opposition. How strange is that?

A lot of things would probably be best left unsaid by National’s law and order spokespeople, as National’s track record and history are pathetic, at best, on matters such as this. I recall that when these issues were being discussed back in the 1990s they were championed by the Rt Hon Mike Moore and a pretty heavy Labour Opposition in terms of law and order—Phil Goff and George Hawkins. In fact, it was discussed during the submissions heard by a select committee when it conducted an investigation into organised crime in New Zealand. One of the strong submissions consistently put to that committee was that crime should not pay, nor should it be seen to pay, and that criminals who had gained assets—gained net worth—as a result of their criminal activities should have those assets confiscated. That discussion was happening in 1990. I think it was happening in the 1980s. It was happening in 1993, 1994, and we were still having discussions about it in 1997, because clearly at that stage the Act that had been passed by National in 1991 was not effective. It was proving itself to be ineffective.

New Zealand First was able to do a number of things in its short tenure in coalition Government with National, such as putting another 500 police on the beat to replace the 400-odd taken away by the National Minister who introduced a computer called INCIS to do the same work; such as strengthening the law on disassociation and consorting, and intimidating witnesses. New Zealand First fought hard for legislation like that in the National - New Zealand First coalition and it put it into effect and enacted it. But this area still remained.

Meanwhile, we have seen a number of things internationally since that time. If we look across to Australia, New South Wales has passed legislation, as has Western Australia. In fact, in 2003 the New Zealand Law and Order Committee went across and visited a number of states and looked at law and order issues. One of the organisations we visited was the Australian Crime Commission. In the discussions that the Law and Order Committee had with the commission we learnt of the steps Australia was taking to ensure that the principle that crime should not pay was being dealt with.

In Ireland there was the infamous assassination of Veronica Guerin. Veronica Guerin, who was actually an accountant by profession but became a journalist working for the Sunday Business Post and the , set about exposing underworld people in Ireland and the massive amounts of money and assets they had accrued. She exposed them deliberately, specifically, and very accurately to the media, which resulted in, firstly, a couple of attempts on her life; then, finally, she was shot dead in her car on 26 June 1996. That assassination so outraged Ireland, the politicians, and the police that there was a massive crackdown on organised crime. I think there were something like 150 arrests, and legislation was moved swiftly through the Irish Parliament to deal with this very issue.

I look at where we are at today, and we have to say that it is about time and it is a good thing. New Zealand First understands the expressions of concern from the National Party and from the Minister himself in respect of protecting people’s property rights, particularly if they did not know that their loved one—who happened to have “Mongrel Mob” tattooed all over his face, drove a big V8, and went to the pad often—was actually involved in criminal activities and thereby they should not be disadvantaged. We understand the concerns that have been expressed there, but let me just say that many of us have whanaunga and extended whanaunga who are involved on one side of the law or another. Some of them are wearing a uniform and others of them are wearing patches. It is very difficult in the criminal underworld to pretend that one does not know where one’s bread is coming from.

We also signal that in this legislation we expect to deal with those people who take their ill-gotten gains and funnel them across into their legitimate businesses. We in New Zealand First would hate to think that just because the money is now residing in the company shares of a legitimate business—that is, a legal business that goes about earning money legally and does not indulge in methamphetamine trafficking or anything of the sort—it should remain untouchable.

We in New Zealand First, when we consider this bill further through the select committee deliberation, will keep foremost in our minds a couple of simple facts—firstly, that organised crime in this country accounts for a methamphetamine industry that has been conservatively estimated as being worth $400 million a year. Methamphetamine is responsible for some of the most horrendous murders, bashings, and rapes that this country has ever witnessed. Police officers regularly every weekend are confronted by people who are totally out of their minds and who possess superhuman strength, because they are under the influence of methamphetamines and amphetamines. People who peddle—who manufacture, distribute, and give away free samples with the aim of creating a firm market base—do so knowing that the drug they peddle is insidious, is lethal, and is going to have only one result. From that, it will generate much more misery amongst the wider families of the individuals who are the users. It causes people to steal, to burgle, and to do anything they have to do in order to raise the money to feed their habit.

People who deal in that industry know well what they are doing. New Zealand First has no sympathies for what will happen to those people under a tight legislative regime that enables the State to remove all of their assets from them. We may, too, be concerned about the well-being of any dependants, but at the end of the day that is what our welfare State is for; it is there to pick up people who through no fault of their own find themselves in need of State assistance—be it family support or a benefit of whatever sort. In our view, it does not justify the need for going soft or light on criminals and the assets they have accrued. We look forward to the bill’s passage for the further debate of this bill, for seeing people, for hearing submissions, and for working our way through to a workable and meaningful result.

NANDOR TANCZOS (Green) : And now for something completely different! As Simon Power said, this bill has been a long time coming. But unlike him, and, it seems, most other members of the House, I do not celebrate its introduction. I had hopes that the Government, once Minister Goff had been moved aside, would have finally come to its senses on this Draconian and outrageous legislation. But, no—it is the same shameful sham laid on the Table today as had been discussed in Government policy—

Darren Hughes: You’ve worked out we’re all as bad as Phil.

NANDOR TANCZOS: You look like a lawyer! According to the general policy statement of the explanatory note, “This Bill seeks to make more effective provision for the confiscation of property that either represents the profits of criminal offending or was used to facilitate the commission of crime.” The statement notes that “The existing Proceeds of Crime Act 1991 provides for confiscation …” but that “The total amount confiscated under that Act has been relatively small.” It makes the point that “Other jurisdictions … have introduced legislation that enables criminal proceeds to be targeted without a conviction necessarily being obtained. These regimes are proving considerably more effective than previous laws in terms of the value of criminal proceeds confiscated.”

That is interesting. It reminds me of the conversation I had at the Home Office in Britain, when discussing its criminal proceeds legislation on which this is so clearly based. Officials were boasting to me about how successful their regime was—it was wonderful; they had collected all this money! So I asked them what evidence they had that the legislation had impacted upon offending, at all. “Oh,” they said, “we haven’t looked at that.” But they said it was successful as a piece of legislation because they had got millions and millions of pounds. If that is how we in this House judge the success of criminal justice legislation, then I think we really are barking up the wrong tree.

What does this bill do? It repeals the Proceeds of Crime Act and replaces it with a “conviction-based forfeiture regime limited to instruments of crime … and a non-conviction-based confiscation regime to deal with all other property representing the proceeds of crime or assessed to be the value of a person’s unlawfully derived income. The non-conviction-based regime … will operate completely independently of any criminal proceedings …”, says the general policy statement. “Consequently, the same person may be the subject of criminal prosecution (including potential forfeiture of instruments of crime) and confiscation action under the civil process.” Well, that sounds a bit like double jeopardy to me. A person is being stung twice for the same offence under totally different regimes.

But even worse than that is the fact that that person does not necessarily have to be the subject of both regimes, because he or she does not even have to be prosecuted. A person does not even have to be charged with a criminal offence for this stuff to apply. If people are charged and acquitted—that is, there is no conviction—it still applies. People can be acquitted of a crime, and this stuff will still apply to them—they will have proceeds confiscated from them. Even worse, they can be convicted and have their convictions quashed on appeal, and this provision will still apply.

I remind members of the House that on appeal one is not starting de novo—to overturn a conviction on appeal there is a very high threshold to pass. But even if someone manages to have his or her conviction quashed on appeal, this forfeiture regime will still apply.

What does it do? OK, in a general sense, the explanatory note says that “Civil action will be able to target property that has been acquired as a result of unlawful activity, even though it may not be possible to prove beyond reasonable doubt that the owner has committed a specific criminal offence.” It enables two types of confiscation orders: “one for the forfeiture of property to a specified value that represents the profits of significant criminal activity; the other for forfeiture of a specific asset or assets derived directly or indirectly from … criminal activity. There is also provision for a restraining order to be made to preserve property while the Crown is gathering evidence …”.

I would like to touch on these things in a little bit more detail—first of all, on this restraining order. The basis for making a restraining order is that the authorities have reasonable grounds to believe that the specific property is tainted property, and they will freeze it, or that the person against whom the order is made has unlawfully benefited from significant criminal activity, which raises the question in my mind of whether we will target casinos. I think their proceeds are probably “lawful” proceeds of crime. Casinos are well-known to have the No. 1 money-laundering operation in this country. I received some information from the Problem Gambling Foundation, which claimed that about 45 percent of pathological gamblers had committed crimes solely for the purpose of financing their gambling. Of those, 28.3 percent had been convicted of a crime at least once, and 44.4 percent of youth with pathological gambling problems had admitted borrowing or stealing money to cover gambling debts.

The most common offences were obtaining finance or credit by deception and cheque fraud, and the most common ways of disposing of proceeds were gambling and using proceeds for living expenses. The mean amount of actual loss was $218,000. So will we be seizing the assets of casinos? Well, I suspect not. Again, it reminds me of my discussions at the Home Office. What they were doing there was quite deliberately targeting people on housing estates, because they told me that it was important to send a symbolic message to criminals that crime does not pay—but to only the low-level ones. They were not going to touch the big fellows in their big country estates driving Jaguars. No, no—they would not touch them, because it was not important socially to send a message that big crime did not pay. What we are doing with this bill is sending a signal that middling crime does not pay; if people want to have their crime pay, then they have to be one of the big boys.

“In the case of a restraining order relating to an instrument of crime … the respondent must have been charged with a qualifying forfeiture offence … with which the instrument of crime is associated, or there must be reasonable grounds to believe that the person is about to be charged …”. Well, OK! “A court may make a restraining order subject to any conditions the court thinks fit … The court may allow … the following to be met out of the respondent’s restrained property … : reasonable living costs … : reasonable business expense … : the payment of any specified debt … ” and “any other expenses allowed by the court.”—but members should get this: “… the court may not allow legal expenses to be paid out of the restrained property …”.

So if my assets have just been frozen—they are being restrained, and I cannot do anything with them, I cannot dispose of them—I am supposed to fund a major criminal defence. It is not even a criminal defence, I am supposed to fund a defence to this piece of trash. How am I supposed to do that if all of my assets have been frozen? The bill specifically states that the court must not allow legal expenses to be taken out. It is absolutely outrageous and I defy anyone in the Government to explain to me how that will allow for any kind of fair trial. I have not heard anyone talk about that yet. All we have heard is how wonderful it is that we are targeting criminals. We have not heard any argument about how the serious New Zealand Bill of Rights Act breaches will be rectified in this bill. Damn, I am running out of time and I am just getting started!

The bill refers to assets forfeiture orders confiscating specific property—that is, tainted property. Tainted property is defined as “… any property that has, wholly, or in part, been— (i) acquired as a result of significant criminal activity;”. “Significant criminal activity” is one where there is a maximum term of imprisonment of 5 years or there is a purported value of property, proceeds, or benefits of over $30,000. A maximum term of imprisonment of 5 years is given for crimes such as possessing forged bank notes, and a feigned marriage—that is a good one. A feigned marriage carries a maximum of 7 years. If, as a result of that feigned marriage, I paid one mortgage payment on my house that I had been buying for the last 30 years, suddenly it has partly been acquired as a result of criminal activity and the whole house is now forfeit on the basis of a feigned marriage. Is that really what we are trying to get here?

The other kind is a profit forfeiture order that deprives the respondent who has benefited from significant criminal activity of interest in a property that represents the value of that benefit and that goes back over a period of 7 years. Now, $30,000 over 7 years is $82.52 per week. If I have been doing something—or have not been doing it but there is a reasonable belief that I have been doing it—that has given me $82.52 a week for the last 7 years, I can have my assets frozen and potentially taken on the basis of that order.

As I said, I am only just getting started and my time is up. There is a whole lot more in this legislation that is absolutely outrageous and I thoroughly recommend to this House to bin this trash right now.

Dr PITA SHARPLES (Co-Leader—Māori Party) :Tēnā koe, Mr Assistant Speaker. If members want to find out how much a decent instrument of crime goes for these days, all they have to do is to log on to TradeMe. Top-of-the-range items of crime can reach prices of $20,000 or more—that was the price an aluminium baton from the 1981 Springbok Tour reached. That baton was used to beat up anti-apartheid protesters and was sold by former National MP Ross Meurant. In May 2005 a private collector in South Africa bought that baton for at least $20,000. Still in the rugby field, the bikini of the infamous Lisa Lewis, who streaked in the midst of the All Blacks game against Ireland held at Waikato Stadium last year, reached only a piffling $4,010. It appears that would-be buyers objected to the sale, considering that because Lisa had been found guilty of disorderly conduct, the auction of her bikini therefore constituted profiting from a crime.

The objections became even more passionate when Ben Nathan attempted to sell on eBay the bloodstained shirt he was wearing in 1997 when he bashed the America’s Cup with a sledgehammer. Indeed so virulent was the hate mail that that auction attracted the item was subsequently withdrawn, with eBay saying it would not sell bloodied items. Finally in my catalogue of confiscated property, earlier this year we saw TradeMe withdraw the auction of the One Tree Hill Husqvarna chainsaw from its antiques and collectables section, supposedly in response to public opposition. Up until the website closed the sale, the highest bid was $15,000, with the auction being viewed more than 15,000 times. That was the chainsaw used by Mike Smith in 1994 to chop down the pine tree on One Tree Hill, Maungakiekie, believing it to be a symbol of colonial oppression.

What can we make of all that? That the crime of interrupting an international game of rugby does not score highly on the list of desirable assets. Even more ironically, the police baton used to bash citizens—described in the auction as “wielded in a blaze of blood”—is valued as a collector’s item, although the instrument used to challenge the criminal impact of colonisation was withdrawn from sale, as was the “bloodied shirt” of Ben Nathan. Presumably both of those items were interpreted to be weapons of offence, but not Ross Meurant’s baton. The bloodied weapon used against people who were protesting about the inhumanities of apartheid in South Africa had a greater value than the tool used to draw the nation’s attention to the inhumanities of colonisation in Aotearoa. One was worth at least $20,000, while the other was withdrawn from sale. Another bloodied article—Ben Nathan’s shirt—was withdrawn from sale because it was bloodied, yet the similarly bloodied baton was not withdrawn. Those are all examples of the double standards that are the prime objection to the Criminal Proceeds (Recovery) Bill.

The point in raising those four different objects is simply to throw up the problems that come with regard to the interpretation of what is an instrument of crime and what is not. Meurant, the House may recall, was the second in charge of the infamous Red Squad at the time of the 1981 Springbok Tour. That tour was the first time New Zealand police had been issued with visored riot helmets and the long baton—tools that were able to be used against anti-apartheid protesters in a way that led to the police being frequently accused of exerting an excessive degree of force. Meurant, ironically, purchased his own special baton from South Africa. Yet here we are, a quarter of a century later, with a key instrument of that violence enabling the offender to benefit from the profits of a website sale.

So what would this bill do differently, in its repeal of the Proceeds of Crime Act 1991? For a start, it would probably not have led to the confiscation of the bikini, the baton, the sledgehammer, or the chainsaw—or would it? The concept is that property that either represents the profits of criminal offending or was used to facilitate the commission of crime will be confiscated. One would be hard pushed to describe streaking on the rugby field or brawling in a pub as significant criminal activity, although again, that is where the question of interpretation enters into it. The questions of interpretation and judgment calls are rife in this new legislation. The bill introduces a new non-conviction - based regime that will operate independently of any criminal proceedings. That new regime causes us some concern. The bill proposes that a recovery body will be established, the director of which will have the power to act independently in order to search for and seize evidence, and the power to apply for confiscation orders, with confiscation being able to occur not upon conviction for criminal offending but merely on the suspicion of such offending having occurred.

We have to admit to being apprehensive about such powers, in the light of advice from members of the Dunedin Community Law Centre. They have raised concern that there are not enough adequate protections for the innocent in the bill or, for that matter, enough instruction and direction given to the police to give confidence that such powers will be operated fairly and without prejudice. As background, they referred to the considerable body of knowledge that the police have already admitted that they have used, and do use, discriminatory practices that impact more harshly on Māori than on other people.

Whenever the police have been given a discretionary power, it has not been used as intended. Research carried out less than a decade ago reported that Māori participants were unanimous in their perception that the police are a racist institution that perpetuates strong anti-Māori attitudes. The research Māori by Pānia Te Whaiti and Dr Michael Roguski cited experiences such as the continual stopping and questioning of Māori on the pretext of criminal suspicion, when no crime has been committed; racist verbal abuse by the police, which precedes or accompanies physical abuse and/or arrests; disrespect for tikanga Māori; and the minimalisation by the police of racist attacks on Māori.

There was accompanying research, Police Perceptions of Māori, that confirmed that policing behaviour differentially targets Māori. That supports Moana Jackson’s 1989 hypothesis of target amplification. In other words, Māori may be more likely than Caucasians to be identified and treated as suspects by the police, because of policing strategies. The data also suggests that on average almost one in four police officers have negative attitudes towards Māori and that at least two-thirds of those surveyed reported that they had heard colleagues using racist language about suspects or offenders.

I have taken the time to expand on the cautionary advice we present about police perceptions of Māori. I was a member of the police commissioner’s advisory team and two police district advisory groups when the findings of that research came out. We worked with the commissioner to try to work with the police in terms of their attitude towards Māori, and, vice versa, we worked on projects in the Māori community about the police. This is a hot topic of debate in the public at present, not only in the light of the policing review and the implications for legislation such as the repeal of section 59 of the Crimes Act, but also because it draws out the concerns of the Dunedin Community Law Centre specifically to do with this bill now before the House. This issue is absolutely central to the implementation of a bill that operates by vesting in the hands of the police the power to target people and confiscate property and assets upon suspicion.

In that context, “upon suspicion” has ultimately led us to vote against this bill, for in it the onus of proof is reversed. Now people are automatically deemed to be guilty until they prove themselves to be innocent. We have major questions around such a precedent being established, reversing the usual “innocent until proven guilty” provision. We are not convinced that there are adequate protections in the bill for the innocent, nor indeed that the racist context of policing from time to time, which several reports have identified, has been sufficiently addressed. We are also not confident that other parties, like the owners of gaming machines and casinos, who themselves could be seen to benefit from the proceeds of crime, the recipients of stolen goods, and problem gamblers who are embezzling to feed their habit, should be exempt from the provisions of this legislation. Our predominant concern is about how we can be sure that justice will be seen to be done. We do not believe that this bill is consistent with the principles of human rights and natural justice that many New Zealanders deem to be very important. Thank you, Mr Speaker.

NICKY WAGNER (National) : I rise to support this Criminal Proceeds (Recovery) Bill. I support it because, on face value, the philosophy behind it stands us in good stead. I think most New Zealanders do believe that crime should not pay. However, after listening to Nandor Tanczos and Dr Pita Sharples, I say that we must be very careful to make sure that the protections of people who are innocent are taken into consideration when we deal with this bill.

Any bill that discourages crime or criminal activity, particularly one that manages to get at the people who are behind criminal activity—the bosses, the gang leaders, and the organised crime administrators; those people who are at an arm’s length from crime and who are normally able to benefit from it without taking the risks—is important. It is also good that we are to come into line with other countries that have passed similar legislation that allows the confiscation of the property and profits of non-convicted criminals who have been involved with significant criminal activity over a length of time. It is in line with National’s policy in 2005, which was to amend the Proceeds of Crime Act and to target the economic base of organised crime.

Ordinary New Zealanders have really had enough of crime. They are getting tired of what is going on in our cities. Anyone who lives in the cities is aware of serial burglaries, there are continuous car conversions, and I think there is a real fear of drug and alcohol - fuelled activities on our streets. I recently surveyed the constituency of Christchurch Central, and every single answer that I received listed the level of crime and violence on the street as being something that was important to people and something that bothered them.

Of course it is the money, and the power that goes with that money, that makes crime and the criminal lifestyle so attractive. I am particularly concerned about how young people are affected by seeing people on the streets who have large amounts of money—and large amounts of freedom to do what they want—that they know have come from an involvement in crime. Young people at the moment are particularly enamoured with that rap gangster look. It is not just in New Zealand; it is a trend right across the world. They love the look of the fast, fancy cars, the hot clothes, and the bling-bling accessories. One needs only to look at music videos on television to see that this look is held up as an ideal.

Of course, it is these young people who become the new recruits in organised crime. They are the ones who go out and do the little crime that they get caught for, as Nandor Tanczos said, while the big boys sit at home, with no risk attached to their actions at all. It is the new recruits who go out and do the crime who end up doing the time—they end up in trouble. So if this bill can increase the risk to those who are employing young people to do crimes, sending them out to do their dirty work, then I agree with it.

I think that a large number of people have done very well out of crime in New Zealand. One needs only to look at the crime statistics and to look at the amount of money that is involved, particularly with drug dealing. Gang bosses and puppet masters are sitting there, enjoying watching the misery of large numbers of people in our society. I do not think it is acceptable for them to be able to get away with that.

This bill repeals the Proceeds of Crime Act 1991, which has no teeth in this situation. It can deal only with people who have been convicted, and therefore they tend to be the small fry, and it also tends to collect small amounts of money—rather paltry amounts of money. That may please Nandor Tanczos, but I think it would be good if we could get our hands on a bit more of the larger amount of money that is going through the criminal world.

I believe that this new bill has the ability to make a real difference. The fact that it can confiscate property from those who are involved in significant criminal activity, without the need for a conviction, will cause a shake-up. But we must be sure that we balance it with the protections that are needed to protect people who may innocently be caught up in this situation—although I also take the point made by New Zealand First that it is quite difficult to be involved closely with people who are in the criminal world without knowing what is going on.

But if this bill can do anything to reduce the rewards of crime going to individuals, particularly those big boys who have been immune up until now, if it could reduce the attractiveness of the wealth of crime so that young people do not get involved—so that people may not end up offending—and if it could reduce the resources available to those who get involved with criminal activity, then I believe it should be supported. Therefore, I support this bill going to the select committee, with the proviso that people look very carefully to maintain protections for the people involved.

CHARLES CHAUVEL (Labour) : I rise to speak in support of the first reading of the Criminal Proceeds (Recovery) Bill. It is clear, I think, to most of us that organised and serious crime is a major problem, and it is increasing. Where it is established that the tools available to the State to protect innocent people from serious and violent organised crime, and also to prevent from punishing those who are involved in such crime, are not available, then it is appropriate for this House to consider equipping the State with those tools. Having heard the Minister’s introductory speech, I would be prepared to support the introduction of the legislation. If there is evidence that the tools currently available are not sufficient, then they should be beefed up.

But I do have considerable sympathy with the views expressed by previous speakers about the need for Parliament to take great care when introducing and considering legislation of this nature—particularly legislation that would alter our understanding of hitherto fundamental freedoms, such as the burden of proof and the way in which we deal with property. I refer, in particular, to the presumption that the courts operate under—that Parliament will never be regarded as having deliberately deprived a person of property without a right to compensation, without the clearest possible words being used in the legislation.

These are fundamental aspects of our constitution. It is largely an unwritten constitution, and it is important that when we consider how to deal with scourges like serious and organised crime, we do not simply come up with knee-jerk reactions, throw the baby out with the bathwater—or whatever metaphors we like to use—and encroach unduly on civil liberties in a way that we would come to regret. In the end, in our country, we are without a written constitution and without courts that can strike down legislation. Parliament is the guardian of the rule of law, and we need to take great care when we deal with measures that may tamper with the balance.

I support the introduction of the legislation, but I would urge the select committee—and I imagine this will be referred to the Law and Order Committee—to consider it carefully and to test the evidence in favour of it. It is important to ensure that we, as parliamentarians, are properly satisfied that the current legislation is inadequate. We proudly operate a system in this country where virtually all legislation comes before a select committee, and that is a great system. It is, as far as I am aware, without parallel. Most other countries do not allow all legislation to be the subject of public scrutiny, but we do. We do it because we are genuinely interested in giving people a right to be heard on legislation, because we profess, as a Parliament, to care about the views of our citizens.

One of the things that it is important to urge on colleagues on the committee, when they hear the evidence on this legislation, is to satisfy themselves that there is need. What are the ways in which the Proceeds of Crimes Act 1991 currently does not work? What is the evidence from the police, from prosecutors, and from others involved in law enforcement that the tools available to the State are not currently adequate? I hope the committee will test the people involved in the prosecution of offences, to satisfy themselves whether there really is a need for this legislation. That is very important.

I think it would also be useful if the committee considers calling evidence from the criminal defence bar—people who have had considerable experience in defending those accused of serious crime. The committee ought to satisfy itself that experts on both sides of the fence do share concerns that the current legislation is not working as it was intended. If there are views that would persuade the committee that there is not the compelling need that we have heard for this legislation, then I hope the committee will voice that view, with reasons, and let the House know, accordingly.

The other important point to make about this legislation is that when the matter does go before the committee, I would hope the committee will also test the protections that are said to exist in the bill. As I have said, this bill does make some relatively fundamental alterations to the way in which we have hitherto considered the manner in which justice should be delivered. Our criminal law system, supposedly, is based on the notion that it is far better to see nine guilty people set free than to see one innocent person convicted. But one of the problems with the effective erosion—for example, of the onus of proof in a quasi-criminal matter such as confiscating the property of a supposed serious criminal—is that those notions are, if not reversed, then thrown into some serious level of disarray.

We are told there are sufficient protections in the legislation. As I say, I do hope that the committee will look at that contention very carefully. Clearly, it is an advantage that the High Court is the court of record that is seized with jurisdiction in civil matters under this legislation, rather than one of the inferior courts. It is to be hoped that that is an indication from the Government that only the most senior judges will be considering these cases at trial level. That is clearly appropriate, if this legislation proceeds, but, again, the committee should look at whether that is an adequate protection.

Similarly, the thresholds for the legislation need careful consideration. The forfeiture orders that are provided for under the bill kick in only where there is a crime of sufficient gravity. The threshold test in the bill is an amount at stake of $30,000 and a term of imprisonment of more than 5 years. The committee should consider carefully whether those are appropriate levels of threshold or whether they should be raised, given the other serious alterations to the system that the bill proposes.

The 7-year limitation period, back through which the legislation applies, needs to be considered. It needs to be looked at very carefully to see whether it provides a sufficient level of protection to effectively impose that sort of limitation period, or whether it ought to be a shorter period. It is a longer period, for example, than the ordinary civil standard of 6 years, by way of limitation.

Also, the specificity of seizure orders needs to be carefully considered. Has the legislation confined those and required them to be defined? The applications for these orders need to be very tightly drawn so that property that might inadvertently fall outside them is not caught in any order made by the High Court. Perhaps it might be that a form of order should be provided for, either in rules to be made under the legislation or in a schedule, so that people can be satisfied, if the legislation proceeds, that there will be very tight drawing of any orders to be made under it.

Clearly, it is also important that innocent third parties be protected from any forfeiture or seizure orders that would be made under the legislation, if it is enacted. It would not be an attractive scenario to see the property of innocent people affected or distrained under this legislation. So it will be important that any property that is truly held in common by persons who are not clearly involved in criminal proceedings will be protected.

There are other matters that the select committee must assure itself of. For example, is the Serious Fraud Office the appropriate body to house the recovery body under this legislation, given concerns that have recently been expressed about the Serious Fraud Office’s record in successfully bringing prosecutions? Are the orders made under the Mutual Assistance in Criminal Matters Act likely to be appropriate? So all those matters clearly do need careful consideration, if this legislation is to proceed. Thank you, Mr Assistant Speaker.

Nandor Tanczos: Mr Assistant Speaker—

The ASSISTANT SPEAKER (H V Ross Robertson): The member has already spoken.

NANDOR TANCZOS (Green) : I raise a point of order, Mr Speaker. Perhaps my understanding of the Standing Orders is incorrect, but I had understood that if there were speaking slots going uncalled, then a member could rise and take another call.

The ASSISTANT SPEAKER (H V Ross Robertson): The member is quite correct, but only if the member has not spoken. In this case the member has already addressed the House, and therefore the speaking slot is not available to him.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : This Criminal Proceeds (Recovery) Bill is the thin edge of the wedge. I hear all this talk as to what people will do about the gangs that are running drugs, etc., and as I look around the Chamber, I see that most of the people doing the talking do not even know what they are talking about. The reality is that in this vague attempt to go after these drug gangs, we are about to breach the principle that people are innocent until found guilty.

I know that as soon as we point out a member of the community and say that, on suspicion, we are taking that guy’s Dodge Ram and Harley Davidson, everyone is going to think: “He done it.”, regardless of whether, later on, he gets off the court case. Everybody in that community will think that he did it—and this Parliament is going along with that. That is criminal and insane, and it is a breach of the principle that all people coming before the law are presumed innocent until proven guilty.

Sure, if at the end of the court case somebody is found guilty, and the Dodge Ram and the Harley Davidson are taken, then them’s the breaks. But it is also a principle that it is the job of the police to prove their case, not just to throw out supposition by hauling in stuff on suspicion so that everybody thinks: “Oh, we will go after this bugger now. Now we will start narking on him.” That is not the police proving their case; that is this House giving anybody the opportunity to take shots at somebody that he or she does not like.

Once we start going down that track, we open ourselves up for all kinds of other crazy laws—like Mr Ron Mark’s “Put Them in Jail When They Are 12 Years Old Bill”. Those sorts of bills are where this is going. In fact, when I heard of Mr Mark’s bill, I thought to myself, why wait until they are 12? Why do we not arrest them when they are going to kōhanga reo, and grab them early? Then, of course, the next reaction is that we should not even wait until they are going to kōhanga; we should arrest the mothers before they even have babies. Oh no, no—we should grab the fathers before they have children. “Where have all the soldiers gone?” That is what this all ends up as.

It goes round and round in circles until we get to a point where, just on the basis of suspicion, I go and grab this member’s flash TV, his flash car, his flash wife, and everything else, saying that he is part of a criminal class because he is part of this Government, which has been ripping off Māori for years and years. So where does this all end? That is the point I am trying to make.

We are opposing this bill because it is a breach of the principle that people before the law are presumed innocent until proven guilty. If we go with this legislation, I would probably still be in jail for all of the charges that I have been up on. I once went up to court on charges that would have put me inside for 96 years. If we can do that just on the basis of suspicion, where does it stop?

This is a ridiculously bad law. It is a law based on fear and ignorance. I say ignorance because nobody in this House—except possibly Dr Sharples and my brother Nandor—has any idea about the real impact of drugs in any community and the effects that they can have, not just on the communities but also on the families of those involved. But when I hear other people talking about it, I suggest that it is the pontificating of the pious. People are going on and on about stuff they have no idea about. Talking about this bill going to a select committee in order to give people an opportunity to speak on it does not change that fact.

I heard Charles Chauvel talking about maintaining protections and all the rest of it, but once we breach that dam, the whole lahar goes. That is exactly what happened on the weekend at Mount Ruapehu, and that is what will happen if we let this bill go on in the way it has been proposed. On behalf of the Māori Party and on behalf of all intelligent New Zealanders, I suggest that this bill be struck down at the earliest possible opportunity. Kia ora tātou.

NANDOR TANCZOS (Green) : I raise a point of order, Mr Speaker. Bearing in mind that I did not think the member had quite entirely finished his speech, I was going to take a point of order to ask the member to yield in order that I might refer a question to him.

The ASSISTANT SPEAKER (H V Ross Robertson): No, the member cannot do that, because the member has already spoken in the debate and is unable to take another call.

NANDOR TANCZOS: Just to clarify your ruling, I ask whether you are saying that a member may not call for another member to yield if that member has already spoken in the debate.

The ASSISTANT SPEAKER (H V Ross Robertson): I am. I refer the member to Speaker’s ruling 54/4 regarding yielding: “It … is confined to a brief comment or question on what the member yielding was speaking on. … [It] is not a means of transferring the call …”. That cannot be done.

NANDOR TANCZOS: I understand that, Mr Assistant Speaker.

Dr PAUL HUTCHISON (National—Port Waikato) : I rise to take a brief call on the Criminal Proceeds (Recovery) Bill. National will support the referral of this bill to the select committee, but not because we disagree with Hone Harawira that the principle of someone being deemed to be not guilty until proven to be guilty should remain as the basis of law in New Zealand. We absolutely agree with the member that that, indeed, is the normal course of events that should be followed.

Hone Harawira: However!

Dr PAUL HUTCHISON: However—the member is quite correct—we do know that the drug problem in New Zealand has become extremely difficult and complex. The extremes that individuals who sell drugs go to are quite extraordinary, so it is reasonable that we take this bill to the select committee in order to further explore mechanisms as to how those who sell illegal drugs in New Zealand may be defeated.

There is no doubt that there has been an explosion of illicit drug-dealing in this country, very much to the detriment of a large number of people. In Pukekohe, in the electorate of Port Waikato, which I am very proud to represent, there was recently a march against P—

Darren Hughes: Bring back Bill Birch!

Dr PAUL HUTCHISON: He is coming back in the next week or so to tell the Labour Government a thing or two about the error of its ways, I assure the member. But in the meantime, Port Waikato has an excellent member. The march against P, which originated in Pukekohe, then spread throughout the country. It came down to Parliament. It was led again this year in Pukekohe, and Pita Sharples was there, showing the way and demonstrating once again the huge concern we have at the grassroots level for the destruction of families that is being caused by drugs in this country. Because of that, I think it is appropriate that we explore every possible measure that we can in order to see whether the drug rings cannot, in one way or another, be defeated.

I do note from the general policy statement that a variety of jurisdictions in Australia, Ireland, and the United Kingdom have introduced legislation that enables criminal proceeds to be targeted without a conviction necessarily being obtained. I am aware that in Western Australia such legislation has been operating for some time, and I understand that it has sent a clear message to those who deal illicitly in drugs that they will have to mend their ways. It seems to me, given the fact that in New Zealand in the last 6 to 8 years we have seen an explosion in the number of P labs busted—from about three or four a year back in 1997 to over 200 a year in the last few years—that unless we look at every possible measure available, and at leaving no stone unturned, then we are not doing our duty in ensuring that everything possible is done to stop this despicable criminal behaviour.

So National will support the Criminal Proceeds (Recovery) Bill going to a select committee where, I hope, that question will be thoroughly looked at. As I said before, although I do agree with Hone Harawira that the principle of being deemed to be not guilty until proven to be guilty should indeed remain as the basis of the philosophy behind criminal justice in this country, it is appropriate that we leave no stone unturned and that we try to think of every possible approach in our effort to stop illicit drug-dealing in this country. Thank you, Mr Assistant Speaker.

NANDOR TANCZOS (Green) : I seek leave to have an additional 3 minutes and 30 seconds, to allow me to finish the points that I was cut short of making in my call.

The ASSISTANT SPEAKER (H V Ross Robertson): The member is perfectly entitled to seek the leave of the House. Is there any objection to that course of action being taken? There is.

KEITH LOCKE (Green) : I will make just a few points to follow on from what my colleague Nandor Tanczos said earlier. I would like to talk about this reverse onus of proof issue, where effectively one has to prove oneself innocent rather than being proved guilty. I will read out a bit of the general policy statement in the explanatory note to explain how the Criminal Proceeds (Recovery) Bill proposes that people can prove themselves innocent: “To obtain a profit forfeiture order, the Director must prove on the balance of probabilities that the respondent has, in the relevant period of criminal activity, derived benefits from significant criminal activity. Once that is proved, the value of those benefits is presumed to be the value stated in the application … It is then for the respondent to rebut that presumption on the balance of probabilities.” I think that would run counter to a recent Supreme Court decision in a drugs case, Hansen v R, where the Supreme Court stated that it supported Hansen in relation to the application of that drug charge because he should not have to prove his innocence.

Another worrying aspect of this law is that the money taken in from these forfeitures goes straight into the State treasury and, although that might be a relief to some taxpayers in the sense that additional money is going in there, surely, if we are interested in victims and in their rights and benefits, any such moneys should be, at least, not just part of a profit-seeking exercise. My colleague said previously that one of the problems with the British law was that it seemed to be a money-gathering exercise, so we are a bit worried about that aspect.

We are also worried about the whole concept, and Hone Harawira spoke very eloquently, I thought, about the undermining of the basic principle that one is innocent until proven guilty. The other worrying aspect is that it can lead to injustices in the sense that, effectively, plea bargaining will go on. If the police come up to somebody and say they have not quite got the evidence to get him on this crime but they think that he did it, and the person says that he did not do it but that someone else did, the police can say that they do not really have the evidence to prove him guilty but on the balance of probabilities they could nail him and do him for a million dollars or the equivalent in assets.

That person would then realise he was in a bit of a corner because he knows the way things work, and that a guy down the road has a grudge against him and—as Hone Harawira said—that guy will give some supposed evidence to say that the person’s million dollars in property comes from illegal activity. So the person is looking at a very difficult situation. When the police come back to him they say that they will not go down the track of taking the million dollars from him if he pleads guilty to a lesser charge, which will give him only 3 months in jail. The police ask him which way he will go. The person, as part of this plea bargaining, takes the 3 months’ jail in exchange for holding on to his million dollars’ worth of assets. That is the very tricky situation we would get into if this law goes through. Thank you, Mr Assistant Speaker.

CHESTER BORROWS (National—Whanganui) : We have to ask just how far Labour wants to go in pushing this philosophy on to those people who do not want it. “We know what is best.” are the words that come from those Labour members constantly in respect of this matter—“We know that the system is working fine but we know what is best.” So as we have it at the moment, people who are attending the sheltered workshops and working there, no matter what level of output they have, are receiving a little bit of money each week.

A little chappie in my electorate, who is getting about $50 a week, is getting enough to keep him in fags and to pay for Sky, and he is pretty happy with that. But we are finding out that he will be assessed as to how much of a fully productive unit he is by the people there, so he will be paid a fraction of what the minimum wage would be. It could well be that he will receive somewhere around $25 a week for the work he is doing. We have to ask ourselves whether that is really fair on him, and whether it is in line with where Labour wants to go on this particular policy.

The other problem we have is that there will be a huge number of exemptions. There is an expectation that almost everybody within the workshop will receive an exemption at some period.

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

CHESTER BORROWS: As I was saying before the dinner break, when it comes to this legislation, members of the Labour Party and the Labour Government say: “We know what is best; we do not care less; eat that!”.

STEVE CHADWICK (Labour—Rotorua) : I am pleased to take a call on Part 2 of the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill. I must say that when I heard the debate in the Chamber on Part 1, I was quite alarmed by the attitude of members of the Opposition in terms of people with a disability. Opposition members showed that they had an absolutely paternalistic approach to people with a disability, rather than an inclusive approach, and that they were rather stuck in the Dark Ages about the role of sheltered workshops. No one who knows this sector well would ever put down the work of those great providers in the sheltered workshops. That is not what this bill is about, at all.

Part 2 of this bill is about repealing legislation that is now 47 years old. This Government is certainly not stuck in the Dark Ages. People with a disability have human rights to be included in New Zealand and to have the opportunity to get proper work—not sheltered workshop work, as the previous speaker Chester Borrows spoke about, for a few bob for a day’s work. These people want to go out, to participate in the workforce to the best of their ability, and to be paid a decent wage for doing that. Who in this day and age would ever put them down for that? Forty-seven years have gone past since the very noble Disabled Persons Employment Promotion Act 1960 was first brought in. Part 2 of this bill now repeals that Act and replaces it with what I think is contemporary legislation.

I want to talk about our Minister for Disability Issues, Ruth Dyson. This Government is the first Government that has committed itself to putting in a Minister in charge of people with a disability. Her reputation has been rather impugned in the House by some members of the Opposition who took a swipe at her and said that she wanted to get rid of sheltered workshops. That is far from the point.

This Minister worked with this sector during the 1990s when Labour was in Opposition. People in the sector said: “We want to take part in civil society. We want to participate in the economic growth of this country. We may have a disability, yes, and we are going to need support from the health sector to cope with our disability, but we want a decent wage for a decent day’s work. We want to go there and hold our head up and go and do a good job.”

We see these people now all over our communities—not just in sheltered workshops. They are participating in some mainstream employment, where they can. They are also going out into community participation activities and programmes, which the sheltered workshops acknowledge is a good thing.

I think the saddest thing I have heard here about the repeal of this Act is that the Opposition just wants to keep it in stone. The Opposition wants to go back to the Stone Age for people with a disability. Frankly, that attitude is patronising in the extreme. If Opposition members had listened to the voices of people with a disability who spoke to Labour members when we went out to talk about our policy Pathways to Inclusion, they would have heard that people with a disability want to be part of ordinary New Zealand society—and that means going out to work. They can work. They work hard, they have a sense of pride, and they deserve to be paid the minimum wage—which will go up to $11.25 an hour—and the youth minimum rate.

We know what the previous National Government did about the minimum wage. There were no movements in the minimum wage from the National Government during the 1990s. This Labour-led Government has put it up seven times. Now we are saying that it is time for people with a disability to take a share of that cake, too. Why can they not reap the opportunities, rewards, and benefits of being a worker in a New Zealand that is on its feet in the workplace? They no longer need to be in protected environments run by people who say—as I know some of the sheltered workshops are saying—that they cannot transition to this legislation and that they want to keep in this mode of working forever.

I am afraid I was really disappointed to hear Dr Paul Hutchison, someone whom I really respect, saying that we should delay the passage of this bill until 2009. What on earth will that achieve for people with a disability? It is absurd. As soon as a message is given by a Government—as we did with Pathways to Inclusion—then the sector follows, including the business sector.

JO GOODHEW (National—Aoraki) : It is with delight that I rise to speak on Part 2 of the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill. You know, let us be clear on what message we are actually wanting to get across tonight. If this bill truly intends to achieve a fully inclusive society for disabled persons, what work has been done to conclusively determine that the unintended consequences of this bill—as predicted by many—will not result in the very opposite, which is exclusion from society? Because this bill is totally unrealistic in its objective.

It is telling indeed that the Social Services Committee, having examined the bill, was unable to reach agreement and did not find ways to make it more acceptable through amendments. It is telling also that the Minister Ruth Dyson has moved the commencement date further out from June, to November. That says that the message is becoming clear to the Minister that things are not all rosy in this particular garden, that the people who will be affected most by this bill are not comfortable with it and nor are their families.

This bill is a chilling example of vulnerable people being dealt to by a Labour Government whose philosophy is the dogma of control. How many people are affected? Members may believe that it is just 3,500 or so individuals but it is their families, as well. Those families care deeply about these people and have responded to press releases—for example, from my colleague Dr Paul Hutchison—by saying that problems with this bill have not been resolved. A lot of people who are included in this bill have impaired productivity. Their work in sheltered workshops is something they live for. Let us not be mistaken about what it means to them and to their lives to be able to work in a sheltered workshop. It is about their self-esteem.

Steve Chadwick: Paying them with a normal hourly rate.

JO GOODHEW: No, it is not about their hourly rate; it is about their self-esteem. It is about the way they feel about themselves. In talking about hourly rates the member demeans these people.

I say to Labour members that until the unintended consequences of this bill are worked out and addressed as they should be, the Government has no right to dictate to these people how their lives should be lived—no right whatsoever.

My colleague Dr Paul Hutchison has made some important points that I wish to reiterate. The way in which this bill is implemented is paramount. We do not want to see people sent home because they cannot be employed any longer in their sheltered workshops. That will do dreadful things to their self-esteem. Therefore, it is good there is some more time for consultation on this particular bill and the implementation of it—some more time, which the Minister has decreed in her Supplementary Order Paper is needed.

There are costs associated. Although the Government is well used to what the explanatory note of the bill describes as transition and management costs, adding to the burgeoning growth of New Zealand’s State sector are scores of people to handle such eventualities. Of less importance, it seems, is the cost to providers of the apparently wholehearted ripping apart of disabled people’s lives.

I finish by saying that caution is required with this bill, because we are talking about people, not just a mandatory minimum wage. We are talking about people and their lives, their self-esteem, and their feelings of worth in our society. Let us get it right for these very important people. Thank you, Mr Chairperson.

SANDRA GOUDIE (National—Coromandel) : I rise to support my most excellent colleague Jo Goodhew. We need to spell it out in probably simple terms—“Jack and Jill” language—so that those members opposite can understand what is really being said here.

Members should consider the case of little Annie. She rocks up to the sheltered workshop because she has a place to go to and a job to go to. She goes in there, gets support for her budget, and meets her friends. She might do a little bit of what she calls work, and what she values as being work, and she has a really good time. She wanders from one department to the other and she has a bit of fun. She might do a bit of baking and she has morning tea. Then she might do other things like paint a picture. All of these different things happen within her sheltered workshop environment.

But what will happen to little Annie when this Disabled Persons Employment Promotion (Repeal and Related Matters) Bill is passed? A labour inspector will go into the workshops—a labour inspector does not go into the workshops of Labour MPs—and make some sort of assessment as to what little Annie is capable of doing. The labour inspector will have absolutely no expertise whatsoever in being able to make those sorts of judgments and assessments.

One cannot make an assessment in a little snapshot of half an hour or even an hour, because the capabilities of people like little Annie vary from hour to hour. At one minute she might be feeling really energised, and she can get out there and do a bit of work. But an hour later she might crash and need to have a lie down. She might be in a bit of a tizz because something has happened and it has thrown her out of whack, and she may even have to go home. So how will a labour inspector be able to go into a sheltered workshop and give a qualified and proper assessment of someone’s work capability?

If the inspector then decides that little Annie cannot work and does not have much working capability, how can he or she tell Annie that she cannot be entitled to a minimum wage? She may be able to work inside that sheltered workshop, but she has to have an exemption because she is not capable of work. [Interruption] As I have just explained to the member, the process of an exemption can be quite horrendous for that individual, and labour inspectors do not have the expertise to make those sorts of judgments.

How do we make Annie understand that she has been deemed incapable of working, and that she has to have an exemption from being paid the minimum wage? I do not know how we do that. I do not know how we can blow people’s self-esteem away like that and tell them in any way, shape, or form that they would be able to understand and appreciate. They feel fulfilled, they feel they are making a contribution, and the sheltered workshop is supporting them in a whole raft of other areas apart from just making them feel valued as a working member of that organisation.

The other part of that equation is, how many of these people the sheltered workshop can support on exemptions, if they have to pay the bulk of everybody else a minimum wage. They cannot do it. It is quite clear that none of these things have been taken into account.

I was very concerned to hear that labour inspectors are looking at readdressing their involvement in the assessments. I would be interested to know just what they are expecting to do. The Department of Labour has recognised that people with disabilities “may have trouble finding a job”. If those people cannot get a wage exemption, or the sheltered workshop cannot afford to look after them even with a wage exemption because of the minimum wages they have to pay to the bulk of the other people who go to the sheltered workshop, then there is a problem.

So I put it to members that this legislation in no way looks after people who have disabilities. Even if they have an exemption, it does not provide them with the sorts of choices that we have in life. Here we have, yet again, the nanny State making these decisions for people who are not being given the opportunity to make them for themselves.

Consultation was a very, very real issue. One of the concerns people had was that the consultation process on Pathways to Inclusion was never completed, and much of the consultation that was cited as being done in regard to the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill was ineffectual.

DARREN HUGHES (Labour—Otaki) : That was an eloquent contribution from the member of Parliament for Coromandel, Sandra Goudie. I say that she is a National member of Parliament, just in case it was not obvious by the tone, style, and philosophical underbelly of her speech. I would ask her whether she supports the Government’s disability strategy called Pathways to Inclusion. Does Sandra Goudie support the strategy or not?

Dr Paul Hutchison: Absolutely.

DARREN HUGHES: It is no surprise to me that Paul Hutchison would understand what we are talking about here, but Sandra Goudie remained mute and quiet during that question—a luxury and a privilege she did not afford us during her speech, sadly.

The reason the disabilities strategy is called Pathways to Inclusion is that the Government is actually serious about making sure that people with a disability live a full, equal, and proper life. I would have thought that in National Party philosophy, the principle of equality is quite important. In fact, in recent years National has gone to some extremes to denigrate some groups in society, under this myth of “We believe in equality for everybody.”

Part 2 repeals the Disabled Persons Employment Promotion Act of 1960—legislation that is nearly half a century old—so it is probably a good time for Parliament to come back and look at it. But there was a time when the National Party spent a lot of time targeting Māori. Anything done for Māori was considered to be bad, and this was National’s way of garnering votes, particularly in rural and provincial New Zealand, as it went around peddling that message. But now, of course, National has decided to be far more inclusive because it is trying to cosy up to the Māori Party, and I am confident that that party will see way beyond that kaupapa, in that regard.

When we are talking about legislation that is 47 years old, I think it is fair to say that attitudes in New Zealand have moved on a little from what they were 47 years ago. National members come down to the Chamber and say, as they do in respect of any piece of social change: “Shock! Horror! This has to stay the same. We cannot possibly have a change. We cannot possibly change the legislative environment from what it was 47 years ago, when Walter Nash and Keith Holyoake brought the bill to the House.”

So when Labour brings along a policy nearly 50 years later and says it wants to achieve its Pathways to Inclusion, National members say this will be terrible. They really mean that this will be a disastrous thing for the remaining number of employers who are paying below the minimum wage, so they will sack all the people with disabilities who work for them. Let me tell those members something. That will not happen, because people always rise to the occasion. It is time in New Zealand that people with disabilities are not paid a lesser rate of pay simply because they have a disability. That ain’t fair! That is not right!

In my constituency of Otaki there are a lot of people with disabilities. I see them out there working and making just the same contribution, with the same love of their job, that others have who work alongside them. Just as this Parliament has legislated for other workers to have those minimum protections and standards, I think we should do the same by repealing this 47-year-old legislation, the Disabled Persons Employment Promotion Act.

Sandra Goudie: Tell us about the people it affects.

DARREN HUGHES: I tell Sandra Goudie, who is parroting away, what will happen. What will happen will be exactly the same as when she gave her speech in 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, and now 2007. Every single time we have moved the minimum wage for ordinary workers in New Zealand—for everybody else—we have heard the same speeches. We have heard that there will be unemployment. We have heard that businesses will close down on the back of it. National has all of these lines, but none of these things ever happen.

If we are serious about Pathways to Inclusion, we have to find ways of removing the last vestiges of discrimination against people with disabilities—and here we have one. We have one here that one would never look at. I would ask Sandra Goudie this. If this law did not exist, would she introduce it? If this law was not on the statute book right now, would she introduce it?

Sandra Goudie: No.

DARREN HUGHES: The member says she would not. The member does not actually support the bill; all she supports is the fact that it is there now. This is the ultimate conservative position: “I am against what the policy is, but, because it is there, I do not want to shift it.” Well, that is not good enough.

In Part 2 we will get rid of a piece of legislation that singles people out on the basis of their disability. We have stopped doing that in New Zealand now, and I think that that is a great thing. We have actually started to say that there will be real ways of achieving the disability strategy and making sure that people can get a decent go, whether it is their working life or whether it is their residential setting. National members oppose deinstitutionalisation, as well, with the smarmy words they use around it. In effect, they do not support that, but once it is brought into place, they will adopt their conservative position and keep things the way they are.

We are very serious about making sure there is vocational change. This is a long-signalled change that the Government is making, through the 2001 vocational information the Minister released.

Dr Hutchison is asking me a question, I will give him the charity of asking what it is.

Dr Paul Hutchison: Obviously, we didn’t mean you to take a call literally.

DARREN HUGHES: Oh, you did not want it literally? The National members on that side of the Committee do not like the hard facts, do they? They like to be able to talk about people with disabilities and be able to make waffly comments about them, but they do not like the truth.

• The question was put that the amendments set out on Supplementary Order Paper 96 in the name of the Hon Ruth Dyson to Part 2 be agreed to.

Dr PAUL HUTCHISON (National—Port Waikato) : Thank you, Mr Chairman, for the opportunity to speak on Part 3 of the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill, which deals with the Minimum Wage Act 1983. This is one of the pivotal parts of the bill—a bill that Labour clearly does not understand. The workshop community has said very clearly that there are major flaws in terms of the implementation.

This bill was introduced in 2004. The Government was not able to get it through because of the deep concerns that most other parties had. One would have thought that during that time it would sort out the flaws in the machinery. However, the workshops say that the flaws are certainly well and truly there. This is what Workforce Auckland said: “Our support for Dr Hutchison’s amendment stems from our concern that the system proposed to replace the DPEP Act contains serious flaws.” It went on to say: “We cannot be confident that these flaws will be remedied in the remaining 4 months of the transition period, given the dismal lack of progress in the nearly 3 years since they were first identified.” There was a “dismal lack of progress” made by the Labour Government in sorting it out. This is what the Labour members do; they stand back and forget about the important machinery things that have to be done in order to implement things properly.

Simon Power: Sloppy.

Dr PAUL HUTCHISON: “Sloppy” is what my colleague Simon Power, the excellent member from Rangitikei, says. Unfortunately, sloppy is what the Labour Government has been. The timeline relating to this bill goes back to 2001, when the review of vocational services first started. By 2004 concerns had been raised with officials, who acknowledged those concerns, but nothing was done. Later in that year the select committee obtained a report extension and asked officials to undertake more consultation, which they said did not happen. We come to 10 March 2005, when the Hon Ruth Dyson acknowledged the lack of progress, and Department of Labour officials said that Workforce Auckland’s concerns were recognised and would be addressed. Two years later and the concerns are still there.

In fact, a letter from only 3 days ago says that despite the fact that the Labour Government has extended the commencement date from 30 June to 30 November—after pressure from the National Party to try to get the machinery in place—these issues will not be resolved. The letter states: “We aren’t totally confident that these issues will be resolved over the next 9 months, given the failure to resolve them over the past 3 years. A change in attitude by the Government would help greatly, addressing the real issues, undertaking proper consultation, and stopping blaming sheltered workshop providers for spreading misinformation about being paternalistic. Attacks like the one that Russell Fairbrother made in his speech on Thursday are very counterproductive.”

This is an indictment on the Labour Government. It does not look at the basic requirements to put legislation like this through so that disabled people may indeed have the opportunities that are due to them through the New Zealand Disability Strategy and through Pathways to Inclusion.

I will make one more point about the changes to the Minimum Wage Act. Section 8(2), inserted by clause 13, states that an exemption permit “remains in force for the period stated in that permit”. Well, the Hon Ruth Dyson has put in an amendment that means that Department of Labour inspectors can revoke an exemption permit at any time they like. That is absolutely against all the principles of good faith, but it has been welcomed by the unions, which have pushed Ruth Dyson into putting it in the bill. I ask all members to vote against this very, very inappropriate amendment, which allows an exemption permit to be revoked at will by a Department of Labour inspector.

One of the great concerns has been the ability of Department of Labour inspectors to come around and work with the workshops to ensure that these exemption permits are put in place. The exemption permits take a great deal of work assessment sensitivity, and they should be in place for a set period of time. One of the points made by the workshops is that this bill actually engenders a quadrupling of the paper shifting—something that no one helping to organise a business to run efficiently wants.

This Labour Government is, as always, increasing bureaucracy and increasing the load on people who are altruistically doing everything they can to ensure that disabled people have a choice of where they work. Government members might say that people do not want to go to sheltered workshops. What we hear from places like the Abilities Group is that disabled people line up outside before work starts because they enjoy it so much. They come back from holidays early because they enjoy it so much. The manager said to us: “Look, we’ve got no locks, and we’ve got no bars; indeed, they come here because it is a very, very valid choice.”

So it is particularly disappointing that the unions have once again pressured the Labour Government to bring in an amendment that allows the labour inspectors to, at whim, revoke an exemption permit. That does not help those who have the very difficult charge of organising sheltered workshops to go about their business—who have to efficiently run these wonderful, altruistic organisations.

We have heard from Labour Government members that paternalism is implied in the National Party’s stance in terms of wanting to extend the period until the machinery is appropriately in place. I say to the Labour Government that nothing is more paternalistic than putting in a bill that just cannot, in any circumstances, ensure the smooth running of organisations that give choice to the disabled. I am very sorry that the member for Rotorua did not understand the fact that the amendment I put in would allow the implementation date of the bill to be extended for a maximum of 2 years, but that if Government members organised things, put them in place, and took out the flaws, the bill could commence immediately. That was the beauty of it, and it seems such a shame that this Labour Government was not prepared to respond to common sense. Once again, we see in Part 3 machinery problems imposed unnecessarily by the Labour Government.

STEVE CHADWICK (Labour—Rotorua) : I want to take a short call here. I think the debate in the Committee tonight is really rather sad. The Opposition has already said that it supported the policy of this Government when it came in, in 1999, of a focus on people with disabilities, and having a Minister responsible for the portfolio. Opposition members said “Well done!”. In 2004 when this measure was first proposed, which is now 3 years ago, the Opposition began its fearmongering throughout the sector about change. Of course this is big change. It is big change because it is a commitment from this Government that everybody in society enjoys the fruits of his or her labour. Dr Hutchison says I got the amendment wrong, but I believe that is all just a sideline activity. This Government has from 2004 been prepared to go that little bit further in relation to transitional management to get this measure properly in place for people with a disability.

I cannot understand the lenses through which Opposition members view the world. They want to keep protectionism and to wrap a safety envelope around people with a disability. I listen to the Disabled Persons Assembly and other sector groups that represent the voices of people with a disability, and that is not what they are asking for. Those disabled persons who turn up to sheltered workshops and love the work—and I have seen it, too—would also turn up early at a supermarket, love the work, do it well, do it loyally, work hard, and enjoy being part of a workforce.

This is about change. The Opposition cannot stand it that we are seeing through the strategy that we focused on in 1999. We went to the public on the Disability Strategy and the public mandated it. We are now putting the nuts and bolts around it, which we began in 2004. Yet Opposition members are still flagging that they want implementation dates to be blown out to 2009. Well, that is absolutely gutless. There is an election next year—

The CHAIRPERSON (H V Ross Robertson): No, no. The member will withdraw. It was a personal reflection.

STEVE CHADWICK: I withdraw and apologise. It is absolutely spineless, because with an election next year we are sticking to our principles—

Simon Power: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (H V Ross Robertson): I know what the member is going to say.

STEVE CHADWICK: I will withdraw and apologise for “spineless”, but people with a disability know what we are talking about.

The CHAIRPERSON (H V Ross Robertson): No, the member will be seated, please. The member cannot add anything at all to an apology. She must stand, withdraw and apologise, and continue her speech.

STEVE CHADWICK: I withdraw and apologise. We are all aware that there is an election next year. This sector knows that this is a Government that puts its money where its mouth is and does not filibuster. We have said that transitional arrangements have to be there.

I will finish by talking about exemptions. I see that the Department of Labour has also been impugned by Opposition members, who have said that officials will revoke an exemption at whim. That just shows that Opposition members do not understand employment relations. How is it in the interests of officials from the Department of Labour to revoke an exemption at whim? That is rubbish. Exemptions for those in real need will remain.

It is vexatious for the Opposition to say it will be up to officials, who will get it wrong and be high-handed with people with a disability. That is rubbish. It is about training those officials in the interests of the sector they will be working with. The exemption process is relatively straightforward. I have seen it; it is just a flow chart that has to be worked through, and it will be put in place for those with high need. It is wrong to say that it will be revoked at whim. It is absolutely vexatious.

This is a wonderful bill. Part 3 repeals the right for sheltered workshops to have protection against any increases in the minimum wage. The minimum wage is a basic human right. As a decent and fair country, it is something that we are signatory to. I believe that it is great that the people who work in this environment will also receive the benefit of increases to the minimum wage, as they ought to do. They are valued employees. Members should go and ask those who have taken the step—because they know this bill is coming—of employing people with a disability what they think about their employee who clears the trolleys in the supermarket. The employee loves it, the employer loves it, and this Government does.

NATHAN GUY (National) : It is great to take a call. I have had people in my office who have been particularly concerned about Part 3, “Minimum Wage Act 1983”. My office is located in Levin, and listeners will know that we have had the closure of the Kimberley Centre. Some of its residents are now out in the community and are doing a very good job working in certain sectors of our community.

Recently I visited Jimmy, a young fellow working in a horse stable. He was doing a very, very good job, cleaning out the stables and feeding the horses. I must say that he was getting a small amount of pay—about $4 an hour—but in respect of the work he was doing, his employers said that his productivity levels were not as great as those of other people. Yet he turns up every morning bright and early, he enjoys his work, and his employers love the work he does for them. He is very much part of their business and he has high self-esteem. Although it would take Jimmy a lot longer to do the job than others would take, he feels very much rewarded by the work he does.

The concern out there in the community of Horowhenua, in moving through this Part 3, is that some employers will actually not employ these people. That is a real concern. It is a concern that a lot of people who have been through my office have about this bill. Although this is Labour’s ideology—it is all about its ideology, is it not—the reality is that people are really concerned, particularly about Part 3. This bill has taken 3 years to be put through, because Labour has not been able to get consensus around the House. That is how long it has taken for the bill to go through and for Labour to get the bill into the Chamber tonight to be debated in the Committee stage.

It is interesting that the Labour Party has caved in to the union movement. The real concern I have is that labour inspectors can turn up at whim and revoke the exemption permits. I do not think that that is on, and the parents who have been to see me do not think that that is on. We have some real concerns in our community about that. There will be a lot more paperwork involved for employers, and although I accept that it is great to have these people out working in our community, I think the biggest concern is that their productivity levels may not be as high as those of other people. There are jobs out there, but the concern for these people in our community is all around the Minimum Wage Act and whether there will be opportunities for them if they have to be paid $11.25 an hour. That is the real concern we have about Part 3.

DARREN HUGHES (Labour—Otaki) : We have just had a member of Parliament from the National Party get up and tell us that if we do not want someone to be paid $4 an hour in New Zealand in 2007, that means we have caved in. That is an extraordinary thing to say. He said that if we do not want to pay any more than $4 an hour for someone with a disability to work for us, we have caved in to the union movement. He says that it is dogmatic, that it is Labour Party ideology gone mad. That is the approach we are hearing tonight from the National Party. I just ask Nathan Guy, who claims to have had somebody come to see him about it, how many have come.

Nathan Guy: Several.

DARREN HUGHES: How many is that—seven, eight? I will tell the member how many people have been to see me about it—two. I have had two people; two parents have been to see me about it. I ask the member how many have seen him. Oh, the member will not answer the question; the member who got up and said he was very concerned about the community he lives in, and all that sort of thing, will not tell us how many people actually have been to see him. I suspect that it has been one; I think it has been one.

You see, what has happened is that the member is saying we are caving in by getting rid of the Minimum Wage Act 1983 exemption in the principal Act for people with disabilities. But I am just saying, as the member of Parliament for that area, for that constituency, that I do not want people in my constituency working for four bucks an hour simply because they have a disability. I do draw a line in the sand at that and say that it is not good enough for somebody to be paid $4 an hour. We can say, well, they are a bit slower and their productivity is not very good. But there are people who turn up for work after a hard night out whose productivity is not very good—some of them are members of Parliament—yet we still pay them exactly the same rate of money. We do not draw a line in the sand there.

This part of the bill gets rid of those Minimum Wage Act provisions and makes it very clear that people have to be paid $11.25—as the minimum wage will shortly become in New Zealand. Of course, when Labour became the Government in this country, the minimum wage was $7 an hour; today it is $11.25. Next year, working with United Future and New Zealand First, we hope to get that to $12 an hour. If we can do that it will mean that workers on the minimum wage in New Zealand will be, on average, 200 bucks a week better off because of the changes made to the minimum wage. [Interruption] Does Sandra Goudie think that it is a good idea or bad idea that people will be 200 bucks a week better off, if they are full-time workers, after the Minimum Wage Act changes that Labour has made?

Sandra Goudie: They won’t have a job.

Hon Maurice Williamson: What if they don’t have a job at all?

DARREN HUGHES: Well, there is a lot of noise from Sandra Goudie, and a lot of noise from Maurice Williamson—the sort of dream team of the National Party. But they will not tell us whether they are actually in support now of the minimum wage changes that they have opposed every single year. We are now saying, in relation to the small number of people with disabilities who are working below the standards in our country, that we are going to bring them in and make them part of the tent. I support that; I think that it is absolutely fantastic that we are doing that.

Another point I make is in reference to residents of the Kimberley Centre. Those final few residents of the Kimberley Centre are not covered under this legislation for getting out and working in the community. We are talking about people who are already working out there in the community right now, not people who have come out of a residential setting. We are making sure that these people will have the minimum rights and protections that our minimum wage legislation allows for in New Zealand. I think it is fantastic; I think it is a great thing for New Zealand. I think it is good that we are saying that people cannot work for $4 an hour any more. I am amazed that today, in 2007, we have National list MPs getting up and saying that $4 an hour is a great pay rate if someone has a disability, because that person might be a bit slower than some other workers. That is a very hard position to accept—

Hon Maurice Williamson: This member should be on $1 an hour.

DARREN HUGHES: Maurice Williamson thinks that $1 an hour is a good rate for people to be paid. I think it is even worse. Of course, the National Party’s problems when Don Brash was leader were all fixed by returning Maurice Williamson to the front bench. Well, if Maurice Williamson is the answer to National’s problem, it must be a pretty bad question, when he is held up as the strategic genius and returned to National’s front bench.

But all I want to say is that Part 3 is a very, very good part.

Hon Maurice Williamson: That was so vicious!

DARREN HUGHES: What was more vicious, I tell Mr Williamson, was when the member was first put on the front bench by Mrs Shipley, then sacked, then put back to the third row, then kicked out by Mr English, then brought back, then rehabilitated after a pinch when the good Dr Brash left. That was the cruel attack—it was not from me. What I said was absolutely kind compared with what the member’s own colleagues did to him. That left him with quite a big disability in terms of Part 3 of this bill—that is what happened when he became a disabled person for the purposes of the National Party caucus.

But I want to say that the minimum wage ought to extend to every single worker in our country. There is no reason, in this day and age, for people not to get it simply for having a disability.

Sandra Goudie: Get real!

DARREN HUGHES: Sandra Goudie, who is a kind of advertisement for the other side of the argument—I accept that—says we should be able to pay people less. She supports the Nathan Guy approach of $4 an hour if people have a disability. I will never support that. I will demand that people in my electorate are paid a decent rate of pay, even if they have a disability, because I do not discriminate against people. I believe in Pathways to Inclusion. I think that this is a great part of the bill, and I support it.

• The question was put that the amendments set out on Supplementary Order Paper 96 in the name of the Hon Ruth Dyson to Part 3 be agreed to.

Dr PAUL HUTCHISON (National—Port Waikato) : Firstly, I want to say that the title of this bill, the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill, does indeed fit in with what this bill is doing. I think it is very important for the public out there to realise that all, or most, of the amendments the Labour Government has put in up until only 2 or 3 days ago would have had the commencement date as 30 June 2007. However, at the very last moment, the Hon Ruth Dyson put in an amendment to extend the date to 30 September. Why did she do this? She did it because the bill was flawed. The machinery to ensure that the sheltered workshops would indeed be able to employ disabled people and give them the real choice they wished for was just not in place.

We have heard time and time again that none of the workshops were confident that those flaws would be remedied in the remaining 3 to 4 months. In many respects, it is a victory for the National Party and for common sense that at least we have pushed the Labour Government into seeing a tiny bit of common sense, if not a complete bit of common sense, which is something it should have.

This bill undoubtedly should have been called the “Ruth Dyson Let’s Steamroll the Legislation Through and Forget About the Practicalities of Implementation Bill”.

Simon Power: That’s a long title.

Dr PAUL HUTCHISON: It is a slightly longer title; that is absolutely true. Let us look at one of the other names it could have been called. It could have been called the “Labour Government Let’s Decimate Sheltered Workshops Bill”. Three years ago, at the time that this bill was first brought into the House in 2004, something like 4,000 disabled people were working in sheltered workshops, but due to the pressure that this Labour Government has put on sheltered workshops they now number only about 1,000.

Hon Maurice Williamson: You’re joking!

Dr PAUL HUTCHISON: There are only about 1,000. There were 4,000 in 2004; there are 1,000 now.

Hon Maurice Williamson: Labour should be ashamed. They should be ashamed.

Dr PAUL HUTCHISON: They should indeed, particularly when we hear what a woman I know—Jane Watts, whose son Lee so benefits and enjoys working at the Abilities Group on the North Shore—said when she heard about the replacement opportunity of community participation. Her words were: “It’s a waste of money. We do those things—take him to the library, swimming, bowling—on weekends. If the government wants to spend more money they should provide more caregivers at Abilities to help people get their shoes on, open their drink bottles. They could build a little gym there, or send taxis for Lee so we wouldn’t have to struggle and worry so much about getting to work.” That was from the mother of one of those disabled workers who absolutely loves what he is doing.

One of the other names that we could call the bill is the “Labour Government Put Pressure on the IHC to Buckle to our Will Bill—the classic thing that this Labour Government has been doing. We know that the chief executive officer of IHC wrote this: “Has the IHC become too PC in some areas? Yes, by being a service provider we have bought into the government expectation, standards and policies. The $140 million … comes with a cost.” We know that in these 3 years we have seen sheltered workshops go from 4,000 workers down to 1,000. Hence the name the “Labour Government Put Pressure on the IHC to Buckle to our Will Bill” indeed fits this title perhaps more aptly than what we see there now.

The real concern is about the commencement of this bill. At least it has been extended by a few months. The other day in the House I asked the Minister whether she could guarantee that no disabled employees or sheltered workshops would be worse off after 30 November as a result of her bill. She said: “No. I cannot guarantee that.” That has to be the ultimate test, because it is difficult to bring in such a bill as this—and the Labour Government has not done it very well, at all.

SANDRA GOUDIE (National—Coromandel) : This is the “Disabled Persons Unemployment Promotion (Repeal and Related Matters) Bill”; that could be its new title, because that is what it is actually going to do. It is what the legislation has been doing, and it is what it will continue to do. Here are people who cannot be employed in any real capacity, and what happens is that they move into what is called community participation where they get taken to the movies, they do artwork, they might play sport, and they go on outings; they no longer go to a workplace environment and feel valued. They have been taken away from that workplace environment and as a consequence have become what would be called unemployed.

Why was this bill introduced? We have been told by other members of the House why it was introduced. It was because the legislation was deemed to be contrary to the Human Rights Act provisions and it was unlawful to discriminate in employment by offering less favourable terms and conditions of employment based on a person’s disability. The Human Rights Act provisions require that the conditions should be not less favourable. Yet here we have a situation, found in no other work environment, where a labour inspector comes in to assess these people. Now, that does not happen in any other work environment, so would that not be contrary to the Human Rights Act? Why is the Government doing that? Hello—hang on—it is because it suits its purpose, because the reality is that it has to have some way of allowing for people who cannot work at a full rate of employment to have some sort of exemption to allow them to continue in those workplace environments.

That is, of course, if those workplace environments can afford to keep them in there. Affordability of those places to keep going is a very real question. Ruth Dyson acknowledged that some contracts might not be viable even at that rate and they might be lost to China, costing the jobs of some disabled workers. So we have to ask ourselves why here on the one hand the Government is saying that the Human Rights Act makes it unlawful to have disabled people operating in work conditions that are not the same as everybody else’s, yet it is imposing a work condition that is not the same as everybody else’s. It is requiring a labour inspector to give those workers an assessment about their work capability, and that does not happen in any other single environment. The only reason it is being done is so that these people have the opportunity to stay within the sheltered workshops that they might be currently enjoying.

It is interesting to note that since this legislation was first introduced it has hardly changed at all. At the outset New Zealand First and United Future opposed this bill, so I do not know what has happened. Even Sue Bradford had misgivings at the beginning. She has been won over, and somewhere along the way New Zealand First and United Future both capitulated and now support this bill. Yet at the outset they did not, and nothing has changed. One has to wonder, and ask why.

What has happened to those 3,500 people who were in sheltered workshops, if indeed the number has gone down to 1,000? What has happened is community participation. How does that make them feel valued and worthwhile, and as though they are participating in a work environment? People will lose their jobs if there is no way for an organisation like the Abilities Group to have the ability to pay minimum wages, and also keep occupied the people who have exemptions.

I challenge the Minister to take a call and tell me how people are not discriminated against in employment by being offered lesser terms and conditions of employment, because the Human Rights Act provisions require that they are not meant to be discriminated against. How are labour inspector assessments not discrimination, when they do not happen in any other workplace environment?

The other thing I would like to mention is the lack of consultation. Many of the families we spoke to were very aggrieved that they had not been consulted, nor had individuals been consulted; that was very clear. Clients, and their families and providers, had numerous questions around the system of wage assessments and how those were meant to be implemented. They still were not clear, and they were loath to endorse a system that focuses on a person’s skills, and not on his or her competencies.

DARREN HUGHES (Labour—Otaki) : I rise to speak in support of the title clause that sets out the name of the bill, the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill. The bill is well named because it sets out exactly what the Labour-led Government has been trying to achieve since 1999, which has been around ensuring, under our Pathways to Inclusion disability strategy, that people with disabilities are able to participate in mainstream New Zealand life, be that in education, in health services, or in employment.

This bill honours our manifesto commitment to review the 1960 legislation. We have also set out to review the funding and the support systems that are available to help people who have disabilities into work, which is what our bill will do, as well. The title of the bill is well named. It sets out our priorities very clearly. We have listened throughout the entire debate to National members basically not telling us very much, apart from the fact that because the law has existed since 1960, we should keep it.

I asked Sandra Goudie whether if the law did not exist, she would introduce it, and she said no. So here we are, trying to repeal legislation that the Opposition spokesperson on disabilities—I think it is Sandra Goudie; it is always hard to keep up—

Dr Paul Hutchison: No wonder your majority is going down.

DARREN HUGHES: I would not have thought that was the reason in respect of Sandra Goudie. She seems to be the person who does a lot of the thinking around this area for the National Party, and perhaps that is why we heard some of the speeches tonight in that regard.

Nandor Tanczos: Hard to believe.

DARREN HUGHES: Hard to believe, I know, but this is a land of opportunity for all people, which is one of the themes the Government has been running tonight, and it ought to extend to members of the Opposition, as well.

The bill sets out to repeal these provisions, which are outdated. We do not believe that any of the predictions of fear, doom, and the end of opportunity for disabled people, which the National Party has put out, will happen. As we do on so many other occasions, we can put a marker in the ground and say: “Let’s come back in 12 months’ time and see whether all these terrible things have happened.” I do not think they will have happened. I certainly do not think we will see situations continuing like the one we heard from Mr Guy, who was supporting the fact that a person with a disability who was working in the racing industry was being paid $4 an hour. I do not think that is fair, and I do not think most New Zealanders would think that is fair, actually.

So if we can, through the title of this bill, bring about some change to honour the Government’s commitment to make sure that people in our country can walk with their heads held high and be treated under the law exactly the same, no matter what their background, then I think the Disabled Persons Employment Promotion (Repeal and Related Matters) Bill deserves the support of the Committee.

Hon PETER DUNNE (Minister of Revenue) : I move, That the Student Loan Scheme Amendment Bill (No 2) be now read a second time. The purpose of this bill is twofold: first, to remove the barriers to borrowers overseas who are returning to New Zealand, and, second, to ensure that borrowers receive their correct entitlements under the Act.

The bill aims to encourage greater compliance amongst overseas borrowers by making it easier for them to meet their student loan obligations. In doing so, it also helps to remove a potential disincentive to skilled New Zealanders returning home. Briefly, the main changes for overseas borrowers, as a result of this bill, will be a repayment holiday of 3 years for borrowers who go overseas, in recognition of the fact that it is not always easy for people to repay their loans while doing their OE and working in holiday jobs. The effect of that change will be that borrowers will not have to make repayments, although their loans will still attract interest. For overseas borrowers who are not taking a repayment holiday, the bill introduces progressive repayment obligations, based on the size of their loan balances. For many borrowers who are overseas, that will mean annual repayment requirements are lower than they are under current law.

Interest-free loans for people who are studying overseas will be extended to undergraduates who are studying full-time at bachelor’s degree level. That does not mean that people will be able to take out a loan for study that is undertaken overseas. Rather, it means that any existing loan they had before leaving New Zealand will be interest-free while they are studying.

The amnesty on penalties declared last year for non-resident borrowers who are in arrears with their payments will be extended by 1 year, to 31 March 2008. That will allow borrowers who are identified in the proposed data-matching between the Inland Revenue Department and the Customs Service to come within the amnesty.

The second group of changes contained in the bill applies to all borrowers, whether in New Zealand or overseas. Their purpose is to update the legislation so that it is consistent with the intent of the interest-free student loan scheme provisions that came into effect from April last year. Let me recap those changes briefly. First, data matching between the Inland Revenue Department and the Customs Service will be introduced, making it easier than it is at present for the department to identify who is overseas and to ensure that only those entitled to interest-free loans receive them. Second, the late-payment penalty will reduce from 2 percent a month to 1.5 percent a month. Third, the hardship provisions in the Student Loan Scheme Act are being amended, to give the Inland Revenue Department greater flexibility in administering them.

Collectively, the changes to the overseas borrowers’ rules, and the changes to the way the student loan scheme is administered, will make it easier for borrowers to comply with their loan obligations and for the Inland Revenue Department to administer the scheme fairly. The changes will also go some way towards removing the disincentive for skilled New Zealanders to return home.

In bringing the bill to its second reading, the Education and Science Committee has reported that the majority of the submissions it received supported the proposed changes to the student loan scheme, believing them to be a significant step forward in improving the overall functioning of the legislation. With that in mind, the committee has made some important recommendations. The first of those is for a new amendment specifying that in order for overseas borrowers to qualify for an interest-free loan on the basis that they are working overseas as volunteers or for token payment as an employee of a charitable organisation, they must establish that the organisation applies its funds to one or more specified purposes. Those purposes include the relief of poverty or of the effects of war or disaster, and the raising of economic or educational standards in a developing country. The second recommendation relates to an amendment to the Tax Administration Act, to ensure that care and management provisions apply to the Student Loan Scheme Act in relation to interest. That legislation currently applies in the case of repayment obligations. The amendment will ensure that there is an adequate basis for correcting any balances that may be in error as a result of a miscalculation, and is important to the Inland Revenue Department’s ability to protect the integrity of the tax system.

I would like to thank the committee for its expeditious consideration of this bill, which I now have great pleasure in commending to the House.

Dr PAUL HUTCHISON (National—Port Waikato) : Thank you for the opportunity to speak on the Student Loan Scheme Amendment Bill (No 2). National will support this bill because it aims to help student loan borrowers living overseas to return to New Zealand, and it simplifies the system. There is certainly a lot to be done to simplify the system of bureaucracy that the Labour Government has created over the last 7 years.

The Labour Government undoubtedly made the student loan scheme even more complex when it brought in its $1.5 billion a year interest-free student loan scheme, and by doing so it provided an incentive for borrowers living overseas not to let the Inland Revenue Department know that they were out of the country. In fact, it was a revelation to everybody, including the Labour Government, that there were probably 40,000 borrowers living out of the country. I hear Mr Donnelly saying that 40,000 was the number estimated by the Inland Revenue Department. It is quite remarkable that Dr Cullen and Labour did not think about the complexities at the time of bringing in this interest-free loan scheme—or maybe they did, but they just did not care. They love complexity, and in many ways this bill is about unravelling that complexity that they have brought in.

Further scaring the Inland Revenue Department is the fact that it has a computer system that was started off in 1992, and I understand that the computer system is breaking into a bit of a cold sweat as it has to deal with the complexity of unravelling this bill, let alone the Working for Families package, the new international tax regulations, and, shortly, the KiwiSaver scheme. The computer system will be under severe strain, and I believe that one of the department’s officials pretty well admitted to the Education and Science Committee at the time that the capacity of the computer system would indeed be stretched, if not highly rattled.

The Labour Government is prone to creating complex and bureaucratic systems. Students come to me and ask why they can have an interest-free student loan but have to pay interest on it that is then paid back to them. One does wonder how one creates this sort of thing, and one can only think that the Labour Government wants to make it harder. It wants to increase the bureaucracy because there is no other way for people to get jobs, etc.

I was not fortunate enough to be on the select committee at the time, but I understand that something like 15 submissions were received on the bill and that, indeed, most of them supported the intent of the bill, as we do in National. But it is worthwhile spending just a little bit of time looking at the submission from Business New Zealand as to why it was concerned about some aspects of this bill. I think everybody was in agreement with the data matching. There is no doubt that when we have something like 40,000 students going overseas, it is remarkably concerning. The Inland Revenue Department has made an estimation of how much could be saved by making sure that data matching occurs, and I think it goes up to about $24 million a year. In fact, the department estimated that data matching, by reducing the number of incorrect interest write-offs, would save $9 million in the 2007-08 fiscal year, rising to $24 million per annum in the 2009-10 and out-years.

But that figure does not compare to anywhere near the 100 percent write-off cost of the student loan scheme, at $1.5 billion a year. It is important that we take note of the OECD report on the tertiary education system in New Zealand that queried whether the Labour Government had its priorities right in terms of introducing this 100 percent write-off, at all. But the scheme is here, and it has created considerable complexities. The data-matching aspect of this bill is worthwhile, and I think every submitter was in agreement with that.

The repayment holiday provision is another issue, and there is some worry there. I note the comment that public and Government attention has tended to focus on the student loan scheme as a cause of long-term emigration by skilled New Zealanders, yet the evidence to support this assumption is actually pretty light. The most detailed analysis of the role that student loans play in encouraging overseas travel was in the Ministry of Education’s 2006 report Do student loans drive people overseas—what is the evidence?, but the report noted that the scale of the linkages, even though the loan balance is a statistically significant factor, is not clear and that its findings should be viewed with caution.

The report goes on to state that the causes of permanent and long-term departures from New Zealand are still not very well understood, although the ministry’s suspicion is that higher wages and a wider range of career opportunities offshore are key factors in the decision to move overseas. This is a very important point, because when this Labour Government came to power in 1999 the average wage for the Australian worker was 22 percent better than that of the New Zealander. Seven years after the Labour Government took power the average wage for the Australian worker is 35 percent better than the average wage for the New Zealander. That is an indictment on the Labour Government. Clearly, it is one of the reasons that we have this problem of a million New Zealanders being offshore. In fact, compared with the number of Australian post-graduates, 10 times as many New Zealand post-graduates live and work offshore. That has to be an indictment on this Labour Government.

The Business New Zealand submission further states: “depending on the size of an individual’s loan and his or her income, the establishment of a repayment holiday for non-resident student loan borrowers could actually create incentives to leave the country.” I think it is important to be aware that that actually is a reality. The concept of a repayment holiday raises fundamental questions of fairness. Why should borrowers who have left the country effectively be rewarded when those who stay in New Zealand, meet their repayment obligations, and make an economic contribution to the country are not?

I look to Singapore quite often. It has recently created a system whereby $1 billion has been spent on young, elite scientists for them to go overseas to some of the best universities in the world and then return home. Singapore does it by bonding them. There is about $1 million per scientist, and if they do not pay it back, the Government will certainly chase them to the ends of the earth, or maybe bring out the rotan rod. Obviously, that is not something we would do in this country, but in many respects the Labour Government is bringing in some perverse incentives.

The second issue is that of repayment obligations for non-resident borrowers. The bill proposes to introduce new repayment rules for non-resident borrowers. It seems extraordinary that the current rules are designed to ensure that loans are repaid in 15 years, and require borrowers to pay off 1/15th of their principal each year, whereas with this system it will become much more complex. Again, it is an example of the Labour Government’s contortions in order to try to fix up a problem it created at the start. In fact, in terms of reducing the obligation, the reduction varies from 40 percent to 18 percent, depending on how much has been borrowed. So there certainly is no consistency within that aspect of the repayment obligations for non-resident borrowers. When one thinks that, in this country, something like 47 percent of our tertiary education and university students have either opted out or not completed their bachelor degrees within 5 years, one realises that that is of considerable worry when we are expending so much on tertiary education.

MOANA MACKEY (Labour) : I am happy to stand in support of the Student Loan Scheme Amendment Bill (No 2), and I thank all the submitters who came to the select committee and who shared their points of view with us. There was not a large number of oral submitters on this bill. I think it is fair to say that submissions were pretty one-sided. With the exception of a few people who raised a few concerns here and there, people were largely very happy with any legislation that would reduce the onus of the student loan scheme on those people who have borrowed money.

It is fair to say that many of the people who raised concerns came from across the board. They were not just students; they were students’ parents, grandparents, and families. All of them were concerned about a number of issues, including things that have come before this House more and more often, such as the affordability of housing, the issues we have with young people putting off having families, and the pressure of work-life balance that comes from many of these things. Student loans feed into all those problems, and we have seen many young people putting off buying houses, getting mortgages, and having families—not because it is the right decision for them to make at the time but because it is what they can afford to do with the weight of a student loan hanging over them. I personally welcome any bill that comes into this House that attempts to alleviate that in any way.

Let us put the blame for the complexity of the student loan scheme firmly where it belongs, which is with the Government that created it at the time—the National Government. I was one of those unfortunate guinea pigs who came in, in the years after the student loan scheme was created. It was extraordinarily unfair. We paid interest on our loans whilst we were studying. Someone who comes from a place like Gisborne, who does not have the luxury of living at home while studying, has to take out a student loan. I worked all the way through from the age of about 13 to save for tertiary education. By the time I got there, the goalposts had been shifted so many times that I had only enough money to pay for my fees and my first term’s board at the university hostel, Weir House, in Wellington. Then I had to get a job, which meant I was not attributing as much time to my studies as I probably should have been, particularly when it came to post-graduate study.

It really was difficult to get by without taking out a student loan. I did not take out the maximum amount of student loan; I was very proud of myself for not taking out as much as I could have taken. But when I graduated and got that final bill from the Inland Revenue Department that showed me just how much I had borrowed, and how much interest I had accrued over the time I had been at university—studying, being unable to work very long hours, having to support myself, and not having the luxury, at that time, of parents who were able to support me—I was staggered. I was absolutely staggered. My loan had got up into the $20,000s, when I had thought it would be around $15,000 or $16,000. It is quite a knock for young people starting off in their working careers suddenly to realise that there is actually a very real opportunity that they may never pay off their loans. There were a lot of items around in the media at the time about the fact that a lot of women take time out from the workforce, and if their loans keep accruing it is very difficult for them to get ahead. When all these studies were saying to us that there was a very real possibility that we would die with that student loan—that for the rest of our lives whenever we worked we would be paying 10 percent of our income to that loan—that really is a scary option for a young person who is starting his or her working career.

We have heard some talk about the fact that wages are so much higher in other countries. Well, they certainly are when we factor in the consideration that we are paying another 10 percent of our incomes, which we never see, straight to our student loans. There was certainly a time, for my part, when I very seriously considered getting a job overseas and working there, but because I wanted to live in New Zealand—because this is where I wanted to be, and because the work I had done on my science thesis was agriculturally based and this was the best place to do that—I did not. I stuck around.

Certainly, when Labour came into Government in 1999 we picked up the policy of New Zealand First, which was to have no interest on loans while people were studying. That was a great policy. It was very fair. It was a good first step. Let us be in no doubt that these policies are very, very expensive. There was a lot of will at the time to do far more radical things, but it was very expensive. When one was starting new in Government, and when there was so much call and competing interest on where money should be spent, that was a good first step, I thought. It made a large difference to a group of students who at least knew that when they graduated, they would have to pay back largely what they had borrowed. I think that that made a huge difference to a group of students. But we have to firmly place the blame for a lot of the complexity on where it belongs.

There has been some talk that this bill might send people overseas because there is an incentive. When we talk about student loans, I have always found that people tend to think in the theoretical and ignore common sense. I wonder, when people say that they have talked to students, whether they really have talked to students. Certainly, I know people who live overseas and who have student loans, and I have tried to help them pay back those loans since we have been here. I have fed back to the Minister the many, many problems a lot of them have had with the complexity of trying to pay back an income-based repayment whilst they are overseas—given that work fluctuates and they do not know whether they will be working from one week to the next, and given the exchange rates, and all of that.

This bill is very sensible in setting up the 3-year repayment holiday. I think that that is a very, very good step. It recognises that New Zealand students travel. They get out of university and they travel. It is part of our culture, and it is becoming more and more so as air fares reduce in price. It is almost an expectation now—it is almost as if there is something wrong with people if they do not finish university and then get a job very quickly, so they can go on their OEs and experience the rest of the world for a while. We have to make sure we can bring those people back.

I do not think there is any point in talking about stopping people going on their OEs. We simply cannot do that. They may not leave simply because of their student loans, but they may very well not come back. The student loan might not be the only reason, but it might be the tipping point that says to them that they have all those things so they should be weighing them up. On balance, because they have student loans and a lot of penalties sitting at home—because they have not made their repayments, either because they have not organised them or because it has been too hard—their loans might be the tipping point that tells them they should stay in the UK or somewhere else in the world, and not come back to New Zealand. That is where we lose a lot of our experienced people.

Again, we need to be realistic. In some sectors, people will travel. Certainly, in the scientific community there is an awful lot of inter-country movement between scientists; people want to go where the best science is. We get a lot of very good scientists coming here, for example, to work in geological and nuclear science disciplines. They tell us that they get people from all around the world. This country is like a living laboratory for geological and nuclear sciences. We have to learn to play that up, as well, if we want to bring some of these people back. But student loans are a factor. I know that, because I have so many friends who have told me that they are a very large factor when they consider whether they will return to New Zealand. Most of them are away for only 2 or 3 years, and the idea of a repayment holiday—even if they are still paying interest on loans—to them is a great relief. It is one less thing they have to worry about whilst they are overseas and trying to plan their repayments.

Then, on the other side, we also had criticism from some submitters who said it was not fair to give a repayment holiday only to people who go overseas, and that we should be giving it to all people in New Zealand with student loans. But I think it is important to remember that those who remain in New Zealand are getting interest-free student loans, so it is not as if they are not getting anything. The repayment holiday is, I think, for a specific group of students for whom we want to address a specific issue they have, which is largely time-limited—that is, limited to the time they spend on their OE. So I think that this bill has a very, very good balance.

I am very pleased to hear that the National Party will be supporting the bill. I would also like to hear National members say that they will keep Labour’s policy of interest-free student loans, should they ever become the Government ever again—at any time in the next 50 years. I think that is a question National members will have to answer, because the student loan scheme has created an awful lot of problems, and some of them we are only just starting to realise now in terms of the impact the scheme is having on 20-somethings and 30-somethings, and the decisions they are making.

We have an assumption in this country that people who go into retirement own their homes freehold. In that way, we can set levels of superannuation and we know that people will not be driven into poverty. Well, this situation may very well change with a generation of people who have had student loans and who, because of that, and because they have felt they have wanted to get rid of their loans before getting into a mortgage, may well have chosen to rent instead of buy their own homes, or may have put off buying for so long that by the time they retire they have not got into the position where they have been able to have freehold homes. That has a huge implication for this country when it comes to superannuation policy. So the student loan scheme has infiltrated so many other parts of our society.

I stand here proudly and support any initiative that allows students and their families—and their future families—to alleviate the burden of the student loan scheme. I look at a lot of members in the National Party across the House whom I do not think came through the student loan scheme, and whom I do not think really appreciate the kind of psychological impact it has on people. I am very thankful that I was able to come into this job where I was able to pay off my student loan, because I cannot tell people the sense of relief when someone knows that he or she no longer has a student loan. There was a time in my life when I thought that I would never get rid of my loan, when I thought that National Party policies might reign forever, and—God forbid—when I thought that the scheme might have even become worse in terms of interest rates. So I congratulate the Minister, the Hon Peter Dunne, on this bill. I congratulate all the parties that are supporting it. This bill will make a real difference to New Zealand and to New Zealanders.

ALLAN PEACHEY (National—Tamaki) : I appreciate the opportunity to speak on behalf of the National Party and to express our support of the second reading of the Student Loan Scheme Amendment Bill (No 2). It was a pleasure to be part of the Education and Science Committee, which held the hearings—although I was not at all the hearings—and I would like to compliment the chairman of that committee, Mr Donnelly, on the way he led us through some very, very complex submissions and information. I congratulate the submitters. Some very, very well-thought-out and well-reasoned comments were made to the committee.

Before I address the bill specifically, I will just express my sadness that the last speaker for the Government chose to spend so much of her time looking backwards.

Darren Hughes: That suits the National Party.

ALLAN PEACHEY: There we go—the callow kid from Kapiti is at it again.

Darren Hughes: Oh, he’s practised that.

ALLAN PEACHEY: Yes, I did; I could not wait. I suggest to that young man that he be quiet and listen.

Darren Hughes: He’s so useless, he can’t even come up with an original line. Give us the next one you’ve practised.

ALLAN PEACHEY: Oh dear, it is little wonder that this Government is on the way out. The point I want to make is this. I would suggest that the last Labour speaker should take a little time—she is young—to talk to the Prime Minister and the Deputy Prime Minister about the role they played in the 1987-90 Labour Government, which brought this country to the point of economic collapse. They may just remind that young member of the courage and integrity of the previous National Government, which pulled this economy around and set it on the path to prosperity.

The amendment bill to the Student Loan Scheme Act 1992 will do a number of things. Some of them are in the interests of students—borrowers with loans—others will be in the interests of the taxpayer, and others will make it easier for those charged with the administration of the scheme to do their work well. The whole body of regulations and legislation around student loans has been very, very complex, and it is good to see it being simplified. It will be easier for those students—those young people with loans—to actually figure out what is going on and to make better decisions for their future.

Darren Hughes: Is the member supportive of free student loans?

Paula Bennett: Don’t answer that.

ALLAN PEACHEY: It is tempting, but I will not. No, he is not worth it. From the perspective that I have, one of the great merits of this bill is that it sends at least one message to young New Zealanders: that we want them home. The reality is that our best and our brightest are leaving this country in droves. There are so many signals being sent to them by the present Government to say that this is not a country in which they can fulfil their potential. This is not a country where they see that their initiative will be rewarded, and, frankly, it is not a country in which they see that they have a future. That Government over there is responsible for that perception amongst so many of our young people. So it is good to see this House sending at least one message to our young people that, yes, we want and need them back.

I was particularly taken by a submission made by the medical students association. It was a good submission. It made the point that it is not unusual for medical graduates to want to go overseas in order to advance their learning, widen their horizons, study a little more, and work. In that regard, they are no different from our young engineers, our young lawyers, our young teachers, and our young nurses. They want to go overseas. But we want and need them back.

I recall, during my days as a school principal, employing, over the years, literally hundreds of young New Zealand graduates and encouraging them to go overseas to work in teaching, to travel, to try other things, to broaden their horizons, and, in some cases, to grow up. But I always said to them that I wanted them back and that I needed them back.

New Zealand desperately needs our top young people back here so that we can have the advantages and the benefits of the top-quality education that many of them had while they were in New Zealand, particularly in the professional fields. They come back smarter people, they have more to contribute to the country, they provide us with a high-quality workforce, and, because they have seen the world, they see New Zealand in context, and they can help us to figure out where we fit in and the direction in which we have to go. Of course, that direction includes, in less than 20 months’ time—fortunately—a National Government.

I will address for a moment the idea of repayment holidays. I think that we probably all appreciate that it is better for our young graduates to be paying back the money they have borrowed as quickly and as soon as they can. Although I recognise the merit in allowing our young people to travel overseas and in giving them the opportunity to have this up to 3-year break, I hope that they do not misunderstand the intent and the purpose of this House in giving them that opportunity, because they know, and we know, that at some point in time that money has to be paid back.

I will just repeat: we want them back in New Zealand, we want to make it attractive and easy for them to come back, but we want them travelling overseas for the right reasons and coming back for the right reasons. Travelling overseas in order to avoid a financial commitment like repaying one’s loan is not the sort of thing we want to be encouraging our young people to do.

The bill, in addition to being in the interests of students and of the taxpayer, also assists those charged with the responsibility of administering the scheme. The select committee gave a lot of thought to the matching of data that is provided for in the bill between the Inland Revenue Department and the Customs Service. I believe it is right and proper that that matching should occur. In fairness to those students—those graduates—who meet their obligations, it is right that that should occur. I have every confidence that both the Inland Revenue Department and the Customs Service will respect the intention behind the legislation and use the information available only for the purpose for which it is available. I have every confidence that the information gained will be protected by the Inland Revenue Department and will be used only by those who require it. On behalf of the National Party I am pleased to support the second reading of the bill.

Hon BRIAN DONNELLY (NZ First) : The discussion that has taken place forces me to cast my mind back to 1997 when I was a new MP. A reasonably desperate father came to my office in Whangarei. His daughter, who had been a student at Whangarei Intermediate when I was principal there and who was now 16, had been enrolled in a course at Northland Polytechnic for 6 weeks. Her boyfriend took off to England, and she decided to cash up her student loan and follow him overseas. There was nothing the father could have done to prevent this from taking place.

There seemed to be some major flaws in the system. New Zealand First discussed it with its coalition partner. That flaw was just one issue. The problem was that, under the contracts legislation, even though students could take out a contract for a student loan, there was no obligation for them to actually pay anything back. That was the situation in place in 1997 when people enrolled in a 1-year course, took out lump sums on their loans, bought themselves motor cars, stereos, and trips overseas, and were lumped with relatively high interest rates that were compounding, etc. It was a dog’s breakfast.

That was the loan scheme in place in 1996 when New Zealand First came into coalition Government with National. New Zealand First worked with National, and I give great credit to the then Minister of Education, Wyatt Creech, who recognised that there were some serious problems and worked with both me and the then Treasurer, the Rt Hon Winston Peters, to make some changes. One of those changes was that a student could not take out a loan until he or she was the age of 18, unless there was parental permission. That was in line with the contracts legislation. Students could not take out lump-sum loans; they could take them out only in instalments. That stopped the incentive for people to take out loans and buy a motor car or go off overseas.

Finally, people do not realise that partial interest write-offs came through in the 1998 Budget. One of the things that surprised people about the interest-free policy that Labour put up was that it did not cost anywhere near as much as it seemed it would. The reason was three people—I was one of them—from New Zealand First and National had worked on partial interest write-offs. In other words, the student loan scheme was a dog’s breakfast in 1996, but there have been continual amendments to it.

Now, students who have gone overseas have some real negatives in their understanding of the situation, particularly in relation to the interest-free policy that Labour introduced after the last election. New Zealand First has long believed and long stated that the very best immigrant is a New Zealander returning home, and we stand by that particular policy. Unfortunately, the situation that exists has created a lot of disincentives for some of our brightest and best to come home and bring up their children to become fully fledged New Zealanders in the same geographical area where their grandparents live, who could add to the upbringing of those children. Students have gone overseas believing, in many cases, that they do not actually have to make any repayments. Unfortunately, not only is there interest accruing but also there are penalties. After 3 years, when these students decide to come back, they look at their student loan and, oops-a-daisy, it is massive. They are saying: “How can I go back to New Zealand on the sort of salary I will get there and be able to repay that loan?”.

This really has been exacerbated by Labour’s interest-free policy, in the sense that people believed that it applied to them if they went overseas. It was not made clear that it applied only to people who remained in New Zealand. Those who went overseas had a requirement to pay back one-fifteenth of their loan, and if they did not pay it back, then—guess what—they got lumbered with all the penalties.

The Student Loan Scheme Amendment Bill (No 2), which New Zealand First believes is very sensible legislation, cuts through many of those particular issues. It cuts through them by providing that holiday. Let us make it very clear: if people go offshore and work in England for 3 years, they still have to pay interest on their loan; the interest will still accrue. But there is a recognition that, in many cases, students who go overseas might be fruit picking. They will not have enough money to pay back one-fifteenth of the loan. The legislation states that these students do not have to make any repayments during that holiday period. The interest will accrue—certainly, when they come back they will owe the Inland Revenue Department more than when they left—but, in fact, the penalties, the punitive part of the thing, will not be added on to it. There will therefore be incentives for them to return. We believe that is a very sensible approach to the dilemma that the country is facing.

I thank the Education and Science Committee, because it approached this legislation in a very sensible way, looking at how we could make things better for New Zealand rather than playing party politics with the issue. It was a very good select committee to work on.

I had some trepidation, because this is an Inland Revenue Department bill. I think—in my time, anyhow—that this was the first time the Inland Revenue Department had presented a bill to the Education and Science Committee. I have spent a period of time in the Finance and Expenditure Committee. I remember we had a tax bill that was 200 pages long and full of complicated equations, etc. I tell members here and now that I could not understand anything past the title. It was with some trepidation that the Education and Science Committee had the Inland Revenue Department coming to us.

I must mention that in the particular case of the bill with the hundreds and hundreds of equations, Michael Cullen had missed the fact that one equation had a minus sign rather than a plus; he was totally mortified that he had missed that it was a minus rather than a plus. As I said, I could not understand the equations, anyhow.

In reality, I believe that the officials helped the Education and Science Committee very, very well in understanding the issues behind this bill. The committee members themselves approached it from the point of view of how we could make this legislation as good as we possibly could.

Part of the legislation is data matching between the Customs Service and the Inland Revenue Department. That is really critical because, as was mentioned, it is estimated that something like 41,000 borrowers have gone overseas and no one knows that they have gone. The Inland Revenue Department is still treating them as residents in New Zealand and giving them interest-free loans. It is considered that $143 million has been taken from the revenue base because of that. That is a lot of funding that could be used for educational purposes elsewhere. So data matching is really important, and I think most people in the select committee agreed to it with the protections that were explained to us. Let us face it, the select committee members asked what protections were in there to ensure that things are not misused.

The first of the two areas that the select committee made changes to as a result of its discussions was a change in the definition of charitable activity to bring it in line with other definitions, etc. Essentially, if I go overseas as part of a religious organisation purely and simply to proselytise and get more people into that religion, that is not considered to be a charitable activity and therefore I cannot claim that status and get an interest-free loan. However, when I worked in Rarotonga there was a Seventh-Day Adventist school along the road from us. People would come up, and in 6 weeks a whole hall would be built. Those people were not there to proselytise; they were there to develop educational purposes. In those circumstances, somebody who was there for 6 months or a year would be considered to be there for a charitable purpose. The other area we made changes to was the way that the Inland Revenue Department would apply care and management provisions.

I have mentioned the select committee, and I think its members acted extremely well. I thank the officials; I was extremely impressed with the clarity of the information they gave to us. Something that impressed me most of all was that when one set of submitters got it wrong and misunderstood the legislation—it could have been to their detriment—the officials specifically went out of their way to meet up with those people to explain what the legislation meant. I take my hat off to the officials for doing that.

Finally, I congratulate Peter Dunne, because this is very good legislation that will improve the operation of our student loan scheme.

METIRIA TUREI (Green) : The Greens are supporting the Student Loan Scheme Amendment Bill (No 2). We have supported it from the beginning, and we will continue to do so through its remaining stages. I am pleased to hear that National is supporting the bill as well, though I just mention to Mr Peachey that we can really do without those kinds of anachronistic and patronising attitudes. I think that that really was beneath him.

It is certainly true that although the Green Party supports the bill, we have, from the start, been very dissatisfied with the whole student loan scheme. I thank my colleague Nandor Tanczos, who in our view set out a very clear critique of the scheme as a whole in his first reading speech on the legislation. Some interesting issues have been raised about that. Mr Brian Donnelly talked about the original loan scheme, and how easy it was for people to get into huge amounts of debt, get lots and lots of money, and not really understand the process they were going through. It is still a concern for me as I travel around universities, and particularly around polytechs and other kinds of institutions, that people who are still quite young are getting loans to study.

Those people are doing very well and wanting to achieve in their studies, but they still do not truly understand the future implications of getting student loans. They do not have access to the information that would mean they really knew what they were getting into. Sometimes when we talk to them about what the implications might be and how long it might take them to pay off their student loans, it can be a real shock for them. That is still a very serious concern, particularly for those under 18 who have left school, for what are probably very good reasons, and are trying to make sure they stay educated and get a skill—without realising the implications of the effect of the student loan scheme.

I heard the argument about fairness in respect of the bill when it was first introduced. From the Green Party’s perspective the scheme has never been fair and never will be fair; it is deeply and fundamentally unfair. What we have in this country is the first generation of students who have to pay a considerable amount for their own education. When they finish their tertiary education they have to pay for their parents’ superannuation, which they have to do through their taxes; they have to save up and pay for their children’s education, and some of us who have student loans have children who are now teenagers, and for those people that is now a serious concern; and, additionally, they have to save for their own superannuation so they can be assured of some kind of reasonable income at the end. This is the first generation of New Zealanders that has to pay for all of those costs, all at once, out of one lifetime’s worth of work.

Additional to that are the issues that Moana Mackey raised around the difficulty with housing and the fact that people may not have freehold homes by the time they retire, because of the impact of the student loan scheme. It is a massive social experiment. It will have huge detrimental effects well into the future, and those effects will be intergenerational. This cannot be underestimated when one looks at the impacts of the loan.

Unfortunately, we make the changes only as they arise. As we see the problems happening, we will be continually making changes to this loan scheme for decades to come, unless we find a more suitable way of enabling New Zealanders—in particular, young New Zealanders—to gain an education that does not require them to go into such massive levels of debt for such little social and fiscal support that we find through the student allowances scheme.

We agreed with the provisions of the bill at the time it was introduced. The Education and Science Committee has done a very good job of working through the legislation, and I confess that I somewhat miss being involved with that select committee, having been a member of it during my first term of Parliament. I am very pleased with the changes that the select committee has made. I noticed that it raised some good issues in terms of data matching. It has always been a concern for the Greens that if there were an excess of data matching, that could be abused. I note that the select committee report refers to the committee believing, as a principle, that the information collected on individual student-loan borrowers should be permanently deleted when the purpose for which the information is obtained is no longer required. We think that that is a very sound proposition from the select committee, and we are pleased to see it there.

We are also pleased with the new provisions that the select committee has put in concerning charitable organisations. It is really important that New Zealanders have the chance to participate in the social well-being of other nations and other communities. That is in part what a lot of people do when they go overseas and get involved in charitable organisations, and we are pleased to see that provision in the bill. We are also very pleased to see the application of care and management issues, which Brian Donnelly has also raised, because people should not be unfairly affected by errors made by the agencies. It is quite responsible and reasonable that these provisions should be in the bill. Also, the repayment obligations around raising the threshold level from $250 to $330 makes perfect sense, and we are very pleased to see such sensible provisions in the bill. Presumably, the Committee stage and the third reading will pass quite swiftly, as there is such good support for the bill from the various parties in the House. We would be very pleased to see that happen.

We do not look forward, though, to the continual changes that we believe will have to happen to this student loan scheme as these issues arise year after year. At some point we will have to bite the bullet and realise that the student loan scheme, in the long term, is a failure. It is not doing well, particularly for Māori students and for other students, so we will have to address that specifically, bite the bullet, and make the hard decision that a new system is required. I would prefer that we did that sooner rather than later and not allow further generations of New Zealanders—my own children and the children of other members—to have to suffer and go through this process again for no good reason. Kia ora.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Kia ora, Mr Deputy Speaker. Kia ora tātou katoa i te Whare. When we were on the road during the election campaign back in 2005, this old Pākehā guy sat me down to talk about education and the cost of education, etc. What he said stuck in my mind, and I will share his thoughts with the House. He said: “If education is essentially the passing on of knowledge from one generation to another, then who are we to charge our children for something that we got for free?”. That is the thinking that guides me in this and every debate on education, because the Māori Party believes that if we are going to be silly enough to charge our kids to get a tertiary education, then we should not be surprised when they all fly overseas as soon as the ink dries on their degrees.

As for the debt, what does the student debt add up to? Well, I invite folks to take a seat, pat themselves on the back, and shake their heads at the foolishness of it all, because it seems we have mortgaged the future of our nation to the tune of $9 billion. That is the level of student loan debt in this country. For once Māori are right up there, with their own student debt level at $1.5 billion. That is a heck of a lot of money in anyone’s calculations—in any Māori’s calculations, anyway. Certainly, it is right up there for Māori. That sum is more than the Government set aside to settle 150 years of land stolen, confiscated, and just plain ripped off from Māori over the last couple of centuries.

But still, for all that, I cannot help thinking that the debate is just a little bit skewed. It should be more than just a discussion about money owed. The debate should also be about the return generated by our young people’s academic endeavour. It should be about the commitment, the time, the energy and the sacrifice, and about the benefits that accrue from our young people being more educated, more creative, and more productive. But it ain’t. Instead, the debate is about paying back loans, interest rates, penalty clauses, repayment obligations, holiday repayments, and how to keep paying money back even when people are overseas. Yeah, right!

So we checked it out with some of the whānau to see what that debt really was. My own daughter is in her third year at law school, racking up $10,000 a year in student debt. My advice to her is to get her degree, then jump on a plane, fly away overseas, and forget about her debt for a few years. She should go and enjoy the world, have a life, and, fingers crossed, she will come back when she is good and ready and worry about debt repayment then. Certainly, she should not worry about paying it back while she is overseas; she should ignore it completely. For heaven’s sake, it is tough enough just getting by these days without having to spend all one’s life at school, flog oneself to death getting a degree, then have to start paying off a debt the size of a home mortgage before even being able to afford a house.

Another young woman qualified with a prestigious environmental land management degree, but in the process racked up a loan of more than $35,000. She applied, right out of university, for 59 jobs without success and ended up as a waitress in a pub. So for a laugh she applied for a job to teach English in Japan. Hello! Job application number 60 was successful, so off she went. That was OK for a while. Then she wanted to come back home, but the salary was a pittance compared with Japan, and to get a decent wage would mean having to go back to teacher’s college and rack up another student loan and even more debt. So what would this legislation have done for her? Well, it would have meant that she had a number of options. First, she could keep working in Japan and still pay off her debt. Yeah, right! Secondly, she could study in Japan and not pay interest on her loan. Or, thirdly, she could even enrol with a tertiary institution here, do her studies in Japan, and get another student loan to go with the one that she started with.

But here is the thing: debt repayment policies will not stop the brain drain. Increasing student fees and costs and the lack of access to decent student allowances mean that student debt continues to rise, and student flight along with it. At another level, Waitangi Tribunal claim Wai 910, lodged by Te ManaĀkonga, states that the student loan scheme breaches the Treaty of Waitangi in that it unfairly discriminates against Māori. It notes that, first, Māori have to borrow more from the student loan scheme than non-Māori; secondly, Māori have more student loan debt over $20,000 than non-Māori; and thirdly, Māori have greater difficulty repaying student loan debt than non-Māori.

So here we have the old catch 22. Because of the failure of secondary schools, a lot of Māori students are more likely to study at certificate and diploma levels, which means they move into lower-paying jobs and, consequently, take longer than their non-Māori counterparts to repay their loan debt. The only time that things seem to even out is when one compares Māori and non-Māori degree-level graduates. The irony of that, of course, is those degree courses are the most expensive.

The Māori Party supports any move to reduce student debt. We support the notion of a repayment holiday, although we would make it 5 years, rather than the recommended 3 years. But I go back to our fundamental concern that we are driving our graduates into crippling debt before they even start work. Education is supposed to be a nation’s investment in its own future, and we need to be visionary and bold in how we approach student cost and student learning. The Māori Party sees MātaurangaMāori as a treasure, and its protection is guaranteed under the Treaty of Waitangi. We also see a decent education as being a treasure that we should guarantee to all our youth. Accordingly, we support a greater investment in tertiary education in order to help reduce student costs and student debt.

We also support the submission from the National Council of Women, which stated that although some people claim education is primarily a private good and therefore students should pay for it, the council believes that keeping and attracting students is actually in the public interest, that it makes good sense to reduce student debt in exchange for student commitment to society at large, and that if tertiary study was seen as a public good, then we would not see the numbers of graduates we have seen being driven overseas.

As recently as 1989 student fees were $129. In 1990 the Labour Government introduced a flat fee. That flat fee was ten times the amount of the previous fee—$1,250. Then National got into Government and changed the Act so that institutions could set their own fees. Since then, fees have increased and increased. It is a shameful legacy that both Labour and National have created—of which the Prime Minister herself said back in 1999: “Tertiary fee rises are crippling our future.”

Last year’s annual report of the student loan scheme talked about ensuring that the student support system promoted equity and fairness, was consistent with the wider income-support systems, and made tertiary education affordable for all. If that means my daughter with her $40,000 debt, the young woman with her $35,000 debt who received 59 job rejections before taking a job in Japan, and the thousands of other Kiwis who have had to borrow under the scheme and then skip overseas so they do not have to pay it back will not have to be burdened with massive debt at a time in their lives when they should be preparing for their own future and our nation’s future, then it is all good. If not, then excuse the Māori Party for continuing to fight for a future that includes our own kids running our own country instead of leaving it, and us having to bring in immigrants to cover the gaps we have so foolishly created. Kia Ora, Mr Deputy Speaker.

DARREN HUGHES (Labour—Otaki) : It is a great pleasure to speak on the second reading of an excellent piece of legislation, the Student Loan Scheme Amendment Bill (No 2). What this legislation does is further extend the great work that this Government has done, since its election in 1999, to make the student loan scheme legislation a fairer, more equitable, and a more decent piece of legislation. We have heard from different speakers tonight exactly how this bill achieves that.

As Hone Harawira was saying, there has been a long history in the whole area of how we support students in New Zealand. In actual fact, at one point in 1998 the then Treasurer was promoting a universal tertiary tuition allowance that would be paid to all students from the year 2000, but as soon as New Zealand First left the coalition Government the National Party turned its back on that.

The bill, of course, amends the famous original 1990s student loan scheme introduced by Dr the Hon Lockwood Smith PhD—a man who has a long record when it comes to tertiary education in New Zealand; he went up and down New Zealand in 1990 saying that the “toll gate”, which was what he called the Labour flat fee of $1,250 to study at university in New Zealand, would be removed or he would resign as Minister.

Moana Mackey: That’s right, and he signed it.

DARREN HUGHES: He signed that pledge card up and down New Zealand.

Then National became the Government and rather than Dr Lockwood Smith getting rid of the fee, he said to the university and polytech councils: “Oh, you decide whether you want to charge a fee or not. Of course, I won’t give you any money to get rid of the fee, so you will probably have to keep on charging one.” Then when people demanded his resignation up and down New Zealand, he said: “Oh, well, it’s not me, it is the university councils that are charging the fee. I have abolished the fee. I have told them they don’t need to charge it.” Of course, they had no money to pay for it, they would have had to sack all their staff, they couldn’t provide any classes for any students, but there was no fee—Dr Lockwood Smith had spoken.

Dr Smith gets very upset in the Chamber whenever we challenge him on his policy at the time. There were times when the Minister of Education, as he then was, would visit university campuses around New Zealand and have to beat a hasty retreat to the bathroom and climb out the lavatory window—

Moana Mackey: Laboratory!

DARREN HUGHES: That is what the problem was—it was a laboratory window! He had to climb out of the science lab window in order to get away from braying student protesters who knew that the National Party had not been consistent with its 1990 policy. So that is how we ended up with the student loan scheme.

Of course, the Labour Party—in Opposition in those days—did not support the scheme because we could see the big problems that would result from the fact that so much expectation had been built up by National’s promises in 1990 that were not delivered. Labour came to the Government benches in 1999 and said that as a first step we should remove interest on student loans while students are still studying.

The only slight hint of bitterness I have about that policy is that the day I was graduating from Victoria University was the day the new Cabinet was being sworn in, so I did not benefit from that policy by one single dollar. When I was a student at university we paid interest every single time we borrowed money. So what would happen is that at the end of every year we owed more money than we had borrowed because we were paying interest the whole time, and that never seemed fair. We could accept that we had to pay for some of our education because we knew that the Government could not pay for the whole lot, so at one level we could understand that. But I always felt it was really unfair that a time when the Government was lending us money because it accepted we could not earn money to pay for our own rent, food, books, and whatever, it was charging us interest for the use of that money, whereas if we did not have anything to do at all, the Government would be giving us money by way of the benefit system. I am really pleased that we put in some positive incentives for students back when that scheme came in.

Of course, the National Party opposed that scheme and voted against it in the House. It said that students should pay interest while they were studying. So first of all we had the broken promise around the fee. Then National said that students should pay interest while they are studying and it opposed Labour’s legislation. Then we had the doozy of them all. Labour said at the last election that if it were returned to Government and given the faith and the privilege of 3 more years in Government it would like to lead a coalition of parties in the House that votes to abolish interest if those students stayed in New Zealand. It was a way of saying to people that once they had finished their studies and they were working in their career, if they decided to stay in New Zealand the Government would not charge them any interest on their student loan— it would be a straight repayment of the money that they had borrowed.

The Government had this fantastic idea that people would repay what they borrowed. It seems pretty fair to me. The National Party went up and down New Zealand campaigning against that policy, as well. National members said: “No, no, students should pay not just what they have borrowed, they should pay money on top of that as well.” But students are trying to improve not only themselves—obviously there is a private benefit—but also our country and our community. National did not want to put any value on that at all. They said: “No, no, education is entirely a private, personal gain, there is no benefit to society in it, so therefore you should pay interest while you are studying.” I think that response is pretty bad, but the worst part about it was that the National Party went and told people a whole lot of things that were not consistent with the truth in relation to the cost of that policy.

They said that it was a bribe by the Labour Party. This was from the same people who were running around the country promising tax cuts at a cost of $7,000 million. They were tax cuts that would see all of us sitting in this Chamber getting $92 a week in tax cuts tomorrow, when our pay goes through, while the people that we represent—or certainly the people we represent on this side of the Chamber—get absolutely nothing from it, whereas, in actual fact, from 1 April every child gets $10 per week under Working for Families. That was going to be cancelled under National to pay for the tax cuts.

National said that we could not afford the student loan policy; that we could not afford not to have interest on student loans; but that we could afford its $7 billion tax cut package—the biggest bribe in history. Of course, after the election we passed the other amendment bill that sits alongside this legislation and the cost of the scheme has been dramatically less than what National said. Did National members apologise for that? Oh, no, they still give the same speeches saying what an expensive policy it is, despite the fact that it has come in way under what John Key and his co-leader Mr English said all through the election campaign, when they held the finance and education roles, and before they came together in their current interesting combination. They said they were going to absolutely oppose what Labour had done.

Moana Mackey: But would they reverse it?

DARREN HUGHES: Moana Mackey asks a good question. Would they reverse that policy? Opposition members are very quiet. Mr Peachey, the former principal, had a lot to say before. He had even rehearsed a line in case I interjected on him, which I felt really pleased about. He had sat up in his office working out an alliteration of three words together that had the word “Kapiti” in it.

Moana Mackey: Ōtaki was too hard.

DARREN HUGHES: Ōtaki was far too hard. He thought “O” might be for “Owesome” in that regard, I guess. He was fine with his first line, but when we asked him for a second line we realised that he will have to work on it. I am sure that next time he is in the House we will get two lines and we will be able to ask for three. There was a time when Tamaki was much quicker on its feet in that regard, but I guess time moves on in politics.

I want to know from the National members whether they will get rid of interest-free student loans. There is silence from members opposite. They will not even look up. They made so much noise during the 2005 election campaign when they were busting their guts to get into this place. They wanted to talk about the student loan policy and how unaffordable it was, but tonight they sit quiet.

It reminds me of the speeches National members used to give about one standard of citizenship and how Māori were privileged in New Zealand. But we never hear those speeches any more, either. Half of the members on National’s list got their seats in this Chamber generated on the back of party votes that were anti-Māori, but they have forgotten all that now. So now we know that National’s Māori policy is parked up.

I suspect that their silence means they might be in support of Labour’s interest-free student loan policy, but because John Key has not gone on television to announce it yet, they cannot say. The sad thing for National backbenchers is that they are too scared to say in Parliament what a National Government might do because they are not sure what John Key has announced yet. The unusual policy that other parties have of deciding their policy together in the caucus room first—that really weird way of running politics—is not how it is done in the National Party. If people want to know what National’s policy is they should get out of bed early on a Saturday morning, turn on Agenda, and they will see what John Key has to say.

I am looking forward to hearing what John Key says about interest-free student loans. [Interruption] What did Mr Borrows say?

Chester Borrows: It was a real good show last week. Did you see it?

DARREN HUGHES: I saw him on the television and I have to say that it was very off-putting early on a Saturday morning. But Mr Borrows has spoken up. That is as close as we will get to the National Party policy on interest on student loans—somebody with the surname Borrows. It is appropriate that he is the only National MP who wants to interject when we are putting a few questions across the House.

Ron Mark: It’s a hollow interjection.

DARREN HUGHES: It is another hollow interjection. They love their hollow words over there. Not much has changed from the night-time reading of The Hollow Men. I am looking forward to the sequel coming out——which will tell us about all the things we are hearing now, the flip-flop jandals on the roof and all the public relations disasters.

The great thing about the National Party is that we have only to wait. We do not have to wait very long; all its things turn to disaster. But this bill will make a lot of difference for the students who go overseas for 3 years. They will get the holiday from the interest, which means they can get around the world before they have to start repaying their loans. That will make a big difference I think, and it goes to the heart of the tension: it is great to keep our young people at home with their new skills but, on the other hand, when we live at the bottom of the world—

Ron Mark: Maybe the Brethren could fund the student loans.

DARREN HUGHES: I am sure. The Exclusive Brethren do not believe in tertiary education. Their kids are not allowed to go to university, which is maybe why the National Party is so silent on it. They did not want any policies that might actually benefit the kids who are normal Christians, or indeed who are secular agnostic. No, no—they had to be only for the Exclusive Brethren kids. So that is the National Party for us.

The Government wants to see young people staying in New Zealand with their new skills, but when people live at the bottom of the world it is also important that they make connections. They see that the world is a big place, and they go and do their OE. I think that Labour has always supported that, to build up the diaspora of people around the world who understand what we are trying to do here in New Zealand. The legislation will give students a 3-year window to do that, and if they stay beyond the 3 years there is a mechanism for repayment, to make sure that they do not get behind in all the penalties and that sort of thing.

So the bill is very important in the next wave of reform of student loans. I think we are making a very important change. I have supported all of them, because I think that consistency is a reasonably important thing in politics; the National Party has opposed most of them, and tonight is in favour of this one. I am not quite sure why that is. In conclusion, I say that I strongly support the bill. It is another great example of the work we are doing to help young people in New Zealand.

COLIN KING (National—Kaikoura) : I will take a very brief call in support of the Student Loan Scheme Amendment Bill (No 2). Although I am keen to stand up and speak on behalf of National, it would be very remiss of me if I did not say for one moment that I would like to see those people who take out student loans be just a bit more thoughtful about the courses they take and where they actually spend the money. It is taking them 9 years, on average, to pay back their student loans, which is an improvement from 10 years previously.

By the year 2014-15, the scheme will cost $12.7 billion, and by the year 2034 we expect that repayments will start to exceed borrowings. So for the next 15 years we will see, in fact, an annual growth in the student loan scheme of about 4.7 percent—about $66 million each year. We will see the forecast loan balance increase, on average, by about 5 percent a year.

I agree with the bill; a lot of the things in it make the scheme a lot clearer. I certainly support the object of making it clearer to those people who are overseas that if they owe $15,000, they will simply be required to make a repayment of $1,000, but that if the loan is over $15,000, they will need to pay $2,000, and that if over $30,000, they will have to pay $3,000.

It has been a pleasure to work with the Education and Science Committee on this bill. However, I think, in support of everybody who spoke, we have to make sure that those people who go into student component funding are a lot more focused and a lot more directed by career advice, so that when they do accumulate debts and loans they are aware that they will get value for money. At the end of the day, education needs to be about getting value for money, and in many, many cases, in my experience, we have seen far less value than the debt that is held out there.

I have great pleasure in supporting this bill, and on that point I will take my seat.

• Bill read a second time.

KATE WILKINSON (National) : I have to say I thought we would be talking about Part 1 of the Criminal Procedure Bill tomorrow or even, perhaps, next year, seeing that the last reading of this bill was in May 2006.

Simon Power: Why has there been such a delay?

KATE WILKINSON: I am not actually quite sure why there has been a delay. Perhaps it has been languishing with the Conservation (Protection of Trout as a Non-commercial Species) Amendment Bill.

Having said that and in talking in relation to Part 1, I say the biggest problem that we have in relation to this bill relates to the rule relating to double jeopardy. Double jeopardy is a rule that has been deeply engrained and deeply enshrined in our judicial system. It simply provides that a person should not be tried for the same crime more than once. That is on the basis that the State has all its resources and power, and it should not be allowed to make repeated attempts to convict an individual for an alleged offence, thereby subjecting him or her to embarrassment, expense, and ordeal and compelling that person to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent, that person may be found guilty. The rule against double jeopardy is also found in the New Zealand Bill of Rights Act. Again, that provides that no one who has been finally acquitted, convicted, or pardoned for an offence shall be tried or punished for it again.

Part 1 proposes two exceptions to the rule against double jeopardy. One is known as the tainted evidence or tainted acquittal—whichever one likes to call it—rule. It applies, for example, to evidence that has been obtained through perjury. The second exception relates to new and compelling evidence. I have a Supplementary Order Paper that seeks to amend clause 7 by removing the exception known as the tainted acquittal rule, and narrowing the rule of new and compelling evidence to that obtained only through DNA technology.

The first exception—the tainted acquittal rule—is an exception resulting from one case, a case involving a Mr Moore who was charged and acquitted of murder. He persuaded a witness to give false evidence, leading to his acquittal. He was acquitted, but was later charged and sentenced for perverting the course of justice. It is said that a law change made on the basis of one case makes for bad law. Why do we not simply increase the penalty for perverting the course of justice rather than destroy such a well-established and enshrined principle of our justice system?

Simon Power: The Minister could at least put the newspaper down and listen!

KATE WILKINSON: But the Minister does not understand—I say to Mr Power—things like “tainted acquittal”, “jurisprudence”, “compelling new evidence”, and “perverting the course of justice”. Those phrases are totally unknown to the Minister for Courts. If the punishment is the equivalent of the avoided criminal conviction, then the result is the same without attempting to change a well-established principle of law.

We have had several submissions. When we have the New Zealand Law Society opposing the allowing of a retrial if there is—

Darren Hughes: 60 seconds.

KATE WILKINSON: Thank you—new and compelling evidence, and when the Attorney-General and the Law Commission also oppose it, then one would have thought that this Government might actually give some recognition to those views and perhaps amend the bill to make it at least somewhat workable. It is vital that we preserve the principle of double jeopardy. It is vital, I believe, that the two exceptions to it that are in this bill are severely amended and that my Supplementary Order Paper is passed with due recognition.

This bill is somewhat vexed, apart from the other two areas that I have mentioned, which I will bring up later. The title reflects the focus of the bill, which is about areas of criminal procedure. Those key areas—

• Progress reported.

• Report adopted.