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19 March 2008
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Volume 646, Week 70 - Wednesday, 19 March 2008

[Volume:646;Page:15035]

Wednesday, 19 March 2008

Madam Speaker took the Chair at 2 p.m.

Prayers.

Questions to Ministers

Economic Initiatives—Reactions

1. CHARLES CHAUVEL (Labour) to the Minister of Finance: What new economic initiatives come into force on 1 April this year, and what has been the reaction to them?

Hon Dr MICHAEL CULLEN (Minister of Finance) : On 1 April we have a number of significant initiatives coming into force. The company tax rate is being cut for the first time since the fourth Labour Government. Combined with the research and development tax credits that come into force on 1 April, this will allow businesses to invest more in their workers and in their long-term success. Business New Zealand has called the company tax cut very welcome, and according to Ernst and Young New Zealand’s research and development tax credit regime is far more favourable than Australia’s. The only significant opposition to these moves has come from John Key and the National Party, which voted against them.

Charles Chauvel: What further economic initiatives come into force on 1 April this year, and what has been the reaction to them?

Hon Dr MICHAEL CULLEN: On 1 April we are increasing the minimum wage for the eighth time in 8 years. Under Labour, the minimum wage has increased by $5 an hour. Those increases have been opposed by the National Party, and the only time the minimum wage increased in the 1990s was when New Zealand First forced the then National Government to do so. During its 9 years in Government, National increased the minimum wage by 87c an hour.

Hon Bill English: Can the Minister confirm that 1 April is the date on which his “chewing gum tax cuts” were originally going to come into place, but that he canned them last year in order to pay for his overspending?

Hon Dr MICHAEL CULLEN: I can confirm that one policy was changed; that policy was also opposed by the National Party at the time it was announced.

Charles Chauvel: What further new economic initiatives come into force on 1 April this year, and what has been the reaction to them?

Hon Dr MICHAEL CULLEN: On 1 April employer contributions to KiwiSaver commence, and also the tax credits for employers that go with them. This is great news to the almost 500,000 Kiwis already in KiwiSaver. Despite that, the National Party still has not told us its position, and as recently as yesterday Bill English refused to rule out scrapping the employer contribution.

Charles Chauvel: Is the Minister planning any major changes to Government initiatives such as superannuation in light of the global economic conditions?

Hon Dr MICHAEL CULLEN: No. I am able to confirm that from 1 April the newly adjusted rate of New Zealand superannuation for a married couple who both qualify for it is 66.23 percent of the net average weekly wage. Under the policy we inherited from the previous National Government it would have been only 61 percent, a difference of $34.35 a week or $1,786 a year for a married couple. I noted calls in the House yesterday for cuts in Government spending. That is exactly what National did when it was last in Government; there was a slow-down in the economy, and tax cuts were paid for by cuts to New Zealand superannuation.

Hon Bill English: Can the Minister explain why, on 19 May 2005, he announced that income tax would become inflation indexed from 1 April 2008, then last year he decided to cancel the only tax cut that many New Zealanders would have had in 8 years under Labour, despite record surpluses?

Hon Dr MICHAEL CULLEN: Because we decided to introduce the enhancements to the KiwiSaver scheme, which that member notably still fails to endorse, despite the fact we will pass the 500,000 member mark in KiwiSaver either tomorrow or at the beginning of the next week. Nobody believes National on those kinds of policies.

Economy—Statement

2. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she continue to stand by her statement, in relation to the economic downturn, that “Basically the New Zealand economy has held up pretty well.”; if so, why?

Rt Hon HELEN CLARK (Prime Minister) : Yes; because I believe it to be true.

John Key: Does she stand by the statement she made on radio 2 weeks ago that people’s mortgage rates are not, in fact, going through the roof?

Rt Hon HELEN CLARK: People’s mortgage rates are affected by the general credit squeeze that is filtering through from offshore to New Zealand.

R Doug Woolerton: Does the Prime Minister not think that the economy would hold up even better if the House were permitted to re-examine the Reserve Bank of New Zealand Act, as an eminent American economist has recommended in today’s New Zealand Herald,because “The Reserve Bank’s exclusive focus on curbing inflation is a mistake,” and counter-productive?

Rt Hon HELEN CLARK: There have been reviews done in the past on whether there should be a broadening of the Reserve Bank objective, but the consensus to date has been that there should not be.

John Key: If the Prime Minister stands by her statement, can she explain to hard-working Kiwis who are paying the second-highest floating mortgage rates in the developed world, and whose 2-year fixed-rate mortgages are tipped by Tony Alexander of the Bank of New Zealand to go through 10 percent in the next few weeks, just where the roof for mortgage rates is under a Labour Government?

Rt Hon HELEN CLARK: The member is well aware, and has repeated on radio this morning, that mortgage rates are being affected by global market conditions. If he has an answer to those, would he please tell us.

John Key: Is it helpful to the Government when the Minister of Finance goes around telling the New Zealand public that the economy is going into a recession?

Rt Hon HELEN CLARK: Of course the Minister of Finance did not say that, but I would note that the Leader of the Opposition manages to say everything within the course of a week. This morning he refused to characterise the situation as going into a technical recession; last week he was telling radio “I think, look, the economy’s really slowing down, um.”

John Key: Is the Prime Minister getting the same research staff as the people working at the Inland Revenue Department who cannot get anything right?

Rt Hon HELEN CLARK: I am perfectly happy to table the member’s transcript from bFM where he says “I think, look, the economy’s really slowing down last week, um.”

John Key: If the Prime Minister is right and the economy is holding up pretty well, does that mean the Minister of Finance, who thinks the country is heading into a recession, is wrong; and what on earth was going through the Minister of Finance’s mind yesterday when he declared publicly that New Zealand was heading for a technical recession?

Rt Hon HELEN CLARK: The Minister of Finance did not say that.

Hon Members: He did so.

Rt Hon HELEN CLARK: He did not say that. But I am happy to table the Radio New Zealand transcript of the Leader of the Opposition’s statement this morning. When asked: “Your views on the R word, recession itself—are we going to go into a technical recession? Is that your assessment?”, he said: “I’m not going to characterise it in that way.” What does he think? Is it a recession or is it not, or does it depend on whom he is talking to at the time?

John Key: Is the Prime Minister then saying she agrees with Michael Cullen that the situation should be characterised as a recession, and if she does agree with him, why, a couple of days ago, did she say the economy is holding up pretty well?

Rt Hon HELEN CLARK: Unlike the Leader of the Opposition I can read. I am not going to agree with something that Dr Cullen never said.

John Key: Would the Prime Minister like Television One to replay the clip it showed last night, when Michael Cullen said: “Um, ah, we might be going into a technical recession.”; and will that not do quite a lot of damage to New Zealanders who are struggling at the moment under her Government’s policies?

Rt Hon HELEN CLARK: We are seeing again what we saw last week. The Leader of the Opposition cannot admit that he is wrong, and he keeps quoting things that are not true.

Hon Dr Michael Cullen: To help the member’s medium-term memory, can the Prime Minister remember that the last time a senior New Zealand politician predicted a recession was in late 2005, that it was Mr John Key, and that he was wrong?

Rt Hon HELEN CLARK: That would be absolutely right. But, then, knowing the member and his flip-flops, he probably said the opposite the next week and the week before.

Rodney Hide: What responsibility does she take for 400,000 Kiwis leaving New Zealand permanently since she took over the job of Prime Minister, for labour productivity growth halving back to levels we have not seen since Muldoon days, for our not climbing up the OECD ladder but down it, and for the outlook for growth being at best 2 percent, and not the 4 percent that her Minister of Finance, Michael Cullen, promised; and will she just keep doing the same old thing to get the same old lacklustre result?

Rt Hon HELEN CLARK: New Zealand has been through many years when 2 percent growth was as good as it got, and a lot of those years were under National Governments. Secondly, labour productivity rates do not rise as fast when unemployment is crashing. We have very, very low unemployment. The answer in the medium to longer term in terms of having higher wages is more skills and more innovation. Last week the National Party opposed the biggest investment in innovation that the country has seen in a long time.

Human Rights—China

3. KEITH LOCKE (Green) to the Minister of Foreign Affairs: What human rights abuses, if any, would lead him to advise the Prime Minister to reconsider the April signing of a preferential trade agreement with China?

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of Foreign Affairs: New Zealand’s policy on human rights, which was repeated and endorsed in this House yesterday in the motion on the situation on Tibet, is very clear. We raise human rights issues in the appropriate forum and using the appropriate channels.

Keith Locke: Would an incident on the scale of the 1989 Tiananmen Square massacre be sufficient for the Government to reconsider its April signing of the preferential trade agreement with China?

Hon Dr MICHAEL CULLEN: The Minister of Foreign Affairs is not responsible for the Government’s free-trade policy. That is a matter for the Minister of Trade.

Judy Turner: Does the Minister agree that New Zealand has a far greater influence over China while staying engaged in our present preferential trade opportunities; if so, does he also acknowledge that this privileged position carries with it a high degree of ethical responsibility that obliges this Government to strongly condemn China for its actions?

Hon Dr MICHAEL CULLEN: The Prime Minister laid out clearly the New Zealand Government’s response yesterday. That was amongst the strongest responses of any Government in the world.

Jeanette Fitzsimons: I raise a point of order, Madam Speaker. I would just like clarification given the Minister’s previous statement that questions of trade were out of scope to the Minister of Foreign Affairs, because I wish to ask a supplementary question, in a moment, that pursues that. The original question did ask the Minister of Foreign Affairs on what basis he would give advice to the Prime Minister that the foreign affairs situation had become so serious that we should reconsider the trade agreement. Therefore, can you rule whether trade agreements are totally out of scope of this question?

Madam SPEAKER: It depends on the nature of the question. So if the member would like to ask the question, then we will be able to assess that. As the member said, if one reads the question as it is, it is relating to advice from one Minister to another, but it is not on the substance of the trade agreement.

Jeanette Fitzsimons: Given previous statements from his Government that there are very few tariffs left on Chinese imports into New Zealand, what exactly is China getting, other than Western legitimation of a repressive regime; and, if it is simply that the democratic stamp of approval is being given away, then does the Minister of Foreign Affairs agree that the situation in Tibet at the moment demands that this be urgently reconsidered?

Hon Dr MICHAEL CULLEN: China continues to seek to open up its economy to the rest of the world. New Zealand is fortunate to actually be in the forefront of that process, and from the perspective of developed countries. The situation in Tibet remains unclear, and I note that the Dalai Lama himself has said that there was violence on the streets in Tibet that did not come from the Chinese authorities.

Hon Peter Dunne: In light of an earlier answer the Minister gave about the New Zealand Government’s reaction, what was the reaction to the meetings of the New Zealand Ambassador to China with Chinese officials in the last few days; who did he see; and what did they indicate to him in response to New Zealand’s protests about the situation in Tibet?

Hon Dr MICHAEL CULLEN: The ambassador in China has made representations, and the Chinese Government has noted those representations.

Keith Locke: How many cases like that of Ye Guozhu, sentenced to 4 years’ imprisonment for his opposition to forced evictions in Beijing associated with construction for the Olympic Games, and subsequently tortured while in detention, would it take for him to reconsider the April signing of a preferential trade agreement with China?

Hon Dr MICHAEL CULLEN: The Government regularly raises human rights issues with the Government in Beijing. It has done so for many years. However, it is fair to say that the Chinese Government’s record in these matters is somewhat better than in the depths of the days of the Cultural Revolution, when that member supported the Chinese Government’s approach.

Keith Locke: I raise a point of misrepresentation. I did not support the Chinese Government’s approach in the Cultural Revolution.

Madam SPEAKER: That is a point of information.

Keith Locke: I raise a point of order, Madam Speaker. I take offence at the sort of abuse directed at me by the Minister. Surely that is out of order in this House. I ask that he withdraw and apologise.

Madam SPEAKER: It does not come within the rules on personal reflection. It is a matter of debate, but if the member would like to ask another supplementary question he should please do so.

Keith Locke: I wish to make a personal explanation. I assure the House that I have never supported the Chinese regime—the one-party State—in its activities during the Cultural Revolution or at any other time. I ask the Minister to withdraw and apologise.

Hon Dr MICHAEL CULLEN: Clearly my memory as a fellow student of the member at Canterbury University is now somewhat faulty on these matters. I must remember him referring to the Pol Pot regime.

Keith Locke: I raise a point of order, Madam Speaker. I have assured the House on several occasions in the past that I have never supported the Pol Pot regime or its genocidal policies, and many members have been forced to withdraw and apologise for saying that. I ask the Deputy Prime Minister to do so, and I think it is a disgrace for a Labour Deputy Prime Minister to sink to that level.

Madam SPEAKER: I have ruled on the first statement about personal reflection; the second statement, however, has actually been ruled on before, so I would ask the Hon Dr Michael Cullen to withdraw and apologise.

Hon Dr MICHAEL CULLEN: I withdraw and apologise.

Keith Locke: Is he telling the House that there is no level of violence or human rights abuse that would trigger a reconsideration by his Government of its plans to sign a preferential trade deal with China, when he does not give a preferential trade deal to the Governments of countries such as in Myanmar or Zimbabwe and, in fact, put sanctions here on the movements of their leaders?

Hon Dr MICHAEL CULLEN: I remind the member that this Government legislated to remove tariffs on the least developed countries in the world, and that member and his party opposed the removal of those tariffs.

Keith Locke: I raise a point of order, Madam Speaker. I do not think that addresses the question of whether there is any level of violence or human rights abuse that would force a reconsideration of the free-trade agreement, or the question relating to the sanctions on travel by members of the Zimbabwean and Myanmar regimes.

Hon Dr MICHAEL CULLEN: The member dragged in some of the least developed countries in the world in relation to trade policy—and Myanmar is certainly amongst the least developed countries in the world—and I was reminding the member that his party voted against the removal of tariffs on those countries. One cannot give a more preferential trade policy than zero tariff across the board.

Madam SPEAKER: That did address the question.

Electoral Finance Act—Officials

4. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Justice: Is she satisfied with the quality of advice provided by officials during the process of reviewing electoral law and the development of the Electoral Finance Act 2007; if not, why not?

Hon ANNETTE KING (Minister of Justice) : The Minister of Justice, in Cabinet, received advice from officials on various options relating to the reform of electoral finance laws over a long period that started in July 2006. The Justice and Electoral Committee also received a large amount of advice, as well as a number of submissions during its deliberations on the bill. At the end of the day the Electoral Finance Act 2007 reflects the decisions made by Parliament following consideration of the advice and submissions on the bill.

Hon Bill English: Has she read that part of the officials’ advice produced in July 2006 and released last week, which provided three options in respect of the length of the election period—to leave it at 3 months, to shorten it to writ day, or to shorten it to the day the Prime Minister announced the election date; if so, why did she think these options were wrong, and why did her Cabinet decide to make the regulated period the whole of election year?

Hon ANNETTE KING: Madam Speaker—

Hon Dr Nick Smith: Because they are cheats.

Hon ANNETTE KING: I raise a point of order, Madam Speaker. You can hear what the member is saying.

Madam SPEAKER: Well, actually, I cannot. That is the problem. Does the Minister take offence?

Hon ANNETTE KING: I take offence.

Madam SPEAKER: Would the member please withdraw and apologise.

Hon Dr Nick Smith: I said “Because they are cheats.”

Madam SPEAKER: The Minister has asked for you to please withdraw and apologise for making that comment. So would you please do so.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker.

Madam SPEAKER: Please be seated. The rules are that if the member does take offence at such a reference, then the member is asked to withdraw and apologise.

Gerry Brownlee: I raise a point of order, Madam Speaker. A few minutes ago Mr Keith Locke took exception to something that the Minister of Finance said, and it was like pulling teeth to get to a position where the Minister was eventually put in a position of having to make a withdrawal. This was just a comment across the House; it pales into insignificance compared with some of the things that are said across this House.

Madam SPEAKER: The difference was that the term that was used by the Hon Dr Nick Smith could be interpreted as being one of abuse; the other was an observation on a political position. That was the difference. However, in respect of the second comment, the Hon Dr Michael Cullen was asked to withdraw and apologise. So could we move on, please. Would the member withdraw and apologise.

Hon Dr Nick Smith: I can tell the Minister is a bit sensitive. I withdraw and apologise.

Hon ANNETTE KING: I am not at all sensitive. Unfortunately, that member has a habit of interjecting on everybody, and often in a very personal way. In relation to the question asked, this Parliament decided that the regulated period would be from 1 January 2007. This Parliament voted for that, by a majority.

Hon Bill English: Can the Minister confirm that all the official advice to Cabinet was to keep the regulated period at 3 months or less, that Cabinet decided, without any detailed consideration of the implications, to lengthen the regulated period to 12 months, and that that particular decision has been the cause of most of the problems that politicians of all parties are having in trying to apply the law that she passed?

Hon ANNETTE KING: Cabinet decided that it would line up New Zealand’s regulated period with some international standards, but, at the end of the day, it was this Parliament that decided. The National Party does not like the fact that it lost a democratic vote.

Hon Bill English: Did Cabinet give any consideration to the implications of extending the regulated period, or whether to get officials to advise Cabinet on the implications, such as those that have now arisen, which, for instance, create legal uncertainty about what is the legitimate activity of a member of Parliament in election year, and what would count as an electoral advertisement, which has gone to the ridiculous extent where the law has driven politicians to the ridiculous position that activities that are regarded as legitimate parliamentary activities will also count as an election advertisement, and will therefore have to carry an authorisation by someone who has nothing to do with Parliament?

Hon ANNETTE KING: I think most members of Parliament who voted for the longer period took account of the fact that the National Party, during the 2005 election campaign, spent millions of dollars before the 3-month period started, and that National, when that member was the leader of that party, put up hoardings around New Zealand before the regulated period—all aimed at ensuring that National would not be caught by the 3-month rule. National carried out a rort then, and it does not like the fact that one has to be clearer now about what one is doing.

Hon Bill English: Can the Minister confirm that Cabinet gave so little consideration to the practical effects of this legislation covering the whole of election year that Labour has already been caught out for breaching the legislation on three separate occasions, that Parliamentary Service is having to hire extra people to try to administer the legislation, that the small parties have found their spending plans virtually paralysed by the legislation, and that every election advertisement now has to meet the ridiculous requirement of including the personal residential address of the person who authorised it?

Hon ANNETTE KING: No, I will not confirm that, because making allegations is not the same as saying one has been found guilty of something. Otherwise, we have the allegation that John Key’s DVD—which has no name, no authorisation, and was still being handed out at a fair this year by a member of this Parliament—should not have been authorised.

Question No. 3 to Minister

METIRIA TUREI (Musterer—Green) : I raise a point of order, Madam Speaker. I would like to ask you to perhaps give some further consideration to your ruling this afternoon that it is within the Standing Orders for a member to take personal offence at being called a name but not when an observation on a political position concerning that member is taken. It strikes me that any such observation is just as likely to be a false accusation designed to impugn a member’s reputation and bring that member into disrepute, and that he or she is therefore entitled to take personal offence at that comment and to ask the member who made that comment, observation, or false accusation to withdraw and apologise.

Madam SPEAKER: I understand the member’s point. I am happy to do that.

Victim Support—Initiatives

5. LYNNE PILLAY (Labour—Waitakere) to the Minister of Justice: What further initiatives has the Government decided on to support victims?

Hon ANNETTE KING (Minister of Justice) : In addition to the significant work that this Government has already undertaken for victims, including the enactment of the Victims’ Rights Act 2002, our response to the Justice and Electoral Committee’s inquiry into victims’ rights announces the development of a victims’ charter, the establishment of a central contact point for victims—including a national 0800 victims’ helpline and a website—increasing funding for Victim Support, and the establishment of victim advocate support persons in Family Courts. Also, the Law Commission has been asked to look at the issue of compensation and State-funded reparation, and the Task Force for Action on Sexual Violence will look at alternative models to the adversarial system in relation to sexual violence cases.

Lynne Pillay: What reports has the Minister seen on improving services for victims?

Hon ANNETTE KING: I have seen many positive and supportive comments, particularly from organisations like Victim Support. But I am disappointed to say that improving services and support for victims does not appear to be anywhere near to the top of the National Party’s priorities. I remind the House that three National members on the select committee refused to fully participate in that inquiry and preferred to grandstand about the committee’s trip to Australia. Politics was obviously more important to them than victims were.

Simon Power: Why has it taken 9 years to propose a victims’ charter and a victims’ compensation scheme, when the Prime Minister told the Mount Albert Lions club on 4 July 1994: “We believe a victims’ charter needs to be developed to ensure the voices of victims are heard and their needs are not forgotten. Labour also intends to consult widely on an appropriate victims’ compensation scheme.”?

Hon ANNETTE KING: Because the Labour Party was not in Government in 1994. Anybody who looks at who was then in Government will see that National did very little for victims, at all. By 2002 we had passed an Act that helped victims, in terms of what was enshrined in it. We are building on that Act of 2002, with a range of measures that have been widely supported—not criticised, as we have heard from National.

Dail Jones: Has the Minister seen the recent statement by Victim Support dated 18 March 2008, regarding the need to improve information services and financial support to victims, and the Government support that will be made available there; and how soon will the Government be acting on these measures?

Hon ANNETTE KING: The member may not have heard my answer to the original question. In fact, I set out the range of things that we are doing in terms of improving information services to victims, because the thing that came through very strongly in the select committee inquiry was concern about access to information. Victims feel it has been very difficult to get that access, so for the measures that we have announced, the money has already been announced and the work has been put in place to get those measures in place.

Hawke’s Bay District Health Board—Conflicts of Interest

6. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Did Peter Hausmann make any changes to the draft community services request for proposal, sent to him by management at the Hawke’s Bay District Health Board 2 months before it was issued, and were these changes accepted?

Hon DAVID CUNLIFFE (Minister of Health) : That is a question for the chief executive of the Hawke’s Bay District Health Board, who at the relevant time was employed by the former board of the Hawke’s Bay District Health Board. However, I refer the member to appendix E of the independent panel review report, which I will soon seek leave to table.

Hon Tony Ryall: Why does the review panel make no judgment on the role of Hawke’s Bay District Health Board management in providing confidential tender documents to Mr Hausmann before any other potential bidder, when the Office of the Controller and Auditor-General has said that managing conflicts of interest is also a responsibility of management?

Hon DAVID CUNLIFFE: Quite clearly, because the primary focus of this report was on governance and the relationship between governance and management—in this case, the chief executive. One of the salient features of that relationship was that the chairman, Kevin Atkinson, was present at a presentation and, following that, a dinner at Craggy Range Winery, at which he was fully briefed on the intention of Mr Hausmann and the chief executive to discuss the request for proposal, and I understand that Mr Atkinson told the chief executive to “get on with it”.

Lesley Soper: What was the clearest example of board interference in operational matters detailed in the report of the Director-General of Health’s independent review panel?

Hon DAVID CUNLIFFE: In section 6.63 of this very comprehensive report, the independent review panel reports that Mr Peter Dunkerley sent an email to three levels of management in support of retaining the policy of “no more licences” for pharmacies, even though he had a clear conflict of interest because of the effect on existing pharmacies owned by the Radius Pharmacy chain, of which he was chairman and in which both he and his immediate family had direct pecuniary, and insufficiently disclosed personal, interests.

Barbara Stewart: Does the Minister agree that this debate is now generating more heat than light, and that patients in the Hawke’s Bay district could be forgiven for thinking that more effort has gone into public relations in the media than into solving their health care problems?

Hon DAVID CUNLIFFE: I am deeply concerned at the investment by the board, as it then was, in legal and public relations matters, and would have preferred its members to focus on the health care of the people of Hawke’s Bay. That is absolutely the case.

Hon Rick Barker: What reports has the Minister seen that outline the savings that the people of Hawke’s Bay could have benefited from if the proposed changes to the delivery of pharmacy services had been made?

Hon DAVID CUNLIFFE: I have seen two reports, which I will shortly seek leave to table: one proposing $2.9 million of pharmacy savings for the people of Hawke’s Bay, and one consulting on proposals for more efficient pharmaceutical dispensing. I note that the former board chair, Kevin Atkinson, confirmed on Radio New Zealand National yesterday that there was, therefore, potential commercial conflict between Mr Hausmann and Mr Dunkerley, precisely because Mr Hausmann’s community services proposals might have hurt Mr Dunkerley’s pharmacy businesses.

Hon Tony Ryall: As the report notes that Annette King was aware of Mr Hausmann’s ideas around the joint venture with the Hawke’s Bay District Health Board when she appointed him, did Annette King take any further interest in the development of the project after Mr Hausmann’s appointment?

Hon DAVID CUNLIFFE: What is important here is not what Mrs King knew but what Mr Atkinson knew. Once the appointment had been made, in full accordance with normal Cabinet processes, the responsibility for managing the conflict of interest was, as with any other board, squarely on the shoulders of the chair and the member concerned. The independent report concludes that both could have done better.

Hon Tony Ryall: Did the then Minister of Health, Mrs King, ever ask for, or receive from, any official—either ministry or Hawke’s Bay District Health Board—progress updates on the negotiations over the multimillion-dollar joint venture?

Hon DAVID CUNLIFFE: I repeat that the primary responsibility for managing conflicts of interest rested with the chair of the board, as it does with the chairs of other boards. Admittedly, in the case of Mr Atkinson, his job was made more complicated by the fact that inadequately declared commercial interests were at play across the board table that meant that Mr Hausmann was quite possibly persona non grata from day one.

Madam SPEAKER: I do not think the Minister addressed the question, actually. Would the Minister please address the question.

Hon DAVID CUNLIFFE: I am advised that the then Minister, Mrs King, would have received the normal kind of reporting on that board that she would have received on any other board.

Hon Tony Ryall: Why did the inquiry not consider the role of management in this affair and the extent to which Mrs King remained involved in the Hawke’s Bay District Health Board saga?

Hon DAVID CUNLIFFE: As long as the member is keen to ask questions I am very keen to answer them. As I have said, the primary responsibility for managing conflicts of interest rested with the chairman. It was for the chairman to disclose what he had found out at Craggy Range Winery, and what he had told the chief executive to do—to “get on with it” and work up a community services request for proposal—and, once he had declared that to the board, to get on and manage it. Kevin Atkinson failed to do that, and no matter how much the member would like to rewrite history—just as that chairman had a habit of rewriting minutes—it does not change the facts.

I seek leave to table the transcript from Radio New Zealand National yesterday where Mr Atkinson confirms the possibility of commercial conflict across the board table.

  • Document, by leave, laid on the Table of the House.

Hon DAVID CUNLIFFE: I seek leave to table a Hawke’s Bay District Health Board report on pharmacy strategy consultation—

  • Document, by leave, laid on the Table of the House.

Hon DAVID CUNLIFFE: I seek leave to table a Hawke’s Bay District Health Board report on funding pharmacy services in Hawke’s Bay that—

  • Document, by leave, laid on the Table of the House.

Hon DAVID CUNLIFFE: I seek leave to table a nearly 200-page report from the independent review panel that documents conflicts of interest in the—

  • Document, by leave, laid on the Table of the House.

Energy Efficiency and Conservation Authority—Loan Subsidy Scheme

7. PETER BROWN (Deputy Leader—NZ First) to the Minister of Energy: How many grants were made last year by the Energy Efficiency and Conservation Authority’s loan subsidy scheme?

Hon DAVID PARKER (Minister of Energy) : EnergyWise grants to insulate homes were made to 9,375 low-income families in the year to 30 June 2007. As far as the loan scheme—which was announced only in February this year—is concerned, 11 partner organisations around New Zealand have signed up to join the scheme so far. That scheme will help middle-income families to reduce their energy costs by installing an efficient, clean heating device and helping with insulation. These two programmes show the Labour-led Government is helping New Zealanders to adjust to the changes the world is going through by helping them to reduce their energy costs and reduce greenhouse gas emissions.

Peter Brown: Does the Minister stand by the statement of the Government spokesperson on energy efficiency and conservation that the loan subsidy scheme initiative would increase the use of solar water heating in New Zealand; if so, will he tell the House whether this has been achieved and to what degree?

Hon DAVID PARKER: Various variants of the loan-based scheme have been proposed by the partner organisations that the Energy Efficiency and Conservation Authority is dealing with, and it may well be that some of the products that those service organisations are promoting to their clients include solar hot-water heating.

Peter Brown: Would the Minister agree with one installer of solar water heating systems who has approached New Zealand First and has stated: “The current $500 subsidy is less than 10 percent of the average solar system and is too small to encourage the average Kiwi to invest in solar.”, and: “The current level of funding is treated as a bit of a joke when discussing solar with potential customers, as they are stunned to find out that they cannot access this meagre grant unless they install a cheap system sourced from China.”?

Hon DAVID PARKER: Of course, no one is forced to take the $500 subsidy, and neither should they be. It is but one part of the programme. I think it is fair to say that we do need to look again at the criteria around the solar water heating grants programme. But I also think that although some of the other things that are being done to reduce building consent fees, improve the training of those who are to install them, and check that these systems work properly have been unpopular amongst some of those in the solar water heating industry, they were none the less prudent steps to take.

Jeanette Fitzsimons: Can the Minister confirm that far from encouraging only cheap systems, the rules around the grant actually require a system to meet stringent quality standards, which is one of the reasons that some suppliers are objecting, and can he further confirm that there has been a big success with the builders of new homes, around 15 of which have now signed up to programmes to install solar water heating in new homes in return for the grants, and that this is incentivising the development of solar water heating in new homes?

Hon DAVID PARKER: Yes, I can. In fact, one of the things the Government contribution has gone into has been the testing of the viability of different systems and the proving of their cost effectiveness—and in some cases, unfortunately, the disproving of their cost effectiveness. In respect of new homes, it is true that it is cheaper to put solar water heating into a new home as it is being built than it is to retrofit it in an existing home. That is one of the reasons why we have been encouraging more of the solar water heating systems to be installed in new homes.

Peter Brown: Noting that answer and an earlier answer, is the Minister open to a practical suggestion: will he consider scrapping the current threshold that was introduced in an attempt to force down the price of systems but is actually discouraging investment in good-quality solar systems; and additionally, will he consider raising the subsidy to a more realistic level of $1,500 or more, to encourage a bigger swing to solar water heating, including its installation in more existing homes; will he consider those two suggestions, or is he wedded to the Greens’ approach, which is the do nothing, achieve nothing approach?

Hon DAVID PARKER: As I said, I think we need to look at the criteria again, but I am not personally in favour of increasing the rate of subsidy. I think that money would be better spent on retrofitting insulation in more homes than it would be on increasing the subsidy.

Greenhouse Gas Emissions—Reduction

8. Hon Dr NICK SMITH (National—Nelson) to the Minister responsible for Climate Change Issues: What progress has the Government made over the past 8 years in reducing greenhouse gas emissions and towards the goal of carbon neutrality?

Hon DAVID PARKER (Minister responsible for Climate Change Issues) : Greenhouse gas emissions from electricity in 2007 were 20 percent lower than they were in 2006. We are on track to achieving our target of 90 percent electricity from renewables by 2025—

Hon Dr Nick Smith: It’s going up.

Hon DAVID PARKER: No, it is not. Dr Smith can say that it is going up, as often as he wants to, but it is not. We need to build 175 megawatts of renewables a year. This year alone we are building 300 megawatts. I am confident that carbon neutrality in the electricity sector will be achieved by 2025, if not before, with only modest offsets of residual emissions. In addition, deforestation emissions have decreased substantially this year and will remain lower if the emissions trading scheme proceeds in its current form.

Hon Dr Nick Smith: What?

Hon DAVID PARKER: Again, I say to Dr Smith that it is true. The emissions trading scheme will of course discourage increases, and reward decreases, in emissions across the economy.

Hon Dr Nick Smith: Can the Minister confirm yesterday’s just released forestry figures showing a 19,000 hectare loss of forest in 2007, which are the worst figures since records began in 1951, and that this loss will add 15 million tonnes of carbon emissions, causing the greatest annual increase in any year and the highest emissions since records began in 1990; is this not a disgraceful record for a Government that is proclaiming itself to be a world leader on climate change?

Hon DAVID PARKER: I confirm that deforestation peaked last year at 19,000 hectares. This proves the point the Government has been saying for years, which is that we need to have controls around deforestation. Those controls are affected by way of the emissions trading scheme, and already this year we have seen deforestation plummet.

Gordon Copeland: When it was obvious by 2002 that a massive, nationwide tree-planting drive would have gained New Zealand Kyoto Protocol credits by enlarging our carbon sink, why instead does the Government find itself presiding over a 46,000-hectare deforestation from 2004 to 2007, and an estimated $900 million liability under Kyoto, and is this incompetence, negligence, or a combination of both?

Hon DAVID PARKER: The main driver of the change in forestry and deforestation was the changing economics of forestry compared with dairying.

Hon Dr Nick Smith: It’s a stupid policy!

Hon DAVID PARKER: I am sorry, it is not. It is an obvious truth that what has been driving that change has been the relative profitability of those land uses. That is why the Government has chosen to devolve forest credits to new forests, why we have an afforestation grants scheme, and why it is also necessary to make sure that, like any other sector in the economy, increasing emissions are paid for by those who increase emissions.

Gordon Copeland: I raise a point of order, Madam Speaker. Both the principal question and my question talked about what has happened over the last 8 years. We are calling the Government to account for those 8 years. I do not think that talking about what is planned for the future addresses the question as put forward.

Madam SPEAKER: I thought it did address the question. As the member should know by now, the member cannot require a specific answer to the question. If he wishes to do that, he should have the Standing Orders changed.

Hon Jim Anderton: What recent and relevant reports has the Minister seen on policy to reduce emissions from deforestation?

Hon DAVID PARKER: I have seen a report from the Ministry of Agriculture and Forestry this week that shows that the Labour-Progressive climate change policies have been very successful in reducing deforestation.

Hon Dr Nick Smith: Yeah, right!

Hon DAVID PARKER: They have. It has gone down from 19,000 to probably less than 5,000 hectares this year, which seems to me a significant change, even if it does not to the member.

Hon Maurice Williamson: There’s nothing left to cut down!

Hon DAVID PARKER: Mr Williamson obviously does not know the millions of hectares of forestry we have in New Zealand. The report also shows that the emissions trading scheme in its current form will reduce deforestation by 38,000 hectares of forestry, resulting in a 30 million - tonne reduction in emissions, worth around $700 million to the New Zealand economy and taxpayer.

Hon Mark Burton: In the Minister’s view, what is the key to reducing emissions in the critical agricultural sector?

Hon DAVID PARKER: The answer to that is evident from the breakthrough success of nitrification inhibitors to reduce nitrous oxide emissions. This shows the importance of research. Obviously, finding a technological answer to methane emissions is crucial, since that is New Zealand’s biggest slice of emissions. The Government’s boost of $700 million through the Fast Forward fund is critical to this. Like everyone else in New Zealand, I am surprised at the poor judgment shown by John Key and the National Party in choosing this issue to differentiate on. Mr Key is differentiating not just from Labour, but he is differentiating from his own spokesman on environment, Nick Smith, who has been calling for more funding for research to reduce agriculture emissions.

Hon Dr Nick Smith: Can the Minister explain the contradiction between his admitting that deforestation peaked in the calendar year 2007, and the press statement issued by the Government saying that deforestation was reducing?

Hon DAVID PARKER: Yes; it is the difference between 2007 and 2008. That is the difference. Every year the Ministry of Agriculture and Forestry surveys deforestation intentions, and we also monitor actual rates of deforestation through aerial photography or satellite photography. As a consequence, we are sure that deforestation has substantially reduced this year.

Hon Dr Nick Smith: Can the Minister confirm the internationally reported figures showing that New Zealand’s net emissions are 23 percent greater than in 1990, whereas Australia’s are just 5 percent above 1990 levels, and that the key difference between Australia being on target to meet the Kyoto target and New Zealand not having a bolter’s hope is that in recent years Australia has planted an additional 500,000 hectares of trees, whereas over the same period in New Zealand, trees have been felled like there is no tomorrow?

Hon DAVID PARKER: No, I cannot confirm some of the details there. I can confirm the tonne amount that the member quotes in respect of the increased emissions from New Zealand. But the main reason Australia is closer to its target than we are to ours is that it had higher rates of deforestation historically that it has already knocked on the head. We had yet to knock ours on the head until this year, and that is one of the reasons why our emissions have been growing until now.

Hon Dr Nick Smith: Can the Minister explain why the Government’s press release yesterday announcing the record 19,000 hectares’ loss of forest is claiming that deforestation is reducing, and is this not, as one forestry industry spokesperson has said, “a bare-faced lie. These people will do whatever they can to stay in power.”; and could he specifically explain what part of this graph with figures up to the end of 2007 might look like deforestation is reducing?

Hon DAVID PARKER: The member actually answered the question himself. He has figures until the end of 2007. The point has been made by the Minister of Agriculture and of Forestry and by me that deforestation has decreased since then and the reason it has decreased is that—

Hon Maurice Williamson: You’ve put a tax on it.

Hon DAVID PARKER: No, we have not put a tax on it. We are actually grandparenting more generously to deforestation than to any other sector. Deforestation is going down because it is being included in the emissions trading system.

Hon Dr Nick Smith: I seek leave of the House to table the forestry database of the Ministry of Agriculture and Forestry.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Hon Dr Nick Smith: I seek leave to table the statement by the forest industry that this is a bare-faced lie.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Unemployment Benefit—Spending

9. RUSSELL FAIRBROTHER (Labour) to the Minister for Social Development and Employment: What reports has she received regarding reductions in spending on the unemployment benefit?

Hon RUTH DYSON (Minister for Social Development and Employment) : I have seen a report that states that this Government saved New Zealand taxpayers $164 million over the 15 months to December 2007. That was the result of over 18,000 people moving off the unemployment benefit during that period—that is 40 people a day. Under a Labour-Progressive Government fewer people are reliant on a benefit, because more people are moving into paid work.

Russell Fairbrother: What has the Government done to support New Zealanders who have moved into low-income jobs?

Hon RUTH DYSON: Not only is our Government moving record numbers of New Zealanders into paid work but we have also made sure that that work really pays. I will give two examples. The Working for Families tax credits have made a real difference to working families, such as a couple on a benefit with two children under 5. If one parent got a full-time job earning around $850 gross a week, the Working for Families tax credits would make that family better off by $300 a week. We have also increased the minimum wage every year since 1999, and on 1 April this year the adult minimum wage will be increased to $12 an hour—that is $5 an hour more than in 1999.

Judith Collins: I seek leave to table a report on the massive increase in the spending on the sickness and invalids benefits under this Government.

  • Document, by leave, laid on the Table of the House.

Child Support—Debt Levels

10. JUDITH COLLINS (National—Clevedon) to the Minister of Revenue: Can he confirm that total child support debt is now over $1.2 billion, including $471.9 million in assessment debt, and how does the level of assessment debt compare with 1999?

Hon PETER DUNNE (Minister of Revenue) : Yes, I can confirm that the member is correct. The level of liable-parent assessment debt in 1999 was $179.2 million. The growth in assessment debt has, however, slowed over the last few years. It was 3.1 percent in the year ended June 2007, which compares with 15.7 percent and 8.1 percent in the years ended 30 June 2005 and 30 June 2006 respectively.

Judith Collins: Does he agree that the $300 million increase in assessment debt since Labour took office confirms that this Government does not take seriously the collection of child support?

Hon PETER DUNNE: No, I do not agree with that. In fact, a number of steps have been taken to improve the collection of child support debt. I refer to the legislation that was passed in the House in 2006 that enabled long-term penalties to be written off if parents entered into arrangements to repay their debt more quickly—legislation that the member’s party opposed.

Judith Collins: Does he stand by his statement made last week and, again, today that the legislation to allow write-offs of penalty debt has been extremely successful; if so, can he explain why child support debt has continued to increase dramatically since that legislation was passed?

Hon PETER DUNNE: What I can confirm is that since that legislation was passed and came into effect the rate of growth of assessment debt has actually slowed.

Judith Collins: Does he agree that the increase in the number of child support debtors since Labour took office and the disgraceful level of debt are because this Government, which he supports, makes it far too easy for 120,000 delinquent parents to walk away from the responsibilities they owe to their children?

Hon PETER DUNNE: It may come as a surprise to the member to know that in 1999 the number of paying parents was 130,068, and in the year ended January 2008 the figure had reduced to 124,541.

Judith Collins: Does he agree with the principle that applies in Australia that parents need to know that they cannot leave their child support debt behind when they leave the country; if he does not agree with that principle, why does he not agree with it?

Hon PETER DUNNE: I do agree with that principle. That is why we passed legislation to allow for data matching with the Customs Service for those who are coming and going from the country. It is also why, since the reciprocal agreement between Australia and New Zealand has been in effect, some 8,000 cases are being collected in Australia, and the Inland Revenue Department is collecting 3,500 cases in New Zealand. Those are very good figures.

Māori Trustee—Beneficiaries

11. HONE HARAWIRA (Māori Party—Te Tai Tokerau) to the Minister of Māori Affairs: How many beneficiaries are there to the unclaimed moneys and other moneys currently being held by the Māori Trustee?

Hon PAREKURA HOROMIA (Minister of Māori Affairs) : There are 126,222 accounts held for beneficial owners.

Hone Harawira: Is the Minister expecting a legal challenge from those beneficiaries whose money the Government is stealing to establish a development bank; if so, will he also be recommending that legislation be passed to deny those beneficiaries the right to legal aid to challenge that debt—

Hon Trevor Mallard: I raise a point of order, Madam Speaker.

Madam SPEAKER: Would you please be seated, Mr Harawira. You have been here long enough to know the rules.

Hon Trevor Mallard: Madam Speaker, I refer you to, I think, the second clause of what the member said. It was clearly out of order. Parliament is contemplating legislation, and to characterise it in the way that the member did is clearly unparliamentary.

Madam SPEAKER: Would the member like to rephrase his question so that it is consistent with the Standing Orders. Thank you.

Hone Harawira: No, Madam Speaker, I would rather not, unless you insist that I do.

Madam SPEAKER: Yes, I do insist that you do.

Hone Harawira: Very well. Is the Minister expecting a legal challenge from those beneficiaries—

Gerry Brownlee: I raise a point of order, Madam Speaker. In what way was Mr Harawira’s question inconsistent with the Standing Orders? Given the comments made by the Deputy Prime Minister this afternoon about another member’s past involvements, what he was up to, and all the rest of it, which for many of us seemed to be an imputation against that member’s motives, what was so wrong with what Mr Harawira just said?

Madam SPEAKER: As I have said to the member, I am considering the general question, and in the meantime I will be consistent with the rulings as of today. Would Mr Harawira please rephrase his question.

Hon Dr Michael Cullen: In light of the previous point of order, I seek leave to table an article from a Socialist Action of 1975, written by Keith Locke and headed: “Cambodia liberated: victory for humanity”, which describes the Khmer Rouge victory.

  • Document, by leave, laid on the Table of the House.

Madam SPEAKER: Hone Harawira, your question please. [Interruption] Well, that is another issue.

Hone Harawira: I raise a point of order, Madam Speaker. Is it appropriate that members speak when sitting down, while I am standing up to ask a question?

Madam SPEAKER: Would you please just ask your question.

Hone Harawira: Certainly. Is the Minister expecting a legal challenge from those beneficiaries whose money the Government is appropriating to establish a development bank; if so, will he also be recommending that legislation be passed to deny those beneficiaries the right to legal aid to challenge that appropriation, in the same way that his Labour Government appropriated the foreshore and seabed and then passed legislation to deny Māori the right to legal aid to challenge that appropriation?

Hon PAREKURA HOROMIA: No and no. It is totally the opposite. It is about thinking into the future and making sure that fragmentation, in the sense of ownership, is about getting a platform for Māori when nobody else will do it.

Dave Hereora: Has the Minister heard of any recent examples where owners of unclaimed moneys have been found?

Hon PAREKURA HOROMIA: There are several. The Māori Trust Office received contact from a descendant of a deceased person whose name had been listed in KōkiriPaetae magazine. A lot of these unclaimed dividends are sitting there, and that person was able to claim the $4,000 that was owed.

Hon Tau Henare: Why, if the interest earned on a person’s money belongs to him or her—

Hon Trevor Mallard: Why doesn’t Paula use her own lines?

Hon Tau Henare: Why does the member not be quiet?

Madam SPEAKER: Would the member please just ask the question.

Hon Tau Henare: Why, if the interest earned on a person’s money belongs to him or her, is the Minister happy to claim that the $35 million in interest and dividends earned from beneficiaries—unclaimed moneys—does not belong to those beneficiaries; and why does he think he can take it without asking for their permission?

Hon PAREKURA HOROMIA: The unclaimed moneys as at 29 February 2008 was $8,579,775. The general purposes fund is made up of money from the business activities of the Māori Trustee. The sources of funding for the general purposes fund are fees and commissions, returns on investments, and the interest differential between what is earned on common fund investments and what can legally be paid to beneficial owners of those investments. This is a way of using it—whereas it cannot be used at the moment—to help all Māori.

Hone Harawira: Can the Minister please explain to all of those beneficiaries who are listening to this broadcast why, given the demand by the Government that iwi contact all of their tribal members to have them endorse Treaty settlement packages, he does not have to contact any of the beneficiaries before appropriating $35 million of their money?

Hon PAREKURA HOROMIA: Every owner registered was sent a notice of this activity. There were several consultation hui around the country. Māori at those hui were generally very supportive of this move.

Hone Harawira: Can the Minister please explain why, if the intention of the Māori Trustee and Māori Development Amendment Bill is to make the Māori Trustee more independent from the Government, he is putting forward legislation so that he can appropriate $35 million of the Māori Trustee’s money, and put it into an organisation that he is setting up, with a board of directors that he will choose, and operating according to a purpose that he has already predetermined; and can he please explain to the House why he is doing all of this in election year, without consultation with those beneficiaries whose money he is appropriating?

Madam SPEAKER: There are several questions there.

Hon PAREKURA HOROMIA: There has been consultation over this matter over a period of time. I am amazed at that member’s glass ball that he looks into—it seems to be fogged up. Let us be quite clear about this: the audit of the accounts of the Māori Trustee showed nearly $39 million. No money held in trust for beneficiaries, including unclaimed moneys, will be transferred to the new entity. What does the member want? Does he want the money to sit there, not be used, not be transparent, and not benefit Māori so that they can get on with their lives and do something for themselves with their own money?

Māori Trustee—General Purposes Fund

12. Hon TAU HENARE (National) to the Minister of Māori Affairs: Is the Māori Trustee’s general purposes fund made up of income generated from beneficiary money?

Hon PAREKURA HOROMIA (Minister of Māori Affairs) : The general purposes fund is made up of money from the business activities of the Māori Trustee. The sources of funding for the general purposes fund are fees and commissions, returns on investments, and the interest differential between what is earned on common fund investments and what can be legally paid to beneficial owners of those investments.

Hon Tau Henare: If the Minister is correct, how can Labour purloin $35 million generated by beneficiaries’ assets and, rather than giving that income back to the beneficiaries who generated it, try to use that money to set up an election year slush fund?

Hon PAREKURA HOROMIA: As I told the member the other day, the general purposes fund and other funds for Māori development present a significant opportunity if they are pooled and work together. The Māori Trustee will be sitting across the top of this money and other contributions, as chairperson of the new entity. Those selected for the board will be selected in consultation with iwi leaders and other Māori organisations around the country.

Louisa Wall: Kia ora, Madam Speaker. What can the general purposes fund be used for?

Hon PAREKURA HOROMIA: It will be used to progress Māori development, both in enterprise and land-based activities. It will certainly give Māori the opportunity that banks in this country do not give them because of the tenure construct of Māori land.

Pita Paraone: Tēnā koe, Madam Speaker. Is the goal of a new fund, to be taken from the Māori Trustee’s general purposes fund, to foster real self-sufficiency and development among Māori-owned businesses and landowners, or is it just more micro-management that will keep Māori dependent on Government support?

Hon PAREKURA HOROMIA: Tēnā koe. The fund will be contributed to from a range of sources, including the Crown. The intent of the fund is to support the economic aspirations of Māori. The one thing about Māori and their economic aspirations is that they will never leave this country. They will prop up the great work that Michael and Helen have done. The entity will be independent of the Crown and will also be accountable to Māori for its performance.

Hon Tau Henare: Can the Minister confirm the statement on page 7 of the Māori Trustee’s annual report that says it is necessary that the Māori Trustee is independent from the Crown so that the trustee is not influenced by political factors that may not be in the interests of the clients; if so, how could the Minister state in this House last week that the appointees to the Māori Business Aotearoa New Zealand entity would be made up of Māori who support Labour?

Hon PAREKURA HOROMIA: As usual, that member is twisting things. I have never said “support Labour”. What I said was “support Māori”. I make it quite clear that in the duties of the Māori Trustee there are other activities that the Crown has to pay for—it purchases off the Māori Trustee, and there is agreement. Those are the people whom the Crown cannot find—those people who have unclaimed dividends—and how does one get that out? That has clearly been a practice for a long time, even when that member was the Minister of Māori Affairs.

Hon Tau Henare: Is it not the case that if the Government has a vested interest in appropriating income generated from unpaid beneficiary money for its proposed new business development fund, Labour will have no interest in tracking down the beneficiaries and paying them their due, because that will reduce the amount of money it can appropriate for its “Fox Fighting Fund”, in a desperate effort to help the Minister to keep his seat?

Hon PAREKURA HOROMIA: The one thing about this Minister is that he has his seat, unlike that member, and he will continue to carry on—let me be very clear about that. The one thing about this business is that one cannot differentiate between one’s cousins and one’s whānau, as Tini Fox is one of mine. Let me tell that member again—and he should listen carefully—that the general purposes fund is made up of money from the business activities of the Māori Trustee. The sources of funding for the general purposes fund are fees and commissions, returns on investments, and the interest differential between what is earned from the common fund investments and what can be legally paid to beneficial owners of those investments.

Hon Tau Henare: Is it not true that under the Māori Trustee and Māori Development Amendment Bill, rather than protect the interests of Māori beneficiaries, Labour is going to take money from the Māori Trustee, take money from the Crown Forestry Rental Trust, take money from the Poutama Māori Business Trust, and give it to a group of his own personal appointees to spend on people who are not beneficiaries of the Māori Trustee, in a vain attempt to help him keep his seat?

Hon PAREKURA HOROMIA: Several decisions are made, and, certainly, that member remembers how we developed the Māori Education Trust Board, and other organisations. I wish that that member would not get so upset about me wanting to retain my seat, because that is what I will do.

Hon Tau Henare: Has the Minister been contacted by the Federation of Māori Authorities, and is it not true that it has said to the Minister that it is opposed to the Minister purloining $35 million out of the Māori Trustee to set up this slush fund?

Hon PAREKURA HOROMIA: There are always ongoing discussions with the Federation of Māori Authorities, and other Māori organisations, and the majority are in support of this development. Members of his party might be telling him otherwise, but I tell him that Māori have a lot of support for this development.

Hon Tau Henare: Is it not the case that this rort is nothing more than a reserve fund for the Minister of Māori Affairs, and that it should be renamed the “Fox Fighting Fund”, because that Minister and his other mates in the Labour Party are scared of losing their seats to the Māori Party in the next election?

Hon PAREKURA HOROMIA: It is a real pleasure to still have my seat, unlike that member. I ask him what his policy is. What would he like to do with Māori, because there was not too much transparency when National was sitting on the Government benches? I ask him what his policy is, because he has nothing. Māori will be excited and encouraged by this great development—members can mark my words.

Hon Tau Henare: I seek leave of the House to table the annual report of the Māori Trustee.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is objection.

Question No. 3 to Minister—Personal Explanation

KEITH LOCKE (Green) : Well after the question I asked earlier on where there was an exchange between Michael Cullen and myself, Michael Cullen tabled a document, and given the delay in tabling that document I wish to make a personal explanation on the matter. The document that was tabled does not indicate that I supported Pol Pot in his genocide, as I think was intended by the member who tabled it. It was an article written in April of 1975 when the quite corrupt regimes in Saigon and Phnom Penh fell, and new Governments came to power. I, like most of the people active in the anti - Viet Nam war movement, including Michael Cullen, Phil Goff, and people such as Maurice Williamson, or Brian Donnelly, who was previously in this House, had the same position where they hoped the new Governments would be an improvement on the old Governments. There was no knowledge of Pol Pot, and no knowledge of genocide at that stage.

My personal explanation is that—and it ties in with the other accusation of Michael Cullen that I supported the Chinese Government and the Cultural Revolution, and that somehow he knew that from when I was at university with him. In fact, the Cultural Revolution was after that time when I was at a university in Canada, and I was very critical and active against what the Chinese Government was doing then. There is no truth to that accusation. I think it is important, perhaps, that the House knows this, to stop the attempt to red-bait me on various issues. Michael Cullen knows this very well, because he was a friend of our family, and knew well my mother and my father, Elsie and Jack Locke.

I think he should know that what has driven me to be a campaigner for human rights over the last 50 years is sitting by the radio in 1956—and this is important—when my mother was a member of the Communist Party and anguished as the Russian tanks entered Hungary and shot down the people in the streets. She left the Communist Party over that. That was a formative time for me in understanding human rights. Since that time I have never supported one-party Government dictatorships and people who violate human rights.

Madam SPEAKER: I think the member has made his point. I just remind members that this is the second personal statement we have had today, and if they wish to take this route in the future they should refer to Speaker’s ruling 126/1.

Hon Dr MICHAEL CULLEN (Leader of the House) : I can understand the member’s sensitivity, because that clearly was not a personal explanation. I never accused him of supporting genocide. I said he supported the Khmer Rouge regime, and that article quite clearly states that he supported the takeover by the Khmer Rouge regime in Cambodia. The member has to stop being so sensitive about what he wrote himself, in 1975. He suggests that I was involved. I was a member of the Labour Party, which had long since got New Zealand out of Viet Nam, by that stage.

Madam SPEAKER: Well, this is all very interesting but it is actually not a point of order. It is a debatable matter.

General Debate

DAIL JONES (NZ First) : I move, That the House take note of miscellaneous business. One of the issues that have been of great interest to the House in today’s question time has been tax cuts. What is extremely important to remember—and this is New Zealand First policy—is that, first, people have to have jobs before they can pay tax. New Zealand First supports a policy of high employment and good wages. If the economy ever does get into any trouble, tax cuts usually take second place. First of all, as earners we want to make sure we have a job, and it is only if we have a job that we then have to worry about paying tax. Some members who go on about tax cuts should remember that high employment and a well-paid job are the things that are of most importance to all concerned.

In keeping with the issue of high employment, the question arises about the proposed New Zealand - China Free Trade Agreement. The leader of New Zealand First said today, at a meeting in Stratford: “Let me be clear—our policy position has not changed, we do not favour FTAs with low wage economies. We have not seen the full details of the proposed China FTA—so we cannot respond in detail. But we would make this point—both Labour and National have already nailed their colours to the China FTA mast. When we look at the China FTA we will ensure that retirees are not caught in the cross-fire.”, and I would add that we will ensure that New Zealanders’ jobs are not placed in peril as a result of the crossfire. If people do not have a job, there is no point talking about tax cuts, because they are not paying any tax, at all.

The issue that I really want to speak about today is the problem that arose with the first major analysis of our schools’ National Certificate of Educational Achievement (NCEA) marking system, which indicates there are grave deficiencies in the way in which many of our children are being treated by the NCEA system. Some students have been given over-exaggerated marks, and others have been given lower marks that have potentially prevented them from obtaining university entrance. The wider community, including employers, must have confidence in the NCEA system. The deputy chief executive, qualifications division of the New Zealand Qualifications Authority, Bali Haque, is frank about the situation and has identified a number of reasons why schools may have had better than expected or worse than expected results. Included in these reasons are that teachers did not mark to the national standard for the internals.

He was also frank in indicating that the New Zealand Qualifications Authority will contact schools, through the school relationship manager, to discuss assessment practices in the subjects for which there were outliers, and provide advice, guidance, and monitoring, if appropriate.

Of course, the situation is very much in keeping with New Zealand First’s policy at the last election, when we made it clear that we need to conduct an immediate inquiry into, and maintain an ongoing review of, NCEA, its assessment systems, and, in particular, the setting of standards and management of the assessment processes by the New Zealand Qualifications Authority. Our policy has been very clear, and it has proved to be correct on this issue, as our policies are on many occasions, bearing in mind, of course, that our policies are often copied by other political parties.

New Zealand First believes that education is a critical, social, and economic investment in our country. In the formative educational years of New Zealanders, from early childhood education through to compulsory schooling, NCEA is the zenith of our schooling system. It should be a system that is totally beyond reproach. It should be a system that works fairly for all New Zealanders, so that no one is disadvantaged, or advantaged, by the manner of its operation. The New Zealand Qualifications Authority, of course, is to be congratulated on undertaking the assessment so early in the life of the NCEA exams, and in keeping with New Zealand First policy; and it is to be equally congratulated on supplying the information upon which the criticism is based. We hope that we can also congratulate the New Zealand Qualifications Authority on the assessment process that takes place to make sure these difficulties do not arise in the future. I see in the latest Education Gazette that it is appointing additional moderators—I think about 33 moderators—to help with reducing the problem in the future.

New Zealand has a high standing in the educational world, and those people who are interested in sending their children to study here will appreciate that there is a rigorous overview of NCEA and the New Zealand education system generally. That overview ensures that we are transparent and will take all necessary steps to ensure our education system and the education industry are scrutinised and adjusted to prevent any question of favouritism or other more severe criticism. As I say, we want to make sure that in New Zealand we have high employment and that people actually have jobs. It is only then that people will be paying tax and worrying about tax cuts.

Hon BILL ENGLISH (Deputy Leader—National) : One wonders how much more detail the Minister of Foreign Affairs needs to establish that China is a low-wage country. We will see. Yesterday the Prime Minister made a remark that I think most New Zealanders would regard as one of the least informed, most offhand, and most out-of-touch comments a Prime Minister could make in the current economic environment. She airily tossed off this comment to the journalists: “Mortgage rates are not going through the roof.” Well, there has not been a time when that comment could be more wrong. That is how we know that Helen Clark is completely out of touch with what is happening to New Zealanders who own homes, have mortgages, have credit card debt, and run overdrafts. For all of those people, interest rates are going through the roof.

I will give the Prime Minister some of the figures. These are the Reserve Bank’s figures. In December 2006 the average 2-year fixed rate was 8.18 percent. In December 2007, which is just 4 months ago, the average 2-year fixed rate was 9.5 percent. The best advice that we have from bankers and economists is that the 2-year fixed rate, which a lot of New Zealanders are on, is heading to over 10 percent. One has only to look at the information published on financial websites all over the world about what banks are paying for the funding that they are obtaining in the market, to see that interest rates are going through the roof. In fact, there has not been a time when mortgage interest rates have been going up faster, and there has never before been a Prime Minister who knew less about it, has cared less about it, or has said less about it.

How much difference do interest rates make to an average New Zealander with a mortgage? I will tell members how much difference they make to average New Zealanders; a difference that they do not make to Helen Clark. According to the Reserve Bank, the average floating rate in December 1999 was 7.04 percent, and it was actually about the same in 2005. The floating rate just 3 months ago was 10.4 percent.

How much difference does it make if one’s floating mortgage rate goes from 7 percent to 10.4 percent? [Interruption] Well, Labour does not care, either. All Labour is worried about is wasting the money that comes from the pockets of taxpayers who have a mortgage of $250,000. Do members know how much difference the rate increase makes? We need to tell Helen Clark because she does not know, and we need to tell her that she should care. The difference it makes is $133 a week on a mortgage of $250,000. According to Helen Clark that does not matter—it does not matter if the cost of servicing the mortgage went up by 25 percent. It is by far the single biggest outgoing in any household budget of any homeowner who has a mortgage, and it has gone up by 25 percent in that period. And Helen Clark says that mortgage interest rates are not going through the roof!

But why should we be surprised, when the Minister of Finance is saying that we are to have a recession and Helen Clark does not seem to know that the economy is slowing down. She says that everything is fine. Well, I would invite Helen Clark to talk to a few average, ordinary New Zealanders.

Hon Maurice Williamson: She wouldn’t do that.

Hon BILL ENGLISH: No, she would not do that, because she might find out the legacy of this Labour Government. What do members think people are talking about over the morning tea table now? They are talking about the price of butter, cheese, petrol, and milk. For the benefit of Labour members, it is not a discussion about those prices going down; it is a discussion about those prices going up. Guess who is paying those prices? It is people whose mortgage interest rates are going through the roof.

Hon PHIL GOFF (Minister of Defence) : The member asked what people are talking about. They are talking about the fact that 1 April is coming and every superannuitant in New Zealand will be celebrating the fact that on 1 April they will get $38 net, for a married couple, more than they would have got as a result of Bill English’s action on 1 April 1999 of slashing the rates that superannuitants got, from 65 percent to 60 percent. The member knows that to be a fact. He promised not to cut superannuation, but he did.

People will be talking about the fact that on 1 April the minimum wage will go up to $12 an hour. People know that the minimum wage has been lifted every year under this Labour Government. We do not talk the rhetoric of people being in an underclass situation; we walk the walk. Under the former National Government the minimum wage was increased by 87c on average.

But let us get to the topic of this debate. “Slippery John” was the label that the media gave to Mr Key.

The ASSISTANT SPEAKER (H V Ross Robertson): That is a nickname. Under Speakers’ rulings 26/6-7, the member will not refer to the member by that name. It is a personal reflection under Standing Order 116.

Hon PHIL GOFF: Well, I will refer to him as John Key. Why did he get that nickname—a nickname that was given to him by the media? He was asked, eight times, a very simple question—it had a “yes” or a “no” answer. John Key was asked whether he would allow a strategic asset like Auckland International Airport to be sold overseas. Eight times he dithered. Eight times he slithered around the question. At no time did he answer that question. One has to ask whether that was indecisiveness. One has to ask whether that was because Mr Key is not good unless he is working to a brief and because he did not know what to do. Well, that has some credibility. Or is the explanation rather more sinister than that? Did we see the explanation in those emails from the National Party that were never meant to be made public but were leaked in the book The Hollow Men? That is closer to the truth, I think.

I believe that National Party policy is to see the sale of strategic assets overseas. I believe that the policy of the National Party is to sell off what we will still have in terms of community-owned enterprises. Bill English has indicated that. National has already sold the railways once at a fraction of its value, and if we get that back into the community ownership again, Bill English has already said he would sell it off—and Air New Zealand and all of the rest of them. That is what The Hollow Men taught us about the National Party.

What National members say in public is different from what they say privately. In public they were telling us that they were in favour of the nuclear-free zone. In private they were telling the senators that it would be gone by lunchtime. Why would anybody believe the National Party, given the long history that that party has? Anyway, Mr Key went into last week determined to be decisive. He told his caucus on Tuesday morning that he would be decisive. And he was—decisively wrong.

The Labour Party came out with a bold new plan to promote New Zealand’s food and primary sectors—$2 billion for research and development, a partnership between the public sector and the private sector—determined that New Zealand would be able to have the label of being sustainable, innovative, and at the top of the value chain. And everybody came out in favour of it.

Hon Members: Except John Key.

Hon PHIL GOFF: Except John Key. Fonterra was in favour. So were Meat and Wool New Zealand and Dairy NZ. John Luxton was in favour. John Luxton was an honest Tory. He was a decent Tory. We do not get many of those these days. He came out in favour of that, as did those other organisations, because it made a lot of sense. Even the normally National Party publication, the Trans Tasman, said that the plan fleshes out the claim that Labour is the only party advancing policies of substance for the future—the only party advancing policies of substance for the future. Is that not true! The National Party either has no policy or will not admit to its policies.

Hon TONY RYALL (National—Bay of Plenty) : Well, that speech was a vigorous defence of a sinking ship. We have seen today in this House during question time a Government whose supporters are bailing out on it day after day. We already know that United Future is following its own path. It dumped on the Government over the Electoral Finance Bill and it is trying to get onside with National on the MMP issue. In respect of New Zealand First, Winston Peters gave a speech today in which he said he would go with whichever was the biggest party. It is “Goodbye Labour!” from Winston Peters.

Then in the Chamber today Michael Cullen, a man whose very existence in that chair opposite depends on the support of Keith Locke, humiliated him by making absolutely outrageous claims about him and his involvement with the Khmer Rouge, which brought Mr Locke almost to tears by way of his personal explanation with the support of his colleagues. But Michael Cullen thinks he is able to count on Keith Locke.

Michael Cullen has seen yet more bickering between the Government’s coalition partners. It is a sinking ship: United Future is making its own way, New Zealand First is saying it will go with the biggest party—“Bye, bye Labour!”—and the Greens have been insulted. They are the bunch of people who have loyally toadied up to the Labour Party—

Hon Member: 9 years, 9 years.

Hon TONY RYALL: —for 9 long years. Yet members should look at how Michael Cullen treats Keith Locke. He brought the guy almost to tears when talking about his family. That is what Michael Cullen did. I say to the Greens that if those members are their friends, I hate to think who their enemies are.

That is what ordinary New Zealanders are asking today, as well; they are asking who their enemies are when it comes to trying to keep their household budgets intact. I will tell them: it is the Labour Government. Interest rates are going through the roof, and this Government does not understand and does not care. After 9 years on a Prime Minister’s salary, Helen Clark does not care about the pressure of interest rates on ordinary New Zealanders. She does not care either about the price of cheese going through the roof.

Hon Bill English: She doesn’t know.

Hon TONY RYALL: She does not even know. I bet you, she does not even know. This Prime Minister, who when asked about interest rate increases and the pressure on New Zealand families, could say only that interest rates were not going through the roof. That is all she had to say. But they are going through the roof; they have gone up by 25 percent in the last 2 years, and that is absolutely incredible. For people on a mortgage of $250,000, Bill English says that means an extra $133 a week. That is an awful lot of money.

In talking about health issues, we want the Auditor-General to look at what has been going on at the Hawke’s Bay District Health Board, because the report is a whitewash. It does not deal with the involvement of management, it does not deal with Annette King’s involvement in the Hawke’s Bay District Health Board issue, and it does not deal with the whistleblower’s concerns.

But I tell members that there will be further investigation into this matter. It will be just like the “lying in unison” inquiry whereby Mr Buwalda carried out an investigation and said “Oh no, nothing has been going on.” Then the Ombudsman investigated and said that nothing was going on. But in the third investigation the Ombudsman discovered that there had indeed been “lying in unison” in the Immigration Service under Lianne Dalziel.

We can look at the Ingram inquiry. Do members remember the Ingram inquiry? The first inquiry of the three was the New Zealand Immigration Service inquiry, which stated that there had been a lot of inquiries but nothing to worry about in terms of Taito Phillip Field’s electorate office. Then we had the second inquiry—the Ingram inquiry, about which the Prime Minister said it found nothing but a person trying to help others. That is what she said, that the report found nothing but a person trying to help others. Then the third inquiry on this matter, with Taito Phillip Field, was referred to the police, and now we know that criminal charges are following. So under Labour, there always has to be three inquiries until the facts come to light.

We have had the McKernan inquiry on the Hawke’s Bay District Health Board. We know there was a McKernan inquiry, because Mr McKernan, the Director-General of Health, met with members of the Hawke’s Bay District Health Board and told them that the file had been gone through but that “nothing remarkable” had been found. That was the McKernan inquiry; the director-general concluded that “nothing remarkable” had been found.

Hon DAVID CUNLIFFE (Minister of Health) : I will begin today by reflecting on the definition of a word we often use but sometimes do not think about. It is the word “integrity”, which comes from the verb to integrate or to keep together, to join up, to be one whole. It is a word that nobody is using about John Key, because John Key simply cannot take a position and stick to it.

Lesley Soper: Slippery.

Hon DAVID CUNLIFFE: He is slippery. He is slippery, but let us understand why he is slippery. He is slippery because he does not do strategy. He is a position-taker; he is a trader. It is OK for people to change their positions, but if they do not have a consistent strategy then others will not trust them. We live in turbulent times; we had Bear Sterns go to the wall last week. Who does the public want to trust? Do they want to trust people like Helen Clark or Michael Cullen, who have their heads right across the portfolios of Government, and who ooze integrity? Or does the public want the phone to go at 3 o’clock in the morning and to have a bloke pick up the phone who did not know what his position was when he went to bed the night before? Slippery John—let us give—

The ASSISTANT SPEAKER (H V Ross Robertson): No—

Hon DAVID CUNLIFFE: That was a quote, Mr Assistant Speaker.

The ASSISTANT SPEAKER (H V Ross Robertson): I do not care whether it was a quote. The reality is that it is a personal reflection, under Standing Order 116, and also under Speakers’ rulings 26/6 and 26/7 as it can be referred to as a nickname. The Minister will use the member’s proper name.

Hon DAVID CUNLIFFE: Mr John Key has been described as slippery by the media, and with good cause. He slipped up on New Zealand’s Fast Forward programme, for two reasons—firstly, he cannot tell a core constituency if he falls over it, and, secondly, he cannot tell the difference between interest payments and a capital drawdown. He said that it was interest-only, even though the policy was that “We will spend the lot on agricultural research.” He needed to be more decisive, so he took positions on Air New Zealand and on Auckland airport. But it took him eight goes to get to “Um”—eight goes to get to “Um”. He is not the kind of guy people want to pick up the phone at 3 o’clock in the morning when there is a global meltdown: “Oh, Bear Sterns has gone to the wall—um.” If he was to be asked what he would do to free up liquidity, his answer would be: “Um.” When he was asked whether he would have gone to war in Iraq, he answered: “Um—well, no; well, yes.” Here is the bit I like: “No, that was never my position.” That is interesting, and that is different, because it crosses the line between position-taking and forgetfulness—which is kind of forgivable—and that word we started with today, which is “integrity”.

Integrity is what the public want, at the end of the day. They do not ask much of politicians. They want someone with half a brain who works hard and who is basically honest. John Key has half a brain, but he really, really tests the honesty test when he slips and slides over the truth like that. Well, at least he is doing better than Tony Ryall—Tony “the mouse” Ryall. Why is the media calling him “the mouse”? It is because he has been leaking confidential reports inside the House for the last month. And what is he doing outside it? He is slamming his office door in the face of TV cameras and hanging up on Radio New Zealand National journalists. Do members know that Tony Ryall has been banned from Radio New Zealand National for 2 weeks? Its journalists will not interview him, because he will not pick up the phone and answer their calls. Why? It is because he is afraid that he might be asked—

Simon Power: I raise a point of order, Mr Speaker. I think that the Minister, despite the brilliant eloquence he has been engaged in for the last 3 or 4 minutes, knows that bringing a member’s courage into question is outside the Standing Orders.

The ASSISTANT SPEAKER (H V Ross Robertson): It was borderline, but I will ask the member to desist, because if he does bring in courage, then it is a personal reflection.

Hon DAVID CUNLIFFE: I withdraw the word “afraid”. But I would like to go to the integrity of the member’s position, because so weak is his case on the Hawke’s Bay District Health Board—which, by the way, everybody, including the people of Hawke’s Bay, now knows because there is 200 pages’ worth of proof on the table—that the best arguments he can muster about that district health board come not from the independent review but from the Ingram inquiry. That is fantastic—it is the wrong case. That was to do with Taito Phillip Field; it was not the Hawke’s Bay District Health Board. I do not think that Taito has ever been to Hawke’s Bay—

The ASSISTANT SPEAKER (H V Ross Robertson): The member will use the member’s full name.

Hon DAVID CUNLIFFE: I do not think that Taito Phillip Field has been to Hawke’s Bay, and that matter is totally irrelevant. Let us compare Mr Ryall’s position on the Hawke’s Bay matter and his denigration of the Director-General of Health with the National Party’s position on Madeleine Setchell. In the case of Madeleine Setchell, did National members say that it was OK to denigrate a neutral civil servant?

Hon Darren Hughes: Oh no, it was terrible.

Hon DAVID CUNLIFFE: No, it was terrible. But is it OK to denigrate Stephen McKernan?

Hon Darren Hughes: And Ian Wilson.

Hon DAVID CUNLIFFE: And Ian Wilson? Oh, those members say that doing that is fine. I say to Mr Ryall that he, like his leader, should get some integrity.

ANNE TOLLEY (National—East Coast) : I will start today by reading the comments of a principal with 20 years’ experience who is retiring from education because of the bureaucracy in the system. He stated: “I am well qualified to tell you what is wrong with the system because it is not doing its job any more.” He talks about the Ministry of Education staff hiding in their big, new offices and delivering less support to schools than they did 20 years ago. He says that the ministry is four times larger and delivers less, that the Government bureaucracy increases the cost of running our schools, and that the ministry does not trust schools or principals.

I want to talk today about the mess that this Government has put its payroll services in—that is, the payroll services that pay our teachers up and down the country for the fantastic job they do. What does it say about an organisation when it cannot even pay its staff correctly and on time? Six of my local principals contacted me 2 weeks ago. One had sent in information about seven staff to the payroll people in December of last year, and was told that the emergency pot had run out. So many other people had had to go to the emergency pot because the payroll services were so poor that the emergency pot had run out. The solution suggested was that the principal should break the law and pay the staff out of the school’s operations grant, with no guarantee that that money would be refunded.

This Labour Government is all about growing the number of public servants. It is about growing processes and growing forms. It is not about growing public services, and that is what National is about. Since the year 2000 the number of teachers has increased by 12 percent, but the number of bureaucrats has increased by 40 percent. What do they do? [Interruption] That member says that we need them. Well, I ask what they do. I have emails here from principals who say they are at their wits’ end over this continual paper war. Once they would have had to send in one piece of paper to change a staff member’s pay, but now there are 28 forms—28 forms! They have to spend their day ticking boxes and sending forms backwards and forwards. One principal told me that he had to submit his form seven times. Another principal stated: “We are now in week 7 and as yet have not had one accurate staff payroll run.” What are those 40 percent extra Ministry of Education bureaucrats doing if they cannot get the payroll services for their staff right?

Principals are tearing their hair out up and down the country. What is the Government’s response? What will it do about it? Do members know what the Government has said? It has said that it is easy, and that it will set up a payroll reference group to consult with the sector to see what it can do to fix it up. I ask where the Government is saying that it is terribly sorry, that it will get the pay right next week, and that it is very sorry because these people have mortgages and bills to pay and are relying on that salary to feed their families. No, there is none of that. The Government says that 99 percent of teachers have been paid correctly. They may have been paid correctly, but for some of them it has taken 7 weeks to get it right.

What the Government is doing with all those extra bureaucrats is creating 28 different forms. Principals tell me that if they miss ticking one box on one of those forms, then no one is there making a decision about that. No one is there saying that this is a primary teacher’s form and the principal has not written the “P” in the box that designates it as a primary teacher’s salary, so the ministry sends it back and the principal has to resend it after filling in the box with a “P”. None of these bureaucrats uses any discretion. This Government is all about growing the number of bureaucrats. It is not about looking after the man or woman on the street, and it is certainly not about looking after its own employees. I ask what business in this country could get away with not paying its staff, and what business could ever get away with not paying its staff correctly or on time. What business would get away with not paying staff correctly for 7 weeks? Would the unions not be in there and be down on that business like a ton of bricks? I ask where the unions are here. Where is the Government looking after its employees in this case? This is an outrage.

I seek leave to table the list of education service payroll forms that principals now have to fill in for payroll purposes.

  • Document, by leave, laid on the Table of the House.

KEITH LOCKE (Green) : Yesterday Parliament debated the current situation in Tibet, and I thank the Prime Minister for initiating that debate. New Zealanders have been horrified by the Chinese regime’s crackdown on Tibetan protesters and they want our Government to speak out strongly against it. I want to query one of the Government’s reasons for not taking a clear stand on the side of the Tibetan people, and it is confusing the issue. Phil Goff on Television One last night, when debating with me on Close Up, said that he had seen reports of Chinese nationals and Muslims being stoned and stabbed to death and that the violence had to stop on all sides, and he used that as an excuse for not taking a clear stand on the side of the Tibetan people.

Of course, no party in this House favours violent protest. The Dalai Lama has, rightly, spoken out against it, including as recently as yesterday, and has even threatened to step down as the recognised leader of the Tibetan movement if it continues. But it is very disappointing that Mr Goff used the fact that there might have been violence against ethnic Chinese as an excuse to take a neutral stand over whether to put himself firmly on the side of the Tibetan people when looking at the situation as a whole. We cannot put a ruthless, one-party regime—which China is, as it does not brook any dissent—on the same level as some Tibetan protesters getting out of hand and conducting violence, after decades of being abused as Tibetans and having their culture crushed. Back in the times of apartheid it was clear that the black movement, wrongly, used violence on many occasions. But the Labour Party at the time was clearly on the side of the black people and against those apartheid rulers. The same would be the case in many other parts of the world—for example in East Timor. The Fretilin movement also committed atrocities during its liberation struggle. But now when we look back on it—and the New Zealand Government was not too good on that at the time—most people would probably think they should have been clearly on the side of the East Timorese people, the people of Timor-Leste, and against the Indonesian occupation.

That is why a lot of New Zealanders got rather upset, because there is a huge reservoir of support for the Tibetan people in New Zealand. The Buddhist religion is growing, and a lot of it is from the inspiration of the Dalai Lama and Tibetan culture and religion. We have to be clearly on the Tibetan side and use the lead-up to the Olympics—and people around the world are doing this—to focus on human rights in China, including in Tibet. I think we can actually bring about change.

I am actually quite optimistic, because I know that within China there are many millions of Chinese chafing under the one-party rule of the Communist Party of China. They do not like their Internet being censored or their emails being surveilled by thousands of members of the State apparatus, etc. We can force change, in terms of helping workers to get labour rights, for example, which is quite important, because if the Chinese society and economy are to develop, then they need more independent trade unions, more democratic management of the economy, less corruption, and more transparency—all of those sorts of things that go with a democratic, accountable society. We can help that by putting pressure on China during the lead-up to the Olympics.

Signing a preferential trade agreement during this period is particularly wrong. I do not look forward to seeing the images of our Prime Minister and the Chinese Prime Minister shaking hands and smiling together, if the backdrop is truckloads of Tibetans being carried away. I refer to this morning’s Dominion Post where it states: “Dozens of Tibetan prisoners were paraded on military trucks in the Tibetan capital, with their heads bent and wrists handcuffed behind their backs, as soldiers from China’s People’s Liberation Army tightened their grip on the city.” That is not the backdrop we want for our Prime Minister in China in the lead-up to the Olympics, which is why the Green Party is calling for a reconsideration of that April signing of the free-trade agreement.

In question time I talked about some of the horrific examples of human rights violations in China, some of them relating to the Olympics, like the case of Ye Guozhu.

Hon CLAYTON COSGROVE (Minister of Immigration) : As I am wont to do from time to time, I have looked around the old Collins English Dictionary. My colleague Mr Cunliffe has a penchant for quoting definitions, so I took up the challenge. I wanted to find out the definition of the word that is used by media about an individual: “slippery”. I am allowed to quote from the Collins English Dictionary. I do not think there is a Standing Order that prevents me from doing that. The definition of “slippery” is “liable to slip from the grasp, a position … not to be relied upon; … a slippery character. … liable to change; unstable. the slippery slope … a course of action that may lead to disaster or failure;”—and my personal favourite—“cunning and untrustworthy.” That is the Collins English Dictionary definition of the word.

Dr Jonathan Coleman: I raise a point of order, Mr Speaker. I would refer you to Speaker’s ruling 41/3, and in particular to the point about implication. I think we all know what the honourable member is trying to imply. I suggest that we will be in for months of disorder in this Chamber if this tone of debate continues. Mr Assistant Speaker, I invite you to look at that Speaker’s ruling and to consider carefully whether Labour members speaking in the debate today are indeed making an implication about a member. We know the member to whom they are referring. I invite your ruling, but I say that if this continues, then things will get very hot in this Chamber for months to come.

Hon CLAYTON COSGROVE: I have not referred to anybody by name; I simply read out a definition. If I am wrong, then I will heed your ruling, Mr Assistant Speaker, but I would be grateful if you could point out where in the Standing Orders it states that one cannot refer to something out of an innocent and benign document such as the Collins English Dictionary. If we are about to rule out anybody referring to a dictionary definition of a word simply because that member over there—pedantic though he is—does not like it, then I think we are in serious trouble.

Dr Jonathan Coleman: The key point here is the point of implication. Although the honourable member says that he is not referring to a member by name but just to a dictionary quotation, if we look at Speaker’s ruling 41/3, we see that the key point in that ruling is that there is an implication. There is a clear implication being drawn by the continued reference to terms in dictionaries about a specific word. Members opposite are trying to draw an implication about the leader of the National Party, and I warn you, Mr Assistant Speaker, that things will get pretty hot if they continue to do so.

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the member. I have looked at Speaker’s ruling 41/3 and it does not state anything about implication; it is referring to something else. But I caution the member on my right who is speaking, because it is an imputation. Members cannot get around the rules against unparliamentary language by a circumlocution, and that is what the member is trying to do. I ask the member to be very careful, because it leads to disorder.

Hon CLAYTON COSGROVE: I also want to give another quote. I hope we will not rule out the Bible, because going back—as Mr Swain reminded me—to our joint Catholic roots, I am reminded of the Book of Proverbs 26:11. I hope that we are not going to rule out the holy book, but National members might have a crack at doing that. The proverb states: “As a dog returneth to his vomit, so a fool returneth to his folly.” Today we have concentrated on and seen the proverbial return to his foolishness time after time. We have seen National members opposite who have flip-flopped, back-flipped, um and ah’d, tripped, belched, and done a few other things, I suspect, to try to prevent themselves from answering any particular question.

Let us look at the record on KiwiSaver. We did not rule out the good book; that is great. The National Party and Mr Key—whom the media have referred to by various guises and various names, but I will not use them out of politeness towards the member opposite’s sensitivity—voted against KiwiSaver 40 times. They said: “It is a terribly designed system.” Then Mr Key said that National would keep KiwiSaver if it was in Government.

Then, not 24 hours ago, the other conga eel of the National Party, Mr English, said that National may tinker with the people’s pension scheme—that is, KiwiSaver—but National is so smart, so smug, and so arrogant that its plan is to not tell people now so they can scrutinise what it will do. Oh no, he put a bit of petroleum jelly round that one. He said in a smug and arrogant way that National will tell the people what it plans to do with the people’s KiwiSaver scheme, if it becomes Government, at 5 minutes before midnight before election day. What is the plan?

I have to tell those geniuses over there that the communities are not silly or stupid. If National members think they can slip their policy under the carpet 5 minutes before election day and that people will not scrutinise it and know what their plan is, then the members on that side of the House are very ignorant and silly people.

Then we have the other one, which is Mr Key’s comments about wanting to raise Government debt. But of course Mr English, on the other hand—using a conga eel routine again—slides out of that one. Mr Key has called for a raising of Government debt to 25 percent of GDP, even though it is 20 percent today and it was 35 percent under the previous National Government. He called for it in a Scoop interview on 16 June 2006, but then Mr English came out in the Press on 8 March 2008 and said that raising Crown debt to 25 percent of GDP “has never been one of our policies”. Yet not last week, I think, Newstalk ZB caught him with the proverbials round the ankles in political terms. He said: “We have always said that we have a credible programme of tax cuts, which we phase in to match macroeconomic conditions, ah, we have always said we aren’t that worried about, um, whether the Crown needs to borrow a bit of money.”

I ask members to tell me whether a bit of crude oil has not been applied to some of these arguments. The old stunned mullet over there is now very quiet. It is the old routine about the turkey with its head cut off. Those members should try to tell me whether a bit of the crude oil has not been applied. But, you see, the people and the communities are not silly. They know about the weasel words; they know that Mr Key and Mr English talk out of both sides of the mouth. What the people want is for them to up the ante. “Old Smug” is over there, grinning away like a Cheshire cat. I challenge the old cigar smoker over there to get on his hind legs and tell us what they will do and to allow people the privilege of challenging and scrutinising their policy.

Dr PAUL HUTCHISON (National—Port Waikato) : In no coincidence to the previous speaker, I looked in the Oxford Dictionary and I see “strut: pompous or affected”, and that is proceeded by “strudel: a confection of thin pastry rolled up round a filling and baked”.

The ASSISTANT SPEAKER (H V Ross Robertson): I would just like to ask the speaker to consider that he too is using an imputation, and members cannot get around the rules against unparliamentary behaviour or language by circumlocution. I also refer him to Speaker’s ruling 51/4. Mr Cosgrove might like to look at that as well.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I accept your ruling, absolutely. But could I make a plea that you allow the member to continue with what he is saying, because it is reasonably hilarious and it shows him up for what he is. I take no offence, and I encourage him continue.

The ASSISTANT SPEAKER (H V Ross Robertson): The member is trifling with the Chair.

Dr PAUL HUTCHISON: I will not continue along that vein because it is clearly futile, but I add that the next word is “struthious: of or like an ostrich.” Despite that, over the last 8 years we have seen reform after reform in tertiary education perpetrated by this Labour Government. We know that on average those reforms have been called every 2 years and they have been associated with the most extraordinary waste of money that New Zealand has ever seen—about $1 billion. There was twilight golf, homeopathy for pets, pendulism, and the singalong. They were mainly brought in by former Minister Maharey, but were presided over by none other than Minister Cullen. Not only were those excesses, but also the bureaucratic costs of those reforms were calculated at about $419 million and totalled $1 billion of precious education resources wasted.

What does the Labour Government do now after it has run out of all these reforms? It has brought in some more reforms. We are deeply concerned about them. At select committee this morning 2006-07 was described as the busiest year ever for the Tertiary Education Commission, yet in that year the Tertiary Education Commission had a staff turnover of 25.5 percent. This is the organisation that the Labour Government has charged with bringing in the biggest reforms ever in tertiary education—reforms it says are so crucial—yet the commission has a staff turnover of a quarter of all personnel. Not only that, but also we have seen the chairman of the Tertiary Education Commission leave, the Minister for Tertiary Education has left twice, and the chief executive officer of the Tertiary Education Commission is about to leave in a couple of months’ time. There is no one left to take responsibility or accountability for these reforms that the Labour Government regards as being absolutely crucial. This is utterly typical of a Labour Government in disarray—a Labour Government that has failed to institute good governance or good succession planning in an area that it suggests is absolutely vital.

Let us take a look at the so-called tertiary reforms themselves. The Government has just announced that it is going to undertake a review of land-based agricultural education. I am sure those members on the Government side of the Chamber will know that skills in agriculture are badly wanting. But this Government has decided that before it brings in the review it will take away hundreds of equivalent full-time employees from some of our specialist educational polytechs such as Tai Poutini Polytechnic, Aoraki Polytechnic, the Southern Institute of Technology, and Telford Rural Polytechnic. It is totally illogical to have the review after the Government has caused disarray in the sector. What is even worse is that these very important agricultural equivalent full-time employees are going to institutions that are not necessarily going to use them in agriculture, even though there is an incredible need. We have had no confirmation from the Labour Government that that is the case. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I am on my feet. I am sorry to interrupt the member, but would the members on my right please look at Speakers’ ruling 57/3.

Dr PAUL HUTCHISON: Even further, we have a situation that defies belief where we have specialist agricultural institutions such as Telford, which the Tertiary Education Commission says is actually doing a good job, losing their agricultural equivalent full-time employees to institutions such as the Western Institute of Technology up in New Plymouth, which has been chronically failing, has been under a Crown commissioner, and gave up agricultural teaching 4 or 5 years ago. It is totally and utterly illogical.

Hon SHANE JONES (Minister for Building and Construction) : Kia ora nō tātou. Greetings to you, Mr Assistant Speaker, and to all of Aotearoa. The man who just sat down has a new career, possibly in Hawke’s Bay or in the medical system, dispensing anaesthesia. The man is incapable of holding an audience. He has just given a dissertation on the combination of dung and manure in South Island pasture. He is an expert on it because he embodies those qualities, and although his rhetoric was very dry it will be capable of putting people to sleep up and down the country.

When John Key inflicts himself again on my Ngāpuhi whanaunga and wanders around rubbing noses with Tame Iti, Ngāpuhi will have a new waiata for him. It is a waiata that belongs to the social progressive justice movement of the United States of America, and comes from Simon and Garfunkel. It is called “Slip Sliding Away”. Line one: “Slip sliding away”; line two: “Slip sliding away”; line three: “You know the nearer your destination, the more you slip sliding away”.

John Key mistakenly thought that by wandering around the country, tacking as if he is looking for foul wind or a clear wind by emulating and filching our policies, he would convince the average Kiwi that he had a future leading our country. Boy, has he fallen flat and disappointed a number of people—not least the shadowy influences that brought him into politics. They believed that he represented a fresh, affable, personable countenance, but lurking deep down are the monsters that really drive the position of the party opposite. They are people who are reflected in the stories of The Hollow Men.

John Key is wandering from one post to the other. What a contradiction. He endeavours to flatten his nose in the company of Tame Iti one week, and then he is cuddling Roger Douglas the next week. He has two options, and that is what our people need to bear in mind. Firstly, he will be trying to seduce our average Māori voter into believing that the Māori Party has a future by cuddling up to National. What will be spawned—the mokopuna, the name, the breed—beggars the mind. And if that is not good enough, he is quietly happy that the ACT party is endeavouring to practise something that belongs in theology—that is, rising from the dead—by bringing Roger Douglas back into this House. The majority of the voters were not even out of school when Sir Roger Douglas was practising his politics. His positions—his politics—belong in a chapter of our history that has long since gone.

There is a person who I feel does deserve mention in this House this afternoon and that is the member who currently holds the seat of Rakaia. Now to the Ngāpuhi-s the word “rakaia” means to lock up, and Mr Connell has definitely been locked up. But let no one forget his doing in bringing Don Brash down—of course Don Brash was down in another fashion, but that is another story—in delivering the head of Don Brash to his former friends Mr English and Mr Key. And what did we hear? Poor Mr Connell expressed the sentiments of a large number of parliamentarians and invited a journalist to go rapidly to the toilet. No, the man is derided, the man is embarrassed, the man is attacked by Mr English who disingenuously complains that he is not showing good form in his connections with the media.

In actual fact, Mr Brian Connell was the single politician who brought to the attention of the media and the nation the nature of Don Brash’s activities, etc. And how is he being rewarded? OK, he is going away on a tipi haere overseas, but boy, what a very sad chapter to his final steps. I really liked the guy; he enjoyed our company overseas and I wish him well, into the future. But he is learning a story that one cannot trust either of those two guys. After doing the hard man’s job he has been sent out either to grow onions or to study the pasture and dung combination reflected by the former speaker.

A lot of the ideas that we will be taking forward to our voters are being purloined and misrepresented. Of course we have Paula Bennett, who is sitting just behind the seat generally occupied by the “pink batt”, wearing green today, reflecting the fact that she is solidly behind Lynne Pillay’s bill to save the moths, the bugs, and the various other ngārara occupying the Waitakere Ranges. She has actually forgotten that hundreds of thousands of New Zealand families have flocked to make use of the 20 hours’ free preschool care, and the value of that outstrips any tax cut that John Key or Bill English could ever deliver to those needy New Zealand families. Paula Bennett disgraced herself and now she is embarrassed by what she said. Kia ora tātou.

JO GOODHEW (National—Aoraki) : The member opposite who has just resumed his seat should spend less time studying the words of popular music and more time studying the dates when various policies were released. If he did so he would realise that many pages of policy releases have been made first from the National side of the Chamber and not from the Labour side. In fact, National loves the way Labour loves our policies. I have a list of such policies in my office and I will share it with him if he wishes. There are 11 or 13 policies; I am not sure which.

Yesterday we started the financial review debate, and it was very timely because last week we heard from John Key about the growth of bureaucracy in the last 8½ years. The Ministry of Health’s financial review states there are now 1,263 fulltime-equivalents in the ministry, and since 2000 there has been an amazing growth in the number who are paid over $100,000. Back in 2000 there were 94 being paid more than $100,000; now there are 194. And how do the taxpayers of New Zealand feel about that? I will tell members how they feel; they feel really ripped off. They do not personally know these people in the Ministry of Health but they hold them accountable for the care they are not receiving, they hold them accountable for the fact that waiting lists are not getting any shorter, and they hold them accountable for the fact that they find it hard to enrol with local general practitioners.

Let us have a look at the workforce issue. For example, New Zealand is ranked highest in the OECD—wait for it—for the proportion of overseas-trained doctors. That ranking is not for our own doctors but for the proportion of overseas-trained medical professionals. Foreign-born doctors number 47 percent of our medical workforce, foreign-born dentists number 30 percent, and foreign-born nurses number 23 percent. We have a huge reliance on immigrant health professionals. But wait—there is more. We are also near the top of the leader board in our export of nurses, and that is handy because we have 7,698 foreign-born nurses working here. It is a wonderful match—wait for it—for the 7,564 New Zealand-born nurses who live overseas. What a huge loss to New Zealand—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

JO GOODHEW: What effect is that having? Down in Dunedin 28 beds have been closed, not because there is no one to fill them but because there are no nurses to look after patients. That is happening not just in Dunedin; it is happening in Wellington as well. Forty beds are closed in Wellington Hospital because there are not enough nurses, yet we hear about doctors making up beds in Auckland. We hear about junior doctors being in short supply in the Wairarapa, and in the Wairarapa we find that nurses are being trained to do doctors’ work. There is $5 billion extra, but the Government can claim it is raising numbers in the bureaucracy, not in the front line. [Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Can I again ask members on my right to look at the clauses of Speakers’ ruling 57/3, especially the one about a running commentary of interjections. If members wish to make speeches, they can do so later.

JO GOODHEW: It is clear that I am hitting a nerve over there. Labour members do not want the public or other members to know this about the Labour Government. They do not want New Zealand to understand where the money is going to. It is going to the bureaucracy, not to the front line.

Again and again New Zealanders will tell us they cannot get a general practitioner. They cannot get dental care for their children, and dental decay is worsening all the time. They cannot get into hospitals because waiting lists are getting longer and longer. We hear stories all around New Zealand that make us realise that our reliance on overseas-born professionals has got way too high. It makes us realise that this Government should stop growing bureaucracy and start growing the front line much, much more.

The high and mighty attitude of this Government, and the Minister who sits over there, is certainly a head-in-the-sand attitude as well. It is an attitude that causes New Zealanders not to see the health system as a good use of their taxpayer money. They do not see the health system through the same rose-tinted spectacles that the Minister wears. They see an exodus of those health professionals who have been wonderfully well trained here in New Zealand, and they know that New Zealanders would prefer to be cared for by New Zealanders.

CHARLES CHAUVEL (Labour) : I will talk a little bit today about KiwiSaver because it is a policy that I am really proud of. It was a great thing to be able to sit on the Finance and Expenditure Committee and watch KiwiSaver Mark II come through that committee into this Parliament. It is fantastic to see the take-up and the success that that policy is enjoying amongst New Zealanders. We heard today that nearly 500,000 Kiwis are already saving through KiwiSaver, and over 100,000 young people have joined KiwiSaver despite the Leader of the Opposition’s confident predictions that they would not join it. So that is a wonderful thing. Also, the KiwiSaver scheme has just had an evaluation report released last Thursday that shows it is attracting members from across all age groups, all ethnicities, and all income brackets, and Kiwi savers are expected to become even more diverse as more of them join the scheme through automatic enrolment when they start a new job. It is very significant that on 1 April employers who are not already contributing will start to contribute to the fund at 1 percent. That really marks the sustainability point for this scheme because it is the point at which it becomes truly tripartite, and that is a very important thing.

I ask the National Party what its policy is on this fantastic scheme—KiwiSaver. Bill English backed away from issuing a policy at a superannuation conference yesterday. He was supposed to be giving a speech that was advertised as an opportunity to hear National’s policy stance on KiwiSaver. But what did the National Party’s spokesperson on finance say at the beginning of his speech? He started his speech by saying there would be no announcement on his party’s policy on this popular scheme. National’s slippery stance on KiwiSaver is looking more and more foolish by the day. National has voted—I have counted the votes in Hansard—40 times against KiwiSaver. It is the Muldoon years all over again. John Key predicted a low take-up, but it was explained that he was always for KiwiSaver—despite him saying back in 2005, during the election debate, that it is a terribly designed system. Well, now he is not sure whether he supports it. That is just more indecision from Mr Key. What he says about the scheme will depend on whom he is talking to. What Kiwis need is clarity on the question of retirement savings, not slipperiness from the National Party. We have put in place a sustainable scheme that is good for this country’s future. I call on the National Party to do the right thing and follow the nearly half a million New Zealanders and sign up to the scheme.

I will talk about debt as well, because that is the other interesting debate that is going on at the moment. I am very proud of the fact that Labour has reduced debt to prudent levels. We have had the longest period of economic expansion since World War II. The Government has been able to use that expansion to reinvest in public services and infrastructure, to deliver tax cuts for families, businesses, and savers, and to drive down Crown debt. As Clayton Cosgrove said earlier in this debate, Crown debt now stands at less than 20 percent of GDP. That is down from over 35 percent 8 years ago, when we were paying $2.3 billion per annum that we did not need to pay and could have been spending on schools, hospitals, roads—and we are spending it on those things now—just to service debt. That is why it matters. At the same time that we have been getting debt down, we have been investing heavily in health, education, roading, public transport, and in providing over $4 billion per annum in tax relief for families, businesses, and savers. We have pursued a low-debt policy because we want to build a buffer against fiscal shocks in case we are entering darker economic times, and we want to protect future generations. In providing that safety net, that is exactly what we have done. If a downturn does occur, Labour will not have to cut superannuation, as Bill English did when he was the Treasurer on 1 April 1999.

We need to know what the National Party’s policy on debt is. Mr Key has called for the raising of Government debt to 25 percent of GDP, but Mr English says that that has never been one of National’s policies. He says that lifting Crown debt to 25 percent of GDP, which is what Mr Key says he is comfortable with, is not something National would regard as compatible with competent economic management—and it is not, because lifting Crown debt to that level would add around $700 million a year in finance costs alone, which is about what the Government has invested in new health services for each of the last 2 years. It is the Labour-led Government’s commitment to keeping our debt levels low, and our refusal to borrow for today’s consumption, that best demonstrate our belief in what New Zealand is truly capable of. Thank you.

  • The debate having concluded, the motion lapsed.

Financial Review Debate

In Committee

  • Debate resumed from 18 March on the Appropriation (2006/07 Financial Review) Bill.
Ministry for the Environment (continued)

JACQUI DEAN (National—Otago) : The financial review for the Ministry for the Environment highlights the fact that the Government’s management of New Zealand’s freshwater resources has some major deficiencies and is putting our clean, green record internationally and domestically at risk.

Hon Trevor Mallard: Stop attacking the farmers.

JACQUI DEAN: The Minister does not want to hear the truth, but the Minister must hear the truth—

Nathan Guy: I raise a point of order, Mr Chairperson. It is my understanding that the Minister in the chair cannot interject.

The CHAIRPERSON (Hon Clem Simich): The preference is that the Minister does not interject, and I am sure he has taken that on board.

JACQUI DEAN: Thank you, Mr Chairman. I am sorry the Minister feels he needs to embark on an outburst at my speech. I am sorry he does not actually like the truth and does not like what he has to hear today. None the less, here I am for a further 3 minutes to tell the Minister the truth. The truth is and the facts are that water quality, particularly in lowland streams, is deteriorating under his watch. Water quality measurements in places like the Waikato, Canterbury, Otago, Southland, and other places in New Zealand show that the proportion of streams that have poor water quality is increasing, and there are a number of water quality hot spots throughout New Zealand. Places like Lake Taupō, the Rotorua lakes, and Lake Ellesmere are all examples of poor or deteriorating water quality, all under this Minister’s watch. The Government’s record in water management has got so bad that the Government’s policy response to it has been dubbed not the Sustainable Water Programme of Action but—

Hon David Carter: What’s it called now?

JACQUI DEAN: Well, it was interesting. At the New Zealand Water and Wastewater Conference in Rotorua last year, one of the major conferences on water, the senior Ministry for the Environment policy analyst got up and put up on his projector a slide with the title: “The Sustainable Water Programme of Inaction”.

Hon David Carter: Sounds like Mr Anderton must be doing it.

JACQUI DEAN: Well, I think that that little slip of the tongue, that little bad day at the office, said it all on this Government’s management of fresh water in this country.

So the Government’s call for sustainability just rings a little hollow—and I am sure the Minister does not want to hear this either, but he has to—when, after 8 long years in office, the Government has presided over a worsening deterioration in water quality. The water in many iconic lakes and rivers is unfit to drink or swim in, and there is a water allocation system that is failing a number of over-allocated catchments around New Zealand.

Much of mid-Canterbury water and groundwater is over-allocated, as are a number of catchments in Otago and further south. Many consents to take water on the Waitaki, for example, are still called in following the Government’s bungled and inept handling of the Waitaki water allocation framework, which came about as a result of Project Aqua by Meridian Energy. This Government has a very poor record on the environment.

Hon TREVOR MALLARD (Minister for the Environment) : I thank the member for her contribution to highlighting what is a very important issue. Jacqui Dean has taken a proper approach to the issue. Although there was a lot of rhetoric in her speech, she did highlight a very, very serious issue, which is the quality of water and the long-term problems we have had in New Zealand. It is something that has been one of my main focuses as Minister for the Environment.

I think all of us—people of our generation—know that there are places where we could swim and even drink from when we were young that we would not let a dog swim in now. That sort of change over quite a long period of time is very, very serious, and it is something we have to work on reversing.

In some places a lot of progress has been made. There has been a lot of progress on point discharges, especially in urban areas. In some of the clean-up there has been progress, as well. I invite the member to have a briefing or to visit the Waiwhetū stream and see the clean-up there of probably the dirtiest water in the country. It is a stream in the middle of an industrial area where, for about 30 years, chemicals were dumped through stormwater into a stream.

Jacqui Dean: I was part of the project. I’ve cleaned streams.

Hon TREVOR MALLARD: The member would not get in this stream to clean it. It is so dirty and so infected that the member would not go near it. In fact, I tell the member that that stream—the Waiwhetū stream—actually has lead in the sludge coming out that is of mineable level. If that stream was slightly bigger it would be a source of income because one could mine it for lead. A lot of other heavy metals are involved in it, too.

After years and years—decades—of inaction by Governments on both sides of the House, we are finally getting on with cleaning up that stream and a number of others. For example, work is going on in the Taupō catchment. I think most people are aware that a lot of nitrates are going into the lake, and that this has to be reversed. A large amount of Government funding is going into a trust that is working to reduce nitrate levels.

But I tell members that it will not happen quickly, because nitrates that are used on the surface of farms now, around the western part of the lake—

Jacqui Dean: Is this your speech from earlier today?

Hon TREVOR MALLARD: I have made a number of speeches today on a number of topics—not so much on the western access. Some members care about Lake Taupō and the environment, and I tell them that even if we stopped now, for another 30-40 years nitrates will be flowing into Lake Taupō from those farms. It is important to work not only towards stopping it now but also on mitigation methods.

Clearly, there will have to be some policy changes over a period of time. We cannot go on intensifying farming in the way we have in areas where water is at risk. It is obvious to everyone who is concerned in the Waikato, for example, that the discharges going into that river cannot continue even at their current rates. Therefore, the intensification that has been occurring during recent years will have to be unwound, either by technology, new methods of fertilising, new methods of fixing fertiliser, or reducing stock numbers in some areas.

That will be hard because it will involve some changes in what people previously regarded as their rights on a particular farm. But there will be a question in the end over what is for the greater good of the country, that particular region, and the farmers’ neighbours. That will be policy that I will be prepared and pleased to lead this year, next year, and for the years after that.

  • Report noted.
Department of Labour

KATE WILKINSON (National) : I thought I would preface my speech this afternoon by reminding members of what the Department of Labour’s primary role is, and that is to improve the performance of the labour market. The report noted that the department has identified workplace productivity as the key to lifting New Zealand’s living standards and wealth.

I would like to concentrate for a moment on those issues of productivity. It is alarming to find that the report states: “Despite the department’s efforts to improve productivity, it was noted that New Zealand’s labour productivity growth in the measured sector has markedly declined since 2000;”. Today’s Independent talks about productivity in an article headed: “Productivity: It’s a hard road to hoe”, and we have heard that Statistics New Zealand is hiring 1½ people to work for 2 years on a feasibility study to determine whether it is even possible or feasible to measure public sector productivity. New Zealand appears to be deciding whether it is feasible, but we know the answer to that. The report says that a good start might be to measure productivity at the Department of Labour.

The Department of Labour has a website that includes references to workplace productivity. That website was last updated last year, on 6 December. The department’s website was last updated over 4 months ago, and I do not think that is a wonderful example of workplace activity. The Department of Labour seems to create groups. It had a Workplace Productivity Reference Group. Then it had a Workplace Productivity Working-group. But that working-group was established in 2004—4 years ago—and we still cannot measure public sector productivity in the Department of Labour. In fact, the most recent news item for the reference group was in April 2007—over 12 months ago.

If we measured productivity by the number of productivity work groups or productivity reference groups set up by the Department of Labour, then maybe the department would win the productivity prize. It is a sad state when the very department that is responsible for workplace relations is not bearing up to what it should be doing.

The Department of Labour is responsible for advocating good workplace practices. If members look at the financial review, they will be horrified to find that the number of personal grievance claims in that department alone has nearly doubled in 12 months. In fact, last year the cost of settling employment relations problems was $97,500. The year before, the cost was $7,000. That is a massive $90,000 more to settle the department’s own personal grievance and employment relationships problems—and this is the very department that is supposed to be advocating good workplace practices. One might like to suggest that it should be practising what it preaches.

Labour has spent so much of our taxpayers’ money, but it cannot tell us whether it has been effective, and sometimes it cannot tell us what it has spent it on because it just does not measure that productivity. This is not a new phenomenon. Back in 2005 the report to the incoming Minister—and I appreciate that it was not the Minister in the chair this afternoon, the Hon Trevor Mallard—cited productivity as a major concern, yet the numbers are absolutely dismal. Labour productivity growth has averaged a mere 1.4 percent per annum. By comparison, between 1990 and 1997 it averaged 2.6 percent per annum, between 1997 and 2000 it reached an average of 3.4 percent per annum, and now it is a paltry 1 percent. New Zealand’s productivity growth has markedly declined and that is a tragedy.

Hon TREVOR MALLARD (Minister of Labour) : I want to thank that member Kate Wilkinson for the opening she has just given us, and to give her, if she likes, a relatively simple explanation, because I think for that member it needs to be about labour productivity. When unemployment is rising, people who are in the lower skilled jobs and who are the least productive are more likely to get the sack, and when the National Government was in office that happened. When that happens—when the people who are less productive because their skills are lower and the machines they use are less sophisticated, get the sack—average productivity goes up, unemployment goes up, and average labour productivity goes up. When we have a Labour Government and unemployment comes down, a whole pile of people who have never had a job, who would not know how to work a sophisticated machine, and who are not in the professional category, get jobs, and average labour productivity is exactly—

Dr the Hon Lockwood Smith: What about capital productivity?

Hon TREVOR MALLARD: We will get to capital soon. What happens then is that productivity drops. Instead of celebrating the fact that more people have got jobs, that member is moaning about it.

Now having said that, I do not think it is good enough that many people who are coming into the workforce now, or who have been in the workforce for a number of years, have skills that are not adequate for the modern world. There are a number of reasons for it—probably the abolition of the Apprenticeship Act was part of it, and probably a very important part is that the National Party got rid of trade training, including Māori Trade Training and a number of areas like that. Our skill development, both in pre-workforce and especially within the workforce, was abysmal under the National Party. That is why we have had to have a massive growth in spending in that area and in the numbers involved. The number of apprentices has gone from almost none to, I think, 40,000 entering Modern Apprenticeships since we have been in Government, and there are a number of areas like that.

I do want to go back, away from some of the more general employment and training issues that the member referred to, and say that at some stage soon the National Party will have to front up. Its current policy, for example, is to cut back paid parental leave. Its current policy is to make the fourth week of leave negotiable—to take it away from workers and say “You’ve got to negotiate it.” Its current policy as far as sick leave is concerned is to cut back the eligibility for sick leave. Its current policy is to make a large number of changes to the Employment Relations Act, all of which go against the interests of workers. I was looking forward, in fact a number of people were looking forward, to Kate Wilkinson speaking, I think it was last week or the week before, when it was announced that she would be giving a comprehensive update on the National Party policy—

Charles Chauvel: The same as Bill English?

Hon TREVOR MALLARD: Well, the same as Bill English on KiwiSaver. She turned up, read from the research unit notes, and gave no policy at all. There are some things that I can say about that member. She is a relatively new member and not very experienced. But I can tell the member that when she promises an audience that she is going to give a comprehensive explanation of industrial relations policy, and it states that on the invitation, the audience thinks she is fraudulent when she does not do it. They think that member committed fraud. A whole pile of people, some of whom were silly enough to think that the National Party might have a chance to be in Government, turned up to listen. They were shocked. There were people who were not only from a left-wing perspective—

Kate Wilkinson: You weren’t there.

Hon TREVOR MALLARD: No, but I have had reports from all over the place on how poorly that member performed then.

DARIEN FENTON (Labour) : I am happy to take a call on the financial review of the Department of Labour. If I had taken a bet with my colleagues that the productivity figures for the 1990s would be wheeled out in this debate today, I would have won a lot of money, because there they were—those old tired figures about what happened in the 1990s. What is interesting about the National Party is that its members do not want to talk about the 1990s unless they think there is something good—and they think that the productivity figures for the 1990s were good. Well, as my colleague the Minister of Labour said, productivity is easy to grow if it is based on low wages, on high labour utilisation, and on low investment in skills and plant. Any fool can produce higher productivity on those measures. In fact, I reckon any sweatshop in any Third World country or developing country, or any organisation using child labour, would be able to show high productivity. With low skill and low wages, of course there is going to be high productivity.

But what National’s approach did not do during the 1990s was grow wages. It contributed to an almost nil wage growth in 5 out of 9 years during the 1990s. It contributed to a growth in the wage differential—which it now likes to whinge about—between New Zealand and Australia by almost 50 percent, and it did not grow our skill base; in fact, it shrank it. This Government has been running to catch up ever since. You did not encourage innovation, you did not do any training, and you did not even know what a high-quality workplace looked like.

Kate Wilkinson: I raise a point of order, Mr Chairperson. I do not particularly relish interrupting the member, but the member is bringing you into the debate, and that is not appropriate.

The CHAIRPERSON (Hon Clem Simich): I thank the member for raising that; she is quite right. Could the member try not to do that?

DARIEN FENTON: The National Party did not even know what a high-quality workplace would look like. The point of improving productivity is to contribute to society’s long-term standards of living so that everybody shares in the benefits of a growing economy. It is not about making people work harder and faster—which the National Party seems to think it is—or for less pay, and nor is it about making some people at one end much better off and everyone else worse off. I do not hear from the National Party its answers to improving productivity. I hear a lot of whingeing, moaning, and grizzling—

Kate Wilkinson: Be patient.

DARIEN FENTON: The member tells us to be patient; we are waiting with bated breath to hear what National’s policy is about improving productivity. I suspect very much that it will be the same old things those members did in the 1990s so they can get back to Government, because that is the only way they know of getting that graph to go up. Of course, their policies caused huge damage to people. The standard of living went down under the National Government.

I also agree with the Minister that National needs to explain its agenda on workers’ rights. It is time the National Party fronted up. Sooner or later that party is going to have to do it. At the moment there is just guesswork, and it is not a pretty picture. One thing that everybody is very clear on is that National is still promoting a law change that would expose 700,000 working New Zealanders to unfair sacking and discrimination every year, with the reinvention of Wayne Mapp’s “Get the Sack in 90 Days Bill”, which was resoundingly beaten in Parliament in 2006. We can look at the record for our information. The National Party has opposed every decent piece of employment policy over the last 9 years, including 4 weeks’ annual leave, paid parental leave, and time and a half for statutory holiday work. So it is time National told people what its real intentions are.

Kate Wilkinson: We will.

DARIEN FENTON: The National Party says that it will, but I think it has a secret agenda. I do not think the National Party wants to own up to what its policies are. It is hoping that no one is going to ask—that there will be no questions about its industrial relations policy leading into the election. National is hoping to keep it quiet and it is hoping that “Slippery John” will be able to get through the next election campaign without any questions about industrial relations. Well, I am sorry but there will be questions, and they are coming now. They are coming thick and fast. We want to know, and the workers out there want to know, what National is going to do about industrial legislation. What will National do to improve productivity? If National thinks it has better ideas, where are they? Tell us what they are.

We know, so far, that National would like to dismiss some workers—unfairly—on probation. I have already mentioned that issue. We know that National would like to have workers sell their fourth week of holidays—in other words, a worker would go along and sign up to a job, and find that the fourth week of holidays would be included in his or her pay.

  • Report noted.
Ministry of Social Development

JUDITH COLLINS (National—Clevedon) : If anyone wants to look at the future of the Labour Party—well, we have just seen it! Darien Fenton is one of the hardest working members of the Labour Party and one of the most talented, and that is actually one of the reasons why Labour is doing so well in the polls at the moment!

That speech was just a few notes from the Labour research unit on the ninth floor of the Beehive. It was just the same old rhetoric—everything is wonderful under Labour, they say. Tell that to the member’s constituents who do not have enough money to pay the mortgage and go along to the supermarket wondering whether they can buy the block of cheese they normally get for their kids. We see the increased cost of petrol and everything else, under this Government. That is what we see.

Certainly, this is most relevant to the beneficiaries that the Ministry of Social Development deals with. We are constantly told by the Government that unemployment numbers are down, and we accept that. They are down, but for how long? The world’s economies are in turmoil. We see that right now. Almost every day the front pages of newspapers talk about what is happening with overseas economies and therefore what is happening here.

We have heard a lot about what happened in the 1990s. We have heard a lot about the 300,000 or so jobs that have been created in the last 9 years. Well, I have news for this House. There were 300,000 more jobs created in the 1990s under a National Government, as well. And that was actually when economic times in the world were very, very tough, and New Zealand had to deal with the fact that the National Government inherited a bankrupt economy from a Labour Government that cooked the books and then made out that there was money in the Budget when there was not. That is what the National Government inherited. But the Labour Government inherited from National a good set of books and a good economy, and what has Labour done? In the 9 years Labour has absolutely wasted it. Labour fudged the books—that is the other thing it does.

If we look at the household labour force survey, which is the only official record for unemployment, we find that 25,000 young people are not in work, or training, or education. That number has not changed significantly in the last 9 years. New Zealand has been getting fantastic commodity prices—not due to this Government—and there are opportunities everywhere, but that number of unemployed young people has not changed.

So many children still miss out in life. More children than ever are being referred to Child, Youth and Family. The departments that deal with kids in need are now bigger, and the reason is that more children are in need. The Salvation Army report of last year showed that the gap between the rich and the poor is becoming bigger under this Government. More children are missing out and more children are living in poverty, despite all the opportunities. The reason for that is that this Government is interested only in cooking the books and in making out that everything is fine when it is not.

The Government spends an awful lot of taxpayers’ money, because it cannot trust taxpayers to spend their own earnings. Let us look at the cost of staff recruitment in the Ministry of Social Development. The ministry spent $101,000 in 2002 on recruitment. It is a big department, and one can understand that. But what did it spend in 2006? It spent $608,000—and that was not spent on wages; that was spent just on recruitment.

Craig Foss: On bureaucrats.

JUDITH COLLINS: Absolutely. If we look at the number of people on the sickness benefit and the invalids benefit we see that 130,000 New Zealanders of working age are now too sick to work. That is after 9 long years of a Labour Government. Huge amounts of money have gone into the health budget, but more people are sick. Huge amounts of money have gone into education, but more students are leaving school unable to read, write, or do basic maths.

More people are failing. Why is that? It is because this Government knows only about wastage. It loves to employ people in all sorts of Government departments, particularly those involved in communications. The spin doctors have had a huge windfall, under this Government. Anybody who looks at these accounts will see that spin-doctoring—the communications outfits—has grown like Topsy. That has happened under this Government because it is interested only in power. We need only look at the beneficiary debt owed to Work and Income to see that this Government is not doing its job.

RUSSELL FAIRBROTHER (Labour) : That last speaker spun spin. That speaker can sit in the Social Services Committee, hear half an hour of a submission, and, before the witness has finished, whip out and issue a press statement that takes out of context one line of the witness’s evidence. She does that without even challenging the witness by saying: “I’m going to report you in this way. What do you say?”. The witness at the select committee leaves the committee, only to hear on the radio that what was said has been taken out of context. Talk about spin! That lady defines it. If that lady spun a web, we would all be fighting for our existence. She spins like any campaign spin doctor.

What she forgets to tell members is that the increase in the Public Service is because by 1999 the previous National Government had run our Public Service so low that this Labour Government could not operate efficiently. Our infrastructure was virtually non-existent. It has taken moderate, and reasonable, growth to bring the Public Service to a level of efficiency.

That same speaker, as the deputy chair of the Social Services Committee, signed off the financial review report of the Ministry of Social Development, which we are debating today, with nary a negative comment. She made not one negative comment, so she endorsed the committee’s review of section 59 of the Crimes Act—the new law. Section 59 gives an example of the slip, slip, slipperiness of the National Party leader. He brought about the compromise on section 59 without telling his caucus. When we listen to the National caucus members, we realise that they do not like it. They talk behind his back about it. They undermine him about it. They do not like the deal he struck, because they know that it is slip, slip, slippery.

The report we are confirming today, which was signed off by the deputy chair of the select committee, tells us: “The new law has not resulted in an increase in notifications to CYF.” The committee also indicates that it is pleased with the increased funding for the SKIP programme. We know, because the committee has endorsed it, that the increase in the SKIP funding goes in well with the section 59 amendment—which was foisted upon the last speaker by her leader, with his deceit of his own caucus members in that slip, slip, slippery method of his of getting it done without telling them—and there have been no increases in notifications to Child, Youth and Family.

That takes me to the endorsement by the National Party, including the last speaker, of the moves to reduce the level of violence in this community. The select committee reported on the moves to reduce violence, and the previous speaker endorsed the committee’s appreciation of the increased awareness in the community of family violence. That speaker endorsed the work of the Ministry of Social Development to bring about a less violent community. The report states: “We are pleased to learn that the case conference method has fostered inter-agency co-operation, producing better outcomes for families.” What that speaker was saying, when she put her pen to paper to endorse the report, was that the Government departments are working very, very well. Those public servants that her slippery leader is attacking anonymously and without specific detail are working well, and that was endorsed by the National members of the Social Services Committee, which noted that inter-agency cooperation is bringing about a reduction in violent offending in our community. That is the reality; those are the specifics of what we talk about.

I want to take that last speaker and her colleagues to what has happened with youth on the unemployment benefit. In 1999 there were 17,000-odd youths on the unemployment benefit. These days the figure is about 300. That is a reduction of over 90 percent. More significant, the number of people receiving the independent youth benefit for more than 13 weeks is so small that it is barely worth mentioning. But did the last speaker dwell upon that? Of course she did not, because she would not want to recognise the huge successes of this Government in the realm of unemployment—particularly in regard to the independent youth benefit. But the report, which was signed off by the National Party members, acknowledged the great success of this Government and the Public Service in that area. We are working well to reduce youth unemployment. We have to accept that our unemployed youth are a danger to the future safety of our society. If we can keep the youth unemployment rate down and have our youth working, we will build a strong and healthy society. The select committee, in the review we are discussing, effectively endorsed that.

I thank the deputy chair of the committee for her cooperation. When the rubber hit the road, she had to front up and agree that those were the results. It is easy for her to stand here and spin away, as she does with the media, by misquoting what goes on in the committee, but when push comes to shove she knows that we are doing a very good job.

SUE BRADFORD (Green) : Although there is no question that the administration of our benefit system has improved in a number of ways over the three terms of this Labour-led Government, there are still significant problems, especially for those most impacted by Work and Income—beneficiaries themselves and their families.

One of the issues once again highlighted by the 2006-07 financial review of the Ministry of Social Development is that of beneficiary debt. The department told the Social Services Committee that although the number of people on benefits is dropping, beneficiary debt has increased, with over $755 million owed in both recoverable assistance and overpayments. As far as I am aware, this level of debt is still rising.

Although some might condemn this level of debt as an example of the imprudent financial habits of people on income support, the Green Party views it instead as a symptom of several fundamental political and systemic failures. The first of those is that the benefit cuts made by National in 1991 have never been restored. Sadly, Labour has been content to continue with the damage inflicted in the 1990s, requiring people to live on benefits that in many cases are simply not enough to provide even the essentials of existence. There continues to exist what appears to be a large-party consensus that anyone on a benefit must expect to simply endure substantial levels of deprivation and hardship, even when this affects another generation as well—their children.

Roughly speaking, 20 percent of our country’s children still live in poverty, according to the Ministry of Social Development itself. Many of them are the children of beneficiaries—particularly sole parents—and many of them are tangata whenua. According to the Child Poverty Action Group, the incomes of superannuitants have risen by 8.5 percent in real terms since 1999. The action group says that “between 2000 and 2004 the percentage of New Zealand children in severe to significant hardship rose from 18 percent to 26 percent, while during the same period the percentage of those over 65 in these categories remained steady at about 4 percent.” Although, thankfully, the percentage of children in poverty has decreased since the first half of this decade, at 20 percent the figure is still far too high, and the yawning gap between the way we as a society treat the children of beneficiaries and the way we treat old-age pensioners continues. They are all dependent on our welfare system, but one group has its pensions inflation adjusted each year while the other is left out and left behind in all sorts of cumulative ways. Beneficiary debt of any sort, whether to the Government itself or to private lenders, would be vastly lower if the benefit system itself paid people enough money to live on in the first place.

The second reason that so many beneficiaries continue to subsist within an endless cycle of debt is that in April 2006 the special benefit was abolished and replaced with temporary additional support—colloquially known as TAS. Up until that point the special benefit had provided a third-tier level of last ditch discretionary assistance for people in the situation where the gap between their actual income and the necessities of life was too high to bridge by any other means. With benefits remaining low and even some low-wage workers requiring assistance from Work and Income, the special benefit played a key role in allowing case managers a way of topping up people’s benefits to liveable levels.

However, for 2 years now the new system has been in place, with only people fortunate enough to have been on the special benefit at the time of the changeover being lucky enough to have their entitlements grandparented. Of course, the number of people in this situation is dropping all the time, while people new to a benefit, or people whose circumstances have changed, find themselves totally at the mercy of the new system. When we asked questions during the financial review process about the impact of the change from the special benefit to temporary additional support and about the rise of recoverable assistance, the department responded that it was largely because of the higher prices of essential goods, like fridges and school uniforms. I suggest that if these items are such an important component in the rise of debt, then perhaps the core benefit levels themselves should be increased to take account of higher prices—not to mention the ever-increasing price of things like accommodation, petrol, and food.

There simply continues to be a large number of beneficiaries who cannot survive on what they are allotted by the department, even when their entitlements are maxed out under current law. This is the fundamental reason why so many beneficiaries spend their lives going deeper and deeper into debt to everyone around them, including the Government, and why some people find themselves in particularly difficult—if not impossible—circumstances, because of the removal of that third-tier discretionary benefit.

Related to all of this is the Government’s ongoing pledge to bring in what it calls a single core benefit. In every financial review of the Ministry of Social Development for the last 5 years or so we have been asking where the Government is going on this issue and when this benefit will be brought in. The latest answer this time around is that the new Minister expects to ask Cabinet to consider the proposal in 2008—although which part of 2008 remains unspecified. Although I accept that the ministry has, in fact, as it says, implemented 80 percent of its original single core benefit concept revolving around the whole drive towards work first, the really hard part, which relates to income support, remains totally unknown and up in the air. A single core benefit could be a really good thing for beneficiaries, if it brought benefits up to genuinely survivable levels and was part of a reform that made our welfare system simpler, fairer, and easier to administer. However, without details both the Green Party and other interested people, like beneficiary and disability advocacy groups and beneficiaries themselves, will continue to be fearful of what a single core benefit might actually mean—for example, if it leads to a reduction in income levels and an even greater loss of any discretion in the system. I am not expecting any particularly good news on where this is going in the near future, although we could all be pleasantly surprised.

The ministry’s financial review also deals with the question of young people receiving the unemployment benefit. I genuinely welcome much of the sterling work that has been done in this area over the last 8½ years—particularly by the Government and the Mayors Task Force for Jobs. However, I hope that the reduction in the number of 18 and 19-year-olds on the dole is not done—and will not be done—at the expense of any young person’s right to receive a benefit. I noted with interest the outcome of a recent case in Rotorua, where in 2007 the local Work and Income office unlawfully denied access to the unemployment benefit to a number of out-of-work 18 and 19-year-olds. In August, five of the young people filed proceedings in the High Court against the Ministry of Social Development, claiming that they were being discriminated against because of their ages. They had been told at Work and Income seminars that they were not entitled to the dole until they were 20. In fact, of course, they were eligible for the unemployment benefit, given that they met all relevant criteria, and an out-of-court settlement was subsequently reached in favour of the young people.

As part of that settlement, the Ministry of Social Development gave an assurance that it accepted as fundamental that the New Zealand Bill of Rights Act applies to people applying for the unemployment benefit. This means that Work and Income offices—not just in Rotorua but all around the country—must give applicants a fair hearing, and that natural justice and due process apply at the interface between the applicant and the department. I hope that the outcome of this case has sent a message to Work and Income offices everywhere that not only should applicants for benefits not be lied to in a bid to keep beneficiary numbers down but also people must be treated fairly and well, and not denied entitlements at the whim of a particular case manager or office.

In the Gisborne Herald of 1 December last year, a trainee social work student, Jeanette Schullerquist, from Sweden, talked about her experiences during a few days of frontline beneficiary casework in Gisborne. She said that she was shocked by how some case managers talked to their clients, and: “The benefit rate in New Zealand is so low, that it is hard for most people to survive the week. Then when they come in to see their case manager, it is like they are being kept down and made to feel really small. … these case workers were being very judgmental and making the beneficiaries feel really small.” This is not a quote from something that happened in 1991 or 1998; this was going on in one of the Tairāwhiti Work and Income offices in November 2007. Sometimes it takes an international guest to see things more clearly than a lot of local people. I know that the local commissioner, Lindsay Scott, responded quite well to Ms Schullerquist’s observations—well, at least in the media—and I just hope that services on the East Coast are improving accordingly.

For those of us who believe in a fairer society for everybody, not just for some, it is really important that as we face the prospect of quite a significant recession in the medium term, we get our welfare system into as good a shape as possible.

JUDY TURNER (Deputy Leader—United Future) : As we are reviewing the Ministry of Social Development, which is the largest Government department, and which deals with the support of people in New Zealand society who are often very vulnerable, I think that it is very important—although not intending to be deliberately negative—to focus on those areas where the ministry’s performance can improve.

I remember that in the last parliamentary term it was United Future that brought to the attention of the House that although the numbers of people on the unemployment benefit were dropping at a very pleasing rate, at the same time the numbers of people on sickness and invalids benefits were skyrocketing. When we looked and did a bit of pathology on those figures, we discovered that 50 percent of those who had transferred from one benefit to another had done so because of the condition of stress. We expressed at that time our concern about what was happening with those particular benefits. There is still a measurable increase in the numbers of people on sickness and invalids benefits but, as our review showed, that pace has slowed down considerably. We are very pleased about that and about the initiatives the Government has put in place with wrap-around services to try to help people on sickness and invalids benefits to come to a place of health and return to some form of employment.

One of the other things I heard other speakers mention is that we uncovered in this review the fact that the amount of debt owed by beneficiaries is considerable. Of that debt, $150 million is due to benefit over-payment, and the ministry described to us the reasons why the other sizable lump of benefit debt was around the issue of cost of living. Essential goods are currently at the stage where there are questions whether the current core benefit is at a high enough level. It is very interesting to be having this review in an election year, because it begs the challenge to all parties in this House to be upfront about what they will do with benefit levels, and whether they will embark on and support any review into the future of those levels.

It would appear that work on a single core benefit is largely complete. Although a less complex benefit system holds some appeal, it is unclear what the status of secondary entitlements, like the accommodation supplement, will be under this single core benefit system. It is also unclear what discretionary funding will be available to Work and Income workers to deal with cases as they come in with the extraordinary needs that crop up from time to time, and how, if there is any discretionary funding, that will be administered and by whom.

United Future has an additional concern that we would like to challenge the Ministry of Social Development to consider, and that is the fact that many of their clients, whether Work and Income clients, Child, Youth and Family Services clients, or Housing New Zealand Corporation clients, lack advocacy services. This includes disability clients; we include disability clients under the Ministry of Social Development, even though they are technically under the Ministry of Health, because the Disability Strategy is clear about the fact that those with disabilities in New Zealand need to be included and need to be able to participate. That is a social need, not a health need, so United Future would love to see disability issues removed from the Ministry of Health and put under the Ministry of Social Development, because we believe that that is the appropriate ministry to be managing the overall needs of those in the disability sector. But it is really apparent with many of the clients of this ministry that they lack proper advocacy services as they approach the ministry with their various needs. It is a very daunting thing to approach a department that has the power to determine people’s incomes, the power of whether people get to see their children and under what circumstances, and the power to determine how much autonomy people should have over their benefit needs. For those in the disability sector, there is the experience of knowing that they will have an ongoing reliance on the people they are appealing to for help, and they have to be sure that they have the ability and skill set to make an appropriate appeal that will see a result that is fair and equitable.

United Future would love to have the Government investigate further what could be done to establish an advocacy service for all clients of the Ministry of Social Development, because we believe from our experience at an electorate level that that is needed. Many of the people who come into my office with complaints have a very similar status. They are often poorly educated and not often skilled at articulating their needs, so they need someone to articulate those needs for them.

Hon RUTH DYSON (Minister for Social Development and Employment) : In the couple of minutes that I might have, I am very privileged to speak in this financial review debate. I will begin by acknowledging all the members of the Social Services Committee, particularly those who have spoken today. That committee is extraordinarily ably chaired by Russell Fairbrother. I also acknowledge members of other parties who have contributed very constructively in areas where we put party politics aside and work for the best interests, particularly, of children and young people. So I acknowledge that.

I will respond in particular to a point that Judy Turner just made in her contribution, where she wished for the Office for Disability Issues to be established within the Ministry of Social Development as opposed to the Ministry of Health. I can tell the member that her wish has been granted. It was established there, and it will remain there. As the Minister for Disability Issues, I give her that commitment. The advocacy, the oversight—the whole-of-Government office—is within the Ministry of Social Development, and the member is absolutely right: it is the best place for the Office for Disability Issues.

I will talk about a number of issues in relation to this financial review, and the first is the Pathways to Partnership new funding model and new funding level to which our Government has made a commitment with our non-governmental organisations, as recently announced by the Prime Minister. That involved a substantial amount of new money, so that contracted essential services will now be fully funded for the first time ever. This is a huge investment in early intervention and family support, for better support to be given particularly to children and young people but also to their families.

  • Report noted.
Clauses 1 to 9, and schedules

A party vote was called for on the question, That clauses 1 to 9 and schedules be agreed to.

Ayes 61 New Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland, Field.
Noes 48 New Zealand National 48.
Abstentions 10 Green Party 6; Māori Party 4.
Clause 1 to 9 and schedules agreed to.

Appropriation (2006/07 Financial Review) Bill

Third Reading

Hon Dr MICHAEL CULLEN (Minister of Finance) : I move, That the Appropriation (2006/07 Financial Review) Bill be now read a third time.

  • Bill read a third time.

Valedictory Statement

DIANNE YATES (Labour) : Tēnā koe, Madam Speaker. On my greetings cards is the following quote: “Let us not take for granted that life exists more fully in what is commonly thought big than in what is commonly thought small.” I take this opportunity in my valedictory speech to thank all those who have assisted me in a variety of ways, big and small. I note some of the momentous political and social changes that have occurred in this country in the nearly 15 years I have been in this House—9 under Labour leadership. I note, in particular, changes in our form of democracy, access to Parliament, and the ability for ordinary New Zealanders to be heard. As a former teacher and manager, I will tick the boxes on my report card against the promises made in my maiden speech, my personal key performance indicators. I will make reference to how the voice of ordinary people can be heard in this country.

As the Minister of Internal Affairs says in his letter to new New Zealand citizens when they take the oath of allegiance: “We treasure our peaceful lifestyle, our freedom, democracy, and access to justice.” After the election at the end of 1993 I took part in a vote that was one of the most important votes taken in New Zealand: the vote for the leadership of the parliamentary Labour Party. Contrary to what members might have read in the papers at the time, I voted after a very intense meeting with my local Hamilton Labour electorate committee, whose advice I followed. I am pleased to say that I voted for the Rt Hon Helen Clark—a vote that I believe was not only well considered and wise but also one that has resulted in one of the finest leaders this country has known.

As chair of the Foreign Affairs, Defence and Trade Committee, I have been very well aware of the reputation of our Prime Minister not only in New Zealand but also internationally, where she is regarded with respect as a leader with high credibility and integrity. New Zealand punches above its weight on the international scene, largely because of the quality of Helen Clark’s leadership. In a recent British newspaper, in an article on women in leadership, there was praise of Helen Clark. The article stated: “Such women have won power because they have come to stand for change.”

In my first week in Parliament I responded to a call from a young Hamilton mother, a nurse, who had been to register the birth of her baby. She called in distress to say that although there was a space on the birth certificate for the father’s occupation, there was no space for the mother’s occupation. There was an amendment to the Births, Deaths, and Marriages Registration Act going through the House at the time. By the end of that evening, after I had taken procedural advice from the Rt Hon David Lange, there was a promise of a new regulation to come into force in order to include the mother’s occupation on birth certificates. It was a small thing for the country, but a big thing for that mother, and it is an illustration of how ordinary Kiwis can make changes and how accessible members of Parliament in New Zealand can, and should, be.

I am proud to be a life member of the New Zealand Labour Party and to have been on the New Zealand Council of the Labour Party. I have also been a member of the Women’s Electoral Lobby and the Electoral Reform Coalition. As a long-time advocate of proportional representation, I am pleased to see the increased breadth of representation in this House—not only more political parties but also more women, more Māori, more Pacific Islanders, and more Asians; a wider representation of today’s New Zealand. I am pleased that the person who will take my place, coming from Labour’s list, is of Samoan descent, and I wish Su’a William Sio the very best in his political career.

I commend the Speaker and Clerk of the House for introducing technology that allows submitters to select committees to access videoconference facilities. This allows those people who cannot travel to Wellington to make oral submissions. However, I am not sure that proportional representation has improved debate in the House. We seem to get, as we were warned from Europe, more positional papers and speeches from parties, rather than debate. I do miss actually, physically voting in the lobbies. We miss Braybrooke with an “e”, do we not? In 1994, during the nearly 500 amendments at the Committee stage of the Maritime Transport Bill, we all got to know one another rather well over fish and chips.

In my maiden speech early in 1994 I talked about three main issues: firstly, education, care, and the well-being of children; secondly, domestic violence; and, thirdly, cloning and the need for a legal framework around reproductive technologies as they apply to humans. It has taken some time for me to become a member of, and chair of, the Education and Science Committee, and I am pleased that the latter has finally happened in the last few weeks before my retirement. I am also pleased that this committee has completed an inquiry into the achievement of our schoolchildren and made practical recommendations. I acknowledge in particular the Wilf Malcolm Institute of Education at the University of Waikato for its contribution to this inquiry into educational research, teaching, and learning in New Zealand schools through the Te Kōtahitanga programme. I look forward to further implementation of its findings and teaching methodology, and to improved outcomes for all our children.

I am also pleased at the tremendous strides that have been taken by the Labour-led Government on the extension of workplace skill training and the reintroduction of apprenticeships through the Modern Apprenticeships scheme, which has resulted in over 14,000 apprentices. I look forward to even further developments through Schools Plus, Gateway, and similar programmes.

A radio journalist asked me recently what had been the most important changes in Hamilton in the time I had been in Parliament, and I replied: “Improvements in education and science.” When I compare the learning environment in schools in 1993 with those in 2008, I find that there have been tremendous changes, from buildings, to paintwork, to Project Energise to combat obesity in children, to reduced staff ratios, to teaching methodologies and measurement, to the removal of interest on student loans, to 20 free hours’ early childhood education, and the new curriculum. I am proud that the Labour-led Government has upheld the Labour tradition of enabling young New Zealanders to achieve to the best of their abilities.

I am also proud of the Waikato Innovation Park and the fact that this is the most successful of the major regional initiatives of the Labour-led Government. I am pleased to have been in at the ground level, literally, with the Prime Minister at the turning of the first sod to begin this ongoing endeavour to boost innovation and the commercial application of invention. I welcome the pledge last week of $700 million of innovation money for pastoral and food sectors.

Last month I attended the launch of Unreasonable Force: New Zealand’s Journey Towards Banning the Physical Punishment of Children. I am proud to be included amongst those acknowledged in that book, along with fellow MPs Lynne Pillay and Sue Bradford. The book also acknowledged my former university colleagues Drs James and Jane Ritchie, as well as many children’s lobby groups such as EPOCH, ECPAT, Save the Children, and Barnardos. I am pleased that in my so-called retirement I will be able to continue to be involved with such organisations, which aim to improve the life and well-being of children both in New Zealand and overseas.

I honour those who have worked at a number of levels to improve the care and protection of children in our society and who work towards better ways of caring for each other in our families and communities, as our Governor-General exhorted us to do in his Waitangi Day speech this year. I particularly thank those who have been brave enough to come forward and to have stood strong in the light of extreme public scrutiny when their abuse cases have been tested at law. I thank the Labour-led Government for the appointments of the Commissioner for Children in 1989 and the Families Commissioner in 2003 and for the role these organisations play.

Researchers at the University of Waikato, Hilary Lapsley, Neville Robertson, and Ruth Busch, compiled the Protection from Family Violence report for the Victims Task Force in 1992. This led to 1995 legislation. The legislation was but a start, and present Government initiatives continue to get the message out to New Zealanders that violence is not the way to solve problems and that it is “OK to ask for help”. I thank the Hamilton Abuse Intervention Project team in Hamilton for its tireless work in trialling programmes and for working to prevent domestic violence.

Amelia Carter was my intern in 2001. It was Amelia who alerted me to the problems of date rape for young women and who drafted my member’s bill, which spelt out the meaning of consent and was incorporated into the Crimes Act. Once again, this is an illustration of how ordinary New Zealanders can access and change laws. I commend Dr Stephen Levine and his team for initiating the University of Victoria intern programme.

In February 1997, Dolly the cloned sheep was born in Edinburgh. In the same month I made my introductory speech on the Human Assisted Reproductive Technology Bill. Even the Speaker looked up in surprise when I announced that all we really need is eight men with strong sperm counts to maintain the gene pool in New Zealand. I will not announce the names of those members who came up to me in the lobby afterwards to volunteer. This Human Assisted Reproductive Technology Bill was in the too-hard basket for a long time, but I am pleased to say that New Zealand in 2004 joined the list of countries that put legal and regulatory frameworks and bans around the cloning of human beings. I thank the people at AgResearch in Hamilton, lawyer Anne Todd-Lambie, law drafter Debbie Angus, and all those who assisted with this legislation. I can now look back on those three issues I raised in my maiden speech with satisfaction.

As scientific breakthroughs do not happen in isolation, nor do changes in the law, and as both often take many years, I am pleased to have promoted my reproductive technology legislation, paid parental leave, and the repeal of section 59 of the Crimes Act years before laws on these matters were enacted, as well as liquor labelling. I hope that in doing so I have helped to move the public debate towards acceptance of these ideas, and note—as Mike Moore used to say—“It is wrong to be right too soon.”

Having been here almost 15 years I have accumulated a long list of people I want to thank, and I know I will miss some of them. Firstly, I thank those MPs who were my mentors and inspiration, former members for Hamilton East Dr Anthony (Rufus) Rogers, who in his 90s still takes an interest in politics, and Bill Dillon, who sadly succumbed to cancer. I thank my buddy MP when I first came into Parliament, the Hon Koro Wētere, and the two people who sat beside me through the Committee process of bills and encouraged me to take spontaneous calls, the Hon Judith Tizard and Richard Northey. I thank my Hamilton West running mate, Martin Gallagher, for support. I am sure he will make a great job of chairing the Foreign Affairs, Defence and Trade Committee. I look forward to the report on the inquiry into New Zealand’s relationship with the Pacific. I am also hopeful that we too may have a Latin American foundation similar to the Asia New Zealand Foundation, in order to encourage and build on New Zealand’s trade and cultural relationships with Central and South American countries.

There is still work to be done on some issues that I have been involved with through select committee inquiries, such as adoption, laws around retention of identity, collective human rights issues around hate speech, and the use of genetic information in health and life insurance. Much of the background information, discussion, and research on these is parked in that wonderfully helpful institution the Parliamentary Library.

I wish long and successful political careers to my successor and candidate for Hamilton East, Sue Moroney, and to our Hamilton-based Minister, the Hon Nanaia Mahuta. I thank my Waikato colleagues for teamwork on local issues, especially regarding funding for the fencing of the Mount Maungatautari ecological island. I have enjoyed constructive relationships with my caucus colleagues, select committee members, and coalition and Opposition members. I especially mention my first benchmate Jill White and fellow “Paint Strippers” Jill Pettis and Judy Keall. If there were ever an Oscar for interjections, then it should go to Jill Pettis.

The staff in Parliament—the messengers, Bellamy’s, the cleaners, the librarians, the Clerk’s Office, the committee clerks, Parliamentary Service, the researchers, the post office, the travel office, and the receptionists—have all made my life so much easier and have done so with good grace and at times immense patience. I must not forget also some of the best therapists in the business, the Status Taxis drivers, as well as my present landlady Anne, and Nikita, Sasha, and Andrew.

My assistants here in Parliament, Helen Toner, Adrienne Rehioui, Pauline Scott, Carol Rawson, Janina Pawlak, and Chris McAvoy, have shown amazing devotion to duty and an ability to handle someone with a mercurial temperament. I can say that Helen Toner’s “Thank you for sharing that with me.” reply to a distraught member of Parliament was always a great reality check, as was the advice of former Speaker and Labour whip the Rt Hon Jonathan Hunt, to take a long walk along Lambton Quay whenever I got wrought up over an issue. This usually had a very calming effect and helped increase Kirkcaldie’s profits no end.

My out-of-Parliament staff have made tremendous efforts for both me and my Hamilton East constituents. Nothing has ever been too much trouble to Maureen Mildon, Jill Hobden, Pauline Matenga, Kevin Pryor, and a large team of volunteers. I thank them for their patience, persistence, and work well beyond the call of duty.

I would not have endured Parliament without the unfailing support of the Hamilton East Labour electorate committee and its chairs Shane Vugler, Maryanne Hills, Howard Ennis, Dr Robert Welch, Andrea Bather, and Rosemary Allbrook. I have had such an amazing team of people to work with and for.

I thank my family for instilling in me a strong social conscience, sense of public duty, and sense of what is just and fair, and the Labour Party for ensuring that I never lose that conscience. I have been a constituent MP under first past the post and MMP, and a list MP, but I have always retained an office in Hamilton East. I thank the voters in Hamilton East for their confidence and support. I assure them that I have endeavoured to serve them and the interests of the wider community to the best of my ability.

In referring back to my opening remarks I say that I have always tried to ensure that those with small voices are heard, whether they are our children, young mothers with babies, those on low incomes, new immigrants, students, or superannuitants. When I have been asked to speak of differences between parties I have always taken the stance that I believe in Labour principles and that true human rights and responsibilities are about putting “us” and “we” before “my” and “me”. Thank you, Madam Speaker.

Securities (Local Authority Exemption) Amendment Bill

Second Reading

Hon LIANNE DALZIEL (Minister of Commerce) : I move, That the Securities (Local Authority Exemption) Amendment Bill be now read a second time. This bill provides for the inclusion of a local authorities’ exemption in section 5 of the Securities Act 1978. The exemption allows local authorities to meet reduced disclosure requirements when offering debt securities to the public. Although they will still have to produce an investment statement containing certain product and provider information, they will be exempt from producing a full prospectus signed by all councillors of the local authority, as they have had to do for a number of years.

The disclosure requirement under the Local Government Act is, in many cases, a double-up of disclosure requirements under the Securities Act. This places unnecessary compliance costs on local authorities. The bill intends to reduce these costs without greatly affecting the benefits that disclosure provides to investors. The exemption means that in order to ensure investors receive full, accurate, and timely disclosure information, more reliance will be placed on the information disclosure requirements under the Local Government Act. This reliance caused some concern for the Commerce Committee. Members felt that although initial disclosure information was addressed by the exemption, the provision of ongoing and continuous disclosure was not. As a consequence, clause 5 inserts an additional subsection (3B) in section 5(1) of the principal Act to address those concerns.

This subsection deals with a local authority making information available to the public about its financial position. It requires that a local authority offering a debt security must provide financial statements to potential investors on request and free of charge. Also, its investment statement must refer to its most recent audited annual financial statements, and to interim financial statements where the date of allotment of the debt securities is more that 9 months after the last balance date.

The subsection also requires that a local authority must include in its investment statement that the debt securities being offered are not guaranteed by the Crown unless, of course, they are being guaranteed under the Public Finance Act 1989. This would normally appear in the prospectus, but without a prospectus it must go in the investment statement.

Access to this information allows investors to make informed decisions on the potential risks and returns of their investment choices. I am confident that this additional change will alleviate any concerns about the disclosure requirements of the Local Government Act, and will also address the Green Party’s desire to see more detail in the investment statement and for other documents to be clearly identified.

The addition of subsections (3C) and (3D) in section 5(1) are technical requirements supporting the subsection (3B) amendment. Together, these amendments should reassure the National Party that the bill does not create different standards of reporting for issuers of securities to the public, depending on the model of the governing body. What they do is ensure that there is no reduction in the financial reporting stringency required of local authorities, compared with companies.

Further, this bill is strongly supported by the conclusions in David Shand’s report, which is an independent inquiry into local government rates published around the time of the first reading of this bill. One of the key recommendations made in the report is that in order to spread costs over generations, councils should make greater use of borrowing for long-term capital projects, specifically its dates. The report states: “There are very good reasons for local authorities to make greater use of debt to finance long-life investments. Doing so may advance the date at which the infrastructure can be provided and spreads the capital cost more equitably across the generations that benefit from that service. Moreover, central and local authorities are generally low risk debtors, so they enjoy low interest rates in debt markets.”

Interestingly, the comment made by Sir Basil Morrison, president of Local Government New Zealand, that “… the ability to once again issue debt securities will save councils millions of dollars in interest costs.”, was reinforced by submissions during the select committee process. These highlighted that by providing another avenue for accessing capital, the bill will lead to more competitive pricing for local authorities’ debt and consequently create more accurate pricing in the market for debt products.

Another area of concern for the committee was the issue of criminal liability. Some submitters considered that elected members of local authorities should be exempt from criminal liability for breaches of the Securities Act, as Ministers of the Crown are. However, this was rejected by the committee, as councillors and Ministers of the Crown have different obligations regarding accountability. In comparison to local authorities, the Crown has to fulfil significantly more reporting and accountability requirements, and faces many more checks and balances. It is my firm belief that retaining the burden of liability will further ensure the robustness and transparency of the process undertaken by local authorities when issuing debt securities to the public.

I welcome the availability of local authorities’ debt securities on the retail market. It will provide a valuable source of alternative funding for infrastructure assets. It will also provide investors with options to expand their investment portfolios, which is a positive move for the investment market. I am confident that this bill, including the changes made to provide for the availability of current financial information, will achieve the objectives of the disclosure regime of the Securities Act, as well as those of the Local Government Act.

Finally, I would like to thank members of the Commerce Committee for their work on considering this bill. They did a very good job. I would also like to acknowledge the contributions of those who provided submissions on the bill. I commend the bill to the House.

SIMON POWER (National—Rangitikei) : The National Party supported the first reading of the Securities (Local Authority Exemption) Amendment Bill and it will continue to support the bill’s passage through the House. As the Minister said, the bill provides local authorities with an exemption from the full disclosure requirements of the Securities Act when issuing debt securities to the public because of their extensive closure requirements, supposedly, under the Local Government Act 2002.

I cannot help but smile when I think about the work that is being done around the Financial Advisers Bill and the financial disclosures regime, as well as the non-bank deposit taking prudential supervision legislation, as it seems that we are relaxing some of the matters relating to the issuing of securities in this particular legislation. Having said that, the Commerce Committee made sure, following the hearing of submissions, that in a number of sections investors had access to adequate information, including financial accounts and interim financial accounts.

It is always a bit of a balancing act when making it easier for local authorities and, for that matter, other entities to issue debt securities to the public or to raise funds, whilst at the same time ensuring that the protection of investors means that disclosure requirements provide them with sufficient information to ensure that they are not left in the dark when it comes to some of the finer detail. If this bill proceeds through its remaining stages, it will be the case that local authorities will need only to produce an investment statement with the signature of two councillors, rather than the more onerous requirement to produce a prospectus signed by all councillors.

We need to take a bit of a step back and think about what we have been trying to do as a Parliament in other legislation that has come before us over recent weeks, and about whether the test for consumer protection and disclosure is still met in a bill such as this. There is probably no doubt in the minds of those who sat on the Commerce Committee that heard submissions on this bill that local government legislation, alongside this business of making adequate information available by way of financial accounts, meets that test, but it is important that across sectors we do not have one test for local government authorities and another entirely different test for those other houses, if you like, that are seeking to issue debt securities to the public.

We want to enable local government to get on with the business of accepting investment and issuing debt securities. We certainly do not want to stand in the way of sensible legislation that would allow only two councillors to authorise such a statement.

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

SIMON POWER: Madam Assistant Speaker, I believe this is the first time I have made a contribution in the House since you have been in the Speaker’s Chair as opposed to your being in the Chair during the Committee of the whole House, so I take this opportunity to congratulate you on your appointment to the role of Assistant Speaker. I look forward to working under your supervision for the remainder of your period in Parliament. I know from having observed you for some time and having been a co-presenter to the first-year politics class at Victoria University for some years that you will bring good humour to the role as well as a firm hand.

Can we return to the Securities (Local Authority Exemption) Amendment Bill. Before the dinner break I was talking to the House about the issue of consistency. The Hon Paul Swain was good enough to say to me during the dinner break—and he will correct me if I am misquoting him—that there were some considerations as to whether the local government legislation in and of itself provides sufficient protection for disclosure and information being made available to investors, and whether the new legislation in respect of amending the Reserve Bank of New Zealand Act, which is designed to create a prudential supervisors role for non-bank deposit takers, will have any effect on local government’s ability to issue debt securities to the public.

With the fall of a number of investment companies in recent months we have seen a determination by Parliament—and I use the term “Parliament” deliberately—to legislate to try to protect investors with a tightened disclosure and accountability regime, and National has been supportive of those moves. As I was saying before the dinner break, it is a bit ironic that this legislation is designed to make it easier for local government to raise funds by way of issuing debt securities to the public in an environment where we are doing quite the opposite to private enterprise. It may well be that local government bodies and councils themselves, by their statutory existence, create a higher level of certainty and less risk in respect of the issuing of those debt securities to the public. But the select committee was determined that, although some of those arrangements to do with disclosure and the issuing of prospectuses were to be relaxed, there was no chance that investors would not receive sufficient information to make informed decisions.

The select committee, under the guidance and leadership of Gerry Brownlee and the Hon Paul Swain, is to be congratulated on picking up on that particular point to make sure that we balance this delicate equation of the two elements. One of those elements makes it easier for local government to do business. In other words, if a local authority is raising funds by way of issuing debt securities to the public, then it does not have to have every councillor signing the offer documentation, which means that the transaction would become, quite frankly, a very difficult transaction to enter into if one councillor decides that he or she will not play ball. This bill now provides that only two councillors have to sign. We have to balance that element against the element of making sure that individual investors are protected.

The select committee—under quite a hurried timetable, it has to be said—worked its way through this bill with some diligence and made some amendments to the process that I think have improved this bill significantly. We will watch and wait to see what effect the amendments to the Reserve Bank of New Zealand Act in respect of prudential supervision may or may not have on the securities offered. I think that the Hon Paul Swain made a very fair point, and it will be interesting to determine whether those questions can be answered with any veracity in the Committee of the whole House.

Hon PAUL SWAIN (Labour—Rimutaka) : Yes, Madam Assistant Speaker, I agree with the previous speaker, Simon Power, that it is right to congratulate my old bench mate on attaining that high office, and I wish you well as you sail towards the sunset—like my very good self.

Hon Ruth Dyson: To the next stage of her career.

Hon PAUL SWAIN: Yes; she is on the way to the next stage of her career.

Before I get into the Securities (Local Authority Exemption) Amendment Bill, I say that Simon Power made an interesting point in asking what the relationship is between this bill and the Reserve Bank of New Zealand Amendment Bill, which is being considered by the Finance and Expenditure Committee. The honest answer to that question is that I personally am not sure. That legislation is designed to bring in some prudential oversight of the Reserve Bank over the non-banking sector. One of the issues being looked at there is the definition of what is called a “deposit taker” and whether a local authority that is issuing debt securities for infrastructure projects, for example, would come within that definition. This was not discussed this morning at the Finance and Expenditure Committee, but I will take it up at that select committee to see whether there is a relationship between these two issues because I think it will be important to get that relationship, if it is at all possible.

The point of this bill—and I congratulate the Minister of Commerce, Lianne Dalziel, on bringing this bill forward—is an attempt to make it easier for local government authorities to be able to raise funds for infrastructure projects, in particular, and to finance them through issuing debt securities, rather than having to pay for them up front through rates. I think that this is a good thing to do. The argument was that the regime they were under, under the Securities Act, meant that the compliance costs were high, and as a result most councils found it greatly difficult—and, some argued, prohibitive—to do this. What we are doing is exempting local government authorities from the full disclosure regime of the Securities Act, particularly around the prospectus.

Under this legislation there will be no need for a full prospectus signed by all councillors. Simon Power correctly made the point that if we had to get all councillors to sign off on a prospectus looking to raise debt for an infrastructure project, then all it would need is for one councillor to say no and the project falls over. This point was made by submitters. What happens now is that councils are required to put out what is called a financial statement, which is required to be signed by two councillors. Obviously if only two councillors were held to be liable, then no one would sign it, so all councillors are liable for what is called the accuracy of that statement. We had some discussion at the select committee as to whether a councillor could vote against the financial statement if he or she did not agree with it, but, provided there were two councillors to sign the financial statement, the councillors were still essentially liable. Therefore, it is incumbent on all councillors to try to make sure that they understand the issue and that they attest to the accuracy of that statement, so the issue of liability still holds.

There was the question of whether, like Ministers of the Crown, councillors should be not liable, and there was some discussion about that. I think that the submissions from Local Government New Zealand raised that matter. The select committee said no in the end. The roles and responsibilities of Ministers are different from those of councillors, particularly around accountability, and there are a lot more checks and balances in the central government sector. Treasury is all over this stuff like a rash, the departments are audited by the Auditor-General, and all those things are hidden in behind there. We felt that was not an appropriate comparison.

However, we were still concerned about making sure that there was sufficient disclosure to ensure that people who were investing in these things had some surety, so we introduced some other measures. When the local authority issues these things it will be required to refer to the most recent audited annual financial statements in the investment statement that it distributes when issuing debt security. There is a document for people to look at that refers to the last annual statement. They can refer to interim financial statements in the investment statement where the date of allotment of debt security is more than 9 months from the last balance date. That makes sense as well. A local authority would provide financial statements to investors and potential investors on request and free of charge—as there was an issue about whether people would be charged for this—and it would state in the investment statement that the debt securities being offered are not guaranteed by the Crown.

Some people will think: “I will put my money in here because the Crown is backing it.”, because people often do not understand the difference between central government and local government, certainly in my own area. When there are potholes they come and see me, and I blame the mayor, and when it is something to do with central government, he blames me. A lot of people do not understand the difference between the two, or where the boundaries are, so it was important to say that debt securities issued by a particular council are not guaranteed by the Crown unless they are covered by the Public Finance Act 1989.

The Commerce Committee has done a good job on this legislation, under the chairmanship of Gerry Brownlee. Once this legislation is enacted, it will be interesting to see whether the issue is taken up, and whether some infrastructure projects that are not able to be funded at the moment for a whole pile of reasons are, in fact, funded. The relationship between this particular legislation and the Reserve Bank of New Zealand Amendment Bill is of interest to me, and I will be taking up that matter at the Finance and Expenditure Committee.

This bill is good legislation. It is in the best interests of councils. It should encourage investment, which is a good thing, and I recommend that it proceed further through its remaining stages in the House.

Dr RICHARD WORTH (National) : The Securities (Local Authority Exemption) Amendment Bill was a very short bill when it was introduced, and it is now only a little bit longer. It had two short clauses of substance. The first was to insert a definition of “local authority”, and the second was to provide an exemption. Clause 5 exempts local authorities, where they are issuers of debt securities, from a number of provisions in the Securities Act.

It is interesting to reflect, in the wake of the collapse of the Blue Chip group and a number of disasters touching finance companies in New Zealand, that this particular bill, which will form part of the substantive Act, the Securities Act, is one of two pieces of legislation that give powers to two commissions, the Securities Commission and the Commerce Commission, to take action in respect of investments that sour. Those two commissions consider that they have sufficient statutory powers to undertake that task of investigation and remedial action. But we have not seen too much evidence of that to date.

National supports this bill, the Securities (Local Authority Exemption) Amendment Bill, and rather than deal with its provisions I will just say something about local government financing in the context of today and about what this bill might mean for the future. This bill, I believe, is a pragmatic step that Parliament can take to assist local government in managing the current bulge of infrastructure development, whilst maintaining local authority finances on a reasonable footing.

It is a fact that local government has embarked on the most significant programme of capital works undertaken since the post-war boom in the development of the roading network.

Hon Paul Swain: What a good Government.

Dr RICHARD WORTH: I am talking about local government at the moment.

Hon Paul Swain: Yes, I know, but it’s kind of helped by a good Government.

Dr RICHARD WORTH: I say in response to Mr Swain’s comment that if we look at local authorities’ long-term plans we see that local authorities are undertaking approximately $30.8 billion in capital works in the 10 years to June 2016. Virtually all of this expenditure is to fund either network infrastructure—roads, sewage disposal, and water schemes—or community infrastructure, which includes things like libraries, sports grounds, and stadia. That is more than double the level of capital expenditure in the period from 1995 to 2004.

The other aspect that is quite interesting is that there is a significant degree of front-loading in the capital works programme, such that about 50 percent of the funding needs will be required between now and 2009. The significant thing, I would say, about infrastructure assets is that they have long lives. Borrowing helps to spread the cost of this infrastructure over the life of the asset so that today’s ratepayers are not subsidising future ratepayers.

There is a provision in the Local Government Act, section 101(3), that places local government under a statutory obligation to consider this aspect of intergenerational equity. It is alongside other principles such as beneficiary pays, exacerbater pays, and the promotion of community well-being when making decisions on the funding of any particular activity.

The recent report Independent Inquiry into Local Government Rates noted all the points I have just made. It also made the point that local authorities should look more favourably on the use of debt.

So we come to the period immediately prior to 1998 when the local government sector enjoyed an exemption from the requirements of the Securities Act. It was blessed with two privileges. The first related to the preparation of a prospectus, and the second related to certifying the accuracy of the information in the prospectus by getting the signatures of every elected member. That changed in 1998, and the removal of those privileges—well, we might call them privileges; they were certainly exemptions—placed significant economic and practical barriers in the way of any local authority that wanted to issue debt securities, particularly the smaller local authorities.

That barrier is very well illustrated by the fact that only one local authority was involved in debt raising under that new regime. That local authority was the Auckland City Council, which issued debt securities to the public—$120 million in March 1999 and $68.2 million in February 2001. Very significant costs were involved with those debt issues. I understand that the direct cost to the council of those two issues was almost $700,000, albeit that an amount of $190 million was to be raised. But, even today, experts in securities law as I understand it would say that the minimum cost to prepare a prospectus would be in the order of $100,000 to $150,000. That really makes the issue of debt securities economic for issues of $10 million or more, but it also carries with it the consequence that only, perhaps, the largest 30 or 35 local authorities could be involved in that debt raising.

Essentially, the signature requirement made it impractical for local authorities to borrow, because, unlike corporate governance, elected members of a local authority are under no obligation of collective responsibility. Thus, they are under no obligation to sign any certificate. The consequence of that was that it was possible for an individual elected member who was opposed to a particular project to effectively exercise a right of veto over a project by refusing to sign the loan documentation.

That is the history of all these issues, and the basis of the removal of the exemption in 1998 was to promote a level playing field. But we should leave aside the fact that these entities were not really in competition with the private sector, because, in the past, local authorities’ securities tended to be purchased by small-scale investors with quite conservative risk profiles or by people who were attracted by the altruistic notion of investing in the community. So what was the end result? The end result, basically, was that this flow of investment capital was choked off, and that forced local authorities into dependence on financial institutions for borrowing.

Of course, one way of avoiding the limitations in the legislation was that those limitations could be circumvented by not having to provide a prospectus and by issuing debt to wholesale and what are called habitual investors. But that was a very limited market. I believe—as quite clearly the Commerce Committee believes, the Government believes, and National believes—that the New Zealand public are in need of a new source to secure debt securities in which to invest.

Other members have noted the provisions of the legislation. I do not really want to deal with that issue. The proposition is a simple one. There is to be an exemption, but it is an exemption framed around some additional disclosure requirements. I believe that we will see with this legislation an opportunity for investors to gain access to quality debt—high-quality debt.

In the current period, when the quality of debt products has come under closer scrutiny, local authority paper is likely to be received extremely well by retail investors. It provides a much broader range of investment-grade credit, which is a very important initiative in improving the overall quality of savings products available to New Zealand investors.

National supports the Securities (Local Authority Exemption) Amendment Bill and would like to see its speedy passage.

PETER BROWN (Deputy Leader—NZ First) : I would like to compliment the member who has just resumed his seat, Dr Worth. He at least has the honesty to suggest where the Securities (Local Authority Exemption) Amendment Bill emanated from—the Shand inquiry, which was an inquiry into local body funding, and alternative funding, that came about as a New Zealand First initiative. That is putting it politely.

We were put under huge pressure, as the member well knows, to support the rather naive Rodney Hide bill that the National Party wanted to support at that particular time.

Hon Tau Henare: Be nice for a change.

PETER BROWN: I am being nice. It was a rather naive attempt to cap rates. New Zealand First thought the issue through and demanded, in a very tough manner, that there be a formal inquiry into rate funding. It is known as the David Shand inquiry—it was named after the chairman—and it recommended quite strongly that local bodies, local councils, get more involved in debt funding. That is a view that New Zealand First has had for some time when it comes to infrastructure. In recent years we have progressed a little bit in the way in which we fund roads, from when if we had the money we invested it in roads, and, if we did not have any more money, we stopped until the next year when we got a little bit more money. That just does not make sense in the modern world.

New Zealand First has always supported the idea of Governments and local councils debt funding on a reasonable, responsible basis, certainly when it comes to the cost of infrastructure, and the like. We are very pleased that the Shand inquiry supported that contention. Infrastructure is not only for today’s ratepayers; it is for tomorrow’s. It is only right, proper, fair, and equitable that infrastructure is funded in such a way that the users contribute to it. Debt funding is the way to go. As Dr Worth said, this could open the door for some high-quality debt, which investors can participate in, and, all going well, there will be a nice little nest egg for people in the longer term.

Dr Richard Worth: Better than Blue Chip, perhaps.

PETER BROWN: I knew that the member would say that. I am conscious of whom he is sitting next to right now. Yes, it will be darn sight better nest egg than Blue Chip was, I would suggest.

In essence this bill relaxes the rules, and allows two councillors—and the Hon Paul Swain touched on this—to sign the prospectus. Currently, every councillor has to sign it. That is a case of living in the dark ages, because it means that one councillor who wants to be awkward, bloody-minded, or who for some reason wants to stall the development, can do so.

Hon Tau Henare: Steady on, man!

PETER BROWN: There is one talking right now whom I could think of, if he were a councillor—but I am sure he would not. This could stop a whole project going ahead, or even more than that. This bill improves the situation considerably.

As the Hon Paul Swain said, every councillor will be liable—otherwise nobody would sign the prospectus—but it allows progress to be undertaken. Of course, there are some rules and safeguards. It is only right and proper that there are safeguards. I have to compliment the Commerce Committee, which, I might add New Zealand First was not on, on proposing to amend section 5 of the Act by inserting subsections (3B), (3C), and (3D), basically in order to put in safeguards when it comes to having accounts up to date and investors seeing the most current financial position. New Zealand First concurs with that, and we compliment the select committee on inserting those provisions. Obviously, there have to be safeguards. If we have investors we need proper safeguards. We do not want anything to be set up that in any way resembles a fly-by-night type of operation.

New Zealand First is pleased with this bill. We know that it had its beginning out of the Shand inquiry, and we are grateful to the Government for taking on board the recommendation made by that inquiry team. We will support the passage of this bill through the House.

METIRIA TUREI (Green) : I take just a short call to say that the Green Party will support the second reading of the Securities (Local Authority Exemption) Amendment Bill.

  • Bill read a second time.

Business of the House

SUE MORONEY (Junior Whip—Labour) : I seek the leave of the House for Shane Jones to take the Committee Chairperson’s position.

The ASSISTANT SPEAKER (Hon Marian Hobbs): Is leave agreed to?

Hon TAU HENARE (National) : I raise a point of order, Madam Speaker. Is it to take the Chair?

The ASSISTANT SPEAKER (Hon Marian Hobbs): It is to take the Chair of the Committee of the whole House. We are about to shift into the Committee of the whole House.

Hon TAU HENARE: Madam Assistant Speaker, this is really, really unusual.

The ASSISTANT SPEAKER (Hon Marian Hobbs): Yes, it is unusual.

Hon TAU HENARE: I am loath to give leave to make a precedent. [Interruption] This is actually a point of order, Madam Assistant Speaker. I am loath to give leave for what I believe is a precedent-setting event like this. I have never seen it in my time in the House. I know I have not been here for very long this second time, but I am just wondering whether if we get into this it may become a habit.

The ASSISTANT SPEAKER (Hon Marian Hobbs): Thank you very much. I understand the point of order the member is making but I reassure him that it does not set a precedent. Is leave given for the Hon Shane Jones to be Chair of the Committee? There is objection. We will just have to wait until Mr Simich comes. I am sorry about that, but leave has been refused for a temporary Chairperson to be appointed.

Hon TAU HENARE (National) : I raise a point of order, Madam Speaker. When a person denies leave in the House, it is his or her right to do that.

The ASSISTANT SPEAKER (Hon Marian Hobbs): Absolutely.

Hon TAU HENARE: On several occasions you have, without naming me—but there are cameras so that makes it a wee bit difficult—indicated that I am the culprit in this. Can I assure the House that I denied leave for the reasons I gave before. I hope that the House is not trying to hang me out to dry as the bad guy.

The ASSISTANT SPEAKER (Hon Marian Hobbs): I would never consider that at all in regard to the member.

Hon TAU HENARE (National) : I raise a point of order, Madam Speaker. Can I seek some clarification, maybe not right now, but when we get to look into it a bit more, of the whole process of who comes, and when he or she sits in the Chair?

The ASSISTANT SPEAKER (Hon Marian Hobbs): Yes, I am willing to either do a report to the House or just talk to the member quietly.

Social Assistance (Debt Prevention and Minimisation) Amendment Bill

In Committee

Part 1 Amendments to Corrections Act 2004

JUDITH COLLINS (National—Clevedon) : The National Party has supported this bill all the way through because it does not want to see beneficiaries—who are the poorest people, economically, in the country—in a situation where they are unnecessarily put into debt because nobody has turned off the taps for their benefits in the situation where they have been put into prison or are not able to qualify any more for a particular social assistance.

We think this bill has been quite a long time coming. We say that not just because there has been almost 9 long years of a Labour Government but because, in this time, the debt owed by beneficiaries to Work and Income has more than doubled. That shows why there is a massive need for this legislation. We now have about $760 million worth of debt owed by beneficiaries and former beneficiaries to Work and Income. Although some portion of that debt is the result of fraud, a lot of it is because there has been an overpayment for a week, 2 weeks, or a few months. There have also been situations where a beneficiary has not contacted Work and Income to let it know of his or her change in circumstances. There have been instances where a person been paid his or her benefit after going into prison, for instance. The fact is, if a person is in prison, I am sure it is not the first thing on his or her mind to contact Work and Income and tell it to cut the benefit. There are probably other things on a person’s mind. I think the best thing we could do is to actually have a mechanism to stop people from getting into debt.

Hone Harawira: If you’re in prison, you can’t go and contact them.

JUDITH COLLINS: Well, I think Mr Harawira is quite right—that person is not in a position to contact Work and Income. Of course, we could ask: “What about their families?”. Well, in many cases people’s families in those situations are going through a very difficult time—an extremely difficult time—and the first thing on their minds is not to contact Work and Income and say that if there is a benefit still to be paid, it is a different sort, and it is to different people within the family.

It is very important to have this legislation to allow better data-matching not only between, say, the Department of Corrections and Work and Income but also between Work and Income and other agencies. But this legislation is not being passed for just that purpose; it is also being passed because we need to have some integrity in our benefit system. It is absolutely not acceptable to the taxpayers of New Zealand that people continue to be wrongly paid benefits at various times. Just today in the Social Services Committee we heard about a massive benefit fraud—the Patterson fraud of $3.2 million. Although this legislation might or might not have helped in that situation—

Hone Harawira: What about the Inland Revenue fraud of $600 million?

JUDITH COLLINS: No, I do not think that was a fraud. Although the Patterson fraud might or might not have been detected by this legislation, the fact is that technology is being changed and updated constantly. Those who would defraud the benefit system are getting themselves into a position of using technology to do so. We are finding that the Government technology cannot keep up with the technology of fraudsters. That is because people who really want to defraud the system are sitting all day and thinking of ways to do it, while the rest of us are getting on and doing our work. It is incredibly important that we do not allow this to happen without trying to do something.

I do not know, though, how this legislation is going to help deal with the current benefit debt. I do not know how it will deal with the three-quarters of a billion dollars owed by beneficiaries and former beneficiaries. I do not know how this will keep beneficiaries as a whole from getting into further debt other than to try to stop new people getting into debt.

I think it is a real shame that, after all the Government’s opportunities to deal with the problem, it really has not pushed budgeting services like it should have. It took away the compulsory budgeting service that National brought into place for beneficiaries when they were getting into debt. It took that away and made it voluntary. The problem with making it voluntary is that many people in these situations just want the money now. It is very difficult to talk to them about budgetary services, because the very names of those services imply that people will have to put some limits on things. By the time people end up in a budgetary service it is often just too late. In my Papakura budgetary service, which does a great job, we have had instances where the debt has been $30,000.

KATRINA SHANKS (National) : It is my pleasure tonight to speak to the Social Assistance (Debt Prevention and Minimisation) Amendment Bill. This is a very sensible bill that addresses an anomaly in the system. In the past, people who were sentenced and entered prison could volunteer whether they were receiving a State benefit, a student allowance, or accident compensation. More times than not, they did not volunteer this information, and there was a delay in the matching process between the Department of Corrections and other organisations. As soon as people are sentenced and enter prison they cannot receive any form of benefit, whatsoever. This bill will start matching data from the Department of Corrections with all these other organisations, so if someone is receiving a benefit, that information will be matched off daily, so no debt will occur.

In the past there has been a delay, although systems have been in place. In the Social Services Committee a big concern was whether a person could be mistakenly matched and the benefit stopped. There may be two people of the same name and both receiving a benefit. One goes into prison and a benefit is stopped, but the wrong benefit has been stopped. There would be hardship associated with that. There were provisions in the legislation that allowed for people to be given written notice that their benefit would be cut because they were in prison, and they could contest it. There was about a 21-day process, before the benefit could be stopped.

Those processes were in place, but the current bill changes that. Instead of having to wait for 2 weeks, the identification is done daily. It is much quicker to identify the people whose benefit must be stopped because they have gone into prison. That is actually unfair, because people in prison have families. In the select committee we were very concerned about the hardship they would face because they had lost income into the home. We made very helpful suggestions in terms of putting Work and Income people in the courts, and then once these sentences were passed, they could liaise with the families in the courthouse, work out where they could go forward, the impact on their income, and whether they needed any additional assistance. The last thing we want for our vulnerable families is to have their income reduced instantly, when they have debts and commitments. We need things in place for those families, and especially for the children in those families. That was really important to our select committee, so we always had that issue at the front of our minds.

The select committee worked as a great team, I thought, and that is why National supports this bill. National thinks it is a very, very good bill. The unfortunate thing is that it took so long to get the bill introduced into the House. This issue is not new; beneficiaries who go to prison have been incurring debts for a long time, due to the slowness in the matching system. In that time a lot of debt has come about, because it has taken so long to get this legislation before the House and have it passed so it can be implemented. When we look at the statistics about debt, current beneficiaries owe $337 million, and former beneficiaries owe $426 million. That is a lot of debt, but the select committee was really concerned about how much of that debt was owed by people who were in prison and who also had families.

The statistics are actually very low for those who are in prison. We were told that 12 percent of them admit they are on a benefit; a very small proportion volunteered: “Yes, I’m getting a benefit, and it needs to be stopped instantly, otherwise I’ll have debt outstanding.” The bill provides for daily matching and that will be much better, and make the net much tighter. Of all those in prison who had their benefit cut, only 3 percent were matched to a benefit. Of that number, 115 had spouses and 5,185 were without spouses. That was a really interesting statistic.

I think the officials have just come into the Chamber to listen to this debate. I would like to recognise the work they did with the select committee; they gave us some fantastic advice.

Hon RUTH DYSON (Minister for Social Development and Employment) : I take the opportunity to take a brief call in the Committee stage of the Social Assistance (Debt Prevention and Minimisation) Amendment Bill, and to speak to Part 1, which deals with clauses 3 to 7. I first of all acknowledge the work of the Social Services Committee, and, in fact, all parties in the Chamber who have indicated support for the principle of this measure, which is to prevent unnecessary debt from being incurred by beneficiaries.

The part that we are dealing with is primarily in relation to the Department of Corrections, but the other two organisations that the legislation deals with are the New Zealand Customs Service and the Accident Compensation Corporation. The aim is to ensure that the information matches between those three organisations—the Department of Corrections, the New Zealand Customs Service, the Accident Compensation Corporation, and, of course, the Ministry of Social Development—have increased efficiency. The point of the part that we are debating at the present time is primarily to prevent debt being incurred by people in receipt of a benefit who go into prison. As the two previous speakers have indicated, the timeliness of the information exchange is critical in ensuring that that person does not get into debt unnecessarily.

The second point I want to make is that legislation like this has a principled purpose. It is good to see that all parties are supporting that purpose of ensuring that beneficiaries are not incurring debt that could be avoided. But I have to say that behind the principle, the legislation, and the procedure that has gone through the select committee and is now before the Chamber are a lot of very hard-working public servants, officials, and people who have been on the receiving end of a lot of very unfortunate attacks, over recent times. So I take the opportunity to thank not just the select committee for its work, and the other parties in the Chamber for being so conscientious in ensuring that, where they do agree on the principle of legislation, they put their petty party politicking to one side and support it constructively, as they certainly have with this legislation. I also hope those parties might take the opportunity to thank the public servants, who have no opportunity ever to respond to the attacks that they come under—in particular, from the National Party and the first speaker in this debate, Judith Collins.

I want to refer to Supplementary Order Paper 184 in my name, which is a technical Supplementary Order Paper. In case members have not had the opportunity to read it, I point out that it simplifies references to sentences of imprisonment; it omits references to corrective training, which was removed by the Sentencing Act of 2002; and it corrects a cross-reference that was made in error. With those brief comments, I commend the progress of this bill to the Committee.

Dr PAUL HUTCHISON (National—Port Waikato) : I must say that the Social Services Committee worked very well over the Social Assistance (Debt Prevention and Minimisation) Amendment Bill, and I would like to mention particularly my colleague Judith Collins, who made a strong representation on the issue of minimising hardship. I would also point out that my excellent colleague Katrina Shanks mentioned the great work done by the Department of Corrections. I think that the general spirit that the select committee worked with on this bill was excellent, and it shows how well Parliament can work when it sees that there is common sense to be followed.

But, of course, the big worry about this bill is what the Labour Government has been doing over the 8 years prior to bringing in this bill. I think that the statistics are fairly clear, and they show that Labour has dawdled over a very, very serious problem. It is a problem for which National is happy to be able to support a solution, but the facts of the matter are that when the Labour Government took office in 1999, this debt was $320 million, and by last year it was $760 million. That is a huge debt. In the words of, I think, Peter Hughes, a few years ago 49 percent of beneficiaries were in debt to Work and Income and now the figure is around 70 percent. That is a horrendously high number of Work and Income clients—beneficiaries who are in debt and who are particularly vulnerable to all sorts of challenges that may cause them to compromise their position and their families. To have a bill like this is over timely, and we are very happy to support it.

As the Minister pointed out, this bill will enable data sharing between the Ministry of Social Development, which administers the social security system and the student allowance system, and the Accident Compensation Corporation. These agencies are critical parts of the factor. The purpose in Part 1, which we are addressing, is to amend the Corrections Act, which is the principal Act in this part. It will make the appropriate amendments through the Social Security Act, the Education Act, the Student Allowances Regulations, etc.

We certainly know, as well, that during these last 4 or 5 years particularly, student debt has mounted enormously. Once again, that is a major problem. Under this Labour Government we have seen not only beneficiary debt mount to an extraordinary level but also student debt mount. I would have thought that the Labour Government would be much more interested in being assiduous to ensure that this sort of corrective legislation was put into place much earlier.

Clause 5 substitutes section 180 of the Corrections Act with a new section 180, “Purpose of section 180A”. The new section provides: “(1) The purpose of section 180A is to facilitate the disclosure of information, by the chief executive to the requesting department, for the purposes of the operation of all or any of” a variety of provisions. I think those provisions are pretty well covered. Previous speakers have made the point about minimising hardship, because there is no doubt that if prisoner suddenly find themselves in that position, and their families are not catered for and are penalised, then it can reflect pretty badly on them. We would want to be sure that the Labour Government is able to respond through this legislative mechanism to ensure that it does come about for families that are very dependent on a rapid response to this sort of legislation.

I remember that in the second reading of this bill we had Russell Fairbrother, the excellent chairman of the select committee, saying how efficient this Government is. Well, everything about this bill and this Government is, in actual fact, inefficient.

RUSSELL FAIRBROTHER (Labour) : Picking up on the point of my friend across the Chamber, I must say that I am an excellent select committee chair only because I am so lazy and let the committee members do what they want. We get through the work quite quickly as a result, but I do not take credit for anything else.

The argument that Dr Hutchison is reduced to running in this Committee amuses me somewhat. It is a shame when a man with great professional practice is reduced to running oxymoronic arguments. He said it has taken 8 years for the Labour Government to get around to bringing in this legislation, the Social Assistance (Debt Prevention and Minimisation) Amendment Bill. Well, let us think back. In 1999, when Labour came into power, the National Government had been in power for 9 years, and not once did it bring forward a bill such as this. So we could say of the last 17 years that the National Government did absolutely nothing for most of it.

The real truth—and it is hard to find; the officials do not know the real answer either—is probably a mixture of two things. First, when this inspired Government came into office in 1999 it met a run-down Public Service—the Public Service had been under attack through cost cutting, as had the beneficiaries—and the money was not there for the infrastructure development. It has taken this Government a long time to get the Public Service back on track, and it is not being helped by the current rhetoric and vague promises from the Leader of the Opposition, who says that he will bash the public servants and reduce their number, and all of those sorts of things that are endearing him highly to the public servants in Wellington. The public servants in Napier whom I speak to are just throwing up their hands in horror, because they work very, very hard. Not one of them believes that they put in less than a 10-hour day. They are worried about that rhetoric, which has no substance.

I will get back to the bill. The real truth in that complaint by Dr Hutchison is simply that it takes time for good things to evolve. It is accepted that this is a good bill. I do not really buy too much into grandiloquent arguments that there is some great moral cause in saving beneficiaries from accumulating debt, because I must say that in the 25 or 28 years I acted for many beneficiaries going to jail, I do not recall one of them worrying about the debt they had accumulated from doubling up on the system.

The really important part of this bill is that it is morally neutral but takes away the privacy rights of people who, for example, are going to prison or leaving the country. They forgo that privacy because the new section 180 enables the department that controls these individuals to disclose what is otherwise privileged and private information. But the price of doing that is greater efficiency so that debts are not being accumulated that must be recovered later on, which is always a more painful process. It makes for more efficient administering of our benefits system.

I do not see this legislation as necessarily having closed in on any great moral compass or on any great moral imperatives; it is really a sensible piece of infrastructural legislation that pulls together what has been 8 years of this Government building a sound and competent infrastructure of civil servants, public servants, and techniques such as computerised systems, which can work together.

The bill really says to the public of New Zealand that this Government is able to bring everything together to move us forward so that those people on benefits get their full and due entitlement—I do not see it as charity; I see it as a citizen’s right to receive a benefit in a time of need—and so that when their benefit time ceases there is less for them to worry about because, in return for forgoing their right to privacy, the system will pick up the time they cease the right to entitlement, and the benefit will stop there and then.

This is a reflection of a very good Government that has built infrastructure that will support a bill that on the face of it is as simple as this is. The complex issues are the release of privacy, and each beneficiary is effectively caught by the new section 180. But the price of that is that there is no further embarrassment down the road of collecting moneys wrongfully paid.

This is a good bill; it reflects a very good Government and a very, very good Minister who has brought this bill forward.

Nathan Guy: Who’s that?

RUSSELL FAIRBROTHER: The member obviously could not recognise quality if he fell over it, but we on this side of the Chamber appreciate the very good Minister—and her predecessor, who also did an excellent job in this field. This is a very good bill; we recommend it. It says to the public of New Zealand that this is the sort of thing they can expect from a very efficient, organised administration that cares for the populace of New Zealand but is also careful to make sure that the taxpayer dollar is spent wisely and prudently. It is coherent and cogent legislation. I recommend Part 1 to the Committee accordingly.

CHRIS TREMAIN (National—Napier) : I rise to take a brief call on the Social Assistance (Debt Prevention and Minimisation) Amendment Bill, particularly in regard to the purpose of the bill, which is the sharing of information between departments. I see here that the proposal is to share information between the Ministry of Social Development, the Department of Corrections, the New Zealand Customs Service, and the Accident Compensation Corporation. This is a fine purpose, and is the reason why National is supporting this particular bill and getting right behind it.

The point I particularly take up is the Minister Ruth Dyson’s call about National petty politicking around civil servants and the job they do. On the one hand, I agree with the Minister—the civil servants out there, in the large, do an amazing job. But these civil servants often have to cope with a very difficult system. The system has particularly let them down in the Hawke’s Bay over recent years. There are two cases I would like to highlight. The first one was a very difficult case of a young child sex offender who had committed a number of very serious crimes as a young man and had ended up back in Napier, being cared for by two minders and a supervisor. A constituent of mine came to me about it. This gentleman ended up climbing the fence some 14 times and putting at risk my constituent and her young daughter.

The fact of the matter was that no information had been shared—no information had been shared with the local police or within Child, Youth and Family between the Auckland division and the local department. So when this young lady found this gentleman over her fence, wondered what he was doing there, and subsequently found out he was a child sex offender, she became extremely concerned. When the lack of information sharing was subsequently found out, one had to ask whether there had been a breakdown in the system. On the other side of the coin, the civil servants were most concerned about this, and wanted to make sure that things were put right.

Another case is before us right now concerning a young man—an 11-year-old child—in my constituency, who has been difficult. He is in the guardianship of Child, Youth and Family as we speak. He went into its guardianship at the age of 8. He is a very difficult young man, and I am not going to stand up here and pretend he is an easy case to deal with, by any stretch. He was given a 3-month supervisory term up in the Auckland childcare facility, and after 3 months was released back to foster care in Wairoa. Within 4 hours this young child had moved on—had escaped. I guess that is what it was; he was put into foster care but escaped. That young man has largely been on the run—can members believe this—for some 3 months now. He actually hitchhiked to Hamilton. I put this in my own perspective. I look at my own 11-year-old boy and wonder how my 11-year-old boy could manage to hitchhike up to Hamilton. This young man did so and he ended up with the mob. He ended up back down in Wairoa, again with the mob, and ultimately ended up back with his parents. He committed a significant number of crimes and was taken back in by police. But he is now on the run again and has been committing a significant number of crimes again.

But I want to make the point here that in this case information sharing between the departments was not happening.

The CHAIRPERSON (Hon Marian Hobbs): It is a stretch of this legislation—not quite in this bill—but carry on.

CHRIS TREMAIN: The point I make is that National supports information sharing between departments. It is critical that information is shared so that children like that young 11-year-old—who is still on the run—can be helped. He needs to be under Child, Youth and Family guardianship. Information should be shared with the police so that they can help to capture him, and to allow some of these hard-working civil servants to do their jobs properly. Thank you, Madam Chair.

  • The question was put that the amendments set out on Supplementary Order Paper 184 in the name of the Hon Ruth Dyson to Part 1 be agreed to.
  • Amendments agreed to.
  • Part 1 as amended agreed to.
Part 2 Amendments to other Acts

JUDITH COLLINS (National—Clevedon) : It is my privilege again to speak on the Social Assistance (Debt Prevention and Minimisation) Amendment Bill—in particular, on Part 2 and amendments to other Acts. Of course, this really deals with the fact that other Acts, including the Injury Prevention, Rehabilitation, and Compensation Act, are to be amended, and also that the supply of arrival and departure information for benefit purposes is to be disclosed. We have had a very reasoned debate so far in the Committee tonight about the need for this, and I think that we have unanimously decided that it is good legislation to have.

I will address a few of the issues about the amendments to other Acts, in Part 2, and why it is that obviously it is now a lot easier to transfer information between various departments, and to collate it. I remind the Committee that is was not too long ago that we did not have mobile phones. When I first started practising law I remember when we got our first fax machine, and we thought that was really exciting. And I am not that old, at all, even though I may occasionally look like it.

Hon Ruth Dyson: I did not say anything—

JUDITH COLLINS: The Minister is very kind. Of course, she would not; I would look so young compared with her. It is not that long ago when we got our first laptop computers, and it is not that long ago that we actually got computers in Government departments, where front-line staff could access information from them. So it is really very important that we constantly keep up with new technology.

Today when we heard from the chief executive of the Ministry of Social Development about the Patterson $3.2 million fraud, one of the things he pointed out was the fact that it has been only in the last couple of years that the register of births has been computerised. That is because, basically, it has been a manual system ever since it has been kept. But the technology now exists so that this can be computerised and matching has become available. When the Department of Internal Affairs some years ago updated its passport system it went on to a computerised system, and I remember it was back in the 1990s that that happened.

Of course, we have changing technology, and this changing technology gives us all sorts of opportunities to detect and deal with fraud, and with identity fraud. It is also interesting to note that none of these instances we heard about today—which, as I recall, were about 124 different aliases—involved identity theft. Not one of them involved instances of this man Patterson going and looking in graveyards for the names of dead babies and stealing their identities, which are some of the instances we have heard of before in the last few years. So not only is technology moving on but so are the fraudsters. We will not just be able to pass this legislation and think “Well, that will be it; we don’t need to do any more.” We will have to come back to this as technology changes. Just because we cannot anticipate now what that technology, or its changes, will be, it does not mean to say that they will not happen.

So I think that it is incredibly important when we look, for instance, at the supply of arrival and departure information for benefit purposes, in Part 2, and at other amendments to Acts—those to the Customs and Excise Act, for instance—that we consider the fact that some people will set about making up their minds to cheat the benefit system, and to cheat the taxpayer. Those people are often extremely capable people. Certainly, Patterson showed himself to be extraordinarily capable in terms of technology and the use of it—so much so that the chief executive of the ministry has even written to Mr Patterson and suggested that the ministry can assist him to go straight after he comes out of prison. A letter on that matter was tabled today at the select committee, and I find that quite extraordinary. But of course this is a person with such talents, and it is amazing to think they have been misused in this way.

Certainly, when I was growing up we did not have the Internet. Many of us with children will say that if we have any new technology we get the kids to sort it out first, and then they can give us the dummies’ guide on how to operate it. I can see there is quite a bit of nodding around the Chamber. Some of us do not need to learn about it, because our children will do it for us, we think, but actually we should do it. We should embrace it and go with it. Unfortunately, this is what will happen—or we should say fortunately.

KATRINA SHANKS (National) : It is my pleasure to take a call on Part 2 of the Social Assistance (Debt Prevention and Minimisation) Amendment Bill. Part 2 is not too dissimilar to Part 1, for it talks about amendments to the Customs and Excise Act 1996 in relation to locating debtors, and to the Injury Prevention, Rehabilitation, and Compensation Act 2001, which concerns accident compensation. So Part 2 basically talks about matching the two agencies involved with those Acts.

I was listening to my colleague Judith Collins talk about technology. She has a great point. When I first came to work in the workplace, we had computers. They were not new technology to us; that is what we had gone through university with. We kind of forget that it takes a while for people who have not had them to catch up. It costs a lot of money for the infrastructure to put all these systems in place, and to get the technology, as it increases, to a point where it can interact with all the different systems through all the different departments. We see now in the departments’ financial reviews and budgets that they have huge amounts of money set aside for information technology development and software and hardware upgrades. It is absolutely true that the more information we get, the more it costs to have it and the more it costs to store it. We are getting to the stage now where the storage of the information we have uploaded is costing a huge amount to maintain, and, as technology changes and all the departments upgrade their software, those departments cannot read all the old information they have, because it is now in different technology and software. It is so important that we stay up to date. The matching of data in this bill is really the beginning of what we are seeing in this area of technology, and it will become a lot more complex, quicker, technical, and expensive, but at the same time it is the tool we are becoming more and more reliant on in the world we live in.

I think it is great that we are seeing this data matching beginning and happening through the different departments, but it is also important that we recognise that we have to invest in this technology all the time and keep at the cutting edge of it, because before we know it we will be able to match data with Australian databases, as well. This will come with time as we all become closer, because we are becoming much more global and more accepting of other people’s systems as we all get to the same playing field. New Zealand does have that distance and we have been a little behind compared with where things are in the United States and Australia. When I worked in London, the technology over there was a lot more advanced than it had been where I worked in New Zealand. That was a very good point that my colleague made.

This data matching is really important and I would like to tell members a little bit about it. I am reading the briefing paper that the Ministry of Social Development gave us, which is absolutely fantastic. Every time I get up to speak I always look at the ministry’s briefing notes, because we forget what the officials tell us. The briefing notes give us a lot of information when we are putting this type of legislation together. I would like to share a little bit on this aspect, because no one has touched on it so far in this debate. It is not that I want to read the briefing paper, because that is not a good thing to do, but I will tell members a little about what the ministry said about the Customs and Excise Act and how it currently does not allow the ministry to match data with the Customs Service for debt recovery purposes. This is not about identifying people and stopping the debt; this is about how the ministry matches data up once people have the debt, so the ministry is coming from a slightly different angle here.

I did not know this, but currently ministry staff issue individual notices manually under section 11 of the Social Security Act 1964, so it is still a very slow process. The number of notices issued by the ministry is significant. Currently it sends between 12,000 and 14,000 manual requests to the Customs Service per year. If members can just get their minds around how long it takes to process and match 12,000 to 14,000 manual requests—and to match them correctly—then they will realise that it all takes time and money. As we move forward in this process, it means that the information is often not able to be produced in an effective and timely manner, and the likelihood of debt repayment is also reduced. If somebody who owes a debt to the New Zealand Government comes into New Zealand from Australia, the manual process takes so long that the person’s 2-week holiday has come and gone before the information can be matched. The information on that person has only just been matched when he or she is on the flight back to Australia again. The ministry estimates that there are up to 20,000 people residing outside New Zealand who are no longer receiving a benefit and who owe approximately $70 million.

Dr PAUL HUTCHISON (National—Port Waikato) : I take this opportunity to speak on Part 2 of this Social Assistance (Debt Prevention and Minimisation) Amendment Bill, and, as my colleague Katrina Shanks said, this part amends two specific areas: the Customs and Excise Act 1996 and the Injury Prevention, Rehabilitation, and Compensation Act 2001.

I think that the points made about the huge changes in technology are absolutely relevant. For those familiar with Schumpeter’s curve, the logarithmic increase in knowledge that is happening on a minute-by-minute basis is an example of where data matching is likely to go over the next 5 or 10 years. I did notice in the regulatory impact statement that the most significant change proposed is the amendment to the Social Security Act to override section 103(1) of the Privacy Act. It was felt that this proposal carried some risks, including the low risk of a beneficiary being incorrectly identified as being in prison. However, strategies will be put in place to minimise such impacts.

Again, I would like to make the point that Katrina Shanks made, which was that the ministry was very helpful in collating its notes in this area and in summating the Privacy Commissioner’s views on this issue. The Office of the Privacy Commissioner said that it does not oppose this proposal to override section 103 of the Privacy Act, but it notes that this section provides a basic protection of the principles of natural justice when Government agencies operate automated information-matching programmes. The regulatory impact statement went on to say that the Office of the Privacy Commissioner recognises the social policy goals behind the proposed changes, but it is concerned that an amendment that overrides this fundamental protection is proposed. The ministry is introducing measures to mitigate these adverse effects, but the Office of the Privacy Commissioner believes that these can only reduce but not eliminate adverse effects from the proposed amendment, with some individuals having their benefits unjustifiably withdrawn.

As we know, whatever the data-matching system is, there will always be fallibility associated with it, whether it is a human failing or, as we all know, whether from time to time the computer crashes. I think that every one of us is familiar with that scenario, and I am sure that this will happen from time to time with this data-matching system, but we would also hope that within the next 5 to 10 years the technology will improve significantly.

I recall Russell Fairbrother, the chairman of the Social Services Committee, talking for a moment or two about the efficiency of this Government. I will read out a little bit of a letter that I received just a couple of days ago from a young lady who said: “Back in January of this year I decided that because of certain incentives created by the Government, I would be able to come off the DPB.” She said that she had been running a small website design business on a part-time basis to make ends meet, and felt the time was ripe to pursue this full time and leave the benefit behind. She had calculated: “With a $60 a week in-work payment, the family support, the accommodation supplement, and the child support coming directly to me,”—all very complicated—“I would be in a similar position to what I was currently in, being on the DPB. I would then be able to build up the business and start to move ahead.” But then she said that this was where things started to go drastically wrong. She said: “I had decided to put my trust in a Government department, only to be treated with absolutely no regard. My financial situation was of no concern to the many people I spoke to at IRD. Sure, they spoke to me, reassured me that all was well, then sat on their backsides and did nothing.”

I think it is important and relevant that although the chairman of the select committee suggests that the Government is efficient, we are getting letters like this on a daily basis as constituent MPs. It really is worrying when the departments that are involved in this bill—the Ministry of Social Development, the Accident Compensation Corporation, and the Inland Revenue Department—are all associated with huge inefficiencies and concerns expressed by people out there, all over New Zealand.

  • Part 2 agreed to.
Clauses 1 and 2

JUDITH COLLINS (National—Clevedon) : As National members have stated tonight, we support this bill. We support clauses 1 and 2. We are of the view that this is good legislation. It is not often that we say that, but we do so with regard to this bill because absolutely amongst our core beliefs is the belief that the benefit system should be efficient and fair. People should be able to properly access benefits when they are in need, but they should do so for themselves and not for people who are either dead or not actually in existence. We are particularly concerned about making sure—and we have canvassed this rather fully tonight—that when benefits are paid, they are paid to the right people, they are paid for exactly the right amount of time, and they are not overpaid.

I stress that, not to be mean to people who receive benefits for a week or 2 weeks longer than they should. I say that because if someone is overpaid a week’s wages or a week’s benefit, that is normally quite a lot of money for that person. Whether someone is paid $500, $300, or $200 a week, a whole week’s wages is a lot of money. For the people we are talking about—people who are absolutely on the breadline, people who are very much in that situation—1 week’s pay is a huge amount of money. They are not people generally with savings; they are not people generally with credit cards they can just whisk up. If they have to go and pay back money they often end up with a loan shark, which is a situation we do not want to see them in. Certainly, it is incredibly important that with a great big Government department, a department that looks after $18 billion of taxpayer money—I said “looks after” but I meant “pays out”; the amount has actually gone up under this Government, not down—it is absolutely incumbent on that bureaucracy, with its staffing, to be able to cope with the benefits system. It is incredibly important that it does so.

I note that one of the things we recommended in the select committee—we certainly talked about it—was the need for some sort of assistance to be available in courts, and for representatives in the major courts to be able to adjust benefits immediately when a recipient is imprisoned. We said that to prevent a situation when someone is imprisoned on, say, a Friday, a weekend, or some time like that when the benefit system does not really work, yet still receives the benefit. We want to make sure that that person’s benefit is immediately adjusted to avoid the very situation we are trying to prevent, which is that of people going into prison and then receiving benefits.

I think it is also worth noting that it was not that long ago when there was a bit of a scandal about people in prison accessing student loans. It caused a great deal of embarrassment to the Government—hence the need for student loans to be mentioned specifically in this legislation. There was a situation where a fraud was going on—a matter of only a couple of years ago—with hundreds of people accessing student loans from prison, when of course that was not necessary. Even with the technology that was available then, the technology was still not being properly used. That is why it is incredibly important that we have this legislation.

I do not believe that the public of New Zealand see a lot of difference between one Government department knowing information and another Government department knowing that information. Most would have thought that it was just a matter of course that the Department of Corrections, when it received a prisoner listed as being on the sickness benefit, the invalids benefit, or the unemployment benefit, would actually be checking to make sure that Work and Income knew about it. But of course under the incredible political correctness that has absolutely permeated this country for the last few years, it is almost unthinkable that one Government department would talk to another unless it had permission to do so. I understand there may be legislation put in place to stop them from doing that; I do not know why there would be such legislation. I understand that most people think back to the days when people in the Public Service felt free to be able to express their views and felt free to talk to each other without being frightened of reactions.

  • Clause 1 agreed to.
  • Clause 2agreed to.
  • The Committee divided the bill into the Corrections (Social Assistance) Amendment Bill, the Customs and Excise (Social Assistance) Amendment Bill, and the Injury Prevention, Rehabilitation, and Compensation (Social Assistance) Amendment Bill, divided into Corrections (Social Assistance) Amendment Bill| Customs and Excise (Social Assistance) Amendment Bill| Injury Prevention, Rehabilitation, and the Compensation (Social Assistance) Amendment Bill| pursuant to Supplementary Order Paper185.
  • Bill to be reported with amendment presently.

Human Tissue Bill

In Committee

  • Debate resumed from 11 March.
Clauses 1 and 2 (continued)

The CHAIRPERSON (Hon Clem Simich): The question is that clauses 1 and 2 be agreed to. The first question is that clause 1 be agreed to. Those who are of that opinion please say “Aye”, of the contrary opinion will say “No”. The Ayes have it. The question now is that clause 2 be agreed to. Those who are of that opinion please say “Aye”, of the contrary opinion will say “No”. The Ayes have it. I shall report this bill with amendment.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : I raise a point of order, Mr Chairperson. Is this the Human Tissue Bill?

The CHAIRPERSON (Hon Clem Simich): That was the Human Tissue Bill.

HONE HARAWIRA: My apologies. Am I allowed to record the Māori Party’s opposition to the bill? I thought we were still doing the Social Assistance (Debt Prevention and Minimisation) Amendment Bill.

The CHAIRPERSON (Hon Clem Simich): Yes, we have been moving fairly quickly. I suggest you seek leave to do that.

HONE HARAWIRA: I seek leave to record the Māori Party’s vote on the Human Tissue Bill.

The CHAIRPERSON (Hon Clem Simich): Are you going to call for a party vote?

HONE HARAWIRA: Yes, please.

The CHAIRPERSON (Hon Clem Simich): On both questions? On clauses 1 and 2?

HONE HARAWIRA: Yes.

The CHAIRPERSON (Hon Clem Simich): Leave has been sought for that course to be followed. Is there any objection? There appears to be none. The decisions made in the last 2 or 3 minutes are null and void. We will go back to the start.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 115 New Zealand Labour 49; New Zealand National 48; New Zealand First 7; Green Party 6; United Future 2; Progressive 1; Independents: Copeland, Field.
Noes 4 Māori Party 4.
Clause 1 agreed to.

A party vote was called for on the question, That clause 2 be agreed to.

Ayes 115 New Zealand Labour 49; New Zealand National 48; New Zealand First 7; Green Party 6; United Future 2; Progressive 1; Independents: Copeland, Field.
Noes 4 Māori Party 4.
Clause 2 agreed to.

Copyright (New Technologies and Performers’ Rights) Amendment Bill

Second Reading

  • Debate resumed from 23 October 2007.

RUSSELL FAIRBROTHER (Labour) : It is my pleasure to speak on the second reading of the Copyright (New Technologies and Performers’ Rights) Amendment Bill. This is important legislation, if only because it updates an Act that is now 14 years old. In our digital age an Act that is 14 years old is aged indeed, because when the Copyright Act was originally passed in 1994 the Internet was just a babe in arms; it was a concept that was not used much in this country. The term “Internet service provider” was strange to most people, but those providers are now part of the daily bread and butter of most people in this country from about the time they turn 7.

The Copyright Act achieves a very fine balance between the need to protect intellectual property and the need to enable access to it by people who would benefit from developments of the human mind. The bill maintains that balance in the Copyright Act 1994 between protection and access, which has stood the test of time. But what the bill does is meet the challenge of the emerging technologies. We see this a little bit in the debate over section 88, which the original bill repealed. The Commerce Committee, considering it at a tangential approach, reinstated it. I think it will now be repealed by way of a Supplementary Order Paper. It deals with cable programme services being retransmitted without the permission of the broadcaster. The concern of the Commerce Committee seemed to be that free-to-air television in remote areas would be affected by that. The Supplementary Order Paper will address that.

This bill has a common-sense approach to the difficulties of Internet service providers. They cannot monitor all the time all the content that goes through their gateways, but once they are on notice that there is infringing material, it is incumbent upon them to take steps to remove or block that infringing material. This is what is known as “notice and takedown”. Once Internet service providers are reasonably on notice that there is an infringement of copyright, then they must react in a way to protect the copyright. If they are not aware, then they are immune from prosecution and other steps that could lead them into a situation of being answerable.

On a wider approach, intellectual property in New Zealand is an area of law that is still emerging. There are specialists on it, and there are one or two textbooks on intellectual property. It is a fecund area of the law that is ripe for development, and copyright is one of the earlier types of intellectual property in the development of our law. Copyright is often misunderstood; people think they need to take out some form of patent or whatever, but copyright occurs when one asserts ownership of a particular piece of intellectual property. The assertion of ownership is often sufficient to satisfy the copyright requirements. Assertion of ownership can be in many forms, such as a declaration that the property is an original work, or the adoption of the copyright symbol ©, which we are all familiar with, or another form of assertion of property. Copyright is one of the more fundamental property rights we have in this age of technological and intellectual development.

This bill updates the 1994 Act. It does not seek to change the basic concepts therein, but it certainly brings the matter quite fairly and squarely, as the select committee acknowledged, into the 21st century. One can only speculate that in 15 years’ time, for reasons that are not apparent to us today, there will need to be further changes. We always think that things that are modern and exciting today will be modern and exciting for all time.

Hon Clayton Cosgrove: Like Bob is!

RUSSELL FAIRBROTHER: Back in 1994, before people knew of Clayton Cosgrove, he was modern and exciting, and we are all now excited by his presence and the way he will lead this Labour Party to successive years of good governance by following the pattern of our present leadership, Helen Clark and Dr Michael Cullen. On this side of the House we have considerable confidence in the intellectual ability of Clayton Cosgrove. In fact, we assert copyright over the Minister. We think he is a product of this great Labour Party. He is taking on the terrible people in the Real Estate Institute with great courage. He went through the Weathertight Homes Resolution Service like a dose of salts and gave everybody the trots, and the Hon Shane Jones is now picking up that role like absorbent toilet paper. We have now turned Clayton Cosgrove on to the real estate agents. By our adopting our good friend Minister Clayton Cosgrove, we are asserting our copyright over his intellectual property. I know that some on the other side would say there is not a lot of intellectual property there, but I simply say that Clayton is one of the biggest secrets out there. Until one is faced with the intensity of his concentration, one cannot appreciate the depth of the intellectual property contained in that up-and-coming Minister. I look forward to serving 20 more years in this House under the future leadership of Clayton Cosgrove.

I go back to the Copyright (New Technologies and Performers’ Rights) Amendment Bill.

Hon Darren Hughes: What about Ruth Dyson and Darren Hughes?

RUSSELL FAIRBROTHER: I am happy to talk about Darren Hughes. It is a change for him not to talk about himself. I think I should have a chance to talk about him, as a bit of light relief. I was approaching retirement when my friend Darren was going to school.

We see in this copyright bill strange terms such as “format shifting”, and I ask members of the House what they understand “format shifting” to mean.

Hon Darren Hughes: It’s the National Party policy process!

RUSSELL FAIRBROTHER: That could well be correct, except that would be “formats shifting”. “Format shifting” is the sort of thing this bill works on. It is a term used in the music industry. It is tackled by this amendment bill, which aligns the law with the public’s needs so that we can protect our domestic artists and we can encourage the cultural industries and pursuits in this country.

That makes me realise that in the time of this Labour Government the amount of work by local artists being played on our radios has multiplied considerably. I remember—say, in 1999—that we would be lucky if 10 percent of air time was taken up by local artists. These days if we pick up almost any radio station, we will hear, sooner than later, a local track by a local artist, and we will hear that artist being praised as though he or she earns a place in the pantheon of artists across the world—and this country is much the better for it.

The Minister responsible for this bill, the Hon Judith Tizard, also happens to be the Minister responsible for bringing our local artists to the fore on the airwaves, and her promotion of local music and local content is one of the benchmarks of this Government, which encourages intellectual development and the creative industries. People often laugh at the creative industries; people often underestimate how important they are. Creative artists in this country are not bound by the pursuit of the dollar; in fact, their lifestyle often denies the importance of money. A strange synergy occurs in that they produce works of art of considerable value, with the fruits of that value often denied to the artists themselves. When we reflect that so many of our artists die in a state of poverty, but the ultimate owners of their works live in a state of considerable richness, it underscores the importance of these concepts of intellectual property, which, reduced down to their basic essentials, find their way into the bill that is before us today.

So, without wanting to delay this matter at all, or to cover matters that are not relevant to the bill, I simply want to say that this bill is part of the wider reform process to ensure that intellectual property legislation is up to date and relevant, and takes account of international developments. As members of the House will realise, we cannot have intellectual property and copyright in isolation. Copyright is essentially a tool of the global market, and we must be ready to protect our own artists from the influences of the global market. We must be able to protect that which we produce, and to market it across the world, and that requires the vehicle of an amended Copyright Act 1994.

Although this Act has spent only 14 years on the statute book, it is increasingly featured in our litigation, and case law is building to reflect that. This amendment is timely and brings in the new concepts. I imagine that in 10 years’ time there will be a need to further amend it, not because of deficiencies in the select committee work or deficiencies in the bill now before us, but because the changing landscape of the intellectual and creative sectors will demand that this House be responsive with amending legislation. I am delighted to speak on the second reading of this legislation tonight and I commend it to the House.

Hon CLAYTON COSGROVE (Associate Minister of Justice) : I rise to support my colleague in respect of the Copyright (New Technologies and Performers’ Rights) Amendment Bill in its second reading. I thank Mr Fairbrother for his very complimentary comments; I am a humble servant compared to that member.

It is a fundamental human right for citizens to protect their own intellectual property. I do not believe that anybody in this House—there may be one or two—would argue with that. In a former life I was occupied as an employee in the telecommunications industry, and I know that in that industry the nature of copyright protection of intellectual property has changed very much because, as we know, technology evolves. Unlike, for instance, the written word—the book—technology evolves day to day. One minute it is CDs, then it is DVDs, then it is hard disks. Computer technology and telecommunications technology is changing by the day—as is latent artistic talent—so it is timely that this bill, which amends the Copyright Act 1994, has been brought forward and promotes, as has been noted, a legal framework that will provide protection in the use of copyright material.

One could cite various breaches of fundamental copyright and intellectual property. For instance—

Russell Fairbrother: Sadly so—sadly that’s the case.

Hon CLAYTON COSGROVE: My colleague, a learned lawyer, says that is sadly the case. For instance, as an example of what this bill will remedy, one could make an argument that the National Opposition has breached copyright. One could argue—

Bob Clarkson: What? Why, you can talk!

Hon CLAYTON COSGROVE: I say to “Sir Les Patterson” over there, who is interjecting, that one could argue that National has breached copyright because it has adopted—and I am sure Mr Brownlee would agree with this—a large number of the policies of this Government. I am no lawyer; I know Mr Chauvel—

Gerry Brownlee: That would be right!

Hon CLAYTON COSGROVE: Neither am I a woodwork teacher, like Mr Brownlee. Unlike Mr Fairbrother I am not a legally trained person, but one could, I think, make a cogent argument—

Gerry Brownlee: What are you? What are you then?

Hon CLAYTON COSGROVE: Mr Brownlee is so light that he could tap dance on a chocolate éclair—after he had eaten it, of course.

But one could make an argument that the National Party, in adopting KiwiSaver which it was against, in a legal sense—and I do not know; I ask learned colleagues—could have breached the intellectual property rights of the Labour Party and the Labour Government. One could argue that members of the National Opposition, in saying they were against climate change and then saying they were for climate change and effectively adopting the Government’s policies, could indeed have breached intellectual property rights. We know that the policy of interest-free student loans was a policy they vehemently opposed day after day, and then they adopted the Government’s policy. One could make an argument, perhaps in a different place, that those members have breached intellectual property rights and the copyright that is the Government’s, because those policies were and are very popular Government policies.

It is likewise with the nuclear-free policy. That is an intellectual idea—therefore it is intellectual property—adopted, promoted, and cemented down in our legislative framework, that was bitterly opposed for years and years by that crew over there, then suddenly in a road to Damascus experience, it was adopted by the National Party. One could argue that that is a breach of copyright.

Then we come to a more precise example that I think is probably even more germane in a technological sense.

Chris Auchinvole: That’s a big word!

Hon CLAYTON COSGROVE: For Corporal Jones over there, or Captain Mainwaring, “and” would be a big word. “But”, “ah”, or “um” would be big words for that member. But I say to him that a very high profile breach of copyright occurred in this House. It was in respect of new technology that is used every day, so it is a very germane example to illustrate what will be an effective policing and legislative regime under this legislation. The breach was when the National Party, in the form of Mr Key, released its infamous DVD, which, I think hit the “worstsellers” list. I think the DVD was called Ambitious, or something like that. I am told that the DVD used a song by a group called Coldplay. Mr Hughes, who is a lot younger than me and a lot more hip, savvy, and trendy, could, I am sure, elucidate for hours on this band; I had not really heard of it.

Hon Member: What?

Hon CLAYTON COSGROVE: It was a band called Coldplay, and that band called Coldplay apparently had a song called “Clock”—and I pronounce that very precisely for very obvious reasons. Apparently what happened was that the National Party released the DVD—

Gerry Brownlee: I raise a point of order, Mr Speaker. I have been listening to this member for quite some time now, and although most of what he said passes without much comprehension because it is incomprehensible, I did pick up the word “clock” in his comment. I ask you to look at the clock, because he has been talking so long I am convinced the clock in this House has broken.

Hon CLAYTON COSGROVE: That is a powerful point of order from that member.

Mr DEPUTY SPEAKER: There is no comment on that; it was a correctly sought point of order because it was on procedure.

Hon CLAYTON COSGROVE: On your behalf, Mr Deputy Speaker, and the House’s behalf, I would like to thank that genius—the intellectual giant Gerry Brownlee—for his massive, massive contribution. It is the greatest irony in the House that Gerry Brownlee is the National spokesperson on energy; that is the most ironic thing I have ever heard.

I will get back to the example of a breach of intellectual property. The National Party released a DVD that, as was seen, had a piece of music from a band called Coldplay and the piece of music is apparently called “Clock”. But learned members may ask why that would be a breach of copyright. It was apparently because—

Hon Annette King: “Clocks”.

Hon CLAYTON COSGROVE: The title is “Clocks”, I am told by the trendy member from Rongotai. Apparently it is a breach of copyright, because if one publishes something that belongs to others—an original idea; in this case a piece of music—and does not seek their permission to use it, one effectively flogs it or steals it, and that is a breach of copyright because one does not have their permission to use it.

Often with copyright, of course, come royalties. If one seeks a musician’s permission to play a piece of music in the way the National Party did with that promotional item, normally one would pay a royalty—but not these guys. They are too mean of spirit and mean of character—and mean, full stop. So the National Party did indeed breach a copyright of intellectual property. It did not seek permission from that band called Coldplay. It used the song, “Clocks”, in the strange DVD that nobody really takes any notice of anyway.

Hon Annette King: It had to be withdrawn.

Hon CLAYTON COSGROVE: It had to be withdrawn by the man who is ambitious for New Zealand but cannot understand what the law means—and that was a breach of intellectual property law that this legislation seeks to remedy.

The legislation is flexible, however. We do not want iron-clad laws, because Mr Brownlee—who, I am told, as a band member of the “Minetti Brothers” might have put out a CD—may want to copy that DVD on to his iPod; I am sure he has. This legislation will allow him, within the privacy of his own dwelling as it were, to copy his Steve Martin records, or whatever. It will allow people, for their own use, to copy from a tape or a DVD to their own iPods. It will allow people to do that without committing a criminal offence. It will not allow anyone to copy a disc and then provide it to others for their use, but it will allow a person to do that for his or her own use. Of course, Mr Brownlee objects. Mr Brownlee is the No. 3 - ranked member in a party that was so knowledgable about intellectual property rights and copyright law that it breached that law very simply by putting, without permission, without royalties being paid, a tune by Coldplay on its DVD. So listeners and members can—

Hon Ruth Dyson: Coldplay is a good name for them.

Hon CLAYTON COSGROVE: Yes, it is a good name for those members, my colleague says.

Gerry Brownlee: Look, if I wasn’t here you wouldn’t have a speech.

Hon CLAYTON COSGROVE: No, but the pantry would be a lot fuller in Bellamy’s. So the point is that members can take the word of Mr Brownlee, the resident expert on copyright—whose party breached it—or they can look at this learned piece of legislation that is designed to prevent those breaches, protect our artists, our musicians, and others, so that they get their fair share—[Interruption]. I thank the orange roughy in the corner, squawking away. Maybe we could copyright that sound. I do not know whether anybody would want to copyright that sound, or whether there is any intellectual property right to protect us from that member. I doubt it.

But this law—and it is a sound law—seeks to bring us, as Mr Fairbrother said, into the 21st century, in order to protect those artists, and to protect the rights of people who generate ideas so they can gain from them in a legal sense. So I say in closing that I support this law. I look forward to the National Party making an intellectual contribution. I look forward to Mr Clarkson, of course, and to others making an intellectual contribution. Then we shall see whether they will elucidate and tell us how they managed to breach the law of copyright.

Hon DARREN HUGHES (Deputy Leader of the House) : I am motivated following the speech made by my colleague and friend the Hon Clayton Cosgrove, that very trendy member, as he volunteers himself to be with regard to talking about the Coldplay CD. I think it is really important that Parliament does not let the Copyright (New Technologies and Performers’ Rights) Amendment Bill just slip by in its second reading without asking the National Party members to engage in the debate on this bill. So many of the things this bill covers directly relate to National’s daily experience here in Parliament. I know that the bill does contain ways in which we can ensure that intellectual property plays a major role in moving towards a knowledge-based economy. I know those are very big themes for the parliamentary Opposition to try to explore.

There are two particular provisions in the bill as reported back from the Commerce Committee that I thought were worth the attention of the House tonight. The first is the provision that allows for copying for educational purposes. There is no better example of copying for educational purposes in our Parliament than when the National members come in with their Xerox machine and start photocopying Labour-led Government policy to try to help them out. I want to know from the select committee’s deliberations whether they see these breaches of the Copyright Act as being something that the Parliament should be concerned about. Mr Cosgrove started off—and this got me thinking about it—by noting all the times when the Government has brought policy to Parliament and the National Party has copied it for educational purposes. So many of the things those members have tried to do, they used to be against and now are for.

Gerry Brownlee: Name 10!

Hon DARREN HUGHES: The member says “Name 10”. Why is he cutting me so short? Why is he being so unreasonable and trying to bully me, and shut me down to mentioning only 10 policies the National Party has copied for educational purposes, which the select committee has reported on in terms of this bill?

Let us start with the educational one. I see the deputy spokesperson on education Mr Peachey over there. Let us start with the interest-free student loans policy. That apparently was the biggest bribe in New Zealand’s political history. Do members remember hearing that? The National Party said at the last election that Labour was low down and that we were stealing the election because we offered that policy to the country. John Key then said “Hang on, we lost the election on that.” But that does not quite explain why Mr Key came back into Parliament after the election, got up in this House, spoke against the bill that gave us interest-free student loans, and then carried his motley crew of 48 out into the Noes lobby and voted against the interest-free student loans policy, which they have now copied for educational purposes in terms of this bill. So I want to know from National members whether interest-free student loans are a bribe.

Mr Guy is very quiet. I remember him on the campaign hustings in my area saying it was a terrible bribe, and tonight in Parliament, having been elected here, he says absolutely nothing about it.

Hon Clayton Cosgrove: The bellows have closed.

Hon DARREN HUGHES: Even Mr Brownlee is very quiet, but I do not think Mr Brownlee has ever had to worry too much about a student loan. I do not think that is one of the things on this balance sheet he has been all that concerned about, only, of course, because his age meant that was not available, as opposed to any eligibility issues in that respect. So he asked me for 10, and I have given him one. I am 10 percent there.

Then I thought about copying for educational purposes. Throughout history, of course, we learn from the errors of our ways, and what better way than when peoples go to war and are in conflict? The National Party has copied the Labour-led Government’s foreign policy on the Iraq war—I think. I am not quite sure whether it has copied that. It might be one of those copyright changes—

Charles Chauvel: It depends on who they are talking to.

Hon DARREN HUGHES: It depends on who they are talking to. I thought it might have been a bit like when they copy a movie and we are watching a DVD and all of a sudden someone’s head pops up, because it has been filmed in a movie theatre—it is almost a copy.

Hon Annette King: It’s a blooper.

Hon DARREN HUGHES: Well, there are 48 bloopers sitting opposite. But sometimes we think something has been copied, and we think it is the genuine article, then someone’s popcorn runs in front of the screen and we know it is only a partial copy. So I am not sure whether the National Party’s shifting seats around the Iraq war will come under the ambit of copying for educational purposes under this bill.

One thing that will, though, is climate change. That used to be the biggest hoax that had been perpetrated on the country. I remember all the inane, immature little jokes that National members made as they giggled across the hustings about a “fart tax”. They giggled and they laughed. They thought it was wonderful to mention such a naughty word, and that was their entire approach to climate change. But now it has been copied for educational purposes, under this amendment bill, and they are in favour of it.

Well, one thing we know about the National Party members is that they love holidays. These people were born not only to rule—they think—but also to holiday. I see Mr Auchinvole laughing, because he often works into the early hours of the afternoon. He is one of the more dedicated ones. He thinks he should be the union rep for the National Party. He is so busy, working there.

Gerry Brownlee: You know that because you see him on your way home.

Hon DARREN HUGHES: Mr Brownlee speaks up because he is programmed to interject every 15 minutes, and I welcome his contribution to the debate. National members were against 4 weeks’ annual leave for working people, even though they take 8 or 9 weeks themselves. They thought it would bankrupt the economy. It was a cost to employers, they said. They said the Labour-led Government does not understand business. They said we were piling on compliance costs and doing all these terrible things. They said it would be the end of capitalism if we had 4 weeks’ leave like Australia, the United Kingdom, and so many of the European Union nations. Now, despite their outright opposition—guess what? The National Party policy is for 4 weeks’ annual leave. It turns out that it does not destroy the economy after all while they are busy on holiday.

There is another thing they copy. During the 4 hours we spent on the financial review debate, I heard them criticising Government departments that have employees earning more than $100,000. There is one organisation in New Zealand where everybody earns over $100,000. They are useless, lazy, and incompetent, but we pay them because it is the right thing to do. I refer to Her Majesty’s loyal Opposition in that regard, all sucking up the 100 grand and then complaining bitterly about some departments having some people who earn over $100.000. Who honestly thinks that Sandra Goudie is worth over $100,000 of intellectual firepower a year? Who thinks that? Not one member of the National Party put up his or her hand, although Gerry Brownlee is worth $100,000 a year.

Gerry Brownlee: I raise a point of order, Mr Speaker. I am sorry to interrupt the member but he asked a question. He speaks at a very fast clip, and as he has explained to the House numerous times, such speed is not something I keep up with, so perhaps he could just ask that question again.

Mr DEPUTY SPEAKER: Thank you.

Hon DARREN HUGHES: He wants me to go more slowly than this. I wish I was on a strategy committee chaired by Gerry Brownlee. I think it is a great thing that Gerry Brownlee is in charge of National Party strategy—we are very pleased about it.

Gerry Brownlee: Working well at the moment!

Hon DARREN HUGHES: Oh, no, the member should just wait. Who thinks the National Party has had a good parliamentary session in the last 3 weeks? Who has been really proud of their leader in the last 3 weeks, as they have ducked and weaved? Who has been? Not one hand goes up. Look at them. Chris Auchinvole puts up his hand, but one would hardly take his political advice seriously. He is greasing up because he is hoping to be made an associate spokesperson on something. So that is the only reason he would think that.

What we have seen is that when National Party members have been so very busy trying to decide what their policy position on things has been during the past 3 weeks, it has been clear that they need the Copyright Act repealed, because they need to copy absolutely everything. The National Party should not vote for this bill tonight, because it should not have law on the books that stops it thieving and nicking other people’s policies in our country.

The National Party makes a big play about its cosy relationship with the Māori Party. I wonder how many of these National MPs have told the Māori Party that all of them, except for one, voted against the Māori Television Service Act when it came through Parliament. Every single one of them said it was political correctness gone mad, because that was the time when all the National Party members used to say “One standard of citizenship and one law for all.” Is it not amazing that all 48 of them now say “Oh, that wasn’t us, that was just one man—Don Brash. He’s gone now. Tehei mauri ora! Nekeneke mai. We’re are all on board.” This is ridiculous. They all stood there and mocked the Māori Television Service Act when it came through, and now they have copied it for the purposes of education.

There is one other area, before Mr Brownlee seeks an extension of time for me, that I want to cover. It is the part of the bill that refers to orphaned works. I think it is really important. It is when intellectual ownership is no longer asserted by an organisation and it becomes an orphaned work. I want to know from the next National Party speaker whether that covers their policy on privatisation. That could easily be described as an orphaned work, because it used to be National Party creed. But now, apparently, it has been totally abandoned by the National Party as an orphaned policy. I want to know from the National Party speaker whether its policy on the primary industries is now an orphaned policy, because it has totally abandoned that as being absolutely out of tune.

Mr Cosgrove mentioned Chris Martin from Coldplay. National members were playing cold last week when they got the Fast Forward fund completely wrong. However, when that fund delivers right across the agricultural sector for the next 10-15 years one should watch the National Party try to claim credit for all the great things that come out of it, but it opposed that last week. National members must be cringing because they know they got every single part of it wrong. Everyone else who should be in favour of it is; even the Hon John Luxton is in favour of it.

There are a whole pile of National Party policies that I believe it has copied. The National Party has weaved and ducked. It has tried to abandon some policies and to say that they are now orphaned works. I think it will be a bit like that stage show Annie, where she grows up thinking she is an orphan, but her parents turn up in the end. The parents of the National Party are Roger Douglas and the old far-right economic theory, where they privatise, sell, cut taxes, cut spending, cut the pension, do not look after the people, and look after all their mates. National Party members should vote against the bill because they are just a bunch of photocopiers.

  • Amendments recommended by the Commerce Committee by majority agreed to.

A party vote was called for on the question, That the Copyright (New Technologies and Performers’ Rights) Amendment Bill be now read a second time.

Ayes 109 New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland, Field.
Noes 10 Green Party 6; Māori Party 4.
Bill read a second time.name changed to Copyright (New Technologies) Amendment Bill

Electricity (Disconnection and Low Fixed Charges) Amendment Bill

Second Reading

Hon DARREN HUGHES (Deputy Leader of the House) on behalf of the Minister of Energy: I move, That the Electricity (Disconnection and Low Fixed Charges) Amendment Bill be now read a second time. This bill has two small parts. The first part amends the definition of a “low-use consumer” in the Electricity Act 1992 so that regulations can be made that will enable a greater number of low-use lower South Island customers to benefit from a low fixed-charge tariff option.

The low fixed-charge regulations were introduced in 2004 to provide low-use consumers with a tariff option that is more equitable for low energy usage and compatible with the Government’s energy-efficiency objectives. At present these regulations require networks and retailers to make available a low fixed-charge tariff option to all domestic consumers whom they service and who have consumption at their primary dwelling of less than 8,000 kilowatts per annum. However, the 8,000 kilowatts threshold has resulted in far fewer consumers in the lower South Island being on the low fixed-charge tariff than in other regions, due to the fact that power tends to be used for heating in colder regions.

This bill alters the definition of a “low fixed charge consumer” from a fixed threshold of 8,000 kilowatts, as currently defined in the Act, to a definition to be provided in the regulations, so that different regional locations and averages can be used. The Labour-led Government believes that this will be more equitable.

The bill will also extend the Minister’s powers to grant exemptions from the application of the regulations to electricity distributors or retailers. This change is directed at small, isolated networks that are not connected to the national grid where the cost of servicing consumers can be far higher than is normal for grid-connected networks.

The second part of the bill responds to the recent concerns about the disconnection practices of electricity retailers, particularly with regard to vulnerable consumers. It amends the Electricity Act so that regulations can be made if electricity companies do not follow the disconnection guidelines developed by the Electricity Commission. The Act does not currently contain sufficient powers to regulate disconnection processes or to regulate the full content of these guidelines. The bill consists of regulation-making powers. It does not alter any of the existing processes or requirements in the Act relating to the making of regulations.

I would like to thank the Commerce Committee—on this occasion all the members of the Commerce Committee for their consideration of the bill—as well as persons who made submissions to that committee. The committee received and considered 11 written submissions and heard four oral submissions. The Commerce Committee was unanimous in its report back, and the only amendment to the bill was a drafting change that was recommended by officials in order to simplify the bill. Apart from this amendment the bill will proceed in the same form as was initially introduced by my colleague the Hon David Parker. The fact that it is proceeding largely unchanged and received very few submissions shows that the bill has widespread support.

Chris Auchinvole: Oh!

Hon DARREN HUGHES: Well, the member’s party is supporting it so I will give the member the charity of my silence.

Once the bill is passed the Minister will finalise new regulations that will enable a greater number of lower South Island consumers to benefit from a low-fixed charge tariff option. The regulations will set the threshold for the lower South Island initially at 9,000 kilowatts, which is the average domestic consumption level for this region.

Regarding disconnections, this bill will enable regulations to be made that will protect vulnerable consumers, for example, by regulating arrangements regarding the process for disconnections following non-payment of accounts, reconnection, billing information and processes, alternative payment options such as smooth payments, redirection of income and debt recovery, and also the process for identifying consumers who would be at risk if their electricity was disconnected.

I hope that the disconnection-related powers conferred by this bill will never need to be used. I am confident that electricity retailers will continue to work positively as they have with the Electricity Commission to ensure that the disconnection guidelines are adhered to. However, the regulation powers in the bill will act as an important backstop if the voluntary process that is available at the moment proves to be ineffective. On behalf of the Minister of Energy, the Hon David Parker, I commend this bill to the House for its second reading.

GERRY BROWNLEE (National—Ilam) : The National Party is supporting the Electricity (Disconnection and Low Fixed Charges) Amendment Bill through its second reading, because who could argue against the idea that vulnerable New Zealanders should be protected from the ravages and difficult times associated with having their electricity cut off? It should be very clear that the disconnection requirements, or the enabling aspects, of this bill are not necessarily new for any of the energy companies.

What a lot of New Zealanders do not realise is that the Government still owns about 85 percent of the electricity industry in New Zealand—85 percent of the generating capacity, of the retailing capacity, and, of course, of the national grid, or the distribution sector. The Government is a massive player here. It is worth noting that it was a Government-owned organisation that got itself in the pickle over the disconnection of the Muliaga family in Auckland midway through last year.

No one could be more sympathetic to the situation that that family found themselves in than the people of New Zealand as a whole. But we need to be very clear that that was an event that should not have happened, because the protocols for Mercury Energy, the Government-owned organisation that was supplying the Muliaga family with its electricity, meant that that situation should never have arisen. What has certainly happened inside the industry since that time, with the considerable publicity that surrounded that event, is that all the players—the contractors who are involved in the distribution industry or part of the electricity industry—are much more aware of the protocols that the companies have in place.

I think it is very interesting to note that we are giving speeches that can last up to 10 minutes tonight. I hope not to take as much of the House’s time as that, because one can actually read this bill three or four times in 10 minutes. There is just nothing in it; it is an exceptionally light, little bill. It does, though, create some interesting opportunities for the Government to regulate the threshold at which the low fixed charge should cut in. The Government has very generously decided that although the 8,000 kilowatt hours will remain in place for the vast majority of New Zealanders, in the deep south, where it is colder than it is elsewhere, that threshold level will be raised by just 1,000 kilowatt hours. That is actually not a lot when one starts to think about it. In that part of the country it is cold. It is much, much colder in Southland than it is in Auckland during the deep part of the winter—there are beautiful days of course; people have sunny days there, unlike the rain that falls in Auckland often during the winter. I do not wish to say anything adverse about living in Southland, but there is a reality about the situations that people find themselves in with regard to electricity usage in a particular geographic location.

There is an element in this bill of lip-service being paid—a suggestion that somehow, because this bill passes, there will be no unfortunate disconnections like the disconnection that happened to the Muliaga family. That risk can never be mitigated by any Act, by any law, or by any decree from a Government. It is to be hoped that the lessons that were learnt around that time are well understood by all the energy companies.

I want to go back to my first assertion here this evening: that the Government remains a major player in the electricity industry. The Government is the dominant owner of generating assets in this country. So that raises the question of why electricity prices are so high. This Labour Government holds itself up all the time as the friend of the family, the friend of the worker, the friend of the oppressed, the friend of the low-wage earner, and all that sort of thing, so why is it presiding over a regime that will see electricity prices rise continually for the foreseeable future? The Government has no idea of how it might increase the availability of electrical energy, which in turn would lower the price. It has no idea of how to do that, at all.

I ask subsequent Government speakers to explain to the House why electricity is so expensive for domestic consumers in this country. Why, after 9 years of a Labour Government, has there been very little change in the industry? There has been only the addition of a massive bureaucracy, called the Electricity Commission, which all consumers pay for with a little extra on their electricity bill, month after month. What has ever been achieved by that? I think it would be a good idea if subsequent Government speakers told us how the Government intends to lower the price of electricity for New Zealanders.

I have to say that the Government’s record is to increase prices across the board. We need only to look across the energy sector at the moment to see that gas prices are going up. The Government says that is not caused by it but is because of international prices. But the Government has done very little about telling New Zealanders that in the coming year this country will be a very large exporter of hydrocarbon product. This year a lot of the oil that comes out of the ground will be exported. That is of no benefit to domestic consumers, but, of course, it does make Michael Cullen’s accounts look a heck of a lot better. A Government member should also address the question of the rise in the general costs that people have to pay. It would be interesting to see whether Mr Swain is able to explain how people are so much better off under a Labour Government than they were previously, when all they see is their cost of living rising day after day.

This bill is very short, but if there were a scarcity of a product, then the relativity of a low price is dependent on whatever the high price is. We are on a track that has seen electricity prices rise continually over the last 9 years. The Government has come out now with a project to have New Zealand 90 percent dependent on sustainable energy by 2025. We think that is a good idea, but there has not been one single initiative from the Government, since it announced that project, to try to facilitate the rapid development of more renewable energy in this country—not one. It is laudable that the Government is trying to put in place some encouragement for New Zealanders to look at alternative sources of energy for home hot-water heating. That is a good idea. It is marvellous that there is encouragement for people in some parts of the country to insulate their houses better, but that initiative is very small and concentrated on just a few people: by and large, just a few who can afford it.

One of the ironies is that a family of four or five kids and their mum and dad, low earners, could escape the low fixed charge, simply because they use the electricity that would obviously be used by such a large number of people in a household. They would get no relief, whatsoever. This bill is more about public relations than anything else. We believe that the regulation-making capacity in the bill is useful. We look forward to having that at our disposal, in Government. We do not intend to go about telling New Zealanders that we are doing a marvellous job in energy, when they see their electricity prices go up day after day.

Hon Clayton Cosgrove: You could never pull that message off.

GERRY BROWNLEE: The Minister for Small Business sits over there. I had to ask my colleagues before what he was Minister of. Someone told me he had been the Minister for Building and Construction, and all that sort of thing. I cannot believe that. I cannot believe that he would make such a sanctimonious speech as he did earlier this evening, knowing that he is the man who presided over the misery that so many New Zealanders have while sitting in their damp homes this evening, knowing that the only help they will get from the Government will come after they have spent $150,000 of their own money on getting to some sort of resolution position.

National will be supporting this bill—not necessarily because it is good legislation but simply because it has some interesting regulatory capacity to it, and because the sentiment that those New Zealanders who are the most hard up should get a bit of a break is not unreasonable.

Hon PAUL SWAIN (Labour—Rimutaka) : I hung off every word there, and I was waiting, waiting, waiting to hear a policy. I was waiting to hear what the National Party would do if it was ever in Government—not in my lifetime, but if it was ever in Government—about electricity prices. That is what I was waiting for. The member Gerry Brownlee led us on a bit of a merry dance down the path. He talked about the issues and the problems—he slowly took off each veil, and suddenly we had the expectation that the naked policy would be there standing in front of us. But unfortunately we got nothing. I will come back and ask some questions around that in a minute, because he did ask us to address some questions.

Of course, the member is right. He chaired the Commerce Committee—and did not do a bad job of it, I have to say—and this bill is about two basic issues: the low fixed-charge tariff, which the member mentioned, and the big problem of the fact that it is now for a standard 8,000 kilowatt hours across the country. Of course, as the member pointed out, in the colder parts of the country that amount gets used up pretty quickly, so the ability to have some flexibility across the country is obviously a good idea. The second issue the bill deals with is the problem of disconnection, and, to some extent, the tragedy that occurred in Auckland. I will come back to those points in just a minute, but I will now take up some of the points that the member raised about electricity issues.

Mr Brownlee asked why it is that electricity prices keep going up. Well, that is a good question, which maybe we should go back and ask Max Bradford. I actually recall Max Bradford saying in this House that as a result of the electricity reforms that the former National Government introduced in the late 1990s—1998, as I recall it—electricity prices would go down.

Hon Ruth Dyson: Did they?

Hon PAUL SWAIN: Well, of course, they went up. For the National Party that may not be much of a difference—up and down, down and up—but it is actually quite a big thing when it comes to consumers. When consumers heard National say that if we went through all of that electricity reform their power prices would go down, and then they went up, consumers would have wondered what had happened. We heard National say that prices would go down, but then they went up. Then we heard the National member criticise the fact that electricity prices are going up.

What I really wanted to hear from Mr Brownlee was what National would do about it. For example, would National introduce price control?

Hon Clayton Cosgrove: Would it?

Hon PAUL SWAIN: I do not know. Let us ask the National members. I ask the National members whether they would introduce price control on electricity, to stop prices going up. I do not hear any response from anybody on the National side. What happens during a dry winter, when people use more power and it costs more money to generate it? Is National saying that that should not be reflected in the price of electricity? Or is it saying that the Government should regulate the cost of power? If the Government does that, what message does that send to the generators? There is some market economics, which apply to electricity, in here. I would expect National to come forward with some ideas. I presume it is not advocating regulation.

Chris Auchinvole: I presume that you’re short of ideas, because this is all you have done for the last 8 years.

Hon PAUL SWAIN: We have heaps of ideas, and I am going to come to them in just a minute.

Chris Auchinvole: It is under your watch that the prices are going up.

Hon PAUL SWAIN: Well, OK. Mr Brownlee tells us it is an outrage that the power price is going up, but I want to hear the National Party’s ideas on how to address that, because we have done a number of things. Of course the other thing is that he says the Government is heavily involved in the electricity sector, and he is absolutely right about that. In fact, we were 100 percent involved in the electricity sector, until the National Government sold off Contact Energy in the late 1990s, as well.

I asked the National Party members over there whether one of its solutions to doing something about the power price was to privatise more generators. You see, this is the problem. We know that the National Party wants to say yes, they should be privatised, because deep down, fundamentally, it believes in the privatisation of electricity generators. But the National members cannot bring themselves to say that, because they know it is unpopular and they will not get elected. I think that the big problem is that the public would ultimately support them more, or at least consider their policy more, if they were prepared to be frank and say “Look, we the National Party believe in the privatisation of State assets. In fact, we think that a couple of those generators should be sold.” At least, their policy would be clear. The problem, which everybody now knows, is that the National members think they can slip and slide on this kind of policy, right up to the election. And if the National Party were ever elected to Government, as I say—with no disrespect to Mr Deputy Speaker, and not in my lifetime—everyone knows that it would sell the generators off. So people are asking why National does not come forward and tell them that now. They wonder why it does not come forward and tell them that now, not at 5 past 12 on the election-day Saturday. People want to hear that, and for them to be told that at 5 to 12 would be probably a little more helpful to them than to be told later, even though the polls would still have closed.

So the issue is really that the problem of electricity is a difficult one. But the Government has implemented a number of initiatives—for example, initiatives to address hot-water heating and, through local authorities, insulation. Many of those kinds of initiatives have been taken to address some of the fundamental problems, but in the end the issue is that electricity is a market, and of course the tension always is—when a party is in Government and actually has to say what it thinks—between on the one hand people having to pay for power, and on the other hand the importance of a correct signal being given so that generators can go out and generate new electricity. The demand for electricity is rising, and no one will thank a Government if the lights go out. So that is the real tension. In the end some people get caught in the middle, between price rises to fund new generation on the one hand, and consumers not being able to afford the prices on the other.

That is why this good Government has introduced this legislation to try to address that issue. It recognises that although electricity is a market—and the Government does not want to regulate prices across the board—some people will struggle to pay the bill. There are low fixed charges already in regulation, but having been introduced, this good listening Government—which goes around the country listening to people, hearing good ideas and taking them back, discussing them thoroughly at caucus, and coming forward with positive legislation—has recognised that perhaps a standard rate across the country and across all temperatures is not a very good idea. Such a rate applies equally in sunny Hawke’s Bay, where Chris Tremain is from, and in the deep south, where it is colder. So the Government says that perhaps we should introduce some flexibility, so that people can adjust the kilowatt hours. That is a good idea, and because this is a good Labour Government that listens to people, it is prepared to take that option.

Then of course if people are not prepared for the cost of electricity and get themselves into trouble, there should be rules around disconnections. Rather than people just willy-nilly cutting off the power, there should be some rules to be followed for disconnections, particularly if people are attached to machines that require electricity—which was the issue faced in Auckland. So we are saying there needs to be some ability to address those issues, and that is what this bill also does.

  • Debate interrupted.
  • The House adjourned at 10 p.m.