Hansard (debates)

Daily debates

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House of Representatives
15 October 2009
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Volume 658, Week 26 - Thursday, 15 October 2009


Thursday, 15 October 2009

Mr Speaker took the Chair at 2 p.m.


Business Statement

Hon GERRY BROWNLEE (Leader of the House) : When the House resumes next Tuesday, it is the Government’s intention to complete the remaining stages of the Land Transport (Enforcement Powers) Amendment Bill, the Vehicle Confiscation and Seizure Bill, the Sentencing (Offender Levy) Amendment Bill, the Domestic Violence (Enhancing Safety) Amendment Bill, the Criminal Investigations (Bodily Samples) Amendment Bill, and the Gangs and Organised Crime Amendment Bill, and to make progress on other bills on the Order Paper.

Hon DARREN HUGHES (Senior Whip—Labour) : I thank the Leader of the House for his update. Could he tell the House why, given that he will call urgency tonight to give us a Thursday evening sitting—putting Parliament into urgency for 4 sitting weeks in a row—the accident compensation bill that was announced by the Government this week will not be considered tonight. Copies of the bill were made available to the media yesterday in the Minister’s briefing pack, even though the bill has not been introduced to the House yet, which previously the Government has given as a reason for not making legislation available. The urgency we are having tonight was to be set down for the accident compensation bill, which has been distributed, yet we will not be debating that bill at all tonight, which raises the question as to why urgency itself is necessary at this time.

Hon GERRY BROWNLEE (Leader of the House) : I know that Labour members do not like working long hours. That is clear. In the last 4 sitting weeks we have added about 2½ hours to each week. That gives us just over 10 extra hours in 4 weeks—or a bit less; about 8 extra hours in 4 weeks—which is a big strain on Labour members. But as for urgency tonight—[Interruption]

Mr SPEAKER: I apologise—or sort of apologise—to the honourable Minister, but I say to members that this is not a matter of debate. We should be able to hear the Minister’s response—

Hon Annette King: He shouldn’t be so political.

Mr SPEAKER: I agree absolutely that he should not be quite as political, either.

Hon GERRY BROWNLEE: If it was not a matter for debate then the Hon Darren Hughes would not have raised the issue that he did. He knows that on Tuesday at the Business Committee I gave notification that we would be advancing Government business during the extra 2½ hours of sitting time this evening. The Hon Trevor Mallard raised the issue of the accident compensation bill, but, as I noted earlier today, he is no longer a Minister, let alone anywhere near declaring what the House business might be.

Questions to Ministers

Palm Kernel Imports—Biosecurity Risks

1. KEVIN HAGUE (Green) to the Minister for Biosecurity: Can he give the public a 100 percent guarantee that imports of palm kernel do not pose biosecurity risks to New Zealand’s farms and environment, particularly in light of the fact that one in 10 shipments have been found to contain insects and animals despite having been fumigated before arriving in New Zealand?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister for Biosecurity: The Minister can no more give a 100 percent guarantee for the importation of palm kernel than he can for the importation of other animal feeds into New Zealand such as soya or tapioca. The Minister is assured through Biosecurity New Zealand that any biosecurity risks associated with the importation of palm kernel are well managed and dealt with appropriately. I think it is worth noting that all of the insects found in palm kernel shipments are deemed most likely to have entered the shipment post its arrival in New Zealand.

Kevin Hague: Is the Minister aware of reports from dairy farmers of discovering unusual weeds in places where palm kernel has been fed out, and wood, soil, and pieces of metal in imported palm kernel?

Hon GERRY BROWNLEE: No, I am not aware of that, but I am aware that there are considerable urban myths surrounding the importation of palm kernel. It has been a practice in New Zealand for over a decade. There has even been a suggestion that in one particular shipment, a monkey was found amongst the palm kernels.

Hon Parekura Horomia: What were you doing there, Gerry?

Hon GERRY BROWNLEE: They are simply untrue, and there is a bit of self identification on the other side of the House there. Believe me, if they found Parekura Horomia in there, they would not have thought he was a monkey. This is a serious issue. The New Zealand Government has always taken this seriously, and palm kernel is fumigated prior to departure and quite often during shipment. If there is any suggestion of incursion when it arrives, it is further fumigated.

Kevin Hague: Is the Minister aware that foot-and-mouth disease is endemic to some of the areas from which palm kernel is imported into New Zealand, that the Canadian authorities have found foot-and-mouth disease to be viable in soil for many days, and that the fumigation process to which shipments are exposed has no effect whatsoever on foot-and-mouth disease?

Hon GERRY BROWNLEE: I do not have that advice, but I am assured that Biosecurity New Zealand does a good job. I say to the member that perhaps he should refer to the Hansard of 26 March 2003, where the Hon Marian Hobbs said to the House: “Given that there is the potential of over 100 new pests a day for every day of the year, I think that finding only six in the last fortnight shows that we really are very good at surveillance.” That was in answer to a question about concerns at the time, and the Minister gave a proper answer indicating how seriously New Zealand takes it biosecurity obligations.

Kevin Hague: Can the Minister confirm that the Government’s assessment of foot-and-mouth disease as being of insignificant risk in palm kernel shipments is based on a 2002 assessment that did not even mention palm kernel and occurred at a time when imports of palm kernel to this country were of a very substantially lower quantity than they are today?

Hon GERRY BROWNLEE: I am unable to confirm that.

Kevin Hague: Why does New Zealand continue to import palm kernel when the Minister cannot give a 100 percent guarantee that it will not risk our farming, horticulture, forestry, or even our “100% Pure New Zealand” brand, especially when sufficient supplementary feed is readily available in New Zealand that carries no biosecurity risk at all?

Hon GERRY BROWNLEE: I again quote from Hansard, from 29 March 2006 when the Hon Jim Anderton said, and I think it is right and it serves as a very good answer to this question: “I point out to the member that if New Zealand were to try to fund biosecurity systems that would prevent [all possible] incursions into New Zealand, there would not be enough wealth generated in the whole GDP to guarantee that.” New Zealand has a very good record for biosecurity, prevention of incursions, and attack upon any organisms that invade our territory where they are a problem. I think we should be recognising Biosecurity New Zealand for the fine work it does.

Accident Compensation—Proposed Increase in Motor Vehicle Levy

2. Hon DAVID PARKER (Labour) to the Minister for ACC: What is the proposed increase in ACC levy fees for a car, and how much would it have been if the date for full funding of the motor vehicle account is not extended?

Hon Dr NICK SMITH (Minister for ACC) : The Accident Compensation Corporation (ACC) board has recommended an increase in the average motor vehicle levy of $130.28, based on the current law and full funding date of 2014. The changes announced yesterday include deferring the full funding date to 2019, and that reduces that increase to $30.28. The option remains for this to be funded by an increase in the petrol levy or in the registration fee. The board is consulting New Zealanders on those options.

Hon David Parker: Why did the Minister encourage the media to report the prospect of accident compensation levy increases to car registration and petrol costs of $130—four times the actual $30 increase—and is this not another example of his scaremongering to justify cuts to accident compensation entitlements?

Hon Dr NICK SMITH: The board of ACC is actually required to follow the law. If the law is followed, that is the figure. If the member was at the press conference, he would have noted that I repeatedly said, and the media has rightly reported, that the highest figure that the Government thinks is realistic is the $30 figure. That is why it is making legislative and other changes. I say to the member opposite that it has been necessary for the Government to communicate with New Zealanders the true financial position of the accident compensation scheme, because the previous Government hid it and breached the Public Finance Act.

Sue Bradford: Which parties have guaranteed their support to the Minister for the accident compensation legislation, which will give effect to the announcements on the future of accident compensation that he has made this week?

Hon Dr NICK SMITH: On Monday Cabinet approved the bill that has been drafted by the Parliamentary Council Office. I am having discussions with a number of parties to get the necessary support for this legislation to be passed, so that we might be able to limit the increase in levies on New Zealanders.

Hon David Parker: Does the Minister stand by his comment: “If my doctor told me that I was terminally ill and I had 30 days to live, with the ACC rules the way they are, I’d be finding myself a train to throw myself under on the 29th day because my family would be treated so much more generously” than under the current law; and has he any evidence that New Zealanders have been committing suicide to get accident compensation cover for their surviving children?

Hon Dr NICK SMITH: That was never the inference. What I was attempting—[Interruption]—to do was to point out—

Mr SPEAKER: I apologise to the Minister. The Labour Opposition asked a question; they might like to hear the answer. I cannot hear it.

Hon Dr NICK SMITH: The same question was put to me by the media when I came into the House. I said that I am happy to apologise. Suicide is an absolute tragedy, and I would not wish it on anyone. Having said that, I do think it is important to point out that if a family suffers the tragedy of a loved one being lost through heart disease, cancer, or a brain tumour, they are not, in my view, different from those families that suffer it from suicide; I believe it was a mistake and wrong of the previous Government to extend the accident compensation scheme to include suicide, and that was the point that I was attempting to make.

Dr Jackie Blue: What advice has the Minister received in response to the claim that the levy increases would be less if the Government had pushed out the full funding date to 2019 earlier?

Hon Dr NICK SMITH: This claim is ridiculous, as it makes absolutely no difference to the levies whether the legislation to extend the full funding date is passed in 2008, in 2009, or in 2010. The key decision is about which date it is extended to. This Government wanted to get a full grasp of the accident compensation scheme’s financial position before making policy decisions, and it has taken the board some time to develop a plan to address that. I find it rich that members opposite criticise the fact that we have not pushed out the full funding date, when they had 9 years in which to do so and did not.

Sue Bradford: Is the Minister telling the House that he indeed does not have the numbers to get the new accident compensation legislation through, and that that is why the bill is not coming up in the House under urgency today?

Hon Dr NICK SMITH: I am in consultation with parties to try to get support for the accident compensation reform bill, because I think it is important that we make these changes to the accident compensation scheme in order to make it fair, affordable, and sustainable. I will be having ongoing discussions with other parties to try to get support in this Parliament for sensible change.

Hon David Parker: Does the Minister accept statements by motorcyclists that they are now paying for accidents caused by cars, and, given Mr Judge’s comments on the radio today that the setting of levies is a political decision, does he accept that his Government has got it wrong?

Hon Dr NICK SMITH: The interesting thing about motorcycle accidents is that even if we assume that every single accident between a motorcycle and a car is the car’s fault, the levies would still have to be over $750. The actual cost for large motorcycles is $2,700. I think that the increase the board has proposed in respect of motorcycles is a big ask, but this country needs to have an honest discussion about the cost of motorcycle accidents and where responsibility for that should rest. It is a final decision for the Government to make and I look forward to the discussion about it. I make the point that if motorcyclists are not to pay for the cost of those accidents, then someone else has to.

Dr Jackie Blue: What reports has the Minister received on the claim that accident compensation collected more in levies in 2008-09 than the lifetime costs of claims incurred in 2008-09?

Hon Dr NICK SMITH: The report I have received from ACC is that this claim is absolute nonsense. The scheme received levies in 2008-09 of $4.2 billion. The lifetime costs of claims incurred in that year, based on the latest valuation, is $7.1 billion. Mr Parker should apologise to the public of New Zealand for misleading them on this important point.

Hon David Parker: How can it be fair for the Government to charge poor people who can afford only older cars higher accident compensation levies than wealthier people with more expensive, safer, new cars?

Hon Dr NICK SMITH: The Government has made no decisions about the way in which we can provide better incentives for safety. The legislation we are proposing would, for instance, make provision for no-claim bonuses, which would reward the owner of an old car just as much as the owner of a new car. I think the essential point for this Government is that we need to improve the incentives for safety, for employers, and for motor vehicle owners, and that is why we are progressing with these reforms.

Sandra Goudie: Does the Minister agree that ACC should tighten its procedures in order to limit access to counselling for those injured through serious crimes?

Hon Dr NICK SMITH: I am just getting the correct answer—

Mr SPEAKER: I just wonder how well that question relates to the primary question, which relates to the ACC levies for cars and the motor vehicle account.

Hon Darren Hughes: I raise a point of order, Mr Speaker. Maybe I can assist the House. I think the member who asked that question on behalf of the Government has actually read out oral question No. 4, which is a Labour question. Maybe if she checks through her patsy question files, she will find the correct question to ask.

Mr SPEAKER: I thank the Hon Darren Hughes for his assistance in this matter.

Hon David Parker: Is he aware that falls by the elderly are one of the fastest-growing sources of accident compensation claims and one of the top 10 causes of hospital admissions; if so, why has ACC today advised that its fall prevention programmes, such as the Otago exercise and fall prevention programme, have been cancelled?

Hon Dr NICK SMITH: It is certainly true that falls by older people have been an area of very substantive increase in claims and cost for accident compensation. The point I would make to the member is that ACC’s board is looking at the cost-effectiveness of those programmes. I put it to the member that if those programmes that his Government put in place were so successful, why is it that claims are ballooning at the rate that they are? The board is saying we need to invest in cost-effective programmes for injury prevention and not just in any old programmes.

Warm Up New Zealand: Heat Smart—Number of Houses Insulated

3. MICHAEL WOODHOUSE (National) to the Minister of Energy and Resources: How many houses were insulated in September through the Government’s Warm Up New Zealand: Heat Smart home insulation scheme?

Hon GERRY BROWNLEE (Minister of Energy and Resources) : In September of this year we had a third record month for the Warm Up New Zealand: Heat Smart programme, with 5,868 houses being retrofitted. In only 3 months of the scheme, more than 14,000 Kiwi homes have received assistance so that they are warmer, drier, and healthier.

Michael Woodhouse: How many houses lived in by residents with community services cards have been retrofitted under the Warm Up New Zealand: Heat Smart scheme?

Hon GERRY BROWNLEE: I am very, very pleased to report to the House that of the 5,868 houses retrofitted in September, 65 percent were houses occupied by people on low incomes. Since the scheme started, over 60 percent of houses receiving insulation under the scheme have been occupied by people on low incomes.

Chris Hipkins: Can the Minister confirm that homes insulated in September will have been insulated to a higher standard than homes insulated from 1 October because he has lowered the standards for approved providers to meet in order to insulate more homes for the same amount of money; does he not agree that subsidising heat pumps for poorly insulated homes could lead to greater energy inefficiency and thus defeat the purpose of the whole programme?

Hon GERRY BROWNLEE: No, because we have not done that and because someone cannot get the heating subsidy unless he or she passes the insulation test. What that member should do is stop listening to his mates, who are a bit grumpy about being booted off because they are hopeless providers, and start looking at the tough criteria laid down by this Government.

Rahui Katene: What relationships has the Energy Efficiency and Conservation Authority developed with iwi in terms of their participation in the Warm Up New Zealand: Heat Smart programme, and what actions will the authority take to increase the uptake of energy efficiency measures by Māori?

Hon GERRY BROWNLEE: The Energy Efficiency and Conservation Authority has developed partnerships with a number of iwi—

Hon Darren Hughes: How come you’re reading out this answer?

Hon GERRY BROWNLEE: Because people like you and Mr Hipkins—

Mr SPEAKER: There will not be a reference to the Speaker, from either party.

Hon GERRY BROWNLEE: The Speaker is an intelligent man. I certainly did not confuse him with Darren Hughes. However, Darren Hughes often confuses himself with the Speaker. I will start again. This is an important question.

Hon Darren Hughes: I raise a point of order, Mr Speaker. I ask you to reflect on the way the Leader of the House is treating question time. If there is a bit of banter on a Thursday, that is fair enough. But this continual denigration of Parliament—[Interruption]

Mr SPEAKER: There will not be interjections.

Hon Darren Hughes: You often give us your observations about the standards and dignity of Parliament. You are very tough on Labour, naming Labour members and naming the Labour Party. But it seems that the Leader of the House is able to perform in this way when answering questions and there is no sanction on him at all.

Mr SPEAKER: I accept the intention of the point the member makes. I remind him, though, that he was the member who introduced the Speaker into the debate, through interjecting “you”. The honourable member was the very first person to do that, and the Minister answering the question responded with “you”. In fact, it was the member’s own interjection that initiated the disorder, and that is the difficulty.

Hon GERRY BROWNLEE: The Energy Efficiency and Conservation Authority has developed a number of partnerships with iwi and is continuing to do so. An example is Ngaruru in South Taranaki, where some 240 houses will be insulated and iwi members will be trained and employed as insulators. Waikato-Tainui and the Energy Efficiency and Conservation Authority have signed an agreement that will see 700 kaumātua homes retrofitted, and over the next short while the Energy Efficiency and Conservation Authority will be working with iwi and Māori groups to bring them onboard as service providers, as installers, and as third-party funders in the scheme. The House can look forward to a much larger announcement on this matter from the Minister of Māori Affairs in the next short while.

Chris Hipkins: Will the Minister admit that the Government has lowered insulation standards by, among other things, requiring that homes previously fitted with foil underfloor insulation, which has been proven to be ineffective, will have the foil repaired rather than replaced with a more effective form of home insulation, and how does he square that with his answer just now that the standards have not been lowered?

Hon GERRY BROWNLEE: No, they have not been lowered, and if the member has examples of providers engaging in that practice—

Hon Ruth Dyson: He’s just given you one.

Hon GERRY BROWNLEE: No, with all due respect, he did not give me an example. He made an allegation. I am saying that if the member has examples of providers who are installing a level of insulation that is inferior to the one demanded by the Government, he should tell me, and they will no longer be providers.

Accident Compensation—Counselling

4. LYNNE PILLAY (Labour) to the Minister for ACC: Does he agree ACC should tighten procedures to limit access to counselling for those injured through serious crime?

Hon Dr NICK SMITH (Minister for ACC) : The Government is not making any changes to the accident compensation legislation in respect of when people get counselling for sensitive claims arising from crime. The issue here is best practice. A substantive research project initiated and concluded during the last Government by Massey University recommended new guidelines to ensure better service for clients. The Accident Compensation Corporation (ACC) is implementing those changes, and I am very reluctant to interfere in decisions on clinical best practice in this area, or, frankly, any other.

Lynne Pillay: Why, then, did two young boys from Taranaki, who were sodomised and thrown out of a window, and whose case for counselling was supported by their counsellor and the police, have to resort to their stories being told in the media because ACC had declined the counselling they so clearly needed, in order to have someone from the Government listen?

Hon Dr NICK SMITH: The member for New Plymouth raised that specific and sensitive case with me—

Hon Annette King: Belatedly.

Hon Dr NICK SMITH: —actually, before the Opposition did, and raised it publicly. I have asked ACC officials to look into the specifics of the case. I ask the member and others in the House not to substitute themselves for clinical psychologists who appropriately make the judgment of whether people are eligible for accident compensation, and judge the appropriateness of the particular counselling or other care that is provided.

Lynne Pillay: Does this Taranaki example show that victims of horrendous sexual crimes now have to tell their terrible and personal stories publicly in order for them to get the help they need, and will he now guarantee that ACC will fund the counselling?

Hon Dr NICK SMITH: I think it is important for the House to note that there has been no change in the clinical guidelines, to date.

Hon Annette King: Oh yes, there has.

Hon Dr NICK SMITH: No, there has not. I have just answered a large number of written questions on this matter, and the answers show that the number of cases that have been turned down in recent months is no different from what it was a year ago—no different, according to those statistics. So I say to the member opposite that this case, tragic as it is, cannot be a consequence of any changes in practice, because those changes have not yet been made.

Sandra Goudie: Has the Minister or his associate Minister at any time since his appointment asked ACC to make savings in the area of counselling?

Hon Dr NICK SMITH: No, I have not. The changes regarding counselling for sensitive claims were well under way before my appointment. My only direction to ACC is to be cautious in this sensitive area, because I do recognise how vulnerable victims of sexual abuse are.

I seek leave of the House to table Sexual Abuse and Mental Injury: Practice Guidelines for Aotearoa New Zealand, dated March 2008.

Mr SPEAKER: Leave is sought to table that document. [Interruption] Order! The seeking of leave is being dealt with. Members need only reflect on who was interjecting while that was happening. Leave is sought. Is there any objection to that course of action? There is no objection.

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

Lynne Pillay: Why has the Minister claimed that decisions to limit counselling are clinical decisions, when the decision to cancel and decline counselling for people who have been raped and molested is being made by people in Wellington who have never met, or even spoken with, these victims and who are simply rubber-stamping cost-cutting initiatives being put in place by this Government?

Hon Dr NICK SMITH: The first thing I would point out, for the member, is that in the example she has given, and arising from the representations that have been made by the member for New Plymouth, Child, Youth and Family has appropriately decided to fund counselling for the boys who are affected. In respect of the member’s claims that people in Wellington are making decisions about such counselling, I assure the member that those decisions are being made by properly qualified psychiatrists and others who have the clinical skills to make them.

Hon David Parker: I raise a point of order, Mr Speaker. Given that the Government does not have numbers for the reduction in scope—

Mr SPEAKER: I am listening for the point of order and there is nothing—

Hon David Parker: I seek leave to table—

Mr SPEAKER: I am on my feet. There is nothing that I can perceive to do with the order of the House that has anything to do with Government numbers for anything. I ask the member to come to his point of order.

Hon David Parker: I seek leave for my member’s bill, the Injury Prevention, Rehabilitation and Compensation (Change of Date for Full Funding) Amendment Bill, which extends by 5 years the deadline for funding of the accident compensation tail, to be put on the Order Paper.

Mr SPEAKER: Leave is sought for that member’s bill to be put on the Order Paper. Is there any objection to that course of action? There is objection.

Hon Lianne Dalziel: I seek leave to table the document that ACC prepared showing its new guidelines for victims of sexual violence, which do not bear resemblance—

Mr SPEAKER: Leave is sought to table a further ACC document on guidelines. Is there any objection to that course of action? There is objection.

Hon Trevor Mallard: In light of the Minister’s reply to the last supplementary question—that Child, Youth and Family is funding counselling for young boys—what is the system now for counselling older, female rape victims?

Hon Dr NICK SMITH: A member asked a specific question about a case in New Plymouth that had been drawn to my attention by the member for New Plymouth, and I appropriately drew to the House’s attention the fact that counselling has been provided by Child, Youth and Family. In respect of ACC’s support for victims of sexual abuse, ACC will continue to provide support as per the clinical guidelines that were developed during the time of the previous Government, of which that member was part—and they were launched by the Hon Steve Maharey, I would note.

Financial Position, Government—Borrowing

5. JOHN BOSCAWEN (ACT) to the Minister of Finance: Does he consider borrowing $40 billion to be “no trouble”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: In the past month overseas investors have told the Minister that they agree with the Government’s responsible management of the New Zealand economy. Therefore, yes, the Minister is confident that the Government will be able to borrow the extra $40 billion required over the next 4 years. That is a significant undertaking. We are, in effect, doubling Crown debt in the next 4 years to maintain entitlements and keep the economy running, while simultaneously working to repair the damage inflicted by the previous approximately 9 years of economic mismanagement.

John Boscawen: Does the Minister accept that massive losses in the accident compensation scheme and KiwiRail and the write-down in the student loan book are all a consequence of the poor economic policy that the Government inherited from Labour, and why does he not reverse the structural problems that are causing it?

Hon Darren Hughes: I raise a point of order, Mr Speaker. I wonder how this Minister can be responsible for the policies of the previous Government.

Mr SPEAKER: There is no need for further assistance on that. The member asked the Minister whether the problem that the Government is coping with at the moment by borrowing $40 billion has something to do with the economic policies that were in place when this Government came to power. That is a perfectly legitimate question.

Hon STEVEN JOYCE: Yes; the Government is focusing on working very hard to control the debt by taking responsible control of Crown expenditure while maintaining entitlements, and by instituting policies that improve productivity and growth for this country.

John Boscawen: Can the Minister explain to the House exactly how hard-working New Zealanders are better off having the Minister of Finance borrow $40 billion to manage Michael Cullen’s economic policies compared with having Michael Cullen do the job himself?

Hon STEVEN JOYCE: Yes, the country will be better off, because this Government is about sensible, balanced, and responsible economic management. We have rejected the idea of slashing and burning public spending during a recession. We have pledged to maintain entitlements, but in all ways to act responsibly, to control Crown expenditure, and to ensure that it is being spent properly and well.

Hon David Cunliffe: Can the Minister confirm that Cabinet papers released this week to Radio New Zealand signalled more savage cuts to come that will impact on the life of every working New Zealander?

Hon STEVEN JOYCE: No, and I would also say that there have not been savage cuts to date. The Government is trying to be sure to act responsibly in a sensible and balanced manner. The member’s characterisation of the Government’s actions to date goes to show how little grasp he has of financial and economic matters.

Question No. 4 to Minister

LYNNE PILLAY (Labour) : I seek leave to table a paper relating to question No. 4. It is Sensitive Claims, a newsletter from the Accident Compensation Corporation, which states that the corporation is currently undertaking a comprehensive, value-for-money review in which it is scrutinising the accident compensation scheme costs.

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

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. The member Nick Smith has just accused my colleague of misrepresenting a paper. The clear implication is that my colleague did not tell the truth when she sought leave to table a document. He accused her of a breach of privilege from across the Chamber, and I take offence at that.

Hon GERRY BROWNLEE (Leader of the House) : That is utter rubbish. There are all sorts of interjections across the Chamber. Dr Nick Smith said that the paper had been misrepresented. Considering the number of times that people have said in debate that someone has misrepresented something, that someone has been reckless with the truth, or some other such thing, the member knows darned well that it is not in any way malicious. It is part of the normal banter in the House. I know that Labour members are very upset; they are not on their game—

Mr SPEAKER: No, the member was perfectly on course with the point of order until that point. I think that the point has been made fairly that if the Minister had interjected that the member had been lying, I would have most certainly required him to withdraw and apologise for that. If, though, he interjected that the member had misrepresented the nature of the document that she was seeking to table, then I think that is hardly in the same category as accusing her—

Hon Darren Hughes: I raise a point of order, Mr Speaker—

Mr SPEAKER: I tell the Hon Darren Hughes to hang on. I am not sure what is wrong with the member’s vision today, but I am on my feet—

Hon Darren Hughes: I thought you were sitting down.

Mr SPEAKER: —and the member will not interject on—

Hon Trevor Mallard: You dipped.

Mr SPEAKER: I am on my feet, and I am standing perfectly steadily. But I will now sit, and I invite the Hon Darren Hughes to make his point of order.

Hon DARREN HUGHES (Senior Whip—Labour) : I raise a point of order, Mr Speaker. The point that Mr Brownlee made to you would be perfectly fine if it were not for the fact that you yourself have ejected a member of Parliament because he made a reference to “nose growing”, or something or other. You said that the logic meant that that member was accusing somebody of telling a “mistruth”. Dr Smith sat there—

Mr SPEAKER: I ask the senior Labour Party whip to take his seat. I did not evict a member for making that comment. It was what happened subsequently that caused the eviction of the member. I ask the member when making points of order to reflect correctly on what has occurred in the House. This matter does not require the time of the House to be taken up. If the member had accused another member of lying, I would have required the member to withdraw and apologise. My understanding is that he did not do that. I did not hear the interjection, because there was so much noise. Therefore, I intend to move on.

Hon DARREN HUGHES (Senior Whip—Labour) : I apologise to you, Mr Speaker. My recollection was incorrect. That is right: the member was ejected after refusing to withdraw and apologise. The point I should have made is that you forced the member to withdraw and apologise because of a comment he made. You said that the logical conclusion of it was that he had accused another member of telling a “mistruth”, even though he had not used those words. Mr Mallard’s point of order is that Dr Smith accused the member of misrepresenting something. Surely you must see the same conclusion, logically, in the two rulings you have made.

Mr SPEAKER: I have ruled on this matter. I am not sure how many times the senior Labour Party whip expects me to listen to him on a point of order. I warn him that I have listened to him all I intend to listen.

Broadcasting, Minister—Management of Portfolio

6. Hon PETE HODGSON (Labour—Dunedin North) to the Minister of Broadcasting: Is he satisfied with his management of his portfolio?

Hon Dr JONATHAN COLEMAN (Minister of Broadcasting) : Although there is never any room for complacency in these matters, I am satisfied that a lot of hard work is going into meeting the challenges of the portfolio.

Brendon Burns: Which Minister of Broadcasting should the House believe: the acting Minister, who stated yesterday that the Government had not determined to provide financial support to a Television New Zealand - led bid for Rugby World Cup rights, or today’s Minister of Broadcasting, who on Tuesday was widely reported and criticised for having said exactly the opposite, leading to a U-turn by the Prime Minister?

Hon Dr JONATHAN COLEMAN: If the member looks at those statements carefully and does not try to misrepresent them, he will find that they are totally consistent with each other.

Hon Pete Hodgson: We all know he said—

Mr SPEAKER: The Hon Pete Hodgson will resume his seat immediately. I am on my feet; the House will be silent. I have had enough. The House started in good humour today, and it has deteriorated into totally unacceptable behaviour. When the member is called to ask a question, he will ask his question. He will not interject like that. Today I have had to put up with innuendo and interjection on my left, with accusations of bias by the Speaker. I have tolerated that, from the Hon Darren Hughes in particular. I will not tolerate that kind of nonsense any more. When the member is called to ask his supplementary question, he will do that without further interjection.

Hon Pete Hodgson: Does the Minister agree that the Prime Minister’s less than complimentary remarks about him this morning were a wee bit rough, given that the Prime Minister has known about the Māori Television Service’s bid for many, many weeks?

Hon Dr JONATHAN COLEMAN: Those remarks were absolutely fine.

Hon Pete Hodgson: Does the Minister not feel just a little bit annoyed about being door stopped by Campbell Live at Wellington Airport yesterday afternoon, when Campbell Live knew that the Prime Minister had done a U-turn and so did almost everyone else, but no one had thought to tell the Minister of Broadcasting?

Hon Dr JONATHAN COLEMAN: To be honest, I found the whole interview experience quite surreal.

Hon Pete Hodgson: Does the Minister agree with the chief executive of the Māori Television Service, Jim Mather, who said he believed that the International Rugby Board, even given its vast global experience of broadcasting rights, had never encountered anything quite like the events of the past few days?

Hon Dr JONATHAN COLEMAN: Mr Mather has expressed a range of beliefs, and that is just one of them.

Community Max—Progress

7. HEKIA PARATA (National) to the Minister for Social Development and Employment: Tēnā koe, Te Mana Whakawa—[Interruption]

Mr SPEAKER: I ask the House to please show some courtesy to a member who has been called to ask her question. She has every right to do so.

HEKIA PARATA: What progress has the Government’s Community Max initiative made?

Hon PAULA BENNETT (Minister for Social Development and Employment) : I am pleased to announce that over 830 opportunities have been created for our young people. I have been impressed to see communities stepping up. In fact, over 172 groups so far have already stepped up. They are showing real innovation. That is what happens when we trust communities to know what works for them and let them get on with it.

Hekia Parata: How has the Community Max initiative given opportunities to young people?

Hon PAULA BENNETT: Streets Ahead 237 is a group that does incredible work with youth gangs in Porirua, which I know the member knows. These former youth gang members are now working with other young people, thanks to Community Max, to mentor them through the same journey and to more positive outcomes. I have also had the pleasure of meeting young people and working on three Community Max projects in Māngere, thanks to the Tamaki Ki Raro Trust. They quite genuinely now have a renewed sense of pride in themselves because they are getting a wage and doing good.

Amy Adams: What further examples can the Minister give where Community Max is making a difference?

Hon PAULA BENNETT: In Canterbury, the Ngāi Tahu Community Max project is enabling 16 young Māori to help restore historic wāhi tapu sites of significance to the iwi. In the far north, the community group Street Maytz is making a real difference, getting young people to help with crime prevention, graffiti, and community patrolling.

Rahui Katene: Does the Minister believe that good progress has been made for Māori and Pasifika youth in the uptake of the Community Max initiative, and are there any specific issues for these groups that have emerged during the recruitment process?

Hon PAULA BENNETT: Yes, I believe excellent progress has been made for Māori and Pacific youth. Of the Community Max participants, over two-thirds are Māori and Pasifika youth. I have not been aware of any specific issues. Everyone is giving me positive feedback on how it is working. If the member knows anything that we can tweak, then please would she let me know.

Crime, Violent—Government Actions

8. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister of Police: Does she stand by her statement that “the Government has taken prompt action to crack down on violent crime”?

Hon SIMON POWER (Minister of Justice) on behalf of the Minister of Police: Yes.

Hon Clayton Cosgrove: When the Minister said on Tuesday that half of the 7 percent increase in violent crime occurred under the previous Labour Government, was she aware that the increase in the 6 months to December was 2 percent, whereas the increase in the 6 months to June, entirely under the National Government, was more than double that at 4.9 percent?

Hon SIMON POWER: Any increase in crime is unacceptable, as the Minister said earlier this week. I can report to the House that the Government will be progressing five measures later this afternoon to deal with these issues, as well as making sure that an announcement tomorrow morning about the victims of crime should have some relevance to the matter.

Hon Clayton Cosgrove: Supplementary question.

Mr SPEAKER: Before I call the honourable member, I note that he asked specifically whether the Minister was aware that there had been an increase in 6 months of 2 percent and a further increase in the next 6 months of 4 percent. The Minister may, in fact, have information that refutes that, but it would be helpful to hear an answer that relates to that.

Hon SIMON POWER: The Minister is well aware of the make-up of the figures.

Hon Clayton Cosgrove: When the Minister said on Tuesday that half of the more than 62 murders so far this calendar year occurred under the Labour Government, was she aware that the calendar year started in January?

Hon SIMON POWER: The Minister has a very good grasp of when these crime figures start and finish. As she explained earlier this week, any murder is unacceptable. That is why the Government has moved swiftly through a range of measures to deal with these types of matters, and, frankly, we are not prone to flimflam.

Hon Clayton Cosgrove: How does the Minister reconcile her statement on Tuesday that “The Police has told that member time and time again that there was not a $21 million cut to its budget”, with a document I have, authored by the Canterbury district commander, Dave Cliff, who notes that the police have been asked to make savings and that the $21 million figure is inclusive of the $5.5 million found from the line by line savings; and how does she reconcile her statement with the transcript I have from the Vote Police estimates hearing, where the Commissioner of Police talks at length about what makes up the $21 million cut?

Hon SIMON POWER: It is difficult to reconcile how a $20 million cut could come at a time when in the last Budget the Government has delivered about $200 million of extra funding over a 4-year period.

Hon Clayton Cosgrove: Will the Minister finally, in light of the information provided to her today, take some responsibility for the demands that she and her Government have put on the New Zealand Police in respect of the $21 million cut outlined by district commander Cliff and noted at length by Commissioner of Police Broad at the estimates hearing, and will she tell the New Zealand Police to reverse the cut in the vehicle fleet to the tune of 10 percent that she has forced on it and to reverse the rationing of firearms training?

Hon SIMON POWER: The Minister of Police takes full responsibility for the extra $200 million that was found for the New Zealand Police over a period of 4 years in the last Budget. In fact, Budget 2009 provided $200 million in capital funding to support the extra police, and it provides for 43 extra police cars.

Adventure Tourism—Review

9. LOUISE UPSTON (National—Taupō) to the Minister of Labour: What progress has been made on the review of adventure tourism?

Hon KATE WILKINSON (Minister of Labour) : Today I have released the terms of reference for the review. A governance group has been formed to ensure that industry is closely engaged in the review. I expect that the review will be completed by March 2010.

Louise Upston: What has been the industry reaction to the review?

Hon KATE WILKINSON: The industry has been very positive and is already contributing to the review. The director of white-water rafting company Ultimate Descents, Tim Marshall, says: “I see this as a good thing, to make sure we are all up to standard,”. The industry understands that ensuring the highest safety standards across the whole sector is critical to protecting New Zealand’s international reputation.

Financial Crisis—Strength of Government Finances

10. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by his statement on Radio New Zealand this morning “New Zealand weathered the global financial crisis partly because of the strength of the Government’s finances”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Yes, and, as the member notes, the key word in that statement is “partly”. Although our debt position was low by historic standards, we inherited a range of problems that increased our exposure to the global financial crisis. They included an economy that had already gone into recession ahead of almost every other advanced economy; a forecast—

Mr SPEAKER: The Minister will resume his seat. He may have noted that the question just asked whether the Minister stood by a statement. The Hon David Cunliffe may have a supplementary question.

Hon David Cunliffe: Can the Minister confirm that when he took office net debt had already been reduced by Labour to zero percent of GDP, for the first time in New Zealand’s history?

Hon STEVEN JOYCE: In theory, net debt was close to zero, but concentrating on that indicator reveals a range of other problems that the previous Government left behind, including over a billion dollars in unfunded rail commitments, a $1 billion insulation fund for which no money had been set aside, a $2 billion hole in accident compensation funding that had been hidden before the election, a $320 million write-down of KiwiRail, plans for an unaffordable $3 billion Waterview tunnel, and a range of other unfunded commitments, the cost of which stretches to several billion dollars.

Mr SPEAKER: Amy Adams.

Hon David Cunliffe: I raise a point of order, Mr Speaker. There are other supplementary questions to come, but first let me traverse a matter that I have previously raised with you in a point of order. I simply seek a reiteration of your earlier ruling. In response to similar questions, Mr English has employed the similar tactic of deliberately confusing and terming unfunded liabilities matters—

Mr SPEAKER: No, the member must resume his seat now. The member is seeking to litigate an answer. He cannot do that by way of a point of order. He can ask further supplementary questions; if he disputes the information that the Minister has just given the House, he can ask further supplementary questions about that information, but he cannot litigate it by way of a point of order.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I confess to some degree of confusion in light of your most recent ruling, because I was simply referring to an earlier ruling that you had given. My new point of order is whether I am to take it that you have overridden your earlier ruling and are saying that it is now permissible for a Minister to deliberately confuse something that is bound by statute—that is, the difference between a quantified or unquantified fiscal risk and an unfunded liability?

Mr SPEAKER: The member is now getting into the detail of the matter. I can absolutely assure the honourable member that I have been consistent right the way through in these matters. Points of order cannot be used to litigate an answer, or even to question the quality of an answer. The Minister gave certain information to the House that was perfectly fair given the supplementary question that he had been asked. If the member disagrees with that information, he is perfectly at liberty to question the Minister more closely on some aspects of it. But I have called Amy Adams to ask her supplementary question.

Amy Adams: What other challenges did the Government face after the election?

Hon STEVEN JOYCE: The Government inherited many problems after the election, including an economy that had already gone into recession ahead of almost every other advanced economy, a forecast decade of deficits, out-of-control Government spending that grew 50 percent in the 5 years to 2009—twice as fast as the economy or revenue—and very low productivity growth over the previous 9 years.

Hon David Cunliffe: Can the Minister therefore confirm that upon taking office his Government inherited an economic environment where unemployment had dropped to the lowest rate—3.4 percent—in 21 years, and that GDP growth was well above the OECD average of 2.6 percent?

Hon STEVEN JOYCE: I can confirm that GDP growth was negative when the Government took office, as the result of a recession that had begun at the start of the year.

Hon David Cunliffe: Will the Minister confirm that the cost of his 1 April tax cut was $1.2 billion per annum, which is the same amount as the deterioration recorded in the Crown accounts released yesterday; and does he now think that it was premature to introduce a tax cut predominantly for high-income earners while delivering very little to hard-working Kiwi families and blowing out Crown debt?

Hon STEVEN JOYCE: The blowout in Crown debt was caused by unsustainable growths in Government expenditure, and this Government is very clearly focused on creating jobs and growth. In order to do so, we have to do a number of things, including providing incentives through our tax system to reward hard work across the tax range. The tax changes this year helped to achieve that.

Hon David Cunliffe: Does the Minister agree with the statement by John Key that he would pay for tax cuts by running “lower surpluses and increasing debt”, and will he confirm that had a tax cut been given then, in 2005, it would have added an additional $10 billion to the Government’s debt today?

Hon STEVEN JOYCE: No, and I think this illustrates the fundamental difference between this Government, and Mr Cunliffe and the Labour Party. This Government strongly believes that the best people to spend their money and help grow the economy are the people who themselves make the income, whereas those members believe that it is all about increasing Government expenditure at the expense of everybody else.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I submit that the Minister has not addressed the question, which asked whether he agreed with the statement of his Prime Minister. Instead, we got a homily on Philosophy 101 from the neo-conservative—

Mr SPEAKER: I have been very patient with the member’s points of order, but he abused the point of order system then by seeking to abuse the Minister. He cannot do that under a point of order, and I will not put up with it. The member has claimed that the Minister did not address his question, but if the member looks at the various components of the question he asked, he will see that the Minister was disagreeing with one of the parts of his question. One of the parts of his question related to tax cuts that had been talked about in 2005, if I recollect correctly, and the impact they might have had on the deficit announced the other day. The Minister was disagreeing totally with the assertion the member had made. That is a perfectly acceptable answer to the question.

Hon David Cunliffe: I seek leave to table a transcript of an interview with the Minister of Finance, Mr English, this morning, and also with BNZ economist Craig Ebert, who notes the significant impact on the Government’s fiscal balance of the big tax cuts—

Mr SPEAKER: What is it?

Hon David Cunliffe: It is a transcript of a broadcast from Radio New Zealand National.

Mr SPEAKER: Leave is sought to table a transcript from this morning’s Radio New Zealand National broadcast. Is there any objection? There is objection.

Question No. 11 to Minister

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. I would like to draw to your attention the wording of this question, and to ask you where in the question there is any indication of ministerial responsibility. This question asks nothing about Government policy; there is nothing about anything that any Minister has done. The Minister is not responsible for any announcement made by third parties. I submit to you that there is nothing in the wording of the question that indicates any Government responsibility at all, and therefore there is no ministerial responsibility.

Mr SPEAKER: The member has raised an interesting point. Obviously the question was scrutinised by the Office of the Clerk when it was accepted, and it has been accepted. My dilemma, as the Speaker, is that it would be pretty rash for the Speaker now to make judgments about the issue about announcements, because it may well be that the Government has made some announcement, and I cannot, as Speaker, make any judgment about that. I really think that I cannot assist the member, because I would be acting quite improperly as Speaker to be making some judgment about whether the Government might have made announcements.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. I now regard this as slightly more serious, because you have accepted the question. It might have been done by your staff or on your behalf, but the responsibility for acceptance of the question is yours. That is why I have taken it up with you in, I think, the only way we possibly can, when we think an error has been made on your part, and that is to ask you to rule whether this is in fact a proper question. The only thing that could be done, Mr Speaker, would be to deal with the question after question No. 12, so that you can satisfy yourself that you have acted properly.

Hon GERRY BROWNLEE (Leader of the House) : I think that is an interesting sort of point, but it falls to one side when we consider that if you applied that logic, then you would be also applying it to question No. 4 on today’s Order Paper, which was accepted, and which talks about “ACC should tighten procedures to limit access”, etc. That is no different from the Minister for Arts, Culture and Heritage being asked about encouraging philanthropic giving to the arts. That is quite a reasonable sort of step. The Office of the Clerk is very, very experienced in this matter. I know that its staff routinely sends questions back for correction. Quite often when we get the first sheets we see they have been corrected in all sorts of ways. Given that it is normally not the Government that asks most of the questions, we assume that others occasionally make those mistakes. But in this case I do not think there is one. I think it is very, very clear that this is an appropriate question for the Minister for Arts, Culture and Heritage to answer.

Hon Trevor Mallard: Mr Speaker—

Mr SPEAKER: No, I believe that I do not need to hear further on this. Interestingly, this question is actually a genuine question. The Speaker cannot know what announcements the Government might have recently made on this matter. It is actually a genuine question. There are other questions on today’s Order Paper that I would say, as the honourable Leader of the House has suggested, are more marginal. We do accept questions that seek opinions now. In fact, as the Leader of the House pointed out, question No. 4 not only seeks an opinion but also is a hypothetical question, and it was not ruled out of order. But this question is a genuine question; it is asking what announcements have recently been made. The answer may be none, for all I know. I applaud the fact that it is a genuine question.

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. This is a further point of order—

Mr SPEAKER: This will be heard in silence, but I will not take the matter further. I will hear the member—

Hon TREVOR MALLARD: Sure, and I think it is a matter, probably, for tightening up in the future rather than the past. But I can differentiate between a question that asks a Minister whether he or she agrees, and that therefore gets right into the area of ministerial responsibility, and question No. 11. If it had said “What announcements, if any, has the Government made …” or “has he made …”, there would be no argument about it. It just seems to me that some words are missing.

Mr SPEAKER: I appreciate the point the member has made, but I must confess that I think the “if any” wording is getting a little pedantic. It is very easy for a Minister to get up and say that actually the Government has not made any announcements in that area. So I think that is getting a little pedantic.

Arts—Philanthropic Giving

11. JACQUI DEAN (National—Waitaki) to the Minister for Arts, Culture and Heritage: What announcements have recently been made about encouraging philanthropic giving to the arts?

Hon CHRISTOPHER FINLAYSON (Minister for Arts, Culture and Heritage) : I recently announced the appointment of a task force to investigate ways to improve private philanthropic giving to arts and heritage organisations such as the New Zealand Film Archive, which I visited today. The task force seeks to advance the Government’s election promise to turbocharge community and not-for-profit groups. It is chaired by Peter Biggs, who was an outstanding chair of Creative New Zealand, and includes some of New Zealand’s most high-profile supporters of the arts, including Dame Jenny Gibbs and Caroline Henwood. The culture of private giving adds a great deal to the resources of overseas cultural institutions, but is less well developed here.

Jacqui Dean: Where does philanthropy fit in the Government’s vision for the arts?

Hon CHRISTOPHER FINLAYSON: Although we wish to encourage a culture of greater individual giving, this is in addition to the Government’s funding of the arts. This year’s Budget increased funding to Creative New Zealand and the Royal New Zealand Ballet by $10.2 million over 4 years, and, helpfully, an additional one-off payment was also secured through the Lotteries Grants Board for Creative New Zealand, the Film Commission, and the Film Archive. This Government believes that the arts should receive public and private support because they provide real social and economic benefits to this country.

Hon Steve Chadwick: Will he provide an answer assuring that there will be no decrease in Government funding for the arts and culture sector as a result of any increase in charitable giving by private individuals to the arts and cultural institutions?

Hon CHRISTOPHER FINLAYSON: I am seeking to grow the arts budget. I have made it clear on a number of occasions that the Government has very real responsibilities to fund the arts and that, in addition, the increase in funding from private and corporate sources will encourage an explosion in the arts.

Education—National Standards

12. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Education: Does she stand by her reported statement that—[Interruption] Tinkerbell, can you settle down?

Mr SPEAKER: That is not acceptable. I ask the House to come to order. The member asking the question often interjects when other members are asking questions. I ask him to just ask his question.

Hon TREVOR MALLARD: Does she stand by her reported statement that “We are all on board with this—for the first time since National Standards were first mooted”?

Hon ANNE TOLLEY (Minister of Education) : No, because that is not a direct quote from me. However, I do endorse the sentiment, which is that the parties in the primary sector—that is, the New Zealand Educational Institute, the New Zealand Principals Federation, the New Zealand School Trustees Association, and the Ministry of Education—and I as Minister have agreed to work together despite still having substantial differences. [Interruption]

Hon Trevor Mallard: They always clap the weak Ministers.

Mr SPEAKER: The member will resume his seat immediately. The member has just lost one supplementary question.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I do not wish in any way to challenge your ruling, but I would like to put something to you and ask your advice. Gerry Brownlee has done exactly the same as Mr Mallard eight times today—I counted. On occasion you have said to him that it was unacceptable. It is your right to determine the level of punishment, if you will—I accept that—but in no way, after eight occasions of doing far worse, at length, than Mr Mallard, did you ever—

Mr SPEAKER: The Hon Clayton Cosgrove will now resume his seat, because he is questioning my judgement and suggesting that I am not being impartial. I had already pulled up the Hon Trevor Mallard, when he asked a previous question, for giving a totally inappropriate interjection. Supplementary questions are totally at the discretion of the Speaker. I have given more supplementary questions to members of the Opposition when I have felt that the Ministers have not treated an answer appropriately. Today I am taking one off Labour, and the member will learn that this House is to be treated with respect and not like that.

Hon Darren Hughes: I raise a point of order, Mr Speaker. I wonder if you would give some very serious and deep reflection to what you are suggesting you want to do with regard to the allocation of supplementary questions. The entire operation of Parliament on a proportional system is a very delicately balanced arrangement among all the parties. At the beginning of a Parliament the number of supplementary questions that parties are allocated for each day is set out and agreed to by all the parties, as is the number of calls that are allocated, and as is the length of debates in a number of cases. I think that to have an arbitrary system whereby that is managed differently by you from day to day is a worrying precedent for you to set. I ask you to deeply reflect on that, because it is a very serious thing that you are doing, and it causes the Opposition to reflect on what arrangements made at the beginning of a Parliament for the rights of the Opposition in Parliament are to be had. Whatever the rights and wrongs—

Mr SPEAKER: I have heard the member’s point and I have listened—

Hon Darren Hughes: The Opposition loses here.

Mr SPEAKER: The Opposition will lose—indeed. Labour will lose today because the member asking the question would not listen to the Speaker’s directions to him to stop interjecting with abuse while he was asking a question. It was not the first time he did it; it was the second time he did it, while having the floor to ask a question. It is totally at the Speaker’s discretion as to what supplementary questions are awarded. The Speaker today has ruled that the member must learn not to do that kind of thing, and rather than go down the path of ordering the member out of the Chamber for that kind of thing, I have simply today taken a supplementary question off the member and his party, and that is the end of that matter. The member may not like it, but he might suggest that his colleagues actually treat the House with a little more respect and not do what the Hon Trevor Mallard did today.

Hon Darren Hughes: I raise a point of order, Mr Speaker. I am sure that your invitation to reflect on behaviour will apply right across the Parliament, but the issue that has come up here is that the member responded to disorder from the Government. My question to you is about what penalty you believe is available to the Government when its members are clapping wildly at a very standard—

Mr SPEAKER: I have listened to the member long enough. The Hon Darren Hughes will resume his seat right now. If the member is concerned that I am not treating this House impartially, let him just reflect that in my 25 years in this Parliament I have never heard a Speaker require a Leader of the House to answer a question from the Opposition. Yesterday I required the Leader of the House to answer a question—that is unprecedented in my time in this House. So if the member is suggesting that I am being partial I suggest that he watch today’s replay and listen to the behaviour of his colleagues today. I think he will find it not a very satisfactory process. Here at the front I hear the noise on both sides, and let me assure the senior Labour whip that the behaviour of his colleagues today has not been very good at all.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I ask you to provide us, if you will, with a considered ruling on the matter. You have taken the action you deemed appropriate in respect of Mr Mallard. You have taken a question from him after, you say, two indiscretions. You have also advised us that it has been your practice previously in respect of Government Ministers, if they err, that you allow further supplementaries to sanction that. So I ask you to give us a considered ruling in respect of the formula that would be adopted, given that there were eight indiscretions and that no increase in the number of supplementary questions was allowed by you, as is your right. Yet after two indiscretions a supplementary question was docked. I invite you to reflect on the quality of the behaviour from both sides.

Mr SPEAKER: The member is again questioning my judgment. He will resume his seat. I invite the Hon Trevor Mallard to ask a supplementary question, should he wish to do so.

Hon Trevor Mallard: Will she rule out an amendment to the Official Information Act as a method of implementing her newly announced agreement to stop league tables?

Hon ANNE TOLLEY: I have made it very clear in this House that the Government will not tolerate anything that stops the flow of information about student achievement between parents, schools, their communities, and the Ministry of Education.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. My question was a very simple, very specific, and very direct question. It asked the Minister about the Official Information Act. She made a general comment and did not refer to whether she would rule out that amendment.

Hon ANNE TOLLEY: It is hypothetical. There is no legislation in front of me to change the Official Information Act.

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

Mr SPEAKER: I will hear the Hon Trevor Mallard for the last time.

Hon Trevor Mallard: It was a very simple question: will the Minister rule out an amendment to the Official Information Act as a method of implementing her newly announced agreement to stop league tables? It is not a hypothetical question; it is a direct question. There does not have to be something before the Parliament for the Minister to rule it in or out. It is a question about her area of responsibility, and she did not answer it.

Mr SPEAKER: The member knows he cannot expect to get an exact yes or no answer to that kind of question. It is a hypothetical question—will the Minister do something in the future. There is no way the member can expect a specific answer to that question. I am afraid I cannot assist the member any further on that one.

Aaron Gilmore: Why does the Government believe that the Ministry of Education should provide school level achievement data from national standards?

Hon ANNE TOLLEY: The Ministry of Education can tell us how many dollars an individual school spends on administration. It can tell us how many students were stood down from that school in the last year. But at present there is very little knowledge of how well a school does in teaching its students basic literacy and numeracy skills on a year-by-year basis. When I tell parents this, they are absolutely astounded that the Government does not know how well those schools are teaching children to read, write, and do maths. We need this information in order to help schools that are struggling and to support them to raise the achievement of their students.

Points of Order

Signage in the Chamber—Motion Supporting Armed Services

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. I seek leave to move a motion without notice supporting the defence forces, consistent with the signs currently showing on Labour benches.

Mr SPEAKER: Let me understand just exactly what is being sought.

Hon TREVOR MALLARD: Leave is being sought to move a motion without notice supporting the defence forces, consistent with the signs.

Mr SPEAKER: Leave is being sought to move a motion without notice, and there is no question that leave can be sought for that without notice. Is there any objection to that course of action being followed? There is objection. I ask the senior Opposition whip to remove the signage, please. I thank the honourable member.

Anti-Money Laundering and Countering Financing of Terrorism Bill

Third Reading

Hon SIMON POWER (Minister of Justice) : I move, That the Anti-Money Laundering and Countering Financing of Terrorism Bill be now read a third time. This bill will improve our ability to detect and deter money-laundering and terrorist financing, which is vital to our fight against domestic and international organised and financial crime and terrorism.

The proceeds of financially motivated crime—including drug-related crime, property-related crime, fraud, and tax evasion—are significant. Local and international criminals have shown themselves to be willing to use our comparatively safe and stable financial sector to launder the proceeds of these activities. This legislation will improve our ability to investigate organised crime and to follow the money trail through financial systems.

The ASSISTANT SPEAKER (Hon Rick Barker): There is a lot of chatter in the Chamber from all sides of the House. The Minister is speaking. I would like some quiet, please. I say to the member who is gesticulating to me that it is traditional for members not to have their backs to the Speaker. There must be respect for the Chair.

Hon SIMON POWER: This bill goes hand in hand with the Criminal Proceeds (Recovery) Act, passed by the Government in April, which will be used to attack those profits.

The passage of the bill into law will help to maintain New Zealand’s international reputation and confidence in our financial trading system. Most of New Zealand’s financial trading partners have already implemented robust anti - money-laundering and countering financing of terrorism regimes. In a global economy, countries and businesses are looking for stable, safe economies with which to do business. The passage of this bill into law will demonstrate New Zealand’s commitment to assisting with what is an international problem. The legislation implements measures established by the Financial Action Task Force, which is an inter-Governmental body that sets international standards for combating money-laundering and terrorist financing.

The bill anticipates a significant amount of cooperation between industry and Government to ensure that the regime is responsive to risk, and effective at detecting and deterring criminal activity. The bill, as far as possible, enables businesses to focus their resources on those customers or products that represent the most risk. However, to achieve the bill’s aims, financial service providers and casinos will need to ensure they have appropriate customer due diligence measures and that they can identify and report suspicious activity. The framework the bill establishes is appropriate to New Zealand’s financial system, and is aligned with the frameworks of our trading partners, particularly those of Australia. The bill establishes the Reserve Bank of New Zealand, the Securities Commission, and the Department of Internal Affairs as supervisors to support and maintain the new regime as it is phased in.

I thank members of the Foreign Affairs, Defence and Trade Committee, in particular the committee’s chair, and industry representatives for their valuable contribution to the development of this legislation. I commend this bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I am really disappointed with the comments of the Minister, Simon Power. He does this continually. I now have to acknowledge all my colleagues who said that I was wrong about that Minister, and to say that I was in fact wrong and they were right. There is an increasing level of arrogance about that Minister that has completely surprised me. Not once did he mention the work done by my predecessor in this portfolio, the Hon Clayton Cosgrove, on the cost-benefit analysis that was critical to fixing the disastrous bill that that useless Minister introduced. The second thing he failed to acknowledge was the work by my colleague the Hon Pete Hodgson, who I believe was able to work very collaboratively with members of the Government on the Foreign Affairs, Defence and Trade Committee in order to make the changes that needed to be made to this Anti-Money Laundering and Countering Financing of Terrorism Bill.

This bill is nothing like the bill that was introduced into this House some months ago. The reason it has had to change so substantially is that, to put the kindest expression that one could put on it, a very busy Minister took his eye off the ball and let a bill be introduced into this Parliament in a shape that was completely and utterly unacceptable, unworkable, and totally out of line with the cost compliance that one would expect to see, given there was a process across the Tasman in Australia that we should have been able to work with right from the outset. This bill was introduced in really bad shape. I guess that is the point I want to make, and I want to know why. That Minister has not once addressed in all of his contributions on this bill why he took his eye off the ball, in that regard. The fact that he has not even acknowledged that he did take his eye off the ball just shows how arrogant he has become. I am truly disappointed, because I thought he was one of their better ones and I hate to be proven wrong.

I think the problem actually arose when the Government shifted away from that focus on harmonisation with Australia. Again, that surprises me, because the Minister of Justice who is responsible for this bill is also the Minister of Commerce, with responsibility for the single economic market agenda. So it seems utterly surprising to me that he did not pick up that it was fundamentally flawed legislation, until it was able to be rectified by the select committee.

The Foreign Affairs, Defence and Trade Committee did, I think, a very good thing. It was not the committee that would normally be dealing with technical matters such as these; they would normally be within the purview of the Finance and Expenditure Committee or the Commerce Committee. But I congratulate the chair of the committee, John Hayes, and the members of the committee, who I think worked very collaboratively on the bill, on bringing in outside assistance to enable them to address the complexities of the issues.

I think that if we want to really understand the difference between the bill as introduced and the bill that came out of the select committee, we have to look at two quite different approaches. One is a risk-based approach, and that is the one that has been implemented in Australia. The other is a very prescriptive set of rules—one ticks the boxes, and one has to do things in a particular way in order to proceed. I think the Australian, risk-based approach is the right way to go. It is usually the right way to go in the commercial area, because, of course, pacing the prescriptive requirements can actually mean that businesses are not alert to the real issues they should be alert to when trying to manage the risk of things going seriously wrong.

What are we trying to manage here? I think it is important to remember that this bill is the Anti-Money Laundering and Countering Financing of Terrorism Bill, so it is about identifying the risk of large sums of money being laundered through our banking system, which of course has to have integrity in order to be effective, and it is also about countering the financing of terrorism, another important issue that our country has to be part of in terms of our international obligations under the Financial Action Task Force. I think that it made absolutely no sense to me, whatsoever, that this National Government, of all Governments, which says it is the friend of business, introduced a bill with a whole set of prescriptive rules. In fact, banks could not even enter a casual business relationship with somebody from overseas who might be in the process of migrating to New Zealand and wanting to set up a bank account, without first having done some background checks. That would, of course, have been ridiculous, and would have meant that a lot of people who wanted to migrate to New Zealand would have found it very difficult to comply with the requirements of the legislation as it was first set out.

When Labour members were in Government, we were very concerned to see that this legislation had a very detailed cost-benefit analysis with it. That is why my predecessor in this portfolio, the Hon Clayton Cosgrove, made sure a detailed analysis was undertaken so that the costings would be known. We knew that this bill would impose costs on business; we wanted to make sure that it was the most cost-effective way of delivering the kinds of outcomes that we were seeking in the anti - money-laundering space. But the problem was that when the Government changed the nature of the bill itself, provisions against which the original analysis was measured bore no resemblance to the bill as introduced. That, of course, made a total mockery of the regulatory impact statement in the original bill. I do not think that the Government members picked up on that anywhere along the line. If a detailed, cost-benefit analysis is undertaken by an independent financial agency—as was done by the previous Government—and a Government then introduces a bill based on an entirely different set of requirements from those measured in the independent analysis, then the cost of compliance is completely understated. That was the issue that we had with the bill as introduced.

I have some notes from one of the banks that I certainly spoke to about that particular issue. The bank identified that the cost of the anti - money-laundering project in Australia, just for that one bank alone, was $35 million to complete. If the bank had been able to project that cost into the New Zealand environment, simply leveraging off the work that had been done in Australia, then just for that one bank in New Zealand the cost would probably have been another $5 million to $7 million. With the bill as introduced, that cost suddenly skyrocketed to $10 million and even up to $22 million. That is the size of the difference in costs that would have been imposed if the bill had been allowed to proceed in the way that it was introduced by the Government.

I would have thought that the Minister of Justice would think it was necessary to explain to the House how we got into the situation where such a significant change to legislation was able to go through Cabinet. I bet that Cabinet was not actually told the extent of additional costs that would have been imposed on the banking sector by the shift from the risk-based approach to the prescriptive rules that were introduced.

I place on record the Opposition’s gratitude to the advisers who supported the select committee in the work it did. It is not usual to have external advisers, particularly those who might seem to be interested parties, to be providing that degree of support and assistance, but the Government had got the bill so fundamentally wrong that it was important for a different process to be adopted at the select committee. As a result, we now have a good bill that Labour can support, and that can meet New Zealand’s international commitments on the Financial Action Task Force framework. So I am very pleased to support the final reading of the Anti-Money Laundering and Countering Financing of Terrorism Bill.

JOHN HAYES (National—Wairarapa) : It is fascinating to sit on this side of the House and observe the actions of a lawyer, or a legally trained person, and see the way the member manipulates the facts at her disposal to suit a particular case. I say to that member that she has completely manipulated her assault on the Minister of Justice, who opened discussion on this bill, and who I think did a particularly fine job of introducing this legislation to Parliament. The problem that she should have addressed and explained to this House was why it took you 9 years of sitting on the Government benches—

Hon Trevor Mallard: Hey, hey!

JOHN HAYES: Sorry. Why would it take your party 9 years of sitting on the Government benches to do nothing on this legislation? This legislation was around for 9 years—

Hon Lianne Dalziel: No, it wasn’t.

JOHN HAYES: Yes, I am sorry, it was. It was there for 9 years. I was an official in the Ministry of Foreign Affairs and Trade dealing with this legislation at that time—9 years ago. I know that the speech that you have just made, the assertions you have just made, are actually wrong.

Hon Steve Chadwick: I raise a point of order, Mr Speaker. If the member could remember not to draw the Speaker into the debate, it would be helpful.

The ASSISTANT SPEAKER (Hon Rick Barker): I am sure the member has got the point.

JOHN HAYES: I think I had the point and made adjustments as I was speaking. That is just another game on the part of the Labour Government to disrupt—

Jacqui Dean: Labour Opposition.

JOHN HAYES: It is a game on the part of the Labour Opposition to disrupt my speaking pattern.

Hon Trevor Mallard: Talk about living in the past!

JOHN HAYES: Yes, let us look to the past, because for 9 years you sat there—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I am really just taking a bit of time for the member to reflect on and get ingrained what he has to say.

The ASSISTANT SPEAKER (Hon Rick Barker): I am sure the member will just draw a breath and realise that when he addresses comments directly to people, he should address them by name or by party, and avoid the use of the word “you”. That word is not automatically ruled out on every occasion. It can be used where someone says: “So and so, you did such and such.”, but on this particular occasion I was the subject of the sentence and that is not permissible.

JOHN HAYES: Thank you, Mr Assistant Speaker, for that clarification.

Certainly, I had 9 years to reflect on why the previous Government took no action on this issue. There was significant pressure from the international community, through the OECD and also through the Financial Action Task Force, to take action to process this legislation. That was not done. So I commend Simon Power, the Minister of Justice, for the excellent job he did. Within 9 months of coming into Government, he introduced this legislation to the House. I thank him for his work.

I also thank him for the space that he gave the Foreign Affairs, Defence and Trade Committee to do one or two slightly unusual things. I would particularly like to record the thanks of the committee to the officials from the Department of Internal Affairs, the New Zealand Police, and the Ministry of Justice who assisted the committee in its deliberations. At an early stage of our consideration of this quite complex legislation it became very clear that it had to be harmonised absolutely with the Australian legislation. There was no debate about that. One of the things the committee agreed to do, quite quickly, was to bring in experts from the banking sector to sit down with officials from the ministries that were advising the committee. That process worked extremely well.

Finally, I thank my colleagues on the committee, from all parties, who were involved in the deliberation on the legislation. I particularly thank my Labour colleague Pete Hodgson, who made a really significant contribution to the consideration of the bill, but there were also others. I do not particularly want to draw attention just to one or two; I thank everybody for the great job they did in bringing this legislation into place. I think it will really help not only the banking sector but also business in New Zealand that we have managed so successfully to integrate and harmonise the legislation with the Australian legislation. I think that will be fundamentally important, given that much of the ownership of the New Zealand banking sector is, at this point, in Australian hands. I think too that it is worth reflecting, as we look ahead, on whether we ought to focus on introducing one entity to monitor this legislation, along the lines of the Australian Transactions Reports and Analysis Centre. I think that having three entities in New Zealand doing this monitoring function will inevitably lead to something falling through the cracks at some point in the future.

With those few words, I particularly support this bill and again thank all of those colleagues who were involved in progressing the passage of the bill through the House.

Hon TREVOR MALLARD (Labour—Hutt South) : I want to talk to the Anti-Money Laundering and Countering Financing of Terrorism Bill as well, and to say—

Jacqui Dean: That would be a change!


Jacqui Dean: That will make a change.

Hon TREVOR MALLARD: There is a member over there whose name I have forgotten, and I do not really understand what she was saying. The point that I will start off by making is that this bill, as it is printed at the moment, is substantially bigger than the one that was introduced to the House, as a result of the many changes that had to be made because the bill was inadequate when it was introduced. Today we have had, I think for the first time, an explanation for the inadequacy of the advice stream that led to the very poor bill that was introduced. It was that the previous speaker, John Hayes, was in charge of the advice stream. He was in charge of the advice stream for a number of years, which meant that the bill was unsatisfactory and that the compliance costs put on the banks would have been far too high.

The bill was held back by my colleague Clayton Cosgrove, because he was not satisfied that it was of sufficient quality to introduce to the House. It was introduced in the House by Simon Power, who was described yesterday as a country solicitor by Don Brash, I understand, because of his lack of understanding of some matters. I think Don Brash was making a plea for Chris Finlayson to deal in future with the matters that Mr Power is currently dealing with. As a result of the poor quality of the bill, the Foreign Affairs, Defence and Trade Committee had a lot of work to do on it, and I am not absolutely certain whether it did its work in the right direction. My colleagues on the committee all advise me that they did the right thing, but I think it is fair enough at this stage to say the process they have gone through has still left me with a bit of doubt about the work that has been done around this bill.

That is especially so around the definition of a “politically exposed person”, because the effect of the change that was made by the select committee was to take Ministers of the Crown out of the category of politically exposed persons. One question I have is whether that move went in the right direction or in the wrong direction. Clearly members of the executive—and, in particular, one very politically exposed person opposite—are currently under investigation by the Auditor-General, and financial questions are involved. Any consideration of the use of those funds appears to have been excluded by the changes that have been made to the bill, unless a person travels overseas and there are reciprocal arrangements.

John Hayes: That’s not how it works.

Hon TREVOR MALLARD: I am sorry, but the explanation that we received, I think, is that other countries are putting in place similar legislation to this bill, and that politically exposed persons who travel overseas will be caught at that stage. We were told that just as Ministers who come from overseas to New Zealand will be caught by this legislation, other countries are putting in place legislation like this. When Mr English travels to those countries, he could well be caught under their equivalent legislation, if the common approach to legislation that is being encouraged by the United Nations is picked up on.

But my question is not only about whether the definition should be stopped in that particular way but is also about whether the bill should have gone further. I ask whether members of Parliament generally, who have enough influence on legislation and on matters like this, should be caught. There are a couple of examples around at the moment. I think that there has been quite a lot of speculation about Melissa Lee: about where the extra $100,000 is currently sitting, and whether it would be caught if it went offshore. A lot of us were expecting that the police report on Mr Bakshi would be available this week, and there is a question of money being held offshore in that case. I would like my colleagues to give me some more explanation, as they are dealing with this matter, of whether this legislation would apply to someone who has an enormous influence over Ministers as a member of Parliament and a representative of a particular community. I ask why those funds, just because they are held in rupees in India, should not be caught under this legislation. I think that is a very real question. Therefore, given the change that was made to tighten the definition, I wonder whether some of our reputation might well have been placed at risk as a result of that.

I want to make it clear that as a former New Zealand Minister, an Associate Minister of Finance, I went on occasions to the World Bank, to the IMF, and to the Asian Development Bank. The probity of New Zealand Ministers, over a long period of time—and I can remember well back to Harry Lake, Rob Muldoon, and many Ministers since them—was never an issue, and there has never been a question of personal corruption as far as a Minister is concerned. There has never been a doubt in the past, and that is partly because of the integrity of the individuals. However much we disliked Ministers on occasion in the past and however much we disagreed with their policies, there was no indication of money going into their pockets. As a result of that, New Zealand’s international reputation has been good. We have been well regarded, and because of that I am sure that the rates charged to the New Zealand Government on its international borrowing are lower than they would otherwise be. There is no corruption risk factor sitting in New Zealand. That is partly a result of our legislation, but also partly because our Ministers not only have integrity but are seen to have financial integrity. They are seen to have it throughout their parliamentary careers. I think we value that highly in New Zealand and there is a degree of anxiety around that.

So I invite Chris Carter, or whoever follows me from the Government benches, to talk about that. I think the member for Rotorua has had personal experience of being the international representative of a country that has had some dodgy financial arrangements. I would welcome his expertise and the advice that he is able to give to Bill English, based on his personal experience, as to how a country can improve and regain its reputation over a period of time, after it has had problems in the past. I am not sure whether the member for Rotorua was part of the problem or part of the solution, but I know that he knows quite a lot about the issue. We will be interested to hear from him about the details of the international matters in which he has some experience. I am sure that he will not have caused the problems in quite the same way that we are now seeing.

The other area that I will focus on is the requirement for suspicious transaction reports. I make it clear that from my perspective we need to get a lot more transparency in this area, including in the New Zealand Parliament. It is my view that the use of trusts by members of Parliament almost automatically creates distrust and suspicion, because people ask why members are hiding things. I accept that there are a number of reasons for using trusts. As someone who is not infrequently the subject of litigation, I can understand why people would put their assets, if they have substantial assets, in trusts. But we should at least let those trusts be transparent. The trusts should be—

David Garrett: Is yours transparent?

Hon TREVOR MALLARD: Yes, absolutely. I do not have a trust; I have chosen not to have one. The point I am making is that members of Parliament and Ministers must be transparent if we are to regain some of the international integrity that we have had. We have always been seen as the least or second-least corrupt country in the world. Not only do we have to pass this legislation but also we have to have a Minister of Finance who is perceived to be clean.

KEITH LOCKE (Green) : The Green Party supports the Anti-Money Laundering and Countering Financing of Terrorism Bill. We were part of a very thorough select committee process that dramatically transformed the content of the bill to use a risk-based approach. We worked closely across all parties and with the banking sector, and the final result is a risk-based system that is fairly close to that applied by Australian banks. In the final analysis that means that instead of banks having to run around getting multiple sources of identification from low-paid workers, beneficiary customers, and people who are more transient, and wasting all their time on people who would not even have the resources to be money-launderers, they are now able to concentrate on the people who really are a problem.

This legislation will reduce money-laundering. In the Foreign Affairs, Defence and Trade Committee we were presented with examples of the ways in which people shift money around from country to country, from the Pacific Islands to Australia and New Zealand. Those people get a big tax advantage and other advantages by shifting the money around through dummy accounts. This bill will improve that situation and increase tax receipts for the New Zealand Government, the Australian Government, and Governments of the Pacific Islands in our region. The implementation of such procedures as a result of the Financial Action Task Force proposals has reduced money-laundering, corruption, and funny-money sorts of dealings in some of the smaller Island States, including in the Pacific.

The bill probably has not gone far enough to really deal with one of the problems that is at the core of the current financial crisis, which is the huge amount of money in tax-haven countries, attracting not much tax at all, and in fact denying the home countries of the particular investors the deserved tax take. New Internationalist magazine estimates that $11.5 trillion, or $11,500 billion, are in tax havens, which equates to a huge amount of tax that could be of benefit to those home countries, particularly poorer countries. But it is disappearing into the private pockets of multimillionaires or billionaires. I am not sure that the Financial Action Task Force, referred to in this bill, will fully deal with that situation, partly because the Financial Action Task Force itself is an organisation of rich counties. It is specifically not a UN organisation; it is an OECD, or rich-country, organisation. There is probably some way to go before we really deal with that problem that is hitting the world in terms of the financial crisis. It is true that the work of the Financial Action Task Force is reducing corruption internationally, and, I suppose, one of the aims from a rich investor’s point of view is to make countries safer for investment, to reduce the overheads in terms of corruption in particular countries. It is a good thing that corruption is being reduced.

The other element to the bill, which is in the title of the bill, is countering financing of terrorism. Exactly how that will work is a bit unclear. We do not have a large number of terrorists in New Zealand at the present time, and one of the problems when I asked—

Hon Trevor Mallard: Depends if you ask the Chinese or not.

KEITH LOCKE: Ha, ha! Yes. I asked the officials which terrorist lists are used to filter the banking transactions, and they said that, basically, the American lists are used. The American list is pretty big; there are hundreds of thousands of people on the list. We had a case a few years ago of a chap up in Auckland, Mohammad Abbas, who was sending money to his sick relatives in India from Auckland through Western Union. Somehow, it all got checked in America on the way through, and he had a hell of a job getting the money to his relatives, because there was somebody else on the list called Mohammad Abbas. It is a fairly common name in the Muslim world. That is an illustration of some of the problems that one can come up against.

One of the other aspects that we were talking about in the select committee was the way financial transactions are done internationally. They all pass through what is known as the SWIFT system, which is a system that has two very big data-processing centres, one in Europe and one in the United States, that mirror each other for 124 days before the information is stored in a back-up facility. The European Governments had a problem with SWIFT—and they have partly solved it now. There was a big battle between the US and the EU over what happened at some of the data centres sitting in the United States. The US Treasury asked for information from SWIFT on this, that, and the other thing, and they were doing what was described by the Europeans as carpet sweeping. They were getting a whole array of information on transactions without particular targeting of people who they could prove were a terrorist danger. Some of the information they were seeking was not related to US transactions—that is, transactions originating or finishing in the US—sometimes it was related to internal transactions within European Union countries. The European Union countries were a bit upset that some of their internal transactions were being demanded by the United States Government through the SWIFT system.

Most of New Zealand’s banking transactions and reconciliations go through the SWIFT system, with all the details—the name, the amount, etc.—attached to them. There are still possibly a few problems to be worked out there in terms of privacy and in terms of which terrorist definition one applies when one filters the financial transaction information, etc. The Green Party, despite concerns about that dimension of it, does support this bill as a good way of combating the scourge of money-laundering and the criminal activities that go with it.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Assistant Speaker. Kia ora tātou katoa. The Māori Party is pleased to support the Anti-Money Laundering and Countering Financing of Terrorism Bill at its final reading. We welcome the move of the House to do so in time for World Poverty Day, which is coming up this Saturday, 17 October. The 2009 observance of the International Day for the Eradication of Poverty focuses on the plight of children and families living in poverty, which is a goal that we in the Māori Party keep very close to the heart. In the relationship agreement we signed with the National Government just over 11 months ago was a commitment to achieve significant outcomes in whānau ora through eliminating poverty. The question that we come to this bill with is how the law that we pass today will make a difference to lifting people out of poverty.

In the context of Aotearoa, the failure of many investment companies, the possibility of fraudulent banking and investment practice, and the lack of confidence in our financial system have robbed investors of savings, and that in itself is a very good reason why this bill has surfaced. But probably the most direct impact on reducing poverty is at a global level, and some other speakers have spoken about that already. An International Monetary Fund estimate back in 1998 placed the value of global money-laundering, including that of corrupt funds, at between $8 billion and $2 trillion annually. We are talking about huge amounts of funding resulting from the practice of bribery and corruption. That estimate is from a decade ago, so we can only imagine the extent of the damage that happens now. When we start talking about trillions of dollars, it all becomes a bit of a Beagle Boys operation, manufacturing wads and wads of illegal notes.

In its most basic form, money-laundering transforms what we might call dirty money—that is, money from crime—into clean money. Clean money has nothing to do with the crispness of the notes, of course. It is all about whakapapa. You see, clean money to all outsiders’ eyes looks like it comes from a legitimate source, which thereby makes it almost impossible to trace the criminal origin of the money. By using this form of changing money, this process of transformation, criminals are able to benefit from their crimes, and it becomes extremely difficult to develop a case for prosecution. It becomes even more complex when we find the menu of ways in which money-laundering can take place. I found this to be quite a matter of interest.

The helpful Ministry of Justice website against money-laundering shows almost a beginner’s guide to money-laundering. There is something called smurfing, which is the process of depositing cash across a range of institutions in amounts that do not need to be reported to the Government, and then eventually transferring it all into a central account. Then there is currency smuggling, which is when funds are moved across borders by mail, courier, or body packing as a form of disguise. There is exchanging transactions, where foreign currency is bought that can be transferred to offshore banks. Alternatively, prospective money-launderers could purchase assets with bulk cash, which is building up an inventory of assets such as cars, boats, and real estate, and then selling them to deposit the funds. If all else fails, there are the casinos, where a pile of gambling chips can be purchased and then redeemed for a big, huge, fat cheque.

The more we read about it, the more complex and the more sophisticated the whole industry of money-laundering becomes. Initially that seems a pretty good reason for passing legislation to make it easier to detect and investigate money-laundering activities.

One the issues that interested us when this bill came before the Foreign Affairs, Defence and Trade Committee was an observation made by the National Council of Women. It suggested that the claim that the bill will contribute to public confidence in the financial system seems contrived. Its view was that in the absence of hard evidence that our banking system is threatened by money-laundering or terrorism, it is difficult to know whether the public will feel more confident if this bill is passed. Instead, the National Council of Women of New Zealand saw the reason for this bill being indirectly in the public interest, in terms of complying with international obligations.

Basically, the Government is obliged to pass this legislation to maintain the viability of our economy in global eyes. It is about keeping faith with the Financial Action Task Force on Money Laundering, which is a body to generate the political will to combat money-laundering and terrorist financing. That last part is the real reason why so much momentum is focused around this particular bill. It is driven by American legislation such as the Patriot Act, which amended the Bank Secrecy Act in response to the attacks of September 11, 2001. The Patriot Act is intended to strengthen measures to prevent, detect, and prosecute international money-laundering and the financing of terrorism. Here ends the lesson of whakapapa.

Having established the source and the context of why we are rushing this legislation through today in this third reading, I will return to the specific impact of this legislation for us. The briefing paper from the Reserve Bank puts this bill into the context of being an essential component of the Government’s programme to tackle organised crime. That paper estimates the profits from methamphetamine and cannabis at between $1.4 million and $2.2 billion per annum. The anti - money-laundering framework will allow the flow of such funds to be tracked and seized.

I raise a note of caution that emerged from the paper written by Dr Jackie Harvey and published in the Money Laundering Bulletin, a publication from the Newcastle Business School. It stated: “Without facts, legislation has been driven on rhetoric, driving by ill-guided activism responding to the need to be ‘seen to be doing something’ rather than by an objective understanding of its impact on predicate crime. The social panic approach is justified by the language used—we talk of the battle against terrorism or the war on drugs.”

I think that this advice is useful to bear in mind when we talk about things such as money-laundering, so that we focus on the crime at hand, which is the fraudulent use of funds, rather than on promulgating fear. As we return to the Māori Party focus on the most effective ways to eradicate poverty, I cannot leave this debate without noting that our adoption of the recommendations will increase business costs to customers, which will be passed on to ordinary bank customers. This is at a time when, as the Finance and Expenditure Committee report makes clear, banks have already been shown to be overcharging their customers. We are concerned that this legislation will place additional costs on businesses and customers when they are under the most strain. There is little clarity in the bill about the extent of these costs, but it will cost, and there is no doubt about that.

The Māori Party will continue to speak out about the absolute need to address the matter of poverty. If addressing bribery and corruption will help to make life easier for the working poor and the poverty-stricken, then we will certainly support that aim. We do not believe that this bill goes anywhere near an effective response to the problems of income distribution, but it does make an honest attempt to ensure that we are aligned with cleaning up the international financial system. As global citizens, we are pleased to support this third reading of the Anti-Money Laundering and Countering Financing of Terrorism Bill.

JACQUI DEAN (National—Waitaki) : The purpose of the Anti-Money Laundering and Countering Financing of Terrorism Bill is very clear. It is to bring New Zealand into line with the international standards for the framework of anti - money-laundering and countering financing of terrorism. These standards are set out by the Financial Action Task Force on Money Laundering, of which New Zealand is a member. The purpose of the Financial Action Task Force on Money Laundering is to develop and promote national and international policy around prevention of money-laundering and the financing of terrorism. This bill is designed to enhance New Zealand’s anti - money-laundering and countering financing of terrorism legislation and is to be in line with recommendations from the Financial Action Task Force on Money Laundering.

The bill is forward-looking. It recognises that the financial sector is one of rapid technological change. It is, as far as is practicable, harmonised with Australian legislation. It is risk-based rather than being overly prescriptive, and that is to minimise compliance costs for banks and financial institutions but also importantly to maintain smooth business relationships between, say, a bank and its customers.

A risk-based approach will enable financial institutions to focus resources on areas of higher risk with varying levels of customer due diligence, or checking if you like. It will depend on whether there is an existing relationship with the customer, whether there has been a material change in the nature or purpose of the business relationship, whether the customer is a trust or another vehicle for holding personal assets, or whether it is an overseas customer. In terms of risk, there is a world of difference between the financial transactions undertaken by my lovely, elderly mother-in-law and a non-resident customer from a country that has minimal anti - money-laundering measures in place. Customer due diligence provisions recognise these varying levels of risk of money-laundering on behalf of their customers.

Reporting entities, banks, and financial institutions will be required to develop anti - money-laundering programmes and to report to one or more of four supervisors. Those supervisors are, at the moment, the Reserve Bank, the Securities Commission, the Police, and the Department of Internal Affairs in the case of casinos. Those supervising entities will be required to develop a regime for the supervision of the monitoring and enforcement of its anti - money-laundering and countering financing of terrorism obligations under this legislation. Given the strength of New Zealand’s existing financial monitoring systems we recommended against requiring the application of the Financial Action Task Force on Money Laundering definition of politically exposed persons to New Zealand nationals living within New Zealand. However, enhanced scrutiny will be applied to foreign politically exposed persons conducting transactions within the New Zealand financial sector.

The main object of this bill is to detect and to deter money-laundering and the financing of terrorism. Measures in the bill are designed to facilitate cooperation between reporting entities, anti - money-laundering and countering financing of terrorism supervisors, law enforcement, and regulatory agencies. This bill achieves those objectives, and with thanks to committee members, banking representatives, and officials, I recommend this bill to the House.

Hon CHRIS CARTER (Labour—Te Atatū) : As the previous speaker, Jacqui Dean, said, the purpose of the Anti-Money Laundering and Countering Financing of Terrorism Bill is to enhance New Zealand’s anti-money laundering and countering financing of terrorism network worldwide, and assure the world that New Zealand’s financial system is robust, transparent, and honest. I know that the question of politically exposed persons has been a subject of some debate in this House. I was listening with a degree of amusement to my colleague Trevor Mallard’s exploration of that particular phenomenon, particularly in reference to Mr English’s embarrassing situation over the rent for his house. I guess that is an issue that focuses us on how a financial system picks up where corruption has been occurring in a financial system.

In the course of the Foreign Affairs, Defence and Trade Committee looking at this legislation, we heard that it had a confidential report from the New Zealand Police. The report was about whether money-laundering had been going on through our financial system, whether there had been a transference of funds between different South Pacific locations, and whether there were genuine reasons why we should be concerned that politically exposed persons—I am not necessarily saying New Zealand ones, but ones in our region—were using our financial system to launder money. The report we received back was indeed that cases of that were proven. There were also concerns that international terrorist groups—and, sadly, this is a phenomenon of our age—were using global financial networks to move funds around to finance their terrorist activities. There was concern that our financial system could provide that cover to wash money through to make it look legitimate and to use it to finance terrorist activities.

New Zealand is a member of the Financial Action Task Force, which my colleague Keith Locke talked about a few minutes ago. It is an international organisation established to combat the very issue of money-laundering and terrorist financing. This is an issue that the previous Labour Government was working on. My colleague the Hon Clayton Cosgrove, as the Associate Minister of Justice in the previous Government, had officials working on this issue. It is something that New Zealand has an international obligation to work on, to assure our global partners and the international financial system that our systems are robust and effective in stopping money-laundering, particularly with its focus these days on international terrorism.

One of the things the Foreign Affairs, Defence and Trade Committee was really concerned about was that the structures we put in place within our financial systems were in sync with those in Australia. As most people are aware, much of our banking system is Australian-based. It is the banking system in particular—and the wider financial system, of course—that is the framework where this new legislation must be effective. So we wanted to ensure that whatever legislation this Parliament passed would be in sync with the Australian legislation and would be acceptable to the banking sector, because we are relying on it to make sure that it works.

In that process the select committee engaged extensively with the New Zealand banking sector. We had the help of four representatives from that sector. One of them was previously an adviser to the Hon Michael Cullen. She worked in his office as one of his major financial advisers and is a very experienced young woman. These representatives were extraordinarily helpful in helping us work through this legislation to make sure that the system, first, was in sync with Australia; and, second, was acceptable and practical for the banking system without creating enormous compliance costs, which is something we were very keen to avoid.

I have to say that it is unusual to work on legislation in this Parliament that everybody agrees is important and where there is very much an attitude of taking a bipartisan approach to it. Mr Hayes, who is the chairperson of the Foreign Affairs, Defence and Trade Committee, was extraordinarily helpful in taking on board advice from Opposition MPs. The Hon Pete Hodgson, who led the Labour team on this legislation, was amazing. He has an incredible ability to get straight down to the nitty-gritty. He also has an amazing ability to digest a vast amount of technical data. I guess it is his scientific training. He very much took the lead role at the select committee in working through how we can make this legislation effective, compliant with our international obligations, and acceptable to the banking sector. I take this opportunity to thank Mr Hayes for the work that he did in chairing the process. In particular I thank and praise my Labour colleague Pete Hodgson for making this bill better legislation as it comes before this House. I have great pleasure in saying that the Labour Opposition fully supports this legislation.

Hon PETE HODGSON (Labour—Dunedin North) : I am a little surprised that National members have stopped—

Hon Gerry Brownlee: Do your tie up.

Hon PETE HODGSON: I thank the Leader of the House very much. He should tuck in his shirt.

Hon Gerry Brownlee: Why? It’s fashionable.

Hon PETE HODGSON: The member cannot? OK. I was surprised that National members did not seek the call, but I was very happy to do so.

I want to make a point at the outset. Because we are going into urgency I am not going to give a 30-second speech, even though the case for my giving a 30-second speech is very strong. The Anti-Money Laundering and Countering Financing of Terrorism Bill is now in its last phase. It has been done and dusted through this House, through the various phases that legislation must go through, and it has been spoken about at length by people who know about the legislation, and also by one or two folks who do not. In the case of those who do, the listener would have had no difficulty working out what the legislation is about; what its origins were; how the Foreign Affairs, Defence and Trade Committee worked; what a great person the chair was; what a great group of folk the New Zealand Bankers’ Association was; how good the officials were after we had had a little disagreement earlier; and the role this legislation plays in our country and in our relationship with other nations. That does not need to be repeated. It is well understood now. Folk have generously talked about this legislation and its role for hours and hours, so a 30-second speech would be a really, really good idea. But, you see, we have to teach the Government to manage the House better. We do not particularly mind staying around on a Thursday night; half of us are here anyway. It does not much matter.

Hon Paula Bennett: It’s that arrogance that meant the public actually said no to Labour.

Hon PETE HODGSON: We have just been advised by the intellectual giant opposite that because Labour lost the last election, after spending 9 years in Government—the longest time a Labour Government has been in power since the Second World War, I say parenthetically—somehow or another I should be giving a 30-second speech, not a 10-minute one. That leap of logic—that cascading paroxysm of intelligence that just emanated from the vaguely humanoid piece of protoplasm over there—does not stand up to scrutiny. So I will stand here and make a point of wasting Parliament’s time. I will make a point of wasting Parliament’s time because the Hon Gerry Brownlee is in the House—it is good to see him—and we want to ask him to try to manage things a little better so that we do not find ourselves, as we did a few weeks ago, adjourning the House early one day and then whipping back in under urgency the following day. It is not necessary. There are certainly times when the House needs to go into urgency—

Jo Goodhew: Lazy Opposition!

Hon PETE HODGSON: Government members are really getting annoyed about it, and that is great, because that is the whole point of my speech. If Government members go silent, I have nothing to bounce off. The way to shut down someone who is trying to waste Parliament’s time is to go quiet. If members heckle then I immediately have something to feed off. They give me oxygen. So I ask National members to please keep the noise running; I love it. It is what makes it work for me. I have no difficulty getting through 10 minutes. In fact, I could get through 10 hours.

Jo Goodhew: We have to listen to 10 minutes even though he has nothing to say.

Hon PETE HODGSON: There is another heckler. The member is from Timaru. I spent last weekend in Timaru and I have one or two things to say about that member that I learnt on Saturday and Sunday from her constituents in Timaru.

Hon Trevor Mallard: I was there on Monday.

Hon PETE HODGSON: Trevor Mallard was there on Monday, so he has an update. I dare to suggest that if we tried to introduce that material into the debate Mr Deputy Speaker would say that it is getting a bit broad. I will not do so, because I might be ruled out of order. I just say to the member from Timaru that she would be well advised not to heckle, because, you see, another 30 seconds have gone by. Or was it 60 seconds? I am happy to stand here. I have studied Fidel Castro. It is not difficult to speak for 6 hours. I have watched a man do it. He is an amazing gentleman.

Hon Trevor Mallard: I’ve seen Venn Young do 75 minutes here.

Hon PETE HODGSON: That is amazing. It is astonishing.

I say to members opposite that we could have had this legislation through the House a long time ago and be well down the Order Paper but for the fact that the Government has decided again that it does not know how to run the House properly, and will put the House into urgency again.

I just say that urgency is a legitimate thing for a Government to do. We had a lot of urgency when we were in Government, and the previous National Government had it a lot, but we did it out of necessity or because there was some degree of urgency over this, that, or the other legislation. Here the Government is showing its inability to manage the House in ordinary times, not in extraordinary times. The Bolger-Shipley Government did not do that until the 8th year, but here National is doing so in the 10th or 11th month. I remember that in the 8th year of the Bolger-Shipley Government—and I will come back to my money-laundering point—Jenny Shipley said she was going to run the House with machine-like efficiency, but it stalled when Max Bradford tried to get the electricity system wrecked. The mismanagement is now reaching—

Hon Trevor Mallard: Tell us about the Plimsoll line!

Hon PETE HODGSON: No, that is outside the scope of the bill. The Deputy Speaker is very, very accommodating, and I do not think we should abuse his accommodation.

Hon Trevor Mallard: Yes, but the ship might be carrying laundered money.

Hon PETE HODGSON: Ah, that is a point. I am sure that some money-laundering occurs on the sea—I have no doubt. Some occurs by air and some occurs by wire, but certainly some occurs by sea.

Hon Trevor Mallard: It’s normally folding stuff.

Hon PETE HODGSON: That is right, and that is why the Plimsoll line is important. If it is folding stuff, the Plimsoll line is visible; if it is solid gold, the Plimsoll line disappears. That is one reason why a money-laundering cop would want to look at the Plimsoll line. If the ship is laden with gold, then the Plimsoll line will be out of sight; if it is folding money, as my colleague the Hon Trevor Mallard said, we will see the Plimsoll line high and mighty.

Hon Trevor Mallard: Paper can be pretty heavy.

Hon PETE HODGSON: Yes, but paper is not as heavy as gold. That is the point. The Hon Trevor Mallard makes a good point, but it is not good enough. Actually, when one thinks about it, a dollar’s worth of gold is heavier than a dollar. The Hon Trevor Mallard is probably correct when regarding a gold coin versus pure metal gold. I ask whether my time is finished.

Hon Trevor Mallard: 2 more minutes!

Hon PETE HODGSON: We are just reflecting on whether a gold coin being laundered on the sea will be more likely to make the Plimsoll line disappear. On reflection, given that the price of gold these days is a little over $1,000 per ounce—

Hon Gerry Brownlee: US!

Hon PETE HODGSON: —US$1,000 per ounce, the Hon Trevor Mallard is probably right and I am probably wrong. Gold in the form of pure metal is likely to be lighter, dollar for dollar, than a gold coin. On the other hand, if we move to folding money, I am correct. The devil is often in the detail.

Hon Trevor Mallard: Well, it depends on the denomination of the note.

Hon PETE HODGSON: OK, we could play that. We start at $5 and go up to around $100. Is there a $200 note? Can anyone tell me? I do not think there is. But at $5 or $100 I still think I am correct. On the other hand, if we are talking about $1 and $2 coins then my colleague—my learned colleague—

Hon Trevor Mallard: No, I’m not learned!

Hon PETE HODGSON: My non-learned colleague, the Hon Trevor Mallard—

Hon Trevor Mallard: Don’t go that far!

Hon PETE HODGSON: Ha, ha! If we are talking about $1 and $2 coins, he is probably correct.

I think we can conclude that when trying to detect money-laundering on the sea, the Plimsoll line is probably not as much use as we would have hoped. One does not know whether one is dealing with pure gold metal or with folding money. If it is folding, what is its denomination? Or is it $1 or $2 coins? The Plimsoll line will bounce up or down depending on all of those factors, and I imagine that the Plimsoll line would sit highest out of the water if the ship is carrying $100 notes.

Hon Gerry Brownlee: That’s the point.

Hon PETE HODGSON: I say to that member that I hope my point is now made.

TODD McCLAY (National—Rotorua) : It gives me pleasure to rise and speak on the Anti-Money Laundering and Countering Financing of Terrorism Bill. I think it is important that we move quickly to the vote on this important legislation. The previous speaker, Pete Hodgson, attempted to suck all the intelligence out of the debate in the Chamber, and I think he was largely successful. I recognise those who have worked hard to make this legislation the great bill we have before us: the submitters; the banks; our officials; Government members; our chair on the Foreign Affairs, Defence and Trade Committee, John Hayes; and, of course, our Minister of Justice, Simon Power. I make particular reference to Keith Locke. Without that member’s good work in the committee, we would not be here with this good legislation. When I look at my list, I see that that is it. No others need recognition, and I look forward to voting on this very soon.

DAVID GARRETT (ACT) : I rise on behalf of the ACT Party to support the Anti-Money Laundering and Countering Financing of Terrorism Bill. Having lived up in the Islands for some time, I realise and recognise what a problem there can be in various parts of the Pacific. We will be supporting this excellent bill.

JO GOODHEW (National—Rangitata) : As the last speaker in this debate on the Anti-Money Laundering and Countering Financing of Terrorism Bill, I think it is a really good idea that we end the debate by remembering what the key objectives of this bill actually are. They are to improve the detection and deterrence of money laundering and the financing of terrorism, to enhance New Zealand’s international reputation, to contribute to public confidence in the financial system, and to realise these objectives with minimum cost. Finally, we can remember what this bill is all about. I commend the bill to the House.

  • Bill read a third time.


Hon GERRY BROWNLEE (Leader of the House) : I move, That urgency be accorded the introduction and first reading of the Border (Customs, Excise, and Tariff) Processing Bill, and the Committee stages of the Sentencing (Offender Levy) Amendment Bill, the Criminal Investigations (Bodily Samples) Amendment Bill, the Domestic Violence (Enhancing Safety) Bill, and the Gangs and Organised Crime Bill.

The first bill mentioned today, the Border (Customs, Excise, and Tariff) Processing Bill, is designed to facilitate the SmartGate arrangements that New Zealand and Australia are cooperating on at the moment. It does not quite make travel between our two countries a domestic experience, but it makes it a very similar experience to domestic travel. The challenge, I guess, will be for airlines to ensure that bags are available on the carousel as quickly as people are able to progress through the gates.

The other bills, as I have mentioned, are at their Committee stage and are part of the Government’s 100-day programme. They are all designed to facilitate the activity of either detecting criminals or denying the opportunity for people to participate in criminal activity. We think that that is a sound reason to make the progress required during this next 2½ hours. It is reasonable for me to signal that the Government does not intend to resume urgency tomorrow morning. We expect to report progress a few minutes before 10 p.m. this evening.

SUE KEDGLEY (Green) : I raise a point of order, Mr Speaker. The Leader of the House did not give any reasons why urgency should be accorded to these bills, and I think it would be helpful if he—

Mr DEPUTY SPEAKER: No, I do not accept that. The Leader of the House did so, and I have accepted his explanation.

A party vote was called for on the question, That urgency be accorded.

Ayes 69 New Zealand National 58; ACT New Zealand 5; Māori Party 5; United Future 1.
Noes 52 New Zealand Labour 43; Green Party 8; Progressive 1.
Motion agreed to.

Border (Customs, Excise, and Tariff) Processing Bill

First Reading

Hon MAURICE WILLIAMSON (Minister of Customs) : I move, That the Border (Customs, Excise, and Tariff) Processing Bill be now read a first time. At the appropriate time I will move that the Border (Customs, Excise, and Tariff) Processing Bill be referred to the Government Administration Committee, that the committee report finally to the House on or before 16 November 2009, and that the committee have the authority to meet at any time that the House is sitting, except during oral questions, during any evening on a day in which there has been a sitting of the House, and on the Friday in a week where there has been a sitting of the House, despite Standing Orders 187, and 190(1)(b) and (c).

The bill is an omnibus bill, and it amends the Customs and Excise Act 1996 and the Tariff Act 1988. It makes consequential amendments to the Goods and Services Tax Act 1985, the Finance Act (No 2) 1993, and the Finance Act (No 2) 1995. The amendments contained in the bill make improvements in the processing and administration of goods and people required under those interrelated acts. The majority of amendments relate to border processing and administration by facilitating New Zealand’s international commitments or the use of new technology, while other amendments improve border processing or administration, generally. The bill contains three sets of amendments to improve the effectiveness of the Customs and Excise Act and to meet Government policy goals. These are amendments related to the automated passenger processing system, which is now known as SmartGate, six amendments to clarify and enhance the Act, and eight other amendments to address legislative gaps and uncertainties.

In today’s international travelling environment we are faced with threats to our personal security. Those of us who travel internationally are well aware of the various security measures that we must now comply with, whether it is to protect New Zealand’s biosecurity, aviation security, or immigration laws, or whether it is to protect the New Zealand community from, for example, firearms and offensive weapons, and controlled drugs. Those obligations on the travelling public have resulted in longer waiting and processing times at airports. To counter that, this Government has announced that low-risk Australian and New Zealand passport holders will enjoy a faster, more streamlined exit through border processing at Auckland, Wellington, and Christchurch airports. As part of that, automated processing through the SmartGate system will become an option for travellers who hold either an Australian or a New Zealand e-passport—that is, an electronic passport; the old technology ones will not work.

In reviewing the Customs and Excise Act to take account of SmartGate, customs officials have identified potential amendments relating to passenger interaction with the clearance process. These amendments are relatively minor. The focus of the amendments is to ensure that automated systems can be used in place of customs officers. The effect of these amendments is to allow the use of automated processing systems at the border, which is something that will benefit the travelling public and contribute to the Government’s objectives to improve the border crossing experience for trans-Tasman travellers. SmartGate will enhance the role of customs officers at the border, as front-line customs officers will be able to be redeployed to the secondary line, where intervention with high-risk passengers occurs. I emphasise that SmartGate cannot and will not be a substitute for the observation skills and the vigilance employed by trained customs officers working at the border.

Six amendments are included in the bill to clarify and enhance the Act, especially in relation to strengthening customs law enforcement capability. The amendments are, firstly, to enable customs officers to search a vehicle, whether it is being operated or is unattended, and to give them the ability to use reasonable force to gain entry to effect the search of the vehicle; secondly, to create a power to arrest any person committing an offence punishable by imprisonment under the Act, whether or not that person is on a craft; thirdly, to provide that duty on goods manufactured other than in the manufacturing area becomes due immediately upon the manufacture of the goods; fourthly, to create a new offence of making a false allegation or report to the Customs Service that an offence has been committed, knowing that the statements are not true, or making statements with the intention of wasting or diverting personnel or resources; fifthly, to enable customs officers to utilise future technology in those provisions that relate to the detection of tampering or interference with goods, containers, or packages; and, sixthly, to provide the Customs Service with the ability to require payment of debts within the 20-day time period where it receives advance warning that the company has a dubious financial situation and that payments by the due date will be unlikely.

The bill also includes eight minor amendments to the Act aimed at addressing legislative gaps and uncertainties, including amendments to clarify the provisions in the Act relating to authorised persons, to allow for the revocation of a customs export delivery order in certain circumstances, to allow material usually set out in the schedules of the customs and excise regulations to be incorporated by reference, to relocate the alcohol personal use exemptions from the Customs and Excise Regulations 1996 to the Act, to allow the chief executive to nominate non - customs officer employees to lay information, to allow for the suspension of a registered users’ registration, to clarify that the chief executive can grant further time for lodgement of an entry of goods for exporting in appropriate cases, and to allow for the imposition of administrative penalties for entries containing an error or omission. As I said, there are eight amendments, but they are all reasonably minor, and they tidy up some things in the Act that needed some clarification.

The bill contains amendments to the Tariff Act 1988, primarily to allow for faster and more efficient implementation of tariff reductions arising from our trade agreements by, firstly, allowing material usually set out in tariff amendment orders to be incorporated by reference, and, secondly, by making the working tariff document maintained by the New Zealand Customs Service the legal tariff.

Following amendments to the Tariff Act, schedule 3 of the Customs and Excise Act is replaced by an excise and excise-equivalent duties table, available on the Internet and in hard copy. The bill also enacts a previous decision of Cabinet to raise fuel excise duty by 3c a litre, effective on 1 October 2010. I commend the Border (Customs, Excise, and Tariff) Processing Bill to the House.

Hon CHRIS CARTER (Labour—Te Atatū) : I rise to speak on behalf of the Labour Party, and to say that we will be supporting the Border (Customs, Excise, and Tariff) Processing Bill to go to a select committee. We hope that through that process we will see some smoothing out of some of the issues that members of our party sitting on the select committee will undoubtedly focus on.

As the Minister of Customs, Maurice Williamson, has just said, this bill amends the Customs and Excise Act of 1996 and the Tariff Act of 1988. It allows, as Mr Williamson has just said, the introduction of an automatic passenger processing system, the so-called SmartGate, and ensures that automatic systems can be used in place of customs officers. On the one hand, I guess that the challenge of the Customs Service is, particularly as New Zealand is a leading agricultural nation that is largely pest-free, to keep our borders safe from certain agricultural diseases. Foot-and-mouth disease comes immediately to mind, but a whole host of other nasty things like fruit fly, and so on, could impact on our horticultural, beef, and dairy industries. So customs is there to keep the borders safe. It is also there, as Mr Gerry Brownlee mentioned, when he said we want something—

Hon Clayton Cosgrove: He’s not a fruit fly.

Hon CHRIS CARTER: No, he is not a pest, and I tell Mr Cosgrove he is far too large to be a fruit fly. He talked about the need for our luggage to come through quickly. I think we all had an image of Gerry standing by the turnstile as the bags came through. But in a sort of facetious way he is right. With our growing tourism industry, we want the Customs Service to have processes and technology that make landing at and departing from an airport a positive experience. SmartGate will come in, and technology will replace customs officers, who will then be in the second line of defence.

Hon Trevor Mallard: Doesn’t this member have an interest in this bill?

Hon CHRIS CARTER: I am pleased that a former Minister of Education has complimented me on the sterling work I did in promoting New Zealand as a destination for international students. I thank Mr Mallard; I was very pleased to do that and proud to be a representative of our country.

One of the things I was always impressed with when I landed at Auckland Airport, especially our international terminal, was the efficiency and friendliness of our customs officers. Now they will be replaced in the front line by this SmartGate technology and we will see the processing, hopefully, as an efficient, fast service that is also safe. The bill also creates new opportunities to deal with new offences, to amend existing legislation to make it up to date and modern, and to deal with issues as they come up in the policing of the Customs Service.

However, we are concerned about some issues around biosecurity. Although we applaud the move to improve technology to make a more effective and efficient Customs Service, we note that one of the first decisions of the new National-ACT Government was to make 50 workers redundant in our Customs Service. It seems a strange paradox and contradiction that on the one hand we are getting lectured about the importance of keeping New Zealand safe, and on the other hand 50 workers are being laid off from the Customs Service. Also, the Labour Opposition feels that the National Government took a rather token approach to consultation, particularly around these redundancies in the Customs Service. The cuts were very arbitrary. I guess they were very similar to the cuts that have taken place in education—not just in adult and community education but in the wider education sector. You know, I can remember as Minister of Education before the election going around the hustings and hearing from National candidates that we would not see any redundancies in front-line services, we would see no civil servants laid off, and we would just see a sinking lid on retirements and people leaving. In the Customs Service 50 have just been laid off, and they are the tip of the iceberg of the many redundancies that are taking place within the civil service. We are not talking about policy analysts or those back in the depths of the main offices of the Customs Service; these are front-line officers trying to keep New Zealand safe, keeping out those horrible agricultural diseases and other things that can come in, stopping people smuggling, and doing all of the other fine jobs that customs officers do. Last year New Zealand’s biosecurity staff dealt with 86 incursions of unwanted pests and organisms. Now fewer staff will be charged with protecting our borders.

Hon Trevor Mallard: What did Gilb say when he was trying to use the word “organisms”?

Hon CHRIS CARTER: I am not going to go there, I say to Mr Mallard. He might be more familiar with that than I am.

Last week I was in Samoa with my colleague Luamanuvao Winnie Laban visiting the tsunami-ravaged villages. We, of course, went to every village. We were there for 4 days and we provided real support to the people. I met a customs officer while I was there—I will not name her—and she said that they had done a sample test of containers coming in because they had been instructed that under this new regime of ours they would look at fewer containers. Indeed, at the port of Tauranga I understand that they are looking at hardly any. Looking at these containers, they did a sample to see how many coming in from Australia had agricultural pests in. Something like 40 percent contained unwarranted organisms—an astonishing number. That was just a sample. That is an indication of the practical consequences of reducing front-line staff. Sure, SmartGate might be great, but if our containers are not being looked in, if agricultural pests are coming in that are not being picked up, then New Zealand—not just our agricultural sector but the whole of our country—will be the poorer for it.

Opening up borders means that we should be increasing surveillance at the borders; we should not be reducing it. One of the things that Mr Key said on Q+A, I think the week before last, was that $3.57 million was being removed from the budget of border control. Again, it comes back to the question of border security. Nothing is more important than the protection of our agricultural industries. In the 5 years that I spent as Minister of Conservation I knew that one of the issues that Department of Conservation staff constantly dealt with was the impact on our natural environment of alien pests. I can remember, for example, fire ants coming in from Australia. Two colonies were discovered, one in Auckland and the other in Napier, and both of these colonies had successfully established themselves. They were eradicated by Department of Conservation staff but they were, nevertheless, examples of some of the organisms that can come in.

It is not just terrestrial organisms that can be a problem. We have already had issues of marine pests coming into our ports; Undaria is an extremely invasive seaweed that has entered some of the harbours in the southern part of the South Island. It is a considerable pest in North America. It is an endemic species from east Asia. That pest will be just the tip of the iceberg with increased shipping and the increased number of containers being brought to New Zealand. We will face the problem both of insect and plant pests and also of marine organisms being brought in and not being dealt with appropriately.

To sum up, we are in favour of this legislation. We think it should go to select committee. We are not in favour of cuts to front-line services in the Customs Service. We see the Customs Service as the front-line defence of our country. We want effective and efficient systems at our ports and airports so that the tourists can be facilitated through with ease, but also with safety. Primarily the issue is not just about making it easier to get in and out of New Zealand and making it a pleasant experience; it is about first and foremost making our country a safe place. Technology can help, but reducing the number of customs officers certainly does not help.

Hon GERRY BROWNLEE (Minister for Economic Development) : I think there are only two questions that the previous speaker, Chris Carter, has to answer. The first is whether it is true that his is the face of the new captain on the Flight Centre ads, given his extraordinary experience of travelling around the world. Or is he perhaps going to retire to a Holiday Shoppe franchise once he leaves Bowen House? Everyone knows what a huge traveller this particular man is. And can he confirm that he has actually written to the Minister responsible for this bill, asking whether he can have Fly Buys points for the amount of times he uses SmartGate as he travels around the country? The only thing he has going for him is that these days as we travel internationally, increasingly airlines are looking at gross weight per passenger. In his case, he can take huge Samsonite baggage; in my case, of course, I get a brown paper bag with two handkerchiefs inside it. So he is somewhat at an advantage in speaking on this bill, because he knows so much about travelling and the experience of going through various countries’ borders. But we can assure him that his support of this bill will mean that the experience is a lot better when it comes to crossing the Tasman in the future.

I will just pick up on the issue of biosecurity, which the member Chris Carter quite rightly highlighted as being a major concern for this country. But I point out that all of the incursions he just spoke of occurred during the term of the last Labour Government. I mention that not to point a finger but simply to say how difficult this particular issue is, and to put on record the case for the National-led Government continuing to do whatever is necessary to ensure that New Zealand has as strong and as well-protected borders as are possible. I look forward to supporting this bill later in the proceedings.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : That was an invaluable contribution from the Leader of the House. I recall that he is the only man whose best friend is David Henderson. In the Press, Gerry Brownlee was described by somebody, not by Dave Henderson, as the third most powerful man in New Zealand, and then his best mate, Dave Henderson, in the same article, said that he was “a nice guy, but a complete waste of time.” No, no, I am wrong. “Completely useless” was the quote.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I take great offence at that, and particularly at the claim that that particular gentleman is my close best friend. Everyone knows that one of my best friends is “Leonard the Refrigerator”.

Mr DEPUTY SPEAKER: I will not accept that.

Hon CLAYTON COSGROVE: I take no offence. His other best friend is Ronald McDonald.

Mr DEPUTY SPEAKER: I ask the Hon Clayton Cosgrove to continue.

Hon CLAYTON COSGROVE: That is Gerry Brownlee, who will probably be the only person who will never be admitted through the SmartGate, given the wonderful management he exhibits in this House. I cannot recall which colleague it was who said at the start of this parliamentary term that Gerry Brownlee will go down in history as the person who lost the confidence of his own side as Leader of the House the fastest, due to his great management. We are debating the Border (Customs, Excise, and Tariff) Processing Bill under urgency because Gerry Brownlee could not get the accident compensation papers sorted in time. He is one gentleman who I do not think will ever be admitted through the SmartGate. There may be a different gate for him—one where three, four, five, or six customs officers may be employed to frisk him because it probably would take half a dozen of them to do so.

Let us get back to the substance of the bill. Labour supports the bill. I have used SmartGate a couple of times. I asked Maurice Williamson whether they are in every state in Australia. I have been through the SmartGate in Victoria a number of times recently. It is a very, very good system. I do not think anybody would argue with the use of technology in this area. This is a solid bill that does a number of very, very good things.

I want to reiterate some of the very substantial concerns that were raised by Mr Chris Carter regarding biosecurity. In the same week that we are debating this bill, the Government has announced its huge crusade against P, which Labour supports apart from a number of penetrating questions we have about the resources to back up the rhetoric and the commitment. Everybody believes we should get that scourge off the street, and Labour supports the Government in that move. But in the same week as we are debating this bill about customs, the Government has launched its crusade against P. When we drill into the detail, we ask how the measures contained in this bill will be resourced, and, therefore, how will those measures contained on the war against P involving customs be resourced? We know that as the Customs Service is being asked to step up to the plate and commit to the war on P by further securing our border, and as it is being asked to step up to the plate with the new provisions in this bill, in respect of the functions of customs officers, and at the same time as we are asking more of our Customs Service, as my colleague said, 50 front-line staff in the biosecurity area have gone. They have been axed; they are out.

David Shearer: 56.

Hon CLAYTON COSGROVE: My colleague says it is 56, and I thank him. It is over $3 million in cuts that the Government calls savings. Judith Collins calls $21 million of cuts savings, except the Canterbury district commander disagrees with her. There has been over $3 million worth of cuts to the Customs Service. It will be under-resourced. We now know that it will be flicked around to set up some sort of flying squad in respect of P, and there will not be extra resources for customs.

Paul Holmes did a very good thing on Q+A when he questioned Mr Key about the $3 million cuts to the service. Mr Key slipped right past it and said he did not want to get that confused with the money being put into rehabilitation. I say that it is good to put money into rehabilitation, but he never addressed the inherent cuts financially and in terms of personnel. I invite members opposite to have a look at a tape of Q+A. Mr Key never addressed that issue. Although Labour supports this bill, we think there are some real worries in respect of the implementation of what will be an Act of Parliament. Over $3 million has been cut out of the Customs Service budget and over 50 biosecurity officers are gone.

We have heard a lot from Government members over the last 9 or so months. We have heard this great line about moving resources from the back office to the front office. In this case, the Government has removed resources from the front office to the exit lounge. The Government has taken resources off the front line of the Customs Service and taken them out the door. I am sure the Minister of Customs might get up and say “Hang on”, as Judith Collins always does about the police when we front her like we do other Ministers and ask “Will Ministers take responsibility if there is a degradation in service or a delay in service because of the Government’s demand to cut money out of budgets?”. Maybe the Minister will break the mould and get up and say that he will take responsibility if there is a degradation of service, an incursion of a pest, an incursion of foot-and-mouth disease, or an incursion of something terminal to our economy.

In biosecurity terms, we know that the way to crash our economy, given our reliance on primary production, would be, tragically, the introduction of some sort of terminal disease like foot-and-mouth disease or some other disease. Maybe Maurice Williamson will get up, put up his hand, take the pledge, and say that he will take responsibility for the 50 biosecurity officers who have gone and the $3 million cut out of the budget. At the same time, he is asking the Customs Service to step up to the plate in respect of this legislation. At the same time, the Prime Minister is asking the Customs Service to do more with less.

Mr Williamson would be the first Minister to say that it is not an operational matter if this turns to custard or if there is an incursion, because he will stand up as Minister and say “I will take responsibility.”—unlike his colleague Judith Collins, who was asked the same question at the police estimates hearing. Did she take responsibility for the $21 million cut, for the degradation in service, and for the risks associated with that? What was her reply? She said “Oh, that’s an operational matter.”, as every other Minister does. But I say that that loyal member of the executive Maurice Williamson may well break the mould of this Government and say he will take responsibility if the cuts that he and his Government have imposed, in terms of front-line, front office staff and dollars out of the budget, create an incursion or worse in this country.

Although Labour supports the bill, it is a bit like the P debate, which Labour also supports. Who would not support the war on P? Despite some silly comments from Judith Collins and others that we do not support it, we do. But we were the first political party, as we are today with this bill, to raise questions about the gap between the rhetoric in terms of how these measures will be implemented, given they are asking departments to do more with fewer resources.

Colin King is a member who represents a farming electorate. I am told that he is not a bad MP from time to time, when he is there. He is a farmer and he will know the devastating effect on his farm and his constituents’ farms in rural areas if we had a biosecurity incursion. Colin King may want to take a call, and tell us whether he will take responsibility for his Kaikōura constituents and go to his farming folk and explain to them why it is that there has been an incursion—God forbid. It is because he and his Government cut the Customs Service budget and got rid of 56 biosecurity officers. There is a gap. [Interruption] I heard a deflation of air from Mr Hayes. It was a bit like somebody had popped a large balloon, a hot air balloon.


Hon CLAYTON COSGROVE: It is all right. I do not need protection from the “Michelin Man” over there. But maybe that member who comes from a rural constituency, the Wairarapa, as he deflates—there might be an oxygen bottle out the back somewhere—will go and talk to his constituents and take responsibility. Those members do not treat this as a serious issue. Well, we will see. Will he go and tell his constituents why he and his Government cut the front-line biosecurity staff down by 50? I do not think he will. Those staff go to the border and guard the border—that is what they do. They secure the border from a number of pests and diseases, some of which Mr Hayes may be personally interested in and have great knowledge of. Perhaps there are some sitting behind him.

I support the bill. I think the SmartGate technology is fantastic. I think it will be more efficient between the borders, but I invite Government members to stand up and take responsibility for the cuts in the Customs Service.

KEVIN HAGUE (Green) : I would like to say that it is a pleasure to take a call on the Border (Customs, Excise, and Tariff) Processing Bill, but I have to say that it is not. The Green Party was not advised that this bill would be coming up, and it is one that we have not seen before. I had my first look at it approximately 5 minutes ago. That is not a good enough process; it is an affront to democracy. It is a process used by this Government because it wishes to avoid debate and scrutiny of the bill at its first reading. I believe that is shameful, and for this reason the Green Party will be voting against the bill. We will vote against it purely in protest against the process that has been used. We have not had the opportunity to scan the bill’s content and determine whether the content is worth supporting.

In the few minutes that I have had, when moving between my office and this House, in which to scan the bill—and that is all I have been able to do—it seems to me to be a bill that, like a number of Government bills, does several things. Most of its content is unobjectionable. It closes loopholes. It deals with inadvertent consequences of previous legislation and processes, and actually takes us further. But it also introduces the machinery of Government that is required for the SmartGate system. I want to spend just a few minutes commenting on that particular point.

John Key, as our Prime Minister, has made a big deal over the 8-minute saving in travel times for people travelling across the Tasman, and has justified the SmartGate system on that basis. But the point I make is that the SmartGate system, as it applies to customs and to biosecurity, involves a greater risk to this country. Controlling our border and guarding it against various types of risk—and virtually everything that takes place under that umbrella of customs and biosecurity is about guarding the border—is one of the most fundamental functions of any Government. In fact, probably even those neocon philosophers that Steven Joyce no doubt reads at night—they would certainly put me to sleep—like Robert Nozick, would say that protecting the border, border security, is one of the fundamental functions of Government. Yet what the Government proposes is a new approach to customs and to biosecurity that does away with the universal approach that we have adopted up to this point, and substitutes an approach based on risk profiling. In risk profiling we say that we will not actually use our full process with all of the people coming through our border. We will say, on the basis of what we know so far, that we think this type of person is more likely to pose a risk, and we will concentrate our resources on screening that person for customs or biosecurity risks. We will use a lesser process for those people who do not fit our profile.

If I were a smuggler, the first thing I would do is try to choose as my mule someone who did not fit the profile. Certainly the evidence we have seen from the trial that the Ministry of Agriculture and Forestry has undertaken in relation to risk profiling suggests that those who fit its category of low risk in fact, nonetheless, constitute some risk. If we focus our resources only on those people who meet our profiles, as the Government intends to do under this bill, with its SmartGate system, and through its biosecurity measures, then we will increase our risk associated with customs breaches and biosecurity breaches. We are not a nation that can afford to take those risks.

This afternoon in question time I questioned the Government about some biosecurity risks we were taking around our totally unnecessary importation of palm kernel—the importation of a product from a country where foot-and-mouth disease is endemic. Malaysia has outbreaks of foot-and-mouth disease virtually every year. Palm kernel is a product that we import from Malaysia, and we have it on reliable information that it comes to our shores contaminated by soil. Reliable information from Governments around the world—not including ours, incidentally, because we have not done any review of foot-and-mouth disease risk since 2002—identifies soil, in which the virus can survive for many days, as a vector for foot-and-mouth disease. In other words, the disease is present at the product’s source and it is present in a vector that is a regular contaminant of a product that we import. We inspect shipments of palm kernel only visually, which is a technique that cannot possibly detect micro-organisms. Our only method for controlling biosecurity risks in those shipments is fumigation at source with phosphine. We learnt that quite a number of our shipments somehow miss out on that process, and that of the 312 shipments received, some 38, which were supposedly fumigated at source, none the less arrived in New Zealand with insects, and, on one occasion, with a gecko.

We know that the biosecurity precautions that we do take around palm kernel are pathetic for controlling even the pests that they are designed to deal with, let alone the massive threat to our primary industries and, indeed, to our clean, green “100% Pure New Zealand” brand with which we market ourselves for tourism, and trade on in all of our primary industries. The threat to that brand is massive. Our Government’s response is to say: “Well, you know, we can’t be 100 percent sure about anything, so rather than taking this risk seriously, we are just going to keep the blinkers on and keep pretending that we can get away with this, and hope and pray.” That is the approach that the Government is intending to take more broadly now, not only on the issue of palm kernel but also on biosecurity threats from those products imported to New Zealand.

Last year approximately 386,850 shipping containers that came into New Zealand received no biosecurity inspection at all. This Government’s response to that situation is not to take it seriously. Instead, it cut the funding to those departments, it cut the staffing in these departments, and introduced new systems that mean fewer people coming through our borders will be subjected to any kind of risk assessment or any kind of scrutiny. It is not good enough, even for that reason alone, let alone taking into account the fundamentally poor process that has been used in this case. The Green Party will oppose this bill at its first reading.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Assistant Speaker. Kia ora anō tātou katoa. As other speakers have stated a little earlier, it is always a bit of a challenge with new legislation like this Border (Customs, Excise, and Tariff) Processing Bill, which comes at us a little bit late in the piece and is perhaps not even up on the parliamentary website, to give a really informed perspective on the legislation. Under normal circumstances, the Māori Party caucus usually gets enough time to read over the legislation in depth, to consult with all sorts of interested stakeholders, to consider how kaupapa Māori applies, and to benefit from a robust debate. It does not quite happen like that when legislation is introduced under urgency and the whole process becomes accelerated to such an extent that one hardly has enough time to get to grips with the original intent of the legislation, much less with amendments such as these being tabled today.

In the bill before the House we are considering amendments to the Customs and Excise Act 1996 and the Tariff Act 1988—both bills concerned with New Zealand’s border. Now, of course, all New Zealanders are very familiar with the work at the front line in protecting our country, partly through, I think, the reality shows such as Border Patrol, which feature on our State television. And there could be no doubt in the House this week of the power of television in being able to educate, inform, advise, and broadcast rugby all at the same time. The behind-the-scenes documentaries expose viewers to the procedures that operate within the areas of immigration, customs, and quarantine. Week by week there are examples made of the potential issues that can arise at our borders, including illegal immigrants, harmful pests and disease, drug runners, and such. So we understand the importance of improving border processing and administration of goods and people, as required under the respective Acts.

But there is a particular feature of this legislation that I feel a little bit duty-bound to highlight and that is the deliberate use of strategic branding to draw attention to issues such as corruption, dishonesty, and misrepresentation. This bill enters a whole new terminology into the lexicon of the English language—namely, that of SmartGate. SmartGate, as a brand, takes its name, of course, from the Watergate scandal in American politics. Named for the Watergate office complex in Washington, DC, it resulted in the indictment and conviction of several officials in the Richard Nixon administration. Watergate has since then become associated with conspiracy theories, secret tape-recordings, Senate investigations, cover-ups, and so on. Across the seas we have seen the emergence of derivations of the Watergate theme: there was “corngate” in 2002 involving the suspected release of genetically modified corn seeds. We have had “paintergate”, which involved a forged signature on a landscape painting. We have had “speedgate”, and so on. Now we have SmartGate. So it is a clever use of branding to immediately bring up an association with crimes involving dishonesty.

As other speakers have said, SmartGate in this case is the name given to a new automated passenger processing system to be used at the border, in the place of customs officers. We will, of course, be interested at the select committee to hear from the Customs Officers Association how customs officers feel about being replaced by these SmartGates and what the costs in real terms will be of the redundancies that might result. The legislation allows for the cancellation of a registered user’s registration to use a Customs Service computerised entry processing system. That is to cover for human error; if the person fails to comply with registration conditions or has been convicted of a crime involving dishonesty, then he or she will not be able to enter the computer system. And that sounds pretty good.

Once the SmartGate has been shut closed, this bill introduces a whole range of measures to deal with would-be offenders. The bill creates a power to arrest any person committing an offence punishable by imprisonment under the Act. It establishes a new offence of consciously making a false allegation or report to the Customs Service that an offence has been committed. Through that same clause it becomes an offence to knowingly make statements with the intention of wasting or diverting personnel or resources. So this legislation basically introduces technologies and protocols to strengthen Customs Service law enforcement capability. It will enable customs officers to search a vehicle, to inspect goods containers or packages, and even to introduce a provision that will require debts to be repaid within 20 days. The other aspect of this legislation is to introduce tariff rate reductions negotiated in international trade agreements, and to provide the means by which information on those rate reductions will be available free of charge on the Internet. Those are some innovations that we have some interest in.

The Māori Party is proud to stand up in the House to speak out against issues of corruption, dishonesty, fraud, cover-ups, conspiracies, and any such factors that act in ways to diminish the integrity of the Customs Service and the border control system. We will be supporting this bill at its first reading to allow the kōrero to occur, and we look forward to the opportunity for a more extended period of discussion at subsequent stages of this legislation.

JACQUI DEAN (National—Waitaki) : Thank you, Mr Assistant Speaker, for the opportunity to speak in the first reading of the Border (Customs, Excise, and Tariff) Processing Bill. I am excited to speak about the bill because of the announcement made in August by our Prime Minister John Key and the Australian Prime Minister Kevin Rudd that both New Zealand and Australia will install SmartGate to make it simpler and more efficient to cross the Tasman. The intention of the announcement in August by the two Prime Ministers was to help streamline trans-Tasman travel. It is not travel that I am particularly excited about, but rather the opportunity for New Zealand to further enhance and exploit its opportunities with our major trading nation, Australia. Now, that has to be a good thing.

We have not only an important and growing trade in passenger travel between Australia and New Zealand, but also a very important trade in goods and services. Anything we can do at our borders to facilitate that trade has got to be a good thing, not only for Australia but for New Zealand. I care less about Australia; I care more about New Zealand. I care a lot about the fact that Australians will now find it easier to travel to New Zealand and back home again, just as I think it important that those of us with friends, family, and business across the Tasman will find it easier to travel there, too.

But more important than the economic impact of those closer ties with Australia, is the opportunity—and it is an opportunity—to tidy up and strengthen New Zealand Customs Service biosecurity measures at the border. It is worth reflecting on the opportunities that those new technologies, through SmartGate, offer to New Zealand. That automated passenger clearance system uses biometric technology. Now, that is a step forward. It is being used in Australia. It will be used, over time, in New Zealand. That offers us a great deal of comfort in terms of biosecurity threats to New Zealand. For example, members might think about bananas coming across our border. Although a painted apple moth might come in via a container, the biggest biosecurity threat is from fruit, such as apples and bananas, being brought in by passengers. Let us consider what can be developed in the future. With the scanning of bags happening in Australia, we will be getting information from passengers as they depart the Australian borders. One might argue that Australians will not care that there might be a banana or a piece of fruit in some passengers’ bags when they leave Australia, and one would probably be quite correct in that, but we do care. It would be nice to think that, over time, New Zealand also will be able to develop technologies so that that piece of fruit in somebody’s bag that has been forgotten about can be detected as that passenger is travelling to New Zealand. That has to be a benefit to New Zealanders.

Far from the Chicken Little rhetoric that we have been treated to from various parts of the House that the legislation is awful and that biosecurity threats will endanger New Zealand’s economy, I think the introduction of these new technologies and the passage of the bill will result in quite the opposite. We will see benefits to the New Zealand economy in terms of enhanced biosecurity measures, which are underpinned by some of the measures in this bill. This omnibus bill amends the Customs and Excise Act 1996 and the Tariff Act 1988. It makes consequential amendments to the Goods and Services Tax Act, the Finance Act (No 2) 1993, and the Finance Act (No 2) 1995.

In my brief first reading speech I say that I am looking forward to this bill coming to the Government Administration Committee. I know that we will get a number of submissions on it. I look forward to having some good, level-headed discussion on the opportunities that the measures in this bill bring to increase the ability of the New Zealand Customs Service to tighten up and protect our borders from biosecurity breaches. With those few words, I commend this bill’s referral to the select committee, and I look forward to its further consideration. Thank you.

DAVID SHEARER (Labour—Mt Albert) : I rise to speak to the Border (Customs, Excise, and Tariff) Processing Bill and to support its referral to a select committee. This bill amends the Customs and Excise Act 1996 and the Tariff Act 1988. In general, these amendments are very welcome. The border security of New Zealand is of the utmost importance, particularly the biosecurity. I remember not so long ago, when we had the painted apple moth in the Auckland region, how many millions of dollars it cost to do the aerial spraying needed to eradicate that pest. We have yet to read through this bill a little more carefully, but these amendments will probably bolster New Zealand’s ability to protect its biosecurity. A lot of that ability will depend on our cooperation with our neighbours in Australia, and on the intelligence that we share between the two countries. Ensuring that that sharing happens more carefully will also be of great value to the protection measures that we want to introduce.

I will touch on a number of the key aspects of this bill. For example, the SmartGate procedures, which have already been touched upon by other speakers, will enable passengers travelling from Australia, in particular, to pass through passport control through a mechanised electronic process, rather than having to rely on customs officials to process them. That will happen through a microchip in passengers’ passports that will bring up a photograph that will be able to be measured. Not only will this determine whether a person is the legitimate holder of that passport, but also it will screen people and it will scan for people who could possibly be terrorists. The process uses the touch-sensitive technology that we are very familiar with when we travel domestically. It will help to speed up the process and it will bring much closer together the everyday activities of New Zealand and Australian businesses and tourism relationships. It is said to be targeted at those low-risk people who do not pose a problem but who are often frequent travellers between the two sides of the Tasman. SmartGate will enable us to ensure that we are not a soft touch for terrorism and terrorist activities coming into New Zealand. It has a $38 million price tag, which is justified in terms of what it is able to do in terms of saving and protecting our biosecurity and our economic and physical interests.

Another part of this bill gives customs officers the ability to search vehicles. It has been unclear until now whether those powers are currently there or whether the police have to be engaged. This amendment closes another loophole. It enables our customs officers to be more effective and, used in conjunction with the police, it will enable our biosecurity interests to be protected, particularly against breaches of a criminal nature. We talked earlier about needing to protect New Zealand borders from the P aspect, as well. This bill also gives customs officials the power to make an arrest of people whom they suspect are violating New Zealand’s biosecurity and security aspects while those people are not on a craft or a vehicle. Therefore, it closes another loophole that has enabled some looseness in the legislation governing customs officials, what they are able to do, and what tasks they can carry out.

The bill introduces the new offence of making a false declaration. Again, this appears to be a sensible amendment, as it certainly stops the waste of customs officials’ time. It also perhaps prevents issues around commercial competitors that dob in their competitors and create an unfair advantage. This measure also obviously stops customs officials, who might be best utilised dealing with real issues and legitimate allegations, from being distracted by that activity.

Another part, which I will touch on very quickly, intends, through the use of better technology, to iron out the issues around being able to look at the possible tampering of containers—that is, to check whether containers that have come from safe and secure areas have been tampered with or possibly opened. That technology will enable customs officers to see whether those containers have been opened and whether something illicit has been introduced to them. That is all very good, and I think that we will be supporting the amendments in those areas once we can take a closer look at the bill in the select committee.

The bill also enacts a previous Cabinet decision to raise the fuel excise duty by 3c a litre. This is a direct replacement of the Auckland regional fuel tax.

Grant Robertson: It was scrapped, wasn’t it?

DAVID SHEARER: The Auckland regional fuel tax was scrapped. That tax made a lot of sense to Aucklanders, because it basically meant that as of 1 July this year Aucklanders were giving 2c a litre to enable there to be security in the planning of Auckland’s transport network. That is something that Aucklanders now cannot do, as that tax has been replaced by a tax that is put into a consolidated fund. Aucklanders are not able to see where that money is going. We went from a tax that had significant buy-in across the Auckland region—because Aucklanders could see that if they gave 2c over here, then they would see 2c of benefit on the other side—to an amorphous tax that goes into a consolidated fund, the wisdom of which we have real questions about with regard to the way it is being used.

What did that regional fuel tax enable us to do? It enabled Auckland to plan effectively for its transport needs. What sorts of needs? The very needs that are in a great deal of doubt right now. For example, there is the electrification of the Auckland train system, which Minister Steven Joyce says is possible by 2013, but which nobody really believes is possible. The loop of the rail is to go under Queen Street and Karangahape Road and will connect back in Mount Eden. What does that do? It will quadruple the amount of traffic that those trains will be able to take underneath the central Auckland area. It will enable real economic growth to take place. These are not things that just the Labour Party is backing; every mayoral aspirant, from the left or from the right, who has put forward his or her name so far—whether it be Len Brown, Mr Banks, or even Mike Lee—is arguing that this is exactly what Auckland needs.

What about the rail link between the city and the airport that every other city in the world has? We do not have one, and we have nothing like that on the horizon. But the regional fuel tax would have enabled us to plan for a First World city link connecting the airport to Auckland. It had massive economic benefit, but it was scrapped. Instead, a $2.3 billion holiday highway is being proposed as the first on the list of significant roading networks. It carries the same amount of traffic as Sandringham Road does. Can members opposite understand that? Sandringham Road carries the same amount of traffic as what we are seeing from Pūhoi to Wellsford. Why are we putting that road in? I cannot understand why, unless one happens to have a holiday home up in the north and live in the suburb of Albany. Thank you.

JOHN HAYES (National—Wairarapa) : That was a particularly measured speech that reminded me of the radio programme Repetition, or is that simply a Scrabble word. We heard quite a lot from that member and his colleagues that was quite irrelevant, and myopic in its focus, though certainly not as prehistoric as the position of the Green Party, which will vote against the first reading of this legislation because Mr Hague did not have sufficient time between receiving the bill in its written form and walking here to the House to read it. More nonsense I have not heard.

I think it is very important that we lift our eyes to the horizon. This Government, led by the aspirational John Key, was elected to Parliament by the people of this country because the Prime Minister aspires to take this country forward. He wants to lift productivity and he wants to bring our wealth generation up to the same level of the Australians. The Border (Customs, Excise, and Tariff) Processing Bill, modifying our customs and tariffs processing, is so important, because it will allow economic activity to take place at a far greater rate than has been possible under the current legislation. We are chasing efficiency. All of us have to adopt a New Zealand Inc approach and drive much harder for more efficient arrangements.

I listened to the comments from my colleague in the Māori Party about Watergate, “Helen-gate”, “paintergate”, and various other “gates”, but SmartGate is about improving access to the Australian market for people and for goods and services, and the reverse for Australian products coming here. If we can improve efficiency, we can drop the cost of compliance and improve efficiency of economic activity. The better we can deliver to our economic engine, the more we can grow the wealth for all of us. That is why this legislation is important, and why I rise to support it.

Most of the amendments that relate to border processing and administration will enable New Zealanders and Australians to get through the other country’s border quickly. We will use new technology. It may mean that we use capital to replace labour, but we are doing it to improve efficiency, and that is important for every New Zealander. The amendments proposed in the legislation are quite minor, but, yes, some systems will be automated and used in place of customs officers. I think there has been consistent confusion in the House this afternoon, particularly around questions of biosecurity, because those issues are dealt with by the Ministry of Agriculture and Forestry, not by the Customs Service. It does not seem to have been something that has occurred to the majority of speakers here this afternoon. We are here to improve arrangements for the travelling public.

We will move to biometric technology. This process has been coming for the last 9 years. The previous Government did nothing to advance this cause, and I congratulate the Minister on moving forward so quickly after only 10 months in office. Biometric technology will allow New Zealand and Australian passport holders to complete customs and immigration arrangements using an automated system, instead of chatting to the friendly person at the arrivals desk when they reach the other country’s border. It is already used widely in Australia and it could have been introduced here if the previous Government had been on its game for the past 9 years, which it clearly was not.

This bill will come to a select committee that I am a member of, and I will be looking forward to processing it through the committee by the middle of November. Accordingly, because I will have another crack at this cherry I will sit down. I support the first reading of the bill.

GRANT ROBERTSON (Labour—Wellington Central) : I rise to support the Border (Customs, Excise, and Tariff) Processing Bill.

Paul Quinn: That’s enough.

GRANT ROBERTSON: That is it? No, it is not. It is an excellent bill, because it introduces some new technology into the control of our borders. It will allow and facilitate for much easier movement between New Zealand and Australia. The SmartGate concept is one that I know some colleagues across the House might be a little scared of. Paul Quinn would not make it through a SmartGate any day. But I say to Mr Quinn that he does not have to worry; they will not be asking him any questions. He will just have to look in the cameras and he will be able to get through. I am sure that Mr Quinn will enjoy his trips to Australia all the more now that he can make it through with SmartGate. The bill that comes before us today does a lot to try to improve and facilitate people’s movement across the Tasman.

I will pick up on one thing that Mr Hayes said around the issue of biosecurity, and I do not think we should pass over so quickly the concerns that Kevin Hague and others have raised here. When New Zealanders travel overseas, they like the fact that when they are travelling on a New Zealand passport, they are able to move well and freely. Our passport is a document that is respected and has integrity. In turn, when we come back to New Zealand, we like the fact that we are able to move smoothly through. But we also like the fact that we have a pristine country. We also like the fact that we have flora and fauna that we are proud of. It attracts people to come to New Zealand. Anything we do—be it changes to customs or be it biosecurity changes—that appears to weaken that reputation is something we need to do with caution. When this bill comes to the Government Administration Committee, I will certainly be seeking reassurances that anything that happens to it there will continue to protect the integrity of New Zealand’s borders.

It is interesting for me that at a time when Government members have been standing up and saying proudly that this bill will help increase the protection of our borders, and that it is an important part of increasing surveillance and of ensuring that we do things to cut into the scourge that is P, we also know that the National Government took out $3.5 million from the border control budget this year. It took out $3.5 million. If we are really serious as a country about protecting our borders, and if we are serious about cutting into the scourge of P, then why would the Government cut out $3.5 million from border control?

John Key was talking about these issues on Q+A on Sunday. Paul Holmes, in what was otherwise a fairly sycophantic interview, asked him at the end about the fact that $3.5 million had been removed from the budget for border control. John Key’s response was: “Yeah, well I mean we’re putting a lot of money into this now … I mean we’ve expected every government department to actually look for ways to have savings, and I don’t think that should be mixed up with a message of getting tough on drugs.”

Well, I am sorry, I say to Mr Key, but if we are getting tough on P, which is something that all members in the House support, then the border is where we need to be getting tough on P. The border is where we need to be intercepting the ingredients that make up P. If we are cutting out money, and if we are lowering the amount of security and decreasing the integrity of our border, then we will not be able to make those cuts into the supply of P. It is all very well to talk about the across-the-counter medicines that people buy in pharmacies, but a large quantity of those precursor ingredients are coming in across the border. We need to keep investing in our border control to make sure that we keep the scourge of P out of this country. I think it is a bit rich for Mr Key to be trumpeting that and talking about taking out that money.

At the same time, we have seen 50 staff taken out of Biosecurity New Zealand. I accept Mr Hayes’ point that this bill is largely about customs, but if we look at the border in totality, if we look at New Zealand’s presence at the border, then removing 50 staff from Biosecurity New Zealand is not investing in it. If we look at places like Timaru and Nelson, we will see that those ports will now be wondering whether there will be enough staff to deal with biosecurity emergencies. I ask whether we will be able to protect our border as we decrease the number of staff.

One of the things this National Government has proudly said is that it is moving resources to the front line. That is what it is doing. It is taking them out of the back office. If we ask most New Zealanders what one of the fundamental front-line services that the Public Service provides in New Zealand is, they will say it is the service at the border. It is biosecurity. It is border control. This Government has taken out $3.5 million from border control and it is cutting staff in Biosecurity New Zealand. The Government is not taking seriously the protection of our borders. That is not reducing back-office staff; that is reducing front-line services. The distinction between the front line and the back office is completely artificial, anyway. But in this instance, the Government is not even living up to its own rhetoric.

In fact, this bill is a good bill. I think that New Zealanders will know that when this bill passes it will protect and provide an assurance to them that our borders are protected. But the select committee will have a job to do in helping provide that reassurance and in making sure that New Zealanders know that their biosecurity and borders will be protected.

I will speak briefly about the changes to the Tariff Act that come in under this bill. They are something that I support. I think that when we are making agreements about reductions in tariff rates in free-trade agreements, it is useful and good to be able to do that in a simple and an efficient manner. But I also think that when we talk about these changes at the select committee it will be very useful to make sure that we find a way of communicating about these changes in a way that people understand. It is important for those who are involved in the affected industries to know about the reduction rates and to understand the impact on them when we are putting things through in legislation. Although I certainly support the efficiency and the streamlining in this bill, I want to make sure that when we work on it at the select committee we are not taking information away from the public. I want to make sure that we are not creating a situation where the people who work in industries affected by tariff reductions do not know as much about these changes as they should.

The rest of the bill deals with a number of enforcement matters and seizure and search responsibilities for customs officers. Again, custom officers will now be placed under more pressure in their working lives. They will be finding it more and more difficult as staff around them are removed.

Some of the work that has been put in brings a cost. The SmartGate, for instance, will cost $38 million. That is a large amount of expenditure and a good investment. I would ask the National Government what it thinks about investing in the people who work in those areas. What about investing in the customs officers and in those who work to protect our biosecurity? Over the National Government’s time in office we have consistently seen that it does not want to make that investment in people, and border control is about people.

One of the concerns that has been raised about the SmartGate idea was whether there will be any interaction between someone coming into New Zealand using the SmartGate system and an actual person. I am reassured by reading the bill and the explanatory note that there will be that interaction. There will be an opportunity for some interaction between someone coming into New Zealand and an actual person so that we can continue to protect our borders. Customs officers and Biosecurity New Zealand staff are the people whom the Government needs to invest in. They are the people who keep our borders strong. Technology is all well and good, and it is an important part of facilitating movement and protecting our borders, but it is the people who work in those organisations, the hard-working public servants, whom this Government should be investing in.

In summary, I support this bill. I look forward to it coming to Parliament’s all-powerful Government Administration Committee, where we will look at it closely, analyse it, and ensure that it contributes to free movement between Australia and New Zealand and to the protection of our borders and our beautiful country. Thank you.

NIKKI KAYE (National—Auckland Central) : I am delighted to speak in the first reading debate on the Borders (Customs, Excise, and Tariff) Processing Bill. I am particularly delighted that it will be going to the Government Administration Committee, and I look forward to deliberating with other members on that committee.

The purpose of the bill, as has been mentioned by many other speakers, is to improve security at our borders. I want to touch on a point that was incorrectly stated by a number of Labour members.

Hon Darren Hughes: Name them!

NIKKI KAYE: Mr Hughes has asked me to name one of them—Clayton Cosgrove mentioned the reduction of 55 staff. I make the point that those staff were involved in biosecurity operations at the border, but the whole point of that particular system was that it concerned the investigation of containers. It was a user-pays system. The issue is that in the recession the number of containers dropped, so there was not the need for those particular officers—that was in the area of biosecurity. I think it is really important to make the point that we are talking about two separate issues. I can see how Labour members have tried to draw the longbow in terms of border operations, but the point is that a key focus of this bill is technology. It is about bringing the New Zealand Customs Service into the future. I raised the point regarding those particular staff—that it was a user-pays system. The number of containers dropped, therefore the need for those particular staff dropped. This bill is specifically dealing with some issues, in terms of taking the New Zealand Customs Service into the future.

One of the key amendments in this bill concerns the SmartGate system, and I must admit that in my electorate I have had some great feedback about it. People are all for making it easier to travel between New Zealand and Australia. I think there has been a lot of good feedback regarding the announcements from Prime Minister John Key and Kevin Rudd in this area.

The other point is that there are a number of other amendments in this bill that I look forward to looking at more closely during the select committee process. One of them focuses on technology, as well, and around the use of future technology. The amendments will have the effect of allowing for future technology to be used, instead of the traditional seal that was envisaged at the time those definitions were drafted. This is quite important because it might include “smart” packages that are able to detect interference with their contents. That is crucial because we need to be able to know that the packages that are coming in have not been interfered with. We need to use technology to help us to do that.

The previous speaker, Grant Robertson, criticised our Government in terms of its investment in people. But one of the key points in this bill is that we are taking the New Zealand Customs Service into the future and using technology. I want to give members an example of that. If we had been asked 10 or 20 years ago about the use of electronic boarding passes, would people have really ever questioned now how beneficial they are? I think there is an issue of the Labour Party being a bit in the dark ages. Labour members need to understand that technology can be very beneficial. The National Government is bringing the New Zealand Customs Service into the future.

The other key amendment I want to bring to people’s attention concerns false allegations or reports to a customs officer. This is a very serious issue, but I can see in the draft bill that a new offence is seen as necessary for people with false intentions who allege to customs that an offence has been committed or that the safety of people or goods is jeopardised. This offence is based on section 24 of the Summary Offences Act, which relates to the police. This is quite crucial. We are giving customs officers the power to penalise those people who are wasting the time of the New Zealand Customs Service.

There are a number of amendments here. I have mentioned the particular ones relating to technology, which are about bringing the New Zealand Customs Service into the future. We have heard a whole lot of stuff from the Labour Opposition, which I do not think is particularly relevant to this bill. I saw that David Shearer launched Mike Lee’s mayoral campaign. I do not believe he has announced that he is standing yet, but David Shearer said that he had. A whole lot of irrelevant stuff has come from the Opposition, but I am very proud to be supporting a bill that is about taking the New Zealand Customs Service into the future, supporting technology, and supporting Kiwis and Australians to be able to travel more easily to each other’s countries. I am proud to be supporting this bill.

A party vote was called for on the question, That the Border (Customs, Excise, and Tariff) Processing Bill be now read a first time.

Ayes 113 New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 5; Progressive 1; United Future 1.
Noes 8 Green Party 8.
Bill read a first time.

Hon STEVEN JOYCE (Minister of Transport) on behalf of the Minister of Customs: I move, That the Government Administration Committee consider the Border (Customs, Excise, and Tariff) Processing Bill, that the committee report finally to the House on or before 16 November 2009, and that the committee have the authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

  • Motion agreed to.

Sentencing (Offender Levy) Amendment Bill

In Committee

Part 1 Amendments to Sentencing Act 2002

JACINDA ARDERN (Labour) : I am pleased that we now have the opportunity in the Committee stage to expand on some of the debate on the Sentencing (Offender Levy) Amendment Bill, which started last evening. I think that Part 1 sits at the core of some of the debate that was had, particularly at the Justice and Electoral Committee. Part 1 sets out the order of priority for the payment of the various types of infringements—or punishments, for want of a better word—that can be imposed on an offender at the time of sentencing.

There was quite a lengthy discussion at the select committee about what order the levy, existing fines, and reparation should go in, and also about whether judges should take into account, in the payment of each of those, the ability of an offender to pay. I want to highlight something here when I refer to the ability of an offender to pay. I am not undermining the importance of an offender being held to account for the crime that that offender has been found to have committed. Of course, that is the primary purpose of an offender being brought before our judicial system, and reparation is a very important part of that. But I do see a role for a judge in taking into account the financial circumstances of an offender—the offender’s ability to pay—when awarding reparations, fines, or, in fact a levy. That is important because if a judge awards reparations or a fine that is completely ludicrous and outside the realms of possibility of the offender’s ability to pay, that undermines the system. It not only undermines the system but also creates an expectation for a victim in an unfair way, if the reparation is unable to be paid. So I think there is a balance to be struck between accountability and keeping the viability of a scheme. I guess that in the view of the victim it is about a level of magnitude, but I wanted to make that point.

The discussion that was had at the select committee was very much around the impact of the levy on reparation. I think the select committee agreed that reparation was probably the most important payment that was awarded by a judge, because it is a direct payment from an offender to a victim. Not only does it highlight the accountability question but also it is a direct restitution of sorts to the victim, in a way that an offender levy never will be. But although the reparation will remain the first thing that must be paid, the judge also cannot take into account the awarding of a levy when reparation is awarded.

We had a big discussion at the select committee about whether it was possible to enforce that. It was a big question. I just want to highlight the way in which it has been set out in Part 1. The proposed new section 12(1A), inserted by clause 4, states: “When considering undue hardship or other special circumstances … a court must not take into account that the offender is required to pay a levy under section 105B.” How does one do that? How does one ensure that when a judge is making a decision on the size of reparation, the judge is not taking into account the payment of the levy? Some might argue that the levy is so small in size that it would not matter, but that raises the question of what the purpose of the levy is in the first place. It is something that the select committee had a significant discussion about.

Clause 6 talks about determining the amount of a fine. It states: “Section 40 is amended by adding the following subsection: ‘(5) When considering the financial capacity of the offender under subsection (1), the court must not take into account that the offender is required to pay a levy …’ ”. So we see that the primary aim of the Government is to have a broad-brush levy, and that it is not to take into account whether the majority of offenders will be able to pay the levy. I think that risks spending an inordinate amount on chasing levies—small levies—across the entire spectrum of offenders before our courts. That raises a question about the legitimacy of the scheme, because if the primary aim of the scheme is to help victims, surely we would try to set it up in an efficient enough manner that we reduce the administration costs as much as possible and we maximise the use of the levy as much as we can. Therefore, we would surmise that the best way for the Government to do that would be to do what we do with fines and reparation, and that is to take into account the offender’s ability to pay.

That leads me to believe that perhaps building a pot of money for victims is not the sole aim of this bill. In fact, I think there is a political message here. The Government is sending a political message that it is tough on crime because every single person who comes before the court will be fined a $50 levy. Perhaps I would have more sympathy for that if it were not for the facts that it will cost $7 million over 4 years to administer a political point and that we will probably get only $7 million into a fund for victim support at great expense and with a great administrative burden. Perhaps it would be better for the Government to look at different ways of ensuring that Victim Support has greater funding and support, or reparation—

Paul Quinn: Obviously failed School C. maths!

JACINDA ARDERN: That is my rough memory of the calculations made before the select committee.

Paul Quinn: Well, they’re completely wrong.

JACINDA ARDERN: I may have them slightly askew, but there were also estimates that it would take 30,000 offenders for this account to break even.

Paul Quinn: You sure you’ve got those right?

JACINDA ARDERN: I would be happy to provide Mr Quinn with those figures, because they were quoted in media reports. There are many other, greater ways in which we can ensure we support victims.

I find it slightly contradictory that we are here discussing this bill, given the changes to accident compensation, and in the light of changes to the criteria for who is eligible for counselling in relation to the victims of serious crimes. I think it is unfortunate that the Minister will not acknowledge that there is a significant difference between the rules that have previously been issued and those that are being administered now.

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

JACINDA ARDERN: Before the dinner break we were discussing the split in cost between how much would actually be collected and returned to, presumably, the victim support scheme, and how much would go into administration fees. I will clarify some of the figures I was talking about before the dinner break. Originally, it was thought that perhaps this scheme could collect up to $5 million a year for victims, but that was scaled back to a prediction of about $13.6 million over the first 4 years. Then, of course, we need to subtract what was estimated at $1.3 million—the cost to set up the levy—and an estimated $1.5 million per year in order to run it. That was the point at which I was previously talking, in rough terms, about a halving of the amount that was collected and the amount that would flow on through. That was something I wanted to clarify for the benefit of members on the other side of the Chamber.

In regard to Part 1, we have already talked about the order of priority between reparations, the levy, and fines. I will touch briefly on the amount of the levy. Externally it may seem that the blanket choice of $50 as a levy is quite an arbitrary figure. I would be interested to hear the Minister’s explanation as to why $50 was chosen as the amount that we would apply across the board. I wonder whether it was thought that at $100 one would then have to switch to adding in the disclaimer regarding the ability to pay, or whether that would considerably reduce the number of people who would pay. I am interested in the explanation behind that, and I am also interested in the following questions. If we treated the levy in the same way that we treat fines and reparations by factoring in the ability to pay, would we have been able to considerably increase the amount that the levy could be, and could we have also significantly reduced collection costs?

We would carve out some of the costs if we were already taking into account whether we would spend half our time chasing people around the country, and potentially arresting them and locking them up, for not paying their levy. Perhaps we may have found ourselves in the situation where we would not be talking about such a considerable chunk being taken out for administration costs. Perhaps we could have talked about putting significantly more—more than $50; something more meaningful—into a pot of money set aside specifically for victims. Perhaps we would not be—unnecessarily, in this case—raising expectations for victims about what they might receive.

CHESTER BORROWS (National—Whanganui) : It is good to be able to take some time to address some of the matters that have been raised in the debate on the Sentencing (Offender Levy) Amendment Bill. The previous speaker, Jacinda Ardern, made a number of comments about the ability to recover the levy; why the levy has been set at $50; the ranking of reparation, fines, and the levy; community-based sentences and the levy; and the cost of administration. It is interesting to note that the way the court now looks at the recovery of moneys is that reparation sits at the top in priority. Reparation is generally ordered as well as a community-based sentence, or frequently a custodial sentence, and also where a fine has been given as a sentence. So reparation is being paid to the victim or the complainant. It has priority, so it is the first money that is obtained. And so it should be. Community-based sentences go hand in hand with reparations and do not affect their recovery, and energy is put in by the collections unit to get their mitts on the money that is reparation and to forward it to the victim or the complainant. Fines can be commuted to community-based sentences or to prison, and so they should be, but reparation never is.

We heard at the Justice and Electoral Committee—and the previous speaker was obviously there and able to hear all this, so I am surprised that she does not quite have a handle on it just now—that a lot of time would not be spent on the recovery of a levy, especially if all that was left of a sentence was the recovery of the levy, because of the size of that levy. We also heard that the reason why it was set at $50 is that when we look internationally at comparable schemes, we see that this is about the same dollar figure between currencies. That is why a $50 levy was chosen. We also took into consideration the size of the levy and the likelihood of recovery. If the levy was, say, moved to $100, it would be harder to recover. It may be more worth spending energy and resources on the recovery of a big amount.

What we are aiming for here is for all people who are convicted of an offence before the courts to have a $50 levy imposed on them. We know that the vast majority of them will have no problem in paying it, so we are expecting an initial compliance with the levy of 68 percent straight off. That will glean for the Crown, and therefore for the victims’ fund, about $13 million in the first 4 years. Initially we heard the fairly rash statement from the previous speaker that about $7 million would be obtained but that it would cost about $7 million to recover, so there would be basically a nil gain. That was the initial statement from the previous speaker, Jacinda Ardern—

Jacinda Ardern: Stop splitting hairs, Chester!

CHESTER BORROWS: She can tell I was listening. One has to wonder therefore why an astute Labour Party that now finds itself in Opposition would even vote for this legislation. I am not sure that the member even told the Committee that the Labour Party would be supporting it, but for those who were interested and those who are listening at home, I say that Labour is supporting this bill. One has to wonder why, if we take into account the scheme as outlined by the previous speaker. The reason Labour is supporting the bill is that it actually puts victims first. This is what the public want in this country, and this is where we are going.

Let us just examine the fall-back position of the previous speaker, who said the scheme would gain about $13 million over 4 years, and it would cost $6.5 million to $7 million to recover that $13 million. Well, the figures we were given at the select committee showed that the total cost of recovery moved over the 4-year period between $1.126 million and $1.344 million, but the net gain was going to be $2.932 million in the year 2009-10, up to $4.395 million in the year 2013-14. That is actually net revenue, which means it is the revenue after those administrative and recovery costs are taken out. This scheme will recover for the cause of victims of this country $13 million that is not currently able to be gleaned, to cover the costs of being a victim or a complainant. That is a very, very good thing, and I am proud to be part of a Government that has taken that stand.

Hon SIMON POWER (Minister of Justice) : I apologise to the Committee of the whole House for my absence prior to the dinner break. I would like to take up Jacinda Ardern’s question about how the amount of the levy was arrived at. When we were in Opposition we had time on our hands to look around other jurisdictions at how this levy may work. We managed to look at a number of jurisdictions—from within New Zealand, I might add; we did not have to travel overseas to do it—

Hon Lianne Dalziel: What happened to the drivers of crime?

Hon SIMON POWER: I tell Ms Dalziel to watch this space. Just so that members are aware of this, I say that other jurisdictions tend to have a split levy. A good example is New South Wales, where it is A$140 if a person is convicted on an indictment or pleads guilty, split to A$60 if a person is convicted otherwise than on an indictment or pleading guilty. In the Northern Territory the levy for an adult is somewhere in the vicinity of A$60, and A$40 for any other offence that is not one following a prosecution on an indictment. In South Australia, where Mr Cosgrove’s good friend is from, a split levy is run also—[Interruption] Indeed. I say to Mr Cosgrove that it is split three ways, somewhere in the vicinity of A$20, A$70, and A$120, depending on what the criminal offending is. I will leave Tasmania for one moment. Looking at—

Grant Robertson: It doesn’t support the Minister’s argument!

Hon SIMON POWER: Not at all; quite the contrary. I just wanted to get on to Canada. Canada has a more complicated system whereby a percentage of any fine is imposed on the offender as a levy, which is not the case here. In the absence of a fine, it is Can$50 for summary conviction offences and Can$100 for indictable offences.

When we looked at all of those examples from around the world, it struck us that a tiered system would only add complication to the process. Once we had looked at the range of options that were available to us, we settled on $50 as being a reasonable and payable sum within the context of those international examples.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : In Part 1 of the Sentencing (Offender Levy) Amendment Bill I want to look particularly at clause 4 in respect of reparations, which states that a court must not take into account whether an offender is required to pay a levy. Chester Borrows, the chair of the Justice and Electoral Committee, will recall that I sat in for a number of sessions on this bill. There was quite an interchange with officials about how judges would act in respect of dealing with hardship. Mr Borrows himself said reparations are the top priority, and in respect of the levy the legislation says one cannot take hardship into account. In respect of fines, Mr Borrows made the very good point that a court could commute a fine into, I heard him say, a community-based sentence, and that is correct.

Without criticising our judges, I say to the Government that judges are not fools. Of course a judge would comply with the provision in clause 4, but let me put this to the Minister: if a judge was faced with a case of personal hardship, he or she would acknowledge the $50 levy. If the fine was to be $250 and there was hardship involved, it may be that, as Mr Borrows said, the judge would choose to commute the fine to a community-based sentence. Or it may be that a judge, knowing that a person cannot pay—and I am not defending the offender here; I am just looking at the practicalities of this matter—may say although he or she had the idea of fining the offender $250 at the back of his or her mind, instead the fine will be $200, plus, of course, the levy. In my view, that proves that although we are supporting this bill—and I make that very clear to Mr Borrows—this part of the bill is something of a mockery.

This bill has been very well hyped by the Government. We all believe in the principle of assisting victims, and that is why we did a number of things while we were in Government that we will touch on later, including enacting the Victims’ Rights Act, which gave victims the ability to claim against any compensation monies that criminals receive—and the list goes on. I have to say that this levy tugs at the heartstrings of victims. I will make a couple of predictions. One is that Jacinda Ardern is right and, in essence, we will find that the costs of collection will outstrip the monies that are collected through the levy. I remember asking officials what the problem would be with simply providing that when judges fine somebody, they just up the fine by $50, or, in the case of reparation, they put $50 on directly as part of the reparation and use the existing reparation system. Some answers were given about that; I was not convinced by them. This levy tugs at the heartstrings of victims.

I come back to my point that judges are not fools. They will look at the offender who is before them. They have a menu of sentencing arrangements and options before them, including prison. Mr Borrows said another option was commuting a fine to a community-based sentence, which judges can also do. There is also the offender levy. I think one reason that the Government would not support including the $50 directly in reparation or simply saying it forms part of any convicted person’s fines and arrangements, and we can use our existing collections system, is that it wants to use the levy as a political pamphlet. It wants to be able to say there is a levy of $50.

There is another issue in respect of Part 1, because the levy is $50 per offender. In the select committee we canvassed the issue of someone who walks into a pub, gets into a brawl, beats up three folks, faces three assault charges, and is fined $50. We could make the argument that $50 divided by three is too little—that it is virtually nothing and will make no difference. Where there are a multitude of offences, the levy is not per offence but per offender. I think people in the community have supported this measure because they like the notion of offenders contributing compulsorily to the well-being of victims. The community has a notion that offenders should pay something back, and I think we would all support that. However, the question is whether this bill—and I say it has the whiff of a political pamphlet about it—will do what it intends. If the Government was serious about helping victims, it could have chosen to take the money it says it will get and, without any bureaucracy, to fund Victim Support directly with $15 million or $16 million. The Government could have given the money directly to Victim Support, the eminent group that it is, and said that because it deals with victims every day and interacts with and supports them, it knows exactly how they feel. The Government could have decided to cut the bureaucracy and fund Victim Support, and to chase those who have outstanding fines.

The question is whether this levy will work. Even Judith Collins, the moderate and venerable Minister who has made modesty an absolute virtue in the police and corrections portfolios, has herself admitted that fines—and essentially this is a fine; it is called a levy, but it is a monetary imposition on an offender, and there is not a lot of difference from a fine apart from the use of another word—do not work. In the New Zealand Herald on 2 February 2009 she said “There’s no point fining people who don’t pay fines when you’ve got other action to take.” That is what the Minister of Justice’s own colleague said. It is interesting that when we look at a paper in the Ministry of Justice’s own name called Structure of Operations in the Ministry: Proposals for Consultation, we see that people who owe the offender levy will be grouped based on their “willingness and ability to pay and their attitude towards compliance”. Well, that is tough, is it not? That is the Government talking really tough! So offenders will be grouped based on their attitude towards compliance. In English that means that if the levy is all that someone owes, no one in the Government will come after him or her. If offenders know the Government is not going to come after them, I suspect their attitude will be that they will not pay. That is human nature. It shows that the Government is prepared to tolerate targeting only those offenders who are likely to pay, while the hard-core fines defaulters whistle off into the ether.

We will support this bill and let it pass through the House, and I address this point, which Mr Borrows made: why would we do that if we have problems with the bill? I believe the legislation will be ineffectual, although it is well intended—and I take the ministry’s word on that—but it will also bring a point of accountability over the next year or two. When we see that it is not working, and when victims’ heartstrings have been tugged by this Minister and the Government, then we will see whether this Minister will go to victims’ groups, such as Mr Garrett’s Sensible Sentencing Trust, speak at their conferences, and explain to victims why the Government has let them down and why this offender levy is not delivering on the promises that were made. Substantial promises have been made by this Government. I take up Jacinda Ardern’s point in respect of costs. We have some precedent regarding costs in the fines collection world. The cost of administering yet another layer of fines will be greater than the money that comes in for the victims. The Government could have used other mechanisms if it had wanted to do so.

Another issue was raised before the select committee, and I do not raise this issue lightly. It is that somebody who commits a heinous offence—and every offence, even burglary, is heinous—is fined $50 for murder, $50 for shoplifting, $50 for rape, and $50 for burglary. I acknowledge the point made by the Minister in the chair, Simon Power, about tiered levies and tiered fines, but I say he is sending a pretty awful signal to victims. A rape victim will not get a cheque for $50 sent to him or her, but there is, sadly, some symbolism around the lack of value that is attributed to the grief, tragedy, and trauma that the person has gone through. I will give the Minister this point of respect: I know that that is not his intention. But I think that when this legislation passes, that will be its practical effect, unless the Minister changes his mind about that. If the offence is murder, the levy will be $50. If it is burglary, it will be $50. If it is shoplifting, it will be $50. If it is common assault, it will be $50. If it is rape, it will be $50. If one person commits multiple crimes on a particular occasion—multiple murders, possibly—the levy will be $50.

There are some good intentions in relation to this bill, and we will support it because it will bring in and fine-tune a piece of accountability that we can render home to this Government in a couple of years’ time. I will wait for the Minister to front up to the Sensible Sentencing Trust and other victims’ rights groups when this legislation does not work. Expectations have been raised, and I will expect him to take responsibility for the inaction in relation to this levy.

SIMON BRIDGES (National—Tauranga) : It is good to take a call on Part 1 of the Sentencing (Offender Levy) Amendment Bill. I will make two or three very brief points in response to some of the things that the Hon Clayton Cosgrove said.

I absolutely agree with him that there was quite a discussion at the Law and Order Committee about the issue of whether judges would take into account the $50 levy and try to add it on to other fines or reparation, but I say to members that I simply cannot see that. I agree with him that judges are not fools—they certainly are not. I also think they take their jobs pretty seriously; they want to be true to their oath. His point would have a lot more power if we were talking about a levy that was at the level of, say, $200. But at $50 I think judges will take clause 6(5) very seriously.

Hon Clayton Cosgrove: So they are serious at $50 but not serious at $200?

SIMON BRIDGES: I think that is right, and they will take that amount into account when they decide that.

Because I do not want to take all my time, I will make another very brief point in response to Clayton Cosgrove’s other point—and these are not his words—that it is a slap in the face for the victim of a rape conviction that the levy is only $50. This bill is quite clear about amending section 105B(3), inserted under clause 7, which states: “The levy is not a sentence and is in addition to any sentence.” We are not dealing with something that is trying to punish; the purpose is quite different. It is not about punishing the offender; it is about making a contribution to the victim’s costs. So I do not think it would be proper to see it as somehow commensurate with the kind of offence that the conviction is for.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I think it is a bit rich for the Government to be introducing the Sentencing (Offender Levy) Amendment Bill at a time when it is undercutting accident compensation for the victims of sexual violence. It is absolutely outrageous that it has come to this House and said it will take $50 off people who are convicted of any crime, no matter what level that crime is at, and said to the victims of sexual violence that they have to tell their story to three different people before it will approve them to have the counselling sessions they previously had access to. The reason why that is relevant to this particular bill is that when we go back to the regulatory impact statement—of course, it has not been mentioned in the debate thus far, probably because it contains a reminder of what this legislation was designed to fill the gaps of—we see that “Victims of crime often face significant costs associated with the crimes committed against them that are not covered by the ACC, other state help, or by court ordered reparation.”

The Government gives with one hand while it takes away with the other. It has taken away the easy access to the counselling services for people who suffered the most horrific sexual violence crimes in this country, by requiring them to meet a new standard. I do not care how often Nick Smith stands in this Chamber and says otherwise, but the new rules are being applied now. Those new rules say that no longer will the word of the counsellor who has assessed those people be accepted. The rules now require victims to prove they have a mental injury in terms of the diagnostic manual—I think it is the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition. I am not sure of the particular phrase that is used in the new requirements. On the one hand the Government is saying that this legislation will fill the gap of costs associated with crimes committed against a person that are not covered by the accident compensation scheme, but on the other hand all of a sudden accident compensation is being cut to the extent that people are no longer able to access the support they need.

I do not know what the net result will be, because there has to be recognition that the cost of collecting this $50 will indeed be significant. The Government does not know how much it will be, and the regulatory impact statement certainly would not have got past me if I had been the Minister on that side of the House, but it must have got past those Ministers. They now have a Minister for Regulatory Reform, the Hon Rodney Hide, but unfortunately the quality of regulatory impact statements has gone down since he has had that role. The point I am making is that nowhere in the regulatory impact statement does the Government indicate what the cost of recovering that amount will be compared with the amount it will be paying out. Who will the money be paid out to? It certainly will not be paid out to counsellors who are supporting people who are partially supported by the accident compensation scheme where they had not been before.

The way it will be paid out—the distribution—will be that the secretary may from time to time pay to an approved agency an amount of money from money that is held in the account. Before approving an organisation as an approved agency, the Secretary for Justice has to be satisfied that the organisation has as one of it roles the provision of services to the victims of crime. But there are so many agencies providing services to the victims of crime that counsellors who work independently will not fall within the category. Therefore, it will mean that the gap that has been left by this change in accident compensation legislation will not be met by this bill, at all. That makes it even more frustrating. We see the Government on the one hand trying to look as if it is doing something for the victims of crime—

Carmel Sepuloni: Window dressing!

Hon LIANNE DALZIEL: This is a window dressing bill. I thank the member for that interjection, because I was trying to think of a word to describe legislation that is designed to create—[Interruption]. No, we are not going to use that word. We can say the word “hypocritical” as long as we do not assign it to an individual member of the Committee. If I were to assign it to a member of the Committee, I would be ruled out of order, so I will not do that.

CARMEL SEPULONI (Labour) : I will carry on from where the Hon Lianne Dalziel was, with regard to the amount of money that will be collected through this levy, and the fact that the National Government itself seems a little bit confused over how much the scheme will cost to run.

Just looking at Part 1, we can see that this whole Sentencing (Offender Levy) Amendment Bill is tied up in some major bureaucracy. The fact is that its provisions will cost a lot of money to run, and, at the end of the day, the amount of money collected will be minimal. At one point Mr Simon Power was claiming that the scheme would collect about $5 million a year for victims, but it is interesting that he was then forced to scale back that prediction to $13.6 million over the first 4 years. I would not be surprised if we were to see a lot more scaling back as time goes on, as the Government realises that the cost of collecting this money will be a lot more than the amount actually collected. When we subtract the estimated $1.3 million it will cost to set up the levy, and the estimated $1.5 million a year it will cost to run, suddenly we have basically halved the amount the victims will gain.

So we on this side are a little bit disappointed. It is another situation where this Government introduces legislation and all it is is window dressing. At the end of the day, it will achieve very little for the victims the Government is purporting to support. We will not oppose the bill but, as I said, it is another example of legislation that does not hurt much but does not do much. We are kind of on the fence about whether we should support it, because it is not going to hurt anyone but it is also not going to do much. So, yes, it is a very difficult situation to be in.

It is a shame that this National Government is attempting to raise unrealistic expectations among the public about what the Government will be able to deliver through this bill. Victims of crime are going to be disappointed. It is quite sad, because they would have seen the publicity about the bill, they would have heard what the National Government is saying with regard to the perception it is trying to create, and they would have felt hopeful that something would be there for them, but there will be nothing.

As the Hon Lianne Dalziel has said, it is completely contradictory for this Government to pretend that it is setting up this levy because it cares about victims of crime, and at the same time to talk about making cuts to the accident compensation entitlements of victims of crime. As Lianne Dalziel was saying, on the one hand the Government takes away and on the other hand it gives. But at the end of the day what it is giving does not make up for what it has taken away. If this Government really cared about victims, it would not be attempting to make sexual abuse victims go to the media or an MP to have the Accident Compensation Corporation (ACC) reverse its decisions to limit their counselling. We heard today an example of this. A Taranaki grandmother of two young boys who have been raped, sodomised, and beaten was forced to go to the media and to her local MP to beg for counselling for the children. The ACC-approved counsellor said that they needed counselling, the police said that they needed counselling, but ACC turned them down. It seems that a new step in the procedure could be trial by media or MP; that seems to be what this Government is attempting to do. In terms of the $50 levy, we on this side of the Chamber do not think that it really makes up for what the Government has just taken away with regard to the ACC entitlements that victims of sexual abuse will no longer be entitled to. If this Government really cared about victims, it would not be cutting the entitlements that families of suicide victims currently receive.

This offender levy scheme will require a bureaucracy to administer it. The collection costs are likely to outweigh the returns. Since this Government has come into office all we have heard about is the need to cut back on bureaucracy, and here it is creating more bureaucracy—bureaucracy that will not be effective. It would be more effective if this Government decided to give the money it will take to set up this bureaucracy to Victim Support. It is already difficult enough to collect reparation from criminals, so what makes National think it will be easier to collect this levy? It is going to be very difficult to collect $50 off prisoners to add towards the fund that the Government is creating. It is unfair for victims of crime—

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I want to touch on an issue that Simon Bridges raised when he spoke as a learned lawyer and, I am told, a former prosecutor in his own home town—

Chester Borrows: I think he was.

Hon CLAYTON COSGROVE: Well, yes. We were having a discussion about how judges would deal with the issue of hardship and whether—let us be blunt about it—they would try to find a way around the imposition of a levy through, say, downgrading fines or commuting fines to community service. I found Mr Bridges’ comments quite astounding because of course we know that judges get around laws—I say bluntly—that are put forward in this Parliament. I will use the analogy of the law I passed a few years ago about boy racers. Judges took away cars permanently from offenders in only 2 percent of cases or fewer. I had advice from the police and learned folk all over the show that this would not happen—that judges would be tough and use the mechanisms within the law we passed—but they did not.

Then Mr Bridges made a very interesting statement, which I was quite astounded at since it came from a learned Perry Mason - like lawyer and prosecutor.

Hon Member: No, no. Perry Mason was a defender.

Hon CLAYTON COSGROVE: He was a defence lawyer, was he? OK. Essentially Mr Bridges said that judges would do their job and adhere to the principles of this law because the levy was $50, but that if the Government had set the levy at $200 then they probably would not adhere to the law; they would get around it. I do not think judges normally act that way and I am very surprised that Mr Bridges, a learned prosecutor, would make such a claim. In essence, he substantiates the point I make: judges will have flexibility through the fine mechanism. Mr Borrows, the chairman of the Justice and Electoral Committee, said in a very valid point right at the start of his speech that fines can be commuted to community service, prison, or whatever.

I come back to the point that this is, in my view, quite unworkable legislation. It will be interesting to see how judges will interpret this law, because no one can guarantee how a judge will implement it. I make this claim again: I am not defending the offender, but if an offender comes before the court and makes a so-called legitimate plea of hardship—and there is a combination of perhaps reparation, fines, and the compulsory levy—then a judge quite legally and quite rightly, from the judge’s point of view, has the ability to alter the fine mechanism, if the judge so chooses, to commute a fine to community service. That would be an easy way to do it and still adhere to the law. There would be the 250 bucks. The judge would say: “Johnny cannot pay that. I will make him do community service, but I have to put on the $50 levy, which I will do.”

I ask the Minister in the chair, Simon Power, who I am told is also a learned lawyer, whether he will rise to tell us how he can guarantee that judges would not use that mechanism, which is in adherence with this law, does not break this law, at all—

Hon Simon Power: Contravene.

Hon CLAYTON COSGROVE: —it does not contravene this law. I knew he was a good lawyer; he knows the big words. How can he guarantee that that will not occur? I am quite happy to ask him now; in fact, I will ask him now. I will yield to the Minister if he would like to tell us how he can guarantee that a judge will not get around this levy by simply doing what I have said. It happens every day in respect of fines and reparations if a judge feels that the reparation is going to be too tough. Sometimes it is for very practical reasons, perhaps a lack of ability to pay, which is noted in this law. I would love the Minister to get up. I am happy to yield to him through you, Mr Chairman. I am happy to give him 10, 15, 20 minutes, or half an hour tonight—as long as he likes—to convince this Committee that this bill will be absolutely operational in the fashion that he has committed to, both in his pre-election policy and tonight. He cannot give that guarantee. He is a learned lawyer and a bright chap, I am told, and he knows that it is impossible because he is not a judge. Judges interpret nearly every law, and often interpret them differently.

I recall, as Minister for Building and Construction, after we passed the second generation of the weathertightness legislation on compensatory damages, the learned judge Justice Lynton Stevens, I think, decided to interpret the law quite differently. I thank Mr Chairman for the further call, but I am happy to yield to the Minister if he has changed his mind and wants to answer the question. In that case in respect of damages the judge had interpreted the law and, from memory, struck them out or made certain classes of people ineligible for them, which was, in my view, directly contrary to Parliament’s intentions. I recall that we did a very, very rare thing: we actually suspended the Standing Orders, which is very rare for this House, and literally punched through a bill with a couple of clauses in it to effectively reverse it and clean it up. We had been advised by the officials that the judges would interpret the law in the way Parliament intended. Well, they did not. I make another prediction. I suspect that the Minister will be faced with a choice where he has to come back to this Chamber and tighten up this law. We will see from the figures—and it will be quite easy to analyse—where judges are at in terms of commuting fines as a basis of lessening the overall cost to the offender based on a hardship plea.

This bill’s intent is injecting money from offender to victim—from court, if you will, to victims’ groups. We do not need the Secretary for Justice to set up bank accounts, as in new section 105G, or to make decisions about distribution. We have an organisation, just one of many organisations, called Victim Support. The Minister could go to the Minister of Finance tonight—he might be at his house cleaning it, perhaps—and ask for 60 million bucks a year. The Minister of Finance might tell him to hang on as he does not have that money. Mr Power could then tell him to take half the money he was going to give to private schools, and dish it out to victims. There we go. Done! Just like that. Tonight. If we take $16 million off the $35 million to private schools, we still can give a bit of money to private schools, and we could directly inject the rest into Victim Support and the other agencies that, unlike that member over there, are highly skilled in terms of dealing directly with the needs of victims. There would be no bureaucracy. [Interruption] As the member for Coromandel bleats on, I say that there would be no bureaucracy and no need for this legislation, and we could use the courts to go and chase the fines defaulters and others. We could do things like Labour did when in Government, such as stop people at the border and say that they are not going overseas until they have paid their fines. We could do that directly, tonight, with no bureaucracy. This Minister and this Government railed against red tape and railed against bureaucracy. But if we were really serious, we could make an appropriation of $16 million—or however much the Minister claims the revenue would be; I suspect it would be a lot lower—and inject it directly and contract directly with Victim Support and other non-governmental agencies that help victims today and are skilled in that area.

I say to this Minister, because it is a very important question, that I invite him to stand up and give a guarantee that judges will not contravene this law. If he cannot give that guarantee, then the game is over. Somebody asked what the point is of being here tonight. The game is over, and it is over for victims because this is a sham. Using the words of the former Prime Minister of Australia, Paul Keating, I say to Mr Borrows and the other members who interjected on Labour speakers asking why we are supporting this that it is because in accountability terms we will do this legislation and this Government slowly. It will be debated here again next year and the year after, as we prove to victims that Simon Power and his Government tugged at the heartstrings and raised expectations, and then the member for Coromandel and her ilk let them down.

If the Minister is prepared to rise tonight and give that guarantee as a lawyer, then we will have another look at it. Labour will support this bill.

Sandra Goudie: People had their chance.

Hon CLAYTON COSGROVE: The people had their chance and had their say, and rendered their verdict on this legislation. Every victim who is let down by this legislation will render a verdict on that member, on the Minister, and on their Government. I do not believe, whatever one’s political colour, that we should tug at the heartstrings of the most vulnerable—we have heard about accident compensation—and then try to pull a fast one with this legislation.

Labour will support the bill to use it as a point of accountability with this Government. The truth is that the Government cannot live up to the pledge it has made unless, as I have said, it does the honest thing and makes an appropriation.

JO GOODHEW (Junior Whip—National) : I move, That the question be now put.

Hon PETE HODGSON (Labour—Dunedin North) : I was impressed by the elegance of the argument put forward by Lianne Dalziel. She said, more or less, that tonight we are looking at legislation that will increase our ability to offer assistance to victims of crime, only because the Minister for ACC cannot get the numbers in the House to put in legislation that will reduce the assistance given to victims of accidents. I think that is a really nice little conundrum. The Government has found itself at war again, for the second time this week, but this time it is over accident compensation legislation. The climate change legislation is unravelling in a room in this building as we speak.

In respect of the Sentencing (Offender Levy) Amendment Bill, we are looking to improve the lot of victims of crime. I am interested in the money. I did not hear Chester Borrows when he spoke, and I wonder whether he would be kind enough to indicate whether the expected 4-year revenue stream would be $13 million or $30 million.

Chester Borrows: $13 million.

Hon PETE HODGSON: So it is $13 million, and presumably the amount will increase each year, because there will be an implementation period and then there will be a backlog, and the backlog will slowly clear—well, it will never clear, but the payments will increase.

I think, if I heard Chester Borrows correctly, the costs of the collection were thought to be something like $1.1 million or $1.2 million. I have a few things to say about that. Earlier today we passed money-laundering legislation, and when that bill was put into the House the Ministry of Justice attempted to put some figures in the regulatory impact statement, but failed. So we had legislation that had no dollar figure in it. We came to the Foreign Affairs, Defence and Trade Committee and found that the dollar figure was, first of all, large, and, secondly, highly contested by the banking industry and the finance sector—highly contested because the regulatory impact statement had been put together around an earlier draft of the legislation. By the time the officials had decided to become prescriptive, the regulatory impact statement was out of date, and the regulatory impact was going to be large. So two things happened. There was no regulatory impact statement at the time of introduction, and, secondly, when the select committee got it, it was wrong.

In this case, the regulatory impact statement, signed off by the Ministry of Justice as being a complete, total, accurate, and full impact statement, does not have a dollar figure anywhere near it. But if we take Chester Borrows as being the man who has the correct figures—let us pretend for the moment that his figures are accurate, and I am sure he has given them accurately, but they will have been derived from the Ministry of Justice, in whom I have little faith in these matters—then we will see that the cost of collection appears to be somewhere in the order of a quarter of the revenue. No inland revenue system in the world would operate with that level of inefficiency. The question is, given that this Government wants to improve productivity, wants to improve efficiency, and wants to reduce back-office bureaucracy, how could one possibly deal with it? Clayton Cosgrove had a pretty interesting argument, which he put forward, which was that the much more efficient way to do it would be to take money from private schools and give it to victims.

Hon Clayton Cosgrove: Only need half of it.

Hon PETE HODGSON: We would need only half of it. I think the Minister of Justice would agree that even if we receive up to $4 million a year for Victim Support, that amount does not meet the needs of the Victim Support service. I think people would agree with that. I do not think anyone thinks that we can provide decent victim support for four million bucks. If we have too little money being collected too inefficiently, and the Government does not want to take money from private schools, then maybe 50 bucks is too low. That is a possibility. Maybe 50 bucks is too low.

Then we come to the argument of whether it will be paid. A colleague of mine who spoke earlier, and I think it was Clayton Cosgrove, said that he thought the fact that something would not be struck because it might not be paid went to the heart of decent justice. We would fine someone according to what the fine should be, not according to whether we think it would be paid.

TODD McCLAY (National—Rotorua) : I move, That the question be now put.

STUART NASH (Labour) : I stand in support of the Sentencing (Offender Levy) Amendment Bill, and I want to refer to the explanatory note. This bill primarily amends the Sentencing Act 2002. As we know, it proposes to impose a $50 levy on all convicted offenders—not for offences—when they are sentenced or otherwise dealt with by either the District Court or the High Court.

I did not know much about this bill until I started reading about it. If I had listened to the Minister who proposed this bill, or to anyone on the other side of the Chamber, I would be none the wiser whatsoever. I have not heard anyone on that side of the Chamber propose any reason why this is good legislation. I have heard my colleague Clayton Cosgrove talk a whole lot of sense, for 20 minutes, about why this bill is just window dressing. It will not make much difference, whatsoever.

Let us face the facts. Crime is a disease. It is a plague. It is a scourge on our society and on our country. We all agree that the victims of crime need to be supported—without a question of doubt. There are agencies in place at the moment that support victims. They do a fantastic job. But society has a right to defend victims, and it has a right to make sure that victims are transitioned back to being productive members of society as painlessly as is absolutely possible. But I am unsure how this bill will help.

I would like to pick up on a theme that the Hon Clayton Cosgrove and the Hon Pete Hodgson just talked about. National talked about bureaucracy, and how we are wrapped up in red tape.

It is dreadful. What are we going to do about it? We are drowning in it. The courts will love it. And what do we have here? We have another piece of bureaucracy. It astounds me that we have agencies in place at the moment that are prepared to collect this and that are prepared to help victims. Victim Support is a classic one. It is just amazing. But Labour does support this, because—well, I do not know why. What is the point in not supporting it?

I would like to hear from the Minister what this bill is about. I have been sitting here for an hour, and I have heard the Minister stand up and run through a couple of schedules that are done in some states, or a couple of other countries. He should tell us what this bill is about. He should tell us how it is really going to change the lives of victims. He should tell us how it is going to reduce crime. That is what that Government campaigned upon. It said that it was going to come in and reduce crime, and it was there for the victims of crime. The Minister should tell us how the bill is really going to do that, how it will transform society like the Government promised to do. I have not heard a word on that, I say to Mr Power. I would love him to tell me, and the people of New Zealand, how that will actually happen.

As all of my colleagues have mentioned, there is $35 million going to private schools. The Government should take $13 million back and give it to Victim Support. In fact, why do we not give it to adult and community education? It needs it more. If more people had the ability to seek an adult education, then they would not be in front of the courts. They would be in the classrooms learning productive skills, out there earning in jobs, and they would not need to be in front of the courts.

My first question is—[Interruption] This is quite interesting, my colleagues. That is the most I have heard the members on that side of the House talk about the bill. That is the most I have heard them say, and they are not talking about it at all. They should stand up and tell us about what they will do. Chester Borrows should stand up and tell us how this bill is going to protect us. I want to know why all the policemen in Whanganui voted against that man, and he stands up for victims. It is unbelievable. Does this sound like a message from a Government that cares for victims? I will give members a quote: “if my doctor told me I was terminally ill and I had 30 days to live, with the ACC rules as they are, I’d find myself a train to throw myself under on the 29th day because my family would be treated so much more generously … under the current law.” That was said by the Minister for ACC, Nick Smith. It is unbelievable!

I ask members whether that is a Government that cares about victims’ rights—I do not think so at all. My colleague Carmel Sepuloni said it right when she said this is just window dressing. It is just playing to the public. Well, the public are sick and tired of it. They want real measures that will make real differences.

Sandra Goudie: Ha, ha!

STUART NASH: There is someone over there laughing about it. She is laughing about what the people of New Zealand want. The people of New Zealand want real measures that will make real differences. My colleagues will remember hearing National members say that crime would cease when the National Government came in. Well, it has not, at all. It is unbelievable.

Hon PHIL HEATLEY (National—Whangarei) : I move, That the question be now put.

Hon LIANNE DALZIEL (Labour—Christchurch East) : It is important that I follow on from my colleague Stuart Nash, because I think that one of the serious issues that the Government has failed to stand up and address tonight—

Hon Steve Chadwick: In urgency, don’t forget.

Hon LIANNE DALZIEL: Yes. I think the Opposition, no, the Government, sorry—it will be the Opposition—is being totally unfair and unreasonable about this particular bill, the Sentencing (Offender Levy) Amendment Bill. It is introducing it at the same time as it is reducing entitlements for victims in other areas. So it is ironic indeed that we are debating a bill that takes a $50 levy from offenders.

Let us look at who will actually pay it. I think it is extraordinary that the tariff is an equal tariff—it applies right across the board. The level of offending committed does not matter; $50 is the amount paid. When we think about how that $50 tariff is going to play out, we realise that the bottom line is this: people who go to jail and have no income at all will be the ones who do not pay the levy; the ones who do not go to jail, because their offending is at the lower end of the scale, and continue to work, or who get home detention and continue to work, will pay the levy. How is that sending a message that makes any sense to anyone at all?

The bottom line is that the Government has decided that it would like to meet one of the commitments that it made during the election campaign by creating a hugely expensive and bureaucratic system to transfer some money within the system in order to provide additional funding to certain victims’ groups. I am deeply concerned about this, because from the way that the legislation has been framed the levy has to go to victims’ organisations that provide services, and they have to be signed off by the Secretary for Justice. Would it not be more efficient and more cost-effective to provide the money directly, to do a vote line transfer to Victim Support and give it the capacity to assess where the need might lie?

Hon Steve Chadwick: Because they struggle.

Hon LIANNE DALZIEL: Because it does struggle with the work that it does. I know that the work that it does is incredibly valuable. I want to highlight that in respect of a particular crime that occurred in my electorate. Two bodies were discovered in an Aranui house. What happened was that Victim Support was tremendous with the family of Tisha Lowry. It went to them, it supported them, and it offered them the assistance that they needed. The family could not speak highly enough of the work that it did. But there is another set of victims when there is a serious crime, and that is the neighbourhood. I know that the Minister of Justice knows that. The immediate neighbours of that particular criminal offending lived in the other half of that house. A wall separated the two homes, but the floorboards covered the same bit of dirt. There is no way that that family is ever going to be able to live in that house ever again. In fact, I am sure that the house will be removed from the property at some point. The point I am making is that nobody said the immediate neighbours were an obvious victim of the crime, yet immediate neighbours always are. In this case, that was probably more obvious than it would be in many other cases. I have talked to Victim Support about whether, in a situation like that, it might be a good idea for Victim Support to sit down with the police and make some assessments about what support could be given very early on. The neighbours found out from the media that bodies had been dug up from under their floorboards, essentially, the night before—that that was the digging sound and the lifting sound that they could hear from their home.

I feel great sympathy for the individuals caught out in this particular case. I do not agree with some of the statements that they made publicly about the level of support that they got, and I have told them that. But I have also made the point that it is really important to think about these things across the board. I think that is what this sort of funding, if it were given to an organisation like Victim Support, should do.

CHESTER BORROWS (National—Whanganui) : I move, That the question be now put.

The ASSISTANT SPEAKER (Hon Rick Barker): The question is—[Interruption]—that the question be put.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I raise a point of order, Mr Chairperson. You are right to proceed as you do. The only plea I would make in mitigation is that my colleague Lianne Dalziel called for her second call immediately the bell went—

Hon Member: Third call.

Hon CLAYTON COSGROVE: —for her third call, and there are other colleagues on this side who wanted to have a call. Secondly, Mr Borrows has already spoken. I do not know whether that member has the ability—I am not sure what the count is—to move that the question be put.

The CHAIRPERSON (Hon Rick Barker): I will draw this to a quick conclusion. There is some conjecture on the Opposition side as to whether a member who has already spoken can move a closure motion. My advice from the Clerk is that, yes, that member can. That is point No. 1. The second point is whether I am entitled to put the question to the House. I say that that is without dispute. I make the point that in this debate there seems to be no contest about whether to be for or against. The last two speeches were not Committee stage speeches; they were second reading speeches of a very general nature. So I thought the Committee had come to the end of its wind on this part.

  • Motion agreed to.
  • The question was put that the amendment set out on Supplementary Order Paper 67 in the name of the Hon Simon Power to Part 1 be agreed to.
  • Amendment agreed to.
  • Part 1 as amended agreed to.

Part 2 Consequential amendments to other enactments

Hon SIMON POWER (Minister of Justice) : Part 2 as introduced amended the definition of “fine” in the Social Security Act to include the offender levy. That was to allow Work and Income to disclose information such as addresses and telephone numbers to the court to enable the location of any beneficiary who is in default on payment of the offender levy.

The Justice and Electoral Committee amended Part 2 by creating a schedule of amendments, moving the proposed amendment to the Social Security Act to the schedule, and adding four other Acts. The definitions of “fine”, or “fines defaulter” in the case of the Tax Administration Act, are amended to include the offender levy. The amendments allow people who owe levies to be matched as part of the authorised information-matching programmes run by the Ministry of Justice. The schedule also amends the Summary Proceedings Act 1957 to ensure that if the court makes a payment order under sections 81 or 83, payments received from an offender are paid in the order of priority set out in new section 105C of the Sentencing Act. That order—for the sake of absolute clarity—is reparations first, offender levies second, and fines third.

Supplementary Order Paper 67 removes reference in the schedule to the Immigration Act 1987, because the intent of the amendment has been affected by a Supplementary Order Paper to the Immigration Bill.

  • Part 2 agreed to.


  • The question was put that the amendment set out on Supplementary Order Paper 67 in the name of the Hon Simon Power to the schedule be agreed to.
  • Amendment agreed to.
  • Schedule as amended agreed to.

Clauses 1 to 3

Hon CLAYTON COSGROVE (Labour—Waimakariri) : Clause 1, as we know, is the title clause of the Sentencing (Offender Levy) Amendment Bill. Some would say that the title is accurate; I am sure the Government members would say that. Others of us, on this side of the Chamber, would propose other names. Perhaps it could be the “Tug at My Heartstrings Bill”, the “Victims Bill”, or the “Flimflam Bill”. The “Political Pamphlet Bill” may well be a more accurate title for this legislation. One may ask why. It is because of many of the arguments made tonight. The Minister, who took a call, failed to take a call on the relevant part to address the questions that I and my colleague Lianne Dalziel put to him and to others, especially in relation to providing a guarantee that judges would give effect absolutely and without question to this legislation, and not contravene it through other ways, such as commuting fines to community service.

I think the Minister has let the side down with his approach to this legislation. We have not heard much from the Government members in respect of how they support this legislation, how they believe in this legislation, and how they know that it will help every victim who is a constituent of theirs, because apart from Mr Borrows, who has kept the sign up and battled away as the good soldier he is, very few on the other side of the Chamber have taken a call to deal with the flimflam bill that this is. They know, and Simon Bridges proved it by some of the statements he made, being a lawyer, about what judges would do in respect of a $50 or $200 levy—how judges would effectively contravene it and legally get around it. But very few people on the other side have decided to get up, put their heart and soul into it, and actually say that this bill will work.

Victims may be watching or listening to proceedings tonight. They may have seen National’s pre-election political spin and the post-election political spin, and certain Ministers like Mr Power and Ms Collins saying they will get tough with offenders and will stand by and support victims. Well, an argument has not been put up tonight to defeat the proposition that I, Mr Hodgson, and others put forward, which was to appropriate money from another pot, perhaps private schools—I suspect if one took $16 million off the $34 million or $35 million the Government is giving private schools, they would not really blink an eye, because it would not make a heck of a lot of difference to them—and in an efficient way contract with Victim Support and other agencies to directly assist victims.

This—sadly, I say to those who are listening and watching tonight—is thin legislation. It is a political pamphlet dressed up as legislation. This is from a Government that said that it would not create bureaucracy; in fact, it said it would strip bureaucracy out. As I say, if it wanted to, it could have made a direct appropriation to support victims and then used its role as the Government through the courts and the Ministry of Justice to go after fines defaulters. But the Government has chosen not to do that, because it wants a little box and a little line item in the Budget documents and in the court records that says “offender levy”.

This bill is about a name and a slogan, which, ironically, we are debating in clause 1. It is not a name; it is a slogan. This, sadly, is a piece of political puffery that—as I have said before, and I will repeat again—tugs at the heartstrings of victims. It says to victims that this Government will look after them. It says to victims that somehow $50 per offender, no matter how many offences are committed on the given day, will mean that the Government will somehow look after them. It says to victims that whether the offence is a heinous offence of murder, rape, or whatever, or whether it be still heinous but on the more minor scale of offending—perhaps common assault, burglary, shoplifting, or whatever—it is still wrong, still a crime, still an impact on a victim—[Interruption] Mr Heatley giggles and laughs like some sort of nervous schoolboy.

Hon Phil Heatley: Like a giggler.

Hon CLAYTON COSGROVE: He says: “Like a giggler.” We debate a very serious issue tonight, and at least the Minister has taken it seriously. Although he has not taken a call for a while, he has taken it seriously. This is the Minister’s legislation; he has taken this bill seriously but has not provided much of a robust defence. Maybe he was a prosecutor like Mr Bridges, not a defence lawyer, but he has not provided much of a robust defence. But as he shepherds this bill through the Parliament, Mr Heatley’s contribution is to giggle.

Hon Phil Heatley: Mr Heatley is giggling!

Hon CLAYTON COSGROVE: “Mr Heatley is giggling”, he says. He might want to show some respect to victims. When this legislation goes through and does not work, I wonder whether he will be giggling to his constituents up north when they come to him and say that they voted for him because they thought he would look after them and because they thought this bill—the Sentencing (Offender Levy) Amendment Bill, as it is named in clause 1—would actually provide some resource for the victims. But it will not.

I make another prediction tonight. Maybe the title should be the “Delayed Appropriation Bill”, because I suspect that as the costs of collection outstrip the revenue gained, this Government in a future Budget, possibly even next year or the year after, will make a special appropriation to top it up. It will be an embarrassment when the bureaucratic costs outstrip the revenue. It will be interesting to talk to victim support agencies to see how much money actually flows directly to them, if any, so that they can support the people who are at the sharp end: the victims of crime. Then we will have some questions for Mr Power and we will see how tough he really is in respect of offenders.

Hon Simon Power: “Tough”!

Hon CLAYTON COSGROVE: Yes, he says “Tough.” Mr Power and Judith Collins are between them beating the drum for victims in a superficial way. They are the people who are going to get tough on offenders and going to support victims. We will be able to question Mr Power, and it will be interesting to see what he has to say when victims are let down. The title of this bill could be: “The National Government Lets Victims Down Bill”. The National Government has hyped up victims, said that it would look after them, and then dropped them like a hot cake.

Again, members opposite ask why Labour is supporting the bill. Well, it will become a pivotal point of accountability for this Government. We remember the list of pledges in respect of crime and of victims. I say again for the record that if the Government were really serious in wanting to get resource to the victims directly, it would fund victim agencies directly. Then it would take responsibility, as a Government, for collecting fines and other reparations, and it would make offenders pay for their crimes. But the Government will not do that, because it wants to say that it has put through an offender levy. It wants to print that on its next campaign pamphlet. That is what it wants to say. That is what this bill is about.

I say to those people who might be watching this debate on television and might be cynical about the debate from members on our side of the Chamber that we stand by victims and that we have a record of doing so. We have a record of directly helping victims. I know, through other parties whom I will not name, that there is some scepticism about this legislation, but I say that we stand on the side of victims, as, generally speaking, I think most politicians on all sides, if not all, do. But there is a huge gap between the rhetoric and political pamphleteering, and genuinely providing resource—if that is what one believes in, and I certainly do—for the victims of crime. It really worries me that this bill appears to be a very cynical attempt. It will be trumpeted. We can almost hear them rolling out the press releases from Simon Power’s office tonight, and there will also be self-congratulatory press statements from the Prime Minister’s office, I am sure. They will state that this Government has stood beside victims. Well, the proof of the pudding will be in the eating, and the proof of the pudding will be when we see the dollar figures. The proof will be when the victims of crime come to our constituency offices and say that they thought that the Government would help them, assist them to get to the parole hearings, and provide them with money to look after themselves.

As my colleagues have said, maybe this could be the “Accident Compensation Amendment Bill No. 2”. From what we have heard tonight from Lianne Dalziel, at the same time as Government members are promoting so-called assistance for victims, they are stripping it away on the accident compensation side. This bill is a sham, and Minister Simon Power will be accountable for it. It may be well intentioned, but it will not help victims.

DAVID GARRETT (ACT) : I will remove all doubt with regard to Mr Cosgrove’s polite inference that other parties have some scepticism, because I recall that in my first reading speech on the Sentencing (Offender Levy) Amendment Bill, I expressed openly some doubts about this legislation. This has been a very informative debate. It seems to me that with the sad exception of the Greens, everyone in the Chamber is in favour of doing something for victims.

The problem that the Labour Opposition and I see and have some scepticism and concern about is whether this bill will work and whether the administration costs will soak up the levy. It has occurred to me tonight, rather late in the piece, that there is a way to solve that problem, in my view, but this is not the time to attempt to do it. I think it is well known in the House that Mr Cosgrove and I do not always see eye to eye—that would be an understatement. But I think that his speech was a very good one. If we find ourselves in the position next year where this levy has not been collectable and needs to be topped up with something else, then I will look to supporting an amendment to make it work.

To me, there is one very simple and obvious amendment. It is this: when offenders are bailed in our courts, they go downstairs to the cells while the bail bond is drawn up, and they do not walk out of the door until the bail bond has been signed. It seems to me that we could do this very simply with this levy. An offender who is convicted is sent downstairs and told that when his mum, his girlfriend, or his scumbag mate comes up with 50 bucks, then he will go. He will start his community service, negotiate with the registrar over the fine, or whatever. The collection costs are virtually nil.

Hon Lianne Dalziel: It’s only going to be paid by people who don’t go to jail.

DAVID GARRETT: Yes, perhaps so. I am giving notice that the ACT Party and I will be following carefully whether this measure works. If it does not, then I do not think I will need to support Mr Cosgrove in this matter. The initiative may well come from us to pass an amendment in the nature of the one that I have just described. Everyone can come up with 50 bucks. For the idiots who smoke cigarettes, that is three packets of fags. They will all have access to 50 bucks. If this bill does not work, and if the dire predictions of Mr Cosgrove come true, then we will be looking to support an amendment to make it work. Thank you.

Hon LIANNE DALZIEL (Labour—Christchurch East) : My colleague Clayton Cosgrove has made some very good points about the nature of the title of this bill. Describing it as the Sentencing (Offender Levy) Amendment Bill is designed, I guess, for National to send the message that it has delivered on its 100 days of action at the beginning of its term in office, and that this measure is part of that. But, unfortunately—and this is what really bothers me about this bill—it will not really achieve any of the objectives that the Government has set for it, and ultimately victims will feel let down. That is the last thing that we want to do at this time, when we are all trying to address the needs of victims.

Alongside the point that was made by the ACT Party member David Garrett, I would have thought that one of the things that would be the most effective way to address the needs of victims would be to take steps to ensure there were fewer victims in our society by trying to reduce the levels of crime that are being committed. The point that I would make is to do with the fact that I attended the Drivers of Crime summit 6 months ago here in this building at Parliament, and the member David Garrett attended it, as well. The Minister in the chair, the Hon Simon Power, was also at the summit. The summit had some very fine objectives, and after that particular meeting I went away and did a lot of study on the issues that had been raised. I met a number of people who participated in that meeting. I worked long and hard on a considered paper on the subject, which I took to our Labour caucus. Our caucus went through a very careful and deliberative process around the drivers of crime, and wanted to show willingness in terms of working collaboratively with the Government in order to make some real difference over time.

Have we had a positive response from the Government? No, and that was 6 months ago. I wrote to the Government 5 months ago, because I think I took about a month to do the work I wanted to do, and the response I got was essentially that the Government would be considering the matters that I had raised at some stage in the near future.

Hon Simon Power: Just wait, just wait.

Hon LIANNE DALZIEL: Well, I hear the Minister say that I should just wait, but it would be quite nice to hear something a little more than “just wait”. If we are going to talk genuinely about something collaborative, then it would be quite nice to actually sit down and talk about something collaborative, but I will not let that get in the way of the issue we are dealing with here. I am saying that if we could do something to address the potential for fewer future victims of crime to be created, then we would be doing so much more as a Parliament than we are doing by simply passing a $50 offender levy, regardless of the type of offence that the individual has been convicted of, and also regardless of the sentence that has been handed down.

I know that this legislation says that the levy is not part of the sentence, but the bottom line—and I think David Garrett from the ACT Party agrees with me—is that the only people who have any chance of actually paying it are those who do not go to jail. They are the only people who will have an ongoing income at the point at which they are convicted of the offence. I am not disagreeing with the member’s solution for how to get the levy out of the individual at the point of sale, as it were—you know, like an EFTPOS system for offender levies. I am actually not disagreeing with him; I am just saying that when the person goes to jail, the chances of getting the $50 offender levy out of anyone else associated with that individual will be kind of like waiting until hell freezes over. Not only will the tariff be the same regardless of the level of offence but also the payment will depend on the type of sentence that the individual gets. The more serious the offence and the more serious the sentence that is imposed on the offender, the less likely it will be that they will be called upon to pay the offender levy. To me, that just smacks of hypocrisy. I am worried that we have unsuccessful legislation here.

My colleague Clayton Cosgrove came up with the “National Party Hype Bill”, the “Letting Victims Down Bill”, and the “Tugging on the Heart Strings of Victims Bill”. I think I would add the “Give with One Hand and Take with the Other Bill”.

SIMON BRIDGES (National—Tauranga) : I move, That the question be now put.

KELVIN DAVIS (Labour) : I will make a couple of points. First of all, it is great to see that our colleague in the ACT Party, David Garrett, is in touch with his socialist side. It is wonderful to hear him supporting Clayton Cosgrove.

It was interesting to hear Mr Garrett say that the ACT Party will be looking at the Sentencing (Offender Levy) Amendment Bill and seeing whether it works. The question I have is what the measure of this bill working is. Will we see a reduction in crime? Will we see empty prisons? I wonder what the measure of success will be for this bill. Those are the questions that I have. Perhaps Mr Garrett would like to speak to those questions later.

I turn to the title of the bill. We heard some great alternative titles for this bill from Lianne Dalziel, who spoke just before me. One new title could be the “Sentencing (Increased Bureaucracy) Bill”, because we have heard that it will take more effort, more time, and more money to collect the $50 levy than if it was not in place. The bill could be called the “Undervalued Victims Bill”, because we see that the family of a murder victim will receive $50 from this levy. Similarly, a jaywalker will have to pay $50, and a person convicted of speeding or drink-driving will have to pay $50. To me, that undervalues the lives of those people who have had serious crimes committed against them.

Do not get me wrong; I agree that offenders need to pay. I believe that. But I think there is a better way that offenders could be made to pay, and I do not think that this $50 levy is equitable. As I say, a jaywalker will have to pay $50 and a triple axe murderer will have to pay $50. The triple axe murderer would have to pay the $50 only once, not $50 for each of his victims.

This bill could also be called the “Sentencing (Missed Opportunity for Victim Support) Bill”. It is ironic that Victim Support has been mentioned a number of times in the House, because my father and 11 others from Mid North Victim Support spent 6 or 7 hours on the road yesterday, coming down from the north, and another 6 or 7 hours on the road today so that they can attend the Victim Support conference being held tomorrow at the Brentwood Hotel. Unfortunately for them, I believe they have had to pay the costs of the van, gas, accommodation, and their meals—except for one, which was the meal that my father made me buy for them tonight at Bellamy’s. Half of them came up here and sat in the gallery to have a look at the proceedings and the other half stayed back at the buffet and finished off the seafood. However, of the dozen people—

Hon Mita Ririnui: You’re the victim there!

KELVIN DAVIS: —thanks!—who have come down in the van from the far north, not one is under 65 years of age. They are all retired. They are living on superannuation. If this levy had been gathered up, it could be used to bolster Victim Support so that people like my father are not dipping into their superannuation and into my inheritance to come down to the Victim Support conference being held in Wellington tomorrow. I believe that an opportunity has been missed for Victim Support. It is a fantastic organisation. I know that people up in the north, as are people in other Victim Support organisations around the country, are woken up in the middle of the night. They have to go out and counsel people. My father has brought people to our place, to be comforted and consoled after being the victim of a crime or incident, and there is a huge cost involved. Like I say, just about all of the counsellors in Mid North Victim Support are over the age of 65. We could have used this fund to support bringing younger people into Victim Support, training them, and getting them accustomed to what Victim Support counsellors do.

KEVIN HAGUE (Green) : I take a call because my colleague David Garrett effectively challenged me to do so by suggesting that the Green Party does not support victims’ rights. The Green Party is a party in this Parliament that has an extremely sound and proud record of supporting victims’ rights. For example, I think of the work that Nandor Tanczos contributed towards restorative justice over the years he spent in this House. The Green Party also has a proud record of addressing the drivers of crime. When we come to bills in the justice or law and order area, or indeed in many other areas of social policy, our approach is to ask what we can do to prevent this problem occurring in the first place. That is always our focus.

The Sentencing (Offender Levy) Amendment Bill provides for a levy that does not provide a deterrent to other people committing crimes and does not provide a deterrent to an offender recommitting a crime. It responds to the pain, suffering, and needs of victims in an entirely tokenistic way. The term “window dressing” has been used tonight, and I think that term is absolutely appropriate. We part company with other parties where, if we see a bill that achieves nothing and is entirely tokenistic in its effect, our response is to vote against it. That is why the Green Party has voted against this bill at every stage and will continue to do so.

KANWALJIT SINGH BAKSHI (National) : I move, That the question be now put.

Hon MITA RIRINUI (Labour) : I appreciate the opportunity to take a call. I am sure there is not a member in the Chamber who would not love to think that this legislation not only is a good idea but also will actually work. I am not famous for my cynicism. I know that the Minister in the chair, the Hon Simon Power, as a former Minister for Courts, and I, as a former probation officer and former employee of the courts, know the difficulties not only of collecting levies, should this legislation go through, but also of collecting fines.

Being the cynic that I am, this evening I would probably entitle this bill the “Wishful Thinking Bill”, because basically I think that is what it is. I am sure the Minister in the chair is committed to the legislation and has some pretty strong theories about how it could possibly work. From having worked for the Department of Corrections and the courts in the past I know—as Mr Power and many of the members in this Chamber know, and as my colleague the Hon Lianne Dalziel mentioned before—it is all very well if the offender does not go to prison, but if the offender goes to prison, what will be the case? How does the court apply the levy, given that this particular individual will be incarcerated and unlikely at any time in the near or distant future to have the chance to pay any levy whatsoever? There is a huge list in the courts at the moment of individuals who have outstanding fines. I think that is quite a huge dilemma. The Chair himself, Rick Barker, knows this from having attempted to deal with that matter in the past, as some of his colleagues have.

It is interesting that although we might take advice from officials, design particular policies, and implement them by way of legislation, in the real world, where the rubber meets the road, it is not as simple as that. As I said earlier, and as other colleagues have mentioned, it is all very well if the individual is in the position to make that contribution or to pay the levy, but historically that has not always been the case. We have good examples in terms of unpaid fines. I know the member for Whanganui, Chester Borrows, also has a track record in the police force and, as such, would have had some involvement in court procedures and in sentencing procedures, as well. He would know that there are problems when we attempt to extract money from offenders, whether they go to prison or not. So I think that although the Labour Opposition is in favour of a genuine attempt to apply a levy, from my experience—and I am sure from the experience of many members in this Chamber in their previous roles in the community—it is not quite as simple and straightforward as that.

I want to hear from the Minister in the chair what the contingency plan is if this legislation does not work. I want to know whether we are going through this process under urgency just for the sake of it, or whether there is a grand plan somewhere that basically will be able to deal with the failures of implementing a procedure such as this legislation to impose certain requirements on individuals. The Minister in the chair really needs to explain that position to the Committee. I am sure that he has heard in the Committee stage this evening that there is some considerable support for this approach, but at the same time he has also heard members take calls and express concerns about whether this approach will be effective, and whether it will even work. My colleague the Hon Clayton Cosgrove has gotten to his feet a few times and asked what the go is if the Minister is not able to make this work.

Hon Clayton Cosgrove: Appropriation!

Hon MITA RIRINUI: Well, there is something: appropriation. I do not think the Minister of Finance would be too happy to hear that. But it is one option, because we have to ask ourselves who the victim is in this game.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : Given the ACT Party’s contribution, we could rename the Sentencing (Offender Levy) Amendment Bill the “ACT Party Deep down Does Not Really Like It Either and Does Not Think It Will Work Bill”. Mr Garrett is right on this occasion, although he and I do disagree somewhat on a number of issues. I commend Mr Garrett. He did not have to get up on his feet and make that statement, but he did so tonight. He is a man who has very genuinely held views on law and order issues. I commend him on this occasion, rare though it may be, for getting up and saying that deep down he does not believe, and the ACT Party really does not believe, that this legislation will work. As Mr Garrett said in his first reading speech, he is very, very sceptical about this bill. So the “ACT Party Does Not Believe It Will Work Bill” would be a very good title, I think, for this legislation.

It is interesting that Mr Garrett made the point that, in essence—I am paraphrasing what he said, and I am sure he will stand up and correct me if I am wrong—if in his view this legislation does not meet the mark, he will propose amendments. I presume maybe that will be to require the Government to appropriate funds, although I suspect he may not have to do that. I suspect what will happen is that Ms te Heuheu, the Minister for Courts, will have another few dollars put on the line item budget in that area. The extra dollars will be glossed up in a whole lot of words to hide what they are for, but they will be to top up the offender levy when the money does not come in and does not flow directly to victims. This bill could be called the “We Will Toughen Up in This Next Budget Round Bill”. That is, I suspect, what the Government will do, because it knows that it will have some problems.

So I commend Mr Garrett on this occasion. We do disagree somewhat on a very large number of issues, but he did not have to say what he said tonight. He got up and said he was sceptical about the bill. Well, he did effectively say that OK, the ACT Party will wander into the stalls with the National Party and put the yes stamp on the vote, but in essence ACT does not really support the bill because ACT is sceptical as to whether it will actually work and whether its implementation will provide victims with the necessary support that they want. I think, in all seriousness, a good title would be “ACT Party Government Coalition Partner: We Did Not Support It Deep down and Do Not Think It Will Work Bill”. That would be a very, very good title. The ACT Party is honest enough to say that is the case.

I invite the Minister in the chair, the Hon Simon Power, to get up and comment about the fact that the Government’s coalition partner, through its honesty tonight, has whipped the rug right out from under the Government. It would be very interesting to know what Government members will say when they go back to their electorates and the Sensible Sentencing Trust knocks on the door and asks why even the ACT Party does not believe that this legislation will work. Perhaps it will ask Mr Bridges, in his patch; I wonder what he will say. In Wanganui, where half my people come from, I wonder what Mr Borrows will say when the Sensible Sentencing Trust or other victims’ rights agents or organisations knock on his door to ask why ACT got up and honestly said it did not think this legislation would work either, and to ask why the ACT members were so sceptical about it that they foreshadowed that they would propose amendments to sort it out if it did not work. I want to hear what Mr Borrows will say then, because the rug has been pulled out from under this Government tonight at about 9 p.m., when Mr Garrett made an honest, heartfelt contribution.

The truth is that the party that purports to be the toughest party on law and order issues—and we will not debate the veracity of that—is now on the record as saying it does not think this legislation will really meet the mark. ACT does not really believe that this measure will actually assist victims; it does not believe that it will give victims the resources that they need. What the ACT members really believe is what most of us, I think, believe on this side. We all stand for victims, and we all stand with and beside victims, but we want to put legislation through this House that is not about politics but about achieving a practical effect. We want to make the levy work and to look after victims. Tonight the Government has been exposed. This is one of three or four such occasions over the last week. But tonight the party that purports to be the toughest in the House on law and order issues has basically pulled the rug out from under the credibility of this legislation. I will enjoy these speeches and I will keep them in the filing cabinet, ready to take out at the appropriate time. I think Mr Garrett will be a man of his word on what he has proposed.

JO GOODHEW (Junior Whip—National) : I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 69 New Zealand National 58; ACT New Zealand 5; Māori Party 5; United Future 1.
Noes 52 New Zealand Labour 43; Green Party 8; Progressive 1.
Motion agreed to.

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

Ayes 113 New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 5; Progressive 1; United Future 1.
Noes 8 Green Party 8.
Clause 1 agreed to.

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

Ayes 113 New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 5; Progressive 1; United Future 1.
Noes 8 Green Party 8.
Clause 2 agreed to.

A party vote was called for on the question, That clause 3 be agreed to.

Ayes 113 New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 5; Progressive 1; United Future 1.
Noes 8 Green Party 8.
Clause 3 agreed to.
  • Bill to be reported with amendment presently.

Criminal Investigations (Bodily Samples) Amendment Bill

In Committee

Part 1 New authority to take and retain bodily samples, and other amendments to principal Act

Hon LIANNE DALZIEL (Labour—Christchurch East) : I shall speak on one of the amendments that has been proposed in the name of my very good colleague Charles Chauvel. Firstly, I refer to proposed new clause 48, which is to follow clause 47. This amendment would require a review of the operation of certain provisions of the Act after a period of time. Members will see that it is essentially after the legislation has been in place for 5 years. I think this is a very good practice. We have undertaken this process in a number of legislative areas. The advantage of writing the review clause into the legislation itself is that it does not get lost in the annals of history and, of course, it will not get lost in the change of Government that will occur in 2011. That is why it is very important that we write the provision into the legislation, otherwise there may not be quite the level of priority given that ought to be given.

There is often a debate about whether 5 years is the right period in which to review legislation, and I want to make the case for a 5-year period. I recall that when I was very first a member of Parliament, back in the early 1990s, we dealt with some changes to the Human Rights Act. During the period of the operation of the Human Rights Act it had a sunset provision requirement that essentially exempted the Government from the full weight of the application of the Human Rights Act for a period of 10 years. During that 10-year period the individual Government departments that were responsible for each of the different pieces of legislation that had contrary provisions to the New Zealand Bill of Rights Act and to the Human Rights Act were to develop a series of papers, as it were, for different Ministers, highlighting to them whether the Government wanted to retain the discrimination, whether it wanted to remove the discrimination, or whether it wanted to make the case that it was not discriminatory under the New Zealand Bill of Rights Act, using, I think, the section 4 provision. There was an advantage in the period being 10 years, because there was such a substantial amount of work to do.

The reason I am arguing for a 5-year review, as my colleague has done with his proposed amendment, is that for 5 years the departments did nothing. It was only when we got into the second 5 years, as we were heading into the 10 years, that departments suddenly started to realise that they were in trouble as far as getting the legislation up to speed was concerned. In fact, I may even have the time slightly wrong because, as I recall, the legislation was passed in 1993, so it may have been a 5-year sunset provision. At the end of the period the departments suddenly found themselves right up against that deadline and the Government was going to lose the protection contained within the sunset provision, which meant that it suddenly had to start doing something about it. What actually happened was that the Government of the day—so I now think that it must have been a 5-year period that was allowed—actually had to move an amendment to the Human Rights Act to enable the sunset provision to last a little bit longer. I do not think that is a very useful way of ensuring that major changes to our legislation are subject to the intense scrutiny that I think something like this should be.

I am very supportive of the amendment and I hope that the Government will accept it in the spirit that it is offered to the Committee. It is a genuine attempt to ensure that with legislation that by its nature can be somewhat controversial, we do have a period of quiet reflection after its operation to see whether there is the need to retain the provisions as they are set out, whether they should be repealed, or whether further statutory amendments are necessary or desirable.

Hon SIMON POWER (Minister of Justice) : I have some comments to make about Part 1, then I will respond to the member’s comments about the amendment that has been tabled by Charles Chauvel in respect of the review period.

As members will know, the Criminal Investigations (Bodily Samples) Amendment Bill will be implemented in two stages. Part 1 implements the first stage. It will provide the police with the ability to collect a DNA sample from any person they intend to charge with a relevant offence. The part expands the range of offences for which it is possible to collect a DNA sample. Part 1 will allow a charged person’s DNA profile to be matched against samples collected from previously unsolved crime scenes.

Part 1 has also been enhanced by contributions made by the Justice and Electoral Committee, and I thank members of that committee, on both sides of the Chamber, for the work they have done, particularly in relation to provisions relating to young people. The committee has simplified the criteria for taking a DNA sample from a young person by applying the protections that already exist in the Children, Young Persons, and their Families Act, and that is entirely appropriate. Another important amendment made by the committee clarified a young person’s entitlement to have an adult present when a DNA sample is taken, which aligns the bill with the regime currently in place for young people being interviewed by the police. This is an exceptionally useful and appropriate clause. The effect of the clause is that if the adult chosen by the young person cannot reasonably be located or cannot attend within a reasonable period of time, the constable may require the young person to elect another adult, or the constable may elect for them, thereby ensuring that no deliberate delaying techniques are put into place, but at the same time ensuring that sufficient protections are afforded to a younger person.

The committee made two further changes to Part 1. The first was to insert a definition of the term “charged” in clause 4, and the second was to amend the bill to allow the police to apply to a District Court judge to permit a sample to be taken under new powers as an evidential sample. I thank the select committee again for its valuable consideration, and particularly for those amendments and suggestions made in respect of the arrangements for when a young person is providing the said sample.

In respect of Mr Chauvel’s amendment, members will be aware that, as expressed in the explanatory note of the bar 1 copy of the bill, the Ministry of Justice will “review the operational and cost effectiveness of the entire Act … by August 2011.” On that basis the Government will not be supporting Mr Chauvel’s amendment. The Government’s view is that it is far more appropriate for the Government to undertake reviews of legislation that it administers than it is for the Committee to commit future Parliaments to undertake such a review.

Hon CLAYTON COSGROVE (Labour—Waimakariri) : I pick up from where my colleague Lianne Dalziel left off in respect of Charles Chauvel’s amendment regarding the review clause that he proposes. I must say that it is a pleasure to be dealing with a bill of substance. I see that Mr Brownlee has joined us, and I am sure he will want to take a call after his exertions in managing such wonderful proceedings in the Chamber as we have had tonight. I am sure he will want to take a call on the Criminal Investigations (Bodily Samples) Amendment Bill.

It is with some degree of positivity that I have pleasure in speaking to what I think is a bill of substance, as opposed to the last bill debated, the Sentencing (Offender Levy) Amendment Bill. So I assume that the Government will not take the same shellacking it took from the ACT Party in respect of this bill that it took a few moments ago on the last bill debated, when the rug got pulled out.

Hon Darren Hughes: The marriage is strong.

Hon CLAYTON COSGROVE: I doubt that, somehow. I suppose I would say to the Minister in the chair, the Hon Simon Power, the Minister of Justice, that I believe the reason, in essence, he said he was not supporting this review clause, or the reason the department was not supporting it—far be it from the Minister to be led by the nose by the department; I am sure that would not be the case—

Hon Gerry Brownlee: You don’t want to speak from your own experience.

Hon CLAYTON COSGROVE: —I ask Mr Brownlee to please not tempt fate—was that the department had proposed a review based on cost-effectiveness. The difference here is that Mr Chauvel’s review deals with some far more important matters of substance than simple cost-effectiveness. In essence, the review would test whether the operation of the provisions since the date of commencement should be retained or repealed, and, if they should be retained, whether any further statutory amendments are necessary or desirable. I am sure that even Mr Brownlee, with his highly developed level of intelligence—but he will correct me if I am wrong—would note that in essence, that asks whether the bill is working.

There are some very important issues. We heard in previous debates, and I will not labour the point, that criminals, intelligent creatures as they are, have engaged in, for instance, planting DNA. Some complicating factors could lead to corrupt outcomes in respect of DNA, so Mr Chauvel’s review is not about dollars and cents, it is actually about testing, given the new technology, and given the vulnerability of the new technology, as opposed to fingerprinting, which has been debated in earlier times in respect of this bill. It actually seeks to test whether the bill is working, and whether it requires amendments to perhaps bolster it. That is about quality. We are absolutely supporting this legislation because, despite Mr Power’s comments last night about tools and tool boxes, this is a very important tool for police, and we support the moves to put this bill in place.

I also make this appeal to the Minister. I do not see what is wrong with having a review, apart from a bit of cost. The select committee officials have to run around, do the work, and look at it, so there is a bit of a cost to that, but I would say that the cost is balanced against the cost of not testing whether the legislation is doing what the Government wants, whether it is producing the quality outcomes that the Government wants, and whether it is working. So I say to Mr Calder that, yes, there would be a cost for the select committee to look at this. It is not the first time that select committees have been charged with reviewing legislation. For instance, a select committee does it after every election, and there is actually a cost to that, too. I would not have thought that this would be a deal-breaker for the Minister; I would have thought it would be a pretty minor concession, and I would have thought that it would give a layer of comfort to the Government—an out clause, if you like. Because we are dealing with a new technology, the Government may have got it a bit wrong, there may have been a loophole, or there may be something that we did not think of collectively as a Parliament, so this review provides a quality-control mechanism.

It goes beyond looking at just cost-effectiveness. I make that appeal genuinely to the Minister, because, with respect, I think Mr Chauvel is putting up a high-quality but low-risk proposition. I do not think there is much political cost in saying that, and if the Government accepts this amendment, I will not make the charge against it that it does not have faith in the legislation, or any of that stuff—I would have made that charge in respect of the previous bill debated, and I did so—I will actually congratulate the Government and say to the Minister that he has shown a high degree of judgment and leadership, because it means he would be willing to concede that Parliament, especially when dealing with new technology, can often get it wrong, or, if not wrong, can often not come completely to grips with it.

DNA is an evolving technology. I had the privilege some years ago of going to the Massachusetts Institute of Technology to hear a lecture given by—and I forget the gentleman’s name—an eminent professor—

Hon Darren Hughes: Gerry Brownlee?

Hon CLAYTON COSGROVE: No, it was not Gerry Brownlee; I would remember that name. It was not the “McDonald’s School of Graduates”; it was the Massachusetts Institute of Technology. We heard an eminent professor who was involved in mapping the genome talk about the strengths—

Hon Darren Hughes: It wasn’t Gerry’s, was it?

Hon CLAYTON COSGROVE: No, it was not Gerry’s genome; it was the genome. We heard an eminent professor talk about the strengths and the weaknesses of DNA, and I was very impressed.

Hon Gerry Brownlee: There is a demonstration of weak DNA in front of us right now.


Hon Gerry Brownlee: Nothing.

Hon Darren Hughes: Imagine mapping that DNA!

Hon CLAYTON COSGROVE: I will. For those who are watching this debate, I say that I almost yielded to the member Gerry Brownlee, but he said nothing. That is probably the best speech he has made for many years, I think. It summed up his whole time in this Parliament.

On a serious note—

Hon Gerry Brownlee: It’s certainly filling out your 5 minutes!

Hon CLAYTON COSGROVE: I say to Mr Brownlee that when it comes to filling things out, I would not go there if I were him; I am very happy with the size of my suit. I do not think we have reached the technological advance whereby one can lose weight through DNA.

I will get back to the bill. In all seriousness, I say that the professor at the Massachusetts Institute of Technology lectured us on the strengths and weaknesses of DNA. I think it is a very powerful tool.

As I said, I commend the Minister for what he is doing in respect of this legislation, but I think he would show a high degree of judgment and leadership if he simply accepted a review. It has to go beyond just cost-effectiveness. It would have been great to know whether the dollars and cents were adding up in respect of the last bill debated. If the Minister said that he had done a cost-effectiveness review in respect of the last bill debated—well, no, we would not have wanted that in respect of that bill, because we could predict the outcome of that review. But this is still a relatively new and evolving technology, and this technology has strengths and weaknesses. It is not as straightforward as simply fingerprinting, and Mr Chauvel has simply sought to say that we should look at it in 5 years’ time to see whether we need to amend it, and see whether the provisions that this Parliament is supporting—I assume universally—are working well or whether we can improve it.

I say to Mr Calder, who wrung his hands about the cost of the select committee inquiry, that I think this would be a high-quality use of a select committee and a high-quality inquiry. At its very essence, it might provide new ideas to build on this legislation. By that stage, in 5 years, or perhaps in 5 months, we will know how this technology will evolve. It may be that from that inquiry flows new legislation for the Government of the day that will have an even greater impact on criminal elements and a greater positive impact for victims. If the Minister is not going to support the amendment, that is fair enough. But surely he has a better argument than saying, as the Ministry of Justice leads him by the nose, that he will not support this amendment because the ministry will have a review that says whether it is cost-effective. We are talking about quality, not dollars. We are asking whether it works, not about dollars. We are asking whether it meets its aims and objectives, not whether it is meeting the Budget line item projection that this Government has set for it.

I invite the Minister to respond now, if he wants to. It would be a pleasure if he did. I invite Mr Brownlee—who obviously has made some sterling contributions to this debate, being an expert on things scientific—to rise and answer for the Minister.

Charles Chauvel: Sure to rise!

Hon CLAYTON COSGROVE: Sure to rise, yes. He may want to make a contribution to this debate. I think that deep down, in places Mr Brownlee does not want to talk about, he may well support the proposition I am putting up. It is worth quality-controlling the legislation. The Government will lose nothing politically and no one will have a go at it for saying that it will have a look at this legislation in 5 years, because it is very, very important. We think of David Dougherty. DNA evidence cleared that man. He was innocent. We think of Arthur Allan Thomas. It was historical technology, but I ask members to think of the consequences around that case. I say in all seriousness to the Government that it would show a high degree of leadership if it accepted this very simple but high-quality proposition.

Hon DAVID PARKER (Labour) : I find part of this legislation quite difficult—not difficult to understand, but I find it hard to know what side of the grey line I stand on. I readily concede that DNA technology is a wonderful advance in solving crime. It helps us to solve crimes that would otherwise not be solved, and, accordingly, it brings to justice people who would otherwise not be brought to justice for, sometimes, very serious crimes.

In some senses, I can hear what people say when they say that DNA matching is a scientific advance that we should be taking advantage of. Some people go so far as to say it is modern fingerprinting. They say that we have always taken the fingerprints of people when they are arrested, matched them against the fingerprinting database or fingerprints taken at scenes of burglary or other violent crimes, to help establish proof, or, indeed, to disprove, that someone might be the alleged criminal. I can see the argument that DNA matching is in some ways very similar, except that it is better because it is more accurate.

I then look at what is being said around the world and what is happening in Europe. Europe is well aware of the usefulness of DNA technology to try to prove the guilt of criminals and bring them to justice, yet the Europeans courts have said that the British have gone too far. They have gone to the extent that New Zealand is proposing to go. Britain already has a law that says that anyone who has been arrested can have his or her DNA taken, that it can be stored in a database for a long period of time, and that it can be matched against DNA from earlier crimes or subsequent crimes. The guardians of civil liberties in the European Community have told Great Britain that it has to change the law. The Europeans think that it is too great an invasion of civil liberties and that there are too many risks to people as a consequence of the DNA being stored. Those risks arise in part from the mistakes that could be made in its storage. DNA could be mislabelled as being from somebody else. That seems to me to be a problem that can be overcome, because if a mistake is made and I am accused of a crime I was not guilty of, I could always say “No, that is not me. Please take another test of my DNA.”, and the new test would show that my DNA was not the same as the one on record. So I am not sure that that is a sound basis for refusing to allow the technology used to collect DNA.

None the less, this is a time of science racing ahead. It is very hard for us to envisage all of the situations in which use of this technology in the widest possible frame could be wrong. On that basis, I am more comfortable with the proposition that my colleague Charles Chauvel put forward. He said that rather than taking DNA from people upon their arrest as of right, they could either supply it voluntarily or it could be taken from them compulsorily on the order of a judicial officer. It is a bit like getting a search warrant. A search warrant is needed to go into a house and search for evidence. What is wrong with saying that there should be the equivalent of that sort of judicial oversight before someone is allowed to take a DNA sample compulsorily? The first of the two amendments proposed by Charles Chauvel addresses that issue, and in my view it is the more important of his two amendments. I encourage the Government to take that step. Why do we have to go the whole hog, to go to the great extent that the British Government has gone to? It is now being forced by the European Parliament to wind back that measure. Why should we in New Zealand take that extra step now? Why do we not go to the halfway house that Charles Chauvel is proposing? That would be consistent with what the Europeans say is appropriate.

Dr CAM CALDER (National) : I move, That the question be now put.

CHARLES CHAUVEL (Labour) : I will say a few words about the two Supplementary Order Papers that stand in my name. I apologise to the Committee that I was not able to be here earlier; I understand that the Minister in the chair, the Hon Simon Power, addressed one of them. I was, unfortunately—[Interruption]—that is right; I think I can refer to my own absence—detained at the Finance and Expenditure Committee doing round 58 of the emissions trading scheme.

Hon Clayton Cosgrove: Did Gerry manage that process?

CHARLES CHAUVEL: No, Gerry Brownlee did not manage that process; it was managed with the same level of competence by one of his colleagues.

Hon Lianne Dalziel: What, the one who did the ACC as well?

CHARLES CHAUVEL: Well, let us not go there, I say to members; let us concentrate on the business at hand. I am delighted to follow my friend and colleague David Parker, and also the contribution by Clayton Cosgrove, and to have been in the Chamber for both of those contributions. I am very sad to have missed the contribution of Lianne Dalziel.

I will deal first with the amendments that would make changes to clause 7. Labour members, in the commentary to the bill, as reported back from the Justice and Electoral Committee, said the following: “New Zealand Labour members of the committee, having carefully considered the Attorney-General’s report to the House on the inconsistency with the New Zealand Bill of Rights Act 1990, felt strongly that there should be an amendment.” I think that for the Committee, and for the Minister, if he could turn his mind to the issue, this really has to be the nub of the question. There is an Attorney-General’s certificate of inconsistency with the New Zealand Bill of Rights Act. The view taken is that the power to confer an authority of literal physical compulsion over those arrested, in the way that the bill proposes, does interfere with the rights and freedoms affirmed by the New Zealand Bill of Rights Act. That is not a position that this Parliament should endorse readily or freely. If it is within our powers to easily amend the position so that the rights and freedoms declared by the Act are not interfered with, then that should be done.

As David Parker pointed out in his contribution, there would be no impairing of effectiveness of the legislation; this has the potential to be a very powerful crime-fighting tool. That is one of the reasons why it has enjoyed widespread support. But, for goodness’ sake, if we require the police to seek a warrant—that is, judicial authority—to enter a person’s premises or property, why on earth would we not require that level of judicial supervision when we are talking about the ability to commit what under common law is an assault, without the provisions of this bill? That seems completely inconsistent to me. It ought to be the case that this Parliament just puts in place that very simple check and balance. The police tell me they have no difficulty at the moment, even after hours, in procuring search warrants from justices. It seems to me that if that is the case, given the number of occasions on which one would expect that the powers in this legislation would have to be exercised, there should not be any great administrative burden in putting that extra safeguard in for the people of New Zealand.

So I commend the Supplementary Order Paper dealing with the judicial oversight that ought to exist, in my view, over this power. As David Parker said, this is the sort of oversight that has been put in place in Europe. The European Court of Human Rights, in respect of offending English legislation, which is essentially the scheme that this bill would enact, has said that there should be that safeguard so that the European Convention on Human Rights is complied with. Our New Zealand Bill of Rights Act comes out of the same family. The ancestry is common. It is from the Universal Declaration of Human Rights. It is not onerous to bring about compliance, and we should do so.

I will now deal with the second Supplementary Order Paper. I understand that the Minister has said that he does not think it would be desirable to have a review by the law required of the novel provisions of the Criminal Investigations (Bodily Samples) Amendment Bill, and he has said that a cost-benefit analysis will be conducted by his ministry in 2011. That is a fantastic thing, and we will all be looking forward to the fruits of that exercise.

Hon Lianne Dalziel: They’ll be in the middle of the election.

CHARLES CHAUVEL: Well, there are two reasons, and one of them has just been touched on by Lianne Dalziel, as to why we ought to have a bit of an additional safeguard. The first is, of course, that 2011 is an election year. By this legislation we confer on the police, on the executive, a novel power. It is a power of literal physical compulsion, and I would have thought that we do not want an administrative review of that power, with all the implications that that would contain, appearing in election year. We want that review to occur in a more dispassionate time and place, and the legislation that I have proposed, the amendment to clause 48, is very simple. It says that after 5 years the House of Representatives would refer—

The CHAIRPERSON (Lindsay Tisch): I remind the member that we are on Part 1.

CHARLES CHAUVEL: Oh, I beg your pardon. I thought I might be able to knock them both off in one speech, but if the Committee prefers that I take a second call on that, I am happy to do so.

  • The question was put that the following amendment in the name of Charles Chauvel to clause 7 be agreed to:

to add after new section 24J(1) the following new subsection:

(1A) A constable may only require a bodily sample to be given in accordance with a suspect compulsion order.

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

Ayes 57 New Zealand Labour 43; Green Party 8; Māori Party 5; Progressive 1.
Noes 63 New Zealand National 58; ACT New Zealand 4; United Future 1.
Amendment not agreed to.
  • The result corrected after originally being announced as Ayes 57, Noes 64.
  • The question was put that the following amendment in the name of Charles Chauvel to clause 7 be agreed to:

to add after new section 24K(1) the following new subsection:

(2A)A constable may require a bodily sample to be given only in accordance with a juvenile compulsion order.

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

Ayes 57 New Zealand Labour 43; Green Party 8; Māori Party 5; Progressive 1.
Noes 63 New Zealand National 58; ACT New Zealand 4; United Future 1.
Amendment not agreed to.
  • The result corrected after originally being announced as Ayes 57, Noes 64.

JOHN BOSCAWEN (ACT) : I seek leave to amend the ACT vote. It should be four votes opposed on each of the last two amendments.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection. We will amend the vote.

  • The question was put that the following amendment in the name of Charles Chauvel to clause 7 be agreed to:

to omit new section 24L.

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

Ayes 57 New Zealand Labour 43; Green Party 8; Māori Party 5; Progressive 1.
Noes 63 New Zealand National 58; ACT New Zealand 4; United Future 1.
Amendment not agreed to.

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

Ayes 107 New Zealand National 58; New Zealand Labour 43; ACT New Zealand 4; Progressive 1; United Future 1.
Noes 13 Green Party 8; Māori Party 5.
Part 1 agreed to.

Hon GERRY BROWNLEE (Leader of the House) : I move, That the Committee report progress.

  • Progress to be reported presently.
  • House resumed.
  • The Chairperson reported the Sentencing (Offender Levy) Amendment Bill with amendment, progress on the Criminal Investigations (Body Samples) Amendment Bill, and no progress on the Domestic Violence (Enhancing Safety) Bill and the Gangs and Organised Crime Bill.
  • Report adopted.
  • The House adjourned at 9.50 p.m.