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6 July 2011
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Volume 673, Week 78 - Wednesday, 6 July 2011

[Volume:673;Page:19805]

Wednesday, 6 July 2011

Mr Speaker took the Chair at 2 p.m.

Karakia.

Visitors

Japan—Prime Minister’s Fellow, Mr Takatane Kiuchi, National Diet

Mr SPEAKER: Honourable members, I have much pleasure in informing the House that Mr Takatane Kiuchi, the 2011 Prime Minister’s Fellow from the National Diet of Japan, is present in the gallery. I am sure members would wish that he be welcomed.

Questions to Ministers

State-owned Assets, Sales—Onselling Shares to Foreign Investors

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Will he prevent shares sold in New Zealand-owned and taxpayer-owned assets such as our power companies being onsold to foreign corporates; if so, how?

Rt Hon JOHN KEY (Prime Minister) : One of the tests we set for extending the mixed-ownership model to companies other than just Air New Zealand was that there would be widespread and substantial New Zealand share ownership. We are still working through the details of that, but our expectation is that having New Zealanders at the front of the queue is one thing, and given the likely strong demand for shares from the likes of KiwiSaver funds, Crown financial institutions, and Kiwi mums and dads, such restrictions are likely to be unnecessary to achieving that test. By holding a stake of more than 50 percent the Government will ensure there is always a majority in New Zealand ownership.

Hon Phil Goff: So when Tony Ryall was asked at the Finance and Expenditure Committee on 22 June: “How would you guarantee that those shares would not be onsold for foreign multinationals?”, and he answered: “Well, you can’t guarantee on those issues.”, Tony Ryall was right, contrary to the Prime Minister’s questioning of that statement yesterday?

Rt Hon JOHN KEY: I think the debate is about what level of foreign ownership there would be, and because a majority is held by the Crown as a starting point, and because New Zealanders will be put at the front of the queue, we know by definition that the majority has to be in New Zealand hands. If it was such an amazing issue, why did Labour in 9 years in office never bother having the same restrictions it seems to be talking about now on the balance of Air New Zealand shares held by the public?

Hon Phil Goff: Did it pass by the Prime Minister’s attention—

Mr SPEAKER: I apologise to the honourable Leader of the Opposition. There will be a little bit more reasonableness on both sides. It was very difficult for me to hear the Prime Minister’s first answer because of the noise on my left and it was difficult for me to hear the start of the Leader of the Opposition’s question because of the noise on my right. So I ask for a little bit more reasonableness.

Hon Phil Goff: Did the Prime Minister somehow miss that in the 9 years of the last Labour Government we sold off no assets to foreign corporates—in fact, we bought them back, such as New Zealand Rail, which was sold at a cheap price by a National Government, to the huge detriment of this country?

Rt Hon JOHN KEY: If Phil Goff thinks buying KiwiRail was a good deal for the taxpayer, I can see why he holidays in Greece these days.

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

Mr SPEAKER: I apologise to the member. Now, look, a point of order has been called. The House must respect our basic rules. We can have a passionate exchange—I should not say that—we can have a noisy exchange, but we will not ignore the basic rules of the House.

Hon Trevor Mallard: It is a simple point of order. The comments that the Prime Minister made about the private travel and family travel of the Leader of the Opposition clearly led to disorder and were designed to do so.

Mr SPEAKER: My dilemma is that I could not hear what the Prime Minister said in his answer, and that is my difficulty. If I had been asked to rule on whether the Prime Minister answered the first question, I could not do so, because I could not hear his answer. The solution to this is in the hands of the House. If the Speaker is to do his job, he must be able to hear. I ask members to be sensible about that. I cannot rule on something I simply did not hear.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I ask that you ask the technicians to have another look at the sound system, please. If we can hear it over here, the sound system cannot be working properly if you cannot hear it.

Mr SPEAKER: I also accept that maybe my ears are inferior to the member’s. I apologise if that is the case. The noise level simply makes it very difficult for me. I ask members to be more reasonable.

Hon Phil Goff: When the Prime Minister answered in the House yesterday that Treasury advice said that “widespread and substantial New Zealand ownership is achievable”, why did he not finish the very same sentence in which that advice was included, which went on to state: “but significant participation by foreign investors will be essential to achieve the Government’s overall objectives”? Why did he not reveal that advice to the House?

Rt Hon JOHN KEY: Because that advice has been in the public domain for quite some time and the Government rejects it. One bit of Treasury advice we do accept is that a capital gains tax at 15 percent on a rental property—

Mr SPEAKER: That is not acceptable. It had nothing to do with the question asked. The question asked was a fair question. That last part was unacceptable. Labour has just earned itself a further supplementary question.

Hon Phil Goff: Did Treasury advise him and his Minister of Finance that strong foreign ownership restrictions would lead to net benefits from sales not being realised, and is that why he is refusing to put strong restrictions on foreign corporate ownership of New Zealand and taxpayer-owned assets?

Rt Hon JOHN KEY: No, because we took the same approach that Labour did when it was in Government, and that was that it held 73 percent of Air New Zealand. It did not find any need for restrictions because, as those members know, those shares held in the public domain did not for the most part flow overseas.

Hon Phil Goff: When the Prime Minister said in the House yesterday: “Arrogance would be to take a position where one passes the law and carries it out without reference to the New Zealand public.”, does he believe that it is also arrogant for his Government to have banked the proceeds of the sale of the privatisation of those assets in this year’s Budget and to have spent $6 million of taxpayers’ money in scoping out the study for privatisation without any mandate at all from the New Zealand public?

Rt Hon JOHN KEY: No, but I do think it would be arrogant to go and try to tell the press gallery that a capital gains tax would raise $4.5 billion when, in fact, it will raise only $700 million. If it will raise $4.5 billion, then that said capital gains tax would have to be on a bach, a rural property, a commercial property, any rental property anyone owns, and any shares, and, by the way, that probably would not be happening because even then Labour would be polling under the Greens at that point.

Rahui Katene: Does he agree that iwi and hapū are attractive commercial partners for the Crown because of their intergenerational investment outlook; if so, what commitments can he give to iwi and hapū that they will have first right of response before any New Zealand - owned assets come up for consideration?

Rt Hon JOHN KEY: I do agree that iwi and hapū would be attractive, long-term shareholders. They will be given the same rights as other New Zealanders to be at the front of the queue. What iwi and hapū are demonstrating through their commercial arms is that they—like many, many other New Zealanders—through their KiwiSaver accounts, through the Crown financial institutions, and through their savings actually want to buy shares in well-performing New Zealand companies, instead of having failed finance companies to invest in, as was the case under a Labour Government.

Hon Phil Goff: When the Prime Minister, earlier this afternoon, said he was considering transferring shares from the taxpayer—the Government—to Crown financial institutions to aid in privatisation, how does that actually help the economy, particularly when Crown financial institutes pay more for their borrowing than the Government does?

Rt Hon JOHN KEY: We are not talking about transferring; we are talking about selling. This might come as a really novel idea to Phil Goff, but actually I reckon it is quite a good idea if the New Zealand Superannuation Fund buys shares in Genesis Power rather than buying them in an Australian energy company. I do not know about everyone else, but I happen to think that investing in New Zealand is a great idea.

Hon Heather Roy: Can he recall any precedents of previous Governments allowing New Zealand - owned and taxpayer-owned assets to be on-sold to foreign corporates; if so, which Ministers at the time were involved in the policy implementation?

Rt Hon JOHN KEY: I can recall that. I remember certainly Phil Goff and Annette King being Ministers in a Government that sold assets. I can remember Trevor Mallard being in Parliament. Mr Speaker if you will bear with me and just give me an extra few moments, I am happy to read the list. They would include New Zealand Steel, Petrocorp, Health Computing Services, DFC, the Post Office Savings Bank, Shipping Corporation, Air New Zealand, Landcorp Farming, the Rural Bank, the Government Printing Office, the National Film Unit, Communicate New Zealand, State Insurance Office, the Tourist Hotel Corporation of New Zealand, New Zealand Liquid Fuel Investment, and the forestry cutting rights—all of which added to a quick $9.761 billion flogged off by Phil Goff, who is now apparently opposed to asset sales.

Hon Phil Goff: Why—[Interruption]

Mr SPEAKER: I apologise to the Leader of—[Interruption] I say to the National frontbench that I have asked the honourable Leader of the Opposition to ask his question. It should be possible to hear it. I am sure the Prime Minister wants to hear it.

Hon Phil Goff: Why has not National learnt the lessons of history and the failures of past privatisation, unlike the last Labour Government, which sold no assets, knowing that the sale of some assets like New Zealand Rail led to asset-stripping, others like Air New Zealand led to a previously successful business being run into bankruptcy, and the sale by National of BNZ for a mere $1.5 billion has resulted in $12.5 billion worth of dividends flowing out of this country; why has he not learnt those lessons?

Rt Hon JOHN KEY: I actually think the Leader of the Opposition asked a good question. This Government has learnt those lessons. That is exactly why there will be a majority ownership held by the Government. That is exactly why Kiwi mums and dads will be at the front of the queue. I say this to the Leader of the Opposition in all sincerity: the investment portfolios around New Zealand have changed. Back in the late 1980s and 1990s, there were not 1.7 million KiwiSaver accounts. There were no Crown financial institutions. Those entities were actually not in the form they are today. What investors are looking for are genuine investments in New Zealand companies.

Hon Trevor Mallard: Don’t be stupid. What was the ACC?

Rt Hon JOHN KEY: Well, I say to Trevor Mallard that what they are not looking for is a capital gains tax on everything they may ever own.

Hon Phil Goff: Has he and his Government been advised by Treasury and other officials that the cost to the taxpayer of selling these assets could actually be between 2 percent and 9 percent of their value, which, if one takes the midpoint of those figures, means that he will be spending $340 million worth of taxpayers’ money just to flog off the assets to foreign corporates?

Rt Hon JOHN KEY: No. What we have actually been advised by Treasury is that the average cost of an initial public offering is about 7 percent. In the United States it is 3 to 4 percent. In fact, when Contact Energy was sold off, I think it was about 1.8 percent. That is exactly what we are working towards, and the member knows that, because in fact that advice was presented to his office some months ago when he was away.

Hon Phil Goff: I seek leave to table a letter to the Minister of Finance from the Crown Ownership Monitoring Unit dated 17 May 2011 that states that in New Zealand large initial public offerings in recent years have cost around 2 to 9 percent, which is the figure I quoted.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Government Financial Position—Operating Deficit

2. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: What reports has he received on the Government’s financial position?

Hon BILL ENGLISH (Minister of Finance) : This morning we released the Government’s financial statements for the 11 months to 31 May of the financial year. The operating deficit was $10.8 billion, about 1.3 billion below forecast due to higher than expected tax revenue and lower core Crown expenses.

Peseta Sam Lotu-Iiga: What impact are these early signs of progress in reducing the deficit likely to have on the Government’s finances for the full year ended 30 June 2011?

Hon BILL ENGLISH: It could be a small positive impact. The forecast now looks like the deficit could be $16 billion for the year, down from $16.7 billion. But $16 billion is still a very large deficit, and it simply underlines the need for good fiscal management, good expenditure control, and sound policy that will promote the growth of the economy and the growth of tax revenue.

Peseta Sam Lotu-Iiga: How did Budget 2011 improve the outlook for Government debt and deficits over the next few years?

Hon BILL ENGLISH: As a result of the measures in the Budget the Government now expects a surplus by 2014-15, and will borrow considerably less over the next 3 or 4 years—possibly up to about $10 billion less borrowing than was forecast in the 2010 Budget. The Government debt is expected to peak at under 30 percent of GDP, compared with 34 percent of GDP without the decisions of Budget 2011.

Peseta Sam Lotu-Iiga: How does the improved fiscal and debt outlook in Budget 2011 compare with the position that the Government inherited in late 2008?

Hon BILL ENGLISH: It is much healthier. The pre-election update in 2008 showed a decade of deficits and ever-rising debt. That was because New Zealand went into recession in early 2008, 9 months before the global financial crisis. Net debt in December 2008 was forecast to soar to 50 percent of GDP and never fall. The last Labour Government left a fiscal mess, and by making careful and considered decisions, this Government has tidied it up.

State-owned Energy Companies—Onselling Shares to Foreign Investors

3. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he agree with State-owned Enterprises Minister Hon Tony Ryall who told the Finance and Expenditure Committee “there’s going to be no guarantee about what happens with foreign ownership”; if not, what mechanisms would he put in place to stop the shares in energy companies which he plans to privatise from ending up in foreign hands?

Hon BILL ENGLISH (Minister of Finance) : I presume the Government would take the same approach as the Labour Government did when it floated a quarter of Air New Zealand on the New Zealand Stock Exchange. As far as I understand, most of those shares have not fallen into foreign hands.

Hon David Cunliffe: Given that the Minister has clearly taken no advice about the fact that Labour bought back shares in Air New Zealand rather than floated them, what official advice has he received on the percentage of any shares sold under his privatisation policy that would end up in foreign hands?

Hon BILL ENGLISH: Let us go through it: 51 percent will be owned by the Government, and who would know just what percentage—but we know it would be considerable—will be owned by the 1.7 million New Zealanders in KiwiSaver, the New Zealand Superannuation Fund, ACC, the Government Superannuation Fund, and Kiwi mums and dads? I guess the difference is this: we think Kiwis want to invest in New Zealand, and Labour thinks Kiwis want to sell out of New Zealand. They are wrong; we are right.

Hon David Cunliffe: Given that simply transferring the shares from the Crown’s own balance sheet to that of the New Zealand Superannuation Fund would be a merry-go-round at a higher cost of capital, and given that there is potential for mum and dad investors to onsell to foreign investors, how would he avoid a repeat of the partial privatisations in Queensland, where most of the shares bought by mum and dad investors ended up in the hands of foreign corporates?

Hon BILL ENGLISH: We just look at the experience of Contact Energy, which was floated in the late 1990s and still has the largest register of shareholders on the New Zealand stock exchange—shares still largely held by Kiwi mums and dads. Again, we think New Zealanders want to invest in New Zealand, and we back them to do that.

Hon David Cunliffe: Given that Contact Energy is now largely owned by a foreign multinational that bought its shares from mum and dad investors, can the Minister tell the House whether he met with China Investment Corporation, a State-owned Chinese company that signalled that it has $6 billion set aside to buy New Zealand assets shortly before the Budget was announced?

Hon BILL ENGLISH: Yes, I did visit China, and I did visit the Chinese Investment Corporation, along with the State Administration of Foreign Exchange, which manages $3 trillion of foreign reserves. I also met with two of the top six politicians in China, who will effectively become the leader and the deputy leader of China next year. I met with a number of New Zealand companies who operate in China, and a number of Chinese companies who want to operate or who do operate in New Zealand. They are very pleased with New Zealand’s economic policy, which is focused on taking the huge opportunities offered by the growing market of China.

Michael Woodhouse: What criteria were applied by the Government when considering foreign investment in Air New Zealand by the very successful mixed-ownership model under which it is operating?

Hon BILL ENGLISH: The largest foreign investment in Air New Zealand actually occurred in December 2002, under the previous Government, when Qantas paid $100 million for a minority shareholding. This was led by then Associate Minister of Finance Trevor Mallard. The Government set six criteria at the time, including the maintenance of effective control of Air New Zealand by New Zealand nationals. It noted that without the outside investment, there would be a real risk that the Government as principal shareholder would be called on for further substantial funds, diverting Government expenditure away from higher priorities in health and education. The Opposition seems to have forgotten that when in Government it sold a chunk of Air New Zealand to Qantas, and that it was happy to do that because it maintained effective control—that is the mixed-ownership model.

Hon David Cunliffe: Is one of the reasons that the Minister met with the China Investment Corporation the fact that Treasury has advised that a significant proportion of foreign ownership is essential for the success of its partial privatisation plan; if so, what arrangements did he make with that Chinese investment fund to participate in that privatisation?

Hon BILL ENGLISH: The answer to that is absolutely no.

Mr SPEAKER: Question No. 4, Aaron Gilmore. [Interruption] I want to hear from the member at the back of the House. [Interruption] Have both front benches quite finished?

Tax System Changes—Investment Properties

4. AARON GILMORE (National) to the Minister of Finance: What changes has the Government made to the tax treatment of investment property to increase fairness and help rebalance the economy towards productive investment?

Hon BILL ENGLISH (Minister of Finance) : The Government inherited a flawed property tax regime that contributed to the excessive property boom of the last decade. So in last year’s Budget we stopped claims for depreciation deductions, tightened rules on loss attributing qualifying companies, prevented property investors from using rental losses to inflate their eligibility for Working for Families, and cut the top personal tax rate, reducing the value of losses that higher-income earners can claim on property investments.

Aaron Gilmore: What extra resources has the Government provided to the Inland Revenue Department to help ensure that property speculators pay their fair share of tax?

Hon BILL ENGLISH: People who trade in property, of course, have to pay tax on their profits, and we need to make sure that they do. The Budget last year provided the Inland Revenue Department with $119 million over 4 years to target property speculators who were not paying. This investment has paid for itself in the first year, with $115 million of new tax assessments in the last 9 months. The extra funding has also been used for audits centred on the hidden economy, where people tend to do cash transactions to avoid paying tax.

Aaron Gilmore: What other options did the Government consider for tightening tax rules on property investors?

Hon BILL ENGLISH: We considered a number of options that were worked through by the Tax Working Group, including a comprehensive capital gains tax. However, we decided against a capital gains tax, for several reasons: it would make the tax system much more complex to administer, it would raise virtually no money for several years, and it would encourage taxpayers to hold on to assets for longer to avoid tax. Far from raising $4 billion, as I think the Opposition claimed, even a 15 percent capital gains tax on rental property will raise only $700 million, which will not pay for even half of its other tax promises.

Aaron Gilmore: What reports has he seen of alternative tax policies?

Hon BILL ENGLISH: I have seen what I think was an announcement that a 15 percent capital gains tax applied to investment properties would raise $4.5 billion. This is simply not correct. A 15 percent tax of that nature would eventually raise $700 million. In fact, it would probably take 15 years before it raised $700 million. The other big problem for a capital gains tax is that house prices are flat or falling, so it is quite possible that one could bring in the tax and raise nothing.

Capital Gains Tax—Investment Properties

5. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he agree with the findings of the Savings Working Group which found that the favourable tax treatment of property investment accounted for about 50 percent of house price increases from 2001 to 2007?

Hon BILL ENGLISH (Minister of Finance) : Yes, to some extent we did agree with them. It is likely that it was a contributing factor, and that was why we moved to increase the effective tax rate on property investors by reducing depreciation deductions; adjusting the loss attributing qualifying company rules; tightening Working for Families definitions to exclude losses on property investment; reducing the top tax rate, which significantly reduces the value of losses they can claim and, therefore, the tax they can get back; and giving increased funding to the Inland Revenue Department to target property speculators who are avoiding property tax.

Dr Russel Norman: Does he—[Interruption]

Mr SPEAKER: I ask both front benches to show some courtesy—[Interruption]

Dr Russel Norman: Another supplementary question, I think, Mr Speaker.

Mr SPEAKER: The House will settle.

Dr Russel Norman: One from each side, maybe.

Mr SPEAKER: We will not have any more interjections, even though they might be helpful like that one. I say to both front benches that it is unacceptable to continue interjecting. Both front-bench members were doing it in a blatant fashion.

Dr Russel Norman: Does the Minister disagree, then, with the recommendations from the Savings Working Group, Treasury, and the OECD, which have all found in favour of a capital gains tax—

Hon David Parker: And the IMF.

Dr Russel Norman: —and the IMF—in order to put downward pressure on house prices?

Hon BILL ENGLISH: Yes, we did disagree with the recommendations. If we had agreed with them, we would have implemented a comprehensive capital gains tax. But I have to say that house prices are flat or falling, generally, and that will assist with the rebalancing of this economy towards a focus on exports, investment, and savings and away from excessive property speculation.

Dr Russel Norman: Why does the Minister continue to insist that a capital gains tax would be too complicated, when they can manage it in the United States, China, Denmark, Finland, France, Germany, Poland, Singapore, Sweden, Switzerland, the UK, and Japan, and when even the Australians can do it; what is he implying about New Zealand—that it is too complicated for New Zealand?

Hon David Cunliffe: Tell us about Southland.

Hon BILL ENGLISH: Do not tempt me! The Tax Working Group looked at capital gains taxes as they operated in all those jurisdictions, and, on balance, actually decided not to recommend in favour of a capital gains tax. The other significant reason is that actually it does not raise much revenue in the shorter term. As I said, even the proposal we have heard could take up to 15 years to raise $700 million worth of revenue, and when the market is flat or falling, it could possibly raise no revenue at all.

Dr Russel Norman: With reference to the flat housing market, does he agree with Fran O’Sullivan, who recently said that now is the best time to introduce a capital gains tax—when house values are relatively static—and that “It is quite simply a nonsense to continue to run a system which protects the asset-rich …”?

Hon BILL ENGLISH: Well, I think the reason she is advocating that is that for the foreseeable future the readers of the New Zealand Herald would not be paying any capital gains tax, because there is no capital gain. That is a problem for a party that is proposing the tax as a way of paying for other, very expensive promises. This tax would raise almost no revenue. They would have to find some other way to pay for several billion dollars worth of promises.

Capital Gains Tax—OECD Report

6. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he agree with the OECD which found in April this year that “New Zealand is one of the few OECD countries with no comprehensive capital gains tax on any asset class” and that this “favourable tax treatment of housing” should be removed to lower house prices, lower wealth inequalities, and level the playing field for saving and investment decisions?

Hon BILL ENGLISH (Minister of Finance) : We do agree that New Zealand has no comprehensive capital gains tax, and generally we agree with its objectives, and we have chosen other means to achieve those objectives.

Dr Russel Norman: Does he agree with John Walley from the New Zealand Manufacturers and Exporters Association—

Hon Members: Who?

Mr SPEAKER: Order!

Dr Russel Norman: Definitely an extra supplementary—

Mr SPEAKER: No.

Dr Russel Norman: Does he agree with John Walley from the New Zealand Manufacturers and Exporters Association, who said recently: “A balanced tax system including taxation on property is needed so that capital is used to invest in revenue and job generating businesses …”; if so, why does he continue with a tax system that has this bias for housing speculation?

Hon BILL ENGLISH: I do remember agreeing with him once. Look, we share with Mr Walley the objective of moving this economy to an export-orientated economy built on higher savings, high-quality investment, and high productivity. The Government has taken a number of very significant measures to achieve that, including major tax reform. In that context, we made the decision that there were means of achieving a correction in the taxation of property other than a capital gains tax. As I said, the big problem here is for the Opposition to come up with a high-enough rate of capital gains tax covering a broad-enough base to pay for the very expensive other promises that they have made.

Dr Russel Norman: Why does the Minister reject the advice from the Tax Working Group that a capital gains tax, excluding the family home, would raise $4.5 billion a year, which was in its report, whereas on the other hand he is willing to accept its advice that a capital gains tax is too complicated; why does he not accept its number, $4.5 billion, but is happy to accept their recommendation not to proceed?

Hon BILL ENGLISH: In respect of the number, I understand that it was based on what we call an accrual regime, which means that any uplift in value is taxed each year, regardless of whether the property has been sold. A realisation-based tax, which is when we pay when we have the money, would realise quite a lot less money. The group most harshly affected by the regime that Labour is proposing is superannuitants, who have low cash incomes but would have to come up with tax to pay accrued capital gains. The only saving grace is that in current conditions there is almost no capital gain, so they would not have to pay, but it means that Labour would get no revenue from it.

Dr Russel Norman: Why is he ignoring the advice of the OECD, Treasury, the IMF, and the Savings Working Group, which have all found that New Zealand is now an outlier in not having a comprehensive tax on capital gains, the absence of which seriously undermines Government revenue and the competitiveness of our productive sector, which he has repeatedly said is central to his economic strategy?

Hon BILL ENGLISH: I am pleased to see the Greens are now starting to take notice of mainstream economic advice. It has taken a while. I had not expected the Greens to be quoting Treasury and the IMF, but there you go. As I said, we share their objectives but we have found different means of achieving them.

New Zealand Trade and Enterprise—China Beachhead Advisory Board

7. Hon DAVID PARKER (Labour) to the ActingMinister for Economic Development: Does he stand by all his answers to Oral Question No 8 yesterday?

Hon DAVID CARTER (Acting Minister for Economic Development) : Yes, I do.

Hon David Parker: Is the Minister aware that the total trade deficit with China since his Government came to office is $4.6 billion?

Hon DAVID CARTER: No; I do not have that figure with me. I am aware that trade exports to China have grown from $2.3 billion to $5.5 billion since 2008, and that is a remarkable rate of growth, of around 140 percent. It is an absolute success story.

Hon David Parker: Is the investment balance with China positive or negative, or, in other words, every year is China buying more of New Zealand than New Zealand is investing in China?

Hon DAVID CARTER: I know that the member is totally opposed to foreign investment. What I was talking about yesterday was the performance of New Zealand Trade and Enterprise in raising the amount of exporting by New Zealand companies to China. It has been remarkably successful—something that the member does not seem to be prepared to accept.

Hon David Parker: I raise a point of order, Mr Speaker.

Mr SPEAKER: Before I call the honourable member, I say that the question had no particular political content. The question simply asked, if I recollect correctly, whether the investment balance between New Zealand and China was positive or negative, or whether China was buying more—I cannot remember the exact words. If the Minister did not have those particular figures, that is one thing, but then to criticise the questioner in the way he did, by saying that the member does not like foreign investment, is not acceptable. I invite the Hon David Parker to repeat his question.

Hon David Parker: Is the investment balance with China positive or negative, or, in other words, every year is China buying more of New Zealand than New Zealand is investing in China?

Hon DAVID CARTER: I do not have figures as to the investment balance between China and New Zealand.

Hon David Parker: The projections in the Budget show the current account deficit getting worse every year, from here on, and New Zealand’s net investment position getting worse every year, from here on, so both deficits are expected to worsen; does this not show that the China beachhead board resignation is indicative of a wider problem for New Zealand?

Hon DAVID CARTER: No, it does not. The resignation by the beachhead board occurred simply because there was a significant clash of personality between the management of New Zealand Trade and Enterprise in China and the beachhead board. The beachhead board delivered an ultimatum to New Zealand Trade and Enterprise stating that if the board was to remain as the current board, it would require a change of management staff of New Zealand Trade and Enterprise in China. The chief executive of New Zealand Trade and Enterprise was not prepared to accept that ultimatum, and therefore the board resigned en masse.

Hon David Parker: Did a member of the New Zealand Trade and Enterprise board cause or contribute to the mass resignation of the China beachhead board; if so, who was that board member?

Hon DAVID CARTER: I am not aware of any board member of New Zealand Trade and Enterprise causing the resignation of the beachhead advisory board. What happened, as I have just explained to the member, is that the beachhead advisory board was attempting to decide who should be the management personnel of New Zealand Trade and Enterprise in China. It is not appropriate for an advisory board to attempt to manage the operations of New Zealand Trade and Enterprise.

Greenhouse Gas Emissions and Food Security—Global Research Alliance

8. COLIN KING (National—Kaikōura) to the Minister of Agriculture: What recent steps has the Government taken to progress international research into agricultural emissions and food security?

Hon DAVID CARTER (Minister of Agriculture) : Recently Tim Groser and I attended the inaugural ministerial summit of the New Zealand - led Global Research Alliance on Agricultural Greenhouse Gases in Rome. The summit was a resounding success, with 36 countries signing up to the alliance and its aims of bringing together countries to work on solutions to reduce agricultural emissions whilst producing more food. The success of the alliance and its endorsement by countries such as Brazil, China, and the United States is a significant coup for New Zealand, and shows that this Government is serious about taking practical steps to reduce agricultural greenhouse gas emissions without crippling our vital food-producing sector.

Colin King: What further support has New Zealand provided to the Global Research Alliance on Agricultural Greenhouse Gases?

Hon DAVID CARTER: At the ministerial summit I was pleased to announce that New Zealand will establish a $25 million international fund to support research on mitigating agricultural greenhouse gas emissions. The fund is aimed at bold research efforts that must have people working across disciplines and across borders, but must include a New Zealand partner.

Colin King: Why has the Global Research Alliance on Agricultural Greenhouse Gases received such a high level of international support?

Hon DAVID CARTER: There is clear international consensus that the two biggest challenges to face the world are food security and climate change. The Global Research Alliance on Agricultural Greenhouse Gases squarely addresses both of these challenges through its voluntary, pragmatic nature and its focus on scientists, not politicians. That is why 36 countries from France to South Africa, Brazil, the United Kingdom, and Korea are strongly supportive. All of them praise New Zealand’s leadership in turning the Global Research Alliance on Agricultural Greenhouse Gases into a reality.

Earthquakes, Canterbury—Property Equity

9. Hon LIANNE DALZIEL (Labour—Christchurch East) to the Minister for Canterbury Earthquake Recovery: Does he stand by his statement on 7 October last year that “the people of Canterbury who have suffered property damage can take heart…that the equity they believed they had in their properties prior to the 4 September event is preserved”; if so, why?

Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake Recovery) on behalf of the Minister for Canterbury Earthquake Recovery: He stands by the statement he made on 7 October. No one could have predicted the 22 February event. The 23 June offer to purchase in the most damaged areas at the 2007 rating value is a fair one.

Hon Lianne Dalziel: Does he then stand by his statement of 8 March this year, after the 22 February earthquake: “But right from 4 September I’ve repeatedly said that what we have to do is protect the equity that people think they have got in their properties”; and will he now admit that the Government’s offer fails to achieve that for many of those who will be receiving the Government’s offer, as evidenced by 17 emails I received after the Government leaked the announcement but before it was made?

Hon MAURICE WILLIAMSON: I think it is fair to say that the Government believes the offer we have made is a fair and balanced offer that in the vast bulk of cases will achieve the aim the member wants. As the Minister has said on a number of occasions, the exact technical details of the package are still being worked through.

Hon Lianne Dalziel: Why has he not yet advised property owners that they still have the option of taking the Earthquake Commission cash settlement for the land if it is higher than the 2007 rating value for the land, and will the amount of the cash settlement that that would entail be included in the letter of offer so homeowners can make an informed decision?

Hon MAURICE WILLIAMSON: I do not want to pre-empt anything about details that will go to homeowners. I can assure the member that they will be informed of all of the details of the offer, and then they will have up to 9 months to make a determination as to whether they accept it.

Brendon Burns: When the Minister said on 15 June that “we need to make sure that when we’re protecting equity in one place, we are also protecting in the places where we won’t have the same outcome.”, did he intend to include examples like that of my constituents who will be offered $90,000 less than the mortgage on their Avonside home, which had a market value when bought well above the 2007 rating valuation; if so, why did he not refer to negative equity?

Hon MAURICE WILLIAMSON: I can tell that member of an experience I had with the Weathertight Homes Resolution Service, and that is that whenever a global offer is made, there will be cases that are outliers and are difficult—

Hon Trevor Mallard: Outliers?

Hon MAURICE WILLIAMSON: Well, they can be. This offer the Government has made is, in our view, a fair and balanced offer, and it cannot incorporate every individual case the member is referring to.

Brendon Burns: Is the Minister aware that section prices across Christchurch can start at around $150,000, which can be $50,000 above current land valuation in red zone areas, and will that not mean that red zone property owners will need to borrow considerably to resettle, rather than being able to use preserved equity, as he repeatedly suggested?

Hon MAURICE WILLIAMSON: I think it would be really wrong for me to comment on the land prices of various sections. All I can say is that I think the Government’s offer, which takes into account the rating value as of 2007, is a fair and balanced offer.

Hon Ruth Dyson: Does he consider the allocation of the value of the land within the rating valuation process to be robust, when it has produced such variable outcomes, leaving many in the red zone with insufficient funds to buy a section to take advantage of the replacement option in their insurance policy?

Hon MAURICE WILLIAMSON: The offer the Government announced on 23 June took a lot of time to work through. The details were carefully considered and the final offer was considered to be a fair and balanced package. It is fair to say that there will always be a specific case that members in this House can raise when people may have paid a higher price for their property or whatever, but in general the package the Government has offered is fair and balanced.

Hon Ruth Dyson: When will he announce the appeal process for those who wish to challenge the valuation?

Hon MAURICE WILLIAMSON: I do not believe that that date has yet been set.

Hon Lianne Dalziel: I seek leave to table a summary that I have put together of the 17 emails I received the night before the Government made the offer announcement public.

Mr SPEAKER: Leave is sought to table that document prepared by the member. Is there any objection? Did I hear objection? No, there is no objection.

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

Hon Lianne Dalziel: I seek leave to table the transcript taken from the Campbell Live interview with Gerry Brownlee, to which—

Mr SPEAKER: No, we do not seek leave for that. The House let the member table a document that she had prepared, but we do not seek leave to table transcripts from broadcasts.

Royal Society of New Zealand—Meetings with Minister

10. Hon HEATHER ROY (ACT) to the Minister of Science and Innovation: How many times has he met with the Royal Society of New Zealand and what issues were discussed at these meetings?

Hon Dr WAYNE MAPP (Minister of Science and Innovation) : I have met formally or attended functions with the Royal Society 11 times as the Minister of Science and Innovation. In addition, I have frequently met informally with members of the Royal Society board and management team at various science events. I have discussed a broad range of topics, including, in fact, the Royal Society of New Zealand Amendment Bill. This is an excellent bill, which has the unanimous support of the House and the especially devoted attention of members opposite. I can only assume that Mr Grant Robertson thinks that the volume of speaking is one way to—

Mr SPEAKER: It is not the member’s responsibility what Mr Grant Robertson might think—or not think.

Hon Heather Roy: During these meetings has the Royal Society expressed concern over the deliberately slow progress of the Royal Society of New Zealand Amendment Bill, especially considering the bill’s cross-party support; if so, what concerns has it expressed?

Hon Dr WAYNE MAPP: The Royal Society is, of course, a very proper organisation, and its members would never seek to influence Parliament. However, I can say informally that they are somewhat bemused as to what is happening. They apprehend that they are in the grip of forces beyond their control. They ask: “When will the bill pass?”. They wonder, and I have said: “With a bit of luck, this year, or maybe next.” As befits the detailed and forensic analysis of the humanities, Mr Hodgson, Mr Robertson, and Mr Shearer have spent more than half an hour on whether—

Mr SPEAKER: The member will resume his seat. He has no responsibility for Messrs Hodgson or Shearer, or anyone else in the Labour Party.

Hon Heather Roy: What advice or guidance has he given the Royal Society about progressing the bill more quickly in light of the Labour Party delaying its own bill?

Mr SPEAKER: The Minister has no responsibility whatsoever for the member’s bill.

Hon Heather Roy: I raise a point of order, Mr Speaker. The question was in response to the answer to the previous supplementary question, which was within the parliamentary guidelines, I think. It was asking what advice or guidance he might have given the Royal Society in response to the conversations he has just reported on, and I would have thought that it would be within the Standing Orders.

Mr SPEAKER: I will accept the member’s question. She may repeat the question, but the Minister will need to be careful in answering it.

Hon Heather Roy: What advice or guidance has he given the Royal Society about progressing the bill more quickly in light of the Labour Party delaying its own bill?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. My submission to you is that you were right in your first ruling, and the fact that you allowed the Minister to stray outside his area of responsibility earlier does not mean that a supplementary question that is not within the Standing Orders should be allowed.

Hon Simon Power: My recollection is that the question was: “What advice has he given to the Royal Society” in respect of a particular issue. That is within his responsibility as a Minister with responsibility in the science and innovation area.

Hon Trevor Mallard: This is not a matter of science; it is a matter of legislation that is the responsibility of my colleague Grant Robertson. It is not this Minister’s responsibility. It might be that Minister’s responsibility, but not this one’s.

Mr SPEAKER: I have heard sufficient on the matter, and I am persuaded by the Hon Trevor Mallard’s view that the Minister can be questioned only on advice he has given in areas of his responsibility, and he is not responsible for this legislation. My first instinct, I believe, was correct, and I must rule accordingly. What I am prepared to do, though, as the member has no further questions, is give the member a chance to ask a question that is within the Standing Orders.

Hon Heather Roy: What affiliate members of the Royal Society has the Minister met with, and do they also have concerns about progress on legislation before Parliament that might affect them?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Again, that is outside his responsibility. The question asked who he has met with, and that is fine. But asking about their concerns—not whether they have advised him or anything like that—is not his responsibility.

Mr SPEAKER: I think the Minister can answer the first part of the question. Does he recollect the first part of the question?

Hon Dr WAYNE MAPP: Yes, I do.

Mr SPEAKER: Could the Hon Heather Roy please repeat just the first part of the question?

Hon Heather Roy: What affiliate members or those associated with the Royal Society of New Zealand has he also met with and given advice to, and what might that advice be?

Hon Trevor Mallard: No, that’s not what she said before.

Mr SPEAKER: The Hon Dr Wayne Mapp, in the interests of making progress, may answer that question.

Hon Dr WAYNE MAPP: Yes, I have met with affiliate members and board members. I have to say that the issue on their minds is when the bill will pass.

Grant Robertson: Has he seen a copy of the memorandum of understanding between the Royal Society of New Zealand and the Council for the Humanities, dated 9 February 2010, which states that they hope to pass the legislation referred to in the primary question within 5 years?

Hon Dr WAYNE MAPP: No, I have not seen that memorandum, but I say this: I do not think that was seen as an invitation to spend the entire year debating the legislation.

Grant Robertson: I seek leave of the House to table the memorandum of understanding between the Royal Society of New Zealand and the Council for the Humanities, dated 9 February 2010, which gives them 5 years to pass the legislation.

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

Education, National Standards—School Charters

11. SUE MORONEY (Labour) to the Minister of Education: How many schools failed to submit a National Standards-consistent charter to the Ministry of Education before last Friday’s deadline?

Hon ANNE TOLLEY (Minister of Education) : It is impossible to completely answer that question, because the Ministry of Education has not yet assessed all the charters. However, I am advised that by 5 p.m. on 1 July, 1,886 of the 2,075 English-medium schools with students in years 1 to 8 had submitted their charter. That compares with 1,058 submitted by 1 July last year. Initial assessments of 1,445 of this year’s charters indicate that 87 percent were compliant. I am also advised that each year over the last 10 years a number of schools have not even submitted a charter, but because the last Government never bothered to check them, no one even knows how many of those there were.

Sue Moroney: Does she agree with Mary Chamberlain from her Ministry of Education, who told Radio New Zealand National’s Insight programme on the weekend that it would take 2 years to get to the point where even 80 percent of teacher judgments would be consistent, using national standards?

Hon ANNE TOLLEY: Yes. That is not represented in the charters, but yes, it is right. This is a 3-year implementation programme and we are halfway through it. This year the focus is on the moderation of overall teacher judgments.

Sue Moroney: Is the Minister confirming, then, that 20 percent, or one in five, of our children will be incorrectly assessed under national standards even after 4 years of implementation?

Hon ANNE TOLLEY: I raise a point of order, Mr Speaker. This is very wide of the primary question, which was about the charters that schools submitted. I am happy to answer it, but I am making this point because if I answer the supplementary question, the debate widens. [Interruption]

Mr SPEAKER: A point of order has been called. I accept that the question is a little removed from the primary question, but I do not think it is out of order in that regard. I think what that may affect is the Minister’s ability to answer it in detail. That is the risk when members move a bit away from the primary question. But I do not think it is so far away that I should rule it out. Sue Moroney may repeat her question.

Sue Moroney: Is the Minister confirming, then, that 20 percent, or one in five, of our children will be incorrectly assessed under national standards even after 4 years of implementation?

Hon ANNE TOLLEY: No. What I can confirm is that that member’s Government sat back and watched for 9 long—

Mr SPEAKER: Order!

Hon ANNE TOLLEY: —years—

Mr SPEAKER: I am not seated very far from the Minister. The Minister should have seen that I was on my feet. I am not sure whether the question deserved quite that answer. I accept that it was somewhat provocative, but I believe that the Minister went to some extreme there in answering that question. Although I will let her get away with it this time, I do not want there to be a repeat of that.

Sue Moroney: If the Minister accepts that Mary Chamberlain is correct in saying it will take 2 years to get to the point where even 80 percent of teacher judgments will be consistent using national standards, does that not mean that 20 percent will be inconsistent, leading to one in five of our children having incorrect assessments under national standards?

Hon ANNE TOLLEY: No, I do not follow that logic. I say to the member that national standards are a huge step forward in trying to identify those students who are not progressing as they should be. This Government is not prepared to tolerate children failing in our education system, which they had continued to do under that member’s Government.

Louise Upston: What feedback has she had from parents at one of the schools that claim not to have a compliant charter?

Hon ANNE TOLLEY: I have recently seen a letter that was sent by a parent to the New Zealand Educational Institute—the political wing of the Labour Party—which said her son’s previous school report had stated: “He was a pleasure to have in class, and was achieving fine.” Lo and behold, his first national standards report showed that the parents should be concerned. This mother said: “National standards assisted by supplying evidence-based data on our child’s achievement trail and that the lack of achievement that could be taken to medical practitioners. And now, success. It is: ‘Mum, I’ve finished my writing and I’ve moved up in my maths group.’ ” Good on him and his mother! This mother said to the New Zealand Educational Institute: “Maybe you need to expand your vision and find the balance and consider my son, who would have been another lost child in the past system. I welcome national standards.”

Sue Moroney: Does she stand by her threat that she made in the New Zealand Herald—

Mr SPEAKER: I apologise to the member. Both sides have been very noisy today, but I must be able to hear the supplementary question.

Sue Moroney: Thank you, Mr Speaker. Does she still stand by her threat that she made in the New Zealand Herald in December 2008 to dissolve the board and put in a commissioner if schools refused to implement national standards, and how does she intend to carry that out, given that at least 140 schools have refused to implement her standards?

Hon ANNE TOLLEY: There is a process that we are working through to help these boards to develop compliant charters, and the next step is to appoint an adviser under section 78K of the Education Act 1989 to assist these schools. We are in no position yet to determine whether we do need to step in and replace the board.

Trade, New Zealand - Korea—Mutual Recognition Agreement and Secure Exports Scheme

12. MELISSA LEE (National) to the Minister of Customs: What reports has he received on the facilitation of trade between New Zealand and the Republic of Korea?

Hon MAURICE WILLIAMSON (Minister of Customs) : More good news. The recent signing of a mutual recognition agreement, or MRA, between New Zealand and the Republic of Korea will bring significant benefits to New Zealand exporters. The mutual recognition agreement was signed at a World Customs Organization council meeting in Brussels on the weekend of 25-26 June. I expect that the agreement will become operational on 1 January next year. The Korea mutual recognition agreement is New Zealand Customs Service’s third such agreement; the other two are with the United States and Japan.

Melissa Lee: What benefits does this agreement give to New Zealand’s Secure Export Scheme exporters to the Republic of Korea?

Hon MAURICE WILLIAMSON: The mutual recognition agreement allows New Zealand members of the Secure Export Scheme to have their goods processed faster at the Republic of Korea’s border, and they can receive front-of-line priority, which therefore gives them quicker access to the Korean market. In the last year New Zealand exported nearly $1.4 billion worth of goods to Korea by sea. Exports from Secure Export Scheme members made up 37 percent of that figure. The mutual recognition agreement is an important contributor to strengthening trade ties with Korea while our countries negotiate a bilateral free-trade agreement. The Government is looking forward to concluding that agreement at the earliest possible opportunity.

General Debate

Hon BILL ENGLISH (Minister of Finance) : I move, That the House take note of miscellaneous business. So we now have Labour’s grand plan to walk backwards into the future on the crutch of a new tax. Nothing has changed. They have not apologised. It is the same stuff as they got thrown out for—tax and spend. Nothing has changed. It is more spending that then needs more tax, which is bad for the economy and means less growth and lower incomes. Last time Labour was in Government it took until 2004, but it nailed it. After 2004 that is what happened. It was all set out in the Budget: more spending, more tax, slower growth, and lower incomes.

There will be a choice: National, which wants to grow the economy and lift incomes by selling more of our excellent and competitive products to the rest of the world, and Labour, which just wants more tax so it can grow the Government. We want to grow the economy and the country, and Labour wants to grow the Government, just like it did last time. Until Labour members apologise for that, New Zealand is not going to listen.

Let us go through the numbers. Labour has a very big fiscal hole to fill. What creates this huge hole is the tax-free zone, taking GST off fruit and vegetables, and having no mixed-ownership model. One can take a guess, but it is somewhere between $10 billion or $12 billion and $15 billion. Labour members say they will come back with the details, but it is somewhere between $10 billion and $15 billion, because they have also said they will reduce debt at the same rate as the 2011 Budget. So they have to find $10 billion to $15 billion to fill the hole, and they are arguing that Phil Goff’s capital gains tax will find $4 billion.

Well, let us go through the $4 billion figure first. It was from the Tax Working Group and was based on normal income tax rates. Labour is proposing 15 percent, so that cuts the revenue almost in half. It will not be taxed at 33c and 24c; it will be taxed at 15c. That drops the figure of $4 billion to almost half. Then, that figure was based on an accruals regime, where one pays as the asset’s capital value goes up—unrealised gains—not when one sells the asset. Labour will be forced to a realisation model because low-income owners cannot pay capital gains tax if they have no money. This applies particularly to older New Zealanders who invest in investment housing and who need the income to live on. Labour will be forced to a realisation model and that will cut the revenue even further. So Labour has got it from $4 billion down to $2 billion and we have not done the work on that yet in detail, but we will.

Then there is the very simple problem that the current Government’s property tax measures have been so effective that there is no capital gain in the housing market. So even if Labour could implement this tax, it is quite possible that because of the Government’s tax measures taken so far, which we talked about in detail in question time, and because the world has changed with regard to the availability of credit—that is, the ability to borrow to fuel a speculation bubble—there will be no capital gain in the next 5 years. Labour may have taken account of that, because the $4 billion figure actually takes 15 years to happen. Even if it is taxed at normal income rates on an accrual basis where people pay every year and there is a historical average increase in capital value, it would take 15 years to get to $4 billion.

So how will Labour fill the $12 billion hole? They say they will fill it with a tax on something that might not happen, and even if it did, it would take 15 years to get to $4 billion to fill next year’s $12 billion hole.

Hon PHIL GOFF (Leader of the Opposition) : When Bill English became the Minister of Finance in 2008, he inherited 9 years of Budget surpluses from a Labour Government. He was so impressed that in his first speech, in December 2008, he admitted to the country that the country’s books were in reasonable shape. He said there was a global financial crisis but that this was the rainy day New Zealand had been preparing for. After three Budgets, each of which has run record deficits, today we had the new financial statement from the Government of New Zealand—the new financial statement. It is just a couple of months since the Budget. The Budget showed us that there would be a $16.8 billion deficit, and these financial statements tell us that the gross debt will get worse by over $3 billion, I say to Mr English. Gross debt is worse now since the Budget and it is going to be worse by a further $3 billion, and we know that the deficit will be $20 billion higher than at this time last year.

What frightens me, and any New Zealander who is interested and concerned about the future of his or her country, is that there is no plan to tackle that debt problem. Mr English is a Minister who borrows and hopes, because there is no plan, unless, of course, we count the flogging off of New Zealand assets overseas. That is really going to help! I looked at the Budget document, because I thought that if we were selling our most valuable assets, surely it would show that over time our debt problem would get better, not worse. What does this Budget statement, produced by Mr English, actually show the country? It shows the country that in 5 years’ time the trend of our debt is not to get better; our net debt will double over the next 5 years. In the next 5 years, Mr English’s achievement will be to double New Zealand’s debt.

Where is the plan? I am not the only one asking that question, because Jenni McManus, in one of the Saturday newspapers, wrote an article after interviewing the 40 top business leaders in this country—the natural constituency for the National Government, right of centre. What did they say? They said overwhelmingly that they had “no confidence that the Government had a clear economic strategy or vision to guide its policy-making.” That is the judgment of 40 top industry leaders. What else did they say? They said that this National Government has squandered its opportunities and that it has been “tinkering around the edges instead of tackling the big … issues”. I say to Mr English that when unemployment is at 40 percent among young Māori in Northland, he has no plan to tackle that. I say to him that when 10,000 houses need to be rebuilt in Christchurch, and the number of apprenticeships is going down, and the number of industry traineeships is going down, there is no plan to upskill New Zealand. I say that if we want to get out of the hole that New Zealand is in, by making a smart, innovative economy, then we increase research and development expenditure; we do not slash it like Mr Key and Mr English did in cutting the research and development tax credits that were so valuable for the future of this country.

Those industry leaders are right: there is no plan. It is not a plan when New Zealanders are faced with a rising cost of living to increase that further with a GST increase that the Government promised never to introduce, and then give tax cuts to the most wealthy people in this country, while low and middle income people did not get enough to meet the increased cost of living. That is not a plan to improve the situation of New Zealanders. It is not a plan to increase the well-being of our economy by selling off assets that are more valuable to keep in terms of their dividends for New Zealanders than they are to flog off to foreigners. It is not a plan, I say to Mr English, to sell off New Zealand farmland, increasingly, to overseas buyers. When we see another $33 million worth of land in Dipton being flogged off to German investors, I ask Mr English where his plan is for New Zealand to own its future.

Hon STEVEN JOYCE (Minister of Transport) : That speech was from a member of the party that gave us the decade of deficits and from a member of the party that gave us a productive sector in recession for 5 years before it left office. Apparently, it is supposed to be seen as part of the solution at this point, but it is the problem. There is an interesting thing about the bit of paper that the Leader of the Opposition was waving around. He might have said that the article rated National five out of 10, but it also said that the Labour Party was a waste of space and irrelevant. I would not be getting up and quoting that article, if that was the big endorsement that the Labour Party was looking for.

We need a competitive economy to grow in this country, and that means a number of things. If the Opposition wants a plan, here is one: a competitive tax system. That would be a great thing, and that is what this Government has delivered. This Government has delivered more infrastructure for this country, which will help our growth and productivity. It has delivered better results from education, not just money being tipped in the front end. Actual accountability for that money is very important, and that is part of the plan. The plan includes more free trade, less red tape, and a much more productive public sector. That is what this Government is delivering, and Labour opposes pretty much all of it. Labour is against a competitive tax system, and that is even more obvious today. It is against infrastructure investment. Labour is interested in it in theory, but it opposes all of the moves that we are making in practice. Out the front of Parliament today, Labour MPs were once again opposing infrastructure development in New Zealand.

Labour opposes accountability in education. Labour wants to just tip more money into skills training and more money in the front end. It does not care about whether we get anything out of it. Labour members think that as long as they get a headline with their funding, then they are OK. Research and development tax credits actually do not achieve anything except to shift money from one side of a company’s accounts to another, but Labour members think that is a good idea because they feel good about it! Now, apparently, more tax is the answer. More tax is the answer from the Labour Party, and it is an appalling answer. Labour proposes a capital gains tax for New Zealand, and it quotes the Tax Working Group on that. That capital gains tax that the Tax Working Group proposed was 30 percent on capital gains, not just on investment houses, but also on commercial properties, on farms, on shares, and on investment properties. That is what the $4.5 billion—

Hon David Parker: It was not 30 percent.

Hon STEVEN JOYCE: It was 30 percent on average across those—go back and read it, I tell Mr Parker. That is what it says, and that is an outrageous imposition. Labour says it wants a competitive economy, yet its solution is more tax on the productive sector. That is why those guys got thrown out. They got thrown out because they crippled the productive sector, and now they are saying “Elect us, and we’ll cripple you again!”. That is Labour’s solution; that is Labour’s answer.

The Labour Party is all about going backwards. It wants to go back to the heyday of tax and tax and tax and of crippling the productive sector, and it expects the public of New Zealand to trust it to get a productive economy and to increase competition so that we have a better result for this country. Nobody believes that. Nobody believes that Labour has the potential to do that, and today’s and yesterday’s little utterances prove that once again. It is all about increasing taxes, and it cannot even get its numbers to add up. It is exactly the same as the research and development tax credit: the numbers do not add up. Labour threw around the figure of $4.5 billion on the TV last night, and said it could do the capital gains tax at about 15 percent. It is all rubbish, and it will be unpicked over the next few days. It will be interesting to see when Labour finally makes its announcement, because I think the announcement is going backwards pretty fast at this point—it is going backwards. I am picking that the announcement will come forward a little from Thursday. Labour will have to get it out there because it is absolutely falling to bits. Labour members will be out there beavering away. David will be off with his calculator after this session, out the back to beaver away and to try to come up with another answer, because Labour needs one.

It is appalling what Labour is proposing. It is actually economic vandalism. It is what Labour did for 9 years in Government, and now it is on the other side it asks to have a crack again. It has no idea what to do. The solutions are a competitive tax system, more infrastructure, better results from education, more trade, less red tape, a much more productive public sector, and investment opportunities for New Zealanders. That is what this Government is delivering. That is the plan. It is the plan New Zealanders know about, and they are keen on the plan. On 26 November I am confident that we will get that endorsement.

GARETH HUGHES (Green) : Kia ora, Mr Speaker. I think it is fitting to follow the transport Minister, Steven Joyce, because I am talking about his handiwork on the Kapiti coast, where he is bulldozing a motorway through the community, and, just like in that last speech, he is making up for a lack of substance with volume. Today at Parliament hundreds of Kapiti coasters gathered to discuss his handiwork in the House. We heard speeches from councillors, tangata whenua, and locals all opposed to the expensive and uneconomic motorway that the transport Minister is ramming through.

The Minister is making a monument to the 1950s in concrete and asphalt, a monument to old-fashioned thinking, a colossus of roads—a scar on the Kapiti coast is what this Minister is doing. For every dollar we spend on all the walking, all the cycling, all the buses, all the trains, and all the coastal shipping, this transport Minister is borrowing to pour $7 on his roads of national significance. We are not talking about corridors of significance, or joined up thinking like that. No, we are looking at roads of national significance. I believe in smart transport investments that balance roads with sustainable transport modes like walking, cycling, buses, and trains, which will future-proof our transport system so that it is more affordable, efficient, versatile, and better for our economy. The Kapiti Expressway is one of seven roads of national significance. What I think we are actually talking about are motorways of significance to the National Government.

In a nutshell, the Kapiti Expressway is expensive, uneconomic, and not needed at all. It damages local communities and, looking towards the future, it is quite simply the wrong way to go. It is expensive. We are talking $500 million at a time when our country is borrowing hundreds of millions of dollars a week. It is uneconomic. Its benefit-cost ratio is just barely above 1. We have also seen the Minister play with the numbers. We have seen an independent estimate, the Saha report, come in with a much lower benefit-cost ratio.

I recently tabled an OECD report in this Parliament that showed there is no correlation in New Zealand between motorways and economic growth. We have seen in America that much greater numbers of jobs have been created in public transport or local roads production, not on expensive white-elephant motorways like this. Even Don Brash in his 2025 Taskforce had to say of the Wellington motorways that the projects would not provide a net benefit to the economy. It is not a smart way to build prosperity.

This motorway is not needed. The locals, including local member Nathan Guy in his election campaign, campaigned in support of the Western Link Road, which was a series of road upgrades and bridges that would have been cheaper and would achieve the safety objectives in a matter of years, not in more than a decade as this road does.

This road will see more people stuck on more congested roads. All around the world, when a road is built, more people use it. It is called induced traffic and it is kind of like dieting by extending the belt buckle. We will see negative impacts on public transport, which is growing at a small pace in Wellington, yet rocketing ahead in Auckland.

In our transport sector, our greenhouse gas emissions have increased by 70 percent since 1990. We are dismally failing our Kyoto Protocol obligation targets, yet this expressway treats the climate as if it was not of significance. On the back of the highest petrol prices ever in our country’s history, this motorway is dependent on a fuel of declining significance. Most important for the locals, I heard today that this motorway will split their community in two with a 100 kilometre, four-lane motorway. It treats the community as if it was not a community of national significance.

We have seen an absolutely shocking process by the Minister whereby the road was announced 9 months before any business case or economic analysis was released. We have seen a circumvention of the normal independent transport planning process. The locals wanted the Western Link Road, yet the Government has come on top of them and dictated this expressway. We have also seen blatant politicking with the facts and $16,000 wasted when the Government decided to play politics with the date of the announcement of the route because it was worried it would affect its chances in the Mana by-election.

The real impacts are on the 43 homes that will be demolished and on the 33 households that will be affected that were not expecting it. Over the decades people had planned for an upgrading of State Highway 1—those needed improvements—but instead the Government has come on with a grandiose white elephant, expensive, uneconomic motorway.

Why are we doing it? It is simply to benefit the trucking industry. This Government has a goal of increasing trucking freight by 75 percent by 2050, so this road of significance is a road of trucking significance based on a fuel of declining significance, as if the community was not of significance. It has to be stopped.

Hon CRAIG FOSS (Minister of Civil Defence) : Congratulations must be due to Mr Norman and the Greens—congratulations because it now looks like they are writing the economic, taxation, and fiscal policies of the Labour Opposition. I disagree with their policies but at least they have been clear and certain about those policies for quite some time. I say well done and congratulations again to the Greens. Perhaps they have Mr Cunliffe’s spreadsheet—we will see how we go.

It is important to note in this debate that right now about 72 percent of New Zealanders face a highest marginal tax rate of no more than 17.5 percent. But Labour members are up to their old tricks. We last saw those tricks in 2008 and Labour is back to them: Labour taxes, Labour taxes, Labour taxes; Labour spends, Labour spends, Labour spends, Labour spends. Labour increases taxation, regardless of the impact on the economy. It taxes and spends, regardless of the impact on the economy.

Let us remember recent history. Labour put New Zealand into recession one full year before the rest of the world went into recession. Members should also note that the export sector, the tradable sector, under the economic mismanagement of the previous Government went into recession in 2004, early 2005. There was no real growth in the export sector, but there was phenomenal and scarily worrying growth in the public sector over that time. Those same policies created the decade of deficits. Members opposite are reinventing history, looking at Budget 2008 from then finance Minister Cullen. The one to look at is the pre-election update, which is independent and transparent.

Labour loves taxation. Labour members are now talking about a capital gains tax. What do they do in bed at night? They lie in bed at night and think of new things to tax and new ways to tax. Goodness gracious! What do they want to tax next? We know that they love selling assets and trade sales offshore. We learnt today that there was $9.6 billion in trade sales offshore, mostly by members of the current Labour front bench when they were in Cabinet.

We know Labour members love spending. We know they love spending those increased taxes. But we also know that the increases in their tax policies distort the economy and the property market—the same property market that they allege they are trying to address. Over the period of the Labour Government debt doubled and housing prices increased through the roof. Home affordability decreased and homes became less affordable.

The capital gains tax that Labour is now promoting is, essentially, double taxation. We already have a tax on intent. Taxpayers must declare a trading or capital account. The Opposition has actually supported legislation that has gone through, changing the rules on “associated persons” in taxation. It supported changes to loss attributing qualifying companies without a murmur. That was it. Labour members support GST without compensation. They love taxation, as we saw when Mr Goff was in Cabinet in the late 1980s. Labour would raise business taxes, as well. That hurts plumbers, that hurts builders, that hurts “subbies”, and that hurts apprentices. We know that Labour is looking to increase income taxes. To be fair, it has been quite public about that, but we are interested to know where that will kick in. If Labour increased income tax and brought in a capital gains tax without making some of the other changes, the property market distortions will be exactly where they were.

Labour cannot be trusted on taxes, though. It cannot be trusted on taxes. We can recall the last big tax promise that Labour made in Opposition. In 1999 when Labour promoted the increase in the top marginal tax rate from 33 percent to 39 percent, the then finance spokesperson, Mr Cullen, declared that only 5 percent of taxpayers would be in that top bracket. By the time that party left Government, over 20 percent were in that top marginal tax bracket. The resulting increase in extra taxation earned was $20 billion every year, and there was $20 billion of extra spending every year, which crowded out the export sector. That is the reality of Labour’s capital gains tax mismanagement and proposals.

A capital gains tax will result in higher rents. It will make homes less affordable to those who are trying to enter the home market for the first time. It is a tax on the aged, and it is a tax on those who have done the right thing in looking after their retirement by saving—be it through cash, bricks and mortar, homes, or whatever. It is a tax on those New Zealanders who have done the right thing over many years.

Hon DAVID CUNLIFFE (Labour—New Lynn) : I love this House. One of the reasons I do is that we can feel the mood of the place change week by week. The mood of this House has changed this week because the National Government knows that it is game on. It is game on because New Zealanders have a choice. On the one hand they have a Government that wants to slash-and-burn services for New Zealanders, and sell off the family silver to cover 6 months of deficits based on tax cuts for people who did not need them. That is what National is offering. Labour is offering to pay down debt, to keep our assets, to grow our economy, and to get New Zealanders back to work so we own our future. We will own our future. Labour will govern for all New Zealanders, and it has a plan.

National has no plan, and that is why, under National, New Zealand has been going backwards. National does not have a plan to get the economy going. It is out of touch with ordinary New Zealanders. National is not working for Kiwi families, but for its big-bucks mates and the foreign interests that will clip the ticket on New Zealand’s family silver. Labour will give the country the start it needs. It will give everybody a fair go, with a tax plan and a growth plan that will get New Zealand back to work. It will make sure that everybody gets a fair chance, and make sure that everybody pays their fair share.

It was very interesting to hear Bill English, the man who said that Labour left the books in reasonable shape. That was an understatement, of course: 7.6 percent of GDP net credit was very reasonable in 2008. He has now presided over a $17 billion Budget hole, which will grow to $20 billion this year, yet he has the temerity to lecture us about fiscal prudence. He has the temerity, yet he does not have a plan of his own. His way is to slash-and-burn, flog the family silver, and run the country into the ground with tax cuts for the rich that New Zealand can never afford. On Labour’s side, we would pay down debt, keep our assets, grow the economy, and get New Zealanders back to work so we can own our future. We will do it with a plan that is fair to all, and to which everybody will contribute.

Steven Joyce tried to defend the competitive economy. Is that not the same Minister who has given sweet-heart deals to broadcasters in an election year, and given a new fibre monopoly to an incumbent telecommunications company that will drive competition out of the wholesale layer? He has as much right to lecture us on competition as Bill English does on fiscal management. He is railing against a straw man that National has created, and arguing that there will be a 30 percent capital gains tax. Well, who has ever said that? Labour has not made its announcements yet. We will make an announcement next week that will change the course of this country—not just this election, but this country—because it will set a pathway for a long-term future. It will be a future that New Zealanders can own and a future that New Zealanders can believe in, because it will show a clear pathway out of the hole we are in, a pathway that does not depend on the slash-and-burn of the State, or on the selling-off of the family silver.

New Zealanders do not want that—they do not want that. If those National members were listening to New Zealanders they would be very worried right now, because New Zealanders are getting the clear idea that they have a real choice. On 26 November they can vote for the short-term expediency of slash and sell, or the long-term wisdom of build and grow. New Zealanders want to build. They want a country that is going forwards, not backwards, and where we actually close the gap with our nearest neighbour, not widen it. They want a country where we get people back to work, not grow unemployment, and where we build for the future and not sell the future to pay the debt holes that have been created today. It will be an interesting week in politics.

AMY ADAMS (National—Selwyn) : You know, after sitting here over the last 2½ years I am starting to think that Labour members actually quite enjoy Opposition, because they can sit there and promise everything to everyone. They will be all things to all people. But suddenly, as we head into the election cycle, they have gone “Oh! We have got a $10 billion to $12 billion hole, and people are starting to ask how we will pay for that.” “Oh!”, they said; “We haven’t thought about that. Quick, let’s have a whip-round. I know—a capital gains tax. That will do it.” Those members heard somewhere that it would raise $4.5 billion for them, and they thought that would be good—that would work for them. With the detailed economic analysis of members over there, they took the figure of $4.5 billion and said “We’ll have that.”

But the problem with that is that Labour members are economically illiterate. They have not got an economic clue between them. They have not stopped to consider not only that it would take 15 years to get to the level of $4.5 billion—15 years, and they will also not be back in Government in anything like that time, if they make it back at all—but also that that sum is based on a 33 percent rate of tax when they are promising 15 percent. It is based on an accrual mode, and they are talking about a realisation mode, and it will not be there in time for them to fulfil their promises of doing everything that National is doing, and more and more spending. They will very quickly realise that it is like all their other plans: long on talk, short on delivery. This is another example of why Labour cannot be put in charge of the books of New Zealand, why Labour has no idea of how to run an economy, and why Labour was the Government that left us with a decade of deficits after the best economic conditions the world had ever seen. This plan of Labour’s, this grand scheme, at best would raise $700 million—at best. But here is another thought: if property prices are not going up, there is no gain. What will the plan make for Labour then? The big bagel! What is worse, if property prices go down, it will cost Labour money. It will cost it money as investors file their tax returns and claim for the multi-billion dollar losses on their property. Labour will find itself in a bigger hole.

If there is a capital gain, who will be hit the hardest by this tax? Let me tell members who will be hit hardest. It will be superannuitants, those on fixed incomes, and the people who create jobs. What Labour will do is tax superannuitants, and tax the wealth creators in this country. Why? It is so that Labour can build a bigger public sector, and so that it can have more policy analysts telling them what to think. That is Labour’s endgame. Labour will ask who in this country is successful. It will go out there, tax the bejesus out of them, hand out more welfare, grow the Government, and put more policy analysts around it. That is all that Labour will deliver. It has gone back to its core Labour beliefs. Labour members talk about being fair. What does “fair” mean to them? It means making everyone as poor as everyone else—making everyone equally poor. Labour’s fundamental principle is that equity is achieved when everyone is as poor as the lowest common denominator.

That is not what this Government stands for. This Government gets behind success, celebrates aspirational New Zealanders, and celebrates people who are putting their capital into the productive economy, creating wealth, raising incomes, and creating jobs. We do not go out there and penalise the successful; we celebrate winners, we reward winners, and we encourage productive growth in this economy. But let me tell members this—this is really interesting. Labour now is holding out this capital gains tax as a panacea for all ills. I just want to read this: “The Government is not interested in a capital gains tax, either in the short or the long term. Basically it is political suicide”. Who did that come from? Michael Cullen. He said it was political suicide, now or in the long term. Here is another quote I quite like: “[The New Zealand Labour Government] … agrees … that [New Zealand] would not be better off with a general capital gains tax …”.

Dr Cam Calder: Who said that?

AMY ADAMS: David Cunliffe. Is not that interesting?

Dr Cam Calder: When was that?

AMY ADAMS: That was in 2002, in Government. Have we not heard this before—that New Zealand would be worse off with a capital gains tax? I say to Mr Cunliffe that that is quite right. It is the most sensible thing I have heard that member say for a while.

Dr Cam Calder: He must be in quite a big hole.

AMY ADAMS: A big hole, I would have thought. Michael Cullen was reassuring us that Labour had no interest in a capital gains tax, in the short term or the long term, because it would be political suicide. Wise words. But what do we have now? We have an Opposition that has promised everything, knows it cannot deliver, and is desperate.

Hon Sir ROGER DOUGLAS (ACT) : I want this afternoon to talk about Telecom’s new monopoly status, and what that will mean for the New Zealand economy. On 22 April 2008 John Key said that the ultra-fast broadband investment would be made “alongside additional private sector investment …”, and would be “making sure we do not end up lining the pockets of incumbent industry players.” Oh, yeah! If only.

Steven Joyce has said that it is a good deal for the country. In fact, it is the worst possible deal for the country. We have a Government investment of $929 million, which has a present-day net value of $140 million. The deal the Government has entered into with Telecom has been portrayed as a partnership. It is not a partnership. Telecom is risk-free; the Government has taken all the risk. Telecom will take all the profit, and the Government will take all the costs. The deal is portrayed as a Government investment. It is not an investment; it is a subsidy, a massive subsidy. The Government will get almost none of its money back. The deal perpetuates Telecom’s infrastructure monopoly for ever. It kills Telecom’s competitors, without compensation. There is no take-up target, which one would expect to be essential for an industry of this nature.

We have what I would call the Crown Fibre Holdings sham investment. The Crown investment will be made through an equal contribution of equity and debt—so-called. The equity and debt securities have no voting rights, no dividend payments will occur before 2025, and full dividends will be paid only after 2036. The debt securities are unsecured and non - interest bearing. Debt securities will be redeemed in tranches from 2025 to 2036. Chorus may elect to redeem the equity and debt at any time.

That outline comes straight from Telecom. The investment is a simple gift—a gift to Telecom. Crown Fibre Holdings pays for the entire $929 million of community infrastructure. The $464 million equity proportion has no rights to equity; it is actually a loan. Telecom has from 2025 to 2036 to repay, and Telecom has full use of the $929 million, interest-free, for 14½ years. It can pay it back at face value.

Telecom has no real costs until the customer connects. It gets an assured cash flow immediately. It pays out about $1,381 per connection—that is the company’s calculation—and it gets back a cash flow of $492 a year, a gross return of about 35 percent. The value to Telecom is simple to calculate: $929 million for 14½ years at, let us say, 7¾ percent. The commercial compound interest saving of that for Telecom is $1.8 billion—$1,800 million—or, to put it differently, the Government’s $930 million is on generous terms.

Well, what do we say? Generous? Yes. The net present-day value of Telecom’s repayment on this funding is $140 million. That is not my calculation; it is the calculation of a leading private wealth company, based on Telecom’s figures. An independent assessment says that the present-day value of the subsidy is $800 million—$800 million. My minority report on ultra-fast broadband investment proposals said that the investment, first of all, was not necessary, but if the Government were going to spend $1.5 billion, it should spend the extra $400 million and own the lot.

Hon DAVID PARKER (Labour) : I thank Sir Roger Douglas for his contribution. It is good that it is on the record, and I would just add that in addition to that, Telecom received regulatory protection that we still have not been able to unpick, because the Government has not been transparent about what it has done.

I want to respond to the theme of National’s contributions today, which is to accuse Labour of tax and spend. National members say that whenever National changes a tax from one form to another, decreases income tax—weighted to those who are best off, admittedly—and then increases GST to pay for it, that is a tax switch, but if any other party changes the tax mix, that is spending. That is the essence of their argument in respect of any change to the tax system that Labour might propose. For us to change the tax system is tax and spend; for them it is a tax switch. Well, we deny that, and I am sure that the media will see through that. It is not true.

Anyone who knows Phil Goff knows that the allegation that is least likely to stick to Phil Goff is one of being profligate. He is not a tax-and-spend person. He is fiscally prudent, as was the last Labour Government, which reduced Government debt so that we had net positive assets in the Crown by the time we left office—so much so that when the Hon Bill English took office and when the global financial crisis hit, he said the Government books were in good order. That was the rainy day that the Government had been saving for. Of course, it was not his Government; it was the prior Labour Government. All of those Budget surpluses that we ran were opposed by National, which called for unaffordable tax cuts that would have further fuelled asset and price bubbles.

The National Government has wasted its political capital. We are increasingly hearing commentators saying that. Some Government members might ask why I say that. The reality is that we have a long-term problem in New Zealand of rising total debt. Only about 10 percent of it is Government debt; 90 percent of it is private. What does the Government’s Budget show? It shows that every year from here on it gets worse. We have a rising current account deficit. Even if we strip out the reinsurance proceeds coming into New Zealand from the insurers who insured against the Christchurch earthquake, we see that this year we have a current account deficit, despite flat domestic demand and record commodity prices internationally.

David Bennett: Show us some passion.

Hon DAVID PARKER: Every year hereafter, I say to Mr Bennett, his Government’s projections show the current account deficit getting worse, blowing out to 6.9 percent of GDP by 2015. The net international investment position gets worse every year. That is the measure of how much New Zealand owes to the rest of the world, net of what we own in the rest of the world, and on that basis we are one of the most indebted countries in the world already. Every year from here on, under the settings of this National Government, New Zealand gets poorer. That is projected in this year’s Budget to go to negative 85 percent of GDP by 2015.

We have heard slogans from National members. They said that we would have a better future, that we would have a step change in the economy, that we would say goodbye to higher taxes rather than our loved ones, and that they would close the wage gap with Australia. The wage gap with Australia has become bigger and is getting bigger. The step change in the economy is not coming; that phrase has dropped from their language. The better future is no longer being promised. Their slogans did not work, and their policy proposals did not work either. They said mining in national parks would make the big difference, but they abandoned that. Then they said savings would be the centrepiece of the Budget this year, but what did they do? They cut KiwiSaver incentives and pretended that they would have higher rates of KiwiSaver participation as a consequence. No one believes that.

Now they are spinning what they think Labour will propose next week. They do not know what it is, but they pretend that if we made a change to the tax system, it would be tax and spend. We know that there needs to be a fundamental change to the settings of this economy in order to drive the export economy. We will deliver upon that promise.

DAVID BENNETT (National—Hamilton East) : I congratulate the previous speaker, David Parker, on showing that Labour members are wavering on their tax policy. It took them only 24 hours to realise that it was a dog and that people are not going to go for it, but we all wait for next week. I congratulate the Green Party, as well, because the Green Party is now the leader of the left wing in New Zealand. Its policy will determine what the left will campaign on. It is not Labour’s policy; it is Green Party policy being promoted by Labour now. The Green Party always wanted to have a capital gains tax and now Labour is doing it. Good on the Greens for at least standing up for it, and poor old Labour has to pick up Green Party policy.

A capital gains tax is a tax of envy. It is a tax that will not work. It will not work for a number of reasons. First of all, house prices are not going up, so there will be no return to the Government from this tax in its first few years. This tax will not work, because if Labour fully implemented the tax, it would have to do it across all assets, not just investment properties. If Labour implemented it on investment properties only, in 15 years’ time it might get $700 million. That would not be what we need to sustain this economy in the near future—$700 million in 15 years’ time. Labour should tell the people of Christchurch that it will rebuild their city with $700 million in 15 years’ time, and see how far it gets.

This tax will not work, because it will be complex. Those people out there who can afford to get around it will try to do so. This tax will not work, because it will not mean that there will be no increase in housing prices. We can look at the biggest property bubble going on at the moment, which is in Sydney, where they have had capital gains taxes. What has happened in Australia? House prices have still gone up. That would not change under this policy.

If we look at the policy, what would Labour members do with their capital gains tax? Would they stick it on the non - family home? Well, they may do that. Would they go to beach houses and those kinds of investments? Yeah, they probably would do that. Would they go to farms? Well of course they would do that, because they do not like farmers. Would they go to other businesses? They would have to. If they are going to the beach house, the second home, and the farm, they would have to go to businesses. Labour members should tell those employers out there—those electricians and plumbers—that they cannot take on apprentices now because they will be taxed on selling their business. There will be no incentive to build their businesses. Then Labour would have to tax other assets like shares and other forms of investment. When would it stop in that process, how would it deal with the corporate structures to avoid taxation in those areas, and how would it make that fair and equitable?

A capital gains tax would depress investment in this country and in the productive economy. Labour’s envy tax would have the opposite effect of what it wants it to do. That tax would actually depress economic growth in New Zealand and hurt this economy, because Labour would be taxing the productive sector, and a tax on the productive sector is the last thing the New Zealand economy needs.

The second part of Labour’s tax platform is to increase marginal tax rates on those who earn high incomes in New Zealand. Those are skilled people. They are the people we need to retain in New Zealand and attract back to New Zealand. How will Labour keep doctors in New Zealand if it taxes the guts out of them? They will go to Australia, where they can earn more money.

What will the Labour tax policy do? First of all, it will hurt businesses, it will hurt investment, and it will hurt economic growth. Second of all, it will tax those people whom we need to be working hard and building this country to be stronger. That tax policy will have a detrimental effect on this economy. It will put us in the decade of recessionary years that Labour planned. It will put us into the situation where we have a decade or two decades of deficits going forward. That tax policy has no economic justification, and that is why the Green Party set it up. The Green Party does not understand economics, and now this shows that Labour does not understand economics, either.

Let us look at the numbers. The numbers will be the big thing. I hope that Stuart Nash has done his numbers right, because next week, when he announces this policy, everybody will be looking at those numbers. With the way they stack up now the Labour Party has problems, because this tax policy will not be effective.

STUART NASH (Labour) : I must admit that I find it amusing that the member David Bennett, who is the chair of a select committee and is also on the Finance and Expenditure Committee, spent 5 minutes—spent his time in the general debate—talking about a Labour tax policy that has not been released. It has not been released; no one knows the details of it. We certainly have not confirmed that we are planning to introduce a capital gains tax. He spent 5 minutes talking about that. Do members know what that proves to me? Do members know what that proves to me? That just proves that the Government has absolutely no plan. I can tell members that if the Government had a plan, Mr Bennett would have spent 5 minutes talking about the plan. He would have spent 5 minutes talking about the plan, but he did not, because there is no plan—absolutely no plan. It actually does make me smile, and it makes me confident as we head into an election that the National Government can hang its hat on nothing except asset sales. That is its only policy: asset sales. It is not a positive policy, but it is the only policy.

I would like to play a little game of charades. I do not mean to hold this House in disrespect whatsoever, but it is a little game of charades. I play this with my children quite a bit. How it works is that I say something, and people have to guess who I am. It is a little bit like 7 Days or Back Benches. The first question is, who said this: “National will not increase GST”. Who said that?

Hon Rick Barker: John Key.

STUART NASH: John Key—that is dead right. John Key, as the Leader of the Opposition, said that to the people of New Zealand. He looked at the camera with those hollow eyes of his, and said to the people of New Zealand “National will not increase GST.” But he did—he did. After promising that he would not increase GST, he did.

But the issue is worse than that; it actually is worse than that. John Key increased GST for every single New Zealander, so that the few very wealthy people could get a great tax cut. That is what he did. Someone who earns a million dollars a year—a million dollars a year—receives a tax cut of $1,000 a week. The Inland Revenue Department tells us that the tax cut would be $1,000 a week. The Inland Revenue Department tells us that about 700 New Zealanders earn a million dollars a year. They had a tax cut of $1,000 a week. But do members know what? People who earn the median wage in Napier received about $10 a week—they received $10—100 times less than people who earn a million dollars a year did. The question I have to ask, and it is a pretty simple one, is whether that is fair. Is this a plan for economic growth? Is it equitable? Is it the sort of country that we as New Zealanders pride ourselves on? The very wealthy are becoming even wealthier on the back of the vast majority of good, hard-working New Zealanders, who are out there trying to make it happen.

Paul Quinn: This is last year’s speech.

STUART NASH: No, it is not.

Let me tell members a little about economic philosophy, because I think Mr Quinn has a couple of problems. The economic philosophy followed by the vast majority of Governments around the world is Keynesian economic theory. That works by saying that if we give money to those who need it, that will stimulate economic growth, but that if we give money to those at the very top, they will save it or retire debt. At a certain time in the economic cycle, that is actually not too bad. But when the country is in recession, the last thing that we would want to do is to have all the money that was given away as tax cuts have absolutely no effect on economic growth whatsoever. Treasury said that this is the case: tax cuts for the very wealthy have no impact whatsoever on the economic growth of this country.

I come back to the question of whether this situation is fair. I was asked to go to William Colenso College in Napier to talk about tax to third formers. I thought “Goodness me—talking about tax to third formers!”. What I did was to outline the National Government’s tax policy, whereby the very wealthy received $1,000 or more per week in tax cuts, and those on the median wage received $10 a week in tax cuts. Do members know what they said to me? They said “Oh, sir, that’s not fair.”—exactly.

JO GOODHEW (National—Rangitata) : Tēnā koe, Mr Speaker. Well, the beavers on the third floor of Parliament House have been very busy considering all of the possibilities that could possibly be sold to the voting public as semi-credible ways of paying for Labour’s big spending promises. Whoops! Did I say “semi-credible”? I think I meant incredible, or hardly credible, or not credible at all.

Let us reflect just on the big spending promises that Labour has already put on record. On an annual basis, Labour will need to find $1.5 billion a year to pay for the $5,000 tax-free threshold for everybody paying tax and the GST taken off fresh fruit and vegetables only. Add to that not implementing our KiwiSaver changes or our Working for Families changes—changes that would make those schemes sustainable, I might add—implementing a research and development tax credit, putting money into the superannuation fund, and not adopting the mixed-ownership model, and that will cost $4.5 billion each year. Boy, it is really easy to overspend when Labour wants to get back into Government, no matter what, at any cost, at all costs.

Do members know why Labour wants to be back in Government? Because its members believe that they know better how to spend taxpayers’ money than anybody else. New Zealanders are not stupid. They know that before one spends money, one has to earn it, borrow it, or take it off somebody else who has some. There are three choices. Labour has discarded option No. 1. Waiting until money is earned before spending it has never been Labour’s practice. Labour is galloping towards a socialist ideal of redistribution of wealth. Labour members have undertaken not to do the borrowing thing, mainly because they have painted themselves into a corner by accusing us of borrowing too much during the recession. So that leaves taking money off people who have some.

A capital gains tax seems to have been a winner in the raffle of options. I am sure that it looked like a good idea at first glance, because, after all, when we stoke up the fires of the politics of envy, anyone who can afford two properties or more than just a house when it comes to assets should have money taken off them. Under a capital gains tax, Labour wants a 15 percent tax on—well, actually, it will have to be on an accrual basis, but in fact Labour is talking about taking that off only when it is sold. Whoops! Somebody hit the wrong button on the calculator. To get to $4.5 billion, the capital gains tax will need to be 30 percent. Whoops again! It will need to be for all asset classes. Then, whoops again, it will not happen overnight, or in one, two, or three years; it will take 15 years.

Oh no! What will Labour do now? If it will take 15 years, then Labour is back to the drawing board. What? Oh no! Labour has already released the information—unofficially, of course. So what will Labour do now? Labour needs to accept that the financial gurus on the third floor—the Cunliffe, Parker, Goff, and Mallard team—have scored an own goal.

Iain Lees-Galloway: Haven’t you got any policy of your own to talk about?

JO GOODHEW: Yes, they have scored an own goal, and they did it before kick-off. That must be a record. Had they taken a few more moments before they leaked their mighty plan, they might have noticed that, actually, National has done some really good work in this area.

We have changed the policy settings on the poor policy that contributed to a housing and debt boom and unbalanced the economy. We have already moved to make rental properties less attractive as an investment and to make sure that property investors pay a fair share of tax. Back in Budget 2010 we tightened the settings considerably. Our finance Minister at question time today certainly outlined those. I tell any New Zealanders who own shares, a family farm, a bach, or an investment property to look out, because Labour thinks that they are the dream answer to Labour getting back on the Treasury benches. They should look out, because they are in Labour’s sights.

On 26 November New Zealanders will make that stark choice about looking forwards with National or backwards with Labour. It will be a competitive economy and a competitive tax structure that we will focus on. Our kids will want to stay in New Zealand. It is a plan that invites New Zealanders home, sees our economy grow, and sees everyone better off. That is a plan for New Zealand.

  • The debate having concluded, the motion lapsed.

Royal Society of New Zealand Amendment Bill

In Committee

  • Debate resumed from 15 June.

Clause 8 No dividend or profit to members (continued)

Dr ASHRAF CHOUDHARY (Labour) : I am delighted to have this opportunity to speak again on this very important bill, the Royal Society of New Zealand Amendment Bill. It is really very important for the people of New Zealand, the scientific community, and the humanities. This bill will include the subject of the humanities in the Royal Society.

This particular clause, clause 8, concerns scientific or technological research, and those words are to be substituted with “research in science, technology, or the humanities”. I think this is a very significant change. These few words mark a very significant change in this bill. As I said in my earlier discussion, there is a significant difference between science, research, and technology. I know some of my colleagues probably do not quite agree that there is a difference between science and research. I say that the word “science” comes from scientia, a Latin word that means knowledge.

Dr Cam Calder: Oh really?

Dr ASHRAF CHOUDHARY: It is very important for the doctor to know that the word “science” comes from scientia, which is a Latin word that means knowledge.

There is a difference between knowledge and research. Science is about creating knowledge, whereas research is something one does to achieve a scientific result, and technology is a follow-up to that research. It is very important to understand what research means because research is something we do to prove some of these theories, whether they are existing problems or new problems. To prove the theories we need to do research. So this is something very different from science. Science is knowledge. In this case we are saying that we want to change the words by omitting “scientific or technological research” and substituting “research in science, technology, or the humanities”.

For about 144 years the Royal Society has involved just science and we have not talked about or worried about the impacts of that science on humans, animals, or the environment. So a very important part of this bill is the inclusion of the humanities so that we understand how science impacts on our society. We have to understand how the work we do—whether it is in medicine, agriculture, or atomic energy, for example—impacts on human beings, the environment, our waters, and our lifestyle. So I think it is very important and timely that we have included the humanities.

Dr Rajen Prasad has worked all his life in the humanities area, so he probably understands some of the work scientists have done. He, like others, has tried to implement science and see how science—the science of agriculture or whatever science it is—impacts on the humanities. I think it is very important for us to understand that the humanities have to be part of the Royal Society’s work, because we have for too long ignored people who have done a lot of the research that creates knowledge and science, and we have had very little understanding of how it might impact on the humanities, on our waters, and on our environment. I think that a lot of significant work is going on at universities in New Zealand by people who are not necessarily involved with science itself but are doing research on understanding how scientific products and innovations impact on the daily lives of our people.

I am delighted to have this opportunity to speak on this bill and on clause 8, which deals with dividends.

The CHAIRPERSON (Eric Roy): Just before I take the next call, I would like to refresh members’ minds that we are dealing with clause 8, which is headed “No dividend or profit to members”.

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

IAIN LEES-GALLOWAY (Labour—Palmerston North) : Clause 8 of the Royal Society of New Zealand Amendment Bill refers to no dividend or profit being available to members. I wonder whether the member in charge of the bill, Grant Robertson, would be able tell us whether there is any ability to receive any remuneration. I am not sure whether there is any mechanism by which that occurs. I am sure that a lot of work goes on within the society that members could be potentially remunerated for, so if there is any mechanism there I would appreciate the member in charge of the bill telling us about it. Obviously, the Royal Society is a non-profit organisation that is essentially engaged in matters of promoting science and recognising scientific achievement, and under this amendment bill the society recognises “research in science, technology, or the humanities”, instead of just “scientific or technological research”. Obviously, all of those things potentially lead to opportunities for remuneration, but that is not the point of the society. The society is about promoting those things and recognising significant achievement in science, technology, and the humanities, as well.

It has not really been well recognised over the years that the humanities is an area that has a lot of potential for remuneration, but, of course, we often see that people at the leading edge of research in the humanities or at the leading edge of the creative world can generate a lot of profit for the nation. Sir Peter Jackson is a really good example of someone who works in the creative sphere. I am not sure whether he studied the humanities as such, but certainly the field he is in is, I think, one that could be described as being part of the humanities. If I look at the interpretation clause, I see that film, media studies, and drama are included in the definition of the humanities. So Peter Jackson would certainly be described as someone who has been able to derive a profit or a dividend from his work in the creative sphere. It is absolutely appropriate that we recognise achievement in the humanities, that we promote the humanities as an area of significant interest and benefit to the country, and that we bring the humanities within the Royal Society’s scope.

Of course, it is important to recognise that in clause 8 we are not talking about direct profit to members for the work they do within the Royal Society, because the society is essentially an organisation that advocates the promotion of research in science, technology, and the humanities. This area of when is an organisation purely a charity versus when is an organisation one that engages in political advocacy has, of course, been the subject of a lot of discussion lately. The issue of finance for those particular organisations has been a matter of much debate recently. I would be interested to know—I cannot tell by just reading the bill—what the two different sections, section 8(2)(d)(i) and section 8(2)(d)(ii), in clause 8, actually refer to. Again, it would be quite useful if the member in charge of the bill could give us a bit more detail on that.

I am sure that a lot of work goes on within the organisation that needs to be paid for, and I wonder whether society members who undertake that are able to receive remuneration for it. As this bill has expanded the areas in which that work could be undertaken, there may be a much wider range and I would be interested to hear about that.

SU’A WILLIAM SIO (Labour—Māngere) : This is my first contribution to the debate on this wonderful bill called the Royal Society of New Zealand Amendment Bill, which was introduced by the wonderful member for Wellington Central, Grant Robertson—the member in the chair. As it is my first contribution, Mr Chair, I have a range of questions I would like to ask that member about this bill. Just by way of preliminary comments—

The CHAIRPERSON (Eric Roy): The member addressed the Chair and said he has a range of questions, so the Chair will respond and say that they must be pertinent to clause 8.

SU’A WILLIAM SIO: Absolutely, Mr Chair. They certainly will be pertinent to clause 8. Clause 8, “No dividend or profit to members”, contains two subclauses. I would like the member in the chair to comment on it. The clause talks about “no dividend or profit to members”, and I note that that is a theme that the humanities teach—protecting the many and not the few, and ensuring that we share our profits for the benefit of all New Zealanders. I ask whether the member in charge of the bill would agree with me when I say that if more members opposite had taken the humanities at university, they would now be sharing the wealth with the rest of New Zealand. They would be aiming to create more jobs, instead of lacking the aim to do that. Would the member in charge of the bill agree with me on that? Because I think the humanities—

Hon Maurice Williamson: The last three listeners have just switched off.

SU’A WILLIAM SIO: If that member, Minister McCully, had taken the humanities, he would have had a plan to create jobs for this country. He would have had a plan to get our economy revving up and going. Well, I do not believe he took the humanities, so I want the member in the chair to share with us whether he agrees with my premise in that regard.

Clause 8(2) amends section 8(2)(d)(ii) of the Royal Society of New Zealand Act by omitting “science and technology” and substituting “science, technology, and the humanities”. Does the member in the chair agree with me that if more National members had taken science and technology, they would have figured out that the debt that they are increasing for this nation will put more burden not only on today’s generation but also on the next generation in the years ahead? They would have figured out a way through taking science and technology—and perhaps they would have had a bit of heart if they had taken the humanities—to recognise—

The CHAIRPERSON (Eric Roy): Relevance.

SU’A WILLIAM SIO: Mr Chair, I am asking some questions of the member in the chair. As I said to you earlier, this is my first contribution to the bill—

The CHAIRPERSON (Eric Roy): Clause 8.

SU’A WILLIAM SIO: Clause 8. We go back to clause 8, which is about having no dividend or profit to members. Are the members this bill talks about specifically from the Royal Society of New Zealand? Are we looking to amend the standard for electing members of this society to ensure that they do not get unfair treatment? Would that be right? I think we are amending the election process for councillors of the society. Is that not why there is a concern about why we are changing the way of electing councillors on this? It comes back to clause 8, of having no dividend or profit to members—

Dr Ashraf Choudhary: No dividend.

SU’A WILLIAM SIO: —no dividend or profit to members. The feeling out in the community is that this Government is looking after itself, this Government is looking after its buddies—

Dr Ashraf Choudhary: And their mates.

SU’A WILLIAM SIO:—and this Government is looking after its mates, and members opposite are forgetting the reason why they are in Government. They are in Government to ensure that clause 8, “No dividend or profit to members”, is there to protect the interests of the wider community and not necessarily to protect the interests of the wealthy few, whom Mr Maurice Williamson seems so adamant to protect. There is probably more room to extend clause 8 and add other clauses, simply because I think that clause 8 suggests that under this Government, the John Key Government, we have to look at ways to protect our society from being undermined by the way this Government runs roughshod over legislation and the way this Government has no particular plan to create jobs and to address the cost of living that many families the length and breadth of New Zealand are having difficulty with.

GRANT ROBERTSON (Labour—Wellington Central) : I will respond to the questions raised by my colleagues Iain Lees-Galloway and Su’a William Sio, although at the outset I should clarify that the Minister who was interjecting on Su’a William Sio was Maurice Williamson, not Murray McCully. Few insults cut deeper than being called Murray McCully, I have to say. On behalf of the Labour Party I apologise to the Minister for such an egregious insult.

Su’a William Sio asked whether bringing in the humanities to the functions of the Royal Society adds an element to the question of there being no dividend to members. In a sense, the answer to the member’s question is no, because section 8 of the Royal Society of New Zealand Act, which is amended by clause 8 of the Royal Society of New Zealand Amendment Bill, states quite clearly: “The income and property of the Society must be applied solely towards the object of the Society, and … no portion of the income … may be paid directly or indirectly by way of dividend, bonus, or otherwise to members.” So it is actually quite clear. It is comprehensive.

Section 8 then lists a series of exceptions for where money can be paid to members. Before I come to those exceptions, it is worth clarifying—again, in response to another question that Su’a William Sio asked—the nature of the members of the Royal Society. We will in debate on future clauses, I hope, be able to go through this matter in some detail. The different kinds of members include the Fellows of the Royal Society. There is quite a process to become a Fellow of the Royal Society.

Paul Quinn: That’s me, isn’t it?

GRANT ROBERTSON: No, Mr Quinn has not quite made Fellow of the Royal Society. In fact, I am looking at the list of people who can be members of the Royal Society. Section 9 of the Act goes all the way down to paragraph (h), but unfortunately there is no mention of fools. Fools are not allowed in the Royal Society at all, so Mr Quinn is out. Membership of the Royal Society includes fellows, ordinary members, companions, constituent organisations, honorary members, and honorary fellows. One can apply to be a member of the Royal Society. Mr Quinn may choose to do that at some point in the future.

Paul Quinn: How do you know I’m not a member?

GRANT ROBERTSON: I have a membership list here, I say to Mr Quinn. Would he like me to read through it? I do not think we will find Mr Quinn in the Royal Society’s membership. If he is a member, however, I may choose to withdraw my sponsorship of the bill as I would be concerned about the standards of the Royal Society.

Section 8 states that those people I have listed as members—not Mr Quinn, but the fellows, the ordinary members, and the companions—cannot have dividends or profits from the Royal Society except where remuneration is returned for services rendered or goods supplied. One example of this would be if a member or a fellow of the Royal Society was on a panel to choose the winner of one of the awards, perhaps the Rutherford Medal or something like that. They would, no doubt, have costs associated with serving on those panels, therefore they would fall under section 8(2)(a) of the current Act. They would receive some recompense from the Royal Society for doing that. That is the exception to the overall rule that no dividend or profit should be given to members.

The other specific area that is worth noting is section 8(2)(d) of the Act, which is about the grant of awards or prizes. They are the members, the fellows, and the companions of the Royal Society who win a prize from the Royal Society. I am not sure whether Mr Quinn has been awarded any medals by the Royal Society, but others have been. For example, the Rutherford Medal, which is the pre-eminent medal awarded by the Royal Society, has gone to people like Richard Faull; Paul Callaghan; the Prime Minister’s Chief Science Adviser, Peter Gluckman; and Alan MacDiarmid, the renowned physicist. They have won the Rutherford Medal. All of those people are, in addition—

Paul Quinn: Any Māoris?

GRANT ROBERTSON: Yes, I am sure there have been. I will come back to that.

Paul Quinn: Well, do you know?

GRANT ROBERTSON: Thank you for asking me the question. I will come back in a future call to answer that question.

Louise Upston: How many women? What’s the gender balance?

GRANT ROBERTSON: There are not enough women, I say to Louise Upston. Not enough women have been given awards by the Royal Society because, sadly, science does not have enough women in it. Adding in the humanities will broaden the number of women who will be eligible for medals.

One of the awards, I say to Mr Quinn and Ms Upston, given out by the Royal Society is the Dame Joan Metge Medal for social sciences. That award is given for excellence and achievement in the social sciences. Interestingly, one of the prizes and awards already available to members of the Royal Society is the Humanities Aronui Medal. So the Royal Society has actually been getting on with integrating the humanities inside the Royal Society while we work our way carefully through this bill. That medal is already available. It is an example of a dividend or profit going to a member of the Royal Society when they receive, for instance, the Dame Joan Metge Medal for social sciences. They are the main classes by which members can receive what could be considered a profit or a dividend of the society.

Another interesting exclusion is the repayment of money borrowed or the payment of interest on money borrowed. It seems odd to think that the Royal Society may at some point have to borrow money from people. I have not got an explanation for how that provision came to be part of the Act. I presume that at the beginning of the establishment of the Royal Society there may have been a need for the society to borrow money from individuals, perhaps at a branch level where smaller operations occur from time to time. I thought it was curious to see that within section 8(2)(b).

The main reasons that people can get a dividend or profit out of the Royal Society is that they have done work, perhaps on behalf of the society, in terms of being on panels that award medals. The Royal Society also undertakes research and advocacy into certain areas. When that work takes people away from their regular work, they do get recompense. In a previous life, before being in Parliament, when I worked for the University of Otago I knew of a number of Otago University academics who spent time on Royal Society projects. The university would have been reimbursed for that time by the Royal Society. That is the kind of activity that is done. I say that in answer to Mr Lees-Galloway, who asked for an example.

The other part of it is about those who win awards or prizes. In the brief time I have remaining in this call, it is worth noting that the range of prizes, awards, and medals that the Royal Society gives out reflects incredibly well on the scientific—and now humanities—community of New Zealand and its standards. The people who have received those medals and awards—and therefore received some financial gain, as allowed for under section 8 of the Act—are a catalogue of some of the highest-quality science and innovation that one could see anywhere in the world.

The Royal Society plays an excellent role in fostering that and ensuring that there is financial reward for those people. Science, and the humanities in particular, are often fragile existences: people trying to have a career in academia—and Dr Choudhary knows this—are required to do teaching, and they are required to have other responsibilities within their academic institution. To then have the ability to undertake the kind of ground-breaking research that we need in New Zealand to foster innovation and to grow our economy, those people need some financial recompense. The Royal Society can, from time to time, give that financial recompense.

I know that the Rutherford Medal, which I mentioned before, has a significant financial benefit associated with it, and that is why it has gone to scientists of the calibre of Richard Faull, Paul Callaghan, and Peter Gluckman. It has enabled them to push ahead with ground-breaking research that is outside of their normal employment within the academic institutions that those gentlemen all work in. That is why it is important that we have clause 8, because it makes sure that we are clear that nobody is in the Royal Society just to make money. It is not about the profit. But there will be occasions such as winning awards and prizes when money that the Royal Society has generated will go to members. I think that clause 8 is very well crafted.

In terms of updating the Act, we are now including the humanities, alongside science and technology, among the classes of members who will be able to get that financial benefit. As I think I have said in a previous contribution, I look forward to the day when the pre-eminent medal of the Royal Society, the Rutherford Medal, goes to someone from the humanities. That will be a sign that the Royal Society has fully embraced the new class of membership that the society has within it. It would be a great occasion for New Zealand to perhaps see someone who has worked in both the sciences and the humanities take up that provision.

BRENDON BURNS (Labour—Christchurch Central) : I am particularly pleased to take a call on clause 8 of the Royal Society of New Zealand Amendment Bill, as it relates to that important issue that members of the Royal Society shall not take part for dividend or profit. The reason I say this is that last night I was one of a number of members of the House who were privileged to attend a function to recognise the firefighters of Canterbury and the West Coast who came to our city of Christchurch on 22 February and ensuing days. The rewards they were given were nil in terms of profit or dividend. They came simply because of their humanity, I suppose. Many of them were volunteers. Certainly, some professional firefighters were amongst the ranks of those who were present last night, and there were perhaps 200 or 300 people at the former Wigram airbase museum for the awards ceremony. The Minister, Nathan Guy, was in charge of the ceremony and a number of other members were there. It really brought home to me the importance that we should continue to attach to people who serve not for profit, dividend, or personal gain but for something bigger than that, and I think we are doing that very much so in clause 8.

I want to acknowledge in this Chamber, at the first opportunity, and thank those firefighters for their valiant service to my community, particularly in the central business district at the heart of my electorate. There is no amount of reward, there is no amount of dividend, and there is no amount of profit that we could provide to them that would say thank you enough for what they did in the hours, days, and weeks that followed our nation’s national disaster of unprecedented consequence.

So I am pleased to see that the Royal Society, under this bill, is affirming the tradition that when it operates it is not doing so on the basis of profit or dividend. That is important because the Royal Society has a noble tradition; one that has been centred on the sciences. This bill, under the adept stewardship of my colleague Grant Robertson, MP for Wellington Central, is bringing through amendments that will add to the dimensions of the Royal Society those who come from a humanities background. I guess if those firefighters could be categorised, they are not intellectuals, they are not scientists, and they are not people with professional degrees in most instances. I am sure that occasionally in their ranks there might be somebody with an advanced university degree who serves simply because they love the contribution they can make through something like the New Zealand Fire Service.

Simon Bridges: That is very stereotypical.

BRENDON BURNS: If the member wants to interject on that point, he is most welcome. I am sure the people of Tauranga would like to know that he does not agree that our firefighters deserve to be recognised in this Chamber, alongside people from the Royal Society. There is a parallel there between people who serve, not for profit, not for dividend, but for public service to the people of this country. I think that does deserve to be recognised. I think our society tends to put too much focus on the cost of things, rather than on the value of things.

Clause 8 really enshrines the fact that there is something beyond dollar-sign returns; it is an issue of public service. I think the Royal Society embodies that beautifully, as do the firefighters of this nation. If we have only a short-term focus, based upon profit, then I think we will see a continued falling away of the way our society holds together and operates. If we look at it in a business setting, a company that has a focus only on short-term profit will not be investing in research and development. That is the sort of research and development that members of the Royal Society often help drive, because they are not there for the short term; they are there for the long-term haul. They can often give their whole lives to the particular study of one small, unique subsection of the sciences—and soon the humanities. But that still makes a huge contribution, because sometimes those tiny little areas of research can lead to enormous quantum leaps for us as a society.

That is why enshrining in clause 8 the fact that the Royal Society is not centred upon profit or dividends to its members will encourage them to follow their natural creed, which is that they are there for public service, they are there to contribute to society, and they are there as members of the Royal Society because they want to do their utmost and best for the communities in which they live, for the professions in which they serve, and for the disciplines that they represent. I think that is important to be upheld by this clause.

KELVIN DAVIS (Labour) : Tēnā koe, Mr Chair. Kua roa ahau e ngaro atu ana ki tēnei Whare i te mea i te Raki ahau e whakataetae ana ki te tūru o Te Tai Tokerau engari, e pai ana ki te hoki mai. I runga i te tikanga o tēnei wiki, arā, te Wiki o te Reo Māori, ko te tino tūmanako ka taea e au te whakamāramatia ōku whakaaro e pā ana ki tēnei kaupapa i roto i tō tātou reo rangatira. Ka tū hoki ahau hei tauira mō rātou e kore e taea rātou i tupu ake pēnei i ahau, arā, horekau te reo Māori te reo tuatahi. E tū ana hei tauira mō rātou kia mōhiotia, e taea ana e tātou te kōrero mō ēnei kaupapa ahakoa te hōhonu me te whānui, he whakamāramatia atu ki te tini, ki te mano.

E mīharo hoki ana ahau ki te kaha o ōku hoa hei whakamāramatia ō rātou whakaaro e pā ana ki tēnei pire, me te hōhonu o ō rātou matatau, ō rātou mōhiotanga ki wēnei kaupapa. Ahakoa e roa ana e kōrero ana mō tēnei pire, he tohu tēnei e hāpai ana i te mana o tēnei rōpū arā te Royal Society of New Zealand. E tika ana kia kōrerohia wēnei kōrero e pā ana ki tēnei rōpū, me te whāititanga hoki kia kōrero pū ahau, kia hāngai atu ahau ki tēnei te wāhanga tuawaru e kōrero ana kia kore e riro e ngā mema o tēnei rōpū i ngā pūtea, i ngā moni rānei, mō ā rātou mahi. Nā reira, mihi kau ana ki a rātou e whakapau ana ō rātou kaha i roto i te ao tōrangapū, te ao pūtaiao, te ao hangarau, te ao e pā ana ki ngā tikanga tangata, rātou e mahi ana i ō rātou mahi hōhonu mō te kore utu. Kore rātou e whiwhi he paku aha mō ā rātou mahi, mihi kau ana ki a rātou.

Engari, tua atu i a rātou, ko te wāhanga rua me tesection 8(2)(a), ka hoatu he pūtea ki a rātou ngā kaimahi o te rōpū o te Royal Society of New Zealand. E tika ana kia utua rātou mō ā rātou mahi i a rātou e mahi ana hei whakatutuki ai i ngā wawata o te Royal Society of New Zealand. Nā reira, e tika ana tēnei i te mea mōhio ana a Aotearoa ko mātou te Rōpū Reipa te rōpū e ngākaunui ana ki ngā hiahia o ngā kaimahi. Nā reira e tika ana mō rātou kia riro ai he utu, he pūtea mō ā rātou mahi mō te Royal Society of New Zealand. E tika ana hoki kia whakahokia ngā pūtea kua whakapaungia e ngā kaimahi i a rātou e mahi ana, arā i te wāhanga 8(2)(c), “the payment of expenses incurred in the performance of office;”, e tika ana kia whakahokia ngā pūtea nā rātou i whakapaungia. He āhuatanga pai hoki, mō rātou kua whiwhi i ngā taonga i roto i te wāhanga 8(2)(d), rātou i whiwhi i ngā taonga mō ā rātou mahi. Nā rātou i tae ai, i whakatutuki ai i ngā āhuatanga e pā ana ki te rangahau o te pūtaiao me te hangarau. E pai ana mō rātou kia riro ai i a rātou he pūtea hoki. Nā reira e pā ana ki tēnei wāhanga tuawaru o tēnei pire, he wāhanga pai pērā i tōku hoamahi a Grant Robertson, i whakamāramatia ai. Nā reira mihi kau ana ki a ia mō tōna kaha ki te hāpai i tēnei pire.

[Thank you, Mr Chair. I have been away from this House a long time because I was in the far north contesting the Te Tai Tokerau seat. However, it is good to be back. Because of what this week means, being Māori Language Week, the real hope is that I will be able to express my thoughts on this matter in our revered language. I stand also as an example for them who grew up like me without the Māori language being my first language. I stand as an example to them so they know that it is possible for us to address these matters, despite their depth and breadth, and explain them as well to the masses.

I admire the efforts of my colleagues in explaining their thoughts on this bill, and the depth of their knowledge and understanding about these matters. While the debate on this bill has been lengthy, this signals that it is endorsing the status of this organisation, the Royal Society of New Zealand. It is right that comments about this organisation be made, but I must confine my comments directly to and focus on section 8 of the Royal Society of New Zealand Act, which states that members of the society cannot receive funding or money for their work. So I pay tribute to those people who worked hard in the political, scientific, technology, and humanities sectors, doing their work at great depth for nothing. They receive no financial rewards for their efforts, and therefore I truly acknowledge them.

But beyond them, there is section 8(2)(a), which provides funding to the staff of the Royal Society of New Zealand. It is right that they be paid for their work in fulfilling the goals of the Royal Society of New Zealand. This is right, because New Zealand knows that we of the Labour Party are the most committed to the needs of workers. It is right that they be paid for their work at the Royal Society of New Zealand. Workers should be reimbursed for what they spend while carrying out their duties, as in section 8(2)(c), which states “the payment of expenses incurred in the performance of office”. It is right that expenses incurred by them be reimbursed. Those who have received gifts, as provided for in section 8(2)(d), which relates to those who receive gifts for their work, have achieved and completed scientific and technological research. It is wonderful that they be paid, as well. As my colleague Grant Robertson said, section 8 is a good section. I acknowledge his efforts in promoting this bill. ]

It gives me great pleasure to return to the House after a 6-week absence while I was contesting, unsuccessfully, the seat of Te Tai Tokerau. Unlike my colleague Su’a William Sio, who today will have his first opportunity to speak on the Royal Society of New Zealand Amendment Bill, I spoke on this bill 6 weeks ago, and it is great to come back to the comfort of a bill that we have come to know and love so fondly. It is great to see that my colleagues are upholding democracy in this way. This is just a short continuation for the benefit of those who did not understand what I was saying earlier.

Briefly, in terms of honouring Te Wiki o Te Reo Māori, for people who are trying to learn to speak te reo, this is a good example of how second language learners like me are able to stand as an example and use te reo Māori to cover the breadth and depth of subjects. We should be able to speak te reo Māori regardless of what the topic is.

I also acknowledge those people who have expended a lot of energy for the Royal Society of New Zealand. They have achieved great things and have not asked for a cent in repayment. I just acknowledge them. It is wonderful that we have people working in the sciences, the technologies, and the humanities, who are able to expend their energy in areas and fields that they love for the benefit of New Zealanders and who do not expect a cent in return, although of course we in the Labour Party—the party of the workers—do agree with section 8(2)(a) of the Royal Society of New Zealand Act 1997, which states: “remuneration to employees of the Society … in return for services rendered …”. We believe that workers need to be paid justly, and congratulations go to the Royal Society of New Zealand on that. I refer also to section 8(2)(c) of that Act, which states: “the payment of expenses incurred in the performance of office;”, and section 8(2)(d), which states: “the grant of awards or prizes …”. People need to be acknowledged when they achieve great things in the sciences, the humanities, or the technologies. They receive prizes, and good on them for that.

As I said earlier, it is great to return to the House despite an unsuccessful campaign, but, of course, there is always 26 November. Kia ora.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : Tēnā koe, Mr Chairman Roy. I will pick up from where the previous speaker, Mr Davis, left off, because one of the important amendments that was made to the Royal Society of New Zealand Amendment Bill earlier on was to include te reo Māori as part of the interpretation of “humanities”. I thank Mr Grant Robertson for his explanation of some of the mechanisms by which members of the Royal Society could receive remuneration and I noted some of the awards that are available. Perhaps, one day, we will see someone receive an award for the work he or she is doing in the field of te reo Māori. I am not sure what research opportunities might be available, but certainly development of the language may be one. All languages develop over time. They are constantly changing and responding to the environment around them, and te reo Māori is no different in that regard. One might wonder what te reo Māori has to do with research and development, and I will get to that, Mr Chairman. I can see in your face that you are wondering where this is going, and I will get there shortly.

I was at a meeting last week in Palmerston North at the Bio Commerce Centre, which is a business incubator for innovative businesses. Many ideas come out of Massey University and the Crown research institutes in Palmerston North and the meeting was for entrepreneurs. It was an e2e meeting—an entrepreneur-to-entrepreneur meeting—and it was about sharing ideas. There was a presentation from one of the founders of Unlimited Realities, which is a Palmerston North company that employs about 70 people in Palmerston North and Wellington. It is a very innovative business and exactly the kind of business we want to see more of in New Zealand, and the presentation was made to a group of entrepreneurs. One of the people in the room wanted to start a business creating soft toys with a Māori cultural aspect to help young people in New Zealand to understand Māori culture and Māori mythology. The presenter actually said that this was really amazing. He said that part of what people are researching these days is how cultural capital can be included in new products, new design, and new ideas, and spoke about the fact that bringing that cultural capital of Māori mythology and Māori culture to something as simple as a soft toy instilled a lot more value into that object and was potentially a really profitable business. The presenter really encouraged that chap to continue with this idea and to try to take it further.

This is exactly an example, I think, of where the Royal Society might seek out someone who is researching Māori culture, or te reo Māori. It might look at the work that person is doing and see how that cultural capital might be invested into items that might prove to be profitable and that one could build a profitable business on. This is exactly the sort of thing that potentially could grow the New Zealand economy. So I think it was absolutely appropriate that Kelvin Davis used the Māori language in Te Wiki o Te Reo Māori to highlight an area that could have enormous growth. This could happen only in New Zealand; this is the really amazing thing about it, and I think it is something New Zealand does extremely well. Even in the area of tourism, which we know does not bring an awful lot of money into New Zealand per job—in productivity terms it is not the most productive enterprise, but it is an important part of our economy—there is an opportunity to research the ability to enhance the cultural aspects of tourism, and that is something New Zealand is absolutely at the forefront of. I could see members of the Royal Society doing this not for dividend or profit, of course, but, using their role in the Royal Society, to see how far they could take the use of cultural capital to enhance products in New Zealand.

COLIN KING (National—Kaikōura) : I move, That the question be now put.

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

Ayes 73 New Zealand National 58; Green Party 9; ACT New Zealand 5; United Future 1.
Noes 43 New Zealand Labour 42; Progressive 1.
Motion agreed to.
  • Clause 8 agreed to.

Clause 9 Fellows

GRANT ROBERTSON (Labour—Wellington Central) : Clause 9 of the Royal Society of New Zealand Amendment Bill amends the Royal Society of New Zealand Act around the questions of the Fellows of the Royal Society. It amends section 10 by omitting “Academy Council” in each place where it appears and substituting “Academy Executive Committee”, and also by omitting “science or technology” and substituting “science, technology, or the humanities”.

To take those two matters in reverse order, this particular part of the bill deals with parts of the Royal Society of New Zealand Act that talk about fellows. It is now worth doing a little bit of explanation of what it is to be a Fellow of the Royal Society. Mr Quinn earlier in the debate tried to suggest that perhaps he might be a Fellow of the Royal Society. I encourage members to listen to the description of what it is to be a Fellow of the Royal Society and to make up their own minds as to whether that is likely to be the case.

Fellowship of the Royal Society of New Zealand is an honour conferred for distinction in research or the advancement of science, technology, and now the humanities. Since its earliest days the Royal Society has made provision for there also to be honorary fellows from overseas institutions. I think we will come to discussing that in debate on clause 12, so I will not talk about those honorary fellows at this time. There are currently 366 Fellows of the Royal Society, and that, I think, says a lot about the esteem in which people who become fellows are held. It is not something that happens easily; it has to be based on a record of scholarship and of advancement of research in a way that is beyond the norm.

To anybody who is familiar with science in New Zealand—and I have here the names of the Fellows of the Royal Society—and works his or her way through the list of the Fellows of the Royal Society, it is clear that in section 9 we are talking about people of the highest achievement. Just looking here randomly, I see the name of Peter Barrett, who is from the school of earth sciences at Victoria University here in Wellington. He has been one of the people who have led, globally, the understanding of the Antarctic, and the understanding of the impact of climate change on the Antarctic. Peter has led global thinking on that issue. He has led a team of researchers from a number of academic institutions in New Zealand and overseas to understand Antarctica, and particularly the impact of climate change on the West Antarctic ice sheet, where there has been significant impact. Peter has largely moved on from full-time academic work now, but his work continues at Victoria University and I know that he continues to be involved in that issue.

Also among the Fellows of the Royal Society are people we might more traditionally associate with the humanities. They include James Belich from the Stout Research Centre, also here in Wellington at Victoria University. The Stout Research Centre, for colleagues who are not aware, is the research centre devoted to the study of New Zealand, essentially. It studies history, politics, and, in fact, the humanities. So there already are fellows who work within the humanities, and I am sure in future calls I can find my way back to the many people who have become Fellows of the Royal Society based on some excellent work. I note that there is a Fellow of the Royal Society named Alan Bollard, but it is not the Alan Bollard who is the Governor of the Reserve Bank, lest anyone be concerned about that. Clause 9 is about the fellows, and it brings the humanities within that.

In order to become a Fellow of the Royal Society, one has to be elected by an annual general meeting of the Royal Society, and that annual general meeting acts on the recommendation of the fellowship selection committee. Candidates get short-listed by fellowship selection panels from within each academic discipline. Through clause 9 we will be including the humanities as a new subpart of the selection of Fellows of the Royal Society. A process begins in December each year, so perhaps Mr Quinn could get an application ready now. Ms Mackey looks alarmed—she has missed the earlier debate about Mr Quinn, who believed that he may have been a Fellow of the Royal Society. We have clarified that he definitely is not.

Simon Bridges: Prove it.

GRANT ROBERTSON: He proves it by his presence, I say to Mr Bridges. That is what he does.

The panels receive nomination documents, work through a short list, and then make that recommendation. It is rigorous. It takes the best part of a year for people to put their applications in and to be assessed by subject-related panels, who work their way through to deciding how many fellows will be put forward. There are currently 12 of those fellowship selection panels; I suspect there will be 13 once this bill goes through. The work of the fellowship selection committees is then approved by the academy executive committee.

That brings us back to clause 9(1), which changes the name of “Academy Council” to “Academy Executive Committee”. I appreciate that there is quite a long time between each time that we debate elements of this bill. Just to refresh members’ memories, I say that we are changing under this legislation the name of the academy council; it is now called the academy executive committee. In fact, we have already done so, under an earlier clause. The reason we are doing that is that there is something called the Royal Society of New Zealand Council, which is its overall governing body. To avoid confusion, what was called the academy council is now called the academy executive committee. Its job is the nuts and bolts of making sure the awards, the prizes, and the membership are undertaken. That is what the academy executive committee does.

The council is the governance body; the academy executive committee is really the administrative body, making sure that it goes through and does the things it does. It is populated by scientists. When the society is making decisions about who should get an award, and who should be a Fellow of the Royal Society, that is done by the academy executive committee, which is what was previously called the academy council. Here in clause 9(1) we are making that change in respect of the part of the Act that revolves around the creation of fellowships.

Each year in October the fellows have an annual general meeting, where they look at the list of recommended candidates, along with a brief citation. The academy then votes to elect the recommended candidates to fellowship. So there is actually a threefold process, starting out at the beginning with nominations, going to those discipline panels, and then a recommendation coming to the fellows’ annual general meeting via the academy executive committee. It is a rigorous process. People do not get to become Fellows of the Royal Society by accident. It is something to be proud of—

Sue Moroney: Like Paul Quinn.

GRANT ROBERTSON: —and Paul Quinn, unfortunately, I suspect, will struggle, although he does have until December to pick up his game.

Simon Bridges: Quinn for president!

GRANT ROBERTSON: I will remind Mr Bridges of that, one day. Currently up to 12 fellows are elected annually, so that is the limitation: 12 fellows annually. One of the concerns raised at the Education and Science Committee by the Wellington branch of the Royal Society was whether bringing in the humanities, given that there are only 12 fellows in this example, could dilute or put pressure on the number of fellows. But as we have seen, there are already some fellows from the humanities area. In many ways, it makes it an even more exclusive club and the standard is even higher for becoming a Fellow of the Royal Society. To have only 300 or so of them at this time certainly recognises that level of excellence.

Nominations to the fellowship remain valid for 5 years. If someone is not successful the first time, their nomination stands for a 5-year period. Obviously, they will continue to develop their academic career at that time. After the 5 years elapses, there is a 3-year stand-down period. One is in the ballot for 5 years and if one is not successful after that time there is a 3-year stand-down period, then one can be put forward again after that point. I think that indicates that there is a very high standard for becoming a Fellow of the Royal Society.

Effectively, clause 9 puts in place the building blocks for having people from the humanities as fellows. We are changing the language from academy council to academy executive committee, then dropping in the humanities so that people from the humanities can now be part of the process for being a fellow.

The fellowship selection committee works closely with the academy executive committee, as in clause 9(1), and I am not aware of any major conflicts in the past with the Royal Society. Other members may be aware of that, but I think it is a process whereby the people who are already Fellows of the Royal Society help bring through new people. Under clause 9(2), those people will be able to be from the humanities. I think that a very important part of the Royal Society embracing its new broader mandate is to have people from the humanities reach the highest level of membership of the organisation, and that is to be a fellow of the society.

There are a number of other matters that I can come back to if need be in future calls as to the rules and fellowship by-laws, and I will be happy to do that if members wish.

Hon STEVE CHADWICK (Labour) : It is wonderful to be back debating the Royal Society of New Zealand Amendment Bill. I think that each time we come to the Chamber, we all learn so much more. I acknowledge the sponsor of the bill, Grant Robertson, who is in the chair. He has demonstrated an in-depth knowledge of, and passion for, this subject in bringing the bill to the Committee of the whole House again today.

I was a bit disappointed to hear a usually very reasonable colleague in Government, Louise Upston, calling out about how many women were there in the society. I am sure that the member for Taupō will be delighted that women can be fellows, too. She talked about equity issues. I do not think that is for politicians to decide. Members will be pleased to know that in clause 9 it is something that is left entirely to the academy executive committee. I am not sure whether the sponsor of the bill in the chair can clarify whether the academy executive committee does look at grounds of equity and at Māori representation, as well as an extension to include the humanities, which this bill proposes at the request of the Royal Society. But I daresay we will be revisiting this bill in the future and we may be asked to include something else.

I congratulate our colleague Te Ururoa Flavell on proposing an amendment that takes te reo Māori into account. I think that is a wonderful addition along with the humanities. When we know that we have Professor Belich contributing as a fellow, along with 366 other wonderful New Zealanders, we can see that perhaps there is a role for other fantastic New Zealanders to be considered by the Royal Society of New Zealand for the status of this honorary fellowship in the future, which is clarified in clause 9(1).

One of the issues that I do not know about, and perhaps the sponsor of the bill could clarify—and it is a serious issue—is whether these fellowships are ever awarded posthumously. I want to acknowledge seriously in the Chamber today the contribution of a wonderful gentleman who was buried today here in Wellington, and that is Dr Lindsay Haas. He was a world-renowned neurologist who has worked in the field of Guillain-Barré syndrome, which is a very obscure condition linked with eating contaminated chicken. We have some neurologists in this country who may never be nominated by the Royal Society to be recognised as a fellow. In our dealings with Dr Lindsay Haas he was a very compassionate, passionate, and humane New Zealander as a neurologist and as a leading expert in this field in the world. It would be wonderful if posthumous recognition by a fellowship could be considered. I seriously do not know whether that is part of the brief of the academy executive committee, which looks at the allocation of fellowships.

When we think that there are 366 fellows on the list that Mr Robertson referred to, we see that they are our iconic New Zealanders. Having known Dr Lindsay Haas as I did, and given the acknowledgments that came from neurologists all around the world today at his funeral service, I can tell members that he was a fairly fundamental Kiwi bloke with a new migrant family from Germany who settled here in New Zealand. I do not think he ever saw himself as needing or warranting the status of a fellow in order for him to contribute to the field of medical science, but sometimes these awards are acknowledged by their own contemporaries and by their own peers, and to become a Fellow of the Royal Society is the greatest recognition of their contribution to science in New Zealand. It is a privilege to acknowledge in the Chamber the contribution of Dr Lindsay Haas to New Zealand society and to medicine. He was the sort of practitioner who had a library around him in the Wellington school of medicine that other neurologists envied. He could pull out a research proposal and say that, actually—

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) : I am happy to take a call on the Royal Society of New Zealand Amendment Bill and I commend Grant Robertson for the types of amendments that I think, had they been introduced some 30 years ago, would have seen some of the most esteemed Māori academics come through. I can fathom that probably out of the 366 current fellows, not 2 percent would be Māori. The reason is simply this: the entry point in terms of academic excellence and the recognition of that historically amongst Māori was really in the subject area of the humanities: our language, our art, our culture. Steve Chadwick prompted me to think about some of those early experts and academics, and if I were to cast my mind back they would be people like Te Rangi Hīroa—Sir Peter Buck—Maharaia Winiata, Māui Pōmare, who was a former member of this House and a doctor, and who, by the way, introduced the Tohunga Suppression Act, Hoani Waititi, who died before his time, Professor Kāwharu, and John Rangihau. Those are but some of the recognised leaders in our academic areas who have now passed on and who could have been recognised had an amendment like this been introduced. These days I think we have more contemporary figures like Mason Durie, Dr Linda Smith, and Patu Hōhepa, and there are many more.

I think this type of amendment makes way for recognised leaders and experts who are proficient in all manner of the humanities’ subject areas, but specifically there are a number of Māori who could certainly now be recognised as leaders in their field of study. I think we can embrace that as being very much a progressive move by the Royal Society. I have heard the Royal Society referred to as an old boys’ club that prides itself on its small membership and its patch protection. So I am pleased that a Labour member has sought to advance its interests in order to open up the field, so to speak, to be more inclusive in this area.

I should mention, by the way, that if there were posthumous recognition, certainly within my own tribe we would go no further than Pei Te Hurinui Jones, who made a huge contribution to the wealth of knowledge and retention of tribal histories, language, and culture within our own tribe. He was certainly recognised with the same regard with which the people of Ngāti Porou recognised the contribution of Apirana Ngata.

Clause 10, as Grant Robertson has clarified, opens up a process for recognising people’s contribution and expertise and appointing them. I have a question for Grant, in terms of promoting this clause: was it, in fact, intended that there could be an opportunity for posthumous recognition? If that was discussed when this bill was being put together with the Royal Society, could it be an opportunity to recognise posthumously those who were involved in the humanities? I think that becomes a question of some significance, because the Royal Society is moving with the times. It is certainly broadening the inclusion of subject areas in terms of their role with the society, and the society is recognising that more and more scholarship is being done in the area of the humanities, which will help our society overall.

I look at some of the previous awarding of scholarships in the areas of the improvement of teaching and the role of teachers in the classroom. I look at a number of funded scholarship projects at Waikato University. I know that the academics there have made a huge contribution to advance teaching practices in the classroom. In fact, Te Kotahitanga is but one of the current initiatives that have been promoted through Waikato University, and it has had a huge impact on improving the achievement levels of Māori within our schools, and within our mainstream schools in particular. Kia ora.

SU’A WILLIAM SIO (Labour—Māngere) : I acknowledge at the outset that Grant Robertson, the member in the chair, explained the meaning of “fellow”, because if a worker simply picked that term up and looked at it, it would not necessarily make any sense. It could be that fellow, this fellow, that big fellow, that skinny fellow, and that black fellow. So in hearing what the member has now said, I acknowledge the fact that it is a prestigious role, and that we are looking at the cream of the crop. But I wonder why the definition of “fellow” was not included in the bill, and whether that would not be an appropriate way of allowing people who are unfamiliar with the goings-on of a society like this to know what it really means. I would like the member to respond to that request, if that is possible.

The second thing is that I want to know from the member whether, by extending the subjects to include the humanities, he foresees that we will have an expanded membership of fellows. The member has said that there is a range of about 366 fellows, so what are the projections he foresees now, with the society’s expansion to include the humanities?

The other thing I am now curious about is whether we have ever appointed Pacific fellows to the society. It is a known fact that we are not getting enough young Pacific people into the sciences, so I wonder whether the member foresees that by including the humanities we will be able to acknowledge people who are doing research in those particular areas, and acknowledge the distinction of the work they will be involved in.

I acknowledge Māui Pōmare, whom Nanaia Mahuta mentioned earlier. Pacific communities know Māui Pōmare and the area from which he hails in Taranaki. It was Māui Pōmare who visited the Samoans who were imprisoned in Mt Eden by the Government of the day when the New Zealand administration was trying to quash the protest of Samoa mo Samoa, the Mau movement for independence. It was Māui Pōmare and another elder of that particular time whose name I cannot remember. I am pointing out to the member in the chair that there is a real need for including, or at least identifying and acknowledging, Pacific people, as well, who are showing distinction in their particular areas of research, and I am hopeful that by including the humanities we will see a broader range of people being eligible.

The other thing I want to ask the member is whether including the humanities—clause 9(2) omits “science or technology” and substitutes “science, technology, or the humanities”—includes research into languages. I want to point that out to Mr Chair, because he is looking at me quite evilly. We are celebrating te reo Māori this week, and we have a group of Pacific researchers and teachers who are protesting against the cuts by the Minister of Education to Pacific languages—cuts to the promotion of the five Pacific languages, and cuts to the Tupu and Folauga series. Would the humanities include those people who are researching and showing distinction in that area of Pacific languages? I think that is an important area for the future.

I will also ask about clause 9(1), which omits “Academy Council”—

Dr ASHRAF CHOUDHARY (Labour) : I will follow on from what my colleagues were saying in this debate on the Royal Society of New Zealand Amendment Bill regarding the membership of the Royal Society for minorities—Māoris, Pacific people, and also women. I think it is very important to see several things there. Historically, of course, the Royal Society was more science-based. It was scientists who were the members of the Royal Society, and again, historically, it was men—mainly European, and maybe some Asian men who had done advanced studies, had done PhDs, and had done some really well-known research. They became members, then Fellows of the Royal Society. Clearly, as we go through this bill, we have the humanities included, and I am quite sure we will have a lot more women coming through to become fellows—not just members, but fellows—of the society, as well as Māoris and Pasifika people. I am sure they will be coming through to become fellows.

H V Ross Robertson: Don’t forget about the Palagis.

Dr ASHRAF CHOUDHARY: Yes, the Palagis are already there. There are 367 fellows, so there are probably plenty of them there, I tell Mr Ross Robertson.

This is an area that is very close to my heart, because while I was at Massey University researching into agricultural engineering, I was a member of a number of societies—the American Society of Agricultural and Biological Engineers, the Asian Association for Agricultural Engineering, and the International Soil Tillage Research Organisation. These were the associations and societies I was a member of. Of course, I never sought to become a fellow. The question was raised earlier. Normally to become a fellow, one has to be nominated by others—nominated by one’s peers. People instigate others and nominate people to become fellows. Of course, I never sought to become a fellow. I am quite sure I would have been a fellow of those societies if I was still researching there. But the good news is that I know my son will become a Fellow of the Royal Australasian College of Surgeons very shortly. He is now into vascular surgery, and I think next year he too will become a fellow of that college.

There are many societies that have different categories of membership. People become members, then they become fellows. Often, as I said earlier, one becomes a fellow when one is at the top of one’s profession. A person who has done a lot of research, published a lot of papers, and written books and had them published, can then become a fellow. I think it is very important to recognise, as we recognise the humanities, that as we get more members involved in the Royal Society, they also become Fellows of the Royal Society. With this amendment, I am quite sure we will have more women coming through and more Pasifika and Māori people coming through to become fellows. Historically, some of these people have not done a lot of science. We are very familiar from going through university that very few Māori students have studied science and technology. Also, in previous years there have not been many women studying those subjects. Of course, nowadays we have a lot more women studying the sciences.

In the medical profession there are a lot of surgeons and physicians who are fellows. Certainly there will be encouragement for those groups, which have never been part of the membership of the Royal Society, to come to the level of being fellows of the society. Clearly, a fellow of the society is a person who has achieved at the highest level and is recognised by their profession—not only by their peers, but also by their profession internationally. As I said, this is right across the various disciplines, including engineering and the sciences.

GRANT ROBERTSON (Labour—Wellington Central) : It is perhaps time now to respond to the first tranche of questions from members on the issue of clause 9 and the changes we are making to who is made a fellow and to the committee that makes the final approval.

Firstly, I will answer one set of questions that Nanaia Mahuta asked. The number of fellows has been kept at 12 new fellows each year. In effect, by including the humanities but keeping the number of fellows at 12 we are raising the bar as to who can become a fellow. That is a decision that in time the Royal Society might decide to revisit, because there will now be a much wider pool of people who can potentially put themselves forward to be fellows. But for now the number is staying at 12.

Both Steve Chadwick and Nanaia Mahuta asked about posthumous fellowships. It is clear when we look at the key clause in the rules for becoming a fellow—I am reading from clause A6 of the academy council’s bylaws of June 2010—that “No person shall be nominated or elected as a Fellow unless he or she: i) is a citizen or permanent resident of New Zealand; and ii) has been a New Zealand resident for at least three years during his or her career; and iii) normally spends at least six months in New Zealand each year.” So it is quite clear that to be a fellow of the society one has to fulfil those criteria. Sadly, if one is deceased one is not able to do that.

However—and we come back to this in a later clause, so I do not want to go into too much detail now—the question of honorary fellows of the society is much more open. It is at the absolute discretion of what is now called the academy executive committee. I would presume from that, and from reading through the by-laws of the society that cover honorary fellows, that there is nothing that would exclude a posthumous awarding of a fellowship. I certainly agree with Nanaia Mahuta that a number of people could be put forward for that. One of the very positive changes made during this Committee stage debate that shows the value of an extensive Committee stage debate was Te Ururoa Flavell’s amendment that brought te reo Māori and Māori studies within the humanities. Should people want to go down the path of recognising people from disciplines that have not previously been part of the Royal Society, there may well be a way to do that via the honorary fellowship awards. So I do think it is possible.

But it is quite clear when one goes through the list of current Royal Society fellows that there are very, very few Māori. In fact, having just flicked through it now, and at the risk of what could be called racial profiling, and at the risk of missing out some Māori because I am not familiar with them, I see only one Māori fellow and he is Mason Durie. Mason Durie is an academic of significant scholarship and research, but nobody else on the list is identifiable to me as Māori. Things get worse when we head to the Pacific sector. I cannot identify any one on the list of fellows who has a Pacific background. Su’a William Sio asked about this, and I am sure that by including the humanities there will be a change. I think of someone like Albert Wendt, who quite clearly would be deserving of a fellowship. To pick someone out is perhaps a bit unfortunate, but I am sure there will be such people.

In terms of Dr Choudhary’s intervention, there are some fellows from ethnic communities in New Zealand. Manying Yip is in here, as is Dr Choudhary’s former colleague Harjinder Singh from the Riddet Institute at Massey University. There is some representation, but I do think it is quite clear that clause 9(1) will now broaden the range of people who are likely to become fellows, and that is a very, very good thing.

The question was asked about the kinds of people who are fellows of the society now, and I can think of one person who has graced this Chamber. Simon Upton is a Fellow of the Royal Society and a person with a broad range of scientific knowledge. He was a terrific science Minister. In another life I worked for Simon Upton as a foreign affairs official, and he brought an incredibly scientific brain to that job. He was the chair of the United Nations Commission on Sustainable Development when I worked with him. The commission was charged with developing an oceans policy for the United Nations, and Simon Upton was able to bring his extensive scientific knowledge to the table to ensure that both a political approach and a scientific approach were taken. He is a Fellow of the Royal Society who already has a humanities part to his background. Simon Upton has extensive experience, and is now working at the OECD on sustainable development issues.

Another couple of people whom I have had the privilege of working with are also Fellows of the Royal Society and are covered by clause 9. One of those is Richie Poulton, who runs the multidisciplinary centre at Otago University. That is the centre that works with a cohort of people born in 1972 at Queen Mary Hospital in Dunedin. That longitudinal study has the highest retention rate in the world; 96 percent of the people who started in that longitudinal study in 1972 remain in it now. It is a remarkable study, which Richie Poulton, a fellow of the Royal Society, has led. It now has not only those people; of course, a lot of those people now have children. Those people are in their late 30s and their children are now part of the study. The centre has gone back and spoken to the parents of the people in the study, as well, so three generations are involved. The work that Richie Poulton is leading down there has a whole genetic basis to it. There is a lot of work on genetic make-up. An awful lot of the work has been used by the current Government and also by previous Governments on things like conduct disorder and being able to understand and predict some of the issues that children have in early life that may lead to problems in later life.

Richie Poulton is a Fellow of the Royal Society on the basis of that work, which is internationally renowned. That is the standard we are talking about. With only 360-odd fellows, we are talking about a certain standard of research and scholarship. I absolutely respect the comments and questions that colleagues have put to me about fellows coming from backgrounds other than the traditional European male background that dominates Royal Society fellowship. I am sure that as time passes and the number of people from Māori and Pacific backgrounds who participate in tertiary education increases, which it happily did under the Labour Government, we will see those people flow through into fellowship of the Royal Society.

I have just one more point in regard to the kinds of people who have membership of the Royal Society. They are people who are at the cutting edge. Recently in the Dominion Post some colleagues may have read about the work of a father and son combination. The father is Brian Robinson, and he has developed a wound healing gel. He began by working with people who had had nose reconstructions, and his wound healing gel makes wounds heal more quickly. It is non-invasive. There are no stitches; there is nothing like that. It has been developed by a father and son combination. Brian Robinson is a chemist. His son is a dentist, actually, and he has obviously used the gel within the dental area. Brian Robinson is a Fellow of the Royal Society. Just last week the work that they have been doing was patented, and it will now be taken on by American companies, I am quite sure. That is where a lot of the work in relation to leading edge science goes. So Fellows of the Royal Society are not just people from the past who have developed a scientific record and are now in some form of semi-retirement. They are people who are at the cutting edge of science. Brian Robinson is certainly one example of that kind of person.

To sum up those questions, I think it is sobering to look at the list of Fellows of the Royal Society, and, yes, it needs to be enhanced by greater representation from Māori and Pasifika communities, and other ethnic minorities, and also women. There are a number of women on the Royal Society fellows list, but the number is not in proportion to even the number of women academics, let alone the number of women in society. I think we respect those who are Fellows of the Royal Society, but we recognise that in clause 9 today we are beginning a process that will see an expansion of the number of people who can be part of that list, and also, perhaps, a change in the demographic of the people who can be part of it. I thank my colleagues for having raised those questions, because they are important. I think fellowship of the Royal Society, which is covered by clause 9, will continue to be the pinnacle of achievement for people in the science and technology areas, and now, happily, for those in the humanities areas, as well.

SUE MORONEY (Labour) : It is very humbling to rise to speak to clause 9 of the Royal Society of New Zealand Amendment Bill, and to hear about the fellows. It is very humbling indeed to hear about some of the work that those fellows have undertaken to reach this esteemed place within the Royal Society. I think the Royal Society must be thrilled to know that we are already up to clause 9, because, as we heard in question time today, its expectation in 2010 was that it might take 5 years to get this legislation through. The fact that we are here today, already up to clause 9, I think must show that we are galloping through, are we not?

I hope—I know, in fact—that the society is very pleased with the amount of debate on this bill. Just last evening I had the opportunity to host the Speaker’s Science Forum, which is held in conjunction with the Royal Society. As it was the last in the series in this parliamentary term, I had the opportunity to talk with the president of the Royal Society, Diane McCarthy. She said to me that they are so enjoying the debate happening in relation to this bill, because what she essentially said to me was that they do not feel as though they have had as much publicity in many, many years as has arisen from the debate on this bill. So I am pleased to be up to clause 9 already, talking about the fellows.

I have some further questions for the member in charge of this bill, Grant Robertson. When he talked to us about the process, I noted that the process by which fellows become Fellows of the Royal Society is very thorough and robust. My question is about the nomination process. We heard that people appear before a panel, which assesses the nominations. Once those nominations are accepted they stay viable, I guess would be the way I would put it, for a period of 5 years. That means, as I understand it, that if they are unsuccessful in being one of the 12 esteemed people accepted as fellows the following year, they can keep their nomination coming back for 5 years before it has to be withdrawn. Then there is a period—I guess a cooling-off period—before they can be nominated again.

As we have identified in the course of debating this clause, by including people from the discipline of the humanities among the group who can now be nominated to become fellows, will we create a logjam effect? What I mean by that is that there are people now who will have been nominated before this clause is changed, and they will not be from the humanities. Therefore, for another 4 years, I imagine, their names will continue to roll through this process. Does that mean that there are fewer opportunities for people who can be newly nominated because they are in the discipline of the humanities—to get their name in the pool, so to speak?

Maybe I am exposing my ignorance of this process, because I have just realised I am talking about pools as if we are talking about a game of soccer, or something like that. I am just trying to understand how quickly we expect that by amending clause 9 we will see the sort of diversity that I think certainly this side of the Chamber has expressed a very keen interest in seeing. We are hoping that with the inclusion of the humanities, by amending clause 9, we will see more women, more Māori, some Pasifika—by the sounds of it, it seems like we do not have any Pasifika people in that category at the moment—and people from other ethnicities becoming fellows. I think we on this side of the Chamber want to see that diversity that is represented in the great academic work undertaken in this country. We want to see that happen sooner rather than later. I suspect that the process of people’s nominations staying live, as it were, for 5 years will make that somewhat difficult. We will see that it might take longer than we would hope in amending this clause.

KELVIN DAVIS (Labour) : As Grant Robertson has already said, under section 10 of the Act “The Academy Council may from time to time, in accordance with the Academy bylaws, elect as a fellow any person who in the opinion of the Academy Council has achieved distinction in research or the advancement of science or technology.” So it was quite a surprise to all of us that Paul Quinn believed he had a case to answer in order to become a Fellow of the Royal Society. I guess he was confused from his form 2 science test—you know, magnets, rocky shores, and all that—when he got six out of 10. The teacher said “Well done, Paul.”, and I think he might have thought that it meant he had achieved some sort of distinction. As Grant Robertson said, he has time before November to get his application in. I believe they may still accept applications in crayon, so if he sharpens the point a bit, and forms his letters properly, he may be in. There is old Paul there, and he is a good fulla, I have to admit. But it is probably more the case that he is a good “fulla”. I think he thought this was about fullas, not fellows, so if he does not actually get in, he might be able to form his own “Fullas Society”.

It is interesting that in looking through the list of previous fellows and talking about Paul Quinn, immediately my eye went straight to the 2007 recipient Professor Richard Faull, who was recognised for his ground-breaking work in understanding the human brain. I immediately thought of Paul Quinn there. I think the difference between Richard Faull—who has studied the human brain and who has done some amazing work on the regeneration of the human brain—and Paul Quinn is that Paul Quinn thinks that the study of the brain is rolling his eyes to the back of his head and having a look, but he suffers from claustrophobia. When we go through the list of fellows there, we see some remarkable achievements by some remarkable people, and Richard Faull is one of those people. As I said, he has done some remarkable studies in the regeneration of the human brain, and it is that sort of high-level achievement that sets these people apart from ordinary, everyday scientists or researchers. They have made some huge advancements for people—for humanity. They need to be encouraged and recognised, and we need to celebrate the successes they have had. Such are the people that Grant Robertson was talking about: Brian Robinson and his son, with that gel that cures wounds. Is that it?

Grant Robertson: Yep.

KELVIN DAVIS: It is absolutely amazing stuff. That is why we really do need to invest in research and development. We should not be just relying on the work of the Royal Society of New Zealand to do amazing research and to develop amazing products, but also continuing to invest in research and development in many areas, because those are the sorts of products that will really progress New Zealand. An economist said that one entrepreneur—and I guess the people who can develop these products are very entrepreneurial—is worth a thousand farmers. If we have all these fellows who are generating this outstanding research and making these advancements for New Zealand and for the world, they need to be encouraged not just through the Royal Society of New Zealand but also through investment in the research and development funds that I know this current Government has in fact cut.

I agree entirely that there are not enough Māori or Pacific Islanders in the list. Certainly, as I scan down the list between 1991 and 2009, I see there are no women. That, to me, is a crying shame, because we know the contribution that women make to the sciences, the humanities, and technology. Women need to be recognised and encouraged, as well, for the outstanding work they do.

MELISSA LEE (National) : I move, That the question be now put.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : I have been listening closely to the debate on clause 9 of the Royal Society of New Zealand Amendment Bill, which amends section 10 of the original Act. It refers to Fellows of the Royal Society of New Zealand. I have been listening intently as people have referred to different groups within society who we feel are underrepresented in the Fellows of the Royal Society. I share my colleagues’ hopes that those people might find they become better represented with this expansion into the humanities.

I would like to reflect on something we can all celebrate, and that is the representation of people from Palmerston North in the list of Fellows of the Royal Society of New Zealand. In a quick flick through the list on the Royal Society’s website, I found 27 people from Palmerston North. The population of Palmerston North is about 80,000 people, which is about 2 percent of New Zealand’s population. By my rough maths, 7.5 percent of the Fellows of the Royal Society of New Zealand are from Palmerston North. We are punching well above our weight and that is something to celebrate. I think it also reflects just how important research and development, science, and technology are to Palmerston North—

Simon Bridges: Local MP.

IAIN LEES-GALLOWAY: It is something I like to celebrate wherever I go, I tell Mr Bridges. It is a very important part of the Palmerston North economy. Off the top of my head, I think of people like David Penny at the Allan Wilson centre for molecular ecology and evolution at Massey University, and I think of—

Dr Ashraf Choudhary: Mason Durie

IAIN LEES-GALLOWAY: I think of Mason Durie, the member is absolutely right. Mason Durie is someone who has achieved at a very high level and has become a Fellow of the Royal Society.

These names are just picked randomly. They are no more important or more significant than any other of the 27 names on the list. Brent Clothier is a soil scientist and environmental scientist. He is the leader of one of New Zealand’s major soil science research programmes, the Sustainable Land Use Research Initiative. His work is all about tracing the fate of water and chemicals in production systems and in the environment. That is such important work when we think about the impact of agriculture on our waterways. Again, this is a huge issue in the Manawatū, with the Manawatū River coming under a bit of fire for being one of the more polluted rivers in New Zealand, and the work that someone like Brent is doing to assist the agricultural sector in tracing those chemicals as they move through the environment and move through environmental systems is hugely important not only to our environment but also to our economy as we try to ensure that we maintain our “clean, green” brand internationally. Another person we could focus on is Bryce Buddle, who is at the Hopkirk Research Institute, I believe. His work is focused on immunology, microbiology, and applied science, covering a range of animal diseases. He has a very advanced understanding of livestock diseases, including mastitis in dairy cows, orf virus in sheep, pneumonia in sheep and goats, and yersiniosis—I think is the word—in deer. Of course, having a better understanding of all those diseases is, again, economically very, very important to New Zealand and to our agricultural sector. I could also talk about Dr John Caradus and his work on clover—in fact, internationally he is known as “Mr White Clover”. He is really right at the forefront of this research.

I suppose what this reflects is just how important the work of these fellows is, how important science, research, and development are to our agricultural sector, just how much agriculture has to gain from a much more concentrated focus on research and development, and how important better Government support for research and development would be to the work of those gentlemen I highlighted. I think one could highlight any number of people working in Palmerston North on research and development, which is so important to developing our agricultural products and developing the way in which we undertake agriculture in this country to improve our environmental impact.

SU’A WILLIAM SIO (Labour—Māngere) : I will try to not take my full time here. I think clause 9, “Fellows”, in the Royal Society of New Zealand Amendment Bill is really important, particularly because for me—and I speak for myself in this—this is the first time I am hearing about the work of the Royal Society of New Zealand. I would be interested to hear from the sponsor of this bill about the background of the fellows and how that name came to be. In this day and age, I would say it is a very male name. Why did they not call it “sheila”? I would be interested to know the background to how the society arrived at that particular award. I do not mean to diminish or undermine the value of the award. I recognise that it is a prestigious award and I recognise that it is probably at the same level as a Nobel Peace Prize, but I am interested to know from the sponsor of the bill the background of the particular name of “fellow” and how that has come to describe this particular award.

I would also like to hear from the sponsor—and I recognise what other speakers have said—about the low numbers of women, Māori, Pacific, and people of other ethnicities. I think it is important that the Royal Society works toward identifying and recognising the cream of the crop of researchers in these particular areas. Particularly as our nation moves forward, we need to hold them up as examples and as role models for the next generation that comes through. My question is: does the Royal Society have a plan for increasing, or at least generating, the competition out there so that we are seeing the cream of the crop coming through? I would not like to see the Royal Society follow the example of the National Government, which has no plan at all. That is why we are in the economic mess we are in at this particular time, and I do not want to see the Royal Society in a similar mess. I ask whether the Royal Society has a plan to promote that.

I come back to clause 9(1), which changes the name “Academy Council” to “Academy Executive Committee”. Will the changing of the name also change the status and the function of the council? Because I was not a member of the Education and Science Committee, which heard the submissions on this bill, I wonder what the submissions from the public said in reference to changing the name. Often when we change long-held names of societies such as the Royal Society of New Zealand that have a long history, I would suspect that there is a lot of reluctance to change. I would be interested to hear what the public have had to say.

For many working families throughout New Zealand, the work of the Royal Society of New Zealand is probably not well known. If we are to increase the number of people we identify and acknowledge as fellows, for the recognition of their work and for deserving to be held up as role models for the next generation, then the idea of having a specific plan to roll that out is really the key. As we all know, if there is no plan to make things happen, they do not happen, and we tend to then think that somebody will pluck an answer out of nothingness, as we have often heard from the other side of the Chamber.

The final matter that I raise is the cost of changing the name. What sort of impact will that have on the Royal Society? Noting that there is to be no dividend or profit for any of the members, I would be curious to know how the society will maintain its work, and, in particular, how one would be prepared to fund such a plan to promote the distinction of the work.

GRANT ROBERTSON (Labour—Wellington Central) : I will speak very briefly, as I am conscious that other colleagues want to speak. Su’a William Sio asked about the origins of the term “fellow”, and using a research tool that the Royal Society may not approve of—Wikipedia—I am able to answer Su’a William Sio’s question.

The appointment of fellows was first authorised on 22 April 1663 by the original Royal Society in the United Kingdom. Originally, 94 fellows were appointed—perhaps not through the same process as that of the Royal Society of New Zealand—and another four were appointed a little later. They were known as the Original Fellows of the Royal Society. Interestingly, two-thirds of them were not scientists. Wikipedia speculates that one of the reasons for that was that the Royal Society needed money. It had no funding from the Crown and it needed money to operate, and that would appear to be the reason that those fellows were charged an entrance fee of £4 at the time. But over time, obviously, the nature of being a fellow changed in the United Kingdom, as it has in New Zealand, and the traditions about how one becomes a fellow have changed significantly.

Just while we are on the subject—because I think it is interesting to reflect on the importance of the Royal Society—I note that the Royal Society in the United Kingdom has only 1,300 fellows even today. So there are very, very few. The 300 New Zealand people can do the maths and work out that there are proportionately more here in New Zealand, but the Royal Society in the United Kingdom, from which the Royal Society of New Zealand came, is still a very exclusive club. The original members of that Royal Society included Christopher Wren and all sorts of people who were founding fathers of science. So the term “fellow” is certainly a historic one. I suspect it has been retained, despite gender connotations, because of that link to as far back as 1663. I thought I would clarify that matter for the member.

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

The CHAIRPERSON (Lindsay Tisch): The question is that the question be now put. Those of that opinion will say Aye—

Su’a William Sio: I raise a point of order, Mr Chairperson. I am sorry, Mr Chair, but I did want to raise the information that Mr Grant Robertson raised.

The CHAIRPERSON (Lindsay Tisch): No, I did not accept the member’s call. I accepted the call of the member over here, Mr Bridges, and that is the end of the matter. The Committee will decide whether the motion is agreed to and the question is put.

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

Ayes 74 New Zealand National 58; Green Party 9; ACT New Zealand 5; Progressive 1; United Future 1.
Noes 42 New Zealand Labour 42.
Motion agreed to.
  • Clause 9 agreed to.

Clause 10 Companions

GRANT ROBERTSON (Labour—Wellington Central) : Clause 10 brings us to another category of members of the Royal Society, and this time we move to the category of companions. This clause makes a reasonably substantial change to the current Act, so it is worth reflecting on that change in calls to come.

The class of membership called companions was introduced to the Royal Society of New Zealand Act only in 1997, which is the last time this House updated the Act in order to include social sciences in the ambit of the Royal Society. Companions are defined in the Act at the moment as “any person who, in the opinion of the Council, has achieved a high level of eminence in the promotion or encouragement of science or technology.” That is how the Act currently reads. So it is quite a different matter; it is a question of people whose responsibility is around the promotion and advancement of science and technology in New Zealand. As the Royal Society itself says, being a companion implies some level of responsibility and the people in question have responsibilities to promote and advance the society. Companions are expected, where they are able, to contribute to activities within the society and the wider community that foster a culture that is supportive of science and technology, promotes and advances science and technology, and enhances the awareness, knowledge, and understanding of science and technology in the New Zealand education system and in society generally. So companions are people whose responsibilities involve promoting science. They are not necessarily scientists themselves.

Clause 10 alters quite significantly the way in which the current section in the Act, section 12(1), reads. It does that by including the humanities, as has been done in other clauses, but also by rewording it to make it a little clearer as to what is being sought when somebody is elected as a Companion of the Royal Society. So to give people some examples of exactly what we mean by people who are involved in the promotion of science, I note that one such person who is a Companion of the Royal Society is Helen Anderson. Helen Anderson has recently finished as the chief executive of the Ministry of Science and Innovation. I had the privilege of working with Helen Anderson when she was a science adviser in the office of the Hon Pete Hodgson when he was the Minister of Research, Science and Technology. Helen Anderson is a person who does in fact have a scientific background, but the main part of her working life has been the promotion and advancement of science in her many roles in the Ministry of Research, Science and Technology, and most latterly in the role of chief executive of the new Ministry of Science and Innovation.

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

GRANT ROBERTSON: When the Committee rose we were discussing clause 10, which is about what happens with companions of the Royal Society, a class of membership of the Royal Society devoted to people who have achieved eminence in the promotion or encouragement of science and technology. With the change being made in clause 10 this will include people both in the science and technology area and also in the humanities. As we rose I was giving some examples to the Committee of the kinds of people who are companions of the Royal Society, to give the Committee an idea of the roles these people have played. This is different from pure scientists; these are people who have promoted and advanced science, particularly in education. We were discussing Helen Anderson, the recently finished chief executive of the Ministry of Science and Innovation; Margaret Austin, a former member of Parliament—

Chester Borrows: She was a good old girl.

GRANT ROBERTSON: Chester Borrows is right; she was a very nice person—that is what I am sure Mr Borrows just said. Margaret Austin has had a role in education and science, and she has been on the council of Lincoln University for a significant amount of time. Bob Brockie is a Companion of the Royal Society. Residents of Wellington will be very familiar with him from his writing in the Dominion Post on a regular basis on the subject of science and ethics. There are a number of people: Len Cook, the former Government Statistician, Jean Fleming from the Centre for Science Communication at Otago University and also—I think I am right—a member of the Royal Commission on Genetic Modification, as well.

The people who play a role in educating the public about science are the ones considered for the role of Companion of the Royal Society. I will name just one more person now. If people are interested, I am happy to talk further about other companions of the Royal Society. One person who has been made a Companion of the Royal Society is Kim Hill, the broadcaster. That is as a result of the work she has done in the area of science. A lot of that began with the conversations she had with Sir Paul Callaghan on her radio show. Those conversations were the way that a lot of New Zealanders became familiar with science and scientific concepts in a way that they could understand. Kim Hill has done a lot of work with the Royal Society over recent years in helping to promote science, so she is a Companion of the Royal Society.

Under clause 10, section 12 of the Act, which currently deals with companions, is being changed reasonably significantly. The main point is that section 12(1) states: “The Council may from time to time elect, as a Companion, any person who, in the opinion of the Council, has achieved a high level of eminence in the promotion or encouragement of science and technology.” That is now being replaced and changed, for two reasons. The first of those is to include the humanities, which is obviously the main purpose of the bill before us. The new section 12(1) will read: “The Council”—and the council being referred to is obviously the council of the Royal Society, the governing body of the Royal Society—“may from time to time elect, as a Companion, any person who, in the opinion of the Council has—(a) shown outstanding leadership in science, technology, or the humanities; or (b) made eminent or sustained contributions to the promotion and advancement in New Zealand of science, technology, or the humanities.”

So that clarifies what it is to be a Companion of the Royal Society, and that is to have shown leadership—and we have the example of Helen Anderson, who has shown a great deal of leadership in the science sector—or to have made sustained contributions to the promotion and advancement of science, technology, or the humanities, and I guess Kim Hill would fall into the latter category. Clause 10 makes a major change to the wording, but it actually clarifies the kinds of people who will become companions of the Royal Society. It is a status of membership that I think is important to the way in which science and scientists interact with the community.

In previous clauses we have been debating fellows. They are obviously Fellows of the Royal Society, as Kelvin Davis said, not to be confused with fellas, which was an important distinction for Mr Quinn. Fellows of the Royal Society are the most eminent scientists, social scientists, and practitioners in the humanities now. Companions of the Royal Society are people who are similarly eminent but are working in the promotion and advancement of science. So this was a very important change made in the 1997 version of this Act. That was when companions were created within the Act, so it was a reasonably recent change. The kinds of people who are companions is reflective of the important role that science has in our community, in education, and in the wider debate we have about issues like ethics and how science can advance not only the economic growth of New Zealand but also the social and environmental situation we find ourselves in.

I have taken a bit of time over this, but I think it is important to outline the way that companions are now to be recognised. Just so members know, there are some other references to companions in the Act. There is an amended section 12(1), inserted by clause 10. It is also noted in section 12(2) that “A Companion is entitled to use, in connection with his or her name, either—(a) the letters ‘CRSNZ’, which stand for Companion of the Royal Society of New Zealand; or (b) such other letters or title as is decided from time to time by the Council.” So companion is sufficiently important to be able to be used as letters after a name.

I think whenever people involved in the sciences and now the humanities see FRSNZ after a name they know that that means a Fellow of the Royal Society and a person of esteem in the science community. We now have an addition to that—the ability to say that a companion is somebody who has contributed to assisting people’s understanding of science in our community. I think that is excellent. Clause 10 clarifies who those people will be. That is something that all of us should be very pleased to support tonight.

CHRIS HIPKINS (Labour—Rimutaka) : I am happy to take my first call for the evening on clause 10 of the Royal Society of New Zealand Amendment Bill, which deals with—

Hon Dr Wayne Mapp: The first of many, I am sure, Chris.

CHRIS HIPKINS: The first of many. I can assure the Minister there is plenty more to come. We are just getting started, we are just getting warmed up, we have not even cleared the vocal chords yet, and there is plenty more to come.

Clause 10 deals with Companions of the Royal Society. The member in the chair, Grant Robertson, raised Margaret Austin as an example of a Companion of the Royal Society. Members may be interested to know that the first time I had the opportunity to visit Parliament as a young person was at the invitation of Margaret Austin. It was at the invitation—

Hon Member: Last week?

CHRIS HIPKINS: Now, now! It was at the invitation of Margaret Austin, who at that point had just left the Labour Party and was launching the education policies of the then United Party—the short-lived United Party. So I had that opportunity. It was my first chance to have a look around Parliament. I quite liked the look of the place so I came back. I just thought that little aside was interesting; the mention of Margaret Austin’s name made me think of it.

It is interesting that the member in the chair referred to the initials CRSNZ and FRSNZ as being letters that people could put beside their names. I think there is a bit of a problem with that, and it is a problem we have with our honours system—separate to this—as well. No one understands what half of the letters, initials, and things that people have these days actually mean. One of the arguments that members opposite used for reintroducing the knighthood was the fact that at least people knew what it meant. People could understand a “Sir” or a “Dame”, but they cannot necessarily understand all of these other letters we now have. That could be one of the reasons why many of the Companions or Fellows of the Royal Society now find that they have knighthoods or dame-hoods. I wonder whether some other knights, like Sir Paul Callaghan—whom admittedly I have not heard mentioned; I came in only after the dinner break—were companions or fellows. Is he a companion or a fellow? He is a fellow. Sir Peter Gluckman? He would be a fellow, as well. These are people who have achieved excellence in their fields. They do many of the things that a companion or a fellow of the Royal Society would be expected to do. But they have had that contribution recognised through another system that is probably more readily understood by people. I think one of the failures of the replacement for the knighthood and the dame-hood system was that nobody understood it. I do not think that bringing back knighthoods and dame-hoods was necessary, but we could have come up with something more readily understood by the public at large. So when I heard Grant Robertson talk about CRSNZ and FRSNZ, my concern with adopting that system—well, it is already there—would be that no one will understand it. It will probably not be widely used.

I turn now to a forensic examination of the clause in question, clause 10, which repeals section 12(1) of the principal Act and replaces it with new subsection (1). The subsection allows the council to elect, as a Companion of the Royal Society, people who, in the opinion of the council, have “(a) shown outstanding leadership in science, technology, or the humanities;”. I suspect that the major change there is the inclusion of the word “humanities”, but if we compare this clause with clause 11, for example, which simply adds “humanities” to the section about honorary members, we see there is a much more substantive change going on in clause 10. I wonder whether at some point in the evening the member in charge of the bill could give us an explanation as to why a more substantive change is required to clause 10, when that change does not appear to be required in clause 11, which deals with honorary members, or in fact even in clause 12, which deals with honorary fellows. The change to clause 10 could potentially make a more substantive change than the bill purports to make, which is simply to extend the coverage of the Royal Society to include the humanities.

New section 12(1)(b), substituted in clause 10, adds the additional criteria that in order for someone to be a companion, they have to have “made eminent or sustained contributions to the promotion and advancement in New Zealand of science, technology, or the humanities.” I think that is a really, really important point. The words “leadership” and “sustained contribution” are vitally important. It is all very well for the Royal Society to promote the advancement of the sciences, the humanities, technology, and so on, but the dissemination and adoption of that information, the putting of that scientific and academic discovery into a practical use or purpose, are also vitally important. One of the important roles of the companions is to ensure that the knowledge that is created is put to some good use. From my reading of this clause, I understand that a companion—and the member in the chair, Grant Robertson, may clarify this if I am wrong—does not necessarily need to be an academic expert in one of these fields. In fact, companions can contribute in a leadership role by promoting the work that other people do. One of the things that I have discovered, when popping in and out of academia from time to time—

Darien Fenton: Ha, ha!

CHRIS HIPKINS: —in my short, but distinguished, career—ha, ha—is that a number of academics, not to put too fine a point on it, are entirely incapable of communicating the work that they do. They have those magnificent minds and make those excellent discoveries, but are unable to communicate them to the public at large. [Interruption] Well, I am not necessarily labelling scientists in their own category; a number of academics across the fields, including those of the humanities, seem unable to communicate the benefits of some of their academic advances. Therefore, having some more common people involved in the promotion of these—

Moana Mackey: You’re going well.

CHRIS HIPKINS: Ha, ha! I know. It is good, eh? I am doing well. Those people can be quite beneficial. One of the important distinctions, then, is that the companion category creates an opportunity for other people to be recognised by the Royal Society for the contribution they make in showing leadership in science, technology, or the humanities. That may not necessarily be in making an academic contribution; it may well be in putting the results of academic inquiry into a more readily understandable form, or putting them to more practical use.

Overall, in summing up my contribution to this part of the debate, I am very interested to hear from the member in charge at some point in the course of the evening why this clause appears to be more substantive than the other clauses in this block of clauses dealing with amendments. I would like to be reassured that clause 10 does not go wider than the purported scope of the bill, which is simply to extend coverage to the humanities. The second point, with regard to that matter, is whether we may want to consider the nomenclature used to describe some of these people, and whether there is a more readily identifiable and communicative way that we can recognise people who are either Fellows, Companions, Honorary Members, or Honorary Fellows of the Royal Society

Darien Fenton: Fullas.

CHRIS HIPKINS: I do not know that we should use that particular description. I will leave my contribution at that, but I look forward to the continued debate on the remaining 13 clauses of this bill as the evening progresses. I am sure there will be a lively and sustained debate through the rest of the evening. Thank you.

JAMI-LEE ROSS (National—Botany) : I move, That the question be now put.

MOANA MACKEY (Labour) : Unlike my learned colleague Chris Hipkins, I cannot claim to have popped in and out of academia my entire life, and I suspect that my contribution may be a little more lowbrow than his, but, none the less, I hope I am able to add to this debate on clause 10 of the Royal Society of New Zealand Amendment Bill. The role of Companion of the Royal Society is a very important role. The Royal Society is, of course, to be commended for the recognition of those people who advance the cause of science and education in science—those who work with the public and carry out that function of almost being an intermediary between the general public and members of the academic community who work in the area of science, and now, of course, in the area of humanities when this bill is passed into law.

I take on board the concerns of my colleague Chris Hipkins about the awarding of titles, but I do think that under clause 10(1) of this particular bill the wording is appropriate. I myself am an ordinary member of the Royal Society and as such I have the right to vote, and to nominate Companions of the Royal Society. I suspect that when we come into this role in Parliament, it becomes more evident—

Chris Hipkins: Who is being elitist now?

MOANA MACKEY: I am not. I am an ordinary member, I tell Mr Hipkins.

Chris Hipkins: A common member?

MOANA MACKEY: I am an ordinary member of the Royal Society, and very proud to be so. I note that when we extend the ambit of the Royal Society out to the humanities, Mr Hipkins himself may suddenly become eligible to also become an ordinary member of the Royal Society and enjoy being part of this amazing organisation whose history around the world goes back hundreds of years, and which has been responsible for the enlightenment of humankind. I strongly recommend to any of my colleagues who want to join the Royal Society that they should do so. It is an eminent and very worthy organisation.

In terms of the companions, as politicians we should know better than most the importance of communication around issues of science and issues of technology. We need think back no longer than the issue of genetic modification, and I think of the inability of politicians at that time to be able to grasp an issue that was incredibly divisive and inflamed passions on both sides of the debate. I hope we have learnt from that and realise that issues of science and technology will be commonplace in our country from now on. We will have to debate them as politicians. We do not necessarily need to understand them down to the same level that the practitioners do. But this is where the Companions of the Royal Society really do show their worth. I note there are relatively few Companions of the Royal Society, as opposed to other classes. I hope that over time, and as a result of this debate where we are discussing in detail the workings of this very important organisation, we can promote the role of companions—promote the role of those people who can be the intermediary between those who are carrying out the technology and those who ultimately want to feel safe that that technology is OK, and that it will not cause any damage. These people play an incredibly important role, and it is perhaps a role that has been undervalued in the past and a role that I hope will see more people introduced into this area of companions.

I remember that when we were in Government we set up the Science Media Centre, which ended up being tendered to the Royal Society, so the Royal Society carries out this role. The centre’s role is to act in the way that a companion of the Royal Society would act. Say if we want to get issues around science and technology out into the mass media, we have to appreciate that maybe those journalists who are running the stories might look at something and think: “That’s very complicated; it’s going to take me a lot of time to get my head around it—

Kris Faafoi: What are you saying about journalists?

MOANA MACKEY: I was not just looking at Kris Faafoi when I said that. Then they may go with another story. This unit has proactively gone out and told the media that when they want a story, they should go to the Science Media Centre and it will give them the people to contact. It will tell them who to get in touch with and give them all the background. That has worked very well. It has resulted in some of the daily news shows having a regular spot for science and technology because they know they can get that information. This is the kind of role Companions of the Royal Society carry out, and they should not be undervalued.

I look at some of the names of people who are on the list of Companions of the Royal Society and I see Mr Jim Salinger’s name. I want to talk more about him. He was the principal scientist at NIWA. He was the person whom Jim Hickey would go to on a regular basis. Jim Hickey would say what was happening and that he wanted to understand it more. He would ask Mr Salinger to tell him more about it, and Mr Salinger would provide that help. Unfortunately, a couple of years ago Mr Jim Salinger was dismissed from NIWA. It was a decision that I personally very, very strongly disagreed with. Mr Salinger was actually a member of a team that won a Nobel Prize. He is one of the few Nobel Prize - winning New Zealanders we have, and he won for his role in the science of climate change. He is incredibly well known on the international stage, and incredibly well respected. We were very lucky to have him as our principal scientist at NIWA and I personally very, very strongly disagreed with the terms of termination of his employment from NIWA. I registered my disappointment personally with the Minister of Science and Innovation at the time. I said that something needed to be done about this because Nobel Prize - winning scientists who are prepared to be principal scientists at our Crown research institutes do not come along every day. We cannot afford to burn them off because of what ended up being personality clashes and disagreements over things that I think, in the broader scale of things, were minute compared with the contribution he made to science in New Zealand.

Mr Jim Salinger is a very worthy Companion of the Royal Society of New Zealand. He has worked tirelessly, particularly with media outlets, to make sure that science was easily understood, and when one reads the reason why he was dismissed, it was for doing his job. It was because he had not sought approval from a manager to talk to a weatherman, even though NIWA had a relationship with the organisation concerned, and even though it had an agreement that he would do that. The weatherman rang him and asked him about something. He had a discussion with the weatherman and was then told it was not appropriate to do that without going through a manager. I think that that is bureaucracy gone mad. For a Government that says it hates bureaucracy, this Government did nothing to step in in the case of Jim Salinger to keep that Nobel Laureate in our Crown research institute.

The other person’s name I saw on the list is very interesting: Helen Hughes, a former Parliamentary Commissioner for the Environment. I did not know she even existed until last week on Back Benches, when she opened a can of the proverbial on Peter Dunne regarding 1080. Helen Hughes, I have since learnt, is a formidable woman. She is an environmental champion from a long time back. She carried out the role of the Parliamentary Commissioner for the Environment when it was not quite as high profile a role as it is now and, as anyone who watched Back Benches last week would have seen, she is a passionate advocate for the environment. She is pragmatic in the extreme when it comes to issues like 1080. I invite members to watch Back Benches from last week if they have any concerns about 1080 to hear what she said, which was pragmatic, which was true, and which was evidence-based. Helen Hughes, even just based on her performance last week on Back Benches, is the kind of person who well deserves to be a Companion of the Royal Society and who, under the amendment to section 12 of the Royal Society of New Zealand Act in clause 10 of this legislation, will be the kind of person who I hope we will see continually promoted.

Also I believe that Shaun Coffey, who is the chief executive of Industrial Research Ltd, is also a Companion of the Royal Society. I mention him—

Chris Hipkins: As long as he doesn’t move it all to Auckland.

MOANA MACKEY: —as long as he does not move to Auckland. I mention him specifically because I have been so impressed with the work that Industrial Research Ltd has done. I used to work on the Industrial Research Ltd campus when I worked for the Institute of Environmental Science and Research and then for AgriQuality. We were based on the same campus as Industrial Research Ltd. We all used to mix together and talk about what it was doing, and it really is at the cutting edge of science and technology. It is doing the stuff that Sir Paul Callaghan talks about, which is the stuff that perhaps not many of us know about, but will bring enormous wealth to this country. Again I urge the Government not to mess with Industrial Research Ltd and not to make ideological decisions about the future of that organisation. Again, Shaun Coffey is another person who has done a very good job. Industrial Research Ltd promoted the What’s Your Problem New Zealand? Competition, where it put up a prize and said it would invest in something. Scientists and innovators were asked to go out there and come back with what they thought would make money. The competition induced an enormous response from the scientific community and showed just how much potential is out there if we are able to properly invest in science and innovation. Industrial Research Ltd had the money to invest in only a very small proportion of the ideas that came through—

SHANE ARDERN (National—Taranaki - King Country) : I move, That the question be now put.

DARIEN FENTON (Labour) : It is my very great pleasure to take a call on clause 10 of the Royal Society of New Zealand Amendment Bill. This is my first contribution. I have been down here week after week trying to make a contribution, because this is one of the most exciting bills that I have ever seen come through this Parliament. I have never seen anything so well debated. It has been such an education for people like me who do not have any background in science or, actually, in academia. I congratulate the member in the chair, Grant Robertson, who has brought this bill forward. I congratulate him on his wonderful work, and I also congratulate all of my colleagues who have brought to New Zealand’s attention the whole debate about the importance of the Royal Society, which none of us knew about.

Chris Hipkins: Enriching.

DARIEN FENTON: It is very enriching, that is right. I agree with my colleague Chris Hipkins. This has been a very educational debate, because, to be honest, I did not know much about the Royal Society. This is my working-class prejudice talking here, but for me anything called “royal” would have been something I did not know much about. I would have thought it did not apply to me because I am from a working-class background. It would have sounded like it was about those important people out there who have studied, worked hard, and done important stuff, but I did not get it because I come from a working-class background. I have always stood up for people who are at the bottom—the vulnerable workers, and the vulnerable people in society. However, this debate has stimulated my thinking, and I want to say that it is great that something like this exists.

The Royal Society started in, what was it, 1867, and I think King George is mentioned somewhere there, and now Queen Elizabeth. For those of us who have republican tendencies, that is always a little bit difficult, but I do think it is great that the pursuit of intellectual argument and debate—

Jo Goodhew: I raise a point of order, Mr Chairperson. I raise this point of order reluctantly because I realise that this is an important debate for the members opposite, but I have not heard the word “companion” used once in this member’s speech, so I seriously doubt the relevance to this clause.

The CHAIRPERSON (Eric Roy): I will uphold the point of order. The member must debate clause 10.

DARIEN FENTON: Thank you. I was getting there, Mr Chair, I assure you. I was talking about my history, my understanding, and my background, and I was thinking about clause 10 and companions. To me, as a working-class person, a companion is somebody who has been given a conferment by the Queen, which is something that is way, way above any of the associations that I have. It made me think quite a lot about this.

I know there is a whole process under clause 10. I have read the Royal Society of New Zealand website, which talks about the selection of companions. I do not want to denigrate them in any way because I think they are very, very important people. But I will say that I have never been a companion of anyone apart from my beloved partner—he would describe me as a companion—but I am a fellow. When I thought about it, I am a fellow—

Hon Member: No, you’re not. You’re a sheila.

DARIEN FENTON: —not a fella, but a fellow—of Trinity College London. I do not know how one becomes a companion of Trinity College London, but I am a fellow. I had to go quite a long way back into my history, and that is all to do with music, being a musical kind of person, and studying performance—I was good at that all those years ago. I do not think there was such a thing as a companion of Trinity College London, but when I looked back I thought that being a fellow of Trinity College London was quite a good thing to be, actually—I thought that was quite good.

I tend to think, and many other people tend to think, that these things do not matter—being a companion, being a fellow, or being an honorary member, which we will get on to in the next clause. But these things do matter, because they recognise that there are a whole lot of people in our society who contribute in a whole lot of areas. That is why I am really pleased that this whole bill has been about expanding the role of the Royal Society into the humanities, which goes into a whole range of areas, and maybe one day there will be a companion of trade union studies.

My colleague Sue Moroney talked about her qualification, and I have the same one, which is about trade union and labour studies. Maybe, in terms of expanding the humanities, there might be a companion of trade union and worker and labour studies; I think that is a very, very important part of our society. I think it is wonderful that clause 10 is recognising that the Royal Society—

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

  • Motion agreed to.
  • Clause 10 agreed to.

Clause 11 Honorary Members

GRANT ROBERTSON (Labour—Wellington Central) : Clause 11 brings us to the question of honorary members, yet another form of membership of the Royal Society. Before I go into that, I will correct something that my very good colleague Moana Mackey said before, because she undersold herself—and it is unlike Moana Mackey to undersell herself. She is a person of—[Interruption]; hear me out—great talent, and someone who should celebrate her achievements. She described herself as an ordinary member of the Royal Society of New Zealand, but, in fact, a brief check of the website of the Royal Society will reveal that Moana Mackey is in fact what is described as a professional member of the Royal Society of New Zealand. That is where a person who joins the Royal Society has their qualifications and professional experience recognised, and the Royal Society—

Chris Hipkins: Where’s that in the Act?

GRANT ROBERTSON: —I will come to that, I say to Mr Hipkins—then undertakes a process. When they assess that a person’s qualifications and professional experience are sufficiently good, they become a professional member and are entitled to have after their name the letters MRSNZ—Member of the Royal Society of New Zealand. So Moana Mackey is more than an ordinary member of the Royal Society, and I think the House should celebrate the fact that she is a professional member.

But clause 11 is not about either ordinary members or professional members; it is about honorary members of the Royal Society. I say to Ms Mackey that we have been celebrating her professional membership of the Royal Society.

Moana Mackey: Oh, am I a professional member?

GRANT ROBERTSON: Yes. It is a surprise to her that she is a professional member. It is something for the member to celebrate tonight.

Moana Mackey: I have to go update my website.

GRANT ROBERTSON: That is right. Section 16 of the Royal Society of New Zealand Act covers who honorary members are, and section 16(1) tells us that “The Council may, from time to time, grant Honorary Membership of the Society to any Ordinary Member who, in the opinion of the Council, has rendered eminent service to science or technology, or to the Society.” Perhaps significantly, subsection (2) tells us that “Honorary Members are not required to pay any levies to the Society.” I think other members may wish to go into that a little more. But that is what describes an honorary member. In clause 11 we are making sure that people who have provided eminent service are not only those who provided that service to science and technology but also to the humanities.

It has been useful to work through the debate tonight on the different types of membership of the society—from fellows through to companions, and now on to honorary members—to recognise that the society has processes in place to enable special recognition of those who are eminent scientists, through the fellows, those who have contributed to the advancement and the knowledge of science, companions, and now those people who have chosen, as Moana Mackey noted before, as any of us could do, to join the Royal Society. If those members who have joined the Royal Society are people who have made a contribution or have been shown to be eminent in some way, then they are able to be described as an honorary member. I think this is an important additional class of membership within the Royal Society, because there are many, many members of the Royal Society, and those who are professional members, like Moana Mackey, and have made their contribution, can, in time, find themselves to be honorary members of the Royal Society. So clause 11 of the bill that is before us tonight—

Hon Dr Wayne Mapp: They’ll be looking to make you one, Grant.

GRANT ROBERTSON: Well, I do wonder, Dr Mapp, after the contribution I have been making to the Royal Society over recent months, whether it might consider honorary membership—I do not know. Far be it from me to put myself forward for that kind of position. Others may choose to, but that is their choice. But it is obviously an important place within the membership structure of the Royal Society to have honorary members and to be able to recognise people within that.

There are some other classes of membership of the Royal Society, including professional members like Moana Mackey. There are also retired members, people who are no longer working within the scientific area, and obviously they have the ability to be recognised, and there are student members. That, I think, is a very important part of the membership class of the Royal Society, because it is a way of bringing people into the Royal Society community at an early stage.

Hon Heather Roy: Is it compulsory?

GRANT ROBERTSON: Compulsory? No, it is not compulsory, I say to Heather Roy, to be a member of the Royal Society. Just briefly, I have to respond to Heather Roy on the nature of student membership of the Royal Society. No, it is not compulsory, and that is fine, because neither is the environment in which the Royal Society operates.

Hon Heather Roy: They don’t need the money.

GRANT ROBERTSON: They do not need the money, did the member say? Well, no, in fact the Royal Society is very keen for people to join, and it is not just about the money, as we established in earlier parts of the debate around the question of members not getting a dividend or a profit. Members join because they are interested in science, and that is a very good thing.

I just want to briefly add to my contribution and say that this is yet another example of the expansion of the membership to include the humanities in the very important category of honorary members, and it is something that I would urge the Committee to support.

CAROL BEAUMONT (Labour) : It is a pleasure to rise and speak on clause 11 and on the issue of honorary members. I have to say, just by way of a general comment, that this whole debate on the Royal Society of New Zealand Amendment Bill has been fascinating. Learning about the different categories of membership, I think, is particularly interesting. I am a little disappointed I did not get to speak on clause 10, on companions, because it really—

The CHAIRPERSON (Eric Roy): That’s why I gave you one now.

CAROL BEAUMONT: Yes, thank you for giving me a call now, Mr Chairperson. I do think the companion category is a particularly interesting one. We are talking about people who are outstanding.

In respect of the honorary member category, according to the website of the Royal Society, “The Council may grant Honorary Membership to an Ordinary Member who, in the Council’s opinion, has rendered eminent service to science, technology, humanities or the Society.”

I was looking at the honorary fellow category. Honorary fellows are not normally resident in New Zealand, and I wondered whether the same was true for honorary members, but it does not say so. I hope my colleague Grant Robertson, the fine member who has brought this bill to the House, can clarify this point for me. An honorary fellow is not normally resident in New Zealand, but it does not say that in terms of an honorary member. But I looked at the list of honorary members, and I will just repeat the definition: an honorary member is an “Ordinary Member who, in the Council’s opinion, has rendered eminent service to science, technology, humanities or the Society.” It does not say that honorary members are not normally resident in New Zealand, but as I scrolled down the list, I saw that most of them, if not all, seem to not live in New Zealand, so perhaps Mr Robertson could clarify that for me.

I was going to tell the Committee about the gender breakdown of companions. I think I will still do that, and tell the Committee about the gender breakdown of members. I think it is really important to look at these issues. In terms of companions, there are 35 current Companions of the Royal Society of New Zealand—nine of them are women and 26 are men.

I am afraid that the ratio looks a whole lot worse, though, for honorary members. At the moment there are 56 honorary members of the Royal Society of New Zealand. Of those 56 honorary members, 53 are male and three are female. Those are not particularly good gender statistics. I do not want to be stereotypical, but it may reflect the fact that in the past women perhaps have not been encouraged into the science areas and we probably do have a gap in terms of the number of women who have trained in what we would call the traditional sciences. My colleague Moana Mackey is, of course, a scientist and, as we now know, a professional member of the Royal Society of New Zealand. She is nodding, so I think she is telling me that it is still relatively rare for women to study the traditional science areas and perhaps get to those higher levels. I have certainly seen that for myself when visiting a number of science companies, where one can see a lot of women at the technician level, as Ms Mackey says. One of the things that I am sure the Royal Society is very aware of is the need to encourage more young women into the sciences.

In fact, we need more New Zealanders generally in the sciences. We know there is a gap there, and we know that the sciences are absolutely critical to our economic future, but perhaps Mr Robertson could tell me whether he is aware of any particular efforts being made by the members of the Royal Society to encourage more women into the sciences. In particular I wonder whether the role of companion or fellow is to do just that.

As I say, I am pondering whether honorary members are people based outside of New Zealand; and, if not, what is the specific difference between an honorary member and an ordinary member? It is not quite clear to me from the Royal Society’s website what that distinction is. It just says that honorary membership is granted to an ordinary member for eminent service. We know that at a certain level of eminent service can see one potentially become a companion, so I would like to know what the distinction is between an honorary member and an ordinary member, or, indeed, a professional member like my colleague Moana Mackey.

Clause 11 makes a consequential change to take account of the humanities being included.

KRIS FAAFOI (Labour—Mana) : Thank you very much for the opportunity to speak on clause 11 of the Royal Society of New Zealand Amendment Bill. Before I start, because my colleague Moana Mackey has spoken on this issue, I just point out that I do not have any conflict of interest here. I am not an ordinary member, a professional member, a companion, or a Fellow of the Royal Society of New Zealand. But it is good to know that we have a professional member of the Royal Society on this side of the Chamber, and, to take up another point made by Moana Mackey, I can tell the Committee that on a number of occasions it was very useful as a journalist to speak to members of the Royal Society of New Zealand. Sometimes when I was addressing very complex issues of a science nature and wanting to put them into plain English it was usually a member of the science community who was also a member—usually a pretty eminent member—of the Royal Society of New Zealand who helped me out as a journalist.

I am sure that people at home are now tuning into this debate. They would have heard it about because of the great profile it has, and I know that at 7.30 p.m. Close Up, Campbell Live, and Shortland Street finish, so they will be tuning in. We are debating clause 11, “Honorary Members”, which states: “Section 16(1) is amended by omitting ‘science or technology’ and substituting ‘science, technology, or the humanities’.” I just want to see whether we can get closer to the distinction between an honorary member and a companion, which we debated in the previous clause. If I am correct—and I ask the member responsible for the bill about this—the difference is pretty much contained in clause 10(1)(a), which states that a companion has to have “shown outstanding leadership in science, technology, or the humanities;”. Paragraph (b) talks about “eminent or sustained contributions to the promotion”, which is basically what is contained in clause 11. The member in the chair, Grant Robertson, is nodding, so I think that is the level of differentiation between an honorary member and a Companion of the Royal Society of New Zealand.

This is an exciting time for the Royal Society of New Zealand because, as we have spoken about at length on other clauses, the bill brings the humanities into the realm of the Royal Society of New Zealand. I think this will change the nature and the culture of the Royal Society, because we will see a lot more people being given these honorary memberships and companionships of the society. Now that the humanities will come into that I am trying to think of who might become an honorary member or a companion. I am thinking of Pacific Island people of eminence who might be able to become members or companions of the Royal Society. One person who I think would be an excellent such example is Alfred Hunkin. I am getting a nod from the member in charge of the bill. For those people at home who do not know much about Alfred Hunkin, he is the programme director in Samoan studies at Victoria University. [Interruption] Did the member go to school with him?

Dr Rajen Prasad: He’s an ex - school teacher.

KRIS FAAFOI: He was formerly a school teacher, which is a noble trade. Over the years Alfred, as a composer and musician, has tried to use music to continue the culture of Samoa and to make sure that the language and stories of his homeland are continued. As someone who works in the Samoan studies department at Victoria University he would probably, in terms of clause 11 and the details the council looks at when giving an honorary membership to people, have offered eminent service. He is probably someone who could be given a break with his levies, too. As we look to broaden the nature of the Royal Society of New Zealand, and in particular as we look at honorary membership in clause 11, he is one person who I think would fill the bill in terms of being someone to whom we could extend the distinction of an honorary membership of the Royal Society of New Zealand.

This is a very exciting time for the Royal Society of New Zealand to bring humanities into the fold.

JAMI-LEE ROSS (National—Botany) : I move, That the question be now put.

JACINDA ARDERN (Labour) : Thank you, Mr Chair, I think you will note that this is my first call of the evening and I am pleased to take it on clause 11 of the Royal Society of New Zealand Amendment Bill. Before I begin, I have a couple of questions for the member in charge of the bill, one of which relates specifically to a point that I will come to. I have had some involvement with the Royal Society. I am not a professional member, but as a high school student I was given some assistance to attend the APEC youth science festival in South Korea—

Carol Beaumont: Wow!

JACINDA ARDERN: —yes, I was. I can see that has left some members impressed. There was a time when I was a reasonable science student—it was some years past. My question is, if I have been a beneficiary of the Royal Society can I become a member? I would also like to know whether Chris Hipkins, given that he is reading the New Scientist at present, could become a member, too.

I have a much more serious question to ask the member in the chair, though. Clause 11 discusses honorary members. It is a very basic amendment to the current descriptor of who is able to become an honorary member. Currently the legislation refers to those who are in the realm of science or technology, but this clause amends section 16(1) by substituting “science or technology” with “science, technology, or the humanities”. The member in the chair, Grant Robertson, has already talked us through the process whereby someone moves through the different levels of membership within the Royal Society. Basically, people can begin with membership, which is for those who work in the applied, biological, earth, engineering, information, medical, physical, and social sciences, mathematics, and the humanities. The distinction between that and the various levels for an honorary member is that it enables a person who has rendered eminent service to the humanities to be granted honorary membership. This level is for those who demonstrate distinction in their field.

I guess my question for the member in the chair is how the addition to this clause is likely to bring in new individuals whom we are not already recognising. I took a little bit of a look through those who already fall under the category of honorary membership, and I thought it might assist members of this Committee if we used that as a basic example of the kinds of eminent individuals who already hold the title of honorary member. Then I have a couple of questions about whether we are likely to delve into new and specific fields. To me, it seems that the humanities are in many ways already acknowledged by the title of honorary member under the current definition, and I ask whether the honorary member title was already a broadening of the powers of the Royal Society beyond what would otherwise be its traditional membership base.

I am interested to hear from the member in the chair whether he can share with us whether the select committee discussed this at any great length—whether it was perceived that perhaps not enough honorary members were recognised in the fields of the humanities and whether, perhaps, a more purist view to those in the humanities needed to be taken. Let me just expand on that with a few examples to assist members of the Committee, whom I can see are greatly intrigued by the contribution I am giving.

Jami-Lee Ross: Yes.

JACINDA ARDERN: I thank Jami-Lee Ross, who sits to attention. I can tell that he was a good pupil in school. I have to concede, actually, that when I was going through the list of honorary members to assist me with my analysis of this clause, there were a number whose names, I am ashamed to admit, I did not recognise. That is another question I had for the member in the chair: what are the duties of honorary members? What is their expected role, according to the Royal Society? Is it intended that an honorary member should become an advocate on behalf of the Royal Society, or indeed be someone who then takes a public role within his or her field?

When I was scanning through, it struck me that those more traditional members, those who might already be honorary members within the realms of the sciences, were the ones I did not recognise, whereas those who had already been recognised within the humanities were recognisable. That was an interesting distinction for me. For instance, if I mention the name James Belich, I imagine that everyone in this Chamber would know whom I was talking about. He is an outstanding New Zealand historian. He has a specialist field in creating the global relevance of the New Zealand Wars in a historical context. He is recognised for his ability to create intellectual excitement. I am interested to know whether the member in the chair could talk to me a little more—

GRANT ROBERTSON (Labour—Wellington Central) : I will now respond to the questions raised by a number of members, and I thank members for the questions they have raised on clause 11 of the Royal Society of New Zealand Amendment Bill.

Shane Ardern: There’s obviously never any discussion in caucus.

GRANT ROBERTSON: No, no. It is a complete surprise to me, I tell Mr Ardern, to be given questions. But it shows how much the Labour members of Parliament are focused on this bill and have looked at the clauses to understand what they mean. I would be more than happy to take questions from National members when they work their way through the bill—I would be more than happy to do that.

To answer questions about the status of honorary membership, it is necessary to go back and discuss the concept of ordinary membership, because in order to be an honorary member of the Royal Society, one has to be an ordinary member. To be an ordinary member, the rules of the Royal Society, as opposed to the legislation, set out some minimum requirements. This happens once one has joined up and, as Moana Mackey has done, one becomes a professional member.

There are some requirements. One needs training: a university degree or its equivalent, as determined by the Royal Society of New Zealand Council, and/or 3 year’s professional experience within a field designated by the council as being relevant to the society. So, clause 11, effectively, broadens that out to include the humanities, which is now a field designated as being relevant to the Royal Society. Thirdly, one must have a formal adherence to the code of professional standards and ethics. The headings there are “Training”, “Experience”, and “Practice”, and, having established those, or once that has been acknowledged, one gets to put the letters MRSNZ, Member of the Royal Society of New Zealand, after one’s name, as our colleague Moana Mackey is entitled to do.

At that point there is then the question of nomination for honorary members, and those nominations can be made by any member of the society at any time. Nominations for honorary members must be made to the chief executive of the Royal Society, and shall include a statement of not more than 500 words giving reasons why the nominee is worthy of election. Then the Royal Society of New Zealand Council considers each nomination for an honorary member, and, if approval is given, the nominee shall be invited to accept the appointment. At the same time as approval is given, arrangements shall be made for the presentation of a suitably inscribed certificate.

As with Fellows of the Royal Society of New Zealand, and now with members, it is quite clear that I can answer the question that Carol Beaumont raised. I tell her that in fact one does not have to be a resident of New Zealand to take up either of those honorary categories. Obviously, when we come to clause 12 we will see that honorary fellows tend to be people who are based overseas, as well. So, honorary membership and ordinary membership are linked, but they are separate categories. It has clearly been a practice of the Royal Society to recognise people as honorary members who have some connection with New Zealand but who are not in New Zealand. But, obviously, honorary members can be New Zealanders, as well.

I tell the Committee that people can join online, because it has come up in the context of ordinary membership. In fact, there is a button on the Royal Society website that people can click to join. It will cost members of this House $82 for an annual subscription to be a member of the Royal Society. Moana Mackey has to pay more. She has to pay about $150, I think, as a professional member—

Moana Mackey: My membership fees are due.

GRANT ROBERTSON:—and her membership fees are due, so I do hope that she pays them. That is the connection to answer the question raised.

In terms of the questions Jacinda Ardern raised about whether there had been any debate about what bringing the humanities in to the Royal Society would mean in terms of the number of honorary memberships, I tell the member that that was not debated by the select committee. But I know that the approach the Royal Society has taken to the inclusion of the humanities is very inclusive. It is part of the Royal Society’s desire to expand the number of people who are actively involved in the Royal Society. I believe that honorary membership in addition to ordinary membership, companions, and fellows, will expand over time.

The question of gender is very interesting. I know that within the ranks of the Royal Society and within the ranks of the fellows, there are some very active female members, whom I know have been trying to encourage more involvement of women in the sciences. I know that there are some activities within the Royal Society by women fellows to try to encourage other women scientists. But as we have discussed variously throughout this debate, women are underrepresented in the sciences and we obviously want to see more of them there.

Dr RAJEN PRASAD (Labour) : I have been a little bemused by clause 11 of the Royal Society of New Zealand Amendment Bill, and I want to ask a few questions of the member in the chair, Grant Robertson, who is acting more and more like a professor every time he speaks on this particular bill.

The point I will make about membership is that I just wonder about one issue when I look at the different types of membership in the Royal Society. A little part of me just asks whether there are too many categories, and, if there are, whether this is the best way to do it. Maybe there is a very good reason for there to be lots of different categories, because the sciences are so diverse and there are many different types of people—does the member have a question?

Jo Goodhew: Which category are we on now?

Dr RAJEN PRASAD: It is clause 11 that I am talking about.

Jo Goodhew: Oh, you are? I was wondering.

Dr RAJEN PRASAD: Yes, and it is about honorary members. The member might like to apply to become first a member of the society, then an ordinary member, and then maybe she could become an honorary member. Perhaps the member might like to think about doing that, because I know that Chris Hipkins is thinking about applying for membership in one of these categories, as well.

My question is about how one can find out from the website who is an honorary member. I was surprised by my colleague Moana Mackey; I knew that she was a member, but I did not know that she was a professional member. Unless one knows the little trick that the member in the chair talked about—

David Shearer: He didn’t know, either.

Dr RAJEN PRASAD: Ha, ha. If one has the membership title next to one’s name, that means something. But certainly when we go to the website and click on ordinary membership, below that there is no list headed “Honorary Members.” So at the moment this is a bit of a mysterious category. Who are they? Where are they? Are they in New Zealand? The member in the chair might want to get that information. I am sure he has it. He has been so well-informed about this bill, about science, and about the Royal Society that I am sure he will have an explanation. It might just be that in order to find out who the honorary members are, one needs to go to the list of members, go through them, and see that some do not have a title next to their name. I cannot recall the title at the moment. Maybe it is them. If that is so, then some clarification by the Royal Society would be really helpful to travellers like me.

There is another point I want to make about this clause. I salute the opportunity for the humanities to have honorary members. I wonder—and the member in the chair might proffer an opinion on this—how long it will take before there are honorary members in the humanities field. Does it happen rather quickly? The humanities are being added now, so there will be a flood of applications, I am sure. How long will it be before someone moves from being an ordinary member to being an honorary member? It is an important signal. It indicates a level of contribution, of eminent service, to science, and in this case to the humanities. There are any number of scientists from the humanities who could qualify for honorary membership immediately. I wonder whether, by adding the humanities in clause 11, it is envisaged that there will be some kind of fast track whereby members from the humanities will be able to avail themselves of this particular membership category.

Of course, this leads me to another rather general point that I would make about membership and the reasons why perhaps not many of our Māori people and our Pacific people are in the various categories. At the moment there are some whom I recognise, but clearly, and as Kris Faafoi said, there are eminent people from the humanities who would qualify. I would expect to see before too long that list increase quite significantly.

The provision in clause 11 is a very good one. It leads me to ask questions in order to clarify who is in this membership category, and I am sure the member in the chair will take a call to explain that. Thank you.

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

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

Ayes 74 New Zealand National 58; Green Party 9; ACT New Zealand 5; United Future 1; Independent: Carter C.
Noes 43 New Zealand Labour 42; Progressive 1.
Motion agreed to.

Clause 11 agreed to.

Clause 12 Honorary Fellows

GRANT ROBERTSON (Labour—Wellington Central) : Clause 12 concerns honorary fellows. Those who have been following the debate—and I am sure there are many following it on television and on the radio tonight, as well members in the Chamber—will know that we have been patiently working our way through the various categories of membership of the Royal Society and the impact that this legislation has upon those categories. We now come to the question of honorary fellows.

As previously discussed, to be a Fellow of the Royal Society is the ultimate accolade of scientific excellence, technological excellence, and now excellence in the humanities. We have 360-odd fellows.

Hon Member: They’re not odd.

GRANT ROBERTSON: Exactly. I have to correct that description. They are not odd fellows; I am saying that there are about 360 fellows of the Royal Society. Honorary fellows are those whom the academy council, in accordance with by-laws, admit. The main difference here—and this is the question that my colleague Carol Beaumont raised earlier in relation to honorary members—is that the person is not normally resident in New Zealand. This is the chance for the Royal Society of New Zealand to recognise people outside of New Zealand who have scientific excellence.

My understanding is that generally speaking the people involved in this are people who have had a connection with New Zealand. They have perhaps come here and worked or studied for a period of time, or perhaps they are working in collaboration with a New Zealand scientist on a project and that has led them to have a connection with the Royal Society. The other important element of becoming an honorary fellow is that they have rendered eminent service to science or technology, and with the change we are making here in clause 12, that will become science, technology, or the humanities.

The person who is admitted as an honorary fellow is not required to pay any levies to the society and is not entitled to vote in respect of any matters before the academy council, which is to be renamed the academy executive committee under various clauses. Also, they are not allowed to hold office in the society. This is the time for the Royal Society of New Zealand to recognise people who have delivered excellence in science but are not normally resident in New Zealand. It is, I think, an important part of how the Royal Society operates that there is this position within the membership structure.

As we have noted, having the different classes of membership provides different levels of recognition. I want to respond in that context to my colleague Rajen Prasad’s question about whether there are too many categories of membership. I do not think so. I think each category covers a very specific part of what it means to be in the Royal Society. The fellows are those who have reached the highest pinnacle of excellence in their field. The companions are those who have given encouragement and advancement to New Zealanders’ knowledge and understanding of science, and they are not necessarily scientists themselves. The ordinary members are people with an interest in science and a background in science, who, as we know, can progress to being professional members and indeed honorary members.

I think that all of those categories represent different parts of what it means to work within the Royal Society, and here in clause 12 we have the honorary fellows, which is yet another example of where the Royal Society can reach out internationally. We know that that is important to the scientists within the Royal Society.

Academic scholarship requires people to look outside of their own national boundaries and look internationally. People working in very similar fields—fields at the cutting edge of science, like nanotechnology—have to work across country borders to make sure they can make the advances that are deemed necessary.

When we look at the list of honorary fellows on the Royal Society website, we see that we have people from all over the world, from disciplines like physics, earth and ocean sciences, geographical sciences, biology, and electrochemical science and technology. We have people from the United States, from Australia, from Japan, and from the United Kingdom. There is a range of people who are, for the most part, not resident in New Zealand, although, for example, Nigel Priestley from Christchurch, who is currently resident in Christchurch, is an honorary fellow although he is normally based offshore. This clause expands for that range of membership the question of the humanities.

JACINDA ARDERN (Labour) : I am delighted to take a call on clause 12 because I need to correct my previous contribution. I had a slight mismatch there. I referred to James Belich as an honorary member, but he is actually an honorary fellow. But one of the points that I have outstanding from my last contribution, which I would love the member in the chair, Grant Robertson, to respond to, is that I am still not entirely clear on how changing section 17(1)(b), as set out in clause 12, by omitting “science or technology” and substituting “science, technology, or the humanities” means that in practice a different set of honorary fellows will be included under the Royal Society.

I would like to demonstrate that point by talking about some of the honorary fellows currently listed, because at the moment in the legislation—and listed in more detail, I think members will find, by the Royal Society in its public space—honorary fellows are listed as being those who are seen to support the activities of the Royal Society. But they are not necessarily those whom we would deem to be—unlike, perhaps, the companions and the honorary members—contained just within the realm of the sciences.

Glancing through the list of the honorary fellows already listed, I was intrigued to see that a number of those whom I consider to be within the area of the humanities are already included. I am intrigued to know whether this provision is merely a legislative change for the sake of consistency with all of the other definitional changes rather than something that in practice will change the types of honorary fellows that we already have.

As I was saying before, when glancing through the list of honorary fellows—strictly those affected by clause 12—I saw that there were a number within the sciences whom I am ashamed to admit I was not familiar with. Again, I ask the member in charge of the bill, Grant Robertson, whether he could explain to me the perceived role of the honorary fellows. If that role is the promotion of the sciences and the work of the Royal Society, I would be really interested in that. I like to consider myself fairly engaged, not necessarily strictly in the world of the scientists but with those eminent New Zealanders who are working at the cutting edge. If that is the role of the honorary fellows, I would like to see an enhancement of that, perhaps with more opportunity for our honorary fellows to be present in our schools.

Scientists in Schools was an excellent programme—that is a small plug from Labour; it was a Labour Government initiative that was scrapped by National. Perhaps we could put our honorary fellows into our schools as a way of promoting the sciences. We are sixth in the OECD for sciences when we are at school, but something happens when young New Zealanders exit our education system into optional education, particularly tertiary education. We stop studying science, but studying science is what we need to do if we are going to be at the cutting edge in growing our economy.

I will list some of the honorary fellows that some members may be familiar with. I was glancing through and saw that not only is James Belich an honorary fellow but that Alan Bollard is an honorary fellow, as is Sally Casswell—and, again, I would see her as dabbling a little beyond strictly the sciences. Members will know that she is a public health advocate who works in the alcohol space, in particular. David Fergusson is also a fellow, and obviously there is a bit more of the sciences in there, with his work on the longitudinal studies of growing up in New Zealand. He has made a lasting contribution from New Zealand’s perspective to the world of science.

Sir Paul Callaghan is a fellow. Most members of the Committee will know who Sir Paul Callaghan is because he has been recognised not just as a scientist or as an honorary Fellow of the Royal Society but as New Zealander of the Year. I think that that has enabled him to be lifted into the broader public consciousness, and that is fantastic. Some members will be interested to know that he is particularly well-renowned for his nuclear development resonance, his pulsed gradient spin echo research, his dynamic nuclear magnetic resonance microscopy, his scattering formulisation for pulsed gradient spin echo nuclear magnetic resonance, and his pulsed gradient spin echo electron spin resonance in a quasi - one-dimensional conductor. Yet if I ask—

The CHAIRPERSON (H V Ross Robertson): The member’s time has expired.

Hon Dr Wayne Mapp: Give her more. She needs more time.

The CHAIRPERSON (H V Ross Robertson): I call the honourable member Jacinda Ardern.

JACINDA ARDERN: Thank you very much. I think it actually might have been the Minister who enabled me to take my second call. I have just given a list of the areas that one of the honorary fellows is well-renowned for within the science field. If I asked members of the Committee what Sir Paul Callaghan had been recognised for, I wonder whether they would have mentioned anything on that list—the pulsed gradient spin echo electron spin resonance in a quasi - one-dimensional conductor, in particular.

I was not aware that in a global sense Sir Paul Callaghan’s work on nuclear development resonance was something that he has been recognised for. If I ask members of this Committee what they recognise this honorary fellow for, what would it be? I think it would be his contribution to the debate on the role of science within New Zealand and within the New Zealand economy. Off the back of being awarded the title of New Zealander of the Year, he has embarked on a bit of a roadshow around New Zealand, talking about the fact that, in his view, we currently choose to be poor in New Zealand. We choose to be poor because we invest in a low-wage economy.

As an honorary fellow, Sir Paul sees his role—as has been set out by the Royal Society on the website, and within the legislation—as supporting the activities of the Royal Society. He has become a true promoter of science as a way to grow New Zealand’s economy, and as a way for us to become a wealthier nation, and a nation in which we can grab onto the things that New Zealanders are proud of, such as an entrepreneurial spirit, and the idea that we do not have to be the best at everything but can be the best at a few small things. We can be the best not at building health equipment but at building sleep apnoea equipment—the kinds of things that if we multiply them over hundred times, suddenly we turn our economy round.

As an honorary fellow, as recognised by the Royal Society, I am sure that that was probably a starting point for Sir Paul Callaghan to take on the mantra of not just being the scientist who investigated pulsed gradient echo electron spin resonance in a quasi - one-dimensional conductor but of taking on the role of supporting the activities of the Royal Society as a promoter of its work. I would have liked to see us embedding in this legislation the kind of spirit that Sir Paul Callaghan has taken upon himself as an honorary fellow. I am referring to the idea of being a promoter as well as an instigator of other young Kiwis not only becoming members of the Royal Society and potentially future honorary fellows but simply going on to become people like Moana Mackey—the professional members of the Royal Society—those who learn the sciences and stay in the sciences in New Zealand, for the benefit of all of us.

Currently we are losing too many of those potential future honorary fellows. I would like the member in the chair, Grant Robertson, to tell me whether it was ever considered that we include in the legislation the tasks that an honorary fellow might pick up, or the kind of role they might have, because currently this notion of supporting the activities of the Royal Society is rather vague.

I would like to see a greater extension of their role in New Zealand as promoters of science, given, as Sir Paul Callaghan pointed out, the enormous contribution it could make to our future wealth, our income development, and our creation of jobs, not just through things like Labour’s research and development tax credit, which incentivises the private sector to invest in the sciences, thereby creating jobs for our future honorary fellows, but by promoting New Zealand on the world stage, where he is already recognised. The honorary fellows I already listed—David Fergusson, Sally Casswell, Sir Paul Callaghan, James Belich, and Alan Bollard—all have some international recognition.

Again, are honorary fellows meant to support the activities domestically, or, as set out in clause 12, are they intended to stand on the global stage, almost as ambassadors of the Royal Society of New Zealand, demonstrating to the world the huge innovation that we can achieve in New Zealand, despite being a small country? Taking the passion and ability that is demonstrated at primary and secondary schools, putting it on the global stage, and promoting ourselves is, for me, the essence of what I would like to see these honorary fellows doing. At the moment we have very confined clauses, and they do not really express the full potential of the honorary fellow. I would be interested in the views of the member in the chair.

Hon DAMIEN O’CONNOR (Labour) : I have been on duty in the Committee stage, and I have been swept up in the spirit of unity. I have to make a speech on the Royal Society of New Zealand Amendment Bill. I acknowledge the member in the chair, Grant Robertson; I think this wonderful initiative is on his part. I have to acknowledge the Government, because I believe it will support this legislation, and I think that is great.

We on this side of the Chamber understand the importance of research and development, and the celebration of success, to the point where we are going to commit a huge amount of funding for research and development. I am sure that the members and honorary Fellows of the Royal Society will probably appreciate that more than the passage of this legislation. The one thing these people have been battered around by, over the many, many years that they have committed their lives to science, is the uncertainty over funding. So we will commit not just to this legislation and supporting the member, but also to funding to support their work.

I have a couple of questions. One is about the Government having supported and passed much legislation in the House, most of which was bad. But this is a good bill, and the Government is supporting it. I wondered why. I went through the bill, and effectively it includes the humanities. I guess the average New Zealander out there would be asking what the humanities are. If we go to the definition in the bill, we see it includes languages, history, religion, philosophy, law, classics, linguistics, literature, cultural studies, media studies, and art history. If the Government wanted to summarise those things, despite its efforts over the last 2½ years, do members know what it would probably call them? It would call them “nice-to-haves”. That is probably what the Government would call them: “nice-to-haves”. We saw that view when the Government chopped adult and community education and chopped funding for tertiary education courses in this area called the humanities.

The question I have—and I know the member in the chair will struggle to answer it so I will not ask him, in particular, but perhaps a call can be taken by a Government member—is how the Government can rightfully support the inclusion and recognition of humanities alongside mainstream science, yet when it comes to training and encouraging people from the grassroots into courses that are, by this definition, called humanities, the Government says no, they are “nice-to-haves”—they are no good. Well, this legislation, if nothing else, acknowledges those areas deemed to be the humanities as being just as important and right alongside the other traditional areas of science. That is good, and hopefully this might allow the Government to extend its vision through its other economic policies.

The second question I have is one of honorary fellows. The definition was that generally those are people outside of New Zealand, or people who have made a significant impact on New Zealand in many ways. Someone sprang to mind, and I wondered if he has been made an honorary fellow. It is Alan Greenspan, the former US Chairman of the Federal Reserve, who probably had more impact on New Zealand than anyone. The member in the chair shakes his head. Thank God Alan Greenspan has not been made one—that is right.

But the question from here on in is whether with increasing levels of foreign investment and ownership—because that is what the Government wants—people connected to the new foreign owners, or people who may in fact be the new owners, will be entitled to honorary fellowship. I hope not. I hope that the legislation does not open the door for that. The reality is that under the current Government’s policies of increasing levels of foreign investment, control, and influence, one might conclude that an honorary fellowship might be something that we do not support.

TIM MACINDOE (National—Hamilton West) : I move, That the question be now put.

DAVID SHEARER (Labour—Mt Albert) : I would like to take a call on clause 12 of the Royal Society of New Zealand Amendment Bill, because I think the role of honorary fellow is an extraordinarily important one. Before coming to the Chamber I ran though some of the names of current honorary fellows, to take a look at who they are and what they are doing. They are people who have had some sort of an association with New Zealand, and my colleague Jacinda Ardern talked about some of the more notable ones that we are very much aware of. I want to touch on some of these people and what they are doing.

The role of an honorary fellow is stated on the Royal Society’s website, and I just reflect on it. It states: “The Council may from time to time,”—in accordance with academy by-laws—“admit as an Honorary Fellow, any person who is not normally resident in New Zealand, and who, in their opinion, has rendered eminent service to science, technology or the humanities.” I have chosen a selection of these people today. They are people who have some connection to New Zealand, who either have been born in New Zealand and have graduated and gone offshore, or have come to New Zealand and studied and gone away again. They are normally at other universities across the world. This does something that is extraordinarily important. The area and the world of science is globally connected in ways that we could not have imagined many years ago. These fellows give us a connection to many of the universities across the world, and they make the academic life and the international life of the Royal Society that much richer.

I just flicked through and took some people’s names at random, as members can see. One is Martin Banwell, who is a graduate of Victoria University of Wellington. He is now at the Australian National University and is one of the most eminent organic chemists. Richard Bardgett is a professor of ecology at Lancaster University. He is also linked to New Zealand. He was awarded a foundation research project in New Zealand. He has supervised some doctoral theses and he is the leading-edge researcher on linkages between plant and soil communities and how soil organisms and nutrients in the soil go together. These are extraordinarily important, for obvious reasons, to New Zealand and at Lancaster University. These people have strong connections through the Royal Society and through their academic connections back into New Zealand. As I say, these give us the geographic breadth that we need in New Zealand in order to enhance our science through these connections and these relationships across the world.

Sir Patrick Bateson, for example, who has been around for a long time, is a former provost of King’s College, Cambridge. He is currently president of the Zoological Society of London. He was elected a Fellow of the Royal Society of London in 1983. His main connection with New Zealand is through his active membership of the scientific board of the National Research Centre for Growth and Development. It is a centre we are particularly proud of and it has already been mentioned in the debate today.

These are all eminent people. Some of them are New Zealanders and some of them are associated with New Zealand. They are connected through the Royal Society to enable us to extend our breadth and give us those connections and linkages to science across the world. It is for that reason, in a sense, that we again look at the Royal Society. This heightens our awareness of the society and the sort of work it does for New Zealand, which we are particularly proud of. Although this debate could go on for the next 5 years in the context of the time we have to debate this bill, what we are doing, and I think it is extremely valuable, is emphasising and advertising the valuable role that the Royal Society plays in New Zealand. The names of the three people I have read out, in no particular order, are the sorts of people whom the Royal Society captures in its net.

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

LYNNE PILLAY (Labour) : Thank you, at last, Mr Chair. Along with everyone else I have been dying to get into this debate on the Royal Society of New Zealand Amendment Bill. I acknowledge all the contributions that have been made by my colleagues. Certainly, there has been nothing from the other side of the Chamber. There have been some excellent examples of skills and talent not only within the society, with the members, the fellows, the companions, etc., but also with the skills and the sheer talent—raw talent in the case of David Shearer—of the speakers who spoke today. I would like to—

Jo Goodhew: Oh!

LYNNE PILLAY: I know the member in the chair, Grant Robertson, is listening because many members have talked about honorary fellows, but I do have a question and I will ask it.

I am very much a details person, as most people do acknowledge—at the risk of sounding a little big-headed—but I noticed, when I looked at the definition of “Honorary Member” in the principal Act, that the council may from time to time grant honorary membership of the society to any ordinary member who—

Jo Goodhew: I raise a point of order, Mr Chairperson. It does feel to me that we are on the wrong clause. We are talking about “Honorary Fellows”, and this has not been mentioned yet.

LYNNE PILLAY: Speaking to the point of order, I say that if the member had given me a moment she would have seen that I was making a very valid comparison—

The CHAIRPERSON (H V Ross Robertson): The member is now debating the issue. Would the member now narrow the debate and come to order.

LYNNE PILLAY: The point is taken. I will make a comparison, as I was going to do before I was interrupted, between honorary members, which I started to define, and honorary fellows.

The point is that section 16 of the principal Act, headed “Honorary Members”, states that honorary members are not required to pay any levies to the society. I accept that, but what I notice under “Honorary Fellows” is that they are not normally resident in New Zealand. I do hope that the member is listening, because I am coming to the point that is very important. When we look under “Honorary Members” we see that they are not required to pay any levies to the society, but there are no other points. When we look at “Honorary Fellows”, in section 17 of the Act, we see that they are not normally resident in New Zealand, but, as David Shearer has said, they have contributed and they are admitted as an honorary fellow. Like honorary members they are not required to pay any levy to the society, but in addition—and this is the point—they are not entitled to vote in respect of any matters before the academy council or the society, or to hold office in the academy council or the society. That is something different. They are not normally resident, but even if they are resident, whilst they do not pay fees they are not able to participate within the society.

The difference is that the principal Act is silent in terms of honorary members, so does that mean that honorary members are able to participate in respect of any matters before the academy council or the society, or to hold office in the academy council or the society, or is it the case that honorary fellows cannot do that because they are not normally resident? That does not mean they are not New Zealand residents, of course—because they are—but they are not normally resident in New Zealand. I feel quite proud because there are quite a few sharp people on this side of the Chamber but I was the one who pointed it out. I know that the member Grant Robertson is very interested in this and may be able to enlighten the Committee.

The other thing I add is that everybody has acknowledged the movement from being a member or a fellow to honorary status and how significant that is, but what is even more significant is that that will happen to people who are now working in the humanities. So when we acknowledge all the people, who perhaps are New Zealanders working overseas, who have made a tremendous contribution and reached this honorary status, it will also apply to people in the humanities. That will be a tremendous honour, not only for the people who have that honour bestowed on them but also for us as Kiwis. It will be an honour to have people recognised in that way, because often when they are not resident in New Zealand much of what they achieve happens on the world stage. So it is very much an acknowledgment of what is happening there.

GRANT ROBERTSON (Labour—Wellington Central) : I want to respond to the question that has just been asked by Lynne Pillay, and I congratulate her on having an eye for detail and being able to identify the difference between honorary members and honorary fellows, as covered in clause 12. I also want to respond to Jacinda Ardern’s questions about the process by which honorary fellows come to be honorary fellows.

I will take the second point first. Yes, there is a difference here, but although the member has identified the difference—that honorary fellows are not entitled to vote—honorary members absolutely are entitled to vote and be involved. That is because—and this is the important distinction—an honorary member is already an ordinary member before he or she becomes an honorary member. So the distinction here in respect of voting, as stated in section 17(2) of the principal Act, on “any matters before the Academy Council”—soon to be renamed—or the overall council of the society, is that the only people who are involved in that are members. That is the distinction. So honorary fellows are not members and, I would suspect, have not, in most cases, been members of the society.

If for some reason an ordinary member of the society was made an honorary fellow of the society—perhaps a person who had been a scientist in New Zealand and had left and was now working overseas—I presume that he or she would be able to participate in the voting on the basis of their membership rather than on the basis on their honorary fellowship. I congratulate the member on noting that difference, but that is the cause of it. Honorary fellows are in fact not members and therefore are not able to participate.

Jacinda Ardern: Who, new in the humanities, would be included, who is not already included?

GRANT ROBERTSON: Well, we do not know, because we do not know who will be yet, but there will be some.

I think it is important to clarify that and note that that is the distinction in clause 12, “Honorary Fellows”. They do not have the right to vote but they are people who have a connection with New Zealand, and that brings us to the earlier question. I think it will be useful for members if I run very briefly through the process for electing honorary fellows. It is similar to the process for electing fellows. Nominations are given to the fellowship selection panel, and recommendations from there go to the fellowship selection committee. The important point is that consideration is given to each candidate’s sustained research excellence and to his or her association with New Zealand. So it is not just a random scientist from somewhere in the world. When consideration is being given to the question of honorary fellowship, it is not only a question of sustained research excellence—which is the same threshold that normal Fellows of the Royal Society need to meet—but also his or her association with New Zealand. I think that is important, because for the society to be the Royal Society of New Zealand it does mean that the people who are honorary fellows have some association with New Zealand. As I think I said in an earlier intervention, it is highly likely that they have either worked or studied in New Zealand or are engaged in some form of research that actually involves a New Zealand scientist. I think that is a very important point.

Nominations for honorary fellowship remain valid for 2 years, so if someone is not accepted immediately there is a 2-year window in which the Royal Society could choose them, and after that there is a 3-year stand-down period. So if a person is not successful in becoming an honorary fellow in 2 years, they have to wait for 3 years before they can be nominated again, and perhaps in that time they could improve their links with New Zealand or get a more sustained research record. If the fellowship selection committee recommends that a candidate be elected as an honorary fellow, that nomination goes to the academy executive committee, which meets following the fellowship selection committee, and the names of the people who are elected to honorary fellowship are announced at the fellows’ AGM each year.

Anyone who has looked at the website will see that there are not too many honorary fellows. It is kept as a fairly limited pool, just as the overall fellowship of the Royal Society is. I hope that has answered some of the questions that colleagues have raised. It is certainly an important distinction that is being drawn between honorary membership and honorary fellowship, as my colleague Lynne Pillay has raised. I think what we have been through this afternoon and this evening is a good look at the range of membership and the way in which the inclusion of the humanities has changed those categories of membership.

Hon Steve Chadwick: They will.

GRANT ROBERTSON: It certainly will change those categories of membership. With honorary fellows we will now see a pool of internationally respected humanities researchers—

KRIS FAAFOI (Labour—Mana) : Taloha ni, Mr Chair. I am acutely aware of the time tonight. In reference to an interjection from my colleague Chris Hipkins, it is our understanding that CSI is on tonight. As the Royal Society of New Zealand has been predominantly dominated by scientists up until recently, I am sure they have now switched from TV3 over to channel 93, because they are very interested in this debate.

Chris Hipkins: Well, CSI is not real science anyway.

KRIS FAAFOI: Yes, well, it is Hollywood meets science. I am sure that they are very interested, none the less. It would be remiss of me not to tell them exactly where we are in the debate on the Royal Society of New Zealand Amendment Bill. It is my understanding that we are on clause 12, which covers honorary fellows. It amends section 17 of the Royal Society of New Zealand Act “by omitting ‘Academy Council’ in each place where it appears and substituting in each case ‘Academy Executive Committee’.” Subclause (2) amends section 17(1)(b) “by omitting ‘science or technology’ and substituting ‘science, technology, or the humanities’.”

Now that we have got everyone up to date at home as to exactly where we are on the Royal Society of New Zealand Amendment Bill, I will look at exactly what an honorary fellow is. An honorary fellow is someone who is not normally resident in New Zealand who has given eminent service to science, technology, or the humanities.

I will diverge a little bit to congratulate the Royal Society of New Zealand. Many of us have gone to its website—and I assume the website has been engulfed recently by great interest, especially on Wednesdays. Its website is already, despite this legislation not having been passed yet, referring to the humanities in how it gives out its honorary memberships. It states in relation to companions that a companion is an honour given to a person to recognise “sustained and outstanding leadership and contributions to the promotion, encouragement, and advancement of knowledge in science, technology, and the humanities in New Zealand.” So, despite the fact that this bill has not passed thorough the House, the Royal Society of New Zealand is already acknowledging that the humanities have come into its realm.

I will take the opportunity to look at exactly what the humanities are, because I think that is very important in terms of what will now happen with honorary fellowships—if members could give me one second. The humanities now include languages, history, religion, philosophy, law, classics, linguistics, literature, cultural studies, media studies, art history, film, and drama. Although that is great and I think it is very exciting for the Royal Society of New Zealand to be entering this new arena where it is not focused on just science and innovation, I will concentrate on science and the role that the Royal Society of New Zealand has played in science in New Zealand. In particular, I will make reference to the speech from Jacinda Ardern. She made reference to the New Zealander of the Year, Sir Paul Callaghan. Sir Paul Callaghan is a full fellow, I believe, of—

Jacinda Ardern: He is a full fellow.

KRIS FAAFOI: He is a full fellow. Thank you very much for confirming that. Sir Paul Callaghan—I can confirm for those at home—is a full Fellow of the Royal Society of New Zealand. [Interruption] No, do not apologise; it has been clarified. As New Zealander of the Year, Sir Paul made what I call a very inspirational presentation to our Labour congress about what he sees as the vision for New Zealand. In terms of that vision, he thinks it is very important that we attract the smartest thinkers from outside of New Zealand into New Zealand. I guess that ties into the fellowships of the Royal Society of New Zealand. The honorary fellows are not usually resident in New Zealand, and we need to attract a lot more of these clever, smart, top-end thinkers, in the opinion of Sir Paul, for our economy to grow in a sustainable way and so we are not relying on our primary production, which has been the history of New Zealand to date.

I will not just concentrate on Sir Paul. Let us take a look at one of those honorary fellows, who is someone we could attract to New Zealand. I think he may have been mentioned by my colleague David Shearer earlier on in this debate; I am not sure if it was on this clause. That person is Martin Banwell, who is at the Australian National University in Canberra. His link to New Zealand is that he is a graduate of Victoria University.

JACQUI DEAN (National—Waitaki) : I move, That the question be now put.

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

Ayes 68 New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.
Noes 53 New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C.
Motion agreed to.
  • Clause 12 agreed to.

Clause 13 Revocation of membership or fellowship

GRANT ROBERTSON (Labour—Wellington Central) : It is a pleasure to talk about clause 13 of the Royal Society of New Zealand Amendment Bill, and a very interesting clause it is. This clause covers the question of revocation of membership or fellowship. One might think that in a body like the Royal Society, which is full of serious-minded, professional scientists and academics, there would never be a situation where there would need to be revocation of membership, lest even revocation of fellowship, given that there are so few fellows for there to be a situation in which revocation could occur.

It is worth looking in some detail at the section of the Royal Society of New Zealand Act as it now stands on revocation of membership, which is section 18, given that this is such a serious matter. Section 18 of the Act tells us that the council of the Royal Society “may, at any time, in accordance with the rules, revoke a person’s or an organisation’s membership”—and I will come back to that—“of the society if—(a) that person or organisation has not adhered to the code of professional standards and ethics; or (b) that person or organisation has acted in a manner that is inconsistent with the Society’s object or functions as set out in sections 5 and 6.” The section goes on to state: “(2) The Council may at any time, in accordance with the Academy bylaws and on the recommendation of the Academy Council, revoke the fellowship or honorary fellowship of a person.”

I just clarify that in that section there are two pathways. One is for those who are members, and that is where a person has breached the code of professional standards and ethics, and/or where they have behaved in a way that is inconsistent with the objects and functions of the society. The threshold for revoking the fellowship of a Fellow of the Royal Society is set at a higher bar and it has to go through the academy council, which is now renamed the academy executive committee. It would be a significant decision to remove someone from the Royal Society. It begs the question of whether this has happened before. That is the obvious question that it begs, and my research to this point has not identified anyone. I would be interested if members have an example of somebody who has had his or her membership or fellowship revoked. It seems like a very serious sanction.

When we look at the two ways in which one could have membership revoked, we see it can happen with someone not adhering to the code of professional standards and ethics. This is important. I guess this instance could come about if somebody perhaps plagiarised some research, undertook research in an unethical manner, or perhaps did not get ethics committee approval for the research they were undertaking. If a member of the Royal Society became aware of that, they may choose to make the academy executive committee aware of that situation. I think that would be the kind of example that would fit within section 18(1)(a). It is difficult to imagine that that could happen, given the integrity of most scientists and most scientific institutions in New Zealand. But it is possible that, from time to time, some people will do this. We have had examples in the medical field where people have falsified their qualifications and have misrepresented themselves in order to work in New Zealand. If people like that could end up as members of the Royal Society, then this would be a way in which they had breached the code of professional standards and ethics. That would, potentially at least, bring up the notion of revocation of membership.

The second part of the clause is perhaps more interesting. This is currently section 18(1)(b), which is being amended by clause 13. That is where a person has acted “in a manner that is inconsistent” with the Royal Society’s objects and functions. To be honest, this is quite a broad category. We know that the academy executive committee will act very cautiously, but it is worth noting as we come to this point in the debate that acting inconsistently with the objects and functions of the organisation is quite broad. The object of the society is the advancement and promotion of science and technology in New Zealand. How can one act inconsistently with that—for instance, would it be inconsistent if a member or a Fellow of the Royal Society went along to a school one day and said to the students: “I don’t think you should study science.”?

Chris Hipkins: What about creationism?

GRANT ROBERTSON: Exactly. Mr Hipkins suggests that perhaps someone might go and teach creationism in a school. Would that be against the object of the Royal Society, which is the advancement and promotion of science and technology in New Zealand? It is a very broad category that if somebody is seen to be acting inconsistently with the society’s object, he or she could have that membership revoked. As I say, I have no doubt that the academy executive committee would behave responsibly and would never let a situation arise where someone was unduly drawn in, but it does create the possibility—the potential—for such things.

Equally, section 18(1)(b) also talks about someone acting inconsistently with the functions of the Royal Society. Those functions are broad. They are about fostering a culture that supports science, technology—and now the humanities—public awareness and knowledge, the advancement of science and technology education, excellence in science and technology and about providing an infrastructure for the professional needs and development of sciences and providing expert advice on important public issues. There may be a situation in which somebody is called upon to provide advice to the Government on an important matter to do with science, technology, or the humanities, and they do not give that advice to the highest professional standard. They perhaps let a bias come into their advice. That may well be the example we are talking about, where somebody’s actions are so egregious that the Royal Society would decide that this was a time to revoke the person’s membership. As I say, I have not yet been able to find an example of a revocation of membership of the Royal Society, but the fact that it is provided for indicates that it is possible. Therefore, we need to take seriously this clause. Obviously, it alters the way in which decisions are made about that by changing the language from “Academy Council” to “Academy Executive Committee”, which will have the role to make these decisions.

Just briefly, the other category that is within the revocation clause is the revocation of a fellowship. As I said before, there are only 366 fellows at this time. They are people who have reached the highest level of academic excellence. It would be very surprising to think that any of them would be in a position where their fellowship would need to be revoked, but there is the possibility to do that. The ability to do that is held by the council of the Royal Society, which is the overall governing body of the Royal Society. So the gravity of doing something like this is recognised in section 18, which is being amended by clause 13. It is important to note that any revocation of a fellowship has to be in accordance with the academy bylaws, and on the recommendation of the academy executive committee to the council. It is also possible to revoke an honorary fellowship. Given that those honorary fellows, as we established in the last clause, have no voting rights, they are quite excluded from the process. Again, there are some issues that the academy executive committee of the Royal Society would need to bear in mind.

They are the comments that I wanted to make on this. Section 18 is actually quite a significant part of the Royal Society of New Zealand Act, which we are now amending through clause 13 of the bill. We are amending it to change the name of the organisation that is making these decisions about revocation. It is important that we note that it is possible to lose one’s membership of the Royal Society. We have spent some time tonight talking about that and the significance of that.

DAVID SHEARER (Labour—Mt Albert) : I just wanted to—

Darien Fenton: Your membership’s cancelled.

DAVID SHEARER: Revoked—I have been revoked. I just wanted to make some comments on what Grant Robertson was talking about. He said he could not find any history of a revocation of membership actually happening, so I think that the possibility of clause 13 of the Royal Society of New Zealand Amendment Bill being acted upon is very unlikely. Clearly, the reason for that is that in many ways these people are self-selecting. To get to that level they have to be of the highest quality. They are judged by their peers. It is interesting in looking through the various types of membership and the way that the activities are carried out within the Royal Society to see the presence of peers judging peers, or measuring peers, to ensure that we are talking of the highest quality.

I cannot imagine the possibility that somebody could be, in a sense, thrown out from that position, unless a pretty serious occasion caused that. I could only think that if that was the case, it would have to do with science and the way that the person conducted himself or herself in science. I am thinking of people not conducting their research in a way that was in accordance with the highest scientific principles. Possibly plagiarism or something along those lines might cause a scientist of that standing—given that they are of the standing to be in that illustrious group—to have that title taken away.

I also touch on clause 13 itself: “Section 18(2) is amended by omitting ‘Academy Council’ and substituting ‘Academy Executive Committee’.” Although in some ways this change is administrative and very perfunctory because this council will have the powers to take these sorts of decisions, it is worth looking at the structure, and at the new structure, in particular. The supplementary submission made by the Royal Society to the Education and Science Committee looked at the new structure of the council. It noted that academy council, which is the name that has been used until now, will be changed to academy executive committee. That change is proposed in the bill to avoid confusion with the council of the society itself, and that is provided for in the bill.

The restructure is noted in the bill. It is set out there and is also set out in the explanatory note. The new structure of the council includes one president and six elected vice-presidents. They each have specific responsibilities in biological and life sciences; physical sciences, mathematics, engineering, and technology; social sciences—which are important in the context of the humanities, as we are discussing here—international; education, public awareness, and outreach.

To be perfectly honest, we are doing some of the job of the Royal Society tonight, because anybody who is watching this debate through the various clauses and parts that we have debated in this Chamber will come away with an extraordinarily detailed understanding of what the Royal Society is all about. I think that is a useful by-product; in fact, it is more than a by-product. I think it is part of the role of government.

All of us have talked about the eminence of these people. I reflect on the fact that just recently a poll found that the three most trusted New Zealanders are all scientists, and they all—actually, maybe not Ray Avery, but certainly two of the three—are Fellows of the Royal Society. The point I am making is that the Royal Society is a hugely prestigious organisation, and we have talked about this at length before. It is difficult to become a fellow, a member, or, in particular, an honorary member. I appreciated Grant Robertson’s explanation about the difference between those types of membership in response to a question he was asked. The Royal Society is a highly prestigious organisation, and it is structured in a way to ensure that the highest standards are maintained.

To go through the new structure of the council, as I was talking about before, we have the president, six elected vice-presidents with their specific responsibilities, and one elected representative of the regional constituent organisations. This is one area in which we received a great deal of submissions on this bill, and most of those organisations making submissions were unhappy about the inclusion of the humanities in the bill. Those objections came from the regional organisations, in particular. They were unhappy with bringing the humanities into the bill, as has been spoken of before, because they felt it would, in a sense, dilute the scientific nature of the Royal Society, which they believed should very much remain the pre-eminent science organisation.

The arguments laid out by the Royal Society in its various submissions, and what we heard from the Ministry of Research, Science and Technology, as it was then—it is now the Ministry of Science and Innovation—was that the move forward to bring in the humanities would greatly enhance the Royal Society, and not diminish it. In fact, in many ways what might be diminished, given the eminence and the gravitas of the Royal Society, is the humanities, which might be submerged amongst the sciences. I think there is more to worry about in a sense of, not exactly a takeover, but certainly a crowding out, if you like, of the humanities, rather than the sciences.

As we have argued as we debated many of the clauses in this legislation until now, we believe that the humanities can only enhance the work of the Royal Society. In many of the other royal societies across the world where they have made this change, it has enhanced the ability of those royal societies to function and to make a really valuable contribution not only to science and intellectual endeavour but to the policy arena as well, which ultimately for us as politicians, for example, is very much appreciated.

I will come back to the new structure of the council to be amended under clause 13, which states: “Section 18(2) is amended by omitting ‘Academy Council’ and substituting ‘Academy Executive Committee’.” Yes, on the one hand that is a rather administrative or technical point, but nevertheless it is an important change, and is a particularly important change given the types of changes and alterations that have taken place for the various memberships of the Royal Society.

To wrap up, I point out once again that given the nature of the Royal Society, as Grant Robertson said, it would be very difficult to imagine clause 13, “Revocation of membership or fellowship”, ever having to be used. It can happen at any time, but, like Mr Robertson, I have not been able to find a single incidence of this actually happening. If it did happen, it would probably make the headlines, frankly, because the Royal Society is of such gravitas and standing in our community and in New Zealand that it certainly would not go unnoticed. It would be for a very serious academic crime.

LOUISE UPSTON (National—Taupō) : I move, That the question be now put.

Hon STEVE CHADWICK (Labour) : I do feel sorry for Government members, because when I look at those who were on the Education and Science Committee, I see members like Allan Peachey, who I know would love to come and take a call on the Royal Society of New Zealand Amendment Bill. I also see Jo Goodhew. Jo would have enjoyed standing up to give an erudite contribution to the debate in the Chamber tonight. I also think of Heather Roy. She could have given a great perspective from her research-based background, which she has always been known for with regard to her contributions on health. I also see Louise Upston. So it is a pity that Government members are not joining in this fulsome debate tonight.

We have hit clause 13 tonight, and I think this is the nuts and bolts of this bill. Since we began the debate on the bill today, we have romped, really, through five clauses—five clauses. Through this we have had an amazing learning experience in the Chamber tonight, and I want to thank clause 9—

The CHAIRPERSON (H V Ross Robertson): Point of order, Jo Goodhew. [Interruption] The member will be seated.

Jo Goodhew: I raise a point of order, Mr Chairperson. Once again I find that we are transgressing from the clause under debate. I have not heard it mentioned. In fact, I think I heard clause 9 mentioned once. So I would ask that you ask the member to narrow the debate to the 12-word clause under debate.

The CHAIRPERSON (H V Ross Robertson): Thank you. I was coming to that conclusion myself. Can the member narrow the debate to the clause in question.

Hon STEVE CHADWICK: Well, that took 2 minutes. Thank you, Mr Chairperson. What a pity it is that that was the contribution from the Government today—just to take a point of order. But here we are.

National’s junior whip will be really thrilled to know that I am getting to clause 13—clause 13. We have romped through five clauses tonight since we have been in this debate, and we have hit clause 13, which is really the nuts and bolts of this bill, because it is about the revocation of membership or fellowship. We have gone through, in the previous five clauses, the provisions relating to the fellows, the companions, the honorary members, and the honorary fellows, and now we have hit the clause that really is the sanction—the sanction given by the Royal Society of its very membership, which is the great society that we all enjoy here in Parliament. I heard one of my colleagues, David Shearer, speak earlier. He is our spokesperson on science, and he knows more about this area than I do. He doubted whether this revocation clause would be needed very often. But, actually, now as we get more academics in the sciences, the humanities, in technology, and in the market place and in the educational institutions, there is an element of requiring much more care to be taken about the validity of the research and ensuring that research has not been plagiarised. We are seeing examples in New Zealand of research having been plagiarised. Even peer review is sometimes a very slow process, and that is the mechanism that the Royal Society uses.

Perhaps the member in the chair, Grant Robertson, who is sponsoring the bill and who knows so much about the details of it, could elaborate as to whether there is a complaints committee mechanism. I do not see it here, but we have gone through other substantial legislation like the Health Practitioners Competence Assurance Act, where we put in a complaints mechanism. I think this bill is still a little loose, with this heavy revocation clause. I mean, it is the ultimate sanction if someone’s membership or fellowship is revoked. That would be the ultimate embarrassment professionally to any academic. But there does not seem to be a feed-in mechanism to the Royal Society about the management of complaints and the reception of complaints. I am not sure whether this is now a matter for the academy executive committee, which is mentioned here. Is it just open to anyone in the public to complain about a member or a fellow, in terms of whether he or she is abiding by the code of ethics or the standards of professional conduct that is to be applied consistently to members? I do not know what the complaints mechanism is; it would be helpful if the member in the chair would help us on that.

But I think it is a great thing to see clause 13 in the bill. The Royal Society is much more than a club. I grew up as a little girl with my father as a member of the Freemasons, and that was like being in a secret society. I used to pick dad up when I got my driver’s licence, and I had no idea what they were up to.

TIM MACINDOE (National—Hamilton West) : I move, That the question be now put.

JACINDA ARDERN (Labour) : I appreciate the opportunity to speak specifically to clause 13 of the Royal Society of New Zealand Amendment Bill. I have not had an opportunity to speak to this clause, which focuses on the revocation of membership or fellowship. This is set out in section 18(2) of the principal Act. It is very specific, but, as I think my colleagues have alluded to, we hold some concerns over this clause, and I ask whether we have missed an opportunity here. I would like to hear the member in the chair’s contribution on this; perhaps it will take a lengthy contribution to respond. Details are important on this, because, as my colleagues have raised, although this clause amends only section 18(2) by omitting “Academy Council” and substituting “Academy Executive Committee”, that does very little to allay the concerns that members here have over whether the revocation of membership or fellowship is a robust procedure in and of itself. I would like to know from the member in the chair what the substitution of the word “council” with “executive committee” represents. Is that a broadening of the panel that makes the decision on revocation? Would the academy executive committee, for instance, include other members who might not be members of the council but may have specialist knowledge? For instance, if we are talking about a controversial revocation, would it be possible to co-opt a lawyer on to the academy executive committee, as opposed to the existing academy council? As my colleagues have outlined, there is the potential here, embedded within this clause, for quite a significant controversy. Although we have not been able to find any examples of revocation of membership or fellowship, there is the potential that if someone were to lose his or her weighty title within the Royal Society, it could create great waves.

The second point I want to raise is that the clause does not include a great amount of transparency around the process for having membership revoked. Very clear within the public details of the Royal Society is the very onerous process one must go through in order to become a member or recognised fellow, but there is not that kind of transparency in relation to what happens if that role or membership is removed from someone. I think that is an omission. It is probably contained somewhere within the Royal Society’s membership guidelines, but I think it would be helpful if that were made public. I know that many people would be very interested to know what it would take for Sir Paul Callaghan to have his role as a fellow removed. In fact, I have heard of people who in the past have wanted to find this information but have been unable to do so.

I also want to ask about what criteria it takes to have a revocation of one’s membership. For instance, the point was raised that a revocation may be rendered if it was thought that one would teach in schools—what is it called again, President Bush’s favourite—

Chris Hipkins: Creationism.

JACINDA ARDERN: —creationism. My question is, given that there is an expert panel on climate change within the Royal Society, if one was a climate change denier, for example, someone like Rodney Hide—oh, we are blessed with the member’s presence in the Chamber—became an honorary member of the Royal Society and then tried to establish within Parliament a select committee to deny climate change, which I believe actually happened in real life, would that be an example of when someone would lose his or her membership or fellowship? I think we should have that question answered. Is it simply that one brings degradation of the Royal Society? Could it occur when one acts in a way unbecoming of the Royal Society? Is poor behaviour significant enough to be judged by the new academy executive committee, given clause 13? Is that criterion sufficient to have one’s membership revoked?

People have referred to the honourable role of the Royal Society and the idea that it is perceived to have great integrity, which it does. I imagine that the society will be very cautious to protect that brand. Does this clause allow the academy executive committee the ability to disbar, as it were, someone who behaved in a way unbecoming of the Royal Society, and what would that behaviour include? Would it include an appearance on Dancing with the Stars? I would not want to speculate, but there could be a range of options that are deemed to be behaviour unbecoming of the Royal Society.

GRANT ROBERTSON (Labour—Wellington Central) : I think it is timely for me to respond to the very interesting questions asked by my colleague Jacinda Ardern. I would not dare to respond in terms of the matters she raised with regard to the Hon Rodney Hide. I would certainly leave him to make any contribution he may wish to make in that regard. But I do want to answer her question about exactly who will be making the very important decisions covered under section 18 of the principal Act, which is being amended here by clause 13 of the Royal Society of New Zealand Amendment Bill, and to say it is the academy executive committee.

The academy executive committee consists of what are called the three discipline-based vice-presidents. That should not be confused with their having any role in discipline. This is a case of using the word “discipline” in the context of an academic discipline. There are three discipline-based vice-presidents: the vice-president (biological and life sciences); the vice-president (physical sciences, mathematics, engineering, and technology); and, to keep Dr Prasad happy, the vice-president (social sciences). Those three vice-presidents are on the academy executive committee and will make the decision about whether to revoke the membership of a member of the Royal Society. In addition to that there are three other Royal Society of New Zealand councillors, who must also be fellows, who are on the executive committee. I imagine that if the issue they were dealing with related to another fellow, there might be some questions of conflicts of interest. But in terms of dealing with a complaint about the revocation of membership, that complaint would be dealt with by the academy executive committee with the three councillors on it. There are also three more fellows added to make up the full Royal Society council.

The question Jacinda Ardern asked was whether a lawyer could be added to that body if there were a disciplinary matter or a revocation of membership under consideration. There is not currently anything in the Royal Society rules that allows for that. The Royal Society rules about that simply state that membership is for a 3-year term, that members cannot hold office on the academy executive committee for more than two terms, and that the committee will be chaired by one of the vice-presidents. The rules also talk about vacancies in the event of deaths or resignations. But there is nothing in the rules about adding in any legal expertise to the executive committee to make decisions about the revocation of membership under section 18 of the principal Act, as amended here in clause 13. I would imagine, I say for Jacinda Ardern’s benefit, that the academy executive committee may well take legal advice in this situation. I think that would be the only wise course of action, if the committee was moving towards the idea of revoking someone’s membership. But it is a very valid question, and I think that the debate on this clause tonight, which has been very valuable, has drawn out the fact that this sanction is quite severe, and that considerable thought needs to be given to it.

I have tried in this intervention to indicate that the academy executive committee, which is now being named here under clause 13, is an august body, with three vice-presidents representing the full gamut of the activities covered by the Royal Society, and also with the addition of other fellows, who will be part of the academy executive committee for the period that they are there. I note that as we move on through the bill, we will be making some changes to the way that the academy executive committee operates, and when we get to that point, it will be worth reflecting back to the question of whether that committee is now constructed in a way that represents the full activity of the Royal Society. But for now, the academy executive committee will be making that serious decision about whether someone’s membership should be revoked.

Hon Steve Chadwick: Is there a complaints committee?

GRANT ROBERTSON: I was just about to come to my colleague Steve Chadwick’s question.

No, there is no complaints committee process. I think, given that the academy executive committee is such an august body, most members will be comfortable with that. I presume, however, as with any public organisation, that judicial review could come into play. If somebody did have his or her membership revoked, it would be possible to move it to that higher level. But within the rules of the Royal Society, there is no complaints process beyond a complaint being referred to the academy executive committee. I feel that probably gives sufficient closure for that matter.

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 64 New Zealand National 58; ACT New Zealand 5; United Future 1.
Noes 57 New Zealand Labour 42; Green Party 9; Māori Party 4; Progressive 1; Independent: Carter C.
Motion agreed to.
  • Clause 13 agreed to.

Clause 14 Elected Councillors

GRANT ROBERTSON (Labour—Wellington Central) : Earlier, in debate on the previous clause, Steve Chadwick said that we had reached the nuts and bolts of this legislation. Well, I beg to differ. I think we have now reached the nuts and bolts of the legislation, because we are now moving slightly away from the question of the incorporation of the humanities and towards the way in which the Royal Society wants to structure itself. When this bill was brought before me as the member for Wellington Central, the Royal Society sat down with me and said: “Look, the main thing here is about the humanities, but there is also some very important tidying-up of the way we go about our business.” That is what we have reached here.

Tim Macindoe: The age of enlightenment has arrived.

GRANT ROBERTSON: Mr Macindoe is enlightened, and I plan to enlighten him further—at some length too, I might add. In clause 14 we come to the question of amending section 22 of the Royal Society of New Zealand Act as it now stands.

  • Progress reported.
  • Report adopted.
  • The House adjourned at 9.55 p.m.