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28 February 2012
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Volume 677, Week 4 - Tuesday, 28 February 2012

[Sitting date: 28 February 2012. Volume:677;Page:567. Text is incorporated into the Bound Volume.]

Tuesday, 28 February 2012

Mr Speaker took the Chair at 2 p.m.

Prayers .

Questions to Ministers

Government Financial Position—Government Debt

1. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What reports has he received on Government debt?

Hon BILL ENGLISH (Minister of Finance) : Net Government debt has increased from $6 billion in 2008 to $50 billion at the end of 2011, and is forecast to grow by another $25 billion to $75 billion at its peak in 5 years’ time. The Government is confident that its plans to stop debt rising and start reducing it will mean that Government net debt will peak at $75 billion and start falling.

Maggie Barry: What steps has the Government taken to responsibly manage its finances and reduce the build-up in debt?

Hon BILL ENGLISH: Given the scale of increase in the Government’s net debt, it is important that we take decisive steps to slow the rate of increase and stop debt increasing. We have committed to a faster return to surplus in 2014-15 so that we can stop the increase in public debt, reprioritised $9 billion of spending over the last three Budgets, and committed to selling minority stakes in some State-owned assets, which will raise between $5 billion and $7 billion over the next 3 to 5 years, so that we do not have to drive that Government debt even higher than its $75 billion peak.

Maggie Barry: Why is it important to keep Government debt under control?

Hon BILL ENGLISH: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I apologise to the Minister, but I do want to hear the answer, and I am sure the House does.

Hon BILL ENGLISH: You only need to watch TV any night of the week currently to see the impacts of excessive debt on some of our communities. The best reason to get on top of debt is to protect our most vulnerable, because our most vulnerable are most dependent on sustained support from the Government, and Governments with too much debt cannot sustain support for their most vulnerable.

Rt Hon Winston Peters: Given that the Minister’s service in his tenure as Minister of Finance has led to these unparalleled, disastrous results—

Hon Dr Nick Smith: Here’s the big spender.

Rt Hon Winston Peters: No, we had a surplus, son. We had a surplus.

Mr SPEAKER: Order!

Rt Hon Winston Peters: Remember?

Mr SPEAKER: Order! The member will resume his seat.

Rt Hon Winston Peters: Yes; thank you.

Mr SPEAKER: I am on my feet, I say to all members. But I should point out to the right honourable gentleman that inserting his opinion into questions is not actually within the Standing Orders. The reason why that question elicited an interjection was that questions should ask questions, not express the member’s view about whether something was disastrous or not.

Rt Hon Winston Peters: It is a locative situation. The thing speaks for itself, for goodness’ sake!

Mr SPEAKER: The member will just ask his question.

Rt Hon Winston Peters: Does the Minister of Finance think it is a moot point that his time as Minister of Finance has seen the most disastrous economic outcome in this country’s history, and if not, why has he not long ago resigned?

Hon BILL ENGLISH: I know that the member—[Interruption]

Hon Trevor Mallard: I raise a point of order, Mr Speaker. As someone yourself approaching the age range of the Rt Hon Winston Peters, I think you will find, as I did, the offensive comments about older people from Paula Bennett just very, very objectionable.

Mr SPEAKER: Forgive me—I was so focused on the question being asked that I did not even hear what was said. If the member said anything offensive, then I will ask her to withdraw. If it was not offensive, I will take the member’s word for it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I rise to say that I do not take offence at that. I am happy to challenge her to a 100-yard race any day of the week.

Mr SPEAKER: Order! The House should just take a deep breath. If the Hon Bill English remembers the question that was asked, he may now answer it.

Hon BILL ENGLISH: I am pleased that the member shares our concern about the level of debt, and I will look forward to his support for the measures the Government takes to prevent that debt rising to excessive levels.

Maggie Barry: Has the Minister seen any reports of alternative approaches to managing debt?

Hon BILL ENGLISH: I have heard reports that indicate that other political parties do not believe that it should be managed at all. In fact, they are proposing that the Government should not sell shares in some assets, because they would rather go to volatile international financial markets and borrow billions more, paying interest to overseas lenders rather than dividends to New Zealanders.

Hon David Parker: Did the Minister say, following his election in 2008, that in New Zealand “We have room to respond. This is the rainy day that Government has been saving up for.”, and when he said that, had he inherited in New Zealand amongst the lowest Government debt in the OECD?

Hon BILL ENGLISH: The problem with what we inherited was that that level of debt was unsustainable, because Government expenditure was rising very rapidly—

Mr SPEAKER: Order! The member’s question was quite specific in the first part of the question. Admittedly, there were two parts to the question, but it would be helpful if the answer really addressed at least one part of the question. If the Minister did not hear the question, I invite the Hon David Parker to repeat it.

Hon David Parker: Did the Minister say, following his election in 2008, that in New Zealand “We have room to respond. This is the rainy day that Government has been saving up for.”, and when he said that, had he inherited in New Zealand amongst the lowest Government debt in the OECD?

Hon BILL ENGLISH: Yes, I did say that, and that is why I am surprised that the new version of the Labour Party has no particular concern about debt at all.

Welfare Reforms—Availability of Jobs

2. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement in relation to the Government’s welfare reforms announced yesterday that “… there are plenty of jobs out there for people if they look really hard”; if so, why?

Rt Hon JOHN KEY (Prime Minister) : Yes, I stand by my full statement, which was: “… it’s worth pointing out that in all of the changes we are making, it is about people, if they can, being work ready. If they don’t get a job, if there isn’t a job there for them, then nothing changes in terms of their entitlements. But there are plenty of jobs out there for people if they look really hard. Now obviously not for every single person … but people do find work, and the economy is constantly creating new jobs …”.

Metiria Turei: Why is his Government intent on forcing single parents with little babies as young as 12 months old to abandon their children and compete with the 150,000 New Zealanders who are already desperately looking for work?

Rt Hon JOHN KEY: Firstly, I think it is worth pointing out what the Government’s proposed changes are when it comes to women on the domestic purposes benefit—that is, full-time work-testing when the youngest child is 14, and part-time work-testing when the youngest child is 5. The only requirements for a mother to go back to work when the youngest child is 1 would be in the event that the child is born while the mother is already on the domestic purposes benefit, of which last year there were over 4,000. Why do we think it is better for them to go to work? Well, if you look at the system that has been in place now through a number of Governments, you see that that system supports high levels of income for people in work. Let us take somebody who works 20 hours a week and leaves the domestic purposes benefit. They get the minimum family tax credit, which is $22,204 a year, and on top of that they get the in-work tax credit, which is $3,120 a year—all of which adds up to about $25,300 a year for 20 hours. The domestic purposes benefit for that person would be $15,000. That household will be considerably better off. This Government is also investing $130 million in support for those mothers, whether it is in retraining or in childcare facilities.

Metiria Turei: What kind of guarantee can the Prime Minister give to parents who are forced to abandon their children under the work-testing regime, in terms of efficient, quality childcare, given the Government’s $400 million cuts to early childhood education?

Rt Hon JOHN KEY: The member has made a number of mistakes in her question, so let me take this moment to correct her. For a start-off, when National became the Government at the end of 2008 expenditure on early childhood education in this country was approximately $800 million a year. This year it is $1.4 billion—that is a $600-million-a-year increase. I think it is also worth pointing out that a large proportion of New Zealand women with children do go to work, and they go to work and rely on the childcare facilities that are in place right across the country, and in fact I do not think it is right or fair to accuse those women of abandoning their children. What they are doing is trying to support their home.

Metiria Turei: Has the Prime Minister looked at the last Ministry of Social Development analysis of the last work-testing regime that showed that young children were put at risk of being abandoned, left alone at home, left alone with other children, or left in the hands of unsuitable carers, and what guarantee can he give that children will not be put in that situation under the current work-testing regime?

Rt Hon JOHN KEY: As I said earlier, the Government is investing an enormous amount of money in childcare facilities and supporting, amongst other things, 20 free hours’ care and a whole bunch of other systems that enable people to actually go to work. If the member is making the case that for this specific group, which is quite small in nature, that is abandonment, then the member is making the case that every New Zealand mother or father is abandoning their child when they go to childcare, and frankly, if that is the case, the member is speaking rubbish.

Jacinda Ardern: Does he plan to evaluate his Government’s Job Summit in light of the National Employment Indicator figures released today that show there are fewer jobs now than when the summit was held, and almost 40,000 fewer jobs since he took office?

Rt Hon JOHN KEY: I do not have those numbers to hand, but let me take the opportunity to update the member if she is concerned about whether there are jobs for people to go to. The ANZ jobs report for January showed there were jobs on offer in every region of this country. There were 30,000 jobs there. If you go and have a look at Work and Income, they receive 1,300 to 1,500 vacancies a week and on average they have 3,500 jobs on offer. Last year 80,000 people went off a benefit and into work. In the last 2 years under the household labour force survey—

Mr SPEAKER: Order!

Rt Hon Winston Peters: Where are—

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I am not aware that the Prime Minister said anything objectionable in his answer. He was answering a question very factually, which you have repeatedly required Ministers to do. He certainly was not—

Mr SPEAKER: Order! The honourable Leader of the House does not need to make that interjection. The Prime Minister, in opening his answers, did not actually have the information, the figures, the member was referring to in her question and went on to offer perfectly reasonable information that he did have, and that is why I allowed it to go on for some time, but there is a limit to how long an answer that is not directly answering the question should go on, and that is why I intervened.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I think the Prime Minister was being polite, because the member was misleading the House with that question.

Mr SPEAKER: Order! The honourable Leader of the House knows that he must not make that kind of allegation under a point of order. Members are honourable members and the figures can be disputed by the Minister answering, but no other member under a point of order can question the accuracy of what a member in this House says.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think we do need to go a bit further. The member did source her quote—

Mr SPEAKER: Order! No, we are not going to debate this matter by way of point of order. That is totally out of order. We have got into this trouble because it was a spurious point of order raised by the honourable Leader of the House, and we are not going to go any further down that path.

Rt Hon Winston Peters: Remembering his May 2010 statement—170,000 new jobs would be created by 2015; that is, 34,000 a year—where, then, are all these new jobs, when fewer than 14,000 were created in 2011, according to Statistics New Zealand, or was he talking about Australia?

Rt Hon JOHN KEY: If one looks at the household labour force survey alone, 62,000 new jobs were created over the last 2 years. As I said, there are 30,000 jobs currently, in the ANZ survey, on offer at the moment. If one looks at the number of people who went off benefits and into work last year, there were 80,000.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I specifically referred him to the latest figures from Statistics New Zealand of 13,945—that is dramatically less than 34,000 a year—and he is quoting from a whole lot of other pieces of paper, none of which are to do with Statistics New Zealand.

Rt Hon JOHN KEY: The household labour force survey is put together by Statistics New Zealand.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear the Rt Hon Winston Peters.

Rt Hon Winston Peters: Statistics New Zealand reported that 13,945—

Mr SPEAKER: Order! We are not going to debate this matter further by way of point of order. The member asked a question where he inserted what he alleged to be information from Statistics New Zealand. The Prime Minister answered the question, likewise using information from Statistics New Zealand, and that is the end of the matter. There is nothing further to pursue by way of points of order.

Rt Hon Winston Peters: I seek leave to table those papers.

Mr SPEAKER: No, we do not table stuff that is already available to members via Statistics New Zealand.

Metiria Turei: How does the Prime Minister reconcile the advice of his Chief Science Advisor, Sir Peter Gluckman, that early and intensive support for vulnerable children and their families is critical for their long-term success with his policy of coercion, forcing sole parents into low-paid, insecure work and, thereby, abandoning their children to the care of others?

Rt Hon JOHN KEY: Well, let us take the simple example I gave the member earlier—that is, somebody who goes into 20 hours’ work a week, or more. Because of the structure of Working for Families, that means that their income in that household is $25,000 a year minimum, and the person on the domestic purposes benefit would be getting $15,000. If you add to that the fact that the Government is providing enormous support around these families and individuals in terms of retraining and help, I personally think it is actually helping those families to give them the assistance, to give them the training, to give them the childcare facilities, and to actually make sure that they get an opportunity to fill their lives. And if anyone thinks that that is going to come through a lifetime on welfare, then they should go all the way back to the architect of the welfare system, Michael Joseph Savage, whose exact words were: “Welfare will never be an armchair ride to prosperity.”

Rt Hon Winston Peters: Could the Prime Minister tell the country which set of figures does he believe: the 13,945 new jobs created in 2011 according to Statistics New Zealand, or the household labour force survey that he said reported 63,000 new jobs being created in the last 2 years? Which of those two figures does he expect the country to believe?

Rt Hon JOHN KEY: Well, for a start, I said 62,000, and I am not questioning the member on the other; I am simply saying the household labour force survey quite clearly shows that 62,000 jobs were created in the last 2 years.

Metiria Turei: Can the Prime Minister assure this House that his work-testing regime of sole parents of very young babies—as young as 12 months—will not put a single child at risk of harm or abuse or neglect?

Rt Hon JOHN KEY: What I can say is, firstly, it is important to understand that anybody who is required under the new system to be available for work is literally that—needs to be available for work. If there is not a job, then there are no changes to their benefit entitlements. Secondly, no one can ever have 100 percent confidence in the system, because from Kaitāia to Bluff there are many, many, many households who rely on the quality of early childhood facilities, or caregivers, or others to support them. I think we all know that the system is not perfect, but there is no reason to believe it would be any different for those potentially up to 4,000 mothers from what it is for the hundreds of thousands of others across the country who rely on the system.

Metiria Turei: Will the Prime Minister commit to abandoning the work-testing regime if there is any evidence that shows that any child—even one child—is harmed as a result of the coercion of sole parents into work?

Rt Hon JOHN KEY: What I will give a commitment to is ensuring that, as far as the Government can, the policies and legislation that this Government is responsible for do the best to protect every New Zealand child. That is not something that should be applied to one group of New Zealand parents and not to others. That is my expectation, as Prime Minister, of every parent in this country. But for the member to argue that somehow the 4,800 mothers—largely teenage mothers—who last year had another baby on the domestic purposes benefit are somehow different as far as the expectations the Government would have for any other mother or father in the country is just plain wrong.

Metiria Turei: I seek leave to table two documents. The first is the Ministry of Social Development’s 2001 evaluation of the work-testing regime from the 1999 reform showing that children were put at risk.

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.

Metiria Turei: I raise a point of order, Mr Speaker. My apologies. I just want to get some clarification. I was going to seek leave to table a document from the Ministry of Social Development showing benefit numbers. Is that a publicly available document under the rules such that it would not be able to be tabled?

Mr SPEAKER: If it is from the Ministry of Social Development, if it is a document that is readily available, yes. We do not waste time in the House on that. But for the first document the member sought leave, leave has been granted.

Ministers—Confidence

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he have confidence in all his Ministers?

Rt Hon JOHN KEY (Prime Minister) : Yes.

David Shearer: Is he confident that Landcorp’s shareholding Ministers’ letter of expectation is being adhered to, when Landcorp helped facilitate the sale of New Zealand land to foreigners?

Rt Hon JOHN KEY: Yes.

David Shearer: Were he or his Ministers aware that Landcorp had entered into a management agreement with Shanghai Pengxin in September last year?

Rt Hon JOHN KEY: I was not, but the Minister may have been.

David Shearer: How can he have confidence in the Minister of Foreign Affairs, when he is unavailable for comment on the restructure of his ministry, unavailable for comment on the situation in Syria, and unavailable for comment on his stolen emails, which included comments about relations with China and the location of air force planes?

Rt Hon JOHN KEY: I am glad the member is not playing gotcha politics, as he has not got anyone yet. Here is Mr McCully’s statement on the restructure of the Ministry of Foreign Affairs and Trade. Here is Mr McCully’s statement on Syria. Quite frankly, the Minister comments where he believes it necessary.

David Shearer: Is the Prime Minister showing us these statements because he is unaware of where Mr McCully might be?

Rt Hon JOHN KEY: OK, you got me; I don’t know where he is most of the time, but that is just the way it goes. I do not have GPS on the bloke, I do not follow him around the world, and I do sign off on his overseas travel weeks before he goes. But he is Foreign Minister, and I do expect him to be overseas an awful lot.

David Shearer: Has he received—

Mr SPEAKER: Order! I apologise to the Leader of the Opposition. I must be able to hear the question; a little more reasonableness, please.

David Shearer: Has he received an assurance that there has been no security breach or revealing of items contrary to the national interest as a result of the hacking of Murray McCully’s emails; if so, does he expect Murray McCully to give that assurance to New Zealand?

Rt Hon JOHN KEY: What I have been advised is that the Minister’s personal account was used for that—for personal matters—and unclassified information was also sent to the account.

David Shearer: How can he have confidence in the Minister of Finance, when the Prime Minister has stated that one of the driving goals of his Government is to create an economy with more jobs and higher incomes, yet his finance Minister says “A government can’t have a lot of impact on the job market. It is what it is.”?

Rt Hon JOHN KEY: Well, I, I—[Interruption] I will paraphrase the Minister of Finance. Well, I was going to say that if the member wants to ask the Minister of Finance a specific question, he should do that. But what I can say, and what I assume the Minister of Finance was saying, is this: actually, what really makes the difference to an economy that has about 2.2 million or 2.3 million jobs in it is when you have the right policy settings that encourage people to invest and encourage people to take on work. Despite the worst global recession since the Great Depression, we have created 62,000 jobs in the last 2 years, we have a situation where the unemployment rate is falling, and we have a situation where we are one of the most highly rated countries in the world. Nothing I have seen from the Labour Party would do anything to support that position. If the member thinks I am wrong, he should go back and look at Labour’s 1970s style of industrial relations policy that it campaigned on in 2011, and let us see whether that is one of the things he decides to reverse when he eventually does give a state of the nation speech.

Mr SPEAKER: Both sides of the House are fairly noisy today.

Welfare Reforms—Recent Announcements

4. MIKE SABIN (National—Northland) to the Minister for Social Development: What changes has the Government recently announced for those on welfare?

Hon PAULA BENNETT (Minister for Social Development) : We have announced that we will fundamentally change the way welfare is delivered in New Zealand. We will work with youth and parents on welfare far better than we currently do. These changes do set clear obligations, but they also offer substantially more assistance.

Mike Sabin: Is the Government privatising welfare, and if so, why?

Hon PAULA BENNETT: I hear lots of reports that we are wanting to privatise welfare. Let me say that if you call contracting out to service providers—as we currently do, and will continue to do, to support those young people on welfare into education, budgeting their finances, and attending parenting classes—privatisation, then yes, I suppose we are. Every year Work and Income spends more than $280 million on contracting out services, predominantly to those community organisations—such as the Salvation Army, Presbyterian Support, local iwi, and our chambers of commerce—that are best placed to work with those who need these services.

Mike Sabin: How will the changes ensure young people complete education, budgeting, and, for teen parents, parenting courses?

Hon PAULA BENNETT: Overall the package will work with up to 14,000 teens; 3,000 of them are on a benefit. From July young people on a benefit will be able to earn incentives for making the right choices. This will include an extra $10 per week when they have shown 6 months’ continued commitment to education, training, or work-based learning; $10 for undertaking a budgeting programme; and, for parents, $10 per week for undertaking a parenting programme. I think that this will make a big difference to them, and that bit of money can make a difference, as well.

State-owned Assets, Sales—Government Business Case

5. Hon DAVID PARKER (Labour) to the Minister of Finance: Is it his normal practice to “guess” when determining the business case for selling billions of dollars’ worth of assets?

Hon BILL ENGLISH (Minister of Finance) : No. The business case for the mixed-ownership model is very clear. It frees up capital on the Government’s balance sheet to invest in priority assets without having to borrow an extra $5 billion to $7 billion on top of the already considerable Government borrowings. It gives New Zealanders the opportunity to invest in strong Kiwi companies rather than in finance companies and housing, and it is going to improve the performance of the companies, because they will be more transparent and accountable.

Hon David Parker: Is he aware that the forgone dividends and profits to the new shareholders are predicted to total $1.4 billion gross over the 4 years to 2016, and that even after deducting the interest savings, the Budget Policy Statement—his own document—shows the operating balance before gains and losses as $815 million worse because of the sales?

Hon BILL ENGLISH: As we pointed out when the Government released the Budget Policy Statement, there are a number of ways of measuring what the member is referring to. You can measure it as a change in the cash flows, in which case the Government is a bit ahead; a change in the accounting profit, in which case we would be a bit behind; or include the net proceeds of the sale, in which case we would be a bit ahead. The outcome of all that is that it is roughly fiscally neutral, but we avoid a further $5 billion to $7 billion of debt. That member will have to justify to New Zealanders why he wants to borrow that $7 billion of debt.

Hon David Parker: Does the Minister think the billion-dollar hole in his operating balance before gains and losses should have been included in his Government’s pre-election fiscal update, given that the sale proceeds were included, and if not, why not?

Hon BILL ENGLISH: Well, there is no billion-dollar hole, and in respect of the accounting for the decisions the Government is making, we have had to follow the requirements of the Public Finance Act. Those are administered by Treasury, and we have been quite transparent, including in the Budget Policy Statement, about the accounting impacts. One of the impacts that is clear is that if we can sell some of these shares to New Zealanders and pay them dividends, it means we avoid borrowing an extra $5 billion to $7 billion and paying interest to overseas lenders.

Hon David Parker: Did he have ministerial responsibility for the pre-election fiscal update, and if so, why did he allow it to include the proceeds of sale and interest savings from State-owned enterprise sales, but not include the reductions in revenue?

Hon BILL ENGLISH: That is not correct. What the pre-election fiscal update included was a decision by the Government at the time of a sufficient certainty that Treasury recorded it, and that was that we would have zero capital allowances. It could not record any effect of the mixed-ownership sales, because no decisions had been made. It simply had a promise from a political party. It was not until Cabinet had made decisions that it reached the threshold of certainty for being booked. The member might not like the Government following the rules, but that is what we did.

Hon David Parker: When will the Minister accept that including the proceeds of sale and interest savings in the pre-election fiscal update, but not the revenue forgone from the shares sold, was wrong?

Hon BILL ENGLISH: Well, what the member is saying is incorrect. The pre-election update included a decision that the Government would have zero capital allowances for the next 5 years, and that is what Treasury recorded. All I can say to the member is what I said before: we followed the rules. The Government did not get ahead of its undertaking to New Zealanders, which was that it would take no action on the sale of shares until or unless it had campaigned on the issue and been re-elected as a Government.

Health Targets—Progress

6. Dr JIAN YANG (National) to the Minister of Health: What improvements have there been in the National Health Targets?

Hon TONY RYALL (Minister of Health) : I am very pleased to advise the member that the latest national health targets show record achievements in all six areas. Of the 16,600 kids who turned 2 in the last quarter, 15,200—that is, a record 92 percent of them—were fully immunised, against the target of 95 percent. That is virtually no gap between Māori, Pacific, and Pākehā children. In fact, on Thursday I visited the Porirua Union and Community Health Service in Cannons Creek, and they told me that 94 percent of their 2-year-olds are now fully immunised in that community. It is clear that the district health boards are focusing even more strongly on patients, and they are benefiting from the Government’s $1.5 billion of extra funding over the past 3 years.

Dr Jian Yang: What improvement has there been to hospital services in the national health targets?

Hon TONY RYALL: Emergency departments recorded their best result ever: in the last quarter, 238,000 New Zealanders turned up at hospital emergency departments, and 92 percent of them were treated or transferred within the 6 hours, which is a very significant achievement. Every cancer patient ready for radiation treatment started within the world gold standard of 4 weeks. The district health boards are treating and caring for a record number of patients, and I think we would all like to thank them for the outstanding work of their management and clinical teams in meeting the health targets.

Welfare Reforms—Availability of Jobs

7. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by her statement “There are jobs”?

Hon PAULA BENNETT (Minister for Social Development) : Yes, and the authentication shows that the statement was from last year, 4 February 2011. This was when the unemployment rate was at 6.8 percent and benefit numbers were at 354,058 people. I am pleased to inform the member that since then, 78,810 working-age beneficiaries have cancelled their benefits specifically to go into work, and the unemployment rate is now at 6.3 percent.

Jacinda Ardern: Does she attribute the 96.5 percent increase in unemployment benefit figures since 2008 to the lack of jobs or a sudden, dramatic change in attitude to work?

Hon PAULA BENNETT: That member might have her head in the sand, but we actually went through the worst global recession that the world had seen in some time.

Mr SPEAKER: Order! The question was not exactly without some loading, and therefore some response from the Minister was not totally unexpected, but I think starting in the way that the Minister did was not that helpful. It would be better to get some answer out before making a political comment.

Hon PAULA BENNETT: Thank you, Mr Speaker. It just seems that the Opposition wants to ignore, actually, the implications of a worldwide recession, which has had an effect in New Zealand. What I will say is that over the last 12 months we have seen more people come off benefits. We see that unemployment levels are at a lower level than they were 12 months ago. Certainly, under that Government in the 2000s we saw the sickness benefit going up by 17,000 people, and the invalids benefit going up. You know, what we have done is have a better focus on what people can do instead of what they cannot, and that is making a difference.

Jacinda Ardern: Does she agree with the Ministry of Social Development’s briefing to the incoming Minister that the key driver in the increase in the number of people on the domestic purposes benefit from the low in 2008 was “New Zealand’s weak labour market”?

Hon PAULA BENNETT: I obviously believe that there is a combination of things that have an effect on the numbers that are on benefits. So for some it is because they simply cannot find a job and are looking, for others it is because the policy settings are wrong and we have not got them right, and for others I think it is because we are not giving them the right sort of support and training, and are not wrapping the right kind of support round them. So it is a combination of factors that leads to people being unemployed.

Jacinda Ardern: Does she, then, agree that the 96.5 percent increase in unemployment benefit numbers, and advice from the Ministry of Social Development on the domestic purposes benefit, show that the larger issue the Government is yet to address is the performance of the New Zealand economy?

Hon PAULA BENNETT: I think when we particularly look at teen parents—and I think it has been overlooked that the emphasis is going on them in these welfare reforms—we do also need to look at young women who are going on the benefit with very little support for them. So we are putting far more support around them, and I think that will make a difference to their getting into the workforce and actually having the training and the skills they need so that they can make a difference.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That was a question with a political edge, but it was quite specifically about labour market issues; it was nothing to do with teen parents, at all. [Interruption]

Mr SPEAKER: Order! The question asked whether the Minister agreed with a certain statement, and the answer indicated that she did not totally agree with it, at all, and she gave a dimension that she rather more agreed with. In asking whether Ministers agree with something, there is no specific answer to that kind of thing.

Question No. 3 to Minister

Hon TREVOR MALLARD (Labour—Hutt South) : I raise a point of order, Mr Speaker. I know there has been some concern, and suggestions about the need for a global positioning system, so I would like to report that Mr McCully has been found in the buildings.

Mr SPEAKER: Order! [Interruption] Order! I am on my feet. Fortunately, I am in a good mood today, because members should not raise points of order like that.

Electoral System—Review

8. ALFRED NGARO (National) to the Minister of Justice: What progress has been made on the MMP review triggered by the referendum at last year’s election?

Hon JUDITH COLLINS (Minister of Justice) : In the referendum last year the majority of voters elected to keep MMP, triggering a review. Recently, the Electoral Commission launched that review, which will consider a number of issues that affect how Parliament operates. These include the 5 percent party vote threshold, whether a list MP should be able to stand as a candidate in a by-election, and whether a candidate can stand both for an electorate seat and on the party list. I encourage all New Zealanders to take part in this review, which is an important function of our democratic system.

Alfred Ngaro: How can New Zealanders get involved in the MMP review?

Hon JUDITH COLLINS: There are a number of ways. The Electoral Commission will hold public meetings around the country in April and May for people to make submissions in person. Alternatively, New Zealanders can make either a full submission or a 5-minute submission online at www.mmpreview.org.nz. They can also send submissions via email or post. The Electoral Commission has also prepared a consultation paper, which can be downloaded from the MMP review website. This gives a full outline of the issues being considered. New Zealanders are already having their say, and submissions on the review are open until 31 May.

Budget 2011—Appropriation for District Health Boards

9. Hon MARYAN STREET (Labour) to the Minister of Health: How much funding for district health boards in the 2011-12 Budget was new money for additional services and cost of living adjustments, and how much was the result of reprioritisation of funding which had been maintained from previous budgets?

Hon TONY RYALL (Minister of Health) : As stated in the Budget released last May, $585 million was made available for new health initiatives, made up of $420 million in new money and around $165 million from savings. In the Budget released last year we also advised that district health boards received around $400 million of this amount, made up of $350 million of new money and an estimated $50 million from the Ministry of Health for population-based contracts. Despite these difficult economic times, the Government is determined to protect and grow the public health service.

Sue Moroney: What does he understand to be the reasons for the Waikato District Health Board having to find savings of $20 million in the forthcoming financial year and another $5 million in both of the next two financial years?

Hon TONY RYALL: All district health boards strive to live within their budgets, and looking for efficiencies really is business as usual. They are often moving their money around to improve services. That funding has been increasing year in, year out. In the last 3 years the Waikato District Health Board had funding of $129 million extra.

Sue Moroney: Did he provide Waikato District Health Board with funding to cover its $3.2 million KiwiSaver obligation, which was previously funded centrally by the Crown, and if not, what does he expect the district health board to shed in order to find that money?

Hon TONY RYALL: I think the district health board will be expected to meet that obligation in the next financial year. That budget will be announced at an appropriate time. But I have to tell you the Waikato District Health Board has a budget in excess of $1 billion, and I am sure that with prudent management of its finances it will be able to meet those challenges.

Sue Moroney: I wish to table two documents. The first is a memorandum to the Waikato District Health Board, dated 22 February 2012.

Mr SPEAKER: From whom?

Sue Moroney: It is the chief executive’s report. It indicates that savings of about $25 million are required in 2012-13, and a further $5 million in each of the two out-years.

  • 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.

Sue Moroney: The second document, then, is a memorandum from Craig Climo to all staff of the Waikato District Health Board, in which he states that if the savings cannot be found elsewhere, they would have to come from reducing staff numbers.

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.

Hon Maryan Street: Why is the Hawke’s Bay District Health Board having to look at cutting up to 35 jobs, some of which are likely to be in front-line services?

Hon TONY RYALL: The Hawke’s Bay District Health Board, in the last 3 years, has received an additional $45 million from the Government. It is expecting to remain in surplus, but, as the chief executive said, it is looking at ways that it can make savings so it can balance its budget and meet important projects in its area, such as a new health centre in Wairoa, a new renal and endoscopy suite, an improved rheumatology service, a new lecture theatre, and a number of other projects. So it is all about providing better services for the people of Hawke’s Bay within an increasing budget.

Hon Maryan Street: Can he explain why Auckland District Health Board is reported to be attempting to save $60 million in its budget, and does he think a possible cut of that magnitude might affect front-line services?

Hon TONY RYALL: Auckland District Health Board’s budget over the last 3 years has increased by $125 million. It will be getting additional money in this year’s Budget. I think in response to that question I had best quote the chairman, Dr Lester Levy, who, in respect of the media reports of those savings, said “These service cuts are categorically not on the agenda.”

Hon Maryan Street: Can the Minister confirm his media release of last Budget day, when he indicated that there was $420 million worth of new spending for district health boards, when his own ministry had advised him that $576 million was required simply to keep up with cost growth, leaving a shortfall in funding to the district health boards of $156 million, and that any additional services this year will have to be funded from the cutting of existing services?

Hon TONY RYALL: That is absolutely consistent with the very first answer that I gave. We have got $420 million of new money; the additional $165 million came from reprioritisation. That adds up to $585 million, which is more than the $576 million that the member just quoted.

Treaty of Waitangi Settlements—Progress

10. KATRINA SHANKS (National) to the Minister for Treaty of Waitangi Negotiations: What progress has recently been made towards the completion of historical Treaty of Waitangi settlements?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) : Very good progress. In fact, the Human Rights Commission recently reviewed the last 5 years of Treaty settlements, and noted that the pace had increased dramatically, from 10 milestones achieved in 2007 to 60 in 2011. In January the Crown signed its first deed of settlement with far north iwi in the Te Hiku Forum with Te Aupōuri. This represents a very important step toward resolving that region’s complex and longstanding grievances. It demonstrates this Government’s commitment to achieving historical claims in a just, a timely, and a final manner, for the benefit of iwi and the country as a whole.

Katrina Shanks: How has this progress been assisted by recent changes to the Standing Orders?

Hon CHRISTOPHER FINLAYSON: Under the new Standing Orders, the Business Committee extended sitting hours on Thursday, 16 February, without the House going into urgency, in order to progress eight bills, including six Treaty bills, and a number of very important bills received their second readings. I think it is a great credit to this House and its members that they have agreed on innovative approaches to address the issue of delay in legislating these settlements, and I want to record my gratitude, and that of the iwi concerned, for this approach.

Medical Equipment, Subsidised—Glucose Testing

11. BARBARA STEWART (NZ First) to the Minister of Health: Does he agree with the proposal by Pharmac to limit diabetic New Zealanders’ access to subsidised glucose-testing equipment?

Hon TONY RYALL (Minister of Health) : As the member knows, Pharmac makes independent decisions. However, I understand that, look, any potential change can be unsettling for people. I am advised that Pharmac is currently consulting on having a sole supplier of blood glucose meters and test strips, and that more people with diabetes will have fully funded access under its proposal. The Pharmac board will make a decision in late March or April, after considering all the advice and submissions. Pharmac estimates that moving to a sole supplier, as well as providing fully funded access to increased numbers of people, will save approximately $10 million a year, which will go towards funding better access to new and existing medicines for patients.

Barbara Stewart: Why should New Zealand’s 200,000 diabetics be forced to use the CareSens glucose monitor, when the only possible benefit will be greatly negated by the cost of implementation?

Hon TONY RYALL: As I said earlier, Pharmac is currently consulting on a proposal, and it takes into account all those matters. If the proposal is agreed by Pharmac, there will be comprehensive education and training for clinicians, pharmacists, and patients. That will certainly be a big feature of any proposed transition. However, the board has yet to make a decision on that.

Barbara Stewart: Is the Minister not concerned about comments from the Diabetes New Zealand President, Chris Baty, that “no-one uses these meters” since they have been available in New Zealand since at least 2009?

Hon TONY RYALL: As I said to the member, it is always unsettling whenever there are these sorts of changes. But what we do know is that there is an opportunity for Diabetes New Zealand to make submissions and comments about the process, as there is for clinical diabetologists to have their input. The Pharmac board will make a decision, and it is my understanding that if it proceeds with that proposal, there will be full training and education support for those who use these meters and strips.

Welfare Reforms—Study Support

12. JAN LOGIE (Green) to the Minister for Social Development: Does she agree with the statement in her Cabinet paper that “Evidence shows that support for beneficiaries to undertake study, such as the Training Incentive Allowance, can be effective in increasing the time participants spend off benefits.”?

Hon PAULA BENNETT (Minister for Social Development) : At times, yes. I have always been, and will continue to be, a staunch advocate that for some people, study can change their lives. The argument is how much should people invest in their own study, and how much should the Government subsidise that study.

Jan Logie: Does she believe that the Government should provide extra support for beneficiaries for whom tertiary study at level 4 or above is the best way to reduce their long-term cost to the Government?

Hon PAULA BENNETT: We currently do, through subsidies for extra childcare for them. With the extra support they get they can also access an additional interest-free student loan, which other students actually cannot get, so they do get that sort of assistance. But, as previously said in this House, we are actually putting in investment through the training incentive allowance for the more than 50 percent of those on the domestic purposes benefit who have absolutely no qualifications and cannot even get a foot on the first rung of that ladder.

Jacinda Ardern: Why is a sole parent with exactly the same set of circumstances eligible for more assistance if they train to become a hairdresser than if they train to be a nurse, as set out by her training incentive allowance policy?

Hon PAULA BENNETT: As I said, the assistance they can get is based on the level, so for level 4 and above they do not get the training incentive allowance, but for level 3 and under they can. So there are different ones. I am not sure exactly what qualifications fit in with them, but that is the way that the system is set up.

Jacinda Ardern: I raise a point of order, Mr Speaker. My question was quite specific. It did not ask what the policy was; it asked for the rationale behind the policy—why is there the difference that the Minister just outlined.

Mr SPEAKER: Order! I thought I heard the Minister answer that. She said some courses are above level 3, and some are level 3 and below, and that is why there is the difference. That may not be the explanation that the member wanted, but it is certainly an explanation of the difference.

Jan Logie: Then why does her Cabinet paper say: “I believe that we need to provide some extra support for the small group of beneficiaries that may be identified by the investment approach as those for whom higher-level tertiary study at level 4 or above is the best way to reduce their long-term liability.”?

Hon PAULA BENNETT: It is true that the investment approach is going to fundamentally change the whole way that we offer support through the benefits system. I am not going to pre-empt the Work and Income board, which is yet to be appointed, or its investment approach—where it will decide it needs to put the most investment. But as the paper quite rightly says, it could be that it looks at level 4 and above and decides to do things differently. It will look at level 3 and below and try to do that differently, I am sure, as well. So, without pre-empting it, it could decide that there could be extra assistance needed for level 4 and above.

Jan Logie: To clarify, is the Minister saying she has not ruled out implementing the Green Party’s policy to reinstate the training incentive allowance for study at level 4 and higher?

Hon PAULA BENNETT: What I was saying was that the system is going to look fundamentally different as we move forward. I am not sure that everyone kind of grasps the difference that the investment approach is going to make—

Dr Rajen Prasad: Oh, we’re so dumb, aren’t we?

Hon PAULA BENNETT: —well, it is incredibly complex—and it could actually look at that. Who knows, it may actually be in line with the Green Party’s policy.

Jacinda Ardern: Why is a sole parent with exactly the same set of circumstances eligible for more assistance if they train to become a hairdresser at level 3 than if they train to be a nurse at level 5, as set out in her current policy?

Hon PAULA BENNETT: You will find that that training for a hairdresser is actually the pre-training that they do, up to level 3. They do not actually leave once they have done those few weeks of study, or those 6 months of study, and become a hairdresser; they then go into apprenticeships, and have a long time in work-based learning. They do not actually walk out with the qualification, ready to be a full-time hairdresser.

Address in Reply

  • Debate resumed from 16 February.

Hon PAULA BENNETT (Minister for Social Development) : I support the motion put forward by the Prime Minister and I reject, of course, the amendment from David Shearer. This amendment, of course, was from the party that thought that throwing money at beneficiaries would win it the latest election. Labour members thought that more money was the answer, and they are now having to look at themselves and travel up and down this country to find out what an absolutely poor idea it was. But they underestimated beneficiaries, and those beneficiaries did not vote for Labour, because they could see the nonsense in the proposal that had been put through.

Labour members accuse me of beneficiary bashing on a regular basis, and I would say to them quite simply that I think that to belittle people and believe that all they are worth is a lifetime of welfare with no support or opportunities is in itself the true definition of beneficiary bashing. Keeping people down and believing that they should be on intergenerational welfare—like we currently see—without the policies and the actual attention that need to be put in place to make a fundamental difference to their lives, I think, is negligent at its best. That is where it is.

Sue Moroney: Nobody has said that or believes it, so that’s just ridiculous.

Hon PAULA BENNETT: Well, it is. We hear the yells from the other side. I understand that they do not particularly like me, but let us be honest: they do not particularly like any woman who gets ahead and who actually stands up for herself and makes a difference. Those members will give you lip service that they do, but actually once those women start getting ahead and getting up there, it turns personal, it turns nasty, and it is about how they can knock them down as quickly as possible.

This side of the House is going to build them up. We will fundamentally believe in people’s ability to have a lifetime and be worth more than what they get on welfare and what they get on benefit. We will make the hard decisions to actually help them and help them move ahead. We will believe that they are worth something. That means putting policies in place that are quite clear about expectations and obligations, while also wrapping the right support round them.

We hear a lot about youth. We hear a lot of lip service about what could be and should be done and that they are disengaged and are lost. Well, here you have the most substantial policy in that area that this country has seen for the longest time: taking 14,000 young people and actually getting service providers that are in the communities and that know them, making sure we give them the information that they need so that they can work with these young people in their totality. We are making sure that we actually change the law so that schools report in real time where that young person is, how they have been lost, what their track record is, and what their family history is.

Mix that with what the Ministry of Social Development already knows—and we know a lot; the reality is, as much as we do not like to admit it, that we know a lot—about whether they have been in Housing New Zealand Corporationhouses and whether or not there has been intergenerational welfare dependency, and you will have a much clearer picture of who is at high risk of that train wreck of going straight on to a benefit at 18. If you go on to a benefit at 18, your likelihood of still being there in 10 years is higher than for any other group in this country.

Once we know more about them, what do we do with them? That is the key question. We give them more support. We wrap that service provider in the community round them. We do not give them just the access to the training—which, without being rude, is actually the easy part—we wrap round them that support that gets them there every day. We look at drug and alcohol issues. We look at family history. We help with the housing needs. We look at their budgeting. Yes, we then reward them. I looked at the difference it could make for young people to have the budgeting skills to go forward in life, and to actually be in education and training. How do you sort of create those good choices? Most times you look at it, you are punitive. What do we sanction? What do we take away? We have actually turned that round for the first time in years and asked how we can reward and where the incentives are. An extra $10 a week for each of those makes a huge difference.

At the moment we have girls as young as 16 turning up at Work and Income, going on a benefit, and getting literally $500 or $600 a week. Do you know what we do with them?

Chris Auchinvole: What do we do?

Hon PAULA BENNETT: Absolutely nothing—absolutely nothing. It should be a disgrace to us that we turn them round, put that level of money in their pockets, and do not then give them the support that they so desperately need and deserve.

Hon Trevor Mallard: Who cut the TIA? A guilty woman.

Hon PAULA BENNETT: These girls are not even in school. You may not recognise them, Trevor Mallard, but they have not even completed school. They are most likely to have more children while they are on benefit.

Hon Trevor Mallard: Guilty woman. Ripped off Housing New Zealand, took the benefit, cut it for everyone else—that’s Bennett.

Hon PAULA BENNETT: Do the hard stuff, Trevor Mallard. Stand up for these beneficiaries, who actually deserve a life of opportunity in this country. Stand up and make a difference, instead of adding to sickness beneficiaries, adding to those on the invalids benefit, and turning a blind eye to the hard decisions that need to be made in this country to move us ahead and see opportunity in front of those people for real. Instead, just give your little yells out! Make it personal—make it personal! That is just not the way that will make a difference to these people who need us the most.

We currently have 16-year-olds who are on benefit and getting absolutely no support. They have not been supported by family and they are most certainly not being supported by Government, and that is going to change. We are going to wrap the right kind of support round them and see them have opportunities and have a future that is equal to anybody in this House. They deserve nothing less—nothing less—from us. So they will see a service provider that takes them and works out their budget with them, works with them over time, and recognises that their own education is so important.

Do you know what the actual difference is when you look at the future attainment of a child? Well, you might like to learn this. Actually, do you know what the real key indicators are of how well a child will do in the future? It is how well the mother is doing. So if you base it on her educational achievement, her work experience, and the age at which she has that baby and future babies, then you are fundamentally making a difference to those children. You know, I had Dame Lesley Max say to me that if you are serious about working with vulnerable children, look at the pipeline of the production of vulnerable children. That is a bit controversial. That is not always comfortable for people to go into. But I personally desperately worry about those young women who are having multiple children while on benefit. I do not for one moment underestimate how hard it is to live on the benefit. It is jolly hard, and at times it can feel pretty much impossible. To continue to have children—to continue to see that in an intergenerational and systemic way is simply not something that we will sit back and say is OK in New Zealand. We will stand up. Where is the evidence that a working parent is doing bad by their young children, which is what we constantly hear from the Opposition? Actually we see literally thousands of women and men with young children in this country who go to work and have a better life for themselves and those children.

We need to make some differences. We need to look differently at how we do it. What we have also announced in this first tranche is bringing in widows and women alone. I have been looking at that for the last 3 years, because if you are modernising a system—if you are a modernising a whole system—you do that. In 1911 the widows benefit was introduced, and for all the right reasons—for all the right reasons. I really acknowledge its introduction. I acknowledge the actual introduction in the 1930s of the welfare system. I certainly look at the 1960s and recognise the Act, as it was then. But we are in 2012. The system simply needs to be modernised for a modern New Zealand. We have technology; we have social norms that are no longer the same as those of times that are well gone. We need to look quite seriously at what it looks like now, and what it will look like into the future.

So yes, we can do better for women who are on welfare long term. We can support them better; we can put more money in. We hear the bleats from the other side, but I will tell you that a minimum of $130 million a year will be spent on these changes—$130 million. This is not about cost cutting. This is not about short cuts. This is actually putting the support and the services up front, when they are needed most, and making the hard decisions. I am proud to be a Minister in this John Key - led Government and I believe that the motion that he has put forward, the difference we will make, and the announcements that we have made this week in welfare will fundamentally change people’s lives for the better.

DARIEN FENTON (Labour) : After that lecture from the Minister for Social Development I rise to give my strong support to the amendment in the name of David Shearer, and I say I really resent being lectured to by that Minister. It is that Minister who had all the benefits and support when she found herself in trouble, and now she stands in this House and tells everybody what they should be doing, when she pulled up the ladder after her.

This Government campaigned on building a brighter future. We were promised a bright future in 2008, but we are still waiting, and the question on everyone’s lips now is whether we will ever get there—whether we will ever get there. I have to say that the people of New Zealand are extremely generous. During the election campaign they took into account the terrible couple of years that we have had, the awful tragedies the country has suffered in Christchurch, and the tragedy at Pike River mine. They have given the Government another chance, but the Government seems intent on squandering the goodwill of New Zealanders and testing people to their limits, particularly when it comes to asset sales.

The bottom line is that New Zealanders do not want their assets sold, but the Government is not listening. Its whole economic programme for the next 3 years is based on flogging off assets. The reality is that the Government has no other plan, so it is stuck with it, and that is why the Government is not listening. The world has changed, but National’s answers have not. What we are seeing now is a Government that has circled the wagons and is into managing economic decline. How sad is that? It has given up. It is into dumbing down the expectations of Kiwis and blaming those who are hardest hit.

Kiwis are voting with their feet, and who can blame them? Over 113,000 Kiwis have left for Australia since John Key promised us all that our kids would be kept at home. In fact, last year was the highest ever recorded net migration of people to Australia: 36,900 people. Under this Government’s watch, unemployment has increased by 50 percent, leaving 157,000 New Zealanders out of work. The redundancies, the closures, and the lay-offs just keep coming. John Key promised to close the wage gap with Australia. The fact is that since he came to office the gap has massively increased, and nothing is happening on that front. The Department of Labour told us in the financial review the other day that it has done no work on that for the last 2 years. It has given up on it. I have to say that the paltry increase to the minimum wage announced a couple of weeks ago was a wasted opportunity. In real terms, that increase of 50c an hour, taking the minimum wage to $13.50, makes someone on the minimum wage just 20c an hour better off since National’s first minimum wage raise in April 2009.

On Thursday morning this week 1,500 caregivers who work for Oceania Group aged-care facilities across New Zealand—1,500 caregivers who look after our older relatives, the people we love and care for and whom we want to be cared for—will reluctantly take strike action. These are the caregivers, as I said, who do a wonderful job looking after our much-loved older family members, yet some are paid just 11c above the minimum wage. This says an awful lot about how this Government, and how we as a country, value older people, and a lot about the Government’s attitude to those who are most vulnerable.

The Government missed an opportunity with the minimum wage increase to address soaring income inequality and assist stretched families who are struggling to make ends meet. It could have increased the minimum wage—it should have increased the minimum wage—to $15 an hour. At a time when poverty and its impact on families and children in New Zealand is a major concern and we have the Government crying crocodile tears about it, it could have taken that step, and that would have been a significant step in addressing income inequality.

Family incomes under this Government have dropped 4.7 percent in real terms since 2009, with inflation outstripping income growth. Families now have to spend 7.4 percent more on rent alone compared with last year. Fifty-three percent of New Zealand families now say they are barely able or are unable to meet their basic needs as housing costs continue to rise and pay packets shrink. John Key’s 2010 tax cuts increased the difference in take-home pay between someone on $30,000 a year and someone on $150,000 a year by $135 a week, and that had an even worse effect when you take into account the GST increase. Chief executive officers in New Zealand in the top 48 listed companies and State-owned enterprises received an average pay increase of $202,000 in 2010 on an average income of $1.6 million a year. Something is deeply wrong in New Zealand, but we are seeing nothing from John Key’s National Government to address this huge problem—this growing problem—of poverty and inequality.

John Key has admitted he could not live on the minimum wage, but he expects others to. Of course, the Government will expect our young people—our 16 and 17-year-olds, and some 18 and 19-year-olds—to live on a lower minimum wage because it intends to drop it to 80 percent of the minimum wage. It calls it a starting-out wage. It will be $10.80 an hour. How can anyone live on that?

An immediate increase in the statutory minimum wage to $15 an hour would have been a first step in overcoming the rampant inequality of poverty that we are seeing. It is not a problem with beneficiary families; it is a problem with working families. Go to any Salvation Army and it will tell you that they are the people coming through the door. They cannot earn enough to feed their families. That is where the problem is. We have a vicious circle of low wages, and we have a circle of low productivity. The Government likes to talk about increasing productivity, but it is going to have to do an awful lot more if it is serious about that and if it is serious about what it says is its commitment to better jobs and higher wages.

I had to laugh at the Prime Minister’s cheeky answer this afternoon, when he started talking about Labour’s policy for 1970s industrial relations. Can I say that what we are seeing is the worst of industrial relations at the moment. We are seeing 1990s industrial relations—

Chris Hipkins: 1920s industrial relations.

DARIEN FENTON: —1920s; that is right—with 750 meatworkers about to be locked out, absolutely brutally. It is brutal. They work in small towns. They work in small towns like Moerewa and Wairoa, and those communities absolutely rely on those meatworks to help the community feed its families. What they are seeing is a belief in this Government that somehow you can impose greater productivity from the top down. Let me tell you, you cannot just tell people they have to be more productive. What the Government is doing will deliver more of the same results: wages lagging, productivity falling behind, and people continuing to leave for better opportunities overseas.

As I have said, I think the National Government has given up. It brags about our low wages. It continues its search for more flexibility in the workplace, as outlined by the Prime Minister in his speech, despite it undermining job security, decent work, and decent wages. We have yet to see any sustainable improvement in our productivity levels, and the relative decline in living standards—particularly compared with Australia—has become a brutal reality for many Kiwis who work hard but just cannot get ahead. There is nothing on offer from the Government in this space, and there is even less for those hard-working people who are self-employed or contracted, who have to fill out the GST on the table at night. There is nothing for them. They are among some of the lowest paid, but this Government is ignoring them, as well. So no wonder the grass seems greener on the other side.

Hon TONY RYALL (Minister of Health) : I would like to support the motion in respect of this debate and to strongly associate myself with the excellent, I thought, speech from the Minister for Social Development, the Hon Paula Bennett, this afternoon. It is clear from her own personal experience and her own determination that she is decided of the view that so much more could be done for those who are on welfare to assist them to a life of independence.

I thought the Prime Minister also touched on very important and pertinent facts this afternoon in question time when he talked about the creation of 62,000 new jobs and unemployment falling, which are very significant facts, especially in a time of remarkable international uncertainty. That international uncertainty really comes from what has been described as the cancer of debt and deficit in so many parts of the world. As the Minister of Finance said, you need only turn on the television every night to see the impact of that cancer of debt and deficit on communities all around the world. We are seeing problems in Greece, where there is rioting in the streets, services being cut back, and taxes having to be paid for the first time in generations, it would seem—real pressure in Greece. In Portugal, for example, there are huge financial pressures on the economy there as a result of the global financial crisis. The Government in Portugal is being forced to partially privatise a significant public asset at the behest of the European banks and the IMF. It is having to sell significant stakes in public assets because of dictate from outside interests.

If you look at Ireland, for example, you see it is now having to partially sell significant amounts of public assets over there—electricity companies, dams, shares in Aer Lingus, forestry assets—in order to get its debt under control. But unlike New Zealand, it has no choice about this; it is being required to do that by the IMF and the European banks. And this story is being repeated in countries like Spain, Italy, and France, where the former Minister of Education says tens of thousands of teachers in France are being made redundant because of the tough economic times.

Then you go across the Channel to Britain, where Britain’s debt in the last 5 or 6 years has grown from 30 percent of GDP, which is the peak of where we want to get to in New Zealand, to over 70 percent of GDP. It now has itself in the position where the Chancellor of the Exchequer, Osborne, says Britain cannot borrow any more money. It cannot get it. This is what happens: debt is 70 percent of GDP, it cannot borrow any money any more, and 700,000 public servants are expected to lose their jobs in the next year or so. This is what happens when debt gets out of control. Countries lose determination. They lose self-determination. New Zealand does not want to be in the position of countries like Portugal, Greece, and Ireland, where they are required to make decisions because of foreign lenders demanding them.

New Zealand needs to remain independent and we must keep our debt under control, and that is what this Government campaigned on in the last election. We have a plan to keep our debt under control and retain our own self-determination as a country—our own sovereignty separated from the demands of those who are our foreign lenders. That is why the Government has a plan in the mixed-ownership model, which will invite New Zealanders to be at the front of the queue to participate in ownership of up to 49 percent of those companies, with a 10 percent cap on any one shareholder. And that is part of our plan: to use those proceeds to help control our debt, and use that money as part of a Future Investment Fund to support the needed infrastructure in schools and hospitals that this country may have in the next 4 to 5 years. It is about controlling the debt, because if you do not control your debt, you lose your right to decide what your country does into the future. And that is no false claim. Just look at what is happening throughout Europe—it is all about the debt.

But even in these most difficult economic times, this Government, led by John Key, remains determined to protect and grow the New Zealand public health service. We have put significant amounts of money in: $1.5 billion of extra money over the last 3 years has gone into the health budget. It sees 800 new doctors, both junior and senior, working in our hospitals, and over 2,000 more nurses on the payroll working in our public hospitals today than there were 3 years ago. And, together with strong leadership from district health boards, we are achieving in the New Zealand public health service very considerable, positive results. They were published in your local newspaper today, Mr Deputy Speaker, as we reported to New Zealanders on what the district health boards had done in the six national health targets.

We are seeing more New Zealanders than ever getting elective surgery. Elective surgery is vital because it allows people to ease the pain and the suffering that they have been under, and to get back to work or to look after their families better than they were. We are not having a situation like under the previous Government, where the funding doubled and no more people got surgery. Under this Government we are delivering more and more and more operations for New Zealanders year after year after year, and improved productivity in our hospitals, much of it being led by nurses in the way that they manage the wards, etc. So there is more elective surgery.

In our hospitals’ emergency departments there is the best performance we have ever had: 92 percent of all patients who turned up were either treated, discharged, or admitted to a ward within 6 hours. That is very important. In Western Australia last month the first analysis of an Australasian emergency department target was published. Western Australia has a target of treating about 85 percent of patients within 4 hours—ours is 90 percent within 6 hours—and what its research has shown is that the introduction of an emergency department target in Western Australia, which has required the whole of the health service to change the way it works in order to improve the flow of patients, has saved, potentially, 250 lives. That is what its emergency department target did. It has created a whole of health system change, it means that people get dealt with sooner, and it says—it is not the Government in Western Australia that says it; it is independent, academic analysis—up to 250 lives have been saved. That is a quality performance unmatched by any other Government in this country. We are getting 92 percent of our patients through emergency departments into the wards, into their radiology tests, and into their specialist appointments faster than ever before.

Thirdly, I come to cancer treatment. No New Zealander had to wait more than 4 weeks to begin their radiation treatment when they were ready. No New Zealander has had to be sent to Australia since the end of 2008. That is a really significant achievement for New Zealand. And in the middle of this year we are going to add another pledge to cancer patients: no one needing chemotherapy should have to wait more than 4 weeks to get their treatment.

But we are also making huge progress in preventative health measures and dealing with infectious diseases. Is it not just ironic cant from the party opposite to complain about infectious diseases in New Zealand when it left 30 percent of 2-year-olds unimmunised when it was last in Government? Thirty percent of 2-year-olds were not immunised. That is what it left. The number of Māori kids who at 2 years old were immunised under that crowd was about 53 percent. [Interruption] I think they did care, I just do not think they did anything about it. But under this Government we have focused on that: we now have 92 percent of New Zealand 2-year-olds fully immunised. That is protection against infectious diseases, and for a party that spent 9 years talking about closing the gaps and did not do anything, I say that we have closed the gaps. There is no gap between Māori, Pacific, and Pākehā on 2-year-old immunisation in this country.

On rheumatic fever, that crowd put out a strategy in 2001 that said they would halve rheumatic fever by 2005. Well, you know what? They put out the strategy and did nothing—they did nothing. Our rheumatic fever rates are now at Third World level. It took this Government, in coalition with the Māori Party, to invest significant amounts of money in dealing with rheumatic fever, and I reckon in 3 years’ time, when we are on the campaign trail, we will have a record in dealing with rheumatic fever that will be one of the greatest points of pride that this Government will have in the run-up to the next election, because we will deal with it. They had a strategy in 2001 and did nothing. They have got 63 health strategies and still could not achieve what we have done in 3 years.

We have also dealt with smoking. If we can get fewer people smoking in their homes with their kids, that will deal with respiratory disease. That party had a strategy in 2001 to deal with respiratory disease: it put the price of smokes up once, and never did it again. We have put the price of smokes up three times in a row, and academics say it is the single most—

Mr DEPUTY SPEAKER: I am not sure the member heard the bell—it is a bit ill—but his time has expired.

Hon TONY RYALL: And so has it expired for many smokers with the work that we are doing.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : I just have to start where Tony Ryall left off. It is a bit rich hearing the National Party talking about tobacco-control initiatives when every step of the way, when Labour was in Government, National voted against every single measure that Labour introduced to curb tobacco smoking in New Zealand. Whether it was the Smoke-free Environments Act, whether it was the excise tax, or whatever Labour put up, National voted against it every single time. I can say I am pleased they have finally—finally—put their guns down. They have decided that the fight is not worth fighting, and they are going to get on the winning team; they are going to join the team that is fighting the harm caused by tobacco. They are a bit late to the game, but we welcome them. But I have to say it is a bit rich hearing Tony Ryall talking about tobacco control and the initiatives the Government has introduced when he said himself that there was no evidence to support getting rid of tobacco displays. It was only thanks to the work of Tariana Turia and a number of people from the Opposition that finally got the Government to see sense on that one. But let us hope that that consensus will continue into the future.

It is a pleasure to speak in the Address in Reply debate. Sometimes, I have to say—and I have listened to quite a few of the contributions from members in this debate—you would forget that this was the Address in Reply debate. This is the debate—this is how it works—when the Government is supposed to get up and talk about their plan. The Government members, the National Party members, are supposed to get up and say what an excellent Speech from the Throne it was, and how that plan is going to take New Zealand forward. Then, of course, we in the Opposition, especially us Labour members, we will support the amendment put forward by our leader, David Shearer, to add the words: “and the National-led Government will sell New Zealand’s assets against the will of the public; the Government has no ideas to create jobs or a clean or innovative New Zealand; that the Government is widening the gap between the very rich and the rest and therefore this House has no confidence in the National-led government.”

That is the way it is supposed to work. But the vast majority of National MPs have talked about anything, anything else except for the Speech from the Throne, and anything else except for whatever plan it is that the Government has to get this economy moving again and to get New Zealanders back to work. They would talk about the Labour Party, they would talk about what the Labour Party did when we were last in Government, and they would talk about our new leader, David Shearer. He is a top bloke, and I am pleased to hear people talking about him, but I really think the National Party members ought to be focused on supporting their leader and their plan. But they want to avoid it at all costs, because we all know that there is no plan. There was no plan for the last 3 years, and there is no plan for the next 3 years from this Government. The National MPs have avoided talking about what they are going to do, like the plague.

Sometimes a few members manage to offer a few platitudes about what it is the Government wants to do; they want to make New Zealand a better place to work and to raise our children; they want to get debt under control; and they want to build a brighter future—that old chestnut. That has been their campaign slogan for the last two elections: “Build a brighter future”. But it is always in the future; it is always some time further down the track. It is never now. The future will never get here under this Government, because they have no plan. They want to create more jobs, they want to back business, they want people to be successful, and they want New Zealanders to be entrepreneurial and innovative. They want to remove roadblocks and obstacles and encourage and develop all the opportunities New Zealand has to offer—don’t we all. But my question to the Government is: how? Where is the plan? How are you going to do that? It is wonderful to have all these platitudes; not a single member of this House would disagree with any of those statements from those National Party members, but what the Government does not have is a plan. That is what New Zealand needs to see—a real plan.

The nearest thing I have seen to a plan—the actual action that they want to undertake—is to sell it all; sell off all our assets, sell them off to foreign owners. Oh, yes, New Zealanders might be at the front of the queue, but we know what is going to happen to those shares, they are going to end up in foreign hands—we lose control. All that stuff about how we were going to keep 51 percent, but, do not worry, that will still mean that New Zealanders will still be in control, that the Government will still be in control, well, that has turned out to be untrue as well.

They reckon they have got a mandate. They reckon New Zealanders voted to sell off our assets. Well, here is the truth. There are 121 MPs in Parliament this term. Sixty of those MPs represent parties that went out and said “Yes, we want to sell those assets off.” But 60, the same number of MPs in this Parliament, went out and said “We don’t want to sell off those assets.” And then there is the one. Then there is that one guy, Peter Dunne—the one who goes whichever way the wind is blowing. Whoever wants to give him a ministerial portfolio, those are the people he will vote with. It is only because Peter Dunne cannot make up his mind and is prepared to sell his vote to the highest bidder that New Zealand and this Government will be selling off assets this term. The people did not vote for asset sales, they will not stand for asset sales, and I think the Government is going to see itself in a lot of trouble as this year rolls on and people realise that those asset sales are upon us and they start to revolt against what this Government is doing.

As I said, I listened to a lot of National Party members. I listened particularly to Jonathan Coleman, the Minister of Defence, because I wanted to hear what his plan is. I wanted to hear what his plan is to cut the $400 million that has to be cut from the annual budget of the defence forces by 2015, just so that they can stand still. The Government has said: “No new money for the defence forces. You have to find that money from within the defence forces’ budgets, and that means $400 million worth of cuts.” I wanted to know how that was going to happen. I wanted to know whether he thought that cutting the military bands was the answer. It is going to save less than $1 million—$1 million down, $399 million to go. Where is the rest of the plan, Minister Coleman? That is what I want to know. What about cutting down the territorials? Will that get us there?

There are a few things that the Government has decided it is going to do. The Defence Force and the defence ministry have been working their backsides off to try to find those cuts, and do you know what they have found so far? They have found $97.5 million worth of savings, and good on them. They have worked hard to meet the Minister’s expectations, but, do you know what, $97.5 million still leaves over $300 million to be saved. Where are the rest of those cuts going to come from? How much is going to have to be cut from the front-line forces? How is our deployable force overseas going to be affected by this? How many jobs are going to be lost as a result of those savings that have to be made? Where is the plan? It is just like everything with this Government—they have got their goals, they have got their platitudes, they have got their aspirations, but, as usual, there is absolutely no plan.

Jonathan Coleman did not talk about defence once in his contribution to the Address in Reply debate. I think it is because he is embarrassed about what is happening to the Defence Force under the National Government. I will tell you the big question he is going to have to deal with, and that is what to do about morale in the Defence Force. People are now lining up to leave the Defence Force because of the appalling way the Government has treated those personnel and the appalling job it has done of leading the Defence Force through this period of change. So not only are we losing the people that the Government has cut, but also we are losing the people that it wants to keep. They do not want to have a bar of staying in the Defence Force any more; they are out of here. We are losing those skills and we are losing those people, and there is no opportunity for people to get in there and develop their skills and grow the Defence Force. And I tell you what: as we see more and more jobs being cut, there are going to be more and more people put on the scrap heap and more and more people on the unemployment benefit, thanks to this Government. This Government has no plan. This Government wants to build a brighter future, but it is a future that will never come, because it cannot tell us how it is going to get there.

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) : I support the motion moved by my new colleagues. But I want this afternoon to begin my contribution by paying tribute to George Tanner QC, who died last month. George was formerly Chief Parliamentary Counsel, and served Parliament with distinction for many, many years. At the time of his death he was a law commissioner. George was a great advocate of a plain English approach to drafting legislation. He knew that the law must be not only clear but accessible to the general public. As he once said, “A state in which people cannot plainly understand the laws may as well be a lawless State,”. I look forward to the passage of the Legislation Bill in the near future to bed in a lot of the changes that were started by George Tanner. He was a fine New Zealander, and I am sure all parties are very sorry that he has left us.

What, frankly, could be better than being a Minister in a Government led by this Prime Minister? During the 2011 election National put forward a clear and detailed policy programme. That programme resonated with the public, and we were returned to office with a greater share of the party vote than in 2008. It is a stunning result, pretty well unmatched in New Zealand’s political history, and it is something the Prime Minister should be very proud of. The public’s endorsement of this Government is illustrated no more clearly than in Rongotai. National was only narrowly beaten into second place in the party vote by Labour. The Labour Party’s majority dropped from over 4,000 in 2008 to under 500 in 2011.

Chris Hipkins: How did the electorate vote go?

Hon CHRISTOPHER FINLAYSON: I am coming to that. It was a very good result. But in answer to Mr Hipkins, Mrs King must, of course, be congratulated on her emphatic personal win; I think I was the first person to congratulate her. As I said to her on election night, the result was testament to her excellent service as an electorate MP in Miramar, then Rongotai, for 18 years. I am certainly going to be following her political career in Wellington with great interest in the next few years.

In Rongotai, at least, Mrs King ensured that the Labour campaign was not political vaudeville. We had a very good campaign in Rongotai, with a number of feisty meetings across the electorate. I was disappointed that my billboards were defaced by Green activists, organised by someone called Jolyon. “Jolly-on”—it sounds as though he went to Christ’s! He is the social justice outreach coordinator of the Anglican Diocese of Christchurch. Not surprisingly, in response, Russel Norman invoked the Sergeant Schultz defence of “I know nothing.”—methinks the stuff of a Tui advert. Other than the behaviour of Green vandals, I think the battle for Rongotai was a fair and very good-natured campaign.

So to a second term in Government. I have to say that of those to whom much is given—rightly raised by the Labour members—much is expected. So what I want to do is say something about the work going on in my portfolios. Mr Lees-Galloway repeated in a somewhat formulaic and repetitious manner: “Where’s the plan?”. Well, I want to say something about the plan going on in my various portfolios, which I am truly honoured to be able to work in. First, I come to Treaty negotiations. I want to say something about Treaty settlements, which are a very good-news story for all of us. Almost half of them have now been concluded. There have been challenging negotiations, and there will continue to be challenging negotiations, but I am very grateful for the support of my colleagues—in particular, the Minister of Māori Affairs and my chief Crown negotiators, led by Paul Swain—in getting settlements completed. This Government is committed to concluding just and durable Treaty settlements as quickly as possible. Indeed, as I told the House today, even the Human Rights Commission has praised our work in this area.

So I want to thank all members of the House, especially members of the Business Committee, for extending House sitting hours on Thursday, 16 February so that we could progress Treaty bills. The passage of these bills is very important because settlements cannot be finalised until the legislation is passed, and delays in legislating mean delays for iwi in sharing the benefits with their people and in putting the grievances behind them. So I think it is a very constructive approach; I hope we see more of it. Indeed, I had a very pleasant letter from the leader of Ngāti Manawa this afternoon thanking all of us for this approach and for progressing their settlement.

I am really honoured to be the Associate Minister of Māori Affairs, and I am very much enjoying working with my colleague the Minister of Māori Affairs, Dr Sharples. Delegations have just been finalised, and I have been given responsibility for reform of Te Ture Whenua Maori Act, Māori land ratings and tax, and the Maori Trust Boards Act. There is a big issue here, which if we can do well will do a great deal to advance the economic cause of Māori in this country. How best to deal with Māori land has been a perennial issue in this country for a very long time. There are 1.4 million hectares, with over 2 million ownership interests, and 26,490 freehold titles. Sixty-one percent is held in titles less than 5 hectares, and 30 percent have no formal management structure. A significant amount of this land is unproductive, and it is increasingly held by absentee owners. I probably would see more of it than most MPs, as I go around the country as Minister for Treaty of Waitangi Negotiations, and I see the potential. If we can address some of the issues requiring reform in Te Ture Whenua Maori Act, I believe that we can do great work here. There are also very significant rating issues, which need to be addressed, and I look forward to working with Dr Sharples on that issue.

So there are ways the potential of the Māori land estate can be realised, with significant economic benefits to individuals, and I am certainly going to be focused on these issues over the coming term. That is my plan as Associate Minister of Māori Affairs.

Let me look at the arts. We have so many plans in the arts, culture, and heritage portfolio that I could be accused, really, of almost doing too much. National, of course, is the party of the arts in New Zealand. We have always been very proud of that mantle. Two major projects this year are the Frankfurt Book Fair and the expansion of a very interesting programme called Sistema Aotearoa. This year New Zealand is the country of honour at the Frankfurt Book Fair—I think, probably, the world’s oldest fair; it is about 500 years old. We are set to receive and are already receiving significant media exposure throughout Germany, which is the world’s fourth-largest economy. We have a year-long opportunity to take centre stage through a series of very high-profile events, and as the record shows in relation to other countries of honour, it has had significant benefits for them with tourism.

The second programme I am interested in growing is what I call Sistema Aotearoa, modelled on a Venezuelan programme started in 1979, which has now about 240,000 students. It is mainly aimed at helping underprivileged kids have the opportunity to be involved in playing a classical instrument and working in orchestras. It has been adapted throughout the world, from north-east Brazil to the Merseyside. I started a programme last year in Ōtara: 98 percent of those who are participating are Pasifika, and it has been an unqualified success. There is a concert, which members may be interested in attending, in Auckland on 10 March. So there is a huge amount of work being done in this area—no lack of plans there.

I think it is obvious just from my portfolios what a busy Government this Key administration is. As the Minister of Health said, look at each and every portfolio, and you will see busy Ministers working on any number of plans. Be it the ones I have outlined in my portfolios, be it addressing debt, be it improving public services or rebuilding infrastructure, we have a very ambitious agenda to improve this great country of ours, and, as I say, I am conscious of the responsibility on me in my areas, and I am looking forward to working on some of the issues that I have mentioned this afternoon, and on many other issues over the course of this Government.

MICHAEL WOODHOUSE (National) : In my strong support for the motion I want to explore in this call the issue of income inequality and its links to the welfare reforms campaigned on by the National Party and announced by the Government just yesterday. Some might argue that the issue of income inequality is one where Tories might fear to tread; indeed, we have heard both Darien Fenton and Iain Lees-Galloway, in their recent calls, talking about it. But I think it is really important to examine the thesis behind it, and to check whether it is really the root cause of so many of the social ills that do beset our society. I want to say right from the outset that living on low incomes must be extremely difficult, and the goal for any Government is to create a framework where all New Zealanders can get ahead under their own steam. But the whole notion of relative inequality creates a situation where automatically a certain group of Kiwis is going to be labelled “in poverty”. So it is important that if we use these labels of poverty, income inequality, and so on, they are analysed and either confirmed or refuted.

The Spirit Level , the book written by two British epidemiologists, seems to be the basis for the belief that societies are worse off when incomes are unequal, even if they are higher-earning countries. I just want to test that, because what it suggests is that it is better to live in Afghanistan or the Czech Republic because although their incomes are lower, their incomes are less unequal, and I think that is a nonsense. But just for the moment, let us assume there is merit in that argument. It is worth looking at some of the countries that have managed to reduce income inequality over the last 20 years. For that, I am grateful to the Child Poverty Action Group for a recent report that it had.

I do not tend to put much weight on an organisation that claims that the Government puts an overemphasis on paid work as the way out of poverty, as if there could be some other way, because that is rubbish. Paid work is the only way out of poverty, and anyone who says different is deluded. But it does provide a helpful analysis of the countries that have reduced income inequality over the last 20 years or so. According to the Child Poverty Action Group, nine countries have reduced income inequality, but only four or five by any material measure—and guess who is included amongst that five: Portugal, Ireland, Greece, and Spain. The so-called PIGS of the global financial crisis have all reduced income inequality, and I bet their citizens feel just cock-a-hoop about that. The simple fact is that income transfers and a Government borrowing ahead of its means to support the closing of an income gap are, in the medium to long term, completely futile. And those countries have found that out to their economic peril.

Very recently the Government announced an increase in the minimum wage, and in a press release entitled “Minimal pay increase a tragedy”, Dunedin Methodist Mission’s chief executive, Laura Black, breathlessly stated: “Thirty years ago, we were sending international aid to Singapore. Over those thirty years they have transformed their standard of living by aggressive increases in the minimum wage and high investment in research and development. New Zealand is doing neither of those things.” Only here is the problem with that: Singapore does not have a minimum wage. It is actually one of the most unequal countries in the world, yet it is nearly not mentioned in any of the references to income inequality in The Spirit Level. Nor is Hong Kong. And if I had a dollar for every time the Nordic countries were mentioned in comparison with New Zealand, I would be very well off, because they are held up as the Holy Grail by The Spirit Level. But Slovenia, South Korea, and the Czech Republic all enjoy Nordic levels of income equality but not Nordic levels of well-being. Those Nordic countries have very high rates of divorce, crime, alcoholism, mental illness, and suicide, but none of those variables are mentioned or even measured in The Spirit Level.

So for a publication that is meant to be based on science, this is pretty damning. If one has a hypothesis and empirically tests it, it is bad science—it is junk science—to ignore the variables that do not suit the researcher’s preferred outcome. So much evidence against the income inequality thesis exists.

But here is the issue: we do have a problem, one where pregnancy, drug addiction, crime, and many other social ills are caused by people who are on low incomes, and we have significant social problems to address. Here are the simple facts: 220,000 people are living on a benefit. Despite the wailing by the Child Poverty Action Group, the last thing they actually need is to become more benefit dependent. But that is exactly what the Child Poverty Action Group, Labour, and the Greens would do for them by making them more dependent on State assistance. Paid work and a reduction in the reliance on the State is the only pathway out of poverty, and the Government’s policies are designed to do just that.

Some have suggested those reforms are a form of beneficiary bashing. Well, here is what I think bashes beneficiaries: 16-year-olds who drop out of school and become invisible until 90 percent of them turn back up on the dole at the age of 18; ensuring vulnerable mothers are left to their own devices and at the mercy of drop kick boyfriends who are not the fathers of their dependent children; and telling those people on a sickness benefit that that is as good as it gets, so that instead of focusing on the things that they can do, people are worried more about what they cannot do. That is beneficiary bashing. It has got to be addressed, and under the reforms that this Government proposes, it will be.

We will not just hand over benefits and leave people to their own devices. Instead, we are going to take an active work-based approach, because we have greater aspirations for those people.

Andrew Little: You like poverty.

MICHAEL WOODHOUSE: My friend Mr Little says there is no plan, which is the classic Labour mantra: there is no plan, and where are the jobs? Well, there is a 120-point economic development plan, which that party, which was so worried about its own leadership and its own insular battles during the election campaign, did not know even know existed. Let us talk about jobs. There are thousands of jobs being filled by immigrants and seasonal workers.

Hon Tim Groser: I raise a point of order, Mr Speaker. I know that the member has only recently been in the House, but this is getting very close to a barrage of interjections, which does not meet very familiar tests set out in previous Speakers’ rulings.

Mr DEPUTY SPEAKER: I will uphold the point of order. The member was being excessive. He is not, I think, sitting in his own seat, so it could be said that he has assumed a position to have advantage in interjection. That is also a Speakers’ ruling. So if he could just contain himself a little bit.

MICHAEL WOODHOUSE: In the interest of time, I just want to wind up by saying this, which is something we need to be very clear about: the Government’s announcements should not be taken as punishment for people not finding a job. But should people be penalised for not bothering to look? I say yes. I strongly support the Government’s welfare reforms in that area.

CHRIS HIPKINS (Labour—Rimutaka) : We are into the tail end of this debate on the Address in Reply, and I rise to speak in favour of the amendment put forward by the leader of the Labour Party, David Shearer. I have listened to most of this debate—in fact, I listened to the speech itself—and it is a clear sign that the Government is in trouble when its members spend most of their time talking about the Opposition. And that is exactly what National has done during this debate. National members have spent most of their time talking about the Opposition. I guess that is not surprising, because actually if they were talking about themselves, it would not look all that flash. Because the rhetoric from the National Party has changed over the last 3 years, has it not? Just 3 years ago John Key promised New Zealanders a step change. In fact what he is delivering is a step back. He promised a step change: everything was going to be rosy under a National Government, and in fact he was going to be straight-up and give straight answers. Now, when he is asked a tricky question we are told we live in a dynamic environment. So the rhetoric is changing from the National Party. He was going to close the wage gap with Australia and stop everyone leaving. Do we remember John Key at the Westpac Stadium in Wellington talking about how many New Zealanders were leaving to go to Australia? Well, three times that many people have left to go to Australia since National took office. We could fill the Westpac Stadium three times over with the number of people who have permanently relocated to Australia since John Key became the Prime Minister.

Perhaps that could have something to do with the fact that unemployment is up by over 50 percent since the National Party took office—and counting. We have 157,000 New Zealanders out of work under this National Government. John Key promised an “aggressive recovery”—aggressive recovery—to the recession, and now we are “just muddling through”. Those are his words, all of them. First, there was an aggressive recovery; now we are just muddling through. Then John Key—

Michael Woodhouse: Both accurate.

CHRIS HIPKINS: They are both accurate, according to Michael Woodhouse. It is an aggressive recovery we are going to muddle through! Well, I think most New Zealanders would see that for what it is: a Government that simply does not know what it is doing. It is simply muddling through. It is managing the decline rather than getting New Zealand back on track. Before the 2008 election John Key was “all about building assets”. Now he is “all about selling assets”. That is what John Key is all about these days; he is all about selling assets, managing our economic decline. In fact, the clearest indication of National’s management of our economic decline happened just before the election when we saw the first credit downgrade New Zealand has had in 13 years. It was not just one downgrade; it was a double downgrade. Do members know the last time we got a credit downgrade? It was the last time Bill English was in charge of the country’s finances. It was back when National was in Government in the 1990s that we last got a credit downgrade. The Labour Government did a good job of managing the economy, and by Bill English’s own admission in the House today, he has overseen the largest explosion in Government debt ever in New Zealand’s history. It is the largest explosion in Government debt ever in New Zealand’s history. That is the legacy that Bill English is going to be leaving future generations of New Zealanders. It is a massive explosion in Government debt, and in the meantime he is busy focusing on hocking off what is left of the family silverware.

The question we need to ask ourselves and the question that every New Zealander needs to ask themselves when they next vote in 3 years’ time, is whether after 6 years of a John Key National Government we are better off and what do we look like as a country. This Government has higher unemployment, more Government debt than ever before, and kids will be going to schools where there are more kids in front of every teacher in the classroom. Students will be paying more than ever before for their tertiary education. Families will be paying more than ever before when they go to the supermarket, because of the National Government’s increase in GST. They will be paying more than ever before, every month, when their power bills arrive. That problem will only be exacerbated when the National Government hocks off the energy companies.

What will New Zealand look like after 6 years of John Key’s Government? There will not be many assets left to be sold, because we know one thing about this Government: if they cannot sell it, they are going to cut it, and if they cannot cut it, they are going to contract it out. That is the mantra of this Government: leave nothing behind for future generations. New Zealanders, after 6 years of a National Government, will fast find themselves becoming tenants in their own land as National presides over the further sale of our land to overseas investors.

New Zealand will have been for 6 years dragging behind when it comes to leadership on environmental issues. Some of the first measures that this Government implemented back in 2008 within weeks of taking office was to wind back leading legislation on environmental protection, and turn the clock back. That is exactly what this Government is going to do, and has been doing for the last 3 years, and will do for the next 3 years. National’s agenda for public services has got New Zealanders rightly worried, because they were conned by the National Party, which promised that its cuts to public services would not affect front-line services. Remember that rhetoric: they were going to move resources from the back office to the front line. Well, have they actually lived up to that? In recent weeks we have seen examples of district health board after district health board cutting front-line services because of Tony Ryall’s funding cuts in the health service. For 3 years now we have seen a steady stream of older New Zealanders have their home help cut because of Tony Ryall’s cuts in the health service. Now the Government is promising to cut funding for teachers and to have bigger class sizes. Those are front-line services again on the chopping-block under a National Government. We have seen Department of Conservation rangers have their funding cut. The number of rangers has been cut. MAF Biosecurity staff—and such a vital role they play in New Zealand’s economy—had their numbers cut under the National Government.

In these last few weeks we look at what it is doing with the Housing New Zealand Corporation, and it is one of the clearest illustrations of the hoax that the National Party played on New Zealand when it said it was not going to cut front-line services. In Housing New Zealand Corporation it is closing local offices and replacing them with a call centre. It is replacing them with a call centre, and, what is more, there is no guarantee the call centre will even be in New Zealand, because John Key is talking about contracting out those types of back-office functions like call centres. So somebody in Taita, Pōmare, or Cannons Creek who has a problem with the Housing New Zealand Corporation could end up on a call to somebody in a call centre in Mumbai trying to deal with this problem where previously they had a local Housing New Zealand Corporation office that they could go to where they could get assistance, and this National Government is closing down those front-line services. This Government is far more interested in what it can do for its mates than it is in what it can do for ordinary, everyday New Zealanders. This is a Government that already is totally out of touch with the concerns of ordinary New Zealanders.

We have got John Key talking about how important jobs were. That was his No. 1 priority when he became Prime Minister. He even had a Job Summit where he promised New Zealanders he was not there to talk about the economic recession. He was not there to blame the economic recession; he was there to do something. He was going to do something about growing unemployment. Well, what has the track record been there? It has been a 50 percent increase in unemployment under this National Government. We have seen 150,000 extra New Zealanders out of work under this National Government, and what does his Minister of Finance, Bill English, say about that? “Oh well, there’s not much the Government can do about that.” That is what Bill English says. So while John Key made it his No. 1 priority, when he first became Prime Minister, to deal with this rising tide of unemployment, Bill English says: “Oh, oh, not our fault. Can’t do anything about it; sorry, you’re on your own.” That is the message that Bill English is sending to New Zealanders who have found themselves out of work: they are on their own.

That is not good enough. That is not good enough. This Government has a responsibility: if it is going to pull the rug out from underneath New Zealanders, pull the safety nets out from under New Zealanders, it has a responsibility to make sure that it is creating jobs for them. Because it is all very to say to people “We’re going to cut your benefit unless you go and get a job.”—where is the job? I think it is actually very reasonable to say to New Zealanders that if they can work they should work, but where are the jobs? During the tenure of this Government 157,000 jobs have disappeared. Cutting benefits will not solve that problem; creating jobs will. This Government has no plans and no ideas about creating jobs.

Hon HEKIA PARATA (Minister of Education) : Tēnā koe, Mr Assistant Speaker Robertson. Tēnā tātou te Whare. Tēnā koutou katoa. I would like to take the opportunity to acknowledge the hard work and dedication of my colleagues here today. I would like to congratulate you, Mr Assistant Speaker, on your reappointment to the role. I would also like to welcome all members of the House to this the 50th Parliament of New Zealand. It is a privilege to be addressing you today as the Minister of Education. I have long been passionate about education, and as Minister I am keen to make a contribution.

New Zealand is a First World nation, it has First World aspirations, and we must have a First World economy in order to deliver on those aspirations, and education is a critical contributor to this, in two ways. It builds the social and cultural capital of our country and of our society, and it contributes to the economic growth and productivity of our economy. Education is the key, and that is why it is so important that we ensure that all learners in the New Zealand education system have the opportunity to do well, to the best of their potential and their ability. We know that we have a system that has many world-class features, we know that we have a system in which there are many world-class practices, and we know that we have a system within which we have many world-class practitioners. The challenge for us is to ensure that, rather than having the present situation where four out of five students are being well-served by our system—we are an aspirational Government; we want there to be brighter futures for all New Zealanders—we have five out of five students doing well. We want to have a system that supports them to do well, and allows them to realise their full potential, so that they are equipped for the 21st century with the skills, the education, and the learning that means they can navigate that with success for themselves and for their families.

I am pleased to say that our education system has been recognised internationally. One recent OECD report called the Programme for International Student Assessment, which we know as PISA, told us that New Zealand’s best students continue to compare favourably with all the best students in the rest of the world, and that is something we wish to maintain as a country. A second report that has recently been released by the OECD—as recently as last Friday, in fact—comments on the evaluation and assessments framework of 24 countries, and commends New Zealand for its coherent national agenda and for the way it has invested in evaluation and assessment all the way through our system. It talks about the successful work that we have done in embedding the National Certificate of Educational Achievement (NCEA) and the moderation within and between schools. It talks about the good work that the Education Review Office has done in its assessment of schools, and, yes, it talks about, and commends us for, the introduction of national standards, and encourages New Zealand to continue to implement this, because it will continue to provide information in plain language for both the schools and the parents of children in schools—and that is exactly what we intend to do. Why? Because we are committed to raising achievement by and for all students in our system.

We have a twofold challenge. In those parts of the system that are working—and those are significant parts—we have the challenge to continue to raise that as well, because we are not a Government that rests on its laurels. We want to see ever-greater improvement, and ever-greater achievement and attainment, because we want smarter, faster, more nimble New Zealanders to be capable of positioning New Zealand well in the international economy, and to be able to see and take the opportunities that their perspicacity will deliver to them. We must continue to raise achievement to that end. At the same time, in those parts of the system that have consistently under-served cohorts of our population—Māori, Pasifika, and children from low socio-economic backgrounds—we need to change the system in that regard so that it will perform better for them, and, in so doing, continue to raise the performance of the rest of the system.

So the overriding priority of this Government is to raise achievement, and we recognise that that begins at the earliest years of life. That is why we have committed to 98 percent of all 0 to 5-year-olds having early childhood education before they enrol at school. We know that across the country we have an average of 94 percent, but again for Māori and Pasifika students, and for those from low socio-economic homes, they do not have the same level of participation. We are dedicated to seeing that rise, because we know that children who have had quality early childhood education will enjoy a stronger educational trajectory as they transition into the compulsory sector, pass through that, and on into the tertiary sector. So we will continue to invest in early childhood education. As the Prime Minister said in the House earlier this afternoon, we have invested the most ever in this sector, at $1.4 billion, and we will continue to support the success there.

In primary schools, what national standards have done for us is allowed us to focus on how we can raise the quality of learning interaction between the teacher in the classroom and the student engaged in that learning experience. It is important for the student, it is important for the teacher, it is important for the school, and it is extremely important for their family and community to know how well their child is doing, what their child needs in terms of support, and how the school might provide that. But equally important is how the family and community can support that as well. We are very focused on those vulnerable times of transition between early childhood and primary school, and from primary school into secondary school, and we want those transitions to be made confidently and happily, so that the student will continue to learn. The way that that will occur is to have an unambiguous, unrelenting focus on the learner at the centre of the system, and I want to make it very clear that in my time as Minister of Education I will be unrelenting in the focus on the learner. I will champion the education sector, because I appreciate that it is populated by very committed, very talented teachers, and by other parts of the education profession. They deserve our thanks and support, but also they deserve our expectation that we will continue to raise achievement and attainment, not just for those who are already succeeding but also for those who are not well-served in the system.

We have focused a lot of effort, and my colleague will shortly speak with more authority and comprehensivity about the tertiary part of the education sector, but one of the bridging mechanisms that this Government has introduced is the Youth Guarantee, because we recognise that young people need to have available to them options, choices, and pathways that clearly guide them towards opportunities to enter the labour market, to be employed, to start their own businesses, and to be able to make good choices and have good life chances in terms of what it is that they can achieve, not only for their families but also in contributing back to this country. In that regard this Government has invested $1.5 billion in ultra-fast broadband. To date, we have invested a further $160 million so that schools can link up to the ultra-fast broadband, and we are about to invest a further $300 million to $400 million in the Network for Learning, because we recognise that our young people need to be able to navigate a digital environment. So we will be making available to them a 24/7 e-learning opportunity, and we will be supporting schools to ensure that they are able to take advantage of this technology.

We are working with whānau in the teaching workforce, and investing in professional learning and development, because we know that the quality of the teacher in the classroom makes the most difference to the learning experience of the student, and that is where we will put our investment and support—it is with the teacher.

We are also interested to ensure that a world-class feature of our education system is the governance—the self-managing boards of schools—and that it is also fit for purpose in the 21st century. We are keen to continue the conversation I have begun about what further refinements we might want to look at in terms of boards.

Finally, I want to reiterate this Government’s commitment to Canterbury. Canterbury is a resilient, stoic community in which, in respect of education, almost every school has suffered some kind of damage or challenge, as well as every early childhood centre. We are working with Canterbury to identify what the opportunities are for not only recovering and restoring the education network in Canterbury but also taking advantage of the opportunities to see how we might position for the 21st century. Thank you for the opportunity to participate. I am honoured to be the Minister of Education, and I look forward to reporting to this House on continued achievement by all New Zealand learners. Kia ora tātou.

Hon STEVEN JOYCE (Minister for Economic Development) : Thank you for the opportunity to speak here this afternoon as the final speaker in the Address in Reply debate. I have listened to the debate with great interest—pretty much, all of it; every minute of it—and I have noticed, I have to say, quite a bit of what might be called more than moderate inconsistency on the other side of the House. It is more than moderate inconsistency. This is the other side of the House that demands, on the one hand, jobs, jobs, jobs, which is right, but then it says: “You cannot do anything that would create jobs. You cannot do that, they cannot build that there, you cannot explore for that, you cannot invest in property here, you cannot invest in this country.” Those are the things that the Opposition is saying. So on the one hand it is saying more jobs; on the other hand: “But don’t do anything. Whatever you do, don’t do anything at all.” Very quickly, if we follow that prescription, we would be limiting our options once more, pretty much as the previous Government did back in 2008 when it finally got down to only two things it could do to create jobs: subsidise them, and train people. That was the end of it—subsidise people and train people. That was all it could do. It had the whole economy down to two things because they were the only two things it was prepared to accept. Various elements of the Greens and Labour said: “No, you can’t do that. You can’t do that.”

The reality is you cannot build an economy if you—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I came down from my room after I counted “you” being addressed seven times. Since I have been in the House—

The ASSISTANT SPEAKER (H V Ross Robertson): No; the member will be seated. There has been a Speaker’s ruling made on that recently and the Speaker actually has the right to decide what happens.

Hon STEVEN JOYCE: The reality is—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The Speaker’s rulings have been very clear. When people are addressing the Chair, they do not use the word “you”, because it involves the Speaker in debate. This Minister has now done it 11 times.

The ASSISTANT SPEAKER (H V Ross Robertson): The member will be seated. As I mentioned, there has been a new Speaker’s ruling and that decision is taken by the Speaker. It was made in 2008.

Hon STEVEN JOYCE: The reality is that it is impossible to build an economy—

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

The ASSISTANT SPEAKER (H V Ross Robertson): I have made the ruling, Mr Mallard.

Hon Trevor Mallard: Well, that ruling has been subsequently overruled by Mr Speaker, Dr The Rt Hon Lockwood Smith, who has ruled that members should not use “you” because that refers to the Speaker. I have heard him do that this year.

The ASSISTANT SPEAKER (H V Ross Robertson): All I can say in that case then is that I ask the member to continue his speech and to try to keep within the Standing Orders.

Hon STEVEN JOYCE: No references to sheep of any kind, Mr Speaker, from here.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! The member must not comment on any Speaker’s ruling. The member is out of order.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think calling you a sheep is totally inappropriate.

The ASSISTANT SPEAKER (H V Ross Robertson): Frivolous interjections designed to break up a speech lead to disorder.

Hon STEVEN JOYCE: The reality is that it is impossible to build an economy by lopping off both arms and both legs before one starts. We therefore need to stop the endless debate about which industry will save us and which industry we can no longer have in this country, and focus on all industries in which New Zealand has a natural advantage. Sadly, the problem is with the Opposition. When it says it wants jobs, it then goes on to oppose everything. Let us look at some of the list of things that have been opposed by various members of the other side of the House in just the last little while: making the most of our natural resources, improving transport linkages that people are prepared to pay for, building ultra-fast broadband, filming the Hobbit movies in New Zealand, having an efficient port sector in this country, having a mixed-ownership model to reduce debt, building an international convention centre at no cost to taxpayers, and accessing capital offshore. All of those things the Opposition—whether it is Labour, the Greens, or the Mana Party, which is the new friend of Labour—does not want to happen. We have been down this road before. It basically means slowing growth even further, and that is what this Opposition is in favour of.

The reality is New Zealand needs more and higher-paying jobs, and this Government is implementing a plan to do that. Jobs depend on businesses that are competitive, that sell things of value, that are unique or of better quality, and that is what this Government is encouraging with a whole range of policies that are encouraging businesses and innovation. There is an innovation policy with investing in science, and investing in the opportunities to grow innovative businesses. Sorting out the capital markets—this Government has done a huge amount in that space. We are providing reasonable access to the necessary raw materials for business. Investing in skilled people to work in businesses—this Government is very focused on that. The previous speaker, the Minister of Education, Hekia Parata, listed a huge number of things that we are doing in that space. There are customers who want to buy our products, and we are putting a big effort into export markets. We are also investing hugely in public infrastructure—things like transport, ultra-fast broadband, and the Rural Broadband Initiative. Those are the things you do if we want more and better jobs for New Zealanders, and that is what is being done in this country.

So what does Labour propose? Well, so far, not very much. Prior to the election, its plan was to tax everything. It was going to have a complex capital gains tax. It was going to tax every business, every farm, and 1.8 million KiwiSaver accounts. It was going to have a new top tax rate. It was going to strengthen the emissions trading scheme. It was going to have a $15 an hour minimum wage. It was going to have all these extra costs on businesses, and yet it has the temerity now to claim it wants more jobs.

Actually, we are not sure what Labour members believe in right now. Nobody knows any more. Apparently, they have a new leader, but nobody knows what he thinks. He cannot land on a position. He has not been seen to offer an opinion. He is wandering around in an aimless daze. “Dreamy Dave”, they call him. No thoughts of his own, a back story with no front story—that is what they are saying about the new leader of the Labour Party, who is being desperately spun by his own staff as being a deliberate blank page—a deliberate blank page. Ah! A tricky plan. They search around for something for him to say, and they have come up something—I saw it in an article last weekend—“You don’t wear your guns on the outside.” That is the news from the Leader of the Opposition.

But he is only one of Labour’s grand strategists. It has other strategists. It has David Parker, or “Denying Dave”, who actually is desperately trying to pretend that the global financial crisis and the Canterbury earthquakes did not happen. He wanders down to the House most days and says: “Why is the Government not pumping up credit the way we did back in 2008 when I went tramping with Auntie Helen, and we did all those things?”. Well, his time has passed, and desperate “Denying Dave” has missed his chance and he has nothing of relevance to say in 2012.

Then there is “Dark Dave”. Then there is desperate “Dark Dave”, the “K-Rudd” of the New Zealand Labour Party, sitting there on the Opposition benches desperate to have another go. Actually, he exhibits the only signs of Labour’s growth agenda. It is true to say that David Cunliffe is the only member of the Opposition who is showing any signs of a growth agenda, and that is his lovely new beard. It is a little theatrical, there is not a lot of substance. It also lacks—

Chris Hipkins: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! Points of order will be heard in silence. I call Chris Hipkins, but it had better be a point of order.

Chris Hipkins: It is indeed. When the Minister started his speech at 18 minutes past, he was told he had 9½ minutes to go. His time should have finished about 30 seconds ago.

Mr SPEAKER: Order! The Speaker is the sole determinant of time. I have the time. The member has 21 seconds remaining.

Hon STEVEN JOYCE: I had so much more to say about “Desperate Dave” and his lovely facial hair. All I can say is I hope he hangs on to it because it is the only sign of an economic growth agenda that this Opposition has. The reality is you cannot yell for jobs, jobs, jobs, but then oppose every means by which growth can be achieved in the New Zealand economy. If you do that—

Mr SPEAKER: Order! The member’s time has expired.

A party vote was called for on the question, That the following words be added to the motion: “and the National-led Government will sell New Zealand’s assets against the will of the public; the Government has no ideas to create jobs or a clean and innovative New Zealand; that the Government is widening the gap between the very rich and the rest and therefore this House has no confidence in the National-led government.”

Ayes 57 New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.
Noes 64 New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.
Amendment not agreed to.

A party vote was called for on the question, That the motion that a respectful Address be presented to His Excellency the Governor-General in reply to His Excellency’s speech.

Ayes 64 New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.
Noes 57 New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.
Address in Reply agreed to.

Presentation to Governor-General

Mr SPEAKER:

Address from the House of Representatives

to

His Excellency Lieutenant General The Right Honourable Sir Jerry Mateparae, Chancellor and Principal Knight Grand Companion of the New Zealand Order of Merit, Principal Companion of The Queen’s Service Order, Governor-General and Commander-in-Chief in and over the Realm of New Zealand.

Your Excellency—

We, the House of Representatives, thank you for the speech addressed to us when you opened this Fiftieth Parliament.

We assure you that the matters referred to in your speech will receive our careful consideration.

Ko te tūmanako nei kia mahi tahi tātou katoa.

A party vote was called for on the question, That the Address be adopted.

Ayes 64 New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.
Noes 57 New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.
Address adopted.

Hon GERRY BROWNLEE (Leader of the House) : I move, That Mr Speaker, accompanied by the Mover and Seconder and other members of the House, do present the said Address to His Excellency the Governor-General at a place and time to be appointed by His Excellency.

  • Motion agreed to.

Medicines Amendment Bill

First Reading

Hon PETER DUNNE (Associate Minister of Health) : I move, That the Medicines Amendment Bill be now read a first time. At the appropriate time I intend to move that it be referred to the Health Committee and that it be reported back to the House by 2 July 2012.

This bill provides an opportunity to amend some specific provisions of the Medicines Act 1981 to streamline that legislation. It modernises the definitions of “medicine”, “medical device”, and “therapeutic purpose” to align the boundary between medicines and medical devices with international norms. It removes prescriptive detail about the approval process for new medicines, and instead enables regulations to specify such administrative details. It aligns the prescribing framework for nurse practitioners and optometrists with that for medical practitioners, dentists, and midwives. It establishes a new category of “delegated prescriber” whose members will be allowed to prescribe under a delegated prescribing order that is issued by an authorised prescriber. It establishes a mechanism to allow time-limited demonstration sites of extended prescribing rights to new groups of health practitioners. It makes minor and technical amendments to update and clarify the provisions for granting licences to manufacture, pack, and sell medicines, and to operate a pharmacy. And it expands the regulation-making powers in the Act to provide for new standards and innovative practice, such as electronic prescribing.

Let me now outline the key provisions in the bill. As we all know, medicines have significant health benefits, but they can present serious risks, especially if they are used inappropriately. For that reason the safety, quality, and efficacy of new and changed medicines are assessed before consent for their sale or supply in New Zealand is granted. But the medicine approval requirements in the Medicines Act are very prescriptive and do not provide the flexibility needed to accommodate technical and process reform, so this bill removes most of the detail about the application and process requirements for new and changed medicines and related products from the Act, and instead requires applications to conform to requirements that are specified in regulations. Setting out the detail of medicines approval requirements in regulation rather than in primary legislation will mean that the process to amend or update those requirements becomes much simpler. That approach will also enable greater flexibility, as different approval processes can be specified for different product types—for example, innovative prescription medicines, generic prescription medicines, or non-prescription medicines. All of this will improve efficiency and support risk-appropriate assessment processes without compromising safety, and will also enable requirements to be updated in a much more timely fashion in response to capacity issues and changes in best practice.

This approach will also accommodate the development of a joint regulatory approach under the Australia New Zealand Therapeutic Products Agency. The House may be interested to know that the New Zealand and Australian Governments have restarted work to implement the Therapeutic Products Agency over 5 years.

Iain Lees-Galloway: Why did it stop?

Hon PETER DUNNE: It is a very long story. The member asks why it stopped. I think it comes down to one very simple political precept: an inability to count the numbers. That is a long story, and the member’s party was in Government at the time that that happened.

Iain Lees-Galloway: When did the numbers fall?

Hon PETER DUNNE: I will tell him privately, because it is an interesting story.

I will come back to the bill. Currently, medical practitioners, dentists, midwives, nurse practitioners, and optometrists have got prescribing rights under the provisions of the Medicines Act 1981. All of these health professionals are able to prescribe independently—that is, without supervision—within scopes of practice that are defined by their responsible authorities. When nurse practitioners and optometrists were given prescribing rights in 2005, they were categorised as designated prescribers. Designated prescribers are required to have separate regulations that define the scope of practice within which their prescribing is permitted, that provide a list of prescription medicines that they can prescribe, and that also have established minimum competency requirements. Including this detail in regulation is administratively burdensome, as the regulations quickly come out of order. So what the bill does is align nurse practitioner and optometrist prescribing requirements with those of medical practitioners, dentists, and midwives, and it revokes the designated prescriber regulations. That change acknowledges the competence and the professionalism that nurse practitioners and optometrists have demonstrated since they gained prescribing rights in 2005. The changes in the bill will also reduce the administrative burden on nurse practitioners’ and optometrists’ responsible authorities, recognising in turn the experience and expertise that those organisations have achieved in promoting and monitoring safe practice within their particular professional groups.

The bill creates a new category of prescriber, a delegated prescriber, who will be allowed to prescribe under a delegated prescribing order issued by an authorised prescriber. The delegated prescribing order will authorise the issue of a prescription. Delegated prescribing is not possible under the current legislation, but has the potential to improve a patient’s access to prescriptions. This new delegated prescriber category adds a prescribing option for professional groups beyond the existing prescribing categories, and it will be for the regulatory authorities to determine what form of prescribing rights, if any, they may intend to seek for their particular professional group. To gain delegated prescriber status, a responsible authority will have to apply to the Minister of Health, and a delegated prescriber’s ability to prescribe would be limited by the terms of the relevant delegated prescribing order and subject to reviews and monitoring by the authorising prescriber. Regulations will set out requirements for applications for delegated prescribing and for delegated prescribing orders.

The Government is confident that this bill will improve the flexibility and efficiency of approval processes for medicines and for related products, and will also encourage innovation and flexibility in prescribing practice. A more comprehensive overhaul of the Medicines Act will be undertaken as part of the work to implement the Therapeutic Products Agency when that process is complete, and that will modernise and recast our medicines legislation and will also help address issues such as the regulation of medical devices and cellular therapies, and controls on advertising. But that is for another day. In the meantime I commend this bill to the House.

Hon MARYAN STREET (Labour) : I rise to speak to the Medicines Amendment Bill and say, with my colleagues from the Labour Party, we will support this bill being referred to the select committee. But can I just say that what we have just heard from the Associate Minister of Health Peter Dunne is a truncated version of the regulatory impact statement, so there was nothing about the original purpose of this bill, and nothing about what could have been done earlier. In fact, if I take up where the Minister left off, the Minister left off at the second sentence of the regulatory impact statement. The Minister was quoting the regulatory impact statement, written by an official and, I have to say, written delicately by an official so as not to cause the current Minister of Health, or the Associate Minister of Health in this case, any embarrassment. My commendations go to the official for that. It says “A more comprehensive overhaul of the Medicines Act will be required in the future to modernise and recast the medicines legislation …”. The Minister just said that. The question that is begged in that sentence is, if why not now, then why not 5 years ago?

For those who were not in this House 5 years ago, let me elucidate. The National Party decided to play naked politics, jumping on the bandwagon of people in the supplementary medicines industry: the dietary supplements, the people who produce vitamins, and the people who use non-traditional medicines. It jumped on that bandwagon. They all got out at the front of Parliament, stood there under red umbrellas—if I remember correctly, Tony Ryall leading the band—and said “We can’t have this regulatory thing. It’s going to put up the cost of everybody’s Berocca. It’s going to put up the cost of everybody’s vitamin supplements.” Never mind that the intention was to regulate unregulated medicines coming in from overseas and being sold to New Zealanders without any reference to a panel of experts, without any regulation applying to them, and without any comeback—and there were adverse incidents occurring as a result of that. But no, the National Party at the time decided that it could have a photo opportunity here, it could get out at the front of Parliament, with all these red umbrellas, and say “We’re not having a bar of this.”

And what do we get now? Minister, we get a half-baked piece of legislation coming back now. Of course we will support it; it was ours to start with. Of course we will support it, but it is only half the job. Why come into the ministry, Minister, and do half a job? Why not do the whole thing? This is pathetic. Yes, we will support it. Let us hope we can find some improvements to make to it at the Health Committee. I look forward to receiving it; I am on the Health Committee and I look forward to receiving it and seeing whether there is anything we can do to improve it.

Let me give one example of things that could have been done 5 years ago, if the National Party had agreed even to parts of this legislation and not other parts. It could have agreed to do the things that the Minister is now proposing around Medsafe, to make the procedures more flexible. What we have done in the meantime, between 2007 and now—and I am not reading this from the regulatory impact statement, Minister. What we have lost in the 5 years between 2007 and now is the potential for a faster process around the accession of medicines on to the market in New Zealand. If we had been able to do that, who knows what medicines might have been available to the New Zealand public that could have alleviated symptoms, provided a cure, and improved people’s quality of life over the last 5 years—and that responsibility I sheet directly home to the National Party. This is not how one runs politics in this country—not at the expense of people’s health. There was a serious risk, and for new members of the National Government I do bring this to your attention. Do not be hoodwinked by the fact that you have no institutional memory of what happened 5 years ago. Do not be hoodwinked that this is the best thing since sliced bread. We could have had sliced bread and toast 5 years ago; we are just getting the sliced bread now.

So I do lay at the door of this Government now the responsibility for Medsafe processes not being able to become more flexible, so more medicines, prescribed and not prescribed, standard and not so standard, could be allowed to come into the market in New Zealand in a regulated fashion that guaranteed the safety of those medicines for New Zealand patients and that could have improved their quality of life in the last 5 years. That is a serious responsibility, and I hope members, particularly new members of the Government, understand that. If one reads the regulatory impact statement one will see—and most of it has been read to us by the Minister just now—that the consultation processes, particularly around prescribing rights, were all consulted and agreed on in 2007. That bit was all good to go; that bit was all good to go. So why would such a thing, which this Government is now parading as highly desirable, have taken 5 years of delay because of that party’s naked politicking when it was in Opposition? It does not matter how members opposite may joke about this; it is an extremely serious issue.

There are really good things in this bill that we are keen to see put in place, because we drafted them in the first place. But just be aware that the consultation processes were undertaken. We started in 2003 with a trans-Tasman therapeutic agency proposal, and that was part of the bill that went through. There was a huge reaction against that by members of the public and members of that industry, as I have outlined already. But such things as prescribing rights, and recasting the scope of practice of certain practitioners so that prescribing rights could be given, are very sensible initiatives. They would free up some of our medical services and make them more available and accessible to the people who need them most.

I am going to be interested to hear from the Green Party on its approach to this. There were some differences at the time between us and it on this measure in its totality, but we are getting only half of the bill now. We are getting the bit that the National Party could have agreed to 5 years ago, so let us get on and do it. Five years have passed when people have not been able to access medicines quickly that may have improved their quality of life, and that is undeniable. So let us get on with it, let us get it through, and let us take note of the facts that the consultation has happened, and that all of the stakeholder groups that have an interest in this area have been consulted and have agreed to these provisions.

I am hoping that this bill will have a very speedy route through the Health Committee. Dr Paul Hutchison chairs that select committee and chairs it very well, and I hope that he will expedite this piece of legislation so that we do not have to wait 6 years for it to come into effect. Thank you.

Dr PAUL HUTCHISON (National—Hunua) : It is indeed a pleasure to speak on this Medicines Amendment Bill, and I want to start by congratulating the Hon Peter Dunne on his persistence and hard work in making sure that the bill is indeed on the floor of the House today.

I also want to acknowledge the Hon Tony Ryall for ensuring that there is an increase in productivity, efficiency, and effectiveness in New Zealand health services today, because over those dark, long 9 years, clearly, productivity in the health services became static or went down. This was backed up by both Treasury and New Zealand Institute of Economic Research papers that showed static or declining levels of productivity, and that is surely of great concern when the health budget went from $6 billion in 1999 to $12 billion in 2008.

National is certainly committed to delivering high-quality health services to New Zealanders. Because of that, we are highly cognisant of how important it is to get productivity into the health services. This Medicines Amendment Bill is all about doing exactly that: getting streamlined processes in place and literally delivering better, sooner, more convenient health services to New Zealand.

Andrew Little: It’s taken you 6 years to get here. Why has it taken so long?

Dr PAUL HUTCHISON: It is important to just put into the minds of the Labour Opposition—and Mr Little sitting over there—that health services right around the world are characterised by almost infinite demand but finite resources. Mr Little, it is hugely important that we do not go back to those static old days of having no productivity under a Labour Government, but that we continue to fly with a National Government that is certainly achieving an incredible amount in 3 to 4 short years. For instance, this afternoon during question time the Minister of Health pointed out the amazing achievements in the health targets. Immunisation, only 4 years ago, had about 70 percent completion rates for 2-year-olds. It is now a stunning 92 percent, and in places like Porirua, it is 94 percent, which is a great achievement.

The Medicines Amendment Bill amends some specific provisions of the Medicines Act 1981. It also amends the prescribing framework for nurse practitioners and optometrists and creates this new delegated prescriber category. There is a great deal of interest in this, because it will allow pharmacists, within the scope of practice, to eventually have the opportunity to prescribe. There will be restrictions around it. They will not be allowed to own pharmacies, and they will have had to go through a very arduous course. But there is no doubt that many pharmacists carry a knowledge of pharmaceuticals way beyond that of generalists because of the fact that they are dealing with them day and night and are very familiar with the sorts of side reactions and other quirks that everyday, practical people bring to them from time to time. So I think this will be quite a large leap forward.

The bill also fulfils the Government’s commitment to making more new medicines available in New Zealand. Certainly, it was interesting to hear the Hon Maryan Street somewhat shrilly say that this could have happened some years ago, but it did not happen some years ago. That Labour Government had the opportunity to get the numbers, but it failed. It failed to do so. So it is tremendous that we are now, under a National Government, going to have this bill through and that it is going to be supported by the Labour Opposition, which is excellent.

One of the things that is so important is to realise that over the next two or three decades health requirements in New Zealand will probably double, but we are not going to be able to double the number of hospitals or the number of health practitioners. That is why it is so important to have new, innovative ways of doing things; new, innovative ways of prescribing; and new, innovative ways of using health professionals.

Certainly, the nurse practitioners have shown this. I was lucky enough to attend the diabetes pilot study at Palmerston North Hospital about 18 months ago, and it was quite inspiring to see those nurses, who had an incredibly detailed knowledge of the drugs involved in diabetes. They had huge enthusiasm and contact with their patients, and the results of that pilot were really quite extraordinary and a great credit to the nurses involved with that pilot project. It will be great to see it being expanded across New Zealand. This is a great bill, and I look forward very much to going over the details of it in the Health Committee.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : Well, is that not just typical of this Government, particularly in health? The National Party is the party that is the arch-architect of saying one thing in Opposition and doing exactly the opposite when it is in Government. This is a bizarre reversal of the usual situation, because this is the party that opposes everything when it is in Opposition. It opposes good, efficient, productive improvements that can be made to the health system when it is in Opposition if there is political mileage to be made out of it, but then, just a few short years later—actually, I do not know why National did not do this in the last term. Maybe it just—

Darien Fenton: I can tell you.

IAIN LEES-GALLOWAY: Why was that? Why was that?

Darien Fenton: Because they were just politicking.

IAIN LEES-GALLOWAY: Because it was just politics—that is exactly right. It was just politics. It needed to let the dust settle a little bit from back in 2005, hoping that people would forget the stance it took back in 2005, when Tony Ryall stood out on the forecourt of Parliament and told New Zealanders they would be paying more for their Berocca, they would be paying more for their health supplements, because the horrible Labour Government wanted to align our legislation with that of the Australians. You know what? We thought we were going to get this through. We thought we were going to get this done back in 2005. The Associate Minister of Health Peter Dunne is nodding his head, because he thought it was going to happen back in 2005 as well, but it was National playing pure politics that has caused this to take so long, and here we are 6 years later.

This Government’s mantra on health is “better, sooner, more convenient”. It is absolutely meaningless drivel. It would have been a whole lot better if we could have done this back in 2005; it certainly would have been a whole lot sooner to do it back in 2005. I bet the people who are going to benefit from these changes would have thought it a lot more convenient if we had made these changes back in 2005—but no, because National likes to play politics on health.

Just earlier today, in fact, Tony Ryall—him again, yes—was trumpeting again what great advances this Government had made in tobacco control and everything that had happened in the last term. And do you know what? We did do some good things last term. This whole Parliament got together and did some good things on tobacco in the last term of Parliament, but that was new. That was a change from the bad old days when National played politics on health and opposed every measure that the Labour Government wanted to introduce. It rarked up sentiment and it told people that the Labour Government was interfering in their lives, because we wanted to introduce smoke-free environments, we wanted to get smoking out of pubs, and that sort of thing. That is the way that party operates. When it is in Opposition, it will play politics on anything, and now that it is in Government it is just quietly trying to make these things find their way through.

This is a good bill. We would have loved to see these changes happen 6 years ago, but the Government is finally going to support them and push them through. As a member of the Health Committee, I am looking forward to this bill arriving at the select committee—

Moana Mackey: Finally!

IAIN LEES-GALLOWAY: —yes, finally arriving at the select committee—so that we can give it the attention it deserves. Of course, the whole purpose of this bill is to do a lot of streamlining of regulations to do with medicines. As the Minister pointed out, it is important to get this balance right, because medicines are drugs. The whole reason why we have medicines and supply medicines to people is that they have beneficial purposes, but with every medicine comes a certain amount of risk. If we are going to be streamlining the mechanisms by which medicines are approved, and by which they are prescribed and dispensed, then we need to make sure we are getting that balance right so that we do not venture too far into the area of creating too much risk with the aim of improving efficiency. So I am looking forward to hearing what the experts have to say about this bill and what people who are out there in the field have to say about this bill as well.

I am particularly interested in the provisions for the prescribing framework for nurse practitioners and optometrists and aligning those with that of medical practitioners, dentists, and midwives. Although it is not in this bill, and it would not be appropriate to have the changes that I am about to talk about in this bill, there is another thing I think we need to do in this whole area of prescribing medicines. Maryan Street talked about the sliced bread and said that we could have had the toast as well. I think there is some marmalade that we can put on that toast too—

Shane Ardern: Marmite.

IAIN LEES-GALLOWAY: Marmalade is my choice; Mr Ardern’s might be jam, I do not know. But that would be to free up nurse practitioners so that nurse practitioners can have greater ability to work within their scope of practice. There are a number of pieces of legislation that actually prevent nurse practitioners from working on what is within their scope of practice; the legislation actually stops them from doing it. More often than not it is because the legislation specifically says a doctor must carry out those functions, and therefore nurse practitioners are barred from doing so.

In fact, there are, I believe, 27 different Acts that need to be amended, and in some of those Acts there are several sections and parts that need to be amended. My colleague the Hon Ruth Dyson has been working on some legislation to do that, and hopefully by the time there is next a ballot for members’ bills a Labour member will be able to put that bill in the ballot. But, of course, it is at the mercy of luck, the luck of the draw, as to whether or not that bill comes out. It would be great if the Government actually took that issue up and took one of the next logical steps from this bill in freeing up nurse practitioners to be able to work more efficiently and more effectively within their scope of practice—including the ability to prescribe more medicines—simply to free up access. We know how difficult it is for people to see a general practitioner, and if it was not necessary to see a general practitioner for everything—if that was something a nurse practitioner was able to do instead—that might improve people’s access to primary health care.

We are certainly supportive of this bill. Many of the changes, of course, covered in this bill were consulted on back when Labour was in Government. There has been a lot of consultation and we hope that that will allow a fairly expedient process through the Health Committee. But please let nobody think that that means it will not get the attention that it deserves. This is an important piece of legislation that needs to be looked at closely.

The development of the delegated prescribing proposal was originally undertaken by the then Minister of Health when Labour was in Government, and we believe that there is strong support for the general proposal. The delegated prescriber role provides flexibility to allow for new developments in prescribing practices and innovative models of care. That is what we want to see: more innovation in health care and innovative ways of improving accessibility to health care.

Delegated prescribing would allow more timely access to services for patients, which is especially important in community and rural settings, and in meeting the growing demands of chronic disease, which may result in reduced need for specialist attention and/or surgical intervention. I have to say I find it rather surprising that addressing chronic disease is not one of the Government’s health targets, because it is an area where things can be improved, and where earlier intervention could reduce costs and could improve the well-being of all New Zealanders.

This bill is a good bill. We are very happy to support it. We are disappointed it has taken as long as it has to get here. We are disappointed there has been politics played with these issues in the past, but maybe we can put that behind us, get on with it, and make these changes, which will be positive for all New Zealanders.

KEVIN HAGUE (Green) : I rise to indicate that the Green Party will be supporting this Medicines Amendment Bill, at least as far as the select committee, and will be very interested in the submissions that the select committee receives. Like other colleagues who have spoken in this debate, I am a member of that committee and will take a keen interest in what people have to say as, unlike some of those who have spoken, I am not that impressed with the degree of consultation that has occurred to date. I will elaborate on that in a moment.

The New Zealand health sector is facing a barrage of problems that will be driving up the need for health services. We have a growing population; more people need more services. We have an ageing population, and the evidence is pretty clear that the older we are, in fact the more health services we tend to need. We have a more diverse population, and different population groups bring with them different health needs that our system needs to respond to. As Iain Lees-Galloway has just been speaking about, we face a tsunami, a virtual tsunami, of chronic disease. And chronic diseases—diseases like cardiovascular disease, diabetes, depression, and many others—tend to bring with them very complex and enduring needs for health services. It is a more complex picture than even that, because people tend to have not just one of those diseases but several of them at the same time, which creates, in their interaction with each other, fresh needs.

We also have in this country an ever-widening gap between rich and poor, and there is extremely strong evidence that the pattern of inequality that we are seeing, of growing inequality, is itself driving even greater health needs. Inequality is probably the single greatest driver of health needs. Whether it is communicable disease or motor vehicle crashes, the pattern of inequality is the single greatest determinant of the pattern of health needs that we face.

So that is a pattern of complex and increasing health needs, and our system needs to respond to that. As Paul Hutchison has alluded to in his contribution to the debate, the ways in which we are able to respond to those problems are quite constrained. We have seen, certainly, new medicines and therapies being developed, and they are an important component of how we will respond to that need. New technologies more broadly than medicines are also an important contributor. In the House today there was a question from a New Zealand First member about the technologies available for people with diabetes, for example. It is an important question. We are also seeing increasing specialisation in our health workforce, so that in the profession of medicine, for example, we are seeing the discipline of general surgery becoming not just general surgery but sub-specialisations within general surgery. Colorectal surgery is now a specialisation, and a surgeon who is not a colorectal surgeon is going to be pretty iffy about doing colorectal surgery. Even within colorectal surgery, there is now some specialisation within that discipline.

Increasing specialisation is meaning that we are able to devote more specialised skill to a person’s particular need. But that in itself raises problems. It raises problems of the centralisation of health services to particular centres, because not every place is going to have the colorectal surgery that is required. For rural health services and provincial health services, in particular, there are some very particular problems of how we ensure that people that live in those areas get good access to the kinds of specialised services to which they are entitled as citizens. That is one of the defining problems and defining questions to which we must provide some answers.

All of that has got to be accomplished within reducing dollars in real terms. While certainly the Government has been putting more dollars into health services, those dollars have not been keeping pace with inflation, and that is a major problem. So it is appropriate that legislation in other parts of the regulatory framework for the health sector is overhauled to facilitate the responses of the health sector to those problems that I have described. Certainly, the description of the bill sounds great—you know, updating, modernising, improving effectiveness and flexibility, and reducing barriers. It is all good, is it not? Indeed, there are some aspects of the bill that are unquestionably good—for example, facilitation of electronic prescribing. Smart use of information technology is vital to increasing our efficiency of resource use and also reducing error and risk. That is something that is unquestionably good.

But there are other aspects of the bill that are not so clear. There is a new definition of “medicine”, for example. The new definition broadens the definition of medicines. I am pretty experienced in the sector, but I am not able to tell what that new definition is actually going to mean in practice. So I am looking forward to hearing what submitters have to say. What I fear is that by broadening the definition of medicines, we may actually be opening up some of the overreaching aspects of the previous bill that several members have alluded to. That overreaching is what caused the problems that led us to not be able to progress those issues at that time. So I am suspicious and interested to hear what the submissions say.

It is essential, given the crisis in our workforce—and we do indeed face a crisis—that we use the skill sets of all of the professional groups in our health sector to the maximum extent that we possibly can. I have had considerable experience of working with rural nurse specialists, for example, and these are highly skilled nurses with extremely broad experience and expertise who do an extraordinary job in isolated rural areas. And the areas that I know are those on the West Coast, of course. So using all of the skills of that professional group will result in better services to the people of the West Coast—was that my buzzer, Mr Assistant Speaker—and better services to rural and provincial people throughout the country. That is a critical component of what we need to do. Certainly I think other speakers have talked about the professional skills of pharmacists and using those to the maximum extent possible.

But I have some doubts. What, for example, is the point of a delegated prescriber, when we already have a regulatory framework in the Health Practitioners Competence Assurance Act? I do not get what the new category does in addition to what is already available, and I will be interested to see what that says.

On the consultation on the bill, I think there has been a bizarre choice of those to consult. Certainly the regulatory agencies, the councils, have been consulted, but I do not see there the College of General Practitioners or, indeed, any of the other professional colleges. The Medical Association, the New Zealand Nurses Organisation—some of the key organisations that ought to have been consulted have not been, and I am worried about that and keen to see what they have to say.

I am also, finally, worried about the rationale that is given for the bill—and I quote: “remove … unnecessary, ineffective or excessively costly” requirements. For me, that strikes a bit of a chill note, in that that is precisely the formulation that was used to justify all of the deregulation we experienced through the 1990s. I do not want to go there again, and I would be very interested to see what the submitters have to say at the select committee about that issue, too. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): Before the member speaks, I am sorry about the buzzer. It may need some medicinal help.

SHANE ARDERN (National—Taranaki - King Country) : The Medicines Amendment Bill is on its way, so I am sure that there will be a cure here somewhere. National is committed to delivering high-quality, modern public health services with tight budgets while reducing back-office costs. The Medicines Amendment Bill is another step in National’s drive for better, sooner, more convenient health-care. I have heard some of our opponents on the other side raise this issue, but before I address their concerns or their issues, can I say what a pleasure it is to be, once again, back on the Health Committee. We have Dr Paul Hutchison as the chair, Dr Jackie Blue, Dr Cam Calder, and me. I am not sure what my medical colleagues did to deserve that, but whatever it is, it is a pleasure to be back on the Health Committee again after a 13-year sabbatical.

It is 13 years since I last served on that select committee, and—guess what—13 years ago on that select committee we discussed the need for, and started addressing, a proposal to change the then prescribing law so that designated prescribers would be allowed to prescribe or issue medicines in certain cases. Certainly, the Nurses Organisation submitted to that process, if my memory serves me right, and said: “Look, most of the doctors know that the nurses actually come along and suggest to the doctor that this patient or that patient may benefit from this or that particular medicine.” Obviously their nursing and observation plays a role in the final prescription. The doctors themselves at the time were pretty confident that that could be carried out. So what has happened in the ensuing, I guess, period of time? Well, we had 9 years of Labour, of course. What happens when you have 9 years of Labour? Procrastination. Nothing happens. So here we are, all these years later, once again proposing these sensible changes.

It was interesting a few moments ago to listen to one of the other members of the select committee, Iain Lees-Galloway, from Palmerston North, talking about what people say while they are in Opposition and then do while they are in Government. I think it was his predecessor, the Hon Steve Maharey, who perfected the art of saying one thing in Opposition and doing another thing in Government, and was proud to pronounce it in this Parliament. I am sure that somehow or other the Medicines Amendment Bill got mixed up in that as well, and there were probably good ideas that were suggested by the member in Opposition, but they were not things Labour carried out in Government.

The proposed changes or the suggested changes in the bill that is to go to the Health Committee will bring about the opportunity for competent and professional people, such as nurses and various other medical practitioners, to prescribe—optometrists are another group that is suggested in this proposal. I am sure if you think about that for a few moments you will see many examples when people have been denied access. I am thinking of the rural sector—public health nurses and those kinds of people—where people are either suffering from a minor illness or are on palliative care suffering from more serious illnesses. The district health nurse or some other suitable person could potentially save either some further illness or some discomfort by having the ability to make a decision without having to go through a process, without fear of repercussions—although at a competent level—and make a decision as far as that prescription goes. So I am looking forward to the submission process in the Health Committee, ably chaired by Dr Paul Hutchison, and I look forward to hearing what the submitters have to say.

RICHARD PROSSER (NZ First) : I rise on behalf of New Zealand First and our health spokeswoman, Barbara Stewart, to speak on the Medicines Amendment Bill. New Zealand First will support this bill’s referral to select committee. It was a pleasure to read such a clear and concise regulatory impact statement as was included, because it made our consideration of the bill quite a simple matter, and the issues were very well defined.

Many people rely on medicines and medical devices to stay as well as they can, so it is logical to take some measures to streamline the legislation, particularly when innovations such as electronic prescribing and teleconsultations are becoming an accepted practice. These new approaches need to be accommodated, particularly as they become more commonplace and more widely accepted. It is fair to say that New Zealanders have adapted quite well, in general terms, to innovations and technology when it comes to their health considerations, as we do in many other aspects of life.

When we look at the Medicines Act 1981 and the Medicines Regulations 1984, it is very obvious that medicine and medical devices have advanced significantly over time, and that pace of change continues to accelerate. The number of advances in over-the-counter products such as contact lens solutions, eye drops, self-testing pregnancy kits, and nasal fluids mean that they cannot be considered to be medicines and should not really be classified as such. No doubt there are other things that should be included on this list, and will be; the submissions process, we hope, will identify those.

In fact, technology has advanced significantly over time, and it is inevitable that legislation and regulations will need to be amended to capture that advance. We want those advances to continue, as we are the recipients of the benefits of those advances. They enable us to be the best that we can be, and that is what life is all about. We want to see the definitions of “medical devices” and “medicines” aligned with international norms. We live in an international world, and basically we cannot afford to shut ourselves away in our corner of the world and ignore the international influences, particularly when we are so dependent on international developments in this area.

Likewise, the provisions relating to the licensing of medicine manufacturers and wholesalers and pharmacies are outdated. Where would we be, in fact, without trusted community pharmacies? They can provide a wide range of advice and remedies for ailments that are widespread in New Zealand—everything from head lice and wart treatments through to coughs, colds, and first aid for sports injuries, and everything else in between. We have all been there and done that. The pharmacies provide an excellent service, which many people do depend on. In fact, people attempt to self-medicate before coming to rely on those further up the food chain in the medical profession.

Pharmacists also provide a valuable professional service of a very high quality that is instantly available for everyone at usually little to no cost, apart from the cost of the product. Linked to this are advances that have been made in the training received by pharmacy staff. This has given pharmacy customers the benefit of the experience of a wider cross-section of those working in the pharmacy industry, making customers’ understanding of minor health problems much better and allowing them to more ably select self-medicating products. In the past we were often recipients of an in-house product that had been developed at the pharmacy itself, which was often better than any generic over-the-counter product.

The service provided by pharmacists and their staff is absolutely needed by the community and will continue to be needed, particularly in rural and provincial New Zealand, where access to health services tends to be restricted by population and geography. Looking at any community pharmacy around New Zealand we see that the service they give, and continue to give, to the community is outstanding, as it is right throughout New Zealand. If we need to improve the efficiency of the processes and accommodate new approaches with greater flexibility, then it logically follows that more streamlined processes will be required. Change is always a part of the landscape, and this bill recognises that fact.

New Zealand First is also interested in the provision aligning the prescribing framework for nurse practitioners and optometrists with medical practitioners, dentists, and midwives. In fact, we would have thought that this group of people would already have separate regulations within their scopes of practice that allow this to occur. We all know, and the public appreciates, that health professionals do have some basic prescribing rights. A visit to the dentist and the possible prescription of antibiotics, for example, at the time of treatment should not then also necessitate a visit to the doctor to obtain the required drugs. It appears that the legislation is outdated and needs modernisation if it is to work efficiently. There is little point in having a law that does not serve its stated purpose.

We note that the regulatory impact statement was also referred to by the Associate Minister of Health Peter Dunne and by Ms Street. It indicates that the proposals in the bill will be consistent with the framework of a joint Australia - New Zealand therapeutic products agency, should such an authority ever come into being. We are pleased that this bill does not advocate or advance such an agency at this time, because that is something that New Zealand First will oppose not because we are against ensuring the safety of therapeutic products that are brought into New Zealand but because we believe that standards pertaining to such safety and the dosages that are available to New Zealanders should be set solely in New Zealand and by New Zealanders, and not be dependent on any kinds of regulations determined in Australia.

All in all, however, we see a large degree of necessary good in this bill, and New Zealand First will support this bill’s referral to select committee. Thank you.

Dr CAM CALDER (National) : It is a pleasure to rise and have a brief call on this bill, the Medicines Amendment Bill. In 2008 the National Party promised that we would offer better, sooner, and more convenient health-care should we become the Government. This is indeed what has happened. We have got proof of that, and we heard the Minister of Health just this very afternoon outlining the success in increasing immunisation rates, increasing the number of people seen at accident and emergency more quickly, and, of course, the gold standard of starting treatment for diagnosed malignancy within a 4-week period—the global gold standard.

In my own area of interest, Manurewa, 3,000 more elective surgical procedures were performed—27,000 around New Zealand, with 3,000 of those in the local community. And, of course, a move is afoot to address the Third World levels of rheumatic fever; unfortunately, Manurewa is a hotspot in New Zealand for that. We are working on that with school nurses, and more will be rolled out in the future.

This bill is yet another way of addressing that promise of improving our health services that we deliver to the people of New Zealand. We are committed to delivering high-quality services and modern public services, and unfortunately we are in an area of tight budget constraint. We all know what those problems are, so we need to work more efficiently, and this bill will allow us to do so.

I am particularly keen on the expansion to nurse practitioners and optometrists of the designated authorised prescriber. That will free up and make more flexible the whole business of getting the medicines to the necessary patients more swiftly and more expeditiously.

I must say I regard it as a privilege to prescribe. My first degree was in medicine with a postgraduate qualification—an interest in oral surgery. That gave me the ability to prescribe within my scope, and then, in qualifying as a medical practitioner, that scope of practice was widened. And that is what we are allowing the nurse practitioner and the optometrist to do: to prescribe within their scope of practice.

But the other area that excites me is the delegated prescribing order. I have worked in general practice, I have worked in accident and emergency, and I have worked in hospitals. I can just imagine that many general practices where they have nurses within the clinic could form a framework wherein that nurse could see a patient and make the necessary prescription available to them. I am thinking of somebody coming in with a bladder infection.

There are many other areas that excite me about this bill. It is a brief contribution this time. I am privileged to be on the Health Committee, and I look forward to hearing submissions on this bill in due course.

RAYMOND HUO (Labour) : I rise to take a call on the first reading of the Medicines Amendment Bill. Labour supports this bill to go to the Health Committee. We are supporting this bill because it provides an opportunity to amend some specific provisions of the Medicines Act in order to streamline the legislation.

However, some important aspects raised by my colleagues the Hon Maryan Street and Iain Lees-Galloway, who both spoke this afternoon, are worth reiterating. This bill reminds us of two important phrases. The first one is “naked politicking” and the second one is “flip-flop”. Had National not flip-flopped on the issue of natural health products and opposed the Therapeutic Products and Medicines Bill, most of those amendments we are repeating now could have been passed in 2007. Many of the changes, as pointed out by the Hon Maryan Street, covered by the amendment bill were consulted on during the development of the Therapeutic Products and Medicines Bill and the select committee’s consideration of that bill.

Among other measures, the bill seeks to modernise the definitions of “medicine”, “medical device”, and “therapeutic purpose” to align the boundary between medicines and medical devices with international norms. The expansion of the regulation-making powers in the Act will help to provide for new standards and innovative practices such as electronic prescribing. These changes will support initiatives that are under way in the sector, including electronic prescribing pilots and the Safe Medication Management programme.

Labour supports a more comprehensive overhaul of the Medicines Act in the future, to modernise and recast the medicines legislation and to address issues such as the regulation of medical devices and cellular therapies and controls on advertising. Thank you.

DARIEN FENTON (Labour) : I am taking just a brief call to reiterate Labour’s support for the Medicines Amendment Bill to go to the Health Committee. I was interested in Shane Ardern’s contribution, actually, because he was the chair of the Government Administration Committee that considered the Therapeutic Products and Medicines Bill back in 2006 and 2007, and I was actually the deputy chair. I remember those events very, very well, so I find it very interesting that we are now here considering a bill that actually had the preparation, the foundation work, done under the Labour Government.

There were genuine concerns around the Therapeutic Products and Medicines Bill at the time, but they could have been overcome with a bit of genuine working together on it. But, of course, as we have heard from some of my colleagues, there was a whole lot of politicking that went on from National—a whole lot of, I think, rarking up the public about opposition to anything Australian. That was what it was about. It was about people feeling, you know, that they did not trust any kind of treaty with the Australians, even though we had actually signed up to this treaty in 2003, and it left our Government, and it still does leave it, in quite an embarrassing position.

I am enjoying at the moment—and I probably should not say this—seeing the opposition to the Food Bill, which the Hon Kate Wilkinson is having to deal with, too. It reminds me of the same kind of opposition that came to the Therapeutic Products and Medicines Bill—you know, kind of extreme on the one hand, and the Government trying to assure people that it is not as bad as they think it is. So there is this kind of “chickens coming home to roost” feeling about what is going on with the Food Bill.

Just in talking about the Medicines Amendment Bill, I think it is also worth reminding Parliament about where we were, when Labour became the Government in 2000, around the costs of medicine. If you went to the pharmacy, it would cost somebody $15 for one prescription—for one item on a prescription. It was $15 for one item, if you had two it was $30, and if you had three it was $45. It was prohibitive, and that had happened under the previous National Government. Of course, what happened after we had gone through terrible economic times and lowering wages, and all sorts of other things under the National Government, was that many families could not afford the medicine. What was happening was people sometimes went to the doctor and got the prescription, but they could not afford to go to the pharmacy and collect the prescription. So we had terrible things starting to occur in families where they could not get the basics. As we know, medicines are often preventive as well as a cure, but families were unable to get the preventative medicine that would stop something becoming quite chronic and sometimes stop people ending up in hospitals.

I also smiled to myself today when I heard Tony Ryall talking about visiting the Porirua Union and Community Health Service.

Charles Chauvel: To shut it down?

DARIEN FENTON: Yes, that is right—he probably went to shut it down. I did smile to myself about that, because, again, the only reason that service exists is that it was a Labour initiative. The whole primary health organisation model that this Government now likes to gloat about actually came from all of the work done by Labour. Actually, ironically, it is not called the Porirua Union and Community Health Service for nothing; it was started by unions to provide health care for low-paid, low-income workers at a time when they could not afford to see the doctor, let alone go to their pharmacy.

Hon Member: That’s because Labour cares.

DARIEN FENTON: Yes. There is a long history here, so I always find it very ironical when Tony Ryall and other people stand up and talk about all the wonderful things the Government is doing in health. Labour built the platform—Labour built a platform. We turned things round where it was becoming impossible. In fact, do you remember what National did in the 1990s, where there were cash registers at the hospitals? Somebody actually had to pay to be seen at the hospitals.

Michael Woodhouse: Somebody does pay, every single time.

DARIEN FENTON: What was that?

Michael Woodhouse: Somebody does pay, every single time.

DARIEN FENTON: But patients had to pay. Is the member advocating that we put the cash registers back? Is that what the member is advocating? He should tell us.

Charles Chauvel: He used to sit behind one of them.

DARIEN FENTON: Well, that is true—of course, he used to sit behind one of the cash registers. Just let us remember how far we have come in primary health care and medicine, and in pharmacy care, under a Labour Government.

Andrew Little: That’s because Labour cares.

DARIEN FENTON: And Labour does care; that is right. So that is why we find this bill pretty ironic. What we had in 2007 was a whole lot of politicking—convenient politicking—that went on from National, which was nothing to do with what was good for New Zealand or the relationship with Australia; it was nothing to do with that, at all. I sat on the select committee and I saw it happen; it was disgraceful. So I am pleased that this bill has come forward and will be going to a select committee, but so much of the work was done under a Labour Government. So much could be already in train. That has not happened, because of the politicking from National when Labour was in Government.

I also want to remind the House that the whole area of nurse practitioners was something else that Labour introduced. I sat on the Health Committee when that legislation was introduced, and was then followed by regulations. I think it was one of the most innovative things we did, because we all know that nurses are in the community and provide hands-on care, and why should they not prescribe?

But, of course, what we have is a health system under pressure. It is not just about what happens in the hospitals; it is about what happens in the community. What we are seeing is caregivers going on strike on Thursday morning because they get paid $13.61 an hour—11c more than the minimum wage. It is fine to talk about medicines and send this bill off to the select committee, but we have got some issues that this country needs to deal with and this Government needs to deal with. This Government needs to start taking the issue seriously, starting with those who care for our most vulnerable in our community.

Dr JIAN YANG (National) : First of all I must say I appreciate my colleagues on the Health Committee. We have quite a few doctors there. I am one of the doctors but I am not a medical doctor. I am a PhD, so I am still learning—

Hon Maurice Williamson: A real doctor.

Michael Woodhouse: Yes, a real doctor.

Dr JIAN YANG: A real doctor! As an immigrant, I appreciate, of course, the health system in New Zealand. Based on my experience in China, you may understand why immigrants like me would appreciate the health system in New Zealand. The Chinese have doctors. They are called Chinese medical doctors, whom we called lang zhong. They were not licensed doctors in those days.

In 1949, when the Communist Party came to power it, started to set up a new system we called barefoot doctors. Basically, we recruited educated young people to come to some kind of training and then we sent them to rural areas to make sure that peasants would have some kind of medical services from the Government. In those years, of course, the Chinese were poor. The Chinese Government was trying hard to make sure that the Chinese people would have some kind of basic medical treatment. It was very basic. The barefoot doctors walked through the countryside door by door and provided this very basic medical treatment.

In the end, of course, the Chinese people started to have more medical colleges and more and more qualified doctors. These days in China you will find many hospitals, but each hospital is always full, always crowded, simply because there are 1.3 billion people in China. It is a huge population. It is very hard to take care of all these people, although there are many doctors there. So what happens in China is that you have to have good connections to make sure you can be treated timely, and the Chinese Government has to make a huge effort to invest in medical services. Still, it is very, very difficult for many Chinese to get the proper treatment, unless you have a lot of money to buy better services.

In New Zealand, of course, the National Government is committed to delivering high-quality, modern public services within a tight Budget, while reducing back-office costs. We understand that we have done extremely well in training and in having more doctors and more nurses. The National Government has invested hugely and made a huge effort trying to increase the number of doctors and nurses. And we did, and it has been very successful. We all know that all New Zealanders deserve a public health service they can rely on, and with more doctors and more nurses we can do this. Now we give more power to nurses to prescribe medicines, and that will make things even better. We appreciate New Zealand’s health system but we can make it even better by reducing the paperwork and by giving more authority to nurses and other medical officers.

This Medicines Amendment Bill is another step in National’s drive for better, sooner, and more convenient health-care. We also must remember that we are going to have a larger population dependent on health care. In the next few decades the number could double. We cannot double our hospitals, nor can we double the number of doctors and nurses in New Zealand. Therefore, this bill is a creative way to improve our health system and medical system. Thank you.

MICHAEL WOODHOUSE (National) : In my very short call at the end of the first reading of the Medicines Amendment Bill I will resist strongly the temptation to debate the rewriting of history by my friend on the other side, Darien Fenton, in respect of the health care system.

What I do particularly want to just touch on and commend is the work of a friend of mine, Dr Andrew Bowers. He is a specialist physician at Dunedin Hospital and he has been running an electronic prescribing project there. It has made a dramatic positive impact on safety, particularly for in-patients at Dunedin Hospital, but the 31-year-old legislation that prescribes for prescribing does act as a constraint on that, so I am particularly interested in exploring the possibilities for greater flexibility around electronic prescribing. I look forward to the Health Committee’s report on that particular issue, which is one of many very, very positive changes to the Medicines Act. I look forward to seeing how the select committee goes. I commend the bill to the House.

  • Bill read a first time.
  • Bill referred to the Health Committee.

Hon PETER DUNNE (Associate Minister of Health): I move, That the Medicines Amendment Bill be reported back to the House by 2 July 2012.

  • Motion agreed to.

Corrections Amendment Bill

First Reading

Hon ANNE TOLLEY (Minister of Corrections) : I move, That the Corrections Amendment Bill be now read a first time. I nominate that the bill be referred to the Law and Order Committee. I would like to acknowledge at the outset the work of my predecessor, the Hon Judith Collins, in developing and introducing this bill.

The statutory purpose of the corrections system is to improve public safety and contribute to the maintenance of a just society. To achieve this, custodial sentences and orders must be administered in a safe, secure, humane, and effective manner. Overall, the legislation governing the administration of the corrections system is working well. However, some provisions have been identified as barriers to effectiveness and efficiency in the management of prisons, and the Corrections Amendment Bill has been introduced to remove such barriers.

The bill builds on a number of initiatives already put in place by this Government over the last 3 years. In the previous term this Government passed legislation to allow for prisons to be managed under contract to the Department of Corrections. This is expected to facilitate innovative and cost-effective practice in contract prisons and in the prison system as a whole. Prison security has been upgraded, which has led to decreases both in escape rates and in the number of prisoners testing positive for drugs and alcohol. Rehabilitation programmes in prisons have been improved, and the number of prisoners going through drug treatment units has doubled to ensure that prisoners with drug and alcohol problems address the causes of their offending.

Drug and alcohol use in prisons has already reduced significantly during recent years. When testing was introduced in 1997-98, 36 percent of prisoners tested positive for drugs—36 percent. In the year to date that figure has reduced to just 5 percent. However, we believe there are still too many prisoners using these substances. The amendments in this bill will help reduce the use of drugs and alcohol even further. Currently some prisoners water-load, which means they drink a lot of water to intentionally dilute their urine samples. This bill makes it a disciplinary offence to consume, administer, or supply any substance with the intent of diluting any sample and therefore avoiding detection.

I have also taken the opportunity to make the strip-searching procedure more effective. Currently some of the provisions relating to strip-searching are unclear or introduce unnecessary delays—for example, by requiring approval of a prison manager before strip-searching a prisoner reasonably believed to be in possession of an unauthorised item. The amendments in the bill will provide greater clarity and certainty as to when strip-searching must be undertaken, and on the process for doing so. This is expected to significantly improve the department’s ability to deal effectively with contraband in prisons.

Amendments in this bill will assist in achieving positive outcomes from the management of prisons under contract. Managers of contract prisons are expected to carry out all aspects of prisoner management. However, their ability to do this is constrained by the fact that the Chief Executive of the Department of Corrections cannot delegate powers and functions to the organisation that is contracted to manage a prison or to its staff. Just to give an example, the chief executive is unable to delegate two functions to the managers of contract-managed prisons that have been delegated to the managers of public prisons. These are the authority to allow the temporary removal or temporary release of a prisoner, and the power to approve private prison visitors. The changes contained in this bill will ensure that managers of all prisons, irrespective of whether they are contract or publicly managed, have the same authorities. Of course, appropriate checks and balances will be retained, including the current provision preventing the chief executive from delegating certain powers to a staff member of a prison. Importantly, delegating does not affect the chief executive’s ultimate responsibility for the actions of those acting under the delegation.

The bill will help to improve the quality of prison health services by aligning statutory responsibilities with the way the services actually operate. Current legislation places contracted part-time medical officers at the forefront in this organisation in the delivery of health care to prisoners. In reality, this key role is played by full-time health centre managers, who are registered nurses employed by prisons. The role of “health centre manager” will be recognised in law, while retaining the requirement to ensure that prisoners have treatment from medical practitioners when required.

Gaining work skills and a work ethic is an important part of preparing offenders for release back into the community. This bill will allow prisoners to gain self-employment skills—for example, in carving or other art work—and provides a transparent basis for this to happen, provided certain conditions are met. The money earned will be paid to the chief executive; some of this will be applied to the prisoner’s board and other payments, such as reparation and child support. The amendments in the bill will be supported by related amendments to the Corrections Regulations once this bill is enacted.

In conclusion, I want to ensure that front-line staff can manage prisoners without putting their own health and safety at risk, and without compromising the fair and humane treatment of prisoners. The changes in the bill will help to achieve this, and provide important support for the measures already taken by this Government to make the corrections system work more efficiently and effectively. I commend this bill to the House.

CHARLES CHAUVEL (Labour) : Could I begin by congratulating the new Minister of Corrections on her new portfolio and wishing her well in her tenure in the role. I agree with what she said about the importance of the sector. I was fortunate in my time in legal practice to have some connection with the Department of Corrections, representing it from 1994 through to 2006 in various court cases where the legality of actions of the department were challenged in various courts around the country. I had the opportunity to do that both when I was working at the Crown Law Office and in private practice, and over that time I got to see the culture changes that were going on in the Department of Corrections, from the mid-1990s—in fact, when it was still a part of the old Department of Justice—through to only 5 years ago. Those culture changes are encouraging, and I think they are ones that it is in the interests of every member of this Parliament to encourage and to support, because, as the Minister said, we do want a system that not only contains people securely where that is required but also, and much more importantly for the long term, deals effectively with habilitation and rehabilitation. Certainly that is something that I very much want the system to continue to re-gear to do, and to achieve that much more quickly than we have been able to see so far.

The legislation before us, the Corrections Amendment Bill, is something of a mixed bag, and the proof of that is the fact that there are five different regulatory impact statements on the legislation because there have been five different Cabinet papers leading to the legislation that we are considering today. There are some sensible measures in the bill. The provision that will deal, for example, with the self-employment of prisoners is one that it would be very difficult for anybody to argue with. That should be put on a secure footing. The whole inmate employment scheme has been a success, and it is one that, again, receives support from this side of the House.

But there are provisions in the legislation that are of concern. The Minister, in her speech, mentioned the provision of health services in our prisons. She said that there would be some changes made to the way in which those services are provided. Well, the problem that Labour members have with the provisions in the bill concerning health services is that they seem to run quite counter to the recommendations of a very recent report of the Office of the Ombudsmen on the provision of health services in prisons. In the Investigation of the Department of Corrections in relation to the Provision, Access and Availability of Prisoner Health Services the Ombudsmen said that taxpayers would actually get much better value for money if prison health services were delivered by an external health agency, under the aegis, for example, of the local district health board, rather than by the Department of Corrections itself. But this legislation puts the responsibility for the provision of health services on to employees of the Department of Corrections, rather than on to medical officers—that is, in exactly the opposite direction to the move proposed by the Ombudsmen. So Labour members, accepting that the Government is likely to have the support needed to send this legislation to a select committee, will want to have a look at that provision with particular care and detail at the select committee.

Another provision that is of concern relates to the restraint of inmates in mechanical restraints. At the moment the law says that a visiting justice has to approve keeping an inmate in restraints for more than 24 hours. That provision would go under this legislation, as I read it, and there would be a provision allowing a medical officer in the prison to certify that for reasons to prevent self-harm, for example, an inmate could be kept in mechanical restraints for longer than 24 hours. Again, at the select committee I think it will be very important to ensure that there are sufficient safeguards in respect of that provision.

Back on the issue of medical services in prisons, the bill removes the requirement that there be a medical officer appointed to each prison, and the replacement provision reads that there should simply be “a sufficient number of medical officers to meet prisoners’ needs for medical care and medical treatment.” I would be concerned if at a smaller prison like New Plymouth, for example, the effect of that was that a medical officer would not have to be actually resident or based in that location, but able to serve in Whanganui, for example, and act at a distance. I think, again, it is the sort of thing that the select committee will want to take a good, long, hard look at.

There were, as I say, other provisions that caused some concern to members on this side of the House. The Minister mentioned in her speech increased powers relating to strip-searches.

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

CHARLES CHAUVEL: When I was speaking before the dinner break, I was making the point that under the bill there are increased powers in respect of the use of strip-searches, searches of prison cells, opening inmates’ mail, and submitting to drug and alcohol tests. I was making the point that Labour members will want to be assured at the select committee, should the matter get to that phase, that there are sufficient safeguards in regard to those powers, because, as we know, necessary powers may be conferred but there always have to be adequate protections when they are in existence. It is particularly important to make this point because the regulatory impact statement notes that permitting mandatory strip-searches is likely to result in only a small increase in such searches. The Ministry of Māori Development objected to the proposal’s inclusion, because it felt there was not a compelling case for the change. Indeed, the Minister conceded in her speech that there was unlikely to be much of a call on this power. She noted that there had actually been a decrease in drug and alcohol use in prisons, so it is going to be incumbent on the Government to justify those provisions.

I said earlier in my speech that this bill contained a mix of some reasonable provisions, some questionable provisions, and one or two provisions that we had major problems with. The one or two provisions that I want to deal with in conclusion are those provisions. Labour does not believe that core State responsibilities currently discharged only by the chief executive of the department and his staff should be delegated to contractors and their staff operating private prisons. This is especially the case when it comes to core State functions such as deciding to change the security classification of an inmate, or the temporary removal or release of inmates from prisons. Those powers—the power to decide whether a person is minimum security, maximum security, or otherwise, and whether he or she should be able to get out of jail for a period of time—are powers that are fundamentally appropriate to be exercised by the State through an employee of the State, the Chief Executive of the Department of Corrections, subject to all the accountabilities that we know of—accountable to the Minister, who is accountable to this House; accountable to the State Services Commissioner when something goes wrong, instead of to the as yet untested accountabilities that apply when the private sector is conducting powers and functions under this Act.

This is the power that really concerns me. Extending the ability of a State sector employee to grant delegations outside the State sector is virtually unprecedented in our law. This is the first time that I can think of where there is a legal context where it is proposed to do that. Where it is being done without the protections that I described—and without the Official Information Act, without the oversight of the watchdogs that apply to the Department of Corrections—then we should be very concerned, indeed.

Labour believes, and has always believed, that the running of our prisons, the responsibility for that, lies with the State, because corrections is one of the core functions of Government. The Government has a moral and a fiscal responsibility to taxpayers to rehabilitate prisoners, because the safety of the community depends on it. It is inappropriate, fundamentally, to delegate this responsibility to an entity that is driven by profit, and that therefore benefits from an increase in the prison population. For goodness’ sake, if we have learnt nothing else from the Californian experience—and it would appear that we have not learnt much, given that we passed a three-strikes law in the last Parliament—we should have learnt at least that. The proposal to delegate powers that should remain with the State, especially without safeguards around the delegations, is the chief reason why the Labour Party will be opposing this amendment bill.

JACQUI DEAN (National—Waitaki) : Thank you—

Chris Hipkins: This’ll be good!

JACQUI DEAN: This will be good, because I will start off with the context of the Corrections Amendment Bill. The context of it is that since National came into Government, prison performance is improving. I think that is something that is to the credit of the previous Minister of Corrections, Judith Collins, and now following on very strongly with the current Minister, Anne Tolley, who is the Minister in charge of this bill.

I think it is worth perhaps rehearsing that public confidence in the corrections system—that is, how the people, our people, feel about the corrections system—is 53 percent higher than it was under the Labour Government. Public perception of how the corrections system is performing has increased by 53 percent. It is also worth noting that positive random drug-tests of prisoners are at their lowest. Again, that is under the stewardship of a National Government.

Interestingly, also, because prisons under this Government are not just about punishment but about turning prisoners’ lives round and providing them with opportunities for when they get back into society, it is really heartening to see that prisoners achieved 108,000 New Zealand Qualification Authority credits in literacy and numeracy in the year 2010-11. That is fantastic news, and that is the kind of work that the National Government is doing for our prison population in New Zealand.

Furthermore, prisoner escapes are at their lowest ever. That is a figure that is a reflection of the high regard that successive Ministers under the National Government have held corrections staff. It has made a difference. This Government backs corrections staff and it is making a difference in how they perform their duties. They feel valued and their work is being reflected in these statistics.

This bill is intended to reduce some of those barriers to effectiveness and also to efficiency in prisons. The previous speaker, Charles Chauvel, made a couple of points, and I just want to perhaps have a look at some of those issues that were raised by the previous Labour speaker. The first one is about new section 19A on health centre managers—if that member has looked at the bill yet. What it says is that for every prison the chief executive must appoint under the State Sector Act a health centre manager. In practice, that health centre manager will be a registered medical practitioner or a nurse. I am guessing that mostly it will be a nurse.

When I visited Milton prison perhaps 18 months ago, I met with that nurse, because I was interested in the treatment of a particular prisoner. It was very interesting to go into that unit at Milton prison to see that that nurse had an ongoing relationship with not only the prisoner I was interested in but also the general prison population. I think this new section strengthens the standing of the health centre manager within our prison service. I see that as a good thing.

The other thing, if the member cares to have a look at new section 20 on prison officers, is that for every prison there must be a sufficient number of medical officers to meet prisoners’ needs for medical care and medical treatment, and that, of course, each medical officer must be a medical practitioner. In the case of the prisoner whom I was approached by and whom I was interested in, what happened was that there was an episode of abdominal pain lasting over a couple of days. That prisoner was checked on by the medical staff on a regular basis, taken into the health centre and then, when it was judged that maybe it was appendicitis, that prisoner was taken off and put into the hands of the district health board. It had a happy ending: the prisoner was well cared for and he was secure at all times. I happen to think that the provisions in this bill will not only strengthen that procedure but also make it a whole lot easier, both for the prisoner and for the prison staff.

I also want that member on the other side of the House to have a look at clause 25, regarding the restraint of prisoners. If that member had read that clause carefully, he probably would have seen that there are a number of safeguards written into this bill. In fact, they will improve the safeguards on behalf of the prisoner, not just on behalf of the prison service. They will actually safeguard the interests of the prisoner.

So what it says, for the benefit of the members opposite, who probably have not looked at this clause, is: “A prison manager may authorise the use of a mechanical restraint on a prisoner for more than 24 hours only if, in the opinion of a medical officer,”—and I think that is the key point in here; the opinion of a medical officer—“continued restraint is necessary to protect the prisoner from self-harm.” This is not a punitive clause; this is to protect a prisoner from self-harm.

I had to think about this a little bit, because I heard the objection coming across from the other side of the House. I had to think: “Where is the problem?”. I do not see the problem, because I think this is a clause that is there to protect prisoners from self-harm.

I think you have to recall what happened previously. Previously, under the current Act, in those circumstances the prison manager had to go outside the prison to a justice. The decision about whether a prisoner was mechanically restrained was a legal decision, and now under this bill the decision will be a medical decision. To me, that is quite smart thinking.

The next thing you may well be thinking about is where the safeguards are. Well, the safeguards are still in clause 25, but if you have a look at new section 87(5A), you will see those safeguards are that an authorisation by the medical officer needs to “(a) be in writing; and (b) specify the type of restraint to be used; and (c) specify the time during which the prisoner is to be kept under restraint; and (d) include a record of the medical officer’s opinion that the restraint is necessary to protect the prisoner from self-harm.”

So, yes, let us have a look at these two clauses in the select committee process, let us call for submissions on these two and many other clauses in this bill, and let us have a good look at them. But on the surface of it and on the first reading of it—and I will be giving this due consideration, as will we all in the Law and Order Committee, and as will my colleagues from throughout the House—I think that perhaps the member’s misgivings are a little bit unfounded.

I want to move to one of the clauses in the bill with regard to strip-searches. We all know that contraband and drugs are a problem in prison, albeit that under this National Government that problem is—

Hon Anne Tolley: Much less.

JACQUI DEAN: —much less, and we are getting it under control, but it too is addressed in this legislation. I will have to flick through the bill, because I am relatively new to it myself, but strip-searches—[Interruption]—gosh, is that really 8 minutes?—are defined in clause 26 in the bill.

Chris Hipkins: Feels like longer.

JACQUI DEAN: You want more?

Hon Members: No!

JACQUI DEAN: Oh yes, you do. The members do, I beg your pardon.

The previous speaker referred to the regulatory impact statement. I think it is worth having a look on page 4 and noting that “the legislation will continue to require that the details of ‘reasonable grounds’ strip searches must be promptly reported to the prison manager … who must ensure that a record of that report is made and kept …”.

So they are pertinent questions to be raised in this House by other members, and I can assure the House and the Minister that the Law and Order Committee will give these and all the other issues contained in this bill serious consideration. I commend the bill to the House.

KRIS FAAFOI (Labour—Mana) : Taloha ni, Mr Assistant Speaker Robertson, and thank you for the opportunity to speak on the Corrections Amendment Bill in its first reading. It is a bill that we on this side of the House will be opposing on the principle that we disagree that private prisons should operate here in New Zealand. Our thoughts are that it is the role of the State to incarcerate and to rehabilitate. We do, though, believe that this bill will make its way to the Law and Order Committee, and we welcome the opportunity to look at some of the measures that are contained in this bill and that we think are not as negative as having private prisons in New Zealand. That is what I do want to spend most of my time on: the question of who imprisons—whether it should be the State or a private firm. Charles Chauvel, the previous speaker from the Labour side of the House, has made many, many points as to why we are opposed.

The first one that I would like to bring in is that I do not think that in a society like New Zealand we should be having companies that operate prisons making profits out of incarcerating people who are charged by the State, who are tried by the State, and who are sentenced by the State, and then at the final point in the justice system, where they are sent to jail, all of a sudden they can find themselves in a prison that is not operated by the State. This legislation will actually give private firms that run some of our prisons more power to determine what kind of security level the prisoners are at. As Charles Chauvel said, we believe that that function, which is with the Chief Executive of the Department of Corrections, should not be delegated to anyone other than someone who has a very close link to the Department of Corrections via the chief executive. We do not think that someone who is a paid professional and who has the motivation of making a profit should be able to deem who is a minimum-security prisoner or who is a maximum-security prisoner.

I actually visited a couple of private prisons in Australia when this issue was being looked at in the early 2000s, as part of my role as a journalist. When we spoke to some prisoners who had spent some time in both a State-run prison and a private prison we heard that they had noticed marked differences between State-run and privately run prisons in terms of the rehabilitation programmes that were run. I believe that it is our duty to the community to make sure that we are having decent rehabilitation programmes within our prisons, to ensure that these prisoners are not reoffending when they are eventually released.

There are also a number of other measures in this bill that we will take a close look at. One of those is around the provision of health services to inmates. We note that an Ombudsman report released earlier this month noted that the onus of the provision of health services should be moved away from the Department of Corrections and on to a health agency. That is from our Ombudsman, but within this bill exactly the opposite is happening. It is putting the responsibility for the provision of health care fairly and squarely on the Department of Corrections. As Charles Chauvel said, during the select committee process that we anticipate we will be having a very close look at why the Government is heading in completely the opposite direction around the provision of health care services.

The previous member of the Government who spoke on this bill, Jacqui Dean, mentioned the extension of the powers around 24-hour restraints. We will also look forward to debating that fully at the select committee stage. She mentioned a couple of measures within the bill that she said negated our criticism of this move, but we still think we need to have a good look at the reasons why prisons will no longer need a justice to come and take a look at the situation if the Department of Corrections wants to extend the use of mechanical restraints beyond 24 hours. We think that that was a reasonably common-sense safeguard prior to this bill coming into the House, so we will be looking forward to being able to debate it at the select committee, which of course is chaired by the member who spoke previously.

There are also increased powers under this bill in respect of the use of strip-searches, searches of prison cells, the opening of mail, and submitting to drug and alcohol tests, and Labour wants to be assured that the safeguards exist in respect of these powers, especially in privately run prisons. If we are extending some delegations from the chief executive in one area, we want to make sure there are safeguards in this area, where we are extending the power of officers in our prisons, and that there are sufficient safeguards when they are being given more powers in respect of strip-searches, searches of prison cells, opening mail, and submitting to drug tests.

Back to the first argument I made, and the question of who is responsible for prisons in New Zealand: I am not sure of any polling that has been done, but I would think that most people would think that if citizens are charged, prosecuted, and sentenced by the State, it is the State that has the responsibility to carry out the incarceration and the rehabilitation of those prisoners. We do not feel that it is the role of private business to come into this sector and to look to make a profit out of those who have committed crimes in our community. We also think that because of the profit-making motivation of these private companies, it can actually end up with perverse outcomes. Charles Chauvel talked about the Californian experience previously, where there were cases of judges sending people to prison on the understanding that they would get money because of the higher incarceration rates. We do not think that we here in New Zealand should open ourselves up to that kind of thing. I am not casting aspersions on the judiciary but it does open up the potential for perverse outcomes, when you are looking at making profits out of our prison system.

There are also a number of things in this bill that we think do merit some further investigation at select committee, but we also think that in this case maybe it is another case of legislation from this Government that is not practical. I know that Jacqui Dean released some figures that around 53 percent of people perceive that the Department of Corrections is operating much better under a National Government. But we do believe that this may be another case of where it is actually not practical, in terms of what this bill is trying to achieve. The National Party is using this more as a plaything in terms of law and order to make sure it is looking tough on law and order issues—looking tough but not actually taking real action. We believe that if we are going to try to look tough on law and order, then trying to do that by opening up more and more operational activities to private companies in the prison sector is not the way to go about it.

So we will oppose this bill, on the principle that we do not believe that it is the right thing here in New Zealand, in our society, for private prisons to operate, firstly, because we do not believe it is the role of private companies to incarcerate—we believe it is the role of the State—and, secondly, because we do not believe it is right and proper that companies make a profit from the incarceration of New Zealanders. It is our responsibility as a State to rehabilitate inmates, and as I mentioned earlier, in my experience with the Australian prisons the rehabilitation aspects of the private prisons that operate over there were probably not as beneficial to the inmates as they were in the State prison system. We will oppose this bill on the principle of our opposition to private prisons, but we will look forward to some further investigation of some of the other measures contained in the bill at the select committee.

DAVID CLENDON (Green) : Tēnā koe, Mr Assistant Speaker Robertson. This Corrections Amendment Bill is another in a long string of corrections bills that we have seen from this Government. The last term saw a number of corrections bills move through the legislative process and pass into law that were extremely unhelpful in terms of reducing crime, reducing recidivism, making our communities safer, and reducing the economic and social costs of crime. We saw, for example, the three-strikes legislation, and the introduction of private prison management—

Hon David Parker: From Mr Garrett.

DAVID CLENDON: —from our departed friend Mr Garrett. We saw the gratuitous removal of prisoners’ right to vote. We saw the double-bunking, and the conversion of shipping containers into accommodation for two prisoners at a time. All of these measures revealed a Government apparently in thrall to the very vocal, but equally misguided, minority in this country who believe that somehow we will achieve our objectives through longer and tougher sentences.

All the evidence and the research tell us that most New Zealanders understand very well that that is not the route to a safer community. New Zealanders are much less interested in punishment for its own sake. New Zealanders want to see policies and practices that will reduce the social and financial costs of crime, and that will make people feel safer in their communities. We know that all but a handful of the most serious offenders will ultimately be released back into society. We want to see those people fit to re-enter society, with a positive contribution to make and an attitude that will enable them to break out of that cycle of offending and reoffending.

Any hope that a new term of Parliament and indeed a new Minister of Corrections might perhaps see a somewhat more enlightened and progressive approach to corrections would seem to be dashed by this bill, which again does reflect a particularly unpleasant, punitive approach to the whole question of corrections. The stated aim of this bill is to remove “barriers to managing prisons in a manner that is safe, secure, humane, effective, and efficient.” I would argue that there are provisions in this bill that almost guarantee that we will fail in achieving any of those objectives. We will not achieve one single one of those, given what is concealed in this bill. To the contrary, this bill takes away from inmates some very basic human rights, such as protection from abuse. It provides prison officers, perversely, with an incentive to step outside good professional conduct. It makes them more vulnerable to accusations of misconduct. It provides incentives for prison managers, and in particular the private sector managers, to reduce prisoners’ eligibility for, and therefore access to, rehabilitation and reintegration programmes. Again, this is at odds with our stated objectives.

It is difficult to see any redeeming feature in this bill. We see it as requiring a complete rewrite. We do not think a simple amendment would be sufficient, and for those reasons we will not be supporting the bill’s progress to the select committee.

The bill makes significant changes to the provision of health services in prisons, in a way that seems more driven by issues of cost savings and convenience than a genuine concern for the well-being and health of prisoners. It is well known that prison inmates typically come with very high health needs. Due to lifestyle, environmental factors—a host of reasons—prisoners are susceptible to illness, and their health status generally is below that of the general population. This was very well encompassed in the report from the Ombudsman that we have heard referred to already, which came out just a week or so ago. To be fair, there is an acknowledgment in that report that prisoners currently have reasonable access to health services. It also points, however, to some significant shortcomings in health care, and warns us that “in future the service may not be able to effectively meet the healthcare needs of the diverse prison population.” That is a red light. That is a warning bell from the Ombudsman—a disinterested, objective observer—telling us we need to address health-care issues in prisons. Unfortunately, this bill does that, but it does it in a way that to our mind actually takes us some steps backwards, rather than moving forward.

The bill seeks to downgrade the service—the status of the service, if you like—by taking overall responsibility for health services away from medical officers—in other words, medical practitioners—and instead delegating it to health centre managers, who may be nurses directly employed by the Department of Corrections, or in some cases contractors in the case of private prisons. This runs absolutely at odds with the recommendation of the Ombudsman, who says “Health Services … should be funded and delivered by an agency whose primary focus is health and therapeutic support, not custodial.” That reflects and echoes the recommendation of a report from 2010 of the National Health Committee, entitled Health in Justice, which again advocated very strongly for putting health services into the hands of an external agency, not leaving them in the care of the Department of Corrections. We would not put the department in charge of health; nor would we put the Ministry of Health in charge of custodial practices. Why would you do that?

The current legislation states quite clearly that there must be at least one medical officer—that is, a qualified medical practitioner—in every prison. This new bill, in new section 20, set out in clause 8, says that “For every prison … there must be a sufficient number of medical officers to meet prisoners’ needs for medical care and medical treatment.” The obvious inference from that is they may number less than one, and that may be deemed to be sufficient. Are we suggesting a part-time medical officer; someone with responsibility for a number of prisons? Are we suggesting a person less well qualified than a medical practitioner to look after the significant health needs of often quite large numbers of inmates? That is a very subtle but a very dangerous provision, we believe. A minimum of one is being reduced to this very vague, ill-defined, amorphous notion of sufficiency. Again, this would point to a cost-cutting approach. We know, and experience has told us repeatedly, that short-term cost cuts in health care, be it in prisons or anywhere else, inevitably lead to longer-term social and indeed economic costs further down the track.

Again in the general area of prisoner health, currently prisoners have a minimum entitlement to 1 hour of exercise every day, ideally taken outside if weather permits. This bill takes away that minimum provision—that minimum entitlement to 1 hour of exercise. In the event that a prisoner is outside the prison, particularly through the normal working day, if you like—8 to 5—the prisoner can be denied access to exercise if, for example, he or she is being transported that day, or if he or she is in court for a hearing for whatever it might be. There seems to be no limit on the number of times the denial of this minimal entitlement can be applied. Conceivably, a prisoner who is in court for a number of days could go several days without physical exercise. Those of us who, in a different way, are imprisoned in this House on occasion know very well the value of exercise to people. Lack of exercise for prisoners could lead not only to less than ideal health but also, certainly, their attitude, their mental well-being, can be negatively impacted by that denial of that basic minimum entitlement to 1 hour’s exercise.

We note also with some concern that a health centre manager may now prescribe a special diet for a prisoner. Currently, it is only a medical officer who may prescribe a special diet. Again, these are all examples where the prisoner’s well-being is being just slightly nibbled away, nibbled away, and the net result, the cumulative result, could be quite serious in terms of prisoner health and well-being and the general safety not only of the inmates but also of the staff and people in those prisons.

There is the issue of the right of a prisoner to appeal their security classification. Currently, that will be determined by the chief executive, a very high-ranking public servant directly answerable to the Minister. It will now be possible for a person employed by a contractor to be in the role of making that call as to the security classification of a prisoner. Charles Chauvel has outlined the constitutional concern around that. A much more practical concern, equally, would be that the private providers, in particular, will be motivated towards assigning a higher, rather than a lower, classification, for reasons of cost saving. They are more secure if the prisoner has a higher classification. The likelihood of them suffering the fate of Serco recently—a $150,000 fine for allowing a prisoner to escape—would be reduced. The eligibility of prisoners for programmes such as te Whare Ōranga Ake would be removed if they have not got the minimum classification. This is an absolute motivation and incentive not to take a very small risk of giving those prisoners the classification that allows them access to these programmes, which give them a much better likelihood of success in the community. Thank you.

JONATHAN YOUNG (National—New Plymouth) : I am very pleased to stand and speak on the Corrections Amendment Bill, which contains 50 legislative amendments that are aimed to improve the effectiveness and efficiency of our corrections system. I am very pleased to hear my colleague speak about the advancement and the improvement of the corrections system under this National-led Government. We know that in February 2009, just months after the change of Government, following 9 years of the previous administration, the Auditor-General published an independent performance audit report: “The report concluded that the cumulative effect of the levels of non-compliance with Department of Corrections’ … procedures undermined the Department’s ability to protect the public.” We have seen over these last 3 years many, many improvements in its compliance and in what it has done to protect New Zealanders, so much so that positive random drug-tests of prisoners are at their lowest, as my colleague said.

Public confidence has increased by 53 percent—it is not at 53 percent, but it has increased by 53 percent. Prisoners have achieved 108,000 New Zealand Qualifications Authority credits in literacy and numeracy. So there are many programmes being undertaken in our corrections facilities that are bringing some very positive changes to the prisoners’ lives and also to the safety of those who are instructed to run those facilities.

We all know that the vast majority of inmates who are in prison will one day re-enter society, and it is a challenging goal to assist prisoners to re-enter society successfully. It is true that this can be quite a challenge if a prisoner has a drug habit or is an alcoholic. These addictions contribute significantly to the mental health issues that many prisoners have. Therefore, having laws and regulations that effectively assist corrections officers to detect drug taking is incredibly important for the physical and mental well-being of the prisoner, for the safety of corrections staff, and for the improved ability for a prisoner to be able to reintegrate into society once they are released. Prisoners who become free from drug and alcohol dependency, and all that that fosters in their lives, will be less violent in the society that they re-enter.

So overall, the current legislation provides a sound framework for our corrections system, but there are some amendments in this amendment bill that are going to bring further tools. For example, it is going to make it an offence for prisoners to water-load before drug testing. For those who may not know what that means, simply, it is the extensive intake of fluids to dilute a prisoner’s urine prior to taking a drug test. That will become an offence, and when prison officers do this drug test, they will be able to detect drug taking. Once drug taking is detected, they can then put in programmes to help that prisoner come off dependency. That is a very important aspect of the prisoner’s rehabilitation process.

Another aspect of this amendment bill is that it will allow prisoners to work—in a sense, be self-employed—in a prison facility. At the moment there are currently no provisions in the Corrections Act that expressly provide for prisoners to be self-employed in prison or that allow deductions to be made from moneys earned by a prisoner from self-employment while they are in prison. Apart from reducing the cost to the taxpayer by having a prisoner contribute to his or her board, and also contribute to reparation or childcare, these savings are important for the taxpayer—we know there is an incredible, ballooning cost to the Department of Corrections—but it is also important because it is starting to bring in the responsibility of a prisoner to contribute to the aspects of his or her life and the consequences of what he or she has done, whether that be by paying reparation or childcare.

We live in a society where skills are essential. Low skills equals low income, and getting an education and skills training is imperative for people to become socially mobile. As I said before, prisoners achieved 108,000 New Zealand Qualifications Authority credits in literacy and numeracy in 2010-11. There is a very strong programme to lift educational skills in our prisoner population. Added to skills building, developing a strong work ethic is an integral part of building a positive self-esteem that, once again, works towards a successful reintegration. So there are many aspects of this amendment bill that are going to work very positively for our prisoner population—positively, not only for their sense of well-being and their health in a prison facility but also, as they leave that facility and become integrated into society, they will be free from drug and alcohol addiction, and they will have some skills, some self-esteem, and a work ethic that these amendments will enable to be built. It is going to be something very positive for these people. Thank you.

LE’AUFA’AMULIA SENATI LOLE-TAYLOR (NZ First) : Malo, fa‘afetai lava. I am pleased to speak for the first time on behalf of New Zealand First on the Corrections Amendment Bill. New Zealand First has, and will always, put the safety of our community as a priority, as well as supporting law enforcing officers and staff to carry out their roles effectively and efficiently. With the dramatic increase in the drug supply and the severity of assaults on corrections officers and staff in recent years, we acknowledge the need for prevention.

The supreme function of the Parliament is to ensure that self-interest and the evils that come with it are contained. It has been said that enforcing the rule of law and maintaining public order are inseparable and that they form the bedrock of a civilised society and sound liberal democracy. There are two fundamentals involved in this quote. The first is enforcing the rule of law. In this case, it is the way in which the Department of Corrections implements and interprets the law through the way it operates, using its operational manuals. It also applies to the way it deals with prisoners or offenders, both those in the custody of the prison services and those under the supervision of the community probation services.

The second is maintaining public order. This would apply to increasing public safety, as well as the safe and humane containment of prisoners. In the case of community service, it would be with the safety and appropriate application of monitoring processes for offenders and staff in order to reduce reoffending through comprehensive and suitable rehabilitation programmes. We can have neither without the right and relevant bills and legislation passed within Parliament. It is therefore imperative that this Government produces the best possible outcomes regarding our increasing crime statistics.

There is a constant battle with these statistics and it is time Parliament initiated serious solutions and prevention. Most discussions of a bright future, particularly in today’s society, rely on a smiley face and giggle as an appropriate response to all difficult questions, particularly those around the safety and security of our community, although education and assets are part of that list as well.

This Corrections Amendment Bill more or less formalises what has already been implemented as part of the prison service daily routine. I know this. I spent the last 6 years in the Department of Corrections as a regional adviser. You may call it exercising common sense, which, unfortunately, is something that is not very common in the way the Government operates at the moment. But it is important that those corrections staff on the floor ought to be recognised for their ability in applying discretion and good judgment where warranted.

It is about time that the Corrections Act was amended in order to address so many loopholes it has had for so long. Improvement to the way health services operate at prison sites is long overdue, and, yes, this Government has finally got something right. Why it took so long—who knows? Perhaps the Minister of Corrections needs to have a cup of tea with the right stakeholders, who know better, without inviting the media. Often decisions have been made by those who sit in their ivory towers without any knowledge or awareness of how things work in the real world in the prison service or the prison sites or even the community probation services. The Minister would do well to seek input, especially from those staff who work on the floor, because they know what works and what does not.

As for the contract management of prisons, I notice in the bill—clauses 16, 17, and 18, and also from clauses 42 to 45—that those amendments should have been introduced before private contractors were engaged for the contract management of prisons. It is astounding that these amendments are introduced almost 2 years after the engagement of Serco as a private contractor to manage the Mt Eden Corrections Facility.

There is no question that New Zealand First supports some improvements that this bill will make. At the same time it is also important that suitable training programmes for corrections officers are developed in order to facilitate better enforcement. The amendment bill will also do well in providing a clear process for the area of prisoners claiming lost or stolen property. There are many thousands of tax dollars and working hours wasted on processing prisoner property claims. Many of these claims are spurious. There should be clear regulation laid down to define liability. Where a prisoner has been issued property, he or she has the care and control of their property. There should be no avenues or recourse if this property is lost, traded, or stolen once issued. A substantive amount of these claims are made when prisoners deal with each other. This is called trading and we know that it is illegal and difficult to detect. There is a significant number of hours taken up in investigating these claims. These hours could be used for the maintenance of safety and security in our prisons. The Corrections Amendment Act 2005 failed to address this and now we have this amendment that has also failed to address that.

I am furthermore baffled about consideration for the reintroduction of sections 33 and 34 of the old penal institution legislation of 1954, which was replaced by the Corrections Act 2004 and then by amendment in June 2005, to remove the power of adjudicators and visiting justices to prescribe the loss of remission as a penalty. This section would have given the power to a visiting justice or adjudicators of the corrections facility to apply, and if the inmates—prisoners and offenders, as we now call them—under the section were proven guilty of offences such as assault on a prison officer, he or she may have had imposed certain disciplines named in section 3(a), which is “Loss of Remission on Any Sentence”. This would have meant that offences by prisoners towards prison officers could be dealt with within the corrections system and a no-nonsense message would have been clearly given to prisoners or offenders. It worked when it was in place and I unarguably affirm its importance in this case.

I found it interesting to hear Jacqui Dean mentioning her view of turning prisoners’ lives round. That view should reflect in the way they rehabilitate the prisoners or offenders. Unfortunately this amendment does not take that into account. I question whether this amendment effectively caters for the second-highest ethnic group of the prison population, which is those from the Pacific. The bill does not give any serious consideration for provision of appropriate and suitable rehabilitation programmes for Pacific prisoners, despite the introduction and establishment of the Vaka Fa’aola Pacific Focus Unit at the Spring Hill Corrections Facility. For so long the Department of Corrections relied on one Pacific criminogenic programme, Saili Matagi, which is just a tick in a box, because this programme only takes up to 10 participants at a time and with its criteria it is rather restricted to those with a violent criminal offence or violent criminal background. Furthermore, the local Pacific community service providers who are keen to be involved with the rehabilitation and reintegration of the Pacific prisoners and offenders are not being effectively engaged to assist with the successful reintegration of Pacific offenders. Yes, let it be noted that New Zealand First is in support of this amendment bill to go to select committee.

IAN McKELVIE (National—Rangitīkei) : It gives me great pleasure to speak for the first time on the first reading of the Corrections Amendment Bill, as a first-time member of the Law and Order Committee in this House. It is the first time I have spoken to a bill in this House, as well. Before commencing, I would just—

Chris Hipkins: You never forget your first time.

IAN McKELVIE: There has always got to be a first time, Mr Hipkins. Before commencing I wish to congratulate the Minister of Corrections on her appointment and wish her well in the portfolio in the future.

The purpose of this bill is well documented. However, I think its aims are admirable and worth repeating here, particularly the fact that it sets out to protect the health and safety of front-line staff and, at the same time, protect and not compromise the fair and humane treatment of prisoners. The bill is about creating efficiency and effectiveness, and, at the same time, providing for fairness. A feature of this bill that I particularly like is that it sets out to increase opportunities for prisoners to learn business skills and to set up and operate legitimate business operations that they can then continue to operate once released from prison. Equally as significant for me is the opportunity to recover some of the costs of board and lodgings from any monetary returns received as a result of work or business opportunity in that time. It will increase the chance of successful reintegration into society. It will increase the chances of society receiving a small dividend, at the same time, from those prisoners for the time they have spent incarcerated at the community’s expense.

This bill allows the Department of Corrections to gain some significant efficiency both internally and through the ability to delegate powers to the managers of contract prisons, thus reducing compliance costs and freeing up time. These contract prisons will do a great job, and Mt Eden Corrections Facility, of course, the first of these, contains nearly 11 percent of New Zealand’s prisoners. I must say that I was somewhat surprised to learn that there are only some 8,500 prisoners in New Zealand and this number has regressed somewhat in recent times. I am equally as surprised and encouraged to learn that there has been a drop in alcohol and drug abuse in that time, as well. The other interesting statistic is that last year prisoners—and this has been documented a number of times tonight—achieved a significant number of credits in literacy and numeracy, the lack of which is one of the biggest single contributors to crime in this country.

One may recall that the level of public confidence in the Department of Corrections was particularly poor in the mid-2000s and of great concern to many in our communities—certainly to those working in the corrections business. That confidence is now significantly higher. In fact it is up 53 percent since 2008. It is a great achievement and one that can be improved on further as a result of these changes. When involved in community affairs, as I have been in recent years, one quickly gets a feel of how different entities are performing throughout your community. I can safely say that morale amongst prison officers and the families of prisoners is better than it has been for some time. I believe that the Department of Corrections is upping its performance significantly, and this bill will further that performance. Thank you.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : It gives me some pleasure to follow my friend from Manawatū, Ian McKelvie, although I must admit that I was out of my seat a little bit earlier than I expected. I thought he might take a little bit more of his call time, but it was a good first offering on a piece of legislation in the House, and I congratulate Mr McKelvie on that.

As my colleagues from the Labour Party have already made clear to the House, we are opposing the Corrections Amendment Bill, but that opposition is based firmly on the fact that there is one aspect of this bill, in particular, that facilitates the operation of private prisons, and it is that aspect of the bill that leads us to oppose it. We are fundamentally opposed to the concept of privatised prisons. We believe that incarceration is absolutely a role of the State. Here in Parliament we are a function of the State. We make the laws. The police enforce those laws. The courts determine whether or not people are guilty. All of those are functions of the State. The next function, of incarceration—if that is what happens to a person who has been through everything else—should also be a role of the State. It is quite inappropriate that we should be calling on the private sector to have that function of incarceration. We would not offer that ability to anybody else privately—it is absolutely a role of the State—and it is for that reason that we are opposed to this bill.

That is somewhat unfortunate, because there are other aspects of the bill that we are not over the moon about, but we are certainly interested in seeing what debate occurs at the Law and Order Committee and what submissions are made to the select committee on some of the other provisions of the bill. Our members on the select committee—unfortunately, I am unlikely to be one of those—will be looking very closely at all the aspects of this bill. There are some provisions that we absolutely cannot support, but there are some that we want to look into in a bit more depth.

I am particularly interested in the provisions that change the structure of health care within prisons. I heard what David Clendon from the Greens said. Like I said, we are not saying this evening that we are wholeheartedly in support of these changes, but we are interested to see what the impact of them will be and what the implications are. What the bill does is remove the requirement for a medical officer. In fact, it removes oversight from a medical officer and puts it in the hands of the health centre manager for a prison. That health centre manager may be a medical officer or may be a nurse. I am not opposed at all to the idea of using a broader workforce in health care, whether it be in prisons or anywhere else for that matter, but I do share the concerns that this may be a clever way of reducing the health care that is available for prisoners. It is probably driven more by a desire to reduce costs than by anything else.

We are mindful of the fact that it could reduce health care, but we are also open to the idea that it could have very good results. It probably more closely reflects the actual practice that is occurring in prisons at the moment, and it could be a good innovation that improves health care for prisoners. If that is the case then we will be happy to support it, but we would like to hear all the arguments from different sides at the select committee before we take a firm view on that. Obviously, we do have the—

Hon Nathan Guy: You should vote for it, then.

IAIN LEES-GALLOWAY: Mr Guy says we should vote for it, then. I have clearly outlined why we cannot possibly vote for this bill. There is one provision that we absolutely, on principle, cannot support, but we are quite confident that the Government will be able to progress this bill to the select committee, and we will be looking forward to participating in discussions on it at that point.

What I was going to say before I was interrupted by Mr Guy was that the Ombudsman’s investigation of the Department of Corrections explicitly said that health services should come under the purview of the health service rather than the corrections service, and that is also where some of the concerns about the provisions in this bill draw from. But we want to hear the debate. We want to see what people have to say about it.

Another provision here that is obviously going to be positive as far as corrections officers are concerned is the increased powers to search prisoners, and also changing the threshold upon which drug testing can occur. There are obvious positives for that in terms of prison staff security, being able to locate contraband, and being able to test prisoners whom they suspect of being under the influence of drugs or alcohol. One of the interesting things—and Mr McKelvie might want to look into this, because there are some stories that I am hearing coming out of Linton prison, and I need to ascertain whether these are facts—is that there are some issues coming out from the smoking ban in prisons. Obviously, from the point of view of someone who wants to see the harm caused by tobacco reduced, I am interested to see how that is working out. With tobacco now becoming contraband, there is a considerable black market in tobacco in many prisons, and I am hearing a lot of stories coming out of Linton prison about not only the black market that exists but the standover tactics that are being used by some prisoners over others to get not only tobacco products but—here is the interesting thing—nicotine replacement therapy products as well, which are becoming part of this black market. I am told that a nicotine patch can be worth up to $50, in fact, in the prisons. So maybe that is something that these extra search powers will discover: nicotine replacement patches being sneaked in and out and around the prison, and certainly tobacco. There is no doubt that tobacco is being smuggled into the prisons and is providing a lucrative black market within the prisons. So that might be something else that the provisions in this bill allow for: easier identification of some of that contraband material that is moving around the prisons.

I want, finally, to come back to this issue of the privatisation of prisons and the provisions that this bill has to, I suppose, devolve what are really State functions to the private sector. As I said, Labour does not believe that State responsibilities—and incarceration is absolutely a State responsibility—should be discharged by anybody other than the Chief Executive of the Department of Corrections and his staff. It should not be delegated out to private contractors and their staff operating private prisons. This is especially the case when it comes to functions such as deciding the security classifications of inmates, the temporary removal or release of prisoners, and the release of inmates from prisons.

Provisions that expressly allow generally for the delegation of powers and functions of the chief executive to contractors and employees of contractors are the things that are of particular concern to us. There is very little evidence that private prisons are the most cost-effective means for taxpayers to get the most out of their prison services, and this reflects, I suppose, what is really an ideological decision from the National Government more than a really practical, pragmatic decision about how it is best to deliver prison services in New Zealand.

So with those concerns noted, and the interest in some of the other provisions that we will be looking at at the select committee, I reiterate Labour’s opposition to this bill on the grounds that we have outlined, but we do look forward to seeing the results of the select committee process.

MARK MITCHELL (National—Rodney) : I am pleased to be able to take a call on this, the first reading of the Corrections Amendment Bill. As a member of the Law and Order Committee I look forward to reviewing this bill. It has been a great pleasure to be in the House today and to listen to the great results delivered by the Minister of Health, the Minister for Social Development, and the Minister of Education, and I see this bill as continuing with the theme that is building around efficiencies and delivering world-class services. The current legislation is sound. However, this bill has taken a positive step towards removing barriers, allowing the management of prisoners in an even more safe, secure, humane, and effective way. I am proud that under a National-led Government we have seen public confidence in the Department of Corrections rise to 53 percent higher than what it was in June 2008, and that prison escapes are at their lowest ever, with only two in the year ended 1 October 2011. Personally, I find this statistic very comforting, as my own electorate, Rodney, has Pāremoremo maximum security prison in the area; it houses some of the country’s worst and most dangerous criminals.

In a previous life I was a police dog handler. What that meant was that I was the first one called out when there was an escaped prisoner. I spent a week on the Coromandel hunting for four dangerous and armed prisoners who had escaped from Pāremoremo. What I saw was a community that became traumatised, living in fear and disruption caused by the escape of these prisoners.

I would also like to address an observation that was made by one of the Opposition members in relation to the use of mechanical restraints. I would like to draw attention again to the fact that these relate directly to protecting a prisoner from self-harm—protecting prisoners from themselves. In my experience, I have seen prisoners inflict serious injuries to themselves very, very quickly by doing something as simple as throwing themselves against a wall, or as extreme as trying to gouge their own eyes out. This amendment allows a prison manager who is present on the spot to make a decision, which still has to be backed up by the opinion of a medical officer—so there are checks and balances in place—that that restraint is necessary to protect that prisoner from self-harm. This is a policy that drips with common sense. It will make the process far more efficient for those having to deal with the practicalities of prisoner management and safety. I note that my colleague Mrs Lole-Taylor, who probably has got more experience than anyone sitting in this House of dealing in the corrections field, made one comment today about this bill, and that was that it was common sense. I agree with her completely. I was very pleased to see that she supported this bill as well.

What also appears to be a common-sense policy is the removal of the requirement for a corrections officer to obtain the prison manager’s approval to conduct a strip-search of a prisoner whom the officer believes on reasonable grounds possesses an unauthorised item. These corrections officers are the personnel at the coalface, and are well qualified through their training and their experience, and using their gut instinct, to be able to make a reasonable decision as to whether or not a prisoner possesses an unauthorised item, whether it be something that could be used as a weapon or contraband.

I would like to finish by saying that I commend this Corrections Amendment Bill to go to the select committee for a review. I think that it is a bill that contains straight, common-sense, practical steps to continue—as we have done with the police, and as we have done with our health services—to equip our front-line providers with the tools that they need to be able to provide the best, world-class services. Thank you very much.

The ASSISTANT SPEAKER (H V Ross Robertson): Before I call the next member, I just advise that it is a split call—5 minutes each. The bell will go at 4 minutes.

Hon CLAYTON COSGROVE (Labour) : In the brief time we have available I just want to set out, as many colleagues have, our reasons for opposing the Corrections Amendment Bill. I recall, when I was corrections spokesperson for our team, having visited every prison in the country bar one, and I share the sentiments of the speaker who spoke before me from National in respect of Pāremoremo. I remember visiting Pāremoremo, and, to be blunt, it was like an out-take from The Silence of the Lambs in D Block, I think it is, or the maximum security section of that prison.

Labour is opposed to this bill not just specifically on ideological grounds, but I place on record that we have a position, as our position has always been, that says that this is a core responsibility—that is, the incarceration of the citizenry is a core responsibility—of the Government, of the Crown, of the community, in effect. It is the Crown, through the police, that effects an arrest and brings charges. It is the Crown, through the judiciary, that deals and renders a verdict through the court system. And therefore it should be the Crown that takes responsibility for incarceration. But what if you put those facts aside, or that position aside, and all we are interested in in respect of corrections is dollars and cents? That is an important concern to have, but I would say the most important concern is the public duty that we have in this place to ensure that for somebody going to prison, their problems are identified, they are rehabilitated—which is not a dirty word—and they are returned to the community in the hope that their behaviour has been changed, that they have been rewired and reprogrammed, as it were, in the hope that they will not offend again, thereby not creating another victim or series of victims. I would have thought the absolute base, primary function of a corrections system is behaviour change, because if it is not behaviour change, then we let the person out again without addressing the fundamentals, and there is another person killed, maimed, or wounded—another set of tears, another loss.

But if all we are interested in is dollars and cents, then can I just remind the House of when National was last in Government in the 1990s and it privatised the Auckland Central Remand Prison. Treasury actually looked at that and independent audits were done, and when you compare the privatised Auckland Central Remand Prison, which we wound back, with a like remand prison—not comparing a maximum security facility with a remand prison—the dollars that were revealed showed that the public sector actually was cheaper per prisoner to administer. So if all the Government is interested in is dollar efficiency, my query is this: are the Minister and the Government so weak that they cannot require their own department to be innovative, to learn from overseas examples, to be efficient, to be more effective? Are the Crown and the Government so inept that they are not prepared to require of their department that when required it lift its game? Or have they decided through this bill and through the privatisation of the Auckland Central Remand Prison for the second time that they have hoisted the white flag and said: “It is not up to us as a Government any more or a corrections Minister. We give up. We’re just going to pass it over to the private sector.”? Because if all you are interested in is dollars and cents, the only evidence—I recall this on the select committee when the privatisation bill was going through, and we heard it from corrections officers, Treasury folk, and others—is that, like for like, the public sector was cheaper. It was cheaper. They were the facts.

So we will oppose this not just on a belief that there is a Crown core responsibility when it comes to the incarceration of citizenry, but we will also oppose this because it does not work. I do not believe as a former Minister that you should say: “We are out of ideas. We can’t require a department to be innovative or efficient. We are just going to contract it out and flick it out to the private sector, and give up.” You need to show some guts, you need to show some gumption, and you need to require of that department that it does the Government’s will. I have to say that corrections officers—the men and women whom I have met—do a job that I could not do, and I suspect that very few of any people in this House could do, dealing with the ugly side of our society and putting themselves in harm’s way.

JULIE ANNE GENTER (Green) : Tēnā koe, Mr Assistant Speaker Robertson. Tēnā koutou e te Whare. As the Green Party spokesperson on justice, I am pleased to rise and, following my distinguished colleague David Clendon, take our second call on the Corrections Amendment Bill. As my colleague has already noted in depth, the Green Party has serious concerns and misgivings about this amendment bill, as it seems to continue the erosion of prisoners’ human rights and treat them as subhuman.

I have noticed there is a tendency to conflate two different reasons for punishment of a crime. One philosophy seeks to exercise vengeance on those who have been convicted of transgressing the law. Punishment for the sake of punishment, at any cost, is the purpose of imprisonment, according to this view. Another approach is a bit more pragmatic. It asks how we can best minimise the harm to society that comes from transgression of a law, and how we can prevent it from happening again. This latter approach tries to get the best outcome for the future of our country. These two approaches to crime and punishment are often at odds. If we write off the potential for rehabilitation, if we fail to understand the underlying causes of a crime, if we seek to punish criminals for the sake of it, and if we deny prisoners basic human rights and dignity, we will pay for it. We will pay the cost of having to imprison more people for longer, if our justice system alienates those who could have otherwise become constructive citizens. If you fail to treat people with basic human dignity, they will respond in kind. This amendment is very much in line with the punitive philosophy, which seeks to punish and control, as opposed to looking out for what is really in the best interests of New Zealand.

I would like to speak to the increased ability of prison staff to search prisoners. This amendment bill is removing a requirement that an officer must obtain a prison manager’s approval to conduct a strip-search. Not only that but it is extending the ability to strip-search. I am going to read directly from the bill. Clause 26(1) substitutes paragraph (f) in section 90(2). So now a strip-search can require that the prisoner must “with his or her legs spread apart, bend his or her knees until his or her buttocks are adjacent to his or her heels:”. Could everyone just imagine what that would feel like?

Hon Maurice Williamson: This is way too much information.

JULIE ANNE GENTER: That is my point. It is too much, is it not? The bill also now allows a prison officer, without having sought approval from a manager, to use additional devices to magnify or illuminate the area that they are examining. Is this not an example of treating prisoners as subhuman? Do we really think that that is going to stop people from trying to bring in contraband? In fact, why must we have these additional provisions and ability?

Hon Tau Henare: Because they might bring in stuff.

JULIE ANNE GENTER: Well, if that is the case, then I ask why the previous Minister said in April 2011: “New laws targeting drugs and contraband, cellphone jamming”—and other provisions—“at all New Zealand prisons and increased vigilance by Corrections staff have made it much harder to get drugs into our prisons. The low number of positive drugs tests show these initiatives are working.” So why do we need to enable people to go even further and deeper into prisoners’ bodies, to search their cells, to open their mail?

It also invites abuse, particularly when we are looking at the private sector. There have been numerous psychological studies, notably the Stanford prison experiment, which show that our behaviour is malleable. Whether we are prison officers doing very difficult work or whether we are prisoners, we respond in kind to the behaviour that others expect of us.

So the Green Party cannot support this bill, because it is not in the long-term interest of New Zealand. It is extending the ability of prison officers and inviting abuse. Therefore we will be opposing it. Thank you.

NIKKI KAYE (National—Auckland Central) : I am very pleased to support the Corrections Amendment Bill. At the heart of this bill is public safety. Most of us get into Parliament to help people, and one of the most common things that members of the public tell me they expect from members of Parliament is to make New Zealand a safer place. We cannot do that if the people who come out of our prisons come out in a worse state than when they went in. That is why at the heart of this bill are three core aspects.

Firstly, there is rehabilitation. If we allow the people in our prisons to come out more addicted to drugs than when they went in, that is a sorry state of affairs. We are very clear that the provision in this bill will assist in terms of more efficient strip-searching and drug testing, but also what we on this side of the House know is that we have a very good record in rehabilitation. We have seen crime drop. We have seen more people get National Certificate of Educational Achievement qualifications, and that leads me to the next provision within this bill, which is so important.

We know that so many people reoffend when they leave prison because they do not have the work experience and the skills to be able to get a job. I have seen some of these people come through my office and they have actually said to me that it was easier to reoffend than try to live out there without being able to get a job. So we have been very clear in this bill to ensure that prisoners get some basic skills and work experience while they are in prison.

We have also been clear to ensure that there is greater health provision within our prisons. But on this side of the House we are very clear: not only do we have a responsibility as parliamentarians to ensure that our community is safer by having things like tougher sentencing, by ensuring that we reduce violent crime, and by having more police on the beat but also we think that we must ensure we have proper rehabilitation in our prisons.

I will leave you with this one story. I had the privilege of attending the New Zealander of the Year awards, and one of the people who won was a guy called Hēnare O’Keefe. A wonderful story was told by Lawrence Yule. He told a story about a gentleman who has worked tirelessly within the New Zealand community, and who walked into one of our prisons and came to a person who had been causing quite a bit of trouble in the last few weeks. He was about to be released, and Lawrence tells an amazing story of Hēnare walking into that prison cell and asking the gentleman why he was causing this trouble. He was very clear, because he said: “I don’t have a father.” Hēnare said: “I will be your father.”

For me what this sums up is that if we do not ensure that the people within our prisons have access to good skills, and if we do not ensure that we do not have drug addiction in our prisons, then we cannot make our community safer. Regardless of what you hear from the Opposition, this bill is about ensuring that we have good rehabilitation and we make our communities safer. I am very pleased to support the Corrections Amendment Bill.

A party vote was called for on the question, That the Corrections Amendment Bill be now read a first time.

Ayes 69 New Zealand National 59; New Zealand First 8; ACT New Zealand 1; United Future 1.
Noes 51 New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.
Bill read a first time.
  • Bill referred to the Law and Order Committee.

Building Amendment Bill (No 3)

Second Reading

Hon MAURICE WILLIAMSON (Minister for Building and Construction) : I move, That the Building Amendment Bill (No 3) be now read a second time. This bill was considered by the Local Government and Environment Committee, chaired by the superb member Chris Auchinvole. That committee did a lot of hard work. I thank all the members of it. I know they all worked very assiduously to bring the bill to a better state, and it did refine and improve the bill dramatically. I know that Labour members, and I think even a Green member, gave some very good contributions to the bill. The committee received 55 written submissions and heard 23 oral submissions, and, as I said, made some quite extensive changes to the detail and also some clarification. So we got what I think are improvements and clarifications out of it.

I want to take a very brief call to say the bill is just a very small part of an overall package of things we are doing. This bill also has a successor called the Building Amendment Bill (No 4), which will have a whole lot of the consumers’ rights in it. There is also another bill coming in later on, which adds some more to it. The licensed building practitioners regime becomes mandatory the day after tomorrow, which is another regime that is part of the building industry. So do not let anybody think that the Building Amendment Bill (No 3) is it in a nutshell.

Basically, this No. 3 bill is purely about trying to move to what I think is risk-based consenting. One of the worst things we have had about our building sector for just about ever is that the consenting regime has always been one size fits all. So the bill tries to move away from that and allow for various levels of consenting, based on how difficult the design is, and so on. The select committee did some really good work in trying to align what our policy intent was with some of the actual details of the wording in the bill. I know that a lot of the submissions said they were concerned the bill was not clear on it. Now the bill is finally amended, and being reported back to the House, it has fixed that up.

Quite a few other practical submissions were made, which reflected a lot of things that parties out there wanted to raise. What I am delighted about is the level of support that our package of reforms is getting. The Registered Master Builders Association, the Certified Builders Association, the Building Industry Federation—let me see; there are about five or six others—the Construction Strategy Group, and so on are all very strongly supportive of this stuff.

I will not go into all the detail, but the bill has had some of the documents clarified where some of them are going to be now called “certificate of work” rather than “record of work”. As I said, all the recommendations that were made by the select committee have been incorporated into this bill, and I thank the committee for that. I again move that the Building Amendment Bill (No 3) be now read a second time.

RAYMOND HUO (Labour) : If the Minister who is responsible for the Building Amendment Bill (No 3), the Hon Maurice Williamson, had listened to the submitters to the Local Government and Environment Committee, he would not be standing there, with respect, reading out his half-baked speech on his half-hearted bill, which falls well short of the reform required in the building industry. I outlined those views expressed by those submitters in my media statement released this afternoon, and I do agree with those submitters who correctly called on the Government to withdraw the bill and bring it back to the House once a more comprehensive package of reforms is available. Labour opposes this bill. It appears that the Minister has presented two personas. The one I like is the Minister who was quoted in the media as complaining that leaky homes are still being built—in his own electorate, to be precise—and that “a ‘dramatic overhaul’ of the Building Act is needed desperately to end the crisis”. There is another persona whose rhetoric is much more powerful than the actual work he delivered.

At a time when the building industry is under huge pressure with the Christchurch rebuild, leaky building remediation work, and a huge skill deficit all looming large, a comprehensive reform of the industry is required, not a banded and piecemeal approach. What we need is genuine leadership to address the fundamental problems. It seems to resonate well with the warnings of professionals such as Mr John Scarry and some of his colleagues that most leaky buildings had faulty designs, and that structural engineering in New Zealand is about to become the first profession in the modern world that will cease to be a profession. Poor standards of construction and deficient building materials were the main contributing factors towards the collapse of the CTV building. Hollow core, slender concrete walls, brittle cold-worked welded wire mesh, and deficient floor diaphragms were the main issues, which apply to other at-risk buildings as well. It is appalling to read the New Zealand Herald reports that deregulation of the industry had allowed manufacturers to pay for the development of standards to justify their own products. Even according to Minister Maurice Williamson himself, as I touched upon earlier, leaky homes are still being built and therefore a dramatic overhaul of the Building Act is needed desperately to end the crisis. However, this bill, together with the Building Amendment Bill (No 4), is miles away from being a broad reform package. Rather, they are nothing but partial instalments.

Talking about leadership, I would like to acknowledge the work and efforts made by our officials and thank members of the select committee, former and current ones, for the work they have done. In particular I would like to acknowledge Green and Labour members who presented the minority report, which is necessary, meaningful, and responsible. I would also like to acknowledge the O’Sullivan brothers, who exposed the rotten-timber crisis that has devastated our country.

It is said, shall I add, that many of us have been made aware that the multibillion-dollar rotten-timber disaster in housing is merely the tip of the iceberg. In the 1990s New Zealanders moved away from traditional weatherboard and brick houses. Instead, builders began using flat, lightweight panels with a plaster finish to give a more Mediterranean look. Many builders say the leaky building problem goes back to the introduction of a new building code in 1991. Instead of telling architects and builders how to design and construct houses, it concentrated on results. The Hunn report in 2002 said it highlighted problems that occurred when a performance-based code did not keep pace with rapidly changing building technology. We do support and are in broad agreement with the direction of the Building Act review, which was initiated under a former Labour Government. More important, we must ensure that we fully understand what went wrong in all instances, not to apportion blame but to learn valuable lessons that will minimise the risk of failure in the future. To that end we need genuine leadership to address the fundamental problems.

I read rather earnestly the open letter to the Institution of Professional Engineers by Mr John Scarry in 2002. The letter, which had nearly 80 pages, exposed widespread unacceptable bad practices in the structural engineering profession and the construction industry in New Zealand. I acknowledge the contributions made by Mr Scarry and his colleagues over the past years, seeking to work for positive reforms. I have learnt a lot from that letter. I have also learnt a lot from the two reports by the Building Industry Authority and the Institution of Professional Engineers that examined what they called significant design and construction issues arising out of a review of the Scarry open letter. The media reports offered some grim reading. Since the Scarry open letter, the Waitakere City Trusts Stadium collapsed during its erection. The Stadium Southland, which collapsed under its own weight in 1999 before repairs were made, collapsed in 2010 under a moderate snow load, luckily on one of the few days of the year when the stadium was not full of people. The headline of the New Zealand Herald story on 22 December 2010 says it all: “Roof collapse raises building code fears”. The news report went on to say: “The Southland collapse came after design faults had to be fixed during the construction of Vector Arena and Waitakere Trusts Stadium several years ago.”

This bill includes only some parts of the reform agenda that has been widely discussed with the industry over the last few years. The bill attempts to shift responsibility and accountability away from building consent authorities towards builders and consumers. The role of these authorities is being reduced, but until there is more genuine reallocation of accountability, this bill risks exposing the consumer to greater risk by reducing the role of councils. We think it is risky and unwise to legislate such a piecemeal set of measures at a time when the industry is facing a surge in demand from the Christchurch rebuild, leaky building remediation work, a huge skill deficit, and uncertainty about whether there will be sufficient builders entering the new licensing scheme. We are not talking about statistics. We are talking about a problem that may have affected most housing, schools, museums, airports and seaports, and Government and commercial office space. We are talking about safety, and we are talking about human lives.

NICKY WAGNER (National—Christchurch Central) : The Building Amendment Bill (No 3) is about building quality and building affordability, both of which are critical for New Zealand. This bill is part of a Better Building Blueprint, a blueprint that will make it easier and cheaper for New Zealanders to build good quality homes and buildings.

The bill is a result of a comprehensive review of the Building Act 2004. That review began at a time when the construction industry was slowing. Now, of course, there is a real growth in the sector, focused on the rebuild of Christchurch. We are expecting to build over 10,000 buildings in Christchurch per year every year for the next few years, and people are estimating that that rebuild will cost up to $30 billion. So there are important savings to be made with this legislation.

The construction industry is a very important contributor to the growth of our economy right across the country, and it needs to be as efficient and as effective as possible. This bill is part of a package to improve standards and productivity. With the pace that is required for the rebuild of Christchurch, it is particularly important that we reduce red tape, lift performance, and increase throughput so we can rebuild our city quickly and efficiently. But let me make this clear: this is not about cutting costs or corners; it is all about getting the rules right and increasing the skills and capacity of the industry so we can build right first time. Christchurch is expecting over 20,000 tradesmen to come into our city for the rebuild, so we must ensure that the work that they do is of good quality.

I believe that everybody in this House will support the value of delivering better quality for less money, and I believe that this bill will improve the productivity of our building industry, which is lagging against other countries, and as a result increase the affordability of housing and building in New Zealand. With the enormous amount of building that has to be done in the next few years across the country, and particularly in Christchurch, this is an important piece of legislation, and I commend this bill to the House.

Hon TREVOR MALLARD (Labour—Hutt South) : I must say that I am somewhat surprised at that speech from Nicky Wagner, a member from Christchurch. I would have thought that members from Christchurch would not be supporting bills that undermine standards and, in fact, that they would be working in the opposite direction.

Hon Tau Henare: That’s why she won.

Hon TREVOR MALLARD: Yes, the member might have won in Christchurch, but she should not sacrifice the standards of building around the rest of the country just to stay in line with the free-market approach of Maurice Williamson, who has never believed in decent standards—never believed in decent standards. As a member for Christchurch she should be ashamed of herself for putting her name behind the Building Amendment Bill (No 3), for being the lackey and the puppet of the Minister for Building and Construction and for saying what he wants, rather than looking at the legislation and, especially, looking at the evidence that was brought to the Local Government and Environment Committee.

Labour supported this bill to the select committee. We had hope for it. We thought there was a possibility that a useful package would be put together, and that that would work for the building industry in New Zealand. Unfortunately, with the evidence that came from two groups in particular—from consumers and from builders—what we heard was that this bill just does not cut the mustard. It does not cut the mustard, and what it will result in is a removal from the regulatory authorities of what is, frankly, not enough power and not high enough standards at the moment.

What this bill is designed to do—and the member who spoke before me got it right early: she went for cheap. Of course, I do not mind if things are less expensive, but what I do mind is if we have more leaky buildings and more risky buildings as a result of the shift of the responsibility away from the consenting authorities and on to individual consumers and individual builders, because what—[Interruption] Sorry?

Nicky Wagner: We’ve had the leaking buildings with the consenting authorities at the moment.

Hon TREVOR MALLARD: Of course we have, because the standards were reduced in 1992 and now you are trying to make them worse. Now the member is trying to make them worse. Maurice Williamson had one crack at making a mess of it as part of the Government, and now what he wants to do is to make it worse still. The standards were reduced by National, we got leaky buildings, we got a whole pile of trouble, and now he wants to make it worse.

The role of the consenting authorities is being reduced, and that accountability is not being pinned on anyone else. So what is going to end up happening in the end? Maybe a shift away from the local authorities? Maybe a shift of responsibility away from them? Some people will think that that is a good idea, but where does it go? It will be left with the $100 shell companies that build houses in New Zealand. You try—even you, Mr Assistant Speaker Tisch—to find a builder who sits behind a $100 company and try to get them to take liability 10 years later, to actually take liability, for the errors that they have made and the poor buildings that they have built. It is impossible. I think anyone who has been a member in this House for any period of time will have had constituents come to them who have had problems with builders who have hidden behind what are effectively shell companies and their reputations. This is not a general comment about the building profession, but all of us know that there are shonky people, often not properly qualified, who have picked up the tools and away they have gone.

The Labour Party will not be supporting this bill from this point on. The Building Act review, which was started under the previous Government—and I think Clayton Cosgrove did quite a lot of work on it—was useful, and we are in broad agreement with the direction. But what the Minister has decided to do is to cherry-pick. He has picked out the bits that he likes—the bits that will deregulate and the bits that will reduce standards—rather than doing a package that is coherent and something that we might be able to support if the whole package was there.

Frankly, many of the submitters said that—[Interruption] Sorry?

Hon Maurice Williamson: The licensed building practitioner regime, which comes into effect on Thursday, is reregulating, not deregulating.

Hon TREVOR MALLARD: The Minister is doing a good bit here and a bad bit there. Why does he want to follow up the little bit of good work he does with a pile of rubbish here? I just do not understand it, although asking for consistency from Maurice Williamson is like asking Murray McCully to come to question time: it is pretty much impossible. It is pretty, pretty, pretty much impossible.

Many of the submitters said the bill would not achieve its objective, because of that piecemeal approach. It picks out only part of the reform agenda, and that adhockery means that there is not a coherent arrangement that has been widely discussed and actually more or less agreed within the industry. If the Minister was more collaborative, and if he worked more closely with the industry, I do not have much doubt that he could get together—[Interruption] Sorry?

Hon Maurice Williamson: The industry supports it.

Hon TREVOR MALLARD: Actually, many of the submitters from the industry who came to the select committee did not support it. No, what they did support was the review. They supported the review because it was a more coherent approach—and credit to Clayton Cosgrove and credit to a lot of the officials.

I went to a damn fine meeting at the Petone Working Men’s Club, where there were hundreds of tradespeople there, and it is fair to say that they had a range of opinions. But they worked through the issues, and they came out with broad agreement—along with, obviously, dozens of other meetings of hundreds of tradespeople—which was mainly reflected in a pretty coherent package that they could wear. But what it did not do—what it did not do—was take from the councils the requirement to be consenting authorities in the way that the Minister is doing in this way.

The role of those consent authorities is very much circumscribed. We believe that we have to have something there, and councils are the logical organisations. They are going to be the ones that are, if you like, the last—can you still say “last man standing”? That is generally the case. They would be the last organisation standing and therefore the logical people to have liability in the end if they have fouled up the process. But if you take away the responsibility from them and give it to the $100 companies, then what happens—what happens—to the consumer who gets the leaky building, or the building where the concrete is not properly affixed or the windows fall out or leaks occur or anything else happens in that way?

The Minister says that you cannot have mandatory warranties and that you cannot have proper proportionate liability—

Hon Maurice Williamson: I didn’t say that at all.

Hon TREVOR MALLARD: Well, why did his officials tell the select committee that that is what he thought?

Hon Maurice Williamson: No.

Hon TREVOR MALLARD: Well, why is it in the report? The Minister should get his facts sorted and get his story straight in the area. I have to agree with one of the Minister’s Cabinet papers, where it said: “simply reducing or streamlining [the current Act’s requirements] without first providing other means of quality assurance … would jeopardise building quality … the timing and sequence of each part of the proposed reform package is important.” I totally agree with the officials, and I totally agree with the Minister’s Cabinet paper. It is a pity that the Minister could not read his own reports and get it right.

GARETH HUGHES (Green) : Ngā mihi nui ki a koutou. Kia ora. I rise to take a call on the Building Amendment Bill (No 3). I am filling in tonight and will be taking only a quick call for my colleague and Green Party housing spokesperson, Holly Walker.

I wanted to touch on this bill because I have recently, in the last couple of weeks, become a homeowner. I am one of the few people in my generation who are in a privileged position and can afford a house. We have to be frank: for my generation—people in their late 20s and early 30s—homeownership is just a distant dream. They are resigned to a life of renting because we have some of the most unaffordable housing stock in the country.

But the flip side is that when you look at our rental housing stock, we have some of the worst standards of rental housing in the world. I have been touring the country, checking out some of our coldest, dampest flats, and it is a crime what some of our New Zealanders, including refugees, superannuitants, and students, have to put up with. We are talking about holes in walls, we are talking about mould on the ceiling and the walls, and we are talking about kids growing up and getting asthma and other respiratory diseases because of the poor standard of our housing in New Zealand.

It is a key issue, and that is why the Greens approached this bill in a constructive manner. That is why we will be voting, unlike the Labour Party, to support this bill to select committee. It is a key issue.

We have got so many housing issues facing us. We have got a homelessness problem, with potentially tens of thousands of Kiwis classed as homeless. We have got the rebuild in Christchurch, which the member Nicky Wagner touched on, talking about 10,000 houses. But 70,000 houses have been identified in Auckland as part of a housing shortage there. We have got the substandard housing stock that I have touched on, though I guess on the upside we do have 150,000 Kiwi homes warmer and drier because of the memorandum of understanding between the Greens and the National Party with the Warm Up New Zealand: Heat Smart project, which we are very proud of.

But we also have this terrible legacy of the leaky buildings. What the lesson of the leaky buildings saga must be is that when you remove all the regulation, like we did in 1991, which Trevor Mallard and other speakers touched on, you run into problems. Now Kiwis, councils, the Government, builders, and companies are all facing huge costs, literally billions of dollars in liability and costs. It is a huge part of our economy—5 percent—as the Building Act review points out. More than 20,000 buildings get built a year.

The Greens supported the Building Amendment Bill (No 3) to the select committee, but, like Labour, we felt that there were some concerns. I read from our minority report that with the Building Amendment Bill (No 3) we agreed with the Labour Party that we could not see it achieving its objective, “because it is a piecemeal approach, which includes only some parts of the reform agenda that has been widely discussed with the industry over the last few years.” Our objection is that the Government was doing it piecemeal, leaving so much up to regulations.

It is welcome to the Green Party to see the Building Amendment Bill (No 4), because we can finally see the rest of the puzzle put together. So we will be supporting it to select committee. We are going to constructively engage with the submitters and welcome those submissions.

We support the No. 4 bill because it introduces enhanced and more comprehensive consumer protection measures for building work, including the mandatory disclosure of certain information. We think it is perhaps appropriate, and we will be looking in the select committee at increasing the maximum penalties for doing building work without a building consent. But, again, like the Labour Party, we lament the fact that it did not address the consumer protection recommendations, though in the Building Amendment Bill (No 4), new sections 362A and 362S, which are proposed to be inserted into the Act, will hopefully remedy this.

An area that I have just picked up on from reading the Kensington Swan analysis of the bill, and which I would be interested in getting further comment on down the line from the Minister for Building and Construction, is around warranties. Kensington Swan’s analysis of the bill identified that if someone builds their own home or has major renovation works, that person is still liable even if the house is sold subsequently down the line. The analysis points to the fact that potentially you could have a house, and the home builder, who could be a family—because the bill excludes developers or registered builders—maybe did it in that great Kiwi tradition of DIY and built a home for their family, maybe with some builder support, and six sales down the line the home builder will still be faced with liability issues from this house.

What is the outcome of this? We are going to see fewer Kiwis building their homes. We are going to see fewer Kiwis using perhaps what are described as novel, alternative, or sustainable building techniques, methods, or products. What we are going to see is a boon for professional builders as people shy away, worried about the liability issues.

The key question is where does it end? Kensington Swan analysed up to six homeowners. Is it a dozen? Is it 10? Could you have 20 families go through a house, yet that original builder—that family—still be liable? The outcome is going to be that we are going to see fewer family homes built. We are going to see more McMansions built from the same stock.

There are going to be some adverse outcomes, potentially, to this bill. That is why the Green Party goes into it with an open mind. That is why we are going in from a constructive viewpoint and will be voting to send it to select committee, and we look forward to the public’s input there. We have a saying in New Zealand, “safe as houses”, and what the Green Party wants to see in New Zealand is those homes safe as houses.

MAGGIE BARRY (National—North Shore) : I am very happy to speak briefly in support of the four main changes in the Building Amendment Bill (No 3). It is No. 3, not No. 4. I talked to a few builders about this on the North Shore, my home electorate. This is a place where building and the construction industry are highly valued. It seems to me that really the four pieces that are in this legislation—clearer accountability; a new building consent system, which is very much risk based; that code of ethics, which is an encouragement, and that is the carrot; as well as the do-it-yourself guy not being very hard-done-by by this legislation—are four measures that have appealed to my electorate a lot and also appeal to me.

I had a bit to do with DIY in 12 years on the garden show, and I would have to say that for the guys who are handy with the hammer—and the women too—it is important that they are able to continue on with their work, but they have to keep the standards high. They cannot go out and afford building inspectors and really crank it up too much. That would stifle the great Kiwi pastime. So I am very pleased with the provisions in the bill, because the safeguards are still there. They still have to meet the requirements of the building code, like all professional builders, and they still have to be accountable for the work that they do, but they do have to watch out for themselves.

The do-it-yourselfers will be prevented from working on more than one home within a 3-year period, because there will always be, I guess, the cowboys who decide that they want to try to get in under the guise of DIY. I think that the provisions in the bill make it very difficult for them, because you are not allowed to actually pay anyone who gives you assistance. So I think the measures are there.

I like the bill, and I am very happy about its checks and balances. I am very happy to support this Building Amendment Bill (No 3).

ANDREW WILLIAMS (NZ First) : I am very pleased to stand here on behalf of New Zealand First to discuss the Building Amendment Bill (No 3). New Zealand First does not support this bill, for a great many reasons. I am on the Local Government and Environment Committee, but I was not on the committee when these recommendations from last year’s committee were made. I certainly am somewhat aghast at some of the recommendations contained in this bill.

As one of the very few people in this Chamber who have been involved in local government—

Nicky Wagner: Oh, excuse me!

ANDREW WILLIAMS: —as one of the very few—and certainly one of the very few on the current Local Government and Environment Committee, can I bring to this Chamber some of the experiences that I know of in relation to this. In introducing this I would refer to John Scarry, a structural engineer, whom Raymond Huo referred to, and a comment he made recently in Christchurch when he referred to depraved indifference. This bill is very much one that reflects on depraved indifference from this National Government.

In fact, it is a “Back to the Future Bill”, in my opinion. It is a “Brideshead Revisited Bill”. It is going back to the 1990s. It is almost Maurice Williamson, the Minister for Building and Construction, reverting back to his time in the 1990s, when the then Government destroyed the building code, when it ripped the building code apart, when it changed the Building Research Association of New Zealand building research rules and the building code and allowed air-dried timber in this country to be used, after pressure from some of the corporates—its mates in the building industry. The then Government allowed monolithic cladding from Australia to be applied here in New Zealand in a climate where we have a lot of rain, unlike Australia, and where we have the likes of Waitematā clay and moving soils, which are quite different from the conditions in Australia. That, combined with the air-dried timber and the monolithic cladding and the movement of the houses, ended up as our leaky house problem.

I can recall 18 months ago when the Minister Maurice Williamson slammed the phone down on me and five other mayors during a phone call when we were discussing the leaky home situation. It was at the time the Minister was offering a 10 percent offer on the table for full and final settlement from the Government to solve the leaky homes issue. I said that that was an insult. I said it was an insult to New Zealanders who had been left in the lurch with their leaky homes for the Government to offer 10 percent. The Minister said: “Take it or leave it. That’s all you’re getting. If you don’t take it, the Government will walk away from this.”

We, the North Shore City Council at the time, commissioned a Covec report, and the Covec report by independent financial analysts showed that the $11 billion - plus rebuild of leaky homes in New Zealand was going to return the Government in excess of at least 25 percent in taxes in the way of GST, PAYE, and other company taxes. The Government, essentially, was going to get its $2 billion or $3 billion back in taxes from the rebuilding exercise of over $11 billion in New Zealand homes.

It was interesting that as a result of giving that report to the Minister at the time, within 30 days the Government turned round and offered 25 percent on the table. Suddenly, the deal went from 10 percent to 25 percent. It proved then that the Government really did not know what it was doing with leaky homes, and it really did not understand what it had created back in the 1990s with deregulation and the lowering of standards.

And here we are seeing it all over again in this bill. Do we really want to see a situation where $100 window companies can be responsible again for what is going on in our building industry? Do we want to see our homes revert to being built with builder’s bog sealants and jerry-building standards and with self-policing of such standards by constructors and consumers alike? We do not want to see that. The only way we can stop this is to ensure that the local authorities, the local regulators, and the local people with responsibility have a good input into how our homes and our buildings in this country are built.

I was recently at a major college on the North Shore and I was aghast to find also that it has something like between $20 million and $30 million of rebuilding of buildings to fix its leaky school buildings problem. My understanding is that that is just one of something like 500 colleges in New Zealand that are going to have to go through the same exercise.

We heard from the Prime Minister just recently that the Government is planning to sell $5 billion to $7 billion of State assets to help upgrade our schools and bring them into the 21st century. I put it to you that perhaps it is having to sell the $5 billion to $7 billion of assets, in actual fact, to get money in to fix the hundreds and hundreds and hundreds of millions of dollars worth of leaky school buildings throughout this country.

I think we might be getting sold down the river on this particular one, and I would be very interested to see this again. Just as we are looking back 20 years now—back to the 1991-92 period when this happened, 20 years ago—it will be very interesting at the end of this decade to look back and say: “What happened to our schools? Did they get all that money reinvested in them for, supposedly, improvements? Or was it just to fix the National Government’s leaky building problem?”.

This bill shifts responsibility and accountability away from the authorities and it puts it back on the builders and consumers. It puts it back on those $100 window companies. This is an all-care, no-responsibility approach by this National Government. Have we not learnt from the leaky homes saga, which was a national disaster in the 1990s? And it is about to create another disaster in this decade.

Also—and I particularly am concerned about this, having watched the royal commission in Christchurch and heard about some of the problems there with the building standards in Christchurch, and perhaps some of the questionable designs and building methods used in Christchurch that have resulted in some of the major failures of those buildings. Do we want to have a situation where our building industry is self-regulated to the point where builders can put up structures, where they can put up buildings, and supposedly be self-policing and self-complying? Do we want that situation? And then in years to come, because we are in an earthquake zone, because we are in a zone of movement of land in this country, do we want to look back again—like the leaky homes situation, like the leaky school buildings situation—and say: “How on earth did we let that National Government allow this sort of thing to go through, and allow the lowering of standards of our building code and of the building of our premises and corporates, and our housing and our schools, and every other structure in this country?”.

New Zealand First does not support this bill. We believe this bill is just another case of the National Government pandering to some of its corporate mates and assisting the building industry, as it did in the 1990s with the air-dried timber, and as it did in the 1990s with the monolithic cladding. The Minister is smiling, but the Minister was there in the 1990s when the Government allowed it to happen.

This is Brideshead Revisited, this is Back to the Future, this is bringing back the 1990s all over again. This Parliament should be ashamed if it puts this bill through in this form, because we all will be individually held to account in years to come if we go back to a situation of having inferior building standards, inferior housing, inferior school buildings, and inferior commercial buildings, all as a result of this building Minister and this Government allowing the building standards to once again be lowered. Thank you.

Dr DAVID CLARK (Labour—Dunedin North) : I rise to speak to the second reading of the Government bill, the Building Amendment Bill (No 3). Labour opposes this bill for some very good reasons—

Hon Members: What are they?

Dr DAVID CLARK: —leaky homes—that I now wish to outline. The leaky homes problem, which became apparent in the 1990s, was a problem long before it was addressed. It came about as a result of inadequate legislation. My fear is that here we go again, making more inadequate legislation—a risk that we should not be running in this sector. There is no doubt in my mind that building regulation is very important for our country. When we compare, for example, the earthquakes in Haiti and Christchurch, we see both as tragedies, but we can be somewhat thankful that we had stricter building regulation here. It is an important area of law, and it is an important area to get right.

There are aspects tied up with leaky buildings that relate to health, poverty, and our poor housing stock. The rates of rheumatic fever at the moment are of great concern, so there is no doubt that we need to address these matters. When I think of leaky buildings I think of stories I have heard, as I am sure other members of the House do, where companies have disappeared overseas and individual builders have disappeared overseas. This is a problem that this bill does not seek to address. I can remember a story of a couple who built a house. They planned it, as couples do. They spent a lot of time investing in the plans and in the final product. This couple, perhaps unlike many other examples that have been used, did not take a case to have the leaky building addressed by any kind of official mechanism. They have gone about fixing the house themselves, but over time this has amounted to an enormous cost and, as I have already said, the builders had long since disappeared. I am sure we can all recount similar stories.

The current proposal is to shift responsibility to builders and consumers, and that in itself is a laudable goal. If it were to be effectively done, it would be done in a way that allocated them their respective level of responsibilities, as is appropriate to their responsibility in being part of the decision making around the building. But Labour has a view—which I believe has been wisely formed—that this reallocation of responsibilities needs to be looked at properly, looked at hard, and looked at long, and it ought to be a genuine reallocation. That is what is required. That might be generated by something like mandatory home warranties or the introduction of proportionate liability, and unfortunately the legislation as it is currently proposed does not deal adequately with such remedies. It does instead shift the responsibility in a way that stops short of the ideal solution. There is a risk of exposing consumers in this scenario in a way that they should never be exposed, and of reducing council responsibilities in a way that is unhelpful.

Submitters convinced those who did sit on the Local Government and Environment Committee that the benefits of a broader package should be considered more fully, and this package here, which we have before us in the legislation, is not as full as it ought to be. That is why Labour opposes this bill and will continue to oppose this bill, unless significant change comes forward.

Just to reiterate, the aim of the Building Act review is a worthy one: the better allocation of responsibility and accountability between regulatory authorities, building professionals, and consumers. It is the way in which this has—or, rather, has not—been done that we are opposing. Labour thinks that it is both risky and unwise to legislate in such a piecemeal fashion on such an important issue and at a time when the industry itself is facing a surge in demand and a lack of skills. We have also got, simultaneously, the issue of Christchurch and the rebuild. These are not insignificant issues, and it is important, rather than rushing into legislation that is imperfect, that we face these other issues and generate legislation that is truly lasting and that will truly address the problems that we have. I can recall, in my recent occupation as a head of a university hall, trying to get hold of a structural engineer, and even in Dunedin, a town not that close to Christchurch, it is difficult to locate the services of such a person because of the demand in Christchurch for that profession. That is just one aspect of the building profession. There are huge demands on those people right now, and those pressures must be also addressed.

These reasons are why Labour and the Green Party submitted their minority view—well, at least I can say they are why Labour submitted its minority view—at the select committee, and it is from a fear that as it stands, the bill might allow the homeowner fewer remedies when left in the lurch by a $100 shell company. It is simply not acceptable that that be the case. We believe that a fuller and broader piece of work needs to be done so that we have adequate legislation to protect consumers and to shield them from the risks that this particular approach would generate. So that is why we will oppose this bill, and I am very proud to stand here on behalf of Labour and deliver that message. Thank you.

Hon CHESTER BORROWS (Minister for Courts) : I want to commend the previous speaker, Dr David Clark, for the delivery of that speech. Ten minutes can seem like an awfully long time in such circumstances—called to your feet a little bit impromptu—and your former occupation has served you well. I want to speak in endorsement of the Building Amendment Bill (No 3).

Hon Member: Was that a compliment?

Hon CHESTER BORROWS: That was a compliment, and they flow fast and furious from my lips.

It is only a week since I attended a meeting of a development group in Whanganui that was experiencing extreme frustration with trying to get subdivisions and create employment, which Whanganui desperately needs at this time. It was being frustrated by an inconsistent approach from councils. Some of the frustrations will be dealt to with the passing of this legislation around the granting of consents for similarly designed buildings built on repeat scales on the same land by the same builders who have been proven to be trustworthy in the past. I commend this bill to the House and look forward to its smooth transition.

The ASSISTANT SPEAKER (Lindsay Tisch): I am going to call Kris Faafoi, but before I do, is this a split call with the Greens, or is this a—

Kris Faafoi: Not that I am aware of, Mr Assistant Speaker.

Hon Tau Henare: It should be.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Kris Faafoi.

KRIS FAAFOI (Labour—Mana) : Thank you very much for the opportunity to speak to the Building Amendment Bill (No 3). It was going to be a relatively short contribution, but for the benefit of Mr Henare, seeing as he has asked for more, we will try to extend it as far we possibly can—as far as we possibly can, for the benefit of the member.

I rise, following David Clark, for the second reading of this bill. As he stated, we do oppose this bill. We did not oppose this bill at the first reading, but upon hearing evidence and submissions at the select committee, it has become clear to us that there are a number of concerns around the fullness of the measures being taken in this bill and that they do not, in fact, tackle a number of the issues that have come about by, as David Clark has mentioned, concerns around the leaky building phenomenon in New Zealand. So we believe that in its current state, this is a piecemeal piece of legislation.

Unfortunately, as I said, it was a piece of legislation that we did support. It entered this House with high hopes that it would take some very concrete measures to ensure there was a certain degree of accountability across the industry and also with homeowners to ensure that there was accountability around the issue of leaky buildings, but, as became clear in the Local Government and Environment Committee, this bill did not meet those requirements. Labour supported this bill’s referral to a select committee and although we are in broad agreement with the direction of the Building Act review—which, of course, began under Labour—we will not be supporting this Building Amendment Bill (No 3) any further at this second reading stage.

I believe it was a New Zealand First member earlier on in this debate who said that the onus is on us to make sure that we do get regulations—

Hon Tau Henare: I didn’t say anything.

KRIS FAAFOI: Pardon? Sorry; that is a former New Zealand First member on that side of the House. It is a current New Zealand First member in the Parliament who said the onus is on us to make sure that we get regulations around building right. Given recent history with the leaky building experience, and when we are talking about the likes of schools and homes and hospitals, it is a responsibility of this House to make sure we get this legislation right. And that is why at this stage we have chosen not to support it, because of its piecemeal nature.

After listening to those submitters at the Local Government and Environment Committee, we believe—and a lot of submitters agreed with Labour at the select committee—that this bill should be scrapped and we should be starting again, and that we should have a broader package of measures around regulations for the accountability of the building industry and protections for consumers in a new building amendment bill.

The purpose of the bill, as Mr Clark said, is worthy, and that is why we did support it at the first stage. For those listening at home at quarter to 10—

Hon Tau Henare: How many?

KRIS FAAFOI: They are listening for interjections from Mr Henare, but the purpose of the bill—it is your bill, so maybe they might want to hear what the purpose of the bill is—is to change or clarify the building consent and inspection requirements, that building design and construction requirements are also changed and clarified, that the licensed building practitioners regime is changed and clarified, and that the law relating to DIY projects—which I am sure Mr Henare is a dab hand at, dab hand, not dab fist—is also changed, to ensure that there are the appropriate requirements for better protection. And I guess it is, as David Clark said, adequate protection for consumers.

As a number of our speakers have said, we will not be supporting this legislation, because of its piecemeal nature. We believe that there is significant change needed in this area and that, although we did commend the bill for select committee deliberation, it has become clear to us that it no longer meets the requirements of this side of the House, indeed, to support it in terms of that significant change. We also think that it is risky and unwise to legislate this piecemeal legislation, this set of measures, at a time when the industry is facing a rather large surge of demand around the increased needs of Christchurch, and, nationally, the repair of leaky homes.

Of course, there is a huge skills deficit, one that we do not think is being addressed, and concern and uncertainty about whether there will be sufficient builders entering the new licensing scheme—

Colin King: Rubbish—heaps of young people being trained. Heaps of people being trained.

KRIS FAAFOI: I hear the member for Kaikōura, Mr Colin King, someone whom I respect personally, who says that it is rubbish that there is a skills shortage. It is a fact that there is a skills shortage and that under the 49th Parliament National actually decreased the number of training places. So it is a complete fact that there is a significant shortage of skills, especially in this area when we are looking at a significant rebuild of Christchurch and the repair of leaky homes.

It is an onus on this Parliament to make sure that we do have a set of thorough regulations and legislation around building and the accountability of those who are involved in the building process. We do not believe that this bill supplies the people of New Zealand with that. We thought it might do at the first reading, but as submissions went forward in the select committee hearings, it became clear to us, because of the volume and the nature of the concerns of the submitters at the select committee, that this legislation will not achieve what it set out to achieve, and it is for those reasons that we will not be supporting this bill—because of its piecemeal nature. We think significant change is needed in the law and that is why we will not be supporting this bill any further.

JACQUI DEAN (National—Waitaki) : The Building Amendment Bill (No 3) provides for clearer accountability for building practitioners, building consent authorities, and consumers in making sure work complies with the building code. It is an excellent bill and I commend it to the House.

Hon MARYAN STREET (Labour) : I rise to take a call on the Building Amendment Bill (No 3). Some of the history of this legislation and the circumstances around it have been traversed, some in particular by the member Andrew Williams, but it does behove us to look back a little bit and see just what happened the first time round, when the National Government was in charge of regulating the building industry.

In fact, what happened was that the regulations surrounding building requirements were so diluted and so reduced to the lowest common denominator under the current Minister for Building and Construction, who was the Minister at that time also, that we saw a burgeoning of cowboy-type operations in the construction industry. In fact, I wish we had seen them, but we did not see them. They often operated under the radar, and covered things up with sufficient coats of paint for people not to be able to discern the inadequate nature of the materials they were working with. So over a number of years the problem emerged.

After the 1990s and the National Party’s term in Government, when one of its tasks was in fact to dilute the regulations around the construction industry, we saw people beginning to suffer hugely from this shoddy and corner-cutting practice. So the Labour Government then sought to tighten up regulations. By the time I came into Parliament in 2005, Clayton Cosgrove was in charge of this portfolio and was taking meetings all around the country of people involved in the construction industry. I remember attending two of them on the North Shore. I was working in the Labour North team at that time, so the North Shore was an area of particular interest to me and an area that I knew well. I remember going to a breakfast meeting with Clayton Cosgrove and there were 200 builders there who were concerned about liability. They wanted to see a tightening of the regulations, because they were sick of being undermined and maligned by the practices of less professional members of the building and construction industry than themselves. Having had this whole episode where they were getting the blame—some of the good and very competent, trustworthy, and capable builders were getting the blame for shoddy workmanship—there was concern that in our tightening up of the regulations they might be subjected to too much liability for products that they were not in fact responsible for.

That was a legitimate concern, because the blame needed to lie with the perpetrators of the shortcuts—those people who manufactured inadequate products; those people who built in a rapid and careless fashion. Those people needed to take responsibility. So with a room at the North Shore Events Centre packed with 200 or so builders, Clayton Cosgrove got a very good idea about what the concerns of the industry were: “Don’t tighten up so much that we can’t do our job or we get tagged with liability that is not our fault, but, on the other hand, tighten it up enough to get rid of the cowboys out of the industry and to protect the homes that New Zealanders are having built.” So we proceeded down that path.

What this bill represents is a return to shoddy practices. It does not provide enough of a bulwark against shoddy building practices. It is a return to National’s favourite home, which is the “no regulation” territory: “Let’s regulate as little as possible, because all our friends in business complain about red tape and regulation.” Well, sometimes regulations are there for a reason. In fact, they are always there for a reason. Every now and then they need to be updated because the reasons change, but they do not, in the case of this legislation, warrant being wound back in the way that this legislation proposes. We supported this bill going to the Local Government and Environment Committee, and we are kind of there with the Building Act review, but this bill does not deserve to proceed any further. It represents a short-sightedness, an attitude that has not learnt from history. Even in the same person—the same Minister—there is not the learning from history that New Zealanders deserve if the building of their homes is to be protected adequately from a repeat of the problems of the 1990s.

So we think it is unwise. There are risks pertaining to legislating such a piecemeal piece of legislation—a piecemeal set of measures—at a time when the industry ought to be gearing up to meet the building requirements not only of Christchurch but of future years when we finally have back a Government that is committed to building houses that people can afford to get into, instead of cutting off people’s opportunities to own their own home. So our position is that we agree with those submitters who wanted the bill to be withdrawn and brought back in a more comprehensive form. Again, do not do half the job; do the whole job, and do it properly. There is no harm, there is no shame, in saying “OK, we haven’t got everything quite right here. We’ll just hold it off. We’ll make some changes and we’ll bring it back in an improved way that the House can pass without any difficulty.” This is not that bill. This is not that bill, and it contains dangers within it that will see us going back to the 1990s completely unnecessarily.

People deserve to live in houses that are built by workmanship they can trust. We have very capable workmen and craftspeople out there who can build houses adequately to proper specifications. Do not dilute the regulations now. Do not put aside all of the experience of the 1990s and the things we learnt. Go back and get another 200 North Shore builders into the events centre and talk to them again over breakfast. Talk to them twice. I went to two of those meetings on the North Shore with Clayton Cosgrove, and the builders were very clear about the need to tighten regulations and to stipulate where liability should lie but also to make sure they could have some confidence that their professional integrity could be maintained. We do not agree with the bill proceeding. Thank you.

A party vote was called for on the question, That the amendments recommended by the Local Government and Environment Committee by majority be agreed to.

Ayes 63 New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.
Noes 57 New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.
Question agreed to.

A party vote was called for on the question, That the Building Amendment Bill (No 3) be now read a second time.

Ayes 63 New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.
Noes 57 New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.
Bill read a second time.
  • The House adjourned at 10.01 p.m.