Madam SPEAKER: I have received a letter from the Minister of Corrections informing me that the Government, with the agreement of the member in charge, has adopted the Corrections (Mothers with Babies) Amendment Bill.

Madam SPEAKER: I have received a letter from the Minister for the Environment informing me that the Government, with the agreement of the member in charge, has adopted the Waste Minimisation Bill.

Hon Dr NICK SMITH (National—Nelson) : This afternoon we are being asked to continue the reckless and irresponsible fast-track process being made by this Clark-Peters Government on this very complex emissions trading legislation. I want the Committee to note that last Tuesday the Government tabled 785 amendments to this bill and passed them on the same day. I would bet that not a single member of this Committee would understand the implications of those 785 changes. The Minister responsible for Climate Change Issues has said: “Trust me. Trust me and my officials. This is all OK.” The problem is that only the week before in this Parliament, in response to questions, the Minister said that the bill did not need any further amendment and that the Government had it all right. We knew after the 1,000 changes the Government tabled only 3 days before we deliberated on the bill that the bill had many errors, and now we know it again.

I will just give a couple of examples of where there are serious mistakes in this bill. The first is in respect of cogeneration. One of the good things that has happened over the last decade is that as people look to a more intelligent use of energy, there has been a real growth of cogeneration—more growth in cogeneration than in any other area of the energy equation. Yet, when we look further through the bill at the detailed clauses of clause 37 and other clauses, cogeneration has been left out. If we go back to the Finance and Expenditure Committee report, we see that when it comes to the determination of allocations for industry, the clear intent of the select committee was to include cogeneration. Members opposite say that this is a minor technical issue and that it is only a word, and they ask why we would be bothered with a single word. Well, that single word will cost New Zealand’s single biggest company, Fonterra, $13.5 million—$13.5 million every year. That is just the cost for Fonterra, let alone the cost for the other industries. So I ask members opposite why we are picking on cogeneration and why we are discriminating against that particular form of energy.

Let me give another example. When industries are meeting their obligations in this emissions trading scheme, they are able to opt in and take responsibility for their emissions. But the bill, again because of a drafting error, does not allow gas or coal that has gone through a wholesaler to be included. Again, people may say that that is all a bit complicated and ask what it means. For five of New Zealand’s major companies, it means that they are not able to manage all of their emissions, which is the very purpose of being able to opt in. Again we have a serious mistake that will cost industry millions of dollars.

So I say to the Minister in the chair, the Hon Pete Hodgson, and to the Government that this is reckless and irresponsible lawmaking. As the Dominion Post editorial asked so well yesterday: why is the Government wanting to ram through this legislation when it is absolutely obvious that it has significant and serious errors that need to be worked through? There is only one reason. The Government has been in office for 9 years. Its climate change record is awful. We have the biggest growth in emissions of almost any country in the OECD. Every single element of climate change policy has turned to pickle. I would have hoped the Government might learn from the experience—that this stuff is difficult and complicated. And what we are doing is exactly the same as we did on the matter of electoral finance, and I fear that Parliament is again making serious errors—errors for which New Zealand will pay dearly.

CHRIS TREMAIN (National—Napier) : National has consistently advocated a well-designed, carefully balanced emissions trading scheme as being the best tool to efficiently reduce emissions. In 1999 the National Cabinet decided that an emissions trading scheme was the right way forward on climate change policy, and the National Party expressed concern when the emissions trading scheme was dropped in favour of a carbon tax after the current Government initially took office. Nick Smith promoted an emissions trading scheme in National’s A Bluegreen Vision for New Zealand document in 2006. Last year we supported the Government’s decision in principle in favour of an emissions trading scheme and voted for the first reading of the bill.

R Doug Woolerton: Oh, that’s a load of rubbish.

CHRIS TREMAIN: Mr Woolerton may remember that vote, although it would be one of the few parts of the bill he does remember.

However, the rushed legislative process has resulted in a bill that has major deficiencies. The Finance and Expenditure Committee’s consideration and deliberation process has been rushed and reckless, driven to meet a political agenda and not the concerns of New Zealand, as my colleague Nick Smith has canvassed here today. Only approximately 12 hours of the committee’s time was allocated to considering the 483-page departmental report and 60 supplementary departmental reports on specific issues. Committee members received over 1,000 amendments to this 237-page bill only 3 days prior to the committee’s final deliberation.

With the exception of the Minister and perhaps the chair of the select committee, there has been no serious engagement by Government members in respect of the critical issues to New Zealand in this bill, as is evidenced by there having been no fewer than 24 different Government members subbed on to that committee throughout the process. I raise the question: how many of those Government members who were subbed on to that committee had any idea whatsoever about what was in the bill?

National members, who were far more consistently present on the committee and who queried the important issues, have repeatedly been told that things are a certain way because they are Government policy, not because they are in the best interests of Kiwis. If that is not bad enough, 785 amendments were dropped on the House at the commencement of the Committee stage and are now to be rushed through the process.

Over the weekend, some embarrassing new errors have been found in the emissions trading scheme. New errors that have been identified in respect of cogeneration and emissions from gas and coal bought through wholesalers expose the Government’s reckless process—

R Doug Woolerton: For heaven’s sake!

CHRIS TREMAIN: Does the member think it is a good thing that over the weekend $13 million in additional costs were found in the bill—costs that were not covered by those 785 amendments? Just a small $13 million in extra costs! That is absolutely unacceptable. These significant errors, entirely the result of a rushed process, are coming home to roost for businesses throughout this country. Costs that amount to $13 million are significant and should not be overlooked.

These problems could have been overcome if the process had not focused solely on a political agenda and on putting a trophy in the cabinet of the Prime Minister’s office in terms of getting this legislation through according to her agenda. This bill represents one of this country’s biggest economic reforms. It is grossly irresponsible to be ramming it through with hundreds of new amendments at the ninth hour. The public has had little opportunity to comment, and not a single MP—or very few MPs, certainly on that side of the Chamber—has any idea of what is in the bill.

The rush, as I have said, is about Helen Clark’s desire to have something to show on climate change after 9 years of Government, and her record in that area has been abysmal. Whether it be in forestry or in greenhouse gas emissions, this Government over its 9-year period in office has not delivered on its rhetoric.

Hon Parekura Horomia: Come on!

CHRIS TREMAIN: It is a fact, I say to Mr Horomia—in greenhouse gases, in forestry. There has been deforestation and increases in greenhouse gases over the last 9 years. Is that an acceptable record?

Sue Moroney: Does John Key believe that?

CHRIS TREMAIN: We are talking about the Labour Government’s record on this, I say to Ms Moroney. It has been appalling—absolutely appalling.

This legislation is, as I say, a rush to get a trophy on Helen Clark’s wall so that she can go out on the international stage and claim that she has such a trophy—as opposed to actually looking at the appalling record of this Government on climate change. Like I say, this bill is one of the most important pieces of legislation to hit this country in two decades.

Hon DAVID CARTER (National) : I want to pick up on the comment just made by my colleague Chris Tremain. I agree with him that the Climate Change (Emissions Trading and Renewable Preference) Bill is the most far-reaching legislation this Parliament has considered for 20 years. It is therefore the most far-reaching legislation that nearly every member of the House has considered. I do not think that Parliament has done justice to the process of this bill, either in the Finance and Expenditure Committee or in the Minister last week tabling close to 800 amendments.

The reason this legislation is so far-reaching is that the costs that will be imposed on our economy are huge. We know that. The real difficulty is in being able to accurately measure those costs. I looked back through the submissions that were made to the select committee, and the documentation we received from officials gave a carbon price starting at $15 a tonne. They acknowledged that it could be $25 a tonne, and they gave the odd example of the international carbon price being at $50 a tonne. The Reserve Bank of New Zealand, I know, has recently done some work and assumed it would be $21 a tonne. But I have just managed to find out that the current price is actually $45 a tonne. With that sort of price per tonne of carbon, electricity for household consumers will go up by 20 percent. But the particular area that I am interested in is agriculture, and according to the information presented to us at the Finance and Expenditure Committee, that price will cause a drop in farmer output prices of around 30 percent.

R Doug Woolerton: No, renewables won’t cost a cent.

Hon DAVID CARTER: Doug Woolerton can laugh about that, but if he bothers to go back and dig out the papers that he was presented with at the select committee, when he should have been taking part, he will see that at $50 a tonne the net effect on national sheep and beef budgets is a drop in profit before tax of 160 percent. That is the figure that was presented by the officials to the select committee.

R Doug Woolerton: They can bring the emissions back and not pay a cent.

Hon DAVID CARTER: Doug’s interjections are hard to respond to. He does not seem to understand any part of the legislation despite sitting on the select committee. But I tell Mr Woolerton, in the last couple of weeks that he has left in this Parliament, to listen carefully. If one has put in an emissions trading scheme that reduces the profitability of sheep and beef farmers by around 160 percent, they will not—

R Doug Woolerton: They won’t.

Hon DAVID CARTER: The member now interjects and says “They will not.” The officials supplied these figures to Mr Woolerton at the select committee. He took no active involvement in the select committee. If he had bothered to read his papers he would know that that was the figure that came from the select committee people—

R Doug Woolerton: I raise a point of order, Madam Chairperson. That is factually incorrect, and a person can check the record of the select committee. I was there almost every day—in fact, far more than Mr Carter was.

The CHAIRPERSON (Hon Marian Hobbs): With due respect, that is a debatable point, not a point of order.

Hon DAVID CARTER: As I was saying, if Mr Woolerton was there that much, and had taken a conscientious involvement in the paperwork presented to him, he would know the figure I am quoting came to us from the very officials who advised the select committee. That figure is that at $50 a tonne the average sheep and beef farmer will see his profitability decline by 160 per cent. I will tell Mr Woolerton what that means. It means that the sheep and beef farmers in this country will not survive. They will not survive, and if the member thinks the international market for sheep and beef products will dry up, then that is another reason why he will not be here for more than another couple of weeks. I say to Mr Woolerton that what will happen is that this production will then occur elsewhere, in other countries that have not imposed an emissions trading scheme on agriculture. Mr Woolerton needs to be reminded that no other country in the world is going down this path at the moment—no other country in the world.

Chris Tremain is absolutely right when he asked the question why we are rushing this legislation through just before the election. It has more to do with Helen Clark’s next job at the United Nations.

TIM GROSER (National) : I suspect that most members know the phrase “the devil is in the detail” and what it means. My interpretation of it is that whether one looks at a contract, whether one looks at a bill, or whether one looks at an international economic agreement, the bold preambular language is all very nice and very attractive, but the bits that actually matter are usually highly technical provisions formally contained in footnotes and annexes that only high priests can understand. That is the general experience that people have in mind when they use this phrase. When we are presented, as legislators, with 785 amendments coming on top of a bill of unbelievable complexity there is a high chance of mistakes, and a high probability that this Parliament is passing this far-reaching legislation with little idea whatsoever about its effects.

My colleague Dr Nick Smith has just given one example—only one example that we have recently found out about—in respect of cogeneration. I want to drill down into another issue, which I suspect is far, far larger than the issue of cogeneration. It is a deeply technical point—but remember the phrase “the devil is in the detail—and it is the implication of what is called the greening of the assigned amount units. It is about the Russian hot air units. The underlying question is—and I did ask the Minister during the Committee stage to come up with an economic estimate, but even an approximate one would have been fine—what is the likely long-term impact to our economy of this so-called technical change in limiting access to the cheapest available assigned amount units? No answer was given, of course; not even an attempt at an answer.

Let me just try to explore this a little more deeply. As I understand it—and I am no expert in this; let me make this clear—inside the European Union there is a range of prices for carbon credits. They range roughly from around €9 to around €20—that is around US$21 and NZ$44 to NZ$45. The difference is very large when one multiplies it by the Government’s estimate of some 22 million tonnes of carbon dioxide - equivalent gases that we will actually have to pay for. It makes a vast difference to the bill as to which end of that price spectrum one goes into. Of course outside the European Union even lower prices are available on the international market, and some of them no doubt are rather dubious. But nevertheless the point is that this is an integral part of the Kyoto Protocol framework.

We all know that inside the more extreme parts of the green movement this is actually a very controversial issue. They do not particularly like the idea of Russian hot air units and like to put maximum pressure on people to avoid using them. But it is part of the political balance of Kyoto. Without it, Kyoto would not have been put together; without it, the Russians would not have come into the Kyoto agreement; without it, we would be looking at a much different deal. So it is part of the negotiating balance of the agreement.

Of course, the people on the extreme end of this view do not seek to get a balance between the economic and the environmental sides of this equation, so they are not interested in the underlying rationale for this, which is to drive this down as we put a price on carbon in the international economy at least cost. That is the whole structure. But the people who do not care about these costs want to make it as difficult as possible for countries to meet their obligations using the full tool kit of the Kyoto Protocol. So I want to know from Government members: what is the nature of the deal behind this? What is the price range in practice, as a consequence of this enabling legislation? It is my understanding that the actual regulation will have to be written later, but what is the economic impact of limiting New Zealand’s access to low-cost assigned amount units? As far as the rationale of quoting the European Union, which scorns the use of this, is concerned I find this to be hypocrisy on a giant scale. First of all, it ignores the fact that the European Union has limited the key issue in its own emissions rating.

Hon BILL ENGLISH (Deputy Leader—National) : The Climate Change (Emissions Trading and Renewable Preference) Bill has all the feel of legislation that is being passed by a Government that does not believe it will be around to implement it. It has the feel of legislation that is being passed purely for political and symbolic reasons. As, I think, any number of people have suggested, one of those political reasons is so that the Prime Minister can put it on her CV that she has implemented one of the world’s most comprehensive emissions trading systems, in order to help her to gain more international recognition, and possibly employment, should she stop being the Prime Minister of New Zealand. We think it has that feel because the Government has proceeded in such a reckless manner with such complex legislation.

My colleague Nick Smith has pointed out the problems that arise from the fact that the legislation overlooks what has been one of the more popular types of energy efficiency in New Zealand in recent years, and that is cogeneration. In this case that directly affects Fonterra and our largest export industry. How can a Government conceivably market itself as being interested in sustainability, when it appears to have no idea what actually happens with regard to our largest energy users, and when it rushes through Parliament legislation that effectively rules them out of the system it is creating?

I think the legislation has the same effect on one of the largest enterprises in my electorate: the Finnegan freezing works, now run by Silver Fern Farms. It has just implemented a large-scale cogeneration project that means that all the energy, except the lighting energy, for that freezing works, which employs 1,000 people, will be generated on site from waste products. I have no idea whether this measure cuts out that project, and we have a matter of maybe hours to sort that out. That is a high-profile, big step forward in energy efficiency from the agricultural sector, which the Greens in particular lambaste month after month. The Greens have gone along with the Government’s reckless process that essentially says to that sector: “We want to kick you for doing nothing, but when it comes to writing the rules, we don’t even know you are there.” That is one of the reasons—only one of dozens of reasons—why we have opposed this legislation.

As my colleagues have pointed out, the National Party has, for several years, indicated a strong level of goodwill towards an emissions trading system. We have supported it and have argued that if we are to do something about climate change, that is the best method of doing it. The Government has persisted, as it does in many ways, with its own self-serving, partisan agenda, which it has put ahead of the interests of New Zealand. The interests of New Zealand are best served by an emissions trading system. Therefore, the interests of this country are best served by a considered and measured process that deals with all the issues now raised by something like 1,400 amendments since the Finance and Expenditure Committee stopped considering this bill.

Parliament needs to be clear about this. The bill spent a number of months before the select committee. The Opposition took a considered and diligent approach to submissions. We listened to them all, we considered all the issues they raised, and the environment in the select committee was positive, with the Greens, in particular, contributing from their depth of knowledge—even New Zealand First contributed to the atmosphere of goodwill. Since we stopped considering the bill maturely as a Parliament, the Government has wheeled out over 1,400 amendments and that is reckless. That flies in the face of the goodwill that the Opposition and all the other parties in Parliament—which are, I think, all represented on that select committee—applied to this legislation. The Government has decided to proceed regardless of the consequences. We can only presume that is because it does not believe it will be in office to implement the legislation. Of course, the consequences of this legislation are many and they are very complex. This legislation has, to me, the feel of the original fishing quota legislation.

SHANE ARDERN (National—Taranaki-King Country) : It is an honour to follow my colleague Bill English in this debate and to oppose the Climate Change (Emissions Trading and Renewable Preference) Bill. I do so on a number of grounds. First of all, I have all of the Supplementary Order Papers—that I know of—that have been tabled in the House. When we look at those Supplementary Order Papers we have to ask serious questions about the process of this legislation. Given the long select committee process and the arguments put forward by National throughout that whole process that this legislation needed time—and we certainly had not got it right at that stage—when we look at the 785 amendments and listen to all of the answers from the Government that National is just buying time to try to put off the inevitable and to protest against it again, we see that the only conclusion anyone can come to is that the process has been a mess and it has been shonky. It would be great if any Minister would take a call to explain to us why at this stage we have had over 1,000 amendments to this legislation since it came out of the Finance and Expenditure Committee.

I also have some photographs with me that I am sure the Minister would be interested in. In this photograph we have the beautiful Pūnehu Stream and Mount Taranaki in the background, and we also have a riparian margin of pine trees and native plantation. That is not a carbon sink under this legislation. Those pine trees are not a carbon sink; they do not take carbon out of the atmosphere according to this legislation. I have another photograph of the same farm with similar trees—Pinus radiata, well known to New Zealand—planted at the same time, in the same year, post-1990, and they are carbon sinks. The trees in one photograph are carbon sinks, and the ones in the other are not—same trees, same farm.

By using the Global Positioning System (GPS) we are able to measure, down to the nearest 20 centimetres, the area of each of these plantations. Most territorial authorities are using that technology for building and other resource consent applications, so this is not something the Government had to invent; it is already available. We know exactly how many trees there are and where they are, but the trees in one photograph are carbon sinks, and the trees in the other one are not. That is a bizarre and ill-conceived policy.

I would love the Minister to take a call to tell us what analysis was done in terms of the cost of establishing an area. An arbitrary figure of 1 hectare has somehow come out of the process. Arguably, I guess, it is easier to measure 1 hectare if we are measuring it with a tape measure, or perhaps we are back in the days of having surveyors out there with their chains—the 22-yard length chains—measuring the area. Instead, as I say, we could measure it by using GPS or satellite measurement, so we know the exact measurement using modern technology. Unfortunately, that is not able to be done in this legislation.

We also know that during the whole period from 1951 through to 2006, 1.9 million hectares of trees were built up—a massive asset, a massive forest in this country. Trees are the issue that is argued about most, and certainly there are special clauses relating to trees in this legislation. I note that last year 13,600 hectares of trees were cut down, with no intention of replanting them. Quite aside from the environmental debate, the economic argument that could be mounted around that issue is something that this Government should at least take a call on. The Government should explain to those who may be listening to this debate why it has come to the conclusion that the policies it has had up until now have brought about this absolute devastation to the forestry sector, but that the policies under this legislation are somehow going to turn that around and we are going to see reforestation again going forward as a result of this wad of paper.

Hon PETE HODGSON (Minister for Economic Development) : We are about half an hour into the debate now, and it is probably worthwhile taking a call in order to make just a couple of points. In response to the member who has just resumed his seat, Shane Ardern, I say—and I am sure this does not need to be said—that the Kyoto Protocol was put together with the idea that 1990 was year zero. It was done a long time ago. It was signed in 1987. It was signed by the National Party. That was 11 years ago, and that is why trees are counted differently. Secondly, on the issue of cogeneration, I say that that decision was made by the Finance and Expenditure Committee. Most of the members who have been speaking in the debate are on that select committee, so I will not address that point, but other members may wish to do so.

It seems to me that so far there is really only one question, asked by the member Tim Groser, which probably does need a bit of exploration. I remind the member of his question—and perhaps I am using slightly different language from that which he used—which is that given that the Russian hot air units are off limits, what does that do to price? The answer right now is that they do not alter the price at all, because they are not on the market. Of course, there is the possibility that they will come on the market, but then again, they are able to be used for wash-up purposes at the end of the quinquennium. At that point, although one cannot make a prediction because one does not know how many are coming on the market, one can predict that the price change may not be zero but it will be either very low or zero.

JEANETTE FITZSIMONS (Co-Leader—Green) : I would like to speak to clause 2, but just before I do that I point out to the National Party that the issue it has been going on about in respect of industrial heat is in the officials’ report to the Finance and Expenditure Committee, on pages 32 and 33, and then on pages 235 and 236. Several National members sat on that select committee, received that report, and did not raise the issue at the time. So to claim that it was an error, as National members were doing recently, and that the Government did not know that it had forgotten about industrial heat, is certainly contradicted by the evidence.

To return to the provisions relating to the transport sector coming into force, I say that this is the very heart of the obligations in the Climate Change (Emissions Trading and Renewable Preference) Bill, because until the sector has entered the scheme, nothing happens. The bill as introduced had the transport sector entering the scheme in January next year, so transport was going to cover its emissions for 4 years out of the 5 for which New Zealand is responsible. An announcement was made by the Prime Minister, in around April or May, that because petrol prices were so high, the entry of the transport sector would be delayed for 2 years, meaning that transport would cover its emissions for only 2 out of the 5 years for which New Zealand had to pay. The reasons given were high petrol prices, which were inflationary, and the fact that households would find it difficult to cope. The extraordinary idea was put forward that it would somehow be easier to add 6c a litre to the price of petrol in 2011 than it would be to do so in 2009. That seems to ignore the fact that 2011 is another election year, and that the long-term trend for fuel prices is up. Well, today petrol prices are 11c a litre less than they were when the Prime Minister made that announcement, which meant that the 6c could have come in and petrol prices would still have gone down, compared with what they were when the announcement was made. I think it would take a very brave person to predict that in 2011 prices for petrol will still be down. It seems very likely, in fact, that they will be considerably higher than they were even when the Prime Minister made this announcement. The timing was changed at the select committee, not because the select committee chose to do that but because it was a Government announcement and it was passed by majority at the committee. So that is what the bill now says. I predict that whoever is the Government in 2011, with an election coming up, will find it very difficult to add 6c a litre to the price of petrol, given where oil is going, and I fear that we may leave transport out for even longer.

I was also very interested to notice, when some Cabinet papers were released through the Official Information Act, that Treasury had advised the Government to bring transport in gradually, perhaps over 3 years or so—a little each year—so that there would not be such a sudden hit on either the motorists’ pockets or on inflation. That is exactly what the Green Party proposed, and has been proposing throughout the year. It is a matter that needs to go up in lights when the Green Party agrees with Treasury’s advice—it does not happen very often, but sometimes we agree. It is unfortunate that the Government chose not to take that advice, and that transport emissions will be allowed to grow because they are not covering the full cost that they cause to the country in terms of their greenhouse emissions. When the petrol levy comes in in 2011 we can expect that transport emissions will be even higher than they are now, and that therefore the hit on the motorists will be even worse. The important thing is that we need to start getting those alternatives into place, and until there is a proper price on carbon that will not happen.

CRAIG FOSS (National—Tukituki) : First, let me acknowledge the officials. It has been hard work going through the Climate Change (Emissions Trading and Renewable Preference) Bill, with all its various changes. The officials have been sitting in the Chamber until late every day, and I appreciate what they have been doing.

Huge thanks must go to the members of the public who submitted on the first version of this bill. They did a very good job. The members of the Finance and Expenditure Committee travelled up and down the country to listen to them. There were very considered and in-depth analyses all over the place. But those people are due an apology from this Parliament, because the bill that they submitted on is awfully different from the one we have before us now. They submitted on the bill before a thousand amendments were made to it just before it arrived in the House, and as my colleague Shane Ardern, who spoke earlier, said, there are 785 amendments before the Committee.

Why is this legislation being rushed through the House right now? Why is it being rushed through before our competitors have introduced similar legislation? Why is New Zealand taking the bleeding edge on the emissions trading system? There is acknowledgment out there of climate change, so why is this Government trying to push the bill through with a majority of fewer than two or three votes? The Green Party is not 100 percent happy with what we have here, yet it is still voting for it. Many parties on the other side of the Chamber are very unsure about this emissions trading scheme, yet they are still voting for it. Why put the issue at risk? If those who want to remedy the problem of climate change want the process to have any integrity whatsoever, surely they want the bills that are passed by this Parliament to have integrity by way of cross-party support across this House, rather than their being passed with a majority of just two or three votes, and just before an election. To sneak such legislation through the House before an election is an incredible admission of defeat on the part of those who are pushing it through. It is an incredible admission that they do not expect to be here in a few months’ time to do further work on this legislation. The bill in its current form should go back to the select committee, given that 1,785 amendments are being made to it after people had submitted on it, after they had spent so much time and resource on it.

It was announced that one of the parties supporting the bill had received in return a one-off payment of $150 for each household, to be delivered, apparently, via Working for Families, to compensate for the increased energy charges. From the way that the bill is written, yes, every household will get a one-off payment, but the increased charges will be there forever. The cost of being in New Zealand and the cost of doing business in New Zealand will be higher than the same kinds of costs of our competitors. Our costs will be higher than the same kinds of costs in the places where 80,000 New Zealanders move every year. Our costs will be higher than the same kinds of costs are where 45,000 New Zealanders move every year—Australia. Why are we taking the lead, ahead of those countries? We cannot afford to do so.

If this bill and what comes out of it do not have integrity, they will fail. New Zealand will end up paying twice, because the rest of the world is moving at a different pace from us, and we will end up having to adopt what they design, what they do, and what their time frames are, rather than our doing what the current administration thinks is gold-plated. It is not gold-plated. Nothing from this House can be gold-plated unless it has cross-party support. Climate change is bigger than one, two, or three parties in this Parliament. Sustainability is bigger than a few parties in this Parliament. It affects all of us. It affects our generation, the next generation, and the next generation after that. For what people say on the hustings about climate change and emissions trading to have any integrity, this bill must go back to the select committee to have further work done to it.

I challenge Labour members on the other side of the Chamber. I notice that the Minister in the chair, the Hon Pete Hodgson, was in Hawke’s Bay the other day. I challenge him to go to the processing plants in Hawke’s Bay, where 2,000 jobs are projected to be lost, and tell those people where the replacement jobs are. You should front up and tell them. Where is the engineers union on this issue? It is forecast that 22,000 to 50,000 jobs across the country will be lost because of the bill being in the form that it is now in. You should front up to the door, front up at smoko, and tell those people where those jobs will come from. I challenge members on the other side of the Chamber who are voting for this bill to do that.

I tell you what: at the very least it is—to put it kindly—misleading to not say upfront what the solutions are and where new jobs will be found to replace the jobs that will be lost. Those people’s livelihoods come from our agricultural-based economy, and you are putting them at risk. You are putting Fonterra at risk. You get up and talk about Fonterra, yet you are signing up to, and voting for, a bill that will cost it $30 million right now. The officials acknowledge that. How can you stand up and do that? The bill should be sent back to the select committee.

The CHAIRPERSON (Hon Marian Hobbs): Just before I give the call to anyone, I ask members, please, not to bring the Chair into the debate by using the second person.

Dr PAUL HUTCHISON (National—Port Waikato) : Thank you, Madam Chair, for the opportunity to speak on the very important Climate Change (Emissions Trading and Renewable Preference) Bill. National was pleased to support this bill in the first reading in good faith, in the belief that the Government would make every effort possible to ensure this extremely important bill was thoroughly and properly considered, because of its long-term effects. Indeed, it would have been ideal to work towards a consensus between the parties, because such a consensus would have been enduring.

Of course, as it has transpired, the select committee process in the Finance and Expenditure Committee was rushed. The process was flagrantly abused by the Labour Government, with little hearing time given to some of the most important submitters, and now the Labour Government is literally ramming through some of the most important legislation of this century. At the last minute, just prior to the select committee’s deliberation, there were a thousand extra unconsidered amendments. To make matters worse, at the beginning of this Committee stage there were 785 further new unconsidered amendments—amendments that the people out there in the sector have simply not had time to consider. This was, as the Hon Dr Nick Smith labelled it, an example of absolutely reckless irresponsibility by the Labour Government.

This afternoon I looked at the 2002 Climate Change Response Bill. I noted that the Labour Government has consistently been wrong over many of the issues around climate change. In the first reading version of that bill, the Labour Government had planned to send carbon police into the farms and businesses of New Zealand, with the right to arrest people if they considered it appropriate. That is how ill-considered and zealous the Labour Government was just a few years ago. That was described by Professor Joseph of Canterbury University as State-sanctioned trespass.

I will come back to the bill—it is absolutely appropriate that I do so. Last week, I also spoke to the chief executive officer of New Zealand Steel. He said that by rushing through this bill, a $1 billion investment in that very strategically important plant for New Zealand would be put at risk. Part of that investment is a $200 million investment in a vanadium extraction plant, and already $12 million has been spent on it. But as we sit here this afternoon, that development is being wound down. That has to be a huge tragedy. The chief executive officer reminded me that New Zealand Steel cogenerates 60 percent of its energy needs through its own processing plant, and that many plants around the world do not have cogeneration. But here in New Zealand we have a steel mill that has been verified by benchmark studies as being one of the most efficient in the world.

The Labour Government in its last set of amendments, which it did not consult widely with the sector over, has changed the rules again. That will significantly affect the trade-exposed industries, whereby credits are given only for the part of trade that is overseas. European mills, of course, are exempt. If Labour were to run the New Zealand Steel mill out of the country, two things are likely to happen. Firstly, New Zealand would have to import our steel, and with that would be all the carbon miles implied because of the huge distances that steel would have to be imported over. Secondly, an offshore replacement mill is highly likely to be much less efficient than one in New Zealand, and it would gush out far more greenhouse gases into the atmosphere than our mill does. It is almost as though this Labour Government wants there to be a loss for New Zealand and a perverse increase in emissions by passing this legislation so inappropriately.

CHARLES CHAUVEL (Labour) : We have heard yet another speaker—in this case one who was not even on the Finance and Expenditure Committee hearing the public submissions—bring up the shibboleth just now about the move overseas of a polluting plant to a jurisdiction that does not have any restrictions on carbon, as if somehow all New Zealand industry will be at risk when this legislation is passed. The member conveniently ignores—as do so many members on the Opposition side of the Chamber—the fundamental truth that the entire world will ultimately face a cost of carbon regime. Some form of emissions trading regime or a carbon tax is likely, at some point, to be a requisite for every country. So it is not as if there will be some great division of the planet between those nations that face costs of carbon and those that do not. It is time to stop peddling that myth. The evidence heard before the select committee backs up exactly what I have just said, even though it is not convenient for members opposite because it does not fit with their spurious arguments in opposition to this legislation.

The fact is that the bill as reported back from the select committee, and as it will be amended by the Supplementary Order Paper that is under debate now, has not changed in terms of the core design principles of the emissions trading scheme.

Hon Dr Nick Smith: So the detail doesn’t matter?

CHARLES CHAUVEL: Dr Smith clearly does not understand the scheme, as he has shown throughout the select committee process and throughout this debate. The reality is that it is a proposal to include “all gases, all sectors”. The reality is that it is important that greenhouse gas emitters should face the full cost of their emissions at the margin from the outset. That has not changed in any proposal before the House, or before the Committee at the moment. Assistance for industry remains at 90 percent of the 2005 emissions. There will be no free allocation of emissions units to firms that can pass off the costs of accounting for their emissions on to consumers. These core principles are vital to producing an economy that is resilient against the low-carbon future we must face for the sake of our planet.

The bill has been amended in ways that will enhance our existing ability to help New Zealand meet our international obligations to reduce greenhouse gas emissions, while protecting the competitiveness of our business. It is not impressive to hear members call for the matter to be referred back to the select committee. Every matter that is dealt with in the amendments before the Committee was exhaustively canvassed in the select committee process. The issues are very clear. The issues were ventilated. It is very clear for those who paid attention during the select committee and were present at the meetings that every matter dealt with by an amendment before the Committee of the whole House was considered in the select committee. There would simply be no merit in going back to a select committee process. It is time to stop delaying and to get on with the job.

Hon Dr NICK SMITH (National—Nelson) : The chair of the Finance and Expenditure Committee has told the Committee of the whole House that the select committee carefully considered all of the amendments. Let me tell this Committee what actually happened. The Government strolled in on the last day—the day on which we were to deliberate—with a thousand amendments. There were a thousand amendments, I say to Mr Chauvel, and if he believes that any single member of the select committee had time to consider their implications, then he really is pulling a very long straw.

I put this very simple question to the member opposite, and I could put hundreds of such questions—

Charles Chauvel: Some of us read our papers.

Hon Dr NICK SMITH: Oh, the member says he has read his papers. Well, let me check that by asking him a simple question. Why does new section 57, inserted by clause 43, not include reference to cogeneration? The silence is deafening. Now, members opposite may say that is just a technical issue, and they have got the concept right. Well, let me tell members the implication of not including cogeneration—that one word. That omission will cost Fonterra $13.5 million each year.

Hon Judith Tizard: Gibberish is not helpful.

Hon Dr NICK SMITH: Well, I ask Madam Tizard whether she would like to answer for me the question of why, in new section 69, inserted by clause 43, there is no inclusion for the wholesaling of gas and coal.

Hon Judith Tizard: When you start talking sense, we’ll all talk to you.

Hon Dr NICK SMITH: The member Judith Tizard says she cannot explain that.

The problem, I say to Judith Tizard, is that the process followed by the Labour members on this bill has been reckless and irresponsible. We had all these assurances before. Do members remember the Electoral Finance Bill? Do they remember that bill, from about a year ago?

R Doug Woolerton: What great legislation that was.

Hon Dr NICK SMITH: Mr Woolerton and New Zealand First say it is great legislation. It is legislation about disclosure, and I am somewhat surprised that Mr Woolerton would want to advance the cause—

The CHAIRPERSON (Hon Marian Hobbs): Dr Smith, speak on the Climate Change (Emissions Trading and Renewable Preference) Bill, please, not on another bill.

Hon Dr NICK SMITH: I was responding to—

The CHAIRPERSON (Hon Marian Hobbs): Ignore the interjections.

Hon Dr NICK SMITH: The parallel between the two bills is that we had all the same assurances from the Government on the Electoral Finance Bill that we have had on this bill, yet now the agency that is responsible for administering the Electoral Finance Act says the Act is a mess. It is more serious than that, because the implications of this bill are even larger than those of the Electoral Finance Act. Certainly, the Electoral Finance Act is a hassle for political parties and candidates, and it makes participating in an election a nightmare, but this bill will have an impact on every single household and business in New Zealand.

It is just reckless and irresponsible for this Government to be ramming this legislation through without the necessary scrutiny. You see, this Clark-Peters Government is not actually concerned—

Charles Chauvel: Crosby/Textor lines!

Hon Dr NICK SMITH: Well, actually, I can tell the member that Winston Peters is part of his Government, and the corruption that is being exposed in another room in this building—

The CHAIRPERSON (Hon Marian Hobbs): Come back to the bill, please.

Hon Dr NICK SMITH: Well, I simply say to the member opposite, who is part of this Clark-Peters Government—[Interruption]. Those members laugh because they are embarrassed; they know about this Clark-Peters Government and its irresponsible legislation of this sort.

I have a last, very important question. In stitching up the amendments and the support from New Zealand First and the Greens, the Government has announced $1.5 billion of spending on various measures. I ask the Minister in the chair, the Hon Pete Hodgson, where the money is coming from.

R Doug Woolerton: What part of it don’t you agree with?

Hon Dr NICK SMITH: I would simply like to know where the money is coming from. Can the Minister tell us that?

I will tell members what we are told. David Parker, the Minister responsible for this legislation, said the money was coming from the extra profits of the Government’s State-owned enterprises. The problem with that line of argument is that Dr Cullen has said—and it is on the public record—all of the profits from those State-owned enterprises will be required to meet the Government’s 90 percent renewable energy target, and any suggestion that the money could be used for alternative purposes meant that the Government did not have a hope of meeting that target.

I ask the Minister in the chair where the money is coming from that has enabled the Government to buy the support of New Zealand First and the Greens for this bill. Does any member on the Government benches know that? Judith Tizard had a lot to say for herself a few moments ago; would she be able to advise me as to where that money is coming from? Can the Minister in the chair tell me where the money is coming from? Mr Charles Chauvel, who was very keen to interject a moment ago, may be able to fill us in on that. I ask members where the $1.5 million is coming from.

Charles Chauvel: I raise a point of order, Madam Chairperson. The member referred to support being bought by the Government. That is not an appropriate reference, and he knows it.

The CHAIRPERSON (Hon Marian Hobbs): I take the member’s point.

Hon Dr NICK SMITH: All we know is that New Zealand First and the Green Party are supporting this bill only as a consequence of the Government agreeing to provide $1.5 billion worth of extra items. My question—

The CHAIRPERSON (Hon Marian Hobbs): Thank you. I am actually dealing with a point of order. I had thought the member was replying to that point of order. Objection was taken to the use of the word “bought”, because it has all sorts of undertones that are not particularly nice. I ask the member not to use that word. He can explore the concept, but I ask him to please not use that terminology.

Hon Dr NICK SMITH: We know as a matter of public record that the Greens and New Zealand First agreed to support this bill only as a consequence of the Government committing to $1.5 billion of expenditure: $1 billion for a solar water heating energy efficiency fund, in the case of the Greens, and a fund for compensation. My question to Government members, because we have not heard the answer to this, is: where is that money coming from? It is interesting that Government members have had much to say, but on a very basic question such as where the money—

Charles Chauvel: Ask Jacqui Dean if she can get it from overseas.

Hon Dr NICK SMITH: Would Mr Chauvel be able to inform the Committee? Where is the money coming from?

Sue Moroney: Ask Jacqui Dean!

Hon Dr NICK SMITH: Actually, Jacqui Dean is not a member of the Government, although she soon will be. But I thought the Government would know the answer to that. Maybe Mr Ashraf Choudhary could put the Committee in the picture as to where the money is coming from. Does Mr Woolerton know where the money is coming from?

R Doug Woolerton: I’ve got a pretty good idea.

Hon Dr NICK SMITH: Well, would the member like to tell us?

R Doug Woolerton: No, I’m not interested in talking to you about it.

Hon Dr NICK SMITH: The New Zealand First line is to say no, it is not going to tell us, because it is none of our business. This is Parliament and it is Parliament’s business. It is not the member’s $1.5 billion. I say to Mr Woolerton that this is not like the Owen Glenn money. This is public money, and the public has a right to know exactly where the $1.5 billion is coming from.

Members on this side of the Chamber are seriously concerned—[Interruption] I am sorry, Mr Woolerton?

R Doug Woolerton: I think you probably weren’t there that day.

Hon Dr NICK SMITH: The member is suggesting that I was not at the select committee on that day. The reality is that none of these measures were agreed to at the select committee. These amendments all came well after that. These are some of the 750 amendments introduced by the Government well down the track, and that really does show how devoid of responsibility New Zealand First is, in terms of the need to get such complex legislation right.

I also draw the attention of the Committee to a poll today from the Fairfax newspaper group. It asked people how many of them supported this legislation and the emissions trading scheme. Of those people, 12.6 percent said yes, 64.8 percent said no, and 22.6 percent said they had no idea what an emissions trading scheme was. I think that speak volumes, and we should reflect—

R Doug Woolerton: So why are you going to bring one in?

Hon Dr NICK SMITH: The issue that Mr Woolerton does not understand is that National would take a far more considered and balanced approach to an emissions trading scheme. We would not have this sort of reckless legislation whereby this Parliament does not have time to consider it—and let me take the very important issue raised by my colleague Tim Groser, which was the greening of assigned amount units brought in as a consequence of one of the 785 amendments. How many speeches have we heard from the Government to explain that? Zip! Zero! There has not been one. I say to this Committee that a provision as significant as that deserves to be debated a whole lot better than it has been.

Our concern is that this legislation is rushed, it is mistaken, it is a reckless law with huge implications for New Zealand businesses and households, and this is no way to advance it.

TIM GROSER (National) : I wonder whether New Zealanders listening to this debate would have fully taken on board that the last Government speaker, Mr Chauvel, was none other than the chairman of the Finance and Expenditure Committee, charged with the awesome responsibility of steering this legislation through it. It has been described by many people from many different perspectives of New Zealand life as the most important regulatory framework to be introduced into New Zealand since the 1990s. I wonder whether they would have truly understood that he is the man who had that responsibility.

Let me make this clear. In some respects, I am not sure whether we should be very harsh on Mr Chauvel, because he is a new member of the Government; he joined the Government only in the last 18 months to 2 years. I think we all understand the position that he was put in, which was: “You make sure that this bill is rammed through in the life of this Parliament, or your career is on the line.” We will never find a piece of paper saying that, but I think it is widely understood in this House that that was the case. So my comments are not personal, for that reason.

Putting that aside, I say he is living in a parallel universe. First, in describing a process that he had the constitutional responsibility of leading, he praised it as some sort of perfect process in which everybody had time to put his or her case, was heard carefully, and was given due consideration. I did not have the privilege of sitting on the Finance and Expenditure Committee, but even I know that scores of submitters came out of that select committee that he was responsible for bitterly complaining that they had been given 5 minutes or 3 minutes to put their case, when the whole future of their companies was at stake. Goodness knows what universe Mr Chauvel is living in! Of course, I think we understand why he was forced to conduct the inquiry at that pace, with so little regard for the views put forward by companies and by people who have put skin in the game.

But, of course, those people and their views are dismissed as special pleading. One of the things that amazes me about the political debate that I have heard from the Government side is the sort of view that there is this thing called the Government sector, and there is this not particularly pleasant thing called the private sector, and when the private sector talks it is special pleading. We could not have the Government sector, which is supposedly completely detached from the people who actually create wealth, bear any cost, because the bad polluters in the private sector would then get away with whatever they are meant to be getting away with. There is a complete lack of understanding that the Government does not have money of its own; the Government gets taxes from the people, and they are telling this Government: “Do this at your peril.” The Government gets the money to provide public services from the productive sector, and that sector is telling us time after time that this measure is a bridge too far.

We had another one today. It is a relatively small organisation but one I personally have a lot of time for, and that is the—what is the horticulture industry organisation called? Horticulture New Zealand is the new term for it.

Hon Darren Hughes: That shows how much time he has for them—he doesn’t even know their name.

TIM GROSER: I say to the member, who in his arrogance thinks this is funny, that he should consider the people out there in his area of New Zealand whom he will have to face down. You will have to speak to those people, and if you think this is just a joke—

The CHAIRPERSON (Hon Marian Hobbs): Please avoid the second person.

TIM GROSER: If the member thinks this is just a joke, I think he will have a nasty surprise. Mr Fenton, the Horticulture New Zealand President, stated: “The legislation has been rushed. It is not well thought through in terms of its impact on our position as a global food producer and exporter. We calculate this will cost our industry in excess of $40 million a year.” He actually went on to say things that were a lot more extreme than that, but I will let the member find that out on the hustings.

That is just the latest in a whole series of industry statements. Phil O’Reilly, the head of Business New Zealand, has come out with a very trenchant criticism. My colleague Paul Hutchison talked about New Zealand Steel’s view on this bill. But all of that is dismissed as special pleading, on the basis that only this wise Government is capable of measuring the actual economic cost, and we are told that it is very small and it might turn out to be a benefit.

One of the other things that disturbs me is that new middlemen are created by this legislation.

CHRIS TREMAIN (National—Napier) : A couple of speeches ago the chairman of the Finance and Expenditure Committee, Charles Chauvel, stood in the Chamber and said it was a fundamental truth that the entire world is likely to face a carbon tax. I am interested with regard to our major trading nations. I ask Mr Chauvel which of the following are likely to face a carbon tax in the near future. I ask him when the United States is likely to face a carbon tax, when Australia is likely to face a carbon tax, and when China is likely to face a carbon tax. I ask when Malaysia and India are likely to face a carbon tax.

New Zealand is going down the track of being one of the few nations, if not the only nation, to implement an “all sectors, all gases” emissions trading system. Let us focus on agriculture and consider which of the nations we export to are likely to face a carbon tax for their agricultural sector. Is China is likely to face a carbon tax for agriculture? Europe has a carbon tax now, but not for agriculture. When is Australia likely to face a carbon tax for agriculture? That is one of the six issues that concerns National about the policy.

National talked about balancing environmental and economic interests. We talked about industry incentives to exit New Zealand. We talked about windfall profits to the Government. In our minority report on the bill we also talked about an alliance with Australia to develop an emissions trading scheme, about the importance of small and medium sized enterprises, and also, lastly, about the unilateral phasing out of industry support.

It is the perverse incentives to exit New Zealand that I really want to focus on. One of National’s main concerns is the perverse incentive in the bill to export jobs and emissions offshore. The emissions trading scheme in its current form would encourage major industries like cement, steel, aluminium, and—this is most concerning—agricultural products to be progressively relocated offshore, and in most cases this would result, crazily, in increased global emissions overall.

Let us think about our dairy industry, which Mr Woolerton constantly talks about. The goal of the Kyoto Protocol is to decrease global emissions of greenhouse gases on a global basis. Now, the dairy industry has growth in dairy products globally. I ask Mr Woolerton whether New Zealand’s emissions trading scheme will stop the growth of those dairy products globally.

R Doug Woolerton: No, it won’t.

CHRIS TREMAIN: Probably not. The growth in dairy products will continue.

New Zealand is one of the most efficient producers when it comes to producing a kilogram of milk fat solids. We have created a situation where we introduce an emissions trading scheme to our agricultural sector, we put a cap on the production of milk fat solids in New Zealand—limit production—and we force production overseas where a kilogram of milk fat solids is produced less efficiently. So here we are, with a perverse incentive, implementing an emissions trading system that will increase the amount of emissions globally. How crazy is that? It is insane.

Those are some of the major concerns and perverse incentives caused by racing through with the emissions trading scheme that covers “all sectors, all gases” when a serious number of countries will not be facing a carbon tax in the near future. More to the point, many countries will never face an agricultural carbon tax—certainly not in the near future. Those are some of the concerns raised in National’s minority report. It is a considered report. We have looked at the issues logically and have come up with a range of arguments for not supporting the bill at this point.

R Doug Woolerton: National’s minority report is a whole lot of waffle.

CHRIS TREMAIN: How can that be? How can the argument around the dairy industry be a load of waffle? How can exporting emissions offshore, which would result in increased global greenhouse gases, be a good thing? That member will be facing those questions on the hustings. I thank the Committee for the opportunity to speak, and I rest my case at this point.

Hon JUDITH TIZARD (Minister of Consumer Affairs) : I move, That the question be now put.

The CHAIRPERSON (Hon Marian Hobbs): There have been, I think, 16 speeches and I am a bit worried because there has been a remarkable amount of repetition. I do not know whether members know, but I take notes of their arguments, and I notice the level of repetition. I will take one or two more calls—I do not know exactly how many—but we must move to new material. Speeches are becoming remarkably repetitive. I call Shane Ardern, and I live in hope.

SHANE ARDERN (National—Taranaki-King Country) : I shall start with some comments that are not repetitious. I was surprised to hear the chairman of the Finance and Expenditure Committee, Charles Chauvel, say that he had read all his papers and understood what he was doing. I know that member is reasonably honourable; he served for a brief period on the select committee that I myself chair, and I know that he does his research. I know also that he is a lawyer and that he practised law before he came into this Parliament. That brings me to this point: how could somebody with that amount of knowledge of the law, who chaired the select committee, and who, clearly, reads his papers, report back a bill that needed a thousand amendments on the last day of the select committee process, and needs the 785 amendments that are before the Committee today? I say to the member there is something that is worse than ignorance, and that is knowledge that one is doing the wrong thing, but doing it anyway. I ask that member to take another call to explain to us how he came to his conclusion.

My new material is this. Clause 6 of the bill defines what forest land is and what a forest species is. I will quote the definition of a forest species: “ ‘forest species’ means a tree species capable of reaching at least 5 metres in height at maturity in the place where it is located”. That is clear enough; I understand now. But I do not understand why a tree that grows like that is a carbon sink, yet a tree that does not grow like that is not a carbon sink. I would love it if the Minister in the chair, the Hon Pete Hodgson, would take a call to explain why. Where is the science—what science was presented to the select committee—that says that a forest species such as I have described is a carbon sink, yet, for example, mānuka, a native that grows over large tracts of New Zealand, is not? The Department of Conservation is encouraging mānuka, and it is growing more vigorously than it has done for a long time. It is being allowed to grow on forest land that has been cleared and probably will not be replanted in the exotics that were there. I ask why mānuka is not a carbon sink, yet a tree that grows in the way I described is one.

I also ask the Minister about the definition of “forest land”. It states “ ‘forest land’ means an area of land of at least 1 hectare that has, or is likely when the forest species reach maturity to have, tree crown cover from forest species of more than 30% in each hectare;”. Once again, the simple question is why that land is able to be calculated as a carbon sink, yet an area different from, or less than, that land, such as the area that can be seen in the photograph I have in my hand, is not. It is the same species of tree—Pinus radiata. One is a carbon sink under the legislation, and one is not.

I have further new material. Why do we have before us a suggestion made by some people who have done an enormous amount of work on this legislation that the introduction of these amendments will impose a cost of between $600 and $1,000 every year into the foreseeable future, for as far as we can see, on the average household? Why do we have that suggestion, given that National knows that, under the current proposal, the Government itself will be pocketing something like $700 million or $800 million from its own State-owned enterprises? I know that the Government is about to make announcements, or has made announcements, in terms of the deal that it has done with the Greens and New Zealand First in regard to trying to offset that cost, but the question that somebody needs to answer—a Minister, any Minister, someone who is here today—is why, at a time when New Zealand clearly is not competitive internationally, when 80,000 people a year are leaving the country, the Government thinks we should impose a cost of $600 to $1,000 per year on every household.

CRAIG FOSS (National—Tukituki) : I want to speak about something that has not been raised in recent speeches. In an earlier speech, I talked about the fungibility of the New Zealand system; the word was looked up and everyone knew what the word was. I will talk about the financial side of this legislation, because a previous speaker talked about how the rest of the world will suffer a carbon tax, or there will be one implemented in some way, shape, or form. Well, if that is true, it actually reinforces the point, because it is about the timing of New Zealand racing forward and doing what it is doing now under the form of this current legislation.

Let us say this bill goes through as designed here, given all these amendments and whatever else is about to be flopped on to the Table. We have to think about others who might want to do business in New Zealand. They will look at New Zealand’s supposed carbon neutrality, or Kyoto compliance, and at the balance sheets of New Zealand institutions—be they farms, businesses, or businesses possibly looking to migrate here and start up—and they will look at the cost of doing business in New Zealand. On some of those balance sheets they will see an item—a credit, or a liability—and then on those particular balance sheets they will see various items of New Zealand units, etc. Well, first, they will see those items and will ask their accountants what on earth that means. Then they will try to get someone to explain it, so that will cost them money to discover what the value will be of whatever it is that they are looking at to invest in New Zealand.

But then they will think: “OK, but is that bankable?”, which I spoke about in a previous speech. If I am buying a company in New Zealand or looking to invest into capital-deficient New Zealand, which is screaming out for foreign capital, which we need to build our future, then when I am pricing up something in New Zealand, I will see these carbon credits, or debits, or some units on a balance sheet. They may have been used with a bank to provide security—for example, if someone is buying a dairy farm. Members opposite keep saying that agriculture is not coming in until 2013, 2018, or whatever. However, they forget about the time value of money. The moment we know that something is coming in, in the future, we discount it back and look at the value today. So this legislation right here is impacting on balance sheets—today, right now.

We need certainty. We have just had 780-odd amendments to the bill. That is uncertainty, which makes the value of doing business in New Zealand harder and the cost of investing in New Zealand less worthwhile. The larger financial institutions around the globe on the starting grid, in particular, I know are looking to see what will happen in New Zealand, and to see what opportunities there are for arbitrage down here, where things have been mispriced, legislation has been rushed through, and there are arbitrage opportunities. I know they are, and by racing this legislation through right now, and being in front of whatever the rest of the world designs, New Zealand is opening itself up to be gouged out, and we will be left with some businesses having some assets on one side of the balance sheet and some liabilities on the other, but not being able to be matched because offshore entities will not recognise them. They cannot be banked against, because no one knows—and I ask the Minister in the chair to define these—under what international financial banking agreements credits will be recognised. Will it be the International Swaps and Derivatives Association? Will it be the International Swaps and Derivatives Association master agreement between financial institutions? Will the credits be used as credit collateral? I ask the Minister, in this economic situation we have right now, whether I will be able to use my carbon credits to get further funds from my bank in the US, or from a bank in Europe. These are the kinds of questions that need to be asked, and answered, before this legislation is thrust upon New Zealand.

This is not party political; it is for the good of New Zealand to get this right, as I said previously. Issues environmental, issues of sustainability are bigger than one party. The arrogance of some to claim the matter is theirs speaks absolute volumes. If this legislation right in front of us here goes through as currently designed, I tell members that unless those issues have been explored and looked at from outside New Zealand—and remember New Zealand is a debtor nation; we borrow much money from offshore—and unless this stuff can be used as credit against what we already have, this legislation will put New Zealand on a hiding to nothing. Believe you me, we will not be at place No. 22 in the OECD for much longer; we are heading further south faster, unless the banking side of this has been agreed and unless the banking and financial sides have been investigated. Not one Labour speaker has got up to tell me how this will work in a macro sense. Not one Labour speaker has got up to tell us how this will work in a global financial sense, and in recognising New Zealand’s balance sheet.

Hon Dr NICK SMITH (National—Nelson) : I want to talk about an issue that goes to the heart of New Zealand’s economic success over the last 160-odd years of our nation’s history—that is, efficient land use. The reality is that the very core strength of our economy has been the capacity for land owners to be able to put their particular land to the use that will generate the most wealth possible. I recall the days of my grandad in Canterbury; he used to talk about all the dairy farms disappearing. And 80 years later we are seeing them reappear. In the Nelson region, which I represent, we have seen that areas that previously had been put into forests are now being converted back into pasture and other horticultural-type uses. So one of the key parts in the Climate Change (Emissions Trading and Renewable Preference) Bill that National has concern about is the way in which the legislation will stop flexible land use into the future.

The real nonsense in this bill is that even if people do things that are absolutely proper for the environment, there will be a restriction on the use of those things. I will explain. This bill says that if people own pre-1990 forests that cover over a million hectares of land, and those owners want to change the land use to dairying, horticulture, or some other use, then they need to pay for the carbon that is absorbed in those trees. But sensible people have asked “Well, why don’t I go and plants some trees in an area of highly eroding hill country, where the trees will not only absorb carbon out of the atmosphere but have the added advantage of addressing the huge problem of erosion we have?”. So I ask Mr Duynhoven in the chair, and members of the Government, why they do not allow that flexible land use. Why is the Government saying that if I harvest some of those trees and replant trees elsewhere, that is not to be allowed under this bill? I attempted to move an amendment to address this very point, and the Government voted against it. I ask how many Government speakers have addressed the point. Not a single member of the Government has addressed the issue. Is it important? Well, of course it is important.

As I have said, flexible land use has been at the heart of New Zealand’s economic success story. The very reason that we are an OECD country with a good standard of living is that landowners have had that flexibility. I cannot understand why the Government will not allow that perfectly simple, straightforward amendment. I remind members that there is absolutely no cost to the environment. The environment does not know whether a thousand hectares of trees have been planted on that block or another block. All it cares is that carbon dioxide is reabsorbed by those trees. National says that this is one of hundreds of issues—hundreds of issues—that have not been properly debated. The Government has just said: “Stuff you lot out there! We don’t give a heck about landowners who are screaming about this provision. It is just a minor detail.” Well, it is a minor detail that will cost New Zealand tens, if not hundreds, of millions of dollars. It is a minor detail that will cost an organisation like the Anglican Church Pension Board—hardly the Business Roundtable—over $20 million. We say to the Government that the forestry provisions of this bill will not work, and if there is any area of the climate change debate in which we need to get the detail right, it is the area in respect of forestry.

In concluding, I remind Parliament of this Government’s record around forestry. Australia is on target to meet its Kyoto obligations; New Zealand is not, and the key reason for that is the deforestation that has occurred here over the last 3 years at a huge pace. The provisions of this bill will not work for forestry, which means that this bill will not work for New Zealand, and that is a tragedy.

The CHAIRPERSON (Hon Marian Hobbs): The question is—

Hon Members: Madam Chair—

The CHAIRPERSON (Hon Marian Hobbs): I am sorry; I began to put the question. The members did not call—either of them. The question is that clause 1 stand part—

Hon Dr Nick Smith: Point of order—

The CHAIRPERSON (Hon Marian Hobbs): I am sorry but I began to put the question—

Hon Dr Nick Smith: I raise a point of order, Madam Chairperson. I saw the Minister in the chair rise to his feet—I know that you were facing this way—and I think that it would be quite out of order for the Minister, wanting to take a call on this critical debate—

The CHAIRPERSON (Hon Marian Hobbs): I can inform the member that the Minister is about to move the Supplementary Order Paper splitting up the bill, and he would have been out of order. I am sorry, Minister, for saying that.

Hon HARRY DUYNHOVEN (Minister for Transport Safety) on behalf of the Minister responsible for Climate Change Issues: I move, That the Committee divide the bill into the Climate Change Response (Emissions Trading) Amendment Bill and the Electricity (Renewable Preference) Amendment Bill, pursuant to Supplementary Order Paper 233.

Hon MAURICE WILLIAMSON (National—Pakuranga) : If ever legislation needed to be given a little more time for consideration, it is this bill. It is this bill for a number of reasons. It is this bill because of decisions taken by Cabinet back in February 2007—Cabinet minute CAB(07)5/3A refers. An option B was decided on, yet that is not what we have here as a bill today. We then had a number of people from the bus industry take an issue to the Legislation Advisory Committee and finally take it to the Regulations Review Committee. I will canvas that issue a little more in further speeches later on, but the Regulations Review Committee raised some quite legitimate concerns and sent them off to the Transport and Industrial Relations Committee.

Due to what could I think be best called an administrative snafu within the Clerk’s Office or within the Select Committee Office, that advice did not arrive at the Transport and Industrial Relations Committee before this bill was considered and then deliberated on. I would have thought that this matter alone was a serious breach of process, if something as important as the Regulations Review Committee feels that it needs to write to a subject select committee on an issue and raise some matters. I will go through those matters in quite some detail as we debate this bill. I will certainly refer to paragraph (a)(i) in clause 52, “Regulations”, and to some other matters.

I do not think I have known a time in the history of this Parliament when this sort of thing has happened to a Regulations Review Committee type of letter raising serious concerns that has been sent to a select committee. It was written back in March of this year—it was actually written on my birthday, 6 March. For whatever reason it did not get through to the relevant select committee; I do not think we know why that piece of advice did not get through to us. The select committee, under the chairmanship of Mark Gosche, quite rightly went ahead and finally did its deliberation and consideration. National members tried to move, and I certainly moved in that committee, that this bill be at least sent back to the Transport and Industrial Relations Committee. I also gave a watertight commitment that National would facilitate consideration to all be done in 1 day. I gave the watertight commitment to the committee that if we brought the bill back, then we would do the consideration all in 1 day, and we would be able to consider it properly. We would be able to incorporate the changes that the committee felt were proper, and then we would be able to report the bill back.

I am sorry to say that not only did the Labour members vote against that motion but so too did Peter Brown from New Zealand First. Those members took the attitude that they would not let that advice get through to the relevant committee. That has nothing to do with the substantive issue, and I will reflect that at this point. That is a procedural matter, and that procedural matter is something that I think—[Interruption] Doug Woolerton can bellow all he likes. He should be ashamed to be part of a team that allowed a Regulations Review Committee report to a select committee not to be considered. He would be furious if he was on a subject select committee and he thought that the Regulations Review Committee had advised it of something and it did not have that advice, and then it boxed on regardless.

In order to facilitate what I think is something that might be quite useful, National would be prepared to put some support behind this legislation if the Minister in charge of the bill, Annette King, and the Government would support the set of amendments I am putting forward by way of a fairly extensive document, because if she looks at it carefully, and her advisers look very carefully, then she will see that it does exactly what Cabinet, in February 2007, actually agreed to. If the Minister can show me parts where it does not do that, then I am happy to drop those amendments. I have put in a reasonably full explanatory note with the document. I think that the explanatory note starts on page 14 of a 23-page document, so, unlike the explanatory note of a Supplementary Order Paper on the emissions trading scheme legislation, which says it amends the legislation, this document actually has quite an extensive explanatory note with it. It tries to take the bill back to what the industry and the participants in the industry thought that Cabinet had agreed to.

If that is what we are to do today, and if this Committee was to agree to taking it back—and it cannot be all that bad; it cannot be the dreadful Tories suggesting it, because it is in line with what Cabinet agreed to back in February 2007—then we would be happy to try to race through the amendments as quickly as possible.

Hon MARK GOSCHE (Labour—Maungakiekie) : The points raised by the Hon Maurice Williamson need to be responded to early in the debate in respect of the mistake made by the Clerk’s Office in not forwarding the normal letter from the Regulations Review Committee to the Transport and Industrial Relations Committee, thus not allowing us the opportunity to make the changes to the Public Transport Management Bill, as it sought, in the normal course. That is unusual, and the committee dealt with that by meeting last week and seeking to make a special report to the House, which it would have done had National members on the committee not denied us leave. So all the talk we have just heard is a little bit hollow. Maybe the honourable member was not aware of the situation, and I give him credit that that was the case because he was replaced on the committee by another member. We attempted to make a special report but were denied the leave to do so. We wrote to the Minister outlining that we supported the Regulations Review Committee’s changes and would have said so in a special report, but the National Party denied leave for that to happen.

It is interesting, because it is a normal procedure for the Regulations Review Committee to say that a select committee should look at this, that, and the other, and the Transport and Industrial Relations Committee did that. We found that, with the advice of officials, the Regulations Review Committee’s process was agreed to, with a very minor difference. So we wrote to the Minister and asked her to make those changes by means of a Supplementary Order Paper, if she considered it to be necessary. That leaves the matter as it should have been left.

To raise that matter as some reason why the bill should not proceed quite frankly is nonsense, because the recommendations of the Regulations Review Committee have been taken on board, as they would have been had the committee received them in the normal course of events. Had the committee received them, they would have been considered and deliberated on, and they would have been part of the report made by the select committee in its normal time frame. We tried to fix that last week, and we would have done so had there been cooperation. All that was needed was a simple resolution of the committee. Leave was needed so that the committee could proceed. That leave was denied, and that is why there is no report lying on the Table from the committee. Given that people may have to look at the Hansard in the future if the legislation has to be adjudicated on, I just needed to correct that matter.

Hon MAURICE WILLIAMSON (National—Pakuranga) : Just let me pick up that matter again. It is not good enough for Mark Gosche to say that the Transport and Industrial Relations Committee called a special meeting in the lunch break, which is when it was—

Hon Mark Gosche: It was in the morning.

Hon MAURICE WILLIAMSON: The meeting was actually in the lunch break, between 1 p.m. and 2 p.m., and the member knows it. And that is all it was—a special meeting at lunch time. I was not in Wellington, so I was unable to participate, yet I had participated—

Hon Annette King: That’s not our fault.

Hon MAURICE WILLIAMSON: Actually, it is, because Mr Gosche called the meeting at very short notice. All I can say to the Minister is that if she were doing her job properly, as a Minister should, she would have made sure that any advice from the Regulations Review Committee was taken into account by the committee, and it was not.

I want the Minister in the chair, the Hon Annette King, to tell us of one example of that ever happening in the past. I have done some research, and it is not known in this Parliament for a report to a subject select committee from the Regulations Review Committee, advising that it has some concerns that should be taken into account, not to have got through and for the Government to then say, when the report has got through, that it does not care and will not even let us have one day to look at it.

I repeat that that was the commitment—a watertight commitment—and the chairman cannot in any way say that National has ever broken its word on any commitment we have ever given to that select committee. We have always stuck by our word. We said we wanted the bill to come back to the Transport and Industrial Relations Committee for just one day so that we could look at knitting in the changes advised by the Regulations Review Committee, and that we would then report it back as is. It still could easily have been back before the House as needed. It could have easily gone through, given that the Prime Minister says we are going to box on into September, and probably even into October, as a House. So there was simply no need for the urgency and the rush. It is simply an example of appalling process. I do not think that any Parliament anywhere else in the world, other than maybe Zimbabwe, would tolerate such a—

Hon Annette King: Rubbish!

Hon MAURICE WILLIAMSON: The Minister keeps going on about this being rubbish, but she does not have a single example of such a situation ever occurring before. I have asked about it, and I can tell members that the advice given was that the best way to resolve this matter was for the committee that had heard all the evidence to look at it. The Minister should remember that. It should be looked at by those members who had sat listening to evidence on this very matter—a matter that New Zealand Bus, for example, had raised with Professor Taggart, whose submissions to the Regulations Review Committee concerned the delegation of lawmaking powers in the bill.

Those are all issues that the select committee should have had the ability to decide on in terms of how and where the changes, if any, would be knitted into the current bill, and it should have been done through a proper process. Otherwise, we are saying that the select committee process is a complete farce. The central issue was not put before us. Again, I agree that it was not anyone’s fault from the parliamentary side of it, in terms of any political party, but finding where the fault lies and saying: “Well, OK, we’ve now uncovered a massive snafu in the process—

Hon Mark Gosche: It’s all fixed.

Hon MAURICE WILLIAMSON: Mr Gosche keeps going on that it is all fixed, as though Labour has the right to decide what is fixed and what is not. This shows the sort of a steamroller dictatorship that this country is in. “All fixed”, says Mark Gosche, “like other members of the select committee, you don’t count. You don’t get to vote. You don’t get to have a say.” That is what he is saying to members of the select committee. He is saying that we do not get to do that—that it is all fixed because Labour has decided on doing something, which is a cosy little deal with the Minister putting forward a Supplementary Order Paper.

Where is the democracy? How does the Minister think the dozens and dozens of people who came to that select committee and made genuinely serious submissions on the bill will feel about the fact that an issue that is central to this legislation was not considered because we did not know about the Regulations Review Committee report? And how does she think they will feel about the fact that the select committee chairman, Mark Gosche, said: “Well, let’s not worry about it. Let’s not have the committee see it through.”?

It is not as though there is urgency, as such, for this bill to go through. This sort of issue has been floating around in the system for some time. In fact, Cabinet agreed to this particular legislation in February 2007. We cannot say this has been rushed legislation, because Cabinet agreed to it 18 months, or more, ago. Suddenly, in the very last week, when Labour members were trying to bang through a whole lot of stuff under urgency, they realised there was a snafu. Then the chairman, Mark Gosche, has the absolute cheek to say: “Don’t worry, it’s all fixed. We”—Labour, that is—“have decided how it will be and how it should be fixed.”

I say on behalf of the National Party that we find that a complete affront. Labour got the Minister to do a Supplementary Order Paper, and it is all done. We do not count, and we are not even allowed, as members of the select committee, to hear about it.

Hon ANNETTE KING (Minister of Transport) : I advise the member that we are not in urgency. The House is having a normal sitting. Maybe the member was not told, because, unfortunately, he has been on leave—or absent—as National’s spokesperson on transport for at least 2 weeks. It is since he told the people of New Zealand that they would not mind paying $50 a week—

Hon Maurice Williamson: I never said that.

Hon ANNETTE KING: Oh, yes, he said it. It is in the transcript from Radio New Zealand National.

Hon Maurice Williamson: Have a look.

Hon ANNETTE KING: I have read it, and read it, and read it. He said he does not know of one person who would not be prepared to pay $50 a week in tolls. He has been silenced by Bill English. He is furious with Bill English. He is very close to joining the ACT party because he is so furious about the way he has been treated as the spokesperson for transport.

I thank the chair of the Transport and Industrial Relations Committee, Mark Gosche, for his excellent chairing of that committee. I thank the members of the committee who participated in a constructive way. I point out to the people who are listening today that this bill is for the taxpayers, the ratepayers, and the passengers of passenger transport. If they listen to Maurice Williamson, they will find that there is one person, or one group of people, he has ever cared about—the owners of the bus companies. He has never had a policy that has passenger transport at its forefront. He never talks of passenger transport. He talks roads, roads, and roads. He does not care what the public said in submissions. He goes back to what the bus companies say.

Eighty percent of the money that pays for our passenger transport comes from taxpayers and ratepayers. They want to make sure that the money available for passenger transport is there for the benefit of the passengers, to give them a decent journey, and access to proper transport. All we hear from Maurice Williamson is about the process. We heard the explanation from the chair of the Transport and Industrial Relations Committee, and he put on the record what the process was. I tell Mark Gosche that I believe that that was the proper process. He did his best to rectify a mistake, not made by the committee, but as Maurice Williamson himself said “made by the politicians.” Mr Gosche did his best to rectify that; he called a special meeting to go over it. But because Maurice Williamson was not there and could not be there, he believes that somehow one should not count that meeting. Then, when they got the opportunity, the National members denied leave for the report. It is a word that starts with “h” that I am not allowed to use, when we have an Opposition member stand up in this Committee who rants and raves about the process, and then we hear the Opposition deny leave for a report to come back to this House. Well, I have to tell Maurice Williamson that he will have to do a hang of a lot better than that if that is the only argument he has.

Maurice Williamson has taken two calls on the process. Why does he not get to the substance of the bill? The public of New Zealand deserve decent passenger transport. We might argue about the level and the amount of money. I know the Green Party has always argued for more, and we are balancing that with the needs in transport. But we have a common goal, in that we want passengers to have a good journey, a safe journey, an affordable journey, and an accessible journey, and this bill enables that to happen. It enables there to be accountability for the money that taxpayers and ratepayers put into the passenger transport system, and enables us to have integrated ticketing—something Bill English said would not work. I say to him that if he knows a bit about transport let us hear it, because when he interjected on the second reading speech it was obvious he did not know anything about the bill. Having interjected, he got out of his seat, went and got the bill, and read it for the first time. I tell the National members to put the public first for a change, instead of their mates, who they think might give them some money for their election campaign. I tell National to put the public first when it comes to passenger transport, because they deserve good passenger transport in this country, and that is what they will get from this Government.

KEITH LOCKE (Green) : The Minister is correct when she says the Green Party is always arguing for more public transport. We will continue to do that, and the Public Transport Management Bill will help us to do so. It is a very good bill. It will help regional authorities across the country to properly plan and provide public transport, particularly in the bigger cities where one needs to have integration of the various bus services. The Minister mentioned integrated ticketing, which is quite important to that, as well.

Jeanette Fitzsimons from the Green Party does have some amendments to this bill on Supplementary Order Paper 249 in her name. Some of them are under Part 1, and I will explain them. Essentially, they are to allow the regional authorities to plan the whole bus service and its connections with trains, etc. in a way that fits passenger needs. At the moment there is a distinction between subsidised services and commercial services. That does not give councils control over the issues of when and where services are run, and the timetables for the commercial services are often out of sync with those for the rest of the system. The amendments that Jeanette Fitzsimons is moving under both Part 1 and Part 2 address that.

Under Part 1, an amendment to clause 3(2) inserts paragraph (ba), which “confers powers on regional councils to require all or any public transport services in their regions to be provided under contract with them, and consequently to discontinue any commercial public transport services provided in their regions that are subject to such a requirement”. An amendment to clause 4 elaborates on that. Essentially that does not mean that one knocks out all the commercial services; some services may continue to be unsubsidised on very popular routes. There is not the same requirement to subsidise them in order to get an operator to bid for them and take them on, but there will be a requirement on the commercial operator to tie them in with the whole system.

In the report back on the bill from the Transport and Industrial Relations Committee, the Labour members noted that local government in Auckland is united in supporting the addition of option C, which is essentially what I have described in Jeanette Fitzsimons’ amendment. The report back stated: “We also received letters of support from other metropolitan regional councils supporting Auckland’s position.” I think that is true. The Greens would have written something like that as well if we had been represented on the select committee for that bill. We would have been very keen to do so, but having only six members in the Green caucus means that we cannot be on every committee for every bill. But that does not mean to say we do not think this is an extremely important bill for the progress of public transport.

That is particularly the case in the big metropolis of Auckland, where I come from—and I know Mark Gosche who spoke earlier comes from there, too. We have been grinding away on trying to improve public transport in Auckland. The patronage of the bus services has increased, and the next step is to plan them better, increase their frequency, increase their interconnection, and have integrated ticketing so that people can hop on the buses very quickly with their single ticket, hopefully in an electronic form. I think bus patronage will go up substantially if that is the case. But at the moment some people do not use public transport because of the lack of connectivity—they are waiting between bus services too long, etc. This bill is going to address that. I know that the people on the Auckland Regional Council are really keen to promote public transport. All the planners are ready to go, and once this bill is passed it will make a big difference to public transport in Auckland, which is particularly important.

There was a question in the House earlier about the price of oil—an exchange between Michael Cullen and Jeanette Fitzsimons. As the price of oil goes up—and although it may be dipping a bit now, it will continue in general to go up—and as demand outstrips the supply of oil worldwide, we will need to have better public transport systems in place.

PETER BROWN (Deputy Leader—NZ First) : New Zealand First supports this bill, with the amendment in my name.

David Bennett: Whose name?

PETER BROWN: In my name.

David Bennett: Who is putting it up?

PETER BROWN: The member over there should learn. He has been here for 2 years. There is an amendment on the Table in my name. I have put it up.

David Bennett: Really?

PETER BROWN: Yes.

Charles Chauvel: The National Party supports it!

PETER BROWN: I think the National Party should look at it. I do not know whether the member over there can read, but he should take a damn good look at it and pay a bit more attention to what goes on in this Committee, and certainly pay a bit more attention at what goes on in select committees.

We do not believe that going down the Auckland Regional Transport Authority line is the right way to go. It is not necessary in Wellington, it is not necessary in Christchurch, and it is not necessary in Queenstown. The full contract system works in many other provincial areas because that is the only option, but we believe the Auckland problem could be solved with forward-thinking, as they have in Christchurch and in Wellington. When the Infratil people, the owners of New Zealand Bus, came to us, I have to say that I was absolutely, immensely impressed by their enthusiasm, their determination, and their competence. So we are amending this bill to allow for the private operator to have some say in the way the bus network works in Auckland. We are not prepared to go down the track where the regional council dictates what is what, because we value enthusiasm, determination, and competence, and we think this bill—[Interruption] Certainly, as I understand it, the Greens are going to move an option C; if option C comes into being, then it will stifle those three attributes.

We know Auckland needs integrated ticketing and integrated services. We know it needs a bundling of services, and we think those essential qualities can be achieved by dealing directly with the bus companies. I know that Auckland has had its problems in the past, but I believe there is a new will within the bus companies—in New Zealand Bus, in particular, but also in some others—to improve things for the public. New Zealand First is not prepared to stifle that enthusiasm and that ability to change or amend things, by supporting the Auckland Regional Transport Authority approach. New Zealand First will be opposing the bill if it in any way, shape, or form embraces option C.

In Part 1, the part we are dealing with now, there are a number of amendments in my name. They are minor amendments—technical amendments—and I know there are similar amendments in the Minister’s name on her Supplementary Order Paper 248, I think it is. We have to make a choice, and New Zealand First is determined to stick with the amendment in my name on behalf of New Zealand First, because we think it will improve the bill. The amendment will give the bus companies a fair go—a fair crack of the whip—and it will allow the Auckland Regional Transport Authority to have the umbrella-type structure it wants, but it will be compelled to deal with bus companies. As I said earlier, we are not prepared to have a regime in Auckland—even if it is not the capital city, it is a major city when it comes to bus transport—dictated to by a regional council, with no option and no obligation.

What concerns us is that the Ministry of Transport undertook a study with a consulting group and with the Auckland Regional Transport Authority, and did not make that information known to the bus companies, nor even to the select committee. We think that is the wrong way to go. There was some notation in a letter to the select committee, but that was all.

PANSY WONG (National) : Talking about process and procedure is important in Part 1, because although the Minister is trying to bluster that this bill is all about passengers, the bill clearly states that it clarifies and extends the function and powers of regional councils. That is why National took the report from the Regulations Review Committee very seriously.

I want to put some facts right. A special meeting of the Transport and Industrial Relations Committee was called in a hurry, as we heard from the Hon Maurice Williamson. Even after he had given a watertight guarantee that the bill could be referred back to the Regulations Review Committee and come back in a day, the chair and the New Zealand First member disagreed. They called another meeting, to consider the special report that our committee was never meant to deliberate on. So we met to consider the report, but once again Labour and New Zealand First ganged up together to try to ride roughshod over us. The reason why National cannot agree to a deliberation on the special report is very, very simple: we have major concerns that the recommendations from the Regulations Review Committee were not agreed to by the officials.

Hon Mark Gosche: What are they?

PANSY WONG: It is really disappointing to hear that the chairman of the Transport and Industrial Relations Committee is not familiar with the content of the special report and does not realise that the officials did not agree to all the recommendations.

For a start, out of the six recommendations made by the Regulations Review Committee, three—one, two, three—have been taken up by the officials, and that is a worry in itself. Those recommendations include the deletion of the requirements for plans, the deletion of the ability to add to the definition, and the clarification of circumstances. The officials said that, yes, they would agree to those recommendations, but one recommendation of the Regulations Review Committee is about the deletion of the ability to add to controls by regulations unless there is clearly a need. The Regulations Review Committee said that unless a need was clear, and that people knew beforehand, regional councils should not be able to introduce a change.

But the officials do not agree to the recommendation being adopted. The reason is that they want to restrict the regional councils’ power to adopt a control in a relatively short time without the need to amend the primary legislation. Let us listen to this very carefully: this bill consists of a clause that would allow regional councils to introduce and adopt a control in a relatively short time without the need to come back to Parliament. That is a huge, huge power to give away, and the officials want to minimise that power by recommending the addition of a provision requiring only that the Minister of Transport should consult regional councils, public transport operators, and the New Zealand Transport Agency.

We all know by now that whenever consultation is used in this way, it usually means that the ministry has decided on a course of action. It says it will go out to consult, but that does not mean that it will actually adopt the results of the consultation with operators and all sorts of sectors. We all know by now, for example, that before this bill came into Parliament it was consulted on widely and the sector agreed to option B, but actually option B+ is being adopted in the final bill.

So there was a very good reason why we have stuck to our agreement. We agreed to the meeting, but we cannot agree to the deliberation of these recommendations, particularly—

The CHAIRPERSON (H V Ross Robertson): Is the member calling again?

PANSY WONG: I will just clarify that. We agreed to that short meeting, we considered those recommendations, but we cannot agree to ignore a very significant recommendation from the Regulations Review Committee not to give a power to councils to introduce a control at short notice That is abuse of authority.

National continues to be very responsible in making sure that process and procedure are being adhered to, because after all, this legislation has the implication that regional councils could exercise a control that could infringe on private property rights. We have talked about how private bus operators could work long and hard to develop a route into a commercially viable state but a council might be able to introduce controls, etc., to make it commercially not viable, and then use that excuse to withdraw the route. Then ratepayers and taxpayers would end up paying more.

National has very good reasons to be very suspicious of this legislation. When the bill was first introduced into Parliament, its purpose clause, clause 3, stated: “The purpose of this Act is to contribute to the aim of achieving an integrated, safe, responsive, and sustainable land transport system.” It took us a lot of effort and deliberation to reintroduce the word “affordable”, and that word has now been reintroduced into the purpose clause of this legislation. There was a hidden agenda in the Labour-led Government—once again—with the aid of the Green Party and, possibly, to a certain extent New Zealand First, to drop the word “affordable” and to make commercially viable routes unaffordable, in order to make sure that public transport might become unaffordable, from the point of view of ratepayers or taxpayers in terms of subsidies. We could have bus routes that are really working well at the moment, but because of this desire to have overall control over every service, ratepayers and taxpayers could end up paying a higher subsidy—not for better services, and not for services that are responsive to passengers, but maybe just for planners who like to have a grandiose idea of how public transport should be administered or planned. So National is very happy that at least, after long deliberations, we have introduced the word “affordable” back into the purpose clause of this legislation.

Part 1 and Part 2 are really all about the controls, authority, and powers that will go into the transport authority. That is why the process and the individual provisions are very, very important. It is just as well that National has been there every step of the way; otherwise, we would have ended up with a public transport system that was not affordable because of that word not being included in the original purpose clause of the bill. Can one imagine that in New Zealand we could dream of implementing a public transport system that could be unaffordable for passengers, ratepayers, and taxpayers, just because some planners had a grandiose vision of how the public transport service should be run?

I want to put the record straight. Unfortunately, the advice from the Regulations Review Committee went missing. We are not blaming anybody for this, but we agreed in good faith for the bill to be referred back to the select committee so that we could examine those powers and controls.

DAVID BENNETT (National—Hamilton East) : As we have debated the Public Transport Management Bill, some serious issues of process have come up. The Transport and Industrial Relations committee, a select committee that had functioned quite well for a number of years, had a number of difficulties with regard to the information that was filed in front of it. The way that some parties on that select committee acted in respect of information and of their voting status, and the way that the select committee was not given due entitlement to discuss and consider all the issues, are really a reflection of what we are seeing from this Government.

The New Zealand First - Labour Government is a dying Government. This Government is in its last days, and it will do anything to pass what it sees as being its legacy for New Zealand. It is a legacy whereby the Government has not actually achieved the goals that the people wanted their Government to achieve. The legacy is built around personal ambition and personal reflection—not about the issues that count for New Zealanders—and it is based not on honesty and truth but on fallacy and the deception of the public, through a number of pieces of legislation.

This bill is another example of such legislation. It is an example of Labour rushing things through, saying one thing, and doing another thing. It is another example of Labour making an agreement with the commercial players in an industry, then changing its mind just at the time that it wants to enact legislation. It is another example of how New Zealand First works with industry and also with the Labour Government when it needs to, can do, and wishes to. The bill is tainted by both political parties that are together on this bill having changed their tack, to the detriment of passengers in the Auckland area especially.

There is an issue in public transport, and there are some major players there that the public need to be aware of. Those players are, firstly, the passengers themselves, who need a public transport system that provides them with alternatives for their transportation. Secondly, there are the players in the industry, who provide a lot of the transport networks and opportunities. Thirdly, there are the regional councils, who have a vital role to play in providing some direction to the services. All those parties need to work together, and it is the Government’s job to be the glue in between all of them and to provide some solutions.

The Government had a solution, which was agreed to by everyone concerned. But then, suddenly, Labour decided it had a better idea. Maybe it was influenced by the Greens. Maybe it had to do a deal with them and they tried to get a higher public transport component in the deal, which is why option C became a viable option. Then we had another option that sort of came out of the headwind of New Zealand First, for some unknown reason. The movement has been away from what had been glued together as an agreement between the main parties, and now we see a political debate between the ideals of what the Government wants, in terms of total control, and what New Zealand First is talking about, with regard to the bus industry having its own mandate.

Let us go back and discuss this issue in a proper way, in order to get a common solution that is for the benefit of public transport users in Auckland. Let us go back and look at the solution that was proposed and agreed to by the people involved. That is what the Government needs to do. We do not need to be debating a bill that reflects just one ambition or one desire and does not take into account the reality of what could be found to be a common solution. We face that real dilemma here today, and it is to the shame of this Government. This Government is passing legislation without due regard to what it could actually achieve. The Government is trying to pass legislation to give a mandate to its supporters, and to try to pay back people who have supported it. New Zealand First and Labour will be known as a Government that tried to pay back its supporters in the last month of its term, and they will go down together as parties that have been doing that together. That is a tremendous shame, because we believe that there is the option of implementing what the parties agreed upon, that we should go back to what everybody had agreed upon as a workable solution, and that that could actually provide the options that public transport providers and users wish to see provided.

When we look at the procedural aspect of what happened in the Transport and Industrial Relations Committee, we see that a mistake was made. There was not the information provided and the process followed that one would normally expect, and the Regulations Review Committee took the very unusual step of writing to our select committee and informing us of that. A special meeting was held about that issue, and the process involved left a lot to be desired. I do not blame my chairperson, Mr Mark Gosche. He was under instructions, I think, from higher up in the food chain of the Labour Government. He would have been told that whatever happened, it was up to him to get this legislation through. He would have been told not to worry about taking the approach that he would normally engage in to the select committee process.

Mark Gosche knew that he was not doing the right thing, but he had to do it because he was told he had a deadline to meet. He had only 2 weeks of House sitting time left, and he needed the bill to be passed before that deadline. There was no reason why Mark Gosche needed to call that meeting so quickly. There was no reason why he would want to push the legislation through, but he was told from on high that this bill was one thing Labour wanted to get through in its dying days, and that it was his job to beat the process, to go above the process, and to just do whatever was required so that the legislation before the Committee today would be passed.

It is a shame when someone uses the political process in that way. Why would people want to use the political process of New Zealand in a manner like that, just to fulfil their private ambitions of passing legislation, just to pay back their supporters, or just to pay back the interests that some parties in the New Zealand First - Labour Government feel they need to? This legislation is not about looking after passengers. Passengers need support and direction; they do not need a Government that just goes to one side of the argument. There are players involved in the decision making on this issue. Those players had together come to a decent solution that was in the best interests of passengers, yet the Government has ignored that. The Government has gone beyond that. It has abused the process of the select committee, and it has abused the process of this House, effectively, in doing so. The Government has done that just in order to pass its own legislation.

Mark Gosche’s career, which has had high pinnacles in this House, will now be in tatters after he had to use the select committee process in that way. He will not be a happy man—he is better than that, and he knows he is. He could have dealt with this legislation in another way: one that actually satisfied all the parties involved. His problem was that he ran out of time; he had only 2 weeks in which to pass this legislation. The Government has run out of time; it has only 2 weeks left. It knows that, so it is trying to do all the little quick-fix solutions that it can in its remaining time. It is just a shame to see a career like that of Mark Gosche being abused in this political environment to fast track legislation that needed time to be debated, and that needed to go back to the select committee so that we could relook at the issue and come to a full solution that would actually be in the best interests of the public transport users of New Zealand, especially those in Auckland.

Public transport users need that kind of support, and they need a Government that will provide solutions, listen, and be ready to work in the best interests of all the players—not just in the interests of certain political agendas and parties.

Hon MAURICE WILLIAMSON (National—Pakuranga) : I want to carry on a little from where I got started in the first couple of calls, with regard to why National has put up a series of amendments to the Public Transport Management Bill. I make it absolutely clear now that if the Government were to support the amendments we have put up, we would support the legislation. I want to make it even clearer. I believe—I truly, truly believe—that the amendments I have put up are a complete and absolute reflection of what the Government agreed to at Cabinet in February 2007. I say that because I have looked at the Cabinet minute, I have looked carefully at what it says, and I believe that my amendments reflect exactly what Cabinet agreed to. This is not the National Party running its own agenda or—as some of the grubby little comments I have heard coming from some members suggest—some bus company’s agenda. I say to the Minister that if she can find anything in the amendments I have put up that is inconsistent with Cabinet’s agreement in February 2007, then I will accept that we are wrong.

I repeat, so that people listening out there can understand what I am now saying, that our amendments are to try to implement what I think was a proper decision—that is, option B, which then got cannibalised during the process of drafting up the legislation to an option B+, and is now in danger of getting cannibalised even further to becoming option C, which is what the Greens want.

For the sake of the poor old drive time listeners out there, who will not have a clue what these options are, let me try in a nutshell to give members of this House and the drive time audience a bit of a lesson about what is going on here. There are two forms of bus service in any city. If we take Auckland, for example, we see that there are those we call commercial services, where a private sector operator, like the very good Howick and Eastern Buses in my electorate—and even in yours I think, Mr Chairperson—operates. They decide that they will run those services because they can make some money by carrying passengers and charging them for it. They are commercial services, and for those commercial services they get no subsidy whatsoever. They just do it like any other company out there, like a taxi company or a supermarket decides to operate its business.

Then there are what we call contracted services. I say to those members of the public who understand how the public transport system works that there are specific routes and specific times of day on those routes where it is not commercially viable for a bus company to operate. If it did, it would just lose money and go broke—no one would do it. So there needs to be some form of a public passenger transport subsidy paid for those routes.

Again, National is fully supportive of that. We understand that if one wants a viable, integrated, across-the-network operation one cannot just have buses running between 7 and 9 in the morning and then suddenly nothing until 4 o’clock in the afternoon. So the regional councils are given very large sums of money—$350 million, I think, in this year’s Budget—to use as public transport subsidies. They go out and say that they want to contract with bus companies to provide certain services, and in return they will pay a per-passenger subsidy in order to make it viable.

I want members of the House to understand that those are two very distinct worlds. There is a commercial world, where companies put some skin in the game, where they invest in their own buses, where they decide what they will do, and where they go out and charge what fares they like; and then there are the contracted services, where the Government, or by way of its proxy Government agency, the regional councils, says that it wants certain contracted services and it will buy them by paying subsidies.

There is nothing wrong with those two worlds. What is wrong is the degree to which this legislation will now come in as heavy-handed, jackboot legislation—and if we go to option C it will not only be heavy-handed, jackboot legislation but it will be almost Trotskyite-type stuff—where we will be able to dictate to a private sector bus company not just the stuff that we are contracting with them and paying them a subsidy for. Again, that is quite proper and quite right—he who pays the piper should call the tune, and if I am the regional council, with several tens of millions of dollars of subsidy to subsidise the route, then I should have that power. But this legislation is also looking to at least encroach into the stuff that is not being contracted. If option C from the Greens gets in, it will give the regional councils total authoritarian power to dictate to a private sector operator who has put his own money at risk and who has built his own business.

I will finish this speech quite quickly—it will be my last call on this part. All I want to say to the Minister—I am sorry if it sounds like a cracked record, but I repeat again—is that we are not trying to get the National Party’s view through these amendments. The changes I have put forward by way of my quite extensive amendments, which have had a lot of thought and work go into them—

Hon Annette King: Ha, ha!

Hon MAURICE WILLIAMSON: Well, the Minister laughs. Basically, if she thinks my amendments are not worth supporting, she is saying that Cabinet, which decided on these very issues back in February 2007, was a bunch of dunderheads. This will be really good—I ask those people listening to the debate tonight to listen carefully when the Minister takes the call, and to listen to her tell us why my proposed amendments are not a reflection of what Cabinet agreed to.

There is one last bit that we will get into a lot more in the debate on Part 2, but again I go back to the process. You see, when the Regulations Review Committee wrote to the Transport and Industrial Relations Committee, which never received that correspondence, it suggested some amendments that the committee might like to consider. I understand why, if those amendments were as simple as “delete clause 10”, that would not need any deliberation or consideration—it is just saying that clause 10 is wrong and to delete it. If that is the sort of recommendation that had come to the Transport and Industrial Relations Committee, I accept that the Minister is right and I accept that the chairperson is right: we could have just done it by a lunchtime meeting and said “Well, they say ‘take out clause 10; insert this; delete that’.” But the recommendations from the Regulations Review Committee have some things of a nature that I think members of the committee needed to put some work into. An amendment to clause 10(1)(a) was: “clarify the relationship between controls adopted under clause 12 and regional public transport plans to ensure that controls are subject to a consultation procedure before they are adopted.”

So the recommendation was not to “delete clause 10” or “add the following two words”. It was a recommendation of a very general nature, which the Transport and Industrial Relations Committee should have had an opportunity to sit down to consider and ask how best it could clarify that relationship. It is a nebulous recommendation, quite broad and far-reaching—and there is more. Yes, the committee went on to say we could amend clause 12 to include provisions, but it then said we could insert some criteria into clause 52(a)(ii) to, again, clarify the circumstances in which a commercial service may be exempt from these controls.

I say again to the Minister in the chair, the Hon Annette King, that those words are not definitive. They need some thought. How do we clarify that? Members of the select committee, who had considered this legislation and listened to all the submissions, should have had the opportunity to sit for one sitting day—given that this has been in the pipeline since at least February of last year—and ask how those words could be clarified.

Some other recommendations that came from the Regulations Review Committee were far more definitive, and I think they are fine. One recommendation is to delete clause 10(1)(j), unless a clear need for expeditious amendments to clause 10 by regulations is demonstrated. I think that is fair enough. Another recommendation is to amend clause 12 to include provisions for a merits-based appeal against the imposition of a control by an affected person. Well, that is interesting. I do not think it is all that definitive. I think there may be members of this House who have a different view on what provisions could go into that.

I repeat that this is a very sad day for the democratic process. I ask the Minister, and we will watch her like a hawk on this question, whether my amendments reflect what her Cabinet agreed to—not the National Party, the bus company, or anybody else whom the dreadful accusations might come flying at us from. Keith Locke from the Greens should listen carefully to this. This is what Cabinet agreed to in February, and I have put up those amendments in order to say that if that is where we go—and we agree with what Labour members put together as a Cabinet, and the minute reflects it—then National will actually support this bill in both the Committee stage and the third reading.

We were told about the stalking horse. Because Peter Brown made it clear he would not support option C, we were told, almost that night: “Oh, guess what? The Minister is doing a deal with the Greens. They’re going to stick up amendments to get option C. The Minister will make out that she had to go with it, you know, because the Greens are doing it.”

Hon Annette King: No we won’t. We’ll just go with it.

Hon MAURICE WILLIAMSON: The Minister says they will go with it. Labour members are going with it, so now they have circumvented their old mates in New Zealand First, whom they no longer need. They can slap them on the scrapheap, and say “OK, you are not supporting us on this.” We knew all along that option C was going to come, either through a Supplementary Order Paper from the Minister, because that most certainly was being considered—

Hon MARK GOSCHE (Labour—Maungakiekie) : It is just amazing that three National members of the Transport and Industrial Relations Committee are getting up and flapping their lips for the sake of it, without making a single ounce of sense in the debate so far. They are concentrating on something from the Regulations Review Committee that I will reiterate. The Regulations Review Committee sent a letter. It got lost in the system. It was not the committee’s fault, it was not anybody’s fault, but it got lost in the system. We dealt with it last week. We gave notice of the meeting the week before.

Hon Annette King: A whole week?

Hon MARK GOSCHE: A whole week. We said we would take this very simple stuff and look at it, and we did, and it took us 25 minutes. We had a report from the officials that said they agreed with what the Regulations Review Committee said, and that they would change the Public Transport Management Bill accordingly. There was one change they had an option on: whether to delete a clause or to put in a consultation clause. They have gone with a consultation clause. We have had all this debate from the National Party’s three spokespeople on transport—who have not got a clue.

We heard during the course of the submission process that there are three major cities in this country that spend big on public transport: Christchurch, Wellington, and Auckland. All support the bill. Christchurch says: “We’re doing this now. Pass the bill so we can legitimise it, because we’ve been doing what the bill outlines, anyway.” Wellington said: “We need the bill as it is, and we want you to pass it.’ Auckland said—and this is something that needs to go on the Hansard record, because every territorial local authority and the regional council in Auckland agreed, which is something that Aucklanders love to hear, because they have not heard it for such a long time—that all of local government in Auckland agrees a further option needs to be added to the bill. It is called option C.

Hon Annette King: It’s only an option.

Hon MARK GOSCHE: It is only an option, and Auckland can use it if it wishes to. All of Auckland agrees on it, except for the National Party.

So what did National members put up instead? Aucklanders are going to like this. Everybody says that if we are going to have a viable public transport system, we should have integrated ticketing and fares. Well, Bill English has had his way. He has rolled Maurice Williamson, who knows that to be the truth. Maurice has had to put up an amendment that says no, people can have other tickets as well. That is what his amendment says. Bill English has won the day, and Maurice has been rolled again, as he was on his toll roads.

I have to ask myself what has happened to Maurice Williamson. I have always known him to be extremely strong in his views and knowledgable on transport. Nobody else in National comes near him, yet Bill English, who would not have a clue because he has never seen a bus in Dipton, has won the day on this one, and integrated ticketing would go under National. National members also ask us to give hundreds of millions of dollars to the owners of these companies, but not make them accountable. I know that one of Mr Williamson’s amendments would say that ferries are exempt from disclosing that information. So the taxpayer and the ratepayer give those companies loot, and they do not have to tell them what they do with it, because National’s amendment would do away with that.

This is the real joke—2-hour bundling of services. Now, we know how it works at the moment. Someone can register a commercial route in Auckland that gives people one bus in the morning and one in the afternoon, and maybe one somewhere else. That is not the way to run a public transport system. It is a joke, and National wants it to remain a joke, because one of Mr Williamson’s amendments says we cannot bundle services in the way in which everybody who knows anything about public transport would bundle them. No, National members say we can only bundle services for 2 hours’ maximum. What an absolute joke! National members want do away with integrated ticketing and with the ability of regional councils to have a sensible bus service, train service, or ferry service. National members want to hand out money to the private sector with no accountability, and that is what they have come up with by way of amendments.

Hon Maurice Williamson: Absolute rubbish!

Hon MARK GOSCHE: The member should read Bill English’s amendments—they have the member’s name on them—then he will understand them. We have already had a chance to look at them. Mr Williamson is saying we could have integrated ticketing but we could have other stuff, as well. That is what is wrong now and it is why the system does not work. The member knows that, because he has been around the world. He has seen London and how the system works there. Could Mr Williamson inform us whether London is running a system like option A, option B, or option C?

Hon Maurice Williamson: Option B.

Hon MARK GOSCHE: Actually option C is the one that is run in London. The member has been there on the plane so often that he should know that.

Labour members believe in public transport. When Maurice Williamson was the Minister of Transport, $18 million went into Auckland public transport. Over $300 million now goes in. That speaks volumes for National’s commitment to public transport. Suddenly National is supposed to care about it. We heard David Bennett talking as if it was the most momentous thing this Parliament had dealt with in its last 9 years. I think it is pretty momentous to fix up the legislative mess that has been sitting there for a very, very long time. That is why I support the bill. I listened to the major councils from Christchurch, Wellington, and Auckland and they all said “Fix it.” Well, we have been fixing it by putting in real money. We now want to have proper controls, the ability for integrated ticketing, and financial accountability for people.

When Aucklanders were getting only $18 million out of the Government we probably were not worried about disclosure, because there was nothing to disclose. There were no bus services to speak of. Those services were run down; they were a wreck. It was what Maurice Williamson gifted to Auckland—a public transport system that was carrying fewer passengers in 2000 than it was in 1955, when I was born. That was his victory. He made sure that public transport was destroyed, and that is because he does not believe in it. He gets a car. A bus is not something that he recognises—those big maroon things that go past the window outside his office. I have had to tell him a number of times in this Chamber that those things are buses and that ordinary people from his electorate get on them, pay a ticket price, and want to go into town to where they work. That is what is called public transport. National members could not give a hoot about public transport because they never use it and they could not care less. That is why they starved public transport of funds, and the bus companies know that, because they are now looking—

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

DAVID BENNETT (National—Hamilton East) : As we are looking at Part 1, I think there has been a lot of talk about what actually happened in the Transport and Industrial Relations Committee by members involved in that select committee process. One of the things that one looks for in a select committee is a transparent and accountable process, in that people know what is going on and can submit in the genuine faith that their submissions will actually make a difference. The last thing one would want in a select committee is for the decisions to be made through a process that does not avail the public of that ability to make constructive criticism and provide solutions. What is the point of a select committee if there cannot be consultation? We cannot just have select committee processes that are sped up for the last 2 weeks of the Parliamentary term, and then feel that we endear ourselves to the public and achieve the purpose of the process.

A lot of people in the industry will naturally be aggrieved at the process taken by the Minister in this case, and by the chair of the select committee under her instructions. I am sure that reflects the view mainly of passengers of public transport, because they are the real losers in this case. It is not the bus companies or the regional council; it is the passengers that lose, because the passengers do not get the opportunity to have put in front of them the best possible solution to this problem—a solution that would avail itself of a conjoint approach from Government, local government, regional government, bus companies, and also passenger representative bodies as well. I guess what the National Party finds so distressing in what has happened in the process leading up to this Committee stage is that we have actually missed out on some fundamental processes within a select committee. That means we will not have the legislation going forward that we should have had, and that the public of New Zealand have been let down by this Parliament once again during the term of this Government.

If we look at what has happened to some of the conceptual ideas that went behind the options that were portrayed throughout the discussion on this bill, we see that it had been a long enough process, but the reality of what people wanted to see happen in the legislation was not made clear. I think there were many agendas that were hidden, and the Government of the day was not prepared to come out and say what it actually wanted to achieve. It went into an agreement with other parties through a Cabinet process and then did not hold itself to its word. It made an agreement with commercial operators that would expect a degree of commercial sensitivity and, also, a degree of respect for the agreement. This Government has shown itself not to be willing to fulfil its agreements with the commercial sector, and we are seeing that publicly played out on the TV at the moment with the inability of the commercial sector and the Government to see eye to eye on how to do business deals. We are seeing that in regard to the funding of political parties.

The commercial world operates on a different basis from this Government. It operates on the basis of accountability and honesty. What it says it does, and it sticks by it. In this case we have a perfect example of a Government changing its mind—saying one thing and doing another. It will do this again in this process of the Committee stage. It will put up Supplementary Order Papers to bring option C back. It will do that again, and it will do something different from what it agreed upon. There will be other parties in this House that, for some unknown reason, may stick with some other options. But the reality is that there was an option that was decided upon. It was a constructive decision that would have been for the benefit of passengers, but it was not fulfilled. The political parties in this House need to look at that, and look at the way they deal with the consumer, and also the corporate sector, and stick to their word. If parties agree on something, they should do it.

Hon Annette King: No word was given to it.

DAVID BENNETT: Well, if there was no word, how come Cabinet agreed upon it?

Hon Annette King: No word was given to them.

DAVID BENNETT: So there was no agreement?

Hon Annette King: There was a process of Parliament to go through. The public are allowed a say.

DAVID BENNETT: But did the Minister not agree on something with it?

Hon Annette King: The public have a say, and this House decides.

DAVID BENNETT: So what actually happened was that there was no agreement? We just had a meeting with them?

JILL PETTIS (Labour) : I move, That the question be now put.

The CHAIRPERSON (H V Ross Robertson): I wish to advise members that the Government has issued a financial veto certificate in relation to an amendment in the name of the Hon Maurice Williamson to omit clause 15. The amendment, therefore, is out of order and no question will be put on it. However, the veto certificate may be debated in the context of this part.

Hon MAURICE WILLIAMSON (National—Pakuranga) : I raise a point of order, Mr Chairperson. My understanding is that the financial veto and its provisions are to avoid the Crown being exposed to any financial liability. If you look at the amendment I am talking about, then you will see that it may expose some regional councils to some liability to pay some compensation for declining, but there is nothing in that that would force the Crown to have to compensate any regional council for that. If we set this as a precedent, then we could allow the financial veto to be used on any legislation that may impact on revenues for any territorial local authorities, regional councils, or whatever.

I would really like the Speaker of the House to give a more considered ruling on this, because I have always understood that the financial veto applies only where there is a direct relationship and an exposure for the Crown. There is no mandatory requirement for the Crown to settle any compensation if they are declined.

Hon Annette King: Where do you think they get their money from?

Hon MAURICE WILLIAMSON: Well, there is the Minister chipping in on a point of order, which she should not be doing—and her microphone is live and she should shut her mouth, but frankly—

Jill Pettis: Oh, Maurice!

Hon MAURICE WILLIAMSON: Actually, she should. And as this is a point of order, that member should shut hers, too.

The CHAIRPERSON (H V Ross Robertson): The member will please be seated. First of all, the Minister could not be heard on the microphone, because I had my finger on it so she could not be heard. The other thing is that I would remind members that when there is a point of order on the floor, it is terse and to the point, and no one says anything other than the member addressing the Chamber.

Hon MAURICE WILLIAMSON: I will leave it at that, and I would not mind, if it is possible, someone giving us a clarification, because I do believe that this move expands the use of a financial veto way beyond what Parliament and the Budgets of Ministers of Finance have to include. The Government funds a whole lot of organisations. If we were passing legislation that might make another organisation have some money shortfall and mean that the Government would have to come and pick that up, then immediately the financial veto would kick in, and there is no end to where that might lead.

The CHAIRPERSON (H V Ross Robertson): I thank the member. I just refer the member to Speaker’s ruling 115/1, and I will read it for the member’s benefit: “During the committee of the whole House, the Government will be able to make a submission to the chairperson that an amendment or a change proposed to be moved, appears to have more than a minor impact on the fiscal aggregates … and 24 hours’ notice has not been given. If there is doubt about whether a proposed amendment may have more than a minor impact … and 24 hours’ notice has not been given, the proposed amendment or change should be ruled out. The onus is on a member proposing to move an amendment to a bill … to give 24 hours’ notice if there is any possibility that the amendment may have an impact on the fiscal aggregates …”. So the Speaker’s ruling is quite specific, but it does not stop the member from debating the issue.

Hon MAURICE WILLIAMSON: I think that is an issue. When I was writing this stuff I did not have any—any—belief that this amendment has an impact on the fiscal aggregates, and I think it would be very hard for a member to believe it would. It does not have any mandatory requirement for the Crown to pay anything to anybody. I would have put it in 24 hours sooner if I thought that this would mean an exposure to the Crown. It is not. I am just saying that this is an incredibly long bow to draw, because if, for instance, the Arts Council or the ballet or something else found it had a shortfall because of some legislation, then the Government could say it was ruling it out because it might have to pick it up at some later stage. There is no mandatory requirement for the Government to pick up any of the regional councils’ costs for declining a service. That is why I think that this issue needs to be referred to the Speaker. I am happy for it to be left in abeyance and for the veto to sit for now, but I would like some further advice brought to the members of this Committee, because it goes well beyond what I thought the financial veto does.

The CHAIRPERSON (H V Ross Robertson): I thank the member for his contribution. I just say that I have made a ruling on it and I have given the member the Speaker’s ruling. I might also add that the amendment may have more than a minor impact, and that is straight from the Speaker’s ruling. The member may, of course, debate the issue here, and I am happy to move on with that now.

JOHN HAYES (National—Wairarapa) : I raise a point of order, Mr Chairperson. I would draw your attention to Standing Order 320(1), and for your benefit, I will read it out: “A certificate relating to a bill may be given only when the bill is awaiting its third reading.” In that context and in the context of Standing Order 320(4) can I suggest, as Mr Williamson suggests, that the matter be left until a later date.

The CHAIRPERSON (H V Ross Robertson): I tell the member that I have already made that decision. I refer the member to Standing Order 319(1).

Hon ANNETTE KING (Minister of Transport) : As the financial veto is now part of the debate—with you having made your ruling, Mr Chairman—perhaps for the benefit of the member who has raised it, I should say that the reason given for the veto and for the Government not concurring is that exposing regional councils to the liability to pay compensation for declining to register commercial services may expose councils and, therefore, the National Land Transport Fund to significant financial risk. As the member knows, the majority of the money for passenger transport services comes through the National Land Transport Fund. That is the reason the veto has been provided.

Hon MAURICE WILLIAMSON (National—Pakuranga) : We now move into Part 2, which is by far the real substance of the Public Transport Management Bill. I will just allude to some factors about the amendments that I have proposed. If members want to follow along, then they are welcome to look at my explanatory notes that follow my amendments, starting on page 14. In these notes I make it clear that the amendments will allow for—and I stress that they will allow for—integrated network planning under regional public transport plans, or RTPs. They will allow for integrated ticketing and integrated fares, but not to the extent of restricting individual operator discounting policies or requiring without adequate compensation an operator to incur reduced fares from its usual rate as a result of integrated fares. These are, I think, sensible provisions.

I want the Committee to just focus on how the bill got to where it is. I am told—and I have no reason to disbelieve it—by the Bus and Coach Association and by a number of bus operators that a series of meetings and consultations occurred back in 2006, at which the Government, quite properly, said that it was concerned about public transport and its management and about how it could get the best value for the dollar, and that it would embark on putting in place a new regime. The Bus and Coach Association and its various members were fine with that. They met and cooperated in what was a fairly extensive process of consultation. If that is not true, then I would like the Minister to pick that up at any stage and say that it did not happen.

What happened at the end of that consultation, and what was then taken to Cabinet in February 2007, was a position that—although some players were slightly aggrieved with it—all players in the Bus and Coach Association, as a representative of all the bus operators, could actually live with. It was called option B and had some reasonably sensible provisions in it. It likely went a bit far for some players, but, as far as the Government was concerned, it was about the best compromise and it was the right way to go. The bus operators who came to those meetings and consultations walked away confident that that was what was coming as legislation, so did the Bus and Coach Association. But when the bill finally hit this House a few months ago, they were simply gobsmacked to see that what the actual legislation—the words in the bill—said was not close to what the agreed position had been. They were pretty disgruntled about that. They actually started to blame officials, which I said was a bit unfair. They said that some real tangles had obviously occurred in the drafting of the legislation from when it was agreed with them, in terms of how it would be, compared with the bill as introduced. They then began a process of trying to make submissions, to talk to various players, and so on to suggest that the bill could be refined and brought back to the agreed position, but they really got nowhere.

What I found interesting was that along came the spectre of the Auckland Regional Transport Authority. Let us not muck around the bush here: this is the Auckland Regional Transport Authority’s bill—OK? This is not a bill for the bus company in Taihape. This is not a bill for even the Christchurch base. The people in Christchurch, in Red Bus Ltd, think the operation they have down there is absolutely superb. They have integrated fares and ticketing, and they did not need this legislation to do it. This legislation is not needed in Dunedin, in Invercargill, or in Eketāhuna. This legislation is to appease the left-wing acolytes of the Auckland Regional Council and the Auckland Regional Transport Authority, which want to take total and absolute control.

When I met with the chairman of the Auckland Regional Transport Authority—and I have a lot of time for Mark Ford; I think he is a super guy—he told me something that gobsmacked me. He said that the authority was OK with the bill now, because even the Bus and Coach Association and all the operators agreed with it now. I was really taken aback. I thought I had made a bit of an idiot of myself here, because I did not think they did agree with it and were confident the bill still needed some change. So I came back to Wellington with my tail between my legs feeling a bit embarrassed, thinking: “Wow!”. So I called up Raewyn Bleakley at the Bus and Coach Association, and asked: “Have you guys changed your position on the Public Transport Management Bill?”. She answered: “No.” I said that I understood there had been some meetings and that the association agreed that the bill was fine. “Absolutely not.”, she said. I told her that that was what I had been told, and referred to one of the operators, a Mr Ritchie from Ritchies Coachlines. She said: “Yes, to be fair, he did, but the rest of the operators present at the meeting”—and I want this to be really clear and put on the record—“didn’t agree, and in the end we agreed to a final position that we would put to the Government, and even Mr Ritchie of Ritchies Coachlines agreed to that.” So I came away from this situation really staggered that I had been told by the Auckland Regional Transport Authority that the Bus and Coach Association and its members all agreed to this almost Trotskyite legislation, only to find out that that was not true. But then, here is the real rub: New Zealand First decided—and I think quite properly—not to allow the bill to go even further, which is what the amendments that were going to be put up by the Government would do.

If members look at the minority report to the bill, they will see that the Labour members were wanting to move even further to put unbelievable delegated powers into the hands of the regional council—powers that would mean it would almost be able to determine what colour buses could be painted and what the drivers’ hats looked like. In the end Labour could not get that through the select committee, because Peter Brown did what I think was the right thing and said that New Zealand First will not support option C.

Rodney Hide: Why did he do that?

Hon MAURICE WILLIAMSON: The member can speculate on why he did that. He can even ask Mr Brown.

Rodney Hide: He told you.

Hon MAURICE WILLIAMSON: No, he told the select committee something. What I am saying to the Committee now is that when we got this bill sorted and Labour realised it did not have the numbers, the tricky little deal became quite clear within hours of that. It was to report it back with option B, which is option B+. We were told originally that the Minister was going to throw some amendments forward, but what has happened now is that the Greens have come in and put forward these amendments. I guess, if anything, the National Party is outraged at the process. The Labour Government is always on about consultation, saying: “We consult. We listen.” So it went out and did a proper consultation process. Well done! It then got to a position where everybody involved thought an agreed position called option B was going to happen. Cabinet then passed a whole series of agreements, which I refer to in my explanatory note. Cabinet minute CAB(07)5/3A refers to “original Option B”. That is what the Government agreed. All players were happy.

Even the National Party—I give that commitment—would have been OK with that bill. But it did not happen that way, and when the actual aggrieved parties, which do feel very aggrieved at the process, tried to get this poured back and took what I think is a staggeringly good submission from Professor Taggart to the Regulations Review Committee about the constitutional impropriety of allowing the delegated powers of authority to direct what is going into this bill and actually are a breach of it, what happened? That stuff considered by the Regulations Review Committee did not even get referred to the Transport and Industrial Relations Committee. It did not even see the light of day when we were deliberating and considering the bill. We did not even know that the Regulations Review Committee had had that review, or had written to us. So when we asked that the bill be recommitted to the select committee, it was a matter of: “Oh no, not on your nelly!”. Labour has sat on this legislation for over 2 years from when the consultation started—2 years—and it would not allow a one-day select committee meeting on what came back from the Regulations Review Committee. In fact, we would have taken only a couple of hours to take what the Regulations Review Committee put in place. I want to repeat that and be strongly on the record about it.

The amendments I have proposed are not what National would have put up. They are not what the Bus and Coach Association would like. They are not what someone’s mates or someone who is funding a political party want. These amendments reflect absolutely and directly the original decision taken by the Labour Cabinet. I have said to this Committee—and I repeat it so it is clearly on the record—that if the Minister can show why these amendments do not reflect option B, I will be very interested to know why, because we have had advice that this is very much in line with that option.

What this whole process calls into account is the whole way legislation is done. It is just wrong to go and consult with affected parties, to get their views, to get agreement, to bring stuff to Cabinet, to show a Cabinet minute, and to say: “We’ve got your views; we think they’re incorporated.”, and for everyone to go away happy, then, when it finally comes time for the legislative process to actually fast track some of those changes, to do it without their knowledge. I understand why there is a severe level of anger from the various operators and from the Bus and Coach Association—a professional organisation deliberately there to represent the views of its operators—at getting completely and absolutely shut out of the process. I say to members, including Rodney Hide, that they should look very closely to the amendments I am putting up. They are not done lightly; they are done seriously to try to reflect something the Government would do, and National would support it.

RODNEY HIDE (Leader—ACT) : It is great to stand up on behalf of Auckland and Auckland residents and consumers of public transport. And that is what we are debating here in this Committee—not what a bus company wants, not what a political party might like, but what is in the best interests of Auckland, and in particular, as Keith Locke will agree, the very fine people of Epsom. As a consequence of the Greens’ Supplementary Order Paper supporting option C, there will now be greater competition for contracts, for public services, and for public transport. It will mean that new entrants can come in. We know they are waiting in the wings, and those operators who offer the best value for money will win the contracts. We as consumers of public transport will get better reliability, better frequency, better time-of-day coverage, and more convenient services and flexibility to meet customer needs. All this means better value for the $94 million in public subsidies. It is no wonder the dominant operator is worried that option C will pass, because now there will be genuine competition for services.

I heard Maurice Williamson say that the ACT party is supporting Trotskyite socialism, but I have to say that full contracting models operate in Adelaide, Brisbane, and Perth, and when I last looked they were not Trotskyite socialist places. Christchurch itself is 98 percent contracted, and to be honest, in the period 1990 to 2005, Auckland moved from being the second-highest user of bus transport in Australia and the New Zealand region to the second-lowest on a population-patronage ratio. The needs of customers in Auckland have not been met since the Transport Services Licensing Act 1989 came into force with its two-tier commercial and contracted bus systems. That legislation was another example of Wellington bureaucrats getting it wrong when it comes to Auckland. Aucklanders cannot have fully integrated electronic ticketing until we get this change to full contracting. Patronage now is about 52 million; Auckland wants to see it up to 100 million by 2016.

I notice that the dominant players did not come waving cheque books looking to pressure me in the last few days. They must have known it would not do any good. They pinned their hopes on New Zealand First after being promised by New Zealand First that they could deliver, but as everyone discovers, that is not a very smart idea.

Peter Brown: I raise a point of order, Mr Chairperson. Allegations have been made by Mr Hide that people came with cheque books to influence New Zealand First’s position on this legislation. I take total exception to that—absolute total exception. Not one iota of a suggestion of that sort of carry-on has been made to anybody in New Zealand First. It is absolutely disgraceful. We have a member over here who tackled Television New Zealand Ltd (TVNZ) with tapes and transcripts that were found to be false. He is firing allegations out left, right, and centre. I insist that he withdraw and apologise.

The CHAIRPERSON (H V Ross Robertson): Can I say to the member on my left that it would be out of order to suggest that a member takes payment to act in a certain way, and the member must be careful not to do that. I would caution the member to desist in the way he does that and to withdraw.

RODNEY HIDE: I withdraw.

Peter Brown: And apologise.

RODNEY HIDE: Shut up, Peter.

Peter Brown: I raise a point of order, Mr Chairperson. This is a very sinister, serious accusation. I cannot think of anything more serious—

Dail Jones: Repeat it outside.

Peter Brown: As my colleague says, if the man has not got the gumption to stand, withdraw, and apologise, then I challenge him to say that outside the Chamber—I challenge him. I want the withdrawal and apology.

The CHAIRPERSON (H V Ross Robertson): I asked the member to withdraw and he did so, and I asked him to desist and he told me that he would. I would like to leave it at that, but I just caution the member that he cannot, in any way, imply that members take payment. That is totally out of order.

RODNEY HIDE: Thank you, Mr Chairman, I will leave that—

Peter Brown: I raise a point of order, Mr Chairperson.

RODNEY HIDE: They do not let the ACT party speak at any time. What is going on?

The CHAIRPERSON (H V Ross Robertson): Would the member please be seated. I call Mr Brown.

Peter Brown: Perhaps you could give me some guidance, Mr Chairman. What has a member got to accuse another member of for an apology to be received? He has accused people of being—effectively—on the take. I cannot think of anything worse. I have heard people be compelled to withdraw and apologise for a lot less offence, and I believe that I am entitled to an apology.

The CHAIRPERSON (H V Ross Robertson): Is the member taking offence?

Peter Brown: I said that from the word go.

The CHAIRPERSON (H V Ross Robertson): OK, I now ask the member to apologise. The member has taken offence.

RODNEY HIDE: Well, make up your mind.

The CHAIRPERSON (H V Ross Robertson): The member Peter Brown has taken offence, the member Rodney Hide will apologise.

RODNEY HIDE: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (H V Ross Robertson): No, the member will apologise first.

RODNEY HIDE: No.

Peter Brown: Get the words out.

The CHAIRPERSON (H V Ross Robertson): Both of you just calm down. Just feel relaxed, and when you are feeling relaxed, relax even more, both of you. I have a yellow card in here.

RODNEY HIDE: I raise a point of order, Mr Chairperson. You asked me to withdraw, and I did.

The CHAIRPERSON (H V Ross Robertson): Yes, I know you did, but I have to say, Mr Hide, that Mr Brown has taken great offence and has asked that you apologise as well. Having listened to him again I have accepted that position. So I ask the member to apologise.

RODNEY HIDE: I refuse.

The CHAIRPERSON (H V Ross Robertson): You leave me no alternative, Mr Hide. I ask you to apologise. Then the member leaves me no alternative; the member will leave the Chamber.

• Rodney Hide withdrew from the Chamber.

DAIL JONES (NZ First) : I raise a point of order, Mr Chairperson. Just as a matter of clarification. What is the status of Mr Hide’s vote and the vote of the ACT party in this Chamber?

The CHAIRPERSON (H V Ross Robertson): They can still vote.

DAIL JONES: They can still vote?

The CHAIRPERSON (H V Ross Robertson): Yes, they are still entitled to their vote.

DAVID BENNETT (National—Hamilton East) : As we look at Part 2 of the Public Transport Management Bill, which talks about the regulation of public transport, there are some queries that anyone viewing the legislation from a distance would have about the actual process that has been engaged in here, because there was clearly an agreement between the parties involved in this case—the Minister, the regional councils, and the public transport providers such as the bus companies. There was clearly an agreement.

The Minister interrupted earlier saying there was no such agreement, that it was still up for public consultation to make a final decision. Well, that was not the case. All the parties involved believed there had been an agreement, and an agreement in substance. It actually went through the detail of what they wanted to do. That actually went to Cabinet for approval, so there was an agreement. One does not have an agreement like that and decide 6 months later that one wants to change it under the guise of public opinion—there was an agreement.

What Mr Hide referred to was the way in which the voting changed in the Transport and Industrial Relations Committee, which many of us found very perplexing, including the Government members of the committee who did take some time to understand what was actually going on. But Mr Brown made it quite clear why he changed his mind, and it was an interesting insight into how New Zealand First operates in the political process.

The public will, no doubt, be very much concerned about what they are seeing in this bill, because not only are there questions about political process, there are questions about why legislation that is supposed to look after public transport in our biggest city in all regards is being pushed through without the genuine process of consultation, without an agreement in principle being carried through, and without the parties involved being able to come to a solution that is constructive for all involved. This is not a question where one has to take sides. It is not an issue where one has on the one side the public transport providers, and on the other side the people in favour of public transport, such as the Auckland Regional Transport Authority, which has to manage it. It is not as if there is a major divide there. Both parties have come together and reached a solution.

Yet the Government of the day will not do what both parties have agreed upon. The Government of the day, the New Zealand First - Labour Government, is doing what it thinks is best. It is not doing what the parties that are important in this decision have actually agreed upon. That is the problem we encounter in this situation. There was an agreement. It was an agreement that would work for the industry, the Auckland Regional Transport Authority, and for the public transport users. That agreement was made in substance and, if anything, it should be enshrined in law. It is not up to the Government of the day to use public consultation as an excuse for changing an agreement that it has already made. It is not up to the Government of the day to go out there on some whim and decide that it has a better idea than what the players in the industry have who actually agreed on a concept. Political parties should not change their motives halfway through the electoral cycle of the bill going through the select committee. This is something that is simple.

There was an agreement. It went through Cabinet level. It has been supported, it is valid, and it should be enacted. That is what the National Party would want to see this Government do. We do not want to see this Government make up its own mind, and say it believes in something that it knows is not what the parties agreed upon. We want to see the Government stand up and deliver what the parties had agreed upon. We challenge the Minister to do that. The Minister knows there was an agreement. The Minister cannot come into this Chamber and say there was not an agreement, and use the idea of public consultation to get away with changing her mind. The reality is that parties have relied on that agreement, but it has not been enacted here.

We have very different interests within this political environment. We have the Greens, who will be very much in favour of public transport, for example. It will say how public transport is important, and how we need to provide alternative forms of transport within our biggest city. It is right; an agreement was actually made. There was a solution that all the parties agreed upon to support that concept. Yet we are not enacting it. We are not enacting what the parties had agreed upon. What can be sillier than that? We had a solution to an issue—a big issue—and we are not supporting it through the legislative process. How can the Government of the day in good conscience stand up and say it represents the people of New Zealand, especially the people of Auckland, when it will not do what is in the best interests of those people, when it will not do what it has, as a commercial agreement, agreed upon in a commercial setting, and through its Cabinet process? It is using the guise of the Transport and Industrial Relations Committee to get out of that agreement and out of the performance of that agreement. That is a shame, and it is a shame for all those political parties in the Government because they have not held their word.

The great losers will be the public transport users of Auckland, because they will get a result that the main players know will not be effective. The main players know what would have worked and they came to that solution. That is all the National Party wants to see happen; we want to see the agreement of the main players enshrined in law. The Government of the day has the opportunity to do that. It should pull this bill, take it back to the select committee, and do what was rightfully agreed upon in the first place.

KEITH LOCKE (Green) : I hate to disagree with the preceding speaker, but I have been talking to players around this bill for some months, as have other Greens, and it is quite clear that the councils in Auckland, the Auckland Regional Council, and the Auckland Regional Transport Authority, all favour option C, and have favoured that system of contracting out the network, from the very beginning. It is true that the Auckland Regional Transport Authority and others have always considered that option B is better than the present system; it allows more specification in the contracts, settlement of disputes through the courts, and all the rest of it, but it certainly favours a fully contracted system and was submitting very strongly on that through the whole process, and rightly so.

Maurice Williamson referred to Ritchies Coachlines. Some of the smaller players had been somewhat worried about the system up until now, with the bigger players shutting them out, because it is so easy for them to snatch a commercial route and use the big profits off that route—a main route—to cross-subside a contracted, subsidised route, undercut the opposition, and keep market dominance in a place like Auckland. This legislation is levelling the playing field and allowing efficient operators to compete properly, which is, I think, the point that Rodney Hide was making for ACT.

The operators are a bit short-sighted in not supporting option C. Although in the short term some of the bigger operators might lose some of the cream they are getting through dominating routes by being able to charge more or less as they wish, by not having to show their books, and making undue profits, in the long term a fully integrated system—buses connecting properly, and buses connecting with trains and ferries—where people have more confidence in the system, will mean more throughput for all the operators, and more money for their shareholders. So I think they are looking at the issue in a very short-term way. As we stated before, we cannot have proper integrated ticketing without connectivity of routes, timetables, the electronic swipe cards, etc., all worked out by the regional authority, and with the regional authority having the power to put that in place.

There is another issue in terms of the information. Option C provides for all the information to be provided by the operators so that the system can be properly planned. The amendment being moved by Jeanette Fitzsimons in Supplementary Order Paper 249 that will implement option C requires the regional authority to have a plan, and to have the contracted services as all part of that plan. If that is not done properly the operators, too, have a right to appeal against that, and they are required to be very open about patronage, throughput, and everything else, so that that planning can be done much better. There has to be a good service, with proper frequency, proper timetabling, and proper connectivity, and we cannot achieve that under option B. We have to go to option C.

Under option B an operator can drop out of commercial service with 90 days’ notice. That can knock out the whole connectivity of the system. There has to be a fully contracted system where one operator cannot just—effectively—muck up the whole system on its own initiative. Anyone who is really serious about a good transport system in Auckland, Wellington, and the other big cities should think seriously about supporting the amendments put up by Jeanette Fitzsimons. They will be effective.

It is interesting that ACT, which is a party known for free competition, and all the rest of it, has understood that good companies will benefit out of this. They can bid on a level playing field for the contracts and we will get a much more efficient system. It is important that we pass option C today.

PETER BROWN (Deputy Leader—NZ First) : When the bill first emerged at its first reading, it identified three options: A, B, and C. Option A is the status quo, and option C is the fully contracted model. But the Government bill, in its explanatory note, was very damning of option C. There was a paragraph or more that really made it quite clear this was not an option the Government favoured—it was very, very damning—and option B was the option it favoured. New Zealand First has always supported option B, but when we got to select committee and the submissions came in, particularly from the industry players, we found out that there were two option Bs: option B as in the bill, and option B as was apparently agreed or understood in the earlier discussions the industry had with officials. It was the first option B—the one that did not make the bill—that the bus companies in particular favoured and that rested comfortably with New Zealand First. That has been our position from the word go. We have not changed our mind. We have not been bullied into thinking something else, and we are now in a position where we favour the option B that was agreed between the players and the officials before it came into the bill, as against option C, which the Government is supporting because of the Greens, and about which the Government in the explanatory note wrote very, very damning comments. I do not think I have ever seen an option or an alternative written up in such a derogatory manner. It was effectively dismissed by that bill. By reading the explanatory note no one would have ever thought the Government would ultimately be supporting it. So if there is any change in this House, it is from the Government. It is going with the Greens, the Māori Party, and ACT.

John Hayes: And New Zealand First.

PETER BROWN: Wake up, man! Wake up! Members should listen to him. Members should give him a pinch. He is not quite awake. He should take a Berocca. The Greens, the Māori Party, and ACT were not represented on the select committee. Members of those parties did not even take the trouble to go along and listen to what people had to say. They just dreamt up a Supplementary Order Paper that fits with the Government’s change of heart, and quite clearly that Supplementary Order Paper will get through the House thanks to 10 or 12 MPs who have not studied it in the least—

Hon Maurice Williamson: Or heard the submissions.

PETER BROWN: —or heard the submissions, or, in all probability, spoken to anyone in any detailed form. In the course of these submissions a number of submitters were very enthusiastic about their industry—very enthusiastic. They felt passionate about it. If this bill goes through with option C, as it appears it will, we will dampen that passion, that enthusiasm, and that determination to do right by administering bus companies and buses. We will destroy it. A successful bus service needs four qualities. It has to be reliable, convenient, comfortable, and affordable.

Hon Maurice Williamson: And it has to be safe.

PETER BROWN: And it has to be safe—five qualities. If a bus service does not have all those five qualities, then people will not use it. It has nothing to do with the colour of the buses, or whether they are administered or centrally controlled by the Auckland Regional Transport Authority. It has everything to do with the service that is offered. As I say, those are the five qualities that a bus service needs. If we dampened the enthusiasm, determination, and competence of the bus companies, we would be in danger of second-rate, or less than adequate, buses being put in that the public will not use. That disturbs us. We believe that if there are enthusiastic participants then they should be given a chance to develop that enthusiasm. That is a very simple philosophy.

PANSY WONG (National) : September 9 will be a very significant day. The sneaking in of option C during the Committee stage, against officials’ advice and against public submissions, is a very serious matter. It reflects what the Privileges Committee was hearing about the fact that the Labour Prime Minister, Helen Clark, did not bother to tell the public 6 months ago that she knew about evidence that she did not mention. Now we have the same behaviour when the Government introduces a bill.

According to the Government, option C, which was not introduced during the select committee hearings, is being brought in to enable regional councils to prohibit commercial services. However, according to the officials and the Government: “Prohibiting all commercial services in a region would reduce opportunities for public transport operators to innovate and would reduce the control operators have over their businesses, thus potentially undermining business confidence. For these reasons option C is not preferred.” These are the words of the Labour Government and the officials, and they are set out in the explanatory note on the bill.

During the select committee hearings, right towards the end, we thought that the operators were resigned to the fact that they would even have to accept an option B+. In good faith they accepted option B, and that has actually got add-ons, but they reluctantly accepted that, and suddenly the Hon Mark Gosche, the chairperson, tried to twist the arms of the select committee members by saying that Cabinet did not agree to option C but that the select committee wanted that option.

We could see that the officials were put under enormous pressure. They kept pleading with the select committee by saying that option C was a radical departure from option B, and that, under the tight timetable of reporting back to the House, there was no way that they would be able to put together amendments and good legislation. New Zealand First agreed to that, and the majority of the select committee listened to the submissions, and even swallowed it and said that option B was at least what operators believe in. But National members have been firm in our principles. We did not even agree to option B+, but we thought we would try to make amendments that would be good for the legislation.

When the bill was eventually introduced into this House, Labour did not even bother to introduce its own amendment, and it used the Green Party as an excuse to bring in last-minute changes to an option that the Government itself said would undermine business confidence—and it will undermine business confidence. This will amount to a confiscation of private property rights. There are bus operators out there who have worked long and hard over the years, have built up their business, and have made them commercially viable—but now we have councils. Of course the councils would welcome option C, because it would give them total control. Who would not want that? Any public body would love to get its hands on funds and then have total control over everything. That is when the New Zealand public would start to get really sceptical.

The true colours of the Labour Government are coming through. It would love to have total control over everything, but that is not right. Public transport is for passengers; it is not for some council officials or planners to get their hands on in order to come up with some grandiose scheme. We were told that without option C we could not have an integrated ticket. Who said that? In Christchurch that is happening under the current environment. In Wellington everybody is talking about the Snapper card, so why should it be the case that what happens in Christchurch can happen in Wellington but not in Auckland? Regional councils or transport authorities that have funding have the say, so it is a challenge for them to come up with ideas on how to push integrated ticketing. We were told by the operators that this has started to happen. It is simply unacceptable to give the easy way out to an authority that is already holding the purse strings, with an additional unlimited power to introduce any control over private operators.

What will happen next? If the Hon Harry Duynhoven is not happy with the taxi service, will that be next? Will he introduce some sort of legislation to nationalise taxi services so they can all be painted in one colour, go in one direction, and charge one type of fare? That is what the Labour Government and the Greens are staring down the barrel of—nationalising everything. They just cannot stand private enterprise. They cannot stand people being innovative. Actually, the hidden agenda has now become very clear. In the original bill that was introduced the word “affordable” was not in the purpose statement. The majority of the select committee argued very hard to insert the word “affordable”.

Now we understand why the phrase “affordable public transport” was not included in the original bill. Option C would mean that even if a bus route or whatever is commercially viable, the regional council, in its great wisdom, can come up with a preference, decide to remove those operators, and actually start to hand out subsidies, converting a commercially viable route into a contracted one that ratepayers and taxpayers would come up with subsidies for. What a ridiculous notion in 2008! Something is working, but just because it does not suit the people with controlling minds—like Labour members and councils who like to impose their own wishes on others—Labour will introduce legislation that wastes ratepayers’ money, increases rates, and increases tax just because some of them have fancy ideas of how people should travel and how those services should be provided.

Bus operators who do not require a subsidy have actually been able to build up a commercially viable service because they are able to attract passengers. They have to deliver the service. Why are their services commercially viable? Because they are interactive and reactive to passenger needs. If the passengers do not use those services, then they will not be commercially viable. The fact that some of those services are commercially viable proves that it can be done. But a Labour Government never likes to see private enterprise making a go of it, and it is always sceptical about private enterprise wanting to make a profit. Actually, there is a profit element in an individual who wants a high salary to reflect and reward their services. Profit is a good motivating factor for people to be innovative. When passengers decide to use those services we should encourage them, not discourage them.

I can just see 9 September being a very important day. It will be the last nail in the coffin of the last days of this Labour-led Government. This is an outrage, it is an abuse of process, it is abuse of the consultation process, and National will not have a bar of it.

Hon HARRY DUYNHOVEN (Minister for Transport Safety) : I take a brief call to answer one or two of the points that have been brought up along the way. The previous speaker, Pansy Wong—an Auckland member, I understand—did not seem to realise that one of the reasons for making quite a change of emphasis in the Public Transport Management Bill was the major input of Auckland local government and the submissions that were made, which clearly had an effect on the way the bill was thought of by the Transport and Industrial Relations Committee and by members of Parliament who were prepared to listen to submitters.

With regard to the comments the member made about the word “affordable”, I say that if one looks at the report-back version of the bill, one sees submitters raised the use of the affordability concept and it was added to the bill. Of course, that aligns this legislation with the Land Transport Management Act, which affordable public transport is a major part of. So I am very pleased that the point the member made has been taken care of. That is surely what the select committee process is supposed to be about: ensuring that improvements are made to bills. I say that in all the time I have served on select committees, which is some 18 years, that has been the purpose of having them. I say to Ms Wong that in my select committees and in any committee that I have had anything to do with, the purpose was to improve the outcome. We actually need to take note of what is said in submissions.

I want to address very quickly a couple of Mr Maurice Williamson’s amendments. If one looks at the ones that refer to the issue of integrated ticketing—if one looks at his new clause 12(3)(i)—one sees that any regional council, if it specifies a control on commercial services in a regional public transport plan, may also specify detailed controls in the plan. A control may “require the operator of any commercial public transport service to issue, use, and accept an integrated ticket specified in the regional public transport plan:”. So operators have to accept an integrated ticket. If one goes to subclause (6), one sees that “No control may be adopted under subsection (3)(d) to subsection 3(1)”. I then tell members to read paragraphs (a) and (b) of that subclause. I think if I was a commercial operator who was operating under a dual scheme like that, I would be very much keener to take my own ticket for my own company rather than be part of an integrated ticketing scheme.

I am very familiar with integrated ticketing schemes. In Europe they are very common; I have obviously used them when I have travelled to Europe. In Holland, for example, one can catch trains, trams, buses, in some cases canal boats, and even taxis all on the same integrated ticket—and it is a universal ticket used right across the country. I think that is an excellent scheme. Without having an integrated ticketing scheme that is paramount, I think operators would obviously choose to have their own scheme.

Just for the benefit of the previous speaker, I say that she may like to do a bit of research and look into a company called Carrington buses, which operated very briefly in New Plymouth. She may find that some of the things in this bill are actually very good provisions to have, considering the history of that particular company.

DAIL JONES (NZ First) : I think one of the answers to the integrated ticketing question is actually contained in Mr Williamson’s proposed new clause 12(6). It requires compensation if one is going to take away someone’s rights. That is what Mr Williamson’s proposed amendment provides; that is what the Public Transport Management Bill does not provide.

New Zealand First members believe that if someone’s rights are diminished and taken away, they are entitled to compensation. I say to Mr Williamson that that is the point, is it not? I have read his amendment and I have understood it. Either the Minister for Transport Safety has not understood it or he does not believe in compensation. I think under the Human Rights Act and other such legislation, compensation would have to be paid. So this bill is perfectly consistent with a good integrated ticketing system. As I said in the second reading debate, I am familiar with the Oyster card system in the United Kingdom, which is what is intended here, and I look forward to it.

I am terribly disappointed that the ACT party could possibly be supporting this Labour Party - Greens legislation. That is what the legislation is. Mr Hayes does not seem to understand who is supporting this bill; neither does Mr David Bennett, who seemed to be talking about something else. This bill is opposed by the National Party and by New Zealand First. One of the reasons that I as the New Zealand First spokesperson on local government oppose this bill is that history shows us that local government taking over control of public transport means increased rates. That is what this bill will mean. If the bus system is making a loss, the ratepayers will have to pay more to make up that deficit.

I am absolutely staggered that someone like Mr Hide, who purports to be in favour of reducing rates, supports legislation that will increase the rates of the people of Epsom. It is quite unbelievable. Mr Williamson shakes his head and bangs his head; I will not do that as far as Mr Hide is concerned—I leave it to Mr Williamson. The bill must inevitably increase the rates of the people of Epsom, because that is what happens when local government takes control of public transport. That is what happened in the past. Those of us who have lived in Auckland since the 1960s, as I have done, know all about it.

When I read for the first time option C in the explanatory note of the introduction copy of the bill, I could not believe that anyone could possibly support it, because it says: “Prohibiting all commercial services in a region would reduce opportunities for public transport operators to innovate and would reduce the control operators have over their businesses, thus potentially undermining business confidence. For these reasons option C is not preferred.” Clearly, that was a well-thought-out viewpoint in the bill as introduced. I must congratulate the National Party member Pansy Wong on highlighting option C in that way. Central Auckland is better served by her than by Rodney Hide in so far as the inner-city members are concerned, and, clearly, she has the interests of the people of Botany—is it Botany—

Pansy Wong: Botany would do.

DAIL JONES: —at heart, because she does not want to see their rates going up, either. Mr Hide is all in favour of Auckland rates going up, and Epsom ratepayers’ rates going up. When we bear in mind the value of Epsom properties, we realise that their rates will go up more than the rates anywhere else in Auckland City.

The explanatory note comment that I referred to says that if we support option C, we will reduce opportunities for public transport operators to innovate. Well, why have a one-size-fits-all approach? That is what option C supports. New Zealand First supports innovation. The buses on these runs—especially the Epsom runs—could have computer links, air conditioning, music, and suchlike; that innovation is possible, but not with a one-size-fits-all approach, which this bill supports, and which ACT supports. Roger Douglas would never support this bill. I can already see a potential argument between him and other members in the ACT caucus on this decision. It is quite extraordinary. option C, which New Zealand First and National oppose and everyone else supports, would potentially undermine business confidence. The explanatory note says so. Some members in this Committee are supporting legislation that the explanatory note says will undermine business confidence.

It goes on to say that option C will reduce the control that operators have over their businesses. A bill that Rodney Hide and the ACT party support will reduce the control that operators have over their businesses. Well, New Zealand First is a middle-of-the-road party when it comes to economic issues, and, in a middle-of-the-road way, we in New Zealand First say that operators should have control over their own businesses, should know what they are doing, and should be able to make their own decisions, because private enterprise knows best how things should be done. However, we appreciate that one cannot make a profit out of public transport, even in Auckland, and that there needs to be a mixture of public and private operators.

JILL PETTIS (Labour) : I move, That the question be now put.

Hon MAURICE WILLIAMSON (National—Pakuranga) : I raise a point of order, Mr Chairperson. I have a heap of amendments, and I have not got to speak to any of them. I have had only two calls of a general nature.

The CHAIRPERSON (Hon Clem Simich): I call the Hon Maurice Williamson.

Hon MAURICE WILLIAMSON (National—Pakuranga) : The Public Transport Management Bill is broken into two parts, of which the first has only three clauses. The rest is all in the second part. Thank you for the call, Mr Chairperson; I would like to think that I could take two specific calls on Part 2.

If we really focus on this bill, we see that the nub of it is the level of control that the regional councils have over commercial services. The Government has tried to portray National’s amendments as opposition to integrated ticketing. I debunk that myth by asking Government members to look at my proposed new clause 12, because I am actually very supportive of the requirement for integrated ticketing.

In the end, option A, which is the status quo, was not working. Everyone accepts that. Even the bus companies and the Bus and Coach Association accept that. But to go to option C would have almost taken us back to the old days when the Auckland Regional Authority ran the buses. It is worthwhile doing a quick survey of Auckland members. I ask those members whether they think the buses worked well when the Auckland Regional Authority had total control. That is the question; it is not hard. Answer A is that it worked well, and answer B is that it was a disaster. I ask those members to put their hands up if they remember the old Auckland Regional Authority running the bus service well.

Peter Brown: Rodney Hide did.

David Bennett: Peter put his hand up.

Hon MAURICE WILLIAMSON: No, he did not; he was indicating that Rodney Hide did. I do not think Rodney Hide did, actually; that might be an unfair interpretation. Well, I think that option is the clear winner, because not a single hand went up. Not even Metiria Turei from the Greens thinks that when the Auckland Regional Authority had total control, owning and running the bus company, the buses were run well. We actually had the Aeroflot version of buses: awful, dirty, “take it or leave it”, and timetabled however the Auckland Regional Authority liked.

Jill Pettis: Well—

Hon MAURICE WILLIAMSON: No, hang on. Before Jill Pettis puts her foot too far in it, let me tell the Committee what her own Minister of Transport and her Government said in the explanatory note of the introduction copy of the bill: “Under option C, legislation would be changed to allow regional councils to decide how scheduled public transport services are provided, including retaining the status quo, adopting a regime …”, and so on. It further states: “Prohibiting all commercial services in a region would reduce opportunities for public transport operators to innovate and would reduce the control operators have over their businesses, thus potentially undermining business confidence. For these reasons option C is not preferred.” That is what the Minister said—not the National Party, not New Zealand First, and not even the Greens. That is what the Minister said. It is in the explanatory note of the bill as introduced. In the explanatory note the Minister says: “For these reasons option C is not preferred.”

Harry Duynhoven then went on to say: “Oh, but we listened.” Well, hang on. That would be a nice little crutch to use, except that nobody wanted option C but the Auckland Regional Transport Authority. Nobody else wanted it: none of the bus companies, not the Bus and Coach Association, none of the operators—not Red Bus from Christchurch, or others, and not even some bus companies from the member’s own area. They did not think it needed to go as far as that, but the Auckland Regional Transport Authority did. It goes back to the old days and the spectre of Mike Lee. Mike Lee would like the Auckland Regional Council to own the bus operation again. Let us face it: he would like it to own it. That is where he comes from. He is a terrible old left-winger who loves that ownership and control. Harry Duynhoven tells us that this Government listens, but it listens to one submitter and ignores the rest. It ignores the bus companies, the Bus and Coach Association, and a whole range of other people.

I want to canvass clause 12. The Minister in the chair, Harry Duynhoven, finds some stuff in my amendment to that clause unacceptable, and I want him to tell me what it is. My new clause 12 states: “(1) A regional council may specify a control in a regional public transport plan, if—”, then states the conditions. We should remember that this is a control on commercial public transport. Let us say that I am a bus operator who has put my own skin in the game. I have gone out and bought my own buses, I am operating a non-subsidised service, and I am providing a very good product that the public likes, but someone will now be able to come along and shove some controls on me, even though I am not asking for a subsidy—if I were, there are the negotiated powers to do so. But if I stick to my own business, and run it like a trucking company is run, or a courier company or a taxi company, the regional council will now be allowed to impose some controls.

Members will be surprised to hear that National is OK with that. But there need to be some conditions. I put it to the Committee that in my amendments I have translated those conditions from the agreed Cabinet position. In my new clause 12(2) I have stated: “If a regional council specifies a control in a regional public transport plan, it may also specify in the plan—(a) any transitional arrangements …” that it wishes. I would like the Minister to tell me where clause 12 makes him uncomfortable. Paragraph (b) states: “the process that the regional council will adopt for determining any such transitional arrangements.” The regional council can put these things into its plan.

New clause 12(3) is really good. It states “A control may—”. You see, when Annette King was in the chair earlier on she said that National does not believe in integrated ticketing, in integrated fares. Actually, we think it is vitally important. A number of regimes, like the New South Wales Government, have tried to implement it by fiat. It was going to be in place for the Olympic Games in 2000, but in 2008 Sydney still does not have it. So the Minister cannot tell me that we can force integrated ticketing by fiat.

New clause 12(3) states: “A control may—(a) require a minimum period not exceeding 6 months for the operation of a commercial public transport service … immediately following the commencement of—”—which is fine—and “(b) may require a minimum period of notice (which may be not less than 35 working days and no more than 65 working days) for—(i) commencing a commercial public transport service:”. So there is a notification period. If the Minister is uncomfortable with these provisions I would really like to hear about it, because this is what Cabinet agreed to. I see Chris Carter over there thinking that Cabinet actually agreed to this. He is right. All of this was agreed by the Labour Cabinet; I have not heard the Minister deny that.

New clause 12(3)(c) states that a control “may require a minimum period of notice … for withdrawing a commercial public transport service;”. Again, that is right. There is a proper period where one would notify it. New clause 12(3)(d) states that a control may “identify commercial public transport services that must be registered collectively provided that each such control: (i) applies to no more than one route;”. One can put these controls in but one can do it only route by route, which is actually quite sensible. One cannot have one control for the whole of Auckland. If one wants to put a commercial service control in, it is done route by route. Each such control also “(ii) applies to that route for one period in a day of no greater than two hours of continuous service;”. One can have more in the day, but not for more than 2 hours for that particular control. Subparagraph (iii) states: “specifies no greater service requirements than in the applicable regional public transport plan and supplementary documents for that route;”. This all sounds good.

Let us move on to new clause 12(3)(e), which states that a control may “require compliance with specified quality standards and performance standards:”. Is anyone opposed to these amendments? They are in my amendment. I would like to hear from someone who is opposed to them. No? New clause 12(3)(f) states that a control may “require any commercial public transport service to be an integrated service:”. I thought that was what the Government was always on about—that it wanted a greater service. Well, this provision will require that. That sounds good. Someone must have an objection somewhere!

New clause 12(3)(g) states that a control may “require the application of common emblems or signs …”. The Government was really hot on this. The bill was originally going to force one to paint one’s bus whatever colour was decided by the regional council. Howick and Eastern Buses, which has always had beige and maroon buses, might have been told to paint its buses Labour Party red.

Jill Pettis: Whatever!

Hon MAURICE WILLIAMSON: Jill Pettis would have loved that.

As I was saying, my amendment in new clause 12(3)(g) refers to common emblems and signs but not common colour schemes—it would not force the buses to change colour.

New clause 12(3)(h) states that a control may “require the operator of any commercial public transport service to use integrated technology specified in the regional public transport plan:”. Is that really bad? It is exactly what the Government said it wanted. In other words, one puts out a public transport plan, and—in contracting with commercial services—one puts in the control, which has to be complied with. That is good. I do not understand what is wrong with that.

Here is the nub: new clause 12(3)(i) is a cracker. It states that a control may “require the operator of any commercial public transport service to issue, use, and accept an integrated ticket specified in the regional public transport plan:”. According to Labour, National is opposed to integrated fares and ticketing, yet here in my amendment we have “require the operator of any commercial public transport service to issue, use, and accept an integrated ticket specified in the regional public transport plan:”. New clause 12(3)(j) states that a control may “set out and apportion integrated fares on a reasonable basis without undue discrimination and in accordance with the following factors: (i) time: (ii) distance travelled …” and so on, just like airlines do with their fare construction units that break down an end-to-end fare.

The Government was trying to say—and I think it had a crack at it, but Dail Jones fixed it really well—what new clause 12(6) states, which is that “No control may be adopted under subsection (3)(d) to subsection 3(l): (a) that would prevent, inhibit, or deter any operator of a commercial public transport bus or ferry service from offering customers its services under a separate ticket … and a discount for one …; and (b) requires the operator to incur costs or a reduction in revenues for which it will not receive adequate compensation …”. It says that if one is going to force integrated ticketing on a person who has already built up a business, has some skin in the game, and has created some intellectual property around it, then—just like if someone had started a supermarket of his or her own volition, and the Government decided to come along and nationalise supermarkets—there has to be a property right, and, yes, it may be able to negotiate it out. A good negotiator will negotiate it out and say: “We don’t think that property right should stand, but we want something in return for it.” That is what this amendment does.

DAVID BENNETT (National—Hamilton East) : As we look at this legislation, I think Maurice Williamson raised a very good point in regard to what the Government is actually doing. It came into this House and proposed option C and is now going all out to make sure that this Parliament votes for option C, when in its written document, the commentary on the legislation, it said it had thought about that option and decided against it because it had an agreement with the parties involved. Now the Government is changing its mind, going against its pre-agreed process, and coming down and saying it wants an option C for political expediency. Why would the Government do that? Why would it come into this House and change its mind and go blatantly against what it had gone out and said publicly it had agreed upon? There can be only one reason, and Maurice Williamson has an explanation. The Government, in its general policy note in the explanatory note, stated: “Option C: Empowers regions to prohibit commercial services. … Prohibiting all commercial services in a region would reduce opportunities for public transport operators to innovate and would reduce the control operators have over their businesses, thus potentially undermining business confidence. For these reasons option C is not preferred.” Let us say it again: the Government would not favour option C because it would reduce the control operators have over their business. OK, I know it is hard to believe that the Labour Party would say that, but that is what it said. It also said that it would potentially undermine business confidence. That is an even more unbelievable thing for the Labour Party to say, because it has killed business confidence in this country over the last 9 years. But at least it said “business confidence” in one document that came out.

Why would the Government now go against those very reasons in this Committee? Well, there is a simple reason, and it is that this Government cannot be trusted. It never says what it thinks. It never says what it believes; it just uses the smokescreen of this Parliament to go about its business. This is just one big game for those members. The Labour Party knows what it wants from day one, and it just uses legislation and uses this House to put a slant on it so that the public out there can feel that it can be happy with it. The Parliament is used as a means of getting parliamentary and public support so that people are compliant, and then, just at the last minute, the Labour Party does what it had planned all the way through. It goes against public opinion. It goes against what is right, what is just, and what is fair.

Labour just does what it has to do to pay back its supporters, and we see that is part of this bill when we are debating Part 2. The clauses in Part 2 are being used by the Government to try to appease the public, to say that it has thought about it and gone through a consultation phase. But the real guts is what it will pass on the day, and that is in option C. That is underhand politics. That is the use of the political process for personal gain. That is the Labour Party through and through. That is what the public is coming to expect in the last 2 weeks of a dying regime. It will try to pass a legacy of legislation. It can see the horses coming through the gates. What is it doing? It is a scorched earth policy. It is trying to take this country down as it goes down. Well, there are only two things that will go down in the next couple of months, and that is New Zealand First and Labour. They are both going down together, because the public has seen through them. The public has seen through the little shenanigans that this Parliament has been put up to by Labour and it is having no more.

I will come back to Part 2. I tell the Minister to not put up another option C and some Supplementary Order Paper. I say she should stick to the bill. She should stick to what the Government agreed on. She should not come in here and put through some legislation that she always wanted to put through but did not have the guts to put up in the first place, and then not let the Parliament debate it. This is just an attempt to use what is sensible legislation, dealing with the sensible issue of public transport, for political gain so the Labour Party can pay back its supporters. It is a shame when Parliament is used in that process. The public sees right through Labour.

Hon CHRIS CARTER (Minister of Education) : I move, That the question be now put.

PANSY WONG (National) : Part 2 is a substantial part of this legislation. I encourage the Minister, the Hon Harry Duynhoven, who very kindly took a short call last time, to give us an assurance. The officials advising the Transport and Industrial Relations Committee had problems coming up with drafting requirement recommendations for the last-minute push for option C. When the officials had problems changing the bill from option B+ to option C within the time frame, we suddenly saw that a Supplementary Order Paper with three double-sided pages was introduced by the Green Party. How do we know there is no technical problem? Who wrote this Supplementary Order Paper? We know that the officials advising the select committee said that in no way could they provide the drafting or the changes to get the bill from option B+ to option C. So we want the Minister to assure us that Parliament has not been misled into passing a bill—another like the Electoral Finance Act—that will lead every lawyer in town to line up, smiling, at the bank, after charging $500 an hour, because every operator will challenge this legislation.

Hon Maurice Williamson: They could drive a bus through it.

PANSY WONG: Absolutely! And I tell the Hon Maurice Williamson that all the buses will be painted in certain colours; all the buses will be lined up to drive through this Supplementary Order Paper. I want to share with listeners the fact that operators are now seeing their good faith being broken, because they thought the select committee had adopted option B+ but they now suddenly realise it is option C.

Let us look at one of the new clauses included in the Greens’ Supplementary Order Paper, new clause 15A, which is to be inserted after clause 15: “Exclusion of regional councils from liability to pay compensation for contracting requirements”. I think North Korean leaders and Chairman Mao would be very pleased with a provision like that. Subclause (1) states: “Nothing makes a regional council liable to pay compensation”—

Hon Member: Might be listening!

PANSY WONG: —yes, Chairman Mao will still be listening, turning in his grave; he would be very proud of this Labour communist Government—“to any person for—(a) including a contracting requirement in a regional public transport plan;”. Here we go; this is serious.

Under this legislation a regional council could decide to eliminate a bus service, a commercially viable one that did not require ratepayers’ or anybody’s subsidies, and the bus operator would lose a property right—the operator would not be compensated. Boy—I think that even Zimbabwe, North Korea, etc., and some of the governing bodies in those countries, would be very proud of this Labour Government and the Green Party.

This legislation is ridiculous, it is incredible. In the Committee stage in this Parliament, option C is being imposed, and we are including a requirement that where bus operators lose their right to run their services on a commercial basis, they will not be entitled to compensation. But the fact that this amendment has been introduced in such a hurry means that nobody can guarantee—unless the Minister is prepared to take a call and guarantee—that those bus operators will let themselves be bound by legislation like that. Once again, we are seeing a Government handing out millions of dollars, because litigation cases will be taken by all those operators. How can a democracy like New Zealand pass legislation that says that people’s property rights can be removed without compensation? That is an outrage.

• The question was put that the amendments set out on Supplementary Order Paper 248 in the name of the Hon Annette King to Part 2 be agreed to.

METIRIA TUREI (Green) : If this is the appropriate time, I seek leave for the amendments to Part 2 on Supplementary Order Paper 249 in the name of Jeanette Fitzsimons to be taken as one question.

The CHAIRPERSON (Hon Clem Simich): The question is that the amendments to Part 2 set out on Supplementary Order Paper 249 in the name of Jeanette Fitzsimons be taken as one question. Leave has been sought. Is there any objection? There is objection.

• The question was put that the amendment set out on Supplementary Order Paper 249 in the name of Jeanette Fitzsimons to clause 9 be agreed to.