JACINDA ARDERN (Labour) : I said before the debate on this bill was interrupted that I would of course return to the House to use my remaining 2 minutes to speak to this bill. The bill essentially allows a widening of the use of video conferencing facilities in our court service—a critical issue of debate. I have to say I would rather have spent my 2 minutes and 30 seconds debating the important matter of mining, but that is how these things go.

I conclude my consideration of this bill by saying that it seems to me that building efficiencies into the court system—and I can only assume that this is part of the Government’s agenda with this bill—is part of the purpose of the use of this new technology. The one warning I offered in the initial part of my contribution was that in the United Kingdom a similar form of technology was used for a pilot programme called Virtual Courts. The idea from the perspective of UK lawmakers was to replace some of the early court proceedings with video conferencing, which meant that prisoners would not have to be transported. The idea was that money would be saved as a consequence. That has not been the outcome of that system for those who introduced it, and they are still working on finding cost savings through that pilot programme. So I issue a word of warning to the Government: if cost saving is the primary purpose of this initiative, it may wish to cost more effectively—because it has not done so in the regulatory impact statement—the savings and the benefits of the system, because it comes at another cost.

We have to be very careful to ensure that we balance out the striving for efficiency gains in our court system, which is under a lot of pressure, with the idea that we do not undermine the very important principle of justice and giving all people their day in court, so to speak. That has been very roughly cast out in this bill, but it has been done through a set of criteria. It strikes me that there is still the ability, even where evidence has been heard in a court case, for a potential defendant not to be present. If that is the case, I think we should be very aware of the fact that there is a balance to be struck, and we will be looking for that balance in the select committee process. Thank you.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Tēnā koe, Mr Assistant Speaker, ā, huri rauna kia ora tātou katoa i te Whare. I do not mind admitting that I am a real fan of using video technology to make things easier to judge, particularly when it comes to sporting endeavour, such as watching the video replays whenever Manu Vatuvei scores for the Warriors, or when Serena Williams wins line calls against just about everybody except her big sister. More than that, I also enjoy watching people scramble for their earpieces whenever I or Te Ururoa decide to throw some ad lib Māori into our speeches in the House, as I will now.

E tautoko ana au i tēnei tikanga kia hāpai ngā rōpū me ngā whānau e tiaki ana i te hunga hauā, e ngā tāngata turi anō hoki, kia taea e rātou te uru ki roto i ngā mahi katoa o tēnei ao. Engari mō tēneki pire, e hoa, he mea anō tēnei nō reira, e tika ana kia tirohia atu ōna pāinga, ōna hē anō hoki. I te taha tautoko anēi wētahi painga.

[I really endorse this business about encouraging groups and families who take care of the disadvantaged and the deaf so that they can become part of the workforce in all manner of work that this world offers. But as far as this bill is concerned, I have to say that it is something else; so it is right that its advantages and disadvantages have to be taken into account very carefully. Here are some positive benefits.]

Apparently, travel costs may be reduced if people can video link rather than appear in person. People may feel safer if hoodlums are video linked from jail, witnesses may feel safer if they can hook in by video, and, apparently, cases can be dealt with in rural areas by video without judges having to travel. But if that is all that the Courts (Remote Participation) Bill has going for it, then that is a pretty high price to pay for what I consider to be another step down the slippery slope towards the denial of fundamental human rights to citizens of this country—and that is what this bill is. Yes, people can say that it is about capacity and efficiency, but what it is really about is telling defendants that somebody else will make a decision about their right to have a day in court and be heard by their peers.

I have never been a great fan of the English judicial system, for obvious reasons, but one thing I do like is its principle that a man must be brought before his accusers, and that any man facing the possible loss of his liberty should have the right to face those who would take that liberty from him. I believe that a decent society should safeguard that right with all the vigour and devotion it would give to safeguarding the rights of its children, its women, its workers, its dogs, and—one day, I pray—even its indigenous peoples. I say all that because court by video would take that away. Court by video is not the sign of a mature society, or indeed of a sophisticated society. It is not the sign of a society that recognises the value of mankind and the rights of man—not at all.

Court by video, in my view, is the coward’s way of dispensing justice. Indeed, it sets justice to one side and denies people their right to a fair trail, for the simple reason that it might save money. Certainly, court by video may improve efficiency, but the exercise of justice through the court system should not be based on models of industrial competence and good organisation. Justice should always be about the rights of all players, both the defendants and the plaintiffs, and it should not be weighted to suit one side or the other.

Court by video will clearly be of no benefit to those who are facing charges under the Crimes Act. Indeed, video will operate against those who face the courts in those circumstances. Court by video gives society the opportunity to stand aside from its decisions, to be one step removed from the tough decisions it has to make, and to be faceless in its sentencing.

I would be willing to bet that the minute we start down this road will be the minute that court decisions, particularly against those facing charges under the Crimes Act, get harsher. It is easier for people to condemn those whom they do not have to look in the eye, and it is easier to act out one’s prejudices when those one is sentencing can be switched off at a television screen as if they were nothing more than an annoying advertisement. I can think of countless cases that I have been involved in when a judge or jury, rather than go through the angst and anxiety of actually hearing from a defendant, would have been happier to deal with a video and make a decision based on that.

We would be extending to our wider society the same kind of brutal, uncaring unreality that exists in the video game world, where we allow our kids, by simply watching that stuff, to abuse, assault, maim, rape, kill, and even massacre in the name of video sport. In exactly the same way that it is also easier to kill by video than in person, I have no doubt that it is easier to send a person to jail or keep them there by video link than in a courtroom, because one will be divorced from the harsh reality of one’s decisions by that video link.

As for that crappy story about prisoners being better off because they can give their evidence from jail, I would say that my experience is that when one is in the same old jail cell, with the same exercise times, the same medical times, the same mail times, and the same food times every single day of the year, a day out to go to court ain’t exactly the hardship that some people might have us believe. Yes, the transport ain’t the best and the scenery ain’t great between “the Mount” and the District Court, and the decor ain’t the flashest down in the cells, but it beats being in jail, believe you me.

I have no doubt that there are people in this House who are keen on this bill. But I also know that the Attorney-General himself, the Government’s very own marshal, opposes it on the righteous grounds that it is bad legislation, that it is in breach of human rights, and that it is a step down the path towards a faceless judicial process, by which Māori, I believe, will be ground up and spat out into jails without even the opportunity of confronting those who sent them away.

I am advised that the Māori Party will be supporting this bill at its first reading to enable everybody to put their views before the select committee, but that we will retain the right to make a separate decision at the bill’s second reading, based on the information we hear at the select committee. I respect that position. I intend to ensure that the party’s votes reflect that position. In the same way that Nikki Kaye opposes her party’s position on mining on Great Barrier Island and Sir Roger Douglas opposed his party’s position on the Mental Health (Compulsory Assessment and Treatment) Amendment bill, I will not be supporting this bill at its first reading, second reading, or third reading. Kia ora.

PAUL QUINN (National) : I rise to support the Courts (Remote Participation) Bill. I note the comments made by the previous speaker, my friend and colleague Hone Harawira. I respect his position, but I am pleased that his party is supporting the bill at this stage so that it can be referred to a select committee. As I understand it, members of the Opposition are also supporting the bill at its first reading.

It is a fact that the justice system in this country, for a number of reasons, takes far too long to work through its stages. Anything that will improve the delivery of justice by our justice system is, in my view, to be applauded. There is an old saying that justice delayed is justice denied, and there are many examples of people waiting too long for progress to be made in hearings.

All this bill does, in fact, is to drag our court system into the 21st century by allowing the use of audiovisual technology, principally to progress procedural issues in the criminal courts. This technology is used in some aspects of proceedings, particularly in terms of witness testimony.

One aspect of improving our justice system is looking for ways to drive much more efficiency. In fact, we are already doing that. One of the areas, for instance, in which we are doing that is in the use of the courts themselves. We are extending the hours of sitting. The previous administration, if I am correct, introduced the extension of night sittings of courts. That is to be applauded, because we have assets in excess of $700 million sitting on the Ministry of Justice’s books and not being used.

So it makes sense that we use more efficiently the assets and resources that we have available to deliver justice in a proper and effective way so that people can get on with their lives. With those few comments I am happy to support the first reading of this bill.

Hon DAVID PARKER (Labour) : As has been said by previous speakers on behalf of the Labour Party, we will be supporting the Courts (Remote Participation) Bill. I concur with some of the comments that have been made by the two previous speakers. I agree that there are some imperfections in our justice system. I agree with Mr Quinn that it takes far too long, on average, between arrest and trial in criminal matters. We need to improve processes in that respect. A lot needs to be done to reduce the complexity of trials to ensure that people get a fair trial, and to ensure that the trial takes place not too long after the offence, partly because people languish in prison, if they have not been granted bail, at the cost of the State, during the period between arrest and trial. That is unfair to them, on occasion, and a waste of taxpayers’ resources.

I also agree that civil litigation has become so complex and costly that most litigants now cannot afford to go to the courts to resolve their disputes. Given that one of the reasons we have courts is to provide a mechanism to enable people to resolve their disputes without resorting to non-civil means, such as stand-over tactics or violent disagreements, that situation means that something is wrong with our system.

This bill makes some good changes. It states that audiovisual technology can be used on some occasions, and it sets out some rules on that use. I will refer to some of those rules. When no evidence is being given in a criminal proceeding, the presumption ought to be that the matter can proceed by way of audiovisual links. Those are things such as a bail application or a call-over. An example might be a charge originally presented in court on one day and adjourned to a date a month later, and everyone has agreed that at that month-later date the matter will be referred to a subsequent date for a plea of guilty or for a trial.

Now, at that call-over there really is no point in going to the trouble and expense of having all of the parties present. Where there is no substantive evidence being given and no substantive question being tried by the court, it is perfectly proper that video technology be used on some occasions, and, indeed, that there should be a presumption in favour of its use. Of course, that presumption can be overcome if there are good reasons not to use audiovisual technology in a particular instance.

In respect of civil matters, again the test does not need to be as high as it needs to be in respect of a criminal trial where the substantive charge is being heard. So there is a relatively lighter test in respect of the use of this new technology in civil matters than applies to matters where the substantive criminal charge is being heard, such as a defended hearing or a jury trial where someone is charged with a crime. However, in respect of the substantive criminal trial it is proper that there is no presumption in favour of use of this technology, because there is a lot in what Hone Harawira said: that we ought to give people the opportunity to hear, and be heard, if they are on trial.

The definition of to whom this new law applies is wide. It refers to “any participant in a proceeding”, and a participant in a proceeding can include a defendant or a party to a trial. I would not like to see a system where we were forcing the defendant into a trial process where he or she, or witnesses, did not have a right to be there personally. That protection is afforded by this legislation by setting out criteria for when to allow and when not to allow the use of audiovisual links. Those criteria are set out, firstly, in clause 5; secondly, in respect of criminal proceedings, additional criteria are set out in clause 6. In criminal proceedings the overall consideration is the potential impact of the use of the technology on the right of the defendant to a fair trial. That consideration is at the heart of decisions on whether this technology can be used in criminal proceedings.

On one issue I disagree with one of the speeches that was given by an earlier speaker on behalf of National, and that was in the contribution that Simon Bridges made. Simon Bridges said that he agreed with the use of this technology, but then went on to say that he could see it being extended into more regular use in respect of the substantive trial in a criminal matter. I agreed with him when he said that demeanour does not prove “truth”. Someone can present as a fidgety witness who looks nervous, and a lot of people are understandably nervous when they are in court, even as witnesses, but that fidgetiness or nervousness does not necessarily indicate that the person is lying. Similarly, someone might appear at a trial and have a very calm demeanour, but that calm demeanour does not prove that he or she is telling the truth.

I agree with both of those propositions that Simon Bridges stated. Where I disagree with him is in taking it a step further to suggest we can rely more on audiovisual language, where one does not have the same access to body language and the nuances of people when they are giving evidence, because although demeanour does not prove truth or untruth, it is certainly relevant to the assessment of whether there is truth or untruth. Although demeanour will not always show to the judge or jury whether someone is lying or is to be believed, on occasions it does. The defendant ought to have the ability to have recourse to those occasions, and the judge or jury ought to see those occasions. There are many occasions where a witness is not fidgety or looking nervous in respect of the whole of his or her evidence, but when it comes to the crucial part of the evidence that is being contested and where there may be an untruth being told, or a gilding of the lily in one way or another, the body language changes.

In respect of that sort of situation, it is very important that the witness is there to be seen by everyone: the jury, the judge, and the defendant. The defendant therefore gets the sense that his or her trial is fair. We need only to think of our own experience in Parliament, where we have audiovisual presentations from people at select committees. Although again that is a great facility that saves cost to people, on occasions I think one loses the passion and sincerity of a presentation that one sees when people appear in person in front of the select committee.

Although the Labour Party supports this legislation, we emphasise that we do so on the basis of the protections that are found in the legislation, which have different presumptions in respect of different sorts of processes, so that for a criminal substantive matter where evidence has been called, there is no presumption in favour of the use of this technology. On many occasions in a substantive hearing, the evidence will be inappropriate to be heard in that way.

Having said that, we cannot ban its use in all criminal substantive matters, because there will be occasions when all parties, including the defendant, agree that it is appropriate that the matter be traversed by way of audiovisual evidence. An example might be where there is some professional evidence being given about some theory of a pathologist on how somebody died, or an alternative cause of death being posited, and the witness who has that specialist expertise is overseas.

It could be in everyone’s interest—the Crown because the Crown wants to get to the truth of the matter, and the defendant because the defendant wants to prove his or her innocence—that the evidence of that international expert in this possibly narrow field be available to the court. In practice that may be affordable to the defendant only through the use of audiovisual technology, and it could be very appropriate that it be allowed. This legislation would allow that to happen, by audiovisual link, without creating a presumption that audiovisual evidence can be forced upon a defendant where the demeanour or the truth-telling of the witness is one of the matters at issue, and where the defendant ought not to be forced to accept such evidence.

So for those reasons the Labour Party will be supporting this bill’s referral to the select committee. We think it is an appropriate advance. It will not make much difference to the cost-effectiveness of trials, but it will make a small difference, and it is a step in the right direction. Thank you.

• Bill read a first time.

Hon Dr NICK SMITH (Minister for the Environment) on behalf of the Minister of Justice: I move, That the Justice and Electoral Committee consider the Courts (Remote Participation) Bill, that the committee report finally to the House on or before 31 May 2010, and that the committee have the authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

• Motion agreed to.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti) : The Maori Commercial Aquaculture Claims Settlement Act 2004 requires the Crown to provide iwi with the equivalent of 20 percent of the aquaculture space created between 21 September 1992 and 31 December 2004—the pre-commencement space obligation. These amendments are designed to shore that up, and the Labour Party will be supportive of them—certainly, they are timefly. In addition to the provision of the 20 percent of all new space created between these dates, the Crown has assured that it will endeavour to meet its pre-commencement space obligations by 31 December.

The amendments to the Māori Commercial Aquaculture Claims Settlement Act 2004 have provided the Crown with an additional option to comply with its aquaculture pre-commencement space obligations. One thing to say from the outset is that the interrelationship that has grown between the Crown and iwi, and iwi and iwi, has allowed us to reach a joint agreement on the amendments. That is something that has to be commended and recognised. The main purpose of the proposed amendment is to allow the Crown to deliver on its contemporary Treaty of Waitangi obligations, which is a process that the previous Labour Government began and put a whole lot of effort into. The Minister needs to be commended now for getting it to this stage and taking it through to finality.

There were problems with the existing settlement framework, and the progress for discharging the Crown’s space obligations and responsibilities was something that the Labour Government and other iwi partners have worked on together. Again, I commend the Minister for his efforts. The proposed change allows practical solutions that certainly are at the forefront for the Hauraki iwi and the Te Wai Pounamu iwi. The amendments will certainly give effect to the agreement between the Crown and the iwi of the South Island Hauraki for an early settlement of the Crown’s pre-commencement space obligations, and certainly that is why the Labour Party is very supportive of this legislation.

E whakaaro atu i roto i a tātou, mō te mahi pēnei tonu. E mōhio atu tātou i roto i a ngāi Māori te kaha rawa i te mahi atu i ngā mahi e rite atu ki te ahu whenua nā te pai o te mahi pēnei tonu, kei te mahi tātou haere atu ki te wā i te mahi atu mō te whakatikatika o ngā hua o te takutai moana. I tautokotia te Rōpū Reipa mō te mahi pērā tonu, e whai hoki tātou hei oti te mahi e tīmata atu i tērā kāwana o te Rōpū Reipa mai o te tae i te wā nei. Nō reira, tēnā tātou.

[There is a view within us that we continue to work towards this end. We are mindful that within Māoridom there is a will to achieve much as they did in agriculture, and repeat it here in terms of harnessing, adjusting, and harvesting the benefits from the sea. The Labour Party endorses these initiatives and will continue to work towards completing what the previous Labour Government set out to do from the outset to the present time. Thank you.]

Hon TAU HENARE (National) : Te mea tuatahi ki ōku nei kōrero, ki te whānau pani. Raihā, mihi kau atu au ki a koe, mō tō kaha, mō tō manaaki ki ahau, ki tōku whānau. Nō reira, he mihi aroha ki a koe e whaea, me tō whānau hoki. Anō he mihi aroha ki a Nanaia, me tana whānau. Nō reira, he wā potopoto tēnei tangi ki a koe.

[I wish to firstly acknowledge the bereaved family. Lady Raihā, I thank you for your efforts in taking care of myself and also my family. Therefore, I express my condolences to you and your family, and to Nanaia and her family, too. This, then, is just but a brief moment to lament you.]

Very briefly, the purpose of the bill is to add some tools to the tool box of the Crown for its complying with its obligation under section 22(1) of the main Act in respect of the pre-commencement space. I echo the words of my colleague Parekura Horomia, who said that the level of cooperation and consultation between iwi and the Crown, iwi and iwi, and everybody involved was a sight to behold.

The bill is about making good on a promise of using the settlement to better everybody rather than just one group. This pre-commencement settlement is in everybody’s best interests. I can say without contradiction that the members of the Māori Affairs Committee who heard submissions were astounded at how easy the process before the select committee was, namely because we all agreed on it, but also because we wanted to see—

Kelvin Davis: We always agree.

Hon Parekura Horomia: We always agree, yes.

Hon TAU HENARE: Yes, it goes without saying that we always agree.

Paul Quinn: Outstanding leadership.

Hon TAU HENARE: Thank you very much. It was also about trying to get a swift turn-round. As you, Mr Chairperson Barker, know better than a lot of people, sometimes the cogs in this place can turn very, very slowly. I will not take up too much of the Committee’s time on these provisions, because I do not think we need to do so.

I suppose the winners in the first instance are the Hauraki people and Te Wai Pounamu people. They now have the opportunity to make good on their wishes to have an economic base for their iwi members. It also gives the Government the opportunity to look, maybe later on, at dealing with Treaty settlements and at how fast we can move, if there is a will to do that.

I mentioned the cooperation of iwi and the Crown. I also want to say something about the cooperation of iwi. Sometimes cooperation between iwi is very difficult because of the boundaries, because of old stories, and because old wars and fights are being fought on another battleground.

Hon Mita Ririnui: Only up north!

Hon TAU HENARE: That does not happen in the north. Thankfully, on this occasion the cooperation between iwi and the consultation has been second to none. I just want to say that the purpose of the bill is about making a quick start on economic development for the iwi involved.

Hon MITA RIRINUI (Labour) : Ā, kāti rā, e tū tautoko ana i ngā mihi ki tēnei o ō tātau whaea rangatira, e takoto atu rā i te mahau o tana tipuna whare. Nā, koia rā kua huri ki tua o te ārai, kua piripono atu rā ki tana hoa rangatira kua mate noa atu i mua i a ia. Koirā e Raihā, haere atu rā e koe i runga i tō huarahi wairua kia tae atu rā ki ngā ringaringa mahana o tō rangatira e tatari mai rā mōu. Nō reira, koinei te tū ki te tautoko i ngā mihi aroha ki a koe. Nō reira haere atu rā, haere atu rā, haere atu rā.

[I stand to support the acknowledgments to our matriarch who rests on the verandah of her ancestral house. She has passed away to be with her husband, who died long ago. So, Lady Raihā, go on your spiritual journey to the warm arms of your husband who awaits you. Therefore, I rise to endorse the loving tributes accorded you. Farewell, farewell, farewell.]

I join earlier speakers today in honouring the passing of Lady Raihā Māhuta, and I endorse the complimentary statements that have been made about her in this House this afternoon. Certainly she was a very, very strong-willed and determined person when it came to the interests of her people, and that has to be applauded by all, particularly in this House this afternoon.

We are in the Committee stage of the Maori Commercial Aquaculture Claims Settlement (Regional Agreements) Amendment Bill. Specifically, this afternoon we are discussing aspects relating to the purpose of the bill itself. My colleagues the Hon Parekura Horomia and the Hon Tau Henare have covered many of the aspects involved in that particular clause. Later in the debate on the bill I am sure we will cover the necessary amendments to bring about the particular changes to the legislation, but I will put those matters aside for now.

What has not been raised up to this point in time is the history around the aquaculture settlement, and in particular the Māori fisheries settlement reached some years back. It is important to make it clear to the Committee that the aquaculture interests of Māori were set aside to be settled separately from Māori fishery interests in general. Many former Ministers, from both sides of the House, considered these matters to be very difficult and to require considerable time for consultation before they could be properly settled, or, should I say, properly defined in terms of how Māori were to not only enter the industry but also become a force to be reckoned with within it.

I see that the Minister in the chair, Nick Smith, is not the Minister who brought the issue to the House on behalf of the Government. I want to take the opportunity to congratulate the former Minister of Fisheries, Phil Heatley, because I said at the time of the first reading debate that he had tackled this issue very quickly. I was very surprised that he was prepared to act so early on in his ministerial career on the challenges that this legislation places before any Minister. So I take the opportunity now to congratulate that Minister.

In particular, as the previous speaker, Tau Henare, raised, this bill is about iwi-to-iwi relationships in a very competitive industry. When I say “competitive” I mean not only in aquacultural terms but also in terms of mana moana, the water space that is required for Māori to enter the industry. Where there are rich areas of water space, there certainly will not be too many difficulties for Māori in entering the industry. But that space is not always of the best quality. It is very much like land. In some parts of the country, the land is pristine. I am not talking about the conservation estate; I am talking about farming land up and down this country. That situation is very much the same with regard to the aquaculture industry. There are areas of water space that are rich and would certainly promote Māori success in the aquaculture sector, which is already happening. But there are also other areas where there is perhaps not the same sort of richness in the water space.

I recall one former Minister putting a moratorium on aquaculture development simply because the race was on, the battle was on, to secure good water space. Although some concerns were expressed at that time, it was understood that a moratorium needed to happen, and it did happen. As I recall matters, the Minister, having placed a moratorium on the aquaculture industry, gave us the opportunity to rationalise the use of the water space, because there were many stakeholders involved in the use of the water space not only in the commercial sector but also in the customary sector. A lot of areas of water space that Māori consider to be their traditional or customary mahinga mātaitai areas were also being exploited and plundered, and were under pressure from various iwi and commercial groups that wanted to develop certain areas.

There were also environmental issues. I recall sitting on the Primary Production Committee and hearing submissions on the moratorium. I think that was in 2002. Although there was strong opposition in some cases to the moratorium, there were also strong concerns from the industry that the environment in which it worked—I am talking about water space—was showing problems in terms of tidal movements, erosion, water quality, and also the quality of the marine produce. In this case, I am talking about the mussel industry.

So a lot has happened in the aquaculture sector, and it has brought us to the point where now we not only have a strongly regulated industry—for want of better words—but we also have agreements in place that hopefully in the near future will prevent inter-tribal conflict of a commercial type and also encourage iwi to work collaboratively with each other to promote their own involvement in the aquaculture industry. That is all I have to contribute to this part of the debate. I am mindful that we are talking about clause 4 and I have probably wandered way beyond that, but I thank you.

Hon Dr NICK SMITH (Minister for the Environment) : Firstly, I join with the Prime Minister and members of the House who have made their tributes to the passing of Lady Raihā Māhuta. I want to acknowledge working with her in my role as the Minister for the Environment, particularly on the issue of the Waikato River. I know she was a person who will be deeply missed but also one who has made a huge contribution not just to Waikato-Tainui but also to New Zealand.

The Maori Commercial Aquaculture Claims Settlement (Regional Agreements) Amendment Bill puts into effect a settlement for an issue that has been quite divisive in my own community of Nelson: the whole issue of the foreshore and seabed. Aquaculture is very much a new industry. In my view, if we reflect on the Parliament and the big debates that occurred in the early years of this Parliament about land law, or more recently on debates on fishing, we see that this is the latest of those resource issues, which we need to work through in a considered way. I think most of us would regret the way in which the gold rush for marine space got away a bit in areas like the Marlborough Sounds and the Tasman Bay, which gave rise to a huge sense of grievance from Māoridom that led to the very divisive issue of the foreshore and seabed. I hope that in considering this bill, we can lay some of the foundation for the more contentious way this Parliament will have to find a way through the more difficult challenge of the foreshore and seabed.

It is worth noting also that although we went through that sort of gold-rush era in the 1980s and 1990s around the development of aquaculture, we then went to the opposite end with the moratorium. This bill comes about because of the failure of policies in the last decade to provide for aquaculture space. When the agreement was reached with Māoridom that 20 percent of aquaculture space would be made available, it was intended that Māori would get that space from new areas that were being created. What actually happened was that the 2005 aquaculture legislation did not live up to its promise. It did not get the incentives right. So the essence of this bill is to provide an alternative mechanism, effectively through the payment of cash by the Crown to iwi in areas that have a particularly high development of aquaculture.

So although I support this bill and see it as a pragmatic response to, and a way through, a problem, the more critical debate that this Parliament will have to deal with will be to reconfigure those aquaculture laws, so that we can grow the wealth of that industry overall. I welcome the fact that this bill has very broad support in the House. It is important for those communities, particularly in the top of the South Island—whom I am privileged to represent—and also in the Coromandel. But it is very much a stopgap measure to deal with the issue of the aquacultural space that was previously provided and to get some money into the hands of iwi so that they can invest and be part of the industry. However, if this bill is really to deliver on the expectations of Māoridom, it is beholden on this Parliament to sort out aquaculture laws so that aquaculture is an industry that can grow, and grow without the sort of gold rush that we had in the 1990s. That will be a difficult balance for this Parliament to address, but one that we must urgently do if we are to move from cleaning up the mess to looking forward on the future of aquaculture and, particularly, Māori involvement in that important industry.

KELVIN DAVIS (Labour) : Tuatahi māku, hei tautoko i ngā mihi kua tukua i roto i te Whare nei ki tō tātau whaea a Lady Raihā. Kua tae mai ngā kōrero, hei tōna wā ka hikinga, ka kawea atu ki tōna ūkaipō i roto o Ngāti Manu. Nā reira e te whaea Raihā, e moe, e moe e te rangatira.

[Firstly, I support the acknowledgments expressed in the House to our matriarch Lady Raihā. News has arrived that she will be taken in time from where she is lying in state to her motherland in Ngāti Manu. Therefore, rest in peace, the matriarch Raihā, rest.]

It is probably coincidental that today, on the day that we talk about the Maori Commercial Aquaculture Claims Settlement (Regional Agreements) Amendment Bill, I was given a pottle of Bluff oysters. The problem with giving just one pottle of Bluff oysters to a Māori when he is surrounded by colleagues such as Shane Jones, Mita Ririnui, and Parekura Horomia is that—

Hekia Parata: You get a sniff.

KELVIN DAVIS: One gets a sniff, but that is about all. But not wanting to be accused of not sharing with my colleagues, I did whisper out to them. When they did not come running, I decided that they were not interested.

The Labour Party supports this bill. In essence, it is a bill that helps to allocate 20 percent of the aquaculture area to iwi. I believe that this is a way forward for Māoridom. I have spoken before about the fact that Māoridom has always relied on aquaculture, or kai moana, as we say, for sustenance, and now it is only appropriate that we move from the traditional gathering of seafood into doing this as a business. This bill helps Māori to move ahead in terms of the aquaculture industry.

I look forward to the day when Māori can help to expand this industry. I believe that we are looking to expand it to over a billion dollars for the economy by 2025, and I look forward to that. I have travelled extensively overseas and, being a connoisseur of seafood, I always try the local delicacies wherever I go. I have to say that New Zealand seafood is second to none.

Hon Tau Henare: Been to Japan?

KELVIN DAVIS: I have to say I have not been to Japan, so I cannot comment on the comparison there. I do recall going to Canada and having a meal of what I was told was scallops, which were in fact stamped fish flaps. To me, that is not seafood, whatsoever.

The purpose of the proposed amendment is to allow the Crown to deliver on its contemporary Treaty of Waitangi obligations in relation to commercial aquaculture by recognising the problems with the existing settlement framework and the progress for discharging the Crown’s pre-commencement obligation. The proposed change allows a practical solution to the issues without renegotiating the underlying intent of the settlement.

Going back to Māori and the aquaculture industry, there are technical difficulties and bureaucratic red tape that hinder the expanse and development of the aquaculture industry. I would like to raise again the issue of a friend of mine who is an oyster farmer in the very far north. He has to post a bond of $9,000 per hectare for his oyster farm. He has 13 hectares, and that equates to something like $117,000 that he has to post up front before he even starts making a dollar from his farm. That sort of red tape hinders his development and his desire to progress his oyster farm.

Hon Dr Nick Smith: What’s the bond for?

KELVIN DAVIS: The bond is for the clean-up, if he ever has to abandon the farm. I am not sure how the regional council came to the sum of $9,000. He should count himself lucky, in that it started at $22,000 a hectare. He was totally unable to come up with that sum of money. In the far north there have been only two instances of people walking off their farms. One was the Waikare Inlet, where the conditions were totally outside of the control of the farmers in that there was supposed effluent spilling over into the Waikare River. There was one other incident, which I am not sure of. It is hard to justify the extent of that bond, and there could be better ways, I feel, to make sure that we cover the need to have some sort of contingency fund if oyster farms are abandoned, but that that fund is not a hindrance to their development. Kia ora.

Hon MARYAN STREET (Labour) : I rise with great pleasure to speak to the Maori Commercial Aquaculture Claims Settlement (Regional Agreements) Amendment Bill. I do need to take issue, however, with my colleague Kelvin Davis, in that his extension of an invitation to taste Bluff oysters to Māori colleagues only was seriously limiting and limited. I will talk to him about that issue later. Although this bill is about Māori commercial aquaculture claims settlements and we have not had this conversation yet, I can assure the member that some Pākehā are also devotees of kai moana. So the next time that he has a pottle of Bluff oysters delivered to his office, I will ask to be on the invitation list. They will go even less far than they went when the invitation was extended to the member’s Māori colleagues.

The purpose of this bill is clearly to provide the Crown, as the bill states, with an additional option for complying with its aquaculture pre-commencement space obligations. As the Minister in the chair, the Minister for the Environment, said a few moments ago, this of course was an issue of particular anxiety and difficulty in Te Tau Ihu. For the eight iwi who are associated with Te Tau Ihu, the top of the South Island, this bill has been a long time in coming and is something they have welcomed. I too have the privilege and the honour of living in the top of the South Island. It is an extraordinary place. It is imperative to make sure that the resources of that area are shared in a way that reflects the obligations that are incumbent upon both the Crown and iwi under the Treaty of Waitangi. This legislation goes some way towards correcting an imbalance of the past, and towards addressing the contemporary needs. Therefore it has support from across the Chamber, and that is as it should be.

There is also, of course, the iwi of Hauraki, who are engaged with this legislation. But Ngāti Apa ki Te Rā Tō, Ngāti Kōata, Ngāti Kuia, Ngāti Rārua, Ngāi Tahu of course in Te Waipounamu, and Ngāti Tama, Ngāti Toa, Rangitāne, and Te Ātiawa from the top of the South Island are all iwi with whom I engage on a regular basis. Their satisfaction at the resolution of this matter is of great satisfaction, both to the Crown and to Māori. Although the wait has been a long one—and I recognise that—it is important that we move forward collectively as a Parliament and support this legislation, because there is indeed enormous economic potential in the industry. Even just in the Te Tau Ihu area there is enormous potential in aquaculture, and I look forward to it becoming a significant and thriving industry.

There are some difficulties around the aquaculture industry at the moment, as it is currently being experienced by the fishers and the industry representatives in the top of the South Island. I hope that we can move from where we are now with this industry, on the basis of this legislation, to something that is dynamic, that is profitable, that adds value, that provides much-needed jobs in the top of the South Island, and that provides employment that is properly remunerated. However much people love to live in the Nelson area, they cannot live on “sunshine” wages. I look forward to the development of aquaculture benefiting not only New Zealand’s economic position but also, very particularly, the position of the people in the top of the South Island. Kia ora koutou.

Hon SHANE JONES (Labour) : Kia ora anō tātau. Hei tīmatanga, tāpiri kau atu he kupu ki ērā atu o ngā mihi i utaina ki roto i tō tātau Whare i tēnei rā. Kāti e te whaea e Rai, takoto. Takoto mai rā i roto i te whare, i roto anō hoki i te whare tātai o Waikato, ki ngā tahataha o te awa, me āna au. I pau i kawe atu tō kaha, kia mā, kia harakore ai. Tērā anō atu te au o Waikato ka hari i a koe ki te Tai Tamatāne. Ka whai atu koe i te rerenga a tō tūpuna a Ueoneone ka hoki me āna kuia tokorua a Reitū, a Reipae ki roto o Te Tai Tokerau. Ka whakauru atu koe ki roto i te moana, tae noa ki Rotokākahi, te piringa o Waikato ki a Ngāpuhi Nui Tonu i tōna wā. Kātahi koe ka whakawhiti atu ki te puna e kore rawa e mimiti, e kitea mai ana ki roto o Taumarere. Hei konā koe takoto ai, hei konā koe okioki ai. Nā reira e te whaea, e moe, moe oti atu.

[Greetings, one and all. To begin with, I would like to add some words of condolence to those expressed before the House today. Lady Raihā, rest. Lie there in Waikato’s aristocratic house beside the river and currents that carried your strength as well as cleansed and purified you. Another of the Waikato River’s currents will take you to the west coast, where you will follow the journey of your ancestor Ueoneone, who returned to the far north with Reitū and Reipae, the two sisters. You will travel across the sea to Kākahi, a key connection between Waikato and Ngāpuhi in days gone by. Then you will cross over to the spring that never runs dry, which can be seen in Taumarere. Here you will lie and rest. Rest there eternally, Raihā the matriarch.]

It is a pleasure to stand very briefly and talk in favour of this Maori Commercial Aquaculture Claims Settlement (Regional Agreements) Amendment Bill. Let us bear in mind that this bill flowed from litigation that originated with the tribes in Te Tau Ihu, who fought to secure marine farming rights and were denied that opportunity as a consequence of bureaucratic inflexibility and provincial prejudices within the local government community of that part of New Zealand. After a successful bout of litigation and the very highly publicised seabed and foreshore issue, an attempt was made to address unsettled business flowing from the 1992 full and final fisheries settlement. I refer here to the Māori interests in the marine farming environment. That was undertaken at a time when there was great debate as to whether such a claim had any merit whatsoever. So at least it is pleasing this afternoon to see that both of the main parties are of one mind that there was merit to those claims, and we are endeavouring to give effect to that today.

The aquaculture industry already covers 5,700 hectares of water and it generates somewhere between $350 million and $400 million worth of revenue. According to Doug Kidd in the early 1990s, it was to be a $1 billion industry. As a consequence of this settlement, Māori are finding a place in this industry. Although this industry has growth potential, it needs to be pointed out that the growth can come only through stimulating greater market demand and making sure that the production process in the future for these exports, whether they be oysters, fish, or mussels, is operated in the most efficient way possible. Those Māori who acquire financial capital as a consequence of this settlement need to be very skilful in how they invest those moneys, because the aquaculture industry is no El Dorado.

We are told that the aquaculture industry can grow to 16,000 hectares, although possibly it will be arrested by those existing property right - holders in the marine environment who fear that the profligate spread of aquaculture space up and down the country that does not take an account of the undue adverse effects test on those who have prior property rights can end up pitting Māori against Māori, marine farmer against commercial fisherman. But in terms of the passage of this legislation, it is another goal that is being achieved. It is good that both major parties and their various supporters see merit in advancing it, and the true test as to whether it is durable will depend on the quality of the stewardship of the people who take possession of this financial capital and invest it, knowing that aquaculture is a long-term game. It is not a game where wealth can be created by simply claiming space through the Resource Management Act and then hoping to hock it off at an inflated value, because capital is short in this industry. Capital is short throughout our entire economy, and until Māori and suitable partners manage to amass the necessary level of capital, we will not see a massive increase in the amount of farmable space.

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

• Motion agreed to.

• Clause 4 agreed to.

PAUL QUINN (National) : Thank you, Mr Chairperson, for accepting my call. I will canvass the clauses set out in Part 2, but before I do that I place on record my congratulations to the chair of the Māori Affairs Committee and to all the members of the select committee. Members may not have noticed this, but most, if not all, of the bills that come back to the House from the Māori Affairs Committee do so with the unanimous support of that committee. It is no wonder that members on both sides of the Chamber join as one in commending the excellent work that the Māori Affairs Committee does.

Having placed those comments on record, I will cover a couple of provisions of Part 2. This part is the operative—

Hon Shane Jones: Which page?

PAUL QUINN: It is Part 2—page—

Simon Bridges: How many clauses?

PAUL QUINN: —well, there are a number of clauses in here. Firstly, I will focus on clause 7, which sets out the Crown’s obligations in respect of this particular bill. Members will see a number of insertions are to be made into the principal Act, and—

Hon Tau Henare: Amendments.

PAUL QUINN: —these amendments; I thank my colleague—are the operative parts that enable—

Simon Bridges: You’re pretty passionate about this, aren’t you?

PAUL QUINN: —ha, ha; excuse me—the proposals to be carried out. Those proposals are to replace or bring into effect the fact that, if you will, the undertakings made in what has already been referred to, quite correctly, as the pre-commencement stage may be able to be fulfilled with a lump-sum payment. These provisions of this bill will enable that.

I now move to clause 9, which is on the next page, I say to Shane Jones. Members will see there some specitivity around, or it makes some reference—

Simon Bridges: Specitivity? What’s specitivity?

PAUL QUINN: —to section 31, as amended by the substitution of new subsection (4).

Hon Maryan Street: Oh, this is really excruciating.

PAUL QUINN: Please!

Hone Harawira: Can you take your seat, please, Mr Quinn?

PAUL QUINN: I am being distracted.

Hone Harawira: You’re coming apart!

PAUL QUINN: Yeah. Just again focusing—

Hone Harawira: Have some more oysters.

PAUL QUINN: —ha ha—on that, as I said, I wanted to draw the Committee’s attention to that section. I think that the rest of Part 2 is all pretty straightforward.

My concluding remark is that I hope that brings a better understanding of the bill. Thank you.

Hon SHANE JONES (Labour) : Kia ora tātou. After having followed that presentation, which was defined—

Hon Steve Chadwick: Did you follow it?

Hon SHANE JONES: I followed it not in a comprehension sense, but, perish the thought, in the physical sense. I want to direct our attention to regional agreements, and in particular, to subsections (4), (5), (6), and (7) of new section 29A, inserted by clause 8 of the bill. There is a lesson that has been applied in this section, pointed out in subsection (6), where it states that “No court or tribunal has jurisdiction to inquire into the quantification or the adequacy of the benefits to be provided by or under a regional agreement.” Of course, what this refers to—and I give full marks to the Māori Affairs Committee, which worked through this legislation with the advisers—is that we will not see a reversion to the protracted debates as to who and which party should get which particular entitlement as a consequence of the regional agreements being agreed to. Māoridom has been blighted by no end of litigation as to what was an adequate entitlement in relation to the historic fisheries settlement. So, without sounding too nauseous, ngā mihi. I acknowledge the chair and other members of the committee, who have prevented a repetition of that.

However, the bill goes on to say—and the qualified, senior lawyers in the House would know this—it is impossible to close down the right of appeal to the High Court. Indeed, our party has learnt that as a consequence of the seabed and foreshore exercise. The High Court will have as part of its inherent jurisdiction, I dare say, under subsection (7) the ability to perform an interpretative function. As the regional agreements are entered into, there will inevitably be conflict. Why will there be conflict? Because many of those agreements will reflect the ancestral aspirations of the hapū and tribes who have historically occupied harbours and other areas along the takutai moana, along the foreshore. They will have had, over the years, their own favoured sites for mātaitai gathering, etc., and the regional agreements are really an attempt to shoehorn them into an industry. These agreements cannot be based on a static view of where and how Māori live along the coast, because aquaculture at the end of the day derives its revenue and its power, in terms of an economic force, from international markets. So that is a very sensible contribution in my view.

For those participants who cannot get their affairs into order, or who acknowledge that they actually need a trustee to enter into the regional agreements on their behalf, the trustee will be required to abide by actionable obligations—actionable duties. But it is always a double-edged sword when one provides justiciable ability in relation to Māori issues. What might be settled on the marae—I can assure members that getting agreement over seafood assets is no mean task—through negotiation needs only one party to feel slighted about before that party dashes off to find an ever-ready lawyer, whose contribution is inversely related to his or her cost structure, and then one is back to somewhere near zero. So the fact that the duties of trustees enable them to enter into such regional agreements and be bound by those agreements is very sensible, providing it does not lead to a fresh bout of litigation.

In addition to that, the reference to the trustees is important because the participants in the regional agreements must focus on aquaculture as part of the New Zealand resource-based economy, not focus on it being a new theatre for conducting historic and largely irrelevant debates that have very little to do with the future economic pathway of Māoridom and more to do with recitations of history of a time that has passed us by. It is likely to become particularly problematic and vexatious when we get to the point of making decisions about harbours, because some harbours are regarded as areas for collecting spat. Others are regarded as areas for growing the mature product into a form that the market can absorb. I support having less litigation and more economic activity. Kia ora tātou.

• Part 2 agreed to.

Hon SIMON POWER (Minister of Justice) : I move, That the Trans-Tasman Proceedings Bill be now read a first time. At the appropriate time I intend to move that the Trans-Tasman Proceedings Bill be referred to the Justice and Electoral Committee, that the committee report finally to the House on or before 29 July 2010, and that the committee have authority to meet at any time while the House is sitting, except during oral questions, and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

The Prime Minister said in his statement to Parliament that he wants to give the single economic market a new impetus this year, and this bill is part of that programme. The Trans-Tasman Proceedings Bill simplifies the process for resolving civil disputes with a trans-Tasman element, making it easier to resolve these disputes more efficiently and at lower cost. It will also reduce impediments to enforcing civil penalties and certain regulatory fines across the Tasman. The bill will implement the agreement on trans-Tasman court proceedings and regulatory enforcement that was signed by the previous Government in Christchurch on 24 July 2008.

In November last year I was privileged to be invited on to the floor of the Australian Federal Parliament as the Attorney-General, Robert McClelland, introduced parallel legislation. That legislation has now been passed by both Australian Houses and is awaiting the Royal assent. As indicated at the start of this speech, I will be seeking a shortened select committee period so that we can move as quickly as possible to the final stages necessary to implement the agreement, given the progress that the Australians have made to date.

Currently, with a few exceptions, New Zealand and Australia treat each other in the same way as any other foreign country when it comes to cross-border court proceedings. This is clearly undesirable, given our unique relationship and the commitments we have made to reducing barriers to trade. This bill will enable closer integration of our civil justice systems. That will benefit both countries, and progress in this area reflects our close relationship, our common legal heritage, and the confidence we have in each other’s judicial and regulatory institutions.

I would like to briefly outline some important measures in the bill. The bill simplifies the service of civil court proceedings. It will enable a statement of claim filed in a New Zealand court to be served on someone in Australia as of right. The plaintiff will not have to prove a connection between the proceedings and New Zealand, or to seek leave of the court. This bill and its Australian equivalent will adopt a common give-way rule for deciding which country’s court should hear a dispute. At present, New Zealand and Australian courts apply different tests to decide this issue, which can lead to unnecessary expense and uncertainty. The bill will also expand the range of Australian court judgments that can be enforced in New Zealand, and simplify the process for enforcing them. Currently, only final money judgments from one country may be enforced in the other. This bill extends this to include final non-money judgments, such as an injunction. The only ground for not enforcing an Australian judgment will be public policy. Any challenge that goes to the merits of a judgment will have to be raised with the original court.

The bill also introduces new measures to improve regulatory enforcement. New Zealand and Australia both have a strong mutual interest in the integrity of trans-Tasman markets and the effective enforcement of each other’s regulatory regimes. The bill allows all Australian civil pecuniary penalties to be enforced in New Zealand, unless they are specifically excluded from the regime. Equally, the Australian legislation contains mirror provisions enabling New Zealand civil penalties to be enforced there. Criminal fines play an important role in encouraging compliance with regulatory regimes. The Trans-Tasman Proceedings Bill will allow criminal fines under certain regulatory regimes to be enforced in the same way as a civil judgment debt is. It is intended to apply only to those regulatory regimes that affect the integrity, effectiveness, and efficiency of trans-Tasman markets.

The bill simplifies the conduct of court proceedings in other ways. For example, it encourages greater use of technology so that parties and their lawyers, with leave of the court, may take part in New Zealand civil proceedings from Australia by audio or video link. Needless to say, requiring parties based in Australia to attend court in person is inconvenient and costly, and can add to delays. But it is not only businesses that will benefit. For example, an individual whose former partner moves to Australia before they reach an agreement on how to divide their relationship property will benefit from the simplified procedures and reduced costs.

This bill offers direct benefits for both New Zealanders and the New Zealand economy. New Zealand’s relationship with Australia is our most important, and Closer Economic Relations has set a global benchmark for free trade. Now is the time to build on that success through the single economic market programme by simplifying and improving the process for resolving trans-Tasman civil disputes. I commend the bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East) : Labour will support the first reading of the Trans-Tasman Proceedings Bill. Obviously, I have been involved in this legislation for quite some time. I was originally involved as the Associate Minister of Justice in 2003, and was instrumental in establishing the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement. So it was certainly very satisfying to be able to sign the agreement on behalf of the New Zealand Government back in 2008. I think it was a very good occasion, and I really enjoyed it. I recall Justice French hosting the occasion at the Christchurch High Court. It is the only time I have sat on the bench, and I have to say the view is good from up there, but I would not really like to be a judge. It is probably an experience that I will park as a happy memory, rather than something that I would be ambitious to achieve in a future legal career.

The preamble to the agreement is worth recording. I will not read it into the record, but I will summarise its main features. First of all, it acknowledges our longstanding friendship, close historic, political, and economic relationship, and, of course, the Closer Economic Relations agreement itself. I think it is worth noting for the record that it is this weekend when we celebrate, I think, the 27th anniversary of the signing of CER on 28 March 1983. It is quite a substantial event that is coming up. I am aware of that date because when I signed the agreement on behalf of New Zealand we were in the 25th anniversary year of CER. We are now 2 years down the track. I think it is quite significant that we are very close to the actual date of the anniversary of the signing of CER back in 1983.

The second thing the preamble does is acknowledge each other’s confidence in the other’s judicial and regulatory institutions. I think that is quite a powerful expression. It enables both jurisdictions to essentially give up something in order to know that they will be in a good, strong position, regardless of on which side of the Tasman Sea a particular action is being mounted. The third thing is that it affirms the shared commitment to appropriate and effective resolution of trans-Tasman civil disputes and increased regulatory cooperation. Of course, that is a major platform of the Single Economic Market (SEM) agenda, which I had much involvement in myself as Minister of Commerce in the previous Government. Finally, it agrees to build on the existing cooperative regime, regulating the taking of evidence and associated court procedures, in order to further streamline aspects of civil court proceedings and regulatory enforcement and reduce unnecessary procedural and regulatory business in the conduct of litigation. There is a long list of things that the agreement does, but, in essence, it simplifies the trans-Tasman service of court proceedings and enforcements of judgments, it expands the range of enforceable judgments, and it improves regulatory enforcement of civil pecuniary penalties and certain criminal regulatory fines.

I congratulate the Government on retaining the regulatory impact statement within the explanatory note of the bill. I know that the Government has made a decision to take the regulatory impact statements out of printed bills and have them available only on the Treasury website. I state again for the record that I think that is a mistake. It is incredibly useful for MPs in the House to be able to pick up the bill off the Table of the House and see the process that the Government has gone through in a quality, regulatory impact-analysis way. I really do reinforce how worthwhile they are, and this bill is a very good case in point.

This bill has an excellent regulatory impact statement within it. The reason I say that is that it does exactly what a regulatory impact statement should do—it states the public policy objectives of the legislation up front. We have a very clear statement of what the legislation is designed to achieve. It states: “The public policy objective for trans-Tasman court proceedings is to achieve closer integration between the New Zealand and Australian civil justice systems in order to—make resolution of civil dispute with a trans-Tasman element simpler, less costly, and more efficient; and make any remedies more effective; and support the success of the trade relationship between New Zealand and Australia.” Within those three short statements we have encapsulated the public policy objective of the legislation. Then it goes on to state a further objective, which is “to improve the enforcement of various regulatory regimes in which both countries have a strong mutual interest”. It talks about reducing incentives for people to move themselves or their assets to the other country to put them beyond reach of a regulatory regime, and to avoid enforcement gaps that would otherwise exist. We all know examples of people who have gone to Australia in order to avoid obligations that they have in New Zealand. This, obviously, is a public policy statement of some merit, and something that all sides of the House can support.

The next element of a regulatory impact statement is to set out all of the options. This bill does that. It actually sets out four options, not just one or two. Firstly, it starts with the status quo, and, in doing that, it identifies the flaws of the current arrangements. Secondly, it talks about strengthening the existing legislation, which is the Reciprocal Enforcement of Judgments Act 1934, and its Australian counterpart, the Foreign Judgments Act 1991. But, as the regulatory impact statement spells out, that is only a partial solution. It would not be in the interest of good governance to pick that up as an option. The third option is legislation based on the Brussels model, which is about easing the enforcement of civil judgments between EU member States, and it talks about mirror legislation being required in Australia. Again, that has some limitations, and it has been identified and spelt out in the regulatory impact statement of the bill. Where more than one court has jurisdiction, priority is decided by a first-to-file rule. What we are adopting between Australia and New Zealand is a give-way rule. That has considerable merit, I think, over the first-to-file rule, because we know that there are limitations with that first-to-file rule from time to time.

The preferred option, option 4, which is set out in the regulatory impact statement, is this bill, the Trans-Tasman Proceedings Bill. It is based on the agreement that I signed back in 2008 with the Hon Robert McClelland, the Attorney-General of Australia. I think this is an excellent example of why regulatory impact statements should be included with bills that are tabled in the House. I know that I could have gone to the website and downloaded the regulatory impact statement if it had not been printed in here—that is exactly what I had to do for the next bill we will be debating on the Order Paper, the Securities Trustees and Statutory Supervisors Bill. That is one of the most important bills on financial regulation that this House will deal with this year, and it does not have a regulatory impact statement with it. I will certainly come back to that when we get to that bill.

The Trans-Tasman Proceedings Bill, on the other hand, has an excellent summary of how the Government came to the conclusion that it was good for New Zealand. It is good for Australia, but, most importantly, it is good for the relationship between Australia and New Zealand. It reduces compliance costs for business. I think that when all of those boxes have been ticked, it has to be a step in the right direction. Labour will be supporting the first reading of the Trans-Tasman Proceedings Bill. I certainly commend it to the House. I am really disappointed that I will not be on the Justice and Electoral Committee, which will consider it in detail, but I am sure those who have that privilege and advantage will feel that they are doing a worthy exercise on behalf of the House as a whole.

SIMON BRIDGES (National—Tauranga) : It is very positive to speak on the Trans-Tasman Proceedings Bill, because I am sure there will not be a party in this Parliament that fundamentally disagrees with it. I think we have a broad consensus in this Parliament for a seamless operating environment for businesses between Australia and New Zealand. We have a consensus for a closer relationship between our two countries—two countries but one market, if you like, is what we are working towards. As I said, I think it makes this very positive.

I want to talk in a generalised sense about the nuts and bolts of this bill, then talk about what it represents. What it represents is quite significant. It represents closer relations and excellent relations between our Prime Ministers, our justice Ministers, and our officials, right on down. I agreed with the Hon Lianne Dalziel and Minister Power when they said it shows how we, on both sides of the Tasman, can have real confidence in our judiciary.

The Trans-Tasman Proceedings Bill implements a treaty between New Zealand and Australia. It has one aim: to make it easier to resolve civil legal disputes with connections on both sides of the Tasman. The bill, which is highly complex and technical, will apply to a broad range of civil disputes, benefiting both businesses and individuals. We understand that it would be complex because over a long period of time many countries, including our own, have built up procedures that become quite different from other countries. To unravel that, to systematise things, and to rationalise things so that there is a seamless relationship between countries, takes some doing.

It will also allow for appearances by video link from one country to the other. Today we have already gone through a reading on another bill that provides for greater video link in our courts domestically. I think it is excellent that we are also doing this trans-Tasman so that businesses are spared the costs of interlocutory matters and adjournments and the like, and having to fly the Tasman with all the consequences that go with that, not only financial but also in terms of carbon miles and the like.

The bill also allows the enforcement of regulatory regimes supporting trans-Tasman markets. As I have already said, it is worth noting that this bill is where it is today because of a number of players, most significantly at that high level between Prime Ministers where there is a warm working relationship and greater integration occurring at a regular and reasonably swift pace, then down to the Ministers of Justice level where I know Minister Power has been working hard and often with his colleagues on the other side of the Tasman and in various states, and at official level and downwards.

A working-group was established that has drilled down, if you like, and made this bill possible in terms of getting into the detail. That group comprised senior officials from the relevant Government agencies in both Australia and New Zealand. I will not go through its recommendations one by one and line by line, but they are of interest. One of their recommendations was that the proposed regime would allow initiating process and civil proceedings issued out of a court in Australia or New Zealand to be served in the other country with the same effect as if service had occurred in the country of issue. It seems to me that that is very significant because any litigation lawyer will say that just domestically trying to serve another party or group to a proceeding causes enough hassle as it is in terms of trying to find them, along with the rigmarole one has to go through when that party cannot be found with substituted service and the like. We have rationalised that and made that seamless on both sides of the Tasman, and I think that is very good. Again, it goes towards cutting down business costs and compliance costs, and pushing for one market so that a business in Palmerston, Australia, can do business with Palmerston North, New Zealand, as if we were one.

Having talked about some of those nuts and bolts and some of the things this bill does, I again reflect on the significance of this bill in a broader lens. It reflects the general commitment on both sides of the Tasman to enhance the operation of the single economic market. It reflects the warmth of relations and the absolute confidence we can have in first-class judiciaries on both sides of the Tasman, and long may that continue.

Hon DAVID PARKER (Labour) : I rise to support the first reading of the Trans-Tasman Proceedings Bill. As the Hon Lianne Dalziel has already said on Labour’s behalf, we intend to support this measure.

The bill’s background is well set out in the regulatory impact statement, where the linkages between New Zealand and Australia are set out. It is probably worth repeating some of those facts to the House: “in 2006, over 900,000 Australians visited New Zealand and well over 1 000 000 New Zealanders visited Australia … in the year to June 2006, exports of goods from Australia to New Zealand came to NZ$7,641 million and from New Zealand to Australia to NZ$6,806 million:”. Those two figures were for the export of goods. In terms of services, services from New Zealand to Australia were $2.3 billion and from Australia to New Zealand they were $3.5 billion. As well as that, there were very significant investments: about $68 billion of Australian investments in New Zealand and about $25 billion of New Zealand investments in Australia.

The first point to make in respect of those trade figures is rather tangential to this bill. It is that there is a trade imbalance with Australia, which reflects the fact that the Australians have a more successful economy than ours. In my view, this reflects a fundamental difference between savings and investment policy on either side of the Tasman. Australia has long had a very good savings record; it does it through workplace savings for superannuation. Australians have had workplace savings for superannuation on a compulsory basis now for a couple of decades. In contrast, New Zealand has not, despite the good efforts of Sir Roger Douglas—back under the Kirk Government—in designing a suitable scheme, which was then trashed by Mr Muldoon in order to buy his way into success in the election in 1972 or 1975.

Hon Sir Roger Douglas: 1975.

Hon DAVID PARKER: It was the 1975 election; I thank Sir Roger for that. Since that time New Zealand has not really caught up with Australia in terms of savings and investment. That is probably the main underlying reason why Australia has a trade surplus with New Zealand: it has deeper investment markets, and it has more money to invest in productive enterprise and to spend on the purchase of New Zealand businesses than we have to spend on the purchase of theirs. As a consequence, we suffer in comparison with Australia.

This measure is good but it causes me to reflect on some of the things that this Government is not doing in terms of bridging this gap between Australia and New Zealand. The Government says that one of its driving ambitions is to close the gap between New Zealand and Australia, but these regulatory measures do not actually cut the mustard. They are good things to do and I do not disapprove of their being done; indeed, this bill is a result of work initiated by the Hon Lianne Dalziel under a Labour-led Government. But the underlying reality is that the Government is not improving New Zealand’s saving and investment record in any material way. Indeed, it has done some things to its disadvantage.

It has missed opportunities to make fundamental changes to the economy. It had a good, considered report from a tax working group. Commissioning that report was wise on the part of the Government, but when it got it, it just picked out the eyes that National would ordinarily pick out of any such policy. It did what it always does. It will end up increasing the relative tax burden of low and middle income people to the benefit of higher-income people, who will get most of the tax breaks.

Mr DEPUTY SPEAKER: I ask the member to come back to the subject. This bill is about trans-Tasman proceedings, not solely about New Zealand. I ask the member to bring his debate back to that subject.

Hon DAVID PARKER: Thank you, Mr Deputy Speaker. Coming back to the bill, I say that that is the reason why the regulatory impact statement records such a gap in the export of goods from Australia to New Zealand compared with the smaller amount we export to Australia, and why we have a trade balance.

The Trans-Tasman Proceedings Bill obviously does some sensible things. Firstly, at the moment a judgment in an Australian court for anything other than a sum of money cannot automatically be enforced in New Zealand. This bill fixes that by saying that if there is an appropriate judgment in an Australian court then it can be enforced in New Zealand—whether it is a simple judgment on a debt or it arises from some other cause of action, such as breach of contract, tort, or whatever cause. Secondly, it says that proceedings commenced in an Australian jurisdiction can be served here. Thirdly, it says that where Australian proceedings are afoot in Australia, interim relief can sometimes be granted in New Zealand under those proceedings. So if there is an Australian proceeding where assets sitting in New Zealand might be at risk, and there is some desire to get some interim injunctive relief to stop the disposal of those assets, that sort of thing could occur. Someone could come to the New Zealand courts and say on the basis of those Australian proceedings that those assets ought not to be shuffled out of New Zealand to some other jurisdiction—and out of the jurisdiction of any court to attach—should the court action in Australia be successful. There are some areas where interim relief cannot be granted. I am not 100 percent sure of the meaning of those clauses, but I will be interested to better understand the detail of those provisions at select committee, where I am sure they will be clarified.

In terms of choice of jurisdiction, there are protections in this bill to make sure that people do not just choose the jurisdiction they think will be best for their case in terms of the differences in the law between Australia and New Zealand, rather than choosing the proper and best court depending on the background to the case. There is ability here for the court to say that the case should not be heard in its jurisdiction, and a stay of proceedings can be applied for in a New Zealand civil proceeding if the court is convinced that Australia is the more appropriate forum for the hearing of that dispute.

Another provision is that the courts can now enforce contractual agreements between the parties as to their court of choice. When parties enter into a commercial arrangement, they can agree in advance what court will resolve their disputes. It can be quite common for a New Zealand business doing business with an Australian-based company to agree in their contract that the contract disputes will be determined in Australia according to Australian law, or in New Zealand according to New Zealand law. In either case those agreements will now be able to be enforced. In the case of an agreement to litigate in New Zealand it would be enforced by this legislation and a New Zealand court; in respect of agreements to litigate in Australia the companion legislation, which will be passing through the Australian legislature, will have a similar effect.

Another important change made by the bill is the facilitation of remote appearances and the remote giving of evidence on both sides of the Tasman. It will be made easier, which is appropriate. We had a discussion earlier in the day about its being more appropriate in respect of civil proceedings than in respect of criminal proceedings. In criminal proceedings the defendant has the right to see the witnesses and to test their evidence in a way that is more important, given the risk to their liberty if they are convicted of a crime, than the less important considerations of personal liberty that arise in respect of civil proceedings, which this bill deals with.

Another part of this bill gives force to various tribunal findings, which will now be able to be enforced in New Zealand. In other words, some of the ways in which judgments can be forced will apply to decisions not just of Australian courts but also of certain other listed tribunals. That, too, is appropriate.

As Lianne Dalziel said, this bill has a good regulatory impact statement. I must say I find it beneficial that it is included in the bill. Although in a perfect world we would have a lot more time to prepare before we speak on these debates, on occasion we come here without having had the opportunity to download the regulatory impact statement. I think it is useful for members, and it aids the integrity of the regulatory impact statement process, if the regulatory impact statement is included in the bill rather than put in some other document. It enables people who are interested in those matters to have easy access to them so that they can assess for themselves whether the proposed regulatory move is justified. In this case I think the regulatory impact statement makes it clear that this new regulation, giving power to enforce judgments arising from Australian courts and making—

Mr DEPUTY SPEAKER: I am sorry, but the member’s time has expired.

Dr KENNEDY GRAHAM (Green) : The Green Party regards this Trans-Tasman Proceedings Bill as introducing an improved legal framework for addressing trans-Tasman civil disputes, and, as such, it should make it easier for such disputes to be resolved more quickly and more cheaply. The bill also provides for the greater use of video and audio conferencing, which has environmental benefits as well as efficiency benefits.

A potential issue with the bill is that it helps set up a regulatory framework that could facilitate further economic integration between Australia and New Zealand in terms of CER and the single economic market. We do not think that this in itself is a strong enough reason to vote against the bill, as the general impact will be positive.

One technical issue with the bill is that it might allow a litigant to lodge proceedings in one jurisdiction without proving that it is the most appropriate place to do so. That is to say, he or she could lodge a proceeding in New Zealand without proving that it is more appropriate to do so here than in Australia. The defendant in that situation could apply for a stay of proceedings to stop inappropriate jurisdiction being used, but this moves the onus of proof from the plaintiff to the defendant, which would be an unusual development.

We think this issue should be explored at the Justice and Electoral Committee, but, with due regard to those passing concerns, we are positively disposed towards the bill and we support its referral to the select committee.

CARMEL SEPULONI (Labour) : I would like to make a brief speech to reiterate Labour’s support for the Trans-Tasman Proceedings Bill. It arises from work done by the fifth Labour Government. In 2003 Helen Clark along with John Howard set up the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement. The working-group identified ways to streamline the process for resolving civil proceedings involving a trans-Tasman element. The group’s recommendations were incorporated into the agreement on trans-Tasman court proceedings and regulatory enforcement, which was signed in 2008.

New Zealand and Australia have two of the most closely aligned or integrated economies in the world. Every day there is huge movement of people, assets, and services between the two countries. Of course, this means that disputes with a cross-border element will inevitably arise. This bill is therefore very important as it facilitates the efficient and effective resolution of such disputes. These reforms are important for all businesses and individuals who could be involved in trans-Tasman disputes. For them, this bill will make the justice system more efficient and more affordable to use. It will simplify trans-Tasman court proceedings and make dispute resolution much easier.

These reforms are also important for the future of closer economic relations between New Zealand and Australia. This bill provides support for the trans-Tasman trade relationship, and removes barriers to that relationship. It more closely integrates the civil justice systems of the two countries, and the passing of this bill will also mean that regulatory enforcement between New Zealand and Australia is greatly improved. This bill is enormously significant for closer economic relations between New Zealand and Australia. It will bring our two separate legal systems into alignment in a way that is unprecedented anywhere in the world. It is symbolic of our close and unique relationship that New Zealand and Australia can work like this to allow for ever closer cooperation between individuals and business across the Tasman.

Acknowledgment should be made to Simon Power for introducing this bill, and to the fifth Labour Government for setting up the Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement in 2003, and for signing the agreement on trans-Tasman court proceedings and regulatory enforcement in 2008. This bill concludes the excellent work done by the previous Government on reforming the process for resolution of disputes with a trans-Tasman element. Thank you.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : Kia ora, Mr Deputy Speaker. Tēnā tātou katoa e te Whare. The 2006 report Māori in Australia: Ngā Māori i Te Ao Moemoeā reckoned that there were about 120,000 Māori living in different parts of Australia. It listed a number of reasons why Māori have chosen to move to what has been called the lucky country: lifestyle, climate, economic opportunity, higher wages, and a lower cost of living. Mind you, there is also a series of more negative factors, which forced Māori to leave Aotearoa: prejudice from Pākehā, mainstream negativity about Māori issues, negative attitudes towards success within their own whānau, the ugly side of domestic violence, and the impact of drugs, gangs, and crime. Members of the Māori Party have been over there a few times, and we have seen the full extent of the challenges people face in trying to maintain Māori cultural practice, and nurture their sense of Māori identity; and despite the best efforts of whānau here to entice their loved ones home again, it is fair to conclude that there will continue to be a significant number of Māori who call Australia home.

In particular, whānau employed in construction, mining, security, community services, and various trades, happily call states such as Queensland and Western Australia in particular a blue-collar paradise. This bill recognises the huge increase in the movement of people, assets, and services between both countries, with nearly 450,000 Kiwis living over there and, apparently, some 60,000 Aussies living here. Exports from Australia to New Zealand total about $8 billion, and exports the other way total about $7 billion. Apparently, it is much the same for services, with about $3 billion going either way.

The area of real difference is the level of investment, with total Australian investment here being about $70 billion and total New Zealand investment over there being about $25 billion. That is what this bill is all about—the challenges posed by trans-Tasman trade relationships—because the growing levels of investment and the export and import of goods and services bring with them a greater number of disputes involving those working across borders. The bill puts in place dispute resolution processes that are cheaper, more efficient, and less complicated and can deliver tangible results to individuals and businesses in both countries. Hopefully, this bill will help streamline the process for registering and enforcing court judgments, facilitate the greater use of technology to enable parties to appear in proceedings in either country, and ensure that fines imposed in either country for regulatory crimes can be enforced in both countries. For those reasons and others the Māori Party will be supporting the bill at this stage. Kia ora tātou.

HEKIA PARATA (National) : Tēnā koe, Mr Deputy Speaker. Tēnā anō tātou huri noa i tō tatou Whare. I am pleased to take a short call on the Trans-Tasman Proceedings Bill. The importance of the relationship between Australia and New Zealand has been long recognised on this side of the Tasman as well as on the other side of the Tasman. The relationship between our two countries canvasses a number of dimensions, and the bill before the House tonight gives us the opportunity to cement further a strong foundation to support that relationship. Tourism occurs between our two countries, a range of business occurs between our two countries, and, as previous speakers have already mentioned, we have a number of family connections across the Tasman, between our two countries.

My colleague Hone Harawira mentioned the report Māori in Australia: Ngā Māori i Te Ao Moemoeā, which was published in 2006. It gave a comprehensive report on the nature, extent, and degree of Māori travel to, and settlement in, Australia. I am delighted to say that in my former incarnation as the deputy secretary of Te Puni Kōkiri I had the foresight to commission that report, because I was concerned to ensure that we did have a fuller understanding of the nature of the Māori population settled in Australia. Of course, even though Māori live in other countries, whether it be in Australia or in any other part of the world, their relationship and their status as tangata whenua of Aotearoa New Zealand is not compromised, and those ongoing relationships remain important to us.

This bill provides, as I said, another dimension of the framework of the relationship between Australia and New Zealand by proposing to cement in place a civil justice relationship. The bill reflects the commitment of both Governments to enhance the operation of a single economic market between our two countries. Our Prime Minister, John Key, emphasised the importance of the single economic market when he outlined the Government’s programme for the year in the statement he made to the House in February. He said that the Government intended to push hard for progress on the single economic market. Australia is often the first stop for New Zealand businesses looking to expand into overseas markets, but getting to grips with the different Federal and state regulations can sometimes be a significant challenge. The single economic market is about aligning the regulatory environments in New Zealand and in Australia so that a New Zealand company operating in Kawakawa or Kaitaia can as easily do so in Canberra, or, indeed, so that a New Zealand company operating in Ruatōria can as easily do so in Sydney. We want to give the single economic market a new impetus this year, and that is something our Prime Minister will be discussing with Prime Minister Kevin Rudd.

This bill is an important step towards closer integration of the Australian and New Zealand civil justice systems, which will underpin those aspirations for greater, stronger, and more positive relationships between our two countries. I commend the bill to the House.

Hon STEVE CHADWICK (Labour) : I rise to take a short call to add to the words of the previous speaker, and speakers before me on this side. As has been said, this bill really arises from the work done by the previous Labour Government. It is quite significant that this work started with John Howard and Helen Clark way back in 2003, and it is really interesting that we are here in 2010—7 years later. That shows how long it takes to do things properly when one is trying to get a trans-Tasman agreement and then trying to get supporting legislation in both countries to any trans-Tasman agreement. These reforms will make legal proceedings between the two countries much easier. Another benefit is that they will be much more affordable. So the bill works towards the closer economic relations plank that the two countries have.

I commend some of the people who have worked on the bill, particularly David Goddard QC. He was a member of the trans-Tasman working-group, which reported back to the Labour-led Government in 2005. He pointed out that these proposals are the most far reaching between two sovereign States with separate legal systems. Today Minister Simon Power mentioned that the enabling legislation has been tabled already in Australia, and this side will not get in the way of New Zealand’s legislation being progressed through all stages.

I feel it is important to acknowledge the work of the previous Minister, Lianne Dalziel. She signed the agreement between New Zealand and Australia in Christchurch in 2008, so one can see how long these steps take. Something like this cannot be supercharged; it had to go through the Australian system and then our legislation has to take its pathway.

This bill is great work and now Labour is in Opposition and we have a National-led Prime Minister working with an Australian Labor-led Prime Minister. It shows how close both countries are with our intent to do what we can, where we can, as two countries to make relationships work more smoothly and to have our legislation more aligned. We support this legislation.

PAUL QUINN (National) : It is interesting: there must be an outbreak of love this afternoon. I note that this is the Government’s third bill that has come before the House this afternoon, and both sides of the House are in full agreement in supporting all the bills before us. I also note that the Opposition took the time to move a motion of congratulations to one of our esteemed MPs, so this is perhaps a great day of love that has broken out.

I want to focus on a couple of things that other speakers have commented on, and I agree with them. The bill is highly technical but it focuses on a further step, if you will, in the growing relationship with our near neighbours in Australia. But there is one aspect that I do not think has been covered and which I think is very important to note for the record. We have obviously reflected that this bill will assist in progressing civil proceedings much more efficiently, and, in particular, will improve the effectiveness of any remedies awarded. It is particularly important to note that the biggest beneficiaries will be medium to small businesses. We know that the big corporates have the resources to take things to extreme and, one might say, play hard ball when things are not going their way. The small to medium sized enterprises have great difficulty in, firstly, taking action, and, secondly—depending on the success or otherwise—being able to pursue the remedies that may have been awarded to them. They have had difficulty and had to go to great expense to pursue those awards. I am very pleased to be able to support this bill, simply because the greatest beneficiaries will be small to medium sized businesses.

The other aspect I want to comment on, as have other speakers from the Opposition, is the regulatory impact statement that accompanies the bill. I note that it canvasses some of the economic indicators contained in the bill, and although I note that I was somewhat disappointed with the contribution of David Parker to this debate, it is worth recording that the very steps this Government is taking—and this bill is one of them—are all aimed at improving the economic position of New Zealand, relative to Australia. We are doing that so that New Zealand can, once again, reverse what occurred under the previous administration whereby our relative position was going backwards. With those few remarks, I join with others in recommending the bill for its first reading. Thank you.

• Bill read a first time.

Hon SIMON POWER (Minister of Justice) : I move, That the Justice and Electoral Committee consider the Trans-Tasman Proceedings Bill, that the committee report finally to the House on or before 29 July 2010, and that the committee have the authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

• Motion agreed to.

Hon SIMON POWER (Minister of Commerce) : I move, That the Securities Trustees and Statutory Supervisors Bill be now read a first time. At the appropriate time I intend to move that the Securities Trustees and Statutory Supervisors Bill be referred to the Commerce Committee, that the committee report finally to the House on or before 30 June 2010, and that the committee have authority to meet at any time while the House is sitting, except during oral questions, and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

This bill establishes a licensing regime for trustees and statutory supervisors who supervise certain issuers of securities or retirement villages. It also provides for the Securities Commission to be notified by trustees or statutory supervisors when any issuer they supervise gets into difficulties, and gives the Securities Commission enhanced power to intervene in these circumstances. The role of trustees and statutory supervisors is vitally important in ensuring that the interests of investors are properly protected. Their role is to monitor the issuers of certain types of securities to ensure that the issuer is complying with the terms of its offer to investors and other obligations. Where the issuer fails to comply, the trustee or statutory supervisor has a duty to take appropriate steps to protect the interests of investors. However, in recent times serious weaknesses have been identified in the supervision of issuers by trustees and statutory supervisors. As far back as 2004, the IMF and the World Bank identified that New Zealand placed heavy reliance on private supervisors like corporate trustees, and that there was insufficient accountability for such supervisors. The finance company collapses have highlighted many areas of concern, including a failure by some trustees to carry out their role to the expected standard, due to a lack of capability and a lack of accountability to investors.

A well functioning financial sector needs to provide the necessary protections to investors while at the same time ensuring that businesses are able to access capital as easily as possible. Trustees and statutory supervisors have a key role to play in ensuring that the interests of investors are protected, and, in doing so, contributing to confidence in the market. For this reason I asked officials to break out development of a trustee supervisory model from the wider review of the Securities Act and put it on a faster track. The result is that this bill will establish a licensing regime covering trustees of issuers of debt securities, statutory supervisors of issuers of participatory securities, and trustees of unit trusts, as well as retirement village statutory supervisors.

The bill removes the automatic right of trustee corporations to act as trustees or statutory supervisors, and requires that all trustees be licensed by the Securities Commission. In deciding whether to grant a licence, the Securities Commission must have regard to a number of factors, including the applicant’s monitoring systems and processes, the experience and qualifications of the senior directors and managers, and the applicant’s financial strength. Licences may last for up to 5 years and may be subject to conditions imposed by the commission. Trustees and statutory supervisors will also be subject to stringent monitoring requirements, including 6-monthly reports confirming their ongoing compliance with their licence and any conditions imposed upon it. In addition, trustees and statutory supervisors will be required to report to the Securities Commission any actual or potential breach of the terms of their licence, and any material change in their circumstances that may impact on their ability to continue to carry out their role. In doing so, trustees and statutory supervisors will also be required to provide the commission with an action plan stating what steps they will take to address the breach of the licensing criteria or material change in their circumstances.

If the commission is not satisfied with the steps that the trustee or statutory supervisor proposes, it may direct the trustee to take a particular action or vary the terms of the trustee’s licence. In the most serious cases the commission may revoke the trustee or statutory supervisor’s right to act in respect of particular appointments, or cancel the licence altogether. There are also stringent penalties in the bill for trustees or statutory supervisors that fail to comply with their obligations, including fines of up to $200,000, and orders that will require the trustees to compensate investors for loss that arises out of their failure to comply with their obligations.

However, the bill goes beyond simply ensuring that trustees and statutory supervisors are competent to carry out their role. Part 3 also gives the Securities Commission the power to oversee how they act on behalf of investors in crisis situations. Trustees and statutory supervisors will be required to report to the Securities Commission if any issuer they supervise is likely to breach the terms of the offer or the trust deed, is insolvent, or is likely to become insolvent. At the same time, trustees and statutory supervisors will be required to outline to the commission the steps they intend to take in response. The commission will also have the power to require trustees or statutory supervisors to attest as to whether the issuer is complying with its obligations. The bill provides the Securities Commission with powers to intervene directly in circumstances where there is a significant risk that investors’ interests will be materially prejudiced and the trustee or statutory supervisor has failed to take the necessary steps. In these situations the commission may either direct the trustee to take a particular action, or apply to court directly for an order to protect investors’ interests. Amongst other things, these court orders may amend the terms of the trust deed, impose restrictions on the activities of the issuer, or require the appointment of a receiver or manager of the property that constitutes the security.

The bill also applies the licensing regime to retirement village statutory supervisors. The role of retirement village statutory supervisors in monitoring the financial position of a village involves a broadly similar range of skills as a trustee or statutory supervisor of an issuer. In addition, many of the concerns raised about the performance of some trustees and statutory supervisors have also been raised in respect of some retirement village statutory supervisors. These concerns include not working through the problems of financial inadequacy on the part of the village in an appropriate way with the operator, and in some cases a lack of proven analysis by some statutory supervisors of village operators’ financial reports. However, Part 3 does not apply to retirement village statutory supervisors as it is not intended to give the Securities Commission a role in overseeing the broader retirement village sector. Under the bill, the commission’s role in respect of the retirement village sector is solely confined to ensuring that retirement village statutory supervisors have the capability to carry out their role to the required standard.

Finally, I note that the bill does not currently cover trustees of superannuation and KiwiSaver schemes. Although there are some differences in the role of superannuation and KiwiSaver trustees and other trustees and statutory supervisors, in light of recent events there is a legitimate question as to whether some or all superannuation and KiwiSaver trustees should be included within the licensing regime established by the bill. I am inviting the select committee to consider that issue in the course of its deliberations. I commend the bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East) : Labour will support the first reading of this bill and its referral to the Commerce Committee, but that is as far as I can commit our support. It is interesting that, with the benefit of hindsight and some distance from the pressure of ministerial deadlines, I find it hard to recall why we need to have trustees performing what is now clearly defined in this bill as the role of the middleman. I think there are way more important issues in terms of securities law that we have to be getting on with, but that is not a top priority for the Government.

I am extremely disappointed to find out that we have an early report back foisted on us by decree in the House. I am the chair of the Commerce Committee, and even I was not told that there is a report-back date expected for this bill—one of the most significant bills we have had to address as part of regulatory reform in this area—of 30 June. I do not know whether my deputy chair had been informed of that, but it would have been nice to receive a phone call, just to be informed that that was the Minister’s desire. I totally oppose that report-back date. This is a far more important issue than it would allow. It means that we can allow less than 6 weeks for the calling of submissions. We will have to hear the submissions very, very quickly, and then we will have to be in a position to report back to the House by 30 June. I do not think that is right or fair to the investors of New Zealand, who have felt utterly and completely hammered by the lack of regulation in this area. Regulating quickly does not actually assist them with the problem.

I remember asking the Securities Commission a question at a select committee hearing earlier this year about whether we needed trustees any more and whether the role of the trustee corporations was needed, having been exposed by the Companies Office at the select committee last year as having failed abysmally in their obligations to investors. I remember asking the commission why, if that was the role of the middleman that we now have, we did not just beef up the role of the Securities Commission. Of course, the Securities Commission were not in a position to respond to that. But they said that that was what happened in Australia in 1999. Australia did away with trustee corporations as middlemen, and the Australian Securities and Investments Commission has control of the supervision of the non-bank deposit-taking sector. So the finance companies are covered by the Australian Securities and Investments Commission and not by individual trustee corporations.

Maybe the events of the past 4 years demand something a little bit better of the Government and of this House than simply tightening the supervision of the supervisors, such as beefing up the role of the Securities Commission and exponentially increasing its powers. I favour that. I think our Securities Commission needs more teeth. I think that our Securities Commission needs more resources in order to take on the demands that it has in this very, very difficult market. The Government has already announced that it will look at the super-regulator that was proposed by the Capital Market Development Taskforce. Yet the golden opportunity to look at one aspect of the supervisory regime is being completely squandered by this bill—completely squandered. To then say that we have to report back to the House by 30 June is just adding insult to injury. It is absolutely unreasonable for this House to debate this issue under those kinds of pressures. It is far, far too important.

I ask members when this bill was tabled. I think it was tabled in Parliament on 15 December last year. We are already in March this year. If it was so important, and if the time frame was so tight, why did the Minister of Commerce not put it up the Order Paper earlier on in the year? We could have got on with it before now. I think that all of the people who will want to make submissions on this important bill will be appalled at the Government’s arrogance and its lack of respect for the people involved in the industry by its allowing such a short time for the bill to be considered by our select committee, and then ultimately reported back to the House. The early report back for the bill has already excited enormous unfavourable comment from the financial sector. My view is that we have to take the time to get the legislative framework right. It is far too important to allow for a once-over-lightly response, which is what this Government seems to find acceptable.

What has happened in New Zealand should be a warning to all of us. I admit that I was the Minister of Commerce at the time that the finance companies failed. But at the time they were failing, at the very beginning, I was already in the process of regulating the financial sector. The Review of Financial Products and Providers was already out for consultation before the first of three finance companies fell over in 2006. I announced the main decisions arising out the Review of Financial Products and Providers in June 2007, a matter of days before Bridgecorp fell over. Then it was like a set of dominoes or a house of cards; they all came tumbling down. It was not surprising, because it was not like a run on a bank; those people had their money invested in term deposits, and they sat there holding their breath, waiting for that term to expire. Then they pulled out their money. Reinvestment rates plummeted. That is why we had a crisis on our hands. Getting people to reinvest in that environment was something that a number of individuals tried to continue to do, even though they knew that their companies were on the brink of failure. That is criminal, and it is unacceptable. I said this last week in a speech I gave as I launched my member’s bill. I think we should be ashamed at the behaviour of some of the individuals out there who call themselves our top business leaders and who were prepared to allow people to invest their money, knowing full well that it would never see the light of day again.

As for the moratoria that were imposed on a number of unwitting individuals, how can members in this House seriously think that people who did not have enough financial acumen to make the right decision for the original investment were going to make the right decision on moratoria? We have seen the results of that. I remember when the Securities Commission came to the select committee and we asked it about the moratoria. It said that people were in a state of shock, that they could not allow for the totality of loss to crystallise by agreeing to a receivership, and that is why they agreed to moratoria. I say to the Government that that is not good enough. We should be working together collaboratively to regulate this sector appropriately.

Last year we received a report from the office of the Registrar of Financial Service Providers and Financial Advisers, and he made it very clear what the problem was. He said that there was a lack of capability and capacity. He talked about weak trustees; he talked about a lack of role clarity; he talked about the potential for a lack of independence from the issuer; and he talked about weak accountability. That is not good enough. It is an indictment on people whom ordinary investors were entitled to rely on, but could not rely on. Making the supervisors subject to a tighter supervisory regime of their own does not fix the underlying problem.

This bill had no regulatory impact statement published with it, so I went away and printed it off, and I think it is utterly inadequate. I think that is why the Government does not want to print its regulatory impact statements in the explanatory notes of bills tabled in the House any more. There are only three options in it: the 2007 proposals, the central regulator, and this one. The central regulator gets the benefit of three paragraphs. Australia has a central regulator. I want to ask the Government to seriously think about that. Let us look at Australia, and let us look at the Financial Services Authority in the UK, which sets 11 “Principles for Business”. I know that I will run out of time to list all of the principles for business, but, essentially, a firm must conduct its business with integrity; a firm must conduct its business with due skill, care, and diligence; and a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk-management systems. Yes, there are rules that sit underneath the 11 principles, and that is what this Parliament needs to give the people of New Zealand.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : I rise to support the first reading of the Securities Trustees and Statutory Supervisors Bill 2010. I rise to support the Minister of Commerce for introducing this legislation to the House. It is important legislation, as the previous speaker, Lianne Dalziel, alluded to. It is important legislation, because the changes in it are part of the Government’s comprehensive reform agenda in the financial arena. It is part of its comprehensive reform agenda, which looks at the work of financial advisers, at moratoria regulation, and at auditors. It is the Government’s action plan responding directly to the Capital Market Development Taskforce report.

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

PESETA SAM LOTU-IIGA: As I stated before the break, I support the Securities Trustees and Statutory Supervisors Bill. It requires corporate trustees and statutory supervisors that supervise certain financial investments to be licensed. It allows the Securities Commission to oversee how trustees and statutory supervisors act in situations where investors’ interests may be at risk. This is particularly pertinent, given the number of financial company collapses we have seen in the last few years.

What does the bill do? Primarily, it does three things. First, it will require trustees and statutory supervisors to be capable; secondly, it will require them to perform their functions effectively; and, thirdly, and last but not least, it enables the Securities Commission, as the regulatory body, to hold them accountable for any failure to act according to the expected standards.

The new regime applies to trustees of debt securities, unit trustees, and statutory supervisors of certain collective investment schemes and retirement villages. The reason retirement villages are included in this regime is the recognition that they play a similar role to the trustees of other investment products in monitoring the financial position of retirement villages. The new licensing regime will help to ensure that trustees and statutory supervisors are competent, and the regime will fundamentally improve trustees’ performance. The Securities Commission, of course, will administer the new regime and grant licences to applicants, and it will also receive mandatory reports from these licensed trustees and statutory supervisors.

The commission, under this new Act, will have more powers to require information from trustees and to direct them to act in special or emergency situations. The commission will be able to seek pecuniary penalties and compensation orders where the trustees and statutory supervisors have breached their obligations under this statute. The bill also creates an offence of failing to comply with the commission’s directions, so that there is some enforcement power when trustees fail to act. This includes maximum pecuniary penalties of between $100,000 and $200,000. It is an offence for a person to act as a trustee, statutory supervisor, or unit trustee without an appropriate licence and for a person to represent that he or she holds a licence that covers a security without holding such a licence. The penalties for such an offence will be a pecuniary amount not exceeding $300,000.

The bill sets out what the Securities Commission has to take into account in deciding whether to issue or vary a licence under the regime. Firstly, some of the factors include—and the Minister has already raised some of these—the experience, skills, and qualifications of the applicant. In particular, the commission will be looking at the skills of the directors and senior managers of a trustee organisation. Secondly, it will take into account the financial resources available to the applicant, as well as other resources, which may be non-financial, that are available to that applicant. That is particularly important in order to see the type of credibility, the type of support, and the type of resources that will support the trustee organisation during its operation.

The commission’s new power to oversee how trustees and statutory supervisors act in certain situations is one of the fundamental changes in this bill. The fact that the bill gives the commission the power to monitor the actions of trustees should provide an added level of protection for investors. This is one of the fundamental changes. It is particularly important because it should allow the commission to direct trustees or directly intervene if trustees are not taking adequate steps or urgent action as is required. Those are the basic tenets of the bill. I support the bill and look forward to the select committee where we will be discussing its particular provisions. Thank you.

Hon DAVID PARKER (Labour) : I rise to speak on the Securities Trustees and Statutory Supervisors Bill. As has been said previously on Labour’s behalf, we support this bill, as far as it goes. It makes some minor improvements to the current regime, but we are critical of the lack of direction overall in fixing a more serious problem.

I think we should reflect on what went wrong and on some of the problems that were not picked up by the system prior to the international financial crisis, which affected New Zealand as well as most other Western countries and has had knock-on effects elsewhere in the world. An economist, Hyman Minsky, who died about 10 years ago in the United States, said that the principles of financial regulation around the world were fundamentally wrong. He said they were based on a premise that financial institutions are inherently self-correcting and stable, and that if one of them makes a mistake, it gets cleaned out, someone else in the system picks up its share of the market, and everything self-corrects. He pointed out that that was a fallacy in respect of financial institutions, as we have seen in recent years. Some financial institutions are so large—and, collectively, the importance of financial institutions is so fundamental to the operating of a modern economy—that if the financial sector seizes up or stops functioning properly, then trade can cease, and the effects on businesses and the people they employ can be very dire indeed.

Hyman Minsky’s theory was that the longer the period of economic prosperity, the more risk taking we see on the part of financial intermediaries. The longer the banks, the finance companies, and the trustee companies have a period of financial stability, the more they are inclined to embark upon risky behaviour, because they have forgotten about the last time they were cleaned out and they seem to be making hay by making more and more risky investments in the meantime.

He said a couple of things as a consequence of that theory. He said economies need lots of financial institutions, rather than dependence on a few. That is a very pressing problem in New Zealand, given our disproportionate reliance on five large banks, compared with most economies, and the disappearance of many parts of our secondary finance sector in the form of finance companies and some unit trusts. Minsky said that, firstly, we need to take care in an economy to have a large number of financial institutions, rather than too much reliance on the few, because if the few then stop operating, we create risks. He then went further and said that whatever the number of financial institutions, the financial regulator has to keep ahead of them. The longer the period of financial stability, the more risky their behaviour is, and the more often they move to make money in balance sheet transactions in a way that is not caught by the regulator.

The theories of Hyman Minsky have attracted a resurgence of interest amongst reputable economists and regulators around the world following the financial crisis because, of course, his predictions have proven to be true. We had a long period of prosperity in the world. We had what some people have called irrational exuberance in property markets. Banks and merchant banks were seemingly making ever larger amounts of money. We now know that the reality is that they actually did so through transactions that were imprudent, to say the least. In respect of some of them, they were close to dishonest, and still others were seen to be completely dishonest once they were unpicked.

In respect of the New Zealand situation, finance companies generally operate under prospectuses that are issued under the Securities Act. It is a requirement of the Securities Act that the prospectus name a supervisor of the investment, which is generally a trustee company. Those trustee companies have a supervisory role. They are meant to ensure compliance by the finance company, the unit trust, or the group investment fund with the terms of the trust deed, and to generally oversee matters on behalf of the investors. They are paid a fee for that role, which is how they make their money. It is pretty clear that there has been some failure in that system. I would say that there has also been a wider failure, which is the wider failure on the part of the regulators to keep ahead of poor practice amongst financial intermediaries, whether those financial intermediaries are banks, finance companies, unit trusts, or group investment funds. Over the last few years we have seen poor practice by all of those groups.

The New Zealand banks would say—and it is true—that in the global context they are quite strong, backed, as they are, by their strong Australian parents. None the less, the banks were partly responsible for the problem, because they lent on ever higher security margins and fed the consumption boom as much as—in fact, more than—any other part of the financial sector. The banks fed more money into the beast. That, in turn, pushed the finance companies into riskier lending propositions, because their part of the market was being gobbled up by the banks, which had themselves moved into a riskier part of the market. So the finance companies and some of the unit trusts moved into riskier investments than they had previously been making.

All of those things, I think, point to some form of regulatory failure in the system. It is not all the fault of the banks, the unit trusts, the group investment funds, and the finance companies, although obviously if they are making the investment decisions, they must bear first and most of the responsibility for the things that went wrong. But the regulators should have been ahead of them. The regulators should have been listening to the likes of Hyman Minsky, and other people of his ilk, who were warning of the tendencies that had been apparent for some time. The regulators are very good at coming along later and saying that someone was wrong, but with due respect to the regulators, I think that they did not perform adequately in terms of seeing some of those problems earlier.

In the finance company area I, personally, am critical of some of the trustee companies and some of the other regulators, including some of the regulators that advise the Government, in terms of their failure to crack down on related party transactions. I think that the greatest shame of these finance companies was where they were lending to their own directors, to family members of those directors, or to family trusts that were related to the directors. Plenty of instances are now coming to light where there was lending to related parties. Appropriate securities have not been taken. Personal covenants have not been taken from trustees, even though the lending has enriched the assets of those trusts. There have been plenty of other instances where the funds that were invested in finance companies by ordinary New Zealand investors have ended up in the pockets of directors or related parties of those directors without much apparent recourse under the securities that ought to have been taken at the time. There has been failure by trustee companies.

One area where the Labour Party is critical of this bill is that although it goes some way to impose some greater duties, it does not move to the model that is applied in both the United Kingdom and Australia, where they have a central regulator that has more powers than the New Zealand Securities Commission. They effectively take some of those roles that have sat with trustee companies, rather ineffectually at times, and say that those roles should pass to a central regulator. That is similar to what was recommended by the Capital Market Development Taskforce, which reported to the Government not long ago. Although this bill is not offensive, it does not make the big change that is necessary, which is to create a beefed-up regulator that could more properly make sure that the sorts of bad events that have occurred in the past are less likely to happen in the future. They can never be eliminated completely, because we cannot remove investment risk. But we could do better on this issue than we have done in New Zealand in recent years, and this bill does not seem to fix the fundamental problem. Thank you.

KEVIN HAGUE (Green) : I rise to take probably a short call on the Securities Trustees and Statutory Supervisors Bill, on behalf of my colleague David Clendon, who I know is looking forward to speaking on this matter. The Green Party has taken quite an assertive stance in this House on the issues that have arisen relating to the serial collapse of many of our financial institutions during the course of the recession, and on some of the practices that came to light, and weaknesses that came to light, as a result of scrutiny of those occurrences. I think it is probably fair to say that what I have to say tonight dovetails very well with what we have just heard from the Hon David Parker.

The recession saw financial institutions collapsing like dominoes through New Zealand, starving good businesses of capital, and, for many investors, wreaking havoc with their savings, including the life savings of many New Zealanders. It is conservatively estimated that several billion dollars of wealth was simply wiped from the collective balance sheets of New Zealanders. The problem is that in the good times, the mark-to-market process serves to imbue the balance sheets of all with a rosy glow. That results in less scrutiny, greater risk-taking—as the Hon David Parker has just been discussing—and, effectively, the creation of wealth out of nothing. That then sets up positive feedback loops that seem to inflate the apparent value of those assets still further, which then creates greater risk-taking, and the whole thing spirals out of control until it does not any more—it collapses. I am constantly reminded of the treatment of Iceland by the International Monetary Fund, which, less than a year before the total collapse of Iceland’s economy, was lauding Iceland as one of the greatest success stories in the world economy.

Since everything has gone south, there has been much greater scrutiny of these investment vehicles and of the things that went wrong. Some of the things that went wrong have already been discussed in the House, but here is my little list. One of the things we discovered was that many of the schemes being operated were no more than Ponzi schemes. We discovered many, many shonky practices, such as when a debt was going bad and was not being repaid. Rather than having that bad debt appearing on the balance sheet, it was simply being rolled into a new debt, which made the balance sheet look better. We also saw the practice of companies with bad debts, which would otherwise have appeared on their books, immediately prior to balance date selling off those debts to other entities, many of which were related parties. I agree with David Parker’s assessment that that was certainly one of the most shameful practices we saw from these companies. Only 2 days after the balance date, those same assets were sold back to the original entity. There were many other practices such as those.

We saw a whole series of practices that made the inquiry into financial institutions something the Green Party wholeheartedly supported. We saw a cynical use of moratoria, which may be something that my colleague John Boscawen wants to talk about in his contribution, because it is one of the things that he has very valiantly and admirably, in my view, pursued in this House and in the select committee. We saw what I would call “active deceit”, inappropriate disclosure, and inappropriate marketing. I have reminded the House previously of the report of the Morningstar Group, which found that New Zealand ranked absolute bottom of all the countries it assessed for investor friendliness. The reason we were ranked bottom was our inappropriate and inadequate disclosure and regulatory regimes. Most important in relation to this bill, we saw inadequate scrutiny by those trusted with that task. I use that word “trust”, because the business of trustee companies and official trustees is not simply a role; it is a duty that has a fundamental contract with investors. Investors have a right to trust that trustees will actually look after their interests. In many cases, they did not. I lost count of the number of financial companies that collapsed through that time. I think I lost count when it hit about 50. Again, John Boscawen may have an up-to-date number.

We then come to what progress the Government has made in dealing with all the inadequacies that became manifest. There are Leonard Cohen lyrics that go:

Sail on, sail on

O mighty Ship of State!

which refers to the terrible momentum of the State. We saw a little bit of that when measures that were proposed before the recession still came into this House. The Green Party was highly critical of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill, because in the face of this absolutely apparent inadequacy of the disclosure regime, the Government moved to relax the disclosure requirements, and we opposed that. But since that time, the Government has unveiled an agenda of measures to deal with some of the inadequacies of the disclosure and regulatory regimes. The Green Party has been pleased to support those measures. We have been pleased to support, for example, the inquiry into the collapse of finance companies. I know the issue of Lianne Dalziel’s member’s bill has come up in the House tonight, and I pledge the support of our party to that member’s bill. It will short-circuit the attempts to rob investors in the ANZ and ING frozen funds of their legitimate and moral legal remedies. That is disgraceful behaviour on the part of those companies, and I applaud Lianne Dalziel’s attempts to block off the sneaky escape route that they intend to pursue.

In relation to this bill, we will be voting for it at the first reading. We note the concerns Labour has raised about it, and to those concerns I add our caution that we wish to check with some of the smaller institutions like credit unions and similar institutions that this bill will not have unintended consequences for those institutions that, in general, do a fantastic job for New Zealanders. But with that proviso, we look forward to the scrutiny of the bill at the select committee and we look forward to the greater protection for New Zealand investors that they so richly deserve.

JOHN BOSCAWEN (ACT) : It is a pleasure to rise and speak in support of the Securities Trustees and Statutory Supervisors Bill. ACT will be supporting this bill. Like many in this House, ACT is very concerned about the massive losses that have been caused through the collapse of about 40 finance companies. About $4 million to $5 million is currently either lost or tied up in moratoriums. Those losses have had a huge impact on the lives of many New Zealanders.

I want to make some brief comments on the Hon Lianne Dalziel’s contribution this evening. But before I do, I would like to congratulate her on the launch of her member’s bill last Friday, which Kevin Hague just referred to. I had the pleasure of attending, with Lianne, a meeting of the Hawke’s Bay Frozen Funds Group, where her bill was launched—I understand with the full support of the Māori Party and Green Party. I was able to tell the assembled group that I would certainly be supporting the bill at its first reading. If two of my remaining four colleagues also did that, the bill would at least reach the Commerce Committee.

Lianne Dalziel expressed her opposition to the proposed report-back date of 30 June. Like Lianne Dalziel, I was surprised and, in fact, shocked to find out that, on a bill as important and complex as this one, the select committee would be required to hear submissions, debate the bill, and report back to the House in just over 3 months. I am pleased to say that I understand that the Government is now prepared to allow the committee a full 6-month period on this bill.

I was also interested in Lianne Dalziel’s comments about the beefing up of the Securities Commission and the greater role played in Australia by the Australian Securities and Investments Commission, the Australian regulator. I thought it particularly ironic that Lianne Dalziel referred to the fact that legislation was introduced into the House only 3 days before Bridgecorp collapsed. The irony of that is that the Australian Securities and Investments Commission prohibited Bridgecorp from raising money in Australia. If our own Securities Commission, which at that time was under Lianne Dalziel’s stewardship—it was her responsibility, as Minister of Commerce—had shown as much interest and as much teeth as the Australian Securities and Investments Commission did, it is quite likely that the large sums of money lost in Bridgecorp would not have been lost, or, certainly, the losses would not have been as significant as they were.

This bill establishes a licensing regime for trustees and statutory managers. The role of a trustee is to monitor the issuers of securities. Of course, issuers of securities are finance companies. Finance companies raise money from the public, issue bonds, and take security over the properties, or assets, of the people to whom they lend money. So the role of the trustee is to monitor the activities of a finance company and to ensure that that finance company reports accurately to its bondholders, to the people who have leant money to that finance company so that that company can in turn lend money to the people who would like to borrow from it.

Most New Zealanders would understand the concept of a first mortgage, a second mortgage, or a third mortgage. Typically, when we look to buy our first home, or any home, we go to a bank for a first mortgage—to lend us some money to help us purchase the home. When we come to sell that home, the first mortgagee—the bank—is the first party that has to be paid off. Sometimes, a first mortgage is not sufficient to enable the purchase of a house, and some people need a second mortgage. In that instance, if the house is sold, the first party to get the proceeds from the sale is the first mortgagee, followed by the second mortgagee. In some rare cases, a person may even go as far as borrowing a third mortgage, and therefore will owe three people money.

I would like to bring to the House’s attention one particular finance company that raised money on second mortgages. At least some of those second mortgages were structured so that they were in two parts. If you like, they had a top part and a bottom part. Although it was called a second mortgage, the terms of that second mortgage were such that when the asset was sold and the funds were paid back, the people who lent on the top part of that second mortgage were paid in full before the people who lent money on the bottom half of the second mortgage. The effect of that transaction was that the people who were secured through the bottom half of the second mortgage were effectively lending money on a third mortgage.

Let me give members an example. Imagine someone borrowing $100 million. That person borrows $30 million on the first mortgage, and borrows $70 million on the second mortgage. Ordinarily, if it was a standard second mortgage, when it came time to sell that asset, the first mortgagee would be paid off in full and would get the full $30 million, and the second mortgagee would get the next $70 million. However, if there was a shortfall, if the company could raise only $35 million, the $35 million would be spread equally, at 50c in the dollar, to all the people who had lent part of that second mortgage. Imagine if, instead of it being a standard second mortgage, it was arranged in such a way that it was in two parts: the top part had priority for $30 million, and the bottom part had priority for $40 million. So when it came to sell that asset—let us say it sold for $65 million—the first mortgagee would get $30 million, the people who had the top half of the second mortgage would get paid in full—the next $30 million—and the people who remained at the bottom would get the last $5 million. Even though they were owed $40 million, they would get $5 million. That may seem a rather academic example, but the tragedy is that that is substantially what happened in the case of a loan from Strategic Finance to the Hilton Denarau project.

I tabled a letter in the House last week in which I acknowledged to the Minister of Justice that I knew Mr Neville Mahon—I had known him for many years—who had borrowed money under those terms. But the tragedy of this situation, the thing that concerns me, is that when Strategic Finance—a company that went into receivership just 10 days ago—prepared its 2008 accounts, rather than showing mortgages that were in substance first, second, and third mortgages, it showed only first mortgages and second mortgages. A year later, when Strategic Finance did its accounts to 30 June, they now showed, for the first time, what the company called a second mortgage with a subordinate position. It defined that as a second mortgage where the company participates with other lenders and investors but the company’s position is subordinated. So Strategic Finance lent money on a second mortgage, it got part of that money from people who were outside the normal bondholders of Strategic Finance, and those people took precedence.

In my view, the accounts that were presented by Strategic Finance for 30 June 2008 were misleading at the time. I believe that the people who voted on the moratorium may well have been misled. That situation was not corrected until the 30 June 2009 accounts were prepared and Strategic Finance went back and told people the true facts retrospectively—15 months after the end of that financial year and after the vote on the moratorium. I wrote to the Minister of Justice, Mr Simon Power, on 14 December—although the letter was dated 14 December in error—and asked Mr Power to appoint a statutory manager. I asked the Government to take control of this company. I asked the company to make its transactions transparent. I was concerned about conflicts of interest. I received a letter from Mr Power on 21 January. He said that he had referred the case to the Securities Commission. I have confirmed with Mr Power this evening that we are yet to hear from the Securities Commission.

It is all very well to extend powers to the Securities Commission, but not if those powers are not enforced. What is the role of the Securities Commission if it is not to tell the investors of Strategic Finance that their $68 million in mortgages, which the company has characterised as second mortgages, are, in substance, third-ranking securities? They may well be second mortgages in style, but the truth is that, in the case of Mr Mahon, he and his fellow bondholders will not get their money until the first mortgagee is paid $30 million and the top half of the second mortgage is paid approximately $30 million. They get the rest. I think that is a disgrace, and I think it is time for the Securities Commission to act. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Assistant Speaker. Kia ora tātau katoa e hui nei i roto i tō tātau Whare, te Whare Pāremata o te motu i tēnei pō. Ko tāku i te tuatahi ko te whaiwhai haere i ngā kōrero, me kī, o te kaiārahi-tahi o te Pāti Māori i te rangi nei, kei a ia e poroporoaki ana i a Kahurangi Raihā Māhuta. I a tātau e kōrero ana mō tēnei mea mō te kaitiaki, ko ia tērā, te tauira o te kaitiaki. Nā, ko tāna mahi ko te tiaki i te pūtea, me kī ko te ārahi i te iwi o Tainui, ka mutu, ko ia tērā i eke ki tērā o ngā momo taumata. Nō reira hei whaiwhai haere i te kōrero a te Hōnore Tariana Turia, he tuku poroporoaki ki a ia. Ko ia tērā e takoto mai rā i runga i tērā o ngā marae o roto o Tainui waka, ki Waahi, ā, ka mutu, ā kō ake nei ka heria atu ai ki tōna ūkaipō i roto o Te Tai Tokerau. Nō reira e kui, takoto mai. Takoto mai i runga i ngā ringaringa o te wāhi ngaro. Me te mōhio anō hoki, ā kō ake nei ka tae atu koe ki tō hoa rangatira ki a Te Kotahi. Koutou ki a koutou, e te hunga ora, tēnā koutou, tēnā koutou, kia ora tātau katoa.

Ehara i te mea ko au te tohunga mō tēnei mea mō te pūtea. Heoi anō, ko au tētahi e mōhio ana ki tāku e kite nei, ki tāku e rongo nei. I roto i te komiti whāiti o te Commerce i te tau kua hipa, i ngā marama tata kua hipa ake, ko tāku i kite nei, ko te karu i kite nei, ko te mamae o te hunga ka tae ake ki roto i tērā komiti ki reira whakatakoto mai ai i te mamae o te ngākau mō ngā mahi nanakia a ētahi, arā, ko te hunga kei roto, me kī, e pāngia ana e tēnei o ngā pire. I kite au i te hunga kuia, koroua, pakeke, i tae ake ki te komiti me tā rātau riri, pōuri, tangi mō ngā mahi nanakia a ētahi. Koinei tāku e mōhio nei, tāku e kite nei ki mua i a au. Ka mutu, tērā kōrero tērā.

Ka hoki anō rā ki tētahi kuia i roto i a au, o roto o Te Waiariki. Ko tōna ingoa ko Īria Whiu. Ko ia tērā kei roto i tētahi rōpū. Ko te ingoa o te rōpū nei, ko Exposing Unacceptable Financial Activities. Koinei te ingoa o te rōpū. I puta tēnei rōpū i muri mai i te hinganga o Blue Chip, i tērā tau. Ka mutu ko tā rātau, ko te kimikimi haere i te hunga i rongo nei i te ngau o ēnei rōpū nanakia, ka mutu, ko ngā mea rāwekeweke i te pūtea. I pēnei rawa te kōrero i roto i te ao Pākehā, he financial advisors. Ko te aronganui o tēnei rōpū, he whaiwhai haere i te hunga e mahi nanakia ki ētahi, kia rongo rātau i te mamae nā runga i ngā mahi nanakia e kōrerohia ake nei. Nā, ko tā rātau, ko te kimi haere i taua hunga rā i te mea, te āhua nei kua whakakao mai rātau ki roto i tētahi rōpū nā runga i te mea, karekau tētahi i tua atu ki te āwhina i a rātau. Me noho pokohiwi ki te pokohiwi kia taea e rātau te kōrero i ngā take e pā atu ki a rātau, ka mutu, ki te kimi āwhina mēnā e taea ana. Nō reira, ā, kāti, ko tā rātau kaupapa e hāngai tonu ana ki tēnei momo hunga me te Kāwanatanga, arā, mō tō rātau ngoikore ki te tiaki i ngā kaihoko, te whakatikatika i te hunga kaitohutohu.

Ko tāku i tēnei wā ko te whakanui i tērā rōpū me tā rātau ngākaunui ki tērā hunga. He hunga i kaha nei ki te āwhina i te hunga e rongo nei i te mamae engari, ko te mea nui, ko te mea arohanui nei. E kore rātau e kite i te pūtea i whakapauhia e ētahi atu. Ahakoa pēhea, e kore tērā pūtea e hoki mai ki a rātau. Ko tāku, ko te whakanui i ā rātau mahi nā rātau tonu ngā take nei o ētahi o Aotearoa i whakairi ki te motu, ko ngā mahi taurekareka nei a ētahi o te hunga kaitohutohu. Te āhua nei kua whai take tā rātau akiaki i te take nei i te mea, ki te tiaki i ngā rawa o te hunga hoko kia whakanui i te whakapono o te tangata ki ngā mākete ā-pūtea nei.

Ko te aronga o tēnei pire, he whakarite i ētahi tikanga ā-noho mō te hunga e hiahia ana kia tū hei kaitiaki, hei kaitohutohu rānei kia noho matatau. Ko tā rātau, ko te kī atu me noho matatau tēnei hunga kia matatau ki te whakahaere i ngā mea kia eke ki te taumata, ka mutu, ko te kimi i te hunga matatau. Mēnā kāore rātau i te matatau, panaia atu. Koinei te tikanga o tēnei o ngā pire. Mēnā kāore rātau e eke ki te taumata, tukuna kia haere i te mea, ko te tino aronga kia whai mātauranga, kia whai māramatanga, kia whai mōhiotanga te hunga ka noho nei hei kaitiaki. Ko tēnei pire he mea whaiwhai haere i ngā ture kua tautokongia e te Pāti Māori i ngā tau kua hipa. Āhua ōrite ana tōna aronga, arā, kia whakapiki ake, kia whakakake ake i ngā taumata, kia whakakaha ake i ngā pūkenga, ngā pūmanawa, e taea ai me kī, te motu, te kī atu, e whakapono ana au ki ngā tāngata ka noho nei hei kaitohutohu, ka mutu, hei kaitiaki i roto i ngā mahi mākete ā-pūtea ake nei.

Kāore e kore ka puta mai ētahi atu take mēnā ka eke tēnei pire ki te komiti whāiti. Koinei te mea pai o te haerenga ki te komiti whāiti, ka tae mai a tini, a mano ki te kōrero i ā rātau take ki roto i tērā momo komiti. Ko te aronganui o te Pāti Māori, ko te titiro ki ngā pānga o tēnei pire ki ngā kaitiaki Māori, otirā, ki a Ngāi Māori whānui tonu. I puta tētahi kōrero i te Minita i mua tonu nei i te rā nei mō ngā tikanga arotake. Ko tā mātau, ko te kī atu, pēhea te āhuatanga o tēnei pire ki runga i te āhuatanga o ngā kaitiaki ō nāianei, Māori mai, Māori mai. He mea pai ki a mātau te titiro hōhonu nei te ako nei, mēnā āe rānei, ka whai tikanga tēnei mea e kī ana i te reo Pākehā, ko ngā competency issuesi roto i te pire nei. Ko te tikanga o tēnei pire, e hāngai tonu ana ki tērā āhuatanga. Āe rānei e taea ana e te tangata te mahi tāna mahi, kāore rānei. Nō reira he mea nui tērā.

Ko tētahi mea o roto i ngā kaitiaki Māori, ko te nuinga ka kī atu he iwi tūpato te iwi Māori. He iwi whakakeke, he iwi āhua mataku ki te puta i te taiapa, he iwi noho taiapa mēnā ka kōrero whenua ngā tāngata nei. Nō reira ko tā mātau, ko te kī atu, tērā pea e tika ana kia whakaara ake ēnei take ki mua i te aroaro o te komiti whāiti i te mea, ko te mea nui o roto i tēnei pire he āta titiro ki te hōhonutanga o ngā mea nei.

Engari nā runga i te mea ko te iwi Māori he kore hiahia ki te whakapau moni, ki te whiu moni mō te kore take noa iho, ka mutu, ko tā mātau kī, me titiro ki te āhuatanga o ngā kaitiaki Māori. Nō reira, ā, kāti, ko tā mātau ko te kī atu, ko tētahi mea i wareware i a au i te mea, ko te nuinga o ngā kaitiaki Māori nei he iwi mahi mō te kore moni, tērā pea, he uaua rawa ki te whakatinana i tēnei ture. Heoi anō, nā te āhuatanga o ngā kōrero ka puta, tērā pea ka kitea mai ai mēnā he pērā anō, he raru nui ka puta i reira. Nō reira, kāti ake kua rahi tēnei.

Ko tāku, ko te whakakōpani i taku kōrero me te kī atu, āe, ka tautoko te Pāti Māori i tēnei pānui tuatahi ki te komiti whāiti, kia taea ai e te Māori, ā-whānau, ā-hapū, ā-iwi, te āta rongo i ngā kōrero, ka mutu, te whakatakoto kōrero ki mua i te aroaro o te komiti whāiti. Kia ora.

[Thank you, Mr Assistant Speaker. Greetings to us all assembled here in our House tonight. Firstly, I want to follow on from the tributes made by the co-leader of the Māori Party today in respect of the death of Lady Raihā Māhuta. As we talk about trustees, matriarch Rai is an example of one. Her job was to take care of the finances and to lead the people of Tainui. In doing that, she met those kinds of standards expected of a trustee. Therefore, to follow up the tribute by the Hon Tariana Turia, I bid farewell to Lady Raihā Māhuta, who lies in state at Waahi, one of Tainui’s marae, and will shortly be taken to her land of birth in the far north. Lie there, beloved matriarch. Rest there in the arms of the haven of no end, in the knowledge that you will soon reach your beloved husband, Te Kotahi. You who have departed remain there with each other, and we the living remain here with each other; greetings, greetings, and greetings to us all.

I am not an expert in matters relating to finance, but I do know what I see and hear. In the Commerce Committee last year, just a few months ago, I witnessed with my own eyes the hurt in those who came before that committee to express their pain because of the nefarious actions of some that this bill intends to deal with. I saw at first hand the fury, disappointment, and grief of the elderly womenfolk and menfolk who came to the select committee, as they spoke out against the irresponsible action by some people. That is what I know about; that is what took place before me. That is that example.

I cast my mind back to another situation, relating to an elderly lady within my electorate of Te Waiariki, Her name is Īria Whiu. She is a member of an organisation called Exposing Unacceptable Financial Activities. Yes, that is what it was called. It was formed after Blue Chip collapsed last year. It seeks out those who have become victims of financial abuse, particularly by so-called financial advisers. Primarily, it seeks out those who have become victims of such nefarious actions as were referred to earlier, and have suffered as a consequence. It seems they come together as a collective because there is nothing out there to offer help. They have to work closely with each other, shoulder to shoulder, so that they can speak out on matters of concern that relate to them, and seek out assistance where possible, as well. Suffice to say, their philosophy relates directly to such an entity as the Government being inadequate at providing customer protection and making so-called advisers accountable for their actions.

At this time I want to acknowledge that group and the commitment of individuals who have continued to bring these issues to our attention, despite their own situations. These are people who had little hope of ever retrieving their funds. So I recognise their work, as well as the sacrifice of so many whose livelihoods have been threatened by shonky advice and disreputable advisers. It seems they have succeeded in their mission to protect the interests of investors and enhance investor confidence in financial markets.

This bill will require people who want to be a trustee, statutory supervisor, or unit trustee to be competent and effective in their function, and to be held accountable for failing to perform their functions effectively. This bill fits into a suite of legislation to which the Māori Party has previously given its support. Other legislation that we have supported has sought to improve standards, competency, and confidence in those with advisory and supervisory roles in financial markets.

Other issues are likely to arise if this bill reaches the select committee stage. The advantage of attending select committee hearings is that the public can come and speak on issues pertaining to them. In particular, we are interested in understanding how the bill will affect Māori trusts and Māori in general. The Minister talked earlier today about stringent monitoring requirements. Our interest is in knowing how this will impact on the continuing ability of Māori trustees today to carry out their role. We are also interested to learn more about the competency issues or the lack of sound knowledge in trust management that it appears this bill has emerged in response to. What is most important is whether a person can fulfil the role.

It is often said that Māori are risk-averse. Most Māori are often conservative when it concerns land. Perhaps it is appropriate that these issues emerge before the select committee, because it is important that the issues are examined closely. We urge that aspects of Māori trustees be looked into, so that they do not spend money needlessly.

One thing I forgot to say is that most Māori trustees work for nothing. Perhaps because of this it will prove difficult to implement this bill. Due to the nature of previous comments, if that continues to be the case, problems will arise.

In conclusion, the Māori Party supports this bill’s first reading and referral to select committee, so that families, subtribes, and tribes in Māoridom can listen to the talk around it and make submissions to the select committee. Thank you .]

MELISSA LEE (National) : It is a pleasure to speak in support of the Securities Trustees and Statutory Supervisors Bill, and I would like to congratulate the Minister of Commerce, the Hon Simon Power. As all sides of the House agree, this is an important bill, and I am glad that the Opposition supports it.

I start by making the observation that I find it quite ironic that the chairperson of the Commerce Committee, the Opposition member the Hon Lianne Dalziel, complained about the time it has taken for this bill to come to the House. I find it ironic in the sense that the previous Labour Government had been in power for 9 years when the finance company failures happened, and I believe it was she who was the Minister of Commerce at the time.

This bill is about accountability. It requires corporate trustees and certain statutory supervisors to be licensed, thereby improving the quality of corporate trustees’ supervision. The Securities Trustees and Statutory Supervisors Bill is intended to protect investors’ interests and enhance market confidence by enabling the Securities Commission to hold trustees and statutory supervisors accountable for failing to perform effectively. It will be an offence to act as a trustee or statutory supervisor without a licence. If I can use the words of my colleague John Boscawen, it is about beefing up the Securities Commission.

We need to build the trust in capital markets of mum and dad investors, as it has been severely dented by finance company failures and the global recession. This bill is an important part of achieving that. This bill is about making sure that people are competent for the job they are doing and are improving their performance, and it enables the Securities Commission to hold them accountable for any failure to act according to the expected standards. This new licensing regime will apply to trustees of debt securities, unit trustees, and statutory supervisors of certain collective investment schemes and retirement villages. The Securities Commission will administer the new regime, granting licensing applications and receiving mandatory reports from licensed trustees and statutory supervisors. The commission will have more power to require information from trustees and to direct them to act in emergency situations. Retirement village statutory supervisors have been included as recognition of the similar role they play to trustees of investment products in monitoring the financial position of retirement villages.

The bill improves the accountability of trustees and statutory supervisors, and the commission will be able to seek pecuniary penalties and compensation orders on behalf of investors against trustees and statutory supervisors who have breached their obligations. This bill also makes it an offence for failing to comply with the commission’s directions, which include providing information about the trustee, statutory supervisor, or issuer. Maximum penalties will range from $100,000 to $200,000. It will be an offence for a person to act as a trustee, statutory supervisor, or unit trustee without an appropriate licence, and he or she is liable to pay a fine of up to $300,000.

The bill makes detailed provisions for licence holders to report at regular intervals to the commission—that is, between 6 and 12 months from when the licence is issued and once every 6 months thereafter. This monitoring system will be put in place to protect the interests of investors and make sure they have confidence in our financial markets. To me, that is fantastic news, especially given the financial climate that has been before us.

These changes are part of the Government’s comprehensive reform agenda in the financial arena, which also includes work around financial advisors, moratoria, regulation, auditors, and the Government’s action plan for responding to the report of the Capital Market Development Taskforce. Many in the Korean community lost a lot of money during the financial crisis and the finance company failures, and I am sure they will feel a sense of relief that this National-led Government is doing something about it. This is a great bill and it is an important bill. I commend it to the House.

CLARE CURRAN (Labour—Dunedin South) : Labour will be supporting the Securities Trustees and Statutory Supervisors Bill, because it makes sense. Effectively, this bill is about trying to make sure that the interests of investors are protected, and that investors are made more confident in financial markets by ensuring that trustees, statutory supervisors, and unit trustees are capable of performing their functions, are performing those functions effectively, and are accountable for any failure to perform them. So the bill is kind of simple, really, and it is to be applauded. Introduced at the end of 2009, this bill is a continuation of the great progress that Labour made in tidying up the financial services sector, including the review of financial products and providers. As a member of the Commerce Committee, I look forward to scrutinising this somewhat lengthy and technical bill in the select committee deliberation. But I want to put on record that the bill is important. It is certainly not all that is required, but I give a tick to the Government for introducing it.

It is hugely important to build investor confidence in this country, after a series of financial failures, the collapse of a number of finance companies, and the effects on the number of people who lost their hard-earned investments. This bill follows on from the conclusions of both an IMF and World Bank report in 2004, and the consultations undertaken by the Ministry of Economic Development in the review of financial products and providers in 2006, which found that New Zealand placed too much reliance on private supervisors such as corporate trustees, and that those supervisors and trustees often lacked accountability. So this bill removes the automatic right for the six statutorily appointed approved trustees to supervise issuers of debt and some investment schemes, and it introduces a licensing regime for trustees that will be run by the Securities Commission.

The bill makes it an offence to act as a trustee or statutory supervisor without a licence, so that a person who commits such an offence will be liable, on summary conviction, to a fine that does not exceed $300,000. A trustee, statutory supervisor, or unit trustee must hold a licence that covers the debt security, participatory security, or unit trust to which the appointment relates, and a licence holder must comply with every condition imposed on the licence. Licences will ensure that the trustee, statutory supervisor, or unit trustee is a body corporate, and that their directors and senior managers must be of good character. This bill contains a number of provisions designed to ensure that trustees, statutory supervisors, and unit trustees comply with their obligations, and the Securities Commission may seek pecuniary penalty and compensatory orders against those who fail to comply.

These clauses are designed to address the lack of capability and accountability of supervisors and trustees in the current system, as I have already said, and the fundamental role of trustees, statutory supervisors, or unit trustees is to ensure compliance with the terms of the trust deed or the offer of security. So when an issuer gets into difficulties, the trustee supervisor is supposed to take action, inform the investors, and engage expert assistance, or place the issuer into liquidation.

The finance company failures of 2006 to 2008 raised some important issues: firstly, the lack of capability or capacity, and the fact that trustees and supervisors have not been equipped to deal with the size and complexity of the securities they supervised. There have been the issues of weak trustees, of the role of trustees and supervisors not being defined properly, and of the potential for their lack of independence from the issuer—trustees and supervisors are funded by the entities they supervise. There has also been weak accountability: individual investors can take court action, but that is the only form of accountability. Concerns have been raised in respect of similar issues relating to the performance of some statutory advisers of retirement villages, as well.

To give some context to the situation that has resulted in this legislation, I will read extracts from a couple of articles that appeared in late 2008. The first is from the Sunday Star-Times. It is entitled “Business reality behind smooth assurances”, and it is written by Greg Ninness: “Trustee companies are fond of emphasising the trust part of their name more than the company part and this is reflected in the way they promote themselves. Words such as ‘integrity’ and ‘experience’ often feature prominently in their promotional material and they frequently promote themselves as a bulwark which can shelter a family from financial turmoil. But look beneath the veneer of prudently old-fashioned values and you will find a modern, commercially-oriented business. … A core part of the activities of most trustee companies is managing family trusts, usually for many years after the person who established it has died. Often this will involve investing the trust’s money to provide an income for its beneficiaries. Trustee companies could invest this money directly in property, or shares or any number of the managed funds which are available to the general public, and sometimes they do. But many trustee companies have also formed their own managed funds into which they can channel money they are investing on their clients’ behalf. Where this happens, the trustee company gets fees and its funds management arm generates also levies fees. The third leg of most trustee companies’ business is acting as a corporate trustee. The law requires certain types of investment vehicles, such as finance company debentures, unit trusts and organisations such as retirement villages, to have a trustee or statutory supervisor to protect investors’ interests. Although the trustee’s powers are limited in such situations, many people are questioning the value they provide to the investing public …”.

A brief excerpt from another article, also written in 2008, from the National Business Review in August, written by Sarah McDonald and Fiona Robertson, starts off by stating: “In 2004 National Business Review published a double-page spread titled ‘A matter of trust’, detailing major concerns held by many in the finance industry abut the effectiveness of trustees at protecting retail investors. The carnage that has ensued since then, with more than $5 billion either frozen or lost completely in failed finance company fund or mortgage trust investments, has done nothing to assuage those anxieties. And the consensus amongst finance and investment industry professionals that National Business Review spoke to is that trustees are underpaid, in some cases ineffectual, and in others plain incompetent.” The point I make is that this bill goes a long way to addressing this situation, but there is a lot more to be done.

In closing, I will mention the work that is currently being done by my colleague the Hon Lianne Dalziel, the previous Minister of Commerce. She has recently launched a member’s bill to better protect investors. The Illegal Contracts (Unlawful Limitations on Regulators’ Powers) Amendment Bill will ensure that investors will not miss out on the benefits coming from a regulator taking action against an investment company that has breached the rules. The issue was brought to her attention through the ING issues, when people were forced to sign away their rights to gain any benefit from someone else taking action against ING, including the regulator. Over half a billion dollars was stranded in the ING product funds, with a lot of that sum representing the life savings of elderly people, who continue to be angry and confused at the way they were treated. This bill makes a move to ensure that Kiwi investors get a fair deal, worthy of the consideration of Parliament, and I hope that members from all sides of the House will give it a fair hearing if it is drawn from the ballot.

I think that members have heard tonight from my colleague the Hon David Parker that there is also more to be done in beefing up the Securities Commission to better regulate the space and in not just relying on trustees. He also said that the Capital Market Development Taskforce reported and recommended on that, which mirrors similar things happening in the UK and Australia.

As I said earlier, Labour supports this bill. We do not think that it goes far enough, in that there is a lot more to be done, but we think that it is sensible, will protect investors, and will help to restore confidence in the financial sector.

JONATHAN YOUNG (National—New Plymouth) : I am pleased to speak on the Securities Trustees and Statutory Supervisors Bill, which, as we have heard tonight, is intended to protect investors’ interests and to enhance market confidence. At least 6 years ago we were warned by the International Monetary Fund and by the World Bank that there were some weaknesses in our system. As the previous speaker, Clare Curran, mentioned, the Ministry of Economic Development repeated those warnings and identified weaknesses in our regime. Those weaknesses, as set out in the explanatory note of the bill include: “a lack of capability or capacity: trustee, statutory supervisor, and unit trustee company resources and expertise have not always matched the size and complexity of the securities they supervise: —weak trust deeds: there are insufficient minimum protections for investors in some trust deeds: —a lack of role clarity: a lack of clear definition of trustees’, statutory supervisors’, and unit trustees’ role has resulted in inconsistencies”, and the list goes on.

We understand that we are coming through a time of recession and are still fighting our way back to strength in our economy, and that as a nation we are short of investment in capital markets. A tremendous amount of investment in the past has gone into the property market, which, though it generates income for property owners, does not build accumulating wealth that can go on to create jobs for the future. It does not build the real wealth that this nation needs. It is a debt-hungry sector that drives borrowing, mostly from overseas. But one substantial disincentive for people to shift from a borrowing-based way of thinking to an investment-based way of thinking is a lack of confidence in a system that fails to ensure professional, effective, ethical, and accountable oversight of that system. Earlier this year, on 9 February, the Prime Minister in his statement to Parliament stated: “The Government will be focusing this year on ways to promote investment in capital markets while also strengthening protection for investors. We want New Zealanders from all walks of life to be able to invest their savings in productive businesses, either directly or through funds, with more confidence in the regulation of those capital markets, and with the knowledge they need to make informed choices. That is important if New Zealanders are to diversify away from their heavy reliance on property investment.”

The Prime Minister also spoke of an opportunity for New Zealand. Referring to the report from the Capital Market Development Taskforce, he stated: “The Taskforce also concluded that there is an opportunity for New Zealand to become a hub for financial services in the Asia Pacific region, specialising in providing high-value middle and back office functions for the funds management industry. The Government is keen to see if this or similar new industries could be developed here and we have asked officials to determine what steps we would need to take to make that a reality.” When we shore up our regulations and build a robust, credible, effective, ethical, and accountable sector, this sector will not just protect New Zealanders and give them confidence to invest in those capital markets; it will be able to export itself.

We can take this one step further and look at the possibility of becoming such a financial service hub in the Asia-Pacific region. When it comes to investment, the most highly valued commodity is trust. A robust licensing regime will promote trust. Trust is based on the integrity of a system from the top down and from the bottom up. Tonight we have heard the word “guardianship”. It will require trust for New Zealanders to move from a borrowing-based thinking in terms of property to an investment-based thinking in terms of business and investment in infrastructure and the future of this country. In order to have trust, a strong system of guardianship is required. This bill proposes that.

I turn now to the provisions of this bill. The first thing the bill does is create accountability through a licensing process. The bill requires corporate trustees, statutory supervisors, and unit trustees to be licensed. It also requires the Securities Commission to oversee how trustees and statutory supervisors act in situations where investors’ interests may be at risk. Greater accountability will ensure that corporate trustees and statutory supervisors act in the best interests of investors. Licensing will require trustees and statutory supervisors to be capable—it sounds so basic, does it not? It will require them to perform their functions effectively. It will also enable the Securities Commission to hold them accountable for any failure to act according to the expected standards. The new licensing regime will help ensure that trustees and statutory supervisors are competent. This regime will fundamentally improve trustees’ performance around this country. This bill will lift the bar. For those who are already performing to a very high level of proficiency and standards, this bill will enhance their already professional manner. Those who are performing well below the bar will either lift their standards or be weeded out. This is how investor confidence will grow—by having a very high standard of capability and a very high standard of accountability, where substantial penalties await those who contravene such standards. The Securities Commission will administer the new regime, granting license applications and receiving mandatory reports from licensed trustees and statutory supervisors. The commission will have more powers to require information from trustees and to direct them to act in emergency situations.

The future is as bright as we want to make it. This Government is focused on building an economy that will deliver to New Zealanders real wealth that will improve our access to medical care, our access to high-quality and world-class education, and access to social services that support every New Zealander. I am very pleased to commend this bill to the House.

RAYMOND HUO (Labour) : The Securities Trustees and Statutory Supervisors Bill may sound very dry to many members of the general public. Helpfully, I will record a short conversation I had with my senior partner on a similar subject years ago when I was practising law in Auckland. He asked me to explain particular issues either by showing graphs or by telling stories. A story by the Sunday Star-Times newspaper of 28 November 2008 was right to the point: “Lending role questions for NZ Guardian Trust and Hanover Finance” was the headline. Guardian Trust provided mortgage funding that was part of a property development. Its main funder at that time was Bridgecorp. Guardian Trust then provided additional finance with a first mortgage, which meant that it ranked ahead of Bridgecorp’s loan in the event of a default. When Bridgecorp went—to use the language of the newspaper—“belly-up” last year, Hanover Finance stepped in and took over its mortgage on the development, making it the second mortgage on the land secured by Guardian Trust’s mortgage. This put Guardian Trust in an unusual position because it also acted as corporate trustee for Hanover Finance and had a supervisory role over that company’s affairs. The story went on to say that Hanover Finance was forced to exercise a mortgagee sale and Guardian Trust was forced to follow suit. Both companies were in default on their obligations to investors—both suspended repayments to their investors. Hanover Finance then tried to put together a restructuring plan, and the plan had to first be approved by Guardian Trust in its role as Hanover Finance’s corporate trustee. Guardian Trust insisted there was no conflict of interest in its roles as trustee and mortgagee, citing Chinese walls within the company. That is to say that the firm had developed or implemented polices and procedures to safeguard insider information and to ensure that no improper trading occurred.

There is no need for us to follow up the story, which is nearly 2 years old, but it is a story that explains well why the law is being changed. The regulatory impact statement states that Treasury supports the proposed legislation “except for the requirements for the trustees to report breaches in trust deeds … in real-time and for the Commission to have the power to direct trustees to take a particular course of action to remedy breaches”. It fears that the power to direct the trustees how to act will blur the clarity between trustees and the Securities Commission, and it says it does not fit well with the proposal to give the regulator the ability to take legal action against trustees, which would likely be exercised at the same time. The requirements for trustees to inform the regulator of breaches in real time could lead to significant compliance costs, which are likely to be borne by firms seeking to raise capital. The other aspect—or the elephant in the room—that this bill ignores, according to Chapman Tripp, is the dynamic created by the changing nature of the trustee and issuer relationship. The trustee, as front-line regulator, is in the unusual and potentially unhealthy position of having to negotiate its regulatory mandate and its remuneration with the very party it is charged with regulating—namely, the issuer.

Another article I wish to quote is from the website www.depositrates.co.nz, which was published on 4 March 2010: “Commerce Minister Simon Power included trustees in his review of the Securities Act after a report by Companies Registrar Neville Harris in March last year”—2009—“slammed finance companies for acting like ‘Ponzi schemes’ and raised concerns about trustee diligence and accountability.” Interestingly, that article attracted a comment that was posted the following day: “From the past experiences we have all just very recently witnessed would you really support Trustee companies continuing with any power what so ever to oversee finance/investment companies. Where have these Trustee companies been when the investors have needed them the most?????? Whilst the Securities commission have appeared to be near useless I feel they are the lessor incompetent of the two. Get real take note how the Australian Securities Commission work, they aren’t pen pushers with wet paper towels to beat you with!”. The name of the commentator is Craig; the family name is not available.

This bill, borrowing the words of Chapman Tripp again, reflects both regulation and deregulation at the same time. On the one hand, the trustees and supervisors will need to be licensed and to comply with ongoing requirements—namely, the regulation—but, on the other hand, the preferred position that existing trustees enjoy will be removed, opening the way for others to enter the market, or deregulation. According to McDouall Stuart’s New Zealand Finance Companies Report 2008 New Zealand’s financial system is worth $431 billion, of which registered banks are worth $345 billion, non-bank financial institutions $22 billion, savings institutions $4 billion, and managed funds $60 billion.

I am very pleased to rise to support this bill in its first reading because the bill purports to protect the interests of investors and to enhance investor confidence in the financial market through various measures. The law has to be changed because New Zealand places too much reliance on private supervisors and because, as evidenced by these real-time stories, they are not accountable enough. Other problems with our regime were raised by the string of finance company collapses, including the lack of independence and capability of some trustees. The previous Labour Government made great progress in tidying up the financial services sector, including the Review of Financial Products and Providers. I am very pleased to see that this bill, which is a continuation of those efforts, is now being progressed.

This is a complex, technical, and very important bill. We will be keenly involved in scrutinising it at the Commerce Committee. However, as madam chair, the Hon Lianne Dalziel, pointed out earlier in the House, the time frame and the way the bill has been presented may hamper submission efforts from stakeholders, professionals, and the general public, and the extent the bill is to be scrutinised. Thank you very much.

CHRIS TREMAIN (National—Napier) : Most Thursday nights, when we leave this Chamber and go back to our electorates, we go back to the real world. We go back to the world that is inhabited by all our constituents in the Napiers, the Kaikōuras, the Northcotes of this world, out to where the real people live. They work damn hard in this country, pay their taxes, seek to put a roof over their heads, and look to save money for their retirement so they can live a comfortable life, supplemented by their savings, through to their retirement. When we go back to our constituencies, we get back to the real world. We get back there on a Friday or a Monday, or in the weekends, and we deal with the real issues. We deal with immigration issues, or accident compensation issues, or Work and Income problems, or Child, Youth and Family issues, or local issues faced by people that are pertinent to each electorate. All of us will have empathy with them or be able to understand what is going on.

I am a relatively new member to Parliament but when I think back over the 4 years of going back to my constituency in Napier, and think about some of the issues that I have had to deal with in clinics, I tell members that probably the more difficult meetings—and I have had a number of them in my electorate office and out in people’s homes—have been around the financial collapse of companies in this country and the loss of savings that hard-working Kiwis have experienced. I tell members of one occasion when I had eight people come into my office—four hard-working couples—mums and dads in their mid-to-late 50s who had worked their guts out all their lives to save for their family homes, who had gone out and had their homes geared up, and basically lost their entire equity in their family homes. They were looking down the barrel of another 6 years before what they had looked at as their retirement. They now had no money saved apart from what they would get from national superannuation. That is not good enough. It is not good enough that we have had a financial market in this country that has not got in behind people and provided the safeguards that hard-working Kiwis needed to support them in their investment decisions.

I am proud to see the Securities Trustees and Statutory Supervisors Bill before the House. I am proud to see Simon Power and members of this House bringing this legislation forward. I accept that it is a small step in terms of turning our financial markets around from the Wild West into what can be seen as a sustainable investment market that people can understand and trust. It is what the member for New Plymouth, Mr Jonathan Young, spoke about—a market in which we can build trust. Let us accept that we will not build up trust quickly in those markets because of the situation that we have got to over the last couple of years, but this bill is a step in the right direction. It will protect investors’ interests and enhance market confidence. If that is a step that we can take via this bill, then that is a step in the right direction. I commend this bill to the House.

• Bill read a first time.

• Bill referred to the Commerce Committee.

Hon Dr JONATHAN COLEMAN (Minister of Broadcasting) : I move, That the Television New Zealand Amendment Bill be now read a first time. This bill amends the Television New Zealand Act 2003, in line with the Government’s manifesto commitment to replace the current Television New Zealand charter with a less prescriptive list of functions, and to leave Television New Zealand (TVNZ) free to function as a competitive multimedia company. The other principal purpose of the bill is to amend the principal Act to allow for the rescreening of TVNZ’s archived pre-1989 television programmes in a process of compensation payments being made to rights-holders when the archived programmes are rescreened.

The Government’s election manifesto included a commitment to retain TVNZ in public ownership, and to provide certainty to our public broadcasters. This bill affirms that policy commitment. For many years TVNZ has effectively operated as a commercial broadcaster. The exceptions are TVNZ’s digital channels, TVNZ 6 and TVNZ 7, which will be directly funded by the Government until the end of this year.

Under section 12(2) of the Act, TVNZ’s principal objective is to give full effect to its charter while maintaining its commercial performance. This dual mandate to meet detailed charter expectations and fulfil commercial objectives has proved to be totally unworkable. The introduction of the charter in 2003, and of the funding to support charter programming, did not result in appreciable points of difference between the prime-time schedules of TVNZ and other broadcasters. Indeed, the real question to ask is whether there was any appreciable difference in content on TVNZ before the charter, as compared with after the charter. The answer is that there was not. TVNZ’s charter was first reviewed in 2007-08 and was considered by a select committee, but legislative change did not result because this Government’s preference was to remove the charter altogether.

This Government is committed to public broadcasting. We have shown our support by making the funding that was formerly ring-fenced for TVNZ’s charter commitments available as contestable funding through New Zealand On Air. The Platinum Television Fund allocates $15.1 million per annum for projects to screen on any of New Zealand’s six free-to-air national broadcasters, with preference given to projects scheduled for prime-time viewing. Our view is that no one broadcaster or production company has a monopoly on the best ideas, and the Platinum Television Fund gives the best possible projects the chance to make it on to our screens.

The existing Act does not recognise TVNZ as a multimedia company. Times have changed, and clause 4 of the bill therefore amends the purpose clause of the Act accordingly. TVNZ’s online services are the sorts of services that will now be recognised and encouraged in the legislation. Clause 4 also reflects the new general statement of functions to replace the charter, and these are outlined in what will be a new section 12 of the Act, as substituted by clause 6.

With the passing of this legislation, TVNZ’s functions will be to be a successful national television and digital media company; to provide high-quality content that is relevant to, and enjoyed and valued by, New Zealand audiences; to provide both New Zealand and international content and reflect Māori perspectives; and to include the provision of free-to-air channels available to audiences throughout New Zealand. This is a clear and succinct statement of TVNZ’s functions. TVNZ will continue to provide broadcasting services to all New Zealanders, and the public will continue to have access to local content on TVNZ, including material with a Māori perspective. However, TVNZ will now have the flexibility it needs in order to effectively pursue commercial objectives, and to continue its transition from a traditional broadcaster to a multi-platform digital media company with diverse income streams and services.

TVNZ’s online presence continues to grow. Its website—tvnz.co.nz—receives 1.4 million unique hits per month. The TVNZ ondemand service has been enthusiastically received, attracting 300,000 unique browsers per month, and it is now returning a profit. In October last year, TVNZ launched its first online-only interactive drama, Reservoir Hill, which was a massive hit with the targeted audience. This online growth has not been at the expense of traditional television viewing, and indeed television audiences reached an all-time high in 2009.

If TVNZ is to be recognised as a digital media company, other sections of the principal Act need to reflect this. Under section 28 of that Act, shareholding Ministers cannot give direction on programme content to TVNZ or its subsidiaries. An amendment is required to recognise that TVNZ now provides content on several media platforms that may not meet the definition of “programme”. Clause 9 amends section 28 to include content among the matters for which editorial independence is preserved.

Television New Zealand’s archive is a unique and valuable record of New Zealand’s historical, social, and cultural life, and it is an important part of our screen heritage. As such, it is in the public interest that publicly funded programmes be available for further viewing. Currently a significant number of programmes are effectively locked up in the TVNZ archive, because they are unable to be screened until a number of rights clearance issues are resolved. Prior to the establishment of New Zealand On Air in 1989, programmes were often produced for or by the Broadcasting Corporation of New Zealand, with individual contracts for each actor, writer, director, composer, or other contracted contributor associated with every episode of every programme. The contracts reflected a single channel era, and required every rights-holder to be contacted before rescreening and a payment to be negotiated with that person. That means that everyone loses out. The public is deprived of the opportunity to view publicly funded material, and those who have contributed creatively to the programmes have no chance to earn recognition or royalties from further screening of those programmes.

Under this bill, reuse of these programmes will ensures maximum value from the initial public investment and deliver attribution and a modest financial reward to rights-holders. The reuse of the works allowed in the amendment will be confined to TVNZ’s free-to-air delivery platforms, at no cost to the viewer and with no direct commercial gain to TVNZ. Clause 10 inserts a new Part 4A, “TVNZ archived works”, into the principal Act to make provision for the rescreening of television programmes produced before the establishment of New Zealand On Air back in 1989, although still recognising the rights of persons with an interest in the archived work. New section 29C will enable TVNZ to screen an archived work multiple times free of charge on its television channels, on TVNZ ondemand, and on any other delivery platform with which TVNZ may enter into an agreement for the supply of content, such as New Zealand On Screen.

New section 29G requires TVNZ to establish a TVNZ Archived Works Fund, which will be used to make payment to individuals who register their interest in an archived work that is to be screened. The processes for registration, assessment of applications, and the review process are outlined in new sections 29I through to 29P. The details about where the scheme will be administered have yet to be finalised. In brief, TVNZ will give notice of its intention to screen an archived work through public notices on its delivery platforms, in major metropolitan newspapers, and in any relevant industry or guild publication. The notice will advise when a particular archived work is to be screened. People who believe they have contractual rights in an archived work will be able to register their interest. These applications will be assessed according to the person’s role in production, and compensatory payment will be made on the basis of the assessment.

Before this scheme can be introduced, the Copyright Act 1994 also requires amendment to exclude the communication of an archived work, as defined in this bill, from being an infringement of that Act. Clauses 13 and 14 of the bill make those amendments to the Copyright Act.

This legislation marks a new era for TVNZ. In a converging media environment, TVNZ needs to have a flexible and realistic set of statutory functions to position it as a modern, competitive broadcaster. The TVNZ archived works scheme will ensure that rights-holders will gain benefit from their work, the public will no longer be denied the opportunity to view works that are part of New Zealand’s cultural and broadcasting heritage, and further value will be gained from the public funding invested in the programmes.

At the appropriate time, I intend to move that this bill be considered by the Commerce Committee. I commend this bill to the House.

BRENDON BURNS (Labour—Christchurch Central) : I am pleased to rise and make it clear that the Labour Party will oppose the Television New Zealand Amendment Bill. This might be called the “Get the Coromandel off the Front Page Bill”. The bill was tabled last year. It was promised before Christmas. It comes now as a directionless bill, from a directionless Minister in a Government whose only direction in broadcasting seems to be towards Sky. This bill formalises the gutting of the already gutted Television New Zealand (TVNZ) charter, effected from the middle of last year. At that time the Minister of Broadcasting was also introducing a Radio New Zealand charter bill, which pledged that there would be no sponsorship. Now he is telling the Radio New Zealand board to get out of its mindset and to consider its options, including sponsorship. It is little wonder that thousands of New Zealanders are saying to the Minister “Hands off Radio New Zealand.”

When the Minister launched the Platinum Television Fund last year, he said it would be open to all broadcasters as a fund for premium content. Now the Minister is telling the TVNZ board to look at the Platinum Television Fund as a source of money to keep a public broadcasting option going for TVNZ. This bill closes down that public broadcasting option. If the Minister is successful in that ploy, the money from the Platinum Television Fund will not go into programmes; it will go into keeping, on a shoestring budget, a public service broadcasting option on TVNZ 7 alone. I think we can forget about TVNZ 6 continuing. We have to say private television production companies that are already feeling the squeeze have every reason to ask what on earth is going on. What has happened in the last few months? The recession has eased, but the Government has taken an even harder view of public service broadcasting.

This bill is about a lack of coherence from the Government. On the one hand it says in the bill’s preamble it is in the public’s interest to see New Zealand’s screen heritage. Yet at the same time TVNZ is providing to Sky, from the beginning of May, a channel available only to people who purchase the Sky option. I ask where the public service broadcasting option is in that. Where is the Government’s coherence? How is the public interest being served by that? Another example of this Minister’s inconsistency and incoherence was the recent instruction to the TVNZ board about the funding of TVNZ 6 and TVNZ 7. He told the board that there is no further funding for those channels when the money runs out at the end of next year, because the Minister of Finance has told him that there is no money for that.

Hon Dr Jonathan Coleman: Well, what would you do, Burnsy? What would your Government do?

BRENDON BURNS: Well, the Government should be honest about that and not dress it up as a bill.

Hon Dr Jonathan Coleman: No, tell the truth. What would you do?

BRENDON BURNS: I ask that Minister what he would do about it. He is the Minister, and he can do better than this. This bill fails to spell out in any way any requirements for TVNZ to screen any New Zealand content.

Let us look at the bill and some of the details included in it. Let us look at new sections 4(a) and 4(b), inserted by clause 4, in Part 1. We see the purpose of the legislation is to “(a) provide for the functions of TVNZ, the Crown entity responsible for conducting a television and digital media business; and (b) ensure that TVNZ carries out its functions and maintains its commercial performance”. What do those clauses replace? They replace the Television New Zealand charter, which actually said TVNZ had some other obligations as the State broadcaster. It was asked to feature programming across all genres that informed, entertained, and educated New Zealand audiences. In fulfilment of its objectives, TVNZ was required to feature New Zealand films, drama, comedy, and documentary programmes. What does this bill spell out about the content that must be delivered? It says this: TVNZ must encompass both New Zealand and international content. It puts absolutely no requirement on TVNZ. So under this legislation we will see a further grinding back of the content that TVNZ provides. That is what it will do.

I ask the Minister what the point was of telling the Platinum Television Fund that it should become the funder of high-end content just 9 months ago when it was launched, when now he is saying to TVNZ that the Platinum Television Fund should become, perhaps, the funding source for its ongoing provision of TVNZ 7. With that goes the end of the commitment to quality programming. This bill puts no specific obligations on TVNZ to provide any New Zealand content at all. One has to contrast that with the Television New Zealand charter, which, whatever its faults might have been, at least specified that TVNZ, as the State broadcaster, had some requirements put upon it.

New Zealand On Air is left as an organisation—

Melissa Lee: Which New Zealand programme can you name that was funded by the charter?

BRENDON BURNS: You can talk about grants; I am talking about New Zealand On Air now. I am talking about New Zealand On Air.

Mr DEPUTY SPEAKER: The member is bringing the Chair into the debate on a few occasions. You cannot use the word “you”.

BRENDON BURNS: I will talk about New Zealand On Air, an issue that Melissa Lee knows something about. She has been a recipient of the largesse of New Zealand On Air.

Hon Darren Hughes: Big time.

BRENDON BURNS: Big time. That organisation has provided plenty of carrots, but no stick—plenty of carrots, but no stick. Last week, probably in anticipation of this bill, it announced $9.3 million of funding for high-end programmes: good programmes, stuff that New Zealanders will want to watch, and stuff that will make New Zealanders proud to be New Zealanders. But I suspect that New Zealand On Air is getting in ahead of this announcement, because the Minister is trying to get his hands on the fund he launched only 9 months ago for content.

Hon Dr Jonathan Coleman: Tell the truth, Burnsy. You know that’s not true.

BRENDON BURNS: I say the Minister should tell TV3 that he wants TVNZ to receive most of the money from the Platinum Television Fund. I ask him what has happened in 9 months. Why has he been unable to get some resources for his portfolio—what has happened?

The Minister is also at the same time demanding that TVNZ maximise its dividend stream to him. I ask him what that is causing. TVNZ is now in the process of a second round of job cuts. Ninety jobs were lost last year—90 jobs gone. How many job losses will we see announced in the coming weeks? Already we have been told that $5 million has been taken from TVNZ’s budget. That $5 million is going, so where is the Minister’s commitment to TVNZ and its future? Where is the Minister’s commitment? It is just not there. This bill is an indication of that, very, very clearly. It fails on a number of fronts in terms of its delivery to New Zealanders, and in terms of content. We see the Minister scrambling around, and trying to instruct TVNZ to fund the two existing channels TVNZ 6 and TVNZ 7 out of a dwindling return that TVNZ is managing to deliver at the moment. We know that TVNZ is being unrealistically told to crank out the maximum possible dividends over the next 5 years. We see a second round of job cuts looming.

All that the Minister can do is to introduce a long-awaited bill that does absolutely nothing for public service broadcasting whatsoever. He has also suggested that the two channels TVNZ 6 and TVNZ 7 be funded from the Platinum Television Fund, and we know that it will not deliver that funding. The Minister has told the chair of TVNZ—

Hon Dr Jonathan Coleman: You’ve got to tell the truth.

Mr DEPUTY SPEAKER: I am sorry to interrupt the member. I say to the member to my right, Jonathan Coleman, that the phrase “tell the truth” is deemed under Speaker’s ruling 43/1 to be unparliamentary. The member has used that phrase a number of times. I ask him to desist from doing that.

BRENDON BURNS: Thank you, Mr Deputy Speaker. I am certainly not going to lose my cool and storm out of the Chamber, like members opposite have done to relieve some time when the pressure told on them.

This bill confirms the Government’s view of broadcasting. The Government sees TVNZ as nothing more than a cash cow—nothing more than a cash cow. The obligations enshrined in the charter, in terms of trying to deliver some sense of public service broadcasting objectives, are absolutely obliterated by this bill. They are absolutely obliterated.

Hon Dr Jonathan Coleman: You’re 30 years out of date, Brendon.

BRENDON BURNS: What is wrong with State service broadcasting? What is wrong with public service broadcasting? The Minister is telling TVNZ that he wants it to deliver public service broadcasting objectives, because belatedly he has woken up to the fact that actually New Zealanders do value those things. They do value those things, and they have shown that very, very clearly in the response to his instructions to the board of Radio New Zealand in the last few weeks—very, very clearly. By the thousands and thousands, they have said very clearly to the Minister they do not like his instructions to Radio New Zealand. I suspect that they will not like what he is saying to the TVNZ board, either.

The Minister’s instructions are really part of the whole strategy of lining TVNZ up for sale, by stripping it of any requirement to be anything other than like any other broadcaster out there in the commercial space. That makes it very easy for the Government to say TVNZ is no different from any other broadcaster, so why should the Government keep it in public ownership? That is the strategy. It is very naked, and the Minister’s language about that has been quite explicit. He has said to the TVNZ board that it should let Television One and TV2 be “nakedly commercial”. I think that was the phrase that he used. He said we should let them be “nakedly commercial”. The Government is to fund a tiny shoestring operation at the back end to try to deliver a tiny little sense of a public service obligation, and then it will sell TVNZ. It will simply have a shoestring operation, funded out of the Platinum Television Fund and anything else that TVNZ may be able to cobble together after it has paid its dividend stream to the Government. That is the Government’s strategy. That is what this bill is about.

I also want to comment about the fact that the Minister has included in this bill references to New Zealand content derived before 1989. The bill proposes that TVNZ pay $300 per half-hour to broadcast such content—$300 for half an hour of programme content. What a derisory sum that is. What an insult that is to New Zealanders.

PESETA SAM LOTU-IIGA (National—Maungakiekie) : I rise to support the Television New Zealand Amendment Bill. Unlike the previous speaker, I will be speaking to the bill and the specific clauses within it. As the Minister of Broadcasting has already noted earlier this evening, the bill amends the Television New Zealand Act 2003. It does three things. Firstly, it replaces the Television New Zealand (TVNZ) charter with more generic statutory requirements; secondly, it amends the prohibition on ministerial direction to TVNZ to cover the multiple platforms, including websites, that TVNZ currently operates on; and, thirdly, it enables the screening of pre-1989 TVNZ archived works, which previous speakers have referred to.

The Government aims to replace the TVNZ charter with a brief and less prescriptive statement of functions, which enables TVNZ to determine its own priorities against a general set of functions. The Minister has already noted that it specifies that TVNZ is to provide content for a range of media. It does so now, and it will continue to do so into the future. The other purpose of the bill is to allow for the rescreening of television programmes produced before the establishment of the Broadcasting Commission, or New Zealand On Air, in 1989. These works, which are held in the archive, are not currently able to be shown in their entirety because, with the passage of time, some rights-holders cannot be located or tracked down. It is in the public interest that these programmes be seen again, as part of New Zealand’s screen heritage.

Clause 6 repeals section 12 of the Act and substitutes new section 12, which states, in subsection (1): “The functions of TVNZ are to be a successful national television and digital media company providing a range of content and services on a choice of delivery platforms and”—I emphasise this—“maintaining its commercial performance.” In carrying out these functions, TVNZ of course must provide high-quality content that is relevant to, and enjoyed by, all New Zealanders. It should also encompass both New Zealand and international content, and reflect our unique Māori heritage and history. So TVNZ’s services must include the provision of channels that are free of charge and available to audiences across this nation.

In terms of archived works, the bill sets out a mechanism and the circumstances in which TVNZ may screen pre-1989 archived works without having to negotiate individually with those who were interested in these works. It provides for TVNZ to grant the Māori Television Service the right to screen such archived works, and for TVNZ to enter into negotiations with New Zealand On Air and screen archived works. Works screened under this section, of course, must be screened free of charge. If an archived work is screened in a way other than free of charge, TVNZ would be obliged to provide for the normal legal rights and privileges of the interested persons, which we referred to.

The bill provides for the establishment of a TVNZ Archived Works Fund for the purpose of making payment to those who register their interest in archived works that are to be later screened. As the Minister has already noted, this is about honouring our election promise to replace the current TVNZ charter with a less prescriptive list of functions and to leave TVNZ free to determine its own priorities within its desired goals and outcomes.

TVNZ and its predecessor effectively operated as a publicly owned broadcaster without a charter. It has largely fulfilled this public broadcasting function through access to New Zealand On Air funding, and Mr Burns has kindly reminded us of that. But the problem with the charter money was that often it ended up funding programmes and services for which it was not intended. There is no doubt that it ended up subsidising other types of commercial operations.

The repeal of the charter frees TVNZ from an unworkable dual mandate, and leaves it to set high-level statutory functions in order for it to be a competitive multimedia company. With this new high-level function and its own strategic direction, it will retain its vital role as a willing broadcaster of local content, which is contrary to Mr Burns’ view, of course. This role is essential to the contestable funding model that, in order to succeed, needs broadcasters who are willing to commission and screen New Zealand content.

The previous speaker referred to the Platinum Television Fund. We as a Government have shown our support for the contestable model by making the funding formerly ring-fenced for TVNZ’s charter commitments available as a contestable fund, through New Zealand On Air of course. This amount is not insignificant, at $15.1 million per year. It is for projects to screen on any of New Zealand’s six free-to-air national broadcasters, with preference for prime-time viewing programmes.

I note, in case Mr Burns has forgotten, that successful applications in the first funding round included funding for historical documentaries to be screened on Television One and for Q+A, which, no doubt, Mr Burns watches religiously every Sunday morning. Subsequently, funding has been approved for two dramas, a documentary, and a special-interest programme to be broadcast across a number of channels, including our very own Television One.

At this point I should note that the charter also contains clauses relating to Māori audiences and content. It states that TVNZ will, in its programming, enable all New Zealanders to have access to material that promotes Māori language and culture, and it should feature programmes that serve the interests and information needs of Māori audiences, including programmes promoting Māori language, history, culture, and current events. The bill expects TVNZ to provide content reflecting these unique Māori perspectives.

As the Minister has already pointed out, this bill is to be commended to the House, and I look forward to discussing its specific clauses at the Commerce Committee. Thank you.

CLARE CURRAN (Labour—Dunedin South) : I rise to strenuously oppose the Television New Zealand Amendment Bill 2009. Labour is opposed. This country needs a strong, modern public media service. Instead, we are getting a weak, regressive media that has no coherence, that is about propping up monopolies, and that pays lip-service to New Zealand content. This Government has no commitment to public media or to public broadcasting. This bill is about erosion, and it is a disgrace. It mirrors the gutting that is happening to Radio New Zealand and it reveals the true agenda of this Government, which is to erode public broadcasting services, both television and radio. Public broadcasting is the cornerstone of a healthy democracy. It reflects us back to ourselves. It enables robust, quality public debate that is unencumbered by the imperative of just the ratings dollar, and it enables a level of scrutiny and high standards in the context of news delivery that only a true independent public broadcasting service can deliver.

Tonight I am talking about erosion and confusion, and I want to focus on two things. The first is the replacement of the Television New Zealand (TVNZ) charter. Here it is. There are 24 points being replaced by three. That is a shame; it really is. I want to read a few of those 24 points and what they signify. They say that TVNZ will “feature programming across all genres that informs, entertains and educates New Zealand audiences.”, and it will “strive always to set and maintain the highest standards of programme quality and editorial integrity.” It should “provide shared experiences that contribute to a sense of citizenship and national identity; … ensure in its programmes and programme planning the participation of Maori and the presence of a significant Maori voice; … play a leading role in New Zealand television by setting standards of programme quality and encouraging creative risk-taking and experiment. … play a leading role in New Zealand television by complying with free-to-air codes of broadcasting practise, in particular, any code with provisions on violence;” and “support and promote the talents and creative resources of New Zealanders and of the independent New Zealand film and television industry”.

What is it being replaced with? That it should “provide for the functions of TVNZ, the Crown entity responsible for conducting a television and digital media business;”, and “ensure that TVNZ carries out its functions and maintains its commercial”—commercial!—“performance;”, and that it establish “a process that will enable TVNZ to screen, in specified circumstances, programmes made before 27 May 1989 and held in the TVNZ Archive;”.

Brendon Burns: That’s it.

CLARE CURRAN: And that is it.

Hon Dr Jonathan Coleman: Well, what’s wrong with that? What difference did the charter make to what we see on TV? That’s the real point. If you can answer that, you’re getting somewhere.

CLARE CURRAN: The Minister of Broadcasting talks about aspiration. Aspiration for what, I ask. It is small and quite pathetic.

The second point I will talk about tonight is enabling the screening of TVNZ’s archived works. I think there is a big question mark over what that means, and this goes to confusion. I do not think that the Minister has worked out what he means in relation to this. The question is whether this work will be available to all New Zealanders via free to air. There is a failure to spell out any requirements for Television New Zealand to screen New Zealand content. I think that a lot of questions need to be answered on that issue.

I want to talk about the future and, as I said at the beginning, the importance of having what Labour thinks is a strong, modern public media service. I will refer to a couple of items that I think clearly go to this matter. The first one is a bit sad, but it is from a conference that was held in August 2007 in Wellington entitled “New broadcasting futures: Out of the box”. This was where the future of our broadcasting system in this country was being discussed and a lot of things were out on the table. I will read to members what that conference was about. “Just what will a fast-changing digital landscape mean for audiences, content creators, broadcasters, platform providers and policy makers? If we peer into a crystal ball, is there a broadcasting-led but happily converged future, giving boundless content, with viewers increasingly in control of their own digital communities? Or is this the sad end of free-to-air broadcasting as we know it, with audiences splintered across multiple platforms and Kiwi voices drowned in a sea of global content? What do we need to do to get it where we want to be?” Unfortunately, I think we are being left with the latter.

The second item I will read to members is from an article that was produced by an Australian online organisation called Inside Story. It is entitled “Public broadcasting looks for a future. The pay TV industry has opened up a new front in its battle with free-to-air”. It was written by Margaret Simons and published in January 2009. It was written in response to the review of public broadcasting in Australia. She wrote: “changes of ‘lifestyle and technology’ are the very reason why public input is more than ever necessary. They constitute the main challenge to public broadcasting, and also the main opportunities … The public broadcasters are being challenged to redefine their purposes and their claims on the taxpayer’s purse. The challenge is coming not from government, not from the cultural warriors of the right (or not only from them) but from pay television, … Channels Nine, Seven and Ten are almost irrelevant in this. The pay television sector understands that the commercial free-to-air business model is broken. Commercial free-to-air television cannot afford to compete with pay television in providing multiple channels of specialised content to niche audiences. To do so would fragment the audience and remove the motivation for mass market advertisers to spend their bucks on television commercials. Public broadcasters are a different matter. They are, potentially, the main competition for pay television. The ABC doesn’t have to worry about advertising. For Auntie, there is nothing but opportunity in the capacity to provide more and more choice. She already has two digital television channels, and plans several more—a dedicated children’s channel, a public affairs channel, an education channel, and a ‘best of overseas’ channel. SBS also has multiple channels, and plans more. So in the new battle between pay television and free to air television, the ABC is in the front line. This is why it is the ABC, not the commercial channels, that has taken the lead role in the Freeview organisation, which is leading the free-to-air sector in its marketing efforts. Channels Nine and Seven have not even announced what they plan to put on their new multi-channels. In fact, they give the impression of wanting the whole multichannel thing to go away. This battle between public and pay is not only about government money, but also about spectrum and government favour.”

The only thing that I can say is sensible about this bill is that it states that Television New Zealand is both a TV and a digital media business. I am all for a multi-platform digital media company; that is convergence. But there is no mention of a public broadcasting service. The bill before us tonight is driven purely by commercial imperatives, and we oppose it.

SUE KEDGLEY (Green) : The Green Party will certainly not be supporting the Television New Zealand Amendment Bill, which will strip Television New Zealand (TVNZ) of any public service functions and of any public service obligations or responsibilities, and will turn it into a nakedly commercial broadcaster—in the Minister of Broadcasting’s words—indistinguishable from any other commercial broadcaster in New Zealand. It is sad to sit here and watch one of the last remaining public service broadcasters disappear, because that is what this bill will bring about. It is particularly sad when we consider the media landscape in New Zealand.

New Zealand has one of the most deregulated broadcasting environments in the world. We have no laws limiting cross-media ownership. We have no regulations restricting the amount of foreign ownership of the media, as a result of which only a handful of media outlets in New Zealand are not foreign-owned. They are the Otago Daily Times, a couple of papers on the West Coast, Radio New Zealand, TVNZ, and Māori Television. We are one of the only countries in the world that has no local content quotas, and as a result we have the lowest amount of local programming on television of any OECD country. Most of Europe has about 90 percent local content. Australia has one of the lowest rates, with only 55 percent mandatory local content. As for New Zealand, on Television One we have 10 to 20 percent local content, and there is a rapidly diminishing percentage of local content on TV2. Once this bill goes through, we will be the only country in the OECD that does not have a public service television broadcaster, and soon, no doubt, we will be the first country in the world to sell our public service television broadcaster. Obviously, that is the underlying hidden agenda here—to ready TVNZ for sale. What is the point otherwise in having a publicly owned broadcaster that has no public service functions or responsibilities whatsoever? As others have pointed out, the bill strips TVNZ of its charter, its public broadcasting responsibilities, and any pretence of having any.

The Green Party is the first to admit that the previous dual mandate of TVNZ was not a great success, but at least the charter spelt out explicitly and unequivocally that TVNZ was expected to be a public service broadcaster, to serve the public interest, and to have high-quality news and current affairs programmes, and it set out a list of programming that it was expected to have, such as drama, children’s programming, and so forth. All of this has gone, and TNVZ is simply to exist to be nakedly commercial, and focused solely on pursuing ratings and advertising revenue. Essentially it will exist to sell audiences to advertisers. Once the bill goes through Parliament, as it undoubtedly will, TVNZ will exist for the sole purpose of returning a profit and a 9 percent dividend to its shareholder, the Government. The board already has a mandate of returning a dividend at all costs, and it is looking at ways of lifting its profits by $30 million to $40 million a year, which is no small task when one considers that there was a 90 percent drop in profits last year and a $17 million fall in advertising revenue.

But with no charter in place and absolutely no requirements to screen any particular programmes, TVNZ will be able to do whatever it wishes to try to lift its profits by $30 million to $40 million. It will have, as the Minister said, complete flexibility to do whatever it wants, and no requirement to screen local programmes, documentaries, dramas, children’s programmes, or minority-interest programmes. Inevitably, therefore, we will see even fewer New Zealand programmes, less and less news and current affairs, and we probably will not see any documentaries, because those programmes are more expensive to produce. It is more expensive to produce New Zealand programmes than it is to import cheap packaged action programmes, and so forth, from overseas. So we will see less and less current affairs and news, less and less New Zealand content, and this is happening already.

Last year TVNZ slashed its budget by $25 million, made 90 staff redundant, and cut 100 hours of local programming. This year, around June I am told, it is talking of making a further 75 staff redundant. It is making savage cuts to news and current affairs by cutting 12.5 percent from the $40 million news budget. It is even talking about reducing TVNZ news broadcasts to half an hour, downgrading the Wellington and Christchurch news offices, and centralising control in Auckland. Soon we will have the Auckland news, not the New Zealand news.

Obviously this is an idiotic strategy, because 6 p.m. to 7 p.m. is considered the flagship news hour when channels compete for audience share. Slashing the news budget, as is being proposed, will inevitably reduce the quality of news and therefore people will migrate to other channels, such as TV3. TVNZ will lose audience share and, therefore, advertising and, therefore, revenue. It is an idiotic strategy. But, even leaving that aside, the reduction in news and current affairs and in New Zealand programming is an inevitable consequence of stripping TVNZ of its public service charter.

The Government is stating clearly that TVNZ should be solely focused on naked commercialism. So what we are really seeing is a return to the commercial excesses of the 1990s. This is just a rerun of the 1990s, with TVNZ solely focused on maximising returns and dividends, and being prepared for sale. It is finishing the unfinished business. In the 1990s the intention was to sell TVNZ, but it did not succeed then, so, clearly, the Government is out to finish that unfinished agenda. However, I must admit there is a problem, and the Minister has spoken about this issue in an interview. He said that the problem is there are unlikely to be any buyers out there. The value of TVNZ has dropped from $330 million to $184 million, and he lamented that if one looks at the equity, no one would want to buy it.

The question that media commentators are asking is that other than stripping TVNZ of its charter and its charter funding, and starving Radio New Zealand of its funding, what the Government’s broadcasting strategy is. The media commentator John Drinnan said that after barely a year in the job Mr Coleman has “created such a muddle”—I repeat, such a muddle—“that it is impossible to discern the direction of the Key Government’s broadcasting policy, if indeed it has one.”

The closest thing I found to the Minister discussing his strategy was when he said in an interview that now that Television One and TV2 were nakedly commercial, the plan was that people would be able to turn to TVNZ 6 and TVNZ 7, the new public service channels, to get what he said most people would describe as “quality broadcasting content”. If they then flick to Television One and TV2, they would get whatever is served up.

TVNZ 6 and TVNZ 7 are basically not public service broadcasting channels with high-quality programming; they are niche channels. TVNZ 6 basically delivers news update repeats on Television One, and a handful of local shows. It is basically just reruns, reruns, and reruns of programmes. We cannot call that quality broadcasting. By 2012 it will have no more money. The Minister has said that its funding runs out then. There will be no more money. The Government will expect TVNZ to fund it, and TVNZ has made it plain that it will not be funding it. So the truth is that there is no broadcasting strategy. The Government does not believe in public service broadcasting.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Deputy Speaker, kia ora anō tātau katoa. I te tuatahi me pēnei rawa te kōrero, kei te tautoko ake te Pāti Māori i ētahi o ngā kōrero o tērā mema o te Rōpū Kākāriki i a ia e kōrero ana, he aha kei te pūtake o tēnei pire? Ko tā mātau he tautoko ake i te kī mai, ko te pūtea te mea nui, kaua ko ngā hua o te mahi. Ko tā te Pāti Māori ko te kī ake, e hia kē nei ngā painga o tētahi pepa pēnei i te whāinga matua, arā, te tūtohinga pāpāho. E hia kē nei ngā painga o tērā momo pepa. I ngā tau kua hipa, arā noa atu te taumata kōrero hei whāinga mā Te Reo Tātaki. I kī mai te tūtohinga i ngā tau kua hipa, “TVNZ shall: … ensure in its programmes and programme planning the participation of Maori and the presence of a significant Māori voice;”.

Kei reira tonu te kōrero. Ko te pai o tērā kōrero, ko tāna whakarite i ngā taumata pāoho, ā, ko te kite anō hoki mēnā i ekengia e Te Reo Tātaki ōna ake taumata. I kī mai tētahi pōrangi, ko Police Ten 7 me te Game of Two Halves ētahi hōtaka hei whakatinana i te kōrero i roto i tērā tūtohinga. Kātahi te kōrero rorirori ko tērā. Ko tā Te Reo Tātaki he hūnuku i a Waka Huia ki ngā hāora o te ruru, he whakaiti rānei i ngā hāora o ngā mea pēnei i a Marae. Ahakoa pēhea, ko te mea pai o te tūtohinga, he taumata kei reira, he whakarite i ērā momo taumata kia āhei ai tētahi ki te whakamātautau i a Te Reo Tātaki kia kitea mai ai mēnā i eke a ia ki ōna ake kōrero, ki ōna ake taumata. Ki a mātau, koinei te pai o te tūtohinga.

Me pēhea hoki ināianei mēnā ka whakakorengia tēnei āhuatanga. Me pēhea hoki mēnā kāore a Te Reo Tātaki e hiahia pāoho paku āhuatanga o te ao Māori, te reo Māori, te whakanui rānei i ngā mahi e mahia nei e rātau ināia tonu nei. Me kī, ko wai te pirihimana? Ko au, ko Parekura Horomia, ko te Whare Pāremata? Ko wai hoki? Ko wai te pirihimana hei whakamātautau, hei tohutohu rānei i Te Reo Tātaki?

Kei te pātai au i tēnei i te mea ki tā Peter Thompson o te Whare Takiura o Unitec, nui ake ngā hōtaka taketake nei o Aotearoa muri mai i te whakatinanatanga o tēnei mea te tūtohinga. I kī mai ia, nā te tūtohinga ka kite tātau i tā Willie Jackson Eye to Eye with Willie Jackson, te tangihanga o Te Arikinui Te Atairangikaahu, te tikanga whakamaumaharatanga i te Unknown Soldier, tae atu ki te tangihanga mō Tā Edmund Hillary. Nā te aha i pērā ai? Nā te tautohe. Mēnā ka noho kore tūtohinga, ko tā mātau e kī nei, he moni te take nui.

Ko tētahi mea ohorere ki a au, ko te whakaaetanga kia tukurua, kia tukutoru rānei ngā hōtaka tawhito. Kia mōhio mai e te Whare, i te Rātapu kua hipa, e hia kē nei ngā mea i waea atu ki tētahi o tō mātau rōpū o te Pāti Māori, ki te pātai mēnā kua taka anō ia ki te raruraru. Nā te aha i pērā ai? Nā te mea i pāoho a Marae i tētahi uiui, tētahi hōtaka, nō te tau kua hipa. Ka kite mai ngā tāngata i runga i te pouaka whakaata ka pōhēhē, ē, kua raruraru anō tērā Māori i roto i te Pāti Māori. Engari, ehara.

Nō reira ko te āhua nei, ka taea e Te Reo Tātaki te pāoho ngā hōtaka tawhito i tēnei wā tonu nei. Nō reira, he aha te take nui o tērā? Kei a mātau ētahi āwangawanga mō te pire nei me te mau tonu ki te whakaaro, kia noho a Te Reo Tātaki me te Reo Irirangi o Aotearoa ki roto i ngā ringaringa o te motu, pēnei i tā Sue Kedgley i kōrero nei me noho ki roto i ngā ringaringa o Aotearoa whānui tonu. Engari, ko te mea nui ki a mātau ko tēnei, me pēhea e taea ai te tiaki tētahi wāhanga Māori, ko ngā tūmanako Māori, ko ngā mea e whakanui nei i tō tātau noho ā-Aotearoa nei, ki te kore e whakairi i tētahi tūtohinga, hei kupu ārahi, hei kupu tohutohu, hei kupu arataki, i te āhuatanga o Te Reo Tātaki.

Heoi anō, ahakoa ēnei āwangawanga, ēnei mānukanuka, ka tukuna tēnei pire ki te komiti whāiti kia taea ai te wānanga i te pire nei, kia taea ai e te hāpori, e te motu pea te wānanga i tēnei o ngā kaupapa, ā, ka mutu, mā rātau anō mātau e ārahi hei muri ake nei. Āe, he huarahi kua whakatakotohia, ko tā mātau ko te kī atu, kei reira tonu ētahi paku āwangawanga. Heoi anō i tōna mutunga mai, tāria te wā kia rongo i ngā kōrero o te motu. Kia ora tātau.

[Greetings to you, Mr Deputy Speaker, and to us all again. Firstly, let me say that the Māori Party endorses some of the comments made by that member for the Green Party during her address, when she asked what was this bill’s rationale. We support the response that the main focus is on money and not the benefits from programming. We, the Māori Party, say that there are many advantages in having a primary aims - type document like a broadcasting charter—yes, very many advantages. Television New Zealand in past years was set many standards to meet. The original charter set the benchmark high. It stated that “TVNZ shall:… ensure in its programmes and programme planning the participation of Maori and the presence of a significant Maori voice;”.

The statement is still there. The good thing about it is that it sets broadcasting standards and enables us to assess whether Television New Zealand is meeting its own standards. Some mindless person suggested that Police Ten 7 and Game of Two Halves were akin to the presence of a significant Māori voice, but the nation thought otherwise. That was sheer nonsense. What a load of rubbish! Television New Zealand then shifted Waka Huia into the depth of night, to the hour of the morepork, or reduced the hours of a programme like Marae. Nevertheless, the good thing about a charter is that it sets a standard; it determines the types of standards so one can assess whether Television New Zealand is achieving its standards and how it said it would do it. That is what we like about having a charter.

What would happen now, should a charter be abolished? What will happen should Television New Zealand decide that it no longer wants to broadcast programmes that reflect anything to do with Māoridom and the language, or increase the content of what it is doing right now? Who will oversee all that? Will I do that? Will the Hon Parekura Horomia do it? Will it be Parliament? Who will, indeed? Who will oversee, assess, or advise Television New Zealand?

I am asking this because Peter Thompson from Unitec Institute of Technology has said that the level of local content increased after the introduction of the charter, to the extent that there is more local content screened on Television New Zealand channels. He said that because of the charter we began to see programmes like Willie Jackson’s Eye to Eye with Willie Jackson, the funeral of Te Arikinui Te Atairangikaahu, the memorial ceremony for the Unknown Soldier, and Sir Edmund Hillary’s funeral. What brought that about? Debate did it. Should there not be a charter, it will mean to us that money has become the primary consideration.

The thing that startles me is the provision to screen archived programmes, and allowing them to be repeated two or three times. I want the House to know that last Sunday many people rang a member of our Māori Party to ask whether he was about to get into trouble again. What caused that? A repeat programme, an inquiry from last year, was screened on Marae. People saw it on television and mistakenly assumed that the member of the Māori Party was in trouble again. But he was not at all.

So it seems that Television New Zealand will be able to continue what it is doing right now. What is the big thing about that? We have some fairly strong misgivings about this bill. We strongly believe that Television New Zealand and Radio New Zealand should remain in public ownership. Sue Kedgley advocates a similar view. But the greatest thing for us is to ensure that Māori perspectives and aspirations, as well as those of all the people of New Zealand, are not enshrined in a programming strategy to lead, direct, and guide Television New Zealand.

However, despite these misgivings and concerns we support this bill going to the select committee so that we can hear the views of the people. We will be guided by them afterwards. Yes, there is a process in place, and we say to them that while some minor areas remain a concern, we look forward to the time when we can hear their thoughts. Thank you all .]

JONATHAN YOUNG (National—New Plymouth) : Thank you, Mr Deputy Speaker, for the opportunity to speak on the Television New Zealand Amendment Bill. We continue to live in times of unprecedented technological development, and the speed of change is accelerating. This bill enables Television New Zealand (TVNZ) to keep abreast of that change by replacing the Television New Zealand charter with a briefer, less prescriptive statement of functions, enabling TVNZ to freely determine its own priorities against more general sets of functions. Added to this, the economic downturn, which has affected the advertising revenue of TVNZ substantially, has highlighted the need for TVNZ to implement this strategy in an accelerated manner.

This amendment bill will enable TVNZ to develop its strategy of moving forward as our publicly owned broadcaster. I quote from its 2010 statement of intent, which was released in May 2009: “This strategy was about moving TVNZ from being a traditional advertising driven analogue broadcaster to being a multi-platform television and digital media company with diversified revenue streams.”

We live in times when change is about us all the time, regarding the digital media world in which we live. TVNZ needs to keep up that change in order for it to remain competitive, but competition is not a dreadful thing. We heard discussions tonight about naked commercialism. Competition has the positive effect of bringing better quality at a better price. It becomes efficient in all sorts of different ways. The Television New Zealand Amendment Bill also specifies that TVNZ provide content through a range of media in addition to the conventional television channels, so this bill is keeping step with the statement of intent.

One thing that was touched on by the previous speaker, Te Ururoa Flavell, was the archived works that this bill will unlock. The other purpose of this bill is to allow for the rescreening of television programmes produced before the establishment of the Broadcasting Commission—on or before 27 May 1989. These works, which are held in the TVNZ archives, are not currently able to be shown in their entirety because, with the passage of time, some rights-holders cannot be found. It is in the public interest that they be seen again, as they are all part of New Zealand’s screen heritage. The Government has had to strike a balance between the public good of allowing these works to be reshown and acknowledging the rights of contract holders. The regime does not allow individuals involved in the making of programmes to object to their rescreening or to individually negotiate payment for reuse of content. As a practical matter, it is not feasible or worthwhile for TVNZ to track down every such individual to seek clearance and negotiate a fee for shows made in some cases more than 30 years ago. Instead, the regime introduced by the bill involves general notification and some modest but equitable payment for those who respond.

The bill limits use of the content to free-to-air use—that is, TVNZ cannot charge people to view the content. TVNZ may screen pre-1989 archived works without having to negotiate with each individual. It provides for TVNZ to grant to the Māori Television Service the right to screen archived works and for TVNZ to enter into arrangements with New Zealand On Screen to screen archived works. Works screened under this section must be screened free of charge. If an archived work is to be screened other than free of charge, TVNZ would be obliged to provide for the normal legal rights and privileges, if any, to these interested persons. The bill provides for the establishment of the TVNZ Archived Works Fund for the purpose of making payment to those who register their interest in an archived work that is to be screened.

The charter contains clauses relating to Māori audiences and content. It states that TVNZ will, in its programming, enable all New Zealanders to have access to material that promotes Māori language and culture and feature programmes that serve the interests and informational needs of Māori audiences, including programmes promoting the Māori language and programmes addressing Māori history, culture, and current issues. The bill expects TVNZ to provide content reflecting Māori perspectives, with or without a charter. TVNZ has had a longstanding commitment to Māori programming. I am very happy to commend this bill to the House. Thank you.

Hon TREVOR MALLARD (Labour—Hutt South) : I rise to speak on the Television New Zealand Amendment Bill; I have done some work on this area in the past, as the previous Minister of Broadcasting. I did not think I would be speaking tonight; I thought my time would come at some stage in the future. I thought we would hear from the Hon Sir Roger Douglas on this matter, as he is the sole ACT member in the Chamber and has had a lot of interest in Television New Zealand in the past. I thought that he would want to discuss why he is so keen on voting for a bill to keep Television New Zealand in State control, because generally he takes quite the opposite approach to Television New Zealand. Generally, he pushes the National Party to privatise. Although my colleagues see this bill as a step towards privatisation, I am sure it does not go far enough for Sir Roger. I am very, very surprised that he is not prepared to stand up in this House, vent his views, and say what he thinks. As Jonathan Hunt would say, 10 to 10 at night is peak listening time, and it would be an opportunity for him to get his views across.

There are some points in this legislation on which there is agreement. I think we need a method of freeing up the archive material. I am not sure that we have quite got it right. It might be a sign of my age but I think that archive rights-holders from the 1980s still have a significant interest in the material that they produced. We need a mechanism for ensuring that their rights can be identified and delivered to them, and that there can be some discussion, especially where people have significant rights in this material. There is a treasure trove of material within the archives and it would be good to get it out and make it available. We are seeing a lot of replaying of some of that older material on NZ on Screen and it is very, very good. One might say that although the technology was not nearly as good, some of the intellect that went into the programming, and some of the movies that are now being made available, well outstretch some of the things that are being made today.

The other point on which there is a lot of agreement—and I am not sure yet that this Minister of Broadcasting has his head around it—is the question about what is happening in the media world generally, and the fact that a massive convergence is occurring. Frankly, I do not care how the stuff gets to the screen in my living room. I do not mind if it comes via broadband, via broadcast, or via a Vodafone card, although I get slightly unhappy when Darren Hughes appears on my television screen, as I always question the colour settings. I am never sure that the colour is right when Mr Hughes appears on the screen. When he and Mr Hipkins are on the screen I generally have to ring up Sky to see whether someone can come and adjust the picture, because it just does not look human.

Seriously, convergence is occurring, and it is occurring at a very fast pace. Although I have no doubt that the value of Television New Zealand has gone down over recent years, I also have no doubt that a significant factor in that is that people are able to get their news through many other broadcast channels. More important, fewer and fewer people rely on television for content—for news content or for their entertainment content. Many people now use systems other than broadcast television. Many of us get much of our news and our entertainment by way of our computers, and that is the way of the future. I think it is fair to say—and I say this even though I was the Minister for a year—that I do not think that Television New Zealand has done a good job, over the last 15 years, of staying ahead of that sort of trend. It is an organisation that might be said to be at the higher cost end of the production. It pays very little when it is buying material, but if we look at the size of the organisation compared to similar organisations, we see that it is very big. I am sure that will cause it some problems going forward. This bill does not really address any of that area at all.

I come back to the matter of convergence. Many of us are just beginning to get our heads around the way the new media works. A number of the communications companies, phone companies, and similar organisations are quite a long way ahead of Television New Zealand in their understanding of the possibilities of the new media. It is fair to say that even in this House, without going too deeply into Melissa Lee’s personal interests, we have someone who has shown that one can set up a television company with not a lot and produce material that is competitive in particular niche markets. I think we will find over a period of time that more and more people will do that and, as the shift is made from analog to digital, the ability for many more people to do so will occur. I think that will mean that much more variety is available to people; I think a lot of us draw our material internationally.

All of that has implications for the television organisation that, frankly, is not much different from the one I started watching television on in 1961 when I lived in Wainuiōmata.

Hon Darren Hughes: Are you still there?

Hon TREVOR MALLARD: I have gone a long way: I have gone 100 yards round the corner. I am not sure that the organisation that we are expecting to be our primary provider of unbiased—

Hon Christopher Finlayson: You were a Khandallah boy.

Hon TREVOR MALLARD: Wainuiōmata in 1961.

Hon Christopher Finlayson: I thought you went to Onslow College.

Hon TREVOR MALLARD: I did go to Onslow College, but I assure the member that that was well after 1961. He might not have been born in 1961, but I went to secondary school well after that.

The point I was trying to make is that Television New Zealand will have to be a nimble organisation, and I am not sure that anything in this bill helps it to do that. I say to the Minister that as far as his Platinum Fund, or whatever it is called, is concerned, I was the Minister who shifted the charter money to New Zealand On Air. I shifted it. I am a sports nut, but pretending that an Olympic Games production is an iconic New Zealand production and deserving of charter funds—it was won in a competitive tender; no one else could have used charter funding for sports production out of Beijing—is wrong. For me, that was the straw that broke the camel’s back and caused me to take from Television New Zealand the control of its charter funding. I do not think that it was using it well. I do not think it was using it properly or in New Zealand’s interests. I think, though, that the Minister has gone too far in his approach to put it out for open tender. It is my opinion that such an approach—I raise a point of order, Mr Speaker. I thought I had about another 40 seconds to speak. Is that not the case?

Mr DEPUTY SPEAKER: 4 seconds.

Hon TREVOR MALLARD: Another 40 seconds; thank you, Mr Deputy Speaker! The point I was making is that this bill just—

Mr DEPUTY SPEAKER: I am sorry to interrupt the member, but his time has expired.

Hon TREVOR MALLARD (Labour—Hutt South) : I think it is about 15 seconds before 10 o’clock. I wonder whether this might be an appropriate opportunity for the House to rise and come back tomorrow.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there any objection? There is no objection.

• Debate interrupted.