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House of Representatives
21 February 2006
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Volume 629, Week 7 - Tuesday, 21 February 2006


Tuesday, 21 February 2006

Madam Speaker took the Chair at 2 p.m.


Speaker’s Statements

Parliamentary Service—Speaker’s Role

Madam SPEAKER: On Tuesday last week points of order were raised relating to expenditure from Vote Parliamentary Service. I undertook to reflect on the responsibilities of the Speaker to this House for the subject matter raised in the point of order. I do not intend to respond on a point of order to the submissions put forward as to the propriety of the expenditure in question. This is under examination in other ways and, for the reasons I am about to set out, is not appropriate for a point of order.

Until 1985 a Government department responsible to a Minister delivered services to Parliament and members. In 1985 members were given responsibility themselves for the administrative services they needed. A commission consisting of the Speaker and members was set up, and the Parliamentary Service, responsible to the commission, was created. In 1989 when the Public Finance Act was reformed, the Speaker became the responsible Minister for the Parliamentary Service. This means that the Speaker plays the role of a Minister in accounting for the activities and expenditure of the Parliamentary Service. Written questions may be put to the Speaker about the Parliamentary Service, and the Speaker attends estimates hearings for Vote Parliamentary Service.

Points of order relate, or are supposed to relate, to matters of procedure in the House on which the Speaker can rule—see Speaker’s ruling 19/1. They are not a means of examining Parliamentary Service business—see Speaker’s ruling 15/2—any more than points of order are means of questioning Ministers on the administration of their portfolios.

The Parliamentary Service Commission meets each month. Every party is represented on the commission. Any member with concerns about Parliamentary Service matters may take up those concerns with the commission. In addition, members of Parliament always have the constitutional right to utilise the ordinary procedures of the House, such as written questions, estimates, and financial reviews, to examine matters of policy and administration relating to the Parliamentary Service, but such matters cannot be raised as a point of order, because there is nothing in them on which the Speaker, as Speaker, can rule.

Questions to Ministers

Air New Zealand—Engineering Outsourcing

1. SUE BRADFORD (Green) to the Minister of Finance: Does he believe that, as 82 percent shareholder of Air New Zealand, he should have been more proactive in finding a solution that would keep Air New Zealand’s engineering work in New Zealand?

Hon TREVOR MALLARD (Acting Minister of Finance): No. I would hope that the airline and unions talk further, but as a matter of policy the Minister of Finance, as shareholding Minister, does not intervene in the operational affairs of the airline.

Sue Bradford: Has the board of Air New Zealand shared with the Government shareholder its long-term strategic plan for this business; if so, does it show that what is happening at the moment is just the beginning of a whole series of changes that will lead to lay-offs and cuts in wages and conditions?

Hon TREVOR MALLARD: As Acting Minister of Finance, I am not privy to the details of the briefings between the board and the Minister of Finance.

Dr Wayne Mapp: Will the Government take on board the need to deal with ongoing problems with the Holidays Act and other legislation and issues of relevant daily pay, which Air New Zealand said added several million dollars to its costs, given that the Treasury briefing to the incoming Government that deals with changes to labour laws stated that the “cumulative effect may be significant, particularly in an economic downturn.”, which is exactly the situation facing the airline now?

Hon TREVOR MALLARD: I have never ceased to be amazed by the National Party’s approach to workers’ holidays.

Dr Wayne Mapp: I raise a point of order, Madam Speaker. I asked a very specific question about whether the Government will take on board the issues of the Holidays Act and the Treasury briefing to the Government. The second point was certainly not addressed and the first point was hardly dealt with.

Madam SPEAKER: As the honourable member knows, in supplementary questions only one supplementary question is normally permitted. The Minister did address the question, although of course it may not be to the satisfaction—

Hon Dr Nick Smith: Point of order, Madam Speaker—

Madam SPEAKER: The Minister did refer to the holidays legislation, which was raised in the question. He therefore addressed it. The Speaker is not responsible for the quality of the answers; that is the responsibility of the Ministers and will be judged in this House and elsewhere.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. It is your role to enforce the Standing Orders. I draw your attention to Standing Order 377, “Contents of replies”, particularly Standing Order 377(2)(b) and (c), which quite clearly makes the answer from the Acting Minister outside the Standing Orders. The Standing Order quite properly states that any inferences, imputations, ironic expressions, or discreditable references to the House or any member of Parliament are outside the Standing Orders. All we got in the answer from the Minister was a shot at the National Party. He made no attempt at all to answer the question as a Minister of the Crown.

Hon TREVOR MALLARD: Speaking to the point of order, I in fact said that I never cease to be amazed by the attitude of the National Party to workers’ holidays. That is just a straight statement of fact.

Sue Bradford: Is the Minister aware that Air New Zealand has also put the jobs of over 100 cleaners on the line by putting cabin-cleaning work out to tender; and as a majority shareholder does he see any role at all in trying to get it to reverse its decision, especially in the light of Labour’s own industrial relations policies in the areas of contracting out and job security?

Hon TREVOR MALLARD: Yes and no.

Peter Brown: Can the Minister clarify exactly what he is telling the House—that with all these issues that have been raised in question time this afternoon it is acceptable for the Minister to sit on his hands and get cramp in them?

Hon TREVOR MALLARD: I want to make it clear to the member that the Minister of Finance has a very clear role as a majority shareholder in a publicly listed company. He is proscribed from doing many of the things that many of us might find desirable. Having said that, I point out that, as members of the House will be aware, other people, including the Prime Minister, are much freer to make the views of the Government generally clear.

Sue Bradford: How does the current Air New Zealand strategy of business transformation, which seems to involve slashing wages and jobs and contracting out, align with the Government’s strategic priority, as outlined by the Prime Minister last week, of economic transformation; if it does not, does the Minister think there is some way in which these two strategies can be aligned?

Hon TREVOR MALLARD: Without going into a lot of the detail, I think it is fair to say that many members of the House are aware that the future of Air New Zealand itself was at very serious risk when the Government bought back into it, and it is not out of the mire yet.

Gerry Brownlee: I raise a point of order, Madam Speaker. My colleague Dr Nick Smith raised a very valid point of order with you. It was dealt with by you, and I am not going to question your ruling, but I do think that it stands in somewhat stark contrast to Speaker’s Ruling 154/1, whereby Speaker Hunt had a particular message for Ministers of the Crown who have been asked to account to the public. Mr Mallard gave us his own personal opinion. That may well be the opinion of Cabinet, and it may well be his instruction not to give answers in this particular way. But this is the House of Parliament. We have a right to ask questions and, I think, a right to expect that a Minister will treat questions seriously and attempt to answer them.

Madam SPEAKER: I thank the member. Dr Nick Smith raised essentially the same point of order, although he referred to different Standing Orders. I note what the members say, but the Minister did address the question and will be judged on the quality of that answer.

Prime Minister—Accountability

2. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: When she declined to meet the Controller and Auditor-General to discuss his report into Government and parliamentary publicity and advertising, was she aware of plans to spend over $440,000 of taxpayers’ money on the Labour Party campaign pledge card?

Rt Hon HELEN CLARK (Prime Minister) : There was no such plan.

Dr Don Brash: At what stage prior to the election did the Prime Minister become aware that the Chief Electoral Officer had ruled that Labour’s pledge card was an electoral expense and that it would push Labour’s total electoral spending above the legal limit; and what did she do when she became aware of that fact?

Hon Trevor Mallard: I raise a point of order, Madam Speaker. I invite you to rule on whether the responsibility just referred to is a responsibility of the Prime Minister or of the leader of the Labour Party. If it is the responsibility of the leader of the Labour Party and not the Prime Minister, then the question should be ruled out of order.

Madam SPEAKER: I remind members that Ministers are responsible for only those matters that fall within their responsibilities as Ministers, not as leaders of parties. That goes for all parties in this House. I would merely caution the member who is asking the question to ensure that that question is addressed in the capacity of Prime Minister and not as leader of the Labour Party. The Prime Minister should answer the question in that capacity.

Rt Hon HELEN CLARK: The first time the Chief Electoral Officer advised the general secretary of the Labour Party, or anyone else, to my knowledge, that he considered that the card might be an attributable expense was on 20 October. [Interruption]

Hon Phil Goff: I raise a point of order, Madam Speaker. I understand that when a person addresses a question, the House has to be silent. Almost every member of the National Opposition was interjecting at that point, contrary to the Standing Orders.

Madam SPEAKER: Yes, the member is correct. [Interruption] Would members please observe that ruling.

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

Madam SPEAKER: Yes, someone did interject when I was making that ruling. Who was the member?

Hon Trevor Mallard: The Leader of the Opposition interjected while you were making that ruling.

Madam SPEAKER: Is that correct—because we have to have some order in this House? In the first week I was called upon by many members, mainly in the Opposition, to apply the Standing Orders strictly, so that order could prevail in this House. I did hear someone make a comment when I was ruling; that person should leave the House.

Gerry Brownlee: I raise a point of order, Madam Speaker. This is getting to a point where it is utterly ridiculous. There is a Prime Minister over there who will not account for her bad behaviour and corrupt practice in office, and now a Speaker who is prepared to say that she has a different hat on—

Madam SPEAKER: I am sorry, but that is not a point of order, Mr Brownlee. Please be seated—

Gerry Brownlee: —so we end up with the Leader of the Opposition removed from the House.

Madam SPEAKER: Mr Brownlee, do you wish to remain in this House for the rest of question time, or not? I am on my feet, and you know that you should be seated. I have given a ruling that is perfectly consistent with the Standing Orders—as the member knows. Of course the Prime Minister is responsible, as are all Ministers, for what she does in her ministerial capacity. But leaders of political parties, whether they are Government or Opposition parties, are not subject to review in this House. I did call on the Prime Minister to answer the question in that capacity. A point of order was then legitimately raised, as points were raised all last week when I did not enforce the ruling because it was the first week back. Then, when I was giving my ruling today people interrupted. I am not sure what else I can do as a Speaker but to now enforce those rules. That is the point this House has asked me to rule on, and that is what I am doing.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. Last week you asked our whips to distribute a note to every member of the Opposition side of the House, asking that during the Prime Minister’s statement there should be silence. The members on this side of the House observed that, and gave the Prime Minister a very clear run. When my colleague Don Brash, the Leader of the Opposition, gave his response, there was constant barracking all the way through his speech, and you did nothing. Today, for a comment made by Don Brash, which I did not even hear although I sit four seats away from him, you will kick him out of the House. I think that that raises real questions about the bias of the Speaker.

Madam SPEAKER: No. Please be seated. I did intervene during that debate. I have spoken with members of the party Dr Smith belongs to on that. I have taken action, and since then, when I have called for order that call is probably observed in equal proportions on all sides of the House. I ask the member to withdraw his comment about bias of the Speaker, please.

Hon Dr Nick Smith: Madam Speaker, I ask you to reconsider asking Dr Brash to leave, under circumstances that are totally inconsistent with the way in which you treated Dr Brash last week.

Madam SPEAKER: No. I am sorry, but those are two totally separate points, I tell the member. Last week, undoubtedly, there were many breaches of the Standing Orders. I called attention to those. I am taking action, as I said I would to Opposition front-bench members who came to see me. We are now in a new week. I was also asked repeatedly at the end of last week to apply the Standing Orders. I am applying the Standing Orders. I did not know whether it was Dr Brash who made that intervention, but I am asked repeatedly not to show bias in this House and to apply the rules across the board—and fairly. That is what I am doing. Of course Dr Brash can remain in order to be able to ask his question, and any other questions he has.

Hon Dr Nick Smith: On that basis, Madam Speaker, I withdraw.

Madam SPEAKER: Thank you.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. I have two points. Firstly, in respect of the leaders’ debate, I say that it was not an occasion when members observed the issue of silence, as they well know. Some of us, of course, welcomed the interventions, because it is like taking candy off a baby. Secondly, that display from Mr Brownlee today is unprecedented in the sense that every time I have seen it in the past, the member concerned has been asked to leave the Chamber. He stood there, despite the fact that you were on your feet, and kept on arguing. On every past occasion when that sort of behaviour has happened, the member concerned has had to leave. So should Mr Brownlee be asked to leave.

Madam SPEAKER: Yes, I agree with the member. But I will give Mr Brownlee his final warning for today. It was he who constantly asked me, as Speaker, last week to enforce the Standing Orders. That is what will happen now. So could we please have the supplementary question asked in silence.

Hon Phil Goff: What other reports has the Prime Minister seen about complaints to do with election spending?

Rt Hon HELEN CLARK: I have seen reports that the police—[Interruption] There they go, Madam Speaker. I have seen reports that the police are investigating an Electoral Commission complaint against the National Party for spending $112,000 more on its election advertising than it was allowed to spend, and that the National Party states it was not aware of the need to include GST this election, even though it was aware of that during the last three elections.

Hon Phil Goff: I raise a point of order, Madam Speaker. As the member who asked that question—and I am only three seats away from the Prime Minister—such were the constant interjections, and loudness of the interjections, during her reply that I doubt whether I heard a third of her answer. Could I please ask you to ask the Prime Minister to repeat her answer?

Gerry Brownlee: I raise a point of order, Madam Speaker. I would ask you to consider your earlier ruling today, when you said that Ministers should be questioned on matters that relate to their portfolios. That question no way relates to the Prime Minister’s portfolio. If it does, of course, then every question that we have lined up would be required to be answered by the Prime Minister.

Hon Trevor Mallard: The difference was that the Hon Phil Goff worded his question in a way that was appropriate to have it answered by the Prime Minister; Don Brash did not.

Madam SPEAKER: That is the question really—how the question is asked. When Dr Brash asked his question, of course it was clear that he was addressing the question to the Rt Hon Helen Clark in her role as Prime Minister, and it must be answered. When the supplementary question was put by the Hon Phil Goff, it was also asked in those terms.

Gerry Brownlee: I raise a point of order, Madam Speaker. Last week Dr Brash asked the Prime Minister when she or any of her Ministers knew that the Chief Electoral Officer had ruled that the pledge card constituted election material, and should therefore be included in Labour’s return of electoral expenses. There was some kerfuffle after that, but you yourself ruled that that question was in order. What has changed in the last few days?

Madam SPEAKER: I would need to have an opportunity to be able to review the Hansard on that, and I am very happy to get back to the member. But I know that last time, as I recall it, one supplementary question that was out of order was allowed to go through. I regret that, and that is why I am ensuring, in fact, that from now on there will be a clear statement so everybody knows what the rules are. But I am happy to look at that for the member.

Hon Phil Goff: Can I remind you of my last point of order, which you have not addressed yet. It is allowable in the House to interject on a Minister giving an answer, but those interjections are to be rare and reasonable. Those interjections were continuous and loud, to the extent that neither I nor most members of the House were able to hear the answer. I would like to hear the answer again.

Madam SPEAKER: I thank the member for his comment, and certainly I could not hear all of the answer either. So I would just tell members in the House that of course they can express their views on the answers, but they should do it in a way that is considerate, so that other members can hear the answers.

Dr Don Brash: Can she confirm to this House that the real reason for her declining to meet with the Auditor-General was that she knew that at that point she was up to her eyeballs in the decision to spend over $440,000 of taxpayers’ money on her pledge card, thereby flagrantly breaching the electoral spending cap?

Rt Hon HELEN CLARK: The Auditor-General did not seek a meeting either with me or with the Leader of the Opposition to discuss this year’s spending. He wanted to talk about future rules. Our view was that that discussion was better had with all parties, and the Auditor-General made it clear that it was for after the election.

Heather Roy: Who is right: Labour Party president Mike Williams, who said that the pledge cards for the last three elections were not an election expense so could be paid for out of Helen Clark’s leader’s fund, or Labour Party secretary Mike Smith, who authorised the 1999 pledge card as an election expense?

Hon Trevor Mallard: I raise a point of order, Madam Speaker. That one is absolutely clear-cut. I think we can say thank goodness that the Prime Minister has responsibility for neither of those persons.

Madam SPEAKER: Ruling on the point of order, I say that that is correct. The member may wish to reflect on her question and rephrase it, but I will take the next supplementary question. That question addressed the Prime Minister in her role as a party leader, not as Prime Minister.

Heather Roy: Has the Prime Minister had any reports about who is right: Labour Party president Mike Williams, who said that the pledge cards for the last three elections were not an election expense, so could be paid for out of the Prime Minister’s leader’s fund, or Labour Party secretary Mike Smith, who authorised the 1999 pledge card as an election expense?

Rt Hon HELEN CLARK: Those matters have never been considered to be an election expense, any more than ACT’s one-third-of-a-page advertisement 2 days before the election was considered an expense.

Dr Don Brash: Will she pay the money back?

Rt Hon HELEN CLARK: I remind the member that there are a lot of processes under way. When the Leader of the Opposition cares to engage with members of his party on what is attributable, he may want to raise with them why they did not declare up to $1 million of Exclusive Brethren spending, especially because Murray McCully had editorial control of it.

Dr Don Brash: I raise a point of order, Madam Speaker. Standing Order 377(2)(a) is quite clear that in giving answers to questions, Ministers must not use extraneous names and facts irrelevant to the question.

Madam SPEAKER: I note the member’s point of order. Certainly I would say that if that was the case, then probably many members’ questions and answers would be ruled out of order. But I take the point, because it is a legitimate point. I ask all members to show restraint when they are asking questions and giving answers, and to stick to the point.

Gerry Brownlee: I raise a point of order, Madam Speaker. With all due respect to you, that is an unfair thing for you to say about the Opposition, because we cannot use that sort of material in questions. You know that; you stamp it out reasonably quickly. You have even gone to the extent today of saying that something you ruled to be in order last week is now ruled to be out of order. It is only the Prime Minister and her Ministers who use that sort of extraneous matter to try to divert attention away from what, in this case, is very evidently their corrupt practice.

Madam SPEAKER: I have ruled on the point of order. I will call for the next supplementary question.

John Carter: I raise a point of order, Madam Speaker. The question asked by the Leader of the Opposition to the Prime Minister was very simple: “Will she pay back the money?”. I listened very, very carefully to the answer. Despite a number of interjections—I had my ear to the speaker—I have to say that the Prime Minister went through a whole series of various issues, but did not address the question with a simple yes or no. She did not actually address the question.

Hon Trevor Mallard: Speaking to the point of order—

Madam SPEAKER: No—I thank the member. The question was strictly addressed to the Prime Minister as a party leader, because she has no ministerial responsibility in such matters. I would also note, however, as I have noted before, that Ministers are not required to give yes or no answers. They are required to address the question. I want there to be no further comment on this particular point of order. We have another point of order from Rodney Hide.

Rodney Hide: I raise a point of order, Madam Speaker. Dr Brash raised a point of order citing a Standing Order, and your response was to say you had noted it. I am left confused as to what is meant when the Speaker notes a point of order. Is the ruling in favour of the person who raised the point of order or against that person? It would help us further down the track if you would give a ruling, because just to say that you have noted something leaves us in the dark.

Madam SPEAKER: I thank the member. I said I noted it, and the member may recall that I went on to draw all members’ attention to that point of order and to the substance of the Standing Order, and I sought that they would in fact observe that Standing Order in the future.

Nandor Tanczos: I raise a point of order, Madam Speaker. I invite you to reconsider your ruling on Heather Roy’s question—and I am sorry to go back a little bit. The issue is simply that in this House members quite often ask Ministers whether they agree with a statement of some political commentator or independent expert, and those questions are considered to be within the Standing Orders. I think that to say Heather Roy’s question was out of order, when she was asking whether the Prime Minister agreed with the statements of a Labour Party member, simply because they are both members of the Labour Party seems to me to have quite significant implications. So I would ask you to give that some thought perhaps and come back to us.

Madam SPEAKER: No, it was not ruled out of order solely on that. It is the capacity that the member has in relation to the question that was asked. There was no ministerial responsibility, at all. Of course one can be asked for comments and for reports, but one cannot comment on other parties’ activities for which one has no responsibility at all, either. I just draw the member’s attention to the rulings on that. I am happy to assist by giving a new ruling—to take that point under consideration and bring a ruling back, so it is clear to everybody. I can see this is a point that members obviously do need some guidance on, so I am happy to take it under consideration and to come down with a formal ruling on it.

Hon Murray McCully: I raise a point of order, Madam Speaker. I had some difficulty in hearing what the Prime Minister was saying, but I took it from her most recent answer that she was making a suggestion that I was somehow involved in something improper or untoward in some way. I raise this point of order under Standing Order 116, because I do take offence at the suggestion that I believe the Prime Minister was making. I can assure her it is untrue, and I would like you to suggest to her that she take the appropriate action.

Madam SPEAKER: I could not hear because of the barrage of noise, but I say to the right honorable Prime Minister: the member has raised the question that a comment you made was a reflection on him. Would you please withdraw that comment.

Rt Hon HELEN CLARK: The suggestion I made was that Mr McCully was not only well aware of but had some input into the publication of the leaflets. I am prepared to accept the member’s word that that was not true.

Hon Murray McCully: I asked her to withdraw.

Madam SPEAKER: You have to withdraw, Prime Minister.

Rt Hon HELEN CLARK: And on that basis I will withdraw it.

Rt Hon Winston Peters: Having regard to the last intervention from Mr McCully, would the Prime Minister advise the House as to whether she has received reports of a failure to declare expenses—for example, of over half a million dollars by the Exclusive Brethren church, which was in daily liaison with the National Party before the election and well after it, as every one of my colleagues full well knows from countless phone calls we got?

Rt Hon HELEN CLARK: I am aware that the Chief Electoral Officer referred Exclusive Brethren pamphlets to the police because he concluded that they appeared to promote the party vote for National. Those pamphlets were not put in National’s return. I say to Dr Brash that estimated publicity of $1 million was not included.

Project Aqua—Reports

3. MARYAN STREET (Labour) to the Minister of Energy: Has he received any recent reports on Project Aqua?

Hon TREVOR MALLARD (Acting Minister of Energy) : Project Aqua was dropped because, inter alia, it was very unpopular amongst locals, there were issues relating to water rights, there were geotechnical issues that required extensive and expensive redesign, and it would have destroyed New Zealand’s finest braided river system. It has been replaced by a smaller-scale proposal, which is regarded as being very sensible by locals. I note in a report in the National Business Review that the National environment spokesperson, Nick Smith, wants to resurrect the older, rejected project.

Maryan Street: What other reports has the Acting Minister seen on Project Aqua?

Hon TREVOR MALLARD: They have been confused and contradictory. I have seen a report of Bill English supporting the project, of Nick Smith opposing a proposal to assist it, and of Don Brash just being confused—overall, an AC/DC approach to power.

Hon Dr Nick Smith: Is the Minister aware that in the last 5 years we have seen built only 460 megawatts of additional generation capacity—less than half of what was built in the previous 5 years—and that that lack of generation investment is driving up power prices and reducing security; will it take the lights to go out for this Government to realise that its energy and resource management policies are a flop?

Hon TREVOR MALLARD: Contrary to what the member says, in the last 6 years over 500 megawatts of renewable power has been brought on in New Zealand, notwithstanding the non-renewable power that has also been brought on. I say to Dr Smith that it is really important that when he comes to the House on energy matters, he gets his facts right first.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. It is not 2 minutes since you gave a ruling drawing attention to Standing Order 377, “Contents of replies”. I think it is time you did bring Ministers into line, because that last sentence of what was said by Trevor Mallard was clearly out of line with what you have just said to the House, and it is certainly contradictory to Standing Order 377(2)(c).

Madam SPEAKER: I agree with the member. The Minister should not have addressed Dr Smith directly. I ask him to withdraw that part of his answer, please.

Hon TREVOR MALLARD: I withdraw.

Gordon Copeland: If the project is to not proceed, in view of the opposition that has been voiced towards it, where, in his view, will that leave consumers in terms of future electricity price rises?

Hon TREVOR MALLARD: I think it is inevitable, and most members are aware, that there will be price rises in electricity over the years in New Zealand. We have had some of the cheapest electricity in the world. We are doing a lot of very good work in the renewable areas, including in the wind area, but I think it is fair to say that this Government will not override a decision-making process that rejected a scheme that just would not have worked, going on current public attitudes.

Hon Dr Nick Smith: In light of the comment made by the Minister that the scheme was inherently unpopular, I seek leave to table the election results for the Otago electorate, in which National’s Jacqui Dean thrashed David Parker by a considerable margin, despite the fact that Jacqui Dean supported Project Aqua, with suitable conditions, and David Parker sat on the fence.

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

Corrections, Department—Public Safety

4. SIMON POWER (National—Rangitikei) to the Minister of Corrections: Does he agree with the statement contained in the 2004-05 Department of Corrections annual report that the “purpose of the corrections system is to improve public safety”; if so, is he satisfied that his department is fulfilling this purpose?

Hon DAMIEN O'CONNOR (Minister of Corrections) : Yes.

Simon Power: Does he agree with police officer X, who was interviewed on Radio Live this morning, and said: “I certainly don’t think the answer is to say that jails are overcrowded, let’s let them all back into the community. I mean, they’re there for a reason. They’re there because we need to be kept free from them and safe from them.”; and is it just possible that officer X, with over 20 years’ experience, has a better idea of who is and who is not a risk to society than the Minister with his catch-and-release policy?

Hon Trevor Mallard: I raise a point of order, Madam Speaker. I think it probably relates to Standing Order 377(2)(b), but that is from memory. There was certainly an ironic expression within that question. We have been asked to be strict about those things, and clearly that question was out of order. The bit at the end was absolutely unnecessary for the sense of the question.

Madam SPEAKER: I ask members just to try to restrain themselves from the little ironic twists that they put in questions and answers.

Simon Power: I raise a point of order, Madam Speaker. We find ourselves in a difficult position, because—

Madam SPEAKER: Yes, you do. And so do I.

Simon Power: Last week that phrase was not ruled out of order in any way, shape, or form, and the way members on the Opposition side of the House ask questions should not be interpreted in the same light in which that Minister’s reputation has grown with his little abusive remarks at the end of his statements.

Madam SPEAKER: Well, that last remark was unnecessary! But the member has a point, which is that if I as Speaker enforce those rules strictly, we will not really have much of a question and answer time. So some common sense has to be observed. But it was a timely reminder of those rules—as, in fact, we have had from the other side of the House before.

Hon Trevor Mallard: Point of order.

Madam SPEAKER: I am sorry; I have ruled on the point of order. Is this a different point of order?

Hon Trevor Mallard: I raise a point of order, Madam Speaker. During your intervention before Simon Power’s latest point of order, Simon Power interjected while you were speaking. I ask that the same rules apply to him as are applied to Dr Brash. You were ruling on the previous point of order, and Simon Power interjected.

Madam SPEAKER: I thank the member, but I as Speaker also interrupted the member. So we will call that a draw.

Hon DAMIEN O'CONNOR: I do not know officer X, so I am not possibly able to comment on his competency to make a judgment.

Martin Gallagher: Can the Minister confirm that the number of escapes from prisons has dropped since Labour came to power in 1999?

Madam SPEAKER: Order, please. We want to hear the answer.

Hon DAMIEN O'CONNOR: Yes, indeed. In 1997-98 there were about seven break-out escapes per 1,000 prisoners; in 2004-05 the figure was about 1.5 per 1,000 prisoners—a considerable drop.

Tariana Turia: When will the recommendations from the report of the Office of the Ombudsmen regarding detention and treatment of prisoners be implemented, particularly those urgent recommendations relating to the need for humane conditions that meet international human rights standards?

Hon DAMIEN O'CONNOR: I have every confidence we are meeting those standards right now, and we are working on recommendations from that report to improve the rehabilitation of prisoners and their reintegration into the community.

Simon Power: How can the Minister reconcile his statement that “people who are spending less than 6 months in jail—that is, almost 30 percent of inmates—are people who are no risk to society”, with the purpose of the corrections system to improve public safety, when a quick trawl through the media shows that those inmates include people who habitually drink-drive, who defraud vulnerable people who are in their care, who sexually assault other human beings, and who thumb their noses at already-existing non-incarceration alternatives?

Hon DAMIEN O'CONNOR: Any offenders who pose any threat to society will not be allowed out into society or to be part of any new programme. I quote from a statement: “Non-violent first-time prisoners may get a small concession for good behaviour and rehabilitation. We would retain the option of home detention for non-violent offenders.” That statement was made by Don Brash, the current Leader of the Opposition, in July 2004.

Nandor Tanczos: Has the Minister read the 1989 ministerial review of the prison system, known as the Roper report; if he has, which of its excellent recommendations does he intend to implement?

Hon DAMIEN O'CONNOR: I have read much since becoming Minister. I have not read the Roper report, but I understand there are many wise recommendations in it, and they will be part of the consideration that is currently taking place.

Simon Power: Who is right: the Minister with his decision to let out 30 percent of the prison population because they are no risk to society, or the previous Minister of Corrections, Paul Swain, who said in March 2005: “Inmate numbers are increasing because this Government has got tough on crime following the 1999 law and order referendum.”?

Hon DAMIEN O'CONNOR: We are both right.

Simon Power: Will the Minister just confirm that his policy is all about saving money, and not about victims’ rights, rehabilitating offenders, or public safety?

Hon DAMIEN O'CONNOR: It is not just about money. It is about all the things that the member mentioned in his question.

Work and Income New Zealand—International Representatives

5. HONE HARAWIRA (Māori Party—Te Tai Tokerau) to the Minister for Social Development and Employment: What Work and Income protocols exist to support people representing New Zealand, internationally, while absent from New Zealand?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment) : The Government’s obligation to pay income support usually ceases when the client leaves the country.

Hone Harawira: E tautoko ana te kawanatanga i ngā kaitākaro o Aotearoa i a rātou e tū ana i ngā whakataetae o te Ao, ngā whenua e tuohu nei ki te Kuini o Ingarangi rānei, ā, mēnā, āe, he aha nei te āwhina ki a rātou i Te Tari Kore Mahi?

  • [An interpretation in English was given to the House.]

[Have New Zealand athletes been supported by the Government while competing at Olympic or Commonwealth Games; if so, what assistance are they given by Work and Income?]

Hon DAVID BENSON-POPE: Not that I am aware, and my understanding is that under current legislation I do not have any discretion in such matters.

Hone Harawira: He aha tana whakamārama ki te take o Kahukura Bentson, kaimekemeke Māori mō Aotearoa, kua tonoa kia whakahokia tana penihana i a ia e whakataetae nei mō Aotearoa i ngā kēmu o Mānchester i te tau 2002, ā, kua tono anō hoki kia whakahokia taua pehihana i a ia e whakariterite ana i Canberra mō ngā kēmu e tū ana ki Melbourne?

  • [An interpretation in English was given to the House.]

[What explanation can he give for the fact that in 2002 Kahukura Bentson, a Māori boxer, was made to repay the income benefit he had received while representing New Zealand at the Manchester Commonwealth Games, and that he has again been asked to repay the income benefit he received during a build-up tournament for the Melbourne Commonwealth Games in Canberra?]

Hon DAVID BENSON-POPE: Can I repeat that my advice is that under current legislation I do not have any discretion in these matters. I would be happy to investigate the particular incidents raised by the member, should he provide me with the details.

Television New Zealand—Former Chief Executive

6. JOHN KEY (National—Helensville) to the Minister of Broadcasting: When did the chairperson of the board of Television New Zealand advise him of the board’s decision to strip former chief executive Ian Fraser of his remaining duties, and what form did that advice take, given his statement to the House last week: “The chairperson simply advised me that it had been done.”?

Hon PHIL GOFF (Minister of Defence) on behalf of the Minister of Broadcasting: The chairperson of the board of Television New Zealand advised the Minister by telephone in late December that the board had written to the former chief executive Ian Fraser, withdrawing his duties.

John Key: When the chairperson advised him that Television New Zealand intended to make a misconduct claim against Ian Fraser did he agree with that decision; if not, why did he not publicly lambaste the board as he did during the Judy Bailey fiasco, given that both issues are of an operational nature?

Hon PHIL GOFF: The chairperson of the board advised the Minister that this was the decision that had been made. That was perfectly appropriate. Otherwise it was an employment matter and not within the discretion of the Minister of Broadcasting.

John Key: I raise a point of order, Madam Speaker. I asked the Minister quite clearly why he did not choose to take the form of action that he chose when he investigated the Judy Bailey fiasco. I did not ask him what the chairperson told him. We understand exactly what the chairperson told the Minister. We want to understand what the Minister’s view was, whether he agreed with that, and why he had a differing view to the one he took on Judy Bailey.

Madam SPEAKER: I ask the Minister to address the question.

Hon PHIL GOFF: It was not for the Minister to agree or disagree. It was an employment matter. He was simply advised of that by the chairperson, as is appropriate.

Madam SPEAKER: No, I think the member is saying that his question was about a comparison of two different situations. If the Minister is in a position to do so, would he like to address that?

Hon PHIL GOFF: The question asked why he did not take action. It was not for the Minister to take action; that is the answer to the question. He was advised of the situation by the chairperson.

John Key: I asked the member quite clearly what differentiated the Judy Bailey situation from the action that he took when he was advised that the board would take a misconduct claim against Mr Fraser. It is quite clear. We just want to understand what was going through his mind at the time.

Hon PHIL GOFF: Because the cases were different.

H V Ross Robertson: Can the Minister tell the House who has the responsibilities for the issues raised by Mr Fraser with regard to his employment?

Hon PHIL GOFF: The board is appointed to undertake the governance role at Television New Zealand. The responsibility for employment of the chief executive officer of any Crown entity is a matter for the board, and it is not subject to ministerial interference.

Hon Georgina te Heuheu: Is it not time that the Minister realised that Craig Boyce, chairman of Television New Zealand, is a liability to this Government and a dead weight who is dragging down the company, and would not getting rid of him now be the best way to draw a line under this whole sorry saga?

Hon PHIL GOFF: I very much regret it when a person abuses the privilege of this House to personally insult an individual and make unsubstantiated claims against him. That member has done just that. I invite her to repeat those claims outside the House, and then the person whom she is complaining about can take suitable action against her.

John Key: When the Minister was told of the course of action that the board of Television New Zealand was taking in relation to the misconduct claim, did it occur to him that that would lead to a breach of privilege; if not, does he think that his ignorance in this matter added to Television New Zealand’s predicament?

Hon PHIL GOFF: I doubt that it did occur to the Minister at the time that that might be construed as a breach of privilege. I do note, however, the ruling made by the Speaker in this House that normally in a matter like this whereby the board has apologised, it would be within the Speaker’s discretion to just move on. But there are matters that need to be clarified. I think that there are grey areas, and I think that members on the Finance and Expenditure Committee would agree with that and there is a good purpose for that matter being clarified before the Privileges Committee. It is not for me to pre-empt that committee in its findings in any way.

John Key: What responsibility will he take for a board that has overseen the abject litany of failure at Television New Zealand, including protracted employment disputes with senior presenters, golden handshakes to outgoing employees, breach of parliamentary privilege, and a landslide in rating?

Hon PHIL GOFF: Contrary to what the member has just said, last week Television New Zealand announced that TV2 ratings, for example, had reached a 30-month high. As it has some of the most successful and most popular programmes it is doing very well financially. I challenge the assumptions made in the member’s question.

John Key: Who should the public hold accountable for the self-inflicted litany of disasters that Television New Zealand has made in recent times; and if we are to believe that sole responsibility lies with the board of Television New Zealand, why does he still have confidence in the board, as he said to the House last week that indeed he did?

Hon PHIL GOFF: I believe that by and large the board has carried out its responsibilities competently. I do regret, of course—as every member in this House would regret—the disagreement between the chief executive and the board. It is not for me or the Minister to determine where the fault lies in an employment matter. That is sorted out by the board and is subject to employment law.

Labour Market—Contribution of Immigration

7. RUSSELL FAIRBROTHER (Labour) to the Minister of Immigration: What recent reports has he received regarding the contribution of immigration to New Zealand labour-market conditions?

Hon DAVID CUNLIFFE (Minister of Immigration) : I have seen a report that Craig Foss, the brand new National MP for Tukituki, has attacked the Immigration Service for arresting illegal overstayers working as fruit pickers in Hawke’s Bay. Mr Foss apparently believes that kicking legitimate workers out of their jobs is one law for all.

Russell Fairbrother: Can the Minister confirm that the tip-off to the department came from workers who were sacked to make way for those illegal overstayers?

Hon DAVID CUNLIFFE: Sadly, yes, I can confirm that one of those sacked Kiwi workers was told that he was being laid off because new illegal contract scab labour had been hired at a lower rate.

Gerry Brownlee: I raise a point of order, Madam Speaker. You will be aware that when primary questions are asked by the Opposition, verification has to be provided. The Minister has just said that he has proof, evidence—whatever—that some workers were laid off for others to be given a particular job. The only way he could have that would be if he actually had operational material from his ministry. We have been told repeatedly by Ministers and by yourself that such material should not be, and is not, available to them. I invite the Minister to table the information he has so that he can back up his allegations.

Madam SPEAKER: The member has raised a legitimate point. Questions certainly do have to be verified, but under the Standing Orders answers do not.

Hon DAVID CUNLIFFE: I seek leave to table an article from Hawke’s Bay Today in which the member concerned is quoted on the matter, and another article in which the Hon Rick Barker is quoted on the matter. I can verify to the House that it was Mr Barker who was approached by the sacked worker.

Madam SPEAKER: Leave is sought to table those documents. Is there any objection? Yes, there is objection. They will not be tabled.

Hon Dr Nick Smith: I seek the leave of the House to table a clip from the Nelson Mail in which the local member of Parliament, Damien O’Connor, said that the orchardists required the Immigration Service to take a broad approach and not to prosecute where overseas persons—

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is objection.

Russell Fairbrother: What advice does the Minister have for members of Parliament who criticise the arrest of illegal workers?

Hon DAVID CUNLIFFE: My advice is to put the interests of their constituents first—not to toe the National Party line, which is apparently to align Kiwi workers’ wages not with Australia but with Vietnam, India, and Indonesia.

Craig Foss: Does the Minister truly believe that his department has seasonal work issues addressed, when desperate and frustrated growers in Hawke’s Bay with crops waiting to be harvested have given up on the Minister’s approval in principle process because of bureaucracy and delays; and, with over 6,000 forecast vacancies in the region, is this a clear sign that the Minister’s strategy for seasonal labour is not working?

Hon DAVID CUNLIFFE: The industry has welcomed the launch of the Horticulture and Viticulture Seasonal Labour Strategy, which includes approvals in principle for grape and fruit pickers. I can inform the House that three approvals in principle have been issued for apple growers in the Hawke’s Bay. One of them was turned down by the department because of corruption on the part of the recruitment agency.

Dr the Hon Lockwood Smith: Do the Minister’s department’s criteria for picking up illegal overstayers in New Zealand target any particular groups for any particular reasons; if not, will we now see greater effort to pick up overstayers across all ethnicities and all regions of New Zealand?

Hon DAVID CUNLIFFE: Most definitely the service does target that. It targets legal workers with the skills to do the job, wherever they come from.

Focus 2000 Ltd—Quality of Care

8. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: What did he mean when on Friday morning he said: “officials are now of the view that the quality of care at Focus is no better or worse than the quality of care anywhere else around the country.”, and is he satisfied with that quality of care provided by Focus?

Hon PETE HODGSON (Minister of Health) : I meant what I said. However, within an hour of my making that statement on Friday morning new information was provided to me and to officials that changed our view significantly. I can no longer express satisfaction with the care provided by Focus 2000, and have directed officials to meet with Focus 2000 this week to begin investigating a number of potentially serious allegations.

Hon Tony Ryall: The Minister having said on radio this morning that he was embarrassed to have given such an undertaking without knowing the full story, what is the nature of the new information or allegations that he has received?

Hon PETE HODGSON: I am not going to give—indeed, it is not in the national interest for me to give—details of the new information or, indeed, the sources of that new information. But I will say to the member that the information came from a variety of sources, mainly during the course of Friday, and a little more over the weekend.

Ann Hartley: Has the Government increased funding for disability support services; if so, by how much?

Hon PETE HODGSON: Yes, we have; by a lot. The increase in disability support services funding in the 12 months ended 1 July last year was about $100 million, or about 16 percent. Investments like this can be made only by a Government that does not put reckless, unaffordable tax cuts ahead of quality public services.

Hon Tony Ryall: Is the Minister going to leave this investigation of Focus 2000 in the hands of the same bureaucrats who have let the problem continue for the last 2 to 3 years?

Hon PETE HODGSON: The member seems to be unaware that it is normal practice for the Ministry of Health to contract independent quality auditors when it wants a quality audit done.

Hon Tony Ryall: If the Minister was expressing confidence in Focus 2000 amid reports of deaths, mistreatment, and understaffing, then just how serious is the new rash of information and complaints that has prompted this action?

Hon PETE HODGSON: The reports of deaths and people being injured—and, in fact, serious overpayment to this outfit, Focus 2000—go back 2, 3, and, mainly, 4 years. The reason that this has surfaced as an issue in 2006 is that a report leaked by persons unknown gave rise to further debate around the activities of Focus 2000.

Dr Paul Hutchison: Why has it taken the Minister so long to recognise the inadequacies of the Ministry of Health’s disability auditing system, which has been described as a seriously flawed tick-box arrangement, and which was rejected by the Standards and Monitoring Services Trust 2 years ago because it did not enshrine a quality of life - based philosophy?

Hon PETE HODGSON: I think the member must be confusing the range of audits that take place. A bunch of audits—typically named “certification”—are there to ensure that there are minimum standards. There is a bunch of financial audits, which are self-explanatory, and there is a bunch of quality audits. In the case of quality audits the auditor, typically independent of the ministry, actively questions residents or clients, and parents or friends of residents or clients, to ensure that the outfit being audited is satisfactory.

Dr Paul Hutchison: Does the Minister accept the claim that under the new auditing system of certification it is possible for an agency to receive a certificate based on the audit of a small selection of its homes, and that some homes could be certified without an auditor setting foot in the door; and what does he intend to do about it?


Dr Paul Hutchison: Does the Minister feel embarrassed by his remark on Morning Report last week to the effect that the services provided by Focus 2000 are no better or worse than those of any other service provider in the country, and will he here and now apologise to the thousands of disabled people whom he has insulted?

Hon PETE HODGSON: My remarks at 7.30 a.m. on Friday were based on information available to me at that time. Within an hour new information had arrived that occasioned me to have a further meeting with the Ministry of Health, which later that day said that further investigations would now take place.

Navy—Multi-role Vessel

9. DIANNE YATES (Labour) to the Minister of Defence: What progress has been made on acquiring a new multi-role vessel for the Navy?

Hon PHIL GOFF (Minister of Defence) : Good progress has been made, with construction being on schedule and within budget. The ship has been launched, with its initial fit-out currently under way at Merwede in the Netherlands. In July it will sail for Melbourne for its final fit-out, and for the addition of military equipment. The Ministry of Defence will accept the ship in December, just 20 months after the first steel was cut.

Dianne Yates: What capabilities will the multi-role vessel add to our Defence Force?

Hon PHIL GOFF: The multi-role vessel will provide tactical sealift, and patrol and at-sea training, for the navy. It is capable of carrying, for example, 250 troops; around 50 vehicles, including light armoured vehicles and Pinzgauers; four helicopters; and 33 containers. Its landing craft and its helicopters will increase our capacity for disaster relief in the Pacific. It will also work with a range of other departments to protect our borders.

Hon Murray McCully: Is the Minister aware that the process by which the contract for the multi-role vessel was awarded was a subject of an Ombudsman’s review that made a number of criticisms of the Ministry of Defence, and a number of recommendations; and can he give the House an assurance that all those recommendations have now been implemented?

Hon PHIL GOFF: I can tell the member that the process followed by the ministry was in accordance with the practice guidelines for procurement, which were put out by the Office of the Controller and Auditor-General. The process was properly audited by Audit New Zealand, which did not find fault with it. The Ombudsman came up with the conclusion that because one of the tenders had been inadequately prepared, the ministry should go back to that tenderer. Now, that does produce some difficulties, as the member will be aware, because if the ministry went back to one tenderer and said that the tender had not been adequately prepared, the ministry could be prejudicing the cases of other tenderers. The ministry is currently implementing those aspects of the recommendations, as appropriate, but it is also seeking Crown Law and private legal advice on the issue I have just raised.

Dianne Yates: Given the National Government’s experience of major instability with the last sealift vessel, the Charles Upham, what confidence does the Minister have that the new ship will not suffer from the same problems?

Hon PHIL GOFF: I am very conscious of the difficulties that were incurred by the Charles Upham—the “”, as the seamen on board used to refer to it. As a result, we have gone about this process in quite a different way from our predecessors. We did rigorous tank-testing last year, which showed that the multi-role vessel fully met its sea-keeping requirements. The testing has shown that the vessel is capable of being fully operational in harsher conditions than weather that keeps the Cook Strait ferries in port. I think that that is a very good result from that testing.

Gerry Brownlee: I raise a point of order, Madam Speaker. I did not interrupt the member answering, because you had clearly decided he should answer. But I ask you to look at the Hansard record after this and consider whether that question was in order, and whether the answer was in order. It would be our assertion that, given the discussion earlier today, both question and answer were well out of order, and that Mr Goff had a bit of a free hit, as it were. But if we are to have rigid enforcement of the Standing Orders around questions that are contentious, I think that similar provisions should be applied to the question for which we have just heard an answer.

Hon PHIL GOFF: Very briefly, I say that the thrust of the question asked what confidence I have that the new ship will not endure the same problems that the previous sealift vessel had. That is absolutely within my responsibilities—absolutely appropriate—and the member’s point of order is without foundation.

Madam SPEAKER: I am happy to look at the matter for the member, and that was the essence of his point of order. There is a further point of order? It is a different point of order, I hope.

Gerry Brownlee: No, that is not the essence of my point of order. It is simply to say that had Mr Goff required the back-bench patsy question to be asked in that way, it would have complied. But he did not, and that really is the issue.

Madam SPEAKER: I am sorry—

Gerry Brownlee: If the Minister had kept his answers—

Madam SPEAKER: Would the member please be seated.

Gerry Brownlee:—only to that particular issue, it would have complied, as well.

Madam SPEAKER: Would the member please be seated. I said that I would look at the matter for the member. I can do no more at this moment.

Question No. 10 to Minister

JUDITH COLLINS (National—Clevedon) : I raise a point of order, Madam Speaker. I seek your assistance on this matter, pursuant to Standing Order 369 and Speaker’s ruling 145/2, as I see that I am to raise this issue with you during question time. I put in a question this morning for the Minister for Social Development and Employment, when I asked whether he had been advised of any reports that stated he had misused his ministerial position. There is a report in Investigate magazine that makes that allegation. That question was ruled out of order, after it had been in the Clerk’s Office for about an hour, and I understand that you may have had something to do with that decision, Madam Speaker. I wonder whether you could give me some assistance so that that question does not get ruled out of order again.

Madam SPEAKER: I had no knowledge that the member had put in a different question before I received the list of questions that were to be put, then I was informed, as I was on several other questions—as I often am—that there had been an alteration to those. I personally have nothing to do with that.

JUDITH COLLINS: I seek leave to ask my original question.

Madam SPEAKER: The question was ruled out of order by the Clerk’s Office, but the member can seek leave to do that. The member has sought leave. Is there any objection? There is objection.

Social Development and Employment, Minister—Speeches

10. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: How many speeches has he delivered in his capacity as Minister for Social Development and Employment?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment) : Six.

Judith Collins: Did the Minister agree to speak at the 10th Australasian Conference on Child Abuse and Neglect last week; if so, why did he not front up to speak—was it because of the police finding of a prima facie case that he assaulted children in his care, and that to do so would be extremely duplicitous?

Hon Trevor Mallard: I raise a point of order, Madam Speaker. The Minister was asked a very straightforward question on how many speeches he has delivered in his capacity as Minister for Social Development and Employment. He gave a very specific answer. Supplementary questions must relate to either the question or the answer. Why someone chose, or did not choose, to give another speech does not relate to either.

John Carter: That is really a silly point of order from this point of view. The question was about how many speeches the Minister has given. The supplementary question asked about the contents of those speeches, and was quite within order.

Madam SPEAKER: I understand the point of order as raised by the Minister, and one could say that, strictly, the question was only about the number of speeches. However, it was about speeches, so I rule that in fact the question is in order.

Hon DAVID BENSON-POPE: I certainly do not agree with the proposition in the second part of the question, but I am only too happy to stand in line behind the Governor-General, the Prime Minister, and my colleague Ruth Dyson, who has delegated responsibility in this area.

Judith Collins: Does the Minister consider that an event of the size and importance of last week’s conference on child abuse, at which he was listed in the programme as a speaker, should have been one that he spoke at, given his ministry’s role in co-hosting?

Hon DAVID BENSON-POPE: That is why I attended.

Judith Collins: How does the Minister expect to carry out his job if every time he is asked to speak on issues of child abuse he has to be aware that listeners are wondering how he has the cheek to lecture them about children’s rights when he has shown so little regard for them himself?

Hon Trevor Mallard: I raise a point of order, Madam Speaker. It is clearly a very predictable point of order.

Madam SPEAKER: Yes, the word “cheek” is obviously what you are objecting to. Would the member like to withdraw that phrase, please.

Judith Collins: I withdraw it. I raise a point of order, Madam Speaker. I would like to insert the word “gall”.

Madam SPEAKER: I am sorry, but that is coming really close to trifling with the House. Would the member please withdraw the word and leave it at that.

Judith Collins: I withdraw.

Hon DAVID BENSON-POPE: Without difficulty. Can I refer the member to the statement released by the police on 23 November last year.

Judith Collins: Was that the statement that also said there was a prima facie case that the Minister had assaulted children in his care?

Hon DAVID BENSON-POPE: It was a statement that made it very clear that the police had fully investigated those matters and chosen to take no further action.

Overseas Investment Commission—Strategic Infrastructure

11. PETER BROWN (Deputy Leader—NZ First) to the Minister of Finance: Is he satisfied that the Overseas Investment Commission considers and protects New Zealand’s national interest when deciding on the fate of sales of strategic infrastructure, such as the port of Lyttelton?

Hon TREVOR MALLARD (Minister for Economic Development) on behalf of the Minister of Finance: Yes, under new overseas investment legislation that came into effect last year, criteria to assess a benefit to New Zealand were made more comprehensive to ensure that the value of sensitive New Zealand assets are recognised and enhanced by an overseas owner.

Peter Brown: Is the Minister aware that all our ports have had their security beefed up, principally at the behest of the Americans, and is he also aware that in the USA, I think six ports are up for sale, and the Americans are endeavouring to ban them, principally for security reasons, and if he is aware of that does he not think he should take a closer look at the sale of the port of Lyttelton?

Hon TREVOR MALLARD: There are no specific criteria in the Act relating to national security. However, the general law, for example biosecurity and customs legislation, applies to the port regardless of the nationality of the owner. If the member has specific concerns about this issue he could take it up with the Minister of Finance. If he has matters that go to international affairs he might like to talk to the Minister of Foreign Affairs.


12. Hon BILL ENGLISH (National—Clutha-Southland) to the Minister of Education: What proportion of parents are able to choose the school their child attends?

Hon TREVOR MALLARD (Minister for Economic Development) on behalf of the Minister of Education: Generally all but 22 percent of schools currently have enrolment schemes that protect the rights of parents to have children attend their local school if that is the parents’ choice. This policy was introduced by National in 1998 after the disastrous results of its decision to abandon zoning in 1991.

Hon Bill English: If, as the member says, generally all parents have a choice about where their child goes to school, why is it then Labour Government policy to keep secret from parents information about schools that is contained on the SchoolSmart website?

Hon TREVOR MALLARD: Because this Government believes in undertakings made, when data is collected, being kept.

Moana Mackey: What reports has he seen on alternatives to the current system where students have a right to attend their local school?

Hon TREVOR MALLARD: I have seen an approach that would introduce a competitive market between schools, reintroduce bulk funding, and set up schools for privatisation. These policies are advocated by someone who says he does not care who owns our schools—the absent Dr Brash.

Madam SPEAKER: Would the member please apologise and withdraw that remark.

Hon TREVOR MALLARD: I apologise and withdraw.

Hon Brian Donnelly: Can the Minister confirm that when the then Minister of Education, Lockwood Smith, abolished school zoning in the early 1990s, the areas that were most negatively affected were blue-ribbon areas such as Epsom, and that the hue and cry from such areas became so strident that National, with the support of ACT and Mauri Pacific, reintroduced geographic zoning in November 1998?

Hon TREVOR MALLARD: Yes, I can confirm that all of that is correct. I can also confirm that as a result of the policy, 47 percent of Māori parents who tried to enrol their children at schools with limited entry were unable to, compared with 10 percent of Pākehā. When principals selected, we got some results that were not random.

Hon Bill English: Which of the following data, collected by the ministry and available on the SchoolSmart website, does the Government believe is too dangerous for parents to see, and that they should be protected from seeing: ancillary staff hours, expenditure on property and depreciation, predicted roll compared with actual roll, roll-change comparison by similar schools, or suspensions per 1,000 students?

Hon TREVOR MALLARD: All that material is available.

Hon Brian Donnelly: Can the Minister confirm that when, under his administration, balloting of school students was introduced, principals such as John Morris warned the Government that parents would indulge in large-scale cheating in certain areas, and will he put in place some policies that might assist some of those schools in overcoming such practices of some parents?

Hon TREVOR MALLARD: I know that the former Minister of Education worked very closely with John Morris in order to work through some of those issues. They worked in a collaborative way and made a lot of progress. I note that currently there are 10 requests to the ministry from people who have been declined enrolment at Auckland Grammar who claim to live in the zone. So far, three of those cases have been resolved. There has been a direction to the school to enrol them. The other seven cases are being worked on.

Hon Bill English: If, as the Minister says, all the information available on the SchoolSmart website is publicly available, why has he stated publicly now several times that this information is too dangerous for parents to see and that he will not allow parents to have access to it, even though school principals and the ministry use it all the time to compare schools?

Hon TREVOR MALLARD: What the Minister answering for the Minister said in the House today was that the three pieces of information that the member asked for were all publicly available.

Hon Bill English: Is the Minister now telling us that parents must be protected from actually being able to use information that is publicly available, because, as he realises, the SchoolSmart website produces that information in a way that means it can be compared from school to school? Does the Minister believe that the information is OK if it is publicly available, but is dangerous if it can be used?

Hon TREVOR MALLARD: Not at all.

Hon Bill English: Does the Minister understand how ridiculous it sounds when he says that information that is publicly available must be kept secret from parents in case they start using it to compare schools?

Hon TREVOR MALLARD: I can understand how ridiculous the member sounds.

Madam SPEAKER: If the Minister would just like to rephrase that answer.

Hon TREVOR MALLARD: I can understand how silly the question sounds in the House.

Hon Bill English: Can the Minister explain to members of the House—a number of whom are parents of schoolchildren—why this information on the SchoolSmart website should be kept secret from them, and what it is about parents that renders them so dangerous and stupid that they should not be allowed to see the information?

Hon TREVOR MALLARD: I would not consider most of the parents in this House stupid.

Questions to Members

Finance and Expenditure Committee—Television New Zealand Inquiry

1. RODNEY HIDE (Leader—ACT) to the Chairperson of the Finance and Expenditure Committee: Does he have copies of my letter to him as chairman relating to the committee’s inquiry into Television New Zealand; if not, who has the copies that he referred to last week?

SHANE JONES (Chairperson of the Finance and Expenditure Committee) : Yes.

Rodney Hide: Could the chairperson explain what determined this letter from last week to be a “so-called letter” and “not relevant”, and therefore able to be ripped up by him?

SHANE JONES: I have responded to the member’s letter. He has been invited to raise his concerns at the committee, which is the appropriate place to deal with his anxieties.

Debate on Prime Minister’s Statement

  • Debate resumed from 16 February.

GORDON COPELAND (United Future) : Whilst we here in this House continue our debate on the Prime Minister’s statement to open the new parliamentary year, we need to be very, very conscious indeed that for the people of New Zealand, particularly business people, life has just got considerably more difficult. They are faced with rising interest rates and a relatively high exchange rate. Perhaps most important of all, we have just seen in recent surveys that the confidence of business people, looking forward, has dropped quite dramatically. Given those realities, in the next 3 years we in this House need to concentrate on trying to improve the New Zealand economy and the conditions of doing business in this country.

I mention in that connection a number of matters that have been raised by the Prime Minister in her statement. First of all, though, she failed to say that the carbon tax has gone. It was not gone by lunchtime but it was gone by Christmas. I remind the House that in the 2005 Budget the Minister of Finance announced that a carbon tax would be levied on the people of this country to the tune of $322 million per annum. I am very delighted to be able to tell the House that the carbon tax is gone and that New Zealanders will therefore be relieved of a $322 million per annum impost from the Government. Why? The reason is that in order to gain the support of United Future on confidence and supply, the Labour Government was somewhat forced to back down and remove the carbon tax. It is just as well the carbon tax has gone, because, as the officials’ papers show, it would have had a minuscule impact on the volume of greenhouse gases in New Zealand, which was the original logic for bringing it in. It was a flawed policy. I for one am glad to see the end of it, as are most businesses.

The Prime Minister also mentioned that a review of business tax would take place during this term of Parliament. It is interesting to remind people of what the situation of the various parties was at the last election. The Labour Party firmly ruled out any reduction in business taxation in New Zealand. The National Party was, I suppose one might say, a little more in favour of the idea. It said that, yes, it would have a reduction in business tax, but not until 2008. In 2008 National was going to drop the rate of business tax by 10 percent, from 33c to 30c.

The ASSISTANT SPEAKER (Ann Hartley): I am sorry to interrupt the member but members must be seated. It is a courtesy. I ask them to please not stand and talk while the member is speaking. I am sorry, Mr Copeland.

GORDON COPELAND: Thank you for that intervention, Madam Assistant Speaker. I should mention that during the election no policy commitment came from New Zealand First to cut business tax. But United Future went to the electorate and said that it wanted to promote very vigorously in this Parliament a reduction in business tax. Again, as a result of our confidence and supply agreement, that is now going to happen. A cut in the rate of business tax in this country will occur during the next couple of years, and I believe that it is timely and overdue.

The Prime Minister laid stress on the fact that we want to incentivise productivity gains and make New Zealand more competitive with Australia. We must, in fact, do both those things if we are to see our economy grow and New Zealand prosper so that people can make proper provision for their families, and so that, for a lot of them, they can start to address the significant debt burden so many families now find themselves in.

The Prime Minister also laid stress on the need to provide more support for exports. I must say that for some time I have thought about the question of how we go about getting more growth in our exports. In fact, back in, I think, the year 2003 I sent the Minister of Finance a list of 12 ways in which we could boost exports from this country, only to be told, in the majority of cases, that they would breach World Trade Organization rules, which forbid any kind of subsidisation of a country’s exports. So in this particular area I am really beginning to think that if we are to see exports grow, then exporters themselves will have to take a major initiative. I am interested in getting away from rhetoric and in doing things that actually work. I suggest to exporters that in Fonterra and Zespri we have models to build on, in terms of building strong exports going forward. Both Fonterra and Zespri bring together all the players in the industry and create a single desk for exports. They have a company, formed with individual exporters as shareholders, whose sole job is to seek, discover, and develop export markets for New Zealanders and New Zealand businesses.

It is also very important, in my view, that we bring the price of electricity down. For many years surveys have been done amongst Grey Power members, whose No. 1 issue for a long time was elective surgery. For Grey Power members now, the No. 1 issue is the rising price of electricity. That is not surprising, because the price of electricity last year went up to somewhere between 25 and 40 percent—depending on which set of figures one uses—in one single year. That is far too much. The Government must therefore look at ways and means of ensuring that our electricity prices come down.

We in United Future have some worthwhile suggestions to make in that regard. For example, we believe that Transpower should fund the upgrade of the national grid solely from debt financing—debt financing borrowed by the Government against its balance sheet and repaid over a 30 or 40-year period—so that we spread the cost of that investment, which has to be made in the interests of our electricity system, across, if you like, several generations. We believe that we must bring down the cost as much as we possibly can, so that we can give a shot in the arm to our businesses and also keep electricity prices affordable, particularly for our elderly.

Hon LUAMANUVAO WINNIE LABAN (Minister for the Community and Voluntary Sector) : Kia ora, talofa lava, and warm Pacific greetings. I thank the Speaker for the opportunity to contribute to this debate.

One of the good things about having a break away from Parliament over Christmas and New Year is that it provides an opportunity to spend time with ordinary New Zealanders, and to see and hear what is happening in the many communities that make up our nation. What I see and hear is that times are good. Times are good because people have jobs. Times are good because people are getting off benefits and into work. Times are good because the economy is good. Times are good because we are healing some of the divisions of the past.

The economic policies of the 1990s scarred this nation deeply. It is taking time to heal the wounds of massive unemployment and the erosion of social capital that was the product of benefit cuts and other divisive policies that put profits ahead of people. Profits and the accumulation of capital do matter, but people and the accumulation of social capital matter, too. We have to get the balance right. Times are getting better because for the last 6 years a Labour-led Government has been getting right the balance between economic policy and social policy.

The year 2006 started with the good news that more New Zealanders are in work. We have seen a huge change in our communities, with more people than ever before moving into work. Importantly, those gains have been shared with all regions of New Zealand. That has happened on the back of sound management of the economy, leading to strong economic growth. New Zealand has the lowest unemployment rate in the OECD. Unemployment benefit numbers in my Mana electorate have fallen by 20 percent in the last year, according to the latest statistics provided by Work and Income centres in Porirua and Kapiti. That drop is further evidence of a strong economy across New Zealand and across the regions. Results from the quarterly benefits survey by the Ministry of Social Development show that for year ended December 2005, 1,902 local people were on the unemployment benefit, which is down from the previous year’s 2,373 and is a drop of 20 percent. Compared with the 1999 figures when Labour took office, the total number of people receiving an unemployment benefit in Mana has dropped by 2,353, or 55 percent.

Times are better because people are getting off the benefit and into work. There have been warnings of an economic downturn by the doom merchants in the Opposition, but the truth of the matter is that our economy is, as forecast, currently slowing before it is expected to pick up again in late 2007. We have had good jobs growth and an overall reduction in the numbers of people on any kind of benefit. The labour market is still tight but our local economy is in good shape. It is time for people to stop talking the economy down and to get on with business. I get sick of the tire old cliché that too many people are on benefits and are a burden on the State. The latest statistics show that in 2005, the total number of people receiving any kind of benefit in Mana fell by 6 percent. Between 1999 and 2005 the total number of people on the unemployment benefit, domestic purposes benefit, sickness benefit, or invalids benefit dropped by 16 percent. In other words, 1,510 fewer people were receiving benefits.

Behind those statistics is the reality of Kiwis getting on with supporting their families, working towards individual goals, and making real contributions to our communities and our local economy. Long-term unemployment creates lethargy, whereby people lose their sense of self-esteem and often withdraw from their community because they feel they have nothing to contribute. It is a downward spiral that erodes the cohesion of our communities. But when people have jobs they have more time to put into their local community. They participate in their community and add to the social capital of the nation. Social capital is the glue that binds and enriches our communities.

Let me give an example of how that is happening in my community. On Waitangi Day I spent most of my day at Te Rauparaha Park, a wonderful, quiet, green space in the centre of Porirua City. On Waitangi Day Te Rauparaha Park was a musical sea of colour, filled with people enjoying the vibrant Festival of the Elements. During the day all the elements—rain, sun, wind, and fireworks—made their presence felt. The festival was set on course by Ngāti Toa kaumātua Pūoho Kātene and opened by Mayor Jenny Brash. Representatives from the Governments of Mexico, Russia, France, the United States of America, and Germany, and a delegation from Nishio, Porirua City’s Japanese sister city, attended the festival. People from Porirua and from up the Kapiti coast turned out. Thousands turned up that day to enjoy the show put on by 1,000 performers. The Porirua Community Arts Council is to be congratulated on building up the Festival of the Elements each year for the last 14 years. Wonderful Kiwis like Bob Cater, Helen Smith, and the team have done a great job, all based on voluntary effort.

As I watched the shows on the main stage at the Trust Porirua Aquatic Centre, the Porirua Recreation Centre, the skateboard park, and throughout Pātaka’s performing and exhibition spaces, I could see what a vibrant community we live in. Porirua has moved on since the 1990s, when unemployment was high and there was anger and ill will on the streets. Porirua has, as a city, with support from our Government, invested in public spaces where the community can meet, and where people can enjoy themselves and celebrate the good times.

Waitangi Day is a day of celebration and reflection. Amidst the art, the music, the dancing, and the other performances in Porirua, there were opportunities for reflection. The travelling exhibition Treaty 2 U was packed throughout the day by people finding out more about Te Tiriti o Waitangi. Hundreds visited and studied the exhibitions. Most people left with copies of the Treaty in the English and Māori texts, and with further study material. The great Jamaican singer and philosopher, Bob Marley, whose birthday was, coincidentally, on 6 February, said: “If you know your history, then you would know where you coming from”. He was right. Knowing our history is important for us all so that we can build our nation on the basis of shared understanding.

As I stood watching the fireworks at the end of a great day in Te Rauparaha Park, in a space named after the great local Māori leader, who was one of only two men who signed the Treaty twice, I wondered whether he would have thought then that 166 years later his descendants, the descendants of the other signatories, and a host of later arrivals would still be discussing the document that founded this nation in 1840. Things are good because there is healing in the air. In my own community of Mana, we can see the future of New Zealand writ small. The New Zealand of today is a multicultural nation, where we are beginning to understand and to respect each other. We have plenty to celebrate in New Zealand.

I also congratulate Joris de Bres on bringing the leaders of the Muslim community and Jewish and Christian leaders together with the editors of the Dominion Post and the Christchurch . They showed us that potentially divisive issues can be resolved by people of goodwill listening to each other and respecting different views.

I am very optimistic about our future as a multicultural nation. I think that one of the keys is to develop a society where everybody feels that their unique identity is respected and that they have a place of belonging. That is the politics of inclusion and unity, and it is the antithesis of the politics of exclusion and division that was the hallmark of the 1990s.

As Minister for the Community and Voluntary Sector, I have been very, very humbled to visit many community organisations built on voluntary effort, such as St John Ambulance, and many other community volunteers in our country.

On 13 and 14 March in Auckland the first Pacific Trade Expo will take place. The New Zealand Pacific Business Council has organised it. All 110 stands have been sold; 57 stands from 13 Pacific countries will be represented. The event will bring business, Governments, and communities together, and will deepen our regional connections and relationships.

Yesterday I attended a launch of the Unlimited Potential Learning Foundation, which is a partnership between the Government, polytechnics, and Microsoft. It is a training programme aimed at lifting information technology skills amongst disadvantaged communities. I am proud to be part of this Government. I am proud that we are weaving together strands of economic transformation, looking after families young and old, and continuing to walk tall and build pride in our unique national identity as New Zealanders.

TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe Madam Speaker. Tēnā tātou koutou katoa, tātou e noho nei i roto i te Whare.

[Greetings to you Madam Speaker, and to all of us seated here in the House.]

During these last few days I have listened to some of the debate about the state of the nation. For te ao Māori there is a different view, and in the time available I intend to place before the House just one matter that the Māori Party believes is important to this nation and must be addressed urgently. We go further and offer a solution to that problem—a solution that is practical and could be positive in its outcome for Māoridom and this country.

To put things in context, 166 years ago Te Rarawa chief, Panakareao, told the people at Waitangi: “Ko te atakau o te whenua i riro i a te Kuini, ko te tinana o te whenua waiho ki ngā Māori.” Only the shadow of the land goes to the Queen, but the substance remains with us. What followed was the first Government purchase: the Mangonui transaction. It would not be long before 16,000 acres of Northland land would be awarded to six Europeans, and the remaining 446 acres left to several hundred Māori. It was these sales that led that same Te Rarawa chief to reverse his famous saying by concluding that only a shadow remained, after all.

The Treaty is, and always has been, about an ongoing partnership. I listened just the other night to a collection of speeches pulled together by Hēnare te Ua about Prime Ministers and Māori leaders, and all have the same tenor about their hopes and dreams, based on Te Tiriti o Waitangi. In fact, all spoke of nationhood and a need for all parties to address mistakes made. For our people, we talk about it in statements like: “Kei te Tiriti tōna ake tapu, tōna ake mana, tōna ake wairua, tōna ake mauri.” The Treaty has its own sacredness, its own strength, its own spirit, and its own life force. Many refer to it as a covenant.

The trouble is that the Treaty is generally spoken about only in terms of the English version. There is, in fact, a version written in Māori, which is quite different from the English version, but it gets little press. We will revisit this matter in the future, but it is clear that there have been breaches of a document that was intended to set out how we would live together. The greatest challenge this nation faces is the need for successive Governments to demonstrate a willingness and an openness to respect that contract. The dollar may rise and fall and mortgages may move by half a percent every 6 months, but the relationship between us causes the biggest disruption to the country. We remember the land marches, Bastion Point, and the great hīkoi of 2004.

To address issues around relationships, there is an urgent need to develop a solution that will resolve historical Treaty claims—a solution that achieves fair, timely, and durable settlements and creates a pathway forward for us as a nation. We must address issues of past land alienation and confiscation, get rid of the Crown’s assertion of unconstrained sovereignty, and take action.

The Māori Party is calling today for an independent and immediate review of the settlement process undertaken by the Office of Treaty Settlements. We do this for several reasons. The signing of the Treaty implied that two distinct people were willing to regard and respect the other as a party to the Treaty for the benefit of the nation. One party should not profit at the expense of the other. Each party should honour the other.

The Office of Treaty Settlements currently controls both the outcome and process on Crown terms. Our people refer to them as the thief, the prosecutor, and the judge all wrapped up in one. Fairness demands that the negotiations framework must be agreed to by both parties, upfront. Yet when looking at the issue of settlements the Hon Margaret Wilson, a former Minister, stated: “the Crown does not adopt a full compensation or ‘damages’ approach to redress, recognising that the cost to the taxpayer would be prohibitive.” Well, hold on. What about the grievance? What about justice? It is said that justice delayed is justice denied. We need to face it.

Professor Margaret Mutu suggested that the settlements that have been arrived at are but a fraction of the amount that should rightfully have been paid. The professor concludes that the settlements paid so far are, in fact, 0.06 percent of what they are worth. The difference between what was taken and what can be returned represents a massive contribution by iwi to the national economy. But our people talk about settlements in terms of the land. He whenua muru, he whenua me whakahoki mai. Land taken, land returned. Whatungarongaro te tangata, toitū te whenua. People may perish but the land remains.

I hear a lot of talk in the House about fairness, about the need for one law for all—for justice. So ponder this: is it fair that Ngāi Tahu’s $170 million was 0.01 percent of the $1,192 billion it should have received? Is it fair that Tainui’s $170 million was 0.4 percent of the total value of its claim? Is it fair that the Government is working to a predetermined fiscal cap and that it expects the total value of land settlements to be set at about $1.3 billion? We are talking about the $1 billion fiscal envelope cap.

We remember the policy that was rejected by all tribes when it was taken around the country. Sir Hepi te Heuheu, the paramount chief of Ngāti Tūwharetoa, facilitated the discussion at a national level. The policy of the National Government of the time is now being maintained by the current Labour Government. It seems the policy Māori rejected outright in 1997 is actually alive and well. Māori should have learnt back then that consulting with us is but a farce. A dozen or so hui were held on the foreshore and seabed legislation. Everyone rejected it in its intent and content, but it is still on the books.

The problem is that the benchmark has been set against that cap, and new tribal settlements are gauged against that level. In other words, an injustice created at the start is an injustice transferred to every tribe now and into the future. Will injustice be a durable solution for the next generation? No way. It will come back and bite hard. Think about this. Ngā iwi Māori, to settle 23 claims, were offered half of what was paid out to save Air New Zealand. That is $100 million less than the Government allocated in the 2000 Budget for Skyhawks and frigates.

I would hope that members of Parliament, as representatives of the nation, are fair-minded people. That being the case, we need an opportunity to consider the whole process, from go to whoa. Fairness is about having a transparent process in place in order to have the opportunity to be heard. The Crown has set and controls the process by which iwi representatives are selected to settle the claims and establish the governing bodies. The Crown has a hands-on role in deciding who can speak for the tribe in negotiations with the State itself. This is the sort of approach that has resulted in serious splits in iwi, hapū, and even whānau. The Māori Party is determined to see an end to the sort of “divide and rule” tactic that we are so used to.

If we are committed to moving the shadow of injustice, we must reduce the burden of the process on claimants. A critical part of this is to review the guidelines for ratification to ensure that participation rates are raised and that the issues of mandate and cross-claims are given due weighting. The Crown has made some moves towards acknowledging the real difficulties that exist in this area. The Waitangi Tribunal’s 2002 report, which dealt with claims by Ngāti Haka Patuheuheu, Ngā Rauru o Ngā Pōtiki, and others in relation to the Ngāti Awa claim is useful in this regard. Judge Carrie Wainwright identified in her report that “the Crown did not adequately disclose its policy agenda to the parties affected by the proposed settlement with Ngāti Awa.”

In the interests of fairness and justice one would think it logical that if settlements are to be achieved with tribes that may serve to disadvantage other tribes, where there are cross-claims, then that process will be well-managed, or managed better in such a way as to prevent conflicts. This is not how it works at the moment. Those same issues cropped up again in the case of Te Arawa. Again the tribunal highlighted the glaring shortcomings in the Crown process: “In the case of the Te Arawa mandate, we find that the Crown had failed to adequately identify and address critical issues surrounding the representivity and accountability of the executive council to the kaihautū; and that these were at the core of claimant dissatisfaction.” Some tribes have returned to the tribunal three or four times over issues of mandate, yet still the Office of Treaty Settlements has failed to recognise the problem.

The resolution of grievances and redistribution of resources should be a catalyst to improve Māori economic and social well-being. It would also accrue benefits to the nation. But we have to do it right. An economic report, which was commissioned by the Crown Forestry Rental Trust claims funding agency, concluded that New Zealand would benefit to the tune of $96 million a year if the claims were settled earlier. So some would call for the whole process to stop now in order to allow tribes to reflect on the settlement process, and to have wānanga amongst ourselves, without the threat of being put to the back of the queue. We say the time has come for us to review the whole process, and we ask the Government to consider that notion. Kia ora tātou.

Hon CHRIS CARTER (Minister of Conservation) : Salam alaikum, Madam Assistant Speaker, peace be upon you. I greet you in Arabic with a universal Islamic greeting because pride in New Zealand, in an emerging New Zealand way of doing things, as well as in an emerging New Zealand identity was something the Prime Minister spoke about in her speech. So I am proud to stand up in this House and greet you, Madam Assistant Speaker, with “salam alaikum”, because the Muslim culture in our country, along with a whole range of other cultures in New Zealand society, is shaping a new New Zealand identity. New Zealand is dealing with the realities of being a globalised, multi-ethnic, and multi-religious country.

The Prime Minister spoke of the emerging New Zealand identity, and that is what I would like to speak about today. I am part of a Government that is proud to represent a nation of many languages, many cultures, and many ethnicities. This Government does not regard diversity as a threat; it regards it as an asset for our country. Indeed, diversity, through the increasingly diverse origins of so many New Zealanders, is about building a strong economy. It is about bringing energy and investment into our country. More particularly, it is about building a New Zealand where every New Zealander’s own unique heritage is respected, whether that heritage comes from our traditional and original Polynesian settlers—the iwi who settled in this country some 800 years ago; whether it is the Anglo-Celtic origins of many of those early settlers who came from Britain, Ireland, and Scotland; whether it is the Chinese culture, whose people first settled in our country during the gold rushes, and who have come much more recently in a large wave since the 1990s; whether it is the culture of India; or whether it is the culture of the Middle East. Indeed, the range of ethnicities in our country, as many members of this House will be aware through their constituency work and attendance at functions, is incredibly diverse.

That is a good thing for New Zealanders and a good thing for the future well-being of our country, because the world itself has an increasingly globalised market and a globalised labour force. So young New Zealanders of the future who are comfortable with different cultures, are skilled in different languages, and have an understanding of the cultures that shape those languages will be young people in a globalised world who are enriched, better at seeking jobs—because they will understand the globalised market—and culturally much stronger and more, I use the word again, enriched. That is the way of the future; that is what our planet is evolving into. That is good for our society, because there is an inevitability about it.

National identity is not cultural homogeneity. It is people of different beliefs agreeing on common aims and aspirations; it is people focusing on their similarities, not their differences. As Minister for Ethnic Affairs in this Government, I am proud to be the Government’s voice and its handshake to the many ethnic communities in this country. I have spent 3 years in my role as Minister for Ethnic Affairs, and I have to say that I feel very optimistic about the future of this country. I think that of all the migrant countries on earth—places like the United States, Canada, Australia, and, increasingly, all of the European countries—New Zealand has perhaps the best chance of making it work here, because the basic New Zealand ethos is the sense of giving people a fair go. I detect that in this country there is a willingness by the vast majority of New Zealanders to respect each other, celebrate diversity, be comfortable with difference, and make a multi-ethnic and multicultural society work.

Besides being Minister for Ethnic Affairs, I am also privileged to be Minister of Conservation. The emerging New Zealand identity is not just about people of different ethnic and cultural origins, it is also about people who are passionate about their natural environment. What is it that makes us special as New Zealanders? If we went around this Chamber, around the people who are listening in the Speaker’s gallery today, and indeed around the people who are listening to this debate on the radio, and asked every one of them what is special about being a New Zealander, I suspect that almost all of them would make some reference to our landscapes and to the special places of our country, whether they are the seascapes, the forests, the mountains, or our unique and vast marine environment. They would touch on that, as part of the essence of what it means to be a New Zealander.

They would also probably make reference to the unique species that live in both our terrestrial and marine environments. Why is it that New Zealanders love whales? The question is broader than that: why is it that New Zealanders love the native species that make up our unique natural environment? They love the species not just for their intrinsic value but also because they are about the definition of who we are as New Zealanders. As there is a growing sense of national identity—a sense of uniqueness about being a Kiwi, a New Zealander—it is part of taking ownership of that natural environment and the species that are found there.

So we as a Government have a special responsibility—one that we have embraced with gusto—to protect what is special about New Zealand and our New Zealand environment. Since 1999, when the Labour-led Government came into in office, funding for the Department of Conservation, for example, has increased by 40 percent. We set up the biodiversity funding of $187 million to protect our unique New Zealand biodiversity. In addition, the Nature Heritage Fund, an organisation funded by central government, has purchased quite a lot of unique physical sites on the coastline—and, for example,Birchwood Station in the high country of the South Island—to preserve them as open spaces for all New Zealanders to enjoy forever. That is part of a whole package by this Government, which is about protection of the New Zealand identity, the New Zealand landscape, and the unique species that are found there.

I take my responsibility as Minister of Conservation very strongly. I see myself as having a special burden, if one likes, but it is one that I am happy to carry. It is making sure that we lose no species at all, and that we expend the resources, which, of course, are taxpayers’ resources. It is a sacrifice for the community to give those resources to empower the Department of Conservation to do its biodiversity work and to purchase land for the public estate. It means that funds are taken from other priorities, like health and education, to do that, but this Government really believes that we have a special responsibility about our identity as New Zealanders, about future generations of New Zealanders, and about being special for New Zealanders. [Interruption]

I hear an Opposition member commenting. He is a man who I believe, if I recall correctly from the last election campaign, has a special dislike of cats. I tell the member for Rakaia that I agree with him that cats in the wrong place are not good. They can be a real nuisance in the natural environment.

That touches on pest management. I am pleased that the Prime Minister talked briefly in her speech about our responsibility to deal with biosecurity issues. I am pleased to say that in our work with United Future, in particular, as well as with the Green Party, we are working on that issue to make sure that we do indeed empower ourselves with the ability to look after our unique natural environment.

I see that I have only a couple of minutes left, so I would like to touch very briefly on my final responsibility, which is as Minister of Housing. Social housing is about how a community looks after itself.

Simon Power: Social housing? It’s just housing.

Hon CHRIS CARTER: I hear some chuckles from the other side of the Chamber. I have to say that the measure of a fair society is how it looks after those who are least able to look after themselves. Every developed country struggles with the issues of having social housing and of caring for people who, through circumstances, are not able to afford decent housing themselves. Accidents occur, people lose partners, people get sick—all sorts of things happen in any community. In a modern, developed country, how we look after those people—how we provide the safety net—is a measure of how caring and healthy a society is. European countries, Australia, Canada, and others are well down this path. We are too. I am proud to say that we are a Government that introduced income-related rents for housing. We recognise that different people have different abilities to pay. We recognise that there will always be a need for social housing in any community. We are absolutely committed to every New Zealander having a decent home to live in, because that is an investment not just for now but for the future.

There has been a lot of comment in the media about Mr John Key—a man who, it is said, is after the top job in the National Party. He grew up in a State house. He is a good example of how every family in New Zealand, given a chance, can succeed.

SIMON POWER (National—Rangitikei) : I am not quite sure what is going on in the House this afternoon, but the last two Labour speakers have given community columns about their time in Parliament and how much they are enjoying the local school fairs and what has been happening on the trails of different conservation schemes. This is the opportunity that those MPs should have taken to support the Prime Minister’s statement and to get behind the Prime Minister’s agenda, not talk about curious little things that they enjoy in their electorates, as meritorious as they may be. But members on this side of the House have one message for members opposite who are sitting there, representing Labour, and it is this: Labour owes the New Zealand taxpayer just over $400,000 and it should pay it back. It is as simple as that. There is no doubt that they must have had, at the very least, constructive knowledge of what the Auditor-General proposed in June 2005, as defining the rules, at the very best, as ambiguous. In June of last year, Labour’s pledge card was well and truly signed off, I bet. It was well and truly given the nod by the top brass in the Government. And Helen Clark should immediately offer to reimburse the taxpayers of New Zealand for having used hard-earned tax dollars to fund a campaign that she led the public to believe had been funded by the Labour Party. That is unacceptable.

Helen Clark herself told the public at the Labour Party congress in 1999: My signature is on it. I am accountable for it.” I tell Helen Clark to pay back the money. It is not the Labour Party’s money. It is not the money of the Labour Cabinet. The money belongs to the taxpayers of New Zealand. Members opposite should hang their heads in shame, knowing that they deliberately, or at the very least had constructive knowledge of a rort when they decided to use a pledge card about which they purported to say—and in fact we have been told since—that the same process applied in 1999 and 2002, even when the Labour Party secretary-general had his signature on those cards, authorising them as part of the Labour campaign. Well, we on this side of the House await with interest the return of the Auditor-General’s report. I have no doubt that the Auditor-General’s office is taking this matter extremely seriously.

Brian Connell: So are the police.

SIMON POWER: I hope that they, when they talk to the police, manage to rectify this matter once and for all.

I am delighted to be back in the House after the summer break. We have a leader in Don Brash who is clear and unequivocal about what he wants for New Zealand. We have 22 new MPs who are bringing energy and diverse views to our caucus, and that is to be welcomed. I have to say that it is a great joy to stand in this House and look back at those benches and see familiar faces—including that of Tariana Turia—who are supportive in large of National Party policy, and that is something we are very grateful for.

But one thing that has become absolutely apparent over December, January, and February is that Damien O’Connor is completely out of his depth. This is a Minister who has struggled from the start with the corrections portfolio. It is worth just revising some of the matters that have fallen in his lap since he took control of this portfolio in a way that can be described only as bordering on negligent. We have seen that of 3,000 prisoners tested for drugs in recent months, 17 percent returned positive drug readings. We have seen that at the Manawatū Prison, the local prison guards passed and carried a motion of no confidence in the management of that prison. We have seen a massive budget blowout in the building of prisons throughout New Zealand. It is worth just thinking about that, because that is money that could easily be put into decent rehabilitation programmes, given that the Minister himself stood in this House last week and conceded that those rehabilitation programmes were not working. In fact, an inmate who goes on one of those rehabilitation programmes has a better chance of reoffending than if the inmate does not go on a rehabilitation programme. What does that say about the way the Department of Corrections is working?

In October 2002 the chief executive officer of the department fronted up to the Law and Order Committee and said that to build these four new regional prisons would cost $400 million—at the last count, the cost was $890 million. And when Damien O’Connor took off on his soirée over to the Netherlands and Finland, just before he got his hot little feet on to the plane he dropped the bombshell that it is nearly a billion dollars now.

Brian Connell: How much?

SIMON POWER: It is nearly a billion dollars now. So there is more to come in this prison blowout. I have to say that the answer that he brought back from Finland was not to reinvestigate and make more effective rehabilitation schemes, it was not to bring in early interventions for behavioural difficulties in children who might be heading on the wrong trajectory and ending up in jail, and it was not a victim-centred policy for those people who have been affected by crime. No, Damien O’Connor came back from his overseas junket and says that what we will do to alleviate the prison blowout is to let a whole lot out. We will just open the doors and let out the 30 percent of the prisoners who Damien O’Connor says are no risk to society—despite those prisoners including thieves, those who have committed sexual assaults, drunk drivers, and fraudsters getting around 6 months’ worth of prison time. Let them out! Open the doors, Damien O’Connor says—these people are no risk to society, as he told National Radio last week!

Well, I say to Mr O’Connor that we are not going to stand by on this side of the House and see that Minister pull the wool over the eyes of members in this Chamber. If that Minister were serious about a bipartisan approach to corrections policy, my office would have been contacted. I am sure I would have been invited to sit down with him and have a discussion with him about it. My office was not contacted. No attempt was made to formulate a bipartisan approach to corrections or prison numbers. So that Minister is on his own with a crazy idea when 92 percent of New Zealanders said in 1999 that they wanted longer sentences, better rehabilitation, and better early interventions. They do not want prison doors opened and people told to go for a wander and come back at their leisure, to go and take a job, and to have the weekend off.

I say to Mr O’Connor that the real people who are affected by that policy are the victims of crime. Members on this side of the House believe in victim-centred law and order policy, not offender-centred law and order policy. If the Government were serious about rehabilitating people in prisons, it would be looking at the appalling state of its own programmes in those prisons. That is where money should be invested in a way that is accountable, rather than just disappearing down the proverbial toilet.

I finish by saying that the National Party will hold the Government to account in every portfolio and every area, no matter how big or small, for the rest of this parliamentary term. Those Ministers opposite will feel Opposition members breathing down their necks on every little decision they make. Let me assure Judith Tizard that she will not be able to escape to another luncheon or to another dinner out with people, drinking from champagne flutes, because the portfolio that that Minister has responsibility for—

Hon Member: What is it?

SIMON POWER: Primarily carrying Helen Clark’s handbag. The areas of responsibility that that Minister has will be equally under scrutiny. This party is here to hold this Government to account. The time is coming, I say to Labour Ministers.

Hon JUDITH TIZARD (Minister of Consumer Affairs) : That really was a very sad little speech with its whingeing and whining from the sad old men of the National Party—even the young ones are sad old men.

Simon Power: I raise a point of order, Madam Speaker. If the member is referring to my age, I just want to make sure she knows I am not old.

The ASSISTANT SPEAKER (Ann Hartley): The member knows that is not a point of order.

Hon JUDITH TIZARD: Is that not pathetic? Those members do not know the Standing Orders, either. I want to say to that speaker that my problem at arts functions—which are burgeoning all around New Zealand, as at the New Zealand International Festival of the Arts, which starts this week—is batting aside National Party MPs who have nothing to do except hang around hoping for a free lunch or a glass of wine. They are sad, sad old men—even the young ones and even the women, because that is how they are behaving. They have no policy, they have no beliefs, they do not care about New Zealand, and they are trying to talk down the economy, although this country is in better shape than we have ever seen it.

This Government has delivered an economy, alongside New Zealanders, that has seen us have the lowest unemployment rate in the OECD. What does “Dr Doom” on the other side—all the “Dr Dooms” on the other side—

Anne Tolley: I raise a point of order, Madam Speaker.

The ASSISTANT SPEAKER (Ann Hartley): No, I do not need any assistance. The member will withdraw that. The member knows she must refer to all members by their correct name.

Hon JUDITH TIZARD: I withdraw. Every member of the Opposition does not care about New Zealanders, because the Opposition’s only policy is making multimillionaires richer. This Government works collaboratively with New Zealanders. We work alongside New Zealanders, because we are here for the long term. I just find it astonishing that John Armstrong, after the National Party’s best hit last week, could say Dr Brash still has difficulty thinking on his feet. Dr Brash wonders why he is still leader when he lost so badly in the last election. After that speech made by Simon Power I can see why Dr Brash is still leader. He cannot think on his feet, but at least he can put an idea together. I have not heard any speaker from the Opposition put any ideas together in this debate.

I congratulate the Prime Minister on her speech to Parliament. It was a great speech about where this Labour-led Government believes we are going, what we are aiming for, what sort of country we want to live in, and what we will do about it in the next 3 years. I also congratulate the Prime Minister on yesterday passing the Rt Hon Sir Walter Nash as the second-longest-serving leader of the Labour Party ever. It is an indication of the enormous respect in which Helen Clark is held by this party and by this country.

There was a clear message in her speech about economic transformation. This Government will be working on a strong economy, which we will build alongside all New Zealanders, and we will make sure that every New Zealander can participate in it. We are a Government that believes that all families in New Zealand, young and old, matter. We want all New Zealanders, in their families, young and old, to be working, having opportunity, having security, and able to look each other in the eye and say they have done their best to make sure this country will be a better place for our children and our grandchildren, while also making sure that those who have done the work to build this country get their fair share, as well.

We are working for a unique national identity for New Zealanders. That is not just because we like the arts. We do like the arts; they are intrinsically important, they are about good use of energy, and they are about families and communities and this nation coming together and confronting the things that divide us, reconciling with each other, finding a way forward, and sharing our values. We want to build pride and opportunities in this wonderful country. I congratulate the Prime Minister on getting up and saying that that is what she and this Government are doing. I heard nothing from members opposite about what they would do.

I want to talk briefly about my portfolio responsibilities. I am an Associate Minister for Arts, Culture and Heritage, and if I need to hold the Prime Minister’s handbag, I am very happy to do that so that she can deal with the thousands of New Zealanders who want to shake her hand because they can see the wonderful things that she and this Government have done for them and their children. I have heard many mothers in this country say to the Prime Minister: “Thank you for your arts policies. I think they saved my son’s life.” They say: “Thank you for your film policy, because my son and my daughter have got jobs.” Those young people have got jobs they care passionately about, in new, emerging industries. What does the National Party want? It wants to send them back to coalmines. It wants them to line up outside post offices to get make-work jobs.

Jill Pettis: But there aren’t any more.

Hon JUDITH TIZARD: But there are not any post offices any more; they are called post shops. Dr Brash should get with it.

This Government believes in the arts. We believe in them because they are good and they are about reconciliation and making a way forward. They are about jobs and industries. They are about New Zealanders having the pride and the ability to stand up for the things their ancestors came to this country believing in, and came here to build. I am pleased to have a portfolio in that area. We are training young people to be good business people in the arts, through the Pathways to Arts and Cultural Employment scheme. I am proud to be the Associate Minister of Commerce, where I am working on intellectual property issues so that New Zealand artists and creative workers can benefit now and long term from their unique and original ideas.

I am proud to work, as the Minister responsible for Archives New Zealand and as Minister responsible for the National Library, on the digital content strategy, to make sure not only that we have these wonderful collections but also that New Zealanders and people around the world can access them. Indeed, only last week we signed an agreement with the national library of the People’s Republic of China. Why? It wants to work with our National Library because it is very interested in the work we are doing to make that content available to all New Zealanders. The Chinese love the work we are doing. Later next month, we will make a similar agreement to give New Zealanders access to libraries in Australia. I am really proud of the work we are doing to make sure New Zealanders have access to their own history and the stories they need in order to go on working in a whole range of areas.

I am proud to have spent some of my summer at the opening of The World’s Fastest Indian, which has just overtaken as the biggest-selling New Zealand film ever. I am delighted that the story of an astonishing, energetic, bloody-minded mechanic from Invercargill has overtaken a story of domestic violence. New Zealanders have many, many proud stories such as that that we will tell in film and that will be seen all around the world. I hope everyone in this House and everyone listening has gone to see the film . It is a great film and I congratulate Vincent Ward on producing that amazing story of early New Zealand. He pulled no punches about the Land Wars; he pulled no punches about the pain and the difficulty that many New Zealand families and communities had in forging a shared identity back in the 1860s. As we have heard from other speakers, this goes on. I look forward to a fabulous film by South Pacific Pictures about a Fijian family in Mount Roskill, and to , which is the story of a Samoan - New Zealand family in Grey Lynn. I look forward to New Zealanders getting good, high-paying jobs, and winning awards at the Golden Globes and the BAFTAs for new films, because it is not just Peter Jackson with , or Vincent Ward, or Roger Donaldson who are doing such astonishing things; lots of New Zealanders are now using digital technology, in particular, to do all sorts of smaller projects.

Our music industry is absolutely astonishing. I congratulate the Music Industry Commission on announcing the Outward Sound grant, which will assist New Zealand music and musicians internationally.

We are doing extraordinary things in the area of transport, particularly in Auckland. I am proud of the fact that the North Shore busway is already such a huge success. People are noticing less congestion because of the North Shore busway. It is a simple project, a major, huge project, which is being delivered on time and on budget for the benefit of all Aucklanders. It has the upside of not only reducing congestion but also reducing vehicle emissions and improving air quality.

I am really proud of what this Government has achieved in 6 years. I am really proud that the Prime Minister stood up in this House and told us what we are going to do over the next 3 years. I want to quote again from Dr Brash. He said Parliament is puerile and he does not believe in coming in here. We can see why he does not. It is because he performs so badly. If the Opposition cannot bring some policy and some argument to this House, then we will be the Government not only for the next 3 years but on and on and on.

SUE BRADFORD (Green) : First I would like to tautoko the words of Te Ururoa Flavell, who spoke just before in the House about the need for all of us to understand and support the real meaning of Te Tiriti o Waitangi Māori version. It was a very sound, coherent, and deeply thought-through speech that I think everyone in this House should listen to, if they were not here to hear it immediately.

The Prime Minister in her statement to Parliament last week at the start of the 2006 session talked a lot about our nation being on a journey from an old economy to a new one, about improving living standards and services, and about building pride in our national identity. That is all good stuff, if somewhat platitudinous, but where I think the Government is fundamentally missing the boat is in having any sense of urgency about the crises that are going to confront us sooner rather than later in relation to peak oil, climate change, and the impacts of the increasingly insecure and war-torn external environment on our own economy and society here.

The Values Party and, later, the Green Party have been trying to get their messages across in this country about the urgency of the situation since the early 1970s. All too few have believed us or have wanted to hear us. However, we are now in a situation in 2006 where we are fast approaching a point of no return locally and for our planet. This Government, alongside any and all Governments around the world, needs to find its focus and to do everything it can to help to future-proof our country against the coming shocks. That impacts on all aspects of our society and economy, not just on the most immediately visible areas like issues around Kyoto commitments, biosecurity, waste reduction, and conservation, but also in other less obvious but equally far-reaching areas.

For example, one of the two areas of closest cooperation the Green Party reached with Labour, following last year’s election, was with regard to the Buy Kiwi Made programme, which I am now working to implement on behalf of the Government. I would like to thank Labour for its support for that initiative, originally that of our late co-leader, Rod Donald. Along with colleagues and many interested people in the broader community, over the next 2½ years I am determined to extract the best possible outcome from our agreement. I have already been in discussion with many key stakeholder groups, including businesses, manufacturers, and unions. There is a stunning awareness and commitment that crosses traditional political, ideological, and sectoral lines to try to achieve a common goal: a major culture shift in how we all think about buying goods and services produced in our own country.

The need for that culture shift does relate strongly to the urgency with which we need to become less dependent on imports brought here by transportation, the cost of which will just keep rising, and to the need to maintain and develop whatever infrastructure capacity we can on our own shores in this isolated little country of ours. That is why the current imbroglio around Air New Zealand’s heavy engineering and aircraft maintenance capacity is so unfortunate. Business and Government should be doing everything they can to keep that capacity onshore, without expecting employees to bear beyond reason the brunt of changing conditions. I continue to hope that a way will be found through this issue that keeps as much capacity as possible here without an unreasonable sacrifice of jobs, wages, and conditions.

The Government is—having made a deliberate choice some years ago—the majority shareholder in Air New Zealand, at 82 percent. I do not believe that there is some magical dividing line between its role as a majority shareholder in a business critical to our economy and its role as a Government. As I asked in the House earlier this afternoon, does the Government really know what Air New Zealand’s long-term strategic plans are? Does it have any opinion on the fact that those plans for business transformation seem to revolve around cutting costs at the expense of workers’ jobs, wages, and conditions, and at the expense of losing a big chunk of our aircraft maintenance capacity as a country? I hope that this Government will do everything it can not only to ensure the commercial viability of Air New Zealand but also to retain and develop its public-good components, in terms of the need to keep jobs and infrastructure here before peak oil really hits home.

The Green Party’s commitment to greater self-sufficiency, in the face of the fact that oil is running out and of other looming environmental catastrophes, means that we want to see as many jobs as possible kept in this country, and we want those jobs to pay wages that people can actually live on—hence our ongoing and total support for the campaigns to raise the minimum wage to at least $12 an hour immediately, abolish discriminatory youth rates, and work for more secure working hours for those in insecure part-time and casual work.

I would like to take this opportunity to commend the Unite! union in particular, but also all the other unions and community organisations involved in current campaigns to improve pay and conditions for all those who work so hard for so little recompense in our low-wage economy. I look forward to the debate on my member’s bill to abolish discrimination in youth pay rates, which will happen here tomorrow night, and to progressing it through the House over the months ahead, with the support of a number of parties here. It is high time those of us with good, and even high, salaries and conditions spared a legislative thought for those who are working their hearts out for wages that are way below survival levels.

Alongside the Green commitment to try to raise the incomes of the employed workers who have the least, we remain committed in this term of Parliament to achieving a welfare system in this country that actually provides a sufficiency of help to those who need it most. We need an approach to income support that means it comes in at a level that enables beneficiaries and their children to survive with dignity, and with neither the further harassment and intrusions on privacy nor the reductions of actual benefit levels that I fear may happen as the result of intended Government reforms to the welfare system. The Prime Minister talked in her speech about the fact that the Government will be stepping up its work on the new benefit structure. It has been saying that for a number of years now, and I look forward to hearing more sometime soon about the detail of how it will actually work. I asked the Minister, the Hon. David Benson-Pope, last week whether he could tell us more about those details. But, as with previous questions, the answer is deferred indefinitely.

Given what has happened with regard to the changes from the special benefit to the temporary additional support system, which is one aspect of the reform about which we do have some information, I am quite apprehensive about what the move to the single core benefit will actually mean for beneficiaries and their families, especially in what will almost inevitably be an era of rising unemployment. I just hope that Mr Benson-Pope was correct when he assured me last week in the House that no beneficiary will lose out under the new regime. We will see whether that is the case—as I believe, in fact, that the impact of the loss of the special benefit alone will see a lot of people lose income support that they previously would have been entitled to.

When we in the Green Party consider the whole raft of possible ways that we might do more to future-proof our country against prospective economic and environmental collapse, one of the key solutions we see is to genuinely localise the production of, and access to, goods and services as much as possible in the communities where we live. That brings me to conclude today with a very local issue—that of the hospital in Kaitāia, where I currently live.

I believe that the Government is making a big mistake in the health area by not re-examining its overarching policies with regard to the provision of hospital services in rural and provincial New Zealand. The people of Kaitāia continue to fight a rearguard action in a long war of attrition for the return of 24/7 surgical cover and other services to our local hospital. The Government and the Northland District Health Board continue to think it is OK that we transfer hundreds of patients a week by road at personal expense, or by ambulance and helicopter at public expense, from a vast area of the far north to Whangarei Hospital. This is at a time when Whangarei Hospital itself cannot cope with its patient loads, and queues grow longer by the day. From a commercial as well as a public health point of view, would it not be better and make a lot more sense to restore just the basic services, at least, to Kaitāia, allowing Whangarei to do its job better for the people further south, rather than hoping that somehow the problem will go away—that the health of the people in this low-income district may miraculously improve, or that the population will suddenly decrease rather than increase, as it is doing at the moment?

Many people living in the far north, from the Mangamukas to Te Hāpua, cannot afford the long trip south for basic hospital treatment. Hundreds of thousands—ultimately millions—of dollars are being wasted on helicopter and ambulance fuel and overheads. In the slightly longer term, and in the face of peak oil, it would make a lot more sense for the district health board and the Government to admit that they have taken a wrong turning on this issue, and to join with the local community to restore basic services to one of the most far-flung districts in the country. Along with three fellow Northland MPs, including my colleague Hone Harawira, and John Carter from the National Party, I took part in a public meeting on this issue in Kaitāia last Friday. I can assure the Minister and the district health board that the local people will not give up on this one, and nor will the Green Party. In every part of the social, economic, and environmental life of this country, the Government should be working to rebuild and develop local production and services. It is at the peril of all of us, from the far north to the deep south, that we ignore that imperative at this critical juncture in the history of the world.

JILL PETTIS (Labour) : I always appreciate listening to Sue Bradford’s speeches, and that was a good one. [Interruption] Well, I have said that before, and I will say it again: I always enjoy listening to Sue Bradford’s speeches.

That aside, one of the things that happens around here occasionally is that one has to pinch oneself to check that what one has heard is correct. I am not referring to Ms Bradford, at all. One of the things I have had to pinch myself about a bit lately is this new-found friendship between the National Party and the Māori Party. I guess they are working on the principle of “my enemy’s enemy is my friend”. Those of us who were not born yesterday know exactly what is going on there, despite the racially divisive comments that have been made by National members for many years. This is just after an election—that is what people say just after an election instead of just leading up to an election.

I am very proud of the Labour Government, because it is a Government that wants to move New Zealand forward on a journey to being a far more prosperous, dynamic, and secure nation. We know that working together in the interests of everybody is in New Zealand’s best interests. We know that we need a country that produces high-value goods, and certainly in provincial New Zealand we know that adding value to our goods is the way towards economic prosperity for all New Zealanders.

One of the other things about which I am particularly proud of the Labour Government is our arts, culture, sports, and music policy. That is cutting-edge work that is being done in New Zealand, and I am so proud of our growing international reputation in the whole of the arts field. The other thing that is really important to me is that, under Labour, New Zealand will remain nuclear-free.

The district of Wanganui, which is the area where I was born and raised and am very proud to say I come from, has had quite a rapid transformation in its economy. On 26 November—one month after the local government elections, by coincidence—a report was published in our local paper stating that the Wanganui economy is a five-star economy. One does not often see headlines like that in Wanganui newspapers, but I was most certainly delighted to see that. The ASB/Main Report Regional Economic Scoreboard stated such fantastic statistics as Wanganui’s unemployment level being at the lowest in 23 years. That is very good for Wanganui and very good for its people.

The new Wanganui District Council commissioned a report to be carried out by Business and Economic Research Ltd, a very reputable and reliable research company, and that report was published 5 months after the local body elections. The comments from it are absolutely stunning, and I am delighted to see those results. The headlines said that Wanganui is booming. Those kinds of headlines are good, because it means that people are benefiting. The Wanganui district GDP per capita growth at 5.2 percent is higher than the national average of 2.8 percent. Employment growth in Wanganui is 3.3 percent, which is very good for all of Wanganui.

David Bennett: What’s your population growth?

JILL PETTIS: No, the population growth is not that great—I acknowledge that. Provincial New Zealand is feeling a slight decline in some of its population figures. There is no doubt about that, at all. The member is correct.

But central and local government spending has been rising in the last 4 years, so the statistics in Wanganui are fairly consistent with that trend of increased spending. The Labour-led Government has invested heavily in Wanganui, and one of the areas in which we have invested with particular benefit to our local business sector is that of business grants approved in 2005. Business grants worth $2,294,799 were approved. That money goes directly into the pockets of those businesses and is then transferred into the pockets of employees.

Government investment in Wanganui is significant, and there has been an upward trend in that spending for some years. The main areas of earnings in our GDP in 2005 were in health services, with $75 million—directly and clearly money from central government—education with $50 million, and government administration with $46 million. Other categories of expenditure in this area were defence and community services.

One of the strongest performers in employment in Wanganui was the road and bridge construction industry. An extra $16 million was spent on transport in the Manawatū-Wanganui area in 2005, and of course we all remember the significant contribution of funds made following those disastrous floods in Wanganui in 2004. That increased spending—[Interruption] Well, they will have to get up early to beat me, so I will just carry on. Maurice, your voice is just not loud enough—

The ASSISTANT SPEAKER (H V Ross Robertson): The member will use the member’s full name, please.

JILL PETTIS: Mr Williamson should keep sucking those Throaties.

One thing that is particularly pleasing to see is the increase in employment levels in our region. Fifty-one percent fewer people are on benefits in Wanganui—that is a drop in benefit numbers across the board. The greatest drop is in unemployment—

Hon Harry Duynhoven: Less than half.

JILL PETTIS: That is quite right, I tell Mr Duynhoven. The greatest drop in benefit levels is in unemployment levels, which is benefiting families right across the board. Wanganui lost proportionately more jobs than any other district in New Zealand in the 15 years to 2001, so that increase in employment levels is fabulous for our local area. Not just the city area has benefited but also the larger region, because South Taranaki unemployment benefit numbers have fallen by 17 percent.

Government investment in Wanganui has also been significant in recent months. In February it was announced that $3 million would go towards the Universal College of Learning, and $112,000 was given by the Ministry of Youth Development to assist with a project whereby young people would be able to develop their own youth centre. That is good funding for youth. An extra $100,000 went to the Wanganui District Council’s roading budget because of a subsidy increase that went directly to the council. In relation to tourism, $516,000 extra was given to the Ruapehu District Council as part of assistance to deal with the growing number of tourists that smaller towns throughout New Zealand are experiencing. Schools operations grant funding is up by nearly $3 million, which has a direct benefit on future educational opportunities for our young people.

In the area of early childhood education, $50,000 went to Wanganui, $15,000 went to Pātea, and late last year $284,000 went to Mataroa in Taihape, which is not in my patch but is certainly very close by.

One of the schemes of particular benefit for older citizens who live in our area is the rates rebate scheme, whereby 27,400 people in Wanganui-Taranaki who receive State-funded superannuation will directly benefit from the rates rebate scheme. Our senior citizens who live in State houses will also be $35.28 a week better off than they were under the previous Government because of the income-related rents policy that the Labour Government brought in. The comments from the National Party members when the Minister of Housing used the term “social housing” indicate that the Tories clearly do not understand that concept, or how important social housing is.

There has been huge investment and a huge partnership between this Labour Government and the rest of New Zealand. I am proud of that partnership, and of the very real, tangible benefit it has brought to New Zealand.

TIM GROSER (National) : As I have listened to the speeches from the Government, from the Prime Minister’s opening comments through to what we have heard today, I believe that it is becoming palpably clear that this Government has run out of soft options, and that that is beginning to tell—it is beginning to show. It has run out of soft options in terms of underlying ideas, it has run out of soft options in terms of its internal political arrangements, and, most important of all, it has run out of options in terms of economic management. It has no real vision as to how to lead this country and discharge the responsibility it asked the New Zealand electorate to give it in the course of the last election.

Let me start with the level of ideas, and I want to pick a couple of examples of what we have heard in the last 2 weeks to make my point. First of all, the Minister for Economic Development on the subject of the New Zealand exchange rate—and I will come to the economics of that soon—said to the New Zealand Herald on 17 February: “In fact, I hope and expect that in the medium to long term the dollar will be higher than it is now.” In a moment we can deconstruct the economics of that, which are a little more complex than the Minister appears to realise, but I particularly liked the immediate reaction of the Chief Executive of Business New Zealand, Mr O’Reilly, who was asked to give a response, given that many of his members are suffering from a combination of an obvious slowdown in the economy, high interest rates, and, if they are in the traded sector—the import-competing or export-oriented sector—that over-valued exchange rate of ours, and was hoping to see at least some signs of recognition from the Minister.

When asked for his view Mr O’Reilly said he thought the Minister’s comments were probably—and I think this is a wonderful word—“aspirational”. Now, the word “aspirational” is of course straight out of a speech and text from Yes, Minister—the type of word that an important lobbyist such as Mr O’Reilly, or a senior official, as I was until I entered this Parliament, uses when he or she wishes to describe the Minister as barking mad, but simply cannot afford to say that in terms of their ongoing relationship.

Let us examine the economics of that. What I imagine has happened is that we are in the phase of this Government when it has to start defining problems it has no means of dealing with, as solutions, and I imagine that the Minister has received some type of briefing paper from Treasury or the Ministry of Economic Development that will have stated something along the following lines: “Under certain circumstances”—and they may even have used “ceteris paribus” if they were very unwise, and we do not know whether the Minister has had the benefit of a classical education—“an appreciating nominal exchange rate and an appreciating real exchange rate may, in fact, raise living standards.” Now this, of course, is unquestionably correct. But there are a set of mightily important conditions behind the phrase “other things being equal”.

Let me explain the point a little bit more deeply by reference not to economic theory but by a comparison between Switzerland, where I spent 9 years of my life, and New Zealand. So we have the real Switzerland in the Northern Hemisphere, and this country, which has from time to time aspired to be the “Switzerland of the South Pacific”. Of course, back in 1950 we and the Swiss were third equal in terms of per capita income levels. Since then they have left us in their dust. Things have improved a little bit because of fundamental economic reforms, not the sunny election of the Helen Clark Labour Government in 1999. But we still have a long way to go.

The Swiss have left us in the dust because of three principal factors. First, throughout the 1960s and 1970s, Switzerland, unlike New Zealand, and, indeed, most of the developed world, had inflation under relatively strong control; second, it had a growth rate of around 2 to 2.5 percent—not much above the OECD median, but about twice as much as our own growth rate over that period; and third, it had an appreciating exchange rate. The question is: why could Switzerland support an appreciating exchange rate? It is because Switzerland, unlike New Zealand, is an export machine. Some real structural weaknesses in agriculture aside, it has a set of financial services companies, and engineering companies that produce consistently large current account surpluses. Under those conditions an appreciating exchange rate will, indeed, raise living standards, and has indeed raised them.

But I can see what has happened. This is a classic case of a little learning being a dangerous thing. The Minister for Economic Development, who should be deeply concerned about the imbalances facing the New Zealand traded sector, and deeply concerned to find long-term solutions to New Zealand’s continual incapacity to pay its way in this world, grasps hold of this straw like a drowning man and comes out with this frankly absurd statement that he wants to see the exchange rate even higher. It is absurd not in terms of some idealised set of circumstances, but utterly absurd in terms of the underlying situation facing this country, this Government, and his ministerial responsibilities. I have an analogy in mind. My youngest daughter has just turned 7. I could say that one day I hope she may win the Nobel Prize in mathematics. But there are two problems with this. One is that there is not a Nobel Prize in mathematics, for fascinating reasons better explained over a drink.

Hon Maurice Williamson: Make it a white!

TIM GROSER: Yes, it is a case of cherchez la femme, exactly! The second reason is that before I even start to talk to her about such aspirational ideals I really want to make sure she has nailed down her eight-times table. That basically is the position of the New Zealand export economy and the Minister’s ministry. There are some fundamental things that have to be done to promote a business-friendly future for this country, and until this Government starts to grapple with the real next reform agenda, to talk about an appreciating exchange rate is dreaming in nana land.

But the Minister is not the only person who I think has recently indicated the poverty of ideas of this Government. My colleague Mr Power was on the back of the Minister of Corrections on this rather naive view that he brought back from the Nordic countries, so he looks at our incarceration rate—and let me say I find the fact that we have the second-highest incarceration rate after the United States a shocking issue facing this country, one that we should be trying to develop bipartisan and constructive long-term solutions to, but simply letting go a third of the prison population to solve it shows that this Government has simply run out of ideas and is clutching at straws. In fact if we put these two creative thinkers together, the Minister for Economic Development and the Minister of Corrections, they might even come up with the right solution to our current account deficit, which would be: “Why don’t we label exports ‘imports’, and imports ‘exports’, and there we are, we have a current account surplus?”! I mean, I am sorry, but we need some higher-quality thinking out of people who are responsible for New Zealand, rather than these dimly understood phrases from our Ministers.

Secondly, in terms of economic management, I am just staggered by what the Prime Minister gave up as her vision for New Zealand. First of all, in terms of the political reaction to it, let me quote, for example, what might seem on one level a public relations triumph for the Prime Minister. For example, the Employers and Manufacturers Association (Northern) Inc. congratulated the Prime Minister on putting the emphasis first and foremost on business success, and the Auckland Chamber of Commerce stated: “The language is right and Government’s intentions are very clear and believable,”. There is only one problem; I do not know whether to put the emphasis on “intention” or “believable”. The point here is that what the Prime Minister has been saying is exactly what she said in her Knowledge Wave 2001 conference, which I have here, about economic transformation. It is exactly the same message that she gave about infrastructure before she had her personal epiphany last week in her Prime Minister’s statement—suddenly realising that something had to be done. What we will hear more of from this Government is nothing more than the same rhetoric, but without the political capacity to deliver. I am afraid that I have to reach for that cliché to sum up my view of the next 2 years if the Government can survive as long as that: this Government, yes, it can talk the talk, but I am sorry, it does not have the political capacity to walk the walk.

RUSSELL FAIRBROTHER (Labour) : After listening to that speech, members of the public who are listening to this debate will be desperately hoping that this Government lasts another 2 years, if that is the quality of analysis that is on offer from the Opposition. When they extrapolate back to this debate on the Prime Minister’s statement, which has really emerged as a leaders’ debate, we can see how to judge the Leader of the Opposition. One judges a leader by how strongly the foot soldiers can follow the party line. Either the foot soldiers of the National Party are following the party line very seriously, which really suggests that they are capable of double standards, or there is mayhem among the foot soldiers.

We just need to look at a recent example in Hawke’s Bay—on Thursday and Friday, in fact—which was referred to today by the Minister of Immigration during question time. Craig Foss, a money speculator who has turned into a vote speculator, decided to take on the judicial system by way of a press statement, because he realised that the only way to get known in Hawke’s Bay and to retain any standing, having ridden here to Parliament on the coat-tails of the Exclusive Brethren, was to try to hog the headlines. After 5 months he is becoming increasingly desperate to make sure he gets headlines. So on Thursday he published a press statement that described the arrest of 16 illegal immigrants as lacking in common sense and foolish. Of course, the judge, having read those comments, locked those people up, remanded them in custody, and ordered they not leave the cells until they were deported from New Zealand.

Craig Foss not only took a cheap shot at the Government, but he has also brought into question the judgment of the judiciary. Is he saying that Judge Watson—Richard Watson—was, in the Hastings District Court last week, lacking in common sense? Is he saying that was flawed judgment? Is he really trying to tell the populace of Hawke’s Bay and, in fact of New Zealand, that an experienced District Court judge who has been sitting on the bench now for about 12 years—with an outstanding reputation in practice—is a man who is lacking in common sense? The alternative could be, of course, that the one law for all mantra, which is one that appeals, of course, to the Exclusive Brethren—who choose not to vote but just to subsidise some very unsavoury practices—only applies when one wants it to apply, and is put to one side when one does not want it to apply. So when, after those 16 people were arrested because they had been here illegally, that man Craig Foss rushed off to the media and said the arrests lack common sense and surely those people could have been allowed to work, in breach of the law, we wonder where the leadership of the National Party is on the mantra of one law for all. We know where that leadership is, and I will come to that in a short minute.

The third most important message that the actions of one Craig Foss gave was that alluded to by the Minister today. It is that there is a desire by the National Party to drive down the wage rates of unskilled or low-skilled workers in New Zealand below decent standards, down to the standards of Viet Nam, India, Pakistan, and other countries that Craig Foss clearly feels we should emulate when it comes to wages, whereas this Government, as the Prime Minister said at the opening of the debate, is striving to lift the wage economy to a standard we can all be pleased about and have some pride in.

We can see where Mr Foss is learning his practices from—practices that he may one day live to regret and that will upset those people of moral fortitude in the Hawke’s Bay. We have heard repeatedly, from experienced members of the National Party, the use of words that suggest corruption and rort, and terms that should not be allowed in this House but that are being waved around freely. National Party members are confusing two different concepts—and deliberately, one might say. They are accusing the pledge card that came out of the Prime Minister’s budget of being a party expense. The pledge card has been funded from the leader’s budget for the last three elections—that is 9 years. There was not one murmur of any sort of corrupt practice until someone suggested that the matter should be referred to the police. No finding has been made of any bad or illegal practice, and, of course, there will not be any such finding.

But, of course, the argument is not really about the Labour Party; it is about the National Party trying to create a smokescreen for its own practices, which fall foul of section 214 of the Electoral Act 1993. Section 214B(3) defines what may be a corrupt practice. It states that any person who “… pays or knowingly aids or abets any person in paying for or on account of any election expenses any sum in excess of the maximum amount prescribed by this section is,—(a) if the act is done with knowledge that the payment is in excess of the maximum amount prescribed by this section, guilty of a corrupt practice;”. And what do we have in the National Party? [Interruption] Yes, this is embarrassing; members are lifting the volume. They are trying to hide behind a smokescreen. Those members should vent their lungs, because this is important. When the National Party spent up to the maximum on broadcasting and did not include GST, its members tried to say that they did not realise they had to pay GST. But what did the High Court find in 1988? It was reported in the of 1988 on page 77 that payments must include GST for the purposes of the Electoral Act.

Since 1988 it has been declared law that advertising costs include GST. That is one of the aspects that got Wyatt Creechinto this House. Every National Party member who supported Wyatt Creech would have read that judgment—as would National’s lawyers. National members cannot come to this House and allege corrupt practice, when they know what they are trying to cover up: a wilful breach of section 214 of the Electoral Act. It has been settled law since 1988 that payments attributable under the Act must include GST. Where is all the bellowing now?

David Bennett: It’s our money.

RUSSELL FAIRBROTHER: “It’s our money.”, says “Shylock” over there, turning the other cheek. Of course it is the New Zealand public’s money. That is what the National Party is worried about, because it is hiding practices that clearly breach the law. You can only argue against that by creating a smokescreen, in the hope that the police will say that there is too much going on and that they will not prosecute. That is the only defence you have, and your legal team will have advised your leader that that is the only possible defence.

Anne Tolley: I raise a point of order, Mr Speaker. The member on his feet, despite your earlier warning, is continuing to bring you into the debate, and I do not think that he should do that.

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the member for that. I had noticed it. The member was quite passionate in his debate, but I ask him to be careful about that.

RUSSELL FAIRBROTHER: The National Party is guilty of an egregious offence under section 214 of the Electoral Act, because it has known since 1988, from one of its own cases, that GST is payable on election expenses, including broadcasting. The Act states that if a party knowingly exceeds those expenses then that is a corrupt act—signed, sealed, and delivered. The National Party’s only defence against that, as its high-priced doctorate legal team will be telling it, is to cause so much confusion that the police will say to the National Party—the leaderless National Party—that they regard it as a trivial matter. National members think that if they create enough confusion, then hopefully the issue will go away and they can live to fight another day.

So we will watch with eagerness the way the National Party deals with section 214B(3) of the Electoral Act. We can already see the electoral returns of some of its other foot soldiers. I of course refer to the property speculator—now a votes speculator—Chris Tremain, the member for Napier. Following the Bob Clarkson petition, which has outraged many people who have read the law for many years on the issue, Chris Tremain has decided to omit from his return matters that previously would have been included and driven his return to in excess of $20,000.

The interesting thing about that return is that the law and order policies of the National Party have been subsidised by supporters of the Sensible Sentencing Trust, so much so that—

Bob Clarkson: I raise a point of order, Mr Speaker. I am a little offended. Three judges in the High Court made a decision on what I spent, and they decided that I was correct.

The ASSISTANT SPEAKER (H V Ross Robertson): That is a debatable issue, and the member is quite entitled to take a call when the occasion arises.

Bob Clarkson: The member is saying it; why can I not argue about it?

The ASSISTANT SPEAKER (H V Ross Robertson): I direct the member to Speaker’s rulings 36/4 and 37/4, which are to do with misrepresentation. I suggest that the member look at those Speaker’s rulings and also at Standing Orders 106(1) and (2).

RUSSELL FAIRBROTHER: The member is probably getting hot from sitting down, and we know the problem that the member has with heat when he sits down for too long. He is probably airing the areas that need to be aired from time to time.

I conclude my speech by referring to the poverty issues that exist in Hawke’s Bay, which are being relieved by the very, very thoughtful Working for Families package that comes into effect on 1 April. Hawke’s Bay has some of the saddest poverty levels in the country. That is revealed by the district health board analysis of last year, which showed that the district health board has some of the worst health statistics in New Zealand. They arise because, on an objective analysis, being on a benefit is a status of poverty in New Zealand. The poverty study of 1998 described poverty as being applied mainly to beneficiaries and to perhaps 80 to 85 percent of New Zealand’s Māori population. Working for Families is a celebration of the end of poverty, which was institutionalised by the previous National Government during the 1990s. I am delighted that the package will come into force in New Zealand and, in particular, in Napier on 1 April.

The ASSISTANT SPEAKER (H V Ross Robertson): Just before I call the next member, I advise members of the House that the New Zealand First members have split their call and will get a bell at 1 minute.

Hon BRIAN DONNELLY (NZ First) : It is probably a blessing in disguise that this debate is nearing its finality, and the previous speaker’s contribution is a perfect example of why. Throughout this debate National MPs, virtually to a member, have maintained the monotonous refrain of slamming Labour for using taxpayers’ money for its pledge card, and with feigned indignation have demanded that Labour pays back the money. Labour MPs have retaliated by claiming that National had done the same, and that it did not include GST in its returns, and have thrown in the Exclusive Brethren’s involvement for good measure.

But the reality is that the only conclusion any listener to this debate could draw is that both—and I mean both—the two old parties, which between them have almost 80 percent of the members in this House, continue to treat the taxpayer with cynical disdain. Between the two of them those parties have actually written the rules for expenditure, and when they break their own rules they both claim that the rules are unclear. I leave it to Joe Citizen to work out what is really going on there. But I shall start 2006 in the same vein as I plan to proceed for the year, and that is positively—to look at some positives.

The first comment I wish to make is to congratulate Toa Fraser on the success of the film No. 2. I do so not only in my role as arts and culture spokesperson for New Zealand First but also because I have a personal connection. I grew up next door to No. 2—or No. 55 to be more exact. The State house I grew up in in Mount Roskill was right next door to the Frasers—Toa’s grandparents, father, uncles, and aunties. Those were the days of pepper-potting policy, and all I can say is that there was a very amicable, friendly, neighbourly relationship between the Frasers and the Donnellys. Indeed, the only tut-tutting I ever heard was when the Fraser men prepared the chickens for Christmas. They evidently chopped off their heads and let them run headless around the backyard. My mother did not think that was quite the right thing for suburbia. I never witnessed the spectacle but spent the lead-up to Christmas in the next few years trying to look over the fence to find out when they were killing the chickens. My brother remains close friends with Toa’s father, who, for those of us old enough to remember the first few years of black and white television, was one of our first pin-up newsreaders, a man by the name of Eugene Fraser.

My second bouquet is offered to Karen Sewell, acting chief executive officer of the New Zealand Qualifications Authority. It is not news to those from the last Parliament that the select committee that I chaired had a fair bit to do with the New Zealand Qualifications Authority, and I have to say it was not an organisation that inspired one with confidence. Moreover, I believe that the organisation had got itself into such a defensive role that it was going to be very difficult to analyse its own errors and fix them up. It is therefore a credit to Karen Sewell that she seems to have very quickly changed the culture of that organisation in respect of the National Certificate of Educational Achievement (NCEA). The year before last, NCEA was a dog’s breakfast, and this year NCEA seems to have gone pretty smoothly. The fact that subjects like agriculture, horticulture, and technology showed variations in standards is explicable—the first two because of the small number of students and teachers involved over the years, the latter because of the relative newness of the area. The important thing is that the New Zealand Qualifications Authority recognised quickly that the variations were too great, publicly acknowledged this, and moved to do something about the problem. This is a credit to the New Zealand Qualification Authority and, most especially, a credit to Karen Sewell.

The final point I want to make is this. I have just enjoyed a fantastic Christmas break; the weather was great, the fish were biting, and there were opportunities aplenty to meet up with friends and family. As we caught up with old friends, ranging from crusty old farmers in the far north to business people and professionals from Auckland, everyone had the same message: “You guys in New Zealand First did a marvellous job in your post election negotiations—good on you.” The message was consistent: “Those additional frontline police are going to make a huge difference.”, or: “An extra $10 a week will really make a difference to what I can do as a pensioner.” The praise went on and on. People I had never seen before came up to me in the mall in Cameron Street in Whangarei and thanked me for the gold card. People I knew to be true blue voters congratulated New Zealand First on ensuring that the Greens and the Māori Party were kept out of the Government. People who have always advocated ACT policies shook my hand and said: “Thank God you saved us from another election before Christmas.” Then there were those who said that Don Brash could try to pinch New Zealand First’s immigration policies, but that we were actually doing something about immigration problems.

New Zealand First is a non-aligned party of the centre, and I hope that one of the outcomes from the last election is that the media may have realised that this is the case.

PETER BROWN (Deputy Leader—NZ First) : I would like to commence by assisting Bob Clarkson. I can understand his frustration—somebody said something about him, he did not agree with it, and he does not have the opportunity to correct it. But I say to Mr Clarkson that as I recall, the judges determined that he spent $18,000-plus whilst he had told them when he appeared that he spent $10,000. That is an error of 80 percent.

Bob Clarkson: I raise a point of order, Mr Speaker. Under Standing Order 116—I have some facts this time—I am deeply offended again. That is not true. I will not allow him to say that because it is just not factual.

The ASSISTANT SPEAKER (H V Ross Robertson): Can I say to the member again that it is a case of misrepresentation. If he looks at Speaker’s rulings 36/4 and 37/4, he will see that at the end of Mr Brown’s speech he can raise a point of order. He should have a look at the Speaker’s rulings.

PETER BROWN: Thank you, Mr Assistant Speaker. I will alert you to the point that I said I was recalling, as best as my memory tells me, that the judges ruled that he spent $18,000-plus, and Mr Clarkson submitted that he spent $10,000. That is an error, in my book, of 80 percent. [Interruption] It might be reasonable for National Party members, but it certainly would not be reasonable for New Zealand First. I have to say, whilst I am on the subject, that I have some real concerns about the account from Toby Hill, to which reference was made, because in 1993 Toby Hill made a sandwich board for me that cost more than painting Mr Clarkson’s van, as I recall. But I want to move on from there. I just thought I would help the member understand the situation.

National members seem hell-bent on pinching—that is the only word I can use—New Zealand First policies, and the latest policy they have pinched is our roading policy. We have advocated for a long, long time that the amount of petrol tax taken from petrol motorists should fully go into the land transport account and be spent on roading and those sorts of matters.

Hon Harry Duynhoven: You’ll get more than you’d get from them.

PETER BROWN: No, I am not going to acknowledge that, but I acknowledge that the Labour Party has increased expenditure on roads, which pleases us no end, because had the Greens had their way—and they did for a while with the last Labour Government—the Government would have been spending less. It pleases me that Maurice Williamson has taken this on board. He now has the gall—and that is the only word I can use—to attack a person, by way of media release, who said that he supported all the petrol tax going into the land transport account. The Hon Maurice Williamson said he was just stealing National Party policy. But there was a time, in 1995, when a bill called the Road Transport Revenues Fund Bill came before Parliament.

Hon Harry Duynhoven: I remember that.

PETER BROWN: The Hon Harry Duynhoven remembers that. The Minister of Transport at the time was the Hon Maurice Williamson. This is what he had to say in the House: “Let us not try to be derogatory. The member for Tauranga, who introduced the Bill, and New Zealand First are clearly seeing it as a chance to win some votes.” So 12 or 13 years later, is he doing exactly the same? Is he as genuine as he makes out? I doubt it. He goes on to say, and I find this appalling for a Minister of Transport to say: “The first thing is, there would not be enough roading projects out there to do, or enough contractors out there to do them,”. He says further: “To say that taking some general tax from a road user is wrong is like saying that because someone buys a loaf of bread they should not pay tax on it.” Now the National Party has finally recognised that roading would be better if it had more funding injected into it. [Interruption] I say to the honourable members there that they should listen. If that bill had passed in 1995 there would have been something like $6 billion or $7 billion invested in roading additionally, and I have to say that economically we would be a lot better off. Further to that, a lot more people who have been killed on our roads would be alive in New Zealand today.

We applaud the Labour Government for disowning the Greens and putting more revenue into roading. It is not enough, and they should look at the actual system—the funding mechanism—because we fund roads on a “pay as you go” system, and that is not good enough.

BOB CLARKSON (National—Tauranga) : I raise a point of order, Mr Speaker. I will have another crack. Under Speaker’s ruling 36/4, I have been misrepresented. I would like to bring the member’s attention to the fact—

The ASSISTANT SPEAKER (H V Ross Robertson): The member can only say what the member said, and then state the actual case. It is very specific what the member can do. You can only say that what the member said was incorrect, and then correct it.

BOB CLARKSON: The member said that I went to court with a figure of $10,200. That is totally incorrect. If the member has been educated and can read—

The ASSISTANT SPEAKER (H V Ross Robertson): No, that is all the member has to say, and his word is his bond in this place. You have now corrected what the member said—what the member said was incorrect .

BOB CLARKSON: He is incorrect. Can I say the true figure?

The ASSISTANT SPEAKER (H V Ross Robertson): Yes.

BOB CLARKSON: If the member could read and he had read the papers the day before the court case, he would know the figure was $18,600. We were advised by the judge and by my barrister to take all the arguable items out of the figure, which is why it came down to $10,200. The final judgment given by the three judges was $18,160—a lesser figure than I started with.

The ASSISTANT SPEAKER (H V Ross Robertson): Thank you very much.

SHANE ARDERN (National—Taranaki-King Country) : A Government that robs Peter to pay Paul can always depend upon the support of Paul, and in this case we all know who Paul is with this Government. With this Labour Government—this Labour-led shambles of a Government—we all know who Paul is. It is its trade union mates, its school union mates, and, of course, its university lecturer mates.

Much has been made by this Prime Minister about the growing diversity of New Zealand, and most New Zealanders would agree with that statement. There is a growing diversity in this country. But what this Prime Minister does not understand is that in no circumstances do trade unions, school unions, and university lecturers make diversity. This country is being run by a bunch of loons—there is no question about it. And if this Prime Minister believes in what she has been saying—and I quote: “New Zealanders can continue to rely on a Labour-Progressive Government putting in place good policies to strengthen the economy.”, then I suggest she comes down from her mythical mountain and takes a close look at the lacklustre Ministers whom she has in her Cabinet. In particular I refer to the Minister for Biosecurity, the Hon Jim Anderton.

The reason I say that is, whether or not the Government likes it—and it praises the arts, the film industry, the tourist industry, and all those exciting things this Government loves to praise—at the end of the day the New Zealand economy depends on the primary industries. And it always will, as far into the future as anybody can see. But does this Government understand that? Not for a moment does it understand that. So I say to the Prime Minister that she should look at the competence level of her current Minister for Biosecurity, because of what he has said in recent times. The Minister has already admitted that he knows nothing about biosecurity. He has already said that he spent the last 6 years as the Minister for Industry and Regional Development going around the country promoting regional development, particularly the manufacturing industry. But what the Minister has left out of that comment is that during that time the primary industries in this country have had 2.8 percent growth, year on year. The Minister, who has been promoting industry around this country, which has had 1.1 percent growth over the same time, does not now need to advise the primary industries on how to get growth going in their area. After 6 years, 1.1 percent growth is not good. There is no way that this Prime Minister can measure that as a satisfactory performance from this Minister.

I have said repeatedly to the Minister that there needs to be a generic pest management strategy, and that it is vital for the biosecurity future of New Zealand. Our new Minister for Biosecurity has said that I was living in a fantasy world by suggesting for a moment that that kind of set-up could work: that we could exclude the pests we do not have. So here is the first lesson for the Minister, the Hon Jim Anderton: he should read his briefing papers. Page 15 of the biosecurity briefing paper to the incoming Minister, under “Strategic Priorities”, states that having generic incursion response systems is one of Biosecurity New Zealand’s top eight projects for 2005-06. What does the Minister say to that? The paper also explains to the new Minister: “MAF must make a greater investment in scenario and generic response planning.” That was the advice to the Minister. So I hope that the Hon Jim Anderton will show some integrity and apologise to me for remarks he made in a press statement dated 2 November 2005, when he commented on my call for generic incursion response systems and pest management systems, and stated that: “… National is unrealistic, clearly not ready for government, and can’t be trusted with the taxpayers chequebook to make adequate decisions …”. That is what the Minister said. Our officials must have been totally embarrassed and must have shuddered at the ignorance of their new Minister. However, I am pleased to note that slowly—very slowly—the Government is adopting National’s biosecurity policy. It has taken time, but then no one could accuse Government members of being quick thinkers.

As we are adopting the policy on generic incursion responses, I see from Cabinet papers that the Minister is investigating an emergency response capability or fund—another good National policy. I take this opportunity to invite the Minister to carry on with National’s policy release and to bring in higher instant fines for those who flout our biosecurity laws at the border, and the deportation of those who, clearly, are trying to get through the system without making an adequate declaration, and so forth. The Prime Minister has made a mistake; she needs to change her Minister for Biosecurity. But I can see her problem: who does she give this important portfolio to? There is not too much talent on that side of the House. Who would she pick from?

This naturally brings me to rural affairs and the Minister for Rural Affairs. The briefing paper to the Minister for Rural Affairs, the Hon Damien O’Connor, states: “Much must be made of the isolation funding and the funding of rural school buses in isolated areas.” I thought that that seemed interesting, and I wondered how the Government was implementing that policy. I have with me a letter from the Minister of Education, the Hon Steve Maharey. It says that he has told an isolated community that the Government does not fund school buses in such places, and that it is the parents’ responsibility to get their children to school. So where does the Minister for Rural Affairs stand in relation to that example? This school is very isolated. It is way out in the back of eastern Taranaki. It has no access to the normal kind of school bus or alternative transport that everybody else enjoys. The Minister has told the school that it is not his problem; it is the school’s problem. So where is the fight for rural communities from that Minister for Rural Affairs?

However, any Government is all about leadership. We all know what the leadership of this Government is like. It is no wonder that Cabinet lacks the initiative, talent, and ability to understand some of these issues. Two official bodies have determined that the 2005 pledge card was an election expense. Helen Clark has said that her signature is on it and that she is accountable for it. We all know what that signature is worth. We have seen that signature on paintings; we know how good that signature is. We know how much currency it can carry.

Russell Fairbrother: What did the High Court say about your expenditure?

SHANE ARDERN: I say to the member who is interjecting that he should go back and look at the law and the determination that has been brought forward by the Auditor-General with regard to that particular issue. No wonder Helen Clark refuses to meet with the Auditor-General; she knows she is wrong. She knows that she has taken money, and she should pay it back. But Helen Clark refuses to do so. When this matter was brought before the Auditor-General, we all thought that it was to raise the issue of the “You would be better off under Labour” campaign, which was also funded out of the taxpayer’s pocket. Now we know the real reason: she had plans afoot to swipe nearly half a million dollars of taxpayers’ funds to prop up the Labour Party election campaign. Clearly, from the leader down, this Government is rotten to the core. It is time that this Government moved on and allowed somebody with some real integrity to take over the management of this country.

In closing I say that if Helen Clark really believes that what she did was within the law, why does she not allow it to be tested? I am somebody who received the wrath of the Prime Minister. I had to go to court and prove that what I had done was not against the law. I ask why the Prime Minister does not do the same. Why does she not front up? Why do her Cabinet colleagues who are baying away not front up before the appropriate authorities and say to them: “We were within the law, as best we understand it.”? It is because they know that the advice given to them at the time was that they were not within the law. The reality is that they know they are outside the law.

Hon RUTH DYSON (Minister of Labour) : Mr Assistant Speaker, I begin my contribution this evening by wishing you and the officials in the Speaker’s office a very, very happy new year. From my perspective I am looking forward to a very happy new year as well, and I wish that all members of the House could do so, but frankly I doubt it in terms of what faces the National Party. It has had a whole summer during which every day different stories from different leakers in its own caucus talked about their frustration with the clear failure of Don Brash to provide any leadership. What a dreadful thing it is to go through the whole summer hearing and reading about this, day after day. I thought the communication skills of the National Party members were at their peak over summer. Tragically for them those skills had leaks.

Then National had its major breakthrough, which was the opportunity to show Dr Brash as a strong, competent leader, with Ōrewa III—his third speech in the series. I have not seen the final film in The Lord of the Rings trilogy, but apparently everybody was disappointed—in exactly the same way they were disappointed with the third of the Rotary speeches from Don Brash. John Armstrong described it in this way: “They set low expectations with the speech, and they deliberately played it down, but I think it even struggled to meet those low expectations.” That was what one of the best political commentators in our country said of the speech. He went on: “I think we know what National’s secret weapon is for the next election. Don Brash is going to try and kill Labour with politeness. He is meek. They needed a ripsnorter to get into the year proper, and I would have gone for the jugular, but not Dr Brash.”

The Nelson Mail wrote: “Few voters are likely to rate his speech as much better than dull.”, and the summed it up for me and certainly for my constituents, from what I have heard from them: “It was too negative, and it failed to deliver the solutions New Zealanders are seeking.” Well that is exactly the point. That is why National was defeated again at last year’s election, and now it looks forward to 3 long years in Opposition again, while we have 3 more years of a Labour-led Government. I want to acknowledge the support of our partners, New Zealand First, United Future, and the Greens, in the work we did to become the Government.

Last week I had the pleasure of going to the start-of-the-year function hosted by Business New Zealand. The President of Business New Zealand, Stephen Collins, got up to welcome everyone to the function, and his opening words were: “Business in New Zealand is in very good heart.” He has listened, I am sure, to speeches from members of the National Party and wondered what planet they are on. Why does the leader, who is now widely called “Dr Doom” in the business community, insist on trying to talk us into a recession? Why is he so set on causing depression for New Zealand, and not looking to promote our country and be proud of New Zealand as the most fantastic place in the world to live in, to work in, and to relax in? That is what I am proud of, and I just wish the members of the National Party would show some leadership on that issue.

As the Prime Minister said in her opening remarks to Parliament last week, Labour and the Progressive party are not in Government to manage the status quo. It is never good enough. We have seen progressively over the last 6 years that as we have raised the bar people’s expectations and opportunities have been raised, and their expectations for future opportunities have increased, as well. That is what I look forward to contributing to over the next 3 years. We want our country to be more affluent and more dynamic. We need a strong economy to deliver the living standards, the services, and the quality of life that our citizens deserve, expect, and are prepared to work for. We want all New Zealand families to enjoy more opportunity and more security, and to share in the progress that our country makes. We want to build pride in New Zealand’s national identity, and to celebrate the achievements and successes of our people, not to run them down. Those people who have achieved both in the past and in the present have brought great credit to our country, both within it and internationally.

We have spent the last 6 years working hard with and for the citizens of our country; growing the economy; dropping our level of unemployment to the lowest in the Western World; investing heavily in the critical services of health, education, police, and our social services; promoting our unique and rich culture; protecting New Zealand’s environment; and maintaining our nation’s reputation as principled, independent, and nuclear-free. It had to be the joke of the year when Murray McCully persuaded his caucus to come out publicly and say: “Nuclear-free? We’ve changed our mind.” The whole country laughed. It was the best joke they had played on New Zealanders for a long time. New Zealanders just laughed at the thought of National expecting to have any credibility at all on the nuclear issue—not a chance. Labour has stood strong on that policy for over 20 years, and will continue to do so.

It is clear that the confidence of the National Party has taken a very significant blow over the last few weeks. Its caucus, expanded as it was since the election, gave it a born-to-rule arrogance in the House. But after Don Brash’s Ōrewa III speech, after National’s caucus retreat in Taupō, which was totally dominated by the increasing factionalism of its caucus, and now after the blunder of its new and obviously one-term MP, Craig Foss, it is starting to look very shaky. Craig Foss is happy to encourage illegal workers to take the jobs of New Zealanders—New Zealanders who had been sacked, so that those illegal workers could take their jobs. What an absolutely disgraceful position for any member of Parliament to take, let alone a member of Parliament who comes to this House to represent those people who were sacked. What an absolute disgrace!

But the icing on National’s crumbling cake is its feigned horror at the electoral expenses of the New Zealand Labour Party. That horror came from a National Party that forgot to include GST on its broadcasting expenses return. One would think the former Governor of the Reserve Bank might know how the GST system works. He forgot that, and he forgot his meetings with the Exclusive Brethren—he forgot to include their expenditure for the National Party on its tax returns. That is why New Zealanders were very happy at the last election, and I predict that for the next three years they will forget the National Party and look to our Government for leadership and support of their aspirations.

ANNE TOLLEY (National—East Coast) : I begin today by paying tribute to an extraordinary man, a Gisborne resident, who sadly passed away 2 weeks ago. Jim Holdsworth was born in and grew up in Gisborne, and spent most of his life in the Gisborne district. He served in the Mounted Rifles in World War II, played rugby, tramped extensively in the area, played snooker extremely well, read widely and voraciously, and also played chess. It is often related how he once travelled on the Trans-Siberian Railway, and played chess for days with a Russian general who spoke no English at all. Jim was a great traveller, but most important of all he was a farmer—a Hereford breeder, a wool classer, and one of New Zealand’s early farm foresters. In fact, he was a founding member of both the national and local farm forestry associations, and he headed both organisations during the early years. He became an expert in Australian eucalypts, and planted many varieties on his station, as well as large plantings of pine.

He was way ahead of his time in regard to farm forestry and his knowledge of trees. He was way ahead of his time in many other aspects of life. He became frustrated because he could not understand a gang from the Ureweras who were working on his farm, so he approached a local kaumātua and asked to be taught the language, and he became a fluent speaker of Māori. Jim was an honourable man, a man of honesty, straight dealing, and huge integrity, and he will be sadly missed in the Gisborne district.

Honesty and integrity are two words that, unfortunately, we cannot associate with the current Labour Government. I am ashamed to live in a country where the Prime Minister has been referred to the police not just once, for signing a picture she did not paint herself and allowing it to be sold as her own artwork, not just twice, for also knowingly travelling in a motorcade that deliberately exceeded the speed limit by 40 to 60 kilometres per hour at times, in order for her to catch a plane to watch a game of rugby, but three times, for also allowing her parliamentary budget to be used deliberately to pay for a $446,815 pamphlet and pledge card as part of Labour’s election campaign.

I well recall the two campaign meetings held in my electorate by the Maxim Institute. They were excellent public meetings and very well-organised and well-attended—possibly because they focused on the issues rather than on the candidates. However, during the course of the evening the representatives, who were mostly MPs, were able to ask a question of one another. My question to my Labour opponent was exactly this: why was Labour using taxpayers’ funds to fight the election, when other parties had to fund-raise through donations, raffles, and cake stalls to fund their campaigns? When I asked that question at the first meeting, my Labour opponent sneered—as we hear here tonight—and answered that she doubted that National Party campaigns were funded by cake stalls. On the morning of the second meeting I had had a very successful cake stall in the main street of Ōpōtiki—in fact, it was the third cake stall we had run in Ōpōtiki, so I felt I was on pretty safe ground.

As a candidate I had no parliamentary salary to rely on, no parliamentary-funded travel or accommodation to support me, no parliamentary office to send out letters, etc. That is at the heart of the Electoral Act laws. Those in power have an enormous advantage over their challengers. This country prides itself on its democratic principles; we believe that any Jack or Jill has the right to challenge his or her master or mistress—has the opportunity of equal rights. The underdog is always our favourite—except when it is the All Blacks—so a system that protects those with few resources against those with many, in an election process, must be upheld.

Typically, my opponent’s response and the party line we have heard trotted out for the last week has been: “Well, everyone else does it, so it’s OK.” Well, I have never accepted that blurring of the line between right and wrong. I have never accepted it from my children; I have never accepted it from my families or from my work colleagues, and least of all from my Government. The law is clear: the leader’s budget, funded by the taxpayer, is not to be used for electioneering.

Is the pledge card I am holding up electioneering? The common-sense answer has to be yes. It was put out by Helen Clark and Labour, and only in the 3 months leading up to the election. It spells out the seven election promises of Helen Clark and the Labour Party. It was used by Labour candidates and MPs throughout the 3-month lead-up to the election. The only time Labour put this out was in the 3 months prior to an election. Therefore, it has to be an electioneering tool. What about this pamphlet I am holding up? Is this an electioneering tool? It states: “Helen Clark—

Hon Members: Show us the photo.

ANNE TOLLEY: Members might not recognise her. It shows Helen Clark’s and the Labour Party’s policies for the future. [Interruption] Labour did not put out a pamphlet like this at any time during its 6 years in Government, except before the last election. It lays out all Labour’s policies, all nicely wrapped up. Who it is in the photo might be questionable, but that is just another part of Labour’s spin and deception. But it does not take a law degree to work out that this, too, is electioneering.

The Electoral Commission thought it was. It insisted that Labour include that $446,815 in its election costs, and thus Labour has exceeded its legal limit. The Auditor-General now agrees, and two official bodies have found that Helen Clark and Labour were in the wrong, deliberately and calculatedly so.

So what do Labour members do? They blame everyone else. They blame the law, saying that the law is unclear. They ridicule, they point the finger, and they throw up smokescreens. They were wrong; they got caught. They should apologise, pay back the money, and take their medicine. The medicine is not very strong; it is not particularly nasty.

I ask this House where the justice is in that medicine. My colleague Bob Clarkson can be taken to court and made to prove that he did not overspend his limit. His punishment would have been that he would be out of Parliament. But Helen Clark and this Labour Government cannot be held to such account by the public, whose money they have looted. There is just a fine, to a maximum of $3,000, for illegal practice, as my estimable colleague has pointed out, or a year’s jail and a $4,000 fine. Helen Clark, who was responsible for her budget, will cop neither of those two. She will again step back and allow a staff member or a party faithful to take the blame, just like she did with those poor police drivers in Oamaru.

There is no honesty in this Labour Government; there is no integrity in this Labour Government. It should apologise and pay back the money.

Hon PAREKURA HOROMIA (Minister of Māori Affairs) : I heard the member over there make reference to Jim Holdsworth, and I want to pay respects to Jim. I worked for Jim for 18 months. My people taught him how to talk Māori. We shore his sheep. He talked about politics, and told me he never trusted the National Party. I want to mihi to Jim about that. I will tell members about Jim Holdsworth, more than anybody else can. I also want to recognise Wi Kuki Kaa, my uncle, who has passed on. Those great people who have passed on, I wish them well.

The National Party is passing on. I have listened to that bunch of booming brats over there, who will not listen to their leaders in the front there. In the opening stages of this debate we heard one of the greatest deliveries in contemporary times, by a long-serving Labour leader, Helen Clark, and she will be here a lot longer. My colleague Anne Tolley even moved to Gisborne to live amongst the great people, and that is what this Government has done for Māoridom. So I see that bunch of booming brats developing at the back of the Chamber. I see their abusive, contemptuous, insulting behaviour, and I tell them to be wary of their leadership, for it has been put asunder. But, like the great leader who started this debate, Helen Clark—[Interruption] Those members will be there for another 3 years, and they will listen to a lot of great debates led by this great leader and this great Government. Certainly, at the end of the day, Māori will be an important and integral part of this House. My friend Tariana Turia used to give out the cards, and she knew that, all right. [] You know it was good, and you know the delivery of this debate was wonderful.

Lindsay Tisch: I raise a point of order, Mr Speaker. The Minister brought you into the debate, Mr Assistant Speaker, so he might like to withdraw that comment and rephrase.

The ASSISTANT SPEAKER (H V Ross Robertson): Thank you, Mr Tisch. I was just about to bring the Minister to order. He has seconds left so I ask him to please wind up.

Hon PAREKURA HOROMIA: I used to work with certain people in developing enterprise—and that is what this Government has done for Māori. It has created all the economic glory in this country right now. You should be thankful—

Lindsay Tisch: Point of order—

The ASSISTANT SPEAKER (H V Ross Robertson): I know the member is going to say that the Minister again brought the Speaker into the debate, and I ask the Minister to desist.

Lindsay Tisch: I raise a point of order, Mr Speaker. I know what you are going to rule, and I accept that, but because of those interjections in the last 30 seconds or so, I think the Minister should have an extension of time to compensate. I know he is on his closing statement, and his speech has been very good to hear. This side of the House, certainly, would be privileged to hear the end. I would like to give him until 5 minutes to 6 to finish off his speech in that last breath that he had.

The ASSISTANT SPEAKER (H V Ross Robertson): I just say to the member that he is a senior whip and he knows full well that he cannot seek leave for someone else. I suggest that he look at Speakers’ rulings 1/5 and 1/6. I am now going to put the question.

Gerry Brownlee: I raise a point of order, Mr Speaker. You know it is a fact that the House is the master of its own destiny. Part of the House agreement is the amount of time that someone has to speak. Mr Tisch sought leave for the vote on the confidence motion to be delayed until 5 to 6 in the expectation that Mr Horomia would fill the void—something that he is quite good at.

The ASSISTANT SPEAKER (H V Ross Robertson): Thank you. The House is the master of its own destiny. Is there any objection to that course of action being taken? There is.

A party vote was called for on the question, That this House has no confidence in the Government led by the Rt Hon Helen Clark because she leads a political party that has shamelessly ransacked the public purse to fund its election campaigns, and has absolutely no coherent programme to lift the living standards of all New Zealanders.

Ayes 50 New Zealand National 48; ACT New Zealand 2.
Noes 61 New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1.
Abstentions 10 Green Party 6; Māori Party 4.
Motion not agreed to.

Insolvency Law Reform Bill

First Reading

Hon JUDITH TIZARD (Acting Minister of Commerce) : I move, That the Insolvency Law Reform Bill be now read a first time. It is my intention that this bill be referred to the Commerce Committee. The bill is designed to give effect to the Government’s overall objectives, which were established at the outset of the extensive consultative process that preceded the introduction of this bill. The objectives were: to provide a predictable and simple regime for financial failure that can be administered quickly and efficiently without imposing unnecessary compliance and regulatory costs on its users and that does not stifle innovation, responsible risk-taking, and entrepreneurialism by excessively penalising business failure; to distribute the proceeds to creditors in accordance with their relative pre-insolvency entitlements; to maximise returns to creditors by providing flexible and effective methods of insolvency administration and enforcement that encourage early intervention when financial distress first becomes apparent; to enable individuals in bankruptcy to participate again fully in the economic life of the community; and to promote international cooperation in relation to cross-border insolvencies.

The bill, accordingly, repeals and replaces the Insolvency Act 1967 and amends the insolvency provisions of the Companies Act 1993. New Zealand’s personal insolvency or bankruptcy law was last reviewed in the 1960s, resulting in the enactment of the Insolvency Act 1967. This Act is now regarded by many as outdated, inflexible, and administratively inefficient. The current personal bankruptcy structure—and I am sure members standing in the aisles opposite will be very interested in this—does not reflect modern international practices in relation to personal bankruptcy.

Corporate insolvency law was amended to some extent by the enactment of the Companies Act 1993. However, some of the provisions of the Companies Act still lack clarity and certainty. Most important, current corporate insolvency laws do not provide for an effective alternative to winding up companies that would enable the rehabilitation of financially distressed companies, nor is there an effective mechanism to deal with the incidences of cross-border insolvency, which is important when creditors and assets of the insolvent company are located overseas.

That potentially discourages foreign investment in New Zealand, which is in itself a limiting factor to the growth of our economy. These problems are further exacerbated by an increase in the number of company liquidations and personal bankruptcies that have provided low returns, if any, to unsecured creditors. For an insolvency regime to work effectively, administrators who are competent and skilled in conducting those affairs are required. While the bill does not currently address the issue of practitioner regulation, work in that area is currently under way, and decisions are expected to follow late in 2006 after further consultation.

In light of that background I now propose to outline some of the main provisions and benefits of the bill. It will make the personal bankruptcy procedure undertaken by the Official Assignee more administratively efficient and cost-effective. It is also designed to provide debtors with better access to the bankruptcy regime and alternative bankruptcy procedures in times of financial difficulty, where the ultimate goal is to maximise returns to creditors. The introduction of an alternative to personal bankruptcy, known as the “no asset procedure”—or NAP—is administered by the Official Assignee over a 12-month period. This procedure is aimed at consumer debtors who do not have assets or any other means of paying their debts. It is not necessary to apply any of the punitive aspects of bankruptcy such as restrictions on overseas travel, or owning a business, to such debtors. Debtors will have only one chance of entering this procedure and it will apply only to debts up to $40,000.

The bill adopts the Australian voluntary administration regime for companies in financial distress, as an alternative to liquidation, that allows for a moratorium period so that administrators can assess the viability of the company to continue trading before a decision is made either to rehabilitate it by placing it in voluntary administration or to enter it into liquidation. If a decision to rehabilitate the company is made, a deed of company arrangement is executed between the company and its creditors, which forms the basis of the administration and contains details of creditors—

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member. Honourable members, the time has come for me to leave the Chamber for the dinner break. I shall resume the Chair at 7.30 p.m.

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

Hon JUDITH TIZARD: As I was saying before the dinner break, the Insolvency Law Reform Bill, the first reading of which we are dealing with, adopts the Australian voluntary administration regime for companies in financial distress. This regime is an alternative to liquidation that allows for a moratorium period so that administrators can assess the viability of the company to continue trading before a decision is made either to rehabilitate the company by placing it in voluntary administration, or to enter into a liquidation. If the decision to rehabilitate the company is made, a deed of company arrangement is executed between the company and its creditors that forms the basis of the administration and contains details of creditors, the amount of debt, and the time over which the debt is to be repaid. Essentially this allows a company to have a voluntary plan to continue trading while managing its debts.

Improvements to the law relating to cross-border insolvency are also included in the bill. The bill adopts the United Nations Commission on International Trade Law model law on cross-border insolvency. The model law will provide effective and efficient mechanisms for dealing with cases of cross-border insolvency and debt recovery, particularly where assets of the insolvent company are held in an overseas jurisdiction. The model law will not come into force in New Zealand until Australia also adopts the United Nations Commission on International Trade Law model. Also, given that it is our largest and closest trading partner, Australia has announced that the model law will be included in its Corporate Insolvency Reform Bill, which is intended for introduction later this year.

Provisions in the bill have been introduced to restrict the abuse of phoenix company structures by directors of a failed company with the intention of defeating the legitimate interests of creditors. The bill proposes to restrict the directors of failed companies reusing the name of the failed company and it provides for criminal sanctions where the directors of a company act in bad faith to defeat creditors’ legitimate interests. The changes proposed in the bill will eliminate the potential benefit to the directors, thereby providing fewer incentives for directors to abuse phoenix company arrangements. The changes proposed in this bill strengthen New Zealand’s insolvency laws. In particular the bill brings our personal insolvency laws up to par with international standards. The changes proposed to corporate insolvency laws provide for an alternative to liquidation for financially distressed companies. They restore the integrity of phoenix companies and pave the way for cross-border insolvency proceedings when overseas creditors and assets are involved.

Overall, this is a balanced reform that not only meets the concerns of both creditors and debtors, but also has greater benefits for the New Zealand economy as a whole. I look forward to it being thoroughly examined by the Commerce Committee.

PANSY WONG (National) : I doubt very much whether anyone is any wiser after the delivery of that prepared speech by the Minister with responsibility for Auckland Issues. She really got into it with passion and commitment!

One of the stated objectives of the review of the insolvency law of 1967 by the Ministry of Economic Development is to provide a predictable and simple regime for financial failure. Financial failure usually becomes predictable in hindsight. So is business recovery. In every business people start off with the belief that their venture will be profitable, and most cannot be convinced that it is heading into trouble, even when that might become obvious to others. Risk taking and operating in an ever-changing environment is part of the norm of doing business. Every day suppliers and lenders take into account calculated risk before they decide whether they will supply goods, services, and credit to businesses. I wish the Minister could stay and give us some feedback after the passionate delivery of her speech, but unfortunately she was otherwise engaged. Every day business owners also take into account the calculated risk of whether they will carry on doing business with the aim of making a profit after paying off debts and suppliers. So failure and success are part of the nature of doing business.

The inherent risk-taking nature of doing business actually improves discipline on both lenders and borrowers to take those calculated risks into consideration in their decision-making process. Anyone who thinks that the passage of any law can make business failure or business recovery more predictable is hopeful, if not naive. Any measure that aims to convey a message that there will be Government intervention to prevent business failure or to assist business recovery will not work. Indeed, it would lead to unrealistic expectations, and, worst of all, we would find that a lot of the energy of business people would be diverted away from managing business risk to lobbying politicians. Heaven help them! It would be a waste of energy and it certainly would not be a recipe for a thriving economy.

The presence of this type of ideological and lofty statement throughout the legislation leads to some concerns that National members want to address seriously at the Commerce Committee. Let us examine some examples—and the officials can expect some of this type of questioning from the diligent National Party members on that committee.

Lindsay Tisch: A great committee!

PANSY WONG: The National Party is particularly fortunate in that our members all have business expertise and I am sure that this bill will benefit from that.

One example I will share with the public is that one of the aims of the bill is, apparently, modernisation. That sounds good! Apparently it proposes additional changes that would take into account the fact that the main reason for personal insolvency has changed from business failure to consumer spending - related reasons. Does that mean that insolvency due to consumer spending - related reasons will be treated differently from other types of business failure? Is business not supposed to cater to consumer demands? I think every business person knows that consumer demand changes and that he or she should cater for that. What is the relevance of that to creditors and lenders? How does it affect the way in which insolvency law operates? I am sure that my learned colleague Chris Finlayson might lend some weight in his speech to ask how consumer-related insolvency affect the implementation of insolvency law.

Another example is the statement in the explanatory note referring to distributing the proceeds to creditors in accordance with their relative pre-insolvency entitlement. That sounds reasonable until we see that it goes on to state: “unless it can be shown that the public interest in providing greater protection to one or more creditors outweighs the economic and social costs of any such priority;”. Does that mean that a Government agency will decide what is in the public interest and which type of creditor can override other groups? That type of subjective assessment will seriously undermine the discipline of risk-taking decisions made by creditors. It will also lead to an expectation by creditors for intervention by Government agencies rather than following long-established case law and practices.

One of the provisions of the law is meant also to maximise the return to creditors by providing flexible and effective methods of insolvency administration and enforcement that encourage early intervention when financial distress becomes apparent. Who will be this keen observer of any business that is facing apparent financial distress? What if a seller’s creditors want to call in the seller’s debts during a low-season business cycle? Who will decide when an early intervention is warranted? Once again, any attempt to legislate away risk and uncertainty in allowing the business cycle to run on is indeed full of danger and risk.

This bill also sets out to ensure that, with limited exceptions, a debtor’s assets will be distributed to all creditors equally in proportion to the size of their admitted claims. On the face of it, this would overturn some long-established understandings of priority creditors. That in itself should cause us to examine this issue very carefully in the select committee, because we know that the way to trouble is often paved with plenty of good intentions. This so-called good intention may lead to creditors no longer having confidence to extend credit to businesses. My parliamentary colleagues on this side of the House will soon expand more on those lofty provisions.

National supports the review of the Insolvency Act, because this law does date back to 1967. The bill contains provisions for simplified insolvency administration for personal bankruptcy, such as the no-asset procedure and the cross-border insolvency mechanism, which we support. We also like the stated intention of the bill to streamline the processes, to better align the processes of personal and business bankruptcy, and to appoint competent and bipartisan liquidators. But let us remember that insolvency comes at the end of a business process that no one plans for, and that it is an inevitable part of the risky nature of business. So the swift administration of the process to ensure that creditors, debtors, etc. can move on should be the aim of this legislation.

We will scrutinise in the select committee the bill’s lofty statements and provisions to ensure that their implementation would not be at the expense of, in particular, start-up businesses that want to borrow and want credit to be extended by their suppliers. We will support this bill to the Commerce Committee, but there is a lot of work to do on it yet.

MARYAN STREET (Labour) : It is my pleasure to support the introduction and first reading of the Insolvency Law Reform Bill. I welcome the comments made by my honourable colleague who spoke just before me regarding the support of the National Party for the introduction of this bill. Clearly it is time to review the Insolvency Act—an Act that is nearly 40 years old. Other amendments to additional legislation—namely the Companies Act of 1993—have followed from that review.

The circumstances in which businesses and individuals conduct their business have altered substantially since the 1960s—and, indeed, since 1993. It is time to modernise our insolvency regime. The Minister has referred already, in her speech, to the key provisions and benefits of this bill. They relate to the personal bankruptcy procedure, the no-asset procedure, companies in financial distress, cross-border insolvency, and abuses arising from the efforts of phoenix companies to defeat creditors’ legitimate interests.

I wish to focus, in the short time I have, on a couple of issues in particular. The first is the policy intention of this bill. The first intention is to modernise and streamline our personal insolvency procedures while keeping intact fundamental principles of insolvency law. This bill provides for individual debtors to engage in a voluntary administration regime, to enter a no-asset procedure, to spend less time in bankruptcy—that time is reduced from 3 years under current provisions, as I understand it, to 1 year under this bill—and to be able to recover more quickly from their errors.

In all of this the rights of creditors need to be protected, as well. Because the no-asset procedure is a one-off reprieve for small-time debtors who have got themselves into difficulty, criteria must be met. These are that such people have no assets from which to repay debt, that their total debts are between $1,000 and $40,000, that they have no other means to repay any amount, and that they have a clean financial record—which means that they have not previously been declared bankrupt or admitted to the no-asset procedure. This is not a way out of bankruptcy for repeat incompetents; it is a way back for individuals who have got into difficulties.

The second area I want to focus on in particular is that pertaining to companies in distress. Again, the policy intention is important. We all know of companies considered to have been good traders that have got into trouble with their cash flow. In order to address the issues around the rehabilitation or reconstruction of these companies we need once more to balance the interests of creditors and debtors. That balancing is at the heart of this bill. Phoenix companies—so named because they rise from the ashes of past failed companies and use their previous name or a name like it—must not be allowed to defeat creditors’ interests. But providing some means of rehabilitation for these companies so that they are able to re-enter the economic arena having satisfied obligations adequately and fairly is an important provision in this bill.

In addition to those two areas, I think the work in this bill that seeks to promote international cooperation in relation to cross-border insolvency is important. It seems to me that the key points of this bill are to do with balance, modernisation, and alignment of New Zealand’s processes with comparable ones overseas—and Australia’s processes in particular are referred to in the introduction to this bill. But, more important, best practice must be observed. We have an interest in protecting creditors, for sure. We have an interest also in modernising our procedures in order to enable individuals and businesses to get back on their feet, get up and trading, and get back into economic activity on a sound and accountable basis.

Like the speaker before me, I welcome the referral of this bill to the Commerce Committee. I particularly look forward to the Inland Revenue Department’s submission to the committee, because I think that that department will have items of significance relating to past business practices that will be important. But, most of all, I look to have this essential piece of law reform, which seeks to update very old legislation that has long since passed its use-by date in business practice, brought up-to-date and made to work in the interests of both creditors and debtors.

CHRISTOPHER FINLAYSON (National) : This bill deals with financial bankruptcy, not moral bankruptcy, so the Labour MPs opposite can generally relax. As my colleague Pansy Wong said, National supports the bill’s first reading and its referral to the Commerce Committee, although our members will want to raise a number of important issues during the select committee deliberation. As is apparent to anyone who picks up the bill, it is a leviathan piece of legislation, and it will be impossible to cover the entire bill in the course of a 10-minute address—

Russell Fairbrother: Give it a go; do your best.

CHRISTOPHER FINLAYSON:—so I really want to say something about Part 8, which amends the Companies Act 1993, and also to look at Part 9, which deals with cross-border insolvency.

First, for the benefit of my colleague Mr Fairbrother, I want to make a few preliminary points about the slowness of commercial law reform in this country—a point I think he would understand if he were Attorney-General. That really is evidenced by the cetacean-like gestation period of this particular reform.

Let us go back to May 2001, when the Law Commission published an advisory report to the Ministry of Economic Development, in which it outlined the importance of insolvency law. It is worth repeating what the report actually stated: “In a market economy”—and we are still that, notwithstanding the endeavours by members on the Government side of the House to turn us into a social democratic paradise—“some businesses will succeed while others will fail. When businesses fail they are unable to pay their debts, and creditors suffer a loss. The overriding purpose of insolvency law is to fix rules where the order in which creditors will be paid on insolvency is determined.” So insolvency law is a very important area of the law. Indeed, the Law Commission report referred to the comment of a leading commentator that insolvency law was the most crucial indicator of the attitudes of a legal system, and was arguably the most important of legal disciplines. Where there is not enough money to go around, it is the law that chooses whom to pay.

As Ms Street mentioned, the Insolvency Act was last updated in 1967, and it sets out the insolvency regime for individuals, both living and deceased. There have been only minor amendments to that statute since 1967. Company law, as she observed, is a little more up to date, because the Companies Act was passed in 1993, but certain areas relating to company insolvencies were put to one side until that area could be thoroughly reviewed by the Law Commission.

As I indicated, Part 9 of the bill deals with cross-border insolvency. The Law Commission wrote a paper on that subject as far back as 1999, and it was addressed to my colleague the member for Bay of Plenty when he was the Minister of Justice. It recommended that the model law be introduced into New Zealand law. The next piece of work was undertaken by the Law Commission in 1999. At that time it published a report on priority debts and the distribution of insolvent estates. Then, in the year 2000, the Law Commission was asked to do some further work and, as I said, it reported in 2001. It is only fair to acknowledge the huge contribution to that report by Paul Heath, then a Queen’s Counsel and now a justice of the High Court in Auckland.

Between those reports and today, there has been a gap of almost 5 years, and I believe that that is simply unacceptable. In such a critical area of the law, law reform must be able to be undertaken more expeditiously than has been the case there. It is almost incredible that such a critical piece of legislation would take almost 40 years to be overhauled—from the time of the Insolvency Act in 1967 to the introduction of this bill. It is not in the interests of the New Zealand economy for our law to become so outmoded. It is also an insult to the Law Commission, which has done some very good work in this area over the years. Something needs to be done with Law Commission reports, once they are published, to ensure the commission’s recommendations are brought into law quicker than has been the case with regard to this bill. That is why I am pleased that Sir Geoffrey Palmer is now president of the Law Commission, because I think he will do something about that.

Let us look at Part 8, which introduces a very important amendment to the Companies Act 1993. The general purpose of the legislation has been outlined by Ms Street and others, so I will not dwell on it here. It highlights the problems associated with the existing business rehabilitation procedures that are currently contained in the Companies Act. It seems that the Government was faced with the option either of moving toward the United States chapter 11 mechanism or opting for the Australian voluntary approach. It has decided to follow the Australian approach, based on the Corporations Act 2001, which makes sense given the closer economic relationship between Australia and New Zealand, and the general desirability of harmonising business law on both sides of the Tasman—although why it took so long to make that policy decision simply escapes me.

I imagine that the business community will be very interested in Part 8, and will want to make submissions to the select committee on issues raised by it. The ones I am particularly interested in relate to who can appoint an administrator, to the effect of the administrator’s powers—particularly the effect on directors, and, most important, to employees—and to how the administrator will investigate the company’s affairs. My preliminary review of those provisions indicates that the correct balance has been struck, and that this bill will become very valuable law. Rather than a chapter 11 procedure, which is too protective of the company, the provisions try to seek a balance between the interests of the company and the legitimate interests of the creditors. It seems unsatisfactory that a company like United Airlines, for example, can rely on chapter 11 protection for over 3 years while it tries to sort out its affairs, and that is particularly why I like the concept of the watershed meeting, which is set out in Subpart 8 of new Part 15A, inserted by Part 8 of the bill. Things need to be brought to a head reasonably promptly, and watershed meetings can be adjourned only in accordance with the provisions of new clause 239AZ, inserted by clause 454. Of particular importance, and warranting the attention of the select committee, will be new clause 239ABA, also inserted by clause 454, which sets out what creditors may decide at a watershed meeting.

Another important change introduced by the legislation is the new Part 9, which deals with cross-border insolvency. Again, it is appropriate to acknowledge the outstanding work done by the Law Commission in that area, chaired by Justice Baragwanath. I particularly acknowledge the work of the Rt Hon Justice Blanchard, a former law commissioner who is now a Supreme Court judge, and of Peter McKenzie QC, a barrister in Wellington, who is the former chair of the Securities Commission and who has made a huge contribution to insolvency law in his career, including his current work in revising the insolvency law of Mauritius. Cross-border insolvency cases have become more common in recent years, and they are often linked to international fraud. In fact, the Law Commission’s report refers to Lord Millet of the House of Lords saying, as far back as 1991, that international fraud is a growth business. As we know from events in recent days over the pledge card, domestic fraud is doing quite well, as well.

Cross-border insolvency occurs when an insolvent identity is placed in a form of insolvency administration in one State, but has debts or assets in another State. The problem is how the law will be applied so that the assets in that other State can be properly wound up for the benefit of creditors. It is one area of the law where New Zealand cannot act unilaterally, and that is why in schedule 5 we are looking to adopt the model law that has been developed by the United Nations Commission on International Trade Law. Schedule 5 follows the original text of that model very closely—perhaps not surprisingly—in order to strive for a satisfactory degree of harmonisation and certainty as between companies.

One issue that interests me, and I am sure the select committee may want to look at it, is that schedule 5 will not apply to a registered bank within the meaning of the Reserve Bank of New Zealand Act that is subject to statutory management under this legislation. I agree that probably it does not make sense to include banks that are in statutory management within the model law, but it is certainly an issue that the select committee will want to have a look at. It will arise in this way: the Reserve Bank may decide that because of the insolvency of a bank that has been placed into a formal insolvency regime in, for example, Australia, it needs to be placed in statutory management here. In such a case it will not make sense that the model law will apply to that bank in New Zealand in circumstances where it was placed in insolvency in Australia.

So those are very important questions. Insolvency law is an area of the law that, as I said, is overdue for reform, and I look forward to seeing submissions on those and other issues.

R DOUG WOOLERTON (NZ First) : I will take a short call to say that New Zealand First supports the passage of this bill to select committee, and will make just a couple of comments on it. One of the things that we cannot help note is that there has been a marked increase in the number of bankruptcies of what we shall call private people—not through a case of going broke through some enterprise they have started up, not through a turn for the worse of circumstances that their businesses, be they large or small, have been involved in, but just through sheer what I would call consumerism. They have gone out and spent and spent. I think that says a lot about our society. I think it is a tragedy and I am pretty sure that I know what sort of people end up in this situation. To me they need help at an earlier stage.

I am pleased to see that this legislation will encourage early intervention. It will encourage a more open and transparent system, and a system that will be a lot faster. Those are all things that we applaud. We want to see this bill go further so we will be supporting it to select committee.

NANDOR TANCZOS (Green) : I also intend to make a fairly short contribution to this debate and rise really to indicate, like other parties before us, that the Green Party will be supporting this bill to select committee. We want to draw particular attention to a number of things.

First of all there are clauses in the bill to allow for the voluntary administration of insolvency proceedings for companies, which will increase the survival chances of viable businesses, or at least maximise the return to creditors, and we support the provisions to do that. Currently insolvent companies are closed and sold off, and there are obviously consequent job losses, and creditors often lose out significantly. So we think this provision will benefit a large number of people. It allows creditors to collectively vote on a rehabilitation plan for a company. There has been some contention around whether it provides the potential for failed directors to deflect scrutiny of their own business conduct, and we think that that is something that the select committee should have a look at, but in general we think the provision is worth supporting. In that regard I was a bit surprised to hear the comments by Pansy Wong. Perhaps I am mistaken, but she seemed to be suggesting that business failure is only observable in hindsight.

Pansy Wong: Yes.

NANDOR TANCZOS: I find that a surprising idea. I do not know how it has been for the member, but certainly when I ran a business—in fact in all of the businesses I have ever run—I was intensely aware of the prospects of success or failure at any particular moment. When things got tight, as they inevitably did, and I think they probably do in all small businesses, I knew exactly how tight they had become.

Pansy Wong: How many businesses?

NANDOR TANCZOS: Quite a few actually; the member would be surprised. So I was a bit surprised by the comment that those things were only observable in hindsight, because I think that people who run businesses are acutely aware of the financial position of their companies. I think it is perhaps short-changing the business owners of New Zealand to suggest that they are not aware of those things.

We also support the establishment of criminal penalties for phoenix companies and directors who intentionally cause creditors material loss. We think that that is a positive step, so we support it. We support the idea of harmonising our insolvency law with Australia’s, and also the readdressing of the priority of debts, allowing for the principles of fairness and equity in determining payouts. I draw attention to clause 272, where those priorities are set out, in particular following the comments of Ross Wilson about the need for protection for workers when it comes to insolvency and the very serious situation workers often find themselves in. They have not always had a high priority.

Of course, all creditors are casualties when it comes to insolvency, but an employee is likely to be someone whose entire income is derived from that company through his or her job there. Therefore I think there does need to be some particular consideration for employees’ interests, and the provisions in clause 272(2) are something that we welcome. Clause 274(1), which increases the maximum amount that can be paid out in those circumstances from $6,000 to $15,000, is also something that we support.

So we support the bill to select committee. We think there are some issues that the committee needs to address, but essentially we are very welcoming of this long overdue revision of the insolvency laws.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) : It seems that the current insolvency laws do not work properly, which means more costs for creditors and debtors, and more liquidations and bankruptcies, hence the need to change the law. While the business community and insolvency professionals have been kind of positive about this bill, there are a few points that I need to mention. One of them is the concept of planning for failure and recognising failure as an opportunity to improve on previous effort. Failure is not something to be feared. Indeed, if Colin James is to be believed, failure is a characteristic of our current financial situation. He said recently in a management magazine: “There is a growing anthology of Maori business, professional, artistic, and sporting success, but unfortunately it is swamped by failure.”

I am not in the habit of agreeing with Mr Colin James but I do agree with him when he says that failure within the Māori business community is a failure of the whole nation. He rightfully acknowledges the righteousness of the Māori Party philosophy, which is that what is good for Māori is also good for the nation as a whole. It is one thing to identify failure, it is another thing to put in place processes that do not just penalise failure, but also create new opportunities for growth. The Māori Party supports any initiative that does that.

This country’s personal bankruptcy laws were last reviewed in the 1960s, and our corporate insolvency laws were last amended in the early 1990s, but the business world today is very different to that of the 1960s or, indeed, to that of over a decade ago. We know that Māori were really hurt by the removal of tariff protections, the restructuring of the State sector, and the sale of forestry, the railways, and the telephone and electricity industries. It was also Māori workers in textile, clothing, footwear, car assembly, and meatworks who suffered. That was a crisis point in our business and economic growth. Māori whānau continue to suffer through ongoing globalisation.

The legacy of that betrayal of the Māori workforce lingers still. How do we know? It is easy, actually. At the start of this year unemployment for non-Māori was only 2.5 percent compared with a shocking 7.6 percent for Māori. The failure to provide, the failure to encourage, and indeed the failure to support endeavour is very much part of our experience. But we also know that Māori perspectives are relevant to successful business start-ups, that Māori business potential is under-recognised and underdeveloped, and that Māori business would benefit from early intervention and the opportunity for help to enable them to manage their way though difficulties, to stay afloat, or to limit the expense of bankruptcy.

We note the latest research by the Global Entrepreneurship Monitor, which listed Māori as the third most entrepreneurial people in the world. The study also identified a remarkable optimism and readiness for Māori to start a business. It unfortunately also noted a poor record in business survival. Again, the Māori Party is supportive of any efforts to enhance business survival and business growth. We also of course recognise that the most important thing is to try to prevent financial strife in the first place.

Although it is a bit outside the scope of this bill, the Māori Party believes that we cannot clearly identify business success or failure without also looking at our tax laws. Māori businessmen tell us that the company taxes for small businesses are too costly, while also noting, with some sarcasm, that the Government’s very own Inland Revenue Department always makes sure that it is at the head of the creditors’ queue. The Māori Party believes that the whole area of business tax needs urgent review to enable businesses to grow and to develop wealth for the whole nation. When we talk about wealth, we are talking about investment, research and development, and innovation, but also about the right to full employment and higher wages. We also note the changes to corporate insolvency proposed in the bill, which would provide for rehabilitation of viable insolvent companies and a better return for creditors. The Māori Party supports any efforts to modernise and improve processes that are unwieldy, burdensome, and costly for all parties.

Finally, the House should note that the biggest asset of Māori with untapped potential is the value of our human capital, and that is very much the case in the context of developing enterprises. The largest increases in the number of Māori aged between 15 and 24 years will occur before 2011, which means that the next 6 years will be crucial for developing the skills of this workforce. It is never too late to get it right. We must get it right for our young and for our future.

CHRIS AUCHINVOLE (National) : The National Party, and myself as a member of it, welcome the bill’s introduction, but with some reservations. Mine are in two respects: simplicity and enforceability. In terms of simplicity, I have regard, in particular, for small entrepreneurial businesses. Most small entrepreneurial businesses enjoy getting on with the job. Endless compliance and endless complications make their life untenable.

My experience in business extends to working with the New Zealand Dairy Board, a large corporate, milking cows with my brothers, and working as a small trader and a very proud member of the Export Institute based in Auckland. It is sobering to look up the figures today to find that only 4 percent of New Zealand businesses are engaged in exporting.

Dr Jackie Blue: Only 4 percent?

CHRIS AUCHINVOLE: Only 4 percent, I say to Dr Blue. There is a desperate need to encourage more business growth and more export growth. One of the restraints on entrepreneurial activity surrounds credit and creditors, and debt and debtors.

I agree with the earlier speakers, and particularly with the one who said that he had an ever-present eye on the financial state of his company. Being in an entrepreneurial business and dealing with a range of debtors who may or may not pay on time is a tightrope-walking exercise. Currently, there is a drive in New Zealand to encourage exports to the South Pacific. It is a drive that I really welcome on a personal basis, having spent perhaps two decades working in the countries of the South Pacific as an exporter from New Zealand.

One of the key comments from the experienced traders, when introduced to this new initiative, was that people should take care of the credit situation when dealing with some of the client base in the South Pacific. My own experience as a manager of the New Zealand Dairy Board’s South Pacific sales and marketing operation, and my subsequent decade as a sole trader exporting into the South Pacific, provided a range of knowledge in this field. As a supplier to Auckland-based Pacific traders, I was conscious that their problems could become mine. As a supplier to small trading businesses through Papua New Guinea, Micronesia, Melanesia, and Polynesia, we always had to be vigilant over the customers’ ability to make their payments. Members should please note that I did not say their ability to make their payments on time; I just said their ability to make their payments. That is no easy science in export trading, given the difficulties in communication, language differences, cultural difficulties, and the vagaries of small-business economies.

The proposed Insolvency Law Reform Bill will, in my view, assist with that, particularly in its definitions, but it will not be a panacea for easy trading without vigilance. It will not in any shape or form alter the disciplines of trading. One of the concerns that I have on this side of the House is the obvious limit to business experience on the other side of the House, and the seeming dependence that Labour has on regulation, legislation, political correctness, and bureaucratic compliance, as if those things change commercial realities—and they do not. Pirates exist today just as they did in the story books, and regulation often makes them more inventive than honest. Vigilance on the part of those in business is ever important and must be one of the instruments of successful trading.

To offer members a perhaps amusing incident, I well recall a communication that we once received from Guam, where a customer, who was on limited credit, demanded to know where his butter was, as he had already sent his cheque. He followed that by sending us a faxed copy of the cheque he had sent. In a classic case of Kiwi nous, one of the marketing lads whom I employed—he was a fair ripper—sent a fax back that read: “Here’s a photo of the butter you’ll get when we get the money you sent us a photo of.” Indeed, many are the tales that can be told, but particularly of the successful opportunities for business that exist within the Pacific Basin for trading with the many experienced and ethical businesses that exist there and that have been trading for decades.

The significance of the new opportunity offered by the Pacific Trade Expo—which should appeal to Mr Woolerton, because I believe that he supports exporting—from the New Zealand Pacific Business Council needs to be accompanied, though, by an understanding of what constitutes business practice beyond just buying and selling. The Insolvency Law Reform Bill goes some way to acknowledge and recognise that risk is a major feature of trading, and that overly stringent regulation can suffocate trade.

I have just attended a series of A and P meetings throughout the West Coast and Tasman districts. I have just completed a short burst last week of branch annual general meetings. Increasingly, without prompting, the conversation falls to the reign of suffocating stringent regulation that people are currently trading with. People are sick of it. Risk is part of business development and it is something I, as an exporter, along with every other exporter, engaged in all the time when in business. When we look at exporters and at their faces, it is not just laugh lines we see. Nothing could be that funny. Having recourse to justice in the case of customer insolvency is never much of a consolation and at best the situation is a mess.

However, I think the Insolvency Law Reform Bill offers to make it less of a mess than it was. But at best it will always be like doing the dishes after the party is over, and the definition of insolvency, at least where it technically occurs, has never been an exact science. I would have to say that in the case where customers are working on a continuous supply, it is difficult for small traders to know exactly when they might reach an insolvency point, because they are also dependent on the actions of others in paying them. I guess that the definition of insolvency, though, will improve and will assist in resolving some of the situations.

There are also signs of insolvency stress—signs that are well known to all who have engaged in trading, particularly international trading and exporting. Within the transaction we see on the other side of the House there seems to be increasing tension in the relationship between the parties concerned, which is a sure sign of difficulties. The principals of the parties appear less often and say less, another sign of difficulties emerging, and there is a reluctance to engage in conversation or to answer questions.

Having been a member only since September, may I say that my exporting instincts repeatedly lead me to the conclusion that there are serious systemic problems in the parties on the opposite side of the House. Frankly, if it were a commercial situation I do not think they could pay the bills. I do not think they will pay the bills. I think they will turn on their own and their associated parties when the bills come to a point of not being able to be met and work and programmes have to start being cut back.

A further feature of the Insolvency Law Reform Bill that I applaud on first sight during this first reading debate is the section on phoenix companies—companies that rise from the ashes and continue trading with the same directors, leaving behind them debts that were never to be paid out, prior to the features of this bill. Basically, there is a type of person in so-called business who uses bankruptcy and insolvency provisions as a device to avoid the true responsibility of his or her position. I will be pressing to see how the enforcement regime for this bill’s clauses will be instituted for the people we intend to assist and the people we intend to restrict. Once the bill has been referred to the Commerce Committee I do not doubt that it will emerge in a worthwhile form.

GORDON COPELAND (United Future) : I rise on behalf of United Future to take a fairly brief call in the first reading debate on the Insolvency Law Reform Bill. As other speakers have already said, it is timely that we as a Parliament grapple with what is a fairly formidable bill—about 290-plus pages—to overhaul and review New Zealand’s law relating to bankruptcy for individuals and insolvency and liquidation for companies.

I would like to pick up on one or two aspects of the bill in my brief remarks. Firstly, I am delighted that the bill will provide for the rehabilitation of viable insolvent companies where it is expected to result in a better return to the creditors of the insolvent companies. I certainly as an MP have had a number of suggestions from the business community that in New Zealand we should aim for a kind of chapter 11 situation, as it is known in the United States, whereby a company that realises that if it perseveres with its existing cost structure, etc., it will end up insolvent can, with the assistance of creditors and the law, continue trading, with a view to re-emerging as a viable ongoing enterprise. I think there is a lot merit in that.

United Airlines, which I have flown with quite a bit, is presently in a chapter 11 arrangement in the United States, and it would be devastating for the American consumers and people in many, many cities in that country if United Airlines had been forced into premature bankruptcy, rather than being given a chance to work its way through the situation, which it appears to be doing successfully. I think that is to be applauded.

The other thing I see in the Government’s overall objectives, which I likewise like, is that we need to ensure that our insolvency laws for businesses and bankruptcy laws for individuals do not stifle innovation but encourage responsible risk-taking and entrepreneurship rather than penalise people who, with the best of intentions, start off to improve their lot in life and make an important contribution to our economy and then find that they have come adrift.

We must continue to foster that number eight fencing wire, risk-taking Kiwi philosophy. I agree with the previous speaker, Chris Auchinvole. I also find a lot of businesses are now saying that they are stifled by the heavy hand of the State. I am thinking particularly of the way in which our occupational safety and health laws are administered on the ground—to eliminate risk. Indeed, business surveys of small and medium business indicate that occupational safety and health regulations are now their No. 1 oppressive, regulatory undertaking. Sometimes the thought behind it is good—we want to reduce industrial accidents—but the application of the law is aimed at stifling legitimate risk-taking, which is the lifeblood of business. So we need to ensure that we get those kinds of balances right. This bill does not address that issue particularly, but it is a very serious issue. Therefore I welcome a Government objective that says we have to recognise that business does include risk-taking and learn to live with it. After all, it is a proven fact of business in New Zealand, when we look around, that many businessmen and companies that go on to be very successful have been through one or more insolvencies or bankruptcies. Very often it is the very lessons that are learnt through that experience—and I am not saying it is a desirable outcome; just that it is a factual situation—that sow the seeds of being very successful in the long term. We need to bear that in mind.

Accordingly, I also commend the no asset procedure in the bill as an alternative to personal bankruptcy. The commentary on the bill states that it is designed to be less punitive to individuals and have significantly less social stigma attached to it. I think that also is a good thing. Again, we need to keep a balance, but as I have just said, the reality is that very often it is by going through bankruptcy or insolvency that we learn the lessons of life and then go on to be very successful. It is very, very important that we keep that door open to allow people to recover from such situations and go on to contribute positively to our society and our economy. Again, like Chris Auchinvole, I do draw the line at people who deliberately use our corporation law and our insolvency law to try to escape legitimate responsibilities to their creditors. As others have said, I think we need to be sure and shut the door and close loopholes on people who can, for example, deliberately, from day one, form a company with the idea that having done a couple of highly questionable projects—I am thinking, for example, of some of the leaky homes—they will then place that company into liquidation and walk away from their responsibilities. So that is the other side of the ledger and we, as I mentioned, need to take both into account and ensure that we have a balanced outcome. So with those few remarks I signal United Future’s support for this bill.

RUSSELL FAIRBROTHER (Labour) : I will not tarry long in my call. I welcome this bill and, as someone who has accepted instructions both, reluctantly, to prosecute bankruptcies, and, more enthusiastically, to defend them, I welcome the retention of the normal tests for defence of a bankruptcy and the move away from the punitive interpretation of bankruptcy. It must be remembered always that a bankruptcy is not an act of punishment of a debtor; it is a decision made by a court as to what is safe for the commercial community. It is an effort to strike a balance between someone who is having trouble paying the bills and the threat to the commercial community of that person’s continuing in business. I welcome, indeed, to the legislation four new bankruptcy provisions.

In my address today I do not intend to speak on company insolvency; others have concentrated on that. I want to go back to the personal bankruptcy provisions—a most important part of this bill. Clause 66 is significant even though it is brief. It is a direction that a court may order the non-advertising by an assignee of an adjudication if that matter is under appeal. One of the areas of adjudication in acting for people who have been placed into bankruptcy in a disputed circumstance is that the damage has often been done because the matter has proceeded to advertisement, even though a later annulment may occur. So I welcome clause 66, which follows the move away from a strictly punitive interpretation of our bankruptcy laws.

Clause 102 is an interesting addition to the legislation, and I hope it is one the select committee will spend some time on. It deals with after-acquired property. This is property that comes to a bankrupt person not by virtue of his or her estate but by other matters. Currently, the bankrupt can deal in that property until it becomes a matter of interest for the official assignee. Under clause 102, all after-acquired property automatically comes under the jurisdiction of the official assignee, as it should do.

Clause 117 deals with onerous property. It gives the assignee the ability to put other parties on notice that any interest they have in what they claim to be an asset no longer exists. There is a provision to dispute that with speed and with some responsibility attaching to it. The interesting new addition to the legislation, which should not be too onerous on anybody, is clause 155, which enables the assignee to require a bank to search its records for any business involving the name of the adjudicated person. That is a sensible addition in today’s modern society.

Clause 156 is an enlightened alteration to the present law. It brings in the right to retain a motor vehicle up to $5,000 and gives the right to have that amount increased. But, interestingly, instead of having the arbitrary maximum-value figures that a bankrupt person could retain for tools of trade and personal property, those limits have been removed and it becomes a matter of discretion for the assignee. I have to say that in practice the assignees have probably been applying a discretion rather than a strict interpretation of maximum values. This puts the practice, as I glean it to be, on to a sensible footing, so that the assignee can, in fact, appraise the bankrupt’s position and leave the bankrupt with minimal but necessary assets to live his or her life and to go about whatever lawful business he or she can pursue.

So with those few words I want to direct my thoughts towards the bankruptcy provisions of this bill. I reject my friend Mr Finlayson’s criticism of the speed. I note that in 1993 the insolvency provisions were touched on in what has now been proven to have been an inadequate way, but, of course, that was the under the National Government. This is a complete, comprehensive, omnibus bill, which means the Companies Act rewrites the bankruptcy laws and is, in some respects, much more invasive. It has taken a long time in gestation, as it should do. Let us hope that the select committee can work through the submissions with expedition and satisfy Mr Finlayson’s concerns.

DAVID BENNETT (National—Hamilton East) : After such great representations from the National Party from Pansy Wong, Chris Finlayson, and Chris Auchinvole, who have already spoken on points for and against the bill, we have yet to go into the detail of the bill, but that will come through in the select committee. However, there is a genuine need for reform of our insolvency law legislation. This legislation has suffered from a number of inefficiencies since its last review a generation ago. Insolvency laws are important in providing a framework where individuals and companies that are in trouble financially can, as a result of the law, repay the creditors of those entities and bankrupt individuals.

There are some underlying reasons for the need for change. First, since the 1960s there has been a change from individuals’ insolvency being caused by business failure to a situation of it being caused by overspending on consumer items. The movement towards a consumer society has meant that those who want to live a certain lifestyle but who do not have the means, have had to sustain that lifestyle through borrowing, and this has led to insolvency in some cases. Secondly, there has been a realisation that many of the processes involved are too restrictive and difficult to progress. Much of this relates to administrative processes and the need to align those with a much more efficient and effective system.

The first of those reasons relates to the consumer society that we now have, and that has been accentuated by the current Government’s economic policy, which has favoured a high exchange rate to encourage imports and individual consumption of consumer items. This Government favours a high exchange rate with little regard to the productive face of an export-led economy. It has presided over a continual increase in interest rates on consumerables that have to be repaid, leading to poor cash flows for individuals and families.

This Government has no qualms over increasing the availability of credit. Its student loans policy provides the incentive for young people to borrow more than they need. The Government-owned bank, Kiwibank, has the most lenient capital lending requirements in the retail housing market. This is a tax-and-spend Government that sends the wrong signals to hard-working Kiwis through its Working for Families package, which entails the entrapment of a new generation of New Zealanders into a path of dependency and reliance on Government cheque books. This Government has presided over the decline of a growing economy and has strangled the growth that would have enabled individuals to meet their debts.

The Labour Government of the late 1980s and the great National Governments of the 1990s set up this country with a strong economic base—a base that this Labour Government has strangled through its obsession with increasing compliance costs, overly restrictive labour laws, and an excessive taxation regime. There has been nothing to encourage growth—but encouraging spending is something this Government has done. The net effect of low growth and high spending is a higher rate of individual bankruptcy. This Government needs to take responsibility for providing an environment that encourages and downright promotes overspending by consumers. It is an environment complicated by a promise of a “chewing gum Budget” that sized tax cuts leading up to Christmas, but since Christmas those tax cuts have been downsized to nothing but a breath of broken promises from this Government. But people should not worry, because Cabinet papers supporting this legislation state that the bill complies with the rights and freedoms contained in the New Zealand Bill of Rights Act 1990 and the Human Rights Act 1993—that is all we need!

In essence, this bill provides, first, for companies that are in financial trouble to restructure under a voluntary administration regime. A form of voluntary restructuring is to be welcomed and, although not of the same effect as the US Chapter 11 bankruptcy examples, this will assist companies that have a prospect of rehabilitation. There is a welcome move of harmonisation, especially with Australia. However, there has been some disquiet among commentators over the bill’s failure to preserve tax losses under the voluntary regime. Combined with a requirement to keep Government debts, namely, PAYE and GST preferences, a priority, this may also limit the bill’s effectiveness.

Secondly, the bill strengthens the provisions relating to phoenix companies. As some have described, phoenix companies are where the directors of a failed company, for example company A, divert some or all of the assets to a second company, company B, at less than their economic value. This means that the legitimate creditors and company interests of company A can potentially be defeated—that is, a director of a failed company immediately transfers assets to a new company with a similar name, to the detriment of creditors. This bill bans failed directors from acting as directors of companies with such similar names, including trading names.

Thirdly, there has been a streamlining of the bankruptcy administration process. This includes the use of a no-asset procedure. This will be less punitive on individuals and will carry less social stigma. It would apply to first-time debtors who cannot repay their debts. Those are people who, generally through overspending on consumer debts, have become unable to meet their commitments. Those people are not adequately dealt with under the current law, and many of them are just living life on the edge. Sometimes they are unable to manage the difficult balancing act in the situation they get themselves into. Essentially, for those debtors who have found that they are unable to meet their commitments, bankruptcy was often onerous, and it sometimes had an overly restrictive effect on their ability to function in our society. Under the no-asset procedure, there will be a one-off opportunity for individuals with no assets to be subject to a 12-month—rather than the current 3-year—period. There will be an automatic discharge from the no-asset procedure 12 months after the date of admission.

Under the Cabinet briefing paper, discharged bankrupt people’s names are kept on the official assignee’s public register for the following reasons: first, knowing whether someone is discharged can affect that person’s creditworthiness, and it is useful for credit providers; second, it may assist the individual to make a fresh start after his or her discharge.

Overall, the bill proposes to provide a streamlined and more efficient regime for those with financial failure, with the minimum necessary compliance costs, and with no overly stifled business risk-taking through excessive penalties. It will distribute proceeds to creditors under their prior entitlements, unless public interest for greater protection of certain creditors outweighs the cost of such priorities. It will maximise returns to creditors by suppliers by a simpler and more flexible process. It will enable individuals in bankruptcy to participate fully in the economic life of the community, and it will bring closer alignment and regulation with international trading partners.

The bill does provide for reform in an area of overdue need. However, the Government needs to take responsibility for the increased potential of personal bankruptcies due to its economic policies over the last two terms.

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

Securities Legislation Bill

Second Reading

Hon JUDITH TIZARD (Acting Minister of Commerce): I move, That the Securities Legislation Bill be now read a second time. As Acting Minister of Commerce, I am delighted to move this motion. The bill is intended to encourage investment in New Zealand’s financial markets by strengthening the regulatory framework in our securities, securities trading, and takeover laws. The Commerce Committee has considered the bill and reported back in support of the key principles behind it, but it has also recommended a number of amendments to better reflect the policy intent of the bill. I would like to discuss some of those changes, because I think the committee has helped a good deal in the fine-tuning of the bill.

The committee has recommended some important refinements to the key definitions of insider-trading rules. The test of what is material information has been simplified. The committee has confirmed that the announcements using the continuous disclosure rules will meet the required reasonable period for dissemination for information to be made generally available to the market. Those changes provide greater clarity and certainty about the application of the insider-trading regime. They confirm that the continuous disclosure of price-sensitive information is the expected norm for listed companies. Conversely, those privy to information that is not made available via the continuous disclosure rules are put on notice to hold that information carefully, and to act on that information prudently.

Just as important, the insider-trading rules do not stifle experts from making a living from judging the market. Information is also considered to be generally available when it consists of deductions, conclusions, or inferences made or drawn from information that has already been disclosed to the market, or that is otherwise readily available, whether by observation, expertise, or other means. Information thus available to an investor is not insider information and cannot be subject to insider trading.

Allied to the definition of when information is generally available to the market, the bill sensibly provides a research and analysis defence for the insider-trading prohibitions. Although some people have commented on the narrow application of that defence, when it is read in conjunction with the definition of “generally available to the market”, I agree with the committee that the bill addresses concerns that skilled investors should not be caught as insiders.

The committee also recommended that the proposal in the bill to extend the meaning of “relevant interest” to include a power or control exercise by means of a practice be dropped. The idea in the bill as introduced was to cover a potential gap in the law that was exposed by recent litigation. However, with the benefit of submitters’ views on this point, the committee has opted for certainty about when the substantial security holder disclosure obligation arises, rather than for the narrow benefit of attempting to be comprehensive. References to practice in new section 5A of the Securities Markets Act, to be inserted by clause 20 of this bill, are proposed to be deleted accordingly.

I also mention the committee’s work on the declaration of the contravention mechanism. This is a new approach in the New Zealand law that is designed to make it easier for small investors to pursue claims for compensation that might otherwise prove too costly to bring to court. Although submitters were generally supportive of the idea, they noted that a declaration of contravention could be made only subsequent to the Securities Commission or Takeovers Panel taking civil penalty proceedings. This would mean that a pecuniary award arising out of those proceedings would diminish the resources available for satisfying subsequent claims for compensation. That is a valid point. So to make a good idea work, the committee recommends that the authorities or any aggrieved party be able to apply for an injunction to freeze the assets of a wrongdoer and potentially prevent that person from leaving the country. Such an injunction would be useful when, for example, it is suspected that money has been raised illegally. When that occurs investors will have a statutory right to a refund, but the difficulty is that the right to receive a refund can be frustrated if the proceeds of any illegal offer are taken offshore, or have already been used to purchase the assets of an investment scheme.

The Securities Commission continues to warn about boiler-room operations that involve cold calls to the public with dubious share offerings. Money received under those scams is very difficult to recover. The operators of those schemes are now running secondary scams by calling back with a new transaction to buy or swap the original worthless shares purchased. The chance to recoup earlier losses inevitably involves the payment of more money that, in all likelihood, will again be lost. To date, most of these cons have been run from overseas, but there is nothing to prevent them from occurring in New Zealand. An injunctive mechanism to freeze assets or prevent people from leaving New Zealand would be a tool to capture funds before they disappear for good.

The Commerce Committee has made a number of other amendments that also clarify the policy intent of the bill—some of which I will mention briefly. The committee has recognised that management banning orders are a significant punishment, and they are to be available only when there has been a serious offence or contravention of the law. With the introduction of new prohibitions against misleading or deceptive conduct, the committee has recommended provisions to clarify how the Fair Trading Act is to apply. In a similar vein, the committee recommends provisions governing how and when the regulators of such conduct—the Securities Commission, the Takeovers Panel, and the Commerce Commission—can share information with each other.

Changes proposed to the clause accepting actions in relation to a takeover from the insider-trading regime better express the range of activity recognised by the Takeovers Code as necessary and helpful to the efficient operation of the takeovers market, recognising that bank term deposits are well understood by the public, have a low default risk, and are also subject to other regulatory requirements. The committee has proposed, sensibly, that investment advisers recommending those products need not take such statutory disclosures to clients.

In conclusion, this bill is an important part of the Government’s security law reform programme. It is designed to ensure that regulation encourages an efficient and effective market for securities trading. It reduces transaction costs for trans-Tasman companies by aligning parts of our law more closely with Australia’s law, and it enhances the integrity of New Zealand’s financial markets by providing domestic and international investors with the assurance that our regulation in this area is consistent with international norms.

I thank again the members of the Commerce Committee for their work on considering this bill. I also acknowledge the very helpful contributions of many submitters. I commend this bill to the House.

BRIAN CONNELL (National—Rakaia) : I want to confine my contribution to the major issues that the Commerce Committee discussed, and add my views to those already captured, to a lesser or greater degree, in the commentary on the bill. I begin by drawing attention to the claim in the commentary that: “This bill is designed to ensure confidence in New Zealand’s capital markets by increasing the effectiveness of securities, securities trading, and takeover laws.” With the benefit of hindsight I have a concern. To seek to enhance a general confidence in the regulatory regime of a market is one thing, but to create a view that there is confidence in the market is quite another. Confidence in the market will ultimately depend on the performance of that market. No regulatory regime should leave investors with the impression that they should not rely on their own judgment or seek the advice of experts as to the consequences of their investment decisions.

The bill sets out to strengthen the law relating to insider trading. Most of us would agree that we do not want to see people getting rich or richer because they have access to information that other players in the market place do not have. The bill sets out quite unashamedly, as the Minister has already noted, to introduce a regime—albeit with some differences—similar to Australia’s. Australia’s regulatory regime is not fully effective, but in my time in Australia I remember many high-profile prosecutions being brought against senior executives engaged in insider trading, albeit those successful prosecutions were hard won. In my time in New Zealand I cannot recall, and I will stand corrected, a successful prosecution and believe, as the Minister has already indicated, that it is time to act to safeguard the integrity of our capital markets. But, and there is a but, establishing a different regulatory framework should not create an expectation that these changes will contribute significantly to an increase in findings of liability or successful criminal prosecutions.

Internationally, insider-trading and market manipulation offences are notoriously hard to nail. Market misconduct will remain difficult to detect, whatever the legal regime. A point that I stress, and it was stressed to the select committee, is that applying adequate resources towards enforcement is probably more important than the changes being proposed in this bill, yet I do not see any determination by this Government to make sure that the resources required to give a life to this legislation are being budgeted.

I was concerned, throughout the course of the select committee discussions, to avoid the creation of a regulatory regime that would stifle our capital markets in the pursuit of one or two crooks. I do not want to leave the House with the impression that “one or two crooks” is unimportant, but we, as regulators, have to weigh up the cost-benefit rewards for instituting legislation. What we must not do is put our capital flows at risk. I tried my best to temper the zeal of some of the Government members, but I fear that some parts of this bill will still promise a lot. The cost will escalate and parts of it will deliver very little. I sincerely hope I am wrong.

I draw the House’s attention to subsection (1)(a)(i) and (ii) of new section 4, “What information is generally available to the market”, to be inserted in the Securities Markets Act by clause 20. What we must not do is stifle endeavour. We must not stifle our bright young things. That will have a bigger impact on our capital markets than anything else I can think of.

Let me give a hypothetical example. A bright young market analyst in Auckland, for example, is following a stock and, based on his instinct, feels that the stock is worth pursuing. He takes a packed lunch and a pair of binoculars, finds a vantage point, overlooks the activities of the Auckland wharf and sees that company A is increasing its inflow of product, and he invests heavily in that stock and makes a fortune. Was he subject to information that was not readily available to other members of the market? Or was he just smarter than the rest? These are the complications that I do not think this bill has yet come to terms with.

R Doug Woolerton: Like looking at my bedroom; not a lot happening.

BRIAN CONNELL: I cannot attest to what happens in the member’s bedroom.

Market manipulation is quite a different matter from insider trading. The bill attempts to introduce comprehensive prohibitions against practices involving the creation of a false impression of securities trading, price movement, or market information. These distortions, if they were commonplace, would impact negatively on capital markets. The resulting uncertainty would discourage trading, reduce liquidity, create increases in the cost of capital, and compromise the ability of markets to allocate capital to those companies that could best use it. But I am not convinced that market manipulation is rife in this country, and even if it were a significant problem, I believe that trying to prove it would be nigh-on impossible. In this respect I think the bill anticipates this difficulty, so imposes wide-reaching sanctions that essentially leaves it to individuals or corporate bodies to prove their innocence if an action is brought against them.

This bill—and I refer members to new section 11, to be inserted by clause 21—creates the exception defence where trading occurs for legitimate reasons. However, there is no guidance on what might be a legitimate reason, which leaves the court in the awkward and somewhat unusual position of having to determine what the purpose of the effects-based offence was and what policy reasons would justify the provisions not being presumed to apply. I have said before, and I will say again, I think a rethink will be needed by the Government in this regard and I have some suggestions that I will table in the Committee stage. If a regulatory regime is so tough that it presumes guilt, we will create an environment of risk aversion, which will do more to stifle our capital flows than any other activity I can name.

Improvements to the bill were made primarily by National members. In particular, I acknowledge that the bill contemplates a provision for regulations to be made to make it clear that some activity is not to be caught in the prohibitions. I refer members to new section 11C(1) and (2), to be inserted by clause 21, if they seek clarification, although I do warn that the explanation is complex and a little convoluted.

The other matter I wanted to raise is management banning orders. As the Minister has already remarked—and quite rightly so—a sensible amendment has been suggested by the select committee. The bill, as it is drafted, gives the court discretion to impose a management banning order on a person if that person has been convicted of an offence against the Securities Act or if a pecuniary penalty order has been made against that person. Furthermore, an automatic management banning order is imposed for the same reason. The select committee thinks that this serious penalty is inappropriate for many minor infringements and, therefore, proposes that a management banning order may be imposed only on a person convicted of serious offences specified under sections 58, 59, and 59A of the Act, or where a pecuniary penalty order has been made against that person.

That concludes the major issues I wanted to raise. A significant number of amendments have been suggested by the select committee and, on balance, I think that they are warranted. National supports the bill going to the Committee stage, and I conclude by thanking members of the select committee who worked tirelessly on this legislation, which was, at times, very challenging and certainly is complex. I note the contribution made by advisers to the select committee, too.

RUSSELL FAIRBROTHER (Labour) : I can only welcome back Brian Connell and ask him where he was during the select committee process. There were 29 submissions. The committee had good advisers, it was well-chaired by Mark Peck, and there was a unanimous report, but suddenly the member has woken up and said he has some other ideas he wants to table. He was not prepared to speak up in the committee, but perhaps that was because Mark Peck was such a good chairman. I must say, before I go any further, that it may well be testament to Mark Peck’s fine chairmanship that he got this bill through while Brian Connell was asleep. It certainly was a difficult bill and it went through with the committee unanimous in its conclusions. The committee made some quite sensible changes to enable the securities market regulators to work together better, by trying to impose some objective standards that allow for reasonable conduct and that penalise gross misconduct. I heard that example of the person with binoculars—hiding in bushes with binoculars seems to be a subject that obsesses Mr Connell—as he made that very example in the select committee. He received an answer to his query from one of the submitters and from the advisers, but it still has not sunk home with him. I say to Mr Connell that if he is in the bushes with the glasses at night-time, and they are not night-time glasses, he is not a danger to any securities market at all.

I have to say Mr Connell is not a danger to Mr Don Brash at this stage, in what must be Mr Connell’s new leadership bid, because I note that he has come to Parliament now with a new hairstyle. The hairstyle is slightly retro but it probably celebrates Mozart’s recent bicentennial birthday. So I welcome him back to the House with his new zeal and just wish that during his time in the select committee he could have put some of those positive suggestions for the bill, which he is going to table sometime in the future, into the report so that we could all have considered them.

I note, as I browse through this fine report, which did not have any dissenting opinion—

Brian Connell: What happened in Napier? This Labour member did what no other Labour member did in 50 years—he lost a safe seat.

RUSSELL FAIRBROTHER: This bill is exactly the reason why we need to legislate against shady practice, so that mistakes like Napier will never happen again if we can organise ourselves to keep shady practice out of things such as the security market and the election market. That is the end of that for now but I will come back to it later, I tell Mr Connell.

As I was saying, before I was so seriously interrupted, I do not think Mr Connell was very happy with the removal of the serious penalty for minor offences, as we find in clause 11. It was one of those things he was pontificating on at the time, as I recall, with regard to his huge experience in New Zealand before his return to Australia, not realising that it was the other way around. He at the time thought that any bad person should be penalised, but the committee thought that minor infringements, which in fact were cases of strict liability, should not lead to penalty by way of management banning orders. It is generally accepted that most managers in this country are competent, and mistakes for which there is no mens rea—that is, mental intent—should not lead to a banning from their livelihood or from the contribution they can give to a company.

This is an omnibus bill, so it amends three or four areas of legislation. It also does the remarkably simple thing of bringing the Securities Commission, the Takeovers Panel, and the Commerce Commission to the table to talk together, as regulators in the area, when they are looking at matters that arise. So I have much pleasure in endorsing the changes to this bill from a very industrious select committee—well chaired by Mark Peck—and I await with some eagerness the suggestions by the Hon Brian Connell that will be tabled many months after this report has slipped through the minefield of his scrutiny. I endorse the bill.

R DOUG WOOLERTON (NZ First) : Mr Speaker—

Lindsay Tisch: I raise a point of order, Mr Speaker. Given the order of speaking in this debate, it should be a National call that comes next; after the Labour member.

Mr DEPUTY SPEAKER: You are absolutely right. I am not sure whether I did not see Pansy Wong or whether she did not stand. I take your word for it, but I have called Doug Woolerton. We will catch it up pretty quickly.

R DOUG WOOLERTON: Thank you very much, Mr Deputy Speaker, and to return your politeness, I will not take very long at all.

I just want to pick up on a couple of points that Mr Connell raised. He is right to say that it is very hard to track down people who are engaged in insider trading, whether they are looking through binoculars at the Auckland wharf or whatever they are doing. But there is another side to the coin.

Of course people must have confidence to invest, to be entrepreneurial, and to start up businesses and carry them through in a tricky environment in today’s business world. But there is another side to this, which is that the people investing—the mum and dad investors—must also have confidence. If we are to become a country of investors rather than a country of spenders, then the ordinary investor needs to be confident that it is not just the insiders in those businesses who will make the money. I say, with due respect, that that has been the perception since 1987, and the public has been scared away from our stock market. People have been too scared to invest in shares, securities, or any of those sorts of things. They are going into property. We know what the Governor of the Reserve Bank thinks of that, and we know what the spokespersons on finance on both sides of the House think about that. It is not wise. So we also must have confidence that the average Kiwi can invest in business through the stock market without those sorts of things happening, without all of the profits going to insiders, and without the perception that he or she has to be on the inside to win.

PANSY WONG (National) : Reflecting on the contribution made by Russell Fairbrother I cannot help but hope that Labour will bring back Mark Peck. I am sure that he would give the House a lot more inside information and more intelligent feedback on this legislation. I will be followed in this debate by a very hard-working intellectual National member Chris Tremain. I am sure that he will show the House further why he won the seat of Napier over Russell Fairbrother, judging by the quality of that speech.

The first thing I noticed from the report back of the Commerce Committee on this securities legislation was the extensive amendments that have been made to the bill. I acknowledge the members of the Commerce Committee in the last Parliament, which my hard-working colleague Brian Connell, who has great flair, was part of. A technical bill of this nature is hard to digest and it takes members a lot of effort to get their heads around the issue. It is also a sad reflection on the fact that the Minister and the ministry could have done a much better job, with their resources, to make sure the legislation got it right in the first instance.

I remember that not that many years ago the Hon Paul Swain, when he was the Minister of Commerce, made a lot of song and dance about riding into Parliament armed with a raft of amendments to the Takeovers Act and the securities legislation, and he said that he would end the wild Wild West of the New Zealand securities market. That was not that long ago, yet suddenly the House is faced with another raft of amendments to the takeovers and securities legislation. I have not seen many trophies paraded by the former Minister as to the benefit of his ending the so-called wild Wild West of our securities market. Indeed I have in my hand a press release from the Securities Commission today. The Securities Commission conducted a financial surveillance programme and it has picked 46 issuers of various financial instruments and, according to the commission, out of that number 19 have some shortcomings. One of them has a large discrepancy between actual and prospective information. Another one is an apparent overstatement of the value of property intended for sale. But apart from that, the other 17 issues that it identified were to do with wording, naming, and failure to sign the financial statements.

I agree with the Securities Commission that what is needed to improve the integrity of New Zealand’s security market is nothing more than ensuring high-quality reporting standards and making sure that the market is well informed. I actually disagree with the former president of New Zealand First, Doug Woolerton, who continues to think that the New Zealand mum and dad investors need a whole raft of legislation from the Labour caucus—which has no appreciation of how business is conducted—to protect them and advise them. I think that individual New Zealand investors are very intelligent. All that they need is a good disclosure information regime for them to make those intelligent decisions.

The reality is that the Labour Government never has any idea about, and no respect for, reward for risk taking and return on capital, hard work, and innovative ideas. Without that attitude Labour members continue to try to pass legislation. They think that they can legislate the economy to grow, to motivate investors, and to divert investment from property to other financial instruments. One has only to reflect on the Prime Minister’s opening statement, when she said that her answer to growing the New Zealand economy is to have not just a review but a major review of business structure and a fresh look at the regulatory environment, whatever that means and whatever it would contribute to the growing economic cycle. For example, earlier today the Labour Government introduced the Insolvency Law Reform Bill to introduce certainty in the financial failure and business recovery process in order to allow early intervention. Those types of lofty ideas certainly do not connect with the real business environment.

It is true that New Zealand investors tend to favour property but that is not a new or unusual phenomenon because it happens overseas. Most individuals want to own their own homes, plus more investment in properties. In some countries property prices are so high that individuals cannot afford to do that, and also there is the attraction of other investment products. So overseas investors tend to diversify their portfolio more than New Zealand investors back here. Therefore the key is to encourage the availability of more diversified and attractive investment products, and confidence in the capital and financial markets. But that confidence can only be partly provided by the existence of laws that spell out the rules and the penalties for breaching those rules. The other part has to be the enforcement of the law. We have learnt of the heavy workload of the Commerce Commission. My colleague Brian Connell has just raised the issue of enforcement. The Labour Government is particularly interested in passing legislation, but it is the enforcement and the resourcing of the agency to enforce that legislation that really amounts to something.

We have learnt of the heavy workload of the Commerce Commission. I want to know whether the Securities Commission, etc., will get additional resources with the passage of this legislation. What is most important is that New Zealand has a vibrant environment and an open disclosure regime to allow investors to make an informed decision. A prime example is that we have seen the formation of small shareholding groups that are holding companies to account at AGMs. They are not funded by Government or by bureaucracy. They are individuals who have a stake in the company and all they need is consistency of law and a disclosure regulatory framework for them to have the information to hold those directors to be accountable.

So no matter how many bills Labour aims to introduce to improve the market, its attitude of anti-business and return on capital will ensure that New Zealand’s capital and financial markets continue to lag behind. Imagine the obstacles facing any small business wanting to grow and wanting a listing on the stock market, and the bureaucracy tied up in the growth of business. I think that the barriers to the thriving of New Zealand’s securities and capital markets are due to the contempt and distrust of Labour towards business and investors getting rewarded for taking risk or wanting returns on their capital. Unless that type of attitude is changed, we can spend lots of time in this Parliament passing various bills but I am not too sure the financial and capital markets will benefit hugely from those changes.

CHRIS TREMAIN (National—Napier) : I rise to speak in support of the Securities Legislation Bill and to follow on from Brian Connell and the fine words of Pansy Wong.

I note that it is somewhat ironic that this legislation is brought to the House for its second reading at a time when the House is dealing with accusations of misrepresentation and manipulation in regard to spending prior to the 2005 election and in relation to the Labour Party pledge card. It is ironic because, on the one hand, the Government is supporting, through this bill, legislation that will toughen the penalties on insider trading, on market misrepresentation, and on market manipulation—that is what we are talking about tonight. Yet, on the other hand, that party is running for cover over the way it manipulated the Prime Minister’s fund to finance the Labour Party’s little red card, knowing full well that it was manipulating the system, and now it finds itself before the police.

National will be supporting the tightening of the securities legislation and we will also be supporting—as we indicated prior to the 2005 election—the tightening of the rules around the spending of the leaders’ funds, especially in regard to blatant electioneering.

I now turn to the main provisions of the bill. As members know, the bill proposes changes to four Acts of Parliament—the Securities Act, the Securities Markets Act, the Fair Trading Act, and the Takeovers Act—and, of course, to the well-known Takeovers Code enforced under the Takeovers Act. It is proposed that the bill be split at the Committee stage into a Securities Amendment Bill, a Securities Market Amendment Bill, a Fair Trading Amendment Bill, and, of course, a Takeovers Amendment Bill. Given the broad scope of changes recommended under the new legislation, I will focus tonight on just two aspects of the bill—that is, two provisions for change proposed in the main bill. I will focus on insider trading and market manipulation.

Firstly, insider trading is currently dealt with under the Securities Markets Act 1988. Investor confidence in New Zealand securities markets is adversely affected by any concern that persons are trading with an information advantage, as Mr Connell pointed out before. In order to ensure that confidence is maintained, it is imperative that the Securities Commission have the power to bring criminal charges in the event of a case involving insider trading. For example, in November 2005 the Securities Commission found that ABN AMRO Craigs used inside information during the Wrightson takeover bid by Rural Portfolio Investments Ltd in June of the previous year. However, no insider trading was proven, because the information did not come from an insider. The information was, in fact, about a Wrightson shareholder’s decision to sell his large shareholding to Rural Portfolio Investments. Under the proposed legislation Craigs would have faced a situation far more serious than a potential slap on the wrist from the Securities Commission. As a result, the change in legislation being debated tonight will have the effect of increasing the confidence and integrity of the market.

This bill has teeth. It provides that insider-trading conduct is a criminal offence. It imposes maximum penalties of 5 years’ imprisonment and a fine of $300,000 for an individual and $1 million for a body corporate. I note that, importantly, in relation to contravention of the trading or disclosure prohibitions the prosecution must prove actual knowledge by the defendant that the inside information in question is material information and that it is not generally available to the market.

Just as with this proposed securities legislation, I hope that the public of New Zealand can in the future have similar confidence in the integrity of our election system and our election campaigns. I trust that in the future no party will be in a position to misuse public money to misrepresent or to mislead. Just as Bob Clarkson was taken before the High Court accused of misspending—

Bob Clarkson: Spending my own money.

CHRIS TREMAIN: Exactly—I trust that all parties will be subject to the same level of scrutiny. Just as the Securities Legislation Bill proposes stiff fines and imprisonment, I propose that the same apply to our parliamentary system to prevent the situation in which we currently find ourselves and to ensure that we bring credibility to our upstanding profession.

I now focus on two of the affirmative defences provided for under the proposed new provisions of the Securities Markets Act. I ask members to note that the defendant would have to prove defence on the balance of probability. The two defences that I would like to focus on are very interesting. Firstly, absence of knowledge is a defence against a trading prohibition. Secondly, a very interesting defence is the Chinese wall defence under new Part 1, inserted by clause 21. It is very interesting to consider those defences, given the current accusations levelled at the Government about a $400,000 overspend in election spending.

Let us apply those two defences against the Labour Party overspend. Would the Labour Party have used the absence of knowledge clause as a legitimate defence on the balance of probability?

Hon Member: The Prime Minister would.

CHRIS TREMAIN: The Prime Minister would have done so. Well, that would have been impossible. Simon Power wrote to the Auditor-General months before the election campaign complaining about the use of the pledge card and the use of taxpayer funds to meet the cost. Secondly, would the Labour Party have used the Chinese wall defence to defend on the balance of probability its use of the little red card? The answer is clear: yes, it would have used the Chinese wall defence. Labour members are experts at that—in fact, they are building such a defence right now to protect themselves from the ensuing inquiry.

So, in considering those two provisions for defence within the Securities Legislation Bill, I conclude that the provisions for defence are important to ensure legitimate research and representation. I would ask that under any review of the leaders’ funds defence options similar to those in the Securities Legislation Bill be available. However, I politely ask that no Chinese wall defence be allowed when addressing the issues of future elections and future use of the leaders’ funds.

Lastly, I will focus on the consideration of the market manipulation provisions in the bill. With regard to market manipulation, the Securities Legislation Bill states that a person must not make or disseminate a false or misleading statement or information that is likely to affect trading.

Hon Tau Henare: Has that happened before?

CHRIS TREMAIN: Well, we will consider that now. The knowledge required is that the person knew or ought reasonably to have known that a material aspect of the statement or information is materially misleading. The bill makes broad provision prohibiting anything that has the effect or is likely to have the effect of misrepresenting the market.

The same process should apply to the House. Future elections should be held under the microscope to ensure that nothing is done that has the effect of misrepresenting the House. The Securities Legislation Bill makes contravention of this provision a criminal offence punishable by 5 years’ imprisonment or a fine of $300,000 for an individual and $1 million for a body corporate.

Comparing this against the last election, and in particular against the Labour pledge card, can we apply that same litmus test to this piece of marketing? Does it have the effect, or was it likely to have the effect, of misrepresenting the market? Focusing on misrepresentation, I bring to the attention of the House the picture of Helen Clark on this card. With all respect to the Prime Minister, does this picture bear any resemblance to the person who sits on the other side of the House? The answer is, of course, no. It is indeed misrepresentative and misleading. So, as with the Securities Legislation Bill, I ask not only that we get to the bottom of the $400,000 rort that has taken place across the House but also that we ensure that parties do not wantonly misrepresent reality and that, if they do, there is clear recourse for the taxpayers of this country.

In closing, the National Party supports this bill as it will promote robustness and integrity in the New Zealand securities market. I only hope that, given the Labour Party’s current predicament regarding its gross campaign overspending, we can see some robustness and integrity brought back into the election campaign process. Just as in the Securities Legislation Bill, clear rules must be put in place to prevent abuse of the system.

HONE HARAWIRA (Maori Party—Te Tai Tokerau) : Mr Deputy Speaker, would you mind if I used my laptop? My notes are on my laptop.

Mr DEPUTY SPEAKER: Not at all.

HONE HARAWIRA: Thank you. I read an article the other day entitled “Dishonest Nation”. Very interesting reading it was, too. It was all about Bob Clarkson’s run in Tauranga. In that article, renowned criminologist Dr Greg Newbold said the incidence of white-collar crime was about 40 times greater than that of benefit fraud. So why does benefit fraud make all the headlines while white-collar crime hardly rates a mention? Why are all fraudsters not treated the same?

Lindsay Tisch: I raise a point of order, Mr Speaker. At the beginning of the member’s comments he referred to my colleague Bob Clarkson, and then, further on, he talked about dishonest behaviour. In the same paragraph he conveyed the view that my colleague was dishonest. I ask, Mr Deputy Speaker, that you ask the member to withdraw that comment.


HONE HARAWIRA: I raise a point of order, Mr Speaker. I made no comment about Mr Tisch.

Mr DEPUTY SPEAKER: You did not make a comment?

HONE HARAWIRA: I made no comment about Mr Tisch, and Mr Clarkson has not objected.

Mr DEPUTY SPEAKER: No, no. We understand that. Thank you for raising the point, Mr Tisch. I did not take it that way, but others may not see it the way I see it. There was a distinct break between when the member was talking about Mr Clarkson and what he subsequently said. I do not think the House would be offended; Mr Clarkson certainly is not. I would leave it at that.

HONE HARAWIRA: When I look at my cousins in Kaitāia being prosecuted by Work and Income and being made liable for their debts, I have to ask: “What is so different about white-collar crime that lets certain people off the hook?”. I guess that one of the reasons is that white-collar crime is carried out by the so-called more respectable members of our society. Members know the ones—the really big fraudsters. White-collar crime is also described as being victimless, because there are no gang patches, black eyes, tattoos, or foul language. But believe me, the victims may be a little less obvious but they are there, all right, in their thousands. Falsifying insurance claims, for example, means that everyone’s premiums go up. It is just that the faces of victims are not staring out at us from newspaper pages.

It seems that the Government has no problem running big-budget media campaigns to dob in the neighbour who commits benefit fraud, so why does it not run similar campaigns to dob in white-collar fraudsters? The Māori Party supports any move to enhance New Zealand’s securities and takeover laws, because at the moment we are seen as being a bit of a cowboy in those areas, and even the cowboys are complaining about our behaviour. Being clean and green is just not enough. In this field, integrity is what counts. This House talks a lot about integrity—most of it tongue-in-cheek, of course—but that is indeed the issue we put to our business colleagues: integrity and full disclosure by investment traders, and advice as to their crimes.

As a matter of principle, the Māori Party supports any move that acts to ensure responsibility towards clients, and that protects the interests of clients in the event of wrongdoing. The Māori Party supports transparency, accountability, and the quality of being up front. The Māori Party is driven by the call of our people for justice, for knowing and respecting the rules, and for not trying to find ways to bypass them. The Māori Party urges this House to recognise that the best way to get business people to respect the concept of integrity is to put the concept of integrity into practice ourselves, and to honour the Treaty of Waitangi.

It is also interesting that this bill increases the penalties and remedies, in order to deter breaches and encourage compliance. A breach of the Securities Act has a maximum penalty of up to $500,000 for individuals and $5 million for a body corporate. For insider trading the penalty is 5 years in jail, with a $300,000 fine for an individual and a $1 million fine for a body corporate. Yet I am told there have been no prosecutions in this country, to date, for insider trading. We are told that existing laws are complicated, difficult to enforce, and easy to avoid. The changes are therefore necessary to ensure market integrity and confidence. Hopefully, the changes will give confidence to people who may be considering investing but who have not done so because they know that the sharks are still swimming freely, having escaped the net of the law until now.

A lot of white-collar criminals have the luxury of being able to afford a heap of expert legal hot-shots and accounting wizards, and it is little wonder that the Inland Revenue Department has a hard time catching up with the big boys. But that department does not seem to have the same difficulty with the little business people, and it sure has no problem beating up on the poor little beneficiaries. Just now in my kōrero I want to share a true-life story that came into our office. A 73-year-old grandmother rang us up in a state of major distress. She had been reported for benefit fraud, because Work and Income New Zealand reckoned that her male friend was staying over for a couple of nights a week—73-years-old, for goodness’ sake. Are we serious?

Shane Jones: Viagra. Viagra.

HONE HARAWIRA: That kuia was in despair. She was seriously upset that she and her male friend were being treated like criminals by the “Winz police”. She is 73-years-old—just about as old as Shane Jones. We managed to get the case withdrawn, of course, because the allegations were baseless innuendo. But the traumatic effect of that experience has taken its toll on our kuia—an auntie of Shane’s, actually. It made me wonder why we dedicate so much money to hassling the poor and the elderly, when multimillion-dollar corporate thieves simply skip the country, hire a flash lawyer, declare bankruptcy, and do not give a toss about poor little investor.

During our time in this House, we will look to see how effective this law is. If it turns out to be as toothless as the current law, the Māori Party will promote legislation to genuinely plug up the holes, and to nail those white-collar criminals.

  • Bill read a second time.

Education Amendment Bill

Second Reading

Hon JIM SUTTON (Minister of State) : I move, That the Education Amendment Bill be now read a second time. The bill contains two areas of significant policy change. Those are to establish a new regulatory regime in the early childhood education sector, and to extend the national student number to both the early childhood and compulsory education sectors. This bill also implements a number of changes to reform and improve the state of education legislation in order to make it more workable and less out of date. The chair and members of the Education and Science Committee in the previous Parliament deserve our thanks for their careful consideration of this bill, and for the constructive amendments they have recommended.

This Government has undertaken major reforms in early childhood education. Our 10-year strategic plan is increasing participation in quality early childhood education, improving quality, and promoting effective relationships between all those involved. The Government intends to implement a new regulatory regime for early childhood education to underpin that plan.

The bill replaces Part 26 of the Education Act 1989 with a new Part 26. Existing provisions contain ambiguities; the new amendments will give the early childhood sector more certainty about the standards they need to meet in order to become licensed and receive Government funding. Under the new requirements, all early childhood education and care centres will need to be licensed. Exceptions are home-based education and care services, and hospital-based education and care services. Those services can choose to be licensed. Play groups can also choose to become certificated play groups, in order to receive Government funding. New regulations will set out the minimum standards that early childhood services and play groups will need to meet in order to become licensed or certificated. Those new criteria will ensure greater consistency in licensing standards than is currently the case. The new regulations will be phased in over 6 years—giving everyone time to meet the standards—and follow extensive consultation.

New Zealand is one of the first countries in the world to have a nationwide early childhood education curriculum. Including reference to it in legislation shows its significance to quality early childhood education. This bill enables the Minister of Education to prescribe a curriculum framework for licensed and certificated services after thorough consultation with all those involved. All these new proposals were the subject of consultation with early childhood sector representatives throughout the country in June and July 2004.

The bill amends the Education Act 1989 and the Education Standards Act 2001 to enable kindergartens providing an all-day service to meet the same registration requirements as other early childhood services providing a full-day’s service. Kindergarten contract negotiations have resulted in kindergarten teachers’ performance being assessed against agreed professional standards. An amendment to the State Sector Act 1988 allows the Secretary for Education to prescribe guidelines for kindergarten associations to use when assessing their teachers against those standards. Amending the Act will ensure national consistency in the application of standards.

The second significant amendment to the Education Act 1989 will see the existing National Student Number extended throughout the whole education sector. The National Student Number is already used in the senior, secondary, and tertiary sectors to keep students’ academic records correct and to ensure the efficient and accurate funding of our education institutions—to stop people double-dipping, I suppose! Extending the National Student Number is necessary to improve the data-management processes for the education sector. The National Student Number will enable information in different systems to be linked together for more efficient analytical use. Researchers will be able to obtain statistical data for longitudinal research on student achievement. This data will identify trends, but not individual students.

This new legislation has been developed in consultation with the Privacy Commissioner, and safeguards will be in place to ensure that extending the National Student Number will not expose it to misuse. Authorised uses of the National Student Number are specified as early childhood services, schools, tertiary education organisations, the Ministry of Education, the New Zealand Qualifications Authority, the Tertiary Education Commission, Career Services, and any other body or body agency declared by regulations following consultation with the Privacy Commissioner.

Authorised users may use the National Student Number for only one or more of the approved uses. All other uses are prohibited. Approved uses are monitoring and ensuring a student’s enrolment and attendance, ensuring education providers and students receive appropriate resourcing, statistical purposes, research purposes, and ensuring students’ educational records are accurately maintained. A maximum fine of $15,000 is provided for any instance where the national student number is misused.

Other amendments in the Education Amendment Bill are designed to improve administration efficiency and to transfer and update sections of older legislation that is still in force to the Education Act 1989. Sections that are no longer necessary are repealed. The sections covering the powers and duties of the Teachers Council have been amended to enable the council to handle the process of registration and discipline more efficiently. This includes a penalty for breaching the disciplinary tribunal orders relating to confidentiality, so vulnerable witnesses are better protected.

A number of amendments are designed to recognise the practical working environment for boards of trustees. Boards will no longer be required to hold an annual meeting. The current requirement serves little purpose, and most boards find it irksome. Similarly, the time that a board has to decide how to fill a casual vacancy has been extended from 4 weeks to 8 weeks.

The bill contains amendments to ensure that international students enrolled with adult and community education providers are covered by the same legislation that applies to international students enrolled with other education providers. The bill also gives effect to Cabinet’s decision that international students in the early childhood sector do not receive Government subsidies. The bill allows the Crown to share revenue from applying the international student levy to integrated schools with the proprietors of those schools. That recognises the contribution that proprietors make to capital costs at those schools. Minor and technical changes to improve administration efficiencies are made in the tertiary sector. Other provisions, including the offence of wilful disturbance of a school or early childhood centre, school transport provision, and bonded scholarships for entry to teaching, are updated and transferred to the Education Act 1989.

A similar process has been followed for the Education Lands Act 1949; provisions applying to leases and licences of school property have also been updated and transferred to the Education Act 1989.

I will be circulating a Supplementary Order Paper proposing several amendments for consideration during the Committee stage of the bill; for example, the ability to use the Student Loan Scheme Act 1992 to recover any money owing if the recipients of bonded scholarships default on their obligations, and some corrections and minor changes to the bill that will improve the drafting of some sections of the bill.

In conclusion, the bill continues the Government’s commitment to raising the standards of our education system and to tidying up and streamlining education legislation to make it easier to follow, and more efficient to implement. I commend the bill to the House.

Hon TAU HENARE (National) : I thank the previous speaker for that absolutely riveting speech, which no doubt was written by the Prime Minister’s office.

First, I congratulate the chairman of the Education and Science Committee on a good report. I agree with everything in it. I think our party agrees with most things in it. The problem we have is that when we read the report and hear what the Minister has just said, we know a whole lot is going on that we are not privy to. That is really great. The Minister has just talked to the House about quality education in the early childhood sector, but nowhere in that speech did he refer to the 20 free hours policy. That policy is a huge policy for teacher-led centres, both in the private and the public sector.

When did the Government come up with that policy? It was about 2004, in the Budget. The policy did not have any money, any roll-out plan, or any implementation plan. Oh, no—the policy was just thought up the day before the Budget. The Government thought that it would give early childhood centres 20 free hours, but it was just for the Government stoolies. Then all of a sudden, just before the election, Government members said to themselves that they had better roll it out for teacher-led private providers as well. However, a year after the Government first thought of that policy there is still no implementation plan or roll-out plan, and the Government still does not know how much that policy will actually cost. That is a huge mistake to make.

How do we know that? We should look at the New Zealand Educational Institute agreement with the Kindergarten Teachers Association just last week. What did they get in that agreement? There is a 13-month agreement just to talk over the implementation plan for 20 free hours—

Lindsay Tisch: Say that again. Is that true?

Hon TAU HENARE: They got a 13-month agreement. Those guys went out on a national strike. Rick Barker knows what a national strike is. He has been on plenty. In fact, he has been on one ever since he came to the House. Those guys got a 13-month agreement. There was no wage increase, no better pay and conditions—as we might think the union would have battled for. What did they get? They got a 13-month agreement to sit down and talk about a programme the Government does not know how to roll out or what its cost will be. That is absolutely—well, I am absolutely horrified!

But here is the thing. Those 20 free hours are not available to kōhangas, and they are not available to playcentres, because they are not so-called teacher-led. Why does the Government not take all this money it apparently has—the hundred million dollars that the 20 free hours a week policy will cost at the end of the day—and just give it to the centres, and tell the centres to get on with the job of teaching our children? I know that bulk funding is not National policy but, by crikey, I am a real fan of bulk funding. I will tell members why. It keeps those members over there out of the business of teaching our children. I say we should leave the teaching of children to the experts, not to the “spin machines” over there.

What is disappointing tonight is the fact that the Minister of Education is not even in the House. He is not even in the House to talk to the bill.


Hon TAU HENARE: It is called the Education Amendment Bill, and he is not even here in the House.

Hon Rick Barker: I raise a point of order, Mr Speaker.

Mr DEPUTY SPEAKER: Thank you, Mr Barker. I think I am aware of what your point of order is. No mention should be made of the absence or otherwise of any member. Is that it?

Hon Rick Barker: That is it, Mr Deputy Speaker.

Mr DEPUTY SPEAKER: Thank you, Mr Henare.

Hon TAU HENARE: I hear through the Minister that he and his side are going to introduce not just one Supplementary Order Paper, not just two Supplementary Order Papers, but a whole raft of Supplementary Order Papers. Now, what does that suggest to the House? Well, it suggests to me that they do not know what they are doing. You would have thought they would have got it right.


Hon TAU HENARE: Yeah—I am saying: “You would have thought”—


Hon TAU HENARE: I raise a point of order, Mr Speaker. I want to raise this issue with you and see whether we cannot do something about it. I am guided by you—am I allowed to say that? Yes, I am. I am referring to the restriction on the use of the word “you”. I think it is archaic. I think it has to be removed, and I seek some sort of ruling and guidance from you on that.

Mr DEPUTY SPEAKER: I cannot, of course, agree with you, but I do not disagree. At the moment it is not allowed and the member may not use it. Most members occasionally use it, but it is not allowed under Speakers’ rulings and the Standing Orders. So the member will desist, please, and continue his contribution.

Hon TAU HENARE: Thank you, Mr Deputy Speaker. Is it not amazing that the only people from the Labour Party—well, let us put it this way. I know I am not allowed to do this, but let us count the National Party members present: one, two, three, four, five, six, seven, eight, nine, 10, 11, 12, 13, 14, 15—15 members in the House at 5 to 10 at night—

Christopher Finlayson: Including the leader.

Hon TAU HENARE: —including the leader of the National Party: the next Prime Minister of this country, the man who does not go around the country spending $450,000 on a pledge card.

If Labour thought about all the stuff the Hon Jim Sutton talked about tonight in his speech, it could actually put that on a pledge card. Labour could take the $100 million it has allocated—or not allocated—for the 20 free hours a week policy, and give some money toward the pledge card so that maybe they could write down all those things they are going to do, for instance, like the regulatory regime.

We have enough regulations in the industry right now. Why do we need more? This industry—at the moment I am concerned with just the early childhood sector—is over-regulated, over-bureaucratised, and over-sanitised. No one can do anything about it. My mother-in-law runs an early childhood centre. What she complains about most is not the kids or the teachers.

Pita Paraone: The mokopunas.

Hon TAU HENARE: No, she does not complain about her mokopunas; she loves her mokopunas—especially my kids. What she complains about is the bureaucracy and having to fill out forms. Her job is having to fill out childcare subsidy forms. Why should it fall to her to do that? Why can the parents not do that? Or why can the parents not pick the subsidy up in a tax rebate? Those are the sorts of things this industry needs—and some clear, basic regulations and standards.

Those Government members always wanted to be early childhood teachers. They could not get there, so they became members of Parliament. They could not do the training or the hard yards, as those teachers inside our early childhood centres have done.

Sue Moroney: They couldn’t teach that member.

Hon TAU HENARE: Oh, not that member—for the last 6 years I have worked in kōhangas, and Ms Moroney would not know what the inside of a kōhanga looked like. She would not know what the inside of an early childhood centre looked like. It is not those members’ business, but they want to tell early childhood centres how to run their businesses. It is not Government members’ business but they want to tell those teachers how to run their businesses—and that is the problem.

Does the House know there is a regulation about the measurements of a toilet, for goodness’ sake, as to how far it is off the ground? For goodness’ sake, children will go poo-poos wherever and whenever they so damn well wish! There is a regulation that states a teacher is not allowed to be left alone changing a child’s nappy, just in case something might happen. For goodness’ sake, the Napier earthquake happened, but people got on with their blimin lives. They did not rely on the Government to get them out of the poo all the time.

I commend this report, because it is a good report. It looks at some of the regulations, and proposes that we should tidy them up a bit. It could have gone further, and I think it is imperative that we, as a Parliament, make sure we get rid of regulations that should not be there. That is why we are actually opposing it. It is a good report, but it does not go far enough and it is time for us to go that extra step and cut the regulations. We should get rid of the regulations and then we will be on the right track, and we will have our kids educated in the way they should be.

MOANA MACKEY (Labour) : What a lot of bluster from Tau Henare, the member of this House who has been in so many different political parties that no matter whom he meets in New Zealand he can honestly say to them that, at some point in his political career, he has agreed with them. I am sure his career will not end with the National Party. I am sure that the Hon Tau Henare will move on and find greener pastures, as his career history shows he is wont to do.

Mr Henare raised the fact that there are a lot of National Party MPs in the House tonight, so I want to say one thing: we have all noticed the fact that the National Party members sit here as though they are at the movies. They come down to the House in droves and sit here as though they are in a movie theatre. Labour MPs have work to do. I do not know why the National Party MPs have no work to do. When they come down to the Chamber, they do no work; they sit in here as though they are at the theatre or the movies. They fawn over whoever is making a speech, standing up and saying: “Wasn’t that person absolutely wonderful! I really concur with everything he said.” But when are they going to do some work?

That was an interesting speech from the Hon Tau Henare. He talked about too much regulation, but which party is the first party to jump all over the Government whenever anything goes wrong? What happens whenever there is any question about there not being enough rules or about the Government not being clear or specific about what it required of early childhood providers when giving out Government funding? The first time something goes wrong in the early childhood sector, one can guarantee that the National Party will be all over it.

  • Debate interrupted.
  • The House adjourned at 10 p.m.