Tuesday, 25 March 2003

Tuesday, 25 March 2003

Tuesday, 25 March 2003

Mr Speaker took the Chair at 2 p.m.

Prayers.

Questions for Oral Answer

Questions to Ministers

Electricity—Reforms

1. GORDON COPELAND (United Future) to the Minister of Energy: Does he stand by his statement made last April that Max Bradford’s 1998 electricity reforms were “irreversible or mostly irreversible”, and does he believe the market model is the best way forward for the electricity industry?

Hon PETE HODGSON (Minister of Energy): Yes, I do. The irreversible part of the Bradford reforms included the forced sale of community-owned generation assets. That was an unconscionable exercise in coercion. The reversible bits were reversed in legislation passed in 2001. As to the market model, the Government is actively exploring whether some form of intervention to improve security of supply should be taken, though as with other infrastructure issues this country faces, that will take longer than a year or two to address.

Gordon Copeland: What then does the Minister make of the Prime Minister’s statement yesterday with regard to the electricity industry when she said: “We are contemplating significant change”, and what changes are being considered?

Hon PETE HODGSON: The Prime Minister, the Minister of Finance, myself, and many other Ministers in the Government are saying that we are open to a variety of options. There are interventions around in other parts of the world, and we are looking at those to see whether they have any use in the New Zealand situation.

Mark Peck: What is the Minister’s chief concern with the operation of that market?

Hon PETE HODGSON: The design of the market is supposed to ensure that new generation is built neither too soon nor too late. It has become clear that incentives for building enough dry-year reserve generation in a timely fashion might not be strong enough.

Gerry Brownlee: Has the Minister seen the statement made by Steve Barrett, the chief executive of Contact Energy, that: “To blame the current market structures for lack of new fuel resources, or a dry summer, is to shoot the messenger.”; if so, why is the Government proposing policy to interfere in the market in the future rather than encouraging savings now to avoid the looming crisis, and dealing with the Resource Management Act so that Contact Energy could go ahead with the three proposals it has on the books right now?

Hon PETE HODGSON: No, I have not, but I have seen a press release from the member who asked the question, in which he says that Contact Energy’s price increase in Wellington of 6 percent was being blamed by the company on a narrowing gap between generating capacity and demand, and a response a few hours later from the company itself, which said: “No, it isn’t.”

Gerry Brownlee: I raise a point of order, Mr Speaker. You are going to rule against me, but I will take the opportunity to point out that the Minister was asked at the end of that question—

Mr SPEAKER: The member will not have the opportunity to point that out. He knows I will rule against him.

Gerry Brownlee: I raise a point of order, Mr Speaker. If a Minister is asked to comment on a statement made by a person outside this House, and chooses to do so, should he not restrict his answer to the statement in question?

Mr SPEAKER: No. The Minister is responsible for his own answer. I am not. All I have to do is see that he addressed the question. He did.

Gerry Brownlee: He’s a dodgy Minister.

Mr SPEAKER: The member will now stand, withdraw, and apologise for that comment.

Gerry Brownlee: I withdraw and apologise.

Rt Hon Winston Peters: How does it feel to have lost the confidence of the Prime Minister, who is now bringing in Dr Cullen in an endeavour to unravel a situation borne of his inertia—in an attempt to stop the blackouts from coming this winter?

Hon PETE HODGSON: I happen to be a member of Dr Cullen’s infrastructure group, and that group is looking at a range of infrastructure issues, including roading. A decade of amiable disregard by that Government during the 1990s has left this country short on infrastructure across many industries.

Hon Ken Shirley: Does his Government support the State-owned generator Meridian Energy Ltd investing $600 million in Australian generation, while the New Zealand market is squeezed by lack of generation capacity, and will he concede that the Government’s dominance in the market through State-owned enterprises is preventing the full realisation of the electricity reforms?

Hon PETE HODGSON: I am not an ownership Minister for the company, but I am sure the ownership Ministers would have required Meridian Energy Ltd to ensure that any investment offshore would not deleteriously affect investment in New Zealand. I make the point that was made by the chief executive in yesterday’s paper, which is that wind turbines happen to be cheaper by the dozen.

Jeanette Fitzsimons: Can the Minister confirm that the low prices delivered up until now by a market system which cannot foresee dry years or gas depletion, have driven electricity demand growth to 5 percent a year—considerably faster than the growth of the economy; and how does he propose that the national energy efficiency and conservation strategy should deal with that demand growth?

Hon PETE HODGSON: That is a very good question. The indications are that the substantial increase in demand this year has been driven, at least in part, by drought itself—that is to say, drought on the East Coast of New Zealand. The increase in demand between 2002 and 2001, by contrast, was much less; in fact, it approximated to zero.

Gordon Copeland: Will the Government take specific steps to encourage energy conservation in an attempt to avert power cuts this winter, and give generators a clear message that the hydro shortage situation should not be used to gouge excessive profits from New Zealand commercial and domestic customers?

Hon PETE HODGSON: I have met with the industry on a number of occasions, and its members and I are of one view, which is that conservation will need to be considered and start soon, though not necessarily a full-on conservation campaign; and, what is more, that it is in the interests of the industry to manage that, because it has a lot of ability to do so.

Iraq—New Zealand Aid

2. Hon BILL ENGLISH (Leader of the Opposition) to the Minister of Foreign Affairs and Trade: Is the provision of peacekeepers, mine clearing expertise and other humanitarian aid to post-war Iraq dependent upon United Nations control of Iraq; if so, why?

Hon PHIL GOFF (Minister of Foreign Affairs and Trade): No. As the member ought to be aware, we have already committed humanitarian aid to Iraqi people suffering from the consequences of war. With regard to peacekeeping and mine clearing, the member will also know that under the previous Government and this Government, we have generally carried out those functions under the auspices of the United Nations.

Hon Bill English: Why is it that all of a sudden the Government is much more interested in the purity of its multilateralism than it is in the suffering of ordinary Iraqis who will be affected by this war?

Hon PHIL GOFF: Our concern for the suffering of ordinary Iraqi people was demonstrated by New Zealand being probably one of the very first countries in the world to make a commitment of funding to help with food, shelter, and medical supplies. That initial commitment will be further contributed to as the need becomes apparent.

Tim Barnett: Has he had discussions with representatives of the coalition countries with forces in Iraq as to their views about the post-conflict involvement of the UN in Iraq; if so, what are those views?

Hon PHIL GOFF: Yes, I have discussed that question with the High Commissioners for Australia and the United Kingdom, and the United States Ambassador. The view of all three was that it was clearly important that the United Nations be involved in Iraq at the end of hostilities. I note that Clare Short recently made a trip to the United Nations to press just that point on behalf of the United Kingdom. There is, of course, a parallel in Kosovo where the conflict did not have the explicit authorisation of the UN. Nevertheless, it was the UN that was called in to clean up the mess at the end.

Hon Richard Prebble: If it is now Labour’s policy that peacekeepers have to be under the United Nations, will the Labour Government withdraw New Zealand defence personnel who are currently acting as peacekeepers outside UN authorisation in Bougainville, Papua New Guinea, Bosnia, Afghanistan, the Sinai, and Cambodia, or is it this Labour Government’s view that when it comes to Iraq, it just wants to put forward an anti-American view?

Hon PHIL GOFF: In respect of the list of countries given, the member was wrong on just about every count. For example, in respect of Bougainville, there is a UN office for the management of Bougainville. In respect of Kosovo, there is a UN role in supervising the civil administration. The one exception, which I think he did mention, is the Multinational Force and Observers (MFO) in the Sinai. That exception exists, because it was the will of both countries involved in that conflict—Israel and Egypt—that we provide assistance in the way that we have over the last 20 years.

Hon Richard Prebble: I raise a point of order, Mr Speaker. The House should know that the answer we have just been given is very misleading. I checked with Defence today, and that is the list they gave me of peacekeeping operations where our personnel are not under United Nations control.

Mr SPEAKER: Order!

Hon Richard Prebble: I guess it is about time they told the Minister of Foreign Affairs and Trade.

Mr SPEAKER: The member will be seated. I am warning the member that when I tell him to sit down, he sits down, and he knows that. He will not be doing that again this question time. That is debating material, and the member knows it.

Ron Mark: How seriously should the people of New Zealand take this Government’s offer of assistance in the reconstruction of Iraq and the distribution of humanitarian aid, when it seeks to allocate $40 million to Indonesia—a nation that is responsible for the deaths of five of our service personnel—and only $3.3 million towards Iraq at this point in time?

Hon PHIL GOFF: If the member is to make comparisons, he ought to do so in a way that compares like with like. The figure he quoted for Indonesia is assistance being given over a period of 4 or 5 years. The figure he has given for Iraq is the initial commitment of resources that we have made immediately to that country, foreshadowing that other assistance will follow.

Keith Locke: Does the Minister agree that not only is it important that the UN humanitarian effort remains truly independent, but also that if UN peacekeepers were in any way subordinate to the invading American force, that would seriously compromise or undermine the United Nations?

Hon PHIL GOFF: We will be providing aid largely through United Nations agencies, and also through non-governmental organisations. The UN can operate to provide humanitarian aid without any further mandate. With regard to peacekeeping forces, clearly the role of peacekeeping forces post-conflict has to be quite separate from the role of the military forces that were involved in the action in the first instance.

Hon Peter Dunne: If the Government does receive a request via the United Nations for the involvement of New Zealand peacekeeping forces in post-war Iraq, what would be its response?

Hon PHIL GOFF: New Zealand has a proud reputation for being a good international citizen. We have always tried to respond positively to any requests made by the UN for our assistance, such as in the tragedy that is occurring in Iraq at the present time.

Hon Bill English: Given the Government’s concern about correctly following the rules and conventions of the United Nations, why has the Government allowed the State broadcaster, Television One, to broadcast pictures of prisoners of war in contravention of international law?

Hon PHIL GOFF: A lot is being said about breaches of the Geneva convention in respect of prisoners of war. Sadly, I have seen photos of prisoners of war held by the coalition forces, and I have seen photos of American prisoners of war held by the Iraqis. As I understand it, both are in breach of the UN convention. As the member knows, this Government does not direct Television New Zealand on the news it provides. I am surprised that the member is recommending that we should direct it.

Hon Richard Prebble: I raise a point of order, Mr Speaker. I was completely unable to hear the conclusion of the Minister’s answer. I am very interested to know what the Government is doing about what the Minister says are breaches of the Geneva convention. I think he should be able to give the final part of his answer so that the whole House can hear it.

Mr SPEAKER: The final sentence was drowned out by what I thought was an unreasonable amount of noisy interjections. I did just hear the answer. Could the Minister repeat the final sentence as he gave it.

Hon PHIL GOFF: I said that this Government and, in fact, any Government in New Zealand, does not have the power to direct any news organisation in this country as to what it provides. I was surprised that the Leader of the Opposition was suggesting that we should have that power.

Early Childhood Education—Services

3. HELEN DUNCAN (NZ Labour) to the Minister of Education: What initiatives have been put in place to strengthen support for early childhood education services?

Hon TREVOR MALLARD (Minister of Education): The most recent is the planned integration of the Early Childhood Development agency into the Ministry of Education. We want to make sure there is a cohesive—[Interruption] There we go again—7 percent and falling! We want to make sure there is a cohesive, integrated, and streamlined approach to early childhood education. Later this year all the relevant experts will be under one roof to ensure the effective implementation of the early childhood education strategy, which aims to improve quality and participation.

Helen Duncan: Can the Minister tell the House how this initiative fits with the Government’s broader objectives for early childhood education?

Hon TREVOR MALLARD: Relatively briefly, this Government has increased the level of funding received by all services, introduced equity funding, increased the pool of money for buildings and extensions, improved the requirements for teachers’ qualifications, made available scholarships and grants for teacher supply, and provided funding to establish centres of innovation. Like Dr Brash rapidly becoming the favourite of the people for the National Party leadership, we believe in early childhood education.

Phil Heatley: Can the Minister provide an assurance that this old-left, statist merger of the Early Childhood Development agency into the ministry will not result in cuts to early childhood resources and staff; if not, why not?

Hon TREVOR MALLARD: I totally reject the assertion in the first part of the question. I will be sending it to my Labour electorate committee to remind its members that at least some people think of me in that way. I am quite prepared to give the assurance the member seeks.

Hon Brian Donnelly: How does the policy of funding rate 2 early childhood education providers at a rate so much lower than kindergartens that they could not provide pay parity rates even if they wanted to, strengthen early childhood services?

Hon TREVOR MALLARD: Rate 2 funding is available for many more hours than rate 3 funding is.

Superannuitants—Overseas Travel

4. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Social Services and Employment: With respect to superannuitants who travel abroad, does the Work and Income website state “If you don’t tell us you are going overseas and your payments continue, and you stay away for more than 30 weeks, you’ll have to pay all the money back.”; if so, how quickly does Work and Income take action when a superannuitant fails to so advise the department?

Hon STEVE MAHAREY (Minister of Social Services and Employment): The words quoted by the member are included in a section providing information for people on superannuation who intend to travel overseas. The section includes a request to “check with us before you go”, as there are additional criteria relating to medical treatment, working for aid agencies, or unforeseen delays. Work and Income data matches with a variety of agencies, including the Customs Department, and actions any cases raised in this process. Generally, a letter is sent within 2 to 3 weeks.

Rt Hon Winston Peters: The Minister said sending the letter took between 2 and 3 weeks. That being the case, has he discussed with his colleague the Minister of Immigration the huge inconsistency of Work and Income—relying on information gleaned at our border and available to the Immigration Service—being able to act within 2 to 3 weeks against hard-working New Zealand superannuitant taxpayers, yet the Immigration Service taking years to act in the case of tens of thousands of overstayers?

Hon STEVE MAHAREY: No, I have not discussed that. I want to say that, generally, a letter is sent in 2 to 3 weeks, and that, of course, is a practice that has been in place since August 1991, when the member for Tauranga was in Cabinet.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I know that it is normal for Ministers to add on bits to their answer that refer to the past ministerial experience of members on this side of the House, but what did that add to the issue of whether he had talked to his incompetent colleague about her inactions?

Mr SPEAKER: The Minister addressed the question.

Georgina Beyer: What does Work and Income—[Interruption]

Mr SPEAKER: I will ask the member to start again, and anyone who interjects while she is asking the question will leave.

Georgina Beyer: What does Work and Income do to publicise rules regarding payment of superannuation while a person is on an overseas trip?

Hon STEVE MAHAREY: Work and Income produces booklets that set out the general rules. The booklets recommend that people intending to travel overseas call Work and Income for detailed information, using one of the freephone information numbers. Work and Income is currently working with travel agent associations to ensure that brochures are available in all travel agencies. I seek leave to table the Retired and Going Overseas booklet, which some members may well want in the near future.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is not.

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

Mr SPEAKER: There is objection?

Rt Hon Winston Peters: Yes, there is objection, simply because this Minister knows full well—and this is a point of order—that usually, as a matter of courtesy, tabling occurs at the end of question time.

Mr SPEAKER: That is perfectly correct, and the member is right. I will ask the Minister to do it then.

Katherine Rich: In the light of the fact that only seven people were prosecuted for overseas benefit fraud in the 2000-01 financial year, and none of them were superannuitants, can the Minister confirm whether he believes there are people whom his department is not catching; and can he explain why he remains ideologically opposed to allowing the Ministry of Social Development to engage private investigation services when, clearly, Work and Income’s own benefit fraud detection is weak at best, and many other Government departments, from the Ministry of Agriculture and Forestry to the Department of Conservation and the Accident Compensation Corporation, use such services to detect illegal acts?

Hon STEVE MAHAREY: I do not remain ideologically opposed to hiring private services to augment what the Government would do, but in the case of Work and Income we have one of the most successful agencies, I think, across the board. In particular, in relation to the collection of debts, I think it does a very effective job.

Rt Hon Winston Peters: Does the Minister think it is right, proper, and fair for his department to be hounding elderly New Zealanders, many of whom have worked 45 or 50 years and paid their taxes, and to act within a matter of weeks, which is totally discriminatory, when he has regard to the fact that his colleague will not take action for years against what she has said is up to 20,000 overstayers in this country, all of whom are foreigners?

Hon STEVE MAHAREY: That is how one gets to be an overstayer; one has to be a foreigner in the first place! Dang, he is quick! Applying the rules that Mr Peters’ earlier experience in Cabinet put in place, we do not hound any one. He did not hound those people; neither do we. These are simply the rules, and we send out the letter asking for the money back, if they break them.

Development Assistance Programme—Asia-Pacific Region

5. JILL PETTIS (NZ Labour—Whanganui) to the Associate Minister of Foreign Affairs and Trade (Official Development Assistance): How are contributions from New Zealand’s development assistance programme supporting democracy in the Asia-Pacific region and what are the benefits?

Hon MARIAN HOBBS (Associate Minister of Foreign Affairs and Trade (Official Development Assistance)): Contributions from New Zealand support democracy and good governance by providing election support, training judges, strengthening civil society groups, and other contributions, such as the provision of $1 million for New Zealand police to mentor Solomon Islands police. This helps to reduce poverty and bolsters regional security, which in turn increases trade and investment opportunities for both the recipient country and New Zealand.

Jill Pettis: What is the most recent initiative the Government has taken to support democracy in the Asia-Pacific region, and what is the desired outcome of that initiative?

Hon MARIAN HOBBS: Just last month New Zealand gave $455,000 to help Cambodia run its national elections. After 3 decades of war and violence, a positive outcome for Cambodia would be a peaceful, just election in which all Cambodians get a say in how their country is run.

Dr Wayne Mapp: Why does the Government not put priority on dealing with the humanitarian and reconstruction issues for a future democratic Iraq, instead of—this week of all weeks—focusing on the Asia-Pacific region, which is, obviously, the ideological obsession of the Prime Minister?

Hon MARIAN HOBBS: There are many wars in the world. The contribution of New Zealand aid is focused, first of all, on our backyard. I would have thought that the member would realise that if there were a civil war in our backyard, it would have an immediate and quite detrimental impact on this country.

Dail Jones: What is new about this policy, given that the report of the ministerial review team, of March 2001, indicates that the origins of this policy go back to 1901, and that successive New Zealand Governments have, since that time, maintained this policy?

Hon MARIAN HOBBS: What is new about this policy is that, firstly, it is a focus on the Pacific—our near neighbours—and, secondly, it is a focus on the eradication of poverty. That is a quite distinct change from how New Zealand aid, which is now a semi-autonomous body, has been working since 1901.

Free Trade—United States

6. Hon RICHARD PREBBLE (Leader—ACT NZ) to the Minister for Trade Negotiations: In light of the Prime Minister’s statement to Parliament on 11 February this year “we have stepped up our promotion of free-trade negotiations with the United States, following the positive reference to New Zealand in the US Trade Representative’s letter to Congress on his intention to negotiate with Australia”, what progress has been made on a bilateral free-trade deal with the United States?

Hon PHIL GOFF (Acting Minister for Trade Negotiations): The Government has made sound progress in laying the foundation for a trade deal with the United States. In his letter to Congress in relation to the Australian free-trade agreement, the United States Trade Representative, Robert Zoellick, indicated that he would consult with Congress on the possibility of a similar agreement with New Zealand. Since that time, such an agreement has received considerable support within Congress and also from the United States business sector. Jim Sutton and our embassy in Washington are working actively and effectively to build on that support.

Hon Richard Prebble: Will the Minister advise the Prime Minister that US Trade Representative Robert Zoellick’s 2003 trade policy agenda published on 1 March this year—a 17-page report—lists some 26 countries as having trade negotiations with the United States, and includes the statement that a free-trade agreement has been launched with “Australia, our 14th largest trading partner and a growing economy, a key US ally”, but there is no mention of New Zealand anywhere in the 17-page report; what is the significance of that—that is, the US will negotiate with 26 nations, but there is not a single mention of New Zealand?

Hon PHIL GOFF: As I mentioned to the member, Bob Zoellick made mention about the possibility of a trade agreement with New Zealand in his letter to Congress. The United States has a long list of negotiating partners, and the member would be surprised to find that a very small number of those are actually in the category of countries that he would regard as being there because of close allied or security arrangements with the United States.

David Benson-Pope: Can the Minister comment on the level of congressional and business support for entering a free-trade agreement with New Zealand?

Hon PHIL GOFF: Last month 50 members of Congress in the House of Representatives, wrote formally to the President to demonstrate their support for a free-trade agreement with New Zealand. Over 250 US companies, including many Fortune 500 companies, have also signed up to the United States - New Zealand Business Council, indicating their support for a free-trade agreement with New Zealand.

Dr Wayne Mapp: Can the Minister confirm that the trade agenda of the administration of President Bush dated 3 March in reference to Australia refers extensively to the free-trade agreement and the negotiations, and talks about the allied status, but when it comes to New Zealand there is not a single mention of any reference to free-trade agreements; what does that say about the difference between November last year and March this year—where has the Government gone wrong?

Mr SPEAKER: The first two questions can be answered.

Hon PHIL GOFF: If I can pick up the point about the relevance of New Zealand’s allied status, I note that two countries with which the United States either has a free-trade agreement or is negotiating one right now are both members of the Security Council—Chile and Mexico—and both indicated their opposition to the use of force and to a resolution supporting that before the Security Council. I note that Canada, which has a free-trade agreement with the United States, has consistently held a position very close to that of New Zealand with regard to Iraq. I note a range of other countries, including Morocco, that have never been allied nations of the United States and never fought alongside it in any war.

Rt Hon Winston Peters: Is it not a fact that the slogan used by the Labour Party in its last election campaign, that we are “very, very, very good friends with the United States”, and the Prime Minister’s argument that we will tailgate Australia into a free-trade agreement, are so much hogwash when considered against the knowledge of the United States in respect of this Government—which goes back many years—and if Morocco gets a free-trade agreement before us what does that say about this Minister and his party?

Hon PHIL GOFF: In relation to the actual question, the answer is, no, it is not a fact. The member often raises things in his questions that are not correct. The fact of the matter was that it was Colin Powell who described New Zealand as “a very, very, very close friend”. That was the description used by the United States about New Zealand; it was not a claim made by New Zealand about its partnership with the United States.

Rod Donald: Does the Minister agree that if New Zealand wants to have an independent foreign policy, the Government should put a US free-trade agreement on the back-burner, especially in the light of the comments from the President of the Cattle Council of Australia, Keith Adams, who said that the Howard Government’s strong support for the US against Iraq is helping Australia’s efforts in its trade talks, thus confirming that the United States does link foreign policy and trade issues?

Hon PHIL GOFF: No, I do not agree. One can have both an independent foreign policy and a free-trade agreement with the United States. I strongly disagree with the sort of comment Lockwood Smith made, when he said we should exchange putting the lives of New Zealanders at some risk for some trade advantage. I believe that is immoral, and I am pleased to say that the Leader of the Opposition—to whom I pay tribute—disciplined the members of his party who made those sorts of immoral suggestions.

Hon Peter Dunne: What is the next step that will be taken in furthering a prospective free-trade agreement with the United States, and when will that step be taken?

Hon PHIL GOFF: The advice given by Bob Zoellick was that we need to work amongst the congressmen on Capitol Hill, that we need to work with business, and that we need to create a constituency for ourselves. We are doing just that at this very moment, with considerable support shown by those whom we have approached on the hill, including key chairpersons of congressional committees, and by key US industries.

Hon Richard Prebble: I seek leave to table the 2003 Trade Policy Agenda of the United States.

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

Marine Life—Environmental Protection

7. LYNNE PILLAY (NZ Labour—Waitakere) to the Minister of Conservation: What recent initiatives has the Government taken in marine protection?

Hon CHRIS CARTER (Minister of Conservation): On Sunday I announced the creation of a second marine reserve this year. It covers 700 hectares at Te Matuku Bay on Waiheke Island, and contains an estuary and marine habitats of national significance. It follows the creation of a large Auckland Islands marine reserve. I look forward to further additions to our marine reserve system.

Lynne Pillay: What is the Government doing to deliver on the biodiversity strategy goals for marine conservation?

Hon CHRIS CARTER: Improving the health of the oceans is a priority of this Government. I am working closely with the Minister of Fisheries on a number of marine initiatives, including a plan to reduce seabird deaths in New Zealand fisheries, which will shortly go to stakeholders for their comment. I also note that the Marine Reserves Bill is currently before the Local Government and Environment Committee.

Hon Dr Nick Smith: Given that when National created 13 new marine reserves in the previous 9 years it was slated by Labour as “pathetic”, and that, in the first 3 years of this Labour Government, not one new marine reserve was created, how many new marine reserves will Labour need to create to avoid its own petard of “pathetic”?

Hon CHRIS CARTER: In the 8-month period that I have been Minister of Conservation, two marine reserves have been created. In the period during which that member was Minister of Conservation, I think a total of three marine reserves were created. I am hoping my next 8 months will see an even better record set than that which has already been established.

Gerrard Eckhoff: Can the Minister explain why Chen Palmer and Partners’ legal opinion on this issue is ignored, which states that New Zealand’s marine protection initiatives clearly breach the international law of the sea, and why is this Government prepared to openly flout that international law, but, on matters of international security, is very critical of the United States for acting “unilaterally”—in the Government’s words—which is exactly what the Government is doing right now on this issue?

Mr SPEAKER: The Minister may answer the part of the question that affects his portfolio.

Hon CHRIS CARTER: The member’s question contained quite a few questions, but I would like to say that I am not responsible for the opinions of Chen Palmer and Partners.

Hon Richard Prebble: I raise a point of order, Mr Speaker. The Minister was not asked a number of questions or whether he was responsible for the views of Chen Palmer and Partners; he was asked a simple question: why is New Zealand not prepared to follow international law when it comes to marine matters but has a completely different view when it comes to Iraq?

Mr SPEAKER: No. The Minister was asked a question, and a question about a comment made by Chen Palmer and Partners, and he gave a perfectly acceptable answer. He addressed the question.

Jeanette Fitzsimons: Can the Minister confirm, in relation to the previous question, that the Chen Palmer and Partners view was expressed about the exclusive economic zone outside the 12-mile limit, and that Waiheke Island is not in the exclusive economic zone?

Mr SPEAKER: The Minister cannot talk about the Chen Palmer and Partners comment, but the last part of the question is in order.

Hon CHRIS CARTER: I can confirm that Te Matuku Bay on Waiheke Island is within the 12-mile limit.

Larry Baldock: Given the amazing speed with which the Minister is now signing off on new marine reserves, does he still think there is a need for the Marine Reserves Bill; if so, why?

Hon CHRIS CARTER: It would not be appropriate for me to discuss a bill that is currently before a select committee, but of course there are always opportunities to improve marine protection.

Electricity—Power Savings Campaign

8. GERRY BROWNLEE (NZ National—Ilam) to the Minister of Energy: Why is he resisting calls by the Major Electricity Users Group for him to set up a national power savings campaign and to instruct Government departments to start saving power immediately?

Hon PETE HODGSON (Minister of Energy): The Grid Security Committee is meeting this afternoon to consider what level of conservation is appropriate now, and I have been meeting various members of that committee over the past week or two. The Major Electricity Users Group is represented on the committee. If saving targets are set, I am sure they will include the public sector.

Gerry Brownlee: Why is his Government focusing on the increasing creeping hand of socialism by its interfering in the electricity market in the future, a move Contact Energy Ltd has today warned will discourage further investment in generation, stating: “The market is not to blame for the lack of fuel or rain.”; and why is he not acting now to encourage savings so New Zealand can avoid the impending crisis this winter, rather than relying on an outside group to voluntarily give up its production?

Hon PETE HODGSON: The outside group is the industry, including consumer representatives. They have the ability to manage the conservation campaign, if that is needed, and they will call on me for assistance if they want it. The member needs to be clear whether he thinks the market works. He was on the radio this morning saying that “the picture we have at the moment is in fact clear because the market does work; the problem is we do not have enough generation.”

David Parker: Why are members of the Major Electricity Users Group so strongly affected by current high wholesale electricity prices?

Hon Roger Sowry: I raise a point of order, Mr Speaker. We do have a thing about patsy questions and ministerial responsibilities, and I think that for people who are involved in a group called the Major Electricity Users Group, it is probably self-evident why they have an interest in energy use—and the Minister is not responsible for them.

Mr SPEAKER: Let me put it this way: I am hoping that the Minister can reply indicating his position on this.

Hon PETE HODGSON: Indeed I can. The important fact is that many major electricity users choose to buy electricity on the wholesale spot market because, on average, the price is significantly lower than the going contract price, which is what many other electricity users choose. Last year, for example, the major users paying the spot price for electricity saved many millions of dollars because prices were usually less than 4c a unit. The downside of choosing some exposure to the spot market, however, is that in periods of tight supply or uncertainty, spot prices can climb very rapidly and very high, as they have lately.

Hon Ken Shirley: Rather than having Cabinet dictates on power consumption, as proposed by the substantive question, why does his Government not address the supply constraints and remove the obstacles to investment in generation capacity imposed by the Resource Management Act and the obstinate intransigence of the Department of Conservation in schemes such as Ngakawau and Arnold River on the West Coast?

Hon PETE HODGSON: In October of last year, the member’s colleague Mr Gerry Eckhoff said precisely what the member had suggested: that the Resource Management Act, in this case, would cause a 4-year delay for Project Aqua. A few weeks ago I announced changes to the Resource Management Act, and Mr Gerry Eckhoff rushed to the media saying that the Government is resurrecting the Muldoon era. What does the member think the ACT policy is on this matter?

Jeanette Fitzsimons: Will the Minister again consider adopting my proposal, made during the last dry winter, that we develop a comprehensive power-saving strategy involving all New Zealand businesses and households, with several levels of intensity, so that everyone knows when to start, and how much to do how soon, rather than building new capacity, which will raise all power prices while it sits idle for 95 percent of the time?

Hon PETE HODGSON: That is precisely the work that was completed by the Energy Efficiency and Conservation Authority last week, which I have handed to the industry for its consideration.

Gerry Brownlee: Can the Minister confirm that the Government is considering establishing a systems operator who will buy and sell all generated electricity, doing away with the market and destroying all incentives for investment in new generation that we desperately need?

Hon PETE HODGSON: That idea has been around for some years—in fact, for a bit over a decade. It is one that is being actively explored by the committee that Dr Cullen has headed up to look at infrastructure issues, including electricity generation. It is one of the options.

Rodney Hide: I raise a point of order, Mr Speaker. I raise this point of order somewhat cautiously, but with the utmost respect. We had a situation where my colleague Mr Gerrard Eckhoff raised a question about why the Government had ignored the opinion of Chen Palmer and Partners. The Minister’s response was essentially to say that the question was out of order and that he was not responsible for Chen Palmer and Partners’ opinion. That was raised as a point of order by the Hon Richard Prebble. It seemed to me that the question was in order. We then had a situation where a Labour MP asked the Minster why the Major Electricity Users Group thought something or other. That clearly is out of order. The Hon Roger Sowry raised that as a point of order, and it was allowed. I think there needs to be clarification on consistency.

Mr SPEAKER: No, I did not take it that way, at all. That was how he chose to answer it. It was his call.

Youth—Development Strategy and Health Action Plan

9. DARREN HUGHES (NZ Labour—Otaki) to the Minister of Youth Affairs: What reports has he received on initiatives that support the Government’s Youth Development Strategy and Youth Health Action Plan?

Hon JOHN TAMIHERE (Minister of Youth Affairs): Recently, I had the honour of announcing on behalf of the Prime Minister the decision by Glaxo Smith Kline to provide $660,000. This funding will allow Youthline to provide the much-needed 24-hour, 7-days-a-week telephone counselling service. It will also allow it to embark on a range of new initiatives to improve its support for young Kiwis. Youthline’s operations link very well with the Government’s youth development strategy and youth health action plan.

Darren Hughes: Does Youthline receive any funding from the Government?

Hon JOHN TAMIHERE: Youthline manages a range of Government contracts—a large number. I will just name a few here: Department of Child, Youth and Family Services contracts, district health board contracts, education contracts, and Alcohol Advisory Council contracts.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Minister was asked whether the Government provides any money to Youthline.

Hon Annette King: And he answered it.

Rt Hon Winston Peters: No, he did not. And the member should keep quiet while I am raising a point of order. That is the Speaker’s job, not hers. She cannot even do her job properly. The member raised a question as to what money—

Jill Pettis: What a chauvinist!

Rt Hon Winston Peters: Did you hear that, Mr Speaker? The fishwife said I was a chauvinist.

Mr SPEAKER: I will have points of order in silence, and that is the last warning.

Rt Hon Winston Peters: The Minister was asked by the member at the back as to what money was provided by the Government in respect of Youthline. At the end of that answer, we still do not know, even though there were, probably inappropriately, interjections like “Yes or no?” and “What money is supplied?”.

Mr SPEAKER: I heard the Minister’s answer and I would refer the member to Speaker’s ruling 128/5. Information was given and I took it that he was answering the question pretty well directly.

Simon Power: Can the Minister confirm the statement in the Labour 2002— [Interruption]

Mr SPEAKER: That is the last warning to the member, too.

Simon Power: Can the Minister confirm the statement in the Labour 2002 election manifesto that Labour will “retain a separate Minister of Youth Affairs responsible for the implementation of this strategy.”; if so, how is this consistent with the proposed merger of the Ministry of Youth Affairs into the Ministry of Social Development?

Hon JOHN TAMIHERE: The answer to the first part of the question is yes; for the second part of the question I refer the member to my oral answer to question No.10 last Tuesday.

Craig McNair: Why has this ministry lasted 14 years under seven Ministers, yet under the reign of this Minister the Ministry of Youth Affairs is to be abolished after 9 months; and what does this say about his incompetence?

Hon JOHN TAMIHERE: It says nothing about incompetence.

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

Mr SPEAKER: This question was addressed by way of answer and I am not having a point of order on that issue.

Rt Hon Winston Peters: I want to raise a point of order, whether you like it or not.

Mr SPEAKER: Oh no, you are not. Please be seated.

Rt Hon Winston Peters: That is my right.

Mr SPEAKER: Please be seated, or the member will leave. I know what the member’s point of order was going to be about: the adequacy or otherwise—

Rt Hon Winston Peters: Oh, so you are a clairvoyant now, or are you a soothsayer, or what?

Mr SPEAKER: The member will now leave the Chamber.

Rt Hon Winston Peters: I am happy to do that. It is a waste of time being here with you.

Mr SPEAKER: I will name the member if he does that again.

Rt Hon Winston Peters withdrew from the Chamber.

Nandor Tanczos: Can the Minister tell the House about the progress of one of the first initiatives supporting the Youth Development Strategy, the evaluation of drug education initiated by the Greens and agreed by the previous Minister of Youth Affairs, Laila Harré, which was the first significant new initiative in drug education for a number of years?

Hon JOHN TAMIHERE: Yes, I am pleased to advise the member that it is going wonderfully well.

Paul Adams: As it is now widely accepted that the breakdown of the family is a major contributor to negative outcomes for youth, will he be working with other Government departments to implement policies that help parents to create a positive and stable environment in which to raise their children?

Hon JOHN TAMIHERE: Yes.

Electricity—Wind Generation

10. Hon Dr NICK SMITH (NZ National—Nelson) to the Minister of Conservation: Will he support the proposal by the Wellington Regional Council to use the Belmont Regional Park, consisting of Department of Conservation, Hutt City and Wellington Regional Council reserves land for a wind turbine electricity generating station?

Hon CHRIS CARTER (Minister of Conservation): As yet, there is no application to use the reserve land in the Belmont area for wind generation. Any such application would be given due consideration when it is lodged.

Hon Dr Nick Smith: Why did the Minister, before any application had been received, point-blank refuse to consider the Dobson hydro project on the West Coast, saying he had “no intention of entertaining the idea because reserve land was sacrosanct”, when in his primary answer he said something quite different; is it because this Government is prejudiced against the West Coast and has a politically correct view of wind power, and a different view of hydro power?

Hon CHRIS CARTER: The two cases are quite different. Much of the area that would have been affected in Card Creek lies within an ecological area. The House may have forgotten, but I am sure that the member has not, that when he was the Minister of Conservation he substantially increased the ecological area of Card Creek.

Mahara Okeroa: Have any significant electricity generation projects been approved by the Department of Conservation?

Hon CHRIS CARTER: Yes, permission was given by the department for works in Fiordland National Park associated with the construction and operation of a second tail race tunnel at Manapouri, resulting in a major increase in power production from that large hydro station.

Hon Peter Dunne: Is the Minister aware that the ownership of the Belmont Regional Park is spread between a number of agencies including those mentioned in the primary question, but that it also includes farmland owned by Landcorp as it used to be called—I am not sure what it is called now—and does that complicated ownership pattern have any impact on the way in which any application for a wind farm will be assessed?

Hon CHRIS CARTER: Yes, I recently wrote to the member, upon receipt of a letter from him, explaining the very complicated mixture of tenures located within that park, and the fact that the Wellington Regional Council will have to review management of the area in 5 years’ time.

Hon Dr Nick Smith: Given that the two generating stations are both 70 megawatts, that the Belmont Regional Park would use a substantially greater area of reserve land than the Dobson proposal, and that 85 percent of the West Coast is reserve land, as compared with only 16 percent in Wellington, will the Minister reconsider his point-blank refusal, given the electricity crisis that we now have, rejecting the Dobson hydro project?

Hon CHRIS CARTER: Surely I do not need to remind the member that as yet we have absolutely no application for wind generation in Wellington. As far as the Dobson conservation area is concerned, it is quite a different matter.

Hon Dr Nick Smith: I seek leave to table two documents. The first is a report in the newspaper stating: “Carter says no to power scheme”.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is. What is the second document?

Hon Dr Nick Smith: The further document that I wish to table is the proposal for a wind-power generating station on reserve land here in Wellington.

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

Question No. 2 to Minister

Hon PHIL GOFF (Minister of Foreign Affairs and Trade): I am sorry to interrupt the time of the House. In question No. 2 I was accused of misleading the House in regard to UN-related missions. I seek the leave of the House to table a list of six operations mentioned by Mr Prebble, five of which have a UN link. The sixth was the exception that I mentioned in relation to the Sinai.

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

Iraq—Security Intelligence Report

11. KEITH LOCKE (Green) to the Prime Minister: Is New Zealand one of the countries the White House says refuse to be named but are providing intelligence support for the war against Iraq?

Hon Dr MICHAEL CULLEN (Deputy Prime Minister), on behalf of the Prime Minister: No.

Keith Locke: How can we be assured that information from the Waihopai satellite communications interception station is not helping the US war effort in Iraq, when a US congressional document states explicitly that Waihopai, which it calls part of the five-nation Echelon network, is being used for the war in Afghanistan?

Hon Dr MICHAEL CULLEN: It is not the Government’s practice to comment on specific intelligence matters, but I can tell the member that the Inspector-General of Intelligence and Security has affirmed that New Zealand retains sovereign control over its intelligence collection capabilities.

Simon Power: In the light of the Prime Minister’s comments that New Zealand will not provide any peacekeeping support in Iraq at the conclusion of the present military action, can she identify exactly what support she will provide, and under what specific conditions?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The substantive question was about intelligence capability, not about Iraq.

Mr SPEAKER: No. I was distracted momentarily. I think the member may have raised a valid point of order. Will the member restate the question?

Simon Power: In the light of her previous comments, what specific support will she provide and under what specific conditions, given the current conflict in Iraq? He was asked about intelligence support. It is about any other support.

Hon Dr MICHAEL CULLEN: We are referring to questions of intelligence support. I reaffirm that it is not the Government’s practice to comment on specific intelligence matters.

Hon Ken Shirley: As has been revealed in many US publications, why will this Government not admit that it is possible that Operation Decapitation in Baghdad, which was triggered by an intercepted telephone conversation, could have been a result of the Waihopai eavesdropping, as suggested by Mr Locke; or is it a position of a continuing stance of one position in public and a different position in private?

Hon Dr MICHAEL CULLEN: As I said, the Government does not comment on specific intelligence matters, but I suspect that the conversation from Mr Saddam Hussein was not to a New Zealander.

Keith Locke: In reference to the Prime Minister’s comment that we have sovereign control over the Waihopai system, how can the Prime Minister assure us that we know exactly the implications of all the key words and key phone numbers that the United States National Security Agency uses to filter the information coming into Waihopai?

Hon Dr MICHAEL CULLEN: The comment was made not by the Prime Minister but by the Inspector-General of Intelligence and Security, who has an overall independent stance in supervising these matters. Equally, of course, there is a statutory committee on which a number of members of the House serve, which has oversight of security and intelligence matters.

Ron Mark: Is the Minister telling the House that any intelligence that our Orion may glean in the course of its duties and operations in the Gulf, that affects the deployment of the coalition forces in the Gulf, would not be handed to the coalition forces in the Gulf?

Mr SPEAKER: That is a little wide of the original question. The Minister may comment.

Hon Dr MICHAEL CULLEN: The important point to note, of course, is that command of Operation Enduring Freedom is separated from command of the coalition forces in Iraq; there are two separate command structures operating. That is very important—there are a number of countries, including Canada, France, and New Zealand, who are involved in Operation Enduring Freedom in the area.

Keith Locke: I raise a point of order, Mr Speaker. I seek leave to table a US congressional document dated 11 July 2002, which explains Waihopai’s use.

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

Māori Sportscasting International—Grants

12. RODNEY HIDE (ACT NZ) to the Minister of Māori Affairs: Did funding from Te Puni Kōkiri cover the cost of attendance of any of Hon Dover Samuels’ past or present staff at the awards dinner hosted by Māori Sportscasting International on 6 July 2002, and on what date did Te Puni Kōkiri discover that over half of its capacity building grant was spent on the awards dinner, alcohol and a band?

Hon PAREKURA HOROMIA (Minister of Māori Affairs): I understand that a past and present staff member with the Hon Dover Samuels did attend the awards dinner. I am advised by Te Puni Kōkiri that the original application of June 2002 from Māori Sportscasting International Ltd did identify that a dinner and awards ceremony would be held.

Rodney Hide: Can he confirm then, in light of his answer, that over half of the $10,000 capacity-building grant was spent on an old-fashioned Labour Party booze-up for John Tamihere, Dover Samuels, their partners, this Minister’s executive assistant, Gail Parata, Dover Samuels’ campaign manager, Mr Shane Te Pou, and his present private secretary, Mr Daniel Phillips; and can he also confirm that under the contract, Te Puni Kōkiri can demand the money back because the awards dinner was not in the schedule of that contract?

Hon PAREKURA HOROMIA: Those people did attend the awards, and in relation to the application, I understand that it was not there. But I am more than happy to recheck that and come back to that member.

Dianne Yates: Is the Minister satisfied that a significant proportion of the funding provided by Te Puni Kōkiri went to the organisation and running of an awards dinner?

Hon PAREKURA HOROMIA: No, as I said earlier, and I have expressed my concern in writing to the chief executive of Te Puni Kōkiri.

Katherine Rich: Does he think this contract is explicit enough to ensure capacity is built, when the contract’s first deliverable, for which $8,000 was paid, simply required Māori Sportscasting International to sign the agreement; the second deliverable for $1,000 was to hold the training course; and the third and final deliverable for another $1,000 was to write an evaluation report; and where in these deliverables was the $5,400 for a boozy nosh-up?

Hon PAREKURA HOROMIA: Some of the questioners seem to be hung up on the boozy nosh-up. But as I told that person and showed the report, it is in detail there in the sense of the evaluation and the summaries of what happened in a weekend when people attended in their private time.

Rodney Hide: What sort of signal does he think it sends up-and-coming Māori that one of the awards paid for by Te Puni Kōkiri and awarded by Mr Hemana Waaka was for having the brains of a sheep, and does he approve of such an award paid for by Te Puni Kōkiri?

Hon PAREKURA HOROMIA: That question sounds a bit woolly headed to me. Of course, I do not agree on that sort of activity. How silly!

Rodney Hide: I raise a point of order, Mr Speaker. I am not sure whether the Minister addressed the question.

Mr SPEAKER: I am. Please be seated.

Rodney Hide: I raise a point of order again, Mr Speaker.

Mr SPEAKER: I specifically heard him do so. I listened carefully to see whether he did, and he did.

Rodney Hide: I seek leave to table the contract between Te Puni Kōkiri and Māori Sportscasting International that shows no mention of any dinner.

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

Third Readings

Third Readings

Debate resumed from 20 March on the third readings of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill, the Taxation (Annual Rates of Income Tax 2002-03) Bill, the Student Loan Scheme Amendment Bill, and the Child Support Amendment Bill.

Hon DAVID CARTER (NZ National): In closing, I say that it will be a very sad day when this Parliament passes into our tax system a special tax rate based on race. I repeat the comments made by United Future’s spokesperson, Gordon Copeland, who said in the Committee stage on this legislation that Māori deserved a preferential tax treatment, because “They were here first.” In the next election campaign I guarantee that I will make sure that my constituents know that that is the basis of United Future’s decision on this tax rate for Māori.

Hon JOHN TAMIHERE (Minister of Youth Affairs): I commend this legislation to the House. I am grateful to acknowledge that two-thirds of it is in favour of the taxpayer. It does a number of matters that my learned colleague Dr Cullen expressed to the House in the first and second readings and in the Committee stage. I would like to make one point. One-third of the legislation does concentrate somewhat on the taxation of Māori authorities. That matter has been long outstanding since 1939, and Māori organisations and authorities will play a significant role in the economic roll-out of this nation. I commend the legislation to the House accordingly.

Hon TONY RYALL (NZ National—Bay of Plenty): I take a call on the third readings of these bills, and in particular I will discuss the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill. I join with my colleagues in restating the opposition of the National Party to that bill. We are opposed to it because it puts into legislation two standards of citizenship in this country. The bill awards to one group in our community, on the basis of the colour of people’s skin, a preferential tax rate that no other group in the community is entitled to. I shall explain what that is. The bill proposes that distributions from certain trusts will be taxed at 19.5c in the dollar. That applies to Māori trusts where the beneficiaries are Māori. However, if the trusts have beneficiaries who are Pākehā, under this legislation they will pay tax of 33c in the dollar.

That is not right. Increasingly in this country there is a sense of dis-ease at the separatism that this Government is pursuing. Every day there are new laws and regulations that separate our country on the basis of race. Every day there are announcements of grants and new schemes that seek to separate our country on the basis of race. Every day there is a never-ending stream of stories of mismanagement and inequity resulting from that separation. Just in the last 10 minutes in this House we have heard about the funding going through Māori broadcasting, where there has been no accountability and none of the professionalism that one would expect with regard to funds coming from the taxpayer.

Our leader, the next Prime Minister of New Zealand, the Hon Bill English, has made it clear that we are opposed to this legislation, because we are drawing a line in the sand when it comes to the segregationist policies of the Labour Government. We will call this legislation what it is. It is segregation and separatism, and I am prepared to stand up in this House and say that. But I have to tell members that fewer and fewer New Zealanders are prepared to stand up to say that, because if they do they are called racists by the Beehive, or are accused of Māori bashing by the bovver boys on the front bench of the Labour Party. More and more New Zealanders are wising up to what is going on in the Government. They are wising up to the fact that Helen Clark and Margaret Wilson have New Zealand headed down a path of separatism that is anathema to the core values of this country. This Government, Labour, the Progressive Coalition, the Greens, and United Future support this legislation.

This legislation states that if the beneficiaries of a trust are Māori they will have a lower tax rate than the beneficiaries of a trust who are Pākehā. That is appalling. Why should the children of Māori millionaires have their distributions taxed at 19.5c in the dollar, but the children of hard-working working-class New Zealanders have their distributions taxed at 33c in the dollar? The member should answer that. I do not hear a word from Metiria Turei. There is not a word from her about why she will support this legislation.

There is also no word about that from Annette King, the Minister from Rongotai. The voters of Rongotai would be shocked to know that she is supporting a bill that states that Māori will have a cheaper tax rate than Pākehā. That is not right. I do not think Annette King knew that when the paper about this bill went through Cabinet; in fact, I am pretty sure that the Cabinet papers will show that she did not know that. I cannot believe that she supports this measure. However, Annette King is the Minister who has introduced primary health organisations. At the Western Heights Health Centre in Rotorua, under her plan community service cardholders will pay $1 more for a visit to the doctor than they do now. She is requiring an $18 charge across the whole of Rotorua, and right now the Western Heights Health Centre is charging a community service cardholder $17. She is making that go up to $18. She has been told that will happen, and she has ignored it.

Members will be hearing more about what is happening at the Western Heights Health Centre in Rotorua under the primary health organisation in the next few days. But there is one thing I will say about that now: that stuff happens whether one is Māori or Pākehā—one is treated in the same way when one turns up at the Western Heights Health Centre in Rotorua and, under the primary health organisation, one pays more if one has a community services card. It is true. The subsidy in Rotorua will be changed—people with a community services card must pay $18 under the primary health organisation card, yet that health centre was charging only $17 before the primary health organisation—[Interruption]

Mr SPEAKER: Would the member please come back to the bills.

Hon TONY RYALL: The point is that that policy is being implemented in Rotorua whether one is Māori or Pākehā, and frankly it is being implemented whether one has $1 million in the bank or $10 in the bank—one still gets the benefit of the cheaper doctors’ visits.

Hon Annette King: Isn’t that great!

Hon TONY RYALL: Women in the Bay of Plenty cannot receive radiation treatment for cancer, but it is great that the wealthiest people in Rotorua will get money—[Interruption]

Mr SPEAKER: I have told the member to come back to the bills.

Hon TONY RYALL: The point in this legislation is that the Government, supported by United Future, is proposing to have, for the first time in my memory, separatist tax policy.

Clayton Cosgrove: It has been around since 1939.

Hon TONY RYALL: I tell Mr Clayton Cosgrove that the tax rate has been the same since 1939, regardless of whether one is a Māori or a Pākehā. The difference—the reason that we are opposing this legislation—is that for the first time a Government is introducing legislation that gives a Māori a cheaper tax rate than a non-Māori. I tell Mr Cosgrove that that is not right. It is not right that people should have a cheaper tax rate because of the colour of their skin. That is not New Zealand. That is not what people voted for at the last election. They did not expect that Māori would be given a cheaper tax rate than Pākehā.

If one is to have a cheaper tax rate, then the tax rate should be lowered for everybody. I am in favour of lower taxes for everybody, not just for the select few to whom the Government thinks its owes its electoral mandate. That is what is wrong with this legislation, and that is why the Opposition parties strongly oppose this taxation legislation and have taken every opportunity to oppose it. I ask members to mark my words: the people of New Zealand will not stand for this Government promoting race-based tax policies any more. That is one of the reasons that support for Labour continues to fall around the country and that economic confidence is plummeting. Members should mark my words: the focus groups are telling this Government it is in big trouble, because of its segregationist policies. I say that we will not see another piece of legislation like this out of the Labour Government in the next 18 months.

CLAYTON COSGROVE (NZ Labour—Waimakariri): I rise to support this legislation. This is the first taxation legislation that the new Finance and Expenditure Committee in this term of Parliament has put through. I thank committee members from all parties in the House—even the National Party—for the valued contributions that they did make. Those contributions were far more valued than what we saw through that despicable character over there on the Opposition benches in his despicable speech.

The facts are that since 1939 there has been a special rate of tax for Māori authorities. Under National, it was 25 percent. If National members want to engage in their speeches of rage here, double standard though they are, why did Mr English and the previous National Government not change the special rate during their 9 years in Government if they were as philosophically opposed to the special rate as that? They did not change the rate. Why has there been a special rate for Māori authorities since 1939? It is not based on race and is not because the beneficiaries of those authorities are Māori; it is because the scheme of arrangement with their asset management is one that has special restrictions. For instance, the assets of Māori authorities are communally owned. Even those more commercially savvy than I am would realise that one cannot sell, with any degree of freedom, communally owned assets.

The special tax rate has been around since 1939, and that crew over there in the Opposition now think they can get up and bluff the people of New Zealand. There is no moral authority in any of those speeches—none! If National had wanted to change the special taxation rate and was as philosophically opposed as that to it, it could have done so during its 9 years in Government. I find it very interesting that throughout this debate, to my knowledge, the real finance spokesperson of the National Party has not taken a call. Instead, David Carter has taken a call, and I suspect I know why that was. Dr Brash, the National Party’s finance spokesperson, is in a different party from me, but I believe he does have a shred of decency. I believe that deep down, he does have some honour. He knows that this legislation is right, because it is based not on race but on the restrictions that occur through the scheme of arrangement that Māori authorities have in respect of their asset management. I simply say that if the National Party feels that the next election will be won by beating Māori over the head, and beating racially-based groups over the head—as it is doing now—then it has another think coming. Mr Ryall talks about our party’s poll ratings going down. After that speech, those snide remarks, and that lack of dignity, it will be the National Party’s poll ratings that go down. [Interruption] I will not respond to my colleague.

I finish by saying that 90 percent of Māori earn less than $38,000 a year, and, therefore, pay tax at that 19.5 percent rate, anyway. If they earn over that amount then a taxation wash-up occurs, and of course they will pay the same rate of income tax as everybody else. So I conclude by saying that this legislation is built on firm, principled foundations, and that for Opposition members to get up and make some of the most racist speeches I have ever heard in my life is, I think, despicable and dishonourable in this House. I support the legislation.

Hon Bill English: I raise a point of order, Mr Speaker. That member may be a younger member, but he knows that he cannot use that language in respect of any member in this House. He should be required to withdraw and apologise.

Mr SPEAKER: On the matter of the last phrase, I will ask the member to withdraw and apologise.

CLAYTON COSGROVE: I withdraw and apologise.

Mr SPEAKER: I call Metiria Turei. The Greens have not had a call.

METIRIA TUREI (Green): The Greens are pleased to—

Dail Jones: I raise a point of order, Mr Speaker. New Zealand First is entitled to a second call in this debate.

Mr SPEAKER: No. I have the countdown of speakers. The National Party has had three calls. Every other minor party has had one call, except that the Greens have not had any calls. They are entitled to the call.

Dail Jones: I raise a point of order, Mr Speaker. The Greens are a semi-Government party. They should have taken one of the calls of the Labour Party—

Mr SPEAKER: No. The member knows that is not right.

Dail Jones: —because New Zealand First invariably gets the last call.

Mr SPEAKER: No.

Dail Jones: It does. Would you like to tell me when we get a call other than the last call in this situation?

Mr SPEAKER: Occasionally New Zealand First gets the last call because the Greens get the eighth call. The Greens have not had a call, and—

Dail Jones: That is their problem.

Mr SPEAKER: No, that is not their problem. The Greens can seek the call in the Opposition slot whenever they like. Metiria Turei—

Dail Jones: I raise a point of order, Mr Speaker. I suggest that is unfair. We get two calls, and one of them is the twelfth. If we are down to the eighth call, that is the Greens’ problem. You are being discriminatory against New Zealand First. I think we deserve an explanation of that.

Mr SPEAKER: No, I am not discriminating against New Zealand First; I am conducting the debate according to the list that I have, and there is no change, at all. I call Metiria Turei.

METIRIA TUREI: Throughout the Committee stage of this legislation there has been a continual barrage of attacks on its provisions, particularly on those that reflect the particular characteristics of and economic constraints on Māori organisations. The claim that the legislation is racist is absolute drivel. In fact, it could be successfully argued that the previous system of high tax rates, despite the relatively low income of 90 percent of Māori and despite double taxing, was itself racist. That system failed to provide for the particular circumstances of Māori authorities, and failed to recognise that those circumstances were largely the result of Government–imposed legislation and process, and, therefore, favoured non-Māori. But some members of this House even go so ridiculously far as to suggest that the 19.5 percent tax rate will result in the withdrawal of overseas investment, and that the favourable treatment of Māori may even cause New Zealand businesses to relocate overseas. Before we take those views even remotely seriously, let us consider what this legislation will actually mean for everyone in this country.

This legislation will put in place a good behaviour rule that will provide some relief to taxpayers who, for whatever reason, find themselves landed with a shortfall penalty, for lack of reasonable care. It will remove the requirement to pay 50 percent of any tax in dispute, and, instead, will give the Inland Revenue Department some discretion in that. Although for some people that change will be onerous, for many the removal of the requirement to make that payment will assist them in their financial recovery. Surely, that is an essential aim when taxpayers find themselves in trouble. For employers, this legislation will simplify their PAYE obligations, thus reducing their compliance costs, which, indirectly, will assist employees. For individuals, the legislation will raise the maximum rebate rate for charities, thus giving further relief to those charities that rely on individual donations for their vital community contributions.

This legislation provides some good opportunities and changes that will benefit everyone, but, regardless of those advantages, some poor members of this House have continued the hue and cry about it being racist. It is, as I say, utter rubbish to say that the legislation is based on the human traits and biological composition of ngā tāngata Māori. That is absurd. It is based on the characteristics of the entities established as a result of Government legislation and process in the past. This legislation is not racially based; it provides a much fairer system for Māori organisations and authorities. The 19.5 percent tax rate is not a new tax rate. Since April 1999 all New Zealanders, regardless of race, have paid that rate on their first $38,000 of income—and they still do. Perhaps some members of this House have not been in that position, or perhaps they can no longer remember it, but members should at least remember that in 2001 Treasury estimated that 90 percent of Māori earned less than $38,000. Thus, the choice of the 19.5 percent tax rate for Māori authorities is entirely reasonable.

The differential tax rate in this circumstance is but one of many variations that may exist between different commercial entities. If other MPs want an equal playing field, then they also need to consider and recognise the factors that do, effectively, disadvantage many Māori authorities, in a commercial sense. Those factors include circumstances such as limited access to loan finance because of multiple and communal land ownership, high demands for benefit distribution, support by those organisations of broader social objectives—not just commercial ones—and the difficulty for those organisations in disposing of uneconomic assets.

The 19.5 percent tax rate is a sensible and practical move, which recognises the particular constraints faced by Māori organisations in the development of their assets for their people. Those constraints arise out of the structural framework in which Māori have had to manage communally owned land, and I must add that the roots of that system lie in the establishment of the Native Land Court and its attempts to individualise title, in order to make easier the purchase and alienation of Māori land. It is not surprising that critics of the legislation seldom refer to the many examples of uneconomic land units, forestry blocks, and farming trusts that are designed to create jobs for local Māori but that have difficulty in doing so. It appears that the criticism is aimed at circumstances where Māori development may, in fact, challenge mainstream corporate business.

This legislation makes other significant changes that the Greens support, and which reflect the needs of Māori organisations. We are very pleased to see the widening of the definition of “charitable purpose” to include those organisations whose beneficiaries are primarily related by blood. That recognises the authority and purpose of whānau and hapū, and their traditional structural system of caring for, and taking care of, their members. We are also very pleased to see the broadening of the purposes for which marae can be considered “charitable”, as a way of recognising the essential community functions that marae provide, not only for the hapū and whānau in particular areas but also for the wider community.

The Greens think the advantages in this legislation outweigh the disadvantages. Some considerable work has been done by Māori organisations in bringing to the fore the issues that particularly affect them, and we acknowledge their work in raising these issues with the Finance and Expenditure Committee and with other members. One of the previous speakers referred to Māori millionaires being able to gain a competitive advantage for their children under this legislation. I suggest to members of the Rongotai electorate that they might want to ask for some further information about that issue. Although it is not appropriate to describe that member’s contribution as misleading, it is appropriate to describe it as not entirely putting forward the whole story. In fact, Māori millionaires, the few that there may be, will be required to pay tax at the same rate as they would in any other circumstances.

This legislation does not provide a special taxation system for Māori individuals, but recognises the particular constraints placed on Māori organisations for the benefit of their members and of the wider community, as well. So the Greens are very pleased to support this legislation.

A party vote was called for on the question, That the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill be now read a third time.

Ayes 71

Noes 47

Bill read a third time.

Labour 52; Green Party 9; United Future 8; Progressive 2.

New Zealand National 27; New Zealand First 13; ACT New Zealand 7.

A party vote was called for on the question, That the Taxation (Annual Rates of Income Tax 2002-03) Bill be now read a third time.

Ayes 71

Noes 47

Bill read a third time.

Labour 52; Green Party 9; United Future 8; Progressive 2.

New Zealand National 27; New Zealand First 13; ACT New Zealand 7.

A party vote was called for on the question, That the Student Loan Scheme Amendment Bill be now read a third time.

Ayes 71

Noes 47

Bill read a third time.

Labour 52; Green Party 9; United Future 8; Progressive 2

New Zealand National 27; New Zealand First 13; ACT New Zealand 7.

A party vote was called for on the question, That the Child Support Amendment Bill be now read a third time.

Ayes 71

Noes 47

Bill read a third time.

Labour 52; Green Party 9; United Future 8; Progressive 2.

New Zealand National 27; New Zealand First 13; ACT New Zealand 7.

Bills

Industry New Zealand and Trade New ZealandIntegration Bill

First Reading

Hon JIM ANDERTON (Minister for Economic Development): I move, That the Industry New Zealand and Trade New Zealand Integration Bill be now read a first time. After the bill has been read a first time, I intend to move that the Commerce Committee consider the bill. I also intend to move that the Commerce Committee be instructed to report to the House by Monday, 28 April 2003 rather than the default period of 6 months, as Cabinet has agreed to an establishment date of 1 July 2003.

With this legislation, the Government—

Hon Tony Ryall: For 1 month?

Hon JIM ANDERTON: It is National Party policy. I would have thought the member would be supporting it.

With this legislation, the Government is creating a new economic development agency. Last week it was decided that this new agency would be called New Zealand Trade and Enterprise. New Zealand will now have a one-stop shop for economic development and trade promotion. We are creating a new organisation to integrate the services currently provided by Trade New Zealand and Industry New Zealand, with the aim of making those services as seamless and responsive as possible. This Government decided early in its term of office that it had a smart and active role to take in the economy. The work we have done with Industry New Zealand and our regions; the partnership started with business, communities, and local government; with unions, industries, and Māori, are starting to make a real difference to New Zealand’s economic and social fabric.

Over the last 2 years it has become obvious, however, that integrating the services of these two entities—Industry New Zealand and Trade New Zealand—was in the best interests of industry development in New Zealand. It will make life easier for business, and from the Government’s perspective, it will make sure that economic development policy is well integrated and user-friendly. This move brings together, and builds on, Trade New Zealand’s experience both internationally and in New Zealand export sectors, as well as Industry New Zealand’s experience in working with investors, business, and the regions. Under New Zealand Trade and Enterprise, business will have a powerful partner for growth, backing its drive for growth and success.

New Zealand has always been a nation of exporters and entrepreneurial skills, and these have stood us in good stead, but we need to lift our performance yet again. The rules have changed, and we are now living in a global marketplace. New Zealand needs to connect to the world and build strong networks. The Government recognises that our businesses must be internationally competitive, whether their markets are domestic or offshore, and that internationalisation is critical to improving New Zealand’s overall economic performance. The major objective of New Zealand Trade and Enterprise is to support the development of internationally competitive New Zealand businesses. Well-designed and delivered business development services have the potential to be a major contributor to the Government’s goal of becoming a genuinely global, innovative economy. Such business development services can assist firms to leverage their innovations, skills, and talent into global markets.

Essentially, the move to integration is motivated by three drivers. First, as I have stated already, the rules have changed. Many New Zealand companies are now born into the international environment directly on their inception as new entities. Their markets, opportunities, and business models are based on export markets.

Secondly, we need more exporters as well as more exports. I do not think that many New Zealanders realise that over 50 percent of our entire export earnings come from 127 companies, so we have a very narrow base, and we have to broaden that base as quickly as we possibly can. New Zealand Trade and Enterprise will be better placed to build capability in New Zealand firms so that they can connect globally, attract investment from both inside and outside New Zealand, and adopt best practice and grow effectively. Getting more exporters to the starting line is vital for increased export growth.

Thirdly, our clients want an integrated service. We have had that clear and consistent message from both Industry New Zealand and Trade New Zealand clients. They want a single point of contact for export and business growth services. I say to Mr Ryall, who is trying to interject, that it happened to be the policy of the parties that I have represented, too. The new organisation will take the form of a Crown entity so that it can develop a strong commercial culture, and build and maintain credibility with business networks.

The board of New Zealand Trade and Enterprise will comprise seven members. The legislation allows for the use, when necessary, of special advisers to assist the board in aligning its strategy and activities with Government policy. Those special advisers are the Secretary of Foreign Affairs and Trade and the chief executive of the Ministry of Economic Development. The Minister for Trade Negotiations and myself, as the Minister for Economic Development, will together be responsible for New Zealand Trade and Enterprise. The Ministry of Economic Development and the Ministry of Foreign Affairs and Trade will be jointly responsible for monitoring and evaluating the new organisation, and will provide advice to the responsible Ministers. The vote will be under the vote of the Ministry of Economic Development.

The strategic goals of New Zealand Trade and Enterprise are to contribute to increased exports and investment in New Zealand by strengthening global linkages and targeted assistance; to enhance capabilities by providing information and facilitating access to skills, expertise, and resources; to contribute to a supportive environment for economic growth by fostering collaborative networks and partnerships by encouraging private and non-government sector economic development services, and to improve coordination of assistance.

New Zealand Trade and Enterprise has been created to give effect to Government policy. It will have to respond to the multiplicity of issues that a firm faces. It will act as a one-stop shop with a package of services. It needs to deliver a seamless service to work alongside firms, regions, and sectors. Most importantly of all, New Zealand Trade and Enterprise needs to connect with its clients. The strengths of the two former agencies, Trade New Zealand and Industry New Zealand, will be carried forward into the new organisation. New Zealand Trade and Enterprise will provide integrated services across the business life cycle—from foundation services offering advice to young companies and entrepreneurs, to enabling services for regions, through to inward investment and growth services giving customised assistance to accelerate the development of potentially high-growth businesses both at home and abroad.

I have recently returned from a visit to Australia where I met the Minister of Trade and, in particular, Queensland State development Ministers. I have to say that our cousin in Australia is extraordinarily aggressive in terms of attracting investment from both inside and outside Australia. However, that reflects only the aggressiveness of many countries now lining up for skilled immigrants, for investment in research and development, and the development of their own industrial base. New Zealand has to be very smart in order to compete in the international marketplace. This organisation will assist in that development, and the Government urges the House to give full support to the move we are making.

At the conclusion of this debate, I will move that the Commerce Committee consider the bill, and that the committee be instructed to report back to this House by 28 April 2003.

Hon TONY RYALL (NZ National—Bay of Plenty): I am pleased to be able to take the first call from the National Party in Opposition on this bill. Before I address the substance of the matter, I want to say to the Minister in charge of the bill that in deciding to concertina the select committee process from what might have been only a couple of months to 1 month, he has lifted the temperature considerably on this debate. Quite substantial parts of this bill warrant investigation by a committee. The Minister will find that he has a majority in the House for the bill, but what concerns me is his decision that it needs to be rushed through in 1 month. I know the Commerce Committee currently has a workload that would facilitate the passing of this bill through the committee, probably within 2 months, but, certainly, there should be sufficient public notice. What will happen now is that this bill will go before the Commerce Committee this week. The committee will place advertisements calling for submissions—which will take at least 2 weeks—and then there will be 2 weeks for it to consider the bill. Of those 2 weeks, at least 1 week will be in an adjournment, and over Easter. The select committee process is being unnecessarily concertinaed. If the Minister had not put a time limit on it, the process of the bill would have been smoother, and he would have got better deliberation within the select committee. Having just 1 month for this major change to the structure of industry support in New Zealand is not appropriate. I ask the Minister to reconsider the motion he wants to move—1 month is not enough.

I draw members’ minds back to 5 February 2001—to a new superyacht development in west Auckland. According to the Government, that development will deliver hundreds of jobs, and up to $600 million in export earnings over the coming years. The $18 million construction facility to be built on surplus defence land at Hobsonville is being set up by expatriate Kiwi Bill Lloyd, who is returning to New Zealand to expand the Canadian superyacht-building firm Sovereign Yachts. Announcing the project, Economic Development Minister Jim Anderton said the downstream benefits of the venture would flow on to the rest of New Zealand. He said the Government had not given the company any money to come to New Zealand, although his ministry had been able to clear obstacles to the use of the defence land. Further, the Prime Minister of New Zealand went on to say that this latest investment was just a flagship of the Industry New Zealand programme, and an indication of the true commitment of the Government to industry development in New Zealand.

The National Party’s concern about this bill is not only about the concertinaing of the time frame, but also about the fact that there is no regulatory impact statement attached to the bill. We have no idea what impact this legislation will have on business compliance cost or regulation, nor is there a cost-benefit analysis on the benefits of doing what we are doing. This bill has been rushed into the House. There is a 1-month submission period, no regulatory impact statement, and no cost-benefit analysis. That is concerning, because we think the whole Industry New Zealand-Trade New Zealand merger needs quite considerable analysis by a select committee. This Government has just given $1.5 million to Ross Perot. During his presidential campaign, Ross Perot used to spend $1.5 million on one 30-second advertisement, and now Industry New Zealand is giving his company, EDS, $1.5 million to set up some sort of lower-order call centre here in New Zealand. As Mr Hide says, it is Jim Anderton who is giving him that money.

We are concerned about what is going on at Industry New Zealand and Trade New Zealand. We think it is vital that, firstly, we rationalise the Government’s business assistance mechanisms. Right now, there are over 32 different Government funds and schemes to which business can apply for assistance. There are myriad different entities and organisations—Trade New Zealand, Industry New Zealand, Technology New Zealand—the list of different structures just goes on and on. It is right that we should be looking at the integration and consolidation of Government business support programmes. Indeed, the National Party talked at some length about doing that before the last election.

We are totally supportive of some of the functions that Industry New Zealand and Trade New Zealand perform. The best work they do is to provide advice and some direction to people who are interested in the start-up process, or a new investment. I am very sceptical of the grants they give out to organisations, particularly the larger organisations. The announcement made by the Government in February 2001 promised hundreds of jobs and up to $600 million in exports from Sovereign Yachts. What we know today is that redundancy notices are being issued to the workers at Sovereign Yachts. We also know that the Prime Minister, Helen Clark, is strongly supportive of the investment the Government made in Sovereign Yachts. She said it proved the sense of the Government’s business support programmes, but those programmes were just made a mockery of.

The fact is that the select committee should not be limited to 1 month to consider this bill. At a time like this, it is important that the Government’s overall economic strategy be put under the microscope. Looking at this bill, it is clear that the Government is fiddling with bureaucracy while business burns. Just in the last few days, Parliament has become aware of the significant reduction in business confidence that is happening in the New Zealand economy. The Westpac McDermott Miller consumer confidence survey, which was conducted before the war on Iraq, shows that a net 6 percent of respondents are pessimistic about New Zealand’s prospects over the next 12 months. Most respondents feel financially worse off today than they did 12 months ago, and that has nothing to do with Iraq. It is very significant that the growth we have been seeing in New Zealand has been driven by the strong recovery in rural export markets, which are facing considerable drop-offs in their income.

On Sunday night the latest Colmar Brunton poll showed that almost one-fifth of respondents believe that the economy will deteriorate in the next 12 months, and that only 27 percent believe that the economy will improve in the next 12 months. If that is coupled with the very significant reduction in the dairy payout—from $5.30 to a projected $3.60—the stronger New Zealand dollar, and the droughts in Canterbury, Marlborough, Taranaki, and the Waikato, one can see why there is considerable concern about the New Zealand economy. We are seeing no vision whatsoever from this Government about how those downward figures can be reversed. We have a Prime Minister who has described the Sovereign Yachts deal, which was basically a sweetheart arrangement, as “giving substance to our vision of New Zealand becoming innovators to the world, turning great ideas into great ventures.” Sovereign Yachts has put paid to that. Giving $1.5 million to Ross Perot is just a waste of taxpayers’ money.

This bill does not give any sense that this Government has any idea about how it will reverse the decline in our economic fortunes. It is just fiddling with bureaucracy when there are much more important issues it could be looking at—such as those outlined in our plan for prosperity for all New Zealanders, which was released by our finance spokesman, Don Brash, and our leader, the Hon Bill English. That document sets out a plan for going forward, which is far more than this Government has ever proposed. I ask the Government to rethink its 1-month time line on this bill. It is far too important to be treated with such disdain.

GORDON COPELAND (United Future): United Future will support the first reading of the Industry New Zealand and Trade New Zealand Integration Bill, and its referral on to a select committee. When I looked at the title of the bill, I could not help but think of the fact that, for many years in New Zealand, we actually had a Department of Trade and Industry. That department has long since ceased to exist, and I think it is now the Ministry of Economic Development. In a way, it is interesting to see how the wheel turns, as, years later, we find that, by the integration of these two entities, we will end up with something that brings trade and industry back together, albeit under the new name of New Zealand Trade and Enterprise. I hope that the change from “industry” to “enterprise” will signal very clearly that this new Crown-owned entity will be there to foster trade opportunities for New Zealand companies in every way possible, and that, in particular, it will assist New Zealand business obtaining new overseas market and commercial opportunities.

As I have said, we will support this bill. We think it makes good sense to bring the two agencies together, and, as the Minister has said, to provide a seamless service to New Zealand businesses, leading from this country into the many different markets overseas where New Zealand enterprises find demand for their goods and services. However, we make one request of the select committee that is to consider this bill, and it has to do with the perceived culture that exists in these agencies. On the one hand, some commercial organisations say to us that Trade New Zealand sometimes acts as if it is part of the diplomatic corps, and that it seems to be very concerned with the process of diplomacy in dealing with trade opportunities. On the other hand, they say that Industry New Zealand sometimes seems to be a politically orientated organisation. In other words, there is a perception that it is like an extension of the Government, and particularly of the Progressive party and the Minister, Jim Anderton.

Although we can understand that to some extent, in our view it is terribly important that the central culture of this new organisation should be clearly focused on the task of assisting New Zealand businesses to maximise their trade and competitive opportunities. Therefore, there needs to be not just a change of name, to New Zealand Trade and Enterprise; the organisation actually has to be enterprising in the way that it seeks out business in an innovative manner, and in the way that it employs people who have business nous, and understand business, trade, and enterprise. For example, I would like to see the select committee give thought to this new Crown-owned enterprise making a habit of employing people who have actual, hands-on trade and commercial experience, so that it can succeed in its objectives for the good of New Zealand and its businesses.

DAIL JONES (NZ First): New Zealand First would like a Government member to stand and explain why New Zealand First should once again support a bill that refers to Industry New Zealand and the matters relating to it. It was only in July 2000, in the middle of 2000, that New Zealand First went to the trouble of supporting the Hon Jim Anderton with his Economic Development (Industry New Zealand and Ministry of Economic Development) Bill. We steadfastly supported that Labour Government’s proposal of an Industry New Zealand body, because we are supportive of anything that will improve the welfare of New Zealand. But it is clear that, in barely 2½ years, this minority Labour Government’s policy in this area has failed. Otherwise, why would it have a bill in the House repealing an Act that it was responsible for and passed as recently as less than 3 years ago? It is not surprising that this Government does not have the support of business in New Zealand any more, and that business support for this Government is declining. The reason is that its own policies are changing within a span of less than 3 years, which is the usual term of a Government. I would like a Labour Party member to stand up and say why New Zealand First should continue to support this measure—a measure that we gave such steadfast support to less than 3 years ago.

It is interesting that the United Future member Gordon Copeland, who spoke before me, should now support this bill, because that party steadfastly opposed the previous legislation, which created Industry New Zealand. Right throughout, in every vote, United Future opposed that legislation. But today, like the lapdog political party it is, its members get up and support Labour, even though they essentially voted against the creation of Industry New Zealand less than 3 years ago. They look at me with some surprise. Obviously, they have not done their homework in this matter, and have left themselves wide open to continuing ridicule. And we will be ridiculing them time and time again in this way, I am sure, as this term progresses. Less than 3 years ago they said one thing, but today they are here in the House, saying another thing and supporting this legislation.

New Zealand First has always supported the concept of Industry New Zealand, but we are entitled to ask why we should support it. Why has there been such a failure on the part of this minority Labour Government with this Industry New Zealand body? Why should we support it today, in a new form, without any indication that it will be successful? What is there in this particular bill that will make this body more successful than the one that has failed? Obviously, it has failed; otherwise, the Government would not be back in this House, changing something that it created only a short time ago.

It has failed, despite all the promises from the Hon Jim Anderton, as set out in Hansard, Volume 585, at page 3721 onwards, dated 27 July 2000. I suspect the main reason would be that there has not been enough money. There have been lots of good ideas and lots of talk from the Hon Jim Anderton about development of New Zealand industry and trade and the like, but there has been really no support from the Prime Minister and the Minister of Finance in this area. That is why the whole idea of Industry New Zealand has collapsed in a dismal heap. Now the Government is trying to wipe it away by merging it with something else, and trying, perhaps, to get some money from that other body to make sure that the concept of Industry New Zealand will survive.

It is interesting to reflect on a recent speech made by the Hon Jim Anderton. He said on 27 July 2000—on page 3722 of Hansard—“Industry New Zealand will be a special-purpose agency with a clear mandate. It will be facilitative, it will listen, and it will deliver.” Well, it has not facilitated anything other than the failure of Sovereign Yachts. Industry New Zealand may have been spoken to, but I doubt very much whether it has listened. And it has not delivered anything. It has come to an end. This is virtually the liquidation of a failed Labour Government policy.

The Act we are repealing provided for the board of Industry New Zealand to establish advisory committees. It set out various provisions for select strategies and recommendations, and it set out Industry New Zealand’s amended functions, allowing for advisory groups to work on strategies for a particular region. It had all the hallmarks of that old-fashioned and very good idea of the time—but which is now past its time—of regional development. Clearly, Labour is saying that it was unable to get the regions to come to the party. It was unable to support the regions, it was unable to get new ideas under way, so it is quietly trying to sweep Industry New Zealand away under the carpet, and hoping that no one from the regions ever mentions that body to it again.

What do the Gisbornes of this world have to say? I would like the member for Gisborne to stand up and tell me what the consequence of Industry New Zealand being merged will be. I am sure this idea was sold to the member for Gisborne a long time ago—at least, less than 3 years ago. What do the member for Whanganui and the members for all those other smaller seats have to say, including the member for Masterton? I expect the member for Masterton will get up and tell us why the Industry New Zealand Act, which was going to foster regional development, should now be got rid of by the Hon. Jim Anderton—a Minister who only a little while ago was saying what a wonderful idea it was, and how much it was going to deliver to the people of New Zealand.

Why is the Government cutting down the time of the bill at the select committee to 1 month? Obviously, it is because it does not want the people of New Zealand to come to the committee and say: “You guys failed again. That’s why we don’t support you any more. That’s why we don’t support this minority Labour Government any more.” The minority Labour Government members cannot stand to take the medicine of being told that their policies are failing, so they want to concertina the bill’s time at the select committee down to 1 month. Bills often spend 6 months, or even 12 months, at a select committee. We will achieve nothing in 1 month. There will be barely time for submitters to respond to the notice in the papers about the select committee hearings before those hearings will be over. That is why the Labour Party Government—

Hon Brian Donnelly: They may as well have done it in urgency.

DAIL JONES: As my honourable friend says, the Government might as well have done it in urgency, because the select committee process is an utter sham. As I said before, Industry New Zealand was a body that was going to listen. It was going to deliver. Well, it has not been heard, and it is now being shut up. It is shutting up shop well and truly. It is a failure on the part of this minority Labour Government. It admits that, so early in this term of its administration. No wonder industry does not want it in office any more!

However, New Zealand First is always willing to try something. We always live in hope, but we will be opposing the bill’s time at the select committee being reduced to 1 month. We want it to have its proper time there. At the end of the day, we will still support the bill going to the select committee, because we need the people of New Zealand to come and tell the Labour Party representatives on it that they do not support them, and to ask United Future why it changed its mind. After all, United Future opposed the previous legislation all the way through; now that party comes to the House and supports this bill. The public should be able to ask United Future what was not good about that legislation a little while ago, and why it thinks this bill is good today. As I said at the beginning, I look forward to a Labour Party member explaining why the Hon Jim Anderton has to admit total defeat with this legislation, and why we cannot have more time in the select committee to discuss the matter.

HELEN DUNCAN (NZ Labour): I am pleased to have the opportunity to speak to the Industry New Zealand and Trade New Zealand Integration Bill. It is designed to allow two fine, well-performing organisations to merge in order to allow a more efficient use of resources, and to provide a better service to those using those organisations. Under this Government, the stories from the regions are ones of growth and progress, and this merger will provide businesses with a one-stop shop for seeking advice and information on developing their enterprises. This bill will be good for industry and trade in New Zealand, and I recommend it to the House.

Hon KEN SHIRLEY (Deputy Leader—ACT NZ): I listened with great interest to Mr Dail Jones of New Zealand First. I think he gave an excellent speech. He made some very good points, and I would like to elaborate on some of them. But he was totally inconsistent and irrational in his analysis, because he absolutely rubbished the organisation, then said how happy New Zealand First was to support Industry New Zealand. In my mind those two positions are quite incongruous, but be that as it may.

What I can tell the House is that ACT New Zealand is certainly opposed to the melding of Industry New Zealand and Trade New Zealand. We actually believe that Industry New Zealand is really a political creation of Jim Anderton. It is that old Alliance party policy—I think that even Labour may have abandoned it now—of Government programming regional development. We, of course, heard Jim Anderton for many months claiming that he was responsible for turning round the Southland economy. He claimed that Invercargill, which had been in a state of malaise for some 20 years, was now booming because of his delicate hand of intervention. I think all of us knew that that was absolute baloney. The only reason that Southland had a turn-round of fortunes was the dairy industry. When the dairy price rocketed to the high of $5.70 a kilogram, all those Northlanders from up the Waikato and around Matamata were buying properties down in Southland, doing conversions, and milking up to 1,200 cows. All that investment was flowing into the rural economy, and, indeed, that is why this Government has had such a dream run. It has nothing to do with its policies; the Government is busy messing up the fundamentals. It has been all about good export prices, a relatively low dollar, and good climatic conditions. What we know is that those three stars have now moved out of alignment. The dollar is going up, the dairy price has gone down to—$4.70 now? Do I hear lower?

Hon Brian Donnelly: $3.60 and falling.

Hon KEN SHIRLEY: It is $3.60 and falling, unless one is a supplier to Tatua, of course. So the price has gone from $5.70 down to $3.60, and falling. All of a sudden, Southland does not look so wonderful, and when has Jim Anderton taken responsibility for that? We do not see him. That is the nonsense of the Government’s policies in regional development.

We have, of course, had generations of this. Successive socialist Governments have tried to set up regional development plans. I remember the early days of the Forest Service. It would go and burn off tracts of native bush—napalm them, actually—so that it could plant pine trees in the name of regional development. Many of those trees are actually ready for harvest now, but the foresters tell me that they would never bother cutting the trees down, because the cost of harvesting and transport to the mill or port makes it economically unviable. Indeed, on the East Coast, up past Tolaga Bay, it is highly questionable whether cutting down some of those forests is actually viable. All of them were planted by the State, by the taxpayer, in the name of regional development. It is an absolute myth.

Then, of course, we have had the Government supporting the plastics factory on the West Coast, and all the shams associated with that. We saw Sovereign Yachts—Jim Anderton again. His great launch of Industry New Zealand was with Sovereign Yachts, but a fiasco has been associated with that.

So we are philosophically opposed to Industry New Zealand. It is not the role of the State to try to be the benevolent helper of industry and commerce. It is that old great lie. There are three great lies, and one of them is: “I’m from the Government. I’m here to help you.” Whenever people hear that, they should run a mile. Whenever a bureaucrat says: “I’m from the Government. I’m here to help you.”, trouble is on the way. There is nothing surer.

When we look at the explanatory note of the bill, we see that two Crown entities are going to be dissolved, and a new one established, which “would allow the new organisation to develop a strong commercial culture”. Do we want a body of State, a bureaucratic monolith, behaving commercially? ACT says no. That has never worked in the past. All it does is take taxes off business and struggling New Zealanders—so they are paying more tax than they should be—in the belief that, somehow, a bureaucratic monolith set up by the Government will be of help. All the evidence shows that it does not help. Actually, it is a hindrance. Even Tradenz has often been more of a hindrance than a help. Such organisations cannot act commercially. They are, essentially, a body of State. They cannot second-guess the market. I know from personal experience of some horrendous stories of so-called help from Tradenz that has actually messed up the marketplace for commercial ventures, and the thought of putting those two together—Industry New Zealand and Trade New Zealand—in one bureaucratic monolith is, I and ACT New Zealand believe, a recipe for disaster.

So we will not be supporting this bill. We do not believe that it should even be referred to a select committee. In a way, it is almost an admission of failure. It is really saying that these two organisations have not worked, and that therefore they have to be somehow stitched together to make them viable.

I think that Mr Jones in his speech put an alternative reflection on it. He suggested that this bill is really a way of trying to cover up the nonsenses that we have seen in recent years with Industry New Zealand, by tucking it under the umbrella of Trade New Zealand to try to sanitise it. That is the impression I got from Mr Jones’ speech, and that could well be the case, because I think the Government must be embarrassed by the performance of Industry New Zealand—absolutely embarrassed. We have all heard some of the stories of businesses being offered huge blocks of money from Trade New Zealand. It is the old story of trying to bribe people with their own money. In other words, the Government takes taxes off business, takes taxes off people, then employs bureaucrats in Wellington to fly around the country, stay in flash hotels, and go out to businesses and say: “Boy, have I got a deal for you! I will give you a bundle of money if you take this grant from Trade New Zealand.” It would be far better not to take the tax off the business in the first place.

I believe that strong, independent business is the creator of wealth, not the Government trying to act commercially—and that is exactly what this bill states. It mentions the development of “a strong commercial culture”. Well, the thought of a big, Government, bureaucratic monolith trying to develop a strong commercial culture is a contradiction in terms. So ACT will be opposing this bill strenuously.

DAVE HEREORA (NZ Labour): It gives me pleasure to stand in support of the Industry New Zealand and Trade New Zealand Integration Bill.

ROD DONALD (Co-Leader—Green): As we now know, this bill merges Trade New Zealand and Industry New Zealand. As Gordon Copeland said, if we stick around long enough, everything goes full circle in this place. The new organisation sounds suspiciously like the old Department of Trade and Industry. Members will recall that the Department of Trade and Industry was restructured out of existence as successive Governments took a corporate path.

I personally have serious doubts that Crown entities perform any better than old Government departments. At least old Government departments had Ministers, and Ministers could be held directly accountable for the actions of those departments and could not hide behind private sector directors appointed, at some considerable cost, to govern those entities.

I have to say that the new name, New Zealand Trade and Enterprise, does not inspire confidence. I am not suggesting that we call this bill the “Department of Trade and Industry Resurrection Bill”, but I do think that the name “New Zealand Trade and Enterprise” is rather a mouthful. It reflects the turf wars that are still going on between the Trade New Zealand people and the Industry New Zealand people behind their flash logos. Why do we not call the merged organisation “Enterprise New Zealand”? That name is sharper and more focused, and it would embrace all the economic activity that the organisation is set up to support, whether it is goods or services, export or domestic.

But perhaps the failure to produce a decent name is symptomatic of the farce that this bill clearly is, because the merger is already under way. I have a letter, dated 18 March, that tells me that the establishment board already exists, and that the new chief executive officer starts work on 7 April—even before the absolutely unacceptable report-back date that we have been given for this bill. Indeed, the chief executive of Industry New Zealand leaves this Thursday, so I guess we have no choice but to pass this piece of legislation. Clearly, Industry New Zealand is about to go out of existence, and, what is more, that has been planned since November last year. Clearly, the Government is covering its embarrassment by giving the select committee only 1 month to consider this bill because on 1 July its new, exciting flagship, New Zealand Trade and Enterprise, is going to be up and running. That date is the start-up date, so this legislation should have been introduced months ago. To do our job properly, Parliament should be assessing the performance of both Industry New Zealand and Trade New Zealand, so that we can assess whether those two bodies have done a good job and whether the outcome of merging them would be any better.

We have very serious concerns about many of Industry New Zealand’s funding decisions. Other members have already highlighted the Sovereign Yachts fiasco. A more recent decision, of course, was to give $1.5 million to EDS. If I recall correctly, EDS made a profit of over $1 billion last year. Why should this Government and New Zealand taxpayers be indulging in corporate welfare just because a foreign multinational organisation claims it will produce some jobs? We know where jobs come from. They come from community economic development and from small businesses. That is where Industry New Zealand should be putting its focus, and that is where Trade New Zealand should have been, as well.

We are concerned that the merged body will be even more fixated on exporting rather than import substitution. In our view, trying to fly on one wing is a failed strategy. Export-led growth is in fact delivering trade dependence, and we have only to look at the figures for the year to December to see that that is the case. New Zealand’s trade deficit for the last calendar year was $1.33 billion. The year before, we had a trade surplus, but for only 1 year out of the last 8 have we had a trade surplus. Is someone trying to tell me that Trade New Zealand has been doing a good job when it has produced the goods in only 1 out of the last 8 years?

Let us look just at the relationship with Australia, our cousins across the water. Here we are celebrating 20 years of closer economic relations. Well, for 18 of those 20 years the relationship has gone Australia’s way, because it has had the trade surplus. For the year to December, our deficit with Australia was—all on our own, one country—$1.13 billion. That has a lot to do with the fact that we do not make the most of the opportunities that present themselves to us, and one of those is the Industrial Supplies Office, a tiny little unit in the current Industry New Zealand set-up. We could have learnt a lot from the industrial supplies offices in Australia. They are much more proactive, as Mr Anderton was indicating before. They are not happy about the new structure, because the office in New Zealand will now be part of an export-oriented agency, not just an import-substitution organisation assisting Government departments in New Zealand. The Industrial Supplies Office will be part of this new monolith seeking markets in Australia. Under closer economic relations, the industrial supplies offices over there are meant to work together with us, but they are hardly likely to share information with our office now that we are in competition with them. What steps are being taken to resolve this issue and others? That is one of the key questions this Government has to answer.

Our biggest concern, however, is the absence of any commitment to sustainability. I note with interest that the new chief executive, Tim Gibson, is a cheese maker. I hope he stays true to his profession—“good things take time.”—because that means taking a long-term view, rather than lunging at quick fixes—that is, having a focus on sustainability rather than short-run profits. I hope he brings a new culture to the new organisation, because when Industry New Zealand was established, the Labour Government fobbed the Greens off when we called for a triple bottom line criterion to be applied both to Industry New Zealand’s activities and its funding. The Government failed to deliver on that occasion, and I have no more confidence that it will deliver now. The policy statement it put together then was conceptually flawed, as it built on an Act of Parliament that set in statute the purpose of “sustainable economic development”.

That is a concept that has no international use or currency, according to New Zealand’s own Parliamentary Commissioner for the Environment. He told the Commerce Committee exactly that on 19 June 2000. I hope he will be back to try to give the committee some advice on this bill, and I hope that this time the committee will listen, because Industry New Zealand has failed to live up to any reasonable expectations of ecological sustainability. There was no clear objective, anywhere in its activities, to reduce the overall environmental impacts of industry, to live within natural income rather than depleting natural capital, or to achieve greater output while reducing resource throughput. There is no explicit direction to shift industries, including agriculture, to cleaner production methods; to shift from more toxic to less toxic production methods and products; to address waste management in a meaningful way, with a goal of zero waste; or to achieve best practice in terms of the sustainable management of natural resources, including water. There is no reference to renewable resources or renewable energies, or any requirement to seek to enhance the ecological systems on which much production and all life depend. In other words, it does not meet our expectations because it does not achieve what it ought to set out, which is sustainable development—development that fits triple bottom line criteria of not only meeting economic goals but also meeting environmental and social goals.

I do not believe that this new agency will achieve that. I do not believe that it will involve the community, as in the voluntary and non-profit sector, in achieving those goals, either. I look forward to trying to scrutinise this body at the select committee, albeit that we are given only 1 month to do that job—and that, I think, is an indictment on this Government. The Government has taken since November last year to bring this bill to Parliament, and now it is giving us only 1 month to check whether it is, indeed, the one-stop shop that Mr Anderton talked about. Quite frankly, it is not. He has got it wrong in the first place, because it does not include tourism. I am glad it does not, but the relationship between Tourism New Zealand and this new enterprise agency is one area we need to look at. Every overseas visitor to New Zealand becomes an export market when he or she returns home, and that is a connection we should be making—as well as the other points I have made.

DAVID BENSON-POPE (NZ Labour—Dunedin South): I am pleased to rise in support of this bill.

JOHN CARTER (NZ National—Northland): It is always disappointing when the senior Government Whip takes a call, then does not make a contribution. I must say it is rather sad. I am not quite sure where he got the precedent from, but it is a pity that—

David Benson-Pope: You have a meeting, too.

JOHN CARTER: Mr Brownlee will be going to that. What worries me with this bill—and it has worried a number of previous speakers—is that here we are, fiddling while Rome burns, and although we might want to discuss the issue of the integration of Industry New Zealand and Trade New Zealand, I would have thought that the Government would want to spend more time on issues of the economy and what is happening to New Zealand. This bill will not help the New Zealand economy, which is now in a slow-down. This bill, which is bringing two Government departments together, will not change the confidence of New Zealand and New Zealand businesses, and that is a real worry to us. We should all be concerned about that.

I wish that the Minister, when he made his address, had told us how this bill will change the latest Colmar Brunton poll, which showed that 18 percent of respondents believe that the economy will deteriorate in 12 months. I wonder why the Minister, when he was making his introductory remarks on this bill, did not bother to tell the House how the bill will make a difference to the confidence of New Zealand. I wonder why he did not tell us why the Westpac McDermott Miller Consumer Confidence Index is showing that a net 6 percent of respondents are now pessimistic and expect New Zealand to get into bad economic times. I wonder why the Minister did not bother to address that aspect and tell us how this bill will make a difference to the New Zealand economy.

I wonder why the Minister, when he was telling us about the Industry New Zealand and Trade New Zealand Integration Bill, did not talk about the dairy industry and the fact that prices in New Zealand are down—

Brian Connell: Through the floor.

JOHN CARTER: Through the floor—worse than in Australia. We have gone from, I think, $5.30 a kilo last season to less than $3.60. In fact, it is still going down. How come the Minister did not bother to tell us about that? What will this Government do about those economic indicators, I wonder. He did not mention anything about how this bill will help the economy, and nobody in this House, certainly on this side, believes that it actually will. Not one of the speeches I have heard, including those from United Future, has actually said that this bill will make the economy better.

We would have thought that the Government would want to concentrate on the economy, but no, not this Minister. He is more worried about playing with the bureaucracy. I wonder why he did not mention the droughts and the impacts they will have? What about the energy crisis? Surely the Minister would have wanted to address that when he was telling us how this bill will make the country go better. Not on your nelly! There was not one word about the energy crisis. I would have thought that the Minister, given that he is a long-serving member of this House, would tell us how this bill will fix the energy crisis. But no, there was not a sausage, not one word, on it. That is the problem with this Government. So many bad things are happening around the country, and the whole issue of the economy is an example. Everybody in this House knows that the economy is on its way down. We all know that during the last 3 years, when we had a real cakewalk, the Government has been lucky. We know that the economy is going down the tubes, and what does this Minister do? He brings in a bill that amalgamates a couple of departments.

Well, that sure as heck is not going to fix anything, and it is a real problem that we have. This bill will not address the problem with the economy. What is more, I have to wonder what the bill actually will do. The Minister has talked about his work with regard to regional development. Indeed, in his speech he has told us that things are going well as far as regional development is concerned. Actually, it is an abject failure. I would love the Minister to stand here and rattle off the names of the people and the businesses that have actually benefited from his policies with regard to regional development because, boy, are they hard to find! They are hard to find because he has got the whole policy set wrong.

What happens is that people come to him and say: “Got a great idea. Need some support. Need your help, Jim.” Then Mr Anderton says: “Yep, that sounds all right.” He puts their names in a hat, gives it a shake around, and draws one out, or a couple, or two or three, by whatever criteria, and gives them a few dollars to get started. Those people get on their way. When they have been going for 12 months and things are looking pretty good, they may find, however, that they need a bit more help because often these things do not happen in just 2 minutes. They may take 4 or 5 years to get on their way and get going. So those people come back to him the next year, and say: “Look we’re ready to do the next step. We need a hand here. Can you give us a bit more help?” Not this Minister, not his department, and not his regional development policies. They do not make things work, at all. In fact, they say to those people: “No, sorry. We gave you some last year. There are others who need help now. You’ll have to be on your own.” The point is, why did he ever start?

Hon Annette King: Keep writing your speech.

JOHN CARTER: No, this is just a little side issue. If this Minister is not going to see a project through, he should not start it. All he is doing is building up people’s hopes and aspirations, then we find that they are dashed. I have come across so many projects, so many people who have started off with good ideas and who have had some help from this Minister and this Government—the “Helen Clark, minority, supported by Jim Anderton—”

Jill Pettis: And socialist.

JOHN CARTER: —the “Socialist, Helen Clark – led, Jim Anderton – supported Minority Government”—only to find those hopes dashed. Even people in Meremere cannot get any assistance. Jim Anderton has failed. Indeed, he will come down to the House at some stage—no doubt he is listening on his crystal set to this speech—and he will come bowling in here, and say: “That member should talk to the leaders of Northland. They will tell the member what a good job I am doing. They will tell him how regional development is helping Northland.” I can tell the House that they would not say that now. They were supportive at the beginning, and I must say that it looked good. When Jim Anderton made the announcements, I said to him: “Good on you. If you’re going to help Northland, I’m right behind you. I’ll help you, even though I’m in Opposition. If you have got a good idea, we will use it in Northland.” Well, sadly, I have been misled, and the people of Northland have been misled. The leaders, the mayors, and the regional council chairmen have all been misled. They have now got to the stage where they are so cynical that they do not want a bar of what he is doing. I have to say that it is a great shame that the Minister has not gone about and done the job that he said he would.

I want to mention, briefly, an organisation I went and saw the other day, and I suggest to my colleague Brian Connell and others that they also go and look at it. I am talking about the Methodist Employment Generation Fund. I tell members that those people are doing what Jim Anderton should be doing. That organisation is picking up people who need a bit of a hand, and it stays with them until it gets them on their feet. It is there for 2, 3, or 4 years if people need it to be—and boy, is it making things work! We do not need to develop anything new. Quite honestly, what we need is already here. We need to take a leaf out of that organisation’s book. If we did, we would have some proper regional development. If members want to know about it, they should come and get the address from me. I will happily give members the names of those people, and they can go and have a look.

Finally, there is one more thing I want to say. Yet again I am appalled by the way this Government rams legislation through select committees. I sit on the Business Committee. In fact, I should be there right now, talking about the issues of the House. Most members of the Business Committee know that the Government constantly passes resolutions stating that a bill is to come back to the House in 6 weeks, 2 months, or whatever, and that, after a certain length of time, there is a request for an extension because the select committee could not get the bill through on time. I say to the House that I bet that the Commerce Committee does not have a bolter’s hope of getting this bill back in a month’s time. I say to members that they should not support the motion stating that the bill be reported back in a month’s time. Members should not do that, because this bill will end up like every other bill that this Government says should have a short life at a select committee—that is, the Business Committee will be addressing the question of an extension of time. It is not right and proper that a select committee should be expected to deal with an issue in a month. I know that there might be a whole lot of budgetary factors and so on around this matter, but the Government should have planned its legislative programme a lot better. It is not right to ask this House to support something that will not work, and we will vote against that aspect.

JILL PETTIS (NZ Labour—Whanganui): All the wittering and procrastinating from the Opposition that has gone on this afternoon is doing nothing to foster growth, industry, and innovation in this country. The most important thing we can do for business is to get this bill passed. Therefore, I am pleased to support its passage through the House, and I think we should get on with voting.

BRIAN CONNELL (NZ National—Rakaia): I start my contribution to this debate by saying that National approves of the idea of bringing Trade New Zealand and Industry New Zealand together as one entity. We support it because of the significant benefits that should flow through shrinkage of bureaucracy. Ideally, we should get economies of scale, bringing about significant resource savings in time and in money. The problem, though, is that this is not enough. I accept that it is a step in the right direction, but in terms of helping business in New Zealand, it is not helpful. In fact, it is about as helpful as the Greens’ economic policy.

Why will this bill not make a difference? The answer is very simple. It does not address the issues. It is quite plain that if Jim Anderton stopped talking to journos, seeking interviews, and talking himself up, he would start listening to business owners, just as my party has been doing. Talking and listening is what National members have done, and this is what we have heard: all the businesses we have talked to say that they have been shackled and hobbled by rising compliance costs and anti-business legislation. How can we compete nationally and internationally while this Government is jacking up fixed costs at every turn? If Jim Anderton were serious about regional development he would do something about compliance costs. I dare say that he could also help by resigning.

The costs of doing business in this country are rising steadily, and no one in the Government seems to understand just what damage that is doing to us. We will not attract investment. In fact, we will scare it away. In the last year alone, medium-sized businesses in this country saw their compliance costs go up by $43,000. That is a helluva lot of money. For the benefit of members opposite, I want to explain a simple concept. A rough expense-to-income ratio in business is 1:7, which essentially means that for every dollar a business spends, it has to make $7 just to stand still. It is a simple concept. If members work it through, that means that a medium-sized business in this country has to turn over approximately $300,000 just to stay in the same position. I understand, of course, that that ratio fluctuates a little bit depending on the debt-to-equity ratios, but no one can deny that it is an astounding figure. But what I truly find amazing is that Jim Anderton does not seem to give a damn. We have all heard him blathering about Sovereign Yachts, and how well business in this country is doing, but he never seems to grasp the real issues. Talk is cheap, but when the rubber hits the road he and his Government are found wanting. As Mr Carter pointed out, the Government is tweaking the bureaucracy of Trade New Zealand and Industry New Zealand while business confidence is plummeting—that was well put by my colleague. I would add the fact that it was Nero who fiddled while Rome burned.

This Government claims that it cares about regional development, yet when we talk to regional businesses they say that the thing holding them back, more than anything else in this country, is the Resource Management Act. Across the nation, across businesses, costs have skyrocketed under that Act. That type of foolishness, which the Ministry of Economic Development should be addressing, is exactly why the Industry New Zealand and Trade New Zealand Integration Bill will not make any real difference. What is the Government’s response to businesses concerned about the Resource Management Act? Its response is to make it more bureaucratic and costly. These sorts of things are being put forward in the bill being legislated today. Labour has rejected direct referral to the Environment Court for major projects, rejected landowners’ rights to be consulted over wāhi tapu and significant natural areas, and introduced legal aid for objecting. I could go on, but I think that the House is getting my drift. Until we have someone with a bit of business acumen in the driving seat, we will not see any changes, and our economy, now that the golden weather has passed, will just get sicker. The Industry New Zealand and Trade New Zealand Integration Bill does not address the core problems. If we want to increase foreign investment and stronger local companies, we have to work for it. The new structure will be better than the old, I grant, but it needs to be staffed by people who know how to turn a buck and understand the way business works. We cannot simply rely on company structures, and I see that as a fundamental flaw in this bill.

This Government has maintained its silence on key topics plaguing business. It has ignored questions such as why our businesses cannot have certainty over the supply of electricity. Incidentally, that is a question that my colleague Gerry Brownlee had blocked by this Government when he tried to bring an inquiry into the electricity disasters facing this country. That is a topic our industries want to see addressed. They cannot afford to be sidelined simply because this Government finds it embarrassing. That is the distinction between governance and politics. Even the Government’s union buddies are telling the Government to lift its act around electricity because it is doing this country immense damage. The other factors that are threatening business—which Jim Anderton’s trade organisations have maintained a blissful silence over—include the Employment Relations Act, the Holidays Act, and the Health and Safety in Employment Amendment Act. Those were disasters for business and they have scared the hell out of investors. Yet neither of those organisations has uttered a word of warning, and this bill will not do anything to change that.

The Government shows no sign of holding back on its anti-business assault. Jim Anderton is to business, in my view, what George Bush is to Iraq—a relentless and implacable foe. Every time National members and our colleagues in ACT pointed out the dangers of the Local Government Bill, for example, we were howled down as scaremongering. We now know that Jim Anderton’s own officials at the Ministry of Economic Development warned him. I quote to the House an article in the National Business Review: “‘At their worst, these proposals have the potential to give wider powers for local government without any constraints because of the weakness of the accountability framework and the inability of the community to clearly signal their preferences,’ a paper from the Ministry of Economic Development warned ministers in April. ‘The result is potentially higher taxes and other charges for the community, including business; a broadening of the scope of local government activity into areas where there are only tenuous links to overall community outcomes, and therefore significant potential for economic costs and no improvement in regulatory management.’” Even the Ministry of Economic Development saw this as a problem, yet Jim Anderton chose to just ignore it. Business must feel free of arbitrary Government interference driven by political considerations. This Government’s view of business, as a giant pocket in which we can continually trawl, must stop. Businesses cannot afford it, and they are deeply concerned. They have no confidence in what the Government is proposing under its economic platform. This bill confronts none of those issues, yet it is exactly the time to do so. We have reached the crisis point. We have frittered away incredible opportunities over the last 2 years, and now it is time to act.

A party vote was called for on the question, That the Industry New Zealand and Trade New Zealand Integration Bill be now read a first time.

Ayes 107

Noes 9

Bill read a first time.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 7; United Future 8.

Green Party 9.

Hon STEVE MAHAREY (Minister of Social Services and Employment): I move, That the Industry New Zealand and Trade New Zealand Integration Bill be referred to the Commerce Committee for consideration, and that the committee report the bill finally to the House by 28 April 2003.

The question was put that the following amendment in the name of the Hon Tony Ryall be agreed to:

to omit all the words after the words “Commerce Committee consider the bill.”.

A party vote was called for on the question that the amendment be agreed to.

Ayes 47

Noes 69

Amendment not agreed to, and motion agreed to.

New Zealand National 27; New Zealand First 13; ACT New Zealand 7.

Labour 52; Green Party 9; United Future 8.

Bills

Government Communications Security Bureau Bill

Instruction to Committee

Hon STEVE MAHAREY (Minister of Social Services and Employment), on behalf of the Prime Minister: I move, That it be an instruction to the Committee of the whole House on the Government Communications Security Bureau Bill that it take the bill part by part and consider any schedules as one question.

the motion be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 9

Noes 107

Amendment not agreed to.

A party vote was called for on the question that

HEATHER ROY (ACT NZ): I raise a point of order, Mr Speaker. Can I withdraw ACT’s vote? We are voting in favour of the motion.

The ASSISTANT SPEAKER (H V Ross Robertson): That is out of order.

LINDSAY TISCH (Junior Whip—NZ National): I raise a point of order, Mr Speaker. The member might want to seek leave to have the vote put again. That would be the tidiest way of proceeding.

The ASSISTANT SPEAKER (H V Ross Robertson): Does the member seek leave for the vote to be put again?

HEATHER ROY (ACT NZ): Yes, I would like to seek leave to do that.

The ASSISTANT SPEAKER (H V Ross Robertson): The member is seeking leave. Is there any objection to that course of action being taken? There appears to be none.

LINDSAY TISCH (Junior Whip—NZ National): I raise a point of order, Mr Speaker. I do not think there is any necessity to have a party vote. Just an oral vote would tidy the situation up.

Motion agreed to.

Bills

War Pensions Amendment Bill (No 2)

Instruction to Committee

Hon STEVE MAHAREY (Minister of Social Services and Employment), on behalf of the Minister of Veterans’ Affairs: I move, That it be an instruction to the Committee of the whole House on the War Pensions Amendment Bill (No 2) that it take the bill part by part and consider any schedules as one question.

Motion agreed to.

Bills

Wine Makers Amendment Bill

In Committee

Clause 1 Title

JOHN KEY (NZ National—Helensville): I rise to support this bill. Those people who have had an opportunity to study the Wine Bill will know that that this bill separates out Part 5 from that bill. The bill is supported by the entire industry, and makes some very important recommendations in order to meet the requirements of the European Union’s labelling standards, so that our wine can continue to be exported to the European Union.

Those of us who have studied the wine industry, either from a pleasure or an economic point of view, will know that the industry has grown enormously over the last decade or so—somewhere in the order of about $35 million of wine produced in this country in 1992 has increased to $250 million, and I suggest that there will be a very strong upward trend in the industry. There is a massive international demand for our wine, and with very good reason. We have led the way in producing such wonderful wines as Sauvignon Blanc, and New Zealand’s reputation is growing.

The European market is very important for our wine industry, and this bill simply contains our requirement to comply with market regulations. As I have said, failure to do so would prevent our wine from being exported, in particular, to countries like the UK. As someone who has lived in the United Kingdom for the past 5 or 6 years, I would have had to be blind not to see the amount of New Zealand wine that is sold there, not only in the fine restaurants in High Street but also in retail outlets right across the country.

I commend the Government for separating out clause 5 from the Wine Bill, and including it this bill. That is the whole purpose of the bill, and I commend the Government for doing that. It is very necessary to do so, because a failure to comply with the European Union’s regulations would mean that we would not reach our export potential. I make the point that, in a way, it is sad that this bill is required. It really is an example of a non-financial tariff being imposed by the European Union.

The CHAIRPERSON (Hon Clem Simich): Which bill are we talking about?

JOHN KEY: The Wine Makers Amendment Bill. Am I confusing you, Mr Chairperson?

The CHAIRPERSON (Hon Clem Simich): No, but the member needs to talk about the title, and the title only.

JOHN KEY: My great apologies. Maybe we should change the title to state “Part 5 of the Wine Bill”. Clearly, the title reflects the fact that the bill is very much related to the wine that is made in this country requiring good labelling. It is very important that those who consume and purchase wine understand what they are buying. One of the reasons that that is so critically important is that failure by one winery to understand and clearly label what is in its wine, as this bill demands, would really impinge on all winemakers and their reputation.

The title “Wine Makers Amendment Bill” reflects the guts of what this bill tries to do. Clearly, it is related to winemakers and is an amendment of the 1981 Act. I could maybe propose new titles now that would be slightly better than that title, such as the “Wine Makers, Producers, Growers, and Manufacturers Amendment Bill”. The wine industry has developed into a very large industry in New Zealand. One could argue that the word “Winemakers” is narrow, in the sense that the industry does not involve just the makers of wine. Clearly, it also involves growers and those who produce wine. “Makers” is quite a narrow term, in a lot of respects. Maybe a broader term would befit a bill such as this. However, I do not think we want to slow the passage of this bill in the House simply by arguing the semantics of a four-word title. I could be frivolous and waste the Committee’s time, but I feel that that would be totally inappropriate. I would never do that. This Parliament is far too important an institution for me to waste its time simply by arguing that the title of a bill could have five words instead of four. That would be totally inappropriate.

This is a winemakers’ bill. It is an amendment to an existing bill. It is important legislation, and I think at that point I may simply rest my submission on behalf of the National Party, as I see Mr Chairperson reaching for the bell.

GERRARD ECKHOFF (ACT NZ): I take my colleague Mr Key’s point that we do not want to delay the proceedings of the House unnecessarily. However, it is important that every member who wishes to do so exercises the right to debate this bill, and we are debating the title at this time. There is a disturbing trend that when we do debate bills, we need to be given some idea—indeed, the public should be given some idea, when they read that this bill was debated in Parliament today—of what it was all about. The reality is that somebody reading the Otago Daily Times tomorrow morning could simply gloss over the fact that an aspect that is very, very important to the wine industry was debated. There is absolutely nothing in the title of this bill that would give any indication to any member of the public that these provisions, which were in Part 5 of the Wine Bill, are all about securing access for our wine exports to the European Union.

We receive a lot of complaints about the levels of bureaucracy and the huge numbers of bills that we pass in Parliament, and this bill is crucial, as has been pointed out by Mr Keys. It is absolutely crucial to every winemaker, and indeed, to every wine exporter. This bill is not just about winemakers, as the title would have one believe. The title of the bill is quite wrong. If I had thought about it earlier, I would have put in an amendment to call the bill the “Wine Exporters Amendment Bill”. Winemakers, I would hope, recognise the job that exporters do in sending our good products—world-class products—to the world, because that is hugely important. We need to inform the public, when we debate bills like this one, that their titles are entirely accurate. I do not think anybody here would say that the title of this bill is entirely accurate. The word “exporters” should be included in the title of this bill somewhere along the line, in order to ensure that the wider public do understand exactly what is being reported when they read the paper, as they do on a regular basis, and see that “the `Winemakers and the Potential to Export Wine Bill’ came before the House on this Tuesday and was debated very vigorously and very soundly by all members present.”

I would just like to make that one point: that regrettably the title of this bill does not accurately reflect what these provisions are really all about.

DAIL JONES (NZ First): New Zealand First needs to take only a moment on this bill, as we did in the second reading. It is a very important bill for the growers of wine in New Zealand. I believe previous speakers in the second reading and the like have made the issue clear: we need to get this bill through the House because of the requirements of the European Union on our winemakers. I have read all 111 submissions to the Primary Production Committee on Part 5 of the Wine Bill. All those in the industry and those who are interested in this bill want it to go through the House urgently. New Zealand First supports that, and I have nothing further to say.

BRIAN CONNELL (NZ National—Rakaia): It is a challenge and a pleasure to rise to speak on this bill. I understand why the Government has separated out Part 5 from the Wine Bill, in order to drive this legislation through the House. It is because these provisions are required to ensure New Zealand’s wine exports meet the labelling regimes in overseas markets, especially those in the European Union.

One has only to travel around New Zealand to understand the importance of winemaking and wine exports to our economy. But I am not certain that we have captured that importance in the title of this bill. I think we have probably exercised a lack of flair. In fact, I would go as far as to say I am a little saddened by the title. The title “Wine Makers Amendment Bill” lacks a certain elegance, does it not? Although I hasten to add that this is not National’s position, surely we could have exercised a certain flair. After all, no winemaker has ever sold his or her clarets or Sauvignon Blancs under the exciting description of “pressed and fermented grape squeezings in a glass container”. I am sure that if we use the present title for this legislation it probably will not grip the winemaking industry, and I do not think it will grip the wider New Zealand public.

I think we have missed an opportunity here to capture the exciting allure—a little mystery perhaps—of winemaking and wine taking. I do not think that members of the Committee who have participated in an evening of wine sampling with a few friends in the middle of winter around a fire with a big juicy red in the hand would say that this title captures that excitement and pleasure. We could probably try a more appropriate title, like “New Zealand’s Exotic Wines Amendment Bill” or “Wine Exporters Amendment Bill”, because I think those titles would probably be more accurate descriptions of what we are trying to capture. The “New Zealand Wine Exporters Amendment Bill” might, in fact, be a better way of branding not only our industry but our place in the sun, when it comes to winemaking.

As an aside, though, if we can work together to hasten the passage of this amendment bill through the House, I wonder why it is that the Government cannot use its powers to speed other important legislation through the House, like the Wool Industry Restructuring Bill or the Resource Management Amendment Bill, for example. When it comes to passing those pieces of legislation the Government is dragging its feet. The Wine Makers Amendment Bill is probably setting a precedent—I hope it is—in how the Government might want to conduct its business through this House. If that is the case, I am sure that on other occasions it would be a real pleasure to speak about legislation of this quality.

LINDSAY TISCH (NZ National—Piako): I will take just a brief call on this bill. An important part of any debate, of course, is the title, and as other speakers have said, this bill takes out Part 5 from the Wine Bill. As my colleague John Key has suggested, the words “Part 5” should be in the title. That would clearly reflect, or crystallise, what the bill is about. We support this bill, which is about allowing New Zealand wine to have access into overseas countries. The European Union is very important, in terms of labelling and access.

I had the opportunity, just as the junior Labour whip had, to be able to sample some New Zealand wine recently in Madrid.

Brian Connell: As business?

LINDSAY TISCH: It was part of business. It was at the ambassador’s home in Madrid. There were people there who were importing New Zealand wine into Spain, and it is a growing and exciting market. I was unaware that that market had such potential through Spain and into Portugal. When one has New Zealanders involved in the export of New Zealand wine to that part of the world, then that is something to be encouraged. We want to make sure, as this bill allows, that they have access to that market. Of course, the European Union is very strict in its regulations and licensing, and our overseas exports are growing. They have doubled between 1990 and 2000, and the value of wine exports has increased from $34.7 million in 1992 through to $246 million in 2002. So in a 10-year period our wine exports have gone up by $200 million. That is significant, and we want to make sure that our exporters are able to compete in the marketplace internationally.

Having sampled that wine and been privileged to meet importers of New Zealand wine while visiting Spain, I certainly support, as National does, the progress of this bill. As I said, probably the title should reflect what the bill is about, and the words “Part 5” should be part of the title. National will be supporting that amendment.

Clause 1 agreed to.

Clause 2 Commencement

JOHN KEY (NZ National—Helensville): The sad issue, I guess, is that when one reads the commencement date one learns the bill comes in the day after the day on which it receives the royal assent. The real question is why this bill is being presented to the Committee with a commencement date sometime, I would suggest, in April or May. As the submissions to the Primary Production Committee pointed out—all 111 of them—this is crucial legislation for the winemakers of New Zealand, and the facts are that they will not have this legislation passed now, and that its commencement date will be later than the Government promised them. Winemakers were promised that the bill would be passed before Christmas. The bill was to have been a nice little Christmas present for them, and its commencement date was to have been before Christmas. Clearly they will not have that, as Christmas has come and gone. Indeed, the commencement date will now take place, as I have suggested, in April or May.

That saddens me, because winemaking is a crucial business and industry for New Zealand. It is an industry with a strong upward trend and an industry that, in many respects, will have its future in the export markets. We simply do not have enough people in New Zealand who will keep consuming wine, compared with the number needed to drink the volume of wine we could manufacture in this country, because we do it so well. I think that the Government has been a little tardy in introducing this bill, and because of that the commencement date will be later than the date that we on the National side of the House had hoped for.

GERRARD ECKHOFF (ACT NZ): The commencement clause is important. I always seem to be following Mr Key in these debates, and, as he says, it is important for winegrowers to understand exactly when this whole process is taking place. Clause 2 states: “This Act comes into force on the day after the date on which it receives the Royal assent.” When is that? Which date is that—in which month and year? That clause is very open-ended. Can anyone in this House recall writing a contract, for example, that was so open-ended as to come into force sometime? Is that clause not an example of bad governance?

I think that the Government really needs to take a hard look at itself, and to put some defined parameters around the commencement date of bills—not just this bill, but any other bill that comes before the House—to give a bit of certainty on this issue. Gracious me, that is what industry in New Zealand—indeed, anywhere else for that matter, but especially in New Zealand—is looking for these days. Industry is looking for a little certainty surrounding a very simple thing like a commencement date. If the Government cannot find an appropriate commencement date, that would indicate to me that the management and control of government in this country is not what it should be. Perhaps we have known that for 3-and-a-bit years now.

Nevertheless, the commencement date of any legislation is very important to those specifically concerned with the particular industry it deals with. Quite frankly, the open-ended date in this bill is not appropriate, and it is something that I believe the Government needs to address. But we would hope, for the sake of the wine industry, that this legislation will commence in the not too distant future.

Clause 2 agreed to.

Clause 146 agreed to.

Clause 147 agreed to.

Clause 148 New sections 31 and 31A substituted

JOHN KEY (NZ National—Helensville): I want to take a quick call on this clause. This bill, as members will know, and as those members of the public who have had an opportunity to study the bill will know, came about, rather interestingly, on the back of the labelling requirements of the European Union. I am the member of Parliament for Helensville, and within that electorate we have a growing wine industry. I have a real sense of pride, when I drive around my electorate, in seeing the vines of those wineries growing at the side of the road, and knowing they produce really international, world-class wine. I could name them for members, but they could probably name them back to me as the makers of the wines that they enjoy on an evening at any time of the year—Kumeu River, Nobilo Wines, Matua Valley Wines, Soljans Estate Winery, and I could name many more.

Interestingly enough, one of the wineries in my electorate is Coopers Creek, which is the very winery that led to this bill. Members will remember that in 1997 Coopers Creek was involved in a wine-labelling scandal that resulted in the demand that companies made sure they produced accurate labels. It is very, very important that the industry produces wine that is labelled accurately. Clause 148 certainly speaks to that objective quite clearly, and addresses at some length the need for that. Simply put, that is very, very important for the entire industry, because it relies very heavily, I guess, on a collective responsibility. If some consumers, particularly in the international market, were to try a bottle of New Zealand Sauvignon Blanc for the first time, whether chilled from their refrigerator or at a local restaurant, have it opened at their table and poured into their wine glasses as they were about to consume their food for the evening, and if they were to sip something that had a Sauvignon Blanc reputation—tasting maybe of gooseberry, with a light raspberry flavour to it—

Jill Pettis: It sounds as though you are speaking from experience.

JOHN KEY: I admit to the junior whip for the Labour Party that it is an experience I have partaken of from time to time. I can assure her that it would not be my first time; I cannot describe myself as a virgin drinker of New Zealand wines. I simply cannot put that label on myself, although labelling is the very nature of this whole bill. In some ways it is quite ironic that I am talking about labels for myself, because I am not here to talk about myself. Goodness knows, I do that often enough. I am here to talk about this bill.

The interesting thing is that if that wine I was referring to was not, for instance, a Sauvignon Blanc but a blend of some sort that had been mislabelled, then that could give the entire industry a bad name. The good name of the industry is really what we are trying to protect in this legislation, as well as our access rights to overseas markets for New Zealand wine. So clause 148 is an important part of this bill, and it drives this part of the legislation through—legislation that is supported by all winemakers in New Zealand. It is my great privilege, along with the National Party, to support the passage of this bill through the House and to support the very capable Minister.

GERRARD ECKHOFF (ACT NZ): I want to make the astounding revelation to the Committee that clause 148, of course, follows clause 147, which, for the benefit of some members, might be an interesting revelation. Clause 147 is a very important part of the bill because it is about the availability of information. I will not dwell on that, but I think it needs to be emphasised that the availability of information to winegrowers and exporters—the people who want to get out there and do the job of selling our product to the world—is very, very important. The access requirements for overseas markets are to be made available for inspection “free of charge, or for purchase at reasonable cost,’’ I note. That is quite contradictory, but it is a very important clause.

We come then to clause 148, and I note that new section 31(1)(h), which is inserted by that clause, states “prescribing the information or other matters that must be specified,”. There are some matters of concern relating to that provision. It is possibly not known to many members that some wines may well contain fish extracts. Fish extract is used to fine the wine—to take all the cloudy particles out of it. Will we demand of our winegrowers in this country that when people are enjoying a glass of wine in Spain or New York and they turn the bottle round to read the label, they can read that it “May contain fish extracts”? That will totally muck up, if I can put it that way, the experience of—[Interruption] Well, it is. It is a very important part. Have we clarified just exactly what will be on the label and what will not? If the department requires such explicit information, then I have a real problem. I do not believe for one moment that it is our intention to put on a label details that may well upset the experience—and it is a real experience—of enjoying a nice bottle of Cabernet Sauvignon, or whatever, from New Zealand because of the sort of information that is required on labels. That is a matter the ministry needs to clarify.

I make the point, as well, that not very long ago there was a degree of panic within the wine industry, when it demanded the removal of Chilean wine off the shelves because of a product called sorbitol. Sorbitol was not listed on the label, but we do drink it constantly—for example, when we have a bottle of Diet Coke. Sorbitol is just an artificial sweetener. But because there was a real problem with, I think, the Austrian industry adding antifreeze, for goodness’ sake, to its wine, resulting in people dying, that was seen by the New Zealand industry at that time as a reason to ensure that labels listed everything that was in products and that anything not listed on labels but in products should be included. The product sorbitol was used as the reason to remove Chilean wine, which is perfectly fine—in fact, it is of outstanding quality—from the shelves. We are not exactly squeaky clean in terms of these non - tariff trade barriers in our own backyard. It is very important to note that.

I am emphasising this point to ensure that those in the ministry do not get overly carried away by this labelling requirement. It does have importance in terms of whether product comes from Central Otago or Gisborne, and of ensuring that it is true to type—for example, a Riesling or a Chardonnay. But there are hugely creative people within our wine industry, so if we can come up with better ways of blending wines or ways of grafting grapes that perhaps are quite different from those in other countries, do we need to constrain ourselves just to meet some European requirement? I suspect that because people in the wine industry will read this bill and see the requirements, it might constrain some of the more creative and innovative members of this wonderful little industry that we are developing. It is also worth reflecting that our wine industry is a mere 20 years old. It is still in its infancy, and still evolving. To put prescriptive regulation around this industry at this time is not appropriate.

BRIAN CONNELL (NZ National—Rakaia): Thank you, Mr Chairman, for allowing me to take another call and make a contribution to this debate. I commend the last speaker, because he is quite right in saying that clause 147 comes just before clause 148. In particular, I am concerned that the bill contains strong powers of suspension for the Director-General of Agriculture and Forestry to act against registered plans that no longer meet the requirements of the bill. That is a very significant power. The questions I have are as follows.

Do we really want to see an industry that is in its fledgling state being so highly regulated? I understand the need to meet labelling requirements, but I suggest that maybe this is a little bit of overkill. I can imagine my good colleague Mr Tisch on his second bottle of claret suddenly saying: “We have to stop drinking this, because I haven’t checked the label carefully enough.” While he was in Spain I am sure that, had he found the label did not quite specify exactly what was in it, he would have relied on his taste buds, as opposed to what he might or might not have been able to read in his state.

The next question is more pragmatic. How are we going to police these new regulations? I have read the bill and it seems that a third party, a credited person, under the supervision of the agency, recognised by the regulator, is responsible for routine compliance monitoring, verification, and other functions. That to me suggests that we are creating another bureaucracy. Although the wine industry bodies will be asked to seek a mandate from wine businesses for a compulsory levy on relevant types of wine, to fund the industry-good activities, do they really want to start going down that path?

I remember when the Wine Bill was introduced to the House the Minister concerned gave assurances to members that it was something the industry wanted. We took him at his word. When some of my colleagues and I went and spoke to the winemakers, some of them said they were not even aware of the bill, as opposed to the undertakings that the Minister had given us that everybody wanted it.

I look at clause 148, and then understand why we want to be more specific in some of our labelling, but, as I have said, my concern is how it will be policed and how it will be monitored. I see an industry that is at present very easy to operate becoming bogged down in bureaucracy, and I fear unnecessary compliance costs. It may open a Pandora’s box. The cost of compliance and regulation in this country is an issue that causes me and my National colleagues grave concern.

I wonder whether the Minister in the chair, Damien O’Connor, would care to take a call and explain to us how he might divine a path through this legislation that gives the winemakers what they want in terms of some access to the EU market without creating a compliance nightmare. This is something that could create more problems than it solves for this industry. If we are to compete on an international basis, we should use our natural advantage—and that is that we are good at producing things without introducing a whole level of bureaucracy and unnecessary costs.

So I wonder whether the Minister could capture that point when he gets to his feet—because I am sure he will; he is a very direct sort of guy—and say “This is how we intend to handle it.” People will be listening out there today, in the wine industry, who will be desperately concerned to see how this issue may be handled. I just leave the Committee with that thought—it is something we will sell ourselves short on if we do not pick it up, because we do have natural advantages and we do not want to give those away.

Clause 148 agreed to.

Bill reported without amendment.

Bills

Government Communications Security Bureau Bill

In Committee

Clause 1 Title

KEITH LOCKE (Green): In speaking to the title I point out that the word “Government” is appropriate, because this organisation is a Government institution, and this bill rectifies an error, a very bad practice in Government operations and accountability to this Parliament, because for 25 years this organisation has existed without a statutory foundation. So it is good that this matter is being rectified, but we have to look at the rest of the title—for instance, the words “Communications Security”—to see whether this organisation is justified; whether we really need it. The bill does provide one purpose that is quite positive, and that is acting as an agency to make sure Government communications are secure. However, in my opinion that could best be carried out by a subdivision of the New Zealand Police. The main functions of the Government Communications Security Bureau are purposes—and these are the most expensive ones—that we should not identify with. When we talk about communications security, the main facility of the Government Communications Security Bureau is the Waihopai satellite communications interception station near Blenheim. That has two dishes directed towards two satellites over the equator in the Pacific, which draws down all of the telephones, faxes, and emails that go through those two communications satellites. There is a network of such satellites around the equator. We are concerned through Waihopai with just these two over the Pacific. All those communications are drawn down into those two dishes, and run through a huge bank of computers in Waihopai and in Wellington.

The CHAIRPERSON (Hon Clem Simich): Would the member please return to the title at this stage?

KEITH LOCKE: Yes, I am just explaining that the term “Communications Security” does not really apply. This information is then primarily conveyed overseas, first and foremost to a foreign organisation, the United States National Security Agency. It is not really communication security, because communications of only five nations remain secure in this system—that is, the five Anglo nations: New Zealand, Australia, Great Britain, the United States, and Canada. All the other countries in the world are being spied upon through this system by what is called the Echelon system.

We see a problem of communications security for other countries. We saw a memo from a section head of the United States National Security Agency recently. A chap called Frank Coza talked about their agency, the National Security Agency, “mounting a search”—those were his words—on the members of the Security Council to try to get their votes. The Waihopai station, which is part of this system, is not protecting communications, as the title would imply; it is not protecting the security of communications for those Security Council members.

In fact, this agency may be used for purposes that we do not agree with. In question time today I raised the question of whether the communications security element of this agency is actually being turned on its head and being used against this country—because we do not support the war in Iraq. It is clear from US congressional documents that Waihopai has been used in what is called Operation Enduring Freedom in Afghanistan. If it can be used there by communications through Waihopai going off to the National Security Agency, then what is to stop them using it similarly in terms of getting electronic intelligence for their activities in Iraq? The question of sovereignty is very much relevant to that.

RICHARD WORTH (NZ National—Epsom): It is a privilege to speak on this bill in the Committee stage, and to follow the previous speaker, who decided that he would not confine himself to what is a very narrow debate on the title. He instead offered his wide-ranging perspectives on issues of Government security. In the short time that I have available in this debate I intend to focus on exactly the title. It seems to me that in any discussion about a title, one must be satisfied on two points. The first point is that the title is legally accurate, and the second point is that the title factually captures the content of the bill. I do not have an alternative title to suggest to the Committee. However, it is fair to say that some criticism could be directed at this title. If one looks at the contents of the bill, it can be seen that there are really two fundamental thrusts to it. There are, of course, four parts, but if one looks at the content of the legislation, one sees that essentially it is concerned with the organisation, the objectives, and the functions of the bureau, and that it sets up in that context a department of State. So it could be argued that the bill could be called the “Government Communications Security Bureau Establishment Bill”—that being a core part of this legislation. But that, of course, is only a part of it. That is really what Part 2 is concerned about.

Part 3 contains provisions that I guess the previous speaker would describe as draconian. Certainly, he would find them in his world ideologically offensive. Part 3 is concerned with the interception of communications and provides for warrants and computer access authorisation. There might be a case for the bill being called the “Government Communications Security Bureau Interception of Communications Bill”.

For those students who look at these issues and seek to access material on a quick and ready basis, such a title would certainly provide a key for that approach to the legislation. If one looks at the first test I suggested, which is concerned with the lawfulness of the title—the extent to which it is legally accurate—one cannot really quibble with this title. However, in a factual setting as to whether the title is all-encompassing, some criticism can be levelled. I hope the Minister will take a call and perhaps suggest what for him would be a more harmonious alternative. My sense of it is that he has not considered this issue, at all. He has not even considered it. That is a pity when time has been set aside by Parliament for a focus to be offered on this particular issue—that is, the title of the bill. That is all I wish to say in these opening comments on what will clearly be an extended Committee stage.

ROD DONALD (Co-Leader—Green): As my colleague Keith Locke said, the only good thing about this bill is that it confirms the existence of the Government Communications Security Bureau, but that is where its virtue ends. The first problem with this bill is that this has been the first opportunity for the New Zealand Parliament to debate it clause by clause. This is an extraordinary bill, because unlike most other legislation that comes before this Parliament, it was not referred to a parliamentary select committee. In fact, it would have been impossible for this bill to be referred to a parliamentary select committee, because of the existence of the Intelligence and Security Committee Act and the Intelligence and Security Committee. That is a creature of statute. In our view that should be abolished because the existence of that committee stopped this bill—

The CHAIRPERSON (Hon Clem Simich): We are discussing the title.

ROD DONALD: That is what I thought I was talking about—that is, the Government Communications Security Bureau Bill—that stopped this bill going to a parliamentary select committee. In fact, this bill should have a title along the lines of the “Government Communications Security Bureau (Mandated by the Statutory Select Committee and not by a Parliamentary Select Committee) Bill”. It has not had the scrutiny it deserves. I look forward to a decent debate on this bill. I hope the chairperson will allow a wide-ranging debate, given that this bill has not had the parliamentary scrutiny that legislation of this significance deserves. So I call upon his good offices to do that, because it is of real concern that a bill with this title should be dealt with by the Parliament without thorough scrutiny, particularly at this time of international crisis. There are very serious questions revolving round the mandate this bill gives to the Government, and I am worried that it allows the Government to proceed without being fulsome in its explanation of what the bill involves. Again, perhaps the title should more appropriately be along the lines of the “Government Communications Security Bureau (Secret Spying on Pacific Island Neighbours and Trading Partners) Bill”. That is one of the issues we should be able to address in considering this legislation, because we do not know the extent to which that sort of activity is taking place.

We were told in the briefing that the bureau is a member of a long-standing, collaborative, international partnership for the exchange of foreign intelligence, and the sharing of information systems security technology, but we do not know the extent to which our friends and neighbours are being spied upon. The advantage of the bill, as described by the Government Communications Security Bureau, is that it is a further step towards greater openness on the part of the Government in relation to intelligence and security matters. The bill’s title does not meet our expectations in that regard, and it should therefore be entitled the “Government Communications Security Bureau (Extension of the Surveillance State) Bill”, because that is exactly what it does. Another suitable title would be the “Government Communications Security Bureau (Insult to the Privacy of New Zealand Citizens) Bill”, because, again, we have no confidence that this legislation will give New Zealanders the security they deserve, or that it will not undermine their privacy as a result of legalising what are, in our view, the illegal activities carried out at the Waihopai spy base and the Tangimoana surveillance station. We look forward to a decent debate on this bill, given the fact that it is among the most unusual legislation to come before this Parliament, and that it has not been referred to a select committee, where parties like the Greens and ACT—was Mr Prebble on the Intelligence and Security Committee?

Hon Richard Prebble: I was on it when this bill was going through.

ROD DONALD: Is the member not on the committee any more?

Hon Richard Prebble: No. Winston Peters wanted to have a go.

ROD DONALD: The Government has consistently denied the Greens representation on the committee.

Hon RICHARD PREBBLE (Leader—ACT NZ): I rise to speak in favour of the proposal, and of the title of the bill. It is a sensible measure to put these proposals into legislation, partly because it makes it harder for those paranoid members of the community to continue in their fantasies. I object very strongly to suggestions that this bill has not had parliamentary scrutiny. The Intelligence and Security Committee is a parliamentary committee.

Rod Donald: It is not a parliamentary select committee.

Hon RICHARD PREBBLE: It may not be an ordinary select committee, but every single member of that committee is a member by statute, and the committee was voted for by the Parliament. I assure the Committee that we did meet all the people whom we said we met—it is mentioned on the front page of the bill that we had 16 submissions, and that we heard them in public. I can remember doing that. It is not very easy to get the Prime Minister, the Leader of the Opposition, the Minister of Finance, the then Deputy Prime Minister, Mr Anderton, and myself together for a meeting, but we did manage to do that.

Richard Worth: Not a happy company.

Hon RICHARD PREBBLE: We were a happy company on this particular matter. That is why this bill is appropriately named, because everyone except the Greens accepts that it is a function of the State to provide security to its citizens. I say to Mr Donald that, in an age of international terrorism, we need to know what those who think evil thoughts about this country and our security systems and trade are doing. One way of doing that is to electronically monitor them. If that comes as a source of shock and horror to the member, I tell him that it does occur, and that it is a function of the State. As a Parliament, we want to be sure that those powers are being exercised in a lawful way, and in a way that will protect New Zealand. The member has said that this bill is incorrectly named, to which I reply that it is most certainly correctly named.

In looking at clause 7, “Objective of Bureau”, I see that the security or defence of New Zealand is the No. 1 task. That is something every MP ought to be willing to support. The protection and advancement of the international relations of the Government of New Zealand is another objective, as is the protection of New Zealand’s international well-being or economic well-being. Clause 7(1)(ab) was added by members of the committee, and states that the Government is required to provide “foreign intelligence to meet international obligations and commitments of the Government of New Zealand; and (b) advice, assistance, and protection to departments of State and other instruments of the Executive Government of New Zealand in order to—(i) protect and enhance the security of their communications, information systems, and computer systems; or (ii) protect their environments from electronic or other forms of technical surveillance by foreign organisations or foreign persons.”

I tell Mr Donald that one of the things this bill does is to stop foreign Governments from being able to tap into communications information that we have here. I make no apology for saying that the ACT party is in favour of this bill—and that includes ACT’s Solomon Islands representative. I do not know why we should make an exemption for the Solomon Islands, because if the Solomon Islands Government is able to tap into what is happening with New Zealand’s communications information, I will be very surprised. It would also come as something of a surprise to the Solomon Islands. However, we certainly have a great interest in the Pacific, and in the Solomon Islands. I suspect that this bureau will do the opposite of what the member expects, because it is far more likely that we will find information that may be of great interest and importance to the Solomon Islands Government.

That is one of the core functions of the State. It is the Government’s function to provide security, and it is for that reason that the ACT party is in favour of this bill. Right now, when we know there is international terrorism, and when threats are being made even in this country, I would have thought that even the Green Party would be very pleased that we have a Government Communications Security Bureau. I would have thought the Greens would be in favour of there being a general agreement in this House that this should be legislated. We ought to be prepared to tell the public about it. Am I pleased about, and proud of, this organisation and the staff who work for it? Yes, I am. I think the staff are patriotic New Zealanders, who are carrying out a very important job. I am pleased to support the bill.

SIMON POWER (NZ National—Rangitikei): I will make a quick contribution to this debate on the title of the bill. Since I came to the Committee at the start of the debate, I have been listening to the opposing views as to the process this bill has gone through. I have listened carefully to the Greens’ views about the bill not having gone to a select committee. Mr Prebble then put the view that a parliamentary committee, set up by statute, has enabled parliamentary scrutiny to occur on this bill.

If we go back to first principles, we should ask whether the title of the bill reflects its background and key features, which are set out on the commentary. It states that the key features of the bill include: “The establishment of the Government Communications Security Bureau as a department of State”. We heard my colleague Richard Worth moot that the title might be made more descriptive in nature by an amendment reflecting that that department of State is to be established. We will have to wait until the part-by-part voting to see whether Mr Worth puts forward an amendment to that effect.

Another key feature of this bill is to make sure that the title accurately reflects the objectives and functions of the Government Communications Security Bureau. I am not exactly sure how a title could do that in itself, but, interestingly, the next key feature is the regulation of the bureau’s functions with respect to the interception of communications. I jotted down some of Rod Donald’s alternative bill titles. He argued that it should be amended to read the “Mandated by Statutory Select Committee, Not Parliamentary Select Committee, Bill”.

Rod Donald: Did I?

SIMON POWER: I think the member may have suggested that. The point is that the bill has been subject to the scrutiny of a parliamentary committee—and that is an important point to make. Mr Donald also offered the “Secret Spying on Pacific Island and Trading Partners Bill”—or words to that effect—as an alternative title.

Mr Prebble has quite rightly made the point that it cuts both ways with legislation like this; that, yes, some interference in privacy issues relating to domestic communications does occur—I will come back to that—but, more important, there is some regulation around the ability of sovereign foreign bodies to draw information out of the domestic communications market, as it were. I worry that Mr Donald views another proposed amendment to the title to be the “Extension of Surveillance Bill”, or the “Insult to the Privacy of New Zealand Citizens Bill”.

Interestingly, that does raise an interesting point. In effect, the bill tries to draw out the argument that, in this instance, issues relating to the public good, and in particular those matters that Mr Prebble raised—essentially the security of the New Zealand people—actually outweigh the rights of those individuals in our society to privacy in certain matters. There is no doubt that the New Zealand Bill of Rights Act confers privacy on individuals and their communications, and that is a view that should be respected across the board in New Zealand society. But every now and again, issues of greater good that are bigger than any privacy issues surrounding any one individual will occur, and this is one of those issues. That is why the Government Communications Security Bureau Bill is essential, why its title reflects the establishment of the bureau as a department of State, and why, in this case, that balance tips firmly in the favour of the public good and, in fact, of the security interests of New Zealanders, given these uncertain times that we live in. While we are dealing with the title, I also think it is worth drawing the Committee’s attention to the commentary on the bill.

Clause 1 agreed to.

Part 1 Preliminary provisions

RICHARD WORTH (NZ National—Epsom): I would like to start by talking briefly about the commencement provision, as there was an alteration to it as the bill went through the Intelligence and Security Committee. The plan now is that the Act, other than section 32, comes into force on the day after the date on which the bill receives the royal assent. The drafters considered three possibilities when they looked at the commencement date. The first possibility was a date nominated by Order in Council. That was not chosen. The second possibility was a fixed date—some date in futurity, which could have been the commencement date. The third possibility, which has been seized on by the draftsman, relates to the date on which the bill receives the royal assent. On that date we are to see a very significant change, in the context of structural issues relating to a core element in the security services.

The Government Communications Security Bureau has been with us for a number of years, and the contribution that the bureau and the Security Intelligence Service make to this nation is absolutely undoubted. Since 1977 the bureau has provided the New Zealand Government with intelligence information from foreign signals derived from the interception of the communications of foreign Governments and other foreign entities. It strikes me as somewhat ironic that in these days of sophisticated electronic transmission of data, and electronic transmission of documents, the safest way for materials to be handled is probably by personal courier. That is why all around the world, personal couriers carrying top-secret materials are travelling long distances in aircraft, rather than those materials being entrusted to the electronic networks that exist throughout the world.

The bureau was set up without specific statutory authority. As I understand it, the director’s authority as chief executive of the bureau derives, but for this legislation, from an instruction that was issued by the Prime Minister. It was also the case that the bureau’s signals intelligence function and its role of ensuring the security of New Zealand Government communications and information systems were not formally defined. That adds substance to the point Mr Prebble offered—that for those who are deeply suspicious of Government activity, often in a quite irrational way, there is security in knowing that these activities are now to be statute-based and subject to a degree of statutory oversight that would not otherwise have been the case.

So before 1996, Parliament’s oversight of security intelligence—and I am speaking now of the three core elements in our security intelligence system: the External Assessments Bureau, the Security Intelligence Service, and the Government Communications Security Bureau—was basically left to the Prime Minister. Sure, there was some faint involvement by the Government Administration Committee, but it did not have any real control or power over the security intelligence agencies. So we had the situation that, by convention, secret briefings were given to the Prime Minister and the Leader of the Opposition, and together the Prime Minister and the Leader of the Opposition would certify each year that the agencies had met accountability rules and complied with the law. National introduced some key changes in 1996 after extensive public consultation. So it was that the Intelligence and Security Committee Act set up the Intelligence and Security Committee—a statutory committee with specific functions.

KEITH LOCKE (Green): I am moving an amendment under this part so that we are not intercepting the communications of foreign diplomatic missions, because they get very upset if that is the case. The Green Party wrote to the missions, and one of them, the South African consulate, did reply, saying that it would take a very grim view of anyone violating its privacy by hacking into its computers. So I think we should support this amendment. Also, the definition of a foreign organisation is so broad that it could include all kinds of organisations, such as Greenpeace, voluntary organisations, and subsidiaries of overseas corporations. With the takeover of a lot our economy by Australian, British, and American firms, or whatever, a lot of our economic organisations would be foreign under this definition. New Zealanders working for them or representing them would be subject to spying, as would New Zealanders communicating with them. Also, it is, as my colleague Rod Donald said, an intrusion on the privacy of New Zealanders.

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

Hon TONY RYALL (NZ National—Bay of Plenty): I am very pleased to take a call in the debate on Part 1 of the Government Communications Security Bureau Bill, a bill that the National Party in Opposition is supporting. I think this might also be an opportune time to reflect on my experience, as a member, of my first dealings with the Government Communications Security Bureau.

Hon Richard Prebble: You don’t look like a subversive. What happened?

Hon TONY RYALL: It was in those heady days of the early 1990s, when I was a member of the Government Administration Committee—which Mr Prebble, as he will recall, later joined.

A series of security and intelligence-related organisations, appeared before that select committee, which was made up of a number of new members: Christine Fletcher, myself, and a few other people. Some of those groups that came before the committee had a most intriguing presence. What was interesting was that they could appear before us, we could ask them questions, but they would never tell us anything—very much like Government departments under this Labour Government. I recall, for example, that a Mr Parker from the Government Communications Security Bureau came before us. But from the Security Intelligence Service, a person incredulously named Mr McIvor appeared before us. Later on, another officer of the Security Intelligence Service appeared before us—a Mr Smith—and we had our doubts about these individuals. But the point I raise is, I think, quite valid because it reflects how the whole of Parliament has developed its scrutiny function of all these security and intelligence-related organisations.

In the early 1990s, those bodies would come before the Government Administration Committee. There would be minimal financial data; it was a very simple input-output mode.

Richard Worth: I raise a point of order, Mr Chairperson. Where is the Minister?

The CHAIRPERSON (H V Ross Robertson): The Minister is here. She has apologised. I call the Hon Tony Ryall.

Richard Worth: I really think that the Hon Tony Ryall should start again because the proceedings to this point have been wholly irregular. It is just our good fortune that a Minister with significant knowledge of this bill has now joined us. What a tragedy it would be if someone who did not have that knowledge had joined us.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for drawing that to my attention. The situation, as I understand it, is that as long as there is a quorum in the Chamber and a Minister is in the Chamber, that is fine. The Minister has now taken her seat, and there the matter ends.

Hon TONY RYALL: Parliament has taken greater powers to itself, in the ability to scrutinise those organisations. In the early 1990s there was minimal scrutiny of either their operation or their spending of public moneys. I can recall one situation where I think the Chairperson at the time, Christine Fletcher, sought to get an indication from one of the intelligence agencies as to some of its activities, to which the presenting officer merely smiled and gave those inimitable words: “You might very well think that, but I couldn’t possibly comment.”, or whatever the phrase of the television programme of the day was.

We have subsequently seen, over the years, Parliament form a special committee of its elders, chaired by the Prime Minister, which has provided much greater scrutiny than a parliamentary forum. Similarly, we have seen more information provided under the normal processes of financial review and the estimates process of these agencies. This bill is a further step in that, in providing departmental status for the Government Communications Security Bureau, and allowing Parliament to undertake its functions to assure the people of New Zealand that the various fundings provided to this agency are well spent.

What is most interesting to read in the commentary of the select committee is that it is quite clear that any bill of an intelligence nature attracts quite interesting submissioners—people who have quite a bent on conspiracy theories and seem to think that all the Government Communications Security Bureau ever does is listen in on New Zealanders’ telephone calls, which is, of course, expressly prohibited. The bureau is not allowed to listen in on New Zealanders. I think that what is important is that this bill proceed and that we have greater scrutiny of this agency. As members of Parliament, we rely on the Intelligence and Security Committee to examine these agencies to ensure that they are complying both legislatively and financially.

Hon PETER DUNNE (Leader—United Future): I will take a brief call on Part 1. As the member who preceded me said, this bill, which I think has significant support in the Chamber—certainly, it has support from United Future—changes the status of the Government Communications Security Bureau. It formalises it into a Government department for the purposes of enhancing its accountability.

I often think that when members of this House and members of the public become interested in matters of security and seek greater accountability for the security agencies, and that is subsequently achieved either through reports to the Intelligence and Security Committee or other discussions that take place, what becomes clear is how little we have to be secret about. We do not have an agency here of the capacity of the CIA or some of the great intelligence agencies of the world—that is not the size and scale of operation in New Zealand—but it is, none the less, a significant agency, and it is important to see its operations, its objectives, and its functions coded in a particular statute.

But I make the point that there will be those—I suspect it may be those whom the member who preceded me was referring to when he talked about the nature of the submissions that legislation of this type attracts—who will not be satisfied even with a legislative framework for the Government Communications Security Bureau, who will still feel that something sinister is going on, and who will still believe that various secrets are being purveyed to other nations at the expense of New Zealanders, and that, somehow, we have a right to know. I say to those people that they will never be satisfied by whatever legislative environment is put in place.

I guess that there is a sense of concern amongst a number of people about what is being collected about people, and about why people are being spied upon, or snooped upon, or whatever language one might want to use. There is a natural reaction in such circumstance to say: “We are a small country with very few secrets, therefore we do not need the services of an intelligence agency.” I would have thought that international events at this time and the climate that we have been living in over the last 2 or 3 years would indicate that one of the great protections we have in a free society is the fact that information that is relevant to the protection of freedom is gathered and passed on to the relevant authorities.

I am fascinated, as at the moment I happen to be reading Bob Woodward’s book about the Bush White House’s reaction to September 11 and the tragedy that befell the United States at that point. What becomes clear throughout that is the value of intelligence in determining a nation’s response. Members may well say that that is utterly irrelevant to the New Zealand context. It may well be, in terms of its scale, but the point remains the same. We do need to have information gathered about potentially damaging and subversive activities, we do need to have an ability to have that recorded in a way that is proper, and we need to have it dealt with accordingly by the relevant agencies.

I think there would be legitimate public outcry if our intelligence agencies were utterly unaccountable, were not treated the way that this bill seeks to treat the Government Communications Security Bureau, and were basically allowed to run their own show. But that should not lead people to assume that because we are going to have a more rigid and accountable regime, all the information that is gathered somehow now comes into the public domain. The very nature of intelligence services means that will never be the case, and there will need to be some protection, some security, and some secrecy. That is ultimately the protection for all of us. So this bill is a positive step forward. It will enhance accountability.

The member who preceded me spoke of an exchange that took place at the Government Administration Committee some time in the early 1990s and the mystery that seemed to be attached to that. My only direct dealing with the intelligence services was as a Minister of the Crown involved in a citizenship case. I was contacted by the Security Intelligence Service and asked to hold my decision relating to Mr X because further inquiries were still proceeding. Some months later, I was advised by the director that I could now make my decision because those inquiries had been completed. When I asked him the nature of the inquiries he told me that it was not my business but I was free to proceed, which I thought was a rather bizarre state of affairs, given that I had to decide on this particular person’s eligibility for New Zealand citizenship knowing that he had been investigated by the Security Intelligence Service, and that the service had found it unnecessary to proceed any further. I was none the less completely in the dark as to what the event was about.

Those stories may often occur, but the point I am making through that illustration is that the climate we are now moving into, where there is potentially greater accountability, will, I think, enhance the understanding of members of this House of the way in which our intelligence services operate, albeit that it may not satisfy them. It will also put the intelligence services on more notice about their accountability.

ROD DONALD (Co-Leader—Green): This part is significant. It contains the commencement, purpose, and interpretation clauses, and of course the standard clause “This Act binds the Crown”. I want to dwell on the commencement for a minute. Commencement is, of course, all about the timing of this legislation, and it is worth reminding the Committee that this bill was introduced under urgency on 8 May 2001. The Government was in a big hurry at that time and required a report back by 7 November 2001. The bill has, of course, languished on the Order Paper ever since. Now, more than 16 months later, we are finally holding the Committee stage of the debate.

I refer to the purpose of the bill. It is all about legitimising a Cabinet minute, because up until now the Government Communications Security Bureau has existed only because of a Cabinet minute. In fact, until a few years ago the Government was very keen to deny that such an organisation even existed. The purpose clause fails to acknowledge that the organisation was established under the five-nation agreement, a highly secret document that makes the Government Communications Security Bureau an outpost for American signals intelligence, along with Britain, Canada, and Australia. So it is remiss of the Government not to make clear in this purpose clause that the purpose of this legislation is to give some legislative backing to an organisation that is part of an international agreement that neither this House nor any of the other Houses involved have ever seen.

I move to the interpretation clause. We have a number of concerns here. One particular concern was highlighted by my colleague Keith Locke just before the dinner break and I would like to reinforce the point he made, because he has put up a very serious amendment. He is seeking to ensure that the Government Communications Security Bureau does not spy on the New Zealand diplomatic missions of other Governments. Right at this time that is a particularly apposite request, given the revelations that Waihopai has been used to spy on UN diplomatic missions in the lead-up to the non-decision by the Security Council to endorse an invasion of Iraq.

New Zealand needs to know absolutely clearly that the Government Communications Security Bureau does not have authorisation to spy on those other missions, not only for reasons of good international relations, but also because at the moment this Government Communications Security Bill is, in our view, contrary to the Vienna Convention on Consular Relations and Options Protocol of 1963, of which New Zealand is a member. That convention states clearly that the official correspondence of a consular post shall be inviolable. In our view, “correspondence” clearly means all communications, and this bill covers those communications.

We would seek a very straightforward and modest amendment, which we would like other parties to consider. It is simply to add to the definition of “foreign organisation” the words “but not the New Zealand diplomatic mission of any country”. Whether or not members support our stand on other issues, I hope they see the good sense in supporting that particular amendment.

I move to some of the other features of foreign organisations. One has to bear in mind that the definition includes any overseas company or subsidiary of an overseas company, and it also means any individual who is neither a New Zealand citizen nor a permanent resident. So when we are talking about individuals, we are talking about roughly 50,000 Australians who are living in New Zealand and the 60,000 overseas visitors who are here at any one time. They can be spied on by the Government Communications Security Bureau quite legitimately if this legislation passes, and that is of real concern to us.

I think about some of the company examples. When this bill was first introduced we raised the issue of the Singapore-owned Dominion Breweries’ intentions of closing down the Monteith’s brewery on the West Coast. We did not think that fitted the bill’s requirement to look after our economic well-being. Perhaps a more current example of what this legislation enables—and perhaps in this case we would support it—is that our economic well-being has been undermined by Frank Russell Co. That is the organisation that advised the Government Superannuation Fund to invest on the international sharemarket, leading to losses of over $324 million in the last 14 months.

Hon RICHARD PREBBLE (Leader—ACT NZ): I rise specifically to refute the remarks we have just heard from Mr Rod Donald, the co-leader of the Greens.

Rod Donald: The Government should do that.

Hon RICHARD PREBBLE: No, no. This is Parliament, and I think it is perhaps more powerful when someone who is not a member of the Government is prepared to point out that the member is talking rubbish. In fact, I thought I was going to be replying to Mr Locke, who, prior to the tea break, made a very similar speech and spoke for 70 seconds in support of his amendment, but has chosen not to speak after the tea break. But I do not want to be too critical of Mr Locke. It is clear to me that he is probably on his way to Baghdad to be a human shield, and I am a bit surprised that Mr Donald, who was also telling us he was going to be a human shield, apparently has not got around to going.

Richard Worth: He hasn’t made the bookings yet.

Hon RICHARD PREBBLE: Yes. Well, I think it goes somewhere towards showing the strength of their convictions, even though—

Ian Ewen-Street: They can’t afford it.

Hon RICHARD PREBBLE: No, no. There is no question of a lack of money. Mr Locke told me, and he was somewhat bemused, that many people, whom one would not normally associate with the Greens, had offered to help pay his fare—but not a return fare.

However, let me make this point. The Greens would have us say that the Government Communications Security Bureau should not ever, in any way, eavesdrop on diplomatic missions. One has to ask what planet they live on. Are they not aware that, for example, even Jordan, normally known as a friend of Iraq, has just expelled, yesterday, a number of Iraqi diplomats? How did it know to do that? It said they had been engaged in activities they should not have been engaged in. The idea that no diplomatic mission in New Zealand has ever engaged in spying—I thought Mr Donald would have done a little bit of homework! We know there have been cases of diplomats who have been expelled from New Zealand because they were engaged in subversion against this country. I saw that the Iraqi diplomat in Sydney wanted to come to this country. Would the Greens have said “Welcome to New Zealand, and under our bill you can engage in any subversion you like and we will never, never listen.”? That is nonsense.

Mr Donald also does not realise that the convention he is referring to is the reason that consular and diplomatic missions are able to carry messages through couriers, as they do. That does not mean we cannot listen in to their telephone conversations when they are engaged in spying. The fact that Mr Donald and Mr Locke are prepared to believe that no diplomat would ever do that, says something about those members. Of course, I do not think that Mr Locke and Mr Donald actually believe that. I say to them that they have a duty to this Parliament and to the country to put security interests ahead of the petty partisan policies they are quite prepared to put forward. I do not think Mr Donald for one minute believes there has never been any spying by any diplomat. He is very careful not to make a response to me now.

Rod Donald: Of course there has been spying.

Hon RICHARD PREBBLE: Oh, now he says there has been. But he wants us to have an amendment to say: “Come to New Zealand. We are complete mugs; you can spy on us.” I say to the Greens and to the Government, which relies on the Greens, that they are not fit to be in Government if they are not prepared to put our country’s security first, and that is why we are in the unusual situation that National, the ACT party, and, I think, a few United Future members are promoting this measure of security. The Government is sitting back and letting us do it, and the Greens are promoting a motion that I would say is not in the security interests of this country. I think it is high time they put their bodies where their principles are, and that having gone around the country and earned huge cheers from various audiences by saying they were prepared to be human shields, it is about time they were. Or have they not watched television? I tell Mr Donald that if he does not hurry up, he will miss the opportunity.

ROD DONALD (Co-Leader—Green): I will not take my full time, but I was part way through a discussion on the definitions when I lost the call. The point I was making was that the definition of “foreign organisation”, when linked with the objective of the bureau—which we will come on to in the next part—enables the Government Communications Security Bureau effectively to spy on any foreign company operating in New Zealand. Although I sometimes doubt the benefit of some of those foreign companies to our country, I think, when one links the definition of “foreign organisation” with the objectives statement, it really does raise a question about whether it is acceptable for a State agency to be spying on foreign businesses operating in this country. I do not think it puts us in a very good light.

It reminds me of issues that were raised several years ago about the Government Communications Security Bureau, and in particular its parent, the National Security Agency in the United States, when suggestions were made that in some countries the Americans used their eavesdropping capability to give advantages to American companies. In Indonesia, for example, the Americans used eavesdropping to give an American company an advantage over a Japanese company tendering for Indonesian Government business in the telecommunications sector. That is the sort of thing that we really ought to be safeguarding against in this legislation, and the Government does not do that.

When one turns to the next page in the bill, one can see that “foreign organisation” also includes any international organisation. One that immediately springs to mind is the Greenpeace organisation. I think there is an extraordinary irony in this bill that it legitimises the Government Communications Security Bureau’s spying on Greenpeace, which is the very organisation that has been the—

Hon Richard Prebble: It puts out false propaganda. It frequently breaks the law.

ROD DONALD: That is the sort of thing that some Governments do. In fact, Greenpeace suffered at the hands of French terrorists when the Rainbow Warrior was bombed, and there were very real questions about the role of New Zealand security agencies at that time.

Hon Richard Prebble: Name one.

ROD DONALD: Well, despite the existence of the Government Communications Security Bureau and the Tangimoana signals intelligence station, somehow security agencies did not seem to know that the Ouvea was coming to New Zealand and what it was going to be getting up to. And the Security Intelligence Service did not seem to do a very good job tracking the terrorists when they were in this country. So I think it is extraordinary that this legislation will enable the Government Communications Security Bureau to spy on the likes of Greenpeace, when Greenpeace is the one organisation that has suffered at the hands of a terrorist Government, which sank the Rainbow Warrior in Auckland Harbour.

I believe that the Intelligence and Security Committee has not done a good job. It is a statutory committee, not a select committee, and those members who doubt my word should have a look at what David McGee has written on that particular subject. There is a very real distinction between a statutory committee—fortunately it is Parliament’s only one—and a select committee. If this bill had gone to a select committee, and if all parties had been on that select committee, I believe that some important changes would have been made to those definitions to tighten them up.

I seek the Committee’s support for our amendment to clause 4, which is to add the words “but not the New Zealand diplomatic mission of any country”, because in our view that phrase gives effect to the Vienna convention of which New Zealand is a signatory, and keeps good relations between our country and those missions based here. It avoids the problem the current definition has, which is the one that has clearly upset the South African consul for example, who said that he would take much more than just a very grim view of anybody violating their privacy by hacking into their computers, tapping into their telephones, and bugging their homes and offices.

Richard Worth: Which consul? Was that Mr Fortuin?

ROD DONALD: Indeed, it was Mr Fortuin—a former employee of this Government, I hasten to add. Mr Fortuin was expressing very real concern about the role that the Government Communications Security Bureau would have as a result of this legislation.

RON MARK (NZ First): New Zealand First will be supporting the passage of this bill but without the amendments I have heard of late, for they do not make sense to us. I must also put on the record my expressions of concern that the Government does not seem to want to contribute in any way, shape, or form to this debate. That tends to indicate to me that this Government, true to form, does not want to talk about some of the very conservative and conventional things it is required to do as a Government, because at the very core and heart of its Labour being it does not like them.

When Labour members get into debates on the hustings in future, I will hear all their rhetoric again about protecting human rights, privacy, and all of that. They will be big on the jaw out on the hustings, but not on this issue we are debating tonight—in fact, they have not debated it. They know it is a reality of life that such bills need to go through the House and become law, but they do not want to have to admit they did it. If that were not so, they would be on their feet seeking a call in this debate and making a contribution, so that their words were on the record. However, it will be on the record that they have been silent. My interpretation is that their heart lies very much in what they are hearing from the Greens; they just do not have the bottle to stand up and say so.

I draw attention to a particular part of the bill—[Interruption] If Jill Pettis has something to say she should take a call. She should not parrot over there like the old fishmonger’s wife. She should stand up and take a call.

Jill Pettis: Get the bill passed. You won’t get on the front page of the New Zealand Herald with this speech.

RON MARK: I raise a point of order, Mr Chairperson. You know what I am going to comment on. I really do think that in terms of the Standing Orders, if the junior whip for the Government wishes to interject rarely and reasonably, and with a little bit of humour, that is one thing, but if she wants to keep up a running commentary during my speech she should do the proper thing—that is, take a call and make a 5-minute speech.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for that, but it was not a running commentary. It was getting close, but it was not quite there.

RON MARK: I also signal to the Government that I find it a little strange that we are approving the functions of the bureau in clause 8, and I will touch on gathering foreign intelligence, intercepting communications, and all of that—

The CHAIRPERSON (H V Ross Robertson): We are doing Part 1, clauses 2 to 5.

RON MARK: I am sorry, but I will get to that. I signal now that there are areas of the bill, such as Part 1, where I have failed to find any determination by the Government to deal with acts of organised foreign crime that are now being seen in our streets in terms of the distribution of methamphetamine. Those are international issues of security for our nation. I have yet to hear any Government member say how he or she intends using the Government Communications Security Bureau Bill to shore up some of our weak laws and weak policing in respect of international crime and foreign interventions into our society, because that is proving to be detrimental to the health and well-being of our nation today, and, indeed, is undermining law and order in our streets.

I argue—and I am waiting to hear from a Government member—that the issues of security, and the well-being of our young people and of our nation, are surely deserving of the attention of such an organisation. Therefore, I expect to hear some mention of those issues, and the authorisation given to the Government Communications Security Bureau to act on them in conjunction with New Zealand Police. There is plenty of time still, and maybe the Minister, or the very loud and vocal junior whip over there, might care to stand and enlighten us all as to how this bill will aid the police in protecting our interests from improper, undue, and illegal foreign interference in New Zealand.

The question was put that the amendment set out on Supplementary Order Paper 61 in the name of Keith Locke to clause 4 be agreed to.

Green Party 9.

Labour 52; New Zealand National 26; New Zealand First 13;ACT New Zealand 8; United Future 8.

The question was put that the amendment set out on Supplementary Order Paper 36 in the name of the Rt Hon Helen Clark to clause 4 be agreed to.

Amendment agreed to.

A party vote was called for on the question, That Part 1 as amended be agreed to.

Ayes 107

Noes 9

Part 1 as amended agreed to.

Labour 52; New Zealand National 26; New Zealand First 13;ACT New Zealand 8; United Future 8.

Green Party 9.

Part 2 Organisations, objectives, and functions of Bureau

SIMON POWER (NZ National—Rangitikei): We now arrive at Part 2 of this bill, and in particular the clauses that relate to the organisation, objectives, and functions of the bureau. They are the clauses that provide for the statutory establishment of the bureau as a department of State. In Rod Donald’s contribution during Part 1 he outlined his concerns over the definition of “economic well-being” and its inclusion as one of the bureau’s objectives in terms of gathering information. I was interested to note that clause 7(2) of this reasonably well-drafted legislation sets out that the objective of economic well-being is relevant only to the extent that that is affected by the actions or intentions of foreign organisations or foreign persons. In fact, this bill does not allow for wide-ranging powers to swarm and swoop over a whole lot of economic activity or company business, as it were.

This is probably one of the better pieces of drafting we have seen from this Government—we could have done with some of it in the occupational safety and health legislation. If we check carefully as we walk through the amendment that has been made by the Intelligence and Security Committee to clause 7, we see that the reference to foreign intelligence in clause 7(1)(a) reads: “The objective of the Bureau is to contribute to the national security of New Zealand by providing—(a) foreign intelligence that the Government of New Zealand requires to protect and advance ... (ii) the international relations of the Government”. I was not on that statutory committee, but there was obviously a bit of concern about how that objective would play out, and the committee saw fit to insert a new paragraph (ab), which states that the bureau will provide “foreign intelligence to meet international obligations and commitments of the Government of New Zealand;”, as opposed to simply providing foreign intelligence for the purposes of the international relations of the Government. So the statutory committee has seen fit to narrow that part of the objective to simply meet international obligations.

I wonder whether the Minister is able to take a call on that matter. I appreciate that she probably was not on the committee, but I am interested to know whether the international obligations refer just to those obligations that we see in an environment such as the United Nations or whether they extend to the bilateral relationships one would expect a Government to carry out on a day-to-day basis. For the sake of clarity, I wonder whether somebody from the Government, preferably the Minister, would be able to give us a bit of guidance on that. We are asking a reasonably important question here—does the Government see the provision of foreign intelligence as being limited only to the purposes of international obligations relating to such bodies as the UN, or does it have a more bilateral context in mind, in the sense of relationships that we have in an everyday environment with other countries around the world? I would be quite interested in any response that the Government is able to give me on that point.

Clause 8, “Functions of Bureau”, set outs how that foreign intelligence is to be gathered. That is really the guts of the bill, and I suspect we will be hearing from the Greens about it. It is quite a narrow clause, because it talks about the intercepting of communications under the authority of this Act, or by cooperating with public authorities, or by collecting information in any other lawful manner, and then limits that function to deciphering, decoding, and translating communications. In that sense, it is an uncontrolled or untapped authority. It is quite a specific and narrow authority. Interestingly, at clause 8(1)(d) the bureau has a function “to provide reports on foreign intelligence to the Minister and any person or office holder,”—and here is the amendment made by the statutory committee—“whether in New Zealand or abroad, authorised by the Minister:”. One would imagine that there is some significance attached to that new amendment, and perhaps if a member who was on the committee is present, he or she could help us to understand what, if any, significance that addition has, and how the committee sees that function of the bureau operating on a day-to-day basis.

ROD DONALD (Co-Leader—Green): To pick up on one of the last points that Simon Power made, it would be extremely helpful if there was a member of the committee in the Chamber who could give some clarification as to why the committee added the words “whether in New Zealand or abroad” to clause 8(1)(d). Our difficulty here is that most of us were not on the Intelligence and Security Committee. Indeed, unlike any normal select committee, if we had wanted to attend a meeting of that committee when it was considering this bill we would not have been allowed to, because it is not a select committee, it is a statutory committee. It would be good if a Government member, or even one of the Opposition members who is on the committee, could take a call on that.

Simon Power made another point that I would like to respond to. He is right to say that clause 7(2) limits international well-being and economic well-being as being relevant only to the extent that they are affected by the actions or intentions of foreign organisations or foreign persons. But that does not stop the Government Communications Security Bureau from spying on New Zealand citizens. We are told that the Government Communications Security Bureau will not spy on New Zealand citizens or permanent residents for the purpose of intercepting their communications, but, clearly, if the bureau is eavesdropping on communications between foreign individuals and organisations and New Zealanders, then it must be gathering information on those New Zealanders as part of that purpose. One cannot tell me that the Waihopai spy station turns on the tape when a foreign voice is talking, and then immediately turns it off when a New Zealand voice is talking. In fact, the Inspector-General has clarified in one of his numerous reports that the Waihopai spy station does collect information or intelligence on what New Zealanders are saying, insofar as it is needed to make sense of the foreign information it is collecting. So we know that it is collecting information about New Zealanders, even though clause 7 is meant to qualify the scope relating to the interception of communications involving foreign organisations and foreign persons.

We now come to what we see as the most ridiculous aspect of clause 7(2), and that is the inclusion of New Zealand’s international or economic well-being, which mirrors what was in the Security Intelligence Service legislation. As we see it, that clause is really part of the Government’s attempt to keep both those intelligence agencies relevant in the modern era. It was desperate to move beyond security or defence, because the cold war was over, and, of course, it can now thank George Bush for opening up a new front in terms of persecuting people of other religions. However, at the time that provision was added to the bill it was very difficult to see any justification for it. Indeed, we cannot see any justification for it now. It goes beyond the core purposes of the agency, which are about the security and defence of New Zealand. If there is to be an organisation doing that work—and we believe there should be such a unit within the police force—then its role is about security and defence, and terrorism and espionage. Its role is not about international or economic well-being. The bill we were debating before tea, which was the Industry New Zealand and Trade New Zealand Integration Bill, is about one organisation, among others, that should be looking after our economic well-being, and we have the Ministry of Foreign Affairs to look after our international well-being. We do not need a body called the Government Communications Security Bureau being able to trawl across our communications—whether they are made by phone, fax, or email—looking for anything that might be an issue in relation to our international or economic well-being.

The bureau has been given a brief that is far too wide, and justification for it that is far too broad, especially in the context of there not being any proper parliamentary scrutiny of what the agency does. I know there is an Intelligence and Security Committee, but it does not provide parliamentary scrutiny. We do not know the extent to which the Government Communications Security Bureau is using its Echelon dictionary systems supplied by the National Security Agency in the United States to spy on political parties from overseas that happen to have a relationship with parties in New Zealand or internationally.

Hon PETER DUNNE (Leader—United Future): I want to make some comments about clause 8, with particular reference to those of the member who has just sat down. He said that the functions set out for the bureau in clause 8 were too broad, and that New Zealand should have the agency as part of the police force—

Rod Donald: Clause 7.

Hon PETER DUNNE: OK, clauses 7 and 8. He said that the agency should be part of the police force designed to gather intelligence that was relevant to the interest of New Zealanders. I am paraphrasing a little bit, but that was the gist of what he said.

Rod Donald: Security in defence only.

Hon PETER DUNNE: Security in defence only. Then he talked a bit about terrorism and the international situation. The point he misses is that in today’s environment those old definitions of what were security and defence matters are far more blurred than ever before. The whole march of international terrorism shows us that we cannot put things into the neat little boxes that once used to be the case. Consequently, if a Government is looking at an effective way to measure the potential impact on its own country of the sorts of activities it regards as unacceptable, it needs to have more breadth and strength in the way it approaches it.

When we talk about the objective of the bureau being to provide intelligence on matters relating to security and defence, inevitably a Government has to look at things like international and economic well-being, because so much of the struggle today is about those matters. It is not simply a case of a full frontal attack on a country in a military sense. That certainly happens, and we have a graphic example of that at present. However, we also see economic warfare, and the application of other forms of warfare and pressure that are equally detrimental to a nation’s well-being. That is why a country needs to have objectives for its Government Communications Security Bureau that reflect the fact that the very nature of the international terrorist campaign, the international struggle—call it what one likes—and intelligence-gathering have changed. It is not simply a case of putting a little box around it and saying “This is a defence or security issue.” It has a much wider set of implications.

From examples that have been quoted from time to time, we know about the use of economic and industrial sabotage to strike at the heart of a nation’s well-being. We know that biosecurity sabotage has been threatened in this country before. I think it would be folly not to have the capacity, through our intelligence services, to monitor activities that might well be leading to the enhancement of those activities within New Zealand. That would be the case if we stuck to the very narrow definition the member who preceded me seemed to be applying. The powers and functions set out in clause 8 make it clear that this legislation is very much about protecting New Zealand’s broad interests. As I said before in relation to Part 1, it is arguable sometimes how much of a threat and a risk we are suffering from, but the reality is that we need those sorts of organisations in place, providing those sorts of functions, to ensure that we have a measure of protection.

I know that some members will say that the references to international and economic well-being are really code for being able to monitor and potentially suppress domestic dissent. I do not accept that reality. The bill sets out sufficient protections and mechanisms to ensure that that will not be the case. However, what it does do—and this is the very point, surely—is recognise that in today’s environment those sorts of issues are part and parcel of the threat we face. Terrorists do not see things neatly in terms of defence or security relationships only. Terrorists view issues from the totality of the damage they can do to a particular State or society in advancing their own objectives. They will not sit there and say that that affects just the defence or security interests of New Zealand. They will use whatever methods available to them to advance their cause. I think that everyone in this House recognises that—even the member who preceded me.

The point therefore is that in arming ourselves to the extent that it is possible to arm ourselves to protect our nation against those sorts of incursions, powers need to be crafted in this legislation of the nature of those set out in clauses 7 and 8. This is about protecting New Zealand’s interests. It is not about some sort of vast spying network that either contributes to international security, or spies on New Zealanders.

RON MARK (NZ First): I raise a point of order, Mr Chairperson. I did seek the call before, and you saw fit, for whatever reason—and I do not question that—to allocate the call to a party of a lesser size than New Zealand First. You have already taken a call from a National member. You have not taken a call from New Zealand First, and before you make a decision, I would like you to consider that.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for his submission. I always take into consideration the situation of parties in the Chamber. At this particular time, I have taken the decision to call Richard Worth.

RICHARD WORTH (NZ National—Epsom): I am certainly looking forward to hearing the contribution—

Hon Richard Prebble: I raise a point of order, Mr Chairperson. I would be interested to know how the chair is deciding to take calls. You are clearly not following party size. You are not following seniority, because you have called a member who has not been in the House as long as I have, and who represents a smaller party. You are clearly not looking at all parties, because New Zealand First wants to contribute. It is your gift, and if you want to be unfair, you can. I would like to know on what basis we are doing the calls. It is not one that I am aware of.

The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for his contribution. I did look to the honourable member for the next call, but he did not rise.

Hon Richard Prebble: When you called Mr Dunne ahead of me, I did not rise.

The CHAIRPERSON (H V Ross Robertson): The reality is that I have called Richard Worth, and I cannot take the call from him, but I will take into consideration what the honourable member has said. I thank him for drawing the matter to my attention.

Ron Mark: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (H V Ross Robertson): I have made a ruling and already called someone. Under the Standing Orders, I cannot take the call away.

Ron Mark: I know that, but my point of order is this: the Hon Richard Prebble has asked for an explanation as to why you saw fit to make the decision you did. The reason I took my point of order before you made your ruling was so that you had a chance to consider what I had to say. But you have now accorded two calls to the National Party before you have heard from any other Opposition parties on this part, so it is difficult for those of us sitting here to understand your logic. You were simply asked for an explanation, and all you have said is that you have since made your call, so that is it. That is not particularly fair.

The CHAIRPERSON (H V Ross Robertson): Can I thank the honourable member. I also take into account proportionality, and I will now call Richard Worth.

RICHARD WORTH: After that exchange, I thank you for giving me the call. I certainly look forward to the contribution that Mr Mark might make later in this debate, and I should not overlook Mr Prebble. I should also not overlook the large number of members of the Government who are in the debating Chamber. I do not doubt their willingness to take calls in the course of this debate. Before I move to the substantive part, Part 2, I would also like to observe that to date in this debate not one member of the Government has taken a call—not the Minister in the chair, Lianne Dalziel; not all the members in this packed Chamber opposite. Why have they not done that?

John Carter: Arrogance!

RICHARD WORTH: Arrogance is one of the reasons offered. I think there is a natural timidity to speak out about the merit, or otherwise, of this legislation. The Minister sits silently, scribbling with her green pen.

Hon Richard Prebble: I raise a point of order, Mr Chairperson. The honourable member is suggesting that Government members are too timid to speak. That, of course, is out of order. It is suggesting that they lack courage. For whatever reasons Government members are not speaking, I am sure that lack of courage is not one of them. The member cannot pursue an argument of that sort.

The CHAIRPERSON (H V Ross Robertson): There is a clear Speaker’s ruling that one cannot indicate in the House that members lack courage. The member will withdraw and apologise.

RICHARD WORTH: I withdraw. I would just like to say—not with reference to that point of order—that there is a difference between timidity and lack of courage. I, of course, apologise and withdraw, and I am standing on—

The CHAIRPERSON (H V Ross Robertson): The member will now withdraw and apologise.

RICHARD WORTH: I withdraw and apologise.

In connection with Part 2, I would like to say, first, that all of this part, and Part 3, are in substantive terms probably the crunch parts of the bill. That is for a raft of reasons. The first issue is Part 2, which establishes as a department of State the Government Communications Security Bureau. When I was talking about Part 1, I offered an insight into the history of the events that had seen this entity operate for a number of years without the status that it is now to be given by this legislation.

The second issue that relates to Part 2 concerns the substantive provisions that deal with the objective of the bureau. Those provisions raise the very important philosophical issue that what we are about in this debate is striking a balance. It is a balance between, on the one hand, an active intelligence service necessary for national security, and on the other hand, a reluctance—a concern, perhaps—that there will be aspects of invasion of privacy, or a threat in some way to the fabric of the nation. It is a balance that the Green Party struggles to find, and we certainly heard from them in that regard. It was Jenny Shipley, I think, who on 21 March 2000 made a comment about striking that balance. She spoke about the balance between keeping matters secret that clearly deserve to be kept secret in the public and national interest, and on the other hand allowing public discussion and debate on those issues that deserve wider consideration.

The Intelligence and Security Committee was quite robust, I would suggest, in the way it dealt with a number of submissions in respect of Part 2. That was all to the good, because in this type of legislation, there is always the runaway possibility that it will be distorted by the strong views of small elements of the community about the security intelligence function. So I simply note that the committee declined to make a number of major changes that were sought. It declined, for example, to narrow the objectives of the Government Communications Security Bureau. It declined to expand the role of the Inspector-General. It declined to include details of operations in the bureau’s published annual report, on the basis that that might prejudice security. In the context of the balance that the committee had to bring to bear to the argument, those were important considerations, and the committee did consider them. That is all to the good.

In the short time remaining, I would like to focus on the functions of the bureau. I do not seek to read out the functions set out in clause 8. Members have had the benefit of hearing earlier speeches on what those functions are.

RON MARK (NZ First): I really want to point out a couple of things, but firstly I need to bring to the attention of the Committee just how long this part has been waiting to be debated. It is quite interesting to go back through some of the Order Papers, is it not? On 10 September 2002 this bill was sitting at No. 41 on the Order Paper.

Rod Donald: It came in under urgency.

RON MARK: It did too. On 27 February this year, it had finally worked its way to No. 12 on the Order Paper. Here we are on 25 March, and the bill has finally got to the stage where we are now debating it as item No. 5—it is actually listed as item No. 7—on the Order Paper. We have witnessed, up to this point, an absolute silence on the Government benches, and a Minister who simply is not interested in the bill. She is sitting there, not answering any questions, and not countering any points that are made by members—points that the Government clearly disagrees with, because it has voted against the amendments that those members have put up—with an absolute confidence that this bill, in its current form, is ready for passing. I draw clause 9(2) to the attention of the Minister in the chair, the Hon Lianne Dalziel. I ask her to please take an interest in the security issues that face our country. I ask her to read clause 9, and specifically subclause (2), and ask herself whether that clause is correct. If the Minister is happy for clause 9(2) to go through, then that is fine—that probably justifies why she can sit there and not make one sentence, one word, or one utterance in support, defence, or explanation of the bill. But when I look at that clause, I see a problem. I am not being paid the sort of money that Minister is getting paid. I do not have a ministerial gold card, a ministerial gold car with leather seats, and all the trappings of office around me, but someone certainly does. I see that there is a problem. There is a basic error—a simple, fundamental flaw—that this Government has not picked up on.

Why? Because Government members are not even participating in the debate. They have not even read the bill. It is not my job to sit here and tell the Government how to do its job, particularly when it has the biggest Cabinet that the country has ever seen since—well, since whenever. This Government has more people on ministerial salaries than anyone can recall in their time in this House. There is a fault, an error, in this bill, and the Government had better sort its act out or we will be back here, in the Chamber again, correcting it. That is all I am saying to the Minister. I can see the error; I am not responsible for the bill; someone sitting in this Chamber is responsible for it, right now; and I suggest that that someone do some work, right now, to correct that fault. If we find that we are back in the Chamber again in order to resolve stupid administrative errors, then that simply reflects poorly on the calibre and quality of Cabinet staff and the administration—the executive—of this Government. I am talking about a simple, basic, stupid little flaw that should not be in the bill, given that this bill has been hanging around on the Government Order Paper for years. I will leave it at that.

Hon RICHARD PREBBLE (Leader—ACT NZ): I hope the Minister has listened to what Mr Ron Mark said, because I think he is right. It does appear to me that this bill has been overtaken by another bill, which we have just passed. The Minister may not be interested, but I see that the director is here. If he wants to be paid, it would be a really good idea to make an amendment to this clause. Otherwise, the director, who does deserve to get paid, will not be paid. So I compliment Mr Ron Mark on discovering that matter, and I am sure the Minister would be rather pleased if we carried on discussing it for a while, but I turn to another point.

Some members were asking whether any members of the committee could explain why there was an amendment to clause 8(1)(d). I have had a look at that, and I think the reason is apparent on the face of it. This is the clause that states: “to provide reports on foreign intelligence to the Minister and any person or office holder,” and the addition states: “whether in New Zealand or abroad,”. If it were not for that amendment, one could say that the provision related only to foreign intelligence from overseas, but, of course, there can in fact be foreign intelligence—as within our definition; to do with foreigners—within New Zealand, and, indeed, quite often it may be. That is my memory of why that amendment is there, but if the Minister—who is now, I hope, taking an interest—would also like to look at clause 9(2), she could confirm whether the answer I am giving is correct.

I say again, when I look at this bill, that the Green Party, in my view, has a duty, when looking at legislation, to move beyond just making meaningless slogans and look at the reality. We are passing laws; those members sought to be members of Parliament. If they sought to be MPs, then they have a duty to this House to debate in an intelligent and rational way. The sorts of things that we have been hearing from the Green Party are complete nonsense. The first example of that is the suggestion this bill has been put together in order to find work for the Government Communications Security Bureau. Where have the Greens been? The idea that there are now no threats to New Zealand is as silly as the proposal, which I heard from a very senior member of this House, that we live in a benign environment. We actually face more security threats today than we have faced for many years, and they come from terrorists. If the Green Party is not prepared to use this type of intelligence to combat terrorists, how does it propose we do it? Are they just proposing that, somehow or other, we can just say that we are so supportive? I listened to a suggestion, made by Mr Donald—which I thought was greatly offensive—that terrorism against the West was the result of George Bush. He suggested Mr Bush was somehow responsible for the events of 11 September. That type of conspiracy nonsense does no credit to the Green Party whatsoever. Does Mr Donald think we are supposed to take seriously his suggestion that it is George Bush who is somehow responsible for those actions of terrorism? Are we supposed to believe that the Green Party actually believes that? The alternative is that the Greens do not believe it. Well, if they are members of this Parliament, they ought to be telling us what they really believe, rather than things they think will make good rhetoric and will persuade some flaky members of the community to give them their vote.

The reality is we all know we need the Government Communications Security Bureau. We also know there are people engaged in such things as economic espionage. We do hold commercial secrets in this country. There was a well-known example of a particular individual from China who had in his possession a number of cuttings—I think it happened in the apple industry—that had cost New Zealand millions of dollars to collect. The Green Party would have us believe we should rely purely on the police to protect us from that type of economic sabotage. That is nonsense. This legislation is the only way that we will have protection, but I say to Government members that they ought to be debating the matter. The reason Government members are not debating this legislation, is, I think, that there is a contrast between the reality of this bill—an alliance between the United States, Britain and New Zealand; that is what the Government is creating under this bill—and the Government’s public rhetoric to the opposite.

JOHN CARTER (Senior Whip—NZ National): I raise a point of order, Mr Chairperson. I did not want to interrupt the member’s speech, but I noticed something that is rather extraordinary. I hope that what I saw was not what I think I saw, as I would hate to feel that the senior Government whip was putting some pressure on the Chair to conclude the debate. It seemed odd that the senior Government whip was tapping his watch and pointing at you as though to say: “We have had enough time on this bill.” If the senior Government whip wishes to indicate to the Chair, there are other ways in which it can be done, but if he needs to do so, he should not do it quite so obviously.

The CHAIRPERSON (H V Ross Robertson): The member will also notice that the Chair took no notice.

ROD DONALD (Musterer—Green): I raise a point of order, Mr Chairperson. I would like to draw your attention to an issue of equity. My colleague Mr Prebble has had two calls on this part, and I—

Hon Richard Prebble: I most certainly have not.

ROD DONALD: Has he not? I thought he had had a second. My apologies.

GEORGINA BEYER (NZ Labour—Wairarapa): I move, That the question be now put.

Hon TONY RYALL (NZ National—Bay of Plenty): I want to pick up on the point that the Hon Richard Prebble made about the vital need for Parliament to have a debate on this bill. Debate requires that there is a contribution from Government members of the Committee. We have not heard one Government member take a call to—

Hon Member: Why do you think that is?

Hon TONY RYALL: Well, we have not heard one Government member seek a call to justify this bill, which is in the name of their Prime Minister. Not one Labour member has sought to take a call to explain what is going on. I think I know why. This Government has been seeking to perpetrate a misconception on the people of New Zealand. This Government has been trying to convince the people of New Zealand that they have no involvement in what is going on in Iraq, no involvement with the Americans, and no involvement with the British or Australians. The simple fact of the matter is that, I am sure, there is a level of information sharing going on. Whether it is at a low level, I do not know, but this organisation is one of the apparatus by which our left-wing Government is able to spy on the activities of other entities in this country. We have a Prime Minister who is trying not to be involved in any of this international conflict, but the fact is the Prime Minister is promoting legislation that enshrines in the statute of this country, an organisation whose raison d’être is spying on other entities, and this Prime Minister and her party do not want to be seen to be debating that matter at a time when they are trying to distance themselves from involvement.

What I have to say to this Government is: “Accept your responsibilities and take a call in this debate.”, because we need to know what the Government thinks. I have to say that, right now, this is a country where we should be fearful for our security, because there is no doubt that the Islamic fundamentalists and ideologues who are perpetuating great violence in many parts of the world are anti-Western. This Government would like to think they are just anti-American. Well, they are actually anti-Western. The fact that so many of our cousins across the Tasman lost their lives in Bali would surely be enough of a message to the “lefties” in this Parliament that this country is involved as a potential target for those organisations. That is why we need the sorts of legislation that support the intelligence-gathering structures.

I am concerned that we have a party in Parliament—the Greens, who one day aspire to be part of a Government—who, at every opportunity, rail against the apparatus of the State being applied for the security of the State and the security of New Zealanders. Because time and time again, when we come to passing legislation to support the security infrastructure of New Zealand, there is always one party against it—namely, the Greens. But is it not interesting that the very freedoms that Mr Locke and Mr Donald have to protest against the Government and the Parliament of New Zealand, are denied to millions of people in Iraq. Millions of people in Iraq do not have the opportunity to stand up and protest against their Government. No members of Parliament in Iraq have an opportunity to stand up and protest against their Government, but we have that right in New Zealand because we use every means we have to enforce our freedoms and our right to be free. Part of that freedom means actually taking the unpleasant decisions of having to support a security infrastructure and the apparatus necessary to find out who is plotting against us.

ROD DONALD (Musterer—Green): I raise a point of order, Mr Chairperson. When you consider the inevitable closure motion, I would like you to take into account the alternation in the Chamber between those who support the bill and those who oppose—and we are the only ones who oppose. I further ask you to consider that, since I last spoke, the Greens have been challenged by Richard Worth, Richard Prebble, and Tony Ryall, and I believe that natural justice suggests we should have the opportunity to rebut those challenges.

The CHAIRPERSON (H V Ross Robertson): I thank the member but I do not need his assistance on this.

DARREN HUGHES (NZ Labour—Otaki): I move, That the question be now put.

KEITH LOCKE (Green): I think it is right to have this debate as it is a very important one. The comments that Tony Ryall made were in the spirit of the seriousness of this issue, so it is good to be able to address some of them.

I want to speak to clause 12, “Annual report”, which I think is a weak provision. The way I read it, in terms of the reporting on interceptions that the Government Communications Security Bureau does, it appears weaker than what is actually the practice in the New Zealand Security Intelligence Service, which not only reports on but reports the number of interceptions. Under the Security Intelligence Service legislation the organisation has to report the number of interceptions and the duration of those interceptions. Even that is not really sufficient accountability, but it is much more than is set out under the reporting procedures in clause 12.

I think that is one of the problems when one is dealing with electronic interception. Even though the targets of that interception might be legitimate, intelligence services can do the wrong thing, and, by the very nature of electronic interceptions, the targets of those interceptions do not even know it is happening. So it is important to have a proper reporting procedure, because that is an element of the accountability. If there are a lot of interceptions, and if they are going on for a long time, then hopefully the Parliament and the people will put pressure on the Government and ask what is going on, what the threat is, and what all the interceptions are about. Of course, with secret organisations one is not asking for every last detail, but one does want some accountability.

The other problem with clause 12 is seen in subclause (4)(a) and (b), which states that the reporting should not prejudice relations with other agencies. Of course, there is a reason for that. If one is getting intelligence from overseas, one does not necessarily want to disclose it all, but I am a bit worried that subclause (4)(a) and (b) will allow information to be kept confidential, purely on the basis that it is being provided by an overseas agency—the CIA or MI5, or whatever. In a sense that means that these agencies are dictating what is secret and what is not, because they say: “Well, we’re not going to give you any more information unless you keep all this secret.”

One of the problems with that is that one cannot necessarily trust those agencies. We have seen Colin Powell get up at the United Nations recently, and say: “On the basis of this intelligence information we have, there are links between al-Qaeda and Saddam Hussein.”, which proved to be completely false. There was all the other contrary information, such as: “There are all these intercepts we have with Saddam Hussein’s generals that show they are going around hiding weapons of mass destruction.” The inspectors have pooh-poohed all of that, in terms of mobile laboratories and the sorts of things that Powell came out with. One of the problems is that he could say: “This is secret intelligence information.”, and nobody could countermand what he was saying, although in this case the CIA people were so outraged they selectively leaked to the press, saying that Powell was talking a lot of rubbish.

One of the problems is that when countries have agendas—as the United States under the Bush administration have at the moment—they often use secret information through their intelligence organisations to justify what they are doing, not only in an unaccountable way but in a lying way. That was the case with Colin Powell at the United Nations. So we have to be cautious about putting provisions in here that would allow overseas organisations to dictate what we should or should not disclose.

The other material under Part 2 involves the whole question—and I think my colleague has already spoken about it—of whether what the Government Communications Security Bureau correctly interprets to be New Zealand’s international well-being or economic well-being is completely subject to a partisan interpretation.

If one is from Monsanto one might say that what we are doing in this country with GE products is completely in the interests of New Zealand. Any politician in New Zealand who supports Monsanto and GE would say: “Oh, that’s completely in our interests.”; whereas people on the other side of the political fence would say that it is not, and that companies like Monsanto are undermining our economic well-being.

MARTIN GALLAGHER (NZ Labour—Hamilton West): I move, That the question be now put.

A party vote was called for on the question, That the motion be agreed to.

Ayes 60

Noes 55

Motion agreed to.

Labour 52; United Future 8.

New Zealand National 26; New Zealand First 12; ACT New Zealand 8;Green Party 9.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 106

Noes 9

Part 2 agreed to.

Labour 52; New Zealand National 26; New Zealand First 12; ACT New Zealand 8; United Future 8.

Green Party 9.

RICHARD WORTH (NZ National—Epsom): I raise a point of order, Mr Chairperson. My point of order is in connection with the concluded Part 2, and relates to clause 9(2). We know, and we think that the Government should know, that there is an error that we have sought unsuccessfully to have the Government take notice of. The error is that the remuneration of the director is determined by an entity and under a statute that no longer exists. Mr Mark started this issue off, and other members on this side of Parliament sought to draw the issue to the attention of the Minister in the chair, who would not listen to that point. National supports this bill. If we did not support it, I suppose we would be happy to leave a hopeless mess behind us. But now we have a situation where the director of the bureau will not get paid. I suggest that this is an issue that needs to be revisited on the basis of the point of order I now raise.

Hon RICHARD PREBBLE (Leader—ACT NZ): While I am sympathetic to the point that the member has raised, it is not actually a point of order. The Government can pass, and often does, bills that are nonsense. Mr Mark drew the matter to the Minister’s attention, and so did others. If the Government wants to pass a bill whereby the director’s pay is to be determined by an organisation that has been abolished, that is not a question of order; it is just a question of good sense.

Rod Donald: The director won’t be happy.

Hon RICHARD PREBBLE: I know the director will not be happy. For all I know the Government does not like the director. However, the matter is not a point of order, and no doubt at some point when Helen Clark comes back we will have this provision recommitted, and we will all draw it to your attention.

The CHAIRPERSON (Hon Clem Simich): I thank Mr Prebble for pointing out that the matter was not a point of order. I agree with him. It is a drafting issue, and it is something the Government will have to address.

RON MARK (NZ First): I raise a point of order, Mr Chairperson. Can I suggest a way forward so that the time of the Committee is not wasted, and so that the Government is not made to look any more stupid than it currently looks. I brought this point clearly to the attention of the Minister and the Government whips. They consulted with officials and they proceeded to sit here and do nothing while the provision passed through. I suggest that the Government whips might like to consult quickly and approach other whips with a view to us going out of Committee, moving on to the next order of business, and taking some corrective action before the Government looks even more stupid than it currently does.

Hon RICK BARKER (Minister of Customs): I have taken some advice on the matter. I am advised that the remuneration Act is not superseded until 1 April, and until that time the bill as it stands has to reflect what is currently the law. It cannot do otherwise. We know it will change, but we are dealing with it at this time. At some later stage when the law takes effect, the wording will simply be changed as a consequence.

Part 3 Interception of communications

KEITH LOCKE (Green): The Green Party has several amendments under this part, three of which are along the lines suggested by the Privacy Commissioner, who made a very intelligent submission to the Intelligence and Security Committee. I will move these motions, which are amendments he suggested. The Committee and Parliament as a whole should take them on board. For a start, clause 15(1) would add paragraph (c) “otherwise intercept any private communication.” The aim of this is to guard against the situation where the permission of a person alone is sufficient for an interception. The commissioner wants warrants to be obtained. If one gets a householder’s permission to intercept a communication and from that household one looks at the communications of someone in the next-door property, the fact that permission has been given to the Government Communications Security Bureau should not avoid the need for a warrant. That is a very good suggestion made by the Privacy Commissioner, and it is now put down in an amendment.

The idea in clause 16(1) is to omit the words “or by any other enactment”, which is a very general term. In this part we are talking about warrantless communications, and there is a particular problem with warrantless communications. If we just have any other enactment to allow this, without specifying those particular Acts, we could get into a lot of trouble. On behalf of the Green Party I suggest that in clause 23(1) we change the period of the warrants from 12 months to 6 months. The Privacy Commissioner argued that 6 months is quite a long time and there should be some sort of review. It does not mean to say the interception could not continue beyond that time, but there would have to be a review process and an additional application in order to achieve that extension of the warrant. That would be more in line with warrants in other agencies that do not go for 12 months. My amendment to clause 24A adds after the words “whose communications are to be intercepted”, the words “and also to take reasonable steps to avoid damage to computer and communications equipment accessed in the interception process.” This last amendment is not a suggestion of the Privacy Commissioner, but it would be a useful addition to the bill.

Part 3, “Interception of communications”, is very important. It is a considerable invasion of our privacy when an agency like the Government Communications Security Bureau is given the right to intercept electronic communications, which we use so much these days, and, in tandem with the Crimes Amendment Bill (No 6) and the Telecommunications (Interception Capability) Bill, the powers to intercept electronic communications of all types, plus the right to hack into people’s computers—that is, to access people’s computers remotely, without them even knowing that that is happening. Under clause 16, which refers to unwarranted interceptions, it will be done only to foreign communications. As I said earlier, the term “foreign” is so wide that it can include a lot of foreign non-governmental organisations, such as Greenpeace, Amnesty International, etc., or subsidiaries of foreign corporations. Also, any New Zealander in communication with a foreigner could be intercepted. Most electronic communications do not carry passport details with them, so none of the intercepting agencies really knows whether they are intercepting a New Zealander or a foreigner. New Zealanders can be caught up in this system, which is why it is very important to have all the proper qualifications here, in terms of warrants and proper authorisation. There should not be any looseness in the system.

Clause 20, “Authorisation to access computer system”, contains a very broad power. I am sure that most people, like myself, keep a lot of back-files on their computers for years. A lot of our personal lives—all our thoughts and everything—are on our computers.

SIMON POWER (NZ National—Rangitikei): I listened with some interest to the contribution that was made by Keith Locke, and I think we might be reading different parts of the bill. When I read the purpose of Part 3, and, more particularly, the restrictions imposed on interceptions contained in clause 14, I was struck by how limited the powers of the Government Communications Security Bureau were. Frankly, I was quite surprised at the processes by which that information has to be obtained. I was interested to see that clause 14 states that interceptions are not to target domestic communications at all.

Ron Mark: It’s to look after the unions.

SIMON POWER: Maybe Mr Mark is right; perhaps we should not go too far down that track. However, it is worth just spending a bit of time on that. For those members opposite who have not read the bill, I say that clause 17, which relates to the issuing of the interception warrant, is completely subject to the restrictions imposed by clause 14. In legal terms, the bar is actually set quite high for those who are seeking to obtain or intercept information by one means or another.

It is worth spending a bit of time on clauses 14 and 15, because I imagine that they will become the focus of the debate on this part. Clause 14 states: “Neither the Director, nor an employee of the Bureau, nor a person acting on behalf of the Bureau may authorise or take any action for the purpose of intercepting the communications of a person ... who is a New Zealand citizen or a permanent resident.” I would have thought that that was pretty limited in that case.

Clause 15 goes on to say: “(1) Unless authorised by an interception warrant to do so, neither the Director, nor an employee of the Bureau, nor a person acting on behalf of the Bureau may—(a) physically connect an interception device ... or (b)”—and this is where the bill gains in strength, and gets a bit of grunt—“install an interception device in a place for the purpose of intercepting communications that occur in the place.” That emphasis is a change from the original clause 15(b), which read: “install an interception device in a place—(i) without the permission of the occupier of the place”; that has now been removed. That provision has been strengthened in the sense that the need for the interception to occur is no longer subject to the permission of the occupier. That is a change that the select committee has made, and, in my view, it is a significant change.

Perhaps it is just a bit of a quirk of mine, but the other thing I thought was quite interesting was that the old clause 15(b) phrase “for the purpose of intercepting communications made or received in the place” has been replaced by the phrase “that occur in the place”. That widens the scope. The interception may occur as long as the intercepting communication occurs in that place. In other words, the interception does not have to be made or received; it just has to occur. That is a widening and a strengthening of the earlier provision.

I will turn now to clause 17, which deals with interception warrants. I will just reiterate what I said earlier, which is that the issuing of an interception warrant is subject to clause 14 the whole way through. That means interceptions are not to target domestic communications. The Minister in the chair might be able to help me out here, but my reading of it is that, with the issuing of an interception warrant being subject to clause 14, the warrant cannot relate to the communications of a New Zealand citizen or a permanent resident. Is that right? I think it is pretty limited.

Ron Mark: It’s a bit soft.

SIMON POWER: My colleague Ron Mark says it is a bit soft. I am surprised by the narrow scope of that clause, and by the way in which the see-saw has come down on the side of the public good, as opposed to the privacy of an individual. Actually, the see-saw has not moved very much at all. I would be very interested in any other comments other members may care to make.

RON MARK (NZ First): I will pick up on the points that have been raised by the honourable member Simon Power. I ask the Government to reflect on this. I know what this bill is all about; it is about enhancing our security, and protecting ourselves. In the light of September 11, and the things we have seen since then, it is a very sensible bill. We might argue that it has taken too long to get here, but when we look at some of the issues that face us as a nation, and we reflect on a lot of the debate we have had in this House in respect of border control and immigration, I have to ask what clause 14, “Interceptions not to target domestic communications”, means in stating: “Neither the Director, nor an employee of the Bureau, ... of a person ... who is a New Zealand citizen or a permanent resident.”

Let me use an example, so that I am not accused of being xenophobic or whatever. In the Middle East I was known by a couple of names. I had the names Hernam Singh and Abdul Aziz. Let us just imagine that Abdul Aziz came to New Zealand on a tourist visa to travel around and look at our wonderful scenery, then sought to change his status from that of a tourist to that of a resident or a student, so as to attend university. We all know that that is possible here, because the Minister has answered countless questions about that very issue, and has confirmed that that indeed happens. After 2 years in New Zealand, Abdul Aziz then applies to be a permanent resident. At that point, none of his internal communications within New Zealand can be monitored by this bill. Is that sensible? It is not sensible.

The one thing we have all learnt from modern terrorist operations is that, to those people, time is no boundary or limitation. The prospect, idea, or method of installing people in a country, where they are sleepers, and go about establishing their reputations, their careers, their CVs, and their history alongside ordinary New Zealanders, is a time-proven method of operating. It is standard operating procedure for many terrorist organisations. It is an operating procedure that has been used very effectively, because they know that, after a certain time, an individual’s slate is cleaned and sanctified, and that person can then move out on to the greater, international market with a clean New Zealand passport, and operate with freedom inside another country, or can commence operating inside the host country. This clause prevents the Government Communications Security Bureau from monitoring the communications of such an individual.

I ask the Government whether that is what it intended. Is that sensible? That is where the Security Intelligence Service comes in. Maybe the Minister in the chair, being as learned and well-paid as he is, could take a call and satisfy my concerns by explaining how our other internal security mechanisms pick up and kick back on this particular worrying anomaly, just to reassure me and the Committee that such a scenario could not be played out, and that such a scenario, if not covered in this bill, is covered in other legislation that the Security Intelligence Service acts under or that the New Zealand Police may have at its disposal. Far from having the concerns that Mr Locke has, I do not see anything in clause 14 that worries me about the freedoms and rights of people who are not even citizens of this nation but are simply permanent residents. I see a threat to the New Zealand security system, a failing in our internal security, and a gap in that clause that would give comfort to people who might have in their intent the notion or the deliberate plan of acting against New Zealand’s interests or, long term, against the interests of New Zealand’s allies. I really would appreciate the Minister satisfying my concerns by taking a call and commenting on that right now.

ROD DONALD (Co-Leader—Green): The previous speaker, Ron Mark, said earlier in his speech that we all know what this bill is about. I am beginning to wonder whether some Government members do actually know what this bill is about, because they have not risen to their feet to comment on it in any way whatsoever, which suggests to me they do not have a clue about what is going on here.

I would therefore like to point out briefly that what we are talking about in all these polite words is the Tangimoana radio signal station—that is, the station that failed to pre-empt the Rainbow Warrior bombing, by not picking up that the French yacht the Ouvea was on its way to New Zealand—and the Waihopai satellite communications station, which we all know failed to predict the Fiji coup, because it, clearly, was not listening to communications coming out of or going into Fiji. That is what the Government Communications Security Bureau is and does, and it has all the international connections that we have referred to previously.

I digress by saying that I have visited the Waihopai base in Blenheim a couple of times. My first visit was made without advance warning. It was fascinating to look at the foyer, because up on the wall were photographs of all the other bases—the Australian, British, and American ones. When I came back a couple of months later on an official visit, I think with Labour MP Tim Barnett, those photographs had been taken down. On that second visit, the most fascinating thing about the foyer was the empty picture hooks on the walls, and the fascinating thing about the base commander’s office was that all the mugs, bar half a dozen of them, were missing from the shelves on the back wall, because they had engraved on them all the different conferences he had been to overseas. The second time round, he had been to many fewer conferences!

I return to the part. Mr Worth said earlier that there needed to be a balance, and we entirely agree. We are simply saying that the balance is wrong, and in this particular part I appeal to all other parties in the Committee to support the amendments Keith Locke has put up. He is trying to give effect to the very real concerns raised by the Privacy Commissioner, and those concerns are real. So in the same way that in the previous part we would prefer not to have “economic well-being” and “international well-being”—instead, accepting that there does need to be a concern for security but constraining that to acts of espionage, sabotage, and terrorism—in this part we are saying that there does need to be a limit placed on the extent to which the interceptions authorised by warrant can be applied. That is why we want to add the words “otherwise intercept any private communications”. Equally, with clause 16, we want to delete the words “or by another enactment”.

From our point of view what we are dealing with here is a bill that gives the Government Communications Security Bureau extraordinary powers to hack into people’s computers, and to tap their phones and bug their homes. We at least want those aspects of the bill that are subject to ministerial warrant or authorisation to be as tight as possible, because the organisation, the Waihopai spy base, can do extraordinary invasions of people’s privacy through its electronic-trawling exercise, known as Echelon. We know that that interception system monitors every phone call, every fax, and every email transmitted via international telecommunication satellites, which, in our view, infringes the privacy of law-abiding individuals and organisations. There is nothing we can do to stop that, but the very least this Committee could do is support the amendments in Keith Locke’s name to ensure that where a warrant is issued it is issued for the very narrowest of purposes.

On that point I would like to finish on clause 14, “Interceptions not to target domestic communications”. The issue is “target”. The purpose cannot be to intercept domestic communications. As I said on an earlier part, the tape will not be turned off when people here taking part in a foreign conversation respond, because then the conversation would not make any sense. So although people’s communications might not be targeted, certainly they are being monitored, recorded, and analysed. According to the best sources we have, those communications are going straight back to the National Security Agency in the United States of America, which supplied the Echelon system, the ‘dictionary” system, and which, in effect, runs the Waihopai spy base, even though it is our taxes that pay for it.

RON MARK (NZ First): I want to make just a short call. I refer to the Government’s Supplementary Order Paper 36 in the name of the Rt Hon Helen Clark, which amends clause 14. Simon Power might be interested in having a look at this, as well.

Further to the concerns we have just expressed, there is one other amendment that the Government is making, and that is to insert after the words “a foreign organisation” the words “or a foreign person”. Clause 14 would then read: “for the purpose of intercepting the communications of a person (not being a foreign organisation or a foreign person) who is a New Zealand citizen or a permanent resident.”

I am a little confused now, because that raises a question. I will ask the Minister in the chair one more time—and I hope he is awake, because I would seriously like an explanation. He has a whole bank of officials he can consult. He can get an answer and advise the Committee. I ask him whether that surely does not raise the question of how one justifies saying that a permanent resident is not a threat but a foreign person is. How can this Government—and this Government of all Governments, which criticises my party up hill and down dale for targeting foreigners—right here differentiate between foreign persons, and accord greater privilege to permanent residents who we know are foreign persons yet to gain New Zealand citizenship? That is how I see it. Am I wrong?

All I am saying is that the concern from the Opposition side of the Committee is that clause 14 appears very loose. Clause 14 makes it impossible for the Government Communications Security Bureau to monitor or intercept the communications of persons who are New Zealand citizens or permanent residents. We are questioning why permanent residents should be included. Now, as I look at the Supplementary Order Paper in the Rt Hon Helen Clark’s name, I question it even more, given that the Government is differentiating foreign persons. There is a question there, and the question is this: what makes a foreigner who has gained permanent residence any less of a threat than a foreign person who has been in the country for precisely the same period of time but who has not yet been approved or given permanent residence? Surely the difference lies in a piece of paper and a tick, as far as the interpretation of this bill is concerned, but in terms of the individual standing before us there could be no difference.

Am I clear, or am I confusing the Minister? Would he like to ask me a couple of questions and ask me to explain myself? I would certainly like to know from the Minister why a foreign person living in New Zealand, who may well have applied for permanent residence but has not yet received it, is considered to be different from a person who has gained permanent residence. My argument is that there should be no reference to “permanent resident” in that clause. If the Government is going to exempt New Zealand citizens, that is fine—please explain to me how we pick that up in other legislation—but I suggest to the Minister that there is a serious anomaly in the legislation and it is deserving of an explanation to the Committee. Or are we going to see more of the same bland, know-nothing, quiet arrogance from the working class party? Please, can the Minister explain?

Hon RICHARD PREBBLE (Leader—ACT NZ): I rise to reply to the points made by Mr Rod Donald and Mr Ron Mark. Clause 14 is not as either of them has described it. I say to Mr Donald that he has been in Parliament long enough to know that the title of a clause is not part of the law. He has to read the clause, and the clause is quite clear. It states that the Government Communications Security Bureau cannot intercept communications of a person who is a New Zealand citizen or a permanent resident. I would have thought that the Greens would be in favour of that, instead of suggesting otherwise. I most certainly did support it, because the purpose of the Government Communications Security Bureau is to guard us from foreign threats. We have the Security Intelligence Service to guard us from local threats, and that is a split that is made worldwide.

Mr Ron Mark, if I understand him correctly, wants to know why we do not authorise the Government to spy on all permanent residents. I can tell Mr Mark that there is a very good reason for that, which is that people who have permanent residence have already gone through a process, and they been approved as such. Mr Mark should understand what he is suggesting. The biggest group of permanent residents in this country are people from the UK. We have over 350,000 permanent residents from the United Kingdom, and, if I understand the New Zealand First Party correctly, it is suggesting that that group of people is somehow some sort of security threat to this nation. Well, I would like to see New Zealand First put that speech around the country, and suggest that that is what a New Zealand First Government would suggest. We have permanent residents from the UK who have been living in this country for 30 to 40 years, and if we are suddenly going to suggest that, because of events in the Middle East, we now have to include them among those subject to security warrants from the Government Communications Security Bureau, then I really think those members need to get a grip.

But I do say that it is legitimate for Mr Ron Mark to raise these questions, and they ought to be answered by the Government. This is a serious bill. It is a bill that has been called for for a long time, and it needs to be debated. I suggest that the reason the Government is not prepared to debate it has been actually touched on by the Greens. This is a bill that puts in legislative form the fact that there is a longstanding intelligence agreement between the United States, the UK, Canada, Australia, and New Zealand—[Interruption] And in my case I am in favour it. Sorry; what was the member saying?

Hon Brian Donnelly: Long may it continue.

Hon RICHARD PREBBLE: Thank you. It is not often that we agree. The member said: “Long may it continue.”, and I see absolutely no reason that we should not say that. But I do find it very interesting that here we are, this week, putting in legislative form statutory recognition of the fact that our security lies with our traditional allies, yet we are following a foreign policy where the Prime Minister is saying—for, I think, domestic, political purposes—that our security does not lie with the United States.

The Committee ought to realise that some of the intelligence we are providing may be of assistance to the UK, Australia, and America in Baghdad today. That may very well be the case. That does not worry me, and I am quite prepared to be upfront about it. But I suspect that it worries the members opposite, because they are not prepared to discuss what they are doing. I also suspect that some Government back-benchers do not actually realise that some of the things Mr Locke is saying—although he might put it in a somewhat exaggerated form—are in fact correct. I am not concerned about it, but some of the things he is saying most certainly are correct. I think that those Government back-benchers who think they are following an anti-American line because that is what they want, do not actually realise that our Prime Minister runs at least three different foreign policies at exactly the same time. There is the one she gives us on television, then, of course, there is this one. I find it very interesting that she is the Minister in charge of this bill, yet she has not said a word about it. Why is that? She does not want to explain it.

MARTIN GALLAGHER (NZ Labour—Hamilton West): I move, That the question be now put.

RICHARD WORTH (NZ National—Epsom): The Committee stage of this bill is now in its third hour. We have called valiantly and repeatedly for members of the Government to take a call, and they have remained mute. Requests have been made to the Minister but he has declined them. Those who have sat in the chair in that 3-hour period have similarly declined to take the opportunity of participating in this debate, and Mr Prebble, in the comments he has made in the last few moments, has raised the issue as to why that is. With real sadness, I suggest that that is happening in the context of the significant issues that are occurring in Iraq, where the need for intelligence in the military context is ever-pressing. Yet Government members are simply not prepared to take part in this debate. I would suggest that that is sad. Instead, we have seen three members on the Government side of the Chamber limit their contributions to this debate to the moving of closure motions. That is disgraceful. Members on the Government side of the Chamber could, if they wished, make a contribution, yet they choose not to do so.

Two parts of this bill are significant: Part 2, which has already been debated and passed, and Part 3, which we are currently debating. I urge Government members, in the context of what is happening in the world community, to be prepared to stand and comment on the merits or otherwise of this bill. This bill is being passed on the basis of a coalition of the willing, to use a well-worn phrase—in this case it is the Government and National, who are fielding the numbers for this legislation to get through. It is shameful—and Government members must acknowledge this—when that is the case, that Government members are not participating in this very significant debate.

Part 3 has a number of provisions in it, obviously, but one of the central parts is the distinction drawn between, on the one hand, interception warrants and, on the other hand, computer access authorisation. The Greens made strong submissions for changes to be made to Part 3 that, in the result, were ultimately unsuccessful. Some of the issues on which the Greens unsuccessfully argued for change touched on the decision of the Intelligence and Security Committee to decline to give all people in New Zealand protection from having their communications intercepted. A second illustration was the decision of the committee to decline to reduce the period for which a warrant is in force from 12 to 6 months.

I want to look very briefly at what Part 3 is all about, in the context of the reality of the day-to-day operations of the Government Communications Security Bureau. The starting point is that there is to be no interception of domestic communications, and that is because the bill forbids the bureau to authorise or take any action to intercept the communications of a person who is not a foreign organisation, but who is a New Zealand citizen or a permanent resident. In my view, Mr Prebble has accurately explained the implications of that provision.

We then move to the case of permissible interceptions with warrants or authorisations, because the bill forbids certain types of interception taking place without a warrant or authorisation. There seem generally to be four classes of case. The first involves interceptions where there is physical connection of the interception device to any part of a network—and that is straightforward enough. The second relates to installation of an interception device in a place without the permission of the occupier. The third relates to the installation of an interception device in a place, where the purpose of the installation is to intercept communications made to or received in that place. Then finally, there is the situation of interceptions that involve accessing computer systems. In all those cases, an interception warrant or a computer access authorisation is required.

DARREN HUGHES (NZ Labour—Otaki): I move, That the question be now put.

KEITH LOCKE (Green): I think the problem here is that people do not quite understand the technology of interception. This part has a provision on interceptions without warrants, and the reason there is such a clause is that when we are talking about something like the Waihopai satellite communications interception system, it is a vacuum cleaner - type system. It draws down millions of communications passing through two communications satellites, and it then filters those communications by using key words, key telephone numbers, fax numbers, destination phone numbers and origin phone numbers, etc.

But the key word system, in particular, is very hard for New Zealand to control when we are part of—and Richard Prebble referred to this—a five-nation network with Britain, the United States, Canada, Australia, and ourselves. One can put a key word in. I think Ron Mark mentioned a name that he used to get called by, although I have forgotten what it was now. But that name could be put in the system—the National Security Agency puts a whole lot of those key words into the Echelon system that the five nations are part of—and how will the Government Communications Security Bureau here figure out what that name means, or why it is spying on Ron Mark under that particular name?

There is no way, practically, that New Zealand can exercise its sovereignty when, for example, the Waihopai system was used for the war in Afghanistan—and we have a report for the US Congress put out on 11 July last year that talks about Waihopai being used for that. It states that. It refers to the SAS, stating “Helen Clark recently acknowledged the presence of SAS forces on the ground in Afghanistan.” The report goes on to state: “Intelligence support was offered, as well. New Zealand’s Waihopai monitoring station is part of the five-nation Echelon network.” That report admits that communications concerning Afghanistan were being intercepted at Waihopai. That was part of our contribution to that war.

Now, how can we guarantee that that same five-nation system is not intercepting communications and using them for the Americans’ effort against Iraq? That is the problem. It is part of the technology of interception. It is not just that one interception device is being put on one wire between two people. People say that the interception will not target domestic communications. Well, of course, that is a great principle, but how will it be carried out in practice when we have something like Waihopai? If we intercept a communication of my colleague Ron Mark there under his pseudonym, how would we know whether he was a New Zealander? That would not be in the communication.

R Doug Woolerton: We checked. He’s all right.

KEITH LOCKE: The member checked? So the problem is that the key word system sweeps up a whole lot of innocent people.

When the Law and Order Committee was hearing submissions on the Crimes Amendment Bill (No 6), which gave the Government Communications Security Bureau authorisation to intercept communications, including at Waihopai, a Wellington woman by the name of Anna Willing gave evidence to the committee. She said she had sent an email to a friend in America on the eve of the presidential elections. Her friend had been visited by the FBI, which had intercepted the email she had received from that New Zealand woman because it had three words in it: “presidential”, “election”, and “funeral”. Anna Willing had said in that communication that she could not watch the presidential elections on TV because she was going to a funeral, but that combination of words was intercepted, either at this end or at the FBI end—who knows? That communication did lead to an FBI investigation of her friend. That is what such mass interception can lead to.

The Privacy Commissioner had laid out certain proposals, which I have put into Supplementary Order Paper 61. The report back on the bill is very short and to the point. It does not deal with the Privacy Commissioner’s questions, at all. I say that the Government should answer them.

STEVE CHADWICK (NZ Labour—Rotorua): I move, That the question be now put.

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

Ayes 60

Noes 56

Motion agreed to.

Labour 52; United Future 8.

New Zealand National 27; New Zealand First 12; ACT New Zealand 8;Green Party 9.

The question was put that the amendment set out on Supplementary Order Paper 36 in the name of the Rt Hon Helen Clark to clause 14 be agreed to.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 61 in the name of Keith Locke to clause 15(1) be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 9

Noes 108

Amendment not agreed to.

Green Party 9.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 8; United Future 8.

The question was put that the amendment set out on Supplementary Order Paper 61 in the name of Keith Locke to clause 16(1) be agreed to.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 61 in the name of Keith Locke to clause 23(1) be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 9

Noes 108

Amendment not agreed to.

Green Party 9.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 8; United Future 8.

The question was put that the amendment set out on Supplementary Order Paper 61 in the name of Keith Locke to clause 24A be agreed to.

A party vote was called for on the question, That the amendment be agreed to.

Ayes 9

Noes 108

Amendment not agreed to.

Green Party 9.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 8; United Future 8.

A party vote was called for on the question, That Part 3 as amended be agreed to.

Ayes 108

Noes 9

Part 3 as amended agreed to.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 8; United Future 8.

Green Party 9.

Part 4 Provisions relating to other enactments

KEITH LOCKE (Green): The Green Party has an amendment to clause 30 in this part. We want to add a new clause 30A, “Amendment to Privacy Act 1993”. We want to add the following subsection to section 57 of the Privacy Act: “(2) Despite subsection (1), principle 9 applies to the Government Communications Security Bureau.” I should explain here that principle 9 is a principle in section 6 of the Privacy Act, and all Government departments are supposed to abide by it—that is, the agency is not to keep personal information longer than necessary. Principle 9 states: “An agency that holds personal information shall not keep that information for longer than is required for the purposes for which the information may be lawfully used.” This again comes from the Privacy Commissioner. That was one of his suggestions. He thinks that the general principle should apply to all Government agencies, including the Government Communications Security Bureau. He says in his submission to the Intelligence and Security Committee that he talked to the Government Communications Security Bureau about the issue, and it did not object to that change, so I cannot quite understand why the report back from the committee did not include it. The Government should address the matter. The Government has set up a Privacy Commissioner, but it not only ignores his substantial submission in the report back—as the committee has done—but when the bill comes before the House and an MP puts forward amendments based on the concerns of the Privacy Commissioner, the Government does not even bother engaging with that debate. That is being very disrespectful to the Privacy Commissioner.

This part has amendments to a lot of different sections. One of the amendments under clause 28 is the amendment to the Inspector-General of Intelligence and Security Act. I think the role of the Inspector-General is quite controversial. The Inspector-General has quite a few powers to investigate complaints, to review the Government Communications Security Bureau and report annually to Parliament. In the past his reports to Parliament have not been of much use. He says that he has not had many complaints. He does not get many complaints with electronic interception because people do not know that they are being intercepted—that is the nature of the interception. I think he has to go further than that. Today when I asked a question in Parliament about the powers of the Inspector-General of Intelligence with regard to the use of Waihopai for the war in Iraq, Dr Cullen, on behalf of the Prime Minister, replied that the Inspector-General had said that our sovereignty was being upheld by Waihopai. I raise the same point that I raised before: given the nature of the technology of stations like Waihopai, it is very hard to guarantee that our sovereignty is being upheld when there are interceptions using key words.

Under this section, we should consider the role of the Inspector-General. I do not think that his role has been very successful. He has tended to side with the intelligence agencies in the two cases that have arisen—not specifically in respect of the Government Communications Security Bureau, but on the other side of his reporting, in respect of the SIS. He did say that there was nothing wrong with the intrusion into Aziz Choudry’s place. I see that Aziz Choudry later won a court case against the SIS, but his position had to be taken in the face of opposition from the Inspector-General of Intelligence and Security. There is a problem here of accountability that applies to the whole bill, and it would be better in my opinion—and this is the position of the Green Party—if we did not have the Government Communications Security Bureau. It has some positive functions in this bill.

RICHARD WORTH (NZ National—Epsom): We come to the final part of the Government Communications Security Bureau Bill, Part 4. It is headed “Provisions relating to other enactments”. It proposes a host of changes to other legislation. There are amendments to the Crimes Act and the Higher Salaries Commission Act. There are certain changes that Mr Locke has been talking about that refer to the Inspector-General of Intelligence and Security Act; there are amendments to the New Zealand Security Intelligence Service Act, to the Official Information Act, to the Public Finance Act, to the Radiocommunications Act, and to the State Sector Act. Then there is the revocation of secondary legislation—the Crimes (Exemption of Listening Device) Order.

I shall deal with two pieces of legislation that are subject to amendment by Part 4. The first relates to the Crimes Act amendment that is set out in clause 26, and a significant change to section 216B(2)(b) of the Crimes Act. Members opposite are nodding quite clearly, because they have a close and sufficient familiarity with that particular and very tricky provision. Section 216B is headed “Prohibition on the use of listening devices”, and subsection (1) was itself amended in 1999. Basically, the provision creates a term of imprisonment not exceeding 2 years for everyone who intentionally intercepts any private communication by means of a listening device. The particular change in clause 26 proposes to amend section 216B(2)(b) by inserting after subparagraph (iii) a further subparagraph that the draughtsman has identified as subparagraph (iiia). It contains the words: “the Government Communications Security Bureau Act 2001;”. Members opposite will immediately be aware of the huge significance of that change. That change is not necessarily the most significant one, but it is certainly one worth commenting on.

The other issue relates to a change to the Inspector-General of Intelligence and Security Act. That legislation came into force on 1 July 1996, and basically set up the office of Inspector-General of Intelligence and Security with provisions that dealt with the functions of the Inspector-General, complaints, and associated amendments to the Ombudsmen Act and to the Privacy Act. Again, I can see members opposite nodding because of their familiarity with those particular provisions. What is occurring here though is an amendment to section 11(1) of the Inspector-General of Intelligence and Security Act. After paragraph (d) in that section, a new paragraph that the draughtsman has decided to title (da), has been inserted. The actual wording of that paragraph is: “without limiting the generality of paragraph (a), to review the effectiveness and appropriateness of the procedures adopted by the Government Communications Security Bureau to ensure compliance with the provisions of Part 3 of the Government Communications Security Bureau Act 2001 in relation to the issue and execution of interception warrants and computer access authorisations;”.

Those were the two primary provisions in Part 4 that I sought to deal with in the limited time available. However, I do not doubt that members who follow me will want to draw the attention of the Committee to other significant changes in that part.

A party vote was called for on the question, That the amendment set out on Supplementary Order Paper 61 in the name of Keith Locke to insert new clause 30A in Part 4 be agreed to.

Ayes 9

Noes 108

Amendment not agreed to.

Green Party 9.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 8; United Future 8.

A party vote was called for on the question, That Part 4 be agreed to.

Ayes 108

Noes 9

Part 4 agreed to.

Labour 52; New Zealand National 27; New Zealand First 13;ACT New Zealand 8; United Future 8.

Green Party 9.

Bill reported with amendment.

The House adjourned at 9.58 p.m.