Thursday, 18 September 2003

Thursday, 18 September 2003

Thursday, 18 September 2003

Mr Speaker took the Chair at 2 p.m.

Prayers.

Business Statement

Business Statement

Hon MARK BURTON (Deputy Leader of the House), on behalf of the Leader of the House: When the House rises today it will go into a 2-week adjournment. When the House resumes on Tuesday, 7 October, priority will be given to the remaining stages of the Credit Contracts and Consumer Finance Bill, the New Organisms and Other Matters Bill, and the Supreme Court Bill.

Points of Order

Notices of Motion Nos 6 to 10

RICHARD WORTH (NZ National—Epsom): I raise a point of order, Mr Speaker. I seek leave after the close of question time to move with debate notices of motion Nos 6 to 10 standing in my name on the Order Paper.

Mr SPEAKER: Leave is sought. Is there any objection? There is.

RICHARD WORTH (NZ National—Epsom): I seek leave after the close of question time to move without debate notices of motion Nos 6 to 10 standing in my name on the Order Paper.

Mr SPEAKER: Leave is sought to move in that direction. Is there any objection? There is.

Shane Ardern

Hon ROGER SOWRY (Deputy Leader—NZ National): I raise a point of order, Mr Speaker. My understanding was—and maybe you were going to do it after question time—that you would come back to the House today on issues with regard to the charges that Mr Ardern faces in relation to the way that his statement was taken, and whether that would be admissible in the court. Given that the House will be adjourned for the next 2 weeks, I presume that any decision you make during that period of time will not be able to acted on.

Mr SPEAKER: I can assure the member that the member who raised the matter with me by way of privilege—not yourself, of course—will receive an answer as soon as I have finished question time. I will be sending him an answer.

Questions for Oral Answer

Questions to Ministers

Wakapuaka Estuary—Māori Land Court Decision

1. Hon Dr NICK SMITH (NZ National—Nelson) to the Minister of Conservation: Will he be proceeding with the High Court judicial review against the Māori Land Court decision in respect of Māori ownership of the Wakapuaka Estuary north of Nelson; if not, why not?

Hon CHRIS CARTER (Minister of Conservation): Yes.

Hon Dr Nick Smith: Will the Minister give the House and the people of Nelson an absolute assurance that no title will be able to fall into the hands of iwi exclusively for the area of the Wakapuaka Estuary?

Hon CHRIS CARTER: I can give the people of Nelson and this House an assurance that the Government will appeal this decision.

David Parker: Is this case about customary title?

Hon CHRIS CARTER: In the Crown’s view, no. The Crown considers that this case is about whether a boundary was mistakenly drawn to include the foreshore and seabed. It is a case about administrative error, not customary interests. The Crown will argue in the High Court that the Māori Land Court should not have granted title to the mudflats below the high-water mark.

Hon Ken Shirley: Given the Minister’s admission that the Crown will appeal the Māori Land Court decision in respect of Wakapuaka Estuary and, presumably, Ohiwa Harbour, can he give the same guarantee that his Government will not proceed with the transfer of the ownership of the lake beds and the foreshore of 14 Rotorua lakes to local Māori?

Hon CHRIS CARTER: I suggest that the member refer that question to the Minister in charge of Treaty of Waitangi Negotiations.

Hon Dr Nick Smith: Noting that the Government has said that it will pass new laws to clarify ownership of the foreshore, will the Minister now answer my earlier question, which is: will he give this Parliament and the people of Nelson an absolute assurance that the Wakapuaka Estuary will not be allowed to fall into exclusive ownership of local iwi?

Hon CHRIS CARTER: This Government has already given the country an assurance that no title will be given to the foreshore and seabed.

Hon Ken Shirley: I raise a point of order, Mr Speaker. When I sought assurance from the Minister regarding the status of the 14 Rotorua lakes, the reply was that I should refer the question to the Minister in charge of Treaty of Waitangi Negotiations. The Department of Conservation, which this Minister has direct control over, has responsibility for several of those Rotorua lakes, and I ask that he reply to the question.

Mr SPEAKER: If the Minister wants to add to his answer, he could.

Hon CHRIS CARTER: I would like to reinforce the answer that I have already given. I do not have responsibility for treaty negotiations; another Minister is privileged to hold that position. I would urge the member to refer that question to her.

Jeanette Fitzsimons: Has the Minister ever met with Ngāti Tama to ask how their ancestral title can best be recognised, and will he endeavour to negotiate a good-faith outcome with Ngāti Tama that preserves both their ancestral rights and public access to the foreshore?

Hon CHRIS CARTER: That member has asked two questions. No, I have not met formally with Ngāti Tama. In the year I have been privileged to hold the portfolio of conservation, I hope that I have demonstrated a willingness to negotiate with iwi all over New Zealand.

Hon Dr Nick Smith: Can I try for a third time and ask the Minister: can he give an absolute assurance to the House and to the people of Nelson that iwi will not be able to receive private, exclusive title for the area of the Wakapuaka Estuary under the legislation being proposed by this Government—yes or no?

Hon CHRIS CARTER: For the last month or more, this Government has given a clear and consistent message to the people of New Zealand that we do not regard the granting of title to seabed and foreshore as possible.

Stephen Franks: Given his attempt at an unequivocal assurance, would the Minister clarify whether he is correct or the Prime Minister is correct, when the Prime Minister has told us only that there will be no fee simple title, and has refused to rule out any of the myriad other titles under which people can have exclusive rights?

Hon CHRIS CARTER: The assurance that I can give this House, and it is the same assurance that the Prime Minister has given, is that there will be no fee simple title.

Ron Mark: In listening to the answer, I noticed that the Minister was taking direct guidance from the Prime Minister. I seek leave for the Prime Minister to actually answer herself, since she seems to want the Minister to repeat the very words that she was passing back to him.

Mr SPEAKER: That is not a point of order.

Ron Mark: I am seeking leave.

Mr SPEAKER: The member is seeking leave?

Ron Mark: Yes.

Mr SPEAKER: The Prime Minister can do that for herself if she wishes. The member cannot seek leave on behalf of someone else. [Interruption] Order! That is the one time that I give that warning today.

Hon Dr Nick Smith: Noting that the Minister cannot give me the categorical assurance that I seek in respect of the Wakapuaka Estuary, why should the public of New Zealand believe the Government on any other beach, estuary, or foreshore anywhere else in New Zealand?

Hon CHRIS CARTER: I can give that member, and every other member of this House, an absolute assurance that there will be no exclusive title to foreshore and seabed anywhere in New Zealand.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. We have had to endure three repetitions of that statement by that Minister, when we all know that on 23 June the Prime Minister said the very reverse.

Mr SPEAKER: That is not a point of order. It is a point of debate.

Tertiary Students—Student Support

2. BERNIE OGILVY (United Future) to the Associate Minister of Education (Tertiary Education): Why was the discussion document “Student Support in New Zealand” not released until this month, when in January 2002 he announced that the Government would publish a discussion document canvassing options for reform of financial support provided to tertiary students in May 2002?

Hon LIANNE DALZIEL (Associate Minister of Education (Special Education)), on behalf of the Associate Minister of Education (Tertiary Education): In January 2002 the Minister was confident that the document would be published in May. However, competing priorities meant that that could not be achieved. Then a general election intervened, which affected both the time frame and the scope of the work.

Bernie Ogilvy: In the light of his statement that options such as universal allowances and zero fees are simply not affordable, why, after 21 months, does the discussion document fail to canvass alternative options for reform to student support as originally promised, such as a savings scheme to help families put money aside for their children’s tertiary education?

Hon LIANNE DALZIEL: The purpose of the document is to ensure that there is a common understanding of the operation of the system and of the constraints that any Government faces in respect of what has been described as big-ticket items. It is important those things are discussed. Submissions are open until the end of October. I hope all members of this House and those who have an interest in that area take the opportunity to make submissions on the discussion document.

Jill Pettis: Does the discussion document identify measures the Government has already undertaken to provide further financial support to tertiary students?

Hon LIANNE DALZIEL: Yes, the document outlines a range of measures, the two most important of which are committing more than $400 million to make the student loan scheme fairer, in particular, writing off interest whilst studying for full-time and other low-income students, and committing around $440 million for fee stabilisation between 2001 and 2003. I note that the National Party regards the fees as “artificially low”.

Simon Power: Is he really surprised that student leaders described the student support review as “a kick in the guts” and promised the Government a venomous campaign to acquaint it with student anger, when the student support review was so late and offered so little?

Hon LIANNE DALZIEL: I encourage all those students to make submissions in respect of the discussion document. It does give an opportunity for all students to do what a Government has to do and that is to identify what the priorities are. That member should wait until the student loan scheme annual report is published next month. He will find that it will have some very interesting statements about the impact of Government policies that we have already introduced on matters like student debt.

Hon Brian Donnelly: If the consultation process clearly demonstrates demand for a universal student allowance over and above some of the initiatives already undertaken, will the Minister pledge to do everything within his power to advance such a policy through the Budget process?

Hon LIANNE DALZIEL: As the member quite rightly identified, such a matter would have to go through the Budget process and that is why it is so important that students do take the time to establish what their priorities are.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Minister was asked whether he would do—in this case as Minister—everything in his power in respect of that budgetary process. The Minister made no attempt to answer the question whatsoever, but gave just a stupid comment about students being consulted. This is just demeaning Parliament. Would she answer the question that she was asked.

Mr SPEAKER: She did address the question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With respect, she did not address the question.

Mr SPEAKER: I have said she did. Please be seated.

Rt Hon Winston Peters: Let me finish my point of order.

Mr SPEAKER: Please be seated. I have made a ruling and that ruling stands. It might not satisfy the member—a lot of answers do not—but there has to be further opportunity to carry on thereafter.

Rt Hon Winston Peters: I seek a point of clarification, Mr Speaker. Will the Minister use her best endeavours with regard to the budgetary process or not? We are not any wiser about that issue, and that was the question my colleague asked.

Mr SPEAKER: All I can say is that the Minister addressed the question. If she wants to add anything else she can.

Hon LIANNE DALZIEL: I am not going to prejudge the outcome of the consultation.

Hon Roger Sowry: I raise a point of order, Mr Speaker. I draw your attention to the fact that you are now on to question No. 2 today, and in both cases you have had to ask Ministers to add something more. When they have added something more, it has been after your intervention. We are at a point where they have given an answer that should have been given upfront in the beginning. So I want to raise with you, Mr Speaker—and the senior Government whip can shake his head—that if Ministers are not going to answer questions, then this is going to continue.

Mr SPEAKER: I have to judge what the situation is in this regard. If I think that the Minister should add a little bit more I will say so, otherwise I will carry on.

Nandor Tanczos: What justification can the Minister give the House—on the day before Suffrage Day—for a scheme where women take twice as long as men to repay their loans, resulting in an education that costs them more than it costs men but leads to lower salaries than men’s; a scheme that has been criticised by the United Nations Committee for the Elimination of Discrimination Against Women?

Hon LIANNE DALZIEL: All of these matters will be taken into account. I note that we did not introduce the student loan scheme.

Bernie Ogilvy: In the light of the fact that the discussion document addresses eligibility for allowances, will the Government look at shifting the parental income threshold, which has not changed since 1992 and now excludes the 40 percent of New Zealand households with a combined income of over $50,000; if not, why not?

Hon LIANNE DALZIEL: As I said in response to an earlier question, this is a matter for the Budget process after the question of the discussion document is resolved. Therefore, people are invited to make submissions on these important issues. The member’s point is a very good one, and I am sure it will be taken into account.

Bernie Ogilvy: In the light of the fact that one of the principles in the discussion document is to ensure consistency with the wider social assistance system, does he think it is fair that a student allowance scheme is based on the parental income of students up to the age of 25, when the same income testing is not applied to those under 25 years who are on an unemployment benefit, who might be just as reliant on parental support, yet by comparison are getting money for nothing?

Hon LIANNE DALZIEL: I recall that being a point that we made at the time the scheme was introduced and that we always suspected that the National Party intended to introduce parental means-testing for benefits.

Orthopaedic Surgery—Counties Manukau

3. Hon ROGER SOWRY (Deputy Leader—NZ National) to the Minister of Health: What progress has been made to rectify the inequality of access to elective orthopaedic surgery in Counties Manukau compared to the rest of the country?

Hon ANNETTE KING (Minister of Health): I have made additional one-off funding of $5 million available to the Counties Manukau District Health Board to assist with reducing the inequality of access to elective orthopaedic surgery in its catchment area compared with the rest of the country. That will assist improved access to elective orthopaedic services for the population in its district.

Hon Roger Sowry: Why then have people like John Power been waiting 2 years for a knee replacement operation while two operating theatres in Counties Manukau have lain idle, and why, after she advised that World War II veteran’s general practitioner to contact Middlemore Hospital, has he subsequently been dumped from the waiting list?

Hon ANNETTE KING: The Browns Road surgical facility, built under a National Government, was never funded. I am pleased to say that the money we are putting in will ensure that operations can be carried out in that area, and far more people will receive operations than have in the past.

Steve Chadwick: Has the Minister seen any reports with regard to problems with elective surgery experienced by Counties Manukau?

Hon ANNETTE KING: Yes. There has been a reduction of over 1,600 people waiting longer than 6 months since 1998-99. Problems such as high acute demand were compounded in the past by underfunding, which has been addressed by the population-based funding formula that was introduced this year. This has seen the Counties Manukau District Health Board receive a boost of $57 million in the last Budget, of which $28 million was to address historical underfunding.

Heather Roy: In respect of access, can she deny that under her funding formula, one board gets $585 for a 40-year-old white male, while another board gets $1,536 for a 40-year-old Māori or Pacific Island male on the same income in a poorer area—almost three times more money, based purely on location and race, regardless of health need?

Hon ANNETTE KING: No, because the population-based funding formula takes account of a number of factors, including rurality, socio-economic status, and age—not like the old formula, which was based purely on population numbers.

Rodney Hide: I raise a point of order, Mr Speaker. When she was sitting down, the Minister of Health did call out “racist”. I take grave exception to that, particularly from a Minister. I think she should be asked to withdraw and apologise.

Mr SPEAKER: The member, if she did call that out, will withdraw and apologise.

Hon ANNETTE KING: Speaking to the point of order—

Mr SPEAKER: No. Did the member use the word?

Hon ANNETTE KING: Yes.

Mr SPEAKER: Please withdraw and apologise.

Hon ANNETTE KING: I withdraw and apologise. I raise a point of order, Mr Speaker. As I was sitting down Mr Prebble yelled out “race based”; I replied “racist”. [Interruption]

Mr SPEAKER: I do not need any further assistance.

Hon Richard Prebble: I did not raise a point of order; I just took it that the Minister of Health was acknowledging that the health system is racist.

Mr SPEAKER: No, no. The member knows that he is not being helpful in that regard, at all. [Interruption] He often is helpful; I acknowledge that.

Hon Roger Sowry: Given that the Minister of Health has stated: “The buck stops with me.”, will she take responsibility for the 1,853 Counties Manukau patients who have been dumped off the waiting list without having the surgery they need to alleviate the pain; and what will she do to ensure that Mr Power, who cannot now walk to his front gate, gets his operation, instead of being dumped off the list?

Hon ANNETTE KING: When the booking system was established under a National Government, 58,000 people were so-called dumped off waiting lists. That member knows that people nowadays are assessed on their relative priority, and the person who needs an operation most gets it first. I am pleased to say that whereas under his watch 5,162 people were waiting longer than 6 months, we have managed to reduce that, plus put additional money in to address that issue.

Hon Roger Sowry: I seek leave to table documents that show Mr Power is no longer on the waiting list for having waited over 6 months, because the Minister has dropped them altogether.

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

Compliance Costs—Small Business

4. LUAMANUVAO WINNIE LABAN (NZ Labour—Mana) to the Minister of Revenue: What proposals has the Government made to reduce tax compliance costs for small businesses?

Hon DAVID CUNLIFFE (Associate Minister of Revenue), on behalf of the Minister of Revenue: The Government yesterday released a discussion document on simplifying tax for small businesses. Proposals included offering a subsidy to assist with payroll agents, a discount for business people paying provisional tax in their first year, basing provisional tax on GST turnover, and simplifying the payment of provisional tax.

Luamanuvao Winnie Laban: What other steps has this Government taken to simplify taxation compliance?

Hon DAVID CUNLIFFE: Tax simplification for small business is one more step of a comprehensive tax simplification process that this Government has undertaken. It includes debt and hardship provisions, use of money interest provisions, adjustments to trading stock, and today Dr Cullen announced that the tax rules on payments for non-resident contractors would be simplified.

Dr Don Brash: Is the Minister aware of the KPMG Peat Marwick - Business New Zealand survey of compliance costs released just 3 weeks ago, which showed that in excess of 98 percent of the 760 businesses surveyed found compliance costs had increased over the last 12 months; and when will the Government get really serious about dealing with these compliance costs, especially those for tax, occupational safety and health, and employment relations?

Hon DAVID CUNLIFFE: I respectfully suggest the member has another look at that Business New Zealand survey. He will see that in 13 out of 18 categories, up to 80 percent of businesses said that their compliance costs have either stayed the same or been reduced.

Peter Brown: Noting those answers, will the Minister tell the House what favourable tax regime the Government is proposing for New Zealand shipping, or will it reinstate cabotage?

Hon DAVID CUNLIFFE: I am pleased to confirm to the member that should a shipping business fall into the category of a small business, it will qualify for all the advantages of the tax package just announced.

Gerrard Eckhoff: Will the Government’s proposal to reduce compliance costs to small business extend to the dumping of the methane emission tax, which is opposed by upwards now of 70,000 farmers and the public; if not, why does the Government not release income derived from carbon credits now available to industry as a way of implementing the stated aim of reducing compliance costs to industry?

Hon DAVID CUNLIFFE: If the member wishes to have a discussion about the emissions levy, I suggest he address it to the relevant Minister. I am advised that Federated Farmers have been invited to participate in the allocation of those funds, but have so far declined.

Gordon Copeland: Has the Minister considered directly offering a payment equivalent to that being offered to payroll agents to those small-business owners who choose to do their own payroll and GST returns; if not, would he be prepared to give it his consideration, given that it is a good idea?

Hon DAVID CUNLIFFE: A good common-sense question deserves a common-sense answer—that is what this package is. There are reasons that payroll agents are able to generate additional savings. They are specially qualified, have all the resources necessary at their disposal, and both the taxpayer and the general public benefit from those efficiencies.

Hon Richard Prebble: Has the Government given consideration to really lowering the tax compliance costs of small businesses by reducing the amount of tax that small businesses must pay with the introduction of a low flat rate of tax; if not, why not?

Hon DAVID CUNLIFFE: A constituent of mine who lives not far from the honourable member runs a corner dairy. Not long ago he needed a heart bypass operation. The reason we are not lowering tax rates is that the same people who run businesses need schools and hospitals.

Dr Don Brash: I seek leave to table the KPMG Peat Marwick - Business New Zealand report on compliance costs.

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

Police—Separation of Services

5. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Police: Is it important to maintain separation between the administrative, operational, and political arms of the Police; if so, why?

Hon GEORGE HAWKINS (Minister of Police): It is important for there to be no political interference in the activities of the police. That was reinforced in 1993 by the Solicitor-General in an authoritative statement on the position in New Zealand, which said that the Minister may not direct the commissioner in his or her duty to enforce the criminal law.

Rt Hon Winston Peters: If that is true, and if that is the precedent, why was the file of Danny Alkema, who rode a trail bike on the grounds of Parliament in May of this year to protest the Government’s law and order policies, taken from the Lower Hutt police station to Wellington on the same day I raised that case in Parliament; is that not an extremely suspicious coincidence or is it just a blatant act of further political dabbling in the affairs of the police?

Hon GEORGE HAWKINS: I have no role at all in terms of where police files go, and I am not about to help your conspiracy theory.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You might find that answer acceptable, though, of course, it is an accusation about yourself, not about me—

Mr SPEAKER: There was a comment made in the second person. However, I presume the Minister was not referring to me, but to Mr Peters.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. He used the word “your”, and you know full well that it is you he is talking about in terms of our Standing Orders and parliamentary precedents. Secondly, if he was referring to me, that is out of order, as well. I am not talking about a conspiracy; I am talking about facts.

Mr SPEAKER: If I were to interrupt every single person who made an error of grammar I would not have many people answering questions. The member was in error in what he said, but I accepted that his intention was clear. He has now said what he meant to say, and that is where that matter rests.

Georgina Beyer: During the Minister’s time as Minister of Police, has he ever instructed the police on any criminal case?

Hon GEORGE HAWKINS: No.

Richard Worth: Would it be grossly improper for a senior police officer to have discussions with the Minister’s private secretary for police concerning politically sensitive issues, including the laying of charges against members of Parliament?

Hon GEORGE HAWKINS: My private secretary for police does not get involved in these matters. For example, there was a case where the leader of New Zealand First did not pay a taxi fare. We then had a newspaper article sent to Parliament saying that two people in Otago were fined $300, plus court costs of $30, for not paying a taxi fare. I did not interfere in either case.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. That was just a personal attack. It had nothing whatsoever to do with the question that was asked. If that is the way you are going to let this House run, I warn members over there that they will get all they ever ask for—they can be certain of that. If you want to try that sort of trick, you will get whatever you want.

Mr SPEAKER: Do not say if I want to try; I have not done anything.

Rt Hon Winston Peters: Your job was to stop him when he was clearly not making any attempt at all to answer the question.

Mr SPEAKER: The end of the answer was out of order; the Minister should not have gone along that line. He started off OK in addressing the question, but thereafter he went out of line.

Richard Worth: I raise a point of order, Mr Speaker. The result was that the question was not answered. It started with the words, “Would it be grossly improper for”, and the Minister made no effort to answer that direct question.

Mr SPEAKER: Perhaps the Minister could just answer that one part.

Hon GEORGE HAWKINS: I do not get involved. My staff do not get involved in criminal actions, nor do they interfere in criminal cases. I think that that member over there realises that.

Rt Hon Winston Peters: Did any member of the Minister’s staff in his office see the details of that file either before or after Tuesday, 16 September; and have any discussions between staff in his office and the police taken place since then about that file?

Hon GEORGE HAWKINS: I can say that my office does not get police files. We do not read them. I have no interest in them. I have confidence that the police will do their job.

Rt Hon Winston Peters: To the Minister’s knowledge, did any members of the police have discussions with the Speaker, or anyone in his office, since the file was pulled from the Lower Hutt police station on Tuesday, 16 September; and will he table that file, and the telephone logs recording the timings of those messages, in the House?

Hon GEORGE HAWKINS: I do not have that file, and I do not have the log of phone calls to the Speaker.

Rt Hon Winston Peters: Since Danny Alkema is happy for this document to be tabled, I ask the Minister whether he will make it available to this Parliament—instead of having some sort of snow job where the details are not given to anyone and the decision is handed down from high, and that is it. We want the facts here.

Hon GEORGE HAWKINS: I am not about to start getting police files, to satisfy the political ambitions of other members.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Do you think that is an adequate answer? This House wants to know what happened, because the two stories that have been put out in public are at gross variance and cannot be reconciled. I have asked for the police file and the log of a man who came to me and was happy for those details to be tabled.

Mr SPEAKER: I say to the member that I have already made a ruling about part of that issue. I thought the Minister most definitely addressed that particular question. He gave an answer that was quite explicit, and I understood it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am asking whether the Minister will, with Danny Alkema’s consent, have that information tabled. To get up and say that he does not handle those files is not an answer at all. I am asking whether he will, with that person’s consent, obtain the file and table it in the House.

Mr SPEAKER: I thought the Minister said he was not prepared to. That was my clear impression of what he said, and it is also the impression of those about me.

Heart Surgery—Delays

6. HEATHER ROY (ACT NZ) to the Minister of Health: Does she stand by her reported comments in the Press of 16 February 2002 that she took full responsibility for the recent delays in heart surgery in Christchurch, which clinicians say have resulted in the deaths of patients, and does she take equal responsibility for the recent delays in Wellington?

Hon ANNETTE KING (Minister of Health): The comments relate to the situation in February 2002 in the South Island, when I was informed that cardiac services were underfunded. I responded immediately by allocating an extra $2 million to South Island cardiac services. In relation to the second part of the question, there is no longer a backlog of cardiac patients waiting in Wellington. With the unfortunate exception of one patient who had his surgery delayed five times due to other patients’ acute needs and his own complications, the backlog was cleared over a relatively short period of time, and I am pleased to say that that patient has also now had his operation.

Heather Roy: Why was Upper Hutt man Mike King’s surgery at Wellington Hospital cancelled five times since March this year when, less than 1 kilometre away, the private Wakefield Hospital could have done his surgery for certain within 2 days; and on what date did ideology become more important to this Government than humanity?

Hon ANNETTE KING: Ideology over humanity was not a consideration. I am informed by the Capital and Coast District Health Board that the chief executive officer made it clear that that patient could go to Wakefield Hospital. The reason the person’s surgery was delayed was that there were people who had acute needs—in other words, people who had had a heart attack—who needed their surgery sooner. That person was on the elective waiting list.

Moana Mackey: Has access to cardiac surgery in New Zealand improved in recent years?

Hon ANNETTE KING: Yes. Over the last few years, access to cardiac surgery has vastly improved. In fact, almost 2,000 more heart operations were performed in 2001-02 than in 1996-97. At the Capital and Coast District Health Board, that meant the number of heart operations performed each year more than doubled over that period, and, in the South Island, 580 more heart operations were provided in 2001-02 than in 1996-97. This year the Canterbury cardiac waiting list has been reduced by 40 percent.

Dr Paul Hutchison: When the Minister said “The buck stops with me.”, and when she said: “We’ll look at what other capacity we’ve got around New Zealand that might not be the public sector. We still pay for them.”, did she really mean it, or will cardiac patients around New Zealand continue to die unnecessarily because of her inconsistent policies and her loose promises?

Hon ANNETTE KING: I think the member is not quite up to date—

Hon Member: Yes, he is.

Hon ANNETTE KING: No, he is not. In fact, in Canterbury 45 publicly funded operations are being done privately this year. The member obviously was not aware of that. We made it clear at the very beginning of our becoming the Government that we had no objections to public hospitals providing services in private hospitals, so long as they maximised the capacity within the public system. Those protocols were set out by this Government in the year 2000.

Sue Kedgley: Does the Minister agree that part of the long-term solution to heart surgery waiting lists is to reduce the risk factors that cause heart disease; hence, what would she say to people who have swallowed the tobacco industry line that second-hand smoke is not a cause of heart disease?

Hon ANNETTE KING: I would point them to exceptionally good international research, and to research in New Zealand, that shows that second-hand smoking does affect New Zealanders. In fact, it has killed around 400 New Zealanders a year.

Judy Turner: Does the Minister agree with the comment from John Simpson, of the Australasian College of Surgeons, that if surgery were regularly postponed, more beds or a more efficient booking system would be needed; if so, which of those two options does she believe is the more urgent?

Hon ANNETTE KING: It is unfortunate when surgery is postponed. However, it would be a very poor system that would not take first those in the most acute need. So providing surgery to those who need it first, and prioritising that, is, I think, part of a system that is much better than it was in the past.

Heather Roy: Why is it that since the Minister has become Minister of Health, the media have evolved to become the new patient advocates, so that if people’s cases are in the paper, on the radio, or on television, they get their surgery, but everyone else continues to have to wait indefinitely?

Hon ANNETTE KING: That is totally incorrect. However, I do agree with the member, as she wrote in a recent media diary, that the Minister of Health should not be responsible for every individual case—and I certainly am not responsible for every individual case. But I have given two examples today where the buck did stop with this Minister through my providing not only money for heart operations in the South Island but $5 million for reducing the waiting times in the orthopaedic area of the Counties Manukau District Health Board.

Television New Zealand—Edwards at Large

7. Hon MURRAY McCULLY (NZ National—East Coast Bays) to the Minister of Broadcasting: Is he satisfied that, in relation to the programme Edwards at Large, Television New Zealand Limited has always set and maintained “the highest standards of programme quality and editorial integrity.” as set out in its charter; if not, why not?

Hon PAUL SWAIN (Minister of Communications):, on behalf of the Minister of Broadcasting: Generally, yes.

Hon Murray McCully: Can he explain whether the editorial integrity required by the charter will generally permit television presenters expressly to repudiate a formal apology tendered personally by the chief executive of Television New Zealand in relation to an admission of a serious breach of broadcasting standards by Dr Brian Edwards, or is this a special concession being made by the Prime Minister’s friend Mr Fraser for the Prime Minister’s media trainer Dr Edwards?

Hon PAUL SWAIN: In relation to the second part of the question, the answer is no. But the point is that the Minister has a relationship with the board of Television New Zealand, and it is the board that has responsibility for the chief executive and internal matters. That is a longstanding relationship. It is a shame that member did not follow it when he was Minister of Tourism, because he was sacked for dabbling in operational matters—and rightly so.

Russell Fairbrother: What is the process that viewers can use to make formal complaints about television programmes?

Hon PAUL SWAIN: If a viewer considers that a programme has breached one of the statutory broadcasting standards and wants to make a formal complaint, the viewer must complain, in the first instance, to the broadcaster. If the viewer is dissatisfied with the broadcaster’s response, the viewer can, within 20 days of receiving the broadcaster’s response, refer the complaint to the Broadcasting Standards Authority for investigation and review.

Rodney Hide: In respect of the Edwards show, does the Minister agree with Dr Brian Edwards that the funding from New Zealand On Air of $190,000 is “chicken feed”, and in light of Dr Edward’s view of what is chicken feed and what is not, does the Minister know just how much of the Prime Minister’s $2.5 million leader’s fund is paid out to Dr Edwards as the Prime Minister’s media coach and spin adviser?

Mr SPEAKER: The Minister has no responsibility for the second part of the question, but he may answer the first part.

Hon PAUL SWAIN: That member will know that decisions on funding are nothing to do with the Minister. I am advised that the Edwards show in which Mr Hide was involved received the lowest rating of any of those shows. It looks like most New Zealand people have tuned out of the ACT channel.

Sue Kedgley: How can New Zealanders be sure that TVNZ is meeting its charter obligations to maintain the highest standards of editorial integrity, and to be impartial and independent in its current affairs coverage, when its flagship current affairs programmes are sponsored by a bank and a car manufacturer?

Hon PAUL SWAIN: The memorandum of understanding between the Minister of Broadcasting and TVNZ requires the organisation to provide the Minister of Broadcasting with quarterly reports on the use of the charter-related funding. That is the appropriate mechanism.

Hon Murray McCully: Is the Minister aware that Mr Ian Fraser, the Chief Executive of Television New Zealand, completely bypassed the programme-commissioning process, which is laid down within Television New Zealand, to appoint personally the Prime Minister’s media adviser Dr Edwards with his own television programme—a programme that is now being exempted from the normal broadcasting standards process—and does the Minister regard that as acceptable within the charter?

Hon PAUL SWAIN: I am not sure whether the Minister of Broadcasting is aware of that, but if the member has a complaint about that issue, he knows where he can go. There are complaints processes, and the Broadcasting Standards Authority is the appropriate body.

Rodney Hide: I seek the leave of the House to table Television New Zealand’s apology to me for Dr Edwards’ rough treatment of me, and also the regret expressed by Mr Ian Fraser that he allowed the PM’s media adviser to have me on his show.

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

Hon Richard Prebble: I seek the leave of the House to table a log showing that tens of thousands of people have logged on to the ACT party’s website to see the live screening of this particular interview.

Document not tabled.

Electricity Commission—Priorities

8. MARK PECK (NZ Labour—Invercargill) to the Minister of Energy: When will the new Electricity Commission first meet, and what will be its immediate priorities?

Hon PETE HODGSON (Minister of Energy): The Electricity Commission is meeting for the first time today. Its top priorities are to improve New Zealand’s electricity supply security, to get necessary transmission grid investment under way, and to improve competition amongst retailers and in the hedge market.

Mark Peck: As far as improving supply security is concerned, will the commission be limited to contracting new generation or might it also consider how to reduce demand?

Hon PETE HODGSON: The latter. If it is cheaper and more effective to meet New Zealand’s electricity supply needs through demand reductions and better energy efficiency, then the commission will have this option open to it.

Jeanette Fitzsimons: Does the Minister agree that if the commission is required to provide sufficient reserve capacity to meet demand in a one-in-60-year dry year, that will increase power bills more than would a solution that incorporated some special conservation measures into the dry year plan; if so, will he amend the Government policy statement so that it does not outlaw conservation as part of a dry year security plan?

Hon PETE HODGSON: The member is confusing ordinary conservation with conservation in difficult times. The answer to the first part of the supplementary question is to indicate to her that the commission is entitled to use the full range of demand side measures available to it, including a conservation campaign, when there is no shortage of water in the lakes.

Gordon Copeland: In the event of a dispute arising between, say, Transpower and a local line company concerning the transmission of electricity, will the commission have the authority to tell one or the other of them to get on and make the investment, so that electricity can reach consumers?

Hon PETE HODGSON: Yes, it will, as soon as it has completed an early piece of work that it must do, which is resolving transmission-pricing methodology. That work must be resolved, according to the Government policy statement, by December of next year.

Immigration Service—Confidence

9. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Immigration: Does she have confidence in the systems of the New Zealand Immigration Service?

Hon LIANNE DALZIEL (Minister of Immigration): Generally speaking, yes. However, systems can fail when people give undertakings that are not honoured, such as occurred with the Tongan rugby players, who have brought shame on themselves, their community, and their country. I support the Tongan community leaders who are calling for them to come forward and leave New Zealand now.

Rt Hon Winston Peters: I wonder whether the Minister could focus her mind on something that is worse than the Tongan situation—that is, how can she have any confidence in the system generally, or otherwise, when immigrant beneficiaries such as Mr Narongdet Sanguankwamdee are being allowed to skip the country for months, still receiving thousands in student allowances due to the Immigration Service failing to notify the Ministry of Social Development of their movements, and is this yet another example of this incompetent Minister proving that she is out of her depth, at cost to the taxpayer and New Zealand students alike?

Hon LIANNE DALZIEL: No, I have no details about that particular case. If the member would refer these matters to my office prior to question time I could actually come down with an answer to a particular case. I note the fact that that was exactly the answer that was given to me when I was the Opposition spokesperson on immigration, by the then Minister of Immigration when he was Deputy Prime Minister.

Hon Mark Gosche: Does the Immigration Service have systems in place to address the backlash New Zealand experiences as a tourist and student destination when Asian media report about anti-Asian sentiment in New Zealand?

Hon LIANNE DALZIEL: The New Zealand Immigration Service has systems in place to identify trends and applications for visas, both tourist visas and student visas, and will continue to monitor the situation closely. New Zealand benefits significantly from international education and tourism from Asia, and anyone who would put those industries at risk for the sake of a headline does not represent mainstream New Zealand opinion, nor is he putting New Zealand first.

Rt Hon Winston Peters: Was her original answer a plaintive plea for me to take over her job, which I am sure I could do 1 hour a day, and why is it wrong for a member of Parliament to ask why a man in Thailand is being paid by the New Zealand taxpayer when he does not study here, does not live here, has no intention of coming back here until January next year, and all the records, bank account numbers, and air flight numbers are known to members of the community, but never to her as the Minister of Immigration?

Hon LIANNE DALZIEL: When the member puts down a question as to whether I have confidence in the systems of the New Zealand Immigration Service and I am able to say “Generally speaking, yes.”, I expect the member to provide the information in advance of question time so that I can come down to the House with an answer. There are several cases, but the vast majority of people who come to this country to live, to work, to study, or to play, are good, decent, hard-working people, and they do not need to be attacked by that pathetic member.

Rodney Hide: I raise a point of order, Mr Speaker. I know that you often do not hear what happens down the back, but when Mr Peters was asking his question the Hon Mr Cunliffe shouted out very loudly from his seat. I doubt you heard it. We certainly did. It was certainly off-putting, and I suggest that he has not learnt his lesson from yesterday.

Mr SPEAKER: Well, I did not hear it. I will be listening very closely.

Rodney Hide: It is actually not necessary for you to hear a comment, for a member to be put off his question. That is one of the things that happens from the cross-benches—[Interruption]

Mr SPEAKER: Order!

Rodney Hide: There they go again. You have one rule for us. I am on my last ruling, but they can shout out.

Mr SPEAKER: Would the member who made that interjection leave the Chamber.

Hon Chris Carter withdrew from the Chamber.

Mr SPEAKER: I have ruled on the point of order that on this occasion I did not hear the interjection.

Rodney Hide: I raise a point of order, Mr Speaker. Is it the case that a person can sit on the cross-benches and interject on a questioner, and it is OK as long as the Speaker does not hear it?

Mr SPEAKER: Let me put it this way. I try to hear a lot of what happens in the House. Occasionally, on all sides of the House, one deliberately does not hear everything, because occasionally one wants to let the thing flow. I did not think that Mr Peters on this occasion was in any way put off from his question.

Rt Hon Winston Peters: You are quite right. I was not put off at all. I did not object, because I understand that Mr Cunliffe suffers from a thing called recognition hunger and needs to be heard frequently.

Hon Murray McCully: How does the Minister expect the public to have confidence in an Immigration Service that can circulate a memorandum asserting an agreement to “lie in unison” amongst 300 staff, with none of them batting an eyelid, and which then proceeds to have its most senior officers tell barefaced lies to the Ombudsman about the existence of that memo?

Hon LIANNE DALZIEL: That member is perfectly well aware that there was no memorandum. It was a media log that was prepared on a daily basis. It has a number of such commentaries attached to it. They were throwaway lines. All of the rest of them have been throwaway lines. That member does not want to see any of the other media logs, because it would prove the case that this particular one that he already had happened to substantiate a particular point of view that National wanted to raise. It is the most pathetic attack on public servants I have ever heard in this House.

Psychiatric Services—Auckland

10. SUE BRADFORD (Green) to the Minister of Health: What is her response to comments by an experienced Auckland psychiatric nurse that the practice of “risky discharges” from Auckland acute units to make room for new patients is “insane”?

Hon ANNETTE KING (Minister of Health): Clinical decisions about what care is required for an individual patient, and whether that care needs to be delivered in hospital, can be made only by the clinicians responsible for the care of that patient. However, I am advised that all discharges follow strict criteria based on clinical assessment by a discharge team.

Sue Bradford: How can community care of seriously unwell people possibly be expected to work adequately when there is nowhere to put such a person on discharge from an acute unit, except into a boarding house in west Auckland that sleeps 18 people in two houses, four caravans, and a sleepout?

Hon ANNETTE KING: In assessing the needs of a patient, there are three options to clinicians in terms of care. The first is that a patient can have high-level care if that is needed and go to another unit that provides long-term rehabilitation. Second, a patient could go to a second level that is run by a non-profit organisation, with varying levels of support and clinical follow-up. If the clinicians believe that patients should have another level of care, which is a lower level of care, there are at least three different interventions. The clinicians decide what the level of care will be within the criteria set and the assessment made.

Dianne Yates: What is the basis of clinical decisions on what care is required for an individual patient discharged from an acute unit?

Hon ANNETTE KING: Decisions will be informed by best practice, including developments in care delivery in the community, and by the needs of the patient, relative to those of other patients.

Hon Roger Sowry: When mental health services in Auckland have historically been under pressure, why has the Taharoto Mental Health Unit had its beds reduced by the Minister from the planned 41 beds to now just 35?

Hon ANNETTE KING: The member asked why have they been under pressure. The reason they have been under pressure for a long time—

Hon Roger Sowry: I raise a point of order, Mr Speaker. I did not ask why they had been under pressure. I will ask my question again. I asked why, when mental health services in Auckland have been under pressure, has Taharoto Mental Health Unit had its beds reduced by her from the planned 41 to 35.

Mr SPEAKER: I heard the question. I have heard the question a second time. I am sure the Minister will go on to answer it.

Hon ANNETTE KING: The reason that mental health services in Auckland have been under pressure is that funding for Auckland was less than provided, for example, in the South Island, and this goes back to the days of regional health authorities. Fortunately, this Government decided to increase funding to the Auckland and Midland areas by $12.8 million for this financial year. That will go some way towards bringing those areas up to the level of funding for the South Island. None of it is optimal, but in terms of the beds talked about by the member, the configuration of beds in Auckland is part of an overall strategy to provide what is required for Auckland, and that is a mixture of acute in-patient beds, community step-down beds, and community care. What they have not had is the correct mix of those services.

Sue Bradford: To what extent does the Minister believe that the action plan resulting from last year’s special review, which had as one key goal additional accommodation with intensive support and crisis respite services, has been achieved, given the ongoing and dangerous situation in the Waitemata District Health Board and Manukau District Health Board areas, as revealed in the New Zealand Herald this week?

Hon ANNETTE KING: As the member is aware, part of the work that would be done to address those serious problems in Auckland was to get regional coordination. The first part of that was to appoint a regional director, Derek White, whom I understand the member will meet in the very near future. He informs me that more intensive care unit beds have been opened in Auckland, there have been more packages of care, and more resources have been put in place. The situation is improving. The Mental Health Commission stated in its report in April this year: “We have made significant gains in a relatively short time. However, further gains need to be made.”

Sue Bradford: Is the Minster aware of the recent briefing held for Auckland Labour MPs by social service agencies concerning the crisis in mental health housing and support services in Auckland, and if she has not already, will she immediately adopt the recommendation of setting up a working-group from the health, housing, and welfare sectors to help speed up real solutions to the current crisis?

Hon ANNETTE KING: There are a number of issues there that relate not only to health but are intersectoral issues, and I am very supportive of different agencies working together. Intersectoral issues relate to housing, employment, and health services. I am supportive of them working together, not only in Auckland but in other parts of New Zealand. However, I think Auckland will have the best opportunity to make improvements, because it already has in place coordinations across a number of sectors and particularly the health sector.

Court Fines—Defaulters

11. MARTIN GALLAGHER (NZ Labour—Hamilton West) to the Minister for Courts: What new technology is the Department for Courts going to use to assist fines defaulters to pay their fines?

Hon RICK BARKER (Minister for Courts): The department will be trialling text messaging to fines defaulters between November this year and January 2004. The trial will involve collection staff sending payment and action-day reminders by text to fines defaulters who have text-capable mobile phones. This group is predominantly male, aged between 15 and 30 years, and they owe the greatest amount of overdue fines, usually drivers with licence offences. Texting those people will be a much more proactive method taken by the department.

Martin Gallagher: Why is this form of messaging expected to be successful with this group?

Hon RICK BARKER: Market research shows that a high percentage of people in the 15-30 year age group use their mobile phone as their primary communication medium. New Zealand has 2 million mobile phones, and text messaging is one of the main forms of communication. It has been described by the research as more intimate and personal than other forms of communication, and more likely to evoke a response. Some day I expect that people will be able to pay their fines by telephone.

Ron Mark: Does the Minister stand by his department’s stated strategic direction for 2000-05 “to help make New Zealand a more just and a safer place through the promotion of law-abiding behaviour by ensuring compliance with monetary orders”; if he does still stand by that statement, can he then explain to the House how a female driver can, between May 2000 and August 2003, be permitted to rack up a total of 60 traffic infringements, totalling a massive $22,712 in fines—as detailed in the court documents that I am holding—without ending up in jail?

Hon RICK BARKER: Yes, I do stand by the statement, and, yes, I do acknowledge that there is an issue about people racking up fines and there being no central place to collect them immediately. There are delays from when the fines are imposed by the police. The police try to collect fines themselves, the fines are put on to the court, and there are other authorities that can put fines on. It is an issue that I am looking at. I would hope to have an answer for the House within the next 6 months as to what we can do to improve the process.

Airways Corporation—Wilsons Rd Primary Radar

12. SIMON POWER (NZ National—Rangitikei) to the Minister for State Owned Enterprises: Does he believe the decision by Airways Corporation to shut down the Wilsons Road primary radar will compromise the safety of air lanes; if not, why not?

Hon MARK BURTON (Minister for State Owned Enterprises): No, I do not. In any event, as Minister for State Owned Enterprises I have no responsibility for the Civil Aviation Authority.

Simon Power: Can the Minister guarantee that once all the changes to Airways Corporation operations at Ohakea have taken place, the level of safety and the control of the air lanes of New Zealand will be exactly as they were before the changes; if not, why not?

Hon MARK BURTON: As I indicated, I have neither operational responsibility for the Airways Corporation—

Simon Power: Will Airways keep it?

Hon MARK BURTON: If the member wants an answer, then let me answer it—nor do I have responsibility for the Civil Aviation Authority, which is responsible for safety of the airways. I can assure the member that the configuration of radar for that part of the country is being managed in a manner consistent with all the secondary radar systems across New Zealand.

Lynne Pillay: Has the Minister seen any reports on the performance of the Airways Corporation?

Mr SPEAKER: No, that question is—

Hon MARK BURTON: I raise a point of order, Mr Speaker. To be clear, you may have misheard my first answer. I said that I have no responsibility for the Civil Aviation Authority, which is the agency that has responsibility for airways safety. This question was about the Airways Corporation, for which I do have responsibility.

Mr SPEAKER: I do not need any assistance on this matter. The supplementary question was far too wide of the original question.

Peter Brown: Noting those answers, is the Minister—because it is the impression he has given—not concerned about aviation safety; does he not recognise that the aviation industry and the users of that industry have the principal say as to whether there is a radar in Wilsons Road, and that it is not a State-owned enterprise or the Civil Aviation Authority that has the final determination on such an important issue?

Hon MARK BURTON: As a shareholding Minister I can assure the member that I regard the maintenance of aviation safety as being the highest possible priority. It is the Civil Aviation Authority that regularly reviews the arrangement the Airways Corporation has in place to control domestic airspace. The Airways Corporation is obliged to notify the Civil Aviation Authority of any changes it makes, and the Civil Aviation Authority has the power to act if it believes there are any safety concerns—it does not.

Simon Power: Does he have any concerns that once the Air Force’s heavy aircraft fleet—the 757s, the Hercules, and the Orions—moves to Ohakea in 2007, the safety risk posed by small aircraft with malfunctioning transponders, no transponders, or by those who have forgotten to turn their transponders on, will be unacceptable; if not, why not?

Hon MARK BURTON: I repeat that that is a matter for civil aviation. Any member who believes that he or she has a genuine concern should raise it. I certainly would, as a member of the flying public. I assure the member—and I have been advised by my colleague the Minister of Defence—that the contract between the Airways Corporation and the Royal New Zealand Air Force has been renegotiated. The new contract provides the Royal New Zealand Air Force with the services it requires.

Bills

Credit Contracts and Consumer Finance Bill

In Committee

Debate resumed from 16 September.

Part 6 Miscellaneous provisions

LINDSAY TISCH (Junior Whip—NZ National): I raise a point of order, Mr Chairperson. We cannot hear you, Mr Chairperson. Either there is something wrong with your microphone or there is too much noise.

The CHAIRPERSON (Hon Clem Simich): Could those who are leaving the Chamber do so quietly, and leave now. I ask members to bear with us for a moment.

LINDSAY TISCH (NZ National—Piako): I want to look at clause 114, “Transitional provision”, which states: “(1) This Act applies to every credit contract, consumer lease, and guarantee that is made after the commencement of this subsection.” The point I make is that the contracts formed prior to the bill coming into force continue to be governed by the law in force at the time the contracts were formed. However, revolving credit contracts that were formed prior to the bill coming into force must comply with the bill after the transition period.

Simon Power: What is a revolving credit contract?

LINDSAY TISCH: That is one that goes round. That is why it is called revolving. I draw the attention of the Committee to quite a significant move, a change that was made in the original drafting of the bill—that is the original clause 114, which was struck out. National believes that this is a very important point, because we should not be treating revolving credit contracts differently from any other contract. So the new provision is the one that we think is significant. That was a change that we supported—a change that says that all contracts need to be treated the same, and, in this case, revolving credits.

When we are looking at the transition periods we need to go back to the commencement date of these. The timing of the changes, the commencement dates, is significant. Clause 2 states that the buy-back provisions “come into force on the day after the date on which this Act receives the Royal assent.” Clause 2 then goes on to state, in subclause (2)(a): “for the purpose of applying those provisions to buy-back transactions, on the day after the date on which this Act receives the Royal assent;”. That is saying that there will be quite a considerable time frame that will allow creditors sufficient time to be able to change the way they operate, change their requirements and procedures, and update the computer system software, whatever it will be. That provision is a good one, and we support it. The buy-back provisions, though, come into force on the date on which the bill receives the royal assent. So those provisions are certainly ones that we supported. We are quite happy with those.

I draw the Committee’s attention to clause 111, “Regulations”. What we see so much in legislation that is being promoted by this Government is that there is always, by way of Order in Council, provision for regulations that will put up charges on business. The National Party is concerned about the high compliance costs and the regulatory creep that come in under so much legislation. Clause 111 states: “The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:”. This is the compliance cost regime that we see creeping in, and, in this case here, it is of major concern to the way that we see this bill. Although we are supporting the bill, we flag quite clearly the fact that anything that increases the cost of doing business, and the cost incurred by people involved in whatever lease or credit facilities they have, is something we are really concerned about. It is interesting that today we had a question in the House about the lower tax regimes that will come in, and the Government’s discussion document, which was released yesterday, about how we can simplify tax for small businesses.

I make the point here that with the release yesterday of the simplification of taxes for small businesses, we will see that if they are paying GST on a 2-monthly basis, then any provisional tax will be linked to that. Of course, businesses that are on a 1-monthly GST return period will be paying that monthly. If it will improve and simplify the tax regimes, that is all very well. But I tell members—I am putting out a warning here—that in a situation like that, which relates to this bill here, the huge costs associated in terms of being able to fund revolving credit facilities may be necessary. Revolving credit is a facility that one has to be able to move up and down within the scale of one’s operations, without having to come back to the lender each time and want variations and extensions, overdrafts, term loans, or whatever it will be.

I am just flagging here that although the Government yesterday moved to look at tax simplification for small businesses, it has not taken care of all those other huge compliance costs that business have to deal with. Dr Don Brash asked a question today about the KPMG survey of 760 businesses in New Zealand, which showed that 98 percent of them said that compliance costs had gone up. The Minister, Mr Cunliffe, did not have an answer for that, but he is in the chair now, so he may like to answer that in a moment. I am talking about clause 111 “Regulations”, which relates to compliance costs and the way this will work. The answer he gave to Dr Brash in question time this afternoon was completely unsatisfactory. The Minister was relating to a survey—not the KPMG survey, because the KPMG survey on compliance costs was very, very clear in what it said. The Minister was referring to the Massey University survey—which did come up with something different because it was instituted by the Government. So what else will it get but the results it was looking for? The point I make is that anything that increases compliance costs is to be avoided. Clause 111, “Regulations” allows the executive, by Order in Council, to say: “Hey, we will increase fees. We will do whatever we like, without the scrutiny of the House.”—without it coming back for members of this House to adequately debate and to see whether the charges and the fees that will be put on are sustainable and are for the benefit of all users. Those were the two points in Part 6 that I wanted to concentrate on.

As I said earlier, National will be supporting this bill, but I have flagged those concerns. With regard to the transitional provisions in clause 114, we are quite comfortable with what they mean. Certainly the treatment of revolving credit facilities in the same manner as others is to be applauded, and that original clause has been struck out. However, I do flag the concerns we have about clause 111, “Regulations”, and the costs that can be applied. I know that other speakers will pick up on the concern about anything that adds costs to the way people operate. I know that the bill is not specifically about business; it is about individuals. But if people on fixed incomes have to change the way they operate because of these provisions and extra charges, then that must be looked at closely and needs to be avoided. Those were the points that I wanted to raise on Part 6.

STEPHEN FRANKS (ACT NZ): This bill does bring out some strange things. Every now and then I am reminded of why I am not in the National Party. Mr Lindsay Tisch explained—in rather mild terms—a few of the stupidities in this bill, and said that the National Party was against them. Then he told the Committee that National would support this bill, when not only this part but the entire scope of this bill is already covered by a very adequate settled piece of law, the 1981 Credit Contracts Act; legislation about which there has been almost no complaint, in an area of industry that has expanded vastly—and we get this drivel and the National Party decides it will support it. I suppose it is one of the benefits of MMP that I can be in this Parliament and not have to associate myself with that through some sort of party discipline. I cannot imagine how the National Party has reached that position.

I look at just one of the items that Mr Lindsay Tisch mentioned—the regulations. Clause 111 now has a new provision that allows the Governor-General to prescribe all the assumptions that may be made to simplify disclosure. It is not very often that the law becomes dramatically worse from the time it is introduced to the time it is reported back by a select committee. At least the bill as introduced set out the assumptions in the schedule to the statute. At least the criminal penalties that would apply for breaches related to something that someone could look up and know that Parliament had addressed its mind to what the consequences would be of non-compliance, and how easy it would be, and that Parliament was therefore creating a law that it understood. But I look at schedule 3 and find it has been removed by the select committee. In reading it, I can see why. The select committee went through and decided it was probably a little bit inaccurate. In all the months that the committee had the bill, it was too hard to think what they would really do, so the Minister has persuaded the select committee to take the schedule out and leave it to be decided later. So, firstly, we have something that is bad in principle; secondly, it is impossible to debate that set of assumptions now, because we do not know what the Minister will prescribe. It is all up to his or her discretion; and, thirdly, we have it in a form in which the assumptions could be entirely at variance with what Parliament believes they will be.

That will now be an implication in looking at the legislative history of this bill. If anyone challenges the assumptions that the Minister decides are the assumptions of Parliament—because that is the effect of what is happening—on the grounds that the Minister is ultra vires, and the court looks at what has been knocked out, it will have to decide that there was something defective about those assumptions, but it does not know what. It will have to decide that the areas covered were an embarrassment, or that there was some serious reason that Parliament would not legislate for them. It will then try to imply from there some further assumptions of its own as to what Parliament might have anticipated or contemplated when it decided that it did not know what it meant. The bill now states that the Minister might know what Parliament meant and they will leave him to decide later. That is bad constitutionally, bad in principle, and bad outright.

Another little gem in this bill is the conflict of laws provision. The bill as introduced was relatively straightforward. It said: “This Act applies to contracts governed by the law of New Zealand.” Now it says it applies to contracts governed by the law of New Zealand, even if there is a choice of law provision that says they are not. The normal provision for the courts to apply is that the parties, if they are competent adults, can choose for themselves whether they will have their contract governed by another law. There are provisions that say that where a choice is entirely unnatural the court can overrule it. Now we have Parliament saying that competent adults cannot put in a choice of law provision. This might well affect, for example, closer economic relations. An Australian bank might not want to incur the cost of having to become familiar with New Zealand’s silly variant of Queensland’s credit contracts legislation, and might want to do lending in New Zealand, by the Internet, under Queensland law, but this little advance by this brilliant Government—that so understands relations with Australia—has decided that that is no longer possible.

Dr DON BRASH (NZ National): I was impressed with some of the points that my learned colleague Mr Franks made. I think it is a great pity that he was not able to present those points at the Commerce Committee, because it seems to me that some of them do have force. There can be few people in this Committee who have more experience of commercial law than Mr Stephen Franks has. But at this stage I am assuming that the Government is not able, or is not likely, to change this bill, so I will confine my comments to Part 6. I want to emphasise the comments that my colleague Lindsay Tisch made a few moments ago. I will speak about both the transitional provisions in clause 114 and our concern about the compliance costs.

Clause 114, as amended by Supplementary Order Paper 141 in the name of the Hon Judith Tizard, comes into force on 1 April 2005. It seems to us that that is a useful advance, but a number of submissions on this bill suggested that even that transitional period would be too short to reduce the compliance costs that are inevitably involved in this new legislation. I think it is unlikely that this bill will go through the Committee stage and its third reading today, which means that it will not be passed until well into October. That means we will not even have 18 months between the bill becoming law and coming into effect on 1 April 2005. We will have fewer than 18 months for the financial institutions affected by this bill to get their systems, documentation, and so on into order. That is a very minimal period—

Stephen Franks: They want to have headlines during the election year.

Dr DON BRASH: Mr Franks makes a very important point. Some of the submissions suggested that the transitional periods should be at least 2 years. I think we have compromised with a period of 18 months, but there will be less than that between the time that this bill becomes law and the time that the law comes into effect on 1 April 2005, and we regret that.

Mr Tisch made the point that we have been increasingly concerned on the Opposition side of the House about the compliance costs that this Government lumbers on the business sector, and it seems to me that this is just one further example of that problem. As Mr Tisch pointed out earlier, KPMG and Business New Zealand released a very comprehensive survey of 760 businesses on 25 August, which indicated that three of the 760 businesses surveyed felt that compliance costs had reduced over the last 12 months. Eleven of the 760 businesses felt that compliance costs had not changed very much over the last 12 months, and 746 of the businesses—98.2 percent of the total—felt that compliance costs had gone up. That survey indicated that tax compliance costs and issues relating to the Occupational Safety and Health Service, the Resource Management Act, and the Employment Relations Act were all significant issues for a great many businesses. This bill does not talk about that territory. It is just one more example of the compliance costs that are lumbered on the business sector at every turn.

Large businesses can often cope with those compliance costs, because they can employ specialist human resources people, and specialist lawyers and accountants. But compliance costs are a very major impediment to growth for smaller businesses. They are a major impediment to taking on more staff, and a major reason that our growth in per capita income is still insufficient to get us back to the top of the OECD, or even halfway up the OECD ladder, within a reasonable period of time. Indeed, at the moment all those compliance costs—of which this bill is a good illustration—are likely to mean that we will never get back into the top part of the OECD—not in 20 years, not in 30 years, and, sadly, not even in 50 years.

Hon GEORGE HAWKINS (Minister of Police): I move, That the question be now put.

BRENT CATCHPOLE (NZ First): Part 6 of this bill covers the transitional provisions, which is one area that I would like to touch on at this point. Although there are transitional clauses here to allow other Acts to apply until this legislation comes into effect, I am concerned about clause 114(3), which states: “However, subpart 3 of Part 3 does not apply to a buy-back transaction made before the commencement of this subsection.”

I would hate to think that that particular form of transaction will be excluded until that clause comes into being. I request the Minister in the chair, David Cunliffe, to stand up and take a call, to make it quite clear to this Committee and to everybody else that buy-back transactions that occurred prior to this bill coming into force will be captured, and that there will be remedies for those people who have been trapped in such schemes by unscrupulous transactions. The Minister should take note of what I am saying, and then get up and confirm to this Committee that transactions under buy-back schemes will not be excluded from this legislation. An awful lot of desperate people are already trapped in existing buy-back schemes, and they are hopeful that they will have a means of remedying that, so I hope that clause 114 will not exclude those people from that remedy.

I move on to clause 115, “Election for Act to apply”. That clause allows creditors the choice to elect for this legislation to apply to contracts that existed prior to this law coming into force. It does not allow anywhere for debtors to have that choice. I am disappointed that debtors are excluded from that option, because on a number of very important issues that are addressed in this legislation a debtor would have recourse to a better deal under it, rather than just the creditor having that option. I would like the Minister in the chair to comment on that.

I move to clause 116, “Continuing application of Credit Contracts Act 1981 and Hire Purchase Act 1971”. I am pleased to see that provision there. I just hope that it does not preclude people from remedies under this legislation if the creditor has elected to continue under the old Acts. I would like the Minister to take a call and confirm to the Committee that continuation under those old Acts does not preclude actions under this legislation in circumstances where the creditor has elected to work under the old Acts and that is to the detriment of the debtor. I suggest that in such cases those three clauses disadvantage the debtor to the extent that we really need some comment from the Minister—in particular, to do with buy-back schemes. If buy-back schemes are being excluded because of those three clauses, I really do need to have some comment from the Minister.

If buy-back schemes are not being excluded and debtors are able to continue under this legislation and get a remedy, I will be happy with that. But I ask the Minister to please confirm to the Committee that there will be a remedy under this legislation in respect of buy-back schemes already in existence before this bill comes into effect. I ask the Minister to stand and take that call.

Hon MARK GOSCHE (NZ Labour—Maungakiekie): I move, That the question be now put.

SANDRA GOUDIE (NZ National—Coromandel): In speaking to Part 6, I laud the excellent contributions from my colleagues Lindsay Tisch and Don Brash. I also acknowledge Stephen Franks, because I valued his contribution and I see that he has an amendment on which I am sure he wishes to address the Committee during the debate on this part. I would appreciate hearing from him, and I hope that he will get a further call.

In speaking to this part I recall that no reason was given for the introduction of this bill, so one can only presume that the reasoning was that there was a growing concern about people entering into credit contracts, and that there was an increasing problem with regard to people finding themselves in difficulties with their creditors. Hence, one presumes, we have this bill to deal with the issue of those people who enter into credit contracts and get themselves into difficulties. It has been said that while this bill is predominantly about disclosure, for the benefit of people who have a limited understanding of these particular contracts, the starkest way to bring home to consumers the meaning of a credit contract would be to have nothing on the first page of the contract other than the total sum payable in large, black letters. I cannot emphasise that to members enough. Many people think they have a degree of understanding when they enter into credit contracts, but often they do not, particularly when they have limited literacy and numeracy skills.

First of all, I will carry on with the comments made by my learned colleagues on Part 6, “Miscellaneous provisions”. Clause 111 states: “(1) The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:”. In doing that, he or she can change the information that must be disclosed. We already know from many, many submitters that it could cost some people hundreds of thousands of dollars to change their documentation and processes, as required by the disclosure requirements. If, at any time, the Governor-General issues an Order in Council to institute a difference in the disclosure requirements that results in a change to the documentation, that will activate an additional compliance cost to be met by all those creditors who have to comply with those requirements. That is of concern, and my colleagues have expressed our concern at that.

Clause 111(1)(f) states: “prescribing model disclosure statements that comply with section 29, and the terms and conditions on which the model disclosure statements may be used:”. I put it to members that “may be used” is not correct; I would have thought that they had to be used. Thus we enter into that whole realm of compliance costs. Those compliance costs will actually be ongoing. There was quite a substantial compliance cost in an earlier version of the bill. However, some assumptions associated with that cost were not correct, and were challenged by submitters to the Commerce Committee. It was quite clear that those assumptions were not correct, and that there will be an ongoing cost because of the requirement for creditors to continually monitor their performance, and to have programmes to monitor their compliance with the legislation.

I will move on to subclause (1)(ia), which provides for “prescribing the form of the certificate that must be given under section 58C:”. Clause 58C refers to the buy-back provision. In that situation, the creditor has to ensure that every occupant of a house gets legal advice. I would like the Minister in the chair, the Hon David Cunliffe, to take a call and perhaps explain to us why the bill requires that every occupant of a house, where someone from the house is to be involved in a buy-back scheme, has to have legal advice, and why the creditor has to ensure that. Perhaps he would like to explain that further and clarify that little provision, which relates to prescribing the form of the certificate that must be given under clause 58C.

I, too, would like to raise the concerns that have been mentioned concerning clause 114(3).

DAVID BENSON-POPE (Senior Whip—NZ Labour): I move, That the question be now put.

STEPHEN FRANKS (ACT NZ): I would like the opportunity to explain the effect of the amendment I have proposed, which is that clause 109 be amended to, in effect, reinstate in this bill the provision of the Credit Contracts Act that allows the parties’ choice-of-law clause to prevail. I am unaware of any case where that has been exploited or been a problem. The Commerce Committee in its report imagined the possibility that people might use a choice of law clause as a way of avoiding the protection that the committee hoped to improve in this bill.

I guess that is a theoretical possibility, but the effect of the change—which having talked to people involved, I do not think was contemplated by the committee—is to shut down a much more likely possibility. For example, there is the possibility of Australian retailers selling into New Zealand—using a term sale or credit arrangement that would be deemed to be a consumer credit contract under our law and their law—but having to try to comply with New Zealand’s provisions. As I understand it, if the Queensland code is applied, a consumer in New South Wales can contract on the Queensland form and there will be a mutual recognition. I am not certain of that, but that is what I understood to be the effect of the mutual recognition arrangement a few years ago. I suggest that our clause 109 would permit something similar in New Zealand, because the Australian contract will say which state’s law governs—whether it is Queensland or any other state.

Accordingly, I urge that members vote for this amendment. It will permit the trans-Tasman market that is so important not only in terms of the simple freedom of people to contract and take advantage of opportunities, but also to keep competitive pressure on New Zealand. It might be that at some later stage an efficient form of direct consumer credit from banks in Australia will be a constraint on pricing in the New Zealand market for credit alone. But more important in the short term, I believe that reinstating in this bill the law that has caused no problems since 1981 will allow Australian retailers and providers of services on credit to continue to operate in New Zealand without the compliance costs of having to change their contract forms, get legal advice, and work in the unfamiliar code that our code would be for them. The consequence probably would be that if their offers were price-sensitive, they simply would not bother to extend them to New Zealand.

So I urge the adoption of my amendment. It is not a hazardous one, it does not take people into strange territory, and it would simply maintain the position as it currently is under the Credit Contracts Act and extend it to this bill. It is not like the normal last-minute change at the Committee stage, where it is a matter of stepping into the dark; this is a change the Government could easily support. I recognise that it is hard for a Government to move very quickly on something like this clause, but it should be able to decide that by initiating it the select committee was making what was probably a well-meant flight of ambition. As I understand it, the officials had not proposed it, and if it closes down part of the retail market and excludes people from Australia who would otherwise be making credit sales in New Zealand, it is a change that might have much wider implications than anyone anticipated.

The question was put that the following amendment in the name of Stephen Franks to clause 109 be agreed to:

to omit from paragraph (a) all the words after the words “New Zealand”.

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

Ayes 39

New Zealand National 20; New Zealand First 13; ACT New Zealand 6.

Noes 69

Labour 52; Green Party 9; United Future 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Tony Ryall to clause 111(1) be agreed to:

to insert the following new paragraph:

(a) prescribing any fee or commission charged by a broker and known by the creditor:.

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

Ayes 39

New Zealand National 20; New Zealand First 13; ACT New Zealand 6.

Noes 69

Labour 52; Green Party 9; United Future 8.

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Tony Ryall to clause 111(3) be agreed to:

to insert the following new paragraph:

(f) the fee or commission charged by a broker and known by the creditor.

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

Ayes 39

New Zealand National 20; New Zealand First 13; ACT New Zealand 6.

Noes 69

Labour 52; Green Party 9; United Future 8.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 141 in the name of the Hon Judith Tizard to clause 105 be agreed to.

Amendments agreed to.

A party vote was called for on the question, That Part 6 as amended be agreed to.

Ayes 102

Labour 52; New Zealand National 20; New Zealand First 13; Green Party 9; United Future 8.

Noes 6

ACT New Zealand 6.

Part 6 as amended agreed to.

Schedules

Dr DON BRASH (NZ National): Even before the result of this recent voting, I was going to express concern about the schedules, but following the defeat of the Supplementary Order Paper put forward by my colleague the Hon Tony Ryall, I feel even more concerned. The point of Mr Ryall’s Supplementary Order Paper dealing with clause 111 was that, as currently defined, it appears that the intent of this bill may well be significantly circumvented because of the omission of a potentially very large part of the charge against a borrower. Mr Ryall pointed out during the second reading debate that a fee charged by a mortgage broker is, on the face of it, not caught by the definition of the cost of a loan or credit. When we look through schedule 1, that indeed appears to be the case. I feel that is a significant omission, and, as drafted, the bill may very well not achieve the purpose that I think both the Government and we in the National Party would like to see it achieve. That must be a matter for serious regret.

That said, I am bound to say that in our judgment the best way of protecting consumers against rapacious moneylenders is a competitive banking and finance sector. It is not more than 25 years back that most consumers were unable to borrow from mainstream lenders—banks and so on—at all. They were therefore vulnerable to being charged very high prices indeed for consumer credit. Even those who could get less-expensive credit from trustee savings banks were obliged to get down on bended knee and cultivate good relationships with their bank managers, in a way that these days is not required, at all. We now have a very competitive banking and finance market, and for most of the population that provides all the protection required. But I acknowledge that this bill is designed not merely to protect the 80 percent of the public who do not need protection in a competitive banking and finance market, but also the 20 percent who find it more difficult to borrow from mainstream banks and finance houses. I accept that we therefore need something of this kind.

Having acknowledged that a competitive banking and finance model is the most effective way of protecting most of the public, let me also suggest that another highly desirable thing to protect the public from rapacious moneylenders would be a higher understanding of the way finance works. It is a matter of regret that so many people come out of our school system with only the most rudimentary understanding of how credit works, how interest works, how compound interest works, and therefore of the dangers and consequences of borrowing at high interest rates.

I suspect that the most effective way of protecting that 20 percent of the public who cannot get access to mainstream banks and finance houses would be to give them some understanding of the risks they run in borrowing from third-tier financial institutions at very high rates. We have seen tragic cases where people have lost homes, cars, and furniture by not understanding the risks they run. Frankly, I would like to see people—at least at high school, and possibly even at primary school—given some education about the benefits of understanding how interest works and the risks of not understanding that. My colleague Sandra Goudie pointed out that one of the most effective ways of helping people in borrowing situations would be to make it clear what the total cost of a loan is.

While I do not condone some of the quite distorted discussions of some financial institutions in adding principal to interest—

LINDSAY TISCH (NZ National—Piako): I want to focus very briefly on schedule 1, and in particular on paragraph (s) headed: “Debtor’s right to cancel”. This paragraph is a very important part of the bill. It allows the debtor to pull out of a contract within 3 working days, and shows what the process should be for that cancellation. However, if I go back to clause 24, I see that that clause refers to the cancellation of a contract. Clause 24(1), “Right to cancel consumer credit contract”, states: “(1) A debtor under a consumer credit contract may cancel the contract by giving written notice of the cancellation to the creditor under the contract within 3 working days of the day that disclosure is made …”. It goes on to explain how that will be implemented.

I have concern with this clause, and the Minister may be able to help me. Although I understand the basis of the clause, I find no opportunity in it—when a contract has been terminated and the creditor has agreed to the termination—for compensation for loss of value. I refer to two significant submissions in particular. We had one submission from the New Zealand Retailers Association, which said: “Consumers who purchase goods on credit should not be entitled to return those goods upon taking possession, even if they are entitled to cancel the credit contract because the goods depreciate upon delivery—25 percent depreciation is common.” That is a factor. For people who are in business or involved in any commercial activity, once something is purchased then its value depreciates very, very quickly.

I see that Paul Adams wants to take a call later on. I am sure that he would be able to relate that situation to driving a vehicle out of the showroom door. As soon as someone drives a $10,000 car, a $30,000 car, or whatever it is, out of the door, with his or her name on the ownership papers, he or she will not get what was paid for that vehicle, even if the contract is cancelled within 3 days. I am sure that Paul Adams will take a call and might be able to explain that, because he has some expertise in that area.

Brent Catchpole: After a student party!

LINDSAY TISCH: Yes. I am concerned that no depreciation factor is included here, and that is a major cost on businesses. It is a loss of opportunity for that money, which could be used elsewhere.

If we look further, we see that clause 27(1)(e), which relates to the effect of the cancellation under the schedule, states: “unless the contract otherwise provides, the debtor is liable to pay to the creditor—(i) any reasonable expenses necessarily incurred by the creditor in connection with the contract and the cancellation of the contract; and (ii) if property is returned to a creditor that has been damaged while in the possession of a debtor, the cost of repairing the damage.”

Another submission, put in by the New Zealand Law Society, states that clause 27(e) should be amended to enable a creditor to require payment of compensation for depreciation, if the goods had been used while in the possession of the debtor. That is a real concern, and maybe the Minister could explain to the Committee the issue of goods and depreciation—why once people have taken goods they have paid for, the goods are not worth the same value if returned. That is a concern, and I bring it to the attention of the Committee.

BRENT CATCHPOLE (NZ First): I would like to follow up on Lindsay Tisch’s comments about the right of the debtor to cancel, under schedule 1, which refer back to clause 24. He is quite right in his example of a car leaving the car yard, because it certainly does lose its value. I tried to point out to him while he was speaking—and I hope he did not mind my interruption—a reference to a student party and a stereo. I tend to think that a stereo after a student party would lose a lot of its value if returned within the 3-day limit of the normal interpretation of clause 24.

I move on to paragraph (s) in schedule 1: “Time limits for cancellation”. In general, the time limit is 3 working days. However, if the documentation and agreement are made by electronic means or email, then that period can be extended to 5 working days after the electronic communication is sent. I have a problem with the terminology of “after the electronic communication is sent.”, because there is no guarantee that the electronic communication will be received and read at the other end, unless a provision is inserted to ensure that that happens. That provision can be activated with modern email systems, but if it is not activated then there is no guarantee that electronic mail and emails have been received. That is a key factor. If somebody is not aware that an email is there, then how can he or she possibly respond to it within the 5 working days set out in this schedule? This is quite a concern, because one has the right to cancel a transaction within a certain time, but that right is extended, by the use of an electronic method, without any confirmation of whether the electronic communication has been received.

The schedule goes on to say that there can be an agreement, within the contract or process, to receive information by electronic mail. That information could concern the request for a price, or some details about a particular product or contract. The provision does not necessarily set out that the agreement has to advise the debtor of the final contract, which, I think, is something that was overlooked in the final analysis.

I go on to the statement in paragraph (s): “Delete if the credit contract does not involve a credit sale.” I have some concerns about the interest provision of this paragraph. The interest period is from the day the property or services are received until the day either the cash price is paid for the property or services or the property is returned to the creditor. But if someone makes a credit contract and then pays that cash price within 3 days, where does that situation lie? That person has the right to cancel that contract within 3 days, but if he or she then decides to pay cash within 3 days, will interest be charged for that 3-day period? I would like the Minister to take a call on that and give me an answer.

I move on to schedule 3, which sets out the procedures for buy-back transactions. It is good that there is a fairly comprehensive description of what information there should be on a contract, but there is one thing missing—

PAUL ADAMS (United Future): I will take a call on the schedules. I just want to pick up on one point Don Brash mentioned, and that was educating people regarding their credit debt. I think it is a very good point. There is no way, unfortunately, that we can legislate in Parliament for people’s success, as much as we would love to. We must have laws; nobody would doubt that. But we need to understand that we cannot legislate for people’s success, and we need also to be responsible for educating them and letting them know exactly what they are getting into when they take on debt.

I have learnt in life, as probably many members have also learnt, that money is a wonderful servant but it is a terrible master. Yet we all have to learn in life by experience. But sadly, with debt, that can be a very painful lesson to learn. Sometimes it does concern me. The other day I was in a queue and there were some young people in front of me—and I love young people, so hear me correctly on this—and one said to the other: “Look, I’ll give you the cash, and you just put this cost on your credit card.” Well the answer amused me, because the person turned round and said: “I’m sorry, I think my card is full.” Well, I thought that “full” was an interesting way of saying: “I have reached my maximum credit allowance.”

I heard another conversation between two ladies. One said to the other: “Let’s go shopping.” Now, of course, one never has to convince a lady to go shopping. She said: “Why are we going shopping?”. The other lady said: “I have just discovered that my card owes me $5,000.” I thought that was another interesting saying. So I had to ask her: “What do you mean ‘my card owes me $5,000’ ”? She explained to me that she thought she was at the maximum of her credit card balance, but she had just got her account and in actual fact she still had $5,000 to go, and she thought that the card owed her that amount. That sort of comment scares me because I think that people do not fully understand the debt they are getting into. As I said earlier, the current credit card interest rate of 18.75 percent—which I think banks in New Zealand need seriously to look at—is an extremely high interest rate. We have 90-day bill rates at below 6 percent, yet banks are still charging the average New Zealander 18.75 percent interest on a credit card. If a person cut up his or her card when it was at the maximum balance of $3,000, and never spent another cent on it but just continued to pay the minimum balance, which is 2 percent per month, most New Zealanders do not understand that it would take that person 37 years to pay off the card.

So as we bring in this legislation I just want to make that point, because I think it is a very good opportunity to mention that we can legislate. This is great legislation, and United Future is supporting it. But I think we have a responsibility to make sure that, as a Government, we let people know exactly what debt is costing them, and encourage this nation again to begin saving—because, once again, that would be United Future common-sense policy.

STEPHEN FRANKS (ACT NZ): United Future common-sense policy is: “We will save when we are told what money costs us.” People will save when it is worth saving. When we have a Government that for 45 years has been telling us it is OK to live beyond our means, and that we will live off the savings of poor people. The Taiwanese have become twice as rich as us by lending us money. We will keep spending money for as long as our Government keeps pretending we will never have to pay it back.

But getting back to this bill, I am a little bit baffled by a completely unexplained change in the schedules. Schedule 3, “Assumptions” has been completely deleted, and there is no reference in the Commerce Committee report as to why. There may be someone here who was on the select committee who can explain it. But given that it was not explained and that schedule 3 was a major part of the bill, in that its intent was to simplify the form of disclosure—with statutory assumptions—I am genuinely baffled about why it has gone.

I am also curious about the form of schedule 1, “Key information concerning consumer credit contract”, and in particular, the right to cancel. Paragraph (s) prescribes a statement to the consumer about his or her cancellation rights that does not seem to fit the head clause—clause 15. The cancellation right in that paragraph states that notice must be given within a certain period and the cash price must be paid within 15 days, but it does not state when the property has to be given back. I wonder whether that is deliberate or an oversight. The head clause states that the property should be given back in 3 days, but the notice, which is the only thing most consumers will ever see, does not tell them when the property has to go back. At the very least, some poor soul will think that some bush lawyer will read it and decide to push his or her luck and, of course, cause cost to the lender. Very, very easily he could assume and argue that the notice would have told him when he had to give back the property. Certainly, it tells consumers when they have to pay the cash price. In fact, as a reasonable person, I might think that I had to pay the cash price and give back the property within 15 days. Of course, people will know that quite a lot of property deteriorates considerably as time passes. If it was a consignment of plants from a garden shop, it may well be that the plants had died before they went back.

Sandra Goudie: A used bed.

STEPHEN FRANKS: I am not sure about that. Another little puzzle here is that this does not seem to apply if possession has been taken of the goods. I am not sure why that is, but using the garden shop example, one could easily pay for a whole garden full of plants and not pick them up—intend to pay for them later. Of course, the garden shop ought to try to keep them alive, but theoretically at least, it is not its problem once a person has bought them. Maybe the person has not taken possession—the carrier has them—and there is an argument, because whose carrier it is has never been prescribed. There are a whole lot of situations where this could be an issue, and it puzzles me that this form of disclosure is set out in full in schedule 1, where it will be hard to change. Then the regulation-making power states that if anything is forgotten, extra disclosure can be added—maybe that can be used. But it does not state that the prescribed form can be changed. I think that is just a bit of clumsy work.

I do not know the quality of the advice from the ministry or from the officials who have advised on this legislation, but anything from the Ministry of Consumer Affairs has to be deeply suspect. It has no intellectual rigour in the way in which it approaches consumer protection. It does not believe in markets. I suspect that this is simple incompetence. The confusion that will result for consumers is that those well-meaning people, who always purport to act in the interests of consumers, are in fact acting against them.

Finally, in looking at the schedules, I find that there is another small puzzle. If the Minister in the chair would take a call, that puzzle might be explained very easily. The prescribed information for the standard form of consumer credit contract is in great detail.

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

SANDRA GOUDIE (NZ National—Coromandel): I would like to take up a few of the comments from the previous speaker. Schedule 1 puts out quite a substantial amount of disclosure. One of the main problems identified with the current regulation of the consumer credit industry is the imbalance of strength between lenders and borrowers. When one considers the information that Stephen Franks has just referred to with regard to schedule 1(s), one has to wonder whether the emphasis is now in favour of the borrower; whether all the difficulty in fully understanding what is happening with regard to goods and the return of goods is now in favour of the lender. There will be substantial costs, as a result of that, to the lenders. We have already talked about exorbitant compliance costs.

One thing the bill does address is the exorbitant interest rates, which have previously gone unchecked. Now there is some control around that and around the high cost of a multiplicity of fees, which were unregulated. One of the problems of the current industry is laws that allow lenders wide latitude and require security for loans, and double-jeopardy clauses, interest insurance, and a call on chattels, often in excess of the loan. However, concerns have been expressed around that, and there may still be some problems in that area, even within the current proposals.

The difficulty in understanding the arcane and sometimes contradictory language of the current law is certainly an issue, and is really, to some degree, one of the major premises of the bill in terms of the disclosure requirements to consumers. Schedule 1 certainly identifies the requirements with regard to disclosure to consumers.

But one has to wonder whether, even with full disclosure of all those things, people really understand what they are getting themselves into. Many people do find themselves in some considerable difficulty. If people have literacy difficulties, how will they understand what they are doing? How will they understand what sorts of contracts they are entering into? A number of cases have been given. In one case study a person borrowed $10,000 from a lender at 26 percent interest, with no fees payable over 3 years, and with a monthly payment of $402.91, and a friend borrowed the same amount, also at 26 percent interest, and also for 1 year, from another lender. He owes another 12 payments; he owes $7,478.60, and the other person owes $7,600. It is a case of “Do you understand all of that? Would you please sign on the dotted line.” If people have a limited understanding—

Simon Power: We have trouble understanding it here.

SANDRA GOUDIE: Exactly; that is my point. If people have limited literacy skills and a limited understanding of the language, under the current disclosure provisions being promoted in the bill, will they be any better off? At the end of the day, how far can we go to protect people from themselves? We heard Paul Adams give an interesting address on indebtedness and on how people make assumptions about their credit cards, which they really do not understand. People get themselves into all sorts of difficulties. Paul Adams referred to it taking 37 years before a person paying the minimum payment pays off a balance of $3,000 on his or her overdraft. That is the type of impression that people are getting, and the sort of indebtedness that people get themselves into. There is a range of areas where this happens.

Another couple on a very modest combined income bought a $7,000 car on hire purchase for a total cost, finance included, of $13,000. They then borrowed $6,000 from a building society to meet general living expenses. In the same year the husband travelled home to Samoa by taking out a personal loan from a loan company that was secured over the household furniture. He fell ill and his wife had to travel to Samoa to be with him. For her travel she borrowed from another loan company, using the same furniture as security, and when they returned home their furniture had been repossessed by the second loan company. There were three different instances of borrowing by this particular family. They entered into each of those transactions, so they must have had a limited understanding of what they were doing, but with the whole lot put together they clearly could not manage their situation. They certainly needed assistance. How far do we go in trying to protect these people from themselves through legislation?

Hon MARIAN HOBBS (Minister for the Environment): I move, That the question be now put.

BRENT CATCHPOLE (NZ First): Thank you for the opportunity to finish what I was saying on schedule 3. This particular schedule has the information concerning buy-back transactions. I make the point that nowhere in the explanations or information does it set out or highlight the specific clauses that deal with the independent advice that is required when somebody goes into this particular type of transaction. That is the point I wanted to make. Paragraph (j) does not quite provide a description. Therefore, I think the schedule is missing a provision that would cover the independent advice that is required under this Act. Perhaps the Minister could take a call and explain that.

To round off, I would like to touch on what Sandra Goudie and Don Brash talked about, which was the idea of budgeting for education at an early stage, to explain some of these things. This would perhaps go a long way to help people overcome the difficulties they get into when they are in financial trouble. It is usually the people who can least afford it who end up in these contracts that are so bad for them. I think that with a bit of early education, in secondary schools at least, or perhaps a little earlier, people could be helped through the process of learning how to handle a credit contract. Don Brash made a good point about that, and it would be worth looking at further education under the education system.

Thank you for the opportunity to finish my contribution.

The question was put that the following amendment in the name of the Hon Tony Ryall to schedule 1 be agreed to:

to insert the following new heading and paragraph:

Broker’s fees and commission

(na) a description of any fees or commission payable as a result of the contract when that is known by the creditor:.

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

Ayes 39

New Zealand National 20; New Zealand First 13; ACT New Zealand 6.

Noes 69

Labour 52; Green Party 9; United Future 8.

Amendment not agreed to.

Schedules agreed to.

Bill reported with amendment.

Bills

New Organisms and Other Matters Bill

In Committee

Clause 1 Title

Dr PAUL HUTCHISON (NZ National—Port Waikato): The title of this very important legislation will be the “New Organisms and Other Matters Act”, although there is a Supplementary Order Paper from the Minister for the Environment stating that the bill will be split into four. Those four titles are relevant because they reflect the four basic Acts that this bill is built on.

But in terms of thinking about the title “New Organisms and Other Matters Act”, we certainly have to think about the first principles relating to genetic modification in New Zealand and the recommendations of the royal commission. I note that one of the major recommendations was that continuation of research is critical to New Zealand’s future. As in the past, we should go forward but with care. What worries me about the title and the way in which the Labour Government has managed this bill is that while, in words, there are opportunities for research to go forward, in actual fact the bill only strengthens the hurdles when it comes to anything other than low-risk research, and increases the compliance costs. I think, perhaps, it would be more appropriate to consider a title along the lines of: “Labour’s Let’s Heap Compliance Costs and Hurdles on to Research Act”.

That is a theme of this Labour Government. There was an opportunity with the Resource Management Act to make some huge differences to progress New Zealand forward, but Labour did the very opposite. Here, there was also an opportunity, but again, unfortunately, it has done the very opposite. Its own biotechnology strategy and biotechnology taskforce have been absolutely clear. They have said that in order to progress in New Zealand we must have transparency, predictability, and best regulatory practice. Unfortunately, this does not happen, and the title does not reflect it. Maybe the title should be the “New Organisms and Promotion of Unpredictability and Lack of Transparency Act”. Again, that is a theme that the Labour Government has perpetrated, not only in this very important Act but also in other legislation that it has brought to Parliament.

I also note that one of the other major impediments to progress that the Labour Government has brought in, in terms of this legislation, is the widening of the call-in powers of the Minister. Maybe we should be calling it the “New Organisms and Extend the Call-in Powers of the Minister Even Though We Know it is Daft Act.” The Minister has said that recommendation 14.1 does call for her call-in powers to be widened. However, if we go to the major recommendations of the royal commission, we note that one of them is to form Toi te Taiao, the Bioethics Council, which will, at a higher level, have a hugely important place in addressing these issues. The bill does not define “cultural”, “spiritual”, or “ethical”, yet the Government goes ahead and, once again, puts in a major block in terms of making things practical, and, instead, perpetuates a very difficult, complicated situation. So the title of this bill in no way reflects the reality of this legislation, which Labour has painstakingly managed to increase the bureaucracy of and the complexity of, so that it works in reverse of Labour’s own biotechnology strategy.

Hon BRIAN DONNELLY (New Zealand First): After the performance in the House of the Mothers Against Genetic Engineering, I noted in the report-back speech that some people obviously thought that “NOOM” stood for New Orgasms and Other Matters Bill, rather than New Organisms and Other Matters Bill.

The exercise in this part of the debate this afternoon is to look at the name—the New Organisms and Other Matters Bill—and ask ourselves whether it clearly relates to what this bill is all about, and whether it fairly reflects what the bill is doing. There has been some difficulty, because the name does not clarify that. Many people believe that this legislation lifts the moratorium imposed 2 years ago to give the Government time to put in place certain things. This bill does not do that. Possibly the title of the bill could have been “Lifting the Moratorium (Not) Bill”, which would have clarified the bill for everybody. It would have saved a lot of people a lot of trouble and a lot of problems, trying to gum up the works—thinking that if they did not get this bill through, then the moratorium would stay indefinitely. That is not the case—the moratorium disappears on 29 October, regardless of whether this bill goes through. It is very important that the public understands that. It could have been done if we had changed the name of the bill to clarify that particular point.

There is a reason for calling it New Organisms and Other Matters Bill, rather than the Hazardous Substances and New Organisms Amendment Act—I notice from a Supplementary Order Paper that when the Minister changes the bill into four parts, she will go back to that—and it is to demonstrate that this legislation is about putting in place the recommendations of the royal commission around gene technology, rather than the “hazardous substances” of the Hazardous Substances and New Organisms Act. It focuses very much upon that.

We have to ask ourselves whether the bill has done what it set out to do—in other words, what the moratorium was put in place for, and why it allowed a space of 2 years for this work to be done. Some of the things in it certainly have, so the bill justifies the name it is being called. Certainly, it has in terms of conditional release, which we in New Zealand First believe is one of the most important aspects of this bill. The royal commission identified a real gap in the regulatory framework, which was that if an application came in for commercial release, it had to be all or nothing, and not anywhere in between. If that is to be controlled in any sensible fashion, conditional release is a quite essential category, particularly for therapeutics and medicinal developments.

This legislation most certainly puts in place a conditional-release regime. One could argue that therefore that justifies the name New Organisms and Other Matters Bill, defining quite clearly that the legislation is to put in place what the royal commission was talking about. It does a few other things—for example, it clarifies the liability regime. Once again, that was something the royal commission said needed to be put in place, so this bill attempts to do it—which justifies once again the name it was given. It has also streamlined decisions around low-risk GE organisms. Dr Paul Hutchison pointed out in the minority report that that could have been done in the hazardous substances and new organisms amendment legislation that was done a couple of years ago. I think the Government was saying at that time that there still needed to be a bit of tidy-up work around it, and so it would prefer to leave it—as it has done.

However, the Government has left out a whole lot of things that the royal commission said should be put in place. For example, mandatory conditions around buffer zones, etc., and codes of practice are not there. The bill contains no clarification, at all. It has left the poor old local governments right in the lurch, and so could be called the “Partial Response to the Royal Commission on GE Bill”. I note the word “partial”, because of the things the bill has missed out.

I want to talk also about the local government issue, and why this particular bill could very well be called the “Leaving Local Government in the Lurch Bill”. This bill, purely and simply, ignores local government.

BERNIE OGILVY (United Future): I support the title clause of the New Organisms and Other Matters Bill. In my view, this title properly reflects what the bill is all about. As others have said, it implements the recommendations of the royal commission for strengthening the already robust safety mechanisms regulating the release of genetically modified organisms into the environment.

The phrase “New Organisms” in the title serves to illustrate something very fundamental about genetically modified organisms that is usually lost in all the emotive rhetoric that surrounds—or shall I say, obscures—the GM debate. It illustrates that a genetically modified organism is nothing more and nothing less than a new organism, in exactly the same way that an exotic species that already exists overseas is classified as a new organism when it is imported and released into the New Zealand environment. In other words, a genetically modified organism is not “Frankenfood”, it is not a contaminant, and it is not by definition some sort of soup organism designed by evil multinationals to wreak havoc on our environment. A genetically modified organism is a new organism—just like any other exotic species. As such, its release is effectively a biosecurity issue that, given the right regulatory regime, can be managed by the Environmental Risk Management Authority on a case by case basis. In respect of that, the title is particularly apt for a bill that strengthens the safety regulations governing the release of genetically modified organisms.

It is also interesting to note that a large number of lobby groups and political operators remain opposed to this new organisms legislation, because much has been made in New Zealand of the need for a knowledge economy, and for innovation in business—and for very good reason. It is only through the application of knowledge and innovative techniques to economic activity that New Zealand can hope to move forward and prosper in this world. Yet when it comes to technology such as genetic science that is particularly relevant to New Zealand’s main strength, which is land-based industries such as agriculture, we have a very vocal lobby of people who want to stop it dead in its tracks, just because it is something new—as stated in the title.

People could call for more longitudinal or other studies on almost anything to ensure beyond a shadow of a doubt that it was 100 percent safe, but—as “corngate” has demonstrated—it is impossible to prove a negative. One thing is sure: if a 100 percent certainty threshold was applied to everything, nothing new would ever be developed. The title clause of the bill is perfectly apt, and it has United Future’s support.

IAN EWEN-STREET (Green): I find the “New Organisms and Other Matters” title completely misleading. Yes, we are talking about new organisms, but why do we not call this bill the “New Organisms Are Alien Species Bill”, because that is what they are. Let us not forget that all GE species are alien species. That is why they are created in the first place—so that their owners can take out a patent on them. It is a crazy situation whereby half of a company says how different the organism is so that it can be patented, and at the same time the other half of the company says: “Well, actually, it is not that different after all. In fact, it is substantially equivalent, and we don’t need any new regulations for it.”

I think another possible title for this bill would be the “Bio-insecurity Bill”. These alien species are like the alien species—as my colleague Bernie Ogilvy has just mentioned—that come from overseas. We spend $130 million a year at our wharves and airports keeping them out. Why on earth do we want to release them from inside our economy? We do not know, and we cannot possibly know, what the long-term consequences of these organisms will be for our ecosystems. We do not know, and we cannot know, whether they will be the possums, gorse, rabbits, or whatever, of the future.

Another possible title is the “Economic Stupidity Bill”. We are a market-driven economy, and it is incumbent on us to provide what our markets demand. The market signals are exceptionally clear: our foreign markets do not want GE food—period. What they want—and are signalling to us—is GE-free food. They want clean, green, safe food.

Perhaps we should call this the “Economic Treason Bill”. Members should have a think about the US corn growers. They lost 98 percent of their export market to the European Union—[Interruption] The Minister obviously thinks it is funny, but I do not. At the same time, Canadian canola growers lost 100 percent of their market to the European Union. They survive only because they have subsidies; we simply would not survive.

I have a question to ask the Committee. I have asked it in the House before, I have asked it up and down the country, and I have never had a decent answer to it. Can anybody in this room tell me the name of one genetically engineered food product that we could grow in New Zealand for which there is any demand in any of our export markets? Silence. There is none. Why are we doing this?

Perhaps we should call this bill the “Anti-democracy Bill”. We have 68 to 70 percent of the population of this country opposed to having GE organisms released into the environment. Why does the Government not listen to the people? Let us go back to the royal commission. Eleven thousand people took the trouble to make a submission to the royal commission, and 2 percent supported what the Government is doing now. Ninety-two percent were opposed, and 6 percent did not have an opinion. Why on earth is the Government doing this? It is madness.

Perhaps we should call this bill the “Why Don’t We Learn From the Mistakes of Others Bill?”. For instance, the Americans have found that they have lost all of their markets to the European Union and Japan. They cannot even sell their products as animal feed, because organisations like McDonalds refuse to sell meat products that are raised on GE food. The ultimate indignity for the American farmers is that they cannot even give their food away as aid for the developing world. Do members remember the Zambian incident? They have starving people, but they refused even to accept GE food as aid. Why is the Government imposing that bizarre scenario on New Zealand farmers?

Perhaps the bill should be called the “Why Don’t We Just Accept That This Madness Comes From US Pressure Bill?”, because the US has painted itself into a corner. The US has embraced GE food and found that it cannot do anything with it.

GERRARD ECKHOFF (ACT NZ): I am elated to have the opportunity to talk about this hugely important bill. There are few occasions in one’s lifetime when one can stand and talk about a new bridge to the future. If those people who invented the internal combustion engine all those years ago had had an Environmental Risk Management Authority in those days, and if they had gone to it and said they had discovered an invention that would kill 20 million people during the period from then to now, how many people in this Committee think that the internal combustion engine would have been introduced to this world? No one thinks that, yet we know that that invention has totally taken this world of ours out of servitude. But, of course, there is a danger associated with it. There is a danger in getting out of bed in the morning, and I know that the Greens are totally concerned about such matters.

I say the importance of this bill is not underscored in the title. The title does not reflect anything near the significance of the bill, in terms of the new bridge that we will have to the future. The Greens would like to call this something of a red flag bill, which we should be running in front of. But I put it to the Committee that we are not talking about substances that will cause almost immediate death. We are not talking about a substance that will cause one in a thousand New Zealand citizens to go into anaphylactic shock. That happens today with a common substance called the peanut, so why do we not ban peanuts? Why do we not have street marches and women whipping their tops off in Parliament, saying that we must ban the outrageously dangerous product called peanuts? One in a thousand people go into anaphylactic shock when they ingest that product, so it should be banned! Science has shown us the way forward, and we have learnt to manage those things. We do not stand up and say we should ban the internal combustion engine, peanuts, electricity, and anything else that may harm us. Instead, we move on.

I am a little concerned to see at this early stage of the debate that the rather innocuous title of the bill is inappropriate. I think the words “in New Zealand” should be added to the title, because these are not new substances or organisms. As I think my colleague from United Future has pointed out, these organisms exist throughout the world. The Green Party does not seem to understand that something like 200 million acres throughout the world—and that figure is increasing daily—are being planted with these new organisms, yet it tells us that there is no demand for them. That is absolute bollocks. It is to the advantage of some within the political lobby groups—those who are closely aligned with Greenpeace, etc.—to say that we do not want those things in our environment, because if new organisms prove to be highly successful, the reason for being of those groups would disappear. That is one of the great problems that the environmental lobby groups have. They do not want anything new, because the new religion called environmentalism that has swept the world will be shown to be completely false when we allow our scientific community to enhance our way of living.

I have not mentioned yet the huge benefits that new organisms will bring to the lives of those who suffer from the appalling diseases afflicting not just New Zealanders but people in the rest of the world. Why can we in New Zealand not discover new organisms and new ways of doing things that will enhance the health of not just New Zealanders but many people throughout the world, whether they live in Africa, Asia, or elsewhere? What would it take for the Green Party to say it was wrong? What would happen if a New Zealand scientist discovered a cure for AIDS through the use of new organisms?

SIMON POWER (NZ National—Rangitikei): Madam Chair, I thank you for catching my eye. I appreciate your giving me the call. I point out to my colleague Bernie Ogilvy, who spent some time on the relevancy of the title of the bill, that that title is likely to disappear as the bill is subsumed into four other pieces of legislation, pursuant to Supplementary Order Paper 144, put forward by the Hon Marian Hobbs. That will see the New Organisms and Other Matters Bill being separated into four separate bills: the Hazardous Substances and New Organisms Amendment Bill; the Agricultural Compounds and Veterinary Medicines Amendment Bill; the Medicines Amendment Bill; and the Biosecurity Amendment Bill. On that basis, spending a whole lot of time on discussing the relevancy of the title of this bill is probably not the most productive way for the Committee to spend its time. But in the spirit of this debate, I will suggest some alternative titles for this bill.

Dr Paul Hutchison and Brian Donnelly, in particular, have raised a couple of serious issues. The National Party has indicated it has reservations about one or two crucial things in respect of this bill, and I am extremely concerned, as I have mentioned on numerous occasions during the select committee process, about the provisions relating to liability and penalties. On that basis it would probably be quite proper, as an alternative title for the bill, to call it the “Reversal of 120 Years of Criminal Law Burden Bill”, because as this bill progresses through Parliament we will see a distinct change in the way in which that burden of proof is to lie on applicants. There is a distinct change in the way in which that cause of action must be met. Specifically, the harm that is caused is not in any way linked to a breach of the legislation’s concerns. That is a unique position, the seriousness of which should not be underestimated.

The officials and others who came before the Education and Science Committee and the members of that committee know that I have raised that issue a number of times. As we proceed through the various clauses of the bill, I will certainly—if I am lucky enough to catch the Chair’s eye—go into those matters in some detail. I do worry when the burden of proof is flipped in that way, and I do worry that there needs to be far more linkage in terms of causation between a breach of the legislation and the harm that is caused. To separate those two things out really does fly in the face of a considerable period of common law history in New Zealand.

It is also worth picking up on Brian Donnelly’s points about local government’s role in all of this, because this is the “Local Government (Caught Down the Creek Without a Paddle) Bill” when it comes to the issue of GE. I am a bit worried now because I have the Greens nodding, including “Mr Development” over here, “Ian Ewen – Cul-de-sac”, a man who wants to see everything go backwards. What worries me most about the introduction of this bill, with regard to the issue of GE, is that the various units of local government have now been put in a position where they are unsure—as the Government members of the select committee stated in the committee’s report—how this legislation will apply to their rights if, for instance, they wish to declare a GE-free area.

Sue Kedgley: They’ve got no rights.

SIMON POWER: Sue Kedgley says they have no rights. That is certainly what the Government members say. I believe what will happen is that that will end up in the courts. Nothing is more sure than the fact that that particular issue will end up in the courts, and we all know who wins when issues end up in the courts: the lawyers.

Jill Pettis: Yes, the lawyers.

SIMON POWER: Mrs Pettis is right. Some good will come of that. Let us be clear about one thing: the GE issue was signalled very strongly by the officials at the select committee. I know that although Jeanette Fitzsimons and I perhaps disagree on the outcome, we do agree on the fact that that area is very unclear and uncertain. I stated unequivocally at the select committee that the responsibility of Parliament is not to encourage a whole lot of judicial activism in areas like that, but rather to seek clear and certain rules that local government and others will be able to follow.

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

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

Hon BRIAN DONNELLY (NZ First): I raise a point of order, Madam Chairperson. We cannot hear what you are saying. We heard no call for a vote here on the Opposition benches, at all. How are we supposed to respond when we are not able to hear you call a vote or call that the question has been put?

The CHAIRPERSON (Ann Hartley): I thank Mr Donnelly. I will call for order next time.

JEANETTE FITZSIMONS (Co-Leader—Green): I raise a point of order, Madam Chairperson. It is very early to take—

The CHAIRPERSON (Ann Hartley): There can be no point of order on the closure of a debate.

JEANETTE FITZSIMONS: A lot of members who have not yet spoken at all are seeking to speak. Our party has never been known for filibustering. A lot of things need to be said about this bill, and we have had only one call. I am seeking a call on the title.

The CHAIRPERSON (Ann Hartley): There is no debate on the closure.

Dr PAUL HUTCHISON (NZ National—Port Waikato): I raise a point of order, Madam Chairperson.

The CHAIRPERSON (Ann Hartley): I will not take a point of order on the closure.

Dr PAUL HUTCHISON: I am not making a point of order on the closure.

The CHAIRPERSON (Ann Hartley): Lindsay Tisch called for a point of order first.

LINDSAY TISCH (Junior Whip—NZ National): I raise a point of order, Madam Chairperson. I will not query the decision you have made, but since this bill is probably the most controversial bill that will be before Parliament over the next few months and needs full disclosure and debate, I ask that there be a free, frank discussion on the commencement and on all the parts following that from all parties. I take on board the point that Jeanette Fitzsimons has made. She has been very much part of the select committee process, and for the Green Party not to have had more than one call on the title was very unfortunate. We want every party to be able to have as many calls as possible—

The CHAIRPERSON (Ann Hartley): The member has made his point. There is—

LINDSAY TISCH: My point is simply this: I want an assurance that for the parts coming up after this clause there will be opportunities for as many speeches as possible. That is what I ask for.

Stephen Franks: Point of order—

The CHAIRPERSON (Ann Hartley): I do not need any more assistance. I am dealing with Mr Tisch’s point of order; that is all. There is no debate on the closure.

Phil Heatley: Point of order—

The CHAIRPERSON (Ann Hartley): No, please be seated.

Phil Heatley: This is a new point of order—

The CHAIRPERSON (Ann Hartley): Please be seated. I am dealing with Mr Tisch’s point of order. I take his point and tell him that, certainly, that will happen.

Stephen Franks: Point of order—

The CHAIRPERSON (Ann Hartley): I ask the member whether this is a new point of order.

Stephen Franks: Yes, it is.

The CHAIRPERSON (Ann Hartley): Point of order, Mr Franks.

STEPHEN FRANKS (ACT NZ): I raise a point of order, Madam Chairperson. When the closure procedure was in progress there was such an uproar that I did not hear the vote being called for. I suggest, at least, that the debate on clause 1 proceed. I do not believe that Mr Eckhoff voted either way. He did not hear the vote being called; I did not hear it. The first I knew that there had been a vote, or what was purported to be a vote, was when I heard Mr Tisch calling for—

The CHAIRPERSON (Ann Hartley): I thank the member. That point has been made already. Mr Ewen-Street, is this a new point of order?

Ian Ewen-Street: Yes, it is.

The CHAIRPERSON (Ann Hartley): Mr Ewen-Street.

IAN EWEN-STREET (Green): I raise a point of order, Madam Chairperson. I would like to seek the leave of the Committee for my two colleagues Jeanette Fitzsimons and Sue Kedgley to give speeches on this particular clause. There may be members from other parties in the Committee who wish to speak, and who feel they have been unfairly shut out of the discussion.

The CHAIRPERSON (Ann Hartley): The closure cannot be debated. Members must seek leave for themselves.

IAN EWEN-STREET: I seek leave to make a further contribution to the Committee in this debate.

The CHAIRPERSON (Ann Hartley): Leave is sought. Is there any objection? There is. I will put the vote. All those in favour say “Aye”; to the contrary—

Simon Power: This is the vote for the closure?

The CHAIRPERSON (Ann Hartley): Yes.

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

Ayes 60

Labour 52; United Future 8.

Noes 48

New Zealand National 20; New Zealand First 13; ACT New Zealand 6;Green Party 9.

Motion agreed to.

That clause 1 be agreed to.

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

Ayes 93

Labour 52; New Zealand National 20; New Zealand First 13; United Future 8.

Noes 15

ACT New Zealand 6; Green Party 9.

Clause 1 agreed to.

A party vote was called for on the question,

LINDSAY TISCH (Junior Whip—NZ National): I raise a point of order, Madam Chairperson. I cast an incorrect vote. National is voting for the title, so that is 20 votes in favour.

Hon BRIAN DONNELLY (NZ First): I raise a point of order, Madam Chairperson. It was the same situation with New Zealand First, because of the confusion around the vote. We wish to vote in favour of the title, so could we—

The CHAIRPERSON (Ann Hartley): I tell the member that I called for the vote on clause 1. Could the Clerk call those again, please?

LINDSAY TISCH (Junior Whip—NZ National): I raise a point of order, Madam Chairperson. Before the result is announced, I ask whether my ACT colleagues want to reconsider their vote. I am buying a bit of time in case they do.

GERRARD ECKHOFF (ACT NZ): I raise a point of order, Madam Chairperson. I did not hear a word of what Mr Tisch said, but we are voting against clause 1.

The CHAIRPERSON (Ann Hartley): Please, there must be silence during voting. Mr Tisch has raised a point of order, but it is not really a matter for a point of order.

LINDSAY TISCH (Junior Whip—NZ National): Well, it is, because of the confusion that we have had over the vote. We understand, at the National end of the Chamber, what the votes are and what we are voting on, but my colleague Gerry Eckhoff might not have appreciated that the vote was for the title. By buying him some time I am giving him the opportunity, if he wants it, to reconsider ACT’s position before the vote is actually announced. At that stage, it may be too late.

Part 1 Preliminary provisions

JEANETTE FITZSIMONS (Co-Leader—Green): I raise a point of order, Madam Chairperson. Before we start the debate on Part 1, I would like you to consider the fact that normally the debate on the clause that does nothing but set the coming-into-force date of a bill is a very narrow debate, and one might expect it to be over quite quickly. There is not usually much that can be said about it. In the case of this bill, however, the clause is actually very significant. Added to that, Part 2 contains virtually all the other measures that are controversial in the legislation, and it is to be taken as one question. So I am asking whether you will allow an extended debate on Part 1, because that is one of the very substantive matters in the bill.

JILL PETTIS (Junior Whip—NZ Labour): I want to speak to Standing Order 139, “Acceptance of closure motion”, because that is what the member is alluding to, at the end point. I point out that standing up and telling the Chair how to do the job is quite unparliamentary and is relitigating a Standing Order that has been in place for as long as this Parliament has been around. There is no debate around a closure motion. Members should not direct the Chair how to execute the business, but leave it to the Chair to decide.

The CHAIRPERSON (Ann Hartley): I want to make this point, once and for all. There will be no discussion during points of order—Mr Heatley is lucky to still be here, and he has been warned. I cannot hear the points of order, if members are making a noise. I remind the Committee that Ms Fitzsimons was asking whether we could have a wider-ranging debate on the commencement date.

SIMON POWER (NZ National—Rangitikei): In terms of the Standing Orders, I think Mrs Pettis is dead right. However, when you took the closure on the title you indicated that you would allow a wide-ranging debate on the remaining parts. I am not sure whether Ms Fitzsimons was in the Chamber then, but you did indicate that the remaining parts would be dealt with more liberally in respect of the numbers of calls you would allow.

The CHAIRPERSON (Ann Hartley): I am taking this from what Ms Fitzsimons said. The point is that the title debate is on the title only. The commencement debate is on the commencement only. As per the Standing Orders, members often seek that the debate be wide ranging. I understand that that is what Ms Fitzsimons is seeking.

MARK PECK (NZ Labour—Invercargill): Very simply, this matter has been extensively canvassed by the Education and Science Committee. The member might have had a point, if there had been no select committee process. But there has been a very full debate in the select committee so there are no grounds for you to do anything other than chair the Committee in accordance with normal procedures.

JEANETTE FITZSIMONS (Co-Leader—Green): I raise a point of order, Madam Chairperson.

The CHAIRPERSON (Ann Hartley): I just want to clarify that the member wants to set aside the Standing Orders so that we can have a wide-ranging debate on the commencement clause.

JEANETTE FITZSIMONS: No, Madam Chair, that is not what I was seeking, and that is the point I am wanting to clarify now. I was not asking that leave be given—or even sought—to extend the debate beyond the question of the coming into force date. I was asking the Chair to take into account, when accepting closure motions, that the coming into force date is a very central matter to the bill and therefore there were likely to be a number of speakers wishing to draw out the implications of the coming into force date, with regard to the matters covered in the bill. I was not asking for a suspension of the Standing Orders. I was not asking for leave of the Committee. I was not telling you how to do your job, or debating the closure. I was merely drawing attention, as I have heard many members in the Chamber do, over the 7 years I have been here, to the fact that this next clause is a substantive one, not just a technical one as often is the case, and that therefore members would like the opportunity to debate it properly.

LINDSAY TISCH (Junior Whip—NZ National): This is exactly the point that I made, following the closure on the title. I sought an assurance from you that there would be a wide-ranging debate on these, and you ruled that you would take that into consideration. That is all Jeanette Fitzsimons is asking for, but all members want to be assured that this debate will be a debate with speeches allowed and calls to be taken by as many members as want to take them. As I said earlier, this bill is one of the most controversial measures that we are going to deal with. That is all the Green Party is asking for, and you gave an assurance—indeed, we could check the Hansard about what I asked at that time and what you said. That is all we are asking for. We are not asking for the Standing Orders to be set aside. We just want a fair go.

Hon BRIAN DONNELLY (NZ First): I am wanting to endorse that we are not telling you how to do your job, but just bringing this to your attention so that you comprehend that this commencement clause is much more significant in this case than in most cases. Therefore we ask that it could be more fully debated—not broadening the scope of it but just more fully debated in terms of time. The other thing I want to draw to your attention is that Part 2 is it! There are Parts 3, 4, and 5 but I do not think anyone is going to be able to take a call on them. But we really do require very, very full opportunity in Part 2. I just bring it to your attention, so that you can make your own judgment call.

The CHAIRPERSON (Ann Hartley): I take the member’s point, and I am sorry if I misinterpreted what Jeanette Fitzsimons said. Certainly, what Mr Donnelly and Mr Tisch have said is clearly understood, and I do not think we need to relitigate this any more. I have made the ruling.

Dr PAUL HUTCHISON (NZ National—Port Waikato): In commencing this debate, it is important to reiterate to the people from United Future who seem confused that we are also commencing four future Acts. Those four Acts are the Hazardous Substances and New Organisms Amendment Act, the Agricultural Compounds and Veterinary Medicines Amendment Act, the Medicines Amendment Act, and the Biosecurity Amendment Act. The commencement date states 30 October 2003, and it has huge significance because there appears to be great confusion as to whether this legislation actually removes the moratorium, and it clearly does not. The moratorium was set down to be removed, anyway. In fact, there is confusion over where a legislated moratorium came into place through the Labour Government, and where there was a voluntarily industry moratorium that came into place in 2000 and was observed by industry throughout New Zealand until such time as the Labour Government chose to put in its traditional blunt instrument, a moratorium. Nevertheless, that happened, and this legislation is consequential to that being lifted, anyway.

However, what is really important is that New Zealanders understand the realities of this legislation and what will commence. There are several clues to that. The real probability of whether there will be commercial release of genetically modified crops in New Zealand is extremely low. That has been clearly reiterated from two sources. Firstly, about 2 months ago there was a conference at the royal society on biofarming, and there the chief executive officer of the Environmental Risk Management Authority stated quite clearly that he did not expect there to be any commercial release of genetically modified crops in New Zealand in the next few years. However, he said that there is a possibility that there may be a few applications for conditional release, and that could include conditional commercial release. These distinctions are not well understood by the majority of people in the public and they are confused by many parliamentarians, as well.

But to add to that, the other source comes from the Minister herself in answering questions from Jeanette Fitzsimons. She herself said in this Parliament that the reality of commercial release in New Zealand under this bill is just about zilch while she happens to be the Minister for the Environment. She might like to take a call and reiterate that, but it happens to be the fact of the matter, as I understand it.

So when we talk about this commencement date we must also consider whether this legislation is very much a Clayton’s moratorium that has been imposed by the Minister for the Environment and that, indeed, instead of there being a blunt instrument, she has just transferred that over to a somewhat insidious Clayton’s situation. It is very, very important to understand the implications for that in situations that might cause New Zealanders to rethink the circumstances in New Zealand, such as an epidemic of cholera, for instance, where, indeed, it is important to have legislation in place when there may be a need to have a genetically modified organism introduced into New Zealand reasonably quickly to save many hundreds of thousands of lives. That is just one possibility. It is important to be aware that this commencement date has a lot of significance, and to understand what differentiates.

What has concerned me a little bit has been one of the amendments put up by New Zealand First, which is somewhat unusual. In fact, I would call it an act of pre-medieval Druidism by New Zealand First.

Hon BRIAN DONNELLY (NZ First): Obviously, the commencement date is very important because it is 30 October. The significance of that is that it is the day after the moratorium expires that was put in place through the Hazardous Substances and New Organisms Amendment Act 2001. It is important to realise that when the moratorium comes off we will not see this country flooded with GE crops the next day, as some people would have us believe. It will simply not happen. What will happen is that people will start to prepare some applications for conditional commercial release. It will not be immediately in the food and cropping area. Tony O’Connor’s article recently stated that we are looking at several years away. In relation to rye grass, it will be 5 years away.

Ian Ewen-Street: So why the hurry?

Hon BRIAN DONNELLY: That is a very good question. For a start, a degree of hurry in terms of putting in place certain things is necessary because there are certain applications of this new technology that New Zealand First believes can proceed in the best interests of New Zealanders and humanity. However, as I suggested in my question to the Minister in the House yesterday, one of the things that has to be recognised is that there is no evidence, either empirical or theoretical, that demonstrates that any harm has been caused to human health from the eating of GE foods. That has to be recognised. However, Dr Hutchison fails to understand that New Zealand First is talking about economic risk—an economic risk based on people’s perceptions.

Dr Hutchison, even in his speech, recognised that the majority of the public do not understand these issues. If the majority of the public do not understand these issues, nevertheless it will still influence some of their consumer decisions. What we did not get, as a result of the process that we went through of investigating what has taken place over the last 2 years, is any evidence from the Environmental Risk Management Authority that it had in place a robust enough mechanism to be able to determine risk around the big economic picture of New Zealand and New Zealand’s exports.

In fact, that is demonstrated by two things. First, Cabinet itself has asked the Environmental Risk Management Authority to do more work and for that to be reported back in over a year’s time. So the Cabinet committee is not happy with it, and the Minister said she will use her call-in powers for the first application for commercial release, suggesting that she does not have confidence in the mechanism that the Environmental Risk Management Authority has. Yet New Zealand is a food-exporting nation—we are absolutely dependent upon our food exports. If we are going to give the perception that we are releasing GE foods—and we do not know what impact that will have on our markets overseas, because we do not have a risk-management system in place—then it would seem to us in New Zealand First, particularly when, in fact, no applications will come in for the next couple of years, that that is rather stupid, and purely and simply proceeding on an ideological basis rather than a practical basis.

So New Zealand First says: “Yes, it is important this legislation is put in place by 30 October 2003.” The legislation also puts in place some other further rigid regulations. However, we do not believe that this legislation should be giving possibilities of applications for commercial release of GE foods at this particular point in time. Therefore we will be amending the legislation, or putting up an amendment. If that fails we will be putting up a member’s bill to ensure that we can re-impose a moratorium on certain applications—just certain ones—so that we can safeguard New Zealand’s economic future.

MARK PECK (NZ Labour—Invercargill): I want to take a call on this, because—it does not need a lot of discussion, in my view; the clause is very short, but it does do exactly as Brian Donnelly said: it makes sure that once the moratorium lifts we have a regime in place that will manage the way in which hazardous substances around these particular new organisms are dealt with into the future. The only other option is for the moratorium to totally drift off into the wilderness, and that is why the ACT party voted against the title, and will probably vote against the bill.

Ian Ewen-Street: I voted against the title.

MARK PECK: OK, that member voted against the title. I suppose that is consistency, and we do actually appreciate consistency in Parliament, and I congratulate the member on that. But let me say this in response to Brian Donnelly’s concerns about whether people are ready to release, and things of that ilk. It is important that when the moratorium is lifted there is a consistent, understood, and coherent regulatory regime around which genetically engineered research can be undertaken. Because the lead-in time on these matters is not short. Having spent some time—

Ian Ewen-Street: Why the hurry?

MARK PECK: That member is one of those who would have said that electricity was a huge problem. Indeed, the economic history of electricity shows that there was a good 20-year lead-in period before there was any significant positive economic effect for our economy. This technology, like any other, will probably have a very similar lead-in period. But as far as this is concerned, I am saying that the scientific community needs an opportunity to plan its science into the future. The regime needs to be in place. It needs to be clearly understood. Otherwise we will see that those who seek to develop the technology in New Zealand will go elsewhere. That is clearly the significant problem that exists if we do not get this legislation passed, and if we do not provide those who will seek to put their effort into developing new ideas—and not just the investment into developing new ideas—a clear understanding of how they can operate.

I was privileged to have a look at three trials, one at the Lincoln Centre for Resource Management, one at the Forest Research Institute, and one at Ruakura Research Centre. I want to talk about the potato trial, which has been variously trashed by some of those who decided they wanted to go and breach the biosecurity of that particular trial. We are talking about a scientist who has dedicated 12 years of her life to that problem. Let me tell members about this scientist. She is not a mad scientist with long hair and bushy eyebrows; she has children. She actually wants this country to be a good place in which to bring up her children, and there is no way she would go about developing something that would put her family at risk.

I say to those who oppose this sort of technology that they cannot have it both ways—either on food or on medicine. I find it fascinating that in this debate we will never see someone who is opposed to this technology stand up and say that we should not let cystic fibrosis sufferers take advantage of the genetic engineering research in this country. But they will not let us eat a bit of genetically engineered corn.

I say to the member who wanted to table her chips in the House the other day that she should have given them to me. I would have been into them—in hunks. I do not give a brass rat’s whether they are genetically modified or whether it is conventional. I am absolutely certain that I have eaten genetically engineered corn when I have been overseas. I say to those members that it really is time they grew up and realised that this technology provides us with some significant advantages in the way we will operate in the future. We have some of the smartest scientists in New Zealand. [Interruption] I thank Sue Kedgley, who has just given me some chips. I appreciate that. They are great stuff. Could I pass them around? I just want to make the point that we need to encourage our scientists to develop their experiments. We need to ensure that we are able to take advantage of technology, because I would hate, in 20 years’ time, to find us sitting down and saying: “Oh deary me. Why did we miss the boat?”.

GORDON COPELAND (Whip—United Future): I raise a point of order, Madam Chairperson. I waited until the member finished his speech, because it was a very good speech. I am a new member, but I have a feeling that somewhere in the Standing Orders they state we are not supposed to eat chips in the House.

The CHAIRPERSON (Ann Hartley): The member is perfectly right.

Mark Peck: I withdraw and apologise, but I cannot give the chip back.

JEANETTE FITZSIMONS (Co-Leader—Green): Part 1, which sets the date for the bill to come into force, is the reason I cannot agree with Brian Donnelly that this bill is not about the lifting of the moratorium, and does not provide for the lifting of the moratorium. I have to admit that at first I was wrong on this. Some months ago I went around the country trying to explain to New Zealanders that this bill was not the bill that lifts the moratorium, that that happened last year, and that this bill was about putting conditions in place. Then, when I thought about it carefully, I realised that I was wrong. This is the bill that, not in law but in practice, lifts the moratorium, because without this bill no applications for release will be approved. Under the current law, only applications for full release can be approved, a buffer zone cannot be set, a code of practice cannot be required, monitoring cannot be required, and no conditions at all can be required to protect the neighbours of the crop. There will be no approvals under the law as it stands. So if this bill does not go through, even I could accept the lifting of the moratorium—how about that! I know that, in practice, there would be no releases, and our objective has always been to prevent release into the environment.

We have all had some letters from members of the community who are pleading with us to keep the moratorium in force by amending this bill. The National Beekeepers Association has outlined very carefully its concerns that bees cannot be stopped from flying where they are meant to fly and cannot be stopped from picking up pollen, and it is really concerned that the geographic information system whereby bee-keepers are supposed to get their information then go to all the trouble of moving their hives somewhere else, only to find that somebody then grows a crop in the next paddock, is a completely impractical way to observe the recommendation of the royal commission that a strategy should be in place to protect bee-keepers. We have had letters from the Soil and Health Association, Organic Farm New Zealand, and from the Bio Dynamic Farming and Gardening Association setting out in detail their reasons that the legislation will affect them very badly.

We have had a letter from the Cystic Fibrosis Association stating that sound science saves lives, but not offering a single shred of evidence for what it is talking about. The association was asking for the moratorium to be lifted, but it did not give us any evidence, research, or argument.

Had I been able to speak to the title debate, I would have suggested that perhaps the bill should be called the “Regulatory System for Totally Hypothetical Things That Do Not Exist Yet Bill”. In fact, there are no GM crops that offer any benefits to the consumer or to the New Zealand economy. They are at least 5 years away, and we are setting up a regulatory system in this bill for things that do not yet exist. That is leading 68 percent of New Zealanders, our big food exporters, and everybody else I talk to, in the media and everywhere else, to ask what the hurry is and why we do not wait. For that reason I invite members to support the amendment from my colleague Mr Ian Ewen-Street that simply changes the date to 5 years hence, which will do us fine.

However, the Government has been so keen to see the moratorium expire that it has legislated to do it twice. A clause that was inserted in the bill at the last minute, that was not even in the officials’ report back to the committee, and that I discovered only after the committee had deliberated, provides for Part 5A of the Act, as inserted last year, to be repealed. New clause 39A provides for that part to be repealed when, in fact, it already has an expiry clause in it. So we are repealing it twice—so determined and so anxious is the Government that not a shred, not a skerrick, of moratorium could possibly remain after 29 October. That is a sign of true desperation.

There is no need for clause 2. There is no need for this bill. The bill would be OK if we put it on hold for 5 years, if we passed it with a 2008 date for it to come into force, and had 5 years to think about the amendments that we might need to pass before it actually happened.

GERRARD ECKHOFF (ACT NZ): I think I heard the point being made, that in fact the commencement of this bill will occur on 30 October, which is the day after the moratorium is lifted—not wiped out by law; Jeanette Fitzsimmons is absolutely right—on 29 October. This bill will come into force the very next day, on 30 October. There is quite a significant difference.

To me, one of the most important reasons for the lifting of the moratorium and, indeed, for the commencement of this bill is that, with some degree of luck and a fair wind, we may well see the hysteria that has been generated by the Greens over the commencement of this bill start to subside once the realities start to strike. I shall read an article on this subject from the New Zealand Herald on 10 July 2003: “A man described as ‘a brilliant scientist’ ”—we do not have too many in New Zealand—“has quit his job after breaching strict containment rules imposed to stop the spread of genetically modified organisms.

“Dr Richard Forster, who was chief scientist of the plant division at Genesis Research and Development, was suspended last month after he took willow plants from a containment facility in Parnell to his property … near Pukekohe. He chose to resign even though the willow plants had not been genetically modified.” That article illustrates vividly why we have to move forward, and relatively quickly, to stop this nonsense. I have not had time to find out what exactly has happened to Dr Richard Forster, but it seems to me that this country can ill-afford to lose scientists of this nature—“a brilliant scientist”, as he has been described in the New Zealand Herald.

On 30 October the science community will start to get a little bit of certainty surrounding the whole issue of GM crops and GM food, which seems to be occupying the minds of the Greens and a handful of other people at the moment. While we are talking about a specific date, I make the point that this technology is not new. It is not just 6 months old or a year old. We are talking about technology that is 30 years old.

Ian Ewen-Street: Rubbish!

GERRARD ECKHOFF: The Green member Ian Ewen-Street says “Rubbish!”. What a wonderfully descriptive term he uses! The first genetic modification, as I understand it, took place in America 30-odd years ago, when the ice-minus gene, as it was known, was inserted into strawberries. Other than Mr Ian Ewen-Street, I do not know of anybody who has turned into a strawberry parfait as a result of eating those strawberries. Thirty years is a heck of a long time to have some sort of stand-down period. In that time—and it is important to talk about time frames, because this part of the bill is talking about a time frame—over those 30 years, to my certain knowledge not even one person has become ill because of having eaten or ingested genetically modified food. Yet the Greens tell us that it is hugely dangerous, and too dangerous to release into the environment.

The Greens are perfectly happy to release products that are very closely related to marijuana. Those products come into this country without an environmental impact report. That seems to be perfectly acceptable to the Greens. We have the impact of kiwifruit in this country; in some areas it is decimating native forests. That seems to be OK. But when we talk about genetically modified products or organisms that may well have a huge future in this country, we are told that we should not proceed with releasing them.

I want to talk just briefly about another issue surrounding the importance of the enactment of the bill. It is a concern that I have as a member of the agricultural community. So few members of this country seem to understand—

Hon Dr NICK SMITH (NZ National—Nelson): It is a pleasure to participate in this debate, but I say that we are largely participating in an exercise of charades. I particularly challenge Mr Mark Peck on his contribution, and I want to recall a little bit of history as we approach the lifting of the moratorium.

I well remember during the 1999 election campaign when Labour members said that the regulatory regime was not nearly safe enough, that there were all these concerns about genetic technology, and that the big, bold Labour Party was going to save the nation with a moratorium.

Mark Peck: And we did!

Hon Dr NICK SMITH: I tell Mr Peck that the problem Labour has is that it has created the whip that it is now being flicked with as a Government. Right throughout 1998 and 1999, Labour members raised the concerns that the public had about gene technology, and now it is coming back to bite them on the bottom.

I tell Mr Peck that the truth is that the provisions provided in this bill change little. The vast bulk of these provisions have been in the operational plans of the Environmental Risk Management Authority all the way along. There is the odd provision that makes it worse, but the reality is that in 1999 we had a pretty robust and good regulatory regime, and the royal commission concluded that. The moment the moratorium was put in place it was always going to create a huge tension at the time it was lifted. It is not much different from when Sir Robert Muldoon introduced the old wage and price freeze—they are the easiest things in the world to put on, and they are the hardest things to take off. I say to the Minister in the chair, the Hon Marian Hobbs, that she should be honest—she played politics with this issue for all it was worth in 1998 and 1999, and she spent $6 million of public money on a royal commission. It added little to the argument.

Mark Peck: Have you read the report?

Hon Dr NICK SMITH: Yes, I have read every single page of the report. The thing that is interesting about it is that it added so little to what Ministers said. The Minister in the chair was one of a number of Labour members who ran around the country saying that a trial of 400 sweetcorn plants was irresponsible and that it was wrong, even though every single plant had to have a bag that was pollen-proof and waterproof. They said that we were taking extraordinary risks. Yet 12 months later when they found out that, in effect, 28,000 GM corn plants had been inadvertently introduced, they covered it up. They played secrets.

Members on this side of the House say: “Let’s be honest and upfront with New Zealand. We have GM in the food chain right now, we should be honest with the public about it, and it is no risk.” Members on this side of the House are not like the Minister, Marian Hobbs. When she was asked whether she would eat GM food, she said: “Ah, I don’t know.” What sort of answer is that from a Minister of the Crown in charge of our GM regulations?

I have to speak on behalf of members on this side of the House. If the food has been properly approved by the proper regulatory authority, I am happy to eat it because I have confidence in the regulatory authorities. It is a confidence I have had since 1996, when the legislation was passed, and it is a confidence that members on this side of the House continue to have. I say again to Mr Peck, to Ms Hobbs, and to the Prime Minister that they have got themselves in this pickle over GM because they have played politics when they should not have. If they want to run the science-based argument, why did they not run that argument in 1999? This has been an exercise in “rejiggery” for the Labour Party.

Mark Peck: What the hell is “rejiggery”?

Hon Dr NICK SMITH: What it means is that in 1999 Labour members raised the public’s fear about GM, but when they got into Government they had to try to control the dragon they had created themselves.

Mark Peck: Have you read my member’s bill?

Hon Dr NICK SMITH: The member opposite is one of those in the Labour Party who made a huge deal out of the moratorium. They said that we had to have the moratorium because the controls were not good enough. Three years later what we have in this bill is very minor tinkering. I challenge members opposite to be a bit more honest about this issue.

Hon PAUL SWAIN (Minister of Transport): I move, That the question be now put.

IAN EWEN-STREET (Green): I propose an amendment to this clause, to change the date on which it comes into effect to 30 October 2008. That will give us another 5 years. The reason for my amendment is that, as my colleague Jeanette Fitzsimons says, this is the bill that enables the so-called protections to be put in place for the expiry of the moratorium. The moratorium itself initially was put in place so that the recommendations of the royal commission could be enacted. That was a good idea. However, they have not been put in place. Many of the royal commission’s recommendations still have not been satisfied.

I can see the Minister smiling, but she knows that the recommended research, such as into horizontal gene transfer, has not been completed. Horizontal gene transfer is a reasonably technical subject that I do not want to delve into. However, it does involve the asexual transfer of DNA between bacterial species at a plasmid level—that is, plasmid DNA transfers not through sexual reproduction but just by proximity. We just do not know what the consequences of that will be. I have been informed that, as we stand now, the research on horizontal gene transfer is some years away from completion.

The Minister, Mark Peck, and others say that nothing is in the pipeline in terms of open release of GE into the wider environment. If that is the case, what is the hurry? Why do we have to do this right now? I know that Labour members have painted themselves into a political corner, but a test of their character would be for them to say: “We accept that we have made a mistake. We accept that what we thought we could do we are not able to do. Let’s put it off for 5 years. Let’s take the pressure out of the situation, and let’s get it all sorted out before we allow the moratorium to expire.”

Another of the recommendations of the royal commission that has not come to any satisfactory conclusion is the question of coexistence between genetically engineered and non-genetically engineered crops. I have heard the Minister talk about case by case situations. I have heard about buffer zones, and things like that. What interests me is the report commissioned by that other pro-GE person, Tony Blair, in the UK. He commissioned a report on coexistence. He wanted to prove to the public of Britain that coexistence was possible, and they should therefore listen to him. The report he got back—the report he himself commissioned—was highly embarrassing, because it proved beyond any doubt at all that coexistence could not happen; that it was a physical impossibility.

I have heard the Minister of Agriculture and Forestry mutter about a 5-kilometre buffer zone. That sounds reasonable. It does overlook a few facts, though. The first is that bees can fly more than 5 kilometres, and regularly do when they are foraging for pollen. Who will stop the bees from flying from a non-GE place into a GE place, and back again? Seriously, will we put up signs saying “No bees past this point.”? The bees do not care. Can the Minister come up with any solution? She is nodding. I am looking forward to hearing what the solution is. Can she also come up with a solution as to why pollen will not be borne on the wind for many, many kilometres? We get pollen from Australia arriving here on the wind. A 5-kilometre buffer zone will not stop that. One further question for Mr Peck, who, I am led to believe, is a highly intelligent man—

David Benson-Pope: That argument has gone right out of the window.

IAN EWEN-STREET: Okay, I have blown it—a 5-kilometre buffer zone is actually a 5-kilometre radius of a circle. A 5-kilometre radius circle—[Interruption] I withdraw and apologise for calling Mark Peck intelligent! A 5-kilometre buffer zone implies there is a 5-kilometre radius circle. A 5-kilometre radius circle has an area of 78 square kilometres. I want to know who owns the land in that 78 square kilometres.

DAVID BENSON-POPE (Senior Whip—NZ Labour): I move, That the question be now put.

SUE KEDGLEY (Green): I would like to speak in favour of the amendment to the commencement date that my colleague Ian Ewen-Street has tabled, proposing that the enforcement of this Act be on 30 October 2008.

One of the points my colleague made is that the whole premise of the royal commission was that we could allow all the different forms of agriculture—and this is the premise of this bill, as well—happily to coexist. The whole premise was that we could allow farmers who practise conventional farming, organic farming, or GE farming happily to coexist. That is the premise on which the royal commission reached its conclusion, and it is the basic premise underlying this bill. The trouble is that in the years since the royal commission came to this fundamental assumption, the whole idea of coexistence has proved to be a fallacy, or, indeed, a fantasy.

I wish that the Minister for the Environment—and Gerry Eckhoff and many others—would visit Canada. Canadian farmers embraced GE. They believed all the hype and that it was possible for coexistence to occur. Now we have the head of the Canadian National Farmers Union going off to England and saying to the farmers there: “Don’t touch the stuff.” We have the head of the Canadian National Farmers Union and the head of the Canadian Wheat Board exhorting Monsanto to withdraw its application for growing GE wheat in Canada, because they do not want it and because they have found widespread contamination of GE canola and other crops in Canada.

As the former Canadian Minister for the Environment said when he came to New Zealand, if widespread contamination of GM crops with regular crops in Canada—where there are thousands of acres of prairie—cannot be avoided, then sure as hell it cannot be avoided here. In Canada they have come to the conclusion that the whole idea of creating separation distances, which is the premise of this bill, is a nonsense. The Independent Science Panel in the United Kingdom, after assessing all the science, also concluded that it is impossible to grow some GE crops without contaminating organic and conventional produce. The whole premise of the royal commission, and of this bill, is therefore a nonsense.

My colleague has pointed out that many, many recommendations of the royal commission have not been implemented. Let me read just one of them. Recommendation 10.6 states that all parties concerned will work to resolve the Wai 262 and the Wai 740 claims currently before the Waitangi Tribunal as soon as possible. To my knowledge, absolutely nothing has happened to resolve those claims.

Progress reported.

The House adjourned at 5.56 p.m.