Thursday, 8 April 2004

Thursday, 8 April 2004

Thursday, 8 April 2004

Mr Speaker took the Chair at 2 p.m.

Prayers.

Business Statement

Business Statement

Hon Dr MICHAEL CULLEN (Leader of the House): Next week the House will begin a 3-week recess. When the House resumes on Tuesday, 4 May, priority will be given to the Corrections Bill, the Border Security Bill, the Criminal Records (Clean Slate) Bill, the Forests Amendment Bill, and, specifically on Thursday, 6 May, the first reading of the Foreshore and Seabed Bill. Wednesday is a members’ day in the first week.

Hon RICHARD PREBBLE (Leader—ACT): As I foreshadowed yesterday, I seek leave for the Government’s foreshore and seabed legislation to become Government order of the day No. 1, so that we can hold the debate and the vote today. I think it is desirable for the country to know whether the Government does command a majority.

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

Amended answers to Oral Questions

Question No. 3 to Minister, 30 March

Hon PAUL SWAIN (Minister of Corrections): On 30 March, in answer to a question from the Hon Tony Ryall, I advised the House that a number of people, including “that man”—referring to Mr Haydn Solomon—were employed as Department of Corrections staff in order to get the consultation going. I have since been advised that none of the individuals listed in the schedule that I tabled on 23 March have been employees of the department, including Haydn Solomon. They were, in fact, engaged by the department on a contract for services. I apologise to the House for the error.

Questions for Oral Answer

Questions to Ministers

Education—Voucher Funding

1. HELEN DUNCAN (Labour) to the Minister of Education: Has he received any reports on the possible introduction of voucher funding for education?

Hon TREVOR MALLARD (Minister of Education): Yes. I have seen a report advocating the devolution of bargaining for teacher employment agreements to individual school boards of trustees, a radical move that would go far beyond bulk funding and is a prerequisite for a voucher-type funding model. This proposal has been warmly welcomed and endorsed by the Business Roundtable, its early childhood subcommittee, and a former Tory MP who now works for private schools. This report is the minority report of the Education and Science Committee on the State Sector Amendment Bill (No 3), and it is the position of the National Party.

Helen Duncan: Does the Minister support the introduction of a voucher-funding system for schooling in New Zealand?

Hon TREVOR MALLARD: Absolutely not. Voucher-funding does nothing to improve educational outcomes. It effectively privatises education, and results in vastly increased gaps between those who can afford to pay tens of thousands of dollars per year in top-up fees to enter former State schools—now elite schools—and middle-income families who live next door to those schools. The gap just keeps on getting bigger and bigger.

Hon Brian Donnelly: Can the Minister confirm that last Wednesday in this House Drs Lockwood Smith and Wayne Mapp both stated that National, despite its failure during 9 years in Government to achieve its goals of bulk funding and site bargaining, next time round would go the whole hog towards its ultimate goal of coupon education?

Hon TREVOR MALLARD: I heard them indicate that—

Mr SPEAKER: The Minister can respond in a general sense. He is not responsible, of course, for those members’ comments.

Hon TREVOR MALLARD: While I was sitting in the chair last week, responsible for a bill going through, there were certainly comments made in that direction by two National Party members. The one point that I would make is that they do not go nearly as far as the lengths Dr Brash was promoting. I do agree with the person who said: “The flaw in the voucher scheme is that parental choice would depend on wallet size. Schools would rapidly become stratified based on fee size, and free public education would be dead.” Dr Nick Smith said that.

Māori Affairs, Associate Minister—Treaty of Waitangi Public Information Programme

2. Hon RICHARD PREBBLE (Leader—ACT) to the Associate Minister of Māori Affairs (Social Development): How does she intend to carry out her delegated ministerial responsibility relating to the Treaty of Waitangi public information programme over the next month?

Hon TARIANA TURIA (Associate Minister of Maori Affairs (Social Development)): My responsibility in this matter was in the policy development that led to the establishment of the programme. I am asking that the delegation be revoked as that phase is complete. I understand that this will be reflected when the next delegation list is tabled in Parliament.

Hon Richard Prebble: While the Minister still has the delegated responsibility in relation to the Treaty of Waitangi public information programme, will she now inform the public as to whether the foreshore and seabed legislation meets the Crown’s treaty obligations; if it does not meet those obligations, in what way does it not do that? [Interruption]

Mr SPEAKER: In so far as it relates to the ministerial—

Hon Dr Michael Cullen: I raise a point of order, Mr Speaker. The Minister may have a delegation for the information campaign, but that does not make her responsible for the Crown’s treaty obligations. That rests, presumably, with both the Prime Minister and the Minister in charge of Treaty of Waitangi Negotiations.

Hon Richard Prebble: I could not have been more clearly within the Standing Orders. I asked whether in relation to her ministerial responsibilities—which she has told us she still has not surrendered, and which are to do with public information—she would now inform the public.

Mr SPEAKER: In so far as it is related to her ministerial responsibilities, she may answer that part of the question only.

Hon TARIANA TURIA: It is clear to me that the public are very well informed on the foreshore and seabed policy.

Darren Hughes: Why did she decline the opportunity to take responsibility for the Treaty of Waitangi public information programme?

Gerry Brownlee: I raise a point of order, Mr Speaker. How can that question stand? The Minister has a delegation; she has not declined one.

Darren Hughes: My question asked why the Minister has decided not to take responsibility for the implementation of a public information programme. It is nothing to do with the delegation at all. The member needs a holiday.

Mr SPEAKER: No, no. The last comment is out of order.

Hon Richard Prebble: I actually have to defend the question. Supplementary questions are an elaboration of what comes from answers. We have just been told that one of the reasons why the Minister is not answering the question is that she does not like the job, and the member is now asking her why she does not like the job.

Mr SPEAKER: I ask the Minister whether she has declined to take that particular delegation.

Hon TARIANA TURIA: I will answer the question. My key role was in the design and development of the proposal. I did not consider it useful to retain any further involvement in the implementation of this project. My delegations are focused particularly on policy and strategic advice and do not include any responsibility for operational matters.

Hon Murray McCully: Did the Minister find that her total exclusion from membership of the ministerial committee overseeing the Treaty of Waitangi information programme was in any way an obstacle to carrying out her delegated duties as Associate Minister of Māori Affairs responsible for Treaty of Waitangi programmes; if so, in what ways?

Hon TARIANA TURIA: No.

Hon Richard Prebble: Would the Minister elaborate on her answer to my question: as the public are well informed on the foreshore and seabed legislation, are we to take it from that that the public are well informed that the legislation does not meet the Crown’s treaty obligations, or that the public are well informed that it does? Because until the Minister informs me, this member of the public has no idea what her view on that matter is.

Mr SPEAKER: In so far as it relates to the Minister’s responsibility, she may answer.

Hon TARIANA TURIA: I am sorry. The member will have to repeat the question.

Mr SPEAKER: Please repeat the question. I found it a little difficult.

Hon Richard Prebble: I will repeat it. Would the Minister please clarify the answer to my first question, where I asked her whether the foreshore and seabed legislation met the Crown’s treaty obligations, and her answer was that the public was well informed on the foreshore and seabed legislation. So the next obvious question is: does that mean that the public does not believe that the legislation meets treaty obligations, or that it does?

Hon TARIANA TURIA: I think that is for the public to respond to.

Hon Richard Prebble: I raise a point of order, Mr Speaker. I thought of objecting to the first answer; I did not ask what the public’s view was on the treaty. I asked the Minister her view, as part of her delegated responsibility. She ducked that question by saying that the public was well informed. I have now told her that this member of the public does not know what the public thinks about the foreshore and seabed legislation, so I have asked her, as Minister, what she thinks—and I think she should tell us. Either this Minister does support the treaty, as she tells us she does, or she does not. Otherwise, she is just sitting there and is just as guilty as every other Government that has failed to carry out the treaty.

Mr SPEAKER: The member cannot get involved in that sort of political comment, and he knows that. The Minister was asked whether she wanted to give an opinion, and she said she did not. She is perfectly entitled to do so.

Hon Trevor Mallard: Will the Minister confirm that the treaty information campaign that she has been part of developing will launch on 19 April-—[Interruption]

Mr SPEAKER: That is the only interjection to be made by that member this question time. He is very lucky that he is not getting a very early Easter break. Please repeat the question.

Hon Trevor Mallard: Will the Minister confirm that the treaty information programme that she has been involved in developing will start on 19 April, and that one of the lead advertisements for it will ask: “Did you know how close we came to speaking French?”.

Hon TARIANA TURIA: Yes.

Hon Richard Prebble: Is the Associate Minister of Māori Affairs willing to withdraw all of her criticisms of previous Ministers, whom she has criticised for not carrying out treaty obligations, when she is asked a clear question in this House as to whether legislation does or does not meet the Crown’s treaty obligations, and she is not willing to answer?

Hon TARIANA TURIA: The member is saying that I have criticised other members with regard to meeting treaty obligations. Perhaps he might enlighten me by naming them.

Rodney Hide: In her role in providing policy and strategic advice for the Treaty of Waitangi public information programme, does she believe it is important that a Government, in all its dealings, upholds the principles of the Treaty of Waitangi, and has she formed an opinion whether this Government has upheld the treaty with its foreshore and seabed legislation; if she has not formed that opinion, what explanation has she for that?

Mr SPEAKER: There were three questions there. The Minister may comment on two of them if she wishes.

Hon TARIANA TURIA: Yes, to the member’s first question. Secondly, that member and this House are well aware that I have opposed the policy on the foreshore and seabed.

Morbidity Rates—Looking Upstream

3. SUE KEDGLEY (Green) to the Minister of Health: What action will the Government take following the Ministry of Health’s Looking Upstream report, which concluded that diet is the main cause of death in New Zealand?

Hon ANNETTE KING (Minister of Health): Considerable work has already been done by the Ministry of Health on promoting healthy eating and the value of a balanced diet. Full details can be seen on the ministry’s website.

Sue Kedgley: Will the Government be substantially increasing the staff and resources that it allocates to improving nutrition, when, according to answers to written questions, there are only four staff working on nutrition issues in the Ministry of Health, and it spends only 3 percent of the health budget to improve nutrition and physical education?

Hon ANNETTE KING: I am certain that the Director-General of Health will, no doubt, take account of this matter when the ministry receives the implementation plan for the Healthy Eating—Healthy Action strategy, which is due out in the next month or so.

Sue Kedgley: Now that the Ministry of Health has identified that not eating enough fruit and vegetables killed more people in 1997 than alcohol, drugs, and acts of violence combined, will the Government extend its small pilot programme to distribute free fruit to schoolchildren to cover all schools and all pre-schools, and initiate a nationwide education programme to encourage children to eat more fruit and vegetables; if not, why not?

Hon ANNETTE KING: The pilot programmes that are taking place around New Zealand will be assessed and, no doubt, will be looked at to see whether the children actually eat the fruit. I think the 5+ a Day programme that has been running for some time has had some success, but the bottom line is that we can take a horse to water but we cannot make it drink. I say to the member that we can give people all the tools and education in the world, but there is no way that we can be in everybody’s home, telling people what to eat.

Sue Kedgley: Will the Government reconsider its views on junk food advertising during children’s television programmes, in light of the report’s finding that 11,000 deaths in New Zealand are caused each year by nutrition-related risk factors; if not, what is the point of commissioning such research if the Government will not act on it?

Hon ANNETTE KING: We have no plans at this stage to review what advertising is on television during children’s viewing time.

Sue Kedgley: Is the Minister concerned that The Warehouse is selling these giant, 1 kilogram Easter eggs, which contain 1 cup—[Interruption]

Hon Dr Michael Cullen: Could I invite the member to table the Easter egg!

Mr SPEAKER: The member is entitled to ask her question in silence, and this she will do.

Sue Kedgley: Is she concerned that The Warehouse is selling these giant, 1 kilogram chocolate eggs, which contain 1 cup of fat and 2½ cups of sugar, and which have wording on the packet that tells kids they are wimps and losers if they do not gorge on them, eating all of them in 15 minutes?

Hon ANNETTE KING: Healthy eating is about an overall diet, not just about enjoying chocolates at Easter time. I cannot remember a time when kids did not enjoy a lot of Easter eggs at Easter time. The thing I would worry about would be if it were promoted that children eat them every day of the week. I do not think many people here did not eat a bundle of Easter eggs at Easter time and enjoy them, because it was a time of treats. Special occasions are a time of treats. If that were promoted as a daily activity, then we would all be worried.

Hon Dr Michael Cullen: Can she confirm that there are small, boutique confectioners where the member could buy a great deal less for a great deal more if she wants to!

Hon ANNETTE KING: Yes, and I presume those eggs would probably have as much fat and sugar in them, as well.

Rt Hon Winston Peters: Having seen that display in the House, does the Minister recall the lines from the Home Alone movie, when Santa Claus leaves his business after working all day, finds a traffic ticket on his parked car, and says: “What’s next? Rabies shots for the Easter bunny?”

Mr SPEAKER: That is really not the Minister’s responsibility.

Hon ANNETTE KING: Fortunately, the Easter bunny is not my responsibility. But, no, I cannot recall that movie. It was such a long time ago. The main thing I remember about that movie is that I think he threw marbles on the ground and the fellow fell over. I am sorry but I cannot recall the other parts of it.

Foreshore and Seabed—Crown Ownership

4. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: Does her statement yesterday that the Crown will be vested with “full legal and beneficial ownership” of the foreshore and seabed also guarantee that all New Zealanders will be treated equally in relation to the Government’s proposed legislation?

Rt Hon HELEN CLARK (Prime Minister): The legislation guarantees that all New Zealanders will have access to the seabed and foreshore, and that anyone who considers that he or she is eligible may apply to have customary rights recognised and protected.

H V Ross Robertson: I raise a point of order, Mr Speaker. There is something going on in the gallery that is not permitted.

Mr SPEAKER: We are not commenting on that. I thank the Assistant Speaker for advising me, but they will be removed.

Dr Don Brash: Is it correct that, under the Government’s bill, a customary right holder will have an effective power of veto over resource consent applications, and can she explain to the House how such a provision can do anything other than underpin a making of financial demands, which most New Zealanders would call blackmail and extortion?

Rt Hon HELEN CLARK: As has been stated many times in the House, the customary right based on continuity of use is, in effect, a property right; therefore, if a proposed development has a significant adverse effect on the specified activity, then, clearly, the development could not proceed without approval.

Dail Jones: Is it the Government’s intention to ensure that, when any New Zealander is successful in obtaining a favourable decision before a court, this Government will not intervene in the decision other than to ensure that the successful New Zealander is entitled to the fruits of his or her successful case, as, for example, in the Ngāti Apa case, which confirmed a customary right relating to use, which has been transposed into the Foreshore and Seabed Bill with clear procedures?

Rt Hon HELEN CLARK: I understand that the answer, in short, is yes.

Jeanette Fitzsimons: Will the Prime Minister now take steps to ensure that New Zealanders can access those beaches and foreshores that are currently locked in by private landowners, in order to ensure equal treatment?

Rt Hon HELEN CLARK: There has been another Government consultation going on about access rights to certain areas in general. With specific reference to the riparian rights, which appear to stem mainly from some earlier, 19th century titles, I understand that it has been the policy of the Crown for many years to endeavour to claw back in that area whenever there is an issue of subdivision.

Stephen Franks: Why is she promoting a new ancestral right, a right previously unknown to our law or to English law and available only to Māori, which provides for local government decision-making influence and power to be inherited, and should we not condemn a racial inheritance of political power as feudal and racist?

Rt Hon HELEN CLARK: The special reference to Māori with regard to local government planning processes goes back to the 1991 Resource Management Act, which mentions as a matter of national importance the relationship of Māori, and their culture and traditions, with their ancestral lands, water sites, wāhi tapu, and other taonga.

Rt Hon Winston Peters: Can the Prime Minister confirm, in respect of the first supplementary question from Dr Brash, that the issue he refers to is one of status, and status alone, that there is no veto right as we have been hearing on the radio this morning, and that such information is blatantly misleading?

Rt Hon HELEN CLARK: I can absolutely confirm that there is no veto right associated with ancestral connection.

Hon Peter Dunne: How do the Prime Minister’s comments to National Radio this morning that she still favours the concept of public domain as the way of ensuring all New Zealanders have access to the foreshore and seabed sit alongside the agreement she entered into yesterday?

Rt Hon HELEN CLARK: The bill as it stands absolutely ensures that every Kiwi is able to enjoy those areas. My stated preference for quite a long time has been for there to be some concept of public domain, or the people of New Zealand incorporated. Unfortunately, it was not possible to get a parliamentary majority for that.

Dr Don Brash: How does the bill treat all New Zealanders equally, when it clearly provides, behind a facade of public ownership, for substantial Māori control of the management of the seabed and foreshore; or is it the case that under her Government some New Zealanders are more equal than others?

Rt Hon HELEN CLARK: There has been provision in New Zealand law since the 1990s for devolved decision-making and involvement in decision making. That goes back to the 1991 Resource Management Act—an Act passed by the National Government—which refers in section 33 to tangata whenua being able to become decision makers in their own right and to take direct control of certain areas.

Jeanette Fitzsimons: Why is the Government now saying that existing Resource Management Act coastal permits will extinguish customary rights forever, when, as recently as December, the proposal was simply to suspend the customary right until the coastal permit expired?

Rt Hon HELEN CLARK: That is getting into a level of detail I am not prepared to answer here. If the member puts down a specific question, I will come back with an answer.

Dr Don Brash: Is it correct that the effect of the Government’s proposed legislation will be that a New Zealander who does not hold a customary right will have to undergo the lengthy process of applying for a resource consent to undertake the same activity that a person who holds a customary right could carry out as of right?

Rt Hon HELEN CLARK: Customary rights by definition are those rights that have had continuity of use since 1840. If they do not have a resource consent applying to them now, why would they tomorrow?

Rt Hon Winston Peters: Can the Prime Minister confirm that the Te Ture Whenua Maori Act was passed by National in 1993, that it settled the Sealord’s deal in October 1992, and that in 1991 it passed the Resource Management Act, all of which go to the core of this issue; and with that in mind, how does she reconcile a statement such as this: “I am comfortable with the Fishing Act.”, made on Radio Pacific this morning by a very confused leader of the National Party?

Rt Hon HELEN CLARK: It is quite clear to me that both the 1991 resource management legislation and the fisheries legislation to which the member refers provide for devolution of decision making, and for extensive co-management—principles that the National Party was happy to subscribe to in the past.

Hon Dr Michael Cullen: Can the Prime Minister confirm that under the legislation passed in 1992 and 1996 there exist customary fishing rights that are rights held only by those who are customary fishers, and not held by other New Zealanders?

Rt Hon HELEN CLARK: Yes, I can confirm that the National Government passed such legislation.

Rt Hon Winston Peters: I seek leave to table the Oxford Dictionary, which demonstrates what the word “hypocrisy” is about, so that the public might understand what we are talking about.

Rt Hon HELEN CLARK: I raise a point of order, Mr Speaker. Can I seek leave that the member annotates the page he is referring to?

Mr SPEAKER: No, the Prime Minister cannot do that.

Jeanette Fitzsimons: I raise a point of order, Mr Speaker. Can I inquire whether the document tabled is the concise version, the standard version, the long version, or the very long version of the Oxford Dictionary?

Mr SPEAKER: No, the member cannot do that.

Document not tabled.

Hon Richard Prebble: How can the Government say the bill guarantees that all New Zealanders will be treated equally, when to claim a customary right under the bill one would have to show continuous occupation since 1840, and when under British common law and the law of adverse possession one has to occupy land for only 12 years in order to be able to have squatter’s rights; why is the Government going back 164 years, except for the very good reason that that means that virtually no Pākehā will be able to make a claim; and how can this Government and the Rt Hon Winston Peters possibly claim that this bill is not racist, when in fact only Māori will be able to make a claim?

Mr SPEAKER: There were three questions there. The right honourable Prime Minister can comment on two, if she wishes.

Rt Hon HELEN CLARK: The date of 1840 is when sovereignty was transferred from indigenous people to the British Crown, and the power, from that time, to legislate and regulate.

Health Care—Elderly

5. DAVE HEREORA (Labour) to the Associate Minister of Health: What changes has the Government announced to improve access to health care for older New Zealanders?

Hon RUTH DYSON (Associate Minister of Health): From 1 July all New Zealanders aged 65 and over enrolled in any primary health organisation will be eligible for a significantly reduced prescription charge and low-cost health-care. An extra $47 million has been provided for this initiative, on top of the $410 million that was first committed to the primary health-care strategy.

Dave Hereora: When did those aged 65 and over last have this level of access to low-cost health-care?

Hon RUTH DYSON: The last time that the Government subsidy for primary health-care was increased for older people was in September 1990. The subsidy was reduced in February 1991 under the previous National Government, and in 1992 was removed altogether for all people, including older people, except for those with community services cards.

Dr Lynda Scott: Why does a person have to be enrolled in the Government’s ideological model for primary health-care delivery—that is, the primary health organisation—to be able to access cheaper prescriptions and care; why can people not access cheaper care if they choose to go to a doctor who is not in a primary health organisation?

Hon RUTH DYSON: As the member will know, until all New Zealanders are enrolled in primary health organisations they are still able to use the community services card.

Marc Alexander: Does the Minister agree that preventing the neglect and abuse of older New Zealanders must be a health-care priority; if so, does she agree that the 105 audits of residential care-providers in the last 3 years as a result of abuse complaints, such as one drunken manager who, in response to a resident’s complaints about what proved to be a fatal ruptured bowel, said: “Take a Panadol and don’t ring me again tonight until she’s dead.”, demonstrate the need for this Government to finally get serious about elder abuse in New Zealand?

Hon RUTH DYSON: I absolutely share that member’s concern about the abuse of any older New Zealanders, particularly the more vulnerable ones who are in residential care. I look forward to continuing to work with the United Future party in opposition to those sorts of practices.

Algerian Refugee—Costs

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Immigration: Does his estimated cost to the taxpayer of $247,000 associated with Ahmed Zaoui include the cost of lawyers acting for the Crown, Security Intelligence Service costs, legal costs surrounding the removal of the Inspector-General of Intelligence and Security from the Zaoui case, and the cost of any experts or witnesses who have given information pertaining to the case; if so, what is the total amount?

Hon PAUL SWAIN (Minister of Immigration): No. As I advised the member yesterday, a number of costs associated with this case are yet to be determined. However, I have been advised that the Crown Law Office estimates that $114,700 of immigration costs have been incurred in relation to the Zaoui case to date. This estimate does not include costs charged to departments outside my portfolio areas. As a number of matters are still outstanding, I expect that associated costs will be higher than those estimated to date.

Rt Hon Winston Peters: Why is it that—and this question was raised as early as 29 July last year—we in this House and the public cannot get an idea of the up-to-date costs in any accurate way, when those costs may well be twice what the House has been told thus far; in short, up to $500,000 already if we include all the lawyers acting for the Crown, and not just the lawyers acting for Zaoui and on the teat?

Hon PAUL SWAIN: As I indicated yesterday and today, there are still a number of outstanding costs. But I think it is fair to say, as I have said before, that the ultimate costs of this case will be higher than the cumulative figures I have been able to estimate to date.

Keith Locke: Has the Government received value for money, given the gross incompetence of both the SIS and Government lawyers in the Zaoui affair, and are the lawyers who have been paid for advising the Government that Mr Zaoui cannot be transferred from prison to the Mangere Refugee Resettlement Centre the same lawyers who were paid for advice in the three Zaoui court cases so far—all of which the Government has lost?

Hon PAUL SWAIN: I reject the first allegation, but regarding the second allegation, the advice I have received is exactly as the member has alluded to.

Keith Locke: I raise a point of order, Mr Speaker. The Minister did not quite answer my question, because it was specifically: are the lawyers—

Mr SPEAKER: The Minister did answer. He said he rejected the member’s allegation, and that is a specific answer.

Keith Locke: Could I just—

Mr SPEAKER: Well, the member can, but the Minister has addressed the question perfectly, in my view, to the satisfaction of the Standing Orders.

Keith Locke: I wanted to make the point that I asked specifically whether it was the same lawyers in the question of the prison transfer as also gave advice in the other three cases. That is the specific question I want an answer to.

Mr SPEAKER: If members put statements into their questions, Ministers are entitled to answer by refuting those statements. That is addressing the question. If members do not want their statements refuted, they should not make them.

Hon Matt Robson: Have the Belgian and French Governments offered to help reduce costs by having extradition orders against Mr Zaoui, seeing that he has suspended sentences in their countries?

Hon PAUL SWAIN: Not that I am aware.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My concern is that although I went to significant effort to try to outline the costs, I am not getting an answer. I do not think that is fair and reasonable. What can I do about it?

Mr SPEAKER: All I can say is that the Minister addressed the question. It might not satisfy the member, as it often does not, but that is a matter for debate, for further question, and for other things to occur. I cannot do anything as Speaker about that.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I do not wish to contest your ruling, but when we ask for specific areas of cost analysis and evaluation and the Minister will not tell us, then, I am sorry to say, we are wasting our time here. I think I am entitled to it. He could at least have said that he would let me know next week, or the week after, but to get the same answer a year later is not reasonable.

Hon PAUL SWAIN: In relation to the last point the member made, the full costs will come out in due course—presumably, when this case is resolved. In the meantime, there are still ongoing matters relating to it, so it is absolutely impossible to say exactly what the actual costs will be at the end of the case. I have outlined the amount we have been able to estimate to date. There are a number of matters relating to areas outside my portfolio that I do not have estimates on just yet.

Foreshore and Seabed—Ancestral Connection

7. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: What requirements will be placed on individuals and local authorities by the recognition of what she has called “the ancestral connection Maori have with particular areas of the foreshore and seabed”?

Rt Hon HELEN CLARK (Prime Minister): There will be no additional requirements placed on individuals or local authorities as a result of recognising Māori ancestral connection with areas of the public foreshore and seabed. In preparing policies and plans under the Resource Management Act, local authorities will prepare these documents in consultation with holders of ancestral connection orders and will take into account relevant planning documents of holders of ancestral connection orders. Already, under the 1991 Act, councils prepare plans and policies in consultation with tangata whenua.

Dr Don Brash: Is the Prime Minister aware that the Attorney-General has previously confirmed that most or all of the New Zealand foreshore and seabed will be subject to claims of ancestral connection by Māori; if so, what can the “strengthened ability to participate in decision-making processes over the relevant coastal area.” in yesterday’s announcement mean, other than a preferential status for Māori over almost all the New Zealand seabed and foreshore?

Rt Hon HELEN CLARK: I think the member is confusing a number of concepts here. As I said, there are no additional requirements. We are endeavouring to ensure, by making it possible for there to be a register of ancestral connection orders, that those who should be consulted are consulted.

Rt Hon Winston Peters: Could the Prime Minister confirm that none of those processes involve anything other than status so that a council might know whom it is to consult—alongside European institutions, as well, if it could be put that way—and that there is nothing of the “special rights” to be found in the fishing legislation, legislation that Dr Brash is “comfortable with”?

Rt Hon HELEN CLARK: It is indeed, as the member says, about participation and processes, and these concepts have been in the law going back to the Resource Management Act, the fisheries legislation of the 1990s, and, of course, the Local Government Act.

Gerrard Eckhoff: Will the Prime Minister rule out applicants wishing to engage in marine farming around the foreshore having to pay for consultation with iwi who have established ancestral connection in a similar manner to the Department of Corrections, which paid $1.3 million for consultation with connected Māori?

Rt Hon HELEN CLARK: Issues around consultation under the Resource Management Act are something that can be considered in the review of the Resource Management Act that is going on. The Minister of Corrections is already on the record as saying that, in that particular consultation, some of the costs were excessive.

Dr Don Brash: Is the Prime Minister aware that constitutional law expert Dr Bill Hodge, on Newstalk ZB last night, said of the Government’s Māori customary right regime that they—being Māori—“become the landlord, I would say. They would simply charge rent; whatever the market will bear.”; can she confirm that that is her understanding of her Government’s bill?

Rt Hon HELEN CLARK: I can confirm none of the above, at all, and I might say, in recent months I have seen Dr Hodge make some quite ill-advised statements on television, which he has had to retract.

Dr Don Brash: Has the Prime Minister then seen Dr Hodge’s analysis that: “It means they can say ‘Nope, we will not consent, unless you do so on our terms,’ and that would involve payment of whatever the market would bear in terms of money, which is something like rent. I use the word ‘rent’ rather than extortion but, anyway, rent is a good enough term.”; can the Prime Minister confirm that that is how the concept of ancestral connection will operate?

Rt Hon HELEN CLARK: The member is absolutely wrong, because ancestral order is in no sense of any kind a property right. Every time the Leader of the Opposition opens his mouth on this issue he gets something dreadfully wrong.

Rt Hon Winston Peters: Can the Prime Minister confirm that Dr Hodge gave that legal opinion without having even seen the legislation, an act that reminds me of a certain leader in this House, who said he was going to repeal it before he even saw it, having taken legal advice from the woodwork teacher in his caucus?

Rt Hon HELEN CLARK: Yes, I did hear a commitment this morning that the National Opposition would want to repeal the legislation, even though those members had not seen it, but perhaps the policy of repealing it might lead them to flush out exactly what their policy is.

Hon Annette King: The emperor has got no clothes.

Mr SPEAKER: The member will not be in the House.

Dr Don Brash: Is the Prime Minister aware that Dr Hodge, on the basis of the documents released by the Government yesterday, stated: “Māori have had a complete victory” with the foreshore and seabed announcement; and does the Prime Minister accept that that is a fair assessment of the outcome?

Rt Hon HELEN CLARK: Of course I would not accept that as an accurate assessment, at all. What has interested me is the fighting between the two right-wing parties, with the National Party saying that Māori have everything they want, and ACT saying that the ancestral orders are a sop because Māori get nothing.

Dr Don Brash: I seek leave to table a transcript of the interview between Larry Williams and Dr Bill Hodge on Newstalk ZB last night.

Mr SPEAKER: Leave is sought to table that transcript. Is there any objection? There is.

Hon Richard Prebble: I raise a point of order, Mr Speaker. The Prime Minister very kindly told the House what she thought ACT’s policy was. She has no responsibility for the ACT party, and the statement that she made has not been made by any ACT member. It was false. If the Prime Minister really wants to know what ACT’s policies are, I am quite prepared to take 5 minutes to tell the House. ACT opposes the bill because, among other things, it is racist legislation.

Mr SPEAKER: Let me say that the member has made his point. Of course, comments added at the end like that can lead to retort. If I ruled out every single comment, there would be hardly any question time left, which might not be a bad thing.

Rt Hon HELEN CLARK: I seek leave to table evidence that the ACT spokesperson said yesterday that ancestral connection was just a “consolation prize for Māori”.

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

Hon Dr Michael Cullen: Is the Prime Minister prepared to make resources available to the Leader of the Opposition to participate in a range of hui around the country to explain to Māori that they have had a complete victory on this issue?

Rt Hon HELEN CLARK: The question may more appropriately be directed to the Parliamentary Service, which can provide the member with open-ended parliamentary travel for any such purpose.

Rt Hon Winston Peters: I seek leave to table the transcript from Michael Laws’ interview with Dr Brash on Radio Pacific this morning, when Dr Brash said that he was comfortable with the special rights in the fisheries legislation.

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

Gerry Brownlee: I raise a point of order, Mr Speaker. Noting that the generous offer made by the Deputy Prime Minister was rejected by the Prime Minister on the basis of travel alone, will the Prime Minister reconsider, and make available to the leader of the National Party the same resources that she has available in her department, in order that a decent job might be done on putting up alternate legislation to that the Government is proposing?

Mr SPEAKER: The member has not made a valid point of order on this occasion.

Education—Standards

8. MURRAY SMITH (United Future) to the Minister of Education: Is he satisfied that schools are providing a well-rounded education for our children?

Hon TREVOR MALLARD (Minister of Education): The Government is committed to ensuring that all our children are provided with the highest possible standard of education. We want all children to succeed. This Government has a clear focus on literacy and numeracy, meaning that, at times, those parts of the curriculum are emphasised more than others. I make no apology for that. However, our schools receive international praise for their emphasis on creativity, and information and communications technology.

Murray Smith: Is the Minister concerned that the absence of a requirement for secondary schools to teach New Zealand history to year 11, 12, or 13 students has contributed to the current public misunderstanding about the Treaty of Waitangi, and that because many schools are electing to teach Tudor history instead of New Zealand history, young people are sent a message that morris dancing is more important than the foundations of our nation; if he is not concerned about that, why not, and if he is, what is he doing about it?

Mr SPEAKER: Two of those four questions can be answered.

Hon TREVOR MALLARD: I think it is my experience that morris dancing is more often done in PE than in history.

Lynne Pillay: What steps is the Minister taking to ensure that schools do focus on essential skill areas, such as literacy and numeracy?

Hon TREVOR MALLARD: The No. 1 education priority for this Government is ensuring that all children reach their full potential. Literacy and numeracy are key parts of that, and that is why we have developed asTTle, which people are coming from round the world to look at as the best assessment system in the world, and why we are putting $44 million this year alone into literacy.

Nandor Tanczos: Following on from the supplementary question of Murray Smith, does the Minister agree that it is important that schools do teach about the importance of the Treaty of Waitangi in the birth of our nation, and about its ongoing importance in the future of our nation, so that future rounds of the ongoing constitutional debate that we are currently engaged in can be well informed; if he does agree with that, what is he doing to ensure that it happens?

Hon TREVOR MALLARD: Yes, I do. That is why it is an important part of the social studies programme that goes through to year 10. I think that is appropriate. At the moment, for example, we do not require kids to do maths at year 11. I am certainly not going to require them to do particular bits of a history programme, when we do not require them to do history, at all. That is just silly, and it is not the approach that we take within New Zealand. If people want their pet subjects to be taught all over the place we will have a dog’s breakfast of an education system, like they do in parts of the United States, in much of Australia, and in the United Kingdom.

Bernie Ogilvy: Does the Minister support programmes initiated by some schools that attempt to educate students in broader life skills, such as the driver education programme at Porirua College and the entrepreneurship programme at Onehunga High School, and can he tell the House whether those excellent initiatives have received any support from the Ministry of Education, and whether they will do so in the future?

Hon TREVOR MALLARD: I think the answers are yes, yes, and all schools receive a lot of funding from the ministry.

Bernie Ogilvy: Can the Minister confirm responses to written questions that reveal that his ministry has no idea how many schools run character or values education programmes, despite the fact that the curriculum framework states that “attitudes and values are an integral part of the curriculum”; and what specific steps is he taking to ensure that some form of character education is part of every child’s learning experience?

Hon TREVOR MALLARD: In the last few words the member hit the nail on the head. It is a matter of that being part of a learning experience, not a programme.

Foreshore and Seabed—Redress for Territorial Customary Right

9. GERRY BROWNLEE (Deputy Leader—National) to the Deputy Prime Minister: What is the “redress” the Government’s proposed seabed and foreshore legislation creates where the new High Court jurisdiction leads to a declaration by the court of a “territorial customary right”?

Hon Dr MICHAEL CULLEN (Deputy Prime Minister): There is no provision in the legislation for the High Court to issue a declaration of a territorial customary right.

Gerry Brownlee: I raise a point of order, Mr Speaker. That was a very clever answer from the Deputy Prime Minister. We are required to go to the Clerk’s Office in the morning with the questions of the day, and we are required to take verification with us. Interestingly, this morning we took down the package of information released by the Government yesterday, and this question is related directly to the information that the Government wished to put before the public yesterday. We know that redress means compensation; we would just like the Government to address that. I also refer you, Mr Speaker, to the bill that has since been tabled, and point out that from clause 29, running through a number of clauses from that point, there is jurisdiction for the High Court to hear matters that relate to a bundle of rights, as stated in the House yesterday by the Attorney-General. Further, it is pretty clear that the High Court can then determine that the applicants have lost something, and that there should then be a decision made by the Government about redress—or, as we would call it, compensation. For the Deputy Prime Minister to avoid—

Mr SPEAKER: Would the member please come to the point of order directly?

Gerry Brownlee: —that question with a clever answer shows just how much trouble this Government is in with this legislation.

Hon Dr MICHAEL CULLEN: The Minister is under an obligation to address the question. The question asked about a situation where the High Court declares the existence of a territorial customary right. The bill not only provides that the High Court does not do that; it actually specifically prevents the High Court from issuing a declaration of customary rights. The member must learn to phrase questions correctly.

Gerry Brownlee: No, I am not taking that for an answer.

Mr SPEAKER: Order!

Gerry Brownlee: I will come back to it.

Mr SPEAKER: The member may, but he will be leaving the Chamber. He does not argue with me when I am on my feet. He should read the Standing Orders about points of order. I heard the member at great length, and I heard the Deputy Prime Minister. I cannot tell the Minister how to answer the question. I have to say whether he addressed it. He did, and that is the end of the matter.

Gerry Brownlee: Can the Deputy Prime Minister confirm that the new jurisdiction given to the High Court in matters relating to a claimant’s belief that had this legislation not been in place, he or she would have had a significant benefit as a result of full and unencumbered ownership of an area will result in the Government paying compensation to claimants; if not, what does “redress” mean?

Hon Dr MICHAEL CULLEN: The member makes another error in the question. The application is around territorial customary rights—or what is sometimes known as aboriginal title in the legal system. That is not full and unencumbered ownership. I invite him to read the Mabo case and the surrounding legal comment on that particular case. What the High Court can do is consider a claim that but for this legislation there would have been the ability to award a territorial customary right, and, therefore, draw to the Government’s attention that that is now no longer possible. Then the Government has a duty to enter discussions around redress. It may be the member’s first inclination to pay money in those circumstances, but the Government’s first inclination is to seek other means of redress.

David Parker: How does the Government’s obligation to enter into discussions in that situation compare with the treaty claims process?

Hon Dr MICHAEL CULLEN: Under the treaty claims process, an application is made to the Waitangi Tribunal to consider a treaty claim. The tribunal makes findings, which it refers to the Government. There is no statutory requirement for the Government then to enter into discussions around those treaty claims, though all Governments, both National and Labour, have done that in practice. In this case, we are making it clear that there is a requirement, a duty, to enter into discussions, so that that is absolutely clear on the face of the legislation.

Gerry Brownlee: I raise a point of order, Mr Speaker. Although I appreciate the efforts of the Deputy Prime Minister to educate me in matters of grammar, I would ask you whether it is fair for a Minister to misrepresent a bill in the gross way that that Minister has done. I made an assertion that a court could find that a territorial customary right exists. I quote the bill’s heading before clause 28: “Findings of High Court with respect to territorial customary rights in public foreshore and seabed”, and the heading of clause 29: “High Court may find that a group held territorial customary rights”.

Mr SPEAKER: Please be seated.

Gerry Brownlee: I want to make my point of order.

Mr SPEAKER: Order!

Gerry Brownlee: I am being shut down.

Mr SPEAKER: Please be seated. I cannot judge the quality of the answer. My job is to ensure that a question that is asked is in order, and that an answer is given that is in order. I am not going to get into discussion over what a particular clause in a bill states. That is not the job of the Speaker. It has never been the job of any Speaker at any time in our Parliament. The member has a number of supplementary questions. He can advance those issues in them.

Gerry Brownlee: In what other ways does the Deputy Prime Minister envisage that redress may be satisfied?

Hon Dr MICHAEL CULLEN: My understanding is that the essence of territorial customary rights is that they cannot be granted, but could be at present under the law, and could have been before the Ngāti Apa decision. So if the member’s policy is to return to pre - Ngāti Apa, that would actually still enable the High Court to grant an aboriginal title, or territorial customary rights. The member, clearly, does not seem to understand that particular fact. The essence of those territorial customary rights—[Interruption] If the member waits, he will get an answer—is around access, control, and management of the area. The issue of access, we are assured by Māori, is not one that is on the table; therefore, no redress should be appropriate.

On the issues around redress, we have the ability to control and manage. The Crown will enter into good-faith discussions as to how proposals for partnership can proceed in the future in those cases—which will be relatively rare—where a territorial customary right might have been recognised.

Gerry Brownlee: Does the Minister therefore envisage that where redress is offered by way of control and management—as he has just told the House—that could ultimately lead to the veto of other activities in that area; or is this redress to be as weak as public ownership in the bill itself?

Hon Dr MICHAEL CULLEN: If the redress in this bill is weak, then perhaps the member could explain why his colleague sitting next to him described the bill as a total victory for Māori.

Mr SPEAKER: No. The Minister can expand on that, please.

Hon Dr MICHAEL CULLEN: I would be willing to expand on how it is a total defeat for the Leader of the Opposition, if that is what I am being asked to expand on—

Mr SPEAKER: No, no—the actual question.

Hon Dr MICHAEL CULLEN:—but I suspect that what Mr Speaker is asking me to expand on is that, no, there is no such veto right.

Border Control—Funding

10. PETER BROWN (Deputy Leader—NZ First) to the Prime Minister: Does she still stand by her statement made in 1999 that “We will continue to fund those border control activities which the State presently funds. Funding such core responsibilities has a far higher priority for us.”; if not, why not?

Rt Hon HELEN CLARK (Prime Minister): The member’s quote is incomplete. The full statement was: “Funding such core responsibilities has a far higher priority for us than the meaningless dribs and drabs of tax cuts announced by our opponents.” Labour’s 1999 election policy referred to abandoning the then National Government’s plans to introduce a new user-pays regime for border control services, and continuing to fund those border control activities that the State was funding at that time. That policy was honoured in full in the Government’s first term of office. It was not repeated in the 2002 manifesto.

Peter Brown: Does the Prime Minister recall, after becoming Prime Minister in 1999, adding a handwritten comment to a typed letter to an aviation executive that stated: “We will be honouring the commitment we gave to you re border control” and was initialled “HC”; and will she tell the House whether that executive had any right to believe that border control fees would be absorbed by the taxpayer and by the Crown?

Rt Hon HELEN CLARK: As I said, the policy was honoured in full in the 1999-2002 period. The policy was, of course, specific to continuing to fund those border control activities that the State was funding at that time. That did not include, by the way, picking up costs for the regional airports, which the previous Government, I understand, had also refused to pick up. Since September 11 a great many more costs are being imposed on New Zealand in order to trade and in order to have passengers go from our airports to airports in, particularly, the United State of America. I can advise the member that in the next few weeks the Deputy Prime Minister will issue a consultation paper for discussion with industry to see whether the appropriate funding split is what we have at present, which is about one-third of the costs of passenger clearance services being picked up by industry, and the other two-thirds by the Government.

Gordon Copeland: Does the Prime Minister acknowledge that an intrinsic and a core aspect of securing New Zealand’s borders is the safeguarding of New Zealanders against imported threats of terror, and will the Government therefore reconsider its proposal to impose a new $4 million charge on importers for work done by the Customs Service to ensure the safety and security of all New Zealanders?

Rt Hon HELEN CLARK: As the member knows, legislation on those matters has been before a select committee, and I think it is now back before the House. Meanwhile, discussion is continuing with industry. It is a question about where the costs of new requirements should fall, and as I understand the Minister of Customs has made plain, it was not necessary for the Government to act at all, but it decided to act because it thought that would make it easier than leaving it to every individual business to try to make arrangements.

Peter Brown: Is the Prime Minister telling the House that the $19 million-plus additional fees that are being imposed on industry—transport operators in particular, which flow through to exporters and importers—are under consideration and that there is a possibility that they will be absorbed by the Crown out of taxpayer funding?

Rt Hon HELEN CLARK: I can advise the member that discussion around these issues is continuing.

Small Business—Economic Growth

11. MARK PECK (Labour—Invercargill) to the Minister for Small Business: What reports has he received on economic growth in the small-business sector?

Hon JOHN TAMIHERE (Minister for Small Business): According to the National Bank Small Business Monitor—a very reputable business monitor—released today, year-on-year growth in the small business sector was 4.7 percent at the end of the December quarter. Under the stewardship of this Government over the last 4 years, the small to medium enterprises sector has produced tens of thousands of jobs, in a stellar performance. That is more evidence that under this Government the economy is powering along, under the great stewardship of a Minister of Finance who will undoubtedly go down as this nation’s finest.

Mark Peck: Did the report highlight any significant shifts in business opinion?

Hon JOHN TAMIHERE: For the first time, the Small Business Monitor indicated that less than 20 percent of small to medium enterprises saw regulation as the biggest problem they faced. That clearly shows that our programme of active engagement with real business people is working. This is a Government that goes out and talks to the real Kiwi business battlers, rather than listening to the whingeing, whining, and moaning of the Opposition.

John Key: If the Minister thinks that the National Bank surveys are glowingly accurate, as he indicated before, how does he reconcile that with last week’s National Bank survey on business confidence, where there was a collapse in business confidence akin to the one reported by the New Zealand Institute of Economic Research today; and what impact does he think that will have on economic growth in terms of small businesses?

Hon JOHN TAMIHERE: We take a large range of surveys into account, and most of them show businesses will employ more people, build more capacity, and support this Government, contrary to John Key’s popular belief.

Paul Adams: Does the Minister acknowledge that small enterprises are closing down as a direct result of new regulations and compliance costs, such as Whangarei Parafed, a volunteer transport service for the disabled that has been operating for 29 years, and that no amount of spin can cover up the fact that real people are suffering just because of some bureaucratic busy-work?

Hon JOHN TAMIHERE: I was not aware that volunteer services were small businesses, in the sense of being economic entities relevant to being GST-registered, and the like. I regret that.

Paul Adams: I seek leave to table the article in the New Zealand Herald of Wednesday, 7 April, titled “Red tape halts volunteer taxi”.

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

John Key: I seek leave to table the National Bank business survey of last week, which shows that business confidence is collapsing in New Zealand.

Mr SPEAKER: Leave is sought to table that survey. Is there any objection? There is objection.

Foreshore and Seabed—Ancestral Connection

12. Dr WAYNE MAPP (National—North Shore) to the Deputy Prime Minister: Does the Government expect that Māori will demonstrate ancestral connection over the whole coastline given that the Associate Minister of Justice said on 3 March 2004 that “Māori already have customary title over the whole coastline.”?

Hon Dr MICHAEL CULLEN (Deputy Prime Minister): I would think so, since the area of mainland coastline with probably the least activity by Māori in 1840—that is, the south-west of the South Island—has already been recognised as part of the Ngāi Tahu rohe by National in the Ngāi Tahu treaty settlement.

Dr Wayne Mapp: Will the ancestral connection result in Māori having co-management of the whole coastline, as envisaged by the Minister of Māori Affairs in answers in the House last month; if not, why not?

Hon Dr MICHAEL CULLEN: Ancestral connection triggers the involvement of Resource Management Act processes, and as the member is probably aware the Resource Management Act processes involve a wide range of possibilities at the discretion of the regional council. Under section 33 of the Act, for example, there is already the capacity—in the Act passed by the National Government in 1991; the existing legislation—not merely for co-management but for full, devolved management.

Dr Wayne Mapp: How will the strengthened ability to participate in the decision-making process over the coastline be implemented, and will that not amount to co-management, as said by the Minister of Māori Affairs?

Hon Dr MICHAEL CULLEN: It will involve a range of processes of involvement, all of which are already set down within the Resource Management Act. Co-management is a possibility within the—[Interruption] Some 13 years on, the National Party discovers what it passed in 1991. The Resource Management Act provides for co-management. National Party members will clearly have an uneasy Easter, regretting their past.

Dr Wayne Mapp: Now that the Minister has conceded co-management—[Interruption]

Mr SPEAKER:I know that was the last supplementary question, but I will ask the member to repeat the question again, and there will be silence this time. I am not satisfied with the noise that came from the Government benches.

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

Mr SPEAKER: I do not want any points of order. I will hear the supplementary question.

Dr Wayne Mapp: Now that the Government has conceded co-management, as requested by the Minister of Māori Affairs, surely that means this legislation delivers effective control over the whole of the coastline to Māori; if not, why not?

Hon Dr MICHAEL CULLEN: I have not conceded anything of the sort. I merely remind the member of what I knew I voted for in 1991 in the Resource Management Act, but clearly no member of the National Party at the time did, and National has not passed that knowledge on to its younger members. There is a range of possibilities within the Resource Management Act. This does not mean handing over control of the coastline in its entirety to Māori. If it does, I am not quite sure what the noise out there from many Māori is about.

Points of Order

Unparliamentary Language—Minister's Comment

GERRY BROWNLEE (Deputy Leader—National): I raise a point of order, Mr Speaker. I want to raise an issue with you for consideration over the Easter break. Yesterday in the House a Government Minister referred to members on this side of the House by using the term “born-again Horis”. I want to know whether that was parliamentary, and whether it is a term we would be able to use in the future.

Mr SPEAKER: I heard the phrase; I was in the Chair. If I had thought that that referred to any member of this Parliament, not only would the member have been asked to withdraw and apologise but his speech would have been terminated. I understood the member referred to people outside this House. I still regard the phrase as very infelicitous, and that word can be looked up in the dictionary if members are unaware of what it means.

Hon Member: Do we have one?

Mr SPEAKER: Yes, we have, and it is over there.

Bills

Income Tax Bill

Third Reading

Debate resumed from 30 March.

Hon Dr MICHAEL CULLEN (Minister of Revenue): To reiterate briefly, the bill represents the third stage of the progressive rewrite of the Income Tax Act. It introduces rewritten legislation contained in the first five parts of the Act, and re-enacts the remainder of the Act. This means that Parts A to E, which comprise about half of the total Act, will be in modern language and style, while other parts are in traditional statutory language and style. Those other parts will be rewritten in future stages.

The Income Tax Act is said to be one of the most consulted Acts in New Zealand. In my experience, it is also one of the most insulted Acts in New Zealand. The reason for rewriting the Act is to produce tax law that is clear, plainly written, and structurally consistent, without substantially changing the policy content of the current Act. The purpose, of course, is to have tax law that is easy to use and to understand—which will save time and money.

The bill is the largest to have been introduced into this House, and it has grown during its passage. It is the result of years of work involving a great many people: drafters, policy analysts, tax experts, lawyers, professional associations, panels, language experts, consultants of all kinds, submission writers, and now parliamentarians. I do have to point out, though, for members opposite that I am not aware of any special consultation with tangata whenua over the Income Tax Bill. It has been a monumental effort. While members will no doubt point out how big the bill is, it is very small compared with the corresponding United States legislation, which runs to many, many more thousands of pages than this particular bill does, and in this case the size of the country does not matter very much in terms of its tax legislation.

I am delighted the bill has reached its third reading. I would like to thank all those who contributed to it, especially the drafters and analysts of the rewrite project team, the members of the rewrite advisory panel, the members of the Finance and Expenditure Committee for their careful scrutiny of this large and complex bill, and the various Ministers of Revenue who are my predecessors, recognising in particular two current members of the House, David Carter and Peter Dunne. I commend the bill to the House.

JOHN KEY (National—Helensville): National will be supporting the passage of the Income Tax Bill. As the Minister of Finance correctly pointed out, it is an extremely large piece of legislation—the largest to have gone through the House. It is legislation that National first started working on in 1994. I think that most New Zealand taxpayers will welcome the opportunity to have—if the bill delivers what we all hope—clear tax law that is written in plain language so that everyone can understand it.

I want to make special mention of the fact that the bill clearly covers situations where there are unintended consequences. Should there be, in effect, a change in tax policy as a result of the passage of the Income Tax Bill, then the opportunity will be taken to ensure that that is corrected, and that taxpayers do not suffer a loss from that particular event.

I particularly want to mention that National does not support the reaffirmation of the tax rates. I say that because members may have noted in the release of the KPMG world tax survey a couple of weeks ago that New Zealand is out of step with the rest of world. They may have noted that in the survey for 1999, the year in which the Labour Government took office, New Zealand ranked well in terms of average rates of taxation in the OECD—the 30 richest countries in the world, of which New Zealand is one. In those days we had a corporate tax rate of 33c in the dollar, and the average rate in the OECD, according to the KPMG survey back in 1999, was 35c. Now, today, after 4½ years of a Labour Government, we still have a corporate tax rate of 33c in the dollar, and the average rate in the OECD is 29.96c. We have moved from a favourable position to an unfavourable position, and we on this side of the House sadly regret that.

We know the Minister of Finance’s view on the reduction of taxation of any sort—that it is not something he has been encouraging. In fact, since this Labour Government administration has been in office it has raised taxes 17 times in one way or another, and has caused the average household now to pay $2,600 more than it did. Since Labour has taken office it has taken $1 billion more from businesses and households all across the country, every year. It is a Government that is sitting on an operating balance excluding revaluations and accounting changes of $5.6 billion last year, yet the Minister of Finance does not want to accept the National Party policy of reducing corporate tax rates.

I want to take just a moment before we all rush off for our Easter break to quote from Brian Fallow’s finely written article in this morning’s New Zealand Herald, in which he talked a little about the KPMG tax survey. He included a couple of quotes from the outstanding KPMG tax partner Brahma Sharma, one of which I will read to the House: “ ‘The first is that many jurisdictions are competing for foreign investment and while there may be nothing new in that, what we are experiencing is an intensity in global tax competition for internationally mobile capital’, he said.” Brian Fallow went on: “This is making analysis of potential investment destinations increasingly sensitive to tax. The other lesson is that globalisation is highlighting weaknesses in the traditional basis of taxation, for example the ease within which companies can shift their country of residence and shift the source of their profits from one jurisdiction to another.”

Not so long ago we saw just how likely it is that that will take place, when Air New Zealand had to announce to the Stock Exchange that it was facing a potential liability of up to $107 million, relating to its aircraft-leasing business and the tax arrangements structured through its Hong Kong vehicle. That just shows the level and extent to which taxation can and will be moved around the world by companies in order to enjoy lower levels of taxation. The Minister, in a rush of blood to the head, blurted out in the House a few weeks ago that he was investigating banks. Of course, he was not meant to tell the House that in quite that way. After that rather rash moment, he rushed back to his department, which was fielding calls from all over the show, and it hurriedly rushed out a statement—

Hon David Cunliffe: Banks should pay their tax.

JOHN KEY: Well, of course banks should pay their level of taxation, and we believe in broad-based tax payment; we were just surprised that the Minister, in such a rash moment, managed to make that statement. I simply make the point that we know that, in the global world we live in, transfer pricing and low levels of corporate taxation are critical if New Zealand is to preserve its tax base, and we wish that the Income Tax Bill addressed that. We also wish that it provided for lower levels of company taxation, so that New Zealand companies could enjoy growth and the opportunity to go forward and build a better and brighter New Zealand.

On that note, National will be supporting the bill. But for New Zealanders who long for a day of lower levels of taxation across the board, I simply advise them, as they go on their Easter break to enjoy time with their families, to pull out a National Party manifesto, wait 18 months, and see all their dreams come true. A National Government will deliver for them what they want. If they are enjoying one of those huge Easter eggs that Sue Kedgley brought into the House earlier, may they enjoy it with a nice cup of tea.

Hon DAVID CUNLIFFE (Associate Minister of Revenue): I hate to disenchant the previous speaker, but I should be extremely surprised if, in doing the rounds of the beaches over the Easter break, I find one New Zealander, other than a historian, stretched out on a deckchair with a copy of the National Party manifesto. That party will be consigned to the dustbin of history—yet again, very soon.

The last thing the House needs, just as we are all contemplating the Easter eggs, is a long speech about a tax bill, but I briefly want to say that this Government thinks that this legislation is long overdue. It is very good to have seen some bipartisan cooperation on it; the Finance and Expenditure Committee has done a very good job on it, and we look forward to being able to pass it through.

This is not a debate in which we want to spend the whole time talking about tax rates, but it is important that the Government maintains a healthy fiscal balance to offset what is largely a private savings gap, because of the New Zealand habit of raising big mortgages to pay for real estate. The previous speaker will know, of course, that the operating balance excluding revaluations and accounting changes is not a cash surplus. I look forward to seeing the passing of this bill.

GORDON COPELAND (United Future): I would like to add a few comments to those that have been made on the third reading of the Income Tax Bill. Firstly, Dr Michael Cullen said that with tax legislation of 2,400 pages we should see ourselves as being relatively well off compared with the United States, whose legislation is much longer. On the other hand, it is my understanding that the United Kingdom’s Income Tax Act is quite slim compared with our volume. Maybe we should ask ourselves a few questions about why that is. I think the basic difference is the way in which tax has evolved in the two different jurisdictions.

That is one point. The second and more important point is probably to do with the fact that we keep on writing more and more income tax legislation to try to keep up with the increasing propensity of some sections of our society to try to avoid their tax liabilities. I think the real long-term answer is for us as a nation to give a high priority to the teaching of ethics in our school system. United Future feels quite passionately about the forming of good character in our citizens, and I am thinking of the simple advice written by St Paul a couple of thousand years ago, which was simply: “Pay tax to whom tax is due.” If we could introduce that concept into our school system, I think we could really bring into the consciousness of all our citizens that we do have obligations to take our full share of the tax burden.

I am not suggesting for a moment that any New Zealanders should pay one more cent of tax than they are liable to pay, but they should not endeavour to dodge paying tax either. If this country could achieve better standards of honesty in that regard, we could stop writing more and more tax law to try to block the loopholes that all the smart people seem to find in order to dodge tax. Then we would all be better off, and compliance costs would come down all round.

I would like to suggest to all New Zealanders that they do not spend their Easter season reading the National Party manifesto, because if they think that by reading it all their problems are over, they would be wrong. I can only suggest they find a different creed, because I am sure they will find that manifesto to be barren in the extreme.

I conclude by once again thanking the officials who have worked hard not just for months but for years to frame this new legislation. I wish the new generation of university students in New Zealand, who will have to learn this tax law as part of their professional formation, all the very best. Compared with the experience I had in trying to get through single paragraphs that went on for 14 lines, I think their learning task will be simpler as a result of all the work that has been done on this bill. I take this opportunity to wish everyone a very happy Easter.

CRAIG McNAIR (NZ First): In speaking to the third reading of the Income Tax Bill, I want to focus on a submission that I briefly touched on at the Committee stage. It was a submission from Business New Zealand, PricewaterhouseCoopers, the Institute of Chartered Accountants of New Zealand, and the New Zealand Law Society. The group’s submission stated that a transitional provision should indicate that the provisions of the rewritten Act must be interpreted in light of the corresponding provisions of the Income Tax Act 1994, and of associated judicial interpretation, other than intended policy changes. The transitional provision should also make clear that the rewritten Act is not intended to change the meaning and effect of the Income Tax Act 1994.

To make a long story short, officials agreed in the end that the bill should contain transitional provisions that indicate that no change in the effect of the law is intended. Where the meaning of the provision in the rewritten Act is unclear, or gives rise to absurdity, the old law is to be used as an interpretive guide to ensure that no unintended changes in the law occur. Transitional provisions should not apply to notified changes in law arising in the rewrite, nor to subsequent amendments to provisions in the rewritten Act.

Officials agreed with this approach, as it will ensure that the plain words of the rewritten legislation have full effect from the commencement of the new Act, in conjunction with the Government’s wanting to promote retrospective legislation to correct unintended changes. These further transitional provisions will provide the level of protection sought by the practitioners. In other words, this provision gives critical certainty that the old law should be an interpretive guide, but an interpretive guide only.

Lastly, I note also that in debating this bill as it passed through the different stages, some members brought up the issue of the 19.5 percent tax rate for Māori authorities. In speaking to the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill in March 2003, I moved an amendment on behalf of New Zealand First that all sections of the New Zealand community should be able to take advantage of the proposal that related to basic tax rates of 19.5 percent. New Zealand First did not support that part of the bill, because we felt it was unfair. I reiterate that New Zealand First wants to treat all New Zealanders equally, and at that time I put forward an amendment to give effect to this view.

The Federation of Māori Authorities welcomed that Supplementary Order Paper. One of our Māori members, Edwin Perry—and I have his permission to share this—is the chairman of a trust managing 4,000 acres. He has 80 beneficiaries, and they have told him that they do not want to be treated any differently from anybody else, either.

In closing, New Zealand First always supports good legislation, opposes bad legislation, and is glad that this bill is being passed.

IAN EWEN-STREET (Green): The Green Party is very pleased to support the third reading of the Income Tax Bill. We would particularly like to thank the officials for the very extensive work they have undertaken in rewriting and redrafting the bill to make it more readable and accessible. We commend the bill to the House.

Hon RICHARD PREBBLE (Leader—ACT): The ACT party is opposing this legislation. We are doing so for a number of reasons. Of course, we are the low-tax party. [Interruption] I ask the member why, having given his speech, he wants to give another one in the passageway right beside me. The ACT party has a number of reasons for being against the bill. There are actually 2,421 reasons.

Darren Hughes: Each one is a page.

Hon RICHARD PREBBLE: Each one of them is a page, and as I said to the Committee it did not persuade—

Darren Hughes: You used that joke as well—two old jokes.

Hon RICHARD PREBBLE: I am going to use it again. The member says he is a joke. I think it would have been better if he had completed his schooling before he came here, but that is just an old-fashioned view that I have.

There are 2,421 pages of tax law, and the Government says it is making the law simpler! I say to members that if they have a look at any of the clauses, they will find that they are gobbledygook. The Government needs all this legislation for a very good reason, and that is that this Government is taking 40 percent of the total wealth of New Zealand, something that New Zealanders would not voluntarily hand over to it and to whoever its coalition colleagues are today. One never knows who they are; they keep changing—whoever it is who is supporting this Government. That is why the Government needs it. Of course, if we had a low, flat rate of tax, we could have a statute that was only 12 pages long, and it would be very easy to understand.

There are 2,421 pages in this bill. I could have taken any page within the bill, but I want to repeat in this third reading the ones that I chose as examples in the Committee stage. Let me give just one example. I will read from clause 2 of Part A of schedule 1: “The basic rate of income tax for the taxable income of a Maori authority is 19.5 cents for every $1 of that taxable income.” That means a Māori business pays 19.5c. Then we go over the page to find paragraph 5, “Companies”, which states: “On all taxable income … the basic rate of income tax on the taxable income of a company is 33 cents for every $1 of that taxable income.” That is from a Government that says it does not treat different races differently. I am not opposed to Māori companies paying 19.5c—that is getting pretty close to the right tax rate. What I am opposed to is that someone who is not Māori has to pay 33c, for just one reason: because that person does not happen to be Māori.

Then the Government says that the provision is needs-based. I assure members that I can find many non-Māori companies that can say they have a need to pay a 19.5c tax rate, and they may well have poor shareholders. Indeed, members should look at the case of companies that have children as shareholders: they have to pay 33c under this bill, unless they are Māori.

Continuing to Part B of that schedule—because I am just picking a couple of pages out of the legislation—we find another objection to the bill, which is the rate of tax on every dollar of taxable income. It states that on so much of the taxable income as is more than $60,000, the rate is 39c in the dollar. This year 20 percent of all full-time workers will pay the 39c tax rate. What is wrong with that? The answer to that is on this election credit card with the phoney photograph on the front, which I keep in my wallet. It states: “My commitment to you.” and “ We will deliver”, and is signed by Helen Clark. Bullet point seven states: “No rise in income tax for … 95 per cent of taxpayers …”. This year 20 percent of full-time taxpayers who, but for Helen Clark and the Labour Government, would have paid 33c in the dollar are paying 39c. That is not just a broken campaign promise; it is an “envy tax”, because every single year since the tax rate was increased, the Government has had a taxpayer surplus—it is not a Government surplus; it is a taxpayer surplus—and that surplus was actually paid by middle-income New Zealanders. There are very few wealthy New Zealanders; those who are wealthy were driven off to London and other places overseas years ago. That surplus was paid by people who earn just $60,000 a year.

Dr Cullen and, apparently, the National Party both think that people who earn $60,000 are wealthy and can waste money. I want to give them both a reality check. Raising a family on $60,000 a year is not easy. That is not being wealthy. Yet this Government tells us—and it is doing it again today—that it is prepared to tax families that earn $60,000 a year 39c in the dollar.

It is just an “envy tax”, and that is why the ACT party will not support the Income Tax Bill. We are opposed to it, and we say that middle-income New Zealand should be the priority of this Government. The people who are paying for this Government’s extravagances are ordinary, working New Zealanders. It may well be that ACT will be the only party to vote against the bill. Well, so be it; we will vote against it. And we will say on behalf of those ordinary New Zealanders who paid the tax that they ought to be the priority for getting a tax cut. I draw it to the attention of members opposite that it would be possible to give a tax cut of $100 a fortnight to every full-time taxpayer. It would cost only $4 billion, and the Government surplus at the latest count is $6.9 billion.

Jill Pettis: And you will sell everything else off to do it.

Hon RICHARD PREBBLE: Now I see the Labour whip is screaming her head off. She thinks people on more than $60,000 a year are wealthy. She is prepared to sock it to people on $60,000 a year, even though she got into office by promising that only 5 percent of all taxpayers would pay the 39c tax rate. That member is quite prepared to take a call, I hope, to defend the fact that this Government, which publicly says on television: “Oh, we treat all races in New Zealand fairly and equally.”; does not do that in this Income Tax Bill. I quote from clause 2 of Part A of schedule 1: “The basic rate of income tax for the taxable income of a Maori authority is 19.5 cents …”. One looks over the page to find that the tax rate paid by non-Māori is 33c.

If that were the only provision in the bill I did not like, it would be enough reason for voting against it, but, as I said before, there are 2,421 reasons for voting against this bill. When the tax code is as big as this, it ought to indicate to members opposite that there is something rotten about income tax in New Zealand.

A party vote was called for on the question, That the Income Tax Bill be now read a third time.

Ayes 109

New Zealand Labour 52; New Zealand National 25; New Zealand First 13; Green Party 9; United Future 8; Progressive 2.

Noes 8

ACT New Zealand 7; Independent: Awatere Huata.

Bill read a third time.

The House adjourned at 3.48 p.m.