Wednesday, 4 August 2004

Wednesday, 4 August 2004

Wednesday, 4 August 2004

Mr Speaker took the Chair at 2 30 p.m.

Prayers.

Visitors

United Kingdom—Speaker of the House of Commons

Mr SPEAKER: I have very great pleasure in informing members that the Rt Hon Michael Martin, Speaker of the House of Commons of the United Kingdom, is within the precincts of this Chamber. I am sure that members would wish that he be welcomed and accorded a seat on the left of the Chair.

The Rt Hon Michael Martin, accompanied by the Deputy Speaker, entered the Chamber and took a seat on the left of the Chair.

Indonesia—Budget Committee Members

Mr SPEAKER: I also have much pleasure in informing the House that members of the Budget Committee from the Republic of Indonesia are present in the gallery. I am sure that members would wish that the delegation be welcomed.

Personal Explanations

Civil Aviation Authority—Allegations

Hon HARRY DUYNHOVEN (Minister for Transport Safety): I seek leave to make a personal statement in relation to allegations made yesterday by Mr Hide that I had misled this House over the matter of the Civil Aviation Authority’s alleged taping of telephone calls.

Mr SPEAKER: Is there any objection to that course being followed? There is objection.

GERRY BROWNLEE (Deputy Leader—National): I raise a point of order, Mr Speaker. I will take the opportunity to explain our objection. Mr Duynhoven is not wanting to explain to the House something that relates to a personal matter. Mr Hide’s questioning of him was very much of him as a Minister, and if he is to put the record straight, then, quite clearly, he should make a ministerial statement.

Hon Dr MICHAEL CULLEN (Leader of the House): When questions in this House have been raised about the accuracy of answers to questions, Ministers have always responded, from time immemorial, by seeking leave to make a personal explanation, if there is a need to correct an answer or, as in this case, to affirm the accuracy of the answer that was given. It is not done by way of ministerial statement, and never has been.

Mr SPEAKER: That is not a point of order. Anyone is entitled to raise an objection; an objection has been raised.

Hon Dr MICHAEL CULLEN (Leader of the House): I raise a point of order, Mr Speaker. It is a hypothetical point of order in this kind of instance. Perhaps a Minister who has been accused of giving an incorrect answer comes to the House and seeks leave to make a personal explanation to correct the answer, and the leave is denied. I assume that then no question of privilege could apply, in that the Minister had sought to correct that answer at the first opportunity.

Mr SPEAKER: Of course. It would then be for the Minister to write to me.

Hon KEN SHIRLEY (Whip—ACT): I raise a point of order, Mr Speaker. In light of the fact that the request for leave was denied on a misunderstanding, perhaps it would be reasonable for leave to be sought again.

Mr SPEAKER: I am prepared to have leave sought again. There has been a request from that party—

GERRY BROWNLEE (Deputy Leader—National): I raise a point of order, Mr Speaker. Perhaps it would help the House to make a determination about whether leave should be granted in this circumstance, if Mr Duynhoven were to indicate whether he was going to correct an answer or rebut an allegation. If he is rebutting an allegation, then it is surely a matter for a ministerial statement.

Hon Dr MICHAEL CULLEN (Leader of the House): Of course, that is a rather peculiar assertion, because if the Minister has been accused of misleading the House by giving incorrect answers, he goes away and checks those answers, and he comes back to reaffirm them, then that is just as important as correcting the answer in the first place.

RODNEY HIDE (Leader—ACT): I hope we do agree to give Mr Duynhoven leave, but I will make one point. Mr Harry Duynhoven sought to make a statement yesterday. The correct procedure is to correct the answer as soon as possible. I believe he went over to see Dr Michael Cullen, who suggested to him that he not do that. He spent 24 hours with the spin doctors, trying to work out a correct answer.

Mr SPEAKER: The member knows that, put like that, that is not a point of order. I am prepared to put the question to the House again.

GERRY BROWNLEE (Deputy Leader—National): I raise a point of order, Mr Speaker. It is fair enough that we do get some sort of precedent set around how these matters are dealt with. I would have thought that if the Minister had accurately given an answer to the House, then there was no need for him either to correct or embellish. In fact, there is a procedure that he has available to him to remedy the situation where a member accuses him of some sort of misleading of the House or, indeed, dishonesty. So I think it would be good to hear from Mr Duynhoven as to whether he would be correcting an answer that he previously gave incorrectly, or simply wishes to rebut an allegation, when we all know that he has another course of action available in that regard.

Hon Dr MICHAEL CULLEN (Leader of the House): I presume that the other course of action being referred to is to take a charge of a breach of privilege. I think that shows again the common misunderstanding opposite that members may make an assertion that is incorrect only if they are not telling the truth. A member may well make an assertion that is incorrect and wrong in fact, without intending to mislead the House.

Mr SPEAKER: However, I have been asked to give leave, and it is in the members’ hands, not mine. Does anybody object? There is objection.

Questions for Oral Answer

Questions to Ministers

Resource Management Act—Environment Court

1. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister for the Environment: Does the Government support direct referral to the Environment Court under the Resource Management Act 1991 for major projects; if so, why?

Hon MARIAN HOBBS (Minister for the Environment): No.

Jeanette Fitzsimons: Is there any difference between direct referral, which the Minister has just ruled out, and the Local Government New Zealand proposal that major projects be referred directly to a special committee or board, from which there would be no appeal except on points of law?

Hon MARIAN HOBBS: There probably could be said to be some difference, in that the local government body still has some control over the process; but I want to assert to the member that that policy has not been confirmed. I draw the member’s attention to the guiding principles governing the current Resource Management Act review. They are: we want to achieve good environment outcomes; we want certainty of process but not certainty of outcome; we want certainty of cost; we want local decision-making; we want public participation; and we want central government leadership, as with national environment standards.

David Parker: What reports has the Minister seen about policies and proposals to improve the implementation of the Resource Management Act?

Hon MARIAN HOBBS: The business commentator Rod Oram noted in the Sunday Star-Times 3 weeks ago that this Government was properly resourcing the Environment Court and assisting local councils, fixing the problems caused by the previous National Government. He went on to describe certain proposals to amend the Resource Management Act as “falling short on some basic measures, such as being practical, wise, and well considered”—those being the National Party’s proposals for the Resource Management Act.

Hon Dr Nick Smith: Has the Minister noted the speech made last week by Coordinating Minister, Race Relations, Mr Trevor Mallard, when he stated: “Maori and Pakeha are both indigenous people to New Zealand now.”; if so, will she be supporting changes to the Resource Management Act to ensure that both indigenous peoples have the same rights under the Act; if not, why not?

Hon MARIAN HOBBS: I did notice the quite brilliant speech made by my colleague sitting in front of me, Trevor Mallard. I draw to the attention of the member opposite the point that, in Wellington, we have had a dispute over the city bypass for years. The land being argued about is not Māori land; it involves what has been considered by some to be heritage buildings that were built by Pākehā. That has held up the Resource Management Act for some time.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. My question was quite specific. It asked whether the Government would be amending the Resource Management Act in the wake of the interesting speech—or “brilliant speech”, as the Minister said—by Mr Mallard. There was no attempt by the Minister to answer that important point.

Mr SPEAKER: I thought the Minister addressed the question.

Jeanette Fitzsimons: Noting the Minister’s admission that there may be no difference, is it not true that if there are no appeal rights, the special committee or board would have to adopt a formal process, with written briefs, lawyers, and cross-examination, making it a very difficult and intimidating process for local communities to take part in, which was always the main argument against direct referral to the Environment Court in the first place?

Hon MARIAN HOBBS: I say to my dear colleague that that is a good try, but the policy has not been completed. I stand by the principles that we have in it for public participation and local decision-making.

Jeanette Fitzsimons: Speaking hypothetically, if the Government were to adopt the proposal of Local Government New Zealand, would it not be saying that the fundamental principle of the Resource Management Act—that people in communities should be involved in decisions about their future—should be waived for major projects that the Government wants to see proceed?

Hon MARIAN HOBBS: Yet again, and not hypothetically but absolutely concretely, there will be public participation and local decision-making.

Jeanette Fitzsimons: Does the Minister agree that Local Government New Zealand’s proposal for a whole-of-Government statement of the national interest is a thinly disguised attempt to silence the Department of Conservation if it attempts, as required under its Act, to advocate for biodiversity values that would be destroyed by a major project, and will she give an undertaking to this House that the Department of Conservation’s ability to argue publicly for the national interests of biodiversity will not be compromised?

Hon MARIAN HOBBS: The Department of Conservation’s ability will not be compromised, but I have heard around this House for years that transport, housing, planning, and energy should be coordinated to give a whole-of-Government response. Having said that, the Department of Conservation’s ability to speak up for biodiversity in this land will not be compromised.

Hon Dr Nick Smith: Noting that the Minister has endorsed the speech made by the Coordinating Minister, Race Relations, Trevor Mallard, as “quite brilliant” in saying that all New Zealanders, including Pākehā, are now indigenous, can she assure the House that the Resource Management Act will be—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think that when the member quotes someone, he should quote accurately. The member did not.

Mr SPEAKER: That is not a point of order. The member will carry on with the question. I will judge that at the time.

Hon Dr Nick Smith: Having endorsed as quite brilliant Coordinating Minister Race Relations, Trevor Mallard’s words, which I quote exactly, that “Māori and Pākehā are both indigenous people to New Zealand now.”, can the Minister assure the House that the Resource Management Act will be changed so that the rights of Māori and other New Zealanders are exactly the same; or was Mr Mallard’s speech just crude politics for the purpose of votes, rather than anything of substance?

Mr SPEAKER: The first part of that question is perfectly in order. The Minister cannot answer for another Minister.

Hon MARIAN HOBBS: First of all, I want to draw that member’s attention to Russell Brown’s very good blog, Hard News, in which he lines up Mr Mallard’s statement with those made by Michael King in Being Pakeha, and by Allen Curnow. To his question about the Resource Management Act, I repeat the answer I gave before. The Resource Management Act, in practice, considers the needs of all those buildings and places that are special to New Zealand, be they coastline, or be they older houses in the middle of Wellington Central.

Rt Hon Winston Peters: Can the Minister confirm that reference to Māori in the Resource Management Act of 1991 was put there by National, as was reference to the Māori people in section 18 of the 1977 Town and Country Planning Act put there by National, and what is the word to describe that if it does not start with “h” ?

Mr SPEAKER: The first part of the question can be answered.

Hon MARIAN HOBBS: Yes.

Jeanette Fitzsimons: Is the Minister aware that a key principle of the Treaty of Waitangi, as determined by the courts, is a duty to consult; if so, will she reject the proposals of Local Government New Zealand that will deny Māori consultation over resource consents unless the council decides they are affected?

Hon MARIAN HOBBS: I reiterate that the principles underlining the Resource Management Act are for public participation that is inclusive of Māori, and for local decision-making.

Māori Language Commission—Confidence

2. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: What specific actions does she expect the Māori Language Commission to take in order to win the Government’s confidence, in light of her statement to the House yesterday: “whether the Government has confidence in the commission obviously depends on how it handles matters.”?

Rt Hon HELEN CLARK (Prime Minister): The commission chair met with the Minister of Māori Affairs earlier today, and the chair issued a statement that the chief executive’s comments were inappropriate. He said that the board is taking the matter seriously; it will be considering the issue further at its meeting next week. A proper process is being followed.

Dr Don Brash: Is she aware that in addition to the comments that she quoted in her answer to my first question, Dr Patu Hōhepa also said that Mr Piripi’s right to express his own views as a private citizen should be upheld, in almost direct repudiation of her own statements yesterday, and does she see that as the type of response she said she would require in order to have confidence in the commission? [Interruption]

Mr SPEAKER: There is one warning a day. There will be no comment while questions are being asked.

Rt Hon HELEN CLARK: Even the requirements of the Public Service Code of Conduct make it clear that there is a balance to be struck between the rights of free speech and the appropriate behaviour for a public servant. I am satisfied that Dr Hohepa has said that the comments were inappropriate, that the commission is taking the matter seriously, and that it will be considering it further at its full meeting next week.

Rt Hon Winston Peters: Notwithstanding the impropriety of Haami Piripi’s actions as the chief executive of the Māori Language Commission, what degree of gall or double standards is she expected to deal with in these questions, given that the primary questioner left the Reserve Bank and then stood for the National Party?

Mr SPEAKER: On reflection, that question is not in order.

Rt Hon Winston Peters: Point of order—

Mr SPEAKER: Would the member just repeat the question, so that I can hear it. I did not hear the last part.

Rt Hon Winston Peters: Notwithstanding the total impropriety of Haami Piripi’s actions as chief executive of the Māori Language Commission, what degree of gall or double standards does she expect to deal with at question time, given that the primary questioner resigned from the Reserve Bank and then stood for Parliament for the National Party?

Mr SPEAKER: The Prime Minister has no responsibility for any gall on the part of anybody. The question needs to be rephrased if it is to be in order. I have asked the member to do so, and I will give him one final opportunity.

Rt Hon Winston Peters: In respect of the impropriety of Haami Piripi’s actions, does the Prime Minister know of others involved at key levels of the civil service who clearly held a political view, latent and submerged though it may have been but known to many others, and who are now in Parliament?

Rt Hon HELEN CLARK: As I prepared to come to the House today I did consider that it would be appropriate to say at some point that the Government does not require all appointees to positions made pursuant to statute to agree with it all the time, which explains why for so long it put up with Dr Brash and his attacks on Government policy in many areas.

Gerry Brownlee: I raise a point of order, Mr Speaker. [Interruption] The outgoing Government may bay, but it will have to listen.

Mr SPEAKER: Will the member please be seated. My patience is running a little thin. I want to hear the point of order in silence.

Gerry Brownlee: It is simply this: surely the Prime Minister’s answer attacked the credibility and the integrity of a member of this House. If you are to allow that to stand, Mr Speaker, that will set a new standard for how we all deal with each other.

Hon Dr Michael Cullen: No, what the Prime Minister was pointing out was that the previous Governor of the Reserve Bank was frequently prone to making speeches on a whole range of matters of Government policy outside his competence, and probably on areas that still remain outside his competence.

Mr SPEAKER: I listened to the comment. It was not complimentary, but it was not unparliamentary. [Interruption]

Mr SPEAKER: That member will stand, withdraw, and apologise, and he is very lucky to still be here in the Chamber.

John Key: I withdraw and apologise.

Hon Ken Shirley: Does she have any concerns over Mr Piripi’s attacks on the ACT party and Don Brash on the Agenda programme, or does she just get concerned when her Government’s policies are attacked, rather than the principle of the matter?

Rt Hon HELEN CLARK: Yesterday, when the member’s colleague Mr Hide read out a list of inappropriate comments by Mr Piripi, I did indeed suggest that he should add to those reference to the Leader of the Opposition by Mr Piripi that I consider to have been completely inappropriate. If there were references to other political parties, I also consider that inappropriate. My point has been that people in a position like Mr Piripi’s have to act appropriately. They must gain the confidence of all members of the House, and that is why it is important that the commission takes the matter seriously.

Metiria Turei: Does the Government intend to advise Labour and National Party members who are also Māori public servants in Government departments such as, for example, Te Puni Kōkiri that they put their employment at risk if they are ever publicly seen to attend party functions—or is this a case of one rule for the old parties and another for the Māori Party?

Rt Hon HELEN CLARK: Many public servants belong to political parties, as is their right as citizens. I draw the member’s attention to the Public Service Code of Conduct, which points out, and I quote: “Generally, public servants have the same rights of free speech and independence in the conduct of their private affairs as other members of the public. However, they also have a duty not to compromise their employer or their Minister by public criticism of, or comment on, Government policy. Public servants should ensure that their contribution to any public debate or discussion on such matters is appropriate to the position they hold, and is compatible with the need to maintain a politically neutral Public Service. Public servants occupying senior positions or working closely with Ministers need to exercise particular care in this regard.”

Dr Don Brash: Why does she continue to remain silent over the actions the board should take with regard to Mr Haami Piripi, when in the case of Mr Kit Richards, who sent a private email from his home computer, she and her fellow Ministers demanded that he be sacked from day one, and why does her Government have two different standards for two different classes of New Zealanders?

Rt Hon HELEN CLARK: As has been pointed out on many occasions, Mr Richards was part of an organised campaign to overturn a Government decision that affected the company for which he worked. I know there are none so deaf as those who do not want to hear, and that applies to the Leader of the Opposition.

Rodney Hide: Would it have been OK for Mr Haami Piripi to have paid someone to make a submission on the bill, just like the Ministry of Health officials paid Action on Smoking and Health (ASH) to make submissions to a select committee, or is the real issue that it is OK for civil servants to be politically active as long as they support the policies that Helen Clark supports?

Rt Hon HELEN CLARK: The Ministry of Health did not pay ASH to make submissions to a select committee. Going back over many years, Governments of all shades have funded ASH on a contractual basis to promote public health issues. Some questions have been raised in the last couple of years about those contracts, and guidelines are being prepared for such contracts in the future.

Climate Change—Policy

3. NANAIA MAHUTA (Labour—Tainui) to the Convenor, Ministerial Group on Climate Change: Has he received any recent reports on climate change policy development for New Zealand?

Hon PETE HODGSON (Convenor, Ministerial Group on Climate Change): Yes, I have received a report that questions the science behind climate change. It claims we should do nothing about fossil fuel use, and states that we will be the last Western country in the world to sign up to emissions charges or emissions trading, yet suggests that we should stay in the Kyoto Protocol and claim to be clean and green. I find it astonishing that this piece of environmental abdication has been proudly announced during Conservation Week by the National Party.

Nanaia Mahuta: What would be the implications for New Zealand of our doing nothing to start reducing greenhouse gases?

Hon PETE HODGSON: If such a policy were implemented, New Zealand’s international credibility as a clean, green country would be gone by lunchtime.

Hon Dr Nick Smith: Has the Minister become so embarrassed by his own Government’s failed Kyoto Protocol policies that all he can now do is to misrepresent National’s policy; if not, why did the Government’s own stocktake report on infrastructure released in May this year state that his policies on the Kyoto Protocol were undermining investment in the electricity sector?

Hon PETE HODGSON: That particular report referred to some uncertainty occasioned by President Putin’s indecision about whether to reach for his pen; it is likely to be addressed presently. However, the more important thing is that I have received further advice, which comes in the form of three short sentences on climate change. These sentences read: “The problem is enormous. Eventually it will stuff life on earth. New Zealand can’t ignore the problem.” Who was the author? It was the Hon Dr Nick Smith.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. I seek the leave of the House to table the PricewaterhouseCoopers report that makes absolutely no mention of the Russians, and mentions only uncertainty about Mr Hodgson’s policy.

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

Jeanette Fitzsimons: What effect would it have on our international reputation if a National Government were to carry out its policy to use carbon credits to let carbon polluters off the hook, when those credits were actually negotiated by Simon Upton on the promise that they would not be used to allow polluters to do nothing?

Hon Dr Nick Smith: That question was deliberately about National Party policy. I seek leave of the House—seeing that everybody wants to pretend we are the Government, we are happy to be it—to answer the question.

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

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. The question was very much about National Party policy. There is no way that the Minister is responsible for that. Yesterday we tabled a copy of National’s policy. The Minister goes to great lengths not even to quote from it. I do not see how you, as Speaker, can sit there silently and have this charade go on, where the Minister will not answer questions about the Government’s policies, but is keen to answer questions about everybody else’s policies.

Mr SPEAKER: I do not like any reflection like that, and I am not having any of it made. The member will stand, withdraw, and apologise for that reflection on me.

Hon Dr Nick Smith: There was no reflection—

Mr SPEAKER: The member said I am listening to a charade; I am not. The member will withdraw and apologise.

Hon Dr Nick Smith: I withdraw and apologise, Mr Speaker.

Mr SPEAKER: The Minister was asked a specific question about what another Minister had done. To that extent the question was perfectly in order.

John Carter: I raise a point of order, Mr Speaker. That was not what was asked. The Minister was asked to speculate on what an outcome might be if the National Party were to implement a certain policy. Quite honestly, I do not see how he could have any information on that, at all. It is quite out of order to expect the Minister to answer a question on someone else’s policy or the effects of it.

Jeanette Fitzsimons: The question was to a Minister who has been a negotiator at the climate change deliberations for some years, and therefore knows what the international community thinks of various policies. He was asked his view on what the effect on our reputation in the international community would be if a particular policy were followed.

Hon Dr Michael Cullen: I think Jeanette Fitzsimons is correct in that respect, but I actually do agree that the question, as phrased, is out of order, because it asked what the effect of what a National Government might do would be. Had the questioner asked what the effect would be if the Government adopted a policy of doing such-and-such, the question, I am sure, would have been fully in order.

Mr SPEAKER: I am going to invite Jeanette Fitzsimons to rephrase her question so that it is in order, and she has only the one chance.

Jeanette Fitzsimons: What effect would it have on our international reputation if the Government were to adopt proposals by the National Party to use carbon credits to let carbon polluters off the hook, when, in fact, those credits were negotiated by Simon Upton on the promise that they would not be used to allow polluters to do nothing?

Hon PETE HODGSON: The member raises a very good point when she speaks of the New Zealand Government’s earlier international negotiating stance, and she correctly describes it. I would have suggested that if the National Party policy were put in place, our international reputation would be gone by lunchtime. What is more, Simon Upton will be spinning in his Parisian bed now; he is coming back to New Zealand soon, so be careful. What is more—

Mr SPEAKER: I do not know whether it is just because it is a Wednesday, but the answer itself ended up quite out of order.

Larry Baldock: Has the Minister seen the report in the Australian Sunday Mail of 18 July this year that quotes noted Professor David Bellamy, a respected environmentalist, as saying “The link between the burning of fossil fuels and global warming is a myth.”; and is he concerned that by signing up to the Kyoto Protocol the Government will end up spending a great deal of money on solving a problem that, in Bellamy’s words, “does not exist”?

Hon PETE HODGSON: Yes, as a matter of fact I have, and I have heard Professor Bellamy quoted around the world. I have also read a lot of rebuttal of Professor Bellamy’s work—he is, of course, a botanist. But I want to make this point: if the National Party is so proud of its policy, why has it not put it on its website? The policy is not on the website.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. We get a question about David Bellamy’s policies, and then we get a question about National’s website. How far are you going to let Ministers wander in terms of their ministerial responsibility?

Mr SPEAKER: I would love to be able to let nobody at all in this House wander; then we would have question time over in about half an hour. I allow a little bit of latitude. I think that is in the nature of parliamentary democracy. But I say to the member that his point of order was valid.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. We sit here every day—and we are now well into August—and to our right sits a party that complains every day and raises countless points of order. [Interruption] With respect, if you check the Hansard you will see that, pro rata, those members have had far more points of order and time-wasting than all the parties over here, which put together outnumber them. My real point is there has to come a time when either they know the Standing Orders and know how to perform, or do not turn up in this House.

Mr SPEAKER: All I can say is I am reminded of a proverb, which I will not repeat. I just say to the member that, as far as I am concerned, there are very few valid points of order raised during question time. Most of them are political point-scoring, and I think if we allowed a little more give and take it would make for a more interesting House. But if members want the rules applied absolutely rigidly, then they can ask me to do that. But I do not think that is in the best interests of a democracy.

Hon Richard Prebble: I raise a point of order, Mr Speaker. Despite your having just made that statement—and I hope you do not regard this point as political point-scoring—I now raise this point with you. In the spirit of allowing a wide question time, I did not raise this objection before the question was asked. It is my understanding that Ministers can be asked questions about matters that have been delegated to them—first from the Governor General, then from the Prime Minister. I see here that we have a question to the Convenor, Ministerial Group on Climate Change. Does that mean we can now ask questions of any Minister whom we happen to know has some responsibility? For example, could we ask questions of the chairman of the Cabinet legislation committee? It would appear to me that if we can ask questions of a person who is head of a ministerial group on climate change, we can certainly ask a question of the chairman of the legislation committee, which is associated with Cabinet. It would appear to me that we could probably ask a question of the Minister who is in charge of the Government’s public relations. If we know there is such a group, are we now able to ask questions about it—even if we do not actually happen to know who the mysterious Minister is who is running the Government’s public relations?

Mr SPEAKER: Well, all I can say is this position appears in the ministerial list, and has done for over a year, and therefore members are perfectly entitled to ask a question about it. It is in the ministerial list, a copy of which I am sure the member can get. I will get one for him, if he wants it.

Larry Baldock: Will the Government’s Kyoto policy be influenced by a recent article by the botanist Professor David Bellamy, and backed by 18,000 other scientists, in which he states: “Climate change is a natural phenomenon.”, and “Because carbon is the most important air-borne fertiliser in the world, any man-made increase in atmospheric carbon levels would simply produce a rise in plant productivity rather than an increase in world temperatures.”; if not why not?

Hon PETE HODGSON: No, and perhaps the best way to describe why is to say that in January of this year Transpower found some of its pylons flattened by record winds; in February along came the Manawatu floods; this time last year 7,000 people died in France; last week the Bay of Plenty problems were around us; and the week before last 70 percent of Bangladesh was under water. Either this is climate change or it is what climate change looks like.

Larry Baldock: I seek leave to table the article from the Sunday Mail.

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

Hon PETE HODGSON: I seek leave to table a 9-page document entitled Annual State of the Nation Address, the fifth sentence of which states: “My ambition in Opposition is to be constructive”—

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

Visas—Pakistani Immigrants

4. Dr MURIEL NEWMAN (Deputy Leader—ACT) to the Minister of Police: Have there been any police reports concerning Pakistanis having improperly obtained New Zealand visas via Tonga; if so, what action has been taken?

Hon PHIL GOFF (Minister of Foreign Affairs and Trade), on behalf of the Minister of Police: No. The police advised the Minister that they have no information about any such conduct and that there have been no reports, notwithstanding Mr Hide’s allegations to the contrary yesterday.

Dr Muriel Newman: Just to be clear, is he saying that no police officer has written a report raising concerns that Pakistanis have been illegally entering New Zealand via Tonga?

Hon PHIL GOFF: The police have searched far and wide for any such evidence. They have found no such evidence. I challenge the member that if she has any evidence of this nature to say why has she not reported that to the police so they can follow up those allegations.

Dr Wayne Mapp: What action has the Government undertaken since the “lying in unison” report to deal with the increased risk management issues associated with fraud and staff integrity, given that between 2001 and 2003 there were 21 proven cases of fraud involving up to 49 staff and that 17 more have yet to be fully investigated?

Mr SPEAKER: In so far as this relates to the Minister’s responsibilities as the Minister of Police, the member may answer.

Hon PHIL GOFF: In fact, this is largely in the area of the Minister of Immigration, but I can report to the member that there is now a fraud unit that has eight full-time investigators, that the funding for the management of immigration risks has increased by $20 million, and that enormous steps have been taken, and that has resulted in a vast increase in prosecutions.

Martin Gallagher: Going back to the primary question following Mr Hide’s allegations in the House yesterday that police had investigated a fraud ring allowing Pakistani nationals who paid $15,000 to come to New Zealand via Tonga, what have his inquiries revealed about Pakistani nationals coming to New Zealand via Tonga over the last 5 years?

Hon PHIL GOFF: I have been advised that no residents or group visas have been issued in Tonga to Pakistanis over the past 5 years. In 1999-2000, three visitor visas were issued to Pakistanis but none has been issued since that time. As stated previously, there has been no police investigation such as that alleged by Mr Hide in the House yesterday. Clearly his comments are without foundation.

Rt Hon Winston Peters: Why was his colleague Damien O’Connor making a press statement and a speech this morning on the 900 percent increase in fraud within his department when over the last 5 years in this House he and his predecessors have constantly denied that this was going on in his department; and are not the public entitled now to an apology?

Mr SPEAKER: As far as the Minister of Police is concerned, he can answer.

Hon PHIL GOFF: Can I just repeat to the member the information I gave previously—that another $20 million has been put into this area over recent years. There are now eight investigators, and convictions have jumped by 900 percent. As Damien O’Connor said, that clearly reflects improved vigilance and improved systems.

Martin Gallagher: Could the Minister spell out to this House and remind this House as to what precise action individual members of Parliament should take if they come across information about conduct of a criminal nature, including issues such as fraudulently obtaining visas to get into this country?

Hon PHIL GOFF: If any member of this House has evidence of fraud or any other sort of crime, I think there is an obligation on the member to report that evidence without delay to the police for investigation, rather than bring unsubstantiated allegations into this House in a way that suggests that a member’s only real concern is politicking.

Rt Hon Winston Peters: Can the Minister explain the disparity between what he is saying now and what Mr O’Connor said this morning, and their defences and excuses at the 2002 election when they denied all this was going on; and do the New Zealand people not expect and deserve an apology from him?

Hon PHIL GOFF: What the various Ministers of Immigration and Police have denied have been constant unsubstantiated allegations by some members about fraud for which evidence has never been produced to the police. To the contrary, every member of this Government has acknowledged that worldwide the second-biggest problem after narcotics-trafficking is people-trafficking. That is why this Government has taken so many steps in so many areas and so vastly increased resources, so that this country can now be defended against that sort of thing—something that never happened under the former National Government and the National - New Zealand First coalition Government.

Breastfeeding—Promotion

5. STEVE CHADWICK (Labour—Rotorua) to the Minister of Health: What is the Government doing to promote the importance of breastfeeding to the health of New Zealanders?

Hon ANNETTE KING (Minister of Health): This week is World Breastfeeding Week and we are using the opportunity to promote breastfeeding by highlighting the health benefits. We have supported the baby-friendly hospital concept and are seeking to have all 87 maternity facilities accredited as baby-friendly hospitals by 2005. In the Healthy Eating—Healthy Action strategy a national promotion campaign for breastfeeding is proposed. That will be undertaken in this coming year and the Ministry of Health is working on the implementation of the World Health Organization’s global strategy on infant and young child feeding.

Steve Chadwick: What information has the Minister received on initiatives that are taking place this week to promote breastfeeding?

Hon ANNETTE KING: I understand that a petition is being launched today to promote social acceptance of breastfeeding in public places. Sadly, far too many mothers are made to feel uncomfortable when nursing their babies in public, and I commend the petitioners’ action in encouraging an overdue change in attitudes.

Sue Bradford: Will the Minister advocate to her colleague, the Hon Ruth Dyson, that the Government consider supporting a Green amendment to the current paid parental leave legislation that would require employers to provide appropriate breastfeeding space in workplaces where practicable?

Hon ANNETTE KING: This matter is subject to select committee deliberations. I look forward to that report and I do not intend to pre-empt any of their discussions.

Peter Brown: What is the Government doing to promote the use of alternative health therapies, and can the Minister advise whether any such proposals will include an evaluation of chelation therapy?

Hon ANNETTE KING: This is a little wide of the mark in terms of breastfeeding. Did the member mean to ask this on the next question? The Government does not have any alternative therapies for breastfeeding in mind at present.

Peter Brown: I raise a point of order, Mr Speaker. The opening words of the principal question are: “What is the Government doing to promote” I thought the Minister would like to promote a few other alternatives.

Mr SPEAKER: Unfortunately this is one occasion when the member is wrong.

Māori Language Commission—Confidence

6. GERRY BROWNLEE (Deputy Leader—National) to the Minister of Māori Affairs: Does he have confidence in the board of the Māori Language Commission; if not, why not?

Hon PAREKURA HOROMIA (Minister of Māori Affairs): At this point, yes, I am confident that the board is dealing with the issues in front of it.

Gerry Brownlee: I am almost tempted to ask for its order paper. Is the Minister aware that Dr Patu Hōhepa was filmed chanting: “Two, four, six, eight, don’t you bloody confiscate.”, at the recent hīkoi; if so, how can he have confidence that the board of the Māori Language Commission will deal impartially with Haami Piripi, who put similar protests on paper?

Hon PAREKURA HOROMIA: I am surprised to learn that. I myself marched against the Springbok tour. That was the last time the National Party divided this country on racial lines.

Gerry Brownlee: I raise a point of order, Mr Speaker. You may consider that Mr Horomia addressed the question, but he most certainly did not answer it. Some sort of historical reference to a time in the past when he marched in a protest has no relevance here. I assume he was not, at the time, a Government Minister, and therefore he was not marching against the policy of his Government. In this case, we have a very serious matter that the public are interested in. The chairman of the Māori Language Commission—

Mr SPEAKER: Please come to the point of order.

Gerry Brownlee: —clearly has a position. Does the Minister believe that, even with that person’s very publicly stated position, he can deal impartially with the issue? We should have an answer—a simple “Yes” or “No”.

Mr SPEAKER: The Minister did answer the question at the start. He then added an irrelevance.

Dave Hereora: What has the Māori Language Commission had to say on the matter?

Hon PAREKURA HOROMIA: As the chairman said earlier today, the commission acknowledges that the chief executive’s actions, timing, and comments have had inappropriate and unfavourable unintended consequences that the board must consider when it meets next week.

Rodney Hide: Has Haami Piripi broken any laws, codes of conduct, or contractual obligations; if so, what are they?

Hon PAREKURA HOROMIA: That is a matter for the board, and I look forward to the time that it reports back. [Interruption]

Mr SPEAKER: The Minister cannot be asked for a legal opinion, and that question was almost doing that. The Minister did address the question. His answer might not have satisfied the member, but the Minister cannot be asked for a legal opinion. I tell the member to read the Standing Orders.

Rodney Hide: I raise a point of order, Mr Speaker. Would the question be acceptable if I left out the word “laws”? But I can certainly include “codes of conduct”. I say to you, Mr Speaker, that the Minister is directly responsible for the Māori Language Commission. There has been a great deal of discussion about Mr Piripi’s behaviour, and I am happy to change the question—[Interruption] Well, if the member wants to call out during a point of order, the member will not be staying here very long, I would have thought.

Mr SPEAKER: I did not see who interjected then, but had I done so that person would have left. I am warning members seated behind Mr Hide that that is not on.

Rodney Hide: I would have thought that the Minister, as the Minister responsible for the Māori Language Commission, would have some obligation to report about whether that gentleman is in breach of any code of conduct or contractual obligation—particularly given the Prime Minister’s comments yesterday.

Mr SPEAKER: No. The Minister did answer the question.

Gerry Brownlee: Does the Minister agree with the Māori Language Commission’s chairman, who says Mr Piripi has a right to make a submission to a select committee as a private citizen; and is that position consistent with the Prime Minister’s views on this matter?

Hon PAREKURA HOROMIA: I understand that the chairman said that, but he has also made a lengthy statement in respect of what he intends to do next week, and I look forward to the report back.

Rt Hon Winston Peters: With regard to the head of the Māori Language Commission, what on earth was he doing shouting: “Two, four, six, eight, don’t you confiscate.” in English; why was he not saying it in Māori?

Hon PAREKURA HOROMIA: Because he is internationally renowned for being a top linguistic.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am sure the Minister means “linguist”.

Mr SPEAKER: I am sure he does, too. If I pulled up every member for mispronunciation, I would be doing it on a regular basis—but not often for the member raising the point of order, I concede.

Gerry Brownlee: When the Minister said this morning that issues to do with Mr Haami Piripi’s employment are matters for the board of the Māori Language Commission, not the Government, was he indicating that he will sack the board if it fails to require Mr Piripi’s resignation next week; and, failing that action, does he think failure to sack the board will continue the clear impression that this Government has a different standard of requirements for different New Zealanders based on race?

Hon PAREKURA HOROMIA: Most certainly not. That member, along with other senior State servants, should consider that rather than heartfelt emotion and supposedly staunch kōrero, or talk, being recklessly expressed, one should ensure that the brain is engaged before the mouth is opened.

Gerry Brownlee: I raise a point of order, Mr Speaker. Quite clearly—because the Minister did not mention my name—the House should assume that he has just sent a message to Mr Haami Piripi and Dr Patu Hōhepa that they should have their brains engaged before their mouths, but it does not answer the question of whether he will he sack them.

Mr SPEAKER: The Minister started out by saying: “Most certainly not.” I do not see how anybody could be more specific than that.

Rodney Hide: In light of the concerns that the Minister and the Prime Minister have had over the Māori Language Commission and its behaviour, has he any similar concerns that the taxpayer-provided Māori Television Service and Iwi radio network are campaigning hard for the Māori Party and against the Government’s Foreshore and Seabed Bill; if not, why not?

Hon PAREKURA HOROMIA: I do not have those concerns. I see it on mainstream television most nights.

Donna Awatere Huata: Is it the Minister’s intention to breach Standing Order 395(u), which states that it is a contempt to threaten or disadvantage a person on account of evidence given by that person to a committee; if not, why is his Government not standing up for Mr Piripi’s right to make a submission on behalf of his hapū—given the independence of the Māori Language Commission—rather than rolling over to the lynch mob mentality of a few of those Pākehā calling for his resignation?

Hon PAREKURA HOROMIA: As that member knows, it is a matter of privilege, and it should be raised with the Speaker.

Schools—Governance and Ownership

7. H V ROSS ROBERTSON (Labour—Manukau East) to the Minister of Education: What reports has he received on possible changes to school ownership and governance arrangements?

Hon TREVOR MALLARD (Minister of Education): I have seen reports from people arguing that parents are not the best people to govern schools. I have also seen reports advocating for most State schools to be privatised. This kind of reform goes against the views of the vast majority of New Zealanders who believe that building the best possible education system is a core Government responsibility. It ignores the fact that in OECD studies, New Zealanders ranked third in literacy, fourth in numeracy, and seventh in science. These loopy suggestions came from Bill English and the part-time Leader of the Opposition.

Mr SPEAKER: That last word is out of order, and will be withdrawn. The member knows which word.

Hon TREVOR MALLARD: I withdraw.

H V Ross Robertson: What other comments has he seen on a privatised, voucher-based education system?

Hon TREVOR MALLARD: I have reports that: “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.”, and “Traditionally, education has been the great equaliser. Voucher education puts that at risk, and would result in class and wealth-based education that characterised pre - World War I Europe. This is not just an education issue; it goes to the core of what society you want New Zealand to be in the 21st century.” Those comments were from Nick Smith.

Hon Bill English: When will the Minister concentrate on his own job of running New Zealand schools, for instance by giving a name to the new secondary school in south Invercargill that he has set up, so that Invercargill parents who want to enrol children in that school will know what school they are meant to be enrolling in?

Hon TREVOR MALLARD: I have suggested a name—[Interruption] I have suggested a name for the school, I say to the member who has not taken his pills. That name is Tweedsmuir High School, but I understand that the board would like to consider another name. That is the board’s right, and when it makes representations to me I will consider them.

Cancer Patients—Waiting Times

8. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Health: How many people currently diagnosed with cancer have waited beyond the Ministry of Health’s recommended waiting times for treatment, and what is the average waiting time?

Hon ANNETTE KING (Minister of Health): There are three main types of treatment for cancer: surgery, chemotherapy, and radiation therapy. People with cancer requiring surgery are classified and receive treatment according to urgency. People whose treatment requires chemotherapy receive treatment with little delay. People requiring radiation therapy are classified under four priority categories based on the recommendations of the New Zealand Cancer Treatment Working Party. The categories are: urgent, curative, palliative, and combined chemotherapy and radiation therapy. It is not possible to provide all the data in an oral question, but I will provide the member with the latest information as soon as possible after the end of question time. I can give him an example from the Waikato area, an area that covers his own electorate, for the two main categories, urgent and curative. Category A, urgent, is seen in an average of 2.5 days, and in category B, curative, 100 percent are seen within 4 weeks.

Rt Hon Winston Peters: Given the Minister’s answer, is she not concerned that cancer cases, which have already caused almost a third of all deaths in New Zealand, are forecast to jump up to 50 percent in less than 7 years; why are cancer specialists around this country so angry about the unacceptable delays in getting treatment if her answer is right, stating that: “New Zealanders need to get angry about a dismal failure to plan for the rocketing burden of cancer.”?

Hon ANNETTE KING: Yes, I am concerned at the rate of growth of cancer in New Zealand. It is just below 5 percent and is predicted to grow at that rate over the next few years. If one looks at the types of cancer we have in New Zealand, one sees that many of them are preventable, and I am concerned that we need to get on top of that. I have worked very closely with our cancer specialists, the Cancer Society, and others in New Zealand on the development of a cancer control strategy and an implementation plan, and the specialists are pleased that at last a Government has taken it seriously. They were concerned that in 1999, when the previous Government received a report on the need for such a strategy, it was buried and never made public, but at least they have got action from this Government.

Dianne Yates: How many new linear accelerators have been bought, and what staff are needed to operate those accelerators?

Hon ANNETTE KING: When we became the Government, the number of linear accelerators that were required to be replaced was 50 percent. Since then, most district health boards have undertaken a purchase plan to replace those linear accelerators. It takes eight medical radiation technologists to operate one linear accelerator. In addition, physics and medical staff are needed.

Dr Paul Hutchison: Why, after 4 years of knowing about the problem, are New Zealanders still sent to Australia, at great cost, when that could have been prevented if her Government had not turned down opportunities for public-private treatment partnerships in Auckland and elsewhere?

Hon ANNETTE KING: The reason why we still send people to Australia is because we have a shortage of radiation therapists. That was outlined in the April 1999 report to Wyatt Creech, which stated we needed to train more radiation therapists. It stated that we were training 16 a year. We have increased that to 38 a year. We have over 103 radiation therapists in training, up from 46 under a National Government. It takes 3 years to train them. At the end of this year we will have the first graduates from the work this Government did. If there is any crying shame in this Parliament, it is because National ignored that advice.

Rt Hon Winston Peters: If that is true, why did a recent Listener article state: “When it comes to surviving cancer, you are better off living in Australia or just about any developed country than here”, and why did a recent Commonwealth Fund report place New Zealand near the bottom in cancer survival rates; if what the Minister is saying is true, why am I reading those statements by people who know what they are talking about?

Hon ANNETTE KING: Cancer survival rates in New Zealand are lower than Australia, and it does mean that we have had to put a commitment into control of cancer, from prevention through to treatment, through to palliative care, and into research. This Government has put together such a strategy, in conjunction with those people the member has just mentioned, and we are finally to see some results out of it. It has taken commitment and money for that to happen.

Dr Paul Hutchison: Does the Minister agree the absolute unacceptability of the May 2004 radiation waiting-time reports, which demonstrate that patients right across New Zealand have waited longer than 12 weeks between receipt of referral and the start of radiation treatment; and when will she correct that failure?

Hon ANNETTE KING: I will not take responsibility for that failure. I will keep telling New Zealanders that this Government is committed to fixing it, and that by the end of this year we will finally have close to the number of radiation therapists we need. We are retaining them because of big increases in their salaries and the fact that we pay for their training, but I will not say that it is all right yet. There is further work to be done, but at least this Government has given a commitment to the people of New Zealand—something they never got from his Government.

Rt Hon Winston Peters: If what the Minister is doing is effective, why, after 5 years of her doing it, is the problem getting worse by all statistical measurement?

Hon ANNETTE KING: In terms of the growth of cancer, that is a really difficult problem for a Government on its own to be able to contain. Causes of cancer come from things like smoking, from the environment, from issues that are outside the control of a Government. What we are doing is certainly putting a lot of effort into things like tobacco control, into issues of screening, and so on. But quite a lot of that, in terms of the growth of cancer, is also in the hands of New Zealanders, and we need to work with them in terms of prevention. We have had problems in terms of provision of services and I have outlined why we have had problems. We cannot materialise radiation therapists, because we are short of them all around the world. We have to train our own. They have to be home grown and we have to keep them. That is what we have been doing. Unfortunately, it takes 3 years to train them. The combination of those things will bring us results. We have not got the results we want yet, but I say to the member that we are well on the way to achieving the results we want.

Rt Hon Winston Peters: I seek leave to table World Health Organization statistics, demonstrating, by international comparison, that Japan, with the highest smoking rate in the world, has the lowest incidence of heart disease, stroke, and cancer.

Mr SPEAKER: Leave is sought to table those two documents. Is there any objection? There is none.

Document not tabled.

Dr Paul Hutchison: I seek leave to table a report of oncology radiation waiting-times, which demonstrates that a significant number of patients waited for over 12 weeks, in May 2004.

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

Question No. 2 to Minister

RODNEY HIDE (Leader—ACT): In response to the Prime Minister’s claim in question No. 2, I seek leave to table two documents. The first is the contract with Action on Smoking and Health (ASH) setting out details of the Government paying ASH to lobby political parties and the media. The second is a Government contract with the Smokefree Coalition where, specifically set out in the contract, is the requirement that the Smokefree Coalition Trust actually makes submissions to select committee.

Mr SPEAKER: Leave is sought to table those two documents. Is there any objection? There is.

District Health Boards—Iwi and Health Providers

9. TARIANA TURIA (Leader—Māori Party) to the Minister of Health: Do all health organisations receiving funding from the district health boards require the mandate of iwi authorities, or the endorsement of other health providers operating within the district health board boundaries?

Hon ANNETTE KING (Minister of Health): No.

Tariana Turia: Why should Te Roopu Huihuinga Hauora lose its contract with the Hawke’s Bay District Health Board for iwi mandate issues and every Māori health provider’s endorsement, when it met all other aspects of its contract?

Hon ANNETTE KING: I am advised by the Hawke’s Bay District Health Board that because there were historical issues with the local iwi and the Māori development organisation, the district health board and Ngahiwi Tomoana agreed that a good solution was for there to be such a decision, and, in this case, it would require a mandate.

Early Childhood Education—Closures

10. Hon BILL ENGLISH (National—Clutha-Southland) to the Minister of Education: How many early childhood services are at risk of closure because of new teacher qualification requirements, and how many children could be affected by those closures?

Hon TREVOR MALLARD (Minister of Education): I thank the member for raising this issue by way of a press statement this afternoon, nearly a week after it was in the mainstream media. I am advised that the majority of centres—about 85 percent of the 2,515 teacher-led centres—already meet the standards well in advance of the deadline, while others have been given dedicated assistance to help them to meet the target by next year. The centres were first advised of the new requirement 4 years ago and, as the member is aware, there is some flexibility in the licensing arrangements.

Hon Bill English: Why is the Minister so squeamish about answering the question directly, and can he confirm that, in fact, he has received reports from the Ministry of Education that up to 400 early childhood centres are at risk of closure on 1 January 2005, and that that will affect 13,000 children, who may have no early childhood care to go to?

Hon TREVOR MALLARD: If the member had read the reports that have been given to him he would know that that is not correct, as there is discretion and flexibility in the licensing arrangements. I suggest that the member gets someone to read the rest of the reports to him.

Helen Duncan: Why has the Government introduced the new early childhood teacher qualification requirements?

Hon TREVOR MALLARD: Research shows that teacher qualifications are the key to delivering quality early childhood education. Research also tells us that—he still has not taken his pills—

Mr SPEAKER: That comment is not to be made again. The Minister will withdraw and apologise.

Hon TREVOR MALLARD: I withdraw and apologise. Research also tells us that regular participation in high-quality early childhood education makes a noticeable and positive impact on a student’s educational success later on. That is why we made the decision in 2000 to introduce the new qualification requirements. That decision has been widely welcomed by the sector, which, of course, knows quite a lot more about it than the semi-deranged Opposition member.

Mr SPEAKER: No, I am not going to have that comment being made. The Minister knows that it is out of order. He will stand, withdraw, and apologise.

Hon TREVOR MALLARD: I withdraw and apologise.

Bernie Ogilvy: Does the Minister agree that a policy of grandparenting for the competent and experienced group of unqualified early childhood teachers is a common-sense approach in order to institute qualifications that recognise the ability of older practitioners and the teacher shortage in the sector, as well as the Minister’s preference for qualified teachers; if not, why not?

Hon TREVOR MALLARD: There is nothing that indicates that those teachers cannot teach. All that the Government is requiring is that one person in each centre should be properly qualified next year.

Hon Bill English: Can the Minister confirm that reports from the Ministry of Education tell him that up to 400 centres could close, affecting 13,000 children, that the ministry messed up its calculations of how many teachers would be required, and that its management strategies to deal with 400 potential closures are “inadequate”, and what will he do to guarantee to parents that 400 centres will not close, and they will have childcare centres they can return to in the new year?

Hon TREVOR MALLARD: For the third time I refer the member to the fact that there is discretion on the part of the Secretary for Education in those matters.

Hon Bill English: Could the Minister then confirm to the House that, essentially, he has announced a back-down today and he will not be enforcing the regulation on 1 January 2005?

Hon TREVOR MALLARD: I do not enforce the regulations.

Rates—Goods and Services Tax

11. GORDON COPELAND (United Future) to the Minister of Finance: Does he accept, given the dictionary definition that rates are “a tax levied on property by a local authority”, that the imposition of GST on rates constitutes a tax on a tax; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): The Government prefers to concur with the advice of a 1985 advisory panel on goods and services tax, led by Dr Donald T Brash, that rates should be “subject to GST in the usual”—[Interruption]; that is the way it is signed—“way, as they are a payment provided for the services of local authorities, and especially if some of these services are provided in competition with the private sector.”

Gordon Copeland: I raise a point of order, Mr Speaker. I am not sure whether that answer really addressed the question.

Mr SPEAKER: I think the answer addressed the question. Please ask a supplementary question.

Gordon Copeland: Is the Minister aware of, and can he therefore tell the House, any international precedent where a central government has imposed a tax on a tax levied by a local government?

Hon Dr MICHAEL CULLEN: I am aware of many countries that have appallingly inefficient GST systems where they exempt various articles, where they have differential rates, and where one has to differentiate between food taken away from a place and food consumed within a place. Thank goodness we have not followed those very bad policies. I am certainly aware in New Zealand of GST being levied on top of other taxes. Every time the member fills up his petrol tank he is doing precisely that.

Gordon Copeland: Can he confirm that during the last decade the then Government had an opportunity to revisit the question of GST on rates, but decided to retain the status quo, and can he confirm that the Minister who made that decision was the Rt Hon Winston Peters when he was Treasurer in 1997?

Hon Dr MICHAEL CULLEN: I will take the member’s word for that and congratulate the right honourable gentleman on his wise decision.

Rt Hon Winston Peters: Will the Minister confirm that when I left the office of Treasurer—and a very sad day it was for this country—I instructed Treasury to continue its research on the core element of rates on which one could properly say that it is a tax on a tax, and not all rates in the way that the loose United Party is looking at this issue?

Hon Dr MICHAEL CULLEN: I thank the member for that advice, but that rather reduces my congratulations to him, because that would muddy up the GST system very substantially.

Gordon Copeland: Has the Minister at any time expressed a personal opposition to applying GST on rates?

Hon Dr MICHAEL CULLEN: I well recall two things in the Labour Party caucus when the decision came to a vote. Firstly, as senior whip I was required to bring down the then Prime Minister to ensure there was a majority—the Prime Minister was frequently absent from caucus in those days. Secondly, the motion was passed by one vote. As I recollect now, outstanding in the majority was Mr Peter Dunne, now the leader of the United Future party.

Gordon Copeland: I seek leave of the House to table the Inland Revenue Department’s report on GST on rates to the Treasurer in 1997.

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

Youth Affairs, Minister—Political Correctness

12. DEBORAH CODDINGTON (ACT) to the Prime Minister: Does she agree with her Minister of Youth Affairs that “the pendulum of political correctness had swung too far”; if so, what, if anything, does she intend to do about it?

Rt Hon HELEN CLARK (Prime Minister): Absolutely. My concern is that political incorrectness has become the political correctness of the right. I am happy to give numerous examples, starting with Ms Coddington wanting Ministers to veto what can be shown at art exhibitions.

Deborah Coddington: In light of her answer, does she think that spending $126,000 for a rainbow desk in the Ministry of Social Development to “liaise with gay, lesbian, transgender, bisexual fa’afafine, takatāpui, and intersexed communities” is political correctness gone too far; if not, what is going too far?

Rt Hon HELEN CLARK: Of course, those people make up our community. Indeed, they may make up as many as 5 percent—some estimate 10 percent of the community—so one would expect their needs to be taken into account in policy making. I can name numerous instances of the new political incorrectness becoming political correctness. For example, the member’s colleague Ken Shirley telling people last week what films they should be watching.

Heather Roy: Under Labour Party policy can we expect a similar desk at the Ministry of Social Development for the red-blooded heterosexual males whom the Minister of Youth Affairs himself claims to support?

Rt Hon HELEN CLARK: Presumably, as red-blooded heterosexual males make up about 95 percent of the male population, one could consider their needs are probably already well catered for in policy. However, I am certainly concerned with the new political correctness when people start saying that they have been told in recent years that a lot of New Zealanders of European descent find the term “Pākehā” offensive so it cannot be used. That, of course, was Dr Brash who was so sensitive on that occasion.

Gerry Brownlee: When the Prime Minister gave the red hot-blooded heterosexual male John Tamihere permission to deliver his speech, what did she think he meant when he said: “There are a number of attitudes prevalent in our society that are in fact highly dangerous to our well-being.”?

Rt Hon HELEN CLARK: I am sure he would have been referring to the propensity of right-wing parties to tell people how to live their lives, what movies to see, what art exhibitions to go to, and all the rest of it.

General Debates

General Debates

Rt Hon WINSTON PETERS (Leader—NZ First): I move, That the House take note of miscellaneous business. Our country faces a cancer-treatment crisis, and the answers to questions in the House today confirm it. Thousands of cancer patients will die needlessly over the next few years because the health system cannot provide enough early treatment for them. The problem is getting worse, and here are the facts. Cancer is one of the biggest killers in this country; three out of every 10 deaths each year are from cancer. The number of cases per year will increase from 16,000 now to 22,000 by 2011, and 9,000 of those people will die from cancer per year. Those are unacceptable facts. In New Zealand we have unacceptable delays in getting treatment. There are strategies and guidelines, but they are meaningless and are bogged down in New Zealand’s bureaucracy. There is a dire lack of medical staff specialising in oncology, there is a shortage of research funding, and there are problems in acquiring drugs and equipment—in particular, First World latest-technology drugs. Māori and Pacific Island women, especially, face serious disadvantages.

The Minister of Health has spent the last 5 years blaming everyone else for the serious problems that face New Zealanders. She has called for more reports, more responses, more reviews, and more working-parties than any other Minister of Health in the history of New Zealand. There is more paper, more talk, more hot air, and more health management doublespeak from the Ministry of Health than from any other ministry, but nothing is being done to solve the crisis that we face over the treatment of cancer patients. It seems that the Government’s solution is to send sick New Zealanders to Australia, and that is a fact. As at 14 July this year, 165 New Zealanders have already gone to Australia for treatment. The way that the Government sees to solve the cancer-treatment crisis is to buy a patient an airfare to Australia. Top cancer specialists are on record as warning the Government of this crisis. They say that services are piecemeal, and that information is fragmented. The issue is simple: if cancer is detected and treated early, many cancer patients will survive; if there are delays, many of them will die unnecessarily. There are delays in radiotherapy and surgery. Those delays are costing lives, and I ask the Government to do something about it. The Minister and her officials are playing Russian roulette with cancer patients. Thousands will die unless something is done, and done now.

We urge the Prime Minister to intervene in the health portfolio, if she can drag herself away from being the “Minister of Political Correctness and Gender Bending”. She should take the health ministry by the scruff of the neck and shake some sense into it. Thousands are dying, and they are dying unnecessarily. New Zealanders demand action to solve the cancer treatment crisis in this country, which puts us at the very bottom in terms of competing with similar countries. A recent Commonwealth Fund report put us right at the very bottom, in terms of cancer survival rates. An expert, Chris Atkinson, an associate professor at Christchurch Hospital, said: “New Zealanders need to get very angry about a dismal failure to plan for the rocketing burden of cancer”. This man, the clinical director of oncology at Christchurch Hospital said: “… with cancer forecast to jump by up to 50 percent by 2011, the lack of a coordinated approach to treatment was disturbing.” He also said: “We must get outraged. We can’t stand up in front of an international forum with this data and feel proud.”

Today we heard the answers given by the Minister, but the fact is that none of those answers can be squared with the facts and the opinion of experts. A recent article in the Listener set out exactly how bad it is to get cancer in New Zealand. The Listener article stated that people who get cancer in this country would be far better off if they lived overseas in Australia, and, worse, it also states they would be better off if they were living in any other country but New Zealand. After 5 long years, surely the Government must now accept responsibility for failing to keep experts here, for failing to keep professionals properly employed here, and for failing to bring in qualified people. When we have had 55,000 immigrants a year, how come we did not bring in some experts in this field? With 55,000 immigrants coming into this country in some years, why on earth did the Government not bring in somebody who knew what he or she was doing?

Hon JIM SUTTON (Minister for Trade Negotiations): I want to use this opportunity to speak briefly about the adoption of a framework text by the World Trade Organization general council—a framework text to advance the Doha round development agenda. This is a very good outcome for New Zealand. Ten months ago at Cancun few would have predicted that the Doha round could have been put back together again so quickly; still fewer would have taken them seriously. What is remarkable is that what has been achieved is, in fact, a much better deal than was ever on the table at Cancun. The agricultural framework is at the heart of that.

In terms of our own New Zealand contribution, we have good reason to be satisfied. The outcomes reflect that. With Tim Groser in the chair of the agriculture committee we made remarkable progress, and I pay tribute to his particular skills. He also chaired the relevant sessions of the “green room”, and it was a remarkable display. Without him, I do not believe the “green room” process would have been successful. I also pay tribute to our chief trade negotiator, Crawford Falconer, who was with me in the “green room” and is a man with a huge reputation amongst his peers as a professional trade negotiator around the world. There is no doubt about it; New Zealand has a truly world-class team in that role. The rest of our team based in Geneva is also of an extremely high calibre, and the results that we obtained there reflect the investment that has been made in the quality of that trade negotiations team over many, many years.

Throughout the marathon “green room” process I was able to work with our friends to keep the prospect of a historic agricultural deal alive. We did play a key part in keeping the industrial tariff negotiations alive also, when it looked as though they could collapse in the same way, taking the whole deal with them, as happened in Cancun with regard to the so-called Singapore issues. There is no doubt that New Zealand comes out of this process with an enhanced reputation as a committed multilateral player and a credible arbitrator of conflicting interests.

The framework for agricultural market access is much better than that on the table in Cancun. Because it is a framework, it is not the shape of the final deal. That will remain the most difficult part of the forthcoming negotiations. Getting the text on this aspect was the hardest part of putting the deal together last week. But it sets the basis to get the deal done. It gives us the key elements to improve our access to important markets. Whereas the text in Cancun left everything vague, this framework spells out many of the elements that we wanted. At the top of the list is the historic commitment to eliminate export subsidies in agriculture. There will be long, tough negotiations to set the date and the pace of their elimination. But for the first time in more than 50 years the debate will be about when, and not about whether, that will happen.

The framework also sets the stage for big cuts in domestic subsidies. The rest of the negotiation will be about how far the cuts will go. But this framework will certainly help. It will help to put the pressure on, and to keep it on. This was actually the key target of the large G20 developing countries.

SIMON POWER (National—Rangitikei): When the male vote starts to disappear for the Labour Party, what does it do? It brings out the red-blooded males of the Labour Party to set things right. Two of them came out of the woodwork to set things right with the New Zealand public. The Labour Party brought out big, tough Mr Tamihere, who said: “I believe that the pendulum of political correctness has swung too far. I am sick and tired of hearing about the deficit model, where, as red-blooded heterosexual men, we are supposedly the creators of all that is bad and evil in this world.” Well, what has Mr Tamihere done to change it? Not a thing. He has sat on that side of the House with the Government like a lamb. When Mr Tamihere and the one other red-blooded male from the Labour Party came out and decided to state their claim, what did we get? There was no change to policy, and no adjustment to the direction of the Labour Party. But Mr Tamihere was tough enough to have Helen Clark clear his speech first— he was very tough!

What did the other red-blooded males in the Labour Party do about it? Well, David Cunliffe went out and got his hair streaked. David Cunliffe decided he would join in the red-blooded male attack, went and got his hair streaked, and sits over in the corner with newly dyed blonde hair. Well, the electorate will not be convinced by that. Mr Tamihere should get out and fix the “rainbow desk” at the Ministry of Social Development, and start putting things right for the people he purports to represent.

What did the other red-blooded male from the Labour Party decide to do? Well, old Mr Trevor Mallard stepped out as the other red-blooded male and said: “I regard myself as an indigenous New Zealander—I come from Wainuiōmata.” There he is—Mr Mallard—about to take a big swing when he said: “There is a myth that the treaty gave Maori extra rights over and above those of other New Zealanders.” Well, I am sorry, but what he failed to do was to clear that speech with Dover Samuels and Parekura Horomia. Mr Samuels said that we are not talking about rights; we are talking about considerations that Māori are tangata whenua. He said: “I think perhaps my colleague should go and read the words of the treaty.”, whereas Mr Horomia said Mr Mallard was indigenous “to the extent that he was born in New Zealand, but he will never be tangata whenua because there is only one tangata whenua, and that’s Māori.” So while the red-blooded males of the Labour Party—both of them—are trying desperately to court the male vote and get it back to the Labour Party, the other members of the Labour Party continue to remind them that if they do not get their speeches checked by Helen Clark, the first thing they can expect is for Parekura Horomia and Dover Samuels to shoot them down in public almost immediately.

But what has changed? What will Mr Mallard do about the Resource Management Act, the Local Government Act, the decile funding system, primary health organisation governance and funding, capacity building grants, and all the other legislation that allegedly—or not allegedly, depending on which side of the fence one sits on—favours Māori and contain treaty clauses? If all New Zealanders are regarded as indigenous, what implications will Mr Mallard’s views have on those pieces of legislation? Well, I want to state for the record now that they will have none. There will be no changes to those pieces of legislation at all, because that Minister will not get those changes past Helen Clark and her band of merry followers. There is no way that the Labour caucus will let both the red-blooded males in the Labour caucus get their own way. They are in for a long, tough time under Helen Clark and her colleagues in that particular caucus.

What about Mr Piripi and his relationship with the Government, in terms of comparing what has happened to him with what happened to Kit Richards? Well, there is just no consistency in the way that the rules have been applied between those two cases. Two standards exist from this Government: one standard for Mr Piripi, and one standard for Kit Richards.

LARRY BALDOCK (United Future): This afternoon Parliament will have an opportunity to debate and vote on my colleague Gordon Copeland’s bill to remove GST on rates—a tax on tax. Before discussing the GST on rates issue though, I want to take this opportunity to outline United Future’s policy on a number of issues that relate to local government funding. We do not consider the removal of GST on rates to be a silver bullet to solve all the financial issues facing local councils and their burdened ratepayers. It is one of a series of policies we have been promoting since entering Parliament 2 years ago this month.

Firstly, we support increasing the financial assistance rate, paid by Transfund for local roads, by up to 80 percent, to alleviate the burden that the cost of local road maintenance and construction places on rates, and therefore on councils. In addition, in the short term, we will be supporting the increase for a further 5c petrol tax, and a similar increase on road-user charges for light vehicles from 1 April 2005, which will be devoted entirely to the National Land Transport Fund and distributed regionally for local road construction. We made sure, in negotiations with the Government, that none of the 5c would be diverted to the Crown account, formally called the consolidated account.

With the announcement of the funding package for Auckland’s roads, I made sure in last-minute negotiations with Michael Cullen that all the funds being given to Auckland would come from a reduction in the 18.5c currently diverted to the Crown account from petrol excise, which will approximately equate to a 3c reduction. We will continue to push for another 2c reduction, to enable the increase in the financial assistance rate I mentioned earlier. In that way, motorists would see a matching of a 5c increase with a 5c reduction in the amount diverted.

We support and will be arguing for a review of the rates rebate level to assist those on fixed incomes. We applaud the initiative of those councils that have also prepared plans for enabling some ratepayers to defer rate payments on their estates, which enables them to remain in their properties in circumstances where they are asset-rich but cash-poor.

We are also supportive of the concept of central government sharing a percentage of GST revenue with local authorities on a regional basis, in a similar way to the new road revenue. I do not mean charging GST on rates, and then giving that revenue back to councils. No, that is a tax on tax, and it is wrong. The Government cannot be trusted if it collects that tax, because in a fiscally lean time the Government will take it away again—as happened in the beginning when GST was first imposed upon rates. It was to be given back to councils, but that promise was broken very quickly, which is why we find that the Hon Peter Dunne has now changed his mind on the issue.

We are talking here about central government sharing a percentage of the general GST it collects—perhaps as much as 1 percent—reallocating that to the communities it came from; and setting that process by legislation. One percent of current GST from that tax’s annual revenue of $9.57 billion for the year ended 2004 would amount to approximately $95 million, to assist local councils in the burdens they must face. We agree there may need to be some parameters around that funding, such as limiting it to infrastructural projects and not to operating expenses. That debate is something we can have in discussion with the Government when this proposal is fully put on the table, and restrictions can be listened to that will make sense in that regard.

Indications from the Government that consideration is being given to assist small councils with large infrastructure projects, such as sewerage and water treatment, would also have the support of United Future.

All this is necessary because we entirely agree that local government has been given more and more responsibility over recent years—without any additional funding except that which it raises primarily from property owners—and that is not just with the introduction of the new Local Government Act. That Act actually helps by giving a new power to councils to take subdivision impact fees, which enables councils to spread the costs of providing new amenities for our communities to new homeowners as well as existing ratepayers. But there are limits as to how far that power can be extended without it having a negative effect on the cost of housing, particularly for new families and first-time buyers.

It was precisely because of all the concern about the increased costs to local government that could be brought in by the new Act that I negotiated with the Minister for Local Government, Chris Carter, for a review of the Act to be done by the Local Government Commission in 2007, and for recommendations to be given to the Minister even as early as 2005—before the next national elections—if there were areas of concern. I think there are already sufficient areas of concern for that inquiry to begin now.

RODNEY HIDE (Leader—ACT): The Civil Aviation Authority is a very important organisation in New Zealand. It ensures what is most important—that the aircraft flying overhead in which we travel are safe for transport. In order to do that, it has extraordinary powers under the statute that governs it. I consider that the Minister in charge of civil aviation, the Hon Harry Duynhoven, is a friend of mine, but I have to say he has totally failed the transport sector in respect of the Civil Aviation Authority, and I believe that over this issue he should step aside. I also believe that the Director of Civil Aviation, John Jones, has to resign, and if he will not, he should be sacked.

I want to take members back to the Mercer Flight Centre and the investigation that the Civil Aviation Authority undertook. What happened was that the Civil Aviation Authority, under the leadership of its top flight operations inspector, one Mr Richard Cox, who was the lead auditor of this team, put the Mercer Flight Centre under covert surveillance. There is nothing particularly wrong with that, but then the problems started. We know from the State Services Commissioner that the Civil Aviation Authority grounded this airline, effectively, and then, blow me down, Mr Richard Cox turned up and said: “If you pay me some money on the side, I’ll help get your safety levels up so that you can meet the criteria.” Of course, the Mercer Flight Centre was somewhat alarmed at that. It rang the Director of Civil Aviation, John Jones. He said that it was OK—that he had authorised it. Not only that; he had authorised it in writing, in a letter. Of course, the State Services Commissioner and this Government thought that was outrageous. But, unfortunately, the only person who was sacked out of this was Mr Cox, who had been doing exactly as he had been directed to do by his own chief executive officer.

We then discover that the Civil Aviation Authority, while auditing the company, received stolen property. It then used that stolen property as part of its audit, returned the stolen property, then lied about it. That would be bad enough, but, unfortunately, the stolen property was an aircraft logbook, which had been taken out of a plane. I shall quote from—

Hon Trevor Mallard: An aircraft logbook?

RODNEY HIDE: Yes, and it was taken out of a plane. Trevor Mallard finds it hard to believe, but I quote from the report of 16 June 2004, given to me by the chairman of the Civil Aviation Authority. The young agent who was part of the team said: “Richard told me to take the book with me out to the aircraft, when I was going to do my inspection, and then I would ‘find it’ in the aircraft and bring it back with all the other documentation to the Mercer Flight Centre buildings. If anybody asked me, I was to say that I found it in the aircraft behind the pilot seat, under the carpet.” Why? Because the company was looking for the logbook, which it needed to maintain that plane. Here was the Civil Aviation Authority, in receipt of stolen property, returning it to the plane then lying about where it had been found and what had happened.

But, more alarming, the chief executive officer of this company explained to me that he believed that telephone was being tapped—that is, that the Civil Aviation Authority knew what he was saying on the phone. I said: “That’s impossible.” Well, I can assure the House that Richard Cox of the Civil Aviation Authority used taxpayer-supplied scanning equipment to listen in to telephone conversations, and used a tape-recorder to tape them as part of his covert surveillance. I believe that New Zealanders should be horrified to learn that civil servants are tapping people’s phones. I am amazed that this Government does not seem to care. I can assure those members that the chairman of the Civil Aviation Authority fully accepts that private telephone conversations were listened into as part of a surveillance operation, and that the results of those conversations were recorded.

Hon MARIAN HOBBS (Minister for the Environment): Shortly I will be releasing the first ever New Zealand urban design protocol, which will help make our towns and cities better places in which to live. A few weeks ago I released 14 national environment standards to improve air quality, and next week I will sign the packaging accord on behalf of the Government—another plank in our drive to reduce waste and increase recycling. Almost every week this great Labour-Progressive Government has provided solutions to some of New Zealand’s most pressing environmental problems. My colleagues the Minister of Conservation, the Minister of Fisheries, the Minister of Energy, and the Minister for Biosecurity have similar stories to tell about practical, wise, well-considered, and partnered policies to help them protect and enhance our environment.

That is in direct contrast to the actions of those on the other side of the House, both now and when they were in Government. Just the other day, at a select committee, Nick Smith told me that his only job was to oppose—that is all. He was not interested in environmental solutions. He was not interested in constructive arguments. Faced by the problems in the Waitaki Valley, this Government came up with a solution. We will ensure that there is a regional plan for water allocation out of the Waitaki catchment, which is something the people in that community have been wanting for a long time. As usual, the Opposition is prepared only to play politics, rather than support the solution the community wants. Opposition members oppose the bill. They have tried to play one part of the community against the other. Nick Smith and Don Brash were helicoptered up into the Mackenzie Country—I do not know at whose expense—and they promised to move amendments to the Waitaki bill to give water to one particular group of farmers, the Mackenzie farmers, but not to the Aoraki Water Trust farmers or the Lower Waitaki farmers—just one particular group of farmers. They said that, yes, they would see the bill amended to make specific allocations of water to the Mackenzie farmers. Don Brash said in the Otago Daily Times on 11 March, Nick Smith said on a number of occasions, and Sandra Goudie made it clear in this House that National wanted the Waitaki bill to reinstate those farmers’ water rights.

The problem is that they did not actually realise what they were promising. When I pointed out that their plans would cut right across the High Court case currently under way, and potentially involved a major interference in the property rights of existing water users, thereby setting a very dangerous precedent, they backed right off. Indeed, after getting those farmers’ hopes up, Drs Don Brash and Nick Smith then—after some phone calls had, I think, been made—changed their minds. Nick Smith is now reported as saying National will not move amendments to give specific allocations; it will just ensure that the farmers’ concerns are heard. What a way to treat people! These farmers do have valid concerns that should be heard, and I have already asked that the work be done so that that happens. It does not require amendments to the bill, but it also does not require getting people’s hopes up only to dash them when people who understand about property rights in this country pick up the phone and start talking to Dr Don Brash.

But the real question is what happened here. Could it be that Drs Don Brash and Nick Smith just did not understand what they were doing? Is it that Nick Smith had a good idea about what to do in the Waitaki, which poor, unsuspecting Don Brash did not really understand? When Nick Smith got Don Brash on the bandwagon—even if it was in a helicopter—and Don Brash found out it involved interfering with property rights, did Don Brash tell Nick Smith to back off? Did Don Brash have to rein in Nick Smith yet again? If that is the case, we have to wonder about Nick Smith’s future in the National Party. My colleague David Benson-Pope caught Nick Smith out in the House last week making allegations that have since proved to be untrue. He made a song and dance about Transpower needing special legislation. Transpower issued a press statement saying that no special treatment was needed. We have only to think about these things. Do members remember that bungled citizen’s arrest on some poor, unsuspecting piece of carpet here at Meridian Energy a few years ago? Nick Smith might not survive National’s reshuffle last month. Will he be the next? Sowry, Scott, Simich, and Smith—all casualties of “Dr Don”.

All those sideshows just hide the even sadder reality about the National Party, and that reality is that, under Don Brash, National members have turned their backs on New Zealand’s environment. Given half a chance, the high country would be gone by lunchtime.

Hon Dr NICK SMITH (National—Nelson): I now know why Helen Clark sacked that Minister as Minister for Biosecurity, sacked that Minister as Minister of Broadcasting, and now has sidelined that Minister from her responsibilities for the Resource Management Act. She is such a joke.

But I want to talk about what really has New Zealanders laughing, and that is the amazing speech made by John Tamihere in which he said it is now OK to be a red-blooded, heterosexual male, and the amazing speech made by Trevor Mallard, who said that all New Zealanders are indigenous. That just shows how desperate this Government has become; it shows that it is on the rocks. Government members have done their polling. They know they are in trouble. They know they are going down the gurgler, so Mr Mallard and Mr Tamihere are trying to save a sinking ship. Their problem is that New Zealanders can smell a con a mile away. Helen Clark and her cronies decried the speech that Don Brash gave at Ōrewa, and now, 6 months later, Trevor Mallard is giving the same speech, although without the finesse and certainly without the style. Sending Trevor Mallard to patch up race relations is a bit like sending Dick Cheney to a peace conference on Iraq. The whole Mallard speech was a desperate sham.

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

Hon Dr NICK SMITH: He said that all New Zealanders are indigenous. I have a question for Mr Mallard: is he going to change the Health Act, the Local Government Act, and the Resource Management Act? Of course not. Those members are just kidding. They are speaking with forked tongues. Trevor Mallard is out there telling one story to Pākehā New Zealanders, while Parekura Horomia and Dover Samuels are telling a very different story to Māori. Just what is the Government’s approach? Nobody is to know. All we know is that it has a set of PC policies on the one hand, and on the other hand it is trying to scoop up the anti-PC vote with the speeches from the likes of Mr Tamihere and Mr Mallard.

Then we had John Tamihere’s speech. It speaks volumes about how PC this Government has become when a Minister of the Crown has to stand up and say it is OK to be heterosexual—after he has had the permission of the Prime Minister. John Tamihere told us that all this PC stuff has gone too far, but my question is where was John Tamihere when all the PC legislation was passed. I do not remember his getting to his feet and arguing that any of that was wrong, which he would have done if he were a real man. His statements about the Family Court were even more extraordinary. He said that the Family Court is anti-men, that it is opposed to males. Is it not interesting that if an Opposition member criticises the Family Court, that member gets frogmarched over to the High Court and charged with contempt, but if one is a Government Minister criticising the Family Court, it is OK?

The problem with ”Johnny-come-lately” over these issues is that he cannot have it both ways. He cannot be a Minister in the most PC Government that New Zealand has ever had, then pretend that he wants to join the forces of opposition and cry foul. Mr Mallard cannot be a senior Minister, imposing all sorts of new and special legal rights for Māori as indigenous people, then hop around the country and say: “We are all indigenous.” Those two speeches show how divided and had-it this Government is. Trevor Mallard is saying one thing, and Parekura Horomia and Dover Samuels are saying something else. It is a Government that is not prepared to defend its record. Trevor Mallard is not prepared to defend the Government’s record on race relations. John Tamihere is not prepared to defend the politically correct record of this Government. We see that, when it comes to the crunch, they do not have the courage to stand up for the legislation this Government has been trying to pass.

What they are trying to do is steal the clothes of the Opposition, because they know that the values we stand for are those of New Zealanders. Those members have abandoned principle; they have abandoned defending what their Government has ever done, so desperate are they to cling to power. The voters see this fraud. They know that what John Tamihere and Trevor Mallard have to say has no substance, and that is why this Government will go.

Hon DAVID BENSON-POPE (Minister of Fisheries): Protecting our environment is a strategic investment in New Zealand’s future. So let me make it clear to members of those political parties—including the member who just spoke—that would like to see the Resource Management Act gutted, and development proceed at the expense of local communities and the environment: it will not happen. As New Zealanders we value our clean environment and the lifestyles we have developed around it. We in Government are not pretending that the Resource Management Act is perfect. We are currently reviewing that Act and I have said we want to find more certainty of process for those seeking consents and better decision making in general. But we will not be watering down the Resource Management Act’s ability to protect the environment.

National’s prescription for the Resource Management Act is to severely limit those who can have a say. Local communities would be bypassed with little ability for them to help solve the environmental problems that affect them. This takes us back to the days of the National Development Act and the Clyde Dam legislation where locals were shut out and projects half built before it was discovered they were not economical or environmentally sound. There are not many people in the southern cities of this country who do not remember being forced by the previous Government, whose members are now in Opposition, to sell the Waipori Dam, or the threats to privatise the roading system.

As a Government, our objectives have been to build a stronger economy, but not at the expense of empowering local communities to make decisions about local environmental issues. Cutting back on public notification, and fast tracking new roads and infrastructure, is a ticket to shoddy and haphazard development.

The National Party Resource Management Act spokesperson, Nick Smith, says the Act needs to be rewritten to close the gap between New Zealand and Australia. He says the Act is stifling growth. That is yet more nonsense from Dr Smith. The 2004 Index of Economic Freedom, published by the Heritage Foundation and the Wall Street Journal, confirms that New Zealand is the third “free-est” economy in the world. The UK was seventh, the US was 10th, and Australia was 11th. In 2003 the New Zealand economy grew by 3.5 percent against an OECD average of 2.2 percent. Australia grew less than us at 3.3 percent. In fact, growth has been significantly higher in New Zealand compared with most other OECD members, for a number of years now.

Statistics New Zealand’s household labour force survey shows unemployment dropping to 4.3 percent—the lowest rate of unemployment in 16 years. That is 193,000 more New Zealanders in work since Labour came to office. Our unemployment rate is the fourth-lowest in the OECD; lower than the UK, Japan, the US, and—I say to Dr Smith—lower than Australia.

Dr Smith also says of the Resource Management Act: “There are some good features in the Act.” He went on to say: “The overriding principle of sustainability is also sound.” Mr Smith concludes, however, that: “Some New Zealanders are quite contradictory in their views”. Contradictory is too polite a word for Mr Smith’s rantings on the Resource Management Act. Earlier this month Transpower—the company responsible for South Island transmission, in part—took the extraordinary step of issuing a news release to distance itself from the wild accusations of Dr Smith. Dr Smith, having been corrected by those experts several days before his party’s national conference, would have been expected to stop repeating such ridiculous claims. Oh, no! Dr Smith’s regrettable speech on the Resource Management Act carried the same untruths, regardless.

Contradictory was exactly what his own party leader, Don Brash, was on the Resource Management Act. The very morning that Dr Smith was saying the Act had some good features, Mr Brash was telling the media that the whole Act might need to be scrapped. The evening before, National’s economic spokesperson, John Key, said much the same thing. He said the Act was anti-progress. Well, there is a euphemism: progress! Is that what one calls National’s plan to create the bureaucratic monolith called an environmental protection authority? That is yet another copycat policy from National’s buddies, the Americans and the Australians.

We should not be surprised as it turns out that most of National’s flimsy policies are about taking the policy of the US or Australia, twinking out those countries’ names, and writing in the phrase “National Party” instead. Only yesterday Dr Smith tabled such feeble material in the House. If anyone had any doubts about the degree of contradiction on the Opposition’s side of the House, let me read these remarks. Mr Connell said: “I would rather support a few discreet coal-fired plants, located exactly where we need them, than put up with the noise pollution from windmills.” Paul Hutchison said: “We are proud that Simon Upton led the initiative for New Zealand in the initial work at Kyoto. National supports any effective reduction of greenhouse gases.”

Hon DAVID CARTER (National): It is the arrogance and ranting of that member, David Benson-Pope, that is the reason the public of New Zealand is switching off this Government. I will refer firstly to some decisions that I was involved in in the late 1990s when the National Government sensibly gave the ability to the West Coast to sustainably manage its beech forests. During that time I met on a number of occasions with an honourable New Zealander, a man called Kit Richards. This man had strongly held views on the sense of sustainable management of the beech forest and happened to send those views privately to a few of his colleagues. Those views were not the same as the Prime Minister’s and he was unceremoniously fired from Timberlands because he was not allowed to have views to which the Prime Minister did not adhere. Mr Richards was fired.

Then along comes Mr Piripi, the chief executive of the Māori Language Commission. He is prepared to publicly predict civil war if the foreshore and seabed legislation proceeds, and at this stage of proceedings the Prime Minister accepts his comments. Now we have a revelation that the chair of the commission, Dr Hōhepa, not only supports the comments of Mr Piripi, but was himself shown on national television chanting on the steps of Parliament in support of the hīkoi that opposed the Government action. At this stage he too still holds his job. So where is the justice when two Māori New Zealanders can criticise the Government and remain in their job, and Mr Kit Richards, a white New Zealander, cannot?

The Government polling shows that it is in trouble and in terminal decay, so out it comes with two speeches—one day after another—from Mr Mallard and Mr Tamihere. Let us first look at Mr Tamihere’s speech. This is the man who roars like a lion when he is away from Wellington, and then sits at the feet of Helen Clark as she pats his head and his ego and tells him that his speech is OK. It is unbelievable that before he is allowed to speak, this tough man has to have his speech checked by the Prime Minister.

In that speech he proudly admitted he is a red-blooded heterosexual male, and that comment was OK'd by the Prime Minister. I guess the man would be an endangered species within the Labour caucus; there are not many red-blooded heterosexual males popping up—[Interruption] I could not possibly comment on that one.

Then we move to the surprising speech from Mr Trevor Mallard in which he declared a new definition of indigenous people—he is an indigenous New Zealander from Wainuiōmata! People asked him what rights that gave him under the Resource Management Act, or to special access to healthcare, or to decile funding for children in schools with a predominance of Māori. Here we have a Government saying the things that Don Brash said in Ōrewa. When Don Brash made those comments he was called a racist, but now because the Labour Government knows that New Zealanders genuinely care about race relations in this country, out come Mr Tamihere and Mr Mallard trying to make similar comments.

But did the New Zealand public believe them? Not likely! These two speeches were the feeblest U-turns we have seen yet from a Government that is now in terminal decay. This Labour Government has had its time. In summary, New Zealanders have woken up to the social engineering and the political correctness that has occurred over the last 4 years. It has gone on for far too long and New Zealanders are finally saying that enough is enough.

DAVID PARKER (Labour—Otago): It is another sad, sad week for National. Despite the controversy of foreshore and seabed, where is that party going in the polls? Down, down, down! Why is that? National has no principles and, added to that, no depth. The bunch on the other side is a talentless and depthless bunch. When Dr Brash is compared with Helen Clark, there is overwhelming support for Helen Clark. Dr Brash, the pale comparison that he is, is pallid and unsupported in the electorate.

It goes further. The whole of National’s front bench is weak. When Gerry Brownlee is compared with Dr Cullen, New Zealand knows the difference. Dr Cullen is capable; Mr Brownlee is a buffoon. Lynda Scott compared—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I know what the member is going to say. That is a personal reflection, and under Standing Order 116—

DAVID PARKER: I withdraw and apologise. Lynda Scott compared with Annette King! No wonder Lynda Scott has resigned! Then we go further down to the juniors. So many of National’s front bench are under 40, with little life experience or experience in Government. We heard from one of them today. Simon Power, an expert in male-patterned baldness, gave us a speech attacking John Tamihere’s speech about concerns for men, particularly some young men. Simon Power has a problem with that, so he attacks John Tamihere for it. Well, why? There is nothing wrong in supporting groups within our society. That is where National goes wrong. We know that New Zealand is made strong by supporting any of its groups that need help, be they young men with problems, or other minorities. National does not support minorities, and is afraid to do so. Then we heard from Dr Smith. I quote him: “New Zealanders can smell a con a mile away.”

Hon Dr Nick Smith: That’s right.

DAVID PARKER: He says that is right—and they can. Nicholas Rex Smith is a con. He was convicted of contempt of court. He was found guilty by the High Court of New Zealand this year. We in Parliament are in the privileged position of being able to change laws. Until we change them, we, more than anyone else, should know we are bound by them. Earlier this year Dr Smith was found in contempt of court by the High Court. He is contemptible. He was represented by Queen’s Counsel, and he had his day in court. Did the court believe him? No, it did not. It found him to be in contempt of court, because he had phoned the caregiver of a child and accused her of stealing the child, despite the fact that she had the care of the child with the authority of the court. Indeed, at the time the court order was made, it was with the consent of the natural parents. Dr Smith asked that caregiver whether she felt guilty for stealing the mother’s child, but he denied making that comment. Did the court believe him? [Interruption] Do you say that you did not say that?

The ASSISTANT SPEAKER (H V Ross Robertson): The member may not bring the Speaker into the debate.

DAVID PARKER: Dr Smith said—

Hon David Carter: It’s a long 5 minutes.

DAVID PARKER: It is a long 5 minutes. Well, his actions were contemptible, and he was found in contempt of court. What did the National Party do—

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member, but although he is making a hard-hitting speech, and although some interjections can be expected, they should not be such that the member cannot be heard. The Speaker will not allow that.

Simon Power: I raise a point of order, Mr Speaker. That places us in a difficult position, because if the member opposite is intent upon making inflammatory remarks during the course of his contribution to the general debate, then he invites disorder from the Opposition side of the House, and invites members on this side to protect Dr Smith’s position in respect of those comments made by the member. If it is now the case that inflammatory remarks made by Government members are not able to be challenged by interjections from this side, then by my reading of the Standing Orders, I say that that is a complete change to the historical position.

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry if the member misunderstood. I am saying that I cannot allow a member to be drowned out. Interjections are considered to be OK if they are rare and reasonable.

DAVID PARKER: I raise a point of order, Mr Speaker. I do not think you have ruled on Mr Power’s point of order, which was to deny that I am able to call Dr Smith contemptible, and to use language that suggests—

The ASSISTANT SPEAKER (H V Ross Robertson): No, no.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. In every general debate I have participated in so far this year, Government members have interjected very loudly all the way through every single speech. So I have some difficulty because of the fact that Speakers need to be consistent in the standards they are setting. I had a constant barrage of shouting all the way through my speech, and you sat there silently. My colleagues did not take a point of order, for the very reason that with just a 5-minute speech it ends up breaking the flow. I simply ask Speakers chairing the general debate to be consistent, because I put up with a continuous barrage, yet with a few points made on Mr Parker, suddenly the Assistant Speaker wants to protect that member.

Hon Mark Burton: I raise a point of order—

The ASSISTANT SPEAKER (H V Ross Robertson): No, no. I really do not need any help on this; the member will please be seated. The Speaker will not allow a member to be drowned out. Now, I recognise that this is a vigorous place, and that we should have vigorous and passionate debate. I do not have a problem with that—in fact, I welcome it. But when it gets to the stage when the Speaker cannot hear the person on his or her feet, then the Speaker will intervene.

DAVID PARKER: For the sake of listeners, I say that I am not being—

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

The ASSISTANT SPEAKER (H V Ross Robertson): I tell the member that I have already ruled on this.

Rodney Hide: I know. This is a new point of order. I think one of the things you should reflect on, Mr Speaker, is that when you are considering these points of order you do not enter into the debate. I do not think it is correct to say that there was some inflammatory language used, or to describe the speech as being hard-hitting. I do not think that that was the complaint. To say that that was a hard-hitting speech suggests to members on this side of the House that red-blooded, heterosexual males over there are in danger.

The ASSISTANT SPEAKER (H V Ross Robertson): The member has made his point.

DAVID PARKER: Having put pressure on that caregiver by saying that it was State-sponsored theft of a child, Dr Smith then said that that person should be concerned because Parliament was the ultimate court. Well, Parliament is the ultimate court, in that its members have the ability to change laws. But we, more than anyone, should know we are bound by the law. That conduct was disgraceful, and it was made worse when the National Party gave that man a standing ovation as he walked back into Parliament. Having been found in contempt of court, Dr Smith was given a standing ovation by National members. It is no wonder that the Otago Daily Times on 20 July 2004, after celebrating the indication that Mr Sowry will not stand again at the next election, stated: “It would have been more useful for Dr Brash if one or two other brat-pack members, such as Nick Smith and Tony Ryall, had found it timely—

Hon Dr Nick Smith: I seek leave of the House to table my statement that I was happy to have a by-election with the people of Nelson on the issues raised—

Document not tabled.

DAVID PARKER: I seek leave to table the decision of the High Court of New Zealand, which found Dr Nick Smith to be in contempt of court.

Hon Dr Nick Smith: I raise a point of order—

The ASSISTANT SPEAKER (H V Ross Robertson): Hang on. I will put this first. Is there any objection—

Hon Dr Nick Smith: No. I raise a point of order, Mr Speaker. I want to speak to that quite specifically. [Interruption] It is speaking to the point of order.

The ASSISTANT SPEAKER (H V Ross Robertson): Well, the member has sought leave, and the House is the master of its own destiny; it can either reject it or allow it.

Hon Dr Nick Smith: No, no. There is a very important Standing Order in this respect, Mr Speaker. I raise a point of order, Mr Speaker. There is a longstanding Standing Order that we cannot seek leave to table a document that has already been tabled. The document that Mr Parker seeks to table was tabled by the Speaker when it was delivered by the High Court in May.

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

DAVID PARKER: I seek leave—and anyone can decline it—to speak to the point of order.

The ASSISTANT SPEAKER (H V Ross Robertson): No. If what Dr Smith alleges is correct, then that is where the matter will rest.

DAVID PARKER: If Dr Smith is giving me an assurance that that document has already been tabled, then I am happy with that.

R DOUG WOOLERTON (NZ First): I often praise the actions of the Labour-led Government, but today I cannot do that.

Government Members: Aw!

R DOUG WOOLERTON: Today I think, “Yes, it is Wednesday.”, and today I think the Government needs a clip around the ear. The very issue where this Labour Government promised much, and that it takes most pride in, is the issue it is failing in, and that is race relations. I speak on race relations as a member of a party whose caucus is almost 50 percent Māori, of which I am proud. This Government promised much as far as race relations was concerned, and it has delivered nothing. In fact, we are in need of some clear direction and leadership.

I speak out of disappointment, I guess, rather than anger, because I thought that, after the past years when, under both Labour and National administrations, much was done to address treaty issues, this Government, which had promised large, would go out there and start to deliver in a progressive fashion those things that remain to be done for our Māori people. But that has not happened, and I think that is because at the last election this Government raised expectations to a point that they could not be delivered on. With due respect, I would suggest that Don Brash is doing a similar thing in exactly the opposite way at the present time. Part of the problem is that when one raises expectations then fails to deliver on them, it creates an anger in the country, and that anger is manifest at the present time. That anger disappoints me, and it is an anger that I have not seen in my lifetime. We are hearing talk of civil war, no less, at some time in the future. I know that the man who said that has retracted to a degree those statements, but that does not alter the fact that they were made. I have never heard that in my whole life in this country, and it saddens me to hear it now.

I believe that this issue started before the aquaculture situation, which brought about the foreshore and seabed issue, arose. I believe that it started at the last election, when too much was promised. I believe that this Government now needs to stand back from some of the things it has promised, and take a realistic look at what can be and should be achieved in this country, and then, I think, the problem can be resolved. But unless the Government does that, I think we are in for a messy, messy business. As I said earlier, I say that in disappointment rather than in anger, and I hope the Government will see fit, in the time remaining before the next election, to readdress this issue and get on with it in the fashion it promised to do at the last election.

MOANA MACKEY (Labour): Anyone who cares about New Zealand’s natural environment, or the industries that rely on the health of New Zealand’s natural environment, or in fact New Zealanders’ quality of life, should be very concerned at the prospect of a National-ACT Government. Why? Because those members are short-term thinkers with short-term policies. Let us look at some of their policies.

I start with superannuation. In the short term we might be OK under the National Party, if we believe what it says—and history tells us to be very wary of the National Party fulfilling its election promises. Those members say that in the short term we might be OK, but if we are under 50 we should not count on a National Government giving us any support. Well, that could be another dismal attempt by the National Party to grab the youth vote—we have seen it before. But if we trust those members’ promises, the bottom line is that if we are under 50, the National Party says not to count on any Government superannuation when we retire.

Let us look at law and order. The National Party says: “Lock them up and build more prisons.” Under the National Party, there might be a prison on every corner, but those members know that they will not be around to face up to the consequences of their policies. They will not be around to accept the blame for them. They do not want to have policies that stop there being more victims of crime. No, they just want to lock criminals up, and to be the ambulance at the bottom of the cliff and not the fence at the top. What will those members do? They will abolish parole, despite the fact that evidence shows parole reduces the incidence of reoffending. No, they will ignore that evidence, because it is not politically expedient to admit that when people released from prison go straight back into the community, they are not likely to rehabilitate very well. But those members will add a period of supervision before prisoners go back to their communities—they will add parole. So those members will get rid of parole, because it does not work, and replace it with parole. Well, that is brilliant, and it shows how short term the National Party is in its thinking towards law and order policies. The public of New Zealand should be very concerned that the best thing that a major party that, potentially, could lead a Government can say on law and order is: “We will build more prisons.” That is not a long-term vision for New Zealand, and New Zealanders should be very concerned.

On race relations, what is those members’ long-term vision? Well, they do not have one. They stir up the pot on race relations. Dr Brash comes out, all guns blazing, and has the audacity to quote Dr Martin Luther King in his speech in opposition to affirmative action. Six months on, where are the solutions? Well, those members do not have any, because their short-term vision was just to create a divisive society, which they would benefit from. They do not have any solutions, and they do not care. I think probably the only thing that they are regretting, in terms of their short-term vision, is that they did not do it a little bit closer to the election.

Regarding our nuclear-free status, in the short term those members hope—despite all evidence to the contrary—that their policy might win them favour with the Americans. When the Hon Bill English was leader of the National Party he went over to the United States, and when he came back he said that what he had found, in terms of a free-trade agreement, was that what matters most was what benefits the Americans—not the foreign policy of small sovereign nations. But, no, those members ignored that. In the short term, they do not care about the impacts on New Zealand. They do not care that New Zealand is a sovereign nation. All they care about is that, hopefully, in the short term, they might get a few kind words thrown their way by the Americans.

What will those members do in terms of welfare? Well, they will just beat up on beneficiaries again. We have seen it before and we will see it again. It is a short-term vision. They hope to starve beneficiaries out of benefits, and that by doing that they might end up with fewer beneficiaries. Those members do not care about the long-term impacts that their policies had in the 1990s, and would have again if they became the Government.

We heard today that, in terms of health, when those members were in Government they ignored a call to train more radiation therapists—and we are paying for it now. We are paying for the short-term vision of the short-term thinkers in the National Party. One might ask why they are short-term thinkers. The answer is quite simple: they do not care about outcomes. There is only one thing National Party members are concerned about, and that is power. It is all they care about.

The debate having concluded, the motion lapsed.

Bills

Wellington City Council (Te Aro Reclamation)Amendment Bill

Third Reading

Hon MARIAN HOBBS (Labour—Wellington Central): I move, That the Wellington City Council (Te Aro Reclamation) Amendment Bill be now read a third time. Since we began moving this bill through this House, it has become somewhat contentious locally—not the bill, but the subject of what might happen to Jack Ilott Green. So there are three points I wish to make in this third reading. I want to reiterate what the bill does, I also want to make a point about what a local member’s responsibility is with local bills, and then I do want to canvass, as a Wellingtonian, the possibilities that might happen to what is known as Jack Ilott Green.

This is a small bill. It has only four clauses, and it deals with a 1,500-square metre piece of reclaimed land known as Jack Ilott Green, on the corner of Harris Street, which is currently being dug up, and Jervois Quay. It was once home to Wellington’s Circa Theatre. The site is the last remaining piece of land covered by the Te Aro Reclamation Act of 1879. That Act required the council to sell or lease the land by public auction after at least 2 months’ notice—not just to sell or even lease it but to do it by public auction—and to use the proceeds to repay borrowings for the reclamation. The council in its own right can sell or lease other landholdings not subject to the Te Aro Reclamation Act, and it can do so without a notified public auction, but it cannot do so with this piece of land under the Act that the bill we are debating today amends. The bill before the House seeks to remove the constraints and allow the council to deal freely with the land in question.

I want to go over that again, because it is really quite important. The commentary on the bill states: “That Act permits the Council to sell or lease the land provided that any sale or letting is by public auction,”. A public auction gives the local council no real control, as members can imagine, over what might happen. The one thing councils like to do is control land in the central business district. The commentary adds that the council must give not less than 2 months’ notice, and notes that the Act “also requires that the proceeds of sale are paid into a sinking fund to be used to repay money borrowed to undertake the reclamation.” I remind members that it is an 1879 Act. All the money borrowed for the purpose of reclamation under the Act has now been paid. The 1879 Act was a tad slow, and therefore actually needs—

Darren Hughes: It was visionary!

Hon MARIAN HOBBS: It was visionary at the time, but it does need amending. The second point I want to make is about the role of the local member. It seems to me that Wellington uses its local member quite a lot to sponsor local bills. But I sponsored the bill because I do not believe that central government legislation, which was passed at a time when central government did not really have a partnership with local government, and legislated for everything—particularly, legislation passed as long ago as 1879—should unnecessarily hamper how local authorities deal with land under their control.

Some submitters were concerned that the bill could remove the council’s obligation to follow the decision-making requirements of the Local Government Act 2002. The House agreed that clause 4 of the bill as introduced was unnecessarily broad in the discretion it gave to the council, and we agreed that the council should deal with the land in accordance with the Local Government Act 2002. That amendment maintained the intent of the bill by removing the specific constraint on the council—that is, the constraint of compulsory auction—while ensuring that any sale be publicly notified and that the community be consulted. That was a constructive change. I welcomed it, and the Wellington City Council advised that it accepted that change.

So now we are in a situation of what might happen. The issue of what we actually do with Jack Ilott Green—whether it be disposed of or kept—has become slightly contentious as the bill has progressed. At the moment, the council is using a special consultative procedure under the Local Government Act 2002—as it was asked to do by the select committee—to ask Wellingtonians whether the council should allow Massey University and Victoria University to locate a music school on the site. The agreement would see the council offer the universities a 99-year lease of the site at a peppercorn rental.

The consultation material considers three options for the site: leave it as green space, as some in the city argue; private development—putting it up for sale in the proper way, as the bill removes the requirement to put the land up for auction—or development with the council as a key stakeholder. Developing the site with the council as a key stakeholder, as in the New Zealand School of Music proposal, is the council’s preferred option. But the consultation material is out there. It includes the publicly available statement of proposal, a summary of information booklet, a month-long submission period, and hearings. Submissions close on 27 August. Hearings will be held on 1 and 2 September, and the council will make a decision on 23 September.

The Wellington City Council’s Chief Operating Officer, Karen Wallace, said that in using the special consultative procedure the council was acknowledging the importance of the site to Wellingtonians. It is the public’s chance to have its say in the development of the city, and, in particular, Civic Square. If the time frame for the proposal is in place quickly enough, it will enable a decision to be made prior to the Partnerships for Excellence application deadline of 1 October, and that is why the council is adopting a special consultative procedure. This bill is not about the special consultative procedure; it is about the basics of how the council may dispose of the land, but the issue around that has really grown.

I want to make some personal comments about what I think about the site. The idea of combining the wonderful jazz that is being promoted at Massey University, and the electronic and orchestral music and the wonderful singing that are taught up at Victoria University, in a New Zealand School of Music next to a sheltered square in which open-air concerts can be held, and near the City Gallery, the town hall, and the Michael Fowler Centre, is really clever.

Darren Hughes: Te Papa is quite close.

Hon MARIAN HOBBS: Te Papa is quite close, but one has to cross the road—and crossing that particular road is highly exciting. I personally think that what the council wants to do with land—although that is not part of the bill—is clever. The Dominion Post reported there had been really heated discussion—but with some humour—on the matter at the council. A good friend of mine, Councillor Sue Piper, said that a survey had shown that the 58 people using the park-like space on one day included 55 passing through, two having a furtive fag—Councillor Sue Piper would say that, as she has been known to do that herself—and a lost child. I do not think it is the pétanque-playing centre of Wellington, as some would claim.

My feeling is that school could be a really great use of the space, but this bill is not about giving an imprimatur to go ahead with the combined School of Music. It is not about that. That will be a decision of the Wellington community. This bill removes unnecessary constraints on the council, and allows it to deal freely with the land in question—rather than it being forced to auction it, whereby it cannot control what may happen—while ensuring community involvement. I commend the third reading of the Wellington City Council (Te Aro Reclamation) Amendment Bill to the House.

JOHN CARTER (National—Northland): I will take just a quick call to say that the National Party supports this bill. The member who has just resumed her seat has set it out very clearly, and the important thing is that all that Parliament is doing is making it possible for the local council and the local community to have an input. That is a very positive thing. This is a local issue that needs to be decided by local people, and we support that.

JIM PETERS (NZ First): New Zealand First supports this bill. Our bewilderment is really about why this bill has taken so long to reach this point. The Wellington City Council ought to have been able to deal with its lands many, many months before now. It raises the issue as to how some people regard local councils and local democracy. I listened to the member for Wellington Central with great interest, but my feelings were that what she said, regardless of her personal feelings, had nothing to do with this bill.

The point I want to make on behalf of New Zealand First is that we believe strongly in local democracy. We believe that local government has its own way of dealing with matters, and that has been defined largely by the Local Government Act 2002. The issues that the member mentioned with regard to how the land is to be used are simply and absolutely the province of the Wellington City Council. One of the reasons I say that is that this bill was unnecessarily held up by some people who fought an action, using this House, to try to achieve their objectives. I am pleased to see they did not, because the avenue of redress where they could take their concerns was the Wellington City Council, which is their council. In the past, under the annual plan, which is now the community plan, they had every ability to advance annually their beliefs as to what should be done with that land. The answer is that they may have but they did not impress the council of the day.

Secondly, this year they have had every opportunity, if they felt that there are issues that were not canvassed in the way that that small minority thought so, to do something about it in the electoral cycle about to take place right now. But this party, New Zealand First, deplores people using this House to try to bring about changes that are properly and absolutely the role of local government. So to that degree we support the bill, we support the constraints that have been removed, and, again, we wonder why they took so long.

We know that the special consultative process under the 2002 Act has now been provided for in that last section, which states that the council has the power to deal with any reclaimed land and that it must be exercised under, and in accordance with, section 12 of the Local Government Act. That being satisfied, the Treaty of Waitangi issues, which also took some time to have an answer back with regard to consultation with Te Puni Kōkiri, the Department of Conservation, the New Zealand Historic Places Trust, and with the Wellington Tenths Trust all being satisfied, we are more than happy to pass this bill on its way quickly, allowing the Wellington City Council to go about its business in the way that the council and staff think is most desirable.

KEITH LOCKE (Green): The Green Party welcomes the passage of this bill, and I wish to present some of the thoughts on this matter from Wellington Green MP Sue Kedgley, who unfortunately cannot be here. She says that this bill has been of concern to us as it would have allowed the Wellington City Council to sell off the precious Jack Ilott Green near Wellington’s wonderful waterfront, without reference to any other legislation in this country. The Local Government and Environment Committee, under the chairpersonship of the Greens co-leader, Jeanette Fitzsimons, made some important changes to this bill, which have meant that the Wellington City Council will now have to consult with the people of Wellington before selling off that important bit of green space.

As the bill was originally drafted, the council would not have needed to consult with the public over the sale of the land, and we found that to be unacceptable. The community has expressed significant concerns about the sale of this land, and has long campaigned for its retention as a park. So it is right that the council should consult on what is done with this park. The council will now have to comply with section 12 of the Local Government Act 2002. We do not believe it is the place of Parliament to say what land councils should retain, but we do have a responsibility to ensure that the council complies with other laws of this country. The bill, as it was originally drafted, gave the council powers that were too broad. We are also pleased to see that the council is already committed to consultation on the use of the land by the special consultative procedure under section 138 of the Local Government Act. That section stipulates that a council must consult before disestablishing a park.

We do, however, remain, concerned about the future of this land. The council seems to have made up its mind to build a music school on the site, irrespective of the outcome of consultation with the public or what the public may want. That mindset of building the school, irrespective of what the public thinks, does not seem to be in accordance with the spirit of the Local Government Act. Section 82(e) of the Act stipulates “that the views presented to the local authority should be received by the local authority with an open mind and should be given by the local authority, in making a decision, due consideration:”. We hope to see the council take that section of the Act into consideration when it makes a decision on this land. There is a dearth of green space in our capital city. It is time that we created more green space for inner city dwellers and for those who come in from the suburbs to enjoy the city. Sue Kedgley believes the future of Jack Ilott Green is a significant issue for Wellingtonians, and she envisages that the possible siting of a music school on that site will be a major issue in this year’s local elections.

I would also like to add some comments of my own, as someone who lives nearby at Oriental Bay and walks through the park reasonably frequently. The Minister, in her initial speech, indicated that not many people use it. When I walk through it, I do often see other people there. I would say that the reason why Jack Ilott Green is not used very much as a park at the present time is that it has not been developed fully as a park. It has a very run-down look about it, as if it were in a sort of holding pattern, and in its present state people would not be encouraged to use it as a park.

But I think Jack Ilott Green does have significant potential. There is much more of a movement in the recreational activities of Wellingtonians towards that end of the city. We have seen the development of Courtenay Place, Te Papa, the developments around the waterfront, and, most recently, the extra sand and other developments at Oriental Bay itself. I imagine that if we have a good summer this year in Wellington, on many days there will be crowds and crowds of people around the area from Courtenay Place through to Oriental Bay. If this land was developed as a nice park with unique recreational characteristics, I imagine that considerable use would be made of it, and that it would provide a bit of a link between Te Papa and Courtenay Place. Fitting in to some degree with what the Minister says—and getting away from the question of whether Jack Ilott Green should become the site of a music school—I think the land would be a good link between Te Papa, Courtenay Place, the other developments on the waterfront, and what is happening at Oriental Bay.

I hope that the Wellington City Council will take account of all the submissions of its citizens, and will develop Jack Ilott Green in the interests of Wellingtonians and of people from around the country who are drawn to Wellington, to go to Te Papa and Oriental Bay. Hopefully, those people will use this park, as well as Wellingtonians.

HEATHER ROY (ACT): It gives me pleasure to rise as a Wellingtonian and a member of ACT New Zealand to support this bill. I endorse the comments made by the New Zealand First member Mr Jim Peters about the length of time it has taken the bill to reach this point. I see that it had its first reading on Wednesday, 14 May 2003, and that the second reading was not held until a year later, on 19 May this year—2004. I think that this House has done the Wellington City Council a great disservice by the length of time it has taken to progress the bill through the House. I would like to say, too, that the Green Party, despite the fact that it seems reluctantly to be supporting this bill, is also responsible for the slow progress it has made. The Greens objected to the final stages of the bill being dealt with at once. One can only assume that that was a political stunt, to make the point that they do not like what the council intends to do with the land in Jack Ilott Green. We have heard from several speakers—and I think the Minister put it very well—of the great benefits that Wellington would have as a result of Victoria University and Massey University joining together to have a school of music. This is, I believe, a very good site for such a proposed school of music, and the school would benefit Wellingtonians greatly, as it would benefit those students from around New Zealand who would wish to come to such a school.

This bill, as the member for Wellington Central pointed out, is only about the role that central government has in relation to local bodies. It outlines very clearly the inappropriateness of holding up the sale or otherwise of the affected land due to the Te Aro Reclamation Act of 1879. That Act is very outdated, and it gives the land a very different legal status from other parcels of land owned by the city council. In this day and age the very prescriptive nature of the legislation that governed Jack Ilott Green is totally inappropriate. It is not right that councils should be required to jump through hoops to do what they wish with land that they govern. I come back again to a comment that the member for Wellington Central made, when she said that central government should not hamper land that is under the control of local bodies. In fact, she was referring to the 1879 legislation when she said that the relationship between central government and local government was not as close then as it is now. However, ACT New Zealand would contend that it is not appropriate for that to happen in this day and age, either. Local bodies must be able to control their own land without being held to ransom by central government. We contend that that point is every bit as relevant now when legislating as it was in those days.

I shall also touch briefly on consultation. The Green Party has made much of consultation, as this bill has progressed through the House. The Wellington City Council has shown great willingness to consult, not only on this matter but on many matters. It is willing to consult, and it consults in a very fair way, giving everybody the opportunity to have their say on matters relating to Wellington. The council is very responsible, and I have been very impressed with it. That aside, the responsibleness the council has shown would be required of it under the provisions of the Local Government Act 2002, which other speakers have talked about, too.

ACT New Zealand is very pleased to support the passage of this bill through the House. The final point I would like to make is one of principle: central government should really stay out of local body matters. That is a lesson not only with regard to this bill but with other legislation. When we are making law we should ensure that property rights are upheld, both for individuals and also bodies like local councils. When they own land they must be free to deal with it as they see fit, within the delegation of their elected representatives. So ACT New Zealand supports this bill, and just regrets that it has taken as long as it has to get this legislation through so that the Wellington City Council is able to do with the land as it sees fit.

GORDON COPELAND (United Future): I thoroughly endorse the comments made to the House just a few minutes ago by Jim Peters. It is our sole job here in Parliament, really, to remove the historical impediments that relate to this piece of land. I hope that we will do that in just a couple of minutes. Beyond that, the good people of Wellington are quite capable of making decisions about what its future should be. I doubt very much whether the pontifications of the Greens and other people who have tried to give a bit of a steer as to what they should do are very relevant. As Keith Locke himself pointed out, a local body election is looming. I think we should simply get on and make this the law. This bill will have the support of the United Future party.

Bill read a third time.

Bills

Goods and Services Tax (Exclusion of Rates) Amendment Bill

First Reading

GORDON COPELAND (United Future): I move, That the Goods and Services Tax (Exclusion of Rates) Amendment Bill be now read a first time. I also give notice that at the appropriate time I will move that the bill be considered by the Finance and Expenditure Committee.

The goods and services tax (GST) should never have been added to local body rates, because it constitutes a tax on a tax. According to the dictionary definition, rates are a tax levied on property by a local authority. On the other hand, GST is a tax that is levied on the supply of goods and services by central government. Since the introduction of GST in 1986 central government has therefore been levying, for its own purposes, a tax on a tax imposed by local government for quite separate and distinct purposes.

My bill to exclude GST from rates was drawn from the ballot on Thursday, 24 June 2004. At the time it was drawn I was in Canberra with the Finance and Expenditure Committee, of which I am deputy chair, meeting with the chair and members of the Standing Committee on Economics, Finance, and Public Administration of the Australian House of Representatives. Part of our discussion centred on rates and taxes in the context of a study, recently undertaken by that committee, that concerned the financing of local authorities. I asked whether GST was levied on rates and received the immediate answer from David Hawker, chair of the committee: “No, because that would constitute a tax on a tax.”

I have since learnt that the position is the same in Canada, so that when each of those nations decided to follow New Zealand’s example in introducing a single-rate, broad-based GST, unlike us they opted to exclude rates in order to avoid a tax on a tax. It is also relevant that VAT is not charged on rates within the European Union. I am very clear that Australia, Canada, and the European Union have got that one right and that we, in introducing GST in 1986, got it wrong. After 18 years, surely it is now time to get it right.

There may be some in this House who would wish to try to justify the unjustifiable, by arguing that rates are not really a tax but rather a payment made by citizens for services rendered to them by the local authority. Well, members should try that argument on the 80,000 members of Grey Power, and in particular on the elderly woman in Takapuna mentioned in the House last year, who currently faces an annual tax bill of more than $6,000. They should try to convince those people that their rate bills are a fair allocation of the goods and services supplied to them by their local councils.

That argument should be tried on the business community in New Zealand, which is very concerned that it is bearing a disproportionate share of rates. Members should speak to the farmer who came all the way up from Wānaka to tell me personally that the rates bill levied on him by the local council had reached the point where the ongoing viability of his operation was jeopardised. The argument should also be put to Genesis Power, a State-owned enterprise whose 2003-04 rates bill has increased fortyfold. Yes, that is right. It is 4,000 percent, based on what it regards as a totally unjust and unreasonable rates assessment.

In all of those cases, the concern being expressed is based on the reality that rates do not reflect the value of goods or services supplied by councils, but are calculated on the value of the properties occupied by ratepayers. In other words, rates are a tax in all but name. In fact, in the United States they are actually called property taxes.

Treasury has estimated that the loss to Government revenue, were this unjustified tax to be removed forthwith, would be $160 million per annum, or just 0.36 of 1 percent of core Crown expenditure. That is a pittance for the Minister of Finance, but it is an average of about $100 per annum in the pocket of every ratepayer in this country. Where there is a will, there is a way.

Dr Michael Cullen voted in the Labour caucus against the introduction of GST on rates, and was right to do so. I regret that he has now had a change of mind, and I challenge him in this debate to spell out how he has come to the conclusion that it is OK for his Government to continue the imposition of GST on rates.

The levying of GST on rates was proposed to the Government in 1985 by the Advisory Panel on the Goods and Services Tax, chaired by Dr Don Brash. I find the panel’s approach to the question of GST on rates interesting in light of what has subsequently happened. Its members began by saying that they were: “considerably perplexed by the logic of applying GST to one form of taxation (rates), but not to others (central government taxation).” However, they decided after lengthy discussion that GST should be applied to rates but not to taxes levied by central government. They do not appear to have specifically considered the possibility of zero-rating GST on rates, in spite of stating that a proposal to levy GST on rates had “already invoked considerable resentment from taxpayers”.

The payment of rates continues to invoke considerable resentment from taxpayers, and that political reality means, contrary to the position envisaged by the panel, that councils in fact have every incentive to apply specific user charges, including GST, to as many of their activities as is practical—thus shrinking the tax collected through rates. Accordingly, councils now routinely charge for parking services, rubbish collections, entry to swimming pools, etc., etc. They have no incentive to subsidise services of those kinds from rates, because any increase in rates is universally unpopular and there are elections every 3 years. I have met no one who has said to me that he or she resents paying GST on user-pays services provided by councils. Those realities will not change if rates are zero rated for GST as is proposed in my bill.

Both as a member of Parliament, and as a chartered accountant, I would like, finally, to comment on three technicalities that have been raised in connection with this debate. Firstly, under the zero rating mechanism proposed in this bill the revenue position of local authorities will remain unchanged. The bill is neutral in that regard. It is not aimed at relieving local authorities; it is aimed at relieving ratepayers.

Secondly, businesses that now claim back GST on rates will likewise be in a neutral position, although they will gain a short-term, cash-flow advantage. Nor will any compliance costs arise, because the GST return already makes provision for zero-rated transactions, including some from territorial authorities. User-pays charges will be billed separately by councils and, of course, will continue to include GST.

Thirdly, the removal of GST from rates does not establish a precedent for GST to be removed from other goods or services—say, foodstuffs. That cannot be so, because we are talking here about a unique tax-on-tax situation. I want to emphasise that point, because even in question time today the same old “annual grey mare” came out: “Oh, yes, but if we were to do this, then we would have to broaden the base to other things as well.” I say “No”. This tax on a tax is a unique situation not only in New Zealand but in the world, and if we remove that tax, it is ridiculous in my opinion to assume that we would therefore have to extend its removal to foodstuffs and other things. There is no logic whatever in that position.

Removal of GST from rates will leave at least $160 million in the pockets of the 1.725 million property owners in New Zealand. It will leave money in the pockets of the 465,000 superannuitants in New Zealand, many of whom are living on a fixed income and struggling to make ends meet. It will leave money in the pockets of the more than 300,000 residential property investors in New Zealand who currently pay GST on rates, and who cannot claim them back.

In truth, levying GST on rates is unfair and unjust. Indeed, after 18 years it is past the time to bring the practice to an end. I commend this bill to the House, and I hope that other parties may see fit to think beyond some of the nitty-gritty technicalities, to look at the big picture, and to decide to give taxation relief in that way to the 1.725 million ratepayers of this country.

PANSY WONG (National): First of all I would like to pick up two points that were raised by Gordon Copeland. Firstly, he told us that when GST was introduced, Dr Michael Cullen actually voted against imposing GST on rates, and then changed his mind. We also know that Gordon Copeland’s party leader, the Hon Peter Dunne, who did support the provision to have GST on rates, is now against it. So that leaves the public and me with the clear understanding that our National Party Leader, Dr Don Brash, is the only clear thinker whose position has not changed since GST was first introduced.

The second point that Gordon Copeland raised concerned the Finance and Expenditure Committee’s visit to Australia. I do not think that that member should be economical with the facts, because an official, and also the Ministers over there, told the delegation openly how much they envy New Zealand’s comprehensive and simple GST system. I hope Gordon Copeland is not trying to get us to copy the Australians, who have a lot of compliance issues relating to their GST system.

Dr Nick Smith, a very effective and hard-working member of Parliament, will illustrate and expand on the confusion of the argument raised by Gordon Copeland with regard to the public’s dissatisfaction with the level of rates. That should not be confused with the issue of whether removing GST is the answer to that. I will focus on the definition of payments for what local government provides, and whether those are taxes or payment for services.

If the existence of local government bodies did not relate to providing services, then I am sure those bodies would not be in existence now. There will always be debates as to the standard of service the public receives—whether the service is cost-effective, and whether local councils carry out effective consultation with ratepayers. But, none the less, councils must provide services. Some of them might do it via private contractors, and others might do it in-house. Ratepayers, of course, can show their dissatisfaction with the job councillors are doing every 3 years through the ballot box.

Every now and then the public will also voice dissatisfaction with the existence, in effect, of some local councils. In 1989 New Zealand went through a massive scale of local government reorganisation, where a lot of smaller councils were merged. That was partly to ensure that local government was more cost-effective, and that it was not costing taxpayers unnecessarily in terms of the level of rates they had to pay.

I will use an example to demonstrate that. If the Wellington City Council decided tomorrow that it would not provide any rubbish collection service, then each household would either have to deliver its rubbish to the dump itself or contract somebody to do it—and GST would be levied on that service. So rates are a mechanism for local councils to recover the services they provide, but whether they do that cost-effectively is quite a different debate. That is the argument that rates are simply collected so that councils can generate a surplus. I am quite sure that every 3 years ratepayers will show that they do not tolerate any local council that simply uses rates as a mechanism to raise itself a surplus instead of to provide its services.

Hon Dr NICK SMITH (National—Nelson): Members on this side of the House totally sympathise with the bill in the respect that rate increases and rate costs for communities have become too high. That is absolutely true. We note, for instance, that in the last 12 months rates have gone up by an average of 10.4 percent across New Zealand, according to Statistics New Zealand—that is four times the increase in the consumer price index. We also note that, since Labour has been in office, rates have increased by 30 percent, and that is as a direct consequence of some of the dopey legislation that Labour has passed, particularly in respect of the new Local Government Act. In the last 12 months—the very first full financial year of that Local Government Act—rates have increased more than in any other year in the preceding 10 years, and responsibility for that can be sheeted right back to this Government, which ignored the quite legitimate concerns that were raised by farmers, homeowners, ratepayers associations, and business at the time it rammed through, in a great rush, that local government legislation of 2002.

I want to challenge United Future. The only reason that Local Government Act was passed was that United Future provided the Government with the numbers. That is the only reason, and for United Future members to come to the House now and cry crocodile tears about the poor old ratepayer, when they passed the exact law that has led to such huge increases in the rates bill—well, there is a word for that, and I will not use it. If we are to get local government costs down we do not need to mess around with the goods and services tax, but we do need a Government that is committed to reducing the compliance costs for local government. The first thing to do in order to start reducing compliance costs would be to have a substantive review of the Local Government Act, the Dog Control Act, the gaming legislation, the prostitution legislation, and amendments to the Building Act etc, which have added so much to the costs that the ratepayers of New Zealand have to pick up.

I confirm and concur with the comments that have been made by Pansy Wong, which are so sensible in this regard. The argument that is left out by United Future in promoting this bill is the idea that if one takes GST off rates, that will save all of the 12 percent to the ratepayer. That is not true.

Mike Ward: It will.

Hon Dr NICK SMITH: No, it will not. Mr Copeland ignores the fact that local government is able to substantially offset the costs of that GST it receives in rates by reclaiming the GST on all the services it purchases—the pipes it buys for our sewerage and water schemes, and the people it contracts with to provide lawnmowing services. All that is part of the equation. The real question is, of course, that local government provides goods and services. Of course the collecting of rubbish is a service. Of course providing a swimming pool is a service. Of course providing sewerage, libraries, and all those things are services. What Pansy Wong expressed so accurately is this: where do the exceptions stop? Today it is rates. Tomorrow it may be doctors’ fees. Next week it may be school fees. The truth is that the most sensible way in which to have GST is to provide it across the board. We in the National Party stand for lower taxes—not for piecemeal legislation but for getting the overall tax and rate burden down for New Zealanders. It is about reducing the tax level and the company tax rate. It is about reducing income tax rates. It is about controlling expenditure in the area of local government that has led to such huge increases in rates.

Again I emphasise that we on this side of the House do not believe it is acceptable to have a 30 percent increase in rates, which is what has occurred since 1999 under this Government. That is the real issue that needs to be tackled. This Government continues to dump extra responsibilities on to local government in areas like gaming, prostitution, building, and dogs, without providing any funding for local government. That is the principal concern that this Parliament needs to focus on, and we need to, at the very beginning, review that Local Government Act, which is at the core of the huge rate increases that ordinary New Zealanders are being confronted with.

Hon Dr MICHAEL CULLEN (Minister of Revenue): Although the Government will be opposing this bill, let me say that I think the member who has just sat down made one significant, technical error. This member’s bill does not provide for rates to be GST exempt but to be zero rated. Therefore, local authorities would be able to continue with the claim back, should the bill be passed, because, as I say, the rates are zero rated, not GST exempt. That also means, therefore, that the fiscal cost to central government is much larger than the member might have thought, and that is quite an important consideration to be taken into account.

I also note the sort of National Party approach to budgeting as usual, which, as I gathered from that speech, is one of cutting all tax rates and increasing Government subsidies to local authorities. We have already had National members calling for more spending on health, education, and almost everything else. Somewhere along the line we might end up with what one might call an emotionally stressed Budget as a consequence of that, with practically nothing in the way of certainty except a blooming great deficit, which is not surprising because National parties in Government tend to specialise in deficits, most of the time. They just revert to type. More and more, this National Party looks like a recreation of Sir Robert Muldoon. One would expect it, therefore, to be coming up with fiscal policy—

Hon Dr Nick Smith: That’s not credible!

Hon Dr MICHAEL CULLEN: Not credible? Playing on race, crime, welfare, and fiscal irresponsibility sounds an awful lot like Sir Robert Muldoon to me.

New Zealand’s GST is applied to the widest possible range of goods and services supplied in New Zealand, because that is the most efficient and fair means of raising revenue by means of a value-added tax. Indeed, New Zealand has the best designed value-added tax in the world. The reason is that we are one of the very few countries that have a single rate, applying that single rate across nearly all goods and services. Australia would love to have our GST structure. It ended up with a political mess as a result of compromises in the Senate. Businesses in Australia loathe the GST model, compared with the New Zealand - type model. They would much prefer to have the New Zealand - type model of GST with its single rate, broad-based system, without exemptions. It is best practice.

In 1985 the Government set up the Advisory Panel on Goods and Services Tax to hear submissions on these matters. It declared that the payment of rates should be viewed as a payment for services provided by local authorities, as members have said, for public goods and services—such as libraries, public amenities, flood control, sewerage, rubbish control, and so on and so forth. That argument has become stronger, not weaker, in the intervening nearly 20 years, because more of rates is now clearly tied to specific service provision and less to a general collection of a tax based according to ability to pay—in theory at least. In other words, it is much less a progressive payment now than it used to be. That is one of the reasons why rates are creating something of a difficulty in practice for many low-income families, particularly elderly, low-income families—a matter I hope the Government will be addressing in next year’s Budget.

So rates, by and large, do represent a payment for local authority services consumed by citizens and ratepayers of the area. But even if this was a tax, I think it is a legitimate question to ask: “So what?”, because we have other taxes in New Zealand that GST is levied on top of. Obviously, excise duties by way of petrol, alcohol, and tobacco are the primary example of that. Nobody has ever seriously suggested that GST should somehow be levied part way through the process in that respect, so it does not seem to me to be a terribly powerful argument. But it is also because of the GST zero-rating proposal that we would end up with local authorities having an undue competitive advantage over other businesses, where there is direct competition. In that situation if the business can reclaim its expenses, then so can the local authority by means of GST input. But the business has to charge the GST on the service it is providing. Indeed, we could end up with a situation of people living next door to each other, where one pays GST on water services and the other does not.

Gordon Copeland: Not true.

Hon Dr MICHAEL CULLEN: It is true, I am afraid, depending on how the service is provided and how it is funded. Even if it was funded through the local authority by means of direct payment, it would end up being GST-able; whereas if it was provided as part of a general rate, then it would not be GST-able. This is not a sensible provision. It is one that should be rejected by the House.

JIM PETERS (NZ First): I am very pleased to see Paul Adams here tonight, because surely he must be responsible for that “road to Damascus” experience of his leader who, in 1986, voted for the present legislation, and now some years later is against it. So I tell Paul Adams that that is good work; it has been a remarkable conversion on the part of Peter Dunne.

New Zealand First believes that this bill should go to a select committee. The reasons for that have already been covered by both the National Party speakers, and by Dr Cullen. The very issues that have been enumerated, particularly with regard to the uncertainty as to what local bodies charge for, are reasonable grounds, in our belief, for further discussion by a select committee.

Secondly, I have already pointed out to Mr Baldock—and I am rather surprised that the local government spokesperson from Tauranga is not presenting the case, but maybe a council up there does not see things his way—that this bill is incomplete, and again for the very reasons that have been advanced by Dr Cullen. There is much more about rates that could be debated. We know that this has been a long-term issue. The Kaipara District Council, under Mayor Peter Brown, throughout the 1990s strongly advocated that this was an improper impost on his council. In the material that has come from Grey Power, which I acknowledge, his comments were there, year after year.

Others councils have felt the same. The Ministers know that Local Government New Zealand has had a very firm stance on the issue, as have some major authorities, and they have challenged Governments in the past about the issue of adding GST to rates—a tax on tax. By the way, it sounds good; it is a slogan, but, as Dr Cullen has said, “It means what?”. Both Governments—the previous one and the current—have taken a very strong line that rates are a charge for goods and services supplied by local authorities. We know that this view was reinforced in the 1996 amendment Act, which introduced a new financial management regime that attempted to link strongly the cost of activities for groups of persons who were receiving a specified service. That was really the start, an indicator as to where the service lay.

The amendment Act also added the actual tools—that is, the extent to which it was efficient and effective to fund any expenditure needed by a funding mechanism, and so on, and there was a further development of thinking about rates.

But throughout that time there was an understanding in the local government arena that rating would be looked at properly. However, the Local Government Act 2002 did not do that. It merely looked at the process. The reason New Zealand First strongly supports the referral of this bill to the select committee is that it is entirely appropriate, notwithstanding the ill-informed nature of Mr Copeland’s bill, that rating be discussed. It was not discussed in 2002 in this House. I have been back over the speeches made then. The legislation was confined to a fine-tuning, a tinkering with the process rather than looking at the real nature of rates as a mechanism for local authorities.

If we are really interested in issues of transport—and we know that many rural authorities spend 60 to 70 percent of their money on roads, and transport and communication alone—then that is another reason why rating needs to be examined, if we are ever going to get the wider framework of our rural roading structure together, rather than just depending upon rates as they are now to provide the main sustenance for that roading network. Those issues need to be fully examined, if or when this bill goes to the select committee.

We know that in the High Court and Court of Appeal cases with regard to the Wellington City Council, which took this issue on at a higher level, the court stated finally, at the end of much legal discussion, that a democratic council decision to rate properties in a particular way was a tax, and in that way further defined the issue. We are also aware that the Inland Revenue Department has changed its thinking slightly on the issue with regard to rate penalty charges in terms of its refusal to allow councils an input tax claim for the GST previously paid on rates that are omitted or postponed. So they do not quite have the clarity and the intensity with regard to rates that existed hitherto. New Zealand First strongly supports this bill going to the select committee. The time is highly appropriate. We should not just discuss GST on rates but the whole nature of weighting as a mechanism in the community, and to that degree we believe that this deserves a further hearing and submissions made by the wider public.

Hon KEN SHIRLEY (ACT): The United Future member Gordon Copeland, who brings this bill to the House today, had the courtesy to write to all parties soliciting support, and I thank him for that. What I would like to do is read to the House, as part of my comments and contribution to the debate, my response to him on behalf of the ACT party. Because we did consider his bill as we should in caucus, and we had the following view: “Dear Gordon, We have received your letter of 1 July and are surprised that you have dredged up this hoary old chestnut, particularly in view of the fact that your party leader, Peter Dunne, is a former Minister of Revenue, and, indeed, voted for the initial legislation including GST on rates. I have no doubt that the advice you have received from economists and tax experts has told you why your proposal is nutty. I know there are elements in Grey Power and other organisations that have long lobbied for the exclusion and zero rating of GST on rates, and possibly you are pitching at that market for political reasons. It is obvious that if local authorities were exempt from GST or zero-rated, they would be tax-preferred relative to private businesses. The ACT party believes that local bodies generally are engaged in far too many activities that should be left to the private sector, and the prevailing situation would only be exacerbated if the council were to be granted an additional 12½ percent competitive advantage on tax. You may argue that GST should apply only to the goods and services of council trading activities, but that only begs the question, should the council be engaged in commercial activities at all.”

“I am staggered that the United Future Party believes that your proposal would help businesses. GST is a tax on final consumption. It is consumers who would derive any benefit, if rates were zero-rated or exempted. So why did he claim that it would benefit businesses?”

“The ACT party does share your concern with the impost that ratepayers face. We see no justification for the annual escalation in rates throughout the country, way above the rate of inflation. Escalating rates is an issue in themselves, but that should best be addressed directly by focusing councils on their core public-good activities and through the elimination of waste and excessive expenditure. Tinkering with GST on rates does not address this basic problem. Hopefully your caucus will re-examine your position on this issue and encourage you to quietly withdraw your bill.”

That is still the best advice I can give to Mr Copeland in this bill. It is a very nutty proposal. I listened to the speech made by the New Zealand First member and they said they will support it to the select committee solely for the purpose of opening up and having a broad debate on rates. But as we know, that is actually beyond the brief of this bill. So that will not be permitted by that committee. So really the New Zealand First position of supporting it to the select committee is being done under a misapprehension and a belief that there could be a general debate on rates, when in fact there will not be, because this bill is specific to the GST component. So I would invite New Zealand First to rethink its position.

I think that every member in this Parliament—indeed, much of the public—has been staggered. We have seen great big billboards at our airports, and great full-page advertisements in the papers with Peter Dunne’s picture. Mr Dunne was the Minister of Revenue in the Bolger Government! We never heard a squeak—not a murmur, not a whisper—about this issue when he was the tax collector. He was the Minister of Revenue! It never even entered his head that this could be an issue. At first I thought that perhaps he was just letting Mr Copeland have his head and was not really supporting it, but when I saw those hoardings with Mr Dunne, backing this nutty proposal, I thought there was something very, very strange here. Full-page advertisements—it is clearly a full-thrust approach from the United Future Party. My other suspicion was that the Government was going to accede to it, and this was a little trophy they were sort of going out campaigning for. But I have heard the Government speaker and the Deputy Prime Minister’s speech, but they do not support this bill—and I am pleased about that—so what is the strategy of United Future? It just does not make any sense. It is a nutty proposal. I hope it does not make it to the select committee.

Hon DAVID CUNLIFFE (Associate Minister of Revenue): I would like to say something nice about Gordon Copeland, although, I am afraid, not to the extent that I can signal support for the bill. Gordon Copeland is a very assiduous member of the Finance and Expenditure Committee, and he is a man who does his homework, and a man who thinks carefully. It is just that unfortunately on this particular issue he is in a situation where he is his party’s champion, for whatever purpose, of a bill that flies in the face of well-accepted tax policy and rationales that were formerly accepted by his own leader. So the Government opposes this bill, and there are four particular reasons why. They are the “floodgates” arguments, the tax policy argument, the competitive-neutrality argument, and the no-free-lunch argument. Let me try to handle the first two quickly, before the tea break.

Hon Ken Shirley: Is there any argument in support?

Hon DAVID CUNLIFFE: There is no argument in support—other than that I feel somewhat uncomfortable being on the same side of an issue as people like Roger Kerr and Ken Shirley. That caused me to pause, but other than that I think the logic is in favour of that member of the Opposition—Mr Shirley—on this occasion.

Let us turn to the “floodgates” argument. The fact is that GST is a broad-based tax, and one thing that we have always taken pride in, in New Zealand, is that it has been a very difficult tax for smart lawyers to dodge. It has been a very difficult tax for people to get around just because they could afford to hire a smart lawyer, and it has had relatively low compliance costs, because it is not some fancy retrofit with lots of exceptions.

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

Hon DAVID CUNLIFFE: Prior to the dinner break, we noted that there were at least four good reasons why the Government should oppose this bill. The first was the “floodgates” argument. Our GST system is built upon the rationale that we should have a clean system with few exceptions. Having an exception for rates would create a race for other exceptions and we think that is in violation of the key principles of GST.

The second argument is the tax policy rationale for GST itself. GST represents payments for local authorities’ services consumed by citizens and ratepayers of the area. Local authorities provide goods and services, many of which are funded wholly or in part by rates. Those goods and services represent consumption by ratepayers, and therefore GST should, as a matter of principle, apply.

The third argument is the competitive neutrality argument. The bill would give local authorities, particularly their strategic business units, an undue competitive advantage over other competing businesses.

Paul Adams: How?

Hon DAVID CUNLIFFE: Some services—to answer the member—for example, car parking facilities and rubbish collection, are also available from the private sector. Those providers would be at a competitive disadvantage.

I do find myself in something of a quandary on this point, because my notes indicate that such luminaries as Mr Roger Kerr, Mr Ken Shirley, Mr John Key, and Mr Simon Carlaw are all in agreement on this point. As the member said: “It does cause me to reconsider briefly but on this occasion I think we are on the side of principle and there is a fortuitous alignment of stars that are normally in another galaxy.”

The fourth argument is the “no free lunch” argument. One hundred and sixty-six million dollars per annum is raised by GST on rates. Unless members of the United Future party are going to come up with some other tax that would replace that revenue, I think we have to admit that there is a real issue of base maintenance of the fisc. Certainly in my area of town, in New Lynn, we worked hard to get a new hospital for Waitakere, the total cost of which was $70 million. I cannot help but look at a number like $160 million and say that that is 2½ Waitakere hospitals a year. That is revenue that this country sorely needs to fund services for ordinary New Zealanders, and it is not ever wasted.

Hon Ken Shirley: Oh!

Hon DAVID CUNLIFFE: That was a bit much for Mr Shirley. I ask Mr Shirley to indulge us here for a moment. I guess I am left with a question. If the logic of the argument is against GST on rates, why is Gordon Copeland, the member known for his studious and rational approach to economic matters, bringing this bill that is pretty much without merit to the floor of the House? I am left thinking perhaps this is an uncharacteristic attempt at populism by the United Future party. I find it difficult to be in the situation of having to draw that kind of conclusion. I am looking forward to the speech from the United Future member to come next, and I see that members opposite in the New Zealand First Party are smiling sweetly because they know that nobody does populism like they do, and even on this bill the best they can do is have a buck each way, support it going to a select committee, and kill it thereafter. I rest my case.

PETER BROWN (Deputy Leader—NZ First): The Hon David Cunliffe is an up-and-coming politician—he has a good career in front of him—but he has clearly proved tonight that he does not understand what people in this country want. As for ACT, I listened to the speeches that have gone before, and I think the letter that Ken Shirley read out was disgraceful. I hope he never sees fit to send another letter like that. It was absolutely disgraceful.

Hon Ken Shirley: The member didn’t understand it.

PETER BROWN: Let me just say to Mr Shirley that there are thousands of people out there who want to talk and have this issue looked at and examined. For that reason alone, New Zealand First will support sending the bill to a select committee. I heard Dr Cullen earlier on. He said that because the GST has a single rate it is simple, it is easily administered, it is very straightforward, and it is easily understood, or some such words as that. But that does not make it fair. Those words do not make it fair. If people think something is unfair, they are entitled to have it aired, viewed, and looked at, and it is our responsibility to do that.

Hon David Cunliffe: Born-again populist!

PETER BROWN: If a significant number of New Zealanders think something is unfair, it is our responsibility to examine it, and Mr Cunliffe should take note of those words.

However, it must be acknowledged that New Zealand First had an attempt to deal with this issue in 1996, when we were in coalition with National. We could not get it very far, but there is reference to it in the coalition document. I looked it up just before I came to the House. We could not get it very far because it is not a simple issue to solve. It is fairly complex. I am led to believe that United Future knows that. I have read the Hansard of Mr Dunne when the bill was passed. I am being selective here, but it is a crucial part: “Members opposite”—he was talking about the National Party in those days—“talked a lot of nonsense about the impact on some people. When they were given the opportunity to present examples in the committee, they were not able to.” I am told that this issue was raised at the select committee at that time, so what was Mr Dunne talking about? Why is he on posters all over the country? One has to conclude that he is trying to play political politics—for want of a better term. It is a political ploy. I hope not.

But I would like to see some conviction from United Future. If this bill fails, will United Future support a similar New Zealand First policy? Some of us in New Zealand First at this point in time are looking at—I have to say I have not got the support of caucus—GST being removed from the petrol tax. That is a tax on a tax. It is the same principle. [Interruption] The member says “No.”, yet earlier on this afternoon Mr Baldock was saying in the House—I think it was Mr Baldock; it might have been Mr Adams—that United Future will support another 5c tax on petrol in April, or whenever it is, next year. [Interruption] Well, whatever his name is. The GST component of the tax on petrol would be 5c or thereabouts—between 4c and 5c. It would not be a saving for the same people; the ratepayers would not be saving, but the motorists would. I say to those members over there that if they want to stand firm on a point of principle, they should be consistent and not play politics with New Zealanders. That is what they are doing if they will not go the way of removing all taxes on taxes.

New Zealand First will support this bill’s referral to the select committee. We know that it will not be easily addressed.

Dr Wayne Mapp: Oh! Where’s your principle?

PETER BROWN: I said that at the onset. We never voted for a tax on rates. We never ever voted for GST on rates. The member will find no record of it. If the member reads the coalition document—he was a new member in this House at the time, as I was—he will see that there is reference to that in there.

Dr Wayne Mapp: We are looking at GST on rates.

PETER BROWN: Yes, we are looking at removing the GST on rates. The member should look it up. There is reference to that concern. We want the bill to go to the select committee because we want the public to voice their concerns on this issue. We will not deny the public an opportunity to make their views known. We know that this issue will not be easily addressed, but we should not be putting things in the too-hard basket. We should not say it is too hard, so we will not hear about it and will not look at it. GST has been in this country since 1985, and it is about time this issue was examined.

PAUL ADAMS (United Future): It is my pleasure to rise on behalf of United Future to support this bill. First of all, I would like to pick up on a number of issues. Firstly, our leader, Mr Dunne, did support GST on rates in the first instance, and that was for the sole reason that the Government of the day said that the GST collected would be returned to the local authorities—and it was, in year 1. In year 2 the Government said it could no longer afford to do that. Therefore, as a good leader, he is entitled to change his mind.

Anybody who seriously understands what the zero rating of rates for GST purposes really means would vote for this bill. Unfortunately, I discovered during questions to the Minister of Local Government, the Hon Chris Carter, earlier this year that even the Minister did not understand what it really means. He kindly offered to have me briefed by the Inland Revenue Department in his office, where I discovered that I understood what the zero rating meant and he did not.

I am absolutely amazed that the ACT party is not supporting this bill. I was at a public meeting earlier this year that was attended by the present leader of ACT, Rodney Hide, and also by Murray McCully. Rodney Hide stood up in front of potential voters and declared that he would move an amendment in the Budget debate to ensure that GST was removed from rates. He challenged me as a United Future MP, knowing that we have a confidence and supply agreement with the Government, to support it. I say to the ACT party members that their saying something to the public because they are politicking, then coming to the House and doing exactly the opposite, is the exact type of politics that this country has had enough of. If Mr Hide is listening to his radio now, I tell him that I estimate he has about 15 minutes to come and vote for this bill and show some integrity; otherwise, I will really enjoy debating every issue with the ACT party during the forthcoming election, because it will have shown that it has absolutely no integrity in its processes, as far as I am concerned.

GST on rates is a tax on a tax, because rates are funds collected for a local authority. Local authorities also borrow money for their works, and they do not pay GST on that. What do they use rates for? They use them for paying salaries and for paying wages—things that are not subject to GST. Many members in this House have, clearly, not understood that the councils may need to double invoice. Local authorities need to invoice the ratepayer for the proportion of their rates that goes directly on rates. If they are supplying goods and services, such as parking and rubbish collection, they are well entitled to charge for them, and to charge GST on them, because GST is a tax paid by the end-user. So if the ratepayers are paying GST, are they the end-users? If that is the case, why do they pay it to the councils? If the councils are the end-users of a service, I ask members to tell me what that service is. GST on rates is nothing other than a tax on a tax.

This issue, my friends, will not go away. Most New Zealanders understand that when they are paying GST on rates they are paying a tax on a tax. Most New Zealanders understand that when businesses claim back the GST on their rates, those businesses are not paying GST on rates. Those in Grey Power—the pensioners we have heard about; those on fixed incomes—understand that they are paying a tax on a tax. United Future has campaigned hard on this issue, because we believe that the people out there—the citizens of New Zealand—want a fair deal. They understand that United Future has heard their cry, and we are endeavouring to do our very best to remove GST on rates. Even the Government does not view rates as a user-pays activity; it views them as a tax on the ratepayers to fund local authorities. Therefore, rates should be exempt from GST. Local authorities provide facilities for all the people who live in their area, and for all the people who use the facilities in that area—whether tourists or persons passing through from another area. It is not just the ratepayers who are the end-users of the facilities provided by the councils.

I support this bill with everything I have got, and members should be assured that all parties will have to deal with this issue at the next election. I will watch which parties vote against this bill, and so will the ratepayers of New Zealand.

JEANETTE FITZSIMONS (Co-Leader—Green): This issue has rankled with the public for many years, and many people perceive GST on rates to be unfair. It was hotly debated at the time that GST was introduced, and it has been debated ever since. There is also a lot of debate and, I have to say, public misunderstanding about what rates actually are.

We have serious reservations about this bill as it stands, and we have no commitment to what happens after the select committee process. But we think it is time the public had those concerns addressed and that there was a forum where this could be properly debated, where people could bring submissions, and where a committee could report back with good reasons for either accepting or rejecting it. For that reason the Greens will support sending this bill to a select committee so that the debate can be had.

There is a lot of misunderstanding about what rates actually are, and that is partly because, over the years, they have acquired a number of very different components. It is just possible that the select committee might decide that those components ought to be treated in different ways. Uniform annual charges, for example—where every property is levied a fixed amount to cover particular services—are clearly a fee for service, as are targeted rates. Those components of rates ought to attract GST because they are a commercial service and are directly in competition with other commercial services.

However, rates on land value, which are not related to the nature of the service received, are in fact a tax. They are actually the only form of property or asset tax that exists in New Zealand, unlike most developed countries, which have a range of asset-related taxes; whether they be capital gains taxes, asset taxes, wealth taxes, or death duties. New Zealand has none of those but it does have one remaining asset tax, which are rates on the land value or the capital value of property. As such, that is clearly a tax, and that is the component of rates that perhaps should be investigated to see whether it is appropriate to levy a further tax on top of that. We have no fixed opinion on that at present, but we would be interested to see what a select committee would do with it.

It is also not clear to me why GST on rates is any different from GST on other forms of tax, such as excise tariffs. Again, that is an issue the select committee could sort out. Having said that, we will vote for the bill at this stage, and we wait with keen interest to see what happens after that.

GORDON COPELAND (United Future): I am very pleased to have the right of reply, and I will address, very quickly if I can, some of the issues that have been raised by parties speaking to this bill. First of all, I sincerely thank New Zealand First and the Greens for at least having the wisdom to say that this matter should go to a select committee. As Jeanette Fitzsimons has just said, this issue has been controversial for 18 years and it is about time we gave members of the public of this country the opportunity to discuss it in a rational way.

I am very, very disappointed to see the politicking that has gone on in the House tonight. I will begin with the ACT party. The ACT party has a reputation for wanting to lower taxes on New Zealanders. It had an opportunity tonight to do exactly that, and it ducked it and said it was nutty. I rest my case and I look forward to the 2005 election. I will look for a moment at the position of the National Party. The National Party’s position is that Don Brash was in favour of GST on rates in 1985, and he is still in favour of GST on rates in 2004. In other words, he was wrong then and is wrong now, and that makes it right. It reminds me of the grandmother who, when watching thousands of people marching past, said very proudly: “My grandson is the only one in step.” There is no other nation in the world that has this form of taxation on a property tax levied by a local government—a point I have already made.

Let me move to Dr Michael Cullen’s comments. But first I will address two technical issues that are really completely wrong in terms of what has been said in the House tonight. As my colleague Paul Adams pointed out, and as Don Brash himself said in a speech the other day, we should be encouraging councils in New Zealand to go in for user charges. If councils use user charges, they will still put GST on the parking tickets, the swimming pool costs, and the library costs, etc—and I do not know anybody in New Zealand who is complaining about that. No one is. People are complaining about the fact that there is GST on the tax—that is all. As my colleague said, there is no compliance-cost issue. Councils should simply bill the thing separately, and there will be no problem. That is just a straw man that is put up and can be demolished. Secondly, Dr Cullen and others said that GST as a tax on a tax also applies in respect of excise duty. So is the argument: two wrongs make a right? I do not think so. Secondly, it can be distinguished from this point of view: GST is collected by Government from excise duty on petrol, liquor, and tobacco. However, the process is completely different.

When the Government, for example, decides to put 5c a litre on to petrol prices—which it is doing shortly—Treasury and the Inland Revenue Department tell the Government that it will actually collect 5.625c when it does that—5c in excise duty and 0.625c in GST. The Government receives that advice from Treasury when it makes that decision, because both lots of money are going to the same pocket. The point with GST on rates is that these two streams of tax are going into quite different pockets, and that is the distinction we need to make between the two. So it is ridiculous to assume that because GST on rates is removed, it means we also have to take GST off taxes levied by central government. The whole point I made in my first speech was that nowhere else in the world—Dr Michael Cullen has not been able to give me one example—does a central government impose a tax on a tax levied by a subsidiary government—be it a local authority, a state in Australia, a state in the United States, or a province in Canada. It just does not happen. We are out of step with the rest of the world.

I believe that we have presented our case logically. I know that the 1.725 million ratepayers of this country want this unjust tax removed. It is unjust, it is unfair, it is unprincipled, and it is wrong. We should take it off. In so far as the Labour Party, the National Party, and the ACT party are concerned today, in terms of their attitude, I say: go ahead and make our day, because come next year’s election we will make sure—as is already being done through our billboard campaign—that every single ratepayer in this country understands that other parties, for various reasons, do not want to let that money go. Most of those parties have the attitude: “Well, we don’t want to let the money go. We’ve got the money in our pockets, so let’s keep it in our pockets.”, or other spurious arguments. So people should note carefully tonight how those parties vote on this bill.

A party vote was called for on the question, That the Goods and Services Tax (Exclusion of Rates) Amendment Bill be now read a first time.

Ayes 31

New Zealand First 13; Green Party 9; United Future 8; Māori Party 1.

Noes 89

New Zealand Labour 51; New Zealand National 27; ACT New Zealand 8; Progressive 2; Independent: Awatere Huata.

Motion not agreed to.

Bills

Overseas Investment (Queen’s Chain Extension)Amendment Bill

First Reading

Hon Dr NICK SMITH (National—Nelson): I move, That the Overseas Investment (Queen’s Chain Extension) Amendment Bill be now read a first time. This bill tackles the difficult issue of public access to our coast, rivers, and lakes, in the context of increased foreign ownership of land in New Zealand. The bill enables the area of land immediately adjacent to a river, a lake, or the sea to become an esplanade reserve, and therefore guarantees public access to those public resources when a property is sold to an overseas person. This bill reinforces a unique part of New Zealand’s heritage and culture—the right of all citizens to have access to our magnificent coast and beaches, our stunning lakes, and our bountiful rivers. This bill is about ensuring that these resources are public assets for the enjoyment of all New Zealanders, and that they are not to be monopolised by a privileged few.

The history of our land laws is unique, and it is worth reciting that background and the foundation of this bill. In 1840, Queen Victoria’s instructions to Governor Hobson included a quite specific direction to set aside reserves along the coast and navigable streams, for the recreation and enjoyment of inhabitants and as sites for quays and landing places. The direction was not popular, and it was greatly resisted by settlers and land speculators in the 1840s. An attempt to overturn the ordinance was made in 1842 with a new ordinance that excluded the need for such reserves, but Queen Victoria declined to give her assent, so the foundation of a unique part of our land law was established.

The principle on which those land laws were based was that rivers, lakes, and the sea were public assets, and that for the public to use them practically they needed to have access. The principle is as valid today as it was then. District surveyors were under enormous local pressure to resist the requirement, and the application of what became known as the Queen’s Chain was quite inconsistent. The practice varied from one province to another, and today we find that 70 percent of the margins of our coast, rivers, and lakes have the so-called Queen’s Chain, and about 30 percent, or 6,000 kilometres, do not.

In 1892, Minister of Lands Sir John McKenzie gave full legal effect to the Queen's Chain, and subsequent Governments through strips, esplanade reserves, and road reserves, and even other general public reserves have reinforced that tradition. The Resource Management Act requires that when land is subdivided, an esplanade reserve or strip be relinquished if it does not already exist, so gradually further areas are being added—but, I think if we are honest, it is at a pretty glacial pace.

This bill needs to be considered in the context of New Zealand today. Our population has grown and has topped 4 million, and our tourism industry brings another 2 million visitors to our country annually. More people add to the pressure on our natural resources and inevitably that puts pressures, particularly commercial pressures, on concepts like the Queen's Chain. The New Zealand Fish and Game Council has become quite concerned about a number of exclusive lodges offering exclusive use of particular rivers. The problem is that the lodge owners do not own the rivers, nor do they own the fish, but by controlling access they are able to derive an income from something that is not theirs.

One of the impacts of globalisation is that people are able to own property all over the world. That is not something I am inherently opposed to; it is a fact of life. Just as many New Zealanders own holiday homes on the Gold Coast, many citizens of other countries have chosen to purchase properties in New Zealand for both holidays and investment. This bill is about responding to those pressures. It is about ensuring that although foreign persons can come here, and can own property, they have to respect our unique way of life. Many of these people come from Europe or America, where private beaches, rivers, and lakes are the norm, and we need to make it plain that it is our law we want to have followed, and not their tradition. Quite simply, this bill is about saying: when in Rome, do as the Romans do.

As Nelson’s MP, I have had several personal experiences that have reinforced my desire for this law change. The first was at Pepin Island, which was purchased in 1996 by a Mrs Hallman, a very wealthy German and owner of steel mills.

The island has no Queen's Chain around its perimeter, despite it being a very popular area for public recreation and being only a few kilometres north of Nelson. At the time, I discussed the issue with the then Minister Bill Birch, and expressed concern about the lack of the Queen's Chain. I was advised there was no legislative mechanism for providing it. Interestingly though, by putting a condition on the consent that a particular development was to occur that would require resource consent, I was satisfied that, providing the Overseas Investment Commission’s approval process involved a requirement for that subdivision to go ahead, the Queen's Chain would indeed be taken and public access would be secured. As it turned out, that did not occur, and the lack of enforcement by the commission meant, effectively, that that word was broken.

A more recent example is Waitai Station on D’Urville Island, which has been subject to considerable controversy and public media coverage after it was purchased by the Powell family, a very wealthy American family. This property has no Queen's Chain, and a riparian right down to the high-tide mark.

The Powells have erected signs on the beach prohibiting any person from setting foot on that area. These signs are an affront to New Zealanders’ way of life, and will become more common if this bill is not advanced.

Some puritans will argue that whether or not the land is foreign owned makes no difference. The fact is if the title includes a riparian right, the holder has rights under the Trespass Act to exclude people. But I think that is too simplistic. New Zealanders, and particularly New Zealand farmers, have long taken a very cooperative approach to public access. Providing their farming operations are not disturbed, farmers have taken a very New Zealand view of public access to our lakes, rivers, and seas. Foreign owners come from a very different culture. Private beaches, rivers, and lakes are the norm overseas, so they see nothing wrong with excluding people. The key issue here is that it is a privilege, not a right, to be able to sell one’s land to a foreigner. That principle is already reflected in the law, in that one requires the approval of the Overseas Investment Commission for such a purchase to go ahead. This bill simply extends that principle, and provides public access by way of a Queen’s Chain being set aside.

I want to summarise briefly the key mechanisms that are provided for in this bill. The bill does not extend those land sales that already need to go to the Overseas Investment Commission. They include coastal properties, properties over 10 hectares, or properties adjacent to lakes of over 0.4 hectares. It simply requires that if the property includes riparian rights, then the commission would notify the local territorial authority, which shall within 20 days consider whether a new esplanade reserve or strip should be created, having regard to the potential recreational use, the benefits, the public access, the impact on water quality, and the cost of compensation.

The process for setting aside the reserve is set down as identical to the process for subdivision in the Resource Management Act, but no fee for subdivision may be charged. This is because the esplanade reserve is required for public purpose. The Crown Law Office has said that this bill is consistent with the New Zealand Bill of Rights Act and has provided the appropriate certification. I also indicate to the House my intention to move that the bill be referred to the Local Government and Environment Committee. I note that after this bill was drawn in the ballot, the Government announced changes that would see responsibilities transferred from the Overseas Investment Commission to Land Information New Zealand. I do not have a strong view about which is the more appropriate agency, but the bill would still be relevant. It is a very sensible and practical bill. It carefully balances the rights of landowners wishing to sell to foreign people, with the wider public good of extending the Queen’s Chain and protecting the New Zealand ethos of rivers, lakes, and the coast being public property. I urge members to support the bill, so our children and grandchildren may inherit and enjoy all the benefits of access that are part of this wonderful country of New Zealand.

Hon Dr MICHAEL CULLEN (Deputy Prime Minister): The Government will be supporting the referral of the bill to a select committee, but after listening to that speech I am not quite sure what Federated Farmers, the Business Roundtable, and various others would have made of it, in terms of its fairly sustained assault on some aspects of property rights. I have a suspicion that once the submissions come in, there may be something of a change of heart within the National Party on the nature of this bill. Indeed, I wonder how much, for example, Dr Brash supports this particular legislation coming into the House, because it denies almost everything he has ever written or said on these kinds of subjects. So I assume it is a kind of Lone Ranger effort, even though the collective vote will be cast in its favour when we come to the voting. But I suspect also that as the submission process proceeds, the member might find himself a bit like the Lone Ranger in terms of Tonto’s famous remark: “What do you mean ‘we’, white man?”.

I have to say also that the bill is peculiarly badly drafted in all kinds of respects. First of all, it refers to something called the Queen’s Chain. It is useful to have common language for common usage, but unfortunately, legally, there is no such thing as the Queen’s Chain.

Hon Dr Nick Smith: John Blincoe had his bill in the name of the Queen’s Chain.

Hon Dr MICHAEL CULLEN: Yes, well, Mr Blincoe has lots of other things that I have often disagreed with, but that does not matter.

Hon Dr Nick Smith: Did you vote for him?

Hon Dr MICHAEL CULLEN: No, I have never voted for him. I have voted for me, but I have never voted for Mr Blincoe. So all I can say in that respect is that there is a huge amount of technical tidying-up required in this bill to make it even remotely effective.

There is a reference to something called the Reserves Fund, and we have tried as hard as we can but we cannot find anything called the Reserves Fund that looks like this. There are a number of things that might be a reserves fund, but none of them certainly have the kind of money in them that would be capable of performing the job allocated within this particular bill. There is a fair old kind of Budget bid being made within this particular bill, without thinking it through too much.

It is not clear whether the existing landowner or the purchaser receives compensation for a strip or reserve that is created, because the fact the strip is to be created will affect the value of the land on transfer. Should there therefore be compensation for the person selling the land? I suspect Federated Farmers will have particularly strong views around that particular issue. That is why, for example, the Government’s announcement in terms of foreshore and seabed land in private hands was that when it was being offered for sale to a foreign owner, the Crown would have right of first refusal in terms of purchasing. That mechanism does not affect the value of the land, from the perspective of the seller of the land, and I do believe there are property rights there that legitimately should be taken into account.

The bill does not really address the interaction with existing access along the foreshore or the implications of the Foreshore and Seabed Bill. It might create lots of little bits and pieces, but one probably cannot get to them if they are not connected up, one with the other. I would also point out that setting aside an esplanade strip or reserve is often required for reasons other than access. Often access is not the primary reason. For example, there are reasons that may involve the restriction of public access in terms of land with particular conservation value, or where riparian planting is required to improve water quality—alongside rivers, for example. Not always does one want lots of extra access in every case.

On the general access issue, I do note that despite the claim of the member, general access in New Zealand is not larger than in a number of overseas jurisdictions. Some in fact have stronger general access provisions than New Zealand does, and Federated Farmers have not been exactly warm towards the idea of providing for general access provisions. So again, it seems to me the member is out of tune with one of his more important support bases within the National Party.

In terms of the Overseas Investment Commission, there seems to be a certain level of contradiction within the bill. While at one point the bill seems to imply the commission can require a local authority to acquire or set aside such a strip, as stated in the explanatory note, in another part of the bill there seems to be a provision that a local authority may or may not use—not one that it is ordered by the commission to use. While I certainly support the notion that in the sale of land to foreign buyers it is appropriate for the commission to take account of access issues, and that is part of the Government policy statement that was made, I have some degree of queasiness around the idea that the commission, or its replacement regulator within Land Information New Zealand, has the capacity to order a local authority to purchase and set aside an esplanade reserve or a similar kind of reserve for the future.

So I think it is useful for the issues to be explored by the select committee, as there are important issues underlying this bill. I do note, as I said before, the irony that in practice, sale of land to an overseas purchaser enables better provision for access, protection, and various other things than sale of land to a New Zealand buyer. As a first-generation New Zealander who does not claim to be indigenous in any shape or form, as if one was not born here it would be really impossible to claim that one is indigenous, I have to point out very gently the irony of Pākehā farmers—if I can use the term without offending Dr Brash—getting very upset about foreign farmers buying land to come here and farm. I am not quite sure how they thought they got here in the first place, because their ancestors certainly came here. But, of course, some of them did not actually buy the land; it was confiscated for them before they acquired it. So they got it on the cheap in that respect, and it has been passed on from generation to generation, from that particular point on. But I will not explore further my latte urban view of those kinds of issues.

The member does raise some important points, and they are worth thinking through. The bill as it stands will probably go down in a hail of bullets in terms of the submissions made on it, both from a technical perspective and on some of the issues of principle that are contained within it. The Government’s announcement more adequately and comprehensively, and more fairly to landowners, deals with the issues that have been raised. Again, there are some further matters to be thought through there, and I look forward to some further discussion on this bill.

DAIL JONES (NZ First): New Zealand First will oppose this socialist-type legislation. Mike Moore brought a similar bill to the House in the 1972-75 Labour Government to nationalise the coastline and rivers, and that left-leaning National Party opposed it, both when in Opposition and in Government. But here we have a modern National Party supporting something that Sir Robert Muldoon opposed. It is a worry. An even bigger worry is that the National Party and the Labour Party seem to be agreeing on the issue. We in New Zealand First are very concerned that the National Party and the Labour Party should be working together on this proposal.

The first point I make, as a matter of interest, is that there is no such thing as a “Queen’s Chain” around the coastline of New Zealand. The only Queen’s chain that might apply to New Zealand is the chain that Elizabeth pulls at Buckingham Palace. Otherwise, there is no Queen’s chain.

Hon Dr Michael Cullen: A royal flush!

DAIL JONES: I expect that the member who is moving the bill should be very flushed.

Foreign buyers will support this bill with great excitement and delight. It provides that a foreign buyer of part of the New Zealand coastline will be able to receive a contribution—from the local authority’s reserves fund, I presume—to assist that buyer to purchase the relevant piece of land. That is how I read it. What type of policy is that for a National Party to dream up and support? No thought has been given to this legislation.

If this bill were the law of the land, then foreign buyers of coastline land would seek out territorial local authorities that would require esplanade reserves or strips of 20 metres or so to be created on the coastline, because the bill states in section 9A(7), inserted by clause 3: “Compensation must be paid from the Reserves Fund to the landowner”—the foreign buyer—“where an esplanade reserve or strip is required, at the level of compensation as set out in section 62 of the Public Works Act 1981.” That is what the bill states.

The piece of land fronting the water, the esplanade reserve, would clearly be the most valuable part of the land being purchased. If the long, narrow strip of land along the water were, say, 1 kilometre long by 400 metres wide, then the foreign buyer would receive a credit for the value of a strip that was 1 kilometre long by 20 metres wide of the most expensive portion of the land—namely, that fronting the high water mark. It is conceivable that the foreign buyer would receive a refund from the ratepayer of anything from 15 percent to 50 percent of the value of the land. On a value of, say, $2 million, that would amount to a refund to the foreign buyer of anywhere between $300,000 and $1 million.

In addition, the foreign buyer would have the advantage of an esplanade reserve fronting the land he or she had just acquired, which could not be accessed over any part of that land, because this bill does not provide for an access strip. If there was no access before it was bought, there would not be any access after it was bought, either. Section 237B of the Resource Management Act, “Access strips”, would not apply. In other words, the public would not be able to get to the esplanade reserve over the foreign buyer’s land, and possibly not get to it at all, if the only access to the beach or the esplanade were over that land.

What does this bill do, then, for a New Zealand buyer? How can a New Zealand buyer ever buy that land, given that he or she will be bidding against a foreign buyer who will get a discount? What sort of business is that from the National Party?

What is happening with the National Party? It is proposing a rort. That would be the biggest rort ever exercised on the New Zealand ratepayer, and the National Party wishes to give effect to it. Is that what is meant by the National Party leader, Don Brash, when he refers to “guided capitalism”—guided into the hands of the foreign buyer but certainly not into the pocket of any New Zealand owner?

That policy would favour a foreign buyer over a New Zealand buyer. A New Zealand buyer would have to pay more to buy a coastline property than a foreigner, because a foreign buyer would get a refund. For God’s sake—I beg your pardon, Mr Speaker—can the member not read the bill! That is what he is proposing—that the foreign buyer must get a refund. [Interruption] Exactly! It is sale by discount, in the style of a car dealer. The National Party is offering the foreign buyer a discount; I quoted the clause to the House.

This bill would encourage foreign buyers to come to New Zealand to buy New Zealand land, knowing that they would get a refund from the ratepayer, thanks to the National Party. We have to oppose this nonsensical type of legislation.

PAUL ADAMS (United Future): I rise on behalf of United Future, which will also support this bill going to the select committee. I believe that the principle Nick Smith deals with in this bill of his is worthy of going through the select committee process.

I have heard tonight that the Queen’s Chain is not in actual fact the Queen’s Chain, but let us be realistic—most New Zealanders appreciate what is known as the Queen’s Chain. The process of taking some land for the Queen’s Chain when land that has riparian rights is subdivided, has been a fair one in many cases. I even know that many 10-acre blocks in my home area of Long Bay currently have riparian rights, yet many members of the Auckland Regional Council and the community look forward to the day when those blocks are cut up, so that a walkway can go right around that beautiful piece of coastline. But, of course, that will not be able to happen until that land is subdivided.

I agree that there are issues of personal property rights in the bill that need to be seriously looked at by the select committee. We do not have enough legislation currently in New Zealand to deal with personal property rights, and I believe that even our local authorities, when they get involved in subdivisions and that type of thing, have far too much power over land owned by private individuals. Local authorities can make people covenant pieces of their land and prohibit people from building on parts of it, so I like the provision in Nick Smith’s legislation that any land that is taken must be paid for. I do not have a problem with that.

I know that when a reserve contribution was assessed on a piece of land I had, its value was ascertained by the Government valuation of the total piece of land, divided by the square metreage of the area of the whole block, and then multiplied by the square metreage of the area of the block being taken. Therefore, the argument that the piece of land fronting the coastline is necessarily of a higher value does not stand, although I appreciate the point that has been made by other members. I believe that that matter could be easily dealt with in the select committee process.

Most New Zealanders would be supportive of this type of legislation, because I appreciate, as the Hon Michael Cullen says, that many New Zealanders have purchased land within New Zealand. With the changes that are currently happening in the country, a lot of people who come to buy land here are caught up by our beautiful scenery and the magnificence of our coastlines and waterways, yet they possibly do not have an understanding of the New Zealand culture. As people come here, we need to do more to explain to them what that culture is.

To me, the fact that people may not have access to a particular river or piece of coastline through the property involved is secondary, because many New Zealanders—for example, on the island that we have just heard about—like to be able just to pull their boats up, have a picnic on the beach, and then go back out to their fishing. So they do not need access across the land, but they do need access to the land from the waterway.

United Future agrees that there are various aspects that need to be closely looked at in the select committee process, but we are supporting the legislation going to the committee.

Hon KEN SHIRLEY (ACT): The ACT party will not support this legislation. Indeed, we are somewhat shocked—but, I regret to say, not surprised—that the National Party has brought this bill to the House.

Some people have been telling us recently, with Dr Brash’s election as leader of the National Party, that ACT’s job is done. Clearly, with legislation like this, it is not done. This is a gross reversion to socialism, and I am surprised the National Party caucus allowed this bill to slip through and get caucus approval.

There are some redeeming features, and certainly I recognise the redeeming feature of compensation, because what we are talking about here are public takings. Unfortunately, the provisions in the Resource Management Act for marginal strips and esplanade reserves have no compensation. Anyone who wants to subdivide—and sometimes one has to subdivide; one is forced into it—loses his or her 20-metre marginal strip on a freshwater lake or river, or 20-metres above mean high-water spring esplanade reserve on coastal areas, without compensation.

If the public says that there is a public good for the benefit of everyone, and it is taking private property, then the basic principle is that property should be compensated for at market rates. One of the most despicable aspects of the Resource Management Act is that it is a tool for creeping socialisation of private property by using the rule book. That is wrong in principle, and I regret to say that what I see in this bill—brought to the House by the National Party—is the same concept, with the redeeming feature that it does have compensation. But nevertheless, it is still a taking.

I listened to Dail Jones, who made a very good point. Often there is no need for the taking. There are vast areas of the coastline where the local owner adjacent to the coast or waterway is actually a good steward. The traditional Kiwi culture, through grace and favour, means that access is often allowed—but not always—and it is a concern when some foreigners, who do not appreciate our culture and the grace and favour traditions, want to lock up prime spots, but the point is that taking an esplanade reserve does not guarantee access at all. Often we will find it could be several miles across private property to physically access that spot.

So in effect all one is doing is giving an incentive, and a comparative advantage, to a foreign buyer over a competing New Zealand purchaser, because one effectively gets this public agency out of the reserve fund—and there are a few question marks about where that fund exists; whether it is in local government or some part of central government—paying for what will inevitably and increasingly be the prime value sliver of that property. The point is made that in some instances that could carry a value of up to 50 percent of the total value. So the public of New Zealand would effectively be giving a 50 percent discount, out of the public purse, for a foreign buyer to come and buy this so-called prime asset. Therefore, that would be likely to encourage and favour foreign purchasers over New Zealand purchasers, which is the antithesis of the intent and object of the bill that the Hon Nick Smith has brought to the House this evening. So we in the ACT party are certainly opposed to this bill. We do not believe it has been thought through at all.

I did notice Dr Cullen’s explanation, and he started his speech by saying that the Queen’s Chain does not exist. He is absolutely right. It is one of those myths and mantras that are so dominant in New Zealand. Everyone believes it exists, but it does not; we have esplanade reserves and marginal strips. Let us think back to the 1999 election campaign when Labour actually campaigned on the marginal strip. I tried to explain in speech after speech, up and down the country, that it was a myth and did not exist, but Labour candidates—and I think Darren Hughes in Horowhenua might have been one—said: “Oh no, we support the Queen’s Chain. We are in favour of the Queen’s Chain.” The Deputy Prime Minister has finally admitted that what the Labour Party campaigned on in 1999 was a fictitious lie.

SHANE ARDERN (National—Taranaki-King Country): That was an interesting contribution from the ACT member, and we take stock of a lot of what he said. But the reason that I am willing to support the bill to select committee tonight is simply that for months and months now, since before Christmas last year, we have heard from the Labour Party how it was going to have a working committee that would come back to this Parliament with a report on land access in general across private property. We were promised that that would happen in February of this year.

Members opposite look like stunned mullets. If they are wondering what I am talking about, it is the Acland committee that was set up under their Minister, Jim Sutton. We were then promised that the report would come back in March. Now we have been promised that it will be some time in August. We are into August now but there is still no sign of it. I note with some interest that the Government is supporting the bill to a select committee, even though Government members are sitting over there with strange looks on their faces. If nothing else, sending this bill to a select committee will pull out submitters and it will force the Government to make a decision on where it is going with this whole process.

As a farmer myself, I have looked at the bill and I see nothing in it that would threaten most farmers. In fact, the point made by the Hon Nick Smith about farmers giving access to the public as a part of our culture in New Zealand is absolutely so. In my own farm at home in Taranaki I have 12 hectares of river bank running right through the centre of the farm. I have had many requests for access, from trout fishermen and the like, and I have never, ever turned one down. They have always, always obeyed the rules as far as I was concerned, but there has always been some concern about what would happen if I were to say to one of them, for whatever reason: “No, you cannot come across my farm at this time of the year or at any other time of the year.’’, because they were not obeying the rules or playing by what would be seen to be a fair right of access.

That is a fear that most rural people—most farmers and landowners—have. So it is high time that the Government came out of the closet, as it were, with this approach and told us exactly what it is intending to do with its land access working-party. I think, if nothing else, this bill is a good vehicle for that process to take place. It is also a very good idea in the sense that there is a major concern, particularly in the area where my colleague the Hon Nick Smith comes from, where major investment has been made in one of New Zealand’s most pristine areas. Around the sounds and the Nelson area people have been denied access because of a difference of culture or a difference of approach by foreign investors or people who have come in here and denied access. I have not heard anyone who has contributed to this debate tonight tell us what will be done about that or how the Government would get around that problem.

This bill looks like a sensible approach. As the Hon Ken Shirley said, it does not put any further restriction on people over and above what happens under the Resource Management Act when a subdivision takes place. If I were to subdivide my farm at home I would end up with 20 metres on both sides of a 12-hectare river flat being taken off me, supposedly for the public good, with no compensation whatsoever. In fact, I have experienced that situation in relation to a property that I have bought. Not only is that land taken, but one is required to fence it and to keep the weeds under control. Now if members go to a river bank somewhere and notice that it is clean and grazed to within a sensible distance from the river, where there will probably be a riparian margin planted, and step out 20 metres, they will find out how big a piece of land it is that would be there for weeds to grow, for no good whatsoever, and there would be no access to it whatsoever because it is landlocked. Members should go and do that. They should try it in practice, then come back to this Parliament and tell me how it was that that nonsensical piece of academic work was allowed to pass through this place.

At the end of the day, that is about as mad as it gets, and this legislation does not provide for that to happen. I cannot understand the concerns that have been raised by members such as Dail Jones or Ken Shirley, because we are asking only that the bill go to a select committee, where it can be properly discussed.

JEANETTE FITZSIMONS (Co-Leader—Green): It is helpful that Nick Smith has brought this issue to the House, because it certainly needs addressing. Whether the bill is the best way to address it is a matter that can be dealt with at a select committee, and I hope that will happen.

As New Zealand’s population grows and town settlements spread, increased tension is arising over lack of access to places that we have all traditionally believed were the public’s right to enjoy. Landowners do not actually own the lakes, rivers, seashore, and wildlife that border their land, but they do control access to them, and that is what leads to the problems. New Zealand has a long tradition that rural people have typically allowed access under reasonable conditions to enjoy those places, and that is how we have got by for more than a century and a half, with relatively little friction over those things. However, changes are happening both with overseas people who do not respect those traditions coming in and acquiring land, and also, I have to say, I have observed that some city people acquiring land in the country are not familiar with those traditions, either. So there is a need to address those matters.

Of some of the particular examples I know there is a place in the Coromandel called New Chums Beach, which is one of the most superb, totally undeveloped beaches remaining in the country, with nothing but bush, cliffs, a bit of farmland, and the beach. Part of that land, which has riparian rights as far as the mean high water. The landis owned by a landowner who has put up signs denying the public the right even to walk along the sand. It is all quite illegal, of course. As it happens, he is not an overseas person, but he has put up signs trying to persuade the public that they do not have the right even to walk along the beach from outside his property, and to walk along the beach in front of his property. The locals keep pulling the signs down, because they know quite well that he is wrong. So those frictions are starting to happen.

When the Crown Pastoral Land Bill went through—one of the earlier bills on which I sat on the select committee after I came to Parliament—I urged for better provision to be made for public access when those lands were privatised. In fact, that was not done in the bill, and we are feeling some effects from that now.

So there is a need to address those issues. However, we do have some concerns about the matters in Dr Smith’s bill, and we do think that they will need to be considered carefully at the select committee. I did not know what he meant by the reserves fund, so I asked the Minister of Finance. I thought that he would be able to tell me. He was sitting in the House so I went over and I said to Michael Cullen: “Hey Michael, what’s the reserves fund?”, and he said: “I don’t know.” I was hoping that the answer was not going to be the Nature Heritage Fund, which is a Department of Conservation fund set up specifically for biodiversity protection for acquiring land in order to protect biodiversity values.

Another of our concerns is that none of the criteria set out in the bill for setting up such Queen’s Chains—and I do not see why we should not use the term, even if it is not provided for in legislation—include ecological protection, biodiversity, or environmental reasons. It is all about public interest, access, and good will. That is fine. It is a recreational approach, rather than a biodiversity protection approach. The very last thing we would want to do is to use money that is set aside for biodiversity protection to provide that compensation. In fact, I still do not know what the reserves fund is, whether it is a Department of Conservation fund but it is not the Nature Heritage Fund—

Hon Dr Nick Smith: It’s in the Reserves Act.

JEANETTE FITZSIMONS: Under the Reserves Act it is very unlikely it will be able to fund the level of access strips that are envisaged under this bill, but that is another matter that can be considered in the select committee. The whole principle of compensation is a somewhat vexed one.

Hon Dr NICK SMITH (National—Nelson): I thank members for their contributions to the debate, and I shall respond to a few of the points in reply. Firstly, there has been the point that the term “Queen’s Chain” does not exist in law. Technically, that is quite correct. It is esplanade reserve, esplanade strips, some of it is public road, and some of it takes the form of marginal strips. I am one of those who believes that the law should use the language of New Zealanders. I know that Dail Jones and some of those who are lawyers want to mystify the legal process by using complex terms. It is more sensible for this Parliament, as much as possible, to use the language of New Zealanders. In the text of the bill I do use the term “esplanade reserve”, because that is what is provided.

Secondly, I have found a huge contradiction here. On the one hand, those who oppose the bill say that it is an awful attack on property rights—that we cannot do that, because it attacks property rights. In the next breath they say that the bill is an absolute have for the taxpayer and ratepayer, who will have to pay all the compensation. Opponents of the bill cannot have their cake and eat it; those are contradictory views. Opponents of the bill can have one argument or the other; they cannot have them both. I particularly thought that Dail Jones’ contribution on behalf of New Zealand First would have to be the most flaky contribution I have heard from that party in the 9 years it has existed. For 9 years New Zealand First has gone around the country saying it opposes foreign ownership, foreign ownership is a bad thing, and it would oppose foreign ownership all the time. Despite having been in Government for 3 years, and despite being in this Parliament for another 6 years, have we seen any attempt by any New Zealand First member to do anything about that? There was neither a bill nor anything else on that issue from New Zealand First when it was in Government. This is a difficult area of the law, and this bill is an honest attempt to deal with a very real, practical issue in my constituency, where foreign ownership has resulted in extra restrictions on public access. I thought that if New Zealand First had an iota of integrity, given all the rhetoric we hear from its leader it would at least support this bill being referred to a select committee.

The third issue concerns the reserves fund. There have been questions in respect of new section 9A(7), inserted by clause 3, as to the fund that is being referred to. Under the Reserves Act, if any reserves are sold the funds from the sale go into a reserves fund that is managed by the Department of Conservation. In just the same way as that applies under other provisions of the Conservation Act and the Reserves Act, my preliminary view is that that fund would be the best place for the compensation to be paid from.

The last point I wish to make relates to the dramatic speech given by Mr Dail Jones. Quite simply, I ask him to look at the word that he failed to read—that is, the territorial authority “may” require. He has the great idea that that is a compulsory provision, when I am trusting a sensible local council to decide whether there is an area where it would like to have the Queen’s Chain taken for public purposes in order to restore public access, and to provide compensation. The bill provides that in making such a decision, the council will give due regard to present and potential recreational use, to the present and potential benefits to public access, to the potential benefits to water quality—to respond to the point that has been raised, quite rightly, by Jeanette Fitzsimmons—and also to the issue of the cost. If the cost of an area is far too much, I have great faith that councils will quite sensibly decide that that is not an area where they think the Queen’s Chain is worthwhile. That is why common sense will prevail, as it has in this bill.

It is interesting to reflect on history. In 1840, when the Queen’s Chain was first proposed in an instruction to Captain Hobson, there were those who came from a property right perspective who said that it was outrageous, that it was an attack on property rights, and that we should never have it. I think that most members of every single party in this House would acknowledge that the instruction from Queen Victoria that gives us a unique right of access around our water bodies was incredibly wise and showed great foresight. I ask this House to show some foresight today by recognising that there is increased foreign ownership of our coastline and our precious areas, and that this Parliament should make endeavours to ensure that in future people can gain access to those areas of New Zealand.

A party vote was called for on the question, That the Overseas Investment (Queen's Chain Extension) Amendment Bill be now read a first time.

Ayes 97

New Zealand Labour 51; New Zealand National 27; Green Party 9; United Future 8; Progressive 2.

Noes 23

New Zealand First 13; ACT New Zealand 8; Māori Party 1; Independent: Awatere Huata.

Bill read a first time, and referred to the Local Government and Environment Committee.

Sittings of the House

Sittings of the House

DAIL JONES (Junior Whip—NZ First): I raise a point of order, Madam Speaker. I wonder whether you can help me with regard to a procedure problem that we seem to face in this House. I draw your attention to page 3 of the Order Paper. We have three private members’ bills that will not be debated tonight, including the Hazardous Substances and New Organisms (Genetically Modified Organisms Moratorium Reinstatement) Amendment Bill, which New Zealand First desperately wants to debate and see passed in this House, and yet the Greens refuse to put that bill up for debate. What can we do to make sure that that bill can come before the House as soon as possible? We are likely to see an early adjournment tonight, and we still have 1 hour and 20 minutes to go. We could easily have considered that bill, yet the Greens do not want to put it up for us to debate tonight. What can we in New Zealand First do to make sure that that important legislation is dealt with?

Madam DEPUTY SPEAKER: The answer is that it is entirely up to the member who is promoting the bill. It is his decision.

Hon KEN SHIRLEY (Whip—ACT): I raise a point of order, Madam Speaker. I have a parallel but different concern; it is with the way the Order Paper is being managed. I notice that time and time again this House rises early for dinner breaks, and consistently rises early on members’ night, yet the Government still goes into urgency, and even when it takes an urgency motion it still wants to rise early. There seems to be something going awry with the compilation of the Order Paper and the flow of matters of business to this House, and I think all members are concerned because it is happening too frequently.

Madam DEPUTY SPEAKER: That matter is entirely up to the House.

JILL PETTIS (Senior Whip—Labour): After discussion with other members and in light of the progress we have made on members’ day, I seek leave for the House to rise at this time.

Madam DEPUTY SPEAKER: Leave has been sought for that purpose, and it is opposed. Leave is not granted.

Inquiry into Hospital-Acquired Infection

Consideration of Report of Health Committee

BARBARA STEWART (NZ First): I move, That the House take note of the report of the Health Committee on the inquiry into hospital-acquired infection. It is really pleasing to see that at last hospital-acquired infection has been recognised, and that procedures have been put in place to attempt to minimise those incidents. New Zealand First was very pleased to see in the Government’s response to the report of the Health Committee tabled in the House today that the Government agrees in principle with the recommendations of the report, and is working towards the implementation of those recommendations. We were also pleased to see that the Government is working towards progressing—and I quote from the reply—“a national surveillance system for hospital-acquired infections”. The fact that there is not a nationwide standard and that data to date are not yet standardised across the sector means that it is not possible to evaluate and compare the rates of hospital-acquired infection between the district health boards. Unfortunately, that is still not possible, as different district health boards apply totally different standards. As outlined in the select committee report, there needs to be consistency in data collection and reporting across the health sector.

It was rather disturbing to read in the report that in New Zealand about 10 percent of the patients who are admitted to hospital will acquire an infection as a result of their stay there. Those infections pose a serious risk to both the patient and the staff, and the figures are increasing. The select committee was told, however, that the percentage of those infections is very similar in hospital patients in other developed countries. In the United States, hospital-acquired infection is the fourth-biggest cause of death, behind heart disease, strokes, and cancer. It is absolutely essential that in New Zealand our statistics do not mirror that trend, and that as much as possible is done to reduce the risks of the occurrence and transmission of hospital-acquired infections, as well as to prevent and control infectious disease outbreaks.

However, increasingly the evidence shows that the rate of hospital-acquired infections is rising, and that those infections are a real and persistent danger. The general public needs to be adequately informed about the hospital-acquired infections and the bloodstream infection rates in public hospitals. As pointed out in the select committee report, the Ministry of Health’s website is the ideal place for that information. Of course, it should be really easy for the reader to locate that information on that website. We need to reassure the public about the safety and quality of the public health system in New Zealand. People definitely do not want to have greater health problems in hospital than they had when they were initially admitted.

It is thought—and I have looked on other websites—that hospital-acquired infections have a huge variety of causes. It may be that today’s hospitals contain a greater proportion than previously of people who are sicker, who are older, and who are likely to be hospitalised for longer. It may be that basic hygiene procedures and practices are not being followed. There is, too, the emergence of antibiotic-resistant superbugs that pose an extremely serious risk for our hospital patients, and I understand that those superbugs are spreading within the system. That means that much stricter national standards of infection control are needed. It is also a dangerous situation, because methicillin-resistant Staphylococcus aureus bugs are resistant to at least three different classes of antibiotics. The bottom line is that if those bugs become resistant to further classes of antibiotics, infections will become totally untreatable. Just recently we had examples of operations being cancelled and of the temporary closure of wards, because a bug had infected patients and staff at many local hospitals right throughout the Wellington region. That totally disrupted hospital business for a large number of days, and it tells us that infection control in some hospital wards needs to be reviewed. The situation definitely should not be like that in a First World health system. District health boards should be required to record in their annual reports the outbreaks of superbugs in their hospitals and their communities.

In conclusion, New Zealand First supports the three recommendations that were made by the Health Committee and commented on in the Government report tabled today, and looks forward to the implementation of those recommendations.

MIKE WARD (Green): The Greens support the recommendations of the Health Committee inquiry into hospital-acquired infections. There are three recommendations, of which the standardisation of reporting procedures and the insistence on district health boards posting their rates of infection are the two major ones.

So what is the problem? Well, patients and staff entering our hospitals, rest homes, and places of healing are likely to acquire new diseases. In fact, they could wind up much sicker than when they entered, spend longer in hospital, and take much longer to recover, because of bacterial infections picked up in hospitals that are antibiotic resistant.

Any infection is potentially a problem. Infections acquired during periods of illness, when the body’s own immune system is depressed, are serious. When those infections, as a consequence of bacteria that have mutated, are resistant to most of the antibiotics in the pharmacist’s armoury, they are life-threatening.

How serious is the problem? Because of failures in the national surveillance system, including variations in the standard of data collection and variability in the accessibility of data, we cannot know for certain—hence the recommendations of the committee. But when 120 elderly and vulnerable residents in 10 Dunedin rest homes are infected by methicillin-resistant Staphylococcus aureus, the superbug, it is serious. E. coli, the most common cause of urinary tract infections, has mutated so that gentamicin, the main drug used by hospitals to fight such infections, no longer works. If that and the other resistant strains, including the methicillin-resistant Staphylococcus aureus, are no longer affected by the available drugs, we need to ask why and what we can do to protect ourselves.

The “Why?” and the “Are they resistant?” questions are not too complicated. We are over-prescribing. All too often antibiotics are the first line of defence, frequently against viral infections, to which they offer no protection, and all too often before our own defences—the lesser therapies such as rest—have been given a chance. We are feeding very similar products to livestock, including to many tens of millions of chickens prophylactically, not because they are sick, but because intensive farming methods such as battery chicken farming dramatically increase the likelihood of infection, so we medicate to stop them from getting ill. We also use the medications as growth promotants. Bacteria exposed to the same enemy over and over again will quickly develop resistance.

To the second question of why we are seeing such high rates of infections, I suspect, as simplistic as it may appear, that the answer is underfunding. Not only has funding for rest homes not kept pace with inflation, there are instances where funding levels have actually fallen. At a meeting at the Whare Aroha Home and Hospital in Rotorua, I heard yet again about the funding difficulties that face people charged with caring for our elderly. The most serious were the funding constraints on the care of dementia sufferers. The amount allocated for the care of those most vulnerable people has fallen from $104 per patient per day in 1987 to $97 per day today. Those people require a much higher level of supervision. Although the level of disability may vary, all are likely to be at substantially greater risk of infection than their peers in the wider community.

If the professionals charged with their care are unable to afford the optimum level of staffing, then, for many, infection is only a matter of time. Their removal to a hospital is similarly inevitable, and the risk of infection, not just to the patients, but to anyone entering our hospitals—particularly the staff—is heightened. Those people who are likely to be affected must be tested before they enter hospital so that we can take greater care to avoid infection. We are talking about a life-threatening disease—septicaemia. We are talking about an infection that may be the consequence of injury or operation. More important, we are talking about the infection of people when they are at their most vulnerable, when their own defences are likely to be depressed, and when they are already traumatised by the processes and illnesses for which they are in care.

Avoiding infection is hardly a new science. Lister, Pasteur, and Fleming are not new names. But avoiding infection requires extreme cleanliness and extreme care, and it would help if we took steps to avoid any escalation of the incidence of resistant bacteria, by avoiding the excessive prescribing of antibiotics as growth promotants. As I said before, we are talking here about a threat to the most vulnerable in our community. The Greens support the recommendations of the select committee, and we look forward to other measures to avoid continued escalation of the resistant bacteria in the future.

STEVE CHADWICK (Labour—Rotorua): I rise to take a short call on the report of the Health Committee’s inquiry into hospital-acquired infection. I find it very interesting that we are debating this on a members’ day. This phenomenon of debating an inquiry report has not occurred in the 4 years I have been in the House. I think that is very healthy in itself, because those who were on the select committee found this an interesting inquiry.

It came about from an Audit Office report. The Audit Office work-stream identified some concerns with the reporting of hospital-acquired infection. It is not rest home - acquired infection; it is hospital-acquired infection. Many rest homes have some hospital beds, but we have to be very careful to differentiate when we look at district health board reports to the Ministry of Health.

In essence, the committee found that this condition has been around ever since we have had hospitals. It is not a new phenomenon for people to acquire infection in hospitals. We do not want to panic the community of New Zealand, but the select committee did agree that there needed to be national standards of infection reporting that need to be consistently applied and reported against.

We were a little concerned that some of the district health boards, despite our request, did not give evidence to our inquiry. That was of concern to us. But we are really pleased to see, in the recommendations in the Government report, that the ministry is taking this seriously, which means that the work of select committees is very valuable in terms of being an external audit of the goings-on in Government. We will look forward to the report back from the Ministry of Health in November of this year. I am sure the report will come to the select committee, and will identify the most appropriate and cost-effective way of setting up a national data surveillance system. That is what we are asking for.

We are very pleased with the monitoring initiatives of each district health board now. The select committee reports on each board, its balanced scorecard, and how it is performing, and we want to see infection surveillance as part of that reporting. Another very good aspect of our recommendations is the move to post that information on the ministry’s website. But I think we must be very cautious. I say to the Green member that if he had been part of the committee, he would realise that we do not want to raise community anxiety. We simply need to keep a report card on each district health board. It will be great when district health boards start reporting on rest homes, as then we will have comprehensive data.

But the issue goes back to the fundamentals of cross infection. The Green member was correct about the over-prescribing of antibiotics, but the issue simply goes back to one of the fundamentals—basic hand-washing in hospitals. There is no great state-of-the-art combatant against hospital infections. Members must remember that when people go into hospital, they are often carrying this infection with them. It is on our skin and in our gut. It is only when we are sick that the infection becomes so manifest.

As chair of the select committee, I am pleased that we did a very short inquiry. We did not hear a lot of submissions. The ministry came before us. We have heightened awareness on an issue that causes concern to New Zealanders and to those of us involved in health monitoring, and the ministry is taking our response seriously. I will hold the Health Committee accountable for follow-up actions in our review of the Ministry of Health.

HEATHER ROY (ACT): I want to take just a short call to reiterate a lot of what the previous speaker has said. Infection control in hospitals is an important issue and it can be a difficult one, but a lot of hospital-acquired infection is very easy to combat with quite basic hygiene implementation. Hand-washing is extremely important, but busy nurses and doctors travelling around wards, and other health professionals too, often just forget to wash their hands between seeing patients.

I remember that when I was a physiotherapy student in Dunedin there was a very high infection rate. I think it was in the orthopaedic department. An investigation was launched and the reason became apparent quite quickly. An orthopaedic surgeon was very keen on having medical students in theatre so they could learn, but the result of more people being in the theatre—people who perhaps had not gone through all the scrubbing up and routines that the surgeons and theatre staff had gone through—was that infection was introduced. The patients were the unwitting victims in that scenario. The hospital acted very quickly and put into the theatre an observatory with a perspex screen, behind which the medical students stood. The infection rate quickly dropped again.

It is a salient point to remember that infection is easily spread but it is also frequently easy to get the percentage, the numbers, back down. I too add a word of caution to what the Green Party member was saying about antibiotics. It is very important that antibiotics are not overprescribed, but that comes back partly to the demands that patients frequently put on their doctors. Very few people like going to the doctor unless they leave with a prescription, and frequently it is for an infection that will clear up on its own anyway. Patients often pressure doctors to prescribe something—usually an antibiotic. That practice has caused some problems with antibiotic resistance. People need to take some responsibility themselves for the pressure they put doctors under in terms of prescribing.

Again, on the issue of hospitals, we need to be very cautious in where we apportion blame. It is important that that does not happen unfairly. One of things I was a little disappointed with in the select committee inquiry was that we were not able to get the figures for individual district health boards. It would have been good to see where they are at, so that we have a measure, a yardstick, to follow up on so that when they are investigated next time, we would know exactly where they stand. Some of the district health boards have now given that information willingly during our financial review process, but some were very unwilling to do so. It would have been a good show of faith, although I suspect some were very worried about the results that would have come out.

The Green member commented in the select committee inquiry report that she was very worried about the high figures, but I think the district health boards themselves have acted very quickly to contain the problems that have been documented. It is important also to remember that that very first inquiry was carried out, I think, in 2001, which is quite some time ago now. We were very satisfied that the district health boards that did seem to have reasonably significant problems had acted very quickly to contain them. I suspect that when the investigation is done again and reported back in November this year, we will see a significant decline in the rate. It is very important to remember that people are not trying to spread infection maliciously, but it is important that they take care. Like the previous speaker, I agree that this was a worthy exercise and one that has yielded good results.

LINDSAY TISCH (National—Piako): We support the three recommendations that were made. They are recommendations that, I think, stand the scrutiny of the profession and the public at large. I will not go through them as they are clearly identified. But I think it is important that we note what the conclusion of the report states, as no one has mentioned this or spelt it out, and I think it is appropriate that I do that. The Government assures the select committee of its commitment to improving the safety of public hospitals, through better management of hospital-acquired infections. Significant progress has been made in improving the consistency of data sets, and work is under way to assess cost-effective options for progressing a national surveillance system for hospital-acquired infections. District health boards, I know, will do all they can to build confidence. They do not want to have infections in their places of work, and certainly they will be going out of their way to make sure that this is not commonplace. So National has pleasure in supporting this proposition.

Motion agreed to.

The House adjourned at 9.05 p.m.