Wednesday, 15 March 2006

Wednesday, 15 March 2006

Wednesday, 15 March 2006

Madam Speaker took the Chair at 2 p.m.

Prayers.

Standing Orders—Sessional

Standing Orders—Sessional

Hon Dr MICHAEL CULLEN (Leader of the House): Following discussion and agreement at the Business Committee yesterday, I seek leave for two matters relating to changes in the drafting of legislation.

That the Clerk of the House of Representatives, when reprinting bills at any stage during their passage through the House or when preparing them for the Royal assent, after consultation with the Chief Parliamentary Counsel or (as the case may be) the Commissioner of Inland Revenue, may make amendments to bills currently before the House or its committees—

(a) to incorporate the changes in drafting style adopted by the Parliamentary Counsel Office referred to in the document Changes in drafting style: List of proposed changes in drafting style in legislation, presented to the House on 15 March 2006; and

(b) to amend bills by omitting where applicable any clause 1(2) (relating to the principal Act) and substituting a new clause that describes the principal Act being amended—

but, in each case, not so as to alter the meaning of the provisions of those bills.

That a clause in a bill confined to stating that the bill amends an existing Act (a principal Act clause) be treated as a preliminary clause that may be taken together with the title and commencement clauses in committee.

Madam SPEAKER: Is there any objection to that course being followed? There is no objection.

Business of the House

Business of the House

Hon Dr MICHAEL CULLEN (Leader of the House): I also seek leave, and I have had a discussion with Mr Tisch—I have not had a chance to discuss it with the other whips—that the members of the Primary Production Committee meeting outside Wellington are presumed as present within the precincts of Parliament for any party vote held during the sitting of the House this week.

Madam SPEAKER: Is there any objection to that course being followed? There is no objection.

Sittings of the House

Sittings of the House

LINDSAY TISCH (Senior Whip—National): I understand that the House will go into urgency on Thursday. Is it the Government’s intention to seek leave for the House to sit until 12 midnight on Thursday, and not on Friday?

Hon Dr MICHAEL CULLEN (Leader of the House): I had a discussion with the shadow Leader of the House this morning and suggested that it might be a sensible idea to seek leave to sit until midnight tomorrow on the assumption that probably the matter on which we are taking urgency, the Land Transport Amendment Bill, will be dealt with in that time so that members will be free to return to their electorates first thing on Friday morning. Perhaps if I could seek that leave at this point: that the sitting tomorrow night continue past 10 o’clock, to midnight.

Madam SPEAKER: Leave is sought. Is there any objection? There is no objection.

Questions for Oral Answer

Questions to Ministers

Whangamata Marina—Minister’s Intervention

1. Hon Dr NICK SMITH (National—Nelson) to the Minister of Conservation: What communications did he or his office have with John Wilson or Bob Harvey prior to his decision on 7 March to overturn the Environment Court on Whangamata marina that would have given John Wilson information to write in an email on 3 March that “Chris Carter is going to pull the plug on the Marina but is asking for us to back him up.” and “We have received confirmation from Bob Harvey who contacted Shanksy to say the Minister has got the balls to go ahead and stop the Marina going ahead at Whanga.”?

Hon CHRIS CARTER (Minister of Conservation): Following the lead story in the New Zealand Herald on 1 March speculating about my decision on the Whangamata marina, my office and I were besieged by inquiries. As far as I can establish, no communication took place with a person named John Wilson, although a conversation was had with Bob Harvey. At all times my office and I emphasised to anyone who contacted us that I had not made a decision on the marina, and in fact on 2 March I agreed to delay making my final decision until the following week to enable the Whangamata Marina Society to provide me with further information.

Hon Dr Nick Smith: Can the Minister tell the House exactly what he did tell Bob Harvey on the Whangamata marina; and might he also explain to the House why it was appropriate to talk to a mayor on the opposite coast, over 100 kilometres away, when he had no communication at all with the Thames-Coromandel mayor?

Hon CHRIS CARTER: As I have just answered in reply to the primary question, I emphasised to everybody who contacted me over this issue that I had not made a final decision. Mayor Harvey contacted me because of his long association with the surfing association, of which I understand he has been honorary president at times.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. The Minister did not answer the question. It was very specific. He said in his primary answer that he had discussed the matter with Bob Harvey. I asked him what he said to Mr Harvey. I also asked him why he had spoken to Mr Harvey and not to the Mayor of Thames-Coromandel where the Whangamata marina is, and he made no attempt at all to answer that.

Hon Dr Michael Cullen: If one chooses to ask a number of questions within a supplementary question, one can only expect to get an answer to one of those—the Minister may address one of those questions. It is clear the Minister did address what he said to Mr Harvey. He stated quite clearly that he told him he had not made his final decision.

Hon CHRIS CARTER: Speaking to the point of order, I ran out of time in giving my answer but I would just like to tell the member that I spent an hour and a half with Philippa Barriball, the Mayor of Thames-Coromandel, looking at the site. I spent a lot of time discussing the issue with her before I made my decision.

Madam SPEAKER: As was said, Ministers are obliged to answer only one supplementary question. Also, the Minister did address the question. I listened very carefully.

Steve Chadwick: Along with phone calls and emails, is the Minister aware of any other email campaigns about the Whangamata marina proposal?

Hon CHRIS CARTER: Yes, I have seen an email also dated 3 March circulated by the president of the Marina Society, which states: “If you haven’t yet emailed the Minister, do so, and encourage your friends to, as well. Another good option is to ring talkback and grizzle like hell.” The president of the Marina Society has every right to send out an email like that. I welcome lobbying from anyone.

Metiria Turei: Was the Minister of Conservation, in reaching his decision on the application, obliged to take steps to protect rare and endangered species, such as the banded rail, which inhabits the Whangamata estuary, and is this the same responsibility that he has for protecting the rare and endangered snail, Powelliphanta augustus, on the Stockton ridge?

Hon CHRIS CARTER: Yes.

Gordon Copeland: What advice does he have at this point in time for the people of Whangamata who spoke to him and who would like to see a marina in their town; can he suggest an alternative site where a marina could be built and, if so, does he believe it would occur in less time than the 14 years it took in respect of the preferred site, now ditched by the Minister?

Hon CHRIS CARTER: I have a great deal of sympathy for the Whangamata Marina Society, but there is no legal capacity for me to suggest any other site. Each application must stand on its own merits. I am not against marinas; just not on that site.

Hon Dr Nick Smith: When he told the House yesterday that he had “followed due process”, does he consider it due process to tell his mates in advance of the decision, get them to organise an email campaign supporting his decision, and then use those emails to justify his decision?

Hon CHRIS CARTER: At no point did I tell my mates, or people who were not my mates, what my final decision was going to be. As I have already answered, I welcome people lobbying me on issues. It is good for politicians to hear from the public.

Hon Dr Nick Smith: How does he reconcile his statement to the Waikato Times on 7 March that he was seeking more information prior to making a decision on the Whangamata marina with the email on 3 March stating that Chris Carter is going to “pull the plug on the marina, but is asking us to back him up.”?

Hon CHRIS CARTER: I am not responsible for what other people send out by email. If I had sent that email myself I would be responsible, but I did not.

Hon Dr Nick Smith: Does the Minister consider 13 years to be a reasonable time in which to process a resource consent; if not, what will he do to change things?

Hon CHRIS CARTER: I am sorry to announce to the House that I am not the Minister responsible for the Resource Management Act processes. That Act was passed by the National Government, of course, in 1991.

Hon Dr Nick Smith: Why did the Minister not use the powers in section 119(4) of the Resource Management Act, which provides that the Minister may refer the application back to the hearing committee or the Environment Court, if he has a genuine concern about the scrutiny of the Environment Court?

Hon CHRIS CARTER: I was intrigued when Dr Smith, a former Minister of Conservation, raised this issue yesterday. I sought legal advice from the Department of Conservation’s legal section and was told that such a thing is not legally possible. Either the lawyers have got it wrong or Dr Smith has, once again.

Hon Dr Nick Smith: I seek the leave of the House to table a document of a former Minister of Conservation, Sandra Lee, which referred the Whitianga marina back to the Environment Court.

Document not tabled.

KiwiSaver Scheme—Alternatives

2. SHANE JONES (Labour) to the Minister of Finance: What reports, if any, has he received suggesting alternative approaches to KiwiSaver that would encourage people to save for their retirement?

Hon Dr MICHAEL CULLEN (Minister of Finance): I have seen one report, stating: “Incentives have to be put in place to make New Zealanders save more than they spend.”, and: “National is working on a range of incentives to make people want to save.” That report was from National’s finance spokesperson, Mr John Key.

Shane Jones: What other recent reports has he seen on the topic of incentives for savings?

Hon Dr MICHAEL CULLEN: I have seen a second recent report that dismisses tax incentives as an option, stating: “If tax incentives don’t increase your savings total, what’s the point of them?”, and goes on to conclude: “I don’t think anyone has a simple answer to increasing savings.” That report comes from the National Party leader, Dr Don Brash.

John Key: Why does the Minister think that KiwiSaver will be successful, when, first, it does not match contributions except for somebody who is saving for a house—and even that is a minimum contribution—second, the contribution rate is double that of the State sector retirement scheme, and, third, there is no change to the after-tax income of New Zealand’s workers?

Hon Dr MICHAEL CULLEN: The only conclusion we can draw from that question is that the member is promoting tax incentives for savings—which, of course, his leader has dismissed on many, many occasions—and I might say that is consistent with all international research.

Jeanette Fitzsimons: Is the Minister concerned that the role of KiwiSaver in meeting his goal of increased savings by households is directly undermined by the behaviour of the trading banks, which are forcing credit down the throats of consumers by increasing credit card limits when asked not to, by urging people to mortgage their homes further to pay for overseas holidays and new cars, and by setting performance targets for staff to sell more credit; if he is concerned about that, when will he have measures in place to control that behaviour?

Hon Dr MICHAEL CULLEN: I have expressed both public and private concern about a number of those issues, but I do not think legislation is an answer. How one would legislate to prevent people from being offered the opportunity to mortgage their homes for other purposes is quite beyond me, particularly when in New Zealand that is often used for the purpose of sustaining and expanding a small business.

Payroll Tax—Employment

3. JOHN KEY (National—Helensville) to the Minister of Finance: Would the introduction of a payroll tax have the effect of reducing employment in some industries; if so, what industries might be affected?

Hon Dr MICHAEL CULLEN (Minister of Finance): Even I believe that all taxes have economic impacts, and these would be considered alongside any proposals that any responsible Government would consider.

John Key: Does the Minister accept that introducing a payroll tax would make labour more expensive for employers—in fact, that is the whole point of having a payroll tax—and that employers would respond by reducing the number of people they employ; if not, why not?

Hon Dr MICHAEL CULLEN: Clearly, a payroll tax, all else being equal, would increase the cost of labour. If it was accompanied by a reduction in the cost of capital, then, of course, that might lead to expansion of productivity.

Hon Mark Gosche: Would the introduction of a tax exemption for new migrants and returning New Zealanders have a positive effect on employment in some industries?

Hon Dr MICHAEL CULLEN: Yes, indeed; it will assist businesses in gaining access to skilled labour in a tight market. The changes that this Government is introducing, with effect from 1 April, show that we are serious about making practical changes to benefit business, rather than simply relying on tired old rhetoric.

John Key: Has the Minister considered the impact of, for instance, Treasury’s 2004 analysis of payroll taxes—a 20 percent company tax rate and a 5.4 percent payroll tax—on a company such as Air New Zealand, because when I looked at its most recent annual report, which was, I think, the 2004 annual report, I calculated that that company would have a reduction in its capital, which is something he referred to in his first supplementary answer, of $12.6 million, and an extra payroll tax implication of $44.8 million, making a net loss to the company of around $32 million; and what impact does he think that would have on Air New Zealand’s desire to keep all of its 10,829 employees?

Hon Dr MICHAEL CULLEN: Any structural change in taxation has impact differentially upon business. Treasury, of course—most prominently—believes that the most appropriate change to the structure of taxation is to increase GST and to lower taxes on income. I notice that no party in the House is supporting the Treasury position on taxation.

Hon Mark Gosche: Has the Minister seen any reports on the likely effect of alternative proposed changes to the tax regime on employment in some industries?

Hon Dr MICHAEL CULLEN: Yes; I have seen reports suggesting an extravagant programme of tax cuts costing $11 billion over 3 years. This would necessarily have an impact on employment in industries such as health care and education, as it would require severe cuts to public spending.

John Key: In the Minister’s mind, is the purpose of a payroll tax to raise revenue or change the relative price of capital and labour?

Hon Dr MICHAEL CULLEN: No decisions have been made about any change in the structure of taxation, but I can assure the House that if any proposals are developed, they will be put out in the public arena for full consultation.

John Key: Is the Minister aware that the Nobel Prize - winning economist Paul Samuelson said: “Simple-minded people often say that raising wage rates will cause machines or ‘capital’ to be substituted for labor. More sophisticated folk have wondered a little about this argument …”; if so, does he place himself among those simple-minded people?

Hon Dr MICHAEL CULLEN: No. I am always happy to take guidance from Mr Paul Samuelson, who as one of the world’s leading neo-Keynesians rejects almost every economic argument put forward by the Opposition.

John Key: Why could the Minister not give a straight answer to the question of whether the business tax review is meant to be fiscally neutral; surely, before he embarks on such an exercise he needs to know whether he is digging another fiscal hole or simply filling one in?

Hon Dr MICHAEL CULLEN: Because there is not a straight answer.

Pharmac—Subsidies

4. HEATHER ROY (Deputy Leader—ACT) to the Minister of Health: What monetary value, if any, does Pharmac place on human life when considering new drugs for subsidy, and if none, why not?

Hon PETE HODGSON (Minister of Health): Pharmac measures outcomes in terms of improvement of quality of life and extension of life. Quality life years is one of nine criteria used by Pharmac in assessing pharmaceuticals. Other criteria include health need, and effectiveness of the treatment.

Heather Roy: What does he estimate is the cost to Alzheimer’s sufferers who require rest home care or 24-hour care from family members because Pharmac refuses to fund cholinesterase inhibitors that could significantly improve their dementia, or is he interested only in money saved by denying those people treatment?

Hon PETE HODGSON: The issue around acetylcholinesterase inhibitors and Alzheimer’s is not as the member would suggest. I refer her to a 2004 Lancet article, in which the British looked at the use of those drugs in a real-life scene, and found that they made no difference.

Hon Marian Hobbs: How does access to prescription medicines in New Zealand compare with access in other developed countries?

Hon PETE HODGSON: Very well. The Commonwealth Fund shows that New Zealanders have a more ready access to pharmaceuticals than do Australians, Canadians, and Americans. We have a lot to be proud of, in that field.

Sue Kedgley: Is the Minister concerned that the price of the breast cancer drug Herceptin is 50 percent higher in New Zealand than it is in the UK, and does he agree that that illustrates not only how far pharmaceutical companies will sometimes go to make a profit but also the need to protect Pharmac and ensure that it can negotiate access to pharmaceuticals from as strong a position as possible?

Hon PETE HODGSON: I thank the member for her perceptive question. However, Medsafe is due to make its decision on Herceptin next Thursday, and it would not be appropriate for me to comment prior to that.

Rodney Hide: Will the Minister meet Epsom resident Dr Mamangalika Mendis, who is suffering from cancer and would benefit enormously from Herceptin, and explain to her and others, who are presenting on the steps of Parliament at 1.15 tomorrow a petition signed by 17,000 people, the Government’s policy on drugs; if not, why not?

Hon PETE HODGSON: I am happy to explain to the member’s constituent and to the country now that Medsafe—

Rodney Hide: What about tomorrow?

Hon PETE HODGSON: Now. Medsafe is the first regulatory authority in the world to look at the licensing of Herceptin.

Rodney Hide: I raise a point of order, Madam Speaker. We seem to have this constant problem with Ministers. It is not a hard question. I assume the Minister is saying that he will not meet New Zealanders who are travelling to Wellington to protest. Why could the Minister not stand up and say that in the House? We have this time and time again from Ministers who are able to give an answer and refuse to.

Madam SPEAKER: The Minister addressed the question. He was asked not only whether he would meet but also whether he would explain the policy. He addressed the question by explaining the policy.

Rodney Hide: He’s gutless.

Hon Harry Duynhoven: I raise a point of order, Madam Speaker. We have some rules in this Parliament about the way members and Ministers can be described. I take offence at what the member said. I think he should be asked to withdraw.

Madam SPEAKER: I must say I did not hear what the member said. If an unparliamentary term was used, would the member please withdraw. No unparliamentary term was used?

Rodney Hide: I said he was gutless for not fronting up.

Madam SPEAKER: Would you please withdraw.

Rodney Hide: Well, actually—

Madam SPEAKER: Would the member please withdraw.

Rodney Hide: I withdraw, Madam Speaker.

Dr Jonathan Coleman: When will the Government recognise that investment in pharmaceuticals will actually keep people out of hospital, will save taxpayer money in the long run, and, most important, will save New Zealanders’ lives?

Hon PETE HODGSON: Successive Governments have recognised that for a very long time. The member seems to confuse that recognition with the Government’s desire to achieve an appropriate level of drug treatment in New Zealand at an affordable price, and we are one of the most cost-effective pharmaceutical users in the world. I say to the member that we have more medicines than Australia, and we pay a small part of the price.

Christchurch Polytechnic Institute of Technology—COOL IT Programme

5. Hon BILL ENGLISH (National—Clutha-Southland) to the Minister for Tertiary Education: Has the Christchurch Polytechnic Institute of Technology repaid any of the $3.5 million it agreed to repay the Tertiary Education Commission in 2004, following an independent evaluation of its COOL IT course; if not, why not?

Hon Dr MICHAEL CULLEN (Minister for Tertiary Education): Repayment is to occur by way of adjustments to the final funding payments from the Tertiary Education Commission to the institute for the years 2005, 2006, and 2007. The payment for 2005 has yet to be calculated.

Hon Bill English: Is the Minister now telling us that when Parliament was told repeatedly by his predecessor, Steve Maharey, in late 2004 that money would be repaid, we were not meant to believe that, and that we had to wait 18 months or 2 years before anything happened?

Hon Dr MICHAEL CULLEN: No, the member was told that at the time.

Hon Bill English: Can the Minister confirm the statement made by the chief executive of the Tertiary Education Commission, who told a select committee last week that no money has been paid back, that the action it is taking is to set up a review during March of this year, and that that review is now in place; does he regard that as serious action to show accountability for a scam?

Hon Dr MICHAEL CULLEN: I will try to explain it again to the member. The institute is not paying a cheque for $3.5 million to the Government. Over 3 years it will get $3.5 million less in its final payments than it would otherwise get. The first of those years is 2005, and that payment has yet to be calculated.

Hon Bill English: Does the Minister think he may have trouble negotiating the repayment of $3 million out of the $15 million scam, when the institute has publicly reported that its enrolments could be 18 percent lower than last year and that it faces a $3 million deficit; why would we believe that he will get a dollar out of the institute?

Hon Dr MICHAEL CULLEN: I will try again. There is no agreement for the institute to write out a cheque for $3.5 million to the Government. The sum of $3.5 million is being withheld from the payments due to the institute. The first of those payments has yet to be calculated.

Hon Bill English: What does the Minister think his predecessor meant when he told Parliament several times in August, September, and December in 2004: “where people have misused or inappropriately used the Government funding, that money should be paid back.”; and is it the case that Parliament was misled by his predecessor, because it was never his intention that the money “should be paid back.”?

Hon Dr MICHAEL CULLEN: For the fifth time, I think it is, I say that the repayment is to occur by an adjustment to the final funding payment from the Tertiary Education Commission to the institute. The first of those payments is yet to be calculated. Therefore what the member said is correct—and the member has just failed to achieve in English level 1.

Hon Bill English: Can the Minister confirm that this explanation is remarkably similar to the distinction the Government made, in the case of David Benson-Pope, between a complaint and a formal complaint, and that here it is making a distinction between money that the Minister said should be paid back as opposed to money it says it will keep and not pay to the institute?

Hon Dr MICHAEL CULLEN: No. Complaints come in about all kinds of people in this House to all kinds of other people in the House.

Hon Bill English: Can the Minister confirm that his version of accountability runs like this: Christchurch Polytechnic runs a $15 million hoax course enrolling 18,000 people, the Government pays over the cash, senior staff in the polytech pocket millions of dollars of that cash for personal benefit, the survey shows that only 3 percent of the students ever engaged with the course, and the end result is that, 2 years after that was exposed, absolutely nothing has happened—no one was sacked and no money was repaid—nothing?

Hon Dr MICHAEL CULLEN: No. Repayment will occur by way of adjustments to the final payments to the Christchurch Polytechnic Institute of Technology.

Ron Mark: Was any of the $3.5 million spent by the Christchurch Polytechnic Institute of Technology on purchasing artworks painted by the chief executive officer, Mr John Scott; if so, how much did the chief executive officer of the polytechnic get for his masterpieces?

Hon Dr MICHAEL CULLEN: I have absolutely no idea. I would welcome the information. I do note that Mr Scott is leaving in a matter of another month or two, I think it is.

Crime—Foreign Nationals

6. RON MARK (NZ First) to the Minister of Justice: Does his department hold statistics that indicate how much crime is being committed by foreign nationals; if not, why not?

Hon MARK BURTON (Minister of Justice): No. The Ministry of Justice sources its statistics from databases maintained for administrative purposes, which do not contain information on citizenship.

Ron Mark: Would the Minister consider recording whether those convicted are foreign students who are here on student visas; if not, will he be requesting that such statistics are kept, given the rise in kidnapping, extortion, and murder cases committed by foreign nationals, including the story of Bo Fan, outlined in today’s New Zealand Herald, Ding Yan Zhao, who killed a 4-year-old girl while driving recklessly, and countless other incidents involving foreign students, some of which recently prompted a judge to declare the existence of an apparent kidnapping season? If he does not accept that nationality statistics need to be collated, could he please tell the House why not?

Hon MARK BURTON: Whilst it is always prudent to keep such matters under review, I would have to say to the member that information collected by the ministry is used in a way to identify interventions to reduce further offending and to assist with administration of the criminal justice system. The ministry collects information, therefore, on gender, age, ethnicity, and other factors that assist justice sector agencies to administer and properly target their programmes. Nationality is not a predictor of offending and does not assist with targeting programmes within the justice sector.

Ron Mark: How can the Minister be comfortable telling the House that information is not specifically collated and that there are no plans to do so, when we know that the incidence of crime committed by foreign nationals, including students, is, like the incidence of crime committed by Māori, disproportionately high and is, like Māori crime, on the increase, and we know that the Government does not collate nationality data for legal aid, and that the police do not record the nationality of people arrested or charged with an offence but they will record every occasion where a Māori commits such a crime?

Hon MARK BURTON: As I indicated to the member before, the information collected is on gender, age, ethnicity, and other factors that are proven to assist justice sector agencies to administer and properly target programmes. Nationality is not a predictor of offending. It does not assist with targeting programmes within the justice sector.

Ron Mark: I would like to table a couple of things. I would like to table firstly a report in the Christchurch Press that points out that in the last 3 years Asian crime has overtaken all other types of crime. It is an article by Bob Kerr, a detective.

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

Ron Mark: I would like to table answers to written questions from Mr Hawkins, the then Minister of Police, and from Mr Goff, the then Minister of Justice, saying that the police do not record details of people’s nationalities when they prosecute or charge and that the Legal Services Agency does not record the detail on its database of legal aid given to foreigners.

Madam SPEAKER: Leave is sought to table those written questions. Is there any objection? Yes, there is.

Surgical Discharges—Comparisons

7. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: What is the number of individual surgical discharges for the calendar year 2001 and how does this compare with the number of individual surgical discharges for the calendar year 2005?

Hon PETE HODGSON (Minister of Health): About 205,000 people in both years. If the member had, however, asked about case-weighted discharges, the answer would have shown a 7.5 percent increase, and if the member wanted to go back to when he was last in Government, the increase would be about 11 percent.

Hon Tony Ryall: If the same number of New Zealanders are getting surgery as 5 years ago and the surgery they are getting is in fact more serious, does this not reveal how much sicker people in this country have to be to get an operation in our public hospitals?

Hon PETE HODGSON: I explained to the House yesterday the increase in case weights, and I shall have another go. What has happened in recent times is that a lot of so-called low case weight surgery, or simpler surgery, has been carried out in out-patient services and, in some cases, even in primary health care settings, and out-patients are not recorded as discharges for the very reason that the patient is not admitted in the first instance—or, at least, not reliably so.

Moana Mackey: Is the Minister concerned that New Zealanders who have been clinically assessed as being above the threshold for treatment are not receiving treatment?

Hon PETE HODGSON: Yes, I am concerned, and I think that is really the issue that shows us whether we are doing well or not well. The truth of the matter is that that figure has dropped by over a third in the last year and a half, which I think is a tribute to the efforts of our world-class health workforce. I would say, mind you, that when National was in office the data about which the member asks were not even available, because that Government had no appetite for transparency.

Hon Tony Ryall: Why does the Government continue to use surgical discharge statistics as some sort of evidence that hospitals are performing more surgery, when the Government has received advice from the Ministry of Health that says: “Discharges from surgical specialties simply indicate that a patient passed through a surgical service and was discharged from that service. They do not have to receive an operation to be included.”?

Hon PETE HODGSON: And they never have had to. That is to say, since the beginning of statistical collections, surgical discharges have included things such as endoscopies. All I would say is that if endoscopies were included then and they are included now, we have a reliable trend. What is really interesting is that when the National Government was in power it did include endoscopies, and nowadays we include fewer, because they are being done in out-patient services.

Hon Tony Ryall: Can the Minister explain why the Government, knowing that information, continues to quote the information as justification for increased procedures in the hospitals, when we actually have a system whereby someone can be admitted to hospital for an operation, have the operation cancelled, and be sent home, and this Government counts that person as having had surgery?

Hon PETE HODGSON: If that is the case, it was always the case. The member thinks he has found something new. We have one of the most transparent systems in the world about what is happening and what is not happening, and it has become more transparent under this Government than under his.

Jo Goodhew: Does the information that the Minister has confirmed today mean that the poor, unfortunate surgical patients who report that they have been sent home more than once because their surgery was cancelled could potentially be recorded up to three times in the surgical discharges data?

Hon PETE HODGSON: If that is the case, it was always the case. What is different about now from then is that these days more surgery is done and is not counted at all. It is done in out-patient services. That counting begins on 1 July this year.

Hon Tony Ryall: So the Minister stood up in the House today and claimed that after 5 years of Labour Government—

Hon Dr Michael Cullen: I raise a point of order, Madam Speaker. I know it is hard for a relatively new member, but we do usually start with a question word, not a “So” and a statement while waving to a fellow giggling friend.

Madam SPEAKER: I thank the member for that reminder. Yes, the member will ask a question.

Hon Tony Ryall: How can it be, after 6 years of a Labour Government—

Madam SPEAKER: If members wish to remain to hear the full question, they should be silent while it is being asked.

Hon Tony Ryall: How can it be that after 6 long years of a Labour Government, and billions of dollars more being poured into the health system, a Labour Party Minister of Health can stand up in the House today and say that no more people are receiving operations than there were 5 years ago, and have to admit on the basis of his cooked figures that we could, in fact, have fewer New Zealanders getting operations than 5 years ago?

Hon PETE HODGSON: I beg the indulgence of the House to try to explain to that member once more that—

Hon Dr Michael Cullen: He’s got the Bill English disease.

Hon PETE HODGSON: That is the Bill English disease. What is happening in our health system is that more and more people are having their surgical procedures undertaken in out-patient services. That means they are currently not counted at all. We are going to begin counting them from 1 July this year. What part of that explanation does the member not understand?

Music—Commercial Radio

8. SUE MORONEY (Labour) to the Minister of Broadcasting: Has he received any reports on the levels of New Zealand music on commercial radio?

Hon STEVE MAHAREY (Minister of Broadcasting): I recently received a report from the Radio Broadcasters Association that stated that in 2005 commercial radio played an amazing 20.8 percent of Kiwi music. That well exceeds the target of 17.5 percent. Given that in 1995, under the National Party, airplay of Kiwi music was 2 percent, can any National members take pride in their contribution to that success? I think the answer is not many, if any.

Sue Moroney: Is the Minister aware of any other Government initiatives supporting local broadcasting industries?

Hon STEVE MAHAREY: In addition to the voluntary code of practice, which is the quota, the Government last year provided $4.2 million through NZ On Air to support promotion of New Zealand music, both here and as part of an export drive overseas. We support Kiwi television production through the funding of NZ On Air, and through the Television New Zealand charter. We are also very pleased to see that broadcasting has now become so important to the National Party that it has four broadcasting spokespeople. It has Georgina te Heuheu, Murray McCully, Katherine Rich, and John Key, but even with four spokespeople, it still has no policy. [Interruption]

Madam SPEAKER: Yes, the members are right. The Minister knows that that is irrelevant to the answer of the question, so I thank members for that.

Pita Paraone: Could similar achievements in regard to Kiwi content be made by Television New Zealand, without its need to have a charter that requires it to reach certain targets?

Hon STEVE MAHAREY: No.

Prison Population Forecast 2005—Justice, Minister

9. SIMON POWER (National—Rangitikei) to the Minister of Justice: Does he stand by the information contained in the document Prison Population Forecast 2005, released by the Ministry of Justice; if so, why?

Hon MARK BURTON (Minister of Justice): I am satisfied that the forecast is based on sound analysis of the available data.

Simon Power: Why did the Minister not include figures on growth in the prison population in his press release of 7 March 2006—was it because he did not want to point out that over 12 months his ministry had found that the prison population was not going to increase by 10 percent between 2005-06 and 2009-10, as previously forecasted, but actually by 17 percent; how has this Government got it so wrong, again?

Hon MARK BURTON: I did not focus on that in the press statement because the statement was about the forecast, not about the outstanding achievements of this Government in delivering to the hardened criminals in New Zealand.

Lynne Pillay: Can the Minister give the House some specific examples of Government initiatives that have impacted on the prison forecast?

Hon MARK BURTON: Yes. As intended, the Sentencing Act 2002 has resulted in longer sentences being imposed. Reforms to preventive detention in that Act have resulted in more serious and recidivist offenders receiving substantially longer sentences, including preventive detention. At the same time the Parole Act 2002 has increased the proportion of sentences that inmates actually serve. Under the Bail Act 2000, more high-risk defendants are being denied bail. A record number of police, and the improvement in police resolution rates, have meant more cases coming to court and more criminals being imprisoned. Those Acts are successfully targeting hardened serious criminals, who are, appropriately, the cause of concern for the public.

Simon Power: When did the Minister finally realise that new prisons could not be ruled out, given that he said last week, in relation to prison muster numbers, that “if the rate of increase continues on the same trajectory, the inevitable result is the need for more prisons”; and how does he reconcile that statement with Damien O’Connor’s statements last November, in which the latter clearly stated that no more new prisons were being considered?

Hon MARK BURTON: If the member wants to ask a question of my colleague, he should do so. But I can certainly—[Interruption] Well, if the member wants me to finish, I will—

Simon Power: I raise a point of order, Madam Speaker. The question was directed to a statement made by the Minister in his capacity as the Minister of Justice. I asked him to reconcile that statement with a statement of another Minister. The question is within the portfolio responsibility that he holds.

Hon MARK BURTON: Had the member not interrupted me, I would have come to my response to the part of his question that related to what I said. I was simply pointing out that the other part of the question related to a statement of a colleague.

Madam SPEAKER: Would the Minister please address the question, so we can hear the answer in full.

Hon MARK BURTON: The purpose of forecasts, I say to the member, is to provide just that—a forecast. They are issued annually. They change with ever-changing data. I have at no point said anything that is inconsistent with the statement that the member attributed to me.

Simon Power: Why did his ministry state to a Sunday Star-Times reporter that no more recent forecasting was in the pipeline, when the report referred to in the primary question was released 2 days later; and should we take this to be a clear sign that every single limb of our justice system is now moving in a direction completely separate from every other limb of our justice system?

Hon MARK BURTON: I will be happy to get the member an answer to that question, but as I said to the member I have made no statement that is inconsistent with any previous statement.

Simon Power: Does the Minister intend to apologise to his colleague Damien O’Connor who, last November, stated: “there are no plans to build more prisons in light of these latest expanded prison population figures”, forcing Mr O’Connor into an embarrassing U-turn when he was forced to state last Wednesday that he is now determined to build only what is absolutely necessary?

Hon MARK BURTON: I will try again to point out to the member that the point of annual forecasts is to provide annually updated information. The Minister at the time no doubt based his statement on the best available information at the time. I have just released the new information.

Nandor Tanczos: With regard to the prison population forecast, does the Minister support the call of the Salvation Army for politicians to stop using crime as a political football, to sit down together and start talking about what actually works to reduce crime, and to work towards a cross-party accord; if he does support that call, will he give his commitment to this House to participate?

Hon MARK BURTON: I think the notion of putting aside playing political football with this issue is highly desirable, but I see little likelihood of it, given the performance in the House this afternoon. However, this Government is committed to looking at a wide range of interventions that are effective across a wide range of offenders.

Ron Mark: Why does the Prison Population Forecast 2005 report make no mention of the increasing number of foreign nationals held in our prisons, given that we are currently holding more than 400 at a cost of $23 million a year, which has climbed from a figure of 270 in 2002, and has the number of foreign nationals held in our jails been forecast for the future; if so, what do the forecasts indicate in terms of cost and bed spaces?

Hon MARK BURTON: As I indicated to the member in an answer to a previous question, the collection of data does not include nationality. However, if the member wants to follow up with a question to my colleague Damien O’Connor in terms of information held by the Department of Corrections he may, in fact, get some of the information he is looking for.

Police Act—Review Proposal

10. MARTIN GALLAGHER (Labour—Hamilton West) to the Minister of Police: Has she received any reports on the reaction to the proposed review of the Police Act 1958?

Hon ANNETTE KING (Minister of Police): I am pleased to advise that I have received reports of a very positive reaction to the review of the Act, which is nearly 50 years old. The police generally are very supportive of the initiative, but I also want to thank other parties in this House for their openness towards the review, and I also welcome the support of the New Zealand Police Association and media commentators. The review is a great opportunity to bring the police legislation up to date and into the 21st century.

Martin Gallagher: What is the time frame for the rewrite of the Police Act?

Hon ANNETTE KING: The intention is to have a draft bill by November 2007, for introduction into Parliament in early 2008. The review will replace the need for the Police Amendment Bill (No 2). I think the police give New Zealanders outstanding service, often in difficult situations, and they deserve to have the best and most modern legislation. The review will enable the police themselves to have a real input into the way policing develops in this country.

Simon Power: Does she agree with Police Association president Greg O’Connor, who said on 7 March: “The Association does not believe any major changes are necessary to ensure that the New Zealand public receive a good service and will be keen to ensure that the legislative process is not used in an endeavour to cover for resource shortfalls.”; if so, what reassurances can she give the association on that matter?

Hon ANNETTE KING: The assurance I can give the association is one I have given it at meetings and publicly: that this Government, in conjunction with New Zealand First, is providing the resources for 1,000 more sworn police and 250 more non-sworn police, over the next 3 years, at considerable cost. This review is not about resources; it is about rewriting the Act. I am pleased that the Police Association agrees with it. The association may well be right to say that we do not need a lot of change, but let us go through the review in order to see what change we do need to bring the legislation up to the modern era.

Disability Issues, Minister—Advocacy Role

11. Dr PAUL HUTCHISON (National—Port Waikato) to the Minister for Disability Issues: Can she confirm that as Minister for Disability Issues her role is to be an “advocate for disabled people”?

Hon RUTH DYSON (Minister for Disability Issues): Yes, and I am proud of significant achievements in this sector since the Labour-led Government came into office. It was the first Government to recognise the need to address disability issues through such measures as the establishment and implementation of the New Zealand Disability Strategy.

Dr Paul Hutchison: Does she consider that the auditing systems currently in place to monitor disability services with regard to quality of life need improvement, in light of recent concerns around Focus 2000 that involve deaths, maltreatment, understaffing, and poor-quality services; if not, why not?

Hon RUTH DYSON: I am yet to see any auditing process that does not offer opportunities for improvement.

Dave Hereora: Has the Minister received any reports at Government level concerning advocacy for people with disabilities?

Hon RUTH DYSON: Yes, I have received a number of reports, although none are from the 1990s because there was not any advocacy then for disability issues. However, I have received a recent report that regards advocacy for disabled people as too PC and divorced from the mainstream. That report concerned comments made by the PC eradicator and anti-advocacy campaigner, Wayne Mapp.

Dr Paul Hutchison: Did she receive a letter from Standards and Monitoring Services on 8 July 2003 notifying her that the board unanimously decided that the Ministry of Health designated audit agency approach is “completely incompatible to enhancing the quality of the lives of individuals who use services”, and why has she done nothing to heed their warnings, when every day “abuse” is going on?

Hon RUTH DYSON: I do not have a recollection of receiving a letter on 8 July 2003, but if the member says I did, then I would certainly take his word for it.

Dr Paul Hutchison: Did she receive a second letter from Standards and Monitoring Services on 1 November 2004, which stated: “You should be aware of the huge levels of dissatisfaction in community residential services.”, and why has she, as the advocate for the disabled, stood silently by amidst revelations of untimely deaths, maltreatment, and abuse?

Hon RUTH DYSON: Again, I take the member’s word that I received a letter from Standards and Monitoring Services on 1 November 2004. That would be the first and, I assume, the last time I would ever be accused of standing silent while the abuse of any disabled person continues. That member knows that that accusation is wrong, and, frankly, I expect to receive a higher quality of question from him than I get from his colleagues.

Dr Paul Hutchison: What does she intend to do about improving quality assessment, when on 25 February Lorna Sullivan, who is an executive member of the Assembly of People with Disabilities, said: “We see day after day providers that have got their compliance audit hung on the wall, where people are neglected, where people’s lives are being wasted, people are degraded—just systemic abandonment.”; or does she think that what Lorna Sullivan said is untrue?

Hon RUTH DYSON I have never disregarded anything that Lorna has said to me on the many occasions over the last decade that I have spoken to her. Lorna’s views are very well represented in the document I launched, To Have an Ordinary Life, which shows the difference between compliance with a contract and the aspiration of many disabled people to live a far better quality of life than that. So what the member is talking about is not systemic abuse, at all; it is opportunities that have not been taken under the current contracting model.

Dr Paul Hutchison: I seek leave to table three documents. The first is a letter from the director of Standards and Monitoring Services, dated 8 July 2003, stating that the Minister’s audit agency approach is completely incompatible with enhancing the quality of lives.

Document not tabled.

Dr Paul Hutchison: The second document is from the director of Standards and Monitoring Services, dated 1 November 2004, stating that she should be aware of the huge level of dissatisfaction in community residential care.

Document not tabled.

Dr Paul Hutchison: The third document is a transcript from Radio New Zealand, where Ms Sullivan points out the great concern of systemic abandonment and neglect in the disability sector.

Document not tabled.

Hon RUTH DYSON: At the member’s request, I seek leave to table a transcript of an interview between Dr Wayne Mapp and Mr Sean Plunket of Morning Report, on Radio New Zealand, where Mr Mapp says: “That’s the fundamental problem with giving power to minorities, and what you essentially have to do is”—

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

BreastScreen Aotearoa—Capacity

12. DARIEN FENTON (Labour) to the Minister of Health: What progress has been made towards increasing the capacity of BreastScreen Aotearoa?

Hon PETE HODGSON (Minister of Health): Considerable. Breast-screening capacity has increased significantly since the age extension of the breast-screening programme. By the end of December 2005 over 200,000 women had been screened since the start of the age extension programme. That is a 21 percent increase in just 12 months.

Darien Fenton: Which communities have new breast-screening facilities?

Hon PETE HODGSON: New facilities were opened for BreastScreen Waitematā Northland in December last year and for BreastScreen Counties Manukau last month. A new purpose-built facility was opened in Palmerston North last week, and, in the course of this calendar year, a number of other purpose-built facilities will open. As well, there will be still more mobile units.

Dr Jackie Blue: Why does the Government not admit that it has acted irresponsibly, when it has known for over 2 years that by extending eligibility to BreastScreen Aotearoa more women will be diagnosed with breast cancer, and we still do not have enough people to treat these women?

Hon PETE HODGSON: Every time a screening programme is launched or extended, there has to be certainty of a high chance of adequate, appropriate follow-up treatment—whatever is needed. That is why this roll-out, occurring quickly as it is, did not occur instantly, for precisely that reason.

Tariana Turia: How will the Minister address the fact that Māori women have a 47.7 percent higher death rate from breast cancer than non-Māori women; and what is their access rate to breast screening?

Hon PETE HODGSON: I do not have the numbers to hand as to the access rate for Māori, but we know that it is lower than for non-Māori. We know that Māori women die partly because of their access to screening being lower. The Counties Manukau screening programme, as an example, is adamant that it can reach more Māori women in the extended age group sooner rather than later, and is committed to doing so. But I am pleased to advise the member that in some parts of New Zealand, including where I come from, the screening rate for Māori women has now reached the target. I do not know of any other indigenous population anywhere else in the world where that has happened.

Tariana Turia: Why is it that the Government accepts that so many women are losing their breasts because they cannot access the drug Herceptin?

Hon PETE HODGSON: I said in answer to an earlier question that Medsafe is due to make its decision available next week and that it is, to the best of my knowledge, the first regulatory authority in the world to examine the licensing of Herceptin. Therefore, anybody’s suggestion to the effect that this country is dragging the chain is demonstrably, palpably wrong. But I make a further point that if one wants to take a cost-effectiveness approach to this issue, then the member’s first question is a much more important one. Extending breast screening to a higher level of Māori women than we have reached at the moment will save a lot of lives.

General Debate

General Debate

Hon ANNETTE KING (Minister of State Services): I move, That the House take note of miscellaneous business. It is 21 years since I was first elected to this Parliament, and most of that time I have been very proud to work here. I am proud to be the member of Parliament representing the people of Rongotai, and to have the privilege to serve as a Cabinet Minister in this Government. I have debated hard, I have interjected with the best, I have received my share of insults, and I have handed out a fair few myself. I have laughed and I have cried in this Parliament, and I know that this is no place for the shy and retiring.

But I am deeply saddened by the political theatre that has played out in this Chamber over the past few months against David Benson-Pope. I am saddened, I have to say, that the cheerleader of that personal, nasty, and vindictive attack is Judith Collins, a woman with a husband and child. She stated in the Sunday Star-Times last week that “women … can be the fiercest defenders of the weak and vulnerable”, and that she wanted to “help women and children”. I am saddened because, in pursuit of column inches in the media and in justification for her elevation in the National Party over someone like Georgina te Heuheu, she has been prepared to expose David Benson-Pope’s wife and children to unjustified personal abuse and public attention. She has laughed and celebrated as she has made her despicable comments of “pervert” and “dirty old man”, and she has not cared about the impact on his wife and his children.

Judith Collins: I raise a point of order, Madam Speaker. I take exception to being labelled as someone who has used the term “dirty old man”. I think that that member should be asked to withdraw and apologise.

Madam SPEAKER: If the member says that she has never used that term, then her word must be accepted. I ask the member to withdraw that.

Hon ANNETTE KING: I accept the member’s word. That member called David Benson-Pope, in this House, a “pervert”.

Judith Collins: I raise a point of order, Madam Speaker. The Minister, who has been in this House for 21 years, was asked by you to withdraw. She did not.

Madam SPEAKER: I thought she had. Would she please do it again.

Hon ANNETTE KING: I withdraw, and the member does not like this, and she is not going to like this, because—[Interruption]

Madam SPEAKER: Would the Minister please withdraw clearly.

Hon ANNETTE KING: I withdraw. The member is not going to like this, because I am going to tell her she was prepared to call David Benson-Pope a pervert, not caring about the impact on his wife and children. Those are comments that New Zealanders know are not true, and all the while David Benson-Pope was expected to stay calm and aloof from the maelstrom that was swirling around his family, and as damage was being inflicted on the people he loves.

I know what it is like to have one’s family under the scrutiny of the media and the public, and I tell this House that it hurts like hell. One wants to protect one’s family and stop the pain, the embarrassment, and the attention they are getting, but one is not able to. I say to Judith Collins that I sincerely hope her child is never subjected to the sort of unjustified attention that David Benson-Pope’s family has had to endure because of her action. Unfortunately, she has set a new benchmark for our families in the future. She has said, by her action, that it does not matter who is destroyed or who is pulled down or damaged, as long as the end justifies the means.

At the end of the day, this whole, sorry saga has been about leadership. A decent and strong leader would have said: “Debate the issues, not the individual; focus on the policy and not the person.” But when put to the test of leadership, Dr Brash failed. He decided that he, too, would wallow in the mire of personal invective. The result is that he is a weak-looking leader and there is a fair dose of hypocrisy swirling around his comments.

I am really sad that Bill English, a man who has always previously defended the need to protect our families from the slings and arrows of this place, was dragged into the mud-slinging, as well. I believe the behaviour—

Hon Bill English: I raise a point of order, Madam Speaker. At no stage did I mention David Benson-Pope’s family. In fact, at no stage did Judith Collins ever mention David Benson-Pope’s family. I take objection to the member saying I was drawn into mud-slinging when I just asked questions in this House.

Madam SPEAKER: I thank the member. That is a debatable point and he will have an opportunity to reply.

Hon ANNETTE KING: The behaviour of Judith Collins, Don Brash, and Bill English over this affair has damaged them personally. Members can just ask the public. I believe it has damaged this Parliament, and it has damaged innocent New Zealanders. To David’s wife and two children, I apologise on behalf of this House. To the teachers, the children, and the parents of Bayfield High School, who have had to withstand unprecedented and unnecessary media scrutiny—27 parliamentary questions about their school, talkback chatter, and TV cameras—I apologise on behalf of this House. To the thousands of New Zealanders who have watched some of our elected representatives turn this place into the Colosseum rather than a debating chamber, I apologise.

On 12 March Judith Collins said she was going to carry on her attacks. On 14 March she said her campaign was over. She knows it was wrong, National knows it was wrong, and it has to stop.

Rodney Hide: I raise a point of order, Madam Speaker. While the Minister is on her feet and apologising, maybe she would like to apologise to Tukoroirangi Morgan and his family, Peter Doone and his family—

Madam SPEAKER: The member knows that that is not a point of order.

Hon BILL ENGLISH (National—Clutha-Southland): I noticed Dr Cullen sitting there smiling as he thought he was stepping through the final stages of his strategy to hit back. But, of course, the shot that Mrs King has fired is in the wrong place altogether. In the debate about Mr David Benson-Pope, his family was never mentioned.

Hon Annette King: Calling him a “pervert”?

Hon BILL ENGLISH: I say to that member that when Helen Clark put my children on TV and drew my family into questions in this House, I was a bit distressed about it, too. The House has always operated on an unspoken convention that we do not attack the members of other members’ families. At no stage during the David Benson-Pope debate did that occur. Who drew David Benson-Pope’s family into the debate? It was David Benson-Pope. He set out on a charm offensive—or, as one commentator put it, a “blub” offensive—and he decided that the best way to rebut the strong allegations of his dishonesty in this Parliament was to hide behind his family, to put his family in a Sunday newspaper, and to get them to talk on his behalf.

I have to say that it took a long time for even his hardened, cynical, political mates to speak on his behalf. They left it until the Thursday before David Benson-Pope’s family appeared in the media, after this House had been at David Benson-Pope for months—12 months since the first day he stood up and misled the House. He was asked a simple question as to whether he was aware of any complaints against him, and he said no, he was not aware of any complaints against him of any sort in his 24 years as a teacher. Since the day he said that, any number of people have been willing not just to make the allegations but to front up to the media—not just about what he did, but to confirm they had made complaints. As a number of members have said, they fronted up to the police as well and made their honest statements about what they believed to have occurred, and just about everything they said contradicted what David Benson-Pope told this House.

What undermines the House’s confidence even more is that in the end senior Labour members conceded it. The Prime Minister said he made an error of judgment, which for her is very strong language—that means he lied to the House.

Hon Dr Michael Cullen: I raise a point of order, Madam Speaker. That is clearly out of order, and the member should withdraw and apologise. He is the last person who should make that kind of allegation in this House.

Madam SPEAKER: Would the member please withdraw and apologise.

Hon BILL ENGLISH: I withdraw and apologise. Now we hear the innuendo from Dr Cullen that somehow I am the last person who should make allegations. I say to Dr Cullen that we have sat here for 6 years listening to the half-truths of the Labour Party, like the granddaddy of them all that we heard this year—when a complaint is not a complaint. Maybe he had a discussion with Bill Clinton when he was here. Members may remember his statement about it depending on what the meaning of “is” is. Well, it depends on what one thinks the meaning of “complaint” is. It is obvious for everyone to see.

A senior Minister of the Crown, who was questioned in a straight-up and honest way about his past actions and about his knowledge of them, made a statement to the House that has turned out not to be true. I say to Dr Cullen that no one in the Labour Government is willing to stand up and say that David Benson-Pope correctly made that statement to the House. In fact, I asked the Prime Minister a question last week—Dr Cullen was answering on behalf of the Prime Minister—which was whether the Prime Minister now believed the statement that David Benson-Pope had made to the House.

Rodney Hide: What was the answer?

Hon BILL ENGLISH: His answer was no.

Hon Members: Rubbish!

Hon BILL ENGLISH: Well, I ask members to look at the Hansard. He said no. Every member who was sitting here and heard question time last Thursday will recall that. He said no, he did not believe it. So if the Government does not believe him, why should the people of New Zealand?

Hon RUTH DYSON (Minister of Labour): It is really clear not just to me but to the majority of National Party members and to the country that Judith Collins not only got off her leash but she got off-message. She made a major tactical error, and it is really interesting that Dr Brash backed that tactical error right from the start. When a party has no leadership and no policy—

Hon Bill English: I raise a point of order, Madam Speaker. I am sitting here trying to listen to the speaker, and Dr Cullen is issuing threats across the Chamber that are personal to me. He knows as a senior member that that is thoroughly against Standing Orders. One is not allowed to threaten another member in any way that might constrain his or her ability to speak in the House. I ask him to withdraw those threats.

Hon Dr Michael Cullen: I issued no threat against the member.

Madam SPEAKER: I have to accept the member’s word.

Hon RUTH DYSON: That is the National party—it has no leadership and no policy. When it is clear to National and to the rest of the country that there is no leadership and no policy, then National members have to resort to personal attacks. That is the only time they are ever done, and National is doing them well.

New Zealanders will not put up with it. Our sense of fair play and decency is an intrinsic part of our culture. The robust nature of policy debate in this Parliament should play a big part in our culture, as well. Parliament could and should be a place for ideas, for challenges, for serious disagreements, and for debate—but for debate on policy and on the future of our nation. For goodness’ sake, that is why we were elected to represent people in this House. It should not be a place for scraping the gutter and regurgitating its contents in the Chamber.

The moves of Judith Collins, Bill English, and Don Brash over the last few weeks have chewed up the last of their political capital. For National’s leader to get sucked into this when he is struggling for his own political survival shows either desperation or a complete lack of judgment—perhaps both. Or perhaps he has fallen for what the Listener describes as Judith Collins’ buttering up of the leader—not a pleasant thought. The Listener quotes: “Privately, some colleagues profess exasperation at what they say is Collins’s helium-filled ego, her buttering-up of the leader, and a tendency to go off-track when fronting important battles.” That is just what her friends and colleagues say.

So what do her political idols say? Can I ensure that it is placed on the record, in case anyone has any doubt, that I have no points of policy agreement with either Ruth Richardson or Jenny Shipley, but on this point I agree. Ruth Richardson consistently opposed any mud-slinging, gutter politics. She said that a National Government would not engage in disgraceful personal attacks but that it would attack the real causes of the problems. Jenny Shipley also consistently maintained high personal standards. She made it very clear that she would not support personal attacks. I opposed both those women on every policy point I can recall, but they made a significant contribution to this Parliament. They both left this Parliament with their heads held high because they had never breached their own high standards of personal behaviour. Judith Collins, in contrast, has not only breached standards but acknowledged in a Sunday paper that she thought she had gone too far, then said that despite that, she would carry on.

I do not know what happened at National’s caucus meeting on Tuesday, but clearly the leash was put on. But I do not think it will last long. In order to get out of the gutter members have to have thought about some policies. They have to have developed some policies that their caucus agrees on and that they can argue robustly in this House. There is no leadership in the National Party. There are no policies.

I may have breached some of the integrity that I have on policy issues by referring to both Ruth Richardson and Jenny Shipley, so I just compound the problem by saying that I have found a policy point of agreement with Richard Long. The headline to Richard Long’s article in yesterday’s Dominion Post stated: “Nats must cut Benson-Pope loose and get to the real issues”. He said that the electorate wants a concentration on the real issues. I think, on that single point, Richard Long was right. New Zealanders will not accept, nor should they accept, this Parliament becoming a place for the regurgitation of what is scraped out of the gutter by Judith Collins and her ilk. It is time for us to get back to the real issues.

Hon PETER DUNNE (Leader—United Future): I say to both sides of the House that the events of today and recent weeks bestow no credit at all on any of those involved. In the interests of the people of this country, the message must be that we focus on some real issues and get away from this personality-driven attempt to destroy everyone simply because we might disagree with their policies. Let us argue the policies and the merits and demerits of those.

In that regard, a week ago today the Wellington region received one of the best pieces of news it has heard in a long time—one it had been waiting for—that the report of the hearings review subcommittee overwhelmingly and unanimously recommended that the construction of the Transmission Gully highway proceed as a matter of priority. The only person who seems to be out on a different limb is the kamikaze Mayor of Wellington. I would have thought that she might care to learn a lesson in basic politics: count the numbers. If one is on the losing side, maybe one needs to look at oneself. Clearly, that is what the mayor should be doing.

I speak with some feeling on this issue, because I have been intimately involved with it for a large number of years. I brought the “Do It Now” petition to Parliament in 1999, I introduced special legislation in 2001, and I have worked for a long time with all of the groups that have had an interest in this issue. The sense is overwhelming that a settlement has now been reached—that now is the time to move on, make the progress, and get this development, which has been on the Wellington regional agenda since 1939, under way.

Yesterday in the House the Minister of Finance made three very important points. Firstly, he confirmed that the funding that was previously earmarked for the coastal highway would, pursuant to the agreement with United Future, now be available for Transmission Gully. Secondly, he confirmed that it would be inconceivable for any government, local or central—the Mayor of Wellington notwithstanding—to overlook the overwhelming depth of public opinion in favour of the proposal proceeding. Thirdly, he made the point that there were no legal impediments to funding Transmission Gully over a longer period of time, thus confirming the comments made by the Chief Executive of Transit New Zealand last Friday that funding is not the issue.

So we are at the point now where all of the obstacles have been removed. What is needed is the next step in the process—and I am confident it will happen—which is an affirmative vote from the Wellington Regional Council. Then we can embark upon bringing this necessary infrastructure development to fruition.

I acknowledge the work of a lot of people who have brought us to this point. I acknowledge the fact that my electorate neighbours, Winnie Laban and Darren Hughes, have been very ardent advocates and supporters of, and activists for, Transmission Gully. I acknowledge the work of significant numbers of members of the Wellington Regional Council, the Wellington chamber of commerce, transport organisations in this city, and the vast number of individual citizens who have signed petitions.

Hon Member: And Mark Blumsky.

Hon PETER DUNNE: The member talks about the previous Mayor of Wellington. I remember talking to him about the issue. He told me that Transmission Gully would cut travel time to the city by a mere 5 minutes and therefore was not worth it. It seems to be endemic in mayors of Wellington.

Now is the time to move on, make progress, and ensure that the decisions that have now been reached on the best possible advice are acted upon. If we are able to achieve that—as I am extremely confident we will—we will not only secure transport access to this city but also demonstrate that we are serious about trying to curb what is a major infrastructure deficit right across New Zealand, be it roading, rail, electricity, aviation, or other modes of transport.

What we need to be starting to embark upon in New Zealand is a real concentration on reinvesting in infrastructure, and improving it so that the quality of services that can be delivered to our citizens is intensely increased. If we do that, we will make a significant impact. Our region and our country will benefit, and we will lift ourselves out of the mire within which we have become enmeshed in recent times, and I think New Zealand will welcome that.

Hon Dr NICK SMITH (National—Nelson): There are two ways in which we can tell that a Government is in its dying phases, and this Government is in rigor mortis. The first is that it starts crying foul about parliamentary accountability. I am proud to have Judith Collins as my bench mate. She had Lianne Dalziel sacked because she had misled the media—and the Prime Minister said so. We also had David Benson-Pope held to account because he misled this Parliament—and that fact, too, has been confirmed by the Prime Minister. That also came about because of the diligent work of my excellent bench mate, Judith Collins.

But there is a second way in which we can tell a Government is in its dying stages—that is, it is reviewing everything. In any area of Government policy where there is any sort of problem, we have Ministers saying they will have a review. We have added them up. There are 69 reviews—

Paula Bennett: How many?

Hon Dr NICK SMITH: —69 reviews going on in the Government right now. Some of the reviews are occurring because Ministers have got themselves in a pickle and they want a diversion. Some of the reviews are occurring because of the Government’s boomerang policies. The chickens are coming home to roost on bad policy decisions that have been made previously. And the third area of reviews are occurring because this Government is so bereft of ideas and so lacking in direction that it has rushed off to the public service to try to come up with some fresh, new ideas that might explain where it is going.

Let us take the Whangamata marina decision made by Chris Carter, which was pretty dodgy given that he had had a wee chat to his mate Bob Harvey, as was confirmed in the House today. To divert attention away from that decision, on Tuesday he announced that a review of coastal policy would be held. The problem was that he forgot to tell Dr Cullen. We asked whether there were terms of reference for the review. The answer was “No”. We asked whether there was a timetable for the review. The answer was “No”. Well, that announcement was nothing more than a diversion, and it is not the only one. Steve Maharey is on the back foot over text message bullying. What did Steve Maharey announce as the great new initiative to save kids? He said: “Let us have a review.”

Then we come to the whole mess over the Kyoto Protocol. In fact, the billion-dollar bungle there is so big that we will not have one, two, or three reviews—we are to have five reviews. There will be a review on forestry policy and a review on electricity policy, and a review is going on over the way the numbers are done. The Government has an absolute policy vacuum, and the problem, I tell the ladies and gentlemen of this House, is that all those reviews just create uncertainty in the electricity sector at the very time we need new investment.

And there is another mess-up from Chris Carter. Do people remember when we had that knee-jerk reaction to that dear little girl who was hurt by dogs? Suddenly, we were to have the microchipping of all dogs—and now we are having a review of the policy of dog microchipping, to fix up that mess that Chris Carter has on that front.

There is another one. We all, as members of Parliament, are aware of the trauma of families that are caught up with the problems of leaky homes—thousands and thousands of them. They were told by the Government 3 years ago that it had set up the Weathertight Homes Resolution Service and the problem would all be solved. Well, in July last year Chris Carter announced there would be a review and that those carrying out the review would report back in October. Well, it is now March of the next year. Are there any results from the review? No, there are not, and, in fact, we have no idea of what the Government will do.

Then we could take areas like tax, and my colleague John Key will talk about all the reviews that are going on in that area. If we take my colleague Judith Collins’ area, there are many reviews going on in social welfare, because the Government does not know what it is doing. Equally, my colleague Paul Hutchison will be speaking on reviews with regard to health. If we take an area like immigration, the Government has three separate reviews going on.

Hon Member: No surprise.

Hon Dr NICK SMITH: That is no surprise. Tens of thousands of people are abandoning New Zealand, and there is a reduction in the number of people who are choosing to migrate to New Zealand. We even have a review, which was meant to report in November, in respect of immigration and Phillip Field.

Hon LIANNE DALZIEL (Minister of Commerce): Last week women gathered around the breakfast tables to celebrate International Women’s Day. I attended two of those breakfasts as Minister of Women’s Affairs. It was a wonderful day to set aside political differences, to reflect on the achievements of women in New Zealand, and to contemplate the improvements that are still to be made. I was proud to identify how well women have done here in New Zealand. In playing leading roles in politics, in the head of State role, and also in our largest corporation in the country, women have done very well. But when we look down a layer—and this was the question I asked—where are the women who are coming through? Where are the women who will take up leadership roles in the future?

I also asked whether the young women who are coming through to those roles know how recently some of the rights we take for granted today were legislated for, many of them in my lifetime. Equal pay itself came in in the 1970s, access to safe, legal abortions was passed in 1977, discrimination based on gender was made unlawful in 1977 with the Human Rights Commission Act, rape within marriage was not an offence until the 1980s, and domestic violence was not taken seriously by a range of Parliaments for a number of years. The rights that women take for granted in this country today have been hard fought for and not easily won, but they are just as at risk of being taken away from us unless we know what they are and how to stand up for them.

I believe that the National Party has a shameful record in terms of women in Parliament and a shameful record in terms of women in senior positions, both in Cabinet and in the shadow Cabinet. It has punished the last two women MPs for the crime of not agreeing to policies they were not consulted on, despite being the spokespeople on those policies. The heyday for the National Party was when the Minister of Finance was Ruth Richardson and Jenny Shipley was the Minister of Social Welfare and Minister of Women’s Affairs. They were women who dominated the political landscape. I did not agree with their policies, nor did I admire their policies. But I have always admired women who have been prepared to stand up for what they believe in, to argue the issue, to debate the policy, and to not play personal politics with individuals.

I did not agree with Ruth Richardson’s and Jenny Shipley’s policy prescription for the nation in 1990. We had the benefit cuts, we had the Employment Contracts Act, and we had the 1991 Budget, which unleashed National’s competitive market model on health, housing, education, and accident compensation—everything that underpins a decent society, which the leader of the National Party had said he would bring to New Zealand in 1990. We had been promised that in the election campaign. It was a low point for women—that is the point that I am making—in terms of the impact of National’s policies on families, especially in State housing areas.

But in all that time of robust debate—and the debate was robust; I was there—I do not remember the two chief protagonists for the National Government, Jenny Shipley or Ruth Richardson, personally attacking anyone or exposing their families to the kinds of things that we have now seen in this House. Ruth Richardson said before the 1990 election that a National Government would never engage in disgraceful personal attacks but instead would attack the real causes of problems. Jenny Shipley is also on record as saying she did not support personal attacks.

The National Party has now got itself into a situation where its leader does not assert his abhorrence for what has happened in this House—and what we have heard was abhorrent. Dr Brash’s predecessor—and, I am sure, his hopeful successor—now says that because Judith Collins did not say, when talking about David Benson-Pope, that his children’s father was a pervert, it was OK to call David Benson-Pope a pervert. Well, that was not OK. Everyone in this country knows that Judith Collins went too far in this House—everyone except the National Party. The National Party is sticking up for that appalling behaviour, and I cannot understand why the leadership of the National Party is adopting that position. I say “the leadership” because I know that there are MPs on the Opposition side of the House who agree with me that Judith Collins went too far, and who are appalled at what she did in this House. They are embarrassed that a woman could sink to such depths and that the leadership of the party is prepared to condone it.

What crocodile tears we have had from the Opposition side of the House! I have been on the receiving end from members on that side, too.

JUDITH COLLINS (National—Clevedon): I have just been recalling how and why the previous speaker, Lianne Dalziel, got sacked as a Minister. It was, of course, because she not only misled the media but also bullied a little 16-year-old girl who had been raped continuously by members of her family from the time she was 8 years old, and that member is currently in court in a defamation proceeding from the lawyer she tried to pick on. That is why that member got sacked. How dare she lecture this House about women’s rights when she behaved as she did toward a little girl who had been raped for years! I say to her, thanks very much—she has just reminded me why she is not worthy of the job.

We have had a lot of fun today. We understand that the Government does not want to talk about policy because it does not really want to talk about the reviews. But there are—how many?

Hon Dr Nick Smith: 69.

JUDITH COLLINS: There are 69 reviews going on currently under this Government. That means there are 69 reviews going on instead of 69 decisions being made. The Government is so bereft of leadership that it cannot make a decision. It was extremely interesting today to be lectured on leadership by Ruth Dyson. What is she leader of? Can anyone remember? That is right—Child, Youth and Family Services.

Hon Bill English: The Labour left.

JUDITH COLLINS: Yes, the Labour left within Child, Youth and Family Services. That poor department—left to Ruth Dyson! That department is so bad, so lacking in leadership, that it now has to be merged with David Benson-Pope’s ministry. It is that bad! Ruth Dyson is a Minister who stood in the House and said that she actually agreed that the department was moving towards performance excellence. That is what she told this House—of course, it is not only performance excellence; it is also a culture of excellence, and, at the same time, it is a culture of resistance. She cannot have it both ways. That Minister, Ruth Dyson, was embarrassed yesterday. She was embarrassed by her own words, and she was embarrassed by the fact that she did not want Child, Youth and Family Services to merge with the Ministry of Social Development. She did not want to have to admit that her leadership was so slack and so pathetic that her department has to be merged with David Benson-Pope’s ministry. Yet she was caught out.

She has now had a report come out, which the Government did not want us to table yesterday—strangely enough, even though it is its own report—and she said there—

Hon Lianne Dalziel: It’s been tabled.

JUDITH COLLINS: No, they did not want it tabled. They objected.

Hon Lianne Dalziel: It’s been tabled, you idiot.

JUDITH COLLINS: I raise a point of order, Mr Speaker. I take offence at the comment from that member, the Hon Lianne Dalziel, and I ask that you ask her to withdraw and apologise.

The ASSISTANT SPEAKER (H V Ross Robertson): Members make disparaging remarks about each other all the time. It is a personal reflection that is out of order.

JUDITH COLLINS: As a personal reflection.

Hon Mark Burton: With respect, Mr Assistant Speaker, I note that the member started her contribution with a list of such insults directed at the member—

The ASSISTANT SPEAKER (H V Ross Robertson): Can I just say to members that points of order are to be heard in silence, and they must be terse and to the point.

Lindsay Tisch: Point of order—

The ASSISTANT SPEAKER (H V Ross Robertson): I am already dealing with a point of order, Mr Tisch. I say to the Minister, Mark Burton, that he has made his point.

Simon Power: I raise a point of order, Mr Speaker. The difficulty that we get into with the comment that was made by the Minister is actually twofold. Firstly, the term used would be considered to be unparliamentary, and, secondly, the way in which it was phrased dragged you into the debate. On that basis, the member should withdraw.

Hon Lianne Dalziel: I withdraw and apologise for bringing you into the debate, Mr Assistant Speaker.

JUDITH COLLINS: No, no—that is not good enough.

The ASSISTANT SPEAKER (H V Ross Robertson): The member must just stand, withdraw, and apologise.

Hon Lianne Dalziel: I withdraw and apologise.

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

JUDITH COLLINS: I get back to the real issues, which are what has been going on in Child, Youth and Family Services. Let us have a look at some of the reviews that have been going on. We have had the external review in 2000, with Youth Court judge Michael Brown. We had the 2003 baseline review, and at the moment the new service progress report is due—that is for the Ministry of Social Development. It was due in February 2006, and what day is it today? Oh—it is March 2006. Of course, that was formerly the sickness benefit and invalids benefit strategy. We also have, in the Ministry of Social Development, the full outcome evaluation of the new service model prototype due in June 2006. That will be a doozy. We have the Working for Families review, the preliminary information due in July 2006, with another review at the end of this year. We have the value for money review. Well, that will be helpful! That is called the “new comedy review”. We also have the Ministry of Social Development’s client debt strategy and debt establishment review project—bracket, date to be advised, bracket. Of course, we know what that is all about. That is because there has been a huge blow-out in debt in the Ministry of Social Development’s clients.

That is just a little sample of the reviews. But what is more important is this: who will do a review that actually asks what is in it for the kids of this country? Who will put our little kids first? Who will put the children in this country first—the children who are abused by people who should be looking after them and looking after their care? Who will do that? Only a National Government will.

This Labour Government is so full of, let us say, review—that is all it can do. In the House I cannot use the word I want to use. This Government is absolutely full of hot air. Its members are always talking about things but never actually doing them. They cannot keep blaming the National Government. I heard Ruth Dyson yesterday blaming the National Party for the last year because we put the Department of Child, Youth and Family Services under stress. No—what has put that department under stress is a hopeless Minister.

Hon CLAYTON COSGROVE (Minister for Building Issues): I pick up where Dr Nick Smith left off, and I have to say that one can always tell when an Opposition is in deep trouble. One can always tell when an Opposition is hollowed out, has no ideas, and is bereft of any depth. That is the time when an Opposition starts wading through the sewer.

I am reminded of a guy called Senator Sam Ervin, who on 15 November 1954 made a very interesting speech to the US Senate. He told a story, and I think it is quite apt: “A young lawyer went to an old lawyer for advice as to how to try a lawsuit. The old lawyer said: ‘If the evidence is against you, talk about the law. If the law is against you, talk about the evidence.’ The young lawyer said: ‘But what do you do when both the evidence and the law are against you?’. ‘In that event,’ said the old lawyer, ‘give somebody hell. That will distract the attention of the judge and the jury from the weakness of your case.’ ” That speech was made by Senator Sam Ervin on 15 November 1954 when he tore Joe McCarthy apart on the floor of the US Senate.

I say to this House—and I made remarks last week—and particularly to some of the newer members that this Parliament is an institution that generally people in this country respect. I will admit that the public may not respect some of the people in it from time to time. They may not respect some of the policies, or the views, or the debates from time to time. But when I brought schoolkids in here, as a constituent member, I realised that the one thing they respect and their parents respect, and the one thing they live in awe of, is this place. [Interruption] That cynical, stupid comment from the numb member sums it up. The one thing that children and their parents are in awe of is the institution that is our Parliament. I refer to the plaques around the walls. Generations fought and died to preserve that thing called a democracy, and to allow us to stand up with freedom of speech and put our views forward. That is what people respect.

I invite the lawyer from somewhere up north, Judith Collins, to reflect on that quote, and I invite her to go and read Sam Ervin’s speech of 15 November 1954. We all know about the McCarthyism era. We have New Zealand’s version of Joe McCarthy here: Rodney Hide. And I wonder what his legacy will be. What will he tell his children and his grandchildren about his legacy when he leaves this place? Will he talk about the legislation he passed? Will he talk about the great issues he addressed, and the people he helped? Or will he sit down one day with his grandchild on his knee and admit that about the only thing he contributed to our democracy was to wade through the political sewer, slop around in the muck a few times, sleaze and crawl his way out on his hands and knees, and put another notch in that enormous belt of his?

Rodney Hide: He’s jealous.

Hon CLAYTON COSGROVE: Jealous? I would rather be jealous of Satan than of that member. No one in the House is jealous of that member. That member will say to his grandchild that the secret to his success was that he took a once-great party called the ACT party, which siphoned millions of dollars out of the business community—never was more money spent on such a lost cause—and reduced its numbers to the current lonely two. That is the legacy he will be able to tell his grandchild about.

I also wonder what legacy Dr Brash will tell his children about. Will he tell them about the once-great days when he portrayed himself as a sort of naive Jimmy Stewart—Mr Smith Goes to Washington—for a number of years? And that then he was tempted by the—what is the biblical phrase, something about a serpent and an apple? I do not know; I have not been to church lately. He was tempted by the serpent with the apple. He waded into the sewer. He will live with the stench of that politics for the rest of his days. The biggest review that is now going on in the National Party is the one about leadership. That is the biggest review that is going on, and I invite members to think carefully about it in order to preserve the institution of our Parliament.

JOHN KEY (National—Helensville): What an interesting afternoon it has been in Parliament. We have had the Labour Party dispatch three women—Annette King, Ruth Dyson, and Lianne Dalziel—to do a hatchet job on my colleague Judith Collins. That was their job. That was the message from the ninth floor. Not one of those speeches asked whether Judith Collins had asked the wrong questions of David Benson-Pope. Not one of those speeches from that side of the House mentioned whether Judith Collins’ questions were not worthy of asking. Not one of those members asked the question whether for the last 12 months David Benson-Pope has done everything he possibly could to obfuscate, to not answer the questions, or to not front up. Not one of those members mentioned whether it was a little odd that David Benson-Pope thought it was more important to have lunch with John Cleese, the “Minister of Funny Walks”, than it was to come down to the House and front up to the allegations. Not one of those speeches had anything to do with that.

What they said was that Judith Collins’ questions in the House had hurt David Benson-Pope. They did not say that the questions were wrong, that they were not worthy of an answer, or that they had taken too long to be answered; they said that they had hurt. That is interesting, because it comes on the back of a week when we have had Michael Cullen—and he was in the House when those speeches were being given—cuddling his “dirt file” and making accusations and innuendo about the National front bench that he cannot substantiate. When Audrey Young put the hard question to him before caucus yesterday and asked him to put up or shut up, he did not have an answer for that. He said she should just pick up the latest copy of North and South and have a look at me cuddling Molly the dog: “I want you to remember that. Don’t have me cuddling the ‘dirt file’; I’m happy to throw you the accusations.”

Well, if Michael Cullen and the Labour Party want to get into whether the House is brought into disrepute in debating the issues, then I say to him “Bring it on.” I encourage any member of the House to go back over the last 4 years and look at every single press release that Michael Cullen has issued in the finance area. Every one of them attacks me personally. They do not debate the issues. They do not ask whether they are right or wrong. There is a reason that Patricia Herbert left Michael Cullen’s office. She refused to keep writing the dirt that Michael Cullen wanted her to write, so he hired Mike Jaspers—a guy I went to school with; we were mates—and told him: “Mike, you’re junior round here now, and you’ll write the things I want you to write.” So if Michael Cullen and Labour want to have a new standard in the House, then I say “Good on you!”, but they should start with the Deputy Prime Minister and stop all the muckraking that they do on that side.

While they are at it, they should apologise to Jenny Shipley for the way they treated her. They should apologise to Tuku Morgan. And they should apologise for all of the other things that they have done in the House. Personal attacks are an art form that started with the Labour Party. Trevor Mallard, Michael Cullen, Phil Goff, Steve Maharey, Clayton Cosgrove, and all the rest of them lead the pack, and they do not like it when it gets dished up back at them. They do not like it. Well, this is the time for them to get a taste of their own medicine.

As my colleague the Hon Nick Smith said, when one does not have good ideas one starts a review. In the finance area, Michael Cullen has never had a good idea. That is why he is reviewing the whole thing. He is reviewing the money coming in—the tax system. He is reviewing the money going out—with the razor gang. He is even reviewing the money that is rolling around and sloshing around in the system, with monetary policy. He is reviewing every part of the finance system. In a few years’ time, what will be reviewed will be the Government’s performance, and I think that we will find a very different answer.

Let us look at the business tax review. Members may recall the Budget in 2005.

METIRIA TUREI (Green): There is a growing drive in this country to privatise our coastlines and our marine areas. The Whangamata debate is a typical example of that drive to privatise, and of the very queer hysteria that arises when public space is protected for public use.

Whangamata is a beautiful area and one of the most popular beaches in New Zealand. It has safe swimming, great surf, and fabulous fishing. It is a wonderful example of the crucial interplay of wetlands and coastal areas. In the estuaries, there are vital seagrass beds that act as a critical fish nursery. The shellfish beds are important as a food source for the hapū and the whole community. The estuary is the only one in the whole Coromandel Peninsula that is entirely free from invasive species. It is an area of special significance that is highly valued by the mana whenua, the local community, and everyone who goes there.

But much of the wetland and the saltmarsh in the area have already been lost to growth and development. There is increasing degradation of the estuaries and the necessary functions they fulfil for the marine ecology in that area. Sediment build-up, the churning up of the seagrass beds by motor boats, and dredging of the shellfish beds will destroy that area forever. Now, because of the Minister of Conservation’s decision, that area has been kept safe for everyone to use as a food basket, as a safe place for the family to holiday, as a national resource, and as a national treasure. Yet we face this strangely hysterical response from those who want to privatise it. With Nick Smith leading the hysteria, there is a backlash against the protection of public access to the foreshore and seabed.

We must return to the whole foreshore and seabed debate of just a few years ago, when the issue of whether collective shared Māori customary rights—not private, personal, individual rights, but customary, collective rights—should be upheld was attacked by the rhetoric of the public interest. Both Labour and National used rights of access, the notion of the New Zealand way of life with picnics and swimming, as reasons to keep hapū and iwi from having any tikanga interests in coastal areas.

National’s Nick Smith was especially vocal about those public rights. “The beach is the core to being a New Zealander.”, he said. “It is our right to grab the picnic bag, or the barbecue, and go to the beach.”, he said. Yet on this issue of Whangamata he staunchly defends the private rights of some to acquire public property and to restrict public access. Nick Smith wants to take from everyone, so that just a few can have what is now—already—still everyone’s. We must choose to reject the hysterical and extremist pursuit of development at any cost that is being defended by National. We can have a process for growth and development of our areas and of our economy that does not steal from the public, and that does not destroy our environmental values. We must stop the private capture of public space.

For that, the Greens appreciate the Minister of Conservation’s position. The Opposition has been especially critical of Minister Carter, and has also been talking about former Minister Sandra Lee’s decision to refer a similar matter back to the Environment Court. But National is not telling New Zealanders that the Minister is legally prevented from referring this matter back to the court. The legal circumstances of this case are very different from those of that earlier case. Nick Smith is failing to tell everyone that, because it does not fit his support of development and growth above all else. It is a terrible shame to see this kind of failure to understand the extent to which New Zealanders value the public access, the public entitlement, the coastal environment, and our way of life, by a party that supposedly defends it. In fact, its members right now, in their public defence of the private rights of some, are advocating the theft of public space. We are very pleased they have failed in that cause, and we call on New Zealanders to remind National and others that it is, indeed, a right of the public to have access to our environment.

DARREN HUGHES (Labour—Otaki): The point that Labour has been trying to make in the House today is that, as members of Parliament, we all have two roads we can go down in terms of our conduct in this House. It is fair to say that everybody in Parliament, on every side of the Chamber, could throw around all sorts of things, if that was what we decided to do, and spend all our time in this House yelling and screaming at one another. But the reality is that we have seen in the last hour in this House a lot of energy, a lot of anger, and a lot of emotion because of the way in which the debate has gone. I think there is a call on all of us to stop and reflect about the things we are prepared to do and say in order to get a headline, and I think the general consensus in the House is that in the last little while things have gone far too far in relation to some of the language that has been used about an issue that has been debated.

I do not intend to get into the issue, but I do say that the language members of Parliament use determines the conduct, the standards, and the behaviour of this Chamber. One thing that is pretty clear is that a whole lot of stories about Mr Benson-Pope have been distorted in this Chamber by members of the Opposition during question time in a way that has caused a lot of hurt to his family and brought his professional integrity into disrepute. It is pretty clear, from what nearly every one of his students has said, that this guy was a great teacher. He was a good teacher, who did a good job. We have had lots of correspondence from former students and their parents to say that this person was a good teacher who did a good job. In the course of a political argument, a whole lot of stories came out and were distorted. They were not genuine and not true. They were phrased in a way that put the worst possible light on somebody’s integrity and personal standards of behaviour.

Some of the words used went far beyond what we would normally expect in the rational kind of political debate and exchange that we have in this place. Of course we clash with one another. I tell members a secret: Labour members do not like National members. But here is another one: they do not like us, either. That is fine; we will come in here, week after week, and we will throw stuff at one another and have a great exchange of ideas. But what matters is how far we are prepared to go, and what language we are prepared to use to get that headline.

I noted that when Mr Key was speaking before, he said that this was a big matter and he was very proud of the way his party had conducted itself on it. But when he came to a town in my electorate, to Waikanae, he said that the whole affair was a sideshow, with no effect on the next election. He said that while the issue was a matter the Opposition needed to exploit, voters wanted promises and policies that would make them feel good and positive about where New Zealand was heading. I agree with John Key, the member for Helensville, on that—that is absolutely right. He was quoted in the Kapiti Observer as saying what a sideshow it had been.

That is why it has been a bit rich to have the response from National today. Its members have been sticking up for and defending their behaviour and their colleagues on this point. It was clear to all of us throughout the adjournment that wherever we went, and no matter what kind of audience we were in front of or group we were visiting—

Hon Dr Nick Smith: You were in trouble.

DARREN HUGHES: Mr Smith says we were in trouble. That is not correct, at all. I think Nick Smith should say that nobody came up to him and said that they were really happy with the language being used in Parliament, or that they thought the way members of Parliament were talking about one another was fantastic. That is just not right. I have heard Dr Nick Smith interjecting, but I suspect he does not reflect the mainstream view within National. I think, when we all came back here for our caucus meetings, we said there had been a certain reaction in New Zealand, and people did not like us going as far as that. I think that is the right thing; we should focus on policies, and on being positive about where New Zealand is heading—as John Key said when he visited Waikanae. He was clearly distancing himself from some of the language and behaviour that had gone on. Leadership is needed to make sure things do not descend any further.

So our debate has to be more about policy; it has to be less about the way we phrase our attacks on one another. Debate should be policy based, with a bit of jiving here and there, of course, against one another, but we do not need to do anything in a way such that when our families switch on television they feel embarrassed and ashamed about what we do for a job. We should not behave to such an extent that when members return to their families they have to explain some of the things people are saying about each other in here, because it has gone too far.

I think that is the real point that Labour has been trying to make today. We love fierce political attacks, and fierce political clashes on issues, and we want to see more of that—more debate around policies. We have said that for this year our three goals are economic transformation, the support of families young and old, and the building of a national identity. We will come here in May with a Budget around those three themes, and we expect the Opposition to challenge us on it. We expect to have to stand here and defend it—and we will, because we are proud of our policies.

Finally, can I say how pleased I have been—returning to a firm policy position—at the decision last week of the hearings committee on the western corridor and Transmission Gully. Let there be no mistake about it: the Wellington electorate members of Parliament—Labour and United Future—did a huge amount of work to make sure a funding envelope was available to the Wellington region, so that the right decision could be made for the future of this region.

Dr PAUL HUTCHISON (National—Port Waikato): It is extraordinary that Annette King of all people has reactivated the Benson-Pope saga today. It is extraordinary that after 9 months on this issue it is the previous Minister of Health who has re-dug up dirt relating to her own Cabinet colleague. Firstly, I remind the House that it was the Hon David Benson-Pope who misled this House 9 months ago, and the Labour Government is in denial over that very important fact. I also remind this House that just recently I was talking to my colleague the Hon Tau Henare, and was reminded that it was those Labour members, in Opposition at the time, who spent 3 years hounding Tuku Morgan, who went nowhere near misleading this House.

It was the highly respected constitutional lawyer, Professor Bill Hodge, who categorically stated that the nub of the Benson-Pope saga was at the heart of our democracy, and the least the people of New Zealand can expect, and the members of this House can expect, is that members of Cabinet will not mislead this House, and that, if they do mislead the House, they should go. As constitutional lawyer Bill Hodge pointed out, Mr Benson-Pope misled this House, and therefore he has to go. It is this tired, old Labour Government that, if it continues to limp along as it remains in denial, has effectively condoned one of its members, a Cabinet Minister, misleading this House, and it will go nowhere, and it should go nowhere very soon.

The reason I am concerned that Annette King reactivated the Benson-Pope saga is that it was Annette King who, in 1998, used the very injudicious language that a waiting list of 96,000 was criminal. That is what Annette King said about the waiting list in 1998—that it was criminal. Now, after 6 years of a Labour Government and billions of extra dollars spent, the waiting list is over 160,000 people. I ask Mrs King whether that is criminal. Because by Mrs King’s standards her Government should be on the way out, and the injudicious language that Mrs King used is totally inappropriate.

It will take one hang of a lot more than 69 reviews, which this tired, old Labour Government has ordered up, to fix the health system in New Zealand. After 6 years of building bureaucracy and total lack of productivity identified by the OECD, the Treasury, and by her own Minister of Finance, we are simply not getting value for money under this Labour Government.

But this Labour Government cannot even see when a review is truly needed. I point to the Hon Pete Hodgson, the Labour Government’s “billion-dollar Kyoto mistake man.” He was the man who told this House: “Yes, sign up, ratify Kyoto, and a half-billion-dollar cheque will be written out automatically.” Well, now we know that Mr Hodgson, the man who has been sent to fix the health system, has actually been responsible for the biggest fiscal mistake in the history of New Zealand—$1 billion—yet here he is trying to fix up a health system that is in absolute disarray after 6 years and the billion dollars more that this Labour Government has spent.

It was on 17 February this year that Minister Hodgson was asked some questions about Focus 2000 Ltd.

The debate having concluded, the motion lapsed.

Bills

New Zealand Public Health and Disability (Enhancement of Competition) Amendment Bill

First Reading

HEATHER ROY (Deputy Leader—ACT): I move, That the New Zealand Public Health and Disability (Enhancement of Competition) Amendment Bill be now read a first time. Currently Pharmac enjoys an exemption from Part 2 of the Commerce Act. The Commerce Act is the cornerstone of the New Zealand economy, covering all business conducted in New Zealand. Its purpose is to promote competition that benefits consumers. The Act recognises that competition will not always produce the desired outcomes and allows for certain anti-competitive activities or restrictive trade practices to be authorised where the public benefit of the activity would outweigh any anti-competitive detriment. However, these exemptions are kept to a minimum and should be monitored and reviewed to ensure that competition is not limited more than is necessary to achieve the best results. This bill seeks to remove Pharmac’s exemption from Part 2 of the Commerce Act. At the appropriate time I intend to move that the bill be considered by the Commerce Committee.

Before progressing, a little history is necessary to understand how an exemption came about in the first place. Pharmac was established in 1993 with the purpose of controlling pharmaceutical costs. Its establishment was supported by all parties on the basis that it was necessary to contain costs. Pharmac was granted an exemption from competition laws to purchase pharmaceuticals for the four regional health authorities. The exemption was considered necessary to allow the regional health authorities to all purchase medicines at the same price. Pharmac at this time was owned by the four regional health authorities. The regional health authorities were later disbanded to form a single health funding authority, which continued to own Pharmac.

When the reduction from four separate purchasing bodies to just one took place it was questionable that the rationale for the Commerce Act exemption still existed, but the exemption remained. Today with the public health sector comprising 21 district health boards Pharmac is now a stand-alone entity managing the pharmaceutical schedule on behalf of the Crown. Today the scope of the exemption gives Pharmac carte blanche in all its commercial dealings free from any scrutiny or liability under the Commerce Act.

Originally the exemption was contained in the Health Reforms (Transitional Provisions) Regulations 1993. It has moved through a series of different legislations and today the New Zealand Public Health and Disability Act is where it exists. Pharmac determines what medicines are subsidised. It negotiates prices with manufacturers and operates other cost control strategies. The pharmaceutical schedule lists subsidised medicines, the subsidy level, and the conditions under which the drug can be prescribed.

Pharmac uses a number of bargaining strategies in its dealings with the pharmaceutical companies to drive prices of listed medicines down. One such strategy is that of sole supply. Pharmaceutical suppliers tender to become sole supplier of medicines in a therapeutic group. Where this strategy is engaged other companies can supply medicines, but patients pay the full cost of those medicines. In practice, if a company fails to win a tender then medication is effectively shut out of the market for a given period.

There have been several high-profile disasters resulting from sole supply arrangements. The most common is that of paracetamol. Each time the contract comes up for renewal the supplier changes, and each time supplying adequate amounts of paracetamol is a real issue. Most recently a cheap and nasty brand was chosen for sole supply. The pills were so cheap that they did not have the coating that makes them easy to swallow, and the elderly, especially, had difficulty swallowing them. Many, instead of trying, went without pain relief because they just could not swallow the pills.

Many Kiwis rely on anti-hypertensive agents to control their high blood pressure. One of these, Felodipine, was another high-profile disaster, with Pharmac changing brands back and forth. Plendil, one of the brand names, had been the brand of choice until Felo ER came in at a better price. Thousands of patients were forced to change and general practitioners noticed that their patients’ blood pressures, which were previously well controlled on Plendil, were alarmingly unstable. Further investigation showed that European data on Felo ER had been falsified and the actual amount of active ingredient in the pills was questionable. Patients were changed back to Plendil. But in the meantime Plendil stocks in the country were low because this brand had lost its control for sole supply. Pharmacists, at the brunt of all of this, were expected to scurry around the country to find what stocks they could.

Another strategy Pharmac enlists is agreeing to list new medicine on the condition that the pharmaceutical company reduce the price of another product that is already listed. This happens in two ways and is best described using examples. The first is between therapeutic groups. An example—Merck Sharp and Dohme agreed to decrease the price of Simvastatin, a cholesterol lowering agent, in return for its ACE inhibitor Enalapril being relisted. The second way this happens is with deals within a therapeutic group: the best example of that at the moment is risperidone, an anti-psychotic agent previously available only in tablet form. It has recently been developed as an injection, which is much easier to administer and the results are more reliable, because patients do not need to take the tablets daily. Pharmac has reached a deal with manufacturer, Janssen-Cilag. The company has drastically dropped the price of the tablets in order for the injectable risperidone to be listed.

Using strategies such as these, Pharmac has been able to obtain reductions in the overall cost of pharmaceuticals. The purpose and effect of such agreements is to substantially reduce competition and choice for patients. If it were not for Pharmac’s exemption, these arrangements would raise serious issues under Part 2 of the Commerce Act.

I have little doubt that the following arguments will be raised in the course of this debate about why the exemption is absolutely necessary for Pharmac to function. In its briefing to the incoming Minister of Health in 2005, Pharmac vigorously defended its right to the exemption, with statements such as: “The exemption means PHARMAC’s activities cannot be challenged on the grounds that, for example, PHARMAC is taking advantage of its market power or that its activities lessen competition in the market.” Statements like this show that Pharmac clearly believes it is above the law. This alone is reason enough to remove the exemption.

Pharmac often offers the argument that the removal of the exemption will result in a flood of vexatious litigation, and it points to various court cases over the years. But the claims that litigation is vexatious are simply not borne out in case law. Pharmac has only ever been involved in cases raising important issues of principle. Pharmac has attempted on a number of occasions, without success, to strike out causes of action brought against it by pharmaceutical companies. Furthermore, the courts have found against Pharmac on a number of issues and determined that Pharmac is subject to other commercial legislation, including the Fair Trading Act.

Pharmac argues that it does not control access to the market, but merely controls access to Government subsidies. The reality, in fact, is that without a subsidy a pharmaceutical supplier will find market access difficult, if not impossible. Even with a part charge it would still be difficult to obtain any credible market share. Doctors generally prescribe the medicine that is fully subsidised so that the patient does not have to pay any costs, except the dispensing fee. Pharmac’s status as a monopsony buyer means that it does control market access and market share, and this is precisely the reason that its practices should come under the scrutiny of the Commerce Act. Pharmac has publicly stated often that its practices and procedures are not anti-competitive and do comply with the Commerce Act. Empirical evidence suggests otherwise. But if that is Pharmac’s view there should be no need for the exemption to remain in place, and this House should look forward to Pharmac’s support of the bill.

Pharmac’s exemption is neither necessary nor justifiable. It denies choice for doctors and patients, limits public access to new medicines, and discourages research and development. Without the Commerce Act exemption, patients would be able to access the medicine that best treats them—often at a lower cost—instead of being limited to whichever medicine Pharmac bureaucrats have endorsed. Like everyone else in the economy, Pharmac should be subject to the courts’ jurisdiction and the central plank of economic policy. The basic economic philosophy in the current economic age is a deregulated market, where better products can be secured at lower cost through the normal processes of competition and the dynamics of a contestable market place. There is no reason for Pharmac to be exempt from this basic concept. People’s lives and their quality of life are affected significantly by Pharmac and the decisions it makes. Rules that make it impossible for New Zealanders to gain access to medications that improve their quality of life, and in some cases save lives, do not belong on our statute book.

I commend this bill to the House, and I look forward to the support of the other parties.

Hon PETE HODGSON (Minister of Health): I thank Heather Roy for a sensible contribution in opening this debate. It is a contribution that has been thought through, but it is one that I disagree with. The Government will not be supporting the legislation. But I think that the member who has just resumed her seat needs to hear from me as to why that support will not be forthcoming.

I received this member’s bill some weeks ago and took a look at it. I read the bill, read the explanatory note, and thought that the member had the beginnings of a logical argument—especially the idea that, now that there are no longer four regional health authorities, maybe there was something that needed to be considered.

I decided that I would therefore seek the advice of the following parties: first of all, Pharmac; secondly the Ministry of Health; and thirdly, and more important, I actively sought the advice of the Ministry of Economic Development and the commerce officials within the Ministry of Economic Development, whose judgment on these matters I know to be of a high quality because I have been lucky enough to spend time as Minister of Commerce. I further asked that those officials write me one paper—and that if there were differences in views across the silos of the Government, that they could be expressed in one paper, but I would have one paper none the less. I received one paper, and I have it in front of me. I have shared it with a number of other parties. I say straightforwardly to the member that nobody whom I asked supported the member’s bill. In fact, officials from the Ministry of Health, from Pharmac, and from the Ministry for Economic Development advised as one that the exemption be retained. Why might this be?

First of all, we need to acknowledge that the member seeks to remove Pharmac’s exemption under section 53 of the principal Act, which, of course, is broader than the exemption that would be retained under section 2(7) of the Commerce Act. That is basically the technical nature of the member’s proposition. Let us remind ourselves that Pharmac’s estimate—which of course could be wrong, but the member might like to come up with another one if she disagrees with it—is that, its behaviour, its monopsony purchasing modus operandi, saves the New Zealand taxpayer approximately $700 million a year. The pharmaceutical industry association, with which I had some dealings when I was Minister of Research, Science and Technology—in fact, I have had a lot of dealings with the pharmaceutical industry—itself agrees with that figure. The association uses American dollars and its figure is US$500 million.

So both the buyer and the seller agree that that, roughly, is the saving to the New Zealand taxpayer, and to an extent the member’s bill would put that money at risk. I simply do not get it. It is true that it would not put it all at risk, and I am not suggesting that it would—in fact, I do not know how much it would put at risk—but there is no way that this member’s legislation, if it were to pass, would result in cheaper drugs.

The idea that somehow or other Pharmac seeks to reduce competition in New Zealand, and therefore reduces choice for New Zealanders, is wrong for two reasons: firstly, it does not reduce competition for New Zealanders because we can go and buy the drugs if we want them, and secondly, it does not reduce choice because—and the member has failed to acknowledge the obvious—the pharmaceutical industry is broader than New Zealand. It exists in other countries. It is, of course, very much a global industry and the players in the industry—the large pharmaceutical companies—happen to be amongst the largest companies in the world. The industry is bigger than New Zealand. This is not taxis, which is a local market; this is pharmaceuticals, which is a global market, and the underlying thesis of the member that therefore competition is damaged is palpably wrong.

It is important to say that neither Pharmac nor the Government is interested in eliminating or diminishing competition amongst pharmaceutical companies. If we, through our actions in New Zealand, were somehow to send most of the pharmaceutical companies of the world to the wall, we would be damaged by that. Is this happening? No, it is not happening, because New Zealand has 4 million people and does not have an ability to damage large companies to that extent and does not seek to.

The debate about Pharmac and the Commerce Commission has been around since the commerce exemption was put in more than a decade ago. I remind the member of the paper written, from memory by Lexchin and Caygill, that looked at those issues some years ago, and did not suggest what the member is suggesting in her member’s bill. It is important that the member acknowledge that this Government has already looked carefully at that.

I want to make another point. Why do we have a Commerce Act? The underlying reason for having a Commerce Act is to promote competition in order to reduce prices for consumers. I repeat: reducing prices for consumers is the reason we have a Commerce Act. Yet, paradoxically, if the exemption to Pharmac were removed there would not be a reduction in prices to consumers; there would be an increase. Actually, it is not consumers; it is taxpayers. That is the $700 million, or part thereof, I mentioned earlier in my remarks. So, actually, I do not get it.

In respect of the member’s comments about paracetamol, does she think that changing the exemption to the Commerce Act would alter that? In respect of her comments about falsified data, or whatever other allegation she has—and I do not say they are wrong; I simply do not know—is she saying that exemption from the Commerce Act would alter that? Is she saying that the deals that are done, or the deals within deals that are done, are a bad thing? Is she saying that going to Merck Sharpe and Dohme and saying that we will do a deal for one drug but not another, etc., is a bad thing? Does she think that saving taxpayers’ money is generally a bad thing? If so, then we are absolutely on opposite sides of the deal here.

My focus as Minister of Health of course has to be to ensure that New Zealanders get the best, most affordable access to pharmaceuticals that is possible. So, as I mentioned in question time an hour or two ago, I am proud that we managed to get more medicines funded in this country than, for example, Australia, and at some fraction of the cost. This country runs its health system on about 7 or 8 percent of GDP. America runs its health system on 14 percent of its GDP. Americans spend more than three times per head on health than we do, and they die 6 months earlier. There is no relationship between the amount that is spent on drugs, as an example, and health expectancy or life expectancy. There is virtually no linkage. There is for some drugs, but generally speaking the linkage between expenditure and health expectancy or life expectancy is very, very modest indeed. Most of the effects we get from improved health in this country come from things like clean water, good nutrition, and attention to exercise.

In essence, I do not get where ACT is coming from, or why. I look at the ACT party and see its position in the political spectrum as being a party that likes low taxation. I think everyone would agree that ACT has stood for, and continues to stand for, low taxation. In question time today, and at earlier times, the ACT party has consistently stood for better access to drugs. Low taxation and better access to drugs are legitimate, valid positions to take in a political debate. If that is ACT’s position, why has it put up a bill that says: “Let’s have more drugs, because we like that; let’s have less money to buy them with, because we are for low taxation; and let’s ankle tap the one organisation that can bring prices down.”? I do not get it from an ACT perspective. I certainly oppose it from my own, but I do not understand why ACT would stand for more drugs in society and for low taxation, but at the same time say that the one organisation that delivers cost effectiveness across the pharmaceutical arena should be ankle tapped. I do not get it, and I think the ACT party stands for more than one thing.

Hon TONY RYALL (National—Bay of Plenty): If everything is so good with Pharmac, why does it rate only 5½ out of 10? That is the mark the Minister of Health gave Pharmac in the House during question time yesterday. I think that is one of the reasons why Mrs Roy has brought this bill to the House.

National does want to be associated with a debate on this Government’s management of drug buying in this country. I can tell the House this: that the Minister talks about cost effectiveness, but the biggest beneficiary of cost effectiveness under this system has been the Government. I can tell the House this: that per head of population, spending on pharmaceuticals in this country has been dropping every year in the last 4 or 5 years. That is not something that the Government should be proud of.

So National thinks it is opportune to debate the role and function of Pharmac and the output of drug policy by this Government, for this reason: there is incredible discomfort in this country about how medicines policy is being run. Hundreds of people have marched to Parliament to express frustration at the funding of our drug-buying policy in New Zealand. We have seen Dave Bowman and other people needing the drug Temozolomide come to Parliament and present a petition of their concerns about Government underfunding of drug buying in New Zealand. Tomorrow we are to see people concerned about access to the drug Herceptin. Those cases indicate the disquiet there is in this country about our medicines and drug buying policies. Further, earlier this year a group called the Access to Medicines Coalition was set up, comprising a wide range of organisations, including the AIDS Foundation and Alzheimer’s, arthritis, and asthmatics organisations, all wanting to promote improved access for medicines.

Why are we seeing this mobilisation of user opinion happening now? I suspect it is because of the legacy of Labour under-investing in pharmaceuticals year in, year out. I have said before that per head of population, spending on pharmaceuticals in this country has been dropping. So at the last election the National Party made a commitment that we would boost the budget for pharmaceuticals by $25 million. That would have made a difference to a whole lot of New Zealanders. It would have meant that we were no longer falling behind our own standards on a per head of population basis. At present we are not even keeping up with inflation on that basis, and New Zealand should not be proud of that. That is what this Government has done. It has just got the wrong priorities in the health system. We have strategies, frameworks, guidelines, and protocols to kingdom come, but when it comes to actually delivering more services and more pharmaceutical assistance to New Zealanders, the Minister stands up and says that we are doing more than Australia, that it is cheaper here than in Australia, and that it is a great thing for New Zealand. But he fails to say that per head of population our spending on pharmaceuticals has been falling for the last 4 or 5 years, and that is nothing that this Government should be proud of.

The National Party would like an opportunity for Parliament and the people of this country to debate the performance of Pharmac and the medicines policy. New Zealanders want the opportunity to come forward and tell their stories of how they have been affected by the system. They thought that United Future might give them this opportunity, but we are now finding out that the Government’s medicines review is to be a closed-door, Ministry of Health cook-up job. Ordinary people—the people who are at the frontline of dealing with this Government’s medicines policy—will not have the opportunity to come forward and express their frustration that we are not keeping up our pharmaceutical expenditure on a per head of population basis, which would have been an easy ask for any Government that was determined to fix the issue.

BARBARA STEWART (NZ First): On behalf of New Zealand First, I rise to speak to the New Zealand Public Health and Disability (Enhancement of Competition) Amendment Bill. New Zealand First will not be supporting this bill. We very carefully considered this bill and all of the concerns surrounding it. New Zealand First has long advocated that there should be a review of the efficiency of Pharmac.

Our concerns have focused principally around the number and types of drugs that New Zealanders are able to receive for their various conditions and illnesses. We believe that all New Zealanders should have equitable access across each district health board in New Zealand, to the best possible drugs so that the best possible health outcomes can be secured for eligible people. We find that this bill does not address our fundamental concerns. We cannot accept that this proposal will improve availability or ensure equal access to the most appropriate drugs irrespective of where a person lives in New Zealand.

We acknowledge that Pharmac has a very difficult role and manages a limited budget in the face of strong pressure to increase expenditure on pharmaceuticals. As the Minister has pointed out, Pharmac saves many millions of dollars per annum for the taxpayer and this is spent on additional medications. New Zealand First awaits the development and refinement of a long-term medicine strategy, as the best way forward must surely be based on a thorough analysis of our current system and of international trends. We are very aware that this issue is totally separate from the member’s bill that we are discussing.

In 2000, a review of Pharmac’s operating policies and procedures was undertaken. We note that part of that review commented on the Commerce Act exemption. Over the 2002-03 period there was communication with the industry regarding the use of alternative models for purchasing pharmaceuticals, and the impact on research and clinical trials in New Zealand. This communication did not result in any recommendations for change. The debate with the industry has taken place over a long period and Pharmac has not abused its exemption over this time. Many of the actions identified by the industry as detrimental have been found to support reasonable objectives for the health system. We are very aware, too, that the industry has raised concerns about Pharmac’s exemption from its inception. But we repeat that New Zealand First does not believe that this bill deals with the real issues and that a more comprehensive appraisal is due.

The value of the Commerce Act exemption in isolation is very difficult to quantify in real terms to consumers. New Zealand First is committed to the subsidising of pharmaceuticals for the benefit of all New Zealanders and to obtaining the best deal possible, both in price and quality. We believe that Pharmac has to achieve its purpose of ensuring that all New Zealanders have access to safe and effective medicines, and this is where we want the focus of Pharmac to remain. New Zealand First believes that with the passing of this bill, there would be the potential for the sector to use the legal system and the Commerce Act to delay and influence decisions—this would really be expected business behaviour. Litigation, as we all know, is costly and, of course, time delays impact negatively on any benefit Pharmac provides to consumers. This bill would impact negatively, too, on the overall pharmaceutical budget because at best it fails to confront the real issues, and at worst it could lead to additional costs and/or time delays. New Zealand First will be opposing this bill.

SUE KEDGLEY (Green): The Green Party has long supported the independence of Pharmac and greatly values the way that that independence helps to insulate the New Zealand market from the influences of the global pharmaceutical industry, which, let us face it, is dominated by 10 to 12 very large multinational corporations. Those corporations are amongst the wealthiest companies in the world. They have budgets bigger than New Zealand’s, and therefore have huge leverage and influence. Obviously, the goal of most—probably all—pharmaceutical companies is to get the highest possible return for their shareholders. They would like to get all their drugs into New Zealand at the highest price the market will bear and with as many drugs as possible subsidised. If companies increase their prices—as they seek to do—our choice is reduced, not increased.

Heather Roy, in particular, has given us lots of examples of drugs, and I will give another—the breast cancer drug, Herceptin. As Tony Ryall pointed out, people will be here tomorrow demonstrating their concern about it. He said there was huge disquiet in New Zealand about why people cannot get access to this drug, but there actually should be huge disquiet here about why the price of Herceptin in New Zealand is 50 percent higher than it is in the United Kingdom. Why should that be? What possible justification is there for that? Does it cost 50 percent more to ship it to New Zealand—or is the price of oil to blame? Obviously not.

There should be great disquiet, too, about why the drug costs $75,000 to $100,000 per treatment. I think it is frankly obscene that companies are charging $100,000 for drug treatments. There are more drugs in the pipeline at $300,000; there are even some at $700,000. Why are companies charging more in some countries than in others? There should be huge disquiet about that. If 300 women have Herceptin at $100,000 a year, that costs $30 million. That is money that cannot be spent elsewhere. Members should not get me wrong. I will support women’s right to have access to the drug Herceptin, but I am concerned about why we should have to pay $100,000 a year—50 percent more than the price in the United Kingdom—for that drug. So it is absolutely in our national interest that we have a drug purchasing agency that is as independent and as strong as possible, and that is able to negotiate access to pharmaceuticals for the cheapest possible price.

In our view, if we got rid of the exemption, the main beneficiaries would be Russell McVeagh and other large law firms. The pockets of Russell McVeagh would be filled, which would inevitably lead to litigation, and that would be used as a tool to undermine Pharmac’s ability to negotiate access to pharmaceuticals at the cheapest price. What on earth would be the point of that? The litigation would be used to impose injunctions, delay decisions, tie up resources, and pursue more lengthy litigation. That would impact on the pharmaceutical budget overall, so New Zealand would end up paying more, not less, for pharmaceuticals, and the precious health dollar would be stretched even further. If a court case costs $1 million, that is $1 million of precious health money that could be spent on a whole lot of other things.

We have to remember, too, that we are not talking about eliminating competition for drugs, only competition for the subsidy for drugs. Pharmaceutical companies have monopoly power over patented medicines, so competition occurs only when a drug is off patent. I think this bill is part of a wider campaign to undermine Pharmac, so that pharmaceutical companies can make more money and sell their drugs at whatever price they can manage. Far from encouraging this campaign, we should be doing everything in our power to protect and strengthen Pharmac to ensure that we can get access to pharmaceuticals as cheaply as possible.

Barbara Stewart talked about dealing with real issues; there are real issues we should be dealing with. Why is there no requirement for consumer information on all drugs sold in New Zealand? Why does the only information many GPs have about drugs come from pharmaceutical companies? Why is there not a mandatory requirement to report adverse reactions to drugs? So the Greens are concerned about many issues. We welcome the fact that New Zealand is to have a medicines policy, but this bill, unfortunately, would just drive up costs and undermine choice for consumers in this country.

TARIANA TURIA (Co-Leader—Māori Party): Tangata whenua believe that in matters of hauora—our health and well-being—it is not enough simply to be absent of disease. Health is about creating the optimum conditions for our full potential to be realised. In that view, we are firmly committed to a focus on the determinants of health and well-being, including poverty, housing, income discrimination, and the environment.

We will support the referral of the New Zealand Public Health and Disability (Enhancement of Competition) Amendment Bill through to the Health Committee. We will do so because we believe that the New Zealand public has a right to tell us whether it believes the current Commerce Act exemption is essential for Pharmac’s ability to achieve positive health outcomes. The key issue for the Māori Party is whether it will make a difference to the health of our people, and whether it will ensure that people are able to get access to the best medication, if they need it.

Pharmac should be subject to the same scrutiny as others. Pharmac has argued that if it loses its Commerce Act exemption, it will be forced to spend money on defending litigation rather than on securing health outcomes. I certainly have some sympathy for that view, because I can recall that when Pharmac was first set up a number of cases were brought against it, which cost a considerable sum of money. The complicating factor with the Commerce Act cases is that it is not only legal fees that are required but also fees for economic expertise—often from international sources. The reality is that one has to question the real value to the health of the nation if our resources end up being tied up in litigation. The Māori Party absolutely appreciates the perspective of Pharmac that the goal of economic efficiency is not the only goal in terms of health and well-being. It would seem sensible that Pharmac’s actions in undertaking its drug-purchasing activities should be subject to the same scrutiny as the actions of others in the market place.

The health and well-being of our whānau are very important. Those issues affect us deeply, personally and collectively. I want to raise some questions that keep me awake at night. Why is the cancer death rate for Māori females 89.6 percent higher than the non-Māori female rate? Why is the ischaemic heart disease mortality rate for Māori females 119.2 percent higher than the non-Māori female rate? And why is the Māori female age-standardised rate for cerebrovascular disease 52.8 percent higher than the non-Māori female rate? Those statistics are stunning in their severity, and as a nation we must care enough to do something about them—not because we want to close the gaps but because we believe that health is not a privilege but a right.

We hope that in supporting the referral of this bill through to the select committee, the submissions that we receive will keep us focused on the bigger picture, and on how to achieve health gain through improving people’s access to pharmaceuticals and to better health-care. The pharmaceuticals we are talking about are the best and those that will improve the quality of life. Will this legislation lead to a buyer’s market or a seller’s market and, most of all, how will it improve the health and well-being of the people? As I said earlier, the Māori Party is prepared to support the referral of the bill to the select committee so that the debate can be held.

JUDY TURNER (Deputy Leader—United Future): I rise on behalf of United Future to speak to the New Zealand Public Health and Disability (Enhancement of Competition) Amendment Bill. Two things are at the heart of our decision to support the first reading. The first is that the bill gives the opportunity for hundreds—probably thousands—of constituents to put forward their cases regarding the choices made by Pharmac that affect their access to affordable medicines. All of us have received very, very disturbing letters from people who are desperate for medication. Those people know the medication that they are waiting for is approved overseas by other jurisdictions, they hope it will be prioritised, and they deserve to have their cases heard. The second reason United Future is prepared to support this first reading is that it is now well known that we have a total commitment to the development of a national medicines strategy, and we believe that select committee hearings on this matter could well throw up some very interesting considerations.

However, I want to clarify that the development of a national medicines strategy has nothing to do with restructuring or replacing Pharmac. We believe that the role of Pharmac will become apparent as a proper and comprehensive strategy is developed throughout that process. We are determined not to become captured by individual cases, because the need is bigger than just responding to individual cases and to the desire for individual medicines. However, in the current absence of a medicines strategy, I personally want to commit to all the people who write to us that we will continue to advocate for them and to lobby Pharmac on their behalf to have their cases considered.

Our support for the first reading of the bill should in no way be seen as a signal for ongoing support, should it become apparent during the select committee process that the outcome would undermine the greater good. That greater good involves the chance to put in place an approach to pharmaceuticals whereby instead of asking whether the drug fits within our budget, we take a whole-of-Government approach and ask what it would cost the New Zealand taxpayer if we did not supply, in an affordable way, the medicines needed to treat any given condition.

The Hon Tony Ryall rightly brought to the House’s attention the fact that expenditure per head of population on pharmaceuticals is currently questionable. We also know that the percentage of Vote Health that is dedicated to purchasing pharmaceuticals is lower than it is in other jurisdictions that we like to compare ourselves with. So the bigger question is the appropriate priority that pharmaceuticals should take in the overall delivery of health services in New Zealand. Can market forces positively contribute to the availability and affordability of pharmaceuticals in New Zealand? Well, a discussion should be held on that. Has the evolutionary role of Pharmac become unhelpful to the overall need to respond to new and innovative pharmaceutical options, as they come online? Again, that discussion must be held.

Our commitment is to a national medicines strategy. However, we see no harm in supporting the referral of this bill through to the select committee—we believe that can only help. But, beyond that, we would like to see what comes out of the select committee and then decide whether to support the bill any further than this current stage. We will support the first reading of the bill.

RODNEY HIDE (Leader—ACT): I never ever thought I would stand up and say in this House what I am about to say, and it shocks me to my quick that I am about to. My statement is this: bring back Annette. As a Minister of Health she was not great but, boy, did she outperform Pete Hodgson in terms of her understanding of the issues! The other thing I say about Annette King is that she was actually prepared to front up and explain the Government’s policy. Pete Hodgson has not got his head around the policy, and he is not prepared to front up to the New Zealanders who pay their taxes, who are the voters in this country, who are the people we represent, and who are being denied the very drugs they need—for their lives. People are dying because of the drug policy in this country.

The Minister of Health is quite prepared to stand up in the House and justify the Government’s policy, but he is not prepared to go out on the steps of our Parliament and meet the people who are the victims of it. I know that Annette King would have. I did not agree with her, but she would have. Pete Hodgson, though, is too busy to meet women who are dying for the want of a drug.

I was shocked by Pete Hodgson’s explanation of why he opposes this bill. His argument starts like this: “This bill really keeps the costs down. Look how much money we’ve saved.” OK, that is one measure, but being the Minister of Health is actually not all about saving money; it is about using money to best effect to save New Zealanders, and that is what we did not hear from Pete Hodgson. In fact, he went on to say that drugs do not make much difference as to whether a person lives or dies but clean water does. Well, I can tell the Minister of Health for free that the women from my electorate in Auckland who are coming down to Wellington to protest his Government’s policy have clean water. Those women are in trouble and have to have radical surgery because of Pete Hodgson’s policy and failure to review what Pharmac is up to. His excuse is that drugs do not make a difference. I ask him to come out of Parliament at 1.15 p.m. tomorrow and tell that to the women who will be there protesting.

I look forward to seeing Barbara Stewart out on the steps of Parliament explaining why she opposes the Health Committee having a look at what Pharmac is up to. I will be telling the people of New Zealand that New Zealand First had an opportunity that it did not take. It stopped it, because New Zealand First is a poodle party. Its members jump to the tune that Pete Hodgson puts out. Barbara Stewart has an explanation to make tomorrow.

I ask members to reflect on this: between 1997 and 2002, 160 new medicines were listed in Australia—medicines that will save and improve the quality of Australians’ lives. New drugs are available because of research and technological development. We may ask ourselves how many new drugs were listed in New Zealand. The answer is 48. Australia listed 160 new medicines and New Zealand listed 48. In this House, Barbara Stewart, the Green Party, and the Labour Party are saying that that is OK. Well, the ACT party says it is not, and that is why we support this bill.

STEVE CHADWICK (Labour—Rotorua): I am delighted to get an opportunity to speak on this bill. Labour does not support this bill, because Labour and this Government believe in delivering health to all New Zealanders in the most cost-effective manner. In our model of health, the Primary Health Care Strategy is not measured on the basis of throughput in hospitals. As the health spokesperson from the Opposition said, spending on pharmaceuticals has dropped. What a good thing that is if we are starting to focus on keeping people well and getting people to a doctor at a more affordable rate. That is what the New Zealand Health Strategy is all about.

Labour does not support this bill at all, because we do not want the free market to reign over pharmaceuticals in this country. We absolutely do not want that. In 1993 the model of Pharmac was introduced into this country in order to stop litigation between the major pharmaceutical companies. Evidence has been tabled here today about the litigation up to 2000. It cost a lot of money—it cost Pharmac money to fight that litigation. Thank goodness a court ruling has since stopped the litigation, and Pharmac can now spend its budget, which may be quite well-controlled and capped, on accessing more subsidised pharmaceuticals for people in New Zealand, not on health money for drug companies. The court ruling has enabled Pharmac to operate a national pharmaceuticals schedule. It has not ruled out access to the market. If people want to have unsubsidised pharmaceuticals, they can have them. It has not capped access to them at all, but people have to pay for them. This issue is about funding the subsidised pharmaceuticals available to New Zealanders. It is about containing our costs.

I went to Australia, where we were asked how on earth we got the Pharmac model set up in this country. Those on the Health Committee will remember that trip. Pharmac is a fantastic model, because it controls uncapped expenditure by pharmaceutical companies. It is a model that we would not want to get rid of. It is of global envy that we have a model with robust structures for getting drugs, through subsidisation consideration by experts in the field. We go through the Pharmacology and Therapeutics Advisory Committee to get experts to give advice on the quality of life given by the drugs that people are asking to be subsidised. We would not want to get rid of a model like that, which is the envy of everybody.

The repeal of section 53 of the principal Act, proposed by a very good member of ACT who understands the health environment, is actually very, very flawed. Labour does not support this bill, at all. The important thing about the exemption and why we need it for Pharmac is simply that, as a small country, we need interconnectedness between Pharmac and the district health boards. That is what the exemption allows. It was set up for the four regional health authorities. They have gone. We now have 21 district health boards, and the exemption needs to cover that breadth for this country and for our health system as it stands now. It does not protect other organisations that have entered into agreements with Pharmac; those can stand.

Pharmac’s objective—and I think this is a really noble move—is to look at health gain, not just at cost minimisation. We as a Government find that very important. We certainly do not support this bill. It would unravel the excellent work done by Pharmac. I am sorry to say that the bill certainly does not have our support.

Dr JONATHAN COLEMAN (National—Northcote): It is my pleasure to be speaking in support of this member’s bill, brought forward by Heather Roy, and to confirm that the National Party will support it going to the select committee. A number of strong arguments have already been put forward by Mrs Roy regarding Pharmac’s exemption being removed, so I do not think they need to be revisited. But this debate is an ideal opportunity to address the real issue for New Zealanders. The real issue that concerns people out in the street is that of access to medicines in New Zealand today. As we have heard, Pharmac has already admitted to the Health Committee, and the Government has confirmed, that funding per head of population for pharmaceuticals has not kept up with inflation. That, I think, is a major injustice for the people in New Zealand.

There is no question that New Zealand’s pharmaceutical policy needs to be reviewed—absolutely no question. And this is where we start to get problems. We hear that Peter Dunne will be leading this review, but no one really seems to know much about it. We know that it will be run with the Ministry of Health, but we do not seem to know any of the other details. The scary thing was that at the select committee Pharmac did not seem to know anything about the review, either. It did not know what the goals of the review are, did not know what its involvement would be, and did not know what the actual impact of the review would be on it.

It seems to me that the real issue is that it suits the Government to keep the people of New Zealand in the dark about the review. It does not want this review to be held openly. It does not want New Zealanders to have the chance to come and tell their stories in the open, and to tell people how Pharmac is affecting their lives today. The Government is hoping that the Pharmac review will be just swept under the carpet. I might remind members, as we have heard earlier this afternoon, that this is just one of 69 reviews this Government is carrying out at the moment—69 bureaucratic, wasteful reviews. Well, I can tell members that the demand from the people of New Zealand is for a transparent review where they can come and tell their stories.

The member for Rotorua has said that Pharmac is the envy of the rest of the world. She might want to come and meet some of the constituents who have come to my electorate office in Northcote. She might want to come and meet Mr and Mrs Mills from Northcote, whom I have spoken to today. They are quite happy for me to talk about their case in Parliament, because they want to be held up as an illustration of how Pharmac and this Government are not serving the interests of the people of New Zealand.

Mr and Mrs Mills are retired people. They are good citizens, they have paid their taxes, and they have worked hard. Mr Mills is now 72 and he is in the early stages of Alzheimer’s disease. He has to take two drugs. He takes a drug called Aricept and a drug called Ebixa. They are not wealthy people, but every month this retired couple has to pay $415 out of their own pocket at the local pharmacy so that Mr Mills can get the medication he requires to arrest the progression of his Alzheimer’s. His geriatrician at North Shore Hospital, Dr Joe Singh, says that without that medication Mr Mills would be deteriorating at a far more rapid rate. Can members guess what would happen then? Mr Mills would end up in long-term care, funded by the New Zealand taxpayer. So we see that if the Government had had the foresight to invest in that gentleman’s care, and to invest in the pharmaceuticals that thousands of New Zealanders like him need, it would find that in the long run it would be saving money for the taxpayer. It would be saving money that could be spent elsewhere in the health system.

I am sure that tomorrow we will not see the Minister of Health out there, greeting the ladies who are bringing the petition from Auckland. But if we were to, I am sure we would see the nice-as-pie Mr Hodgson there. We would not see the angry, shouting, finger-pointing Minister of Health we see in the House, because it is pretty hard to do that when one is confronted with the facts and when one actually meets women with breast cancer who are being denied the drugs they need to save their lives. It is hard to go out and start shouting in their faces, is it not? But the reality is that those women cannot get the care they need in New Zealand. England and France cut through all the regulatory stuff. Their Governments said that they would not be held up by bureaucracy, but that they would give these women the medications they need. They would not wait for breast cancer to spread to those women’s brains, bones, and livers. Those Governments were going to give that medication early, because the research shows that that action would do well by those women. But that is the very reason this Government does not want an open review of pharmaceuticals. This Government does not want women, like the women we will see on the steps of Parliament tomorrow, coming and making their stories known because it is all too embarrassing and all too hard. So let us have an open review; that is what New Zealanders want.

HEATHER ROY (Deputy Leader—ACT): I thank the many members in this House who have made a very positive contribution to this bill today, particularly the National Party, United Future, and the Māori Party, who are supporting the bill. The Minister had many questions for me, and it is a pity that his office repeatedly refused me an appointment with him so that he could have gone through them with me prior to today, but I guess that is the way things are with the Labour Government. The Minister sought a great deal of advice, it would seem, but what is more telling than who he sought advice from was who he did not seek advice from. There was no Treasury advice, no industry advice, and—most telling of all—no advice from patients: the people who actually matter and who, at the end of the day, are those who are suffering.

These are the facts. The reason for implementing this exemption from Part 2 of the Commerce Act is long gone. Our health system has had several iterations since 1993, and there is no good reason now for this exemption to remain. New Zealanders do not have ready access to the medicines that are most effective in treating their diseases and illnesses. Countries that we like to compare ourselves with, particularly Australia, are doing much, much better than we are. I do not know who is giving the Minister advice. He seems to think we are doing wonderfully well here, but we are not.

Kiwis have very limited choice in pharmaceuticals, unless they are in a position to pay the full price for them themselves, and doctors have very little choice when prescribing. One way to rectify this situation is to allow more competition in the pharmaceutical market place by removing Pharmac’s exemption from Part 2 of the Commerce Act and by supporting this bill. Reference pricing, sole supply, and doing deals with pharmaceutical firms are all anti-competitive strategies used by Pharmac. They result in less choice, less competition, and, in the longer term, inferior treatments and poor access to the new medications that other countries enjoy. Cost containment should not be allowed to compromise access and availability of quality health-care.

This bill was never intended to attempt to fix all of Pharmac’s woes, as Sue Kedgley seemed to think it was. This bill is, in fact, for a full exemption from Part 2 of the Commerce Act. Now, it may be that a partial exemption is an avenue worth exploring; something that Pharmac might find a little more palatable and that would allow it some protection from the litigation that it fears. I urge members to vote for this bill to go to a select committee, so that this exploration can be undertaken.

I have to say that I am extraordinarily disappointed with the stand that New Zealand First has taken on this bill today. New Zealand First used to be a party that believed in the market. New Zealand First members used to believe in the exploration of ideas and submissions made at select committees by people who were affected, but it seems that they have now become just the poodles of the Labour Government, prepared to take anything that the Government says unquestionably and to promote it.

In September 2000 Dr Joel Lexchin and the Hon David Caygill—a former Minister of Health, of course—authorised a report to the then Minister of Health, Annette King, on Pharmac’s operating policies and procedures. The report noted that Pharmac says it does not take advantage of the exception, but its authors said that they were not in a position to judge. They questioned whether Pharmac should continue to enjoy a full exemption. Their recommendation, which was made at the end of that report—something that the Labour members failed to express in this House; at section 53, but perhaps those members did not read that far—was that careful consideration should be given to these issues, and that an examination should be undertaken as to whether the current exemption from Part 2 of the Commerce Act should currently exist. Unfortunately, Minister Annette King ignored that advice, but 5½ years later this Parliament has the opportunity to undertake that examination by passing this bill at its first reading and sending it to a select committee.

A thorough examination is called for. Public submissions and those from professional groups and Pharmac itself would shed new light on issues that have arisen in the rapidly changing world of pharmaceutical research and development. Like everyone else in the economy, Pharmac should be subject to the court’s jurisdiction and the central planks of economic policy. People’s lives, and their quality of life, are affected significantly by Pharmac and the decisions it makes. Regulation that makes it impossible for New Zealanders to gain access to medication that improves their quality of life, and in some cases saves lives, does not belong on our statute book. For this reason I commend the bill to the House. I urge all parties in this House to send this bill to a select committee so that the exploration and the examination of this now defunct exemption can be explored properly.

A party vote was called for on the question, That the New Zealand Public Health and Disability (Enhancement of Competition) Amendment Bill be now read a first time.

Ayes 57

New Zealand National 48; Māori Party 4; United Future 3; ACT New Zealand 2.

Noes 64

New Zealand Labour 50; New Zealand First 7; Green Party 6; Progressive 1.

Motion not agreed to.

Bills

Electoral (Reduction in Number of Members of Parliament) Amendment Bill

First Reading

BARBARA STEWART (NZ First): I move, That the Electoral (Reduction in Number of Members of Parliament) Amendment Bill be now read a first time. The purpose of this bill is to amend the Electoral Act 1993 in order to reduce the number of members of Parliament from 120 to 100.

Prior to the introduction of the mixed-member proportional representation system in 1996, the number of members of Parliament had reached 99. In 1999 a citizens initiated referendum on the size of Parliament was held in conjunction with the general election of that year. That referendum was held as a result of the petition that was organised by Margaret Robertson and signed by 279,233 others to reduce the number of members of Parliament to 99. Voters in the referendum were asked the question: “Should the size of the House of Representatives be reduced from 120 members to 99 members?”. Of those who voted, an overwhelming 81.5 percent—1.7 million New Zealanders—voted in favour of a reduction.

What action occurred as a result of that overwhelming decision by the people of New Zealand? Essentially, nothing. In light of this inaction, is it any wonder that New Zealanders feel they are powerless and have no say or influence over the issues that face their country? Democracy is lost when the Government fails to hear the voices of the people.

When the MMP legislation was introduced, both National and Labour put the MMP number of MPs at 120, and the first-past-the-post number at 99, in the hope that people would reject the new, fairer voting system in favour of the old system, because they well knew that people do not want to see more politicians. It was hoped that that increase would ensure that the first-past-the-post system was retained. In short, the politicians of the time tried to deceive the people. Did that work? No. The MMP system was voted in, and people still feel very strongly that there are too many politicians.

We are seeking to honour the intent of the 1999 referendum by reflecting the will of the vast majority of voters in that referendum. What did we do as politicians after the referendum was held? As one person said to me, the politicians put their snouts and their trotters firmly into the public trough and chose to totally ignore the wishes of the majority of the people of New Zealand. Why? Because politicians cannot always be relied upon to do the right thing and to act in accordance with the wishes of the majority. In this very instance, the will and the common sense of the people could have been relied upon. It appears that the majority of the people have been left out of the democratic process on this particular issue. Democracy is too important to be left solely to politicians.

The MMP Review Committee, which was implemented under section 264 of the Electoral Act, reported on various aspects of the electoral system but could reach no agreement on the issue of reducing the number of seats. It is time to look again and to look harder. New Zealand First believes that the reduction can be made without any adverse effect on the business of the House or its select committees. Some will argue that the valuable contributions of certain members will be lost. We argue that the issue is not about individuals keeping their jobs. Rather, it is about finding better ways of doing things and working smarter to achieve what the people overwhelmingly want. By reducing the number of list members by 20, there would be no change to the number of constituency seats or Māori seats. The proportionality that we currently enjoy in Parliament today need not be distorted in any way.

The overwhelming wish of more than eight out of 10 New Zealand voters is very clear from the outcome of that referendum. Those who claim that this is not so have their heads buried in the sand. This desire has not changed, and recent feedback from people throughout New Zealand, particularly via talkback radio, confirms that this desire to have less Government and fewer politicians still holds true.

I believe that it is timely for politicians to attempt to regain some public respect for the actual role or job that we as politicians have and seriously consider the issue by at least voting the bill through to a select committee. How many times do we as politicians have to be voted the least trusted people in society before we realise that by ignoring the will of the people and by distancing the clear public position from the review of the roles and the operation of Parliament, we are fostering that mistrust through our very own inaction? The public’s perception of politicians is totally negative. It is seen that we are prepared to use the public to get into power, and that once in power we do not want to listen again until we need the votes of those very same people. That tars us all with the same brush—as self-serving, and as looking after our own self-interest first. There are virtually no checks or balances. Politicians appear to do exactly as they wish, instead of placing the interests of the people first. Is it any wonder that New Zealanders feel powerless? They have no real say when the momentous issues facing society are decided.

When the current number of MPs in New Zealand is compared with selected countries that we like to compare ourselves with—Australia, Canada, and the UK—the New Zealand rate per 100,000 citizens is significantly higher. In Canada there is one MP per 100,000, in Australia there are 0.7 MPs per 100,000, and in New Zealand there are three Lower House MPs per 100,000. Different numbers will be quoted in this House, but the question must be asked, and it has been by the people: are New Zealanders getting good value from this representation? Government departments and businesses go through cost-cutting exercises to reduce unnecessary bureaucracy, and that certainly is an exercise that Parliament could carry out. With many MPs having been involved in cost cutting in the corporate world, they should be able to align themselves very closely with the reality of cost savings. Like all other workers, MPs would have to learn to work smarter for the good of New Zealand.

Estimated savings per year as a result of the bill will be $8.7 million in reduced salary costs, reduced funding costs for MPs, and members’ support funding. If we look at Vote Parliamentary Service, which includes both fixed and variable costs, depreciation, etc., we will see that the estimated savings are over $15.5 million per annum. Those additional funds could be used elsewhere in this country, in areas such as education, dental care, health—I could go on all night with that particular list. If, as politicians, we were looking at any other Government department or Crown entity, we would still be looking for and demanding those savings. Can we apply those same rules to ourselves? I hope we can be honest and do that.

In New Zealand, on 15 March 2006, this House has a rare opportunity to build some respect by heeding the will of the people. New Zealand politicians have the power to empower voters by supporting the Electoral (Reduction in Number of Members of Parliament) Amendment Bill to a select committee so that submissions may be heard and the issues around this proposal can be vigorously debated. I urge members to take that course.

Dr RICHARD WORTH (National): Thank you for allowing National to contribute to the Electoral (Reduction in Number of Members of Parliament) Amendment Bill. I start by congratulating Barbara Stewart, because I think that for any member of Parliament, it must surely be a high point when one’s member’s bill is drawn from the ballot and finds its way on to the floor of the Chamber for discussion and, of course, resolution. National’s position on the bill is that we support it going to the select committee. We are keen for the arguments that we heard the previous speaker propound to be tested. We are interested to see what submissions come forward in favour of the legislation. It would not surprise us at all if there was significant support, in terms of public submissions, for what is proposed in the bill.

The previous speaker recited the history of referenda that have touched on the number of members in Parliament. It is an interesting starting point to note that prior to the implementation of the MMP regime, the number of members of Parliament had crept up—if that is the right way to describe it—to 99. It is also relevant that in the referendum held on 27 November 1999, the results were starkly supportive of a reduction in membership. The question asked then was whether the size of the House of Representatives should be reduced from 120 members to 90 members. The answer was: yes, 81.5 percent; no, 18.5 percent.

However, issues relating to the reduction in the number of members of Parliament cannot be separated easily from the issue of MMP and the desirability of continuing the MMP regime, or of changing to some other form of proportional representation. I regret that the opportunity was not taken when the bill was drafted of having that related issue tested. Some would say that it is not a related issue, but clearly it is, because the consequences of passing this legislation and reducing the number of seats to around 100 would have implications for the MMP regime. In particular, it would create a likely increase in overhangs—with all the volatility that that may occasion. One of the realities of MMP that I do not think can be much doubted is that it has given huge power to the minor parties. It may well be an asserted advantage that MMP has forced the major party in power to seek consensus in the advancement of legislation, but MMP has also produced a disproportionate voting strength for the minor parties.

There was always, I believe, an understanding—flawed though it might have been—by the community that there would be another referendum on whether MMP would continue as our favoured regime, probably linked with the issue of parliamentary representation in terms of numerical strength. Of course, that public perception was wrong; what was held out was that there would be a review of MMP. That review was conducted in a previous Parliament, with quite clearly predictable results, given that the smaller parties made up the majority of the particular committee that conducted the review. That committee came to the view that MMP should continue. I should record that prior to the last election, National had committed itself to a binding referendum on the future of MMP, and that associated with that referendum would be a discussion on the number of politicians.

The previous speaker identified cost savings that may flow from the proposal. I am not sure what the extent of those costings truly is, but one can reasonably expect that there may well be substantial savings. Whether those substantial cost savings are offset by what may be perceived to be a loss of representation is an issue that will clearly confront the select committee. It is proposed that the number of list members may be reduced by 20. There will be no change to the number of constituency seats or Māori seats, and it is planned that the change will take effect at the next general election.

When we contemplate the future of the bill, and also contemplate the interrelationship that the bill has with the MMP regime, we may see that it is also timely to reflect on other systems of proportional representation that may serve Parliament better—if we are to be committed to a proportional representation system. I would plump for a form of proportional representation that did not find favour at the time with the Royal Commission on the Electoral System, which looked at those issues—that of the supplementary-member representation system. It is beyond the scope of this debate to get involved in any of the detail of that issue, but, in summary, under the supplementary-member representation system a proportion of seats in the legislature is filled by the first-past-the-post system, with single-member constituencies, and the remainder is filled from party lists, with parties needing to poll 5 percent of the vote in order to achieve representation. So the significant difference from MMP is that proportionality is confined only to the list seats. Therefore, a party that secured, say, 5 percent of the vote would have only 5 percent of the list seats, and not 5 percent of all the seats in the legislature. One of the advantages of the supplementary-member representation system is that it allows smaller parties to secure representation in the legislature without having disproportionate power, as is the case under an entirely proportional system.

The other day I was interested to hear Barbara Stewart, the proponent of the bill, ask a series of questions of the Government, seeking to ascertain whether there would be support for her bill from the Labour Party. The answer was a clear no. Labour will not support the legislation, so there is a contrast between the positions of National and Labour. But Barbara Stewart went on to ask a further question, which I thought was a very legitimate one. The question was whether Labour would contemplate a further referendum—perhaps a binding referendum—being held on the issue. That, in fact, formed the basis of the question. The answer to that question was no. I argue that we should always regard our constitutional arrangements as subject to review. They are not issues that stay sealed in concrete, so it is a pity that Barbara Stewart secured that response to her question.

I hope that in the short time that the Government continues in office in the future, it may be prepared to contemplate changes to the constitution of the type that are presaged by this particular bill. As I have indicated, I would rather have seen a reduction in the number of members allied to a proposal for a different form of proportional representation—if we are committed to a proportional representation system—because the problem that the select committee will have to confront is the implications, in the context of MMP overhangs, if this legislation is given effect. But I would argue that if we do have too many members of Parliament, it is appropriate to look critically at that issue.

BARBARA STEWART (NZ First): I raise a point of order, Madam Speaker. At the appropriate time, I intend to move that the bill be considered by the Justice and Electoral Committee, with a standard 6-month report-back time.

The ASSISTANT SPEAKER (Ann Hartley): The member seeks leave for that. Is there any objection? There appears to be none.

Hon MARK BURTON (Minister of Justice): I am pleased to join this debate, although not so pleased to have the member who has just resumed his seat misrepresenting what actually took place in question time yesterday. But I suppose that is something I have become accustomed to, from that member. However, I find myself in some agreement with some of what he said, surprising as that may seem. I will start by acknowledging what I think is the genuine intent of the sponsor of this bill, Barbara Stewart. She has raised some issues that are legitimate to raise, but one of the concerns I share in part with the National member, Dr Worth, is the fact that this, in effect, is a piecemeal approach—an attempt to tweak the current electoral legislation—and I think therein lies one of its fundamental flaws, as a bill. To try to modify one piece of the electoral arrangements without looking at the implications and flow-on effects to the whole is almost certainly always going to produce more problems than it may set out to solve—if indeed the problems are real, as suggested by the member.

We have heard reference to the Royal Commission on the Electoral System of 1986, and I think we should bear in mind that the royal commission specifically recommended that if New Zealand went down the path of a mixed-member proportional representation system, it needed 120 MPs in order to populate that system and to make it work effectively. So that was not some arbitrary decision made—as perhaps the impression might have been given—by politicians for some personal reason; rather it was specifically the recommendation that was the backdrop to the change in our electoral system that ultimately took place in the 1996 general election, following the 1993 referendum.

So I think we should look very seriously at the warnings and guidance given by the royal commission, in saying that the need for 120 members of Parliament was proven by the extensive process it went through. The commission talked about the risks in reducing the size of Parliament in terms of the relative reduction in the effective scrutiny of the executive. That should be a matter of real concern to all members of the House. I happen to sit on this side of the House at this point in my political career, and I am a member of the executive, but I still believe passionately, as a democrat, that there must be effective scrutiny of the executive. Frankly, one of the by-products of MMP, as was predicted at the time, has been a serious increase in the role and the influence of the select committee process, and we need to have enough members of Parliament to operate those committees effectively, and for members to be able to do their jobs thoroughly. Again, the royal commission was mindful of that when it talked about the need for 120 members of Parliament.

The other thing that is of concern to me, and Barbara Stewart may unintentionally have done it today, is that we see perpetuated the idea that New Zealand has a relatively large number of members of Parliament. That simply is not true. The example was given of Australia. It is very popular for people who want to make this argument to be very limited in the information they provide. Australia does indeed have 150 members of Parliament in its Federal Lower House, and a dozen for each of its states in its Upper House. It has a bicameral system. But what the member forgot to mention, of course, is that it has states. It has six states and two territories, and we can take one of the larger ones, Queensland, as an example. If we add in the Legislative Assembly numbers, there are 129 elected representatives for Queensland. If we look at Victoria with its two houses, the numbers are even greater. It has 44 and 88 members respectively added to its Federal representatives, to give a total of 228 elected representatives for a population of a little over 5 million.

The point needs to be made that there is a cost to having a democracy: it is an adequate number of elected representatives. We mess with the structure in one part, without looking at the whole, at our peril. I certainly think that, good intention or not, this bill is a matter of ad hoc tweaking around the edges of the system—I think, in the case of the member moving it, with sincere intent. But for some others it is a purely political expedient, and I am concerned about that. The Labour Party will not support this bill, because in the end any major addressing of the electoral arrangements for our country should be handled comprehensively, not in a piecemeal way.

NANDOR TANCZOS (Green): Here in Aotearoa we are very fortunate to have one of the most representative Parliaments in the world. We have a very good balance of genders in this Parliament. Compared with many legislatures, we have quite a high representation of women, one transsexual MP, and a broad array of ethnicities. There is an MP who is Asiatic, an MP from Pakistan, and I myself am an MP who is descended from Hungarian and African—

Hon Mita Ririnui: A few Poms.

NANDOR TANCZOS: There are quite a few Poms, yes. In this Parliament we have a broad representation of different ethnicities and, in particular, a very strong representation of indigenous people. That again, I think, is a rarity, at least among colonial nations. We have quite broad religious diversity. We have a Muslim MP, a Rastafarian MP, and MPs who probably practise traditional Māori spirituality, although I have not specifically asked about that of members. We have a great deal of diversity, and that is a direct result of MMP.

Something I hear a lot in this country is people saying that although they support that diversity in Parliament, they do not always agree with what representatives of that diversity have to say. What they do value is the fact that that representation is here—that the diversity of voices and all those different perspectives are represented in this Parliament. I believe that plays a strong role in what I consider to be a pretty good social cohesion in this country. People are willing to deal with conflict by sitting down, talking about it, and negotiating it, rather than by resorting to violence. I think it is because people, at least to some degree, feel represented in decision-making places, like Parliament.

Unfortunately, I believe that this bill would significantly reduce that representativeness and that diversity. New Zealand has one of the most open democracies in the world, with public involvement directly in legislative decision-making through our select committee process. The Minister, the Hon Mark Burton, referred to that. Most people in this country probably do not have a very good idea of what select committees are and what they do. They are the powerhouse of this Parliament. They are where the bulk of the work of members of Parliament actually takes place. The number of MPs is absolutely crucial to select committees being able to do their work effectively, and that was one of the quite specific reasons why the Royal Commission on the Electoral System recommended the number of 120 MPs.

I can tell members that the select committee I sit on, the Justice and Electoral Committee, deals with pretty heavy pieces of legislation. We have just been dealing with the Lawyers and Conveyancers Bill, which is a significant rewrite of the law and regulations governing lawyers and how they operate. On that committee are three members who have practised as lawyers: Richard Worth, Russell Fairbrother, and Christopher Finlayson. This is a pretty crude way of saying it, but if we just knocked off the last 20 list MPs in the current Parliament, then we would find that both Russell Fairbrother and Christopher Finlayson would not be there. I cannot begin to imagine what a loss that would be for our select committee, because the work that those members do—although I do not always agree with their points of view—is extraordinarily valuable. The expertise they bring to issues is absolutely invaluable for those of us who do not have a legal background. I think it would be a tragedy to lose those members, which would be the direct result of this bill. This bill would make select committees less effective.

My problem is also that the bill does not affect the real concern I think people have. A lot of people in New Zealand intuitively like the idea of reducing the number of MPs, because they are sick of the infantile behaviour that goes on in this Chamber just about every day. It is unfortunate that if that is the concern, this bill will not address it. In fact, it will be counter-productive. I have not done the figures for the new Parliament, because there is a new intake of MPs. But Rod Donald addressed this very question in 1999. He pointed out that the 21 lowest-ranked MPs who would lose their seats were the best-behaved MPs in Parliament. Not one of them was expelled from Parliament, compared with five constituency MPs and three higher-ranked list MPs who were. Only four of them had to withdraw and apologise, compared with over half of all constituency MPs and almost half of the high-ranked list MPs. By tossing out the best-behaved MPs in the House the behaviour in this Chamber would actually get worse. The measure would be absolutely counter-productive.

Mr Burton has already referred to the royal commission’s recommendations. One of the points the commission made in arguing for 120 MPs was to ensure that the executive was not able to use its numbers to dominate the Government caucus, and through them the Parliament. For example, I know that ACT members have often stood up to support the rights of Parliament and the ability of Parliament to challenge the executive. I am surprised to see the ACT party supporting this bill, because I think—

R Doug Woolerton: Mr Prebble used to do that.

NANDOR TANCZOS: That is right, and I respected his contribution in that regard, because it was genuinely a concern for the rights of Parliament. I think it is a shame that the ACT party is supporting this bill. It would tip the balance in favour of the executive and it would make this Parliament less representative and less effective.

Dr PITA SHARPLES (Co-Leader—Māori Party): There is a familiar saying in Māoridom: anō ko te mārama kua ngaro, kua ara anō—which can be interpreted as: just like the moon that disappears and rises again. And, indeed, just like the waxing and waning moon, Māori electors will continue to believe in the right to full and effective Māori political participation, whatever permutations of electoral reform come before the House—like the latest today, the Electoral (Reduction in Number of Members of Parliament) Amendment Bill.

We support the right of all New Zealanders to be able to describe the type of electoral structures they want to see in this Parliament. That is why we are supporting this bill to go through to the select committee. It is about walking the talk. If we really are about power to the people, then we must let the people have the power to determine the preferred political structures for this Parliament. In speaking up for the right of people to speak up, we do so mindful of the need for checks and balances, which in itself is a logical outcome of an MMP environment.

Essentially, this bill affects the proportionality of Parliament. It is therefore incumbent upon the select committee to turn its mind to the increasing and compelling challenge of diversity. The challenge before this Parliament, and therefore of this bill, is how we adequately reflect diversity, whether it is to be with 99 members or 120. Today’s bill seeks to return Parliament to the situation of the Parliament of 1993, the last of the Parliaments elected under first-past-the-post rules.

I think it makes for an interesting comparison to look back to first past the post in 1993, and to contrast it with the implications of MMP in 2006. In 1993 0 percent of the Parliament was Asian; in 2006 1.6 percent of current MPs can claim Asian ethnicity. Pasifika representation has grown from 1 percent to 2.5 percent, and Māori representation has grown from 7 percent to 17.3 percent, which is about proportional to that of the population, and growing. The questions we need to be asking ourselves are: What would be the overall effect if the numbers were actually reduced? Is it desirable that our Parliament reflect diversity and, if so, how do we preserve that diversity?

I am reminded of an organisation called the One New Zealand Foundation, which raised its ugly, monocultural head during the halcyon days of the 1980s, when Government recognised the value of Māoritanga within the public service. Indeed, the Labour Government of that day, through the policy document of Pūao-te-ata-tū courageously recognised and acknowledged the existence of cultural, personal, and institutional racism that existed within the Department of Social Welfare. The right-wing conservative reaction to documents such as Pūao-te-ata-tū was led by organisations like the One New Zealand Foundation—an organisation opposed to the Māori world views and certainly opposed to diversity. We will be supporting this bill to go to a select committee because we firmly believe that dialogue about diversity, about representation, about accountability, and about checks and balances needs further airing in this Parliament.

We are pleased this bill states that there will be no changes for Māori seats as a result of this bill. Tangata whenua throughout Aotearoa in just 2 weeks’ time will be making a clear political statement about their preferences for electoral representation. Between 3 April and 2 August the Māori nation will experience profound political change as they participate in shaping the lie of the land, electorally, for Māori electorates. The bill states there will be no change in Māori seats, but there will, very likely, be a change in Māori representation. While the Māori Party is happy to let the bill go forward to the select committee, it is concerned that, despite this bill appearing to favour elected parties such as ours—and that should make us happy—and despite what we may see as muted Māori voices in other parties in this House, the bill in its current form may have the likely effect of eliminating Georgina te Heuheu, the colourful, irascible Tau Henare, Winston Peters, who is the Māori father of the House, Pita Paraone, Shane Jones, and Metiria Turei, all of whom add colour, flavour, pizazz, and intellectual grunt to the House.

As we know, the moon will continue to move, whether it is over Taupō, Auckland, or Tonga, and with such movement Māori will continue to fight for their right to democratic and effective political representation. We hope the select committee process will enable all New Zealanders to have a say as to the best possible mechanism for having real political power.

RODNEY HIDE (Leader—ACT): Congratulations to Barbara Stewart on taking the trouble to prepare this bill and put it in the ballot, and having the luck of bringing it out. I thank her for that. This bill and debate mark a big difference in the parties in this House, because our democracy and our Parliament do not belong to us, the politicians; they actually belong to the people of New Zealand. It is the people of New Zealand who should be saying how our democracy should be run. We see this in the parties in this House: New Zealand First, the Māori Party, the ACT party, and the National Party want to hear from New Zealanders. We want New Zealanders to have a say. This is their Parliament. It is their democracy. We have the Greens and the Labour Party—the authoritarians—not prepared to let New Zealanders have their say about how many MPs there should be.

R Doug Woolerton: Very sad.

RODNEY HIDE: That is very, very sad, and it goes to the true colour of the Green Party and the Labour Party. What is wrong, pray tell, with letting New Zealanders have a say about how many MPs there should be? After all, it is their democracy, and they are the ones who have to pay for it. Is it the case—and I think it is—that the Green Party and the Labour Party do not trust New Zealanders, that they do not think New Zealanders are clever enough or smart enough to actually have a say? The one time that we had New Zealanders having a say, over 80 percent of them said: “We favour 100 MPs.” But the Labour Party and the Green Party are saying that those 80 percent have got it wrong, and they are not even prepared to send this bill to a select committee to give New Zealanders an opportunity to come forward and have their say.

It may be that the Green Party members disagree with this bill, but they are doing something stronger than just voting against a reduction of MPs. They are voting against the opportunity for New Zealanders to have a say. That is what I find so sad about the Green Party and the Labour Party on this. Yes, there is an argument to be had over 120 versus 100 MPs. I personally favour 100 MPs. I think that would be a far better Parliament. But what I do believe is that it should be the people of New Zealand having a say. Nandor Tanczos and the Green Party, and Mark Burton and the Labour Party are not voting against 100 MPs; they are voting against New Zealanders having a say.

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

Hon PETER DUNNE (Leader—United Future): I want to begin by congratulating the member Barbara Stewart, who has brought this bill to the House, because she has focused attention on what is a critical issue for a number of people. But I say to her that although we respect her ability in bringing the bill forward, United Future will not be supporting it.

I want to outline the reasons why. This bill essentially proposes to take the House back to where it was in 1993, prior to the introduction of the MMP electoral system, by providing for 100 members of Parliament. One of the immediate difficulties that arises is that between 1993 and the present the population of New Zealand has increased by just under 18 percent, yet this bill contains no mechanism for recognising that adjustment. In fact, if we were to go back to the point we were at in 1993 and calculate the number of seats on the same basis that we would have at that time, Parliament would now comprise around 115 or 116 members. So we see little point in going back to a situation whereby we might end up pretty much back where we were at the time before the Electoral Act was passed. That is the first point we have, by way of difference with this bill.

The second point deals with our MMP system. I note—and I assume from the member’s comments—that there is no intention to overturn that, so this would be MMP with fewer members than we have at the moment. But the bill does not specify the split between list and electorate seats. I want the House to recall that at the time MMP was introduced it was argued that for the sake of proportionality we needed to have a fifty-fifty split between list and electorate members. In fact, we have never had that because the MMP system effectively caps the number of seats at 120, barring overhangs, and any adjustment upwards in the number of electorate seats is at the expense of list seats. So instead of having 60 list seats and 60 constituency seats, we now have 69 constituency seats and 51 list seats. That problem will get worse as the population increases. Adjusting downwards the number of members of Parliament will simply exacerbate that, in the absence of any wider consideration of the nature of the electoral system.

We say that the bill is well intentioned and I recognise the work that Margaret Robertson and her supporters did, back in 1999, and the public mood at the time, but the bill would not work as it is currently drafted. The issue that I think we ought to be considering, frankly, is not so much whether we reduce the number of members of Parliament, but, when the current system is reviewed, should we maintain the fact that there is no upward cap? How long can we go on increasing the number of general seats by three or four each census period—and maybe one or two more, depending on the outcome of the Māori option—at the expense of list seats, before we seriously disturb the proportionality within the MMP system at the moment? It is already quite seriously disturbed. The idea that we have one for one never eventuated even in 1996, and as I say the deficit is now 18. I imagine that on current population projections it will be somewhere over 73 or 74 general seats at the next election, and we will be down to about 45 or 46 list seats. That will carry on. Until we address that point by considering whether we need a cap, we will not make progress.

I respect the member’s motives entirely and, as I say, I congratulate her on her initiative, but the changes proposed in this bill would not work. The bigger issue that the Justice and Electoral Committee needs to look at is how the current system works, how long we can tolerate the imbalance between list seats and electorate seats that we have at the moment, and whether the number of voters per constituency seats should be reviewed, or whether we should look at removing the cap on the number of seats altogether. Until we do that, we will not get the benefits of MMP that its advocates ascribed to it all those years ago. I think that is the area we should be making our focus.

R DOUG WOOLERTON (NZ First): Naturally I want to speak in favour of the bill. Although we accept the arguments made by Peter Dunne, we nevertheless believe that Parliament can operate perfectly well with 100 members, and we see no reason why that should not happen almost immediately. This bill is the result of a referendum in which the public of New Zealand spoke overwhelmingly in favour of a reduction in the number of MPs, and we are following through on that. If you like, it could be described as our listening to the people. At the very least, we believe that this bill should be sent to the Justice and Electoral Committee, so that it can be openly debated and people can make submissions upon it. They can bring their arguments to the table, and we can hear what they have to say. As Mr Rodney Hide pointed out, this is the Parliament of the people of New Zealand; it is not our Parliament. We are merely the people’s representatives.

I know that other speakers have mentioned that there could be an overhang, and I think it was Mr Worth who said that that could lead to increased instability. All I want to say to that comment is that we have an overhang now, as far as that goes, and there is no instability in the House, as much as some people would try to make it appear to be so. We do not believe that just because there is an increased likelihood of an overhang, that would necessarily lead to any sort of instability.

We cannot let this chance go by without talking about the benefits MMP has brought, at least to our mind, to the Parliament of New Zealand. We have far wider representation now, under the MMP system. We believe that would continue with 100 members, and we believe it is important that it continues. We have to speak also about the select committees. Other people have said that the select committees now, under MMP, are far stronger than they ever were, and that is certainly true. I am told by visiting MPs, and by people whom we come into contact with overseas, that we are at the forefront of world practice as far as the use of the select committee process goes. Our select committees indeed do have real power. We do not accept that lowering the number of, in this case, list MPs will change that substantially. Again, the practice at this time is that not all select committees have a proper representation of the parties on them, because of the number of votes that are achieved by the two biggest parties.

It is not as though we want to review every detail of the MMP system. This is a clearly set out bill, for one purpose and one purpose only. It responds to a public call for fewer MPs in Parliament, and that is exactly what the bill provides for. We believe that referring it to the Justice and Electoral Committee will provide a great chance for that committee to discuss the wider issues regarding the electoral system, but we believe that it would be absolutely wrong, and misleading in fact, for those issues to be included in this bill. There is no question that they will be debated as part of the discussions on this bill, and we think it is right that that should be so.

Obviously, we are seeking support for this bill. We hope some of the parties that currently oppose it will see the wisdom of our arguments and change their minds.

LINDSAY TISCH (National—Piako): It is a privilege to be able to speak on a very important piece of legislation under the Electoral Act that could affect the way we operate in the future, and I congratulate Barbara Stewart on bringing this bill forward. It is not the first time we have debated the number of MPs, the composition of the House, and the electoral system. Jenny Shipley had a similar bill, and it was carried through and picked up by Simon Power.

But it is also interesting to note that although New Zealand First is promoting this bill, it did not take the opportunity to make submissions when the review of MMP took place in 2001. I think it is significant that New Zealand First, which is now championing the cause of having fewer MPs, had the opportunity then to make submissions. I will read from the paragraph headed “Invitation to join the Committee” in the report of the MMP Review Committee on the inquiry into the review of MMP: “All the political parties represented in the House were invited to participate in the review of MMP by nominating a member to join the committee. The ACT, Alliance, Green, Labour, National and United parties all did so. The New Zealand First party declined to participate. In addition to this, all the parties in the House were invited to make a submission to the committee on the review; all did so with the exception of the New Zealand First party.”

In the context of what transpired in the past and what we are seeing tonight, I am pleased that Barbara has moved forward. I do not know whether this is a change for the New Zealand First Party, but in our view it is a move in the right direction. Way back in 1999 a citizens initiated referendum was held, which was significant because 1.7 million people—81.5 percent of those who voted—voted for a reduction in the number of members of Parliament. That was a huge indication of public support for a change to the number of MPs from 120 down to 99. Yet here we have a Government that tonight is saying it will not support this bill.

Hon Member: It’s a shame.

LINDSAY TISCH: It is a shame. It is an absolute disgrace that a party is not taking note of what has been advocated and voted on in a referendum whose result was overwhelming. In 1999, 81.5 percent—1.7 million New Zealanders in total—of the New Zealanders who voted in the referendum said they wanted the number of MPs reduced from 120 to 99. What do we hear tonight? We hear that, no, the Government will not participate. It will vote against this bill.

Let me remind members of what Jim Anderton said, who, I suppose, will vote with the Government tonight. On 3 August 1993 Jim Anderton spoke in the debate on the Electoral Reform Bill. I will quote from Hansard, Volume 537, at page 17130: “I also give notice that on behalf of the Alliance I will be moving an amendment to reduce the number of seats in the referendum about MMP to 100. That is, 60 constituent seats, 4 Maori seats, and 36 list seats—enough seats to ensure proportionality …”. Here is a member of the Government propping up this minority Labour Government. I will be interested to see whether Mr Anderton’s party of one will actually subscribe to the fact that in 1993 he said that there should be a reduction in the number of MPs.

This Government, with the Greens supporting it, is saying no to public feeling. It will stand against this bill going to a select committee. I give notice to the Labour Government that this sort of insult to what New Zealanders want—which is the accountability, flexibility, and transparency that a reduction in the number of MPs would give, if the bill were allowed to go to a select committee—will be the Government’s downfall. Do members know why MMP was introduced and why we had 120 members? The reason was that there would be a large pool of people to fill ministerial positions. Well, what have we seen in the last couple of days? We have seen the David Benson-Pope saga. Has having 120 MPs added to Parliament’s value, tradition, or credibility? The answer is no. In the last couple of days we have seen Chris Carter with a problem relating to the Whangamata marina. That is the sort of thing that happens. We have too many MPs. We need to reduce that number and support New Zealand First in this bill.

LYNNE PILLAY (Labour—Waitakere): I rise to say, quite clearly, that Labour does not support this bill. We heard from the Opposition that it was the will of the people to reduce the number of MPs. The non-binding citizens initiated referendum took place in 1999 after three terms of a National Government. There was disillusionment among the people, and I did not blame them, as I too felt pretty depressed after the end of those three terms. I truly believe that that vote was a vote of no confidence in the National Government. In fact, people voted with their feet, and that resulted in the election of a Labour-led Government. I do not believe, though, that that was a true indication of the feeling of people at the time.

I have a lot of respect for Barbara Stewart. She is a very well-meaning member. But to amend the Electoral Act to reduce the number of MPs from 120 to 99 would mean we would lose a lot of skills and diversity within our Parliament. It is very important to both our Parliament and our society to have that diversity. I know that the National Party does not think so. If we look across to the National benches we see that those members have burnt off most of their people who are not white or middle-aged—and probably male, in most instances. But enough of their leader—let us talk about the bill.

This legislation has a number of problems. Reducing the number of MPs would reduce the number of members available to sit on select committees. I want to talk about the Justice and Electoral Committee, which is a very hard-working and, I think, effective select committee, and it has pretty good leadership. The Labour members on that, who comprise a combination of electorate and list MPs, contribute greatly to the committee, as does Nandor Tanczos, a list member from the Green Party. Chris Finlayson, who is a list member, also contributes a lot of common sense to the committee. We may not always agree on everything, but it is an indictment on the National Party for it not to acknowledge the contribution made by its list members.

We in Labour are not like that. Our new people who came in under this Government include Darien Fenton. She is a real asset to this party. We have Maryan Street, who has had a very diverse background, including in health. Sue Moroney played an integral part in the changes to the racing situation—or will, some time in the future. We know that Shane Jones is a real asset to our party. This would not have happened if we did not have the numbers associated with MMP.

I accept that on the other side of the House—and I know from my own electorate—we see from time to time some list members who really do not pull their weight. My sympathy is for the National Party in that, but that is no reason to cut the numbers of MPs.

Professor Nigel Roberts, head of political science and international relations at Victoria University, has said quite clearly that if we lop off 20 list seats, there will be problems. The fewer list seats available, the greater the chance there will be an overhang. In terms of getting a representation that is truly representative of New Zealand—as we see in other parties in this House but certainly not in the National Party—it is really, really important to retain those numbers. I am proud that Labour is being upfront in opposing this bill.

BARBARA STEWART (NZ First): I begin by thanking my parliamentary colleagues for their very careful and considered debate on this bill, for the many replies to the letters I sent to everyone, and for their support.

This is not an easy issue for politicians to deal with as it directly affects them, and that is what we have heard tonight. There is not one of us here in this House who does not believe it is a true privilege to be here representing the people who gave us their trust and their hope that we would make New Zealand a far better place to live in. It is fair to say that we all do our very best to do that. However, the bottom line is that Parliament should be a more responsive and accountable institution and should aim to give real power to the people. That is the basis of any democracy.

For the people of New Zealand, this issue is really simple. The overwhelming majority want less government and they see that one way of achieving that is to have fewer politicians. Many voters believe that one of the main disadvantages of MMP is the number of MPs. Opponents of a reduction tonight have stated that it would make the House less effective, less stable, and would result in an overhang. An overhang is something we currently have.

However, it is time we had a good look at ourselves and our processes and learnt how to work smarter—like the rest of New Zealand. It is certainly past time for this House to be responsive to the will of the people. An appropriate response is to support this bill to amend the Electoral Act going to a select committee. More than eight out of 10 voters have asked for that; I ask members again on their behalf to ensure that this bill can be subject to public and parliamentary scrutiny.

A party vote was called for on the question, That the Electoral (Reduction in Number of Members of Parliament) Amendment Bill be now read a first time.

Ayes 61

New Zealand National 48; New Zealand First 7; Māori Party 4; ACT New Zealand 2.

Noes 60

New Zealand Labour 50; Green Party 6; United Future 3; Progressive 1.

Bill read a first time.

Bill referred to the Justice and Electoral Committee.

Bills

Employment Relations (Probationary Employment) Amendment Bill

First Reading

LINDSAY TISCH (Senior Whip—National): I raise a point of order, Mr Speaker. I give notice that National will be splitting this 10-minute call between Dr Mapp and Dr Brash.

Mr DEPUTY SPEAKER: Thank you for giving notice of that, Mr Tisch. That is the way we will proceed.

Dr WAYNE MAPP (National—North Shore): I move, That the Employment Relations (Probationary Employment) Amendment Bill be now read a first time. This bill is critical to the growth and productivity of New Zealand, and surely that goal is shared by everyone in this Parliament. The real question that parties in this Parliament have to answer tonight is whether they are willing to do the things to make that happen, as opposed to simply talking about it.

Hon Member: We will!

Dr WAYNE MAPP: Very good. The bill is quite straightforward. It provides for an automatic probation period of 90 days for new employees. During that period the expensive, cumbersome, and litigious personal grievance procedures in the Employment Relations Act will not apply automatically. I will be moving later this evening—hopefully—that this bill should be considered by the Transport and Industrial Relations Committee.

At this point, I say to Labour and Green members in particular that fundamental conditions of employment will be protected. So that there is absolutely no doubt about it, the bill has a specific savings provision to protect access to the Human Rights Commission. Clearly we cannot have a situation where sexual harassment could be permitted. Wage claims will also be protected, as will fundamental statutory conditions around holiday entitlements, sick leave, and so forth. They are, in fact, covered by a different statute in any event.

So it is simply absurd to suggest, as some have said in press releases today, that National wants employment at will across the board. This bill is absolutely middle of the road. It brings New Zealand into line with not most of the OECD but all of the OECD. We are the outlier at the moment as a nation. For instance, in the United Kingdom under the Blair Government, which has now been in office for nearly 10 years—

Chris Auchinvole: A Labour Government.

Dr WAYNE MAPP:—and which is a Labour Government, as everyone knows, the probation period is 12 months. In Australia, it is currently 3 months and is likely to be extended somewhat further. In Canada, the period is 3 months; in Ireland—a country many of us admire—it is 12 months. Who could possibly suggest that any of those countries are hard on employee rights? Those countries have better living standards than New Zealand. The countries of Europe—and, indeed, Scandinavia, which is often admired by our current Government—also have probation periods.

What we are doing here is getting our employment law right to boost productivity so that we are competitive and can make the critical gains necessary. Even Treasury, in its briefing to Government this year, talked about the inflexibility of the current employment law. Business New Zealand, which has been very careful to consult the Government on a whole range of things—and the Minister of Labour knows this well—has said it is the most important thing in employment law.

Some people will say this legislation is really just another device to oppress workers. The answer is no, and the facts speak for themselves. New Zealand’s youth unemployment rate is 12 percent and Māori youth unemployment is as high as 14 percent, whereas general unemployment, at 3 percent, is substantially less. So young people are the group we are aiming at primarily. They need to get that first job.

New Zealand is a country of small employers and many of them are concerned about costs. So they need to have the confidence, and young people need to be able to say to employers: “Give me a chance to demonstrate my ability.” That is what this bill is about—boosting employment opportunities for the advantage of New Zealanders.

It has been a pleasure to introduce the bill, and I look forward to hearing the considered arguments of all the parties.

Dr DON BRASH (Leader of the Opposition): I rise to support the Employment Relations (Probationary Employment) Amendment Bill, because I believe that it is one of the most important pieces of legislation to come before the House this year. Why do I say that? Partly, because if the bill becomes law it will do enormously positive things for businesses, large and small, in this country. The Government’s own Small Business Advisory Group has made that absolutely clear not once but twice. It describes probationary periods as “the single most important changes that could be made to the employment legislation”. The Small Business Advisory Group went on to state that such probationary periods “would lead directly and immediately to employment and business growth.” Essentially, that would be sufficient reason to support the bill even if it had no other positive effects, but in my view that is not the main reason for supporting the bill.

Chris Auchinvole: What’s the main reason?

Dr DON BRASH: The main reason to support the bill is that it would provide help to the most vulnerable people in our community. Dr Mapp made the point that despite the generally low unemployment rate, the unemployment rate for youth—people aged between 15 and 19—is 12 percent. The bill would help immigrants who come into the country with relatively poor English language skills. It would help women who wanted to re-enter the workforce after a period of raising children. It would help people who had served a term in prison and then wanted to re-enter the workforce, and it would help those who had been unemployed for a lengthy period. Unemployment rates among all those groups are very high indeed, despite the buoyancy of the economy.

Why is that? Because employers are reluctant—sensibly—to take a risk on those people. If the employment relationship does not work out, employers have the very dickens of a job to end it. It is costly in terms of time and money to end the relationship. So employers say: “No, thank you very much. We won’t take on the person who has been out of the workforce for some time, or who hasn’t had a job before, or who had a prison sentence 2 or 3 years ago.” They will not take the risk.

The National Party does not want to play petty party politics with this issue.

Hon David Carter: It’s too important an issue.

Dr DON BRASH: It is too important an issue, as my colleague David Carter says. I want to appeal to every member of the House to recognise that this bill is absolutely crucial to helping the people I have talked about: the people who are young and have not had a job, the women who have been out of the workforce, the people who have had a prison sentence, the immigrants who have come into the country without good English language skills, and the long-term unemployed—those are the people whom we are talking about tonight. I ask every member of this House when considering how to vote on this bill to reflect on those people.

Let me particularly ask the members of the Māori Party to do that, because the Māori community has unemployment rates that are unacceptably high. This bill would have a huge benefit to young Māori who have not been in work, and who are coming out of provincial New Zealand into urban New Zealand. The bill would have a huge benefit to all those people.

Hon RUTH DYSON (Minister of Labour): Labour will oppose the progress of the Employment Relations (Probationary Employment) Amendment Bill. It is unfair, it is unnecessary, it is bad for employers, and it is bad for employees. The bill treats new staff members as tradable commodities, and it is a disgrace in terms of respect in our workplace relations.

Labour believes in positive workplace relationships, and that has been the basis of our legislation over the last 6 years. We have worked hard to achieve positive workplace relationships, and in my view we should continue on that path. This bill from the National member gives employers the power to sack people within the first 3 months, for no reason. That is the purpose of the bill. It is certainly not conducive to a climate of positive workplace relations, and it takes us back to the divisive, confrontational times of the 1990s. The bill will further constrain the movement of skilled workers in an already very tight labour market, and it will reduce movement and flexibility within the labour market. We have the lowest unemployment rate in the OECD. New Zealand needs to attract labour, not to scare it away.

It is really clear from Dr Mapp’s speech—and he shared this with his current leader—that he has no idea that the Employment Relations Act already allows probationary periods. That opportunity is already given within the existing Act. Dr Mapp also said that it would not matter if we took away employment relations rights with his bill, because people could go to the Human Rights Commission. He clearly forgot that the PC eradicator has said we should also abolish the Human Rights Commission because it was PC gone mad. So Dr Mapp believes not only that we should have no employment relations rights under the existing Act but that we should get rid of the Human Rights Commission, and that legislation, as well.

A World Bank report states that New Zealand is the best country in the world for doing business in. The National Party can say that the World Bank is wrong. I ask Dr Brash whether the World Bank is wrong. It obviously has not listened to his advice; it was right when it sacked him—that was probably the best move it made. But the World Bank says we are the best country in the world to do business in, and I prefer to listen to its advice than that of Dr Brash or Dr Mapp.

Hundreds of thousands of new employees every year, under Dr Mapp’s legislation, would have no employment rights for 3 months. It would affect the people who are at the most vulnerable point in their employment relationship. From day one, what they should be getting is support and encouragement, to ensure that they are good employees and that their employer is a good employer. Most workers in New Zealand have, on average, six jobs in their lifetime. So that is six times in the life of an average New Zealander when, for 3 months, he or she would have no employment rights at all.

The key issue for New Zealand in relation to the labour market should be how to attract workers with skills, not how to sack them and how to take away their employment rights. We are competing hard in a global economy. Why would any worker want to take on the challenge of a new job, when he or she would have no employment rights for the first 3 months?

Hon Members: Read the bill!

Hon RUTH DYSON: I have read the bill, I know what the bill states, and that is exactly the point, the purpose, and the detail of the bill. I know what is in the bill. For the first 90 days—the first 3 months—there would be no employment rights, at all.

So to set up a probationary period is not only unnecessary—such a period is already an option under the Act—but would literally take away all employment rights. Every year 200,000 New Zealanders would have none of those existing rights. This legislation would remove their right of appeal for unjustified dismissal in the first 3 months, in addition to removing their rights in terms of any unfair discrimination. So they could be discriminated against because they were too old—as the leader of the National Party may be assumed to be by some unfair employer—or because they were too brown, too white, too male, or too female. If there was any discrimination at all—someone may be considered to be too young, as the leader of the National Party may be considered to be by another employer—the employee would have no right of redress under Dr Mapp’s bill.

Protection from any unfair discrimination would go under this legislation, and any people who were sacked because they were Māori, Pacific Island, or women would have no legal redress at all under the Act. Why would we want to do that? Why would we, as a Parliament, want to say that someone should have no employment rights or legislative cover to take an unfair dismissal case? If we wanted to see the Human Rights Commission with a big, long queue of people outside it, that would be fine, but the way of the Employment Relations Service is a sensible way of resolving those disputes, without going through the employment relations disputes procedure.

In my view, this bill attempts to fix a problem that does not exist. It offers the solution of a probationary period that is already available under the law, and takes away rights that are quite fundamental to a new employee. The basic employment rights of New Zealanders should be protected from day one. [Interruption] Read the bill, and you will find out you are wrong—I cannot remember the member’s name. I am sorry, Mr Deputy Speaker, I did not mean you, but I could not recall that member’s name. That is the first contribution I have heard the member make to the House. Under section 67 of the Act there is provision for a probationary period, so all the concerns that Dr Mapp and Dr Brash raised already have that opportunity to be addressed under the existing legislation. But the Act does not take away people’s right to go for mediation or arbitration if they consider they have been unfairly dismissed, or if they want the right to fairly negotiate their wage.

In my view, what Dr Mapp’s bill would do would be totally ignored by the overwhelming majority of good employers in New Zealand, because they will continue to go through a fair process with their employees, but it would give the bad employers a legal out to treat their workers badly. It would incentivise sloppy management. It would give bad employers a legal protection against the unfair dismissal of their staff. The lawmakers need to recognise that supporting employers and employees by creating a legislative environment where there are healthy and productive workplace environments, and where all employees and employers can treat each other with respect and fairness, is the best contribution to productivity that New Zealand can make. Why would New Zealand want to go back to the division of the 1990s, when our most vulnerable employees—people who are Māori or Pacific, or young or old—while they are in the first 3 months of their job and are trying to do a good job, can be sacked for no reason and have no legal protections?

This bill is one of the biggest steps back that New Zealand could make, in terms of looking at the challenges that the global market poses to New Zealand. We need to attract skilled workers, and we need to offer them security of employment. As a very fundamental basis of that, we need to offer them fair employment rights and fair employment conditions. This bill, in both its title and its specificity, takes away the employment rights of the most vulnerable New Zealanders. I urge all members of the House to consider that there is an existing probationary period within the legislation. All that this bill does is to take away for 3 months additional employment rights that New Zealand workers have, for no added benefit.

I am very proud to oppose this bill.

PETER BROWN (Deputy Leader—NZ First): The Minister of Labour made some passionate claims. I think she is wrong; indeed, I hope she is wrong. I hope there are not an abundance of employers who will behave in the way that the Minister outlined. I do not think there are. New Zealand is a country made up of fair-minded people. They like to give people a go. New Zealand First will give them a go by supporting this bill going to a select committee. We are absolutely consistent in that approach. New Zealanders wanted the minimum wage problem to be addressed, and we supported that bill—we are firm advocates for raising the minimum wage, I might add. But we believe that New Zealanders must be heard on these sorts of issues. We know that a number of small businesses are concerned about the current industrial legislation and would like to see this sort of legislation enacted.

But let me warn the National Party. We know that many people in this country are employed on a casual, unfair basis. I am not talking about the man or woman employed in a restaurant to fill in for a holiday period, to cover for sickness, or just to increase his or her income by working on Friday nights. I am talking about the people who are employed on a regular basis for close to 40 hours a week on a casual base contract. That is totally unfair, and we will be looking to address that issue in this bill. I have spoken to Wayne Mapp and he knows New Zealand First’s concerns on it, and has given me the distinct impression that he is prepared to accommodate our suggestion.

It is more than a suggestion; it is a request—or, dare I say, a demand. I do not believe that this bill will go any further without New Zealand First’s support, and we will not support it if we do not address the casual problem. I can tell National members now that my colleagues are hot about that issue.

Judith Collins: Absolutely.

PETER BROWN: I look forward to the member keeping the promise. We raised this issue when Max Bradford was Minister of Labour. We got nowhere with him, and we know that a number of New Zealanders suffered for a long time after. We will be making strong submissions to the select committee to look at that issue, and we look forward to the National Party supporting our cause in terms of our concerns around casualisation.

The Minister says that there is a probationary provision—section 67—in the current legislation. That does not fit well with small, or even large, employers. Quite a number of employers tell me that that section is not adequate. Many of them did not know it existed, and they say they need something a little fairer. I believe this bill has the potential to do that, although I think some provisions need to be pulled back a bit. Dare I say it to Dr Mapp, but I think it might be a little too far to the right. But at this point in time I can say with certainty that New Zealand First will support this bill going to a select committee. We will make strong demands to address the problems of casual people in the workforce, and hopefully a number of people will make submissions to the select committee to indicate whether this bill should go any further on its merits. We have some doubts about that; we believe that it might need tidying up.

I know from employers’ representations, as I said a few moments ago, that they welcome this bill coming before the select committee. New Zealand First is not prepared to deny them that opportunity to have their say. We know that the unions will make strong representations against this bill. We look forward to receiving their submissions on it, because we must first and foremost talk about this issue, and the select committee is the ideal forum in which to do that.

But I emphasise again to my National Party colleagues that New Zealand First support will not go any further than the select committee if we do not address the problems surrounding casualised work. I am getting nods from quite a number of those members, so they are awake. I think they have taken the message on board, and even Dr Brash looks as though he has taken the message on board. Wayne Mapp will make reference, I am certain, in his reply and acknowledge New Zealand First’s concern.

SUE BRADFORD (Green): The Green Party opposes the introduction of this bill. This mean-spirited, anti-worker legislation has no place in a modern and innovative economy. It has no place in a country whose people take pride in supporting human rights. It has no place in a country that wants to protect those who are the most vulnerable in society—a country whose people believe in the great Kiwi concept of giving everyone a fair go. I think it is a disgrace to hear people like the member of New Zealand First Peter Brown, who has stood up for casual workers, supporting this bill. I have heard him for the last 6 years in this Parliament—

Peter Brown: Nine.

SUE BRADFORD: —it is 6 years that I have been here—talking about how important the rights of casual workers are, yet this bill is the very thing that will disenfranchise those workers of all their rights in the first 3 months of their employment. Mr Brown does not understand what the vote is that he is taking today.

Does the Māori Party understand what this bill will mean for Māori workers, who are some of the most vulnerable workers in this country? For the first 3 months of their employment they will have no rights, at all. Under this legislation, they can be sacked at will. It is a disgrace.

Has the National Party spokesman for the elimination of political correctness so run out of work that he has the time to put before this House such an ill-considered and unnecessary bill? The explanatory note talks about the need to have probationary periods in this country, but the member is wrong when he says that we do not have a probationary period for new employees. The probation period already exists in the Employment Relations Act. It is open-ended, and it is up to the parties to the employment agreement to determine whether they want such a probationary, or trial, period.

In addition, as a result of recent amendments to the Employment Relations Act, there is now a new test for the justifiability of dismissal, in section 103A of the Act. This section requires an objective test of what a fair and reasonable employer would have done in all the circumstances at the time the dismissal or action occurred. That means, I say to the National members, that if an employee is on a trial or probationary period, it is a relevant circumstance that can be taken into account in assessing the justifiability or otherwise of a dismissal.

We already have provision for this matter in the Employment Relations Act, in a test that can take such a period into account, so why on earth is Dr Wayne Mapp wasting our time with this bill? I think the answer is clear. The bill is not really about probationary periods; it is about stripping the most vulnerable of our workers of their already modest protections against unfair dismissal and unfair treatment for the first 90 days of their employment. This bill should not be called the Employment Relations (Probationary Employment) Amendment Bill; it should be called the “Employment Relations (Kick Vulnerable Workers in the Head) Amendment Bill”.

Why do I say vulnerable workers and not all workers? The reason is that this bill would allow the parties to agree to a lesser period of probation, so that if there was a strong union in a workplace, there would be no such probationary period. It would mean that if a trade is in short supply it is unlikely that there would be a probationary period. It would certainly mean that the highly paid executive class would continue to negotiate employment agreements that see them paid tens of thousands of dollars if they have unsatisfactory performance issues and are dismissed. But what about those at the bottom? Who would have their employment rights stripped away by this pernicious legislation? It would be vulnerable workers—the workers whom Dr Mapp mischievously claims he is helping: young workers, unemployed workers, migrant workers, and Māori workers. He should have also added women workers, but perhaps he is too politically incorrect for that.

Starting a new job is a vulnerable time for any worker. Some of the most sensible comments on this bill came from Andrew Little from the New Zealand Amalgamated Engineering, Printing and Manufacturing Union yesterday. He pointed out quite clearly that this bill would increase the risk for employees changing jobs, and that it would, in fact, add rigidities to the labour market. Employers tell us at the moment that they hate rigidities and that they want a flexible labour market, yet this bill will have the opposite impact.

Worse than that—and I am not sure whether it is an intended or an unintended consequence of this bill—is that not only could workers be dismissed at will during that first period but also they would potentially face a mandatory unemployment benefit stand-down period of 13 weeks. The Green Party has always campaigned against the stand-down. We saw dreadful situations arising in the early 1990s, when it was used in a widespread way. Do people remember the chap who had to live in a hole in the ground? I know that there were lots of people in Auckland sleeping out, living under trees, and surviving in the most terrible circumstances because of what was then the 26-week stand-down. If we go back to a system like that, we will see a lot more of that happening. People would not only be sacked at will; they would then have to survive somehow for up to 13 weeks without any income, at all. The consequences of that situation are not something we want to see in this country again.

Dr PITA SHARPLES (Co-Leader—Māori Party): This House has heard before of how the world of Māori has a special work ethic, a proud history of industry, and a genealogy of hard work. Our songs and chants abound with lyrical allusion to blistered hands, to sweat on the brow, and to the work of the collective. We stand here today extolling the right to work. That is why we will support the bill going forward to the next stage, because we are absolutely passionate about the debate. The debate must ensure we can create dramatic change for our employment options. The debate must increase Māori access to employment, as well as ensure their advancement through employment. We want to widen the options available, so that our people have the chance to get their foot in the door to achieve the fullest possible range of employment opportunities.

In case this House has not noticed, the door is still slammed far too shut for some Māori. Closed doors mean the average weekly income for Māori now is only $471, compared with $598 for non-Māori—a difference of a whole $127. Mr Deputy Speaker, even though you and I hate hearing these negative statistics, when we discuss issues such as this bill they become totally relevant. The right to work should be a right enjoyed universally by all citizens, yet currently around 30,000 Māori are jobless.

The Māori share of total New Zealand unemployment is disproportionately high. In 2005 it was 22 percent—far higher than the Māori share of the working-age population, which is 10 percent. Long-term unemployment for Māori is particularly rife. Roughly 27 percent of all unemployed Māori are experiencing long-term unemployment. Why is that? The Department of Labour tells us that it is because Māori are more likely to become unemployed, due to a number of factors. Māori are strongly represented in volatile industries, such as exports. There are also high numbers of Māori in low-skilled occupations and in casual work. Numbers of Māori do not have sufficient levels of literacy, or the qualifications, to secure and retain work, and all too often Māori with the same tertiary qualifications as non-Māori are not selected for employment.

So what is behind those disparities? Many years ago a ground-breaking report to the Department of Social Welfare, Pūao-te-ata-tū, identified a bias in our social and administrative institutions that automatically benefits the predominant race or culture, while penalising minority and subordinate groups. And so we learnt about institutional racism. If one is outside, one sees it as the system; if one is cocooned within it, one sees it as normal conditions of existence. These are strong words, and we must apply strength to the actions we take in dismantling the cocoon, opening the door to diversity.

I come to this House today desperately aware of the need of people in my constituency, in my electorate—particularly in South Auckland—to be able to walk through the door to a job. However, we are also committed to protecting workers’ rights so that workers’ rights are not impinged on, are not abused, and do not suffer from exploitation. Those are heavy issues, and our caucus has grappled with the challenge inherent in them. What takes precedence: the right to work or the workers’ rights? We are not happy that workers’ rights may be affected by the fact that the employee would not have recourse to any of the remedies under the Employment Relations Act, but we will not kill the debate at the first step. We want to allow people to have a say, to hear the views of others, and to open the doors for wider discussion.

The impact of the systemic bias of institutional racism and the plight of the jobless are still issues of significance for this nation. We must have the courage and strength to consider options. We, therefore, will vote on principle, wanting there to be room for discussion but also always aware of the juggling act to protect workers’ rights alongside the right to work.

GORDON COPELAND (United Future): First of all, I offer my congratulations to Dr Wayne Mapp on the good fortune of having the Employment Relations (Probationary Employment) Amendment Bill drawn from the ballot. All of us again tomorrow, when there is a new ballot, will be waiting anxiously to see whether we get our bills out.

I am delighted to see this bill come into Parliament. The bill is actually very much in line with United Future policy. In fact, in our policy at the last election we suggested a probationary period of up to 6 months, so the 90 days suggested in the bill by Dr Wayne Mapp is well within the scope of our policy, and therefore I can signal immediately that United Future will be voting in favour of the bill. We have come to that conclusion—as most parties do when they formulate policy—on the basis that in our analysis we need to have more rather than less flexibility in the New Zealand labour market. We know that that is always a difficult balance to achieve, but anything that moves towards flexibility will, in our view, in the long term lead to greater productivity, to greater job opportunities for people, and to greater prosperity for New Zealanders. In other words, inflexible labour markets can be the death knell of an economy, and we probably have an example of that right now in West Germany. So, as Dr Pita Sharples has said, we always have to weigh up those two competing things.

There is also a pragmatic element to that approach that is reliant upon the actual experience that has been fed back to us by employers in respect of employing staff for the first time. In particular, I mention two groups that are very important. The first group, of course, is youth. Youth unemployment rates are higher than the general unemployment rate in our society, and we need to understand what brings that into existence. From the point of view of the employer, not employing a young person is a risk-averse approach. In other words, in taking on a young person the employer has less assurance—because the person has no CV, no references, and no employment history—as to whether that person will work out. That is a risk. People are prepared to take that risk if they know they can bring the employment relation to an end if it does not work out. Therefore, on balance, the bill will actually increase participation in the workforce by young people. It will mean that young people are trained by employers in a way that does not happen at the moment because they are not actually taken on in the first place. In a sense, the bill is almost a balance to Sue Bradford’s bill on shifting the youth rates up to the minimum wage, and that has to be a very, very good thing—and, by the way, we supported Sue Bradford’s bill going to a select committee after its first reading.

Listening to the speech from Ruth Dyson brought back to me an experience I had fairly soon after I entered this Parliament. An employment relations bill was being debated, and I listened carefully to the speeches on it from various members of the Labour Party—particularly, I have to say, from those with a strong union background. I was subsequently at a business dinner and somebody said to me: “What have you noticed, Gordon?”. I said that one of the things I had noticed was that there seemed to be an assumption, at least by some members of the Labour Party—what I call the left-wing of the Labour Party—that, on the one hand, all employers are inherently evil and want to deprive people of opportunities in life, and, on the other hand, that all employees are immaculately conceived. That is not reality. The reality is that people are people, and on both sides, whether one is an employer or an employee, there are good people, people who are indifferent, and people who really should be excluded from the process. We will find corruption, and all those things, on both sides of the argument.

The other issue I would like to mention briefly is that of new immigrants. Again, there is a risk in taking on a new immigrant, in terms of, perhaps, language, or a whole range of other things. The lack of a probation period actually acts against that. We sometimes say that immigrants encounter racism. I do not know that it is a question of race—I do not think most New Zealanders are racist. New Zealanders are simply saying: “The risk of taking this person on is greater than the risk of taking on a person who has English as his or her first language and understands our culture and our customs.”

So I think the bill, overall, will be very positive for those two vulnerable groups of people, and therefore I am pleased again to signal United Future’s support.

HEATHER ROY (Deputy Leader—ACT): I rise to speak in the first reading debate on this bill, and I am delighted to say that ACT New Zealand will be supporting it. I congratulate Dr Wayne on his initiative and on having the bill drawn out of the ballot.

I, like Mr Gordon Copeland, sat here listening to Ruth Dyson’s speech. I have to say I sat here thinking it must be terrible to live in that sort of a world. It must be very, very sad to live in a world where all employers are absolutely evil people and all employees are the best thing since sliced bread and cannot do a thing wrong. I sat here thinking: “I wonder how many people she has employed.” I have been an employer and I know what it is like to employ people. I think that many people on this side of the House probably find themselves in the same position that I do. We have an advantage in that we know what it is like to employ people. We know what it is like to take the risk and put one’s own money on the line in one’s own business. Sadly, that is something that, I am afraid, seems to have escaped this Labour Government.

I agree with Dr Wayne Mapp when he says that this bill is critical to the growth and productivity of New Zealand. He is absolutely right. Another reason that ACT is delighted to support this bill is that for many months before the last election Dr Muriel Newman’s bill—the Employment Relations (Probationary Period) Amendment Bill—was in the ballot, and we are delighted that although Muriel is not here with us, the bill is going ahead none the less. We would have actually gone with a probationary period of 6 months, which is, as Mr Gordon Copeland said, United Future policy. We would be more than happy to see the 3-month period extended to 6 months, but certainly we will support the 3 months in the absence of absolutely no probationary period, at all.

The benefits of this bill, it seems to me, are absolutely overwhelming, and many speakers have risen to talk about the fact that youth probably will be the biggest beneficiaries of this bill. In fact, 12 percent of youth are unemployed versus 3 percent in terms of general unemployment at the moment. When we look at the bill, we have to ask ourselves what will actually make employers take someone on. They need, if there is no probationary period, to be absolutely certain in their minds that this is the right person for the job. It is not always easy to tell. How can they tell when they have somebody in front of them whom they do not know? The person might have references but an employer may not be sure how sound those references are. An employer has no experience of the person—the employer does not know him or her. It is a very difficult position for employers to put themselves in. This bill actually gives employers the opportunity to take somebody on, and it gives the young person—if indeed it is a young person—the opportunity, too, of an easy out if that person decides at the end of the day that the job is not for him or her.

The thing I like most about this bill is that it offers employers the opportunity to give somebody a chance. It gives a chance to somebody who might not have worked before or who has not had the opportunity to spend any length of time in the workforce. It might give that chance to somebody who is disabled and has been prevented from working previously because of that disability. Perhaps no one was willing to take that person on. The bill gives an employer an opportunity to take a risk with that person, to take a chance, take a long shot, and an employer might find that that person is the best person he or she could have found for the job in the first place. Would that not be a great thing? This Labour Government talks at length about how we must have more people like that employed, and this bill gives employers the opportunity to do that.

Something that I do not think is widely known or perhaps remembered is that prior to 1998 all new public servants were required to serve a period of probation of not less than 6 months and not more than 2 years. Well, would that not be a good thing? I say to Dr Mapp that I wish he had put that provision in his bill. That would be a wonderful thing for the public service. Imagine what troubles might have been avoided in the interim. Think of all those golden handshakes that might have been avoided. I think that perhaps the Transport and Industrial Relations Committee should be considering an amendment of that type when it gets to look at the bill.

I will finish with the fact that many countries do use probation periods. In fact, New Zealand appears to be the only OECD country that does not have a probation period. Again, this Government lauds itself on doing so well in the OECD and wanting to do better. So what a golden opportunity this is for it, too. ACT New Zealand proudly supports the bill and looks forward to its return to the House.

PAULA BENNETT (National): First, I acknowledge my colleague Dr Wayne Mapp, and I am privileged to have the opportunity to speak to this bill. The bill supports people who want to work. I completely agreed with Dr Sharples when he said that everyone had the right to work.

Probation is a process of close supervision, monitoring, and assessment of new appointees’ work performance during their first 3 months of employment. When we start a job, many of us cry out for a bit more feedback, and more opportunity to see how our performance and our fit with the company is going. This bill will promote that. The general consensus is that with the skills shortages we have we need to tap into those people who are not currently working, or who are in jobs where they are not upskilling. They may be new to the workforce, lack qualifications and/or experience, and have a poor work history, or they may even have been in some sort of trouble. They may be new to New Zealand.

They need a break. They need someone to take a chance. We all deserve another go. I know I got one once. After many attempts, I managed to persuade someone to take a chance on me. I was a classic example: I was young, I was a solo mother, I was Māori, and I had a very poor work history. But I was damned if I was going to be another statistic. I knew that to turn my life around I needed meaningful employment. I knocked on doors, I got interviews, but I did not get the jobs. Most people told me—it was about 18 years ago, as my daughter is now 19—it was because I had a young baby and they did not know if I would actually turn up again the next week if she was not well. They also told me that it was because I was young and because I did not have a great employment history. There was actually nothing in my work history that said I would be a great employee. But, damn, I wanted that go, and I wanted to turn my life around. After a lot of knock-backs, I finally convinced a guy to give me a job, and I said I would work for 2 weeks without pay. That was illegal and it is certainly not something I would advocate, but I was willing to do anything I could to get a foot in that door. He took me on. I worked the 2 weeks, he paid me for them, and 2½ years later I left, knowing that I had contributed not only to the firm’s growth and productivity but to my own growth, as well. My own inner sense of self-worth had grown tremendously. This bill will help people who find themselves in a similar situation.

Prior to coming here, I worked in employment, in a recruitment consultancy I managed. But I always liked to call myself a recruitment consultant, because it was the consultancy part of the job I loved. It was my job to match companies’ vacancies with the right people. We were constantly explaining to organisations that they would not get exactly the right person for the job, and that with our skills shortages there was no person with exactly the same skill match they were looking for, as well as the right qualifications and experience. We would say to them that what they needed to be employing on was attitude and aptitude. So if the people they took on had the right attitude and the right aptitude, those people would get up to speed quickly and would benefit their businesses. But that was risky. Businesses were lean. They had cut back. They did not have the fat in them they used to have. They would say that they could not take the risk.

I find myself agreeing a little with Peter Brown. There is no doubt that there is a casual workforce out there. We had situations where people were going into casual jobs so that they could get a foot in the door and actually have those opportunities. That made them more vulnerable. That is not what we want to see. We want to see a bill like this that gives people the opportunity, with the right attitudes and the right aptitudes, to say: “Give me a go.”

On the employees’ side, this bill works for so many reasons. It is about people who are unsure about their match with the company they are going into. They want to get in there for that first 3 months and see if it works for them. The bill opens up communication between employer and employee. If I am going for a job and I am not sure if I am going to quite make it, I can say: “How about we give it a 3-month probation period? Either one of us can say no to the deal at any time and walk away all the better off.” I commend the bill, and I think that it has a great future for New Zealand and for workers in this country.

Hon MARK GOSCHE (Labour—Maungakiekie): I find it extraordinary that Dr Mapp’s answer to New Zealand’s economic future is to be able to sack people more easily. That does not exactly strike me as being a wonderful policy or vision. We need to work through this carefully, because there have been some interesting arguments—ones that I hope some members on the other side might be interested in hearing.

One argument is that the incentive for the people who are the most hard to employ in this country is the threat of getting the sack for no reason. I have worked with people all my life in the employment situation who are at the bottom of the heap—the people who clean and cook, do the grottiest, dirtiest jobs, and get paid very poor wages. Many of them are casual workers, I say to Peter Brown. In essence, the bill makes all people casuals for the first 90 days of their employment in a new job, because they have no right to stay in that job. They can be sacked at will in the first 90 days. If New Zealand First members believe that that is an improvement for people who are not casual workers, then they need to think more carefully about it.

I hope that the Māori Party members come to the select committee and hear the evidence, because it will be incredibly important that they do so. Young Pacific and Māori people who are unemployed in this country will not be excited about going for a job if, in fact, that job can be taken from them at a moment’s notice. The successful employment programmes in this country have been those that have mentored those people, I say to Dr Mapp. They are the long-term unemployed whom he says he is concerned about. He should go and look at the successful programmes. They do not work by threat; they actually work by encouragement. The people out there who work with those people, day in and day out, will get up at 6 o’clock in the morning if that worker has not got out of bed and will be late to work. They will pick the worker up from home, and take him or her to work. That is the sort of encouragement that gets the young Māori and Pacific workers into employment permanently.

This bill puts people into employment for 90 days at a time, if they are lucky—like those who were employed on the waterfront, traditionally, in our evil past. I do not think that employers are bad. I have worked with employers and unions for many years, and I have worked with employers who have made bad decisions. I have worked with the odd bad employer, but most I have worked with as an advocate for workers had made bad decisions. Most of those bad decisions get sorted out amicably in this country.

When the select committee heard the last lot of submissions on the Employment Relations Bill, employer after employer came in and said that we should not change the legislation any more, because it was working wonderfully and they did not want it disturbed. Yet when the Employment Relations Act was first brought in by this Government back in 2000, the whole world was going to come to an end. So how come things have changed? They have not changed.

The reality is that successful programmes getting people back to work are not based on a big stick. The kids that we are talking about have had the big stick waved at them and whacked on their backs most of their lives. They do not respond to that. So who is the bill supposed to be aimed at? Because it will not work with them. The Māori Party knows better than anybody that that does not work in terms of getting young Māori and Pacific people back to work—but it will affect every other New Zealand worker.

In terms of changing jobs, the average in this country now is not what it was when I first started work—maybe a job or two for life—it is six jobs. The average now is six different forms of employment in a lifetime, and for a period of six times 3 months a person would have no rights—no rights at all. Dr Wayne Mapp will say: “Oh, yes, you can have the Human Rights Commission looking after you.”—yeah, right! We know that the most vulnerable people ain’t going to go there.

I would like to hear Dr Wayne Mapp’s response to this question: under his bill, if a person is sacked for joining a union, what happens?

Dr Wayne Mapp: That would be discrimination.

Hon MARK GOSCHE: Oh no, no—I want Dr Mapp to answer that question in his speech and tell me where it is in the law; he needs to do that.

My final point concerns the term I have heard tonight—right to work. I will tell members where right-to-work laws exist in this world. It is in the southern states of America, and I advise them to go and look at the situation there. I went there and saw a most appalling lack of workers’ rights.

Dr Wayne Mapp: In Britain, Canada, Ireland.

Hon MARK GOSCHE: No, no. Dr Mapp will get his chance in a minute. He should go and have a look. Those right-to-work laws in the southern states are about no rights for workers. I want some people who are supporting this bill to think on that, because it is an interesting label. This bill is about taking away the rights of workers for 90 days, and if anyone thinks that will solve our unemployment rate in this country, that person is dreaming.

MARK BLUMSKY (National): There are over 325,000 businesses in New Zealand, and 280,000 of them employ five or fewer people. It is now time for this Parliament to send to the tens of thousands of people who own those businesses a message of support. Too often, the Labour-led Government has introduced legislation that inhibits, that costs, and that hurts those hard-working New Zealanders. It is now time to introduce legislation that makes a positive difference.

The 280,000 small businesses are important to New Zealand. They are the glue that holds New Zealand together. I will give the Government some credit. It understood the importance of small business, so it set up a Small Business Advisory Group. But when that advisory group, representing those 280,000 businesses, said they needed to have a probationary employment period, did the Government listen? No, it did not. This bill is our chance to send a message to small businesses, saying: “We will listen and we will talk with you about that issue in the select committee.” This bill is very important.

In the last 3 years, before embarking on my career as a politician, I was the founder and chief executive of a Government-funded incubator, taking early stage start-up businesses and growing them into global companies. There were 40 young, entrepreneurial, 20-year-old - plus people who were working 28 hours a day, 8 days a week, and they were inspirational. It was both an exciting and a very nervous time for those people. It was exciting, but they were worried about whether anyone would buy their product, and it was a nervous time when people did buy their product and they needed some help, and they realised they had to employ some staff.

We can imagine what it is like to be a 20-year-old, employing one’s very first staff member, and paying that person. But do members know what happened in those incubators when those young people had to pay their staff members for their first week? They had to get their wallets out. They literally had to get their wallets out, and pay some very hard-earned, very newly earned dollars to people they had just met and employed. I can tell members that when people have to take out their wallets and give their money to someone else—and it is not a 20-buck loan to a mate to buy a beer—then that becomes a slightly different proposition.

What was the result, with regard to those incubator companies and those young business leaders? They waited before employing staff. They made excuses, they procrastinated, and they consequently overworked themselves, overstretched themselves, and burnt themselves out. Why? They were just too scared of getting it wrong. They were too scared to employ staff, when all they had was a pile of CVs to pick from. I do not know about other members, but to this day I have never seen a bad CV. Those small businesses, like many, many other small businesses, just did not have an HR department. Small businesses do not have a training department, so when they get it wrong it hurts.

This bill will give the confidence to small business to take the risk of employing someone. Parliament needs to show that we are happy to listen to those small-business heroes. Let us hear what they have to say. I recently sent a letter to 5,000 small businesses in Wellington, and asked what issues were affecting their day-to-day operation. I have had quite a number of responses, and I will quote from three of them.

The first response states: “The major issue we face as a small business is the risk of hiring staff. My wife and I are the only two people in the business, and we have deliberately chosen to run it this way because we simply don’t want to run the risk of hiring someone.” The second states: “I am very much in support of the concept of a probation. In fact, 3 months would be wonderful. Wage is my biggest cost and I’m very keen to have the right employee in the right job; otherwise we are wasting our time.” And the third states: “We are a small company that creates planning software for sale both here and in New Zealand. Business is going well for us at the moment, and I think we will be hiring one or two new people this coming year. You can appreciate the degree of risk entailed in hiring a new person in a company as small as ours. We can’t afford to make a mistake and get it wrong.”

I think I am like many small-business owners who feel that if the Government will not take the advice of its own Small Business Advisory Group, then that is very, very sad. I hope that the House will support the bill going to the select committee.

Dr WAYNE MAPP (National—North Shore): I would like to thank everyone who has contributed to the debate, and I would like in particular to thank those parties that have had the confidence to refer the bill to the select committee. I deliberately use the word “confidence”, because I think this is very much one of those occasions when we can look at the world and ask whether the glass is half full, or half empty. Do we always look for problems that might emerge, or do we look for solutions that are possible?

I believe that the figures speak for themselves: 12 percent youth unemployment, compared with 3 percent for the general population. That is a situation that needs a solution. And we are not talking about the southern states of the USA; we are talking about Britain, Canada, Ireland, and Australia, all of which have probation periods.

Some particular concerns have been raised, and I want to address them. New Zealand First’s Mr Peter Brown raised the issue of casualisation. I know that that has been an issue for him for a number of years. Without forecasting solutions, I note that the Netherlands has essentially split the law. So for short-term contracts, defined in the Netherlands as those contracts of less than 2 years, the probation period is 1 month, and for those contracts that are intended to be longer than for 2 years, or indeed that are without a fixed term, it is 3 months. Solutions to those issues are possible. The select committee is where we get to explore the solutions.

Concerns were raised by the Māori Party, particularly about vulnerable workers who do not have access to full rights. Those are legitimate concerns. Clearly, issues around the Human Rights Commission, and the effectiveness of its procedures to deal with issues of discrimination, would need to be looked at. So there are issues that need to be considered there. But that is the whole point of the select committee process, is it not?

No one reasonably expects, particularly for a member’s bill—or for that matter a Government bill—that it is perfect at the time of its introduction. That is precisely why we have the select committee process—to hear not from us in this Chamber but from New Zealanders, whether they be employers or employees. Sometimes I think that some employers are perhaps a little bit too diffident about employing people. Nevertheless, those fears exist and therefore are real, so we are neglecting our responsibility to New Zealanders, to those hundreds of thousands of mum and dad businesses, if we do not say we hear their concerns and tell them we can address them. This bill is about bringing New Zealand into the mainstream, not taking us back to some extreme position.

I do want to assure members and, indeed, all New Zealanders that it is not the National Party’s intent to take us back to the Employment Contracts Act of 1990. Things do move on. That is the reality of the situation, and that is something we have heard over the last few years. So in truth we learn from experience. We can have improved employment law that builds on the experience of the range of law over the last 20 years. The changes were necessary in 1990, but this is the 21st century. We are in different circumstances and our law needs to reflect this.

When the OECD says to New Zealand, and when the Treasury briefing says to the Government: “Produce more flexibility into the law.”, one would think that this country—this Government—would have the wit and will to listen. I have to thank those parties in particular that did—and I stress this—have the confidence to enable New Zealanders to have their say. This is the duty of Parliament—to give New Zealanders the ability to have these discussions. What is the point of an MMP Parliament if we do not do that? So I tell Labour Party members to think again, and to go to that select committee with open minds, because this is an issue through which, as a nation, we could do a great deal for the productivity and the future of young New Zealanders who deserve a go.

A party vote was called for on the question, That the Employment Relations (Probationary Employment) Amendment Bill be now read a first time.

Ayes 63

New Zealand National 48; New Zealand First 7; Māori Party 3; United Future 3; ACT New Zealand 2.

Noes 58

New Zealand Labour 50; Green Party 6; Māori Party 1; Progressive 1.

Bill read a first time.

Bill referred to the Transport and Industrial Relations Committee.

Inquiry

Inquiry into New Zealand's Relationship with Latin America

Consideration of Report of Foreign Affairs, Defence and Trade Committee

Debate resumed from 22 February.

TIM GROSER (National): Our relationship with Latin America has, as I think most members of the House are aware, been a particularly thin relationship historically, but for very good reasons.

First of all, as we all know from whatever we have studied of its history, Latin America has only recently had the armies returned to the barracks in some permanent sense, and for the last 20 years has been moving towards open political markets and open economic markets, and that has created the conditions for us to have a fresh look at that part of the world. I would also draw members’ attention to the fact that in the Mercosur agreement, which unites Brazil with three of the other, smaller members of the region, there is even a provision that is unique, I believe, that if any of the countries concerned turns away from democracy—in other words the armies get out of the barracks again and back into politics—it automatically loses its right to the benefits of the trade agreement.

So there is a sort of historic move, fairly recently, towards open markets, and we are seeing the evolution of societies that I think New Zealanders can be very comfortable with. But a lot of ground has still to be met. These countries are still, for the most part, impoverished countries. Fundamental issues have not been addressed with respect to their indigenous peoples, and vast poverty is yet to be eradicated.

The first question that I want to address in the report is the matter of New Zealand representation. I personally am a little conflicted here, because I, naturally, would like to see New Zealand build up its pattern of representation. But I have to say, on the basis of my experience, that spreading the jam too thinly is a real risk. When embassies are spread over vast areas of distance, with very few resources—and necessarily so, I do not think this is a political statement I am making here; it has been the same inside the Ministry of Foreign Affairs and Trade over successive Governments—there is a real danger of spreading the jam too thinly. We had a post, of course, in Peru. We closed it down during the period in which Peruvian society collapsed. My sense would be that that is a country that I hope has a better future ahead. Lima has 8 million people, many of whom are highly educated and sophisticated, but I doubt that it is quite the right moment now. I have always been in favour of a more active policy of cross-accreditation visits as a way of providing some reasonable coverage at very little cost.

On the question of the trade and investment linkages, I see that falling under three different categories. The investment relationship in many ways is more important than the trading relationship because of the strong complementarity of these resourced-based economies with our own. There was a period during the 1980s, as I am sure many members will know, when New Zealand, I think, had the third largest stock of foreign investment in Chile in the world, and in 1 year the net inflow, I think, was the largest in the world. We have the technology inside our primary industries that they need, but, in fact, investment in this region has often turned out—as is often the case for New Zealand investment anywhere overseas—to have a very murky track record. It is a record that suggests “proceed with caution.” I know that Fonterra has been looking very closely at some operations in Brazil, but this needs very careful scrutiny because a lot of people have lost a lot of money in these markets.

In respect of the direct trade relationship, well, it is neither here nor there. I think it is around 2 percent, from memory, of our total exports. I think I once calculated when I was leading a team of New Zealand officials to look into the Chilean-Singapore option, that we sold more to Japan in 1 week than we did to Chile in a year. It will not be that today—but it will not be far from that figure.

I think the most powerful aspect of our trading relationship with these countries is, of course, the cooperation on multilateral trade policy. We have had this long and incredibly strong—I would say at times even strong emotional—relationship of collaboration solidarity with the Latin American countries in the Cairns group. I remember going to Bariloche for, I think the second Cairns group meeting with Mike Moore when he was the Minister of Trade, and we have carried on that very strong and proud tradition of cooperation over the last 15 years with these Latin American countries.

The situation has changed in Geneva over the last few years because, essentially, Brazil has moved into a leadership position taking over the mantle of the Cairns group from Australia. But we have worked very closely with the Brazilians. They have a very sophisticated operation and I think that is probably, from a New Zealand point of view, the single most important aspect of the trading relationship. Their objectives, having been European immigrant societies cut off by agricultural protectionism, are essentially identical to ours. We do have commercial differences, of course, and I see that as a very positive issue for us going forward.

With respect to culture, again the heavy European influence in their societies provides a point of contact for our two societies. I suspect now it would have been more useful for somebody like me to have studied Spanish rather than French as a second language, but that is past history. There are certainly many more people in the world who speak Spanish than speak French, so I see that as a hugely useful international language and I hope that agencies in New Zealand continue to do what they can to promote interest in the Spanish language amongst young New Zealanders.

I share the view in this report about going slow in establishing an Asia 2000 - type foundation. I am sorry; I should call it the Asia New Zealand Foundation. I used to be the executive director, and I cannot remember the new name on any occasion. I think it is formidably difficult to get funding out of private sector entities for these organisations, and I do not think we are at that point in the relationship where we could sustain such an organisation. But I think that as a longer term goal that is an eminently sensible idea and I think it would energise in the long term the efforts of a number of New Zealanders who have a strong personal commitment to, or strong company interest in, the region.

I agree with the general thrust of the argumentation in the report about people-to-people linkages, particularly in terms of trying to get student exchanges going and building up people-to-people skills. The only lacunae that I see in this report is that I have always considered Latin America as potentially a source of long-term New Zealand residents. I never quite comprehended why the New Zealand Immigration Service did not make a bigger effort in trying to attract young people from that region to come and look at New Zealand. There is, as one would imagine, an obsession in that region with obtaining a green card—that is, becoming an American resident. There are huge obstacles in the way. If members have had the privilege, as I have, of spending quite a bit of time in that region and meeting the young people, they will know that time and time again one comes across highly educated, highly motivated, and highly sophisticated young people who are trying to get a green card into the United States. I talk to them about New Zealand, and they have never thought about it. So I think the longer-term issue of trying to attract migrants from the sophisticated middle classes of these regions deserves a little bit of attention.

In summing up, I think this report maps out the right directions but it is important to be realistic about the resourcing required for these types of projects. The relationship is still too thin, I think, to support grandiose ideas, but I think the report sets them out in the right general direction.

MARTIN GALLAGHER (Labour—Hamilton West): I thank the previous speaker for his contribution, and acknowledge his degree of expertise in, and contribution to, this area before coming to Parliament.

It was my privilege and pleasure to be a member of the Foreign Affairs, Defence and Trade Committee in the previous Parliament. I want to acknowledge the very good work of the Hon Peter Dunne as chair of the committee, and also Graham Kelly before he went to Canada. I acknowledge the very great work of Winnie Laban, who of course is now the Hon Winnie Laban, as deputy chair.

In terms of the brief, I believe that the inquiry we conducted into our relationship with Latin America was very worthwhile. It was a very good example of the way a parliamentary select committee can genuinely contribute to the debate and also, if you like, raise the consciousness of New Zealanders to the critical relationship that we have with Latin America and to the potential for that relationship. Certainly, if we were to cite an example of a very successful organisation in terms of our relationship with South-east Asia, that of course would be the Asia 2000 Foundation. Interestingly, because of various circumstances, historically we have had a very strong and interconnected relationship with, for example, the ASEAN nations, which has not perhaps been duplicated to the same degree with Latin America. Of course, in terms of neighbours, and without repeating some very basic geography, South America—Latin America—is on the other side of the Pacific Ocean and shares with us the Pacific Rim.

I just want to take this opportunity to focus on two aspects. I listened very closely to the previous speaker’s outline. It is appreciated that New Zealand as a small country with a small population cannot have a comprehensive diplomatic presence in every country. We have to be very focused and circumspect in terms of how we allocate our resources as a smaller country. Certainly, first of all we should naturally acknowledge the posts we do have in Latin America and the huge range of nations and communities that they themselves have to cover. I want to take this opportunity to acknowledge the role of honorary consuls. I acknowledge—and I know that my colleagues on this side of the House will totally support me—all those people around the world, and in Latin America as well, who work as honorary consuls. That is where I think we can get value of coverage for a relatively small budget.

Finally, I also want to take the opportunity to acknowledge the contribution that our resident Latin American community can make to this relationship. I acknowledge the role that our local Latin American community has played in my own city in terms of that relationship, and my good colleague Dianne Yates, who is now chair of the Foreign Affairs, Defence and Trade Committee, will agree. I think we need to acknowledge the expertise that that community has to contribute to the relationship.

I will not say any more, except to compliment the previous committee on its good work. I believe that this is a very, very good contribution to the ongoing relationship between New Zealand and the Latin American nations.

JOHN HAYES (National—Wairarapa): Well might members on the Government benches applaud their colleague this evening, because that is the only thing they have to applaud in the wake of the two votes they have lost in the House today. One vote was on the probationary employment legislation and the other was on the legislation to reduce the number of MPs in the House.

Hon Ruth Dyson: How many have you won in the last 6½ years?

JOHN HAYES: I tell that member that her wheels are dropping off.

Hon David Benson-Pope: When did that member last see his wheels?

JOHN HAYES: That member clearly knows nothing about foreign affairs, and I do not believe that he has read this report. The chair of the committee was Mr Dunne, and I understand that he is a Minister in that member’s Government. He does not know much about Latin America, either.

I do not want to come across tonight as being anti - Latin American. In fact, I suspect I am the only person in this House who has the Bernardo O’Higgins award for strengthening relationships between New Zealand and Chile. I congratulate the new President of Chile, Michelle Bachelet, on her recent accession. I note that our Prime Minister has been over in Chile, currying favour so that she can have some support from that country in her bid for the UN Secretary-General’s job.

I come from the perspective of making sensible choices. The reality is that New Zealand is a small country of 4 million people. I have said that in this House before. We are smaller than Sydney—

Hon Clayton Cosgrove: You’re joking!

JOHN HAYES:—and I tell that member we are bigger than Christchurch, thank goodness! This committee has been badly led by a Labour Government that has no vision. It has been ably assisted by people like Tim Barnett, Dail Jones, Keith Locke, and Matt Robson, and the community have dealt to them.

This is an appalling report, and it bears no relationship at all to what New Zealand’s needs are. It recommends that we set up an embassy in Peru. Why would we do that? Why should we set up an embassy in Peru when in Venezuela our trade statistics are the highest of all countries in Latin America? And how is it that we have opened an office in Argentina? I will tell members why we did that—

Anne Tolley: I raise a point of order, Madam Speaker. I think the Standing Orders actually prevent members from moving to seats closer to the member speaking in order to barrack.

Darren Hughes: Generally, what the member said is quite right. But the member speaking has also moved from his seat. If both members moved to their respective seats, then the interjecting preferences that both would have are exactly the same as they are now. So I cannot quite see what the point of order is about.

The ASSISTANT SPEAKER (Ann Hartley): That is not a point of order. Please continue, Mr Hayes.

JOHN HAYES: I would like to point out that our trade to Venezuela is about $123 million but that our trade to Argentina has dropped from $27 million to $17 million. Why have we opened an embassy in Argentina? Because it is nice to tango on the streets of Buenos Aires. That is the only reason we are there. It is nice and comfortable for the bureaucrats who will go there. This report was written by bureaucrats. “Oh, yes,” it says, “we’re going to have to do a double tax agreement with Mexico, and we’re going to have it finished by 2005.” Is that agreement in place? No! What has this Government been doing? It has no vision. It makes promises that it does not deliver on.

Appendix D of the report talks about the double taxation agreement. It says to increase the role of education in our relationships. But what has it done? It has done nothing. It says to increase the role of tourism by bringing in more visitors. What has it done? It has done nothing. The number of tourists to New Zealand has increased from about 700 people per country in 2001 to about 1,400 people per country now. That report is a total and utter nonsense. It is absolutely without vision.

The report says to spend more money on official development assistance to Latin America. So what have we done? In 1999 we were spending $1.14 million of our hard-earned taxpayers’ funds in Latin America. What are we doing now? We are spending $5 million a year—magnificent!—but for what purpose? Our total trade to Latin American countries has dropped by about $14 million in the last 5 years. Why are we trying to eradicate poverty in places like Andean Bolivia, Ecuador, Brazil, and the southern cone of Argentina and Chile? That is a nonsense. We have no interest in those countries, and we should not be spending hard-earned taxpayers’ money there when in the Wairarapa—I can report to the House today—where the Government is building a new hospital, the transformer blew up before the blimin hospital opened. Yet we have money to burn and spend in Latin America. That is a nonsense.

Where is our Minister of Foreign Affairs today? He is in Tonga promising sports cooperation. That is really good! That shows how much he is interested in this arrangement. Where is our Prime Minister? She is in the Philippines. What are the people in that country saying about her presence there? They are saying: “For goodness’ sake, take her home.” She is speaking in Cebu at an inter-faith meeting. A press release today from the Philippines’ community here in Aotearoa New Zealand states: “Helen Clark is currently in the Philippines making high-minded speeches about eradicating the cause of terrorism.” It goes on to say: “She should be addressing her remarks to her host, President Gloria Macapagal Arroyo. The Philippines under her leadership exhibits all the attributes of state terrorism—death squads whose crimes are never investigated let alone punished, military and police who have abused human rights with impunity, systematic political murders, disappearance, torture, and terrorism of whole civilian populations.” That is what Helen Clark is doing today. And why is she doing it? She is doing it because she is looking for support to be the next Secretary-General of the United Nations. What a nonsense!

We have also had the Minister of Foreign Affairs, purportedly interested in Latin America, running around trying to arrange an agreement in Tokelau on self-Government. I have papers I would like to table in the House today that show clearly that Tokelau is part of America, and New Zealand has no right to give it away, anyway. It is absolute nonsense. Government members opposite are not focused on their foreign policy objectives. [Interruption] The Government is not focused on its foreign policy goals, I tell Mr Hughes. No, it is not. I think we need to take our focus off areas of the world in which we have a very limited interest and focus on our immediate backyard in the Pacific, where China and Taiwan are competing with each other for favours in countries of weak government that cannot stand up to that pressure. They are creating corruption—and what are we doing about it? Nothing! Our Prime Minister is messing around in the Philippines instead of focusing on the things that are important to my country and to my voters.

We need to review the whole question of aid to Latin America because with this money huge bureaucracies are being financed, and those huge bureaucracies are in our own country. They are the non-governmental organisations, which are operating like commercial agencies by spending Government money on aid. And what are they doing? They are promoting corruption and complacency. Our aid programme is teaching Latin American countries to be beggars and not to be independent. In addition, development aid in those countries is depressing local markets and dampening the spirit of entrepreneurship that we so desperately need. Absurd as it may sound, development aid is one of the reasons for Latin America’s problems.

If the West were to cancel aid payments, ordinary South Americans would not even notice. If we think about it, $5 million of our hard-earned money here—from people in my electorate who are desperate—is being wasted and squandered by this Government in Latin America. If payments were cancelled, only the politicians would be hard hit, and their bureaucrats. That is why they maintain that the world would stop turning without its development aid. What nonsense! Latin American countries must take the first steps towards modernity on their own. They must change their mentality. They have to stop perceiving themselves as beggars. The problem is that today they perceive themselves as victims.

In order to change the current situation between New Zealand and Latin American countries, I think it would be really helpful if our aid organisations were to be pulled out by cutting our $5 million of aid, because it is of no consequence. Our non-governmental organisations—and I can hear them crying like children, when the baby-sitter goes out—will say: “We need to encourage all these countries to have our aid.” But I do not think so; I think we need to encourage all countries to stand on their own feet.

We need to encourage this Government to focus on its priorities, and the priorities are to put New Zealanders and their interests first, and to stop messing about in parts of the world in which we have limited interest. We actually have the same level of diplomatic representation in Latin America as the Australians. Yet we are a country that is smaller in size than Sydney. What is this Government doing? It has lost its vision; it has lost its way; and it needs to go.

KEITH LOCKE (Green): It is good that we are having this debate tonight, because sometimes inquiries such as the one we are debating have a lot of work put into them by the select committees but do not get discussed in the House. Tonight we have a chance to do that. The report we are debating was tabled in the House at the same time as two other reports from the Foreign Affairs, Defence and Trade Committee, which I was on: the report on the inquiry into New Zealand’s relationship with the Kingdom of Tonga and the report on the inquiry into the role of international human rights in foreign policy. They were tabled in August last year just as the election campaign was heating up, so the media’s attention was diverted elsewhere. It is therefore good that we have a chance to debate at least one or two of those reports.

It is important for New Zealand to engage with Latin America. I think that the history of the lack of engagement of our society with Latin American society was shown as we went along with the inquiry. There was not very much engagement with the Latin American community in New Zealand, partly because that community is not very large. The attention of the Immigration Service and others has been directed more to other areas of the world than to Latin America. At the moment, things are going very much in favour of European immigration, and we do not have a very large Latin American community. It would have helped us, I think, if we did. Tim Groser talked about parallels with Asia and the Asia 2000 Foundation. We have not been able to develop that sort of relationship with Latin America, partly because we do not have a big Latin American community here. We had good relations, in the preparation of this report, with the New Zealand Centre for Latin American Studies in Auckland and the Latin America / New Zealand Business Council. They helped us quite a bit.

It is good that the Prime Minister of New Zealand has just been to Chile, at the inauguration of the Chilean President, Michelle Bachelet. As Tim Groser has indicated, in the free-trade agreement that we have signed through the Trans-Pacific Strategic Economic Partnership Agreement, the trade with Chile is very small. It is not significant in that sense.

As John Hayes said, we have other significant trade relationships, such as that with Venezuela, which we have not, perhaps, fully capitalised on in terms of other relations. It is interesting to look at the politics of Venezuela and at the role it plays in Latin America now. There has been quite a sea change in Latin America politically, economically, and socially over the past few years, starting off with the election of Lula as the President of Brazil a few years back. I think that was associated with a much more confident approach of Latin America in the world, including—as Tim Groser mentioned—in the trade area. It is true that Brazil started to lead many of the Third World nations, the agricultural exporting nations, in trying to get a better deal in world trade agreements. It is good that New Zealand has engaged with Brazil in that respect.

Those nations have not just accepted the unequal trade agreements that the United States, in particular, was trying to force on them. The United States was trying to extend the North America Free Trade Agreement through to Latin America, in the form of the Free Trade Area of the Americas. Over 10 years, that whole process slowed down and stalled. The trade relations that have developed in Latin America have been more south-south relations: relations between Latin American countries that have been successful in their various ways, rather than a rather unequal relationship with the North American bloc.

Hugo Chávez is an interesting character. He has got up the noses of George Bush and Condoleezza Rice by being very outspoken about the interests of his people and defending the progressive changes that he has instigated in Venezuela. He is an elected president. He is coming up for election again shortly, and everyone expects he will be re-elected because he has developed domestic and trade policies that have gained the support of the poorer sector of the community, raised the living standards of the poor, and given them more of a role in the day-to-day process of political life.

There has been quite a turn-round in Latin America, if one adds to that the coming to power of Néstor Kirchner in Argentina a couple of years ago. There has been a close relationship between Venezuela and Argentina. In fact, Venezuela helped to pay off quite a bit of Argentina’s debt. Members will remember that Argentina was in a big economic crisis before Kirchner came to power. Then, last December, we had the election of Evo Morales in Bolivia. That was a tremendous step forward for the Bolivian people. His election was part of the big campaign of the Bolivian people against the selling-off of their gas resources to multinationals, following a mass campaign in earlier years against the privatisation of their water.

There is now a link-up between Kirchner, Morales, and Chávez in trade agreements between the countries. In particular, Venezuela, which is benefiting from the higher oil prices, has helped out a lot in both countries and has been more confident in asserting itself in foreign policy and not just accepting the Bush agenda in the world. One commendable thing was that Venezuela was one of the few countries in the International Atomic Energy Agency that stood out against the demand of the United States that Iran be taken to the United Nations Security Council over what was happening in the International Atomic Energy Agency. It is good that people like the agency’s director, Mr ElBaradei, have tried to resist that move and asked to settle the dispute within the agency itself.

Venezuela has been fairly staunch in saying that countries should not just go along with the Bush approach of trying to enforce military or economic measures against Iran, but should use the diplomatic approach and operate in accordance with the Treaty on the Non-Proliferation of Nuclear Weapons, and not just throw the matter to the United Nations Security Council, where the United States will dominate the proceedings. So what is happening in Latin America is quite important to us, and in international terms too. As a nuclear-free country that promotes nuclear disarmament, New Zealand should have more associations with the Lulas, the Hugo Chávezes, the Néstor Kirchners, and the Evo Morales to promote peaceful policies.

Another element of that, of course, which is referred to in the select committee’s report, is the whole question of indigenous links. Evo Morales comes from the indigenous people of Bolivia, and that is quite a breakthrough. I think what is stated in the report about developing indigenous links—and the Government in its response to the report has endorsed that—is very positive.

In the disarmament area, we have worked fairly closely with Mexico and Brazil in the New Agenda Coalition. I think that should be extended to developing a nuclear-free southern hemisphere, and Mexico is a key player in seeking to merge the nuclear-free zones in the southern hemisphere into one common nuclear-free southern hemisphere.

I disagree with John Hayes on aid. The outline of the aid given to the committee, in the process of this inquiry, showed that it was going very much towards poverty reduction. The aid was going into various sustainable rural livelihood projects through non-governmental organisations, and it was being used very effectively by them.

We need to realise that this report is a step forward in terms of New Zealand trying to engage with Latin America much more than we have done. There is very little news on Latin America in our newspapers. There is not that kind of consciousness of the region. Hopefully this report will help to develop that consciousness among New Zealanders.

Hon CLAYTON COSGROVE (Minister for Building Issues): I rise to support the report. It is a pity that Mr Hayes does not get another shot, because after listening to that speech I think it is obvious to most people here that the trade job in the National Party must be up for grabs again. It was Mr Hayes versus Mr Groser—two diametrically opposed speeches. There was a time I recall in this Parliament—before I got here as an observer—that trade was considered a bipartisan neutral zone, whereby we were all on the same team. Mr Groser performed well and adhered to that tradition. He spent a lot of time talking about himself, but I suppose that is the nature of new MPs. But apart from that, he observed the protocol.

Then Mr Hayes got up. He is another former diplomat, with a similar lineage but maybe not with the stature of Mr Groser. He gave a bizarre speech. I ought to say to new members that there is an old tenet in Parliament—and I think it goes across parties—that one stands by one’s friends in the party. That means that one should look at the report and work out that there are a few mates from the same team on the Foreign Affairs, Defence and Trade Committee—that is, Messrs Carter, Power, and the former trade Minister, Lockwood Smith—who all unanimously supported the inquiry report.

Then, on looking a wee bit closer at the report, we should ask whether there was a dissenter to the inquiry report. Was there a rogue in the National Party? Was there a maverick? Did the National Party put in a minority report, for instance? If we look through the report for it—and for the benefit of Mr Hayes, it is on page 27; “Minority View” it is called, to save any confusion—we realise that the Greens and the Progressives put in a minority report. But there was no minority report from the National Party.

The report has some interesting recommendations, like the one on page 9. The committee recommended unanimously—Mr Hayes might be able to spell that word—“That New Zealand representation in Latin America should be supplemented beyond existing New Zealand embassies in Brasilia, Buenos Aires, Mexico City and Santiago by the establishment of an additional post, possibly in Peru, in the next 5 years.” That is amazing, because Mr Hayes bagged the idea of giving aid to Latin America, and he said something about doing a tango. I do not know what he did when he was a diplomat, but it sounds interesting—I do not know whether that happened during working hours. Mr Hayes said that Latin America was unimportant.

The question I have—and Mr Groser, as a former diplomat might be able to assist us—is which speech we send out on the cables to the ambassadors. Do we send out the speech stating the National Party unanimously supported the inquiry into New Zealand’s relationship with Latin America—and that it was not a bad place, that it was worth trading with, and that we should support it? Or do we send out Mr Groser’s very self-effacing and humble speech, which supported trade with Latin America, and which told us of Mr Groser’s lengthy experience in supporting and growing trade in Latin America? Or we have option C—

Darren Hughes: A menu!

Hon CLAYTON COSGROVE:—the menu—in which a former diplomat in the National Party bagged the whole thing. And he bagged his mates, including Dr Smith, a former trade Minister. I wonder whether Dr Smith is listening to this debate. I suspect we can hear the cutlass being sharpened—the bacon slicer is on its way for the new member Mr Hayes. I am sure Mr Hayes is being called into the whips’ office now. The experienced Mrs Tolley may be able to call him in later on, point the finger, and tell him that it is inappropriate to bag a report that his mates in the National Party support.

I just wonder, not being a diplomat—

Hon Members: That’s true!

Hon CLAYTON COSGROVE: My colleagues say I will never be accused of being a diplomat, but I wonder just what sort of a diplomat Mr Hayes was. Did he represent New Zealand’s foreign policy or did he make it up? Tonight we have heard three options from the National Party. We still do not know what its Latin American trade policy is—we have no idea. It was gone by lunchtime or teatime; I do not know. I would like to invite the next National speaker—I suspect it may be Mr Finlayson—to get up and clarify this monumental moment we have here.

If the ambassadors from Latin America are listening tonight, I tell them not to take fright or to get confused: the National Party is not in Government. We have a Minister of Foreign Affairs—and, thank God, we have foreign ministry officials, too—who will be cringing tonight if they are sitting at their desks and listening to Opposition members. I am sure Mr Groser will agree with me that embassies and ambassadors do listen to this stuff—even to Opposition members, now and again, once or twice, and especially to those with the lineage and experience of, perhaps, Mr Groser and Mr Hayes. They actually take note of speeches that are made by the learned gentlemen and women opposite, now and again—maybe not Dr Brash’s speeches, but maybe Mr Groser’s. I can imagine the ambassadors sitting around the banquet table tonight by candlelight, shaking their heads, and trying to work out whether what they have heard from the National Party is true—all three versions of it—and wondering what the National Party’s foreign policy is.

I can see Mr McCully grinding his teeth to stumps trying to work out how to explain to our Latin American diplomat friends what the National Party position is when he goes to the next set of diplomatic missions down the road. [Interruption] I say to Dr Smith that he has gone troppo and he can taihoa. The National Party’s position is a bit like Nick Smith on benzylpiperazine, or speed, or something—it wobbles all over the place. It is a bit like Nick Smith head-butting windows; it is a strange sight to see.

I am astounded tonight. I say to Mr Hayes that we have all made mistakes—I made plenty when I was a new member—but there is a fundamental rule in Parliament: members come into Parliament with a political party, and it often helps their career prospects if they actually stick with that party. It also helps if they support the people who write the reports and who vote for their political party when it is unanimously in support of those reports. It also helps if members read the damn thing before they get up to speak.

HONE HARAWIRA (Māori Party—Te Tai Tokerau): Three months ago the Māori Party joined with our indigenous brothers and sisters right around the world to celebrate the resounding victory of Bolivia’s new indigenous President, Evo Morales. Morales’ victory was a real buzz, and not just in Bolivia. His victory was a sign of hope in a world strangling itself to death with pollution and war, and his victory gives all tangata whenua hope for the future. We join with his people in celebrating a return to humanity.

The Māori Party is pleased to stand tonight to talk to the inquiry into New Zealand’s relationship with Latin America, and we ask the House to note the Foreign Affairs, Defence and Trade Committee recommendation that we formulate proposals for promoting interaction between indigenous peoples of Latin America and New Zealand. Unfortunately, though, if our record of interaction with indigenous peoples from overseas is anything like it is with the indigenous people of Aotearoa, then we are in deep trouble, because our Government’s record here at home is nothing to boast of. In fact, earlier today we heard from other indigenous delegations that New Zealand is doing all it can to stall any consideration of the Draft Declaration on the Rights of Indigenous Peoples at the current session of the Commission on Human Rights. The feedback about our Government’s performance is a matter of shame to all caring people in Aotearoa, and to make it worse we hear that New Zealand officials are actively trying to block the call by other States for another meeting on the text. So I am forced to ask where are the voices of Labour’s Māori MPs when their own people’s rights are being ignored? What is the value of Labour’s much-vaunted Māori Potential Framework when that very potential is being throttled by their own party? If we were a mature society we would accept that there is no harm in admitting that we do not have all the answers and that we can learn from others.

The original terms of reference for this inquiry sought the fostering of cultural ties, including links between indigenous people. There are many areas for nurturing such ties, and I touch on just a few of those tonight. Te Wānanga o Aotearoa created links with Cuba to introduce a programme that has earned Cuba international awards, including one from the United Nations, for eradicating illiteracy. In fact, Te Wānanga o Aotearoa was brave enough even to bring some of Cuba’s own literacy experts to Aotearoa to help launch the programme.

Another fertile area for developing links is the media. The director of Venezuela’s television network,Telesur, recently made a statement that resonates clearly with our own Māori radio network and Māori television when he said that Telesur’s reason for being is the need to see Latin America through Latin American eyes. He said: “It is our right to have our own vision of what happens in Latin America, and not what Europeans or Americans, or whoever, tell us how we are or who we are.”

Indeed, how we are and who we are is determined very much by the way we are represented and how we represent ourselves. In Latin America many countries have large indigenous populations, including Bolivia, Ecuador, Guatemala, Mexico, and Peru. Those nations have hundreds of different indigenous groups—in fact, in Mexico alone there are 56 indigenous groups and 62 living languages. Even the World Bank has identified that the political influence of the indigenous people in Latin America, as in Aotearoa, has grown remarkably over the last two decades. The Māori Party is keen to learn more about the revival and renaissance of indigenous people and the political growth, constitutional development, and health and educational policies of other members of the world’s indigenous community.

Mexico is developing programmes to place indigenous people into significant roles in school management, and in Guatemala indigenous students enrolled in bilingual schools have higher attendance and graduation levels and reduced dropout rates, in exactly the same way as those in our own fabulous kōhanga reo and kura kaupapa movement. We can learn from Ecuador’s use of a mix of modern and indigenous medicines to help grow our own knowledge in health practice.

Unfortunately though, the chances are that if one is born indigenous in Latin America, one will be poor, and almost 35 million indigenous people there are living in poverty. A World Bank report issued last year entitled Indigenous Peoples, Poverty and Human Development in Latin America in 1994-2004 noted that 74 percent of indigenous people in Bolivia live in poverty.

It also noted that during economic crises, those who take longest to recover are always the indigenous populations. Theirs is a reality of social and political division; a reality where racism, discrimination, and social exclusion are a daily occurrence. Indeed, these are some of the greatest political challenges of the 21st century. It is no wonder then that we see the rise of organised indigenous movements, such as the Zapatista National Liberation Army in Mexico and the activist movements in Bolivia and Ecuador. Peru elected its first indigenous president in 2000. The Guatemala peace accords included the recognition of indigenous people’s rights, and now we have this success in Bolivia.

The heart of those movements in Latin America—as in Aotearoa—is rooted in longstanding traditional values. When one whānau is in strife, everyone turns up to help them out. In Ecuador they call this “minga”, a term that refers to collective work. In Aotearoa we might call it kotahitanga. We need to treasure these unique cultural values and to establish links that will strengthen those values for the benefit of us all. It is timely that Aotearoa now has a party that gives voice to its own indigenous people on matters of national interest, and we challenge the Government to be bold enough to let that voice be heard in the forums considering the Draft Declaration on the Rights of Indigenous Peoples.

It is also time to review the free-trade agreements that are tearing apart the fabric of Latin American countries, and to ask the hard questions about how such arrangements maintain a level of poverty that kills the potential of the indigenous world. I want to finish with the words of Bolivia’s new President Morales, who said: “I believe only in the power of the people. I have seen the importance of the power of a whole people, of a whole nation. For those of us who believe it important to defend humanity, the best contribution we can make is to help create that popular power. We need to be led by the people, not use or manipulate them.” Tēnā koe, tena koutou katoa.

CHRISTOPHER FINLAYSON (National): I want to begin my contribution tonight by paying tribute to the memory of John McArthur. John McArthur was New Zealand’s first ambassador in Chile, with cross-accreditation to Peru. He was appointed in 1973, and he died earlier this year. But the very fine work that John McArthur started in 1973 has continued through the good work of the Ministry of Foreign Affairs and Trade and, as this report states, we now have embassies in Brasília, Buenos Aires, Mexico City, and Santiago.

I congratulate the Foreign Affairs, Defence and Trade Committee on its report. I am a little disappointed in the Government response, because I consider that really to be largely polysyllabic waffle. There are many words that signify not a lot at all. I want to focus on a few key items, because I think when one is moving into relatively new territory like Latin America, rather than try to do too much, it is better to focus on a few things and to do them well.

So my first comment concerns diplomatic posts. I agree with the recommendation that we probably have enough diplomatic posts at the present time and that there is a lot of work to be done to bed in the relatively new posts in Brasília and Buenos Aires. So I think that the key aim or response of the Government that I can agree with is that the Government will keep under review the question of representation in the region and whether a further post should be established.

Why on earth we need an honorary consul in Paraguay beats me. I was surprised at the contribution of the member of the Green Party, Mr Locke. I thought, given his views, he would want an embassy in Cuba and would want to be appointed there. But in the future I think that we should look very closely at opportunities that exist in Venezuela. It is interesting that in 2001 $266 million worth of products were sold to Venezuela and that in 2005, of the $414 million gained from exports to Latin America, $123 million came from Venezuela. So, obviously, there is great potential in Venezuela, particularly with the sale of dairy products, and we should be looking very closely at the opportunities there.

The second point I wish to make concerns language. In my opinion, not enough New Zealanders are bilingual. I am sure the member for Otaki probably thinks that people in Latin America speak Latin, but he would be wrong. They speak the two great Romance languages, Spanish and Portuguese. I am sure that the Minister for Social Development and Employment, the member for Dunedin South, who taught modern languages for many years, would agree with me that, regrettably, French and German are becoming less popular and that in terms of the future we should be looking to ensure that New Zealanders are adequately taught Spanish and Portuguese. Spanish is the most widely spoken of the Romance languages in the modern world, and I think it would be fair to say that Portuguese is spoken by a couple of hundred million people. So every opportunity should be given to New Zealanders to ensure that they speak these languages, the languages of Latin America, because it is very important for the future that more New Zealanders are bilingual. It is a sad reflection on the education system that that is not the case at the present time and that we compare very unfavourably with those who live in Europe.

The third point I want to make—and this is where I have great difficulty with the Government response—is that the responses to recommendations 4, 5, and 10 seem to use a lot of words but mean very little. What does it mean, when the Government responds to recommendation 4, to state: “The Government is currently making arrangements for the next session of the CER/MERCOSUR officials’ dialogue, to be held in Wellington in March this year. It is planned that the dialogue continue as an annual event.”? How does that really expand on opportunities for linking CER and Mercosur trading zones? There seems to be a lot of talk but not a lot of action. In my submission, in terms of trade, the key thing to do over the next decade is to focus on Brazil and Chile—particularly Brazil, where we have recently opened a new embassy.

The final point concerns immigration. Strangely, this report did not address immigration. I read the report, as I said, with great interest, but I was disappointed that immigration was not addressed because I think that Latin America could be a prime source of migrants for New Zealand. I endorse what Mr Groser said. It is very apparent that in the period immediately after the Second World War Australia had a lot of Italian and Greek migrants, and I think we all agree that Australian society is much richer as a result. We should have done that at that time, and we missed a great historical opportunity. Peter Fraser probably preferred more English trade unionist immigrants, but I think that we should grab this opportunity and actively explore the possibility of immigration from Latin America. As I said, I think it is a prime source for migrants.

So the relationship between Latin America and New Zealand, which, as I said, was fostered in 1973 by the appointment of the late John McArthur as our first Ambassador to Chile, has grown, but there is tremendous potential for further growth. It is a continent we cannot afford to avoid or ignore, and I look forward to seeing this relationship grow and being nurtured over the years to come.

Motion agreed to.

The House adjourned at 10 p.m.