Thursday, 24 August 2006

Thursday, 24 August 2006

Thursday, 24 August 2006

Madam Speaker took the Chair at 2 p.m.

Prayers.

Obituaries

John (Jack) Wallace Ridley QSO

Madam SPEAKER: I regret to inform the House of the death on 23 August 2006 of John (Jack) Wallace Ridley QSO, who represented the electorate of Taupo from 1972 to 1975 and from 1978 to 1981. I desire, on the behalf of this House, to express our sense of the loss we have sustained and our sympathy with the relatives of the late former member. I now ask members to stand with me and observe a period of silence as a mark of respect for his memory.

Honourable members stood as a mark of respect.

Business Statement

Business Statement

Hon Dr MICHAEL CULLEN (Leader of the House): Next week in the House priority will be given to the remaining stages of the KiwiSaver Bill, the Child Support Amendment Bill (No 4), the Standards and Conformance Bill, and the Employment Relations Amendment Bill.

SIMON POWER (National—Rangitikei): Perhaps the Leader of the House could advise Parliament whether it is his intention to introduce any retrospective legislation during this 4-week parliamentary sitting.

Hon Dr MICHAEL CULLEN (Leader of the House): Not that I am aware of at this stage.

Points of Order

Election Advertising—Auditor-General's Report

SIMON POWER (National—Rangitikei): I raise a point of order, Madam Speaker. I ask you for a considered ruling when the House resumes next week. The draft Auditor-General’s report into advertising expenditure in the 3 months before the 2005 general election has attached as appendix 1 an opinion from the Solicitor-General. In that opinion the Solicitor-General states: “The appropriations do not cover activities by members in their capacity as candidates for election.”, and he goes on to say that the Parliamentary Service Act reinforces that view. As the House knows, Madam Speaker, the Solicitor-General states further that it is you who is responsible for the Parliamentary Service vote. Significantly, the Solicitor-General finds further that the Members’ Handbook of Services notes that in the event that the vote-funded advertising material is determined to be in breach, you have a discretion to require members or parties to reimburse the vote for those costs. In respect of those parties that have been found to have breached those rules and that have not repaid moneys owed to the vote, I now ask you to exercise that discretion.

Madam SPEAKER: It is not a point of order of this House, because, in respect of the matters raised, the role the Speaker has is that of Minister responsible for Parliamentary Service matters and, therefore, that matter will be dealt with in another context. I will just say, though, for the information of members, that I tend not to rule or make any decisions until I have all the information available.

SIMON POWER (National—Rangitikei): I raise a point of order, Madam Speaker.

Madam SPEAKER: I have ruled. A new point of order is perfectly acceptable, but I have ruled on that matter.

SIMON POWER: I just wish to emphasise that although all information may not be to hand, the Solicitor-General’s opinion, as I understand it, is in its final form, and any assistance you would be able to give the House on the interpretation of that matter pursuant to the Parliamentary Service handbook would be helpful.

Madam SPEAKER: I have ruled on the matter. It is not a matter for the Speaker; it is a matter for the Minister responsible for the Parliamentary Service, which has a totally different capacity.

RODNEY HIDE (Leader—ACT): I raise a point of order, Madam Speaker. It may help this whole matter if you do prepare something for Tuesday, just to explain the difference between being Speaker and being the Minister responsible. It might save a lot of trouble further down the track.

Madam SPEAKER: I am quite happy to hold a seminar outside House time for those members who would find it interesting.

Questions for Oral Answer

Questions to Ministers

Tourism—Overlander Rail Service

1. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister of Finance: Can he confirm that tourism is our major export earner; if so, does he wish to review his comment in the House yesterday that “We do not export anything via the Overlander.”?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes, it is, only because of course agricultural exports are not combined; they are disaggregated. If they were combined, then easily agricultural exports would be our largest export earner. No, I do not wish to revise my answer from yesterday. The key word there is “via”. I was referring to the carrying of New Zealand goods to the market.

Jeanette Fitzsimons: Is he aware of a 400 percent increase in passengers, largely tourists, achieved on the Tranz Alpine line as a result of good marketing, and what will he do to help negotiate a package that will help the Overlander to achieve the same success?

Hon Dr MICHAEL CULLEN: I appear to have done so already. The announcement of the closure of the Overlander has led to a large increase in bookings until the point of closure.

Peter Brown: Will the Minister take this opportunity of clarifying his position: will he seriously consider a proposal from Toll that requires a modest subsidy for a short period of time, providing he receives a properly constructed business plan?

Hon Dr MICHAEL CULLEN: In the extraordinarily unlikely event that Toll made that offer, I would seriously consider it. What I have received is an offer of an ongoing, in perpetuity, subsidy, which, given our experience with the current contracts on rail access, would no doubt be sought to being revised subsequently in Toll’s favour very substantially.

Sue Kedgley: How does the loss of the only long-distance passenger rail service in the North Island fit in with the Government’s National Rail Strategy, which commits the Government to “retaining the existing rail network” and “maximising the use of rail transport in New Zealand”; and why would the Government not consider a 2-year package such as has been proposed by the Green Party, rather than an indefinite subsidy?

Hon Dr MICHAEL CULLEN: I thank the Green Party for its offer, but it is not Toll. Toll has not made that offer.

Peter Brown: Would the Minister consider subsidising the service at a modest level for a short period of time if he receives a properly constructed business plan from an additional operator, other than Toll?

Hon Dr MICHAEL CULLEN: In order for that to happen, the Overlander service must cease. That is part of the conditions of the current track access agreement with Toll.

Peter Brown: I raise a point of order, Madam Speaker. I think we accept that the Overlander service will cease, but I am asking a specific question: would the Minister receive positively a proposal from another operator, albeit a few weeks or months after the Overlander service ceases?

Madam SPEAKER: That is not a point of order, but the Minister may wish to add to his answer.

Hon Dr MICHAEL CULLEN: I am happy to comment further. I have not yet ruled out any further renegotiation with Toll. Mr Mike Lee of the Auckland Regional Council met with Toll today. Apparently at that meeting no progress was made, but Mr Lee is continuing work. I will certainly consider any approach around a new tourism-based venture that looks to have a likely chance of success, but I think also those regional councils that have been showing an interest should also come to the party. Everybody is keen to spend the Government’s money and to offer it up on their own platter.

Keith Locke: Will the Minister admit that he was wrong yesterday to complain about the Auckland Regional Council charging $200,000 a year for the Overlander to be at the Britomart rail terminal, when the council said today that it has subsidised the Britomart access fee from between $95,000 to $122,000 a year, and will he discuss with the Auckland, Waikato, Manawatū, and Wellington regional councils their proposal for a joint Government - local government financial rescue package to keep the service going while its long-term viability can be established?

Hon Dr MICHAEL CULLEN: In answer to the first part of the question, yes. As to the second part, I have received no proposal from regional councils to subsidise the Overlander. I have received proposals that we should subsidise the Overlander.

Sue Kedgley: I seek leave to table the Government’s National Rail Strategy, with its commitment to retaining the existing network and maximising the use of rail transport.

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

Keith Locke: I seek leave to table a statement issued today by Mike Lee, the chairman of the Auckland Regional Council, which proposes a joint financial rescue package that I presume both Government and local government would contribute to in order to save the Overlander service.

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

Election Advertising—Auditor-General’s Report

2. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Justice: Is the Ministry of Justice undertaking any work on resolving the issues foreshadowed in the Auditor-General’s draft report on advertising from parliamentary funds; if so, what is that work?

Hon Dr MICHAEL CULLEN (Leader of the House) on behalf of the Minister of Justice: The Ministry of Justice has not seen the draft report, but it is undertaking a wide range of work around electoral law.

Hon Tony Ryall: What work, if any, is the ministry undertaking on options for retrospective action to try to legitimise unlawful spending identified by the Auditor-General in his draft report on parliamentary funding on election campaigns, and does any of that work involve amending provisions related to political corruption?

Hon Dr MICHAEL CULLEN: I am aware that the Ministry of Justice and Treasury have looked at ways in which validation might occur. Of course, validation occurs every year. That member’s party validated, for example, $50 million of unlawful tourism expenditure in one year.

Gordon Copeland: I raise a point of order, Madam Speaker. I guess you will get used to this. I could not hear the latter part of the Minister’s answer to that question. I think it was an important answer that we, in this part of the House, would like actually to hear.

Hon Dr MICHAEL CULLEN: I was explaining that validation of appropriations actually happens annually, as part of the annual financial review bill. Of course, the members opposite are not paying back the money spent on their billboards, nor have they paid back to the Exclusive Brethren the money it wasted.

Rodney Hide: I raise a point of order, Madam Speaker. I still could not hear the answer.

Madam SPEAKER: I agree. Would the Minister please have another go.

Hon Dr MICHAEL CULLEN: I will just briefly say that there is an annual financial review bill—[Interruption]—that is the truth—that validates expenditure almost every year, and that happened under the National Government.

Jeanette Fitzsimons: In that case, will the Minister be proposing legislation to validate the non-payment of GST by the National Party on its campaign spending?

Hon Dr MICHAEL CULLEN: No—

Madam SPEAKER: I have not called the Minister. Members who ask questions are entitled to be heard; Ministers who answer questions are entitled to be heard. This House supports the notion of freedom of speech.

Hon Dr MICHAEL CULLEN: No; that matter, of course, was not an appropriation. I understand that the National Party has now paid the GST.

Hon Tony Ryall: In respect of his answer to my supplementary question, what specific items is the Ministry of Justice looking at that need validation, and why?

Hon Dr MICHAEL CULLEN: At this stage it is not clear that there are any, of course, as we are yet to have the final report of the Auditor-General.

Hon Tony Ryall: Is he aware of any advice from the former Chief Electoral Officer, David Henry, on the Labour Party’s decision to include the cost of the pledge card in its election expenses before the election, and then, after the election, to withdraw that offer, so avoiding a negative public statement from Mr Henry before the election; and does he think any other body believes there is confusion about election expenses and corrupt practices?

Hon Dr MICHAEL CULLEN: I assume other bodies do, because the National Party has paid back some money that it thought it had spent legitimately in the first place.

Hon Tony Ryall: Has the Minister of Justice seen this paper from the then Chief Electoral Officer, David Henry, which was produced following a meeting with the police to discuss Labour’s election spending and the decision of the police not to charge Labour with corrupt practice, because the police thought there was confusion about election-spending rules; if so, has he read that Mr Henry told the police that the relevant legal provisions were clear, that they had been discussed with party administrators before the election, and that the Chief Electoral Office had obtained Crown Law advice that confirmed Mr Henry’s repeated warnings to the Labour Party that its election spending needed to be declared?

Hon Dr MICHAEL CULLEN: I cannot speak for the Minister; I can speak only for myself. No, I have not seen that piece of paper.

Hon Tony Ryall: Is he aware of any other Ministers, or those who have the responsibilities of Ministers, who have seen the letters from the former Chief Electoral Officer, David Henry, sent on 2 September to the Labour Party, stating that the Helen Clark pledge card should be included as an election expense, or Mr Henry’s letter of 12 September advising that the Helen Clark fold-out brochure should be included as an election expense; if so, what action would he have expected honest Ministers to take to avoid their party committing a corrupt practice?

Hon Dr MICHAEL CULLEN: No, I am personally not aware of that.

Hon Tony Ryall: Would he have any concerns if the former Chief Electoral Officer, David Henry, was invited to appear before the Justice and Electoral Committee during its inquiry into the 2005 general election, considering that Mr Henry was the key public official who warned Labour twice before the election that its Helen Clark pledge card was an election expense, and would he be concerned if Labour and Green MPs were blocking this whistleblower from coming before the select committee on the funding scandal?

Hon Dr MICHAEL CULLEN: That is a matter for the select committee and its members.

Child, Youth and Family—Complaints

3. JUDY TURNER (Deputy Leader—United Future) to the Associate Minister for Social Development and Employment (CYF): Does Child, Youth and Family record the number of complaints received from those who feel unfairly treated by the actions, procedures, or decisions of the department; if so, how many complaints have been received in the last 5 years?

Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)): I am advised that all complaints that the department receives are thoroughly investigated, but currently there is no central database that captures all complaints made to Child, Youth and Family staff.

Judy Turner: Does she agree that Child, Youth and Family should be accountable to an organisation outside itself, given its statutory powers; if so, will she support the call of United Future to establish an independent complaints authority for Child, Youth and Family?

Hon RUTH DYSON: I certainly agree that the actions of Child, Youth and Family staff, like all other public servants, should be accountable. In terms of the latter part of the member’s question, I am certainly prepared to review existing pathways for complaints to be made—for example, the Social Workers Registration Board, the Office of the Ombudsmen, the Privacy Commissioner, the Human Rights Commission, and any others—and will discuss the outcomes of those considerations with the member.

Georgina Beyer: What is Child, Youth and Family doing to strengthen its complaints procedures?

Hon RUTH DYSON: I am pleased to advise that work is under way to develop a new national database that will ensure that complaints can be collated centrally. The database is just one of the benefits we are seeing as a result of the merger between Child, Youth and Family Services and the Ministry of Social Development.

Judy Turner: Is the Minister aware that the Police Complaints Authority—for which the Child, Youth and Family’s equivalent could be considered comparable—costs approximately $2.1 million per year, yet its effect on public confidence and accountability is considered priceless; if so, is not a Child, Youth and Family complaints authority a very small cost for a very significant and necessary benefit for parents and families?

Hon RUTH DYSON: Yes, I am familiar with those figures and I will certainly take that information into consideration when undertaking the existing complaints pathways review.

Judith Collins: Why is Child, Youth and Family struggling to keep accurate records, and continuing to produce incorrect details of the delays around unallocated child abuse cases as it has on a number of occasions this year?

Hon RUTH DYSON: This is not a case of any department, including Child, Youth and Family, struggling. There is no database to collect that information centrally. With regard to the second part of the question, I agree that inaccurate information is totally unacceptable, and I have certainly relayed that view to the chief executive.

Labour Party Pledge Card—New Zealand Herald Article

4. JOHN KEY (National—Helensville) to the Minister of Finance: Does he stand by his statement to the House yesterday that “I do not think even the New Zealand Herald journalists believe that I have the capacity to bully them.”?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes, and I stand by my position. I did not, and never intended to, bully them.

John Key: Why then did senior New Zealand Herald journalist and senior political commentator John Armstrong write in his column on Saturday, 19 August that that was exactly what the Minister had done, by wording a press release that left the threat of retaliation hanging in the air?

Hon Dr MICHAEL CULLEN: I never did any such thing and I happen to disagree with John. I would be delighted if he would finally reply to the challenge to explain the moral difference, particularly given the New Zealand Herald editorial the previous day that compared the Labour Party to taxpayers having to pay back the tax they previously thought they did not have to pay.

John Key: If he had no intention all along of withdrawing the legislation retaliating against the New Zealand Herald’s owners, APN, and he was not trying to threaten them, why did he not make that clear when he made his statement on 15 August; and if he is not constantly trying to threaten the New Zealand Herald, why does he look up at them every time he answers a question?

Madam SPEAKER: I have not called the Minister. Please be seated. I will not be calling the Minister until the Minister can be heard.

Hon Dr MICHAEL CULLEN: I invite members to look up into the gallery and see Audrey Young smiling at me. She does not take this seriously, either.

John Key: Why did the Minister not follow the advice of his own press secretary, Mike Jaspers, who warned him not to give this release and who warned him of the implications of the release; and why did he go off on his own tangent, knowing exactly what the implications of this press release would be?

Hon Dr MICHAEL CULLEN: That is completely incorrect. What the member may prefer to explain is why he invited his local police area commander to a National Party fund-raiser without telling the area commander it was a National Party fund-raiser.

Madam SPEAKER: The member has a right to be heard in asking his question, so we will wait for silence.

John Key: Is the Minister aware that section 6 of the Tax Administration Act requires him to treat all taxpayers fairly and impartially, and, furthermore, to be seen to be treating all taxpayers fairly and impartially; and is it not a fact that raising the tax affairs of a newspaper critical of his Government puts him in breach of that very Act?

Hon Dr MICHAEL CULLEN: Apart from anything else, I suggest that the member read the Act again, and read who the responsible Minister is that the Act refers to.

Rodney Hide: Is it the Minister’s experience in politics that New Zealand Herald journalists are capable of being bullied; if so, would he share with the House how one does it?

Hon Dr MICHAEL CULLEN: I think one has to go back a long way, be significantly smaller, shorter, and wider, and grunt rather nastily.

KiwiSaver Scheme—Enhancement

5. Hon MARK GOSCHE (Labour—Maungakiekie) on behalf of SHANE JONES (Labour) to the Minister of Finance: What enhancements, if any, does he plan to introduce to the KiwiSaver scheme?

Hon Dr MICHAEL CULLEN (Minister of Finance): Today I announced a series of changes that build on the excellent work of the Finance and Expenditure Committee. Among these changes are the exemption for employer contributions to the KiwiSaver scheme and the specified superannuation contributions withholding tax, capped at the lesser figure of the employer’s contribution or 4 percent of the employee’s gross salary or wages.

Hon Mark Gosche: How will these changes benefit workers and employers?

Hon Dr MICHAEL CULLEN: By making the employer contributions tax-free up to the 4 percent limit, we are making it more attractive for workers to save, as their balances will grow more quickly with an employer subsidy. We are also giving employers more choices when it comes to remunerating their workers, and I welcome the fact that even before these changes were announced, Fletcher Building became the first employer to propose a subsidised KiwiSaver workplace scheme.

Gordon Copeland: Will the changes announced today assist New Zealanders to build equity in their family home; if so, how?

Hon Dr MICHAEL CULLEN: It is obvious that the changes announced today do, because they include a mortgage diversion scheme proposed by the member who asked the question. That will allow part of a person’s KiwiSaver contribution to go towards paying off the mortgage on his or her home.

Craig Foss: Can the Minister confirm that the indexation of personal tax rates, as promised in the 2005 Budget, will not now be implemented, due to a trade-off against the mortgage diversion changes to the KiwiSaver scheme, as announced today?

Hon Dr MICHAEL CULLEN: No, help is on its way.

John Key: Can the Minister confirm that some employers will offset the cost of their contributions to employee accounts against future wage increases, so that, in effect, for those employees there is no free lunch here?

Hon Dr MICHAEL CULLEN: No, I cannot confirm that. Obviously, it is a matter of negotiation between employers and employees. But for a member who has occasionally flirted in public with the idea of a compulsory scheme, that seemed a particularly strange question to ask.

John Key: Can the Minister confirm that, in effect, for some people who are currently in a match savings scheme that may become KiwSaver compliant—to take the example of someone in the State sector retirement scheme who currently has 6 percent of his or her income trapped in that scheme; 3 percent from the employee and 3 percent from the employer—now under the mortgage diversion changes, such employees will in fact be able to take the 3 percent out that they are contributing, and so for some people savings will go down and not up, as a result of his changes?

Hon Dr MICHAEL CULLEN: No, because if it were the KiwiSaver scheme, they could of course withdraw completely, with a holiday on their contributions. The point of the mortgage diversion scheme is that they retain contributions into, and in connection with, the KiwiSaver scheme.

Taito Phillip Field—Advice to Associate Minister of Immigration

6. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Minister of Immigration: Is he satisfied Taito Phillip Field provided the Associate Minister of Immigration, the Hon Damien O’Connor, with all relevant information prior to the Minister’s decision to issue a special direction for a work visa for Mr Sunan Siriwan; if not, what additional information should Taito Phillip Field have provided in order for the Minister to make an appropriate decision?

Hon DAVID CUNLIFFE (Minister of Immigration): The Ingram report indicates he did not provide all such information.

Dr the Hon Lockwood Smith: Would the fact that Taito Phillip Field sent Mr Sunan Siriwan to Samoa, where Mr Sunan Siriwan tiled 460 square metres of Mr Field’s house without pay, be considered relevant information, and has Taito Phillip Field explained to him why he did not provide that relevant information prior to the Minister’s decision?

Hon DAVID CUNLIFFE: The Associate Minister was entitled to receive from Mr Field all relevant information—as Associate Ministers are from any member making such representations.

Dr the Hon Lockwood Smith: Would the fact that Mr Sunan Siriwan laid a new floor at Maria’s Health Care Pharmacy, a business run by Mrs Field’s daughter-in-law in Samoa, be relevant information; if so, what explanation has Taito Phillip Field given for his failure to provide that information prior to the Minister’s decision?

Hon DAVID CUNLIFFE: The Ingram report makes clear that Mr Field may have committed some errors of judgment—[Interruption] For the benefit of members opposite that is not now news. The Prime Minister concurs with that view and so do I.

Dr the Hon Lockwood Smith: Would the fact that Mr Sunan Siriwan was tiling Maxine’s Cake Shop, owned by Mr Field’s stepson in Samoa, for no pay be considered relevant information; if so, what advice has he received as to why Taito Phillip Field failed to provide that information prior to the Minister’s decision?

Hon DAVID CUNLIFFE: To my knowledge I have received no specific advice on that matter.

Dr the Hon Lockwood Smith: Would it be relevant information that at the very time Taito Phillip Field was making representations to the Associate Minister that a special direction be granted to allow Mr Sunan Siriwan to be reunited with his child in New Zealand, that child was, in fact, living in Thailand; if so, what explanation has been provided by Mr Field as to why that relevant information was not provided?

Hon DAVID CUNLIFFE: As I have said, and as we have traversed in this House, Ministers are entitled to all relevant information such as that.

Dr the Hon Lockwood Smith: Would it be relevant information that at the very time Taito Phillip Field was making representations for work visas to be granted to both Mr Sunan Siriwan and Ms Phanngarm to allow for the reunification of this family in New Zealand, Mr Field’s stepson had just paid to fly Ms Phanngarm and her child from Thailand to Samoa where Mr Sunan Siriwan was working without pay on Mr Field’s house, and has he received any explanation as to why that relevant information was not provided by Mr Field prior to the Minister’s decision?

Hon DAVID CUNLIFFE: Yes and no.

Te Arawa Deed of Settlement—Ngāti Rangiteaorere

7. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister in charge of Treaty of Waitangi Negotiations: What interactions, if any, has he or his department had with Ngā Kaihautū o Te Arawa regarding the status of Ngāti Rangiteaorere, subsequent to the initialling of the Te Arawa deed of settlement at Parliament on 8 August 2006?

Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) on behalf of the Minister in charge of Treaty of Waitangi Negotiations: None.

Te Ururoa Flavell: Is the Minister aware that in the last 16 days Ngāti Rangiteaorere have withdrawn from Ngā Kaihautū o Te Arawa; and can he explain whether those associated with Ngā Kaihautū o Te Arawa will still receive the $36 million, which was inclusive of Ngāti Rangiteaorere, or will the allocation be reduced accordingly; if so, by what amount?

Hon MITA RIRINUI: Any withdrawal of Rangiteaorere’s membership, in terms of its registered affiliates, is really an issue between Rangiteaorere and the Ngā Kaihautū o Te Arawa Executive Council. As for modification of the entire claim, that has been done in terms of an area known as Rangitoto maunga. It is acknowledged that Rangiteaorere do have interests in that maunga, and therefore the modification has taken place.

Te Ururoa Flavell: How will the Minister ensure that those members of Ngāti Rangiteaorere who declared Ngāti Rangiteaorere as their iwi, and who have now withdrawn from Ngā Kaihautū o Te Arawa, will not participate in voting, particularly in ratification votes for other tribes of Ngā Kaihautū o Te Arawa?

Hon MITA RIRINUI: I cannot give the member that assurance. Those of Rangiteaorere also whakapapa to other iwi involved in the claim.

Taito Phillip Field—Advice to Associate Minister of Immigration

8. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Minister of Immigration: When he told the House on Wednesday, 26 July that his department “attempted to ensure that Mr O’Connor was in receipt of relevant information from Samoa about Mr Field’s relationship with Mr Siriwan”, how effectively did his department achieve that?

Hon DAVID CUNLIFFE (Minister of Immigration): As I have previously stated in this House, I concur with the Secretary of Labour’s view that the department’s processes could be strengthened to ensure in future that decision makers have access to all relevant information.

Dr the Hon Lockwood Smith: Is it correct that six sections of the department—namely, the Apia branch, the immigration intelligence unit, the Pacific division, the service international section, the short-term overstayers compliance team, and the failed refugee compliance team—were all in possession of the information that Mr Siriwan was working on Taito Phillip Field’s house in Samoa at the time the Minister was considering his immigration case; if so, how many sections of his department have to be in possession of relevant information before the Minister is told about it?

Hon DAVID CUNLIFFE: It has been accepted by the Ingram inquiry that what is most likely to have occurred in this instance is that the Minister’s private secretary was informed but did not pass that information to the Minister because of the unconfirmed nature of the allegations.

Dr the Hon Lockwood Smith: Is it correct that the Apia branch, the immigration intelligence unit, the Pacific division, the service international section, the short-term overstayers compliance team, and the failed refugee compliance team were all in possession of the information that Mr Siriwan was working on Taito Phillip Field’s house in Samoa at the time the Minister’s department prepared the briefing for Mr O’Connor for his decision; and does the Minister really expect the public to believe that all six of those sections of his department coincidentally just forgot to pass on that information in their briefing to Mr O’Connor?

Hon DAVID CUNLIFFE: I expect the public to believe the findings of the Ingram report, which are quite clear on that matter.

Dr the Hon Lockwood Smith: Is it correct that of the six sections of the department that were in possession of the information about Mr Siriwan and Taito Phillip Field, the Apia branch manager believed “Damien knew about that before he made the decision.”; if so, how many of the other five sections of the department also believed that the Minister knew, prior to making his decision?

Hon DAVID CUNLIFFE: That matter has also been thoroughly traversed in the Ingram report. Mr Ingram found that the likelihood was that Mr Dalmer’s understanding—the Apia manager—was incorrect.

Dr the Hon Lockwood Smith: When Mr Field had written to the Associate Minister on 18 May claiming that the Minister had decided to consider favourably a 2-year work permit for Mr Siriwan and to cancel the deportation order on his spouse, is it reasonable to assume that the Associate Minister’s office would have been well aware of the Siriwan case; and how then does he explain the Associate Minister’s office forgetting a 5-minute phone call from the group manager of the service international unit of the Immigration Service querying whether the Associate Minister was aware of all the information they had on Phillip Field’s involvement with Siriwan?

Hon DAVID CUNLIFFE: Mr Ingram concludes that the Minister’s private secretary advised him some time after the decision was made on the 23rd, and before her conversation with the Apia manager and others on the 28th.

Dr the Hon Lockwood Smith: How competent does it make his office, and the office of the Associate Minister, appear when he supports the claim that a direct call from a senior departmental manager to the Associate Minister’s office, querying whether the Associate Minister was aware of the serious issues surrounding Mr Field’s involvement with Mr Siriwan, could just be forgotten, and when the letter from Keith Williams to the Minister of Immigration, detailing the seriousness of those issues, was not received by the Minister for 6 weeks, as he alleged in this House yesterday, or are these lapses in both offices just part of an elaborate cover-up to quarantine the damage from the Phillip Field saga?

Hon DAVID CUNLIFFE: It is unbefitting of the member to make such allegations against officials. The chief executive stated on 13 April 2006 that the department did not meet the standard of ensuring that all relevant information held by the department was demonstrably available to the decision maker—the Minister.

Pupil-Teacher Ratios—Reduction

9. MOANA MACKEY (Labour) to the Minister of Education: What is the Government doing to further reduce pupil-teacher ratios?

Hon STEVE MAHAREY (Minister of Education): I have a spot of good news. Yesterday I announced a $26 million initiative that will allow primary schools to employ an additional 455 teachers from next year. This builds on the 3,040 new teacher positions that Labour has created since 1999 and brings our annual investment in extra staffing to more than $200 million a year. These teachers are above what is needed for normal roll growth and will reduce teacher-pupil ratios, ease teacher workloads, and improve learning outcomes for our students. I am sure the policy is endorsed by the entire House.

Moana Mackey: If the Government now spends more than $1.5 billion a year on school staffing, resulting in a reduction in class sizes, does the Minister intend to do anything further to reduce class sizes?

Hon STEVE MAHAREY: This Government will continue to reduce class sizes in every New Zealand school. This includes a commitment to employ around 1,300 extra primary school teachers so that by 2008 there is a ratio of one teacher to every 15 students in junior classes. Our teacher supply policies are already having a major impact on the number of new teachers coming into schools, the number of Kiwi teachers returning to this country, and the number of overseas-trained teachers coming here to teach. Unlike Tau Henare from the National Party, we support teachers. He does not. That is why they vote Labour.

Pita Paraone: Would the Minister explain why teachers with 4-year university qualifications are still having to carry out crossing duties; would we not get more bangs for taxpayers’ bucks through the development of a paraprofessional group of workers in schools to carry out small-group and one-to-one tuition under the supervision of fully trained professionals?

Hon STEVE MAHAREY: I think that is an interesting idea. It was one of the things that has developed around a discussion of support and ancillary staff in schools. The way schools operate these days one can see that those staff are becoming permanent. The debate is really as to what their future role will be, so that professionals can carry on with their core jobs.

Dr Pita Sharples: What progress has been achieved in implementing the recommendations contained in the report of the School Staffing Review Group that there should be a teacher-pupil ratio of no greater than 1:15 in kura kaupapa Māori and in total Māori immersion and qualifying Māori bilingual classes in regular schools?

Hon STEVE MAHAREY: The implementation of that part of the school staffing report of course depends upon our ability to recruit teachers who are fluent in te reo. At the moment, as the member will know, that is one of the challenges we have in workforce development. But we still have that goal, and as fast as we can supply those teachers those numbers will come down.

Surgery—Elective Surgical Discharges

10. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: How many elective surgical discharges were there in 2005-06 and how does this compare with the previous year?

Hon DAMIEN O'CONNOR (Associate Minister of Health) on behalf of the Minister of Health: The 2005-06 year was the busiest for our public hospitals on record, with over 105,000 in-patient elective discharges. This compares well with the previous year, despite the thousands of elective procedures cancelled due to the junior doctors’ strike.

Hon Tony Ryall: How can it be that the Government spent an extra $800 million on health last year, yet fewer New Zealanders got elective surgery than the year before—indeed, fewer New Zealanders got surgery of any kind than the year before—when Labour promised more?

Hon DAMIEN O'CONNOR: I remind that member that elective surgery accounts for just 20 percent of all hospital in-patients. We have to acknowledge that, unfortunately, due to the strike of the junior doctors, fewer elective surgeries were carried out.

Madam SPEAKER: Would the Minister please be seated. I could not hear the answer to that question, so I ask the Minister to please start again. I also remind members who have changed their seats to the front row that barracking is not permitted under those circumstances. Would the Minister please give his answer again.

Hon DAMIEN O'CONNOR: I would like to remind the House and that member that since we came into Government, 6,000 more New Zealanders are receiving elective surgery every year. We are putting money into every area of health, and we will be working particularly on the Primary Health Care Strategy to hopefully reduce those numbers over time.

Maryan Street: How does the number of elective procedures performed last year compare with the number performed in the 1999-2000 financial year?

Hon DAMIEN O'CONNOR: I think it is important to remind that member once again that when we came into Government, 99,000 elective surgery procedures were carried out. Last year there were 105,000. That is 6,000 additional elective surgery procedures last year.

Barbara Stewart: What action, if any, is his ministry taking to establish the possible extent of unmet need in the health system, which may have financial implications for the public health system in the future?

Hon DAMIEN O'CONNOR: I am not aware of the particular survey, but I do know that we have spent a huge amount of additional funding in the area of primary health care—on mental health; in every area of the public health system; on new hospitals that the last National Government refused to build—which, over time, will reduce demand. Over time, the health system will be better able to meet all the needs of New Zealanders.

Hon Tony Ryall: If the Government is doing such a good job, as he claims, why then is Graham from Rangiora being culled from the hospital waiting list for a hip replacement, even though his need is so great that he was given maximum points to get his operation—and his name has been culled from the waiting list, along with the names of over 5,000 other Canterbury people?

Hon DAMIEN O'CONNOR: It is far fairer for those patients to go back to their general practitioners to get an accurate indication of when they will receive their elective surgery. I know of a situation where, under the previous National Government, a person waited for over 10 years to get a hip replacement. We will not allow that level of uncertainty in our public health system.

Barbara Stewart: Does he not consider that his ministry should be aware of the extent of unmet need, as this will also impact significantly on future workforce requirements?

Hon DAMIEN O'CONNOR: That member does make a valid point. It is important to know what the workforce requirements will be, and one of the first things we did on coming into Government was to plan for workforce developments. With regard to the unmet needs issue, with technology there will always be new needs that we have not accurately identified, but we are doing a lot more than the previous Government did to accurately identify and to fairly indicate to patients when they will get their procedures.

Hon Tony Ryall: How can a man who has been given maximum points to get an operation—who is in pain, who has had to give up his lawnmowing business, and who cannot live the life of an active 60-year-old—be unable to have that operation, when his specialist has given him maximum points to get care?

Hon DAMIEN O'CONNOR: I cannot comment on the individual case, but I am sure that if that person does go back to his general practitioner, he will be accurately assessed and, more likely than not, will receive access to surgery in a timely manner.

Hon Tony Ryall: Does this Minister not realise that this man went to his general practitioner, who sent him to the specialist who gave him maximum points to get an operation? He has had to give up his business and he is not able to lead the active life that this Minister leads. Yet the Minister is standing up in this Parliament and saying that everything is rosy in the garden of our public hospitals.

Hon DAMIEN O'CONNOR: I am saying that it is a whole lot better than it was under that previous National Government and—[Interruption]

Madam SPEAKER: Order!

Hon DAMIEN O'CONNOR: Thank you, Madam Speaker. I am saying that the system is a whole lot better under our Government than it was under the last National Government. And if the details of that particular case were to be forwarded to the district health board, I am sure that they would be looked at. It is not for me to comment on individual cases.

Hon Tony Ryall: I seek leave to table a schedule, based on official answers from the Minister of Health, which shows that the number of people who got elective surgery in our public hospitals last year was the lowest it has been in 6 years.

Document not tabled.

Prisoners—Drug and Alcohol Rehabilitation

11. MARTIN GALLAGHER (Labour—Hamilton West) to the Minister of Corrections: What is the Government doing to promote drug and alcohol rehabilitation in prisons?

Hon DAMIEN O'CONNOR (Minister of Corrections): Under the Effective Interventions package, which the Government announced last week, the Department of Corrections will be significantly increasing the number of drug treatment placements within prisons. We will also be expanding the availability in the community of drug, alcohol, and mental health services for offenders.

Martin Gallagher: What reports has the Minister seen on prisoner rehabilitation programmes?

Hon DAMIEN O'CONNOR: I have seen two. First, an editorial in the Nelson Mail stated: “Of real significance … is the funding of two new prison alcohol and drug units, and two general purpose rehabilitation units. The second report stated: “There has never been a stronger argument for effective rehabilitation programmes.” That comment came from Simon Power, and we welcome his support.

Simon Power: Can he confirm that the number of prisoners testing positive for amphetamine-type drugs since 1999 has increased five times; and, after 7 years in office, why is the Government doing something about it only now—given that only 74 inmates completed a drug treatment programme last year, yet 83 percent of inmates have drug or alcohol dependency?

Hon DAMIEN O'CONNOR: The member is rather liberal with the statistics. Although there has been an increase in the number of people tested for methamphetamine, the total number of people who have been identified through random drug-testing as using drugs in prison is the lowest level ever—far lower than under the previous Government—and we will continue to do random testing to identify those people.

Ron Mark: Is the Minister aware that of the 105,000-odd convictions in 2005— approximately 80 percent of which were alcohol and drug related—sentencing judges ordered less than 4 percent of offenders to undergo counselling and/or treatment programmes; if so, does it concern him that judges themselves may be contributing to the high levels of recidivism and reimprisonment rates, through their reluctance to order rehabilitative treatment as part of the sentence handed down, and what is his Government going to do about that situation?

Hon DAMIEN O'CONNOR: The Government is doing a number of things about that. We are improving the screening process for those issues, when prisoners come into prison. We have, through Effective Interventions, identified the need for a greater amount of drug and alcohol treatment, both within prison and within the community. We are confident that judges, knowing of these extra facilities, will sentence those prisoners to undertake drug and alcohol programmes.

Resource Management Act—Public Opinion

12. Hon Dr NICK SMITH (National—Nelson) to the Minister for the Environment: Will the Government reform the Resource Management Act 1991, given that this month’s Mood of the Boardroom survey found the most negative Government policy on productivity and growth was the Resource Management Act legislation, with 88 percent saying it was negative, 12 percent saying it was neutral, and 0 percent saying it was positive?

Hon DAVID BENSON-POPE (Minister for the Environment): I would like to thank the member for bringing to the attention of the House last month’s Mood in the Boardroom survey, which had this to say: “… Brash’s poor rating as an effective political leader by CEOs must raise questions over whether he will achieve the necessary political skills to head off the formidable Clark.”

Madam SPEAKER: Would the Minister please address the question. That is not relevant.

Hon DAVID BENSON-POPE: Despite efforts by the member to misinform New Zealanders, he knows only too well, as do members of the House, that changes to the Resource Management Act last year addressed the concerns of many in the community, including those of industry.

Hon Dr Nick Smith: How can he claim that his amendment bill, which was passed over a year ago, has addressed the problem, when 88 percent of business leaders said this month that it is an impediment to growth and is in need of reform; and is that not saying that his bill was a failure?

Hon DAVID BENSON-POPE: Easily and no. Those views are not reflected, for example, by more reputable groups in the community, such as Local Government New Zealand, KPMG, and Yale University, if I could cite those examples. Local Government New Zealand surveys have shown that compliance costs with the Resource Management Act are 10 to 15 percent lower than in one of our largest trading partners, Australia, and that, on average, New Zealand needed to lodge only half the number of applications to fewer authorities. A KPMG survey on costs in 2005 showed that compliance costs had declined by 28 percent from 2004, and 51 percent from 2003. The environmental performance index, which was produced by a team of experts from Yale University and Columbia University, rated New Zealand first out of 133 countries surveyed.

Hon Jim Anderton: Has the Minister received any other reports on the Mood of the Boardroom survey affecting political or economic issues that face New Zealand?

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. I know that Mr Anderton is a new member to the House, but this question is to the Minister for the Environment, and it needs to be within his ministerial responsibilities as Minister for the Environment, none of which Mr Anderton’s question addressed.

Hon Jim Anderton: The very question the member asked reflects on the Mood of the Boardroom survey of this organisation. I am asking the Minister whether he has had other reports on that survey, so the House can be informed about those, too.

Madam SPEAKER: The phrasing of the question does raise that point, but I think it is appropriate that the answers are confined essentially to the environment, and I also take the opportunity to remind members that both questions and answers should be succinct and concise. [Interruption] We have not got a question; that question has been ruled out of order. I will take a question from Steve Chadwick.

Steve Chadwick: What reports has he seen on the ease of doing business in New Zealand?

Hon DAVID BENSON-POPE: Instead of the one-sided question in the Mood of the Boardroom survey, it might have been more helpful if chief executive officers had been asked whether they thought the Resource Management Act achieved a balance between economic development and environmental sustainability, or even how New Zealand compares internationally. As the member will know, the latest World Bank report, Doing Business in 2006: Creating Jobs, ranks New Zealand first in terms of the ease of doing business, and second in terms of dealing with consents and licences, such as with the Resource Management Act consent processes. Clearly, this Government, at least, has got the balance right in terms of balancing economic development and environmental sustainability.

R Doug Woolerton: Does the Minister accept that many businesspeople blame the Resource Management Act process for holding up projects that are often delayed more as a result of their own poor planning; and does he agree that any moves to streamline the Resource Management Act process must be balanced against any lengthy community consultation and significant ratepayer costs incurred by councils?

Hon DAVID BENSON-POPE: Yes, I do. Negative Resource Management Act surveys are, no doubt, based on people’s experience of negative media reporting and the misinformation we consistently see from members opposite. The facts of the matter do not support those conclusions. Of the nearly 55,000 consents processed, 99.3 percent were granted, and 0.7 were declined. Ninety-five percent of applications are processed on a non-notified basis—the majority within 20 working days. The average median charge for a non-notified land use consent was $400. Of the 5 percent of applications publicly notified, just 1 percent is appealed to the Environment Court. Those are the applications the company bosses surveyed read about in the newspaper.

Madam SPEAKER: I did ask that Ministers please make their answers succinct. This is not the opportunity for speeches.

Hon Dr Nick Smith: Does he accept any responsibility for New Zealand dropping six places in this year’s IMD world competitiveness study, which noted that of the 61 countries surveyed New Zealand ranked as the absolute dunce of the class at number 61 for the effectiveness of its environmental laws, and why does he continue to refuse to reform the Resource Management Act when there is such compelling evidence that improvements are desperately required?

Hon DAVID BENSON-POPE: I give no credence to results like that that are absolutely at odds with the details I read earlier.

Hon Dr Nick Smith: How can any credibility be given to all the Government’s talk about economic transformation and productivity gains, when in respect of questions about the Resource Management Act, he listens only to the views of local government and dismisses the views of 128 chief executive officers of New Zealand businesses as not credible; and does he really expect us to believe that those 128 chief executive officers, who are in the engine room of the New Zealand economy, are wrong and he is right?

Madam SPEAKER: Before the Minister replies, it is not only answers that should be succinct but questions, please. Would the Minister please address the question.

Hon DAVID BENSON-POPE: Those 128 chief executive officers clearly consider the results they gave in this report to be—in their words—another nail in the Brash coffin. But in terms of the Resource Management Act, every year between 45,000 and 50,000 resource consents are issued, and 95 percent of them are processed without the formality of public notification.

Hon Dr Nick Smith: Does the Minister recall the promise from Labour in 1999 to deliver a national policy statement on biodiversity—a promise restated in 2000, 2001, 2002, 2003, 2004, and 2005 but that still has not happened; and why should this Parliament give any credibility to the latest announcements by the Minister of Energy and himself that there will be a national policy statement on energy, when they have not delivered a single national policy statement in 7 years?

Hon DAVID BENSON-POPE: Neither of those questions, as far as I can see, has any relevance to the original question.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. My primary question was in respect of the Resource Management Act. It was also in terms of business leaders’ concern, of which—in the “mood of the boardroom” survey—electricity in the Resource Management Act was a key component. The Government has recently announced, as part of its addressing of the blackout in Auckland, a national policy statement. A national policy statement is a key part of the Resource Management Act. For the Minister to suddenly argue that national policy statements are nothing to do with the Resource Management Act and the primary question is a very long stretch.

Hon Dr Michael Cullen: The policy statement for energy is issued by the Minister of Energy, not the Minister for the Environment.

Hon Dr Nick Smith: That is not correct—

Madam SPEAKER: I thank the member, but I do not need any further assistance on this. The original question, as I ruled, focused on the Resource Management Act. The question was a long one, but it did sound as though it raised the question of energy. [Interruption] I ask members to please be quiet if they want to remain in the House for what is left of question time. However, the Minister, if he felt it was inappropriate, should have raised his point as a point of order, so the response he gave in that sense was not a proper reply. So we shall start again.

Hon Dr Nick Smith: I raise a point of order, Madam Speaker. I have asked a question—a quite specific question—about national policy statements under the Resource Management Act—

Madam SPEAKER: Would the member please put his question again.

Hon Dr Nick Smith: I will be very happy to do so. Does the Minister recall the promise from Labour, in its 1999 Resource Management Act policy, to deliver a national policy statement on biodiversity—a promise restated every year since, but not delivered—and why should we give any credibility now to the promise of a national policy statement under the Resource Management Act in respect of energy, when it has not delivered a single national policy statement under the Resource Management Act in 7 years?

Hon DAVID BENSON-POPE: Labour policy and Cabinet announcements on biodiversity will be made shortly. I have no responsibility for the policy on energy.

Hon Dr Michael Cullen: Is the Minister aware of the undertaking by Mr Maurice Williamson on behalf of the National Party—I think it was reported in Driver Magazine, from memory—to gut the Resource Management Act; and can he confirm that this Act to be gutted was actually passed by the National Government in 1991?

Hon DAVID BENSON-POPE: I think it is unfortunate that a case of selective amnesia applies to the matters to do with the Resource Management Act—legislation introduced by the previous National Government—and National members now constantly refuse to acknowledge the importance of balancing the needs for economic development and environmental protection.

I seek leave to table an article in the New Zealand Herald, dated Tuesday, 8 August 2006, entitled:“Another nail in the Brash coffin”.

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

Hon Dr Nick Smith: To remind the member, given his comments about selective amnesia, I seek the leave of the House to table a tennis ball.

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

Question No. 1 to Member

Question withdrawn.

Bills

KiwiSaver Bill

Second Reading

Hon Dr MICHAEL CULLEN (Minister of Finance): I move, That the KiwiSaver Bill be now read a second time. When I introduced the KiwiSaver Bill into Parliament back in March, I said that it represented a landmark in social and economic legislation in New Zealand. I am heartened to see that through the process of submissions from the public and consideration by the Finance and Expenditure Committee the bill is now even more firmly and strongly placed to improve the income security of ordinary New Zealanders in retirement. KiwiSaver will encourage people to change the way they think about saving for retirement and, more important, change the way they act. It will provide impetus, ease, and opportunity for a broad range of New Zealanders to establish a long-term savings habit.

From its inception, KiwiSaver has been designed to make saving compelling rather than compulsory. With a relatively simply mechanism of automatic enrolment, organised in the workplace, KiwiSaver allows for deductions at source, provides benefits of economies of scale, and reaches a high proportion of the population who are able to save. The Government is also encouraging participation through supporting KiwiSaver scheme members in a number of ways. First, we will meet the cost of administration through the Inland Revenue Department. Second, a $1,000 upfront contribution will be provided to each new KiwiSaver scheme member. Third, the Government will provide a scheme fee contribution at a capped level to savers in approved KiwiSaver schemes.

A number of submissions on the bill suggest further measures the Government could take to foster a stronger savings culture through KiwiSaver. Many raised the need for tax concessions or incentives for savings. Others noted the need to promote or facilitate employer contributions. I am pleased to announce that the Government has responded to this feedback from stakeholders. As a further initiative to encourage KiwiSaver participation, employer contributions to KiwiSaver schemes will qualify for an exemption from the specified superannuation contributions withholding tax up to a limit of 4 percent, or the contributor’s own amount, whichever is the lesser. The Government will introduce a Supplementary Order Paper to give effect to this change.

A targeted specified superannuation contribution withholding tax exemption represents a moderate and prudent means to encourage businesses to help their employees reach their retirement savings goals. While employer contributions to KiwiSaver are not compulsory, such contributions may form part of the total remuneration package that employers provide to attract or retain skilled staff in a tight labour market. By exempting employer contributions to KiwiSaver from specified superannuation contribution withholding tax, we are increasing the value of the benefits employers can choose to offer their employees. The exemption, as I say, is capped at whichever is the lesser: the employer’s contribution or 4 percent of the employee’s salary or wages. This cap is a sensible measure; it will prevent excessive salary sacrifice arrangements from being entered into for the purpose of reducing a person’s tax liability, rather than saving. It reduces the risk of abuse, while also aligning with the basic savings requirements for KiwiSaver. In addition, the cap will limit the specified superannuation contribution withholding tax exemption’s fiscal cost. This is estimated to be around $35 million in forgone revenue in 2007-08, increasing to $104 million in 2008-09 and $162 million in 2011-12.

Many other new features of the bill serve to further strengthen KiwiSaver as a long-term retirement savings vehicle for working New Zealanders. I acknowledge the work of Shane Jones and the Finance and Expenditure Committee in this regard. Among the main changes are the extension of the implementation date from 1 April 2007 to 1 July 2007. This change is a further example of the Government’s responsiveness to the feedback from stakeholders. Changing the KiwiSaver start date by 3 months will ease the time pressure for employers and potential KiwiSaver scheme providers to prepare, and therefore help to ensure implementation will be as effective and efficient as possible for all involved.

Another significant change made in response to submissions is the decision to allow employer contributions to consist in part or even all of the 4 percent or 8 percent KiwiSaver contribution rates. In practice, an employee may contribute 2 percent and an employer would contribute the other 2 percent to make up the 4 percent rate. This amendment to the bill will be welcomed by many. It provides flexibility for employers in the range of remuneration options they can offer employees, and also provides an incentive to join KiwiSaver for employees who would otherwise struggle to save 4 percent on their own.

I would like to touch on another major amendment to the bill—a change to the opt-out period. New employees will be able to opt out of KiwSaver from the end of week 2 after starting their job, until the end of week 8. The opt-out period has been changed to allow employers to send employee details to Inland Revenue only once a month and therefore reduce their compliance costs. Because Inland Revenue will not be advised of new employees until later, a longer opt-out period was needed. This is just one example of many where Kiwi-Saver has been designed to be as user-friendly to employers as possible.

The effects of KiwiSaver will be far-reaching and these need to be clearly and widely communicated to all New Zealanders. It is also important that such a unique initiative should have its own unique visual identity. That is why a strong, distinctive logo has now been launched to help achieve awareness and recognition of KiwiSaver. The logo will be used on all communications and material for employers, employees, and KiwiSaver scheme providers, so it should become a familiar sight to most New Zealanders in the years ahead.

This Government wants to see a larger proportion of ordinary New Zealanders making realistic savings plans for their retirement. We have already helped to create a secure environment for planning retirement income by restoring the level of New Zealand superannuation, initiating the New Zealand Superannuation Fund, and introducing the State Sector Retirement Savings Scheme. The State has been leading the way back into workplace-based superannuation under this Government. KiwiSaver will complete the strong foundation we have put in place to support New Zealanders to prepare for their future.

The main criticism that has been made so far—apart from niggly ones around the edges, which, no doubt, we will hear more of this afternoon—is that the scheme should be compulsory. This Government does not favour compulsory individual superannuation, in part because we believe it is a risk for a consensus around an adequate base provided by New Zealand superannuation. Those who thus save significant amounts are less likely to be willing to contribute taxation to a secure and adequate New Zealand superannuation base, which a significant proportion of the population will continue to rely on for their security in retirement.

The debate is, of course, an open one and in the future, if any Government wishes to introduce a compulsory scheme, KiwiSaver will, in fact, make it easier by the very simple measure of removing the opt-out provision in KiwiSaver. On that matter, I leave the bill to the good wishes of the House.

JOHN KEY (National—Helensville): I rise on behalf of the National Party to engage in the second reading of the KiwiSaver Bill. Let me say that a Government that has its back to the wall makes policy on the hoof. Just 2 weeks ago I sat in the Finance and Expenditure Committee when the issue of mortgage diversion was raised by Gordon Copeland, the United Future member. Mr Copeland told the select committee that he wanted to introduce the concept of mortgage diversion.

When we discussed that concept in the select committee, at that stage not only did Labour members find no favour with it—in fact they rejected it out of hand—but on top of that, the officials told us that it was not possible to report back in any reasonable time frame on mortgage diversion because it was too complex, the systems were too extreme, and the analysis was far too weighty to be able to make that decision in a 2-week period.

Hon Mark Gosche: The member’s making it up.

JOHN KEY: The member is not making it up. The member sat there and heard the Labour members saying they could not vote for mortgage diversion and that it was not a good idea—from the chairman down, that is what they said. The officials said they could not cope with mortgage diversion now. They were not ready and it would take a long time to come up with that information.

So when a Government starts getting accused of corruption, because it went out and spent $882,000 of taxpayers’ money to buy an election campaign; when it has a member who is so guilty he will not go before any other reasonable tribunal to let it hear his actions, and the Government cannot toss that member out, even though it knows he is guilty, because Labour has a one-seat majority; when the Government sees its own internal poll ratings coming down—and it is all relevant—when the Government has tried to buy an election with taxpayers’ money and wants to validate its own expenditure retrospectively; and when it has a member who is in serious trouble and a poll rating that is going south, then it will make policy on the hoof. It does not matter that 2 weeks ago Government members did not want a bar of diversion, and it does not matter that the officials themselves could not provide the information—it was not going to happen. Today, lo and behold, Michael Cullen has dropped this thing on them.

I will make the prediction that the first time the chairman of the Finance and Expenditure Committee, none other than the Hon—or someone who will one day be the Hon—Shane Jones—

Chris Tremain: Right honourable!

JOHN KEY:—yes, well, he wants to be Rt Hon—heard about these mortgage diversion provisions was when he read them in Michael Cullen’s press release, which came right off the “policy on the hoof” document that he made in the last few weeks.

Let me say that a number of things are going on here. Interestingly enough, if we take a scheme like the State Sector Retirement Savings Scheme at the moment, we see that it operates in exactly the same way that KiwiSaver will now operate, going forward, but the differences are that the State Sector Retirement Savings Scheme has a 3 percent contribution rate and a 3 percent matched rate from the employer. So if we take the example of KiwiSaver, as it has been outlined this morning by Dr Cullen, we see that it will be able to have a 2 percent contribution rate matched by 2 percent, as an example, or maybe a 4 percent contribution matched by 4 percent. What in fact will happen with people currently in the State Sector Retirement Savings Scheme who have 6 percent of their income currently being saved and tracked is that that will now allow them to have half of those savings automatically diverted to their mortgage.

So we are now turning KiwiSaver, a savings account, into a checking account. That is what it will be—a checking account. People can put in some money, the Government can take it all out to pay for the deposit of their accounts, and then people can take half of it out to pay their mortgage—which tells us a couple of things. The first of them is that Kiwi workers are so overtaxed they cannot pay their mortgages without robbing their savings accounts. That is how overtaxed they are by this Government; they have to go and rob their savings accounts to do that.

But interestingly enough, if people are wondering why I am a little concerned about it, then they should just pop up to the seventh floor and see the Deputy Prime Minister, Minister of Finance, Attorney General, and Leader of the House—the man who tried to intimidate the New Zealand Herald all last week. They should just pop in and while they are in there having a tea or coffee and biscuit with him, they should ask Dr Cullen, while he is putting the jug on, why, if he did not want people just to save 2 percent—because that will be the net effect; a worker will now put in 2 percent and be matched by 2 percent, because 2 percent will be automatically diverted to his or her account, so that he or she saves 2 percent—did he say, in his question and answer sheet, that he does not support 2 percent contributions, because the accounts will be too small, too hard to administer, and will not solve the issue of retirement planning? So he does not support a 2 percent contribution but, interestingly enough, if people take out 2 percent and put it into their mortgage, what are they left with but 2 percent! But Michael Cullen does not like it, according to his question and answer sheet.

The problem is that when one’s party owes $882,000 of taxpayers’ money, and when one has not told one’s chairman of the Finance and Expenditure Committee, and when one is making policy on the hoof, one has the problem of sometimes not getting the questions and answers lined up with the policy. That is because the policy is moving so fast, Dr Cullen does not actually know what it is. Nor do the poor people who have to write the questions and answers—the officials. They are the ones who have to write the questions and answers; the very men and women who 2 weeks ago told us that we did not have a dog’s show of having a diversion—that we could not possibly work on that. I feel sorry for the default providers who wanted an extension of time because they could not even cope with what they got.

By the time we have finished with this legislation, this is the way the scheme will work. The savings accounts will turn into checking accounts. People will put their money in and they will take it out to pay their deposits. Then they will put their money in, and they will take it out to pay their mortgages. Then they will put the rest in, to take it out to pay for their food, which is going up in price, and for their petrol, the price of which has just gone through the roof. It is no wonder Dr Cullen thinks it will be a popular account. If he keeps having tax-free incentives in it, it will be unbelievable. I am going to put my entire parliamentary salary, if he ever lets me, into KiwiSaver, and then I am going to take it out and pay for absolutely everything I feel like—because that is where we are going. It is unbelievable!

The second point that is worth noting, on a very serious note, is that some employees tonight will watch their television screens and believe that somehow they have got a pay rise—that somehow their employer is magically going to match their savings and give them a pay rise. Well, the effect will really be that some employers, through coercion from unions or whatever, will have matched savings schemes. Then, when they renegotiate future pay rounds, they will take into consideration the total cost of those employees. There is every risk that those employees will in fact end up paying for their own contributions to their own accounts, and I say that that is something those workers need to consider. That is something I think is of some significance.

Let me say, from National’s position, that we opposed the KiwiSaver Bill, and we opposed it because the incentives to go in the account were non-existent—

Hon Mark Gosche:When was this?

JOHN KEY: In the first reading and the whole way through, actually, I tell Mr Gosche. We opposed KiwiSaver because it did not have incentives. The Government told us we were wrong. Its members got themselves into all sorts of trouble, so today they have made some changes. National will continue to oppose this bill in its second reading. We will take the course, in the next week or so, of fully reviewing what, exactly, the ramifications are of what the Government has done. Unlike Labour members, who did not even know that it was coming, we would like to have a consideration and a think about it.

If Dr Cullen really believed these were great ideas and really cared about them, maybe he would like to answer, for the benefit of the National members, why he made all those people parade through an extensive process of select committee hearings and then did not even bother to give them the decency to comment on the very things he had to change. The answer, if I can end with this, is that those changes were not going to happen this week; those changes were going to happen sometime around September of 2008. They would have been part of the goody bag that will get rolled out before the next election. But when a party has its back to the wall, is going south, and owes $882,000 without having the money to pay it back, it gets desperate.

Hon MARK GOSCHE (Labour—Maungakiekie): The previous member’s speech illustrates why he will never be the National Party leader: because he is lazy, basically. If he had read the report that he put his name to, as a member of the Finance and Expenditure Committee, he would have seen something very interesting under mortgage diversion. I will read a couple of sentences: “Therefore, and because of time constraints, we were advised that mortgage repayments would be best handled through financial education and the contributions holiday mechanism. Even so, we feel that such a facility has merit and would be welcomed by scheme members, and is consequently worth further consideration.” But the problem with John Key is that he is so busy preening himself he forgets to read the papers. That is why, in his electorate, they recently put out a party fund-raiser for $30 a week, and they did not tell the policeman who was coming along to speak, as a member of the New Zealand Police, that he was actually coming to speak at a National Party fund-raiser. That is the laziness of the man. That is the lack of attention to detail that means he will never be the leader.

I would say this at least about Craig Foss, Mr Tremain, and Dr the Hon Lockwood Smith: they do their work. They read the papers. They come to the select committee, ask sensible questions and, even more important, they actually know what the committee report stated, because their names are on it. They did not object to it; there is no minority report actually stating that the National Party opposed the bill. National members signed up to the statement that mortgage diversion was a good idea.

The Finance and Expenditure Committee considered whether to incorporate a mortgage diversion facility into the KiwiSaver Bill—to allow the diversion of contributions towards the repayment of a mortgage—because the entire committee felt it was not a bad idea. However, some of us were worried about the effect it would have on those low-paid workers, whom we on this side of the House are very keen to see “saving for their future.” I have to say that, apart from Mr Key, the rest of the committee worked on that assiduously, and we worked together very cooperatively. We listened to the views of Opposition members, and they listened to the views of the Government and of other members. We were very constructive. But a member actually has to be looking at the papers, engaging in the business, and listening to the submissions before that member knows what he or she is talking about.

John Key showed that although he is National’s finance spokesperson, he actually did not know anything about this bill. He is very busy thinking about the future leadership, about how good he might look on camera, and about how many people know how famous he is. He told us, in fact, that the committee should not have sub-committees, because if we go to Auckland and hear submissions but only as a sub-committee, the public might not know anybody there except for him—because he is the one who is famous. [Interruption] Mr Woolerton remembers that slight on the rest of the committee. John Key is so far up himself it ain’t funny. That is why he does not take any notice of what is in the bill.

What is in the bill is good. It is actually taking account of those people from the industry who came along and said: “We think this is moving too fast.”, so the committee has delayed it by 3 months. The industry has said that that is good, is sensible, and shows that Parliament works. It also said that a whole lot of other changes were necessary to make this bill better, in terms of compliance costs for employers. I know that my colleague the Hon Lianne Dalziel had a lot of input behind the scenes on behalf of small business, to make sure that compliance costs were brought down. As a result, the select committee has done that in a very positive way, while working together as we should.

What we have now is simple, low-cost, and voluntary. I think that is hugely important. The scheme is workplace based. That is something that New Zealand workers and employers have not had. So one after another, people from industry and people from business have come in and said: “We like this; we think it’s great.” Some of them said they supported compulsion, but most of them said they would like to see the scheme remain voluntary.

We have made some changes. We have made sure that those low-paid workers who do want to save—and we had a lot of those low-paid workers come before the committee and say they wanted to be able to save—are able to do that, and so the ability for employers to contribute to the accounts of their workers is a good way of resolving that issue. I felt like Jeanette Fitzsimons—a little concerned for our low-paid workers. So I think the compromise is, in fact, a good one, because if the employer can put in 2 percent and the employee puts in 2 percent we have to a large degree resolved the issue that Jeanette Fitzsimons and the Green Party were concerned about. We in the Labour team were also concerned about it, as were New Zealand First, United Future, and most members of the National Party—except one member—and that is why we have made that very positive change.

The change will be welcomed. We heard from submitters who said that some of the best savers in New Zealand are the lowest paid. Why? Because nobody will lend them money. They have to save for everything they need, so they have a savings ethic because it is forced upon them. This measure actually gives them an avenue for looking forward to a couple of very positive things. The first is saving for their retirement and, equally important for low-paid people, the second is looking at the opportunity to save to buy that first home through this KiwiSaver proposal.

The $5,000 that each saver might be able to get—which means that a couple could get $10,000—is a big deal to New Zealanders, but not to John Key. He is totally out of touch with the reality of ordinary New Zealanders. He still thinks that he is somewhere up in the clouds with Merrill Lynch, but members over on this side, and the select committee members, I have to say, except him, actually understand that this will be a good step-up for many, many New Zealanders who are dreaming about homeownership, or thinking: “I want to save for my retirement.”

That $1,000 contribution from the Government is a great start. I met with a lot of workers over the adjournment, at a number of meetings I attended throughout Auckland, and their eyes lit up when I told them about KiwiSaver, because those people have a genuine desire to take care of their futures. They have a genuine desire to see their families in their own homes, and this KiwiSaver Bill, which is supported by the vast majority in this House for all the right reasons, will actually give those people great hope in the future.

We had to make some changes, as I said, in respect of the start-up dates. Since the bill has been reported back, sensible measures have been announced in terms of employer contributions being tax free. As well, the mortgage diversion promoted by United Future’s very good member, Gordon Copeland, has now become a reality. I welcome that, and the committee welcomed that—and that is stated in the report.

Again, I go back to John Key, the would-be leader of the National Party, and ask him please to learn to read the report that has his name on it, so that when he stands up in the House to make a speech, he does not make a complete idiot of himself by talking about the mortgage diversion scheme as if it were something the select committee and the Government said was impossible, when the committee actually said it was worth further consideration, and possible in a very short space of time. The scheme is not hugely complicated at all, in my view, and nor was the committee ever told that it was. We were told that the banks had some difficulty with it, not that it could not be done through the bill.

But we have done it now. That is how Parliament works under an MMP system, and that is why the National Party will always be in Opposition—because it does not know how to work with anybody else. It cannot even work within its own ranks. We constantly see John Key disagreeing with the very good member Dr Lockwood Smith. Dr Smith comes to the House having read his papers, and, although he does disagree with us from time to time, at least he has some logic to his arguments. They are not based on lazy, slack work attitudes like the arguments of John Key, but are based on some of the work that Dr Smith actually does with his colleagues who sit around him.

I am very proud of this bill, and of this Government. This is momentous legislation. In 20 or 30 years’ time people who are sitting in their own homes, or who are comfortably retired with a decent nest egg, will thank this Parliament for this bill. I am proud to be part of the select committee that has done such good work to put this bill into a better shape than it was in when we first received it. I know that when we finish this debate in the House in the next week or so, the bill will be in an even better shape.

CRAIG FOSS (National—Tukituki): I thank the previous speaker, who constantly praised the work ethic of National members. We are a team, a solid team, and we have a couple of key men. The compliments the previous speaker gave us are a compliment to our entire new intake—the 21 new, energetic, ambitious National MPs who will be over on that side of the Chamber before they know it.

I attended virtually every Finance and Expenditure Committee meeting where this bill was discussed—I perhaps missed one somewhere along the way—but I am struggling to recognise some of the committee members from the other side of the House because so many of them sat in various seats to try to hold up Labour’s quorum throughout the discussions around this bill. I think that the previous speaker, Mr Gosche, attended the meetings most of the time, but I struggle to identify most of the other members. I guess that points to how important Labour sees that committee to be—the once-powerful Finance and Expenditure Committee. The Labour stooges were mere “bums on seats”, if you like, to borrow the education analogy. They were there just to provide a quorum. As we know, when the pressure starts to mount, the Minister of Finance, Dr Cullen, will pull one of his strings, something appears, and those members all jump very high.

The National Party opposed this bill at its first reading, and we oppose it again now. As John Key said previously, given the fundamental shifts that were announced at lunchtime today, we will be reserving our judgment over the next week so we can study them further. At first cut, it looks like a reaction to some bad polling. At second cut, we will examine the changes further. I suggest that we probably knew more about the changes announced today, and knew about them earlier, than many of the Labour members, because we are sure they were quite a surprise to them.

The KiwiSaver Bill was promoted as a great scheme to increase the retirement cash holdings available to all New Zealanders for their future. Sadly, the bill has now devolved and been traded away, quite possibly in exchange for non-movement in the indexation of personal tax rates, as United Future has argued and as the Minister announced in the 2005 Budget. Sadly, it has probably been traded away to nothing more than a cheque book. Perhaps it is more like a piggy bank with one hole in the top and one hole in the bottom, because that is essentially and effectively what the changes announced today are.

Essentially, from what we see at the moment of some of the large players, the taxpayer is giving up taxpayer funds to subsidise the mortgage book. How will this help with living expenses? How will this help to pay for the price of petrol? How will this help the thousands of Grey Power members—whom New Zealand First members had a go at yesterday—who are trying to get by? I ask members to tell me how this will help New Zealanders as they struggle through the current shambles of this Government.

I have great respect for the process and integrity of Parliament. I have watched Parliament over many, many years, and I fully respect the processes in this House and in the committees around it. I feel very privileged to be on the once all-powerful Finance and Expenditure Committee—well, it used to be all-powerful. Obviously, it is now stacked and Dr Cullen is pulling the strings all over the place.

The Finance and Expenditure Committee spent many days and many hours on this bill. Officials spent, I guess, thousands of hours, and thousands of dollars, on preparing for and drafting this bill. We studied this bill at length. Officials from different ministries, the Inland Revenue Department and the Ministry of Social Development, actually worked together—which was something quite unusual in this instance—to try to prepare the bill for presentation to this Parliament for debate. Well, obviously the bill has changed. The bill that was sent to the Finance and Expenditure Committee, which submitters studied, on which thousands of hours and thousands of dollars of resource were spent, and which submitters believed was coming through, is now totally different as a result of the changes announced today.

Totally contrary to what the previous member said, I recall a perhaps 2 or 3-minute discussion about, in particular, the mortgage diversion changes announced today. I recall the Labour members shaking their heads and having a bit of a giggle—basically, that idea was not going to fly. When the officials from the Inland Revenue Department and the Ministry of Social Development were asked directly whether they were prepared, whether systems and regulations were prepared, whether everyone was ready, and whether they could handle mortgage diversion, their answer was very simple, loud, and clear—no. Yes, it had been talked about for perhaps further consideration. Little did we know at that time—and in my eyes it was a total abuse of parliamentary process—that that consideration was going on up on the seventh floor and, as the Government was under a bit of pressure, it decided to roll it out and try to get some good headlines.

I congratulate the United Future members on leveraging their votes to bring this policy in. I know that they are very keen on it, so, in that sense, I say well done to them.

Fundamental changes to the bill have been announced today—the mortgage diversion scheme and the changes to the exemption for the specified superannuation contribution withholding tax. In a nutshell, the changes mean that the taxpayer is helping to fund the mortgage payments of those who have a mortgage—it is not even necessarily first home buyers in this instance. What an abuse of process! The bill we considered at the Finance and Expenditure Committee was, I think, about 250-odd pages long. We had hardly any discussion about these two fundamental changes. Many submitters were very, very concerned about the haste with which this bill has been introduced. That was before the fundamental changes that have been announced today.

That brings me to the commentary on the bill, which the previous speaker alluded to. I will quote to the House from the commentary in relation to the concern of many members of the committee. This concern relates to the default provider provisions, the process around which, again, has just turned to custard. Default providers spent hundreds of thousands of dollars on preparing themselves and their institutions to handle KiwiSaver as per the bill they received, which was the bill that we considered. They did not even consider the mortgage diversion scheme or the change in its tax structure. The commentary states, under the heading “Default provider provisions”: “Some members were concerned that the Government progressed the default provider provisions of the bill, matters on which submissions were received, prior to the select committee reporting back to the House.”

Quite simply, the bill was an ongoing, moving beast at the time, yet, in relation to default providers, Mr Cullen is on record as saying it would be very hard for them to lose money—and, in fact, after today’s announcement it will be even harder for them to lose money around this and they will be limited to about four or six providers—yet it was totally skewed for the large providers. Essentially, Australian-owned banks will be the big winners out of this, and, perhaps, Kiwibank.

KiwiSaver was supposed to be a drive to increase savings. It failed. It is hand in hand—or should I say fist in fist—with the taxation bill, a delay in the start date of which was also announced today. It will fail. Here is an example in relation to KiwiSaver. A person on $50,000 invests 4 percent of that money, via a KiwiSaver fund, into US shares. That person will be taxed on his or her dividends, plus 85 percent of the capital gain times his or her marginal tax rate, whatever that might be. It is double taxation. If that same person, who has an income of $50,000, invests the same amount—4 percent, or $2,000—directly into US shares, he or she will be taxed on the dividend only. How on earth is that supposed to help New Zealand’s savings and the efficiency of our markets?

There were about 71 direct submissions on this bill. I believe that we are nudging 4,000 submissions on the capital gains tax bill. In Mr Cullen’s press release today, he talks about how he listened to the impact on submitters and we had a delay in the start date. OK, that is fair enough, but I certainly hope he considers the weight of those submissions, because almost every single one of those 4,000 submitters is saying that the proposed taxation bill, which is hand in hand with the KiwiSaver Bill, must be radically changed. It is an abuse of parliamentary process. If this bill is changed as radically as this 3 hours or so before its second reading, what on earth are we to expect to be lined up for the taxation bill?

R DOUG WOOLERTON (NZ First): New Zealand First supports the KiwiSaver Bill. We support it because we have always supported incentives to save. In the past we have supported compulsory superannuation, and we supported superannuation as proposed by Dr Cullen a few years ago—which, I might add, is proving to be very successful.

It saddens me a little that the National members of the Finance and Expenditure Committee are speaking—at this point, anyway, although that may change later—as fairly practised, experienced, financial operators, which they are. They have a deep understanding of matters financial, but they are not the people this bill is aimed at. The reason New Zealand First supports the bill so strongly is that it aims to encourage a savings mentality in this country. Unfortunately, we have lost a savings mentality since the days of what we like to call the right-wing economic changes during the 1980s. The experiments of those days have shown that the Government should give messages, give encouragement, and, where possible, give education or enlightenment on financial matters.

It is all very well for Mr Craig Foss. I acknowledge his expertise in this area. I acknowledge the expertise of John Key in this area, and, with due respect, that of Mr Tremain and Dr Lockwood Smith. But that is not the way that most New Zealanders understand finance. Those members understand finance in a way that most New Zealanders do not. In our view, this measure is an honest attempt to go some way to get people started on the ladder of financial independence, not only through direct financial savings but, now, through a mortgage scheme. I am sure that my colleague Gordon Copeland will be spending a lot of his time explaining that scheme, because it is a particular hobby of his. So even though professional financial managers may pour scorn on this bill, New Zealand First sees its value to get people with rather less financial literacy involved in saving.

We also congratulate the Government—even though the news has just come out today—on introducing some sort of financial incentive in the form of a tax-free employer contribution. We think that more of that sort of thing should be done. It has been very much out of favour in recent years, but it is now coming back into favour. We think that is a marvellous thing.

I think this bill will succeed in the community. The National Party members are correct—there is a tight financial market out there. It is tough for people on lower incomes, and that is why the employer contribution is so vitally important in this scheme. People simply have not been saving by their own initiative. So this Government has accepted what I believe is the responsibility of a Government and has said it must lead the way. New Zealand First says hallelujah to that.

There was discussion in the select committee about the rate of contributions, and members heard that discussed by previous speakers. There are arguments for making the contributions very low in order to help those who may find it very, very difficult to put in anything at all. Others say the financial institutions would not want to be involved at that low level. Members heard that discussion earlier. People said we should have contributions as high as 4 percent on both sides of the employer-employee scale. I think, personally, that the balance is about right, but that can be seen and tested in future years. As Dr Cullen said in his introductory speech, there is the ability for people to change this scheme. There is the ability to make it compulsory if that is what is decided in the future. There is the ability to enhance the scheme in other ways as Governments of the day see fit, and as people make demands upon those Governments and search for ways to look after themselves.

When we are talking about the default providers, I think it is important to understand that there was some criticism about the process, as Mr Foss read out from the commentary. The Government had to move ahead with those default providers and talk to them, and they had to bid for the business—to use my term, which is not the correct term—before this bill was presented to the House. I must say that I shared some of those concerns, as well. I was happy, in the main, that the National Party put in that rider in the commentary in relation to those provisions. It is quite clear, in our view, that those businesses that have been established in New Zealand for many years and that have a household name will have some advantage for capturing and growing the business. The select committee made its best endeavours to search for a way to even the playing field in order to get in newer, more entrepreneurial providers. I suggest that may not have happened, but we will see who the providers are at the end of the day. I suspect they may be the traditional ones.

I do not want to take up any more of the time of this House. I just wanted to say that New Zealand First is not just a supporter of this bill but an enthusiastic supporter of this bill. People will opt out of the scheme from time to time. I do not think we should be afraid of that. I think it is something that will take many years to become accepted as part of the New Zealand psyche, but I give my congratulations on a great start.

JEANETTE FITZSIMONS (Co-Leader—Green): The Greens support the KiwiSaver Bill as a useful step towards addressing the rather dangerous lack of savings in our society. The household debt-to-income ratio has risen to more than 120 percent—largely on the expectation of increasing equity in people’s houses. If the housing market were to crash, we would have a lot of insolvent people. Something needs to be done. This scheme is an easy way for people to save, with automatic deductions from their pay, and with the opportunity to opt out if they have other ways they would rather do it.

The Finance and Expenditure Committee has ironed out quite a lot of wrinkles in the bill, with the extension of time to implement the changes in order to make sure things can actually be ready to go on the due date, and with a number of ways to reduce compliance costs and risk for employers—for example, by making it clear they are not financial advisers and not to be held accountable for that, by limiting the information they must give to the Inland Revenue Department to what they actually receive from their employees, and by simplifying the reporting requirements. That is all good work we managed to do. But the effect of the bill will be limited in terms of how much saving it can encourage, because so many people do not earn enough to contribute 4 percent of their gross income to a savings scheme. The minimum wage in New Zealand is low compared with other countries, and it is not being raised fast enough.

The bill is designed to encourage people to start saving when they are young. That is because it will give them the longest time over which to accumulate some retirement savings and because it builds in a habit early. That is why the incentive in the bill is linked to first home purchase as a way of getting young people involved. But young people do not earn a lot. They probably earn the least they are going to earn at any stage of their lives. So for many young people 4 percent will be more than they feel they can contribute.

I argued—as the unions argued—that there should be an option to save 2 percent. That is not because 2 percent will accumulate a huge amount of savings for retirement but because it gets a habit in place from the time of the first job. The time of the first job is when we need to get people into saving. That argument was opposed by the rest of the committee on the grounds that if we gave a 2 percent option, then people who could afford to save 4 percent might save only 2 percent, and savings might go down. The reality now, though, is that those who could save 2 percent but not 4 percent will not save at all. Not only will they not save at all now, but later on, when their incomes rise and they can afford to save 4 percent, they will not have the habit of saving, and they may never have the habit of saving. Or they will start saving in their 50s, once the mortgage is paid off and the kids have left home, and they will not have enough time left to accumulate what they need for a decent retirement income.

There is no way of proving whether I am right or whether the other committee members are right, or whether the total savings will be more or less, but I have a very strong instinct that tells me that without the ability to contribute 2 percent, a lot of young people will never get started, at all. Of course, once they have got their first home, there is not the same incentive to join the scheme later.

As a compromise, the bill has been amended to allow employers to contribute half of the 4 percent. When employers do that, the employees will have to contribute only 2 percent. When employers take that step, that will be good, but how many of them will do so? Will the owner of the little cafe who has to be forced to pay the minimum wage now voluntarily contribute an extra 2 percent to a superannuation scheme on top of that? I think many will not. Many of the employees who work in those situations are the most vulnerable and needy of all. It is great that Fletcher Building has made an announcement that it will contribute to the superannuation scheme, and I expect there will be a number of big industrial worksites that will contribute, as part of their employment relations negotiations. Probably they will pay a bit less in wages and a bit more in superannuation contributions. But many smaller employers, whose workers are among the worst paid, will not actually take that opportunity.

Finally, if we are to try to reduce household debt, which is actually the first step towards increasing household savings, we must do something to control the behaviour of the banks, and that, of course, is completely outside anything this bill does. Consumer debt is being forced down people’s throats in a way that has never happened before. Credit card limits are being constantly expanded and mortgage extensions are being thrust at people. Every night in our living rooms we see advertisements saying that we should let our home pay for our overseas trip and increase our mortgage to get a new car. Bank staff are being forced, under performance agreements, to sell credit to their families and friends in their off-duty time.

This is a huge push by the banks to get people into debt, and I really wonder whether the existence of a KiwiSaver scheme will be enough to counter the constant advertising that says we can have all these goodies in life if we just borrow more. Billions of dollars are being spent to foster a culture of borrowing and indebtedness, and we are hoping that the existence of a workplace savings scheme will counter that big push and all of those inducements. I think we underestimate the role that advertising plays in people’s behaviour.

I have not heard any expressions of Government disapproval of that behaviour by the banks. I have not seen Michael Cullen meet with the heads of the banks and say that it has to stop or the Government will find some measure to control it. The attitude just seems to be that it is the market working and the banks can do what they like. So, in addition to this bill—which we do support, because it is a positive measure—let us tackle the lack of savings and household indebtedness at the source.

HONE HARAWIRA (Māori Party—Te Tai Tokerau): Tēnā koe, Mr Assistant Speaker. Tēnā tātou te Whare. Tēnā koe ngā hui. In yesterday’s debate on the Westpac New Zealand Bill, National MP Mr Chris Tremain pointed out how petty it seemed to be talking about technical adjustments to an Order in Council when, in the space of a week, we had been saying our final farewells to our queen Te Atairangikaahu, welcoming our new king, Te Arikinui Tuheitia, and swearing into office New Zealand’s 19th Governor-General, the Hon Anand Satyanand. That is kind of how I feel about the second reading of the KiwiSaver Bill.

A couple of weeks ago, during the parliamentary adjournment, a report on the nation’s social well-being was quietly released—a report that confirmed that although those on one side of the seesaw are becoming heavier with wealth and profit, those on the other side are teetering dangerously close to falling off. There are huge differences in wealth and income between the top earners and those who face the daily grind of poverty, those we know as te pani me te rawakore. It is simply getting worse and worse. The Social Report 2006 confirmed what many people had been warning Governments about for years—that for the last 20 years, while the spectacular wealth of the rich has increased, the relative wealth of the nation has decreased and the income gap has widened. The report stated that a lot more people are on low incomes now than ever before, with 19 percent living below the 60 percent threshold in 2004, compared with 12 percent in 1988. The report also stated that the number of poor people who spend more than 30 percent of their income on housing has more than doubled in that same time.

So for those of us in this House who make the decisions as to how social and economic policies like those intended in the KiwiSaver Bill will affect the nation, the question we must ask ourselves is whether this state of affairs is acceptable. Well, if one belongs to the Ronald Reagan club, one would probably say: “Yeah, why not? A rising tide lifts all boats.” Well, I am sorry to tell people this, but Ronald Reagan was wrong. I have been to Washington, DC, the capital of the greatest capitalist nation in the world, and have stood in the streets of the crack dealers, the drunks, the prostitutes, and the crippling poor—and just up the road I could see the White House. Ronald Reagan’s theories are little comfort to those Māori and other people in this country who struggle every day to put food on the table and to pay the power and the rent.

The 2001 census stated that only 47 percent of Māori lived in their own homes, compared with 71 percent of non-Māori. Today, even Pākehā will tell us that it is bloody hard to scrape together the deposit for a home, when the rent they pay to live in some dive is crippling them and their families. The census also noted that 61 percent of Māori shifted home, compared with 49 percent of non-Māori, and that the main reason for doing so was to get a job. That migration is killing rural economies. In half of the country’s regions there has been more than a 50 percent shift, as people up and move.

This ain’t no accident. This is death by design: the decimation of our home towns, or, as the Government now calls them, “limited employment locations”. The Government now has a policy of saving millions of dollars by actively creating regions of economic desolation and blacklisting areas marked out to be deserts of deprivation. A couple of weeks back members may have seen the article about 412 beneficiaries being warned that if they did not shift quick smart, they could lost their benefit. Surprise, surprise! With that hanging over their heads, people are moving out of the blacklisted areas. Guess what? Now all the local mayors are jumping up and down. New Plymouth’s Mayor, Peter Tennent, said it was unhelpful and that it undermined our smaller communities, and Marlborough District’s Mayor, Alistair Sowman, said the region was crying out for workers, and that the blacklist would put people off moving there. Combined Beneficiaries Union president, Helen Chappell, said that the limited employment location scheme makes little sense, because what we lose on the swings we gain on the roundabouts. In other words, people may shift to an area that is cheaper for rent purposes but dearer for buying food. It is hardly worth it, simply to keep a benefit of $150 a week.

How does all that affect the KiwiSaver Bill? It is really quite simple. How tough is it to ask those who are already struggling to survive to dig deeper, to find the extra 4 percent of their already low incomes to put into the Government’s grand new superannuation saver scheme? The reality is that over the last few years, rents and mortgages have skyrocketed, and the number of people experiencing severe hardship has increased as well, to the point where Family Budgeting Services coordinator Jarrod Rendall reckons that many of the people he sees simply could not afford the 4 percent required under the KiwiSaver Bill. People needing help from budgeting services are already in debt, and the extra 4 percent would mean cutting out essential items like food for many who are on low incomes. That is just too big an ask.

This House must face up to the issues of crippling poverty, high mobility, regional downturn, and beneficiary bullying. These are our people; these are our citizens. Members should not get me wrong; the KiwiSaver Bill has a lot of merit. At its first reading I commended the Government for its commitment to establishing a workplace savings scheme, and said that the Māori Party welcomed the idea of using Kiwi savings as a home deposit. The reality is that right now, as we speak, this Government is implementing a plan to strangle 259 limited employment locations, and to no one’s surprise they are the towns that a lot of Māori people call home. They are places like Te Hāpua, Mitimiti, Rangi Point, Mōkau, Kāwhia, Port Waikato, Reporoa, Rotokawa, Ruātoki, Tokaanu, Maraetai, Waitahanui, Wairākei, Matahiwi, Matawai, Tikitiki, Whangarā, and so it goes on. Those are the towns that today’s bureaucrats want to kill.

The strange thing is that a lot of those towns are like that because yesterday’s bureaucrats put them there in the first place. Te Hāpua was never a metropolis, but it was a strong and thriving community with a post office and a shop, and a lot of people worked in forestry and fishing. Bang, no more post office, so the shop closed because people could not get money any more. Bang, no more forestry, because some clown in Wellington decided to privatise the industry. Local contractors were undercut by the big boys, and there was unemployment. Bang, Māori got fishing quota, and within 10 years there were fewer Māori out fishing than ever before. There was more unemployment.

Places like Te Hāpua, Mitimiti, and the 257 other doomed home towns are the life and soul of our whānau, our hapū, and our iwi. They are places that our people all around the world come back to: their tūrangawaewae—the places that they, and no doubt many members in this House, still call home. Yet, with one slash of the pen, this Government plans to shut those places down, to push our people out the door, and then to tell them not to forget to keep something aside for KiwiSaver. It is hard for the Māori Party to support this bill, because we cannot see that the working poor and beneficiaries are genuinely being looked after, so as to become financially secure and self-reliant into the future.

Finally, I was interested to note the comments from Investment Savings and Insurance Association chief executive Vance Arkinstall, who reckons there are still some major doubts about whether the KiwiSaver Bill will be sufficiently compelling to many New Zealanders. Perhaps instead we should be learning from Ngāi Tahu, who have just launched the world-first Whai Rawa scheme—a long-term savings plan to support whānau independence by increasing personal wealth. Each year Ngāi Tahu will make an annual distribution to the scheme. Whānau will be invited to save their own money too, and, where whānau are able to contribute, the rūnanga will match their savings. That is Kiwi ingenuity; indeed, that is iwi ingenuity. Ngāi Tahu whānau can choose to contribute their own savings and see them matched dollar for dollar by their own iwi. The long-term plan for financial security and independence is iwi saver. That is a concept the Māori Party and everybody else can surely support. Kia ora tātou.

The ASSISTANT SPEAKER (H V Ross Robertson): Just before I call the next member, for the benefit of the previous speaker I refer him to Speakers’ rulings 45/4 and 5 of Speaker Jack, Acting Speaker Young, and Assistant Speaker Braybrooke. The member is new, and I have shown some tolerance and understanding.

GORDON COPELAND (United Future): I very much rejoice in the second reading of the KiwiSaver Bill. In many ways a bill such as this—which is based on a workplace savings process, and, in fact, is a voluntary process—is about 30 years overdue. It was way back in 1975 when Rob Muldoon decided to can the newly announced State savings scheme for New Zealanders. I believe that was actually one of the worst decisions a Government has ever taken in my lifetime.

That decision was taken at about the time when the State of Singapore launched its State savings scheme. At that stage the Singaporean economy—and the standard of living—was a mere fraction of what it was in this country. Today, when we look at our two countries, we see that we are a long way behind Singapore. One of the reasons for that is the tremendous spurt and transformation of its economy that has occurred as a result of the Singaporean State pension and State savings scheme.

I would like to say today to the members of National, now that I know they are reconsidering their position on the KiwiSaver Bill, that they should put their minds forward on the horizon and ask what is genuinely good for New Zealand and what will grow our economy. For goodness’ sake, National should not go down the road of a previous National administration that pulled the plug on something that had such potential to deliver so much for New Zealand. We are all living with the consequences of that decision today. As the previous speaker from the Māori Party, Hone Harawira, has clearly outlined, with the degree of poverty that exists in our country those results have not been positive for New Zealand. I think National members should recall that important part of history when they are making their minds up about whether to support the bill. I encourage them to support the bill, because it is good for New Zealand.

I am very pleased to say that United Future has had a massive input into the design of the bill as it is now emerging. In the last Parliament, as part of our 2005 Budget bid, we asked the Government whether it could bring into the bill some way of specifically helping Kiwis to get into their first home. That initiative has been adopted by the Government. Since I have been on the Finance and Expenditure Committee, I have seen the papers that the officials produced for the Government of that time. Those officials said that that initiative would be incompatible and inconsistent with what the Government was trying to achieve.

United Future was there at the time, saying to the Government: “No, it’s not. Getting into your first home and paying off a mortgage is the root to a good standard of living in retirement.” One has only to look at the difference between people who own their own homes and go into retirement mortgage free and those who are still paying rent to see the reality of that. It makes an enormous difference. We are delighted, therefore, that we were there at the time to say to the Government: “No, no, no. Please overrule your officials, because this is a worthwhile thing to do.” As a result, we will see many more New Zealanders get into their first homes through the $5,000 per saver subsidy from the Government than would have been possible without this bill. United Future was there at that time.

We were there again to consider this mortgage diversion arrangement. When Dr Cullen outlined to me in the 2005 Budget—or preliminary to it—that he would put a mortgage diversion scheme into KiwiSaver, I thought to myself that it was a fantastic idea. I could see immediately that it could be a critical success factor, because I knew that many, many people in our country could not service a mortgage and also save for their retirement at the same time. They simply have not got the income to do so. As many people have said, with the record levels of household debt we now have, that is more difficult to do than ever before for most families. Therefore, to have the ability to divert part of their KiwiSaver contribution over to servicing a mortgage, so that they could do both at the same time, I thought—and I still think—was a win-win situation.

I was therefore very, very disappointed when I found out, in about March this year, that Cabinet had decided to drop the mortgage diversion aspect of that original scheme. It did so on the basis that there were questions about compliance costs and a lack of interest from the Bankers’ Association. Well, KiwiSaver is not about the Bankers’ Association; it is about helping ordinary New Zealanders to obtain the ability to buy a house, the ability to service a mortgage, and the ability to save for their retirement—that is what it is all about. I could not care less about whether it is inconvenient for the banks, because they simply need to wise up, and I am sure they will. I am sure the banks will embrace the mortgage diversion scheme as it has been announced today, because it is in their interests to do so. Banks also have an interest in making sure that people have the ability to service mortgages, because, as Jeanette Fitzsimons has pointed out so eloquently, they are in the business of lending money to make money.

I want to say also that the mortgage diversion scheme, which I will probably speak a bit more about in the Committee stage of the bill, really does address a very important point for New Zealanders and for families. Let me give members an example of a person who is on the average wage of about $43,000. This person will, under the bill, contribute 4 percent, or $33 a week, of that amount to KiwiSaver. Under the mortgage diversion scheme, however, that person, who is saving $33 a week, will be able to divert half of that, or $16.50 a week, to the servicing of his or her mortgage. That will make a huge difference.

Many submitters came to the Finance and Expenditure Committee and said to us that their great fear about KiwiSaver was that people would join in order to save money for the 5-year period required so that they could get the $5,000 subsidy from the Government as a deposit on their first home. The submitters added that when those people had done that, probably all that would remain in KiwiSaver for the next 25-30 years, while they paid their mortgage off, would simply be the $1,000 contribution the Government had put in. The submitters said that that was therefore not great, because they would be administering, potentially, thousands of small accounts with no additional funds coming in.

I believe that was a fair evaluation by those submitters of the potential that this bill had, without the all-important mortgage diversion aspect to it. Now, with the mortgage diversion in place, many more people will stay locked into KiwiSaver, and will continue to give credit knowing full well that they can then take 50 percent of what they put in back out. In a funny kind of a way we got to a point where Jeanette Fitzsimons said to the select committee that we should have a 2 percent option. In a funny kind of way, if we look at it now, we see that people put their 4 percent in but can take out 2 percent to service their mortgage. So their net contribution will be 2 percent. That in itself will bring a lot more people into the loop. Incidentally, I would like to thank the Green Party and the Māori Party for voting in favour of the mortgage diversion option at the select committee.

I must say there are days when I find that I really am in the right party in being part of the radical centre, and being able to come to issues like this with a degree of common sense, without trying to get into the ideologies of the right or the left. I find it interesting, for example, that John Key’s comments today really had little credibility when he perhaps forgot to mention that the National Party had also voted against mortgage diversion at the select committee. At the end of the day it was just a question of letting the volume go down a bit and of people actually sitting back, having an objective look at what is a common-sense idea, and saying: “Yes, that is OK; let’s go with it.” Actually, that is all that happened.

I say to Craig Foss, that the fictional ideal he has come up with, that somehow there was some sort of trade-off against the adjustment of tax brackets, reminds me of a lot of people who read The Da Vinci Code and do not know the difference between fact and fiction—and people are right into fiction when they go down that line, I assure him. The reality is much different. It is just a question of people having the wit to adopt an idea that will be good for New Zealand and good for our future.

There are a couple of other things that I think it is important to state. The commentary on the bill talks about insurance and annuities. I want to talk about the life insurance aspect. In my experience it is quite important that while people are paying off a mortgage, trying to save for retirement, and so forth they also have life insurance. I have seen tragic examples of breadwinners with no life insurance who have died and left behind wives and children. We have included this to remind people and scheme providers that they can provide a life insurance option as part of their scheme. In that case, the savers would need to pay in their 4 percent plus the cost of the premium on the policy. They can do that through the existing mechanism quite simply, and I would encourage scheme providers to do that, because it will be helpful to those people.

Another issue that we debated and I got some clarity on was the ability of scheme providers to use an Inland Revenue Department number, so that people have the one number for KiwiSaver and the scheme provider all the way through. That will reduce compliance costs, which is also a positive aspect.

CHRIS TREMAIN (National—Napier): Late changes to the KiwiSaver scheme announced today are generally positive, but like much of the KiwiSaver scheme they come as last-minute alterations—as rushed and piecemeal legislation. Mr Copeland rejoices in the new legislation and Mr Cullen says it is landmark legislation. I have nicknamed the bill “The Great KiwiSaver Sailor”. It is a lot like the Titanic when it first left Southampton for New York. It was a huge ship, grand, and impressive. It was one man’s baby, complete with all the bells and whistles and the things to make people go “Wow!”, but it was built with serious design flaws and was heading towards a field of very large icebergs.

From the outset, the National Party believed that this important legislation required significantly more thought and better design. It has been rushed through to meet an unreasonable deadline. Last-minute changes to the bill prove this. Last-minute tax changes to incentivise employers’ contributions are a hint. Dr Cullen acknowledges that the scheme will not work without ongoing incentives. As Mr Key said today, it is policy on the hoof. Last-minute changes were made 4 hours before this second reading today. Last-minute changes to allow mortgage diversion are an acknowledgement that the initial thinking, which tried to connect the retirement savings scheme with a first homebuyers scheme, was faulty.

Let me explain how desperate these measures are. Let me explain where this boatbuilder may be taking this boat. The best example of the new measures is the change in the support of the mortgage diversions. The initial scheme did not propose mortgage diversions; the initial scheme proposed that new homebuyers would enter this scheme to take advantage of the new home-loan option—a means of saving $10,000 by way of a $5,000 input from the Government and a $5,000 input by the individual over a period of 5 years. That is an admirable goal, but it gives no consideration to the points that Hone Harawira raised earlier. The fact is that many hard-working Kiwis do not earn enough take-home pay in the first place. In fact, they are so overtaxed that saving is a distinct dream. Recent economic growth projections, with the likes of 0.1 percent and negative 0.1 percent growth earlier this year, are certainly not putting us on any path towards improving that situation for the average Kiwi. It is my opinion that the Government should be focusing on policies that take economic growth forward in leaps and bounds.

In addition, the bill gives no consideration to the fact that many Kiwis will use KiwiSaver to get their initial homeownership payout, then will simply abandon their account and leave it dormant. They will continue down the track of building their retirement savings through the traditional Kiwi means of paying off their mortgage. That is how most Kiwis have created a nest egg in retirement. They have been able to build equity over a period of time, stay up with the market, and use that equity in their retirement. But the Government, in its rush to keep the ship on track, knowing that many Kiwis will bail the ship once they have their $10,000 out for their homeownership requirements, will be in a difficult situation. In this situation—and this is about Gordon Copeland’s mortgage diversion thing—the select committee rejected the idea in the first place. Even though Mark Gosche stood up this afternoon and told us that we supported that, he failed to read a particular part in the commentary on the bill that states: “Therefore, and because of time constraints, we were advised that mortgage repayments would be best handled through financial education and the contributions holiday mechanism.” The fact of the matter is that we decided not to go with it. Yet, 4 hours before this reading, a press release has come out from Dr Cullen and we are now having to deal with these policy changes on the hoof.

So these latest changes—last-minute boilermaking—seek to further keep the Titanic afloat. But really these changes are like patching a gaping hole in a hull of paper. This Titanic piece of legislation has from the beginning been veering off course and Dr Cullen has sought to bring it back on track with additional legislation and last-minute incentives.

Let us have a look at some of the icebergs that have got in the way of this Titanic, and I will speak to five particular key areas. Firstly, there is the responsibility of employers in this particular legislation. Secondly, there are employer compliance costs, which have been well overlooked. Thirdly, there is the issue of compulsion. Fourthly, there are contribution rates. Lastly, there is the KiwiSaver implementation time frame.

Let us come to the first point of employer responsibility for decision making. In the bill, employers were initially going to be responsible for making the decisions. That has now changed and they will not be responsible. However, the reality is that employees will be faced with four to five default providers, with four to five potential prospectuses in front of them. It will fall to employers to understand those prospectuses, and I suggest to members today that most of those employers will be faced with employees coming to them and saying: “Hey boss, sure there’s been some ads on TV, but to be honest with you, I haven’t got time to read through a 50-page submission. What do you think?” As per normal in those sorts of situations, bosses will be faced with trying to give some advice to their employees. I ask members not to overlook the importance of the employers in this situation. It is critical to get employers on side from day one.

Secondly, I want to talk about employer compliance costs. In the Finance and Expenditure Committee, Jeanette Fitzsimons tried to play that out—to understand what the compliance costs were for employers, because she could not just see it. The fact of the matter is that employers will be responsible for making—or helping to make—many of these decisions. They will have to change their software in order to comply with the new requirements for deducting the KiwiSaver contributions. In particular, when the cost of refunds comes up—with the ability to be able to opt out after 2 weeks—the issues involved in getting a refund after a 2-week contribution are significant and will have huge compliance costs.

The third point is the issue of compulsion. At the moment, the compulsory register only applies to new employees, who may opt out after 2 weeks. There will be significant issues around employees who move from job to job and work on a short-term basis; they are covered in another part of the bill. However, there is significant complexity in the refund situation.

The fourth point is the issue of the contribution rates of 2 percent, 4 percent, and 8 percent. Obviously the New Zealand Council of Trade Unions wanted the rates to be as low as possible, but it was just impossible for us to see the impact of a 2 percent payment and how it would deliver any sort of significant growth to employees.

Lastly, National believes the KiwiSaver implementation time frame is too tight. We do not believe there is enough time within which to wind up superannuation schemes. We believe that the marketing and knowledge that needs to be imparted to employers and employees will be difficult within the time frame. We are really concerned that if the scheme is not launched correctly, there will be a loss of credibility in the first place. The last-minute changes that have been made are just that; they are last-minute cries to try to bring this mighty ship back on to the straight and narrow and to avoid the icebergs in order to ensure the scheme’s success. National was given just 4 hours’ notification of those last-minute changes and is reserving its decision on this bill going forward. National believes that the legislation—while having merit—has been too rushed and has not dealt well with many of the issues, especially the ongoing incentives to ensure that people not only take up the scheme but keep it rolling on. We believe that it is critical to ensure a good launch of the scheme so that it does not become the Titanic of the savings industry and so that this Titanic makes it across the Atlantic to New York.

SHANE JONES (Labour): I rise to take a brief call in relation to the KiwiSaver Bill, and I speak as the chairman of the Finance and Expenditure Committee, which both considered and deliberated over this bill. Firstly, I pay a particular acknowledgment to the officials from Treasury and the Ministry of Economic Development, and the formidable team at the Inland Revenue Department, who assisted the committee. When our committee is confronted with either proposed legislation or concepts that have a highly technical dimension to them, we are reduced, in many respects, to trusting the quality of the advisers and the integrity of the work they do. Although there were moments of tension from time to time—as one would imagine in any creative process—I want it to go on the record that we were well served by that group of people.

Of course, this bill really endeavours to deal with a deeper problem that our economy has, which is how to mobilise a pool of savings. Two schools of thought were trotted out in front of us. One was from the Business Roundtable, which insisted that we read an ever-increasing number of tedious and unreadable reports produced by people who are ideologically opposed to the concept of a savings scheme such as this. I am happy to report to my colleagues in the House that I spent not one minute following the quality of advice in those reports. The second was from practitioners in the industry, who are working on a regular basis with families up and down the country and who are confronted by the practical difficulties that mums and dads have when they become kaumātua, grandfathers, and grandmothers, etc. The savings that those families have amassed in their lifetimes may be inadequate, and the families are left to rely on the State-sponsored scheme.

Those practitioners had a great deal of influence on my mind. They served up a host of very practical examples as to how a savings scheme—of a slightly different nature, but serving a similar purpose—has worked to the benefit of the Australian economy. Indeed, earlier this week, in one of the financial dailies, no one less august than a former captain of the New Zealand All Blacks team, David Kirk, pointed out that one of the key differences between our economy and that of Australia, where he is spending most of his business career these days, is that there is a very deep and extensive pool of available funds in Australia. That has assisted companies like Macquarie and the Westfield Group, and the latter, in particular, has created great status and huge wealth by investing in the United States of America. So minds sharper and far more practically experienced than those of our friends from the Opposition are actually endorsing this scheme.

What are some of the changes that have been made to the scheme? Firstly, there was concern as to when participants should be enrolled and when they could bail out. The committee did move in a direction in which we sought to ensure that all workers, with the exception of casual workers or agricultural workers, will be signed up the moment they begin their jobs. From there, they will have the opportunity within a 50-day period, as I recall, to opt out. In addition to that, we had a great deal of debate over the 4 and 8 percent savings figures. In the end, a number of us, although persuaded by some of the passion, I suppose, associated with the arguments put forward by Jeanette Fitzsimons, felt that the very small sum—dare I say the miserly sum—left in an account had we gone for the 2 percent figure would not really be a fund that would be handsome in any manner or form at the end of a person’s working life.

Yes, I note what Mr Copeland said earlier—the mortgage diversion option was discussed by our committee. As the report states, committee members felt that the option had merit, but time exigencies worked against us. I, as the chair of the committee, am happy to see that the option has arrived as a further improvement to this scheme. There is a fear that the scheme either will not be embraced or will not attract people to enrol in it, and that employers may be tempted to work against the interests of the scheme. I do not agree with that, in any manner or form. Employers have a great example to follow in terms of Fletcher Building, which is itself putting money towards the savings of its employees. That, of course, will enhance the sense of loyalty and commitment that an employee has for that enterprise. I think the exaggerated claims about the attitude of the employer community are precisely that—exaggerations. This is a New Zealand enterprise, and both employees and employers have a vital stake in making it work.

Before I resume my seat I would like to say that members of the committee, including Rodney Hide—who, unfortunately, we saw very little of; or fortunately, depending on the mood of the day—worked quite collectively on this bill. Inevitably, there were differences, but I rather suspect that senior members of the Opposition have read the mood of the country well. The mood we saw in Jenny Shipley’s time, when she campaigned up and down the country to undermine Winston Peters when she was meant to be in coalition with him, no longer prevails. There is actually an acceptance out in the community, built on the success of the Cullen fund, that a savings scheme that enjoys a contribution from the State, that is a shared responsibility of employers and employees, that has a subsidy to assist in the administration of the scheme, and that has State-sponsored literature, etc., regarding the scheme—all those interests—will mean that the country, certainly over my lifetime, will be better heeled. It will be better prepared not only to reacquire assets that have disappeared disproportionately overseas but also to enhance a savings culture amongst our young people.

There was such a culture, I believe, at the time when I went to school, with the old Post Office savings scheme. There are two things, or three, that I remember about starting school. The first was my being the monitor who collected the milk. Some would say I have not moved a helluva lot beyond that! The second was learning about the establishment of the Post Office savings scheme, and the third, obviously, was getting the strap on a regular basis. Well, the strap has disappeared, and the milk scheme no longer exists, but, thank goodness, through our Government, the savings scheme and savings ethic has been reintroduced, and will grow as a consequence of this bill. Kia ora tātou.

A party vote was called for on the question, That the KiwiSaver Bill be now read a second time.

Ayes 67

New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1.

Noes 54

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

Bill read a second time.

Bills

Coroners Bill

Third Reading

Hon RICK BARKER (Minister for Courts): I move, That the Coroners Bill be now read a third time. The Coroners Bill is a major reform to improve the quality, consistency, and timeliness of coroners’ investigations and decision making, and to take better account of the diverse social, cultural, and spiritual needs of families. When the Law Commission reviewed the coronial system, it received many submissions saying that despite the high ability and sensitivity of many involved in the coronial process, the current coronial system was haphazard, patchy, unsystematic, and inadequate. The Law Commission noted at the time that more than 70 coroners were spread throughout the country, with differing levels of qualifications and experience. Coroners were mainly working part-time, often in isolation, and with limited formal administrative support. Appointment processes were considered inadequate, and there were no training programmes for coroners. There was a perception that the coronial system did not take enough account of cultural beliefs and values, especially those of Māori. There were also reports that some coronial practices had been insensitive to the needs of families, in relation to the treatment of the deceased, and the removal and retention of body parts.

The Coroners Bill goes a long way to address these concerns by, firstly, establishing the office of the chief coroner to provide leadership and coordination; secondly, moving to a smaller number of mostly full-time legally qualified coroners; thirdly, ensuring families are notified of significant steps in the coronial process; fourthly, introducing a specific regime for attention and release of body parts and body samples; and, fifthly, enhancing inquiry and inquest processes. Families will particularly benefit from these reforms. Among other things the bill broadens the definition of family to take into account modern family arrangements and cultural relationships, allows families to appoint a representative to liaise with a coroner, requires the coroner to perform the duties without delay, requires the coroner to notify families at significant stages of the coronial process, allows families to review and touch the body of a deceased person with a coroner’s authorisation, and gives families the right to object to a post-mortem examination if the death does not appear to be suspicious. It introduces a regime for the retention and return of body parts and body samples, restricts how retained bodily samples can be used, and sets up a process for dealing with complaints about a coroner’s conduct.

The Coroners Bill has thrown up some challenging issues, particularly around suicide and the making public of details of suicide deaths. This is a serious issue and it has been the subject of considerable discussion and debate. Suicide affects all our communities, and our youth suicide, in particular, is a concern. I am pleased to see that we are making good progress in reducing the number of youth suicides with a 25 percent reduction in the number of suicide deaths since 1996.

Suicide is not only a problem for the young. About 80 percent of suicides now occur in people aged 25 and older, and men aged between 25 and 44 years now have the highest suicide rate. The media suggest that removing the restrictions on reporting details of suicide will improve public understanding of the issue and reduce the number of self-inflicted deaths. The Government does not agree. An increasing body of evidence is showing that media reports of suicide can trigger emanative and copy-cat suicides and lead to increases in both the overall number of suicides and the use of a particular method of suicide.

The Coroners Bill does not prevent the media publicly discussing the issues of suicide. It can restrict the publication of the details of a specific case, such as how a person died, for important reasons. The Government wants to encourage public discussion and the understanding of suicide, but it needs to do it in a safe way that avoids further deaths and respects the privacy of bereaved families. I am confident that the approach we have taken is the right approach.

Another issue in the bill has been around the retention of body parts and body samples. This is a completely new regime. The Coroners Bill will ensure that body parts and body samples can be taken only for the purposes of the post mortem, and that families are notified of the proposed retention, and can request the return of the parts and samples. It also restricts how retained parts and samples can be used. These new provisions balance the value of retaining tissues for later examination, against the family’s desire to have the tissue returned for cultural, spiritual, and other reasons. Because the provisions are new we will have to watch to see whether we have the balance right.

There has also been a lot of discussion around the transition arrangements for existing coroners. Our National colleagues have queried the constitutionality of disestablishing existing coroner positions and the matter of compensation. Moving to a smaller number of coroners is a key element of the new coronial system. The Government has given careful consideration to what should happen to existing coroners. We are disestablishing all the positions so that all coroners are treated equally and judicial independence is maintained. There is no constitutional impropriety about disestablishing existing coroner positions. We are not disestablishing positions to remove any particular coroner, and the new coronial system will be a significant improvement.

The question of compensation has been raised. The bill is clear that former coroners are not eligible for compensation as of right. Most coroners work part-time and are paid fees rather than a salary. All legally qualified coroners are eligible to reapply for appointment under the new Act, and experienced coroners are certainly well qualified to be considered for appointment. Reducing the number of coroners has created some concern about a loss of service in provincial areas. Coroners will continue to work in provincial areas as well as the main centres, and working full-time means coroners can spend time building relationships with different groups in the local community. The introduction of new coronial systems does not mean that we do not value the old one.

I want to conclude by thanking all the coroners, justices, and others who have given dedicated service over the years. They deal with some very sad and difficult cases and their contributions have been invaluable to New Zealand and to their local communities. The time has now come to move forward to a new coronial system that will improve the quality, consistency, and timeliness of coroners’ investigations and decision making, and to take better account of the diverse social, cultural, and spiritual needs of the family. I commend the bill to the House.

CHRISTOPHER FINLAYSON (National): On 25 July 2000, Justice Baragwanath, the President of the Law Commission, submitted the report on coroners to the then Minister of Justice, Mr Goff, and it has taken some 6 years to have the legislation reach this stage, and I will say something about that in a minute. The Minister, I think, has quite adequately summarised the problems with the old coronial system, which had been around, as the Law Commission report said, for many years. Indeed, that is what some coroners themselves said. The coronial system seemed to be the poor relation in the justice system, and there were many problems that appeared to be developing with the Coroners Act of 1988. It was described in the report as a haphazard regime.

The Minister has outlined some of the problems with this regime—for example, inadequate procedures for the appointment of coroners, lack of uniformity of coronial practice throughout New Zealand, which in the course of the select committee stage seemed to be a major problem, a real need for the training of coroners to be improved, and, as the Minister commented, a perception that in the coronial system, as it was under the 1988 Act, there was little or no regard taken of cultural values, particularly Māori cultural values and beliefs. So there has been a move, and this is what the Law Commission proposed, toward a more professionalised approach to the appointment of coroners and, particularly important, the appointment of a chief coroner who would be in charge of the coordination of coronial services and the development of an effective coronial support system, importantly including information systems.

So that is what lay at the heart of the Law Commission’s report. As I said, in July 2000 the Law Commission stated that an urgent overhaul of current systems and practices was required, and, interestingly, it referred to the Ontario coroners’ motto, which was “to speak for the dead in order to protect the living”, and that was going to be a key objective of the coronial system in New Zealand. I am disappointed that it has taken so long for this report to give rise to the legislation, which is now at the third reading stage. All too often it takes too long for the reports of the Law Commission to be acted on. The same could be said of the evidence reference, which commenced, I think, as far back as 1989, and is now at the select committee stage.

Tomorrow the Law Commission is celebrating its 20th anniversary, and is having a seminar, and one hopes that over the next 20 years of the Law Commission we will see more of its legislative proposals enacted. This report exemplifies that it does some very good work indeed. So I acknowledge the work of the Law Commission, and, in particular, I acknowledge the work of the commissioner who was responsible for writing the report, and who made a huge contribution, Denese Hēnare. She was on the Law Commission until 30 June 2000, when she was forced off for political reasons. I think it is a great shame that her formidable law reform skills were lost to New Zealand. She was replaced by one of the Labour Party cronies, which is the sort of thing we expect from this Government.

Hon Clayton Cosgrove: Who is she married to?

CHRISTOPHER FINLAYSON: What a sexist remark from the member for Waimakariri—to say that whether one is appointed to a particular position depends on whom one is married to. But that is the sort of thing one would expect from that poor soul.

The passage of the legislation will mean an end to the involvement of JPs in the coronial process, and I acknowledge the huge contribution of JPs in this area of the justice system over the years. In the Committee stage I referred to the experience of one JP in Wellington who had given very generously of her time with no compensation, often at the most inconvenient times. That kind of contribution by JPs is replicated around the country, and I thank them for their service to New Zealand. I also endorse what the Minister said about the large number of part-time coroners who have given of their time over the years. As he said, some of them will be reappointed, and some will not. Their contribution to the justice system also needs to be recognised.

The Minister raised, I think very fairly, the key issues that were dealt with in the Committee stage and in other parts of the legislative process. At the end of the day, National endorsed most of what was contained in the bill, and indeed is very supportive of this move to a more professionalised coronial system. But there are two issues that concern us, and I regret to say that they were not adequately dealt with or responded to by the Government members in the Committee stage.

The first is the important issue that the Minister outlined, which is dealt with in Part 3, about reporting of suicide in the media. As he fairly said, it is a hugely important issue. National warily supports what is proposed, although throughout the Committee stage I noted that what is proposed would probably be the most restrictive reporting regime in the world. It is interesting to observe that the English-Welsh coronial system is undergoing reform at the moment. Those countries have nothing like this, and there is nothing like it in the Australian jurisdictions, either. We support it based on the evidence heard before the Justice and Electoral Committee, although, as I said when we dealt with this issue in the Committee stage, we should keep a very close eye on it. Although there is no formal mechanism in the bill for post-legislative review, we should have another look at the legislation in a couple of years’ time. As the Minister said, youth suicide, in particular, is a hugely important and tragic issue in this country, and we need to make sure that what we have in the bill actually serves the public interest.

The second issue of concern to National is in clause 3 of schedule 3. Schedule 3 deals with arrangements that are effective 12 months after assent. Clause 2 of schedule 3 provides: “On the repeal of the former Act, every former coroner vacates office under that Act as a coroner or deputy coroner.” Clause 3 provides: “No former coroner is entitled to compensation for loss of office as a coroner or deputy coroner …”. Those are the two issues that concern the National Party. Although we say that there is much that is good in the bill, the restructuring of the coronial service being timely, we remain concerned about schedule 3 and the arrangements that will be effective 12 months after assent. As I said in the Committee stage, it is important to note that this provision was the subject of numerous submissions before the select committee. Essentially, the Coroners Council expressed concerns about what was proposed. It obtained an opinion from Mary Scholtens QC, a former Deputy Solicitor-General, who said that what was proposed was unacceptable. The Crown Law Office had a different view. We tried to engage Labour members in debate on the issue, but unfortunately they were not interested. The member for Waimakariri, in particular, just sat there like a stuffed dummy.

The issue that is so very important in this case is that when we are abolishing and restructuring courts, we have to make changes, and politicians must have the right to redo the court structure. But Sir Anthony Mason observed, in a very important article that he wrote some years ago on the appointment and removal of judges, that the practice should be that the judge of the old court should be appointed to the new court created, or to a court of the same status, and that if such an appointment is not available, the court should not be abolished until its judges cease to hold office. In the meantime, the judges should be entitled to the emoluments and entitlements of the old office, notwithstanding that the jurisdiction of the old court is transferred to the new court.

The point National has been making is that although, of course, the Government is right to want to reform the coronial process in the way that has been set out, it is extremely important that those who are not appointed should be entitled to compensation. The Minister said that many coroners work only part time, but the reality of the matter is that the obligations of part-time coroners—often lawyers—around the country can be immense. They may have run down their practices in order to undertake coronial work, and for many of them their practices will not come back readily. So this is a disappointment, because it is an important issue. Those are the two issues that concern the National Party, but that having been said, we support the bill. We think it will amount to a great improvement in the way the coronial system is operating.

Hon CLAYTON COSGROVE (Associate Minister of Justice): I join my colleague the Minister for Courts in supporting the Coroners Bill. I also pay tribute to a coroner of long standing in my electorate of Waimakariri who came to see me some time ago when this bill was going through its earlier stages. His advice—and his view as a person who has been dedicated, in a professional sense, to this sort of work for many years—was very helpful. He is a lawyer in my electorate, one David Crerar. This bill is about moving from a system that had dedicated folks in it but was somewhat ad hoc and fragmented, to a far more professional and coordinated coronial system, and I share the Minister’s views in that respect.

I want to address just a couple of things that Mr Finlayson said—apart from the pomposity that he injects into speeches sometimes. I am told of Mr Finlayson that he fell in love with himself at the age of 4 and has been absolutely faithful ever since, and that is exhibited in Parliament. He spoke about JPs and lamented the fact that somehow on the passing on this bill there would be a passing of JPs. Well, as he said later on in his address, there has to be legal training in respect of these positions as we move to a far more professionalised system.

As the Minister who is charged with looking after those eminent Kiwis who are JPs, I can assure Mr Finlayson that there will not be some sort of great passing of JPs into the wilderness. JPs will continue to do their ministerial and judicial duties, which they have done so well over the last 100-odd years. However, many of them are not legally trained and, therefore, as we ramp this system up to a higher plane, shall we say, there is a need for training to be injected into the system.

I think this is a superb bill. The bill deals with tragic circumstances. Ultimately when families are part of a coronial inquiry it is about tragedy. It is a very serious issue that has been dealt with by the coroners who have served for many years in a very respectful way. The coronial role is a difficult office with difficult decisions and difficult analyses to make. I pay tribute to those coroners and I look forward to the passage of this bill.

RON MARK (NZ First): I rise to say just a few words from New Zealand First’s perspective on the passing of this bill, and to indicate again that we will support the bill’s passage through its third reading. Pretty much everything has been said, but I think it is worth noting that we are all agreed—and not just from the Justice and Electoral Committee’s examination of the bill and of the former coronial system, as opposed to the system proposed in the bill—that the past system was viewed as troubled. Chris Finlayson said it was haphazard, and I think that was a very apt description. The procedures were inadequate and inconsistent. Performance standards varied. There was not really a professional path for coroners, as is proposed in this bill.

In particular, we note with some pleasure the greater recognition of the rights of families and the greater emphasis on cultural and spiritual sensitivity in the procedures that have to be followed. I do not think this country will ever look back upon the affairs at Green Lane Hospital with any great sense of pride. What happened there, in terms of the collection and storage of body parts, was offensive to many cultures within this country, not just to Māoridom. It is hard in this day and age to comprehend that such acts could or would occur. The procedures as defined in this legislation, and the rights as stated now for the families involved, are very clear. Hopefully that will see an end to any practices such as those we witnessed.

The key thing to remember is that this bill will enhance professionalism. We listened to the arguments—and they were good arguments—put up by various members of the House, led again, I think, by Chris Finlayson, as to the rights of those who are currently serving as coroners and their concerns that they would not be compensated for losing their appointments. But New Zealand First notes there is nothing to prevent those people from applying to be appointed as coroners again. The greater advantage will be that they will be full-time coroners and will be paid salaries determined by the Remuneration Authority. The very same Remuneration Authority that sets the wages and allowances for members of Parliament will now be doing that for coroners.

I finish by saying that just as in the case of the justices of the peace legislation that went through recently, it is good to see that some of the inconsistencies in services provided by the Government over the last 20 years—systems and procedures that have become outdated and outmoded—are being addressed. The justices of the peace legislation was a good step. The Coroners Bill is, again, a good step. From my side of the House, I look forward to seeing a similar review of the security guards and private investigators legislation. It is another Act that is out of date by some 34 years, and it is one that I have had discussions on with the Minister, Clayton Cosgrove. I think that when we have finally tidied up that legislation we will look back and, as with this bill, wonder why we did not do something about it a long time ago.

NICKY WAGNER (National): I rise to support the Coroners Bill in its third reading. We have heard an awful lot about this Coroners Bill over the last few months, but it a very interesting and important bill. We know that it replaces the Coroners Act of 1988, and that it has been in need of updating for many years. In fact, it has taken over 6 years to get to the stage we are at now.

The Justice and Electoral Committee heard a large number of submissions and they came from a wide range of people. They came from professionals working in the industry, from organisations, and from families. They were mostly supportive, although, of course, they all had their own issues and concerns. The two issues that really taxed the committee the most were the issues of suicide—particularly youth suicide—and how that is reported in the media, and the disestablishment of the coronial service, in terms of what is going to happen to those coroners who have given us long and faithful service.

In looking at the purpose of the bill, we understand the need to professionalise the coronial service. We heard lots of submissions that highlighted the fact that the actual work being done across New Zealand was often a little bit inconsistent and could have been a lot more effective. We also heard stories where families had perhaps not been treated as sensitively as they could have been, and where perhaps there were clashes in cultures. We thought that it was really important that people had faith in our coronial system, and that professionalisation of the system could support the public’s faith.

In the past, coroners have done a good job for New Zealanders but, as we have noted, most of them were part time. As part-time coroners they tended to do a small number of cases every year, which meant they did not get the experience of repeated cases that a professional full-time coroner would have had. Of course, coroners are only called in cases of sudden and unexpected deaths, so most of their work is done under difficult circumstances and often in emergency situations. That makes the issue even worse, and more difficult for the families who have to deal with those unexpected deaths.

I would also like to comment on the JPs who often pick up the pieces after coroners, and who stand in for them in difficult circumstances. As cases become more complex, as scientific evidence is used more frequently, and as cases become more detailed, now is the time to professionalise this service with full-time, legally qualified coroners.

Another important part of this change is the appointment of a chief coroner. It is very important to have a chief coroner, in terms of leadership and coordination of the coroners who work for the service. Twenty full-time coroners will have greater expertise, and will work better and more consistently, if there are protocols and practice notes created by the chief coroner. Another reason to have full-time coroners is that we expect that a full-time person focusing on only one job will have time to deal with more public education, and will be able to work more effectively with other organisations involved in the service.

When we go back to the submissions, we see that a lot of them were based on unsatisfactory experience of the coronial service. Five main themes came through, and we tried to deal with each of those themes in turn. One of the major issues that seemed to cause the most anguish to families was time delays. In that case we focused on timing, and we asked coroners to do their work without undue delay. Other submissions were from people concerned about the lack of understanding of different cultural values at times of unexpected death. We worked hard and asked long questions to make sure that this legislation is more sensitive to all cultures. There have been restrictive practices in terms of access to bodies, which is an important issue for most New Zealanders. We have been able to come up with new protocols that will make that an easier thing to deal with. There were also complaints that coroners often did not work closely enough with other authorities, and that things could have been much smoother if there had been a better liaison between different departments. Finally, there was another comment that perhaps coroners were not independent enough of the police, and that they did not necessarily make all their own decisions without police interference.

Death, of course, is a frightening, unhappy, and stressful time for any family. An unexpected death is even worse. So in this legislation we have tried to get a good balance between the family’s cultural and spiritual needs, and the public’s need to be able to understand the causes of death and how we will deal with them. Several reforms in this bill really focus on the rights of families and different cultures. I have mentioned timing, and that we have asked that coroners make sure their work is done without undue delay, but we have also been concerned about the location of inquests. We have asked coroners to take into account where families are located, to make it easier for families to attend inquests.

We also thought it was important that we learnt from those unexpected deaths; therefore, we have requested a register of coroners’ recommendations and comments. Very often, coroners make insightful comments about those events, and it is important that their comments are recorded and that the public can have access to the records, so we can learn from them and manage situations better in the future.

The whole issue of body parts and bodily samples was a very sensitive one. My colleague Ron Mark has mentioned the Green Lane Hospital incident. That made it even more emotive when we were talking about it in our select committee. We have tried to come up with a good balance between the need to return body parts and the need to maintain bodily samples, or even parts, under certain circumstances, for research and future analysis. We felt it was really important that those little samples were maintained in cases where there was identification of genetic disorders, which could be useful in the future, and of course in cases of solving crime. But we have provided a mechanism for the return of body parts, which will mean that people can feel secure that their bodies will be respected.

We were concerned about the definition of family, and we have widened the definition to mean family, whānau, or other culturally recognised family groups, and to include those whose relationship to the dead person was spouse, civil union partner, or de facto partner of any sex. We heard submissions from people who were very distraught because they were not allowed to be part of the process with the coroner, because their relationship was not recognised. We also made new, easier ways to deal with viewing, touching, and remaining near, the body—or tūpāpaku for Māori. That provision is extended to include people beyond the family who have spiritual or supportive roles and whom the family select.

Finally, I say that we support this bill. The only exception we are concerned about has been mentioned, which is the disestablishment of coroners who were appointed by a warrant of the Governor-General. I would like to show our appreciation of those coroners, and of the justices of the peace who have supported those coroners. They have worked long and hard for New Zealanders, often in difficult and uncomfortable situations. We thank them.

SUE KEDGLEY (Green): The Green Party will be supporting the Coroners Bill in its third reading, as, it seems, are most parties in this House. Nandor Tanczos was the Green Party MP who was considering this bill in the Justice and Electoral Committee, and he feels very strongly that we should support it and that it has been significantly improved through select committee consideration.

It is one of those bills that passes through this House relatively unremarked, but it is an important bill, with significant implications for everyone who has contact with the coronial system, whether as a grieving family member, a friend, an investigator, or a medical professional, and whether those people are trying to understand a death or helping prevent such deaths in future. It is a huge bill, with 134 clauses over four parts and five schedules.

The Green Party believes that the bill is well overdue. Dissatisfaction with the coronial system is longstanding and significant, and the way in which the role of coroners has evolved has not kept up with the needs of our communities in recent times. There have been a number of criticisms in relation to the inconsistency of standards amongst coroners, delays in holding inquests and bringing findings, the relevance and quality of some of those findings, and the lack of regard to the spiritual and cultural needs of people, in particular—but not confined to—tangata whenua. That is not to say that the story is all bad; in fact, many coroners have given very good professional service to this country and their communities over a number of years. Their contributions have been important and have helped prevent fatalities in a number of areas.

I think it is fair to say that this bill builds on the strengths of the present system—looking at what works well and can be retained or adapted, while attempting to rectify the problems that undoubtedly exist—and the Green Party is of the view that the bill largely does that. Most important, perhaps, this bill professionalises the coronial system. It provides for fewer—but full-time—coroners, who are legally qualified and properly trained for their duties. It is simply not tenable in the complex and materially sophisticated world in which we live for the qualifications and training of coroners, with the important responsibilities they have to discharge, to be ad hoc. The bill provides for coroners’ proper remuneration, to be determined by the Remuneration Authority, and sets in place a clear complaints system consistent with that for judges. It sets up a new office of chief coroner, whose function is to help ensure the integrity and effectiveness of the coronial system. The chief coroner will, amongst other things, issue practice notes and guidelines to help assure more consistency and better service, coordinate support services, and so forth.

In essence, the bill provides for a proper framework to support and improve the work of coroners. As well as legal and medical specialist advice that the chief coroner will provide, the bill also recognises the need for cultural advice to be available, and it contains a number of clauses that recognise the tremendous sensitivity around the handling of dead bodies, especially in relation to post-mortems. The grief that families and friends already feel in these circumstances should not be amplified by insensitive treatment at the hands of coroners and pathologists. The bill has a number of clauses designed to reduce the offence that can be experienced in those circumstances. For the family of a deceased person, the idea that their loved one will go through a post-mortem is quite a traumatic prospect. So there have to be very, very clear guidelines around the basis of the decision as to whether a post-mortem will happen. The bill establishes those criteria, as well as a right to object to a post-mortem being held.

The issue of the reporting of self-inflicted deaths was a matter of some contention and debate, because it is a sensitive issue, and fairly strong submissions were heard from media representatives, in particular, about the public interest in the reporting of suicide. We have an extremely high suicide rate in this country, and there is a good argument to say that we need a more informed and deeper public debate around those issues. The committee took that issue very seriously and had to balance it against other considerations, in particular the sensitivities of families who are already going through a highly traumatic time. The details of the self-inflicted death of a family member being splashed in the media in some way is something that none of us would want to see happen gratuitously.

Another issue is the risk of increasing suicide. There is some evidence that the reporting of suicides in some circumstances can increase the incidence of suicide and can lead to a copycat methodology, which does not necessarily increase the number of suicides, but may increase the number of a certain type of suicide. There is some evidence that the net amount of suicide can also be affected by media reporting. We believe that the bill has struck a reasonable balance on this issue and on many of the other sensitive issues that surround the coronial system. So we are very pleased to see this bill reach the third reading, and we are very pleased to support it. We hope it will result in a substantial improvement to the functioning and operation of the coronial system in New Zealand.

Dr PITA SHARPLES (Co-Leader—Māori Party): Over the last week in Aotearoa the people have been embraced by death. They have stood in line to pay their respects. They have scoured the newspapers, and watched in hushed awe as the ceremonial proceedings of the tangi were televised nationwide. They have cried, and talked, and marvelled at the spectacle unfolding in the public gaze. The tangihanga for the late Te Arikinui Dame Te Atairangikaahu has been celebrated and recognised as a sign of the growing maturity of the nation. It has brought the significance of death into every living room, and we are the richer for it.

It is therefore an excellent coincidence in timing to be considering the Coroners Bill. One of the most consistent messages that has come through has been the appreciation that many New Zealanders have expressed of the way in which Māori approach death. Such an appreciation was echoed in many of the submissions to the Justice and Electoral Committee. Wīremu Wīremu, Tepānia Kīngi, and Martin Waetford from Te Hiku o te Ika raised the issue that Māori must have input into the selection of the chief coroner and the selection criteria. The Dunedin Community Law Centre recommended there should be Māori advocates in the coroner’s office who can liaise between whānau and coroners—advocates who have been ratified by whānau, hapū, iwi, and communities. Te Huinga Roia Maori o Aotearoa, the Maori Lawyers Association of New Zealand, noted that the appointment of coroners must be representative of New Zealand society. It had a particular concern that the coroners and their staff need to have an awareness of tikanga and the appropriate training as a prerequisite for their appointment.

The Māori Party is honour-bound to our constituents, to our customs, and to our culture to raise these issues once more. The Coroners Bill does not address the urgent need to increase the number of Māori coroners. The Coroners Bill does not address the need for coroners to be aware of tikanga issues in order for them to be appointed, or the need for them to receive appropriate training. The Coroners Bill does not include any provision for te reo or tikanga Māori to be a part of inquest proceedings. These are serious flaws impacting on the capacity of the coronial system to respond effectively to the needs of bereaved whānau, including their cultural and spiritual needs.

There are, however, other provisions within the bill that do take into account the recommendation of the Law Commission’s coroners report of 2000. That report identified that the current system did not adequately take account of Māori cultural beliefs and practices. So we are pleased that the bill now allows whānau members to view, touch, or remain near the tūpāpaku, the body of the deceased, with the coroner’s authorisation.

This last clause—the fact that whānau access to their deceased remains subject to the authorisation of the coroner—is insufficient. Tangata whenua absolutely believe that the tūpāpaku should not be left on its own at any stage after death. Whether it be at the place of death, in the hospital, in the home, in the funeral parlour, or at the marae is beside the point. Speeches will be made directly to the tūpāpaku, in the belief that the spirit does not immediately leave the vicinity of the body, and should be coaxed to leave by the speakers. Our processes of farewelling and grieving also bring those dearly departed together to be greeted, respected, and farewelled. We speak of “Ka heke te roimata me te hūpē, ka ea te mate.”—when our tears and mucous fall, the movement from life to death is acknowledged and atoned. Accordingly, access to the tūpāpaku, the body, as soon as possible after death is vital to Māori. Tangihanga, or the death ceremony, for Māori, as seen with the passing of Dame Te Atairangikaahu, requires that Māori gather and begin the mourning ceremonies immediately. Hold-ups in the release of the body, especially without explanation, cause enormous trauma to the whānau. So the explicit inclusion of new sections within the Coroners Act 1988, to ensure there are transparent and uniform procedures for the retention and release of bodies, is very important to our cultural safety and the authenticity of our procedures around death and dying. As we say, “I whānau tātau ki te mate, arā, te tūturutanga o te ora.”—we are born to die, the ultimate journey to life.

A particularly important initiative that has arisen from the passage of this bill is around the need for whānau consent related to the treatment of body parts for any reason other than the post-mortem. Traditionally, our people saw that body parts separated from the body were accorded a ceremony similar to a tangi. Yet, as experience has taught us, in the past it has not been the practice of hospitals to return body parts. So for many whānau the vital healing and grieving processes have been disrupted and disturbed through the disclosure that tūpāpaku—bodies—have been returned with body parts removed. In other cases, lengthy post-mortem examinations or removal of body parts has created major distress for the whānau in facilitating tangi arrangements.

Internationally renowned writer Patricia Grace described the traumatic experience of the whānau whose deceased baby’s eyes were removed in a hospital, for genetic research and experimentation. She described it in her novel Baby No-Eyes. The impact of the removal of the baby’s eyes is described as follows: “When we woke my mother sat up and looked into my face … ‘I want you to know you’re not an only child.’ ‘I knew there was someone,’ I said. ‘You have a sister four years and five days older than you.’ ‘Now I see her,’ I said. ‘Shot. Two holes in her head.’ ‘You mean she has no eyes,’ my mother said. ‘You mean her eyes were stolen.’ ”

The Law Commission recommended that the removal and the retention of body parts must purely and simply be to determine the cause of death, and for no other reason. The Māori Party is pleased, therefore, that the Coroners Bill introduces improved procedures to guide coroners in their work around the retention and release of bodies and body parts, including notifications of reasons for, and likely duration of, such procedures.

Associated with this, we are also pleased that the bill now sets in place a process to object to post-mortems if they are not legally required, and that coroners will be subject to the Judicial Complaints Commission. We would, however, concur with the recommendations from the Dunedin Community Law Centre that there must be much stronger acknowledgment that whānau must know they can actually object to post-mortems, and that the process is clear and simple. The coroner or liaison person must take seriously his or her responsibility properly to inform the whānau of what is involved, and to do so in a way that is sensitive to the recognition of tikanga around the tangihanga.

It is good to be in this House to consider matters that are of such central importance to us all. In Te Ao Māori our waiata, our mōteatea, our imagery, and our allusion are soaked with the heaviness of grief, and the lament is a natural part of life and death. One of our sayings is: “Wahine tangi haehae, he ngaru moana, e kore e mātaki.”, which literally expresses that mourning and laceration by women, like the waves of the sea, never cease. The images that are so vivid in our memory of the last week are those of kuia heaving with despair, crowned with the greenery of the parekawakawa, and bidding their queen her last farewell. But just as those parekawakawa were cast into the grave, so too must we also embrace the fullness of life and living as equally natural in our world. The Coroners Bill will assist with our ability to carry out the processes that respect our tikanga, that respond to the needs of whānau, and that reflect some of our concerns. The Māori Party supports this bill.

There are still many issues to address, and the Māori Party will try every avenue to see that those outstanding issues are considered in the implementation of the bill. Thank you.

LYNNE PILLAY (Labour—Waitakere): As chair of the Justice and Electoral Committee, it is with pleasure and pride that I stand to speak in support of the Coroners Bill. I acknowledge the committee for its skill and commitment in ensuring that the bill was returned to the House improved, in order to ensure that the key provisions were enhanced. Those provisions were establishing the office of a chief coroner, moving to a smaller number of mostly full-time and legally qualified coroners, ensuring that families are notified at significant steps of the process, introducing a regime for the retention and release of body parts and bodily samples, and enhancing the inquiry and inquest processes. That is really important in order to enhance public confidence during what is a very, very difficult time for families.

I acknowledge the sterling work of coroners over many years, the majority of whom were very supportive of the bill and its changes to enhance the coronial system. I also cannot go past this opportunity without acknowledging JPs, who have contributed so much in a very meaningful way and, I have to say, on a voluntary basis. It was important to the members of the committee that the report recognised the tremendous service that JPs have provided over many, many years.

The only significant issue of disagreement between committee members related to the issue of compensation for retiring coroners, which was raised by a very, very small number of coroners. The majority of the committee and, indeed, the majority of coroners, held the view that compensation was inappropriate. However, Dr Worth of the National Party appointed himself as the shop steward for the retiring coroners and advocated for a compensation package. I would hope that the National members show the same consideration for workers’ rights and withdraw Wayne Mapp’s 90-day “dismiss at will” bill. Thank you, Mr Deputy Speaker.

Dr JONATHAN COLEMAN (National—Northcote): It is a pleasure to be speaking in the third reading of the Coroners Bill. Many of my colleagues on both sides of the House have given the issues a pretty thorough canvassing, and they have been well summarised.

I know that this bill seeks to put some structure around the profession of coroner, but I think it is fair to say that the country has been very well served by the people who have carried out the coronial function in a very professional manner for decades and decades. It is extremely worthwhile that we in this Chamber pay tribute to the men and women who have held the position of coroner over the years. We currently have 54 coroners, most of whom work on a part-time basis. As we know, they come from a range of professions and backgrounds—from the police and from the professions of law and medicine. But now, with the appointment of 20 full-time coroners, many of those people will be forced to reapply for their positions. Obviously, most of them will not be successful in doing that.

There is no doubt that our society has changed since the original Coroners Act was drafted, and it is important that the coronial function actually reflects the needs of the society it serves. We live in a modern and dynamic society, and the new legislation reflects that. More considerations have to be accounted for around the coronial process in the country we live in now than once might have been the case.

This bill aims to ensure that the coronial system responds better to the needs of bereaved families. It aims also to address the cultural and spiritual needs of all New Zealanders. New Zealanders need to be reassured, when they are confronted by extremely sensitive circumstances at what for most people would be a disastrous stage of their lives—when a loved one or close relative is the subject of a coronial inquest—that wherever they go in New Zealand there will be a consistency of process. That is what this legislation will provide.

I know that in past years there have been issues for many New Zealanders around the release of bodies to families in time for funeral services to be performed. That has created a great deal of distress for people. Now, under this legislation, there will be certainty and standardisation. All New Zealanders will know what they can expect when they deal with a coronial office.

The purpose of this bill really is to help prevent deaths and to promote justice through investigating and identifying the causes and circumstances of sudden or unexplained deaths, or deaths that occur in special circumstances. This legislation will allow coroners to make recommendations or comments with the aim of reducing the number of further deaths in similar circumstances.

The bill has a number of key elements. Firstly, it will establish the office of a chief coroner—a position we have not had before in this country. The appointment of a chief coroner is something that is probably long overdue. A key function of the position will be to oversee the performance of, and the standardised procedures carried out by, the 20 new full-time coroners. The result is that there will now be rigorous processes around coronial inquests and that a consistency of service will be offered across the country.

This legislation will set down guidelines for professional standards to which coroners will adhere. Of course, coroners have performed their function to the highest standards of professionalism, but the terms under which they operate, and what may be called their practice guidelines, have never really been established. A further key element of this legislation is to ensure that families are notified at each step of the coronial process. When people are in distress over the loss of a loved one, the timeliness of the inquiry can often make a huge difference to how they deal with the grieving process.

But, as members have already heard, the National Party is concerned about the unconstitutional nature of the idea of justice missing the existing coroners. Two clauses in schedule 3 of the bill are particularly relevant. Upon repeal of the Coroners Act 1988 every former coroner will have to vacate office. What is worse, the new bill ensures that no former coroner is entitled to compensation for loss of office. People will be told, after years of service, that they are no longer required and that they will receive no compensation when they go.

It is important to note that under the existing Act coroners are appointed by the Governor-General by warrant. They had tenure until the age of 68, and that was later modified to the age of 72. Now their warrants are being cancelled and the Ministry of Justice is comfortable with that. The National Party view is that particular care needs to be taken in respect of such constitutional provisions. One would expect that people make their arrangements and commitments on the basis of security of tenure—a tenure that will not be served out for the majority of them, as the pool of coroners is reduced from 54 to 20. We think this is harsh treatment indeed and we have grave reservations in this regard. It would be not unreasonable for coroners who are not being reappointed to receive some financial compensation.

The second element that the National Party takes some issue with, but is supporting—although we will continue to watch it with a sceptical eye—is that of the reporting of suicides in the media. As has been reported in the media recently, there has been a 20 percent increase in suicide attempts in the last 7 years and a 45 percent increase in attempted suicides amongst young women aged 15 to 24. If members look at the actual outcomes of mental illness, they will see that this is a particularly clear and measurable outcome. It is something that we really do have to be concerned about.

Although I do not think it is clear-cut that it is in the public interest to restrict the reporting of suicides, I accept that this bill will give coroners the discretion to do so. That is a very good thing, because there is no question that we have a suicide epidemic in this country. However, a point to make is that in no other jurisdiction in the Western World are the rules around the reporting of suicide as stringent as they are here in New Zealand. For that reason, this is something we will have to keep under review.

We have to look at how people in those young age groups actually communicate. People in the 15 to 24-year-old group now get a lot of their information through the Internet, or by text messaging, and not necessarily through the print media. So making parents and family members aware of issues around youth suicide may actually be of greater overall benefit to society as a whole.

I think we need to be really quite cautionary in saying that we are keen to have a long-term, blanket ban on media reporting of suicide. There was, of course, last year in Gore a situation of seven youth suicides spread over a space of just a few short months, and that was shattering for that community. There was some speculation as to whether media coverage might have played some role, but I think, on balance, there is benefit to having media transparency.

In conclusion, the National Party supports this legislation and sees it overall as a step forward. In doing so, we pay tribute to those who have served, and who continue to serve, as coroners. We still maintain that the dismissal of many of the existing coroners is unconstitutional, and we will be maintaining a sceptical watch on provisions around the reporting of suicide in the media.

Bill read a third time.

Bills

Meat Board Amendment Bill

Third Reading

Hon JIM ANDERTON (Minister of Agriculture): I move, That the Meat Board Amendment Bill be now read a third time. This bill was introduced into the House on 22 March. It had its first reading on 30 March and was referred to the Primary Production Committee on that day. The select committee reported the bill back to the House on 25 July. The bill has now had its second reading and has passed through the Committee stage.

The bill clarifies one of the provisions within the Meat Board Act of 2004 regarding the allocation of access to meat export quota markets. It clarifies that a mechanism established by the New Zealand Meat Board for the allocation of rights to quota markets may allocate access to quota to any person who is a registered meat exporter, whether or not that person currently exports meat products. The bill therefore upholds the original objectives of the Meat Board Act 2004. It will remove any perceived ambiguity in the original drafting of the legislative framework. Making quota available to all registered meat exporters, whether or not they actually export meat products, ensures that the financial benefits associated with access to quota markets will continue to be available to the wider meat industry in New Zealand—and many members will understand the implications of that for our export markets and quota systems.

The definition of “meat industry” in the current Act includes livestock farmers, meat processors, and meat exporters. The presumption is that processors who are not necessarily exporters at present but who produce export-quality meat products should benefit from the quota markets themselves, and exporters who are not processors should also benefit. There was some controversy about this, I know. But I also know that the original intention of this House has been validated by this amendment. Specialist exporters who are able to develop niche markets but do not process meat themselves should also be able to benefit from quota. Tradability of quota rights helps to maximise the value of meat quotas. It promotes competition for the supply of livestock—and that assists the on-farm community—and helps ensure that all meat industry participants, including processors, exporters, and livestock farmers, can benefit from export quotas.

The meat industry makes a very significant contribution to the New Zealand economy. By international standards, our meat industry is highly productive and efficient. New Zealand’s meat processors employ the most advanced technologies available anywhere in the world, and our exporters have developed niche markets in the international community. Our livestock farmers are extraordinarily innovative, and through their levies they make significant investments in research, product, and market development. Put simply, the meat industry is a critical part of the New Zealand economy. It has been in the past, is currently, and will be for as far into the future as we can see.

It is vital, therefore, for New Zealand’s economic future that the meat industry continues to perform at a high level, and this bill, in my view—and I am sure in the view of most members—assists in that process. I thank the members of the Primary Production Committee for their consideration of the bill and for the report that they tabled on 25 July. In doing so, I wish the meat industry well and I commend the bill to the House.

NATHAN GUY (National): I rise in support of the third reading of the Meat Board Amendment Bill in front of us this evening, but in doing so that does not mean I rise in support of the Government, at all. I actually rise to support the landowners of New Zealand, the meat producers, and the meat industry in general. I am not supporting the Government, because who would want to support those members right now? They are a corrupt, dishonest lot—$882,000 of taxpayers’ money used—[Interruption]

Mr DEPUTY SPEAKER: Would the member please withdraw and apologise—that offends the House.

NATHAN GUY: I withdraw and apologise. I am trying to say that I am not supporting the Government through my support of this bill; I am supporting the primary production industry, which Government members do not seem to care too much about. Those members have all the buzzwords spinning around, but they are doing very little to help people at the grassroots—the engine room of the economy.

This bill will tidy up a bit of ambiguity surrounding the quota system. The system has been operating since 1997, and in 2004 it was enshrined into an Act. The legislation will actually stop a legal challenge from occurring, and the Primary Production Committee supports it.

I think it is important to give a few numbers around this sector. Exports worth $4.5 billion come from this industry, and in about another 5 years’ time that sum is forecast to be out to $21 billion. Passing this bill through its third reading this evening will allow meat industry operators who hold an export licence to gain benefits right through to the farm-gate level. It is important that competition is alive and well in this industry, and this amendment bill will ensure that the money will flow right through to the grassroots—right through to those people at the farm gate, the engine room of our economy.

I think that to ensure that the money flows through from the farm gate into the provincial towns and the economy, we need to ensure that we continue to capture the green and natural image we hold in this country. I need to endorse the farmers out there who are doing their utmost to follow the Dairying and Clean Streams Accord; many of them are now also getting up to speed with nutrient budgeting. When we look at that whole quota market, we see that this legislation is about ensuring that we protect the natural state we have here. It is extremely important, as we look into the quota aspect, that the actual—

Hon Clayton Cosgrove: What?

NATHAN GUY: I tell Mr Cosgrove, if he would stop interjecting from the back row and just listen, that I am trying to say that the true value of the quota is around making benefits from what we have in this country, an island nation. Those benefits are around our green, natural state. That state is what we have; it is what a whole lot of other countries do not have.

I was fortunate enough in 2000 to go on a Winston Churchill Memorial Trust Fellowship.

Hon Clayton Cosgrove: Was that with the council?

NATHAN GUY: No, it was not. Mr Cosgrove keeps going on about double-dipping, and I have mentioned to him before in the House that I am still on the council, and that I am not double-dipping. I tell Mr Cosgrove that I am not collecting my salary—let us put that on the record and carry on with what is in front of us now.

I was saying, in relation to my Winston Churchill Memorial Trust Fellowship, that when I went over to North America I followed produce—beef exports—from this country right through from gate to plate. I saw the produce slaughtered, I followed it through on to the ship, and I was at the Delaware port when it arrived. Our produce went through the whole quota process, and when it arrived in North America it was great to see that it met the stringent standards of the United States Department of Agriculture. Our processors in this country are doing a fantastic job in meeting the department’s standards, which are stringent around food safety. Having gone through some of the plants in North America, I can say that it is amazing to see how stringent we are in comparison with some of those companies. The money from this quota flows through to those people at the farm-gate level, and it is really, really important, fundamentally, that we meet the United States Department of Agriculture’s stringent food quality standards.

It is also important, as we look at this legislation going forward and capturing the true benefits through to the farm-gate level, to ensure that we have enough money going into biosecurity in this country. If we had a tuberculosis outbreak, an outbreak of bovine spongiform encephalopathy—mad cow disease—or an outbreak of foot-and-mouth disease here, this bill would not matter. It would not matter at all, because such outbreaks would be detrimental to the engine room of our economy, represented by primary production people, whom I do not think get enough recognition in this House. So we, and the Government, in particular, need to ensure that we have enough money going into biosecurity. We saw a bit of a scare last year at Waiheke, did we not? That showed just how vulnerable we are in this country. We must at all times realise that if we had such an outbreak here, agriculture would be, as a former Labour Prime Minister mentioned, a sunset industry.

But that is not what is happening now. When we look at those figures that I talked about before, we see that, just from the meat producers, $4.5 billion of exports is going out every year—and that is forecast to be out to $21 billion in another 5 years’ time. Meat production is a significant export earner that has money flowing right through to those people at the farm-gate level and into our rural and provincial towns.

Just to summarise, I tell the House that we had about five oral submissions on this bill through the Primary Production Committee. We had some other submitters who unfortunately could not come and make their submissions in person, so we read those submissions. We looked at both sides of the argument—and the argument clearly had two sides. We took our time in digesting all of those different thoughts, and we came up with the fact that we just needed to tidy up this legislation. That is why the amended bill will go through this evening. National is supporting the bill because it will tidy up any ambiguity and it will ensure that competition carries on in what is an extremely important industry to New Zealand. That is not acknowledged on that side of the House, but it is here tonight by the National Party.

STEVE CHADWICK (Labour—Rotorua): I am proud to take a quick call on the Meat Board Amendment Bill, following the previous member, Nathan Guy, who mentioned “clean and green”. Well, a member has to be a bit green to start to accuse the Government of being corrupt, and Nathan Guy must come clean himself about the role he is still undertaking with his district council and whether he is drawing a salary.

I just want to get on record that Federated Farmers currently have scored our Minister of Agriculture, Jim Anderton, 10 out of 10 for his relationship with the rural sector. I must ask the member opposite how long ago it was that a National Government Minister of Agriculture had such a good attitude and relationship with the rural sector. I want that to be on the record.

This bill simply removes the ambiguity that could get in the way of our current trading relationships with our trading partners. I congratulate the Primary Production Committee on getting through its considerations quickly. It is an important symbol to the rural sector that we will move quickly when we have to get impediments to trade out of the way. If that is what the Meat Board wants, that is what the bill will deliver. It is a good thing for rural New Zealand. Thank you.

ERIC ROY (National—Invercargill): I am delighted to take a call on the third reading of the Meat Board Amendment Bill. This certainly is an issue that needs to be settled. The ambiguity that was mentioned is not at all helpful to one of our prestige industries. The meat industry is such an industry.

I remind members that about 20 years ago we had 70 million - odd sheep and we were killing lambs when we got short of feed or short of money. There has been a total reversal in the attitude of the producers today, as well as the processors and the marketers. Today we have somewhere under 40 million sheep and we are producing the same tonnage of sheepmeat.

Today the product in the market place has certainly elevated in status from somewhere on the bottom shelf to the second-top shelf, if not the top shelf, in terms of value and prestige. New Zealand is indeed fortunate that it has access to the highest-paid markets in the world, and they are the quota markets of the European Union. We are also fortunate that we have a significant proportion of the quota trade. If we look at sheepmeat traded internationally, we see that New Zealand has about 55 percent of the sheepmeat traded across borders—that is referring to the European Union as one particular border. So we are a very big player, and we have a quota market into the European Union.

It is significant to note that the quota rent comes back to New Zealand because the quota is owned by New Zealand, it is protected by statute, and it is managed by the industry. That is a very intricate and interesting relationship. We have the three players operating together to deliver the value, which we do have, out of our quota markets.

Debate interrupted.

The House adjourned at 6 p.m.